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Bumble Inc. - Quarter Report: 2022 June (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 June 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 July 29, 2022, Bumble Inc. had 129,586,219 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 (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 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.
“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.
“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 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 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 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”.

2


 

“Pre-IPO Common Unitholders” refer to pre-IPO owners that hold Common Units following the Reclassification.
“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

12

 

Notes to Unaudited Condensed Consolidated Financial Statements

13

Item 2.

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

37

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

53

Item 4.

Controls and Procedures

53

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

54

Item 1A.

Risk Factors

54

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

54

Item 6.

Exhibits

55

 

Signatures

56

 

 

 

 

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)

 

 

 

June 30, 2022

 

 

December 31, 2021

 

ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

334,645

 

 

$

369,175

 

Accounts receivable

 

 

54,729

 

 

 

47,538

 

Other current assets

 

 

28,319

 

 

 

52,751

 

Total current assets

 

 

417,693

 

 

 

469,464

 

Right-of-use assets

 

 

20,469

 

 

 

26,410

 

Property and equipment, net

 

 

13,501

 

 

 

14,627

 

Goodwill

 

 

1,579,050

 

 

 

1,540,112

 

Intangible assets, net

 

 

1,691,881

 

 

 

1,696,798

 

Deferred tax assets, net

 

 

22,365

 

 

 

19,090

 

Other noncurrent assets

 

 

22,860

 

 

 

9,319

 

Total assets

 

$

3,767,819

 

 

$

3,775,820

 

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

 

 

 

 

 

 

Accounts payable

 

$

10,125

 

 

$

19,169

 

Deferred revenue

 

 

44,470

 

 

 

39,924

 

Accrued expenses and other current liabilities

 

 

154,676

 

 

 

111,482

 

Current portion of long-term debt, net

 

 

2,588

 

 

 

2,588

 

Total current liabilities

 

 

211,859

 

 

 

173,163

 

Long-term debt, net

 

 

619,057

 

 

 

620,351

 

Deferred tax liabilities, net

 

 

10,127

 

 

 

 

Payable to related parties pursuant to a tax receivable agreement

 

 

388,980

 

 

 

388,780

 

Other liabilities

 

 

21,282

 

 

 

119,246

 

Total liabilities

 

 

1,251,305

 

 

 

1,301,540

 

Commitments and contingencies (Note 17)

 

 

 

 

 

 

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; 129,559,112 and 129,212,949 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively)

 

 

1,296

 

 

 

1,292

 

Class B common stock (par value $0.01 per share, 1,000,000 shares authorized; 20 shares issued and outstanding as of June 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 June 30, 2022 and December 31, 2021, respectively)

 

 

 

 

 

 

Additional paid-in capital

 

 

1,621,917

 

 

 

1,586,781

 

Accumulated deficit

 

 

(40,853

)

 

 

(52,856

)

Accumulated other comprehensive income

 

 

73,667

 

 

 

80,629

 

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

 

 

1,656,027

 

 

 

1,615,846

 

Noncontrolling interests

 

 

860,487

 

 

 

858,434

 

Total shareholders’ / owners’ equity

 

 

2,516,514

 

 

 

2,474,280

 

Total liabilities and shareholders’ / owners’ equity

 

$

3,767,819

 

 

$

3,775,820

 

 

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 June 30, 2022

 

 

Three Months Ended June 30, 2021

 

 

Six Months Ended June 30, 2022

 

 

Six Months Ended June 30, 2021

 

Revenue

 

$

220,454

 

 

$

186,217

 

 

$

431,653

 

 

$

356,930

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

62,757

 

 

 

50,797

 

 

 

119,538

 

 

 

98,544

 

Selling and marketing expense

 

 

59,483

 

 

 

49,711

 

 

 

116,312

 

 

 

96,549

 

General and administrative expense

 

 

51,375

 

 

 

43,381

 

 

 

77,821

 

 

 

169,905

 

Product development expense

 

 

22,456

 

 

 

24,921

 

 

 

47,651

 

 

 

59,966

 

Depreciation and amortization expense

 

 

27,151

 

 

 

26,905

 

 

 

54,080

 

 

 

53,860

 

Total operating costs and expenses

 

 

223,222

 

 

 

195,715

 

 

 

415,402

 

 

 

478,824

 

Operating earnings (loss)

 

 

(2,768

)

 

 

(9,498

)

 

 

16,251

 

 

 

(121,894

)

Interest income (expense)

 

 

(6,281

)

 

 

(5,921

)

 

 

(12,164

)

 

 

(13,650

)

Other income (expense), net

 

 

4,954

 

 

 

4,731

 

 

 

18,184

 

 

 

11,722

 

Income (loss) before income taxes

 

 

(4,095

)

 

 

(10,688

)

 

 

22,271

 

 

 

(123,822

)

Income tax benefit (provision)

 

 

(2,328

)

 

 

(459

)

 

 

(4,756

)

 

 

436,117

 

Net earnings (loss)

 

 

(6,423

)

 

 

(11,147

)

 

 

17,515

 

 

 

312,295

 

Net earnings (loss) attributable to noncontrolling interests

 

 

(2,031

)

 

 

(4,064

)

 

 

5,512

 

 

 

(22,412

)

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

 

$

(4,392

)

 

$

(7,083

)

 

$

12,003

 

 

$

334,707

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share / unit

 

$

(0.03

)

 

$

(0.06

)

 

$

0.09

 

 

$

1.67

 

Diluted earnings (loss) per share / unit

 

$

(0.03

)

 

$

(0.06

)

 

$

0.09

 

 

$

1.62

 

 

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 June 30, 2022

 

 

Three Months Ended June 30, 2021

 

 

Six Months Ended June 30, 2022

 

 

Six Months Ended June 30, 2021

 

Net earnings (loss)

 

$

(6,423

)

 

$

(11,147

)

 

$

17,515

 

 

$

312,295

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Change in foreign currency translation adjustment

 

 

(8,973

)

 

 

(5,467

)

 

 

(10,178

)

 

 

(9,034

)

Total other comprehensive income (loss), net of tax

 

 

(8,973

)

 

 

(5,467

)

 

 

(10,178

)

 

 

(9,034

)

Comprehensive income (loss)

 

 

(15,396

)

 

 

(16,614

)

 

 

7,337

 

 

 

303,261

 

Comprehensive income (loss) attributable to noncontrolling interests

 

 

(4,866

)

 

 

(6,057

)

 

 

2,296

 

 

 

(25,792

)

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

 

$

(10,530

)

 

$

(10,557

)

 

$

5,041

 

 

$

329,053

 

 

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 June 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 March 31, 2022

 

129,519,804

 

$

1,296

 

 

20

 

$

 

$

1,598,567

 

$

(36,461

)

$

79,805

 

$

1,643,207

 

$

865,938

 

$

2,509,145

 

Net earnings (loss)

 

 

 

 

 

 

 

 

 

 

 

(4,392

)

 

 

 

(4,392

)

 

(2,031

)

 

(6,423

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

23,251

 

 

 

 

 

 

23,251

 

 

 

 

23,251

 

Cancellation of restricted shares

 

(5,758

)

 

 

 

 

 

 

 

(86

)

 

 

 

 

 

(86

)

 

86

 

 

 

Restricted stock units issued, net of shares withheld for taxes

 

45,066

 

 

 

 

 

 

 

 

185

 

 

 

 

 

 

185

 

 

(671

)

 

(486

)

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,138

)

 

(6,138

)

 

(2,835

)

 

(8,973

)

Balance as of June 30, 2022

 

129,559,112

 

$

1,296

 

 

20

 

$

 

$

1,621,917

 

$

(40,853

)

$

73,667

 

$

1,656,027

 

$

860,487

 

$

2,516,514

 

 

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 June 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 March 31, 2021

 

140,142,374

 

$

1,401

 

 

20

 

$

 

$

2,355,125

 

 

24,798,848

 

 

(1,018,365

)

$

(28,845

)

$

82,928

 

$

1,392,244

 

$

1,081,962

 

$

2,474,206

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,083

)

 

 

 

(7,083

)

 

(4,064

)

 

(11,147

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

29,916

 

 

 

 

 

 

 

 

 

 

29,916

 

 

 

 

29,916

 

Retirement of treasury stock and restored to authorized but unissued

 

(24,798,848

)

 

(248

)

 

 

 

 

 

(1,018,117

)

 

(24,798,848

)

 

1,018,365

 

 

 

 

 

 

 

 

 

 

 

Exchange of Common Units for Class A common stock

 

4,455,510

 

 

45

 

 

 

 

 

 

68,403

 

 

 

 

 

 

 

 

 

 

68,448

 

 

(68,448

)

 

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,474

)

 

(3,474

)

 

(1,993

)

 

(5,467

)

Balance as of June 30, 2021

 

119,799,036

 

$

1,198

 

 

20

 

$

 

$

1,435,327

 

 

 

 

 

$

(35,928

)

$

79,454

 

$

1,480,051

 

$

1,007,457

 

$

2,487,508

 

 

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

9


 

Bumble Inc.

Condensed Consolidated Statements of Changes in Equity

Six months ended June 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

 

$

 

$

1,586,781

 

$

(52,856

)

$

80,629

 

$

1,615,846

 

$

858,434

 

$

2,474,280

 

Net earnings (loss)

 

 

 

 

 

 

 

 

 

 

 

12,003

 

 

 

 

12,003

 

 

5,512

 

 

17,515

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

41,291

 

 

 

 

 

 

41,291

 

 

 

 

41,291

 

Impact of Tax Receivable Agreement due to exchanges of Common Units

 

 

 

 

 

 

 

 

 

(200

)

 

 

 

 

 

(200

)

 

 

 

(200

)

Cancellation of restricted shares

 

(25,659

)

 

 

 

 

 

 

 

(64

)

 

 

 

 

 

(64

)

 

64

 

 

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock units issued, net of shares withheld for taxes

 

309,978

 

 

3

 

 

 

 

 

 

(5,821

)

 

 

 

 

 

(5,818

)

 

(376

)

 

(6,194

)

Exchange of Common Units for Class A common stock

 

61,844

 

 

1

 

 

 

 

 

 

(70

)

 

 

 

 

 

(69

)

 

69

 

 

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,962

)

 

(6,962

)

 

(3,216

)

 

(10,178

)

Balance as of June 30, 2022

 

129,559,112

 

$

1,296

 

 

20

 

$

 

$

1,621,917

 

$

(40,853

)

$

73,667

 

$

1,656,027

 

$

860,487

 

$

2,516,514

 

 

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

10


 

Bumble Inc.

Condensed Consolidated Statements of Changes in Equity

Six months ended June 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

 

$

 

$

 

 

 

$

 

$

 

$

180,852

 

$

2,083,973

 

$

808

 

$

2,084,781

 

Acquisition of noncontrolling interests

 

808

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

808

 

 

(808

)

 

 

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)

 

(2,286,151

)

 

82,642,374

 

 

826

 

 

 

 

 

 

1,075,019

 

 

 

 

 

 

 

 

(95,744

)

 

(1,306,050

)

 

1,306,050

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

(8,067

)

 

 

 

 

 

 

 

 

 

(8,067

)

 

8,067

 

 

 

Issuance of Founder loan common units

 

 

 

 

 

 

 

 

 

 

 

(30,371

)

 

 

 

 

 

 

 

 

 

(30,371

)

 

30,371

 

 

 

Equity plan modification from liability to equity settled due to Reorganization

 

 

 

 

 

 

 

 

 

 

 

22,107

 

 

 

 

 

 

 

 

 

 

22,107

 

 

 

 

22,107

 

Tax Receivable Agreement from Reorganization Transactions

 

 

 

 

 

 

 

 

 

 

 

(356,755

)

 

 

 

 

 

 

 

 

 

(356,755

)

 

 

 

(356,755

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

55,810

 

 

 

 

 

 

 

 

 

 

55,810

 

 

 

 

55,810

 

Retirement of treasury stock and restored to authorized but unissued

 

 

 

(24,798,848

)

 

(248

)

 

 

 

 

 

(1,018,117

)

 

(24,798,848

)

 

1,018,365

 

 

 

 

 

 

 

 

 

 

 

Exchange of Common Units for Class A common stock

 

 

 

4,455,510

 

 

45

 

 

 

 

