Bumble Inc (NASDAQ:BMBL) shares soared more than 10% after the online dating platform posted third quarter revenue and earnings above Street estimates and maintained its full-year guidance.
Revenue of $273.6 million topped estimates of $271.7 million while earnings before interest, taxes, depreciation and amortization (EBITDA) of $82.6 million topped estimates of $78.8 million, attributed by Bank of America analysts to operation expenses (OPEX) efficiencies.
The analysts, however, repeated their ‘Underperform’ rating on Bumble as they are cautious about online dating trends heading into 2025, with both Bumble and Match facing challenges in growing users.
They noted that in Q3, Bumble’s app revenue was down 1% year-over-year and average revenue per user fell 10% to $25.58 on geographic mix shift to international.
Management’s Q4 guidance of revenue of $259 million is “relatively in-line” with Street estimates while EBITDA of $72 million is slightly below estimates, they pointed out.
Management highlighted additional improvements to the Bumble app including new interest filters and expanded tools for the 'opening move' feature for Q4, and is expected to announce a broader product release with more details on the product roadmap for fiscal 2025 in Q1.
“For Bumble, a return to sequential payer growth will likely take some time to materialize as product investments kick in and macro pressure improves,” analysts wrote.
“We also see potential for margin pressure (unless revenue is higher than expected) on potential marketing, product and headcount investments.”
The bank’s analysts raised their price objective on Bumble to $5.75 from $5.50 on slightly higher growth.
Bumble shares traded hands at $8.95 in the early afternoon on Monday.