Match Group, Inc. ($MTCH)

Hi, everyone. Welcome to our first ever CEO Connection event. This is a new series where we'll dive into a topic of particular interest. We're excited to have you here on webcast and live stream. On earnings calls, obviously, we spend most of our time focusing on financial performance and operating metrics. So this event gives us a chance to go deeper on the consumer insights that inform how we think about the category and our product strategy. We get asked versions of the same question all the time, which is, has Gen Z basically abandoned dating apps. Our answer to that is no, not at all. They still want connection, but their needs around what that connection looks like have evolved. So today, we'll help frame an understanding around Gen Z. This is not a product presentation like our Sparks event, and it's not a quarterly earnings update. It's a discussion on the future of human connection and what we're learning from younger generations, how expectations are evolving and how those insights inform how we build products across the company. Today's discussion may include forward-looking statements. Some of those risks related to that are listed here and in our filings with the Securities and Exchange Commission. Before we get into the research, I want to introduce today's speakers. I have with me 2 of the world's foremost experts on Gen Z and on consumer insights. I'm joined by Emily Dods, who leads Global Brand Strategy at Tinder. Before coming to Tinder, Emily spent over a decade in creative advertising, where she helped brands bridge the gap between culture and data. She helped brands like Meta and AT&T connect with impact to their consumers. And also here with me is Max Eisenberg. Hello, Max. Welcome. Max leads consumer research across Match Group. He has a PhD in public policy with over a decade of peer-reviewed published research on risk perception, vulnerability and public safety. These are 2 of the people closest to how young daters are thinking, behaving and talking about relationships. They spend all their time on research, interviews, focus groups, doing original consumer work behind these insights. So my role today is to just sort of provide a canvas and highlight what their insights are and lead the discussion and then moderate Q&A. Max?

Great. Thanks, Spencer. Hi, all. So Spencer noted today is about understanding how Gen Z is thinking about relationships and connection. We'll first start with an overview of how we're listening to Gen Z across Match Group and the ways that we're collecting insights regularly. Then we'll spend a minute walking through what we're seeing in the data. Emily will walk through the 4 evolving expectations that we're seeing among Gen Z for how they want to connect. We'll connect then those insights with the product evolution that we're seeing with Tinder and Hinge in particular. And then finally, we'll look ahead at a sneak preview of the emerging insights we're seeing amongst older Gen Alpha, and then we'll open it up for Q&A. Great. So let's start with the broader context. And before we fully get started, I want to share with you all how we collect insights that we'll be sharing today and across the Match Group to inform marketing and product development. So one of our advantages at Match Group is the amount of time we spend listening to our consumers. We are always on in conversations in so many different ways with Gen Z. Our insights do not come from a single survey. They come through a vast array of different methodologies. This can include focus groups of various different sizes, traditional survey research techniques, ethnographies, in-person observations, intercepts. We meet them where they're at. We're not just saying who's in L.A. come to us for convenience. We go where it's often very difficult to talk to them in college campuses, in the third spaces where they like to hang out, coffee shops, social listening plays a massive role. So we're trying to be everywhere and really take advantage of the breadth of insights that we're seeing as the multiple different ways in which people prefer to communicate and gathering our insights to paint a more holistic understanding of Gen Z attitudes and behaviors. So we're studying not just what people do, but how they feel about their own identity, ways of connection and journey of self-exploration. And that gives us an always-on window into how young [indiscernible] are evolving. You see here that we say that we have a community-based research panel that's been going on for several years now, which we call Z Labs, which gives us immediate access to talking to various Gen Z cohorts across all our brands. Our research is also not limited to the U.S., but we have researchers across several continents and are regularly doing research in over a dozen countries at any given time. So this -- all these different ways of collecting insights, this gives us a way to separate the short-term noise that we're seeing from deeper, more foundational behavioral shifts. So now who is Gen Z, the reason why we're all here. First and foremost, Gen Z is not a monolith. Within Gen Z, there is a lot of variation, as you can say, with any generational cohort. From our research, we make sure that we encompass a wide range of different identities, whether it's sexual identity and sexual expression, race or ethnic identity, urbanicity, religiosity or the role of religion that plays into people's lives. The intent is not to reduce [indiscernible] in this experience by any means. However, it's important to acknowledge that there are some shared truth, which shapes people's experiences across any particular generational cohort. For all intents and purposes here, we're going to define Gen Z as between 16 and 29 years old. And within this generational cohort, one thing that fundamentally changes them is that they are identifies them is that they are digital by default. They have grown up specifically consuming different forms of Internet media, whether it's through social media or community groups. This specifically was shaped through the pandemic. These formative years during the global pandemic created limited face-to-face interaction. There was also a lot of economic instability, high political polarization, rapid social change, all of which has huge implications on the way they see the world, their psychological outlook and their preferences for socialization. Gen Z are also incredibly emotionally literate. We hear this all the time with research that therapy language, understanding their boundaries, exploring their identity and how they show up in terms of like preparing for themselves and what their priorities are. This is so fundamental for the ways that they think about connecting and the ways that they walk and approach the world. We also see this specifically amongst Gen Z women. They find that going to therapy is really important for finding a partner and that this language of establishing boundaries and even the diagnostic terms are really fluent in their lexicon, and it really speaks worlds to how readiness and emotional and psychological safety is so important when they're thinking about building new connections. There's also a phenomenon which we refer to as milestone drift. Many researchers, external to Match Group have talked about this phenomenon in different ways is that there are these key milestones that are oftentimes prized in American society that are so emblematic of freedom and independence. So for example, getting your driver's license, moving out of your parent's house, these are still, by and large, very important to Gen Z. But what we're seeing is that they want to achieve these milestones on their own terms, perhaps in a different way and perhaps it's not linear on a different time line. They're also paving real-life connection. So perhaps despite or because of the pandemic, they're growing up online and they hold a lot of nostalgia for a time or counterfactual that they never really knew existed. And so they are placing a high premium on these in-person connections that whether it's starting a connection offline or just having some role, they do recognize the importance of a face-to-face interaction to complement the digital experiences, which they also value and are so integrated into their lives.

