Q3 2024 Bumble Inc Earnings Call
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Elliot: Hello and welcome to the Bumble Third Quarter, 24 financial results conference call. My name is Elliot and I'll be here for making your calls today. If you would like to register a question in Jones State's event, please press star follow by one on your telephone keypad.
Speaker Change: I'm a handover to Cheryl Valenzuela, Vice President of MS Relations. Please go ahead.
Cheryl Valenzuela: Thank you for joining us, this guest's Bumble Third Fighter 2020 Force Financial Results. With me today, our Bumble CEO, Vidiani Jones, and PSO, and Ms. Ibermanian.
Cheryl Valenzuela: Before we begin as I join everyone, the 30 statements made on this call today are former the 60 statements.
Cheryl Valenzuela: The following was used against transletch to various risks and uncertainties, and thus left our current expectations based in our release assumptions and information currently available to us.
Cheryl Valenzuela: Although we believe expectations are reasonable, we'll undertake no obligation to revise any statements to respect shortages of occur after this call.
Cheryl Valenzuela: Subscription and Fasters and Risk that could cause action in both the different materials and the forward-looking statements are discussed in more detail in today's earnings pressivities and our periodic filing to the SEC.
Cheryl Valenzuela: During the call, we often inferred certain non-dath financial measures. To non-dath measures we should be considered in addition to a non-substitute 4 or an isolation from our gap results.
Reconciliation to the most comparable gas measures are available in our earnings, actually, which is available on the investor-vinci, got to use our website at IR.bombay.com. And with that, I'll turn it over to Vidyani.
Vidyani: Thank you, Cheryl, in good afternoon, everyone. In the third quarter, we delivered on our key financial objectives and need good progress on our strategy to deliver sustainable growth for the long term.
Cheryl Valenzuela: Total revenue and bumbleath revenue came within our Q3-hour ranges while our team stronger operational focus led to adjusted EV.43 that exceeded our outlook.
We're operating with discipline, engine rating, solid cash flow, which has enabled us to repurchase 120 million in stock since we reported in August. I know we will walk you through more details on the quarter in a moment.
Cheryl Valenzuela: In 2024, the embarked in a transformation of Bumble.
Cheryl Valenzuela: We've gone leaner as a team, we have attracted top talent to our leadership team, and to observe the organization, we're making better data-driven decisions, and we're increasing the velocity of our execution, including an engineering and product development.
Cheryl Valenzuela: He continued to execute on the Easton Formation Initiative in 23 and I'm really proud of our team and the progress that we're making
Cheryl Valenzuela: The Bhagavad Tudor Misen is on the Eternal, to achieving our goals for really imagining Bumble out.
Cheryl Valenzuela: On our last call, we shared our priorities for how we are lining Vumble app to drive our customer's success by ensuring they find great connections.
Cheryl Valenzuela: and ultimately, therefore ever matches on Bumble. To achieve this goal, we're executing on a vision to build a next generation of online to real world connection.
Cheryl Valenzuela: The plan started with two key initiatives we laid out on our last call. Strengthening the core of our ecosystem, driving innovation in customer experience, and enhancing our revenue strategy to ensure we deliver value at every step of our customer's journey.
Cheryl Valenzuela: We're off to a strong starting history. First, we have re-balanced the mix of our marketing spend to focus on organic strategies in our top tier cities around the world.
Cheryl Valenzuela: Effective Organic Marketing has always been a bumble differentiator and we're re-deniting that engine. In parallel to the organic efforts, we're optimizing growth marketing investments to higher-quality channels that better target the right kinds of user story to system.
Cheryl Valenzuela: The first test of this effort is showing encouraging user acquisition results in one of our growing European markets.
Cheryl Valenzuela: In just over a month of testing, we have seen a high single digit incremental increase in women's registration on Bumble, which has resulted in a meaningful increase in the ASLotes project. This data validates the importance of a healthier ecosystem in driving more matches.
Cheryl Valenzuela: We're expanding our testing into additional markets in Q4 and will continue to gradually expand to larger markets around the world.
Cheryl Valenzuela: Our second progress point in the quarter is in further enhancing our policies and safeguards for our customers who values and trust our platform. We're providing our customer support and trust teams with optimized products and tools to increase their response success rates.
