Annual Statements Open main menu

Bumble Inc. - Quarter Report: 2022 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, 2022

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 31, 2022, Bumble Inc. had 129,676,937 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 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 geopolitical conditions and successful expansion into new markets
the impact of current developments in Russia, Ukraine and surrounding countries on our business and users, including the impact of our decision to discontinue our operations in Russia and remove our apps from the Apple App Store and Google Play Store in Russia and Belarus
control of us by Blackstone and our Founder (each, as defined below)
the outsized voting rights of Blackstone 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 the Coronavirus Disease 2019 (“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, changes in inflation or interest rates, 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, 2021 (“2021 Form 10-K”). 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 Fruitz, 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 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 (excluding Fruitz), 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 app subscription plan and/or in-app purchases on 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.
“Blackstone” or “our Sponsor” refer to investment funds associated with Blackstone Inc.
“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 app subscription plan and/or made an in-app purchase on 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 app subscription plan and/or in-app purchases on Bumble app in the relevant period.
“Bumble Holdings” refers to Buzz Holdings L.P., a Delaware limited partnership.
“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 app, our Chief Executive Officer and member of our board of directors, together with entities beneficially owned by her.
“Fruitz” refers to Flashgap SAS, which operates the Fruitz app.
“Incentive Units” refers to the 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 of Class A common stock, which was completed on February 16, 2021.
“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―Factors Affecting the Comparability of Our Results of Operations―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 were 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 that occurred prior to the completion of the IPO which were accounted for 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 Fruitz, 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

13

 

Notes to Unaudited Condensed Consolidated Financial Statements

14

Item 2.

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

44

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

60

Item 4.

Controls and Procedures

61

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

62

Item 1A.

Risk Factors

62

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

62

Item 6.

Exhibits

63

 

Signatures

64

 

 

 

 

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, 2022

 

 

December 31, 2021

 

ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

365,105

 

 

$

369,175

 

Accounts receivable, net of allowances

 

 

56,524

 

 

 

47,538

 

Other current assets

 

 

30,384

 

 

 

52,751

 

Total current assets

 

 

452,013

 

 

 

469,464

 

Right-of-use assets

 

 

19,784

 

 

 

26,410

 

Property and equipment, net

 

 

12,973

 

 

 

14,627

 

Goodwill

 

 

1,576,266

 

 

 

1,540,112

 

Intangible assets, net

 

 

1,673,776

 

 

 

1,696,798

 

Deferred tax assets, net

 

 

23,106

 

 

 

19,572

 

Other noncurrent assets

 

 

34,920

 

 

 

10,013

 

Total assets

 

$

3,792,838

 

 

$

3,776,996

 

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

 

 

 

 

 

 

Accounts payable

 

$

10,504

 

 

$

19,169

 

Deferred revenue

 

 

44,898

 

 

 

39,569

 

Accrued expenses and other current liabilities

 

 

78,477

 

 

 

111,482

 

Current portion of long-term debt, net

 

 

5,750

 

 

 

5,750

 

Total current liabilities

 

 

139,629

 

 

 

175,970

 

Long-term debt, net

 

 

620,239

 

 

 

623,231

 

Deferred tax liabilities, net

 

 

9,398

 

 

 

 

Payable to related parties pursuant to a tax receivable agreement

 

 

388,980

 

 

 

388,780

 

Other long-term liabilities

 

 

72,288

 

 

 

119,246

 

Total liabilities

 

 

1,230,534

 

 

 

1,307,227

 

Commitments and contingencies (Note 18)

 

 

 

 

 

 

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; 129,645,692 and 129,212,949 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)

 

 

1,297

 

 

 

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, 2022 and December 31, 2021, respectively)

 

 

 

 

 

 

Preferred stock (par value $0.01; authorized 600,000,000 shares; no shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)

 

 

 

 

 

 

Additional paid-in capital

 

 

1,661,410

 

 

 

1,588,426

 

Accumulated deficit

 

 

(29,301

)

 

 

(60,125

)

Accumulated other comprehensive income

 

 

62,075

 

 

 

78,603

 

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

 

 

1,695,481

 

 

 

1,608,196

 

Noncontrolling interests

 

 

866,823

 

 

 

861,573

 

Total shareholders’ / owners’ equity

 

 

2,562,304

 

 

 

2,469,769

 

Total liabilities and shareholders’ / owners’ equity

 

$

3,792,838

 

 

$

3,776,996

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2022

 

 

Three Months Ended September 30, 2021

 

 

Nine Months Ended September 30, 2022

 

 

Nine Months Ended September 30, 2021

 

Revenue

 

$

232,639

 

 

$

199,147

 

 

$

661,875

 

 

$

553,865

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

64,581

 

 

 

55,265

 

 

 

181,702

 

 

 

151,597

 

Selling and marketing expense

 

 

64,316

 

 

 

55,105

 

 

 

180,628

 

 

 

151,654

 

General and administrative expense

 

 

29,815

 

 

 

45,726

 

 

 

107,636

 

 

 

215,631

 

Product development expense

 

 

25,828

 

 

 

24,231

 

 

 

73,479

 

 

 

84,197

 

Depreciation and amortization expense

 

 

19,755

 

 

 

27,022

 

 

 

73,835

 

 

 

80,882

 

Total operating costs and expenses

 

 

204,295

 

 

 

207,349

 

 

 

617,280

 

 

 

683,961

 

Operating earnings (loss)

 

 

28,344

 

 

 

(8,202

)

 

 

44,595

 

 

 

(130,096

)

Interest income (expense)

 

 

(6,866

)

 

 

(5,676

)

 

 

(18,446

)

 

 

(18,861

)

Other income (expense), net

 

 

6,545

 

 

 

3,773

 

 

 

24,729

 

 

 

7,489

 

Income (loss) before income taxes

 

 

28,023

 

 

 

(10,105

)

 

 

50,878

 

 

 

(141,468

)

Income tax benefit (provision)

 

 

(1,618

)

 

 

(280

)

 

 

(5,756

)

 

 

437,122

 

Net earnings (loss)

 

 

26,405

 

 

 

(10,385

)

 

 

45,122

 

 

 

295,654

 

Net earnings (loss) attributable to noncontrolling interests

 

 

8,342

 

 

 

(3,052

)

 

 

14,298

 

 

 

(26,603

)

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

 

$

18,063

 

 

$

(7,333

)

 

$

30,824

 

 

$

322,257

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share / unit

 

$

0.14

 

 

$

(0.06

)

 

$

0.24

 

 

$

1.57

 

Diluted earnings (loss) per share / unit

 

$

0.14

 

 

$

(0.06

)

 

$

0.23

 

 

$

1.53

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2022

 

 

Three Months Ended September 30, 2021

 

 

Nine Months Ended September 30, 2022

 

 

Nine Months Ended September 30, 2021

 

Net earnings (loss)

 

$

26,405

 

 

$

(10,385

)

 

$

45,122

 

 

$

295,654

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Change in foreign currency translation adjustment

 

 

(14,220

)

 

 

(2,878

)

 

 

(24,398

)

 

 

(7,304

)

Total other comprehensive income (loss), net of tax

 

 

(14,220

)

 

 

(2,878

)

 

 

(24,398

)

 

 

(7,304

)

Comprehensive income (loss)

 

 

12,185

 

 

 

(13,263

)

 

 

20,724

 

 

 

288,350

 

Comprehensive income (loss) attributable to noncontrolling interests

 

 

4,051

 

 

 

(3,564

)

 

 

6,428

 

 

 

(28,751

)

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

 

$

8,134

 

 

$

(9,699

)

 

$

14,296

 

 

$

317,101

 

 

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

 

 

7


 

Bumble Inc.

Condensed Consolidated Statements of Changes in Equity

Three months ended September 30, 2022

(In thousands, except per share amounts)

(Unaudited)

 

 

Class A
Common Stock

 

Class B
Common Stock

 

Additional
Paid-in

 

Accumulated

 

Accumulated
Other
Comprehensive

 

Total Bumble Inc. Owners'/
Shareholders'

 

Noncontrolling

 

Total
Shareholders’
/ Owners'

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income (Deficit)

 

Equity

 

Interests

 

Equity

 

Balance as of June 30, 2022

 

129,559,112

 

$

1,296

 

 

20

 

$

 

$

1,623,562

 

$

(47,364

)

$

72,004

 

$

1,649,498

 

$

863,707

 

$

2,513,205

 

Net earnings (loss)

 

 

 

 

 

 

 

 

 

 

 

18,063

 

 

 

 

18,063

 

 

8,342

 

 

26,405

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

38,072

 

 

 

 

 

 

38,072

 

 

 

 

38,072

 

Cancellation of restricted shares

 

(3,329

)

 

 

 

 

 

 

 

(45

)

 

 

 

 

 

(45

)

 

45

 

 

 

Restricted stock units issued, net of shares withheld for taxes

 

89,909

 

 

1

 

 

 

 

 

 

(179

)

 

 

 

 

 

(178

)

 

(980

)

 

(1,158

)

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,929

)

 

(9,929

)

 

(4,291

)

 

(14,220

)

Balance as of September 30, 2022

 

129,645,692

 

$

1,297

 

 

20

 

$

 

$

1,661,410

 

$

(29,301

)

$

62,075

 

$

1,695,481

 

$

866,823

 

$

2,562,304

 

 

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

 

 

8


 

Bumble Inc.

Condensed Consolidated Statements of Changes in Equity

Three months ended September 30, 2021

(In thousands, except per share amounts)

(Unaudited)

 

 

Class A
Common Stock

 

Class B
Common Stock

 

Additional
Paid-in

 

Treasury
Stock

 

Accumulated

 

Accumulated
Other
Comprehensive

 

Total Bumble Inc. Owners'/
Shareholders'

 

Noncontrolling

 

Total
Owners’ /
Shareholders’

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Shares

 

Amount

 

Deficit

 

Income (Deficit)

 

Equity

 

Interests

 

Equity

 

Balance as of June 30, 2021

 

119,799,036

 

$

1,198

 

 

20

 

$

 

$

1,432,125

 

 

 

 

 

$

(40,350

)

$

77,572

 

$

1,470,545

 

$

1,006,571

 

$

2,477,116

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,333

)

 

 

 

(7,333

)

 

(3,052

)

 

(10,385

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

23,763

 

 

 

 

 

 

 

 

 

 

23,763

 

 

 

 

23,763

 

Impact of Tax Receivable Agreement due to exchanges of Common Units

 

 

 

 

 

 

 

 

 

(26,085

)

 

 

 

 

 

 

 

 

 

(26,085

)

 

 

 

(26,085

)

Cancellation of restricted shares

 

(145,416

)

 

(1

)

 

 

 

 

 

(2,154

)

 

 

 

 

 

 

 

 

 

(2,155

)

 

2,155

 

 

 

Exercise of stock options

 

12,668

 

 

 

 

 

 

 

 

734

 

 

 

 

 

 

 

 

 

 

734

 

 

(189

)

 

545

 

Restricted stock units issued, net of shares withheld for taxes

 

230,389

 

 

2

 

 

 

 

 

 

(4,953

)

 

 

 

 

 

 

 

 

 

(4,951

)

 

(3,444

)

 

(8,395

)

Exchange of Common Units for Class A common stock

 

9,344,903

 

 

93

 

 

 

 

 

 

139,581

 

 

 

 

 

 

 

 

 

 

139,674

 

 

(139,674

)

 

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,366

)

 

(2,366

)

 

(512

)

 

(2,878

)

Balance as of September 30, 2021

 

129,241,580

 

$

1,292

 

 

20

 

$

 

$

1,563,011

 

 

 

 

 

$

(47,683

)

$

75,206

 

$

1,591,826

 

$

861,855

 

$

2,453,681

 

 

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

9


 

Bumble Inc.

