Yahoo Finance Bumble (NASDAQ:BMBL) Misses Q2 Revenue Estimates, Stock Drops 26.8%
Online dating app Bumble (NASDAQ:BMBL) fell short of analysts' expectations in Q2 CY2024, with revenue up 3.4% year on year to $268.6 million. Next quarter's revenue guidance of $272 million also underwhelmed, coming in 8.2% below analysts' estimates. It made a GAAP profit of $0.22 per share, improving from its profit of $0.05 per share in the same quarter last year.
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Bumble (BMBL) Q2 CY2024 Highlights:
Revenue: $268.6 million vs analyst estimates of $273.1 million (1.6% miss)
EPS: $0.22 vs analyst estimates of $0.14 ($0.08 beat)
Revenue Guidance for Q3 CY2024 is $272 million at the midpoint, below analyst estimates of $296.2 million
Significantly lowered its full-year revenue guidance from 9.5% year-on-year growth to 1.5% growth
Gross Margin (GAAP): 70.2%, in line with the same quarter last year
EBITDA Margin: 27.9%, up from 25.9% in the same quarter last year
Free Cash Flow of $31.2 million is up from -$381,000 in the previous quarter
Paying Users: 4.14 million, up 505,300 year on year
Market Capitalization: $998.2 million
Founded by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ:BMBL) is a leading dating app built with women at the center.
Consumer Subscription
Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.
Sales Growth
Bumble's revenue growth over the last three years has been mediocre, averaging 16.8% annually. This quarter, Bumble reported rather lacklustre 3.4% year-on-year revenue growth, missing analysts' expectations.
Bumble is expecting next quarter's revenue to decline 1.3% year on year to $272 million, a reversal from the 18.4% year-on-year increase it recorded in the comparable quarter last year. Ahead of the earnings results, analysts were projecting sales to grow 10.7% over the next 12 months.
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Usage Growth
As a subscription-based app, Bumble generates revenue growth by expanding both its subscriber base and the amount each subscriber spends over time.
Over the last two years, Bumble's active buyers, a key performance metric for the company, grew 15.9% annually to 4.14 million. This is solid growth for a consumer internet company.
In Q2, Bumble added 505,300 active buyers, translating into 13.9% year-on-year growth.
Revenue Per Buyer
Average revenue per buyer (ARPB) is a critical metric to track for consumer internet businesses like Bumble because it measures how much the average buyer spends. ARPB is also a key indicator of how valuable its buyers are (and can be over time).
Bumble's ARPB has declined over the last two years, averaging 1.3%. Although the company's buyers have continued to grow, it's lost its pricing power and will have to make improvements soon. This quarter, ARPB declined 8% year on year to $21.37 per buyer.
Key Takeaways from Bumble's Q2 Results
This was a tough quarter for Bumble. Its revenue missed Wall Street's estimates and it severely downgraded its full-year revenue guidance from 9.5% year-on-year growth to 1.5% growth. The stock traded down 26.8% to $5.90 immediately following the results.
Bumble may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
