According to parent company Match Group, which released its Q2 2023 earnings on Tuesday, Tinder is gearing up to introduce a new “high-end” subscription later this fall as well as better appeal to Gen Z users.
Tinder CPO Mark van Ryswyk announced Tinder’s new membership earlier this year and called the $500/month service a “Tinder vault” in an interview with Fast Company. Van Ryswyk used lessons learned from Match Group’s July 2022 acquisition of The League, another expensive dating service that can charge users up to $1,000 per week, as inspiration for the new offering.
Why does Tinder Need a New Plan?
According to the executive, this showed a market for daters willing to pay for high-quality matches and experiences that help them start new relationships. However, instead of using matchmakers, the solution will rely on technology, he said.
Given the added benefits involved, the firm said today that it expects the new subscription prices to be “significantly higher” than Tinder’s existing options. The product will also only be offered in small quantities, making it a special offer. Additional information was not included in the company’s shareholder letter, although it may be discussed during the question-and-answer portion of the call with investors tomorrow.
Additionally, Tinder will launch a “significant” product refresh in the second half of the year, according to the firm, to better serve its core Gen Z customer base. This update will use AI to deliver the right content to the right users and will include features like prompts, quizzes, and discussion starters.
Tinder’s shareholder letter states, “While the core swipe feature will remain central to the Tinder experience, the changes are intended to make the app more dynamic and engaging.” We expect these features to roll out in some markets later this month.
Match Group Revenue Forecast
Match Group forecast sales of $875-885 million for the upcoming quarter, noting Tinder’s return to growth, and revenue of $830 million for the quarter, up 4% year over year. FactSet predicts the company will report revenue of $811.4 million.
According to the company, Tinder’s strategic decision to focus on optimization and a new marketing campaign during the first half of the year, “it starts with a swipe,” resulted in “revenue acceleration and increased user growth.” Air, which led to direct revenue of $475 million in Q2, an increase of 6% year over year.
The ad was effective in encouraging lapsed users, especially women, to sign up again and increasing the number of new users.
The firm also cited popular weekly subscription packages and new US pricing adjustments that were released at the end of Q1 as contributing to Tinder’s growth.
Tinder’s pricing reform had the unintended consequence of reducing payers, which fell 4% year-over-year to 10.5 million with a drop in conversions. Overall Match group users fell 5% to 15.6 million from a year ago.
Hinge was listed as one of the top three dating applications by download in 14 markets worldwide, among other financial highlights. With 1.02 million users, the app also generated $90 million in revenue during the quarter, up 44 percent from the same period last year.
Additionally, the business (Tinder) disclosed an operating income of $215 million or an operating margin of 26%. After adjustments, operating income came in at $301 million, or a 36% margin.