Cheryl Valenzuela: I believe we're making a really good progress here and I'll give you a couple of examples.
Cheryl Valenzuela: We have greatly increased the precision of a rowdy machine learning model for safety issues fought by our users, driving cleanably in time down to well under one minute.
Cheryl Valenzuela: We have also achieved a double digit percent increase in the precision rate for addressing photo-moderation issues by enhancing our detection model.
Cheryl Valenzuela: Finally, I'm excited to know that we're piloting the Genetic AI based Bumble Customer Service agent to further and improve our effectiveness and accuracy in case risk causes.
Cheryl Valenzuela: All of these efforts ultimately support customer experience and satisfaction that will continue to invest to stay at the 4% of trust and safety.
Cheryl Valenzuela: Finally, you may have seen that last week we delivered a fall product update to our bumble ass being date on your term, which addresses several key customer requests.
Cheryl Valenzuela: These include athletes to our matching algorithm, which include a new AI model that better predicts matching probability in a new linking algorithm that helps customers see the mood relevant potential matches.
Cheryl Valenzuela: Other improvements included the introduction of new interest filters and expanded tools to enable richer interactions for opening lives including multiple types of opening lives and image based to move.
Cheryl Valenzuela: This would restore our commitment to customer success into operating on a regular product release cadence that continually enhance the experience and ultimately drives engagement.
Cheryl Valenzuela: Our initial results give us confidence as we execute on our bigger product vision for Bumble Day. We see those moments as a rare and powerful opportunity for Bumble to shape the future of online dating for the better.
Cheryl Valenzuela: Over the last decade, dating apps have been vital to helping customers around the world find love and connection. In that time, customer preferences and needs have evolved.
Cheryl Valenzuela: That means our category needs to change, and we determine for bumble to lead us change.
Cheryl Valenzuela: who do the Pfizer-Leverning Technology and Meabled Platform that excels at fostering online to real world connection. Helping people find love, friendship, and community in their offline lives.
Cheryl Valenzuela: As a brand of that defined the core principles of authenticity and trusting empowerment for women, we believe will be best positioned companies to serve the new generation of customers.
Cheryl Valenzuela: To deliver an audition, we have a line on an exciting roadmap and will be providing more details on our execution plans starting next quarter.
Cheryl Valenzuela: I can start today that we have planned for a more expansive winter park with EC1, so keep off on a delicious year for our product load round. The release will be focused on authentic connection.
Cheryl Valenzuela: I'm going to do several new features to enable our customers to more easily find authentic and safe connection.
Cheryl Valenzuela: including a diversification across the platform.
Cheryl Valenzuela: The ability to share my date with the trusted contacts to get feedback and gain confidence in their choices. AI powered photosilexions for easier and more authentic profile creation, and a few more surprises that will share when the release is launched.
Cheryl Valenzuela: Looking out beyond C1, we are establishing a consistent cadence for product releases.
Cheryl Valenzuela: In some secret releases, you would see a sick bigger and bolder steps towards delivering dating and connection experiences that are joyful, memorable and successful.
Cheryl Valenzuela: Building and healthier ecosystem and delivering innovative, comfortable experiences are necessary building blocks to driving renewed revenue growth and long-term profitability.
Cheryl Valenzuela: While we executed on our ecosystem work and product roadmap, we'll continue to make pricing and pay law optimizations to support conversion and revenue.
Cheryl Valenzuela: Longer term, we're focused on achieving the right balance of seeing users with reach to ecosystem, while better allowing you to subscription value with customer success.
Cheryl Valenzuela: We see significant opportunities to deliver positive incentives that entice more customers to try our paid offerings. While we're moving for Trim Points in our current paywall.
Cheryl Valenzuela: As an ACC improvements to our revenue strategy, we'll quickly communicate the value of our offerings to our customers to drive higher satisfaction in all of my time value.
Cheryl Valenzuela: We excited about our past ahead.
Cheryl Valenzuela: For a confident in our direction and our ability to execute. We also know that it will take multiple quarters to achieve our goals as we continue our ecosystem work, grow our marketing strategies, deliver product innovation, and ultimately drive revenue growth.
Cheryl Valenzuela: He's value the support of our investment community on this journey and we're committed to helping you see and measure a proper so long the way.
Cheryl Valenzuela: Now let me move to the do and our other apps.
Cheryl Valenzuela: But these brand awareness continues to improve since the relaunch earlier this year. In the revenue rearchitecture, focused on delivering clear customer values to improve fair conversion.
Cheryl Valenzuela: Disprovising important learning so we're applying to bumble-app. We're also modest who we've been balancing some of our marketing investments and we're up to mystic about the Duke's potential.
Cheryl Valenzuela: Beyond dating, we are actively working on our product to improve not for friendships and community.
Cheryl Valenzuela: I'm delighted to report that Geneva is now live and will gradually increasing awareness and adoption. Consistent with our prior state of plans to launch this fall.
Cheryl Valenzuela: Geneva, as well as the FF, are important to our overall vision of helping more people connect including non-remancipal relationships. We'll have more to share in our plans and progress as we move into the next year.
Cheryl Valenzuela: Repping us, we're finishing up 2024 highly confident in our transformation path.
Cheryl Valenzuela: 2025 is an important year, where executing diligently on our marketing customer experience and product sounds.
Cheryl Valenzuela: All of which require investment and necessarily take time to translate into revenue. This is a multi-quarter process, but one field is necessary to get right in order to position bumble for what we believe is an exciting opportunity to lead the re-invigoration of our category.
Cheryl Valenzuela: of powerful brand and what it stands for. Combined with our scale, technical infrastructure, improved cadence of execution, and a healthy financial position. Give us the robust footing on which to build the next generation of online 2 real world connection.
Cheryl Valenzuela: When I mentioned our powerful brand, it's important to emphasize that we'll never let up in living the values of fungal and remaining highly visible as a positive force for women.
Cheryl Valenzuela: We were a very proud sponsor of our new WNBH campaign, New York Liberty Disseason, and we're excited to see the marketing recently embraced women's sports.
Cheryl Valenzuela: We have also been very humble to partner with an amazing group of people in raising the profile of the important documentary, Zuradki V. Texas, which brings much needed visibility to women's healthcare. It's fundamental human rights that is critical to so many of our customers.
Cheryl Valenzuela: In recent advice, these are wide bummerly means strong in grand sentiment, relative to our peers, and are also helping to drive improved awareness in social sentiment, particularly with Gen Z women.
Cheryl Valenzuela: I'm grateful to our team for staying committed to our mission and values and for rallying around the important work we're doing.
Cheryl Valenzuela: A life-to-think-off shareholders, partners, and above all, all of our customers for the trust and support you've given Bumble. Now here's the need to cover the quarterly results.
Speaker Change: Thank you, Lidiane and good afternoon everyone. We delivered so a quarter revenue within our Outlook ranges while exceeding our expectations for a just to deep it up.
Cheryl Valenzuela: During the quarter, we executed the discipline to achieve near-term results while also working towards setting the foundation for sustainable growth and building towards the vision that Lidiane just shared.
Cheryl Valenzuela: While we still have work to do over the coming year, we are confident in our direction and encouraged by the early progress we are making.
Cheryl Valenzuela: A walk-in through our start quarter results in detail and then Shana outlook for the fourth quarter.
Cheryl Valenzuela: And let's say that otherwise all comparisons are on an year over your basis.
Cheryl Valenzuela: In Q3, total bumbley in revenue was 274 million, down 1%, including an unsavirable impact from effects of approximately 1 million.
Cheryl Valenzuela: Total Payne users grew 11% to 4.3 million, which was offset by a 10% decline in total RT-2 to $21.17.
Cheryl Valenzuela: Bumble app revenue declined 1% to 220 million with an unsavirable impact from FX of approximately 1 million.
Cheryl Valenzuela: Bumble App Hing users grew 10% to 2.9 billion.
Cheryl Valenzuela: On a sequential basis, we added 52,000 paying users. The increase in payers was offset by a 10% year overyear decline in our people to $25 in to see expense. The decline was primarily due to geographic mixed shift to international.
Cheryl Valenzuela: But you have another revenue of 63 million was 1% lower in Q3, but up slightly excluding effects impact.
