Bumble Inc. - Quarter Report: 2023 June (Form 10-Q)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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, 2023


☐	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.

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 31, 2023, Bumble Inc. had 136,517,264 shares of Class A common stock, par value $0.01 per share, outstanding and 20 shares of Class B common stock, par value $0.01 per share, outstanding.

SPECIAL NOTE REGARDING Forward-Looking Statements

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

•

our ability to retain existing users or attract new users and to convert users to paying users

•

competition and changes in the competitive landscape of our market

•

our ability to distribute our dating products through third parties, such as Apple App Store or Google Play Store, and offset related fees

•

the impact of data security breaches or cyber attacks on our systems and the costs of remediation related to any such incidents

•

the continued development and upgrading of our technology platform and our ability to adapt to rapid technological developments and changes in a timely and cost-effective manner

•

our ability to obtain, maintain, protect and enforce intellectual property rights and successfully defend against claims of infringement, misappropriation or other violations of third-party intellectual property

•

our ability to comply with complex and evolving U.S. and international laws and regulations relating to our business, including data privacy laws

•

foreign currency exchange rate fluctuations

•

risks relating to certain of our international operations, including geopolitical conditions and successful expansion into new markets

•

the impact of current developments in Russia, Ukraine and surrounding countries on our business and users, including the impact of our decision to discontinue our operations in Russia and remove our apps from the Apple App Store and Google Play Store in Russia and Belarus

•

control of us by Blackstone and our Founder (each, as defined below)

•

the outsized voting rights of Blackstone and our Founder

•

the inability to attract hire and retain a highly qualified and diverse workforce, or maintain our corporate culture

•

changes in business or macroeconomic conditions, including the impact of 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, extreme weather events 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, 2022 (“2022 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) and LinkedIn (www.linkedin.com/company/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, SEC filings 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.

Certain Definitions

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

•

“Badoo App and Other Average Revenue per Paying User” is a metric calculated based on Badoo App and Other Revenue in any measurement period, excluding any revenue generated from Fruitz, advertising and partnerships or affiliates, divided by Badoo App and Other Paying Users in such period divided by the number of months in the period.

•

a “Badoo App and Other Paying User” is a user that has purchased or renewed a subscription plan and/or made an in-app purchase on Badoo app in a given month (or made a purchase on one of our other apps that we owned and operated in a given month (excluding Fruitz), or purchase on other third-party apps that used our technology in the relevant period). We calculate Badoo App and Other Paying Users as a monthly average, by counting the number of Badoo App and Other Paying Users in each month and then dividing by the number of months in the relevant measurement period.

•

“Badoo App and Other Revenue” is revenue derived from purchases or renewals of a Badoo app subscription plan and/or in-app purchases on Badoo app in the relevant period, purchases on one of our other apps that we owned and operated in the relevant period, purchases on other third party apps that used our technology in the relevant period and advertising, partnerships or affiliates revenue in the relevant period.

•

“Blackstone” or “our Sponsor” refer to investment funds associated with Blackstone Inc.

•

“Blocker Companies” refer to certain entities that are taxable as corporations for U.S. federal income tax purposes in which the Pre-IPO Shareholders held interests.

•

“Blocker Restructuring” refers to certain restructuring transactions that resulted in the acquisition by Pre-IPO Shareholders of shares of Class A common stock in exchange for their ownership interests in the Blocker Companies and Bumble Inc. acquiring an equal number of outstanding Common Units.

•

“Board of Directors” or “Board” refers to the board of directors of Bumble Inc.

•

“Bumble,” the “Company,” “we,” “us” and “our” refer to Bumble Inc. and its consolidated subsidiaries.

•

“Bumble App Average Revenue per Paying User” or "Bumble App ARPPU" is a metric calculated based on Bumble App Revenue in any measurement period, divided by Bumble App Paying Users in such period divided by the number of months in the period.

•

a “Bumble App Paying User” is a user that has purchased or renewed a Bumble app subscription plan and/or made an in-app purchase on Bumble app in a given month. We calculate Bumble App Paying Users as a monthly average, by counting the number of Bumble App Paying Users in each month and then dividing by the number of months in the relevant measurement period.

•

“Bumble App Revenue” is revenue derived from purchases or renewals of a Bumble app subscription plan and/or in-app purchases on Bumble app in the relevant period.

•

“Bumble Holdings” refers to Buzz Holdings L.P., a Delaware limited partnership.

•

“Class B Units” refers to the interests in Bumble Holdings called “Class B Units,” including the Class B units held by Buzz Management Aggregator L.P., that were outstanding prior to the Reclassification.

•

“Co-Investor” or “Accel” refer to an affiliate of Accel Partners LP.

•

“Common Units” refers to the new class of units of Bumble Holdings created by the Reclassification and does not include Incentive Units.

•

“Continuing Incentive Unitholders” refers to certain pre-IPO holders of Class B Units who hold Incentive Units following the consummation of the Reorganization Transactions and the Offering Transactions.

•

“Founder” refers to Whitney Wolfe Herd, the founder of Bumble app, our Chief Executive Officer and member of our Board of Directors, together with entities beneficially owned by her.

•

“Fruitz” refers to Flashgap SAS, which operates the Fruitz app.

•

“Incentive Units” refers to the class of units of Bumble Holdings created by the reclassification of the Class B Units in the Reclassification. The Incentive Units are “profit interests” having economic characteristics similar to stock appreciation rights and having the right to share in any equity value of Bumble Holdings above specified participation thresholds. Vested Incentive Units may be converted to Common Units and be subsequently exchanged for shares of Class A common stock.

•

“Incentive Unitholders” refers collectively to our Continuing Incentive Unitholders and eligible service providers that received Incentive Units at the time of the IPO in connection with such individual’s employment or service.

•

“IPO” refers to the initial public offering of Class A common stock, which was completed on February 16, 2021.

•

“Offering Transactions” refers to the offering of Class A common stock in the IPO and certain related transactions, as defined in “Item 2―Management’s Discussion and Analysis of Financial Condition and Results of Operations―Factors Affecting the Comparability of Our Results of Operations―Initial Public Offering and Offering Transactions”.

•

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

•

“Pre-IPO owners” refer to our Founder, our Sponsor, Co-Investor 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, as further described in "Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

•

“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.

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	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51
Item 4.	Controls and Procedures	52
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	53
Item 1A.	Risk Factors	53
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	53
Item 5.	Other Information	53
Item 6.	Exhibits	54
	Signatures	55

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, 2023			December 31, 2022
ASSETS
Cash and cash equivalents	$	381,019		$	402,559
Accounts receivable, net		98,520			66,930
Other current assets		47,406			31,882
Total current assets		526,945			501,371
Right-of-use assets		16,741			17,419
Property and equipment, net		15,654			14,467
Goodwill		1,585,281			1,579,770
Intangible assets, net		1,508,036			1,524,428
Deferred tax assets, net		31,507			24,050
Other noncurrent assets		8,133			31,116
Total assets	$	3,692,297		$	3,692,621
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	8,372		$	3,367
Deferred revenue		48,110			46,108
Accrued expenses and other current liabilities		124,309			156,443
Current portion of long-term debt, net		5,750			5,750
Total current liabilities		186,541			211,668
Long-term debt, net		617,189			619,223
Deferred tax liabilities, net		10,718			8,077
Payable to related parties pursuant to a tax receivable agreement		416,754			385,486
Other long-term liabilities		14,763			14,588
Total liabilities		1,245,965			1,239,042
Commitments and contingencies (Note 14)
Shareholders’ Equity:
Class A common stock (par value $0.01 per share, 6,000,000,000 shares authorized; 137,771,696 shares issued and 136,451,324 shares outstanding as of June 30, 2023; 129,774,299 shares issued and outstanding as of December 31, 2022, respectively)		1,378			1,298
Class B common stock (par value $0.01 per share, 1,000,000 shares authorized; 20 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively)		—			—
Preferred stock (par value $0.01; authorized 600,000,000 shares; no shares issued and outstanding as of June 30, 2023, and December 31, 2022, respectively)		—			—
Additional paid-in capital		1,735,792			1,691,911
Treasury stock (1,320,372 and no shares as of June 30, 2023 and December 31, 2022, respectively)		(15,743	)		—
Accumulated deficit		(134,729	)		(139,871	)
Accumulated other comprehensive income		78,606			74,477
Total Bumble Inc. shareholders’ equity		1,665,304			1,627,815
Noncontrolling interests		781,028			825,764
Total shareholders’ equity		2,446,332			2,453,579
Total liabilities and shareholders’ equity	$	3,692,297		$	3,692,621

