Welcome to the Match Group Second Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Bill Archer, Head of Investor Relations and Corporate Development. Please go ahead..

Thank you, operator, and good morning, everyone. Today’s call will be led by CEO, Shar Dubey; and COO, Gary Swidler. They will 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 filed with the SEC. With that, I'd like to turn the call over to Shar..

Thank you, Bill. Good morning, and thank you for joining the call today. Gary and I are once again doing this from our offices here in Dallas. And while our offices are not fully open yet, we did resume some travel and in-person meetings in Q2 as the vast majority of our employees got vaccinated.

And this optimism was also reflected in the sentiment of our users, particularly in the U.S. and parts of Europe. As a result, every one of our major brands grew revenue in Q2, collectively delivering 27% year-over-year growth. And we have solid momentum as we enter the second half of the year.

As much as I'm ready for COVID to no longer be a topic of discussion. It does appear that we have to live with it for a little while longer.

At the end of the day, widespread global vaccinations are really the only way out of this pandemic for us, which is why our brands have been particularly active these past few months, collaborating with the White House in the U.S.

and the government and the UK, France and Ireland on PSA's and vaccine information campaigns, and even a summer rapid about the vaccine. Turns out daters are open to and are getting vaccinated at higher rates than the average population, which is certainly a very good thing.

And vaccine badgers have become a very attractive feature on many of our platforms. In recent weeks, we have been monitoring the surge of the Delta variant and the various restrictions in countries, particularly in Asia.

We've learned a lot these past 16 months about the impact of case surges and restrictions to mobility, uncertainty driving new cycles, et cetera, on our metrics and business and various parts of the world. And our confidence in the continued resilience of our business is based on what we've seen.

People around the globe have continued to turn to our products for conversations, flirtations first video dates, real life dates. And for me, one of the exciting things about this quarter was Tinder's product launches, which are part of an app experience transformation journey that quite frankly, we haven't undertaken since its very early days.

The team there is executing really well, carefully testing the building blocks of this transformation roadmap. It's been super encouraging to see the promising engagement metrics with these new products. And Tinder subscribers/payer additions in Q2 were amongst some of the highest we've seen. And this momentum has continued into July.

In the second quarter we also closed the Hyperconnect deal. And even though travel restrictions have prevented us from meeting in person, our teams have quickly mobilized to collaborate on a number of exciting potential synergies.

Near term, our priorities are to both help calibrate and collaborate, to drive profitable growth for hyperconnects Azar and Hakuna apps, and lay out the broader strategy and roadmap for social discovery. We are also starting the work to roll out hyperconnects video, audio, and AI technologies onto our platforms over the next several months.

Longer term, there was much about this acquisition that excites us. We expect Asia-Pacific will soon contribute over 20% of our overall revenue and still offers the biggest growth opportunity, given where the category awareness and penetration stands today. And Hyperconnect gives us a strong, talented team and footprint in the region.

The more I learn about the AR, the conversational AI and other technologies that our team and incubation lab has been working on, the more I'm excited about the ability to leverage this on our dating platforms to provide a richer, more akin to real life experience online.

Everything from self-expression to getting to know each other, can be transformed. One of the holy grails for us in online dating has always been to bridge the disconnect that happens between people chatting online and then meeting someone in person.

And these technologies will eventually allow us to build experiences that will help people determine if they have that much elusive chemistry or not. And so, as we said in the letter, our ultimate vision here is for people never have to go on a bad first date again.

Finally, as part of our continuing journey as a fully independent company, we released our first impact report in Q2. I have always felt lucky to have spent much of my career at a company with such a fundamental and important social mission of bringing people together and helping them find dates, and relationships, and love and marriage.

We've always been inspired by the success stories of our members, the millions of babies born and love that has been forged by our platforms.

And in this annual report, in addition to the social work that we do, we are committed to sharing our performance on ESG metrics, and progress and relevant impact areas, including the very important work to develop leading technology and solutions for online safety.

