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Bumble Inc. - Quarter Report: 2021 September (Form 10-Q)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-40054

 

Bumble Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

85-3604367

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

1105 West 41st Street

Austin, Texas

78756

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (512) 696-1409

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class A common stock, par value $0.01 per share

 

BMBL

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of October 29, 2021, Bumble Inc. had 129,241,580 shares of Class A common stock, par value $0.01 per share, outstanding and 20 shares of Class B common stock, par value $0.01 per share, outstanding.

 

 


 

SPECIAL NOTE REGARDING Forward-Looking Statements

This Quarterly Report on Form 10-Q, or this Quarterly Report, contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the current views of management of Bumble Inc. with respect to, among other things, its operations, its financial performance, its industry and the impact of the Coronavirus Disease 2019 (“COVID-19”) on its business. Forward-looking statements include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believe(s),” “expect(s),” “potential,” “continue(s),” “may,” “will,” “should,” “could,” “would,” “seek(s),” “predict(s),” “intend(s),” “trends,” “plan(s),” “estimate(s),” “anticipates,” “projection,” “will likely result” and or the negative version of these words or other comparable words of a future or forward-looking nature. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors include, but are not limited to, the following:

our ability to retain existing users or attract new users and to convert users to paying users
competition and changes in the competitive landscape of our market
our ability to distribute our dating products through third parties, such as Apple App Store or Google Play Store, and offset related fees
the impact of data security breaches or cyber attacks on our systems and the costs of remediation related to any such incidents
the continued development and upgrading of our technology platform and our ability to adapt to rapid technological developments and changes in a timely and cost-effective manner
our ability to obtain, maintain, protect and enforce intellectual property rights and successfully defend against claims of infringement, misappropriation or other violations of third-party intellectual property
our ability to comply with complex and evolving U.S. and international laws and regulations relating to our business, including data privacy laws
foreign currency exchange rate fluctuations
risks relating to certain of our international operations, including successful expansion into new markets
control of us by Blackstone (as defined below) and our Founder
the outsized voting rights of Blackstone (as defined below) and our Founder
the inability to attract hire and retain a highly qualified and diverse workforce, or maintain our corporate culture
changes in business or macroeconomic conditions, including the impact of COVID-19 (and other widespread health emergencies or pandemics) and measures taken in response, lower consumer confidence in our business or in the online dating industry generally, recessionary conditions, increased unemployment rates, stagnant or declining wages, political unrest, armed conflicts or natural disasters

For more information regarding these and other risks and uncertainties that we face, see Part I, “Item 1A—Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020. These factors should not be construed as exhaustive and we caution you that the important factors referenced above may not contain all of the factors that are important to you. Bumble Inc. undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by law.

Website and Social Media Disclosure

We use our websites (www.bumble.com and ir.bumble.com) and at times our corporate Twitter account (@bumble) to distribute company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, filings with the Securities and Exchange Commission (“SEC”) and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about Bumble when you enroll your e-mail address by visiting the “E-mail Alerts” section of our website at ir.bumble.com. The contents of our website and social media channels are not, however, a part of this Quarterly Report on Form 10-Q.

1


 

Certain Definitions

As used in this Quarterly Report, unless otherwise noted or the context requires otherwise:

 

“Badoo App and Other Average Revenue per Paying User” is a metric calculated based on Badoo App and Other Revenue in any measurement period, excluding any revenue generated from advertising and partnerships or affiliates, divided by Badoo App and Other Paying Users in such period divided by the number of months in the period.
a “Badoo App and Other Paying User” is a user that has purchased or renewed a subscription plan and/or made an in-app purchase on the Badoo app in a given month (or made a purchase on one of our other apps that we owned and operated in a given month, or purchase on other third-party apps that used our technology in the relevant period). We calculate Badoo App and Other Paying Users as a monthly average, by counting the number of Badoo App and Other Paying Users in each month and then dividing by the number of months in the relevant measurement period.
“Badoo App and Other Revenue” is revenue derived from purchases or renewals of a Badoo subscription plan and/or in-app purchases on the Badoo app in the relevant period, purchases on one of our other apps that we owned and operated in the relevant period, purchases on other third party apps that used our technology in the relevant period and advertising, partnerships or affiliates revenue in the relevant period.
“Blocker Companies” refer to certain entities that are taxable as corporations for U.S. federal income tax purposes in which the Pre-IPO Shareholders held interests.
“Blocker Restructuring” refers to certain restructuring transactions that resulted in the acquisition by Pre-IPO Shareholders of shares of Class A common stock in exchange for their ownership interests in the Blocker Companies and Bumble Inc. acquiring an equal number of outstanding Common Units.
“Bumble,” the “Company,” “we,” “us” and “our” refer to Bumble Inc. and its consolidated subsidiaries.
“Bumble App Average Revenue per Paying User” is a metric calculated based on Bumble App Revenue in any measurement period, divided by Bumble App Paying Users in such period divided by the number of months in the period.
a “Bumble App Paying User” is a user that has purchased or renewed a Bumble subscription plan and/or made an in-app purchase on the Bumble app in a given month. We calculate Bumble App Paying Users as a monthly average, by counting the number of Bumble App Paying Users in each month and then dividing by the number of months in the relevant measurement period.
"Bumble App Revenue” is revenue derived from purchases or renewals of a Bumble subscription plan and/or in-app purchases on the Bumble app in the relevant period.
“Bumble Holdings” refers to Buzz Holdings L.P., a Delaware limited partnership.
“Blackstone” or “our Sponsor” refer to investment funds associated with Blackstone Inc.
“Class B Units” refers to the interests in Bumble Holdings called “Class B Units,” including the Class B units held by Buzz Management Aggregator L.P., that were outstanding prior to the Reclassification.
“Common Units” refers to the new class of units of Bumble Holdings created by the Reclassification and does not include Incentive Units.
“Founder” refers to Whitney Wolfe Herd, the founder of Bumble, our Chief Executive Officer and member of our board of directors, together with entities beneficially owned by her.
“Incentive Units” refers to the new class of units of Bumble Holdings created by the reclassification of the Class B Units in the Reclassification. The Incentive Units are “profit interests” having economic characteristics similar to stock appreciation rights and having the right to share in any equity value of Bumble Holdings above specified participation thresholds. Vested Incentive Units may be converted to Common Units and be subsequently exchanged for shares of Class A common stock.
“IPO” refers to the initial public offering.
“Offering Transactions” refers to the offering of Class A common stock in the IPO and certain related transactions, as defined in “Item 2―Management’s Discussion and Analysis of Financial Condition and Results of Operations―2021 Developments―Initial Public Offering and Offering Transactions”.
“Pre-IPO Common Unitholders” refer to pre-IPO owners that hold Common Units following the Reclassification.

2


 

“pre-IPO owners” refer to our Founder, our Sponsor, an affiliate of Accel Partners LP and management and other equity holders who are the owners of Bumble Holdings immediately prior to the Offering Transactions.
“Pre-IPO Shareholders” refer to pre-IPO owners that received shares of Class A common stock of Bumble Inc. pursuant to the Blocker Restructuring.
“Principal Stockholders” refers collectively to our Founder and our Sponsor.
“Reclassification” refers to the reclassification of the limited partnership interests of Bumble Holdings in connection with the IPO pursuant to which certain outstanding Class A units were reclassified into a new class of limited partnership interests that we refer to as “Common Units” and certain outstanding Class B Units were reclassified into a new class of limited partnership interests that we refer to as “Incentive Units.”
“Reorganization Transactions” refer to certain transactions prior to the completion of the IPO which were accounted as a reorganization of entities under common control.
“Sponsor Acquisition” refers to the acquisition on January 29, 2020 by our Sponsor of a majority stake in Worldwide Vision Limited and certain transactions related thereto.
“Total Average Revenue per Paying User” is a metric calculated based on Total Revenue in any measurement period, excluding any revenue generated from advertising and partnerships or affiliates, divided by the Total Paying Users in such period divided by the number of months in the period.
“Total Paying Users” is the sum of Bumble App Paying Users and Badoo App and Other Paying Users.
“Total Revenue” is the sum of Bumble App Revenue and Badoo App and Other Revenue.
“user” is a user ID, a unique identifier assigned during registration.

 

3


 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

5

 

Condensed Consolidated Balance Sheets

5

 

Condensed Consolidated Statements of Operations

6

 

Condensed Consolidated Statements of Comprehensive Operations

7

 

Condensed Consolidated Statements of Changes in Equity

8

 

Condensed Consolidated Statements of Cash Flows

11

 

Notes to Unaudited Condensed Consolidated Financial Statements

12

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

34

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

49

Item 4.

Controls and Procedures

50

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

52

Item 1A.

Risk Factors

52

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

52

Item 6.

Exhibits

54

 

Signatures

55

 

 

 

 

4


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

Bumble Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share information)

(Unaudited)

 

 

 

September 30, 2021

 

 

December 31, 2020

 

ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

291,575

 

 

$

128,029

 

Accounts receivable

 

 

44,953

 

 

 

41,595

 

Other current assets

 

 

83,540

 

 

 

81,387

 

Total current assets

 

 

420,068

 

 

 

251,011

 

Right-of-use assets

 

 

11,700

 

 

 

11,711

 

Lease receivable

 

 

1,106

 

 

 

1,069

 

Property and equipment, net

 

 

13,942

 

 

 

16,833

 

Goodwill

 

 

1,540,112

 

 

 

1,540,915

 

Intangible assets, net

 

 

1,743,389

 

 

 

1,812,410

 

Deferred tax assets, net

 

 

14,654

 

 

 

 

Other noncurrent assets

 

 

4,238

 

 

 

3,319

 

Total assets

 

$

3,749,209

 

 

$

3,637,268

 

LIABILITIES AND BUMBLE INC. SHAREHOLDERS’ / BUZZ HOLDINGS L.P. OWNERS’ EQUITY

 

 

 

 

 

 

Accounts payable

 

$

11,536

 

 

$

23,741

 

Deferred revenue

 

 

39,042

 

 

 

31,269

 

Accrued expenses and other current liabilities

 

 

104,760

 

 

 

180,986

 

Current portion of long-term debt, net

 

 

2,588

 

 

 

5,338

 

Total current liabilities

 

 

157,926

 

 

 

241,334

 

Long-term debt, net

 

 

620,998

 

 

 

820,876

 

Deferred tax liabilities, net

 

 

 

 

 

428,087

 

Tax receivable agreement liability

 

 

381,152

 

 

 

 

Other liabilities

 

 

125,346

 

 

 

62,190

 

Total liabilities

 

$

1,285,422

 

 

$

1,552,487

 

Commitments and contingencies (Note 16)

 

 

 

 

 

 

Bumble Inc. Shareholders’ / Buzz Holdings L.P. Owners’ Equity:

 

 

 

 

 

 

Class A common stock (par value $0.01 per share, 6,000,000,000 shares authorized; 129,241,580 shares issued; and 129,241,580 shares outstanding as of September 30, 2021)

 

 

1,292

 

 

 

 

