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MATCH GROUP, INC.

(MTCH)
  Report
Delayed Nasdaq  -  01:00 2022-11-25 pm EST
47.27 USD   -2.07%
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MATCH GROUP, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-K)

02/24/2022 | 04:16pm EST

2021 Developments


On March 26, 2021, Match Group Holdings II, LLC ("MG Holdings II"), amended its
credit agreement to provide for a $400 million incremental "delayed draw" term
loan facility ("Delayed Draw Term Loan"), the proceeds of which could be used
only to finance a portion of the consideration for the acquisition of
Hyperconnect, Inc. ("Hyperconnect"). The Delayed Draw Term Loan was terminated
effective June 18, 2021 according to its terms.

On June 17, 2021, Match Group completed the acquisition of Hyperconnect. The
purchase price was $1.75 billion, net of cash acquired. The acquisition was
funded with cash on hand and the issuance of 5.9 million shares of Match Group
common stock.

On October 4, 2021, MG Holdings II completed a private offering of $500 million
aggregate principal amount of 3.625% Senior Notes. The proceeds from these notes
were used to redeem a portion of the outstanding 2022 Exchangeable Notes, for
general corporate purposes, and to pay expenses associated with the offering.

On October 4, 2021, we repurchased approximately $414 million aggregate
principal amount of our outstanding 2022 Exchangeable Notes for approximately
$1.5 billion, including accrued and unpaid interest on the repurchased notes,
funded with:

i.net proceeds of $879.0 million from a registered direct offering to the holders of the 2022 Exchangeable Notes being repurchased of 5,534,098 shares of our common stock at a price of $158.83 per share;

ii.approximately $420 million of net proceeds from the 3.625% Senior Notes offering; and

iii.net proceeds of approximately $201 million from the unwind of a proportionate amount of outstanding hedges and warrants corresponding to the 2022 Exchangeable Notes being repurchased.


In connection with these transactions, the statement of operations for the year
ended December 31, 2021 reflects a loss of $14.5 million, included in other
expense, net, primarily related to the change in fair value of the embedded
derivative we recognized during the period between our entering into the various
agreements on September 22, 2021 and settlement on October 4, 2021.

On December 1, 2021, we agreed to settle the pending, threatened, and potential
claims at issue in Rad, et al. v IAC/InterActiveCorp, et al. and related
arbitrations. Under the terms of the agreement, Match Group agreed to pay the
plaintiffs and claimants $441 million and plaintiffs and claimants agreed to
dismiss all claims in trial and in arbitration. We expect to pay the settlement
amount in 2022 utilizing cash on hand. The $441 million settlement is included
in other expense, net for the year ended December 31, 2021.

Updated Operating and Financial Metrics

In 2021, we adjusted our key operating and financial data to provide better insight into the performance of our business. We are disclosing this data in three geographic areas-Americas, Europe, and APAC and Other.


Additionally, rather than presenting Average Subscribers and Average Revenue per
Subscriber ("ARPU"), we now present Payers and Revenue Per Payer ("RPP") (as
defined below). Unlike Average Subscribers, which included only users who
purchase a subscription and were counted on a daily basis, Payers include all
users from whom we earn revenue (including those who make only à la carte
purchases) and are counted as unique users in a given month. Similarly, ARPU was
a daily metric and included Direct Revenue sourced from subscribers only,
whereas RPP is a monthly metric and includes all Direct Revenue. We believe that
Payers and RPP, which account for non-subscriber users and the associated
revenue, is more useful in evaluating the performance of our business.

We believe presenting Direct Revenue, Payers, and RPP in three geographic
regions enables investors to better understand our operating performance and is
appropriate given our expanding global footprint. The new metrics also better
account for the increasing à la carte revenue as a percentage of total revenue
that the company earns and enhance comparability with our peers.
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Additionally, we have updated the title of our primary non-GAAP measure to
"Adjusted Operating Income" from our previous title "Adjusted EBITDA." We
believe this updated title better reflects how management views the non-GAAP
measure in relation to the closest GAAP measure, operating income. The
calculation of the non-GAAP measure has not changed, and therefore the
reconciliation of Net Income to Operating Income and to Adjusted Operating
Income have not changed. See "Non-GAAP Financial Measures" below for the full
definition of Adjusted Operating Income and a reconciliation of net earnings
attributable to Match Group, Inc. shareholders to Operating Income and Adjusted
Operating Income.

Separation from IAC

On June 30, 2020, the companies formerly known as Match Group, Inc. (referred to
as "Former Match Group") and IAC/InterActiveCorp (referred to as "Former IAC")
completed the separation of the Company from IAC through a series of
transactions that resulted in two, separate public companies-(1) Match Group,
which consists of the businesses of Former Match Group and certain financing
subsidiaries previously owned by Former IAC, and (2) IAC, consisting of Former
IAC's businesses other than Match Group (the "Separation"). As part of the
Separation, Former Match Group merged with and into MG Holdings II, an indirect
wholly-owned subsidiary of Match Group, with MG Holdings II surviving the merger
as an indirect wholly-owned subsidiary of Match Group. As a result of the
Separation, the operations of Former IAC businesses other than Match Group are
presented as discontinued operations.

For additional information relating to the Separation and the related transactions and agreements, see "Part I-Item 1-Business-Separation of Match Group and IAC" and "Part I-Item 1-Business-Relationship with IAC after the Separation."

Key Terms:

Operating and financial metrics:

•Americas includes North America, Central America, South America, and the Caribbean islands.

•Europe includes continental Europe, the British Isles, Iceland, Greenland, and Russia, but excludes Turkey (which is included in APAC and Other).

•APAC and Other includes Asia, Australia, the Pacific islands, the Middle East, and Africa.

•Direct Revenue is revenue that is received directly from end users of our products and includes both subscription and à la carte revenue.

•Indirect Revenue is revenue that is not received directly from an end user of our services, substantially all of which is advertising revenue.


•Payers are unique users at a brand level in a given month from whom we earned
Direct Revenue. When presented as a quarter-to-date or year-to-date value,
Payers represents the average of the monthly values for the respective period
presented. At a consolidated level, duplicate Payers may exist when we earn
revenue from the same individual at multiple brands in a given month, as we are
unable to identify unique individuals across brands in the Match Group
portfolio.

•Revenue Per Payer ("RPP") is the average monthly revenue earned from a Payer
and is Direct Revenue for a period divided by the Payers in the period, further
divided by the number of months in the period.

Operating costs and expenses:


•Cost of revenue - consists primarily of the amortization of in-app purchase
fees, compensation expense (including stock-based compensation expense) and
other employee-related costs for personnel engaged in data center and customer
care functions, credit card processing fees, hosting fees, live video costs, and
data center rent, energy, and bandwidth costs. In-app purchase fees are monies
paid to Apple and Google in connection with the processing of in-app purchases
of subscriptions and service features through the in-app payment systems
provided by Apple and Google.

•Selling and marketing expense - consists primarily of advertising expenditures
and compensation expense (including stock-based compensation expense) and other
employee-related costs for
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personnel engaged in selling and marketing, and sales support functions.
Advertising expenditures includes online marketing, including fees paid to
search engines and social media sites, offline marketing (which is primarily
television advertising), and payments to partners that direct traffic to our
brands.

•General and administrative expense - consists primarily of compensation expense
(including stock-based compensation expense) and other employee-related costs
for personnel engaged in executive management, finance, legal, tax and human
resources, acquisition-related contingent consideration fair value adjustments
(described below), fees for professional services (including transaction-related
costs for acquisitions), and facilities costs.

•Product development expense - consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs that are not capitalized for personnel engaged in the design, development, testing, and enhancement of service offerings and related technology.

Long-term debt:


•Credit Facility - The revolving credit facility under the credit agreement of
MG Holdings II. At December 31, 2021, there was $0.4 million in outstanding
letters of credit and $749.6 million of availability under the Credit Facility.
As of December 31, 2020, there was $0.2 million in outstanding letters of credit
and $749.8 million of availability under the Credit Facility.

•Term Loan - The term loan facility under the credit agreement of MG Holdings
II. At December 31, 2021 and December 31, 2020, the Term Loan bore interest at
LIBOR plus 1.75% and the then applicable rates were 1.91% and 1.96%,
respectively. At December 31, 2021, $425 million was outstanding.

•6.375% Senior Notes - MG Holdings II's 6.375% Senior Notes, which were redeemed on June 11, 2020 with the proceeds from the 4.625% Senior Notes.


