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

Great. I think we're live here. Thanks, everyone, for joining. I'm Nick Jones, an Internet analyst here at Citi. If you need my disclosures for this fireside chat, please reach out to me or corporate access so we can send those over. [Operator Instructions] And so Gary, thanks for being here, CFO of Match. I think there's a lot of questions on people's minds about the business on some recent headlines.

So I think to kick things off, why don't we go right into the Apple ruling recently? And maybe you could touch on what the implications are for Match and the time line until we see an impact there, if there's going to be one.

So look, I think that the Epic ruling was another step in the right direction in this whole situation. As I talked about on our last earnings call, we were expecting a number of different things to continue to build in the momentum for a different app ecosystem. You had South Korea not too long ago basically eliminating mandatory IAP for Google and Apple. You have the Epic ruling. You have a Japanese antitrust investigation of the App Store practices. You've got other countries and jurisdictions looking into this, including Australia and parts of the EU. You've got the U.S. Senate and many senators very vociferous about this on both sides of the aisle, frankly. So there's a lot of different places around the world where regulators and others are investigating or taking action against the app stores. And I think ultimately, Judge Gonzalez Rogers' opinion and injunction kind of continue to say what a lot of people are thinking, which is the behavior by Apple and Google are anticompetitive. And in her case, she was limited by the laws that she could apply them to that case and ultimately found that under California law, the Apple conduct is anticompetitive. Basically, by not letting consumers know of other options that they may have to pay less and not use the App Store that, that's anticompetitive. Apple is using its power to basically prohibit consumers from knowing about other options to pay and other prices to pay. And so that's kind of where we find ourselves in a very evolving and complicated multi-jurisdictional global situation, and it will continue to play out. I think the question is going to be, in part, what are Apple and Google going to do in the face of this ruling, in the face of all this action. And we'll see kind of what their next moves are as I think the walls, to some extent, continue to close in on them around this topic, which they're clearly on the wrong side of. And so we're optimistic that we'll have more opportunities to have direct relationships with our consumers, use alternate methods of payments, sink some of the savings into R&D and other further aspects of our business, and we'll go from there. But we think it's good for developers, it's good for consumers. It's really continuing to be the steps in the right direction, and we're happy about it, but there's more to go.

Great. Maybe putting a finer point on Google, they've previously mentioned some changes to the Android app store policies, maybe including changes in fees. Do you see this kind of converting to a similar outcome at Apple over time? Or is that kind of a different animal in itself over at Android?

Yes. I mean, look, they -- Google, which I think has been more willing to be a bit more flexible, has postponed enforcement of mandatory IAP until March of 2022. I think they expected there would be rulings and changes between now and then, which would clarify the landscape, and indeed, that's what's happening. So I'm extremely, extremely skeptical. I think it's a very, very low, tiny probability that they're going to be able to enforce mandatory IAP in the face of all this regulatory and legislative scrutiny. So I think that -- I would expect that, that's off the table and that we're going to try to find some place where the world lands, where Apple, Google and everyone lands in terms of what's a more fair and appropriate app ecosystem. And I'm sure Google and Apple will probably be pretty closely aligned on that topic, and we'll see when and where that lands. But that's kind of -- we're in the X to get to that point, I think, over time.

Great, great. Maybe switching to kind of what you've learned throughout COVID. The past 18 months has been interesting, to say the least. Can you talk about some of the trends you saw during the pandemic? And then maybe more importantly, where we are today and how you're thinking about the rest of the year and into next year in terms of whether these variants continue to kind of weigh on engagement depending on the region or are there kind of clear signs that things may be really normalizing?