Class B common stock (par value $0.01 per share, 1,000,000 shares authorized; 20 shares issued and outstanding as of September 30, 2021)

 

 

 

 

 

 

Preferred stock (par value $0.01; authorized 600,000,000 shares; no shares issued and outstanding as of September 30, 2021)

 

 

 

 

 

 

Limited Partners’ interest

 

 

 

 

 

1,903,121

 

Additional paid-in capital

 

 

1,470,451

 

 

 

Accumulated deficit

 

 

(42,813

)

 

 

 

Accumulated other comprehensive income

 

 

173,229

 

 

 

180,852

 

Total Bumble Inc. shareholders’ / Buzz Holdings L.P. owners’ equity

 

 

1,602,159

 

 

 

2,083,973

 

Noncontrolling interests

 

 

861,628

 

 

 

808

 

Total shareholders’ / owners’ equity

 

 

2,463,787

 

 

 

2,084,781

 

Total liabilities and shareholders’ / owners’ equity

 

$

3,749,209

 

 

$

3,637,268

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5


 

Bumble Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share / unit information)

(Unaudited)

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months
Ended
September 30,
2021

 

 

Three Months
Ended
September 30,
2020

 

 

Nine Months
Ended
September 30,
2021

 

 

Period from
January 29,
through
September 30,
2020

 

 

 

Period from
January 1,
through
January 28,
2020

 

Revenue

 

$

200,509

 

 

$

162,300

 

 

$

557,439

 

 

$

376,587

 

 

 

$

39,990

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

56,627

 

 

 

43,523

 

 

 

155,171

 

 

 

102,017

 

 

 

 

10,790

 

Selling and marketing expense

 

 

55,105

 

 

 

37,744

 

 

 

151,654

 

 

 

104,511

 

 

 

 

11,157

 

General and administrative expense

 

 

45,726

 

 

 

47,958

 

 

 

215,631

 

 

 

128,120

 

 

 

 

44,907

 

Product development expense

 

 

24,231

 

 

 

12,860

 

 

 

84,197

 

 

 

29,915

 

 

 

 

4,087

 

Depreciation and amortization expense

 

 

27,022

 

 

 

25,404

 

 

 

80,882

 

 

 

65,749

 

 

 

 

408

 

Total operating costs and expenses

 

 

208,711

 

 

 

167,489

 

 

 

687,535

 

 

 

430,312

 

 

 

 

71,349

 

Operating earnings (loss)

 

 

(8,202

)

 

 

(5,189

)

 

 

(130,096

)

 

 

(53,725

)

 

 

 

(31,359

)

Interest income (expense)

 

 

(5,962

)

 

 

(4,919

)

 

 

(19,612

)

 

 

(14,704

)

 

 

 

50

 

Other income (expense), net

 

 

3,773

 

 

 

4,021

 

 

 

15,495

 

 

 

3,474

 

 

 

 

(882

)

Income (loss) before income taxes

 

 

(10,391

)

 

 

(6,087

)

 

 

(134,213

)

 

 

(64,955

)

 

 

 

(32,191

)

Income tax benefit (provision)

 

 

(280

)

 

 

(16,737

)

 

 

435,837

 

 

 

(19,143

)

 

 

 

(365

)

Net earnings (loss)

 

 

(10,671

)

 

 

(22,824

)

 

 

301,624

 

 

 

(84,098

)

 

 

 

(32,556

)

Net earnings (loss) attributable to noncontrolling interests

 

 

(3,786

)

 

 

(35

)

 

 

(26,198

)

 

 

(99

)

 

 

 

1,917

 

Net earnings (loss) attributable to Bumble Inc. shareholders / Buzz Holdings L.P. owners

 

$

(6,885

)

 

$

(22,789

)

 

$

327,822

 

 

$

(83,999

)

 

 

$

(34,473

)

Net earnings (loss) per share / unit attributable to Bumble Inc. shareholders / Buzz Holdings L.P. owners

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share / unit

 

$

(0.06

)

 

$

(0.01

)

 

$

1.60

 

 

$

(0.03

)

 

 

 

 

Diluted earnings (loss) per share / unit

 

$

(0.06

)

 

$

(0.01

)

 

$

1.56

 

 

$

(0.03

)

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6


 

Bumble Inc.

Condensed Consolidated Statements of Comprehensive Operations

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

Successor

 

 

 

 

 

 

Predecessor

 

 

 

Three Months
Ended
September 30,
2021

 

 

Three Months
Ended
September 30,
2020

 

 

Nine Months
Ended
September 30,
2021

 

 

Period from
January 29,
through
September 30,
2020

 

 

 

Period from
January 1,
through
January 28,
2020

 

Net earnings (loss)

 

$

(10,671

)

 

$

(22,824

)

 

$

301,624

 

 

$

(84,098

)

 

 

$

(32,556

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in foreign currency translation adjustment

 

 

(2,878

)

 

 

107,225

 

 

 

(11,912

)

 

 

26,656

 

 

 

 

(774

)

Total other comprehensive income (loss), net of tax

 

 

(2,878

)

 

 

107,225

 

 

 

(11,912

)

 

 

26,656

 

 

 

 

(774

)

Comprehensive income (loss)

 

 

(13,549

)

 

 

84,401

 

 

 

289,712

 

 

 

(57,442

)

 

 

 

(33,330

)

Comprehensive income (loss) attributable to noncontrolling interests

 

 

(4,695

)

 

 

(35

)

 

 

(30,487

)

 

 

(99

)

 

 

 

1,917

 

Comprehensive income (loss) attributable to Bumble Inc. shareholders / Buzz Holdings L.P. owners

 

$

(8,854

)

 

$

84,436

 

 

$

320,199

 

 

$

(57,343

)

 

 

$

(35,247

)

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

7


 

Bumble Inc.

Condensed Consolidated Statements of Changes in Equity (Successor)

Three months ended September 30, 2021

(Unaudited)

 

 

 

Class A
Common Stock

 

 

Class B
Common Stock

 

 

Additional
Paid-in

 

 

Treasury
Stock

 

 

Accumulated

 

 

Accumulated
Other
Comprehensive

 

 

Noncontrolling

 

 

Total
Shareholders’
/ Owners'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Shares

 

 

Amount

 

 

 Deficit

 

 

Income

 

 

Interests

 

 

Equity

 

 

 

(In thousands, except share amounts)

 

Balance as of July 1, 2021

 

 

119,799,036

 

 

$

1,198

 

 

 

20

 

 

$

 

 

$

1,339,583

 

 

 

 

 

$

 

 

$

(35,928

)

 

$

175,198

 

 

$

1,007,457

 

 

 

2,487,508

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,885

)

 

 

 

 

 

(3,786

)

 

 

(10,671

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23,763

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23,763

 

Impact of Tax Receivable Agreement due to exchanges of Common Units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,085

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,085

)

Cancellation of restricted shares

 

 

(145,416

)

 

 

(1

)

 

 

 

 

 

 

 

 

(2,172

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,173

 

 

 

 

Exercise of stock options

 

 

12,668

 

 

 

 

 

 

 

 

 

 

 

 

734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(189

)

 

 

545

 

Restricted stock units issued, net of shares withheld for taxes

 

 

230,389

 

 

 

2

 

 

 

 

 

 

 

 

 

(4,953

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,444

)

 

 

(8,395

)

Exchange of Common Units for Class A common stock

 

 

9,344,903

 

 

 

93

 

 

 

 

 

 

 

 

 

139,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(139,674

)

 

 

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,969

)

 

 

(909

)

 

 

(2,878

)

Balance as of September 30, 2021

 

 

129,241,580

 

 

$

1,292

 

 

 

20

 

 

$

 

 

$

1,470,451

 

 

 

 

 

$

 

 

$

(42,813

)

 

$

173,229

 

 

$

861,628

 

 

$

2,463,787

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

Bumble Inc.

Condensed Consolidated Statements of Changes in Equity (Successor)

Three months ended September 30, 2020

(Unaudited)

 

 

 

 Limited
Partners Interest

 

 

Accumulated
Other
Comprehensive

 

 

Total
Bumble
Inc.
Owners’ /
Shareholders’

 

 

Noncontrolling

 

 

Total
Shareholders’
/ Owners’

 

 

 

 

Units

 

 

Amount

 

 

Loss

 

 

Equity

 

 

Interests

 

 

Equity

 

 

 

(In thousands)

 

Balance as of July 1, 2020

 

 

 

2,453,233

 

 

$

2,334,233

 

 

$

(80,569

)

 

$

2,196,044

 

 

$

(64

)

 

$

2,195,980

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

(22,789

)

 

 

(35

)

 

 

(22,824

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

3,985

 

 

 

 

 

 

3,985

 

Issuance of Limited Partners' Interest

 

 

 

552

 

 

 

552

 

 

 

 

 

 

552

 

 

 

 

 

 

552

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

107,225

 

 

 

107,225

 

 

 

 

 

 

107,225

 

Balance as of September 30, 2020

 

 

 

2,453,785

 

 

$

2,334,785

 

 

$

26,656

 

 

$

2,285,017

 

 

$

(99

)

 

$

2,284,918

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

8


 

Bumble Inc.

Condensed Consolidated Statements of Changes in Equity (Successor)

Nine months ended September 30, 2021

(Unaudited)

 

Limited
Partners'

 

 

 

Class A
Common Stock

 

 

Class B
Common Stock

 

 

Additional
Paid-in

 

 

Treasury
Stock

 

 

Accumulated

 

 

Accumulated
Other
Comprehensive

 

 

Noncontrolling

 

 

Total
Shareholders’
/ Owners'

 

 

Equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Shares

 

 

Amount

 

 

 Deficit

 

 

Income

 

 

Interests

 

 

Equity

 

 

 

 

 

 

(In thousands, except share amounts)

 

Balance as of January 1, 2021

$

1,903,121

 

 

 

$

 

 

 

 

 

$

 

 

$

 

 

 

 

 

$

 

 

$

 

 

$

 

 

$

180,852

 

 

 

808

 

 

$

2,084,781

 

Acquisition of noncontrolling interests

 

808

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(808

)

 

 

 

Net earnings prior to Reorganization Transactions

 

370,635

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

370,635

 

Stock-based compensation expense

 

11,587

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,587

 

Effect of the Reorganization Transactions

 

(2,286,151

)

 

 

 

82,642,374

 

 

 

826

 

 

 

 

 

 

 

 

 

979,275

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,306,050

 

 

 

 

Issuance of Class A common stock sold in the initial public offering, net of offering costs

 

 

 

 

 

57,500,000

 

 

 

575

 

 

 

20

 

 

 

 

 

 

2,236,787

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

121,009

 

 

 

2,358,371

 

'Purchase of Class A Common Stock in the initial public offering

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24,798,848

 

 

 

(1,018,365

)

 

 

 

 

 

 

 

 

 

 

 

(1,018,365

)

Purchase of Common Units from Pre-IPO Common Unitholders in the initial public offering

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(609,489

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(363,800

)

 

 

(973,289

)

Vested Incentive Units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,067

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,067

 

 

 

 

