Match Group's Margin Sensitivity To In-App Purchase Commissions

Nov. 11, 2021 5:59 PM ETMatch Group, Inc. (MTCH)AAPL, BMBL, GOOG, GOOGL2 Comments
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RegulatoryAlpha
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Summary

  • Match Group expects to pay 19% of revenue (or over $550M) to App Stores this year.
  • App Stores are coming under increasing fire for extracting allegedly unearned value and generating supra-competitive profits from developer-user commerce which they merely facilitate.
  • These regulatory efforts are likely to limit the effective rates charged on in-app purchases.
  • Match Group will likely pay App Stores lesser percentages of its revenue in the coming years, leading to positive margin improvements and an attractive investment opportunity.

Female using a dating app on smart phone

Luis Alvarez/DigitalVision via Getty Images

Introduction

Match Group (NASDAQ:MTCH) expects to pay over $550M this year in app store charges as reported in its Q3 2021 earnings call. These charges, which are divided roughly 80/20 between Apple's (

This article was written by

RegulatoryAlpha profile picture
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Bay Area lawyer interested in competitive dynamics and valuations, with particular focus on how regulation affects industries and firm valuations. Follow on Twitter (@RegulatoryAlpha) and Substack (https://regulatoryalpha.substack.com/).

Disclosure: I/we have a beneficial long position in the shares of MTCH, GOOG either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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