Match Group is down 20% after announcing second-quarter financials

Match Group (NASDAQ: MTCH) stock dropped 20% after recording a second-quarter EPS of 11c, which is 68c less than the 57c analyst estimate. Total revenue in the same quarter came to $794.5 million, which is also less than the $804.33 million consensus estimate.

Financial highlights 

Even the total revenue in the second quarter increased by 12% compared to the same quarter of the previous fiscal year. Its $10 million operating loss was driven by an impairment of intangibles of $217 million linked to the Hyperconnect deal.

The company recorded a $286 million adjusted operating income, representing a 9% increase compared to what the reported in the same quarter of the previous fiscal year. Payers increased from 15 million up to 16.4 million, representing a 10% increase.

Direct revenue from Tinder also increased by about 13% in the second quarter compared to what it reported in the same quarter of the last financial year. This rise was driven by the 14% growth of Payers.

All the other brands under the Match Group umbrella recorded collective direct revenue growth of about 12% year-over-year. This was driven by a 2% Payers growth and a 5% RPP increase to 5,5 million.

Free cash flow and operating cash flow were negative $7 million and $20 million respectively. These numbers were driven by the payment linked to the Tinder litigation settlement, which was around $441 million.

Management statements 

The company’s Chief Executive Officer, Bernard Kim, and its Chief Operating Officer, Gary Swidler, wrote a letter to their shareholders saying:

They continued: