Bumble (BMBL) saw its shares tumble over 8% in premarket trading Wednesday after the company’s Q4 report missed Wall Street’s expectations on top and bottom lines.
Moreover, the online dating service provider offered disappointing guidance and announced significant job cuts.
For the fiscal Q4, Bumble posted a loss per share of $0.19, wider than the predicted loss per share of $0.12. Revenue stood at $273.6 million in the quarter, also below the consensus forecast of $275.26 million.
Further, its Total Average Revenue per Paying User (ARPPU) fell to $22.64, down from $23.01 the previous year, and did not meet the anticipated $22.95 consensus estimate.
Going forward, Bumble anticipates Q1 2024 revenue to be in the range of $262-268 million, significantly below the $277.8 million anticipated by analysts.
In addition, Bumble announced plans to eliminate approximately 350 job positions, the first major move by the new CEO Lidiane Jones aimed at addressing the downturn in consumer spending.
The company estimates it will face $20 million to $25 million in one-time expenses due to the workforce reduction, with the expectation that the majority of these costs will be accounted for in the first half of 2024.
“Bumble brand revenue growth is quickly decelerating (from +23% y/y in 3Q23 to 16% y/y in 4Q23) on the back of industry-wide weakness,” alongside a “worse-than-expected contribution from new features,” Morgan Stanley analysts said in a Wednesday note.
Looking ahead, Morgan Stanley believes BMBL “will be rangebound until the market can gain conviction that the growth slowdown is not simply saturation and Bumble brand will be able to reaccelerate topline in the back half.”
The broker lowered revenue estimates for the fiscal years 2024 and 2025 by 3% and 4%, respectively, while increasing the EBITDA forecast by 5% and 4%.
Simultaneously, the price target on the stock was cut to $16 from $17 “due to the lower revenue base and unchanged long-term margin.”