Q2 2023 For Q2, we expect Total Revenue of $805 to $815 million, up 1% to 3% Y/Y compared to Q2 ‘22. We expect FX to be a little more than a one-point Y/Y headwind to Total Revenue. For Tinder, we expect Direct Revenue to be up low single digits Y/Y over Q2 ‘22, with FX representing a one-point Y/Y headwind. On a sequential basis, we expect Tinder Direct Revenue to be up low-to-mid single digits. We expect Tinder Payers to decline Y/Y, impacted by several ongoing trends and initiatives, particularly pricing optimizations. As mentioned earlier, Tinder extensively tested a number of price variants in the U.S. and ultimately selected a higher price point, which we expect will maximize revenue but cause a significant reduction in Payers. Tinder intends to test various price points internationally beginning in Q2. At Hinge, we expect meaningfully accelerating Y/Y Direct Revenue growth in Q2 as the overall business momentum, the impact of the new subscription tiers, and the European expansion continue to deliver incremental revenue.
Across MG Asia, we expect moderating Y/Y declines in Direct Revenue at both Pairs and Hyperconnect, driven by ongoing initiatives and product improvements at each of the three apps. On an FXN basis, we expect MG Asia’s Direct Revenue to be essentially flat Y/Y. Within E&E, we expect similar Y/Y Direct Revenue trends as in the first quarter of 2023. For Q2, we expect AOI of $275 to 280 million, with a margin of 34% at the mid-point of the range. We expect to increase marketing spend Y/Y, driven by increases at Tinder to fund its ongoing brand campaign, at Hinge as it continues to expand into new markets, at The League, and at our new dating app which we plan to launch this summer. We expect to incur approximately $4 million in severance and similar costs in Q2. As has been the case for the past several quarters, we will continue to be judicious with spending across the remainder
FY 2023 As we start to see the benefits of the work at Tinder, we remain confident that the Company’s Total Revenue and Tinder Direct Revenue can both exit 2023 with double digit Y/Y growth. The lower than initially expected first half of 2023 business performance may contribute to full year Match Group Total Revenue and Tinder Direct Revenue growth rates closer to the low end of our previously communicated ranges of 5% to 10% Y/Y. That said, we’ve already seen improved momentum in April and there are numerous initiatives in flight that could drive incremental growth this year, so we are eager to see how those progress. Note that we estimate $17 million more of Y/Y FX headwinds for Q2 to Q4 than we anticipated at the time of our last earnings call. We also remain committed to delivering flat or better AOI margin for the full year.
