Match Group Inc projected fourth-quarter revenue below market estimates on Tuesday as COVID-19 hit the Tinder owner’s business in Asia and delayed the launch of new features on the recently bought video-chatting app Azar.
A Delta variant surge during the quarter had prompted fresh restrictions in several Asian countries, halting a recovery in the company’s key growth markets.
“We continue to feel some lingering COVID effects across Asia, particularly in Japan, our second-largest market by revenue,” Match said in a statement, sending its shares down 6%.
The company expects fourth-quarter revenue between $810 million and $820 million, below analysts’ average estimate of $838.5 million, according to Refinitiv.
The forecast was also weighed down by lower expected contribution from Hyperconnect, which Match bought earlier this year for $1.73 billion. The South Korean firm’s flagship app Azar has faced a drop in usage and product development issues due to the pandemic.
Match said it was working to sharpen Hyperconnect’s focus on social interaction, like its other dating apps, although this process was likely to take some time.
The company has tried to keep users interested after the pandemic boom last year by adding new features such as “Plus One” on Tinder to help single people find dates for a wedding.
Dallas, Texas-based Match said it was on track to pay more than $550 million in fees to app stores in 2021, as it navigates changes brought on by Google and Apple Inc.
Improvements have started to emerge in the fairness of the app ecosystem, but there is a long way to go, it said.
Revenue rose 25% to $801.8 million in the third quarter, but missed estimates. The company added 16.3 million payers and revenue per payer rose 8%.
Net profit came in at 43 cents per share, missing expectations of 55 cents.
—Reporting by Nilanjana Basu in Bengaluru; Editing by Aditya Soni