After a decade of facilitating casual hook-ups, lifelong relationships, and everything in between, Tinder has lost its spark.
The world’s most successful dating app finds itself on the financial skids, struggling with meager user growth and stagnant revenue despite a post-COVID reopening that should be favorable to its fortunes.
Tinder’s parent company, Match Group, released fourth-quarter earnings Tuesday that showed the app’s revenue was flat year over year, owing to a 3% increase in paying users and a 2% decline in revenue per paying user. Match Group, which also owns the Hinge, OKCupid, Match, and Plenty of Fish apps, reported that company-wide revenue rose a scant 2% and operating income fell 54% year over year.
So what’s got Tinder down in the dumps? In short, too many people find themselves in a loveless relationship with the app.
For much of the 2010s, Tinder cruised on its first-mover advantage and massive user base, generally fending off competition from upstarts like Bumble and Hinge (Match Group acquired the latter in 2019). Those upper hands helped Tinder remain popular despite an undercurrent of discontent about the user experience among women, some of whom reported harassment from men merely looking for casual sex.
But as the years went on, the dating app scene matured. Tinder competitors siphoned off users seeking longer-term relationships, while Gen Z didn’t take to the app quite like its millennial predecessors. Match Group executives also conducted research showing that women “just didn’t enjoy the time they spent on the app,” Fortune’s Emma Hinchliffe reported in May 2022 as part of a profile of then-CEO Renate Nyborg. (Tinder remains the most-used dating app by a wide margin.)
Tinder has tried to touch up its image, but those efforts have been repeatedly stalled by leadership turnover. Tinder’s last two chief executives—Jim Lanzone and Nyborg, its first female leader—lasted less than 18 months atop the app. Match Group CEO Bernard Kim, who joined the company last year from mobile gaming giant Zynga, serves as Tinder’s interim leader after he dumped Nyborg in August 2022.
As Bloomberg’s Chris Bryant noted last month, Tinder still could access a vast, untapped user base across the globe. Match Group also hasn’t taken advantage of its advertising potential, generating a paltry $58.7 million, or 2% of total revenue, off ads and other non-subscription-related sales in 2022.
To that end, Match Group executives detailed a roadmap for 2023 on Thursday that looks to boost interest among Gen Z users and recast Tinder’s image.
In a letter to shareholders, Kim and CFO Gary Swidler said they want to focus on “creating more authentic moments and opportunities for self-expression, which are especially important to Gen Z.” While some of those plans are a bit vague for now—”broader inclusivity,” “more personalized discovery,” “new payment methods”—the comments at least show the company knows it’s lagging with its prime demographic.
More interestingly, Kim and Swidler offered more details about Tinder’s upcoming “first-ever global marketing campaign,” which will total tens of millions of dollars. The duo didn’t explicitly identify the goals of the marketing effort, but past comments by Tinder executives suggest the campaign will aim to re-engage women and weaken the “hookup culture” stigma attached to the app.
“From its inception, Tinder grew rapidly through strong, organic word-of-mouth, so there was less of a need to market,” Kim and Swidler wrote. “However, over time, this lack of marketing has contributed to a narrow brand perception that does not celebrate the breadth of relationship possibilities Tinder creates every day.”
Match Group executives will need to spend 2023 convincing Wall Street that they can make consumers fall back in love with Tinder. The company’s stock price has swooned 56% in the past 12 months, and shares were down 8% in midday trading Wednesday after earnings fell short of analyst expectations.
The decline reflects the well-known challenges afflicting Match Group’s main squeeze. Now comes the hard part for Tinder: finally finding more new customers and mending fences with jilted lovers.
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Jacob Carpenter
