Bumble Inc. Q4 FY2024 Earnings Call

Hello and welcome to the Bumble Fourth Quarter 2024 Earnings Conference Call. My name is Elliot and I will be coordinating your call today. I would now like to hand over to Will Taveras from Investor Relations. Please proceed.

Thank you for joining us to discuss Bumble's Fourth Quarter 2024 Financial Results. With me today are Bumble CEO, Lidiane Jones; Executive Chair, Whitney Wolfe Herd; and CFO, Anu Subramanian. Before we begin, I'd like to remind everyone that certain statements made on this call today are forward-looking statements. These forward-looking statements are subject to various risks and uncertainties and reflect our current expectations based on our beliefs, assumptions, and information currently available to us. Although we believe these expectations are reasonable, we undertake no obligation to revise any statement to reflect changes that occur after this call. Descriptions of factors and risks that could cause actual results to differ materially from these forward-looking statements are discussed in more detail in today's earnings press release and our periodic filings with the SEC. Descriptions of factors and risks that could cause actual results to differ materially from these forward-looking statements are discussed in more detail in today's earnings press release and our periodic filings with the SEC. During the call, we also refer to certain non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. Reconciliations to the most comparable GAAP measures are available in our earnings press release which is available on the Investor Relations section of our website at ir.bumble.com. With that, I will turn the call over to Lidiane.

Thank you, Will, and good afternoon, everyone. Today I'll share a recap of the year and offer some detail on Bumble's momentum entering 2025. We also have Whitney with us to share her thoughts on the path ahead upon her official return in a few weeks. Now, turning to the fourth quarter, our results were broadly consistent with our outlook. Total revenue and adjusted EBITDA came in at the high ends of their respective ranges and Bumble App revenue outperformed our guidance. The modest decline in Bumble App net adds for Q4 also came in slightly ahead of our expectations, continuing to operate with strong financial discipline, allowing us to generate free cash flow of $114 million for the year. Most importantly, we achieved solid progress on our product roadmap and a leaner, more agile team has come a long way over the last 12 months. 2024 was an important year in rebuilding Bumble's foundation, which prepares the company to boldly reimagine the future of online dating. We've reshaped our workforce and put in place a high-performance culture. We aligned around a clear plan for moving Bumble Apps forward for the next generation of consumers seeking fresh experiences and new ways to find love and connection. That plan is guided by three pillars we've shared with you: strengthening our ecosystem, driving innovation in our customer experiences, and enhancing our revenue strategy. When we talk about a healthy ecosystem, we're talking about creating a safe and relevant platform for customers who want to find great matches. We continue to focus on ecosystem health in a few key ways. One is continuing our efforts to remove unhealthy and bad actor accounts, which is critical to providing a safe and quality experience for our customers. The second involves being more intentional about the users we attract to our platform. We've increased our focus on organic marketing strategies to drive more of our targeted customers into Bumble App. We began testing this initiative in the fall and have been rolling it out more broadly into the new year with continued success. We are very encouraged by the progress, but it's important to emphasize that our ecosystem health initiatives will continue to create headwinds to paying user growth in the coming quarters. As we execute on these pillars, we're also making good progress on our product roadmap, which is set to deliver increasingly bold innovations for our customers. Last quarter, we talked about our fall release focused on dating on your terms. The release delivered significant updates to our matching algorithm, leveraging the power of AI, and new interest filters and powerful tools to enrich opening move interactions. Since its launch, we have seen notable improvements in user adoption. Interest filters have quickly become one of our most popular features, and opening moves are now being used by approximately half of our members. Our upcoming winter release, slated for mid-March, will focus on confidence, safety, engagement, and discovery. We're introducing a brand-new Discover tab to deliver a more curated and updated matching experience based on shared interests. We're also introducing a new AI-assisted photo picker to improve confidence among our members, making it easier to create a profile that truly stands out. To advance our leadership in trust and safety, especially for women, we're introducing ID Verification, Share My Date, and Review Before Send, all features aimed at safe and healthy connections on our platform. Additionally, we will launch Instant Match, which allows members to share their profiles with one another in real life. Importantly, many of these features are free to our customers and our primary goal is to improve engagement and generate increased yes vote rates, a metric fundamental to our customer success. This, in turn, drives positive word of mouth and ultimately new users to Bumble. We have undertaken a rigorous approach to the launch, and our testing of all these features has shown promising results. The team is poised to ramp innovation this year that will align with key customer needs. The work we're undertaking will take some time to reaccelerate growth in Bumble App paying users and revenue, but we're confident that all these improvements will put Bumble on a path to renewed strength in the years ahead. As we prioritize the execution of the important work we're undertaking to reposition Bumble App, we have taken a hard look at how we're allocating our resources across our portfolio. After careful consideration, we have decided to sunset Fruitz and Official. These are difficult decisions, but we are confident that honing our collective focus and attention on our core business is prudent at this time. With our strong foundation, talented team, and focus on execution, I'll be returning the reins to Bumble Founder, Whitney Wolfe Herd, next month. Whitney is a true visionary, and it will be exciting to watch her bring her energy and passion to build on what the Bumble team has achieved. This change catalyzes a pivotal moment for Bumble. Online dating has enormous potential, and Bumble's iconic brand is the one to drive the category in the next generation. I'll continue to partner with Whitney over the coming months to ensure that we're not missing a beat since we have so much to do and deliver on. To wrap up, I want to acknowledge the extraordinary progress the team has made over the past year in service of Bumble's mission. I have every confidence in this team's ability to deliver exceptional results for our members. It's been an honor to lead Bumble through this period of transformation, and I am tremendously proud of the important work we accomplished as a team over the past year. I'll be cheering Team Bumble on, and I'm confident that the company is poised to capture the opportunity ahead. Now, I'll turn it over to Whitney to share more about what's in store.

