What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-02-24 compared with 2021-02-25 · 278 added, 255 removed, 357 unchanged (60% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

2021 Developments

On March 26, 2021, Match Group Holdings II, LLC (“MG Holdings II”), amended its credit agreement to provide for a $400 million incremental “delayed draw” term loan facility (“Delayed Draw Term Loan”), the proceeds of which could be used only to finance a portion of the consideration for the acquisition of Hyperconnect, Inc.

(“Hyperconnect”).

The Delayed Draw Term Loan was terminated effective June 18, 2021 according to its terms.

On June 17, 2021, Match Group completed the acquisition of Hyperconnect.

The purchase price was $1.75 billion, net of cash acquired.

The acquisition was funded with cash on hand and the issuance of 5.9 million shares of Match Group common stock.

On October 4, 2021, MG Holdings II completed a private offering of $500 million aggregate principal amount of 3.625% Senior Notes.

The proceeds from these notes were used to redeem a portion of the outstanding 2022 Exchangeable Notes, for general corporate purposes, and to pay expenses associated with the offering.

On October 4, 2021, we repurchased approximately $414 million aggregate principal amount of our outstanding 2022 Exchangeable Notes for approximately $1.5 billion, including accrued and unpaid interest on the repurchased notes, funded with:

net proceeds of $879.0 million from a registered direct offering to the holders of the 2022 Exchangeable Notes being repurchased of 5,534,098 shares of our common stock at a price of $158.83 per share;

approximately $420 million of net proceeds from the 3.625% Senior Notes offering;

net proceeds of approximately $201 million from the unwind of a proportionate amount of outstanding hedges and warrants corresponding to the 2022 Exchangeable Notes being repurchased.

In connection with these transactions, the statement of operations for the year ended December 31, 2021 reflects a loss of $14.5 million, included in other expense, net, primarily related to the change in fair value of the embedded derivative we recognized during the period between our entering into the various agreements on September 22, 2021 and settlement on October 4, 2021.

On December 1, 2021, we agreed to settle the pending, threatened, and potential claims at issue in Rad, et al.

v IAC/InterActiveCorp, et al.

and related arbitrations.

Under the terms of the agreement, Match Group agreed to pay the plaintiffs and claimants $441 million and plaintiffs and claimants agreed to dismiss all claims in trial and in arbitration.

We expect to pay the settlement amount in 2022 utilizing cash on hand.

The $441 million settlement is included in other expense, net for the year ended December 31, 2021.

Updated Operating and Financial Metrics

In 2021, we adjusted our key operating and financial data to provide better insight into the performance of our business.

We are disclosing this data in three geographic areas—Americas, Europe, and APAC and Other.

Additionally, rather than presenting Average Subscribers and Average Revenue per Subscriber (“ARPU”), we now present Payers and Revenue Per Payer (“RPP”) (as defined below).

Unlike Average Subscribers, which included only users who purchase a subscription and were counted on a daily basis, Payers include all users from whom we earn revenue (including those who make only à la carte purchases) and are counted as unique users in a given month.

Similarly, ARPU was a daily metric and included Direct Revenue sourced from subscribers only, whereas RPP is a monthly metric and includes all Direct Revenue.

We believe that Payers and RPP, which account for non-subscriber users and the associated revenue, is more useful in evaluating the performance of our business.

We believe presenting Direct Revenue, Payers, and RPP in three geographic regions enables investors to better understand our operating performance and is appropriate given our expanding global footprint.

The new metrics also better account for the increasing à la carte revenue as a percentage of total revenue that the company earns and enhance comparability with our peers.

Additionally, we have updated the title of our primary non-GAAP measure to “Adjusted Operating Income” from our previous title “Adjusted EBITDA.” We believe this updated title better reflects how management views the non-GAAP measure in relation to the closest GAAP measure, operating income.

The calculation of the non-GAAP measure has not changed, and therefore the reconciliation of Net Income to Operating Income and to Adjusted Operating Income have not changed.

See “Non-GAAP Financial Measures” below for the full definition of Adjusted Operating Income and a reconciliation of net earnings attributable to Match Group, Inc.

shareholders to Operating Income and Adjusted Operating Income.

Separation from IAC

On June 30, 2020, the companies formerly known as Match Group, Inc.

(referred to as “Former Match Group”) and IAC/InterActiveCorp (referred to as “Former IAC”) completed the separation of the Company from IAC through a series of transactions that resulted in two, separate public companies—(1) Match Group, which consists of the businesses of Former Match Group and certain financing subsidiaries previously owned by Former IAC, and (2) IAC, consisting of Former IAC’s businesses other than Match Group (the “Separation”).

As part of the Separation, Former Match Group merged with and into Match Group Holdings II, LLC (“MG Holdings II”), an indirect wholly-owned subsidiary of Match Group, with MG Holdings II surviving the merger as an indirect wholly-owned subsidiary of Match Group.

As part of the Separation, Former Match Group merged with and into MG Holdings II, an indirect wholly-owned subsidiary of Match Group, with MG Holdings II surviving the merger as an indirect wholly-owned subsidiary of Match Group.

As a result of the Separation, the operations of Former IAC businesses other than Match Group are presented as discontinued operations.

For additional information relating to the Separation and the related transactions and agreements, see “Part I—Item 1—Business—Separation of Match Group and IAC” and “Part I—Item 1—Business—Relationship with IAC after the Separation.”

Other 2020 Developments

On February 11, 2020, MG Holdings II completed a private offering of $500 million aggregate principal amount of 4.125% Senior Notes.

The proceeds from these notes were used to pay expenses associated with the offering and to fund a portion of the cash consideration of $3.00 per Former Match Group common share in connection with the Separation.

On February 13, 2020, the Credit Facility was amended to, among other things, increase the available borrowing capacity to $750 million, reduce interest rate margins by 0.125%, and extend its maturity to February 13, 2025.

Additionally, on February 13, 2020, the Term Loan was amended to reprice the outstanding balance to LIBOR plus 1.75% and extend its maturity to February 13, 2027.

On May 19, 2020, MG Holdings II completed a private offering of $500 million aggregate principal amount of 4.625% Senior Notes.

The proceeds from these notes were used to redeem the outstanding 6.375% Senior Notes, for general corporate purposes, and to pay expenses associated with the offering.

In July 2020, in connection with the Separation, the sale of 17.3 million newly issued shares of Match Group common stock was completed by IAC.

The proceeds of $1.4 billion, net of associated fees, were transferred directly to IAC pursuant to the terms of the Transaction Agreement.

Operating metrics:

• North America - consists of the financial results and metrics associated with users located in the United States and Canada.

• International - consists of the financial results and metrics associated with users located outside of the United States and Canada.

Operating and financial metrics:

• Americas includes North America, Central America, South America, and the Caribbean islands.

• Europe includes continental Europe, the British Isles, Iceland, Greenland, and Russia, but excludes Turkey (which is included in APAC and Other).

• APAC and Other includes Asia, Australia, the Pacific islands, the Middle East, and Africa.

• Direct Revenue is revenue that is received directly from end users of our products and includes both subscription and à la carte revenue.

• Indirect Revenue - is revenue that is not received directly from an end user of our products, substantially all of which is advertising revenue.

• Subscribers - are users who purchase a subscription to one of our products.

Users who purchase only à la carte features are not included in Subscribers.

• Average Subscribers - is the number of Subscribers at the end of each day in the relevant measurement period divided by the number of calendar days in that period.

• Average Revenue per Subscriber (“ARPU”) - is Direct Revenue from Subscribers in the relevant measurement period (whether in the form of subscription or à la carte revenue) divided by the Average Subscribers in such period and further divided by the number of calendar days in such period.

Direct Revenue from users who are not Subscribers and have purchased only à la carte features is not included in ARPU.

• Indirect Revenue is revenue that is not received directly from an end user of our services, substantially all of which is advertising revenue.

• Payers are unique users at a brand level in a given month from whom we earned Direct Revenue.

When presented as a quarter-to-date or year-to-date value, Payers represents the average of the monthly values for the respective period presented.

At a consolidated level, duplicate Payers may exist when we earn revenue from the same individual at multiple brands in a given month, as we are unable to identify unique individuals across brands in the Match Group portfolio.

• Revenue Per Payer (“RPP”) is the average monthly revenue earned from a Payer and is Direct Revenue for a period divided by the Payers in the period, further divided by the number of months in the period.

Operating costs and expenses:

• Cost of revenue - consists primarily of the amortization of in-app purchase fees, compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in data center and customer care functions, credit card processing fees, hosting fees, live video costs, and data center rent, energy, and bandwidth costs.

In-app purchase fees are monies paid to Apple and Google in connection with the processing of in-app purchases of subscriptions and product features through the in-app payment systems provided by Apple and Google.

• Selling and marketing expense - consists primarily of advertising expenditures and compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in selling and marketing, and sales support functions.

In-app purchase fees are monies paid to Apple and Google in connection with the processing of in-app purchases of subscriptions and service features through the in-app payment systems provided by Apple and Google.

• Selling and marketing expense - consists primarily of advertising expenditures and compensation expense (including stock-based compensation expense) and other employee-related costs for

personnel engaged in selling and marketing, and sales support functions.

Advertising expenditures includes online marketing, including fees paid to search engines and social media sites, offline marketing (which is primarily television advertising), and payments to partners that direct traffic to our brands.

