Q4 2024 Bumble Inc Earnings Call
Thank you for standing by the Bumble fourth quarter Trench Trench core earnings conference call will begin shortly.
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[music].
Speaker Change: Hello, and welcome to the Bumble fourth quarter 2024 earnings Conference call.
Elliot: My name is Elliot and I'll be coordinating your cold stacked.
Speaker Change: If you would like to register your question James Thanks events. Please press star one on your telephone keypad.
Will: I would now like to hand over to will to various Investor Relations. Please go ahead.
Thank you for joining us to discuss bundles fourth quarter 2024 financial results with me today are bumble CEO with Jani Jones Executive Chair, Whitney Wilford and CFO, a new Superman.
Will: Before we begin I'd like to remind everyone that certain statements made on this call today are forward looking statements.
These forward looking statements are subject to various risks and uncertainties and reflect our current expectations based on our beliefs assumptions and information currently available to us.
Will: Although we believe these expectations are reasonable we undertake no obligation to revise any statement to reflect changes that occur. After this call description.
Will: A description of factors and risks that could cause actual results to differ materially from these forward looking statements are discussed in more detail in today's earnings press release, and our periodic filings with the SEC.
Will: Descriptions of factors and risks that could cause actual results to differ materially from these forward looking statements are discussed in more detail in today's earnings press release, and our periodic filings with the SEC.
Will: During the call. We also refer to certain non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results.
Will: Reconciliations to the most comparable GAAP measures are available in our earnings press release, which is available on the Investor Relations section of our website at IR Dot Bumble dotcom.
Speaker Change: With that I will turn the call over to <unk>.
Speaker Change: Thank you al and good afternoon, everyone today I'll share a recap of the year and offer some detail on bundled momentum entering 2025.
Speaker Change: We also have Whitney with that share her thoughts on the path ahead. Upon her official return in a few weeks.
Speaker Change: Now turning to the fourth quarter our.
Speaker Change: Our results were broadly consistent with our outlook.
Speaker Change: Revenue and adjusted EBITDA came in at the high end of their respective ranges and.
Speaker Change: And bumble App revenue outperformed our guidance.
Speaker Change: The modest decline in Bumble App net adds for Q4 also came in slightly ahead of our expectations.
Speaker Change: Continue to operate with strong financial discipline, allowing us to generate free cash flow of $114 million for the year.
Speaker Change: Most importantly, we achieved solid progress on our product roadmap.
Speaker Change: Leaner more agile team.
Speaker Change: Come a long way over the last 12 months 2024 was an important year in rebuilding bundled foundation, which repairs the company to boldly re imagine the future of online dating is.
Speaker Change: We've reshaped our workforce and put in place a high performance culture.
Speaker Change: Aligned around a clear plan for moving Bumble App forward for the next generation of consumers seeking fresh experiences and new ways to find loving connection.
Speaker Change: That plan is guided by the three pillars, we have shared with you.
Speaker Change: Strengthening our ecosystem driving innovation in our customer experiences and enhancing our revenue strategy.
Speaker Change: When we talk about healthy ecosystem, we're talking about creating a safe and relevant platform for customers, who want to find great matches.
Speaker Change: <unk> focus and ecosystem health in a few key ways.
Speaker Change: One is continuing the effort of removing unhealthy and bad actor accounts is critical to providing a safe and quality experience for our customers.
Speaker Change: A second being more intentional about the users we attract to our platform.
Speaker Change: <unk> increased our focus on organic marketing strategies drive more of our targeted customers into bundle up.
Speaker Change: Began testing on this initiative in the fall and have been rolling it out more broadly into the new year with continued success.
Speaker Change: We are very encouraged with the progress, but it's important to emphasize that our ecosystem health initiatives will continue to create headwinds to paying users growth in the coming quarters.
Speaker Change: As we continue to execute on these pillars. We're also making good progress on our product roadmap, which is set to deliver increasingly bold innovations for our customers.
Speaker Change: Last quarter, we talked about our fall release, which focused on dating on your terms.
Speaker Change: The release delivered significant updates to our matching algorithm leveraging the power of AI.
Speaker Change: And new interest filters and powerful tools to enrich opening interactions.
Speaker Change: Since its launch you have seen notable improvements in user adoption.
Speaker Change: Interest filters have quickly become one of our most popular filters and opening moves are now being used by approximately half of our members.
Speaker Change: Our upcoming winter release slated for mid March will focus on confidence safety engagement and discovery.
Speaker Change: Introducing a brand new discover tab to deliver a more curated and updated matching experience based on shared interests.
Speaker Change: Also introducing a new AI assisted photo pick her improved confidence among our members, making it easier to create a profile that truly stands out.
Speaker Change: To advance our leadership in trust and safety, especially for women, we're introducing I D var vacation share might be and we view before send all features aimed at safe and healthy connections on our platform.
Speaker Change: And to provide more flexibility to our members you will launch instant March which allows members to share their profiles with one another in real life.
Speaker Change: Importantly, many of these features are free to our customers and our primary goal is to improve engagement and generate increased yes vote rates our metrics fundamental to our customer success.
Speaker Change: This in turn drives positive word of mouth, and ultimately new users to bumble.
Speaker Change: We have undertaken a rigorous approach to the launch and our testing of all of these features have shown promising results.
Speaker Change: The team is poised to ramp innovation this year that will align with the key customer needs. The work. We're undertaking will take some time to react tolerate growth and bumble Apple paying users and revenue, but we're confident that all of these improvements will put bumble on a path to renewed strength in the years ahead.
Speaker Change: As we prioritize the execution of the important work, we're undertaking to reposition bubble up you have taken a hard look at how we're allocating our resources across our portfolio.
Speaker Change: And after careful consideration, we have decided to sunset fruits and official.
Speaker Change: These are difficult decisions, but we are confident that honing our collective focus and attention on our core business. The prudent thing to do at this time.
Speaker Change: With our strong foundation talented team and focus on execution I'll be returning the reins Bumbles founder Whitney will hurt next month.
Speaker Change: Whitney is a true visionary and it'll be exciting to watch her bring her energy and passion to build on what the bumble team has put in place.
Speaker Change: This change is catalyzing, a pivotal moment for bumble.
Speaker Change: Online dating has enormous potential and bundles iconic brands is the one to move the category in the next generation.
Speaker Change: I'll continue to partner with Whitney through the coming months to make sure that we're not missing a beat since we have so much to do and deliver on.
Speaker Change: Wrapping up I want to acknowledge the extraordinary progress the team has made over the past year in service of bundles mission.
Speaker Change: I have every confidence in this team's ability to deliver exceptional results for our members.
Speaker Change: And honor to lead bumble through this period of transformation and I'm tremendously proud of the important work, we accomplished as a team over the past year.
I'll be cheering team bumble on and I'm confident that the company is poised to capture the opportunity ahead now.
Speaker Change: Now I'll turn it over to Whitney to share more about what's in store.
Whitney Hurt: Thank you, Larry Ani and Hello, everyone first I want to recognize liddy Ani for her leadership over the past year and strengthening bundled foundation.
Speaker Change: <unk> reshaped our workforce rebuilt legacy systems, and then still strong operational efficiency into the business all critical building blocks that set us up for a bright future I'm grateful for her contributions. Thank you Mehdi Army.
Speaker Change: I'm deeply honored to be back and I'm ready to lead with fresh energy and a renewed sense of purpose I have never been more confident in what the head for bumble and in my vision for what we can achieve together in the future Bunzl is a much more mature company today with a dedicated lean and talented team.
Speaker Change: We have a lot of work to do but we are up to the challenge.
Speaker Change: As we execute this transition my focus is on the following key things.
Speaker Change: The deep love and understanding for our product that only a founder can bring re inspiring the unique magic at the Bumble brand and operating with purpose efficiency and excellence across the entire company with a particular focus on technology.
Speaker Change: Look forward to sharing more about our plans after I'm fully back into the roll.
Speaker Change: Over the past year I have worked at a high level with Lydia on me and the team and we are all aligned around where bumblebee. It's going our goal is simple to make people fall back in love with the process of finding love.
Speaker Change: Our early work is rooted in a precise understanding of what our members want and what this category needs.
Speaker Change: More to come.
Speaker Change: Before I hand, it over to a new I want to acknowledge her incredible impact over the past four and a half years.
Speaker Change: Do you have played a key role in taking bumble public driving international expansion and strengthening our financial position under her leadership, we achieved our first $1 billion revenue year, giving us the foundation to capture the opportunities ahead.
Speaker Change: And finally to our investors and our team. Thank you.
Speaker Change: It's not always easy, but the team's commitment to each other our mission and the millions who rely on US has never wavered together, we are shaping the future of love Amnesty category.
Speaker Change: We have the team the plan.
Speaker Change: And the renewed energy to make it happen.
Speaker Change: Thank you Whitney and good afternoon, everyone.
Speaker Change: Walk through our fourth quarter and full year results and then share more details around our outlook.
Speaker Change: Unless stated otherwise all comparisons are on a year over year basis.
Speaker Change: In Q4 total bumble ink revenue was $262 million coming in at the high end of our outlook.
Speaker Change: Total revenue included an unfavorable impact from FX of approximately $3 million.
Speaker Change: Total paying users grew 5% in the quarter to $4 2 million and our people declined 9% to $20 58 per cent.
Speaker Change: Revenue was $212 million above the high end of our outlook and down 4% on a year over year basis.
Speaker Change: <unk> was impacted by unfavorable FX of approximately 2 million, which negatively impacted growth by one percentage point.
Speaker Change: Our paying users grew 5% year over year to $2 8 million and the increase in payers was offset by an 8% decline in our people to $25 17.
Speaker Change: Primarily driven by geographic mix shift.
Speaker Change: Pairs declined 57000 on a sequential basis.
Speaker Change: But don't happen other revenue was $49 million, representing a decline of 7%.
Speaker Change: FX was a 1 million headwind during the quarter and negatively impacted growth by two percentage points.
Speaker Change: But do App and other paying users grew 7% to $1 4 million, but declined 20000 sequentially.
Speaker Change: What happened to other our people declined 12% $11 and 13.
Speaker Change: Turning now to expenses.
