Bumble declines as higher expenses fan concerns about Tinder competition
Bumble shares fell 4% on Tuesday after the dating app owner forecast lackluster third-quarter revenue and posted a jump in expenses, sparking fears that stiff competition with Tinder-owner Match was affecting its business. The operator of Bumble, Badoo, and Fruitz apps said its total operating costs rose more than 7% in the June quarter as it spent more on product development and marketing.
«As Tinder begins to spend more on marketing efforts, one thing to follow (at Bumble) will be the increase in user acquisition costs,» said Nicholas Cauley, analyst at research firm Third Bridge, adding that he expected an uptick in costs. Rival Match, owner of Tinder, also forecast revenue for the third quarter above Wall Street estimates last week, expecting stronger marketing to drive user growth.
Bumble has also benefited from strong user growth during the quarter as more people continue to pay to find love and companionship despite inflationary pressures. Bumble App revenue grew 23.4% to $208 million in second the quarter, compared with $168.5 million a year earlier.
Total revenue jumped 18.5% to $259.7 million, compared to $219.2 million, a year earlier. «In addition to attracting a record number of paying users on Bumble, we've successfully launched BFF as a standalone offering, further stabilized Badoo,» said CEO Whitney Wolfe Herd.
But Bumble forecast third-quarter revenue between $274 million and $280 million, a marginally higher midpoint compared with Wall Street expectations of $275.6 million, according to Refinitiv IBES data. The company said total paying users in the second quarter increased to 3.6 million, compared with 3 million a year earlier, while total average revenue per paying user (ARPPU) increased to $23.23,
. Read more on economictimes.indiatimes.com