Condensed Consolidated Statements of Changes in Equity

Nine months ended September 30, 2022

(In thousands, except per share amounts)

(Unaudited)

 

Class A
Common Stock

 

Class B
Common Stock

 

Additional
Paid-in

 

Accumulated

 

Accumulated
Other
Comprehensive

 

Total Bumble Inc. Owners'/
Shareholders'

 

Noncontrolling

 

Total
Shareholders’
/ Owners'

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

 

Interests

 

Equity

 

Balance as of December 31, 2021

 

129,212,949

 

$

1,292

 

 

20

 

$

 

$

1,588,426

 

$

(60,125

)

$

78,603

 

$

1,608,196

 

$

861,573

 

$

2,469,769

 

Net earnings (loss)

 

 

 

 

 

 

 

 

 

 

 

30,824

 

 

 

 

30,824

 

 

14,298

 

 

45,122

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

79,363

 

 

 

 

 

 

79,363

 

 

 

 

79,363

 

Impact of Tax Receivable Agreement due to exchanges of Common Units

 

 

 

 

 

 

 

 

 

(200

)

 

 

 

 

 

(200

)

 

 

 

(200

)

Cancellation of restricted shares

 

(28,988

)

 

 

 

 

 

 

 

(109

)

 

 

 

 

 

(109

)

 

109

 

 

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock units issued, net of shares withheld for taxes

 

399,887

 

 

4

 

 

 

 

 

 

(6,000

)

 

 

 

 

 

(5,996

)

 

(1,356

)

 

(7,352

)

Exchange of Common Units for Class A common stock

 

61,844

 

 

1

 

 

 

 

 

 

(70

)

 

 

 

 

 

(69

)

 

69

 

 

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,528

)

 

(16,528

)

 

(7,870

)

 

(24,398

)

Balance as of September 30, 2022

 

129,645,692

 

$

1,297

 

 

20

 

$

 

$

1,661,410

 

$

(29,301

)

$

62,075

 

$

1,695,481

 

$

866,823

 

$

2,562,304

 

 

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

10


 

Bumble Inc.

Condensed Consolidated Statements of Changes in Equity

Nine months ended September 30, 2021

(In thousands, except per share amounts)

(Unaudited)

 

Limited
Partners'

 

Class A
Common Stock

 

Class B
Common Stock

 

Additional
Paid-in

 

Treasury
Stock

 

Accumulated

 

Accumulated
Other
Comprehensive

 

Total Bumble Inc. Owners'/
Shareholders'

 

Noncontrolling

 

Total
Shareholders’
/ Owners'

 

 

Equity

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Shares

 

Amount

 

Deficit

 

Income

 

Equity

 

Interests

 

Equity

 

Balance as of December 31, 2020

$

1,903,121

 

 

 

$

 

 

100

 

$

 

$

 

 

 

$

 

$

695

 

$

176,244

 

$

2,080,060

 

$

806

 

$

2,080,866

 

Acquisition of noncontrolling interests

 

806

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

806

 

 

(806

)

 

 

Net earnings prior to Reorganization Transactions

 

370,635

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

370,635

 

 

 

 

370,635

 

Stock-based compensation expense

 

11,587

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,587

 

 

 

 

11,587

 

Effect of the Reorganization Transactions (as adjusted)

 

(2,286,149

)

 

82,642,374

 

 

826

 

 

 

 

 

 

1,075,019

 

 

 

 

 

 

 

 

(95,882

)

 

(1,306,186

)

 

1,306,186

 

 

 

Retirement of Class B common stock

 

 

 

 

 

 

 

(80

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

57,500,000

 

 

575

 

 

 

 

 

 

2,236,787

 

 

 

 

 

 

 

 

 

 

2,237,362

 

 

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

)

 

 

 

(1,018,365

)

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

 

 

 

 

 

 

 

 

 

 

 

(609,489

)

 

 

 

 

 

 

 

 

 

(609,489

)

 

(363,800

)

 

(973,289

)

Vested Incentive Units

 

 

 

 

 

 

 

 

 

 

 

(6,385

)

 

 

 

 

 

 

 

 

 

(6,385

)

 

6,385

 

 

 

Issuance of Founder loan common units

 

 

 

 

 

 

 

 

 

 

 

(29,034

)

 

 

 

 

 

 

 

 

 

(29,034

)

 

29,034

 

 

 

Equity plan modification from liability to equity settled due to Reorganization

 

 

 

 

 

 

 

 

 

 

 

22,107

 

 

 

 

 

 

 

 

 

 

22,107

 

 

 

 

22,107

 

Tax Receivable Agreement from Reorganization Transactions

 

 

 

 

 

 

 

 

 

 

 

(387,669

)

 

 

 

 

 

 

 

 

 

(387,669

)

 

 

 

(387,669

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

79,573

 

 

 

 

 

 

 

 

 

 

79,573

 

 

 

 

79,573

 

Retirement of treasury stock and restored to authorized but unissued

 

 

 

(24,798,848

)

 

(248

)

 

 

 

 

 

(1,018,117

)

 

(24,798,848

)

 

1,018,365

 

 

 

 

 

 

 

 

 

 

 

Cancellation of restricted shares

 

 

 

(145,416

)

 

(1

)

 

 

 

 

 

(2,154

)

 

 

 

 

 

 

 

 

 

(2,155

)

 

2,155

 

 

 

 

11


 

Exercise of stock options

 

 

 

12,668

 

 

 

 

 

 

 

 

734

 

 

 

 

 

 

 

 

 

 

734

 

 

(189

)

 

545

 

Restricted stock units issued, net of shares withheld for taxes

 

 

 

230,389

 

 

2

 

 

 

 

 

 

(4,953

)

 

 

 

 

 

 

 

 

 

(4,951

)

 

(3,444

)

 

(8,395

)

Exchange of Common Units for Class A common stock

 

