Match Group, the company that owns several dating apps including Tinder and Hinge, released its first-quarter earnings report on Tuesday, showing that Tinder’s paying user base declined for the sixth consecutive quarter. On the other hand, Hinge has seen an increase in members willing to pay for the app. Tinder had 10 million paying users in the first quarter of 2024, down 9% year over year. Hinge now has 1.4 million paid users, a 31% increase from last year.
Tinder’s demise was predictable due to the shift in dating app culture that has taken place in recent years. Younger users are more interested in serious, long-term relationships than the casual hookups that Tinder is known for. Since its launch, Hinge has gained popularity among users looking for more substantial connections.
While Tinder struggles to retain paying users, Hinge is on track to become a “$1 billion company,” CEO Bernard Kim touted during a conference call with investors Wednesday morning. Hinge has seen significant revenue growth over the past six years, with direct revenue rising to $124 million in the first quarter, a 50% increase year-over-year. In 2023 alone, Hinge brought in $396 million.
One problem Tinder is currently facing is convincing members to see the value of its a la carte (ALC) features or in-app purchases, which include Super Likes, Boosts, See Who Likes You” and more. ALC revenue accounts for approximately 20% of Tinder’s direct revenue. However, in the first quarter of 2024, ALC sales fell 13%. This is in contrast to the record high a la carte purchases in 2018.
Match Group CFO Gary Swidler admitted during the conference call that weaker a la carte revenue growth has been a downward trend for some time. However, it has become “more serious recently” and is “hindering our ability to perform very well.”
“We expect the decline in ALC revenue to be due to declines in users and lower average purchase volumes, due in part to weaker consumer spending among younger users, among other things,” Swidler said, adding that the number of Tinder Payers are expected to drop interest rates by a similar amount in the second quarter. The company expects there will be signs of improvement in the third quarter.
The main reason for introducing an a la carte offering was to address the needs of the price-conscious Generation Z and help them get noticed by potential partners at a lower price. Match says it will continue to introduce new a la carte features on Tinder “at affordable prices” in the coming quarters, Swidler added.
However, instead of adding more options, Tinder might consider its sister dating app Hinge, which only offers two a la carte features: Boosts and Roses.
Tinder has made several attempts to improve the overall product experience, including introducing new safety features such as “Share My Date,” which allows users to share their date plans with friends. Later this summer, the app will require facial photos on every profile. It also introduces an AI Photo Selector feature that selects 10 of the best images from a user’s camera roll to improve profile quality.