Bumble Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; comparisons are with Q1 2023 unless noted. Bumble operates dating and social networking apps, monetized mainly through subscriptions and in-app purchases. The filing is unaudited.
Financial and operating performance
| Metric | Q1 2024 | Q1 2023 / prior date |
|---|---|---|
| Revenue | $267.8 million | $242.9 million; up 10.2% |
| Net earnings (loss) | $33.9 million | $(2.3) million |
| Net earnings attributable to Bumble Inc. shareholders | $24.6 million; $0.19 per diluted share | $(1.6) million; $(0.01) per diluted share |
| Operating earnings | $48.8 million; 18.2% margin | $9.1 million; 3.7% margin |
| Adjusted EBITDA (non-GAAP) | $74.0 million; 27.6% margin | $59.3 million; 24.4% margin |
| Operating cash flow | $2.4 million | $13.4 million |
| Free cash flow (non-GAAP) | $(0.4) million; (0.5)% conversion | $6.6 million; 11.1% conversion |
| Cash and cash equivalents | $262.7 million | $355.6 million at Dec. 31, 2023 |
| Debt, including current maturities, net | $619.9 million | $620.9 million at Dec. 31, 2023 |
Revenue increased in both Bumble App ($215.8 million, up from $194.3 million) and Badoo App and Other ($52.0 million, up from $48.7 million). Total paying users rose to 4.02 million from 3.46 million. Total average revenue per paying user declined to $21.84 from $22.83; Bumble App ARPPU was $26.34 versus $27.93, and Badoo App and Other ARPPU was $12.35 versus $12.47. Fruitz was included in operating metrics starting in Q4 2023, and prior-period metrics were not recast.
Cost of revenue was $81.3 million, or 30.4% of revenue, compared with $70.6 million, or 29.1%. Selling and marketing was nearly flat at $63.6 million. General and administrative expense fell to $20.9 million from $49.8 million, reflecting lower stock-based compensation and a $15.0 million increase in gains from remeasurement of contingent earn-out liabilities, among other items. Net interest expense increased to $8.9 million from $5.2 million, primarily due to higher borrowing rates.
Cash declined by $92.9 million from year-end, primarily due to repurchases. Financing cash outflow was $94.4 million, including $62.1 million of Class A share repurchases and $22.2 million for repurchased Common Units; capital expenditures were $2.8 million. Current assets were $394.1 million and current liabilities $201.2 million at quarter-end.
Changes, outlook and notable items
- Workforce restructuring: Announced February 27, 2024, the plan reduces the global workforce by approximately 350 roles. Bumble recorded $16.6 million of charges in Q1 and expects total non-recurring charges of $20–22 million during the first three quarters of 2024, with completion expected in Q3. Most charges are expected to result in cash outlays.
- Repurchases: $84.4 million of shares and Common Units were repurchased in Q1, excluding excise tax obligations. $58.7 million remained authorized at March 31. On May 8, 2024, the authorization was increased from $300 million to $450 million, bringing available capacity to $208.7 million.
- Debt and rates: Term loans mature January 29, 2027; stated rates at March 31 were 8.18% and 8.68%. Interest-rate swaps cover $350 million of notional debt and fix its variable-rate element at 3.18% through January 2027. The company reported compliance with financial debt covenants.
- Management liquidity view: Management said available cash and expected operating cash generation are sufficient to fund activities and business plans for the next 12 months. This is subject to operating and market conditions; the filing does not provide numerical revenue or earnings guidance.
- Legal and other contingencies: Accrued litigation provisions were $48.4 million at March 31, versus $65.8 million at year-end; $19.8 million was paid to settle litigation during Q1. BIPA claims include class actions and approximately 29,000 pre-arbitration demands; the company reported an agreement in principle in certain matters and recorded about $2.5 million of related Q1 costs. Unruh Act individual demands are in mediation/settlement processes; a further putative class action was filed April 9, 2024. Outcomes and potential liabilities in several matters remain uncertain.
- Other obligations: The tax receivable agreement liability was $419.3 million. If additional tax benefits become realizable, the company says it would record a further $290.5 million, for a potential total of $709.8 million. A cloud-services agreement has a remaining minimum commitment of $6.7 million. A contingent earn-out of up to $150 million is dependent on specified performance criteria.
- Risks and sensitivities: The filing highlights user retention and conversion, competition, app-store distribution fees, privacy and cybersecurity, regulation, substantial indebtedness, macroeconomic and geopolitical conditions, and foreign exchange exposure. A hypothetical 10% change in the British pound and euro would have changed quarterly revenue by $6.1 million; a 1% interest-rate increase would have increased Q1 interest expense by $0.7 million after swaps.
Important facts for investors to verify
- Whether paying-user growth can persist and offset declining ARPPU; note Fruitz’ inclusion makes historical operating-metric comparisons less directly comparable.
- Whether restructuring delivers expected operating leverage, and the final cash costs and timing of the plan.
- Cash generation relative to reported earnings: Q1 operating cash flow was only $2.4 million and free cash flow was negative, despite positive net earnings and Adjusted EBITDA.
- Repurchase pace and funding needs alongside debt service, legal settlements, and potential tax receivable agreement payments.
- Developments in BIPA, Unruh Act, and stock-offering-related litigation and SEC inquiry; outcomes and any additional losses are not clearly determinable from the filing.
- Adjusted EBITDA and free cash flow are non-GAAP measures; review their reconciliations and limitations alongside GAAP results.