Bumble had a lot of good things to say with its latest earnings Wednesday, backed by climbing sales and a rise in paying users, WSJ reports.
Numbers To Consider:
- Fourth-quarter revenue soared by 31% to $165.6 million, slightly surpassing analysts’ estimates.
- Direct revenue from the Bumble app flew up 47% to $105.8 million. Revenue from Badoo, the company’s European and Latin America-focused dating product, improved by 11% to $59.8 million.
- Bumble’s total paying users across apps rose to 2.7 million (+33%), and the average revenue per paying user slightly increased to $20.02 (for Q4) from $19.99 in the year-ago period.
- Bumble projects revenue in 2021 to fall between $716 million and $726 million after pulling in a full-year revenue of $542.2 million in 2020.
- Its shares closed at $62.91 on Wednesday. It went public in February with an initial price of $43 per share.
The Backstory: CEO Whitney Wolfe Herd founded the company in 2014 “to turn the traditional dating dynamic on its head,” creating a system where women have to act first. It has evolved and diversified its features. Wolfe Herd also co-founded Tinder beforehand.
- Match, which owns Tinder, Hinge and OkCupid, unsuccessfully tried to acquire Bumble and later sued the company for allegedly infringing patents.
The Rub: The numbers are encouraging, though Bumble is taking a cautious approach to the pent-up demand from people staying inside during the pandemic.
- Bumble does have to quell rising costs and expenses. In this past quarter, it lost $26.1 million compared to a profit of $17.2 million from the year-ago period.
From Morning Cents March 11, 2021:
At $80 per share, Bumble ($BMBL) trades at a $14.9 billion market capitalization and a $15.3 billion enterprise value.
If you assume they return to pre-pandemic growth of 36% in 2021 and maintain their 73% Gross Profit margins, then the company is trading for 28x forward Gross Profit. If you assume they improve EBITDA margins to 30%, they’re trading at 68x forward EBITDA.
This is quite a rich valuation for a company growing at 15% currently without clear network-effect driven dominance. But then again, $ABNB and $DASH are trading at even higher valuations…