Match Group, Inc.

Welcome to the Match Group Second Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Tani Shelburne, Senior Vice President of Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. Today's call will be led by CEO Bernard Kim and President and CFO Gary Swidler. 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 risk 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. With that, I'd like to turn the call over to BK.

Thank you, Tani. Good morning, and thank you all for joining today's call. Overall, we are pleased with our Q2 results and the progress we have made across our portfolio. Over my two years, it feels like currents are finally flowing with us, and we have key elements working in our favor across the company. This is the beginning of a broader transformation as Tinder continues to show stabilization, Hinge is a rocket ship expanding rapidly, Azar continues to perform strongly, and marketing at pairs has driven user strength. And we're executing on a number of great initiatives throughout the entire company. Over the last several quarters, Tinder has been working hard to improve the user experience and we're now starting to see initial signs of progress. User and payer trends are stabilizing, and we expect them to continue to improve from here. We expect strong sequential payer growth in Q3 and better year-over-year MAU trends in the second half of the year. As the largest dating app in the world, it's Tinder's job to deliver for its users, which in turn helps attract new users. Tinder is building on its fun legacy and its iconic swipe experience by continuing to increase authenticity and realness, and by setting the industry standard for trust and safety. We believe this will address some of the concerns that users have been vocal about more recently. Over the next 12 months, Tinder intends to integrate AI more deeply to make the dating journey simpler and more effective. such that we expect daters to look at Tinder and see an exciting, innovative, and fresh experience. Tinder is already making strides as it works to achieve this vision. They've been working tirelessly to clean up its ecosystem. Enhanced tools are being tested to increase authenticity, with more to come in Q3. And AI-driven tools like Photo Selector are being deployed to make the Tinder experience easier and more effective. Next year, I expect an even bolder evolution of product to vastly improve its core matching experience. You've heard a constant theme of innovation from us, and it's happening. But keep in mind, when you have a $2-plus billion revenue business and nearly 50 million MAU globally all interacting in a connected and delicate ecosystem, innovation requires some pretty elite-level gymnastics. This effort requires a willingness to reimagine the core while building off of what already makes Tinder, Tinder. It's what we began doing with the major ecosystem cleanup initiated mid last year. And while the results weren't entirely predictable and certainly not linear, we believe they are paying off. We expect Tinder's initiatives to be iterative and continue to build off one another and to be coupled with continued strong marketing. There is even more to come in the second half of this year and into 2025. and I'm excited to share further progress with you at our Investor Day. Hinge continues to show remarkable performance, growing direct revenue nearly 50% year-over-year in Q2. It continues to rapidly grow its share of downloads in most of its markets. New product features like Your Turn Limits are driving higher quality conversations Its AI-enabled Top Photo and Photo Finder are making the user journey meaningfully better, and users are getting out on great dates even faster. Hinge's new marketing campaigns are also resonating, driving new user growth and getting incredibly positive press coverage. We expect that over the coming quarters, Match Group will own both the leading dating app in the world with durable growth, and the fastest-growing at-scale dating app for intentioned daters, as well as a host of growing brands behind them. We're also nurturing other growth brands across the portfolio. Azar's user growth and financial momentum are strong, driven by cutting-edge AI product innovation and a successful expansion into Europe. We also continue to add demographically focused emerging brands to our portfolio. We see clear opportunities to build new social experiences and leverage the latest in technology. Our unyielding commitment to trust and safety, along with our utilization of AI in a safe and responsible way, will clearly benefit users across our entire portfolio. In other areas of our business, we're refocusing our efforts to play to our strengths. We've decided to exit live streaming services in our dating apps and Sunset Hyperconnect's Hakuna app, which provides live streaming services primarily in Korea and Japan. While live streaming services brought some benefits to our portfolio and users, a couple things have changed since we undertook these businesses, which have made them less beneficial. Since the pandemic with people sitting on Zooms all day, the novelty of live streaming video has declined. Additionally, these businesses require significant further investment and their financial profiles are below what we ultimately like our brands to achieve. We expect exiting live streaming along with other initiatives across the portfolio will result in a workforce reduction of approximately 6% globally, which we expect to result in incremental annual cost savings of approximately $13 million, which is in addition to our previously disclosed cost-saving expectations from our tech replatforming efforts. It is important to reiterate the value that HyperConnect has brought to Match Group, including a strongly growing asset in Azar and world-class AI expertise. The HyperConnect team has been integral in creating several of the AI-enabled features that have been introduced across our brands, including Tinder's Photo Selector and Hinge's Top Photo and Photo Finder. This is just one example of how we're leveraging common technologies across our portfolio, but tailoring them to each specific brand. With this in mind, we plan to redeploy some of our retained HyperConnect talent to Azure, Tinder, and Hinge, especially given the significant opportunity that we see to further embed AI-driven capabilities into our brands. We recognize that shareholders rightfully expect both near and long-term results. We not only embrace that challenge, but we think it's exactly how innovation should occur. At Tinder, innovation in a large-scale ecosystem makes it difficult to predict exactly which features will succeed and when. But the market opportunity is there, the vision is clear, and the team is executing. Hinge's momentum is undeniable and is on its path to become a $1 billion revenue business. And we're being financially disciplined in undertaking all this product innovation, which we expect will result in sustained user growth. Moreover, where we don't see as clear a path to growth, we're cutting back on cost, as is the case with our evergreen brands. We understand that if we can't deliver a return to solid, sustainable growth, other choices will need to be considered. We think that doomsday scenarios around dating apps are way overblown. and you can start to see that in our results this quarter. We have product work to do, but once we do that, we are confident that the growth potential for our business is significant. Dating apps are still the best way for people to meet, and we intend to continue to capture that opportunity. We welcome shareholder input, and we remain committed to the delivery of increased shareholder value. We expect demonstrable progress quarter over quarter in our innovation and product development efforts. We believe return of capital can be a nice component of shareholder return given the highly profitable and cash flow generated nature of our business. And we've been buying back our stock aggressively because we believe it represents a terrific long-term investment. We look forward to sharing a deeper dive in our first ever Investor Day in December, where I'm excited to showcase the management team behind these incredible apps. With that, I will hand it over to Gary.