UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 |
FORM 10-K | ||
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2018 | ||
Delaware (State or other jurisdiction of incorporation or organization) | 26-4278917 (I.R.S. Employer Identification No.) | |
8750 North Central Expressway, Suite 1400, Dallas, Texas (Address of Registrant’s principal executive offices) | 75231 (Zip Code) |
Title of each class | Name of exchange on which registered | |
Common Stock, par value $0.001 | The Nasdaq Stock Market LLC (Nasdaq Global Select Market) |
Large accelerated filer ý | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | Emerging growth company o |
Common Stock | 68,529,512 | ||
Class B Common Stock | 209,919,402 | ||
Class C Common Stock | — | ||
Total | 278,448,914 |
Page Number | ||
• | Expanded options: Dating products provide users access to a large number of like-minded people they otherwise would not have a chance to meet. |
• | Efficiency: The search and matching features, as well as the profile information available on dating products, allow users to filter a large number of options in a short period of time, increasing the likelihood that users will make a connection with someone. |
• | More comfort and control: Compared to the traditional ways that people meet, dating products provide an environment that reduces the awkwardness around the process of reaching out to new people. This leads to many people who would otherwise be passive participants in the dating process taking a more active role. |
• | Convenience: The nature of the internet and the proliferation of mobile devices allow users to connect with new people at any time, regardless of where they are. |
• | Brand recognition: Brand is very important. Users generally associate strong dating brands with a higher likelihood of success and a higher level of security. Generally, successful dating brands depend on large, |
• | Successful experiences: Demonstrated success of other users attracts new users through word-of-mouth recommendations. Successful experiences also drive repeat usage. |
• | Community identification: Users typically look for dating products that offer a community or communities with which the user can associate. By selecting a dating product that is focused on a particular demographic, religion, geography or intent (for example, casual dating or more serious relationships), users can increase the likelihood that they will make a connection with someone with whom they identify. |
• | Product features and user experience: Users tend to gravitate towards dating products that offer features and user experiences that resonate with them, such as question-based matching algorithms, location-based features, offline events or search capabilities. User experience is also driven by the type of user interface (for example, swiping versus scrolling), a particular mix of free and paid features, ease of use, privacy and security. Users expect every interaction with a dating product to be seamless and intuitive. |
• | centralizing operational functions across certain brands where we have strength in personnel and sufficient commonality of business interest (for example, ad sales, online marketing and technology centralized across some, but not all, brands); |
• | developing talent across the portfolio to allow for expertise development and career advancement while giving us the ability to deploy the best talent in the most critical positions across the company at any given time; |
• | sharing analytics and similar data to leverage product and marketing successes across our businesses rapidly for competitive advantage; and |
• | centralizing certain administrative functions, like legal, trust and safety, privacy, human resources, and finance, across the entire portfolio to enable each brand to focus more on growth. |
• | our ability to continue to increase consumer acceptance and adoption of online dating products, particularly in emerging markets and other parts of the world where the stigma is only beginning to erode; |
• | continued growth in internet access and smart phone adoption in certain regions of the world, particularly emerging markets; |
• | the continued strength of our brands; |
• | the breadth and depth of our active communities of users relative to those of our competitors; |
• | our ability to evolve our products in response to our competitors’ offerings, user requirements, social trends, the ever-evolving technological landscape, and the ever-changing regulatory landscape, in particular, as it relates to the regulation of online platforms; |
• | our ability to efficiently acquire new users for our products; |
• | our ability to continue to optimize our monetization strategies; and |
• | the design and functionality of our products. |
• | operational and compliance challenges caused by distance, language and cultural differences; |
• | difficulties in staffing and managing international operations; |
• | differing levels of social and technological acceptance of our dating products or lack of acceptance of them generally; |
• | foreign currency fluctuations; |
• | restrictions on the transfer of funds among countries and back to the United States and costs associated with repatriating funds to the United States; |
• | differing and potentially adverse tax laws; |
• | multiple, conflicting and changing laws, rules and regulations, and difficulties understanding and ensuring compliance with those laws by both our employees and our business partners, over whom we exert no control; |
• | compliance challenges due to different laws and regulatory environments, particularly in the case of privacy and data security; |
• | competitive environments that favor local businesses; |
• | limitations on the level of intellectual property protection; and |
• | trade sanctions, political unrest, terrorism, war and epidemics or the threat of any of these events. |
• | properly value prospective acquisitions, especially those with limited operating histories; |
• | accurately review acquisition candidates’ business practices against applicable laws and regulations and, where applicable, implement proper remediation controls, procedures, and policies; |
• | successfully integrate the operations, as well as the accounting, financial controls, management information, technology, human resources and other administrative systems, of acquired businesses with our existing operations and systems; |
• | successfully identify and realize potential synergies among acquired and existing businesses; |
• | fully identify potential risks and liabilities associated with acquired businesses; |
• | retain or hire senior management and other key personnel at acquired businesses; and |
• | successfully manage acquisition-related strain on our management, operations and financial resources and those of the various brands in our portfolio. |
• | the election of our board of directors and, through our board of directors, decision-making with respect to our business direction and policies, including the appointment and removal of our officers; |
• | acquisitions or dispositions of businesses or assets, mergers or other business combinations; |
• | issuances of shares of our common stock, Class B common stock, Class C common stock and our capital structure; |
• | corporate opportunities that may be suitable for us and IAC, subject to the corporate opportunity provisions in our certificate of incorporation, as described below; |
• | our financing activities, including the issuance of additional debt and equity securities, or the incurrence of other indebtedness generally; |
• | the payment of dividends; and |
• | the number of shares available for issuance under our equity incentive plans for our prospective and existing employees. |
• | corporate opportunities; |
• | the impact that operating decisions for our business may have on IAC’s consolidated financial statements; |
• | the impact that operating or capital decisions (including the incurrence of indebtedness) for our business may have on IAC’s current or future indebtedness or the covenants under that indebtedness; |
• | business combinations involving us; |
• | our dividend policy; |
• | management stock ownership; and |
• | the intercompany services and agreements between IAC and us. |
• | tax, employee benefit, indemnification and other matters; |
• | the nature, quality and pricing of services IAC agrees to provide to us; |
• | sales or other disposal by IAC of all or a portion of its ownership interest in us; and |
• | business combinations involving us. |
• | that a majority of our board of directors consists of “independent directors,” as defined under the Marketplace Rules; and |
• | that we have a nominating/governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. |
• | limiting our ability to obtain additional financing to fund our working capital needs, acquisitions, capital expenditures or other debt service requirements or for other purposes; |
• | limiting our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to service debt; |
• | limiting our ability to compete with other companies who are not as highly leveraged, as we may be less capable of responding to adverse economic and industry conditions; |
• | restricting us from making strategic acquisitions, developing properties or exploiting business opportunities; |
• | restricting the way in which we conduct our business because of financial and operating covenants in the agreements governing our and certain of our subsidiaries’ existing and future indebtedness, including, in the case of certain indebtedness of subsidiaries, certain covenants that restrict the ability of subsidiaries to pay dividends or make other distributions to us; |
• | exposing us to potential events of default (if not cured or waived) under financial and operating covenants contained in our or our subsidiaries’ debt instruments that could have a material adverse effect on our business, financial condition and operating results; increasing our vulnerability to a downturn in general economic conditions or in pricing of our products; and |
• | limiting our ability to react to changing market conditions in our industry and in our customers’ industries. |
• | our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, many of which are beyond our control; and |
• | our future ability to borrow under our revolving credit facility, the availability of which will depend on, among other things, our complying with the covenants in the then-existing agreements governing our indebtedness. |
• | create liens on certain assets; |
• | incur additional debt; |
• | make certain investments and acquisitions; |
• | consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; |
• | sell certain assets; |
• | pay dividends on or make distributions in respect of our capital stock or make restricted payments; |
• | enter into certain transactions with our affiliates; and |
• | place restrictions on distributions from subsidiaries. |
• | price and volume fluctuations in the overall stock market from time to time; |
• | volatility in the market prices and trading volumes of technology stocks generally, or those in our industry in particular; |
• | changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; |
• | volatility in the market price of our common stock due to the limited number of shares of our common stock held by the public; |
• | sales of shares of our stock by us and/or our directors, executive officers, employees and stockholders; |
• | the failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company or our failure to meet these estimates or the expectations of investors; |
• | the financial projections we may provide to the public, and any changes in those projections or our failure to meet those projections; |
• | announcements by us or our competitors of new brands, products or services; |
• | the public’s reaction to our earnings releases, other public announcements and filings with the SEC; |
• | rumors and market speculation involving us or other companies in our industry; |
• | actual or anticipated changes in our operating results or fluctuations in our operating results; |
• | actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally; |
• | litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; |
• | developments or disputes concerning our intellectual property or other proprietary rights; |
• | announced or completed acquisitions of businesses or technologies by us or our competitors; |
• | new laws or regulations or new interpretations of (or changes to) existing laws or regulations applicable to our business; |
• | changes in accounting standards, policies, guidelines, interpretations or principles; |
• | any significant change in our management; and |
• | general economic conditions and slow or negative growth in any of our significant markets. |
• | the timing, size and effectiveness of our marketing efforts; |
• | fluctuations in the rate at which we attract new users, the level of engagement of such users and the propensity of such users to subscribe to our brands or to purchase à la carte features; |
• | increases or decreases in our revenues and expenses caused by fluctuations in foreign currency exchange rates; |
• | the timing, size and effectiveness of non-marketing operating expenses that we may incur to grow and expand our operations, develop new products and remain competitive; |
• | the performance, reliability and availability of our technology, network systems and infrastructure and data centers; |
• | operational and financial risks we may experience in connection with historical and potential future acquisitions and investments; and |
• | general economic conditions in either domestic or international markets. |
• | our historic and projected financial condition, liquidity and results of operations; |
• | our capital levels and needs; |
• | tax considerations; |
• | any acquisitions or potential acquisitions that we may consider; |
• | statutory and regulatory prohibitions and other limitations; |
• | the terms of any credit agreements or other borrowing arrangements that restrict our ability to pay cash dividends, including the Match Group Credit Agreement and the indenture relating to the Match Group Senior Notes; |
• | general economic conditions; and |
• | other factors deemed relevant by our board of directors. |
• | authorize the issuance of “blank check” preferred stock that our board could issue to increase the number of outstanding shares and to discourage a takeover attempt; |
• | limit the ability of our stockholders to call special meetings of stockholders; |
• | provide that certain litigation against us can only be brought in Delaware; and |
• | provide that the board of directors is expressly authorized to make, alter or repeal our bylaws. |
Period | (a) Total Number of Shares Purchased | (b) Average Price Paid Per Share | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | (d) Maximum Number of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs(2) | ||||||||
October 2018 | 369,658 | $ | 50.41 | 369,658 | 3,617,742 | |||||||
November 2018 | 670,266 | $ | 42.64 | 670,266 | 2,947,476 | |||||||
December 2018 | — | $ | — | — | 2,947,476 | |||||||
Total | 1,039,924 | $ | 45.40 | 1,039,924 | 2,947,476 |
(1) | Reflects repurchases made pursuant to the 6 million share repurchase authorization previously announced in May 2017, which has no expiration. |
(2) | Represents the total number of shares of common stock that remained available for repurchase pursuant to the May 2017 repurchase authorization. The timing and actual number of any shares repurchased will |
Years Ended December 31, | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
Statement of Operations Data: | |||||||||||||||||||
Revenue | $ | 1,729,850 | $ | 1,330,661 | $ | 1,118,110 | $ | 909,705 | $ | 836,458 | |||||||||
Earnings from continuing operations | 472,969 | 355,977 | 178,341 | 133,163 | 165,091 | ||||||||||||||
Loss from discontinued operations | (378 | ) | (5,650 | ) | (6,328 | ) | (12,676 | ) | (16,732 | ) | |||||||||
Net earnings attributable to Match Group, Inc. shareholders | 477,939 | 350,148 | 171,451 | 120,383 | 147,764 | ||||||||||||||
Earnings per share from continuing operations attributable to Match Group, Inc. shareholders: | |||||||||||||||||||
Basic | $ | 1.73 | $ | 1.35 | $ | 0.71 | $ | 0.76 | $ | 1.02 | |||||||||
Diluted | $ | 1.61 | $ | 1.20 | $ | 0.66 | $ | 0.72 | $ | 0.98 | |||||||||
Earnings per share attributable to Match Group, Inc. shareholders: | |||||||||||||||||||
Basic | $ | 1.73 | $ | 1.33 | $ | 0.68 | $ | 0.69 | $ | 0.92 | |||||||||
Diluted | $ | 1.61 | $ | 1.18 | $ | 0.64 | $ | 0.65 | $ | 0.88 | |||||||||
Dividend declared per share | $ | 2.00 | $ | — | $ | — | $ | — | $ | — | |||||||||
December 31, | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
(In thousands) | |||||||||||||||||||
Balance Sheet Data: | |||||||||||||||||||
Total assets | $ | 2,053,061 | $ | 2,130,146 | $ | 2,048,678 | $ | 1,909,392 | $ | 1,302,109 | |||||||||
Long-term debt, net including current maturities | 1,515,911 | 1,252,696 | 1,176,493 | 1,216,871 | — | ||||||||||||||
Long-term debt, related party | — | — | — | — | 190,586 |
• | North America - consists of the financial results and metrics associated with users located in the United States and Canada. |
• | International - consists of the financial results and metrics associated with users located outside of the United States and Canada. |
• | Direct Revenue - is revenue that is received directly from end users of our products and includes both subscription and à la carte revenue. |
• | Indirect Revenue - is revenue that is not received directly from an end user of our products, substantially all of which is advertising revenue. |
• | Subscribers - are users who purchase a subscription to one of our products. Users who purchase only à la carte features are not included in Subscribers. |
• | Average Subscribers - is the number of Subscribers at the end of each day in the relevant measurement period divided by the number of calendar days in that period. |
• | Average Revenue per Subscriber (“ARPU”) - is Direct Revenue from Subscribers in the relevant measurement period (whether in the form of subscription or à la carte revenue) divided by the Average Subscribers in such period and further divided by the number of calendar days in such period. Direct Revenue from users who are not Subscribers and have purchased only à la carte features is not included in ARPU. |
• | Cost of revenue - consists primarily of the amortization of in-app purchase fees, compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in data center and customer care functions, credit card processing fees, hosting fees, and data center rent, energy and bandwidth costs. In-app purchase fees are monies paid to Apple and Google in connection with the processing of in-app purchases of subscriptions and product features through the in-app payment systems provided by Apple and Google. |
• | Selling and marketing expense - consists primarily of advertising expenditures and compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in selling and marketing, and sales support functions. Advertising expenditures includes online marketing, including fees paid to search engines and social media sites, offline marketing (which is primarily television advertising), and payments to partners that direct traffic to our brands. |
• | General and administrative expense - consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in executive management, finance, legal, tax and human resources, acquisition-related contingent consideration fair value adjustments (described below), fees for professional services (including transaction-related costs for acquisitions) and facilities costs. |
• | Product development expense - consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology. |
• | Acquisition-related contingent consideration fair value adjustments - relate to the portion of the purchase price of certain acquisitions that is contingent upon the future earnings performance and/or operating metrics of the acquired company. The fair value of the liability is estimated at the date of acquisition and adjusted each reporting period until the liability is settled. Significant changes in forecasted earnings and/or operating metrics will result in a significantly higher or lower fair value measurement. The changes in the estimated fair value of the contingent consideration arrangements during each reporting period, including the accretion of the discount if the arrangement is longer than |
• | Credit Facility - On December 7, 2018, the Company’s $500 million revolving credit facility was amended to, among other things, modify the leverage ratio levels in the pricing grid used to calculate the applicable rate and extend its maturity to December 7, 2023. The Credit Facility currently bears interest at LIBOR plus 1.50%, based on a pricing grid included in the credit agreement. At December 31, 2018, $260 million is outstanding. |
• | Term Loan - The Company’s seven-year term loan due November 16, 2022. The Term Loan bears interest at LIBOR plus 2.50% and has a LIBOR floor of 0.00%. At December 31, 2018, $425 million is outstanding. |
• | 6.75% Senior Notes - The Company’s previously outstanding 6.75% Senior Notes issued on November 16, 2015 which were redeemed in full on December 17, 2017 using the proceeds from the 5.00% Senior Notes and cash on hand. |
• | 6.375% Senior Notes - The Company’s 6.375% Senior Notes due June 1, 2024, with interest payable each June 1 and December 1, which were issued on June 1, 2016. The proceeds were used to prepay a portion of the indebtedness outstanding under the Term Loan. At December 31, 2018, $400 million is outstanding. |
• | 5.00% Senior Notes - The Company’s 5.00% Senior Notes due December 15, 2027, with interest payable each June 15 and December 15, which were issued on December 4, 2017. The proceeds, along with cash on hand, were used to redeem the 6.75% Senior Notes and pay the related call premium. At December 31, 2018, $450 million is outstanding. |
• | 5.625% Senior Notes - The Company’s 5.625% Senior Notes due February 15, 2029, with interest payable each February 15 and August 15, commencing on August 15, 2019, which were issued on February 15, 2019. The proceeds were used to repay outstanding borrowings under our Credit Facility, to pay expenses associated with the offering, and for general corporate purposes. |
• | Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) - is a Non-GAAP financial measure. See “Principles of Financial Reporting” for the definition of Adjusted EBITDA and a reconciliation of net earnings attributable to Match Group, Inc. shareholders to operating income and Adjusted EBITDA for the years ended December 31, 2018, 2017, and 2016. |
Years Ended December 31, | |||||||||||||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||||||||||||
(Amounts in thousands, except ARPU) | |||||||||||||||||||||||
Direct Revenue: | |||||||||||||||||||||||
North America | $ | 902,478 | $ | 161,144 | 22% | $ | 741,334 | $ | 67,390 | 10% | $ | 673,944 | |||||||||||
International | 774,693 | 234,778 | 43% | 539,915 | 146,495 | 37% | 393,420 | ||||||||||||||||
Total Direct Revenue | 1,677,171 | 395,922 | 31% | 1,281,249 | 213,885 | 20% | 1,067,364 | ||||||||||||||||
Indirect Revenue | 52,679 | 3,267 | 7% | 49,412 | (1,334 | ) | (3)% | 50,746 | |||||||||||||||
Total Revenue | $ | 1,729,850 | $ | 399,189 | 30% | $ | 1,330,661 | $ | 212,551 | 19% | $ | 1,118,110 | |||||||||||
Direct Revenue | |||||||||||||||||||||||
Tinder | $ | 805,316 | $ | 402,100 | 100% | $ | 403,216 | $ | 234,694 | 139% | $ | 168,522 | |||||||||||
Other brands | 871,855 | (6,178 | ) | (1)% | 878,033 | (20,809 | ) | (2)% | 898,842 | ||||||||||||||
Total Direct Revenue | $ | 1,677,171 | $ | 395,922 | 31% | $ | 1,281,249 | $ | 213,885 | 20% | $ | 1,067,364 | |||||||||||
Percentage of Total Revenue: | |||||||||||||||||||||||
Direct Revenue: | |||||||||||||||||||||||
North America | 52% | 56% | 60% | ||||||||||||||||||||
International | 45% | 40% | 35% | ||||||||||||||||||||
Total Direct Revenue | 97% | 96% | 95% | ||||||||||||||||||||
Indirect Revenue | 3% | 4% | 5% | ||||||||||||||||||||
Total Revenue | 100% | 100% | 100% | ||||||||||||||||||||
Average Subscribers: | |||||||||||||||||||||||
North America | 4,161 | 592 | 17% | 3,569 | 301 | 9% | 3,268 | ||||||||||||||||
International | 3,712 | 873 | 31% | 2,839 | 699 | 33% | 2,140 | ||||||||||||||||
Total | 7,873 | 1,465 | 23% | 6,408 | 1,000 | 18% | 5,408 | ||||||||||||||||
(Change calculated using non-rounded numbers) | |||||||||||||||||||||||
ARPU: | |||||||||||||||||||||||
North America | $ | 0.59 | 4% | $ | 0.56 | —% | $ | 0.56 | |||||||||||||||
International | $ | 0.56 | 10% | $ | 0.51 | 3% | $ | 0.50 | |||||||||||||||
Total | $ | 0.57 | $ | 0.03 | 6% | $ | 0.54 | $ | — | 1% | $ | 0.54 |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
Cost of revenue | $410,000 | $130,501 | 47% | $279,499 | $83,851 | 43% | $195,648 | ||||||