Speaker Change: Q4, GAAP operating costs and expenses were 225 million on a non-GAAP basis, which exclude stock based compensation and other noncash or nonrecurring items total costs and expenses declined 5% to 189 million.
Speaker Change: Year over year decline was primarily driven by lower head count as a result of the restructuring plan, we announced in February 2024.
Speaker Change: Cost of revenue was 78 million and declined 2% as a percentage of revenue cost of revenue was 30% versus 29% in the year ago period.
Speaker Change: Sales and marketing expenses declined 7% to $65 million.
Speaker Change: This represents 25% of revenue versus 26% last year.
Speaker Change: G&A expenses were $27 million or 10% of revenue compared to $30 million or 11% of revenue last year.
Speaker Change: Product development expenses were $20 million or 7% of revenue versus 21 million or 8% of revenue in the year ago period.
Adjusted EBITDA for Q4 was $73 million at the high end up by the outlook, representing 28% margin.
Speaker Change: For full year 2024, total bumbling revenue increased 2% to 1.072 billion in line with the high end of our outlook.
Speaker Change: Revenue from Bumble, App increased 3% to $866 million and we grew paying users by 290000.
Speaker Change: Adjusted EBITDA was $304 million, representing 28% margin up 220 basis points.
Speaker Change: We reported strong free cash flow of $114 million in 2024, and we ended the year with 204 million in cash and cash equivalents.
During the fourth quarter, we repurchased $40 million worth of shares under our current stock repurchase authorization.
Speaker Change: Aggregate for 2024, we repurchased $214 million worth of shares.
Speaker Change: At the end of 2024, we had $79 million left in our buyback program and as of today's call, we have $65 million remaining.
Speaker Change: Now moving on to our outlook.
Speaker Change: As we looked at the year ahead. The company has an exciting product roadmap planned.
Speaker Change: Combined with our ecosystem and marketing effort, we believe that innovation is the key to attracting more users increasing engagement and serving as the foundation for our monetization effort.
Speaker Change: However, as Leon and Whitney have shared we are still in the early stages of our work.
Speaker Change: For example, the ecosystem work, we highlighted what would result in paying user declines near term as we focus on optimizing for the type of users we want on the platform and our product roadmap will take time to execute.
Speaker Change: Therefore, we are moving to providing guidance on a quarterly basis, and we will provide updates on our product releases and marketing efforts throughout the year.
Speaker Change: For Q1, 2025, we expect total bumbling revenue between $242 million and 248 million, representing a decrease of 7% to 10%.
Speaker Change: Excluding FX this translates to a decrease between four and 7%.
Speaker Change: We expect bumble app revenue to be between $198 million and 202 million, representing a decrease between six and 8%.
Speaker Change: Excluding FX headwinds and the loss of one day due to leap year in 2024. This translates to a decrease between three and 5%.
Q1 revenue outlook assumes a sequential decline in paying users.
Speaker Change: The range of 100 to 120000, as we prioritize our ongoing work to strengthen our ecosystem.
Speaker Change: While we continue to operate with discipline to deliver solid cash flow the expected deleverage impact of lower revenue and our investments in product and technology will result in margin contraction in Q1.
Speaker Change: We estimate adjusted EBITDA will be between 60 million and $63 million, representing a margin of 25% at the midpoint of the range.
Speaker Change: While we are not providing specific guidance for full year 2025, I wanted to provide some high level context on our planning assumptions for the year.
Speaker Change: For the year, we expect unfavorable FX headwinds of approximately two percentage points.
Speaker Change: For Bumble App B building product momentum through the execution of our road map will take at least a few quarters.
Speaker Change: The work we are doing is designed to improve top of funnel and engagement metrics, but conversion to follow as our product initiatives and the re architecture of our monetization model begins to deliver improvement as.
Speaker Change: As Randy noted, we have made the strategic decision to discontinue fruits and official.
Speaker Change: We expect the closure of these apps to result in an approximately $12 million revenue headwind for the year.
Speaker Change: We expect adjusted EBITDA margins for the year the contract as we navigate revenue headwinds and invest in product and technology to re ignite usage and engagement.
Speaker Change: We remain confident that we will return to expanding margins as revenue growth resumes.
Speaker Change: As always and especially in this year of rebuilding we plan to operate with financial discipline to ensure healthy cash flows.
Speaker Change: In closing while we're.
Speaker Change: The past year Bumble has established a strong foundation to build upon in the years ahead.
Speaker Change: We have set a bold product strategy accelerated innovation and honed operations and execution.
Our commitment to our three strategic pillars, strengthening our ecosystem driving innovation and customer experience and enhancing our revenue strategy, but not only advance our mission of empowering individuals to build healthy and equitable relationship, but also help us to deliver profitable long term growth for our shareholders.
Speaker Change: And finally as I wrap up my time at Bumble I wanted to say that it has been an absolute honor to serve our team our members and our shareholders over these past four and a half years.
Speaker Change: I'm grateful for the partnership with Whitney and Lydie, Ani and I'm very confident in the bright and exciting future that Whitney and the team have plan for bumble.
Speaker Change: And with that I'll turn it over to the operator for Q&A.
Speaker Change: Thank you.
Speaker Change: I'd like to ask a question. Please press star followed by one on your telephone keypad.