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

Bumble Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share information)

(Unaudited)



	Three Months Ended June 30, 2023			Three Months Ended June 30, 2022			Six Months Ended June 30, 2023			Six Months Ended June 30, 2022
Revenue	$	259,735		$	219,206		$	502,683		$	429,236
Operating costs and expenses:
Cost of revenue		76,737			61,509			147,317			117,121
Selling and marketing expense		65,329			59,483			128,919			116,312
General and administrative expense		43,298			48,943			93,129			72,796
Product development expense		36,233			24,888			69,385			52,676
Depreciation and amortization expense		16,967			27,151			33,698			54,080
Total operating costs and expenses		238,564			221,974			472,448			412,985
Operating earnings (loss)		21,171			(2,768	)		30,235			16,251
Interest income (expense)		(6,110	)		(5,989	)		(11,329	)		(11,580	)
Other income (expense), net		(2,969	)		4,954			(6,530	)		18,184
Income (loss) before income taxes		12,092			(3,803	)		12,376			22,855
Income tax benefit (provision)		(2,743	)		(1,228	)		(5,356	)		(4,138	)
Net earnings (loss)		9,349			(5,031	)		7,020			18,717
Net earnings (loss) attributable to noncontrolling interests		2,596			(1,591	)		1,878			5,956
Net earnings (loss) attributable to Bumble Inc. shareholders	$	6,753		$	(3,440	)	$	5,142		$	12,761
Net earnings (loss) per share attributable to Bumble Inc. shareholders
Basic earnings (loss) per share	$	0.05		$	(0.03	)	$	0.04		$	0.10
Diluted earnings (loss) per share	$	0.05		$	(0.03	)	$	0.04		$	0.10

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

Bumble Inc.

Condensed Consolidated Statements of Comprehensive Operations

(In thousands)

(Unaudited)



	Three Months Ended June 30, 2023		Three Months Ended June 30, 2022			Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
Net earnings (loss)	$	9,349	$	(5,031	)	$	7,020	$	18,717
Other comprehensive income (loss), net of tax:
Change in foreign currency translation adjustment		2,905		(8,973	)		5,725		(10,178	)
Total other comprehensive income (loss), net of tax		2,905		(8,973	)		5,725		(10,178	)
Comprehensive income (loss)		12,254		(14,004	)		12,745		8,539
Comprehensive income (loss) attributable to noncontrolling interests		3,406		(4,655	)		3,474		2,377
Comprehensive income (loss) attributable to Bumble Inc. shareholders	$	8,848	$	(9,349	)	$	9,271	$	6,162

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

Bumble Inc.

Condensed Consolidated Statements of Changes in Equity

Three months ended June 30, 2023

(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. Shareholders'			Noncontrolling			Total Shareholders’
	Shares		Amount		Shares		Amount		Capital			Shares		Amount			Deficit			Income (Deficit)		Equity			Interests			Equity
Balance as of March 31, 2023		137,571,188	$	1,376		20	$	—	$	1,787,802			—	$	—		$	(141,482	)	$	76,511	$	1,724,207		$	712,489		$	2,436,696
Net earnings (loss)		—		—		—		—		—			—		—			6,753			—		6,753			2,596			9,349
Stock-based compensation expense		—		—		—		—		(50,767	)		—		—			—			—		(50,767	)		85,003			34,236
Restricted stock units issued, net of shares withheld for taxes		179,976		2		—		—		(1,254	)		—		—			—			—		(1,252	)		(880	)		(2,132	)
Exchange of Common Units for Class A common stock		20,532		—		—		—		11			—		—			—			—		11			(11	)		—
Distribution to noncontrolling interest holders		—		—		—		—		—			—		—			—			—		—			(13,832	)		(13,832	)
Share repurchases		—		—		—		—		—			1,320,372		(15,743	)		—			—		(15,743	)		(5,147	)		(20,890	)
Other comprehensive loss, net of tax		—		—		—		—		—			—		—			—			2,095		2,095			810			2,905
Balance as of June 30, 2023		137,771,696	$	1,378		20	$	—	$	1,735,792			1,320,372	$	(15,743	)	$	(134,729	)	$	78,606	$	1,665,304		$	781,028		$	2,446,332

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

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. Shareholders'			Noncontrolling			Total Shareholders’
	Shares			Amount		Shares		Amount		Capital			Deficit			Income (Deficit)			Equity			Interests			Equity
Balance as of March 31, 2022		129,519,804		$	1,296		20	$	—	$	1,600,212		$	(43,924	)	$	77,913		$	1,635,497		$	868,947		$	2,504,444
Net earnings (loss)		—			—		—		—		—			(3,440	)		—			(3,440	)		(1,591	)		(5,031	)
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		—			—		—		—		—			—			(5,909	)		(5,909	)		(3,064	)		(8,973	)
Balance as of June 30, 2022		129,559,112		$	1,296		20	$	—	$	1,623,562		$	(47,364	)	$	72,004		$	1,649,498		$	863,707		$	2,513,205

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

Bumble Inc.

Condensed Consolidated Statements of Changes in Equity

Six months ended June 30, 2023

(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 Shareholders’ / Owners'
	Shares			Amount		Shares		Amount		Capital			Shares		Amount			Deficit			Income		Equity			Interests			Equity
Balance as of December 31, 2022		129,774,299		$	1,298		20	$	—	$	1,691,911			—	$	—		$	(139,871	)	$	74,477	$	1,627,815		$	825,764		$	2,453,579
Net earnings (loss)		—			—		—		—		—			—		—			5,142			—		5,142			1,878			7,020
Stock-based compensation expense		—			—		—		—		(21,510	)		—		—			—			—		(21,510	)		85,003			63,493
Impact of Tax Receivable Agreement due to exchanges of Common Units		—			—		—		—		(31,389	)		—		—			—			—		(31,389	)		—			(31,389	)
Cancellation of restricted shares		(1,829	)		—		—		—		(27	)		—		—			—			—		(27	)		27			—
Restricted stock units issued, net of shares withheld for taxes		753,456			8		—		—		(8,382	)		—		—			—			—		(8,374	)		(3,591	)		(11,965	)
Exchange of Common Units for Class A common stock		7,245,770			72		—		—		105,189			—		—			—			—		105,261			(105,261	)		—
Distribution to noncontrolling interest holders		—			—		—		—		—			—		—			—			—		—			(19,241	)		(19,241	)
Share repurchases		—			—		—		—		—			1,320,372		(15,743	)		—			—		(15,743	)		(5,147	)		(20,890	)
Other comprehensive loss, net of tax		—			—		—		—		—			—		—			—			4,129		4,129			1,596			5,725
Balance as of June 30, 2023		137,771,696		$	1,378		20	$	—	$	1,735,792			1,320,372	$	(15,743	)	$	(134,729	)	$	78,606	$	1,665,304		$	781,028		$	2,446,332