Percentage of revenue | 24% | 21% | 17% |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
Selling and marketing expense | $419,954 | $44,344 | 12% | $375,610 | $26,491 | 8% | $349,119 | ||||||
Percentage of revenue | 24% | 28% | 31% |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
General and administrative expense | $180,286 | $482 | —% | $179,804 | $44,785 | 33% | $135,019 | ||||||
Percentage of revenue | 10% | 14% | 12% |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
Product development expense | $132,030 | $30,880 | 31% | $101,150 | $23,033 | 29% | $78,117 | ||||||
Percentage of revenue | 8% | 8% | 7% |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
Depreciation | $32,968 | $355 | 1% | $32,613 | $4,887 | 18% | $27,726 | ||||||
Percentage of revenue | 2% | 2% | 2% |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
Operating income | $553,294 | $192,777 | 53% | $360,517 | $44,968 | 14% | $315,549 | ||||||
Percentage of revenue | 32% | 27% | 28% | ||||||||||
Adjusted EBITDA | $653,931 | $184,990 | 39% | $468,941 | $65,561 | 16% | $403,380 | ||||||
Percentage of revenue | 38% | 35% | 36% |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
Interest expense | $73,417 | $(4,148) | (5)% | $77,565 | $(4,634) | (6)% | $82,199 |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
Other income (expense), net | $7,765 | $38,592 | NM | $(30,827) | $(38,693) | NM | $7,866 |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
Income tax (provision) benefit | $(14,673) | $(118,525) | NM | $103,852 | $166,727 | NM | $(62,875) | ||||||
Effective income tax rate | 3% | NM | 26% |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Net earnings attributable to Match Group, Inc. shareholders | $ | 477,939 | $ | 350,148 | $ | 171,451 | |||||
Add back: | |||||||||||
Net (loss) earnings attributable to noncontrolling interests | (5,348 | ) | 179 | 562 | |||||||
Loss from discontinued operations, net of tax | 378 | 5,650 | 6,328 | ||||||||
Income tax provision (benefit) | 14,673 | (103,852 | ) | 62,875 | |||||||
Other (income) expense, net | (7,765 | ) | 30,827 | (7,866 | ) | ||||||
Interest expense | 73,417 | 77,565 | 82,199 | ||||||||
Operating Income | 553,294 | 360,517 | 315,549 | ||||||||
Stock-based compensation expense | 66,031 | 69,090 | 52,370 | ||||||||
Depreciation | 32,968 | 32,613 | 27,726 | ||||||||
Amortization of intangibles | 1,318 | 1,468 | 16,932 | ||||||||
Acquisition-related contingent consideration fair value adjustments | 320 | 5,253 | (9,197 | ) | |||||||
Adjusted EBITDA | $ | 653,931 | $ | 468,941 | $ | 403,380 |
December 31, 2018 | December 31, 2017 | ||||||
(In thousands) | |||||||
Cash and cash equivalents: | |||||||
United States | $ | 83,851 | $ | 203,452 | |||
All other countries (a) | 103,096 | 69,172 | |||||
Total cash and cash equivalents | $ | 186,947 | $ | 272,624 | |||
Long-term debt, net: | |||||||
Credit Facility due December 7, 2023 | $ | 260,000 | $ | — | |||
Term Loan due November 16, 2022 | 425,000 | 425,000 | |||||
6.375% Senior Notes | 400,000 | 400,000 | |||||
5.00% Senior Notes | 450,000 | 450,000 | |||||
Total long-term debt | 1,535,000 | 1,275,000 | |||||
Less: unamortized original issue discount and original issue premium, net | 7,352 | 8,668 | |||||
Less: unamortized debt issuance costs | 11,737 | 13,636 | |||||
Total long-term debt, net | $ | 1,515,911 | $ | 1,252,696 |
(a) | At December 31, 2018, all of the Company’s international cash can be repatriated without significant tax consequences. During the year ended December 31, 2018, foreign cash of $25.2 million was repatriated to the U.S. |
Years ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Net cash provided by operating activities attributable to continuing operations | $ | 603,455 | $ | 321,108 | $ | 259,549 | |||||
Net cash (used in) provided by investing activities attributable to continuing operations | (37,761 | ) | 118,188 | (27,199 | ) | ||||||
Net cash used in financing activities attributable to continuing operations | (649,555 | ) | (423,714 | ) | (61,194 | ) |
Payments Due by Period | |||||||||||||||||||
Contractual Obligations(a) | Less Than 1 Year | 1–3 Years | 3–5 Years | More Than 5 Years | Total | ||||||||||||||
(In thousands) | |||||||||||||||||||
Long-term debt(b)(c) | $ | 78,271 | $ | 164,546 | $ | 827,699 | $ | 952,750 | $ | 2,023,266 | |||||||||
Operating leases(d) | 11,559 | 25,570 | 12,833 | 17,471 | 67,433 | ||||||||||||||
Purchase obligation(e) | 27,153 | 23,897 | — | — | 51,050 | ||||||||||||||
Total contractual obligations | $ | 116,983 | $ | 214,013 | $ | 840,532 | $ | 970,221 | $ | 2,141,749 |
(a) | The Company has excluded $35.6 million in unrecognized tax benefits and related interest from the table above as we are unable to make a reasonably reliable estimate of the period in which these liabilities might be paid. For additional information on income taxes, see “Note 3—Income Taxes” to the consolidated financial statements included in “Item 8—Consolidated Financial Statements and Supplementary Data.” |
(b) | Represents contractual amounts due including interest on both fixed and variable rate instruments. Long-term debt at December 31, 2018 consists of the 6.375% and 5.00% Senior Notes of $400 million and $450 million, respectively, which bear interest at fixed rates, and the Credit Facility and Term Loan balances of $260 million and $425 million, respectively, which both bear interest at a variable rate. The Credit Facility and the Term Loan bear interest at LIBOR plus 1.50%, or 3.97%, and LIBOR plus 2.50%, or 5.09%, respectively, at December 31, 2018. The amount of interest ultimately paid on the Credit Facility and Term Loan may differ based on changes in interest rates and outstanding balances. For additional information on long-term debt, see “Note 7—Long-term Debt, net” to the consolidated financial statements included in “Item 8—Consolidated Financial Statements and Supplementary Data.” |
(c) | Subsequent to December 31, 2018, the Credit Facility was repaid in full with the issuance of the 5.625% Senior Notes. The interest and principal related to the 5.625% Senior Notes are not reflected in the table above. |
(d) | The Company leases office space, data center facilities and equipment used in connection with its operations under various operating leases, many of which contain escalation clauses. The Company is also committed to pay a portion of the related operating expenses under certain lease agreements. These operating expenses are not included in the table above. For additional information on operating leases, see “Note 13—Commitments and Contingencies” to the consolidated financial statements included in “Item 8—Consolidated Financial Statements and Supplementary Data.” |
(e) | The purchase obligations consist primarily of a web hosting commitment. |
/s/ ERNST & YOUNG LLP |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands, except share data) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 186,947 | $ | 272,624 | |||
Accounts receivable, net of allowance of $724 and $778, respectively | 99,052 | 116,751 | |||||
Other current assets | 57,766 | 55,369 | |||||
Total current assets | 343,765 | 444,744 | |||||
Property and equipment, net | 58,351 | 61,620 | |||||
Goodwill | 1,244,758 | 1,247,644 | |||||
Intangible assets, net | 237,640 | 230,345 | |||||
Deferred income taxes | 134,347 | 123,199 | |||||
Long-term investments | 9,076 | 11,137 | |||||
Other non-current assets | 25,124 | 11,457 | |||||
TOTAL ASSETS | $ | 2,053,061 | $ | 2,130,146 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
LIABILITIES | |||||||
Accounts payable | $ | 9,528 | $ | 10,112 | |||
Deferred revenue | 209,935 | 198,095 | |||||
Accrued expenses and other current liabilities | 135,971 | 110,566 | |||||
Total current liabilities | 355,434 | 318,773 | |||||
Long-term debt, net | 1,515,911 | 1,252,696 | |||||
Income taxes payable | 13,918 | 8,410 | |||||
Deferred income taxes | 20,174 | 28,478 | |||||
Other long-term liabilities | 21,760 | 14,484 | |||||
Redeemable noncontrolling interests | — | 6,056 | |||||
Commitments and contingencies | |||||||
SHAREHOLDERS’ EQUITY | |||||||
Common stock; $0.001 par value; authorized 1,500,000,000 shares; 71,513,087 and 64,370,470 shares issued; and 68,460,563 and 64,370,470 shares outstanding at December 31, 2018 and December 31, 2017, respectively | 72 | 64 | |||||
Class B convertible common stock; $0.001 par value; authorized 1,500,000,000 shares; 209,919,402 shares issued and outstanding | 210 | 210 | |||||
Class C common stock; $0.001 par value; authorized 1,500,000,000 shares; no shares issued and outstanding | — | — | |||||
Preferred stock; $0.001 par value; authorized 500,000,000 shares; no shares issued and outstanding | — | — | |||||
Additional paid-in capital | (57,575 | ) | 81,082 | ||||
Retained earnings | 453,778 | 532,211 | |||||
Accumulated other comprehensive loss | (137,166 | ) | (112,318 | ) | |||
Treasury stock; 3,052,524 and 0 shares, respectively | (133,455 | ) | — | ||||
Total Match Group, Inc. shareholders’ equity | 125,864 | 501,249 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 2,053,061 | $ | 2,130,146 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands, except per share data) | |||||||||||
Revenue | $ | 1,729,850 | $ | 1,330,661 | $ | 1,118,110 | |||||
Operating costs and expenses: | |||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | 410,000 | 279,499 | 195,648 | ||||||||
Selling and marketing expense | 419,954 | 375,610 | 349,119 | ||||||||
General and administrative expense | 180,286 | 179,804 | 135,019 | ||||||||
Product development expense | 132,030 | 101,150 | 78,117 | ||||||||
Depreciation | 32,968 | 32,613 | 27,726 | ||||||||
Amortization of intangibles | 1,318 | 1,468 | 16,932 | ||||||||
Total operating costs and expenses | 1,176,556 | 970,144 | 802,561 | ||||||||
Operating income | 553,294 | 360,517 | 315,549 | ||||||||
Interest expense | (73,417 | ) | (77,565 | ) | (82,199 | ) | |||||
Other income (expense), net | 7,765 | (30,827 | ) | 7,866 | |||||||
Earnings from continuing operations, before tax | 487,642 | 252,125 | 241,216 | ||||||||
Income tax (provision) benefit | (14,673 | ) | 103,852 | (62,875 | ) | ||||||
Net earnings from continuing operations | 472,969 | 355,977 | 178,341 | ||||||||
Loss from discontinued operations, net of tax | (378 | ) | (5,650 | ) | (6,328 | ) | |||||
Net earnings | 472,591 | 350,327 | 172,013 | ||||||||
Net loss (earnings) attributable to noncontrolling interests | 5,348 | (179 | ) | (562 | ) | ||||||
Net earnings attributable to Match Group, Inc. shareholders | $ | 477,939 | $ | 350,148 | $ | 171,451 | |||||
Net earnings per share from continuing operations: | |||||||||||
Basic | $ | 1.73 | $ | 1.35 | $ | 0.71 | |||||
Diluted | $ | 1.61 | $ | 1.20 | $ | 0.66 | |||||
Net earnings per share attributable to Match Group, Inc. shareholders: | |||||||||||
Basic | $ | 1.73 | $ | 1.33 | $ | 0.68 | |||||
Diluted | $ | 1.61 | $ | 1.18 | $ | 0.64 | |||||
Dividend declared per share | $ | 2.00 | $ | — | $ | — | |||||
Stock-based compensation expense by function: | |||||||||||
Cost of revenue | $ | 2,287 | $ | 1,701 | $ | 1,447 | |||||
Selling and marketing expense | 3,599 | 4,545 | 3,426 | ||||||||
General and administrative expense | 32,346 | 42,840 | 33,784 | ||||||||
Product development expense | 27,799 | 20,004 | 13,713 | ||||||||
Total stock-based compensation expense | $ | 66,031 | $ | 69,090 | $ | 52,370 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Net earnings | $ | 472,591 | $ | 350,327 | $ | 172,013 | |||||
Other comprehensive (loss) income, net of tax | |||||||||||
Change in foreign currency translation adjustment | (24,967 | ) | 64,588 | (36,239 | ) | ||||||
Change in fair value of available-for-sale securities | — | — | (2,964 | ) | |||||||
Total other comprehensive (loss) income | (24,967 | ) | 64,588 | (39,203 | ) | ||||||
Comprehensive income | 447,624 | 414,915 | 132,810 | ||||||||
Comprehensive loss (income) attributable to noncontrolling interests | 5,467 | (701 | ) | (923 | ) | ||||||
Comprehensive income attributable to Match Group, Inc. shareholders | $ | 453,091 | $ | 414,214 | $ | 131,887 |
Match Group, Inc. Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||
Common Stock $0.001 Par Value | Class B Convertible Common Stock $0.001 Par Value | |||||||||||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interests | $ | Shares | $ | Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total Match Group, Inc. Shareholders’ Equity | Noncontrolling Interests | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||||
Balance as of December 31, 2015 | $ | 5,907 | $ | 38 | 38,343 | $ | 210 | 209,919 | $ | 404,771 | $ | 10,612 | $ | (136,820 | ) | $ | — | $ | 278,811 | $ | — | $ | 278,811 | |||||||||||||||||||||||
Net earnings for the year ended December 31, 2016 | 562 | — | — | — | — | — | 171,451 | — | — | 171,451 | — | 171,451 | ||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | 361 | — | — | — | — | — | — | (39,564 | ) | — | (39,564 | ) | — | (39,564 | ) | |||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | 44,524 | — | — | — | 44,524 | — | 44,524 | ||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to stock-based awards, net of withholding taxes | — | 7 | 6,495 | — | — | 10,224 | — | — | — | 10,231 | — | 10,231 | ||||||||||||||||||||||||||||||||||
Issuance of common stock to IAC pursuant to the employee matters agreement | — | 1 | 959 | — | — | — | — | — | — | 1 | — | 1 | ||||||||||||||||||||||||||||||||||
Income tax benefit related to stock-based awards and other | — | — | — | — | — | 27,407 | — | — | — | 27,407 | — | 27,407 | ||||||||||||||||||||||||||||||||||
Purchase of redeemable noncontrolling interests | (1,129 | ) | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Adjustment of redeemable noncontrolling interests to fair value | 361 | — | — | — | — | (361 | ) | — | — | — | (361 | ) | — | (361 | ) | |||||||||||||||||||||||||||||||
Other | — | — | — | — | — | 4,022 | — | — | — | 4,022 | — | 4,022 | ||||||||||||||||||||||||||||||||||
Balance as of December 31, 2016 | 6,062 | 46 | 45,797 | 210 | 209,919 | 490,587 | 182,063 | (176,384 | ) | — | 496,522 | — | 496,522 | |||||||||||||||||||||||||||||||||
Net earnings for the year ended December 31, 2017 | 179 | — | — | — | — | — | 350,148 | — | — | 350,148 | — | 350,148 | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | 522 | — | — | — | — | — | — | 64,066 | — | 64,066 | — | 64,066 | ||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | 54,604 | — | — | — | 54,604 | — | 54,604 | ||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to stock-based awards, net of withholding taxes | — | 6 | 6,688 | — | — | (248,787 | ) | — | — | — | (248,781 | ) | — | (248,781 | ) | |||||||||||||||||||||||||||||||
Issuance of common stock to IAC pursuant to the employee matters agreement | — | 12 | 11,885 | — | — | (215,429 | ) | — | — | — | (215,417 | ) | — | (215,417 | ) | |||||||||||||||||||||||||||||||
Purchase of redeemable noncontrolling interests | (436 | ) | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Adjustment of redeemable noncontrolling interests to fair value | (107 | ) | — | — | — | — | 107 | — | — | — | 107 | — | 107 | |||||||||||||||||||||||||||||||||
Other | (164 | ) | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Balance as of December 31, 2017 | 6,056 | 64 | 64,370 | 210 | 209,919 | 81,082 | 532,211 | (112,318 | ) | — | 501,249 | — | 501,249 | |||||||||||||||||||||||||||||||||
Net earnings (loss) for the year ended December 31, 2018 | 108 | — | — | — | — | — | 477,939 | — | — | 477,939 | (5,456 | ) | 472,483 | |||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | (119 | ) | — | — | — | — | — | — | (24,848 | ) | — | (24,848 | ) | — | (24,848 | ) | ||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | 66,031 | — | — | — | 66,031 | — | 66,031 | ||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to stock-based awards, net of withholding taxes | — | 5 | 4,173 | — | — | (207,950 | ) | — | — | — | (207,945 | ) | — | (207,945 | ) | |||||||||||||||||||||||||||||||
Issuance of common stock to IAC pursuant to the employee matters agreement | — | 3 | 2,970 | — | — | (3 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Dividends ($2.00 per share of Common Stock and Class B Convertible Common Stock) | — | — | — | — | — | — | (556,372 | ) | — | — | (556,372 | ) | — | (556,372 | ) | |||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | — | — | — | (133,455 | ) | (133,455 | ) | — | (133,455 | ) | |||||||||||||||||||||||||||||||
Purchase of redeemable noncontrolling interests | (3,503 | ) | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Adjustment of redeemable noncontrolling interests to fair value | (2,542 | ) | — | — | — | — | 2,542 | — | — | — | 2,542 | — | 2,542 | |||||||||||||||||||||||||||||||||
Noncontrolling interests created in an acquisition | — | — | — | — | — | — | — | — | — | — | 14,307 | 14,307 | ||||||||||||||||||||||||||||||||||
Adjustment to noncontrolling interests related to business acquisition | — | — | — | — | — | 723 | — | — | — | 723 | (723 | ) | — | |||||||||||||||||||||||||||||||||
Purchase of noncontrolling interest | — | — | — | — | — | — | — | — | — | — | (8,128 | ) | (8,128 | ) | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 | $ | — | $ | 72 | 71,513 | $ | 210 | 209,919 | $ | (57,575 | ) | $ | 453,778 | $ | (137,166 | ) | $ | (133,455 | ) | $ | 125,864 | $ | — | $ | 125,864 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Cash flows from operating activities attributable to continuing operations: | |||||||||||
Net earnings from continuing operations | $ | 472,969 | $ | 355,977 | $ | 178,341 | |||||
Adjustments to reconcile net earnings from continuing operations to net cash provided by operating activities attributable to continuing operations: | |||||||||||
Stock-based compensation expense | 66,031 | 69,090 | 52,370 | ||||||||
Depreciation | 32,968 | 32,613 | 27,726 | ||||||||
Amortization of intangibles | 1,318 | 1,468 | 16,932 | ||||||||
Deferred income taxes | (19,639 | ) | (118,251 | ) | (10,298 | ) | |||||
Acquisition-related contingent consideration fair value adjustments | 320 | 5,253 | (9,197 | ) | |||||||
Other adjustments, net | 230 | 22,142 | (4,797 | ) | |||||||
Changes in assets and liabilities, net of effects of acquisitions and dispositions: | |||||||||||
Accounts receivable | 17,272 | (51,587 | ) | (10,731 | ) | ||||||
Other assets | (14,606 | ) | (10,547 | ) | (5,327 | ) | |||||
Accounts payable and other liabilities | 20,769 | (16,801 | ) | (24,346 | ) | ||||||
Income taxes payable and receivable | 12,765 | (1,002 | ) | 29,641 | |||||||
Deferred revenue | 13,058 | 32,753 | 19,235 | ||||||||
Net cash provided by operating activities attributable to continuing operations | 603,455 | 321,108 | 259,549 | ||||||||
Cash flows from investing activities attributable to continuing operations: | |||||||||||
Net cash acquired (used) in business combinations | 1,136 | (280 | ) | (686 | ) | ||||||
Capital expenditures | (30,954 | ) | (28,833 | ) | (46,098 | ) | |||||
Proceeds from the sale of a business, net | — | 96,144 | — | ||||||||
Proceeds from the sale of a long-term investment | — | 60,163 | — | ||||||||
Proceeds from sale of a marketable security | — | — | 11,716 | ||||||||
Purchases of investments | (3,800 | ) | (9,076 | ) | (500 | ) | |||||
Other, net | (4,143 | ) | 70 | 8,369 | |||||||
Net cash (used in) provided by investing activities attributable to continuing operations | (37,761 | ) | 118,188 | (27,199 | ) | ||||||
Cash flows from financing activities attributable to continuing operations: | |||||||||||
Borrowings under the Credit Facility | 260,000 | — | — | ||||||||
Term Loan borrowings | — | 75,000 | — | ||||||||
Proceeds from bond offering | — | 450,000 | 400,000 | ||||||||
Principal payment on Senior Notes | — | (445,172 | ) | — | |||||||
Principal payments on Term Loan | — | — | (450,000 | ) | |||||||
Debt issuance costs | (1,281 | ) | (12,285 | ) | (7,811 | ) | |||||
Purchase of treasury stock | (133,455 | ) | — | — | |||||||
Dividends | (556,372 | ) | — | — | |||||||
Proceeds from issuance of common stock pursuant to stock-based awards | 12 | 59,442 | 39,378 | ||||||||
Withholding taxes paid on behalf of employees on net settled stock-based awards | (207,720 | ) | (254,210 | ) | (29,830 | ) | |||||
Purchase of noncontrolling interests | (9,980 | ) | (436 | ) | (1,129 | ) | |||||
Purchase of stock-based awards | — | (272,459 | ) | — | |||||||
Acquisition-related contingent consideration payments | (185 | ) | (23,429 | ) | — | ||||||
Other, net | (574 | ) | (165 | ) | (11,802 | ) | |||||
Net cash used in financing activities attributable to continuing operations | (649,555 | ) | (423,714 | ) | (61,194 | ) | |||||
Total cash (used in) provided by continuing operations | (83,861 | ) | 15,582 | 171,156 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Net cash (used in) provided by operating activities attributable to discontinued operations | — | (6,061 | ) | 4,231 | |||||||
Net cash used in investing activities attributable to discontinued operations | — | (471 | ) | (4,152 | ) | ||||||
Total cash (used in) provided by discontinued operations | — | (6,532 | ) | 79 | |||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (1,760 | ) | 9,940 | (5,763 | ) | ||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash | (85,621 | ) | 18,990 | 165,472 | |||||||
Cash, cash equivalents, and restricted cash at beginning of period | 272,761 | 253,771 | 88,299 | ||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 187,140 | $ | 272,761 | $ | 253,771 |
For the Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Direct Revenue: | |||||||||||
North America | $ | 902,478 | $ | 741,334 | $ | 673,944 | |||||
International | 774,693 | 539,915 | 393,420 | ||||||||
Total Direct Revenue | 1,677,171 | 1,281,249 | 1,067,364 | ||||||||
Indirect Revenue (principally advertising revenue) | 52,679 | 49,412 | 50,746 | ||||||||
Total Revenue | $ | 1,729,850 | $ | 1,330,661 | $ | 1,118,110 | |||||
Direct Revenue | |||||||||||
Tinder | $ | 805,316 | $ | 403,216 | $ | 168,522 | |||||
Other brands | 871,855 | 878,033 | 898,842 | ||||||||
Total Direct Revenue | $ | 1,677,171 | $ | 1,281,249 | $ | 1,067,364 |
Asset Category | Estimated Useful Lives |
Computer equipment and capitalized software | 2 to 3 years |
Furniture and other equipment | 5 years |
Leasehold improvements | 6 to 10 years |
• | Level 1: Observable inputs obtained from independent sources, such as quoted market prices for identical assets and liabilities in active markets. |
• | Level 2: Other inputs, which are observable directly or indirectly, such as quoted market prices for similar assets or liabilities in active markets, quoted market prices for identical or similar assets or liabilities in markets that are not active, and inputs that are derived principally from or corroborated by observable market data. The fair values of the Company's Level 2 financial assets are primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case an average market price is used. |
• | Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the |
• | the Company has selected a software solution to implement ASU No. 2016-02; |
• | the Company has input lease summaries into the software solution; |
• | the Company is assessing the other inputs required in connection with the adoption of ASU No. 2016-02; and |
• | the Company is developing its accounting policy, procedures and internal controls related to the new standard. |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
U.S. | $ | 392,798 | $ | 143,286 | $ | 109,457 | |||||
Foreign | 94,844 | 108,839 | 131,759 | ||||||||
Total | $ | 487,642 | $ | 252,125 | $ | 241,216 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Current income tax provision (benefit): | |||||||||||
Federal | $ | (688 | ) | $ | (11,533 | ) | $ | 44,782 | |||
State | 341 | (512 | ) | 4,427 | |||||||
Foreign | 34,659 | 26,444 | 23,964 | ||||||||
Current income tax provision | 34,312 | 14,399 | 73,173 | ||||||||
Deferred income tax benefit: | |||||||||||
Federal | (11,158 | ) | (102,337 | ) | (2,119 | ) | |||||
State | (1,846 | ) | (15,731 | ) | (280 | ) | |||||
Foreign | (6,635 | ) | (183 | ) | (7,899 | ) | |||||
Deferred income tax benefit | (19,639 | ) | (118,251 | ) | (10,298 | ) | |||||
Income tax provision (benefit) | $ | 14,673 | $ | (103,852 | ) | $ | 62,875 |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Deferred tax assets: | |||||||
Net operating loss carryforwards | $ | 127,630 | $ | 143,474 | |||
Tax credit carryforwards | 43,501 | 6,629 | |||||
Stock-based compensation | 12,684 | 13,236 | |||||
Other | 26,770 | 12,423 | |||||
Total deferred tax assets | 210,585 | 175,762 | |||||
Less valuation allowance | (47,448 | ) | (24,795 | ) | |||
Net deferred tax assets | 163,137 | 150,967 | |||||
Deferred tax liabilities: | |||||||
Intangible assets | (45,363 | ) | (52,838 | ) | |||
Fixed assets | (2,686 | ) | (3,164 | ) | |||
Other | (915 | ) | (244 | ) | |||
