Match Group, Inc.

Company Overview

Business Model: Match Group, Inc. is a leading global provider of digital technologies focused on facilitating meaningful connections among people. The Company operates a diverse portfolio of brands, including Tinder, Hinge, Match, Meetic, OkCupid, Pairs, Plenty Of Fish, Azar, and BLK, offering services in over 40 languages worldwide. Its primary revenue generation mechanism is a freemium model, where core features are free, but premium features and benefits are accessed through recurring subscriptions and à la carte purchases. A smaller percentage of overall revenue is generated from advertising.

Market Position: The social connection app industry is highly competitive and fragmented, with no single dominant global brand. Match Group, Inc. employs a brand portfolio strategy to cater to a broad spectrum of consumers, whose preferences vary by demographics, geography, culture, religion, and intent. Key competitive advantages include strong brand recognition and scale (e.g., Tinder's patented Swipe technology), demonstrated successful user experiences, community identification, and a user-centric service design. The Company competes with other online dating platforms, major social media platforms (such as Facebook, Instagram (owned by Meta), Snap, TikTok, Twitter/X, LinkedIn (owned by Microsoft), Twitch (owned by Amazon), and YouTube (owned by Alphabet)), as well as traditional and offline dating services. Its broad portfolio is considered a competitive advantage, as many users engage with multiple services concurrently or sequentially.

Recent Strategic Developments: Match Group, Inc. is actively integrating artificial intelligence (AI) technologies into its services, including AI photo selection features for Tinder and Hinge, and an enhanced recommendation system and integrated dating support for Hinge. The Company is undertaking a multi-year initiative to consolidate technology platforms across various legacy brands to reduce operating costs and accelerate new feature releases. In 2024, an enterprise-wide initiative was announced to further leverage its portfolio approach, reduce functional duplication, and share operational infrastructure. Tinder launched its first comprehensive global marketing campaign in 2023 to sustain growth and attract new users. Hinge continued its expansion into European markets in the latter half of 2022, while Azar expanded into European and U.S. markets in 2024. Pairs initiated television advertising in Japan in 2024 and plans further expansion into other Asian countries in 2025. In the third quarter of 2024, the Hakuna live streaming service was shut down due to its financial performance not meeting expectations.

Geographic Footprint: Match Group, Inc. maintains a global operational presence, with its services available in over 40 languages. International revenue constituted 54% of total revenue for both the years ended December 31, 2024, and 2023. The Company's employee base is distributed across North America (67%), Latin America (1%), EMEA (13%), and Asia-Pacific (19%), spanning 21 countries. Key markets include English-speaking countries and several European markets (Hinge), France (Meetic), Japan, Taiwan, and South Korea (Pairs), and the Middle East, Western Europe, and the U.S. (Azar). The Company has offices in Texas, New York, California, British Columbia, France, Japan, and South Korea.

Financial Performance

Revenue Analysis

Profitability Metrics (2024):

• Gross Margin: 71.5%
• Operating Margin: 23.7%
• Net Margin: 15.8%

Investment in Growth (2024):

• R&D Expenditure: $442.2 million (12.7% of revenue)
• Capital Expenditures: $50.6 million
• Strategic Investments: Significant resources are dedicated to developing, testing, and maintaining AI technologies, including the introduction of AI photo selection features to Tinder and Hinge, and an enhanced recommendation system and integrated dating support to Hinge. The Company also increased marketing spend for Tinder's global campaign and Hinge's international expansion, and is consolidating legacy brand platforms to reduce operating costs and accelerate feature releases.

Business Segment Analysis

Tinder

Financial Performance:

• Revenue: $1,940.6 million (+1% YoY, +4% YoY on a constant foreign exchange rate basis)
• Operating Margin: 44.6% (calculated based on segment revenue of $1,991.1 million)
• Adjusted Operating Income: $1,017.0 million (-3% YoY)
• Payers: 9.7 million (-7% YoY)
• RPP: $16.68 (+8% YoY) Key Growth Drivers: Revenue growth was primarily driven by subscription pricing optimization, partially offset by a decrease in Payers. The Company is focusing on product initiatives to enhance the female user experience and attract younger users. Product Portfolio: Tinder offers a freemium model with premium subscription offerings including Tinder Plus, Tinder Gold, and Tinder Platinum. It also provides pay-per-use features such as Super Likes and Boosts, and the Tinder Explore feature for non-traditional interactions. The platform utilizes its patented Swipe technology and has recently introduced AI photo selection features. Market Dynamics: Tinder has achieved significant scale and popularity, particularly among 18 to 25-year-old users. The Company is supplementing its viral growth with marketing efforts to build its brand narrative and expand its user base.