Issuance of Founder loan common units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30,371

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30,371

 

 

 

 

Equity plan modification from liability to equity settled due to Reorganization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22,107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22,107

 

Impact of Tax Receivable Agreement due to exchanges of Common Units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(382,840

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(382,840

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

79,573

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

79,573

 

Retirement of treasury stock

 

 

 

 

 

(24,798,848

)

 

 

(248

)

 

 

 

 

 

 

 

 

(1,018,117

)

 

 

(24,798,848

)

 

 

1,018,365

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancellation of restricted shares

 

 

 

 

 

(145,416

)

 

 

(1

)

 

 

 

 

 

 

 

 

(2,172

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,173

 

 

 

 

Exercise of options

 

 

 

 

 

12,668

 

 

 

 

 

 

 

 

 

 

 

 

734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(189

)

 

 

545

 

Restricted stock units issued, net of shares withheld for taxes

 

 

 

 

 

230,389

 

 

 

2

 

 

 

 

 

 

 

 

 

(4,953

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,444

)

 

 

(8,395

)

Exchange of Common Units for Class A common stock

 

 

 

 

 

13,800,413

 

 

 

138

 

 

 

 

 

 

 

 

 

207,984

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(208,122

)

 

 

 

Net loss subsequent to Reorganization Transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(42,813

)

 

 

 

 

 

(26,198

)

 

 

(69,011

)

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,623

)

 

 

(4,289

)

 

 

(11,912

)

Balance as of September 30, 2021

$

 

 

 

 

129,241,580

 

 

$

1,292

 

 

 

20

 

 

$

 

 

$

1,470,451

 

 

 

 

 

$

 

 

$

(42,813

)

 

$

173,229

 

 

$

861,628

 

 

$

2,463,787

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

9


 

Bumble Inc.

Condensed Consolidated Statements of Changes in Equity / (Deficit) (Predecessor)

For the period from January 1, 2020 to January 28, 2020

(Unaudited)

 

 

 

Issued Share Capital

 

 

Treasury Stock

 

 

Additional
Paid-in

 

 

Retained
Earnings
(Accumulated
Deficit)

 

 

Accumulated
Other
Comprehensive

 

 

Total
Predecessor
Shareholders’

 

 

Noncontrolling

 

 

Total
Shareholders’

 

 

 

Units

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

 

 

 

Income (Loss)

 

 

Equity (Deficit)

 

 

Interests

 

 

Equity (Deficit)

 

 

 

(In thousands)

 

Balance as of January 1, 2020

 

 

108,431

 

 

$

11

 

 

 

6,940

 

 

$

(3,788

)

 

$

3,449

 

 

$

23,352

 

 

$

644

 

 

$

23,668

 

 

$

6,014

 

 

$

29,682

 

Net earnings (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(34,473

)

 

 

 

 

 

(34,473

)

 

 

1,917

 

 

 

(32,556

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

336

 

 

 

 

 

 

 

 

 

336

 

 

 

 

 

 

336

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(774

)

 

 

(774

)

 

 

 

 

 

(774

)

Balance as of January 28, 2020

 

 

108,431

 

 

$

11

 

 

 

6,940

 

 

$

(3,788

)

 

$

3,785

 

 

$

(11,121

)

 

$

(130

)

 

$

(11,243

)

 

$

7,931

 

 

$

(3,312

)

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

Bumble Inc.

Condensed Consolidated Statements of Changes in Equity (Successor)

For the period from January 29, 2020 to September 30, 2020

(Unaudited)

 

 

 

 

 Limited
Partners Interest

 

 

Accumulated
Other
Comprehensive

 

 

Total
Bumble
Inc.
Owners’ /
Shareholders’

 

 

Noncontrolling

 

 

Total
Shareholders’
/ Owners’

 

 

 

 

Units

 

 

Amount

 

 

Loss

 

 

Equity

 

 

Interests

 

 

Equity

 

 

 

(In thousands)

 

Balance as of January 29, 2020

 

 

 

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

(83,999

)

 

 

(99

)

 

 

(84,098

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

7,575

 

 

 

 

 

 

7,575

 

Issuance of Limited Partners' Interest

 

 

 

2,453,785

 

 

 

2,334,785

 

 

 

 

 

 

2,334,785

 

 

 

 

 

 

2,334,785

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

26,656

 

 

 

26,656

 

 

 

 

 

 

26,656

 

Balance as of September 30, 2020

 

 

 

2,453,785

 

 

$

2,334,785

 

 

$

26,656

 

 

$

2,285,017

 

 

$

(99

)

 

$

2,284,918

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

10


 

Bumble Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Nine Months
Ended
September 30,
2021

 

 

Period from
January 29,
through
September 30,
2020

 

 

 

Period from
January 1,
through
January 28,
2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

301,624

 

 

$

(84,098

)

 

 

$

(32,556

)

Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

80,882

 

 

 

65,749

 

 

 

 

408

 

Changes in fair value of interest rate swaps

 

 

(2,789

)

 

 

1,828

 

 

 

 

 

Changes in fair value of contingent earn-out liability

 

 

77,659

 

 

 

19,100

 

 

 

 

 

Non-cash lease expense

 

 

4,247

 

 

 

3,585

 

 

 

 

410

 

Deferred income tax

 

 

(441,811

)

 

 

22,046

 

 

 

 

26

 

Stock-based compensation expense

 

 

99,502

 

 

 

13,118

 

 

 

 

4,156

 

Net foreign exchange difference

 

 

(6,865

)

 

 

4,981

 

 

 

 

(198

)

Other, net

 

 

4,478

 

 

 

2,531

 

 

 

 

31

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(4,954

)

 

 

(9,196

)

 

 

 

(17,599

)

Other current assets

 

 

(5,284

)

 

 

(23,688

)

 

 

 

(2,175

)

Accounts payable

 

 

(13,124

)

 

 

(6,679

)

 

 

 

12,984

 

Deferred revenue

 

 

7,773

 

 

 

20,690

 

 

 

 

289

 

Legal liabilities

 

 

(45,631

)

 

 

(13,125

)

 

 

 

(521

)

Accrued expenses and other current liabilities

 

 

(42,525

)

 

 

(15,807

)

 

 

 

31,439

 

Other, net

 

 

271

 

 

 

6

 

 

 

 

 

Net cash provided by (used in) operating activities

 

 

13,453

 

 

 

1,041

 

 

 

 

(3,306

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(9,388

)

 

 

(5,779

)

 

 

 

(1,045

)

Acquisition of business, net of cash acquired

 

 

 

 

 

(2,801,262

)

 

 

 

 

Other, net

 

 

31

 

 

 

(447

)

 

 

 

16

 

Net cash used in investing activities

 

 

(9,357

)

 

 

(2,807,488

)

 

 

 

(1,029

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of Class A common stock sold in initial public offering, net of offering costs

 

 

2,358,371

 

 

 

 

 

 

 

 

Payments to purchase and retire common stock

 

 

(1,018,365

)

 

 

 

 

 

 

 

Purchase of Common Units from Pre-IPO Common Unitholders in the initial public offering

 

 

(973,289

)

 

 

 

 

 

 

 

Proceeds from exercise of options

 

 

545

 

 

 

 

 

 

 

 

Proceeds from repayments of loans to related companies

 

 

 

 

 

41,929

 

 

 

 

 

Debt issuance costs

 

 

 

 

 

(16,281

)

 

 

 

 

Limited Partners’ interest

 

 

 

 

 

2,334,785

 

 

 

 

 

Proceeds from term loan

 

 

 

 

 

575,000

 

 

 

 

 

Repayment of term loan

 

 

(207,534

)

 

 

(2,875

)

 

 

 

 

Net cash provided by financing activities

 

 

159,728

 

 

 

2,932,558

 

 

 

 

 

Effects of exchange rate changes on cash and cash equivalents

 

 

(535

)

 

 

(3,685

)

 

 

 

813

 

Net increase (decrease) in cash and cash equivalents and restricted cash

 

 

163,289

 

 

 

122,426

 

 

 

 

(3,522

)

Cash and cash equivalents and restricted cash, beginning of the period

 

 

128,286

 

 

 

53,927

 

 

 

 

57,449

 

Cash and cash equivalents and restricted cash, end of the period

 

 

291,575

 

 

 

176,353

 

 

 

 

53,927

 

Less restricted cash

 

 

 

 

 

258

 

 

 

 

258

 

Cash and cash equivalents, end of the period

 

$

291,575

 

 

$

176,095

 

 

 

$

53,669

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

11


 

Bumble Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

 

Note 1 - Organization and Background

 

Description of Business

 

The Company provides online dating and social networking platforms through subscription and credit-based dating products servicing North America, Europe and various other countries around the world. The Company provides these services through websites and applications that it owns and operates.

 

Organization and Initial Public Offering

 

Bumble Inc. was incorporated as a Delaware corporation on October 5, 2020 for the purpose of facilitating an initial public offering (“IPO”) and other related transactions in order to operate the business of Buzz Holdings L.P. (“Bumble Holdings”) and its subsidiaries.

 

Prior to the IPO and the Reorganization Transactions, Bumble Holdings, a Delaware limited partnership, was formed primarily as a vehicle to finance the acquisition (the “Sponsor Acquisition”) of a majority stake in Worldwide Vision Limited by a group of investment funds managed by Blackstone Inc. (“Blackstone”). As Bumble Holdings did not have any previous operations, Worldwide Vision Limited, a Bermuda exempted limited company, is viewed as the predecessor to Bumble Holdings and its consolidated subsidiaries. Accordingly, these consolidated financial statements include certain historical consolidated financial and other data for Worldwide Vision Limited for periods prior to the completion of the business combination.

 

On February 16, 2021, the Company completed its IPO of 57.5 million shares of Class A common stock at an offering price of $43 per share. The Company received net proceeds of $2,361.2 million after deducting underwriting discounts and commissions. The Company used the proceeds from the issuance of 48.5 million shares ($1,991.6 million) to redeem shares of Class A common stock and purchase Common Units from our Sponsor, at a price per share / Common Unit equal to the IPO price, net of underwriting discounts and commissions.

 

In connection with the IPO, the organizational structure was converted to an umbrella partnership-C-Corporation with Bumble Inc. becoming the general partner of Bumble Holdings. The Reorganization Transactions were accounted for as a transaction between entities under common control. As a result, the financial statements for periods subsequent to the Sponsor Acquisition and prior to the IPO and the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. As the general partner, Bumble Inc. operates and controls all of the business and affairs, and through Bumble Holdings and its subsidiaries, conducts the business. Bumble Inc. consolidates Bumble Holdings in its consolidated financial statements and reports a noncontrolling interest related to the common units held by the Pre-IPO Common Unitholders and the incentive units held by the continuing incentive unitholders in the unaudited condensed consolidated financial statements.

 

Assuming the exchange of all outstanding Common Units for shares of Class A common stock on a one-for-one basis under the exchange agreement entered into by holders of Common Units, there would be 187,981,414 shares of Class A common stock outstanding (which does not reflect any shares of Class A common stock issuable in exchange for as-converted Incentive Units or upon settlement of certain other interests) as of September 30, 2021.

