Bumble's Q3 2025 Earnings Call: Contradictions in Revenue Growth Timelines, AI Strategy, and Quality vs. Quantity Focus

Business Commentary:

• Quality-over-Quantity Reset:
• Bumble reported a 10% year-over-year decline in total revenue for Q3, with $246 million, and $199 million in Bumble app revenue.

• This was due to the company's intentional focus on improving member quality, reducing marketing spend, and prioritizing trust and safety features.

• Retention and Engagement Improvement:

• Bumble observed a 11% RPPU (revenue per paying user) increase for Bumble in Q3, despite lower member registrations.

• The increase in retention and engagement is attributed to the quality-over-quantity reset, which aims to enhance user experience and trust.
  

  

• Brand Awareness and Perception:

• Bumble's brand awareness improved by 4 percentage points among single women aged 22 to 45 in the U.S., driven by the For the Love of Love campaign.

• This improvement is aligned with the company's strategy to emphasize real success stories and real connections to enhance brand perception.

• Financial Discipline and Liability Management:

• Adjusted EBITDA for Q3 was $83 million, up 1%, with Bumble maintaining a strong cash position of $308 million.

• The company is actively managing its financial discipline and liability, as seen in its decision to purchase all outstanding TRA rights for approximately $186 million.

• Standalone AI Product:

• Bumble is developing a standalone AI product that will leverage precise search, marking a new approach in dating apps.
• The integration of AI aims to enhance user experience, solve pain points, and potentially overlap with core products to improve functionality.
  

Contradiction Point 1

Revenue Growth and Timing

It involves differences in expectations regarding the timing and magnitude of revenue growth, which are crucial for investor projections and strategic planning.

Looking ahead two to three years, what is Bumble's key vision for how it will differ from today and achieve successful outcomes? What visibility do you have into the timing and magnitude of revenue growth bottoming and improving? - Nathan Feather (Morgan Stanley)

2025Q3: Revenue growth will follow trust and safety work completion and performance marketing resuming. - Whitney Wolfe Herd(CEO)

Can you update us on alternative payment options, including which apps are being tested and the discount ranges offered? What adoption rates are you seeing? - Andrew on for Shweta Khajuria (Wolfe Research)

2025Q2: We expect our revenue growth to reaccelerate in the second half of the year, driven by trust and safety initiatives and increased marketing. - Whitney Wolfe Herd(CEO)

Contradiction Point 2

AI Integration and Product Strategy

It involves the integration and impact of AI on the company's product strategy, which affects the user experience and potential revenue growth.

Regarding the standalone AI product Whitney, what are your thoughts and visions? Will it remain a standalone product? What does an AI-first dating app experience entail? How does this influence your perspective on the core Bumble experience? - Igor Lerunian

2025Q3: The upcoming standalone AI product is unique and separate from the current dating app experience. It will involve precise search, unlike discovery-oriented apps. Bumble will integrate AI learnings into core products, enhancing them. The product can be standalone or integrated into existing platforms like BFF. - Whitney Wolfe Herd(CEO)

Can you discuss Bumble's AI investments and their potential impact on operations and user experience? - Eric Sheridan

2025Q1: AI is crucial for safety, verification, and improving matchmaking. Bumble is leveraging AI for better profile creation and personalized matching algorithms. Efficiencies are also improved through AI use, enhancing product quality and efficiency. - Whitney Wolfe Herd(CEO)

Contradiction Point 3

Approved, Improve, and Remove User Categories

It pertains to the composition and treatment of user categories, which impacts the quality of the user base and overall platform experience.

Are there specific signs of encouragement or caution from improved members that we should monitor as we approach 4Q and beyond? - Andrew Marek (Raymond James)

2025Q3: Improved members can become approved with minor tweaks. Better profiles lead to more matches, engagement, and monetization. Improving the improved category enhances the overall experience. - Whitney Wolfe Herd(CEO)

Can you share data on the approved, improve, and remove user categories and the number of improved users who want to improve? - Andrew Jordan Marok (Raymond James)

2025Q2: Improve users make up the majority of the member base, while remove users are under 10%. Efforts focus on moving improved users to approved through product enhancements and coaching. - Whitney Wolfe Herd(CEO)

Contradiction Point 4

Focus on Quality vs Quantity

It reflects a shift in the company's strategy regarding the focus on quality over quantity, which impacts user experience and revenue growth expectations.

What is your key vision for Bumble's transformation over the next two to three years? What visibility do you have on the timing and magnitude of revenue growth stabilization and subsequent improvement? - Nathan Feather

2025Q3: Bumble's product roadmap focuses on solving for women's pain points. AI will enable rapid delivery of changes. Bumble listens to women and has a strong brand globally. The transformation is early, but AI will enhance the platform. - Whitney Wolfe Herd(CEO)

Does scaling back performance marketing spend reflect a shift in your addressable market assessment? How much growth remains in this segment, and is this a continuation of prior efforts? - Ygal Arounian

2025Q1: Quality is crucial for enduring growth. The demand for love is global and robust. Bumble will focus on high-quality, relevant matches instead of just increasing numbers. Past efforts did not fully achieve quality control, so the focus now is on intensifying efforts. Bumble's strategy is to shrink slightly before growing, focusing on quality before scale. - Whitney Wolfe Herd(CEO)