•5.00% Senior Notes - MG Holdings II's 5.00% Senior Notes due December 15, 2027,
with interest payable each June 15 and December 15, which were issued on
December 4, 2017. At December 31, 2021, $450 million aggregate principal amount
was outstanding.

•4.625% Senior Notes - MG Holdings II's 4.625% Senior Notes due June 1, 2028,
with interest payable each June 1 and December 1, which were issued on May 19,
2020. At December 31, 2021, $500 million aggregate principal amount was
outstanding.

•5.625% Senior Notes - MG Holdings II's 5.625% Senior Notes due February 15,
2029, with interest payable each February 15 and August 15, which were issued on
February 15, 2019. At December 31, 2021, $350 million aggregate principal amount
was outstanding.

•4.125% Senior Notes - MG Holdings II's 4.125% Senior Notes due August 1, 2030,
with interest payable each February 1 and August 1, which were issued on
February 11, 2020. At December 31, 2021, $500 million aggregate principal amount
was outstanding.

•3.625% Senior Notes - MG Holdings II's $500 million aggregate principal amount
of 3.625% Senior Notes due October 1, 2031, with interest payable each April 1
and October 1, commencing on April 1, 2022, which were issued on October 4,
2021. The proceeds were used to repurchase $414.0 million of the outstanding
2022 Exchangeable Notes, for general corporate purposes, and to pay expenses
associated with the offering. At December 31, 2021, $500 million aggregate
principal amount was outstanding.

•2022 Exchangeable Notes - During the third quarter of 2017, Match Group
FinanceCo, Inc., a subsidiary of the Company, issued $517.5 million aggregate
principal amount of 0.875% Exchangeable Senior Notes due October 1, 2022, which
are exchangeable into shares of the Company's common stock. Interest is payable
each April 1 and October 1. On October 4, 2021 we purchased $414.0 million
aggregate principal amount of the outstanding 2022 Exchangeable Notes (as
described above). During 2021, an additional $18.6 million aggregate principal
amount of the 2022 Exchangeable Notes were presented for redemption, $3.0
million of which settled in the year ended December 31, 2021. The
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outstanding balance of the 2022 Exchangeable Notes at December 31, 2021 was $100.5 million and is presented as a current liability.


•2026 Exchangeable Notes - During the second quarter of 2019, Match Group
FinanceCo 2, Inc., a subsidiary of the Company, issued $575.0 million aggregate
principal amount of 0.875% Exchangeable Senior Notes due June 15, 2026, which
are exchangeable into shares of the Company's common stock. Interest is payable
each June 15 and December 15. The outstanding balance of the 2026 Exchangeable
Notes at December 31, 2021 was $575 million.

•2030 Exchangeable Notes - During the second quarter of 2019, Match Group
FinanceCo 3, Inc., a subsidiary of the Company, issued $575.0 million aggregate
principal amount of 2.00% Exchangeable Senior Notes due January 15, 2030, which
are exchangeable into shares of the Company's common stock. Interest is payable
each January 15 and July 15. The outstanding balance of the 2030 Exchangeable
Notes at December 31, 2021 was $575 million.

Non-GAAP financial measure:


•Adjusted Operating Income - is a Non-GAAP financial measure. See "Non-GAAP
Financial Measures" for the definition of Adjusted Operating Income and a
reconciliation of net earnings attributable to Match Group, Inc. shareholders to
operating income and Adjusted Operating Income.

                              MANAGEMENT OVERVIEW

Match Group, Inc., through its portfolio companies, is a leading provider of
digital technologies designed to help people make meaningful connections. Our
global portfolio of brands includes Tinder®, Match®, Hinge®, Meetic®, OkCupid®,
Pairs™, PlentyOfFish®, OurTime®, Azar®, Hakuna™ Live, and more, each built to
increase our users' likelihood of connecting with others. Through our trusted
brands, we provide tailored services to meet the varying preferences of our
users. Our services are available in over 40 languages to our users all over the
world.

As used herein, "Match Group," the "Company," "we," "our," "us," and similar terms refer to Match Group, Inc. and its subsidiaries, unless the context indicates otherwise.

Sources of Revenue


All our services provide the use of certain features for free and then offer a
variety of additional features through a subscription or, for certain features,
on a pay-per-use, or à la carte, basis. Our revenue is primarily derived
directly from users in the form of recurring subscription fees and à la carte
purchases.

Subscription revenue is presented net of credits and credit card chargebacks.
Payers who purchase subscriptions or à la carte features pay in advance,
primarily by using a credit card or through mobile app stores, and, subject to
certain conditions identified in our terms and conditions, all purchases are
final and nonrefundable. Fees collected, or contractually due, in advance for
subscriptions are deferred and recognized as revenue using the straight-line
method over the term of the applicable subscription period, which primarily
ranges from one to six months, and corresponding in-app purchase fees incurred
on such transactions, if any, are deferred and expensed over the same period.
Revenue from the purchase of à la carte features is recognized based on usage.
We also earn revenue from online advertising, which is recognized every time an
ad is displayed.

Trends affecting our business

Over the last several years, we have seen significant changes in our business.
Tinder has grown from incubation to the largest contributing brand in our
portfolio with our more established brands returning to growth as well. This has
allowed us to invest in or acquire brands such as Hyperconnect and Hinge and
incubate new brands such as Chispa™, BLK®, and Upward®, where we have seen
initial growth and we expect to see additional growth opportunities into the
future. With our evolving portfolio of brands, we have seen a number of
significant trends in our business in recent years, including the following:

Lower cost users. All of our brands rely on word-of-mouth, or free, user
acquisition to varying degrees. Word-of-mouth acquisition is typically a
function of scale (with larger communities driving greater numbers of
referrals), youthfulness (with the viral effect being more pronounced in younger
populations due, in part, to a significantly higher concentration of people
seeking connections in any given social circle and the increased adoption of
social media and similar platforms among such populations), and monetization
rate (with people
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generally more likely to talk openly about using technologies to meet people
that are less heavily monetized). Additionally, some, but not all, of our brands
spend meaningfully on paid marketing. Accordingly, the average amount we spend
to acquire a user differs significantly across brands based in large part on
each brand's mix of paid and free acquisition channels. As our mix has shifted
toward younger users, our mix of acquisition channels has shifted toward lower
cost channels, driving a decline over the past several years in the average
amount we spend to acquire a new user across our portfolio. As a percentage of
revenue, our costs of acquiring users have declined.

Changing paid acquisition dynamics. Even as our acquisition of lower cost users
increases, paid acquisition of users remains an important driver of our
business. The channels through which we market our brands are always evolving,
but we are currently in a period of rapid change as TV and video consumption
patterns evolve and internet consumption occurs regularly on mobile devices. As
we adapt our paid marketing activities to maximize user engagement with our
brands, we may increase our use of paid advertising at brands where we
traditionally relied on word-of-mouth engagement to leverage these shifts in
media consumption patterns and fuel international growth. Other brands in our
portfolio may reduce paid marketing activities to reflect the change in audience
engagement.

In-App Purchase Fees. Purchases made by our customers through mobile
applications, as opposed to desktop or mobile web, continue to increase.
Purchases processed through the in-app payments systems provided by the Apple
App Store and Google Play Store are subject to in-app purchase fees, which are
generally 30% of the purchase price (Google reduced its in-app purchase fees for
subscriptions to 15% as of January 1, 2022). As a result, the percentage of our
revenues paid to Apple and Google continues to be a significant expense. In
2019, Tinder began offering subscribers an alternative payment method to
Google's in-app payment system similar to the payment alternatives other brands
in our portfolio have historically offered to subscribers through mobile apps on
Android. Google has announced that beginning in March 2022, all purchases will
be required to be processed through the Google Play Store and subject to in-app
purchase fees. To the extent that app stores fee change, or the mix of our
revenue generated through app stores shifts, our results, in particular our
profit measures, could be impacted.

The manner in which Apple and Google operate these services is being reviewed by
legislative and regulatory bodies globally. Notably, the Republic of Korea
recently adopted legislation that prohibits Apple and Google from requiring that
developers exclusively use Apple and Google to process payments. In the
Netherlands, the Authority for Consumers and Markets found Apple's requirement
that online dating companies must exclusively use Apple's in-app payment
violates both Dutch and European Union law. Multiple other jurisdictions,
including the European Union, United Kingdom, Russia, Japan, and India are
investigating, considering regulatory action or considering legislation to
restrict or prohibit these practices. The United States Congress, as well as a
number of state legislatures, are also considering legislation that would
regulate certain terms of the relationships between developers and Apple and
Google and prohibit Apple and Google from requiring in-app payment processing.

