All right, I think we'll get started. Good afternoon, everyone. Cory Carpenter, internet analyst at JP Morgan. Pleased to have Steven Bailey, CFO of Match Group. Thanks for joining.
Happy to be here.
Starting with safe matches, safe harbor. 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. Today, we may discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the published materials on our IR website. These non-GAAP measures are not intended to be a substitute for our GAAP results. Are we timing me? Okay. Let's see. Go on to the questions.
Let's start Look, I mean, I think it's no secret the dating industry, it's been challenged in recent years. What's your view on the state of the industry? What would you tell investors who may still be skeptical on the growth outlook for it?
Yeah, it has been challenging as a category as a whole. It's not unique to Match or unique to Tinder. It's a category problem. I think it's a product problem at that. Really what's happened is, the needs and tastes and wants of Gen Z, which is sort of the new generation of daters, is different than what it was with millennials. As we look back, I don't think we evolved the products fast enough, particularly Tinder, to meet those changing needs. We kind of, you know, fell asleep at the wheel a little bit, and now we're playing catch up. The good thing is, what we know from all our research is, you know, Gen Z wants meaningful connections. They wanna meet new people. They just wanna do it differently.
They want it to be lower pressure more than anything. They wanna sort of vibe their way through it. They don't want it to be a job interview. You know, Tinder was novel, cool, part of the zeitgeist for Millennials. It's not the same for Gen Z, and, you know, we sort of need to level up our game, and that's what we're hard at work doing.
You've been at Match through, I think, five CEOs.
It's six.
Six CEOs. you know, a number of turnaround efforts at Tinder. What feels different this time around that gives you the confidence that, you know, you're really turning the corner?
I would say two things. One is leadership. I mean, it starts at the top. Yes, I've been through Spencer, my sixth CEO. They all, you know, have their strengths and weaknesses. I think Spencer, more than anything, is by far the most experienced. He's the first, I think, the first real, you know, public company experienced CEO. He ran Zillow for 10 years. He's also a founder, right? He founded Zillow. He founded Hotwire. He's got a lot of sort of chops, street cred and a lot of experiences built up over time. How that shines through is, you know, a level of decisiveness.
He brings, certain principles that he's, you know, came in day one with that he's now executing, like a focus on user outcomes, for example. You know, the whole notion of it starts with building the right team. It ends with, you know, the stock price, not the other way around. Because he came in with effectively a mental framework for how to run a tech company, he's just been able to move very fast with a lot of confidence. That's different, clearly different than before. The second thing is the strategy.
Our focus away from purely revenue and profit and EBITDA, which we're very good at, Tinder's very good at monetization, more towards user outcomes and the user experience, I think, gives me confidence that we're building this turnaround from the ground up. That means it has staying power.
Okay, we'll spend a good chunk of time here on Tinder.
Okay.
I think first high level, you framed the Tinder turnaround as a three step process: reset, revitalize, resurgence. Could you elaborate on these three phases and where you're at in the process?
Yeah. I think reset is people and culture, and that was the focus of 2025. We did a little bit more of it in Q1. We merged Match Group, Match Group Asia with Eureka, but that's largely behind us. To my earlier point, you know, in Spencer's framework, it starts with the right people, the right team, and I think we're largely there. The revitalization phase is what we're clearly in the middle of now, which is all around product innovation. Now that we've got the right people, the right team, we've restructured the management layers, we've built a culture of urgency and accountability, now we're building product, particularly at Tinder and at Hinge.
What we think is through product innovation, that will get us to the resurgence phase, which is back to growth at Tinder and for the company as a whole in 2027. What we've set as revenue growth and payer growth by Q4 of 2027. That's the goal we've set, and I think we're on a pretty good path to get there.
Okay. A few quarters ago, you started giving stats showing Sparks, metrics improving.
Right.
I'll let you explain what that is. You built on that this quarter with registrations and retention both returning to growth for the first time in a couple of years.
Yep.
You know, what's driving these improvements, and how do you think about the sustainability?
Yeah. Sparks are a six-way conversation. That's our proxy for a meaningful connection. That's the focus of Tinder and the company. No longer is it a focus of just getting people likes that we can monetize. It's actually getting users into real meaningful connections, which is why they're on the app in the first place. That's the focus and everybody asked for, and we needed one internally too, like a metric that we can track progress against, and that's where we came up with Sparks and Sparks Coverage. For the last few quarters, that's been improving, which is great to see. You're right. Sparks Coverage, which is of the users we have, how many of them are getting into meaningful connections, that was up about 6% in Q1 year-over-year.
