MTCH - NASDAQ

Good day, and welcome to the Match Group First Quarter 2025 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Ms. Tanny Shelburne, Senior Vice President of Investor Relations. Please go ahead, ma'am.

Thank you, operator, and good morning, everyone. Today's call will be led by CEO, Spencer Rascoff; and CFO, Steven Bailey. They'll make a few brief remarks, and then we'll open it up for questions. Before we start, I need to remind everyone that during this call, we may discuss our outlook and future performance. These forward-looking statements may be preceded by words such as we expect, we believe, we anticipate or similar statements. These statements are subject to risks and uncertainties, and our actual results could differ materially from the views expressed today. Some of these risks have been set forth in our earnings release and our periodic reports with the SEC. Also during this call, we will discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the published materials on our IR website. These non-GAAP measures are not intended to be a substitute for our GAAP results. With that, I'd like to turn the call over to Spencer.

Thanks, Tanny. Good morning, everyone. This is my first full quarter earnings call as CEO, and I want to start by saying how proud I am to be here and how energized I am by the opportunity ahead. We are a company with a powerful mission to spark meaningful connections. Our job is to deliver on that mission with urgency, excellence and a consumer-first mindset by building products that reflect how people want to connect today. Over the last 3 months, I have visited many of our offices around the world, spoken with hundreds of employees and gathered insights from thousands of users across our apps. Each conversation with a Match Group team member has reinforced how deeply our people believe in this mission. That mission orientation, combined with our product innovation and platform scale puts us in a strong position to act decisively as we chart the future of personal connection. One of my priorities is evolving Match Group from a collection of independently managed brands into a unified product-led organization that prioritizes innovation and user outcomes and operates as one company, not 4 divisions to gain the full benefits of our scale and multi-brand portfolio. Today, we announced a reorganization centralizing key functions, including select technology and data services, customer care and content moderation, media buying and international go-to-market functions, while still allowing each brand to maintain their independence and product roadmaps. We've also taken some hard, but appropriate steps today to sharpen our focus, including a planned 13% reduction of our workforce, as well as closing a number of open roles and further tightening operating expenses. These actions position us to achieve more than $100 million in annualized savings, including approximately $45 million of in-year savings in 2025. But more importantly, these changes make us more nimble, more focused and better aligned, enabling faster decision-making, reducing management layers, including around 1 in 5 managers overall, so individuals can have greater impact and accelerating our ability to ship products and features that deliver meaningful user outcomes. These savings will enable us to deliver the margin goals we outlined at our December Investor Day, while also providing the ability to invest in ways that we believe will return us to growth. I want to acknowledge the extraordinary contributions from and give thanks to those who will be leaving the company as a result of these decisions. Their hard work helped strengthen our position and make future success more possible. We're acting with urgency, making bold long-term decisions and relentlessly prioritizing user outcomes. The best tech companies operate in product-first builder mode, and this next chapter at Match Group is about getting back to that, fewer layers, faster execution and a culture focused on creating value through innovation. This is a big change, and the company is responding positively to this culture shift. We are already operating with greater clarity, discipline and speed. In fact, our solid financial and operating performance to start the year reflects the focus and resilience of our teams. In Q1, both Match Group total revenue and adjusted operating income came in above the high end of our guidance, driven by business performance that was in line with expectations, favorable foreign exchange trends and ongoing rigorous cost management. Turning now to Tinder, our biggest brand and the number one most downloaded dating app worldwide. We are making tangible progress on our product roadmap and starting to see green shoots. Our priorities at Tinder are to rebuild trust on the platform through a cleaner ecosystem, to deliver better user outcomes and to reenergize the user experience, all of which are foundational to driving long-term engagement and sustainable growth. While our Hinge brand leads the category for those looking for a serious relationship or what we call intentioned dating, Tinder is the leading app for younger users looking for lighter, lower pressure connections. To meet the needs of this Gen

