Q1 2021 Bumble Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Bumble, Inc. First quarter 2021 earnings call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone as a reminder, today's program may be recorded I would now like to do.
Share of host for today's program really Johnson of the Blue shirt group. Please go ahead.
Thank you for joining us today to discuss <unk> first quarter 2021 financial results with me today is Whitney Walker, founder and CEO, Kurt shocking President and new Super Ronnie CFO of buffer before we begin I'd like to remind everyone that certain statements made on this call today are forward looking statements. These forward looking.
<unk> are subject to various risks and uncertainties and reflect our current expectation based on our beliefs assumptions and information currently available to us. Although we believe these expectations are reasonable we undertake no obligation to revise any statements to reflect changes that occur. After this call description of these factors and other risk factors that could cause actual results to differ materially from.
These forward looking statements are discussed in more detail on their filings with the SEC, including our annual report on form 10-K. After the year ended December 31, 2020, and our subsequent periodic filings.
For purposes of today's call comparisons to first quarter 2020 are based on the company's results for the combined period of January one 2020 to January 28, 2020 in January 2019, 'twenty 'twenty to March 31, 2020 during the call. We also refer to certain non-GAAP financial measures. These non-GAAP measures should be considered in addition to and not as a substitute for.
Or or in isolation from our GAAP results reconciliations to the most comparable GAAP measures are available in today's earnings press release, which is available on our Investor Relations website at IR docs on both dot com with that I'll turn it over to Whitney.
Okay.
Thank you Brent Lee and thank you all for joining our Q1 earnings call.
Bumble, we strive to create a world where all relationships are healthy and equitable he put safety at the core of everything from product and engineering to marketing and our commitment to our mission as reflected in our strong first quarter from false.
Our mission continues to be reinforced and resonate in a powerful way as the world has been seeking Nextgen love friendship and community now more than ever before both coming out of the pandemic.
And while quarantine still persist around the world, we feel that we serve and incredibly important purpose and helping ease loneliness and helping people find good relationships and community.
We are excited with our growth and our continued leadership position in the online dating and connection space.
We are motivated by the impact we're having on live hearing stories of people finding love starting families building friendships or finding community during times of struggle remains our ultimate driving force. We believe that we are just at the beginning of our growth and impact journey. We are just scraping that.
Net of the iceberg of the addressable market for dating and friends finding around the world and our international growth suggests that our message resonate across cultures and languages.
We believe that the friendship space is the next social growth horizon, and we believe we are uniquely positioned to be the leader in that category as we've invested years into building a brand and product that women in all genders troughs are meticulous focus on shaping our marketing product and brand narrative.
Over the years has created a natural and seamless bridge for users to move from dating to friendship and for those who are not seeking love coming to bumble for Platonic relationships. This is the first in our space and a strong competitive advantage.
Before we dive into our earnings I want to take a moment to acknowledge the hardship millions of people around the world are still facing around COVID-19 countries like India, and Brazil are in the midst of some of the worst COVID-19 searches of the pandemic. This devastating wave has decimated the health care system in southeast Asia into price.
Yes.
Our Hearts go out to our teams family and friends in these countries and everyone else impacted by this ongoing tragedy and we hope for a speedy recovery.
Now, let's move on to a recap of our earnings.
Building on the momentum we saw on the second half of last year, our first quarter revenue increased 43% year over year to 171 million with bumble on revenue growth of 61% our paying users were up 30% year over year, demonstrating our continued ability to grow our community of <unk>.
EBITDA was 46 million, which represented a 27% margin.
Our results and first quarter momentum validate the strength of our womens first brand and our mission. It's the power of our brand and mission that has been a core differentiator from us from <unk>.
For us since day, one it cannot be replicated by anyone else's product feature or a clever AD campaign. It is unique only to bumble and it's why our new and repeat customers are so deeply invested in our brand.
Throughout the quarter, we were able to combine mission safety and women's focus narrative in a manner in a manner that drove notable growth across our market.
This approach was key in helping us maintain our leadership position in the first quarter.
Thinking ahead, we continue to be focused on growing globally, making strategic investments in product safety technology, and marketing that drive scale in monetization and in improving profitability. We will also continue to invest in our brands our users connect deeply with our brands making them.
On powerful marketing tool, which generate word of mouth virality and powerful network effects, thus driving user growth and strong unit economics.
Our strong performance in Q1 is a direct result of these initiatives.
