Match Group Hosts First Investor Day, Announces Initiation of Dividend, New Share Buyback Authorization

Rhea-AI Summary

Match Group (NASDAQ: MTCH) announced significant shareholder return initiatives during its inaugural Investor Day, including a new quarterly dividend program and share buyback authorization. The company will initiate a $0.19 quarterly dividend (approximately 2% annual yield), payable January 21, 2025, and authorized a $1.5 billion share buyback program.

The company plans to return at least 100% of free cash flow to shareholders over the next three years through dividends and buybacks, with at least 75% through the buyback program. For Q4 2024, Match Group expects to meet revenue targets excluding FX impacts but anticipates results below previous guidance when including approximately $15 million in larger-than-expected FX impacts. The company maintains its target for 36% Adjusted Operating Income margin for full-year 2024.

Positive

• New $0.19 quarterly dividend program initiated (~2% annual yield)
• New $1.5 billion share buyback authorization
• Commitment to return 100% of free cash flow to shareholders over next 3 years
• Maintaining 36% Adjusted Operating Income margin target for 2024
• YTD share repurchases of $753 million completed

Negative

• Q4 revenue expected below guidance due to $15 million FX impact
• Tinder's new user declines on Apple iOS remain at lower levels
• Foreign exchange headwinds affecting financial performance

Insights

Financial Analyst

The initiation of a $0.76 annual dividend ($0.19 quarterly) yielding over 2% marks a significant shift in Match Group's capital return strategy. Combined with the new $1.5 billion share buyback authorization, this demonstrates strong free cash flow generation and commitment to shareholder returns. The company's pledge to return at least 100% of free cash flow over three years through dividends and buybacks is particularly noteworthy. However, Q4 guidance suggests some headwinds, with FX impacts of approximately $15 million affecting revenue expectations, though the 36% adjusted operating margin target remains intact. The iOS user decline situation at Tinder remains a concern, potentially impacting near-term growth.

Market Research Analyst

The inaugural Investor Day signals Match Group's strategic pivot toward greater transparency and structured capital return policies. The dividend initiation is particularly significant as it may attract income-focused investors and potentially broaden the company's investor base. Their commitment to return 75% of free cash flow through buybacks demonstrates confidence in their business model, despite ongoing challenges with Tinder's iOS user acquisition. The comprehensive leadership presentations, including insights from brand CEOs and the focus on AI integration, suggest a coordinated effort to reposition Match Group as a tech-forward, shareholder-friendly company. This could help differentiate it from other growth stocks and potentially lead to multiple expansion.

Company to Present Insight into Strategic Priorities, Vision for the Future, and Medium-Term Financial Outlook

Announces the Initiation of Quarterly Dividend of $0.19 Per Share and $1.5 Billion Share Buyback Authorization

DALLAS, Dec. 11, 2024 /PRNewswire/ -- Today, Match Group (NASDAQ: MTCH) will host its inaugural Investor Day, with executives outlining the Company's strategic priorities and vision for the future, along with its medium-term financial outlook, capital allocation priorities, and total shareholder return algorithm. In conjunction with Investor Day, the Company announced initiatives to return capital to shareholders, including initiation of a cash dividend program and a new $1.5 billion share buyback authorization.

A livestream of the event and presentation materials will be available starting at 9:00 a.m. Eastern Time (ET) today on the Match Group Investor Relations website: https://ir.mtch.com.

The day's sessions will include presentations from Match Group CEO Bernard Kim, President and CFO Gary Swidler, Chief Technology Officer Will Wu, and incoming CFO Steven Bailey, and will feature detailed presentations on Match Group's industry-leading portfolio of brands from their respective leaders, including Tinder CEO Faye Iosotaluno, Hinge CEO Justin McLeod, Evergreen & Emerging CEO Hesam Hosseini, and MG Asia CEO Malgosia Green, as well as a question and answer session. 

"Match Group stands as the clear leader in our industry, powered by a diverse portfolio of iconic brands," said Bernard Kim. "Today, we're excited to showcase our strategy and vision to drive innovation – particularly through the use of AI and cutting-edge technology – to redefine dating and propel Match Group to its next chapter of growth. Our dividend announcement and additional buyback authorization underscore our confidence in the strength and durability of our business model and cash flow generation, and our commitment to delivering consistent, long-term value for shareholders."

Initiation of Quarterly Dividend Program; Authorization of Repurchase Program

Match Group has consistently prioritized returning capital to its shareholders in a predictable manner. The Company intends to return at least 100% of free cash flow to its shareholders over the next three years through a combination of payment of a quarterly cash dividend and by continuing its share repurchase program.  

The Company announced its Board of Directors has declared a cash dividend of $0.19 per share of outstanding common stock, payable on January 21, 2025 to shareholders of record as of the close of business on January 6, 2025. Going forward, the Company expects to declare a dividend in a similar amount on a quarterly basis, subject to market conditions and approval by the Board of Directors. Assuming a dividend of $0.19 per quarter for the fiscal year, this equates to a dividend of $0.76 annually, which at current share prices would imply a more than 2% annual dividend yield. The Company believes it has the capacity to increase the amount of the quarterly dividend in the future.