Increase in acceptance and growth of technologies to meet people globally. Over
the past decade, there has been meaningful growth in the usage of technologies
to meet people in North America and Western Europe, and we see the potential for
similar growth in the rest of the world in the years ahead. As more
internet-connected people seeking connections utilize technologies to meet
people and the stigma around using such technologies continues to erode, we
believe that there is potential for accelerating growth in the use of these
technologies globally.

Increased consumption of video and live experiences. With more recent advances
in technology, most notably live video, and with an increasing amount of time
spent online, there are new ways that people want to meet and get to know one
another that are more reflective of how people engage in-person. Our brands are
evolving to incorporate a variety of new technologies that enable users to
interact in a variety of ways including video capabilities and live experiences.
These technologies were already being incorporated at the beginning of the
COVID-19 pandemic in 2020 and we are continuing to further incorporate them into
our portfolio of brands. We expect new technologies to continue to drive user
engagement and expect other technologies beyond video and live experiences to be
tested in our services and incorporated into our apps in the future.

Impacts of the Coronavirus. When the novel coronavirus ("COVID-19") first hit
Western Europe and then certain major metropolitan centers in the U.S. in the
Spring of 2020, particularly New York City, engagement
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(messages sent, daily active users, Swipe® activity on the Tinder platform)
increased significantly, but subscribers who purchase a subscription for the
first time ("first-time subscribers") declined at most of our brands as meeting
in person was restricted. As we entered the summer months of 2020, propensity to
pay rebounded across our portfolio, and first-time subscribers climbed amid
reduced COVID-19 cases, but then faced new headwinds at the end of 2020, as the
second wave of COVID-19 cases and related lockdowns took hold. In 2021, we saw a
new normalization level as vaccines continued to roll out globally, even as
several countries experienced a third wave of cases. We saw strong recovery in
the U.S. and improvement in Europe as well, but important markets for us such as
India, South Korea, Brazil, and Japan were further behind on the COVID-19 curve.
The recent Omicron variant surge has caused a modest impact on our business,
with rolling global effects as the wave passes through the U.S., Europe, and
then, we expect, Asia. While we have continued to feel the effects of COVID-19
on our business as new waves and variants have emerged, the business has proven
to be quite resilient over the last two years.

Other factors affecting the comparability of our results


Advertising spend. Our advertising spend, which is included in our selling and
marketing expense, has consistently been one of our larger operating expenses.
How we deploy our advertising spend varies among brands, with the majority of
our advertising spend taking place online, including search engines, social
media sites, streaming services and influencers. Additionally, some brands
utilize television and out-of-home marketing campaigns, such as on outdoor
billboards. For established brands, we seek to optimize for total return on
advertising spend by frequently analyzing and adjusting spend to focus on
marketing channels and markets that generate returns above our thresholds. Our
data-driven approach provides us the flexibility to scale and optimize our
advertising spend. We spend advertising dollars against an expected lifetime
value of a Payer that is realized over a multi-year period; and while this
advertising spend is intended to be profitable on that basis, it is nearly
always negative during the period in which the expense is incurred. For newer
brands that are gaining scale, or existing brands that are expanding into new
geographies, we may make incremental advertising investments to establish the
brand before optimizing monetization of the brand. In general, our more
established brands spend a higher proportion of their revenue on advertising
while our newer brands spend a lower proportion and tend to rely more on word of
mouth and other viral marketing. Additionally, advertising spend is typically
higher during the first quarter of our fiscal year, and lower during the fourth
quarter. See "Seasonality" below.

Seasonality. Historically, our business has experienced seasonal fluctuations in
quarterly operating results, particularly with respect to our profit
measurements. This is driven primarily by a higher concentration of advertising
spend in the first quarter, when advertising prices tend to be the lowest and
demand for our services tends to be highest, and a lower concentration of
advertising spend in the fourth quarter, when advertising costs tend to be
highest and demand for our services tends to be lowest. Seasonality is not
consistent across our brands, with brands targeted at older users generally
showing more seasonality than brands targeted at younger users.

International markets. Our services are available across the world. Our
international revenue represented 54% and 53% of our total revenue for years
ended December 31, 2021 and 2020, respectively. We vary our pricing to align
with local market conditions and our international businesses typically earn
revenue in local currencies. As foreign currency exchange rates change,
translation of the statement of operations of our international businesses into
U.S. dollars affects year-over-year comparability of operating results.

2021 Consolidated Results


In 2021, revenue, operating income and Adjusted Operating Income grew 25%, 14%
and 19%, respectively, year-over-year. Revenue growth was primarily due to
strong growth at Tinder, Hinge, and PlentyOfFish and the acquisition of
Hyperconnect in June 2021. Operating income and Adjusted Operating Income grew
at a slower rate than revenue primarily due to the acquisition of Hyperconnect,
higher cost of revenue primarily due to in-app purchase fees, higher general and
administrative expense primarily related to higher legal and other professional
fees and increased compensation expense as a result of increased headcount,
higher product development expenses from increased headcount at Tinder and
Hinge, partially offset by lower selling and marketing expense as a percentage
of revenue. Operating income was further impacted by higher amortization of
intangibles due to the acquisition of Hyperconnect and higher stock-based
compensation expense, primarily due to new grants made during the year and new
grants associated with the Hyperconnect acquisition, partially offset by lower
expense for award modifications.
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Results of Operations for the years ended December 31, 2021, 2020 and 2019

The following discussion should be read in conjunction with "Item 8. Consolidated Financial Statements and Supplementary Data."

Revenue
                                                                                      Years Ended December 31,
                                   2021               Change             % Change               2020               Change             % Change               2019

                                                                                (Amounts in thousands, except ARPU)
Direct Revenue:
Americas                      $ 1,512,057          $ 264,096               21%             $ 1,247,961          $ 157,803               14%             $ 1,090,158
Europe                            821,827            141,699               21%                 680,128             95,716               16%                 584,412
APAC and Other                    588,987            172,352               41%                 416,635             84,031               25%                 332,604
Total Direct Revenue            2,922,871            578,147               25%               2,344,724            337,550               17%               2,007,174
Indirect Revenue                   60,406             13,861               30%                  46,545              2,461                6%                  44,084
Total Revenue                 $ 2,983,277          $ 592,008               25%             $ 2,391,269          $ 340,011               17%             $ 2,051,258

Direct Revenue
Tinder                        $ 1,649,757          $ 294,357               22%             $ 1,355,400          $ 203,355               18%             $ 1,152,045
Other brands                    1,273,114            283,790               29%                 989,324            134,195               16%                 855,129
Total Direct Revenue          $ 2,922,871          $ 578,147               25%             $ 2,344,724          $ 337,550               17%             $ 2,007,174

Percentage of Total Revenue:
Direct Revenue:
Americas                           51%                                                          52%                                                          53%
Europe                             27%                                                          29%                                                          28%
APAC and Other                     20%                                                          17%                                                          16%
Total Direct Revenue               98%                                                          98%                                                          98%
Indirect Revenue                    2%                                                           2%                                                           2%
Total Revenue                      100%                                                         100%                                                         100%

Payers(a):
Americas                            8,009                896               13%                   7,113                742               12%                   6,371
Europe                              4,489                461               11%                   4,028                430               12%                   3,598
APAC and Other                      2,987                578               24%                   2,409                418               21%                   1,991
Total                              15,485              1,935               14%                  13,550              1,590               13%                  11,960

(Change calculated using non-rounded numbers)
RPP(a):
Americas                      $     15.73          $    1.11                8%             $     14.62          $    0.36                3%             $     14.26
Europe                        $     15.25          $    1.18                8%             $     14.07          $    0.53                4%             $     13.54
APAC and Other                $     16.43          $    2.02               14%             $     14.41          $    0.49                4%             $     13.92
Total                         $     15.73          $    1.31                9%             $     14.42          $    0.43                3%             $     13.99


(a)   Our ability to eliminate duplicate Payers at a brand level for periods
prior to Q2 2020 is impacted by data privacy requirements which require that we
anonymize data after 12 months, therefore Payer data for those periods is likely
overstated. Additionally, as Payers is a component of the RPP calculation, RPP
is likely commensurately understated for these same periods due to these data
privacy limitations.
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For the year ended December 31, 2021 compared to the year ended December 31, 2020


Americas Direct Revenue grew $264.1 million, or 21%, in 2021 versus 2020, driven
by 13% growth in Payers and 8% growth in RPP. Growth in Payers was primarily
driven by Tinder with contributions from Hinge and the Swipe® Apps (BLK, Chispa,
and Upward). RPP growth was driven by both monetization growth at Hinge and á la
carte purchases at Hinge, Tinder and PlentyOfFish.

Europe Direct Revenue grew $141.7 million, or 21%, in 2021 versus 2020, driven
by 11% growth in Payers and 8% growth in RPP. Growth in Payers and RPP was
primarily due to Tinder and, to a lesser extent, the acquisition of
Hyperconnect. RPP growth was favorably impacted by the increased strength of the
British pound and the Euro against the U.S. dollar compared to the year ended
December 31, 2020.

APAC and Other Direct Revenue grew $172.4 million, or 41%, in 2021 versus 2020,
driven by 24% growth in Payers and 14% growth in RPP. Payer growth was primarily
driven by Tinder and the acquisition of Hyperconnect. RPP growth was primarily
due to the acquisition of Hyperconnect.

Indirect Revenue increased $13.9 million primarily due to higher rates per impression and robust direct ad sales at Tinder.

For the year ended December 31, 2020 compared to the year ended December 31, 2019


Americas Direct Revenue grew $157.8 million, or 14%, in 2020 versus 2019, driven
by 12% growth in Payers. Growth in Payers was primarily driven by Tinder with
contributions from Hinge and the Swipe Apps (BLK, Chispa, and Upward).

Europe Direct Revenue grew $95.7 million, or 16%, in 2020 versus 2019, driven by
12% growth in Payers and 4% growth in RPP. Growth in Payers was primarily due to
Tinder, and to a lesser extent, contributions from Meetic and Hinge. RPP growth
was primarily due to Tinder and was favorably impacted by the increased strength
of the Euro compared to the U.S. dollar between the two periods.

APAC and Other Direct Revenue grew $84.0 million, or 25%, in 2020 versus 2019,
driven by 21% growth in Payers and 4% growth in RPP. Payer growth was primarily
driven by Tinder and Pairs with additional contributions from OkCupid. RPP
growth was driven by Pairs.

Indirect Revenue increased $2.5 million primarily due to higher rates per impression.

Cost of revenue (exclusive of depreciation)

                                                                                       Years Ended December 31,
                                     2021              $ Change            % Change              2020              $ Change            % Change              2019

                                                                                        (Dollars in thousands)
Cost of revenue                    $839,308            $203,475               32%              $635,833            $108,649               21%              $527,184
Percentage of revenue                 28%                                                         27%                                                        26%

For the year ended December 31, 2021 compared to the year ended December 31, 2020


Cost of revenue increased in part due to the acquisition of Hyperconnect in the
second quarter of 2021. Excluding the increase from the Hyperconnect
acquisition, cost of revenue increased 23% primarily due to an increase in
in-app purchase fees of $109.4 million, as revenue continues to be increasingly
sourced through mobile app stores; an increase of $15.8 million in partner
related costs associated with live video streaming; an increase in hosting fees
of $12.6 million; and an increase in compensation expense of $11.9 million
related to increased costs in customer care. Total in-app purchase fees for
2021, including Hyperconnect, were $552.6 million.

For the year ended December 31, 2020 compared to the year ended December 31, 2019


Cost of revenue increased due to an increase in in-app purchase fees of $50.0
million, as revenue continued to be increasingly sourced through mobile app
stores; an increase in hosting fees of $24.0 million; an increase of $17.9
million in partner related costs associated with live video streaming; and an
increase in compensation expense of $11.5 million related to increased headcount
and other operating costs in customer care.

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Selling and marketing expense

Years Ended December 31,

                              2021              $ Change            % Change              2020              $ Change            % Change              2019

                                                                                 (Dollars in thousands)
Selling and marketing
expense                     $566,459             $86,552               18%              $479,907             $52,467               12%              $427,440
Percentage of revenue          19%                                                         20%                                                        21%

For the year ended December 31, 2021 compared to the year ended December 31, 2020


Selling and marketing expense increased due to the acquisition of Hyperconnect
in the second quarter of 2021, higher marketing spend at multiple brands, and an
increase in compensation expense of $9.6 million related to increased headcount.
Selling and marketing expense continued to decline as a percentage of revenue
excluding Hyperconnect as we continue to generate revenue growth from brands
with relatively lower marketing expense.

For the year ended December 31, 2020 compared to the year ended December 31, 2019


Selling and marketing expense increased primarily due to higher marketing spend
at multiple brands, and an increase in compensation expense of $5.7 million.
Selling and marketing expense continued to decline as a percentage of revenue as
we continued to generate revenue growth from brands with relatively lower
marketing expense.

General and administrative expense

Years Ended December 31,

                                 2021              $ Change            % Change              2020              $ Change            % Change              2019

                                                                                    (Dollars in thousands)
General and administrative
expense                        $414,821            $103,614               33%              $311,207             $55,069               21%              $256,138
Percentage of revenue             14%                                                         13%                                                        12%

For the year ended December 31, 2021 compared to the year ended December 31, 2020


General and administrative expense increased in part due to the post-acquisition
expenses of Hyperconnect. Excluding Hyperconnect, general and administrative
expense increased 26% primarily due to an increase of $29.0 million in legal and
other professional fees; an increase in compensation expense of $20.5 million
primarily related to an increase in headcount and an increase in stock-based
compensation expense associated with new awards granted in the current year,
partially offset by lower modification expense in 2021; $7.5 million of
professional fees incurred to acquire Hyperconnect; an increase of $8.3 million
for non-income taxes, primarily digital services taxes; and an increase in
software license fees of $8.6 million.

For the year ended December 31, 2020 compared to the year ended December 31, 2019


General and administrative expense increased primarily due to an increase in
compensation of $39.3 million primarily related to an increase in headcount and
an increase in stock-based compensation expense resulting from a modification
charge in 2020; an increase of $6.7 million for non-income taxes, primarily
digital services taxes; and an increase of $6.4 million in legal expenses.

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Product development expense

                                                                                           Years Ended December 31,
                                         2021              $ Change            % Change              2020              $ Change            % Change              2019

                                                                                            (Dollars in thousands)
Product development expense            $241,049             $71,238               42%              $169,811             $17,851               12%              $151,960
Percentage of revenue                     8%                                                          7%                                                          7%

For the year ended December 31, 2021 compared to the year ended December 31, 2020


Product development expense increased in part due to the acquisition of
Hyperconnect. Excluding Hyperconnect, product development expense increased 29%
primarily due to an increase in compensation expense of $45.4 million primarily
related to increased headcount at Tinder and Hinge, and an increase in
stock-based compensation associated with new awards granted in the current year.

For the year ended December 31, 2020 compared to the year ended December 31, 2019

Product development expense increased primarily as a result of an increase of $18.7 million in compensation primarily due to increased headcount at Tinder.

Depreciation

                                                                                      Years Ended December 31,
                                     2021             $ Change            % Change              2020             $ Change            % Change              2019

                                                                                       (Dollars in thousands)
Depreciation                       $41,402              $131                 -%               $41,271             $6,916                20%              $34,355
Percentage of revenue                 1%                                                         2%                                                         2%

For the year ended December 31, 2021 compared to the year ended December 31, 2020

Depreciation was flat compared to the prior year period.

For the year ended December 31, 2020 compared to the year ended December 31, 2019

Depreciation increased primarily due to an increase in internally developed software being placed in service.

Amortization of intangibles

                                                                                         Years Ended December 31,
                                         2021             $ Change            % Change             2020             $ Change            % Change             2019

                                                                                          (Dollars in thousands)
Amortization of intangibles            $28,559             $21,034              280%              $7,525            $(1,202)              (14)%             $8,727
Percentage of revenue                     1%                                                        -%                                                        -%

For the year ended December 31, 2021 compared to the year ended December 31, 2020


Amortization of intangibles increased primarily due to an increase in
definite-lived intangibles related to the acquisition of Hyperconnect in the
second quarter of 2021, partially offset by an impairment charge recorded in
2020.

For the year ended December 31, 2020 compared to the year ended December 31, 2019

Amortization of intangibles decreased primarily due to the decrease in impairment charges in 2020 as compared to impairment charges recorded in 2019.

