This Could Be Match Group's Biggest Opportunity

By Markets Fool.com

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Match Group(NASDAQ: MTCH) is best known in the U.S. for its namesake website and Tinder, the location-based dating app that's become a millennial craze since its launch in 2012.

However, with a portfolio of 45 brands, the company is much more than those two sites. And though many of its products have gained prominence in the U.S., the company's biggest opportunity may lie overseas where a different set of brands dominates and where online dating is growing quickly.

Match Group's international revenue has been significantly outgrowing its domestic segment. In its most recent quarter, international revenue grew 40% compared to just a 16% uptick on the domestic side. Paid member contributions were also up 46% internationally, versus 23% in North America.

Nearly two thirds of the company's Dating revenue still comes from North America, but that appears to be changing as the international market is larger and growing faster.

Match hired its first head of international operations, Garrick Coelho, in the last quarter, who brings experience from Google and YouTube. Thus far, the company's primary international push has been in Europe, but markets in Latin America and Asia also present promising growth opportunities. Let's take a closer look at the company's internationally focused businesses.

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Meetic and Twoo

Two of Match's Group's lesser-known sites in the states, Meetic and Twoo, are among the biggest international brands in online dating.

Meetic, which is the parent organization for Match Europe and FriendScount24, is Europe's largest dating site, covering 16 countries and attracting 6 million unique visitors a month. Founded in 2001, Meetic is also one of the oldest dating sites in Europe.

Twoo, meanwhile, is available in 38 countries and claims 9 million monthly active users.Unlike other dating sites, Twoo does not have an algorithm matching users, but rather encourages users to chat with each other, and removes inactive users after three months.

Other popular sites internationally include FriendScout24, which is the leading online dating product in Germany, and Match's American brands including Match, PlentyofFish, and Tinder.

All bets are on Tinder

Match Group's revenue growth has accelerated this year thanks to its acquisition of PlentyofFish last October and the explosive growth of Tinder. Dating revenue last year was up just 9%, compared to a 23% jump last quarter.

The mobile-only dating app has risen to scale and popularity faster than any other dating product ever.On the company's recent earnings call, it noted "exceptional" paid member growth in Tinder internationally as well as "strong" paid member growth in Meetic. In the second quarter, the company added more than 200,000 paid members on Tinder and also launched Tinder Plus,which has improved conversion and average revenue per user. Internationally, the company just launched Tinder plus in other English-speaking countries after a successful test in Australia, which should help drive continued international growth.

Separately, the company acknowledged that advertising growth in Tinder was not as strong as expected due to internal competition for product and tech resources, though that problem should be fixed over time.

The growth of mobile has presented a new opportunity for Match, and has driven the explosive performance of Tinder. As the company adjusted its advertising platform to mobile, revenue growth should improve as well.

With international growth surging and Match just beginning to roll out Tinder Plus abroad, look for those categories to push profits higher in the coming quarters.

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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Match Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.