 

Secondary Offering

On September 15, 2021, the Company completed a secondary offering of 20.7 million shares of Class A common stock on behalf of certain selling stockholders affiliated with Blackstone Inc. (the "Selling Stockholders") at a price to public of $54.00 per share. This transaction resulted in the issuance of 9.2 million Class A shares for the period ending September 30, 2021.

Bumble did not sell any shares of Class A common stock in the offering and did not receive any of the proceeds from the sale. Bumble paid the costs associated with the sale of shares by the Selling Stockholders, net of the underwriting discounts.

 

Basis of Presentation and Consolidation

 

The unaudited condensed consolidated financial statements that accompany these notes include the financial statements of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. Intercompany transactions and balances have been eliminated. The unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, consistent in all material respects with those applied in our Annual Report on

12


 

Form 10-K for the year ended December 31, 2020 (“2020 Form 10-K”). These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated statements and notes thereto included in the 2020 Form 10-K.

 

Certain prior year amounts have been reclassified to conform to the current year presentation.

 

As a result of the Sponsor Acquisition as further discussed in Note 5, Business Combination, periods prior to January 28, 2020 reflect the financial statements of Worldwide Vision Limited (referred to herein as the “Predecessor”). Periods subsequent to the Sponsor Acquisition and prior to the IPO, reflect the financial statements of Bumble Holdings with the assets and liabilities adjusted to fair value on the closing date of the business combination. Periods subsequent to the IPO and the Reorganization Transactions, reflect the financial statements of Bumble Inc., general partner of Bumble Holdings, and successor to Bumble Holdings, for accounting and reporting purposes. All periods subsequent to the Sponsor Acquisition have been presented as the financial statements of Bumble Inc. (referred to herein as the “Successor”). Due to the change in the basis of accounting, the consolidated financial statements for the Predecessor and the Successor are not necessarily comparable. Where applicable, a black line separates the Successor and Predecessor periods to highlight the lack of comparability.

 

All references to the “Company”, “we”, “our” or “us” in this report are to Bumble Inc.

 

Note 2 - Summary of Selected Significant Accounting Policies

 

Included below are selected significant accounting policies including those that were added or modified during the three and nine months ended September 30, 2021 as a result of new transactions entered into or the adoption of new accounting policies. Refer to Note 2, Summary of Selected Significant Accounting Policies, within the annual consolidated financial statements in our 2020 Form 10-K for the full list of our significant accounting policies.

 

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires management to make certain judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses. The Company’s significant estimates relate to current and deferred income taxes (including valuation allowance for deferred income tax assets), amounts payable under the tax receivable agreement, the fair value and useful lives of assets acquired and liabilities assumed in the Sponsor Acquisition, the recoverability of long-lived assets and goodwill, potential obligations associated with legal contingencies, the fair value of contingent consideration, derivatives and stock-based compensation and recognition of performance-based stock-based compensation.

 

These estimates are based on management’s best estimates and judgment. Actual results may differ from these estimates. Estimates, judgments and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions, judgments and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Revenue Recognition

The Company recognizes revenue from services in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, the Company recognizes revenue when or as the Company’s performance obligations are satisfied by transferring control of the promised services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps as prescribed by ASC 606:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract; and

(v) recognize revenue when (or as) the entity satisfies performance obligations.

The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determine those that are

13


 

performance obligations and assess whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Revenue is primarily derived in the form of recurring subscriptions and in-app purchases. Subscription revenue is presented net of taxes, refunds and credit card chargebacks. This revenue is initially deferred and is recognized using the straight-line method over the term of the applicable subscription period. Revenue from lifetime subscriptions is deferred over the average estimated expected period of the subscriber relationship, which is currently estimated to be twelve months. Revenue from the purchase of in-app features is recognized based on usage. Unused in-app purchase fees expire and are recognized as revenue after six months. The Company also earns revenue from online advertising and partnerships. Online advertising revenue is recognized when an advertisement is displayed. Revenue from partnerships is recognized according to the contractual terms of the partnership.

As permitted under the practical expedient available under ASC 606, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, and (ii) contracts for which the Company recognizes revenue at the amount which it has the right to invoice for services performed.

During the three and nine months ended September 30, 2021, the three months ended September 30, 2020, the period from January 29, 2020 to September 30, 2020 and the period from January 1, 2020 to January 28, 2020, there were no customers representing greater than 10% of total revenue.

For the periods presented, revenue across apps was as follows (in thousands):

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months
Ended
September 30,
2021

 

 

Three Months
Ended
September 30,
2020

 

 

Nine Months
Ended
September 30,
2021

 

 

Period from
January 29,
through
September 30,
2020

 

 

 

Period from
January 1,
through
January 28,
2020

 

Bumble App

 

$

142,485

 

 

$

102,570

 

 

$

382,440

 

 

$

231,455

 

 

 

$

23,256

 

Badoo App and Other

 

 

58,024

 

 

 

59,730

 

 

 

174,999

 

 

 

145,132

 

 

 

 

16,734

 

Total Revenue

 

$

200,509

 

 

$

162,300

 

 

$

557,439

 

 

$

376,587

 

 

 

$

39,990

 

 

Deferred Revenue

Deferred revenue consists of advance payments that are received or are contractually due in advance of the Company's performance. The Company’s deferred revenue is reported on a contract by contract basis at the end of each reporting period. The Company classifies deferred revenue as current when the term of the applicable subscription period or expected completion of the performance obligation is one year or less. The deferred revenue balance is $39.0 million and $31.3 million as of September 30, 2021 and December 31, 2020, respectively. During the three and nine months ended September 30, 2021, the three months ended September 30, 2020, the period from January 29, 2020 to September 30, 2020 and the period from January 1, 2020 to January 28, 2020, the Company recognized revenue of $2.0 million, $29.9 million, $0.9 million, $9.3 million and $10.6 million, that was included in the deferred revenue balance at the beginning of each period.

 

Income Taxes

 

The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. We recognize deferred tax assets to the extent we believe these assets are more likely than not to be realized. In making such a determination, we consider all positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. A valuation allowance is provided if it is determined that it is more likely than not that the deferred tax asset will not be realized.

 

14


 

The Company evaluates and accounts for uncertain tax positions using a two-step approach. Recognition (step one) occurs when the Company concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustainable upon examination. Measurement (step two) determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Derecognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more likely-than-not threshold of being sustained. The Company records interest (and penalties where applicable), net of any applicable related income tax benefit, on potential income tax contingencies as a component of income tax provision.

 

 

Tax Receivable Agreement

 

In connection with our IPO, the Company entered into a tax receivable agreement with certain pre-IPO owners whereby the Company agreed to pay to such pre-IPO owners 85% of the benefits that the Company realizes, or is deemed to realize, as a result of our allocable share of existing tax basis acquired in the IPO, increases in our share of existing tax basis and adjustments to the tax basis of the assets of Bumble Holdings as a result of sales or exchanges of Common Units (including Common Units issued upon conversion of vested Incentive Units), and our utilization of certain tax attributes of the Blocker Companies (including the Blocker Companies’ allocable share of existing tax basis) and certain other tax benefits related to entering into the tax receivable agreement.

 

Actual tax benefits realized by the Company may differ from tax benefits calculated under the tax receivable agreement as a result of the use of certain assumptions in the tax receivable agreement, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. Payments to be made under the tax receivable agreement will depend upon a number of factors, including the timing and amount of our future income.

 

The Company accounts for amounts payable under the tax receivable agreement in accordance with ASC Topic 450, Contingencies. As such, subsequent changes in the fair value of the tax receivable agreement liability between reporting periods are recognized in the statement of operations. See Note 4, Tax Receivable Agreement, for additional information on the tax receivable agreement.

 

Fair Value Measurements

 

The Company follows ASC Topic 820, Fair Value Measurement, for financial assets and liabilities measured on a recurring basis. The Company uses the fair value hierarchy to categorize the financial instruments measured at fair value based on the available inputs to the valuation and the degree to which they are observable or not observable in the market.

 

The three levels of the fair value hierarchy are as follows:

 

Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.
Level 3 - Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available.

 

See Note 9, Fair Value Measurements, for additional information on the Company's financial instruments measured at fair value.

Stock-Based Compensation

The Company issues stock-based awards to employees that are generally in the form of stock options, restricted shares, incentive units, or restricted stock units (“RSUs”). Compensation cost for equity awards is measured at their grant-date fair value, and in the case of restricted shares and RSUs is estimated based on the fair value of the Company’s underlying common stock. The grant date fair value of stock options and incentive units is estimated using the Black-Scholes option pricing model for time-vesting awards or a Monte Carlo simulation approach in an option pricing framework for exit-vesting awards. These require management to make assumptions with respect to the fair value of the Company’s common stock on the grant date, including the expected term of the award, the expected volatility of the Company’s stock calculated based on a period of time generally commensurate with the expected term of the award, risk-free interest rates and expected dividend yields of the Company’s stock. For time-vesting awards, compensation cost is recognized over the requisite service period, which is generally the vesting period, using the graded attribution method. For performance-based stock awards, compensation expense is recognized over the requisite service period on a straight-line basis when achievement is probable. At the IPO date, we concluded that our public offering represents a qualifying liquidity event that would cause the performance conditions to be probable of occurring.

15


 

 

For periods prior to the Company’s IPO, the grant date fair value of stock-based compensation awards and the underlying equity were determined on each grant date using a Monte Carlo model. As the Company's equity was not publicly traded, there was no history of market prices for the Company's equity. Thus, estimating grant date fair value required the Company to make assumptions, including the value of the Company's equity, expected time to liquidity, and expected volatility.

 

See Note 13, Stock-based Compensation, for additional information on the Company’s stock-based compensation plans and awards.

 

Earnings (Loss) per Share / Unit

Basic earnings (loss) per share / unit is computed by dividing net earnings (loss) attributable to the Company by the weighted average number of common shares / units outstanding during the period. Diluted earnings (loss) per share / unit is computed by dividing net earnings (loss) attributable to the Company by the weighted-average share / units outstanding during the period after adjusting for the impact of securities that would have a dilutive effect on earnings (loss) per share / unit.

 

All earnings (loss) for the Predecessor period from January 1, 2020 to January 28, 2020 were entirely allocable to Predecessor shareholders and non-controlling interest. Additionally, due to the impact of the Sponsor Acquisition, the Company’s capital structure for the Predecessor and Successor periods is not comparable. As a result, the presentation of earnings (loss) per share / unit for the periods prior to such transaction is not meaningful and only earnings (loss) per share / unit for periods subsequent to the Sponsor Acquisition are presented herein.

 

See Note 12, Earnings (Loss) per Share / Unit, for additional information on dilutive securities.

Recently Issued Pronouncements Not Yet Adopted

In January of 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, that refined the scope of Topic 848 and clarified some of its provisions. The amendments permit entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by the discounting transition. The Company is evaluating the impact of the ASU as it relates to arrangements that reference London Inter-Bank Offered Rate (“LIBOR”).  

