Since its founding, Bumble's powerful brands have, in aggregate, served a passionate customer base of hundreds of millions of customers in more than 160 countries around the world. I have now been with Bumble for two months, and I'm even more convinced of the opportunities that lie ahead of us. I have met and connected with dozens of our customers, fully immersed myself in our products and technology, dove deeply in all aspects of our business, and have seen firsthand the caliber of talent we have with our employees. I'm a product leader at heart, and I'm truly excited to help unlock the company's potential by building innovative products that lead our customers to find love and connection throughout their lives. The global addressable market for online dating remains strong with about 2 billion single people around the globe, and we see continued demand and opportunities to drive growth in this market.

We're well-positioned to capture this opportunity with the strong brands and assets in our portfolio. At the same time, I took this role knowing that the online dating industry hasn't seen true innovation in several years, and the population of active users is undergoing a generational transition that rightfully expect some more from their experiences. We're not immune to these dynamics, and we have also had some company-specific execution challenges that disproportionately affect the Bumble App and have impacted our company's near-term outlook reflected in today's guidance. We're taking significant and decisive actions to address these issues. Over the past 18 months, we launched a number of new features in Bumble App, which, while individually promising, have in aggregate slowed the overall app performance and cluttered the user experience.

Additionally, our new pricing tier introduced last December, Premium+, has also not had a clear enough product market fit. These are things we strongly believe are in our control to solve, and we're doing so with four major steps. First, in Q2 of this year, we plan to reignite Bumble's strength by relaunching Bumble App with a compelling modern experience, geared toward capturing a broader audience and aimed at having a stronger appeal to younger users, easing the profile creation experience, optimizing the core performance of the app, and strengthening our AI capabilities to enhance fake account detections and bring profile picture insights to lead our customers to success faster. As a part of this release, we will also revamp our Premium+ offering.

These efforts will be a significant moment of evolution for us in bringing women's empowerment to the core of our experience. This relaunch will also provide us with a strong platform for ongoing innovation. It will come with a new marketing campaign across our core markets, extending our reach and showcasing the benefits of our offerings. This is the first major overhaul of Bumble App in the past two years, and I'm very proud of our team for embracing a faster pace of innovation and marking the start of a new phase of customer experiences in the online dating category. Second, I recognize that, to sustainably reaccelerate growth, we must drive further innovation, be operationally excellent, and be more attuned to our customers' needs. To that end, earlier today, we announced a transformation plan that will return it to a functional operating model that will foster better collaboration across our apps and allow us to deliver a comprehensive portfolio of experiences to our customers.

Centralize our mission-critical teams, including engineering product in fewer locations, remove layers to accelerate decision-making and speed to market, and eliminate duplicate roles to drive stronger operating leverage. Reducing the size of our team is an extremely difficult decision, and I'm incredibly grateful to all of our employees for the role they played in getting Bumble to where it is today. We will do all that we can to support affected colleagues during this time. Rightsizing the company will help us unlock our ability to deliver long-term growth by greatly improving our operational efficiency, agility, and speed and enable us to reinvest a portion of our expected savings in critical foundational capabilities, including dating innovation with AI, machine learning and safety differentiated experiences that will drive our future.

We'll remain laser-focused on execution during this time of transition. Third, we are updating our Bumble Inc. strategy and innovation road map to take advantage of our more agile development platform. My vision for Bumble is to lead the online dating industry and connections at large with a more positive experience for users around the globe. As a technologist, I have been really impressed by the unique data set, knowledge, and intellectual property Bumble has related to personalization, matching, and safety that have been deeply tuned to Bumble's guidelines. We will lean on this technical foundation in emerging technologies, like generative AI, to bring product innovations to meet the demand we see in the market. We'll do this while staying true to our mission and focus our innovation to accelerate human connection and encourage equitable and healthy relationships.

Bumble has always been about more than dating, and we have seen significant customer demand for friendship and platonic connections throughout different phases of life. But, candidly, we have been slow to realize this broader vision with Bundle BFF thus far. Going forward, we will focus our reinvestment to accelerate a bolder strategy for Bumble For Friends, one that will focus on building equitable and safe friendships across communities of people with similar interests that want real-life connections. We plan to bring along the millions of customers we currently have in our base that are eager to continue to be part of our platform. We'll have more to share about our full company strategy and product road map in the months ahead. Finally, to bring our strategy to life, we recently strengthened our executive team with three talented new leaders who'll be instrumental in driving the vision for Bumble's future.

