Today, the world leader in the online dating business finds itself in unfamiliar territory: the number of paying customers across Match’s collection of dating apps is declining. The company ended Q2 FY23 with 15.6 million Payers, down 5% YoY; notably, this outcome reflected a 4% YoY decline at the company’s leading app (Tinder Payers declined by ~400,000 to 10.5 million), along with a 6% YoY decline in its leading region (Americas Payers declined by ~500,000 to 7.7 million). That said, the pressure on Payer volumes was more than offset by a significant increase in revenues per payer, or RPP. As shown in the second chart below, global RPP exceeded $17 (per month) in Q2 FY23, which was up ~10% YoY – the largest (%) increase in Match’s RPP in more than two years (with management’s guidance, by my calculations, suggesting a mid-teens YoY increase in Q3).

What explains the diverging trends in the underlying drivers of Match’s business? And for investors, are these changes likely to precede improved financial performance - as well as a higher stock price - for Match Group? (The stock, at ~$44 per share, is down ~75% from the late 2021 highs.)