Is that -- I'm going to interrupt. Is that because they're using their phones and their computers all day at work. And so then they want to put that down to connect in-person? Or is it because they know that, that digital layer is sort of bad for them on some level. And so this is like eat your vegetables and they know they need to. Like where does that come from?

Yes, all of the above. It's functional. It's like I want to put my phone down, I need to take a break. I want to prioritize, preserve my time and manage my emotions and see that there is so much value to getting to meet other people. there's also -- yes, you can feel free to...

No. I mean a great example is thinking of when COVID and lockdown and the pandemic hit them in their formative years. For younger Gen Z, that's a bit older middle school, younger, lower cost than high school. And then for older Gen Z, it's older high school, lower cost than college. And when that is taken away from you in a really formative time, it becomes ever more present and important as you age because you recognize, oh, this does feel different, you crave it. You know you feel different after the fact. So they seek it out ever more presently.

Absolutely.

Great segue.

Perfect. So again, as mentioned earlier, Gen Z has grown up as truly the first digitally native generation. Other generations, of course, have leveraged technology in many different ways. We had Match.com. But what is different is that this has fully been native to them. One of the reasons that they do look to put their phone down is because they've never had this counterfactual and they're wondering what would this experience be like if I didn't leverage technology as the first starting point or if it had a different role, and I'm wondering different ways to use technology in the process of making new connections, which is very exciting. And so the Internet doesn't have just influence how they communicate, but it fully transforms and shapes the lens in which they view the world and decide to communicate, whether it's through symbols like emojis or me. This is absolutely like a core and fundamental part of how they communicate. So the digital world is kind of defined in 3 ways and influences them. One is uncertainty is the norm. During this era of the pandemic, which defined them, there was, as mentioned previously, a lot of financial pressure, the perceptions around the macroeconomic certainty or uncertainty that is going on and the implications on their personal lives, political instability. And so for them, uncertainty is the norm. Many Gen Z are telling us consistently that they don't know what the future is going to look like. Sure. Some of this is a part of life stage that they're placing more value on the present, but specifically for Gen Z because they have been so inundated with this information about this uncertainty, they're not really sure who to trust besides theirselves and that's why they place a high value on their own readiness before making the next steps and being cautious around decisions.

Just on the point about communicating through memes, for those that work on Wall Street that are watching this that maybe it's not normal in a presentation to see meme. I remember only a couple of years ago, the first time I was in a business meeting and there was a slide deck and there was a meme in it. And I remember thinking unprofessional like that's so weird to see some gif. And now it's like constant, right? It's like every meeting I'm in, every slide basically is a meme. And I know that hasn't made its way to certain circles out in the general business community, including probably some people watching this, but like that's just the way they communicate. And I mean, even in the workplace.

Yes. So much can be said with a simple gif or meme. It's great.

Exactly. Great. Another influence is that information for Gen Z is everywhere and it encompasses everything. So social media has really enabled Gen Z to fully absorb and also create a wide range of information opinions, takes on the world's biggest problems to the problem is that might not seem as big but also still massively impactful saying how you expect your boyfriend to show up or who pays for the first date. This also, at times, can create a sort of emotional whiplash. So one time, one second, you're looking at a quick reel that gives you anger, another one that gives you joy. Another element is that this is something we constantly hear from research is the feeling of being under surveillance and hyper scrutiny whether or not it's online of saying, I feel hesitant to share my opinion or I'm really cautious about what I'm going to share this photo of myself, so I'm going to focus a lot on creating to being in a classroom and saying, "Yes, I'm around a lot of people, but I'm just worried that someone might fill me giving the wrong answer to the professor or that saying, "Oh, I do want a Texas person I want to be friends with," But what if they screen shot at and what this might damage my reputation .

It gets [indiscernible] to say a specific problem in academia, students not expressing their opinion in the classroom because they're afraid...

Yes, this is a big fear. And of course, it has implications on self-presentation and curation, both of yourself and the information that you're receiving.

Absolutely.

And another misconception that we regularly hear is that, oh, Gen Z are not open to romance, they're kind of done with dating or it's not a priority. We very much disagree. Unequivocally, we hear time and time again in the research that Gen Z daters absolutely do believe in human connection. But they're just defining how and when they want to get there on their own terms. We conducted a study with the Kinsey Institute at the end of last year. And one of the key findings was that 4 in 5 Gen Z singles believe that they will find true love. This is amazing. This is a significant majority. And what was really telling is that it was actually statistically significantly higher than total 18-plus singles. So not only do they want it, they might want it more than we look at the total single population. And so they overwhelmingly still want to find love and they're comfortable using technology as part of this process. So if there's anything to take away, it's the desire for human connection, absolutely, remains durable, but what's evolving? Are there expectations for how they want to connect, when it should happen. And we're trying to evolver tools to make sure we can support them in the ways that make sense for them and how they want to.

Love is not lost, definitely not lost...