Speaker Change: If you would like to withdraw your question. Please press star followed by <unk>.
Speaker Change: When preparing to ask a question. Please ensure device on mute locally.
Speaker Change: First question comes from Eric Sheridan with Goldman Sachs. Your line is open. Please go ahead.
Speaker Change: Thank you so much for taking the question maybe two if I could.
Speaker Change: Would love to get your perspective as you return to the company in an operating role as CEO. What your take is on the broader online dating industry landscape as we get deeper into 2025, how do you see some of the opportunities and challenges facing the industry more broadly and then maybe a backward looking question but.
Speaker Change: <unk> put in place some of the measures as a management team to address lower quality or bad actors in terms of profile of user growth. What are some of the key learnings you've had over the last couple of months and how does this inform some of the continuation of those strategic priorities looking deeper into 2025. Thanks so much.
Speaker Change: Thank you. So much this is Whitney I will take your first question great to be back with all of you. So you know when we look at industry trends I think it's really important to reinforce that the demand for love right now is stronger than it arguably.
Speaker Change: Has ever been in modern times.
Speaker Change: People need to meet each other people want to meet each other we are a society that needs relationships, we need connection we need love what has happened in my opinion and just for those of you that are not familiar with me I've been on the frontline of scaling up since 2012. This has been my entire.
Speaker Change: Your life I've lived breeze, and essentially been so stick in this since I was 22 years old are now 35. So this is my whole adult life people want loved they need loves they want to use technology to find love because it's easier and it's more efficient and it helps them bypass being at the right place at the right time.
Speaker Change: But what my opinion is is that while we have been leaning on algorithms and product to find love.
Speaker Change: We may be Havent pause to really say what are these products is doing to people how are they making them feel dating was meant to be a fun and viral and easy way to connect and as time has gone on that low friction environment has led to people feeling judged feeling and secure feeling <unk>.
Whitney Hurt: And when I started bumble a big part of our success was that it was about removing rejection instilling confidence, but we are in a new dawn, we need to make sure that that is being you.
Whitney Hurt: Initiated in every touch point of our products. So this is exactly what we're focused on is bringing confidence curiosity joy back to this experience while enhancing the what we said earlier in the script the building blocks of the way. This technology works. So this is everything we are focused on.
Whitney Hurt: Right now, which is making sure that the entire experience delivers you. The most relevant market people that you want to meet people that you don't just want a swipe right on but you will actually end up meeting in real life, you'll have a great date, we want you to have the safest most trusted experience possible and we really do believe that the future of dating.
Whitney Hurt: It's about helping people fall back in love with falling in Love again, and that's why I'm back that's exactly what we're going to be focused on in this next chapter and lithium he has already done exceptional groundwork here by reinforcing and rebuilding a lot of the underlying talking systems I will now turn the second question to linearity.
Whitney Hurt: Thank you Whitney and Eric Chu.
Speaker Change: So size the point when he made earlier, we have been partnering really closely together this past year and one of the points that we've been always extremely aligned on is the importance of making sure that bumble is incredibly safe and a trustworthy platform for all of our members. So a big part of our Investor.
Speaker Change: Since this past year has been strengthening our security.
Speaker Change: Our safety guidelines, our policies and our technology.
Speaker Change: To ensure that we are providing a really clean and powerful environment for our users as.
Speaker Change: As we look forward, it's the investment that we want to continue to to put a lot of energy on it I'll say to you the release coming out now in March the winter release has a lot of capabilities and features that are geared towards continuing to make sure Bumble is a leader in trust and safety for our customers.
Speaker Change: Including rolling out I'd verification ruling out share My Beach I gives users more confidence of their location to trusted.
Speaker Change: Sources, along with review before Sun, but that's really about ensuring customers understand our policies about what it means to be a safe member of our platform. So we're extremely bullish about continuing to invest in our trust and safety and I'm excited to pass the baton to to Whitney as she takes on the team.
Our next question comes from Schweitzer criteria with Wolfe Research. Your line is open. Please go ahead.
Speaker Change: Thanks for taking my questions. Let me try two please could you please provide.
Speaker Change: An update on where you are with the CFO search.
Speaker Change: What's your priorities are as you look for a new CFO given you maybe at a different stages as a company than you were back pre IPO.
Whitney Hurt: And then same similar question for Whitney in terms of.
Whitney Hurt: Is it fair to assume you're in it for the long haul given the recent change in terms of your investment as an operating CEO with the company. Thanks a lot.
Whitney Hurt: Thanks, So much this is whitney thanks for the questions. So here's a quick update on the CFO search I'm. The CFO hire is going to be an incredibly important one.
Whitney Hurt: This is certainly a very high priority and we are actively interviewing candidates and we will update you. When we've made an appointment I just wanted to reinforce that this is a top priority and we are looking for a leader that suits the needs of the business and that's current.
Speaker Change: Environment and for our goals in the future so more to come there yeah, let's let's talk about my tenure so.
Speaker Change: I really appreciate this question and I want to start by saying this is my passion I love Bumble and while I had no intention of.
Speaker Change: Stepping back into the CEO role I have the intention of remaining the executive chair and.