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

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	$	—	$	1,588,426		$	(60,125	)	$	78,603		$	1,608,196		$	861,573		$	2,469,769
Net earnings (loss)		—			—		—		—		—			12,761			—			12,761			5,956			18,717
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			—
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		—			—		—		—		—			—			(6,599	)		(6,599	)		(3,579	)		(10,178	)
Balance as of June 30, 2022		129,559,112		$	1,296		20	$	—	$	1,623,562		$	(47,364	)	$	72,004		$	1,649,498		$	863,707		$	2,513,205

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

Bumble Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



	Six Months Ended June 30, 2023			Six Months Ended June 30, 2022
Cash flows from operating activities:
Net earnings (loss)	$	7,020		$	18,717
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		33,698			54,080
Impairment loss		—			4,388
Changes in fair value of interest rate swaps		5,233			(13,630	)
Changes in fair value of contingent earn-out liability		(12,933	)		(19,395	)
Non-cash lease expense		1,747			2,373
Deferred income tax		(5,516	)		(3,893	)
Stock-based compensation expense		62,132			40,004
Net foreign exchange difference		(327	)		(13,162	)
Research and development tax credit		(593	)		(625	)
Other, net		23,293			8,655
Changes in assets and liabilities:
Accounts receivable		(30,981	)		(3,743	)
Other current assets		(2,256	)		21,076
Accounts payable		5,234			(9,157	)
Deferred revenue		1,954			3,897
Legal liabilities		(18,250	)		(7,418	)
Lease liabilities		(1,982	)		(2,342	)
Accrued expenses and other current liabilities		(11,329	)		(35,065	)
Other, net		(44	)		7
Net cash provided by (used in) operating activities		56,100			44,767
Cash flows from investing activities:
Capital expenditures		(9,210	)		(8,049	)
Acquisition of business, net of cash acquired		(9,877	)		(69,720	)
Net cash provided by (used in) investing activities		(19,087	)		(77,769	)
Cash flows from financing activities:
Repayment of term loan		(2,875	)		(2,875	)
Distributions paid to noncontrolling interest holders		(19,241	)		—
Share repurchases		(20,890	)		—
Withholding tax paid on behalf of employees on stock-based awards		(11,694	)		(6,194	)
Net cash provided by (used in) financing activities		(54,700	)		(9,069	)
Effects of exchange rate changes on cash and cash equivalents		(4,536	)		7,541
Net increase (decrease) in cash and cash equivalents and restricted cash		(22,223	)		(34,530	)
Cash and cash equivalents and restricted cash, beginning of the period		407,042			369,175
Cash and cash equivalents and restricted cash, end of the period		384,819			334,645
Less restricted cash		(3,800	)		—
Cash and cash equivalents, end of the period	$	381,019		$	334,645

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

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 applications through subscription and in-app purchases of 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 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.

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 187,972,796 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, 2023.

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

Secondary Offerings

On September 15, 2021, the Company completed a secondary offering of 20.70 million shares of Class A common stock on behalf of certain selling stockholders affiliated with Blackstone (the "Blackstone 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.

On March 8, 2023, the Company completed a secondary offering of 13.75 million shares of Class A common stock on behalf of the Blackstone Selling Stockholders and the Founder at a price of $22.80 per share. This transaction resulted in the issuance of 7.2 million shares of Class A common stock for the period ended March 31, 2023.

Bumble did not sell any shares of Class A common stock in the secondary offerings and did not receive any of the proceeds from the sales. Bumble paid the costs associated with the sale of shares by the Blackstone Selling Stockholders and the Founder, 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 2022 Form 10-K. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated statements and notes thereto included in the 2022 Form 10-K.

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

Statements of Changes in Equity Reclassification

In the second quarter of 2023, the Company adjusted balances within its Consolidated Statements of Changes in Equity to correct the allocation of stock-based compensation of $75.5 million from additional paid-in capital to noncontrolling interests. This amount relates to adjustments to additional paid-in capital and noncontrolling interests that had been incorrectly presented in the consolidated financial statements included within our previously filed Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 through March 31, 2023 and Annual Reports on Form 10-K for years ended December 31, 2022 and 2021. This classification adjustment is recorded in "Stock-based compensation expense" within our Condensed Consolidated Statements of Changes in Equity for the three and six month periods ended June 30, 2023.

The Company concluded the misclassification to be immaterial to the consolidated financial statements and noted that it has no impact on previously reported consolidated statements of operations, comprehensive operations, and cash flows.

Statements of Operations Reclassification

Beginning on January 1, 2023, the Company reclassified certain employee and non-employee related expenses that support engineering, data design and product management, as well as maintenance and support costs for technology infrastructure, from "General and administrative expense" to "Product development expense" in the Condensed Consolidated Statements of Operations to align with operational functions. The Company has reclassified $2.4 million and $5.0 million of expenses for the three and six months ended June 30, 2022, respectively, to conform to the current year presentation.

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

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, 2023 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 2022 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 business combinations, asset impairments, potential obligations associated with legal contingencies, the fair value of contingent consideration, the fair value of derivatives, stock-based compensation, tax receivable agreements, and income taxes.

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

Cash, Cash Equivalents and Restricted Cash

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

As of June 30, 2023 and December 31, 2022, the Company has classified the cash held in Russia as restricted cash due to the sanctions imposed by the Russia-Ukraine Conflict, which is included in “Other noncurrent assets” within the accompanying condensed consolidated balance sheets.

Share Repurchase Program

Shares repurchased pursuant to the Company's share repurchase program are held as treasury stock and reflected as a reduction of stockholders' equity within the accompanying condensed consolidated balance sheets. Upon retirement, the share repurchases will reduce common stock based on the par value of the shares and reduce its capital surplus for the excess of the repurchase price over the par value. In the event the Company still has an accumulated deficit balance, the excess over the par value will be applied to additional paid-in capital. Once the Company has retained earnings, the excess will be charged entirely to retained earnings.

Excise tax obligations will be included in the cost of the repurchased shares in the Company’s condensed consolidated financial statements. Reduction to the excise tax obligation associated with subsequent issuance of shares will be reflected as an adjustment to the excise tax previously recorded.

In May 2023, the Board of Directors approved a share repurchase program of up to $150.0 million of our outstanding Class A common stock. During the three and six months ended June 30, 2023, we repurchased 1.3 million shares for $20.9 million, on a trade date basis. As of June 30, 2023, a total of $129.1 million remains available for repurchase under the repurchase program.

Revenue Recognition

The Company recognizes revenue from services in accordance with FASB 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 determines 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 based on the terms of the underlying agreement and are recognized as revenue when it is probable that a significant revenue reversal would not occur. 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, 2023 and 2022, 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, 2023		Three Months Ended June 30, 2022		Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
Bumble App	$	207,977	$	168,474	$	402,254	$	322,841
Badoo App and Other		51,758		50,732		100,429		106,395
Total Revenue	$	259,735	$	219,206	$	502,683	$	429,236

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 $48.1 million and $46.1 million as of June 30, 2023 and December 31, 2022, respectively, all of which is classified as a current liability. During the three months ended June 30, 2023 and 2022, the Company recognized revenue of $11.6 million and $6.8 million, respectively, which was included in the deferred revenue balance at the beginning of each respective period. During the six months ended June 30, 2023 and 2022, the Company recognized revenue of $46.2 million and $36.6 million, respectively, that was included in the deferred revenue balance at the beginning of each respective period.

Fair Value Measurements

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

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


	•	Level 1 - Quoted prices in active markets for identical assets or liabilities.


	•	Level 2 - Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.


	•	Level 3 - Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available.

See Note 8, Fair Value Measurements, for additional information.

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 for time-vesting awards or a Monte Carlo simulation approach in an option pricing framework for exit-vesting awards. These require management to make assumptions with respect to the fair value of the Company’s equity award 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 11, Stock-based Compensation, for a discussion of the Company’s stock-based compensation plans and awards.

