Tinder Explores AI Matching Amid User Decline

# ai # earnings # Tinder

Tinder is betting big on AI to turn around its slipping user numbers. In the next quarter, the dating app, owned by Match Group, plans to introduce new AI-driven features aimed at enhancing user discovery and matching. These additions are meant to shake up the traditional "swipe" method that not only defined Tinder but also set a trend across the dating app industry. During its Q4 earnings report, the company highlighted that these AI-curated recommendations would lead to more "personalized and engaging matches." Match Group's CFO, Gary Swidler, shared with investors during the Q4 earnings call that the AI-driven matching feature would offer users an alternative to the familiar swipe. However, he made it clear that AI matching would work alongside swiping, not replace it. "We want to see a significant number of people engage with that feature and give it a try ... We also want to see improvement in quality matches," Swidler explained. "We want to see that product really deliver for people in terms of enhanced quality matches that will improve the perception of the product, which should help us drive user growth." Another AI feature mentioned was the AI Photo Finder, which helps users select the best photos for their profiles. This tool was rolled out last year. The introduction of these AI features comes at a tough time for Tinder and the dating app industry. Young singles are increasingly feeling burnt out by online dating, which they find less spontaneous and more like a chore. Concerns about safety, privacy, and bad behavior from other users, coupled with the realization that these apps offer a false sense of choice, have driven many to abandon Tinder and similar platforms. Tinder admitted during the call that its global user growth continues to decline. In October, monthly active users (MAUs) dropped by 10% year over year, slightly improving to a 9% decline over the next two months. By January, MAUs had fallen "about 8%," which executives tried to frame as a positive development. Tinder's direct revenue also fell short of the company's internal projections, reaching $476 million, below the expected range of $480-$485 million. "I’d love to see us get back to growth, but I think we have to take the baby steps first. We’ve got to roll out these product initiatives, see them drive improved user trends," Swidler said about the new AI features and other planned updates, including making the "Friends in Common" feature more accessible. In an effort to steer the company in a new direction, Match Group appointed Spencer Rascoff, co-founder of Zillow Group, as its new CEO. Rascoff is optimistic about AI's potential in online dating, likening it to the transformative shift from desktop to mobile a decade ago. He pointed to apps like TikTok, Instagram, and Snapchat, which have seen boosts in engagement and retention thanks to AI, and believes Tinder can achieve similar results. Despite the optimism from Match Group's leadership, the dating app market is clearly at a turning point. Beyond Tinder's struggles, the company's Q4 earnings of 82 cents per share fell short of the expected 84 cents. While it met revenue expectations with $860 million for the quarter, this still marked a 0.7% decline from the previous year. Looking ahead, Match Group's Q1 2025 guidance anticipates revenues between $820 million and $830 million, a 3 to 5% drop year-over-year, largely due to Tinder's ongoing MAU declines.

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