Key Takeaways

The theme of Match Group’s recent Q1 earnings report is change: something dating app mainstays dread, and dating app users long for.  

But change is necessary at Match Group. The company’s total revenue declined 3% year over year, and operating income declined 7%. Most notably, Match Group’s less-than-stellar Q1 performance led to a 13% workforce reduction. 

During the May 8 earnings call, Match Group CEO Spencer Rascoff spoke frankly about the company’s future, and reflected on how Tinder — Match Group’s crown jewel — factored into Match Group’s disappointing quarter. 

“Tinder Has Less Product Market Fit Today”

“For a decade, Tinder has been an infinite card stack where you swipe left or swipe right to assess the essentially attractiveness of the photo that you’re looking at. And that worked well 10 years ago,” he said. 

“There was more of a hookup culture,” he explained. “Smartphones were new, and … there was novelty around that type of feature set.” 

Rascoff emphasized a growing sentiment in the dating app industry — that dating apps no longer elicit the same excitement in young daters as they once did. 

“But as millennials aged up and as Gen Z entered into our sweet spot, that product has less resonance, and Tinder has less product market fit today than in the past,” Rascoff said.

Naturally, Tinder, as well as Match Group’s other properties, including Hinge and OkCupid, will have to undergo some changes if they want to regain competitive advantage in the industry. 

Match Group’s Problems Are Due To “A Lack of Innovation” 

As CEO, Rascoff didn’t hesitate to mention the specific ways Match Group must improve. He blamed “a lack of innovation” and “our failure to recognize and respond to changes in the younger demographic, especially Gen Z and what they want.” 

Match Group can look to the research conducted by its own property, Hinge, for insight into why Gen Z has fallen out of love with the classic “swipe left, swipe right” mentality. 

Hinge’s 2024 D.A.T.E. report explained how Gen Z daters often want to know more about a potential match than just their age and appearance. And when they do decide to pursue someone on an app, some tend to overthink the process.

“Gen Z Hinge daters are 50% more likely than millennials to delay responding to avoid seeming overeager,” the report says. More than half of Gen Z daters are worried about being rejected — or, worse, being “cringe,” according to the D.A.T.E. report. And 57% of the same age group avoid asking “What are we?” in case the question is a turnoff. 

Hinge’s D.A.T.E. report reveals a generation seeking widespread change. Gen Z wants dating apps to facilitate authentic connections, improve their confidence levels, and provide helpful tips, perhaps with the help of AI dating coaches to take away some of the pressure. 

Rascoff emphasized the company’s need for innovation for a reason. The AI boom has inspired — or pushed — many dating apps to get more creative. Match Group has already joined the fray with Tinder’s AI-generated The Game Game, and shows no signs of slowing down in the AI space. 

Rascoff Wants Match Group To Become “More Nimble” 

But some of Match Group’s workforce is slowing down, namely the 13% of its workforce, including managers, who have been laid off. But, according to Rascoff, this move was more strategic than desperate. He said the decision was part of the company’s attempts to be “more nimble, more focused, and better aligned, enabling faster decision-making.” 

Match Group hopes the workforce reduction will lead to $100 million in annualized savings, according to Yahoo Finance.

“The best tech companies operate in product-first builder mode, and this next chapter at Match Group is about getting back to that,” Rascoff said. “Fewer layers, faster execution, and a culture focused on creating value through innovation.”

Product-first, faster execution, and culture focused — three qualities that, Rascoff hopes, will appeal to the average tech-savvy Gen Z dater looking for online love.