Bumble Inc. Q1 FY2025 earnings call

• Focus on quality over scale in online dating, aiming to remove bots, scammers, and improve member profiles. - Modernize matching algorithm with AI to enhance relevant matches. - Financial discipline: Identified $15M in near-term cost savings, reduced marketing spend by $20M in Q2 with more to come, and aims for EBITDA profitability. - Product and technology excellence: New CTO Vivek Sagi, updates to Discover tab, and trust/safety initiatives like ID verification. - Work on Bumble BFF, with plans for a big update in summer to enhance friend-finding experience.

In Q1, total Bumble Inc. revenue was $247 million. Bumble app revenue was $202 million, and Badoo app and other revenue was $45 million. Total paying users in the quarter were 4 million, with Bumble app paying users at 2.7 million and Badoo app and other paying users totaling 1.3 million. Total GAAP operating costs were $202 million, and GAAP net earnings were $20 million. On a non-GAAP basis, operating expenses were $183 million, a year-over-year decline of ~6% due to lower headcount from restructuring. Adjusted EBITDA for Q1 was $64 million, representing 26% of revenue.

• Q2 total Bumble Inc. revenue expected $235M-$243M (YOY -13% to -10%), Bumble app revenue $193M-$199M (YOY -11% to -9%), adjusted EBITDA $79M-$84M. - Pause guiding to paying users while improving member base. - $12M revenue headwind from discontinuing Frutz and Official, starting in Q2 and evenly distributed. - Expect adjusted EBITDA margin to reflect cost savings and marketing reduction, offset by return to brand/organic spend and member quality initiatives.

• Near-term impact on paying users due to efforts to improve member base quality. - Uncertainties in executing member base improvements and achieving sustainable growth. - Risks associated with market dynamics, competition, and effectiveness of AI and product innovations.

Q: As you pull back on performance marketing spend for fewer but higher quality users, how does this change your view on addressable market and past efforts?

A: Focus on quality for enduring growth, TAM is massive but need to get back to high quality experience. Past efforts on scaling led to quality degradation, now all-in on quality.

Q: What key metrics to measure success and update on CFO search?

A: Metrics on member engagement, quality of experience; CFO search making progress, strong talent bench except CFO.

Q: Investments in AI and impact on dating experience?

A: AI used in safety/verification, coaching (human/AI), matching algorithm, and efficiency. Helps make love more human, improve profile quality and matching.

Q: What led to product deviation and AI's role in new engagement?

A: Past focus on quantity over quality, now AI helps show relevant profiles. Future is personalized and curated matches.

Q: Elimination of bots and future of Bumble's brand?

A: Removing bad actors, elevating middle profiles, focusing on verification. Bumble is for all healthy connections, not exclusive to one type of relationship.

Q: Data insights for differentiated offering?

A: Focus on capturing signals from members to power AI algorithm for personalized matches.

Q: User behavior in international markets and focus regions?

A: Similar member issues across markets, not chasing growth until product solves problems; 2026 to be big for international efforts.