Match : Q2 2023 Shareholder Letter

Letter to Shareholders

Q2 2023 | August 1, 2023

Second Quarter 2023 Financial Highlights

• Total Revenue grew 4% over the prior year quarter to $830 million. On a foreign exchange ("FX") neutral ("FXN") basis, Total Revenue was $844 million, up 6% over the prior year quarter.
• Direct Revenue grew 5% (up 6% FXN) over the prior year quarter to $816 million.
• Tinder Direct Revenue was up 6% (up 7% FXN), while other brands collectively were up 3% (up 5% FXN) over the prior year quarter. Within other brands, Hinge Direct Revenue was up 35% (same FXN) versus the prior year quarter.
• Payers declined 5% to 15.6 million over the prior year quarter.

• RPP increased 10% over the prior year quarter to $17.41 (up 12% FXN).
• Operating income was $215 million, representing an operating margin of 26%.
• Adjusted Operating Income was $301 million, representing an Adjusted Operating Income Margin of 36%.
• Operating Cash Flow and Free Cash Flow were $330 million and $292 million, respectively, year- to-dateas of June 30, 2023.

See reconciliations of GAAP to non-GAAP measures starting on page 21.
1. Q2'22 operating loss includes a $217 million impairment of intangibles relating to the Hyperconnect	2
acquisition.

Dear Shareholders,

Our Q2 financial and operating results demonstrate Match Group's ability to reignite momentum and position the company for consistent, long-term success. In the first half of 2023, Match Group capitalized on effective organizational improvements, which led to better product and marketing execution at our brands, to deliver strengthening financial performance. We expect these trends to continue, with momentum increasing through the rest of the year.

Tinder's leadership team, which has now been in place for a full year, has built a more stable, focused organization galvanized around common objectives. Tinder's strategic decision to focus the first half of the year on optimizations and a bold marketing campaign has yielded both revenue acceleration and improved user trends. Tinder's It Starts with a Swipe™ campaign has resonated with its key user demographics and helped more firmly establish its position as a global dating leader. Tinder is now developing a refreshed user experience that aims to meet the expectations of its target audience, Gen Z.

There are also signs of success and continued progress in other parts of the portfolio. Hinge's traction in English-speaking and Continental European markets led to accelerating revenue growth in Q2; Hyperconnect's deployment of AI-enabled technology is showing results at Azar; and we've unified our Evergreen & Emerging brands under one shared vision and begun to consolidate our Evergreen businesses onto a single tech platform.

Improved performance at our existing brands enables us to put more focus on innovation. We're dedicating significant efforts to building AI-enabled capabilities that help solve daters' pain points and aim to bring resistors into the dating category. We're taking a deliberate and thoughtful company-wide approach to these efforts, and deeply believe that with Match Group's scale, long history in the category, and engineering capabilities, we're poised to lead in this area.

We know there is still much work to be done, but are pleased with our progress over the past 12 months. We look forward to sharing more positive developments with you over the coming quarters.

Bernard Kim ("BK")	Gary Swidler
Chief Executive Officer	President &
	Chief Financial Officer

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Business Trends

Q2 2023 Performance

Match Group achieved record Total Revenue in Q2 of $830 million, up 4% year-over-year ("Y/Y"), exceeding our expectations. Match Group's Total Revenue was up 6% Y/Y FXN to $844 million.

Tinder® Direct Revenue of $475 million grew 6% Y/Y, as RPP rose 10% Y/Y to $15.12, driven by pricing optimizations and new weekly subscription packages. Payers declined 4% Y/Y to 10.5 million, primarily because of pricing optimizations in the U.S., which reduced conversion. Tinder saw an acceleration of subscription revenue growth throughout the quarter. In addition, Tinder's ongoing marketing and product efforts helped drive better new user and reactivation trends, which also contributed to improved revenue trends.

Hinge® Direct Revenue grew 35% Y/Y, with a 24% Y/Y increase in Payers to 1.2 million and an 8% Y/Y increase in RPP to slightly above $25. Hinge continued to grow in English-speaking markets, as well as in its European expansion markets, leading to overall downloads growing nearly 50% Y/Y in Q2. Hinge is now one of the top three most downloaded dating apps in 14 markets globally.

Match Group Asia ("MG Asia") Direct Revenue declined 4% Y/Y. Azar® continued to accelerate, growing revenue 24% Y/Y, helping to partially offset ongoing weakness at PairsTM and Hakuna®. The 4% Direct Revenue decline was a substantial improvement, following three consecutive quarters of double-digit revenue declines.

Evergreen & Emerging ("E&E") Direct Revenue was down 5% Y/Y, the strongest performance since Q1 2022, with continued strong growth at our Emerging brands. An ongoing focus on marketing spend and other operating costs within E&E continues to support our overall margins while we are making strategic investments elsewhere in the business.

Q2 Operating Income, which includes stock-based compensation expense, was $215 million, representing a margin of 26%. Marketing spend was up $11 million, or 9%, Y/Y and flat as a percentage of Total Revenue at 16%. We continue to be disciplined in how we allocate marketing dollars across our businesses, with $13 million in Y/Y cost reductions at the Evergreen brands facilitating investment in our growth brands, particularly Tinder and Hinge. Product and development costs were up 9% Y/Y, but flat as a percentage of Total Revenue at 11%. Cost of revenue was up 4% Y/Y, but essentially flat as a percentage of Total Revenue at 30%. IAP fees, which included $8 million paid into the escrow related to the Google litigation, increased 1.4 points Y/Y as a percent of Total Revenue.

Adjusted Operating Income ("AOI") of $301 million in Q2 topped our expectations, growing 5% Y/Y, representing a 36% margin, driven by Tinder's outperformance and continued overall cost discipline across Match Group. We incurred nearly $6 million in severance and similar costs during the quarter.

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TINDER

Tinder's strategy of focusing on revenue-generating initiatives in the first part of the year has led to financial momentum, allowing the brand to focus more heavily on user experience initiatives and ecosystem enhancements, which we expect will help drive sustained user and revenue growth over the long term. The team has made terrific progress through the first half of '23, and we're increasingly optimistic about Tinder's longer-term trajectory.

Revenue Initiatives Delivering Momentum

Towards the end of Q1, Tinder introduced new U.S. pricing optimizations, which helped drive incremental revenue growth throughout Q2. While Payers were negatively impacted due to lower conversion, we expect the price actions to effectively maximize revenue over both the near- and long-term. We have not seen any notable ecosystem detriments, as the Payers lost generally remain active on the platform and continue to send and receive likes and messages as non-paying users.

While Tinder saw significant revenue benefits from price optimizations in the U.S., upon further testing in several international markets, it did not see meaningful benefits and ultimately elected to leave pricing in those markets unchanged.

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