Note 3 - Income Taxes

The Company is subject to U.S. federal and state income taxes and will file consolidated income tax returns for U.S. federal and certain jurisdictions with respect to its allocable share of any net taxable income of Buzz Holdings L.P. A provision for these taxes has been recorded accordingly. The differences between our effective tax rate and the U.S. federal statutory tax rate of 21% generally results from various factors, including the geographical distribution of taxable income, state and foreign taxes, tax credits, contingency reserves for uncertain tax positions and permanent differences between the book and tax treatment of certain items. Additionally, the amount of income taxes is subject to our interpretation of applicable tax laws in the jurisdictions in which we file. For the three and nine months ended September 30, 2021, our effective tax rate is lower than the U.S. federal statutory tax rate of 21% primarily due to the geographical distribution of our earnings, nondeductible permanent differences, nondeductible stock-based compensation, consideration of nontaxable entities and the inability to record a benefit for certain tax losses and benefits generated in the current year.

 

Our effective tax rate for the three and nine months ended September 30, 2021 also includes the discrete impact of the Company’s restructuring activities that occurred on January 1, 2021. Deferred tax liabilities of $448.2 million recorded at Maltese and UK entities related to relevant intangible property were written off in the first quarter of 2021, offset by $6.7 million of deferred tax assets recorded in Malta for related tax basis in transferred intangible property resulting in a net income tax benefit of $441.5 million during the period. In addition, the tax benefit for the three and nine months ended September 30, 2021 reflects the impact of our assessment that we will not be able to record the benefit of certain current year deferred tax assets for which a valuation allowance is recorded.

 

Note 4 - Tax Receivable Agreement

In connection with the Reorganization Transactions and our IPO, we entered into a tax receivable agreement with certain of our pre-IPO owners that provides for the payment by Bumble, Inc. to such pre-IPO owners of 85% of the benefits, that Bumble Inc. realizes, or is deemed to realize, as a result of Bumble Inc.’s allocable share of existing tax basis acquired in our IPO and other tax benefits related to entering into the tax receivable agreement.

We estimate the amount of existing tax basis with respect to which our pre-IPO owners will be entitled to receive payments under the tax receivable agreement (assuming all Pre-IPO Common Unitholders exchanged their Common Units for shares of Class A common

16


 

stock on the date of the IPO, and assuming all vested Incentive Units were converted to Common Units and immediately exchanged for shares of Class A common stock at the IPO prices of $43.00 per share of Class A common stock) is approximately $2,603 million which includes Bumble Inc.’s allocable share of existing tax basis acquired in the IPO, which we have determined to be approximately $1,728 million. In determining Bumble Inc.’s allocable share of existing tax basis acquired in the IPO, we have given retrospective effect to certain exchanges of Common Units for Class A shares that occurred after the IPO that were contemplated to have occurred pursuant to the Blocker Restructuring. The payments under the tax receivable agreement are not conditioned upon continued ownership of the Company by the pre-IPO owners.

 

We have determined that it is more likely than not that we will be unable to realize tax benefits related to certain basis adjustments and acquired net operating losses that were received in connection with the Reorganization Transactions and our IPO. As a result of this determination, we have not recorded the benefit of these deferred tax assets as of September 30, 2021. The realizability of the deferred tax assets is evaluated based on all positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. We will assess the realizability of the deferred tax assets at each reporting period, and a change in our estimate of our liability associated with the tax receivable agreement may result as additional information becomes available, including results of operations in future periods. At the time of the Sponsor Acquisition, the assets and liabilities of Bumble Holdings were adjusted to fair value on the closing date of the business combination for both financial reporting and income tax purposes. As a result of the IPO transaction, we inherited certain tax benefits associated with this stepped-up basis (“Common Basis”) created when certain pre-IPO owners acquired their interests in Bumble Holdings in the Sponsor Acquisition. This Common Basis entitles us to the depreciation and amortization deductions previously allocable to the pre-IPO owners. Based on current projections, we anticipate having sufficient taxable income to be able to realize the benefit of this Common Basis and have recorded a tax receivable agreement liability of $381.2 million related to these benefits. To the extent that we determine that we are able to realize the tax benefits associated with the basis adjustments and net operating losses, we would record an additional liability of $267.4 million for a total liability of $648.6 million. If, in the future, we are not able to utilize the Common Basis, we would record a reduction in the tax receivable agreement liability that would result in a benefit recorded within our consolidated statement of operations. During the three months ended September 30, 2021, our tax receivable agreement liability increased by $24.4 million principally due to the effects of the secondary offering of 20.7 million shares of Class A common stock by certain selling stockholders affiliated with Blackstone Inc.

Note 5 - Business Combination

On January 29, 2020, Bumble Holdings, and the wholly owned indirect subsidiary, Buzz Merger Sub Limited, executed an Agreement and Plan of Merger (the “Merger Agreement”) with Worldwide Vision Limited whereby Bumble Holdings agreed to purchase all of the outstanding equity interest of Worldwide Vision Limited, for a purchase price of approximately $2.9 billion, as detailed below. The Sponsor Acquisition was accounted for using the acquisition method of accounting which required that the assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date (based on Level 3 measurements).

The following tables summarize the purchase consideration and the purchase price allocation to estimated fair values of the identifiable assets acquired and liabilities assumed (in thousands):

 

Cash paid to former owners of Worldwide Vision Limited

 

$

2,239,827

 

Issued ownership interest in the Company

 

 

349,992

 

Cash paid to related party

 

 

125,000

 

Settlement of amounts owed to Worldwide Vision Limited by
   former owners

 

 

42,075

 

Buyout of minority shareholders of a subsidiary

 

 

44,750

 

Consideration related to holdback settlement

 

 

36,418

 

Fair value of contingent earn-out liability

 

 

12,900

 

Total purchase consideration

 

$

2,850,962

 

 

17


 

 

Purchase price allocation

 

$

2,850,962

 

Less fair value of net assets acquired:

 

 

 

Cash and cash equivalents

 

 

53,927

 

Other current assets

 

 

127,464

 

Property and equipment

 

 

14,241

 

Intangible assets

 

 

1,785,000

 

Other noncurrent assets

 

 

17,826

 

Deferred revenue

 

 

(9,600

)

Other current liabilities

 

 

(143,293

)

Deferred income taxes

 

 

(398,688

)

Other long-term liabilities

 

 

(51,878

)

Net assets acquired

 

 

1,394,999

 

Goodwill

 

$

1,455,963

 

 

Goodwill was primarily attributable to assembled workforce, expected synergies and other factors.

The fair values of the identifiable intangible assets acquired at the date of Sponsor Acquisition were as follows (in thousands):

 

 

 

Acquisition
Date Fair
Value

 

 

Weighted-
Average
Useful Life
(Years)

 

Brands

 

$

1,430,000

 

 

Indefinite

 

Developed technology

 

 

220,000

 

 

 

5

 

User base

 

 

105,000

 

 

 

2.5

 

White label contracts

 

 

30,000

 

 

 

8

 

Total identifiable intangible assets acquired

 

$

1,785,000

 

 

 

 

 

The Company has white label contracts, whereby the Company's platform technology is licensed to other dating apps and websites. These contracts provide on-going revenue and value to the Company.

The fair values of brands and developed technology were determined using relief of royalty methodology. The fair values of user base and white label contracts were determined using excess earnings methodology. The valuations of intangible assets incorporate significant unobservable inputs and require significant judgment and estimates, including the amount and timing of future cash flows.

The Company recognized approximately $0.3 million and $48.2 million of transaction costs in the three months ended September 30, 2020 and the period from January 29, 2020 to September 30, 2020, respectively. Transaction costs incurred by the Predecessor associated with the Sponsor Acquisition were approximately $40.3 million and were included as an assumed liability by the Company at closing. These costs are recorded in “General and administrative expense” in the Successor and Predecessor consolidated statements of operations.

Concurrent with and related to the Sponsor Acquisition, the Company sold an app that it did not intend to continue operating to one of the sellers for an amount of $25.2 million, which reduced the purchase price disclosed above by the same amount.

Note 6 - Property and Equipment, net

A summary of the Company’s property and equipment, net is as follows (in thousands):

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Computer equipment

 

$

21,321

 

 

$

18,423

 

Leasehold improvements

 

 

5,636

 

 

 

5,318

 

Furniture and fixtures

 

 

884

 

 

 

861

 

Total property and equipment, gross

 

$

27,841

 

 

$

24,602

 

Accumulated depreciation

 

 

(13,899

)

 

 

(7,769

)

Total property and equipment, net

 

$

13,942

 

 

$

16,833

 

 

18


 

Depreciation expense related to property and equipment, net for the three months ended September 30, 2021 and 2020 was $2.3 million and $2.0 million, respectively, $7.0 million for the nine months ended September 30, 2021, $5.3 million for the period from January 29, 2020 to September 30, 2020, and $0.4 million for the period from January 1, 2020 to January 28, 2020.

Note 7 - Goodwill and Intangible Assets, net

Goodwill

The changes in the carrying amount of goodwill for the periods presented is as follows (in thousands):

 

Balance as of December 31, 2020

 

$

1,540,915

 

Goodwill adjustment, net (1)

 

 

(803

)

Balance as of September 30, 2021

 

$

1,540,112

 

 

(1) Relates to the impact of $0.8 million of deferred income taxes.

Intangible Assets, net

A summary of the Company’s intangible assets, net is as follows (in thousands):

 

 

 

September 30, 2021

 

 

 

Gross
Carrying
Amount

 

 

Accumulated
Amortization

 

 

Net
Carrying
Amount

 

 

Weighted-
Average
Remaining
Useful
Life (Years)

 

Brands

 

$

1,512,755

 

 

$

 

 

$

1,512,755

 

 

Indefinite

 

Developed technology

 

 

244,813

 

 

 

(81,604

)

 

 

163,209

 

 

 

3.3

 

User base

 

 

112,695

 

 

 

(75,130

)

 

 

37,565

 

 

 

0.8

 

White label contracts

 

 

33,384

 

 

 

(6,953

)

 

 

26,431

 

 

 

6.3

 

Other

 

 

4,230

 

 

 

(801

)

 

 

3,429

 

 

 

5.5

 

Total intangible assets, net

 

$

1,907,877

 

 

$

(164,488

)

 

$

1,743,389

 

 

 

 

 

 

 

December 31, 2020

 

 

 

Gross
Carrying
Amount

 

 

Accumulated
Amortization

 

 

Net
Carrying
Amount

 

 

Weighted-
Average
Remaining
Useful
Life (Years)

 

Brands

 

$

1,511,269

 

 

$

 

 

$

1,511,269

 

 

 Indefinite

 

Developed technology

 

 

244,813

 

 

 

(44,884

)

 

 

199,929

 

 

 

4.1

 

User base

 

 

112,695

 

 

 

(41,322

)

 

 

71,373

 

 

 

1.6

 

White label contracts

 

 

33,384

 

 

 

(3,826

)

 

 

29,558

 

 

 

7.1

 

Other

 

 

352

 

 

 

(71

)

 

 

281

 

 

 

4.0

 

Total intangible assets, net

 

$

1,902,513

 

 

$

(90,103

)

 

$

1,812,410

 

 

 

 

 

Amortization expense related to intangible assets, net for the three months ended September 30, 2021 and September 30, 2020, was $24.8 million and $23.4 million, respectively, and $74.0 million for the nine months ended September 30, 2021, $60.6 million for the period from January 29, 2020 to September 30, 2020 and $0.0 million for the period from January 1, 2020 to January 28, 2020.

