Key Points
- Bumble reduced its annual revenue growth forecast from 8-11% to 1-2%, leading to a 30% share drop.
- Second-quarter revenue was $268.6 million, below analysts’ average estimate of $273 million.
- New features like “opening moves” and a refreshed app have yet to impact revenue significantly.
- Bumble plans to introduce more new features and an AI-assisted photo picker but will slow down some monetization efforts.
Bumble (BMBL.O) ‘s share price significantly declined, dropping 30% after the company slashed its annual revenue growth forecast. The dating app operator’s disappointing performance and revised projections have stoked investor concerns about its growth prospects.
Bumble’s second-quarter revenue fell short of Wall Street estimates, unlike its larger competitor, Match Group (MTCH.O), which reported strong second-quarter results driven by positive trends at Tinder and robust growth at Hinge. Bumble’s revenue for the second quarter was $268.6 million, missing analysts’ average estimate of $273 million.
In response to the lackluster performance, Bumble reduced its annual revenue growth forecast from 1% to 2%, down from its previous expectations of 8% to 11%. This substantial revision has led to investor uncertainty about the company’s future growth trajectory. According to Third Bridge analyst Jamie Lumley, “Bumble’s downward revisions on revenue and earnings guidance have investors concerned that the company is unclear about its growth story from here.”
The company’s growth initiatives, including launching a refreshed Bumble app and new features such as “opening moves,” which allows women to set up a custom question to initiate conversations, have not yielded the expected results. Bumble expects third-quarter revenue to be between $269 million and $275 million, falling short of analysts’ average estimate of $296.1 million.
Chandler Willison, a research analyst at M Science, highlighted Bumble’s challenges, stating, “Macroeconomic conditions and the online dating market have become generally less favorable as younger consumers’ tastes and willingness to pay continue to change.” Despite these challenges, Bumble’s total paying users increased to 4.1 million in the quarter, up from 3.6 million a year earlier.
CEO Lidiane Jones addressed the concerns during an earnings call, emphasizing the company’s long-term strategy. “While our efforts may turn away some lower engagement users in the near term, we believe this will ultimately result in a more authentic and better experience for our users over time,” Jones said. She also announced that Bumble would launch new features, including more options for making “opening moves” through the fall and early winter. Additionally, the company plans to introduce an AI-assisted photo picker to simplify profile creation.
Bumble reported a profit per share of 22 cents, surpassing the estimate of 13 cents. Despite this, the company will slow down certain monetization efforts, such as expanding its Premium+ offering, initially planned for the second half of the year.