• General and administrative expense - consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in executive management, finance, legal, tax and human resources, acquisition-related contingent consideration fair value adjustments (described below), fees for professional services (including transaction-related costs for acquisitions), and facilities costs.

• Product development expense - consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs that are not capitalized for personnel engaged in the design, development, testing, and enhancement of product offerings and related technology.

• Acquisition-related contingent consideration fair value adjustments - relate to the portion of the purchase price of certain acquisitions that is contingent upon the financial performance and/or operating metric targets of the acquired company.

The fair value of the liability is estimated at the date of acquisition and adjusted each reporting period until the liability is settled.

Significant changes in forecasted earnings and/or operating metrics for the acquired company will result in a significantly higher or lower fair value measurement.

The changes in the estimated fair value of the contingent consideration arrangements during each reporting period, including the accretion of the discount if the arrangement is longer than one year, are recognized in “General and administrative expense” in the accompanying consolidated statement of operations.

Long-term debt:

• Credit Facility - The revolving credit facility of MG Holdings II.

At December 31, 2019, $500 million was available under the Credit Facility.

On February 13, 2020, the Credit Facility was amended to, among other things, increase the available borrowing capacity from $500 million to $750 million, reduce interest rate margins by 0.125%, and extend its maturity from December 7, 2023 to February 13, 2025.

At December 31, 2020, the Company had letters of credit of $0.2 million outstanding and therefore $749.8 million was available under the Credit Facility.

• Term Loan - MG Holdings II’s term loan.

At December 31, 2019, the Term Loan bore interest at LIBOR plus 2.50% and the then applicable rate was 4.44%.

On February 13, 2020, the Term Loan was amended to reprice the outstanding balance to LIBOR plus 1.75% and extend its maturity from November 16, 2022 to February 13, 2027.

At December 31, 2020, the applicable interest rate was 1.96% and $425 million was outstanding.

• Credit Facility - The revolving credit facility under the credit agreement of MG Holdings II.

At December 31, 2021, there was $0.4 million in outstanding letters of credit and $749.6 million of availability under the Credit Facility.

As of December 31, 2020, there was $0.2 million in outstanding letters of credit and $749.8 million of availability under the Credit Facility.

• Term Loan - The term loan facility under the credit agreement of MG Holdings II.

At December 31, 2021 and December 31, 2020, the Term Loan bore interest at LIBOR plus 1.75% and the then applicable rates were 1.91% and 1.96%, respectively.

At December 31, 2021, $425 million was outstanding.

• 6.375% Senior Notes - MG Holdings II’s 6.375% Senior Notes, which were redeemed on June 11, 2020 with the proceeds from the 4.625% Senior Notes.

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At December 31, 2021, $450 million aggregate principal amount was outstanding.

• 4.625% Senior Notes - MG Holdings II’s 4.625% Senior Notes due June 1, 2028, with interest payable each June 1 and December 1, which were issued on May 19, 2020.

At December 31, 2021, $500 million aggregate principal amount was outstanding.

• 5.625% Senior Notes - MG Holdings II’s 5.625% Senior Notes due February 15, 2029, with interest payable each February 15 and August 15, which were issued on February 15, 2019.

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• 4.125% Senior Notes - MG Holdings II’s 4.125% Senior Notes due August 1, 2030, with interest payable each February 1 and August 1, which were issued on February 11, 2020.

The proceeds were used to pay expenses associated with the offering and fund a portion of the $3.00 per common share of Former Match Group that was payable in connection with the Separation.

At December 31, 2021, $500 million aggregate principal amount was outstanding.

• 4.625% Senior Notes - MG Holdings II’s 4.625% Senior Notes due June 1, 2028, with interest payable each June 1 and December 1, which were issued on May 19, 2020.

The proceeds were used to redeem the outstanding 6.375% Senior Notes, for general corporate purposes, and to pay expenses associated with the offering.

• 3.625% Senior Notes - MG Holdings II’s $500 million aggregate principal amount of 3.625% Senior Notes due October 1, 2031, with interest payable each April 1 and October 1, commencing on April 1, 2022, which were issued on October 4, 2021.

The proceeds were used to repurchase $414.0 million of the outstanding 2022 Exchangeable Notes, for general corporate purposes, and to pay expenses associated with the offering.

At December 31, 2021, $500 million aggregate principal amount was outstanding.

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Interest is payable each April 1 and October 1.

The outstanding balance of the 2022 Exchangeable Notes at December 31, 2020 was $517.5 million.

On October 4, 2021 we purchased $414.0 million aggregate principal amount of the outstanding 2022 Exchangeable Notes (as described above).

During 2021, an additional $18.6 million aggregate principal amount of the 2022 Exchangeable Notes were presented for redemption, $3.0 million of which settled in the year ended December 31, 2021.

outstanding balance of the 2022 Exchangeable Notes at December 31, 2021 was $100.5 million and is presented as a current liability.

• 2026 Exchangeable Notes - During the second quarter of 2019, Match Group FinanceCo 2, Inc., a subsidiary of the Company, issued $575.0 million aggregate principal amount of 0.875% Exchangeable Senior Notes due June 15, 2026, which are exchangeable into shares of the Company's common stock.

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Non-GAAP financial measure:

• Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) - is a Non-GAAP financial measure.

See “Principles of Financial Reporting” for the definition of Adjusted EBITDA and a reconciliation of net earnings attributable to Match Group, Inc.

shareholders to operating income and Adjusted EBITDA.

• Adjusted Operating Income - is a Non-GAAP financial measure.

See “Non-GAAP Financial Measures” for the definition of Adjusted Operating Income and a reconciliation of net earnings attributable to Match Group, Inc.

shareholders to operating income and Adjusted Operating Income.

MANAGEMENT OVERVIEW

Match Group, Inc., through its portfolio companies, is a leading provider of dating products available globally.

Our portfolio of brands includes Tinder ® , Match ® , Meetic ® , OkCupid ® , Hinge ® , Pairs™, PlentyOfFish ® , and OurTime ® , as well as a number of other brands, each designed to increase our users’ likelihood of finding a meaningful connection.

Through our portfolio companies and their trusted brands, we provide tailored products to meet the varying preferences of our users.

Our products are available in over 40 languages to our users all over the world.

Match Group, Inc., through its portfolio companies, is a leading provider of digital technologies designed to help people make meaningful connections.

Our global portfolio of brands includes Tinder ® , Match ® , Hinge ® , Meetic ® , OkCupid ® , Pairs™, PlentyOfFish ® , OurTime ® , Azar ® , Hakuna™ Live, and more, each built to increase our users’ likelihood of connecting with others.

Through our trusted brands, we provide tailored services to meet the varying preferences of our users.

Our services are available in over 40 languages to our users all over the world.

As used herein, “Match Group,” the “Company,” “we,” “our,” “us,” and similar terms refer to Match Group, Inc.

and its subsidiaries, unless the context indicates otherwise.

Sources of Revenue

All our products provide the use of certain features for free, and then offer a variety of additional features to Subscribers.

Our revenue is primarily derived directly from users in the form of recurring subscription fees.

All our services provide the use of certain features for free and then offer a variety of additional features through a subscription or, for certain features, on a pay-per-use, or à la carte, basis.

Our revenue is primarily derived directly from users in the form of recurring subscription fees and à la carte purchases.

Subscription revenue is presented net of credits and credit card chargebacks.

Subscribers pay in advance, primarily by using a credit card or through mobile app stores, and, subject to certain conditions identified in our terms and conditions, all purchases are final and nonrefundable.

Fees collected, or contractually due, in advance

for subscriptions are deferred and recognized as revenue using the straight-line method over the term of the applicable subscription period, which primarily ranges from one to six months, and corresponding in-app purchase fees incurred on such transactions, if any, are deferred and expensed over the same period.

We also earn revenue from the purchase of à la carte features and from online advertising.

Payers who purchase subscriptions or à la carte features pay in advance, primarily by using a credit card or through mobile app stores, and, subject to certain conditions identified in our terms and conditions, all purchases are final and nonrefundable.

Fees collected, or contractually due, in advance for subscriptions are deferred and recognized as revenue using the straight-line method over the term of the applicable subscription period, which primarily ranges from one to six months, and corresponding in-app purchase fees incurred on such transactions, if any, are deferred and expensed over the same period.

Revenue from the purchase of à la carte features is recognized based on usage.

Online advertising revenue is recognized every time an ad is displayed.

We also earn revenue from online advertising, which is recognized every time an ad is displayed.

Trends affecting our business

Over the last several years, we have seen significant changes in our business.

Tinder has grown from incubation to the largest contributing brand in our portfolio and in 2020 our other brands also returned to growth in the aggregate.

This in turn has allowed us to invest in or acquire brands such as Hinge and Hawaya and incubate new brands such as Chispa, BLK, and Upward, where we see additional growth opportunities.

Tinder has grown from incubation to the largest contributing brand in our portfolio with our more established brands returning to growth as well.

This has allowed us to invest in or acquire brands such as Hyperconnect and Hinge and incubate new brands such as Chispa™, BLK ® , and Upward ® , where we have seen initial growth and we expect to see additional growth opportunities into the future.

With our evolving portfolio of brands, we have seen a number of significant trends in our business in recent years, including the following:

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All of our brands rely on word-of-mouth, or free, user acquisition to varying degrees.

