Bumble falls as CEO signals need for app revamp after poor earnings
(Reuters) -Bumble shares fell about 5% 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 about 30% 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».
In an attempt to remedy that, Bumble announced plans to relaunch its eponymous app and refresh the Premium Plus subscription offering, weeks after Tinder owner Match Group (NASDAQ:MTCH) also revealed it was updating its apps to appeal to GenZ users and women, after projecting January-March revenue below estimates.
Match and Bumble have said they are looking to use generative AI, but neither have detailed how the technology can drive new features.
«It is no secret apps like Tinder and Bumble need to find a better product market fit with Gen Z — but changes to dating apps carry significant execution risk,» J.P. Morgan analysts said, adding that they expect investors to remain skeptical about growth re-acceleration in the second half of 2024.
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 Bumble's Badoo and Bumble apps fell to $22.64 in the fourth quarter, from $23.01 last year.
The dour results come a week after Bumble overhauled its senior leadership.
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.
At least eight brokerages cut their price
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