 

 

13,800,413

 

 

138

 

 

 

 

 

 

206,592

 

 

 

 

 

 

 

 

 

 

206,730

 

 

(206,730

)

 

 

Net loss subsequent to Reorganization Transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(48,378

)

 

 

 

(48,378

)

 

(26,603

)

 

(74,981

)

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,156

)

 

(5,156

)

 

(2,148

)

 

(7,304

)

Balance as of September 30, 2021

$

 

 

129,241,580

 

$

1,292

 

 

20

 

$

 

$

1,563,011

 

 

 

$

 

$

(47,683

)

$

75,206

 

$

1,591,826

 

$

861,855

 

$

2,453,681

 

 

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

12


 

Bumble Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

Nine Months Ended September 30, 2022

 

 

Nine Months Ended September 30, 2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net earnings (loss)

 

$

45,122

 

 

$

295,654

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

73,835

 

 

 

80,882

 

Impairment loss

 

 

4,388

 

 

 

 

Loss on extinguishment of long term debt

 

 

 

 

 

3,398

 

Changes in fair value of interest rate swaps

 

 

(18,404

)

 

 

(2,789

)

Changes in fair value of contingent earn-out liability

 

 

(46,399

)

 

 

77,659

 

Changes in fair value of investments in equity securities

 

 

(38

)

 

 

 

Non-cash lease expense

 

 

3,479

 

 

 

4,247

 

Deferred income tax

 

 

(6,501

)

 

 

(443,096

)

Stock-based compensation expense

 

 

77,179

 

 

 

99,502

 

Net foreign exchange difference

 

 

(14,413

)

 

 

(2,257

)

Other, net

 

 

(1,140

)

 

 

3,727

 

Changes in assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(5,176

)

 

 

(4,954

)

Other current assets

 

 

20,261

 

 

 

(5,284

)

Accounts payable

 

 

(9,841

)

 

 

(13,124

)

Deferred revenue

 

 

4,679

 

 

 

7,773

 

Legal liabilities

 

 

(7,130

)

 

 

(45,631

)

Accrued expenses and other current liabilities

 

 

(38,088

)

 

 

(35,721

)

Other, net

 

 

(44

)

 

 

271

 

Net cash provided by (used in) operating activities

 

 

81,769

 

 

 

20,257

 

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(11,311

)

 

 

(9,388

)

Acquisition of business, net of cash acquired

 

 

(69,720

)

 

 

 

Other, net

 

 

 

 

 

31

 

Net cash provided by (used in) investing activities

 

 

(81,031

)

 

 

(9,357

)

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

)

Withholding tax paid on behalf of employees on stock-based awards

 

 

(7,352

)

 

 

(9,338

)

Proceeds from exercise of options

 

 

 

 

 

545

 

Repayment of term loan

 

 

(4,313

)

 

 

(205,000

)

Net cash provided by (used in) financing activities

 

 

(11,665

)

 

 

152,924

 

Effects of exchange rate changes on cash and cash equivalents

 

 

13,641

 

 

 

(535

)

Net increase (decrease) in cash and cash equivalents

 

 

2,714

 

 

 

163,289

 

Cash and cash equivalents, beginning of the period

 

 

369,175

 

 

 

128,286

 

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

 

 

371,889

 

 

 

291,575

 

Less restricted cash

 

 

6,784

 

 

 

 

Cash and cash equivalents, end of the period

 

$

365,105

 

 

$

291,575

 

 

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

13


 

Bumble Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

 

Note 1 - Organization and Basis of Presentation

 

Company Overview

 

Bumble Inc.’s main operations are providing online dating and social networking platforms through subscription and in-app purchases of dating products servicing North America, Europe and various other countries around the world. Bumble Inc. provides these services through websites and applications that it owns and operates.

 

Bumble Inc. (the "Company" or "Bumble") 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 L.P. ("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 (the “Predecessor”) by a group of investment funds managed by Blackstone Inc. (“Blackstone” or our "Sponsor"). 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 and 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 limited partnership interests of Bumble Holdings ("Common Units") from entities affiliated with 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 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 188,379,019 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, 2022.

 

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

 

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 (the "Selling Stockholders") at a price of $54.00 per share. This transaction resulted in the issuance of 9.2 million shares of Class A common stock 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

14


 

have been prepared in conformity with U.S. GAAP, consistent in all material respects with those applied in the Company's 2021 Form 10-K, with the exception of the correction of certain errors as discussed below. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated statements and notes thereto included in the 2021 Form 10-K.

 

A noncontrolling interest in a consolidated subsidiary represents the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to the Company. Noncontrolling interests are presented as a separate component of equity in the consolidated balance sheets and the presentation of net income is modified to present earnings and other comprehensive income attributed to controlling and noncontrolling interests. The Company’s noncontrolling interest represents substantive profit-sharing arrangements and profit and losses are attributable to controlling and noncontrolling interests using a hypothetical liquidation at book value method.

 

Revision of Previously Issued Financial Statements

 

In connection with the preparation of our consolidated financial statements, we identified certain immaterial prior period adjustments related to the recognition and presentation of debt issuance costs and refunds from third-party aggregators in previously issued financial statements. In addition, we recorded certain other previously identified adjustments that were deemed immaterial to the periods presented.

 

In accordance with SAB No. 99, “Materiality,” and SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” we evaluated the errors and determined that the related impacts were not material to our financial statements for any prior annual or interim periods, but that correcting the cumulative impact of the errors would be significant to our results of operations for the three and nine months ended September 30, 2022. Accordingly, we have revised previously reported financial information for such immaterial errors. A summary of revisions to certain previously reported financial information presented herein for comparative purposes is included in Note 3, Revisions of Previously Issued Financial Statements.