Total deferred tax liabilities | (48,964 | ) | (56,246 | ) | |||
Net deferred tax assets | $ | 114,173 | $ | 94,721 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Income tax provision at the federal statutory rate of 21% (35% for 2017 and 2016) | $ | 102,405 | $ | 88,244 | $ | 84,425 | |||||
State income taxes, net of effect of federal tax benefit | 7,742 | 2,471 | 2,804 | ||||||||
Foreign income taxed at a different statutory rate | 13,129 | (15,014 | ) | (13,761 | ) | ||||||
Foreign rate change | 278 | (1,523 | ) | (4,454 | ) | ||||||
Transition tax | (3,178 | ) | 23,748 | — | |||||||
Deferred tax adjustment for enacted changes in tax laws and rates | (142 | ) | 68,594 | — | |||||||
Equity compensation | (92,140 | ) | (278,343 | ) | 3,247 | ||||||
Non-taxable foreign currency exchange gains and losses | (2,086 | ) | 6,231 | (6,837 | ) | ||||||
Other, net | (11,335 | ) | 1,740 | (2,549 | ) | ||||||
Income tax provision (benefit) | $ | 14,673 | $ | (103,852 | ) | $ | 62,875 |
December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Balance at January 1 | $ | 25,063 | $ | 25,913 | $ | 24,908 | |||||
Additions based on tax positions related to the current year | 8,589 | 697 | 1,706 | ||||||||
Additions for tax positions of prior years | 3,901 | 1,104 | 1,414 | ||||||||
Reductions for tax positions of prior years | (134 | ) | (1,233 | ) | (783 | ) | |||||
Settlements | — | — | (258 | ) | |||||||
Expiration of applicable statute of limitations | (1,740 | ) | (1,418 | ) | (1,074 | ) | |||||
Balance at December 31 | $ | 35,679 | $ | 25,063 | $ | 25,913 |
For the years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Revenue | $ | — | $ | 23,980 | $ | 104,416 | |||||
Operating costs and expenses | — | (29,601 | ) | (114,057 | ) | ||||||
Operating loss | — | (5,621 | ) | (9,641 | ) | ||||||
Other (expense) income | (378 | ) | (2,136 | ) | 11 | ||||||
Income tax benefit | — | 2,107 | 3,302 | ||||||||
Loss from discontinued operations | $ | (378 | ) | $ | (5,650 | ) | $ | (6,328 | ) |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Goodwill | $ | 1,244,758 | $ | 1,247,644 | |||
Intangible assets with indefinite lives | 230,684 | 228,296 | |||||
Intangible assets with definite lives, net | 6,956 | 2,049 | |||||
Total goodwill and intangible assets, net | $ | 1,482,398 | $ | 1,477,989 |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Balance at January 1 | $ | 1,247,644 | $ | 1,206,447 | |||
Additions | 11,187 | 120 | |||||
Deductions | — | (29 | ) | ||||
Foreign Exchange Translation | (14,073 | ) | 41,106 | ||||
Balance at December 31 | $ | 1,244,758 | $ | 1,247,644 |
December 31, 2018 | |||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Weighted-Average Useful Life (Years) | ||||||||||
(In thousands) | |||||||||||||
Patent and technology | $ | 10,715 | $ | (4,859 | ) | $ | 5,856 | 8.5 | |||||
Trade names | 4,814 | (4,814 | ) | — | — | ||||||||
Customer lists | 270 | (270 | ) | — | — | ||||||||
Other | 3,000 | (1,900 | ) | 1,100 | 5.0 | ||||||||
Total | $ | 18,799 | $ | (11,843 | ) | $ | 6,956 | 7.9 |
December 31, 2017 | |||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Weighted-Average Useful Life (Years) | ||||||||||
(In thousands) | |||||||||||||
Trade names | $ | 5,830 | $ | (5,765 | ) | $ | 65 | 3.0 | |||||
Technology | 4,592 | (4,588 | ) | 4 | 2.0 | ||||||||
Other | 3,280 | (1,300 | ) | 1,980 | 4.4 | ||||||||
Total | $ | 13,702 | $ | (11,653 | ) | $ | 2,049 | 4.4 |
(In thousands) | |||
2019 | $ | 1,645 | |
2020 | 1,245 | ||
2021 | 645 | ||
2022 | 645 | ||
2023 and thereafter | 2,776 | ||
Total | $ | 6,956 |
December 31, 2018 | |||||||||||||||
Quoted Market Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value Measurements | ||||||||||||
(In thousands) | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents: | |||||||||||||||
Money market funds | $ | 72,546 | $ | — | $ | — | $ | 72,546 | |||||||
Liabilities: | |||||||||||||||
Contingent consideration arrangements | $ | — | $ | — | $ | (1,974 | ) | $ | (1,974 | ) |
December 31, 2017 | |||||||||||||||
Quoted Market Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value Measurements | ||||||||||||
(In thousands) | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents: | |||||||||||||||
Money market funds | $ | 71,197 | $ | — | $ | — | $ | 71,197 | |||||||
Time deposits | — | 35,023 | — | 35,023 | |||||||||||
Total | $ | 71,197 | $ | 35,023 | $ | — | $ | 106,220 | |||||||
Liabilities: | |||||||||||||||
Contingent consideration arrangements | $ | — | $ | — | $ | (2,647 | ) | $ | (2,647 | ) |
December 31, | |||||||
2018 | 2017 | ||||||
Contingent Consideration Arrangements | |||||||
(In thousands) | |||||||
Balance at January 1 | $ | (2,647 | ) | $ | (19,418 | ) | |
Total net (losses): | |||||||
Fair value adjustments | (320 | ) | (5,253 | ) | |||
Included in other comprehensive income (loss) | 45 | (1,405 | ) | ||||
Settlements | 948 | 23,429 | |||||
Balance at December 31 | $ | (1,974 | ) | $ | (2,647 | ) |
December 31, 2018 | December 31, 2017 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Long-term debt, net (a) | $ | (1,515,911 | ) | $ | (1,513,683 | ) | $ | (1,252,696 | ) | $ | (1,320,289 | ) |
(a) | At December 31, 2018 and December 31, 2017, the carrying value of long-term debt, net includes unamortized original issue discount and debt issuance costs of $19.1 million and $22.3 million, respectively. |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Credit Facility due December 7, 2023 | $ | 260,000 | $ | — | |||
Term Loan due November 16, 2022 | 425,000 | 425,000 | |||||
6.375% Senior Notes due June 1, 2024 (the “6.375% Senior Notes”); interest payable each June 1 and December 1 | 400,000 | 400,000 | |||||
5.00% Senior Notes due December 15, 2027 (the “5.00% Senior Notes”); interest payable each June 15 and December 15 | 450,000 | 450,000 | |||||
Total long-term debt | 1,535,000 | 1,275,000 | |||||
Less: Unamortized original issue discount and original issue premium, net | 7,352 | 8,668 | |||||
Less: Unamortized debt issuance costs | 11,737 | 13,636 | |||||
Total long-term debt, net | $ | 1,515,911 | $ | 1,252,696 |
Beginning December 15, | Percentage |
2022 | 102.500% |
2023 | 101.667% |
2024 | 100.833% |
2025 and thereafter | 100.000% |
Beginning June 1, | Percentage |
2019 | 104.781% |
2020 | 103.188% |
2021 | 101.594% |
2022 and thereafter | 100.000% |
Years Ending December 31, | (In thousands) | ||
2022 | $ | 425,000 | |
2023 | 260,000 | ||
2024 | 400,000 | ||
2027 | 450,000 | ||
Total | 1,535,000 | ||
Less: Unamortized original issue discount | 7,352 | ||
Less: Unamortized debt issuance costs | 11,737 | ||
Total long-term debt, net | $ | 1,515,911 |
Year Ended December 31, 2018 | |||||||
Foreign Currency Translation Adjustment | Accumulated Other Comprehensive Loss | ||||||
(In thousands) | |||||||
Balance at January 1 | $ | (112,318 | ) | $ | (112,318 | ) | |
Other comprehensive loss | (24,848 | ) | (24,848 | ) | |||
Balance at December 31 | $ | (137,166 | ) | $ | (137,166 | ) |
Year Ended December 31, 2017 | |||||||
Foreign Currency Translation Adjustment | Accumulated Other Comprehensive (Loss) Income | ||||||
(In thousands) | |||||||
Balance at January 1 | $ | (176,384 | ) | $ | (176,384 | ) | |
Other comprehensive income before reclassifications | 63,352 | 63,352 | |||||
Amounts reclassified into earnings | 714 | 714 | |||||
Net period other comprehensive income | 64,066 | 64,066 | |||||
Balance at December 31 | $ | (112,318 | ) | $ | (112,318 | ) |
Year Ended December 31, 2016 | |||||||||||
Foreign Currency Translation Adjustment | Unrealized Gain (Loss) on Available-For-Sale Security | Accumulated Other Comprehensive Loss | |||||||||
(In thousands) | |||||||||||
Balance at January 1 | $ | (139,784 | ) | $ | 2,964 | $ | (136,820 | ) | |||
Other comprehensive (loss) income before reclassifications | (36,600 | ) | 94 | (36,506 | ) | ||||||
Gain on sale of available-for-sale security reclassified into earnings | — | (3,058 | ) | (3,058 | ) | ||||||
Net period other comprehensive loss | (36,600 | ) | (2,964 | ) | (39,564 | ) | |||||
Balance at December 31 | $ | (176,384 | ) | $ | — | $ | (176,384 | ) |
Years Ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | |||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | ||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||
Numerator | |||||||||||||||||||||||
Net earnings from continuing operations | $ | 472,969 | $ | 472,969 | $ | 355,977 | $ | 355,977 | $ | 178,341 | $ | 178,341 | |||||||||||
Net loss (earnings) attributable to noncontrolling interests | 5,348 | 5,348 | (179 | ) | (179 | ) | (562 | ) | (562 | ) | |||||||||||||
Net earnings from continuing operations attributable to Match Group, Inc. shareholders | 478,317 | 478,317 | 355,798 | 355,798 | 177,779 | 177,779 | |||||||||||||||||
Loss from discontinued operations, net of tax | (378 | ) | (378 | ) | (5,650 | ) | (5,650 | ) | (6,328 | ) | (6,328 | ) | |||||||||||
Net earnings attributable to Match Group, Inc. shareholders | $ | 477,939 | $ | 477,939 | $ | 350,148 | $ | 350,148 | $ | 171,451 | $ | 171,451 | |||||||||||
Denominator | |||||||||||||||||||||||
Basic weighted average common shares outstanding | 277,005 | 277,005 | 264,014 | 264,014 | 251,522 | 251,522 | |||||||||||||||||
Dilutive securities including stock options, RSUs, and subsidiary denominated equity awards (a)(b) | — | 19,770 | — | 32,062 | — | 18,203 | |||||||||||||||||
Dilutive weighted average common shares outstanding | 277,005 | 296,775 | 264,014 | 296,076 | 251,522 | 269,725 | |||||||||||||||||
Earnings (loss) per share: | |||||||||||||||||||||||
Earnings per share from continuing operations | $ | 1.73 | $ | 1.61 | $ | 1.35 | $ | 1.20 | $ | 0.71 | $ | 0.66 | |||||||||||
Loss per share from discontinued operations, net of tax | $ | — | $ | — | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.02 | ) | |||||||
Earnings per share attributable to Match Group, Inc. shareholders | $ | 1.73 | $ | 1.61 | $ | 1.33 | $ | 1.18 | $ | 0.68 | $ | 0.64 |
(a) | If the effect is dilutive, weighted average common shares outstanding include the incremental shares that would be issued upon the assumed exercise of stock options and subsidiary denominated equity and the vesting of restricted stock units (“RSUs”). For the years ended December 31, 2018, 2017, and 2016, 0.2 |
(b) | Market-based awards and performance-based stock options (“PSOs”) and restricted stock units (“PSUs”) are considered contingently issuable shares. Market-based awards, PSOs and PSUs are included in the denominator for earnings per share if (i) the applicable market or performance condition(s) has been met and (ii) the inclusion of the market-based award, PSOs and PSUs are dilutive for the respective reporting periods. For the years ended December 31, 2018, 2017, and 2016, 0.7 million, 3.8 million, and 2.5 million market-based awards, PSOs and PSUs, respectively, were excluded from the calculation of diluted earnings per share because the market or performance conditions had not been met. |
December 31, 2018 | ||||||||||||
Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (In Years) | Aggregate Intrinsic Value | |||||||||
(Shares and intrinsic value in thousands) | ||||||||||||
Outstanding at January 1, 2018 | 35,878 | $ | 13.50 | |||||||||
Granted | 580 | 33.45 | ||||||||||
Adjustment for special dividend | 953 | N/A | ||||||||||
Exercised | (14,160 | ) | 11.61 | |||||||||
Forfeited | (3,750 | ) | 13.97 | |||||||||
Expired | (6 | ) | 12.07 | |||||||||
Outstanding at December 31, 2018 (a) | 19,495 | $ | 14.72 | 7.6 | $ | 546,911 | ||||||
Options exercisable | 5,143 | $ | 13.60 | 6.9 | $ | 150,033 |
(a) | Included in the outstanding balance at December 31, 2018 are 0.6 million performance-based stock options, which vest in varying amounts and years depending upon certain performance conditions. The Company does not expect any shares to vest based on our current assessment of the performance conditions. The table above includes these awards at their maximum potential payout. |
Options Outstanding | Options Exercisable | ||||||||||||||||
Range of Exercise Prices | Outstanding at December 31, 2018 | Weighted- Average Remaining Contractual Life in Years | Weighted-Average Exercise Price | Exercisable at December 31, 2018 | Weighted- Average Remaining Contractual Life in Years | Weighted-Average Exercise Price | |||||||||||
(Shares in thousands) | |||||||||||||||||
$0.01 to $5.00 | 156 | 6.4 | $ | 4.32 | 92 | 6.4 | $ | 4.36 | |||||||||
$5.01 to $10.00 | 4,723 | 7.4 | 8.97 | 894 | 7.3 | 8.72 | |||||||||||
$10.01 to $15.00 | 7,075 | 6.7 | 12.61 | 3,073 | 6.2 | 12.95 | |||||||||||
$15.01 to $20.00 | 4,368 | 8.1 | 17.08 | 532 | 8.0 | 17.00 | |||||||||||
$20.01 to $25.00 | 1,744 | 8.7 | 22.53 | 402 | 8.7 | 22.40 | |||||||||||
$25.01 to $30.00 | 1,050 | 8.9 | 26.89 | 150 | 8.9 | 26.12 | |||||||||||
$30.01 to $35.00 | 274 | 9.1 | 30.75 | — | — | — | |||||||||||
$35.01 to $40.00 | 105 | 9.1 | 38.98 | — | — | — | |||||||||||
19,495 | 7.6 | $ | 14.72 | 5,143 | 6.9 | $ | 13.60 |
Years Ended December 31, | ||||||||
2018 | 2017 | 2016 | ||||||
Expected volatility | 29 | % | 27 | % | 27 | % | ||
Risk-free interest rate | 2.5 | % | 1.9 | % | 1.3 | % | ||
Expected term | 5.3 years | 5.0 years | 4.8 years | |||||
Dividend yield | — | % | — | % | — | % |
RSUs | ||||||
Number of shares | Weighted Average Grant Date Fair Value | |||||
(Shares in thousands) | ||||||
Unvested at January 1, 2018 | 2,214 | $ | 18.65 | |||
Granted | 1,389 | 42.24 | ||||
Adjustment for special dividend | 136 | N/A | ||||
Vested | (493 | ) | 18.21 | |||
Forfeited | (487 | ) | 20.75 | |||
Unvested at December 31, 2018 | 2,759 | $ | 29.38 |
Market-based awards | ||||||
Number of shares | Weighted Average Grant Date Price | |||||
(Shares in thousands) | ||||||
Unvested at January 1, 2018 | 6,107 | $ | 19.41 | |||
Granted | 527 | 26.91 | ||||
Adjustment for special dividend | 225 | N/A | ||||
Vested | (343 | ) | 14.20 | |||
Forfeited | (1,907 | ) | 19.26 | |||
Unvested at December 31, 2018 | 4,609 | $ | 18.28 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Revenue | |||||||||||
United States | $ | 872,977 | $ | 722,446 | $ | 668,699 | |||||
All other countries | 856,873 | 608,215 | 449,411 | ||||||||
Total | $ | 1,729,850 | $ | 1,330,661 | $ | 1,118,110 |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Long-lived assets (excluding goodwill and intangible assets) | |||||||
United States | $ | 35,004 | $ | 37,547 | |||
France | 11,591 | 13,635 | |||||
Canada | 8,927 | 6,738 | |||||
All other countries | 2,829 | 3,700 | |||||
Total | $ | 58,351 | $ | 61,620 |
(In thousands) | |||
2019 | $ | 11,559 | |
2020 | 13,470 | ||
2021 | 12,100 | ||
2022 | 6,812 | ||
2023 | 6,021 | ||
Thereafter | 17,471 | ||
Total | $ | 67,433 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Cash paid (received) during the year for: | |||||||||||
Interest | $ | 71,308 | $ | 71,893 | $ | 82,494 | |||||
Income tax payments, including amounts paid to IAC for Match Group’s share of IAC’s consolidated tax liability | 39,267 | 28,938 | 44,733 | ||||||||
Income tax refunds | (17,720 | ) | (13,537 | ) | (962 | ) |
December 31, | |||||||||||||||
2018 | 2017 | 2016 | 2015 | ||||||||||||
(In thousands) | |||||||||||||||
Cash and cash equivalents | $ | 186,947 | $ | 272,624 | $ | 253,651 | $ | 88,173 | |||||||
Restricted cash included in other current assets | 193 | 137 | 120 | 126 | |||||||||||
Total cash, cash equivalents and restricted cash as shown on the consolidated statement of cash flow | $ | 187,140 | $ | 272,761 | $ | 253,771 | $ | 88,299 |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Other current assets: | |||||||
Capitalized mobile app fees | $ | 29,216 | $ | 22,070 | |||
Prepaid expenses | 19,476 | 16,374 | |||||
Other | 9,074 | 16,925 | |||||
Other current assets | $ | 57,766 | $ | 55,369 |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Property and equipment, net: | |||||||
Computer equipment and capitalized software | $ | 136,083 | $ | 134,757 | |||
Leasehold improvements | 24,529 | 22,390 | |||||
Furniture and other equipment | 7,395 | 7,216 | |||||
Projects in progress | 3,369 | 6,117 | |||||
171,376 | 170,480 | ||||||
Accumulated depreciation and amortization | (113,025 | ) | (108,860 | ) | |||
Property and equipment, net | $ | 58,351 | $ | 61,620 |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Accrued expenses and other current liabilities: | |||||||
Accrued advertising expense | $ | 40,894 | $ | 28,878 | |||
Accrued employee compensation and benefits | 38,378 | 30,375 | |||||
Other | 56,699 | 51,313 | |||||
Accrued expenses and other current liabilities | $ | 135,971 | $ | 110,566 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Other income (expense), net | $ | 7,765 | $ | (30,827 | ) | $ | 7,866 |
Quarter Ended March 31 | Quarter Ended June 30 | Quarter Ended September 30 (a) | Quarter Ended December 31 (b) | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Year Ended December 31, 2018 | |||||||||||||||
Revenue | $ | 407,367 | $ | 421,196 | $ | 443,943 | $ | 457,344 | |||||||
Cost of revenue | 93,944 | 97,334 | 107,512 | 111,210 | |||||||||||
Operating income | 112,233 | 150,165 | 139,895 | 151,001 | |||||||||||
Earnings from continuing operations | 99,678 | 131,358 | 127,950 | 113,983 | |||||||||||
Loss from discontinued operations, net of tax | — | — | (378 | ) | — | ||||||||||
Net earnings attributable to Match Group, Inc. shareholders | 99,736 | 132,500 | 130,159 | 115,544 | |||||||||||
Per share information from continuing operations attributable to the Match Group, Inc. shareholders: | |||||||||||||||
Basic (c) | $ | 0.36 | $ | 0.48 | $ | 0.47 | $ | 0.42 | |||||||
Diluted (c) | $ | 0.33 | $ | 0.45 | $ | 0.44 | $ | 0.39 | |||||||
Per share information attributable to the Match Group, Inc. shareholders: | |||||||||||||||
Basic (c) | $ | 0.36 | $ | 0.48 | $ | 0.47 | $ | 0.42 | |||||||
Diluted (c) | $ | 0.33 | $ | 0.45 | $ | 0.44 | $ | 0.39 | |||||||
Year Ended December 31, 2017 | |||||||||||||||
Revenue | $ | 298,764 | $ | 309,572 | $ | 343,418 | $ | 378,907 | |||||||
Cost of revenue | 58,848 | 62,665 | 72,044 | 85,942 | |||||||||||
Operating income | 58,871 | 82,975 | 91,008 | 127,663 | |||||||||||
Earnings (loss) from continuing operations | 24,555 | 51,544 | 287,771 | (7,893 | ) | ||||||||||
(Loss) earnings from discontinued operations, net of tax | (4,491 | ) | (71 | ) | (85 | ) | (1,003 | ) | |||||||
Net earnings (loss) attributable to Match Group, Inc. shareholders | 20,053 | 51,430 | 287,688 | (9,023 | ) | ||||||||||
Per share information from continuing operations attributable to the Match Group, Inc. shareholders: | |||||||||||||||
Basic (c) | $ | 0.10 | $ | 0.20 | $ | 1.08 | $ | (0.03 | ) | ||||||
Diluted (c) | $ | 0.08 | $ | 0.17 | $ | 0.98 | $ | (0.03 | ) | ||||||
Per share information attributable to the Match Group, Inc. shareholders: | |||||||||||||||
Basic (c) | $ | 0.08 | $ | 0.20 | $ | 1.08 | $ | (0.03 | ) | ||||||
Diluted (c) | $ | 0.07 | $ | 0.17 | $ | 0.98 | $ | (0.03 | ) |
(a) | Net earnings for the third quarter of 2017 was impacted by an income tax benefit of $226.2 million primarily due to excess tax deductions attributable to stock-based compensation. |
(b) | Net loss for the fourth quarter of 2017 was impacted by an incremental income tax provision of $92.3 million related to the Tax Act, of which, $23.7 million relates to the Transition Tax and a $68.6 million relates to the remeasurement of U.S. net deferred tax assets due to the reduction in the corporate income tax rate. |
(c) | Quarterly per share amounts may not add to the related annual per share amount because of differences in the average common shares outstanding during each period. |
/s/ ERNST & YOUNG LLP |
Schedule Number | ||
II | Valuation and Qualifying Accounts. |
Incorporated by Reference | Filed (†) or Furnished (‡) Herewith (as indicated) | |||||||||||
Exhibit No. | Exhibit Description | Form | SEC File No. | Exhibit | Filing Date | |||||||
2.1 | 8-K | 000-20570 | 2.1 | 7/17/2015 | ||||||||
3.1 | 8-K | 001-37636 | 3.1 | 11/24/2015 | ||||||||
3.2 | 8-K | 001-37636 | 3.1 | 12/7/2017 | ||||||||
4.1 | 8-K | 001-37636 | 4.1 | 6/2/2016 | ||||||||
4.2 | 8-K | 001-37636 | 4.1 | 11/24/2015 | ||||||||
4.3 | 8-K | 001-37636 | 4.1 | 12/4/2017 | ||||||||
10.1 | 8-K | 001-37636 | 10.1 | 11/24/2015 | ||||||||
10.2 | 8-K | 001-37636 | 10.2 | 11/24/2015 | ||||||||
10.3 | 10-Q | 001-37636 | 10.1 | 5/10/2016 | ||||||||
10.4 | 8-K | 001-37636 | 10.3 | 11/24/2015 | ||||||||
10.5 | 8-K | 001-37636 | 10.4 | 11/24/2015 | ||||||||
10.6 | 8-K | 001-37636 | 10.5 | 11/24/2015 | ||||||||
10.7 | 10-Q | 001-37636 | 10.1 | 8/4/2017 | ||||||||
10.8 | 10-K | 001-37636 | 10.7 | 2/28/2017 | ||||||||
10.9 | 10-K | 001-37636 | 10.8 | 2/28/2017 | ||||||||
10.10 | 8-K | 001-37636 | 10.1 | 6/21/2018 | ||||||||
10.11 | 10-Q | 001-37636 | 10.1 | 11/9/2017 | ||||||||
10.12 | 10-Q | 001-37636 | 10.2 | 11/9/2017 | ||||||||
10.13 | 10-K | 001-37636 | 10.9 | 3/28/2016 | ||||||||
10.14 | 10-K | 001-37636 | 10.11 | 3/28/2016 |
Incorporated by Reference | Filed (†) or Furnished (‡) Herewith (as indicated) | |||||||||||
Exhibit No. | Exhibit Description | Form | SEC File No. | Exhibit | Filing Date | |||||||
10.15 | 8-K | 001-37636 | 10.1 | 12/8/2016 | ||||||||
10.16 | 8-K | 001-37636 | 10.1 | 8/17/2017 | ||||||||
10.17 | 8-K | 001-37636 | 10.1 | 12/13/2018 | ||||||||
10.18 | 8-K | 001-37636 | 10.1 | 7/26/2018 | ||||||||
10.19 | 8-K | 001-37636 | 10.1 | 8/14/2018 | ||||||||
10.20 | 8-K | 001-37636 | 10.2 | 8/14/2018 | ||||||||
10.21 | 10-Q | 001-37636 | 10.5 | 11/9/2018 | ||||||||
10.22 | 8-K | 001-37636 | 10.1 | 8/10/2018 | ||||||||
21.1 | † | |||||||||||
23.1 | † | |||||||||||
31.1 | † | |||||||||||
31.2 | † | |||||||||||
32.1 | ‡ | |||||||||||
32.2 | ‡ | |||||||||||
101.INS | XBRL Instance Document | ‡ | ||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | ‡ | ||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ‡ | ||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ‡ | ||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ‡ | ||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ‡ |
(1) | Reflects management contracts and management and director compensatory plans. |
February 28, 2019 | MATCH GROUP, INC. | |||
By: | /s/ GARY SWIDLER | |||
Gary Swidler | ||||
Chief Financial Officer |
Signature | Title | |
/s/ JOSEPH LEVIN | Chairman of the Board | |
Joseph Levin | ||
/s/ AMANDA W. GINSBERG | Chief Executive Officer and Director (Principal Executive Officer) | |
Amanda W. Ginsberg | ||
/s/ GARY SWIDLER | Chief Financial Officer (Principal Financial Officer) | |
Gary Swidler | ||
/s/ PHILIP D. EIGENMANN | Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) | |
Philip D. Eigenmann | ||
/s/ ANN L. McDANIEL | Director | |
Ann L. McDaniel | ||
/s/ THOMAS J. McINERNEY | Director | |
Thomas J. McInerney | ||
/s/ GLENN H. SCHIFFMAN | Director | |
Glenn H. Schiffman | ||
/s/ PAMELA S. SEYMON | Director | |
Pamela S. Seymon | ||
/s/ ALAN G. SPOON | Director | |
Alan G. Spoon | ||
/s/ MARK STEIN | Director | |
Mark Stein | ||
/s/ GREGG WINIARSKI | Director | |
Gregg Winiarski | ||
/s/ SAM YAGAN | Director | |
Sam Yagan |
Description | Balance at Beginning of Period | Charges to Earnings | Charges to Other Accounts | Deductions | Balance at End of Period | ||||||||||||||
(In thousands) | |||||||||||||||||||
2018 | |||||||||||||||||||
Allowance for doubtful accounts | $ | 778 | $ | 83 | (a) | $ | (15 | ) | $ | (122 | ) | (d) | $ | 724 | |||||
Deferred tax valuation allowance | 24,795 | 22,675 | (b) | (22 | ) | (c) | — | 47,448 | |||||||||||
Other reserves | 2,544 | 3,008 | |||||||||||||||||
2017 | |||||||||||||||||||
Allowance for doubtful accounts | $ | 676 | $ | 427 | (a) | $ | (47 | ) | $ | (278 | ) | (d) | $ | 778 | |||||
Deferred tax valuation allowance | 23,411 | 1,157 | (e) | 227 | (f) | — | 24,795 | ||||||||||||
Other reserves | 2,822 | 2,544 | |||||||||||||||||
2016 | |||||||||||||||||||
Allowance for doubtful accounts | $ | 902 | $ | 136 | (a) | $ | 23 | $ | (385 | ) | (d) | $ | 676 | ||||||
Deferred tax valuation allowance | 22,945 | (593 | ) | (g) | 1,059 | (h) | — | 23,411 | |||||||||||
Other reserves | 2,514 | 2,822 |
(a) | Additions to the allowance for doubtful accounts are charged to expense. |
(b) | Amount is primarily related to foreign tax credits and foreign interest deduction carryforwards. |
(c) | Amount is related to currency translation adjustments on foreign net operating losses. |
(d) | Write-off of fully reserved accounts receivable. |
(e) | Amount is primarily related to an other-than-temporary impairment charge for a certain cost method investment and an increase in foreign tax loss carryforwards. |
(f) | Amount is related to currency translation adjustments on foreign net operating losses. |
(g) | Amount is primarily related to an other-than-temporary impairment charge for a certain cost method investment and an increase in foreign tax credits. |
(h) | Amount is related to the realization of previously unbenefited losses on an available-for-sale marketable equity security included in accumulated other comprehensive loss. |
