Bumble Posts First Quarterly Sales Drop Since Going Public
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Dating app operator Bumble Inc. has reported its first decline in quarterly sales since going public in 2021, as the company warns that it will take longer than expected to boost its sluggish growth rate, reports Reuters.
Bumble's struggles stem from the impact of persistent inflation and high borrowing costs, which have dampened user spending on the women-centric dating app and its premium subscriptions. This has limited the company's growth after a post-pandemic boom.
In response to these challenges, Bumble has launched a refreshed app and new features. However, a cut to its annual revenue forecast in August raised concerns about the effectiveness of its turnaround plans.
"These investments and our ecosystem initiatives, including product releases, will take time to translate to meaningful revenue growth," said CFO Anu Subramanian, as quoted by Reuters.
Bumble's larger competitor, Match Group, which owns Tinder and Hinge, also reported weaker-than-expected third-quarter revenue on Wednesday, citing sluggish user spending on its dating apps.
Despite the sales decline, Bumble reported an increase in total paying users across its apps, rising to 4.3 million in the third quarter, up from 3.8 million a year earlier.
Revenue for the quarter fell 0.7% to $273.6 million, but this still exceeded analysts' average estimate of $271.9 million, according to data compiled by LSEG.
Bumble's shares surged nearly 9% in after-hours trading before leveling out.
The company expects fourth-quarter revenue to be between $256 million and $262 million, compared with analysts' average estimate of $260.2 million. For fiscal 2024, Bumble forecasts revenue between $1.06 billion and $1.07 billion, in line with current estimates.