Yes, very much alive. And Max has done a really fantastic job of laying out the broader context that are shaping Gen Z. But we want to get a little bit more specific of what we at Match Group are looking at when we think about Gen Z. And there are really 4 core expectations shaping how they connect that we're going to dive into today. The first one is agency, right? The insistent that connection must be on their own terms and on their own time lines. And another important one is realness as a generation that we talked about, who's grown up online in the public eye. They're looking for authenticity, for humanness, for realness across everything that they do. And that leads really nicely into momentum. Momentum is where function and emotion really meet. It's the functional desire for lower friction, but also the need for the emotional experience to be valid to feel true and you feel like it's moving forward. And then, of course, we'll dive into trust. This is so important that the emotional and physical safety feels present and true so that you can be your authentic self and show up with that realness that they're craving. And so held together, these 4 pillars, really describe how the expectations around Gen Z are shaping and changing and evolving when it comes to connection. Going to dive deeper into all of them. But first, we're going to dive into agency because relationship and connection, as Max was just saying, still really matters for Gen Z. They want connection, but they're demanding it at their lives and not the other way around, which is why we see that 44% of under 30s want to spend time on my friends instead of love. Or about 1 in 4 of under 30s list getting into a relationship as a primary goal for next year. So we see that they want it. But what we do see that's a little different when Gen Z is that the hierarchy of priority falls in a different order than it does in other generations. So things like identity exploration, preparedness, friendship and community, career and personal growth are supplanting the dating sometimes here and there. And increasingly, people want connection to fit their lives rather than organizing their lives around connection. So that's an important thing that we're paying attention to is that the agency and desire and the time lines are a little bit different for Gen Z.

Interrupt you and ask about identity exploration. One, the percent of Gen Z that identify as seeking potential partners of either gender is fascinating and very different from prior generations. Can one or both of you talk to that and why you think that is?

Yes. Do you want to -- I can start.

I mean we do see in the data that, especially with younger Gen Z 18 to 24, a higher instance of exploring it and figuring it out and diving a little bit deeper. And tools like that we provide actually help them explore that in Pokearound because it is more socially acceptable to be a bit more open, to be a bit more exploratory. And this generation takes advantage of that, which is really exciting, I think, if you have [indiscernible].

Yes, exactly. And I think it just builds on the longer trajectory of just being more openness to, for example, we're talking about sexual identity, clear representation of the media and all these cultural artifacts help them feel more comfortable. And it's just wonderful to hear in schools all across the country that many just feel open to even questioning masculinity norms, not even just necessarily sexual identity. And so this ties into the earlier insight on mental Wellness and that for many Gen Zs, there is great space and digital communities play a big role in making them feel comfortable for people like them to even question, not necessarily like change their sexual identity or explore, but just being open to the idea that things might be fluid. I'm just learning and I'm in this process of self-discovery.

And so alongside agency, which is definitely something that is more of an internal driver when you think about the human experience. Our next one that we want to explore is both internal and external, and that's around authenticity and realness. And one thing we hear consistently from all of the young people that we speak to, if they want their experiences and their connections or interactions to feel more genuine, to feel more real. And with this, they want this authenticity, but there's also this pressure of protectionism, judgment and, of course, rejection that goes alongside of this. Because this pressure to be perfect online is making this authentic connection that they crave a little bit harder and a lot more vulnerable. So the sphere of rejection in particular, is one that we pay a lot of attention to in this category because there's this concern about how they're being perceived and this makes dating feel really high stakes and super high pressure because when you've grown up in a world that's online, that anything can be snapped at a finger test moment. And in these spaces, these social spaces that reward reactions and judgments and teardowns, showing up authentically becomes a really high stakes active vulnerability in your day to day. So as a result, it's not so surprising when 81% of Gen Z want to move more slowly when getting to know someone more romantically. They want to really understand the playing board before they dive in and get vulnerable. And so there's also the fact that 1.7. A gen z is 1.7x more likely than total singles to be fearful of the dating process because of other opinions because of that prospect of judgment. And this reality is really why we so often hear from users that they want lower pressure, higher context opportunities to get to know themselves and to know other people because this desire for self-expression is one that opens you up for vulnerability, but also opens you up for a better connection in the long run.

So we're going to talk in a moment about the implications on our product road map and sort of what we're doing about all this. But let me be devil's advocate here for a second. You're saying young people get stressed out about potential rejection because there's this need to be performative and perfect. But dating apps sort of are all about putting yourself out there and subjecting yourself to rejection because your profile is being shown and most people are choosing, no, they don't want to interact with you. So how can dating apps have product market fit then if this generation is so worried about rejection. The whole premise is kind of projection oriented.

