mtch-20220930

As filed with the Securities and Exchange Commission on November 4, 2022

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended		September 30, 2022
Or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________to__________

Commission File No. 001-34148

Match Group, Inc.

(Exact name of registrant as specified in its charter)


Delaware						59-2712887
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

8750 North Central Expressway, Suite 1400, Dallas, Texas 75231

(Address of registrant’s principal executive offices)

(214) 576-9352

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of exchange on which registered

Common Stock, par value $0.001

MTCH

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of October 28, 2022, there were 279,306,106 shares of common stock outstanding.

TABLE OF CONTENTS


		Page Number

PART I
Item 1.	Consolidated Financial Statements	3
	Consolidated Balance Sheet	3
	Consolidated Statement of Operations	4
	Consolidated Statement of Comprehensive Operations	5
	Consolidated Statement of Shareholders’ Equity	6
	Consolidated Statement of Cash Flows	10
	Note 1—The Company and Summary of Significant Accounting Policies	11

	Note 2 —Income Taxes	13
	Note 3—Discontinued Operations	14

	Note 4—Financial Instruments	14
	Note 5—Long-term Debt, net	17
	Note 6—Accumulated Other Comprehensive Loss	22
	Note 7—Earnings per Share	23
	Note 8—Consolidated Financial Statement Details	25
	Note 9—Contingencies	25
	Note 10—Related Party Transactions	26

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	45
Item 4.	Controls and Procedures	45
PART II
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	48
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 6.	Exhibits	50
	Signatures	51

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

MATCH GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET (Unaudited)


	September 30, 2022		December 31, 2021

	(In thousands, except share data)
ASSETS
Cash and cash equivalents	$	390,641	$	815,384
Short-term investments	7,678		11,818
Accounts receivable, net of allowance of $478 and $281, respectively	174,446		188,482


Other current assets	132,782		202,568

Total current assets	705,547		1,218,252

Property and equipment, net of accumulated depreciation and amortization of $186,797 and $181,742, respectively	172,192		163,256
Goodwill	2,190,088		2,411,996
Intangible assets, net of accumulated amortization of $61,052 and $35,674, respectively	439,068		771,697
Deferred income taxes	268,875		334,937

Other non-current assets	138,779		163,150

TOTAL ASSETS	$	3,914,549	$	5,063,288
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Current maturities of long-term debt, net	$	44,273	$	99,927
Accounts payable	14,774		37,871
Deferred revenue	256,180		262,131


Accrued expenses and other current liabilities	286,509		768,366

Total current liabilities	601,736		1,168,295
Long-term debt, net	3,834,125		3,829,421
Income taxes payable	13,383		13,842
Deferred income taxes	55,602		130,261


Other long-term liabilities	108,171		116,051


Redeemable noncontrolling interests	—		1,260

Commitments and contingencies
SHAREHOLDERS’ EQUITY
Common stock; $0.001 par value; authorized 1,600,000,000 shares; 286,469,250 and 283,470,334 shares issued; and 279,277,239 and 283,470,334 outstanding at September 30, 2022 and December 31, 2021, respectively	286		283




Additional paid-in capital	8,216,165		8,164,216
Retained deficit	(7,867,143)		(8,144,514)
Accumulated other comprehensive loss	(566,601)		(223,754)
Treasury stock; 7,192,011 and 0 shares, respectively	(482,049)		—
Total Match Group, Inc. shareholders’ equity	(699,342)		(203,769)
Noncontrolling interests	874		7,927
Total shareholders’ equity	(698,468)		(195,842)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	3,914,549	$	5,063,288

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

MATCH GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(In thousands, except per share data)
Revenue	$	809,546	$	801,835	$	2,402,690	$	2,177,207
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	246,962		232,211		724,038		604,765
Selling and marketing expense	129,615		153,388		407,182		427,294
General and administrative expense	114,169		103,502		325,512		304,560
Product development expense	87,880		66,974		253,084		174,683
Depreciation	10,679		10,104		32,664		30,622
Impairment and amortization of intangibles	9,606		15,066		251,838		15,521
Total operating costs and expenses	598,911		581,245		1,994,318		1,557,445
Operating income	210,635		220,590		408,372		619,762
Interest expense	(36,814)		(31,850)		(107,333)		(95,907)
Other income (expense), net	2,326		(39,212)		8,435		(40,886)
Earnings from continuing operations, before tax	176,147		149,528		309,474		482,969
Income tax provision	(47,881)		(18,627)		(32,966)		(38,200)
Net earnings from continuing operations	128,266		130,901		276,508		444,769



Earnings from discontinued operations, net of tax	—		—		—		509
Net earnings	128,266		130,901		276,508		445,278
Net loss attributable to noncontrolling interests	430		309		863		1,077
Net earnings attributable to Match Group, Inc. shareholders	$	128,696	$	131,210	$	277,371	$	446,355

Net earnings per share from continuing operations:
Basic	$	0.46	$	0.47	$	0.98	$	1.64
Diluted	$	0.44	$	0.43	$	0.94	$	1.46
Net earnings per share attributable to Match Group, Inc. shareholders:
Basic	$	0.46	$	0.47	$	0.98	$	1.64
Diluted	$	0.44	$	0.43	$	0.94	$	1.46

Stock-based compensation expense by function:
Cost of revenue	$	1,440	$	1,960	$	4,547	$	3,961
Selling and marketing expense	2,011		1,760		5,830		6,112
General and administrative expense	26,154		19,709		80,085		65,769
Product development expense	23,657		16,140		59,862		36,239
Total stock-based compensation expense	$	53,262	$	39,569	$	150,324	$	112,081

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

MATCH GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS (Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(In thousands)
Net earnings	$	128,266	$	130,901	$	276,508	$	445,278
Other comprehensive loss, net of tax
Change in foreign currency translation adjustment	(158,806)		(99,321)		(343,855)		(122,066)

Total other comprehensive loss	(158,806)		(99,321)		(343,855)		(122,066)
Comprehensive (loss) income	(30,540)		31,580		(67,347)		323,212
Components of comprehensive loss attributable to noncontrolling interests:
Net loss attributable to noncontrolling interests	430		309		863		1,077
Change in foreign currency translation adjustment attributable to noncontrolling interests	42		13		1,008		123

Comprehensive loss attributable to noncontrolling interests	472		322		1,871		1,200
Comprehensive (loss) income attributable to Match Group, Inc. shareholders	$	(30,068)	$	31,902	$	(65,476)	$	324,412

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

MATCH GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (Unaudited)

Three Months Ended September 30, 2022


			Match Group Shareholders’ Equity
			Common Stock $0.001 Par Value
	Redeemable Noncontrolling Interests		$		Shares	Additional Paid-in Capital		Retained Deficit		Accumulated Other Comprehensive Loss		Treasury Stock		Total Match Group Shareholders’ Equity		Noncontrolling Interests		Total Shareholders’ Equity

			(In thousands)
Balance as of June 30, 2022	$	—	$	286	286,102	$	8,165,983	$	(7,995,839)	$	(407,837)	$	(215,538)	$	(452,945)	$	844	$	(452,101)
Net (loss) earnings for the three months ended September 30, 2022	(502)		—		—	—		128,696		—		—		128,696		72		128,768
Other comprehensive loss, net of tax	—		—		—	—		—		(158,764)		—		(158,764)		(42)		(158,806)
Stock-based compensation expense	—		—		—	55,962		—		—		—		55,962		—		55,962
Issuance of Match Group common stock pursuant to stock-based awards, net of withholding taxes	—		—		367	(5,262)		—		—		—		(5,262)		—		(5,262)






Adjustment of redeemable noncontrolling interests to fair value	502		—		—	(503)		—		—		—		(503)		—		(503)



Purchase of treasury stock	—		—		—	—		—		—		(266,511)		(266,511)		—		(266,511)










Other	—		—		—	(15)		—		—		—		(15)		—		(15)
Balance as of September 30, 2022	$	—	$	286	286,469	$	8,216,165	$	(7,867,143)	$	(566,601)	$	(482,049)	$	(699,342)	$	874	$	(698,468)

Table of Contents

MATCH GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (Unaudited)

Three Months Ended September 30, 2021


			Match Group Shareholders’ Equity
			Common Stock $0.001 Par Value
	Redeemable Noncontrolling Interests		$		Shares	Additional Paid-in Capital		Retained Deficit		Accumulated Other Comprehensive Loss		Total Match Group Shareholders’ Equity		Noncontrolling Interests		Total Shareholders’ Equity

