Good morning, everyone. Corey Carpenter, Internet Analyst at J.P. Morgan. I have Match Group, Gary Swidler, President and COO and CFO. Thanks for joining us.
Just president.
Did I get that right? Just president now. We'll start with the safe harbor. So during this presentation and during the question-and-answer session, we may discuss our outlook and future performance. These forward-looking statements may be preceded by words such as "we expect," "we believe," "we anticipate," or similar statements. These statements are subject to risks and uncertainties, and our actual results could differ materially from the views expressed today. Some of these risks have been set forth in our periodic reports filed with the SEC. So, let's jump right into Tinder, if that works. Look, there's been a lot of focus on Tinder payers, but hoping to start, could you kinda clarify the dynamics in the different parts of the funnel across users, MAUs, payers, et cetera?
Sure. So maybe I'll sort of start at the very top. The way that we think about this, you know, the very top of the funnel consists of new registrations or new signups, so slightly different than downloads, people who actually sign up for the app, as well as reactivations, people who previously were on the app and who left and who come back. The reactivations are actually a bigger part of the total top of the funnel for Tinder than are new signups. So reactivations are a critical component, and oftentimes, when people, you know, look at public data, they look at downloads, they don't get the concept of reactivations in there. So that's an important piece of it as well.
Those two things, we refer to as new users, and then, users that we retain, of course, also contribute to the monthly active users. So those three pieces, new registrations, reactivations, and retained users, contribute to our MAU, and then MAU comes down funnel into payers and revenue ultimately. And, you know, we've had, relative weakness at the very top of the funnel, registrations and reactivations, for a while, and that has flowed more into MAU over time. So, you know, if you look at the most recent quarter, for example, registrations and reactivations were down about 4% year-over-year, and MAU is down about 9% year-over-year on a kind of a like-for-like basis.
When you see that MAU number down 9%, what you see is that the registrations and reactivations, having been disappointing for a little while, have now flown through down into MAU. So the way to start to improve those trends is to improve the strength of new signups, of new registrations, and reactivations. We started to see at least stability in those numbers. Down 4%, I think, was certainly a step in the right direction. So I think those numbers will move around a little bit over time. There's different effects, you know, month to month, quarter to quarter. But I do see some relative stability at the very top of the funnel. I think that will lead to improved MAU over time.
That's why I say, as we make the turn into the back half of the year, I think these trends will lead to improved user growth metrics, looking at new registrations, reactivations, and MAU, as we get toward the back half of the year, and I think that will set us up better as we go forward.
So you mentioned Tinder had 50 million MAUs last quarter. Just how does this compare to prior peak levels?
I think Tinder peaked at around 55 or 56 million MAU in late 2022, if I'm not mistaken. You know, we don't focus as much on MAU as others do, just because we're not trying to monetize through ad revenue. So, you know, not all MAU are created equal, and therefore, the absolute number of MAU is, is not specifically in our focus. But, but healthy MAU, you know, MAU that are beneficial to the ecosystem are. And so, you know, we've seen a decline of call it from 55, you know, to just under 50, I think is where it is now, and some of that is self-inflicted.
You know, we have made some moves to improve the health of the ecosystem by tightening up some of our policies, and our community guidelines, and so that has led to some MAU leaving the system, voluntarily, and we're comfortable with that because we wanna make sure we have a healthy ecosystem that people can feel good about on Tinder.
Yeah, I think you called out about a 2 million headwind from that last quarter. Where are you in that process, just around safety, moderation practices, policies at Tinder? Are you done with that, or could there be more to come?
So I think that, you know, a lot of the impact of the actions we took starting last July around, you know, changes to the policies and our moderation practices have been working through the system, and so as we get to the summertime, we'll anniversary those effects. But I don't think we can declare our focus on the Tinder ecosystem to be a one and done. I think, you know, we understand that people need to feel respected in the ecosystem. They need to feel the people there are real, the people are there to date, and not to do other things on the app. And so we need to keep patrolling the app in a very intent way.
