Match Group, Inc. (Form: 10-Q, Received: 11/09/2018 07:49:11)

As filed with the Securities and Exchange Commission on November 9, 2018

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2018
Or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________to__________

Commission File No. 001-37636

Match Group, Inc.

(Exact name of registrant as specified in its charter)



Delaware (State or other jurisdiction of incorporation or organization)		26-4278917 (I.R.S. Employer Identification No.)
8750 North Central Expressway, Suite 1400, Dallas, Texas 75231 (Address of registrant’s principal executive offices)
(214) 576-9352 (Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer ý	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o	Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

As of November 2, 2018 , the following shares of the registrant’s common stock were outstanding:



Common Stock	68,166,729
Class B Common Stock	209,919,402
Class C Common Stock	—
Total outstanding Common Stock	278,086,131

The aggregate market value of the voting common stock held by non-affiliates of the registrant as of November 2, 2018 was $2,729,358,644 . For the purpose of the foregoing calculation only, shares held by IAC/InterActiveCorp and all directors and executive officers of the registrant are assumed to be shares held by affiliates of the registrant.

TABLE OF CONTENTS



		Page Number
PART I
Item 1.	Consolidated Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42
Item 4.	Controls and Procedures	43
PART II
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 6.	Exhibits	48
	Signatures	49

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

MATCH GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET (Unaudited)



	September 30, 2018			December 31, 2017
	(In thousands, except share data)
ASSETS
Cash and cash equivalents	$	402,598		$	272,624
Accounts receivable, net of allowance of $735 and $778, respectively	138,167			116,751
Other current assets	66,902			55,369
Total current assets	607,667			444,744
Property and equipment, net of accumulated depreciation and amortization of $113,068 and $108,860, respectively	57,286			61,620
Goodwill	1,252,745			1,247,644
Intangible assets, net of accumulated amortization of $11,663 and $11,653, respectively	235,827			230,345
Deferred income taxes	145,263			123,199
Long-term investments	10,169			11,137
Other non-current assets	15,798			11,457
TOTAL ASSETS	$	2,324,755		$	2,130,146
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Accounts payable	$	12,103		$	10,112
Deferred revenue	221,884			198,095
Accrued expenses and other current liabilities	139,086			110,566
Total current liabilities	373,073			318,773
Long-term debt, net	1,255,088			1,252,696
Income taxes payable	6,638			8,410
Deferred income taxes	28,272			28,478
Other long-term liabilities	12,947			14,484
Redeemable noncontrolling interests	—			6,056
Commitments and contingencies
SHAREHOLDERS’ EQUITY
Common stock, $0.001 par value, authorized 1,500,000,000 shares; 70,520,034 and 64,370,470 shares issued, and 68,507,434 and 64,370,470 shares outstanding at September 30, 2018 and December 31, 2017, respectively	71			64
Class B convertible common stock; $0.001 par value; authorized 1,500,000,000 shares; 209,919,402 shares issued and outstanding	210			210
Class C common stock; $0.001 par value; authorized 1,500,000,000 shares; no shares issued and outstanding	—			—
Preferred stock; $0.001 par value; authorized 500,000,000 shares; no shares issued and outstanding	—			—
Additional paid-in capital	(48,582		)	81,082
Retained earnings	894,606			532,211
Accumulated other comprehensive loss	(121,814		)	(112,318		)
Treasury stock 2,012,600 and 0 shares, respectively	(86,239		)	—
Total Match Group, Inc. shareholders’ equity	638,252			501,249
Noncontrolling interests	10,485			—
Total shareholders’ equity	648,737			501,249
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,324,755		$	2,130,146

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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MATCH GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(In thousands, except per share data)
Revenue	$	443,943		$	343,418		$	1,272,506		$	951,754
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	107,512			72,044			298,790			193,557
Selling and marketing expense	108,374			94,870			316,806			289,706
General and administrative expense	45,187			49,940			130,113			137,721
Product development expense	34,027			27,008			98,531			73,089
Depreciation	8,513			8,147			25,059			23,619
Amortization of intangibles	435			401			914			1,208
Total operating costs and expenses	304,048			252,410			870,213			718,900
Operating income	139,895			91,008			402,293			232,854
Interest expense	(18,376		)	(19,548		)	(54,458		)	(57,570		)
Other income (expense), net	894			(9,925		)	4,677			(25,453		)
Earnings from continuing operations, before tax	122,413			61,535			352,512			149,831
Income tax benefit	5,537			226,236			6,474			214,039
Net earnings from continuing operations	127,950			287,771			358,986			363,870
Loss from discontinued operations, net of tax	(378		)	(85		)	(378		)	(4,647		)
Net earnings	127,572			287,686			358,608			359,223
Net loss (earnings) attributable to noncontrolling interests	2,587			2			3,787			(52		)
Net earnings attributable to Match Group, Inc. shareholders	$	130,159		$	287,688		$	362,395		$	359,171

Net earnings per share from continuing operations:
Basic	$	0.47		$	1.08		$	1.31		$	1.39
Diluted	$	0.44		$	0.98		$	1.22		$	1.22
Net earnings per share attributable to Match Group, Inc. shareholders:
Basic	$	0.47		$	1.08		$	1.31		$	1.38
Diluted	$	0.44		$	0.98		$	1.22		$	1.21

Stock-based compensation expense by function:
Cost of revenue	$	493		$	430		$	1,768		$	1,246
Selling and marketing expense	745			1,146			2,526			3,253
General and administrative expense	8,567			12,669			23,817			35,740
Product development expense	6,336			5,704			21,699			13,388
Total stock-based compensation expense	$	16,141		$	19,949		$	49,810		$	53,627

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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MATCH GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS (Unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(In thousands)
Net earnings	$	127,572		$	287,686		$	358,608		$	359,223
Other comprehensive (loss) income, net of tax
Change in foreign currency translation adjustment	(871		)	33,750			(9,616		)	68,440
Total other comprehensive (loss) income	(871		)	33,750			(9,616		)	68,440
Comprehensive income	126,701			321,436			348,992			427,663
Comprehensive loss (income) attributable to noncontrolling interests	2,640			(273		)	3,907			(592		)
Comprehensive income attributable to Match Group, Inc. shareholders	$	129,341		$	321,163		$	352,899		$	427,071

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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MATCH GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (Unaudited)

Nine Months Ended September 30, 2018



				Match Group Shareholders’ Equity
				Common Stock $0.001 Par Value			Class B Convertible Common Stock $0.001 Par Value
	Redeemable Noncontrolling Interests			$		Shares	$		Shares	Additional Paid-in Capital			Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Total Match Group Shareholders’ Equity			Noncontrolling Interests			Total Shareholders’ Equity
				(In thousands)
Balance as of December 31, 2017	$	6,056		$	64	64,370	$	210	209,919	$	81,082		$	532,211	$	(112,318	)	$	—		$	501,249		$	—		$	501,249
Net earnings (loss) for the nine months ended September 30, 2018	109			—		—	—		—	—			362,395		—			—			362,395			(3,896		)	358,499
Other comprehensive loss, net of tax	(120		)	—		—	—		—	—			—		(9,496		)	—			(9,496		)	—			(9,496		)
Stock-based compensation expense	—			—		—	—		—	49,675			—		—			—			49,675			135			49,810
Issuance of common stock pursuant to stock-based awards, net of withholding taxes	—			4		3,596	—		—	(181,878		)	—		—			—			(181,874		)	—			(181,874		)
Issuance of common stock to IAC pursuant to the employee matters agreement	—			3		2,554	—		—	(3		)	—		—			—			—			—			—
Purchase of treasury stock	—			—		—	—		—	—			—		—			(86,239		)	(86,239		)	—			(86,239		)
Purchase of redeemable noncontrolling interests	(3,503		)	—		—	—		—	—			—		—			—			—			—			—
Adjustment of redeemable noncontrolling interests to fair value	(2,542		)	—		—	—		—	2,542			—		—			—			2,542			—			2,542
Noncontrolling interests created in an acquisition	—			—		—	—		—	—			—		—						—			14,246			14,246
Balance as of September 30, 2018	$	—		$	71	70,520	$	210	209,919	$	(48,582	)	$	894,606	$	(121,814	)	$	(86,239	)	$	638,252		$	10,485		$	648,737

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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MATCH GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)



	Nine Months Ended September 30,
	2018			2017
	(In thousands)
Cash flows from operating activities attributable to continuing operations:
Net earnings from continuing operations	$	358,986		$	363,870
Adjustments to reconcile net earnings from continuing operations to net cash provided by operating activities attributable to continuing operations:
Stock-based compensation expense	49,810			53,627
Depreciation	25,059			23,619
Amortization of intangibles	914			1,208
Deferred income taxes	(23,821		)	(239,796		)
Acquisition-related contingent consideration fair value adjustments	265			4,397
Other adjustments, net	(100		)	16,578
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable	(21,456		)	(42,902		)
Other assets	(22,059		)	(8,984		)
Accounts payable and other liabilities	32,167			15,399
Income taxes payable and receivable	1,233			11,923
Deferred revenue	24,245			30,717
Net cash provided by operating activities attributable to continuing operations	425,243			229,656
Cash flows from investing activities attributable to continuing operations:
Net cash acquired in a business combination	1,136			—
Capital expenditures	(21,280		)	(21,638		)
Proceeds from the sale of a business, net	—			96,144
Purchases of investments	(3,000		)	(9,076		)
Other, net	39			41
Net cash (used in) provided by investing activities attributable to continuing operations	(23,105		)	65,471
Cash flows from financing activities attributable to continuing operations:
Term Loan borrowings	—			75,000
Debt issuance costs	—			(1,814		)
Proceeds from issuance of common stock pursuant to stock-based awards	—			57,705
Withholding taxes paid on behalf of employees on net settled stock-based awards	(181,756		)	(228,978		)
Purchase of treasury stock	(86,239		)	—
Purchase of redeemable noncontrolling interests	(3,503		)	(436		)
Purchase of stock-based awards	—			(272,459		)
Acquisition-related contingent consideration payments	(185		)	(23,429		)
Other, net	(616		)	(165		)
Net cash used in financing activities attributable to continuing operations	(272,299		)	(394,576		)
Total cash provided by (used in) continuing operations	129,839			(99,449		)
Net cash used in operating activities attributable to discontinued operations	—			(6,061		)
Net cash used in investing activities attributable to discontinued operations	—			(471		)
Total cash used in discontinued operations	—			(6,532		)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	133			9,923
Net increase (decrease) in cash, cash equivalents, and restricted cash	129,972			(96,058		)
Cash, cash equivalents, and restricted cash at beginning of period	272,761			253,771
Cash, cash equivalents, and restricted cash at end of period	$	402,733		$	157,713

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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MATCH GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1—THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Match Group, Inc. is a leading provider of subscription dating products servicing North America, Western Europe, Asia, and many other regions around the world through applications and websites that we own and operate. We operate a portfolio of brands, including Tinder, Match, PlentyOfFish, Meetic, OkCupid, OurTime, and Pairs as well as a number of other brands, each designed to increase our users’ likelihood of finding a meaningful connection. Through our portfolio of trusted brands, we provide tailored products to meet the varying preferences of our users. We currently offer our dating products in 42 languages across more than 190 countries. Match Group has one operating segment, Dating, which is managed as a portfolio of dating brands.

As of September 30, 2018 , IAC/InterActiveCorp’s (“IAC”) economic ownership interest and voting interest in Match Group were 80.9% and 97.5% , respectively.

All references to “Match Group,” the “Company,” “we,” “our,” or “us” in this report are to Match Group, Inc.

Basis of Presentation and Consolidation

The Company prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”).

The consolidated financial statements include the accounts of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. All intercompany transactions and balances between and among the Company, its subsidiaries and the entities comprising Match Group have been eliminated.

Investments in equity securities, other than those of our consolidated subsidiaries, are accounted for at fair value or under the measurement alternative of Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , upon its adoption on January 1, 2018, with changes recognized within other income (expense), net each reporting period. Under the measurement alternative, equity investments without readily determinable fair values are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Under the measurement alternative, the value of our equity securities without readily determinable fair values is generally determined based on a market approach as of the transaction date. An investment will be considered identical or similar if it has identical or similar rights to the equity investments held by the Company. The Company reviews impairment of our equity securities each reporting period when there are qualitative indicators that may indicate impairment. Once the qualitative indicators are identified and the fair value of the security is less than its carrying value, the Company will write down the security to its fair value and record the corresponding charge within other income (expense), net. See “ Accounting Pronouncements adopted by the Company ” below for further information.

In management’s opinion, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and reflect, in management’s opinion, all adjustments, consisting of normal and recurring adjustments, necessary for the fair presentation of our financial position, results of operations and cash flows for the periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year. The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated and combined statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 .

For the purposes of these financial statements, income taxes have been computed for Match Group on an as if stand-alone, separate tax return basis.

Accounting Estimates

Management of the Company is required to make certain estimates, judgments, and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates, judgments, and

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MATCH GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

assumptions impact the reported amounts of assets, liabilities, revenue, and expenses and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates.

On an ongoing basis, the Company evaluates its estimates and judgments including those related to: the recoverability of goodwill and indefinite-lived intangible assets; the useful lives and recoverability of definite-lived intangible assets and property and equipment; the fair values of equity securities without readily determinable fair values; the carrying value of accounts receivable, including the determination of the allowance for doubtful accounts; the determination of revenue reserves; the fair value of acquisition-related contingent consideration arrangements; unrecognized tax benefits; the valuation allowance for deferred income tax assets; and the fair value of and forfeiture rates for stock-based awards, among others. The Company bases its estimates and judgments on historical experience, its forecasts and budgets and other factors that the Company considers relevant.

Recent Accounting Pronouncements

Accounting Pronouncements adopted by the Company

In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers . ASU No. 2014-09 superseded nearly all previous revenue recognition guidance. The Company adopted ASU No. 2014-09 as of January 1, 2018 using the modified retrospective transition method for open contracts as of the date of initial application. There is no cumulative impact to the Company’s retained earnings at January 1, 2018. See “ Note 2—Revenue Recognition ” for additional information on the impact to the Company.

In January 2016, the FASB issued ASU No. 2016-01, which updates certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Under ASU No. 2016-01, equity securities, other than those of our consolidated subsidiaries, will be measured at fair value with changes in fair value recognized in the statement of operations each reporting period. ASU No. 2016-01 is effective for reporting periods beginning after December 15, 2017. The Company’s adoption of ASU No. 2016-01 effective January 1, 2018 did not have a material effect on its consolidated financial statements. The adoption of ASU No. 2016-01 may increase the volatility of our results of operations as a result of the remeasurement of these investments.

In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which requires companies to explain the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. Therefore, amounts generally described as restricted cash or restricted cash equivalents are combined with unrestricted cash and cash equivalents when reconciling the beginning and end of period balances on the statement of cash flows. Additionally, when cash, cash equivalents, restricted cash, and restricted cash equivalents are presented within different captions on the balance sheet, a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet is required. ASU No. 2016-18 is effective for reporting periods beginning after December 15, 2017. The Company’s adoption of ASU No. 2016-18 effective January 1, 2018, on a retrospective basis, did not have a material effect on its consolidated financial statements.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheet to the total amounts shown in the consolidated statement of cash flows:



	September 30, 2018		December 31, 2017		September 30, 2017		December 31, 2016
	(In thousands)
Cash and cash equivalents	$	402,598	$	272,624	$	157,576	$	253,651
Restricted cash included in other current assets	135		137		137		120
Total cash, cash equivalents and restricted cash as shown on the consolidated statement of cash flow	$	402,733	$	272,761	$	157,713	$	253,771

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MATCH GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting , which largely aligns the measurement and classification guidance for share-based payments granted to non-employees with the guidance for share-based payments granted to employees. The new guidance supersedes Subtopic 505-50, Equity - Equity-Based payments to Nonemployees . ASU No. 2018-07 is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company adopted ASU No. 2018-07 effective April 1, 2018 and its adoption did not have a material effect on its consolidated financial statements. The effect of the adoption of ASU No. 2018-07 will be to minimize the volatility of expense related to stock-based awards to non-employees in the future.

Accounting Pronouncement not yet adopted by the Company

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which supersedes existing guidance on accounting for leases and generally requires all leases to be recognized in the statement of financial position. The provisions of ASU No. 2016-02 are effective for reporting periods beginning after December 15, 2018. The Company will adopt the new lease guidance effective January 1, 2019. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects to implement the transition method option provided by ASU No. 2018-11.

The Company is not a lessor, has no capitalized leases, and does not expect to enter into any capitalized leases prior to the adoption of ASU No. 2016-02. Accordingly, the Company does not expect the amount or classification of rent expense in its statement of operations to be affected by the adoption of ASU No. 2016-02. The primary effect of the adoption of ASU No. 2016-02 will be the recognition of a right of use asset and related liability to reflect the Company's rights and obligations under its operating leases. The Company will also be required to provide the additional disclosures stipulated in ASU No. 2016-02.

The adoption of ASU No. 2016-02 will not have an impact on the leverage calculation set forth in any of the agreements governing the outstanding debt of the Company, or our credit agreement, because in each circumstance, the leverage calculations are not affected by the liability that will be recorded upon adoption of the new standard.

While the Company's evaluation of the impact of the adoption of ASU No. 2016-02 on its consolidated financial statements continues, outlined below is a summary of the status of the Company's progress:


•	the Company has selected a software solution to implement ASU No. 2016-02;


•	the Company has input lease summaries into the software solution;


•	the Company is assessing the other inputs required in connection with the adoption of ASU No. 2016-02; and


•	the Company is developing its accounting policy, procedures and internal controls related to the new standard.

