Bumble shares soar as turnaround efforts power upbeat quarterly revenue
The Bumble Inc. (BMBL) app is shown on an Apple iPhone in this photo illustration as the dating app operator made its debut IPO on the Nasdaq stock exchange February 11, 2021. REUTERS/Mike Blake/Illustration
March 11 : Bumble on Wednesday reported fourth-quarter revenue above estimates as the dating app operator began to see early benefits from a broad turnaround plan, sending its shares soaring about 20 per cent in extended trading.
Bumble has been undergoing a strategic overhaul since founder Whitney Wolfe Herd returned as CEO about a year ago, pushing for product improvements and new artificial intelligence-enabled features designed to better appeal to younger daters and counter stiff competition in a saturated market.
The company said it is preparing to launch Bumble 2.0, a redesigned version of the app that enhances the traditional swipe interface with a chapter-based structure, aimed at giving users more depth when viewing profiles.
CEO Herd said the swiping mechanism could evolve, and added that the company could test a no-swipe experience in some markets while retaining the feature in others.
The online dating industry has been grappling with slower user growth as it deals with changing demand from younger users, who still feel swiping fatigue.
In response, major players including Bumble and Match Group's Tinder and Hinge have accelerated the rollout of AI-powered tools aimed at improving match quality, helping users craft messages and reducing the friction associated with continuous swiping.
Match Group, last month, posted quarterly revenue above estimates as it saw early results from its product initiatives.
Bumble is also developing a standalone AI feature, initially being tested within the app. It is presently designed to act as a dating assistant by learning users’ preferences through private conversations with them and recommending more compatible matches.
Bumble's total average revenue per paying user for the reported quarter increased 7.9 per cent to $22.20, whereas the number of paying users fell 20.5 per cent to 3.3 million.
Performance marketing expenses were reduced by over 80 per cent year-over-year to drive organic growth, Herd said.
For the first quarter, the company expects revenue in the range of $209 million to $213 million, the midpoint of which is slightly above estimates of $210.9 million, according to data compiled by LSEG.
The company posted quarterly revenue of $224.2 million, compared with analysts' estimates of $221.3 million.