I feel very good about where we are as a company, as a business and I look forward to continuing to deliver on our vision and goals. And while the Delta variant surge is a reminder that we aren't fully out of the pandemic woods yet, we do have more data and understanding to be able to manage through it with agility.

And with that, I will hand it over to Gary to talk more about the quarter..

Thanks, Shar. It's great to be here again in person with you and the team in Dallas today. Seeing colleagues working together makes me very much look forward to days when the office will be filled with activity once again. We had a terrific Q2 with 27% year-over-year total revenue growth, the strongest growth the company has achieved since 2018.

Non-Tinder brands grew direct revenue 28% year-over-year in the quarter, the sixth consecutive quarter, where these brands grew in aggregate. Hinge, POF LIVE, and our BLK and Chispa apps continued to perform very well. Hinge grew revenue, nearly 150% in the quarter, driven by strength in both subscription and a la carte, led by Roses and Standouts.

At Tinder propensity to pay has improved significantly, which you can see in the a la carte revenue strength, as well as overall payer numbers. Tinder saw a notable acceleration in year-over-year direct revenue growth to 26% in Q2, up from 18% year-over-year growth last quarter and 13% year-over-year growth in Q4 2020.

Our direct revenue grew 25% in the Americas; 28% in Europe and 31% in APAC and other. Our U.S. performance is exceptionally strong. And our performance in Europe is trailing slightly behind the U.S., consistent with the pace of the recovery there. APAC and other growth also was solid in Q2.

But a number of markets there, including important ones for us like Japan, are now facing increased COVID restrictions. Note that we are now disclosing the performance of the business in three geographic regions to give investors better insight into our results.

Indirect revenue grew 54% year-over-year, marking a third consecutive strong quarter as the advertising market generally and our direct sales specifically were very strong. Also note that we closed the acquisition of Hyperconnect in mid June. So our metrics reflect about two weeks of contribution.

Net of certain one-time purchase accounting adjustments, Hyperconnect contributed $4.3 million of revenue in Q2. We have broken this information out in the shareholder letter, so you can see what Match Group X Hyperconnect and what Hyperconnect itself delivered in Q2. We have also moved to disclosing payers and monthly revenue per payer.

In the quarter, total payers reached 15 million, which was an increase of 15% from Q2 2020. Growth was strong in all geographies, up 16% year-over-year in the Americas, 13% in Europe, and 17% in APAC and other. Tinder payers were up 17% year-over-year in Q2.

For comparison purposes, in Q2 average subscribers increased 1.3 million over the prior year to 11.4 million, representing 13% year-over-year growth. Tinder's average subscribers were up just under 1.1 million or 17% year-over-year and came in at 7.2 million in total.

This was the best Tinder year-over-year subscriber growth since the pandemic began and was very strong sequentially as well. All other brand average subscribers were up 240,000 or 6% year-over-year. Revenue per payer increased 10% year-over-year to $15.46. [ph] It was up 8% in the Americas, 13% in Europe, and 12% in APAC and other.

RPP was up 8% year-over-year at Tinder. RPP derived three percentage points of growth, $0.53 from foreign exchange impacts in the quarter. At Tinder, Platinum sales and strengthen a la carte contributed to RPP growth.

Continued strong performance of PlentyOfFish live streaming business and Hinge’s a la carte features contributed to the strength in RPP at the established and emerging brands respectively. Total company ARPU was up 10% year-over-year to $0.65.

Non-Tinder brands ARPU growth was extremely strong again this quarter, up 16% year-over-year and Tinder ARPU was up 7% year-over-year. Operating income grew 7% and EBITDA grew 15% year-over-year in Q2. EBITDA margins were 37%.

Net of purchase accounting adjustments, Hyperconnect reduced Match Group EBITDA by $3 million in Q2 from $266 million to $263 million. Overall expenses including SBC expense increased to 70% of revenue compared to 65% in Q2 2020 when we pulled back on spending as the pandemic took hold.

Cost of revenue grew 30% year-over-year impacted by higher IAP fees, web hosting costs and fees related to live-streaming video at PlentyOfFish. Sales and marketing spend was up $38 million or 42% year-over-year, close to what we had anticipated and represented 18% of total revenue in Q2, as many of our brands spent into reopenings.

