As investors in the internet industry have begun to wonder if online dating platforms will sink or swim in the case of a recession, looking back on the last recession may shed some light on a potential shelter from the storm.-----Transcript-----Welcome to Thoughts on the Market. I'm Lauren Schenk, Equity Analyst covering the small and mid-cap Internet Industry. Along with my colleagues, bringing you a variety of perspectives, I'll be giving some insight into consumer spending trends through the lens of online dating. It's Friday, July 8th, at noon in New York. How does online dating perform in a recession? Believe it or not, it's the number one question I've heard from investors over the last several weeks. And I think another way of getting at this question broadly, and you can really extrapolate this across many industries, is do consumers view a product as a necessary staple or as non-essential spending? On one hand amid elevated inflation on indispensable items like gas and groceries, you may think consumers would view online dating as a nonessential item. On the other hand, finding love or a significant other ranks usually pretty high in most people's life goals, so maybe it's a staple. So that's the question we sought to answer recently when we looked into how online dating platforms perform during a recession. To dig into this, we looked into some historical data from 2007-2010. What we found was that, for one online dating platform, subscriber growth was largely unaffected and actually accelerated slightly in 2008 and 2009. The net impact for this platform was a slight slowdown in organic revenue growth from low double digit growth in 2007, to mid-single digits in 2008 and 2009, and then accelerating to high teens by the end of 2010. So overall, we found that the continued need for human connection, and the low price of online dating, resulted in minimal business impact during the global financial crisis, despite a significant pullback in consumer spending. Looking at today, online dating has now become a more widely accepted service to a wider range of people. But how are things different from the last recession? Well, I'll share a few key differences from our research. First, online is now a primary way for couples to meet, with the percentage of U.S. relationships starting online increasing from 22% in 2009 to 39% in 2017, which makes it more of a staple than discretionary. Second, we believe there is greater pent up demand for the product today than in 2008 and 2009, given COVID. Which could better insulate online dating, since consumers may be less inclined to cut spending on services that were under consumed during the height of COVID. Third, the top brands have changed and are now predominantly mobile based versus desktop, and attract a younger user who typically have a lower income than 40 plus year olds. And finally, given the brand and geography shifts, a la carte revenue from things like profile boosting is a larger percentage of revenue today than during the global financial crisis, which may prove more discretionary than subscriptions. How does this impact our view of how online dating could perform in a potential recession? Given the 2008-2009 results and the differing macro factors of a potential 2023 recession we have increased confidence in our view that online dating is one of the best consumer internet sub industries to weather a potential recession storm. After all, people still need love and relationships in recession and you can argue they need it more. And the low average monthly cost means it's likely not an item that single consumers would cut first. Thanks for listening. If you enjoy the show, please leave us a review on Apple Podcasts and share Thoughts on the Market with a friend or colleague today.