Q3 2021 Bumble Inc Earnings Call
Yeah.
Good day and thank you for standing by welcome to Bumble third quarter 2021 financial results Conference 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 that session you will need to press star one on your telephone.
Do you require any further assistance please press star zero.
I would like now to handle the conference call back to Cheryl balance, whether VP of Investor Relations.
Thank you for joining us to discuss bundled third quarter 2021 financial results with me today are redeemable founder and CEO, alright, shocking president and a new Super Lion CFO a bubble.
Before we begin I'd like to remind everyone that certain statements made on this call today that are forward looking statements.
Forward looking statements are subject to various risks and uncertainties and reflect our current expectation based on our beliefs assumptions and information currently available to us.
We believe these expectations are reasonable we undertake no obligation to revise any statement to reflect changes that occur. After this call descriptions of these factors and other risks that could cause actual results to differ materially from these forward looking statements are discussed in more detail in our filings with the SEC.
Our annual report on Form 10-K for the year ended December 31, 2020, and our subsequent periodic filings.
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 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 the Investor Relations section of our website.
I R thought bubble dot com.
With that I'll turn it over to liquid.
Good afternoon, and thank you all for taking the time to join US today I hope everyone is staying healthy and well.
As we draw closer to Thanksgiving weekend here in the U S I'm, especially grateful for the opportunity we had in late September to be together in our London office for the first time in over 18 months. In addition to a very productive week of meetings. The highlight for me was being able to catch up in person with many tenured members of our team.
As well as finally meeting several wonderful and talented newbies that have joined us in the last year and a half.
It reminded me of a quote that someone's yard with me that I wanted to share here today.
The pandemic has reminded us that life is more than what we do it is about whom we spend our lives with we cannot hug a career or locked with the promotion. We are made for friendship love and community.
Our bundle Inc. We remain committed to our mission of creating a world where all relationships are healthy and equitable and are providing our users with easy compelling ways to find the connections. They seek we do this via our two brands Bumble App and Baidu App, which are two of the leading players in the rapidly growing global.
Online dating market.
This is a market that in 2020 had a global Tam excluding China of $5 3 billion and is still in relatively early innings of growth with robust secular tailwind as people become increasingly comfortable with leveraging technology to interact with others and there's more users have seen the value proposition.
Online dating offers from a choice convenience and even cost standpoint, we believe there is ample runway for Tam expansion through broader user adoption.
Their conversion and revenue growth per user apps today still have a small wallet share of overall dating spend in online dating is not a zero sum game with most users on multiple apps at any given time. So this long tail of secular growth combined with our unique strength and differentiated core value proposition.
And adds up to a tremendous opportunity ahead of us that we are really excited about.
Our broad global footprint across each of these apps and our market leadership position as reflected in our strong results. This quarter at a group level bubble, Inc. Delivered total revenue of $201 million, which was up.
<unk> went from last year, and adjusted EBITDA of 54 million, representing an adjusted EBITDA margin of 27%. We grew total payers to $2 9 million million, while average revenue per paying user or are people accelerated by 19% on a year over year basis.
Let me Unpack these result and share more detailed updates beginning with bumble app.
<unk> had another excellent quarter with revenue of $142 million up 39% year over year, and representing more than 70% of total company revenue for Q3.
We saw strong engagement across the app with record levels of activity once again and monthly active in daily active users leading to total paying users of $1 5 million up 20% year over year.
I'm proud of the brand affinity trust and loyalty, we have with Bumbles rapidly growing community of users worldwide.
Consumer research tells us that our brand personality is different from our peers on average.
Significant majority of our users believe that bumble App is modern safe and easy to use and the brand is viewed as empowering and as a force for good. This is reflected in our results and in Q3.
Revenue generated by women and Bumble App increased at a faster rate than men on a year over year basis. In particular are people growth for women continues to outpace that for men across all three major generational segments. Gen X millennials and Gen. Z. This is truly a testament to the strength of our women first brand.
According to third party data sources humble app gained download share on a quarter over quarter basis, and all of its core markets, including U S, Canada, UK, and Australia, and the U S, which remains bumbled largest and most established market. We have continued to maintain our leadership position as the number two.
Grossing lifestyle app on the iOS platform.
As we've mentioned in the past one of the biggest priorities for Bumble App is international expansion and we were very pleased to see continued strong growth in many markets around the world.
In the past year, we've significantly expanded beyond our core English speaking markets.
In Q3, we made meaningful progress in entering new markets in Lat am we had successful launches supported by marketing campaigns in Mexico, and Brazil, which contributed nearly 100% year over year paying user growth across the Latam region.
Other newer regions such as Doc in Southeast Asia continued the growth momentum we have seen in prior quarters.
He has continued its resilience as the country slowly opened up and we also saw strength in markets, such as Indonesia, and Philippines, where we saw robust growth in users payers in revenue.
Our ability to localize the bumble app experience for many nuances is a key differentiator that enables this growth for example, this quarter, we launched language badges and localized interest batches in many of our international markets. Among users who adopted language badges. We saw an increase in matches in a higher tendency.
Have a good chat.
Exciting to see how customers in such different region have embraced bumble apps commitment to safety and women focused narrative, which further proves the bumble foundational mission is much needed and wanted around the world.
Product innovation is a core priority for us and we build and implement a range of different approaches that allow us to be market leaders in our category. This quarter, we focused on encouraging high intent dating behaviors in order to deliver greater levels of overall user success as part of this we optimize our user onboarding process.
<unk> introduced a new profile with our and made a minimum of two photos mandatory for most new users to elicit richer more detailed user profiles.
In addition to improving profile completion rates. This also enables us to increase safety on the platform with the percentage of users that are now photo verified up 31% year over year. We also introduced features to deliver more relevant potential matches and easier ways to initiate meaningful cap <unk>.
<unk> discovery by data intent, a new screen for passive matches and chat initiations from user profiles. These.
These enhancements significantly improved engagement metrics. Our goal is to build a better ecosystem experience for women. So that bumblebee comes the clear dating app of choice.
And finally, we remain focused on the future relaunch of Bumblebee our platform for Platonic relationships, we've spoken before of the affinity and trust people have for bumble, given our mission and our focus on safety, which allows us to expand into other areas of social discovery and connection V. One of <unk>.
<unk> was originally created in response to user demand and the continued adoption of this early version with MAU growth of 45% in Q3 speaks to pent up need in this space.
Our initial focus will be on building community and ensuring a differentiated user experience for friendship seekers.
On <unk>, we are building a product that will help you find one on one connection but will also help you find the broader community for sure enjoys insurance struggles. The first phase of building that has been to test multiple changes to the user experience to make it easier to discover and to use PFS. For example, we recently tested in.
<unk> flow change that increased crossover usage between modes, we signed 150% plus increase in users using more than one mode.
Further proving that bff allows us to extend the lifetime value of a date customer we plan to test with small groups in Q4, and we will start expanding the test in early 2022.
But looking even further ahead bundled PFF gives us a platform for bumble to become a leader in the web <unk> a world what <unk> is all about community and treats everyone in the community of participants two together make the community. What it is built on blockchain technology, we believe it will enable.
Our level of participation and empowerment that will make our mission come to life in the near term. This means new engagement participation and creator model, but longer term it becomes a way for our members to own their experience on bundle. This could happen through the community if they build the virtual goods and experiences they acquire or through.
New ways of owning their identity as they navigate the meta birth.
As an engineering oriented company, we are really excited by the possibilities that this opens up for us and we are actively exploring how we bring these next gen opportunities to our members beginning with BSI.
Now turning to Baidu App and other revenue, which was 58 million for Q3 down 3% year over year.
But do remains the second most downloaded dating app in the world and from an engagement standpoint is the value proposition of providing quick and authentic connections without pressure continues to deliver.
According to third party data sources on a quarter over quarter basis, but do has continued to outperform overall market download trends in many of its top markets, including the U K, Spain, Russia, and the U S but.
As we said last quarter, but do operate in a large number of markets, where the pandemic is still a significant challenge and the core Baidu user community, which is predominantly in the urban Middle class segment continues to face economic pressures from Covid. This has had an impact on user growth in these markets with differences in pace.
Our recovery by region, while many key markets, such as Russia, and Brazil have shown strong growth in both paying users and user revenue other markets like France, and Italy have lagged we.
We also see differences in performance by platform. It is important to recognize that Baidu has successfully expanded from legacy web to mobile App platform.
But over time, we've seen a secular decline in users and revenue on the desktop and mobile web platform that has accelerated during COVID-19.
For example in Q3, while <unk> revenue was up on iOS year over year revenues from mobile web and desktop were down we are managing this transition by moving our web experience from a siloed independent experienced one that's more integrated so we can better support customers, who want that combination of a native app experience.
With the occasional use of desktop or mobile web and.
In addition, we also saw a decline in paying users on Android this quarter as we've said before we currently offer third party billing options on the Android platform for part of Q3, we disabled. These third party payment mechanism, which caused some disruption to our customers and resulted in a decline in paying users. We have since re enabled these.
Non native payment platforms and are currently working closely with our partners to best optimize our payment flows. So that we can ensure minimal impact in the future.
As we prepare for many of the markets to emerge from Covid. We are actively investing to release new features and strengthened product performance. For example in Q3, we introduced Baidu clips a new short form video format for profiles, which has shown early signs of increasing retention among users who have engaged with the clip. We also improved our talk to someone.
The experience to help people more easily start conversations with their matches, which has also had a positive impact on chopped initiated.
Alongside this we've made multiple investments to drive more safety and accountability on Baidu, We've expanded our safety center and prioritize user education on blocking mechanism, resulting in the effective removal of bad actors. We also recently launched rude message detector, a new feature that checks in with a member who has received a message that could be.
Harmful or hurtful the model initiate the pop up to make sure everything is okay and encourages the member to report if not this is available in over 100 languages and will also be expanded to buckle.
Now moving back up to <unk>, Inc. I would like to highlight a couple of additional initiatives that underscore our overall company commitment to safety. During Q3, we launched a new machine learning model to reduce response times and respond to the most serious reports faster.
We are also continuing our investments in automation and AI based technology to improve proactive detection of content and behavior that violates our community guidelines.
