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Match Group, Inc. (NASDAQ:MTCH)
Q1 2020 Earnings Call
May 6, 2020, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Match Group First Quarter 2020 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Lance Barton, Senior Vice President of Corporate Development and Investor Relations. Please go ahead.

Lance Barton -- Investor Relations

Thank you, operator, and good morning, everyone. I hope that everyone is staying safe. We are doing this call remotely for the first time. So joining me from various locations are, CEO, Shar Dubey; and CFO and Chief Operating Officer, Gary Swidler. Last night, we published our first quarter results along with a shareholder letter which can be found on our Investor Relations website.

Before we start though, I'd like to remind everyone that during this call, we may discuss our outlook and future performance. These forward-looking statements may be preceded by words such as we expect, we believe, we anticipate or similar statements. These statements are subject to risks and uncertainty, and our actual results could differ materially from the views expressed today. Some of these risks have been set forth in our earnings release and our periodic reports filed with the SEC.

With that, I'd like to turn the call over to Shar.

Shar Dubey -- Chief Executive Officer

Thank you, Lance, and good morning, and thank you, all, for joining the call. Hope you're all staying well. As Lance said, we're doing this a little bit differently, so hopefully, it all goes smooth. So what I'm going to do this morning, I'm just going to share a few quick thoughts, Gary is going to provide a little more color on financials, and then we'll open it up for Q&A. Back in Feb, when we at the last call, we said we had a great start to the year. All of our brands had exciting plans and we were hoping for another great year under our belt. And then, of course, COVID happened. We actually started tracking this back in Asia in February.

And as you know, we have offices in Seoul, Singapore and Tokyo. And even as we were contemplating closing some of these offices, we were closely monitoring our businesses, particularly our Pairs business and Tinder in those markets. And for most of that period, our metrics remained largely unimpacted. Until around mid-March when the stories from Italy and then Spain followed by Washington, California, New York started coming in, and within about two weeks, all of our offices around the world shuttered. Fortunately, we had two to three weeks head start, and we were able to make sure all our employees had the right remote access to our systems. They had the right equipment and tools.

And we were able to quickly go remote with minimum disruption. And it's gone remarkably well thus far. The teams have managed to maintain their connectivity and productivity. In fact, we just did a survey, and the vast majority of our employees say they can sustain this for a few more months, if needed. As we in terms of business impact. Between the letter at the end of March and the one yesterday, we tried to explain in a lot of details what we're seeing. But in case you haven't read the letter, some very key highlights. Engagement is up, especially among young, and especially among women. We did see softness in new sign ups and propensity to pay as the pandemic unfolded.

Regarding new sign ups, we think there are three drivers for that. One, if you've been a resistor to the category, now may not seem like intuitively the right time to justify joining. Two, a number of our brands actually rely on word-of-mouth marketing quite a bit. And it's hard that becomes harder as social life has pretty much come to a standstill. And finally, we did reduce our marketing spend. We wanted to make sure channels that no longer made sense, we pulled out of. We also wanted to make sure none of our creatives were dissident.

In terms of propensity to pay, we first saw the impact in new subscribers, particularly in hard-hit areas and among the older demographic. In fact, some of our brands with more older demos saw double-digit declines in the second half of March. But once the worst of the new cycles were kind of done, April started seeing some stabilization on all our brands, particularly in North America. Now there's lots of puts and takes and specific trends by country and city. But in aggregate, all of our brands saw some year-over-year growth in first-time subscribers in April.

We are also seeing some declines in the price per payer, particularly on Tinder, both in terms of shift to lower-priced SKUs and some declines in a la carte purchases. As we've mentioned in the letter, we did a bunch of product and marketing pivots to make sure we're helping our users navigate these crazy times. And then all of the changes we've seen in the past 6-plus weeks, I particularly wanted to call out two positive trends. The first, women engagement is up meaningfully. There's been a big positive gender mix shift in both new sign ups and active users, and this is a very healthy thing for a dating ecosystem and should be beneficial to us on the other side.

The other is the use of video. We have long believed in the power of video, particularly to reduce the disconnect that happens between having a conversation online and then meeting in person for the first time. In fact, we first launched one to one live video back in 2011, when the world was mostly a desktop world. And we've made several attempts since, but it never really got much adoption. I do think this time, however, as users are being forced to use it, they're seeing the benefits and are likely to continue using it even after all this is over. And finally, much is uncertain today. But the one thing that has become certain, our products fulfill a very fundamental human need. And it's become that much more critical now.

Social isolation is hard for human beings, especially if you think of single people when suddenly all avenues for meeting other people like school, work, church, parties and concerts are all gone. And imagine if there was also no Tinder or Hinge or Match or PlentyOfFish. There is a reason we're seeing this increased engagement. And for all the short-term hiccups we're going to see, this need isn't going to go away. The other thing I wanted to mention, over the past few weeks, we've heard some wonderful stories of how our users are dealing with these times. We've had our success couples getting married on video, on rooftops with their friends toasting them from other rooftops.

We've even heard some stories about drive-thru weddings. We've heard stories about people who are slowing down and getting to know others, spending time cooking and hanging out virtually. We've also heard about people who have fast-tracked their relationship and moved in to shelter-in-place together, and having a good enough time that they wrote to us about it. We've heard stories of people meeting at a distance in grocery stores and dog parks. And for all these users who've been chatting and video dating, we can't wait for them to meet on the other side of this.

And with that, I'm going to hand it over to Gary.

Gary Swidler -- Chief Operating Officer and Chief Financial Officer

Thanks, Shar. We've included most of the financial details in our letter and press release, so I'm only going to hit a few highlights. All things considered, we had a very respectable Q1, with 17% year-over-year revenue growth, 19% ex FX as the virus impacted our trends in March. EBITDA increased for the quarter, 11% year-over-year to $172 million. We were able to reduced or deferred costs, including some marketing and legal spend in the last few weeks of March. Tinder showed solid user trends in Q1.

The business added 1.3 million subscribers on a year-over-year basis, 28% growth, and grew direct revenue 31%. Aggregate non-Tinder subscribers were roughly flat year-over-year in Q1, and these brands generated 2% direct revenue growth. Revenue and subscriber growth at Tinder and the non-Tinder brands were negatively impacted by the effects of the virus. The impact was most notable at our brands that have an older subscriber base, including OurTime, Meetic and Match, which initially saw a meaningful impact from the virus. Brands like OkCupid and Hinge, which have a higher concentration of users in densely populated markets with the most severe outbreaks, such as New York City and London, also saw more initial impact from the virus.

Despite this, Hinge, OkCupid, Pairs, Chispa and BLK all contributed solid year-over-year subscriber growth in Q1. Hinge's pricing optimization has led to rate and revenue improvement but conversion declines, a trend we expect to persist this year. Our separation from IAC remains on track to close by the end of the second quarter, subject to the satisfaction of the closing conditions. We've set our virtual shareholder meeting for a vote on June 25. The strategic rationale for the separation that we laid out in December remains fully intact. Despite all the stock price volatility since December, the exchange ratio has barely moved, so the transaction looks pretty much the same as it did when we signed.

In part as a result of the virus' impact on our EBITDA, we expect to end Q2 with a little higher leverage, slightly below five times net leverage, and delever a little more slowly than we had originally expected. Given our strong free cash flow generation, we're confident this leverage level is manageable for us. We still anticipate we'll be under three times net leverage in 18 months. Like many companies, we have run countless scenarios on the outlook for the remainder of the year. It's difficult to be precise about the full year right now, given all the uncertainty around what might happen with the virus and the lockdowns. As you know, subscription businesses like ours tend to hold up a little better as things soften, but may not bounce back as quickly as some other types of businesses, although our a la carte revenue portion can.

We provided an outlook for Q2, which shows year-over-year revenue growth, but a slight percentage decline sequentially. As a subscription business, the effects of a slower March and April in terms of new users and first-time subscribers will continue to be felt through Q2. We expect Q2 EBITDA to be close to flat when compared to last year if you add back the $7 million of separation-related costs we expect to incur in Q2 2020. We generally don't adjust for these costs when we report. So we expect our reported EBITDA next quarter to be down by around the amount of the separation costs.

As a result of the crisis, many advertisers have left the market, leading rates to decline and making our ad spend more effective. Therefore, we're planning to continue spending where we see solid opportunities to drive subscriber growth, even at the expense of near-term margin. In general, while we're deferring some noncritical hiring and generally trying to be judicious with costs, we intend to keep investing in our businesses, because we know people are increasingly engaging with our products and are eager to get out and date in real life again. While the short-term may be choppy, longer term, we're very confident in our ability to drive solid growth for our shareholders.

With that, I'll ask the operator to open the line for questions.

Questions and Answers:

Operator

[Operator Instructions] The first question today comes from Nick Jones of Citi. Please go ahead.

Nick Jones -- Citi -- Analyst

All right, thank you for taking my question. Great. Just one, I guess, it's probably a little nuanced. Can you give an update on what trends you're seeing in the country, states, regions, cities where social distancing measures are loosening and businesses are starting to reopen?

Shar Dubey -- Chief Executive Officer

Sure. I can take that. Actually, if you look at the geographic effects, it's been rather interesting, and there's obviously lots of different stories. But broadly, we've been thinking about this as all markets fall in one of three categories. The first bucket was the really severely impacted markets. I would put markets like Italy, Spain and even New York in that category. These markets had the largest impact on our business, and they all have been the slowest to recover. The second group of markets, I would say, are the ones that have either a low or moderate impact of the virus. And while they've had some restrictions, they've never really locked down.

And I would put Sweden, South Korea, a number of states in Central and Southern U.S. in that bucket. And most of these markets barely saw any impact. And then there is a large part of the remaining, which is somewhat in between, where the effects haven't been as the virus effects haven't been as bad as Italy and Spain and New York, but they did go into a much more restrictive lockdown. And these are the markets where we saw a real impact during the heavy new cycles, but they have all stabilized and recovered. And the types of markets in here, I would include most of U.S. except states in the two coasts, Nordics, Germany,etc.

And of course, there's a lot of exceptions, for instance, Japan, which we first thought was in our number two bucket of unimpacted. Once they canceled the Olympics and went into the emergency restrictions, we are now seeing a moderate impact there. And so we call it in our number three bucket. Also, markets like India, Brazil and several South Asian markets are more impacted in April than they were in March, for instance.

And about your question about how are we seeing when businesses are reopening. The two markets we've been watching closely, one is Germany. That's sort of loosened some of its restrictions for about two weeks now. And then, Georgia, of course, in the U.S. In Germany, Tinder, Meetic and even OkCupid, which is smaller there, have seen some nice uptick. Georgia is also seeing some nice trends, but I wouldn't yet jump to any conclusions. It's too early. It's hard to tell how much and how long this might stay.

Operator

Thank you. Next question comes from Dan Salmon of BMO Capital Markets. Please go ahead.

Dan Salmon -- BMO Capital Markets -- Analyst

Hi, good morning everyone. Shar, can I maybe return to those two big ideas that you featured about female engagement and video? And one must imagine that those two things are somewhat correlated together. And so I wanted to ask a big picture question about what I think you and management have talked about before as the challenge of always bringing the female experience up to be a little bit more in line with sort of expectations. And how important you think video might be to that?

And what I'm saying is, we've seen features like females message first. We've seen those sort of things roll out. Does it make sense where you have a product where, for example, you need to go on a video pre-date first before you could ever meet in person? And then just broadly, if you could talk about some of the more important video initiatives across the platform. I know you touched on a few things in there. But what would be some of the most important in your minds? And what are some of the key sort of milestones for them that you have?

Shar Dubey -- Chief Executive Officer

Sure. Yes. Women engagement is a metric that we always strive in all of our product and marketing efforts to try to increase because it is one of the most beneficial things to the ecosystem. And we have believed in video. I have certainly believed in the power of the live video technology for a lot of years here. We tried we've given it a try many different times, and I said I've always been disappointed with the level of adoption and usage we've seen over the years. But last year, we actually did as we were seeing people become a little more comfortable with video generally, we wanted to make sure we were prepared to leverage video when it when we thought consumers were ready for it.

And so there were two particular initiatives last year that we launched around video. The first was one-on-one video on our platform called Ablo. And that particular experience was actually quite rich for one-on-one video. They have icebreakers, they have great moderation capabilities,etc. And the moment this lockdown happened, we did take some learnings, quick learnings, from Ablo, and we wanted to roll it out on our other platforms. In terms of where things are, we've already rolled it out at Match and Pairs in April. It's coming in the next week or two on Meetic and Hinge, and Tinder should be testing it out in June. So that's sort of the one-on-one experience.

On the other use case we've been experimenting with since about Q4 of last year is the one-to-many live video experience. And as we went into the situation, we expedited our global rollout, and we are now out fully on POF and Twoo, two of our platforms. And I am very hopeful that this time around, it's going to stick. I have always believed that a half date on video is a great and safe way to increase the quality of your first date. And so hopefully, this stays.

Dan Salmon -- BMO Capital Markets -- Analyst

That's great, thank you very much.

Operator

The next question comes from Brian Fitzgerald of Wells Fargo. Please go ahead.

Brian Fitzgerald -- Wells Fargo -- Analyst

Yeah, thanks. And this might be a follow-up to Dan's question. But as you mentioned, video is becoming more important in your platforms, both for our communication, but also for content consumption with things like Swipe Night. Can you tell us a bit about the cost structure there? Are you using cloud resources today? Anything you could tell us about how that's evolving, maybe through to the multi-cloud or forward commitments to reduce the cost as and get ahead of that cost curve as you continue to see video ramping as a feature?

Gary Swidler -- Chief Operating Officer and Chief Financial Officer

This is Gary. Why don't I take a crack at that. Yes, we are using third-party providers, all on cloud, to handle video. As you may know, a lot of third-party providers have emerged over the last few years, and they take advantage of the benefits of scale and really drive down the cost. So it's actually become a lot more economical than it was just a few years ago and technology has gotten a lot better. So we're working with a couple of them already and we're talking to some others. We'll see how this evolves as we kind of get up the curve on video. But so far, so good. If at some point, it made sense for us to do it more in-house, we could certainly consider that. But right now, it looks to us like using third parties is a pretty cost-effective and efficient way of doing this. And as you know, I think on the one-to-many, we've done that through some partnerships as well.

So we feel good about our approach. We think it's giving us the flexibility that we need. And we'll see how adoption and usage really scales up and kind of go from there. So we're negotiating different rates, different structures, trying to be as mindful of costs as we can. Because we're not on one-to-one video, initially monetizing that directly, we want to try to be as judicious as possible on the cost front. But we do think that the benefits overall to the ecosystem of taking on that cost will be significant and essentially will pay for themselves. So we're optimistic about that.

And then as we get more sophisticated, as usage ramps up, we'll see if there's some opportunities to monetize, either directly or indirectly through increased subscriptions, whatever it may be. And that, we think, will also help us cover the cost. So there might be some short-term impact to these costs, but we think, over time, we'll find ways both to drive them down through the third-party providers and find some ways to monetize and make this into a strong business for us. So that's kind of how we see the approach on video.

Brian Fitzgerald -- Wells Fargo -- Analyst

Great, thanks guys.

Operator

Okay. The next question comes from Doug Anmuth of JP Morgan. Please go ahead.

Doug Anmuth -- JP Morgan -- Analyst

Thanks. I just wanted to circle back on the increased engagement that you're seeing with females, particularly under 30. Just curious if you can talk about whether these are mostly existing users? Or are you also adding new users in the demographic? And then just given the importance of this user group, is there anything that you'd highlight that you're planning to do to retain these users or convert them more into paying subscribers?

Shar Dubey -- Chief Executive Officer

Yes, sure. We are as excited about this increased women engagement has the questions that are coming in. We've said in terms of new users, generally, we've said we've seen some weakness there. But of all the demographics, the younger female users have been the least impacted, and in fact, in some instances, have even been up. So the increased engagement among women and young women is coming from both new and existing users.

And our hypothesis at the moment as to why that's happening, we've always known that the pace of dating varies by age and certainly by gender. And we think that as the pressure to meet in real life reduced, amid the pandemic, women got more comfortable engaging more actively on the platform. And we expect some of this may dissipate after life goes back to normal. But we're learning a lot of insights, and the teams are hard at work to making sure we adapt the product to ensure we maintain some of this increased activity. I can't get into a lot of details about it, but we're definitely looking at this area very closely.

Operator

Thank you. The next question comes from Eric Sheridan of UBS. Please go ahead.

Eric Sheridan -- UBS -- Analyst

Thanks so much. I hope all is well with the team. Maybe following up on Doug's question and broadening out beyond just one gender or age demo. What learnings have you so far to date that might change the way you think about allocating marketing dollars, either by degree of dollars or channels that you might expect a higher return when you think about acquisition, retention and reengagement, not only in this environment but looking beyond this environment?

Gary Swidler -- Chief Operating Officer and Chief Financial Officer

Why don't I give that a shot and we can kind of go from there. I think, in general, it's been a very interesting environment for marketing since the pandemic really struck, Eric. At first, we kind of pulled back. It was kind of our natural reaction as it wasn't clear kind of where things were going. We pulled back pretty hard, maybe in retrospect, a little bit too hard, back in March. And we've been adjusting ever since, and we're having a lot of conversation about what to do with marketing kind of the rest of the way.

The reality is that advertisers have pulled back very significantly in a lot of places, and the returns we're seeing on our marketing are incredibly strong right now. So we're trying to take advantage of that. We're putting back some marketing spend in pretty quickly here in April. The good news is we tend to have a very flexible and fluid approach to marketing, and we analyze returns very carefully. And so we can pivot and keep moving and adjusting, and that's what we're going to keep doing. And I think we'll be doing that clearly through the year.

So on the acquisition front, first of all, if you look at our businesses like Meetic and Match which focus a lot on TV and on online, like Facebook, the opportunities there, the returns there are very, very strong. And so those are places where we can go and increase spending and really see strong returns on that spend. In Japan, we've seen some additional opportunities open up with new social networks coming online and increased usage of those social networks in Japan. So we're optimistic that we're going to see more channels, and that should help offset some of the effects of the lockdown that we've seen more recently kind of imposed in Japan.

In general, for the year, I'm not expecting our marketing spend to be up dramatically right now. But we are holding aback a reserve, if you want to think of it that way, in terms of marketing spend, and we'll see how this plays out. If marketers don't come back, if travel and others really stay shut the rest of the way and we continue to see great opportunities to acquire customers, we're going to spend into that. As I said, even at the impact of a little bit of margin through the rest of this year, because we think that will help us late this year into next year and continue to drive growth. We've got lots of room, especially internationally, to drive more brand awareness, more understanding of the category. We're going to continue to spend there.

And there's other places where we could look to spend, too. For example, our PlentyOfFish business showing a lot of momentum, generally a lot of momentum in live streaming. It's a place where we haven't spent a lot of marketing recently. But if we see some opportunities, we could go somewhere like that. The Hinge business, with a lot of momentum on the user side, starting to really generate some revenue for us now. I think there's real opportunity there as well in the back half of the year to continue to gain share, even right here in the U.S. as things hopefully continue to open up. So we're watching this all very carefully, trying to adjust literally week by week. We have that flexibility. As we've said, there's not a lot committed so we can adjust and pivot, and that's what we're going to continue to do through the year.

Operator

Okay. The next question comes from Ross Sandler of Barclays. Please go ahead.

The next question comes from Jason Helfstein of Oppenheimer. Please go ahead.

Jason Helfstein -- Oppenheimer -- Analyst

Two questions. One, maybe talk about how we should think about or your expectations for renewal or churn, kind of maybe exiting this quarter and into next quarter? And then, second, coming out of COVID, has that changed your thinking for 2021 or 2022 investment plans around Asia and India?

Gary Swidler -- Chief Operating Officer and Chief Financial Officer

All right. Why don't I start. Shar, if you want to jump in, feel free. So on renewal rates, it's a good question. It's something that we've always been watching very closely. As people are locked down, would renewal rates really be affected? And thus far, across the brands, we have really not seen any impact in renewal rates. So they've been stable really pretty consistently across the portfolio, which is very good. But it is an area of risk as the lockdowns persist. And so we're watching it day to day, week to week, but so far, pretty static. And that's what we've assumed through Q2, and in our minds, kind of through the rest of the year.

But obviously, that's one area where things could swing depending on how those go. But looks good so far. And obviously, we're kind of six weeks in, seven weeks in to the teeth of this. So that is very encouraging on the renewal rates front. In terms of the impact on our overall Asia long-term strategy, we don't really think anything has changed. We're still very optimistic about that market. That's where there's a lot of population growth, a lot of people, generally. So I don't think anything has changed. That's always been a long-term strategy. We've been talking about of 2022, 2023 revenue contribution from Asia.

So it was always kind of a five year plan for us. And we think a lot of the dynamics are very much still in place. So we're still focusing on building our Muslim business, which we think will have real impact in Asia and a bunch of Asian markets. We're still building our matrimony business in Japan, which we think there's a lot of opportunity to take share in that market and potentially bring that into other countries that have matrimony markets like India. So strategically, we're still focused on all this. Nothing has stopped or slowed. But we'll have to see how the virus plays out and whether that adjusts things for us over time.

As Shar mentioned, geographically, the markets have been affected in different ways over there. So India is under pretty severe effects right now. It's an important market for us. It's a place where we had a lot of expectations. So we'll see how that market fares going through all this. It's probably a little tougher for India to bounce back than maybe some other markets.

Japan had been holding up extremely well. More recently, it's been a little bit softer as they have encouraged people to stay home. And then you've got a mixed bag through Southeast Asia. Hong Kong and Singapore have been stronger. So it's not one monolithic market in Asia, and we'll have to see what the effects of this virus are and whether we should adjust. But right now, certainly, high level, strategically, we don't see a difference. Whether it changes timing by one quarter or two for some of our initiatives, some of our spend, some of our marketing spend or other efforts, we'll have to wait and see. But right now, we're pretty much all systems go on the Asia front.

Jason Helfstein -- Oppenheimer -- Analyst

Thank you.

Gary Swidler -- Chief Operating Officer and Chief Financial Officer

Thanks, Jason.

Operator

The next question comes from Kunal Madhukar of Deutsche Bank. Please go ahead.

Kunal Madhukar -- Deutsche Bank -- Analyst

Hi, thanks for taking the question. Curious about the guide, especially insofar as if you extend April, the 9% growth in April through the rest of the month, you actually see a bit of sequentially flat revenue for 2Q. So I was wondering what the assumptions were as far as the guide is concerned? And as a quick one, on the February growth, which was like 23% ex FX, that is reminiscent of the growth that you had in the second and third quarter of last year before the Apple iOS kind of impacted. So is that the kind of run rate we should be kind of thinking off on a more normalized basis?

Gary Swidler -- Chief Operating Officer and Chief Financial Officer

Okay. Let me try to take those. And again, Shar, certainly, if you'd like to jump in, please do. I think on the guide, in terms of kind of the impact on revenues for the quarter, given what we showed you that we did in April, I just think there's it's important to understand the dynamics of the subscription business. Things that have happened in March and April around new users, which we've said have been tougher, around first time subscribers, which were down in March and have recovered some in April, will affect we'll feel those effects through the quarter.

So you can't just look at kind of that one month in isolation, we're going to feel those effects. Because, obviously, the duration of a subscriber is multiple months. And so the impact of what we're able to see from a new user sign ups perspective and a first-time subscriber perspective affect us through the quarter. So we'll see how the rest of the quarter plays out. But our view on the quarter is obviously very much informed by April.

In general, we looked at the trends that we saw across the businesses. We looked at them in March, we looked at them in April to try to get a sense of what the virus was doing. Obviously, there was some improvement in April. We tried to then kind of go brand by brand and make some adjustments for what we expect to see in May and June as a result of the trends that we had seen in these brands once the pandemic really got going, March and April. And so that's where there's a little bit of uncertainty. But in aggregate, we've sort of assumed that the April levels kind of flow through the rest of the quarter. But we did go brand by brand and try to figure that out.

And again, that's where guiding is a little challenging in this kind of market because the trends have moved around week-to-week to a pretty significant extent, and predicting them through the rest of the quarter is not easy. But given that we're part way through the quarter and given the recurring nature of our business, we're able to give you a pretty good sense of where we think things are going to come out. But we did say, I think absent significant changes from April, this is kind of what the quarter looks like. So that's how we've kind of factored that through the guide.

And then, in terms of kind of our longer term expectations, I don't think anything has really changed. We've always thought of trying to drive a business that could grow in that kind of 15% to 20% range, mid-high teens range, if you want to think of it that way, from a top line basis. And nothing has shaken our faith in our business that we don't think we can continue to grow like that once we start to get back to kind of "more normal times." I don't know exactly when that's going to be or what normal is really going to be like. But we still believe the business should be able to do that once we get there.

Again, it's important to remember the dynamics of the subscription business. If we're having these softer effects softer impacts through the rest of this year or 2020 is affected by what's going on, that will linger into 2021 to some extent. So there will be a period of time that it's going to take to kind of recover and dig back from the softness that's created this year from the virus. That's the nature of the subscription business. So it won't bounce back right away, but longer term, we remain confident in being able to drive a business that grows at the same rates that we've always talked about. Nothing has shaken our confidence in that at all.

Kunal Madhukar -- Deutsche Bank -- Analyst

Thank you.

Gary Swidler -- Chief Operating Officer and Chief Financial Officer

Okay thanks Kunal.

Operator

The next question comes from Benjamin Black of Evercore ISI. Please go ahead.

Benjamin Black -- Evercore ISI -- Analyst

Great. Thanks for the question, Perhaps a broader one here. With a record unemployment claims coming through and Match and just dating products, in general, relying on consumer discretionary spend. I was curious to get your thoughts on perhaps the puts and takes of how you guys are equipped or thinking about navigating a deeper recession?

Shar Dubey -- Chief Executive Officer

I can take a stab at it. We've obviously been thinking about that. And if you look back at the last time we were dealing with the financial downturn back in 2008, 2009, generally, our category and industry performed well. And Match, in particular, grew very nicely during those years. We had good wins on product and marketing. But we were obviously a much smaller business. We had far smaller footprint, geographically, back then. So in this time, it's also a little bit different in terms of how global the impact seems to be. And it is a combination of sort of insecurity of livelihood combined with insecurity of life. So hard to tell exactly how this is going to go out.

The one thing I will, however, say, from everything I know, the need for relationships and dating is not going to go away. I often say there's like, if you look at Maslow's hierarchy of human needs, right above food, shelter and security is love and relationship. And also, relative to all the other ways of meeting people were concerts and other sort of events, etc, we're still far more inexpensive and efficient way to meet. So that's sort of the balance that we think is how it's going to impact our business.

Benjamin Black -- Evercore ISI -- Analyst

Great. Great, thank you.

Operator

The next question comes from Brent Thill of Jefferies. Please go ahead.