As a general matter, our business, I think, has been very resilient through most of the COVID period, I think, other than the first couple of months where really severe lockdowns and fear kind of paralyzed people. We've generally seen the business bounce back, certainly through last summer, again, a little bit in the fall. Winter was a little bit slower as again, we went into lockdowns and fear kind of came back. But I think since vaccines have started to roll out and the world has been more in the direction of normal from a mobility standpoint, our business has been performing well. Our Tinder business is performing extremely well. And in fact, most of our businesses are performing well across the board. So we feel good about where things are and the momentum we have. I think that a couple of the Asian markets, which had done a good job fending off COVID for a while probably for the first 10, 12 months, maybe longer even, while North America and Western Europe were battling with it, kind of fell into it a little bit later, were a little behind on the vaccination curve. So for us, the most notable market for that is Japan, where we have a big business with both Pairs and Tinder. And that market, now in its fourth state of emergency, which they just extended through September 20, has been one of the rougher spots. And India certainly had a very tough time as well. But I think that the hope is that now that Japan has seen vaccination rates climb closer to even where U.S. levels are that the state of emergency should end. They should start getting back to more of this kind of new normal, and we'll start to see some improvement in our business there. So that's the one market to call out that's probably significant for us that's still a bit behind the curve. There's a couple of others here and there in Southeast Asia and India certainly not back to where it was. But that's probably the roughest kind of spot around the globe. In Western Europe and the Americas, we feel very good about how things are going. I'm optimistic Asia will get there as well. So I feel good as the rest of the year trends through and into 2022. I'm hoping, as I'm sure everyone is on this call, that at some point, we'll be able to put this in the rearview mirror and kind of go back to full normal. People were expecting that to be around now, and it feels like we're still a few months away from it. But hopefully, we get to the turn of 2022 when it's more normal. We have a normal 2022, which should position us for a very solid growth and performance in 2022. I'm optimistic. And if you look at the trends around our business, engagement, time spent, interaction with video, all these things that we've done over the course of the pandemic, I think the signs are incredibly positive. Messages have been up, conversations have been up. People have adopted using online dating and the lack of ability to meet people in other ways, bars, clubs, restaurants, work, school. So this has become even more part of people's lives. And we think that we deliver a lot of value for the consumers, and they'll continue to turn to us. So I feel good about the -- very, very good about the prospects for our business.

Great. If we could switch gears a little bit now towards Hyperconnect. You recently closed the deal to acquire the business. Can you talk to us a bit about kind of the early learnings from the integration that -- it sounds like after the 2Q call, you're accelerating those investments and the synergies that you ultimately hope to realize from that deal.

Yes. I mean, I think over the last few months, as we were preparing to close and then closed the deal, it just reinforced our view that the team is extremely strong, capable, motivated, innovative, thoughtful, a pleasure to work with, and we feel really good about them. We think they're working on some very cool things around AI/AR, some safety and moderation tools, avatars, things like that, that we can incorporate in a lot of our businesses. And so we're pushing very hard to work through the integration. We have a large number of brands where the things that they do can be applied. And so we want to make sure they're positioned to supply as many of these features as our brands want as quickly as possible. So I think we'll get a couple of them done before the end of this year and then a few more things done as we make the corner -- as we make the turn in 2022. And there's going to be an ongoing thing where they're going to continue to innovate and build some very exciting stuff that we can apply across the portfolio. And we think it will be very impactful, obviously, especially some of our business -- bigger businesses like Tinder, like Hinge. If we can find some things to integrate, I think that will be a real needle mover for us. And then there are 2 apps also. I think we can help them continue to perform well and strengthen their apps, especially in some of the markets they want to get into: Japan, where we're big; Europe and the U.S., of course, where we have a lot of people on the ground. They've got some great technology, some great capabilities. So there's both sides of the coin making some of the things they brought to the table better and more successful and then taking some of the things they are building and importing them into our apps and expanding the use cases for our apps. So it's a very mutually beneficial acquisition, and it's going to take a few quarters for it to play out, but I think we'll certainly see the benefits as we go forward here.

As you look to make integrations with things like video, AR, VR, AI, technology into other platforms, is there -- you're beta testing. I'm not -- if you're there yet. It's an early kind of indication of the reception. And then how should we think about how that manifests in improved monetization? Does that just drive more engagement? Or are there unique ways to actually monetize some of these features to come?