Thank you, Lidiane, and hello, everyone. First, I want to recognize Lidiane for her leadership over the past year in strengthening Bumble's foundation. She reshaped our workforce, rebuilt legacy systems, and instilled strong operational efficiency into the business, all critical building blocks that set us up for a bright future. I'm grateful for her contributions. Thank you, Lidiane. I am deeply honored to be back, and I am ready to lead with fresh energy and a renewed sense of purpose. I have never been more confident in what's ahead for Bumble and in my vision for what we can achieve together in the future. Bumble is a much more mature company today with a dedicated, lean, and talented team. We have a lot of work to do, but we are up to the challenge. As we execute this transition, my focus is on the following key things: the deep love and understanding for our product that only a founder can bring, reinspiring the unique magic of the Bumble brand, and operating with purpose, efficiency, and excellence across the entire company with a particular focus on technology. I look forward to sharing more about our plans after I'm fully back into the role. Over the past year, I have worked at a high level with Lidiane and the team, and we are all aligned around where Bumble is going. Our goal is simple: to make people fall back in love with the process of finding love. Our early work is rooted in a precise understanding of what our members want and what this category needs. More to come. Before I hand it over to Anu, I want to acknowledge her incredible impact over the past 4.5 years. She has played a key role in taking Bumble public, driving international expansion, and strengthening our financial position. Under her leadership, we achieved our first $1 billion revenue year, giving us the foundation to capture the opportunities ahead. And finally, to our investors and our team, thank you. Change is not always easy, but the team's commitment to each other, our mission, and the millions who rely on us has never wavered. Together, we are shaping the future of love and this category. We have the team, the plan, the passion, and the renewed energy to make it happen.