Even Sparks itself, which is the volume of six-way conversations we have, which is basically a function of MAU times the coverage, is nearing flat year-over-year. It was down 1% in Q1. We're making a lot of progress on the early indicators. The question was really, well, will that sort of carry through to the more core financial metrics that investors really care about? I think, you know, the answer to that is yes. The metrics, you mentioned a couple, retention, which is a really hard metric to move for our business and most sort of consumer tech businesses, is up 1% year-over-year globally. It's up 3% year-over-year for young females in the U.S., which is our core demographic we're going after.
What that's saying is the thesis is proving out that more Sparks and better outcomes for our users is leading to better user retention, lower, you know, what we call bad churn, less people leaving because they're not finding success on the app. Actually it's taking and what that's leading to, combined with improving registration trends, is, while not yet positive, improving MAU trends too, and payer trends as well. You know, the thesis is holding out, it's bearing fruit, and I think we're probably a little bit ahead of where we thought we'd be, but we're clearly not at the finish line yet.
Tinder hosted their first ever product event a few months ago. I was there. Very nice in L.A.
Thanks for coming.
You announced a number of new features there. Which of the product launches have been the most impactful thus far? What can you tell us about the product roadmap in the second half of the year?
Yeah. Actually the single most impactful change we made was with algorithms, so more on the back end. What that meant was largely, yeah, moving away from algorithms that optimize for likes distribution to moving towards algorithms that optimize for outcomes, for Sparks. We've seen a lot of success with that. I would say that that's two-thirds of the benefit we've seen is really in the area of algorithms, which I think does bode well for the sustainability of the turnaround in that that's so core and fundamental to the product. It's not a fancy bell or whistle that gains some excitement then fizzles out. It's the core crux of the product experience.
When you combine that with a new marketing strategy, which is a focus on further down the funnel, not just brand marketing, and new innovative features like Double Date, for example, that's really resonating with Gen Z. One in four Gen Z females in the U.S. is using Double Date, which is, for those of you who don't know, pairing up with a friend, swiping on other pairs, and going out on a double date. We good? The combination of those things is leading to sustainability of the turnaround.
Okay. I told you this. My goal of today is for everyone to walk out understanding the give back concept.
Let's make it happen.
We can discuss it now.
Let's make it happen.
Okay, we've got a lot of questions on this. You've talked about the concept of a 60 million user give back budget for this year. You didn't use as much as you thought you would use in the first half of the year?
That's correct.
Could you just clarify exactly what this is and why you did not end up utilizing those give backs in the first quarter?
Right.
All of them.
Right. At the beginning of the year, as part of the strategy, around optimizing for user outcomes, we realized that some of the changes we were gonna need to make to the product could have a short-term negative impact to revenue. For example, the example I just gave. If, you know, we were concerned that if we changed the algorithms that were effectively optimized to maximize revenue through likes distribution towards one that optimized for outcomes towards Sparks, we would lose revenue in the short term. We were prepared to do that because we knew, you know, monetizing a declining user base is not a winning strategy. Turning around users, getting it back to growth is a more sustainable strategy for long-term revenue and profitability.
That was the reason behind setting up the $60 million give back budget. What we found is we started testing these things. A lot of the tests have centered around algorithms that the outcome of that was not as bad as we expected. I'll give you just an example. We tested two big algorithm changes. First of all, we have multiple algorithms and not just one. We've tested two big algorithm changes. One kinda played out like we expected. It drove more Sparks and better Sparks Coverage, but it cost around $15 million in annualized revenue, negative revenue impact. That's kinda what we thought would happen. There was another algorithm change that we made that drove improved Sparks and Sparks Coverage, but actually also added $30 million of annualized revenue, right?
Which was unexpected. When you net all these tests together, what we were left with was rolling out tests that improved user outcomes and actually added to revenue, not detracted from revenue. Now, that's why we didn't use as much of the budget as we expected in the first half of the year. What we've done is, while it's been lower than expected in the first half of the year, we're saying we expect that to increase in the second half. We have $45 million budgeted for user give backs in the second half of the year. The reason for that disconnect is because what we plan to test in the back half of the year is not the same things as what we test in the first half of the year. It won't be centered as much around algorithms.