 

 

 

Note 2 - Summary of Selected Significant Accounting Policies

 

Included below are selected significant accounting policies including those that were added or modified during the nine months ended September 30, 2022 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 2021 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 income taxes, the fair value and useful lives of assets acquired and liabilities assumed in business combinations, the recoverability of long-lived assets and goodwill, potential obligations associated with legal contingencies, the fair value of contingent consideration, and the fair value of derivatives and 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.

 

Cash, Cash Equivalents and Restricted Cash

 

Cash and cash equivalents include cash in banks, cash on hand, cash in electronic money accounts and overnight deposits.

 

As of September 30, 2022, the Company has classified the cash held in Russia as restricted cash due to the sanctions imposed by the Russia-Ukraine Conflict, which is included in “Other noncurrent assets” within the accompanying condensed consolidated balance sheets.

 

Impairment of Long-lived Assets

 

15


 

Long-lived assets, which consist of property and equipment and right-of-use assets, are reviewed for impairment whenever events or circumstances indicate that the carrying value of an asset may not be recoverable. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is deemed not to be recoverable, an impairment loss is recorded equal to the amount by which the carrying value of the long-lived asset exceeds its fair value. The remaining estimated useful lives of property and equipment and right-of-use assets are routinely reviewed and, if the estimate is revised, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life.

 

During the nine months ended September 30, 2022, the Company determined that a right-of-use asset associated with its decision to discontinue its operations in Russia was fully impaired and recognized an impairment charge of $4.4 million in “General and administrative expense” within the accompanying condensed consolidated statement of operations. See Note 9, Restructuring, for additional information on impairment.

 

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.

 

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 ASU No. 2014-09, Revenue from Contracts with Customers, 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, 2022 and 2021, there were no customers representing greater than 10% of total revenue.

 

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

 

 

 

Three Months Ended September 30, 2022

 

 

(As Revised) Three Months Ended September 30, 2021

 

 

Nine Months Ended September 30, 2022

 

 

(As Revised) Nine Months Ended September 30, 2021

 

Bumble App

 

$

180,641

 

 

$

141,216

 

 

$

503,482

 

 

$

379,176

 

Badoo App and Other

 

 

51,998

 

 

 

57,931

 

 

 

158,393

 

 

 

174,689

 

Total Revenue

 

$

232,639

 

 

$

199,147

 

 

$

661,875

 

 

$

553,865

 

 

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 $44.9 million and $39.6 million as of September 30, 2022 and December 31, 2021, respectively, all of which is classified as a current liability. During the three months ended September 30, 2022 and 2021, the Company recognized revenue of $2.5 million and $2.0 million, that was included in the deferred revenue balance at the beginning of each respective period. During the nine months ended September 30, 2022 and 2021, the Company recognized revenue of $39.1 million and $29.9 million, that was included in the deferred revenue balance at the beginning of each respective period.

 

Business Combination

 

16


 

The Company accounts for business combinations using the acquisition method of accounting. The purchase price is allocated to the assets acquired and liabilities assumed, including identifiable intangible assets, based on their fair values at the date of acquisition, with the exception of contract assets and contract liabilities from contracts with customers. On January 1, 2022, the Company adopted ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, under which the Company recognizes and measures revenue contract assets and contract liabilities (including deferred revenue) acquired in a business combination on the acquisition date as if the revenue contracts were originated by the Company in accordance with ASC 606, Revenue from Contracts with Customers. The adoption of ASU 2021-08 did not have a material impact to the Company's consolidated financial position, results of operations and cash flows. Any excess of the amount paid over the fair values of the identifiable net assets acquired is allocated to goodwill. These fair value determinations require judgment and involve the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items.

 

Transaction costs associated with business combinations are expensed as incurred.

 

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.

 

Restructuring Charges

 

Restructuring charges, associated with office closure or exiting a market, consist primarily of severance, relocation, right-of-use asset impairment and other related costs. The Company evaluates the nature of these costs to determine if they relate to ongoing benefit arrangements which are accounted for under ASC 712, Compensation - Nonretirement Postemployment Benefits, or one-time benefit arrangements which are accounted for under ASC 420, Exit or Disposal Cost Obligations. The Company records a liability for ongoing employee termination benefits when it is probable that an employee is entitled to them and the amount of the benefits can be reasonably estimated. One-time employee termination costs are recognized when management has communicated the termination plan to employees, unless future service is required, in which case the costs are recognized ratably over the future service period. All other related costs are recognized when incurred. See Note 9, Restructuring, for additional information.
 

Restructuring charges are recognized as an operating expense within the condensed consolidated statements of operations and are classified based on each employee’s respective function.

 

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.

 

See Note 14, Earnings (Loss) per Share / Unit, for additional information on dilutive securities.

 

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 is estimated using the Black-Scholes option pricing model, which requires management to make

17


 

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, the Company concluded that our public offering represented a qualifying liquidity event that would cause the performance conditions to be probable of occurring.

 

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

 

Recently Issued Pronouncements Not Yet Adopted

 

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” 2020-04) Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and then subsequent amendments, which provide optional guidance and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued. The amendments are effective prospectively at any point through December 31, 2022. The Company continues to implement its transition plan toward cessation of LIBOR and the modification of its loans and other financial instruments with attributes that are either directly or indirectly influenced by LIBOR. The Company expects to utilize the LIBOR transition relief allowed under ASU 2020-04, as applicable, and does not expect such adoption to have a material impact on its accounting and disclosures.

18


 

Note 3 - Revisions of Previously-Issued Financial Statements

 

In preparing the condensed consolidated financial statements as of and for the three and nine months ended September 30, 2022, the Company identified certain errors in its previously issued financial statements related to the recognition and presentation of debt issuance costs and refunds from third-party aggregators. Accordingly, during 2022, 2021 and 2020, certain immaterial errors existed.

 

The Company assessed the materiality of the misstatements both quantitatively and qualitatively and determined the correction of these errors to be immaterial to all prior consolidated financial statements taken as a whole and, therefore, amending previously filed reports to correct the errors was not required. However, the Company concluded that the cumulative effect of correcting the errors in the quarter ended September 30, 2022 would materially misstate the Company’s unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2022. Accordingly, the Company has made the necessary adjustments to correct the prior periods financial statements as summarized below. In addition, the amounts labeled “Adjustment” also include certain other previously identified adjustments that were not recorded, as such errors were deemed immaterial to the periods presented. The Company will also revise such information in future filings to reflect the correction of the errors. The remainder of the notes to the Company's consolidated financial statements have been updated and revised, as applicable, to reflect the impacts of the adjustments described above.

 

The following tables summarize the revisions of previously-issued financial statements (in thousands):

 

Unaudited Condensed Consolidated Balance Sheets

June 30, 2022

 

June 30, 2021

 

 

As Previously Reported

 

Adjustment

 

As Revised

 

As Previously Reported

 

Adjustment

 

As Revised

 

Deferred tax assets, net

$

22,365

 

$

1,100

 

$

23,465

 

$

15,175

 

$

 

$

15,175

 

Other noncurrent assets

 

22,860

 

 

581

 

 

23,441

 

 

3,913

 

 

806

 

 

4,719

 

Total assets

 

3,767,819

 

 

1,681

 

 

3,769,500

 

 

3,754,630

 

 

806

 

 

3,755,436

 

Deferred revenue

 

44,470

 

 

(355

)

 

44,115

 

 

37,329

 

 

(355

)

 

36,974

 

Current portion of long-term debt, net

 

2,588

 

 

3,162

 

 

5,750

 

 

2,588

 

 

3,162

 

 

5,750

 

Total current liabilities

 

211,859

 

 

2,807

 

 

214,666

 

 

170,689

 

 

2,807

 

 

173,496

 

Long-term debt, net

 

619,057

 

 

2,183

 

 

621,240

 

 

621,645

 

 

3,562

 

 

625,207

 

Payable to related parties pursuant to a tax receivable agreement

 

388,980

 

 

 

 

388,980

 

 

356,755

 

 

4,829

 

 

361,584

 

Total liabilities

 

1,251,305

 

 

4,990

 

 

1,256,295

 

 

1,267,122

 

 

11,198

 

 

1,278,320

 

Additional paid-in capital

 

1,621,917

 

 

1,645

 

 

1,623,562

 

 

1,339,583

 

 

92,542

 

 

1,432,125

 

Accumulated deficit

 

(40,853

)

 

(6,511

)

 

(47,364

)

 

(35,928

)

 

(4,422

)

 

(40,350

)

Accumulated other comprehensive income

 

73,667

 

 

(1,663

)

 

72,004

 

 

175,198

 

 

(97,626

)

 

77,572

 

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

 

1,656,027

 

 

(6,529

)

 

1,649,498

 

 

1,480,051

 

 

(9,506

)

 

1,470,545

 

Noncontrolling interests

 

860,487

 

 

3,220

 

 

863,707

 

 

1,007,457

 

 

(886

)

 

1,006,571

 

Total shareholders’ / owners’ equity

 

2,516,514

 

 

(3,309

)

 

2,513,205

 

 

2,487,508

 

 

(10,392

)

 

2,477,116

 

Total liabilities and shareholders’ / owners’ equity

 

3,767,819

 

 

1,681

 

 

3,769,500

 

 

3,754,630

 

 

806

 

 

3,755,436

 

 

 

 

19


 

 

Unaudited Condensed Consolidated Statements of Operations and Unaudited Condensed Consolidated Statements of Comprehensive Operations

Three Months Ended June 30, 2022

 

Three Months Ended June 30, 2021

 

Six Months Ended June 30, 2022

 

Six Months Ended June 30, 2021

 

 

As Previously Reported

 

Adjustment

 

As Revised

 

As Previously Reported

 

Adjustment

 

As Revised

 

As Previously Reported

 

Adjustment

 

As Revised

 

As Previously Reported

 

Adjustment

 

As Revised

 

Revenue

$

220,454

 

$

(1,248

)

$

219,206

 

$

186,217

 

$

(802

)

$

185,415

 

$

431,653

 

$

(2,417

)

$

429,236

 

$

356,930

 

$

(2,212

)

$

354,718

 

Cost of revenue

 

62,757

 

 

(1,248

)

 

61,509

 

 

50,797

 

 

(802

)

 

49,995

 

 

119,538

 

 

(2,417

)

 

117,121

 

 

98,544

 

 

(2,212

)

 

96,332

 

Total operating costs and expenses

 

223,222

 

 

(1,248

)

 

221,974

 

 

195,715

 

 

(802

)

 

194,913

 

 

415,402

 

 

(2,417

)

 

412,985

 

 

478,824

 

 

(2,212

)

 

476,612

 

Interest income (expense)

 

(6,281

)

 

292

 

 

(5,989

)

 

(5,921

)

 

293

 

 

(5,628

)

 

(12,164

)

 

584

 

 

(11,580

)

 

(13,650

)

 

465

 

 

(13,185

)

Other income (expense), net

 

4,954

 

 

 

 

4,954

 

 

4,731

 

 

 

 

4,731

 

 

18,184

 

 

 

 

18,184

 

 

11,722

 

 

(8,006

)

 

3,716

 

Income (loss) before income taxes

 

(4,095

)

 

292

 

 

(3,803

)

 

(10,688

)

 

293

 

 

(10,395

)

 

22,271

 

 

584

 

 

22,855

 

 

(123,822

)

 

(7,541

)

 

(131,363

)

Income tax benefit (provision)

 

(2,328

)

 

1,100

 

 

(1,228

)

 

(459

)

 

 

 

(459

)

 

(4,756

)

 

618

 

 

(4,138

)

 

436,117

 

 

1,285

 

 

437,402

 

Net earnings (loss)

 

(6,423

)

 

1,392

 

 

(5,031

)

 

(11,147

)

 

293

 

 

(10,854

)

 

17,515

 

 

1,202

 

 

18,717

 

 

312,295

 

 

(6,256

)

