Contributed by: kellyseal on Friday, August 18 2023 @ 11:16 am
Last modified on Friday, August 18 2023 @ 11:23 am
Shares of Bumble fell 4 percent in early August after the company shared its relatively “lackluster” third-quarter revenue forecast, coupled with a sharper rise in its operating expenses, according to Reuters.
This rise in spending concerned investors, especially after Tinder’s parent company Match Group recently predicted that its third quarter revenue would be higher than analyst expectations, despite its own spend on development and marketing. The company has struggled lately with Tinder, and has been implementing new features to increase in-app revenue and expand its userbase. The company also recently announced it will be launching a high-end service for users who are willing to pay as much as $500 per month.
Bumble meanwhile shared that its operating expenses had jumped 7 percent in the second quarter with additional spend on product development and marketing.
Bumble forecasted its third-quarter revenue to be between $274 million and $280 million, according to Reuters[*1] . This is still higher than Wall Street analysts who pinned it at around $275.6 million, according to Refinitiv data, but not enough to excite investors. In the second quarter, Bumble’s total revenue jumped 18.5 percent to $259 million compared to the same time the previous year, which came in at $219.2 million, according to Refinitiv data.
Total paying users in the second quarter jumped to 3.6 million compared to 3 million from the same time in 2022, and average spend per user increased to $23.23.
CEO Whitney Wolfe Herd wasn’t phased about the drop in share price, citing the accomplishments the company has made and improved revenue at Badoo, which had been struggling. "In addition to attracting a record number of paying users on Bumble, we've successfully launched BFF as a standalone offering, further stabilized Badoo," said Herd in a statement.
Bumble also recently announced some new features, including an addition to its Best Bees offering for premium and paying users. While everyone can access 4 curated matches per day through Best Bees, they are only able to like one profile per week, but paying users will be able to like as many profiles as they wish. For an additional fee, these premium users can also see which of their Best Bees has already liked them before they like.
"As Tinder begins to spend more on marketing efforts, one thing to follow (at Bumble) will be the increase in user acquisition costs," said Nicholas Cauley, analyst at research firm Third Bridge, according to Reuters.
In addition to its signature app, Bumble also owns Badoo and European dating app Fruitz.