Bumble's (NASDAQ:BMBL) Q1: Beats On Revenue But Quarterly Guidance Underwhelms

Online dating app Bumble (NASDAQ:BMBL) beat analysts' expectations in Q1 CY2024, with revenue up 10.2% year on year to $267.8 million. On the other hand, next quarter's revenue guidance of $272 million was less impressive, coming in 2.4% below analysts' estimates. It made a GAAP profit of $0.19 per share, improving from its loss of $0.01 per share in the same quarter last year.

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Founded by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ:BMBL) is a leading dating app built with women at the center.

Consumer Subscription

Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.

Sales Growth

Bumble's revenue growth over the last three years has been solid, averaging 19.7% annually. This quarter, Bumble reported mediocre 10.2% year-on-year revenue growth, in line with analysts' expectations.

Guidance for the next quarter indicates Bumble is expecting revenue to grow 4.7% year on year to $272 million, slowing from the 18.5% year-on-year increase it recorded in the comparable quarter last year. Ahead of the earnings results, analysts were projecting sales to grow 9.7% over the next 12 months.

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Usage Growth

As a subscription-based app, Bumble generates revenue growth by expanding both its subscriber base and the amount each subscriber spends over time.

Over the last two years, Bumble's active buyers, a key performance metric for the company, grew 14.6% annually to 4.02 million. This is solid growth for a consumer internet company.

In Q1, Bumble added 564,500 active buyers, translating into 16.3% year-on-year growth.

Revenue Per Buyer

Average revenue per buyer (ARPB) is a critical metric to track for consumer internet businesses like Bumble because it measures how much the average buyer spends. ARPB is also a key indicator of how valuable its buyers are (and can be over time).

Bumble's ARPB growth has been subpar over the last two years, averaging 1.4%. The company's ability to increase prices while maintaining its active buyers, however, shows the value of its platform. This quarter, ARPB declined 4.3% year on year to $21.84 per buyer.

Key Takeaways from Bumble's Q1 Results

It was great to see Bumble increase 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 and reiterated its revenue and adjusted EBITDA outlook for 2024. Overall, this was a mixed quarter for Bumble. The stock is up 5% after reporting and currently trades at $10.76 per share.

So should you invest in Bumble right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.