Cheryl Valenzuela: Bidu and other paying users grew 14% to 1.4 million, and as Lidiane noted, we began to see the early benefits of Bidu's revenue re-architecture driving improved payer conversion.
Cheryl Valenzuela: On a sequential basis, we reported our sixth consecutive quarter of positive Bidu and other payer net ads, which came in at 65,000.
Cheryl Valenzuela: Badoo and others are people declined 6% to $12.03
Speaker Change: Thank you for watching!
Speaker Change: Turning now to expenses. Total GAAP operating costs and expenses were 1.1 billion and we reported a GAAP net loss of 849 million.
Speaker Change: The loss was mainly on account of a non-cash impairment charge of $892 million that was recorded related to our intangible assets and goodwill.
Speaker Change: The impairment was triggered by several factors, primarily as a result of a sustained decline in the company's market cap during the three months ended September 30th.
Speaker Change: On a non-GAAP basis, which excludes stock-based compensation and other non-cash or non-recurring items, total costs and expenses declined 5% to $191 million.
Speaker Change: As a result, Q3 adjusted EBITDA increased 10% to $83 million or 30% margin, up 290 basis points from the year-ago period.
Speaker Change: This reflects lower costs from the headcount restructuring program we announced earlier this year, as well as a timing benefit from several planned marketing campaigns being shifted from Q3 to Q4 to better coincide with our October product release.
Speaker Change: Cost of revenue was $79 million, or 29% of revenue, flat year-over-year.
Speaker Change: Selling and marketing expenses declined 5% to $63 million, representing 23% of revenue and down from 24% in the year-ago period, due to lower brand spend and lower headcount costs from the reductions we announced earlier this year.
Cheryl Valenzuela: G&A expenses declined 17% to $27 million, representing 10% of revenue, down from $33 million, or 12% in the year-to-go period.
Cheryl Valenzuela: The decrease was due to lower headcount costs as well as lower overheads as we continue to be disciplined about our spend.
Cheryl Valenzuela: Product development expenses for $22 million, representing 8% of revenue, flat year-over-year.
Cheryl Valenzuela: Turning now to our balance sheet. We ended Q3 with $252 million in cash and cash equivalents and we generated free cash flow of $92 million in the quarter.
Cheryl Valenzuela: Our strong balance sheet and profitability enabled us to continue to return significant amounts of cash to our shareholders this quarter.
Cheryl Valenzuela: We remain committed to our buyback program, and since the inception of our $450 million stock repurchase authorization, we have returned $361 million to shareholders, including $90 million that we repurchased in Q3 and $30 million repurchased in Q4.
Cheryl Valenzuela: Here today, through Q3, we have returned approximately 140% of our free cash flow via share repurchases.
Cheryl Valenzuela: Now moving on to our outlook. For full year 2024, we expect total revenue of $1.066 billion to $1.072 billion, representing growth of 1.6 percent at the midpoint, in line with our previous outlook.
Cheryl Valenzuela: Bumble app revenue of $861 million to $865 million, which represents growth of 2% at the midpoint, also consistent with our fire outlook.
Cheryl Valenzuela: We continue to spend with discipline and expect at least 200 basis points of expansion for our full year adjusted EBITDA margins.
Cheryl Valenzuela: For Q4, this implies total revenue between $256 million and $262 million, representing a 5% year-over-year decline at the midpoint of the range.
Cheryl Valenzuela: Bumble app revenue to be between $207 million and $211 million representing a year-over-year decline of 5% at the midpoint of the range.
Cheryl Valenzuela: And Adjusted EBITDA of between $70 million and $73 million, representing a 28% margin at the midpoint of the range.
Cheryl Valenzuela: We expect Q4 2024 Bumble app payer net ad to decline $70,000 to $80,000.
Cheryl Valenzuela: This implies full-year Bumble App Net Ads of approximately $285,000 at the midpoint in line with our prior expectations.
Speaker Change: Thank you. Thank you. Thank you.
Cheryl Valenzuela: Looking further ahead, while we are making good early progress with BumbleApp's strategic repositioning, we remain in the early innings of the work we are undertaking to strengthen our foundation, reimagine the user experience, and ultimately drive revenue aligned with the value we are delivering.
