John Blackledge: Great. Thanks. On Hinge, could you just provide some more color on the key drivers of the revenue acceleration in 2Q and kind of continuing into 3Q? And then, what have you seen — I think it’s early, but what have you seen with the new weekly sub-tier launch at Hinge? Thank you.
Gary Swidler: Thanks for the question, John. So, what we’re — we saw in Q2 for Hinge and what we’re expecting to see in Q3 and Q4, as you said, is really direct revenue growth acceleration through the course of the rest of the year. And there’s really three things going on in the business that are kind of layering on top of each other that are leading to that revenue acceleration, and we’ve already seen it in the most recent quarter. The first is continued very strong user growth in core English-speaking markets. The second is user growth as a result of the expansion into new markets, particularly in Continental Europe. And the third is a variety of monetization initiatives that we’ve rolled out, including the new subscription tiers that we’ve talked about before that we rolled out earlier this year.
And those are continuing to drive revenue growth from an expanding user base in the core English-speaking markets as well as the Continental European markets. So, that’s why you see this effect of compounding revenue growth as we proceed forward with the Hinge business, and the visibility into that is fairly good at this point. The other thing that you asked about was weekly subscription packages. So as you know, we haven’t had those across the portfolio in prior years. We’ve been rolling them out across a number of the brands over the course of this year. We started with a couple of our smaller brands. We saw real success there. We rolled them out to Tinder. We’ve obviously seen real success there as well. And so, it makes sense for us to use that knowledge and those learnings and roll them on to Hinge as well.
It wasn’t something that we were specifically planning for this year, but we decided to do that as well. We’ve rolled them out successfully over the last three-or-so weeks at Hinge. And we’re seeing basically similar impact from weekly subscription at Hinge as what we’ve seen at the other brands. So, it’s always slightly different at each brand, but in general, we’re seeing improving conversion, improving renewal rates. And so, what that’s doing is giving us confidence that we’re going to hit approximately 40% year-over-year revenue — direct revenue growth for Hinge for 2023, which will get us to around $400 million of revenue. And we’ll see growth rates in Q3 and Q4 that are continuing to accelerate from what we saw in Q2. So, all systems go with an extra jolt of improvement at Hinge from the weekly subscription packages.
John Blackledge: Thank you.
Operator: Our next question comes from Shweta Khajuria with Evercore ISI. Please go ahead.
Shweta Khajuria: Thank you for taking my question. Just a high-level question for you, BK, on AI. So, you touched on it in your prepared remarks as well as in the letter. Could you provide a little bit more context or concrete examples of where you’re already leveraging AI-enabled technology at Tinder and Hinge? And how you think that could impact top- and bottom-line for those two businesses in particular? Thank you.
Bernard Kim: Thanks, Shweta, for that question. This has been a really exciting moment for our company, Match Group. AI has really inspired our technologists and product people across the entire company to really think about ways that we can create new experiences, but also solve for key dating, what I call, kind of pain points. So, what I’ve kind of harnessed that like energy and the data that we have as an organization around delivering great products over the next couple of months that solve against some of these problems. So, I’ll use Tinder as an example. Sometimes people are really excited to jump into the Tinder experience. They downloaded off the App Store. And then, in that exact moment where you have to upload five pictures, people get generally nervous or uncomfortable, like, “What is the right picture that I’ve taken over the last year to make my dating profile great?” So sometimes those people just literally turn out of the process and say, “Maybe dating apps are not for me.” We could use AI, and we’re actually creating a photo selection feature that we’re testing that can take out the stress away, that can look at your photo album and say, “Okay, these are the five best photos for your Tinder profile,” but also still like remaining authentic to that person and the profile that they want to create.
I really think that AI can help our users build better profiles in a more efficient way that really do showcase their personalities and stand out in the marketplace. When it comes to the organization, we have a lot of different teams kind of like raising their hand and saying, hey, like, I want to work on some really exciting AI ideas. But internally, we’ve created these centers of excellence where AI engineers are coming together and collaborating on features that I think could benefit multiple brands across the portfolio. An example I would use is Hyperconnect is actually working on AI features for Tinder. And then in E&E, our teams are working on AI features that are — that could be great for Plenty of Fish, Meetic, Match and OkCupid. So there’s a lot of creative ideas and concepts that we’re currently testing, and we plan to roll out these features in the coming months.
We know that this is a really big opportunity that can have like a really meaningful impact on users, their experience and our business. But at the same time, we have to be really thoughtful about making sure that we’re giving the right thought to authenticity and ethical and privacy concerns. So, we’re doing all those different things as we roll out these features. Thanks for the question, Shweta.
Shweta Khajuria: Thanks, BK.
Operator: Our next question comes from Justin Patterson with KeyBanc. Please go ahead.
Justin Patterson: Great. Thank you very much. Good morning. Gary, you’ve alluded the Q4 growth rates a couple of times within Tinder and Hinge. I’m curious, could you provide an update on your 2023 revenue outlook, where you think you’ll land on that 5% to 10% range? And then thinking about just the AOI margin side, you did improve the language on that to increase versus 2022. How should we think about that magnitude of increase and the puts and takes to get there? Thank you.