As the Q1 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the consumer subscription industry, including Match Group (NASDAQ:MTCH) and its peers.
Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.
The 8 consumer subscription stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was in line.
Luckily, consumer subscription stocks have performed well with share prices up 17.2% on average since the latest earnings results.
Match Group (NASDAQ:MTCH)
Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ:MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.
Match Group reported revenues of $831.2 million, down 3.3% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a decline in its users and a slight miss of analysts’ number of payers estimates.
"In my first full quarter as CEO, we've moved quickly to reinvigorate the business and this quarter's results show early traction," said Spencer Rascoff, CEO of Match Group.
Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.
Duolingo reported revenues of $230.7 million, up 37.7% year on year, outperforming analysts’ expectations by 3.4%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates.
Duolingo Total Revenue
Duolingo delivered the fastest revenue growth and highest full-year guidance raise among its peers. The company reported 130.2 million users, up 33.4% year on year. The market seems happy with the results as the stock is up 28.8% since reporting. It currently trades at $515.14.
Spun out from Netflix, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Roku reported revenues of $1.02 billion, up 15.8% year on year, exceeding analysts’ expectations by 1.5%. Still, it was a slower quarter as it posted a slight miss of analysts’ number of total hours streamed estimates and a significant miss of analysts’ EBITDA estimates.
Interestingly, the stock is up 3.2% since the results and currently trades at $69.45.
Founded by two Stanford University computer science professors, Coursera (NYSE:COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.
Coursera reported revenues of $179.3 million, up 6.1% year on year. This result surpassed analysts’ expectations by 2.3%. It was a strong quarter as it also produced EBITDA guidance for next quarter exceeding analysts’ expectations.
The company reported 175.3 million active customers, up 18% year on year. The stock is up 10.2% since reporting and currently trades at $8.46.
Started by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ:BMBL) is a leading dating app built with women at the center.
Bumble reported revenues of $247.1 million, down 7.7% year on year. This number met analysts’ expectations. Taking a step back, it was a satisfactory quarter as it also recorded EBITDA guidance for next quarter exceeding analysts’ expectations.
Bumble had the weakest performance against analyst estimates among its peers. The company reported 4.01 million active buyers, down 0.2% year on year. The stock is up 31.2% since reporting and currently trades at $5.76.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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