Yes. I mean, dating has always had rejection as a key piece of it, whether it's on the dating apps or not, right? You put yourself out there to see if someone wants it and you get your answer based off of that other person. But ways to combat this is to offer Gen Z the signals in the context that they've grown up with and that they crave. Things like more detail like your astrology sign or your favorite music mode or [indiscernible], offers these signals that they're accustomed to and being more fluent in those in the experience allows them to better find a match more quickly and more efficiently and hopefully reduce that friction. Awesome. So showing up authentically, as we've said, takes effort, it takes energy, and it takes time, which brings us to our next pillar, which is momentum. And for Gen Z momentum is really twofold, right? It's this perspective of efficacy and function as well as the emotional piece of it. Functionally, people want to see results and actions as a result of their effort, right? That is just a human desire, I would say. And so for Gen Z, particularly in this category, it's about quality over quantity. And at the same time, it's also about that feeling like you're moving forward, that even though a date isn't like your person, isn't your end game that you feel like you've taken -- you've learned and earned something out of it that you've got momentum that you're moving forward, which is why I love this quote that I will read to you from a young female nonuser, actually, in saying that I'm really intentional with how I use dating apps. Even if I get a lot of likes, I only respond to people who feel like they could genuinely go somewhere. I want to make sure we're actually compatible before I invest time on more -- on meeting up in person. So in this language, there's so much here, right? You've got that functional language of investing time, but there's also that emotion because this is a vulnerable space to be in of are we compatible? Do I feel like this is going to work? So that's why momentum is something that we pay a lot of attention to and not only the experience but in the actions that we build that they hopefully take because when it comes to this experience, Gen Z wants to see and feel the fruits of their efforts and their labors. They're not necessarily asking for more interactions, but definitely asking for better ones or ones that make sense to them no matter what. So the goal of what we do, everything here at Match Group is to move from Match to Spark to real-world interaction with less effort, least [indiscernible] effort. So when we talk about momentum, we're really talking about relevance. It's quality. It's helping connections actually go somewhere, and that is a huge key piece of this experience and the emotion that sort of lays the backdrop across a bit?

If you take the really long term, say, 10-year view, is it fair to say that 10 or maybe 15 years ago, there was more novelty to online dating and the bar has been raised because of kind of the user expectation around product efficacy is a lot higher today because the entertainment value or the novelty has faded and now it's all about, does this thing actually get me out on dates?

I mean, absolutely, like we think about the context in which we show up a lot, right, on someone's phone, home screen or alongside things like Amazon, Uber food order app. So there's this expectation that in that experience, you're going to get what you asked for. You're going to get what you decide. And so those contexts, they're part of the groundwater. It's important that we keep that in mind that the efficacy is a piece of it. And also just take care of the beautifully vulnerable spaces that we're operating into.

Yes, I mean, the bar -- when you describe it like that and you think about the other apps where you get basically instant satisfaction, like we already have a lot of challenges in this category because the best possible case is you open the app, you got to match and you get it into a conversation right away. But even still, there's friction to get to an in-person date that's going to take a couple of days -- like there's lots of friction.

People have lives, too.

Right. So it just increases the burden on us to improve efficacy of products with things like better recommendation algorithms or better ways to start conversations inside of chat or a more performant app or all these features that we focus on are more important than ever.

Absolutely.

Exactly. And to Emily's point [indiscernible] remains essential. People want to move at different time lines. Not everybody is in the same time line and might want to feel comfortable scheduling a date or even exchanging content formation after a week or 2 when others are prefer to do it immediately and assess compatibility and vibes more in person.

Yes, absolutely. And this is a perfect segue because none of this works without trust. Trust is the starting point for us at Match Group, but more importantly, for Gen Z, trust isn't just table sake, right? It's the foundation for showing up as their real self. Both emotionally and physically. There's that physical safety piece of it, too. And it's shaped everything Gen Z has navigated outside of our ecosystems, too. As you were so wonderfully stating up at the top that this generation has come to be -- and come of age amid real uncertainty, whether it's economic pressure or political instability, rapid social change, global pandemics, this context really, really matters, and it shapes them at a very formative time of their lives. When the world outside feels really unpredictable and unsteady, the stakes of personal vulnerability really changed. So when you think about sharing who you are risking that rejection that we were just speaking about, trusting a stranger that feels really, really high in this seemingly unstable and uncertain world. So with this context as a backdrop, it makes sense that when we speak to these young people, they're around 1 in 3, 18- to 29-year old singles have concerns about sharing their info on dating apps, right, of putting themselves out there in those ways or that 35% of the 18 to 29-year-old women, note that they fear feeling about being misled by someone's intentions on the app or even their identity during the dating process, right? You need to pay attention to these signals to feel comfortable. So trust and safety aren't separate from the dating backdrop. They're really truly tied to it and lay such a key piece of the foundation of showing up in order to connect and find romance. And yes, this generation can be cautious about identity, about intentions, about information that they're sharing and promoting. And if users don't feel safe or comfortable, they won't engage meaningfully. So it's a really, really important piece of the puzzle that we pay a lot of attention to.

The intersection of kind of physical safety and emotional safety is interesting. And what popped it in my head when you were talking, Emily, I'm an alumni interviewer for my college, and I've interviewed 5 to 10 high school seniors for the last 25 years. And so I've got a pretty good longitudinal interaction. And I noticed about 5 years ago, maybe 7 years ago, these high school seniors started bringing their parents or they would say my parent is waiting in the car outside. And at first, that was a little surprising. That's sort of one of the tests of this is to see if they have their act together as a high school senior and they can be self-motivated and organized. And I was like, I didn't think that much of it. And then in the last couple of years, increasingly, the parent is in the Starbucks with them at another table or nearby or even if I do it in my office, they ask if they can wait in the lobby. And so it's that intersection of physical safety because they know they're meeting a stranger and they want to make sure that they're safe, but also emotional safety, they know there's someone nearby that's there for them. So it's really changed in those 25 years.

No, it's a great example, and it's that crossover that makes you BU, right, so that they can hopefully ace the interview and [indiscernible] school of their dreams.

So taking all these insights together, these are not just interesting observations, although many of them are, they really are baked into our product strategy. I think Max, you did a great job describing at the beginning, just how global and deeply embedded this research is. But if research doesn't also make its way into the product and our marketing, then it's only academically interesting. It's not actually applied. So we've done a really good job of making sure that we apply these types of insights into our product development. And I'm not sure that was always the case in years past. I think 1 of the reasons that Match Group kind of lost its way there for a couple of years and maybe missed some of these changing consumer attitudes as Gen Z aged into our category was because we didn't -- either we didn't have the network of consumer insights and/or it wasn't well baked into product development and marketing. But I feel like today, we're in a much, much better place on both of those fronts. So just to tick through some of the products, Tinder's role is not to become Hinge. Tinder is all about possibility and discovery and lower pressure connections. So the Tinder road map that leverages these types of insights has been focused on building features like events and double date, which help make dating more social and less isolated. Astrology mode, which gives users this lighter weight way to start a conversation and express their personality. Are you sure? And does this bother you, which create more respectful interactions. We're really encouraged by a lot of these features and how they're doing. Hinge is approaching this same generation, but from a more -- a different relationship mindset. So the way Hinge focuses on these types of things, if we can go to the next slide, please. For example, is by focusing on fewer but more meaningful interactions. So Hinge features like friends take or data ideas or signals, which is a badge that indicates whether you're there on Hinge with true intentionality or Match Note. These are all features that ladder up to helping people show that they're there with care and context. So Tinder is about lowering the stakes for discovery. So it's a more chill, relaxed environment. And Hinge is about raising the bar for intentional dating. We think these 2 brands coexist really well. And even though they're both going after to a large extent, people in the same age demographic, we think they serve different consumer needs. Metaphor that I like to use that we've talked a lot about is in between a music festival and a music concert. So if you have tickets to a music concert, you know you're going to see, Ariana grande, Sabrina Carpenter, Taylor Swift, Olivia Rodrigo, whoever you now my musical taste. You've got ticket for that show at a particular point in time. You know what you're going to get. In fact, I just took 5 Gen Z friends of my kids to a concert, and they were looking at the set list ahead of time, which is posted online. I was like, don't you want the serendipity of not knowing what songs are going to -- I would never have looked at the set list when I was there. No, I want to know what I'm going to get. I'm going there with intentionality. So that's a concert, that's like Hinge. Going to a festival like a BottleRock or Governors Ball or Cochela, that's about kind of vibing your way through the experience and the serendipity of maybe I'll watch 4 or 5 songs. And if I'm enjoying it, I'll stay for the whole set or maybe I'll leave and I'll go to this other set that's playing at the same time or I'll go check out some of the experiential brand activations and sort of vibe my way through that. And the journey is the destination in the case of the festival. And so young people love concerts, they love festivals, but they play different roles. And that's how we think about Hinge relative to Tinder. So I think -- next slide, please. Max, over to you for some thoughts on the next generation.

I do love that metaphor.

My favorite.

So the category's next generation of Gen Alpha is already forming. They're coming into their own identity, and we're seeing a lot of their social and emotional behaviors. First and foremost, Gen Alpha are very young, ages 2 to 15 years old. And so for the purposes of this, when we're talking about our research or Gen Alpha, we're really referring to older Gen Alpha and some research that we conducted amongst 14 and 15 year-olds with parental consent. And we did this research to validate that the work that we're doing right now for Gen Z and younger Gen Z for Tinder and Hinge in our products across the portfolio will resonate once Gen Alpha turn 18 are ready to start dating on our products. But the preliminary research, which should absolutely be treated as an early signal and not at all forecast, we remain quite optimistic of some of the preliminary findings. So for example, Gen Alpha are less pandemic defined, they're more optimistic and even in some ways, enthusiastic about adulthood, they talk about their really thoughtful relationship that they have with technology and their phones in social media, 3 and 4 of Gen Alpha open to dating throughout their high school experiences. So again, these are really promising signals. And what's behind it, we think are like many different underlying factors, one of which is that their parents are mostly millennials, and millennials who have seen this transition and understand a counterfactual of what a life like and social interactions were pre-pandemic. Another one is that in many jurisdictions across the country, schools, particularly public schools have implemented phone bans. And this, in particular, we've heard from these Gen alpha have really changed the way that they're connecting in lunch rooms, in the playground, even recess in time and what they expect and how they use their time during their extracurriculars and at home, and it really differently changes the ways in which they engage with social media and consume different forms of media.

Yes, I see this in my own situation. I have a 21-year-old who is Gen Z and she had phones in school and missed critical years of high school in the beginning of college because of COVID. And so she is very similar to the way you're describing Gen Z, which is kind of reticent to put yourself out there. And then I've got a 15-year-old who have no phones in school because the ban happened since then. She has positive recollections of the pandemic because that was like a fun time when I got to be at home, but it didn't kind of affect the way she forms human connection. And she and her friends are super social. They do date, they hook up. They do like big group hangs at people's houses, like it's very, very social, it's very different between the Gen Alpha and the Gen Z. So is it fair to say maybe -- I mean, am I generalizing or is Gen Alpha a likely reversion to the mean, where from a dating app standpoint, it will, we think, look more like past generations or not sure yet? Or what do you think?

It's a little early to say because there are signals. However, both might be true. We do see some -- they have some shared DNA with younger Gen Z, right? Like they have -- are also digitally native. They are very fluent with some of these mental health language as well as using these different tools for connecting online. So that is very comfortable and native to them. At the same time, these are promising signals that potentially a lot of these milestones might go back to what they were in older generational cohorts because they were less defined by the pandemic because the face-to-face interaction that they're having is still happening in their critical times of cognitive development and social development. So too early to see, but optimistic.

Asking the right question.