Word-of-mouth acquisition is typically a function of scale (with larger communities driving greater numbers of referrals), youthfulness (with the viral effect being more pronounced in younger populations due, in part, to a significantly higher concentration of single people in any given social circle and the increased adoption of social media and similar platforms among such populations), and monetization rate (with people generally more likely to talk openly about using dating products that are less heavily monetized).

Word-of-mouth acquisition is typically a function of scale (with larger communities driving greater numbers of referrals), youthfulness (with the viral effect being more pronounced in younger populations due, in part, to a significantly higher concentration of people seeking connections in any given social circle and the increased adoption of social media and similar platforms among such populations), and monetization rate (with people

generally more likely to talk openly about using technologies to meet people that are less heavily monetized).

Additionally, some, but not all, of our brands spend meaningfully on paid marketing.

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Purchases made by our customers through mobile applications, as opposed to desktop or mobile web, continue to increase.

Purchases processed through the in-app payments systems provided by the Apple App Store and Google Play Store are subject to in-app purchase fees, which are generally 30% of the purchase price.

Purchases processed through the in-app payments systems provided by the Apple App Store and Google Play Store are subject to in-app purchase fees, which are generally 30% of the purchase price (Google reduced its in-app purchase fees for subscriptions to 15% as of January 1, 2022).

As a result, the percentage of our revenues paid to Apple and Google continues to be a significant expense.

In 2019, Tinder began offering subscribers an alternative payment method to Google’s in-app payment system similar to the payment alternatives other brands in our portfolio have historically offered to subscribers through mobile apps on Android.

Google has announced that beginning in September 2021, all purchases will be required to be processed through the Google Play Store and subject to in-app purchase fees.

Google has announced that beginning in March 2022, all purchases will be required to be processed through the Google Play Store and subject to in-app purchase fees.

To the extent that app stores fee change, or the mix of our revenue generated through app stores shifts, our results, in particular our profit measures, could be impacted.

Increase in acceptance and growth of dating products globally.

Over the past decade, there has been meaningful growth in dating product usage in North America and Western Europe, and we see the potential for similar growth in the rest of the world in the years ahead.

As more internet-connected singles utilize online dating products and the stigma around dating continues to erode, we believe that there is potential for accelerating growth in the use of dating products globally.

The manner in which Apple and Google operate these services is being reviewed by legislative and regulatory bodies globally.

Notably, the Republic of Korea recently adopted legislation that prohibits Apple and Google from requiring that developers exclusively use Apple and Google to process payments.

In the Netherlands, the Authority for Consumers and Markets found Apple’s requirement that online dating companies must exclusively use Apple’s in-app payment violates both Dutch and European Union law.

Multiple other jurisdictions, including the European Union, United Kingdom, Russia, Japan, and India are investigating, considering regulatory action or considering legislation to restrict or prohibit these practices.

The United States Congress, as well as a number of state legislatures, are also considering legislation that would regulate certain terms of the relationships between developers and Apple and Google and prohibit Apple and Google from requiring in-app payment processing.

Increase in acceptance and growth of technologies to meet people globally.

Over the past decade, there has been meaningful growth in the usage of technologies to meet people in North America and Western Europe, and we see the potential for similar growth in the rest of the world in the years ahead.

As more internet-connected people seeking connections utilize technologies to meet people and the stigma around using such technologies continues to erode, we believe that there is potential for accelerating growth in the use of these technologies globally.

Increased consumption of video and live experiences.

With more recent advances in technology, most notably live video, and with an increasing amount of time spent online, there are new ways that people want to meet and get to know one another that are more reflective of how people engage in-person.

Our brands are evolving to incorporate a variety of new technologies that enable users to interact in a variety of ways including video capabilities and live experiences.

These technologies were already being incorporated at the beginning of the COVID-19 pandemic in 2020 and we are continuing to further incorporate them into our portfolio of brands.

We expect new technologies to continue to drive user engagement and expect other technologies beyond video and live experiences to be tested in our services and incorporated into our apps in the future.

Impacts of the Coronavirus.

When the novel coronavirus (“COVID-19”) first hit Western Europe and then certain major metropolitan centers in the U.S.

in the Spring of 2020, particularly New York City, engagement (messages sent, daily active users, Swipes® on Tinder) increased significantly, but subscribers who purchase a subscription for the first time (“first-time subscribers”) declined at most of our brands as meeting in person was restricted.

Over the summer, as users began to meet outdoors first-time subscribers increased to above pre-

COVID-19 levels.

Since the end of the summer, the resurgence of COVID-19 lockdowns has once again negatively impacted first-time subscriber trends, though not as severely as in the spring of 2020.

in the Spring of 2020, particularly New York City, engagement

(messages sent, daily active users, Swipe ® activity on the Tinder platform) increased significantly, but subscribers who purchase a subscription for the first time (“first-time subscribers”) declined at most of our brands as meeting in person was restricted.

As we entered the summer months of 2020, propensity to pay rebounded across our portfolio, and first-time subscribers climbed amid reduced COVID-19 cases, but then faced new headwinds at the end of 2020, as the second wave of COVID-19 cases and related lockdowns took hold.

In 2021, we saw a new normalization level as vaccines continued to roll out globally, even as several countries experienced a third wave of cases.

We saw strong recovery in the U.S.

and improvement in Europe as well, but important markets for us such as India, South Korea, Brazil, and Japan were further behind on the COVID-19 curve.

The recent Omicron variant surge has caused a modest impact on our business, with rolling global effects as the wave passes through the U.S., Europe, and then, we expect, Asia.

While we have continued to feel the effects of COVID-19 on our business as new waves and variants have emerged, the business has proven to be quite resilient over the last two years.

Other factors affecting the comparability of our results

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Our data-driven approach provides us the flexibility to scale and optimize our advertising spend.

We spend advertising dollars against an expected lifetime value of a Subscriber that is realized over a multi-year period;

We spend advertising dollars against an expected lifetime value of a Payer that is realized over a multi-year period;

and while this advertising spend is intended to be profitable on that basis, it is nearly always negative during the period in which the expense is incurred.

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See “Seasonality” below.

We increased our advertising spend as advertising rates declined during the COVID-19 outbreak.

Historically, our business has experienced seasonal fluctuations in quarterly operating results, particularly with respect to our profit measurements.

This is driven primarily by a higher concentration of advertising spend in the first quarter, when advertising prices tend to be the lowest and demand for our products tends to be highest, and a lower concentration of advertising spend in the fourth quarter, when advertising costs tend to be highest and demand for our products tends to be lowest.

This is driven primarily by a higher concentration of advertising spend in the first quarter, when advertising prices tend to be the lowest and demand for our services tends to be highest, and a lower concentration of advertising spend in the fourth quarter, when advertising costs tend to be highest and demand for our services tends to be lowest.

Seasonality is not consistent across our brands, with brands targeted at older users generally showing more seasonality than brands targeted at younger users.

International markets.

Our products are available across the world.

Our international revenue represented 53% of our total revenue for both of the years ended December 31, 2020 and 2019.

Our services are available across the world.

Our international revenue represented 54% and 53% of our total revenue for years ended December 31, 2021 and 2020, respectively.

We vary our pricing to align with local market conditions and our international businesses typically earn revenue in local currencies.

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2021 Consolidated Results

In 2020, revenue, operating income and Adjusted EBITDA grew 17%, 16% and 15%, respectively.

Revenue growth was primarily due to strong growth at Tinder and additional contributions from Hinge, Pairs, and PlentyOfFish.

The growth in operating income and Adjusted EBITDA was due to the higher revenue and lower selling and marketing expense as a percentage of revenue due to the continued product mix shift toward brands with lower marketing spend as a percentage of revenue.

Operating income and Adjusted EBTIDA were also impacted by an increase in cost of revenue expense primarily due to higher in-app purchase fees as a result of growing revenue sourced through mobile app stores, increased web operation costs, and live video costs.

In 2021, revenue, operating income and Adjusted Operating Income grew 25%, 14% and 19%, respectively, year-over-year.

Revenue growth was primarily due to strong growth at Tinder, Hinge, and PlentyOfFish and the acquisition of Hyperconnect in June 2021.

Operating income and Adjusted Operating Income grew at a slower rate than revenue primarily due to the acquisition of Hyperconnect, higher cost of revenue primarily due to in-app purchase fees, higher general and administrative expense primarily related to higher legal and other professional fees and increased compensation expense as a result of increased headcount, higher product development expenses from increased headcount at Tinder and Hinge, partially offset by lower selling and marketing expense as a percentage of revenue.

Operating income was further impacted by higher amortization of intangibles due to the acquisition of Hyperconnect and higher stock-based compensation expense, primarily due to new grants made during the year and new grants associated with the Hyperconnect acquisition, partially offset by lower expense for award modifications.

Results of Operations for the years ended December 31, 2021, 2020 and 2019

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Direct Revenue:

North America $ 1,185,307 $ 161,146 16% $ 1,024,161 $ 121,683 13% $ 902,478

International 1,159,417 176,404 18% 983,013 208,320 27% 774,693

Americas $ 1,512,057 $ 264,096 21% $ 1,247,961 $ 157,803 14% $ 1,090,158

Europe 821,827 141,699 21% 680,128 95,716 16% 584,412

APAC and Other 588,987 172,352 41% 416,635 84,031 25% 332,604

Total Direct Revenue 2,922,871 578,147 25% 2,344,724 337,550 17% 2,007,174

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Direct Revenue:

North America 50% 50% 52%

International 48% 48% 45%

Americas 51% 52% 53%

Europe 27% 29% 28%

APAC and Other 20% 17% 16%

Total Direct Revenue 98% 98% 98%

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Total Revenue 100% 100% 100%

Average Subscribers:

North America 4,858 304 7% 4,554 393 9% 4,161

International 5,572 843 18% 4,729 1,017 27% 3,712

Americas 8,009 896 13% 7,113 742 12% 6,371

Europe 4,489 461 11% 4,028 430 12% 3,598

APAC and Other 2,987 578 24% 2,409 418 21% 1,991

Total 15,485 1,935 14% 13,550 1,590 13% 11,960

(Change calculated using non-rounded numbers)

North America $ 0.65 7% $ 0.61 4% $ 0.59

International $ 0.56 —% $ 0.56 —% $ 0.56

Americas $ 15.73 $ 1.11 8% $ 14.62 $ 0.36 3% $ 14.26

Europe $ 15.25 $ 1.18 8% $ 14.07 $ 0.53 4% $ 13.54

APAC and Other $ 16.43 $ 2.02 14% $ 14.41 $ 0.49 4% $ 13.92

Total $ 15.73 $ 1.31 9% $ 14.42 $ 0.43 3% $ 13.99

(a) Our ability to eliminate duplicate Payers at a brand level for periods prior to Q2 2020 is impacted by data privacy requirements which require that we anonymize data after 12 months, therefore Payer data for those periods is likely overstated.

Additionally, as Payers is a component of the RPP calculation, RPP is likely commensurately understated for these same periods due to these data privacy limitations.

For the year ended December 31, 2021 compared to the year ended December 31, 2020

International Direct Revenue grew $176.4 million, or 18%, in 2020 versus 2019, driven by 18% growth in Average Subscribers.

North America Direct Revenue grew $161.1 million, or 16%, in 2020 versus 2019, driven by 7% growth in Average Subscribers, a 7% increase in ARPU, and growth of non-subscriber live streaming video revenue at PlentyOfFish.

Growth in International and North America Average Subscribers was primarily driven by Tinder.

Hinge, BLK and Chispa also contributed to North America Average Subscriber growth and Pairs contributed to International Average Subscriber growth.

North America ARPU increased primarily due to increases in à la carte purchases at Tinder and PlentyOfFish and optimized subscription pricing at Hinge.

Indirect Revenue increased $2.5 million primarily due to higher rates per impression.

Americas Direct Revenue grew $264.1 million, or 21%, in 2021 versus 2020, driven by 13% growth in Payers and 8% growth in RPP.

Growth in Payers was primarily driven by Tinder with contributions from Hinge and the Swipe ® Apps (BLK, Chispa, and Upward).

RPP growth was driven by both monetization growth at Hinge and á la carte purchases at Hinge, Tinder and PlentyOfFish.

Europe Direct Revenue grew $141.7 million, or 21%, in 2021 versus 2020, driven by 11% growth in Payers and 8% growth in RPP.

Growth in Payers and RPP was primarily due to Tinder and, to a lesser extent, the acquisition of Hyperconnect.

RPP growth was favorably impacted by the increased strength of the British pound and the Euro against the U.S.

dollar compared to the year ended December 31, 2020.

APAC and Other Direct Revenue grew $172.4 million, or 41%, in 2021 versus 2020, driven by 24% growth in Payers and 14% growth in RPP.

Payer growth was primarily driven by Tinder and the acquisition of Hyperconnect.

RPP growth was primarily due to the acquisition of Hyperconnect.

Indirect Revenue increased $13.9 million primarily due to higher rates per impression and robust direct ad sales at Tinder.

For the year ended December 31, 2020 compared to the year ended December 31, 2019

International Direct Revenue grew $208.3 million, or 27%, in 2019 versus 2018, driven by 27% growth in Average Subscribers.

North America Direct Revenue grew $121.7 million, or 13%, in 2019 versus 2018, driven by 9% growth in Average Subscribers, and a 4% increase in ARPU.

Growth in International and North America Average Subscribers was primarily driven by Tinder.

Hinge and Pairs also contributed to subscriber growth in North America and International, respectively.

North America ARPU increased primarily due to increases in ARPU at Tinder as Subscribers purchased premium subscriptions, such as Tinder Gold, as well as additional à la carte features.

International ARPU was unfavorably impacted by the strength of the U.S.

dollar relative to the Euro, British pound (“GBP”), and certain other currencies.

Indirect Revenue decreased $8.6 million primarily due to lower impressions and a lower price per impression received from an advertising network provider.

Americas Direct Revenue grew $157.8 million, or 14%, in 2020 versus 2019, driven by 12% growth in Payers.

Growth in Payers was primarily driven by Tinder with contributions from Hinge and the Swipe Apps (BLK, Chispa, and Upward).

Europe Direct Revenue grew $95.7 million, or 16%, in 2020 versus 2019, driven by 12% growth in Payers and 4% growth in RPP.

Growth in Payers was primarily due to Tinder, and to a lesser extent, contributions from Meetic and Hinge.

RPP growth was primarily due to Tinder and was favorably impacted by the increased strength of the Euro compared to the U.S.

dollar between the two periods.

APAC and Other Direct Revenue grew $84.0 million, or 25%, in 2020 versus 2019, driven by 21% growth in Payers and 4% growth in RPP.

Payer growth was primarily driven by Tinder and Pairs with additional contributions from OkCupid.

RPP growth was driven by Pairs.

Indirect Revenue increased $2.5 million primarily due to higher rates per impression.

Cost of revenue (exclusive of depreciation)

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For the year ended December 31, 2021 compared to the year ended December 31, 2020

Cost of revenue increased due to an increase in in-app purchase fees of $50.0 million, as revenue continues to be increasingly sourced through mobile app stores;

Cost of revenue increased in part due to the acquisition of Hyperconnect in the second quarter of 2021.

Excluding the increase from the Hyperconnect acquisition, cost of revenue increased 23% primarily due to an increase in in-app purchase fees of $109.4 million, as revenue continues to be increasingly sourced through mobile app stores;

an increase of $15.8 million in partner related costs associated with live video streaming;

an increase in hosting fees of $12.6 million;

an increase of $17.9 million in partner related costs associated with our live video streaming;

and an increase in compensation expense of $11.5 million related to increased headcount and other operating costs in customer care.

and an increase in compensation expense of $11.9 million related to increased costs in customer care.

Total in-app purchase fees for 2021, including Hyperconnect, were $552.6 million.

For the year ended December 31, 2020 compared to the year ended December 31, 2019

C ost of revenue increased due to an increase in in-app purchase fees of $80.1 million, as revenue continues to be increasingly sourced through mobile app stores;

Cost of revenue increased due to an increase in in-app purchase fees of $50.0 million, as revenue continued to be increasingly sourced through mobile app stores;

an increase in hosting fees of $24.0 million;

an increase of $17.9 million in partner related costs associated with live video streaming;

and an increase in compensation expense of $11.5 million related to increased headcount and other operating costs in customer care.

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For the year ended December 31, 2021 compared to the year ended December 31, 2020

Selling and marketing expense increased primarily due to higher marketing spend at multiple brands, and an increase in compensation expense of $5.7 million.

Selling and marketing expense continued to decline as a percentage of revenue as we continue to generate revenue growth from brands with relatively lower marketing expense.

Selling and marketing expense increased due to the acquisition of Hyperconnect in the second quarter of 2021, higher marketing spend at multiple brands, and an increase in compensation expense of $9.6 million related to increased headcount.

Selling and marketing expense continued to decline as a percentage of revenue excluding Hyperconnect as we continue to generate revenue growth from brands with relatively lower marketing expense.

For the year ended December 31, 2020 compared to the year ended December 31, 2019

Selling and marketing expense increased primarily due to increases in spending at Tinder, Hinge, and Pairs, partially offset by decreases at Meetic, Match, and PlentyOfFish.

Selling and marketing expense declined as a percentage of revenue as we continue to generate revenue growth from brands with relatively lower marketing expense.

Selling and marketing expense increased primarily due to higher marketing spend at multiple brands, and an increase in compensation expense of $5.7 million.

Selling and marketing expense continued to decline as a percentage of revenue as we continued to generate revenue growth from brands with relatively lower marketing expense.

General and administrative expense

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For the year ended December 31, 2021 compared to the year ended December 31, 2020

General and administrative expense increased in part due to the post-acquisition expenses of Hyperconnect.

Excluding Hyperconnect, general and administrative expense increased 26% primarily due to an increase of $29.0 million in legal and other professional fees;

an increase in compensation expense of $20.5 million primarily related to an increase in headcount and an increase in stock-based compensation expense associated with new awards granted in the current year, partially offset by lower modification expense in 2021;

$7.5 million of professional fees incurred to acquire Hyperconnect;

an increase of $8.3 million for non-income taxes, primarily digital services taxes;

and an increase in software license fees of $8.6 million.

For the year ended December 31, 2020 compared to the year ended December 31, 2019

General and administrative expense increased primarily due to an increase in compensation of $39.3 million primarily related to an increase in headcount and an increase in stock-based compensation expense resulting from a modification charge in 2020;

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and an increase of $6.4 million in legal expenses.