Speaker Change: When this opportunity did arise you know there is no doubt in my mind that there is no one else on Earth that can go and really bring love back to this category than the founder of of what was the.
Speaker Change: Co founder of tender I founded Bumble has a 25 year old woman I know this category I Love This category I live for that and so to answer. Your question. This is not an obligation for me. This is a true honor. This is something that I'm excited to dive back into and I have no plan.
<unk> of making this a short lived or interim focus I am in this to win this and I am in this to bring loss back to the category and to People's lives around the world and so you can expect me to be fully fully fully committed.
Speaker Change: And there is there's no expiration date on that.
Cory Carpenter: We now turn to Cory Carpenter with Jpmorgan. Your line is open. Please go ahead.
Cory Carpenter: Great. Thanks for the questions I had two maybe for Amin could you just expand on the discover tab feature I think this is the first time, you mentioned that as being part of the winter release, So would be curious to hear more about that and what you're seeing in testing.
Cory Carpenter: Secondly, just any update you can provide us on what you are seeing on top of the funnel trends following default press release. Thank you.
Speaker Change: Thank you, let's talk a little bit about this cover.
Cory Carpenter: We're really excited about introducing discover as part of our winter release.
Cory Carpenter: Is a new tab on the bundle up that's really focused on helping users discover one another through shared interests and for US. There's been a couple of key focuses if you recall what I've been talking about these last few quarters around our transformation customer experience ecosystem and we imagine.
Cory Carpenter: Our strategy for our revenue growth and so discover is aimed at two major things, it's adding customer experiences that's focused on relevant so customers come to bumbled find relevant people and discover really helps accelerate that discover but it also is a feature that is free for all.
Cory Carpenter: Our users everywhere around the world and it's both to help us.
Cory Carpenter: We energized the top of funnel for us, especially with younger users and to give that path to freemium. So we're really excited about the early signs of our testing Regulus rigorously tested this feature and various market. We're seeing great engagement users that are already using discover today are good.
Cory Carpenter: More mattress notes, providing the value that we want and we're excited to continue to evolve it over the year.
Cory Carpenter: And with regards to the fall release that release was really aimed at engagement and success as well and what we have seen from it is high interest in the filters interest filters, which has become a.
Cory Carpenter: Founding a foundation for the discovery capabilities, who really incredible rapid adoption, there and increased in success of our users as well.
Cory Carpenter: That has helped US is really focused on near term engagement, which we in turn will drive longer term revenue reacceleration. So we're optimistic based on what we've seen so far and our.
Cory Carpenter: Exactly the right time for for what we know will be the right direction for the company.
Speaker Change: Our next question comes from Andrew <unk> with Raymond James Your line is open. Please go ahead.
Andrew: Hey, Thanks for taking my question.
Speaker Change: We've seen some kind of anecdotal data kind of floating around.
Speaker Change: Some people, especially are just taking longer or maybe a little bit more hesitant to enter the dating market altogether and I guess.
Speaker Change: As youre thinking about that how does that kind of impact your plans for monetizing. These users as you start to get them in and you start to see to your point the engagement from the fall release from the winter lease really quick you were talking about thank you.
Speaker Change: Yeah, we were aiming to be really deliberate here one we want to make sure that users across all age groups, but certainly younger users are engaged that were reigniting top of funnel, especially on our mature markets.
Speaker Change: And we aren't seeing a delay while we want what we have seen from our research in the testing that we have done for fall and the winter is that users are looking for two big things relevant users. So the work in both innovation and ecosystem that we have been doing are incredibly focused on exactly that.
Speaker Change: In safety and that's so much of the work that we have done across its release people want to know that they are going to be safe in our platform and then they're going to find users that is relevant to them. Those are the key indicators for younger users and again I am really confident that we're on the right path given the data that we have seen.
Nathan: Our next question comes from Nathan <unk> with Morgan Stanley. Your line is open. Please go ahead.
Nathan: Hey, everyone. Thanks for the question I wanted to dig a little bit more onto the guidance at the midpoint. Once your guide implies a 25% or so EBITDA margin, so pretty big step down compared to <unk> or just give a little bit more color on what's driving the contraction what are the areas of investment.
Nathan: That are pushing that and given you talked about further investments for the year, how should we think about the slope of margin over 2025. Thank you.
Speaker Change: Sure I can take that hany.
Nathan: So as you know as we said in our prepared remarks, we do expect that.
Nathan: Adjusted EBITDA margins for the year will contract for the year now we are not providing specific guidance for what this looks like for the full year, but we've given you the numbers for Q1, which as you said represents a margin of 25% at the midpoint of the range I think a big one of the big reasons for the step down is.
Nathan: Obviously.
Nathan: We are navigating revenue headwinds.
Nathan: That flows through to EBITDA. So that's obviously one thing that impacts margin. We are also making some deliberate investments this year, specifically in product and technology to reignite usage and engagement. So all the things that you've heard from us today around.
Nathan: What does that product vision look like what is the work that we're doing around safety. What are the work that we're doing to sort of drive the ecosystem. We are investing in both.
Nathan: People resources as well as in platform resources to accelerate the work that we're doing so that is the biggest investment that.
Nathan: We are making in the company for 2025, and that's what's reflected in the guidance that youre seeing obviously.