I've said before the safety of our community is our highest priority and we continually strive to manifest that in every facet of our product and user experience and.
In closing I am very proud of our team's focus hard work and discipline and continuing to execute on our strategic priorities, including international expansion growing users and engagement.
Product innovation and building safe and accountable technology and today, its very competitive job market, particularly in tech bomb will continues to be an employer of choice because of our mission values and the strength of our team.
I'm very grateful for that and excited about what we will all accomplished together in the future and with that let me turn it to <unk> to discuss our latest financial and operational results. Thank you so much.
Thanks, Whitney and Hello, everyone. In Q3, we delivered excellent results with total revenue of $201 million and adjusted EBITDA of 54 million both exceeding the high end of our previous guidance ranges for the quarter.
Total revenue grew 24% year over year with Q3 paying users at $2 9 million up 5% year over year, and our people accelerating to $22 97 up 19% year over year.
Bumble App continues to deliver strong growth with revenue of $142 million up 39% year over year and was up 12% sequentially.
Both was driven by healthy increases in both paying users and our people.
<unk> App had over $1 5 million paying users in Q3 up 20% year over year, we continue to add paying users as we expand both in our core markets and also internationally with many of our newer launch countries in dock and lot 10, showing triple digit revenue growth.
<unk> features we launched this quarter have also enabled us to improve conversion.
One recent example of this was a UX design shifts moving our popular benign feature to the bottom of users navigation screen.
This has helped increase awareness and adoption of the feature which has left the positive improvements in payer penetration.
Bumble apps are people with $30 99.
16% year over year, and 8% sequentially with growth in nearly all regions, including in our core market.
Our people growth reflects pricing optimization and a full year benefit from two tier subscriptions.
Our work on consumables is also ongoing the launch of extended spotlight and upsell of our popular spotlight feature has been well received globally driving uplifts in our people.
Our work around pricing and monetization will continue as we work on optimizing the user experience across different geographies with the goal of maximizing revenue.
But new App and other revenue totaled 58 million down $1 7 million or 3% year over year in Q3, we saw a 9% year over year decrease in paying users to $1 3 million, which was offset by a 6% increase in our people to $13 75.
Have you heard just not from Whitney the decline in paying users primarily reflects the headwinds and some geographic and demographic markets that had been more impacted by Covid and continued erosion in desktop and mobile usage.
<unk> users, but also impacted for part of Q3 will be disabled certain payment mechanism on the Android platform.
But do our people in Q3 was up 6% year over year due to ongoing monetization improvements and a mix shift towards more longer term subscriptions in Q3.
We launched our second tier subscription product, but do premium plus late in Q3. So it only had a marginal revenue contribution in the quarter.
Early signs post launch are very promising and we plan to complete the global rollout of two tiered pricing by early Q1.
Turning now to expenses I will discuss these on an adjusted basis, excluding the impact of noncash onetime and other expenses.
Cost of revenue was $56 million in Q3 up 28% year over year, representing 28% of revenue. The increase was primarily due to higher aggregators fees from higher revenue this quarter.
Sales and marketing expenses was 52 million up 41% year over year.
This represents 26% of revenue compared to 23% last year.
Most of the increase was due to re entry marketing campaigns and new market launches for bundle as well as some performance marketing and rebranding initiatives for the group.
Please note that we had lower than normal marketing spend in Q3 of last year, given COVID-19 uncertainty and higher levels of lockdown.
G&A spend was $24 million up 35% year over year due to increased head count and public company costs.
As a percentage of revenue this was 12% up slightly from 11% last year.
Product development expenses totaled $14 million up 36% year over year. This was 7% of revenue compared to 6% last year. Most of the increase was also driven by higher head count.
Compensation expense for the quarter was $24 million compared to 9 million last year, primarily due to the modification of equity awards at IPO and head count growth.
These expenses resulted in third quarter, adjusted EBITDA of $54 million up 1% on a get over year leases.
Adjusted EBITDA margin was 27% compared to 33% last year. The difference reflects both higher cost of revenue and marketing expenses this quarter.
We reported a GAAP net loss of $11 million compared to a net loss of $23 million last year.
During the quarter. We also completed a secondary offering of $20 7 million class a common shares.
The follow on secondary offering was for the sole benefit of our majority shareholder and Bumble, Inc. Did not receive any proceeds from the transaction.
Our cash and cash equivalents totaled $292 million as of the end of the quarter.
Lastly, Tony to our Q4 outlook, we are pleased with our <unk> performance, we delivered strong results and meaningful progress on many key initiatives, we feel well positioned for the rest of the year and continuing to grow topline revenue as well as leaning into the operational leverage in our model to deliver in <unk>.
The margin is.
We are pleased to raise our full year 2021 guidance for both revenue and adjusted EBITDA.
So Q4, we expect total revenue to be in the range of $208 million to $211 million, representing a growth rate of 27% at the midpoint of the range.
We expect adjusted EBITDA to be in the range of 53 million to 55 million, which represents a margin of 26% at the midpoint.
For the full year. This translates to revenue guidance in the range of 765 to 768 million, representing a growth rate of 32% at the midpoint of the range. We expect adjusted EBITDA to be in the range of 205 million to 207 million, which represents a margin of 27% at the midpoint.