We already do that, but we'll keep tightening it up, and if we see opportunity to continue to clean the ecosystem to make people feel better about the people they see on Tinder, we'll do that. So we don't have any immediate big actions planned, but we are looking at some different things. And, you know, if you take, for example, the notion of mandating face photos, and I think we would all agree that on a dating app, it makes sense for someone to have a photo of their face, and that hasn't been Tinder's policy up until now. And so if Tinder implements face photos, I'm assuming that there'll be some impact on MAU as a result of doing that because, you know, some people who don't have face photos will say, "You know what?
If they're gonna require me to have a face photo," for whatever reason, you know, you can let your imagination run a little bit wild. For whatever reason, they decide they don't wanna have a photo of their face, then we're happy to let them go. We don't consider them somebody we want on the app, and so we're going to... You know, we're contemplating putting in a policy like that, which will have some ramifications. Presumably, people who don't have a face photo, who do wanna date and be active on Tinder, will simply add a face photo, and that will solve the problem, and they'll be retained as a user. But for those who don't want to, you know, we're happy to let them go.
... So, bigger picture, you're about two years into the turnaround. Could you just talk about the progress you've made, how you feel about that, and then maybe what's been tougher than you expected?
Yeah, look, I think we've made some good and important progress. I think that Tinder's execution, planning, and team have improved significantly from where they were at the end of 2022. I think we've taken some very important steps. I think if you look at what we did, you know, sort of between then and now, we also made some significant strides on the monetization side. You know, pricing changes to catch up to where competitors were, and some other monetization initiatives, particularly weekly subscriptions, which have actually been a huge, a huge hit. I think they've been very successful on Tinder. So both of those have led us to, you know, back to kind of 9%-10% year-over-year revenue growth. We're happy with those monetization initiatives.
We're happy with some of the safety initiatives that we've added and some of the cleaning up of the ecosystem features. I think when we look at kind of what's working and what's not in the Tinder ecosystem, I think it's clear there's still more work to do on the product. You know, we've talked a lot about, you know, better resonance with women, better resonance with Gen Z, and I think we've taken some steps in those regards, but we haven't made as much progress as we need to make, and so there's more work to be done on the product.
There'll be a series of things coming out, you know, over the summer and into the fall, both focused on improving profile quality, improving the depths of profiles, which is an important piece for Gen Z, and also improving the relevancy of matches, making sure women, in particular, get the matches they want, and get high-quality matches. And so there's work to do on that front, and I talked about some of the safety features as well around face photos and the like. And so, you know, all these things need to get rolled out, need to help us make progress on the system. We're aware of some of the concerns that users have, Gen Z in particular has, with dating apps, and we need to continue to innovate.
We need to continue to adjust the product, adjust to the new generation, adjust to the new realities, and we'll continue to do that. It's gonna be iterative, and it's gonna take, you know, time to get these features into the market. But we're optimistic that as we do that, we'll see the experience on Tinder improve, the satisfaction with Tinder improve, which will help attract and retain users and move down the funnel in the way I described before.
So on à la carte, it's a minority of Tinder revenue, but you saw some pressure there. You called out last quarter, impacted your 2024 outlook on Tinder. Could you just expand on what's happening in à la carte and then the initiatives you're working on to turn it around?
Yeah, look, I mean, I think that we are not different than a lot of other companies out there, where the consumer is facing a bit of a squeeze on discretionary spending and is being a little bit tighter, given economic conditions, and especially at Tinder, which is, you know, a relatively mass-market app, and has a lot of younger people in particular, you know, who are feeling more of the pinch of what's going on in the economy. I think people are being more cautious with their spend. We've seen that in terms of people, you know, just trying to limit how much they're spending on various, apps and so forth. And so I, I think that's really what's going on at, at Tinder.
I think that, you know, the smaller number of users obviously has some effect on à la carte purchase as well, but we've seen the amount of ALC being purchased has been declining per user. And so, you know, there's a lot of things that we can do to counteract that, and in fact, if you go back, you know, earlier, when the economy started to turn, we saw a little bit of this. We made some adjustments to the pricing of the à la carte features, to the packages that we were offering, smaller bundles, differently priced bundles of à la carte, and that did have some real impact and helped us for a while. And so now we need to readjust again to the latest realities, and I think we can do that in a lot of different ways.
