Bumble Inc. (BMBL) shares plunged more than 27% after the company issued a disappointing revenue forecast for the first quarter of 2025.
The dating app giant expects revenue between $242 million and $248 million, falling short of Wall Street’s estimate of $257.2 million. The anticipated decline of 7% to 10% year-over-year reflects management’s decision to focus on refining the platform rather than aggressive expansion.
Adding to investor unease, Bumble projects weaker margins due to increased investment in product development. Adjusted EBITDA is forecasted between $60 million and $63 million, with margins expected to decline by approximately 250 basis points year-over-year to around 25%. The forecasted EBITDA figure came in roughly 11% below consensus expectations.
Paying Users Decline as Platform Evolves
Despite resilient fourth-quarter results, including revenue of $261.6 million—slightly above estimates—Bumble continues to face headwinds. Paying users declined by 60,000 in the fourth quarter, with management predicting an even steeper drop of 100,000 to 120,000 in Q1 2025. This far exceeds analysts’ expectations of a 30,000-user decline, raising concerns about user retention and monetization.
CEO Lidiane Jones emphasized ongoing platform improvements, including the introduction of an AI-assisted image picker, enhanced safety features like ID verification, and a revamped Discover Tab. The company is also discontinuing its Fruitz and Official apps to concentrate on its core offerings, particularly Bumble BFF. These strategic shifts aim to reinvigorate user engagement and drive future growth.
Despite resilient fourth-quarter results, including revenue of $261.6 million—slightly above estimates—Bumble continues to face headwinds. Paying users declined by 60,000 in the fourth quarter, with management predicting an even steeper drop of 100,000 to 120,000 in Q1 2025. This far exceeds analysts’ expectations of a 30,000-user decline, raising concerns about user retention and monetization.
CEO Lidiane Jones emphasized ongoing platform improvements, including the introduction of an AI-assisted image picker, enhanced safety features like ID verification, and a revamped Discover Tab. The company is also discontinuing its Fruitz and Official apps to concentrate on its core offerings, particularly Bumble BFF. These strategic shifts aim to reinvigorate user engagement and drive future growth.
Leadership Transition and Investor Sentiment
As Bumble navigates this challenging transition, co-founder and former CEO Whitney Wolfe Herd is set to return as chief executive in March 2025. Her comeback is expected to refocus the company’s brand strategy and product development amid growing competition in the online dating sector.
Bumble ended 2024 with $204 million in cash and equivalents, reporting annual revenue of $1.072 billion and adjusted EBITDA of $304 million—reflecting a 28% margin. However, analysts remain cautious. Jefferies reiterated a Hold rating, stating they “await better trends,” while Wolfe Research highlighted risks including leadership changes, rising competition, and slowing industry growth.
The stock had been recovering from a sharp drop in August 2024, but this earnings report has erased much of those gains. With revenue pressures and declining user numbers, Bumble faces a pivotal year as it seeks to balance investment in product innovation with profitability and user retention.
As Bumble navigates this challenging transition, co-founder and former CEO Whitney Wolfe Herd is set to return as chief executive in March 2025. Her comeback is expected to refocus the company’s brand strategy and product development amid growing competition in the online dating sector.
Bumble ended 2024 with $204 million in cash and equivalents, reporting annual revenue of $1.072 billion and adjusted EBITDA of $304 million—reflecting a 28% margin. However, analysts remain cautious. Jefferies reiterated a Hold rating, stating they “await better trends,” while Wolfe Research highlighted risks including leadership changes, rising competition, and slowing industry growth.
The stock had been recovering from a sharp drop in August 2024, but this earnings report has erased much of those gains. With revenue pressures and declining user numbers, Bumble faces a pivotal year as it seeks to balance investment in product innovation with profitability and user retention.
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