I mean it's still early. We're not really there yet. Our expectation is for 2 of the brands to have some of their capabilities by the end of the year. But obviously, in video, which is where they're very strong, there's lots of opportunities as we build out video capabilities across our platform. You've seen some of what we've done at Plenty of Fish by partnering with a third party and building out live streaming capability. There's just a big gifting ecosystem that goes with that, that leads to significant monetization opportunities. And so my expectation is as we leverage Hyperconnect's capabilities, especially in video, and use that at some of our other brands, there will be significant monetization opportunities for us as well around virtual items and gifting and things of that nature. And we're really just at the very early stages of that, having done it a little bit in Plenty of Fish and with our Ablo business, and Hyperconnect has been doing it for a long time on their 2 platforms. And that's going to be a big effort where there's real upside for us on the monetization front.

Great. So maybe switching gears a little bit towards to folks on Tinder here. Tinder grew direct revenue about 25% in the second quarter, continues to be a dominant player in online dating. As you think about and we think about what features can be introduced, how should investors think about sustaining the growth that you've experienced today? Is it just a lot -- is it tied to some of the integrations for -- from Hyperconnect? Or are there kind of unique things to Tinder that you're kind of also working on that can continue to drive growth there?

Yes. I mean Tinder is kind of the place to go for online dating and meeting new people. It is the largest player in the space, and there are certainly benefits of having that kind of scale because there's just more and more people to meet. And so that is a big critical advantage for Tinder, and it's the iconic brand in the space. And so we continue to evolve it. It's hitting its kind of 10-year anniversary. And we really have a robust road map to really expand the experience that people have on Tinder. It's been known, of course, for profiles and swiping and matching. And we're expanding that to a much richer, multifaceted experience around people's interest and meeting new people through shared interests and things like that. So we're just in the early days of that. The road map at Tinder is not dependent on Hyperconnect at all. Tinder really crafted its road map. It is building the features on its road map. It's got an extensive road map that it's executing on. But now that Hyperconnect is in the fold, to the extent that we can accelerate things or make them more robust by bringing some Hyperconnect's capabilities into Tinder, we'll do that. And so there's no pride of authorship at the company. Whatever we can do to accelerate go-to-market time or use tried and tested things rather than rebuilding them from scratch a second or a third time, we will do. So I would expect that Tinder may leverage some things from Hyperconnect as part of its evolution, but a lot of that is being driven by Tinder. A lot of the building is happening at Tinder. And there's a lot of exciting things that you're going to see come out of Tinder over the coming quarters.

So when we think about some of the exciting things coming down the pipeline, can we maybe double-click on virtual currency and how we should be thinking about how that kind of manifests in the user experience over time and maybe kind of gamifying the experience to an extent? Can you expand on that a bit as well?

Yes. I mean, I think where we are on virtual currency, we think it could be very powerful on Tinder. We are a subscription company at heart. We grew up that way. And Tinder started as a subscription-based business as well but has achieved a lot of success with its à la carte features. And we rolled out the same monetization model around the world, which is lead with subscription but also sell à la carte. And especially when you go to Asia, à la carte is much more common, subscription is much more rare. And so the first question we pose to ourselves is, "Okay. Can we break apart the subscription features and sell them à la carte in Asia? What will be the take rates of that? And will that be something that people in Asia are more comfortable with and therefore, it's overall revenue maximizing to us?" And so we've started to sell the features that underlie some of Tinder and some of its subscription characteristics as one-off features on an à la carte basis. And we've been testing that in a couple of markets. We've been very encouraged by what we've seen in that in-app currency à la carte purchasing test in the 2 markets. And we've been expanding that test to a handful of other markets and more significant, meaning larger, markets in Asia. And if the success of that holds, then we'll look to expand that beyond that handful of markets in Asia and potentially take it to non-Asian markets as well. So we're continuing to test our way into it, what the right pricing levels are, what features make sense to do it with and what features, if any, don't make sense to do it with. And it's going to be a process to figure out how to adjust that model. We're obviously -- we have a successful revenue-generating business. We don't want to break anything in the process of testing this and working this through, but this is a longer-term project for Tinder. We're in the heavy throes of it right now. And right now, we're very optimistic that we're on a good track there.

