Bumble shares sink 21% on disappointing user growth, revenue, and margin forecast

Investing.com -- Bumble shares tumbled over 21% following the Wednesday market open after the dating app company issued a weaker-than-expected revenue forecast for the first quarter.

Bumble (NASDAQ:BMBL) expects its revenue for the first quarter of 2025, to come between $242 million and $248 million, falling short of analysts’ expectations of $257.2 million. 

The company also projects weaker margins in the first quarter as it increases investment in product development. Management projected adjusted EBITDA of $60-63 million, implying a roughly 25% margin—representing a year-over-year decline of approximately 250 basis points. The adjusted EBITDA outlook came in about 11% below consensus estimates.

The company for its fourth-quarter revenue posted $261.6 million, which narrowly beat Wall Street estimates of $260.03 million.

Adjusted EBITDA for the reported quarter came in at $72.5 million, or 27.7% of revenue, compared with $73.7 million, or 26.9%, a year earlier.

Furthermore, Bumble saw a quarter-over-quarter decline of approximately 60,000 paying users in Q4, with management anticipating a steeper drop of 100,000 to 120,000 in Q1 FY25—significantly more than the Street's expectation of a 30,000-user decline.

Jefferies analysts reiterated Hold rating on Bumble shares, noting they "await better trends" as the company "continues to rebuild."

Wolfe Research analysts shared similar remarks, remaining "cautious and on the sidelines."

"We see execution post a product reset, leadership changes, rising competition, and slowing industry growth as key risk factors," they added. 

Pratyush Thakur contributed to this report.