Bumble(BMBL) - 2024 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents Bumble Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, with detailed accounting policy notes Condensed Consolidated Balance Sheets As of June 30, 2024, total assets decreased to $3.52 billion from $3.63 billion at year-end 2023, driven by reduced cash and equivalents Condensed Consolidated Balance Sheet Data (in thousands) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $286,664 | $355,642 | | Goodwill | $1,584,546 | $1,585,750 | | Intangible assets, net | $1,455,658 | $1,484,290 | | Total assets | $3,524,240 | $3,625,127 | | Liabilities & Equity | | | | Total current liabilities | $176,193 | $244,909 | | Long-term debt, net | $613,194 | $615,176 | | Total liabilities | $1,226,242 | $1,287,854 | | Total shareholders' equity | $2,297,998 | $2,337,273 | Condensed Consolidated Statements of Operations Q2 2024 revenue grew to $268.6 million, with operating earnings surging to $52.0 million and diluted EPS increasing to $0.22 Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $268,615 | $259,735 | $536,390 | $502,683 | | Operating earnings (loss) | $51,954 | $21,171 | $100,744 | $30,235 | | Net earnings (loss) | $37,686 | $9,349 | $71,559 | $7,020 | | Net earnings (loss) attributable to Bumble Inc. shareholders | $27,395 | $6,753 | $52,012 | $5,142 | | Diluted earnings (loss) per share | $0.22 | $0.05 | $0.41 | $0.04 | Condensed Consolidated Statements of Cash Flows Net cash from operations for H1 2024 was $35.3 million, with $101.0 million used in financing, resulting in a $69.0 million net cash decrease Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $35,345 | $56,100 | | Net cash used in investing activities | ($4,531) | ($19,087) | | Net cash used in financing activities | ($101,003) | ($54,700) | | Net decrease in cash and cash equivalents | ($68,972) | ($22,223) | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail accounting policies, including $19.8 million in restructuring charges, a $450 million share repurchase program, and a $40.5 million litigation provision - In February 2024, the company adopted a Restructuring Plan to reduce its global workforce by approximately 350 roles, expecting to incur total charges of $20.0 million to $22.0 million. For the six months ended June 30, 2024, it incurred $19.8 million in restructuring charges[34][86] - The share repurchase program authorization was increased to $450.0 million in May 2024. As of June 30, 2024, $208.7 million remains available for repurchase[24][82] - As of June 30, 2024, the company has accrued a provision of $40.5 million for probable future obligations related to various litigations, including matters concerning the Illinois Biometric Information Privacy Act (BIPA)[70] - On July 1, 2024, Bumble acquired Geneva Technologies, Inc., a social networking platform, for an aggregate purchase price of approximately $17.0 million in cash[70] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 2024 financial performance, noting 3.4% revenue growth driven by user increases, offset by lower ARPPU, and the impact of restructuring on expenses Key Operating and Financial Metrics Q2 2024 saw 13.9% growth in Total Paying Users to 4.14 million, but Total ARPPU declined 8.0% to $21.37 Key Operating Metrics (Q2 2024 vs. Q2 2023) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Total Paying Users (thousands) | 4,138.6 | 3,633.3 | +13.9% | | Bumble App Paying Users (thousands) | 2,817.2 | 2,457.8 | +14.6% | | Total Average Revenue per Paying User | $21.37 | $23.23 | -8.0% | | Bumble App Average Revenue per Paying User | $25.79 | $28.21 | -8.6% | Results of Operations Q2 2024 revenue grew 3.4% YoY, while operating expenses, particularly G&A and Product Development, significantly decreased due to restructuring-related compensation reductions - Bumble App Revenue grew to $218.0 million in Q2 2024 from $208.0 million in Q2 2023, an increase of 4.8%, driven by a 14.6% increase in paying users[97] - Badoo App and Other Revenue decreased slightly to $50.6 million in Q2 2024 from $51.8 million in Q2 2023, a 2.3% decline, primarily due to lower ARPPU[97] - Product development expense decreased by $20.5 million (56.7%) in Q2 2024 compared to Q2 2023, mainly due to an $18.0 million decrease in stock-based compensation from forfeitures[102] - General and administrative expense decreased by $7.0 million (16.1%) in Q2 2024, driven by an $11.0 million decrease in stock-based compensation and lower legal fees[101] Liquidity and Capital Resources As of June 30, 2024, cash and equivalents totaled $286.7 million, with $101.0 million used in financing activities, primarily for share repurchases - Cash and cash equivalents stood at $286.7 million as of June 30, 2024, a decrease of $69.0 million from year-end 2023, primarily due to share repurchases[113] - During the six months ended June 30, 2024, the company repurchased 5.3 million shares of Class A common stock and 2.0 million Common Units for a total of $84.4 million[113] - The company made cash payments of $15.2 million in H1 2024 related to its Restructuring Plan[113] Item 3. Quantitative and Qualitative Disclosures About Market Risk Primary market risks include foreign currency exposure, with 47.3% of Q2 2024 revenue from outside North America, and interest rate risk on $618.9 million in variable-rate debt - Revenue outside of North America accounted for 47.3% of consolidated revenue for the three months ended June 30, 2024. A hypothetical 10% change in British Pound and Euro exchange rates would have impacted H1 2024 revenue by $12.4 million[120][122] - The company mitigates interest rate risk on its variable-rate debt by using interest rate swaps with a total notional value of $350.0 million, effectively fixing the variable rate element at 3.18% until January 2027[123] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2024, with no material changes to internal controls - Management, including the CEO and CFO, concluded that as of June 30, 2024, the company's disclosure controls and procedures are effective[124] - There were no changes in internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[125] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various legal proceedings, including BIPA-related litigation, with a $40.5 million provision for probable losses as of June 30, 2024 - The company is subject to various legal proceedings, including matters related to consumer protection, intellectual property, and employment[64][125] - A proposed class action settlement for lawsuits related to the Illinois Biometric Information Privacy Act (BIPA) was preliminarily approved on June 6, 2024[67] - As of June 30, 2024, the company determined a provision of $40.5 million reflects its best estimate of probable future obligations for its litigations[70] Item 1A. Risk Factors This section refers readers to the comprehensive risk factor discussion in the company's 2023 Form 10-K, with no new or updated risks presented - For a discussion of risk factors, readers are referred to Part I, "Item 1A—Risk Factors" of the company's 2023 Form 10-K[126] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company updated its share repurchase program, increasing authorization to $450.0 million, with $208.7 million remaining available as of June 30, 2024 - The Board of Directors increased the share repurchase program authorization from $300.0 million to $450.0 million in May 2024[126] - The company did not purchase any shares under the program during the second quarter of 2024[126] - As of June 30, 2024, $208.7 million remained available for repurchase under the program[126]