Bumble Inc. (NASDAQ: BMBL) swayed into profits in the first quarter of 2022 after reporting losses for three consecutive quarters. Its first-quarter earnings per share surpassed the consensus estimate of a $0.03 loss per share. Also, revenues exceeded the estimate by 1.4%.
The better-than-expected results and impressive projections for Q2 seem to have lifted the market’s sentiment for Bumble. Shares of this $4.04-billion online-dating platform are up over 24% currently.
Interestingly, the positive momentum after the earnings release helped more than cover the losses seen in the past three trading days.
Financial Highlights
In the quarter, Bumble reported earnings of $0.13 per share, better than the consensus estimate of a $0.03 loss per share. However, the bottom line was 92.3% below the year-ago tally of $1.69 per share.
Revenues, at $211.2 million, reflected an improvement over the consensus estimate of $208.4 million. Also, the top line expanded 23.7% year-over-year, driven by 38% growth in Bumble App revenue, which reached $155.4 million. However, the positive impact was partially offset by a 4% decline in Badoo App and Other Revenue. Forex woes had an adverse impact of $5.1 million on the top line.
The Bumble App’s paying users at ~1.8 million were up 31.2% year-over-year, while the company’s total paying users were 3 million, up 7.3% from the year-ago quarter. The total average revenue per paying user (ARPPU) was $22.76, up 13.9% year-over-year.
Non-GAAP costs and expenses were $161.4 million in the quarter, up 29.5% year-over-year. Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) increased 8.1% to $49.8 million, while the margin was down 340 basis points to 23.6%.
Balance Sheet and Cash Flow
Exiting the first quarter, Bumble’s cash and cash equivalents decreased 16.4% sequentially to $308.8 million. Long-term debt of $619.7 million was down 0.1% from the previous quarter.
In the first quarter, Bumble generated net cash of $19.4 million from its operating activities as compared with a net cash use of $45.6 million in the year-ago quarter. Capital expenditures grew 84.2% year-over-year to $5 million.
Free cash flow in the quarter came in at $14.4 million, compared with the year-ago tally of ($48.3) million.
Management Commentary
Bumble’s founder and CEO, Whitney Wolfe Herd, said, “Our compelling brands, product leadership, and operational excellence position us well to capture a growing share of the global dating market.”
Projections
Bumble anticipates revenues to be within the $218-$221 million range in the second quarter of 2022. This includes the impact of forex woes of $9 million and a headwind of $6 million related to the Ukraine-Russia war. Bumble App revenue is expected to be $167-$169 million in the quarter.
For 2022, the company maintained its revenue projection in the $934-$944 million range. The impact of the Ukraine-Russia war is expected to be $20 million, while forex woes are now predicted to be $28 million from the earlier estimate of $20 million.
Bumble App revenues are expected to grow within the 34%-36% range from the year-ago quarter. The adjusted EBITDA margin is likely to be 24.5%-25%, lower than the previous expectation of 26.5%-27%.
Wall Street’s Take
Overall, the company has a Moderate Buy consensus rating based on 10 Buys and four Holds. The average Bumble price forecast of $30.93 suggests upside potential of 40.6% from current levels. Shares of Bumble have plunged 57% in the past year.
Bloggers Sentiments
Per the TipRanks Bloggers tool, financial blogger sentiment is 85% bullish on BMBL compared with the sector average of 68%.
Conclusion
The Bumble App remains a major top-line driver for BMBL, with continued improvements expected in the quarters ahead. The number of paying users and revenue per user are on the rise. Headwinds related to forex woes and the Ukraine-Russia war are concerning but fail to restrict the positive momentum for the stock.
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