Thank you, Spencer. Hello, everyone. Thank you for joining the call this morning. We're pleased with our start to the year and with our Q1 financial results. As Spencer mentioned, both Match Group total revenue and AOI exceeded the high end of our guidance range in the quarter, driven by business performance that was in line with our expectations, favorable FX trends and ongoing cost discipline. In Q1, Match Group's total revenue was $831 million, down 3% year-over-year, down 1% year-over-year, FX neutral. FX headwinds were $5 million less than we anticipated at the time of our last earnings call. Excluding the exit of our live streaming businesses, total revenue was down 2% year-over-year, up 1% year-over-year FXN. RPP grew 1% to $19.07, while payers declined 5% year-over-year to $14.2 million. Indirect revenue was a record quarter, up 31% year-over-year, driven by an increase in spend from our top advertisers. Tinder direct revenue in Q1 was $447 million, down 7% year-over-year, down 4% FXN. Tinder payers declined 6% year-over-year to $9.1 million, and RPP declined 1% year-over-year to $16.38. Year-over-year payer declines were impacted by user trends, which are still declining year-over-year, but at a stable rate. Tinder's monthly active users declined 9% year-over-year in Q1. Operating income in the quarter was $193 million, down 8% year-over-year, representing an OI margin of 42%. AOI in the quarter was $228 million, down 5% year-over-year, representing an AOI margin of 49%. Hinge continued its strong momentum in Q1 with direct revenue of $152 million, up 23% year-over-year, up 24% FXN. Hinge's strong download performance continued across both core English-speaking and Western European markets. Hinge maintained its number one ranking across 10 countries and the number two ranking in its Western European markets overall in the quarter. Payers grew 19% year-over-year to 1.7 million, driven by strong user growth. RPP grew 3% to $29.90, driven largely by subscription price optimizations across several core markets. OI was $29 million in the quarter, up 55% year-over-year, representing an OI margin of 19%. AOI was $43 million, up 47% year-over-year, representing an AOI margin of 28%. E&E's direct revenue was $149 million, down 12% year-over-year, down 11% FXN, driven by Evergreen brands decline of 15% year-over-year, partially offset by a 3% year-over-year increase at emerging brands. Ex-Live, E&E direct revenue was down 8% year-over-year, down 7% year-over-year FXN. E&E is executing on its consolidation plans and is on track to migrate Plenty of Fish and Meetic, its final 2 brands later this year. Payers declined 16% year-over-year to $2.4 million, while RPP rose 5% year-over-year to $20.76. In Q1, E&E delivered OI of $7 million, down 61% year-over-year, representing an OI margin of 4%. AOI of $29 million was down 25% year-over-year, partially due to the timing of marketing spend for an AOI margin of 19%. Match Group Asia delivered direct revenue of $64 million, down 11% year-over-year, down 7% FXN. Ex-Live direct revenue was down 2% year-over-year, up 3% FXM in Q1. Azar direct revenue was down 1% year-over-year, up 5% year-over-year FXN as it continued executing on its European and U.S. expansion efforts. Payers direct revenue was down 3% year-over-year, flat year-over-year FXN, driven by ongoing stability in the Japanese market. Across Match Group Asia, payers increased 5% year-over-year to 1 million. While RPP declined 15% year-over-year to $21.23, partially due to FX impacts. OI was $3 million in the quarter, representing an OI margin of 5% and AOI was $19 million, up 43% year-over-year, representing an AOI margin of 30%. OI and AOI benefited from a tax reserve release in the quarter. Moving to profitability. In Q1, total company OI was $173 million, down 7% year-over-year, representing a margin of 21% and AOI was $275 million, down 2% year-over-year, representing a margin of 33%. Looking at costs, including stock-based compensation expense, total expenses were down 2% year-over-year in Q1. Cost of revenue decreased 8% year-over-year and represented 29% of total revenue, down 1 point year-over-year, driven by lower IP fees and reduced variable expenses from the shutdown of our live streaming services mid last year. Selling and marketing costs decreased $8 million or 5% year-over-year due to lower marketing spend at Tinder and Match Group Asia and