You mentioned -- or we discussed a little bit about different trends regarding sexuality and sexual preference. Another thing that occurs to me that's different than millennials is Gen Z and Gen alpha potentially its relationship with alcohol. What -- tell us more about that? And what impact do you think that has on these generations?

So there's a lot of mixed information about alcohol consumption. Generally, it does appear in many ways for Gen Z to be down compared to generational cohorts. But it's not just overall consumption. It's more interesting to look at what types of alcohol are being consumed because in some ways, in some particular brands, we do see a growth. But that absolutely does impact behaviors. To your point, exactly on like the festivals versus concerts, we are seeing Gen Z, again, also the mental health language, prioritizing wellness in different ways. And one of that does mean reducing the amount of alcohol consumption. So not a generalization. We still know that there is a lot of alcohol consumption occurring amongst Gen Z who are over 21 on college campuses and other places. But yes, to a large extent, it is impacting social behaviors and what the nightlife seem looks like? I mean, look around in L.A. as well as you can see...

We see Tinder events in L.A., the [ dry ones ] are very popular, the ones that are kind of more about self-improvement or learning or personal growth, Pottery class is [indiscernible] as popular or more popular than the happy hour. I think we're going to turn to questions.

So a number of -- we've got a lot of great questions here. Some have come in from some Wall Street analysts and some of them have included their names, I'll include their names for attribution. some of the questions have come in anonymously, but I'll just jump in here. So Cory Carpenter from JPMorgan asks, how do younger Gen Z and older Gen Z behave? And are there a major difference between older and younger Gen Z?

Yes. I mean absolutely. So we define older-gen Z as 25 to 29. And what really defines them is life stage. We take a really close look at life stage across Gen Z because -- as we've stated, Genz is not a monolith. They have a lot of nuance in detail. But what we do see with older Gen Z is because of their older, they're more comfortable in these app spaces and leveraging dating apps in order to go on dates to find those connections because they're less socially embedded in their networks like from university or early school places like younger Gen Z is. younger Gen Z, which is 18 to 24, they really find that they're socially embedded more so as mentioned, because they're in those university spaces, those early schooling. it's easier to meet people by proximity and they're comfortable with that as we were just discussing with sort of some of the -- how COVID sort of impacted their formative developmental years. But what is really notable that across both cohorts regardless of life stage is they actually both rank #1 intent is serious relationships that they want something longer term. But the way that they approach that and access that is different based off of the late stage that they're currently active in. And of course, that varies across Stage 2. You've got some people that may be 28 [indiscernible] broke up a very serious relationship. They might be seeking in sourcing relationships differently than someone they're same age woh hasn't had that longer term or something more serious as a relationship breakup like that.

I'm thinking of a conversation we had recently with like a younger Gen z women of 23, I believe she's in Raleigh, and she says, yes, absolutely we want a serious relationship. I'm really going to put into high gear when I'm much older. Okay. When is that 25? It's like when the next life stages. So Emily's point readiness and life stage play a massive role. But again, there is still this financial desire for a meaningful connection as the goal. It's just how and when they want to approach, it looks a bit different.

Okay. This user or this listener asks, do you think Gen Z will age into more traditional dating behaviors? Or are they permanently changing the category?

I believe they will. I believe that traditional milestones will prevail and that we're seeing this again ot Emily's point to the importance of life stage and readiness that, yes, we're seeing that as we're getting older, they are going into these more traditional milestones, whether it's about connection or more broadly trends that we're seeing around moving out of their parent's home, finding a certain sense of economic or financial stability.

Yes. When I was running Zillow for a long time. We did a lot of research on this question around homeownership because as homes became less affordable, and as the sharing economy grew and people were not buying cars, they were using ridesharing or they were not buying their own music. They were using streaming or not buying their own DVDs. They were watching -- streaming TV and film. There was this question of are people just not going to want to own homes anymore, and they're going to -- it's going to become kind of a renter nation. We did tons of tons of consumer research on it. The answer is no. People still want to own homes. They're just going to do it later. So the median age for first-time home buyer now is 40 and it used to be 30 about a decade ago. So they still want to own homes. It's still very, very high on their aspiration list, and they're still going to, they're just doing it later in life. So it sounds like you think something similar is playing to this category?

Absolutely. And that's why we spoke to agency. It's the time line that shifted a little bit and how one want to get there. It's not always linear, but as stated, #1 intent is a serious relationship, they still want it is just a matter of the journey of getting there and when they hit that milestone.

So why -- I have a question which wasn't submitted, but it's -- I feel like it's sort of the elephant in the room. Why do they not -- why does GenZ not want meaningless hookups, the way millennials did when they were 18 to 25 and hookups were like, okay, and now there's a stigma against shallow, meaningless hookups, it sounds like every other research we've shared is that they don't want that. They want more intentionality. What's wrong with hookups and why doesn't GenZ like them?

Not all millennials wanted meaningless hookups at the time, but it's more so that it was accepted as a social norm as one of the process to finding a meaningful relationship. There was a lot of social pressure and that this is one of the ways to demonstrate interest and single interest. Gen Z, as mentioned with the prioritization and understanding of readiness in mental health, said, this isn't the only way to get there. There are other ways to demonstrate interest and more authentic connections that are not solely rooted on sexuality of ways to [indiscernible] and find companionship and express values. So the norms are changing, more so of express desires, the way that they see companionship. This translates to sexual behavior, but the fundamental desire for human connection is ultimately the same.

