Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bumble Inc (BMBL, Financial) reported a 3% year-over-year revenue growth to $269 million in Q2 2024.
- The company saw a 14% increase in total paying users, reaching 4.1 million.
- Bumble app revenue grew by 5% to $218 million, driven by a 15% increase in paying users.
- The company has implemented a comprehensive plan focusing on ecosystem health, customer experience, and revenue strategy.
- Bumble Inc (BMBL) has a strong balance sheet with $287 million in cash and cash equivalents, and continues to return capital to shareholders through its buyback program.
Negative Points
- ARPPU (Average Revenue Per Paying User) declined by 8% to $21.37, driven by geographic mix shift.
- Badoo app and other revenue declined by 2% year-over-year to $51 million.
- The company is facing top-of-the-funnel softness, particularly in mature markets like the US.
- Bumble Inc (BMBL) has revised its full-year 2024 revenue growth outlook to between 1% and 2%, indicating slower growth.
- The company expects negative net adds in Q4 2024, partly driven by seasonality and the impact of strategic actions.
Q & A Highlights
Q: Given that your comments were that ARPPU is growing within many of your individual markets, with the overall ARPPU decline driven largely by the geo mix shift, should we infer from that a decline in US paying users or can you help us provide any guardrails around the US versus international paying user MAU dynamic?
A: Hi, Andrew. This is Anu, I'll take that. Yes, I think as we mentioned on the call, we are seeing overall ARPPU decline for Bumble app. While individually in each of the markets, including the US we are seeing ARPPU increase. The weightage of the US versus international markets is having an impact on overall ARPPU. We are seeing some pressure on US top of the funnel metrics and that is flowing through to the pressure that we are seeing on US payers as well. And a lot of the actions that we are outlining today are effectively meant to really be focused on our more mature markets, especially the US.
Q: Can you provide any further clarity on maybe timing for some of the more impactful moves, or just a sense of what groundwork needs to be laid in place product wise, before you start to turn on some of the more impactful features?
A: Thank you, Andrew. As we aligned on this strategy today, we are unveiling a customer-centric strategy to really set us up for reigniting growth in the long term. What this means from a product perspective is that we really optimizing for engagement. As you have heard from our April launch, we saw that improving the customer experience, especially women's experience drove engagement, which takes longer to realize itself. And that's the set of principles behind the releases and the features that you heard today. We are planning to release a series of capabilities, expansion of opening moves, expansion of intentions that will allow us to better align the experience of our customers and balance the ecosystem in mature markets as Anu just called out. We do believe that these actions will improve the overall experience and retention of our customers, but it'll take multiple quarters for us to start realizing, a top of funnel strength that we believe these capabilities will offer.
Q: Could you talk about just at a high level, what you saw with the initial app relaunch that made you decide now is the right time to make the pivot and reset the roadmap going forward?
A: Great question, Corey. Thank you. So, what we certainly -- if we step back a little bit, this strategy isn't just about this past quarter. It is a combination of factors, that's weighed out on the areas of our plan. If you look at the top of funnel softness, that we've talked about this has been talked about from Bumble over several quarters in the last few quarters. We have seen the steady pressure in our results. And what we saw from our April launch is that the engagement has immediately -- improving our customer experience, improving engagement. But it doesn't translate immediately in revenue growth. In the past, sometimes a consumable will drive an immediate revenue but doesn't sustain those users. And so, what we are really shifting is towards prioritizing product experiences that are going to drive long-term sustainable revenue growth. And so, what we are focused on is ensuring that the differentiation of what, why people choose to come to Bumble, which is women's experience, it's a safe, healthy platform for our users is undeniably the best one in the market.
Q: You mentioned sales and marketing, so maybe some changes there. So, with the reset, should we expect an increase in sales and marketing in the back half of the year as part of the reset and perhaps to drive top of funnel?
A: Let me start. John on the marketing side, as you heard from Anu, we're operating with a lot of discipline. We believe we have the right allocation of dollars. What we are really focused on is how do we really optimize for LTV and we are being more tailored about our go to market strategies based on the level of maturity of the market. So, the markets where we have a greater penetration, we're very, very focused on attracting users that are already aware of our brand. But we're reigniting re-engagement, where our strategies for emerging markets are very different and digital and performance marketing are very effective. So, it's really about optimizing and tailoring our marketing strategy for markets. I think that's going to certainly drive an improvement to the performance of our investments. And that's our focus.
Q: You talked about monetization mechanisms that reward positive user behavior, what do you mean by that and what could that look like?
A: Great question, Corey. Thank you. So, what we certainly -- if we step back a little bit, this strategy isn't just about this past quarter. It is a combination of factors, that's weighed out on the areas of our plan. If you look at the top of funnel softness, that we've talked about this has been talked about from Bumble over several quarters in the last few quarters. We have seen the steady pressure in our results. And what we saw from our April launch is that the engagement has immediately -- improving our customer experience, improving engagement. But it doesn't translate immediately in revenue growth. In the past, sometimes a consumable will drive an immediate revenue but doesn't sustain those users. And so, what we are really shifting is towards prioritizing product experiences that are going to drive long-term sustainable revenue growth. And so, what we are focused on is ensuring that the differentiation of what, why people choose to come to Bumble, which is women's experience, it's a safe, healthy platform for our users is undeniably the best one in the market.
Q: You guys historically talked about your ecosystem was healthier, leans more towards women and the focus on the women's experience has made a healthier ecosystem. It feels like that maybe has changed or something in the way you look at it has changed. And that's leading to some of the product enhancements or changes you're making here. Is that the case and can you just talk about that ecosystem and how it's evolved and where it's at right now?
A: Yeah, great question. So, let me unpack ecosystem a little bit. Bumble continues to be the best platform for women and it has been a great source of advantage for us. But as we've scaled the business -- now, we are [$1 billion] business in several markets, there has been a slight imbalance that has been created. And it's not just about gender balance, it is about intent, balance, it's about the general mix of users and what they are looking for. So, we're taking a more sophisticated look to that mix of users and engagement and intent, because that really will allow us to deliver the best possible experience to our users. That certainly is important for mature markets. As you've heard from both Anu and I today, our markets in the US in particular are more mature. We have great brand recognition, great brand love, and it really is about tailoring how we're delivering our experiences, how our customers are experiencing
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
