Contributed by: kellyseal on Friday, August 19 2022 @ 07:02 am
Last modified on Friday, August 19 2022 @ 07:09 am
Dating app company Bumble has lowered its revenue forecasts through the end of the year, signaling that the boost from pandemic dating might be over.
Bumble adjusted its annual revenue to be between $920 million and $930 million for the year, lower than previous forecasts and market estimates of $934-$944 million. The company’s stock fell 13 percent after the news according to Reuters[*1] .
This news follows that of competitor Match Group, which also fell short of expected earnings for Q2. In the wake of the downturn, Match Group announced the lowering of its projected revenue for Q3, with a company shake-up that included halting development for metaverse dating and virtual currency and a restructuring of its executive leadership. Match Group’s stock also took a hit, dropping 20 percent in value after the company released its letter to shareholders.
Bumble’s earnings report did have some hopeful signs – paying users grew a whopping 31 percent to 1.9 million in the second quarter, compared to Badoo and other apps which saw a combined decrease of about 25 percent to 1.1 million, according to Reuters. Bumble’s revenue also rose 18.4 percent to $220.5 million in the second quarter (beating analyst expectations of $219.4 million).
"It has been a challenging first half for Badoo... As Badoo serves a more economically sensitive user base, it has also felt the effects of COVID and now the macro environment, much more than Bumble app," said Whitney Wolfe Herd, Bumble’s CEO said on an earnings call.
Herd also noted the ongoing war in Ukraine has hit the company hard on several fronts, especially Badoo. Bumble removed its app from all stores operating in Belarus and Russia earlier this year after Russia invaded Ukraine, losing important revenue streams. In addition, the revenue impact on Badoo is expected to lower full-year revenue for the company by $20 million.
Still, analysts pointed out that Bumble also lowered revenue expectations for its flagship app for the rest of the year, not just those of Badoo, and halted plans to launch a college-specific dating app bundle to kick off the fall. This has been pushed back until later this year, according to Seeking Alpha.
The company is also struggling to keep up with Match Group’s growth in the European market, according to Reuters, though Herd pointed to Germany as a high-growth market for the app.
On the earnings call, Herd also talked about successful new initiatives to create engagement, including a weekly astrology-oriented event aimed specifically at female users, still very much a focus of the company. She said: “…we are experimenting with new engagement models to better serve our women users and help drive matches.”