Match Group has been kind of nimble at pricing based on what country it's in and which app. And as you maybe look to unbundle or unpack some of the subscription models, what kind of technology lift does that require to kind of have a similar app in a different country, having effectively different features for different prices? How complex is that? What kind of technology lift does that require from kind of a one-size-fits-all and then just toggling pricing?

Yes. I mean it hasn't been insignificant. It's been a decent amount of work and time to be able to accomplish that and not only from a technology standpoint, but also understanding how to market it in these different countries and what may work and what may not and from a pricing perspective. There's a bunch of facets to it. The good news is we've done a lot of that work now, and we're just rolling it out country by country. And so I think we're in the later innings of having built what we need to build in that area and get that all accomplished. And now it's just a matter of kind of refining it, taking the lessons we learn as we roll through different countries and figure out how to maximize the value of it. So like I said, I think we feel we're on pretty solid footing there. We've done a lot of the work, and hopefully, you should see a lot of upside as we go forward.

Great. And I had a question come in. And before we move off of Tinder, can you touch on some of the changes? The CEO at Tinder has changed recently. Does that change kind of the strategy at all there? Or is there anything to expand on, on that change?

I really don't think it should have changed the strategy at all. I mean we'll obviously give Renata a chance to kind of put her imprint on the business if she has new ideas or things that she wants to prioritize or do. But we've had a pretty extensive strategic review since Jim Lanzone came on board and really kind of built a robust road map and have a great idea of where Tinder is going and what we want to accomplish. And all those things are kind of midstream at this point or certainly being undertaken. And so I'm not expecting any kind of significant change in direction by any stretch. But we're always excited to promote somebody within to a new role. Renata brings a lot of energy and enthusiasm for the business. And if she has great ideas, the things he wants to do, then obviously, we'll leave her room to run and accomplish all of those things as well. So Tinder's real challenge now is it's got so many things it's trying to do and so many great ideas coming out of that place. It's just a question of kind of executing and making them happen. And so if we have other new ideas we want to do, we'll have to kind of figure out how to calibrate those and what gets a little bit deprioritized, what gets more priority. But we always -- we do that every day, every quarter. So that's always an ongoing balance of, "Let's move in this direction, let's move in that direction." But in general, I don't think that the Tinder strategy will change meaningfully. It's been very well thought through, vetted. Renata has done the leadership team there and has been in the front seat of how that strategy has been laid out. And so I'm not expecting significant changes on the Tinder side. It's really about execution and getting all this done at Tinder more than anything else at this point.

All right. Maybe now switching to Hinge, which saw really strong growth in 2Q. As you mentioned before, Hinge has been a bit more focused on serious user intent and outcome-driven results. So can you touch on -- does Hinge kind of cannibalize Tinder over time? Does Tinder end up being a strong kind of channel for Hinge because of that?