Thank you, Whitney, and good afternoon, everyone. I'll walk through our fourth quarter and full year results and then share more details around our outlook. Unless stated otherwise, all comparisons are on a year-over-year basis. In Q4, total Bumble Inc. revenue was $262 million, coming in at the high end of our outlook. Total revenue included an unfavorable impact from FX of approximately $3 million. Total paying users grew 5% in the quarter to 4.2 million, and our ARPU declined 9% to $20.58. Bumble App revenue was $212 million, above the high end of our outlook and down 4% year-over-year. Revenue was impacted by unfavorable FX of approximately $2 million, which negatively impacted growth by 1 percentage point. Bumble App paying users grew 5% year-over-year to 2.8 million, and the increase in payers was offset by an 8% decline in ARPPU to $25.17, primarily driven by geographic mix shift. Payers declined 57,000 on a sequential basis. Badoo App and other revenue was $49 million, representing a decline of 7%. FX was a $1 million headwind during the quarter and negatively impacted growth by 2 percentage points. Badoo App and other paying users grew 7% to 1.4 million but declined 20,000 sequentially. Badoo App and other ARPPU declined 12% to $11.13. Turning now to expenses, total Q4 GAAP operating costs and expenses were $225 million. On a non-GAAP basis, which excludes stock-based compensation and other non-cash or non-recurring items, total cost and expenses declined 5% to $189 million. The year-over-year decline was primarily driven by lower headcount as a result of the restructuring plan we announced in February 2024. Cost of revenue was $78 million and declined 2%. As a percentage of revenue, cost of revenue was 30% versus 29% in the year-ago period. Sales and marketing expenses declined 7% to $65 million. This represents 25% of revenue versus 26% last year. G&A expenses were $27 million or 10% of revenue compared to $30 million or 11% of revenue last year. Product development expenses were $20 million or 7% of revenue versus $21 million or 8% of revenue in the year-ago period. Adjusted EBITDA for Q4 was $73 million, at the high end of our outlook representing a 28% margin. For the full year 2024, total Bumble Inc. revenue increased 2% to $1.072 billion, in line with the high end of our outlook. Revenue from Bumble App increased 3% to $866 million and we grew paying users by 290,000. Adjusted EBITDA was $304 million representing a 28% margin, up 220 basis points. We reported strong free cash flow of $114 million in 2024, and we ended the year with $204 million in cash and cash equivalents. During the fourth quarter, we repurchased $40 million worth of shares under our current stock repurchase authorization. In aggregate for 2024, we repurchased $214 million worth of shares. At the end of 2024, we had $79 million left in our buyback program and as of today's call, we have $65 million remaining. Now, moving on to our outlook. As we look to the year ahead, the company has an exciting product roadmap planned. Combined with our ecosystem and marketing efforts, we believe that innovation is the key to attracting more users, increasing engagement, and serving as the foundation for our monetization efforts. However, as Lidiane and Whitney have shared, we are still in the early stages of our work. For example, the ecosystem work we highlighted will result in paying user declines near term as we focus on optimizing for the type of users we want on the platform, and our product roadmap will take time to execute. Therefore, we are moving to provide guidance on a quarterly basis, and we will provide updates on our product releases and marketing efforts throughout the year. For Q1 2025, we expect total Bumble Inc. revenue between $242 million and $248 million, representing a decrease of 7% to 10%. Excluding FX, this translates to a decrease between 4% and 7%. We expect Bumble App revenue to be between $198 million and $202 million, representing a decrease between 6% and 8%. Excluding FX headwinds and the loss of one day due to leap year in 2024, this translates to a decrease between 3% and 5%. Q1 Bumble App revenue outlook assumes a sequential decline in paying users in the range of 100,000 to 120,000 as we prioritize our ongoing work to strengthen our ecosystem. While we continue to operate with discipline to deliver solid cash flow, the expected deleverage impact of lower revenue and our investments in product and technology will result in margin contraction in Q1. We estimate adjusted EBITDA will be between $60 million and $63 million, representing a margin of 25% at the midpoint of the range. While we are not providing specific guidance for full year 2025, I wanted to provide some high-level context on our planning assumptions for the year. For the year, we expect unfavorable FX headwinds of approximately 2 percentage points. For Bumble App, rebuilding product momentum through the execution of our roadmap will take at least a few quarters. The work we are doing is designed to improve top-of-funnel and engagement metrics with conversion to follow as our product initiatives and the re-architecture of our monetization model begin to deliver improvement. As Lidiane noted, we have made the strategic decision to discontinue Fruitz and Official. We expect the closure of these apps to result in an approximately $12 million revenue headwind for the year. We expect adjusted EBITDA margins for the year to contract as we navigate revenue headwinds and invest in product and technology to reignite usage and engagement. We remain confident that we will return to expanding margins as revenue growth resumes. As always, and especially in this year of rebuilding, we plan to operate with financial discipline to ensure healthy cash flows. In closing, over the past year, Bumble has established a strong foundation to build upon in the years ahead. We have set a bold product strategy, accelerated innovation, and honed operations and execution. Our commitment to our three strategic pillars, strengthening our ecosystem, driving innovation in customer experience, and enhancing our revenue strategy, has not only advanced our mission of empowering individuals to build healthy and equitable relationships, but also help us to deliver profitable long-term growth for our shareholders. And finally, as I wrap up my time at Bumble, I wanted to say that it has been an absolute honor to serve our team, our members, and our shareholders over these past 4.5 years. I'm grateful for the partnership with Whitney and Lidiane and I am very confident in the bright and exciting future that Whitney and the team have planned for Bumble. And with that, I'll turn it over to the operator for Q&A.