 

 

68,403

 

 

 

 

 

 

 

 

 

 

68,448

 

 

(68,448

)

 

 

Net loss subsequent to Reorganization Transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(35,928

)

 

 

 

(35,928

)

 

(22,412

)

 

(58,340

)

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,654

)

 

(5,654

)

 

(3,380

)

 

(9,034

)

Balance as of June 30, 2021

$

 

 

119,799,036

 

$

1,198

 

 

20

 

$

 

$

1,435,327

 

 

 

$

 

$

(35,928

)

$

79,454

 

$

1,480,051

 

$

1,007,457

 

$

2,487,508

 

 

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

11


 

Bumble Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

Six Months Ended June 30, 2022

 

 

Six Months Ended June 30, 2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net earnings (loss)

 

$

17,515

 

 

$

312,295

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

54,080

 

 

 

53,860

 

Impairment loss

 

 

4,388

 

 

 

 

Changes in fair value of interest rate swaps

 

 

(13,630

)

 

 

(2,743

)

Changes in fair value of contingent earn-out liability

 

 

(19,395

)

 

 

72,438

 

Non-cash lease expense

 

 

2,373

 

 

 

2,857

 

Deferred income tax

 

 

(3,275

)

 

 

(441,841

)

Stock-based compensation expense

 

 

40,004

 

 

 

75,739

 

Net foreign exchange difference

 

 

(5,535

)

 

 

(7,421

)

Other, net

 

 

689

 

 

 

3,875

 

Changes in assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(3,743

)

 

 

(25,738

)

Other current assets

 

 

21,076

 

 

 

(5,439

)

Accounts payable

 

 

(9,157

)

 

 

(8,616

)

Deferred revenue

 

 

3,897

 

 

 

6,060

 

Legal liabilities

 

 

(7,120

)

 

 

(37,627

)

Accrued expenses and other current liabilities

 

 

(37,407

)

 

 

(29,092

)

Other, net

 

 

7

 

 

 

(46

)

Net cash provided by (used in) operating activities

 

 

44,767

 

 

 

(31,439

)

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(8,049

)

 

 

(5,552

)

Acquisition of business, net of cash acquired

 

 

(69,720

)

 

 

 

Other, net

 

 

 

 

 

3

 

Net cash provided by (used in) investing activities

 

 

(77,769

)

 

 

(5,549

)

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

 

 

(6,194

)

 

 

 

Repayment of term loan

 

 

(2,875

)

 

 

(206,096

)

Net cash provided by (used in) financing activities

 

 

(9,069

)

 

 

160,621

 

Effects of exchange rate changes on cash and cash equivalents

 

 

7,541

 

 

 

102

 

Net increase (decrease) in cash and cash equivalents

 

 

(34,530

)

 

 

123,735

 

Cash and cash equivalents, beginning of the period

 

 

369,175

 

 

 

128,286

 

Cash and cash equivalents, end of the period

 

$

334,645

 

 

$

252,021

 

 

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

12


 

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 188,292,439 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 June 30, 2022.

 

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 have been prepared in conformity with U.S. GAAP, consistent in all material respects with those applied in the Company's 2021 Form

13


 

10-K. 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.

 

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

 

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.

 

Statement of Changes in Equity Reclassification

 

As disclosed within our 2021 Annual Report on Form 10-K, beginning in the fourth quarter of 2021, the Company adjusted its Consolidated Statement of Changes in Equity to reclassify $95.7 million from accumulated other comprehensive income to additional paid-in capital in order to correctly present the effects of the Reorganization Transactions and IPO.

 

This change has been concluded to be immaterial to the interim condensed consolidated financial statements presented herein given it has no impact on the reported condensed consolidated statements of operations, comprehensive operations, and changes in cash flows.

 

The fiscal year end of the Company is December 31.

 

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 six months ended June 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.

 

Impairment of Long-lived Assets

 

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 three months ended June 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 8, Restructuring, for additional information on impairment.

14


 

 

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 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 six months ended June 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 June 30, 2022

 

 

Three Months Ended June 30, 2021

 

 

Six Months Ended June 30, 2022

 

 

Six Months Ended June 30, 2021

 

Bumble App

 

$

169,608

 

 

$

127,319

 

 

$

325,028

 

 

$

239,955

 

Badoo App and Other

 

 

50,846

 

 

 

58,898

 

 

 

106,625

 

 

 

116,975

 

Total Revenue

 

$

220,454

 

 

$

186,217

 

 

$

431,653

 

 

$

356,930

 

 

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 $44.5 million and $39.9 million as of June 30, 2022 and December 31, 2021, respectively. During the three months ended June 30, 2022 and 2021, the Company recognized revenue of $6.8 million and $6.0 million, that was included in the deferred revenue balance at the beginning of each respective period. During the six months ended

15


 

June 30, 2022 and 2021, the Company recognized revenue of $36.6 million and $27.9 million, that was included in the deferred revenue balance at the beginning of each respective period.

 

Business Combination

 

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 8, 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 13, Earnings (Loss) per Share / Unit, for additional information on dilutive securities.

 

 

16


 

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 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 14, 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.

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. For the three and six months ended June 30, 2022, our effective tax rates are (56.8)% and 21.4%, respectively, which differ from the U.S. federal statutory tax rate of 21% primarily due to the geographical distribution of our earnings, income attributable to non-controlling interests, nondeductible stock-based compensation, and a valuation allowance recorded against certain deferred tax assets arising in the current year.

 

Our effective tax rate for the six months ended June 30, 2021 was 352.2% which 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 six months ended June 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 - Payable to Related Parties Pursuant to a 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 the Company to such pre-IPO owners of 85% of the benefits, that the Company realizes, or is deemed to realize, as a result of the Company'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 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 price of $43.00 per share of Class A common stock) is approximately $2,603 million

17


 

which includes the Company's allocable share of existing tax basis acquired in the IPO, which we have determined to be approximately $1,728 million. In determining the Company'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 June 30, 2022. 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 $389.0 million related to these benefits as of June 30, 2022. 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 $281.0 million for a total liability of $670.0 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 to related parties that would result in a benefit recorded within our consolidated statement of operations.

 

Note 5 - Business Combination

 

The Company entered into a definitive agreement to purchase all of the outstanding shares of Flashgap SAS (“Flashgap”), pursuant to a Share Purchase Agreement dated January 31, 2022 (“Purchase Agreement”), by and among Bumble, Flashgap, and the company’s selling shareholders, for a purchase price of approximately $75.4 million. Flashgap (popularly known as Fruitz), is a fast growing dating app with a Gen Z focus, which is a growing segment of online dating consumers. Fruitz complements our existing Bumble and Badoo apps and will allow the Company to expand our product offerings to a dynamic Gen Z market. The acquisition of Fruitz 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). As detailed below, the Company entered into a contingent earn-out arrangement that was determined to be part of the purchase consideration. See Note 10, Fair Value Measurements for further discussion.

 

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 consideration

 

$

72,275

 

Fair value of contingent earn-out liability

 

 

3,100

 

Total purchase price

 

$

75,375

 

 

Purchase price allocation

 

$

75,375

 

Less fair value of net assets acquired:

 

 

 

Cash and cash equivalents

 

 

2,555

 

Accounts receivable

 

 

799

 

Other current assets

 

 

57

 

Property and equipment

 

 

17

 

Intangible assets

 

 

42,930

 

Deferred revenue

 

 

(650

)

Accounts payable

 

 

(1,045

)

Deferred tax liabilities

 

 

(10,819

)

      Net assets acquired

 

 

33,844

 

Goodwill

 

$

41,531

 

 

18


 

Goodwill, which is not expected to be tax deductible, is primarily attributable to assembled workforce, expected synergies and other factors. During the three months ended June 30, 2022, the Company adjusted the purchase price allocation for tax related matters in the amount of $0.4 million.


The fair values of the identifiable intangible assets acquired at the date of acquisition are as follows (in thousands):

 

 

 

Acquisition
Date Fair
Value

 

 

Weighted-
Average
Useful Life
(Years)

 

Brand

 

$

38,000

 

 

 

15

 

Developed technology

 

 

4,100

 

 

 

4

 

User base

 

 

830

 

 

 

4

 

Total identifiable intangible assets acquired

 

$

42,930

 

 

 

 

 

The fair values of the acquired brand and developed technology were determined using a relief from royalty methodology. The fair value of the user base was determined using an excess earnings methodology. The valuations of intangible assets incorporates significant unobservable inputs and require significant judgment and estimates, including the amount and timing of future cash flows.

 

For the three and six months ended June 30, 2022, the Company has recognized transaction costs related to the acquisition of $0.0 million and $1.1 million, respectively. These costs are recorded in “General and administrative expense” in the condensed consolidated statements of operations.

Note 6 - Property and Equipment, net

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

 

 

 

June 30, 2022

 

 

December 31, 2021

 

Computer equipment

 

$

22,733

 

 

$

21,675

 

Leasehold improvements

 

 

7,317

 

 

 

7,288

 

Furniture and fixtures

 

 

941

 

 

 

904

 

Total property and equipment, gross

 

$

30,991

 

 

$

29,867

 

Accumulated depreciation

 

 

(17,490

)

 

 

(15,240

)

Total property and equipment, net

 

$

13,501

 

 

$

14,627

 

 

Depreciation expense related to property and equipment, net for the three months ended June 30, 2022 and 2021 was $2.2 million and $2.3 million, respectively, and for the six months ended June 30, 2022 and 2021 was $4.5 million and $4.7 million, respectively.

 

 

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, 2021

 

$

1,540,112

 

Fruitz acquisition

 

 

41,531

 

Foreign currency translation adjustment

 

 

(2,593

)

Balance as of June 30, 2022

 

$

1,579,050

 

 

 

19


 

Intangible Assets, net

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

 

 

 

June 30, 2022

 

 

 

Gross
Carrying
Amount

 

 

Accumulated
Amortization

 

 

Impairment losses

 

 

Net
Carrying
Amount

 

 

Weighted-
Average
Remaining
Useful
Life (Years)

 

Bumble and Badoo brands

 

$

1,511,269

 

 

$

 

 

$

 

 

$

1,511,269

 

 

Indefinite

 

Fruitz brand

 

 

35,648

 

 

 

(990

)

 

 

 

 

 

34,658

 

 

 

14.6

 

Developed technology

 

 

248,659

 

 

 

(118,727

)

 

 

 

 

 

129,932

 

 

 

2.6

 

User base

 

 

113,474

 

 

 

(109,020

)

 

 

 

 

 

4,454

 

 

 

0.1

 

White label contracts

 

 

33,384

 

 

 

(6,953

)

 

 

(26,431

)

 

 

 

 

 

 

Other

 

 

13,474

 

 

 

(1,906

)

 

 

 

 

 

11,568

 

 

 

4.6

 

Total intangible assets, net

 

$

1,955,908

 

 

$

(237,596

)

 

$

(26,431

)

 

$

1,691,881

 

 

 

 

 

 

 

December 31, 2021

 

 

 

Gross
Carrying
Amount

 

 

Accumulated
Amortization

 

 

Impairment losses

 

 

Net
Carrying
Amount

 

 

Weighted-
Average
Remaining
Useful
Life (Years)

 

Bumble and Badoo brands

 

$

1,511,269

 

 

$

 

 

$

 

 

$

1,511,269

 

 

Indefinite

 

Developed technology

 

 

244,813

 

 

 

(93,845

)

 

 

 

 

 

150,968

 

 

 

3.1

 

User base

 

 

112,695

 

 

 

(86,399

)

 

 

 

 

 

26,296

 

 

 

0.6

 

White label contracts

 

 

33,384

 

 

 

(6,953

)

 

 

(26,431

)

 

 

 

 

 

 

Other

 

 

9,106

 

 

 

(841

)

 

 

 

 

 

8,265

 

 

 

5.3

 

Total intangible assets, net

 

$

1,911,267

 

 

$

(188,038

)

 

$

(26,431

)

 

$

1,696,798

 

 

 

 

 

Amortization expense related to intangible assets, net for the three months ended June 30, 2022 and 2021 was $25.0 million and $24.6 million, respectively, and for the six months ended June 30, 2022 and 2021 was $49.6 million and $49.2 million, respectively.

