Bumble's Retention Crisis and Strategic Rebuilding: Is the Stock a Buy for the Long-Term?

Bumble Inc. (BMBL) has entered a critical juncture in its evolution, marked by a sharp decline in user retention and revenue. In Q2 2025, paying users fell by 8.7% to 3.8 million, while total users dropped to 50 million from 58 million in 2023 [1]. This attrition has dragged revenue down 7.6% year-over-year to $248.2 million, with third-quarter guidance projecting a 9%-12% decline [2]. The company’s strategic pivot to prioritize user quality over quantity—evidenced by full-price payers now accounting for 80% of total subscribers—has yet to reverse the downward trend [3].

The Retention Crisis: A Structural Challenge

Bumble’s user churn reflects broader challenges in the dating app sector, where competition intensifies and user expectations evolve. The company’s decision to phase out promotional pricing and implement stricter verification measures has led to a net loss of 209,000 payers in Q2 2025 [4]. While these steps aim to attract higher-value users, they have accelerated attrition in the short term. Analysts note that Bumble’s AI-driven innovations, such as the “Bumble Compass” algorithm and enhanced trust-and-safety tools, are still in early adoption phases and may not immediately offset user losses [5].

The company’s cost-cutting measures, including a 30% workforce reduction in 2024 and an additional 12% in early 2025, have improved adjusted EBITDA margins to 38.1% in Q2 2025 [6]. However, these operational efficiencies have not translated into user growth. Bumble’s focus on Gen Z demographics—prioritizing authenticity and meaningful connections—remains a long-term bet, but engagement metrics have yet to reflect this shift [7].

Valuation Attractiveness: A Deep-Value Play?

Despite the operational headwinds, Bumble’s valuation metrics suggest it may be undervalued. The stock trades at a P/S ratio of 0.78, significantly below the industry average of 2.26 [8]. This discount is amplified by a negative P/E ratio (-0.88), reflecting current unprofitability but also indicating a potential floor for valuation [9]. Enterprise Value has plummeted to $1.02 billion as of August 2025, a 6.32% drop from its four-quarter average and a stark contrast to its 2020 peak of $8.39 billion [10].

The EV/EBITDA ratio, though muddled by conflicting data, ranges from -1.37 to 4.96, depending on EBITDA calculations [11]. While negative EBITDA raises concerns, the company’s forward P/S ratio of 0.78 aligns with historical fair-value thresholds [12]. For long-term investors, Bumble’s deep-value status—coupled with its strategic focus on AI and user quality—could present an opportunity if the company stabilizes its user base and monetization.

Strategic Rebuilding: A Path to Sustainability

Bumble’s restructuring efforts, including discontinuing underperforming apps like Fruitz and Official, have trimmed costs by $12 million annually [13]. New features like the “Discover” tab and in-person profile-sharing aim to bridge online-offline engagement gaps [14]. The company is also testing optimized pricing strategies to encourage higher-value subscriptions, a move that could stabilize ARPPU (now $21.69) while mitigating churn [15].

However, the road to recovery is fraught with risks. Short-term user acquisition and retention could suffer as AI-driven changes disrupt user habits [16]. Additionally, Bumble’s forward revenue growth of -7.59% underscores the fragility of its current model [17].

Conclusion: A Calculated Bet for Patient Investors

Bumble’s retention crisis is a pressing issue, but its valuation metrics and strategic overhauls suggest a potential inflection point. The stock’s P/S discount and deep-value status, combined with a focus on quality users and AI innovation, could appeal to long-term investors willing to navigate near-term volatility. Yet, the company must demonstrate that its user-quality strategy can scale without further attrition. For now, Bumble remains a high-risk, high-reward proposition—a stock that demands patience and a clear-eyed assessment of its rebuilding efforts.

Source:
[1] Bumble's Customer Retention Rate Slips: Is Growth Getting Harder? [https://www.nasdaq.com/articles/bumbles-customer-retention-rate-slips-growth-getting-harder]
[2] Bumble App Revenues Decline: Is User Churn a Bigger [https://au.finance.yahoo.com/news/bumble-app-revenues-decline-user-162900550.html]
[3] Bumble Inc. Announces Second Quarter 2025 Results [https://ir.bumble.com/news/news-details/2025/Bumble-Inc--Announces-Second-Quarter-2025-Results/default.aspx]
[4] Bumble's Strategic Restructuring: A Leaner Play for Growth [https://www.ainvest.com/news/bumble-strategic-restructuring-leaner-play-growth-crowded-dating-landscape-2506/]
[5] Bumble's AI-Driven Turnaround: A Contrarian Play in the [https://www.ainvest.com/news/bumble-ai-driven-turnaround-contrarian-play-undervalued-dating-sector-2506/]
[6] Bumble to lay off 30% of its workforce [https://techcrunch.com/2025/06/25/bumble-to-lay-off-30-of-its-workforce/]
[7] Bumble's Customer Retention Rate Slips: Is Growth Getting [https://ca.finance.yahoo.com/news/bumbles-customer-retention-rate-slips-151100355.html]
[8] BMBL PE Ratio — BMBL Valuation, Is BMBL Overvalued [https://intellectia.ai/stock/BMBL/valuation]
[9] Bumble Inc. - PE Ratio [https://www.wisesheets.io/pe-ratio/BMBL]
[10] Bumble Inc. - Enterprise Value [https://www.wisesheets.io/enterprise-value/BMBL]
[11] Bumble Inc (BMBL) EV-to-EBITDA [https://www.gurufocus.com/term/enterprise-value-to-ebitda/BMBL]
[12] BMBL PE Ratio — BMBL Valuation, Is BMBL Overvalued [https://intellectia.ai/stock/BMBL/valuation]
[13] Bumble's Strategic Restructuring: A Leaner Play for Growth [https://www.ainvest.com/news/bumble-strategic-restructuring-leaner-play-growth-crowded-dating-landscape-2506/]
[14] Bumble's Strategic Restructuring: A Leaner Play for Growth [https://www.ainvest.com/news/bumble-strategic-restructuring-leaner-play-growth-crowded-dating-landscape-2506/]
[15] Bumble Inc. Announces Second Quarter 2025 Results [https://ir.bumble.com/news/news-details/2025/Bumble-Inc--Announces-Second-Quarter-2025-Results/default.aspx]
[16] Bumble App Revenues Decline: Is User Churn a Bigger [https://au.finance.yahoo.com/news/bumble-app-revenues-decline-user-162900550.html]
[17] BMBL PE Ratio — BMBL Valuation, Is BMBL Overvalued [https://intellectia.ai/stock/BMBL/valuation]