Bumble 2025 Q1 Earnings Misses Targets as Net Income Drops 41.5%

Bumble (BMBL) reported its fiscal 2025 Q1 earnings on May 07th, 2025. The company missed Wall Street expectations with a 7.7% decline in revenue to $247.10 million, compared to the Zacks Consensus Estimate of $246.55 million. Adjusted EBITDA for the quarter reached $64.4 million, meeting the high end of the company’s financial outlook. However, guidance for Q2 reflects a 10% to 13% year-over-year revenue decrease, with projected figures between $235 million and $243 million. Bumble’s strategic focus on member quality over quantity may impact its revenue in the short term.

Revenue

For the first quarter of 2025, Bumble's total revenue decreased by 7.7% from the previous year, amounting to $247.10 million, compared to $267.77 million in 2024 Q1. This decline was slightly better than the Zacks Consensus Estimate, which anticipated revenue of $246.55 million, resulting in a positive surprise of +0.22%.

Earnings/Net Income

Bumble's earnings per share (EPS) fell 31.6% to $0.13 in 2025 Q1, down from $0.19 in the same period the previous year. Net income also saw a significant decline, dropping 41.5% to $19.83 million from $33.87 million reported in 2024 Q1. The EPS performance indicates a challenging quarter for the company.

Post-Earnings Price Action Review

The strategy of buying Bumble shares after a revenue drop quarter-over-quarter has historically underperformed. Over the past five years, this strategy led to a return of -22.58%, significantly lagging behind the benchmark's 37.28% return. The excess return was -59.86%, with a compound annual growth rate (CAGR) of -5.89%, highlighting substantial losses. The strategy exhibited a high maximum drawdown of -24.91% and a Sharpe ratio of -0.47, signaling considerable risk and negative returns. This performance suggests that investors should exercise caution when considering this approach, as the historical data indicates a pattern of underperformance relative to the market.

CEO Commentary

Whitney Wolfe Herd, Founder and CEO, expressed excitement about steering Bumble's focus toward quality rather than scale. She emphasized the importance of enhancing member experiences and removing low-quality profiles to drive growth. Wolfe highlighted the strategic use of AI and machine learning to improve the matching algorithm, asserting that "quality is the key to enduring growth." She remains optimistic about Bumble's potential.

Guidance

Bumble anticipates Q2 revenue to range between $235 million and $243 million, indicating a 10% to 13% year-over-year decline. Bumble app revenue is projected between $193 million and $199 million, and adjusted EBITDA is expected to be between $79 million and $84 million. The company plans to focus on improving member quality and engagement, with a return to brand marketing in the second half of the year.

Additional News

In recent weeks, Bumble has made notable strides in enhancing its business strategy. The company announced a $28.7 million share repurchase under its ongoing $450 million buyback program, showcasing its commitment to returning value to shareholders. Additionally, Bumble has been focusing on improving operational efficiency and product offerings by streamlining costs and processes, as well as expanding its product features. This includes enhancements to its Discover tab and the introduction of a Coaching Hub, aimed at boosting user engagement and satisfaction. These strategic moves underscore Bumble's efforts to strengthen its market position amidst a competitive landscape.