Development of our selected software solution is ongoing, as it is not yet fully compliant with the requirements of ASU No. 2016-02. The timely readiness of the software solution is critical to ensure an efficient and effective adoption of ASU No. 2016-02. The Company's ability to calculate an estimate of the right of use asset and related liability is dependent upon the readiness of the software solution.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

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MATCH GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

NOTE 2—REVENUE RECOGNITION

Revenue Recognition

The Company accounts for a contract when it has approval and commitment from all parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the promised services is transferred to our customers, and in an amount that reflects the consideration the Company is contractually due in exchange for those services.

The Company’s revenue is primarily derived directly from users in the form of recurring subscriptions. Subscription revenue is presented net of credits and credit card chargebacks. Subscribers pay in advance, primarily by credit card or through mobile app stores, and, subject to certain conditions identified in our terms and conditions, generally all purchases are final and nonrefundable. Revenue is initially deferred and is recognized using the straight-line method over the term of the applicable subscription period, which primarily range from one to six months. Revenue is also earned from online advertising, the purchase of à la carte features and offline events. Online advertising revenue is recognized when an advertisement is displayed. Revenue from the purchase of à la carte features is recognized based on usage. Revenue associated with offline events is recognized when each event occurs.

As permitted under the practical expedient available under ASU No. 2014-09, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which the Company recognizes revenue at the amount which we have the right to invoice for services performed.

Transaction Price

The objective of determining the transaction price is to estimate the amount of consideration the Company is due in exchange for services, including amounts that are variable. The Company determines the total transaction price, including an estimate of any variable consideration, at contract inception and reassesses this estimate each reporting period.

The Company excludes from the measurement of transaction price all taxes assessed by governmental authorities that are both (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers. Accordingly, such tax amounts are not included as a component of revenue or cost of revenue.

For contracts that have an original duration of one year or less, the Company uses the practical expedient available under ASU No. 2014-09 applicable to such contracts and does not consider the time value of money.

Accounts Receivables, net of allowance for doubtful accounts and revenue reserves

Accounts receivable include amounts billed and currently due from customers. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of accounts receivables that will not be collected. The allowance for doubtful accounts is based upon a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history, and the specific customer’s ability to pay its obligation. The time between the Company issuance of an invoice and payment due date is not significant, customer payments that are not collected in advance of the transfer of promised services are generally due no later than 30 days from invoice date. The Company also maintains allowances to reserve for potential credits issued to consumers or other revenue adjustments. The amounts of these reserves are based primarily upon historical experience.

Deferred Revenue

Deferred revenue consists of advance payments that are received or due in advance of the Company's performance. The Company’s deferred revenue is reported on a contract by contract basis at the end of each

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reporting period. The Company generally classifies deferred revenue as current when the term of the applicable subscription period or expected completion of our performance obligation is one year or less. The deferred revenue balance as of January 1, 2018 was $198.3 million . During the nine months ended September 30, 2018 , the Company recognized $191.6 million of revenue that was included in the deferred revenue balance as of January 1, 2018. The deferred revenue balance as of June 30, 2018 was $212.6 million . During the three months ended September 30, 2018 , the Company recognized $157.4 million of revenue that was included in the deferred revenue balance as of June 30, 2018. The current deferred revenue balance at September 30, 2018 is $221.9 million . At September 30, 2018 , there is no non-current portion of deferred revenue.

Assets Recognized from the Costs to Obtain a Contract with a Customer

The Company has determined that certain costs, primarily mobile app store fees, meet the requirements to be capitalized as a cost of obtaining a contract. The Company recognizes an asset for these costs if we expect to recover those costs. Mobile app store fees are amortized over the period of contract performance. The Company capitalizes and amortizes mobile app store fees over the term of the applicable subscription. During the three and nine months ended September 30, 2018 , the Company recognized expense of $75.0 million and $205.4 million , respectively, related to the amortization of these costs. The contract asset balance at September 30, 2018 related to costs to obtain a contract is $30.1 million and included in “Other current assets” in the accompanying consolidated balance sheet.

Disaggregation of Revenue

The following table presents disaggregated revenue:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(In thousands)
Direct Revenue:
North America	$	233,643	$	186,868	$	667,163	$	540,701
International	197,902		143,230		564,846		376,572
Total Direct Revenue	431,545		330,098		1,232,009		917,273
Indirect Revenue (principally advertising revenue)	12,398		13,320		40,497		34,481
Total Revenue	$	443,943	$	343,418	$	1,272,506	$	951,754

NOTE 3—INCOME TAXES

Match Group is included within IAC’s tax group for purposes of federal and consolidated state income tax return filings. In all periods presented, current income tax provision and deferred income tax benefit have been computed for Match Group on an as if stand-alone, separate return basis. Match Group’s payments to IAC for its share of IAC’s consolidated federal and state tax return liabilities have been reflected within cash flows from operating activities in the accompanying consolidated statement of cash flows.

At the end of each interim period, the Company makes its best estimate of the annual expected effective income tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to significant, unusual, or extraordinary items, if applicable, that will be separately reported or reported net of their related tax effects are individually computed and recognized in the interim period in which they occur. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of beginning-of-the-year deferred tax assets in future years or unrecognized tax benefits is recognized in the interim period in which the change occurs.

The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (and/or loss) earned and taxed in foreign jurisdictions, permanent and

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temporary differences, and the likelihood of the realization of deferred tax assets generated in the current year. The accounting estimates used to compute the provision or benefit for income taxes may change as new events occur, more experience is acquired, additional information is obtained or our tax environment changes. To the extent that the expected annual effective income tax rate changes during a quarter, the effect of the change on prior quarters is included in income tax provision in the quarter in which the change occurs.

For the three and nine months ended September 30, 2018 , the Company recorded an income tax benefit from continuing operations of $5.5 million and $6.5 million , respectively, due primarily to excess tax benefits generated by the exercise and vesting of stock-based awards and research credits, partially offset by state income taxes. For the three and nine months ended September 30, 2017 , the Company recorded an income tax benefit from continuing operations of $226.2 million and $214.0 million , respectively, due to excess tax benefits generated by the exercise and vesting of stock-based awards.

On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act subjected to U.S. taxation certain previously deferred earnings of foreign subsidiaries as of December 31, 2017 (“Transition Tax”) and implemented a number of changes that took effect on January 1, 2018, including but not limited to, a reduction of the U.S. federal corporate tax rate from 35% to 21% and a new minimum tax on global intangible low-taxed income (“GILTI”) earned by foreign subsidiaries. The Company was able to make a reasonable estimate of the Transition Tax and recorded a provisional tax expense in the fourth quarter of 2017. In the third quarter of 2018, the Company finalized this calculation, which resulted in a $3.2 million reduction in the Transition Tax. The net reduction in the Transition Tax was due primarily to the utilization of additional foreign tax credits, partially offset by additional taxable earnings and profits of our foreign subsidiaries based on recently issued Internal Revenue Service (“IRS”) guidance. The adjustment of the Company’s provisional tax expense was recorded as a change in estimate in accordance with Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act , which is also included in ASU No. 2018-05, Income Taxes (Topic 740), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“SAB 118”), which was issued and adopted by the Company in March 2018. Despite the completion of the Company’s accounting for the Tax Act under SAB 118, many aspects of the law remain unclear and we expect ongoing guidance to be issued at both the federal and state levels. We will continue to monitor and assess the impact of any new developments.

The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision. Accruals for interest and penalties are not material.

Match Group is routinely under audit by federal, state, local and foreign authorities in the area of income tax as a result of previously filed separate company tax returns and consolidated tax returns with IAC. These audits include questioning the timing and the amount of income and deductions and the allocation of income and deductions among various tax jurisdictions. The IRS is currently auditing IAC’s federal income tax returns for the years ended December 31, 2010 through 2016, which includes the operations of Match Group. The statute of limitations for the years 2010 through 2012 has been extended to December 31, 2019, and the statute of limitations for the years 2013 through 2014 has been extended to March 31, 2019. Various other jurisdictions are open to examination for tax years beginning with 2009. Income taxes payable include unrecognized tax benefits considered sufficient to pay assessments that may result from examination of prior year tax returns. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may not accurately anticipate actual outcomes and, therefore, may require periodic adjustments. Although management currently believes changes in unrecognized tax benefits from period to period and differences between amounts paid, if any, upon resolution of issues raised in audits and amounts previously provided will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.

At September 30, 2018 and December 31, 2017 , unrecognized tax benefits, including interest and penalties, are $28.1 million and $26.8 million , respectively. At September 30, 2018 and December 31, 2017 , approximately $20.5 million and $17.6 million , respectively, was included in unrecognized tax benefits for tax positions included in IAC’s consolidated tax return filings. If unrecognized tax benefits at September 30, 2018 are subsequently recognized, $26.5 million , net of related deferred tax assets and interest, would reduce income tax expense. The

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

comparable amount as of December 31, 2017 was $25.3 million . The Company believes that it is reasonably possible that its unrecognized tax benefits could decrease by $9.3 million by September 30, 2019, due to expirations of statutes of limitations; all of which would reduce the income tax provision.

The Company regularly assesses the realizability of deferred tax assets considering all available evidence including, among other things, the nature, frequency and severity of prior cumulative losses, forecasts of future taxable income, the duration of statutory carryforward periods, available tax planning and historical experience, to the extent these items are applicable. As of September 30, 2018 , the Company has a gross deferred tax asset of $154.7 million that the Company expects to fully utilize on a more likely than not basis.

NOTE 4—DISCONTINUED OPERATIONS

On March 31, 2017, Match Group sold its Non-dating business, which operated under the umbrella of The Princeton Review, to ST Unitas, a global education technology company. We recognized additional loss on the sale of the business of $0.4 million for the three and nine months ended September 30, 2018 . We recognized a loss on the sale of the business of $1.2 million for the nine months ended September 30, 2017, which is reported within discontinued operations.

The key components of loss from discontinued operations for the three and nine months ended September 30, 2017 consist of the following:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(In thousands)
Revenue	$	—		$	—		$	—		$	23,980
Operating costs and expenses	—			—			—			(29,601		)
Operating loss	—			—			—			(5,621		)
Other expense	(378		)	(168		)	(378		)	(1,171		)
Income tax benefit	—			83			—			2,145
Loss from discontinued operations	$	(378	)	$	(85	)	$	(378	)	$	(4,647	)

NOTE 5—FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

The Company categorizes its financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are:


•	Level 1: Observable inputs obtained from independent sources, such as quoted market prices for identical assets and liabilities in active markets.

•

Level 2: Other inputs, which are observable directly or indirectly, such as quoted market prices for similar assets or liabilities in active markets, quoted market prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data. The fair values of the Company’s Level 2 financial assets are primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case an average market price is used.


•	Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the assets or liabilities. See below for a discussion of fair value measurements made using Level 3 inputs.

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The following tables present the Company’s financial instruments that are measured at fair value on a recurring basis:



	September 30, 2018
	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total Fair Value Measurements
	(In thousands)
Assets:
Cash equivalents:
Money market funds	$	150,576	$	—	$	—		$	150,576
Time deposits	—		35,000		—			35,000
Total	$	150,576	$	35,000	$	—		$	185,576

Liabilities:
Contingent consideration arrangements	$	—	$	—	$	(1,980	)	$	(1,980	)



	December 31, 2017
	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total Fair Value Measurements
	(In thousands)
Assets:
Cash equivalents:
Money market funds	$	71,197	$	—	$	—		$	71,197
Time deposits	—		35,023		—			35,023
Total	$	71,197	$	35,023	$	—		$	106,220

Liabilities:
Contingent consideration arrangements	$	—	$	—	$	(2,647	)	$	(2,647	)

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The Company’s financial instruments that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are its contingent consideration arrangements.



	Three Months Ended September 30,
	2018			2017
	(In thousands)
Balance at July 1	$	(1,910	)	$	(24,829	)
Total net losses:
Fair value adjustments	(55		)	(59		)
Included in other comprehensive loss	(15		)	(333		)
Settlements	—			23,429
Balance at September 30	$	(1,980	)	$	(1,792	)



	Nine Months Ended September 30,
	2018			2017
	(In thousands)
Balance at January 1	$	(2,647	)	$	(19,418	)
Total net losses:
Fair value adjustments	(265		)	(4,397		)
Included in other comprehensive loss	(16		)	(1,406		)
Settlements	948			23,429
Balance at September 30	$	(1,980	)	$	(1,792	)

Contingent consideration arrangements

As of September 30, 2018 , there are two contingent consideration arrangements related to business acquisitions. One of the contingent consideration arrangements has limits as to the maximum amount that can be paid. The maximum contingent payment related to this arrangement and the gross fair value of this arrangement, before the unamortized discount, at September 30, 2018 , is $2.0 million . No payment is expected for the other contingent consideration arrangement, which does not have a limit on the maximum earnout.

The current contingent consideration arrangements are based upon earnings performance. Previous contingent consideration arrangements were based upon earnings performance and/or operating metrics. The Company determined the fair value of the current contingent consideration arrangement for which a payment is expected by using probability-weighted analyses to determine the amount of the gross liability. For arrangements that are long-term in nature, a discount rate is applied, to appropriately capture the risks associated with the obligation to determine the net amount reflected in the consolidated financial statements. The fair values of the contingent consideration arrangements at both September 30, 2018 and December 31, 2017 reflect a discount rate of 12% .

The fair value of contingent consideration arrangements is sensitive to changes in the forecasts of earnings and changes in discount rates. The Company remeasures the fair value of contingent consideration arrangements each reporting period, including the accretion of the discount, if applicable, and changes are recognized in “General and administrative expense” in the accompanying consolidated statement of operations. The contingent consideration arrangement liability at September 30, 2018 and December 31, 2017 includes a current portion of $2.0 million and $0.6 million , respectively, which is included in “Accrued expenses and other current liabilities” and a non-current portion of $2.0 million at December 31, 2017, which is included in “Other long-term liabilities” in the accompanying consolidated balance sheet. At September 30, 2018 , there is no non-current portion of the contingent consideration liability.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

Equity securities without readily determinable fair values

At September 30, 2018 and December 31, 2017 , the carrying values of the Company’s investments in equity securities without readily determinable fair values totaled $10.2 million and $11.1 million , respectively, and are included in “Long-term investments” in the accompanying consolidated balance sheet. Following the adoption of the measurement alternative under ASU No. 2016-01 on January 1, 2018, the Company’s equity securities without readily determinable fair values are carried at cost minus impairment minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

For all equity securities without readily determinable fair values as of September 30, 2018 , the Company has elected the measurement alternative. As of September 30, 2018 , under the measurement alternative election, the Company did not identify any fair value adjustments using observable price changes in orderly transactions for an identical or similar investment of the same issuer. During the first quarter of 2017, prior to the adoption of ASU No. 2016-01, we recognized an other-than-temporary impairment charge of $2.3 million related to certain cost method investments as a result of our assessment of the near-term prospects and financial condition of the investees. This charge is recognized in “other income (expense), net” in the accompanying consolidated statement of operations.

Assets measured at fair value on a nonrecurring basis

The Company’s non-financial assets, such as goodwill, intangible assets and property and equipment, are adjusted to fair value only when an impairment charge is recognized. The Company’s financial assets, comprising of equity securities without readily determinable fair values, are adjusted to fair value when observable price changes are identified or an impairment charge is recognized. Such fair value measurements are based predominantly on Level 3 inputs.

Financial instruments measured at fair value only for disclosure purposes

The following table presents the carrying value and the fair value of financial instruments measured at fair value only for disclosure purposes.



	September 30, 2018						December 31, 2017
	Carrying Value			Fair Value			Carrying Value			Fair Value
	(In thousands)
Long-term debt, net ^(a)	$	(1,255,088	)	$	(1,299,070	)	$	(1,252,696	)	$	(1,320,289	)

______________________


(a)	At September 30, 2018 and December 31, 2017 , the carrying value of long-term debt, net includes unamortized original issue discount and debt issuance costs of $19.9 million and $22.3 million , respectively.

The fair value of long-term debt, net is estimated using observable market prices or indices for similar liabilities, which are Level 2 inputs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

NOTE 6—LONG-TERM DEBT

Long-term debt consists of:



	September 30, 2018		December 31, 2017
	(In thousands)
Term Loan due November 16, 2022 (the “Term Loan”)	$	425,000	$	425,000
6.375% Senior Notes due June 1, 2024 (the “2016 Senior Notes”); interest payable each June 1 and December 1	400,000		400,000
5.00% Senior Notes due December 15, 2027 (the “2017 Senior Notes”); interest payable each June 15 and December 15	450,000		450,000
Total debt	1,275,000		1,275,000
Less: Unamortized original issue discount	7,681		8,668
Less: Unamortized debt issuance costs	12,231		13,636
Total long-term debt, net	$	1,255,088	$	1,252,696

Senior Notes :

The 2017 Senior Notes were issued on December 4, 2017 at 99.027% of par. The proceeds of $445.6 million , along with cash on hand, were used to redeem the 6.75% Senior Notes due December 15, 2022 and pay the related call premium. At any time prior to December 15, 2022, these notes may be redeemed at a redemption price equal to the sum of the principal amount, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes. Thereafter, these notes may be redeemed at redemption prices set forth in the indenture governing the 2017 Senior Notes, together with accrued and unpaid interest to the applicable redemption date.

The 2016 Senior Notes were issued on June 1, 2016. The proceeds of $400 million were used to prepay a portion of indebtedness then outstanding under the Term Loan. At any time prior to June 1, 2019, these notes may be redeemed at a redemption price equal to the sum of the principal amount, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes. Thereafter, these notes may be redeemed at redemption prices set forth in the indenture governing the 2016 Senior Notes, together with accrued and unpaid interest to the applicable redemption date.

