Bumble slumps as CEO signals need for app revamp after poor earnings

By Thomson Reuters Feb 28, 2024 | 5:32 AM

(Reuters) – Bumble shares slumped about 10% on Wednesday after its downbeat quarterly revenue forecast underscored the need for a revamp of the dating-app experience to attract newer generations seeking companionship.

The company is also set to eliminate 350 jobs, or 37% of its workforce, it said on Tuesday, as new CEO Lidiane Jones moves to steer Bumble through sluggish user spending in an industry she said “hasn’t seen true innovation in several years”.

Bumble announced plans to relaunch its eponymous app and refresh the Premium Plus subscription offering, nearly a month after rival Match Group projected January-March revenue below estimates as the Tinder owner updates its apps in a bid to appeal to Gen Z users and women.

While Match and Bumble have said they are looking to use generative AI, neither have detailed how the technology can drive new features.

“There hasn’t been a lot of innovation in the space since the swipe and that experience likely needs a significant refresh beyond just new pricing tiers or filters in order to drive payer penetration for a new generation of daters,” BTIG analyst Jake Fuller said in a note.

Analysts also said revenue growth this year could be slower than Bumble expects as product improvements may take time to gain traction among users.

Total average revenue per paying user across the Badoo and Bumble apps fell to $22.64 in the fourth quarter, from $23.01 a year earlier.

Only a week ago, Bumble overhauled its senior leadership, nearly two months after new CEO Jones took the helm.

The company’s stock, which has fallen 46% in the past year, trades at 23.22 times its forward earnings, compared with 16.66 for Match.

(Reporting by Akash Sriram in Bengaluru; Editing by Devika Syamnath)