Nathan: We'll continue to be very disciplined on on other areas of spend including marketing marketing as you know is an area of spend that.
Includes both sort of always on approach as well as spend but we do that coincides with a big card at the moment. So we will continue to be very diligent in terms of how we think about efficiency and auto why on marketing and Thats definitely an area that we've historically been very good at in terms of cost efficiency and discipline.
Nathan: And across every other part of the business. The goal is to be as disciplined as possible. So we're very confident that we will return to expanding margins as revenue growth resumes, but we do expect that in 2025, we will see a contraction.
Our next question comes from Egalet Rooney on with Citi. Your line is open. Please go ahead.
Nathan: Okay.
Nathan: Afternoon.
And maybe Whitney just as you step back in and Theres been a lot of changes.
Nathan: Strategy fronts.
Nathan: And any changes to how you think about the strategy going forward and maybe you can also talk about that in the context of there's been a number of.
Nathan: Executive level changes over the course of the last year or so is everything in place. The way you think it should be at this point or is there more work to do in that matter.
Nathan: Thanks, So much for the question. So I think shareholders should have peace of mind and the fact that Leon Eni have been super aligned from day one.
Speaker Change: When she stepped into the role we made a commitment to each other that we were going to be a customer first company that is the most important thing that we can be and our members candidly deserve better than what this category has been giving them over the last several years. So we have been on a joint and dual quest.
Speaker Change: The last year together under her leadership to make sure that we are solving customer pain points that is the strategy there is not some.
Speaker Change: You know that.
Speaker Change: Off the beaten path strategy, it's quite simple it is getting back to basics and solving the problems that are getting in the way of our members finding love and love that is actually a fruitful that brings them joy that makes them feel good it's not about just getting people matches, and then leaving that and conversations that's not what matters.
Speaker Change: To us and so moving back to strict customer Centricity is the roadmap that is the plan and so so much of what you've just heard liddy Ani.
Speaker Change: Talk about as far as the winter release. This is all about what the customer needs and wants getting back to being you know the.
Speaker Change: The most safe trusted platform for people to come and meet new people. So I think that the long and the short of it is the strategy is not changing from making sure that we deliver the most value. The most confident curious joyful experience that we possibly can.
Speaker Change: To our members.
Speaker Change: And that is the number one priority and so that is not a departure or pivot we are super aligned there and that's a continuum so moving to the team.
Speaker Change: Another exciting update that I think you've all kind of you know.
Speaker Change: <unk> been following along is that <unk> is really the talent at the company over the last few quarters there have been.
Speaker Change: No layoffs and making sure that we've moved to a very strict performance model. So it is the best players you know people come do great work. They stay and we are really diligent about this and so I feel really proud and excited by the folks that letter Jani has recruited both at the top level at the ETA team, but also.
Speaker Change: Throughout the Org. So obviously this is.
Speaker Change: You know a process, it's not a one one stop.
Speaker Change: Right, but we are definitely in the best place we've ever been from a talent standpoint in the history of bumble very sophisticated experienced folks that are really deeply passionate and believe in the opportunity does that mean I won't be adding more strategic hires that are experts in there.
Speaker Change: <unk>.
Speaker Change: Of course, I will there is always going to be an opportunity to introduce you know experts in their field and make sure that we always have the best team players across the or but I think it's important for everybody here to know that I'm coming back as a real operating Ah.
Speaker Change: With my focus on excellence efficiency.
Speaker Change: Our lean passionate dedicated hard working team that is all on the same page. We are one team rowing in the same direction on one roadmap and I'm really really excited about the opportunity ahead I wouldn't be here if I wasn't so I really look forward to sharing more next quarter when I'm back in the seat.
Speaker Change: Okay, Great. That's really helpful. Thanks, and then just one on both the third strategic priority on what has been the revenue strategy and I know thats, a little bit further down the line and we're focused more on engagement right now, but maybe just.
Speaker Change: Any help thinking about that path from engagement monetization.
Speaker Change: I was thinking about it today or if its really just got the engagement down and then focus on the monetization later thanks.
Speaker Change: Thank you.
Speaker Change: You know as <unk>.
Speaker Change: We've been hearing for me there are three pillars to our transformation.
Speaker Change: The health of our ecosystem innovation.
Speaker Change: Those first two pillars are very much about strengthening the foundation and getting engagement right. That's the reason why you've been hearing so much emphasis on that over the last few quarters, but in parallel to that has been a revenue strategy effort, which is really about ensuring that we have a very thoughtful balancing of our rev.
Speaker Change: And you across each tier of our subscription and that is ensuring that we have a great free experience that are paid paywalls are in the right places that we're driving conversions at the right moment for our users so that not only do they.
Speaker Change: Come to the App, they pay and they feel valued and valuable.
Returns for being a subscriber in our platform. So that work is ongoing already and it is really important for us to get the foundation of engagement right, because we know that conversion and revenue growth as a next step as part of this process, but we are testing quite a few different.
Speaker Change: Frameworks in terms of that rebalancing and I'm excited for what we can he is bringing in an envisioning the value that she wants to on our costs across the board in our platform. So lots of focus on that from you.
Strategy for the company moving forward for sure.