			(In thousands)
Balance as of June 30, 2021	$	1,240	$	277	276,653	$	8,068,659	$	(8,107,092)	$	(104,089)	$	(142,245)	$	7,157	$	(135,088)
Net (loss) earnings for the three months ended September 30, 2021	(550)		—		—	—		131,210		—		131,210		241		131,451
Other comprehensive loss, net of tax	—		—		—	—		—		(99,308)		(99,308)		(13)		(99,321)
Stock-based compensation expense	—		—		—	41,648		—		—		41,648		—		41,648
Issuance of Match Group common stock pursuant to stock-based awards, net of withholding taxes	—		—		626	4,201		—		—		4,201		—		4,201








Adjustment of redeemable noncontrolling interests to fair value	650		—		—	(650)		—		—		(650)		—		(650)



Noncontrolling interest created by the exercise of subsidiary denominated equity awards	—		—		—	—		—		—		—		151		151







Unwind of notes hedges and warrants	—		—		—	198,365		—		—		198,365		—		198,365
Exchangeable note obligation	—		—		—	(201,824)		—		—		(201,824)		—		(201,824)
Other	—		—		—	251		—		—		251		—		251
Balance as of September 30, 2021	$	1,340	$	277	277,279	$	8,110,650	$	(7,975,882)	$	(203,397)	$	(68,352)	$	7,536	$	(60,816)

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MATCH GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (Unaudited)

Nine Months Ended September 30, 2022


			Match Group Shareholders’ Equity
			Common Stock $0.001 Par Value
	Redeemable Noncontrolling Interests		$		Shares	Additional Paid-in Capital		Retained Deficit		Accumulated Other Comprehensive Loss		Treasury Stock		Total Match Group Shareholders’ Equity		Noncontrolling Interests		Total Shareholders’ Equity

			(In thousands)
Balance as of December 31, 2021	$	1,260	$	283	283,470	$	8,164,216	$	(8,144,514)	$	(223,754)	$	—	$	(203,769)	$	7,927	$	(195,842)
Net (loss) earnings for the nine months ended September 30, 2022	(1,452)		—		—	—		277,371		—		—		277,371		589		277,960
Other comprehensive loss, net of tax	—		—		—	—		—		(342,847)		—		(342,847)		(1,008)		(343,855)
Stock-based compensation expense	—		—		—	159,082		—		—		—		159,082		—		159,082
Issuance of Match Group common stock pursuant to stock-based awards, net of withholding taxes	—		3		2,999	(89,772)		—		—		—		(89,769)		—		(89,769)






Adjustment of redeemable noncontrolling interests to fair value	192		—		—	(192)		—		—		—		(192)		—		(192)


Purchase of noncontrolling interest	—					6,672		—		—		—		6,672		(23,693)		(17,021)
Purchase of treasury stock	—		—		—	—		—		—		(482,049)		(482,049)		—		(482,049)
Adjustment of noncontrolling interests to fair value	—		—		—	(16,215)		—		—		—		(16,215)		16,215		—
Noncontrolling interest created by the exercise of subsidiary denominated equity awards	—		—		—	(844)		—		—		—		(844)		844		—






Settlement of notes warrants	—		—		—	(7,116)		—		—				(7,116)		—		(7,116)

Other	—		—		—	334		—		—		—		334		—		334
Balance as of September 30, 2022	$	—	$	286	286,469	$	8,216,165	$	(7,867,143)	$	(566,601)	$	(482,049)	$	(699,342)	$	874	$	(698,468)

Table of Contents

MATCH GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (Unaudited) (Continued)

Nine Months Ended September 30, 2021


			Match Group Shareholders’ Equity
			Common Stock $0.001 Par Value
	Redeemable Noncontrolling Interests		$		Shares	Additional Paid-in Capital		Retained Deficit		Accumulated Other Comprehensive Loss		Total Match Group Shareholders’ Equity		Noncontrolling Interests		Total Shareholders’ Equity

						(In thousands)
Balance as of December 31, 2020	$	640	$	267	267,329	$	7,089,007	$	(8,422,237)	$	(81,454)	$	(1,414,417)	$	1,042	$	(1,413,375)
Net (loss) earnings for the nine months ended September 30, 2021	(1,485)		—		—	—		446,355		—		446,355		408		446,763
Other comprehensive loss, net of tax	—		—		—	—		—		(121,943)		(121,943)		(123)		(122,066)
Stock-based compensation expense	—		—		—	117,735		—		—		117,735		—		117,735
Issuance of Match Group common stock pursuant to stock-based awards, net of withholding taxes	—		4		4,021	30,175		—		—		30,179		—		30,179


