💘 Has Bumble’s Growth Bee Finally Buzzed?
Netflix gives up all the pandemic gains.
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💘 Bumble: Buzzing Again?
Dating app Bumble Inc. (BMBL) saw its best day as a public company last Wednesday. The company reported a surprise profit contrary to expectations of a break-even quarter. Is this the start of a turnaround? Or just a brief period of relief after shares have been battered from their peak? (Tweet This)
Buzzed Out!
Bumble went public just over a year ago, in February 2021. In the middle of the IPO mania, the company sold shares at $43 apiece, a significant premium from the initial range of $28-$30. Shares ended 85% higher on their trading debut, even jumping to as high as $84. The IPO made Bumble's 31-year old founder Whitney Wolfe Herd the world's youngest self-made woman billionaire.
Want to skip to the good part? Unfortunately, that's where the good part ends.
The initial euphoria died down, and reality hit soon after the company released its first quarterly result after going public in May. The company said it remains "cautiously conservative" due to the uncertain nature of the pandemic. That was enough to send shares tumbling below their IPO price.
The dating app boasting of investors like Serena Williams and Priyanka Chopra Jonas reported a decline in overall user growth in Q3. Bumble's other dating app "Badoo," which has a significant presence in Europe and Latin America, saw an 8% fall in user base and a revenue decline of 3% Y-o-Y in Q3. At the time, the management promptly attributed these outcomes to the pandemic.
When Bumble’s closest rival, The Match Group, the owner of apps such as Tinder (where Wolfe Herd had worked previously), announced results that were well below analyst estimates, it became the proverbial rock around Bumble’s neck. Not only did shares of Match nosedive, but they took Bumble along with them.Â
Bumble's investors were bracing for the worst just a couple of days before Bumble announced results for Q4 last week. Shares fell to an all-time low of $15.41. That's a 64% drop from its IPO price and an 82% decline from the peak it had reached just a day after going public.
Buzzed In?
Here’s how Q4 panned out for Bumble:
Revenue: $208.2M Vs $209.2M expected
Earnings Per Share: $0.13 Vs expectations of breakeven
Revenue growth in Q4 stood at 25.7% Y-o-Y. Total paying users rose 10.6% to 3M. Average Revenue per Paying User or ARPU also increased to $22.83, up from $20.02 Y-o-Y. The company reported a net loss of $14.7M, which narrowed from the $26.1M loss during Q4 2020.Â
For the full year 2022, Bumble expects to earn revenue of ~$939M, an implied Y-o-Y growth of 35%. The company has dropped its apps from the App Store and Google Play Store in Russia and Belarus. For the full year of 2021, Russia, Ukraine, and Belarus contributed to 2.8% of the overall topline. From this region, Bumble expects to lose around $20M in 2022.
Last week, it acquired Fruitz, one of the fastest-growing dating apps in Europe, for an undisclosed amount. Fruitz is known to be a popular app for Gen Z users, which has grown its user base across countries like France, Belgium, Netherlands, Switzerland, Spain, and Canada.
Fruitz connects with GenZ by assigning a fruit to each relationship type, ranging from long-term commitments to one-night stands. This allows users to filter out those not on the same page as them. To date, Fruitz has seen 5.6M downloads across the App Store and Google Play. Bumble has no plans to wind down or rebrand Fruitz operations.
The narrower-than-expected loss was enough for analysts to change the tune on the company. One even upgraded the stock and expects the stock to go up 200%! Investors got swept up in the euphoria, and the stock jumped 45% last Wednesday - its best in a single day since shares began trading last year.Â
38M exchanged hands that day, more than double the 18M traded during its public debut. All that said, shares are well below their IPO price. Investors can only hope the buzz around Bumble remains positive for some time to come!
Market Reaction
BMBL ended at $21.03, down 2.77%.
Company Snapshot 📈
BMBL $21.03 -0.60 (2.77%)
Analyst Ratings (15 Analysts) BUY 73% Â HOLD 27% Â SELL 0%
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Today's Market Terminology: Capitalized Interest
Capitalized interest is something that is not immediately expensed, but is rather considered an asset and is amortized through the income statement over time
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