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Operating Income and Adjusted Operating Income

                                                                                         Years Ended December 31,
                                        2021              $ Change            % Change              2020              $ Change            % Change              2019

                                                                                          (Dollars in thousands)

Operating income                      $851,679            $105,964               14%              $745,715            $100,261               16%       
      $645,454

Percentage of revenue                   29%                                                          31%                                                        32%

Adjusted Operating Income            $1,068,456           $171,677         
     19%              $896,779            $118,519               15%       
      $778,260

Percentage of revenue                   36%                                                          38%                                                        38%

For a reconciliation of net earnings attributable to Match Group, Inc. shareholders to operating income and Adjusted Operating Income, see "Non-GAAP Financial Measures."

For the year ended December 31, 2021 compared to the year ended December 31, 2020


Operating income and Adjusted Operating Income increased 14% or $106.0 million
and 19% or $171.7 million, respectively, primarily driven by the increase in
revenue of $592.0 million which was driven by growth at Tinder, Hinge, and the
acquisition of Hyperconnect and lower selling and marketing expense as a
percentage of revenue, partially offset by an increase in cost of revenue due to
higher in-app fees, as revenue continues to shift to mobile app stores, and an
increase in general and administrative expense primarily due to professional
fees and compensation expense. Operating income was further impacted by higher
amortization of intangibles due to the acquisition of Hyperconnect and higher
stock-based compensation expense, primarily due to new grants made during the
year and new grants associated with the Hyperconnect acquisition, partially
offset by lower expense for award modifications in 2021.

At December 31, 2021, there was $273.9 million of unrecognized compensation
cost, net of estimated forfeitures, related to all equity-based awards, which is
expected to be recognized over a weighted average period of approximately 2.4
years.

For the year ended December 31, 2020 compared to the year ended December 31, 2019


Operating income and Adjusted Operating Income increased 16% or $100.3 million
and 15% or $118.5 million, respectively, primarily as a result of the increase
in revenue of $340.0 million driven by growth at multiple brands and lower
selling and marketing expense as a percentage of revenue, partially offset by an
increase in cost of revenue due to higher in-app purchase fees, as revenue was
increasingly sourced through mobile app stores, increased web hosting fees, and
live video costs.

Interest expense
                                                                           

Years Ended December 31,

                                   2021              $ Change            % Change              2020              $ Change            % Change              2019

                                                                                      (Dollars in thousands)
Interest expense                 $130,493             $(131)                -%               $130,624             $19,616               18%              $111,008

For the year ended December 31, 2021 compared to the year ended December 31, 2020


Interest expense was flat compared to the prior year despite an increase in the
total average principal amount of long-term debt outstanding due to lower
interest rates on newer issuances of senior notes and a lower LIBOR rate on the
Term Loan.

For the year ended December 31, 2020 compared to the year ended December 31, 2019


Interest expense increased primarily due to the issuance of the 4.125% Senior
Notes on February 11, 2020 and the issuance of the 4.625% Senior Notes on May
19, 2020. Additionally, the 2026 and 2030 Senior Exchangeable Notes were
outstanding for the entire year. Partially offsetting these increases were
decreases due to the redemption of the 6.375% Senior Notes during 2020 and a
lower LIBOR rate on the Term Loan.
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Other (expense) income, net
                                                                                Years Ended December 31,
                              2021                $ Change            % Change              2020             $ Change            % Change              2019

                                                                                 (Dollars in thousands)
Other (expense) income,
net                        $(465,038)            $(480,899)              NM               $15,861             $17,887               NM               $(2,026)


________________________

NM = not meaningful

Other expense, net, in 2021 includes a $441.0 million loss related to the
settlement of the former Tinder employee litigation, a $14.6 million loss
related to the changes in fair value of derivatives created as we repurchased a
portion of our outstanding 2022 Exchangeable Notes, a $5.2 million inducement
expense arising from the repurchased 2022 Exchangeable Notes, and $1.8 million
in net foreign currency losses, partially offset by $2.4 million of fair market
value gains on the net settlement of certain note hedges and warrants relating
to the repurchased 2022 Exchangeable Notes.

Other income, net, in 2020 includes a legal settlement of $35.0 million and interest income of $2.7 million, partially offset by a loss on redemption of bonds of $16.5 million, expense of $3.4 million related to mark-to-market adjustments pertaining to liability classified equity instruments, and $0.6 million in net foreign currency losses in the period.


Other expense, net, in 2019 includes a $4.0 million impairment of an equity
investment, expense of $1.7 million related to a mark-to-market adjustment
pertaining to a liability classified equity instrument, and $0.9 million in net
foreign currency losses in the period, partially offset by interest income of
$4.4 million.

Income tax (benefit) provision

                                                                              Years Ended December 31,
                             2021              $ Change            % Change              2020             $ Change            % Change              2019

                                                                               (Dollars in thousands)
Income tax (benefit)
provision                  $(19,897)           $(63,170)              NM               $43,273             $28,193              187%              $15,080
Effective income tax
rate                          NM                                                          7%                                                         3%


For discussion of income taxes, see "Note 3-Income Taxes" to the consolidated
financial statements included in "Item 8-Consolidated Financial Statements and
Supplementary Data."

For the year ended December 31, 2021, the Company recorded an income tax benefit
of $19.9 million, despite pre-tax income, primarily due to excess tax benefits
generated by the (i) exercise and vesting of stock-based awards and (ii)
research credits. This benefit was partially offset by an increase in the
valuation allowance for foreign losses and U.S. foreign tax credits.

For the years ended December 31, 2020 and 2019, the Company recorded an income
tax provision of $43.3 million, and $15.1 million, respectively, representing an
effective tax rate of 7%, and 3%, respectively, which is lower than the U.S.
statutory rate of 21% due primarily to excess tax benefits generated by (i) the
exercise and vesting of stock-based awards and (ii) research credits. In 2020,
these benefits were partially offset by an increase in the valuation allowance
for U.S. foreign tax credits.

Related party transactions

For discussion of related party transactions, see "Note 15-Related Party Transactions" to the consolidated financial statements included in "Item 8-Consolidated Financial Statements and Supplementary Data."

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                          NON-GAAP FINANCIAL MEASURES

Match Group reports Adjusted Operating Income and Revenue excluding foreign
exchange effects, both of which are supplemental measures to U.S. generally
accepted accounting principles ("GAAP"). Adjusted Operating Income is among the
primary metrics by which we evaluate the performance of our business, on which
our internal budget is based, and by which management is compensated. Revenue
excluding foreign exchange effects provides a comparable framework for assessing
how our business performed without the effect of exchange rate differences when
compared to prior periods. We believe that investors should have access to the
same set of tools that we use in analyzing our results. These non-GAAP measures
should be considered in addition to results prepared in accordance with GAAP,
but should not be considered a substitute for or superior to GAAP results. Match
Group endeavors to compensate for the limitations of the non-GAAP measures
presented by providing the comparable GAAP measure with equal or greater
prominence and descriptions of the reconciling items, including quantifying such
items, to derive the non-GAAP measure. We encourage investors to examine the
reconciling adjustments between the GAAP and non-GAAP measures, which we discuss
below.

Adjusted Operating Income

Adjusted Operating Income is defined as operating income excluding:
(1) stock-based compensation expense; (2) depreciation; and (3)
acquisition-related items consisting of (i) amortization of intangible assets
and impairments of goodwill and intangible assets, if applicable, and (ii) gains
and losses recognized on changes in the fair value of contingent consideration
arrangements. We believe this measure is useful for analysts and investors as
this measure allows a more meaningful comparison between our performance and
that of our competitors. The above items are excluded from our Adjusted
Operating Income measure because they are non-cash in nature. Adjusted Operating
Income has certain limitations because it excludes the impact of these expenses.

Non-Cash Expenses That Are Excluded From Adjusted Operating Income


Stock-based compensation expense consists principally of expense associated with
the grants of stock options, restricted stock units ("RSUs"), performance-based
RSUs, and market-based awards. These expenses are not paid in cash, and we
include the related shares in our fully diluted shares outstanding using the
treasury stock method; however, performance-based RSUs and market-based awards
are included only to the extent the applicable performance or market
condition(s) have been met (assuming the end of the reporting period is the end
of the contingency period). To the extent that stock-based awards are settled on
a net basis, we remit the required tax-withholding amounts from our current
funds.