Hinge

Financial Performance:

• Revenue: $550.4 million (+39% YoY)
• Operating Margin: 22.1%
• Adjusted Operating Income: $166.5 million (+55% YoY)
• Payers: 1.5 million (+23% YoY)
• RPP: $29.94 (+13% YoY) Key Growth Drivers: Strong revenue growth was driven by increased Payers in the U.S. market and continued expansion into European markets. Pricing optimizations and increased spend on à la carte features also contributed to higher RPP. Product Portfolio: Hinge is a mobile-only, freemium app "Designed to be Deleted," targeting relationship-minded individuals. It offers features like Video Prompts, Voice Prompts, and Voice Notes, and premium subscription offerings: Hinge+ and HingeX. Recent integrations include AI photo selection features, an enhanced recommendation system, and integrated dating support. Market Dynamics: Hinge has established a strong user base among millennial and younger generations in English-speaking countries and is expanding its footprint globally, with continued investments in product development and marketing.

Evergreen & Emerging ("E&E")

Financial Performance:

• Revenue: $643.0 million (-7% YoY)
• Operating Margin: 10.1% (calculated based on segment revenue of $654.2 million)
• Adjusted Operating Income: $170.4 million (+4% YoY)
• Payers: 2.7 million (-13% YoY)
• RPP: $20.10 (+7% YoY) Key Growth Drivers: The overall revenue decline was primarily due to a 12% decrease in Evergreen brands and a decline in Payers, partially offset by 17% growth in Emerging brands and increased RPP. The termination of certain live streaming services in the second half of 2024 also contributed to the revenue decline. Product Portfolio: This segment includes well-known "Evergreen" brands like Match, Meetic, OkCupid, and Plenty Of Fish, and "Emerging" brands such as BLK, Chispa, The League, Archer, Upward, and Yuzu. Match and Meetic focus on serious relationships, with Meetic being prominent in Europe for users over 35. OkCupid uses a Q&A approach, and Plenty Of Fish offers profile search and algorithmic recommendations. BLK targets the Black community with the Swipe feature. Market Dynamics: Evergreen brands have experienced revenue declines, while Emerging brands are in early growth stages, often relying on marketing to expand their user base. The Company is consolidating technology platforms across these brands to enable faster feature releases and reduce maintenance costs.

Match Group Asia ("MG Asia")

Financial Performance:

• Revenue: $283.9 million (-6% YoY, +2% YoY on a constant foreign exchange rate basis excluding Hakuna)
• Operating Margin: -11.4% (calculated based on segment revenue of $284.5 million)
• Adjusted Operating Income: $60.8 million (-2% YoY)
• Payers: 1.0 million (+9% YoY)
• RPP: $23.56 (-14% YoY) Key Growth Drivers: Revenue was negatively impacted by the strength of the U.S. dollar against currencies like the Turkish Lira and Japanese Yen, and the shutdown of the Hakuna app in the third quarter of 2024. Payer growth at Azar was partially offset by modest Payer declines at Pairs. Product Portfolio: This segment primarily serves Asian and Middle Eastern markets. Pairs is a leading online dating service in Japan, with a presence in Taiwan and South Korea, designed to address local social barriers. Azar, acquired in 2021, is a one-to-one video chat service with a strong presence in the Middle East and growing in Europe and the U.S., leveraging AI capabilities. Market Dynamics: The segment focuses on expanding its brands in various Asian and Middle Eastern markets. Pairs is increasing brand recognition through television advertising and partnering with local governments in Japan to address declining marriage rates, with plans for expansion into other Asian countries in 2025.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: $752.7 million (22.2 million shares repurchased) during the year ended December 31, 2024.
• Dividend Payments: $47.8 million ($0.19 per share) declared on December 10, 2024, payable in January 2025.
• Future Capital Return Commitments: The January 2024 Share Repurchase Program authorized up to $1.0 billion, with $247 million remaining as of December 31, 2024. A new December 2024 Share Repurchase Program authorized up to $1.5 billion, which will commence upon the exhaustion of the January 2024 program.

Balance Sheet Position (as of December 31, 2024):

• Cash and Equivalents: $966.0 million
• Total Debt: $3,875.0 million (principal amount)
• Net Cash Position: -$2,909.0 million
• Debt Maturity Profile:
  • 2026: $575.0 million
  • 2027: $875.0 million
  • 2028: $500.0 million
  • 2029: $350.0 million
  • 2030: $1,075.0 million
  • 2031: $500.0 million
  • Total: $3,875.0 million

Cash Flow Generation (2024):

• Operating Cash Flow: $932.7 million
• Free Cash Flow: $882.1 million (Operating Cash Flow less Capital Expenditures of $50.6 million)

Operational Excellence

Production & Service Model: Match Group, Inc. employs a portfolio strategy that empowers individual brand leaders while maintaining centralized discipline and sharing best practices across brands. This approach aims to accelerate the introduction of new services and features, optimize marketing, drive growth, reduce costs, enhance user safety, and maximize profitability. Centralized administrative functions (legal, accounting, finance, treasury, real estate, facilities, tax) and certain operational functions (ad sales, online marketing, business technology) support the entire portfolio.

Supply Chain Architecture: The Company's operations are highly dependent on third-party systems and infrastructure. Key Suppliers & Partners:

• App Store Platforms: Apple App Store and Google Play Store are critical for the distribution and monetization of mobile applications, including in-app payment processing.
• Cloud & Hosted Web Services: Providers such as Amazon Web Services are relied upon for general application provision and to facilitate and process certain user transactions.
• Other Technology Partners: The Company also utilizes third-party computer systems, service providers, software providers, and broadband and other communications systems.

Facility Network:

• Manufacturing: Not applicable, as the Company provides digital services.
• Research & Development: While specific R&D centers are not detailed, product development is a significant area of investment, with a focus on integrating new technologies like AI.
• Distribution: Primarily digital, through mobile app stores.
• Offices: The Company maintains executive and administrative offices in various cities across the United States (Texas, New York, California) and internationally (British Columbia, France, Japan, South Korea).

Operational Metrics: The filing does not provide specific operational metrics such as capacity utilization, efficiency measures, or quality indicators.

Market Access & Customer Relationships

Go-to-Market Strategy: Match Group, Inc. utilizes a dual approach for user acquisition, combining word-of-mouth and free user acquisition with significant paid marketing efforts. Distribution Channels:

• Direct Sales: Not a primary channel for user acquisition, but direct customer relationships are fostered through the app platforms.
• Channel Partners: The Apple App Store and Google Play Store are the primary distribution channels for the Company's mobile applications.
• Digital Platforms: Extensive online marketing activities include purchasing social media advertising, advertising on streaming services, banner and display advertising, search engine marketing, email campaigns, and partnerships with influencers.
• Offline Marketing: The Company also engages in offline marketing activities such as television advertising, out-of-home advertising, and public relations efforts.

Customer Portfolio: Enterprise Customers: Not applicable, as the Company operates a direct-to-consumer (B2C) model. Strategic Partnerships: Match Group, Inc. has a partnership with Google aimed at value exchange across their broad relationship, which is expected to help offset costs associated with implementing Google’s User Choice Billing system. Customer Concentration: Not applicable, as the Company serves a vast, diverse base of individual users rather than a concentrated group of enterprise clients.

Geographic Revenue Distribution (2024):

• United States: 45.8% of total revenue
• All other countries: 54.2% of total revenue
• Growth Markets: The Company is actively pursuing growth in emerging markets and regions where the adoption of social connection technologies is still developing. This includes Hinge's expansion into Europe, Azar's growth in Europe and the U.S., and Pairs' planned expansion into other Asian countries.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The social connection app industry is characterized by intense competition, low switching costs for consumers, and a continuous emergence of new services and entrants. Consumer preferences are highly varied and influenced by demographics, geography, cultural norms, religion, and relationship intent. The market is fragmented, with no single service effectively serving all segments. The ongoing adoption of mobile technology and the internet continues to erode stigmas associated with using technology for social connections, particularly in emerging markets. New technologies, such as generative AI, pose potential for rapid disruption.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Other online dating platforms: A multitude of direct competitors offering similar digital connection services.
• Social media platforms and social-discovery apps: Major players like Facebook (which offers its own dating feature), Instagram (owned by Meta), Snap, TikTok, Twitter/X, LinkedIn (owned by Microsoft), Twitch (owned by Amazon), and YouTube (owned by Alphabet) can develop competing features or leverage their large user bases.
• Offline dating services: Traditional in-person matchmakers.
• Other traditional means of meeting people.

Emerging Competitive Threats: New services that leverage disruptive technologies, such as generative AI, or new/existing distribution channels, or introduce novel business models, could rapidly gain scale. Larger companies with greater resources also pose a threat due to their ability to invest heavily in promotion, acquisitions, and rapid service development.

Competitive Response Strategy: Match Group, Inc. aims to maintain its competitive advantage by continuously evolving its services and introducing new features to meet changing user requirements and technological landscapes. This includes leveraging AI, optimizing monetization strategies, and efficiently acquiring new users. The Company also focuses on maintaining the strength of its well-known brands and growing its emerging brands, while prioritizing trust and safety.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics: The Company faces risks from fluctuations or declines in its user base, particularly in markets with high penetration, and a decreased appetite for its services among younger generations. Evolving user expectations and the emergence of new competitive products and services, including those leveraging generative AI, could disrupt the business. Foreign Currency: Operating in various international markets exposes the Company to foreign exchange risk. A strengthening U.S. dollar can reduce international revenues when translated into U.S. dollars, impacting period-over-period comparability and potentially leading to foreign currency losses.

Operational & Execution Risks

Supply Chain Vulnerabilities: Significant reliance on third-party platforms (Apple App Store, Google Play Store) for mobile application distribution and monetization, and on third-party cloud-based service providers (Amazon Web Services) for infrastructure. Changes in policies, service levels, or interruptions from these providers could adversely affect operations. Geographic Concentration: International operations, especially in less experienced markets, expose the Company to risks such as operational and compliance challenges due to cultural and language differences, adverse tax laws, competitive environments favoring local businesses, limitations on intellectual property protection, and geopolitical events (e.g., wars in the Middle East and Ukraine, suspension of services in Russia). AI Management: Challenges in properly managing the integration and use of AI technologies, including potential flaws in algorithms, biased datasets, or infringement of third-party rights, could lead to reputational harm, competitive disadvantages, and legal liability. AI use also presents emerging ethical issues and cybersecurity risks. Acquisition Integration: Risks associated with valuing, integrating, and realizing the anticipated benefits from acquisitions, as evidenced by the shutdown of the Hakuna live streaming service due to underperformance. Key Personnel: The Company's success is highly dependent on its ability to attract, develop, motivate, and retain highly skilled individuals, particularly in senior leadership and technology roles. Intense competition for talent, evolving laws on restrictive covenants, and stock price volatility impacting stock-based awards pose retention challenges. System Integrity: Vulnerability to system interruptions, cyberattacks, computer viruses, software bugs, and natural disasters. Consolidation of platforms could create single points of failure. Past security incidents, though not material, highlight ongoing risks.

Financial & Regulatory Risks

Demand Volatility: Adverse macroeconomic conditions, including high inflation, recessionary concerns, high unemployment, and increased interest rates, can reduce consumer discretionary spending, negatively impacting demand for premium features and services. Indebtedness: As of December 31, 2024, the Company had approximately $3.9 billion in total debt. This indebtedness could limit financial flexibility, ability to obtain additional financing, or use operating cash flow for strategic investments, and exposes the Company to potential events of default under financial and operating covenants. Regulatory & Compliance Risks: Subject to complex and evolving U.S. and international laws and regulations concerning data privacy (GDPR, Digital Markets Act, U.S. state privacy laws, potential federal law), platform liability (Section 230 of the Communications Decency Act, Digital Services Act, UK Online Safety Bill), consumer protection, and automatically-renewing subscriptions. Non-compliance or changes in these regulations could lead to increased costs, operational changes, fines, and reputational damage. Litigation: Exposure to various legal proceedings, including class actions, regulatory inquiries, and intellectual property claims. Notable ongoing matters include consumer class action challenging Tinder’s age-tiered pricing (potential exposure up to $14 million in restitution, plus statutory damages), an FTC lawsuit against Match Group, Inc. regarding Match.com's marketing practices, an Irish Data Protection Commission inquiry into Tinder's GDPR compliance (potential exposure up to $60 million), and a Netherlands privacy class action against Tinder.

Geopolitical & External Risks

Geopolitical Exposure: International operations expose the Company to risks from trade sanctions, political unrest, terrorism, and wars (e.g., in Ukraine and the Middle East), which can disrupt business and impact user engagement. Trade Relations: Impact of trade tensions and policy changes on international operations. Sanctions & Export Controls: Compliance requirements and business limitations due to sanctions and export controls.

Innovation & Technology Leadership

Research & Development Focus: Match Group, Inc. is dedicating significant resources to research and development, particularly in the area of artificial intelligence. The focus is on integrating AI technologies into its services to enhance user experience, including AI photo selection features for Tinder and Hinge, and an enhanced recommendation system and integrated dating support for Hinge. The Company continuously evaluates new technologies for incorporation into its apps to drive user engagement.

Core Technology Areas:

• Proprietary Algorithms: Utilizes proprietary algorithms for search and recommendation features.
• Patented Swipe Technology: Tinder's patented Swipe technology is a core feature driving user adoption.
• AI Capabilities: Leveraging AI to drive user growth and monetization, particularly in brands like Azar.

Intellectual Property Portfolio:

• Patent Strategy: Relies on patented and patent-pending technologies, processes, and features related to its recommendation systems and services, with expiration dates ranging from 2025 to 2041. The Company has an ongoing invention recognition program to apply for patents deemed core to its business.
• Trademark Strategy: Heavily relies on a portfolio of strong trademarks (e.g., Tinder, Hinge, Match, Meetic, OkCupid, Pairs, Plenty Of Fish, Azar, BLK) and associated domain names and logos to market its services and build brand loyalty. An ongoing registration and monitoring program is in place.
• Trade Secrets: Protects proprietary trade secrets, including algorithms, through internal and external controls and contractual restrictions.
• IP Litigation: Engages in litigation to enforce its intellectual property rights and defend against third-party infringement claims.

Technology Partnerships: The Company relies on third-party technology providers for its operations, including cloud-based hosted web service providers like Amazon Web Services, and mobile app store platforms like the Apple App Store and Google Play Store for distribution and monetization.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The Company has recently experienced significant changes to its senior leadership team, including the appointments of a new Chief Executive Officer and Chief Financial Officer. Effective succession planning and smooth transitions are critical to achieving strategic, financial, and operational goals.

Board Composition: The Board of Directors, in coordination with the Audit Committee, oversees the Company's management of cybersecurity risk, including annual enterprise risk assessments. The Audit Committee receives quarterly cybersecurity updates from management.

Human Capital Strategy

Workforce Composition (as of December 31, 2024):

• Total Employees: Approximately 2,500 full-time and 10 part-time employees, representing a 2% year-over-year decrease.
• Geographic Distribution: 67% in North America, 1% in Latin America, 13% in EMEA, and 19% in Asia-Pacific, spanning 21 countries.
• Skill Mix: The majority of employees are in engineering or technical roles, which are central to technological and service innovations.

Talent Management: Acquisition & Retention: The Company faces intense competition for well-qualified employees, particularly in senior leadership and technology roles. Stock price volatility can impact the retentive value of stock-based awards. The Company expects modest overall headcount growth in 2025, focusing on recruiting for technical functions and AI initiatives. Employee Value Proposition: Compensation and benefits programs are designed to attract and reward talent, including competitive salaries, annual bonuses, stock-based awards, an employee stock purchase plan, retirement benefits, healthcare, paid time off, family leave, flexible work schedules, and mental health/wellness programs. Diversity & Development: The global workforce reflects diverse cultures, backgrounds, ages, sexes, gender identities, sexual orientations, and ethnicities. The Company offers talent, learning, and development programs to support career advancement, build technical and leadership skills, and foster organizational contributions.

Diversity & Development:

• Diversity Metrics: The global workforce is highly educated and diverse across various demographics. Specific quantitative diversity metrics are not provided.
• Development Programs: Programs are in place to empower employees with career advancement and learning opportunities, focusing on foundational technical and leadership skills.
• Culture & Engagement: Regular anonymous employee surveys are conducted to gather feedback on leadership, compensation, career growth, and workplace improvements, with results reviewed by senior leadership to drive engagement.

Environmental & Social Impact

Environmental Commitments: Climate Strategy: Match Group, Inc. acknowledges that climate change may have an increasingly adverse impact on its business. Its facilities, including offices in Texas, New York, California, British Columbia, France, Japan, and South Korea, may be vulnerable to extreme weather events such as hurricanes, tsunamis, fires, earthquakes, tornadoes, and flooding. The Company maintains insurance coverage for various risks, but coverage may not be adequate for all losses. Supply Chain Sustainability: No specific information on supply chain sustainability or responsible sourcing initiatives is explicitly disclosed in the filing.

Social Impact Initiatives:

• Community Investment: No specific community investment or philanthropic programs are explicitly detailed in the filing.
• Product Impact: The Company's services aim to spark meaningful connections, offering benefits such as expanded options, efficiency, comfort, control, and safer ways to meet new people. However, the Company also faces risks and litigation related to inappropriate actions by users (e.g., romance scams, fraud, sex-trafficking) and allegations that its apps are "addictive," leading to negative social impacts. The Company has systems and policies in place to monitor content and prohibit illegal/inappropriate use.

Business Cyclicality & Seasonality

Demand Patterns: The size of Match Group, Inc.'s user base can fluctuate or decline in certain markets, particularly those with higher penetration rates. User engagement and growth are influenced by competitive products, global and regional business, macroeconomic, and geopolitical conditions. The filing does not explicitly detail seasonal trends in demand. Economic Sensitivity: The Company's business is subject to volatile global economic conditions. Adverse macroeconomic factors, such as high inflation, recessionary concerns, high unemployment levels, and increased interest rates, can reduce consumer discretionary spending, potentially leading to decreased demand for premium features and services, especially for à la carte purchases or brands serving consumers with less discretionary income. Industry Cycles: The industry for social connection apps is dynamic, with evolving consumer preferences and a consistent stream of new entrants and business models. Planning & Forecasting: The Company's planning and forecasting processes are impacted by these demand patterns and economic sensitivities, requiring continuous analysis and adjustment of marketing spend and product development.

Regulatory Environment & Compliance

Regulatory Framework: Match Group, Inc. operates within a complex and continuously evolving landscape of U.S. and international laws and regulations. These cover areas such as antitrust and competition, broadband internet access, online commerce, advertising, user privacy, data protection, intermediary liability, protection of minors, biometrics, consumer protection, general safety, sex-trafficking, taxation, money laundering, accessibility, artificial intelligence, and securities law compliance.

Industry-Specific Regulations:

• Data Privacy: The Company is subject to the EU's General Data Protection Regulation (GDPR), the Digital Markets Act (EU), and is monitoring updates to the e-Privacy Directive. In the U.S., it complies with state privacy laws such as the California Consumer Privacy Act of 2018 (CCPA), California Privacy Rights Act of 2020 (CPRA), and similar laws in Virginia, Colorado, Connecticut, Utah, Florida, Montana, Oregon, and Texas. The Federal Trade Commission (FTC) has increased its focus on privacy and data security.
• Platform Liability: The Company is affected by discussions and legal challenges regarding Section 230 of the Communications Decency Act in the U.S. The EU's Digital Services Act (effective 2024) and the UK's Online Safety Bill (effective 2025) impose new requirements on technology companies regarding content moderation, transparency, and platform safety, particularly for children.
• Subscription Services: Laws and regulations in various U.S. states and countries (e.g., EU's Payment Services Directive (PSD2), Germany, France, UK) govern automatically-renewing subscription payment models and cancellation processes.
• AI Regulation: Legislation and regulations impacting the use of generative AI are being considered or enacted in the EU, U.S. Congress, and several U.S. states, covering areas like intellectual property, discrimination, cybersecurity, and privacy. Compliance may limit AI uses and impose significant operational costs.
• Dating Services: Specific laws govern dating services in certain U.S. states, the Middle East, and Asia, with additional legislation being considered in the U.S. and Brazil.