Recently Adopted Accounting Pronouncement

In March 2020, 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. In December 2022, the FASB issued ASU 2022-06 Reference Rate Reform (Topic 848) - Deferral of the Sunset Date of Topic 848 (ASU 2022-06), which extends the optional transition relief to ease the potential burden in accounting for reference rate reform on financial reporting. The transition relief is provided through December 30, 2024 based on the expectation that the LIBOR ceased to be published as of June 30, 2023. The amendments are effective prospectively at any point through December 31, 2024.

The Company utilized the LIBOR transition relief for the amendments to its credit agreement and interest rate swaps. During the three months ended March 31, 2023, the Company implemented its transition plan toward the cessation of LIBOR and modified its financial instruments with attributes that are either directly or indirectly influenced by LIBOR. The adoption of Topic 848 did not have a material impact on the Company's consolidated financial statements and disclosures.

Note 3 - Income Taxes

The Company is subject to U.S. federal and state income taxes and files consolidated income tax returns for U.S. federal and certain state jurisdictions with respect to its allocable share of any net taxable income of Bumble Holdings. For the three and six months ended June 30, 2023, the Company's effective tax rate was 22.7% and 43.3%, respectively, which differs from the U.S. federal statutory tax rate of 21% primarily due to the geographical distribution of our earnings, income attributable to noncontrolling interests, nondeductible stock-based compensation, and a valuation allowance recorded against certain deferred tax assets arising in the current year.

For the three and six months ended June 30, 2022, our effective tax rates were (32.3)% and 18.1%, 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 noncontrolling interests, nondeductible stock-based compensation, and a valuation allowance recorded against certain deferred tax assets arising in the current year.

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. 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, 2023. 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 to related parties of $416.8 million related to these benefits as of June 30, 2023. 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 $298.0 million for a total liability of $714.8 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. During the six months ended June 30, 2023, our tax receivable agreement liability increased by a net $22.4 million principally due to the effects of the March 2023 secondary offering of 13.75 million shares of Class A common stock of certain selling stockholders and the Founder and partially offset by the tax receivable agreement payments of $8.9 million made during the three months ended June 30, 2023.

Note 5 - Property and Equipment, net

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


	June 30, 2023			December 31, 2022
Computer equipment	$	25,015		$	22,366
Leasehold improvements		5,108			6,135
Furniture and fixtures		964			875
Total property and equipment, gross	$	31,087		$	29,376
Accumulated depreciation		(15,433	)		(14,909	)
Total property and equipment, net	$	15,654		$	14,467

Depreciation expense related to property and equipment, net for the three months ended June 30, 2023 and 2022 was $2.4 million and $2.2 million, respectively, and for the six months ended June 30, 2023 and 2022 was $4.8 million and $4.5 million, respectively.

Note 6 - 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, 2022	$	1,579,770
Acquisition		4,712
Foreign currency translation adjustment		799
Balance as of June 30, 2023	$	1,585,281

On April 26, 2023, the Company entered into a definitive agreement to purchase all the outstanding shares of Newel Corporation ("Newel") for a purchase price of approximately $10.0 million in cash. Newel (popularly known as Official) is an app that facilitates personal communication between partners. The Company acquired approximately $5.3 million in identifiable net assets and recognized goodwill of $4.7 million during the quarter ended June 30, 2023, based on a preliminary purchase price allocation. The goodwill is not expected to be tax deductible.

There were no impairment charges recorded for goodwill for the three and six months ended June 30, 2023 and 2022.

Intangible Assets, net

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


	June 30, 2023
	Gross Carrying Amount		Accumulated Amortization			Accumulated Impairment Losses			Net Carrying Amount		Weighted- Average Remaining Useful Life (Years)
Brands - indefinite-lived	$	1,511,269	$	—		$	(141,000	)	$	1,370,269	Indefinite
Brands - definite-lived		42,911		(3,629	)		—			39,282		12.7
Developed technology		249,416		(168,720	)		—			80,696		1.6
User base		113,749		(112,999	)		—			750		0.7
White label contracts		33,384		(6,953	)		(26,431	)		—		—
Other		22,746		(5,707	)		—			17,039		4.0
Total intangible assets, net	$	1,973,475	$	(298,008	)	$	(167,431	)	$	1,508,036


	December 31, 2022
	Gross Carrying Amount		Accumulated Amortization			Accumulated Impairment Losses			Net Carrying Amount		Weighted- Average Remaining Useful Life (Years)
Brands - indefinite-lived	$	1,511,269	$	—		$	(141,000	)	$	1,370,269	Indefinite
Brands - definite-lived		36,280		(2,217	)		—			34,063		14.1
Developed technology		248,727		(143,704	)		—			105,023		2.1
User base		113,487		(112,877	)		—			610	—
White label contracts		33,384		(6,953	)		(26,431	)		—		—
Other		17,761		(3,298	)		—			14,463		4.3
Total intangible assets, net	$	1,960,908	$	(269,049	)	$	(167,431	)	$	1,524,428

Amortization expense related to intangible assets, net for the three months ended June 30, 2023 and 2022 was $14.6 million and $25.0 million, respectively, and for the six months ended June 30, 2023 and 2022 was $28.9 million and $49.6 million, respectively.

As of June 30, 2023, amortization of intangible assets with definite lives is estimated to be as follows (in thousands):


Remainder of 2023	$	29,541
2024		58,729
2025		12,285
2026		4,553
2027 and thereafter		30,437
Total	$	135,545

Note 7 - Other Financial Data

Consolidated Balance Sheets Information

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


	June 30, 2023		December 31, 2022
Capitalized aggregator fees	$	11,930	$	10,917
Prepayments		13,103		9,201
Income tax receivable		670		4,491
Derivative asset		16,861		—
Other receivables		4,842		7,273
Total other current assets	$	47,406	$	31,882

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


	June 30, 2023		December 31, 2022
Legal liabilities	$	7,768	$	20,501
Payroll and related expenses		14,863		20,814
Marketing expenses		26,743		19,874
Other accrued expenses		18,183		14,536
Lease liabilities		2,063		3,135
Income tax payable		4,818		3,092
Contingent earn-out liability		39,394		52,327
Payable to related parties pursuant to a tax receivable agreement		2		8,826
Other payables		10,475		13,338
Total accrued expenses and other current liabilities	$	124,309	$	156,443

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


	June 30, 2023		December 31, 2022
Lease liabilities	$	13,886	$	13,750
Other liabilities		877		838
Total other liabilities	$	14,763	$	14,588

Note 8 - 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, 2023
	Level 1		Level 2		Level 3		Total Fair Value Measurements
Assets:
Cash equivalent - money market funds	$	245,334	$	—	$	—	$	245,334
Derivative asset		—		16,861		—		16,861
Investments in equity securities		—		—		2,410		2,410
	$	245,334	$	16,861	$	2,410	$	264,605
Liabilities:
Contingent earn-out liability	$	—	$	—	$	39,394	$	39,394
	$	—	$	—	$	39,394	$	39,394


	December 31, 2022
	Level 1		Level 2		Level 3		Total Fair Value Measurements
Assets:
Cash equivalent - money market funds	$	322,409	$	—	$	—	$	322,409
Derivative asset		—		22,094		—		22,094
Investments in equity securities		—		—		2,577		2,577
	$	322,409	$	22,094	$	2,577	$	347,080
Liabilities:
Contingent earn-out liability	$	—	$	—	$	52,327	$	52,327
	$	—	$	—	$	52,327	$	52,327

There were no transfers between levels between June 30, 2023 and December 31, 2022.