For the year ended December 31, 2019 compared to the year ended December 31, 2018

General and administrative expense increased primarily due to an increase of $38.1 million in legal fees;

an increase in compensation of $19.0 million primarily related to stock-based compensation expense due to new equity awards made since the prior year period, modification charges during 2019, and an increase in headcount;

and an increase of $4.7 million for non-income taxes that includes the recently enacted French Digital Services Tax, which was made effective retroactively to January 1, 2019.

Product development expense

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For the year ended December 31, 2021 compared to the year ended December 31, 2020

Product development expense increased primarily as a result of an increase of $18.7 million in compensation primarily due to increased headcount at Tinder.

Product development expense increased in part due to the acquisition of Hyperconnect.

Excluding Hyperconnect, product development expense increased 29% primarily due to an increase in compensation expense of $45.4 million primarily related to increased headcount at Tinder and Hinge, and an increase in stock-based compensation associated with new awards granted in the current year.

For the year ended December 31, 2020 compared to the year ended December 31, 2019

Product development expense increased primarily as a result of an increase of $18.6 million in compensation, including an increase of $10.3 million in stock-based compensation expense primarily due to the vesting of certain awards for which the market condition was met, and increased headcount at Tinder.

Product development expense increased primarily as a result of an increase of $18.7 million in compensation primarily due to increased headcount at Tinder.

Years Ended December 31,

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For the year ended December 31, 2021 compared to the year ended December 31, 2020

Depreciation was flat compared to the prior year period.

For the year ended December 31, 2020 compared to the year ended December 31, 2019

Depreciation increased primarily due to an increase in internally developed software being placed in service.

Amortization of intangibles

Years Ended December 31,

2021 $ Change % Change 2020 $ Change % Change 2019

(Dollars in thousands)

Amortization of intangibles $28,559 $21,034 280% $7,525 $(1,202) (14)% $8,727

Percentage of revenue 1% —% —%

For the year ended December 31, 2021 compared to the year ended December 31, 2020

Depreciation decreased primarily due to certain internally developed software becoming fully depreciated, partially offset by increased depreciation related to leasehold improvements.

Operating Income and Adjusted EBITDA

Amortization of intangibles increased primarily due to an increase in definite-lived intangibles related to the acquisition of Hyperconnect in the second quarter of 2021, partially offset by an impairment charge recorded in 2020.

For the year ended December 31, 2020 compared to the year ended December 31, 2019

Amortization of intangibles decreased primarily due to the decrease in impairment charges in 2020 as compared to impairment charges recorded in 2019.

Operating Income and Adjusted Operating Income

Years Ended December 31,

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Percentage of revenue 29% 31% 32%

Adjusted EBITDA $896,779 $118,519 15% $778,260 $126,295 19% $651,965

Adjusted Operating Income $1,068,456 $171,677 19% $896,779 $118,519 15% $778,260

Percentage of revenue 36% 38% 38%

For a reconciliation of net earnings attributable to Match Group, Inc.

shareholders to operating income and Adjusted EBITDA, see “Principles of Financial Reporting.”

shareholders to operating income and Adjusted Operating Income, see “Non-GAAP Financial Measures.”

For the year ended December 31, 2021 compared to the year ended December 31, 2020

Operating income and Adjusted EBITDA increased 16% to $100.3 million and 15% to $118.5 million, respectively, primarily as a result of the increase in revenue of $340.0 million driven by growth at multiple brands and lower selling and marketing expense as a percentage of revenue, partially offset by an increase in cost of revenue due to higher in-app purchase fees, as revenue is increasingly sourced through mobile app stores, increased web operation costs, and live video costs.

Operating income and Adjusted Operating Income increased 14% or $106.0 million and 19% or $171.7 million, respectively, primarily driven by the increase in revenue of $592.0 million which was driven by growth at Tinder, Hinge, and the acquisition of Hyperconnect and lower selling and marketing expense as a percentage of revenue, partially offset by an increase in cost of revenue due to higher in-app fees, as revenue continues to shift to mobile app stores, and an increase in general and administrative expense primarily due to professional fees and compensation expense.

At December 31, 2021, there was $273.9 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards, which is expected to be recognized over a weighted average period of approximately 2.4 years.

For the year ended December 31, 2020 compared to the year ended December 31, 2019

Operating income and Adjusted EBITDA increased 17% to $96.0 million and 19% to $126.3 million, respectively, primarily as a result of the increase in revenue of $321.4 million and lower selling and marketing expense as a percentage of revenue due to the ongoing product mix shift toward brands with lower marketing spend as a percentage of revenue, partially offset by an increase in cost of revenue due to higher in-app purchase fees and an increase in legal fees.

Operating income was also impacted by higher stock-based compensation expense as a percentage of revenue and an increase in amortization due to the impairment of the Match brand in the UK, resulting in decreased growth compared to Adjusted EBITDA.

Operating income and Adjusted Operating Income increased 16% or $100.3 million and 15% or $118.5 million, respectively, primarily as a result of the increase in revenue of $340.0 million driven by growth at multiple brands and lower selling and marketing expense as a percentage of revenue, partially offset by an increase in cost of revenue due to higher in-app purchase fees, as revenue was increasingly sourced through mobile app stores, increased web hosting fees, and live video costs.

Interest expense

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For the year ended December 31, 2021 compared to the year ended December 31, 2020

Interest expense was flat compared to the prior year despite an increase in the total average principal amount of long-term debt outstanding due to lower interest rates on newer issuances of senior notes and a lower LIBOR rate on the Term Loan.

For the year ended December 31, 2020 compared to the year ended December 31, 2019

Interest expense increased primarily due to the issuance of the 4.125% Senior Notes on February 11, 2020 and the issuance of the 4.625% Senior Notes on May 19, 2020.

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Partially offsetting these increases were decreases due to the redemption of the 6.375% Senior Notes during 2020 and a lower LIBOR rate on the Term Loan.

For the year ended December 31, 2019 compared to the year ended December 31, 2018

Interest expense increased primarily due to the issuance of the 5.625% Senior Notes in February 2019.

Additionally, the interest rate on the Term Loan, which is based on LIBOR, was higher in 2019.

Other income (expense), net

Other (expense) income, net

Years Ended December 31,

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(Dollars in thousands)

Other income (expense), net $15,861 $17,887 NM $(2,026) $(9,536) NM $7,510

Other (expense) income, net $(465,038) $(480,899) NM $15,861 $17,887 NM $(2,026)

________________________

NM = not meaningful

Other expense, net, in 2021 includes a $441.0 million loss related to the settlement of the former Tinder employee litigation, a $14.6 million loss related to the changes in fair value of derivatives created as we repurchased a portion of our outstanding 2022 Exchangeable Notes, a $5.2 million inducement expense arising from the repurchased 2022 Exchangeable Notes, and $1.8 million in net foreign currency losses, partially offset by $2.4 million of fair market value gains on the net settlement of certain note hedges and warrants relating to the repurchased 2022 Exchangeable Notes.

Other income, net, in 2020 includes a legal settlement of $35.0 million and interest income of $2.7 million, partially offset by a loss on redemption of bonds of $16.5 million, expense of $3.4 million related to mark-to-market adjustments pertaining to liability classified equity instruments, and $0.6 million in net foreign currency losses in the period.

Other expense, net, in 2019 includes a $4.0 million impairment of an equity investment, expense of $1.7 million related to a mark-to-market adjustment pertaining to a liability classified equity instrument, and $0.9 million in net foreign currency losses in the period, partially offset by interest income of $4.4 million.

Other income, net in 2018 includes $5.3 million in net foreign currency exchange gains due primarily to a strengthening of the U.S.

dollar relative to the British Pound in the period and $4.9 million of interest income, partially offset by $2.1 million related to impairments of certain equity investments and $0.7 million related to a mark-to-market adjustment pertaining to a subsidiary denominated equity instrument.

Income tax provision

Income tax (benefit) provision

Years Ended December 31,

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(Dollars in thousands)

Income tax provision

$32,874 $24,649 300% $8,225 $(3,082) (27)% $11,307

Income tax (benefit) provision

$(19,897) $(63,170) NM $43,273 $28,193 187% $15,080

Effective income tax rate

For discussion of income taxes, see “Note 3—Income Taxes” to the consolidated financial statements included in “Item 8—Consolidated Financial Statements and Supplementary Data.”

For the years ended December 31, 2020, 2019, and 2018, the Company recorded an income tax provision of $32.9 million, $8.2 million, and $11.3 million, respectively, representing an effective tax rate of 6%, 2%, and 2%, respectively, which is lower than the U.S.

For the year ended December 31, 2021, the Company recorded an income tax benefit of $19.9 million, despite pre-tax income, primarily due to excess tax benefits generated by the (i) exercise and vesting of stock-based awards and (ii) research credits.

This benefit was partially offset by an increase in the valuation allowance for foreign losses and U.S.

foreign tax credits.

For the years ended December 31, 2020 and 2019, the Company recorded an income tax provision of $43.3 million, and $15.1 million, respectively, representing an effective tax rate of 7%, and 3%, respectively, which is lower than the U.S.

statutory rate of 21% due primarily to excess tax benefits generated by (i) the exercise and vesting of stock-based awards and (ii) research credits.

In 2020, these benefits were partially offset by an increase in the valuation allowance for foreign tax credits.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted to respond to economic challenges due to COVID-19.

