You might think the big story from Match Group’s first-quarter earnings is Tinder’s recovery. Dating app revenue is again slightly high after quarter after quarter declines.
But we’d like to highlight a comment the CFO made about how the company is slowing hiring right now because it needs more money to pay for AI tools for its employees.
Ah yes, the good ‘let’s blame the AI’ strategy!
Speaking to analysts on its first-quarter earnings call, Match Group CFO Steven Bailey talked about how the dating app giant was investing in AI technology for internal use at the company — and how Match was paying for it.
“We’re making a big push around enabling AI. We’re giving every employee in the company access to all the cutting-edge tools. We’re giving them the training they need to succeed. We’re setting expectations. We really want to be a native AI company,” Bailey said.
“We think it’s a huge opportunity. But these tools cost a lot of money, as I’m sure you know, and so the way we’re helping pay for that is by slowing down our hiring plans for the rest of the year,” he added.
The company assured investors that the impact would be cost-neutral, as slower hiring and lower headcount would offset increased software spending. In addition, Match Group is betting that increased productivity from the use of artificial intelligence by employees will ultimately increase revenue growth, the legendary figure explained.
While on the surface this looks like another example of AI taking people’s jobs — in this case, forcing a company to reduce its number of open positions — there’s probably more nuance to this story.
Let’s keep in mind that Match Group’s flagship app, Tinder, has been struggling in recent years. This quarter may be the start of a recovery, as monthly active users fell 7% in March compared to a steeper 10% decline a year ago. Tinder signups also increased for the first time since 2024, but by just 1%, as Bloomberg he pointed out.
This is perhaps a positive sign for Tinder. Or it can be a short flashback due to user curiosity about various product improvements and new features, such as IRL events. Time will tell.
Dating meets a generational change
Match Group remains a company that needs to work to squeeze more money out of an often shrinking, less active user base — which, to the company’s credit, has done just that. of the fight revenue was $864 million in the first quarter, up 4% year-on-year. However, next quarter estimates come in lower — about $850-860 million, down 2% at constant prices year over year.
All of these struggles come after many months of what appears to be a growing disinterest in dating app usage by younger people. This generational change sees people choosing to meet in real lifeperhaps pursuing an interest, such as run, book clubsor a hobby that connects them with other people, who then, in turn, expand their network, increasing their chances of meeting someone new.
The trend coincides with the resurgence of nostalgic technology such as digital cameras, flip phones, boomboxes and even landlines, signaling a generation that feels exhausted by constant connectivity and seeks analog pleasures.
Match Group is aware of this major shift and says it is gearing up to meet the challenge by increasing the number of its own IRL events.
“Gen Z is desperate to connect. They know they want to meet new people. They just want to do it in a low-pressure, low-stakes way that doesn’t feel like a job interview,” Match CEO Spencer Rascoff told investors. “Traditional dating apps are very structured and can be intimidating for an under-30 user. So I think the development of these alternative ways to meet new people speaks to how Gen Z is trying to find lower-pressure ways to connect.”
“Obviously we’ve adjusted our roadmap to that reality,” he said.
Updated after publication to correct a typo. Rascoff is CEO, not CFO.
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