Contributed by: kellyseal on Monday, November 14 2022 @ 02:06 pm
Last modified on Monday, November 14 2022 @ 02:40 pm
The value for dating app Bumble’s stock has dropped 14 percent after the company lowered revenue forecasts for the fourth quarter, and Gen Z users have increasingly stopped renewing their subscriptions.
Bumble expects Q4 revenue to be between $232 million and $237 million according to Reuters[*1] . This is lower than Wall Street projections of $254.5 million, according to Refinitiv data. Still, the company pointed out that paying users for the third quarter increased to 3.3 million from 2.9 million last year, a sign of growth despite the downturn.
According to Motley Fool[*2] , on a call with investors, Bumble CEO Whitney Wolfe Herd said that the economic slowdown affected spending for “certain segments of its user base,” notably younger daters, who were not renewing subscriptions at the normal rate. Motley Fool also noted that shares had already fallen 38 percent this year as investors fled dating and tech stocks in general, following a surge of interest and rising subscriptions in dating apps during pandemic lockdowns.
"Some of our user segments are facing greater pressure on disposable income," Herd said on an earnings call, according to Reuters.
Hinge took a poll of its users over the summer according to Motley Fool, and found that over 40 percent said they were concerned with the rising cost of dating and were altering dating habits because of this, opting for virtual dates before agreeing to meet in person. Gen Z daters were most affected by the rising costs of dating.
Herd also pointed to the war in Ukraine and the strong dollar affected the company’s revenue streams overall. “Adjusted for both foreign exchange and the Ukraine crisis, revenue growth would have been 10% higher,” Herd said on the earnings call. The dating company has pointed to struggles in revenue for its other big European dating app Badoo.
Match Group fared well in the third quarter after better-than-expected revenue was announced along with an increase in paying users, causing stock to jump 7 percent. However, the company warned that fourth quarter revenue would be lower than expected due to the same economic factors Bumble pointed to, coupled with the war in Ukraine and rising inflation. Match Group shares have fallen 65 percent so far this year, with Tinder’s lower-than-expected performance.
Inflation and the 15 percent rise in the dollar has affected companies across market sectors, so it’s not surprising that it has reached dating app companies. Bumble and Tinder also face some competition from new TikTok-styled dating app Snack and event-focused app Thursday, which are attracting younger users.