 

306,039

 

Net earnings (loss) attributable to noncontrolling interests

 

(2,031

)

 

440

 

 

(1,591

)

 

(4,064

)

 

1,381

 

 

(2,683

)

 

5,512

 

 

444

 

 

5,956

 

 

(22,412

)

 

(1,139

)

 

(23,551

)

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

 

(4,392

)

 

952

 

 

(3,440

)

 

(7,083

)

 

(1,088

)

 

(8,171

)

 

12,003

 

 

758

 

 

12,761

 

 

334,707

 

 

(5,117

)

 

329,590

 

Change in foreign currency translation adjustment

 

(8,973

)

 

 

 

(8,973

)

 

(5,467

)

 

 

 

(5,467

)

 

(10,178

)

 

 

 

(10,178

)

 

(9,034

)

 

4,608

 

 

(4,426

)

Total other comprehensive income (loss), net of tax

 

(8,973

)

 

 

 

(8,973

)

 

(5,467

)

 

 

 

(5,467

)

 

(10,178

)

 

 

 

(10,178

)

 

(9,034

)

 

4,608

 

 

(4,426

)

Comprehensive income (loss)

 

(15,396

)

 

1,392

 

 

(14,004

)

 

(16,614

)

 

293

 

 

(16,321

)

 

7,337

 

 

1,202

 

 

8,539

 

 

303,261

 

 

(1,648

)

 

301,613

 

Comprehensive income (loss) attributable to noncontrolling interests

 

(4,866

)

 

212

 

 

(4,654

)

 

(6,057

)

 

1,334

 

 

(4,723

)

 

2,296

 

 

81

 

 

2,377

 

 

(25,792

)

 

605

 

 

(25,187

)

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

 

(10,530

)

 

1,180

 

 

(9,350

)

 

(10,557

)

 

(1,041

)

 

(11,598

)

 

5,041

 

 

1,121

 

 

6,162

 

 

329,053

 

 

(2,253

)

 

326,800

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share / unit

 

(0.03

)

 

 

 

(0.03

)

 

(0.06

)

 

 

 

(0.06

)

 

0.09

 

 

0.01

 

 

0.10

 

 

1.67

 

 

(0.04

)

 

1.63

 

Diluted earnings (loss) per share / unit

 

(0.03

)

 

 

 

(0.03

)

 

(0.06

)

 

 

 

(0.06

)

 

0.09

 

 

0.01

 

 

0.10

 

 

1.62

 

 

(0.03

)

 

1.59

 

 

Unaudited Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30, 2022

 

Six Months Ended June 30, 2021

 

 

As Previously Reported

 

Adjustment

 

As Revised

 

As Previously Reported

 

Adjustment

 

As Revised

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net Earnings

$

17,515

 

$

1,202

 

$

18,717

 

$

312,295

 

$

(6,256

)

$

306,039

 

Loss on extinguishment of long term debt

 

 

 

 

 

 

 

 

 

3,398

 

 

3,398

 

Deferred income tax

 

(3,275

)

 

(618

)

 

(3,893

)

 

(441,841

)

 

(1,285

)

 

(443,126

)

Net foreign exchange difference

 

(5,535

)

 

 

 

(5,535

)

 

(7,421

)

 

4,608

 

 

(2,813

)

Other, net

 

689

 

 

(584

)

 

105

 

 

3,875

 

 

(465

)

 

3,410

 

Accrued expenses and other current liabilities

 

(37,407

)

 

 

 

(37,407

)

 

(29,092

)

 

(2,534

)

 

(31,626

)

Net cash provided by (used in) operating activities

 

44,767

 

 

 

 

44,767

 

 

(31,439

)

 

(2,534

)

 

(33,973

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Repayment of term loan

 

(2,875

)

 

 

 

(2,875

)

 

(206,096

)

 

2,534

 

 

(203,562

)

Net cash provided by (used in) financing activities

 

(9,069

)

 

 

 

(9,069

)

 

160,621

 

 

2,534

 

 

163,155

 

 

 

20


 

Unaudited Condensed Consolidated Balance Sheets

 

March 31, 2022

 

 

March 31, 2021

 

 

 

As Previously Reported

 

 

Adjustment

 

 

As Revised

 

 

As Previously Reported

 

 

Adjustment

 

 

As Revised

 

Other noncurrent assets

 

$

20,142

 

 

$

638

 

 

$

20,780

 

 

$

4,267

 

 

$

863

 

 

$

5,130

 

Total assets

 

 

3,795,402

 

 

 

638

 

 

 

3,796,040

 

 

 

3,770,114

 

 

 

863

 

 

 

3,770,977

 

Deferred revenue

 

 

40,679

 

 

 

(355

)

 

 

40,324

 

 

 

33,370

 

 

 

(355

)

 

 

33,015

 

Accrued expenses and other current liabilities

 

 

114,129

 

 

 

 

 

 

114,129

 

 

 

142,652

 

 

 

2,533

 

 

 

145,185

 

Current portion of long-term debt, net

 

 

2,588

 

 

 

3,162

 

 

 

5,750

 

 

 

9,996

 

 

 

(2,121

)

 

 

7,875

 

Total current liabilities

 

 

166,232

 

 

 

2,807

 

 

 

169,039

 

 

 

201,065

 

 

 

57

 

 

 

201,122

 

Long-term debt, net

 

 

619,704

 

 

 

2,532

 

 

 

622,236

 

 

 

619,542

 

 

 

6,662

 

 

 

626,204

 

Payable to related parties pursuant to a tax receivable agreement

 

 

388,980

 

 

 

 

 

 

388,980

 

 

 

356,755

 

 

 

4,829

 

 

 

361,584

 

Total liabilities

 

 

1,286,257

 

 

 

5,339

 

 

 

1,291,596

 

 

 

1,295,908

 

 

 

11,548

 

 

 

1,307,456

 

Additional paid-in capital

 

 

1,598,567

 

 

 

1,645

 

 

 

1,600,212

 

 

 

2,259,381

 

 

 

93,934

 

 

 

2,353,315

 

Accumulated deficit

 

 

(36,461

)

 

 

(7,463

)

 

 

(43,924

)

 

 

(28,845

)

 

 

(3,334

)

 

 

(32,179

)

Accumulated other comprehensive income

 

 

79,805

 

 

 

(1,892

)

 

 

77,913

 

 

 

178,672

 

 

 

(97,673

)

 

 

80,999

 

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

 

 

1,643,207

 

 

 

(7,710

)

 

 

1,635,497

 

 

 

1,392,244

 

 

 

(7,073

)

 

 

1,385,171

 

Noncontrolling interests

 

 

865,938

 

 

 

3,009

 

 

 

868,947

 

 

 

1,081,962

 

 

 

(3,612

)

 

 

1,078,350

 

Total shareholders’ / owners’ equity

 

 

2,509,145

 

 

 

(4,701

)

 

 

2,504,444

 

 

 

2,474,206

 

 

 

(10,685

)

 

 

2,463,521

 

Total liabilities and shareholders’ / owners’ equity

 

 

3,795,402

 

 

 

638

 

 

 

3,796,040

 

 

 

3,770,114

 

 

 

863

 

 

 

3,770,977

 

 

Unaudited Condensed Consolidated Statements of Operations and Unaudited Condensed Consolidated Statements of Comprehensive Operations

 

Three Months Ended March 31, 2022

 

 

Three Months Ended March 31, 2021

 

 

 

As Previously Reported

 

 

Adjustment

 

 

As Revised

 

 

As Previously Reported

 

 

Adjustment

 

 

As Revised

 

Revenue

 

$

211,199

 

 

$

(1,169

)

 

$

210,030

 

 

$

170,713

 

 

$

(1,410

)

 

$

169,303

 

Cost of revenue

 

 

56,781

 

 

 

(1,169

)

 

 

55,612

 

 

 

47,747

 

 

 

(1,410

)

 

 

46,337

 

Total operating costs and expenses

 

 

192,180

 

 

 

(1,169

)

 

 

191,011

 

 

 

283,109

 

 

 

(1,410

)

 

 

281,699

 

Interest income (expense)

 

 

(5,883

)

 

 

292

 

 

 

(5,591

)

 

 

(7,729

)

 

 

172

 

 

 

(7,557

)

Other income (expense), net

 

 

13,230

 

 

 

 

 

 

13,230

 

 

 

6,991

 

 

 

(8,006

)

 

 

(1,015

)

Income (loss) before income taxes

 

 

26,366

 

 

 

292

 

 

 

26,658

 

 

 

(113,134

)

 

 

(7,834

)

 

 

(120,968

)

Income tax benefit (provision)

 

 

(2,428

)

 

 

(482

)

 

 

(2,910

)

 

 

436,576

 

 

 

1,285

 

 

 

437,861

 

Net earnings (loss)

 

 

23,938

 

 

 

(190

)

 

 

23,748

 

 

 

323,442

 

 

 

(6,549

)

 

 

316,893

 

Net earnings (loss) attributable to noncontrolling interests

 

 

7,543

 

 

 

4

 

 

 

7,547

 

 

 

(18,348

)

 

 

(2,520

)

 

 

(20,868

)

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

 

 

16,395

 

 

 

(194

)

 

 

16,201

 

 

 

341,790

 

 

 

(4,029

)

 

 

337,761

 

Change in foreign currency translation adjustment

 

 

(1,205

)

 

 

 

 

 

(1,205

)

 

 

(3,567

)

 

 

4,608

 

 

 

1,041

 

Total other comprehensive income (loss), net of tax

 

 

(1,205

)

 

 

 

 

 

(1,205

)

 

 

(3,567

)

 

 

4,608

 

 

 

1,041

 

Comprehensive income (loss)

 

 

22,733

 

 

 

(190

)

 

 

22,543

 

 

 

319,875

 

 

 

(1,941

)

 

 

317,934

 

Comprehensive income (loss) attributable to noncontrolling interests

 

 

7,162

 

 

 

(131

)

 

 

7,031

 

 

 

(19,735

)

 

 

(729

)

 

 

(20,464

)

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

 

 

15,571

 

 

 

(59

)

 

 

15,512

 

 

 

339,610

 

 

 

(1,212

)

 

 

338,398

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share / unit

 

 

0.13

 

 

 

 

 

 

0.13

 

 

 

1.74

 

 

 

(0.04

)

 

 

1.70

 

Diluted earnings (loss) per share / unit

 

 

0.13

 

 

 

(0.01

)

 

 

0.12

 

 

 

1.69

 

 

 

(0.04

)

 

 

1.65

 

 

Unaudited Condensed Consolidated Statements of Cash Flows

 

Three Months Ended March 31, 2022

 

 

Three Months Ended March 31, 2021

 

 

 

As Previously Reported

 

 

Adjustment

 

 

As Revised

 

 

As Previously Reported

 

 

Adjustment

 

 

As Revised

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Earnings

 

$

23,938

 

 

$

(190

)

 

$

23,748

 

 

$

323,442

 

 

$

(6,549

)

 

$

316,893

 

Loss on extinguishment of long term debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,398

 

 

 

3,398

 

Deferred income tax

 

 

(2,961

)

 

 

482

 

 

 

(2,479

)

 

 

(441,682

)

 

 

(1,285

)

 

 

(442,967

)

Net foreign exchange difference

 

 

(5,705

)

 

 

 

 

 

(5,705

)

 

 

(2,307

)

 

 

4,608

 

 

 

2,301

 

Other, net

 

 

8,365

 

 

 

(292

)

 

 

8,073

 

 

 

2,787

 

 

 

(172

)

 

 

2,615

 

Net cash provided by (used in) operating activities

 

 

19,358

 

 

 

 

 

 

19,358

 

 

 

(45,582

)