The indentures governing the 2017 and 2016 Senior Notes contain covenants that would limit the Company’s ability to pay dividends or to make distributions and repurchase or redeem Match Group stock in the event a default has occurred or Match Group’s leverage ratio (as defined in the indentures) exceeds 5.0 to 1.0. The 2017 and 2016 Senior Notes rate equally in right of payment. At September 30, 2018 , there were no limitations pursuant thereto. There are additional covenants that limit the ability of the Company and its subsidiaries to, among other things, (i) incur indebtedness, make investments, or sell assets in the event the Company is not in compliance with certain financial ratios set forth in the indentures, and (ii) incur liens, enter into agreements restricting the ability of the Company’s subsidiaries to pay dividends, enter into transactions with affiliates and consolidate, merge or sell substantially all of their assets.

Term Loan and Credit Facility :

The Company entered into the Term Loan under a credit agreement (the “Credit Agreement”) on November 16, 2015. At both September 30, 2018 and December 31, 2017, the outstanding balance on the Term Loan was $425 million and the loan bears interest at LIBOR plus 2.50% . The interest rate of the Term Loan was 4.67% and 3.85% at September 30, 2018 and December 31, 2017, respectively. Interest payments are due at least quarterly through the term of the loan. The Term Loan provides for annual principal payments as part of an excess cash flow sweep provision, the amount of which, if any, is governed by the secured net leverage ratio contained in the Credit Agreement.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

As of September 30, 2018 , the Company has a $500 million revolving credit facility (the “Credit Facility”) that expires on October 7, 2020. At September 30, 2018 and December 31, 2017 , there were no outstanding borrowings under the Credit Facility. The annual commitment fee on undrawn funds based on the current leverage ratio is 25 basis points. Borrowings under the Credit Facility bear interest, at the Company’s option, at a base rate or LIBOR, in each case plus an applicable margin, which is determined by reference to a pricing grid based on the Company’s consolidated net leverage ratio. The terms of the Credit Facility require the Company to maintain a consolidated net leverage ratio of not more than 5.0 to 1.0 and a minimum interest coverage ratio of not less than 2.5 to 1.0 (in each cash as defined in the agreement).

There are additional covenants under the Credit Facility and the Term Loan that limit the ability of the Company and its subsidiaries to, among other things, incur indebtedness, pay dividends or make distributions. While the Term Loan remains outstanding, these same covenants under the Credit Agreement are more restrictive than the covenants that are applicable to the Credit Facility. Obligations under the Credit Facility and Term Loan are unconditionally guaranteed by certain Match Group wholly-owned domestic subsidiaries, and are also secured by the stock of certain Match Group domestic and foreign subsidiaries. The Term Loan and outstanding borrowings, if any, under the Credit Facility rank equally with each other, and have priority over the 2017 and 2016 Senior Notes to the extent of the value of the assets securing the borrowings under the Credit Agreement.

NOTE 7—ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table presents the components of accumulated other comprehensive loss and items reclassified out of accumulated other comprehensive loss into earnings. For the three and nine months ended September 30, 2018 and 2017 , the Company’s accumulated other comprehensive loss relates to foreign currency translation adjustments.



	Three Months Ended September 30,
	2018			2017
	(In thousands)
Balance at July 1	$	(120,996	)	$	(141,959	)
Other comprehensive (loss) income	(818		)	33,475
Balance at September 30	$	(121,814	)	$	(108,484	)



	Nine Months Ended September 30,
	2018			2017
	(In thousands)
Balance at January 1	$	(112,318	)	$	(176,384	)
Other comprehensive (loss) income before reclassifications	(9,496		)	67,186
Amounts reclassified into earnings	—			714
Net period other comprehensive (loss) income	(9,496		)	67,900
Balance at September 30	$	(121,814	)	$	(108,484	)

The amount reclassified out of accumulated other comprehensive loss into earnings for the nine months ended September 30, 2017 relates to the liquidation of an international subsidiary.

At both September 30, 2018 and 2017 , there was no tax benefit or provision on the accumulated other comprehensive loss.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

NOTE 8—EARNINGS PER SHARE

The following tables set forth the computation of the basic and diluted earnings per share attributable to Match Group shareholders:



	Three Months Ended September 30,
	2018						2017
	Basic			Diluted			Basic			Diluted
	(In thousands, except per share data)
Numerator
Net earnings from continuing operations	$	127,950		$	127,950		$	287,771		$	287,771
Net loss attributable to noncontrolling interests	2,587			2,587			2			2
Net earnings from continuing operations attributable to Match Group, Inc. shareholders	130,537			130,537			287,773			287,773
Loss from discontinued operations, net of tax	(378		)	(378		)	(85		)	(85		)
Net earnings attributable to Match Group, Inc. shareholders	$	130,159		$	130,159		$	287,688		$	287,688

Denominator
Basic weighted average common shares outstanding	277,492			277,492			267,487			267,487
Dilutive securities including stock options, RSU awards, and subsidiary denominated equity ^(a)(b)	—			19,297			—			25,573
Dilutive weighted average common shares outstanding	277,492			296,789			267,487			293,060

Earnings (loss) per share:
Earnings per share from continuing operations	$	0.47		$	0.44		$	1.08		$	0.98
Loss per share from discontinued operations, net of tax	$	0.00		$	0.00		$	0.00		$	0.00
Earnings per share attributable to Match Group, Inc. shareholders	$	0.47		$	0.44		$	1.08		$	0.98

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)



	Nine Months Ended September 30,
	2018						2017
	Basic			Diluted			Basic			Diluted
	(In thousands, except per share data)
Numerator
Net earnings from continuing operations	$	358,986		$	358,986		$	363,870		$	363,870
Net loss (earnings) attributable to noncontrolling interests	3,787			3,787			(52		)	(52		)
Net earnings from continuing operations attributable to Match Group, Inc. shareholders	362,773			362,773			363,818			363,818
Loss from discontinued operations, net of tax	(378		)	(378		)	(4,647		)	(4,647		)
Net earnings attributable to Match Group, Inc. shareholders	$	362,395		$	362,395		$	359,171		$	359,171

Denominator
Basic weighted average common shares outstanding	276,634			276,634			260,876			260,876
Dilutive securities including stock options, RSU awards, and subsidiary denominated equity ^(a)(b)	—			20,683			—			36,431
Dilutive weighted average common shares outstanding	276,634			297,317			260,876			297,307

Earnings (loss) per share:
Earnings per share from continuing operations	$	1.31		$	1.22		$	1.39		$	1.22
Loss per share from discontinued operations, net of tax	$	0.00		$	0.00		$	(0.02	)	$	(0.02	)
Earnings per share attributable to Match Group, Inc. shareholders	$	1.31		$	1.22		$	1.38		$	1.21

______________________

(a)

If the effect is dilutive, weighted average common shares outstanding include the incremental shares that would be issued upon the assumed exercise of stock options and subsidiary denominated equity or vesting of restricted stock units (“RSUs”). For each of the three and nine months ended September 30, 2018 , 0.1 million potentially dilutive securities and for the three and nine months ended September 30, 2017 , 2.9 million and 4.4 million , respectively, are excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

(b)

Market-based awards and performance-based stock options (“PSOs”) and units (“PSUs”) are considered contingently issuable shares. Shares issuable upon exercise or vesting of market-based awards, PSOs, and PSUs are included in the denominator for earnings per share if (i) the applicable market or performance condition(s) has been met and (ii) the inclusion of the market-based awards, PSOs and PSUs is dilutive for the respective reporting periods. For each of the three and nine months ended September 30, 2018 , 1.0 million shares underlying market-based awards, PSOs, and PSUs, and for each of the three and nine months ended September 30, 2017 , 4.5 million shares underlying market-based awards, PSOs, and PSUs, respectively, were excluded from the calculation of diluted earnings per share because the market or performance conditions had not been met.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

NOTE 9—CONTINGENCIES

In the ordinary course of business, the Company is a party to various lawsuits. The Company establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has also identified certain other legal matters where we believe an unfavorable outcome is not probable and, therefore, no reserve is established. Although management currently believes that resolving claims against us, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. The Company also evaluates other contingent matters, including income and non-income tax contingencies, to assess the likelihood of an unfavorable outcome and estimated extent of potential loss. It is possible that an unfavorable outcome of one or more of these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company. See “ Note 3—Income Taxes ” for additional information related to income tax contingencies.

NOTE 10—RELATED PARTY TRANSACTIONS

Relationship with IAC

In connection with the IPO in November 2015, the Company entered into certain agreements relating to our relationship with IAC after the IPO. These agreements include a master transaction agreement; an investor rights agreement; a tax sharing agreement; a services agreement; an employee matters agreement and a subordinated loan agreement.

For the three and nine months ended September 30, 2018 , the Company incurred $1.9 million and $5.6 million , respectively, and for the three and nine months ended September 30, 2017 , the Company incurred $2.6 million and $7.9 million , respectively, pursuant to the services agreement. Included in these amounts for the three and nine months ended September 30, 2018 is $1.3 million and $3.9 million , respectively, and for the three and nine months ended September 30, 2017 is $1.2 million and $3.8 million , respectively, for the leasing of office space for certain of our businesses at properties owned by IAC. All such amounts were paid in full by the Company at September 30, 2018 .

The master transaction agreement provides, among other things, that the Company will indemnify IAC for matters relating to any business of the Company. Under this provision, the Company may be required to indemnify IAC for costs related to the lawsuit brought by current and former employees of the Tinder business against IAC and the Company.

The employee matters agreement provides, among other things, that: (i) with respect to equity awards denominated in shares of certain of the Company’s subsidiaries, IAC may elect to cause such equity awards to be settled in either shares of IAC common stock or Company common stock and, to the extent that shares of IAC common stock are issued in settlement of such equity awards, the Company will reimburse IAC for the cost of such shares of IAC common stock by issuing to IAC additional shares of Company common stock; and (ii) the Company will reimburse IAC for the cost of any IAC equity awards held by the Company’s employees and former employees and that IAC may elect to receive payment either in cash or Company common stock.

During the nine months ended September 30, 2018 and 2017 , 2.6 million and 11.1 million shares, respectively, of Company common stock were issued to IAC pursuant to the employee matters agreement. This includes 2.2 million and 10.6 million shares, respectively, issued during the nine months ended September 30, 2018 and 2017 , as reimbursement for shares of IAC common stock issued in connection with the exercise of equity awards originally denominated in shares of a subsidiary of the Company and 0.4 million and 0.5 million shares, respectively, during the nine months ended September 30, 2018 and 2017 , issued as reimbursement for shares of IAC common stock issued in connection with the exercise and vesting of IAC equity awards held by Company employees.

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MATCH GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

Relationship with others

On August 10, 2018, Gregory R. Blatt resigned as a director of the Company and entered into an advisory agreement with the Company, pursuant to which he will advise the Company on matters relating to its business, strategy and operations. The term of the advisory agreement will end on February 29, 2020. Pursuant to their terms, Mr. Blatt’s outstanding stock options will remain exercisable and continue to vest, as applicable, as long as he continues to perform services for the Company.

NOTE 11—SUBSEQUENT EVENT

On November 6, 2018, the Board of Directors declared a special cash dividend of $2.00 per share on Match Group common stock and Class B common stock, payable on December 19, 2018, to stockholders of record as of the close of business on December 5, 2018. Based on the Company’s current shares outstanding, the total amount of this dividend will be approximately $560 million . The special dividend will be funded with cash on hand and incremental debt, as necessary.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

GENERAL

Key Terms:

When the following terms appear in this report, they have the meanings indicated below:

Dating - consists of all of our dating businesses globally.

Non-dating - consists of The Princeton Review, which was sold on March 31, 2017, the financial results of which have been presented as discontinued operations.

Operating metrics:


•	North America - consists of the financial results and metrics associated with users located in the United States and Canada.


•	International - consists of the financial results and metrics associated with users located outside of the United States and Canada.


•	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 products, substantially all of which is advertising revenue.


•	Subscribers - are users who purchase a subscription to one of our products. Users who purchase only à la carte features are not included in Subscribers.


•	Average Subscribers - is the number of Subscribers at the end of each day in the relevant measurement period divided by the number of calendar days in that period.

•

Average Revenue per Subscriber (“ARPU”) - is Direct Revenue from Subscribers in the relevant measurement period (whether in the form of subscription or à la carte revenue) divided by the Average Subscribers in such period and further divided by the number of calendar days in such period. Direct Revenue from users who are not Subscribers and have purchased only à la carte features is not included in ARPU.

Operating costs and expenses:

•

Cost of revenue - consists primarily 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, 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 product features through the in-app payment systems provided by Apple and Google, as required by Apple, and to a lesser degree, Google.

•

Selling and marketing expense - consists primarily of advertising expenditures and compensation expense (including stock-based compensation expense) and other employee-related costs for 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 product offerings and related technology.

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•

Acquisition-related contingent consideration fair value adjustments - relate to the portion of the purchase price of certain acquisitions that is contingent upon the future earnings performance and/or operating metrics of the acquired company. The fair value of the liability is estimated at the date of acquisition and adjusted each reporting period until the liability is settled. Significant changes in forecasted earnings and/or operating metrics will result in a significantly higher or lower fair value measurement. The changes in the estimated fair value of the contingent consideration arrangements during each reporting period, including the accretion of the discount if the arrangement is longer than one year, are recognized in “General and administrative expense” in the accompanying consolidated statement of operations.

Long-term debt:


•	Term Loan - The Company’s seven-year term loan entered into on November 16, 2015. At September 30, 2018 , $425 million is outstanding and the current interest rate is 4.67% (LIBOR plus 2.50% ).


•	2015 Senior Notes - The Company’s previously outstanding 6.75% Senior Notes issued on November 16, 2015 and redeemed in full on December 17, 2017 using the proceeds from the 2017 Senior Notes and cash on hand.


•	2016 Senior Notes - The Company’s 6.375% Senior Notes due June 1, 2024, with interest payable each June 1 and December 1, which were issued on June 1, 2016. At September 30, 2018 , $400 million is outstanding.


•	2017 Senior Notes - The Company’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. The proceeds, along with cash on hand, were used to redeem the 2015 Senior Notes and pay the related call premium. At September 30, 2018 , $450 million is outstanding.

Non-GAAP financial measure:


•	Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) - is a Non-GAAP financial measure. See “Principles of Financial Reporting” for the definition of Adjusted EBITDA.

Management Overview

Match Group, Inc. (“Match Group,” the “Company,” “we,” “our,” or “us”) is a leading provider of subscription dating products servicing North America, Western Europe, Asia, and many other regions around the world through applications and websites that we own and operate. We operate a portfolio of brands, including Tinder, Match, PlentyOfFish, Meetic, OkCupid, OurTime, and Pairs as well as a number of other brands, each designed to increase our users’ likelihood of finding a meaningful connection. Through our portfolio of trusted brands, we provide tailored products to meet the varying preferences of our users. We currently offer our dating products in 42 languages across more than 190 countries.

For a more detailed description of the Company’s operating businesses, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 .

2018 Developments

On November 6, 2018, the Board of Directors declared a special cash dividend of $2.00 per share on Match Group common stock and Class B common stock, payable on December 19, 2018, to stockholders of record as of the close of business on December 5, 2018. The special dividend will be funded with cash on hand and incremental debt, as necessary.

Additional Information

Investors and others should note that we announce material financial and operational information to our investors using our investor relations website at https://ir.mtch.com , Securities and Exchange Commission (“SEC”) filings, press releases and public conference calls. We use these channels as well as social media to communicate with our users and the public about our company, our services and other issues. It is possible that the information we post on social media could be deemed to be material information. Accordingly, investors, the

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media, and others interested in our company should monitor the social media channels listed on our investor relations website in addition to following our SEC filings, press releases and public conference calls. Neither the information on our website, nor the information on the website of any Match Group business, is incorporated by reference into this report, or into any other filings with, or into any other information furnished or submitted to, the SEC.

Third Quarter and Year to Date September 30, 2018 Consolidated Results

For the three months ended September 30, 2018 compared to the three months ended September 30, 2017 , revenue, operating income, and Adjusted EBITDA grew 29% , 54% , and 38% , respectively, primarily due to strong contributions from Tinder. The operating income and adjusted EBITDA growth was due primarily to both higher revenue and lower selling and marketing expense as a percentage of revenue due to the continued shift toward brands with relatively lower marketing spend as a percentage of revenue, partially offset by an increase in cost of revenue, primarily due to in-app purchase fees as our revenues are increasingly sourced through mobile app stores. Operating income was further impacted by lower stock-based compensation expense as a percentage of revenue.

For the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 , revenue, operating income, and Adjusted EBITDA grew 34% , 73% , and 52% , respectively, primarily due to the factors described above in the three-month discussion.

The launch of Tinder Gold in the third quarter of 2017 led to increased revenue growth in the fourth quarter of 2017 through year-to-date 2018. We expect the growth rate of Tinder revenue to moderate in future quarters as the comparable prior year periods fully reflect the impact of Tinder Gold. In 2019 and beyond, we also expect an increase in legal and other expenses related to compliance with an increasingly shifting regulatory landscape, as well as the lawsuit brought by current and former employees of the Tinder business against IAC and the Company, which we believe is without merit and intend to vigorously defend against.