During Q1, our team continued to demonstrate innovation across both bumble and Baidu apps. They drove notable growth in user engagement and retention, which in turn led to strong growth in our paying users, which averaged $2 8 million for the quarter.
On Bumble App for example, we added 150, plus new badges with categories ranging from values and traits to traveling enabling our members to highlight what's important to them. The badges act as useful indicators for compatibility.
And over 40 per cent of newly registered members adopted these batches and we saw two ex more matches for these users.
We also added a profile barometer, which shows them members progress towards completing their profile, thereby incentivizing them to fill and fill out their profile further enhancements like these improved overall user experience, while helping to drive member engagement and retention.
Similarly for Baidu, we introduced several features that improve the experience of our users specifically women. For example, we introduced gentle let downs, which offers an easy way for women to express mail remember, but they are not interested in progressing with their connection. This has resulted.
An improvement in day, one retention for new women members.
Safety and accountability.
The foundation of our business and have been from the very beginning.
In line with the central commitment to prioritizing safety in January we launched our safety center, giving members access to articles resources on partnerships related to their physical and psychological safety. This is a key step in reiterating our mission around safety and in ensuring that all.
All users uphold our values.
Kindness respect and equality.
We also instituted new community guidelines that explicitly banned body shaping on our App bumble.
Bumbles mission has always been to build a platform rooted in respect and kindness and this is another industry, leading step to make our app safer for our community.
We also continue to advocate for our customers beyond just our platforms with an active focus and approach to legislation.
Hopes of making the internet safer and Kinder place for everyone.
We also remain focused on expanding beyond dating and two new social category. As previously discussed we are planning to increase our focus this year on our friend discovery platform Bumble BFS and are accelerating our efforts around product development.
Work is ongoing and we are just in the early stages over 90% of women, who initiated contact in BFS in March down to at least one match and during Q1. The average time spent on BFS has grown 44% for women and 83 per cent for men, we see it.
Huge opportunity here.
S assets for people looking for community and friendship through many life stages.
And as we see evidence of this today and the high engagement.
We find in several new communities such as the young professional community the parenting community.
Or say women going through menopause as well as people who have found their successful romantic partners on bumble, but we're now looking for new friends.
We are committed moderation safety inclusivity and accountability being at the helm of the relaunch of this product.
We look forward to updating you on our progress later this year.
Now, let's briefly talk about how we are improving monetization our people for the group in Q1 was up 13% year over year.
As we mentioned on our last earnings call Bumble premium our second revenue tier is live globally in Iowa.
In Q1, we continued the rollout of bumble premium to Android users with Australia, UK, Canada, and the U S now fully live.
We continue to be pleased with results that we've seen so far.
There has been a positive impact on our people in all core market with the app with the opportunity to optimize even further.
We remain on target to complete the global rollout by the end of 2021.
In addition to our work on pricing tiers, we continue to experiment with other ways to improve and enhance our monetization offerings.
For example, one of the new features that we are testing on bumble is advanced filter.
These enable our paying users to better customize their results by specifying their preferences.
We are also experimenting with next generation consumables, which have the potential to both increase revenue and drive new types of engagement on <unk>.
But you were testing a number of enough.
Purchase feature which will bring more visibility for our users helping them get to a match faster.
Building, our brand organically is central to growing our user community regionally and globally. We do this by taking a very granular and grassroots approach we focus on building our communities in each city and also in speaking directly to distinct groups of users.
Our find them on Bumble campaign deployed in a city specific manner in places such as New York, Los Angeles, and Sydney emphasizes the depth of our network within different markets.
Similarly, we have leveraged our strength and tailoring our product and marketing efforts.
Meek means that each of our users.
To create a diverse and inclusive community with impossible. For example, we're seeing our LGBTQ user growth substantially outpaced the average in both Western Europe and the U S.
We continue to adapt to the impact COVID-19 has had on our business and in the dating world.
We introduced a dedicated detection, we're matched members can showcase their preferences for dating during COVID-19.
I can say preferred park or masks on et cetera. We also tested our first virtual dating a solution, allowing members to get to know each other in a fun and safe way a night and is an in App date, where matches can schedule a video date and trivia night with each other.
It is still early we are seeing a terrific response from our users a large number of our video chat chat now include a night inexperienced and 87% of our night end users have said that they would use this experience again.
We are focusing on taking the learnings to build a more comprehensive set of dating experiences for our customers.