We can roll out some new à la carte features. You know, we think there's room to do so, given we only have two à la carte features. We can adjust some of the existing à la carte features to make them work better for people, so people will look at those and say, "Well, this is working better. It's adding more value, and therefore, the sticker on it, the price on it, makes sense, and I'm willing to make the purchase." And we can make sure that people see the benefits of what we're offering well, and also, we're looking at taking some specific features out of subscriptions and also introducing them on an à la carte basis. So we've got to watch cannibalization there.
We don't want to cannibalize subscriptions with à la carte, but I think there's some features that really could resonate with people on an à la carte basis that currently aren't offered that way. So introducing new à la cartes entirely, offering things à la carte for the first time, and adjusting the way we offer things pricing-wise, marketing-wise, are all tools available to us. I think we have, you know, five, six, seven things along those lines that we're planning to roll out over the course of the coming months, and I think we'll see, you know, improvement in à la carte as we get to the back half of the year as well.
So on the subscription side, you did a lot of price increase last year. That was a big focus. You've had a few quarters now to analyze the impact of that. You mentioned weeklies earlier. Any evidence that you perhaps took price too much or too little in certain geographies? Just kind of thinking more broadly what your postmortem is on price increases in weekly subs.
It's interesting, you know, we get that question a lot, and it's something that's not, you know, debated internally. Meaning, when we look at all the data internally, we feel that the pricing increases and changes we made were clearly revenue-enhancing and clearly the right thing to do. So we don't have any concerns along those lines that there were really any issues. I mean, you can always adjust pricing up or down a little bit and, and get different effects, so we'll continue to make these adjustments. But when you look at what had happened, and you... You know, people probably remember this, when everyone kind of raised their subscription prices, Apple TV and Netflix and, you know, on and on and on... You know, Tinder really became gapped out pretty significantly from some of the other competitors and from where, you know, more typical subscription offering prices were.
We reduced the gap significantly. We actually didn't close it, so they're still not, you know, right on top of some of the competitors, and the demographics are different. There's lots of reasons for that. Ultimately, we closed the gap, and I think what we did, you know, absolutely made sense in terms of where the competitive landscape was. You know, we monitor very closely what the impact is on revenue. We did see a significant decline in the number of payers, as you would expect when you raise prices, but we did see overall revenue go up consistently, and the retention rates of those packages has been very strong as well. We feel very good about those decisions.
You know, it's created a lot of noise in our payer count, which has been complicated for people to get their arms around, and I understand that. The only, you know, the two bits of good news are, one, I think it was significantly revenue-enhancing, and two, we're basically lapping those more complicated payer comparables now as we get into the second and third quarter of this year. So that noise is going to die down, and all the stuff we've done to make adjustments to the Tinder ecosystem, you know, a lot of this will be behind us as we get through 2024, make the turn into 2025, and I think that will also, you know, make the business easier to understand and for people to get their arms around and see the true trends in the business.
And then sticking with payers, so you did reiterate, you said Tinder payers turning, net adds turning positive in Q3. It sounds like you're lapping the price increases, but could you just talk about what's underwriting your confidence in the improvement in getting to that positive net adds?
You know, I mean, I say a lot, we don't really love talking about sequential payers. I think at this point in Tinder's life cycle, it's really not that meaningful, a metric, but I know there's tremendous focus on it, and we do believe we're going to get Tinder payers to be positive net adds in the third quarter. You know, the reason for that is that I look at this on a year-over-year basis, and when you look at kind of Q1, payers are down 9% or so. I think it'll be similar in Q2. To get sequential adds in Q3, which tends to be one of the strongest quarters of the year, you know, we have to get to about negative 7% year-over-year Tinder payers.
Between some of the user trends that I described earlier, some of the product initiatives that are in the roadmap, the fact that Q3 tends to be a strong quarter for us, all those things, I think, give me confidence that we should be able to achieve 7% or better year-over-year growth, which will lead to the sequential growth that people are very focused on. And so we're, you know, we appear to be in position to do that today. You know, since we reported earnings a few weeks ago, the trends have stayed strong and stable. So, we feel good that there's nothing different than what we saw when we reported earnings a few weeks ago.