Yes, absolutely. And it brings to mind this discussion that we had around [ vice ] and alcohol, right? There's this desire in an instable environment of control and controlling the thing that you can. And I think that's why we see a lot of reduction in some of these mind-altering vices that changes and that goes similarly with -- like actually engaging in sex, you reduce control, you reduce risk of cancellation of doing something wrong. And so I think in that subsegment of GenZ is also probably an emotional response to why there's some of that reduction in sex.

Jason Helfstein from Oppenheimer asks, GenZ appears to lack certain social norms that would facilitate successful dating. As such, even successful matches don't seem to convert to dates or first dates don't convert to second dates. Do you feel this is something Match Group needs to address or correct to make Tinder or Hinge successful over the long term? I think the way we view it is that GenZ has their own set of social norms and a lot of those exist digitally. As you were just mentioning with memes and gifs showing up in the workspace, that is a fluency and a way and a social norm to communicate. You don't send someone a text to explain how you're feeling, you send them your favorite meme or your favorite sticker, your favorite emoji, which is beautifully artful way to communicate your emotions, but that is the baseline social norm. And so the way that we use that and translate that for our products and our purposes is giving an offering higher context ways to communicate, right? It's offering things like a music mode or an astrology mode on Tinder to really showcase those signals and that juicy context and details that they're craving so that those social norms can be embedded in that experience and use to find a higher quality, better match in that way?

On the research side, this is why it's important to triangulate different sources of evidence. There are so many different ways to define and interpret those norms. So for example, if you do a survey and we do surveys like this all the time, where you say, what was your most recent date. Why does date to Genz is so different from generation? So for the social norms and millennials, many might think it's a one-on-one, could be, let's get a drink at the bar, but for Gen Z, this might be the third or fourth date already. And so what might be, in some ways, traditionally constructed in a survey as a date they're already there. And this is why Tinder is building things like [ Avant ] or double data to reshape and meet them where they are.

Or in double date now where on Tinder you can indicate your date ideas.

Exactly.

Many of the things listed there of date ideas, people of my generation wouldn't think of as a date. And I was talking to Gen Alpha person the other day, actually, and I used the term date and they kind of looked at me kind of weird and she said, "Well, it's not really a date. It's more of a low-key kickback. That's how she was describing what she and 2, 3 girls 2, 3 guys were doing. It wasn't a date, it was I would have called that like a triple date. And that is like, oh, that's very intense.

Millennials are just hanging out totally.

Okay. Benjamin Black from Deutsche Bank asks within dating, authenticity is clearly very important, particularly for Gen Z. How do you preserve authenticity in a world of AI where prompts and profiles are increasingly leveraged AI editing tools and AI recommendations. Why don't we -- Max, why don't you start with describing sort of Gen Zs perception vis-a-vis AI? And then Emily talk about how we bring into the product.

Sure. So first of all, to a very large extent, Gen Z are already using AI in many different ways, whether it's at work, whether it's through school to help them with assignments or summarize large information. Many Gen Z are very comfortable. And they tell us, and we see that they are using AI essentially in their daily lives. It looks a bit different when it comes to meaningful connections. And many Gen Z tell us that when it comes to building products or even if it's other things, not just dating apps, the internal tooling doesn't really matter. It's more important that they're getting the outcomes that they need that they want. And when it comes to our apps, it's that AI should help connect people better in the real world, they just want better dating outcomes. They want to be able to connect and make new friends in different ways and how they get here is not as important to them, more so is just getting to that destination and the way that fits for them.

Absolutely. I mean, I think the way that we think about AI, particularly with our products, as you mentioned, it's about connecting people better more quickly to the real world. And within that, as we were just talking about agency, we want to make sure the user is always, always in the driver's seat and that their choice isn't reduced, but their momentum is increased. And AI really provides the depth and scale that allows us to do that. And one way we see that across Hinge is really wonderfully is AI prompt recommendations. It's that partner and that friend in the journey with you, just like you would text your girlfriend, like "Oh my gosh, this is what they said." This is what I'm thinking of responding, what do you think using AI as a partner in that process because that increases your agency, makes you feel more confident. And hopefully, helps you land that conversation a little bit more strongly or I think another really wonderful way that we've been implementing AI is [indiscernible] and safety place because again, it gives you that depth and that scale to make sure we're considering all of the angles in this increasingly dynamic technological world that we're navigating.

So I'm hearing is we want to make sure that AI brings people closer together, doesn't stand in between them.

Yes.

And we want to make sure that it increases authenticity, not creating superficiality. So for example, in chat. If a chat kind of slows down and people aren't flirting or talking anymore, we might use AI to make a suggestion to one of them, hey, on her profile, she talked about these interests. They're similar to ours, why don't you bring -- why don't u start a conversation about that, but we wouldn't likely draft that exact copy for the user because that would be crossing a line towards authenticity?

Yes, the user needs to be in the driver seat. It's ultimately then that [indiscernible], but we love the partnership and the tooling to help them get to that best version of themselves. It's about amplifying them rather than replacing them.

Yes, it might be tempting to draft it for the users so they can just hit submit. But then on the receiving end, that receiver will also get offer that and then they'll know that probably it was an authentic overture from the other person and then that breaks down.

To until the earlier point of scrutiny, GenZ are always oftentimes questioning whether things are AI. And like anybody across any generational cohort there are false positives and negatives of what we think might be AI generated. But there is this skepticism. So again, to Emily's point, preserving the sense of authenticity and turning agency is really crucial for their user experience across our products.

