Match Group's Tinder is integrating a new artificial intelligence feature, "Chemistry," designed to leverage user data, including Camera Roll photos with explicit permission, to enhance user matching. This strategic move follows nine consecutive quarters of decline in paying subscribers for Tinder, a trend reported as of the third quarter of this year. The company disclosed details during Tuesday’s earnings call.
The "Chemistry" feature, currently in pilot phases in New Zealand and Australia, is intended to understand users' interests and personalities through interactive questions and consented access to their photo libraries. Match Group CEO Spencer Rascoff indicated the feature is slated to be a "major pillar of Tinder’s upcoming 2026 product experience." The company states the AI technology will facilitate recommendations for more compatible matches.
Tinder's declining performance has impacted Match Group's financial outlook. For the fourth quarter, Match Group projects a $14 million negative impact on Tinder’s direct revenue, attributed to this product testing. This contributes to Match's revised Q4 guidance, which now stands between $865 million and $875 million, below analyst expectations of $884.2 million. In the third quarter, Tinder’s revenue decreased 3% year-over-year, alongside a 7% reduction in paying users.
Beyond "Chemistry," Tinder employs AI in other capacities, including an LLM-powered system that prompts users before sending potentially offensive messages and tools to assist in selecting optimal profile photos. The dating app has also introduced non-AI features such as dating "modes," double dates, facial verification, and redesigned profiles in efforts to boost engagement and subscriptions.
The initiatives emerge amidst a challenging market landscape for dating applications, characterized by a reported shift among some younger demographics towards real-world interactions over online dating. Furthermore, online daters in the U.S. may be curtailing spending due to economic pressures. Despite Tinder's specific challenges, Match Group reported overall Q3 revenue of $914.2 million, a 2% increase, largely aligning with estimates, and an earnings per share of 62 cents.
