You might think the big story of Match Group’s first-quarter earnings is Tinder’s turnaround. Dating app income is slightly up again after quarter after quarter of declines.
But we’d like to point out a comment the CFO made about how the company is slowing down its hiring right now because it needs more money to pay for AI tools for its employees.
Ah yes, the good “blame the AI” strategy!
While speaking to analysts on the 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, as well as how Match was paying for it.
“We’re making a big push toward AI enablement. We’re giving every employee in the company access to all the cutting-edge tools. We’re giving them the training they need to be successful. We’re setting expectations. We really want to become an AI-native company,” Bailey said.
“We think it’s a great opportunity. But these tools cost a lot of money, as I’m sure you know, and the way we’re helping to 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 a slowdown in hiring and reduced headcount would offset increased software expenses. Additionally, Match Group is betting that the increased productivity resulting from employees’ use of AI will ultimately increase revenue growth, the numbers expert explained.
While on the surface this seems like another example of AI taking people’s jobs (in this case, forcing a company to reduce its number of open positions), there is likely more nuance to this story.
Let’s keep in mind that Match Group’s flagship app, Tinder, has had problems in recent years. This quarter may be the beginning of a change, as monthly active users decreased 7% in March compared to the much steeper drop of 10% a year ago. Tinder registrations also grew 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 could be a brief incident driven by users’ curiosity about various products. improvements and new features, as IRL events. Time will tell.
Dating meets a generational shift
Match Group is still a company that has to work to make more money from a shrinking and less active user base, which, to the company’s credit, it did exactly that. Matches Revenue was $864 million. in the first quarter, a year-on-year increase of 4%. However, your next quarter estimates are falling: around $850-$860 million, down 2% from the previous year.
All of these struggles come after many months of what appears to be a growing disinterest in the use of dating apps by younger people. This generational change sees people opting to meet in real lifeperhaps pursuing an interest, such as run, book clubsor a hobby that connects them with other people, which then, in turn, expands your network, increasing your chances of meeting someone new.
The trend coincides with a resurgence of nostalgic technologysuch as digital cameras, flip phones, boomboxes and even landlines, indicating a generation that feels exhausted by always-on connectivity and seeks analog pleasures.
Match Group is aware of this significant change and says it is pivoting to address the challenge by increasing the number of its own IRL events.
“Gen Z desperately wants to connect. They know they want to meet new people. They just want to do it in a low-pressure, risk-free way that doesn’t feel like a job interview,” Match CFO Rascoff told investors on the call. “Traditional dating apps are very structured and can be intimidating for a user under 30. So I think the growth of these alternative ways of meeting new people speaks to how Generation Z is trying to find ways to connect with less pressure.”
“Obviously we have adapted our roadmap to this reality,” he said.
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