Cheryl Valenzuela: As Lidiane noted, full realization of our work will take multiple quarters. We are making thoughtful investments in marketing, people, and technology to support our roadmap and position us for long-term growth.
Cheryl Valenzuela: These investments and our ecosystem initiatives, including product releases, will take time to translate to meaningful revenue growth, and we expect to provide more details on our outlook and plans on our next earnings call.
Cheryl Valenzuela: We have strong conviction that the work we are doing will enable us to realize the powerful opportunity in front of us.
Cheryl Valenzuela: Our well-loved brand, millions of members, authentic focus on meaningful connections, and robust product vision uniquely position us to lead the reimagination of the dating app category.
Cheryl Valenzuela: While we have just begun that work, we see tremendous potential in the future that lies ahead. And our team is laser focused on delivering the experiences that will delight our customers around the world.
Cheryl Valenzuela: And with that, I'll turn it over to the operator for Q&A.
Speaker Change: Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally.
Speaker Change: First question comes from Igal Arunian with Citigroup. Your line is open, please go ahead.
Igal Arunian: Hey, good afternoon, everyone. Maybe first, understanding, you know, we're not getting 2025 guidance here, but also as we think about the progress that you guys have seen so far, which is nice to see, trying to balance that out with the comments.
Cheryl Valenzuela: around.
Cheryl Valenzuela: how it'll take time to play out multiple quarters. Just any more help in how to think about the products that are contributing, the kind of curve of the contribution and any other kind of benchmarks that we should be thinking about or looking to as we make progress here.
Speaker Change: Thank you for the question. You know, when we look at our investments, as I outlined last quarter and emphasized again this year, we're really focused on three primary areas.
Speaker Change: Strengthening Our Ecosystem. As I mentioned today, we're really excited about the early progress that we're seeing on the pest market.
Cheryl Valenzuela: That means ensuring that we have the most engaged customers across the ecosystems that we play in and we're seeing really positive signs that our investments are moving in the right direction from engagement and growth of customers.
Cheryl Valenzuela: The second is ensuring customer success.
Cheryl Valenzuela: And we're focused on success and joy.
Cheryl Valenzuela: from customer support, to safety, to innovative experiences on our product.
Cheryl Valenzuela: So the fall roadmap is very anchored, fall release that we just launched last week, very anchored on customer success.
Cheryl Valenzuela: Our winter release is going to take even bolder steps.
Cheryl Valenzuela: at Innovating. And aligned to that is the third major initiative, which is really reimagining and evolving our revenue strategy to ensure across every one of our subscription tiers, we're offering value to our customers and that they feel really good about the value that they're getting across each one of them. So we're looking at all of that. We're really optimistic from the progress that we've seen in Q1. We're expanding the markets that we're doing this marketing balance and customer acquisition balance.
Cheryl Valenzuela: And we will be providing more in the quarters ahead, but definitely confident that we're in the right track.
Speaker Change: Thanks, and just a follow-up on
Speaker Change: maybe this is more for Anu, but on the buybacks at 140% of free cash flow this year, you've set that up, it looks like that's continued here in the early part of 4Q, balancing with margin expansion and the investments that you think are needed to kind of move the product in the right direction, just philosophically how you're thinking.
Cheryl Valenzuela: about that. Thank you.
Speaker Change: Yeah, sure. Happy to go.
Speaker Change: So I think if you think about our capital allocation philosophy, as we've always said,
Cheryl Valenzuela: you know
Cheryl Valenzuela: We think about it in sort of three broad buckets. The first one is around investing in our organic growth and making sure that we're continuing to invest for the revenue growth that we know we have ahead of us.
Cheryl Valenzuela: The second one is around M&A. We've said in the past that we continue to be opportunistic from an M&A perspective.
Cheryl Valenzuela: focus on that as a company and then we obviously have our buyback program which we will continue to be opportunistic about.
Speaker Change: Thank you for watching!
Speaker Change: Thank you.
Speaker Change: We now turn to Shweta Kachuria with Wolf Research. Your line is open, please go ahead.
Shweta Kachuria: Okay, thank you for taking my questions. Let me try two, please.
Shweta Kachuria: First is on Ecosystem Health, Lidiane.
Speaker Change: Of the three things you talked about, the first one is ecosystem health. It includes profile creation and maybe a shift in marketing strategy, and you've addressed both of these.
Cheryl Valenzuela: So, I guess my question is, could you please provide specific examples of other actions that you have taken in the quarter and or plan to take in the near term that focuses on rebalancing the health of the black folk that you think will be most impactful?
Cheryl Valenzuela: That's question one. And the next question is on customer experience. How should we think about the headwind on top of the funnel from your safety initiative? And is it fair to say that you started that initiative mainly in the third quarter this year, so you'll comp that next year post Q2? Thanks a ton.
Cheryl Valenzuela: Thank you. Thank you.
Speaker Change: Yeah, thank you. And the first part of your question...
Cheryl Valenzuela: have definitely a marketing rebalance for us to ensure that we're acquiring the right types of users.
Cheryl Valenzuela: and that has been really positive. In addition to that rebalance...
Cheryl Valenzuela: One of the key efforts I mentioned in my prepared remarks
Cheryl Valenzuela: is about strengthening organic marketing, especially in our mature markets, which has also shown really positive signs.
Cheryl Valenzuela: The other effort here for us when we think about healthy ecosystem is related to product innovation. We are embarking on this new model of a regular product cadence so that we operationally are constantly innovating for our customers.
Cheryl Valenzuela: So what you're seeing from our fall release to winter, and you'll see more into 2025, is a regular cadence of innovation. What that does is ensuring that we're also attracting and retaining great customers that are going to have great experiences and success within our portfolio of apps. So we're really excited about ecosystem. It's about certainly acquiring, but also retaining our customers. So you are going to see a lot of that from us in the quarters ahead.
Cheryl Valenzuela: When we think about...
Cheryl Valenzuela: customer experience and safety. There are many things here related to safety that we look at and it's not just
Cheryl Valenzuela: You shouldn't think of safety just as a headwind. It's also an important attractor for a lot of our customers. So there's a few key things. Earlier this year, we have already started to improve our modeling to ensure that we are, for photo modulation, for example, as you saw in my prepared remarks,
Cheryl Valenzuela: ensured that
Cheryl Valenzuela: Good customers that are interested in being in our ecosystem are not unfairly blocked. So that is actually welcoming more customers into our ecosystem.
Cheryl Valenzuela: and myself.
Cheryl Valenzuela: Safety capabilities are both about keeping customers safe, attracting the right customers, and retaining an attention to ensuring that we don't have users that we don't want in the ecosystem.
Cheryl Valenzuela: So, all in all, we are optimistic about those as positive investments for user growth.
Speaker Change: Thank you, Lidiane.
Lidiane: Thank you.
Speaker Change: Our next question comes from Eric Sheridan with Goldman Sachs. Your line is open, please go ahead.
Eric Sheridan: Thanks so much for taking the question. Just one if I could, just sticking on the theme of the potential and the revenue and the user side for Bidu over the longer term, what continue to be key learnings about that as an asset in your portfolio and how it informs key priorities for that part of the business looking out of the medium to long term? Thanks so much.
Speaker Change: Thank you, Eric.
Speaker Change: This year, we took a very customer-centric approach to Badoo because Badoo does serve a customer base that's complementary to our Bumble customer base.
Speaker Change: And with the changes that we made on the product, we did a grand relaunch.
Speaker Change: We're rebalancing, modestly rebalancing, our brand and growth marketing to bid you. And what we're seeing is that we're seeing a positive engagement in the customer base.
Speaker Change: as well as
Speaker Change: benefits and RPP from customers getting the right value from our revenue re-architecture. So we're optimistic about Bardoo. I think Bardoo in the right investments with the right placement within our portfolio can have a greater potential in the medium to longer term. So definitely optimistic about the role Bardoo can play for us.
Speaker Change: and many more. Thank you. Thank you.
Speaker Change: We now turn to Nathan Feather with Morgan Stanley. Your line is open, please go ahead.
Nathan Feather: Hey everyone, thanks for taking the question. Two on my end.
Nathan Feather: First, are you seeing any green shoots with Gen Z, either from the product or marketing changes you've made so far, or any difference whether it's in, you know, engagement with the platform?
Nathan Feather: signups, etc. And then second, thinking about elections in the past, did you see any impact on engagement either before or after? And how do you think about that when guiding to 4Q? Thank you.
Speaker Change: Thank you, Nathan. In terms of...
Speaker Change: engagement, positive engagement. This Q3 has been a really positive one for us from a marketing perspective. With our shift
Speaker Change: towards
Speaker Change: Reigniting Organic Marketing for Bumble which has
Speaker Change: always been part of our DNA, has always been a differentiator. That has been an incredibly positive set of outcomes for us from our Gen Z women in the top cities that we've activated that sort of balanced strategy. We have seen positive gains in NPS. We've seen positive gains in fellowship in our social channels, as well as positive sentiment. So all in all, our marketing rebalances is yielding positive results for us in targeting and gaining more support from Gen Z women.
Speaker Change: We are also... Thank you. Thank you.
Speaker Change: spending a lot of time with younger users to understand their needs in this category and why we feel excited about the role that Bumble can play in truly reimagining the category. There's a lot of really great insight about what our customers want.
Speaker Change: So, from a product future perspective, a lot of our customers' voice is being incorporated into that, certainly a lot of Gen Z women's voice. So, truly excited to be working with so many great customers.
Speaker Change: In terms of
Speaker Change: the election, while historically we haven't seen significant shifts in our customer base and business
Nathan Feather: But what we do expect at this moment in time is that our mission and what we have seen from our customers, our mission, our values have remained incredibly critical for customers not only over the last decade, but we definitely believe it is critical now that we stay strong in supporting women and women's experience.
Nathan Feather: So that's going to be a key part of how we support customers and their needs.
Speaker Change: And Nathan, you know, in terms of impact to the way we thought about Q4, you know, we don't really think that, you know, there's been a big impact in terms of what we've seen leading up to the election. So we are guiding to a revenue outlook that is largely consistent with what we guided to in our Q2 earnings. So not much to report on that.
Nathan Feather: Great, thank you.
Nathan Feather: Thank you.
Speaker Change: Our next question comes from Benjamin Black with Deutsche Bank. Your line is open, please go ahead.
Benjamin Black: Great, thank you for taking the questions. So, you know, in the past, you've obviously spoken about the free experience and how you think that may need to evolve in an effort to help the ecosystems. I'm curious.
Nathan Feather: you know, how do you expect the free experience to change over the next coming quarters, if not years? And then maybe as we think ahead to 2025, understood that we're not getting any guidance,
Nathan Feather: But, you know, if you think about the product release plans toward the end of the year, generally speaking, you know, how should we think about the competition of growth, you know, sort of between, you know, payers and our people as we head into the new year? Thank you.
Speaker Change: You know, we recognize that this is a really important moment for the company to get right. And a key part of our revenue evolution is ensuring that we're getting the fundamentals right for our customers and their experience.
Nathan Feather: So we are taking a step back and looking at the entire journey from top of funnel all the way to the most optimized subscription tier that we have, which is Premium Plus. And so of course in that journey comes the free experience.
Nathan Feather: We really believe that a great free experience
Nathan Feather: for all of our customers should also be one that helps people see the value of Bumble right from the get-go and that will positively entice them to want to pay to get greater value. So in that regard, we see greater opportunities in the near term to increase our conversion rate from free to pay with some of the initiatives that we're going to drive in the next few quarters. So we're quite bullish and excited about that.
Nathan Feather: Secondly, is that as we are innovating our product rhythm and the cadence and the regularity and the velocity of our innovation, I think a big part of what I've been talking about in this last couple of earnings has been the company transformation that we're undergoing. It's really ensuring that we're innovating at a fast pace, that we are attracting the best talent in the industry, and that's going to really help us bring a greater degree of innovation that will increase the value creation for higher tiers.
Nathan Feather: So, really a lot of excitement for us in terms of the value of our subscription tiers and the re-architecture of our value balancing for our customers. But I'll pass it on to Anuradha to talk a little bit more about the second part of your question.
Speaker Change: Hey, Ben. So as you can imagine, we are, you know, deep in the middle of planning for next year.
Anuradha: And this encompasses the work that we are doing around the three pillars that Lidiane talked about, which is customer experience, ecosystem work, as well as reimagining of the revenue and subscription experiences. And this will impact how we think about our key KPIs in terms of
Nathan Feather: user growth, payer growth, revenue growth, et cetera.
Nathan Feather: And, you know, we've talked today a little bit about some of the tests that we are running and the early results that we're seeing from all of these, which have been quite encouraging. You know, I think it's a little bit early to talk about specific puts and takes around how this translates into some of the metrics that we look at, but, you know, we look forward to providing more details on our next earnings call for sure.
Nathan Feather: Thank you for watching.
Speaker Change: Great. Thank you very much.
Speaker Change: Our next question comes from Robert Caldreth with Evercore ISI. Your line is open, please go ahead.
Robert Caldreth: Great. Good afternoon. Thank you for taking our questions. I wanted to ask if you could go back to the marketing tests that you've done in Europe and the related uplift or improvements in ecosystem balance that you're driving there. Anything more you could tell us about the changes in channel mix or messaging and the plan to expand that strategy? And then also, I understand that you're more focused on organic in the more established markets, but just wondering if there are any learnings from the targeted marketing.
Robert Caldreth: that you can apply to some of the more established, more mature markets to maybe accelerate the drive toward ecosystem health and demographic balance. Thank you.
Speaker Change: Thank you for watching!
Speaker Change: Yeah, Robert, great question. So for
Robert Caldreth: Emerging markets, there is both a balance of brand expansion and awareness, as well as a very tailored marketing channel mix.
Speaker Change: And so, one of the greatest things that I am excited about in Q3 is how rapidly we're assuring our marketing insights and operations to allow us to...
Speaker Change: that effectively. And what we have seen is, in this particular market, we have balanced for a greater investment on acquiring the right users for a particular demographic, especially women in this case.
Speaker Change: And we were very effective at that acquisition, you know, with the right ROI.
Speaker Change: So, that's very positive, you know, in such a short amount of time. For more mature markets, what we have done, as you noted, is balancing with organic because the brand awareness is already there.
Robert Caldreth: And it's really about delivering a set of broader experiences for our users.
Robert Caldreth: New York is a great example of a market that we put a lot of effort and saw really positive results.
Robert Caldreth: in a single quarter. And the great thing about holding an organic event in New York, like sponsoring the WNBA and having events where our customers can be a really big part of that.
Robert Caldreth: is that it also amplifies digitally through our social channels, through customers that are telling their own stories. So there is a positive scaling of that as well that we are excited about. So the key message here is that we are being very thoughtful and deliberate about our marketing strategies based on our presence as well as the brand awareness of the markets that we are in. The exciting thing from my perspective is from an international expansion, Momo is a fairly young company, still in many markets. And so we have a great opportunity to drive international expansion and growth over the quarters ahead.
Speaker Change: Great, thank you.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: As another reminder, if you'd like to ask a question, please press star 1 on your telephone keypad now.
Speaker Change: We now turn to Laura Champagne with Loop Capital. Your line is open, please go ahead.
Laura Champagne: Thanks for taking my question. If I work through your outlook there's certainly a scenario for sequentially lower margins in Q4. Would that come from higher advertising spend or is there something else there that I might be missing?
Speaker Change: Thank you for watching!
Speaker Change: Yeah. Hey, Laura. So if you look at our full year EBITDA margin outlook,
Speaker Change: we've maintained.
Speaker Change: what we had said previously, which is to expand our margin by at least 200 basis points. So there's no change to our full year outlook.
Speaker Change: In Q3, we came in ahead of where we had expected to be from a margin perspective and it was primarily because we shifted some marketing spend.
Speaker Change: from Q3 to Q4 to sort of better coincide with the fall release that we just had in October. So that's why you see Q4 margin being lower. And as you said, it will be because of higher marketing spend. But in aggregate, our plans in terms of what we intend to do for the full year has not changed. It's just a shift in spend between Q3 and Q4.
Speaker Change: Ladies and gentlemen, we have no further questions. So this concludes our Q&A and today's Bumble third quarter 2024 financial results conference call. We'd like to thank you for your participation. You may now disconnect your lines.