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Results of Operations for the three and nine months ended September 30, 2018 compared to the three and nine months ended September 30, 2017

Revenue



	Three Months Ended September 30,								Nine Months Ended September 30,
	2018		$ Change			% Change	2017		2018		$ Change		% Change	2017
	(In thousands, except ARPU)
Direct Revenue:
North America	$	233,643	$	46,775		25%	$	186,868	$	667,163	$	126,462	23%	$	540,701
International	197,902		54,672			38%	143,230		564,846		188,274		50%	376,572
Total Direct Revenue	431,545		101,447			31%	330,098		1,232,009		314,736		34%	917,273
Indirect Revenue	12,398		(922		)	(7)%	13,320		40,497		6,016		17%	34,481
Total Revenue	$	443,943	$	100,525		29%	$	343,418	$	1,272,506	$	320,752	34%	$	951,754

Percentage of Total Revenue:
Direct Revenue:
North America	53%						54%		53%					57%
International	44%						42%		44%					39%
Total Direct Revenue	97%						96%		97%					96%
Indirect Revenue	3%						4%		3%					4%
Total Revenue	100%						100%		100%					100%

Average Subscribers:
North America	4,278		663			18%	3,615		4,129		643		18%	3,486
International	3,812		868			29%	2,944		3,622		915		34%	2,707
Total	8,090		1,531			23%	6,559		7,751		1,558		25%	6,193

(Change calculated using non-rounded numbers)
ARPU:
North America	$	0.59				6%	$	0.56	$	0.58			4%	$	0.56
International	$	0.55				7%	$	0.52	$	0.56			13%	$	0.50
Total	$	0.57	$	0.03		6%	$	0.54	$	0.57	$	0.04	7%	$	0.53

For the three months ended September 30, 2018 compared to the three months ended September 30, 2017

International Direct Revenue grew $54.7 million , or 38% , in 2018 versus 2017, primarily driven by 29% growth in Average Subscribers and a 7% increase in ARPU. North America Direct Revenue grew $46.8 million , or 25% , in 2018 versus 2017, driven by 18% growth in Average Subscribers and 6% growth in ARPU.

Growth in International and North America Average Subscribers was primarily driven by Tinder. International and North America ARPU increased primarily due to increases in ARPU at Tinder as Subscribers purchased premium subscriptions, such as Tinder Gold, as well as additional à la carte features. International ARPU was unfavorably impacted from the strength of the U.S. dollar relative to certain volatile currencies.

Indirect Revenue decreased $0.9 million primarily due to lower impressions at brands excluding Tinder.

For the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017

International Direct Revenue grew $188.3 million , or 50% , in 2018 versus 2017, primarily driven by 34% growth in Average Subscribers and a 13% increase in ARPU. North America Direct Revenue grew $126.5 million , or 23% , in 2018 versus 2017, driven by 18% growth in Average Subscribers and 4% growth in ARPU.

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The increases are primarily due to the factors described above in the three-month discussion. International ARPU for the year-to-date period benefited from the weakness of the U.S. dollar relative to other currencies.

Indirect Revenue increased $6.0 million primarily due to increased advertising revenue at Tinder.

Cost of revenue (exclusive of depreciation)

For the three months ended September 30, 2018 compared to the three months ended September 30, 2017



	Three Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
Cost of revenue	$107,512	$35,468	49%	$72,044
Percentage of revenue	24%			21%

Cost of revenue increased primarily due to an increase in in-app purchase fees of $32.3 million as revenues are increasingly sourced through mobile app stores.

For the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017



	Nine Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
Cost of revenue	$298,790	$105,233	54%	$193,557
Percentage of revenue	23%			20%

Cost of revenue increased primarily due to the factor described above in the three-month discussion.

Selling and marketing expense

For the three months ended September 30, 2018 compared to the three months ended September 30, 2017



	Three Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
Selling and marketing expense	$108,374	$13,504	14%	$94,870
Percentage of revenue	24%			28%

Selling and marketing expense increased in total but declined as a percentage of revenue. The increase in selling and marketing expense is primarily due to marketing investments at both Pairs and OkCupid, and the acquisition of Hinge in the second quarter of 2018. As a percentage of revenue, selling and marketing expense decreased due primarily to the ongoing shift towards brands with relatively lower marketing spend.

For the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017



	Nine Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
Selling and marketing expense	$316,806	$27,100	9%	$289,706
Percentage of revenue	25%			30%

Selling and marketing expense increased in total but declined as a percentage of revenue. The increase in selling and marketing expense is primarily due to marketing investments at Tinder, Pairs, OkCupid, and Meetic and the acquisition of Hinge, partially offset by lower offline marketing at Match.

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General and administrative expense

For the three months ended September 30, 2018 compared to the three months ended September 30, 2017



	Three Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
General and administrative expense	$45,187	$(4,753)	(10)%	$49,940
Percentage of revenue	10%			15%

General and administrative expense decreased driven primarily by a decrease of $4.1 million in stock-based compensation due primarily to a decrease in expense related to a subsidiary denominated equity award issued to a non-employee (which was settled in the third quarter of 2017).

For the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017



	Nine Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
General and administrative expense	$130,113	$(7,608)	(6)%	$137,721
Percentage of revenue	10%			14%

General and administrative expense decreased driven primarily by the factor described above in the three-month discussion and a decrease in the acquisition-related contingent consideration expense of $4.1 million. Partially offsetting these decreases is an increase of $6.4 million in compensation, excluding stock-based compensation.

Product development expense

For the three months ended September 30, 2018 compared to the three months ended September 30, 2017



	Three Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
Product development expense	$34,027	$7,019	26%	$27,008
Percentage of revenue	8%			8%

Product development expense increased driven primarily by an increase of $6.4 million in compensation, of which $5.8 million relates primarily to higher headcount at Tinder and $0.6 million relates to stock-based compensation expense.

For the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017



	Nine Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
Product development expense	$98,531	$25,442	35%	$73,089
Percentage of revenue	8%			8%

Product development expense increased driven primarily due to the factors described above in the three-month discussion.

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Depreciation

For the three months ended September 30, 2018 compared to the three months ended September 30, 2017



	Three Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
Depreciation	$8,513	$366	4%	$8,147
Percentage of revenue	2%			2%

Depreciation increased driven by an increase in computer software as we continue to grow our business.

For the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017



	Nine Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
Depreciation	$25,059	$1,440	6%	$23,619
Percentage of revenue	2%			2%

Depreciation increased primarily due to the factor described above in the three-month discussion and an increase in computer hardware.

Operating income and Adjusted EBITDA



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018	$ Change	% Change	2017	2018	$ Change	% Change	2017
	(Dollars in thousands)
Operating income	$139,895	$48,887	54%	$91,008	$402,293	$169,439	73%	$232,854
Percentage of revenue	32%			27%	32%			24%

Adjusted EBITDA	$165,039	$45,475	38%	$119,564	$478,341	$162,636	52%	$315,705
Percentage of revenue	37%			35%	38%			33%

For a reconciliation of net earnings attributable to Match Group, Inc. shareholders to Adjusted EBITDA, see “Principles of Financial Reporting.”

For the three months ended September 30, 2018 compared to the three months ended September 30, 2017

Operating income and Adjusted EBITDA increased 54% and 38% , respectively, primarily driven by revenue growth at Tinder and reduced operating expenses as a percentage of revenue, excluding an increase in cost of revenue due to in-app purchase fees as revenues are increasingly sourced through mobile app stores. Operating income was further impacted by lower stock-based compensation as a percentage of revenue resulting in increased growth compared to Adjusted EBITDA.

At September 30, 2018 , there was $130.5 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 2.6 years.

For the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017

Operating income and Adjusted EBITDA increased 73% and 52% , respectively, primarily due to the factors described above in the three-month discussion.

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Interest expense

For the three months ended September 30, 2018 compared to the three months ended September 30, 2017



	Three Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
Interest expense	$18,376	$(1,172)	(6)%	$19,548

Interest expense decreased primarily due to the issuance of the 2017 Senior Notes which replaced the 2015 Senior Notes at a lower interest rate, partially offset by an increase in the weighted average interest rate of the Term Loan and an increase in the outstanding balance of the Term Loan during the third quarter of 2017.

For the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017



	Nine Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
Interest expense	$54,458	$(3,112)	(5)%	$57,570

Interest expense decreased primarily due to the factors described above in the three-month discussion.

Other income (expense), net

For the three months ended September 30, 2018 compared to the three months ended September 30, 2017



	Three Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
Other income (expense), net	$894	$10,819	NM	$(9,925)

________________________

NM = not meaningful

Other income, net, in 2018 includes interest income of $1.3 million.

Other expense, net, in 2017 includes expenses of $6.8 million in net foreign currency exchange losses, $1.5 million related to a mark-to-market adjustment pertaining to a subsidiary denominated equity award and $2.1 million related to the repricing of the Term Loan.

For the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017



	Nine Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
Other income (expense), net	$4,677	$30,130	NM	$(25,453)

Other income, net, in 2018 includes interest income of $3.3 million and $2.7 million in net foreign currency exchange gains due primarily to a strengthening of the U.S. dollar relative to the British Pound in the period, partially offset by $1.3 million related to a mark-to-market adjustment pertaining to a subsidiary denominated equity instrument.

Other expense, net, in 2017 includes $12.2 million related to a mark-to-market adjustment pertaining to a subsidiary denominated equity award, $10.3 million in foreign currency exchange losses, and a $2.3 million other-than-temporary impairment charge related to a certain cost method investment as a result of our assessment of the prospects and financial condition of the investee and $2.1 million related to the repricing of the Term Loan.

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Income tax benefit

For the three months ended September 30, 2018 compared to the three months ended September 30, 2017



	Three Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
Income tax benefit	$5,537	$(220,699)	(98)%	$226,236
Effective income tax rate	NM			NM

The income tax benefit in 2018, despite pre-tax income, is due primarily to excess tax benefits generated by the exercise and vesting of stock-based awards and research credits, partially offset by state income taxes.

On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act subjected to U.S. taxation certain previously deferred earnings of foreign subsidiaries as of December 31, 2017 (“Transition Tax”) and implemented a number of changes that took effect on January 1, 2018, including but not limited to, a reduction of the U.S. federal corporate tax rate from 35% to 21% and a new minimum tax on global intangible low-taxed income (“GILTI”) earned by foreign subsidiaries. The Company was able to make a reasonable estimate of the Transition Tax and recorded a provisional tax expense in the fourth quarter of 2017. In the third quarter of 2018, the Company finalized this calculation, which resulted in a $3.2 million reduction in the Transition Tax. The net reduction in the Transition Tax was due primarily to the utilization of additional foreign tax credits, partially offset by additional taxable earnings and profits of our foreign subsidiaries based on recently issued IRS guidance. The adjustment of the Company’s provisional tax expense was recorded as a change in estimate in accordance with Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act , which is also included in ASU No. 2018-05, Income Taxes (Topic 740), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“SAB 118”), which was issued and adopted by the Company in March 2018. Despite the completion of the Company’s accounting for the Tax Act under SAB 118, many aspects of the law remain unclear and we expect ongoing guidance to be issued at both the federal and state levels. We will continue to monitor and assess the impact of any new developments.

The income tax benefit in 2017, despite pre-tax income, was due primarily to excess tax benefits generated by the exercise and vesting of stock-based awards.

For the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017



	Nine Months Ended September 30,
	2018	$ Change	% Change	2017
	(Dollars in thousands)
Income tax benefit	$6,474	$(207,565)	(97)%	$214,039
Effective income tax rate	NM			NM

The income tax benefits in 2018 and 2017 are due primarily to the factors described above in the three-month discussion.

For further details of income tax matters see “ Note 3—Income Taxes ” to the consolidated financial statements included in “Item 1—Consolidated Financial Statements.”

Related party transactions

For discussions of related party transactions see “ Note 10—Related Party Transactions ” to the consolidated financial statements included in “Item 1—Consolidated Financial Statements.”

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PRINCIPLES OF FINANCIAL REPORTING

Match Group reports Adjusted EBITDA and Revenue excluding foreign exchange effects, both of which are supplemental measures to U.S. generally accepted accounting principles (“GAAP”). The Adjusted EBITDA measure 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, and we are obligated to provide, 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 measures with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measures. We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures, which we discuss below.

Adjusted EBITDA

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) 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 EBITDA measure because they are non-cash in nature. Adjusted EBITDA has certain limitations in that it does not take into account the impact to our consolidated statement of operations of certain expenses.

Non-Cash Expenses That Are Excluded From Non-GAAP Measure

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 stock-based awards are settled on a net basis, the Company remits the required tax-withholding amounts from its 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 an 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 acquired indefinite-lived intangible assets, which comprise trade names and trademarks, and goodwill that 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.

Gains and losses recognized on changes in the fair value of contingent consideration arrangements are accounting adjustments to report contingent consideration liabilities at fair value. These adjustments can be highly variable and are excluded from our assessment of performance because they are considered non-operational in nature and, therefore, are not indicative of current or future performance or the ongoing cost of doing business.

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The following table reconciles net earnings attributable to Match Group, Inc. shareholders to Adjusted EBITDA:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(In thousands)
Net earnings attributable to Match Group, Inc. shareholders	$	130,159		$	287,688		$	362,395		$	359,171
Add back:
Net (loss) earnings attributable to noncontrolling interests	(2,587		)	(2		)	(3,787		)	52
Loss from discontinued operations, net of tax	378			85			378			4,647
Income tax benefit	(5,537		)	(226,236		)	(6,474		)	(214,039		)
Other (income) expense, net	(894		)	9,925			(4,677		)	25,453
Interest expense	18,376			19,548			54,458			57,570
Operating Income	139,895			91,008			402,293			232,854
Stock-based compensation expense	16,141			19,949			49,810			53,627
Depreciation	8,513			8,147			25,059			23,619
Amortization of intangibles	435			401			914			1,208
Acquisition-related contingent consideration fair value adjustments	55			59			265			4,397
Adjusted EBITDA	$	165,039		$	119,564		$	478,341		$	315,705

Effects of Changes in Foreign Exchange Rates on Revenue

The impact of foreign exchange rates on the Company, due to its global reach, 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 foreign currencies, and unfavorably impacted as the U.S. dollar strengthens relative to other foreign 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 table presents the impact of foreign exchange on total revenue and International ARPU for the three and nine months ended September 30, 2018 compared to the three and nine months ended September 30, 2017 , respectively:



	Three Months Ended September 30,
	2018		$ Change		% Change	2017
	(Dollars in thousands, except ARPU)
Revenue, as reported	$	443,943	$	100,525	29%	$	343,418
Foreign exchange effects	8,020
Revenue excluding foreign exchange effects	$	451,963	$	108,545	32%	$	343,418

(Percentage change calculated using non-rounded numbers)
International ARPU, as reported	$	0.55			7%	$	0.52
Foreign exchange effects	0.02
International ARPU, excluding foreign exchange effects	$	0.57			11%	$	0.52



	Nine Months Ended September 30,
	2018			$ Change		% Change	2017
	(Dollars in thousands, except ARPPU)
Revenue, as reported	$	1,272,506		$	320,752	34%	$	951,754
Foreign exchange effects	(16,998		)
Revenue excluding foreign exchange effects	$	1,255,508		$	303,754	32%	$	951,754

(Percentage change calculated using non-rounded numbers)
International ARPPU, as reported	$	0.56				13%	$	0.50
Foreign exchange effects	(0.02		)
International ARPPU, excluding foreign exchange effects	$	0.54				9%	$	0.50

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FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

Financial Position



	September 30, 2018		December 31, 2017
	(In thousands)
Cash and cash equivalents:
United States	$	268,439	$	203,452
All other countries ^(a)	134,159		69,172
Total cash and cash equivalents	402,598		272,624

Long-term debt:
Term Loan due November 16, 2022	$	425,000	$	425,000
2016 Senior Notes	400,000		400,000
2017 Senior Notes	450,000		450,000
Total long-term debt	1,275,000		1,275,000
Less: Unamortized original issue discount	7,681		8,668
Less: Unamortized debt issuance costs	12,231		13,636
Total long-term debt, net	$	1,255,088	$	1,252,696

______________________

(a)

All of the Company’s international cash has been subjected to U.S. income taxes due to either the Transition Tax or tax on GILTI imposed by the Tax Act, and accordingly could be repatriated without significant additional tax. The Company currently does not anticipate a need to repatriate these funds to finance our U.S. operations and it is the Company's intent to indefinitely reinvest these funds outside of the U.S.

Senior Notes:

On December 4, 2017, we issued $450 million of 2017 Senior Notes due December 15, 2027 at 99.027% of par. The proceeds, along with cash on hand, were used to redeem the 2015 Senior Notes and pay the related call premium.

On June 1, 2016, we issued $400 million aggregate principal amount of 2016 Senior Notes due June 1, 2024.

Neither Match Group nor any of its subsidiaries guarantee any debt of IAC, or are subject to any of the covenants related to such debt.

Term Loan and Credit Facility:

The Company entered into the Term Loan under a credit agreement (the “Credit Agreement”) on November 16, 2015. At September 30, 2018 , the outstanding balance on the Term Loan is $425 million and the current interest rate is 4.67% (LIBOR plus 2.50% ). Interest payments are due at least quarterly through the term of the loan. The Term Loan provides for annual principal payments as part of an excess cash flow sweep provision, the amount of which, if any, is governed by the secured net leverage ratio contained in the Credit Agreement.

The Company has a $500 million revolving credit facility (the “Credit Facility”) that expires on October 7, 2020. At September 30, 2018 , there were no outstanding borrowings under the Credit Facility. The annual commitment fee on undrawn funds based on the current leverage ratio is 25 basis points. Borrowings under the

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Credit Facility bear interest, at the Company’s option, at a base rate or LIBOR, in each case plus an applicable margin, which is determined by reference to a pricing grid based on the Company’s consolidated net leverage ratio. The terms of the Credit Facility require the Company to maintain a consolidated net leverage ratio of not more than 5.0 to 1.0 and a minimum interest coverage ratio of not less than 2.5 to 1.0 (in each case as defined in the agreement).

There are additional covenants under the Credit Facility and the Term Loan that limit the ability of the Company and its subsidiaries to, among other things, incur indebtedness, pay dividends, or make distributions. While the Term Loan remains outstanding, these same covenants under the Credit Agreement are more restrictive than the covenants that are applicable to the Credit Facility. Obligations under the Credit Facility and Term Loan are unconditionally guaranteed by certain Match Group wholly-owned domestic subsidiaries, and are also secured by the stock of certain Match Group domestic and foreign subsidiaries. The Term Loan and outstanding borrowings, if any, under the Credit Facility rank equally with each other, and have priority over the 2017 and 2016 Senior Notes to the extent of the value of the assets securing the borrowings under the Credit Agreement.

