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Shares of Bumble Inc. plunged after the dating company slashed its annual revenue outlook, signaling that an overhaul to the brand\u2019s flagship app hasn\u2019t been enough to revive slowing growth.\u00a0<\/p>\n
Annual revenue will grow between 1% and 2% from the previous year. The company had previously forecast growth between 8% and 11%. Wall Street was expecting an 8.4% gain, per Bloomberg-compiled estimates.<\/p>\n
\u201cWe are resetting our guidance today to reflect actions we are taking to position Bumble to reignite user growth, deliver improved customer value, and drive long-term revenue growth,\u201d Bumble said in a\u00a0statement<\/a>\u00a0on Wednesday. \u201cWe believe our strong balance sheet and cash flow generation give us the flexibility we need to return capital to shareholders while creating lasting value.\u201d<\/p>\n The shares fell as much as 32% in extended trading on the news.<\/p>\n Bumble, which\u00a0went public<\/a>\u00a0in 2021, saw its shares hit a\u00a0record low<\/a>\u00a0in February after it shared a weaker-than-expected sales outlook and cut around a third of its workforce. The company\u2019s struggle to grow its user base is emblematic of a broader trend in the U.S. online dating industry, which has yet to recover from a\u00a0post-pandemic reckoning<\/a>. But shares for Match Group<\/a> Inc., which owns Bumble\u2019s biggest rival Tinder, jumped the most in nearly two years after the company delivered better-than-expected quarterly results last week.<\/p>\n Bumble\u2019s third-quarter forecast and second-quarter results also broadly missed the mark. Bumble expects sales for the current period of $269 million to $275 million, below the $296.1 million that analysts projected. Adjusted earnings before interest, taxes, depreciation and amortization will be between $77 million and $80 million, the company said. Wall Street was hoping for $91.5 million.<\/p>\n Revenue for the period ended June 30 increased 3.4% to $268.6 million, missing the average analyst estimate of $273.2 million. The number of users paying for Bumble \u2014 an important metric for investors \u2014 rose 14.7% to 2.8 million, in line with Wall Street estimates.<\/p>\n The Austin, Texas-based company has been in the throes of an internal leadership transition since founder Whitney Wolfe Herd announced in November that she would\u00a0step down<\/a>\u00a0as Chief Executive Officer. Bumble has since named four new C-suite executives, who have been charged with overhauling the company\u2019s mobile app to make it more appealing to younger users.\u00a0<\/p>\n The redesign of the app has seemingly not been enough to court younger users or overcome macroeconomic conditions, said Chandler Willison, a research analyst with data analytics firm M Science.\u00a0<\/p>\n \u201cI believe Bumble in some ways is seeing the slowing growth that we\u2019ve observed for Tinder as these businesses scale and face increasingly difficult year-ago comparisons, potentially facing some degree of saturation,\u201d he added.\u00a0<\/p>\n Increasing the number of paying users has been key to Bumble\u2019s growth strategy, but progress has slowed since late 2021. The app\u2019s higher-price \u201cPremium Plus\u201d subscription tier launched in December but did not bring the \u201cincremental uplift\u201d the company had expected, executives said in February.\u00a0<\/p>\n<\/div>\nRecommended Newsletter:<\/strong> The Fortune Next to Lead newsletter is a must-read for the next generation of C-suite leaders. Every Monday, the newsletter provides the strategies, resources, and expert insight needed to claim the most coveted positions in business. Subscribe now. Sign up for free<\/a>.<\/div>\n