Match Group, Inc. (MTCH) Earnings Call Transcript & Summary

Good morning, everyone. I'm Shweta Khajuria, Internet analyst at Evercore ISI. We're thrilled to have Gary Swidler, CFO, COO of Match Group. My colleague, Jian Li, and I will be asking questions. Gary, thanks a lot for being with us today.

Thanks for having me, guys.

For everyone listening to the call, please feel free to send your questions by typing in the Q&A box. We'll be happy to ask them as they come in. Okay. With that, let's get started. Gary, at a high level, can you please help frame the size of Match's overall market opportunity in online dating? How large is the market? And how fast is it growing today?

So when we look at the overall size of the market, it's extremely large compared to the company. You've probably got -- depending on sort of how you count it and whether you include China and a few other factors like that and what year you're looking at, you're looking at anywhere between 600 million and probably 800 million singles around the world who are eligible to use our products, who are connected through Internet and not in a relationship. So it's a very, very large market compared to our user base and certainly our subscriber base. And that's before you get to social discovery, which obviously expands the market much, much further and includes people who aren't single in it as well. So we've got a massive market opportunity, and we're really just penetrating a very tiny sliver of the overall market. It's growing quite rapidly. It's growing rapidly in Western Europe and North America, but it's growing even more rapidly in Asia and other parts of the world. And that's purely a function of the level of smartphone penetration. And as, I'm sure, know, North American population, Western European population is not growing particularly quickly, probably growing a couple of percentage points a year. And people generally are pretty penetrated on the smartphone side. So that market itself is not growing that fast, whereas the population in other parts of the world is growing much more quickly. And so that's why we see a much faster growing TAM in those other parts of the world. In addition, the products have been tried more in Europe and in North America, probably something like 50% of people have at least tried dating products in a market like North America, where that percentage is lower in the rest of the world, probably closer to 1/3 or something in that order. So you've got more awareness. You've got more people who have tried here. But even with 50% in North America who have tried, that still means you have 50% who haven't tried. And so the opportunity for us is to continue to get those who haven't tried to come into the product set. And the reality is, we look at this product, like you might look at an Uber or somebody like that, which you say, look, everyone today uses Uber or Lyft or some way to get a car service, we think the same should be true of singles and dating products. There's really no reason why people who are single don't use dating products. But people have resisted for a number of different reasons, one of them is safety. And so to the extent we can continue to refine our safety products and make feel more comfortable in using them, we think we can tap into that 50% who have resisted up until now. Another reason is people either aren't comfortable with the product, the type of product, the approach or don't like the community, and that's where social discovery starts to come in because we think that some people who haven't used a traditional dating product in North America, Europe and certainly in the rest of the world, might consider trying more of a social discovery product where they're more comfortable meeting people through other ways and just kind of swiping through, looking at profiles and matching and texting. We think giving people other opportunities to meet is a good way to bring in some of those resistors. So it's a bit of a nuanced calculation when you talk about the TAM to figure out how we can address it. Because unlike, say, car services or book delivery when Amazon first started, dating is a bit more nuanced. There's a lot more preferences. Some things work for some people who don't work for other people. And so to address the TAM you have to have a variety of products and a variety of approaches, which is why we have a big portfolio.

Well, that makes sense. I mean, it's one of your key competitive advantages to have -- the diversification of your assets as well as geographic diversification. Just to follow-up on the TAM. I guess, where do you think is in -- so there's -- there are 600 million to 800 million single people, 50% perhaps penetrated in some of the developed markets. So there is upside to penetration, not only in the developed markets, but also in nondeveloped and emerging markets. And then when we think about ARPU opportunities in terms of monetization, an average -- maybe help us think about how many apps does an average user usually have? Maybe there's an opportunity there? And maybe what's the upside in payer conversion and ARPU as you think about next, call it, 5 years.