IAC Subordinated Loan Facility:

Prior to the IPO, the Company entered into an uncommitted subordinated loan facility with IAC (the “IAC Subordinated Loan Facility”), which allows the Company to make one or more requests to IAC to borrow funds from it. If IAC agrees to fulfill any such borrowing request from the Company, such borrowing will be incurred in accordance with the terms of the IAC Subordinated Loan Facility. Any indebtedness outstanding under the IAC Subordinated Loan Facility will be by its terms subordinated in right of payment to the obligations under the Match Group Credit Agreement and Match Group Senior Notes. The IAC Subordinated Loan Facility has a scheduled final maturity date of no earlier than 90 days after the maturity date of the Credit Facility or the latest maturity date in respect of any Term Loan outstanding under the Credit Agreement. At September 30, 2018 , the Company has no indebtedness outstanding under the IAC Subordinated Loan Facility.

Cash Flow Information

In summary, the Company’s cash flows are as follows:



	Nine Months Ended September 30,
	2018			2017
	(In thousands)
Net cash provided by operating activities attributable to continuing operations	$	425,243		$	229,656
Net cash (used in) provided by investing activities attributable to continuing operations	(23,105		)	65,471
Net cash used in financing activities attributable to continuing operations	(272,299		)	(394,576		)

2018

Net cash provided by operating activities attributable to continuing operations in 2018 includes adjustments to earnings of $49.8 million of stock-based compensation expense and $25.1 million of depreciation. Partially offsetting these adjustments was deferred income taxes of $23.8 million primarily related to the net operating loss created by the exercise and vesting of stock-based awards. The increase in cash from changes in working capital primarily consists of an increase in accounts payable and other liabilities of $32.2 million , due mainly to the timing of payments, including interest payments; increases in deferred revenue of $24.2 million , due mainly to growth in subscription sales and an increase from income taxes payable and receivable of $1.2 million due primarily to the timing of tax payments. These changes were partially offset by increases in accounts receivable of $21.5 million primarily related to the growth in revenue and increases in other assets of $22.1 million primarily related to an increase in prepaid hosting services and capitalized mobile app store fees.

Net cash used in investing activities attributable to continuing operations in 2018 consists primarily of capital expenditures of $21.3 million that are primarily related to computer hardware and internal development of software to support our products and services, and purchases of investments of $3.0 million , partially offset by net cash acquired in a business combination of $1.1 million .

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Net cash used in financing activities attributable to continuing operations in 2018 is primarily due to cash payments of $181.8 million for withholding taxes paid on behalf of employees for net settled stock awards and purchases of treasury stock of $86.2 million .

2017

Net cash provided by operating activities attributable to continuing operations in 2017 includes adjustments to earnings consisting primarily of deferred income taxes of $239.8 million primarily related to the net operating loss created by tax deductions created from stock-based awards. Partially offsetting this adjustment was stock-based compensation expense of $53.6 million ; depreciation of $23.6 million ; other adjustments of $16.6 million consisting primarily of net foreign currency losses of $9.9 million, $4.2 million of non-cash interest expenses, and a non-cash other-than-temporary impairment charge on a cost method investment of $2.3 million; acquisition-related contingent consideration fair value adjustments of $4.4 million ; and amortization of intangibles of $1.2 million . The increase in cash from changes from working capital is due primarily to an increase in deferred revenue of $30.7 million , due mainly to growth in subscription sales; an increase in accounts payable and other liabilities of $15.4 million , due mainly to the timing of payments, including interest payments; and an increase from income taxes payable and receivable of $11.9 million . These sources of cash were partially offset by decreases in cash from increases in accounts receivable of $42.9 million primarily related to revenue increasingly sourced through mobile app stores, which are settled with the Company more slowly than traditional credit cards and other assets of $9.0 million primarily related to the prepayment of certain expenses.

Net cash provided by investing activities attributable to continuing operations in 2017 consists primarily of net proceeds of $96.1 million from the sale of a business partially offset by capital expenditures of $21.6 million that are primarily related to internal development of software to support our products and services and purchases of investments of $9.1 million .

Net cash used in financing activities attributable to continuing operations in 2017 is primarily due to cash payments of $272.5 million for the purchase of certain fully vested stock-based awards, $229.0 million for withholding taxes paid on behalf of employees, and a $23.4 million payment related to an acquisition-related contingent consideration agreement. Offsetting these payments were proceeds of $75.0 million from the increase in the Term Loan and proceeds from the issuance of common stock pursuant to stock-based awards of $57.7 million.

Liquidity and Capital Resources

The Company’s principal sources of liquidity are its cash and cash equivalents as well as cash flows generated from operations. The Company has a $500 million Credit Facility that expires on October 7, 2020. At September 30, 2018 , there were no outstanding borrowings under the Credit Facility.

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 2018 capital expenditures will be approximately $30 million, flat compared to 2017.

The Company believes its expected positive cash flows generated from operations together with its existing cash and cash equivalents and available borrowing capacity under the Credit Facility will be sufficient to fund its normal operating requirements, capital expenditures, debt service, the payment of withholding taxes paid on behalf of employees for net settled stock-based awards, investing, and other commitments for the foreseeable future. The Company’s liquidity could be negatively affected by a decrease in demand for our products and services.

In May 2017, the Board of Directors of the Company authorized Match Group to repurchase up to 6 million shares of its common stock. The timing and actual number of any shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. The Company is not obligated to purchase any shares under the repurchase program, and repurchases may be

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commenced, suspended or discontinued from time to time without prior notice. We purchased 2.0 million shares related to this repurchase authorization through September 30, 2018 for $86.2 million. Additionally, from October 1 to November 2, we purchased approximately 400,000 shares for $20.4 million. A total of 3.6 million shares remain available for repurchase.

The Company currently settles all equity awards on a net basis. Assuming all equity awards outstanding on November 2, 2018 were net settled, we would issue 10.4 million common shares (of which 1.5 million is related to vested shares and 8.9 million is related to unvested shares) and would remit $544.2 million (of which $77.3 million is related to vested shares and $466.9 million is related to unvested shares) in cash for withholding taxes (assuming a 50% withholding rate).

The Company does not currently expect to be a material U.S. federal cash income tax payer until 2021. The ultimate timing is dependent primarily on the performance of the Company and the amount and timing of tax deductions related to stock-based awards.

All of the Company’s international cash can be repatriated without significant tax consequences as it has been subjected to U.S. income taxes due to either the Transition Tax or tax on GILTI imposed by the Tax Act. During the nine months ended September 30, 2018, no foreign cash was repatriated to the U.S.

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. As of September 30, 2018 , IAC owns 80.9% of our outstanding shares of capital stock and has 97.5% of the combined voting power of our outstanding capital stock. As a result of IAC’s ability to control the election and removal of our board of directors, IAC effectively has the ability to control our financing activities, including the issuance of additional debt and equity securities, the incurrence of other indebtedness, or distributions to shareholders. While the Company believes we will have the ability to access debt and equity markets if needed, such transactions may require the concurrence of IAC.

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CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

At September 30, 2018 , there have been no material changes to the Company’s contractual obligations, commercial commitments and off-balance sheet arrangements since the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2017 .

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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. 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. Presented below is an update to the “Critical Accounting Policies and Estimates” presented in Part II. Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2017, following the adoption of ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , on January 1, 2018. There have been no other changes to our critical accounting policies and estimates since our Annual Report on Form 10-K for the year ended December 31, 2017. See “ Note 1—The Company and Summary of Significant Accounting Policies ” to the consolidated financial statements included in “Item 1—Consolidated Financial Statements” for the summary of significant accounting policies.

Investments in Equity Securities

Equity Securities

The Company invests in equity securities as part of its investment strategy. Our equity securities, other than those of our consolidated subsidiaries, are accounted for at fair value or under the measurement alternative upon the adoption of ASU No. 2016-01 with changes recognized within other income (expense), net each reporting period. Under the measurement alternative, equity investments without readily determinable fair values are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Under the measurement alternative, the value of our equity investments without readily determinable fair values are generally determined based on a market approach as of the transaction date. We review impairment of our equity securities each reporting period when there are qualitative indicators that may indicate impairment. Once the qualitative indicators are identified and the fair value of the security is less than its carrying value, we will write down the security to its fair value and record the corresponding charge within other income (expense), net.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

At September 30, 2018 , there have been no material changes to the Company's instruments or positions that are sensitive to interest rate risk since the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2017.

Foreign Currency Exchange Risk

The Company conducts business in certain foreign markets, primarily in the European Union, and is exposed to foreign exchange risk for both the Euro and British Pound (“GBP”).

We have exposure to foreign currency exchange risk related to transactions carried out in a currency other than the U.S. dollar, and investments in foreign subsidiaries with a functional currency other than the U.S. dollar. As foreign currency exchange rates change, translation of the statements of operations of our international businesses into U.S. dollars affects year-over-year comparability of operating results. For the three and nine months ended September 30, 2018 , the impact on revenue for all foreign currencies was unfavorable by $8.0 million and favorable by $17.0 million , respectively, compared to the comparable prior year periods. For a reconciliation of Revenue excluding foreign exchange effects, see “Principles of Financial Reporting.”

Foreign currency exchange gains included in the Company’s earnings for the three and nine months ended September 30, 2018 were $0.4 million and $2.7 million, respectively. Foreign currency exchange losses for the three and nine months ended September 30, 2017 were $6.8 million and $10.3 million, respectively. Historically foreign currency exchange gains and losses have not been material to the Company. The gains in 2018 and the losses in 2017 are primarily related to a U.S. dollar denominated intercompany loan for which the receivable is held by a foreign subsidiary with a GBP functional currency. As the U.S. Dollar fluctuates against the GBP, this intercompany loan experiences volatility in regards to foreign currency exchange gains and losses.

Historically, the Company has not hedged foreign currency exposures. Our continued international expansion increases our exposure to exchange rate fluctuations and as a result such fluctuations could have a significant impact on our future results of operations.

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Item 4. Controls and Procedures

The Company monitors and evaluates on an ongoing basis its disclosure controls and procedures in order to improve their overall effectiveness. In the course of these evaluations, the Company modifies and refines its internal processes as conditions warrant.

As required by Rule 13a-15(b) of the Exchange Act, Match Group management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), conducted an evaluation, as of the end of the period covered by this report, of the effectiveness of the Company’s disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Based on this evaluation, the CEO and the CFO concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

There have been no changes in our internal control over financial reporting during the period covered by this report that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings

Overview

We are, and from time to time may become, involved in various legal proceedings arising in the normal course of our business activities, such as patent infringement claims, trademark oppositions and consumer or advertising complaints, as well as stockholder derivative actions, class action lawsuits and other matters. The amounts that may be recovered in such matters may be subject to insurance coverage. The litigation matters described below involve issues or claims that may be of particular interest to our stockholders, regardless of whether any of these matters may be material to our financial position or operations based upon the standard set forth in the SEC’s rules.

Securities Class Action Litigation against Match Group

As previously disclosed in our periodic reports, on February 26, 2016, a putative nationwide class action was filed in federal court in Texas against the Company, five of its officers and directors, and twelve underwriters of the Company’s initial public offering in November 2015. See David M. Stein v. Match Group, Inc. et al. , No. 3:16-cv-549 (U.S. District Court, Northern District of Texas). The complaint alleged that the registration statement and prospectus issued in connection with the Company’s initial public offering were materially false and misleading given their failure to state that: (i) Match Group’s Non-dating business would miss its revenue projection for the quarter ended December 31, 2015, and (ii) ARPU (as defined in “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—General-Key Terms”) would decline substantially in the quarter ended December 31, 2015. The complaint asserted that these alleged failures to timely disclose material information caused Match Group’s stock price to drop after the announcement of its earnings for the quarter ended December 31, 2015. The complaint pleaded claims under the Securities Act of 1933 for untrue statements of material fact in, or omissions of material facts from, the registration statement, the prospectus, and related communications in violation of Sections 11 and 12 and, as to the officer/director defendants only, control-person liability under Section 15 for the Company’s alleged violations. The complaint sought among other relief class certification and damages in an unspecified amount.

On March 9, 2016, a virtually identical class action complaint was filed in the same court against the same defendants by a different named plaintiff. See Stephany Kam-Wan Chan v. Match Group, Inc. et al. , No. 3:16-cv-668 (U.S. District Court, Northern District of Texas). On April 25, 2016, Judge Boyle in the Chan case issued an order granting the parties’ joint motion to transfer that case to Judge Lindsay, who is presiding over the earlier-filed Stein case. On April 27, 2016, various current or former Match Group shareholders and their respective law firms filed motions seeking appointment as lead plaintiff(s) and lead or liaison counsel for the putative class. On April 28, 2016, the Court issued orders: (i) consolidating the Chan case into the Stein case, (ii) approving the parties’ stipulation to extend the defendants’ time to respond to the complaint until after the Court has appointed a lead plaintiff and lead counsel for the putative class and has set a schedule for the plaintiff’s filing of a consolidated complaint and the defendants’ response to that pleading, and (iii) referring the various motions for appointment of lead plaintiff(s) and lead or liaison counsel for the putative class to a United States Magistrate Judge for determination. On June 9, 2016, the Magistrate Judge issued an order appointing two lead plaintiffs, two law firms as co-lead plaintiffs’ counsel, and a third law firm as plaintiffs’ liaison counsel. In accordance with this order, the consolidated case is now captioned Mary McCloskey et ano. v. Match Group, Inc. et al. , No. 3:16-CV-549-L.

On July 27, 2016, the parties submitted to the Court a joint status report proposing a schedule for the plaintiffs’ filing of a consolidated amended complaint and the parties’ briefing of the defendants’ contemplated motion to dismiss the consolidated complaint. On August 17, 2016, the Court issued an order approving the parties’ proposed schedule. On September 9, 2016, in accordance with the schedule, the plaintiffs filed an amended consolidated complaint. The amended pleading focused solely on allegedly misleading statements or omissions concerning the Match Group’s Non-dating business. The defendants filed motions to dismiss the amended consolidated complaint on November 8, 2016. The plaintiffs filed oppositions to the motions on December 23, 2016, and the defendants filed replies to the oppositions on February 6, 2017. On September 27, 2017, the court issued an opinion and order: (i) denying, without prejudice to renewal, the defendants’ motions

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and (ii) directing the plaintiffs to file a further amended pleading addressing the deficiencies in the amended consolidated complaint that were identified in the defendants’ motions.

On October 30, 2017, the plaintiffs filed a second amended consolidated complaint, which among other things, dropped their claim under Section 12 of the Securities Act of 1933. Pursuant to an agreed-upon briefing schedule approved by the count, the defendants filed motions to dismiss the second amended consolidated complaint on December 15, 2017, the plaintiffs filed an opposition to the motions on January 29, 2018, and the defendants filed replies to the opposition on February 20, 2018. On March 8, 2018, the court issued an order transferring the case from Judge Lindsay to newly appointed Judge Scholer. On June 19, 2018, the court heard oral arguments on the motions, issued an oral ruling from the bench dismissing the second amended consolidated complaint without leave to amend, and indicated that a written opinion and order would be forthcoming. On July 10, 2018, pursuant to the court’s suggestion at oral argument, the defendants submitted a proposed order formalizing the court’s dismissal ruling. On August 24, 2018, the court issued an opinion and order dismissing the second amended consolidated complaint without leave to amend. The plaintiffs have not filed a notice of appeal from the dismissal, and their time to do so has expired.

Consumer Class Action Challenging Tinder’s Age-Tiered Pricing

On May 28, 2015, a putative state-wide class action was filed against Tinder in state court in California. See Allan Candelore v. Tinder, Inc. , No. BC583162 (Superior Court of California, County of Los Angeles). The complaint principally alleged that Tinder violated California’s Unruh Civil Rights Act by offering and charging users age 30 and over a higher price than younger users for subscriptions to its premium Tinder Plus service. The complaint sought certification of a class of California Tinder Plus subscribers age 30 and over and damages in an unspecified amount. On September 21, 2015, Tinder filed a demurrer seeking dismissal of the complaint. On October 26, 2015, the court issued an opinion sustaining Tinder’s demurrer to the complaint without leave to amend, ruling that the age-based pricing differential for Tinder Plus subscriptions did not violate California law in essence because offering a discount to users under age 30 was neither invidious nor unreasonable in light of that age group’s generally more limited financial means. On December 29, 2015, in accordance with its ruling, the court entered judgment dismissing the action. On February 1, 2016, the plaintiff filed a notice of appeal from the judgment, and the parties thereafter briefed the appeal. On January 29, 2018, the California Court of Appeal (Second Appellate District, Division Three) issued an opinion reversing the judgment of dismissal, ruling that the lower court had erred in sustaining Tinder’s demurrer because the complaint, as pleaded, stated a cognizable claim for violation of the Unruh Act. Because we believe that the appellate court’s reasoning was flawed as a matter of law and runs afoul of binding California precedent, on March 12, 2018, Tinder filed a petition with the California Supreme Court seeking interlocutory review of the Court of Appeal’s decision. On May 9, 2018, the California Supreme Court denied the petition. The case has been returned to the trial court for further proceedings and is currently in discovery. We believe that the allegations in this lawsuit are without merit and will continue to defend vigorously against it.

Bumble Claims against Match Group, LLC

On March 28, 2018, a civil lawsuit was filed against Match Group, LLC in state court in Texas. See Bumble Trading, Inc. v. Match Group, LLC , Cause No. DC-18-04140 (160 ^th Judicial District Court of Texas, County of Dallas). The petition alleged that Match Group, LLC wrongfully obtained confidential information from Plaintiffs in connection with a potential sale process and filed an intellectual property lawsuit against Bumble Trading, Inc. in bad faith to hinder such sale process. In response, Plaintiffs, Bumble Trading, Inc. and its parent Bumble Holding, Ltd., filed their petition asserting claims of tortious interference with business relationships, fraud, misappropriation of trade secrets, unfair competition, promissory estoppel, and disparagement. The petition seeks monetary damages in excess of $400 million and an injunction against Match Group, LLC from interfering with Plaintiffs’ prospective business relationships or utilizing Plaintiffs’ confidential information. Match Group, LLC filed its answer and counterclaim, notice of removal to federal court, and motion to transfer the case to the Western District on September 26, 2018. The case is currently pending in federal court in the Northern District of Texas. Plaintiffs filed a motion to dismiss our counterclaims on October 17, 2018. However, Match Group, LLC filed its first amended counterclaims on November 1, 2018, nullifying the motion to dismiss. On October 18, 2018, Plaintiffs filed a motion to dismiss their own claims without prejudice and an opposition to the motion to transfer. On November 1, 2018, Match Group, LLC filed its notice of non-opposition to Plaintiffs’ motion to dismiss their own claims. Match Group, LLC also filed its reply in support of the motion to transfer on the same

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day. We believe that Plaintiffs’ allegations in this lawsuit are without merit and will vigorously defend against them.

Tinder Optionholder Litigation against IAC and Match Group

On August 14, 2018, ten current and former employees of Match Group, LLC or Tinder, Inc. (“Tinder”), an operating business of Match Group, filed a lawsuit in New York state court against IAC and Match Group. See Sean Rad et al. v. IAC/InterActiveCorp and Match Group, Inc. , No. 654038/2018 (Supreme Court, New York County). The complaint alleges that in 2017, the defendants: (i) wrongfully interfered with a contractually established process for the independent valuation of Tinder by certain investment banks, resulting in a substantial undervaluation of Tinder and a consequent underpayment to the plaintiffs upon exercise of their Tinder stock options, and (ii) then wrongfully merged Tinder into Match Group, thereby depriving one of the plaintiffs (Mr. Rad) of his contractual right to later valuations of Tinder on a stand-alone basis. The complaint asserts claims for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, interference with contractual relations (as against Match Group only), and interference with prospective economic advantage, and seeks compensatory damages in the amount of at least $2 billion, as well as punitive damages. On August 31, 2018, four plaintiffs who are still employed by Match Group filed a notice of discontinuance of their claims without prejudice, leaving the six former employees as the remaining plaintiffs. On October 9, 2018, the defendants filed a motion to dismiss the complaint on various grounds, including that the 2017 valuation of Tinder by the investment banks was an expert determination any challenge to which is both time-barred under applicable law and available only on narrow substantive grounds that the plaintiffs have not pleaded in their complaint. IAC and Match Group believe that the allegations in this lawsuit are without merit and will continue to defend vigorously against it.

Item 1A. Risk Factors

This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as “anticipates,” “estimates,” “expects,” “plans” and “believes,” among others, generally identify forward-looking statements. These forward-looking statements include, among others, statements relating to: Match Group’s future financial performance, Match Group’s business prospects and strategy, anticipated trends and prospects in the industries in which Match Group’s businesses operate and other similar matters. These forward-looking statements are based on Match Group management’s current expectations and assumptions about future events as of the date of this quarterly report, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.

Actual results could differ materially from those contained in these forward-looking statements for a variety of reasons, including, among others: competition, our ability to maintain user rates on our higher monetizing dating products, our ability to attract users to our dating products through cost-effective marketing and related efforts, foreign currency exchange rate fluctuations, our ability to distribute our dating products through third parties and offset related fees, the integrity and scalability of our systems and infrastructure (and those of third parties) and our ability to adapt ours to changes in a timely and cost-effective manner, our ability to protect our systems from cyberattacks and to protect personal and confidential user information, risks relating to certain of our international operations and acquisitions and certain risks relating to our relationship with IAC/InterActiveCorp, among other risks.

Certain of these and other risks and uncertainties are discussed in Match Group’s filings with the Securities and Exchange Commission, including in Part I “Item 1A. Risk Factors” of our annual report on Form 10-K for the fiscal year ended December 31, 2017 and in Part II “Item 1A. Risk Factors” of our quarterly report on Form 10-Q for the quarter ended March 31, 2018. Other unknown or unpredictable factors that could also adversely affect Match Group’s business, financial condition and results of operations may arise from time to time. In light of these risks and uncertainties, these forward-looking statements discussed in this quarterly report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of Match Group management as of the date of this quarterly report. Match Group does not undertake to update these forward-looking statements.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

Under the terms of the Employee Matters Agreement dated as of November 24, 2015, by and between IAC/InterActiveCorp (“IAC”) and Match Group, Inc. (the “Company”), as amended effective as of April 13, 2016 (the “Employee Matters Agreement”), IAC may cause certain equity awards of the Company to be settled in shares of IAC common stock, par value $0.001 (“IAC Common Stock”) and cause the Company to reimburse IAC for the cost of such shares of IAC Common Stock by issuing shares of Company common stock, par value $0.001 (“Company Common Stock”) to IAC. The Employee Matters Agreement also provides that the Company will reimburse IAC for the cost of any IAC equity awards held by the Company’s employees and former employees and that IAC may elect to receive payment either in cash or Company Common Stock.

On September 30, 2018, 10,198 shares of Company Common Stock were issued to IAC as reimbursement for shares of IAC Common Stock issued in connection with the exercise of IAC stock options held by Match Group employees.

On September 30, 2018, 248,996 shares of Company Common Stock were issued to IAC as reimbursement for shares of IAC Common Stock issued in connection with the exercise and settlement of equity awards formerly denominated in shares of a subsidiary of the Company pursuant to the Employee Matters Agreement.

The issuances of Company Common Stock described above did not involve any underwriters or public offerings and the Company believes that such issuances were exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) of such act.

Issuer Purchases of Equity Securities

The following table sets forth purchases by the Company of its common stock during the quarter ended September 30, 2018 :



Period	(a) Total Number of Shares Purchased	(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ⁽¹⁾	(d) Maximum Number of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs ⁽²⁾
July 2018	147,489	$	39.21	147,489	4,000,000
August 2018	—	$	—	—	4,000,000
September 2018	12,600	$	51.56	12,600	3,987,400
Total	160,089	$	40.18	160,089	3,987,400

______________________


(1)	Reflects repurchases made pursuant to the 6 million share repurchase authorization previously announced in May 2017, which has no expiration.

(2)

Represents the total number of shares of common stock that remained available for repurchase pursuant to the May 2017 repurchase authorization. The timing and actual number of any shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. The Company is not obligated to purchase any shares under the repurchase program, and repurchases may be commenced, suspended or discontinued from time to time without prior notice.

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Item 6. Exhibits

The documents set forth below, numbered in accordance with Item 601 of Regulation S-K, are filed herewith, incorporated by reference herein by reference to the location indicated or furnished herewith.

Incorporated by Reference

Filed (†) or

Furnished (‡)

Herewith

(as indicated)

Exhibit

No.

Exhibit Description

Form

SEC

File No.

Exhibit

Filing

Date

10.1

Employment Agreement between Amanda W. Ginsberg and Match Group, Inc., dated as of July 20, 2018.

8-K

001-37636

10.1

7/26/2018

10.2

Employment Agreement between Gary Swidler and Match Group, Inc., dated as of August 8, 2018.

8-K

001-37636

10.1

8/14/2018

10.3

Employment Agreement between Jared Sine and Match Group, Inc., dated as of August 8, 2018.

8-K

001-37636

10.2

8/14/2018

10.4

Advisory Agreement between Gregory R. Blatt and Match Group, Inc., dated as of August 10, 2018.

8-K

001-37636

10.1

8/10/2018

10.5

Employment Agreement between Sharmistha Dubey and Match Group, Inc., dated as of August 8, 2018.

†

31.1

Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

†

31.2

Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

†

32.1

Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

‡

32.2

Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

‡

101.INS

XBRL Instance Document

‡

101.SCH

XBRL Taxonomy Extension Schema Document

‡

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

‡

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

‡

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

‡

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

‡

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



November 9, 2018	MATCH GROUP, INC.
	By:	/s/ GARY SWIDLER
		Gary Swidler
		Chief Financial Officer




Signature	Title	Date

/s/ GARY SWIDLER	Chief Financial Officer	November 9, 2018
Gary Swidler

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QuickLinks

PART I FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

MATCH GROUP, INC. CONSOLIDATED BALANCE SHEET (Unaudited)

MATCH GROUP, INC. CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

MATCH GROUP, INC. CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS (Unaudited)

MATCH GROUP, INC. CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited)

MATCH GROUP, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

MATCH GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

GENERAL

MATCH GROUP INC.'S PRINCIPLES OF FINANCIAL REPORTING

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Item 4. Controls and Procedures

PART II OTHER INFORMATION

Item1. Legal Proceedings

Item 1A. Risk Factors

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Item 6. Exhibits

SIGNATURES

Exhibit 10.5

Execution Copy

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“ Agreement ”) is entered by and between Sharmistha Dubey (“ Executive ”) and Match Group, Inc., a Delaware corporation (the “ Company ”) and is effective as of August 8, 2018 (the “ Effective Date ”).

WHEREAS, the Company desires to establish its right to the services of Executive, in the capacity described below, on the terms and conditions hereinafter set forth, and Executive is willing to accept such employment on such terms and conditions.

NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, Executive and the Company have agreed and do hereby agree as follows:

1A. EMPLOYMENT . During the Term (as defined below), the Company shall employ Executive, and Executive shall be employed, as the President of the Company. During Executive’s employment with the Company, Executive shall do and perform all services and acts necessary or advisable to fulfill the duties and responsibilities as are commensurate and consistent with Executive’s position and shall render such services on the terms set forth herein. During Executive’s employment with the Company, Executive shall report to the Chief Executive Officer of the Company (the “ Reporting Officer ”). Executive shall have such powers and duties with respect to the Company as may reasonably be assigned to Executive by the Reporting Officer, to the extent consistent with Executive’s position. Executive agrees to devote substantially all of Executive’s working time, attention and efforts to the Company and to perform the duties of Executive’s position in accordance with the Company’s written policies as in effect from time to time.

2A. TERM . This Agreement shall commence on the Effective Date and shall continue for a period of two (2) years (the “ Initial Term ”). This Agreement shall automatically be renewed for successive one-year periods on the second anniversary of the Effective Date and on each successive anniversary of the Effective Date thereafter (each successive one-year renewal term together with the Initial Term, the “ Term ”), unless one party hereto provides written notice to the other, at least ninety (90) days prior to the end of the applicable Term, that it elects not to extend this Agreement, which notice shall be irrevocable (any such notice, a “ Non-Renewal Notice ”). Notwithstanding anything to the contrary in this Agreement, Executive’s employment with the Company is “at will” and may be terminated at any time for any reason or no reason, with or without cause, by the Company or Executive. Executive’s rights to payments upon certain termination of employment is governed by Section 1 of the Standard Terms and Conditions attached hereto.

3A. COMPENSATION .

(a) BASE SALARY . During the period that Executive is employed with the Company hereunder, the Company shall pay Executive an annual base salary of $625,000 (the “ Base Salary ”), payable in equal biweekly installments (or, if different, in accordance with the Company’s payroll practice as in effect from time to time). The Base Salary may be increased from time to time in the discretion of the Company. For all purposes under this Agreement, the term “ Base Salary ” shall refer to the Base Salary as in effect from time to time.

(b) DISCRETIONARY BONUS . During the period that Executive is employed with the Company hereunder, Executive shall be eligible to receive discretionary annual bonuses (payable at the same time as bonuses of other executives at the Company, but in no event later than March 15 of the year following the year with respect to which such bonuses are payable), as determined by the Compensation Committee of the Board, in consultation with the Reporting Officer.

(c) BENEFITS . From the Effective Date through the date of termination of Executive’s employment with the Company for any reason, Executive shall be entitled to participate in any welfare, health and life insurance, pension benefit and incentive programs as may be adopted from time to time by the Company on the same basis as that provided to similarly situated senior executives of the Company. Without limiting the generality of the foregoing, Executive shall be entitled to the following benefits:

(i) Reimbursement for Business Expenses . During the period that Executive is employed with the Company hereunder, the Company shall reimburse Executive for all reasonable and necessary expenses incurred by Executive in performing Executive’s duties for the Company, on the same basis as similarly situated senior executives and in accordance with the Company’s policies as in effect from time to time.

(ii) Vacation . During the period that Executive is employed with the Company hereunder, Executive shall be entitled to paid vacation each year, in accordance with the plans, policies, programs and practices of the Company applicable to similarly situated senior executives of the Company generally.

4A. NOTICES . All notices and other communications under this Agreement shall be in writing and shall be given by first-class mail, certified or registered with return receipt requested, or by hand delivery, overnight delivery by a nationally recognized carrier, facsimile transmission or PDF, in each case to the applicable address set forth below (or, if by facsimile transmission or PDF, to a facsimile transmission number or email account provided by the other party), and any such notice is deemed effectively given when received by the recipient (or if receipt is refused by the recipient, when so refused):

If to the Company:        Match Group, Inc.
                    8750 North Central Expressway
                    14 ^th Floor

Dallas, TX 75231

Attention: General Counsel


If to Executive:	At the most recent address for Executive on record at the Company.

Either party may change such party’s address for notices by notice duly given pursuant hereto.

5A. GOVERNING LAW; JURISDICTION . This Agreement and the legal relations thus created between the parties hereto (including, without limitation, any dispute arising out of or related

to this Agreement) shall be governed by and construed under and in accordance with the internal laws of the State of Texas without reference to its principles of conflicts of laws. Any dispute between the parties hereto arising out of or related to this Agreement will be heard exclusively and determined before an appropriate federal court located in the State of Texas, or an appropriate Texas state court, and each party hereto submits itself and its property to the exclusive jurisdiction of the foregoing courts with respect to such disputes. The parties hereto acknowledge and agree that this Agreement was executed and delivered in the State of Texas and that, in the course of performing duties hereunder for the Company, Executive shall have multiple contacts with the business and operations of the Company, as well as other businesses and operations in the State of Texas, and that for those and other reasons this Agreement and the undertakings of the parties hereunder bear a reasonable relation to the State of Texas. Each party hereto (i) agrees that service of process may be made by mailing a copy of any relevant document to the address of the party set forth above, (ii) waives to the fullest extent permitted by law any objection which it may now or hereafter have to the courts referred to above on the grounds of inconvenient forum or otherwise as regards any dispute between the parties hereto arising out of or related to this Agreement, (iii) waives to the fullest extent permitted by law any objection which it may now or hereafter have to the laying of venue in the courts referred to above as regards any dispute between the parties hereto arising out of or related to this Agreement and (iv) agrees that a judgment or order of any court referred to above in connection with any dispute between the parties hereto arising out of or related to this Agreement is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction.

6A. COUNTERPARTS . This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

7A. STANDARD TERMS AND CONDITIONS . Executive expressly understands and acknowledges that the Standard Terms and Conditions attached hereto are incorporated herein by reference, deemed a part of this Agreement and are binding and enforceable provisions of this Agreement. References to “this Agreement” or the use of the term “hereof” shall refer to this Agreement and the Standard Terms and Conditions attached hereto, taken as a whole.

[The Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and delivered by its duly authorized officer and Executive has executed and delivered this Agreement on August 8, 2018.

MATCH GROUP, INC.

/s/ Jared Sine

By: Jared Sine

Title: General Counsel & Secretary

/s/ Sharmistha Dubey

SHARMISTHA DUBEY

STANDARD TERMS AND CONDITIONS

1. TERMINATION OF EXECUTIVE’S EMPLOYMENT.

(a) DEATH . In the event Executive’s employment hereunder is terminated by reason of Executive’s death, the Company shall pay Executive’s designated beneficiary or beneficiaries, within thirty (30) days of Executive’s death (or such earlier date as may be required by law) in a lump sum in cash, (i) Executive’s Base Salary through the end of the month in which her death occurs and (ii) any Accrued Obligations (as defined in Section 1(f) below). In addition, any incentive equity or equity-linked awards in or relating to equity of the Company or its subsidiaries ( e.g. , restricted stock, restricted stock units, stock options, phantom stock or similar instruments) that are outstanding and unvested as of the date of such termination of employment and that would have vested at any time through the first anniversary of the date of the termination of Executive’s employment with the Company (the “ Termination Date ”) shall vest upon her death and shall be settled in accordance with their terms. Notwithstanding the foregoing, (A) any amounts that would vest under this provision but for the fact that outstanding performance conditions have not been satisfied shall vest only if, and at such point as, such performance conditions are satisfied, and (B) the terms of any future awards may be varied in the governing documents of such award.

(b) DISABILITY . If, as a result of Executive’s incapacity due to physical or mental illness (“ Disability ”), Executive shall be unable to substantially perform Executive’s duties with the Company for a period of four (4) consecutive months and, within thirty (30) days after written notice of a pending termination for Disability is provided to Executive by the Company (in accordance with Section 4A hereof), Executive shall not have been able to substantially perform Executive’s duties, Executive’s employment under this Agreement may be terminated by the Company for Disability. During any period prior to such termination during which Executive is absent from the full-time performance of Executive’s duties with the Company due to Disability, the Company shall continue to pay Executive’s Base Salary at the rate in effect at the commencement of such period of Disability, offset by any amounts payable to Executive under any disability insurance plan or policy provided by the Company. Upon termination of Executive’s employment due to Disability, the Company shall pay Executive within thirty (30) days of such termination (or such earlier date as may be required by law) in a lump sum in cash (i) Executive’s Base Salary through the end of the month in which termination occurs, offset by any amounts payable to Executive under any disability insurance plan or policy provided by the Company; and (ii) any Accrued Obligations.

(c) TERMINATION FOR CAUSE; TERMINATION BY EXECUTIVE WITHOUT GOOD REASON . Upon the termination of Executive’s employment by the Company for Cause (as defined below) or by Executive without Good Reason (as defined below), the Company shall have no further obligation hereunder, except for the payment of any Accrued Obligations. As used herein, “ Cause ” shall mean: (i) the plea of guilty or nolo contendere to, or conviction for, a felony offense by Executive; provided , however , that (A) after indictment, the Company may suspend Executive from the rendition of services, but without limiting or modifying in any other way the Company’s obligations under this Agreement, and (B) Executive’s employment shall be immediately reinstated if the indictment is dismissed or otherwise dropped and there is not otherwise

grounds to terminate Executive’s employment for Cause; (ii) a material breach by Executive of a fiduciary duty owed to the Company; (iii) a material breach by Executive of any of the covenants made by Executive in Section 2 hereof; (iv) Executive’s continued willful failure to perform or gross neglect of the material duties required by this Agreement (other than any such failure resulting from incapacity due to physical or mental illness); or (v) a knowing and material violation by Executive of any material Company policy pertaining to ethics, wrongdoing or conflicts of interest, which policy had been provided to Executive in writing or otherwise made generally available prior to such violation; provided, that in the case of conduct described in clauses (ii), (iii), (iv) or (v) above which is capable of being cured, Executive shall have a period of ten (10) days after Executive is provided with written notice (specifying in reasonable detail the acts or omissions believed to constitute Cause and the steps necessary to remedy such condition, if curable) in which to cure, which such notice specifically identifies the breach, the nature of the willful or gross neglect or the violation that the Company believes constitutes Cause.

(d) TERMINATION BY THE COMPANY OTHER THAN FOR DEATH, DISABILITY OR CAUSE OR RESIGNATION BY EXECUTIVE FOR GOOD REASON . If Executive’s employment hereunder is terminated prior to the expiration of the Term by the Company for any reason other than Executive’s death, Disability or Cause, or if Executive terminates Executive’s employment hereunder prior to the expiration of the Term for Good Reason, then:

(i) the Company shall pay to Executive an amount equal to the Base Salary that would have been paid to Executive through the later of (x) the end of the then-current Term and (y) twelve (12) months from the Termination Date (the longer of (x) and (y), (the “ Severance Period ”);

(ii) the Company shall pay Executive within thirty (30) days after the date of such termination (or such earlier date as may be required by applicable law) in a lump sum in cash any Accrued Obligations;

(iii) any incentive equity or equity-linked awards in or relating to equity of the Company or its subsidiaries ( e.g. , restricted stock, restricted stock units, stock options, phantom stock or similar instruments), that are outstanding and unvested at the time of such termination of employment and that would have vested at any time through the first anniversary of the Termination Date, shall vest immediately upon such termination and shall be settled in accordance with their terms. Notwithstanding the foregoing, (1) any amounts that would vest under this provision but for the fact that outstanding performance conditions have not been satisfied shall vest only if, and at such point as, such performance conditions are satisfied, and (2) the terms of any future awards may be varied in the governing documents of such award; and

(iv) the Company shall, during the Severance Period, provide Executive with continued coverage under the Company’s group health plan, at the Company’s cost, or with an additional monthly payment in an amount necessary to cover the full premiums for continued healthcare coverage under the Company’s plans through COBRA, at the same coverage level as in effect for Executive as of the Termination Date. The payment under this clause (iv) shall be grossed up for applicable taxes. Notwithstanding the foregoing, in the event Executive obtains alternative employment during the Severance Period offering employer-paid healthcare coverage that is no

less favorable than the benefits provided under the Company’s group health plan, Executive shall enroll in and obtain coverage under such new employer’s plan at the earliest opportunity and the Company’s obligations under this clause (iv) shall cease as of the effective date of such alternate coverage.

The payments and severance benefits described in Section 1(d), with the exception of Section 1(d)(ii), shall be subject to Executive’s compliance with the restrictive covenants set forth in Section 2 hereof and Executive’s execution within twenty-one (21) days following the Termination Date (or such longer period as may be required by applicable law) and non-revocation (during the applicable revocation period) of a general release of the Company and its affiliates, in substantially the form annexed hereto as Exhibit A (the “ Release ”). Any severance benefits due to Executive pursuant to Section 1(d)(i) shall be paid in equal biweekly installments (or, if different, in accordance with the Company’s payroll practice as in effect immediately prior to Executive’s Termination Date) over the course of the twelve (12) month period beginning on the first business day of the second month following the month in which Executive’s Separation from Service (as such term is defined below) took place (plus interest on the amount delayed from the Termination Date to the date payment begins at the then applicable borrowing rate of the Company as of the commencement of such delay). Any benefits due to Executive pursuant to Section 1(d)(iv) shall be paid through the Company’s payroll on the first regularly scheduled pay date of each month.

For purposes of this Agreement, “ Good Reason ” shall mean actions taken by the Company resulting in a material negative change in the employment relationship. For these purposes, a “material negative change in the employment relationship” shall include, without limitation, the occurrence of any of the following without Executive’s prior written consent: (A) requiring Executive to report to any person or persons other than the Reporting Officer, (B) a material diminution in title or the assignment of duties and responsibilities to, or limitation on duties of, Executive inconsistent with Executive’s position as President of the Company, excluding for this purpose any such instance that is an isolated and inadvertent action not taken in bad faith or that is authorized pursuant to this Agreement, (C) any material reduction in Executive’s Base Salary, (D) requiring Executive’s principal place of business to be in a location outside of the Dallas, Texas metropolitan area or (E) any material breach by the Company of this Agreement or any other written agreement between Executive and the Company or any Company affiliate; provided that in no event shall Executive’s resignation be for “Good Reason” unless (x) an event or circumstance constituting “Good Reason” shall have occurred and Executive provides the Company with written notice thereof within thirty (30) days after Executive has knowledge of the occurrence or existence of such event or circumstance, which notice specifically identifies the event or circumstance that Executive believes constitutes Good Reason, (y) the Company fails to correct the circumstance or event so identified within thirty (30) days after the receipt of such notice, and (z) Executive resigns within ninety (90) days after the date of delivery of the notice referred to in clause (x) above.

(e) OFFSET . If Executive obtains other employment during the period of time in which the Company is required to make payments to Executive pursuant to Section 1(d)(i) above, the amount of any installment payments remaining to be made to Executive thereunder at the time such other employment commences shall be reduced, on a dollar for dollar basis, in the order of the scheduled dates of payment of such remaining installments (taking into account any delay in

any installment payment required under Section 9A of the Agreement) by the amount of compensation received by Executive from such other employment on or prior to the scheduled date of payment of each such remaining installment. For purposes of this Section 1(e), Executive shall have an obligation to inform the Company regarding Executive’s employment status following termination and during the period of time in which the Company is making payments to Executive under Section 1(d)(i) above.

(f) ACCRUED OBLIGATIONS . As used in this Agreement, “ Accrued Obligations ” shall mean the sum of (i) any portion of Executive’s accrued but unpaid Base Salary through the date of death or termination of employment for any reason, as the case may be; (ii) any unreimbursed business expenses; (iii) the value of any accrued and unused vacation days; and (iv) any compensation previously earned but deferred by Executive (together with any interest or earnings thereon) that has not yet been paid and that is not otherwise scheduled to be paid at a later date pursuant to any deferred compensation arrangement of the Company to which Executive is a party, if any ( provided , that any election made by Executive pursuant to any deferred compensation arrangement that is subject to Section 409A regarding the schedule for payment of such deferred compensation shall prevail over this Section 1(f) to the extent inconsistent herewith).

(g) NON-RENEWAL . If the Company delivers a Non-Renewal Notice to Executive then, provided Executive’s employment hereunder continues through the expiration date then in effect, effective as of such expiration date, Executive’s employment with the Company automatically will terminate and the Company and Executive shall have the same rights and obligations hereunder as they would if the Company had terminated Executive’s employment hereunder at the end of the Term for any reason other than Executive’s death, Disability or Cause.

(h) RESIGNATION FROM ALL POSITIONS . Notwithstanding any other provision of this Agreement, upon the termination of Executive’s employment for any reason, unless otherwise requested by the Board, Executive shall immediately resign as of the Termination Date from all positions that Executive holds with the Company and any of its subsidiaries, including, without limitation, all boards of directors of any subsidiary of the Company or any parent company of the Company. Executive hereby agrees to execute any and all documentation to effectuate such resignations upon request by the Company.

(i) POST-TERMINATION EXERCISE PERIOD FOR STOCK OPTIONS . In the event of Executive’s termination of employment for any reason other than a termination of employment for Cause, any vested options to purchase Company stock, subsidiary stock or parent stock (including options vesting as a result of an acceleration of vesting upon a termination of employment without Cause or for Good Reason), shall remain exercisable through the date that is six (6) months following the Termination Date or, if earlier, through the scheduled expiration date of such options.

2. CONFIDENTIAL INFORMATION; NON-COMPETITION; NON-SOLICITATION; AND PROPRIETARY RIGHTS .

(a) CONFIDENTIALITY . Executive acknowledges that, while employed by the Company, Executive has occupied and will occupy a position of trust and confidence. The Company has provided and shall provide Executive with “Confidential Information” as referred to below. Executive shall not, except as Executive in good faith deems appropriate to perform Executive’s duties hereunder or as required by applicable law or regulation, governmental investigation, subpoena, or in connection with enforcing the terms of this Agreement (or any agreement referenced herein) without limitation in time, communicate, divulge, disseminate, disclose to others or otherwise use, whether directly or indirectly, any Confidential Information regarding the Company or any of its subsidiaries or affiliates. Notwithstanding the foregoing or anything herein to the contrary, nothing contained herein shall prohibit Executive from (i) filing a charge with, reporting possible violations of federal law or regulation to, participating in any investigation by, or cooperating with any governmental agency or entity or making other disclosures that are protected under the whistleblower provisions of applicable law or regulation and/or (ii) communicating directly with, cooperating with, or providing information (including trade secrets) in confidence to, any federal, state or local government regulator (including, but not limited to, the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, or the U.S. Department of Justice) for the purpose of reporting or investigating a suspected violation of law, or from providing such information to Executive’s attorney or in a sealed complaint or other document filed in a lawsuit or other governmental proceeding. Pursuant to 18 USC Section 1833(b), Executive will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (x) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (y) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

“ Confidential Information ” shall mean information about the Company or any of its subsidiaries or affiliates, and their respective businesses, employees, consultants, contractors, clients and customers that is not disclosed by the Company or any of its subsidiaries or affiliates for financial reporting purposes or otherwise generally made available to the public (other than by Executive’s breach of the terms hereof or the terms of any previous confidentiality obligation by Executive to the Company) and that was learned or developed by Executive in the course of employment by the Company or any of its subsidiaries or affiliates, including (without limitation) any proprietary knowledge, trade secrets, data, formulae, information and client and customer lists and all papers, resumes, and records (including computer records) of the documents containing such Confidential Information. Executive acknowledges that such Confidential Information is specialized, unique in nature and of great value to the Company and its subsidiaries or affiliates, and that such information gives the Company and its subsidiaries or affiliates a competitive advantage. Executive agrees to deliver, return to the Company (or destroy, to the extent physically returning the following is not possible), at the Company’s written request at any time or upon termination or expiration of Executive’s employment or as soon thereafter as possible, whether kept in tangible form or intangible form in the cloud or otherwise, all documents, computer tapes and disks, records, lists, data, drawings, prints, notes and written and digital information (and all copies thereof) furnished by the

Company and its subsidiaries or affiliates or prepared by Executive in the course of Executive’s employment by the Company and its subsidiaries or affiliates; provided, that, Executive may retain Executive’s personal effects, copies of documentation reasonably necessary for Executive to prepare Executive’s tax returns and documents relating to Executive’s compensation. As used in this Agreement, “subsidiaries” and “affiliates” shall mean any company controlled by, controlling or under common control with the Company.

(b) NON-COMPETITION .

(i) In consideration of this Agreement, and for other good and valuable consideration provided hereunder, the receipt and sufficiency of which are hereby acknowledged by Executive, Executive hereby agrees and covenants that, during Executive’s employment with the Company and for a period of twelve (12) months thereafter, Executive shall not, without the prior written consent of the Company, directly or indirectly, engage in or become associated with a Competitive Activity.

(ii) For purposes of this Section 2(b), a “ Competitive Activity ” means engaging in the business of providing online or app-based dating services or in such other business involving the provision of the same or similar products or services that any business of the Company is engaged in providing as of the Termination Date (the “ Company Products or Services ”), provided such business or endeavor is in the United States, or in any foreign jurisdiction in which the Company provides, or has provided during the Term, the relevant Company Group Products or Services.

(iii) For purposes of this Section 2(b), Executive shall be considered to have become “associated with a Competitive Activity” if Executive becomes directly or indirectly involved as an owner, principal, employee, officer, director, independent contractor, representative, stockholder, financial backer, agent, partner, member, advisor, lender, consultant or in any other individual or representative capacity with any individual, partnership, corporation or other organization that is engaged in a Competitive Activity.

(iv) Notwithstanding anything else in this Section 2(b), (A) Executive may become employed by or provide services to a partnership, corporation or other organization that is engaged in a Competitive Activity so long as Executive has no direct or indirect responsibilities or involvement in the Competitive Activity, and (B) Executive may own, for investment purposes only, up to five percent (5%) of the outstanding capital stock of any publicly-traded corporation engaged in a Competitive Activity if the stock of such corporation is either listed on a national stock exchange or on the NASDAQ National Market System and if Executive is not otherwise affiliated with such corporation.

(c) NON-SOLICITATION OF EMPLOYEES . Executive recognizes that Executive possesses and will possess Confidential Information about other employees, consultants and contractors of the Company and its subsidiaries relating to their education, experience, skills, abilities, compensation and benefits, and inter-personal relationships with suppliers to and customers of the Company and its subsidiaries. Executive recognizes that the information Executive possesses and will possess about these other employees, consultants and contractors is not generally known, is of substantial value to the Company and its subsidiaries in developing their respective businesses

and in securing and retaining customers, and has been and will be acquired by Executive because of Executive’s business position with the Company. Executive agrees that, during Executive’s employment with the Company, and for a period of twelve (12) months thereafter, Executive will not, directly or indirectly, solicit, recruit or hire any employee of the Company or any of its subsidiaries (or any individual who was an employee of the Company or any of its subsidiaries at any time during the six (6) months prior to such act of hiring, solicitation or recruitment) for the purpose of being employed by Executive or by any business, individual, partnership, firm, corporation or other entity on whose behalf Executive is acting as an agent, representative or employee and that Executive will not convey any such Confidential Information or trade secrets about other employees of the Company or any of its subsidiaries to any other person except within the scope of Executive’s duties hereunder. Notwithstanding the foregoing, Executive is not precluded from soliciting or hiring any individual who (i) responds to any public advertisement or general solicitation, or (ii) has been terminated by the Company prior to the solicitation.

(d) NON-SOLICITATION OF BUSINESS PARTNERS . During Executive’s employment with the Company, and for a period of twelve (12) months thereafter, Executive shall not, without the prior written consent of the Company, persuade or encourage any business partners or business affiliates of the Company or its subsidiaries to cease doing business with the Company or any of its subsidiaries or to engage in any business competitive with the Company or its subsidiaries.

(e) PROPRIETARY RIGHTS; ASSIGNMENT . All Employee Developments are and shall be made for hire by Executive for the Company or any of its subsidiaries or affiliates. “ Employee Developments ” means any discovery, invention, design, method, technique, improvement, enhancement, development, computer program, machine, algorithm or other work or authorship that (i) relates to the business or operations of the Company or any of its subsidiaries or affiliates, or (ii) results from or is suggested by any undertaking assigned to Executive or work performed by Executive for or on behalf of the Company or any of its subsidiaries or affiliates, whether created alone or with others, during or after working hours (including before the Effective Date). All Confidential Information and all Employee Developments shall remain the sole property of the Company or any of its subsidiaries or affiliates. Executive has not acquired and shall not acquire any proprietary interest in any Confidential Information or Employee Developments developed or acquired during the Term or during Executive’s employment with the Company before the Effective Date. To the extent Executive may, by operation of law or otherwise, acquire any right, title or interest in or to any Confidential Information or Employee Development, Executive hereby assigns to the Company all such proprietary rights. Executive shall, both during and after the Term, upon the Company’s request, promptly execute and deliver to the Company all such assignments, certificates and instruments, and shall promptly perform such other acts, as the Company may from time to time in its discretion deem necessary or desirable to evidence, establish, maintain, perfect, enforce or defend the Company’s rights in Confidential Information and Employee Developments.

(f) COMPLIANCE WITH POLICIES AND PROCEDURES . During the period that Executive is employed with the Company hereunder, Executive shall adhere to the policies and standards of professionalism set forth in the Company’s Policies and Procedures as they may exist from time to time.

(g) SURVIVAL OF PROVISIONS . The obligations contained in this Section 2 shall, to the extent provided in this Section 2, survive the termination or expiration of Executive’s employment with the Company and, as applicable, shall be fully enforceable thereafter in accordance with the terms of this Agreement. If it is determined by a court of competent jurisdiction in any state that any restriction in this Section 2 is excessive in duration or scope or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state.