Yeah.
Thank you for your time and with that operator, we are ready to take questions.
Thank you.
And in the interest of time, and if a car to see all other analysts we ask that you. Please limit your questions to two.
To get into queue. Please press star one to remove yourself press the pound or hash key.
One moment, while we compile the Q&A roster.
Our first question is from Cory Carpenter with Jpmorgan. Your question. Please.
Thanks for the question.
My first one is just on obesity library bundle up international expansion priorities for the rest of the year and into 2022.
You see the most opportunity and where you're most focused on and then.
Secondly, totally different topic, but app store, just hoping to get your thoughts on the recent changes there and the potential impact of bumble. Thank you.
Sure I'll start Hey, Corey it's toric.
The in terms of international expansion.
For bumble.
<unk>.
We continue to be very very pleased with the results we're seeing in Western Europe as you mentioned in the prepared remarks.
The German speaking regions of Europe are continuing to grow very strongly for us we're continuing to lean in there still think theres a lot of upside there other parts of western Europe, continuing as well.
To be very strong such as France, and the Benelux.
Regions. So we're very pleased with that and we think that the value proposition for bundle is really resonating quite strongly and.
And as the ecosystem has got larger and.
And more vibrant and we're seeing really good success, both on the on the <unk> front as well as on the user front. If you look at Latin America as well.
Whitney mentioned we.
It really started in the last quarter a big.
Push into Latin America as some of the pandemic conditions have changed and again are seeing some really good results in countries like Mexico, and Brazil were really focusing on that.
The larger markets in Latin America to start with but are seeing.
Really really solid triple digit growth in those markets I'm very pleased with what we're seeing there again very different cultural context in western Europe, but continuing to see the bumble value proposition and.
And emissions and ethos it really resonates there and then.
Call out South East Asia is the third area that we're continuing to invest in both South Asia and Southeast Asia. So India continues to grow very nicely for us Indonesia, Philippines.
Singapore areas, we've been investing more and more in marketing this quarter and we're continuing to see some strength.
In those regions as well so so really broad based residents of the bumble value proposition.
Pretty much across the board in all those markets that we've talked about.
Turn it over to onno for the actual question.
Thanks, Craig.
Hey, Corey so I.
I'll just talk about.
Both Apple and Google and what we're seeing there. So obviously there is a lot that has happened in the last few months around the topic of the App store fees and we've been following it very closely.
Things are changing pretty fast and things are quite fluid. The most recent ruling of course in the epic case, especially as it relates to the anti scanning provision. We believe these are absolutely a step in the right direction as we think about what happened.
To.
Two the expedience of developers like us.
Especially given yesterday's news around the appeal, we are waiting to see how apple there.
Act the specific policy.
And the change so we cannot ascertain.
Ascertain how we will be linking to third party payment system going forward.
There's still some outstanding questions to be answered before we can definitively.
Say, what this looks like especially since that I always use that has historically never had the ability to sort of choose.
Non apple payments having.
Having said that we do have deep expertise today, and enabling non app store payment system. So once we get clarity on that front, we feel actually very good about being able to build that I'd payment experience for our users and obviously off the total amount of money that we paid to app stores today, a huge majority goes to Apple.
So we are watching what they will do a very closely.
And with respect to Android and Google.
For Apple and Google to be taking so we're tracking this closely and we look forward to providing more information in the future.
Thank you very helpful.
Thank you. Our next question comes from Lauren Schenker with Morgan Stanley. Your question. Please.
Great Hey at that anything further on for Lawrence Chin, So bumble and Baidu are people costs up really nicely in the quarter.
For Bumble are people anyway to think about kind of relative impact of the two tier subscription versus the other product improvements you've been making and then how are you thinking about higher RP too in terms of the trade off with payer acquisition. Thank you.
Sure Hany I can take that so we are very pleased with the performance Bumble are people and two tier really has been one of the main contributors to the 16% year over year, our people get on with it that you saw this quarter.
So we're really pleased with that the adoption of the higher priced tier has continued to.
To improve and the numbers that we've quoted in the past it on 70% upwards of 70% are still are holding true in all markets as well as for newer cohorts in terms of new people that are opting in.
That's actually very pleased that the adoption rates for women are higher than that of a man because this truly is a testament to our women's plus brand and also really showcases how we're able to optimize a product for a bit.
And specifically so I'm very.
Very excited about.
Those numbers are in addition to two tier.
We said before in the past we've been doing a lot of work around price elasticity and.
And we've started to see success, which has contributed to the our people improvements that you see in the third quarter and our plan is to continue to iterate on that we have a lot more work that we can do in each of our markets to ensure that we stay competitive in every market that we are in and lastly, you know as we as we think about.
Looking beyond subscriptions, we have seen success in launch of additional consumables, we talked about Ah I in my prepared remarks, I talked about the launch of extended spotlight that has already been very successful for us we expect that that will actually be our people driving.
Incremental our people driver for us in Q4 as well so we.
We have a lot more things in the pipeline as we think about additional consumables to be launched in the coming quarters. So you know more to come on that and just to take a step back I think you know from a from a.