Depreciation is a non-cash expense relating to our property and equipment and is computed using the straight-line method to allocate the cost of depreciable assets to operations over their estimated useful lives, or, in the case of leasehold improvements, the lease term, if shorter.


Amortization of intangible assets and impairments of goodwill and intangible
assets are non-cash expenses related primarily to acquisitions. At the time of
acquisition, the identifiable definite-lived intangible assets of the acquired
company, such as customer lists, trade names, and technology, are valued and
amortized over their estimated lives. Value is also assigned to (i) acquired
indefinite-lived intangible assets, which consist of trade names and trademarks,
and (ii) goodwill, which are not subject to amortization. An impairment is
recorded when the carrying value of an intangible asset or goodwill exceeds its
fair value. We believe that intangible assets represent costs incurred by the
acquired company to build value prior to acquisition and the related
amortization and impairment charges of intangible assets or goodwill, if
applicable, are not ongoing costs of doing business.
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The following table reconciles net earnings attributable to Match Group, Inc. shareholders to operating income and Adjusted Operating Income:

                                                                   Years Ended December 31,
                                                         2021                2020                2019

                                                                        (In thousands)
Net earnings attributable to Match Group, Inc.
shareholders                                        $   277,723          $  162,329          $  453,838
Add back:
Net (loss) earnings attributable to noncontrolling
interests                                                (1,169)             59,280             112,689
(Earnings) loss from discontinued operations, net
of tax                                                     (509)            366,070             (49,187)
Income tax (benefit) provision                          (19,897)             43,273              15,080
Other expense (income), net                             465,038             (15,861)              2,026
Interest expense                                        130,493             130,624             111,008
Operating Income                                        851,679             745,715             645,454
Stock-based compensation expense                        146,816             102,268              89,724
Depreciation                                             41,402              41,271              34,355
Amortization of intangibles                              28,559               7,525               8,727

Adjusted Operating Income                           $ 1,068,456          $  896,779          $  778,260

Effects of Changes in Foreign Exchange Rates on Revenue


Due to our global reach, the impact of foreign exchange rates on the Company may
be an important factor in understanding period over period comparisons if
movement in exchange rates is significant. Since our results are reported in
U.S. dollars, international revenue is favorably impacted as the U.S. dollar
weakens relative to other currencies, and unfavorably impacted as the U.S.
dollar strengthens relative to other currencies. We believe the presentation of
revenue excluding the effects from foreign exchange, in addition to reported
revenue, helps improve the ability to understand the Company's performance
because it excludes the impact of foreign currency volatility that is not
indicative of Match Group's core operating results.

Revenue excluding foreign exchange effects compares results between periods as
if exchange rates had remained constant period over period. Revenue excluding
foreign exchange effects is calculated by translating current period revenue
using prior period exchange rates. The percentage change in revenue excluding
foreign exchange effects is calculated by determining the change in current
period revenue over prior period revenue where current period revenue is
translated using prior period exchange rates.
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The following tables present the impact of foreign exchange effects on total
revenue and Direct Revenue by geographic region, and RPP on a total basis and by
geographic region, for the year ended December 31, 2021 compared to the year
ended December 31, 2020 and the year ended December 31, 2020 compared to the
year ended December 31, 2019:

                                                       Years ended December 31,                                                         Years ended December 31,
                                   2021              $ Change           % Change               2020                 2020              $ Change           % Change               2019

                                                                                                (Dollars in thousands)
Revenue, as reported          $ 2,983,277          $ 592,008               25%            $ 2,391,269          $ 2,391,269          $ 340,011               17%            $ 2,051,258
Foreign exchange effects          (35,191)                                                                           6,412
Revenue excluding foreign
exchange effects              $ 2,948,086          $ 556,817               23%            $ 2,391,269          $ 2,397,681          $ 346,423               17%            $ 2,051,258

Americas Direct Revenue, as
reported                      $ 1,512,057          $ 264,096               21%            $ 1,247,961          $ 1,247,961          $ 157,803               14%            $ 1,090,158
Foreign exchange effects           (1,471)                                                                          14,619
Americas Direct Revenue,
excluding foreign exchange
effects                       $ 1,510,586          $ 262,625               21%            $ 1,247,961          $ 1,262,580          $ 172,422               16%            $ 1,090,158

Europe Direct Revenue, as
reported                      $   821,827          $ 141,699               21%            $   680,128          $   680,128          $  95,716               16%            $   584,412
Foreign exchange effects          (33,894)                                                                          (7,551)
Europe Direct Revenue,
excluding foreign exchange
effects                       $   787,933          $ 107,805               16%            $   680,128          $   672,577          $  88,165               15%            $   584,412

APAC and Other Direct
Revenue, as reported          $   588,987          $ 172,352               41%            $   416,635          $   416,635          $  84,031               25%            $   332,604
Foreign exchange effects              917                                                                             (828)
APAC and Other Direct
Revenue, excluding foreign
exchange effects              $   589,904          $ 173,269               42%            $   416,635          $   415,807          $  83,203               25%            $   332,604


                                                   Years ended December 31,                                                      Years ended December 31,
                                  2021               $ Change           % Change            2020                2020               $ Change           % Change            2019

RPP, as reported            $    15.73             $    1.31               9%            $ 14.42          $    14.42             $    0.43               3%            $ 13.99
Foreign exchange effects         (0.19)                                                                         0.04
RPP, excluding foreign
exchange effects            $    15.54             $    1.12               8%            $ 14.42          $    14.46             $    0.47               3%            $ 13.99

Americas RPP, as reported   $    15.73             $    1.11               8%            $ 14.62          $    14.62             $    0.36               3%            $ 14.26
Foreign exchange effects         (0.01)                                                                         0.17
Americas RPP, excluding
foreign exchange effects    $    15.72             $    1.10               8%            $ 14.62          $    14.79             $    0.53               3%            $ 14.26

Europe RPP, as reported     $    15.25                     1.18            8%            $ 14.07          $    14.07                     0.53            4%            $ 13.54
Foreign exchange effects         (0.35)                                                                        (0.09)
Europe RPP, excluding
foreign exchange effects    $    14.90             $    0.83               6%            $ 14.07          $    13.98             $    0.44               4%            $ 13.54

APAC and Other RPP, as
reported                    $    16.43             $    2.02              14%            $ 14.41          $    14.41             $    0.49               4%            $ 13.92
Foreign exchange effects          0.03                                                                         (0.03)
APAC and Other RPP,
excluding foreign exchange
effects                     $    16.46             $    2.05              14%            $ 14.41          $    14.38             $    0.46               4%            $ 13.92


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              FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
Financial Position
                                                                December 31,          December 31,
                                                                    2021                  2020

                                                                          (In thousands)
Cash and cash equivalents:
United States                                                  $    642,686          $    581,038
All other countries                                                 172,698               158,126
   Total cash and cash equivalents                             $    815,384 

$ 739,164


Long-term debt, net:
Credit Facility due February 13, 2025                          $          -          $          -
Term Loan due February 13, 2027                                     425,000               425,000

5.00% Senior Notes due December 15, 2027                            450,000               450,000
4.625% Senior Notes due June 1, 2028                                500,000               500,000
5.625% Senior Notes due February 15, 2029                           350,000               350,000
4.125% Senior Notes due August 1, 2030                              500,000               500,000
3.625% Senior Notes due October 1, 2031                             500,000                     -
2022 Exchangeable Notes                                             100,500               517,500
2026 Exchangeable Notes                                             575,000               575,000
2030 Exchangeable Notes                                             575,000               575,000
   Total long-term debt                                           3,975,500             3,892,500
   Less: Current maturities of long-term debt                       100,500                     -

Less: unamortized original issue discount and original issue premium, net

                                                    5,215                 6,029
   Less: unamortized debt issuance costs                             40,364                45,541
Total long-term debt, net                                      $  3,829,421          $  3,840,930


Long-term Debt

For a detailed description of long-term debt, see "Note 7-Long-term Debt, net" to the consolidated financial statements included in "Item 8. Consolidated Financial Statements and Supplementary Data."