It'll be centered around other feature and UX changes that we wanna test. Because we're unsure of the impacts of those tests, we're keeping that budget there. There are a few that we're ideating on that are pretty bold tests. We don't wanna constrain the product team from making really bold product tests that improve outcomes and improve the user experience because they're worried about hitting the revenue guidance. We've left the $45 million, you know, cushion in place to see how that plays out. If the, you know, the past couple of quarters is a predictor of the future quarters, you know, there's a chance we could come under in the back half too.
Makes sense to me. If anyone still needs clarification, feel free to raise your hand.
Thumbs up, thumbs down.
All right, this is probably building on that question. The guide you gave, it assumes, you know, the $45 million in givebacks in the back half of the year.
Right.
It also assumes that Tinder You don't guide formally with Tinder payers, but you're, you know, roughly saying Tinder payers kinda stay around the negative 5% in the back half of the year.
That's right.
you know, I think the question we get is if payers improve from down 8 to down 5.
Right
You know, why would we not see continued improvement in that metric?
That's because of the user givebacks. Because of the back-weighted nature of the user givebacks, if we end up utilizing that $45 million, which again, on the P&L shows up as $45 million less revenue, which flows through after IAP fees down to EBITDA, right? It also shows up in the payer number because that's, you know, it's not really a pricing or RPP thing, it's more a payer thing. We're giving a better experience for the collective user base, most of which are free, and for the ecosystem as a whole, but it could cost us some revenue in payers in the short term. If you did Think about it as the impact to payers is proportional to the impact to revenue.
If you think about the $45 million as a percentage of the second half revenue for Tinder, and take that as a percentage, think about it similarly on the payer side. If you, if you play that math out, basically what's happening is the improvement in MAU and overall business trends that has been leading to improved payers trends will continue, but could be offset by the user givebacks. That's what's netting us out to about down 5% each quarter. If the user givebacks don't happen, then we should continue to progress more towards flat by the end of the year. Still probably down, but meaningfully better than the -5% we are at today.
Makes sense. Okay. We'll move on. Let's talk about AI a bit. I think first from a product perspective, you know, how is AI impacting the Tinder user experience, and what role do you see it playing in dating more broadly?
I think it has broad applications. The few places that it's showing up in Tinder is one, algos, which we've talked a lot about. It's just so much better than the old rules-based algorithms. It can use more, you know, unstructured data, more nuanced data. The, you know, the word is probably inference. It can infer things about you that the old rules-based algorithms could not. We found a lot of success there at Tinder and at Hinge. I think it's still early days. Like I said before, the crux of the product experience is the algorithms. That's one. The other one is more of forward-facing features. Chemistry is a good example. Still pretty early, that is a curated drop or match, highly curated match, that's completely different than the core swiping experience.
Think of it as, you know, AI gets to know you a little bit better through a, through a like sort of lightweight back and forth. It can therefore, because it knows more about you, it can give you a better match. That's something that would, you know, is resonating with Gen Z too. You know, they don't wanna just get on the app and swipe. That's another area. Then the third area would be trust and safety. There's a lot of really cool applications with AI around trust and safety. Like, are you sure? Does this bother you? These are nudges within the app that help improve the trust and safety experience across the app.
Just from a cost perspective, a lot of, you know, conversations this week around token costs and all of that. How do you expect AI to impact headcount and expenses across the company?
Yeah. We're embarking on a huge AI enablement push. We've got our AI day internally this week. We gave, we announced a week ago now that every employee in the company would get access to cutting-edge AI tools. We think this is a big opportunity. The way we're effectively paying for it is by slowing down hiring. I think you see that across the tech industry. Folks are taking one of two paths. I mean, I think for everybody, the AI costs are coming in higher than they expected. You hear that time and time again. We did not budget for what will, you know, what could be $5 million-$10 million in tooling costs for our business on an annualized basis, which is meaningful. That was not in the budget.
We see the benefit of it. The way we're paying for it is effectively slowing down hiring. Companies are either slowing down hiring or they're reducing the size of their headcount. We're slowing down hiring instead. We had gone through a big riff last year. We feel pretty good about where our headcount is. That's effectively how we're paying for it. The reason is twofold. One is not only because we need to sort of find a way to pay for these tools, also because we wanna see, you know, the needs of the organization, what roles we need, what roles we don't need, as we infuse AI through all the departments in the company.
Sticking with expenses, you outlined a few areas of cost savings at earnings a few weeks ago. You have, you know, App Store fees are a good tailwind for you this year, assuming they don't change again. Maybe could you talk about the big expense initiatives that you're doing this year? I think more broadly, like, you know, how much more You're pretty profitable, 40-ish% margin. How much more opportunity do you see on the expense side?
