I=10
Bumble’s Q3 2025 revenue tops expectations, earnings in line; Q4 guidance disappoints
- Bumble’s Q3 2025 (press release) revenue fell 10% y/y to $246.2 million, above analysts’ estimate of $244.8 million and in-line with management’s upper point guidance, adjusted EBITDA was $83.1 million (+0.6% y/y), slightly below management’s upper point guidance of $84 million while diluted EPS was $0.33, in line with analysts’ estimate.
- Total payers fell 16% y/y to 3.58 million, significantly below my estimate of 3.77 million at the midpoint while total average revenue per paying user (ARPU) rose 6.6% y/y to $22.64, driven by ARPU at Bumble app which rose 10.5% to $28.27.
- It guides Q4 2025 revenue in the range of $216-224 million (-17.5% to -14.5% y/y), significantly below our estimate of $237 million and adjusted EBITDA in the range of $61-65 million (-15.9% to -10.4% y/y).
- The company announced amendment to its Tax Receivable Agreement (TRA) with Blackstone and Whitney Wolfe Herd, resulting in a $186 million settlement to terminate all payment obligations under the TRA- a process that is expected to improve Bumble’s cash flow, reduce long-term obligations, and provide strategic flexibility for future growth initiatives.
- In the earnings call, management said trust and safety measures as well as reduction in marketing spend contributed 80% decline in payers (Real Time Earnings Call Notes-Notion).
- Management also said in the earnings call that it expects sequential decline in paying users to improve in early 2026 as it largely complete their trust and authenticity work.
- CEO Wolf Herd said they have started internal testing of the standalone AI product app that is powered by deep human connection but didn’t not provide the date of its launch.
Assessment
While Q3 2025 revenue and earnings met expectations, I don’t like that revenue was driven by growth in ARPU, especially at this time when industry sentiment is negative and the company is pursuing trust and safety measures. ARPU growth may not be sustainable in the near-term.
The fact that 80% of the decline in payers was due to trust and safety measures and decline and marketing spend makes me a bit optimistic that next year’s payer decline might improve. I also like that they continue to reduce costs, helping compensate for some or most of the revenue decline. For instance, 2025 revenue could decline by $100 million, but that will be largely compensated by cost savings.
However, execution risk remains high. Earlier reports indicated that they plan to launch the Stand-alone AI App at the end of 2025 but the fact that she didn’t indicate the timeline in Q3 call signals there may be delays.