As of June 30, 2022, amortization of intangible assets with definite lives is estimated to be as follows (in thousands):

 

Remainder of 2022

 

$

31,236

 

2023

 

 

54,958

 

2024

 

 

54,397

 

2025

 

 

8,358

 

2026 and thereafter

 

 

28,134

 

Total

 

$

177,083

 

 

Note 8 - Restructuring

 

On March 8, 2022, the Company announced that it adopted a restructuring plan to discontinue its existing operations in Russia and remove its apps from the Apple App Store and Google Play Store in Russia and Belarus. The Company plans to substantially exit its Russian operations by the end of 2022. In connection with the restructuring plan, approximately 120 employees were impacted. The Company expects to incur restructuring charges totaling approximately $7.0 million to $8.0 million, consisting primarily of right-of-use asset impairment, severance benefits, relocation and other related costs during the twelve months ended December 31, 2022.

 

The following table presents the total restructuring charges by function (in thousands):

 

 

 

 

Three Months Ended June 30, 2022

 

 

Six Months Ended June 30, 2022

 

Cost of revenue

 

 

 

$

56

 

 

$

139

 

Selling and marketing

 

 

 

 

11

 

 

 

34

 

General and administrative

 

 

 

 

5,386

 

 

 

5,772

 

Product development

 

 

 

 

363

 

 

 

1,216

 

     Total

 

 

 

$

5,816

 

 

$

7,161

 

 

20


 

During the three months ended June 30, 2022, the Company determined that the Moscow office was fully impaired and recorded an impairment charge of $4.4 million, which was included in “General and administrative” expense in the accompanying condensed consolidated statements of operations. The remaining amounts were primarily related to employee severance and relocation costs. Including the impairment charge, the Company incurred restructuring charges of $5.8 million and $7.2 million during the three and six months ended June 30, 2022, respectively.

 

The following table summarizes the restructuring related liabilities (in thousands):

 

 

Employee Related Benefits

 

 

Other

 

 

Total

 

Balance as of December 31, 2021

 

$

 

 

$

 

 

$

 

Restructuring charges

 

 

2,611

 

 

 

163

 

 

 

2,774

 

Cash payments

 

 

(1,636

)

 

 

(163

)

 

 

(1,799

)

Balance as of June 30, 2022

 

$

975

 

 

$

 

 

$

975

 

 

 

 

Note 9 - Other Financial Data

 

Consolidated Balance Sheets Information

 

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

 

 

 

June 30, 2022

 

 

December 31, 2021

 

Capitalized aggregator fees

 

$

9,706

 

 

$

8,183

 

Prepayments

 

 

14,627

 

 

 

10,989

 

Income tax receivable

 

 

305

 

 

 

30,563

 

Other receivables

 

 

3,681

 

 

 

3,016

 

Total other current assets

 

$

28,319

 

 

$

52,751

 

 

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

 

 

 

June 30, 2022

 

 

December 31, 2021

 

Legal liabilities

 

$

1,474

 

 

$

8,767

 

Accrued expenses

 

 

45,524

 

 

 

39,849

 

Lease liabilities

 

 

4,596

 

 

 

3,898

 

Income tax payable

 

 

10,060

 

 

 

42,317

 

Contingent earn-out liability

 

 

79,485

 

 

 

 

Other payables

 

 

13,537

 

 

 

16,651

 

Total accrued expenses and other current liabilities

 

$

154,676

 

 

$

111,482

 

 

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

 

 

 

June 30, 2022

 

 

December 31, 2021

 

Lease liabilities

 

$

19,809

 

 

$

21,711

 

Contingent earn-out liability

 

 

628

 

 

 

96,600

 

Other liabilities

 

 

845

 

 

 

935

 

Total other liabilities

 

$

21,282

 

 

$

119,246

 

 

 

 

21


 

Note 10 - Fair Value Measurements

 

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

 

 

 

June 30, 2022

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total Fair
Value
Measurements

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

334,645

 

 

$

 

 

$

 

 

$

334,645

 

Derivative asset

 

 

 

 

 

18,638

 

 

 

 

 

 

18,638

 

Equity investments

 

 

 

 

 

 

 

 

2,609

 

 

 

2,609

 

 

 

$

334,645

 

 

$

18,638

 

 

$

2,609

 

 

$

355,892

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent earn-out liability

 

$

 

 

$

 

 

$

80,113

 

 

$

80,113

 

 

 

$

 

 

$

 

 

$

80,113

 

 

$

80,113

 

 

 

 

December 31, 2021

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total Fair
Value
Measurements

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

369,175

 

 

$

 

 

$

 

 

$

369,175

 

Derivative asset

 

 

 

 

 

5,008

 

 

 

 

 

 

5,008

 

Equity investments

 

 

 

 

 

 

 

 

2,610

 

 

 

2,610

 

 

 

$

369,175

 

 

$

5,008

 

 

$

2,610

 

 

$

376,793

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent earn-out liability

 

$

 

 

$

 

 

$

96,600

 

 

$

96,600

 

 

 

$

 

 

$

 

 

$

96,600

 

 

$

96,600

 

 

There were no transfers between levels between June 30, 2022 and December 31, 2021.

 

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.

 

The Company’s contingent earn-out liability is measured at fair value on a recurring basis using significant unobservable inputs (Level 3) and totaled $80.1 million and $96.6 million as of June 30, 2022 and December 31, 2021, respectively. The portion of the contingent earn-out liability expected to be payable within one year is included in “Total accrued expenses and other current liabilities” and the amount expected to be payable beyond one year is included is included in “Other liabilities” in the accompanying condensed consolidated balance sheets.

 

As of June 30, 2022, 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 determined the fair value of the contingent earn-out liability by using a probability-weighted analysis to determine the amount of the liability, and applying a discount rate that captures the risks associated with the duration of the obligation. The number of scenarios in the probability-weighted analyses vary; generally, more scenarios are prepared for longer duration and more complex arrangements. As of June 30, 2022 and December 31, 2021, the fair value of the contingent earn-out liability reflects a risk-free rate of 2.8% and 0.5%, respectively.

