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The online dating industry had a somewhat awkward second quarter. Global spending showed a modest 3% year-over-year growth — in line with JPMorgan analysts’ expectations.
Cory A Carpenter, Daniel Pfeiffer and Doug Anmuth shared their views on the online dating industry in the light of the recent earnings reports. There’s one key observation they share: Not all dating apps are feeling the love equally.
Match Group Inc (NASDAQ:MTCH) owned Tinder showed “encouraging signs of stability” this quarter, with growth holding steady at 1% year-over-year.
On the other hand, Bumble Inc's (NASDAQ:BMBL) attempt to reignite the Bumble dating app’s appeal with a much-hyped relaunch seemed to fizzle out faster than a bad first date. The result? Bumble had to dramatically cut its 2024 revenue outlook from a hopeful 8-11% down to a mere 1-2%, prompting JPMorgan to revise their third-quarter industry growth expectations from 3% to just 1% year-over-year.
While Bumble struggled, Match Group’s Hinge and China-based Beijing Kunlun Tech Co.-owned Grindr, were the life of the party.
Hinge, with its "sustainably growing over 20%” year-over-year, achieved a whopping 48% year-over-year growth, while Grindr wasn't far behind with 34% year-over-year.
These apps have consistently “exceeded expectations” in recent quarters and show no signs of slowing down. In fact, the analysts predict Hinge will continue to shine with 35% year-over-year revenue growth in 3Q, while Grindr is set to see a 23% increase.
As we look to the future, JPMorgan analysts remain cautiously optimistic. They expect online dating trends to start improving in the fourth quarter of 2024, with a return to high-single-digit (HSD) growth in 2025. Tinder is expected to step up its game, with growth projected to move into the mid-single digits, driven by gains in both revenue per payer and user numbers.
However, the road to lasting love (and growth) isn't without its bumps.
The analysts warn that to maintain high single-digit growth beyond 2025, the industry will need a serious dose of innovation. Without fresh features and a more satisfying user experience, the online dating world could be in for a cold swipe left.
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