Brent Thill -- Jefferies -- Analyst

Good morning. Sure. Shar, longer term, does this dynamic potentially expedite the shift to online dating imagine the many first-time users coming in and you convert, does this become a much bigger tailwind coming out of this?

Shar Dubey -- Chief Executive Officer

Yes. One of the things that we've all done, as we've sort of paused here in life, we've all reevaluated our priorities and the need for the relationship and human connection, we realized, has become so much more important. And as I said, a lot of the other sources of how people generally meet, schools, concerts, parties, events, they're all becoming more challenging. And so our products have to be more attractive to the category resistors over time. We should be able to tell a more compelling story about the value of our services to those who have resisted it thus far, particularly in markets where penetration is still low. And we provide a much more safer and efficient alternative that doesn't even require to step out of your home should this continue for longer. So I do think there will be some implication to penetration of the category.

Brent Thill -- Jefferies -- Analyst

Just a quick follow-up for Gary on Hinge monetization. Can you just talk through what mode you're on, kind of when you expect that to happen?

Gary Swidler -- Chief Operating Officer and Chief Financial Officer

Yes. I mean, we've really gotten that under way now this year, and we're making good progress. We feel good about how that's going. As I mentioned, we started to optimize a little bit on pricing, which is coming at the expense of some conversion, but really helping us from a revenue standpoint. So we feel that plan continues to generally be on track. That business generally continues to be on track with what we had expected. And we've got more to come on the product side as the year unfolds, both subscription and a la carte driven. So Hinge continues to execute well, and we remain very optimistic with the trends there.

Operator

Thank you. And the last question today comes from Ross Sandler of Barclays. Please go ahead.

Ross Sandler -- Barclays -- Analyst

Yeah. I understand. So yes, my question is can you guys mentioned in the letter the product pipeline remains on track at Tinder for 2020. So I guess, given all the changes in behavior that you're seeing, how does that impact the revenue product prioritization for this year? And how does it change your thinking on subs versus ARPU? You had talked about pay as you go and a few other things that you're thinking about doing before COVID happens. So how has your thinking evolved on revenue products for Tinder?

Gary Swidler -- Chief Operating Officer and Chief Financial Officer

Do you want to take that, Shar?

Shar Dubey -- Chief Executive Officer

Gary, I can take a stab at it. Ross, in terms of sort of what has changed, you've seen us react already. The we are definitely trying to capture and capitalize on the two key trends that I'd mentioned, women's engagement and use of video. And so that obviously has been a change to most of our brands' road map. But beyond that, our plan to continue building and testing features as we had planned before remains the same.

I do think that while there may be some pressure during these lockdown periods, particularly for certain types of monetization, once we're on the other side of this, it should bounce back. And we will build them out. We're committed to building them out. We're going to test them out. We may delay. We'll roll out, particularly if we don't think market conditions are entirely favorable. But as of now, it hasn't actually changed much of our plans or thinking around product road map.

Lance Barton -- Investor Relations

Okay, great. I think we're going to leave it there. Thanks, everyone, for joining us, and stay safe. Hopefully, we'll not have to do a call from multiple locations next quarter, and we will be back to fully normal ways of doing things. So thanks again for joining, and we'll see you all next quarter.

Shar Dubey -- Chief Executive Officer

Thank you.

Operator

[Operator Closing Remarks]

Duration: 46 minutes

Call participants:

Lance Barton -- Investor Relations

Shar Dubey -- Chief Executive Officer

Gary Swidler -- Chief Operating Officer and Chief Financial Officer

Nick Jones -- Citi -- Analyst

Dan Salmon -- BMO Capital Markets -- Analyst

Brian Fitzgerald -- Wells Fargo -- Analyst

Doug Anmuth -- JP Morgan -- Analyst

Eric Sheridan -- UBS -- Analyst

Jason Helfstein -- Oppenheimer -- Analyst

Kunal Madhukar -- Deutsche Bank -- Analyst

Benjamin Black -- Evercore ISI -- Analyst

Brent Thill -- Jefferies -- Analyst

Ross Sandler -- Barclays -- Analyst

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