Just a philosophy of monetization perspective, and you know sort of consistently said this in the past as well our goal is always to maximize revenue in any market and especially this is important as we continue to expand internationally because we know that the country mix can have an impact on the paying potential across Vegas regions and we also see.
Differences in People's propensity to pay for subscriptions versus consumables between different markets as well. So as we think about the puts and takes between paying users in our people, we always do that with the goal.
To maximizing revenue and you saw that play out in the third quarter, but again you know these are decisions that we make on a country by country basis at a very micro level as we enter every market and you know even at a city level. So that's an important philosophy rehab across both bumbling Purdue and <unk>.
You'll hear us talk a lot more about that in the future quarters as well.
Okay, great. Thank you.
Thank you. Our next question comes from Nick Jones with Citi.
Yeah.
Great. Thanks for taking my questions I guess.
One.
I do and bumble.
But do I guess had some payers where it is.
Hey, guys just kind of they were due to COVID-19 pressures the macro pressures how is engagement and out or for you. There's I guess in other words kind of hours payers. Then they use looking like are people still engaged but just reluctant to pay or as overall engagement even for free users decreased and then the second question I guess just to step back we're hearing more kind of conversation around.
Meta versus.
Howard Bumble position to kind of.
Pete.
Meta versus.
Kind of products and solutions start emerging thanks.
Yes.
Sure.
Let me try each of those in turn I guess on the <unk>.
On the Baidu question, we are continuing to it if I just take a step back on Baidu for a second as we mentioned in the prepared remarks, but do we continue to be very pleased with the underlying business on Baidu. We are seeing that it is.
More economically sensitive user.
And that has some.
Impact when you look at different countries, Austria went into lockdown that impacted the <unk> business, where it didn't impact the bundle business just as one example, so we are in fact seeing.
Some of those Covid headwinds, which does drive.
Activity on the App, what we are quite pleased with however is that the underlying for those users who are engaged they still love the experience.
If you look on the App stores, we generally speaking have some of the highest NPS scores in the industry on Baidu and I'm measuring that by five star reviews minus one star reviews, but it generally is an experience that people are still liking. If you look at our retention numbers inside of the App those who are engaged.
In any given period tend to be quite active and be engaged and engaging in what we think of as good chat and getting connections. So we're quite happy with the underlying business. There is just a little bit more economic sensitivity in that business, particularly in certain geographies than than there is in the bundle business, where again, we're not seeing.
Any of that economic sensitivity due to COVID-19. So so that's sort of how I would frame the baidu.
A portion of the happy to clarify any of that if it is helpful. On the meta versus piece, we're really taking a web three lens on this in particular, meaning we are.
I'm sure somebody will build a more virtual experience and we will.
Happily engage and be there when they do that with avatars et cetera, but what we really think is really interesting in the near term is the application of blockchain.
Blockchain and crypto in general to the experience at our communities have fundamentally we are not just an ecosystem, but we are a community of people that is true on bumble.
And but do what it is particularly true as we think about the kind of re imagined bumblebee FF as when you mentioned and the opportunities to really.
Gage, our members and really think of them as members who are participants in this community is really.
It is really we think really super exciting and so we're continuing to experiment. We've got a couple of tests that were very excited about that we will be rolling out in the upcoming months.
Round this but we think thats. The first total very this is something that is going to evolve we want to make sure we're setting the technical and engineering Foundation for.
For whatever emerges in and the meta versus and in the web three world.
Great. Thank you for taking my questions.
Thank you. Our next question comes from <unk> <unk> with Evercore ISI.
Okay. Thank you let me try two please can you please give a little bit more color on bff on update on product development, you typically give context in terms of 10% of users also use bff I wonder if you would.
Use bff users for conveyor conversion the other way around.
This product scale successfully and then the second question is on <unk> a lot has been talked about in the past you've talked you've also mentioned 20% of your subscribers come from performance marketing. So the impact may be limited, but to the extent that you can could you. Please talk about how meaningful of an impact it was in the quarter. Thanks.
Hi, Thanks for the question.
Let's let's take a look at the path from a high level to begin with and then we can get into the granularity, but what's so fascinating about this company brand and mission is there is a huge unlock from a Tam perspective of people, who love our brand love what we stand for.
Love the idea of finding connection relationships and community, but they don't necessarily feel ready for dating or they might already be in a happy romantic relationship. Therefore as it has existed today.
Bff has been an incredible onramp for people to engage with our brands and we see this as huge unlock opportunity in the future. So this is not only a massive opportunity to build the future of platonic relationships, which I'll speak about in a moment, but this is most certainly an on ramp into the data.
<unk>.
Side of our product as well. So quick example, you have somebody who is newly single and they are hesitant about getting back out there or joining a dating app, but they loved bumble they love our brands they engage with US up there yoga class. They were hot now they get on this relaunch version of BFS and they become comfortable.
With engaging and building relationships and connecting and now there is an on ramp opportunity to convert them not only to a dating customer but to a pain data and customer and that goes both ways. So as you see healthy churn on the dating side of our product there is now LTE opportunity.
To extend that lifetime value of that customer and bring them into the platonic side of the platform. So this really just blows open the future of our of our LTV in general as a brand as a product that the company. So let's actually talk about what is going on at the SaaS and why we're so excited about this as I said.
