Dating giant Match Group announced a series of changes to Tinder’s management team alongside the announcement of disappointing second-quarter earnings on Tuesday. Notably, Tinder CEO Renate Nyborg will be departing the company after less than a year in the top job. Match Group is also killing Tinder’s plans to adopt new technology, like virtual currencies and metaverse-based dating.
In a shareholder letter, Match Group CEO Bernard Kim expressed frustration with Tinder’s current performance, noting the popular dating app has not been able to realize its typical monetization success over the past few quarters and is failing to meet the company’s original expectations for revenue growth for the latter half of 2022.
Kim chalked up Tinder’s troubles to “disappointing execution on several optimizations and new product initiatives,” but added that Tinder’s product execution and velocity could still be improved.
Alongside the departure of Nyborg, Tinder will have a reorganized management team that also includes:
Faye Iosotaluno, formerly Match Group’s chief strategy officer, as Tinder’s COO
Mark van Ryswyk, as Tinder’s chief product officer. Ryswyk is an experienced gaming executive who joined the company in June.
Melissa Hobley, formerly OkCupid’s CMO, as Tinder’s chief marketing officer
Tom Jacques, as Tinder’s chief technology officer. An 11-year Match Group veteran, he has been Tinder’s CTO for the last five years.
Advisor Amarnath Thombre. The current CEO of Match Group Americas and 15-year Match Group veteran will advise the Tinder management team on product roadmap and growth.
Kim said he will oversee the team while Tinder searches for a permanent CEO.
Reading between the lines, there was also a hint that the younger generation of users may have lost its appetite for dating apps like Tinder — a culture shift which can’t just be chalked up to lingering pandemic impacts. The letter notes that people have moved past COVID lockdowns and re-entered “a more normal way of life,” but their willingness to try online dating apps for the first time hasn’t returned to pre-pandemic levels.
Instead, Match Group reports that its highest engagement is now coming from existing users.
As part of Tinder’s revamp, its “dating metaverse” ambitions have been dramatically scaled back. The company had been planning to leverage its Hyperconnect acquisition to create a new form of online dating in a virtual environment, but those ideas are on pause as Match Group now has to address broader issues.
“…Given uncertainty about the ultimate contours of the metaverse and what will or won’t work, as well as the more challenging operating environment, I’ve instructed the Hyperconnect team to iterate but not invest heavily in metaverse at this time,” wrote Kim. “We’ll continue to evaluate this space carefully, and we will consider moving forward at the appropriate time when we have more clarity on the overall opportunity and feel we have a service that is well-positioned to succeed.”
Also on the chopping block was virtual currency, which Match Group was experimenting with as Tinder Coins. (While Match Group hadn’t gotten so far as to announce blockchain integrations for the coins, the virtual currency’s role in its broader metaverse plans suggested crypto could be part of its long-term roadmap.)
“After seeing mixed results from testing Tinder Coins, we’ve decided to take a step back and re-examine that initiative so that it can more effectively contribute to Tinder’s revenue,” said Kim. “We also intend to do more thinking about virtual goods to ensure that they can be a real driver for Tinder’s next leg of growth and help us unlock the untapped power users on the platform,” he added.
The company says it’s still planning to develop features to make Tinder more appealing to women, including a subscription-based package that will provide “curated recommendations” as well as features designed to get friends involved in introductions. Across other products, it will also look to new features, like livestreaming video, to drive adoption.
Overall, Match posted Q2 2022 revenue of $795 million, up 12% year-over-year, but below average Wall Street estimates of $804.22 million. It also posted a loss of $31.86 million, or 11 cents per share, versus 46 cents in the year-ago quarter. Analysts were expecting earnings of 57 cents per share. Match said its operating loss was $10 million, impacted by a $217 million write-down of intangibles related to lower financial outlooks for its Azar and Hakuna apps from Hyperconnect.
Match Group paying users were up 10% year-over-year to 16.4 million. Tinder direct revenue grew 13% from the prior quarters, driven by 14% growth to 10.9 million paying users.
Image Credits: Match Group
Estimates for the quarter ahead weren’t good either, with Match Group forecasting flat Q3 growth to $790 million to $800 million in revenue, below estimates of $883 million. Tinder revenue growth is expected to be in the “mid single digits.”
Shares dropped more than 20% in after-hours trading on the news.
Updated 8/2/22, 6:00 pm ET to clarify Tinder had not formally announced blockchain integrations for Tinder’s virtual currency.