Speaker Change: Our next question comes from John Blackledge with Cowen.
Speaker Change: One is open. Please go ahead.
Logan: Either it's Logan on for John.
Logan: Could you talk us through puts and takes on the <unk> bundle up guidance in terms of how youre thinking about payer conversion.
Logan: Namely as you focus on the user ecosystem and could you discuss any short term negative impacts from new safety features if any thanks.
Logan: Yeah.
Logan: Sure, Hey, look and I can take that so you know.
Logan: Just to maybe reiterate what we are expecting for Q1 for total revenue. We are guiding on an ex FX basis to be declining between 4% and 7% and for Bumble App.
Logan: Excluding FX and also the impact of the loss of one day.
Logan: Due to last year being a leap year.
Logan: We are providing an outlook of revenue declining between three and 5% and if you look at our Q4 2024 numbers for Bumble App, we declined at 4%. So we had effectively saying we are defining it sort of similar levels as where we were in Q4.
Logan: In terms of the puts and takes for payers. We are also guiding to a sequential decline in paying users in the range of about 100 to 120000.
And this sequential decline encompasses all of the work that we're doing around <unk>.
Logan: Strengthening our ecosystem. So it includes.
Logan: The work that we're doing around safety. It includes the work that we're doing it on marketing.
Logan: In terms of how do we think about.
Logan: What kind of users we bring onto our platform if you remember.
Logan: For the last two quarters, we've talked we've been talking a lot about what's strengthening our ecosystem means and it's not just about weeding out bad actors. It's also about how do we get the right people on the ecosystem that can match with other relevant people and there's a lot of work that we're doing from a marketing perspective that also impacts that.
Speaker Change: Sort of reinforce what Luciano said earlier, our focus is very much on ensuring that we strengthened our top of the funnel.
Logan: Strengthen engagement metrics and then.
Logan: That will lead into strengthening conversion and then strengthening revenue. So that's how you should sort of think about the arc of the work that we're doing.
Logan: Lot of these are in parallel so like maybe only mentioned about our revenue strategy. We are also looking at ways to strengthen our revenue strategy, but the focus in the short term is very much on making sure that we get the top of the funnel back to growth.
Logan: You just mentioned if you look at third party data numbers between Q4, and Q Q1, we've seen green shoots right. We've seen some stabilization of metrics, we've seen green shoots in terms of the things that we are testing obviously, it's still very early days, but as you know.
Logan: It's very encouraging to see the progress because we absolutely believe that we are in that eye protection in terms of our overall strategy.
Logan: Okay.
Speaker Change: Our next question comes from Robert <unk> with Evercore ISI. Your line is open. Please go ahead.
Speaker Change: Great. Thank you want to follow up on the earlier question. It seems like Theres been a reset where theres reset ongoing of bumble and maybe more broadly across the category maybe enhance.
Speaker Change: Tumor surplus for the user value proposition do you think that's a temporary change from maybe the Gen Z generational shift where do you think it's perhaps more structural just given that we've had years in some cases.
Speaker Change: Micro adjustment or optimization of things like.
Speaker Change: Paywalls swipe limit something like that thank you.
Speaker Change: Yeah.
Speaker Change: Yeah, I'm happy to jump in here. This is whitney thanks for the question.
Speaker Change: I think here's what happened.
Speaker Change: All mine dating really.
Speaker Change: Took off for the millennial audience in 2012.
Speaker Change: And it just was explosive because the demand is there and I standby that the demand is still there. What happened was there was never really a moment and you kind of alluded to this there was never really a moment for and I'll speak just for ourselves for us to pause and reset and say are we still.
Speaker Change: Delivering the most value to the customer what are they here looking for okay. They're here to be matched with someone great are we doing that at the best of our ability. What are the struggles are members are running into and you kind of you kind of said this by saying you know it was this game of cat and mouse of Okay, a new feature.
Speaker Change: Here, our new filter, there or a new paywall here and the time has come to say you know what we have a great business.
Speaker Change: We serve one of the most important needs on planet Earth with how people find love I mean truly this is why I'm here what is more important than that I cannot think of something I'd be off doing it if I could this is the most important thing I could give my time too and I think that this is the moment and linear.
Speaker Change: Johnny has already been done.
Speaker Change: Deep in the in the <unk>.
Speaker Change: In the throws of this of spearheading this to reset and say, let's look at the health of love and understand the foundational work that needs to be reset so when people come in here they feel loved they feel home they feel safe they see who they want to see it's a reset it's bringing back the right people to the right environment and really.
Speaker Change: Giving people the opportunity to meet in a way that is both.
Speaker Change: Filling in current I actually don't think this is so generational everyone all over the Internet speculate about this.
Speaker Change: Universal doesn't really matter, how old you are or where you come from or what youre looking for we all just want to get to that special person.
Speaker Change: This is our opportunity to really say, how what's the best way to get you there and this is where we're really just working backwards from customer pinpoints and so I'm Super Super confident that the work ahead of US which is what I'm stepping back into carry on and to do it's all about saying how do we fulfill the demand of <unk>.
