(Reuters) – Bumble forecast fourth-quarter revenue below Wall Street estimates on Tuesday in a sign that sticky inflation and growing competition were weighing on user spending on its dating apps, sending shares down more than 6% in extended trading.
The lackluster forecast comes a day after Bumble said its founder Whitney Wolfe Herd would step down as CEO, the second major executive departure at the company, and will be succeeded by Slack Chief Executive Lidiane Jones.
Bumble faces competition from rival Match Group, that has rolled out several new features, including weekly subscription plans and new engagement and privacy features across Tinder and Hinge.
Bumble’s shares have lost around a third of their value so far this year over concerns of slowing growth.
Match last month, however, forecast fourth-quarter revenue below market estimates, reflecting the impact of a strong dollar and risk to revenue from Israel against the backdrop of the Middle East conflict.
Bumble on Tuesday estimated a $1 million hit in the fourth quarter from the crisis in Middle East.
Both Bumble and Match are also exploring using artificial intelligence to craft features that could drive user engagement on their apps.
Total paying users across Bumble’s apps including Badoo and Fruitz increased to 3.8 million in the third quarter, compared with 3.3 million a year earlier.
Austin, Texas-based Bumble expects revenue for the quarter ending Dec. 31 to be between $272 million and $278 million, compared with analysts’ estimates of $285.9 million, according to LSEG data.
Total average revenue per paying user increased to $23.42 in the third quarter, compared with $22.96 a year earlier.
The company posted revenue of $275.5 million, compared with estimates of $277 million.
Bumble reported a profit of 12 cents per share, beating estimates of 7 cents.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Shounak Dasgupta and Shilpi Majumdar)