Despite lockdowns in many regions throughout Q1, we continued to see very rapid growth and momentum from bumble throughout Western Europe, particularly in Germany and France.
And they you in Germany for example was up 160% year over year and our relaunch in France. This week has already driven positive results. We have leveraged this playbook in regions, such as the Netherlands and Brazil.
This just reinforces that bumble is needed and wanted around the world.
However, the uncertainty around the pandemic and the difference as we see from country to country in terms of Lockdowns and vaccine just distributions are still that we are constantly speaking for our users around the world and listening to how they are dealing with the ongoing situation. So that we can better understand there.
Plans as the pandemic conditions evolve we saw for example that the stimulus checks from the U S led to a temporary acceleration in revenue from both our bumble and Baidu users.
Lifting of the restrictions in the U K resulted in stronger engagement from both our existing users as well as an increase in patient payer and daily active users.
This and other similar examples lead us to believe that there is meaningful pent up demand as economic and health conditions improve across regions.
We've leaned into these pockets of optimism and relief with our marketing campaign, you've got that in the U K and Western Europe, helping our users build the confidence to start thinking about dating again once restrictions start to ease.
We would caution however that the situation does remain very fluid and somewhat unpredictable on the ground.
And our focus is on being able to respond quickly and effectively when our users begin to want to meet in person while continuing to serve those who continue to be heavily impacted by the pandemic regardless of pandemic conditions.
People around the world want and need to find love and connection.
Bumble will continue to be there for them.
In conclusion, we are focused on making strategic investments in growing our community.
Product safety and technology to capitalize on the large market opportunity that exists bump.
Bumble is more than our apps.
Our mission is powering a movement building healthy and equitable relationships for all.
With that thank you so much for your time and I will now turn it over to on now to discuss our financial performance.
Thank you Whitney and Hello, everyone. Thank you again for joining us I.
I will start with a review of our fourth quarter earnings and key highlights and then turn to our outlook for the year on.
I am pleased to report that we had a very strong Q1 total revenue in the quarter grew to $171 million, an increase of 43% year over year with total paying users growing by 30% and group RP pool growing to $19 99, an increase of 13% year over year as a reminder.
Revenue in Q1, 2020 was impacted by a 9 million reduction in deferred revenue recorded in purchase accounting.
Bumped off revenue was $113 million for the quarter representing growth of 61% year over year.
This growth was driven by a healthy combination of increase in paying users as well as our people bump.
Bumble I paying users increased 44% year over year.
We continued to see strong growth in both North America, where we also saw paying users rise sequentially as well as in on International region.
We talked about several monetization and product features throughout the second half of 2020 as well as some new features like advanced visitors in Q1 2021 that contributed to this group.
Bumble apps RP pool increased 12% year over year. It remained flat sequentially due to fewer days in the quarter compared to Q4 as well as due to a higher mix of payers in on international market.
We continued the rollout of bumble premium for Android in Q1, and we continue to see a positive impact on our people in these launch countries.
But do App and other revenue was 58 million in Q1, which was up 18% year over year.
Similar to Bumble. This growth was driven by strong improvements in per penetration with paying users up 19% year over year with strong contributions from countries, such as Brazil, Russia, and the United States.
Last quarter, we had been working on re optimizing core features such as both GAAP and extra shows which have driven these improvements in payer penetration.
But do App, our people increased by 4% year over year.
Let's move on to expenses in the quarter, which we will discuss on an adjusted basis, excluding the impact of stock based compensation and one time transaction related costs.
Our cost of revenue was flat year over year on a 27% of revenue sales.
Marketing expenses in the quarter with 24% of revenue down from 32% in Q1 2020.
Although our cost as a percentage of revenue has declined our total investment has increased demonstrating our ability to create operating leverage as revenue scale.
We remain focused on attracting new users both in North America and internationally with campaigns such as find them on bumble performing growth in Q1.
G&A expenses reduced slightly to 12 per cent of revenue compared to 13% in 2020.
This was due to lower spend on travel and entertainment and office related expenses.
Adjusted EBITDA grew to 46 million and on adjusted EBITDA margin expanded to 27%.
During the quarter, we booked 46 million in stock based compensation expense, which was up from $6 million in Q1 2020.
This increase was due to a modification of our stock awards as well as the acceleration of certain performance criteria being met post IPO.
In Q1, we recorded a positive net earnings which included a onetime 442 million tax benefit related to the release of our net deferred tax liability.