The first question comes from Eric Sheridan with Goldman Sachs. Your line is open. Please go ahead.

Thank you so much for taking the question. Maybe two if I could. Whitney, I would love to get your perspective as you return to the company in an operating role as CEO, what your take is on the broader online dating industry landscape as we get deeper into 2025, and how you see some of the opportunities and challenges facing the industry more broadly? And then maybe a backward-looking question, but as you've put in place some of the measures as a management team to address lower quality or bad actors in terms of profile and user growth, what are some of the key learnings you've had over the last couple of months? And how do those inform some of the continuation of those strategic priorities looking deeper into 2025? Thanks so much.

Thank you very much. This is Whitney, and I'm pleased to answer your first question. It's great to reconnect with all of you. Regarding industry trends, it's crucial to emphasize that the demand for love is currently stronger than it has ever been in modern history. People desire to meet one another; they need relationships and connections. From my perspective, having been involved in dating apps since 2012, this has been my entire life. I've immersed myself in this since I was 22, and now at 35, it has shaped my adult life. Individuals seek love and are turning to technology because it offers a more efficient way to connect without relying on chance. However, while we’ve relied on algorithms and products to facilitate these connections, we may not have fully considered how these products affect people's emotions. Dating should be enjoyable and straightforward. Over time, the ease of connecting has led to feelings of judgment, insecurity, and rejection. When I founded Bumble, a key element of our approach was to eliminate rejection and build confidence. We are entering a new era where it’s essential to integrate that mindset into every aspect of our product. Our current focus is on reinstating confidence, curiosity, and joy in the dating experience while enhancing the fundamental elements of our technology. We are dedicated to ensuring that the entire process matches you with the most suitable people—those you genuinely want to meet in person and have wonderful dates with. We aim to provide the safest and most reliable experience possible, believing that the future of dating lies in helping individuals rediscover the joy of love. That's why I'm back, and this will be our focus in the upcoming chapter. Lidiane has already established a strong foundation by upgrading much of our underlying technology and systems. I will now hand the next question to Lidiane.

Thank you, Whitney. And, Eric, to emphasize the point Whitney made earlier, we have been partnering really closely together this past year. And one of the points that we've been extremely aligned on is the importance of making sure that Bumble is incredibly safe and a trustworthy platform for all of our members. So a big part of our investments this past year has been strengthening our security systems, our safety guidelines, our policies, and our technology to ensure that we are providing a really clean and powerful environment for our users. As we look forward, it's an investment that we want to continue to put a lot of energy into, and I'll say to you, the release coming up now in March, the winter release, has a lot of capabilities and features that are geared towards continuing to ensure Bumble is a leader in trust and safety for our customers, including rolling out ID verification, rolling out Share My Date that gives users more confidence of their location to trusted sources along with review before send. That's really about ensuring customers understand our policies about what it means to be a safe member of our platform. So, we're extremely bullish about continuing to invest in trust and safety, and I'm excited to pass the baton to Whitney as she takes on the team.

Our next question comes from Shweta Khajuria with Wolfe Research. Your line is open. Please go ahead.