Speaker Change: <unk> people find love in the safest most compatible most joyful way and so that's really what we're setting out to do and I think it's going to be a huge reset and I don't think its a forever reset I think that this is hard work. It's foundational it's a remodel it's not a rebuild its a redesign it's not it's not a start from scratch, we don't need to knock this thing down and build again.
Speaker Change: Certainly not what's going on.
Speaker Change: Theres still serves a lot of value I mean, the countless baby as a love story is across the board. So I think watch this space and I'm really excited to share more in detail when I'm back in the seat in a few weeks and you'll hear from me in the next earnings. So thank you so much.
Eli Winter: We now turn to Eli Winter with Deutsche Bank. Your line is open. Please go ahead.
Eli Winter: Alright, Thanks for the question it would be a lie on for Ben.
Eli Winter: With the exit of official in the fruit and your continued focus on product innovation with dating I'm curious also to hear about your thoughts on products beyond dating.
The option of one will be a factor on that and what learnings have you been able to leverage from Geneva that could help with Bob will be at that scale.
Eli Winter: Yeah.
Speaker Change: Thank you Eli I can get started on this one.
Whitney Hurt: One of the most exciting things about bumble is that bumble has always been a brand that stands for more than a romantic love and to Whitney's point.
The love is the most important thing in Bumble has learned over the years with BSS is that friendship work is so important in People's lives. So we're really.
Whitney Hurt: Excited about continuing to focus our energy not only in re imagining dating the dating category of our core businesses. This decision around fruits and official which is always are at an extremely hard decision to make is about putting our resources and our focus on re imagining dating for our core businesses with bundling, but do.
Whitney Hurt: But also putting resources in the opportunity that we see for PFS and Geneva with community. So truly excited about that and as you know Whitney has been the the founder and originator of BSF and so passionate about that so really excited to see her carry the torch moving forward.
Speaker Change: Thanks for the answer I might just add a couple of quick points. There. So what's really fascinating about BSF in particular and friend finding is this is actually the most relevant entry point for the broader category of love, let's get away from the label dating App for a moment.
Whitney Hurt: When you look at the post Grad audience, which is Gen Z.
Whitney Hurt: They are eager and I hate to use this word but.
Literally desperate to find friends they've left this super dense environment, where they're surrounded by friends they've gone out into the real world, They're young they're social they want to meet people and Theyre looking for community and friends and so what's really exciting about the extensibility and the debt stretching us if you will of our brand is it is not associated.
Whitney Hurt: With nearly a quote unquote dating app bumble really lends itself to a much broader lifestyle brands. So women in particular have no issue joining our product even when theyre in a romantic relationships. So that they can find community in France. The on ramp opportunity here is quite exclusive to us.
Whitney Hurt: Other other category players don't really have this opportunity because they don't have the same brand from a lifestyle standpoint, and so what we're really looking at is how can we go after these audience says of post crowds and theirs.
Whitney Hurt: Theres a lot of different audiences that are more interested in starting his friends first how can we do that to also be a ramp back into love because as we all know most folks in their twenties. The first relationship. They have is not generally there forever relationship and so because of the nature of romantic relationship.
Whitney Hurt: <unk> when someone is in your product or are you looking for friends then they go through a breakup now they're much more likely to on ramp into the love category from a romantic standpoint. So there is a flywheel here and we are really excited about how we can leverage DFS both with women here.
Whitney Hurt: In America, but it's also a great on ramp for new markets that are a bit more.
Whitney Hurt: They tend to adopting to a dating app right away. So so more to come here and watch this space.
Speaker Change: Our next question comes from Curtis Nagle with Bank of America.
Speaker Change: Your line is open. Please go ahead.
Speaker Change: Great. Thanks.
For taking the question.
Speaker Change: For me.
Speaker Change: George competitors noted.
Speaker Change: Cold or two to pick out the peak season do Interims did you observe any extra more I guess.
Speaker Change: Hum.
Speaker Change: Can you please.
Speaker Change: I missed the very beginning.
Speaker Change: Yeah. The question was a bit fuzzy at the beginning for us for some reason.
Speaker Change: Yes, sorry about that might be you might have thought the question was your order.
Speaker Change: Competitors have noted there to pick up and peak season did interims and just asking if you keep something similar and if so.
Speaker Change: Did it work well.
Speaker Change: That's the question.
Speaker Change: I mean, why do you take that.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Well, we are seeing as Whitney just called out.
Speaker Change: General interest, especially for younger users to start more casual first to start with friendship to find an on ramp that is less intimidating, which is why we're very excited about having a broader set of products that can serve that user base, but we're continuing to see important trends in <unk>.
Speaker Change: Finding connections that are relevant and ensuring that safety is top of mind for for platforms like ours for us what we're seeing as well is how relevant it is to have a women's first focus and that has always been such an important.
Speaker Change: An important priority and focus and mission for Bumble and it continues to be incredibly relevant in this category. So all in all we're seeing great opportunity for the company moving forward and as Whitney called out at the start of this Q&A.
Whitney Hurt: Love has not been as relevant as we see it today and I'm excited to see the company capture the opportunity ahead.
Ladies and gentlemen, this concludes our Q&A on today's conference call.
Whitney Hurt: We'd like to thank you for your participation you may now disconnect your lines.
Whitney Hurt: [music].
Whitney Hurt: Yeah.