Bumble Stock Tumbles as Users Depart, Issues Soft Outlook

KEY TAKEAWAYS

Dating apps are losing customers, prompting at least two of them to consider expanding into more areas outside their core business of romance — such as friendships.

On Wednesday, shares of Bumble ( BMBL ) tumbled by more than 27% after the online dating service on Tuesday issued a weaker-than-expected first-quarter outlook and said it lost 57,000 paying customers in the fourth quarter versus the third. The women-focused dating app also said it would wind down two of its dating apps, Fruitz and Official, in the first half of the year.

The announcement came as Bumble projected revenue of $242 million to $248 million in the current quarter. The outlook was softer than expected, according to Jefferies, reflecting a decrease of between 100,000 and 120,000 paying users over the fourth quarter, versus the 30,000 losses expected by Wall Street analysts.

Founder Says Company Continues Push into Being Lifestyle Brand

Bumble Founder Whitney Wolfe Herde, who is set to return to the CEO role next month, said the company is continuing its push into making Bumble a “much broader lifestyle brand” allowing users to find not just dates but also friends.

“When you look at the post-grad audience, which is Gen Z, they are eager, and I hate to use this word, but quite literally desperate to find friends,” she said in the call, the transcript of which was made available by AlphaSense. “Women in particular have no issue joining our product even when they're in a romantic relationship so that they can find community and friends.”

Shares in Match Group ( MTCH ) tumbled earlier this month after the dating app named a new CEO and offered a soft outlook. It said it had 14.6 million paying users in the fourth quarter, a 4% decline year-over-year.

Match also tapped on users' desire to bring their friends on dates. During the second quarter, it said it plans “to begin testing its double-dating feature for users to match with other pairs of friends, which we expect to appeal especially to women and Gen Z seeking safer, lower-pressure ways to date.”