Then similar question, but on Q4, you talked about the path to Tinder payer growth on a year-over-year basis, getting a little more difficult, just given the slower start to the year. You know, curious on your thought process there. You know, you know, why not walk that guide back last quarter, and do you still think that's a real possibility?
Yeah, I mean, I think you framed it correctly. You know, when you start the year down 9% in the first quarter, and, you know, we're not expecting a lot of progress off of that number in the second quarter, it makes it harder to get where we wanted to be, which was to be positive year-over-year by the fourth quarter. There's still a path to get there, but I think the path has clearly become narrower. And so, you know, what I'm looking for really in the business is improvement in these payer numbers as we get through each quarter of the year. So I'd like to see us go from -9% to at least -7%, to something that's better than -7% by the fourth quarter.
I think there's a path to being positive, but I think if we can get close to positive, that would be a good outcome, and that will position us for continued progress as we make the turn into 2025.
Okay, and then two more on Tinder. We will talk about your other dating brands as well.
I'm used to it.
Just could you expand a little bit on the product or conversion initiatives you think could be most impactful on the payer side in the second half of the year?
Yeah, I mean, I think the way to think about Tinder's product roadmap is, you know, there, there's not sort of one single thing that's gonna happen, that's going to, you know, change the revenue picture or the payer picture or the user picture. I think that there's a number of adjustments that have to happen. We talked just on the à la carte side about 5, 6, 7 things are gonna happen there: pricing adjustments, offering adjustments, new initiatives. I think that's the right way to think about the rest of the roadmap as well. A series of initiatives to improve realness, so people feel like the people they're meeting are there for dating. A series of initiatives to improve relevancy, so people meet the people they wanna meet. A series of initiatives to improve the onboarding process, so that filling out your profile is easier.
You get your best pictures, you know, front and center. There's a lot of different things going on at Tinder, but there's not one or two or even three things to call out. It's a series of things in each bucket of the objectives that need to come together to make Tinder feel that it's catering to younger users, catering to female users, feels safe, feels like a good experience, feels like the efficacy is there, meaning the effort that somebody puts in to get the matches that they want, to get out on dates that they want to get out on, is a good equation for people. That's where I think there's room for improvement at Tinder, and overall, the team is very focused on delivering all of that.
Closing Tinder on a bigger picture one, you know, has your view on the longer-term outlook changed at all over the past few years? You know, one question we get a lot is: Why not kind of run Tinder more for a slower grower, you know, cash cow, if you will, invest in Hinge? What are your thoughts on that?
... Yeah, I mean, you know, look, first of all, just on the concept of cash cow, you know, you've got a business that's got 50% margins today and pays nearly 30% to Apple and Google. So, and which is, you know, not in our control, that amount, at the moment, right? So you're talking about other expenses that are in the 20% of revenue neighborhood. It's really not a significant, you know, burdened expense base. And so, you know, the goal is to keep the margins at Tinder quite high, but also get back to some level of sustained growth that we can all be happy with. And so that's the goal at Tinder. I think there's a path to do it.
You know, when you look at the number of people out there who could be using this product, who aren't, who could avail themselves with technology to meet other people, who aren't, there's really a lot of opportunity. So, you know, the demographics and the needs of the community have changed a lot over the last 10, 12 years. We need to innovate. We need to adjust the product. We need to satisfy people a little bit better. We have the teams to do that. As long as we do that, the growth will be back. I think we can do it in a financially prudent way, and that really is also the value-maximizing equation for the company.
To generate, you know, a good level of growth at good margins will lead to the maximum, you know, profitability and therefore value for shareholders, and that's what the company's committed to doing.
Okay. So moving to Hinge, continues to do incredibly well last quarter. What's resonating so well with users, and could you just walk through the building blocks to reaching the $1 billion revenue target?
Yeah, look, I think the product experience on Hinge does continue to resonate very well globally in all the 17 markets that Hinge has gone into thus far. And, you know, Hinge takes more work to get onto, and so, you know, the interactions on there, I think, feel a little bit more meaningful to people. You know, the business is designed to be deleted, meaning we wanna get people out on dates and get them off the app. The fact you have to put up 6 photos sets a little bit of a higher barrier than some other apps. The fact you have to answer prompts and really fill out information, and that it takes 30-40 minutes to get on Hinge, you know, weeds out people who are less serious and caters better to people who are a little bit more serious.
And so that whole, you know, experience is resonating in the current environment, in all these different cultures and all these different languages. And so, you know, Hinge just needs to keep going. It's still very early. It's very early in its monetization journey. It's very early in, you know, building awareness in a lot of markets. You know, even in the U.S., you know, people, you know, in markets that, you know, you probably spend time in or I spend time in, New York, San Francisco, L.A., you know, people are using Hinge and know Hinge very well. But if you go to the middle of the country, people are like: "Oh, I don't know that one.
You know, what is that?" And so, you know, there's still a lot of room for Hinge to gain share in other markets, in English-speaking countries, certainly in Western European countries. And so we're very focused on continuing user growth. They just rolled out, you know, the latest ad campaign, and there's a lot of work to do at Hinge. And, you know, when we look at the trends, and we've, you know, been through this before, once these businesses start getting traction, and they sort of build on themselves, when you look at additional markets that Hinge can go into, existing markets where we think we can gather more users, we look at the size of Hinge relative to a Tinder or other competitors out there, there's a lot of room to go.
Knowing that payer penetration, you know, the ratio of payers to total users is, is around half of Tinder's, a little bit more than, than half of Tinder's, tells you there's a lot of room to go to improve the monetization at Hinge, and I think there's a lot of room to go to increase the user base at Hinge. As a result of all of that, you know, you can see a pretty consistent growth pattern as you, as you look out. You know, if you take this year as an example, you know, I think Hinge is on pace to add about $140 million of revenue over last year.
So if you just extrapolate that out, and that number should actually get a little bit bigger as the base gets a little bit bigger, you know, you can see a business that gets to $1 billion of revenue in a few years, and then we sort of can go from there. But I feel good that that's the path the business is on, and I see the opportunity that it has to capture and signs that it's in position to do so.
I can vouch, a lot of opportunity in Middle America, in Kentucky.
Yeah, exactly. Exactly.
Does Hinge's success make the Tinder turnaround harder at all, just given...? Or, where's Hinge share coming from?
I mean, look, it's indisputable that if you have other strong competitors out there, it's harder for you to be successful, right? And so, yes, now that there's another very strong app out there with scale in some of the overlapping markets, I think it does make Tinder's job a little harder. But Tinder has a lot of very significant assets. We talked about the liquidity in all these markets. That's gonna take time and effort and money for Hinge to build out. I think Tinder is—you know, Tinder is already there, and therefore, it's got a big, you know, advantage. Everybody knows what Tinder is. Everybody knows the brand name. There's massive awareness, and that's not true just in the United States or in English-speaking markets. That's true globally. And so, so Tinder has massive advantages.
I think that when you look at the overlap, and we've analyzed a lot of this, there is a small percentage of people who leave Tinder and go to Hinge, but it's small. It's probably 10% or something in that zone of Hinge users that come from Tinder and leave Tinder. There's a lot of people who are using Tinder who then also start using Hinge. That multi-app usage, which is a real factor in the dating business, really benefits us with our portfolio strategy because people are using Tinder and people are using Hinge.
And in fact, the data shows that the most engaged users are using both of those apps, which makes sense, because if you're a serious dater and you wanna meet people, you're like, "Let me try both of them and see who I can find." And so, you know, that doesn't surprise us, but, you know, we've confirmed that with some of the data we've looked at. You know, I do think that because of its level of seriousness, Hinge is attracting some people who are not as attracted to Tinder, given the dynamics there. But we do think that there's plenty of room for Tinder to grow and continue to be successful, and we think that it can do it at the same time as Hinge is growing and being successful.
You know, that is the strategy of our business, is to operate these businesses that do compete to some extent. They can share learnings, they can avoid problems, but they can both find plenty of room, especially when you know how many people who are of dating age and who are trying to date are not using technology. It tells you there's lots of market for both of the businesses to continue to grow in.
