Match Group announced on Tuesday the appointment of Spencer Rascoff as its new CEO, as the company aims to attract more users to its dating apps, notably Tinder. The company's shares dropped 9% during extended trading as it projected annual revenue below Wall Street expectations.
In recent years, online dating apps have experienced reduced demand and user engagement due to economic uncertainty and a lack of innovation, leading to decreased spending by consumers. Match Group, which operates platforms like Hinge, OkCupid, and Plenty of Fish, faces competition from Bumble and other social media rivals.
To address these challenges, Match Group has intensified marketing efforts to appeal to younger users, introducing features like enhanced verification and AI-driven matchmaking on Tinder. According to M Science research analyst Chandler Willison, Rascoff's appointment aligns with the company's strategy for AI-driven business transformation.
Rascoff, a co-founder and former CEO of Zillow Group, joined Match's board last year alongside activist investor Elliott Investment Management to enhance company performance. He will take over from Bernard Kim, who is stepping down as CEO and board member.
Match Group's revenue outlook for 2025 is projected to range between $3.38 billion and $3.50 billion, falling short of analysts' estimated $3.50 billion. Similarly, first-quarter revenue is expected to be between $820 million and $830 million, below the estimated $853.1 million.
Despite the revenue forecasts, Match Group anticipates significant growth driven by AI initiatives from 2026 onwards. Willison emphasized that the company's strategic restructuring, including management changes and AI projects, is essential for substantial growth in the future. Total paying users for Match Group decreased by 4% to 14.6 million in the last quarter of 2021, continuing a downward trend for nine consecutive quarters. Although quarterly revenue saw a 1% decline to $860.2 million, it exceeded estimates of $858.7 million.