 

In addition, as of June 30, 2022, there is a contingent consideration arrangement, consisting of an earn-out payment of up to $10 million in connection with the acquisition of Fruitz in January 2022. The Company determined the fair value of the contingent earn-out liability using a probability-weighted analysis and applied a discount rate that captures the risks associated with the obligation that is long-term in nature. As of June 30, 2022, the fair value of the contingent earn-out liability reflects a risk-free rate of 3.4%.

 

The Company classified contingent earn-out arrangements as liabilities at the time of the acquisition, as they will be settled in cash, and remeasures the fair values of the contingent earn-out liabilities each reporting period thereafter until settled. The fair value of the contingent earn-out liabilities are sensitive to changes in the forecasts of earnings and/or the relevant operating metrics and changes in discount rates. Changes in fair values of contingent earn-out liabilities are recognized in “General and administrative expense” in the accompanying condensed consolidated statements of operations. The change in fair value of the contingent earn-out liability was $1.3 million and $0.5 million for the three months ended June 30, 2022 and 2021, respectively, and $(19.4) million and $72.4 million for the six months ended June 30, 2022 and 2021, respectively.

22


 

Note 11 - Debt

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

 

 

 

June 30, 2022

 

 

December 31, 2021

 

Term Loan due January 29, 2027

 

$

635,688

 

 

$

638,563

 

Less: unamortized debt issuance costs

 

 

14,043

 

 

 

15,624

 

Less: current portion of debt, net

 

 

2,588

 

 

 

2,588

 

Total long-term debt, net

 

$

619,057

 

 

$

620,351

 

 

Credit Agreements

 

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 (“Original Term Loan”), as well as a five-year revolving credit facility of $50.0 million 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 “Additional Term Loan”, collectively with the Original Term Loan, the “Term Loans”). 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 1.00% to 1.50% with respect to base rate borrowings and between 2.00% and 2.50% with respect to LIBOR rate borrowings. The interest rates in effect for the Original Term Loan and the Additional Term Loan as of June 30, 2022 were 3.81% and 4.31%, respectively. The Term Loans 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 June 30, 2022, 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 June 30, 2022. The carrying value of the Term Loans 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 June 30, 2022, were as follows (in thousands):

 

Remainder of 2022

 

$

2,875

 

2023

 

 

5,750

 

2024

 

 

5,750

 

2025

 

 

5,750

 

2026 and thereafter

 

 

615,563

 

Total

 

$

635,688

 

 

Note 12 - 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

23


 

Worldwide Vision Limited. 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, there were 2,453,784,599 units of Class A and 153,273,895 units of Class B 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

 

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 entities affiliated with 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 $200.0 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 of $54.00 per share. This transaction resulted in the issuance of 9.2 million shares of Class A common stock for the period ended 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 IPO, on February 10, 2021 the limited partnership agreement of Bumble Holdings was amended and restated, resulting 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 or indirectly exchanged for vested shares of Class A common stock of Bumble Inc.
All outstanding Class B Units were either (1) reclassified into a new class of limited partnership interest referred to as “Incentive Units”, or (2) directly or indirectly exchanged for vested shares of Class A common stock of Bumble Inc. (in the case of vested Class B Units) and restricted shares of Class A common stock of Bumble Inc. (in the case of unvested Class B Units).
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 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

24


 

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. Notwithstanding the foregoing, unless they elect otherwise, our Founder and affiliates of Blackstone (collectively, the “Principal Stockholders”) are entitled to outsized voting rights. Until the High Vote Termination Date (as defined below), each share of Class A common stock held by a Principal Stockholder is entitled to ten votes. “High Vote Termination Date” means the earlier to occur of (i) seven years from the closing of this offering and (ii) the date the parties to the stockholders agreement cease to own in the aggregate 7.5% of the outstanding shares of Class A common stock, assuming exchange of all Common Units. Shares of Class A common 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 June 30, 2022 and December 31, 2021, there were 129,559,112 and 129,212,949 shares of Class A common stock outstanding, respectively.

 

Class B Common Stock

 

Shares of Class B common stock have voting but no economic rights. Holders of Class B common stock generally are entitled, without regard to the number of shares of Class B common stock held by such holder, to one vote for each Common Unit of Bumble Holdings held by such holder. Notwithstanding the foregoing, unless they elect otherwise, each Principal Stockholder that holds Class B common stock is entitled to outsized voting rights. Until the High Vote Termination Date, each Principal Stockholder that holds Class B common stock is entitled, without regard to the number of shares of Class B common stock held by such Principal Stockholder, to a number of votes equal to 10 times the aggregate number of Common Units of Bumble Holdings held by such Principal Stockholder. Shares of Class B common stock do not have any right to receive dividends or distribution upon liquidation.

 

As of June 30, 2022 and December 31, 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 June 30, 2022 and December 31, 2021, no preferred stock had 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.

 

25


 

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 13 - Earnings (Loss) per Share / Unit

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.

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

 

 

Three Months Ended June 30, 2022

 

 

Three Months Ended June 30, 2021

 

 

Six Months Ended June 30, 2022

 

 

Six Months Ended June 30, 2021

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

(6,423

)

 

$

(11,147

)

 

$

17,515

 

 

$

312,295

 

Net earnings (loss) attributable to noncontrolling interests

 

 

(2,031

)

 

 

(4,064

)

 

 

5,512

 

 

 

(22,412

)

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

 

$

(4,392

)

 

$

(7,083

)

 

$

12,003

 

 

$

334,707

 

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):

26


 

 

 

Three Months Ended June 30, 2022

 

 

Three Months Ended June 30, 2021

 

 

Six Months Ended June 30, 2022

 

 

Six Months Ended June 30, 2021

 

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

 

$

(4,392

)

 

$

(7,074

)

 

$

11,981

 

 

$

196,398

 

Less: net earnings (loss) attributable to participating securities

 

 

 

 

 

 

 

 

13

 

 

 

589

 

Net earnings (loss) attributable to common stockholders / unitholders

 

$

(4,392

)

 

$

(7,074

)

 

$

11,968

 

 

$

195,809

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

129,398,184

 

 

 

119,814,297

 

 

 

129,316,467

 

 

 

117,520,382

 

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

 

$

(0.03

)

 

$

(0.06

)

 

$

0.09

 

 

$

1.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

(4,392

)

 

$

(7,074

)

 

$

11,832

 

 

$

191,358

 

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

 