Entity | Jurisdiction of Formation | |
Affinity Apps LLC | Delaware | |
Connect, LLC | Delaware | |
DatingDirect.com Limited | England and Wales | |
Delightful.com, LLC | Delaware | |
Eureka SG Pte. Ltd. | Singapore | |
Eureka Taiwan | Taiwan | |
Eureka, Inc. | Japan | |
Five Star Matchmaking Information Technology (Beijing) Co., Ltd. | People’s Republic of China | |
FriendScout24 GmbH | Germany | |
Hinge, Inc. | Delaware | |
HowAboutWe, LLC | Delaware | |
Humor Rainbow, Inc. | New York | |
M8 Singlesnet LLC | Delaware | |
Mash Dating, LLC | Delaware | |
Massive Media Europe NV | Belgium | |
Massive Media (UK) Ltd. | England and Wales | |
Massive Media Match NV | Belgium | |
Match Group Europe Limited | England and Wales | |
Match Internet Financial Services Designated Activity Company | Ireland | |
Match ProfilePro, LLC | Delaware | |
Match.com Europe Limited | England and Wales | |
Match.com Events LLC | Delaware | |
Match.com Foreign Holdings II Limited | England and Wales | |
Match.com Foreign Holdings III Limited | England and Wales | |
Match.com Foreign Holdings Limited | England and Wales | |
Match.com Global Investments S.à r.l. | Luxembourg | |
Match.com Global Services Limited | England and Wales | |
Match.com HK Limited | Hong Kong | |
Match.com International Holdings, Inc. | Delaware | |
Match.com International II Limited | England and Wales | |
Match.com International Limited | England and Wales | |
Match.com Investments Inc. | Cayman Islands | |
Match.com Japan KK | Japan | |
Match.com Japan Networks GK | Japan | |
Match.com LatAm Limited | England and Wales | |
Match.com Luxembourg S.à r.l. | Luxembourg | |
Match.com Nordic AB | Sweden | |
Match.com Offshore Holdings, Ltd | Mauritius |
Entity | Jurisdiction of Formation | |
Match.com Pegasus Limited | England and Wales | |
Match Group, LLC | Delaware | |
Matchcom Mexico, S. de R.L., de C.V. | Mexico | |
Meetic Espana, SLU | Spain | |
Meetic Italia SRL | Italy | |
Meetic Netherlands BV | Netherlands | |
Meetic SAS | France | |
MG France Services | France | |
MG Korea Services Limited | South Korea | |
MG Services Alpha LLC | Delaware | |
MG Services Beta LLC | Delaware | |
MM LatAm, LLC | Delaware | |
Mojo Acquisition Corp. | Delaware | |
Mojo Finance Co. | Cayman Islands | |
MTCH Technology Services Limited | Ireland | |
Neu.de GmbH | Germany | |
Nexus Limited | England and Wales | |
Parperfeito Comunicacao SA | Brazil | |
People Media, Inc. | Delaware | |
People Media, LLC | Arizona | |
Plentyoffish Media ULC | British Columbia | |
Plentyoffish Media, LLC | Delaware | |
Pretty Fun Therapy SAS | France | |
Search Floor, Inc. | California | |
Shoptouch, Inc. | Delaware | |
SpeedDate.com, LLC | Delaware | |
Spotlight Studios, LLC | Delaware | |
Tinder, LLC | Delaware | |
Tinder Development, LLC | Delaware | |
TPR/Tutor Holdings, LLC | Delaware |
/s/ ERNST & YOUNG LLP |
1. | I have reviewed this report on Form 10-K for the fiscal year ended December 31, 2018 of Match Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a 15(f) and 15d 15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Dated: | February 28, 2019 | /s/ AMANDA W. GINSBERG | |
Amanda W. Ginsberg Chief Executive Officer |
1. | I have reviewed this report on Form 10-K for the fiscal year ended December 31, 2018 of Match Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a 15(f) and 15d 15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Dated: | February 28, 2019 | /s/ GARY SWIDLER | |
Gary Swidler Chief Financial Officer |
(1) | the Annual Report on Form 10-K for the fiscal year ended December 31, 2018 of Match Group, Inc. (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Match Group, Inc. |
Dated: | February 28, 2019 | /s/ AMANDA W. GINSBERG | |
Amanda W. Ginsberg Chief Executive Officer |
(1) | the Annual Report on Form 10-K for the fiscal year ended December 31, 2018 of Match Group, Inc. (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Match Group, Inc. |
Dated: | February 28, 2019 | /s/ GARY SWIDLER | |
Gary Swidler Chief Financial Officer |
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Feb. 01, 2019 |
Jun. 30, 2018 |
|
Document Information [Line Items] | |||
Entity Registrant Name | Match Group, Inc. | ||
Entity Central Index Key | 0001575189 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,953,756,561 | ||
Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 68,529,512 | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 209,919,402 | ||
Class C Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 0 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Statement of Comprehensive Income [Abstract] | |||
Net earnings | $ 472,591 | $ 350,327 | $ 172,013 |
Other comprehensive (loss) income, net of tax | |||
Change in foreign currency translation adjustment | (24,967) | 64,588 | (36,239) |
Change in fair value of available-for-sale securities | 0 | 0 | (2,964) |
Total other comprehensive (loss) income | (24,967) | 64,588 | (39,203) |
Comprehensive income | 447,624 | 414,915 | 132,810 |
Comprehensive loss (income) attributable to noncontrolling interests | 5,467 | (701) | (923) |
Comprehensive income attributable to Match Group, Inc. shareholders | $ 453,091 | $ 414,214 | $ 131,887 |
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Parenthetical) |
12 Months Ended |
---|---|
Dec. 31, 2018
$ / shares
| |
Dividends declared per share (USD per share) | $ 2 |
Common Stock | Common Stock | |
Dividends declared per share (USD per share) | 2.00 |
Common Stock | Class B Common Stock | |
Dividends declared per share (USD per share) | $ 2.00 |
ORGANIZATION |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | NOTE 1—ORGANIZATION Match Group, Inc. is a leading provider of dating products available in over 40 languages to our users all over the world through applications and websites that we own and operate. We operate a portfolio of brands, including Tinder, Match, PlentyOfFish, Meetic, OkCupid, OurTime, Pairs, and Hinge, as well as a number of other brands, each designed to increase our users’ likelihood of finding a meaningful connection. Through our portfolio of trusted brands, we provide tailored products to meet the varying preferences of our users. Following the sale of our Non-dating segment in March 2017, Match Group has one operating segment, Dating, which is managed as a portfolio of dating brands. As used herein, “Match Group,” the “Company,” “we,” “our,” “us,” and similar terms refer to Match Group, Inc. and its subsidiaries, unless the context indicates otherwise. As of December 31, 2018, IAC/InterActiveCorp’s (“IAC”) economic ownership interest and voting interest in Match Group were 81.1% and 97.6%, respectively. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation The Company prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. Intercompany transactions and accounts have been eliminated. For the purposes of these consolidated financial statements, income taxes have been computed for Match Group on an as if stand-alone, separate tax return basis. Accounting for Investments in Equity Securities Investments in equity securities, other than those of our consolidated subsidiaries, are accounted for at fair value or under the measurement alternative of Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, upon its adoption on January 1, 2018, with any changes to fair value recognized within other income (expense), net each reporting period. Under the measurement alternative, equity investments without readily determinable fair values are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer and value is generally determined based on a market approach as of the transaction date. An investment will be considered identical or similar if it has identical or similar rights to the equity investments held by the Company. The Company reviews its equity securities for impairment each reporting period when there are qualitative factors or events that indicate possible impairment. Factors we consider in making this determination include negative change in industry and market conditions, financial performance, business prospects, and other relevant events and factors. When indicators of impairment exist, the Company prepares quantitative assessments of the fair value of our equity securities, which require judgment and the use of estimates. When our assessment indicates that the fair value of the security is below the carrying value, the Company writes down the security to its fair value and records the corresponding charge within other income (expense), net. See “Accounting Pronouncements adopted by the Company” below for further information. Accounting Estimates Management of the Company is required to make certain estimates, judgments and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates, judgments and assumptions impact the reported amounts of assets, liabilities, revenue and expenses and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. On an ongoing basis, the Company evaluates its estimates and judgments, including those related to: the recoverability of goodwill and indefinite-lived intangible assets; the useful lives and recoverability of definite-lived intangible assets and property and equipment; the fair values of equity securities without readily determinable fair values; the carrying value of accounts receivable, including the determination of the allowance for doubtful accounts; the determination of revenue reserves; the fair value of acquisition-related contingent consideration arrangements; unrecognized tax benefits; the valuation allowance for deferred income tax assets; and the fair value of and forfeiture rates for stock-based awards, among others. The Company bases its estimates and judgments on historical experience, its forecasts and budgets and other factors that the Company considers relevant. Revenue Recognition The Company adopted the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, effective January 1, 2018 using the modified retrospective transition method for open contracts as of the date of initial application. See "Accounting Pronouncements adopted by the Company" below for further information. The Company accounts for a contract with a customer when it has approval and commitment from all parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the promised services is transferred to our customers, and in an amount that reflects the consideration the Company is contractually due in exchange for those services. The Company’s revenue is primarily derived directly from users in the form of recurring subscriptions. Subscription revenue is presented net of credits and credit card chargebacks. Subscribers pay in advance, primarily by credit card or through mobile app stores, and, subject to certain conditions identified in our terms and conditions, generally all purchases are final and nonrefundable. Revenue is initially deferred and is recognized using the straight-line method over the term of the applicable subscription period, which generally ranges from one to six months. Revenue is also earned from online advertising, the purchase of à la carte features and offline events. Online advertising revenue is recognized when an advertisement is displayed. Revenue from the purchase of à la carte features is recognized based on usage. Revenue associated with offline events is recognized when each event occurs. As permitted under the practical expedient available under ASU No. 2014-09, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which the Company recognizes revenue at the amount which we have the right to invoice for services performed. Transaction Price The objective of determining the transaction price is to estimate the amount of consideration the Company is due in exchange for services, including amounts that are variable. The Company determines the total transaction price, including an estimate of any variable consideration, at contract inception and reassesses this estimate each reporting period. The Company excludes from the measurement of transaction price all taxes assessed by governmental authorities that are both (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers. Accordingly, such tax amounts are not included as a component of revenue or cost of revenue. For contracts that have an original duration of one year or less, the Company uses the practical expedient available under ASU No. 2014-09 applicable to such contracts and does not consider the time value of money. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company has determined that certain costs, primarily mobile app store fees, meet the requirements to be capitalized as a cost of obtaining a contract. The Company recognizes an asset for these costs if we expect to recover those costs. Mobile app store fees are amortized over the period of contract performance. Specifically, the Company capitalizes and amortizes mobile app store fees over the term of the applicable subscription. During the year ended December 31, 2018, the Company recognized expense of $284.7 million related to the amortization of these costs. The contract asset balance at December 31, 2018 related to costs to obtain a contract is $29.2 million and included in “Other current assets” in the accompanying consolidated balance sheet. Accounts Receivables, net of allowance for doubtful accounts and revenue reserves Accounts receivable include amounts billed and currently due from customers. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of accounts receivable that will not be collected. The allowance for doubtful accounts is based upon a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history, and the specific customer’s ability to pay its obligation. The time between the Company issuance of an invoice and payment due date is not significant; customer payments that are not collected in advance of the transfer of promised services are generally due no later than 30 days from invoice date. The Company also maintains allowances to reserve for potential credits issued to consumers or other revenue adjustments. The amounts of these reserves are based primarily upon historical experience. Deferred Revenue Deferred revenue consists of advance payments that are received or are contractually due in advance of the Company's performance. The Company’s deferred revenue is reported on a contract by contract basis at the end of each reporting period. The Company classifies deferred revenue as current when the term of the applicable subscription period or expected completion of our performance obligation is one year or less. The deferred revenue balance as of January 1, 2018 was $198.3 million. During the year ended December 31, 2018, the Company recognized $198.3 million of revenue that was included in the deferred revenue balance as of January 1, 2018. The current deferred revenue balance at December 31, 2018 is $209.9 million. At December 31, 2018, there is no non-current portion of deferred revenue. Disaggregation of Revenue The following table presents disaggregated revenue:
Cash and Cash Equivalents Cash and cash equivalents include cash and short-term investments, with maturities of less than 91 days from the date of purchase. Domestically, cash equivalents include AAA rated government money market funds. Internationally, cash equivalents include money market funds. Property and Equipment Property and equipment, including significant improvements, are recorded at cost. Repairs and maintenance costs are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets or, in the case of leasehold improvements, the lease term, if shorter.
The Company capitalizes certain internal use software costs including external direct costs utilized in developing or obtaining the software and compensation for personnel directly associated with the development of the software. Capitalization of such costs begins when the preliminary project stage is complete and ceases when the project is substantially complete and ready for its intended purpose. The net book value of capitalized internal use software is $19.5 million and $20.9 million at December 31, 2018 and 2017, respectively. Business Combinations The purchase price of each acquisition is attributed to the assets acquired and liabilities assumed based on their fair values at the date of acquisition, including identifiable intangible assets that either arise from a contractual or legal right or are separable from goodwill. The fair value of these intangible assets is based on valuations that use information and assumptions provided by management. The excess purchase price over the net tangible and identifiable intangible assets is recorded as goodwill and is assigned to the reporting unit that is expected to benefit from the combination as of the acquisition date. In connection with certain business combinations, the Company has entered into contingent consideration arrangements that are determined to be part of the purchase price. Each of these arrangements is initially recorded at its fair value at the time of the acquisition and reflected at current fair value for each subsequent reporting period thereafter until settled. The contingent consideration arrangements are generally based upon earnings performance and/or operating metrics. The Company determines the fair value of the contingent consideration arrangements using probability-weighted analyses to determine the amounts of the gross liability, and, if the arrangement is long-term in nature, applying a discount rate that appropriately captures the risk associated with the obligation to determine the net amount reflected in the consolidated financial statements. Significant changes in forecasted earnings or operating metrics would result in a significantly higher or lower fair value measurement. The changes in the remeasured fair value of the contingent consideration arrangements during each reporting period, including the accretion of the discount, if applicable, are recognized in “General and administrative expense” in the accompanying consolidated statement of operations. See “Note 6—Financial Instruments” for a discussion of contingent consideration arrangements. Goodwill and Indefinite-Lived Intangible Assets The Company assesses goodwill on its one reporting unit and indefinite-lived intangible assets for impairment annually as of October 1, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or the fair value of an indefinite-lived intangible asset below its carrying value. When the Company elects to perform a qualitative assessment and concludes it is not more likely than not that the fair value of the reporting unit is less than its carrying value, no further assessment of that reporting unit's goodwill is necessary; otherwise, a quantitative assessment is performed and the fair value of the reporting unit is determined. If the carrying value of the reporting unit exceeds its fair value an impairment loss equal to the excess is recorded. For the Company's annual goodwill test at October 1, 2018, a qualitative assessment of goodwill was performed because the Company concluded it was more likely than not that the fair value of its single reporting unit was in excess of its carrying value. The primary factors that the Company considered in its qualitative assessment were that its market capitalization of $15.7 billion exceeded its carrying value by approximately $15.1 billion and the Company’s strong operating performance. A qualitative assessment was also performed for 2017 and the Company concluded it was more likely than not that the fair value of the reporting unit was in excess of its carrying value. The Company foregoes a qualitative assessment and tests the goodwill for impairment when it concludes that it is more likely than not that there may be an impairment. If needed, the annual or interim quantitative test of the recovery of goodwill involves a comparison of the estimated fair value of the Company's reporting unit to its carrying value, including goodwill. If the estimated fair value of the reporting unit exceeds its carrying value, goodwill of the reporting unit is not impaired. If the carrying value of the reporting unit exceeds its estimated fair value, an impairment loss equal to the excess is recorded. While the Company has the option to qualitatively assess whether it is more likely than not that the fair value of its indefinite-lived intangible assets is less than their carrying values, the Company’s policy is to determine the fair value of each of its indefinite-lived intangible assets annually as of October 1. The Company determines the fair value of its indefinite-lived intangible assets using an avoided royalty DCF valuation analyses. Significant judgments inherent in these analyses include the selection of appropriate royalty and discount rates and estimating the amount and timing of expected future cash flows. The discount rates used in the DCF analyses are intended to reflect the risks inherent in the expected future cash flows generated by the respective intangible assets. The royalty rates used in the DCF analyses are based upon an estimate of the royalty rates that a market participant would pay to license the Company’s trade names and trademarks. Assumptions used in the avoided royalty DCF analyses, including the discount rate and royalty rate, are assessed annually based on the actual and projected cash flows related to the asset, as well as macroeconomic and industry specific factors. The discount rates used in the Company’s annual indefinite-lived impairment assessment ranged from 11% to 26% in both 2018 and 2017, and the royalty rates used ranged from 3% to 8% in 2018 and 3% to 7% in 2017. The aggregate indefinite-lived intangible asset balance for which the most recent estimate of fair value is less than 110% of their carrying values is approximately $101.7 million. Long-Lived Assets and Intangible Assets with Definite Lives Long-lived assets, which consist of property and equipment and intangible assets with definite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is deemed not to be recoverable, an impairment loss is recorded equal to the amount by which the carrying value of the long-lived asset exceeds its fair value. Amortization of definite-lived intangible assets is computed either on a straight-line basis or based on the pattern in which the economic benefits of the asset will be realized. Fair Value Measurements The Company categorizes its financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are:
