Contributed by: kellyseal on Thursday, May 18 2023 @ 10:03 am
Last modified on Thursday, May 18 2023 @ 10:08 am
Bumble beat analysts’ expectations for its first quarter earnings report, with user spending remaining strong despite concerns over inflation and a recession.
According to Reuters, Bumble saw strong user growth during the first quarter of 2023 as more people chose to pay for its features and subscriptions. The news sent the company’s stock up 7 percent in aftermarket trading.
Bumble reported revenue of $242.9 million for the first quarter of 2023, higher than analyst expectations of $241 million, according to Refinitiv data. Total paying users were a bright spot: Bumble reported 3.5 million paying users at the end of Q1, up from 3 million just a year earlier. Total paying users grew 31 percent to 2.3 million for Bumble.
In addition to its signature app, Bumble also owns dating apps Fruitz and Badoo. Badoo is still struggling, and saw a 7.4 percent decline in paying users to 1.1 million, according to Reuters[*1] .
Bumble expects second quarter revenue between $254 million and $258 million, in line with analyst expectations of $256.63 million, according to Reuters.
At the same time, the company reported that first quarter revenue rose 15.7 percent year-over-year, its slowest revenue growth since it went public in 2021, which is on trend for the dating app industry as a whole. Match group saw its second quarter of revenue decline, though the company says its on track to grow its revenue going forward thanks to changes it is making at Tinder and expanding into new markets with Hinge.
Bumble attributes its success to new features like Compliments, which allows users to send each other notes before they match and improve their chances of matching. The company shared on an earnings call that so far 15 percent of Bumble’s monthly active users have paid for the feature and sent a Compliment, so it was “confident in its ability to grow that number,” according to Reuters.
“Our results demonstrate the power of our unique family of apps that help people connect with each other amid a global epidemic of loneliness,” Chief Executive Whitney Wolfe Herd said in a statement, and added that the company planned to leverage AI to assist with growth, according to Marketwatch. Match Group is also leveraging AI for growth across its dating apps.
In early May, the company shared that its board had approved a $150 million share buyback program, which also contributed to the rise in shares of Bumble.