Product development costs grew 24% year-over-year as we increased headcount at several brands, mainly Tinder and Hinge. G&A expense rose 66% year-over-year and comprised 16% of revenue. G&A in Q2 included $4 million of professional fees and $9 million of stock-based comp expense, both related to the acquisition of Hyperconnect.

Our gross leverage declined to 3.9 times at the end of Q2, while our net leverage was 3.7 times as we use cash on hand for a portion of the consideration in the Hyperconnect purchase. We're pleased to see both gross and net leverage below four times and we're on track for net leverage below three times by the end of 2021.

For Q3, we expect total revenue for Match Group of $790 million to $805 million, which would represent 23% to 26% year-over-year growth. That's solid growth of what was a very strong Q3, 2020 as daters emerged from the initial wave of lockdowns in North America and Europe and Asia had COVID under control.

We expect EBITDA of $275 million to $280 million in Q3. This reflects an additional $15 million of costs in the second half of the year versus our prior expectations for government relations and other advocacy related to app store practices and for legal matters, including the former Tinder employee litigation, as we prepare for a fall trial.

We think plaintiff's claims in that case are totally without merit and are fully prepared to defend ourselves vigorously to the end. We currently expect that the trial will conclude by the end of the year and the meaningful costs we've incurred related to this lawsuit should not recur beyond 2021.

For the second half of the year, we expect Hyperconnect to contribute $125 million to $135 million of revenue. This outlook reflects some pullback, primarily due to COVID as well as our decision to focus the Hyperconnect team on delivering video and other technology that we can implement across the rest of our portfolio.

We expect at least two of our brands to make use of Hyperconnect technology before the end of 2021 and a number of others to implement Hyperconnect capabilities by year end 2022. As a result of this focus on building tech that our other brands can use. We expect Hyperconnect to remain roughly breakeven from an EBITDA standpoint in Q3 and Q4 2021.

For the company as a whole, we expect full your revenue of just above $3 billion including Hyperconnect, exceeding the high end of our previously stated range. This reflects better than expected performance at our dating brands in the first half of 2021 and anticipate second half year-over-year growth north of 25%.

Approximately 20% of Tinder, single digits at the established brands and north of a 100% at the emerging brands including the contribution from Hyperconnect. From an EBITDA perspective, we now expect a range for the full year of $1.045 billion to $1.06 billion.

This outlook incorporates Google's recent change in policy to enable our brands to opt out of mandatory in-app billing until at least March, 2022. It also includes the previously mentioned additional legal costs and higher spend for government relations and advocacy to encourage the app stores to reduce their fees.

We're increasingly confident that the lawsuits and investigations around the globe related to app store practices will result in changes to those policies in the not-too-distant future. We've had an outstanding first half of the year where we've accomplished a great deal.

Tinder's growth has accelerated, and the product is evolving in exciting ways that we expect will present real revenue opportunities for us over time. Hinge and our other newer apps continue to exceed our expectations. And our more established brands are performing well.

Importantly, our services are now more in demand than ever as people around the world seek social connection online, whether in the form of companionship, romance or love.

With Hyperconnect, our portfolio is increasingly well positioned to deliver on our mission of connecting people, which we expect will enable us to continue to deliver strong results for our stakeholders. With that, I'll ask the operator to open the line for questions..

[Operator Instructions] The first question comes from Cory Carpenter from JPMorgan. Please go ahead..

Thanks for the questions. I had one for Shar and one for Gary. For Shar, on the reopening, hoping you could expand a bit on what impact you're seeing to user behavior in markets like the U.S. where COVID in Delta are flaring up a bit recently.

And then Gary hoping you could talk about some of the puts and takes driving your expectation for Tinder revenue growth of close to 20% in the second half? Thank you..

