Dating apps are a tricky business in the post-pandemic world, with investors continuing to swipe left on Bumble after its latest earnings report. 📰
The company behind dating apps Bumble, Badoo, and Fruitz said a slowdown in user spending caused it to miss first-quart revenue expectations. As a result, new CEO Lidiane Jones’ first move is to cut 350 roles, costing $20 to $25 million in one-time charges over the first two quarters. ✂️
Competitor Match Group has been looking to “rizz up” the younger generations with heavy marketing spend but has had limited success. Meanwhile, Bumble said it’s focused on reigniting ARPU growth in the mature U.S. market, relaunching its eponymous app and revamping its premium plus offering. And in terms of user growth, it’s eying global market expansion.
Nonetheless, the changes will take time to show results. The company expects just 8% to 11% annual revenue growth this year, well below estimates of 13.30%. Overall, the weak fundamental backdrop and the company’s inability to get a handle on revenue growth leaves it no choice but to lean down and preserve its cash. 🔻
As for the stock, technical analysts like to use the word “path of least resistance” when discussing a stock’s trend. In the case of Bumble, it’s safe to say the path of least “rizz-istance” is clearly lower, with the stock down more than 85% since coming public and hitting new all-time lows today. While its app is failing to attract a younger audience, its stock is failing to attract investors. 👎