So a few things. First of all, our data shows that people tend to use, let's call it, between 3 and 4 apps like this at a time. If you're a little younger, you'd probably trend more towards 4, if you're a little bit older, you might trend towards 3. There's a little bit of divergence depending on your age. But it's not unusual for people to have 3 or 4 of these apps on their phone at any given time. Some they use more frequently, some they use less frequently. They sometimes feel one is working well for a while, so they're going more with that one. And then they feel that one is working anymore and so they go with a different one. There's lots of psychology involved in it. But given the presence that we have in the space, generally, if someone has 4 apps on their phone, at least 3 of them tend to be ours, and we'd like it to be 4, but we're pretty happy with that kind of share on people's phones. And that's kind of one piece of it. The second piece of it is I think the space has evolved pretty significantly over the last few years in terms of both what we think can be achieved from a payer penetration standpoint, as well as what we think can be achieved from an ARPU standpoint. And so if you go back when we did the IPO back in 2015, we took a look at penetration levels at OkCupid and Plenty of Fish, which tended to be around 10% payers. And we said, "Gee, if someone like Tinder -- brand like Tinder can get to 10% payer penetration, we'll be very happy with that." And the reality is, today, sitting here, we know that Tinder can perform much, much better than that and has markets where it's performing much better than that. So what's happened is these products have become much more valuable to people, they see more value in them. We've learned how to provide products that people see value in and are willing to pay for, and that has enabled us to increase payer penetration levels. So if you look at Tinder Gold as a great example, we saw a massive increase in conversion when Tinder Gold was introduced, and that was because people saw that product as extremely valuable and were suddenly willing to pay for Tinder, where some of them hadn't been willing to pay for Tinder before. So the equation around payer penetration has changed, and the same largely holds true for ARPU. I think if you had asked us 5 years ago, we would have said something like $15 to $17 a month, maybe that was a ceiling that we saw on some of the products, and we didn't see the ability to drive ARPU too much higher, and ARPU had actually been stagnant at a lot of the non-Tinder brands for a long time. But the reality is we found ways to enhance the product experience, create more value for people and drive ARPU up, such that now in the most recent quarter or 2, ARPU is actually increasing virtually at every brand. And so that's just basically kind of an old tenant of marketing and retail, which is you have products that you'll want to buy, you'll sell more products. And so the same thing is happening with virtually all the brands in our portfolio at this time. We've done good product work, good marketing work to explain the benefits of the products. And we're seeing increased conversion, and we're seeing higher ARPU. We've also learned a lot about a la carte and how to supplement the subscription packages with a la carte products that people find valuable, and that is further enhancing the ARPU that we're able to achieve as we're selling more and more a la carte. And you can see how well Tinder has done on a la carte with Super Like and some of the other products. It has -- now you're seeing similar things with Hinge, with Roses and Standouts and some of the things that it has. And so we're really getting good at a la carte in addition to subscription. And together, that's leading to enhanced ARPU. And the last point I'd make on this is, we believe that the pandemic has further enhanced the value that people see in these products. So while it's not fully apparent yet because the world is still just starting to reopen, the reality is -- and I think everyone sort of intuitively feels this, that the value of meeting people and companionship and not being by yourself has only gone up over the last 12 or 15 months. Not too many people enjoyed being by themselves through the course of the pandemic. And so if you ask them at the beginning of the pandemic what's the value of meeting somebody and you ask them in the middle or towards the end of it, they would have said it's more than it was at the beginning. I see the value. It makes me happy. I'm not happy being by myself. And so as a result of that, we have more confidence that the ability to drive ARPU is higher than we thought it was certainly 5 years ago and even 15 months ago before the pandemic happened. It's enhanced the value of certain things. And people have kind of reordered their priorities and what's important to them and what makes them happy. And I think it's pretty clear that meeting people is higher on the list of priorities and more valuable to people now. So our products satisfy that need. And therefore, the ARPU that we can charge for them is higher today than it was 2 years ago.

No, that makes perfect sense. That actually leads us to the -- to my second question on COVID. So first, it'd be great to hear the impact you've seen so far, and then we'll get into ahead of the reopening, how you're positioned. So let's go back just a year. Maybe if you could talk about how would you characterize COVID's impact on the company? We saw some deceleration in top line growth in the second quarter of last year, but then growth sort of just snapped back to normalized levels with accelerating growth for 3 consecutive quarters -- prior quarters when you are expecting acceleration in the second quarter. So I guess what drove that? And what did the company focus on over the past year or so as you worked on adapting to responding to COVID and shelter-in-place, et cetera?

So first of all, you have to remember that it is a subscription business. It is a recurring revenue business. So there is a little bit of a delayed impact on some of the numbers by things like -- if the world stops. And you still would see some level of continuity even if everything sort of stopped. So that affects our numbers a little bit. But in general, what you saw was when the -- what I call sort of the freeze up happened, when really people just kind of stopped in their tracks in kind of middle of March through some time, maybe late May, early June of last year, we did see impact on the business. Subscription levels came down. The willingness to subscribe came down. First-time subscribers came down, and a la carte came down very substantially because a la carte, in particular, is a very discretionary thing. And if you feel like you can't go out and meet people in the real world, the value of an a la carte purchase to highlight yourself, help you get a date for the weekend is a lot lower, right? And so Tinder, having a lot of a la carte, was more susceptible to this, and they saw pretty significant deterioration in propensity to pay right away when the pandemic happened. The other brands varied a little bit more, but Tinder, you could see very immediate effects right into the pandemic. And we publicly showed the chart of how we saw slides in our first-time subscriber levels across the brand. Some were better. Some were worse. Some geographies were better, some were worse. But it was a significant impact. And then you're right, although engagement and messages sent and time spend all stayed very healthy because people were at home and kind of bored and wanted to stay online and interact, but the value of a subscription, the value of an a la carte purchase really did decline in that March to May time frame, and you can see that in our numbers. We had a couple of months of not great performance over that period of time. And then I think you characterized it exactly right. The weather got better. Late last spring into summer, people started moving around again. And we do see a very significant correlation between mobility that Apple and others track. People getting out and moving around and the propensity to subscribe. And so as mobility improved a lot kind of in the June, July, August time frame last year, we saw significantly improved propensity to pay in first-time subscriber numbers and performance, and we had a very good third quarter last year, where COVID was a bit less severe, the weather was good and people were out and traveling and doing different things. And then we saw pretty much the opposite effect in the fall and into the early winter where COVID came back again, mobility went down and propensity to pay first-time subscribers declined. And so we didn't have a great fourth quarter. So we had really like -- we're off to a very strong start last year in Q1 until kind of late in the quarter, Q2 was much tougher, Q3 was good, and Q4 was tough. It was kind of a wave effect like that. And now we've seen kind of a steady improvement as things start to open up, obviously. North America is an important market for us. And so as the U.S. has been opening up, that's helping significantly. The U.K. is a very important market for us. And as that has been opening up, it's helping us significantly. And that's going to roll through the geographies as the markets continue to open up. And obviously, people see enhanced value in the product, enhanced desire to spend on subscription in a la carte because they've recognized that the value of meeting people is higher than it was, and they finally have a chance to go out and do that in a safe way that they're excited about. And so we're going to see that impact roll through the year. Hard to gauge exactly where Q3 is going to land up, I think, even still today, but I am optimistic about how things are going. And I don't think there's any reason to think that the rest of the year looks anything other than quite good at this point.

Yes. To that point then, different geographies are recovering at different rates because of vaccinations and the restrictions around how open the economies are from U.S. to Europe to India is still sort of lagging. And during your first quarter earnings call, you mentioned that you expect full year revenue and EBITDA to be at the high end of the guidance that you had previously provided during the fourth quarter of the earnings call. I guess the question is, what are the drivers that you're accounting for right now into your guide? Because first quarter was strong, your second quarter guide seemed very healthy. So as you think about the back half, what are some of the growth drivers that you are accounting for that are baked into the guide? And how are you thinking about the recovery path across geographies and also the impact from pent-up demand and any other factor?