This reversal resulted from a restructuring of our international operations, which we completed in connection with the IPO.
After a successful public offering in Q1, we used part of our IPO proceeds to repay 200 million off on incremental term loan in March and we ended Q1 with a total cash of $246 million.
Moving on to our financial outlook for next year.
For next quarter and the rest of the year two.
<unk> 2021 it's still an unpredictable you're given the uncertainties around COVID-19.
You said on the vaccine Rollouts is definitely promising and we will continue to monitor how this impacts different regions and countries. Our outlook is a realistic reflection of the product features we expect to launch on the market expansions, we have planned for this year.
We are keeping a close eye on market conditions, and reopening and if we see opportunities we will look to accelerate investments in areas such as marketing as appropriate.
So with that background for.
For Q2, we expect revenue of 175 to 178 million debt presenting a growth rate of 31% at the midpoint of the range. We expect adjusted EBITDA to be in the range of 42 to 44 million, which represents a margin of 24% at the midpoint for full year 2021, we are raising on guidance for both revenue.
And EBITDA, we expect revenue in the range of 724% to 734 million a growth rate of 25% at the midpoint of the range for adjusted EBITDA. We expect 177 to 182 million, which represents an EBITDA margin of 25% at the midpoint.
In conclusion, we had a strong start to the year on Q1 performance reflects the growth in our community and the investments we are making in capturing the vast market share that is ahead of us.
Feel confident in the strength of our business on ability to grow users monetize and delivered results and with that operator, we'd be happy to turn to Q&A.
Good day, ladies and gentlemen.
At this time. Please press Star then one on your Touchtone telephone. If your question has been answered and you'd like to remove yourself from the queue. Please press the pound key.
Our first question comes from the line retrieve on cut Julia from Evercore. Your question. Please.
Okay. Thank you that's a shop at Evercore can you. Please talk about engagement trends I mean, you've touched on this with me, but would love to get a little bit more detail on how you saw engagement and user propensity to pay sort of trend in United States.
The economy here was more open than perhaps India, or Brazil, or Europe, and any anything that you know really stuck out to you not only in Q1, but Q2, so far and then the second question is are you baking any.
Talked about pent up demand. So is you know the impact on the reopen and pent up demand baked into your full year guidance. If so could you. Please help us frame that thanks.
Yeah.
Hey. This is this is tarik I'll take the first part of the question and then turn it over to on new for the second part.
I think as Whitney mentioned, we are definitely seeing signs of increased engagement in the U S. As the both the economy gets a little bit better and as vaccinations rollout in the.
And the health situation improves we have seen particularly.
We have a large installed base and we've seen a trend up in the re engagement levels are that means users who had opted out during the pandemic starting to come back and that is definitely fueling the active users that we have on the platform and that is something that we've seen we're very strong in Q1 continued to be strong in Q2.
We're also seeing engagement on.
On the platform itself from from existing users continue to trend up as well the number of messages sent for example was up about 10% year over year in Q1 versus the pre COVID-19 levels. So we're definitely seeing high levels of engagement in the U S improving levels of engagement in the U S more people coming into the market.
I think what is still very clear on wood I think.
Tempur those statements is that it is very much a local phenomena and it really is city by city County by County State by state because of just the economic.
<unk> situation I think you see this not just in our data, but if you looked at what open table publishes around restaurant reservations, how much people are meeting up in person youre seeing it very very much by city. We're seeing that same trend. So we are optimistic about things as vaccinations continue to rollout as the economies continue to reopen but.
It is I think still a little touching on exactly when is that going to happen.
That's the U S point I think just.
Probably preempt the question a little bit on globally. We're also seeing very similar trends globally. If you look at.
We have markets that are reopening have high levels of vaccination or reopening in other ways. You are starting to see very positive trends as well we're seeing.
Rapid growth in countries like Israel as an example, with a very high on vaccination rate. The UK has trended up as they've started to relax the lockdown that they've had.
In the U K and so we are definitely seeing that notion of pent up demand, we do share from our users that there is almost a historic level.
Pent up demand out there there is a real need to go out and meet people people are just trying to figure out when is it going to be safe to do so.
And and Theyre, taking advantage when they have the opportunity to do that.
I think the final point.
On on COVID-19 would be.
<unk>.
We are.
Seeing very high levels of engagement now during the pandemic and we are seeing more people essentially come into the market as as these markets.
Liberalize.
It was probably the wrong word as they open up somewhat and so we do.
Believe that the engagement gains that we've seen through the pandemic are continuing to be sticky and will hopefully continue to play well for us as markets open up.
Andrew do you want to add in terms of the second question around what is built into our outlook like I said earlier.
What we've included today in our outlook is a realistic reflection of what we expect to happen in the second half.
You know we've said before we have.
International expansion plans that are built into our forecast for this year.
And.
That's what you see reflected in the numbers just as a reminder, we had.
On an extremely robust second half in 2020.
And our growth rates for example in Q3 and Q4 were close to 30%. So as you think about year over year growth rates for second year second half of 'twenty, one versus 'twenty that is also on.
An important factor taken into accounts.
Okay. Thanks, Donald Thanks Derek.
Thank you.
Our next question comes from the line of Nick Jones from Citi. Your question. Please.
Great. Thanks, Thanks for taking my questions I guess.
Could you maybe drill down a little bit into the non dating.
Solutions Bff's sounds like is there an incremental investment.
You know maybe more than what you kind of thought from last quarter, and then I thought the comment on next generation consumables or interest rate could you expand a little bit more on on that opportunity. Thanks, Yeah sure. Thanks for the question so.
Friendship is a huge opportunity as we discussed earlier and it has not been tapped yet not not even to the degree of where we believe it will go if you think about where online dating was back in call. It 2012. The demand is there for community in front of finding and we've seen that.
Just by way of the data and our product looking for friends and that's authentic and organic way. So when we talk about the investment we're making first and foremost we're doing a product relaunch a major product relaunch that is currently in the works.
And we cannot disclose too much more information as it is currently being worked on but we really fundamentally believe that once the product is in a place that it is a tailored and designed to be used for from finding in a seamless way and Ah is really reinvested in properly.
And then marketed it.
In line with that we think that we are going to see a huge surge in in those coming to find platonic connections. So as it go as far as investment and this goes we cannot disclose any more details, but I can tell you. It's a high priority for us internally across across all of our teams.
And on the point on on consumables Theres.
Theres a couple of different things going on here. The first is that we do recognize that as a as a premium app. There's a there's a psychological barrier almost to getting people to consider us to be a paid experience as opposed to just a free experience and we do believe particularly in some countries in Asia as well as in other parts of the world that it consumed.
Mobile based model.
A gateway into the subscriptions is.
It's really important and we will drive up.
Subscriber rates over time, and so part of the consumable strategy that you're hearing US talk about is really anchored in that notion I think the second is.
We do believe that there are elements of the experience that we can add to buy.
By by offering new value added services that just don't lend themselves to a subscription type of model, we already have a super swipes as an example in the product where you can swipe to increase visibility. We think there is other fund playful ways that you can also make yourself stand out just a little bit more in in the <unk>.
Experienced and so we're in testing on both bumble and but do around a range of those different opportunities. We think those would add both ARPA and actually as I say over time, we believe also at.
Subscriber rates growing as well.
Great. Thank you.
Thank you.
Thank you and ladies and gentlemen, today, we have a full queue. So in the interest of time, we'd like to ask you to please limit yourself to one question. Each you may get back into the queue. As time allows our next question comes from the line of Cory Carpenter for J P. Morgan Your question. Please.
Alright noted I will I will cut my question down to one so just hoping you could talk talk more about bumble product in general.
Certainly when you hear about the premium tier on how the rollout is going or the adoption relative to your expectations and the type of <unk> and renewal rates, you're seeing and then also just beyond premium the broader product roadmap and your plans for the rest of the year. Thanks.
Thanks, So much for your question on who's going to take the first half of that question and then I'll jump in on broader product plants.
Sure Hey, Corey.
So with respect to bundled premium as we've said we've started to.
Launched Android in across the globe and we've launched it in four countries. So far I had mentioned last time, we spoke that we saw strong adoption.
In November and December when we launched in iOS, we've seen similar number for Android as well. So we continue to be pleased with how the rollout is going obviously, we still have a long way to go in terms of <unk>.
Finishing a rollout so you know.
More to come on that as we as we go through that this year.
Yeah, Great and then as far as broader product rollout, we are really looking and listening to the customer. This is fundamental to us we are asking the customer what do you want out of this experience in life has evolved over the last year and a half with this pandemic and needs have changed and so continuously reinvest.
Thing in the transition from the stay at home life to going back to <unk>.
IRL dating and really making sure that we are at the forefront of engineering, a safe accountable, but also seamless experience and allowing people to tailor what theyre looking for them to be really granular on the customer. So an 18 year old is looking for something very different than.
A woman in her mid fifties might be looking for and so the future of bumble product has to be really tailored to the customer and to give them what they're looking for from the experience I think one of our strength is that we really listen to the customer. This is something we spend a lot of time on and this is what will continue to guide us as we evolve our product feature going for our product.
Teachers on Roadmaps going forward.
Great. Thank you both.
Thank you.
Thank you. Our next question comes from the line of John Blackledge from Cowen Your question. Please.
Great.
Thank you I think one other big expansion initiatives for Bumble up is that you know.
Non English speaking markets growing that penetration just curious on if you can provide any any color there on how that is going thank you.
Sure.
So as you mentioned for Bumble, we have really been emphasizing expansion into western Europe.
For the first quarter and continuing in the second quarter, we are seeing as as winning on who mentioned tremendous growth not just in Germany, but in the whole region of Europe to the German speaking markets. We are seeing very very strong growth in the triple digits year over year in.
And France, continuing very strong growth in the Benelux region as well and.
<unk>.
In parts of Northern Europe, we're continuing to accelerate our investment there as well so as we think about the non English speaking markets in Europe, very very pleased with the progress that we're seeing both in and the monthly active users as well as payer penetration in those markets. We are also continuing to invest and see.
And into pockets of Southeast Asia, we are seeing very strong.
Active user numbers out of markets like Indonesia, and the Philippines. We're seeing also very strong growth out of areas in Latin America, like Mexico, like Brazil, and so we really do think that the first quarter and what we're seeing so far in the second quarter are continuing to highlight the fact that the bumble value proposition.
Really is not not quote unquote adjusted in English speaking markets phenomenon, but really does apply in both western Europe, and southeast Asia, and including in majority Muslim countries like Indonesia and in Latin America. So, we're very happy with that and we'll be continuing our investments there yeah and just to add one final note on that I think.
It's just really goes to show what we've been saying for years women universally are looking for healthy respectful and equitable connections relationships and the the brand we have built resonates around the world as does the product and this is really being proven as park suggest.
And in a bevy of countries and we're Super excited about the runway ahead of us and again, we're very early in our international growth story and that's that's that's definitely.
Something we're incredibly excited about as the quarters continue.
Thank you.
Thank you. Our next question comes from the line of Lauren Chung from Morgan Stanley. Your question. Please.
Great. Thanks, so much I'm just wondering if there's any any incremental color you can give on how we should think about bumble apps versus baidu revenue within the second quarter guidance and then.
Within that paying user versus versus <unk> trends for the bumble apps.
Sure. Thanks, so on and I can take that so.
I think the way.
I'll start with the second part of your question because I think we've said for both bumble and would do.
No.
Paying users is a huge area of focus for us for both of these apps you know we will be doing a lot of work from a product perspective too.
Improve our payer penetration.
And consequently increase paying users so that is definitely something that is.
Ongoing in in Q2 and is reflected in the numbers that we are looking at.
In terms of our people, obviously bumble premium is.
So to be launched in Android.
Many parts of the world So that is definitely something that.
We expect to impact our people for bumble in Q2 from Baidu I think you know we don't have any big.
Big our people initiatives.
That are planned for Q2, but.
But for Bumble suddenly.
The growth has slowed down.
Yeah.
Thank you. Our next question comes from line of Deepak opinions from Wolfe Research. Your question. Please.
Great. Thanks for taking the question I wanted to ask about customer acquisition debt.
Advertising pricing seems to be increasing pretty pretty high in various channels, obviously as many sectors start to come back.
But for you guys I know you have a higher organic profit mix, but how was your paid marketing strategy changing right now if at all and then how should we think about the levels of marketing spend for the rest of the year.
Yes.
Sure Al.
Give that a try I think.
As you mentioned a lot of our customer acquisition.
Almost 80% or so of our new customers comes in because of organic.
Means and so that would be word of mouth, our brand activities or influencer activities that sort of thing and so that in part does insulate us from the <unk>.
Add increases that you are seeing in a number of channels out there. So so that is something that we think from a strategic standpoint, we're continuing to lean into we are we are a very nimble.
Our marketing team on the performance marketing side, it's a little complicated with the rollout of iOS 14, five and and the idea of <unk> changes that are happening right now it's too early to tell what it is.