The CARES Act provided Match Group accelerated depreciation deductions and a relaxation of limitations on interest expense deductions, both of which impact the timing of the realizability of our federal and state net operating loss deferred tax assets.

The CARES Act did not have a material impact on our income tax provision for the year ended December 31, 2020, or our ability to recover our deferred tax assets.

In 2020, these benefits were partially offset by an increase in the valuation allowance for U.S.

foreign tax credits.

Related party transactions

For discussion of related party transactions, see “Note 15—Related Party Transactions” to the consolidated financial statements included in “Item 8—Consolidated Financial Statements and Supplementary Data.”

PRINCIPLES OF FINANCIAL REPORTING

Match Group reports Adjusted EBITDA and Revenue excluding foreign exchange effects, both of which are supplemental measures to U.S.

NON-GAAP FINANCIAL MEASURES

Match Group reports Adjusted Operating Income and Revenue excluding foreign exchange effects, both of which are supplemental measures to U.S.

generally accepted accounting principles (“GAAP”).

Adjusted EBITDA is among the primary metrics by which we evaluate the performance of our business, on which our internal budget is based, and by which management is compensated.

Adjusted Operating Income is among the primary metrics by which we evaluate the performance of our business, on which our internal budget is based, and by which management is compensated.

Revenue excluding foreign exchange effects provides a comparable framework for assessing how our business performed without the effect of exchange rate differences when compared to prior periods.

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We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures, which we discuss below.

Adjusted EBITDA

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is defined as operating income excluding:

Adjusted Operating Income

Adjusted Operating Income is defined as operating income excluding:

(1) stock-based compensation expense;

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We believe this measure is useful for analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors.

The above items are excluded from our Adjusted EBITDA measure because they are non-cash in nature.

Adjusted EBITDA has certain limitations because it excludes the impact of these expenses.

Non-Cash Expenses That Are Excluded From Adjusted EBITDA

The above items are excluded from our Adjusted Operating Income measure because they are non-cash in nature.

Adjusted Operating Income has certain limitations because it excludes the impact of these expenses.

Non-Cash Expenses That Are Excluded From Adjusted Operating Income

Stock-based compensation expense consists principally of expense associated with the grants of stock options, restricted stock units (“RSUs”), performance-based RSUs, and market-based awards.

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We believe that intangible assets represent costs incurred by the acquired company to build value prior to acquisition and the related amortization and impairment charges of intangible assets or goodwill, if applicable, are not ongoing costs of doing business.

Gains and losses recognized on changes in the fair value of contingent consideration arrangements are accounting adjustments to report contingent consideration liabilities at fair value.

These adjustments can be highly variable and are excluded from our assessment of performance because they are considered non-operational in nature and, therefore, are not indicative of current or future performance or the ongoing cost of doing business.

The following table reconciles net earnings attributable to Match Group, Inc.

shareholders to operating income and Adjusted EBITDA:

shareholders to operating income and Adjusted Operating Income:

Years Ended December 31,

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shareholders $ 277,723 $ 162,329 $ 453,838

Net earnings attributable to noncontrolling interests 59,280 112,689 130,786

Loss (earnings) from discontinued operations, net of tax 366,070 (49,187) (306,643)

Income tax provision 32,874 8,225 11,307

Other (income) expense, net (15,861) 2,026 (7,510)

Net (loss) earnings attributable to noncontrolling interests (1,169) 59,280 112,689

(Earnings) loss from discontinued operations, net of tax (509) 366,070 (49,187)

Income tax (benefit) provision (19,897) 43,273 15,080

Other expense (income), net 465,038 (15,861) 2,026

Interest expense

6 unchanged sentences

28,559 7,525 8,727

Acquisition-related contingent consideration fair value adjustments

Adjusted EBITDA $ 896,779 $ 778,260 $ 651,965

Adjusted Operating Income $ 1,068,456 $ 896,779 $ 778,260

Effects of Changes in Foreign Exchange Rates on Revenue

The impact of foreign exchange rates on the Company, due to its global reach, may be an important factor in understanding period over period comparisons if movement in exchange rates is significant.

Due to our global reach, the impact of foreign exchange rates on the Company may be an important factor in understanding period over period comparisons if movement in exchange rates is significant.

Since our results are reported in U.S.

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The percentage change in revenue excluding foreign exchange effects is calculated by determining the change in current period revenue over prior period revenue where current period revenue is translated using prior period exchange rates.

The following tables presents the impact of foreign exchange on total revenue, ARPU, and International ARPU for the year ended December 31, 2020 compared to the year ended December 31, 2019 and the year ended December 31, 2019 compared to the year ended December 31, 2018:

Years Ended December 31,

2020 $ Change % Change 2019

(Dollars in thousands, except ARPU)

The following tables present the impact of foreign exchange effects on total revenue and Direct Revenue by geographic region, and RPP on a total basis and by geographic region, for the year ended December 31, 2021 compared to the year ended December 31, 2020 and the year ended December 31, 2020 compared to the year ended December 31, 2019:

Years ended December 31, Years ended December 31,

2021 $ Change % Change 2020 2020 $ Change % Change 2019

(Dollars in thousands)

Revenue, as reported $ 2,983,277 $ 592,008 25% $ 2,391,269 $ 2,391,269 $ 340,011 17% $ 2,051,258

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Revenue excluding foreign exchange effects $ 2,948,086 $ 556,817 23% $ 2,391,269 $ 2,397,681 $ 346,423 17% $ 2,051,258

(Percentage change calculated using non-rounded numbers)

ARPU, as reported $ 0.60 3% $ 0.58

Americas Direct Revenue, as reported $ 1,512,057 $ 264,096 21% $ 1,247,961 $ 1,247,961 $ 157,803 14% $ 1,090,158

Foreign exchange effects (1,471) 14,619

ARPU, excluding foreign exchange effects $ 0.60 3% $ 0.58

International ARPU, as reported $ 0.56 0% $ 0.56

Americas Direct Revenue, excluding foreign exchange effects

$ 1,510,586 $ 262,625 21% $ 1,247,961 $ 1,262,580 $ 172,422 16% $ 1,090,158

Europe Direct Revenue, as reported $ 821,827 $ 141,699 21% $ 680,128 $ 680,128 $ 95,716 16% $ 584,412

Foreign exchange effects (33,894) (7,551)

International ARPU, excluding foreign exchange effects $ 0.56 0% $ 0.56

Years Ended December 31,

2019 $ Change % Change 2018

(Dollars in thousands, except ARPU)

Revenue, as reported $ 2,051,258 $ 321,408 19% $ 1,729,850

Europe Direct Revenue, excluding foreign exchange effects $ 787,933 $ 107,805 16% $ 680,128 $ 672,577 $ 88,165 15% $ 584,412

APAC and Other Direct Revenue, as reported $ 588,987 $ 172,352 41% $ 416,635 $ 416,635 $ 84,031 25% $ 332,604

Foreign exchange effects 917 (828)

Revenue excluding foreign exchange effects $ 2,098,717 $ 368,867 21% $ 1,729,850

(Percentage change calculated using non-rounded numbers)

ARPU, as reported $ 0.58 2% $ 0.57

APAC and Other Direct Revenue, excluding foreign exchange effects $ 589,904 $ 173,269 42% $ 416,635 $ 415,807 $ 83,203 25% $ 332,604

Years ended December 31, Years ended December 31,

2021 $ Change % Change 2020 2020 $ Change % Change 2019

RPP, as reported $ 15.73 $ 1.31 9% $ 14.42 $ 14.42 $ 0.43 3% $ 13.99

Foreign exchange effects (0.19) 0.04

ARPU, excluding foreign exchange effects $ 0.60 4% $ 0.57

International ARPU, as reported $ 0.56 —% $ 0.56

RPP, excluding foreign exchange effects $ 15.54 $ 1.12 8% $ 14.42 $ 14.46 $ 0.47 3% $ 13.99

Americas RPP, as reported $ 15.73 $ 1.11 8% $ 14.62 $ 14.62 $ 0.36 3% $ 14.26

Foreign exchange effects (0.01) 0.17

International ARPU, excluding foreign exchange effects $ 0.59 5% $ 0.56

Americas RPP, excluding foreign exchange effects $ 15.72 $ 1.10 8% $ 14.62 $ 14.79 $ 0.53 3% $ 14.26

Europe RPP, as reported $ 15.25 1.18 8% $ 14.07 $ 14.07 0.53 4% $ 13.54

Foreign exchange effects (0.35) (0.09)

Europe RPP, excluding foreign exchange effects $ 14.90 $ 0.83 6% $ 14.07 $ 13.98 $ 0.44 4% $ 13.54

APAC and Other RPP, as reported $ 16.43 $ 2.02 14% $ 14.41 $ 14.41 $ 0.49 4% $ 13.92

Foreign exchange effects 0.03 (0.03)

APAC and Other RPP, excluding foreign exchange effects $ 16.46 $ 2.05 14% $ 14.41 $ 14.38 $ 0.46 4% $ 13.92

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

11 unchanged sentences

Term Loan due February 13, 2027 425,000 425,000

6.375% Senior Notes — 400,000

5.00% Senior Notes due December 15, 2027

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4.125% Senior Notes due August 1, 2030 500,000 500,000

3.625% Senior Notes due October 1, 2031 500,000 —

2022 Exchangeable Notes 100,500 517,500

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Total long-term debt 3,975,500 3,892,500

Current maturities of long-term debt 100,500 —

unamortized original issue discount and original issue premium, net

312,891 357,887

unamortized debt issuance costs 40,364 45,541

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Cash Flow Information

In summary, the Company’s cash flows are as follows:

In summary, the Company’s cash flows from continuing operations are as follows:

Years ended December 31,

5 unchanged sentences

(939,825) (3,922,131) (41,730)

Net cash provided by (used in) financing activities attributable to continuing operations

Net cash provided by financing activities attributable to continuing operations

111,106 1,787,846 654,024

Net cash provided by operating activities attributable to continuing operations in 2021 includes adjustments to earnings consisting primarily of $146.8 million of stock-based compensation expense;

$44.7 million of original issue discount accretion on the Exchangeable Senior Notes;

$41.4 million of depreciation;

$28.6 million of amortization of intangibles;

other adjustments of $26.7 million, which includes a loss on bond

redemption of $16.5 million;

and other adjustments of $27.7 million,

which includes amortization of deferred financing costs of $9.0 million.