Yes. I mean it is sort of a nuanced answer that you have to take into account kind of the rates of recovery in all of these markets. And so when we look at what's happening in the U.S. and U.K., that gives us confidence that both that's going to help propel our results and that what's happening in those markets logically should happen in the markets that are kind of trailing fairly close behind in vaccines. So you can use the U.S. and the U.K. as a proxy to say, okay, as France and Germany and Spain and Canada get up the curve on vaccines, we're probably going to see similar trends in those markets to what we've seen in the U.S. and the U.K. I think that, that's pretty reliable at this point. No reason to think that's not going to be the case. And so I'm comfortable including that in our guidance and assuming a similar trajectory of recovery, and that's why I was comfortable making that statement at that point to say based on what we see in the U.S. and U.K., which helps us a lot because those are important markets, plus assuming that some of these other markets are going to follow a similar path, just be maybe a quarter or so delayed or behind them, we feel enough confidence to say we're going to be at the high end of those ranges. So that's kind of what was factored in. Now what's a little harder to predict is some of the other markets. And so that includes some important markets for us like Japan. Japan has had a tougher time. They're slower on the vaccine curve. It's an important revenue market for us, our #2 market with Pairs and Tinder, both big businesses for us there. And so that has some dampening effect on our market -- on our revenue numbers. And frankly, Japan went into Golden Week in May, which is a big holiday week for it. And having a state of emergency in effect during Golden Week was a negative to the business, and we weren't sure how the Japanese market was going to fare through their big kind of peak time with states of emergency. And they continue to have rolling states of emergency and to struggle. So Japan is a market we're trying to calibrate and factor in to our guidance. Obviously, if it sort of balances out more quickly than it appears like it's going to, that would be upside to our guidance. We have not assumed that. You mentioned India as well. It's an important market for us, not as important from a revenue standpoint, but it is important from a subscriber standpoint. And India has been extremely, extremely tough. It really has been. It was bad initially when COVID happened. It got actually quite a bit better, and it's gotten very bad again as they've really struggled over the last, I don't know whether it's up to maybe 6 months or so. So India has been a very tough market for us. So the geographic exposure that we have around the world and the various paces of recovery from COVID in these markets makes it a little harder to predict what's going to happen in some of these markets into our overall numbers over time. So we are being a bit cautious to try to factor in Japan and India in particular, even a market like South Korea, which is more important to us now, especially once we get the Hyperconnect deal closed. South Korea is also fairly slow on the vaccine front, and that's going to affect [ the -- it -- numbers ] for the rest of the year. So there's a lot of different markets to take into account. But even with a relatively kind of reasonable or maybe even conservative view of what's going to happen in markets like Japan and India, I feel we've seen enough in North America and the U.K. and expect enough out of Europe to have a good sense that we're going to be able to hit the high end of the ranges. Obviously, if the recovery is off the charts, incredibly strong in the U.S. and the U.K. and other markets or some of these markets do better than we're expecting from a recovery standpoint, quicker pacing, that would be upside to our guide. We haven't factored in a complete boom over the summer in the recovered markets or faster than kind of what I'm describing recovery. Those things are absolutely possible, and I know some people believe that's what's going to happen. And there certainly are some indicators just broadly that things like that are in the offering, but we're sort of waiting and seeing that. But if you walk around the streets of New York on a Friday night or Saturday night now, it's pretty clear that there's a pretty big recovery in effect.

Yes. Well, I mean the county I live in Marin here in the Bay Area, June 15, everything is going to be open. So that's pretty remarkable. How much of Tinder Platinum is included in the guide contribution from -- yes.

We've included what we've said about Tinder Platinum, which is we're on the trajectory we thought it would be on. We think it will cross 1 million subscribers late this year, and that's baked into our guide. Obviously, if we see an acceleration in that, that would be upside. But I feel pretty good that we've accounted for Tinder Platinum pretty reasonably on the guide. So most of the guide is sort of leveraged to the upside on kind of faster speed of recovery or just more significant recovery, I think, than I might be expecting or we might be expecting.

Okay. Understood. We're getting quite a few questions from clients. So let me take one of them as it's related. I guess how much of the business today is subscription versus a la carte? So not only for Tinder -- or I guess first for Tinder and then for overall.

So it moves around a little bit. I think you could use a rule of thumb of, call it, a quarter, maybe it's 30% in some brands. It moves around in part because sometimes, if we are able to drive more subscription revenue, it affects the a la carte percentage. So as an example, at Tinder, you roll out Tinder Platinum, it's a subscription product. That raises subscription revenue and drops a la carte as a percentage, not a la carte in terms of order of magnitude, but actually as a percentage. So it does move around, but I kind of think of it as 25% to 30% kind of rule of thumb certainly at Tinder. So we've been doing a good job getting more a la carte out of some of the other brands. Hinge, as I mentioned, has been very successful on the a la carte front. I think it's possible, they could do better percentage-wise from an a la carte standpoint. Other brands are less advanced in their a la carte, but they're watching what's happening at Tinder and Hinge and I think moving in that direction, so that will affect the overall percentage across the company. And then it's all going to get a little bit scrambled up by Hyperconnect, which is significantly a la carte. And so we're moving in the direction of a la carte to be a bigger percentage than it historically has been once we bring Hyperconnect on board. And as we learn more about a la carte, we've talked a little bit about testing more in-app currency and more a la carte features being done as in-app currency in Asian markets. If some of those things work and we get traction with them, that could change the balance between subscription revenue and a la carte as well because we see more a la carte revenue, especially in Asia, and maybe that model starts to move towards other markets as well. So this is something that we're going to continue to test and calibrate. We don't have a target. We've always talked about we're a little bit indifferent between ARPU and subscriber growth. We're a little bit indifferent between subscription and a la carte. We want to maximize revenue and revenue growth. And so we'll test and kind of cautiously leg-into changes to that mix.

Okay. That makes sense. I'll ask one more, and I'm going to flip it to Jian after that. If we think about Tinder, and going back to your point on you manage your overall revenue growth versus sub-growth and ARPU or a la carte versus subscription. So when we just think about Tinder, how are you thinking about growth opportunities? Is it fair to think that Tinder top line growth can be in the high teens for the next, call it, 3 to 5 years of sustainable growth rate? And if so, how should we think about subscriber growth versus ARPU growth for Tinder? It's already at 7 million subscribers today almost and has scaled so well. So how are you thinking about that?

I mean that's our -- kind of our goal, right, is to grow Tinder in that high teens on a sustainable basis through some combination of kind of rule of thumb, low double-digit subscriber growth and somewhere in the single-digit ARPU growth on an annual basis. That's the formula, but it is a bit of a rough formula. It's something that we think is achievable. But because we don't target that, if we have a year where it's 10% ARPU growth and 8% subscriber growth, that could happen because we have some levers to pull on that. You've seen that a little bit in the non-Tinder numbers recently where we made some trade-offs and enhanced ARPU and reduced subscriber growth a little bit. So we have the ability to adjust for those factors, depending on the types of products we roll out and some other things that we're trying to do. And so therefore, we don't start with, okay, we want 13% subscriber growth and we want 7% ARPU growth. We're a little bit more flexible than that. We start with the products and the value proposition and how to deliver those for customers. And then we figure out what the right pricing is, whether it's a la carte subscription. And that leads to a certain level of subscriber growth and a certain level of ARPU growth. But the goal, I want to be clear, is to continue to drive the overall company in that, I'd say, 15 to 20, but in that kind of mid high teens growth rate on a sustainable consistent basis with somewhat equal contributions from both Tinder and non-Tinder as we sort of currently formulate it. That's the formula we're using to try to drive overall company growth to those levels. That's the objective.

Okay. Jian?

Great. I'm going to combine a couple of questions from the queue. So you mentioned just testing the new in-app currency model, especially in Asia. What kind of, I guess, like implications does it have on just with like the Android app store changes that may be coming later this year? And also in general, just if you can kind of talk about the upside and downside scenarios that could be possible depending on how the Android app store changes happen.

So it's obviously something we're monitoring very closely. There's a lot going on in the world related to the app stores. More and more happens every day on that front that another geography jurisdiction has concerns about the app store. Obviously, you've got the Epic lawsuit that is pending, and we'll see if there's a decision there over the summer time. So we're watching to see what happens with the app stores. And as you know, Apple has been relatively inflexible and has kind of stayed at this 30% across the board pretty much from an Apple tax standpoint. Google has been a little bit more flexible, although they've announced the change in policy effective in late September, and we're trying to talk to them to see what we can do because that would have some economic effect on us, and they understand that. And we've been partners with them for a long time, and we're hoping that they'll be reasonable and understanding and also have to factor in the world around them. When you have the U.S. Senate holding a hearing -- or the Senate Committee holding a hearing, when you have governments in Europe coming out with different findings, Australia and others, and then you've got a lawsuit on top of that and other investigation and so forth, at some point, that policy has a tougher time holding. So they've been holding to these policies for a long time, but it's undeniable that there's a tremendous amount of scrutiny on the app store behavior. And so we are potentially significant beneficiaries if something changes, and we're working with them and with others to see what may happen as it's developed. So we're in kind of a watch and wait scenario at the moment, which I know is a bit frustrating for people, but this is an extremely hot topic and an evolving one. And so being with Tinder, the largest nongame app in the world, we are more impacted than most by what's going on with the app stores.

Great. And let's move on beyond Tinder. So Hinge being the #3 most downloaded app in the U.S., revenue tripled last year, expected to double this year. What's the -- what do you think kind of are the main drivers that contributed to the successful scale of Hinge? And in terms of just the market overlap, what's the subscriber overlap between Tinder and Hinge right now?

So when we made our initial investment into Hinge, our view was it had a great product, a really differentiated product, a different kind of product experience. The response to the product was extremely strong and that our knowledge of the category could really help grow the business. And that's pretty much what's played out. We've worked together with that team very effectively to increase the user base, to improve the product experience and bring out more revenue features. And we saw massive growth in the user base. We've seen the ability for people to find the product more valuable and, therefore, to see ARPU increase and bring out some a la carte features, which have further driven up ARPU. And obviously, that has led to the tripling and the doubling of revenue that you talked about. So it's increasing user base, better monetization, significant revenue growth. And that was the plan from the beginning. So we've executed on our plan as we saw it over the last couple of years, and we're still on that trajectory. And I would say the business is firing on all cylinders. The next phase of its growth going into next year and the year after is going to be to move it into a number of international markets. There's still a lot to do in the U.S. and its other English-speaking markets. And so that's a focus of ours in 2021 for the rest of the year, but we will start focusing on international markets sometime very late this year into next year. And that's a big opportunity for Hinge. There just isn't another product like it. There's obviously other swiping products out there in Tinder and Bumble, but Hinge is a different experience. And I think it attracts a bit of a different base of people. And so there's some overlap, obviously, between Tinder and Hinge, but we don't think that's a significant concern. People use the products for slightly different purposes. It has a slightly different approach. Hinge is designed to be deleted. They are true to their DNA in that sense they want to know how did your date go? Would you go on a date with that person again? Did you have a good experience? They want you on the app. They want you to have success. They want you off the app. That is the way they're structuring their product, which is different than the experience you might find in other places. And so they're staying true to that, and we think that's a successful formula for Hinge. It's been their formula for a while now, and it's really working for them. So I think people sometimes can plate all these products because they are somewhat similar, but we do think the product experience at Hinge is differentiated and everything out there. And the proof is in the pudding in the sense that more and more people are using it and really enjoying that experience. And it's having impact on the market, and we're delighted to see the success they're having.

Great. Last 2 of my questions. Maybe moving beyond Hinge. Like you talked about like 15%, 20% long-term growth in a non-Hinge assets. A couple of questions here. How sustainable is this growth rate? What's the time horizon we're looking at? What would be the key assets that you think will be driving that growth? And also, would you be expecting to give out more disclosures around these like newer emerging assets in the next year or so?