Good morning, Corey. Yes, about the Delta and case surges, so one of the things to note is more than case surges itself, we're actually watching mobility trends and restrictions more closely because they seem to have a larger effect. As vaccination rates gain steam first in the U.S.

and then in Europe, we saw mobility increase and it reflected in our business trends in Q2. In a few – in actually a several markets in Asia even today, including Japan, which is our second largest revenue market, there are different degrees of lockdowns and restrictions in place. And that certainly impacts mobility and our metrics.

With respect to what's going on in the U.S. with the Delta surges in recent weeks. So far, they don't appear to have any impact on mobility and they may not unless real restrictions are put in place. And generally we don't see mask mandates as causing mobility restrictions, mostly partial and full lockdown seem to.

So for instance, in UK where the Delta surged and it has already peaked and it's on its way down because restrictions were easing during this period, mobility kept increasing and we didn't really see much impact to our metrics here. So that's kind of how we think about what's going on in the market today..

And then Corey, as far as our outlook for Tinder revenue in the back half of the year, our outlook sitting here today is for just north of 20% top-line growth for Tinder in the second half of 2021, which is meaningfully higher than what it was last year.

If you break it down further into the quarters, I think Q3 growth will probably be just under the 20% mark because last year, if you remember, Q3 was very strong. North America and Europe were coming out of the lockdowns and people got back outside, started being active again. The weather was nice and Asia had the virus under control.

So you had really good conditions globally, which led to a strong Q3 last year. For Q4 this year, I'm expecting the growth to be comfortably above 20% year-over-year. But given Q4 is still a quarter away and Tinder has broad geographic exposure. The COVID risks that are still out there necessitate us being a little bit conservative.

And so that's what you're seeing as we give our outlook for the back half of the year on Tinder growth..

Great. Thank you..

The next question comes from Brent Thill with Jefferies. Please go ahead..

Good morning. Maybe you can just talk to what is giving you confidence to raise your full year guidance from high teens to low 20%, are you seeing some conservatism in the outlook? Gary, maybe you can give us a little more color on that and I had a quick follow-up? Thank you..

Sure. Look, we've had extremely strong start to the year and that's enabled us to raise our outlook twice so far this year. So we feel great about how we performed in 2021. In fact, our Q2 was really stellar, 27% revenue growth, well-balanced between Tinder and non-Tinder. So we feel really good about Q2 in particular.

And I think we're very well set up for the rest of the year. So right now, sitting here, I think we have good visibility into Q3 and that is reflected in our specific guidance for the quarter. And then we're anticipating really solid, sequential revenue growth going into Q4, which would mean that we should see accelerating year-over-year Q4 growth.

But as I just said to Corey, there's still some uncertainty in the environment with COVID and Delta and potentially other variants and everything else that people know much about. And so we think that a little bit of conservatism is appropriate, especially the further out that we look. And so that's all factored into the guidance we've provided..

And Gary, just to follow up, we wanted to make sure we heard this right, but it sounds like you're assuming Hinge is roughly a $250 million in revenue in 2021.

Is that somewhat in the ballpark?.

So, thanks. That's a good question, actually. So when you look at that chart, that's in the letter related to the Swipe apps and PlentyOfFish live and Hinge, it really is impressive what we've been able to achieve, getting those businesses from virtually nothing to $300 million or so this year in aggregate. But the letter is a little bit unclear.

And so I wanted to clarify that each of the group of Swipe apps, as well as the PlentyOfFish live streaming business are contributing at least $50 million of revenue to that $300 million this year. So Hinge is the balance of the $300 million after the two contributions of 50 plus.

And as we've said before, Hinge is on track to more than double revenue in 2021 after tripled. And we gave the performance for Hinge also in the second quarter of 150% revenue growth. So the $250 million I think is high. But I've given you the components.

So it should enable you, I think, to determine kind of where we think Hinge is going to be roughly for the year..

Great. Thanks..

The next question comes from Jason Helfstein with Oppenheimer. Please go ahead..

Thank you, guys. With all the new product initiatives around Tinder, do you see advertising playing a bigger role in the medium term, or should we mostly focus on virtual currency and a la carte monetization? Thanks..