Thanks for taking my questions. Let me try two, please. Could you please provide an update on where you are with the CFO search? What your priorities are as you look for a new CFO, given you may be at a different stage as a company than you were back pre-IPO? And then a similar question for Whitney, in terms of is it fair to assume you're in it for the long haul given the recent change in terms of your investment as an operating CEO with the company? Thanks a lot.

Thank you for your questions. This is Whitney. I want to provide a quick update on the CFO search. Hiring a new CFO is incredibly important and is a top priority for us. We are actively interviewing candidates and will keep you posted once we make an appointment. I want to emphasize that this is our main focus, and we are seeking a leader who aligns with the business's current needs and our future goals. Additionally, regarding my tenure, I appreciate the question. I want to start by expressing my passion for Bumble. Although I never intended to return to the CEO role and aimed to stay in my position as Executive Chair, when this opportunity presented itself, I felt compelled to step in. As a co-founder of Tinder and the founder of Bumble at a young age, I have a deep understanding and love for this category. This is not a duty for me; it's an honor that I'm thrilled to embrace. I am committed to this role for the long term, and my goal is to reignite love in this category and improve people's lives globally. You can expect my full commitment to this mission without any time limits.

We now turn to Cory Carpenter with JPMorgan. Your line is open. Please go ahead.

Great. Thanks for the questions. I have two. Maybe for Lidiane, could you just expand on the Discover tab feature? I think this is the first time you mentioned that as being part of the winter release, so we'll be curious to hear more about that and what you're seeing in testing. And then secondly, just any update you can provide us on what you are seeing on top of the final trends following the fall product release? Thank you.

Thank you. Let's talk a little bit about Discover. We're really excited about introducing Discover as part of our winter release. This is a new tab on the Bumble app that's really focused on helping users discover one another through shared interests. And for us, there have been a couple of key focuses, if you recall what I've been talking about these last few quarters around our transformation of customer experience and reimagining our strategy for revenue growth. Discover is aimed at two major things. It's adding customer experiences that focus on relevance so customers come to Bumble to find relevant people. Discover really helps accelerate that discovery. But it also is a feature that is free for users everywhere around the world, and it's both to help us reenergize the public funnel for us, especially with younger users, and to give that path to freemium. So we're really excited about the early signs of our testing. We rigorously tested this feature in various markets. We're seeing great engagement. Users that are using Discover today are getting more matches. We know it's providing the value that we want, and we're excited to continue to evolve it over the year. And with regards to the fall release, that release was really aimed at engagement and success as well. What we have seen from it is high interest in the filters, interest filters, which have become a foundation for the Discover capabilities. So really incredible rapid adoption there and an increase in success for our users as well. What that has helped us is really focused on near-term engagement, which we know will drive longer-term revenue reacceleration. So we're optimistic based on what we've seen so far and are observing exactly the right signs for the direction of the company.

Our next question comes from Andrew Marok with Raymond James. Your line is open. Please go ahead.

Thanks for taking my question. We've seen some kind of anecdotal data floating around that young people especially are just taking longer, maybe a little bit more hesitant to enter the dating market altogether. And I guess as you're thinking about that, how does that impact your plans for monetizing these users as you start to get them in, and you start to see, to your point, the engagement from the fall release and the winter release, like you were talking about? Thank you.

Yeah, we're aiming to be really deliberate here. One, we want to make sure that users across all age groups, but certainly younger users, are engaged and that we're reigniting the top of the funnel, especially in our mature markets, and we aren't seeing a delay. What we have seen from our research in the testing that we have done for fall and now winter is that users are looking for two big things: relevant users. So the work in both innovation and ecosystem that we have been focused on is incredibly aligned with these needs, as well as ensuring safety. That's a significant aspect of our work across this release. People want to know that they're going to be safe on our platform and that they will find users that are relevant to them. Those are the key indicators for younger users. I'm really confident that we're on the right path given the data that we have seen.

Our next question comes from Nathan Feather with Morgan Stanley. Your line is open. Please go ahead.

Hey, everyone, thanks for the question. I want to dig a little bit more into the guidance at the midpoint. The Q1 guide implies a 25% or so EBITDA margin. It's a pretty big step down compared to Q4. I guess, can you give a little bit more color on what's driving the contraction? What are the areas of investment that are pushing that? And given you talked about further investments in the year, how should we think about the slope of margin over 2025? Thank you.