Tinder to kill virtual currency, metaverse plans amid Match Group earnings loss; Tinder loses its CEO
Архив рубрики: earnings
Zynga reports record revenue and strong user growth while still losing $122M
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Zynga’s revenue grew to a record $503 million (up 46% year-over-year) in the third quarter, with bookings of $628 million (up 59%), according to its latest earnings report. It also had its best mobile daily active user (31 million) and monthly active user (83 million) numbers in six years.
But things weren’t all rosy: The company also reported a net loss of $122 million. That compares to net income of $230 million during the same period last year, though that was boosted by the sale of Zynga’s building in San Francisco. As of 4:44 p.m. Eastern, shares were down 4.9% in after-hours trading.
Before earnings were released, CEO Frank Gibeau told me that although growth has become more normal after the pandemic caused “that huge jump” in usage during the late spring and early summer, “Engagement remains elevated and monetization remains elevated. Folks that discovered mobile gaming for the first time returned to it and kept doing it.”
The company predicted further growth in Q4, with revenue up 55% to $570 million. Gibeau pointed to a “digital holiday” that could have big benefit in mobile gaming, with new mobile on the market, plus social distancing and lockdowns resulting in the fact that “a lot of folks aren’t going to be able to go to stores and buy gifts.”
During the third quarter, Zynga also closed its acquisition of Istanbul-based hyper-casual game publisher Rollic. Gibeau said the team is “fully integrated at this point from an operating standpoint,” but the company won’t start including Rollic in its user numbers until the next quarter.
“We are well-positioned for further M&A,” he added.
Zynga completes its acquisition of hyper-casual game maker Rollic
Zynga reports record revenue and strong user growth while still losing $122M
Snapchat hits 218M users but big Q4 losses sink share price
Snapchat still isn’t profitable nearly two years after its IPO. In Q4 2019, Snap lost $241 million on 560.8 million in revenue that’s up 44% year-over-year and an EPS of $0.03. That comes from adding 8 million daily users to reach a total of 218, up 3.8% this quarter from 210 million and 17% year-over-year.
The big problem was a one-time $100 million legal settlement that pushed it to lose $49 million more in Q4 2019 than Q4 2018. That comes from a shareholders lawsuit claiming Snap didn’t adequately disclose the impact of competition from Facebook on its business. The IPO was soured by weak user growth as people shifted from Snapchat Stories to Instagram Stories.
A rough Q4
Snapchat had a mixed quarter compared to estimates, exceeding the EPS predicitions but falling short on revenue. FactSet’s consensus predicted $563 million in revenue and a loss of $0.12 EPS. Estimize’s consensus came in at $568 million in revenue and an EPS gain of $0.02.
Snapchat shares plunged over 10% in after-hours trading following the announcement. Shares had closed up 4.17% at $18.99 today. That’s up from a low of $4.99 in December 2018 when its user count was shrinking under competition from Instagram Stories. It’s now hovering around its $17 IPO price but it’s still under its post-IPO pop to $27.09.
Snap gave stronger than expected revenue guidance for Q1 2020 of $450 million to $470 million, and 224 million to 225 million users. The company’s CFO Derek Anderson says that “Q4 marked our first quarter of Adjusted EBITDA profitability at $42 million for the quarter, an improvement of $93 million over the prior year.” Still, he predicts an Adjusted EBITDA in Q1 of negative $90 million to negative $70 million. That’s manageable for Snap without raising more money, since it now has $2.1 billion in cash and marketable securities, down $148 million quarter-after-quarter.
Snapchat 2020
“Throughout the course of 2019, we added 31 million daily active users, largely driven by investments in our core product and improvements to our Android application “said Snapchat CEO Evan Spiegel . “We’ve recently completed our 2020 strategic planning process and have aligned our teams and resources around our goals of supporting real friendships on Snapchat, expanding our service to a broader global community, investing in our AR and content platforms, and scaling revenue while achieving profitability in order to self-fund our investments in the future.”