I can take that. Thanks, Jason. So we're definitely not looking at advertising as an incremental revenue source. But we do see a la carte is becoming an increasing area of focus in addition to subscriptions.

And with regards to virtual currency, it is something we're testing in a couple of small markets and we test it, we started testing it in a couple of small markets in Q2. It is currently very limited in a feature set that it covers.

We are encouraged by what we've seen so far and we'll be expanding to additional markets and more feature coverage over the next few quarters.

More broadly though, the Tinder experience, as I said, is evolving to include these new multi-dimensional surface areas in the app where people have new ways to discover and connect and share interests and form communities.

And if you think about most of the ALC features today, things like Boost and Super Like for instance, they are designed to allow users to stand out in a one-to-one experience. And we think there are some real interesting revenue opportunities to help people stand out in these many to many experiences on the app that we're building..

Thank you. That's helpful..

The next question comes from Mario Lu with Barclays. Please go ahead..

Great. Thanks for taking the questions. I have two on the new payers metric. So specifically at Tinder seems like a little over 2 million users only pay a la carte versus the 7.2 million average PMCs.

So is this the right way to think about it and how does this self-payer breakdown look at Hinge and just Match Group overall?.

So this is a little bit complicated. I want to try to run through it to make sure people understand. There are two reasons why payers are higher than average subscribers. The first is that payers captures non-subscriber ALC payers. But there's another reason which is the definitions of average subscribers and payers.

Average subscribers represent a daily average over the quarter, while payers is the number of unique payers in a given month, and then it's average for the quarter.

And so if you look at Match Group overall at our payer numbers, what you'll see is that the non-subscriber ALC payers are actually a relatively small part of the difference between average subscribers and payers. It's more a function of the way payers are counted that accounts for payers being higher than average subscribers.

So again, ALC payers that our non-subscribers are a relatively small piece of that disparity. Now, that being said, we do think that as we expand our ALC monetization efforts and we add virtual currency, especially in Asia Pacific, and now we bring on Hyperconnect, which has a lot of non-subscriber ALC payers.

The percentage of non-subscriber ALC payers is going to increase. So you'll start to see that as we move forward into the year. I'd encourage you to look at the specific definitions which we provided of average subscribers as well as payers.

And if you have further questions on this, we're happy to try to take this offline and go through some examples, because I know intuitively it's not that obvious. But again, the definitions are what's accounting for a large part of the gap..

Okay. Yes, that's helpful. And then just one more on the revenue per payer by geo. So a little bit surprised to see APAC and other to be relatively in line with the Americas and Europe at an absolute level.

So just curious if there's any differences in spending by geo to point out, for example, does APAC and other tend to spend mostly on a la carte and not in subscription? Thanks..

Yes. So it's a good question. We have relatively consistent RPP in APAC compared to the Americas and Europe which is really a reflection of a couple of things. One is that Pairs in Japan is our highest RPP dating business. So that's definitely helping on the RPP and APAC.

And then we actually have relative price parody between Tinder and APAC and our other geographies. So you don't see much of a disparity. And so those two things taken together as a result, APAC, RPP is pretty similar to the rest of the world. As far as kind of what the mix is, Pairs tends to be a subscription business as does Tinder in APAC today.

However, as we've talked about, we're experimenting with ways to increase the a la carte consumption at Tinder through virtual currency and other product innovations. We're early days for all of that, but we think we can improve payer penetration by adjusting our monetization strategies. And so that's something that you may very well see over time..

Great. Thank you..

Sure. Next question, please..

Next question comes from Dan Salmon with BMO Capital Markets. Please go ahead..

Hey, good morning, everyone. I jumped on a little bit late. So hopefully this one wasn't covered. But I just wanted to follow up on one of the comments in the letter where you spoke about the HyperX Group at Hyperconnect.

Sounds like a little bit of a lab and I'd love to learn just a little bit more about some of the products that are working on currently about the group itself. Maybe broad strategic goals, number of employees.

And is that the type of thing that you see as new and incremental to Match that Hyperconnect brings as well?.

