Contributed by: kellyseal on Friday, September 06 2024 @ 02:18 pm
Last modified on Friday, September 06 2024 @ 02:26 pm
Dating app Bumble’s share value dropped 30 percent after the company slashed its annual growth revenue forecast in its second quarter earnings report.
According to Reuters, Bumble also fell below estimates for its second quarter revenue. The dating app company reported revenue of 268.6 million, below analyst expectations of $273 million.
This report worried investors who compared Bumble’s second quarter to rival Match Group’s, which reported relatively better revenue numbers driven by robust growth at Hinge and more stability at Tinder.
This comes on the heels of Bumble’s new platform refresh and brand campaign, “Opening Moves,” which replaced the longtime goal of the app where women make the first move. The company said that dating has evolved, and their app needed to change to allow more freedom for women to choose whether they wanted to do all the initiating.
According to Reuters[*1] , Bumble reduced its annual forecast to between one and two percent revenue growth, down from previous estimates of 8 to eleven percent revenue growth.
"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 told Reuters.
Bumble forecasted third-quarter revenue to fall between $269 million and $275 million, down from analyst expectations of $296.1 million, according to LSEG data.
"Macroeconomic conditions and the online dating market have become generally less favorable as younger consumers' tastes and willingness to pay continue to change," M Science research analyst Chandler Willison told Reuters.
The dating app market has been in a slump overall, with more young daters turned off dating apps and looking for alternatives, like in-person events and other social networks. One trend Match Group pointed out in its earnings report is that Gen Z users are more inclined to engage with “low pressure” platforms as a better way to meet people.
Bumble’s CEO Lidiane Jones said that Bumble will be adding new features in the fall and winter, including more options for its signature “Opening Moves” feature and an AI-driven photo choosing feature, similar to what Tinder has launched. The company also plans to slow down its monetization efforts, including rolling back its plan to expand its Premium+ offering.
According to Axios, many dating apps who originally marketed themselves with certain characteristic features (like Bumble’s female-focused platform), have now turned to ways of appealing to a larger userbase, which means they all end up looking more similar than different, which might not be best for their users.