was flat as a percent of total revenue at 19%. General and administrative costs increased 5% year-over-year, up 1 point year-over-year as a percent of total revenue to 13%, driven primarily by severance and other employee compensation-related expenses. Product development costs grew 4% year-over-year as a result of higher SBC expense, primarily at Tinder and Hinge and were up 1 point as a percent of total revenue to 15%. Depreciation and amortization increased by $1 million year-over-year to $32 million. Turning to the balance sheet. Our gross leverage was 2.8 ttimes and net leverage was 2.4times at the end of Q1. We ended the quarter with $414 million of cash, cash equivalents and short-term investments on hand. In Q1, we repurchased 6.1 million of our shares at an average price of $32 per share on a trade date basis for a total of $195 million and paid $48 million in dividends, deploying over 135% of our free cash flow for capital return to shareholders. We maintain our commitment to return 100% of free cash flow to shareholders through share buybacks and the dividend. In late January, we repaid the $425 million outstanding balance on our term loan with cash on hand. Now turning to guidance. We expect Q2 total revenue for Match Group of $850 million to $860 million, down 2% to flat year-over-year. This range assumes a 1 point year-over-year tailwind for FX and a 1 point year-over-year headwind for the exit of Hakuna and other of our live streaming businesses. FX and E- Live, we expect total revenue to be down 2% to down 1% year-over-year. We expect Match Group AOI of $295 million to $300 million in Q2, representing a year-over-year decline of 3%, and AOI margin of approximately 35% at the midpoint of the ranges. We expect costs associated with the restructuring of our operations to be $17 million in the quarter. Excluding these restructuring costs, we expect AOI to increase year-over-year by 3% and AOI margins to be approximately 37% at the midpoint of the ranges. Our full year 2025 Match Group total revenue guidance of $3.375 billion to $3.5 billion remains unchanged. Our full year results could be impacted by macroeconomic conditions or changes in FX rates, both of which remain volatile and difficult to predict. Our business is not directly subject to tariffs. And because a significant portion of our revenue is derived from subscriptions, which tend to be stickier than impulse purchases like a la carte, our business has historically been relatively resilient to macroeconomic impacts. We've seen some impacts to ALC revenue in the past, especially at our brands with younger users or those with less discretionary income, and we've started to see some impacts to ALC revenue at Tinder in recent weeks, which we are monitoring closely. We are prepared to take pricing, merchandising or other actions to minimize the impact to our financial performance should these trends persist. The recent decline in the dollar relative to other major currencies helped our Q1 results, and we expect FX to be a tailwind to year-over-year total revenue growth in Q2, helping to offset any consumer spending-related headwinds. We expect Match Group AOI to be within the previously disclosed full year guidance range of $1.232 billion to $1.278 billion on an as-reported basis and roughly in the middle of the range when excluding approximately $25 million in costs associated with the restructuring of our operations. We expect to achieve our full year AOI margin target of 36.5%, excluding these restructuring costs. e now expect SBC expense in 2025 of $280 million to $290 million, meaningfully lower than the range we provided at our last earnings call due to restructuring of our operations and our continued focus on managing headcount and SBC expense. As Spencer outlined, we've taken meaningful steps to become a flatter, more efficient product-first organization. We expect these changes to help us achieve our margin goals, excluding costs associated with the restructuring of our operations and better position the company to weather any macro headwinds. We expect them to also greatly improve product execution and accelerate innovation, which in turn should lead to improved growth and shareholder value over time. Now let's open it up to Q&A.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And the first question will come from Nathan Feather with Morgan Stanley. Please go ahead.

Hey, everyone. Thanks for the question. Interested to hear given the cost reduction actions you just announced, can you help us think through how you're balancing investment and efficiencies to maximize productivity and product velocity? Thank you.

Yeah. Thank you for the question. So what we announced today were fairly deep cuts, $45 million of in-year savings, $100 million of annualized savings, primarily from labor, and now we turn our attention to OpEx where we think we can find even more savings. That - on top of those numbers, it's about a 15% reduction in stock-based compensation expense, which is about $45 million a year of annualized SBC. The cuts today really had 2 goals. The first was to create a more nimble organization to break down silos to create more of a unified match group and a number of the organizational changes associated with the cuts speak to that. And the second goal was to cut deeply enough that we could feel confident in hitting the Investor Day targets and also reinvest for growth. So the nature of your question was about the reinvestment. So to provide a little more clarity there, we're basically taking these savings and turning around and investing them in international expansion, both in terms of product development, as well as customer acquisition for a variety of brands, including Tinder, Hinge, the League, Pairs, Azar and others. We're also investing in the GameL [ph] segment through product and customer acquisition. And third, we're continuing to invest in Tinder product as well. So I'd say these -- to summarize, these cuts, they make us increasingly confident in our Investor Day targets. They allow us to leave full year guidance unchanged, and they also allow us to reinvest for growth. Operator, next question please.

Your next question will come from Cory Carpenter with JPMorgan. Please go ahead.

Hi, thank you and good morning. Spencer, you've certainly enacted a lot of change in your first few months. Hoping you could talk about your priorities for the company and how you may do things differently, while still standing behind the Investor Day targets you just mentioned. Thank you.

Thanks, Cory. Yes, it's been a busy first couple first 100 days or so. So firstly, I'd say I've been incredibly impressed with the quality of the team here and their mission focus and their desire to innovate. I'm also increasingly confident in our ability to improve user and consumer and even media perception of the category. I think this category is fixable. I feel like we've made a lot of progress in the first 100 days reducing red tape and reducing process and changing a culture away from analysis paralysis and creating a renewed sense of urgency, breaking down barriers and really driving culture shift at the company, including a prioritization of our users. In terms of my priorities, my first priority is operating as one Match Group so that each of our brands from Meetic to Pairs to Azar to our affinity brands to, of course, Tinder and Hinge, so each of our brands can benefit from the combined scale of Match Group. That is new news. This company was not acting like one company. It was acting like many different individual apps, many of which are subscale. And Match Group brings enormous scale and technology and other benefits to the table. And so my number one priority is making sure that we reap the benefits of one Match Group. My second priority is growing Tinder audience, and we took a huge step forward today with the changes that we're making, which we'll probably talk more about here later in the Q&A. But changes in org structure, speed, product strategy, product positioning, a lot is changing at Tinder. Number three, my third priority is to help Hinge continue its growth in the intentional dating category. Hinge is doing amazing and making sure that Hinge continues to benefit from Match Group overall, so Hinge can continue to achieve its mission. That's a key priority for me. And then finally, and sort of overarching all of these other more tactical priorities, where I spend much of my time and attention and focus is on employee engagement and company culture, creating urgency, driving innovation, creating accountability. I view that my greatest use of my time is to make the more than 2,000 people that work here better. So I'm driving a high degree of urgency. I'm operating in founder mode. I am locked in, and we're off to a really good start so far. Operator next question please.

The next question will come from Ygal Arounian with Citi. Please go ahead.

Hey, good morning, guys. Just on the cost cuts and reinvestment first. So with the cost cuts here in the $100 million annual run rate and kind of using that to feel more confident in hitting Investor Day margin targets while reinvesting. So what's changed exactly since December when you set these targets? Is it the feeling that you need more product investment to get to better growth? Just trying to understand that dynamic. And then maybe we can talk a little bit about the Tinder product stuff and that broader definition of connection. Spencer in the letter in your remarks, you talked a little bit about some of the products today that are trying to achieve that. And maybe just expanding a little bit on how that roadmap -- product roadmap might change to achieve this a little bit better over the coming years. Thanks.

Why don't I take the -- thanks for the question, Ygal. Why don't I take the first part? The Investor Day targets from a margin perspective haven't changed, where we said we would improve margins by 50 to 100 basis points per year over the next few years. What has changed is we've accelerated some of those cost reduction plans. We weren't counting on a restructuring to achieve our 2025 margin targets. We've accelerated those plans. We've done it with urgency, and that's allowed us to stick with our commitment of 36.5% margins, excluding onetime costs for 2025, which was the target we laid out in February, while enabling us to invest in areas that we think are necessary to drive the revenue growth we're expecting to achieve over the next couple of years. So that's the way I would think about margin targets and reinvestment.

Yes. So basically, I came in here and said, why do something in 2027 that we could do in 2025. And we lit a fire under the team here, and we pulled forward a lot of organizational changes, cost reductions, reorganization, reshaping and restructuring of how the company operates. And that pulled forward savings, which now we're reinvesting. Regarding Tinder, today's changes, they rightsized the team. So we are reducing 18% of the Tinder org. We're removing 24% of managers at Tinder, and that creates a much more nimble, more accountable team. From a leadership standpoint, we're also taking the ASL, the Art and Science Lab team, which was a stand-alone innovation function, and we are putting those folks directly into the Tinder org, and that brings a new burst of energy innovation, technical excellence, product excellence into Tinder, which is going to be terrific. Just focusing on product velocity for a moment. By many measures, such as code commits or experiments that we have in flight, we're operating at about twice the pace as we were just a couple of quarters ago. And we've had 2 great quarters of really good product momentum. I mentioned in the prepared remarks, the early success of double dating and the daily curated AI drop. We have an exciting college roadmap as well. So I feel a high degree of confidence in the Tinder road map. There is definitely a high degree of urgency, I can assure you. These turnarounds take time, though. This is a product-led turnaround. And we've seen other companies like Snap or Pinterest or even Uber build innovative products that take time in order for their ecosystem to absorb them. Product-driven turnarounds are difficult, but they are possible to do at scale. And today, we took a big step forward in terms of moving that ball down the field. Operator next question please.

The next question will come from Shweta Khajuria with Wolfe Research. Please go ahead.

Thank you for taking my questions. Let me try two, please. One is on App Store changes and impact -- potential impact. Are you making any changes across your apps to allow for alternative routes? And if so, have you tested them? And what are you seeing? Any update on that would be great. Thank you. And then the second question is, you mentioned if macro gets worse, you have some thoughts on maybe potential pricing changes or other changes that you could do - you could make. Could you please provide some color on that? Thanks a lot.

Yes. Thanks for the question. Why don't I take this one? Thanks for the question. Appreciate it. So on IAP, yes, we're encouraged by the court's decision in the Apple versus Epic case, which allows link outs to web purchases without incurring IP fees. I think it's a win for consumer choice and a win for developers. When we saw the news last week, the teams quickly sprang into action. Most of our brands in the U.S. have submitted app releases at this point. We're testing a number of things, including discounted offers on web, CRM and push campaigns, web payment options on rate cards. And we'll share those learnings across the portfolio, which is a unique strength of ours. Apple did file an emergency motion yesterday on parts of this ruling, including commissions. So we're going to have to see how that plays out. They are currently still approving app submissions. So we're going to have to see how the appeals process plays out and whether these policy changes are put permanent. But for now, we are acting with urgency and have submitted app releases across most of our apps. The way I would think about opportunity sizing is this, about 45% of our revenue is in the U.S., two thirds of that is in Apple's App Store for which we pay Apple about a 27% commission on average. So if we were to shift just 10% of App Store purchases to web, that would save us approximately $25 million in fees, assuming same conversion rates and before any discounting. So it could be very meaningful for us. And again, we're going to have to see how this thing plays out. We haven't included any of it in our guidance, but I think it does offer some meaningful potential upside. On the second part of your question on macro, let me just remind everybody, we talked about a little bit about this in the prepared remarks. Our business is relatively recession-resilient historically, not entirely recession-proof though. Subscription revenue tends to hold up quite well, which is the vast majority of our revenue, as most of you know, but we have seen some impacts to ALC revenue in the past at brands with younger users or those with less discretionary income like Tinder, for example. And so over the past few weeks, we've just started to see some early signs of weakening Tinder ALC trends among younger users in particular. So it's still early. We're watching it closely. We're prepared to take pricing, merchandising or other actions to limit its impact. And if some of you might recall, we did a similar - we took a similar tact a couple of years back when we faced some sort of consumer weakness, and we're able to do things like reduce the bundle size of a la carte offerings like Boost, effectively offer lower incoming price points that are more palatable to consumers that are feeling a pinch in their pocketbook. I'd also say that the restructuring efforts we announced today does position us to weather potential macro headwinds. So I think we're in fairly good shape. The last thing I would say is we're not seeing any of these macro headwinds across the subscription revenue base at Tinder or at any of our other brands thus far, including Hinge, where we haven't seen any of it either. Thanks for the question.

Thank you. That was very helpful.

The next question will come from John Blackledge with Cowen. Please go ahead.

Thanks. Two questions. First on Tinder, any way to think about Tinder's paying user trajectory as we work through the year? And then second question, Spencer, you mentioned a little bit earlier addressing potential OpEx savings after this restructuring announced today. Just curious if you could expand a little bit there. Thank you.

Yes. Thanks for the question. On payers, as you know, it's not a metric we're specifically focused on. We're focused on improving user trends, MAU trends, which will in turn lead to improved revenue trends. So that's really the focus of the management team and of Tinder specifically. But what I would say is we don't expect let me start with MAU trends. MAU trends continue to decline. They declined about 9% in Q1, which is a similar rate of decline that we've seen in the past handful of quarters. So still declining but at a stable rate. That is leading to payer declines, of course, which are also continuing to decline at a relatively stable rate as well. And so what we're focused on doing is turning around improving those MAU trends through product innovation that will lead ultimately to payer improvement and revenue. I wouldn't expect payer trends to grow this year. I'd expect those trends to continue to decline, but likely at a stable rate like we're seeing with MAU until some of the product innovation work bears fruit. On OpEx, yes, as Spencer mentioned, the focus of the last 3 months was on reorganizing the company and reaping not only headcount savings, but reorganizing the company to be leaner, faster and better set up for success. We have now shifted our focus to OpEx where we think there are a number of opportunities. We talked about IP fees as well just a few minutes ago. And so we're looking across the entire cost base for ways to do things better, smarter and faster. And so I think you'll see some of those savings come through, not necessarily in '25, but as we head into '26. And again, either helps us achieve the margin expansion targets we set out over the next 3 years or gives us more room to reinvest in the business.

Yes. Just one other thing to add. For example, just to kind of combine 2 threads here, the thread around operating like one Match Group and the threat around looking at OpEx savings. In the cost reductions that we announced today, we did not take down marketing spend at all. However, we are looking at unifying our marketing measurement across the company. We already unify our media buying for certain types of digital advertising, but we haven't unified marketing measurement. And we think there's a lot of opportunity as one Match Group to start looking at the efficacy of marketing spend cross brand at a central level, and that should drive savings and synergies as well. Operator next question please.

The next question will come from Curtis Nagle with Bank of America. Please go ahead.

Terrific. So just a couple of ones for me. Would you be able to elaborate just on the surge in advertising in 1Q? I guess was there something you specifically did? What drove it? And would you expect this to sustain for the year?

Yes. Thanks for the question. We did have - it was a record quarter for advertising, which was fantastic to see. We saw really strong demand from advertisers around the Valentine's Day holiday, which was great, and we had a few large of our larger advertisers spend quite a bit of money with us in the quarter. I would not expect it to continue. We're not changing our full year guidance for advertising revenue, which is approximately flat year-over-year. So I would think of it as a really good quarter. We'll take it, but not a sustained change for the business. And then, of course, we always have to keep in mind that the macro effect on advertisers, too. So we'll have to see how the macro environment plays out over the rest of the year and what impact, if any, that has on advertising revenue. Thanks for the question.

The next question will come from Ben Black with Deutsche Bank. Please go ahead.

Great. Thanks for taking my question. So Spencer, can you just dig in a little bit into what you're seeing in New

Yes. So what we are testing in New

Sure. he way I would think about it is this, performance marketing plays an important role in some of our brands, namely our E&E brands like match.com. And there, we take a very rigorous ROI-driven approach. So if the ROIs aren't meeting our thresholds, we don't spend the dollars, and that's been our approach for many years now and will continue to be our approach going forward. For our brands like Tinder and Hinge, performance marketing plays a very small part of the total marketing spend. And so we really don't have a situation where we're driving a lot of traffic through performance that we need to reassess. It's really brand marketing at both Tinder and Hinge that's driving organic traffic, and that's something we're going to continue to do as long as it makes sense for us. Thanks for the question.

The next question will come from Ken Gawrelski with Wells Fargo. Please go ahead.

Two for Spencer, if I may, please. First, Spencer, how would you assess the health of the overall online dating industry? If we're still seeing industry headwinds overall, how effective do you believe Match can be in driving improved momentum strictly through company-specific product innovation, especially at your most scaled brands? And then a second follow-up for you, Spencer. You spoke to the increased product velocity, I think that you can see internally in terms of code base, et cetera. What are the external markers that we -- that you would point us to, to monitor your progress? Thanks.

So let me -- I'll take the second part of the question first. I think the most -- there aren't enough external monitors for you. I guess MAU is the single best one. I wish there was a way for you to see user sentiment, which is a precursor to MAU. If MAU hypothetically was exactly the same, but the users inside of our ecosystem were more pleased and had higher resonance with the brand and the feature set, that's a leading indicator to MAU improvements just a couple of months later. But obviously, you don't have that type of visibility. So I think the best external metric would be things related to audience. Regarding the category, the online dating category is clearly challenged. The good news is that it's -- these challenges are of our own making. And I really believe that Tinder as the category leader sets the tone. And the category challenges have been due primarily to a lack of innovation and our failure to recognize and respond to changes in the younger demographic, especially Gen

The next question will come from Jason Helfstein with Oppenheim. Please go ahead.

Thanks for taking the question. So I just want to ask -- just dig a little more into the Tinder MAU down 9%. I guess how much of that is still intentional, i.e., whether it's still getting bad actors off the platform or kind of there's traffic that is like your data shows like low conversion and you're kind of either choosing to invest in other ways or maybe not invest money in certain ways. So just maybe dig a little into like how much of that, I guess, 9% down was intentional. And then just longer term, I mean, there's definitely been a discussion of should you be running the business more for kind of revenue and EBITDA kind of like Netflix is now and not disclosing kind of user and payer metrics I mean, Spencer, just give us your thought, does disclosing all this data to us inhibit your ability to make the right long-term decisions for the business. Thank you.

Thanks, Jason. Great question. And you and I had this discussion at

The next question will come from Chris Kuntarich with UBS. Please go ahead.

Maybe just going back to the trust and safety dynamics. Any update to be sharing around mandatory face photos and how we should be thinking about a potential rollout in the U.S.? And then just one quick follow-up. I think you had been assuming 2.5 points of FX or headwind in the full year guidance. I think it's 1 point of tailwind in 1Q. Any update there? A - Spencer Rascoff So on the topic of trust and safety, just I want to reiterate how foundational this is, and this is work that never stops for us. We must make Match Group apps be the safest way to meet new people, and we devote enormous resources that's manpower, technology over hundreds of millions of dollars to driving trust and safety and improved user outcomes. The mandated liveness check that we're testing, which is basically a short face video and selfie in a couple of markets, it takes time for the ecosystem to settle when we introduce new features, especially new trust and safety features because we need time for the audience, the other folks that are using the apps in those geographies to recognize that there's a higher degree of safety there. And it drives higher Net Promoter Score from our existing users. It drives better word of mouth. So because we're a 2-sided marketplace with local network effects, this isn't a simple A/B test that you can just say, "Oh, should the button be blue or red. This is something that the ecosystem has to digest. So -- and also on our end, we need time to mitigate any negative impacts of those tests, whether it be financial or otherwise. So I guess I would just say we are acting with care and consideration, but no lack of urgency on this issue. I don't have any specific updates on rolling that particular feature out more broadly, but we're working very hard on this and acting with urgency even though it's been live for a couple of months now, and we have not rolled it out further. Steve, FX question for you.

Yes, sure. Let me take that one. You're right. FX trends have improved for our business pretty meaningfully as the U.S. dollar has weakened against most major other currencies. That helped our results in Q1, as we mentioned, and has helped our results -- our expected results in Q2 as well, more than offsetting any sort of macro-related pressure. From the full year perspective, we use the forward curves. They're also predicting a much weaker dollar than what we expected back in February when we set our full year guidance. And so all else equal, that would improve our full year as-reported expectations. At the same time, given some of the early signs we're seeing at Tinder and all the uncertainty around the general macroeconomic environment, we're being cautious. And so that's -- those 2 forces have led us to leave our guidance unchanged for the full year, which would be -- it's being helped by the declining dollar, but we want to stay cautious on potential macro impacts to the business as we see how things unfold. Next question.

The next question will come from Youssef Squali with Truist. Please go ahead.

This is Robert Taylor on for Youssef Squali. I'm just curious, what does a rollout in a new market typically look like in terms of additional costs in the first couple of years, user growth and then the ramp of revenues?

Robert, I'll take that. It depends on the brand. So -- but it's usually on the order of a couple of million dollars of spend depending upon how much customization is required and then how much COA we decide to apply to that market. So it's not nothing, but it's also not incredibly significant. And it definitely depends on the complexity of the individual country. So Pairs, for example, which is the number one dating app in Japan, just launched in Korea. And there, we use the combined Match Group Asia go-to-market team to launch Pairs from Japan into Korea. And so that's a team that already was marketing Tinder in Korea and then our other brands throughout Asia. So we have terrific synergies there. There's basically almost no incremental cost from a headcount standpoint in terms of go-to-market. There's a small incremental COA cost as we start to light up local network effects in the Korean market. And then there are the product development cost of pairs to customize the product for Korea, but that's borne by the core business. And in that case, the incremental was very low. So it's a playbook that we followed now globally across more than 15 different brands, and it's a big focus of ours in 2025 and 2026 for the remaining geographies where we don't have coverage yet from our brands. Operator next question please.

Our final question today will come from Dan Salmon with New Street Research. Please go ahead.

Maybe an appropriate one to wrap up the call with. But Spencer, obviously, some changes at the Board level here recently with some changes in seeing - excuse me, to see Kelly Campbell join, Alan Spoon exit formally expanding the size of it. Would love to just hear your thoughts on how those changes help improve the broader strategy for the company over the long term? And then just any update you can give us on your dialogue with, I don't know if we call them activist investors or maybe publicly active investors. Would just love to hear if there's anything you can add to that about where your dialogue sits. Is that largely with Stephen? Does that reach up to your level or even to the Board? Any color would be great.

Sure. Thanks for the question. Yes, I'm incredibly excited about Daryl and Kelly joining the Board. They both bring incredible consumer expertise. Daryl is a founder of 2 category-leading digital tech companies, has an incredible background of product engineering. He's a technologist as well as performance marketing and brand marketing. So he's a great addition. And Kelly also has an extraordinary marketing and product background from technology and consumer media. So they both bring great expertise onto our Board. Alan, who was a fantastic director of the company, and I will miss his counsel, though I know - I know how to reach him as well. And so I'm sad to see him leave and very grateful for what he contributed over the years, but Daryl and Kelly are going to be terrific directors as well. The -- in terms of our relationship with our shareholders, all is well. I'm engaging -- I personally am engaging actively with all key shareholders, including those that you referenced and looking forward to continuing to learn from them and hear their perspectives on the business. And as I did for 15 years as a public CEO before, I like engaging with shareholders. I like engaging with research analysts. I always learn from those conversations, and I don't shy away from them. And so I look forward to continuing to engage with all shareholders, whether they be activist or not activist.

So I think that -- with that, we'll wrap up the call. Thank you very much. I look forward to speaking with you all again very shortly. Have a great day. Thanks.