The Board of Directors also authorized the repurchase of up to an additional $1.5 billion in aggregate value of shares of Match Group common stock, which will take effect when the existing share repurchase authorization, of which $247 million in aggregate value of shares of Match Group common stock remains available, is exhausted. While repurchases during any quarter may vary depending on a number of factors, including market conditions, the Company expects to return at least 75% of free cash flow through its buyback program. Year to date, under its current authorization, the Company has repurchased $753 million of Match Group common stock and intends to resume its buybacks after it releases Q4 2024 earnings. 

Match Group's shares of common stock may be purchased on a discretionary basis from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions or other means, including through Rule 10b5-1 trading plans. Share repurchases may be commenced, suspended, or discontinued at any time.

An Update on Q4 2024

Match Group is also providing an update on its financial outlook for Q4 2024 as part of Investor Day.

Excluding impact from foreign exchange (FX) rates, the Company expects to be within the Q4 Total Revenue range and the Tinder Direct Revenue range communicated on its Q3 earnings conference call. When the impact of FX rates is included, the Company expects Q4 Total Revenue and Tinder Direct Revenue to be below the outlook previously provided due to FX impacts that were approximately $15 million larger than anticipated at the time of our last earnings call, roughly two-thirds of which is attributable to Tinder. Match Group still expects to achieve an Adjusted Operating Income margin of 36% for the full year 2024.

Consistent with what the Company assumed in the Q4 outlook provided on its Q3 earnings call, Tinder's new user declines on Apple iOS remain stable at lower levels but have not fully recovered to the early September trend line.

Investor Day Details

On December 11, the Company will livestream the Investor Day presentation and question and answer session starting at 9:00 a.m. ET on ir.mtch.com. A replay of the conference and the presentation materials will be available on the Investor Relations website following the event.

Non-GAAP Financial Measures
Adjusted Operating Income is a supplemental measure to U.S. generally accepted accounting principles (GAAP). A reconciliation to the most directly comparable measure under GAAP is attached to this press release. Adjusted Operating Income should be considered in addition to, and not a substitute for or superior to, the most directly comparable measure under GAAP.

About Match Group
Match Group (NASDAQ: MTCH), through its portfolio companies, is a leading provider of digital technologies designed to help people make meaningful connections. Our global portfolio of brands includes Tinder^®, Hinge^®, Match^®, Meetic^®, OkCupid^®, Pairs^™, PlentyOfFish^®, Azar^®, BLK^®, and more, each built to increase our users' likelihood of connecting with others. Through our trusted brands, we provide tailored services to meet the varying preferences of our users. Our services are available in over 40 languages to our users all over the world.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements that are not historical facts are "forward looking statements." The use of words such as "anticipates," "estimates," "expects," "plans" and "believes," among others, generally identify forward-looking statements. These forward-looking statements include, among others, statements relating to: Match Group's future financial performance, Match Group's capital allocation plans and strategy, Match Group's business prospects and strategy, anticipated trends, and other similar matters. These forward-looking statements are based on management's current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Actual results could differ materially from those contained in these forward-looking statements for a variety of reasons, including, among others: our ability to maintain or grow the size of our user base, competition, the limited operating history of some of our brands, our ability to attract users to our services through cost-effective marketing and related efforts, our ability to distribute our services through third parties and offset related fees, risks relating to our use of artificial intelligence, foreign currency exchange rate fluctuations, the integrity and scalability of our systems and infrastructure (and those of third parties) and our ability to adapt ours to changes in a timely and cost-effective manner, our ability to protect our systems from cyberattacks and to protect personal and confidential user information, risks relating to certain of our international operations and acquisitions, damage to our brands' reputations as a result of inappropriate actions by users of our services, uncertainties related to the tax treatment of our separation from IAC, uncertainties related to the acquisition of Hyperconnect, including, among other things, the expected benefits of the transaction and the impact of the transaction on the businesses of Match Group, and macroeconomic conditions. Certain of these and other risks and uncertainties are discussed in Match Group's filings with the Securities and Exchange Commission. Other unknown or unpredictable factors that could also adversely affect Match Group's business, financial condition and results of operations may arise from time to time. In light of these risks and uncertainties, these forward-looking statements may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of Match Group management as of the date of this press release. Match Group does not undertake to update these forward-looking statements.

GAAP to Non-GAAP reconciliation (Dollars in millions)
	For the year ended December 31, 2024
Operating income	$823 to $828
Stock-based compensation expense	265
Depreciation and impairment and  amortization of intangible assets	162
Adjusted Operating Income	$1,250 to $1,255
Total Revenue	$3,475 to $3,480
Operating income margin	24 %
Adjusted Operating Income margin	36 %

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SOURCE Match Group

FAQ

What is Match Group's new quarterly dividend amount and when is the first payment?

Match Group announced a quarterly dividend of $0.19 per share, with the first payment scheduled for January 21, 2025, to shareholders of record as of January 6, 2025.

How much is MTCH's new share buyback authorization?

Match Group authorized a new $1.5 billion share buyback program, which will begin after the existing authorization (with $247 million remaining) is exhausted.

What percentage of free cash flow will MTCH return to shareholders?

Match Group plans to return at least 100% of free cash flow to shareholders over the next three years through dividends and share buybacks.

How is MTCH's Q4 2024 performance affected by foreign exchange rates?

Foreign exchange impacts are approximately $15 million larger than anticipated, causing Q4 Total Revenue and Tinder Direct Revenue to be below previous guidance when including FX effects.

What is Match Group's expected Adjusted Operating Income margin for 2024?

Match Group expects to achieve an Adjusted Operating Income margin of 36% for the full year 2024.