Issuance of common stock for the acquisition of Hyperconnect	—		6		5,929	890,845		—		—		890,851		—		890,851




Adjustment of redeemable noncontrolling interests to fair value	2,185		—		—	(2,185)		—		—		(2,185)		—		(2,185)
Purchase of noncontrolling interest	—		—		—	943		—		—		943		(2,571)		(1,628)

Adjustment of noncontrolling interests to fair value	—		—		—	(1,835)		—		—		(1,835)		1,835		—
Noncontrolling interest created by the exercise of subsidiary denominated equity awards	—		—		—	(7,102)		—		—		(7,102)		7,253		151








Unwind of notes hedges and warrants	—		—		—	198,365		—		—		198,365		—		198,365
Exchangeable note obligation	—		—		—	(201,824)		—		—		(201,824)		—		(201,824)
Other	—		—		—	(3,474)		—		—		(3,474)		(308)		(3,782)
Balance as of September 30, 2021	$	1,340	$	277	277,279	$	8,110,650	$	(7,975,882)	$	(203,397)	$	(68,352)	$	7,536	$	(60,816)

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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MATCH GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)


	Nine Months Ended September 30,
	2022		2021

	(In thousands)
Cash flows from operating activities attributable to continuing operations:
Net earnings	$	276,508	$	445,278
Add back: earnings from discontinued operations, net of tax	—		(509)
Net earnings from continuing operations	$	276,508	$	444,769
Adjustments to reconcile net earnings from continuing operations to net cash provided by operating activities attributable to continuing operations:
Stock-based compensation expense	150,324		112,081
Depreciation	32,664		30,622
Impairment and amortization of intangibles	251,838		15,521

Deferred income taxes	6,517		(21,749)

Other adjustments, net	1,362		49,761
Changes in assets and liabilities
Accounts receivable	6,985		(26,618)
Other assets	53,757		17,729
Accounts payable and other liabilities	(467,343)		(4,059)
Income taxes payable and receivable	(11,721)		18,443
Deferred revenue	(440)		30,425
Net cash provided by operating activities attributable to continuing operations	300,451		666,925
Cash flows from investing activities attributable to continuing operations:
Cash used in business combinations, net of cash acquired	(25,681)		(863,258)
Capital expenditures	(38,373)		(52,811)




Other, net	2,615		26
Net cash used in investing activities attributable to continuing operations	(61,439)		(916,043)
Cash flows from financing activities attributable to continuing operations:






Payments to settle exchangeable notes	(117,755)		—


Proceeds from the settlement of exchangeable note hedges	61,459		—
Payments to settle warrants related to exchangeable notes	(7,482)		—
Debt issuance costs	—		(851)

Proceeds from issuance of common stock pursuant to stock-based awards	16,788		45,587
Withholding taxes paid on behalf of employees on net settled stock-based awards	(106,688)		(15,726)


Purchase of treasury stock	(482,049)		—
Purchase of noncontrolling interests	(10,554)		(1,473)


Other, net	10		150
Net cash (used in) provided by financing activities attributable to continuing operations	(646,271)		27,687
Total cash used in continuing operations	(407,259)		(221,431)
Net cash used in operating activities attributable to discontinued operations	—		—
Net cash used in investing activities attributable to discontinued operations	—		—
Net cash used in financing activities attributable to discontinued operations	—		—
Total cash used in discontinued operations	—		—
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(17,501)		(6,429)
Net decrease in cash, cash equivalents, and restricted cash	(424,760)		(227,860)
Cash, cash equivalents, and restricted cash at beginning of period	815,512		739,302
Cash, cash equivalents, and restricted cash at end of period	$	390,752	$	511,442

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

MATCH GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1—THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Match Group, Inc., through its portfolio companies, is a leading provider of digital technologies designed to help people make meaningful connections. Our global portfolio of brands includes Tinder®, Match®, Hinge®, Meetic®, OkCupid®, Pairs™, PlentyOfFish®, OurTime®, Azar®, Hakuna Live™, and more, each built to increase our users’ likelihood of connecting with others. Through our trusted brands, we provide tailored services to meet the varying preferences of our users. Our services are available in over 40 languages to our users all over the world. Match Group has one operating segment, Connections, which is managed as a portfolio of 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.

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.

In management’s opinion, the unaudited interim consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in management’s opinion, all adjustments, consisting of normal and recurring adjustments, necessary for the fair presentation of our consolidated financial position, consolidated results of operations and consolidated cash flows for the periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year. The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated s