It was a market-beating year for Match Group (NASDAQ:MTCH) in 2018. The Tinder parent beat expectations and raised guidance in each of the past three quarters, driving shares up as much as 85%, before a late-year correction and weaker-than-expected forecast sent the stock plummeting. After regaining some of its lost ground, Match Group ended the year up more than 36%, far exceeding the 6% decline of the S&P 500.

Match Group will have another opportunity to hit it off with investors when the company reports the financial results of its fourth quarter before the market open on Thursday, Feb. 7. Let's take a look at the company's third-quarter results and recent events to see if they provide any insight into what investors can expect when the company reports earnings. 

Fingers forming a heart shape with a sunset in the background.

Image source: Getty Images.

Love at first sight?

For the third quarter, Match Group reported revenue that grew to $444 million, up 29% year over year, while operating income of $140 million increased 54% compared with the prior-year quarter, resulting in diluted earnings per share of $0.44. Match beat expectations by a wide margin on both the top and bottom line, as analysts' consensus estimates were calling for revenue of $437 million and earnings per share of $0.33.

Results were positive all over with strong performances in North America and abroad. This was driven by average subscribers that grew 23% year over year, while the average revenue per user (ARPU) increased 6% compared with the prior-year quarter.

Tinder was once again the belle of the ball, as subscribers grew 61% year over year, while ARPU jumped 24%. The company added 1.56 million new subscribers over the trailing-12-month period, bringing the total subscriber base to 4.1 million.

Trouble in paradise

Match Group recently settled an age discrimination class-action lawsuit that was brought against Tinder, for an estimated $23 million. The lawsuit alleged that Tinder charged users over the age of 30 twice the monthly subscription price it charged younger users. The settlement includes a combination of $25 cash, 25 additional Super Likes, or a one-month subscription to either Tinder Plus or Tinder Gold for each member of the affected class. The company also agreed to stop charging residents of California a different price based on their age. 

In other legal news, Match Group and its parent, IAC/InterActiveCorp (NASDAQ:IAC), filed a countersuit against Sean Rad, Tinder's co-founder, for $250 million, alleging that he secretly copied company files and made away with other proprietary company information. For perspective, Rad and the other co-founders of Tinder previously filed a lawsuit against Match and IAC alleging that the companies purposefully undervalued Tinder to avoid paying them what could potentially amount to billions of dollars. 

Match must have anticipated the ongoing acrimonious divorce proceedings, as the company reportedly included an additional $3 million in litigation expenses in its fourth-quarter outlook.

Will the romance last?

Match forecast revenue of between $440 million and $450 million, which would represent growth of just over 17% at the midpoint of its guidance. The company is also anticipating adjusted EBITDA in a range of $165 million to $170 million. 

To get a sense of the broader market sentiment toward Match Group, we can look to Wall Street, though we don't want to get caught up in its short-term mindset. Analysts' consensus estimates are calling for revenue of $448.43 million, up 18.3% year over year and near the high end of management's forecast. The outlook for profitability is similarly robust, with estimates for earnings per share of $0.38, double the $0.19 the company delivered in the prior-year quarter.

Match Group has had an uncanny ability to under-promise and over-deliver, and there isn't any reason to believe that this quarter will be any different. We'll soon know whether the romance will continue when Match Group reports earnings before the market opens on Thursday, Feb. 7.

Check out the latest Match Group earnings call transcript.