Match Group

Prospectus summary

Business

Our mission

Establishing a romantic connection is a fundamental human need. Whether it's a good date, a meaningful relationship or an enduring marriage, romantic connectivity lifts the human spirit. Our mission is to increase romantic connectivity worldwide.

Who we are

Match Group is the world's leading provider of dating products. We operate a portfolio of over 45 brands, including Match, OkCupid, Tinder, Meetic, Twoo, OurTime and FriendScout24, each designed to increase our users' likelihood of finding a romantic connection. Through our portfolio of trusted brands, we provide tailored products to meet the varying preferences of our users. In addition, we have agreed to acquire Plentyoffish Media Inc. See "Proposed Acquisition of PlentyOfFish." We currently offer our dating products in 38 languages across more than 190 countries, and we had approximately 59 million monthly active users, or MAU, and approximately 4.7 million paid members, using our dating products as of the quarter ended September 30, 2015.

Our target market includes all adults in North America, Western Europe and other select countries around the world who are not in a committed relationship and who have access to the internet, which, based on a survey administered by Research Now in July 2015, we estimate at approximately 511 million people. Consumer preferences within this population vary significantly, influenced in part by demographics, geography, religion and sensibility. As a result, the market for dating products is fragmented, and no single product has been able to effectively serve the dating category as a whole.

Given wide ranging consumer preferences, we approach the category with a brand portfolio strategy, through which we attempt to offer dating products that collectively appeal to the broadest spectrum of consumers. We believe that this approach maximizes our ability to capture additional users, as demonstrated by our MAU and paid member count compound annual growth rates between the quarter ended September 30, 2011, and the quarter ended September 30, 2015 of 63% and 23%, respectively. We increasingly apply a centralized discipline to learnings, best practices and technologies across our brands in order to increase growth, reduce costs and maximize profitability. This approach allows us to quickly introduce new products and features, optimize marketing strategies, reduce operating costs and more effectively deploy talent across our organization.

Coinciding with the general trend toward mobile technology, we have experienced a meaningful shift in our user base from desktop devices to mobile devices, and now offer mobile experiences on substantially all of our dating products. During the first half of 2015, 68% of our new users signed up for our products through mobile channels, as compared to only 27% during the first half of 2013. This shift has enabled us to reach groups of users which had previously proven elusive, such as the millennial audience; for example, Tinder, a mobile-only product, has been able to tap into this audience rapidly over the last few years. Additionally, in previously desktop-oriented products like Match, the shift to mobile has led to increased usage of our products, as mobile users on average access our products at meaningfully higher rates than do those users who access our products on desktop. According to data obtained from mobile analytics firm AppAnnie, during the three months ended June 30, 2015, we operated four of the top five revenue grossing dating applications across the Apple App Store and Google Play Store in North America, and three of the top five worldwide, in each case, pro forma for the acquisition of PlentyOfFish.

Substantially all of our dating revenue is derived directly from our users. The significant majority of that revenue comes from recurring membership fees, which typically provide unlimited access to a bundle of features for a specific period of time, and the balance from à la carte features, where users pay a fee for a specific action or event. Each of our brands offers a combination of free and paid features targeted to its unique community. On a brand-by-brand basis, our monetization decisions seek to optimize user growth, revenue and the vibrancy and productivity of the relevant community of users. In addition to direct revenue from our users, we generate revenue from online advertisers who pay to reach our large audiences.

In addition to our dating business, we also operate a non-dating business in the education industry through our ownership of The Princeton Review. The Princeton Review provides a variety of test preparation, academic tutoring and college counseling services.

Our revenue increased from $713.4 million in 2012 to $803.1 million in 2013 and then to $888.3 million in 2014, representing year-over-year increases of 13% and 11%, respectively. In 2012, 2013 and 2014, we generated Adjusted EBITDA of $236.5 million, $271.2 million, and $273.4 million, respectively, operating income of $186.6 million, $221.3 million and $228.6 million, respectively, and net earnings of $90.3 million, $126.6 million and $148.4 million, respectively. See "Selected historical combined financial and other information" for a description of how we define Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating income.