Some other highlights:
1.3 trillion Snaps were created in 2019
The average Snapchat user engages for 30 minutes per day,
Snapchat reaches 90% of US 13 to 24 year-olds and over 75% of 13 to 34 year-olds
Total daily time spent by Snapchatters watching Discover increased by 35% year-over-year, and its up 60% for users over the age of 25
Over 50 Snapchat shows reached a monthly audience of 10 million viewers or more
75% of users engage with augmented reality per day
20% of Snaps sent with an AR lens were made with commununity-developed lenses
5X more users open the Lens Explorer now versus a year ago, and 10% of users open it every day
Snapchat’s user growth has been on tear thanks to international penetration, especially in India, after it re-engineered its Android app for developing markets. It gained users in all markets. Crucially, it raised its average revenue per user 23% from $2.09 in Q4 2018 to $2.58, though only from $1.24 to $1.35 in the Rest Of World region where it’s growing user count the fastest. Snap will need to figure out how to squeeze more cash out of the international market to offset the costs of streaming tons of video to these users.
Q4 saw Snapchat readying several new products that could help boost engagement and therefore ad views. Cameos, first reported by TechCrunch, lets users graft their face onto an actor in an animated GIF like a lightweight Deepfake. Bitmoji TV, which won’t run ads initially but could drive attention to Snapchat Discover, offers zany four-minute cartoons that star your Bitmoji avatar. We could see a bump to engagement from these starting in Q1 2020.
To retain its augmented reality filter creators, Snapchat has pledged $750,000 in payouts in 2020. It’s also expanded the use of product catalog ads, and now lets advertisers buy longer skippable ads.
Outside of the legal settlement, Snapchat is inching closer to profitability but still has a ways to go. It’s managed to develop a strong synergy between its popular chat feature that’s tougher to monetize, and the Stories and Discover content where it can inject ads. The big question is whether Facebook Messenger, Instagram, and WhatsApp will get more serious about ephemeral messaging that’s at the core of Snapchat. If it can hold onto the market and maintain its place as where teens talk, it could ride out its costs and build revenue until it’s sustainable for the long-term.
Snapchat launches Bitmoji TV: zany 4-min cartoons of your avatar
Facebook hits 2.5B users in Q4 but shares sink from slow profits
Facebook beat Wall Street estimates in Q4 but slowing profit growth beat up the share price. Facebook reached 2.5 billion monthly users, up 2%, from 2.45 billion in Q3 2019 when it grew 1.65%, and it now has 1.66 billion daily active users, up 2.4% from 1.62 billion last quarter when it grew 2%. Facebook brought in $21.08 billion in revenue, up 25% year-over-year, with $2.56 in earnings per share.
But net income was just $7.3 billion, up only 7% year-over-year compared to 61% growth over 2018. Meanwhile, operating margins fell from 45% over 2018 to 34% for 2019. Expenses grew to $12.2 billion for Q4 2019, up a whopping 34% from Q4 2018. For the year, Facebook’s $46 billion in expenses are up 51% vs 2018. One big source of those expenses? Headcount grew 26% year-over-year to 44,942, and Facebook now has over 1000 engineers working on privacy.
While Facebook’s user base keeps growing rather steadily, it’s having trouble squeezing more and more cash out of them with as much efficiency.
Facebook’s Q4 2019 earnings beat expectations compared to Zack’s consensus estimates of $20.87 billion in revenue and $2.51 earnings per share. Facebook shares fell over 7% in after-hours trading following the earnings announcement after closing up 2.5% at a peak $223.23 today. Still, Facebook remains near its previous share price high before this month.
Facebook CEO Mark Zuckerberg had previously warned that addressing hate speech, election interference, and other content moderation and safety issues would be costly. Still, expenses grew and profits shrunk faster than Wall Street seems to have expected. Facebook will have to hope its promise of using scalable AI to handle more of these jobs comes to fruition soon.
But some might see today as the proper reckoning for Facebook — penance for years of neglecting safety in favor of growth. Facebook’s CFO David Wehner confirms it has also just agreed to pay $550 million in a settlement over its violation of the Illinois Biometric Information Privacy Act. The class action suit stems from Facebook collecting users’ facial recognition data to power its Tag Suggestions feature that recommends friends tag you in photos in which you appear. The record-breaking settlement still falls far short of the $35 billion in potential penalties Facebook could have received.
Facebook’s executives are apparently bullish on its value despite the share price being at a peak, as today Facebook announced plans to grow its share-repurchase program by $10 billion, adding to its previous authorization of buying back up to $24 billion worth.
Facebook managed to add 1 million daily users in the U.S. & Canada region where it earns the most money after returning to growth there last quarter following a year of slow or no growth. Facebook’s stickiness, or daily to monthly active user ratio remained at 66% amidst competition from apps like TikTok and a resurgent Snapchat.
