Online dating app Bumble (NASDAQ:BMBL) reported results in line with analyst expectations in Q1 FY2023 quarter, with revenue up 15% year on year to $242.9 million. The company expects that next quarter's revenue would be around $256 million, which is the midpoint of the guidance range. That was roughly in line with analyst expectations. Bumble made a GAAP loss of $2.33 million, down on its profit of $23.9 million, in the same quarter last year.
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Bumble (BMBL) Q1 FY2023 Highlights:
- Revenue: $242.9 million vs analyst estimates of $240.9 million (0.84% beat)
- EPS: -$0.01 vs analyst estimates of $0 (-$0.01 miss)
- Revenue guidance for Q2 2023 is $256 million at the midpoint, roughly in line with what analysts were expecting
- Free cash flow of $6.58 million, down 85.7% from previous quarter
- Gross Margin (GAAP): 70.9%, down from 73.2% same quarter last year
- Total Paying Users (inc Bumble and Badoo users): 3.46 million, up 453 thousand year on year
“In Q1, we delivered solid revenue growth and strong Bumble App paying user additions,” said Whitney Wolfe Herd, Founder and CEO of Bumble.
Founded by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ: BMBL) is a leading dating app built with women at the center.
Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to or what movie they watch, or finding a date, online consumer businesses today are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have increased usage and stickiness of many online consumer services.
Sales Growth
Bumble's revenue growth over the last three years has been strong, averaging 24.9% annually. This quarter, Bumble reported a moderate 15% year on year revenue growth, in line with analysts' expectations.
Guidance for the next quarter indicates Bumble is expecting revenue to grow 17.4% year on year to $256 million, in line with the 18.5% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 18.7% over the next twelve months.
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Usage Growth
As a subscription app, Bumble generates revenue growth by growing both the subscriber base and how much each subscriber spends over time, on average.
Over the last two years the number of Bumble's active buyers, a key usage metric for the company, grew 10.9% annually to 3.46 million. This is decent growth for a consumer internet company.
In Q1 the company added 453 thousand active buyers, translating to a 15.1% growth year on year.
Key Takeaways from Bumble's Q1 Results
With a market capitalization of $2.44 billion Bumble is among smaller companies, but its more than $389 million in cash and positive free cash flow over the last twelve months give us confidence that Bumble has the resources it needs to pursue a high growth business strategy.
It was great to see that Bumble’s user base is growing, and users slightly beat expectations. On the other hand, revenue growth is overall a bit slower these days and both revenue and adjusted EBITDA guidance for the next quarter missed analysts' expectations. Despite this, management stated that “We believe the momentum in our business sets us up well to continue delivering profitable growth and we are reiterating our guidance for the full year.” Overall, it seems to us that this was a complicated quarter for Bumble. However, the company is up 4.48% on the results and currently trades at $18.43 per share.
Should you invest in Bumble right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.
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The author has no position in any of the stocks mentioned.