Impact, we're seeing from that but we do.
We are keeping a close eye on it and I think we will be shifting channels as we get more data coming out of that so there's really no material changes at the moment.
That we are doing beyond the day to day optimization, but it's still quite early to tell with some of these changes that Apple is rolling out on what the impact of that is going to be.
Thank you. Our next question comes from the line of John Egbert from Stifel. Your question. Please.
Great. Thank you.
As you rollout bumble premium across new international markets have you been tinkering with price points and or feature sets for the premium memberships as you gauge the receptiveness from users in those markets and just as an extension of that do you in general see noticeable differences in demand for specific premium features or consumable items when.
You look at one market versus another.
So certainly the focus at the moment is rolling out premium.
Packaged globally.
We do.
I think to its use words to tinker with the price points right and just understand what is the elasticity in any given market, what's the willingness to pay in different markets that sort of thing we have a pretty constant optimization effort around that.
Geared towards optimizing revenue payer penetration or RP pool per se, but that as.
Worked on our revenue team does day in and day out and it is more focused at the moment on.
On the price point and payer penetration optimization not as much on the feature set I do think that per.
Part of the consumable strategy that we talked about earlier is to give a little more flexibility by market because we do see different markets, where our where the behavior is different than to us.
Perhaps.
Slightly off topic example, but we do know in some markets like India. As an example, BFS has a is a strong on ramp into the day product.
And so there are different products that we believe we can offer there to make the on ramp into online dating just easier versus a market, where it's more normalized like in the U S. And so we are probably looking at the consumables more for that.
Feature set tinkering than.
Then subscriptions themselves right now.
Thank you.
Thank you. Our next question comes from the line of Dan Salmon from BMO capital markets. Your question. Please.
Hey, good afternoon, everyone Whitney one of the strength of Bumble is always be on core position in safety and trust amongst dating applications, whether it was first message for women total verification lots of different things.
Now, we see your competitors investing a little bit more heavily in this area.
The other public company disclosing a $100 million invested in this area earlier.
Do you believe safety and trust is becoming more table Stakes at this stage and is your traditional differentiation here more or less important going forward.
Hi, and thanks, so much for the question I'm glad you asked this is so important to us so a little bit like a brand trust and safety has to be incredibly genuine authentic and foundational right and I'm certainly not putting anybody down I'm, just highlighting our strength here.
And from day, one everything we have done has come with a certain requirement and that is safety that is protecting the women customer and inherently protecting all customers. This is Ben so core to the way we have engineered the product in every feature from day, one that it is just seamless and it's.
Natural and if authentic.
And so we don't need to carve out a certain bucket of investment to go and add this on top of our foundation. This is what we do every investment we make is safety everything we do is about protecting the customer fighting for a quality and fighting for a kind are more accountable.
Some environment and Internet and when it's authentic and natural it doesn't have to be an additional investment. It just it's just part of our daily process and so I think what you'll see moving forward is just more from US right. Every move we make every roadmap we put out there every marketing.
Wonder we have is rooted in kind that accountability and safety and this is why our brand is our brand and that's ultimately to one of the earlier questions was about the marketing mix the payer mix on advertising and an organic this is why bumble grows organically because we have trust from the customer because we.
<unk> done this from day, one and it's who we are.
That's great. Thanks Lynn.
Thank you.
Thank you. Our next question comes from the line of <unk> from <unk>. Your question. Please.
Taking my question.
So this is.
The quarter that we are starting to see your RP.
<unk>.
Pickup versus the growth last year was driven all really by paying users can you just give us more color on some of the some of the things that are <unk>.
Helping that and kind of what you expect and this is most of that the bumble.
Premium tier or are there other things that are helping there as well. Thank you very much.
Yeah, Hi, I can take that so yeah, absolutely I think bumble premium.
We launched it in Q4 of last year and it has been.
A standout product for us it has been.
For now it is definitely on our people play for us.
We've talked often in the past about how we would like for that too.
Become.
An enabler for getting more people into the funnel, but right now we're very focused on ensuring that people that are not lower price tier, which was called bumble blue booths are now moving to the bumble premium tier and more than two thirds of our.
Customers today are on bumble premium and that is really what do you see it reflected in the RFP flow numbers that you see.
Great. Thanks on here and congrats on the quarter.
Great. Thank you.
Thank you. Our next question comes from the line it might be from Goldman Sachs. Your question. Please.
