What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-02-23 compared with 2023-02-24 · 177 added, 175 removed, 392 unchanged (47% of the section changed)

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• 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).

• Europe includes continental Europe, the British Isles, Iceland, Greenland, and Russia (ceased operations in June 2023), but excludes Turkey (which is included in APAC and Other).

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

• Match Group Asia (“MG Asia”) consists of the brands primarily focused on Asia and the Middle East including Pairs™ and Azar®.

• Evergreen & Emerging (“E&E”) consists primarily of the brands Match®, Meetic®, OkCupid®, Plenty Of Fish®, and BLK®.

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

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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.

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

Advertising expenditures includes online marketing, including fees paid to search engines and social media sites, offline marketing, and production of advertising content.

• 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, fees for professional services (including transaction-related costs for acquisitions), and facilities costs.

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

At December 31, 2022, there was $0.4 million in outstanding letters of credit and $749.6 million of availability under the Credit Facility.

At December 31, 2023, there was $0.4 million outstanding in letters of credit and $749.6 million of availability under the Credit Facility.

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

At December 31, 2022 and December 31, 2021, the Term Loan bore interest at LIBOR plus 1.75% and the then

applicable rates were 6.49% and 1.91%, respectively.

At December 31, 2022, $425 million was outstanding.

At December 31, 2022, the Term Loan bore interest at LIBOR plus 1.75% and the then applicable rate was 6.49%.

Effective June 30, 2023, we entered into an amendment to replace the LIBOR rate with a term secured overnight financing rate plus an applicable adjustment (“Adjusted Term SOFR”) for future repricing events under the Term Loan.

As of December 31, 2023, $425 million was outstanding under the Term Loan, which bore interest at 7.27% based on the Adjusted Term SOFR plus 1.75%.

• 5.00% Senior Notes - MG Holdings II’s 5.00% Senior Notes due December 15, 2027, with interest payable each June 15 and December 15, which were issued on December 4, 2017.

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At December 31, 2023, $500 million aggregate principal amount was outstanding.

• 2022 Exchangeable Notes - During the third quarter of 2017, Match Group FinanceCo, Inc., a subsidiary of the Company, issued $517.5 million aggregate principal amount of 0.875% Exchangeable Senior Notes due October 1, 2022, which were exchangeable into shares of the Company's common stock.

Interest was payable each April 1 and October 1.

In October 2022, the then outstanding 2022 Exchangeable Notes were settled at maturity with cash on hand.

• 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.

• 2022 Exchangeable Notes - The 0.875% Exchangeable Senior Notes issued by Match Group FinanceCo, Inc., a subsidiary of the Company, which were settled prior to December 31, 2022 and are no longer outstanding.

• 2026 Exchangeable Notes - The 0.875% Exchangeable Senior Notes due June 15, 2026 issued by Match Group FinanceCo 2, Inc., a subsidiary of the Company, which are exchangeable into shares of the Company's common stock.

Interest is payable each June 15 and December 15.

The outstanding balance of the 2026 Exchangeable Notes at December 31, 2022 was $575 million.

• 2030 Exchangeable Notes - During the second quarter of 2019, Match Group FinanceCo 3, Inc., a subsidiary of the Company, issued $575.0 million aggregate principal amount of 2.00% Exchangeable Senior Notes due January 15, 2030, which are exchangeable into shares of the Company's common stock.

At December 31, 2023, $575 million aggregate principal amount was outstanding.

• 2030 Exchangeable Notes - The 2.00% Exchangeable Senior Notes due January 15, 2030 issued by Match Group FinanceCo 3, Inc., a subsidiary of the Company, which are exchangeable into shares of the Company's common stock.

Interest is payable each January 15 and July 15.

The outstanding balance of the 2030 Exchangeable Notes at December 31, 2022 was $575 million.

At December 31, 2023, $575 million aggregate principal amount was outstanding.

Non-GAAP financial measure:

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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 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.”

MANAGEMENT OVERVIEW

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 ® , Hinge ® , Match ® , Meetic ® , OkCupid ® , Pairs™, Plenty Of Fish ® , Azar ® , Hakuna®, and more, each built to increase our users’ likelihood of connecting with others.

Our global portfolio of brands includes Tinder ® , Hinge ® , Match ® , Meetic ® , OkCupid ® , Pairs™, Plenty Of Fish ® , Azar ® , BLK®, 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.

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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.

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 week 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.

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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 Hinge has grown meaningfully since acquisition.

We have acquired brands such as Azar, Hakuna, and The League and incubated new brands such as Chispa™, BLK ® , Stir, 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 other significant trends in our business in recent years, including the following:

Lower cost users.

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 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.

Accordingly, the average amount we spend to acquire a user differs significantly across brands based in large part on each brand’s mix of paid and free acquisition channels.

As our mix has shifted toward younger users, our mix of acquisition channels has shifted toward lower cost channels, driving a decline over the past several years in the average amount we spend to acquire a new user across our portfolio.

As a percentage of revenue, our costs of acquiring users have declined.

Changing paid acquisition dynamics.

Even as we increase our acquisition of lower cost users, paid acquisition of users remains an important driver of our business.

The channels through which we market our brands are always evolving, but we are currently in a period of rapid change as TV and video consumption patterns evolve and internet consumption occurs regularly on mobile devices.

As we adapt our paid marketing activities to maximize user engagement with our brands, we may increase our use of paid advertising at brands where we traditionally relied on word-of-mouth engagement to leverage these shifts in media consumption patterns and fuel international growth.

Other brands in our portfolio may reduce paid marketing activities to reflect the change in audience engagement.

Each brand in our portfolio has the goal of using technology to help people make meaningful connections.

While the goal is the same for each brand, the means to achieve that goal can be differentiated by how a specific brand targets their primary demographic.

With users of our apps often utilizing multiple apps, our brands can often have overlap on targeted users.

The overall trends affecting all brands within our portfolio, include the following:

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

Over the past decade, there has been meaningful growth in the use 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, we believe there remains potential for accelerating growth in the use of these technologies in certain global markets where adoption lags more developed countries.

As a result, new services, entrants to the market, and business models are likely to continue to emerge, sometimes at the expense of our existing brands, by harnessing a new technology, such as generative artificial intelligence (“AI”) or a new or existing distribution channel, creating a new or different approach to connecting people, or some other means.

In-App Purchase Fees.

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 (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 and growing expense.

Purchases made by our customers through mobile applications, as opposed to desktop or mobile web, continue to increase, and are required in most cases to be processed through the in-app payment systems provided by Apple and Google.

Where we are required to use Apple’s or Google’s payment systems, we pay Apple and Google, as applicable, a meaningful share (generally 30% or, for subscriptions purchased on Android devices, 15%) of the revenue we receive from these transactions.

Where payments on Android devices are processed through other payment systems, we are also required to pay Google a meaningful share of our revenue.

However we have entered into a partnership with Google that will provide value exchange across our broad relationship with them, which we expect to help offset the additional costs that our brands expect to incur over the three years starting in 2024 associated with implementing Google’s User Choice Billing system, which allows application developers to offer an additional billing system alongside Google Play’s billing system.

Additionally, while Apple was recently forced to change its rules in the U.S.

marketplace on anti-steering to allow for payment processing outside its payment systems, Apple has stated that it will still charge up to 27% for those transactions.

We do not expect to realize any meaningful decrease in app store fees in the U.S.

market as a result of this change.

In the EU, the Digital Markets Act is set to go into effect in March 2024.

submitted its plan for compliance, which would lower the 30% service fee in the EU to 17% for our applications, but would also add a payment processing fee of 3%, as well as a 0.50 Euro fee per download (including updates) per year.

Apple’s plan is subject to approval by EU regulators.

For additional information, see “Item 1 Business—Dependencies on services provided by others—App Stores.”

On March 31, 2022, Google began enforcing its new in-app payments policy, which requires all developers to process all in-app purchases of subscriptions and features entirely through Google’s in-app payment system.

If an application developer failed to comply by June 1, 2022, Google threatened to remove that developer’s applications from the Google Play Store and not allow it to make updates to its applications.

In May 2022, several of our subsidiaries filed a complaint in federal district court in California against Google alleging that Google’s dominance and anti-competitive conduct in the Android app distribution and in-app payment markets violate federal antitrust laws, particularly with respect to the requirement that we use Google’s in-app payment system exclusively.

For additional information, see “Item 3 Legal Proceedings—Google Litigation.” While Google has already enforced its new payments policy in most jurisdictions, it has not done so with respect to our applications due to a stipulation reached by the parties in the ongoing Google litigation.

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.

As a result, new services, entrants to the market, and business models are likely to continue to emerge, sometimes at the expense of our existing brands, through harnessing a new technology or a new or existing distribution channel, creating a new or different approach to connecting people, or some other means.

Implementing new technologies that enhance our user experience.

We expect new technologies to continue to drive user engagement.

As new technologies develop, we evaluate if those technologies can be incorporated into our apps and will enhance the user experience.

We believe that implementation of recent advances in technology, such as live video and live experiences, have enhanced our brands’ ability to attract and retain users.

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 the U.S.

in 2020, user engagement 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 2020 progressed, 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.

In 2021 and continuing into 2022, we saw a new normalization level as vaccines rolled out globally, even as several countries experienced additional waves of cases.

The Omicron variant surge caused a modest impact on our business, with rolling global effects as the wave passed through various parts of the globe.

Despite these past effects, the business has proven to be quite resilient over the last three years and we do not currently expect significant effects from COVID-19 in the near future.

We expect new technologies, including those utilizing generative AI, to continue to drive user engagement.

As new technologies develop we evaluate whether those technologies can be incorporated into our apps to enhance the user experience.

We are planning to further integrate AI technologies into our services, which integrations may become important to our operations over time.

The rapid evolution of AI will require the dedication of significant resources to develop, test, and maintain these technologies.

We expect other technologies to evolve and be tested in our services and incorporated into our apps in the future.

In addition to the trends affecting our overall portfolio, some of our individual brands are affected by certain other trends, including the following:

When Tinder was first developed, the smart phone provided a unique way of offering connections that traditional desktop-based services did not offer.

Tinder was able to capitalize on the rise in the use of smart phones and with its younger audience was able to achieve considerable scale through word-of-mouth and viral moments on social media without the need to supplement with significant brand marketing.

As the availability of services catering to human connections has increased, we have begun to supplement Tinder’s viral growth with brand marketing to build out Tinder’s brand narrative and grow the size of its user base, which has resulted in an increase in selling and marketing expense at Tinder.

Recently, Tinder has experienced a decline in user growth, with plans to return to growth with product initiatives that focus on the female experience and younger users.

Hinge has developed a strong user base in English speaking markets and began expanding into European markets in the latter half of 2022.

Its strong user growth in English speaking and other European markets has helped to contribute to a high level of revenue growth, which we expect will continue into the coming years.

As Hinge continues to expand its footprint globally, we intend to continue to focus on adding new features to its service to continue to drive user satisfaction for its target audience of intentioned daters, and to drive additional opportunities for monetization.

In the near term, we expect to continue to make investments in the business to support this growth, including investments in product development as well as brand marketing.

The focus of the MG Asia brands has primarily been to serve various Asian and Middle Eastern markets.

Plans to grow revenue include further expansion by certain brands into the European and U.S.

In Japan, our Pairs brand recently won approval to begin advertising on television.

While the results of that advertising are still preliminary, early signs have been encouraging.

We expect the advertising to increase Pairs’ brand recognition while we work to grow users through various product initiatives and by partnering with local government to improve declining marriage rates in the country.

Our Azar app, which provides one to one video chat, has a strong presence in Asia and the Middle East and is expanding in Europe and to the U.S.

Our Hakuna app provides live streaming services primarily in Korea and Japan.

Evergreen & Emerging.

Our collections of brands within E&E include well-known pioneers in online relationships (which we refer to as Evergreen brands) and newer bets which target specific demographics (which we refer to as Emerging brands).

Revenues from the Evergreen brands have declined in recent years, while Emerging brands are in the early stages of growth and in many cases are relying on marketing to increase the size of their user base.

In 2023, we began a multi-year process of consolidating technology platforms across various Evergreen brands to enable faster feature releases and to reduce the cost to further develop and maintain those platforms.

Other trends or factors affecting the comparability of our results

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Our advertising spend, which is included in our selling and marketing expense, has consistently been one of our larger operating expenses.

How we deploy our advertising spend varies among brands, with the majority of our advertising spend taking place online, including search engines, social media sites, streaming services and influencers.

Additionally, some brands utilize television and out-of-home marketing campaigns, such as on outdoor billboards.

How we deploy our advertising spend varies among brands, with the majority of our advertising spend taking place online, including social media sites, streaming services, search engines, and influencers.

Additionally, some brands utilize out-of-home marketing campaigns, such as on television and outdoor billboards.

For established brands, we seek to optimize for total return on advertising spend by frequently analyzing and adjusting spend to focus on marketing channels and markets that generate returns above our thresholds.

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

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 Payer that is realized over a multi-year period.

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For newer brands that are gaining scale, or existing brands that are expanding into new geographies, we may make incremental advertising investments to establish the brand before optimizing monetization of the brand.

In general, our more established brands spend

a higher proportion of their revenue on advertising while our newer brands spend a lower proportion and tend to rely more on word of mouth and other viral marketing.

In general, our more established brands spend a higher proportion of their revenue on advertising while our newer brands spend a lower proportion and tend to rely more on word of mouth and other viral marketing.

Our advertising spend may be incurred unevenly throughout the year.

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Our services are available across the world.

Our international revenue represented 55% and 54% of our total revenue for years ended December 31, 2022 and 2021, respectively.

Our international revenue represented 54% and 55% of our total revenue for the years ended December 31, 2023 and 2022, 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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2023 Consolidated Results

In 2022, revenue grew 7%, operating income decreased 40%, and Adjusted Operating Income grew 6% year-over-year.

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

Operating income and Adjusted Operating Income benefited from lower selling and marketing expense and general and administrative expense as a percentage of revenue, both excluding stock-based compensation expense, partially offset by an increase in cost of revenue due to higher-in app fees, and an increase in product development expense primarily due to increase in compensation expense.

Operating income was further impacted by impairments of intangible assets and increased stock-based compensation expense primarily due to new grants made during the year.

In 2023, total revenue grew 6%, operating income increased 78%, and Adjusted Operating Income grew 11% year-over-year.

Revenue growth was primarily due to strong growth at Tinder and Hinge.

Operating income and Adjusted Operating Income were positively affected by the increase in revenue and decreases in general and administrative expenses primarily related to decreases in legal and other professional fees.

Those positive effects were partially offset by increases in selling and marketing spend at Tinder and Hinge and increases in product development expense primarily due to an increase in compensation expense.

Operating income further benefited from decreases in impairment and amortization expense compared to 2022, during which there was an impairment of certain intangible assets.

That benefit was partially offset by increased stock-based compensation expense primarily due to new stock-based awards granted during the year.

Results of Operations for the years ended December 31, 2023, 2022 and 2021

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Hinge 396,485 112,817 40% 283,668 87,130 44% 196,538

Other brands 1,052,086 (24,490) (2)% 1,076,576 177,397 20% 899,179

MG Asia 302,591 (19,123) (6)% 321,714 53,072 20% 268,642

Evergreen & Emerging 691,426 (38,946) (5)% 730,372 (77,562) (10)% 807,934

Total Direct Revenue $ 3,308,131 $ 177,910 6% $ 3,130,221 $ 207,350 7% $ 2,922,871

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Total $ 17.67 $ 1.70 11% $ 15.97 $ 0.24 2% $ 15.73

______________________

(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, 2023 compared to the year ended December 31, 2022

Americas Direct Revenue grew $117.0 million, or 8%, in 2022 versus 2021, driven by 6% growth in RPP and 2% growth in Payers.

RPP growth was driven by both higher average prices paid for subscriptions and increased average á la carte purchases per Payer at Tinder and Hinge.

Growth in Payers was primarily driven by Tinder and Hinge, partially offset by decreases at Plenty Of Fish and Match.

Europe Direct Revenue grew $27.1 million, or 3%, in 2022 versus 2021, driven by 2% growth in Payers and 1% growth in RPP.

Growth in Payers and RPP was primarily due to Tinder with contributions from Hinge and the acquisition of Hyperconnect in June 2021, partially offset by decreases at Meetic.

RPP growth was unfavorably impacted by the strength of the U.S.

dollar against the Euro and British Pound compared to 2021.

APAC and Other Direct Revenue grew $63.3 million, or 11%, in 2022 versus 2021, driven by 19% growth in Payers, partially offset by a 7% decrease in RPP.

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

RPP was unfavorably impacted by the strength of the U.S.

Americas Direct Revenue grew $115.5 million, or 7%, in 2023 versus 2022, driven by 15% growth in RPP, partially offset by a 7% decrease in Payers.

RPP growth was driven by both higher average prices paid for subscriptions at Tinder due to pricing optimizations and the introduction of weekly subscription offerings.

Additionally, we saw increased average prices paid by subscribers at Hinge and increased average á la carte purchases per Payer at Tinder.

The decrease in Payers was primarily driven by decreases at Tinder due to pricing optimizations, as well as decreases in Payers at Match and OkCupid, partially offset by increased Payers at Hinge.

Europe Direct Revenue grew $84.5 million, or 10%, in 2023 versus 2022, driven by 13% growth in RPP, partially offset by a 3% decrease in Payers.

RPP growth was driven by higher average prices paid for subscriptions at Tinder and Hinge.

Additionally, we saw increased average á la carte purchases per Payer at Tinder.

RPP growth was favorably impacted by the weakening of the U.S.

dollar against the Euro compared to 2022.

The decrease in Payers was primarily due to decreases at Tinder and Meetic, partially offset by increases at Hinge.

APAC and Other Direct Revenue decreased $22.1 million, or 3%, in 2023 versus 2022, primarily due to a 3% decrease in RPP, which was unfavorably impacted by the strength of the U.S.

dollar compared to the Japanese Yen and Turkish Lira.

Indirect Revenue decreased $1.8 million primarily due to lower ad impressions, partially offset by a higher rate per impression compared to the prior year.

Tinder Direct Revenue grew 7% in 2023 versus 2022, driven by growth in RPP due to pricing optimizations in the U.S.

market and new weekly subscription offerings, partially offset by a decrease in Payers partially attributed to the pricing optimizations.

Hinge Direct Revenue grew 40% in 2023 versus 2022, driven by 27% growth in Payers and 10% growth in RPP.

The Payer growth at Hinge was across geographies, but in particular in the Americas and Europe, which was a focus of international expansion in 2023 for Hinge.

RPP increased as a result of pricing optimizations in the U.S.

MG Asia Direct Revenue declined 6% in 2023 versus 2022, driven by declines at Hakuna and Pairs, partially offset by growth at Azar.

E&E Direct Revenue declined 5% in 2023 versus 2022, as we continued to moderate marketing spend at our Evergreen brands.

The decline at our Evergreen brands was partially offset by growth at our Emerging brands.

Indirect Revenue decreased $2.2 million primarily due to a lower rate per ad impression compared to the prior year, partially offset by higher ad impressions.

Cost of revenue (exclusive of depreciation)

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For the year ended December 31, 2023 compared to the year ended December 31, 2022

Excluding the Hyperconnect acquisition, cost of revenue increased 9% primarily due to an increase in in-app purchase fees of $47.7 million, which included a $21.2 million escrow amount related to litigation regarding the fees paid to the Google Play Store, and an increase in hosting fees of $26.4 million.

The additional 5% increase is due to the acquisition of Hyperconnect in June 2021.

For the year ended December 31, 2022, total in-app purchase fees were $622.5 million.

Cost of revenue decreased 1% primarily due to a decrease in live video costs of $22.6 million, a decrease in employee compensation of $6.4 million, and net decreases in other expenses of $8.3 million, all of which were partially offset by an increase in in-app purchase fees of $24.2 million and an increase in hosting fees of $7.1 million.

In-app fees were $646.7 million in 2023.

Selling and marketing expense

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For the year ended December 31, 2023 compared to the year ended December 31, 2022

Selling and marketing expense decreased as a result of reduced marketing spend at most brands across the portfolio.

Selling and marketing expense increased primarily due to higher marketing spend at Tinder, Hinge, and certain Emerging brands, partially offset by lower marketing spend at a number of our other brands.

General and administrative expense

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For the year ended December 31, 2023 compared to the year ended December 31, 2022

General and administrative expense increased primarily due to an increase in compensation expense of $35.2 million primarily related to (i) an increase in stock-based compensation associated with new awards granted in 2022 and higher modification expense on existing awards, and (ii) an increase in headcount.

Additional increases were due to an increase in travel expenses of $12.9 million as in person activities began to return to pre-pandemic levels.

These increases were partially offset by a decrease in legal and other professional fees, partially due to higher expense in 2021 related to the former Tinder employee litigation and fees related to the Hyperconnect acquisition in June 2021.

General and administrative expense declined primarily due to a decrease in legal and other professional fees of $25.5 million and a decrease in stock-based compensation expense of $7.6 million due to forfeitures of equity awards and modification of certain stock-based awards in the prior year, partially offset by an increase in employee compensation of $15.7 million.

Product development expense

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For the year ended December 31, 2023 compared to the year ended December 31, 2022

Product development expense increased primarily due to an increase in compensation expense of $91.8 million in part due to increased headcount at Tinder and Hinge and an increase in stock-based compensation associated with new awards granted in 2022.

Product development expense increased primarily due to an increase in compensation expense of $52.0 million, including stock-based compensation, due to increased headcount at both Hinge and Tinder.

Years Ended December 31,

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For the year ended December 31, 2023 compared to the year ended December 31, 2022

Depreciation increased primarily due to an increase in building and leasehold improvements and furniture and other equipment.

Impairment and amortization of intangibles

Depreciation was higher in 2023 as compared to 2022 primarily due to an increase in internally developed software placed in service.

Impairments and amortization of intangibles

Years Ended December 31,

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(Dollars in thousands)

Impairment of intangibles $ 319,534 $ 319,534 NM $ — $ — —% $ —

Amortization of intangibles 46,723 18,164 64% 28,559 21,034 280% 7,525

Impairment and amortization of intangibles $ 366,257 $ 337,698 NM $ 28,559 $ 21,034 280% $ 7,525

Impairments and amortization of intangibles $ 47,731 $ (318,526) (87)% $ 366,257 $ 337,698 NM $ 28,559

Percentage of revenue 1% 11% 1%

For the year ended December 31, 2023 compared to the year ended December 31, 2022

Impairment of intangibles in 2022 was primarily composed of an impairment of $270.1 million related to Hyperconnect intangible assets that stemmed from a decline in projections related to a lower outlook for the business since the acquisition in June 2021, including foreign currency impacts in certain of Hyperconnect’s key markets, and the use of increased discount rates in the valuation of the Azar and Hakuna brands as a result of increased risk-free rates and overall market volatility in general.

There were also additional impairments in 2022 of $49.4 million related to the Meetic and Match brands in Europe and certain affinity brands in the U.S.

Amortization of intangibles increased primarily due to an increase in definite-lived intangibles related to the acquisition of Hyperconnect in June 2021.

Impairments and amortization of intangibles decreased primarily due to impairments of both indefinite-lived intangible assets and definite-lived intangible assets in the prior period.

Operating Income and Adjusted Operating Income

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For the year ended December 31, 2023 compared to the year ended December 31, 2022

Operating income decreased 40% or $336.7 million, and Adjusted Operating Income increased 6% or $60.3 million.

Operating income and Adjusted Operated Income each benefited from the increase in revenue of $205.6 million which was driven by growth at Tinder and Hinge as well as the acquisition of Hyperconnect, and lower selling and marketing expense and general and administrative expense as a percentage of revenue, both excluding stock-based compensation expense.

That benefit was partially offset by an increase in cost of revenue due to higher in-app purchase fees, including a $21.2 million escrow amount related to litigation with Google in 2022, and an increase in product development expense primarily due to increased compensation expense.

Operating income further declined due to the impairments of intangible assets of $319.5 million and increased stock-based compensation expense.

At December 31, 2022, there was $369.3 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 2.5 years.

Operating income increased 78% or $401.9 million, and Adjusted Operating Income increased 11% or $129.8 million.

Operating income and Adjusted Operated Income each benefited from the increase in revenue of $175.7 million which was driven by growth at Tinder and Hinge, and lower general and administrative expense primarily related to decreases in legal and other professional fees.

That benefit was partially offset by increases in selling and marketing spend and an increase in product development expense primarily due to increased compensation expense.

Operating income further benefited from decreases in impairments of intangible assets of $316.1 million, partially offset by increased stock-based compensation expense primarily due to new stock-based awards granted during the year.

At December 31, 2023, there was $368.9 million of unrecognized compensation cost, net of estimated forfeitures, related to all stock-based awards, which is expected to be recognized over a weighted average period of approximately 2.0 years.

Interest expense

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For the year ended December 31, 2023 compared to the year ended December 31, 2022

Interest expense increased primarily due to the issuance of the 3.625% Senior Notes on October 4, 2021 and a higher LIBOR rate on the Term Loan in 2022;

partially offset by decreases from the settlement and maturity of the remaining 2022 Exchangeable Notes.

Interest expense increased primarily due to a higher interest rate on the Term Loan in the current period.

Other income (expense), net

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(Dollars in thousands)

Other income (expense), net $8,033 $473,071 NM $(465,038) $(480,899) NM $15,861

Other income (expense), net $19,772 $11,739 146% $8,033 $473,071 NM $(465,038)

________________________

NM = not meaningful

Other income, net, in 2023 includes interest income of $26.8 million, partially offset by $7.9 million in net foreign currency losses.

Other income, net, in 2022 includes interest income of $4.4 million, gains of $3.5 million related to finalization of a legal settlement, and gains of $2.7 million related to mark-to-market adjustments pertaining to liability classified equity instruments.

These items were partially offset by $2.0 million in net foreign currency losses.

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.

These items were 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.

Income tax provision (benefit)

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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 year ended December 31, 2022, the Company recorded an income tax provision from continuing operations of $15.4 million at an effective tax rate of 4%, which is lower than the statutory rate primarily due to (i) a reversal of valuation allowances in certain foreign jurisdictions as we expect to be able to use the deferred tax assets in these jurisdictions in the coming years, (ii) favorable outcomes of tax audits and (iii) a lower tax rate on U.S.

For the year ended December 31, 2023, the Company recorded an income tax provision from continuing operations of $125.3 million at an effective tax rate of 16%, which is lower than the statutory rate primarily due to (i) a release of a valuation allowance associated with U.S.

foreign tax credits that we now expect to utilize, (ii) a lower tax rate on U.S.

income derived from foreign sources, and (iii) the generation of federal and state research credits.

These benefits were partially offset by state income taxes and nondeductible stock-based compensation.

For the year ended December 31, 2022, the Company recorded an income tax provision from continuing operations of $15.4 million at an effective tax rate of 4%, which is lower than the statutory rate primarily due to (i) excess tax benefits generated by the exercise and vesting of stock-based awards, (ii) a release of a valuation allowance on certain foreign deferred tax assets that we expect to utilize, (iii) favorable outcomes of tax audits and (iv) a lower tax rate on U.S.

income derived from foreign sources.

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 (i) excess tax benefits generated by the 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.

In August 2022, the Inflation Reduction Act (“IRA”) was enacted.

Among other things, the IRA imposes a 15% corporate alternative minimum tax (“AMT”) for tax years beginning after December 31, 2022, and levies a nondeductible 1% excise tax on net stock repurchases after December 31, 2022.

Currently, we do not qualify for the AMT.

The impact of the new excise tax will vary depending on the amount and frequency of any future share repurchases, as well as any permitted reductions or exceptions to the amount subject to the excise tax.

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.”

The benefits were partially offset by higher state income taxes due to higher taxable income in the U.S.

A number of countries are actively drafting legislation to implement the OECD international tax framework, including the Pillar II minimum tax regime with effect from January 1, 2024 or later.

The Company is continuing to monitor these developments and any potential impact on its results of operations.

NON-GAAP FINANCIAL MEASURES

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shareholders $ 651,539 $ 361,946 $ 277,723

Net (loss) earnings attributable to noncontrolling interests (2,027) (1,169) 59,280

Net loss attributable to noncontrolling interests (67) (2,027) (1,169)

Loss (earnings) from discontinued operations, net of tax — 2,211 (509)

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Depreciation 61,807 43,594 41,402

Impairment and amortization of intangibles

Impairments and amortization of intangibles

47,731 366,257 28,559

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APAC and Other Direct Revenue, excluding foreign exchange effects $ 682,439 $ 30,173 5% $ 652,266

Tinder Direct Revenue, as reported $ 1,917,629 $ 123,162 7% $ 1,794,467

Foreign exchange effects 22,160

Tinder Direct Revenue, excluding foreign exchange effects $ 1,939,789 $ 145,322 8% $ 1,794,467

Hinge Direct Revenue, as reported $ 396,485 $ 112,817 40% $ 283,668

Foreign exchange effects 832

Hinge Direct Revenue, excluding foreign exchange effects $ 397,317 $ 113,649 40% $ 283,668

MG Asia Direct Revenue, as reported $ 302,591 $ (19,123) (6)% $ 321,714

Foreign exchange effects 24,753

MG Asia Direct Revenue, excluding foreign exchange effects $ 327,344 $ 5,630 2% $ 321,714

E&E Direct Revenue, as reported $ 691,426 $ (38,946) (5)% $ 730,372

Foreign exchange effects 614

E&E Direct Revenue, excluding foreign exchange effects $ 692,040 $ (38,332) (5)% $ 730,372

Years ended December 31,

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

2022 Exchangeable Notes — 100,500

2026 Exchangeable Notes 575,000 575,000

2030 Exchangeable Notes 575,000 575,000

2026 Exchangeable Notes due June 15, 2026 575,000 575,000

2030 Exchangeable Notes due January 15, 2030 575,000 575,000

Total long-term debt 3,875,000 3,875,000

Current maturities of long-term debt — 100,500

Unamortized original issue discount

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(534,068) (689,173) 111,106

Net cash provided by operating activities attributable to continuing operations in 2023 includes adjustments to earnings consisting primarily of $232.1 million of stock-based compensation expense;

$61.8 million of depreciation;

$47.7 million of impairments and amortization of intangibles;

deferred income taxes of

$26.6 million;

and other adjustments of $9.9 million, which includes amortization of deferred financing costs of $6.5 million.

The decrease in cash from changes in working capital primarily consists of an increase in accounts receivable of $107.4 million primarily related to the timing of receipts and an increase in revenue from app stores, and a decrease in deferred revenue of $41.2 million as weekly subscriptions have increased.

These decreases in cash were partially offset by an increase to working capital from other assets of $25.1 million.

Net cash used in investing activities attributable to continuing operations in 2023 consists primarily of capital expenditures of $67.4 million that are primarily related to internal development of software and computer hardware to support our services.

Net cash used in financing activities attributable to continuing operations in 2023 is primarily due to purchases of treasury stock of $546.2 million and payments of $5.9 million of withholding taxes paid on behalf of employees for net-settled stock-based awards.

These uses of cash were partially offset by $19.9 million of proceeds from the issuance of common stock pursuant to stock-based awards.

Net cash provided by operating activities attributable to continuing operations in 2022 includes adjustments to earnings consisting primarily of $366.3 million of impairments and amortization of intangibles;

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Net cash used in investing activities attributable to continuing operations in 2022 consists primarily of capital expenditures of $49.1 million that are primarily related to internal development of software and computer hardware to support our services, and cash used in an acquisition, net of cash acquired, of $25.7 million.

Net cash used in financing activities attributable to continuing operations in 2022 is primarily due to purchases of treasury stock of $482.0 million, payments of $176.3 million to settle the outstanding 2022 Exchangeable Notes, payments of $109.3 million of withholding taxes paid on behalf of employees for net settled equity awards, purchases of non-controlling interests for $10.6 million, and payments of $7.5 million to settle outstanding warrants associated with the 2022 Exchangeable Notes.

Net cash used in financing activities attributable to continuing operations in 2022 is primarily due to purchases of treasury stock of $482.0 million, payments of $176.3 million to settle the outstanding 2022 Exchangeable Notes, payments of $109.3 million of withholding taxes paid on behalf of employees for net-settled stock-based awards, purchases of non-controlling interests for $10.6 million, and payments of $7.5 million to settle outstanding warrants associated with the 2022 Exchangeable Notes.

These uses of cash were partially offset by proceeds of $75.9 million related to the settlement of certain note hedges associated with the 2022 Exchangeable Notes, and $20.5 million of proceeds from the issuance of common stock pursuant to stock-based awards.

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;

$41.4 million of depreciation;

$28.6 million of amortization of intangibles;

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 was 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.

Liquidity and Capital Resources

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For additional information on long-term debt, including maturity dates 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.

In connection with our agreement with Google to withdraw our temporary restraining order, we have agreed to pay $40 million into an escrow account with scheduled payments through July 2023, of which we have paid $21.2 million as of December 31, 2022.

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 2023 cash capital expenditures will be between $60 million and $70 million, an increase from 2022 cash capital expenditures.

The increase is primarily driven by planned leasehold improvements in our recently leased office space in Vancouver and at our New York City office.

federal net operating losses, primarily generated from excess tax benefits from the exercise and vesting of stock-based awards, have been largely utilized through 2022.

Based on current estimates, we anticipate a $70 million to $80 million increase in cash taxes paid during 2023 compared to the cash taxes paid in 2022.

This estimate will be impacted by a variety of factors, including our stock price at the time stock-based awards vest or are exercised.

We have entered into various purchase commitments, primarily consisting of web hosting services that are currently committed through September 2025.

The Company expects that 2024 cash capital expenditures will be between $55 million and $65 million, relatively flat to 2023 cash capital expenditures.

We have entered into various purchase commitments, primarily consisting of web hosting services that are currently committed through December 2026.

Our obligations under these various purchase commitments, which were impacted by usage rates in 2023, are $103.2 million for 2024, $85.0 million for 2025, and $14.2 million for 2026.

The Company does not have any off-balance sheet arrangements at December 31, 2023, other than those described above.

In May 2022, our Board of Directors approved a new share repurchase program (the “Share Repurchase Program”) to repurchase up to 12.5 million shares of our common stock.

In May 2022, our Board of Directors approved a share repurchase program (the “2022 Share Repurchase Program”) to repurchase up to 12.5 million shares of our common stock.

On April 28, 2023, our Board of Directors approved a share repurchase program (the “2023 Share Repurchase Program”) for the repurchase of up to $1.0 billion in aggregate value of shares of Match Group stock, which replaced the 2022 Share Repurchase Program.

During the year ended December 31, 2023, we repurchased 13.5 million shares for $546.2 million, on a trade date basis, under the 2022 and 2023 Share Repurchase Programs.

On January 30, 2024, the Board of Directors of the Company approved a new share repurchase program (the “2024 Share Repurchase Program”) for the repurchase of up to $1.0 billion in aggregate value of shares of Match Group stock.

The 2024 Share Repurchase Program replaces the 2023 Share Repurchase Program.

Under the 2024 Share Repurchase Program, shares of our common stock may be purchased on a discretionary basis from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions or other means, including through Rule 10b5-1 trading plans.

The 2024 Share Repurchase Program may be commenced, suspended or discontinued at any time.

During the year ended December 31, 2022, we repurchased 7.2 million shares for $482.0 million, on a trade date basis.

As of December 31, 2022, a total of 5.3 million shares remain available for repurchase under the repurchase program.

At December 31, 2023, all of the Company’s international cash can be repatriated without significant tax consequences.

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Business Combinations

Acquisitions are an important part of our growth strategy.

Acquisitions have historically been 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.

For a discussion of the Company’s acquisition of The League in 2022, see “Note 5—Goodwill and Intangible Assets” to the consolidated financial statements included in “Item 8—Consolidated Financial Statements and Supplementary Data.”

Recoverability of Goodwill and Indefinite-Lived Intangible Assets

Goodwill is the Company’s largest asset with a carrying value of $2.3 billion and $2.4 billion at December 31, 2022 and 2021, representing 56% and 48%, respectively, of the Company’s total assets.

Goodwill is the Company’s largest asset with a carrying value of $2.3 billion at each of December 31, 2023 and 2022, representing 52% and 56%, respectively, of the Company’s total assets.

Indefinite-lived intangible assets, which consist of certain of the Company’s acquired trade names and trademarks, have a carrying value of $183.1 million and $189.0 million at December 31, 2023 and 2022, respectively.

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The 2023 and 2022 annual assessments did not identify any goodwill impairments.

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, 2022 and 2021.

The Company has a negative carrying value for the Company’s annual goodwill test at both October 1, 2023 and 2022.

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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For certain indefinite-lived intangible assets, for which the fair value as of the most recent assessment date significantly exceeded the carrying value, the Company performed a qualitative impairment assessment as of October 1, 2023 and concluded that it was more likely than not that the fair values of those indefinite-lived intangible assets continued to exceed the carrying values.

For assets in which a quantitative assessment is performed, the Company determines the fair value of its indefinite-lived intangible assets using an avoided royalty discounted cash flow (“DCF”) valuation

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.

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.

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.

The royalty rates used in the DCF analyses are based upon an estimate of the royalty rates that a market participant would pay to license the specific trade names and trademarks.

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Assumptions used in the avoided royalty DCF analyses, including the discount rate and royalty rate, are assessed at least 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 quantitative assessments as part of the annual indefinite-lived impairment assessment ranged from 12% to 16% in 2022 and 10% to 16% in 2021, and the royalty rates used ranged from 3% to 8% in 2022 and 5% to 8% in 2021.

The discount rates used in the Company’s quantitative assessments as part of the annual indefinite-lived impairment assessment ranged from 15% to 18% in 2023 and 12% to 16% in 2022, and the royalty rates used ranged from 3% to 8% in both 2023 and 2022.

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

During the year ended December 31, 2022, the Company recognized impairment charges of $244.3 million related to the Azar and Hakuna brands at Hyperconnect, $43.9 million related to the Meetic and Match brands in Europe, and $5.5 million related to certain affinity brands in the U.S.

These impairments were primarily due to a decline in projections related to a lower outlook for the businesses, including foreign currency impacts in certain of Hyperconnect’s key markets, as well as the use of increased discount rates as a result of an increase in risk-free rates and overall market volatility in general.

At December 31, 2022, 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 $84.3 million.

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

These impairments were primarily due to a decline in projections related to a lower outlook for the businesses at that time, including foreign currency impacts in certain of Hyperconnect’s key markets, as well as the use of increased discount rates as a result of an increase in risk-free rates and overall market volatility in general.

At December 31, 2023 and December 31, 2022, 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 $76.5 million and $84.3 million, respectively.

In connection with the annual impairment assessment, the Company reviews the useful lives for intangible assets and whether events or changes in circumstances indicate that an indefinite life may no longer be appropriate.

As of October 1, 2022, the Company reclassified certain indefinite-lived intangible assets with a carrying value of $49.9 million to the definite-lived intangible asset category because these assets were no longer considered to have an indefinite life.

Recoverability and Estimated Useful Lives of Long-Lived Assets

We review the carrying value of all long-lived assets, consisting of property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.

If the carrying value is deemed not to be recoverable, an impairment loss is recorded equal to the amount by which the carrying value of the long-lived asset exceeds its fair value.

In addition, the Company reviews the useful lives of its long-lived assets whenever events or changes in circumstances indicate that these lives may be changed.

Recoverability and Estimated Useful Lives of Definite-lived Intangible Assets

We review the carrying value of all definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

The carrying value of a definite-lived intangible asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.

If the carrying value is deemed not to be recoverable, an impairment loss is recorded equal to the amount by which the carrying value of the definite-lived intangible asset exceeds its fair value.

In addition, the Company reviews the useful lives of its definite-lived intangible assets whenever events or changes in circumstances indicate that these lives may be changed.

During the year ended December 31, 2022, the Company recognized an impairment charge related to Hyperconnect intangible assets with definitive lives of $25.8 million, which is included within impairment and amortization of intangibles.

The carrying value of property and equipment and definite-lived intangible assets was $344.9 million and $358.3 million, at December 31, 2022 and 2021, respectively.

The carrying value of definite-lived intangible assets was $122.7 million and $168.7 million, at December 31, 2023 and 2022, respectively.

Match Group is subject to income taxes in the United States and numerous foreign jurisdictions.

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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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Accounting for stock-based compensation at the Company is often complex due to our desire to attract, retain, and reward employees at many of our brands by allowing them to benefit from the value they help to create.

We also utilize equity awards as part of our acquisition strategy.

We accomplish these objectives, in part, by issuing equity awards denominated in the equity of our non-public subsidiaries as well as in Match Group, Inc.

We further refine this approach by tailoring the terms of equity awards as appropriate.

For example, we issue certain equity awards with vesting conditioned on the achievement of specified performance targets such as revenue or profits;

We also utilize stock-based awards as part of our acquisition strategy.

We accomplish these objectives, in part, by issuing awards denominated in the equity of our non-public subsidiaries as well as in Match Group, Inc.

We further refine this approach by tailoring the terms of awards as appropriate.

For example, we issue certain awards with vesting conditioned on the achievement of specified performance targets such as revenue or profits;

these awards are referred to as performance awards.

In other cases, we condition the vesting of equity awards to the achievement of value targets for a specific subsidiary or the Company’s stock price;

In other cases, we condition the vesting of awards to the achievement of value targets for a specific subsidiary or the Company’s stock price;

these awards are referred to as market-based awards.

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The value of RSUs is expensed as stock-based compensation expense over the applicable vesting term.

For PSU grants, the expense is measured at the grant date as the fair value of Match Group common stock and expensed as stock-based compensation over the vesting term if the performance targets are considered probable of being achieved.

For PSU awards, the expense is measured at the grant date as the fair value of Match Group common stock and expensed as stock-based compensation over the vesting term if the performance targets are considered probable of being achieved.

Recent Accounting Pronouncements

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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