Reuters
Published Aug 08, 2023 06:15PM ET
(Reuters) - 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, compared to $23.51.
Net earnings stood at $9.3 million, compared with a net loss of $5 million.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.