Look, I think there's a few things to keep in mind. One is that there are some separate lanes for those businesses. Tinder tends to be on the younger side and a little bit less serious. Hinge tends to be kind of for the relationship-intended millennials. So it's a bit of a different focus. That's kind of one aspect of it. The second aspect is that people do use multiples of these products at the same time. Our research would say 3 to 4 is not uncommon. So there definitely are people who are using both Tinder and Hinge and maybe others of our products at the same time. And so that's just a fact of being a dating business. And so I'm not really worried about cannibalization of Tinder by Hinge or anything else. We've been living with different products that compete with one another for a long time, and we really don't see that as a concern. So Hinge is continuing to carve out its own opportunity set. It's doing extremely well because people like the product and like the approach. It certainly has done well in kind of the big U.S. markets: New York, L.A., San Francisco, et cetera. And it is building share in kind of the secondary and tertiary cities in the U.S. now. And the same is true in other English-speaking markets where it's done extremely well in London and in Toronto and in Sydney and Melbourne in Australia. And so that's kind of Hinge's universe at this point in time. And I think it has room to continue to grow users in all those markets and continue to build share. And the next step for Hinge in its evolution is to start to go into other non-English-speaking markets, go into Europe, go into Asia ultimately and continue to roll through the globe. And we have a plan in place that we've had this multiyear plan at Hinge since we acquired it to focus on user growth, which we've been doing; focus on revenue growth and pricing and new à la carte features, which we've been doing, all of which has been extremely successful and very close to plan in terms of what we were expecting. And now for 2022 and 2023, the plan is to expand Hinge into newer markets, build translation capability, localization of the app, and we will do that. And Hinge will move from being kind of an English-speaking success story to a global success story, hopefully, in 2022 and 2023. That's our plan. We feel it can be a much bigger business than it is today. The growth has been phenomenal, tripling of revenue, doubling this year. And we think it's poised to continue growing at an extremely strong rate in the coming periods, and we're going to harness all that. That's our plan there.

Great. So recently, we've gotten some new KPIs, maybe zeroing in on revenue per payer. Why is that the right metric to focus on now? And can you talk about how you think about how big that number can get over time? You mentioned that users are looking at more than one app or using more than one app. Does that kind of create a limitation to how much revenue per payer you can get? Or is it kind of in a vacuum for Tinder or Hinge or other properties that kind of keep driving that regardless of how many apps the user is using?

Yes. I mean, look, I think ever since I've been the CFO of this company, we've tried to be as transparent with our investor base as we possibly can and give people the tools to really understand what's going on in the business. And when we first started, since the vast, vast majority of the revenue came from subscriptions, it made sense to have a subscriber count and focus on that. But the reality is, as we just talked about, an increasing portion of the revenue is coming from à la carte. That's true at Tinder. That's true at Hinge as well, which has done a phenomenal job with Roses and Standouts on the à la carte side, and that's been a big part of its success story. And now we've acquired Hyperconnect, which has a significant portion of its revenue, close to, let's call it, 90% coming from à la carte. So the company has evolved and our metrics needed to evolve as well to give people a better glimpse into the performance of the company. So we switched to payers and revenue per payer in the most recent quarter so that people can see the full picture. And I think it's been very well received. I haven't heard any complaints. And we think it's just telling a more fulsome story. So we're happy about that. And as far as the other part of your question, we will continue to try to find features that people find valuable. And what we've seen, which is sort of the basic rule of retailing, if you have features that people find valuable and worth paying for, they'll pay for it. And so to the extent we can continue to come out with more and more features, whether they go as part of the subscription bucket or whether they're on an à la carte basis or something else that people find valuable, then they'll keep paying for it. And that's the way to continue to drive revenue per payer higher. I don't think we're near ceiling. I think there's lots of room to keep going. Certainly, Hinge, we've made a lot of improvement there from a revenue per payer standpoint, and I think there's still more room to go. And that's true in different brands throughout the portfolio, especially in this environment where people have realized the importance of meeting other people and spending time with other people. And when you look at it, $15 a month is just not that much for something that makes people very happy, that they enjoy and they miss desperately during the pandemic. So I don't know exactly where the ceiling is, but our job is to keep rolling out products and features that people enjoy and will pay for and see value in. We've been doing that. We'll continue to do that. That should drive RPP higher, and we'll see where it goes. But a lot of people tell me, they say, "Look, what I pay for Tinder, what I pay for Hinge is a bargain compared to the benefits I get from it on a monthly basis. I would pay more for it," and we have to take that seriously. So we're looking at all sorts of different ways to show more value to the consumer, and we'll continue to innovate there and see how we can continue to drive our RPP higher. But that is certainly part of our goal. Our goal overall is to maximize revenue, whether it comes from more payers or more revenue per payer, but ideally, of course, a mix of the 2. And we're on track to continue to deliver growth on both sides of the equation and of course, on the revenue side.