Legal Proceedings:

• Consumer Class Action Litigation Challenging Tinder’s Age-Tiered Pricing: A putative class action (Allan Candelore v. Tinder, Inc.) alleges Tinder violated California’s Unruh Civil Rights Act by charging users over 29 higher prices for premium subscriptions. A class of approximately 270,000 individuals has been certified. The Company estimates potential restitution of approximately $14 million if ordered, but disputes the application of statutory damages.
• FTC Lawsuit Against Former Match Group: The FTC (FTC v. Match Group, Inc.) alleges Match.com engaged in deceptive practices prior to mid-2018 by notifying non-paying users of communications from potentially fraudulent accounts to induce subscriptions, and challenged disclosure of guarantee terms and cancellation processes. Trial is set for June 2025.
• Irish Data Protection Commission Inquiry Regarding Tinder’s Practices: The DPC initiated an inquiry into Tinder’s compliance with GDPR, focusing on access/deletion requests and user data retention. A preliminary draft decision alleges violations, with a reasonable possibility of an exposure to loss between a nominal amount and $60 million.
• Oksayan Class Action: A class action (Oksayan v. Match Group, Inc.) alleges Tinder, Hinge, and The League apps are "addictive" and violate consumer protection laws. The court granted the Company's motion to compel arbitration, staying the case.
• Netherlands Privacy Class Action: A lawsuit (Stichting Take Back Your Privacy v. MTCH Technologies Services Limited et al.) alleges unlawful collection, processing, and sharing of Dutch Tinder users’ personal data without consent, violating GDPR and Dutch consumer protection laws.

Tax Strategy & Considerations

Tax Profile (2024):

• Effective Tax Rate: 22%. This rate is higher than the statutory rate primarily due to state income taxes and nondeductible stock-based compensation, partially offset by a lower tax rate on U.S. income derived from foreign sources and research credits.
• Geographic Tax Planning: The Company's international tax structure and transfer pricing are managed to optimize its global tax position. Most of the Company’s international cash ($260.0 million at December 31, 2024) can be repatriated without significant tax consequences.
• Tax Reform Impact: The Company has analyzed the impact of the OECD Pillar Two Directive, which establishes a global minimum corporate tax rate of 15%, and determined it does not have a material impact on its income tax provision. The Company continues to monitor future developments.

Tax Assets & Liabilities (as of December 31, 2024):

• Net deferred tax assets: $250.8 million.
• Net operating loss (NOL) carryforwards: Federal NOLs of $5.9 million (expiring through 2037), state NOLs of $117.5 million (expiring between 2025 and 2044, with $1.3 million carried forward indefinitely), and foreign NOLs of $662.8 million (expiring between 2025 and 2041, with $133.2 million carried forward indefinitely).
• Tax credit carryforwards: $84.7 million, including state and foreign research credits and domestic foreign tax credits.
• Unrecognized tax benefits: $48.7 million (excluding interest and penalties).

Insurance & Risk Transfer

Risk Management Framework: Match Group, Inc. maintains an enterprise-wide information security program to identify, protect against, detect, respond to, and manage cybersecurity risks. This program includes physical, operational, and technical security policies, regular internal and third-party security assessments, integration of security into the product development lifecycle, data protection practices, and incident response.

• Insurance Coverage: The Company maintains cybersecurity insurance, as well as property, casualty, and other risk insurance coverage. However, policies may have large deductibles, broad exclusions, and may not be adequate to fully compensate for all potential losses.
• Risk Transfer Mechanisms: No other specific risk transfer mechanisms beyond general insurance coverage are explicitly detailed in the filing.