With some of the prepared remarks.
This is really our chance to extend our mission to achieving healthy and equitable relationships for all and all relationship.
So right now bundle as a one to one experience you joined the product and you connect with a one on one.
You have a one on one interaction.
The community approach to Bff is a huge opportunity to be able to join the product and still achieve the one to one experience, but then to also have one to many and many some money. So this really just blows open the opportunity for broader community and connection.
So in Q3, we tested multiple changes to the user experience to make it easier to discover and to use the preexisting bff product and for example, we made a navigation flow change that increased crossover you said you've between those modes and.
And we plan to test with small groups in Q4, and then really start expanding the test in early 2022. So this is this is really the beginning of blowing openness opportunity to bringing people into our product for more than just love and we're very excited about the crossover opportunity.
As far as the next question I'm going to object to.
So on the idea of a question.
I think just to remind everyone. What we have said before and it remains true this quarter that only about one fifth 20.
20% of our new user acquisition comes in through performance marketing. The remainder comes in through organic means word of mouth and some of the debt.
The result of the brand that we've built over the last many years.
As you as you dig into that performance marketing side, and we continue to be very very proud of the team.
And their ability to navigate through all of the <unk> and just changes going on in the online advertising world, we have not seen any material degradation across the board around.
Marketing efficiencies on performance marketing. This is something our team has really manage their way through very very effectively what we are seeing is some channel mix are the team is very on top of that Apple search ads are.
There's a number of other people have said.
Quite successful.
A little bit of a rush to advertise on Android and acquire people on Android. So that's what I'll do a little bit of price inflation on the Android side, but overall, we are very happy with our ability to navigate through that and our team is very focused on how do we take those lessons and use it to continue scaling the business.
Okay. Thanks, Brittany Thanks Derek.
Thank you.
Thank you our next question.
He is from Brad Erickson with RBC capital markets. Your question. Please.
Hi, Thanks.
I think there's already recovered a little bit, but just on those payments disruption can you just kind of go through what happened there in a bit more detail and then how much of the baidu.
User shortfall would you say was related to Covid persistence and some of those international markets versus the payments disruption and then I have a follow up thanks.
Sure I'm happy to take that so.
But it really is a long standing brand that has existed for many years and we've talked about this in the past we have.
Historically enabled multiple third party payment providers on our Android platform.
Within <unk> and so.
In anticipation of potential changes that may happen on the Android platform in the future for part of Q3, we decided to turn off.
Non needed payment platform, which did lead to some disruption for our users.
And as part of this we also saw a temporary loss of certain subscription plan like one day subscriptions that we offer today that was not available to our users when <unk>.
That third party payment plans off.
So as a result of this we saw some decline in paying user but what we also saw was a corresponding increase in our people as many of these payers move to highest subscription tier which is reflected in the 6% our people growth that we saw in baidu in Q3.
So.
Immediately are partly part of Q3, we turned off the third party tons that third party payments back on and we have a great relationship with all our payment partners and so we're working very closely with them to ensure that.
We can minimize.
Any future disruption in that we provide the best.
User experience from a payment perspective for our customers going forward, it's another big heart fully isolate the impact of this versus the.
The changes that are happening with the larger <unk> business.
But we are working hard.
To ensure that.
Any future disruption is fully mitigated with all the work that we're doing with our payment apartments.
Got it that's great and then maybe just a follow up there given some of those headwinds you just mentioned.
Paying users in the quarter what are your give us any sense of what your guidance, maybe contemplate trial those metrics as we look forward and I guess more specifically just any sort of line of sight towards recovering some of those subs you off thank you.
Yeah sure so.
In terms of how we're thinking about Q4 guidance actually I can I can talk about both bumble and but do if it's helpful. So on bumble, we are seeing strong engagement across our.
In core markets as well as in the newer markets that we're launching and so we expect that that will continue on a year over year basis in terms of growth in paying users potentially accelerating as well.
And similar to what we saw in Q3, we expect that a majority of this growth will be driven by international expansion. We are working on a lot of product features likely lead to conversion improvements. So we feel very.
Bullish about that and why Q4, usually has some seasonality built in we are expecting that there will be sequential improvement and pan growth.
Going into Q4, and four bundle on the people side, we expect that we will continue to see positive impacts from two tier on a year over year basis as well as some of the other pricing optimization work that I that I just discussed that we've been doing and many other market plus the work that we're doing in consumables. So we think all of that would be accretive.
As far as growth in our people is concerned move.
Moving to to Baidu.
For all the reasons that we discussed and tight mentioned earlier, we do expect that we could see some near term pressure on paying user.
As Covid persists some of the web usage.
Get fixed on our side.
But we are seeing strong growth in Iowa, So we see that as very positive as we think about.
<unk> and paying user that is factored into our Q.
Q4 guidance and we're also very excited about continuing to launch two tier on Baidu in Q4.
Which we also expect will be positive from a year over year, our people cost perspective, so all of those factors are.
Built into our outlook, we feel very confident about raising our overall outlook.
We expect full year revenue growth based on these numbers to be 32% at the midpoint. So we are excited about that.
That's great. Thanks for the answer.