Yes. So when we talk about the 15% to 20% growth overall of the company, it's a mixture. The fact that we have a portfolio makes it a mixture of different growth rates that allow us to achieve that level of overall company growth. So obviously, if you have a brand like Match or Meetic, which is the European equivalent, that brand is probably going to grow somewhere in the single digits. Maybe we can really do well with it, it will grow 10%, but it's not going to grow -- it's very unlikely it's going to grow at 15% to 20%. So you have to have other brands that are growing faster than the overall company rate to help compensate for that. And so for us, Hinge has been one of those brands, which is really growing revenue more quickly coming into the portfolio now will be Hyperconnect, and its 2 apps. And those apps are growing more quickly than the 15% to 20%. And so that's going to help enhance the overall company growth rate as well. So we have -- just like we have lots of different apps for lots of different purposes, we also have lots of different apps, and there are different stages of their maturity and different levels of growth that they can achieve. And our goal is to continue to get as much as we can with the existing apps. So if you look at Plenty of Fish, its core business is growing consistently with some of the other apps that have been around for a longer time. But now we found this new thing in live streaming, and that's generated a whole new revenue stream for it and has really accelerated Plenty of Fish's growth. So it's moved over on the spectrum of fast-growing apps into a faster-growing one than it was previously. So if we can enhance some of the existing apps by finding creative things to do with them like that, that helps the overall growth rate. Or if we can get something like a BLK and Chispa, which have really been growing well in the last few years to contribute, that helps the overall company growth rate, or a Hinge or a Hyperconnect, or ultimately, we've got some others in the pipeline -- we've got Hawaya, which is a Muslim-focused app. We've also got Ablo, which is more of a global chat app. And those are growing nicely as well. They're still very small, but they're sort of part of the future, and we'll continue to innovate and look for things that we can use to enhance the overall company growth rate. So that's going to be the name of the game for us, innovate, acquire and get things and grow quickly, improve the products that we have to make them grow a little faster and then have some that are more stable, slower growing that are still significant profit generators for us.

Great. We have a lot of questions on the social -- Hyperconnect and social discovery. So I will spin it over to Shweta to cover that ground.

Okay. Well, in 2 -- 1 or 2 minutes, Gary, let me see if I can incorporate client questions and my own. So perhaps just frame the social discovery opportunity. Why Hyperconnect? What's the strategic rationale? And then perhaps, I'm going to read this question, can you talk about the plans for broader expansion of Tinder, sort of a relaunch later this year, including new experiences beyond swipe, match, message? And is the idea to pivot Tinder into social discovery space? So how big is the social discovery opportunity, the Tinder question? And then the third client question is, how much incremental investment do you need to make in Hyperconnect versus what you have done on your own?

Okay. I'm going to try to answer those relatively quickly, which I'm sure will be satisfying to nobody, but I will try. So first of all, Hyperconnect brings a lot of different things to the table for us, right? It brings a big operation in Asia, which is a focus of ours and where we see a lot of growth. It brings a very high-quality engineering force for us, which is challenging to get in the current environment. It brings a focus on younger users, particularly Gen Z. It brings us an understanding of a la carte and in-app currency. It brings us video experience. We're not a video company, but we think video, as we're proving on this call, is a bigger and bigger part of people's lives. And so because we didn't start out, as a video company, bring a company on that has experience in video, is very important to us and important to the future development of our product suite. And they also have some other very interesting things. There are some cool things on the safety front. They have some interesting things with avatars, their experiment with some game stuff. So there's lots of things they're trying that we think could have broad applicability. And so we're super excited about Hyperconnect and getting that closed and bringing them on. I think they're excited about all the things they can do working with us in terms of across our portfolio. And as the question asks, we think that Tinder can do more with its big user base than just swipe and match and chat. They can have a richer experience for the user base there. And that's what Jim Lanzone and the team there have been formulating over the last 8 or 9 months. Some of that are things that Tinder will develop and build themselves and some of that might be things that they leverage out of Hyperconnect, depending on what's the most sort of efficient, effective way of doing things. And so we think that the experience is going to grow for a user at Tinder by both things that Tinder itself was going to do and Swipe Night was a good sort of test case. An interactive game that enhanced your user experience, that enhanced your ability to match and was fun to do. And so I think thinking along the lines of the Swipe Night is the right way to think about it, but it will be different stuff, but it could incorporate games thing, it could incorporate a video aspect to enhance the overall way of meeting people and interacting with people. That's kind of what's coming at Tinder, and we're going to unveil more as the year progresses. So people should stay tuned for that. I think it will be very exciting.

We're looking forward to it. Thank you so much. Gary Swidler, CFO and COO of Match Group, thank you so much for being with us today.

Great, pleasure. Thank you, guys. Good to see you.

You, too.