I think there's two pockets that I'm focused on right now. We, you know, generate about $100 million in savings on the headcount side. We've generated over $100 million in savings on the IPP side. I feel good about I think that's pretty optimized, and we fed that back into the business for further investment and growth instead of dropping it down to the bottom line. It gives us, you know, a lot of flexibility. The areas we've spent a little less time in, one is cloud costs. We've got an initiative, particularly at Tinder, to reduce cloud costs through dev optimizations. You know, that was a code base that was built up over 10 years. Really hadn't been a focus. It's not gonna be as big as IPP savings.
You know, our cloud costs are round numbers, call it $100 million per year. I think we can chip away at that, and we've got a plan to do it. The teams are executing against some goals there. The second, probably, you know, bigger one is really around marketing. We talked about in the last call a couple weeks ago that we merged the performance marketing team into one team that sits across all brands at the company. We spend $600 million a year in marketing, rough numbers. It's been done in a somewhat siloed way. Now we've got a whole new approach to marketing, which we call Prism, which is a framework we use that shows marketing ROI on an apples-to-apples basis across all our brands.
We've also now merged the teams into one performance marketing team that I think will unlock a bunch of efficiencies. The way I think about it is, can we optimize the $600 million by 10%, right? Given the fact that it was kinda run by in a siloed way before, probably. That's $60 million. You can drop that down to the bottom line, or you can keep spending the $600 million, but get 10% more for it. 10% more regs, 10% more payers, 10% more revenue. We'll probably go that direction because we think marketing is working for Tinder, but I think that's a big area of optimization for us.
Okay. Moving to your other brands. Hinge continues to track towards your $1 billion revenue target.
Right
for next year. Where do you still see the most opportunity for growth at Hinge?
I think there's really three big pockets of growth. 1 is monetization in core markets. They still under-monetize relative to Tinder if you look at it on an apples-to-apples basis. I know folks get confused, like the RPP of Hinge is so much higher than the RPP of Tinder. You're only looking at one side of the equation, really. It's really RPP and payer penetration that matter. Both of them matter. If you just look at revenue per MAU, for example, which nets the two together, and control for the geography mix and the gender mix, there's still runway for Hinge to monetize better in core markets. I think the bringing a better value proposition to females is another big lever for them in core markets where females under-monetize.
That's a category-wide thing that they have some really interesting plans to address. Then the second is just more room for growth in the existing expansion markets. Europe is still, while they've been there for two years, it's still a pretty small percentage of total revenue. If you just look at it in proportion to the U.S., we've got other benchmarks like Tinder, for example. There's still a long runway to go there. I think that will come naturally through just sheer momentum. I mean, the revenue was up 100% in the last few quarters there year-over-year in Europe for Hinge. Then the third is expanding to new markets.
I think what I'm excited to see is not that South America is a massive market from a revenue perspective, but what it's showing is the continued global appeal of Hinge as a product. What that tells me is, it builds my confidence in can we take it to Asia? Can we take it to bigger countries like Japan, where there is a lot, really high TAM and revenue base? I think the answer is clearly yes there, and that will provide a long runway too. We don't need a Japan to get to $1 billion, but we need a Japan to get well beyond $1 billion. I think, you know, we're all really confident in the progress we're making there.
I think one question we've started to get now that Tinder's, you know, stabilizing is, do you have any concern that a Tinder resurgence could perhaps come partly at the expense of Hinge?
You know, no. I mean, what we've seen is, cannibalization has not been an issue. It's, again, a category issue. When we enter new markets with Hinge, like when we entered Mexico and Brazil, we looked at it really closely to see is Hinge's early success there taking away from Tinder? The answer was clearly no. Tinder trends held up quite well. Hinge added downloads and, you know, Match Group as a whole grew in those regions. I think the opposite holds true. I mean, one of the things we're really focused on is, you know, the gem we talk a lot about, which is where our brands fit within our portfolio. Clearly, you know, Hinge is in the focused part of the gem.
Directly across from that is the fun part of the gem, which is where Tinder lies. As long as we keep those products distinct and the brand positioning and the product positioning unique, I don't see a problem. It's a multi-app usage category. Users are using three-plus apps at a time. I think there's a use case for both. I mean, that You know, what we wanna do is keep the Hinge growth going and get Tinder back to user growth. You know, that's the formula to get, you know, the Match Group stock price up and the company back on the right footing.
I wanna ask about you've made two minority investments. You know, Sniffies is very recent and then also Overtone from the Hinge founder. Could you talk about these two businesses and just how you're thinking about the You know, why the minority investment route and how you're thinking about the optionality to build that ownership over time?