3. TERMINATION OF PRIOR AGREEMENTS/EXISTING CLAIMS/AUTHORITY . Except for any agreements relating to currently outstanding equity or equity-linked awards as of the date of this Agreement (which remain outstanding, but subject to the terms of this Agreement), this Agreement constitutes the entire agreement between the parties and, as of the Effective Date, terminates and supersedes any and all prior agreements and understandings (whether written or oral) between the parties with respect to the subject matter of this Agreement. Executive acknowledges and agrees that neither the Company nor anyone acting on its behalf has made, and is not making, and in executing this Agreement, Executive has not relied upon, any representations, promises or inducements except to the extent the same is expressly set forth in this Agreement. The Company represents that it has due authority to enter into this Agreement and has taken all necessary corporate action to enter into this Agreement and provide the compensation set forth herein.

4. ASSIGNMENT; SUCCESSORS . This Agreement is personal in its nature and none of the parties hereto shall, without the consent of the others, assign or transfer this Agreement or any rights or obligations hereunder, other than Executive to Executive’s heirs and beneficiaries upon Executive’s death to the extent provided in this Agreement; provided that in the event of the merger, consolidation, transfer, or sale of all or substantially all of the assets of the Company with or to any other individual or entity, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge and perform all the promises, covenants, duties, and obligations of the Company hereunder, and in the event of any such assignment or transaction, all references herein to the “ Company ” shall refer to the Company’s assignee or successor hereunder.

5. WITHHOLDING . The Company shall make such deductions and withhold such amounts from each payment and benefit made or provided to Executive hereunder, as may be required from time to time by applicable law, governmental regulation or order.

6. WAIVER; MODIFICATION . Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof shall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times. This Agreement shall not be modified in any respect except by a writing executed by each party hereto.

7. SECTION 409A OF THE INTERNAL REVENUE CODE .

(a) This Agreement is not intended to constitute a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the rules and regulations issued thereunder (“ Section 409A ”). It is intended that any amounts payable under this Agreement and the Company’s and Executive’s exercise of authority or discretion hereunder shall comply with and avoid the imputation of any tax, penalty or interest under Section 409A of the Code. This Agreement shall be construed and interpreted consistent with that intent.

(b) For purposes of this Agreement, a “Separation from Service” occurs when Executive dies, retires or otherwise has a termination of employment with the Company that constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder.

(c) If Executive is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of Executive’s Separation from Service, Executive shall not be entitled to any payment or benefit pursuant to clause (i) of Section 1(d) until the earlier of (i) the date which is six (6) months after Executive’s Separation from Service for any reason other than death, or (ii) the date of Executive’s death. The provisions of this paragraph shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A. Any amounts otherwise payable to Executive upon or in the six (6) month period following Executive’s Separation from Service that are not so paid by reason of this Section 6(b) shall be paid (without interest) as soon as practicable after the date that is six (6) months after Executive’s Separation from Service (or, if earlier, as soon as practicable after the date of Executive’s death).

(d) To the extent that any reimbursement pursuant to this Agreement is taxable to Executive, Executive shall provide the Company with documentation of the related expenses promptly so as to facilitate the timing of the reimbursement payment contemplated by this paragraph, and any reimbursement payment due to Executive pursuant to such provision shall be paid to Executive on or before the last day of Executive’s taxable year following the taxable year in which the related expense was incurred. Such reimbursement obligations pursuant to this Agreement are not subject to liquidation or exchange for another benefit and the amount of such benefits that Executive receives in one taxable year shall not affect the amount of such benefits that Executive receives in any other taxable year.

(e) In no event shall the Company be required to pay Executive any “gross-up” or other payment with respect to any taxes or penalties imposed under Section 409A with respect to any benefit paid to Executive hereunder. The Company agrees to take any reasonable steps requested by Executive to avoid adverse tax consequences to Executive as a result of any benefit to Executive hereunder being subject to Section 409A, provided that Executive shall, if requested, reimburse the Company for any incremental costs (other than incidental costs) associated with taking such steps. All payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” under Section 409A.

8. REDUCTION OF CERTAIN PAYMENTS . Notwithstanding anything to the contrary in this Agreement, in any other agreement between Executive and the Company or any plan maintained by the Company, if there is a Section 280G Change in Control (as defined in Section 8(e)(i) below), the following rules shall apply:

(a) Except as otherwise provided in Section 8(c) below, if it is determined in accordance with Section 8(d) below that any portion of the Contingent Compensation Payments (as defined in 8(e)(ii) below) that otherwise would be paid or provided to Executive or for her benefit in connection with the 280G Change in Control would be subject to the excise tax imposed under Section 4999 of the Code (“ Excise Tax ”), then such Contingent Compensation Payments shall be reduced by the smallest total amount necessary in order for the aggregate present value of all such Contingent Compensation Payments after such reduction, as determined in accordance with the applicable provisions of Section 280G of the Code and the regulations issued thereunder, not to exceed the Excise Tax Threshold Amount (as defined in Section 8(e)(iii) below).

(b) If the Auditor (as defined in Section 8(d) below) determines that any reduction is so required, the Payments to be reduced, and the reduction to be made to such Payments, shall be determined by the Auditor in its sole discretion in a manner which will result in the least economic cost to Executive, and if the reduction with respect to two or more Payments would result in equivalent economic cost to Executive, such Payments shall be reduced in the inverse chronological order of the dates on which such Payments were otherwise scheduled to be made to Executive, until the required reduction has been fully achieved.

(c) Notwithstanding the foregoing, no reduction in any of the Executive’s Contingent Compensation Payments shall be made pursuant to Section 8(a) above if it is determined in accordance with Section 8(d) below that the After Tax Amount of the Contingent Compensation Payments payable to Executive without such reduction would exceed the After Tax Amount of the reduced Contingent Compensation Payments payable to her in accordance with Section 8(a) above. For purposes of the foregoing, (x) the “After Tax Amount” of the Contingent Compensation Payments, as computed with, and as computed without, the reduction provided for under Section 8(a) above, shall mean the amount of the Contingent Compensation Payments, as so computed, that Executive would retain after payment of all taxes (including without limitation any federal, state or local income taxes, the Excise Tax or any other excise taxes, any medicare or other employment taxes, and any other taxes) imposed on such Contingent Compensation Payments in the year or years in which payable; and (y) the amount of such taxes shall be computed at the rates in effect under the applicable tax laws in the year in which the 280G Change in Control occurs, or if then ascertainable, the rates in effect in any later year in which any Contingent Compensation Payment is expected to be paid following the 280G Change in Control, and in the case of any income taxes, by using the maximum combined federal, state and (if applicable) local income tax rates then in effect under such laws.

(d) A determination as to whether any Excise Tax is payable with respect to Executive’s Contingent Compensation Payments and if so, as to the amount thereof, and a determination as to whether any reduction in Executive’s Contingent Compensation Payments is required pursuant to the provisions of Sections 8(a) and 8(c) above, and if so, as to the amount of

the reduction so required, shall be made by no later than 15 days prior to the closing of the transaction or the occurrence of the event that constitutes the 280G Change in Control. Such determinations, and the assumptions to be utilized in arriving at such determinations, shall be made by an independent auditor (the “ Auditor ”) jointly selected by Executive and the Company, all of whose fees and expenses shall be borne and directly paid solely by the Company. The Auditor shall be a nationally recognized public accounting firm which has not, during the two years preceding the date of its selection, acted in any way on behalf of the Company or any of its affiliates. If Executive and the Company cannot agree on the firm to serve as the Auditor, then Executive and the Company shall each select one accounting firm and those two firms shall jointly select the accounting firm to serve as the Auditor. The Auditor shall provide a written report of its determinations, including detailed supporting calculations, both to Executive and to the Company. The determinations made by the Auditor pursuant to this Section 8(d) shall be binding upon Executive and the Company.

(e) For purposes of the foregoing, the following terms shall have the following respective meanings:

(i) “ 280G Change in Control ” shall mean a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company, as determined in accordance with section 280G(b)(2) of the Code and the regulations issued thereunder.

(ii) “ Contingent Compensation Payment ” shall mean any payment or benefit in the nature of compensation that is to be paid or provided to Executive or for her benefit in connection with a 280G Change in Control (whether under this Agreement or otherwise, including by the entity, or by any affiliate of the entity, whose acquisition of the stock of the Company or its assets constitutes the Change in Control) if Executive is a “disqualified individual” (as defined in Section 280G(c) of the Code) at the time of the 280G Change in Control, to the extent that such payment or benefit is “contingent” on the 280G Change in Control within the meaning of Section 280G(b)(2)(A)(i) of the Code and the regulations issued thereunder.

(iii) “ Excise Tax Threshold Amount ” shall mean an amount equal to (x) three times Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations issued thereunder, less (y) $1,000.

9. HEADING REFERENCES . Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. References to “this Agreement” or the use of the term “hereof” shall refer to these Standard Terms and Conditions and the Employment Agreement attached hereto, taken as a whole.

10. REMEDIES FOR BREACH .

(a) Executive expressly agrees and understands that Executive will notify the Company in writing of any alleged breach of this Agreement by the Company, and the Company will have thirty (30) days from receipt of Executive’s notice to cure any such breach. Executive expressly agrees and understands that in the event of any termination of Executive’s employment by the Company during the Term, the Company’s contractual obligations to Executive shall be

fulfilled through compliance with its obligations under Section 1 of the Standard Terms and Conditions.

(b) Executive expressly agrees and understands that the remedy at law for any breach by Executive of Section 2 of the Standard Terms and Conditions will be inadequate and that damages flowing from such breach are not usually susceptible to being measured in monetary terms. Accordingly, it is acknowledged that, upon Executive’s violation of any provision of such Section 2, the Company shall be entitled to obtain from any court of competent jurisdiction immediate injunctive relief and obtain a temporary order restraining any threatened or further breach as well as an equitable accounting of all profits or benefits arising out of such violation. Nothing in this Agreement shall be deemed to limit the Company’s remedies at law or in equity for any breach by Executive of any of the provisions of this Agreement, including Section 2, which may be pursued by or available to the Company.

11. SEVERABILITY . In the event that a court of competent jurisdiction determines that any portion of this Agreement is in violation of any law or public policy, only the portions of this Agreement that violate such law or public policy shall be stricken. All portions of this Agreement that do not violate any statute or public policy shall continue in full force and effect. Further, any court order striking any portion of this Agreement shall modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement.

12. INDEMNIFICATION . The Company shall indemnify, defend and hold harmless Executive to the fullest extent permitted by applicable law in effect at the time of the subject act or omission, and shall advance to Executive reasonable attorneys’ fees and expenses as such fees and expenses are incurred (subject to an undertaking from Executive to repay such advances if it shall be finally determined by a judicial decision which is not subject to further appeal that Executive was not entitled to the reimbursement of such fees and expenses), and Executive will be entitled to the protection of any insurance policies that the Company may elect to maintain generally for the benefit of its directors and officers (subject to the terms and conditions contained therein), against all liabilities, costs, charges and expenses incurred or sustained by her in connection with a Proceeding if Executive acted in good faith and in a manner Executive reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to a criminal proceeding, had no reasonable cause to believe Executive’s conduct was unlawful. For the purposes of this Section, a “ Proceeding ” shall mean any action, suit or proceeding, whether civil, criminal, administrative or investigative, in which Executive is made, or is threatened to be made, a party to, or a witness in, such action, suit or proceeding by reason of the fact that Executive is or was an officer, director or employee of Company or any of its affiliates or is or was serving as an officer, director, member, employee, trustee or agent of any other entity at the request of the Company. This Section shall not limit Executive’s rights to indemnification under the Company’s bylaws and the Company’s certificate of incorporation, as in effect from time to time.

[The Signature Page Follows]

ACKNOWLEDGED AND AGREED:

Date: August 8, 2018

MATCH GROUP, INC.

/s/ Jared Sine

By: Jared Sine

Title: General Counsel & Secretary

/s/ Sharmistha Dubey

SHARMISTHA DUBEY

Exhibit A

Form of Release

THIS RELEASE (the “ Release ”) is entered into between Sharmistha Dubey (“ Executive ”) and Match Group, Inc., a Delaware corporation (the “ Company ”), for the benefit of the Company. The entering into and non-revocation of this Release is a condition to Executive’s right to receive certain payments and benefits under Sections 1(d)(i) and (iii) of the employment agreement entered into by and between Executive and the Company, dated as of August 8, 2018 (the “ Employment Agreement ”). Capitalized terms used and not defined herein shall have the meaning provided in the Employment Agreement.

Accordingly, Executive and the Company agree as follows.

1. In consideration for the payments and other benefits provided to Executive by the Employment Agreement, to which Executive is not otherwise entitled, and the sufficiency of which Executive acknowledges, Executive represents and agrees, as follows:

(a) Executive, for Executive’s self and Executive’s heirs, administrators, representatives, executors, successors and assigns (collectively “ Releasers ”), hereby irrevocably and unconditionally releases, acquits and forever discharges and agrees not to sue the Company or any of its parents, subsidiaries, divisions, affiliates and related entities and their current and former directors, officers, shareholders, trustees, employees, consultants, independent contractors, representatives, agents, servants, successors and assigns and all persons acting by, through or under or in concert with any of them (collectively “ Releasees ”), from all claims, rights and liabilities up to and including the date of this Release arising from or relating to Executive’s employment with, or termination of employment from, the Company, and from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of actions, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected and any claims of wrongful discharge, breach of contract, implied contract, promissory estoppel, defamation, slander, libel, tortious conduct, employment discrimination or claims under any federal, state or local employment statute, law, order or ordinance, including any rights or claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq. (“ ADEA ”), or any other federal, state or municipal ordinance relating to discrimination in employment. Nothing contained herein shall restrict the parties’ rights to enforce the terms of this Release.

(b) To the maximum extent permitted by law, Executive agrees that Executive has not filed, nor will Executive ever file, a lawsuit asserting any claims which are released by this Release, or to accept any benefit from any lawsuit which might be filed by another person or government entity based in whole or in part on any event, act, or omission which is the subject of this Release.

(c) This Release specifically excludes (i) Executive’s rights and the Company’s obligations to provide severance payments under Section 1 of the Employment Agreement; (ii) Executive’s right to indemnification under Section 12 of the Standard Terms and Conditions attached to the Employment Agreement or otherwise under the Company’s organizational documents, applicable insurance policies or applicable law; (iii) Executive’s right to assert claims for workers’ compensation or unemployment benefits; (v) Executive’s vested rights under any retirement or welfare benefit plan of the Company or under any equity or equity-linked award that remains

outstanding following the Termination Date (as defined in the Employment Agreement); or (vi) any other rights that may not be waived by an employee under applicable law. Nothing contained in this Release shall release Executive from Executive’s obligations, including any obligations to abide by restrictive covenants, under the Employment Agreement that continue or are to be performed following termination of employment.

(d) The parties agree that this Release shall not affect the rights and responsibilities of the US Equal Employment Opportunity Commission (hereinafter “ EEOC ”) to enforce ADEA and other laws. In addition, the parties agree that this Release shall not be used to justify interfering with Executive’s protected right to file a charge or participate in an investigation or proceeding conducted by the EEOC. The parties further agree that Executive knowingly and voluntarily waives all rights or claims (that arose prior to Executive’s execution of this Release) the Releasers may have against the Releasees, or any of them, to receive any benefit or remedial relief (including, but not limited to, reinstatement, back pay, front pay, damages, attorneys’ fees, experts’ fees) as a consequence of any investigation or proceeding conducted by the EEOC.

2. Executive acknowledges that the Company has specifically advised Executive of the right to seek the advice of an attorney concerning the terms and conditions of this Release. Executive further acknowledges that Executive has been furnished with a copy of this Release, and Executive has been afforded forty-five (45) days in which to consider the terms and conditions set forth above prior to this Release. By executing this Release, Executive affirmatively states that Executive has had sufficient and reasonable time to review this Release and to consult with an attorney concerning Executive’s legal rights prior to the final execution of this Release. Executive further agrees that Executive has carefully read this Release and fully understands its terms. Executive understands that Executive may revoke this Release within seven (7) days after signing this Release. Revocation of this Release must be made in writing and must be received by the General Counsel at the Company, 8750 North Central Expressway, 14 ^th Floor, Dallas, TX 75231 within the time period set forth above.

3. This Release will be governed by and construed in accordance with the laws of the state of Texas, without giving effect to any choice of law or conflicting provision or rule (whether of the state of Texas or any other jurisdiction) that would cause the laws of any jurisdiction other than the state of Texas to be applied. In furtherance of the foregoing, the internal law of the state of Texas will control the interpretation and construction of this agreement, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply. The provisions of this Release are severable, and if any part or portion of it is found to be unenforceable, the other paragraphs shall remain fully valid and enforceable.

4. This Release shall become effective and enforceable on the eighth day following its execution by Executive, provided Executive does not exercise Executive’s right of revocation as described above. If Executive fails to sign and deliver this Release or revokes Executive’s signature, this Release will be without force or effect, and Executive shall not be entitled to the payments and benefits of Section 1(d), with the exception of Section 1(d)(ii) of the Employment Agreement.



			Sharmistha Dubey
Date:

Exhibit 31.1

Certification

I, Amanda W. Ginsberg, certify that:


1.	I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2018 of Match Group, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a 15(f) and 15d 15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Dated:	November 9, 2018	/s/ AMANDA W. GINSBERG
		Amanda W. Ginsberg Chief Executive Officer

Exhibit 31.2

Certification

I, Gary Swidler, certify that:


1.	I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2018 of Match Group, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a 15(f) and 15d 15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Dated:	November 9, 2018	/s/ GARY SWIDLER
		Gary Swidler Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Amanda W. Ginsberg, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:


(1)	the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2018 of Match Group, Inc. (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and


(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Match Group, Inc.



Dated:	November 9, 2018	/s/ AMANDA W. GINSBERG
		Amanda W. Ginsberg Chief Executive Officer

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Gary Swidler, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:


(1)	the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2018 of Match Group, Inc. (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and


(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Match Group, Inc.



Dated:	November 9, 2018	/s/ GARY SWIDLER
		Gary Swidler Chief Financial Officer