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 $39.4 million and $52.3 million as of June 30, 2023 and December 31, 2022, respectively. Contingent earn-out liability is included in “Accrued expenses and other current liabilities” in the accompanying condensed consolidated balance sheets.

As of June 30, 2023, there is a contingent consideration arrangement, consisting of an earn-out payment to former shareholders of Worldwide Vision Limited of up to $150.0 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 liabilities, and, if the arrangement is long-term in nature, 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, 2023 and December 31, 2022, the fair value of the contingent earn-out liability reflects a risk-free rate of 5.4% and 4.7%, respectively.

In addition, there is a contingent consideration arrangement, consisting of an earn-out payment of up to $10.0 million in connection with the acquisition of Fruitz in January 2022. As of June 30, 2023, the balance of the contingent earn-out liability was nil.

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 stock price, discount rates and the timing of the future payments, which are based upon estimates of future achievement of the performance metrics. 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 $(12.3) million and $1.3 million for the three months ended June 30, 2023 and 2022, respectively, and $(12.9) million and $(19.4) million for the six months ended June 30, 2023 and 2022, respectively.

Note 9 - Debt

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


	June 30, 2023		December 31, 2022
Term Loan due January 29, 2027	$	629,938	$	632,813
Less: unamortized debt issuance costs		6,999		7,840
Less: current portion of debt, net		5,750		5,750
Total long-term debt, net	$	617,189	$	619,223

Credit Agreements

On January 29, 2020, the Company and the wholly-owned subsidiaries, Buzz Bidco LLC, Buzz Merger Sub Limited, and Buzz Finco LLC (the “Borrower”) 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 senior secured revolving credit facility of $50.0 million (the "Revolving Credit Facility") and $25.0 million available through letters of credit. In connection with the Original Credit Agreement, the Company incurred and paid debt issuance costs of $16.3 million during the year ended December 31, 2020.

On October 19, 2020, the Company entered into the Amendment No.1 to the Credit Agreement, which provides for incremental borrowing of an aggregate principal amount of $275.0 million (the “Incremental Term Loan”, and collectively with the Original Term Loan, the “Term Loans”). The terms of the Amendment No.1 to the 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 Amendment No.1 to the Credit Agreement, the Company incurred and paid debt issuance costs of $4.8 million during the year ended December 31, 2020, of which approximately $1.6 million was capitalized as debt issuance costs.

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. In connection with the repayment, the Company recognized a $3.4 million loss on extinguishment of long-term debt.

On March 20, 2023, in connection with a Benchmark Discontinuation Event, the Company entered into Amendment No. 2 to the Original Credit Agreement (“Amendment No. 2”), which provided for the transition of the benchmark interest rate from LIBOR to the Secured Overnight Financing Rate ("SOFR") pursuant to benchmark replacement provisions set forth in the Original Credit Agreement. Pursuant to the terms of Amendment No. 2, effective with the interest period beginning March 31, 2023, LIBOR was replaced with Term SOFR, a forward-looking term rate based on SOFR, plus a credit spread adjustment of 0.10% with respect to the Term Loans and 0.00% with respect to loans under the Revolving Credit Facility (Term SOFR plus such credit spread adjustment, “Adjusted Term SOFR”). All other terms of the Original Credit Agreement unrelated to the benchmark replacement and its incorporation were unchanged by Amendment No. 2. Effective March 31, 2023 all Term Loans outstanding are bearing interest based on Adjusted Term SOFR and there were no Revolving Credit Loans outstanding.

Based on the calculation of the applicable consolidated first lien net 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 (i) prior to March 31, 2023, LIBOR rate borrowings and (ii) on or after April 1, 2023, Adjusted Term SOFR borrowings. The applicable commitment fee under the revolving credit facility is between 0.375% and 0.500% per annum based upon the consolidated first lien net leverage ratio. The Borrower must also pay customary letter of credit fees and an annual administrative agency fee.

The interest rates in effect for the Original Term Loan and the Incremental Term Loan as of June 30, 2023 were 8.00% and 8.50%, respectively. The Original Term Loan Facility amortizes in equal quarterly installments in aggregate annual amounts equal to 1.00% of the principal amount of the Original Term Loan Facility outstanding as of the date of the closing of the Original Term Loan Facility, with the balance being payable at maturity on January 29, 2027. The Incremental Term Loan Facility amortizes in equal quarterly installments in aggregate annual amounts equal to 1.00% of the principal amount of the Incremental Term Loan Facility outstanding as of the date of the closing of the Incremental Term Loan Facility, with the balance being payable at maturity on January 29, 2027. Following the $200.0 million aggregate principal payment of amount of outstanding indebtedness during the three months ended March 31, 2021 quarterly installment payments on the Incremental Term Loan Facility are no longer required for the remaining term of the facility. Principal amounts outstanding under the Revolving Credit Facility are due and payable in full at maturity on

January 29, 2025. As of June 30, 2023, and at all times during the six months ended June 30, 2023, 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, 2023. 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, 2023, were as follows (in thousands):


Remainder of 2023	$	2,875
2024		5,750
2025		5,750
2026		5,750
2027 and thereafter		609,813
Total	$	629,938

Note 10 - Earnings (Loss) per Share

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 by the weighted-average number of shares of our Class A common stock outstanding.

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

Diluted EPS attributable to common stockholders is computed by dividing the resulting net earnings (loss) attributable to common stockholders by the weighted-average number of common shares 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 (in thousands):


	Three Months Ended June 30, 2023		Three Months Ended June 30, 2022			Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
Numerator:
Net earnings (loss)	$	9,349	$	(5,031	)	$	7,020	$	18,717
Net earnings (loss) attributable to noncontrolling interests		2,596		(1,591	)		1,878		5,956
Net earnings (loss) attributable to Bumble Inc. shareholders	$	6,753	$	(3,440	)	$	5,142	$	12,761

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


	Three Months Ended June 30, 2023		Three Months Ended June 30, 2022			Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
Basic earnings (loss) per share attributable to common stockholders
Numerator
Allocation of net earnings (loss) attributable to Bumble Inc. shareholders	$	6,752	$	(3,440	)	$	4,967	$	12,804
Less: net earnings (loss) attributable to participating securities		4		—			3		15
Net earnings (loss) attributable to common stockholders	$	6,748	$	(3,440	)	$	4,964	$	12,789
Denominator
Weighted average number of shares of Class A common stock outstanding		137,123,855		129,398,184			134,538,476		129,316,467
Basic earnings (loss) per share attributable to common stockholders	$	0.05	$	(0.03	)	$	0.04	$	0.10

Diluted earnings (loss) per share attributable to common stockholders
Numerator
Allocation of net earnings (loss) attributable to Bumble Inc. shareholders	$	6,700	$	(3,440	)	$	4,904	$	12,644
Increase in net earnings (loss) attributable to common shareholders upon conversion of potentially dilutive Common Units		2,649		—			2,116		6,073
Less: net earnings (loss) attributable to participating securities		4		—			3		14
Net earnings (loss) attributable to common stockholders	$	9,345	$	(3,440	)	$	7,017	$	18,703
Denominator
Number of shares used in basic computation		137,123,855		129,398,184			134,538,476		129,316,467
Add: weighted-average effect of dilutive securities
Restricted shares		—		—			—		—
RSUs		710,608		—			1,179,172		684,071
Options		—		—			—		—
Common Units to Convert to Class A Common Stock		53,542,967		—			56,916,333		61,501,508
Weighted average shares of Class A common stock outstanding used to calculate diluted earnings (loss) per share		191,377,430		129,398,184			192,633,981		191,502,046
Diluted earnings (loss) per share attributable to common stockholders	$	0.05	$	(0.03	)	$	0.04	$	0.10

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, 2023		Three Months Ended June 30, 2022		Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
Time-vesting awards:
Options		3,819,104		2,773,714		3,819,104		2,773,714
Restricted shares		—		63,244		—		—
RSUs		3,589,951		4,180,300		2,395,779		995,154
Incentive units		641,383		4,282,841		366,393		446,550
Total time-vesting awards		8,050,438		11,300,099		6,581,276		4,215,418

Exit-vesting awards:
Options		79,908		164,362		79,908		164,362
Restricted shares		—		68,793		—		—
RSUs		148,134		944,710		6,060		944,710
Incentive units		1,294,451		4,324,868		980,936		4,324,868
Total exit-vesting awards		1,522,493		5,502,733		1,066,904		5,433,940
Total		9,572,931		16,802,832		7,648,180		9,649,358

Note 11 - Stock-based Compensation

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



(In thousands)	Three Months Ended June 30, 2023		Three Months Ended June 30, 2022		Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
Cost of revenue	$	1,120	$	971	$	2,258	$	1,919
Selling and marketing expense		1,195		2,091		4,723		769
General and administrative expense		18,860		11,690		33,676		21,497
Product development expense		12,373		7,695		21,475		15,819
Total stock-based compensation expense	$	33,548	$	22,447	$	62,132	$	40,004

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

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.