And I guess another example will be on photos. So we do provide an AI ability to improve the lighting or the clarity of a photo, but we don't let you change the background of the photo. So a picture of you in front of -- on a couch, it's [indiscernible] couch. We're not going to put you at the beach or in front of the Eiffel Tower or statue of Liberty implying that you've been to those places that would be an inauthentic use of AI. Nathan Feather from Morgan Stanley asks, with the goal of quality or quantity, how do you get users to slow down when using the product to try and encourage a more thorough analysis of any individual profile. How do you make sure to highlight potential, most relevant profiles such that they aren't skipped. So Emily, why don't you talk about some of the ways that we're trying to improve profile quality and people's review of profiles.

Yes, I mean there's a lot of ways to do this. And again, this brings up the pillar of momentum, right? We want people to feel like they're moving forward with efficacy, but there's also the right level of speed. We don't want things to be too quickly because, you might miss something, you might be making rash decisions versus being intentional and thoughtful about it. And again, one way that I know we're doing this at Tinder is by increasing those signals on profiles and apps in that way. So again, music mode, when you're looking at, oh, Max and I both like this one artist this one song, that slows things down for you. That lets you have a bit of a signal of what max is like in real life. You can imagine driving in Max care and us playing the song and connecting over that, right? That slows people down to pay a little bit more attention to the profile, the bio, the details therein in order to increase that efficacy and give momentum forward at the right pace.

Yes. Another example is we now -- on Tinder, we put prompt content, so that's written words into the photo carousel. So instead of just looking at photos and the photo carousel, where kind of intermingling responses to prompts like what do you like to do on a Sunday or what your relationship with your friends like into the photo carousel, which definitely slows you down because now of all of sudden you have to read words, instead of looking at a photo, but it gives people kind of a more considered experience when assessing potential compatibility.

Absolutely.

Okay. I think -- actually, it's important also to remember that this overall topic of getting people to slow down, consider an authentic profile -- this is really a more of a Match Group initiative across brand. So obviously, Hinge does this very well already with a contextual like feature where when you are looking at a profile in Hinge, you're indicating interest in a particular element of the profile rather than just saying I'm interested in this person, you're saying I'm interested in this thing about this person, upward our brand that focuses on people with traditional values has a feature called chivalry mode, where if you are photo verified, then you have a more complete profile and you respond to as a good actor in messaging then you are allowed to participate in chivalry mode. And there, it's kind of a different experience that's more highly considered and a slower profile. So we're taking these types of learnings across lots of our brands actually [indiscernible] also our brand for Hispanic daters is testing something similar now where it's kind of a more considered profile rather than a quick Twitch photo evaluation. So these insights that we develop at the Match Group level or even at the Tinder level, we scale them across all of our brands. Okay. Last question here from Andrew Marok from Raymond James. Andrew asks. With the shift in behaviors from millennials to Gen Z, how does that impact how to think about future generational differences? Are they assured? And what are some of the signs that you monitor for cohort shifts? How has this shift affected how the voices of different ages are heard internally? Would it make sense to staff product orgs with employees, primarily in the core age range as well as young users and new grads in order to catch emerging shifts before they fully take hold. Max, I'll let you take the beginning of this. I think we've already talked a little bit about how do we make sure that we're bringing insights from all ages and then maybe Emily or I will close with how we bring that into the actual room for decision-making.

Yes. So we have a lot of internal leading and lagging indicators when it comes to cultural signals. And these generational desires and changes in mindsets are sometimes very slow moving and sometimes very fast. And you can anticipate everything that's going to be completely changing the way a whole set of society things. Like it could be one social media post that fundamentally reframes a narrative around the way people approach dating, for example, our connection. So we collect all of these signals. We try to map it to the underlying cultural shift that we talked about, for example, pandemic, the macroeconomic environmental perception and how that impacts long-term thinking and companionship. With these smaller cultural signals, and we also leverage historical data to look at what we have learned from the transition from millennials to present. So it's a mix. We don't have a crystal ball. There are a lot of brilliant people that we collaborate with the science of trying to understand and interpret these waves for building products. But the best tool that we have are listening to GenZ and understanding their desires and how they're engaging with cultural media, social content and all these different forms to make sure that the way our product develops is moving in their direction, and we'll continue to do so with future generational cohorts.

Absolutely.

Yes. I mean this is definitely a benefit of Match Group's scale. There's no doubt in my mind that we have a larger team and we have more resources focused on consumer insights with respect to human connection globally across all age cohorts, than any competitor by far. So it's definitely a strength of ours. In terms of bringing these insights into the room, your teams are in the rooms when we're making these decisions on product and marketing. We have also significantly increased our presence of younger employees. So yesterday, I spoke to our intern class of 30, our largest ever intern class, it's incredibly important that we have summer interns who are college students that are in the -- hanging out with employees in the kitchen, doing work, contributing to decisions and helping bring those insights directly into the company. We have custom GPTs, which have been really useful. So for each of our key personas, we have AI incarnations of them that employees, including me, used constantly to talk to all these different users to get like instantaneous feedback on all of this through AI. So there are lots of ways, including just hiring more young people who are in our primary age cohort that we bring these insights into the room. So thank you very much for joining us today for this first-ever CEO connection. I hope that you walked away with a better understanding of Gen Z and how their expectations around connection are evolving and how we're thinking about the future of our category. I want to thank Emily and Max for sharing their information and thank those who submitted so thoughtful questions. We'll continue this conversation at our Q2 earnings call. In the meantime, I share regular updates on these types of topics on my socials on LinkedIn, Instagram and other my social channels. And I'd love to continue the conversation. So thanks for joining us today. Thank you both very much.

Thank you.

Thank you.