Masking The Shift To Instagram
Facebook notes that there are now 2.26 billion users that open either Facebook, Messenger, Instagram, or WhatsApp each day, up from 2.2 billion last quarter. The family of apps sees 2.89 billion total monthly users, up 9% year-over-year.
Facebook released a new stat with this earnings report: Family Average Revenue Per Person. That’s essentially the company’s total revenue divided by total users on Facebook, Messenger, Instagram, and WhatsApp. Clearly, the company is trying to use Instagram’s growing ad revenue to make the rest of the company look stronger. This might help mask changes in the Facebook app’s own revenue as teens look to more youthful content feeds. Wehner confirmed the company will cease sharing Facebook-only stats in favor of Family Of Apps stats in late 2020.
Sadly Facebook’s isn’t calling this metric FARPP
Earnings Call Highlights
Zuckerberg stressed Facebook’s need to stay focused on addressing social issues and consequences of the company’s growth during the earnings call. He said Facebook will continue to make its apps more private and secure.
As for product updates, Zuckerberg seized on opportunities in commerce. Facebook is building out WhatsApp Pay, and he says “I expect this to start rolling out in a number of countries and for us to make a lot of progress here in the next six months.” 140 million small businesses now use its tools. People bought almost $5 million in content on the Oculus Store on Christmas Day, which Zuckerberg called a milestone. He says Facebook’s Spark AR platform is most used of its kind by developers, with hundreds of millions of people experiencing face filters built with it.
Regarding plans to integrate the family’s chat interfaces, Zuckerberg says Messenger, Instagram, and WhatsApp will retain their brands. He also noted they’re already quite integrated on the backend…which could be an attempt to persuade regulators it might be difficult to break up the company.
For guidance, Wehner said “we expect our year-over-year total reported revenue growth rate in Q1 to decelerate by low-to-mid single digit percentage points as compared to our Q4 growth rate. “Factors driving this deceleration include the maturity of our business, as well as the increasing impact from global privacy regulation and other ad targeting related headwinds.”
Wehner says to expect that the worst of these privacy headwinds are still to come due to regulatory initiatives like GDPR and CCPA, mobile operating systems and browser providers like Apple and Google limiting access to ad targeting singals, and Facebook’s own product changes like the new way to disconnect off-Facebook data from your acccount.
On Facebook’s perception issues, Zuckerberg said “We’re also focused on communicating more clearly what we stand for. One critique of our approach for much of the last decade was that, because we wanted to be liked, we didn’t always communicate our views as clearly because we were worried about offending people. So this led to some positive but shallow sentiments towards us and towards the company. And my goal for this next decade isn’t to be liked, but to be understood, because in order to be trusted, people need to know what you stand for.”
Building Despite Scrutiny
The business aside, Facebook had another tough quarter under the scrutiny of journalists and regulators. Democratic presidential candidates have railed against Zuckerberg’s decision to continuing allowing misinformation in political ads. The company dropped out of the top 10 places to work, and pledged $130 million to fund an Oversight Board for its content policies.
The CEO was grilled on Capitol Hill about Facebook’s cryptocurrency Libra that seems stuck in its tracks as major partners like Visa and Stripe dropped out. Facebook took heat for how its treats content moderators and how it tried to cut off competitors from its developer platform. The FTC continued its anti-trust investigation and weighed an injunction that would halt Facebook intermingling its messaging app infrastructure.
But those headwinds didn’t stop Facebook’s march forward. Its four main apps took the top four spots amongst the most downloaded apps of the 2010s. It moved deeper into hardware sales with its new Portal TV attachable camera. It acquired gaming companies like Playgiga and the studio behind VR hit Beat Saber, while signing exclusive game streaming deals with influencers like Disguised Toast. It launched Facebook News, Facebook Pay, its dating feature in the US, and it tested a meme-making app called Whale.
Facebook’s share price remains near an all-time high despite today’s tumble. While the world may be increasingly uncomfortable with Facebook’s access to private data, there’s no debate about how incredibly valuable that data is.
Facebook hits 2.5B users in Q4 but shares sink from slow profits
Apple shares up 3% after company beats earnings expectations
Apple’s latest quarter surpassed earnings expectations, sending the stock up about 3% in initial after-hours trading.
Its fiscal first quarter of 2017 saw record earnings of $3.36 per share, well above the $3.21 forecast by Wall Street. Revenue also beat, coming in at $78.4 billion, versus the $77.3 analysts were predicting.
Investors were pleased that the company sold 78.3 million… Read More
Apple shares up 3% after company beats earnings expectations