The Company’s non-financial assets, such as goodwill, intangible assets, and property and equipment, are adjusted to fair value only when an impairment is recognized. The Company’s financial assets, consisting of equity securities without readily determinable fair values, are adjusted to fair value when observable price changes are identified or an impairment is recognized. Such fair value measurements are based predominantly on Level 3 inputs. Advertising Costs Advertising costs are expensed in the period incurred (when the advertisement first runs for production costs that are initially capitalized) and represent online marketing, including fees paid to search engines and social media sites, offline marketing, which is primarily television advertising, and partner-related payments to those who direct traffic to our websites. Advertising expense is $386.0 million, $340.4 million and $325.0 million for the years ended December 31, 2018, 2017 and 2016, respectively. Legal Costs Legal costs are expensed as incurred. Income Taxes Match Group is included within IAC’s tax group for purposes of federal and consolidated state income tax return filings. In all periods presented, current income tax provision and deferred income tax benefit have been computed for Match Group on an as if stand-alone, separate return basis. The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided on deferred tax assets if it is determined that it is more likely than not that the deferred tax asset will not be realized. The Company records interest, net of any applicable related income tax benefit, on potential income tax contingencies as a component of income tax expense. The Company evaluates and accounts for uncertain tax positions using a two-step approach. Recognition (step one) occurs when the Company concludes that a tax position, based on its technical merits, is more-likely-than-not to be sustainable upon examination. Measurement (step two) determines the amount of the benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. De-recognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act imposes a new minimum tax on global intangible low taxed income (“GILTI”) earned by foreign subsidiaries beginning in 2018. The FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. The Company elects to recognize the tax on GILTI as a period expense in the period the tax is incurred. Earnings Per Share Basic earnings per share is computed by dividing net earnings attributable to Match Group shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vested resulting in the issuance of common stock that could share in the earnings of the Company. Foreign Currency Translation and Transaction Gains and Losses The financial position and operating results of foreign entities whose primary economic environment is based on their local currency are consolidated using the local currency as the functional currency. These local currency assets and liabilities are translated at the rates of exchange as of the balance sheet date, and local currency revenue and expenses of these operations are translated at average rates of exchange during the period. Translation gains and losses are included in accumulated other comprehensive income as a component of shareholders’ equity. Transaction gains and losses resulting from assets and liabilities denominated in a currency other than the functional currency are included in the consolidated statement of operations as a component of “Other income (expense), net.” Translation gains and losses relating to foreign entities that are liquidated or substantially liquidated are reclassified out of accumulated other comprehensive loss into earnings. Losses of $0.7 million during the year ended December 31, 2017 are included in “Other income (expense), net” in the accompanying consolidated statement of operations. Stock-Based Compensation Stock-based compensation is measured at the grant date based on the fair value of the award and is generally expensed over the requisite service period. See “Note 11—Stock-based Compensation” for a discussion of the Company’s stock-based compensation plans. Redeemable Noncontrolling Interests Noncontrolling interests in the consolidated subsidiaries of the Company are ordinarily reported on the consolidated balance sheet within shareholders’ equity, separately from the Company’s equity. However, securities that are redeemable at the option of the holder and not solely within the control of the issuer must be classified outside of shareholders’ equity. Accordingly, all noncontrolling interests that are redeemable at the option of the holder are presented outside of shareholders’ equity in the accompanying consolidated balance sheet. In connection with the acquisition of certain subsidiaries, current and former senior management of these businesses has retained an ownership interest. The Company is party to fair value put and call arrangements with respect to these interests. These put and call arrangements allow management of these businesses to require the Company to purchase these interests or allow the Company to acquire such interests at fair value, respectively. The put arrangements do not meet the definition of a derivative instrument as the put agreements do not provide for net settlement. No put and call arrangements were exercised during 2018, 2017 or 2016. These put arrangements are exercisable by the counter-party outside the control of the Company. Accordingly, to the extent that the fair value of these interests exceeds the value determined by normal noncontrolling interest accounting, the value of such interests is adjusted to fair value with a corresponding adjustment to additional paid-in capital. During the years ended December 31, 2018, 2017 and 2016, the Company recorded adjustments of $(2.5) million, $(0.1) million and $0.4 million, respectively, to (decrease) increase these interests to fair value. Fair value determinations require high levels of judgment and are based on various valuation techniques, including market comparables and discounted cash flow projections. At December 31, 2018, no redeemable noncontrolling interest remained outstanding. Certain Risks and Concentrations The Company’s business is subject to certain risks and concentrations including dependence on third-party technology providers, exposure to risks associated with online commerce security and credit card fraud. Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash and cash equivalents. Cash and cash equivalents are principally maintained with financial institutions that are not covered by deposit insurance. Recent Accounting Pronouncements Accounting Pronouncements adopted by the Company In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU No. 2014-09 superseded nearly all previous revenue recognition guidance. The Company adopted ASU No. 2014-09 as of January 1, 2018 using the modified retrospective transition method for open contracts as of the date of initial application. There is no cumulative impact to the Company’s retained earnings at January 1, 2018. In January 2016, the FASB issued ASU No. 2016-01, which updates certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Under ASU No. 2016-01, equity securities, other than those of our consolidated subsidiaries, will be measured at fair value with changes in fair value recognized in the statement of operations each reporting period. ASU No. 2016-01 is effective for reporting periods beginning after December 15, 2017. The Company’s adoption of ASU No. 2016-01 effective January 1, 2018 did not have a material effect on its consolidated financial statements. The adoption of ASU No. 2016-01 may increase the volatility of our results of operations as a result of the remeasurement of these investments. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which requires companies to explain the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. Therefore, amounts generally described as restricted cash or restricted cash equivalents are combined with unrestricted cash and cash equivalents when reconciling the beginning and end of period balances on the statement of cash flows. Additionally, when cash, cash equivalents, restricted cash, and restricted cash equivalents are presented within different captions on the balance sheet, a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet is required. ASU No. 2016-18 is effective for reporting periods beginning after December 15, 2017. The Company’s adoption of ASU No. 2016-18 effective January 1, 2018, on a retrospective basis, did not have a material effect on its consolidated financial statements. See “Note 14—Supplemental Cash Flow Information” for a reconciliation of cash, cash equivalents, and restricted cash included in the consolidated statement of cash flows. In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which largely aligns the measurement and classification guidance for share-based payments granted to non-employees with the guidance for share-based payments granted to employees. The new guidance supersedes Subtopic 505-50, Equity - Equity-Based payments to Nonemployees. ASU No. 2018-07 is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company adopted ASU No. 2018-07 effective April 1, 2018 and its adoption did not have a material effect on its consolidated financial statements. The effect of the adoption of ASU No. 2018-07 will be to minimize the volatility of expense related to stock-based awards to non-employees in the future. In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which clarifies the accounting for implementation costs in a cloud computing arrangement that is a services contract to follow the internal-use software guidance of ASC 350-40, Intangibles - Goodwill and Other, Internal-use Software. The provisions of ASU No. 2018-15 are effective for reporting periods beginning after December 15, 2019, including interim periods and early adoption is permitted, including adoption in any interim period. The provisions of ASU No. 2018-15 may be adopted prospectively to all implementation costs incurred after the date of adoption or retrospectively. The Company early adopted the provisions of ASU No. 2018-15 on October 1, 2018 prospectively and the adoption of this standard did not have material impact on its consolidated financial statements. Accounting Pronouncements not yet adopted by the Company In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes existing guidance on accounting for leases and generally requires all leases to be recognized in the statement of financial position. The provisions of ASU No. 2016-02 are effective for reporting periods beginning after December 15, 2018. The Company will adopt the new lease guidance effective January 1, 2019. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects to implement the transition method option provided by ASU No. 2018-11. The Company is not a lessor, has no capitalized leases, and does not expect to enter into any capitalized leases prior to the adoption of ASU No. 2016-02. Accordingly, the Company does not expect the amount or classification of rent expense in its statement of operations to be affected by the adoption of ASU No. 2016-02. The primary effect of the adoption of ASU No. 2016-02 will be the recognition of a right of use asset and related lease liability to reflect the Company's rights and obligations under its operating leases. The Company will also be required to provide the additional disclosures stipulated in ASU No. 2016-02. The adoption of ASU No. 2016-02 will not have an impact on the leverage calculation set forth in any of the agreements governing the outstanding debt of the Company, or our credit agreement, because in each circumstance, the leverage calculations are not affected by the lease liability that will be recorded upon adoption of the new standard. While the Company's evaluation of the impact of the adoption of ASU No. 2016-02 on its consolidated financial statements continues, outlined below is a summary of the status of the Company's progress:
Development of the selected software solution by the third-party vendor is ongoing. While significant progress has been made, certain key deliverables remain, which the Company expects to be delivered in March 2019. The Company’s ability to adopt ASU No. 2016-02 in an efficient and effective manner is contingent upon the delivery and testing of these remaining deliverables. The Company has been able to develop a preliminary estimate of the impact of the adoption of ASU No. 2016-02 through the use of the third-party software solution, supplemented by our user acceptance testing. This preliminary estimate is that a $55 million right-of-use asset and related lease liability will be recognized on the Company’s consolidated balance sheet upon adoption. The Company does not expect a material impact on its consolidated statement of operations or its consolidated statement of cash flows. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | NOTE 3—INCOME TAXES Match Group is included within IAC's tax group for purposes of federal and consolidated state income tax return filings. In all periods presented, current income tax provision and deferred income tax benefit have been computed for Match Group on an as if stand-alone, separate return basis. Match Group’s payments to IAC for its share of IAC’s consolidated federal and state tax return liabilities have been reflected within cash flows from operating activities in the accompanying consolidated statement of cash flows. U.S. and foreign earnings before income taxes are as follows:
The components of the provision (benefit) for income taxes are as follows:
For the year ended December 31, 2018, the current income tax payable was reduced by $94.7 million for excess tax deductions attributable to stock-based compensation and the related income tax benefit was recorded as a decrease to the current income tax provision. For the year ended December 31, 2017, the deferred tax asset for net operating losses (“NOLs”) was increased by $279.7 million for excess tax deductions attributable to stock-based compensation and the related income tax benefit was recorded as a component of the deferred income tax benefit. For the year ended December 31, 2016, the current income tax payable was reduced by $29.7 million for excess tax deductions attributable to stock-based compensation and the related income tax benefit was recorded as an increase to additional paid-in capital. The tax effects of cumulative temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below. The valuation allowance is primarily related to deferred tax assets for tax credits and net operating losses.
At December 31, 2018, the Company has federal and state net operating losses (“NOLs”) of $458.4 million and $169.8 million, respectively. If not utilized, $10.3 million of the federal NOLs can be carried forward indefinitely, and $448.1 million will expire at various times primarily between 2031 and 2037. The state NOLs will expire at various times primarily between 2032 and 2037. Federal and state NOLs of $434.3 million and $148.5 million, respectively, can be used against future taxable income without restriction and the remaining NOLs will be subject to limitations under Section 382 of the Internal Revenue Code, separate return limitations, and applicable state law. At December 31, 2018, the Company has foreign NOLs of $79.0 million available to offset future income. Of these foreign NOLs, $74.2 million can be carried forward indefinitely and $4.8 million will expire at various times between 2019 and 2028. During 2018, the Company recognized tax benefits related to NOLs of $6.7 million. At December 31, 2018, the Company has federal capital losses of $12.2 million. If not utilized, the capital losses will expire during 2021 and 2022. Utilization of capital losses will be limited to the Company’s ability to generate future capital gains. At December 31, 2018, the Company has tax credit carryforwards of $51.1 million. Of this amount, $29.0 million relates to foreign tax credits, $21.5 million relates to federal and state tax credits for research activities, and $0.6 million to various other credits. Of these credit carryforwards, $8.4 million can be carried forward indefinitely and $42.7 million will expire at various times primarily between 2021 and 2038. The Company regularly assesses the realizability of deferred tax assets considering all available evidence, including, to the extent applicable, the nature, frequency and severity of prior cumulative losses, forecasts of future taxable income, tax filing status, the duration of statutory carryforward periods, available tax planning and historical experience. During 2018, the Company’s valuation allowance increased by $22.7 million primarily due to an increase in foreign tax credits, and foreign interest deduction carryforwards. At December 31, 2018, the Company has a valuation allowance of $47.4 million related to the portion of credits, NOLs, and other items for which it is more likely than not that the tax benefit will not be realized. A reconciliation of the income tax provision (benefit) to the amounts computed by applying the statutory federal income tax rate to earnings before income taxes is shown as follows:
A reconciliation of the beginning and ending amount of unrecognized tax benefits, including penalties but excluding interest, is as follows:
The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision. At December 31, 2018 and 2017, the Company had accrued $1.9 million and $1.8 million, respectively, for the payment of interest. At December 31, 2018 and 2017, the Company had accrued $1.2 million and $1.5 million, respectively, for penalties. Match Group is routinely under audit by federal, state, local and foreign authorities in the area of income tax as a result of previously filed separate company tax returns and consolidated tax returns with IAC. These audits include questioning the timing and the amount of income and deductions and the allocation of income and deductions among various tax jurisdictions. The Internal Revenue Service (“IRS”) is currently auditing IAC’s federal income tax returns for the years ended December 31, 2010 through 2016, which includes the operations of Match Group. The statute of limitations for the years 2010 through 2015 have been extended to December 31, 2019. Various other jurisdictions are open to examination for tax years beginning with 2009. Income taxes payable include reserves considered sufficient to pay assessments that may result from examination of prior year tax returns. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustment, and which may not accurately anticipate actual outcomes. Although management currently believes changes to reserves from period to period and differences between amounts paid, if any, upon resolution of issues raised in audits and amounts previously provided will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. At December 31, 2018 and 2017, unrecognized tax benefits, including interest, were $37.6 million and $26.8 million, respectively. At December 31, 2018 and 2017, approximately $22.6 million and $17.6 million, respectively, were included in unrecognized tax benefits for tax positions included in IAC’s consolidated tax return filings. If unrecognized tax benefits at December 31, 2018 are subsequently recognized, $35.6 million, net of related deferred tax assets and interest, would reduce income tax expense. The comparable amount as of December 31, 2017 was $25.3 million. The Company believes that it is reasonably possible that its unrecognized tax benefits could decrease by approximately $16.8 million by December 31, 2019, primarily due to settlements and expirations of statutes of limitations. On December 22, 2017, the U.S. enacted the Tax Act, which subjected to U.S. taxation certain previously deferred earnings of foreign subsidiaries as of December 31, 2017 (“Transition Tax”) and implemented a number of changes that take effect on January 1, 2018, including but not limited to, a reduction of the U.S. federal corporate tax rate from 35% to 21% and a new minimum tax on GILTI earned by foreign subsidiaries. The Company was able to make a reasonable estimate of the Transition Tax and recorded a provisional transition tax expense in 2017. During 2018, the Company finalized this calculation, which resulted in a $3.2 million reduction in the Transition Tax. The net reduction in the Transition Tax was due primarily to the utilization of additional foreign tax credits, partially offset by additional taxable earnings and profits of our foreign subsidiaries based on recently issued IRS guidance. The adjustment of the Company’s provisional tax expense was reflected as a change in estimate in its results in the period in which the change in estimate is made in accordance with Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act. Despite the completion of the Company’s accounting for the Tax Act under SAB 118, many aspects of the law remain unclear and we expect ongoing guidance to be issued at both the federal and state levels. We will continue to monitor and assess the impact of any new developments. At December 31, 2018, the Company has $103.1 million in foreign cash that can be repatriated without any significant tax consequences. The Company has not provided for approximately $1.0 million of deferred taxes as the foreign cash earnings are indefinitely reinvested outside the U.S. The Company reassesses its intention to remit or permanently reinvest these cash earnings each reporting period; any required adjustment to the income tax provision would be reflected in the period that the Company changes this intention. |
DISCONTINUED OPERATIONS |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS | NOTE 4—DISCONTINUED OPERATIONS On March 31, 2017, Match Group sold its Non-dating business, which operated under the umbrella of The Princeton Review, to ST Unitas, a global education technology company. We recognized a loss on the sale of the business in the years ended December 31, 2018 and 2017 of $0.4 million (reflecting an adjustment to the loss on sale recorded in 2017), and $2.1 million, respectively, which is reported within discontinued operations. The key components of loss from discontinued operations for the years ended December 31, 2018, 2017 and 2016 consist of the following:
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GOODWILL AND INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | NOTE 5—GOODWILL AND INTANGIBLE ASSETS Goodwill and intangible assets, net, are as follows:
The following table presents the balance of goodwill, including the changes in the carrying value of goodwill, for the years ended December 31, 2018 and 2017:
Intangible assets with indefinite lives are trade names and trademarks acquired in various acquisitions. At December 31, 2018 and 2017, intangible assets with definite lives are as follows:
At December 31, 2018, amortization of intangible assets with definite lives is estimated to be as follows:
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FINANCIAL INSTRUMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL INSTRUMENTS | NOTE 6—FINANCIAL INSTRUMENTS Marketable Securities During the second quarter of 2016, the Company sold its marketable security in its entirety. Proceeds and gross realized gains from the sale of the available-for-sale marketable security were $11.7 million and $3.1 million, respectively, for the year ended December 31, 2016. Long-term investments At December 31, 2018, the carrying value of the Company’s investments in equity securities without readily determinable fair values totaled $9.1 million and at December 31, 2017, the carrying value of the Company’s cost method investments totaled $11.1 million, both of which are included in “Long-term investments” in the accompanying consolidated balance sheet. Equity securities without readily determinable fair values For all equity securities without readily determinable fair values as of December 31, 2018, the Company has elected the measurement alternative. As of December 31, 2018, under the measurement alternative election, the Company did not identify any fair value adjustments using observable price changes in orderly transactions or an identical or similar investment of the same issuer. During the year ended December 31, 2018, we recognized an impairment charge of $2.1 million, which is included in “Other income (expense), net” in the accompanying consolidated statement of operations. Cost method investments (prior to the adoption of ASU No. 2016-01) During the year ended December 31, 2017, we recognized an other-than-temporary impairment charge of $2.3 million related to certain cost method investments as a result of our assessment of the near-term prospects and financial condition of the investees. On October 23, 2017, a cost method investment with a carrying value of $51.1 million was sold for net proceeds of $60.2 million resulting in a pre-tax gain of $9.1 million, which is included in “Other income (expense), net” in the accompanying consolidated statement of operations. Fair Value Measurements The following tables present the Company’s financial instruments that are measured at fair value on a recurring basis:
The following table presents the changes in the Company’s financial instruments that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
Contingent consideration arrangements As of December 31, 2018, there is one contingent consideration arrangement, related to a business acquisition, for $2.0 million. This arrangement has been earned in full as of December 31, 2018 and will be paid by the Company in the first quarter of 2019. The current contingent consideration arrangement is based upon earnings performance. Contingent consideration arrangements related to other previous acquisitions were based upon earnings performance and/or operating metrics. The Company determined the fair values of contingent consideration arrangements using probability-weighted analyses to determine the amounts of the gross liability, and, for arrangements that are long-term in nature, applying a discount rate, that appropriately captures the risks associated with the obligation to determine the net amount reflected in the consolidated financial statements. The fair values of the current contingent consideration arrangement at both December 31, 2018 and 2017 reflect a discount rate of 12%. The fair value of the contingent consideration arrangements is sensitive to changes in the forecasts of earnings and changes in discount rates. The Company remeasures the fair value of the contingent consideration arrangements each reporting period, including the accretion of the discount, if applicable, and changes are recognized in “General and administrative expense” in the accompanying consolidated statement of operations. The contingent consideration arrangement liability at December 31, 2018 and 2017 includes a current portion of $2.0 million and $0.6 million, respectively, which is included in “Accrued expenses and other current liabilities” and a non-current portion of $2.0 million at December 31, 2017, which is included in “Other long-term liabilities” in the accompanying consolidated balance sheet. At December 31, 2018, there is no non-current portion of the contingent consideration liability. Financial instruments measured at fair value only for disclosure purposes The following table presents the carrying value and the fair value of financial instruments measured at fair value only for disclosure purposes.
