BMBL Q1 Earnings Call: Focus Shifts to Member Quality and Profitability Amid Revenue Decline

Online dating app Bumble (NASDAQ:BMBL) met Wall Street’s revenue expectations in Q1 CY2025, but sales fell by 7.7% year on year to $247.1 million. On the other hand, next quarter’s revenue guidance of $239 million was less impressive, coming in 1.8% below analysts’ estimates. Its non-GAAP profit of $0.22 per share was 40% below analysts’ consensus estimates.

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StockStory’s Take

Bumble's first quarter results reflected a deliberate pivot towards enhancing member quality and refocusing the business on sustainable, long-term growth. Founder and CEO Whitney Wolfe Herd emphasized the company's renewed commitment to high-quality user experiences, noting that the pandemic-era strategy of prioritizing rapid user growth through performance marketing led to a decline in match quality and overall member satisfaction. Wolfe Herd stated, “When you scale for scale’s sake, the quality experience of finding matches can start to degrade.” Management attributed the current trends to intensified efforts to remove bots and low-quality profiles, as well as investments in trust and safety features, all of which are intended to rebuild the brand’s reputation for authentic connections.

Looking ahead, Bumble’s forward guidance is shaped by a restructuring of its user acquisition strategy and ongoing cost control initiatives. Management expects short-term headwinds—including a reduction in paying users—as they accelerate efforts to improve the member base’s quality and shift away from performance marketing. Wolfe Herd outlined that, “We have to shrink a little bit before we grow,” signaling a willingness to accept near-term declines to reset the platform for future growth. The company also plans to leverage AI-driven personalization, roll out new product updates, and focus on member engagement metrics rather than headline payer numbers. CFO Ron Fior added that ongoing cost savings and a return to organic marketing initiatives are expected to bolster profitability over the coming quarters.

Key Insights from Management’s Remarks

Management cited the need to rebuild member trust and product relevance after years of prioritizing volume over user quality. The shift has led to a strategic overhaul of both operations and technology.

• Member base overhaul: Bumble intensified efforts to remove bots, scammers, and low-quality profiles, aiming to foster a more trusted and relevant community. Wolfe Herd explained that user experience and word-of-mouth growth suffered when the platform prioritized rapid scaling over genuine connections, so the focus has returned to cultivating high-quality interactions.
• Algorithm modernization: The company is accelerating updates to its personalized matching algorithm by integrating advanced AI and machine learning. Early testing has shown improved relevancy and match rates, which management believes will become a key differentiator as these updates are rolled out.
• Reduced marketing spend: Bumble has significantly cut performance marketing and non-organic user acquisition spend, reallocating resources towards organic and brand marketing. Interim CFO Ron Fior noted a $20 million reduction in marketing budget for next quarter, with further cuts anticipated as the company seeks to attract more engaged users.
• Leadership and organizational changes: Since Wolfe Herd’s return as CEO, new senior leaders in product, technology, communications, and legal have joined the company, including a new CTO. The search for a permanent CFO continues, with the interim CFO remaining in place until then.
• Cost optimization: The company identified $15 million in near-term operating cost savings, primarily through restructuring and efficiency measures. These savings are expected to be realized largely in the second half of the year, supporting Bumble’s plan to maintain profitability despite anticipated top-line pressure.

Drivers of Future Performance

Bumble’s outlook is shaped by efforts to improve member quality, leverage AI in matching, and maintain cost discipline while facing near-term user and revenue headwinds.

• Transition to quality over quantity: Management expects a near-term reduction in paying users as the company eliminates low-quality and unverified accounts, but anticipates this will lead to higher engagement and increased monetization potential over time as user trust improves.
• AI-powered product enhancements: The company is investing in AI-driven features to boost match relevance, user profile quality, and in-app safety. Wolfe Herd detailed plans to launch a new “Discover” tab and member coaching hub, both intended to strengthen user engagement and lay the groundwork for future product monetization.
• Continued cost control: With a focus on operational efficiency, Bumble will maintain reduced marketing and operating costs in the near term. While some of these savings will be redirected to organic brand marketing later in the year, management believes ongoing discipline will help protect margins during the transition period.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) the impact of quality-focused user curation on engagement and retention, (2) the effectiveness of AI-driven features in improving match outcomes and user satisfaction, and (3) progress on cost savings and organizational changes. The success of upcoming product launches, including enhancements to Bumble BFF and the coaching hub, will also serve as important indicators of execution.

Bumble currently trades at a forward EV/EBITDA ratio of 2.3×. At this valuation, is it a buy or sell post earnings? See for yourself in our full research report (it’s free).

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