Sure. Thanks Dan, I can take this. So generally, as we've said Hyperconnect has a number of technology assets we’re already planning to deploy on our platforms, video, audio, some AI tools for moderation, et cetera. But within Hyperconnect, HyperX is a technology incubation lab. And some of the tech assets they developed are deployed on Azar and Hakuna.

And they also incubate new apps. In fact, Hakuna was a HyperX incubation.

I am actually, really, excited about some of the technology elements they've been working on, AR features, self-expression tools, conversational AI, and a number of what we would consider a metaverse elements, which have the element to transform the online meeting and getting to know each other process.

And so, the technology areas of innovation at HyperX is actually very incremental and additive to Match Group. And we do believe it will have a significant impact, both as on their apps as standalone business, but also as a technology enabler for our other platforms and businesses..

That's great. Thank you, Shar..

The next question comes from Shweta Khajuria with Evercore ISI. Please go ahead..

Okay. Thank you. Could you please help us understand the guidance for Hyperconnect piece? So, at the time of acquisition we were expecting about 40% to 50% growth, the revised guidance is slightly less than that. You called that pull back from COVID.

Any additional color, is that just COVID? Is there a level of conservatism there? And then the follow-up to that is how are you expecting to manage costs at breakeven for the back half, but any additional color on the potential of EBITDA margins for that business would be great? Thank you..

Sure. Why don't I take that one? So, there are a few things that are leading to somewhat lower growth at Hyperconnect this year than what we expected back in February. The first thing which you rightly pointed out was they have a large footprint in APAC.

And as we've talked about and is well documented, COVID has hit APAC much more heavily this year than it did in 2020. And so, there is COVID impact that is being felt in their performance. There is also a much more challenging marketing environment. You've got IDFA, you've got a more crowded marketplace.

And so, as a result of these factors, the Hyperconnect team has been a bit less aggressive in some of their key markets this year than we were initially anticipating. On top of that, as Shar has talked about, we have become increasingly excited about the opportunities to apply various Hyperconnect technologies to our other platforms.

And we see significant synergies and upside from that. And so that's become a higher priority for us and for the Hyperconnect team in the short term. And we've encouraged them to focus resources on the tech integration with Match Group.

So, we still expect Hyperconnect to perform well this year and post solid revenue growth, but it is going to be a little bit lower than we initially saw. As far as the costs, we communicated that we thought over time, margins of Hyperconnect could get into the upper 20s, 30% range, and nothing has really changed our view on that over the longer term.

But as I just said, shorter term, we're not focused on margin. We believe that the company will still operate at a breakeven pace. But we want to focus on the synergies. And so that's what we're focused on, certainly for the rest of this year and into next year.

And then I expect that the margins will gradually start to improve as we make the turn through 2020. And we'll communicate more about that likely on our next call, as we start to get some sense of what we think 2020 is going to – 2022, I'm sorry, is going to be for the company..

Okay. Thanks Gary..

Sure..

The next question comes from Justin Patterson with KeyBanc. Please go ahead..

Great. Thank you. One on the established brands, if I can, what have been the biggest drivers of growth versus 2019 levels? And when you looked down the road, where do you see further opportunities to just continue driving growth from these brands and broaden the audience? Thank you..

Sure. Thanks Justin. I can take this. So, with these established brands, there are a few different stories here. Keep in mind the established brands used to be desktop first brands and they have all reimagined the product as mobile first experiences.

And some of them like Match and Meetic, for instance, have shifted their business model from the hard paywall to more premium experiences, which has meaningfully increased engagement and conversion. And apps like POF have added new experiences like POF Live, which has created a new revenue stream.

OkCupid continues to expand to new international markets. And generally, they've also sharpened their marketing to become more resonant and relevant to their core audience. So now as they continue to execute, they should be able to expand the category and their core user base and deliver modest growth we think..

Thank you..

The next question comes from Lauren Schenk with Morgan Stanley. Please go ahead..

Great. Thanks. Two for Gary if I can. I think you mentioned the Google Apps were a few changes that was originally supposed to come into effect in the fourth quarter being pushed to March in 2022. I think previously you were embedding some impact from that change in the fourth quarter EBITDA guide.