Cash Flow Information


In summary, the Company's cash flows from continuing operations are as follows:
                                                                      Years ended December 31,
                                                            2021                2020                 2019

                                                                          

(In thousands) Net cash provided by operating activities attributable to continuing operations

                                $ 912,499          

$ 788,552 $ 647,989 Net cash used in investing activities attributable to continuing operations

                                    (939,825)           (3,922,131)           (41,730)

Net cash provided by financing activities attributable to continuing operations

                                  111,106             1,787,846            654,024


2021

Net cash provided by operating activities attributable to continuing operations
in 2021 includes adjustments to earnings consisting primarily of $146.8 million
of stock-based compensation expense; $41.4 million of depreciation; $28.6
million of amortization of intangibles; and other adjustments of $27.7 million,
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which includes amortization of deferred financing costs of $9.0 million.
Partially offsetting these adjustments was deferred income tax benefit of $58.0
million. The increase in cash from changes in working capital primarily consists
of an increase in accounts payable and accrued expenses and other current
liabilities of $458.8 million due mainly to the timing of payments, with the
former Tinder employee litigation settlement, which is expected to be paid in
2022, being the primary component; and an increase in deferred revenue of $26.3
million, due mainly to growth in subscription sales. These increases in cash
were partially offset by an increase in accounts receivable of $34.0 million
primarily related to an increase in revenue.

Net cash used in investing activities attributable to continuing operations in
2021 consists primarily of cash used to acquire Hyperconnect, net of cash
acquired, of $859.9 million, and capital expenditures of $80.0 million that are
primarily related to internal development of software and computer hardware to
support our services.

Net cash provided by financing activities attributable to continuing operations
in 2021 is primarily due to proceeds from the settlement of certain note hedges
of $1.1 billion, partially offset by an $882.2 million outflow related to the
settlement of certain outstanding warrants, in each case associated with the
settlement of a portion of the 2022 Exchangeable Notes; proceeds of $500.0
million from the issuance of the 3.625% Senior Notes; and $58.4 million of
proceeds from the issuance of common stock pursuant to stock-based awards. These
increases in cash were partially offset by payment of $630.7 million to
repurchase a portion of the outstanding 2022 Exchangeable Notes and payment of
$15.7 million for withholding taxes paid on behalf of employees for net settled
equity awards.

2020

Net cash provided by operating activities attributable to continuing operations
in 2020 includes adjustments to earnings consisting primarily of $102.3 million
of stock-based compensation expense, $41.3 million of depreciation, $7.5 million
of amortization of intangibles; other adjustments of $27.3 million, which
includes a loss on bond redemption of $16.5 million; and deferred income tax of
$15.4 million. The increase in cash from changes in working capital primarily
consists of an increase from income taxes payable and receivable of $16.9
million due primarily to the timing of tax payments and refunds; an increase in
accounts payable and accrued expenses and other current liabilities of $24.2
million due mainly to the timing of payments, including interest payments; and
an increase in deferred revenue of $23.5 million, due mainly to growth in
subscription sales. These increases in cash were partially offset by a decrease
related to an increase in other assets of $33.2 million primarily related to an
increase in prepaid hosting services and an increase in accounts receivable of
$24.2 million primarily related to an increase in revenue.

Net cash used in investing activities attributable to continuing operations in
2020 consists primarily of $3.9 billion of net cash distributed to IAC related
to the Separation, which was partially funded by $1.4 billion of net proceeds
from the stock issuance in connection with the Separation as noted below, and
capital expenditures of $42.4 million that are primarily related to internal
development of software and computer hardware to support our services.

Net cash provided by financing activities attributable to continuing operations
in 2020 is primarily due to proceeds of $1.4 billion from the stock offering in
connection with the Separation, which were subsequently transferred to IAC as
noted above, proceeds of $1.0 billion from the issuance of the 4.125% and 4.625%
Senior Notes, partially offset by the redemption of the $400.0 million 6.375%
Senior Notes, payments of $212.0 million for withholding taxes paid on behalf of
employees for net settled equity awards of both Former Match Group and Match
Group, and purchases of treasury stock of Former Match Group of $132.9 million.

2019


Net cash provided by operating activities attributable to continuing operations
in 2019 includes adjustments to earnings consisting primarily of $89.7 million
of stock-based compensation expense, $34.4 million of depreciation, and $8.7
million of amortization of intangibles. Partially offsetting these adjustments
was deferred income tax of $12.8 million primarily related to net operating loss
created by settlement of stock-based awards. The decrease in cash from changes
in working capital primarily consists of an increase in other assets of $24.2
million primarily related to an increase in prepaid hosting services, an
increase in accounts receivable of $17.9 million primarily related to an
increase in revenue, and a decrease from income taxes payable and receivable of
$4.2 million due primarily to the timing of tax payments. These decreases in
cash were partially offset by an increase in accounts payable and accrued
expenses and other current liabilities of $33.7 million due
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mainly to the timing of payments, including interest payments, and an increase in deferred revenue of $9.5 million, due mainly to growth in subscription sales.


Net cash used in investing activities attributable to continuing operations in
2019 consists primarily of capital expenditures of $39.0 million that are
primarily related to internal development of software and computer hardware to
support our services.

Net cash provided by financing activities attributable to continuing operations
in 2019 is primarily due to $1.2 billion from the issuance of the 2026 and 2030
Exchangeable Notes, proceeds of $350.0 million from the issuance of the 5.625%
Senior Notes, and proceeds of $40.0 million from borrowings under the Credit
Facility. Partially offsetting these proceeds were cash payments of $300.0
million for the repayment of borrowings under the Credit Facility, purchases of
treasury stock of $216.4 million, $203.2 million for withholding taxes paid on
behalf of employees for net settled equity awards, and $136.9 million used to
pay the net premium on the 2026 and 2030 Exchangeable Notes hedge and warrant
transactions.

Liquidity and Capital Resources


The Company's principal sources of liquidity are its cash flows generated from
operations as well as cash and cash equivalents. At December 31, 2021,
$749.6 million was available under the Credit Facility that expires on February
13, 2025.

The Company has various obligations related to long-term debt instruments and
operating leases. For additional information on long-term debt, including a
maturity schedule and interest rates, see "Note 7-Long-term Debt, net" to the
consolidated financial statements included in "Item 8-Consolidated Financial
Statements and Supplementary Data." For additional information on the operating
leases, including a schedule of obligations by year, see "Note 13-Leases" to the
consolidated financial statements included in "Item 8-Consolidated Financial
Statements and Supplementary Data." The Company believes it has sufficient cash
flows from operations to satisfy these future obligations.

On December 1, 2021, we entered into an agreement to settle the pending,
threatened, and potential claims at issue in Rad, et al. v. IAC/InterActiveCorp,
et al. and related arbitrations for $441 million, which is expected to be paid
in 2022 utilizing cash on hand.

The Company anticipates that it will need to make capital and other expenditures
in connection with the development and expansion of its operations. The Company
expects that 2022 cash capital expenditures will be between $65 million and $75
million, a decrease from 2021 cash capital expenditures as several leasehold and
building improvements were completed in 2021.

We have entered into various purchase commitments, primarily consisting of web
hosting services. Our obligations under these various purchase commitments are
$56.0 million in 2022 and between $7.0 million and $12.5 million per year from
2023 through 2026.

The Company does not have any off-balance sheet arrangements, other than those described above, at December 31, 2021.

At December 31, 2021, all of the Company's international cash can be repatriated without significant tax consequences.


Our indebtedness could limit our ability to: (i) obtain additional financing to
fund working capital needs, acquisitions, capital expenditures, debt service, or
other requirements; and (ii) use operating cash flow to pursue acquisitions or
invest in other areas, such as developing properties and exploiting business
opportunities. The Company may need to raise additional capital through future
debt or equity financing to make additional acquisitions and investments or to
provide for greater financial flexibility. Additional financing may not be
available on terms favorable to the Company or at all.
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                   CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The following disclosure is provided to supplement the descriptions of Match
Group's accounting policies contained in "Note 2-Summary of Significant
Accounting Policies" to the consolidated financial statements included in "Item
8-Consolidated Financial Statements and Supplementary Data" in regard to
significant areas of judgment. Management of the Company is required to make
certain estimates, judgments and assumptions during the preparation of its
consolidated financial statements in accordance with U.S. generally accepted
accounting principles ("GAAP"). These estimates, judgments and assumptions
impact the reported amount of assets, liabilities, revenue and expenses and the
related disclosure of contingent assets and liabilities. Actual results could
differ from these estimates. Because of the size of the financial statement
elements to which they relate, some of our accounting policies and estimates
have a more significant impact on our consolidated financial statements than
others. What follows is a discussion of some of our more significant accounting
policies and estimates.

Business Combinations

Acquisitions are an important part of our growth strategy. The purchase price of
each acquisition is attributed to the assets acquired and liabilities assumed
based on their fair values at the date of acquisition, including identifiable
intangible assets that either arise from a contractual or legal right or are
separable from goodwill. The fair value of these intangible assets is based on
valuations that use information and assumptions provided by management. The
excess purchase price over the net tangible and identifiable intangible assets
is recorded as goodwill and is assigned to the reporting unit that is expected
to benefit from the combination as of the acquisition date.

Recoverability of Goodwill and Indefinite-Lived Intangible Assets


Goodwill is the Company's largest asset with a carrying value of $2.4 billion
and $1.3 billion at December 31, 2021 and 2020, representing 48% and 42%,
respectively, of the Company's total assets. Indefinite-lived intangible assets,
which consist of the Company's acquired trade names and trademarks, have a
carrying value of $576.7 million and $226.6 million at December 31, 2021 and
2020, respectively.

Goodwill and indefinite-lived intangible assets are assessed annually for
impairment as of October 1, or more frequently if an event occurs or
circumstances change that would more likely than not reduce the fair value of a
reporting unit or the fair value of an indefinite-lived intangible asset below
its carrying value.

In performing its annual goodwill impairment assessment, the Company has the
option under GAAP to qualitatively assess whether it is more likely than not
that the fair value of a reporting unit is less than its carrying value; if the
conclusion of the qualitative assessment is that there are no indicators of
impairment, the Company does not perform a quantitative test, which would
require a valuation of the reporting unit, as of October 1. If needed, the
annual or interim quantitative test of the recovery of goodwill involves a
comparison of the estimated fair value of each reporting unit to its carrying
value, including goodwill. If the estimated fair value of the reporting unit
exceeds its carrying value, goodwill of the reporting unit is not impaired. If
the carrying value of the reporting unit exceeds its estimated fair value, an
impairment loss equal to the excess is recorded. The 2021 and 2020 annual
assessments did not identify any impairments.

As a result of the Separation in 2020, the Company had a negative carrying value
for the Company's annual goodwill test at both October 1, 2021 and 2020.
Additionally, an impairment test of goodwill was not necessary because there
were no factors identified that would indicate an impairment loss. The Company
continued to have a negative carrying value at December 31, 2021.

While the Company has the option to qualitatively assess whether it is more
likely than not that the fair values of its indefinite-lived intangible assets
are less than their carrying values, the Company's policy is to determine the
fair value of each of its indefinite-lived intangible assets annually as of
October 1, in part, because the level of effort required to perform the
quantitative and qualitative assessments is essentially equivalent. Due to the
recent acquisition of Hyperconnect and the process to allocate the purchase
price as of the purchase date, the intangible assets of Hyperconnect were
considered qualitatively as of October 1, 2021. For assets in which a
quantitative assessment was performed, the Company determines the fair value of
its indefinite-lived intangible assets using an avoided royalty DCF valuation
analysis. Significant judgments inherent in this analysis include the selection
of appropriate royalty and discount rates and estimating the amount and timing
of expected future
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cash flows. The discount rates used in the DCF analyses are intended to reflect
the risks inherent in the expected future cash flows generated by the respective
intangible assets. The royalty rates used in the DCF analyses are based upon an
estimate of the royalty rates that a market participant would pay to license the
Company's trade names and trademarks. The future cash flows are based on the
Company's most recent forecast and budget and, for years beyond the budget, the
Company's estimates, which are based, in part, on forecasted growth rates.
Assumptions used in the avoided royalty DCF analyses, including the discount
rate and royalty rate, are assessed annually based on the actual and projected
cash flows related to the asset, as well as macroeconomic and industry specific
factors. The discount rates used in the Company's annual indefinite-lived
impairment assessment ranged from 10% to 16% in 2021 and 10% to 23% in 2020, and
the royalty rates used ranged from 5% to 8% in both 2021 and 2020.

If the carrying value of an indefinite-lived intangible asset exceeds its
estimated fair value, an impairment equal to the excess is recorded. During the
year ended December 31, 2020, the Company recognized an impairment charge
related to the Match® brand in the UK and the Meetic brand in Europe of
$4.6 million. During the year ended December 31, 2019, the Company recognized an
impairment charge on the Match brand in the UK of $6.6 million. At December 31,
2021 and 2020, no indefinite-lived intangible asset balance had an estimated
fair value less than 110% of carrying value.

Recoverability and Estimated Useful Lives of Long-Lived Assets


We review the carrying value of all long-lived assets, consisting of property
and equipment and definite-lived intangible assets, for impairment whenever
events or changes in circumstances indicate that the carrying value of an asset
may not be recoverable. The carrying value of a long-lived asset is not
recoverable if it exceeds the sum of the undiscounted cash flows expected to
result from the use and eventual disposition of the asset. If the carrying value
is deemed not to be recoverable, an impairment loss is recorded equal to the
amount by which the carrying value of the long-lived asset exceeds its fair
value. In addition, the Company reviews the useful lives of its long-lived
assets whenever events or changes in circumstances indicate that these lives may
be changed. The carrying value of property and equipment and definite-lived
intangible assets was $358.3 million and $112.1 million, at December 31, 2021
and 2020, respectively.

Income Taxes

Match Group is subject to income taxes in the United States and numerous foreign
jurisdictions. Significant judgment is required in determining our provision for
income taxes and income tax assets and liabilities, including evaluating
uncertainties in the application of accounting principles and complex tax laws.

We record a provision for income taxes for the anticipated tax consequences of
our reported results of operations using the asset and liability method. Under
this method, we recognize deferred income tax assets and liabilities for the
future tax consequences of temporary differences between the financial reporting
and tax bases of asset and liabilities, as well as for net operating loss and
tax credit carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates in effect for the year in which those temporary differences
are expected to be realized or settled. We recognize the deferred income tax
effects of a change in tax rates in the period of enactment.

A valuation allowance is provided on deferred tax assets if it is determined
that it is more likely than not that the deferred tax asset will not be
realized. We consider all available evidence, both positive and negative,
including historical levels of income, expectations and risks associated with
estimates of future taxable income, and tax planning strategies in assessing the
need for a valuation allowance.

We recognize tax benefits from uncertain tax positions only if we believe that
it is more likely than not that the tax position will be sustained based on the
technical merits of the position. Such tax benefits are measured based on the
largest benefit that has a greater than 50% likelihood of being realized upon
settlement. This measurement step is inherently difficult and requires
subjective estimations of such amounts to determine the probability of various
possible outcomes. We consider many factors when evaluating and estimating our
tax positions and tax benefits, which may require periodic adjustment. We make
adjustments to our unrecognized tax benefits when facts and circumstances
change, such as the closing of a tax audit or the refinement of an estimate.
Although we believe that we have adequately reserved for our uncertain tax
positions, the final outcome of these matters may vary significantly from our
estimates. To the extent that the final outcome of these matters is different
from the amounts recorded, such differences will affect the income tax provision
in
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the period in which such determination is made, and could have a material impact on our financial condition and operating results.

Stock-Based Compensation

The Company recorded stock-based compensation expense of $146.8 million and $102.3 million for the years ended December 31, 2021 and 2020, respectively.


Stock-based compensation at the Company is complex due to our desire to attract,
retain, and reward employees at many of our brands by allowing them to benefit
from the value they help to create. We also utilize equity awards as part of our
acquisition strategy. We accomplish these objectives, in part, by issuing equity
awards denominated in the equity of our non-public subsidiaries as well as in
Match Group, Inc. We further refine this approach by tailoring the terms of
equity awards as appropriate. For example, we issue certain equity awards with
vesting conditioned on the achievement of specified performance targets such as
revenue or profits; these awards are referred to as performance awards. In other
cases, we condition the vesting of equity awards to the achievement of value
targets for a specific subsidiary or the Company's stock price; these awards are
referred to as market-based awards.

The Company issues restricted stock units ("RSUs") and performance-based stock
units ("PSUs"). The value of RSUs with vesting subject only to continued service
is based on the fair value of Match Group common stock on the grant date. The
value of RSUs that include a market condition is based on fair value estimated
using a lattice model. The value of RSUs is expensed as stock-based compensation
expense over the applicable vesting term. For PSU grants, the expense is
measured at the grant date as the fair value of Match Group common stock and
expensed as stock-based compensation over the vesting term if the performance
targets are considered probable of being achieved.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see "Note 2-Summary of Significant Accounting Policies" to the consolidated financial statements included in "Item 8-Consolidated Financial Statements and Supplementary Data."

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