As of September 30, 2021, amortization of intangible assets with definite lives is estimated to be as follows (in thousands):

 

Remainder of 2021

 

$

24,759

 

2022

 

 

80,253

 

2023

 

 

53,958

 

2024

 

 

53,714

 

2025 and thereafter

 

 

17,861

 

Total

 

$

230,545

 

 

Note 8 - Other Financial Data

 

19


 

Consolidated Balance Sheets Information

 

Other current assets are comprised of the following balances (in thousands):

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Capitalized aggregator fees

 

$

8,239

 

 

$

5,533

 

Prepayments

 

 

14,577

 

 

 

6,435

 

Income tax receivable (1)

 

 

56,645

 

 

 

59,364

 

Capitalized initial public offering costs (2)

 

 

 

 

 

3,033

 

Other receivables

 

 

4,079

 

 

 

7,022

 

Total other current assets

 

$

83,540

 

 

$

81,387

 

 

 

(1) On October 29, 2021, a $24.5 million tax refund was received that will reduce the income tax receivable balance.

(2) Upon completion of the IPO, the capitalized IPO costs were offset against the proceeds raised from the IPO as a reduction of additional paid-in capital and noncontrolling interests.

 

Accrued expenses and other current liabilities are comprised of the following balances (in thousands):

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Legal liabilities

 

$

9,025

 

 

$

55,144

 

Accrued expenses

 

 

35,335

 

 

 

36,184

 

Lease liabilities

 

 

4,186

 

 

 

4,933

 

Income tax payable

 

 

41,918

 

 

 

71,324

 

Other payables

 

 

14,296

 

 

 

13,401

 

Total accrued expenses and other current liabilities

 

$

104,760

 

 

$

180,986

 

 

Other non-current liabilities are comprised of the following balances (in thousands):

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Lease liabilities

 

$

6,636

 

 

$

5,831

 

Contingent earn-out liability

 

 

118,359

 

 

 

40,700

 

Stock-based compensation liabilities (1)

 

 

 

 

 

13,765

 

Other liabilities

 

 

351

 

 

 

1,894

 

Total other liabilities

 

$

125,346

 

 

$

62,190

 

 

(1) Prior to the IPO, the Company recognized $8.3 million of liability-settled stock-based compensation expense for the three months ended March 31, 2021. In connection with the IPO, the liability-settled awards were reclassified to equity-settled awards.

 

Note 9 - Fair Value Measurements

 

The following tables present the Company’s financial instruments that are measured at fair value on a recurring basis (in thousands):

 

 

 

September 30, 2021

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total Fair
Value
Measurements

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

291,575

 

 

$

 

 

$

 

 

$

291,575

 

Derivative asset

 

 

 

 

 

1,204

 

 

 

 

 

 

1,204

 

Equity investments

 

 

 

 

 

 

 

 

1,968

 

 

$

1,968

 

 

 

$

291,575

 

 

$

1,204

 

 

$

1,968

 

 

$

294,747

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent earn-out liability

 

$

 

 

$

 

 

$

118,359

 

 

$

118,359

 

 

 

$

 

 

$

 

 

$

118,359

 

 

$

118,359

 

 

20


 

 

 

 

December 31, 2020

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total Fair
Value
Measurements

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

128,029

 

 

$

 

 

$

 

 

$

128,029

 

Deposits on credit card

 

 

257

 

 

 

 

 

 

 

 

 

257

 

Equity investments

 

 

 

 

 

 

 

 

1,458

 

 

 

1,458

 

 

 

$

128,286

 

 

$

 

 

$

1,458

 

 

$

129,744

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent earn-out liability

 

$

 

 

$

 

 

$

40,700

 

 

$

40,700

 

Derivative liability

 

 

 

 

 

1,586

 

 

 

 

 

 

1,586

 

 

 

$

 

 

$

1,586

 

 

$

40,700

 

 

$

42,286

 

 

There were no transfers between levels between September 30, 2021 and December 31, 2020.

 

The carrying value of accounts receivable, accounts payable, income tax payable, accrued expenses and other payables approximate their fair values due to the short-term maturities of these instruments.

 

Contingent Consideration Arrangement

 

As of September 30, 2021, there is a contingent consideration arrangement, consisting of an earn-out payment to former shareholders of Worldwide Vision Limited of up to $150 million. The Company’s contingent earn-out liability is measured at fair value on a recurring basis using significant unobservable inputs (Level 3). The Company determined the fair value of the contingent earn-out liability using a closed-form option pricing model to determine the amount of the liability and present valued the amount payable in the future as of the current reporting date using an appropriate discount rate. The option pricing model estimate relies on standard inputs such as an estimate of volatility, term, and the risk free rate over such term. The model estimates the probability that the earn-out condition will be met in the future and calculates the expected earn-out payment to the former shareholders. As of September 30, 2021 and December 31, 2020, the fair value of the contingent earn-out was $118.4 million and $40.7 million, respectively, and is included within other liabilities in the accompanying condensed consolidated balance sheets.

 

The fair value of the contingent earn-out liability is sensitive to our equity volatility, discount rates, and our common stock price which is sensitive to changes in the forecasts of earnings and/or the relevant operating metrics. The Company remeasures the fair value of the contingent earn-out liability each reporting period, and changes are recognized in general and administrative expense in the accompanying condensed consolidated statements of operations. The changes in fair value were $5.2 million and $77.7 million for the three and nine months ended September 30, 2021, respectively.

Note 10 - Debt

Total debt is comprised of the following (in thousands):

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Term Loan due January 29, 2027

 

$

640,000

 

 

$

845,000

 

Less: unamortized debt issuance costs

 

 

16,414

 

 

 

18,786

 

Less: current portion of debt, net

 

 

2,588

 

 

 

5,338

 

Total long-term debt, net

 

$

620,998

 

 

$

820,876

 

Credit Agreement

On January 29, 2020, the Company and the wholly-owned subsidiaries, Buzz Bidco LLC, Buzz Merger Sub Limited, and Buzz Finco LLC (collectively, the “Borrowers”) entered into a credit agreement (the “Original Credit Agreement”). The Original Credit Agreement permitted the Company to borrow up to $625.0 million through a seven-year $575.0 million term loan (“Initial Term Loan Facility”), as well as a five-year revolving credit facility of $50.0 million (the “Revolving Credit Facility”) and $25.0 million available through letters of credit. In connection with the Original Credit Agreement, the Company incurred and paid debt issuance costs of $16.3 million during the year ended December 31, 2020.

 

On October 19, 2020, the Company amended the Original Credit Agreement and entered into the First Amendment to the Credit Agreement (the “Amended Credit Agreement”), which provides for incremental borrowing of an aggregate principal amount of $275.0 million (the “Incremental Term Loan Facility”, and, together with the Initial Term Loan Facility, the “Term Loan Facility” the

21


 

Term Loan Facility together with the Revolving Credit Facility, the “Senior Secured Credit Facilities”). The terms of the Amended Credit Agreement were unchanged from the Original Credit Agreement, and the sole purpose of the Amendment was to increase the principal available to the Company. In connection with the Amended Credit Agreement, the Company incurred and paid debt issuance costs of $4.8 million during the year ended December 31, 2020.

 

On March 31, 2021, the Company used proceeds from the IPO to repay outstanding indebtedness on the Incremental Term Loan Facility in an aggregate principal amount of $200.0 million, which has prepaid our obligated principal repayments until maturity on the Incremental Term Loan and, as a result, has reduced our contractual obligations.

 

Based on the calculation of the applicable consolidated total leverage ratio, the applicable margin for borrowings under the Revolving Credit Facility is between 1.25% to 1.75% with respect to base rate borrowings and between 2.25% and 2.75% with respect to LIBOR rate borrowings under the Term Loan Facility, in addition to a base rate. The interest rates in effect for the Initial Term Loan Facility and the Incremental Term Loan Facility as of September 30, 2021 were 2.83% and 3.75%, respectively. The Term Loan Facility will mature on January 29, 2027 and principal amounts outstanding under the Revolving Credit Facility will be due and payable in full at maturity on January 29, 2025. As of September 30, 2021, and at all times during the period, the Company was in compliance with the financial debt covenants.

 

As the loans are issued with a floating rate of interest, the Company believes that the fair value of the obligations is approximated by the principal amount of the loans as of September 30, 2021. The carrying value of the Term Loan Facility includes the outstanding principal amount, less unamortized debt issuance costs. Therefore, the Company assumes the carrying value of the debt, before any transaction costs, would closely approximate the fair value of the loan obligation with the assumptions above.

Future maturities of long-term debt as of September 30, 2021, were as follows (in thousands):

 

Remainder of 2021

 

$

1,438

 

2022

 

 

5,750

 

2023

 

 

5,750

 

2024

 

 

5,750

 

2025 and thereafter

 

 

621,312

 

Total

 

$

640,000

 

 

Note 11 - Shareholders' Equity

 

Equity Structure Prior to Initial Public Offering and Reorganization

 

Limited Partner’s Interest

 

On January 29, 2020, Bumble Holdings, and the wholly owned indirect subsidiary, Buzz Merger Sub Limited, executed the Merger Agreement with Worldwide Vision Limited whereby Bumble Holdings agreed to purchase all of the outstanding equity interest of Worldwide Vision Limited (see Note 5, Business Combination). In conjunction with the Sponsor Acquisition, the equity that was in existence in the Predecessor periods was settled and no longer outstanding subsequent to January 29, 2020.

 

Prior to the IPO, Limited Partners' Interest was inclusive of Capital Contribution from the Parent, Additional Paid-in Capital, and Retained Earnings. The capital structure of Bumble Holdings consisted of two different classes of limited partnership interests, Class A and Class B units. Class A units were issued and held by Blackstone, an affiliate of Accel Partners LP., our Founder, and certain members of senior management in exchange for capital contributions (“Class A Units”). Class B units were issued to senior management, select members of the Company's board of directors (the “Board”) and select employees of Bumble Holdings and represent profit interests of Bumble Holdings which vest subject to certain service and performance conditions.

 

As of December 31, 2020, 2,453,784,599 Class A Units and 153,273,895 Class B Units were outstanding.

 

Noncontrolling Interests

 

Prior to the IPO, the Company’s noncontrolling interests represented a reserve for minority interests’ share of accumulated profits and losses of Huggle App (UK) Limited and Lumen App Limited and pre-Sponsor Acquisition, Bumble Holding Limited and its subsidiaries.