Partially offsetting these adjustments was deferred income tax benefit of $58.0 million.

The increase in cash from changes in working capital primarily consists of an increase in accounts payable and accrued expenses and other current liabilities of $458.8 million due mainly to the timing of payments, with the former Tinder employee litigation settlement, which is expected to be paid in 2022, being the primary component;

and an increase in deferred revenue of $26.3 million, due mainly to growth in subscription sales.

These increases in cash were partially offset by an increase in accounts receivable of $34.0 million primarily related to an increase in revenue.

Net cash used in investing activities attributable to continuing operations in 2021 consists primarily of cash used to acquire Hyperconnect, net of cash acquired, of $859.9 million, and capital expenditures of $80.0 million that are primarily related to internal development of software and computer hardware to support our services.

Net cash provided by financing activities attributable to continuing operations in 2021 is primarily due to proceeds from the settlement of certain note hedges of $1.1 billion, partially offset by an $882.2 million outflow related to the settlement of certain outstanding warrants, in each case associated with the settlement of a portion of the 2022 Exchangeable Notes;

proceeds of $500.0 million from the issuance of the 3.625% Senior Notes;

and $58.4 million of proceeds from the issuance of common stock pursuant to stock-based awards.

These increases in cash were partially offset by payment of $630.7 million to repurchase a portion of the outstanding 2022 Exchangeable Notes and payment of $15.7 million for withholding taxes paid on behalf of employees for net settled equity awards.

Net cash provided by operating activities attributable to continuing operations in 2020 includes adjustments to earnings consisting primarily of $102.3 million of stock-based compensation expense, $41.3 million of depreciation, $7.5 million of amortization of intangibles;

other adjustments of $27.3 million, which includes a loss on bond redemption of $16.5 million;

and deferred income tax of $15.4 million.

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These increases in cash were partially offset by a decrease related to an increase in other assets of $33.2 million primarily related to an increase in prepaid hosting services and an increase in accounts receivable of $24.2 million primarily related to an increase in revenue.

Net cash used in investing activities attributable to continuing operations in 2020 consists primarily of the $3.9 billion of net cash distributed to IAC related to the Separation, which was partially funded by $1.4 billion of net proceeds from the stock issuance in connection with the Separation as noted below, and capital expenditures of $42.4 million that are primarily related to internal development of software and computer hardware to support our products and services.

Net cash used in investing activities attributable to continuing operations in 2020 consists primarily of $3.9 billion of net cash distributed to IAC related to the Separation, which was partially funded by $1.4 billion of net proceeds from the stock issuance in connection with the Separation as noted below, and capital expenditures of $42.4 million that are primarily related to internal development of software and computer hardware to support our services.

Net cash provided by financing activities attributable to continuing operations in 2020 is primarily due to proceeds of $1.4 billion from the stock offering in connection with the Separation, which were subsequently transferred to IAC as noted above, proceeds of $1.0 billion from the issuance of the 4.125% and 4.625% Senior Notes, partially offset by the redemption of the $400.0 million 6.375% Senior Notes, payments of $212.0 million for withholding taxes paid on behalf of employees for net settled equity awards of both Former Match Group and Match Group, and purchases of treasury stock of Former Match Group of $132.9 million.

Net cash provided by operating activities attributable to continuing operations in 2019 includes adjustments to earnings consisting primarily of $89.7 million of stock-based compensation expense, $34.4 million of depreciation, $30.4 million of original issue discount accretion on the Exchangeable Senior Notes, and $8.7 million of amortization of intangibles.

Partially offsetting these adjustments was deferred income tax of $12.8 million primarily related to net operating loss created by settlement of stock-based awards.

The decrease in cash from changes in working capital primarily consists of an increase in other assets of $24.2 million primarily related to an increase in prepaid hosting services, an increase in accounts receivable of $17.9 million primarily related to an increase in revenue, and a decrease from income taxes payable and receivable of $4.2 million due primarily to the timing of tax payments.

These decreases in cash were partially offset by an increase in accounts payable and accrued expenses and other current liabilities of $33.7 million due mainly to the timing of payments, including interest payments;

and an increase in deferred revenue of $9.5 million, due mainly to growth in subscription sales.

Net cash used in investing activities attributable to continuing operations in 2019 consists primarily of capital expenditures of $39.0 million that are primarily related to internal development of software and computer hardware to support our products and services.

Net cash provided by financing activities attributable to continuing operations in 2019 is primarily due to $1.2 billion from the issuance of the 2026 and 2030 Exchangeable Notes;

proceeds of $350.0 million from the issuance of the 5.625% Senior Notes and proceeds of $40.0 million from borrowings under the Credit Facility.

These decreases in cash were partially offset by an increase in accounts payable and accrued expenses and other current liabilities of $33.7 million due

mainly to the timing of payments, including interest payments, and an increase in deferred revenue of $9.5 million, due mainly to growth in subscription sales.

Net cash provided by financing activities attributable to continuing operations in 2019 is primarily due to $1.2 billion from the issuance of the 2026 and 2030 Exchangeable Notes, proceeds of $350.0 million from the issuance of the 5.625% Senior Notes, and proceeds of $40.0 million from borrowings under the Credit Facility.

Partially offsetting these proceeds were cash payments of $300.0 million for the repayment of borrowings under the Credit Facility, purchases of treasury stock of $216.4 million, $203.2 million for withholding taxes paid on behalf of employees for net settled equity awards, and $136.9 million used to pay the net premium on the 2026 and 2030 Exchangeable Notes hedge and warrant transactions.

Net cash provided by operating activities attributable to continuing operations in 2018 includes adjustments to earnings consisting primarily of $66.0 million of stock-based compensation expense, $34.8 million of depreciation, and $1.3 million of amortization of intangibles.

Partially offsetting these adjustments was deferred income tax of $23.0 million primarily related to an increase in tax credit carryforwards, partially offset by the utilization of net operating losses.

The increase in cash from changes in working capital primarily consists of an increase in accounts payable and accrued expenses and other current liabilities of $21.4 million due to the timing of payments;

a decrease in accounts receivable of $17.3 million primarily related to an accelerated cash receipt from a mobile app store provider;

an increase in deferred revenue of $13.1 million, due mainly to growth

in subscription sales;

and an increase from income taxes payable and receivable of $26.9 million due primarily to the timing of tax payments.

These increases in cash were partially offset by an increase in other assets of $14.6 million primarily related to an increase in capitalized mobile app fees.

Net cash used in investing activities attributable to continuing operations in 2018 consists primarily of capital expenditures of $31.4 million that are primarily related to computer hardware and internal development of software to support our products and services and purchases of investments of $3.8 million, partially offset by net cash acquired in a business combination of $1.1 million.

Net cash used in financing activities attributable to continuing operations in 2018 is primarily due to withholding taxes paid on behalf of employees for net settled stock awards of $207.7 million, purchases of treasury stock of $133.5 million, a cash dividend of $105.1 million, purchases of non-controlling interests of $10.0 million, and debt issuance costs of $1.7 million.

Partially offsetting these payments were proceeds of $260.0 million from a draw on the Credit Facility.

Liquidity and Capital Resources

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At December 31, 2021, $749.6 million was available under the Credit Facility that expires on February 13, 2025.

The Company has various obligations related to long-term debt instruments and operating leases.

For additional information on long-term debt, including a maturity schedule and interest rates, see “Note 7—Long-term Debt, net” to the consolidated financial statements included in “Item 8—Consolidated Financial Statements and Supplementary Data.” For additional information on the operating leases, including a schedule of obligations by year, see “Note 13—Leases” to the consolidated financial statements included in “Item 8—Consolidated Financial Statements and Supplementary Data.” The Company believes it has sufficient cash flows from operations to satisfy these future obligations.

On December 1, 2021, we entered into an agreement to settle the pending, threatened, and potential claims at issue in Rad, et al.

IAC/InterActiveCorp, et al.

and related arbitrations for $441 million, which is expected to be paid in 2022 utilizing cash on hand.

The Company anticipates that it will need to make capital and other expenditures in connection with the development and expansion of its operations.

The Company expects that 2021 cash capital expenditures will be between $80 million and $90 million, an increase from 2020 cash capital expenditures primarily related to leasehold improvements in our new leased New York office space, and building improvements at our company owned buildings in Los Angeles.

In February 2021, the Company entered into a definitive agreement to acquire Hyperconnect, Inc.