Last one on Hinge. You called margins about high 20% range right now. Why is that the right level for Hinge? And any way to frame the margin profile when Hinge does reach its billion-dollar target?
You know, look, I think that Hinge has a different thing that it's trying to accomplish, which is trying to build awareness in all these markets where before it hasn't been. And so we have to spend more marketing dollars. You know, Hinge is sort of coming as the third, you know, modern dating app after the first two in Tinder and Bumble. And so there's more work to do and more money needs to be spent to grow awareness. And because the product resonates so well, the marketing works effectively because it lets people know about Hinge, they try the product, they enjoy using it, and they stay on it. And so the marketing really is paying off very well.
So, you know, I think where we look at where competitors are spending and the awareness that Hinge needs to create, it makes sense for Hinge to be spending the portion of its revenue that it's spending on marketing. Now, that will decline over time as the revenue continues to grow, as we expand out the base. So we'll get operating leverage in that line item over time. But right now, I think it's spending the right level of marketing. I don't think more is necessary, and I don't think less would be appropriate. We look at this a lot and debate it, but I feel good about where Hinge's margins are for this year, and I think there's room to grow them from there. So as the business continues to scale, we'll get operating leverage on the marketing line.
We'll get operating leverage on the people side because we've had to add a lot of people to grow the business into all these markets, to continue to build out the product. But we'll get operating leverage on those lines, and I think we have a path to get Tinder... I'm sorry, to get Hinge to kind of mid-30s margins, like where the company is. You know, there's some debate internally about exactly where it can land. I think there's a path to better than 35, but it's gonna require a certain level of scale and a certain level of efficiency and, you know, unclear exactly when we would get to that point or if we'd get to that point. So it's a little too early to say.
I can certainly imagine a scenario where we get to north of 35, but I don't know if ultimately that will be the right level or not. We need a little bit more time to continue to grow, grow Hinge and see what happens.
On AI, could you talk about, you know, how much of your R&D effort is targeted around AI, and what are some of the specific use cases you're exploring on the product side?
So first of all, you know, I believe that there is a lot of opportunity across our products from AI. I think that we're in the early days of it, and people just need to understand that this is gonna continue to build over the next five, you know, plus years, right? So it's not gonna be all immediately now, but there are gonna be significant areas where we can improve the products by leveraging AI. So if you take Hinge as an example, we're gonna introduce an AI photo picker on Hinge as well. And so I mentioned that you have to have six photos to set up your profile on Hinge, and a lot of people put the six photos on and don't know which one should be their main photo. You know, they're not good judges of their own photos, and they're not sure.
But yet the primary photo is a big deal 'cause that's the one that people focus on in deciding whether they want- they're interested in you, primarily. And so we're gonna implement AI technology, which will put the best photo, the likely most successful photo, as the main photo. Now that, if you think that through, should really enhance matching. You should get more matches, better matches, as a result of having the best photo you can, which is driven by our data that says, "This photo of you and your dog at the beach is the one that's going to attract the most people for you." And you'll have a better experience on Hinge and meet more people and see more value in the product as a result of that.
And so those kinds of enhancements to the product, whether it's in the onboarding, setting up the profile, et cetera, whether it's in the matching algorithms and who we introduce you to and how we explain why we think this person is the right person for you, et cetera, there's lots of opportunity there, as well as in the post-match experience, meaning once you've matched with someone, then what do you do? You know, a lot of people struggle to get the profile set up. They struggle to figure out who they wanna match with, and then once they finally match with someone, they really struggle with what to do next. When do you ask them out, you know, to meet in real life? What do you say to them initially?
AI can help by saying, "You know, this person is interested in, in art, and so we think that that's a thing you can start to talk to them about," or whatever it might be in the profile that we can kind of highlight, based on conversations you've had, based on photos that are in their profile. There's lots of information that AI can pull out of, somebody else's profile and offer help to make the, you know, the matching process and the post-match process a lot better. And so we're in the early days of that, but we're expecting to apply AI in all those different aspects of the dating journey and really make it better and more successful for users, and I think people will find the products more enjoyable to use.
You get better efficacy because you put in less effort, and you got better outcomes. And so all of that over the next few years is going to really lead to significant benefits. And so we're investing today so that we can see those benefits manifest themselves over time.
... So I had a few on Asia and emerging other. We'll skip those. We'll come back if we have time.
Okay.
I wanna make sure we get a few on the financials capital allocation. One on financials, just given the investments you've talked about making in Hinge and Tinder on the marketing side, how should we think about the margin cadence through the year relative to your 36% full year guide?
Well, I think, you know, the business tends to follow a relatively clear seasonality pattern, which is, you know, we make the biggest marketing investments in the first quarter, and so the margin tends to be lowest. We make the least marketing investments in the fourth quarter, when the market tends to be the most expensive for advertising, and people tend to be more preoccupied with the holidays, so that tends to be our highest margin quarter. And the two quarters in the middle tend to be somewhere in the middle. And I think the cadence for this year is likely to be similar to what it's historically been.
Okay. Capital allocation, so you've committed to using at least 50% of free cash flow to buy back shares in the coming years. You're doing more, more this year. Why buybacks over a dividend, and have you given thought to a one-time repurchase or dividend, just given your net leverage is below your target?
Yeah, look, I think that, you know, we've committed to returning a significant amount of capital to shareholders. You know, buybacks provide us with a lot of flexibility. That's been the typical mechanism to do so, but we're not ruling anything out. I think, you know, if things like a dividend make sense, and, you know, we're aware that, you know, some big companies like Facebook and Google have recently implemented dividends, you know, that's something that we would take a look at as well. So, you know, any tool that makes sense, we're happy to use it. We debate this a lot. Our board will obviously weigh in and have opinions on this as well. But I wouldn't take any tools off the table.
We're committed to returning significant capital, you know, I don't know about taking up the leverage, you know, to do a buyback. I agree with you that our leverage is below our targets, but at the same time, that's not something that's kind of being immediately contemplated.
Okay. One more on capital allocation. You said you don't anticipate making any acquisitions in the near term. Why not? And then on the flip side, any assets that you think could make sense to divest?
Yeah, look, I think right now we're internally focused. You know, we wanna make the product improvements and the AI investments that we wanna make. We wanna get Tinder to a better growth place, improve the user experience there. There's lots of runway, like we talked about for Hinge, and there's a clear plan to go capture it. So there really isn't a need for us to go acquire other things. We've actually incubated some new businesses. Archer has seen really good user growth. We built that business from scratch. You know, the model that we had with Hinge, where we buy something relatively small and apply our know-how and really build that into a big business, is a good model for us. So, you know, over time, I certainly am not ruling anything out.
You know, M&A's always been a big component of our arsenal, and I think at some point it will return. But today, we're focused internally, and so for the immediate term, I'd say the focus remains on making better what we have and continuing our internal growth.
All right, we have time to go back to Match Group Asia.
Okay.
Hyperconnect, how do you feel about that stabilizing as an asset? And then, more broadly, how do you see the business adding value to Match over time?
So, you know, as much as we talk about it, I think that the AI capabilities there are really underappreciated. You know, for a business of our size, we've got a tremendous engineering squad at Hyperconnect that's really advanced on the AI side, and they've done some great things already for their own business. And, you know, they're helping design the Photo Selector at Tinder and the photo picker at Hinge, which uses AI. So that's a real, you know, hidden gem for us, and we're gonna continue to leverage them across the portfolio on the AI side. You know, I think it's logical to think AI is gonna be a bigger and bigger component of things we're doing, and having that team at Hyperconnect is a real advantage.
So, that is a critical part of that entity and something that will continue to yield benefits for us. I would say that their Azar app, which leverages a lot of AI in the matching algorithm, is also performing extremely well, and so, you know, that's a solid growth business for us. It had been more Asia, Middle East focused. We've expanded it out into Europe over the last few months with really, really good results. It's really performing well in Western Europe on the user growth side, and I don't see any reason why we can't roll that business out into the U.S. later this year. So there's real opportunity for us at the Azar business of Hyperconnect.
Great. I think we're out of time, so we'll leave it there. Thank you, all.
Thank you.