 

Initial Public Offering

22


 

 

On February 16, 2021, the Company completed its IPO of 57.5 million shares of Class A common stock at an offering price of $43 per share. The Company received net proceeds of $2,361.2 million after deducting underwriting discounts and commissions. The Company used the proceeds from the issuance of 48.5 million shares ($1,991.6 million) in the IPO to redeem shares of Class A common stock and purchase Common Units from our Sponsor, at a price per share / Common Unit equal to the IPO price, net of underwriting discounts and commissions. The Company used a portion of the proceeds from the issuance of 9.0 million shares ($369.6 million) in the IPO to repay $200 million of outstanding indebtedness.

Secondary Offering

On September 15, 2021, the Company completed a secondary offering of 20.7 million shares of Class A common stock on behalf of certain selling stockholders affiliated with Blackstone Inc. (the "Selling Stockholders") at a price to public of $54.00 per share. This transaction resulted in the issuance of 9.2 million Class A shares for the period ending September 30, 2021.

Bumble did not sell any shares of Class A common stock in the offering and did not receive any of the proceeds from the sale. Bumble paid the costs associated with the sale of shares by the Selling Stockholders, net of the underwriting discounts.

Reorganization

 

Prior to the completion of the IPO on February 10, 2021, the limited partnership agreement of Bumble Holdings was amended and restated that resulted in the following:

 

Bumble Inc. became the general partner of Bumble Holdings with 100% of the voting power and control of the management of Bumble Holdings.
All outstanding Class A Units were either (1) reclassified into a new class of limited partnership interest referred to as “Common Units”, or (2) directly exchanged for vested shares of Class A common stock of Bumble Inc.
All outstanding Class B Units were either reclassified into a new class of limited partner interest referred to as “Incentive Units”, or directly exchanged for vested shares of Class A common stock and restricted shares of Class A common stock of Bumble Inc.
Recognition of a noncontrolling interest due to the Pre-IPO Shareholders retaining an economic interest in Bumble Holdings related to Common Units not exchanged for vested shares of Class A common stock.

 

As part of the Reorganization Transactions, the Blocker Companies entered into certain restructuring transactions that resulted in the Pre-IPO Shareholders acquiring shares of newly issued shares of Class A common stock in exchange for their ownership interests in the Blocker Companies and the Company acquiring an equal number of outstanding Common Units.

 

Additionally, Bumble Inc. and the holders of all Common Units entered into an exchange agreement in which the holders of the Common Units will have the right on a quarterly basis to exchange their Common Units for shares of Class A common stock of the Company on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications.

 

Subsequent to the Reorganization Transactions, our Sponsor effected certain exchanges of Common Units for Class A shares that were contemplated to have occurred pursuant to the Blocker Restructuring, with the net change to the capital structure being 4,455,510 Common Units in Bumble Holdings being exchanged on April 1, 2021, on a one-for-one basis, for Class A common stock in the Company. We gave retrospective effect to these transactions when estimating our tax receivable agreement liability, see Note 3 – Income Taxes.

 

Amendment and Restatement of Certificate of Incorporation

 

The Company’s amended and restated certificate of incorporation has three classes of ownership interests: 6,000,000,000 shares of Class A common stock, par value $0.01 per share, 1,000,000 shares of Class B common stock, par value $0.01 per share, and 600,000,000 shares of preferred stock, par value $0.01 per share.

 

Class A Common Stock

 

Shares of Class A common stock have both voting and economic rights. Holders of Class A common stock are entitled to one vote for each share of Class A common stock held. Our Founder and affiliates of Blackstone (“Principal Stockholders”) are entitled to outsized voting rights. Each share of Class A common stock held by a Principal Stockholder is entitled to ten votes. Shares of Class A common

23


 

stock are entitled to dividends and pro rata distribution of remaining available assets upon liquidation. Shares of Class A common stock do not have preemptive, subscription, redemption or conversion rights.

 

As of September 30, 2021, there were 129,241,580 shares of Class A common stock outstanding.

 

Class B Common Stock

 

Shares of Class B common stock have voting but no economic rights. Holders of Class B common stock are entitled to one vote for each Common Unit of Bumble Holdings held. Each Principal Stockholder that holds Class B common stock is entitled to a number of votes equal to 10 times the aggregate number of Common Units held of Bumble Holdings. Shares of Class B common stock do not have any right to receive dividends or distribution upon liquidation.

 

As of September 30, 2021, there were 20 shares of Class B common stock outstanding.

 

Preferred Stock

 

The Company is authorized to issue, without the approval of its stockholders, one or more series of preferred stock. The Board may determine, with respect to any series of preferred stock, the powers (including voting powers), preferences and relative, participating, optional or other special rights.

 

As of September 30, 2021, no preferred stock has been issued.

 

Treasury Stock

 

During the three months ended March 31, 2021, the Company used a portion of the proceeds from the issuance of 48.5 million shares in the IPO to redeem shares of Class A common stock from the pre-IPO owners. Repurchases of the Company's common stock are included in treasury stock at the cost of shares repurchased.

During the three months ended June 30, 2021, the Company retired and restored the treasury stock to the status of authorized, but unissued, shares of Class A Common Stock.

 

Noncontrolling Interests

 

The Company’s noncontrolling interests represent a reserve related to the Common Units held by the pre-IPO Common Unitholders and the Common Units to which continuing incentive unitholders would be entitled to following exchange of their Vested Incentive Units.

Note 12 - Earnings (Loss) per Share / Unit

Due to the impact of the Sponsor Acquisition, the Company’s capital structure for the Predecessor and Successor periods is not comparable. As a result, the presentation of earnings (loss) per share / unit for the periods prior to such transaction is not meaningful and only earnings (loss) per share / unit for periods subsequent to the Sponsor Acquisition are presented herein.

The Company computes earnings per share (“EPS”) of Class A common stock using the two-class method required for participating securities. The Company considers unvested restricted shares and vested RSUs to be participating securities because holders are entitled to be credited with dividend equivalent payments, upon the payment by the Company of dividends on shares of Common Stock.

Undistributed earnings allocated to participating securities are subtracted from net earnings (loss) attributable to Bumble Inc. in determining net earnings (loss) attributable to common stockholders. Basic EPS is computed by dividing net earnings (loss) attributable to common stockholders / unitholders by the weighted-average number of shares of our Class A Common Stock / Units outstanding.

For the calculation of diluted EPS, net earnings (loss) attributable to common stockholders / unitholders for basic EPS is adjusted by the effect of dilutive securities.

Diluted EPS attributable to common stockholders / unitholders is computed by dividing the resulting net earnings (loss) attributable to common stockholders / unitholders by the weighted-average number of common shares / units outstanding, adjusted to give effect to dilutive elements including restricted shares, RSUs, and options to the extent these are dilutive.

24


 

The following table sets forth a reconciliation of the numerators used to compute the Company's basic and diluted earnings (loss) per share / unit

 

 

Three Months
Ended
September 30,
2021

 

 

Three Months
Ended
September 30,
2020

 

 

Nine Months
Ended
September 30,
2021

 

 

Period from
January 29,
through
September 30,
2020

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

(10,671

)

 

$

(22,824

)

 

$

301,624

 

 

$

(84,098

)

Net loss attributable to noncontrolling interests

 

 

(3,786

)

 

 

(35

)

 

 

(26,198

)

 

 

(99

)

Net earnings (loss) attributable to Bumble Inc. shareholders / Buzz Holdings L.P. owners

 

$

(6,885

)

 

$

(22,789

)

 

$

327,822

 

 

$

(83,999

)

The following table sets forth the computation of the Company's basic and diluted earnings (loss) per share / unit (in thousands, except share / unit amounts, and per share / unit amounts, unaudited).

 

 

Three Months
Ended
September 30,
2021

 

 

Three Months
Ended
September 30,
2020

 

 

Nine Months
Ended
September 30,
2021

 

 

Period from
January 29,
through
September 30,
2020

 

Basic earnings (loss) per share / unit attributable to common stockholders / unitholders

 

 

 

 

 

 

 

 

 

 

 

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Allocation of net earnings (loss) attributable to Bumble Inc. shareholders / Buzz Holdings L.P. owners

 

$

(6,895

)

 

$

(22,824

)

 

$

191,165

 

 

$

(83,999

)

Less: net earnings (loss) attributable to participating securities

 

 

 

 

 

 

 

 

528

 

 

 

 

Net earnings (loss) attributable to common stockholders / unitholders

 

$

(6,895

)

 

$

(22,824

)

 

$

190,637

 

 

$

(83,999

)

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares of Class A common stock / units outstanding

 

 

121,234,122

 

 

 

2,453,784,599

 

 

 

118,860,555

 

 

 

2,454,008,676

 

Basic earnings (loss) per share / unit attributable to common stockholders / unitholders

 

$

(0.06

)

 

$

(0.01

)

 

$

1.60

 

 

$

(0.03

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share / unit attributable to common stockholders / unitholders

 

 

 

 

 

 

 

 

 

 

 

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Allocation of net earnings (loss) attributable to Bumble Inc. shareholders / Buzz Holdings L.P. owners

 

$

(6,895

)

 

$

(22,824

)

 

$

186,348

 

 

$

(83,999

)

Increase in net earnings (loss) attributable to common shareholders upon conversion of potentially dilutive Common Units

 

 

 

 

 

 

 

 

115,276

 

 

 

 

Less: net earnings (loss) attributable to participating securities

 

 

 

 

 

 

 

 

514

 

 

 

 

Net earnings (loss) attributable to common stockholders / unitholders

 

$

(6,895

)

 

$

(22,824

)

 

$

301,110

 

 

$

(83,999

)

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares / units used in basic computation

 

 

121,234,122

 

 

 

2,453,784,599

 

 

 

118,860,555

 

 

 

2,454,008,676

 

Add: weighted-average effect of dilutive securities

 

 

 

 

 

 

 

 

 

 

 

 

Restricted Shares

 

 

 

 

 

 

 

 

 

 

 

 

RSUs

 

 

 

 

 

 

 

 

1,056,484

 

 

 

 

Options

 

 

 

 

 

 

 

 

7,425

 

 

 

 

Common Units to Convert to Class A Common Stock

 

 

 

 

 

 

 

 

72,672,843

 

 

 

 

Weighted average shares of Class A common stock / units outstanding used to calculate diluted earnings (loss) per share / unit

 

 

121,234,122

 

 

 

2,453,784,599

 

 

 

192,597,307

 

 

 

2,454,008,676

 

Diluted earnings (loss) per share / unit attributable to common stockholders / unitholders

 

$

(0.06

)

 

$

(0.01

)

 

$

1.56

 

 

$

(0.03

)

 

Note 13 - Stock-based Compensation

Total stock-based compensation cost was as follows:

25


 

 

 

 

Successor

 

 

 

Predecessor

 

(In thousands)

 

Three Months
Ended
September 30,
2021

 

 

Three Months
Ended
September 30,
2020

 

 

Nine Months
Ended
September 30,
2021

 

 

Period from
January 29,
through
September 30,
2020

 

 

 

Period from
January 1,
through
January 28,
2020

 

Cost of revenue

 

$

808

 

 

 

155

 

 

$

3,019

 

 

$

174

 

 

 

$

 

Selling and marketing expense

 

 

2,545

 

 

 

721

 

 

 

10,186

 

 

 

805

 

 

 

 

75

 

General and administrative expense

 

 

11,287

 

 

 

5,341

 

 

 

49,155

 

 

 

9,093

 

 

 

 

3,997

 

Product development expense

 

 

9,123

 

 

 

2,725

 

 

 

37,142

 

 

 

3,046

 

 

 

 

84

 

Total stock-based compensation expense

 

$

23,763

 

 

$

8,942

 

 

$

99,502

 

 

$

13,118

 

 

 

$

4,156

 

 

Predecessor Plans

Prior to the Sponsor Acquisition, Worldwide Vision Limited operated a share option plan and a growth share plan, and Bumble Holding Limited, a subsidiary of Worldwide Vision Limited, had issued phantom stock.