Sure, I can address that. We anticipate that adjusted EBITDA margins will decrease this year. While we are not giving specific guidance for the entire year, we have shared the Q1 figures, which indicate a margin of about 25% at the midpoint. A significant factor for this decline is the revenue headwinds affecting EBITDA. Additionally, we are making intentional investments in product and technology this year to boost usage and engagement. The initiatives we mentioned regarding our product vision, safety measures, and ecosystem development reflect our commitment to investing in both personnel and platform resources to enhance these areas. This is the primary investment strategy for 2025, as indicated in our guidance. We will also maintain a disciplined approach towards other spending areas, including marketing, which encompasses both ongoing efforts and expenditures linked to significant product launches. We intend to be very careful about efficiency and return on investment in marketing. Across the business, our goal is to exercise strict discipline. We are confident that as revenue growth resumes, we will return to expanding margins, although we do expect contraction in 2025.

Our next question comes from Ygal Arounian with Citi. Your line is open. Please go ahead.

Hey, good afternoon. Maybe, Whitney, just as you step back in and there's been a lot of changes on the strategy front, any changes to how you think about the strategy going forward? And maybe you can also talk about that in the context of there's been a number of executive-level changes over the course of the last year or so. Is everything in place the way you think it should be at this point or is there more work to do?

Thanks so much for the question. So I think shareholders should have peace of mind in the fact that Lidiane and I have been super aligned from day one. When she stepped into the role, we made a commitment to each other that we were going to be a customer-first company. That is the most important thing that we can be. And our members honestly deserve better than what this category has been giving them over the last several years. So we have been on a joint and dual quest the last year together under her leadership to make sure that we are solving customer pain points. That is the strategy. There's not some off-the-beaten-path strategy. It's quite simple: it is getting back to basics and solving the problems that are getting in the way of our members finding love and love that is actually fruitful, that brings them joy and makes them feel good. It's not about just getting people matches and leaving dead-end conversations; that's not what matters to us. So, moving back to strict customer centricity is the roadmap. That is the plan. So much of what you've just heard Lidiane talk about regarding the winter release, it's all about what the customer needs and wants, getting back to being the most safe, trusted platform for people to come and meet new people. So, the long and short of it is that the strategy is not changing from focusing on delivering the most value, the most confident, curious, joyful experience we can to our members. And that is the number one priority. That is not a departure or a pivot. We are super aligned there and that's a continuum. Regarding the team, another exciting update is that Lidiane has really increased the talent at the company. Over the last few quarters, there have been layoffs, and we've moved to a very strict performance model. It is the best players who come and do great work and stay. We are really diligent about this, and I feel proud and excited by the folks Lidiane has recruited both at the top level and throughout the organization. This process is not one-stop; there will always be opportunities to introduce experts in their field to ensure we have the best team players. But I want everyone to know I’m coming back as a real operating CEO, focused on excellence, efficiency, with a lean, passionate, dedicated, hardworking team that is all on the same page. We are one team rowing in the same direction on one roadmap, and I am really excited about the opportunity ahead. I wouldn't be here if I wasn't. I look forward to sharing more next quarter when I'm back in the seat.

Okay, great. That's really helpful, thanks. And then just one on the third strategic priority on enhancing the revenue strategy. I know that's a little bit further down the line and we're focused more on engagement right now. But maybe just any help thinking about that path from engagement to monetization, how you're thinking about it today, or if it's really just get the engagement down and then focus on the monetization later? Thanks.

Thank you. As you've been hearing from me, there are three pillars to our transformation: health of our ecosystem, innovation, and revenue strategy. Those first two pillars are very much about strengthening the foundation and getting engagement right. That's the reason you've been hearing so much emphasis on that over the last few quarters. But in parallel to that our revenue strategy effort is focused on ensuring that we have a thoughtful balance across each tier of our subscriptions, ensuring that we have a great free experience, that our paywalls are in the right places, and that we are driving conversions at the right moment for our users so that not only do they come to the app, they pay, and they feel valued for their subscription. So, that ongoing work is already happening. It’s really important for us to get the foundation of engagement right because we know that conversion and revenue growth is the next step in this process. We are testing various frameworks regarding that rebalancing, and I’m excited for what Whitney is bringing in regarding the added value across the board on the platform. So, there is a lot of focus on the revenue strategy for the company moving forward.

