Bumble slashed its annual revenue growth forecast on Wednesday, stoking worries about the dating app operator’s growth plans among investors. The share price of Bumble was down 30% after the bell. It will now also slow down certain monetization efforts, such as expanding its Premium+ offering, which was planned for the second half of the year.
It also missed Wall Street estimates for Q2 revenue unlike bigger rival Match Group, which reported upbeat second-quarter revenue last week, driven by stabilizing trends at Tinder and robust growth at Hinge.
Bumble quarterly result
The Bumble quarterly result results sparked concerns about the company’s growth initiatives. This was including the launch of a refreshed Bumble app and new features such as “opening moves”. The new features allow women to set up a custom question that all potential matches can reply to, helping kickstart a conversation.
Bumble trimmed its annual revenue growth forecast to between 1% and 2%, from prior expectations of an 8% to 11% range.
“Bumble’s downward revisions on revenue and earnings guidance have investors concerned that the company is unclear around what its growth story will be from here,” Third Bridge analyst Jamie Lumley said.
Bumble Q3 outlook
Bumble, which operates its eponymous app, expects Q3 revenue between $269 million and $275 million, compared with analysts’ average estimate of $296.1 million, according to LSEG data.
Revenue for the Q2 was $268.6 million, missing analysts’ average estimate of $273 million.
“Macroeconomic conditions and the online dating market have become generally less favorable as younger consumers’ tastes and willingness to pay continue to change,” said M Science research analyst Chandler Willison.
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Bumble’s new features
The Austin, Texas-based company’s total paying users increased to 4.1 million in the quarter, compared with 3.6 million a year earlier.
“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,” CEO Lidiane Jones said in an earnings call.
The company will launch new features on the Bumble app, including more options for making “opening moves” through the Fall and in early winter, Jones said. It will also introduce an AI-assisted photo picker to ease profile creation, she said.
Bumble reported a profit per share of 22 cents, versus an estimate of 13 cents.
Bumble stock update
Bumble, which went public in 2021, had already seen its share price plummet to a record low earlier this year. This was after issuing a weak sales outlook and cutting around a third of its workforce. The company’s struggles to expand its user base reflects the broader challenges plaguing the US online dating industry, which has yet to recover from a post-pandemic reckoning.
Bumble stock fell as much as 32% in extended trading on the news. If the losses hold on Thursday, the stock will be on track to notch its biggest intraday decline on record. Bumble’s earnings also weighed on the shares of rival Match Group Inc., which saw a 2% decline in after-hours trading.