Thanks, Our next question comes from Brent <unk> with Jefferies.
Great. Thanks for taking my question, it's James on for Brian It would be great. If we could get an understanding of how bumble payer growth has been trending in international markets.
Call out as being particularly strong and could you also comment on the returns that youre seeing from brand marketing campaigns that you've been running and some of your international markets. That's my first question and my second one.
Whitney I was hoping you could talk about just the importance of video chat as part of the bundle product experience are you continuing to see high levels of engagement on video posts.
The pandemic lockdown.
Are there other ways you think you can leverage video across the rest of the bumble experienced thank you so much.
I will take the second part first one yeah, absolutely hi, Thank you so much for the question. So here's probably the most fascinating discovery around video and thus far that has emerged during the pandemic is people are leveraging that to screen potential matches.
Before meeting for our date, even and reopened markets. So we are hearing increasingly that people love the idea of being able to do a quick video call and to essentially make sure the person they're talking to you on the other side is.
Actually who they say they are and thats somebody they feel comfortable meeting. So we fundamentally believe video is here to stay and that it's here to stay in a different contract than maybe what it was.
Therefore, as the pandemic emerged because it was the only option for getting right people could not go meet around the corner. They could not go out to dinner. They could not go for a walk in the park and this is now going to be leveraged to save yourself time to save yourself potential risk and to make sure that theres chemistry on the other side of the screen.
So this is just absolutely imperative the future most importantly of our brand and our mission right everything we do is with safety at the core everything we do is with our mission at the core and video is such a catalyst to achieving that and so we're very very excited about the future of video.
And not only video of one to one when you think about video more broadly right as it pertains to the current experience and even as is interwoven into web threet auto. This is such an incredible mechanism to socialize to have the opportunity to get to know people through interest or through common topics shared joy.
Struggles youll see this emerge in the future for platonic relationships as well as romantic one video is a great way to get to know each other and we are in the business of bringing people together and helping people find the people theyre seeking and looking for and we fundamentally have seen through our data and through the strong engagement that video is it.
Great mechanism for that so with that Jamie. Thanks for the question I'm going to kick it to start to talk about higher growth in international markets sure. Thanks.
So there is I guess two parts to your question, let me try and take them in turn on the payer side.
We are.
Continuing to see both monthly active user and registration growth in the international markets I mentioned before in Western Europe, and Latin America, and in Southeast Asia, and South Asia, but we're also seeing very rapid payer growth in those markets as well if you look at.
The German regions German speaking I'm, sorry regions.
As I mentioned that I mentioned earlier, we're seeing triple digit payer growth. In addition to very fast MAU growth in those regions, we're seeing very high payer growth.
In.
Southeast Asia and in Latin America, as well, so we're very happy with that I would just emphasize.
In answering that question that we are focusing on maximizing revenue as opposed to maximizing payers. So if we look at southeast Asia as an example, we.
Are probably focusing more on normalizing our price point of our people to the local market levels, which has led to an acceleration in payer growth there, whereas in Germany. As an example, we're continuing to see very robust payer growth at the price points that we're at as we launch through tiered pricing et cetera.
So it is a bit of a mosaic, but we're very happy with payer growth and again the validation of the value proposition.
Unbundle.
In terms of the brand marketing campaigns.
We.
The way that we go into any of these international markets is really trying to build the brand and the ecosystem that we've got this is this is a.
Our product on the bundle side that is really about the mission and the quality of the ecosystem and the safe experience and the and then just positive.
Positive experience you have on the App. So all of our brand marketing campaigns are localized for the countries that we're in that's not just a translation issue, but it's really thinking about what is the right way to explain the value proposition. What is the right thing to emphasize in Germany, and how might that differ in Mexico, or how might that differ and in <unk>.
Singapore, if you Google It on Youtube I think you'll see our Singaporean jingle that was created about making the first move which is.
Which is very localized with a local band and in Singapore.
Singapore and the response has been great. We're very happy with both the Influencers, but also the sort of broader market response, we're seeing.
Thank you.
Thank you our next question comes from.
John Blackledge with Cowen.
Great. Thanks.
Some of this has been touched on but just some further clarification. So on the bubble up a <unk> paying user growth.
What were the key markets that drove the user growth and perhaps were there any markets where.
That was more of a kind of a drag on user growth and then just to clarify any new I think just mentioned bumble up paying user growth could accelerate in <unk> on the heels of international expansion I just wanted to check.
If I did hear that and are there kind of any other international markets.
You recently turned on or you're turning on at <unk>.
And then just lastly, any kind of early thoughts on 'twenty two.
To frame 'twenty me too thank you.
Okay.
Sure maybe I'll.
I'll start and then I'll turn it on and for 'twenty two so in terms of the.
Payer growth, our more mature markets grow payers at a slightly lower rates than our more or less mature markets, but in general I would not say, there's any market that has been a drag on payer growth, we're seeing what we consider to be very.
Robust, both payer growth and payer penetration growth rate across pretty much all of our markets. It's at a triple digit percentage increase year over year rate and our and are more in our newer markets. As you would expect but generally speaking it's across the board phenomenon.
It would be hard to pinpoint one region, certainly not one country and it'd be hard to pinpoint one region that is contributing disproportionately to that.
