Match Earnings: User Monetization Is the Bright Spot and Relationship With User Growth to Improve

While Match Group posted its second consecutive year-over-year quarterly revenue decline, our overall takeaway from the first quarter results was positive. We think Tinder's higher prices and further user adoption of Hinge with minimal cannibalization of Tinder will return growth to the top line, which, combined with continuing cost controls and lower user acquisition costs due to the firm's network effect, will expand margins this year and in 2024. We were also pleased with the firm's longer-term capital allocation strategy to return at least 50% of free cash flow to shareholders, more likely in the form of share buybacks. We are maintaining our $70 fair value estimate of narrow-moat Match and view the stock as attractive.