Match Group beat Wall Street's fourth-quarter estimates on Tuesday but issued weak guidance as it invests in new products and artificial intelligence initiatives to turn around declining user growth at Tinder.
Shares popped 8% during extended trading. The stock closed 8% lower on Tuesday.
Here's how the company did versus LSEG estimates:
Earnings per share: 83 cents vs. 70 cents expected
83 cents vs. 70 cents expected Revenue: $878 million vs. $871 million expected
The dating platform issued lackluster guidance for 2026, forecasting between $3.41 billion and $3.54 billion in revenue, compared to a FactSet estimate of $3.59 billion.
Finance chief Steve Bailey attributed the weaker-than-expected forecast to strategic investments in Tinder and softness within its Asia brands and the evergreen and emerging segment, which includes OkCupid and Plenty of Fish.
Match has allocated a $60 million budget for AI and product rollouts at Tinder. Those initiatives will cause a one-and-a-half point headwind to near-term monetization but support a better app experience, Bailey told CNBC. The rollout of its Face Check verification feature is projected to impact guidance by one point.
"We're going to be willing to take that tradeoff because it will drive the product experience we need to get user growth back on track," he said.