Bumble Inc Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
Bumble Inc. reported a Q3 2025 revenue decline of 10% year-over-year, primarily due to a strategic reset prioritizing quality over quantity, which led to a near-term reduction in paying users and marketing spend. The company is investing in AI-driven product innovation, including a new cloud-native platform and a standalone AI product, while expanding Bumble BFF. Despite short-term headwinds, early indicators show improving retention and ARPPU growth. The company also announced the purchase of its Tax Receivable Agreement rights for $186 million, eliminating a significant liability and improving future cash flows.
Key financial results
Total revenue for the third quarter was $246 million, a 10% decline from a year ago.
Net income was $52 million.
Adjusted EBITDA for the quarter was $83 million, up 1%, representing a margin of 34%, up from 30% in the year-ago period.
Adjusted EBITDA included a negative impact of $12 million related to prior period indirect tax obligations.
Adjusted EBITDA margin is temporarily elevated due to the cadence of marketing spend and organizational realignment.
Q3 cash flow from operations was $77 million compared to $93 million in the year-ago period.
Business segment results
Bumble App revenue was $199 million, down 10% year-over-year.
Badoo App and Other Revenue declined 11% to $47 million.
The decline in paying users was driven primarily by trust and safety work and a reduction in marketing spend, contributing approximately 80% of the decline in paying users on a year-over-year basis.
Capital allocation
The company repaid $25 million of its term loan in the third quarter.
A special committee of the board agreed to a transaction where the company will purchase all parties' outstanding TRA rights for approximately $186 million.
This transaction eliminates the company's TRA liability in full, improves future cash flows, and enhances strategic flexibility.
The TRA transaction is being funded with available cash.
As a result of the TRA transaction, the company no longer plans to pay down $25 million of its term loan as previously discussed.
Industry trends and dynamics
The desire for love and relationships is universal, indicating a strong demand for dating services.
Historically, most dating products skewed male, leading to an uneven experience for women.
People want to trust who they're meeting, desire better quality matches, and seek more authenticity in dating apps.
The number one complaint with dating apps is the desire for more trust, safety, and authenticity.
The second largest complaint is not seeing who they want to see, highlighting the importance of matching technology.
Competitive landscape
Bumble's initial success was built on creating trust with women, which became its moat and led to a healthier, more balanced member base.
The brand is identified with putting women first, which is considered its biggest strategic asset.
Building critical mass and a trusted double-sided marketplace is incredibly difficult, giving Bumble a unique opportunity and right to win against new AI-focused dating apps.
Growth opportunities and strategies
The company is undergoing a quality over quantity reset, deliberately trading near-term volume for quality to build long-term trust, stronger engagement, and sustainable growth.
The August update to Bumble Date focused on trust and safety, introducing richer profiles, stronger verification features (phone, selfie video), and a new coaching hub.
Investments in AI are being made to supercharge the matching and recommendation engine, delivering more quality matches.
An AI-first, cloud-native platform is expected to launch in mid-2026 to personalize at scale, enhance safety, and continuously improve the member experience.
A standalone AI product is being built, which is expected to be unique in the market, offering "precise search" capabilities.
Bumble BFF is expanding beyond dating to become a full platform for connection, combining friend matching with group management and event planning, and is performing well with increased retention.
BFF's primary audience is Gen Z and millennial women, with plans to expand group and community discovery in 2026.
The "For the Love of Love" campaign led to a 4-percentage point improvement in awareness among single women in the US aged 22 to 45.
The company is focused on improving the mix of engaged, approved members on its platform and reducing noise through its beehive fit framework.
Targeted performance marketing is being reinstituted to attract high-quality members.
Financial Guidance and Outlook
For Q4, total revenue is expected in the range of $216 million to $224 million, representing a year-over-year decline of approximately 17% to 14%.
Bumble App revenue for Q4 is expected in the range of $176 million to $182 million, representing a year-over-year decline of approximately 17% to 14%.
Adjusted EBITDA for Q4 is expected to be $61 million to $65 million, representing a margin of approximately 28% to 29%.
The outlook reflects continued attrition in active and paying members in Q4 due to higher quality standards and the full quarter impact of August initiatives.
The rate of sequential paying user declines is anticipated to improve beginning in early 2026.
Early indicators suggest improving retention and increasing average revenue per paying user (ARPPU).
The adjusted EBITDA margin is expected to revert closer to historical norms as the company completes specialized hiring, reinstitutes brand and targeted user acquisition spend, and invests in product and the new tech platform.
Direct billing tests continue to progress, with nearly all US members having some form of direct billing available, which is expected to continue refining in Q4 and provide cost of revenue benefits.
Marketing spend is not expected to return to pre-transformation levels, as the focus is on efficiency.
Controlled hiring, primarily in AI, product, and engineering roles, will continue into Q4 and beyond.
The company's thesis is that a better member experience will result in higher retention and drive members' perception of value, leading to increasing revenue.
Approved members show significantly higher engagement and monetize at more than twice the rate of improved members.
