Image credits: Sales force
Bumble, a once powerful force in online dating, is facing a reckoning.
The company reported weak Q4 2023 results today showing a net loss of $32 million and revenue of $273.6 million. Although higher than the same period last year, earnings fell short of Wall Street expectations and were coupled with a disappointing outlook for the first quarter of 2024 — sending Bumble stock down nearly 10% in after-hours trading.
Bumble takes drastic measures to stop the bleeding.
CEO Lidiane Jones (pictured above) announced that 30% of Bumble's workforce, or about 350 employees, will be laid off, and that Bumble will embark on an overhaul of the app aimed at reviving growth. Jones said the near-term product roadmap will focus on artificial intelligence and improved safety measures, as well as features designed to appeal to younger audiences.
“We believe these actions will strengthen our core capabilities and enable us to continue delivering new and engaging user experiences that create healthy and equitable relationships,” Jones said during today's earnings call. “We have a lot of users today who like the model of online dating — swiping, discovering, searching — but there's also a group of users who want more flexibility so they can try and discover people in a more organic and natural way.”
Bumble faces challenges on multiple fronts, as its main rival Match Group, which owns Tinder, Hinge and Match among other dating apps, goes after Gen Z users with increasingly aggressive marketing tactics.
Bumble's payer growth has been slowing since late 2021, and many of the capabilities introduced in Bumble's apps over the past 18 months haven't resonated with the user base, Jones said during the call.
Bumble has also had to deal with internal organizational shifts in the wake of founder Whitney Wolfe Herd stepping down as CEO last November and moving into the CEO role. Jones, who joined from Slack in January, has named four new executives at Bumble in the past week alone.
Slow growth is not limited to Bumble. Dating apps in general — including Match Group apps — have seen a decline in revenue from users who are reluctant to shell out cash for premium add-ons. According to 2023 Pew Research Stadywhile 41% of users aged 30 or over have paid for dating apps, only 22% of users under 30 – the demographic seen as the most desirable – have done the same.
Platforms have tried to combat the decline in different ways. Tinder is Pivoting To focus on long-term relationships, which is a top priority for Generation Z, as polls show Less interested In informal relationships and hookups. Hinge, among other things, meanwhile, embraces the move to IRL encounters, launching a finance and promotions to sponsor individual events.
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