Bumble stock crashes 33%, set to lose $350 million in market value after dating app trims 2024 revenue guidance

Bumble shares crashed nearly 33 per cent on Thursday, August 8, to hit a fresh record low after the women-centric dating app trimmed its annual sales growth and 2024 revenue guidance, signaling that the overhaul of the brand’s flagship app has failed to reignite growth. The $1 billion company is set to lose more than $350 million in market value. The shares fell as much as 39 per cent after trading opened in New York on Thursday, its biggest intraday decline on record.

The company's second-quarter results were below Wall Street's estimates. Bumble is now said to have paused some of its revenue-generation efforts. The fortunes of Bumble have turned since its $14 billion blockbuster Nasdaq debut in 2021. Shares crashed to a record low earlier this year after issuing a weak sales outlook and cutting around a third of its workforce. 

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Bumble Q2 Results: Key Metrics

The Austin, Texas-based company's total average revenue per paying user decreased to $21.37 in the second quarter from $23.23 a year earlier. Bumble's price-to-earnings ratio, a key metric in valuing stocks, was 7.91 times, much lower than rival Match Group's 15.15 multiple.

Revenue for the period ended June 30 increased 3.4 per cent to $268.6 million, missing the average analyst estimate of $273.2 million. The number of users paying for Bumble — an important metric for investors — rose 14.7 per cent to 2.8 million, in line with Wall Street estimates.

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Bumble Q3 outlook, 2024 guidance

The company’s struggles to expand its user base reflects the broader challenges plaguing dating app operators, which are still grappling with a post-pandemic decline in growth. The company now expects its full-year revenue to grow between one per cent and two per cent, compared with an earlier forecast of two per cent to 11 per cent. 

Bumble expects sales for the current period of $269 million to $275 million, below the $296.1 million that analysts projected. Adjusted earnings before interest, taxes, depreciation and amortization will be between $77 million and $80 million, the company said. Wall Street was hoping for $91.5 million.

The forecast reset raised concerns about uptake following the recent relaunch of Bumble's eponymous app and a refresh of the Premium Plus offering as it faces sluggish user spending. Bumble will slow down certain monetization efforts, such as the expansion of its Premium Plus subscription offering originally planned for the second half of the year.

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Bumble’s executives tied the dramatically lower outlook to a “reset” of the company’s overall strategy, which they unexpectedly laid out during a call with analysts on Wednesday. The platform, which has traditionally marketed itself as the best experience for women, will invest more in “the right balance and mix” of customers and more compelling dating experiences, they said.

Bumble’s subscription tiers will change to reward “positive peer behaviors,” and near-term, money-making efforts such as the expansion of its Premium offering will slow. “While the actions we are taking are difficult in the near term,” said Anuradha B. Subramanian, Chief Financial Officer, Bumble. 

Bumble has also been raising the minimum requirements for new user profiles and photos, a move that it expects to lead to a more “authentic” experience over time. The company said it will invest in several new features, including new interest filters, a better matching algorithm and an AI-assisted photo picker. The firm vowed to bolster efforts to crack down on bad actors on the platform.

Bumble has been in the throes of an internal leadership transition since founder Whitney Wolfe Herd announced in November that she would step down as Chief Executive Officer. Bumble has since named four new C-suite executives, who have been charged with overhauling the company’s mobile app to make it more appealing to younger users.

With inputs from Bloomberg, Reuters