 

 

 

 

 

 

 

5,683

 

 

 

120,937

 

Less: net earnings (loss) attributable to participating securities

 

 

 

 

 

 

 

 

13

 

 

 

574

 

Net earnings (loss) attributable to common stockholders / unitholders

 

$

(4,392

)

 

$

(7,074

)

 

$

17,502

 

 

$

311,721

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares / units used in basic computation

 

 

129,398,184

 

 

 

119,814,297

 

 

 

129,316,467

 

 

 

117,520,382

 

Add: weighted-average effect of dilutive securities

 

 

 

 

 

 

 

 

 

 

 

 

Restricted shares

 

 

 

 

 

 

 

 

 

 

 

 

RSUs

 

 

 

 

 

 

 

 

684,071

 

 

 

976,452

 

Options

 

 

 

 

 

 

 

 

 

 

 

11,026

 

Common Units to Convert to Class A Common Stock

 

 

 

 

 

 

 

 

61,501,508

 

 

 

73,523,363

 

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

 

 

129,398,184

 

 

 

119,814,297

 

 

 

191,502,046

 

 

 

192,031,223

 

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

 

$

(0.03

)

 

$

(0.06

)

 

$

0.09

 

 

$

1.62

 

 

The following table sets forth potentially dilutive securities that were excluded from the diluted earnings (loss) per share computation because the effect would be anti-dilutive, or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the periods:

 

 

 

Three Months Ended June 30, 2022

 

 

Three Months Ended June 30, 2021

 

 

Six Months Ended June 30, 2022

 

 

Six Months Ended June 30, 2021

 

Time-vesting awards:

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

 

2,773,714

 

 

 

1,997,390

 

 

 

2,773,714

 

 

 

1,967,911

 

Restricted shares

 

 

63,244

 

 

 

177,105

 

 

 

 

 

 

 

RSUs

 

 

4,180,300

 

 

 

2,373,040

 

 

 

995,154

 

 

 

59,230

 

Incentive units

 

 

4,282,841

 

 

 

5,668,263

 

 

 

446,550

 

 

 

182,059

 

Total time-vesting awards

 

 

11,300,099

 

 

 

10,215,798

 

 

 

4,215,418

 

 

 

2,209,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exit-vesting awards:

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

 

164,362

 

 

 

222,424

 

 

 

164,362

 

 

 

222,424

 

Restricted shares

 

 

68,793

 

 

 

135,770

 

 

 

 

 

 

 

RSUs

 

 

944,710

 

 

 

1,292,555

 

 

 

944,710

 

 

 

1,292,555

 

Incentive units

 

 

4,324,868

 

 

 

4,384,917

 

 

 

4,324,868

 

 

 

4,384,917

 

Total exit-vesting awards

 

 

5,502,733

 

 

 

6,035,666

 

 

 

5,433,940

 

 

 

5,899,896

 

Total

 

 

16,802,832

 

 

 

16,251,464

 

 

 

9,649,358

 

 

 

8,109,096

 

 

27


 

Note 14 - Stock-based Compensation

Total stock-based compensation cost, net of forfeitures, was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Three Months Ended June 30, 2022

 

 

Three Months Ended June 30, 2021

 

 

Six Months Ended June 30, 2022

 

 

Six Months Ended June 30, 2021

 

Cost of revenue

 

$

971

 

 

$

604

 

 

$

1,919

 

 

$

2,211

 

Selling and marketing expense

 

 

2,091

 

 

 

2,500

 

 

 

769

 

 

 

7,641

 

General and administrative expense

 

 

12,149

 

 

 

17,960

 

 

 

22,547

 

 

 

37,868

 

Product development expense

 

 

7,236

 

 

 

8,852

 

 

 

14,769

 

 

 

28,019

 

Total stock-based compensation expense

 

$

22,447

 

 

$

29,916

 

 

$

40,004

 

 

$

75,739

 

 

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-U.S. Plan”) and the Equity Incentive Plan (“U.S. Plan”). The participants of the Non-U.S. Plan and U.S. 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 U.S. 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-U.S. Plan, participants have received 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 U.S. Plan and the Phantom Class B Units under the Non-U.S. 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.

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

 

 

28


 

Post-IPO Award Reclassification

In connection with the Company’s IPO, awards under the Founder Plan, U.S. Plan, and Non-U.S. 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 U.S. 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 each of the above 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, the Company concluded that our public offering represented a qualifying liquidity event that would cause the Exit-Vesting awards’ performance conditions to be probable. As such, the Company has begun to recognize stock-based compensation expense in relation to the Exit-Vesting awards. Compensation cost related to the reclassified Exit-Vesting awards for the three months ended June 30, 2022 and 2021 was $2.6 million and $7.8 million, respectively, and $3.5 million and $19.1 million, respectively, for the six months ended June 30, 2022 and 2021.

On July 15, 2022, the Exit-Vesting awards were modified to also provide for vesting in 36 equal installments, with the first installment on August 29, 2022, subject to the award holder's continued employment through each applicable vesting date and subject to other terms and conditions of the award. See Note 18, Subsequent Events, for additional information.

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 assumptions:

 

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 assumptions:

 

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.

29


 

The fair value of Time-Vesting Options granted during the six months ended June 30, 2022 was determined using the Black-Scholes option pricing model with the following assumptions:

 

Volatility

 

60%-70%

 

Expected Life

 

7.0 years

 

Risk-free rate

 

1.74% - 2.95%

 

Fair value per unit

 

$15.36 - $17.66

 

Dividend yield

 

 

0.0

%

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 received 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

 

Unvested as of December 31, 2021

 

 

5,170,731

 

 

$

14.22

 

 

 

4,324,868

 

 

$

13.81

 

Granted

 

 

 

 

 

 

 

 

 

 

 

 

Vested

 

 

(887,890

)

 

 

13.78

 

 

 

 

 

 

 

Forfeited

 

 

 

 

 

 

 

 

 

 

 

 

Unvested as of June 30, 2022

 

 

4,282,841

 

 

$

14.31

 

 

 

4,324,868

 

 

$

13.81

 

 

As of June 30, 2022, total unrecognized compensation cost related to the Time-Vesting Incentive Units is $14.9 million, which is expected to be recognized over a weighted-average period of 2.9 years. Total unrecognized compensation cost related to the Exit-Vesting Incentive Units is $14.5 million, which is expected to be recognized over a weighted average period of 2.5 years.

Restricted Shares of Class A Common Stock in Bumble Inc.:

The following table summarizes information around restricted shares in the Company. The restricted shares 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.

 

 

 

 

 

 

 

 

 

 

 

 

Time-Vesting
Restricted Shares of Class A Common Stock

 

 

Exit-Vesting
Restricted Shares of Class A Common Stock

 

 

 

Number of
Awards

 

 

Weighted-
Average
Grant-Date
Fair
Value

 

 

Number of
Awards

 

 

Weighted-
Average
Grant-Date
Fair
Value

 

Unvested as of December 31, 2021

 

 

98,717

 

 

$

7.26

 

 

 

82,211

 

 

$

5.19

 

Granted

 

 

 

 

 

 

 

 

 

 

 

 

Vested

 

 

(23,232

)

 

 

6.73

 

 

 

 

 

 

 

Forfeited

 

 

(12,241

)

 

 

6.97

 

 

 

(13,418

)

 

 

4.89

 

Unvested as of June 30, 2022

 

 

63,244

 

 

$

7.51

 

 

 

68,793

 

 

$

5.25

 

 

As of June 30, 2022, total unrecognized compensation cost related to the Time-Vesting restricted shares is $0.2 million, which is expected to be recognized over a weighted-average period of 2.6 years. Total unrecognized compensation cost related to the Exit-Vesting restricted shares is $0.2 million, which is expected to be recognized over a weighted average period of 2.6 years.

 

30


 

RSUs in Bumble Inc.:

The following table summarizes information around RSUs in the Company. These include grants of Phantom Class B Units that were reclassified into RSUs in conjunction with the IPO, as well as Promised RSUs issued to new recipients. The RSUs granted as a result of the reclassification of Phantom Class B Units retain the vesting attributes (including original service period vesting start date) of the Phantom Class B Units. As the Phantom Class B Units were legally settled in cash and the RSUs will be settled with equity, this represents a liability-to-equity modification. The Company reclassified any outstanding liabilities to equity and recognized expense in accordance with the appropriate pattern using the modification date fair value.

Time-Vesting RSUs that were granted as a result of the Reclassification generally vest in equal annual installments over a five year period, whereas Time-Vesting RSUs that were granted at the time of the Company’s IPO generally vest in equal annual installments over a four year period. Time-Vesting RSUs that have been granted since the Company’s IPO generally vest 25% on the first anniversary of the date of grant, or other vesting commencement date, and the remaining 75% of the award vests in equal installments on each monthly anniversary thereafter such that the award will be fully vested on the fourth anniversary of the date of grant, or other vesting commencement date. Exit-Vesting RSUs that were granted as a result of the Reclassification contain similar vesting requirements to the previously Exit-Vesting Phantom Class B Units.

 

 

 

 

 

 

 

Time-Vesting RSUs

 

 

Exit-Vesting RSUs

 

 

 

Number of
Awards

 

 

Weighted-
Average
Grant-Date
Fair
Value

 

 

Number of
Awards

 

 

Weighted-
Average
Grant-Date
Fair
Value

 

Unvested as of December 31, 2021

 

 

2,803,943

 

 

$

45.36

 

 

 

1,217,151

 

 

$

30.52

 

Granted

 

 

2,536,416

 

 

 

27.86

 

 

 

 

 

 

 

Vested

 

 

(523,746

)

 

 

44.83

 

 

 

 

 

 

 

Forfeited

 

 

(636,313

)

 

 

39.56

 

 

 

(272,441

)

 

 

30.52

 

Unvested as of June 30, 2022

 

 

4,180,300

 

 

$

35.69

 

 

 

944,710

 

 

$

30.52

 

 

As of June 30, 2022, total unrecognized compensation cost related to the Time-Vesting RSUs is $88.1 million, which is expected to be recognized over a weighted-average period of 3.3 years. Total unrecognized compensation cost related to the Exit-Vesting RSUs is $16.2 million, which is expected to be recognized over a weighted average period of 2.6 years.

 

Options

Under the 2021 Omnibus Plan, the Company has granted certain stock options with the underlying equity being shares of the Company’s Class A common stock. These stock options are inclusive of both Time-Vesting stock options and Exit-Vesting stock options. Time-Vesting stock options either vest over a four or a five year period, and weighted-average remaining contractual term has been specified in the table below. Exit-Vesting stock options vest upon satisfaction of a performance condition under which Blackstone and its affiliates receive cash proceeds in respect of certain MOIC and IRR hurdles, subject to the recipient’s continued employment at the time of satisfaction. At the IPO date, the Company concluded that our public offering represented a qualifying liquidity event that would cause the Exit-Vesting options’ performance conditions to be probable of occurring.

The following table summarizes the Company’s option activity as it relates to Time-Vesting stock options as of June 30, 2022:

 

 

 

June 30, 2022

 

 

 

Number of
Options

 

 

Weighted-
Average
Exercise
Price Per
Share

 

 

Weighted-
Average
Grant Date
Fair Value
Per Share

 

Outstanding as of December 31, 2021

 

 

2,038,016

 

 

$

43.76

 

 

$

22.96

 

Granted

 

 

1,198,321

 

 

 

27.06

 

 

 

17.17

 

Exercised

 

 

 

 

 

 

 

 

 

Forfeited and expired

 

 

(462,623

)

 

 

38.17

 

 

 

20.72

 

Outstanding as of June 30, 2022

 

 

2,773,714

 

 

$

37.48

 

 

$

20.89

 

Exercisable as of June 30, 2022

 

 

419,976

 

 

$

43.00

 

 

$

22.22

 

 

31


 

The following table summarizes the Company’s option activity as it relates to Exit-Vesting stock options as of June 30, 2022:

 

 

 

June 30, 2022

 

 

 

Number of
Options

 

 

Weighted-
Average
Exercise
Price Per
Share

 

 

Weighted-
Average
Grant Date
Fair Value
Per Share

 

Outstanding as of December 31, 2021

 

 

222,424

 

 

$

43.00

 

 

$

18.10

 

Granted

&