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The fair value of long-term debt, net, excluding the revolving credit facility (the “Credit Facility”), is estimated using observable market prices or indices for similar liabilities, which are Level 2 inputs. We consider the Credit Facility, which has a variable interest rate, to have a fair value equal to its carrying value. |
LONG-TERM DEBT, NET |
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LONG-TERM DEBT, NET | NOTE 7—LONG-TERM DEBT, NET Long-term debt, net consists of:
Senior Notes: We issued the 5.00% Senior Notes on December 4, 2017. These notes were issued at 99.027% of par. The proceeds of $445.6 million, along with cash on hand, were used to redeem the $445.2 million of outstanding senior notes due in 2022 (the “6.75% Senior Notes”) and pay the related call premium. At any time prior to December 15, 2022, these notes may be redeemed at a redemption price equal to the sum of the principal amount, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes. Thereafter, these notes may be redeemed at the redemption prices set forth below, together with accrued and unpaid interest thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on December 15 of the years indicated below:
The 6.375% Senior Notes were issued on June 1, 2016. The proceeds of $400 million were used to prepay a portion of indebtedness outstanding under the Term Loan. At any time prior to June 1, 2019, these notes may be redeemed at a redemption price equal to the sum of the principal amount thereof, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes. Thereafter, these notes may be redeemed at the redemption prices set forth below, together with accrued and unpaid interest thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on June 1 of the years indicated below:
The 6.75% Senior Notes were redeemed on December 17, 2017 with proceeds from the 5.00% Senior Notes and cash on hand. The related call premium of $10.6 million is included in “Other (expense) income, net” in the consolidated financial statements. The indentures governing the 5.00% and 6.375% Senior Notes contain covenants that would limit the Company’s ability to pay dividends or to make distributions and repurchase or redeem Match Group stock in the event a default has occurred or Match Group’s leverage ratio (as defined in the indentures) exceeds 5.0 to 1.0. The 5.00% and 6.375% Senior Notes rate equally in right of payment. At December 31, 2018, there were no limitations pursuant thereto. There are additional covenants that limit the ability of the Company and its subsidiaries to, among other things, (i) incur indebtedness, make investments, or sell assets in the event the Company is not in compliance with certain ratios set forth in the indenture, and (ii) incur liens, enter into agreements restricting the ability of the Company’s subsidiaries to pay dividends, enter into transactions with affiliates and consolidate, merge or sell substantially all of their assets. Term Loan and Credit Facility: At both December 31, 2018 and 2017, the outstanding balance on the Term Loan was $425 million. The Term Loan bears interest at LIBOR plus 2.50% and has a LIBOR floor to 0.00%. The interest rate at December 31, 2018 and 2017 is 5.09% and 3.85%, respectively. Interest payments are due at least quarterly through the term of the loan. The Term Loan provides for additional annual principal payments as part of an excess cash flow sweep provision, the amount of which, if any, is governed by the secured net leverage ratio contained in the Credit Agreement. On December 7, 2018, the $500 million Credit Facility was amended to, among other things, modify the leverage ratio levels in the pricing grid used to calculate the applicable rate and extend its maturity to December 7, 2023. At December 31, 2018, there were outstanding borrowings of $260 million under the Credit Facility, bearing interest at LIBOR plus 1.50%, or 3.97%. At December 31, 2017, there was no outstanding borrowings under the Credit Facility. Borrowings under the Credit Facility bear interest, at the Company’s option, at a base rate or LIBOR, in each case plus an applicable margin, which is determined by reference to a pricing grid based on the Company’s consolidated net leverage ratio. The annual commitment fee on undrawn funds, based on the current leverage ratio, is 25 basis points and 30 basis points at December 31, 2018 and 2017, respectively. The terms of the Credit Facility require the Company to maintain a consolidated net leverage ratio of not more than 5.0 to 1.0 and a minimum interest coverage ratio of not less than 2.0 to 1.0 (in each case as defined in the agreement). The Credit Facility and Term Loan contain covenants that would limit our ability to pay dividends, make distributions or repurchase stock in the event the secured net leverage ratio exceeds 2.0 to 1.0, while the Term Loan remains outstanding and, thereafter, if the consolidated net leverage ratio exceeds 4.0 to 1.0, or in the event a default has occurred. There are additional covenants under the Credit Facility and the Term Loan that limit the ability of the Company and its subsidiaries to, among other things, incur indebtedness, pay dividends or make distributions. Obligations under the Credit Facility and Term Loan are unconditionally guaranteed by certain Match Group wholly-owned domestic subsidiaries and are secured by the stock of certain Match Group domestic and foreign subsidiaries. The Term Loan and outstanding borrowings, if any, under the Credit Facility rank equally with each other, and have priority over the 5.00% and 6.375% Senior Notes to the extent of the value of the assets securing the borrowings under the Credit Agreement. Long-term debt maturities:
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SHAREHOLDERS' EQUITY |
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Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 8—SHAREHOLDERS' EQUITY Description of Common Stock, Class B Convertible Common Stock and Class C Common Stock The rights of holders of Match Group common stock, Class B common stock and Class C common stock are identical, except for voting rights, conversion rights and dividend rights. Holders of common stock are entitled to one vote per share on all matters to be voted upon by the stockholders. Holders of Class B common stock are entitled to ten votes per share on all matters to be voted upon by stockholders. Holders of Class C common stock have no voting rights, except as otherwise required by the laws of the State of Delaware, in which case holders of Class C common stock are entitled to one one-hundredth (1/100) of a vote per share. Holders of the Company’s common stock, Class B common stock and Class C common stock do not have cumulative voting rights in the election of directors. Shares of Match Group’s Class B common stock are convertible into shares of our common stock at the option of the holder at any time on a share for share basis. Such conversion ratio will in all events be equitably preserved in the event of any recapitalization of Match Group by means of a stock dividend on, or a stock split or combination of, our outstanding common stock or Class B common stock, or in the event of any merger, consolidation or other reorganization of Match Group with another corporation. Upon the conversion of a share of our Class B common stock into a share of our common stock, the applicable share of Class B common stock will be retired and will not be subject to reissue. Shares of common stock and Class C common stock have no conversion rights. The holders of shares of Match Group common stock, Class B common stock and Class C common stock are entitled to receive, share for share, such dividends as may be declared by Match Group’s Board of Directors out of funds legally available therefor. In the event of a liquidation, dissolution or winding up, holders of the Company’s common stock, Class B common stock and Class C common stock are entitled to receive ratably the assets available for distribution to the stockholders after payment of all liabilities and accrued but unpaid dividends and liquidation preferences on any outstanding preferred stock. At December 31, 2018, IAC holds 209.9 million shares of our Class B common stock, representing 100% of our outstanding Class B common stock, and 15.8 million shares of our common stock, representing 23.1% of our outstanding common stock. IAC’s ownership interest is 81.1% and IAC holds 97.6% of the outstanding total voting power of the Company. In the event that Match Group issues or proposes to issue any shares of Match Group common stock, Class B common stock or Class C common stock (with certain limited exceptions), including shares issued upon the exercise, conversion or exchange of options, warrants and convertible securities, IAC will generally have a purchase right that permits it to purchase for fair market value, as defined in an investor rights agreement, up to such number of shares of the same class as the issued shares as would (i) enable IAC to maintain the same ownership interest in the Company that it had immediately prior to such issuance or proposed issuance, with respect to issuances of our voting capital stock, or (ii) enable IAC to maintain ownership of at least 80.1% of each class of the Company’s non-voting capital stock, with respect to issuances of our non-voting capital stock. Special Dividend On December 19, 2018, we paid a special dividend of $2.00 per share on Match Group common stock and Class B common stock, to stockholders of record as of the close of business on December 5, 2018, in the aggregate amount equal to $556.4 million, which was funded with cash on hand and borrowings under our revolving credit facility. Reserved Common Shares In connection with equity compensation plans, 55.1 million shares of Match Group common stock are reserved at December 31, 2018. Common Stock Repurchases During 2018, the Company repurchased 3.1 million shares of Match Group common stock for aggregate consideration, on a trade date basis, of $133.5 million. No repurchases were made during 2017 or 2016. In May 2017, Match Group’s Board of Directors authorized the repurchase of 6.0 million shares of Match Group common stock. At December 31, 2018, the Company has approximately 2.9 million shares remaining in its share repurchase authorization. |
ACCUMULATED OTHER COMPREHENSIVE LOSS |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | NOTE 9—ACCUMULATED OTHER COMPREHENSIVE LOSS The following tables present the components of accumulated other comprehensive loss and items reclassified out of accumulated other comprehensive loss into earnings:
At December 31, 2018, 2017 and 2016, there was no tax benefit or provision on the accumulated other comprehensive loss. |
EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | NOTE 10—EARNINGS PER SHARE The following table sets forth the computation of the basic and diluted earnings per share attributable to Match Group shareholders:
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STOCK-BASED COMPENSATION |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | NOTE 11—STOCK-BASED COMPENSATION The Company currently has two active stock and annual incentive plans, one which became effective in 2015 upon the completion of the IPO and another plan approved by shareholders in 2017. The 2015 plan replaced two historical plans that governed equity awards granted prior to the IPO. The 2015 plan covers stock options to acquire shares of Match Group common stock and RSUs granted pursuant to the historical plans and stock options and stock settled stock appreciation rights denominated in the equity of certain of our subsidiaries granted prior to the IPO, as well as provides for the future grant of these and other equity awards. The 2015 and 2017 plans authorize the Company to grant awards to its employees, officers, directors and consultants. At December 31, 2018, there were 28.1 million shares available for the future grant of equity awards under the 2015 and 2017 plans collectively. The 2015 and 2017 plans have a stated term of ten years and provide that the exercise price of stock options granted will not be less than the market price of the Company’s common stock on the grant date. Neither plan specifies grant dates or vesting schedules of awards as those determinations have been delegated to the Compensation and Human Resources Committee of Match Group’s Board of Directors (the “Committee”). Each grant agreement reflects the vesting schedule for that particular grant as determined by the Committee. Stock options granted subsequent to September 1, 2015 will generally vest in four equal annual installments over a four-year period. RSU awards outstanding generally vest over a three- or four-year period. Market-based awards outstanding generally vest over a two- to four-year period. Stock-based compensation expense recognized in the consolidated statement of operations includes expense related to the Company’s stock options and RSUs, performance-based stock options, market-based RSUs and PSUs for which vesting is considered probable, equity instruments denominated in shares of subsidiaries, and IAC denominated stock options, RSUs and market-based awards held by Match Group employees. The amount of stock-based compensation expense recognized is net of estimated forfeitures, as the expense recorded is based on awards that are ultimately expected to vest. The forfeiture rate is estimated at the grant date based on historical experience and revised, if necessary, in subsequent periods if actual forfeitures differ from the estimated rate. At December 31, 2018, there is $119.3 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards, which is expected to be recognized over a weighted average period of approximately 2.4 years. The total income tax benefit recognized in the accompanying consolidated statement of operations for the years ended December 31, 2018, 2017 and 2016 related to all stock-based compensation is $107.2 million, $295.1 million and $16.4 million, respectively. The increase in total income tax benefit recognized in the consolidated statement of operations during 2017 relative to 2016 is due to the adoption of ASU 2016-09, effective January 1, 2017, which required the associated recognition of excess tax benefits attributable to stock-based compensation to be included as a component of the current year provision for income taxes rather than recognized as an adjustment to additional paid-in capital. The aggregate income tax benefit recognized related solely to stock-based compensation for the years ended December 31, 2018, 2017, and 2016, including the portion recognized as a component of equity in 2016 is $103.3 million, $310.9 million, and $40.1 million, respectively. As the Company is currently in a NOL position there will be some delay in the timing of the realization of cash benefits of income tax deductions related to stock-based compensation because it will be dependent upon the amount and timing of future taxable income and the timing of estimated income tax payments. Adjustment for Special Dividend On November 6, 2018, the Board of Directors declared a special dividend of $2.00 per share on Match Group common stock and Class B common stock. See “Note 8—Shareholders' Equity” for additional information on the dividend. As required by our equity incentive plans, an adjustment was made to outstanding awards to prevent dilution of their value resulting from the special dividend. These adjustments did not result in incremental stock-based compensation expense as the anti-dilutive adjustments were required by our equity incentive plans. The adjustments to awards included increasing the number of outstanding stock options and RSUs, performance-based stock options, and market-based RSUs, as well as reducing the exercise prices of outstanding stock options. The impact of these adjustments is reflected in the disclosures below. Stock Options Stock options outstanding at December 31, 2018 and changes during the year ended December 31, 2018 are as follows:
The aggregate intrinsic value in the table above represents the difference between Match Group’s closing stock price on the last trading day of 2018 and the exercise price, multiplied by the number of in-the-money options that would have been exercised had all option holders exercised their options on December 31, 2018. The total intrinsic value of stock options exercised during the years ended December 31, 2018, 2017 and 2016 is $455.1 million, $533.8 million and $37.3 million, respectively. The following table summarizes the information about stock options outstanding and exercisable at December 31, 2018:
The fair value of stock option awards, with the exception of market-based awards, is estimated on the grant date using the Black-Scholes option pricing model. The Black-Scholes option pricing model incorporates various assumptions, including expected volatility and expected term. At December 31, 2018, the Company uses a blend of Match Group’s historical volatility and IAC’s historical volatility. The risk-free interest rates are based on U.S. Treasuries with comparable terms as the awards, in effect at the grant date. The expected term is based upon the combination of the initial vesting term and the historical exercise behavior of our employees after vest. The following are the weighted average assumptions used in the Black-Scholes option pricing model:
Approximately 0.6 million, 8.2 million and 8.7 million stock options were granted by the Company during the years ended December 31, 2018, 2017 and 2016, respectively. The weighted average fair value of stock options granted during the years ended December 31, 2018, 2017 and 2016 is $10.63, $5.67 and $2.98, respectively. Cash received from stock option exercises for the years ended December 31, 2018, 2017, and 2016 is less than $0.1 million, $59.4 million, and $39.4 million respectively. The decrease in cash received from stock option exercises in 2018 compared to prior years is due to substantially all options being net settled for the exercise price beginning in late 2017. Restricted Stock Units and Performance-based Stock Units RSUs and PSUs are awards in the form of phantom shares or units denominated in a hypothetical equivalent number of shares of Match Group common stock and with the value of each RSU and PSU equal to the fair value of Match Group common stock at the date of grant. Each RSU and PSU grant is subject to service-based vesting, where a specific period of continued employment must pass before an award vests. PSUs also include performance-based vesting, where certain performance targets set at the time of grant must be achieved before an award vests. For RSU grants, the expense is measured at the grant date as the fair value of Match Group common stock and expensed as stock-based compensation over the vesting term. For PSU grants, the expense is measured at the grant date as the fair value of Match Group common stock and expensed as stock-based compensation over the vesting term if the performance targets are considered probable of being achieved. All outstanding PSUs were forfeited during the year ended December 31, 2017 and no additional PSUs were granted in 2018. Unvested RSUs outstanding at December 31, 2018 and changes during the year ended December 31, 2018 are as follows:
The weighted average fair value of RSUs and PSUs granted during the years ended December 31, 2018, 2017, and 2016, based on market prices of Match Group’s common stock on the grant date, was $42.24, $19.21 and $12.65, respectively. The total fair value of RSUs that vested during the years ended December 31, 2018, 2017, and 2016 was $9.0 million, $6.7 million and $1.1 million, respectively. Market-based Awards During 2018, 2017, and 2016, the Company granted market-based awards to certain employees. The number of awards that ultimately vest for certain awards is dependent upon Match Group’s stock price and for other awards on the valuation of a wholly-owned business. The grant date fair value of each market-based award is estimated using a lattice model that incorporates a Monte Carlo simulation of Match Group’s stock price and, as necessary, the valuation of the subsidiary. Each market-based award is subject to service-based vesting, where a specific period of continued employment must pass before an award vests in addition to the market condition. Market-based awards outstanding at December 31, 2018 and changes during the year ended December 31, 2018 are as follows:
The weighted average fair value of market-based awards granted during the years ended December 31, 2018, 2017, and 2016, based on the valuation model, was $6.88, $7.50 and $1.77, respectively. The total fair value of market-based awards that vested during the years ended December 31, 2018, 2017, and 2016 was $4.9 million, $3.1 million and $0.1 million, respectively. Net Settlement of Awards We settle substantially all equity awards on a net basis. Assuming all equity awards outstanding on December 31, 2018 were net settled on that date, we would have issued 9.7 million common shares (of which 1.7 million are related to vested shares and 8.0 million are related to unvested shares) and, assuming a 50% withholding rate, would have remitted $416.2 million in cash for withholding taxes (of which $75.0 million is related to vested shares and $341.2 million is related to unvested shares). If we decided to issue a sufficient number of shares to cover the $416.2 million employee withholding tax obligation, 9.7 million additional shares would be issued by the Company. Converted Tinder Options In July 2017, the Company elected to convert all outstanding equity awards of its wholly-owned Tinder business into Match Group options at a value determined through a process involving two investment banks. These converted Match Group options are included in the option tables above. These former subsidiary denominated awards, when exercised, can be settled by Match Group issuing shares of its common stock equal in value to the intrinsic value of the award being settled, net of shares with a value equal to the withholding taxes due, which taxes are remitted by Match Group to the government on behalf of the employees or the employee can pay the exercise price and applicable withholding taxes and receive the number of Match Group shares equal to the number of options exercised. At the time of settlement, IAC has the option to issue its own shares directly to the award holders, in which case Match Group would in turn issue its shares to IAC as reimbursement. In either settlement scenario, the same number of Match Group shares would be issued. During the year ended December 31, 2017, we made cash payments totaling $272.5 million to purchase certain fully vested options. Equity Instruments Formerly Denominated in the Shares of Certain Subsidiaries The Company issued 1.7 million Match Group common shares, and paid $22.8 million of withholding taxes, to settle awards granted to current and former employees who exercised their subsidiary options during the year ended December 31, 2016. During 2014, the Company granted an equity award denominated in shares of a subsidiary of the Company to a non-employee, which was marked to market each reporting period. In the third quarter of 2016, the Company settled the vested portion of the award for cash of $13.4 million. In the third quarter of 2017, the award was modified and the Company settled the remaining portion of the award for cash of $33.9 million. IAC Denominated Stock Options There were no IAC stock options granted by IAC under its equity incentive plans to employees of Match Group during the years ended December 31, 2018 and 2017. During the year ended December 31, 2016, there were less than 0.1 million IAC stock options granted by IAC under its equity incentive plans to employees of Match Group. Approximately 0.2 million IAC stock options remain outstanding to employees of Match Group as of December 31, 2018. The fair value of each stock option award was estimated on the grant date using the Black–Scholes option pricing model. IAC stock options were granted with exercise prices at least equal to the fair value on the date of grant, vest ratably in annual installments over a four-year period and expire ten years from the date of grant. IAC Denominated RSUs and Market-based Awards During both the years ended December 31, 2018 and 2016, less than 0.1 million IAC RSUs and market-based awards were granted by IAC to employees of Match Group. There were no IAC RSUs or market-based awards granted by IAC to employees of Match Group during the year ended December 31, 2017. RSUs are awards in the form of phantom shares or units, denominated in a hypothetical equivalent number of shares of IAC common stock and with the value of each RSU equal to the fair value of IAC common stock at the date of grant. Each RSU grant is subject to service-based vesting, where a specific period of continued employment must pass before an award vests. The number of market-based awards that ultimately vest is dependent upon Match Group’s stock price. The grant date fair value of each market-based award is estimated using a lattice model that incorporates a Monte Carlo simulation of Match Group’s stock price. Each market-based award is subject to service-based vesting, where a specific period of continued employment must pass before an award vests. Some of the market-based awards contain performance targets set at the time of grant that must be achieved before an award vests. |
GEOGRAPHIC INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GEOGRAPHIC INFORMATION | NOTE 12—GEOGRAPHIC INFORMATION Revenue by geography is based on where the customer is located. Geographic information about revenue and long-lived assets is presented below:
The United States is the only country from which revenue is greater than 10 percent of total revenue.
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COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | NOTE 13—COMMITMENTS AND CONTINGENCIES Commitments The Company leases office space, data center facilities and equipment used in connection with its operations under various operating leases, many of which contain escalation clauses. The Company is also committed to pay a portion of the related operating expenses under certain lease agreements. These operating expenses are not included in the table below. Future minimum payments under operating lease agreements are as follows:
Expenses charged to operations under these agreements were $18.0 million, $16.0 million and $15.5 million for the years ended December 31, 2018, 2017 and 2016, respectively. See “Note 15—Related Party Transactions” for additional information related to related party transactions associated with operating leases. The Company also has funding commitments in the form of a purchase obligation and surety bonds. The purchase obligations due in less than one year are $27.2 million and the purchase obligations due between one and three years are $23.9 million for a total of $51.1 million in purchase obligations. The purchase obligations primarily relate to web hosting services with $20.0 million due for both the years ended December 31, 2019 and 2020. Letters of credit and surety bonds totaling $0.4 million expire within twelve months of December 31, 2018. Contingencies In the ordinary course of business, the Company is a party to various lawsuits. The Company establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has also identified certain other legal matters where we believe an unfavorable outcome is not probable and, therefore, no reserve is established. Although management currently believes that resolving claims against us, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. The Company also evaluates other contingent matters, including income and non-income tax contingencies, to assess the likelihood of an unfavorable outcome and estimated extent of potential loss. It is possible that an unfavorable outcome of one or more of these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company. See “Note 3—Income Taxes” for additional information related to income tax contingencies. Tinder Optionholder Litigation against IAC and Match Group On August 14, 2018, ten then-current and former employees of Match Group, LLC or Tinder, Inc. (“Tinder”), an operating business of Match Group, filed a lawsuit in New York state court against IAC and Match Group. See Sean Rad et al. v. IAC/InterActiveCorp and Match Group, Inc., No. 654038/2018 (Supreme Court, New York County). The complaint alleges that in 2017, the defendants: (i) wrongfully interfered with a contractually established process for the independent valuation of Tinder by certain investment banks, resulting in a substantial undervaluation of Tinder and a consequent underpayment to the plaintiffs upon exercise of their Tinder stock options, and (ii) then wrongfully merged Tinder into Match Group, thereby depriving one of the plaintiffs (Mr. Rad) of his contractual right to later valuations of Tinder on a stand-alone basis. The complaint asserts claims for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, interference with contractual relations (as against Match Group only), and interference with prospective economic advantage, and seeks compensatory damages in the amount of at least $2 billion, as well as punitive damages. On August 31, 2018, four plaintiffs who were still employed by Match Group filed a notice of discontinuance of their claims without prejudice, leaving the six former employees as the remaining plaintiffs. On October 9, 2018, the defendants filed a motion to dismiss the complaint on various grounds, including that the 2017 valuation of Tinder by the investment banks was an expert determination any challenge to which is both time-barred under applicable law and available only on narrow substantive grounds that the plaintiffs have not pleaded in their complaint. On December 17, 2018, Plaintiffs filed their opposition to the motion to dismiss. On January 15, 2019, the defendants filed their reply brief. A hearing on the motion is scheduled for March 6, 2019, and discovery in the case is proceeding. IAC and Match Group believe that the allegations in this lawsuit are without merit and will continue to defend vigorously against it. FTC Investigation of Certain Match.com Business Practices In March 2017, the Federal Trade Commission (“FTC”) requested information and documents in connection with a civil investigation regarding certain business practices of Match.com. In November 2018, the FTC proposed to resolve its potential claims relating to Match.com’s marketing, chargeback and online cancellation practices via a consent judgment mandating certain changes in the company’s business practices, as well as a payment in the amount of $60 million. Match Group believes that the FTC’s legal challenges to Match.com’s practices, policies, and procedures are without merit and is prepared to vigorously defend against them. |
SUPPLEMENTAL CASH FLOW INFORMATION |
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Supplemental Cash Flow Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION | NOTE 14—SUPPLEMENTAL CASH FLOW INFORMATION Supplemental Disclosure of Non-Cash Transactions: The Company recorded an acquisition-related contingent consideration liability of $0.2 million during the year ended December 31, 2016. There were no acquisition-related contingent consideration liabilities recorded for the years ended December 31, 2018 and 2017. See “Note 6—Financial Instruments” for additional information on contingent consideration arrangements. Supplemental Disclosure of Cash Flow Information:
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RELATED PARTY TRANSACTIONS |
12 Months Ended |
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Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15—RELATED PARTY TRANSACTIONS Relationship with IAC In connection with the IPO in 2015, the Company entered into certain agreements relating to our relationship with IAC. These agreements include a master transaction agreement; an investor rights agreement; a tax sharing agreement; a services agreement; an employee matters agreement and a subordinated loan agreement. For the years ended December 31, 2018, 2017 and 2016, the Company incurred $7.6 million, $9.9 million, and $11.8 million, respectively, pursuant to the services agreement. Included in these amounts are $5.2 million, $5.1 million and $4.3 million, respectively, for leasing of office space for certain of our businesses at properties owned by IAC. Additionally, the Company paid an IAC subsidiary $1.2 million for the sublease of space in a data center for the year ended December 31, 2016, and discontinued subleasing as of December 31, 2016. In December 2017, certain international subsidiaries of the Company agreed to sell net operating losses that were not expected to be utilized to an IAC subsidiary for $0.9 million. All amounts were paid in full by the Company at December 31, 2018, 2017 and 2016, respectively. Master Transaction Agreement The master transaction agreement sets forth the agreements between IAC and the Company regarding the principal transactions necessary to separate our business from IAC, as well as governs certain aspects of our relationship with IAC post IPO. Under the master transaction agreement, the Company agrees to assume all of the assets and liabilities related to its business and agrees to indemnify IAC against any losses arising out of any breach by the Company of the master transaction agreement or the other transaction related agreements described below. IAC also agrees to indemnify the Company against losses arising out of any breach by IAC of the master transaction agreement or any of the other transaction related agreements. Investor Rights Agreement Under the investor rights agreement, the Company provides IAC with (i) specified registration and other rights relating to its shares of our common stock and (ii) anti-dilution rights. See “Note 8—Shareholders' Equity” for additional information on the anti-dilution rights. Tax Sharing Agreement The tax sharing agreement governs the rights, responsibilities, and obligations of the Company and IAC with respect to tax liabilities and benefits, entitlements to refunds, preparation of tax returns, tax contests and other tax matters regarding U.S. federal, state, local and foreign income taxes. Under the tax sharing agreement, the Company is generally responsible and required to indemnify IAC for: (i) all taxes imposed with respect to any consolidated, combined or unitary tax return of IAC or one of its subsidiaries that includes the Company or any of its subsidiaries to the extent attributable to the Company or any of its subsidiaries, as determined under the tax sharing agreement, and (ii) all taxes imposed with respect to any of the Company’s subsidiaries’ consolidated, combined, unitary or separate tax returns. At December 31, 2017, the Company had tax receivables of $7.3 million due from IAC pursuant to the tax sharing agreement, which is included in “Other current assets” in the accompanying consolidated balance sheet. Refunds from IAC during 2018 and 2017 pursuant to this agreement were $7.0 million and $10.9 million, respectively. There were no outstanding receivables or payables pursuant to the tax sharing agreement as of December 31, 2018. Services Agreement The services agreement governs services that IAC provides to the Company including, among others: (i) assistance with certain legal, finance, internal audit, treasury, information technology support, insurance and tax matters, including assistance with certain public company reporting obligations; (ii) payroll processing services; (iii) tax compliance services; and (iv) such other services as to which IAC and the Company may agree. In addition, under the services agreement the Company provides IAC informational technology services and such other services as to which IAC and the Company may agree. The services agreement had an initial term of one year from the date of the IPO, and provides for automatic renewals for additional one-year periods, subject to IAC’s continued ownership of a majority of the combined voting power of the Company’s voting stock. Employee Matters Agreement The employee matters agreement covers a wide range of compensation and benefit issues related to the allocation of liabilities associated with: (i) employment or termination of employment, (ii) employee benefit plans and (iii) equity awards. Under the employee matters agreement, the Company’s employees participate in IAC’s U.S. health and welfare plans, 401(k) plan and flexible benefits plan and the Company reimburses IAC for the costs of such participation. In the event IAC no longer retains shares representing at least 80% of the aggregate voting power of shares entitled to vote in the election of the Company’s Board of Directors, Match Group will no longer participate in IAC’s employee benefit plans, but will establish its own employee benefit plans that will be substantially similar to the plans sponsored by IAC. The employee matters agreement also requires the Company to reimburse IAC for the cost of any IAC equity awards held by Match Group’s employees and former employees and that IAC may elect to receive payment either in cash or Company common stock. With respect to equity awards originally denominated in shares of the Company’s subsidiaries, IAC may require those awards to be settled in either shares of IAC’s common stock or in shares of the Company’s common stock and, to the extent shares of IAC common stock are issued in settlement, the Company will reimburse IAC for the cost of those shares by issuing to IAC additional shares of the Company’s common stock. During the years ended December 31, 2018, 2017 and 2016, 3.0 million, 11.9 million and 1.0 million shares, respectively, of Company common stock were issued to IAC pursuant to the employee matters agreement; 2.5 million, 11.3 million and 0.5 million, respectively, of which were issued as reimbursement for shares of IAC common stock issued in connection with the exercise and settlement of equity awards originally denominated in shares of a subsidiary of the Company; and 0.5 million, 0.6 million and 0.5 million, respectively, of which were issued as reimbursement for shares of IAC common stock issued in connection with the exercise and vesting of IAC equity awards held by Company employees. IAC Subordinated Loan Facility Prior to the IPO, the Company entered into an uncommitted subordinated loan facility with IAC (the “IAC Subordinated Loan Facility”), which allows the Company to make one or more requests to IAC to borrow funds. If IAC agrees to fulfill any such borrowing request, the related indebtedness will be incurred in accordance with the terms of the IAC Subordinated Loan Facility. Any indebtedness outstanding under the IAC Subordinated Loan Facility will be by its terms subordinated in right of payment to the obligations under the Match Group Credit Agreement and the Match Group Senior Notes, and will bear interest at the applicable rate set forth in the pricing grid in the Match Group Credit Agreement, which rate is based on the Company’s consolidated net leverage ratio at the time of borrowing, plus an additional amount to be agreed upon. The IAC Subordinated Loan Facility has a scheduled final maturity date of no earlier than 90 days after the maturity date of the Match Group Credit Facility or the latest maturity date in respect of any class of Term Loans outstanding under the Match Group Credit Agreement. At December 31, 2018, the Company had no indebtedness outstanding under the IAC Subordinated Loan Facility. Other Related Party Transactions On August 10, 2018, Gregory R. Blatt resigned as a director of the Company and entered into an advisory agreement with the Company, pursuant to which he will advise the Company on matters relating to its business, strategy and operations. The term of the advisory agreement will end on February 29, 2020. Pursuant to their terms, Mr. Blatt’s outstanding stock options will remain exercisable and continue to vest, as applicable, as long as he continues to perform services for the Company. |