Market opportunity

Connecting with people and fostering relationships are critical needs that influence everyone's happiness. As a result, the dating market presents a significant opportunity for Match Group. We consider our addressable market to be all adults in North America, Western Europe and other select countries around the world who are not in committed relationships and have access to the internet, which, based on a survey administered by Research Now in July 2015, we estimate at approximately 511 million people.

In countries with developed economies such as the United States, our addressable market has been expanding due to the aging population, increasing internet use among older adults and growth in singles as a percent of the total population. In countries with emerging economies, such as India and China, growth in the addressable market is driven by similar factors, most notably pronounced growth in internet access. Overall, our addressable market is expected to grow from approximately 511 million people to approximately 672 million people by 2019, assuming the single population in each country grows in line with the projected growth rate of the country's total population.

Enabling dating in a digital world

Prior to the proliferation of computers and mobile devices, human connections traditionally were limited by social circles, geography and time. Today, the adoption of the internet and mobile technology has significantly expanded the ways in which people can build relationships, create new interactions and develop romantic connections.

We believe dating products serve as a natural extension of the traditional means of meeting people and provide a number of benefits for their users, including:

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Expanded options: Dating products provide users access to a large number of like-minded people they otherwise would not have a chance to meet.

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Efficiency: The search and matching features, as well as the profile information available on dating products, allow users to filter a large number of options in a short period of time, increasing the likelihood that users will make a connection with someone.

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More comfort and control: Compared to the traditional ways that people meet, dating products provide an environment that makes the process of reaching out to new people less uncomfortable. This leads to many people who would otherwise be passive participants in the dating process taking a more active role.

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Convenience: The nature of the internet and the proliferation of mobile devices allow users to connect with new people at any time of the day, regardless of where they are.

When selecting a dating product, we believe that users consider the following attributes:

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Brand recognition: Brand is very important. Users generally associate strong dating brands with a higher likelihood of success and a higher level of security.

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Successful experiences: Demonstrated success of other users attracts new users through word-of-mouth recommendations. Successful experiences also drive repeat usage.

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Community identification: Users typically look for dating products that offer a community with which the user most strongly associates. By selecting a dating product that is focused on a particular demographic, religion, geography or intent (for example, casual dating or more serious relationships), users can increase the likelihood that they will make a connection with someone with whom they identify.

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Product features and user experience: Users tend to gravitate towards dating products that offer features and user experiences that resonate with them, such as question-based matching algorithms, location-based features, offline events or searching capabilities. User experience is also driven by the type of user interface (for example, swiping versus scrolling), a particular mix of free and paid features, ease of use and security. Users expect every interaction with a dating product to be seamless, intuitive and secure.

Our competitive advantages

We believe the following attributes provide us with competitive advantages in the dating business:

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Strong brand recognition: A strong brand is one of the primary factors people consider when choosing a dating product. Brands drive organic traffic, significantly affect ranking in search engines and app stores and increase the efficiency of paid marketing. Strong nationally recognized brands in the dating category traditionally take many years to build. According to data obtained from Research Now, four of the top five dating brands by unaided awareness in North America are owned by us, and 89% of singles in North America recognize at least one of our brands when shown a list of dating brands, in each case, pro forma for the acquisition of PlentyOfFish.

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Scale: Significant scale of users in the local markets in which a dating brand operates is an advantage in providing the most effective user experience. Large scale offers more opportunities for potential connections and leads to better outcomes for a brand's users. This in turn drives a higher frequency of word-of-mouth recommendations from satisfied users, which is then multiplied across a broader base of users, creating a reinforcing loop in which scale drives further scale. We currently own and operate four

of the top five brands in North America measured in terms of unaided awareness, and we believe that this scale is one of the big competitive advantages for our principal brands.

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Multi-brand approach to customer acquisition: We have more brands than any other participant in our category. Our multi-brand approach allows us to provide dating products that appeal to a wide spectrum of users. By positioning what we believe to be the most relevant brand to each user segment, we are able to achieve greater reach at lower overall customer acquisition costs. Additionally, we are increasingly placing advertisements for our products within our other products. When such an advertisement is successful and a user of one of our products becomes a user of another of our products, the second product has acquired a new customer for no incremental cost. Because the second product would otherwise have had to engage in its own marketing efforts to acquire the customer, we are able to decrease the average cost of customer acquisition across our entire portfolio. During the six months ended June 30, 2015, our Match brand and affinity brands in North America generated approximately 11% of new registrations via this type of cross-promotion.

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Scale-driven customer acquisition competency: We efficiently utilize online and offline advertising to increase brand awareness and drive new user registrations. Our long history and significant scale has allowed us to develop analytical and operational approaches that we believe are more sophisticated than any of our single brands would be able to develop as a standalone company. We believe that no one else in the category approaches the scale of our paid customer acquisition efforts.

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Monetization expertise: On a brand-by-brand basis, we continually test and customize our offerings to determine which features to offer for a fee and which features to offer for free. Over the course of our operating history, these tests have helped us develop significant expertise in maximizing revenue while maintaining a brand's ability to attract new users and maintain a vibrant and active community of users. We believe that our approach to monetization is more sophisticated than any of our single brands would have been able to develop on its own.

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Ability to monetize through advertising: Given the significant size and diversity of our user base, advertisers could reach approximately 59 million MAU across our brands as of the quarter ended September 30, 2015. We offer advertisers the ability to customize their advertisements based on analytics we collect about user interests and behavior. We believe that our scale and analytics-driven marketing make us more attractive to advertisers. Our products' target markets also provide advertisers with access to several highly coveted demographic groups, including the millenial generation that our Tinder product has penetrated effectively.

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Commitment to product development: Each of our brands has a robust product roadmap. Product development and innovation are generally brand-specific and significant resources are devoted to constant improvements of our various products. Accordingly, we have multiple product development teams working at any given time on a variety of features at a breadth that, we believe, could not be replicated by any of our single brands as standalone entities.

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Shared learning: While maintaining each brand's unique character, we facilitate knowledge and experience sharing across our portfolio in the areas of customer acquisition, monetization and product development. While each brand generally is responsible for its own progress in these areas, the ability for each to quickly leverage the successes of other brands and avoid their failures, substantially increases the success rates for each brand in each of these key drivers of business performance.

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Demonstrated ability to incubate new businesses: We have a history of successfully introducing new dating brands. For example, OurTime was launched in 2011 and Tinder in 2012. We expect to continue to

devote resources to developing new dating products and believe our industry expertise and significant cash flow provide a unique ability to succeed in this endeavor.

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Identifying opportunistic acquisitions: We have developed a core competency for identifying, acquiring, integrating and scaling businesses. Since January 2009, we have invested approximately $1,284.0 million to acquire 25 new brands for our dating portfolio, including OkCupid, Meetic, Twoo and PlentyOfFish.

Our strategy

We are pursuing the following principal strategies to grow our dating business:

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Focus on product development: We devote substantial resources to developing new features and functionalities for our products. We believe there are meaningful improvements that can be made to the efficacy and appeal of products in our category, both through existing and emerging technologies. Increasing product efficacy and appeal are two of the major drivers of increased category adoption.

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Become even more mobile: We are increasingly concentrated on mobile development. During the six months ended June 30, 2015, 68% of our new registrations were from a mobile device. We are currently allocating resources to more rapidly increase our mobile development, which we believe represents a significant growth opportunity for our business.

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Improve customer acquisition efforts: We continue to focus on building our traditional paid acquisition channels, including offline media, with the intent to reach new customers, increase the demand for dating products and drive repeat usage. Additionally, we are developing our expertise in paid mobile acquisition and digital video channels. Finally, we are focused on expanding the virality of our brands and maintaining a high rank in app stores. We believe we have the ability to expand our marketing reach over time.

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Drive advertising revenue: Generating advertising revenue has historically not been a principal focus for us. As a result, we believe our advertising revenue is substantially below what we should be able to achieve. Part of our strategy is to meaningfully increase the sell-through at our Tinder brand, which is currently below 2% of available ad inventory, and to meaningfully increase the percentage of ad inventory on our other brands sold on a direct basis, which currently is below 2% of total ad inventory sold. We believe that there is meaningful upside to our current revenue levels if we achieve these objectives.

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Dynamically monetize our brands: We will continue to optimize pricing and the bundle of free and paid offerings for each brand. We also expect to continue to develop new features that will both improve the user experience and increase the number of people willing to pay for the use of our products. We believe that most of our products have the opportunity to increase both the percentage of users who are paid members and the amount that those users pay us over time.

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Continue to expand our portfolio: In the past, we have successfully completed acquisitions such as OkCupid, Meetic, and Twoo, as well as launched Tinder and OurTime. Each acquisition or new product launch has resulted in increased adoption levels either within a geography or a demographic. We intend to continue to pursue strategic opportunities in existing and new markets globally, and expect that additional growth will be generated through these pursuits.

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Leverage our portfolio: We believe we are only beginning to realize the benefits that ownership of multiple brands brings to our company. We will continue to optimize our operations across brands to reduce both fixed and variable costs, increase success rates in product development and customer acquisition, and accelerate speed to market.

Organizational approach

We operate a portfolio of brands that both compete and collaborate with each other. We attempt to empower individual business leaders with the authority and incentives to grow each of our brands. Our businesses compete with each other and with third-party businesses in our category on brand characteristics, product features and business model. We also attempt to centrally facilitate excellence and efficiency across the entire portfolio by:

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centralizing certain administrative areas like legal, human resources and finance across the entire portfolio to enable each brand to focus more on growth;

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developing talent across the portfolio to deploy the best talent in the most critical positions across the company at any given time; and

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sharing data to leverage product and marketing successes across our businesses rapidly for competitive advantage.

Relationship with IAC/InterActiveCorp

We are currently a wholly-owned subsidiary of IAC/InterActiveCorp. Upon completion of this offering, IAC will own all of the shares of our outstanding Class B common stock, representing approximately % of our total outstanding shares of capital stock and approximately % of the total voting power of our outstanding capital stock (or approximately % of our total outstanding shares of capital stock and approximately % of the total voting power of our outstanding capital stock, if the underwriters exercise in full their option to purchase additional shares of our common stock in this offering).

We intend to enter into various agreements with IAC for administrative and other services, including a master transaction agreement, an employee matters agreement, a tax sharing agreement, a services agreement and an investor rights agreement. For more information regarding these agreements, see "Certain relationships and related party transactions."

Proposed acquisition of PlentyOfFish

On July 13, 2015, we entered into a stock purchase agreement to acquire all of the outstanding equity interests in Plentyoffish Media Inc., or PlentyOfFish, for aggregate consideration of $575.0 million, subject to a customary post-closing adjustment based on, among other things, the amount of working capital in the business at the closing date.

We currently anticipate that the acquisition of PlentyOfFish will close in the fourth quarter of 2015, although there can be no assurance that the acquisition will close in a timely manner or at all.

Implications of being an emerging growth company

As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We will continue to be an emerging growth company until the earliest to occur of:

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the last day of the fiscal year following the fifth anniversary of this offering;

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the last day of the fiscal year in which we have more than $1.0 billion in annual revenues;

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the last day of the fiscal year in which we are deemed to be a large accelerated filer, which means the market value of our capital stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30; or

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the date on which we have issued more than $1.0 billion of non-convertible debt during the prior three-year period.

Until we cease to be an emerging growth company, we may take advantage of reduced reporting requirements generally unavailable to other public companies. Those provisions allow us to: