Being in the matchmaking business is apparently profitable, at least if you are Match Group (NASDAQ: MTCH). The parent company of dating sites Tinder, OK Cupid and Plenty of Fish reported its fourth quarter and full year 2018 results on Wednesday with impressive results. Total revenue in the fourth quarter grew 21 percent year-over-year, driven by 17 percent average subscriber growth and 4 percent growth in average revenue per user. Average subscribers grew to 8.2 million, compared to 7.0 million in Q4 2017. Tinder’s average subscribers were 4.3 million in the fourth quarter, growing 233,000 from the previous quarter and 1.2 million year-over-year.

Other highlights from the quarter include:

• Total revenue was $457.3 million, compared to $378.9 million, a 21 percent increase year-over-year.
• Operating income was $151.0 million, compared to $127.7 million, an 18 percent increase year-over-year.
• Operating income margin was 33 percent, compared to 34 percent in Q4 2017.
• The company reported net earnings of $115.5 million, or $0.39 earnings per share, compared to a $9.0 million loss, or $(0.03) per share, for the fourth quarter of 2017.
• Average revenue per user was $0.58, compared to $0.55 in Q4 2017, a 4 percent increase.
• On December 19, 2018, the company paid a special cash dividend of $2.00 per share on Match Group common stock and Class B common stock.
• As of December 31, 2018, the company had $187 million in cash and cash equivalents and $1.5 billion of long-term debt.

On the earnings call, transcribed by Seeking Alpha, Match Group CEO Mandy Ginsberg – who has now been with the company for a year – attributed much of the company’s recent growth to Tinder, calling it the “go-to dating app for young singles.” She was careful to point out that the company has other top brands which will serve different target audiences, including Hinge, Ship and Meetic.

“What all this tells you is that we have tremendous amount of exciting product work underway at Match Group. We are driving innovation by incubating new products, advancing our existing ones and acquiring businesses with early traction that we can supplement with our deep experience and best practices,” said Ginsberg.

“All of which provides us multiple levers to drive long-term growth. We also generate significant profitability and cash flow giving us the financial flexibility to strategically deploy capital for compelling M&A or greenfield opportunities,” Ginsberg added.

Ginsberg believes that there are many opportunities for future growth for Match because more than half of singles in the U.S. and Europe have never tried a dating app. When Tinder launched, only a third of all U.S. singles had tried a dating product, and only 16 percent of 18- to 24-year-olds had tried one in 2012. Outside North America and Europe, two out of every three singles has not used a dating app, so there is room for improvement, and Match Group has the expertise to fill those gaps. Ginsberg says the category is “large and under penetrated.”

A few opportunities to grow their audience is new apps that target specific audiences, build new features and experiences for users, and to create apps that become part of a user’s overall social experience. There are opportunities for Tinder to grow as well.

“Although Tinder is already the top grossing lifestyle app in over 100 countries around the world, we do see significant opportunity for us to further invest into growth. Tinder’s global growth happened despite the fact that we never really focused on adapting the product for different geographies or cultures,” Ginsberg said.

In 2019, the company anticipates EBITDA between $740 million and $790 million, a higher-than-2018 investment in marketing, and margins to be low in the first quarter and high in the fourth quarter. In the first quarter, Match Group predicts revenue of $455 million to $465 million and a margin of about 33 percent.

Match Group’s stock value bumped up a little since its February 6 value of $53.08. At 7:31 p.m. EST on February 7, the day after the earnings report was released, MTCH stock was valued at $55.76, a bump of $2.68.

Insider Take:

With growth in virtually every market and every category, Match Group finished 2018 with solid financials, growing subscribers, average revenue per user and revenue. With a strategic vision for reaching untapped – or under penetrated – markets, Match Group is likely to continue its upward trajectory. While Tinder may be its bread and butter, the company can take the lessons learned and apply them to other apps to solidify their place as the leader in the dating app marketplace.