I'm excited to welcome Ali Rayl as Chief Product Officer, Antoine Leblond as Chief Technology Officer, and David Ard as Chief People Officer. Ali most recently served as senior vice president of product at Slack, overseeing Slack's customer experience and communication platform, along with user safety and customer support. As a member of Slack's founding team, Ali's experience overseeing viral user growth will be invaluable to Bumble. Antoine previously served as senior vice president of software engineering at Sonos and held a 25-year leadership tenure at Microsoft prior to that, driving platform growth at scale across several businesses. His experience innovating and scaling effectively will be paramount. David joins us from Salesforce, where he served as head of employee success, leading the people's strategy, business partner teams, and benefit across global teams, and previously served in people leadership roles at Equinox and Gap.

Finally, I am thrilled to announce that Selby Drummond has been promoted to chief marketing officer for Bumble Inc. Selby will oversee both brand and marketing, bringing her extensive experience from companies such as Snap and Vogue to optimize the performance of marketing investments and expand the reach of our brands globally. With Ali, Antoine, David, and Selby leading critical functions of our business, along with existing executive leaders who have the context of the company and the industry, we are well-equipped to drive breakthrough innovation, advance our mission and drive our business back to strong growth. Given the strength of our financial position today and as we update our broader strategic plan in the coming months, we will also be evaluating the best use of capital for Bumble to drive value creation and long-term growth of our business.

The steps we're taking today set the stage for our next chapter of growth. We have work to do, but you have my full commitment that we will innovate and sharpen our focus on execution to create a durable foundation for our business. I look forward to meeting our stakeholders to better understand their needs in the weeks and months ahead and will be open and transparent in communicating progress on our strategy as we move forward. But before I turn it to Anu, I want to express that I'm tremendously honored to be leading this talented and passionate Bumble team in the pursuit of Bumble's founding mission, with our renewed vision and focus. We have an exciting journey ahead of us, and I am thrilled to be leading our team to realize the incredible opportunity ahead on behalf of our customers, our employees, and our shareholders.

And with that, I'll turn it over to Anu, who has been a close partner since the start.

Anuradha Subramanian : Thank you, Lidiane. A warm welcome again to Bumble, and I look forward to our continued partnership. And good afternoon, everyone. I'll walk you through our Q4 and full year 2023 results and then share more about our outlook for the first quarter and full year 2024. Unless stated otherwise, all comparisons are on a year-over-year basis. Total Bumble Inc. revenue in Q4 increased 13% to $274 million, in line with our outlook. Revenue was driven by a 16% increase in paying users with contributions from both Bumble and Badoo apps. The growth in paying users was offset by a 2% decrease in ARPPU. Revenue from Bumble App increased 16% to $221 million. Bumble App paying users increased 21% to 2.7 million, and we added 83,000 paying users sequentially.

The increase in paying users was driven by a combination of growth in active users as well as payer penetration. Bumble App's ARPPU declined 4% to $27.37, primarily due to geographic mix shift. Within many of our top individual markets, we achieved our people growth as a result of pricing optimizations and higher consumable mix. Badoo App and Other revenue was $53 million, up 4%. We continue to make meaningful progress towards Badoo stabilization and return to growth, driven by a well-received brand refresh and update of the app's user experience. We are encouraged by the continued traction we are seeing in the business. Badoo App and Other paying users grew 8% to 1.3 million, up 66,000 sequentially. Starting in Q4 2023, we've begun including contributions from Fruitz in Badoo App and Other key operating metrics of paying users and ARPPU.

Excluding Fruitz, paying users increased 19,000 from Q3 to Q4 2023. Badoo App and Other ARPPU grew 2% to $12.69. Excluding Fruitz, ARPPU declined 1% year-over-year. Turning now to expenses. We continue to spend with discipline, driving consistent leverage, in line with our targets for the year, while investing in our apps and infrastructure to support continued growth. Total GAAP costs and expenses were $280 million for the quarter. And on a non-GAAP basis, excluding stock-based compensation and other non-cash or non-recurring items, total costs and expenses were up 10% to $200 million. Cost of revenue was $79 million and grew 19%. As a percentage of revenue, cost of revenue was 29% versus 28% in the year-ago period. Sales and marketing expenses grew 8% to $70 million.

