What Happened?
Shares of online dating app Bumble (NASDAQ: BMBL) fell 17.7% in the morning session after the company reported a significant drop in paying users for its third quarter and issued weak guidance for the upcoming quarter. The online dating app's third-quarter sales fell 10% year on year to $246.2 million, meeting Wall Street's expectations. However, a key point of concern was the 16% drop in paying users, a loss of about 680,600 people from the same period in the previous year. Looking ahead, Bumble's revenue forecast for the next quarter was $220 million at the midpoint, which fell short of analyst estimates. The company also guided for lower-than-expected adjusted EBITDA, signaling further challenges.
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What Is The Market Telling Us
Bumble’s shares are very volatile and have had 29 moves greater than 5% over the last year. But moves this big are rare even for Bumble and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 2.8% on the news that blockbuster quarterly results from tech titans Apple and Amazon boosted investor confidence, supported by impressive earnings from key cloud and crypto leaders, Cloudflare and Coinbase.
Amazon's shares surged after reporting that its cloud computing division, Amazon Web Services (AWS), saw revenue jump 20% year-over-year to $33 billion. This accelerated growth is largely attributed to the high demand for computing power required for artificial intelligence applications. Apple also contributed to the positive sentiment, topping its own quarterly estimates and forecasting a record-breaking holiday quarter. The strong performance from these industry leaders has lifted the broader market.
Impressive results from key cloud and crypto leaders, Cloudflare and Coinbase strongly supported the broader tech momentum. Cloudflare reported a "beat and raise" quarter with revenue soaring 30.7% year-over-year to $562 million and billings jumping nearly 40%, signaling strong future growth. Its non-GAAP operating margin expanded to 15.3%, and Free Cash Flow grew by nearly 60%, confirming management's efficient execution, leading the company to raise its full-year EPS guidance. Concurrently, Coinbase's third-quarter results also significantly topped estimates, driven by better-than-expected trading revenue and the increasing adoption of its stablecoin, USDC. The company reported $1.87 billion in revenue and an adjusted EPS of $1.44, while its strategic acquisition of Deribit advanced its "Everything Exchange" vision, resulting in over $840 billion in derivatives trading volume and aggressive expansion across the crypto market.
Bumble is down 47.9% since the beginning of the year, and at $4.15 per share, it is trading 54.2% below its 52-week high of $9.08 from November 2024. Investors who bought $1,000 worth of Bumble’s shares at the IPO in February 2021 would now be looking at an investment worth $59.09.
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