(“Hyperconnect”), a leading social discovery and video technology company based in Seoul, South Korea.

The acquisition is valued at approximately $1.725 billion, subject to customary adjustments for cash, debt-like items, and net working capital at the closing of the acquisition.

The Company has the option to pay up to 50% of the consideration in common stock of the Company, with the remaining balance of the consideration paid in cash.

The Company expects to fund the cash portion of the consideration with cash on hand and its existing revolving credit facility.

The Company may also opt to use additional third-party financing.

The acquisition is anticipated to close in the second quarter of 2021, subject to customary closing conditions and receipt of certain regulatory approvals.

The Company expects that 2022 cash capital expenditures will be between $65 million and $75 million, a decrease from 2021 cash capital expenditures as several leasehold and building improvements were completed in 2021.

We have entered into various purchase commitments, primarily consisting of web hosting services.

Our obligations under these various purchase commitments are $56.0 million in 2022 and between $7.0 million and $12.5 million per year from 2023 through 2026.

The Company does not have any off-balance sheet arrangements, other than those described above, at December 31, 2021.

At December 31, 2021, all of the Company’s international cash can be repatriated without significant tax consequences.

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Additional financing may not be available on terms favorable to the Company or at all.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

Payments Due by Period

Contractual Obligations (a)

Years More Than

5 Years Total

(In thousands)

Long-term debt (b)

$ 115,581 $ 744,102 $ 222,097 $ 3,714,837 $ 4,796,617

Operating leases (c)

14,806 22,813 18,172 62,458 118,249

Purchase obligation (d)

54,000 9,000 12,000 — 75,000

Total contractual obligations $ 184,387 $ 775,915 $ 252,269 $ 3,777,295 $ 4,989,866

_______________________________________________________________________________

(a) The Company has excluded $41.8 million in unrecognized tax benefits and related interest from the table above as we are unable to make a reasonably reliable estimate of the period in which these liabilities might be paid.

For additional information on income taxes, see “Note 3—Income Taxes” to the consolidated financial statements included in “Item 8—Consolidated Financial Statements and Supplementary Data.”

(b) Represents contractual amounts due including interest on both fixed and variable rate instruments.

Long-term debt at December 31, 2020 consists of the 5.00%, 5.625%, 4.125%, and 4.625% Senior Notes of $450 million, $350 million, $500 million, and $500 million, respectively, which bear interest at fixed rates;

the 2022, 2026, and 2030 Exchangeable Notes of $518 million, $575 million, and $575 million, respectively, which bear interest at fixed rates;

and the Term Loan balance of $425 million, which bears interest at a variable rate.

The Term Loan bears interest at LIBOR plus 1.75%, or 1.96%, at December 31, 2020.

The amount of interest ultimately paid on the Term Loan may differ based on changes in interest rates and outstanding balances.

For additional information on long-term debt, see “Note 7—Long-term Debt, net” to the consolidated financial statements included in “Item 8—Consolidated Financial Statements and Supplementary Data.”

(c) The Company leases office space, data center facilities and equipment used in connection with its operations under various operating leases, many of which contain escalation clauses.

The Company is also committed to pay a portion of the related operating expenses under certain lease agreements.

These operating expenses are not included in the table above.

For additional information on operating leases, see “Note 13—Leases” to the consolidated financial statements included in “Item 8—Consolidated Financial Statements and Supplementary Data.”

(d) The purchase obligations consist primarily of a web hosting commitment.

We also had $0.2 million of letters of credit and surety bonds outstanding at December 31, 2020 that could potentially require performance by the Company in the event of demands by third parties or other contingent events.

Off-Balance Sheet Arrangements

Other than the items described above, the Company did not have any off-balance sheet arrangements at December 31, 2020.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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What follows is a discussion of some of our more significant accounting policies and estimates.

Business Combinations and Contingent Consideration Arrangements

Acquisitions have been, and will continue to be, an important part of the Company’s growth strategy.

Business Combinations

Acquisitions are an important part of our growth strategy.

The purchase price of each acquisition is attributed to the assets acquired and liabilities assumed based on their fair values at the date of acquisition, including identifiable intangible assets that either arise from a contractual or legal right or are separable from goodwill.

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The excess purchase price over the net tangible and identifiable intangible assets is recorded as goodwill and is assigned to the reporting unit that is expected to benefit from the combination as of the acquisition date.

In connection with certain business combinations in the past, the Company has entered into contingent consideration arrangements that are determined to be part of the purchase price.

Each of these arrangements is initially recorded at its fair value at the time of the acquisition and reflected at current fair value for each subsequent reporting period thereafter until settled.

The contingent consideration arrangements are generally based upon earnings performance and/or operating metrics.

The Company determines the fair value of the contingent consideration arrangements by using probability-weighted analyses to determine the amounts of the gross liability, and, if the arrangement is long-term in nature, applying a discount rate that appropriately captures the risk associated with the obligation to determine the net amount reflected in the consolidated financial statements.

Significant changes in forecasted earnings or operating metrics would result in a significantly higher or lower fair value measurement.

The changes in the remeasured fair value of the contingent consideration arrangements during each reporting period, including the accretion of the discount, if applicable, are recognized in “General and administrative expense” in the accompanying consolidated statement of operations.

Recoverability of Goodwill and Indefinite-Lived Intangible Assets

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The 2021 and 2020 annual assessments did not identify any impairments.

As a result of the Separation, the Company had a negative carrying value for the Company’s annual goodwill test at October 1, 2020.

As a result of the Separation in 2020, the Company had a negative carrying value for the Company’s annual goodwill test at both October 1, 2021 and 2020.

Additionally, an impairment test of goodwill was not necessary because there were no factors identified that would indicate an impairment loss.

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While the Company has the option to qualitatively assess whether it is more likely than not that the fair values of its indefinite-lived intangible assets are less than their carrying values, the Company’s policy is to determine the fair value of each of its indefinite-lived intangible assets annually as of October 1, in part, because the level of effort required to perform the quantitative and qualitative assessments is essentially equivalent.

The Company determines the fair value of its indefinite-lived intangible assets using an avoided royalty DCF valuation analysis.

Significant judgments inherent in this analysis include the selection of appropriate royalty and discount rates and estimating the amount and timing of expected future cash flows.

Due to the recent acquisition of Hyperconnect and the process to allocate the purchase price as of the purchase date, the intangible assets of Hyperconnect were considered qualitatively as of October 1, 2021.

For assets in which a quantitative assessment was performed, the Company determines the fair value of its indefinite-lived intangible assets using an avoided royalty DCF valuation analysis.

Significant judgments inherent in this analysis include the selection of appropriate royalty and discount rates and estimating the amount and timing of expected future

The discount rates used in the DCF analyses are intended to reflect the risks inherent in the expected future cash flows generated by the respective intangible assets.

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Assumptions used in the avoided royalty DCF analyses, including the discount rate and royalty rate, are assessed annually based on the actual and projected cash flows related to the asset, as well as macroeconomic and industry specific factors.

The discount rates used in the Company’s annual indefinite-lived impairment assessment ranged from 10% to 23% in 2020 and 11% to 26% in 2019, and the royalty rates used ranged from 5% to 8% in 2020 and 3% to 8% in 2019.

The discount rates used in the Company’s annual indefinite-lived impairment assessment ranged from 10% to 16% in 2021 and 10% to 23% in 2020, and the royalty rates used ranged from 5% to 8% in both 2021 and 2020.

If the carrying value of an indefinite-lived intangible asset exceeds its estimated fair value, an impairment equal to the excess is recorded.

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During the year ended December 31, 2019, the Company recognized an impairment charge on the Match brand in the UK of $6.6 million.

At December 31, 2019, the aggregate indefinite-lived intangible asset balance for which the estimate of fair value at that time was less than 110% of their carrying values was approximately $92.3 million.

At December 31, 2020, no indefinite-lived intangible asset balance had an estimated fair value less than 110% of carrying value.

At December 31, 2021 and 2020, no indefinite-lived intangible asset balance had an estimated fair value less than 110% of carrying value.

Recoverability and Estimated Useful Lives of Long-Lived Assets

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A valuation allowance is provided on deferred tax assets if it is determined that it is more likely than not that the deferred tax asset will not be realized.

We consider all available evidence, both positive and negative,

including historical levels of income, expectations and risks associated with estimates of future taxable income, and tax planning strategies in assessing the need for a valuation allowance.

We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income, and tax planning strategies in assessing the need for a valuation allowance.

We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained based on the technical merits of the position.

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Although we believe that we have adequately reserved for our uncertain tax positions, the final outcome of these matters may vary significantly from our estimates.

To the extent that the final outcome of these matters is different from the amounts recorded, such differences will affect the income tax provision in the period in which such determination is made, and could have a material impact on our financial condition and operating results.

As of December 31, 2020, $158.1 million in cash and cash equivalents was held by our foreign subsidiaries.

Generally, our ability to distribute cash from these subsidiaries is limited to that subsidiary’s distributable reserves and after considering other corporate legal restrictions.

As a result of the Tax Cuts and Jobs Act enacted in the U.S.

in 2017, earnings in our foreign jurisdictions are generally available for distribution to the U.S.

without significant tax consequences.

To the extent that the final outcome of these matters is different from the amounts recorded, such differences will affect the income tax provision in

the period in which such determination is made, and could have a material impact on our financial condition and operating results.

Stock-Based Compensation

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis