On the company's third-quarter earnings call, Match (MTCH) CEO Gregg Blatt described the popular dating app Tinder as a "rocket." This seems to be an apt description, as Tinder's growth continues to be astronomical. Though Match owns a whole suite of dating brands, including Match.com, Plenty of Fish, and Meetic, Blatt has been clear that Tinder is the "future of this business."

Tinder is now the top grossing "lifestyle" app in 99 countries. In the first quarter, management charged Tinder with doubling its paid member count (PMC) by the end of the year, which would mean ending the fiscal period with 1.6 million paid members. The app is already at 1.5 million paid members, thanks to a record number of net additions.

Tinder only launched its paid service, called TinderPlus, in March 2015. The service offers functions such as Rewind, which allows users to change their mind on people they had previously swiped left (declined), and Passport, which enables users to "connect with people anywhere around the world." Additional features such as paying for extra SuperLikes -- which makes users three times more likely to match with someone -- helped monetize the group of users that don't want to pay for the monthly service.

Tinder is laying the golden eggs at Match.com 

Undoubtedly the success at Tinder disproportionately contributed to Match's overall strong performance of late. For the previous four quarters, Tinder has independently increased paying members by nearly 1 million, while Match's 44 other brands added just 1.4 million.   

Aside from this debatable over-reliance, Match's financial position continues to improve. Operating revenue grew 37% year over year and revenue grew 18% to $316.9 million, hampered by the revenue decline in Match's non-dating business. Importantly, cash grew from $173 million last quarter to $231 million this quarter. 

These results have given Blatt and team the confidence to project year-end dating revenue in the midpoint of the company's previously stated range of $1.10 to $1.14 -- not bad for a company that went public just a year ago.

All the eggs in one basket

Match has made it clear that it is relying on Tinder to lead the way, but can investors expect to see sustained growth from the company's golden goose? For the short term, yes. Tinder's home market in the U.S. still has plenty of room to expand. At the time of Match.com's IPO, it was stated that Tinder had 50 million users. Currently only 3% of these users are paid members, but with paid member count growth rates of 26% in the third quarter for the domestic market and 46% internationally, there is plenty of opportunity to monetize the user base.

International expansion is high on the agenda for Tinder, with the online dating market in Europe and China alone expected to be worth a combined $2.4 billion by 2021. Match is making tech investments to improve the app in order to attract, retain and convert users into members internationally.

Tinder has had huge success already in the U.K., France, and Australia but there is plenty of opportunity for expansion in countries such as Russia, China, and South America, as this chart from Statista shows:  

Infographic: The Dating App Worldmap | Statista

Image source: Statista.

Network effect and monetization

Tinder is expanding its offerings constantly. This year, it launched Tinder Social, which pairs up groups of friends for social events, and bought start-up HeyVina!, an app specifically aimed at networking and friend-finding for women. Tinder is taking learnings from its namesake popular dating app and applying them to new apps and concepts, all centered on socializing. 

The popularity of Tinder, particularly among millennials -- and the diminished stigma around online dating -- has generated an enviable network effect. As more people join Tinder, the platform becomes stronger and the offering is that much more compelling to users. After all, if you're looking to find a date you want to go to the site with the greatest number of potential partners.  Facebook (META -2.15%) has famously leveraged the network effect to phenomenal success, effectively monetizing the social network and continuing to grow active users. Comparatively, Match has not yet realized the potential of Tinder.

Advertising revenue, similar to Facebook's model, is one potential avenue to achieve revenue growth, and Match is aiming to test this method in 2017. Blatt was quick to reassure analysts during the Q3 earnings call that this would not be done at the detriment of user experience. In previous testing, ads have elicited a negative response from users. Tinder is cognizant of the potential dangers of ads on the platform and must therefore develop an innovative way to integrate them. Given the delicate balance of adding ads to a platform, the upside could be limited and Tinder may choose to focus solely on converting and attracting paid members.

Not everyone is a fan of the gamified approach to finding love. Though the app may not be for you, Tinder's continued development of product offerings, available growth drivers, and enviable network effect makes it a cornerstone of a bullish Match.com thesis.