BumbleBMBL

Bumble brought in about 211 million dollars last quarter, a 15 percent drop from the same time last year. The company also reported a net loss of 128 million dollars, or 84 cents per share, which was much worse than the profit analysts expected. Management is currently trying to overhaul the app to attract younger users, but this transition is proving painful as the total number of paying members continues to shrink.

The business is at a crossroads. While it is still generating about 73 million dollars in adjusted EBITDA, a measure of cash profit that ignores certain one-time costs, the shrinking user base is a major concern. For the stock to recover, the company needs to prove that its new AI features and app redesign can stop people from leaving and convince more members to pay for premium features.

See the full quarter, and how our tracked metrics did

Source: 8-K filing

Key highlights

• Revenue outlook weakening: Bumble expects third quarter revenue to land between $205 million and $213 million, which would be lower than the $211 million it just reported. This suggests the business is still looking for a bottom as it works through a total overhaul of its apps and matching systems.
• Paying user base shrinking: The total number of paying users dropped 16.4% to 3.16 million compared to a year ago, as the company moved away from older versions of its apps. This decline shows that the company is struggling to keep customers during its transition, though it still has more users than its 3 million target floor.
• Bumble app spending rising: Average monthly revenue per user for the main Bumble app grew to $27.55, up from $26.85 last year. While the company is losing users, the ones who stay are spending more on features, which helped the app's total revenue reach $171.7 million for the quarter.
• Margins under pressure: Adjusted EBITDA margin, which measures the percentage of revenue kept as profit before certain costs, fell to 34.6% from 38.1% a year ago. The company is spending more on product development, which rose to $35.5 million this quarter, to fund a roadmap of new features it hopes will bring growth back.
• Massive paper loss: The company reported a net loss of $127.9 million, but this was mostly due to a $169.3 million impairment charge, which is a one-time accounting write-down of the value of its assets. Without these non-cash charges and other specific items, the company generated $72.9 million in adjusted profit.

Our take: A soft quarter that shows the business is still in a difficult transition. While it is encouraging that the remaining users are spending more, the 16.4% drop in paying members is a serious hurdle to clear. This result suggests the turnaround will take more time to deliver meaningful growth.