The display outside the Nasdaq MarketSite is pictured as the dating app operator Bumble Inc. (BMBL) made its debut on the Nasdaq stock exchange during the company’s IPO in New York City, New York, U.S., February 11, 2021. REUTERS/Mike Segar/File Photo
Bumble said on Tuesday it would cut about 350 roles, marking new CEO Lidiane Jones’ first big move, after the online dating company forecast disappointing first-quarter revenue as it grapples with a slowdown in user spending.
Shares of the Austin, Texas-based company, which offers dating apps such as Bumble, Badoo, and Fruitz, fell more than 7% in extended trading.
Bumble expects to incur about $20 million to $25 million in one-time charges related to the job cuts, the majority of which will be recognized in the first two quarters of 2024.
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The company competes with larger rival Match Group, which is looking to target younger users with intense marketing initiatives, as time sticky inflation and high borrowing costs affect non-essential purchases. Last month, Match forecast current-quarter revenue below estimates.
In 2023, dating app operators remained under pressure, with Match’s stock dropping about 12% and Bumble falling about 30% on concerns of slowing growth.
Bumble expects annual revenue growth between 8% to 11%, compared with estimate of 13.3% growth.
Citi analysts said in a note on Tuesday that they are not surprised to see slowing growth at Bumble and its fiscal 2024 outlook is a “notable step down in growth.”
Bumble, which operates its eponymous dating app, expects current-quarter revenue between $262 million and $268 million, compared with analysts’ average estimate of $277.9 million, according to LSEG data.
Total paying users across Bumble’s apps increased to 4 million in the fourth quarter ended Dec. 31, from 3.4 million a year earlier.
In the fourth-quarter revenue came in at $273.6 million, falling short of analysts’ estimates of $275.3 million. It also posted a surprise loss per share of 19 cents. Analysts on average were expecting a profit of 12 cents per share.