Yeah. They're a little bit different use cases. Sniffies we made a minority investment in, you know, as a founder-led startup that we've invested in. I think the reason behind that is it's the biggest segment of the category, the non-heterosexual male segment of the category, that we don't really play in. We tried to do that with Archer. They built a great product. It's been a couple of years. We've invested a bunch in marketing and in people, and it hasn't gained the product-market fit that we had hoped. We've pivoted the strategy. We've shut that business down.
We're gonna save on OpEx, on headcount, on SBC, which helps the P&L, and we're making a minority investment in Sniffies, which is the number two player in that space, and we think a path to number one. They'll benefit a lot from our trust and safety know-how, just, you know, our institutional knowledge of the category. At the same time, a minority investment does two things. One, it, you know, keeps it off our P&L, although it's a profitable business and growing quite nicely from a revenue and EBITDA perspective. It also lets them continue to be a startup founder-led organization. It doesn't sort of lose the magic it created by coming in and being part of a larger, you know, public company.
The idea is, leave it founder-led, give it more support, the support that it needs to reach its full potential, and then we have the option to buy it down the road. Which is a similar approach to what we took at Hinge, and that's worked out phenomenally well. We bought Hinge for $20 million-$30 million back in 2017, and look at it now. If we could repeat that playbook, that would be great. Overtone's a little bit different. Overtone we incubated internally and then spun out, and we have a minority investment there. That is, because it's, you know, a new bet on the category, right? It's a truly AI native experience. We think there's room for that in the category. Nobody's really cracked the code yet.
I think Justin, given his experience in the category, has a leg up against other startups. It also is gonna take a while, and it's gonna accumulate losses, and there's a low probability of ultimate success. I like to do those things sort of off-balance sheet in a, in a minority investment way with the option to buy it to the extent it does gain product market fit, and we think it's a good long-term fit for the portfolio.
I think that's a good segue to just capital allocation. You kind of laid out your capital allocation framework at your investor day two years ago, maybe at this point. You know, maybe refresh us.
December 2024.
Yes. Refresh us on the capital allocation strategy and, you know, Are there any changes that you're making to it?
The short answer is no. Look, I think Sniffies is a big bet, but at $100 million out of the $1.1 billion in free cash flow for the year, like from my perspective, it's, it's very manageable, right. Doing a Sniffies deal does not take away from our commitment to return 100% of free cash flow to shareholders through largely buybacks and also a dividend. That hasn't changed. I think going forward, you know, we don't have any plans to do large-scale acquisitions. We'll continue to do this tuck-in approach. The primary objective will be Really our first and foremost objective is invest organically in our businesses, right.
We're investing in marketing and in product at Tinder and Hinge to keep, you know, Hinge growth going and to turn around Tinder. We feel like they have the right levels of investment. Second is returning cash flow to shareholders through buybacks and the dividend, and I think it's a really powerful formula given where the stock price is at. We bought back about 5% of shares over the last year. We're buying down the shares outstanding while turning around free cash flow. Those two things compound on each other and, you know, free cash flow per share, for example, grew, I think, 23% last year. That's a powerful formula if we can keep it going.
Before I ask about App Store fees, any questions in the audience? All right. I'm gonna bore you with App Store fees. Okay. You've talked about, I think, over $100 million of savings from lower App Store fees this year. I think two questions. You know, one, now that you're kind of fairly advanced in your rollout of alternative payments, like what have been your key learnings? I think secondly, what are the key pieces of, you know, legislations or trials that you're watching that could impact fees in the future?
Yeah. You know, it's all comes down a couple of learnings. One, friction is the most important thing. As we've improved the experience to make it more and more frictionless, that has led to better financial results. As we said, we're about 10% ahead of expectations against that $110 million in savings. A lot of that's through is just optimizing the flows. Like one win was just improving the tech around web payments that increased the time, the checkout time, fractions of a second, you know, adds up to real dollars. Then two, I mean, using Apple Pay payment options that are pretty frictionless because it's different than Apple Pay is different than IAP. Apple Pay is more like a credit card.
You know, the adoption of Apple Pay is very high, so folks already have their credit cards with Apple. They don't have to get their credit card out and fill out a, you know, credit card form. It's those types of things that have led to real benefits. You know, we have sort of the test discounting a little bit and found that that was not a big lever. It's really about optimizing the flow more than anything. The court cases that we're watching. Really there's two, Apple versus Epic, and Google versus Epic. They're both going through the courts. Apple versus Epic is in appeal, and we're waiting to see how those both play out to ultimately see where the fee structures land.