Great. So maybe taking a step back as we think about the total addressable market. I mean what do you see as the gating factor? Is it kind of quite a bit of competition and winning share from kind of users who are already using online dating products? Or is there still kind of a significant runway to get improved perception with maybe older demographics or in certain regions? Which of those do you think is the driving factor to kind of online dating payer growth?

Yes. I mean as much progress as we've made in the 25 years since Match.com kind of burst onto the scene and as you get a feel about what online dating is and why they use the products, there's still a large resistor base even in the U.S. by our estimates. In many markets, 40%, 50% of people don't use these products, and they could be. And so there's still some concern with them. Certainly, safety is a barrier in some people's minds, and we've been investing a lot to try to improve the safety perception. I think in this environment where people have fewer outlets to meet people, that certainly has helped us as well. And so I think continuing to chip away at those who have resisted using dating apps, especially in the mature markets, is a critical piece of our strategy. And the other piece, which you mentioned is, look, while people in the U.S. or in Europe generally know about these products and they've seen them for a while and understand what they do, you start to go into some of these Asian markets, and these are still relatively new, relatively not understood. And we have to continue to educate the market about them and increase adoption, and we think we can do that. So that's a longer game. We're making really good progress on that front. Certainly, once it gets a little bit more healed up from COVID, a market like Japan, which has a low marriage rate, it's hard to find partners in that market, we think there's a lot of room in a market like that. It's a wealthy market. It's a sophisticated market. So even though we've got the top 2 apps in that market in Pairs and Tinder, we think there's lots more share to capture in a market like Japan. Korea is another market where we haven't had a tremendous amount of success, but we now have 400 people on the ground in Korea. So I'm really hopeful that, that will help us capture share in Korea. I think India still presents a nice long-term opportunity for us. It has had a tough last 12, 18 months. But hopefully, that's still a long-term play in India as well. So there's lots of places to go and continue to grow our business in Asia, and that's a significant component of the story. We've been pretty clear with people that Asia is a priority for us for a number of years. We wanted to get revenue above 25%. We're getting closer to that bogey. And we are continuing to push in Asia with people on the ground and innovation, and that's going to be a big long-term play for us.

Great. So maybe when we think about the addressable market in the non-dating category, you have Ablo, you acquired Hyperconnect. These are probably competing against more traditional media competitors just for kind of time. How do you think about how this expands Match Group's overall opportunity?

Yes. Look, I mean, I think you're right. We're competing with people for time spent online. People have lots of choices of how they want to spend their time online. And people now, especially with the pandemic, more of their life is online. Every aspect of their life is online, whether it's an investor call or whether it's ordering groceries or whether it's meeting someone for a date. And now it's shifted to meeting people with common interests or making friends and socializing online has become a bigger and bigger piece of the experience, too, which is definitely an evolution over the last 5 or 6 years. And so as you mentioned, Ablo and the Hyperconnect products and Plenty of Fish LIVE! streaming are other ways that users of our products can spend their time online to engage with others in their community to meet new people and enjoy themselves. And we think that's a big open market for us. It's a bigger TAM than the dating market because you're going to have people who aren't single who can still use the products in that instance. And it's a global opportunity. And so we think we're just really scratching the surface. Some of these things actually were bigger in Asia and are starting to come to the western markets, live streaming being a very good example. It certainly is much larger in Asia than it is here. But if you look at the success we've had with Plenty of Fish growing live streaming from nothing to a real business in a very short period of time. And I think we can do a lot more in social discovery, in live streaming and video generally. So we're just in the early days. Hyperconnect gives us a really good infusion of talent on that front, in innovation, because we didn't grow up as a video company and they did. So that combination for us is very powerful, bringing their video-based capabilities into the fold for us as video has become a bigger component of how people are spending their time. So we're in the early stages of kind of building for that next generation, but we're moving full force across our portfolio with Hyperconnect to build in video and build for the changes that are coming as people immerse themselves in more exciting, richer opportunities online so that it feels more real. It feels like you're in the same place. It feels more enjoyable than it does today when you do a one-to-one video experience. There's going to be a lot more kind of immersive technology that can really help make those experiences exciting. And so we're going to talk more about that, but changes are definitely coming along that front.

Great. So when we -- maybe as we think about Match Group's M&A funnel, how should we think about that from here? Is that going to remain an important piece of the growth strategy? And are there more interesting opportunities outside of dating in the same vein of Hyperconnect? Or is there still a lot of opportunities within dating to make strong strategic acquisitions?

Well, first of all, I think M&A is part of our DNA. We're good at it. We've had some really good successes with it. If you look at the Pairs acquisition in Japan, that's been a huge home run, gotten us to a #1 position in Japan. You look at Hinge, that app, we thought had some really great attributes but was having a tough time as a stand-alone business. And together, we've built a phenomenal business with huge runway and huge potential. So we feel great about that acquisition, as does the Hinge team. So very optimistic there. Hyperconnect's in the early days, but I talked about how good we feel about what we can do with them. And I think they feel good about being part of our family as well. So we feel great about our track record, and we're continuing to look for opportunities, whether it's in dating, which obviously we know extremely well, and there's other small competitors out there that we could add to the fold. Certainly, if they fill a geographic need for us or bring something new to the table, we'd love to see that. So that's on the table. I think international expansion continues to be a place where getting some more capabilities in certain markets where we're still a bit undersized would be appealing to us. And new technologies are always really interesting for us. We talked about Hyperconnect and then bringing video and some other cutting-edge things that they do to the table. If there are things we find out there that we think add to the pie and can be spread across our portfolio or even some parts of our portfolio, I think that will be very attractive for us to bring into the fold. So I think all of those are on the table. We look at this very closely all the time. Things have gotten pretty expensive out there. The markets had a very strong run. So we try to be price-disciplined in this regard, but we're a very cash flow-generative business. We're making progress on hitting our leverage targets by the end of this year. So we have financial flexibility to do what we want to do, and we'll continue to look for strategically compelling things to buy. And if we find them, we're certainly not afraid to bring them in, and we think we can create a lot of value in the acquisition game. So definitely a tool in our toolkit and will continue to be.

Great. Great. I know we got a couple of minutes here left. I got a question that came in back about kind of the Apple ruling. As users get more options to pay, what does that actually look like technically, I guess, to -- will it be easy to kind of get people to leave the app or within the app, kind of access an online browser to make payment? Or is that something that still needs to kind of be worked on? What this ends up looking like in the steady state?

Yes. I mean our experience with it on Android at Tinder where we've been offering people the choice whether to pay with their credit card or to use the Google billing system, a significant number of people have opted to use their credit card. They like to have the direct relationship with the developer, and we like to have the direct relationship with the consumer. And there are certain benefits of that as well. So we've seen very strong take rates when that opportunity has been available to be presented. So I'm optimistic that if we can find ways to let consumers know they have other choices of ways to pay that we'll see strong take rates. And I think the question is going to be in the details around how Apple decides to implement the changes that have been required by the injunction and the case because Apple really has kept their system very closed until now. And this is the first time where somebody, namely a court, is saying to them, "You need to allow the consumers to be aware of choice and you need to not require silence on these fronts." And so to the extent that we can have a smooth set of options for consumers and make it relatively frictionless for them, I think you'll see a significant take rate as we've seen on the Android front. The details remain to get sorted out. It's going to take a little bit of time for this to play out, but we're optimistic that if we can get there in a solid way and give consumers the choice in a smooth way, it doesn't make their lives too much more complicated. I think you'll see a strong take rate. So you got to watch this space, I guess, as it plays out over the coming months as we see how the injunction specifically gets implemented.

Great. Well, I think this brings us to the end here. Thank you for joining us today. We appreciate it.

Okay. Great to see you. Take care.