This represents 26% of revenue versus 27% in the year-ago period. G&A expenses were $30 million or 11% of revenue compared to $32 million or 13% of revenue last year. Product development expenses were $21 million or 8% of revenue versus $18 million or 8% in the year-ago period. Q4 GAAP net loss was $32 million compared to a loss of $159 million in the year-ago period. As a reminder, last year's Q4 included an impairment charge of $141 million related to Badoo brand. Q4 adjusted EBITDA was $74 million, representing a margin of 27%, consistent with our outlook. For full year 2023, total Bumble Inc. revenue grew 16% year-over-year to $1.052 billion, in line with our guidance. Revenue from Bumble App grew 22% to $845 million as paying users grew 26% to 2.5 million.

We grew paying users by more than 500,000 for a second consecutive year. Our GAAP net loss for full year 2023 was $2 million compared to a net loss of $114 million in 2022. Adjusted EBITDA was $276 million, representing 26% margin, up 110 basis points. Our strong operating results and disciplined spending also enabled us to deliver a 43% increase in free cash flow to $167 million in 2023, further strengthening our balance sheet. We ended the year with $356 million in cash and cash equivalents. During the fourth quarter, we repurchased $136 million worth of shares under our current stock repurchase authorization, including $100 million worth of shares repurchased directly from Blackstone. At the end of Q4, we had $143 million remaining in our authorization.

And as of today's call, we have $123 million left. We remain very committed to our buyback program. Now, moving on to our outlook for 2024. As Lidiane just mentioned, we are adjusting our 2024 revenue outlook to reflect Bumble App's slower-than-expected start to the year and app-specific execution challenges. We feel confident that these issues are within our control, and we are actively working to resolve them. We expect that the Q2 relaunch of Bumble App, along with the launch of other key features on our product road map, will reaccelerate growth in the second half of 2024. As a result, for full year 2024, we estimate total Bumble Inc. revenue growth rate of 8% to 11%. This assumes FX will be approximately a 1 point headwind during the year.

We expect Bumble App revenue to grow between 9% to 11% year over year. Our Bumble App revenue outlook includes expectations for full-year net adds of approximately 350,000 to 400,000. On the cost side, the bold actions we announced today around our workforce transformation allow us to gain significant operating leverage and put us on a strong path towards our goal to continue expanding margins. We estimate future annualized OpEx savings from this workforce reduction to be approximately $55 million, of which we expect to selectively reinvest approximately $15 million in areas of product engineering, safety, and brands that will help drive long-term growth. As a result, for 2024, we expect at least 300 basis points of year-over-year adjusted EBITDA margin expansion.

In 2024, we expect to incur approximately $20 million to $25 million of severance and other related charges, primarily in the first half related to this transformation, and our adjusted EBITDA outlook excludes the impact of these charges. For Q1, we expect total revenue between $262 million and $268 million, representing a growth rate between 8% to 10%. We expect Bumble App revenue to be between $211 million and $215 million, representing a growth rate between 9% and 11%. Our Bumble App revenue outlook includes expectations for sequential net adds of approximately 30,000 to 40,000 in Q1. We estimate adjusted EBITDA will be between $67 million and $70 million, representing 26% margin at the midpoint of the range. In closing, while we have more work ahead of us, we've already taken swift and decisive steps to optimize our operating model, right-size our team, and attract new leadership.

We believe that the actions we are taking will accelerate our realization of the tremendous opportunity that exists in the global online dating market and beyond. The power of our brands, user affinity, and our guiding mission provide us with a very strong foundation to build upon, and we are confident that the execution of the plans we shared with you today will enable us to achieve long-term profitable growth, while driving significant value for our shareholders for many years to come. And with that, I'll turn it over to the operator for Q&A. Thank you.

See also 15 Highest Quality Cheeses in America and 25 US Cities with the Most Breweries Per Capita.

To continue reading the Q&A session, please click here.