Google did recently roll out a new fee structure. People should note that the U.S. component of that is still subject to court ruling. The judge has essentially said that he doesn't agree with it. It's not fair enough to developers. You know, we're watching how that all plays out. We expect probably a ruling on the Apple. It's hard to tell. Our, you know, the lawyers internally think within the next few quarters, likely this year. In the meantime, what we're doing is just, you know, maximizing all payment savings to the greatest extent possible.
All right. Last one, then we'll get you on time to your flight.
Great. That's great.
You're hosting a CEO Connect event on June 11th. I think it's the first time you've done an event like this. What type of, you know, sneak peek could you tell us in terms of what investors should expect around that event?
Yeah, this is gonna be a really interesting one. I get. It goes back to a lot of questions I get around the consumer, around Gen Z. It's all about Gen Z insights. It's us sharing all the research that we have on what Gen Z's looking for, what their dating habits are, what they're looking for in a dating app, and it also goes into Gen Alpha too, where we're getting some early reads on, you know, on how Gen Alpha is similar or different than Gen Z. You're gonna get to hear from our data scientists, our researchers, our product experts all around Gen Z and Gen Alpha and dating.
Great. Oh, one question. Okay.
Thanks. Question is this. Thanks. Just be easy. Okay. Great. Thanks. With regards to competitive landscape, you know, Bumble's had their issues. They've made some changes. I think they just got rid of the swipe.
They're saying they're gonna get rid of the swipe, yes.
Yeah. I'm just wondering if you think three to five years from now, how you would expect the competitive landscape to look different, you know, vis-a-vis three to five years ago. Is it still gonna be sort of you and Bumble? Is it gonna be AI-enabled, different players with a different model? Is Facebook gonna, you know, kind of encroach on someone's turf? How do you see that all playing out?
Look, well, I mean, we'll have to see. I think Tinder is still by far the largest dating brand in the world by a multiple. I think it has real staying power if we can improve the product experience. What we're doing is we're not throwing out the swipe. We're evolving it. I think Double Date is a great example where it just totally transformed the experience from swiping to matching with pairs, going out on a double date. It's exactly what Gen Z wants. It's safer. It's more fun. It's lower pressure. We've got new modes like astrology that is totally in the Gen Z zeitgeist. I feel like we're You know, Tinder's gonna continue to evolve.
I think another space I see as, you know, fertile ground for the next, forget three to five years, the next few years, is really a focus on IRL. I think, you know, apps are gonna start to blend, and Tinder in particular, you know, online versus offline. The line is gonna get blurred, Tinder is gonna become a way you can, you know, a tech platform or conduit for meeting people in real life. Less about swiping and chatting and more about those IRL connections. That's what Gen Z wants. We've got a pilot in L.A. We've done 30 events there. We're doing it in a way that's scalable and doesn't affect our margin profile. We don't wanna be an events company. We wanna be a technology company. You know, these events are already out there.
What the events need are the singles, what we need is a means for people to connect in real life, I see a huge opportunity there. I think that's gonna be a big part of the roadmap for Tinder going forward. That's one area I would say is IRL. The other area is I do think AI will play a role. I think Overtone is a great bet. Can someone figure out a truly AI-native approach? It will likely be more of a higher intent use case. Think of it as, like, more like a digital matchmaker of sorts, I do think there's a place for that in the category. In terms of the competitive landscape, you know, look, liquidity still matters, right?
AI has made it incredibly easy, got 20 seconds left, incredibly easy to build an app. You or I can go build an app tomorrow. You or I cannot gain, you know, liquidity in a double-sided network effect ecosystem. You know, AI cannot beat the cold start problem. I think that gives tremendous competitive advantage to brands like Tinder and Hinge that have built true scale, and to a certain extent, Bumble. In terms of Bumble itself, like, we're, in a way, rooting for Bumble to win because you know, Bumble is part of the category as a whole too, and it's a category challenge. If Bumble levels up, does better for users, so does Tinder, Hinge keeps going and innovating, the category as a whole grows.
There's much more room to grow the pie than there is to divide the slices. Just remember, category adoption is 30% or so in developed markets, and 10%, I think it's like 6% or 7%, in developing markets. Really the long-term play is grow the pie. I'm not We're less worried about, you know, how the competitive landscape shakes out.
I think we need to end it, but thank you.
Thank you so much. Thank you.