Users Leave Dating Apps Hanging

Key Takeaways:

• Dating apps remained under pressure in 2Q24, likely due to user fatigue, advertising campaigns that failed to resonate, the fear of being scammed online and slowing adoption by younger generations

  • This is evident in recent app performance trends for the dating cohort; worldwide downloads fell <1% YoY in 1Q24, while MAU growth slid 10% YoY, an acceleration from prior quarters

• Robust advertising spend in recent years has failed to drive usage or engagement, suggesting that the cuts in YTD 2024 ad spend will have an outsized negative impact on downloads, usage and engagement in 2Q24

• Given the size of Tinder, relative to the broader dating cohort and within the Match Group, the continuing declines in performance across metrics is a risk to Match Group earnings, despite the ongoing introduction of new features, such as a partnership with HelloFresh; still price increases for subscriptions could mitigate the risk to revenue

  • Hinge is a bright spot in the Match portfolio, with positive download and user growth momentum, though it's not enough to offset the Tinder impact

• Bumble’s recent marketing fumble will further weigh on its MAU growth, potentially affecting reported paying subscriber growth and forcing additional marketing expense to redeem its reputation, a negative to profits

• Grindr’s trends remain positive but slowing, though it continues to grow active users and revenue, particularly as it expands into new markets. Given the high levels of engagement for its users, the Grindr platform has become increasingly attractive to potential advertisers

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