Tinder was once the hottest dating app on the market. Can it rekindle old flames in 2023?

The world’s most successful dating app finds itself on the financial skids, struggling with meager user growth and stagnant revenue despite a post-COVID reopening that should be favorable to its fortunes. 

Tinder’s parent company, Match Group, released fourth-quarter earnings Tuesday that showed the app’s revenue was flat year over year, owing to a 3% increase in paying users and a 2% decline in revenue per paying user. Match Group, which also owns the Hinge, OKCupid, Match, and Plenty of Fish apps, reported that company-wide revenue rose a scant 2% and operating income fell 54% year over year. 

So what’s got Tinder down in the dumps? In short, too many people find themselves in a loveless relationship with the app.

For much of the 2010s, Tinder cruised on its first-mover advantage and massive user base, generally fending off competition from upstarts like Bumble and Hinge (Match Group acquired the latter in 2019). Those upper hands helped Tinder remain popular despite an undercurrent of discontent about the user experience among women, some of whom reported harassment from men merely looking for casual sex.

But as the years went on, the dating app scene matured. Tinder competitors siphoned off users seeking longer-term relationships, while Gen Z didn’t take to the app quite like its millennial predecessors. Match Group executives also conducted research showing that women “just didn’t enjoy the time they spent on the app,” Fortune’s Emma Hinchliffe reported in May 2022 as part of a profile of then-CEO Renate Nyborg. (Tinder remains the most-used dating app by a wide margin.)

Tinder has tried to touch up its image, but those efforts have been repeatedly stalled by leadership turnover. Tinder’s last two chief executives—Jim Lanzone and Nyborg, its first female leader—lasted less than 18 months atop the app. Match Group CEO Bernard Kim, who joined the company last year from mobile gaming giant Zynga, serves as Tinder’s interim leader after he dumped Nyborg in August 2022.

As Bloomberg’s Chris Bryant noted last month, Tinder still could access a vast, untapped user base across the globe. Match Group also hasn’t taken advantage of its advertising potential, generating a paltry $58.7 million, or 2% of total revenue, off ads and other non-subscription-related sales in 2022.

To that end, Match Group executives detailed a roadmap for 2023 on Thursday that looks to boost interest among Gen Z users and recast Tinder’s image. 

In a letter to shareholders, Kim and CFO Gary Swidler said they want to focus on “creating more authentic moments and opportunities for self-expression, which are especially important to Gen Z.” While some of those plans are a bit vague for now—”broader inclusivity,” “more personalized discovery,” “new payment methods”—the comments at least show the company knows it’s lagging with its prime demographic.

More interestingly, Kim and Swidler offered more details about Tinder’s upcoming “first-ever global marketing campaign,” which will total tens of millions of dollars. The duo didn’t explicitly identify the goals of the marketing effort, but past comments by Tinder executives suggest the campaign will aim to re-engage women and weaken the “hookup culture” stigma attached to the app.

“From its inception, Tinder grew rapidly through strong, organic word-of-mouth, so there was less of a need to market,” Kim and Swidler wrote. “However, over time, this lack of marketing has contributed to a narrow brand perception that does not celebrate the breadth of relationship possibilities Tinder creates every day.”

Match Group executives will need to spend 2023 convincing Wall Street that they can make consumers fall back in love with Tinder. The company’s stock price has swooned 56% in the past 12 months, and shares were down 8% in midday trading Wednesday after earnings fell short of analyst expectations.

The decline reflects the well-known challenges afflicting Match Group’s main squeeze. Now comes the hard part for Tinder: finally finding more new customers and mending fences with jilted lovers.

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Jacob Carpenter

NEWSWORTHY

Snap doesn’t crackle or pop. Snap shares plummeted 13% in midday trading Wednesday following the release of disappointing earnings, Bloomberg reported. The social media outfit roughly met analyst expectations for the last three months of 2022, but said that sales could shrink as much as 10% in the current quarter, which would represent the first time the company’s revenue has declined. Snap has been pummeled by a pullback in ad buying and Apple’s user privacy changes instituted in 2021, which made it more difficult for app developers to deliver targeted ads. 

A chipmaker’s executive decision. Intel announced pay cuts Tuesday for high-ranking executives and mid-level managers as part of a cost-saving plan following dismal fourth-quarter earnings. The chipmaker said CEO Pat Gelsinger will take a 25% pay cut, while his executive leadership team will see their compensation slashed 15% and middle managers will get 5% less. The move came as fellow chipmakers Samsung, SK Hynix, and AMD reported sharp drops in holiday-quarter earnings this week.

No friends in business. PayPal became the latest tech company to announce layoffs, disclosing plans Tuesday to cut 2,000 jobs, or roughly 7% of its workforce. The company’s chief executive, Dan Schulman, cited the “challenging macroeconomic environment” and the need to cut more costs in a message to employees. The financial technology company is scheduled to release fourth-quarter earnings results next week.

A merger within reach? A federal judge on Wednesday rejected regulators’ attempt to block Meta’s acquisition of virtual reality developer Within, delivering an early blow to the Biden administration’s campaign to ramp up antitrust enforcement, Bloomberg reported. In a sealed ruling, U.S. District Judge Edward Davila denied the Federal Trade Commission’s motion for a preliminary injunction against the purchase, sources told Bloomberg. The FTC can still proceed with an in-house trial that aims to block the acquisition. FTC officials have argued Meta is trying to eliminate competition in the virtual reality space through its purchase of Within, while the FTC’s critics argue that Meta is not violating antitrust laws by acquiring a relatively small developer in a fast-growing industry.

FOOD FOR THOUGHT

Mining its business. In the fast-evolving electric vehicle wars, General Motors doesn’t want to be left without a crucial element. The Associated Press reported Tuesday that the Detroit automaker has agreed to invest $650 million in a Canadian mining company, receiving in return exclusive access to lithium obtained from a planned mine site in the western U.S. The joint agreement with Lithium Americas Corp. will help General Motors obtain the lithium needed to produce batteries that power electric vehicles. The deal is contingent on the mine, located near the Nevada-Oregon border, clearing environmental and legal challenges that are pending in federal court.

From the article:

GM said Tuesday’s announcement marks the largest-ever investment by an automaker to produce battery raw materials.

Lithium Americas estimates the lithium extracted and processed from the project atop an ancient volcano about 200 miles (321 kilometers) northeast of Reno can support production of up to 1 million electric vehicles annually. It’s the third largest known lithium deposit in the world, the company said.

IN CASE YOU MISSED IT

Peloton CEO teases an ‘epic comeback’ for the pandemic stock darling, by Chloe Taylor

Biden takes aim at Apple and Google’s app stores as ‘harmful to consumers and developers’, by Fatima Hussein and the Associated Press

ARK’s Cathie Wood predicts these innovations will soar 40% in value every year to over $200 trillion by 2030, by Christiaan Hetzner

A power crisis in Elon Musk’s birthplace of South Africa in killing its switch to EVs—and putting 100,000 auto jobs at risk, by David Meyer

How did Bryan Johnson make his money? The youth-chasing millionaire made a fortune selling his business to PayPal for $800 million, by Orianna Rosa Royale

Gmail creator predicts A.I. bots like ChatGPT will destroy search engines within 2 years, by Alice Hearing

Yelp is removing an exponentially increasing amount of racist restaurant reviews from its platform, by David Klepper and the Associated Press

BEFORE YOU GO

Still standing on top. Tech companies might be taking a financial thrashing, but the downturn hasn’t dented the corporate world’s respect for industry leaders. Tech outfits once again took high honors in Fortune’s 25th-annual ranking of the world’s most admired companies, snapping up several top spots on the list. Apple extended its 16-year run atop the rankings, while Amazon and Microsoft tied for second place. The rest of the top 50 included tech stalwarts Alphabet (No. 9), Salesforce (No. 11), and Netflix (No. 29). Rankings are based on the results of surveys taken by 3,760 executives, directors, and securities analysts in partnership with Korn Ferry.