On July 15, 2022, the Exit-Vesting awards granted to 386 participants were modified to also provide for time-based vesting in 36 equal installments, with the first installment vesting on August 29, 2022 and subsequent installments vesting on each of the next 35 monthly anniversaries of 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. Incremental expense associated with the modification of the Exit-Vesting awards was $35.8 million, which is expected to be recognized over a period of 3.0 years. If the performance conditions are met prior to their respective time-vesting schedules, vesting of these Exit-Vesting awards and the associated stock-based compensation will be accelerated pursuant to the terms of the award agreements.

Incremental expense for the modified Exit-Vesting awards was based on the modification date fair value of modified Exit-Vesting Awards. The modification 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 are accounted for as they occur.

The weighted-average assumptions the Company used in the Monte Carlo model for the modified Exit-Vesting awards are as follows:


Dividend yield		—
Expected volatility		60	%
Risk-free interest rate	2.1% to 3.1%
Expected time to liquidity event (years)		1.0

Compensation cost related to the Exit-Vesting awards for the three months ended June 30, 2023 and 2022 was $5.4 million and $2.6 million, respectively, and $9.0 million and $3.5 million, respectively, for the six months ended June 30, 2023 and 2022.

On February 25, 2023, the Board of Directors approved amendments to outstanding Exit-Vesting awards with respect to change in control provisions. See “Item 9B — Other Information” of our 2022 Form 10-K for additional details. The Company reviewed the amendments to the change of control provisions in accordance with ASC 718, Compensation—Stock Compensation, and determined that the modification does not impact the existing expense recognition and financial statement presentation.

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 initially reserved 30,000,000 shares of Class A common stock for the issuance of awards under the 2021 Omnibus Plan. The number of shares available for issuance under the 2021 Omnibus Plan will be increased automatically on January 1 of each fiscal year, by a number of shares of our Class A common stock equal to the least of (i) 12,000,000 shares of Class A common stock; (ii) 5% of the total number of shares of Class A common stock outstanding on the last day of the immediately preceding fiscal year, and (iii) a lower number of shares as may be determined by the Board. The Board elected not to approve an increase to the number of shares available for issuance under the 2021 Omnibus Plan for each of 2022 and 2023.

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.

The fair value of Time-Vesting Options granted during the six months ended June 30, 2023 was determined using the Black-Scholes option pricing model with the following assumptions:


Volatility	65%-80%
Expected Life	7.0 years
Risk-free rate	3.7%-3.9%
Fair value per unit	$11.20-$18.19
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. In July 2022, the Exit-Vesting RSUs were modified to also provide for time-based vesting in 36 equal installments, with the first installment vesting on August 29, 2022, and subsequent installments vesting on each of the next 35 monthly anniversaries of 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 (as noted above in the section headed “Post-IPO Award 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, 2022		3,857,248		$	14.33		3,724,214		$	13.81
Granted		—			—		—			—
Vested		(839,936	)		13.91		(716,313	)		13.63
Forfeited		(146,094	)		43.00		(117,236	)		12.35
Unvested as of June 30, 2023		2,871,218		$	12.99		2,890,665		$	12.67

As of June 30, 2023, total unrecognized compensation cost related to the Time-Vesting Incentive Units is $6.1 million, which is expected to be recognized over a weighted-average period of 1.8 years. Total unrecognized compensation cost related to the Exit-Vesting Incentive Units is $12.7 million, which is expected to be recognized over a weighted average period of 2.0 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. In July 2022, the Exit-Vesting restricted stock were modified to also provide for time-based vesting in 36 equal installments, with the first installment vesting on August 29, 2022, and subsequent installments vesting on each of the next 35 monthly anniversaries of 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 (as noted above in the section headed “Post-IPO Award 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, 2022		58,247		$	7.02		55,744		$	17.26
Granted		—			—		—			—
Vested		(18,746	)		6.73		(10,631	)		17.26
Forfeited		(832	)		6.73		(997	)		17.01
Unvested as of June 30, 2023		38,669		$	7.17		44,116		$	17.26

As of June 30, 2023, total unrecognized compensation cost related to the Time-Vesting restricted shares is $0.1 million, which is expected to be recognized over a weighted-average period of 1.6 years. Total unrecognized compensation cost related to the Exit-Vesting restricted shares is $0.3 million, which is expected to be recognized over a weighted average period of 2.1 years.

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 will 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 or quarterly 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. In July 2022, the Exit-Vesting RSUs were modified to also provide for time-based vesting in 36 equal installments, with the first installment vesting on August 29, 2022, and subsequent installments vesting on each of the next 35 monthly anniversaries of 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 (as noted above in the section headed “Post-IPO Award Reclassification”).

In June 2023, the Company's Board of Directors adopted an Independent Director Compensation Policy for independent directors not employed by the Company. Initial and annual Time-Vesting RSUs granted under the Independent Director Compensation Policy will vest on the earlier of (i) immediately prior to the first annual meeting of the shareholders of the Company following the grant date, or (ii) the first anniversary of the current year annual meeting of the shareholders of the Company.



	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, 2022		4,845,852		$	32.50		761,473		$	40.23
Granted		3,799,190			22.13		—			—
Vested		(1,155,407	)		33.64		(117,206	)		41.98
Forfeited		(413,842	)		34.22		(200,783	)		33.55
Unvested as of June 30, 2023		7,075,793		$	26.64		443,484		$	42.79

As of June 30, 2023, total unrecognized compensation cost related to the Time-Vesting RSUs is $110.4 million, which is expected to be recognized over a weighted-average period of 3.1 years. Total unrecognized compensation cost related to the Exit-Vesting RSUs is $6.2 million, which is expected to be recognized over a weighted average period of 2.1 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 the public offering represented a qualifying liquidity event that would cause the Exit-Vesting options’ performance conditions to be probable of occurring. In July 2022, the Exit-Vesting options were modified to also provide for time-based vesting in 36 equal installments, with the first installment vesting on August 29, 2022, and subsequent installments vesting on each of the next 35 monthly anniversaries of 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 (as noted above in the section headed “Post-IPO Award Reclassification”).