BENEFIT PLANS |
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Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
BENEFIT PLANS | NOTE 16—BENEFIT PLANS Match Group employees are eligible to participate in a retirement savings plan sponsored by IAC in the United States, which is qualified under Section 401(k) of the Internal Revenue Code. Under the IAC/InterActiveCorp Retirement Savings Plan (the “Plan”), participating employees may contribute up to 50% of their pre-tax earnings, but not more than statutory limits. The employer match under the Plan is fifty cents for each dollar a participant contributes in this Plan, with a maximum contribution of 3% of a participant’s eligible earnings. Matching contributions under the Plan for the years ended December 31, 2018, 2017 and 2016 were $2.8 million, $2.2 million and $1.6 million, respectively. Matching contributions are invested in the same manner as each participant’s voluntary contributions in the investment options provided under the Plan. An investment option in the Plan is IAC common stock, but neither participant nor matching contributions are required to be invested in IAC common stock. The increase in matching contributions in 2018 and 2017 is due primarily to an increase in participation in the Plan due to increased headcount. Internationally, Match Group also has or participates in various benefit plans, primarily defined contribution plans. The Company’s contributions for these plans for the years ended December 31, 2018, 2017 and 2016 were $2.8 million, $2.2 million and $1.9 million, respectively. |
CONSOLIDATED FINANCIAL STATEMENT DETAILS |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONSOLIDATED FINANCIAL STATEMENT DETAILS | NOTE 17—CONSOLIDATED FINANCIAL STATEMENT DETAILS
Other income, net in 2018 includes $5.3 million in net foreign currency exchange gains due primarily to a strengthening of the U.S. dollar relative to the British Pound in the period and $4.9 million of interest income, partially offset by $2.1 million related to impairments of certain equity investments and $0.7 million related to a mark-to-market adjustment pertaining to a subsidiary denominated equity instrument. Other expense, net, in 2017 includes expenses of $15.4 million related to the redemption of our 6.75% Senior Notes and repricing of the Term Loan, $13.0 million related to a mark-to-market adjustment pertaining to a subsidiary denominated equity award held by a non-employee, $10.3 million in net foreign currency exchange losses, and a $2.3 million other-than-temporary impairment charge related to a cost method investment resulting from of our assessment of the near-term prospects and financial condition of the investee. These expenses were partially offset by a gain on the sale of a cost method investment of $9.1 million. Other income, net in 2016 includes $20.0 million in foreign currency exchange gains due to strengthening of the dollar relative to the British Pound and Euro and a $3.1 million gain related to the sale of a marketable equity security, partially offset by a non-cash charge of $12.1 million related to the write-off of a proportionate share of original issue discount and deferred financing costs associated with prepayments of $440 million of the Term Loan, $2.1 million of expense related to mark-to-market adjustment pertaining to a subsidiary denominated equity award held by a non-employee, $1.5 million repricing fees related to the Term Loan, and a $0.7 million other-than-temporary impairment charge related to a certain cost method investment. |
QUARTERLY RESULTS (UNAUDITED) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
QUARTERLY RESULTS (UNAUDITED) | NOTE 18—QUARTERLY RESULTS (UNAUDITED)
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SUBSEQUENT EVENTS (UNAUDITED) |
12 Months Ended |
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Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS (UNAUDITED) | NOTE 19—SUBSEQUENT EVENT (UNAUDITED) On February 15, 2019, we completed a private offering of $350 million aggregate principal amount of 5.625% Senior Notes due 2029. The proceeds from these notes were used to repay outstanding borrowings under our existing Credit Facility, to pay expenses associated with the offering, and for general corporate purposes. |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | Schedule II MATCH GROUP, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The Company prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. Intercompany transactions and accounts have been eliminated. For the purposes of these consolidated financial statements, income taxes have been computed for Match Group on an as if stand-alone, separate tax return basis. |
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Accounting for Investments in Equity Securities | Accounting for Investments in Equity Securities Investments in equity securities, other than those of our consolidated subsidiaries, are accounted for at fair value or under the measurement alternative of Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, upon its adoption on January 1, 2018, with any changes to fair value recognized within other income (expense), net each reporting period. Under the measurement alternative, equity investments without readily determinable fair values are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer and value is generally determined based on a market approach as of the transaction date. An investment will be considered identical or similar if it has identical or similar rights to the equity investments held by the Company. The Company reviews its equity securities for impairment each reporting period when there are qualitative factors or events that indicate possible impairment. Factors we consider in making this determination include negative change in industry and market conditions, financial performance, business prospects, and other relevant events and factors. When indicators of impairment exist, the Company prepares quantitative assessments of the fair value of our equity securities, which require judgment and the use of estimates. When our assessment indicates that the fair value of the security is below the carrying value, the Company writes down the security to its fair value and records the corresponding charge within other income (expense), net. See “Accounting Pronouncements adopted by the Company” below for further information. |
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Accounting Estimates | Accounting Estimates Management of the Company is required to make certain estimates, judgments and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates, judgments and assumptions impact the reported amounts of assets, liabilities, revenue and expenses and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. On an ongoing basis, the Company evaluates its estimates and judgments, including those related to: the recoverability of goodwill and indefinite-lived intangible assets; the useful lives and recoverability of definite-lived intangible assets and property and equipment; the fair values of equity securities without readily determinable fair values; the carrying value of accounts receivable, including the determination of the allowance for doubtful accounts; the determination of revenue reserves; the fair value of acquisition-related contingent consideration arrangements; unrecognized tax benefits; the valuation allowance for deferred income tax assets; and the fair value of and forfeiture rates for stock-based awards, among others. The Company bases its estimates and judgments on historical experience, its forecasts and budgets and other factors that the Company considers relevant. |
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Revenue Recognition | Revenue Recognition The Company adopted the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, effective January 1, 2018 using the modified retrospective transition method for open contracts as of the date of initial application. See "Accounting Pronouncements adopted by the Company" below for further information. The Company accounts for a contract with a customer when it has approval and commitment from all parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the promised services is transferred to our customers, and in an amount that reflects the consideration the Company is contractually due in exchange for those services. The Company’s revenue is primarily derived directly from users in the form of recurring subscriptions. Subscription revenue is presented net of credits and credit card chargebacks. Subscribers pay in advance, primarily by credit card or through mobile app stores, and, subject to certain conditions identified in our terms and conditions, generally all purchases are final and nonrefundable. Revenue is initially deferred and is recognized using the straight-line method over the term of the applicable subscription period, which generally ranges from one to six months. Revenue is also earned from online advertising, the purchase of à la carte features and offline events. Online advertising revenue is recognized when an advertisement is displayed. Revenue from the purchase of à la carte features is recognized based on usage. Revenue associated with offline events is recognized when each event occurs. As permitted under the practical expedient available under ASU No. 2014-09, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which the Company recognizes revenue at the amount which we have the right to invoice for services performed. Transaction Price The objective of determining the transaction price is to estimate the amount of consideration the Company is due in exchange for services, including amounts that are variable. The Company determines the total transaction price, including an estimate of any variable consideration, at contract inception and reassesses this estimate each reporting period. The Company excludes from the measurement of transaction price all taxes assessed by governmental authorities that are both (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers. Accordingly, such tax amounts are not included as a component of revenue or cost of revenue. For contracts that have an original duration of one year or less, the Company uses the practical expedient available under ASU No. 2014-09 applicable to such contracts and does not consider the time value of money. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company has determined that certain costs, primarily mobile app store fees, meet the requirements to be capitalized as a cost of obtaining a contract. The Company recognizes an asset for these costs if we expect to recover those costs. Mobile app store fees are amortized over the period of contract performance. Specifically, the Company capitalizes and amortizes mobile app store fees over the term of the applicable subscription. During the year ended December 31, 2018, the Company recognized expense of $284.7 million related to the amortization of these costs. The contract asset balance at December 31, 2018 related to costs to obtain a contract is $29.2 million and included in “Other current assets” in the accompanying consolidated balance sheet. Accounts Receivables, net of allowance for doubtful accounts and revenue reserves Accounts receivable include amounts billed and currently due from customers. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of accounts receivable that will not be collected. The allowance for doubtful accounts is based upon a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history, and the specific customer’s ability to pay its obligation. The time between the Company issuance of an invoice and payment due date is not significant; customer payments that are not collected in advance of the transfer of promised services are generally due no later than 30 days from invoice date. The Company also maintains allowances to reserve for potential credits issued to consumers or other revenue adjustments. The amounts of these reserves are based primarily upon historical experience. Deferred Revenue Deferred revenue consists of advance payments that are received or are contractually due in advance of the Company's performance. The Company’s deferred revenue is reported on a contract by contract basis at the end of each reporting period. The Company classifies deferred revenue as current when the term of the applicable subscription period or expected completion of our performance obligation is one year or less. The deferred revenue balance as of January 1, 2018 was $198.3 million. During the year ended December 31, 2018, the Company recognized $198.3 million of revenue that was included in the deferred revenue balance as of January 1, 2018. The current deferred revenue balance at December 31, 2018 is $209.9 million. At December 31, 2018, there is no non-current portion of deferred revenue. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and short-term investments, with maturities of less than 91 days from the date of purchase. Domestically, cash equivalents include AAA rated government money market funds. Internationally, cash equivalents include money market funds. |
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Property and Equipment | Property and Equipment Property and equipment, including significant improvements, are recorded at cost. Repairs and maintenance costs are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets or, in the case of leasehold improvements, the lease term, if shorter.
The Company capitalizes certain internal use software costs including external direct costs utilized in developing or obtaining the software and compensation for personnel directly associated with the development of the software. Capitalization of such costs begins when the preliminary project stage is complete and ceases when the project is substantially complete and ready for its intended purpose. |
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Business Combinations | Business Combinations The purchase price of each acquisition is attributed to the assets acquired and liabilities assumed based on their fair values at the date of acquisition, including identifiable intangible assets that either arise from a contractual or legal right or are separable from goodwill. The fair value of these intangible assets is based on valuations that use information and assumptions provided by management. The excess purchase price over the net tangible and identifiable intangible assets is recorded as goodwill and is assigned to the reporting unit that is expected to benefit from the combination as of the acquisition date. In connection with certain business combinations, the Company has entered into contingent consideration arrangements that are determined to be part of the purchase price. Each of these arrangements is initially recorded at its fair value at the time of the acquisition and reflected at current fair value for each subsequent reporting period thereafter until settled. The contingent consideration arrangements are generally based upon earnings performance and/or operating metrics. The Company determines the fair value of the contingent consideration arrangements using probability-weighted analyses to determine the amounts of the gross liability, and, if the arrangement is long-term in nature, applying a discount rate that appropriately captures the risk associated with the obligation to determine the net amount reflected in the consolidated financial statements. Significant changes in forecasted earnings or operating metrics would result in a significantly higher or lower fair value measurement. The changes in the remeasured fair value of the contingent consideration arrangements during each reporting period, including the accretion of the discount, if applicable, are recognized in “General and administrative expense” in the accompanying consolidated statement of operations. See “Note 6—Financial Instruments” for a discussion of contingent consideration arrangements. |
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Goodwill and Indefinite-Lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets The Company assesses goodwill on its one reporting unit and indefinite-lived intangible assets for impairment annually as of October 1, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or the fair value of an indefinite-lived intangible asset below its carrying value. When the Company elects to perform a qualitative assessment and concludes it is not more likely than not that the fair value of the reporting unit is less than its carrying value, no further assessment of that reporting unit's goodwill is necessary; otherwise, a quantitative assessment is performed and the fair value of the reporting unit is determined. If the carrying value of the reporting unit exceeds its fair value an impairment loss equal to the excess is recorded. For the Company's annual goodwill test at October 1, 2018, a qualitative assessment of goodwill was performed because the Company concluded it was more likely than not that the fair value of its single reporting unit was in excess of its carrying value. The primary factors that the Company considered in its qualitative assessment were that its market capitalization of $15.7 billion exceeded its carrying value by approximately $15.1 billion and the Company’s strong operating performance. A qualitative assessment was also performed for 2017 and the Company concluded it was more likely than not that the fair value of the reporting unit was in excess of its carrying value. The Company foregoes a qualitative assessment and tests the goodwill for impairment when it concludes that it is more likely than not that there may be an impairment. If needed, the annual or interim quantitative test of the recovery of goodwill involves a comparison of the estimated fair value of the Company's reporting unit to its carrying value, including goodwill. If the estimated fair value of the reporting unit exceeds its carrying value, goodwill of the reporting unit is not impaired. If the carrying value of the reporting unit exceeds its estimated fair value, an impairment loss equal to the excess is recorded. While the Company has the option to qualitatively assess whether it is more likely than not that the fair value of its indefinite-lived intangible assets is less than their carrying values, the Company’s policy is to determine the fair value of each of its indefinite-lived intangible assets annually as of October 1. The Company determines the fair value of its indefinite-lived intangible assets using an avoided royalty DCF valuation analyses. Significant judgments inherent in these analyses include the selection of appropriate royalty and discount rates and estimating the amount and timing of expected future cash flows. The discount rates used in the DCF analyses are intended to reflect the risks inherent in the expected future cash flows generated by the respective intangible assets. The royalty rates used in the DCF analyses are based upon an estimate of the royalty rates that a market participant would pay to license the Company’s trade names and trademarks. Assumptions used in the avoided royalty DCF analyses, including the discount rate and royalty rate, are assessed annually based on the actual and projected cash flows related to the asset, as well as macroeconomic and industry specific factors. |
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Long-Lived Assets and Intangible Assets with Definite Lives | Long-Lived Assets and Intangible Assets with Definite Lives Long-lived assets, which consist of property and equipment and intangible assets with definite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is deemed not to be recoverable, an impairment loss is recorded equal to the amount by which the carrying value of the long-lived asset exceeds its fair value. Amortization of definite-lived intangible assets is computed either on a straight-line basis or based on the pattern in which the economic benefits of the asset will be realized. |
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Fair Value Measurements | Fair Value Measurements The Company categorizes its financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are:
The Company’s non-financial assets, such as goodwill, intangible assets, and property and equipment, are adjusted to fair value only when an impairment is recognized. The Company’s financial assets, consisting of equity securities without readily determinable fair values, are adjusted to fair value when observable price changes are identified or an impairment is recognized. Such fair value measurements are based predominantly on Level 3 inputs. |
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Advertising Costs | Advertising Costs Advertising costs are expensed in the period incurred (when the advertisement first runs for production costs that are initially capitalized) and represent online marketing, including fees paid to search engines and social media sites, offline marketing, which is primarily television advertising, and partner-related payments to those who direct traffic to our websites. |
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Legal Costs | Legal Costs Legal costs are expensed as incurred. |
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Income Taxes | Income Taxes Match Group is included within IAC’s tax group for purposes of federal and consolidated state income tax return filings. In all periods presented, current income tax provision and deferred income tax benefit have been computed for Match Group on an as if stand-alone, separate return basis. The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided on deferred tax assets if it is determined that it is more likely than not that the deferred tax asset will not be realized. The Company records interest, net of any applicable related income tax benefit, on potential income tax contingencies as a component of income tax expense. The Company evaluates and accounts for uncertain tax positions using a two-step approach. Recognition (step one) occurs when the Company concludes that a tax position, based on its technical merits, is more-likely-than-not to be sustainable upon examination. Measurement (step two) determines the amount of the benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. De-recognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act imposes a new minimum tax on global intangible low taxed income (“GILTI”) earned by foreign subsidiaries beginning in 2018. The FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. The Company elects to recognize the tax on GILTI as a period expense in the period the tax is incurred. |
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Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net earnings attributable to Match Group shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vested resulting in the issuance of common stock that could share in the earnings of the Company. |
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Foreign Currency Translation and Transaction Gains and Losses | Foreign Currency Translation and Transaction Gains and Losses The financial position and operating results of foreign entities whose primary economic environment is based on their local currency are consolidated using the local currency as the functional currency. These local currency assets and liabilities are translated at the rates of exchange as of the balance sheet date, and local currency revenue and expenses of these operations are translated at average rates of exchange during the period. Translation gains and losses are included in accumulated other comprehensive income as a component of shareholders’ equity. Transaction gains and losses resulting from assets and liabilities denominated in a currency other than the functional currency are included in the consolidated statement of operations as a component of “Other income (expense), net.” Translation gains and losses relating to foreign entities that are liquidated or substantially liquidated are reclassified out of accumulated other comprehensive loss into earnings. |
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Stock-Based Compensation | Stock-Based Compensation Stock-based compensation is measured at the grant date based on the fair value of the award and is generally expensed over the requisite service period. |
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Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests Noncontrolling interests in the consolidated subsidiaries of the Company are ordinarily reported on the consolidated balance sheet within shareholders’ equity, separately from the Company’s equity. However, securities that are redeemable at the option of the holder and not solely within the control of the issuer must be classified outside of shareholders’ equity. Accordingly, all noncontrolling interests that are redeemable at the option of the holder are presented outside of shareholders’ equity in the accompanying consolidated balance sheet. In connection with the acquisition of certain subsidiaries, current and former senior management of these businesses has retained an ownership interest. The Company is party to fair value put and call arrangements with respect to these interests. These put and call arrangements allow management of these businesses to require the Company to purchase these interests or allow the Company to acquire such interests at fair value, respectively. The put arrangements do not meet the definition of a derivative instrument as the put agreements do not provide for net settlement. |
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Certain Risks and Concentrations | Certain Risks and Concentrations The Company’s business is subject to certain risks and concentrations including dependence on third-party technology providers, exposure to risks associated with online commerce security and credit card fraud. Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash and cash equivalents. Cash and cash equivalents are principally maintained with financial institutions that are not covered by deposit insurance. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements adopted by the Company In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU No. 2014-09 superseded nearly all previous revenue recognition guidance. The Company adopted ASU No. 2014-09 as of January 1, 2018 using the modified retrospective transition method for open contracts as of the date of initial application. There is no cumulative impact to the Company’s retained earnings at January 1, 2018. In January 2016, the FASB issued ASU No. 2016-01, which updates certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Under ASU No. 2016-01, equity securities, other than those of our consolidated subsidiaries, will be measured at fair value with changes in fair value recognized in the statement of operations each reporting period. ASU No. 2016-01 is effective for reporting periods beginning after December 15, 2017. The Company’s adoption of ASU No. 2016-01 effective January 1, 2018 did not have a material effect on its consolidated financial statements. The adoption of ASU No. 2016-01 may increase the volatility of our results of operations as a result of the remeasurement of these investments. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which requires companies to explain the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. Therefore, amounts generally described as restricted cash or restricted cash equivalents are combined with unrestricted cash and cash equivalents when reconciling the beginning and end of period balances on the statement of cash flows. Additionally, when cash, cash equivalents, restricted cash, and restricted cash equivalents are presented within different captions on the balance sheet, a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet is required. ASU No. 2016-18 is effective for reporting periods beginning after December 15, 2017. The Company’s adoption of ASU No. 2016-18 effective January 1, 2018, on a retrospective basis, did not have a material effect on its consolidated financial statements. See “Note 14—Supplemental Cash Flow Information” for a reconciliation of cash, cash equivalents, and restricted cash included in the consolidated statement of cash flows. In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which largely aligns the measurement and classification guidance for share-based payments granted to non-employees with the guidance for share-based payments granted to employees. The new guidance supersedes Subtopic 505-50, Equity - Equity-Based payments to Nonemployees. ASU No. 2018-07 is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company adopted ASU No. 2018-07 effective April 1, 2018 and its adoption did not have a material effect on its consolidated financial statements. The effect of the adoption of ASU No. 2018-07 will be to minimize the volatility of expense related to stock-based awards to non-employees in the future. In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which clarifies the accounting for implementation costs in a cloud computing arrangement that is a services contract to follow the internal-use software guidance of ASC 350-40, Intangibles - Goodwill and Other, Internal-use Software. The provisions of ASU No. 2018-15 are effective for reporting periods beginning after December 15, 2019, including interim periods and early adoption is permitted, including adoption in any interim period. The provisions of ASU No. 2018-15 may be adopted prospectively to all implementation costs incurred after the date of adoption or retrospectively. The Company early adopted the provisions of ASU No. 2018-15 on October 1, 2018 prospectively and the adoption of this standard did not have material impact on its consolidated financial statements. Accounting Pronouncements not yet adopted by the Company In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes existing guidance on accounting for leases and generally requires all leases to be recognized in the statement of financial position. The provisions of ASU No. 2016-02 are effective for reporting periods beginning after December 15, 2018. The Company will adopt the new lease guidance effective January 1, 2019. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects to implement the transition method option provided by ASU No. 2018-11. The Company is not a lessor, has no capitalized leases, and does not expect to enter into any capitalized leases prior to the adoption of ASU No. 2016-02. Accordingly, the Company does not expect the amount or classification of rent expense in its statement of operations to be affected by the adoption of ASU No. 2016-02. The primary effect of the adoption of ASU No. 2016-02 will be the recognition of a right of use asset and related lease liability to reflect the Company's rights and obligations under its operating leases. The Company will also be required to provide the additional disclosures stipulated in ASU No. 2016-02. The adoption of ASU No. 2016-02 will not have an impact on the leverage calculation set forth in any of the agreements governing the outstanding debt of the Company, or our credit agreement, because in each circumstance, the leverage calculations are not affected by the lease liability that will be recorded upon adoption of the new standard. While the Company's evaluation of the impact of the adoption of ASU No. 2016-02 on its consolidated financial statements continues, outlined below is a summary of the status of the Company's progress:
Development of the selected software solution by the third-party vendor is ongoing. While significant progress has been made, certain key deliverables remain, which the Company expects to be delivered in March 2019. The Company’s ability to adopt ASU No. 2016-02 in an efficient and effective manner is contingent upon the delivery and testing of these remaining deliverables. The Company has been able to develop a preliminary estimate of the impact of the adoption of ASU No. 2016-02 through the use of the third-party software solution, supplemented by our user acceptance testing. This preliminary estimate is that a $55 million right-of-use asset and related lease liability will be recognized on the Company’s consolidated balance sheet upon adoption. The Company does not expect a material impact on its consolidated statement of operations or its consolidated statement of cash flows. |
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Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue | The following table presents disaggregated revenue:
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Schedule of Estimated Useful Lives |
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INCOME TAXES (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income Before Income Taxes and Non-controlling Interest | U.S. and foreign earnings before income taxes are as follows:
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Schedule of Components of Income Tax Expense (Benefit) | The components of the provision (benefit) for income taxes are as follows:
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Schedule of Deferred Tax Assets and Liabilities | The tax effects of cumulative temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below. The valuation allowance is primarily related to deferred tax assets for tax credits and net operating losses.
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Schedule of Income Tax Rate Reconciliation | A reconciliation of the income tax provision (benefit) to the amounts computed by applying the statutory federal income tax rate to earnings before income taxes is shown as follows:
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Schedule of Income Tax Contingencies | A reconciliation of the beginning and ending amount of unrecognized tax benefits, including penalties but excluding interest, is as follows:
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DISCONTINUED OPERATIONS (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Loss from Discontinued Operations | The key components of loss from discontinued operations for the years ended December 31, 2018, 2017 and 2016 consist of the following:
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill and Intangible Assets, Net | Goodwill and intangible assets, net, are as follows:
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Schedule of Goodwill by Reporting Unit | The following table presents the balance of goodwill, including the changes in the carrying value of goodwill, for the years ended December 31, 2018 and 2017:
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Schedule of Intangible Assets with Definite Lives | At December 31, 2018 and 2017, intangible assets with definite lives are as follows:
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Schedule of Expected Amortization of Intangible Assets | At December 31, 2018, amortization of intangible assets with definite lives is estimated to be as follows:
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FINANCIAL INSTRUMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis | The following tables present the Company’s financial instruments that are measured at fair value on a recurring basis:
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Schedule of Change in Level 3 Financial Instruments Measured at Fair Value on a Recurring Basis | The following table presents the changes in the Company’s financial instruments that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
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Schedule of Carrying Value and Fair Value of Financial Instruments | The following table presents the carrying value and the fair value of financial instruments measured at fair value only for disclosure purposes.
______________________
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LONG-TERM DEBT, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Long-term debt, net consists of:
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Schedule of Debt Instrument Redemption |
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Schedule of Long-term Debt Maturities | Long-term debt maturities:
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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Loss | The following tables present the components of accumulated other comprehensive loss and items reclassified out of accumulated other comprehensive loss into earnings:
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EARNINGS PER SHARE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Earnings per Share | The following table sets forth the computation of the basic and diluted earnings per share attributable to Match Group shareholders:
______________________
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STOCK-BASED COMPENSATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Outstanding Stock Options | Stock options outstanding at December 31, 2018 and changes during the year ended December 31, 2018 are as follows:
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Schedule of Stock Options Outstanding and Exercisable | The following table summarizes the information about stock options outstanding and exercisable at December 31, 2018:
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Schedule of Weighted-Average Assumptions | The following are the weighted average assumptions used in the Black-Scholes option pricing model:
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Schedule of Restricted Stock Units and Performance Stock Units | Unvested RSUs outstanding at December 31, 2018 and changes during the year ended December 31, 2018 are as follows:
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Schedule of Market-Based Awards | Market-based awards outstanding at December 31, 2018 and changes during the year ended December 31, 2018 are as follows:
|
GEOGRAPHIC INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue and Long-lived Assets | Revenue by geography is based on where the customer is located. Geographic information about revenue and long-lived assets is presented below:
The United States is the only country from which revenue is greater than 10 percent of total revenue.
|
COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Payments under Operating Lease Agreements | Future minimum payments under operating lease agreements are as follows:
|
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Supplemental Cash Flow Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Disclosure of Cash Flow Information | Supplemental Disclosure of Cash Flow Information:
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CONSOLIDATED FINANCIAL STATEMENT DETAILS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Current Assets |
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Schedule of Property and Equipment, Net |
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Schedule of Accrued Expenses and Other Current Liabilities |
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Schedule of Other Income (Expense), Net |
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QUARTERLY RESULTS (UNAUDITED) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Data |
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ORGANIZATION - Narrative (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018
segment
language
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of languages where products are available | language | 40 |
Number of operating segments | segment | 1 |
Match Group | IAC | |
Class of Stock [Line Items] | |
Proportion of ownership after IPO (as a percent) | 81.10% |
Proportion of voting rights held after IPO (as a percent) | 97.60% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated Useful Lives (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Computer Equipment and Capitalized Software | Minimum | |
Property and Equipment | |
Estimated useful lives (in years) | 2 years |
Computer Equipment and Capitalized Software | Maximum | |
Property and Equipment | |
Estimated useful lives (in years) | 3 years |
Furniture and Other Equipment | Minimum | |
Property and Equipment | |
Estimated useful lives (in years) | 5 years |
Furniture and Other Equipment | Maximum | |
Property and Equipment | |
Estimated useful lives (in years) | 5 years |
Leasehold Improvements | Minimum | |
Property and Equipment | |
Estimated useful lives (in years) | 6 years |
Leasehold Improvements | Maximum | |
Property and Equipment | |
Estimated useful lives (in years) | 10 years |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Disaggregation of Revenue [Line Items] | |||
Total Direct Revenue | $ 1,729,850 | $ 1,330,661 | $ 1,118,110 |
Tinder | |||
Disaggregation of Revenue [Line Items] | |||
Total Direct Revenue | 805,316 | 403,216 | 168,522 |
Other brands | |||
Disaggregation of Revenue [Line Items] | |||
Total Direct Revenue | 871,855 | 878,033 | 898,842 |
Direct Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total Direct Revenue | 1,677,171 | 1,281,249 | 1,067,364 |
Indirect Revenue (principally advertising revenue) | |||
Disaggregation of Revenue [Line Items] | |||
Total Direct Revenue | 52,679 | 49,412 | 50,746 |
North America | Direct Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total Direct Revenue | 902,478 | 741,334 | 673,944 |
International | Direct Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total Direct Revenue | $ 774,693 | $ 539,915 | $ 393,420 |
INCOME TAXES - Income before Income Taxes and Non-Controlling Interest and Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
U.S. | $ 392,798 | $ 143,286 | $ 109,457 |
Foreign | 94,844 | 108,839 | 131,759 |
Earnings from continuing operations, before tax | 487,642 | 252,125 | $ 241,216 |
Deferred tax assets: | |||
Net operating loss carryforwards | 127,630 | 143,474 | |
Tax credit carryforwards | 43,501 | 6,629 | |
Stock-based compensation | 12,684 | 13,236 | |
Other | 26,770 | 12,423 | |
Total deferred tax assets | 210,585 | 175,762 | |
Less valuation allowance | (47,448) | (24,795) | |
Net deferred tax assets | 163,137 | 150,967 | |
Deferred tax liabilities: | |||
Intangible assets | (45,363) | (52,838) | |
Fixed assets | (2,686) | (3,164) | |
Other | (915) | (244) | |
Total deferred tax liabilities | (48,964) | (56,246) | |
Net deferred tax assets | $ 114,173 | $ 94,721 |
INCOME TAXES - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Current income tax provision: | ||||
Federal | $ (688) | $ (11,533) | $ 44,782 | |
State | 341 | (512) | 4,427 | |
Foreign | 34,659 | 26,444 | 23,964 | |
Current income tax provision | 34,312 | 14,399 | 73,173 | |
Deferred income tax benefit: | ||||
Federal | (11,158) | (102,337) | (2,119) | |
State | (1,846) | (15,731) | (280) | |
Foreign | (6,635) | (183) | (7,899) | |
Deferred income tax benefit | (19,639) | (118,251) | (10,298) | |
Income tax (benefit) provision | $ (226,200) | $ 14,673 | $ (103,852) | $ 62,875 |
INCOME TAXES - Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax provision at the federal statutory rate | $ 102,405 | $ 88,244 | $ 84,425 | |
State income taxes, net of effect of federal tax benefit | 7,742 | 2,471 | 2,804 | |
Foreign income taxed at a different statutory rate | 13,129 | (15,014) | (13,761) | |
Foreign rate change | 278 | (1,523) | (4,454) | |
Transition tax | (3,178) | 23,748 | 0 | |
Deferred tax adjustment for enacted changes in tax laws and rates | (142) | 68,594 | 0 | |
Equity compensation | (92,140) | (278,343) | 3,247 | |
Non-taxable foreign currency exchange gains and losses | (2,086) | 6,231 | (6,837) | |
Other, net | (11,335) | 1,740 | (2,549) | |
Income tax (benefit) provision | $ (226,200) | $ 14,673 | $ (103,852) | $ 62,875 |
INCOME TAXES - Income Tax Contingencies (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Reconciliation of beginning and ending amount of unrecognized tax benefits, excluding interest | |||
Balance at beginning of period | $ 25,063 | $ 25,913 | $ 24,908 |
Additions based on tax positions related to the current year | 8,589 | 697 | 1,706 |
Additions for tax positions of prior years | 3,901 | 1,104 | 1,414 |
Reductions for tax positions of prior years | (134) | (1,233) | (783) |
Settlements | (258) | ||
Expiration of applicable statute of limitations | (1,740) | (1,418) | (1,074) |
Balance at end of period | $ 35,679 | $ 25,063 | $ 25,913 |
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Non-dating | Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Loss on sale of business | $ 0.4 | $ 2.1 |
DISCONTINUED OPERATIONS - Components of Income from Discontinued Operations (Details) - Non-dating - Discontinued Operations - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenue | $ 0 | $ 23,980 | $ 104,416 |
Operating costs and expenses | 0 | (29,601) | (114,057) |
Operating loss | 0 | (5,621) | (9,641) |
Other expense | (378) | (2,136) | |
Other income | 11 | ||
Income tax benefit | 0 | 2,107 | 3,302 |
Loss from discontinued operations | $ (378) | $ (5,650) | $ (6,328) |
GOODWILL AND INTANGIBLE ASSETS - Goodwill and Intangible Assets, Net (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 1,244,758 | $ 1,247,644 | $ 1,206,447 |
Intangible assets with indefinite lives | 230,684 | 228,296 | |
Intangible assets with definite lives, net | 6,956 | 2,049 | |
Total goodwill and intangible assets, net | $ 1,482,398 | $ 1,477,989 |
GOODWILL AND INTANGIBLE ASSETS - Goodwill by Reporting Unit (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Goodwill | ||
Balance at the beginning of the period | $ 1,247,644 | $ 1,206,447 |
Additions | 11,187 | 120 |
Deductions | 0 | (29) |
Foreign Exchange Translation | (14,073) | 41,106 |
Balance at the end of the period | $ 1,244,758 | $ 1,247,644 |
GOODWILL AND INTANGIBLE ASSETS - Expected Amortization of Intangible Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2019 | $ 1,645 | |
2020 | 1,245 | |
2021 | 645 | |
2022 | 645 | |
2023 and thereafter | 2,776 | |
Total | $ 6,956 | $ 2,049 |
FINANCIAL INSTRUMENTS - Change in Level 3 Financial Instruments (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Balance at beginning of the period | $ (2,647) | $ (19,418) |
Total net (losses) gains: Fair value adjustments | (320) | (5,253) |
Included in other comprehensive (loss) income | 45 | (1,405) |
Settlements | 948 | 23,429 |
Balance at end of the period | $ (1,974) | $ (2,647) |
FINANCIAL INSTRUMENTS - Carrying Value and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, net | $ (1,515,911) | $ (1,252,696) |
Unamortized original issue discount and debt issuance costs | 19,100 | 22,300 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, net | $ (1,513,683) | $ (1,320,289) |
LONG-TERM DEBT, NET - Redemption of 2017 Notes (Details) - Senior Notes - 5.00% Senior Notes due December 15, 2027 |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
2022 | |
Debt Instrument, Redemption | |
Redemption price relative to principal amount (as a percent) | 102.50% |
2023 | |
Debt Instrument, Redemption | |
Redemption price relative to principal amount (as a percent) | 101.667% |
2024 | |
Debt Instrument, Redemption | |
Redemption price relative to principal amount (as a percent) | 100.833% |
2025 and thereafter | |
Debt Instrument, Redemption | |
Redemption price relative to principal amount (as a percent) | 100.00% |
LONG-TERM DEBT, NET - Redemption of 2016 Notes (Details) - Senior Notes - 6.375% Senior Notes due June 1, 2024 |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
2019 | |
Debt Instrument, Redemption | |
Redemption price relative to principal amount (as a percent) | 104.781% |
2020 | |
Debt Instrument, Redemption | |
Redemption price relative to principal amount (as a percent) | 103.188% |
2021 | |
Debt Instrument, Redemption | |
Redemption price relative to principal amount (as a percent) | 101.594% |
2022 and thereafter | |
Debt Instrument, Redemption | |
Redemption price relative to principal amount (as a percent) | 100.00% |
LONG-TERM DEBT, NET - Long-Term Debt Maturities (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Disclosure [Abstract] | ||
2022 | $ 425,000 | |
2023 | 260,000 | |
2024 | 400,000 | |
2027 | 450,000 | |
Total | 1,535,000 | $ 1,275,000 |
Less: Unamortized original issue discount and original issue premium, net | 7,352 | 8,668 |
Less: Unamortized debt issuance costs | 11,737 | 13,636 |
Total long-term debt, net | $ 1,515,911 | $ 1,252,696 |
STOCK-BASED COMPENSATION - Weighted-Average Assumptions (Details) - Stock Options |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award | |||
Expected volatility (as a percent) | 29.00% | 27.00% | 27.00% |
Risk-free interest rate (as a percent) | 2.50% | 1.90% | 1.30% |
Expected term | 5 years 4 months | 5 years | 4 years 9 months |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
STOCK-BASED COMPENSATION - Restricted Stock Units and Performance Stock Units (Details) - RSUs shares in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2018
$ / shares
shares
| |
Shares | |
Balance at beginning of period (shares) | 2,214 |
Granted (shares) | 1,389 |
Adjustment for special dividend (shares) | 136 |
Vested (shares) | (493) |
Forfeited (shares) | (487) |
Balance at end of period (shares) | 2,759 |
Weighted Average Grant Date Fair Value | |
Balance at beginning of period (USD per share) | $ / shares | $ 18.65 |
Granted (USD per share) | $ / shares | 42.24 |
Vested (USD per share) | $ / shares | 18.21 |
Forfeited (USD per share) | $ / shares | 20.75 |
Balance at end of period (USD per share) | $ / shares | $ 29.38 |
STOCK-BASED COMPENSATION - Market-Based Awards (Details) - Market-Based Awards shares in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2018
$ / shares
shares
| |
Shares | |
Balance at beginning of period (shares) | 6,107 |
Granted (shares) | 527 |
Adjustment for special dividend (shares) | 225 |
Vested (shares) | (343) |
Forfeited (shares) | (1,907) |
Balance at end of period (shares) | 4,609 |
Weighted Average Grant Date Price | |
Balance at beginning of period (USD per share) | $ / shares | $ 19.41 |
Granted (USD per share) | $ / shares | 26.91 |
Vested (USD per share) | $ / shares | 14.20 |
Forfeited (USD per share) | $ / shares | 19.26 |
Balance at end of period (USD per share) | $ / shares | $ 18.28 |
GEOGRAPHIC INFORMATION - Revenue and Long-Lived Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Revenue and Long-lived Assets by Geography | |||||||||||
Revenue | $ 457,344 | $ 443,943 | $ 421,196 | $ 407,367 | $ 378,907 | $ 343,418 | $ 309,572 | $ 298,764 | $ 1,729,850 | $ 1,330,661 | $ 1,118,110 |
Long-lived assets (excluding goodwill and intangible assets) | 58,351 | 61,620 | 58,351 | 61,620 | |||||||
United States | |||||||||||
Revenue and Long-lived Assets by Geography | |||||||||||
Revenue | 872,977 | 722,446 | 668,699 | ||||||||
Long-lived assets (excluding goodwill and intangible assets) | 35,004 | 37,547 | 35,004 | 37,547 | |||||||
France | |||||||||||
Revenue and Long-lived Assets by Geography | |||||||||||
Long-lived assets (excluding goodwill and intangible assets) | 11,591 | 13,635 | 11,591 | 13,635 | |||||||
Canada | |||||||||||
Revenue and Long-lived Assets by Geography | |||||||||||
Long-lived assets (excluding goodwill and intangible assets) | 8,927 | 6,738 | 8,927 | 6,738 | |||||||
All other countries | |||||||||||
Revenue and Long-lived Assets by Geography | |||||||||||
Revenue | 856,873 | 608,215 | $ 449,411 | ||||||||
Long-lived assets (excluding goodwill and intangible assets) | $ 2,829 | $ 3,700 | $ 2,829 | $ 3,700 |
COMMITMENTS AND CONTINGENCIES - Future Minimum Payments under Operating Lease Agreements (Details) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 11,559 |
2020 | 13,470 |
2021 | 12,100 |
2022 | 6,812 |
2023 | 6,021 |
Thereafter | 17,471 |
Total | $ 67,433 |
SUPPLEMENTAL CASH FLOW INFORMATION - Summary (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Cash paid (received) during the year for: | ||||
Interest | $ 71,308,000 | $ 71,893,000 | $ 82,494,000 | |
Income tax payments, including amounts paid to IAC for Match Group’s share of IAC’s consolidated tax liability | 39,267,000 | 28,938,000 | 44,733,000 | |
Income tax refunds | (17,720,000) | (13,537,000) | (962,000) | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | 186,947,000 | 272,624,000 | 253,651,000 | $ 88,173,000 |
Restricted cash included in other current assets | 193,000 | 137,000 | 120,000 | 126,000 |
Total cash, cash equivalents and restricted cash as shown on the consolidated statement of cash flow | 187,140,000 | 272,761,000 | 253,771,000 | $ 88,299,000 |
Acquisition-related contingent consideration | $ 0 | $ 0 | $ 200,000 |
BENEFIT PLANS - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Retirement Benefits [Abstract] | |||
Employee contribution limit per calendar year (as a percent of pre-tax earnings, up to statutory limit) | 50.00% | ||
Employer contribution per dollar employee contributes up to contribution limit (as a percent) | 50.00% | 50.00% | 50.00% |
Employer contribution limit per calendar year (as a percent of compensation, up to statutory limit) | 3.00% | ||
United States | |||
Defined Contribution Plan Disclosure | |||
Employer matching contributions during period | $ 2.8 | $ 2.2 | $ 1.6 |
All other countries | |||
Defined Contribution Plan Disclosure | |||
Employer matching contributions during period | $ 2.8 | $ 2.2 | $ 1.9 |
CONSOLIDATED FINANCIAL STATEMENT DETAILS - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 04, 2017 |
|
Other Income (Expenses), Net [Line Items] | ||||
Foreign currency exchange (losses) gains, net | $ 5.3 | $ 10.3 | $ 20.0 | |
Interest income | 4.9 | |||
Other than temporary impairment charge | 2.1 | 2.3 | 0.7 | |
Fair value adjustment of equity instrument | $ 0.7 | 13.0 | 2.1 | |
Loss on extinguishment of debt | 15.4 | |||
Cost-method investments, realized gain | 9.1 | |||
Gain on investment | 3.1 | |||
Write off of deferred debt issuance cost | 12.1 | |||
Principal payment on Term Loan | $ 440.0 | |||
Repricing fees | $ 1.5 | |||
6.75% Senior Notes due December 15, 2022 | ||||
Other Income (Expenses), Net [Line Items] | ||||
Stated interest rate (as a percent) | 6.75% | |||
6.75% Senior Notes due December 15, 2022 | Notes Payable | ||||
Other Income (Expenses), Net [Line Items] | ||||
Stated interest rate (as a percent) | 6.75% |
CONSOLIDATED FINANCIAL STATEMENT DETAILS - Other Current Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Other current assets: | ||
Capitalized mobile app fees | $ 29,216 | $ 22,070 |
Prepaid expenses | 19,476 | 16,374 |
Other | 9,074 | 16,925 |
Other current assets | $ 57,766 | $ 55,369 |
CONSOLIDATED FINANCIAL STATEMENT DETAILS - Property and Equipment, Net (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Property and equipment, net: | ||
Property and equipment, gross | $ 171,376 | $ 170,480 |
Accumulated depreciation and amortization | (113,025) | (108,860) |
Property and equipment, net | 58,351 | 61,620 |
Computer equipment and capitalized software | ||
Property and equipment, net: | ||
Property and equipment, gross | 136,083 | 134,757 |
Leasehold improvements | ||
Property and equipment, net: | ||
Property and equipment, gross | 24,529 | 22,390 |
Furniture and other equipment | ||
Property and equipment, net: | ||
Property and equipment, gross | 7,395 | 7,216 |
Projects in progress | ||
Property and equipment, net: | ||
Property and equipment, gross | $ 3,369 | $ 6,117 |
CONSOLIDATED FINANCIAL STATEMENT DETAILS - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Accrued expenses and other current liabilities: | ||
Accrued advertising expense | $ 40,894 | $ 28,878 |
Accrued employee compensation and benefits | 38,378 | 30,375 |
Other | 56,699 | 51,313 |
Accrued expenses and other current liabilities | $ 135,971 | $ 110,566 |
CONSOLIDATED FINANCIAL STATEMENT DETAILS - Other Income (Expense), Net (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Other income (expense), net | $ 7,765 | $ (30,827) | $ 7,866 |
QUARTERLY RESULTS (UNAUDITED) - Summary (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 457,344 | $ 443,943 | $ 421,196 | $ 407,367 | $ 378,907 | $ 343,418 | $ 309,572 | $ 298,764 | $ 1,729,850 | $ 1,330,661 | $ 1,118,110 |
Cost of revenue | 111,210 | 107,512 | 97,334 | 93,944 | 85,942 | 72,044 | 62,665 | 58,848 | 410,000 | 279,499 | 195,648 |
Operating income | 151,001 | 139,895 | 150,165 | 112,233 | 127,663 | 91,008 | 82,975 | 58,871 | 553,294 | 360,517 | 315,549 |
Net earnings from continuing operations | 113,983 | 127,950 | 131,358 | 99,678 | (7,893) | 287,771 | 51,544 | 24,555 | 472,591 | 350,327 | 172,013 |
Loss from discontinued operations, net of tax | 0 | (378) | 0 | 0 | (1,003) | (85) | (71) | (4,491) | (378) | (5,650) | (6,328) |
Net earnings attributable to Match Group, Inc. shareholders | $ 115,544 | $ 130,159 | $ 132,500 | $ 99,736 | $ (9,023) | $ 287,688 | $ 51,430 | $ 20,053 | $ 477,939 | $ 350,148 | $ 171,451 |
Net earnings per share from continuing operations: | |||||||||||
Basic (USD per share) | $ 0.42 | $ 0.47 | $ 0.48 | $ 0.36 | $ (0.03) | $ 1.08 | $ 0.20 | $ 0.10 | $ 1.73 | $ 1.35 | $ 0.71 |
Diluted (USD per share) | 0.39 | 0.44 | 0.45 | 0.33 | (0.03) | 0.98 | 0.17 | 0.08 | 1.61 | 1.20 | 0.66 |
Per share information attributable to the Match Group, Inc. shareholders: | |||||||||||
Basic (USD per share) | 0.42 | 0.47 | 0.48 | 0.36 | (0.03) | 1.08 | 0.20 | 0.08 | 1.73 | 1.33 | 0.68 |
Diluted (USD per share) | $ 0.39 | $ 0.44 | $ 0.45 | $ 0.33 | $ (0.03) | $ 0.98 | $ 0.17 | $ 0.07 | $ 1.61 | $ 1.18 | $ 0.64 |
Abstract Effect of Tax Cuts and Jobs Act of 2017 | |||||||||||
Income tax (provision) benefit | $ 226,200 | $ (14,673) | $ 103,852 | $ (62,875) | |||||||
Income tax expense (benefit) related to the TCJA | $ 92,300 | ||||||||||
Transition tax, income tax expense (benefit) | 23,700 | $ (3,200) | |||||||||
Change in tax rate, income tax expense (benefit) | $ 68,600 |
SUBSEQUENT EVENTS (UNAUDITED) - Narrative (Details) - 5.625% Senior Notes due 2029 - Senior Notes - Subsequent Event |
Feb. 15, 2019
USD ($)
|
---|---|
Subsequent Event [Line Items] | |
Face amount of debt instrument | $ 350,000,000 |
Stated interest rate (as a percent) | 5.625% |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Allowance for doubtful accounts | |||
Movement in Valuation Allowances and Reserves | |||
Balance at Beginning of Period | $ 778 | $ 676 | $ 902 |
Charges to Earnings | 83 | 427 | 136 |
Charges to Other Accounts | (15) | (47) | 23 |
Deductions | (122) | (278) | (385) |
Balance at End of Period | 724 | 778 | 676 |
Deferred tax valuation allowance | |||
Movement in Valuation Allowances and Reserves | |||
Balance at Beginning of Period | 24,795 | 23,411 | 22,945 |
Charges to Earnings | 22,675 | 1,157 | (593) |
Charges to Other Accounts | (22) | 227 | 1,059 |
Deductions | 0 | 0 | 0 |
Balance at End of Period | 47,448 | 24,795 | 23,411 |
Other reserves | |||
Movement in Valuation Allowances and Reserves | |||
Balance at Beginning of Period | 2,544 | 2,822 | 2,514 |
Balance at End of Period | $ 3,008 | $ 2,544 | $ 2,822 |
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