Match Group (NASDAQ:MTCH) reported fourth-quarter results on Feb. 6. The dating app company is enjoying solid growth in revenue and earnings, driven by the surging popularity of Tinder.

Match Group results: The raw numbers

Metric

Q4 2018

Q4 2017

Year-Over-Year Change

Revenue

$457.34 million

$378.91 million

21%

Operating Income

$151.00 million

$127.66 million

18%

Net earnings per share

$0.39

($0.03)

N/A

Data source: Match Group Q4 2018 earnings release (link opens PDF).

What happened with Match Group this quarter? 

Tinder continues to grow at a rapid clip. Average subscribers surged 40% year over year to 4.3 million, while average revenue per subscriber (ARPU) improved 12%. 

"Tinder has a robust set of initiatives to drive strong growth for the foreseeable future," CEO Mandy Ginsberg said during a conference call with analysts. "It is the go-to dating app for young singles and we continue to cement our leadership among college students while fueling growth in emerging markets like India."

Across all of its products, Match Group's subscriber base increased 17% to 8.2 million, while companywide ARPU rose 4% to $0.58. Together, this drove a 21% jump in revenue, to $457 million.

However, Match Group's growth investments are weighing on its profitability. Operating margin declined to 33% from 34% in the prior-year period. And adjusted EBITDA margin -- which excludes stock-based compensation expense and acquisition-related items -- fell 2 percentage points to 38%.

All told, Match Group's net earnings came in at $115.5 million, or $0.39 per share, up from a loss of $9 million, or $0.03 per share, in the year-ago quarter.

Heart-shaped flags on top of a map of Europe and Africa

International markets represent a sizable growth opportunity for Match Group's dating products empire. Image source: Getty Images.

Looking forward

Match Group believes that it has long runways for growth. The company noted in its fourth-quarter investor presentation that more than half of single people in North America and Europe have never tried dating products. In markets like Asia, Africa, Latin America, and the Middle East, that figure rises to approximately 75%. 

To capture a larger share of this sizable global market opportunity, Match Group plans to ramp up its marketing campaign in the coming quarters.  In turn, management expects adjusted EBITDA growth to trail revenue growth in the first quarter. The company is guiding for total revenue to rise 12%-14% year over year to between $455 million and $465 million. Adjusted EBITDA, meanwhile, is forecast to increase by 11% at the midpoint of its $150 million to $155 million projected range. 

"To summarize, the [dating products] category is large and underpenetrated," Ginsberg said. "As the market leader for over 20 years with a portfolio of iconic brands around the world, our energies are focused on expanding category penetration, just as Tinder did for a generation of younger users." 

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Match Group. The Motley Fool has a disclosure policy.