So just want to confirm that that upside was sort of flowed through and maybe the $15 million in incremental legal expenses offsetting that, but just want to clarify that.

And then generally how you're feeling about that risk heading into March next year? And any potential workarounds? And then secondly, just if you could give us your thoughts on the status of the of the former Tinder employee litigation and how you see that progressing through the course of the year? Thanks..

Sure. So, on the Google fees in the fourth quarter, I think, what we said previously is that where we ended up on the, our EBITDA ranges would be impacted on whether the Google change actually occurred or not.

And at this point, they've now, about a few weeks ago, they basically said they are pushing back the deadline for compliance until March 31, next year. So that cost is obviously not going to hit us in Q4. And so now what we've done is we've given a more up to date EBITDA outlook the rest of the year, which reflects a lot of puts and takes.

You've got the legal and GR costs that you mentioned, and there's more things moving around in there and then Google is not in there anymore. And so, this is our kind of our latest and greatest with everything we know sitting here today, factored in. Frankly, I don't know for sure if that $15 million of extra-legal and GR is going to get spent.

But we've embedded it. So, I think the costs are relatively fully loaded at this point for the rest of the year. Then in terms of potential workarounds, we continue to talk to Google, we have a good relationship with them, it's very collaborative. And so, we'll see how that all evolves.

That being said, as you probably know, there are many, many investigations, and lawsuits and regulatory actions around the world in many jurisdictions, in many countries related App Store practices generally.

And so, as a result of that we're increasingly optimistic that there's going to be a change in App Store policies one way or another at some point in the not-too-distant future. And so, we'll see where we are, as time progresses and we'll keep everybody updated on our latest thinking on this.

As far as the Tinder former employee litigation goes, ultimately, it's an ongoing litigation, so there's not too much that we can really provide in terms of details on that.

What I can say is that we ran a process that involved two globally recognized, highly regarded investment banks that listened to everything that was now plaintiffs in this case had to say about the business, went through an exhaustive analysis and those banks ultimately came up with a valuation of Tinder at the time that was in line with where Wall Street analysts, like those who are on the phone thought Tinder was valued.

So, it wasn't particularly surprising from that standpoint. And so, we're confident in our case and that we think their case is completely meritless. And so, we're looking forward to getting to the trial later in the fall and fighting this to the end. And so that's our plan and we remain optimistic..

Great. Thank you..

And the last questionnaire today will be John Blackledge with Cowen. Please go ahead..

Great. Thanks.

Just curious if Hinge’s 21 topline growth includes non-English-speaking markets, or if those markets are still kind of early-stage from a monetization perspective? And also, how does the runway for growth at Hinge look kind of longer term? And do you view Hinge as complimentary or cannibalistic, or a bit of both to Tinder over time? Thanks..

Yes, I can take that. So right now, Hinge is only available in a few English-speaking markets. So much of 2021 revenue growth has largely been a combination of user growth, concentrated in medium and large cities in these markets, as well as the really good work the team has done on developing monetization and revenue features.

So, there's still plenty of room for both user and monetization growth in these limited English-speaking markets that currently are in. Our plan is in 2022 to translate and localize the app and start the journey of expansion into international markets.

So, longer term, it's a combination of further expansion in existing markets, increasing footprint in international markets and continued education on monetization features that will drive strong growth in the coming years. And we're very excited for what is still to come at Hinge.

It is a uniquely, differentiated product that resonates to its audience that is a little serious intent and outcome driven. This is why their tagline designed to be deleted, resonates with this audience set.

We have found very little evidence on cannibalization Tinder is still the number one dating app for anybody starting out dating particularly among the young. But Hinge is a great alternative app and a second app for people who are looking for a more serious, intent dating.

And so, we do think there is a real play for both Tinder and Tinder in our portfolio..

I think that was – sorry..

Thank you..

Sorry. Thank you. That was our last question. We thank you again for joining the call. Have a great month..

Again, the conference call has ended. Thank you for attending today's presentation. You may now disconnect..