What Happened:
Shares of online dating app Bumble (NASDAQ:BMBL) fell 40.8% in the pre-market session after the company reported second-quarter earnings results. Its revenue missed Wall Street's estimates, and it severely downgraded its full-year revenue guidance from 9.5% year-on-year growth to 1.5% growth. It also lowered the guidance for full year Bumble App payer net addition to 275,000 to 285,000 (vs. previous guidance of 350,000 to 400,000). The guidance implied negative net adds in Q4, which is not a good sign. Overall, this was a weaker quarter.
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What is the market telling us:
Bumble's shares are quite volatile and over the last year have had 17 moves greater than 5%. But moves this big are very rare even for Bumble and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 3 months ago, when the stock gained 14.9% on the news that the company reported first-quarter results. Bumble increased its number of buyers this quarter. On the other hand, its revenue and adjusted EBITDA guidance for next quarter missed analysts' expectations and its revenue growth stalled. Looking to the full year, the company still thinks it can hit previously given guidance. Overall, this was a mixed quarter for Bumble.
Bumble is down 61.7% since the beginning of the year, and at $5.55 per share it is trading 69.1% below its 52-week high of $17.99 from August 2023. Investors who bought $1,000 worth of Bumble's shares at the IPO in February 2021 would now be looking at an investment worth $78.89.
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