Our next question comes from John Blackledge with TD Cowen. Your line is open. Please go ahead.

Hi there, it's Logan on for John. Could you talk us through puts and takes on the Q1 Bumble App guidance in terms of how you're thinking about payer conversion, notably as you focus on the user ecosystem? And could you discuss any short-term negative impacts from new safety features, if any? Thanks.

Sure. Hey, Logan, I can take that. So, just to reiterate what we expect for Q1: for total revenue, we are guiding on an ex-FX basis to decline between 4% and 7%. For Bumble App, excluding FX and the impact of losing one day due to last year being a leap year, we are providing an outlook of revenue declining between 3% and 5%. If you look at our Q4 2024 numbers for Bumble App, we declined at 4%. So we are effectively saying we are declining at levels similar to where we were in Q4. In terms of the puts and takes for payers, we are also guiding to a sequential decline in paying users in the range of about 100,000 to 120,000. This decline encompasses the work we're doing to strengthen our ecosystem, which includes our safety efforts and how we are thinking about what kind of users we bring onto our platform. For the last two quarters, we've discussed what strengthening our ecosystem means. It's not just about weeding out bad actors; it's about getting the right people on the ecosystem that can match with other relevant individuals. There's a lot we are doing from a marketing perspective that also impacts this transition. To reinforce what Lidiane mentioned earlier, our focus is on ensuring we strengthen our top-of-funnel and engagement metrics. This will lead to strengthening conversion and revenue. So, that outlines the arc of the work we’re doing. There are a lot of things happening in parallel. Like Lidiane mentioned, we are also focusing on our revenue strategy. But in the short term, we want to focus on getting our top of funnel back to growth. Some third-party data numbers between Q4 and Q1 show positive signs; we've seen stabilization of metrics and green shoots with our tests. Obviously, it's still early days, but it's encouraging to see the progress because we believe we are moving in the right direction overall.

Our next question comes from Robert Coolbrith with Evercore ISI. Your line is open. Please go ahead.

Great, thank you. Wanted to follow up on an earlier question. It seems like there's been a reset or ongoing reset at Bumble and more broadly across the category to enhance consumer surplus or the user value proposition. Do you think that's a temporary change around maybe the Gen Z generational shift, or do you think it's perhaps more structural, just given that we've had years in some cases of micro-adjustment or optimization of things like paywalls, swipe limits, and similar?

Yeah, I'm happy to jump in here. This is Whitney. Thanks for the question. So I think here's what happened: online dating really took off for the millennial audience in 2012. It was explosive because the demand is there, and I stand by this. The demand is still there. What happened was there was never really a moment for, and I'll just speak for ourselves, for us to pause and reset and say, are we still delivering the most value to the customer? What are they here looking for? Okay, they're here to be matched with someone great. Are we doing that to the best of our ability? What are the struggles our members are encountering? You kind of alluded to this by saying it was a game of cat and mouse: a new feature here, a new filter there, a new paywall there. The time has now come to say, you know what, we have a great business. We serve one of the most important needs on earth: helping people find love. I mean, truly, this is why I'm here. What is more important than that? Helping others connect is paramount. So I think that this is the moment. And Lidiane has been deep in the trenches of this, leading this reset and saying, let’s look at this house of love and understand the foundational work that needs to be reset. When people come here, we want them to feel loved, safe, and see who they want to see. This is a reset; it’s about bringing back the right people to the right environment and really giving them the opportunity to connect in a fulfilling, modern way. I don't think this is merely generational; love is universal. It doesn't matter how old you are or where you come from. We all want to meet that special person. This is our opportunity to see how we can best get you there. We are really working backward from customer pain points. I’m incredibly confident that the work ahead of us, which is what I'm stepping back in to guide, is about fulfilling the demand to help people find love in the safest, most compatible, and joyful way. This is truly what we have ahead of us, and I think it’s going to be a huge reset. I don’t see it as a forever reset though; it's hard work, foundational work. It's a remodel, not a rebuild. We don’t need to tear it all down; it’s about enhancing what's already there; it brings significant value. I mean, we have countless love stories and connections due to our platform. So, watch this space — I’m thrilled to detail more when I’m back in my leadership role in a few weeks, and you’ll hear from me at the next earnings call. Thank you so much.