So from a from a payer growth standpoint, I think that.
There were quite pleased with the breadth in terms of the newer markets. It really gets back to what I said earlier, you know we've talked about.
German regions, it's been a new reports for us in France in the Netherlands, and Belgium, et cetera that I sort of Benelux region more broadly, we're seeing very rapid growth there and we're happy to see that the kind of localization efforts that we are.
They were putting in place and the kind of local market expertise, we're bringing in those markets as continuing to pay off so we're continuing to have high investment levels.
There, we're continuing to push on Latin America, as I mentioned, Mexico, and Brazil are two bright spots, but.
If you were to look at other countries like the larger markets, Colombia, Argentina et cetera. There is theres a lot of traction that we're quite pleased with there and then in Asia. We're being very focused these are very large markets with you now.
It's easy to say Asia, but every single country is radically different and so we're really focused on southeast Asia, and particularly Indonesia, Singapore, Malaysia, South Asia with India and.
Have a have a small business, where where we're planting the seeds in north Asia, but we've been very happy with the results. We've seen this quarter in the last couple of quarters in markets like Japan. As an example, it's still very early days for us.
Maybe I'll turn it on and forgotten Yeah, Hey, so on on the question about Q4, you're right. We are from a bundle of paying user perspective.
Expecting that the year over year growth in paying gears will accelerate in Q4 versus Q3.
Again for a lot of it is in fact Tarek talked about we're feeling very positive about that the growth that we're seeing across the international markets and a lot of the work that would be doing from a product perspective is also really.
Resonating with our users and.
Contributing to the growth in paying users. So we feel very very excited about that in terms of 2022 outlook. As you can imagine we are deep in planning.
For 2022.
So we look forward to providing sort of more detailed numbers in our next call.
But.
Our priorities as we've outlined at the IPO that we have had in 2021 all of us.
So the main.
Our goal is to be bigger and better in all the markets that we had and continue to.
Focus on the launch of BFS and continue to do all the amazing work that our teams have been doing it on improving payer penetration as well as improving monetization. So.
Lots happening on Aten and we are really excited about what 2002 2022 looks like especially as we think about the momentum going into Q4 and into Q1 of next year. So we are excited about that and we look forward to giving you more information in our next quarter.
Thank you.
Thank you.
And we have time for one last question.
Question from Steve Koenig from F N B C. Nicole Please go ahead.
Yeah.
Terrific. Thanks for taking my question and I'll have one quick follow ups.
The bff relaunch and.
And the impacted.
It could have on your metrics is that more of a discrete event or more of a process and just maybe remind me of the timeframes. There I've got one follow up if you don't mind.
Sure I would say it's probably.
As you characterize it more of a process than a discrete timeframe. We are a big believer in for Tesla and expand so we will be in in a little later on in Q4 launching some pretty limited.
Market tests on the new on parts of the new experience I think those will accelerate into Q1 and early Q2 of next year and as we get the learnings that.
We want to see around product market fit youll see us expand it but we are a bigger believer and kind of rolling.
Expansion than the sort of big Bang.
Okay type of event, so thats, what youll see from us there.
Got it got it okay, great and then I'm going to kind of ask maybe a dumb question.
Nothing imagine enough here, but.
Any color you can give me on this application of blockchain and crypto on your community experience I am I'm, having a hard time imagining how it's relevant but I'm sure you've got some interesting things up your sleeve.
We think we have some interesting things up our sleeve, but I would not characterize it as a dumb question at all.
We are actively working through right now.
As you think about communities as an example, one thing that we've heard a lot from our users and particularly as we talk to more of the.
Engineering community, both inside and outside of the company is the notion of having communities that.
That just trying to think of how to say this the right way that have some level of ownership and participation coming from the people who help make those community successful raising its hard until we announce some of what bff is going to look like to sort of truly describe it but if you imagine a world in which we're helping people find each other.
Through communities a shared interest in sort of shared joys insured struggles is wouldnt you mentioned before the kind of.
The way of thinking about that as a membership organization radar as a membership construct that you are not just a an eyeball for us to monetize it for you or somebody who is helping to create create.
Create that ecosystem and get value out of that ecosystem, we think that's a really important.
Seismic shift actually in the industry and we are.
Really thinking through how do we how do we not just tap into that but enable that we think that if you come back to our mission around helping equitable relationships in women's empowerment and areas like that we think it is really an important empowerment driver.
Sure people really around the world and so I don't know if that makes it any more clear for you, but we've got a bunch of.
Experiments going on we've got a bunch of discussions going on about what this could look like but generally thats the concept of that.
Sort of decentralization of more ownership based economy.
As it relates to communities and ecosystems.
Okay, Okay, well, that's very articulate and I'm sure I'll understand it better as you move along so thanks, thanks very much.
Sure I think it is as soon as the half off really starts to take shape I think everybody will have a clearer understanding of how some of these ideas come to life, but we don't expect it to be Crystal clear right now. Thank you. So much for the question I did my best.
That's it thank you.
Thank you ladies and gentlemen, this concludes our Q&A and program for today. We thank you for your participation. Please have a great evening.
Okay.
Yes.
[music].
[music].
[music].
[music].