Hi, good afternoon, and thank you very much for the question I was just wondering if you could provide your latest thoughts on the future of mobile platform fees and could you just remind us what you're assuming for changes to the.
Google play store in the guidance. Thank you very much.
Yeah, Hey, Mike So.
So we are continuing to have discussions with Google about the proposed Google play change, which is expected to happen in Q4 of this year.
And on.
Our conversations are still ongoing and things are still fluid in terms of what that would actually look like.
Once we get to October.
So we will provide more details.
In terms of specifics as we have them. Our current guidance does is young on the lower end that.
Any impact from Google play.
It does it does built and it has built in the impact from Google play.
Great. Thank you on it.
Thank you. Our next question comes from the line of Brent Thill from Jefferies. Your question. Please.
Thanks, a new on.
On just the guide I think Theres a lot of <unk>.
Questions you had a 43% growth in Q1, yet you're guiding the full year to 25, I think we all recognize the back half of the year gets harder but when.
When you beat by $6 million and you raised the guide by <unk> and given the overall demand environment is improving I think everyone's just trying to understand is there is there something that's happening that you're you're not seeing fall through because I think many would think that environment is opening and you can hear on the tone of everyone on the call that things are better, but but why not the <unk>.
Paul through in terms of your overall view for the back out from here. Thanks.
Yeah sure you know like I said in my in my remarks, I think on.
Outlook reflects.
Our current view of what we are seeing we are seeing cautiously optimistic I think.
Tarek mentioned earlier, there isn't always a perfect correlation between when a.
Our market opens up and when people actually start engaging actively in the dating ecosystem. So things are pretty fluid across many markets. So.
Hmm.
We just have to sort of see how things go we feel good about weighted Q2, it and that's reflected on the guide that we that you see here for Q2 and like I said earlier acuity in Q4, we do have difficult comps just given.
On the phenomenal growth we had in the second half of 2020.
And we start lapping a lot of monetization features that we'd always out starting in Q2 of 2020.
So that is.
On the good evening and thinking behind the numbers that you see.
In front of you today.
Thank you for the color.
Thank you.
And our final question for today comes from the line of Andrew Marc from Raymond James Your question. Please.
Hi, Thanks for taking my question, but you specifically can you talk about the drivers behind the RP from growth in <unk>, if there's anything specific to call out there and just in general how you're thinking about product innovation and pricing optimization or monetization for <unk> specifically thank you.
Price do you want to start with deposits.
Sure I think the important thing to note.
About but do is that we believe that due to the baidu user.
Is typically a more middle class in emerging middle class user around the world and we do believe that they have been economically more impacted by COVID-19.
Then.
Then the average bumble user as an example, and so we do see that that in different parts of the world, we are seeing that but to use or be more challenged.
Both economically that gets into appetite to pay et cetera.
That we're seeing on on with you I'll, let <unk> speak specifically to the trend that we have there again with the testing that we have on consumables is to make sure that we've got lower price point on ramps for.
For people in some of those markets to start having that value added experience without necessarily having to opt into the full subscription on day, one and so so that is certainly a piece of it I think as we think about that but do value proposition moving forward, where we're leaning in with the product that very much is.
Is anchored in this notion that as the economy gets better as the health situation gets better in a range of different markets.
A lot of the Baidu users are already out there in many cases essential workers. There are people, who are out and about but they are trying to meet people theyre trying to burst out of this this area of loneliness and so the value proposition around.
Location around speed of contact around the ability to connect seamlessly and easily on do is something we're really leaning into we think that serves a really unique need in the market, particularly in these times win win.
A lot of our users on Baidu feel and there were distressed and stretched and a number of different things like that emotionally and we're trying to make sure that we have that low stress environment, where they can again connect quickly and easily with with somebody as to burst out of that so that circle.
Loneliness and.
I know you want to speak to the next piece, yeah and in terms of the actual RFP for growth I think that is a little bit of the benefit of the deferred revenue from last year that is reflected in those numbers. So you see that and then I think the points of time.
Optimization work that we're doing with <unk>.
Consumables, especially on some of the new markets that are less hit.
By COVID-19 like for example, Russia.
Consumables.
Tweaking it on with that.
So that is what you've seen in other.
Our people numbers reflected.
Does that answer your question.
Yes. Thank you.
Thank you thanks, so much.
Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the question and answer session as well as today's program. Thank you for your participation you may now disconnect good day.
Okay.
Okay.
Good day.
Okay.
Yes.
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