Hi, thanks for the question. This is Eli on for Ben. With the exit of Official and Fruitz and your continued focus on product innovation with dating, I'm curious to hear your thoughts on products beyond dating. How is the adoption of Bumble BFF trended and what learnings have you been able to leverage from Geneva that could help with Bumble BFF scale?

Thank you, Eli. I can get started on this one. One of the most exciting things about Bumble is that it has always stood for more than romantic love. To Whitney's point, love is the most important thing, and we've learned over the years with BFF that friendship love is critical in people's lives. So we're really excited about continuing to focus our energy not only on reimagining the dating category with our core businesses, but also on putting resources toward the opportunities we see for BFF in Geneva with community. I’m truly excited about that. As you know, Whitney originated BFF and is incredibly passionate about it, so I'm eager to see her carry the torch moving forward.

Thanks, Lidiane. I might just add a couple of quick points. So, what's really fascinating about BFF in particular and friend-finding is this is the most relevant entry point for the broader category of love. Let’s momentarily get away from labeling it as merely a dating app. When you look at the post-grad audience, which is Gen Z, they are eager — and I abhor to use this term, but they are quite literally desperate to find friends. They have left a super dense environment where they're surrounded by friends and gone into the real world. They want to meet people and connect socially. What's exciting about the extensibility and reach, if you will, of our brand is that it is not associated merely with a dating app. Bumble lends itself to a more comprehensive lifestyle brand. Women, in particular, have no issues with joining our product, even when they’re in a romantic relationship, since they can find friends. This on-ramp opportunity is distinct to us. Other category players don't have the same opportunity because they lack the lifestyle brand like ours. Therefore, we aim to target these Gen Z individuals eager for connections; it’s an opportunity to ramp them back into dating. We know that most individuals in their 20s find that their first relationship isn’t typically their forever relationship. So when someone is using our product looking for friends and then goes through a breakup, we can ramp them into the love category more smoothly. There’s a flywheel here, and we are excited about how we can leverage BFF both with women in America and as a new opportunity in markets that are hesitant to adopt a dating app. So more to come, and stay tuned!

Our next question comes from Curtis Nagle with Bank of America. Your line is open. Please go ahead.

Great. Thanks so much for taking the question. Just one for me. Your largest competitor noted, I think, in their last call they'd seen a pickup in peak season dating trends. Did you observe anything similar? And I guess if so, have they faded or how have they faded?

Can you please repeat the question from the very beginning?

Yeah, the question was a bit fuzzy at the beginning for us for some reason.

Yeah, sorry about that, Whitney. Might be my headset. But the question was your largest competitor had noted they've seen a pickup in peak season dating trends, and just asking if you'd seen something similar and if so, you know, have they faded or if you know, have they faded? That's the question.

Lidiane, why don't you take that since you're the CEO? Thank you.

Thank you. What we are seeing is, as Whitney just mentioned, a general interest, especially among younger users, to start more casual first—to start with friendship, to find an on-ramp that is less intimidating—which is why we're very excited about having a broader set of products that can serve that user base. But we continue seeing important trends in finding connections that are relevant while ensuring that safety is top of mind for platforms like ours. For us, what we're seeing is how pertinent it is to have a women's-first focus, and that has always been such an important priority and mission for Bumble. So all in all, we're seeing great opportunity for the company moving forward. As Whitney mentioned at the start of this Q&A, love has not been as relevant as we see it today. I'm excited to see the company capture the opportunity ahead.

Ladies and gentlemen, this concludes our Q&A and today's conference call. We'd like to thank you for your participation. You may now disconnect your lines.