In connection with the Sponsor Acquisition, Worldwide Vision Limited’s stock-based compensation plans were terminated and the phantom stock awards issued by Bumble Holding Limited were settled, including $4.0 million that was recognized as stock-based compensation expense in general and administrative expense in the accompanying condensed consolidated statement of operations for the period from January 1, 2020 to January 28, 2020.

Successor Plans

Prior to the IPO, Bumble Holdings had three active plans under which awards had been granted to various employees of the Company, including key management personnel, based on their management grade.

In connection with the Sponsor Acquisition, Bumble Holdings and Buzz Management Aggregator L.P., an interest holder in Bumble Holdings, adopted two new Incentive Plans for the employees’ performance and retention purposes, namely the Employee Incentive Plan (“Non-US Plan”) and the Equity Incentive Plan (“US Plan”). The participants of the Non-US Plan and US Plan are selected employees of the Company and the subsidiaries. Bumble Holdings and Buzz Management Aggregator L.P. also adopted one incentive plan for Whitney Wolfe Herd (the “Founder Plan”). Awards granted under the Founder Plan and US Plan were in the form of Class B Units in Bumble Holdings and Class B Units in Buzz Management Aggregator L.P, respectively (collectively, the “Class B Units”). Under the Non-US Plan, participants receive phantom awards of Class B Units in Buzz Management Aggregator L.P. (the “Phantom Class B Units”) that are settled in cash equal to the notional value of the Buzz Management Aggregator Class B Units at the settlement date.

The Class B Units under the Founder Plan and US Plan and the Phantom Class B Units under the Non-US Plan comprise:

Time-Vesting Class B Units and Time-Vesting Phantom Class B Units (60% of the Class B Units and Phantom Class B Units granted) that generally vest over a five-year service period and for which expense is recognized under a graded expense attribution model; and
Exit-Vesting Class B Units and Exit-Vesting Phantom Class B Units (40% of the Class B Units and Phantom Class B Units granted). Vesting for these awards is based on a liquidity event in which affiliates of Blackstone receive cash proceeds in respect of its Class A units in the Company prior to the termination of the participant. Further, the portion of the Exit-Vesting Class B Units and Exit-Vesting Phantom Class B Units that vest is based on certain Multiple on Invested Capital (“MOIC”) and Internal Rate of Return (“IRR”) hurdles associated with a liquidity event. The MOIC and IRR hurdles impact the fair value of the awards. As the vesting of these units is contingent upon a specified liquidity event, no expense was required to be recorded prior to the occurrence of a liquidity event.

Time-Vesting Class B Units and Exit-Vesting Class B Units

Expense for the Time-Vesting Class B Units and Exit-Vesting Class B Units was based on the grant date fair value of the Class B Units. The grant date fair value was measured using a Monte Carlo model, which incorporates various assumptions noted in the following table. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility was calculated based on the observed equity volatility for comparable companies. The expected time to liquidity event was based on management’s estimate of time to an expected liquidity event. The dividend yield was based on the Company’s expected dividend rate. The risk-free interest rate was based on U.S. Treasury zero-coupon issues. Forfeitures were accounted for as they occurred.

26


 

The weighted-average assumptions the Company used in the Monte Carlo model for 2020 are as follows:

 

Dividend yield

 

 

 

Expected volatility

 

 

58

%

Risk-free interest rate

 

 

0.86

%

Expected time to liquidity event (years)

 

 

4.7

 

 

Post-IPO Award Reclassification

In connection with the Company’s IPO, awards under the Founder Plan, US Plan, and Non-US Plan were reclassified as follows:

The Time-Vesting and Exit-Vesting Class B Units in Bumble Holdings under the Founder Plan and granted to senior management under the US Plan were reclassified to vested Incentive Units (in the case of Vested Class B Units) and unvested Incentive Units (in the case of unvested Class B Units) in Bumble Holdings.
The Time-Vesting and Exit-Vesting Class B Units in Bumble Holdings (other than those granted to senior management) were reclassified to Class A common stock (in the case of vested Class B Units) and Restricted Shares of Class A common stock (in the case of unvested Class B Units) in the Company.
The Time-Vesting and Exit-Vesting Phantom Class B Units in Bumble Holdings were reclassified into vested RSUs (in the case of vested Class B Phantom Units) and unvested RSUs (in the case of unvested Class B Phantom Units) in the Company.

In all cases of respective reclassifications, the Post-IPO awards retained the same terms and conditions (including applicable vesting requirement). Each Post-IPO award was converted to reflect the $43.00 share price contemplated in the Company’s IPO while retaining the same economic value in the Company.

At the IPO date, we concluded that our public offering represents a qualifying liquidity event that would cause the Exit-Vesting awards’ performance conditions to be probable of occurring. As such, we have begun to recognize stock-based compensation expense in relation to the Exit-Vesting awards. During the three and nine months ended September 30, 2021, we recognized compensation cost related to the reclassified Exit-Vesting awards of $3.6 million and $22.7 million, respectively.

Time-Vesting and Exit-Vesting Class B Units Reclassified to Incentive Units in Bumble Holdings or Restricted Shares of Class A Common Stock in Bumble Inc.

The following table summarizes the information about Time-Vesting and Exit-Vesting Class B Units in Bumble Holdings that were reclassified to Incentive Units in Bumble Holdings or Restricted Shares of Class A Common Stock in the Company:

 

 

 

 

 

 

 

Time-Vesting Class B Units

 

 

Exit-Vesting Class B Units

 

 

 

Number of
Awards

 

 

Weighted-
Average
Grant Date
Fair
Value

 

 

Number of
Awards

 

 

Weighted-
Average
Grant Date
Fair
Value

 

Unvested as of December 31, 2020

 

 

91,910,366

 

 

$

0.55

 

 

 

61,273,583

 

 

$

0.43

 

Granted

 

 

 

 

 

 

 

 

 

 

 

 

Vested

 

 

(12,260,439

)

 

 

0.38

 

 

 

 

 

 

 

Forfeited

 

 

(281,304

)

 

 

0.36

 

 

 

(234,420

)

 

 

0.25

 

Effect of Reorganization and IPO

 

 

(91,629,062

)

 

 

0.55

 

 

 

(61,039,163

)

 

 

0.43

 

Outstanding as of September 30, 2021

 

 

 

 

$

 

 

 

 

 

$

 

 

27


 

Time-Vesting and Exit-Vesting Phantom Class B Units Converted to RSUs

The following table summarizes the information about Time-Vesting and Exit-Vesting Class Phantom B Units that were converted to RSUs in the Company:

 

 

 

 

 

 

 

Time-Vesting Phantom Class B Units

Exit-Vesting Phantom Class B Units

 

 

 

Number of
Awards

 

 

Number of
Awards

 

Unvested as of December 31, 2020

 

 

39,456,172

 

 

 

26,304,120

 

Granted

 

 

 

 

 

 

Vested

 

 

(7,151,666

)

 

 

 

Forfeited

 

 

(101,891

)

 

 

(69,781

)

Effect of Reorganization and IPO

 

 

(39,354,281

)

 

 

(26,234,339

)

Outstanding as of September 30, 2021

 

 

 

 

 

 

 

2021 Omnibus Plan

In connection with the IPO, the Company adopted the 2021 Omnibus Plan, which became effective on the date immediately prior to the effective date of the IPO. The 2021 Omnibus Plan provides the Company with flexibility to use various equity-based incentive awards as compensation tools to motivate and retain the Company’s workforce. The Company has initially reserved 30,000,000 shares of our common stock for the issuance of awards under the 2021 Omnibus Plan.

The fair value of Time-Vesting Awards granted or modified at the time of the IPO was determined using the Black-Scholes option pricing model with the following assumption ranges and fair value per unit:

 

Volatility

 

55%-60%

 

Expected Life

 

0.5 - 7.4 years

 

Risk-free rate

 

0.1%-0.8%

 

Fair value per unit

 

$43.00

 

Dividend yield

 

 

0.0

%

Discount for lack of marketability(1)

 

15% - 25%

 

 

The fair value of Exit-Vesting Awards granted or modified at the time of the IPO was determined using a Monte Carlo simulation approach in an option pricing framework, where the common stock price of the Company was evolved using a Geometric Brownian Motion over a period from the Valuation Date to the date of Management's expected exit date - a date at which MOIC and IRR realized by the Sponsor can be calculated ("Sponsor Exit"), with the following assumption ranges and fair value per unit:

 

Volatility

 

 

55

%

Expected Life

 

1.8 years

 

Risk-free rate

 

 

0.1

%

Fair value per unit

 

$43.00

 

Dividend yield

 

 

0.0

%

Discount for lack of marketability(1)

 

 

15

%

(1) Discount for lack of marketability for Time-Vesting Awards and Exit-Vesting Awards is only applicable for Incentive Units granted in Bumble Holdings at the time of the IPO.

28


 

Incentive Units in Bumble Holdings:

The following table summarizes information around Incentive Units in Bumble Holdings. These include grants of Class B Units that were reclassified into Incentive Units as described above, as well as Incentive Units issued to new recipients. The Incentive Units granted as a result of the reclassification of Class B Units retain the vesting attributes (including original service period vesting start date) of the Class B Units. The Company did not recognize any incremental fair value due to the reclassification of awards as the fair value per award was the same immediately prior to and after the Reclassification. The newly granted Incentive Units contain the same vesting attributes as Incentive Units granted as a result of the Reclassification.

 

 

 

 

 

 

 

Time-Vesting Incentive Units

 

 

Exit-Vesting Incentive Units

 

 

 

Number of
Awards

 

 

Weighted-
Average
Participation
Threshold

 

 

Number of
Awards

 

 

Weighted-
Average
Participation
Threshold

 

Effect of Reorganization and IPO as of February 10, 2021

 

 

6,353,868

 

 

$

12.36

 

 

 

4,235,912

 

 

$

12.36

 

Granted

 

 

351,387

 

 

 

38.72

 

 

 

308,850

 

 

 

32.18

 

Vested

 

 

(1,180,865

)

 

 

11.75

 

 

 

 

 

 

 

Forfeited

 

 

(263,745

)

 

 

11.64