Bumble's paying user drop sparks concerns over pace of AI-driven revamp
FILE PHOTO: 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/File Photo
Bumble's paying users fell in the second quarter, the dating app operator said on Wednesday, clouding hopes of a quick turnaround and sending its shares slumping 8 per cent in extended trading.
The company, which operates an eponymous app, has turned to artificial intelligence to combat the "dating fatigue" that has plagued the industry.
Analysts, however, say Bumble has trailed bigger rival Tinder-parent Match Group as many of the company's efforts remain in early testing phases.
The dating app's total paying users decreased by 8.7 per cent to 3.8 million in the second quarter.
"The primary concern at this stage remains the headwinds in paying user growth, which Bumble needs to address to re-engage its core audience," said Chandler Willison, research analyst at M Science.
In the three-month period to June, the company posted a net loss of $367.0 million, including $404.9 million of non-cash impairment charges, compared to a net profit of $37.7 million, a year earlier.
The company, which named a new chief financial officer, did not specify the reasons behind its one-time cost.
In its bet to provide real connections, Bumble has introduced a new coaching hub powered by both human expertise and artificial intelligence.
The company said on Wednesday it would introduce an all-new Bumble BFF application this month to woo Gen Z customers and will also have new community-focused events to help users build offline friendships.
Bumble posted second-quarter revenue of $248.2 million, compared with analysts' average estimate of $245.1 million, according to data compiled by LSEG.
The company said Kevin Cook, who was recently financial head at data management platform Cloudera, would succeed interim CFO Ronald Fior, effective August 12.
Bumble forecast third-quarter revenue between $240 million and $248 million, largely above analysts' estimates of $241.4 million, according to data compiled by LSEG.