The following table summarizes the Company’s option activity as it relates to Time-Vesting stock options as of June 30, 2023:


	June 30, 2023
	Number of Options			Weighted- Average Exercise Price Per Share		Weighted- Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2022		2,946,118		$	35.64	$	20.34
Granted		1,191,250			21.09		15.67
Exercised		—			—		—
Forfeited and expired		(318,264	)		41.41		21.37
Outstanding as of June 30, 2023		3,819,104		$	30.62	$	18.79
Exercisable as of June 30, 2023		970,884		$	38.05	$	20.75

The following table summarizes the Company’s option activity as it relates to Exit-Vesting stock options as of June 30, 2023:


	June 30, 2023
	Number of Options			Weighted- Average Exercise Price Per Share		Weighted- Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2022		164,362		$	43.00	$	18.66
Granted		—			—		—
Exercised		—			—		—
Forfeited		(84,454	)		43.00		15.30
Outstanding as of June 30, 2023		79,908		$	43.00	$	22.21
Exercisable as of June 30, 2023		24,412		$	43.00	$	22.21

Total unrecognized compensation cost related to the Time-Vesting options is $29.3 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 options is $0.4 million, which is expected to be recognized over a weighted-average period of 2.1 years.

Options have a maximum contractual term of 10 years. The aggregate intrinsic value – assuming all options are expected to vest – and weighted average remaining contractual terms of Time-Vesting and Exit-Vesting options outstanding and options exercisable were as follows as of June 30, 2023.


Aggregate intrinsic value
Time-Vesting options outstanding			—
Time Vesting options exercisable			—
Exit-Vesting options outstanding			—
Exit-Vesting options exercisable			—
Weighted-average remaining contractual term (in years)
Time-Vesting options outstanding			8.7
Time Vesting options exercisable			7.9
Exit-Vesting options outstanding			7.6
Exit-Vesting options exercisable			7.6

The weighted average exercise price exceeded the market price as of June 30, 2023, and as such, resulted in the aggregate intrinsic value to be negative for all of the Company’s stock options (referred to as “out-of-the money”).

Note 12 - Related Party Transactions

In the ordinary course of operations, the Company enters into transactions with related parties, as discussed below.



Related Party relationship	Type of Transaction	Financial Statement Line	Three Months Ended June 30, 2023		Three Months Ended June 30, 2022		Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
Other	Marketing costs	Selling and marketing expense	$	1,378	$	1,034	$	2,610	$	1,526
Other	Moderator costs	Cost of revenue		1,337		436		2,460		597
Other	Advertising revenue	Revenue		158		—		334		—



Related Party relationship	Type of Transaction	Financial Statement Line	June 30, 2023		December 31, 2022
Pre-IPO owners	Tax receivable agreement	Accrued expenses and other current liabilities	$	2	$	8,826
Pre-IPO owners	Tax receivable agreement	Payable to related parties pursuant to a tax receivable agreement		416,754		385,486

Payable to related parties pursuant to a tax receivable agreement

Concurrent with the completion of the IPO, the Company entered into a tax receivable agreement with pre-IPO owners including our Founder, our Sponsor, an affiliate of Accel Partners LP and management and other equity holders (see Note 4, Payable to Related Parties Pursuant to a Tax Receivable Agreement).

Other

The Company recognizes advertising revenues and incurs marketing expenses from Liftoff Mobile Inc. ("Liftoff"), a company in which Blackstone-affiliated funds hold a controlling interest. The Company uses TaskUs Inc. ("TaskUs"), a company in which Blackstone-affiliated funds holds more than a 20% ownership interest, for moderator services.

Note 13 - Segment and Geographic Information

The Company operates as a single operating segment. The Company’s chief operating decision maker is the Chief Executive Officer, who reviews financial information presented on a consolidated basis, accompanied by disaggregated information about the Company’s revenue, for purposes of making operating decisions, assessing financial performance and allocating resources.

Revenue by major geographic region is based upon the location of the customers who receive the Company’s services. The information below summarizes revenue by geographic area, based on customer location (in thousands):



	Three Months Ended June 30, 2023		Three Months Ended June 30, 2022		Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
North America(1)	$	148,890	$	133,514	$	290,447	$	256,026
Rest of the world		110,845		85,692		212,236		173,210
Total	$	259,735	$	219,206	$	502,683	$	429,236

(1) North America revenue includes revenue from the United States and Canada.

The United States is the only country with revenues of 10% or more of the Company’s total revenue for the three and six months ended June 30, 2023 and 2022.

The information below summarizes property and equipment, net by geographic area (in thousands):


	June 30, 2023		December 31, 2022
United Kingdom	$	5,554	$	5,893
United States		3,709		4,462
Czech Republic		3,836		1,491
Rest of the world		2,555		2,621
Total	$	15,654	$	14,467

United Kingdom, United States and Czech Republic are the only countries with property and equipment of 10% or more of the Company’s total property and equipment, net at June 30, 2023 and December 31, 2022.

Note 14 - Commitments and Contingencies

The Company has entered into indemnification agreements with the Company’s officers and directors for certain events or occurrences. The Company maintains a directors and officers insurance policy to provide coverage in the event of a claim against an officer or director.

Litigation

We are subject to various legal proceedings, claims, and governmental inspections, audits or investigations arising out of our business which cover matters such as general commercial, consumer protection, governmental regulations, product liability, privacy, safety, environmental, intellectual property, employment and other actions that are incidental to our business, including a number of trademark proceedings, both offensive and defensive, regarding the BUMBLE, BADOO and FRUITZ marks. Although the outcomes of these claims cannot be predicted with certainty, in the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on our financial position or results of operations.

In late 2021 and early 2022, four putative class action lawsuits were filed against the Company in Illinois alleging that certain features of the Badoo or Bumble apps violate the Illinois Biometric Information Privacy Act (“BIPA”). These lawsuits allege that the apps used facial geometry scans in violation of BIPA’s authorization, consent, and data retention policy provisions. Plaintiffs in these lawsuits seek statutory damages, compensatory damages, attorneys’ fees, injunctive relief, and (in one action) punitive damages. These cases are still in early stages and at this time the Company cannot reasonably estimate a range of potential liability, if any, which may arise therefrom.

In January 2022, a purported class action complaint, UA Local 13 Pension Fund v. Bumble Inc. et al., was filed in the United States District Court for the Southern District of New York naming, among others, the Company, our Chief Executive Officer, our Chief Financial Officer, our Board of Directors and Blackstone, as defendants. The complaint asserts claims under the U.S. federal securities laws, purportedly brought on behalf of a class of purchasers of shares of Class A common stock in Bumble’s secondary public stock offering that took place in September 2021 (the “SPO”), that the SPO Registration Statement and prospectus contained false and

misleading statements or omissions by failing to disclose certain information concerning Bumble and Badoo app paying users and related trends and issues with the Badoo app payment platform, and that as a result of the foregoing, Bumble’s business metrics and financial prospects were not as strong as represented in the SPO Registration Statement and prospectus. The complaint seeks unspecified damages and an award of costs and expenses, including reasonable attorneys’ fees, as well as equitable relief. In March 2023, the parties executed a settlement agreement that includes a full release of the asserted claims against the Company and other defendants in exchange for a settlement amount of $18 million. In August 2023, the court granted final approval of the settlement. The Company and its insurers have paid the full settlement amount into an escrow account in accordance with the terms of the court’s prior preliminary approval. The settlement does not reflect an admission of any allegation or wrongdoing, and the Company believes that the allegations contained in the complaint are without merit.

Six shareholder derivative complaints have been filed in the United States District Court for the Southern District of New York, United States District Court for the District of Delaware and Delaware Court of Chancery against the Company and certain directors and officers based on the same allegations and events described in the class action complaint above. The Glover-Mott shareholder derivative complaint, filed in April 2022 in federal court, alleges a breach of fiduciary duty against management and our Board of Directors. The complaint seeks unspecified damages, an award of costs and disbursements, including reasonable attorneys’ fees, and that the Company be directed to take action to reform its corporate governance and internal procedures. The Michael Schirano shareholder derivative complaint, filed in May 2023 in federal court, asserts claims for violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, waste, and unjust enrichment against, among others, management, our Board of Directors, and Blackstone. The complaint seeks unspecified damages; disgorgement from defendants of any unjustly obtained profits or benefits; an award of costs and disbursements, including reasonable attorneys’ fees; punitive damages; and that the Company be directed to take action to reform its corporate governance and internal procedures. Two federal court shareholder derivative complaints—the William B. Federman Irrevocable Trust complaint, filed in May 2022, and the Dana Messana complaint, filed in September 2022—were voluntarily dismissed in July 2023. In January 2023 and February 2023, purported shareholders Alberto Sanchez and City of Vero Beach Police Officers’ Retirement Trust Fund, respectively, filed shareholder derivative complaints in the Delaware Court of Chancery. In March 2023, the Delaware Court of Chancery consolidated those actions under the caption In re Bumble Inc. Stockholder Derivative Litigation. In April 2023, the consolidated action plaintiffs filed a consolidated complaint that asserts claims for breach of fiduciary duty and unjust enrichment against, among others, management, our Board of Directors, and Blackstone. The complaint seeks unspecified damages; a finding that the individual defendants breached their fiduciary duties; disgorgement from defendants of any unjustly obtained profits or benefits; and an award of costs and disbursement, including attorneys’ fees, accountants’ fees, and experts’ fees.

In August 2023, Bumble received a litigation demand from counsel representing the purported Bumble shareholder who filed the voluntarily dismissed William B. Federman Irrevocable Trust derivative action in the U.S. District Court for the District of Delaware. The litigation demand is directed to the Bumble Board and contains factual allegations involving the September 2021 SPO that are generally consistent with those in the derivative litigation filed in state and federal court. The letter demands, among other things, that Bumble’s Board undertake an independent investigation into alleged legal violations, and that Bumble commence a civil action to pursue related claims against any individuals who allegedly harmed Bumble. The Bumble Board will act in response to the letter as appropriate. Management is unable to determine a range of potential losses that is reasonably possible of occurring.

The Company has also received an inquiry from the SEC relating to the disclosures at issue in the SPO class action complaint. The Company cannot predict at this point the length of time that these matters will be ongoing, their outcome or the liability, if any, which may arise therefrom.

Beginning in June 2023, the Company has received thousands of individual demands for arbitration regarding Bumble’s alleged violation of California’s Unruh Civil Rights Act as a result of its “women message first” feature. As of August 4, 2023, there were approximately 15,500 individual arbitration claims pending. The parties have agreed to enter into a mediation and, as a result, we have been informed by JAMS, our putative arbitration service provider, that it has placed a stay on the administration of the submitted demands pending mediation. The Company cannot predict at this time the outcome or liability that may result from any such mediated resolution. If these claims or additional claims in the future were to proceed to arbitration, we could incur significant administrative, arbitrator, and legal fees and costs associated with their defense. For example, although we dispute the applicability and propriety of these fees, JAMS generally charges $2,000 in filing fees for each individual claim, which would be accrued when invoiced or, if earlier, when the services are rendered. In addition to filing fees, we could incur ongoing administrative fees to JAMS and its arbitrators and potential damages, including attorney’s fees and costs, if there were adverse outcomes. We cannot predict at this time the incremental liability, if any, we may incur related to these administrative or arbitrator fees, or damages or attorneys’ fees and costs,

or the length of time that it may take to resolve these claims. For the three months ended June 30, 2023, we recorded approximately $5.5 million in costs in connection with the parties' agreement to enter mediation.

From time to time, the Company is subject to patent litigations asserted by non-practicing entities.

As of June 30, 2023 and December 31, 2022, the Company determined that provisions of $7.8 million and $20.5 million, respectively, reflect our best estimate of any probable future obligation for the Company’s litigations. The provision as of December 31, 2022, includes amounts accrued with respect to the Company’s class action lawsuit related to the SPO, representing management’s current estimated probable loss for this matter following a court-ordered mediation between the parties to the litigation. During the second quarter of 2023, the Company made a payment of $18.3 million to settle litigation matters. Legal expenses are included in “General and administrative expense” in the accompanying condensed consolidated statements of operations.

Purchase Commitments

In May 2023, the Company amended the agreement for third-party cloud services, which superseded and replaced the September 2022 agreement. Under the amended terms, the Company is committed to pay a minimum of $12.0 million over the period of 18 months. If at the end of the 18 months, or upon early termination, the Company has not reached the $12.0 million in spend, the Company will be required to pay for the difference between the sum of fees already incurred and the minimum commitment. As of June 30, 2023, our minimum commitment remaining is $11.5 million.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of the financial condition and results of operations of Bumble Inc. in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in Part I, “Item 1 – Financial Statements (Unaudited)”. This discussion contains forward-looking statements that involve risks and uncertainties about our business and operations. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include, without limitation, those discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and those identified under “Special Note Regarding Forward-Looking Statements” and Part I, “Item 1A—Risk Factors" in our 2022 Form 10-K.

Overview

We provide online dating and social networking applications through subscription and in-app purchases of products servicing North America, Europe and various other countries around the world. Bumble operates four apps, Bumble, Badoo, Fruitz and Official, and we are a leader in the online dating space. Our apps monetize via a freemium model, where the use of the service is free and a subset of the users pay for subscriptions or in-app purchases to access premium features. We launched Bumble app in 2014 to address antiquated gender norms and a lack of kindness and accountability on the internet. We believe that healthy and equitable relationships begin with Kind Connections and focus on building authenticity and safety in the online space, which is marked at times by isolation and toxicity. We also believe there is a significant opportunity to extend our platform beyond online dating into healthy relationships across all areas of life: love, friendships, careers and beyond. By empowering women across all of their relationships, we believe that we have the potential to become a preeminent global women’s brand. By placing women at the center – where women make the first move – we are building a platform that is designed to be safe and empowering for women, and in turn, provide a better environment for everyone. Badoo app, launched in 2006, was one of the pioneers of web and mobile free-to-use dating products. In January 2022, we acquired Fruitz, a fast-growing dating app with a Gen Z focus, which is a growing segment of online dating consumers. Fruitz encourages open and honest communication of dating intentions through playful fruit metaphors. Revenues from Fruitz were included in Badoo App and Other Revenue but excluded from our key operating metrics. In April 2023, we acquired Newel (popularly known as Official), an app that facilitates personal communication between partners.

Quarter ended June 30, 2023 Consolidated Results

For the three months ended June 30, 2023 and 2022, we generated:

•

Total revenue of $259.7 million and $219.2 million, respectively;

•

Bumble App Revenue of $208.0 million and $168.5 million, respectively;

•

Badoo App and Other Revenue of $51.8 million and $50.7 million, respectively;

•

Net earnings (loss) of $9.3 million and $(5.0) million, respectively, representing net earnings (loss) margins of 3.6%, and (2.3)%, respectively; and

•

Adjusted EBITDA of $67.3 million and $54.8 million, respectively, representing Adjusted EBITDA margins of 25.9% and 25.0%, respectively.

Year-to-Date ended June 30, 2023 Consolidated Results

For the six months ended June 30, 2023 and 2022, we generated:

•

Total revenue of $502.7 million and $429.2 million, respectively;

•

Bumble App Revenue of $402.3 million and $322.8 million, respectively;

•

Badoo App and Other Revenue of $100.4 million and $106.4 million, respectively;

•

Net earnings (loss) of $7.0 million and $18.7 million, respectively, representing net earnings (loss) margins of 1.4% and 4.4%, respectively; and

•

Adjusted EBITDA of $126.6 million and $104.6 million, respectively, representing Adjusted EBITDA margins of 25.2% and 24.4%, respectively.

•

Net cash provided by operating activities of $56.1 million and $44.8 million, respectively, and operating cash flow conversion of 799.1% and 239.2%, respectively; and

•

Free cash flow of $46.9 million and $36.7 million, respectively, representing free cash flow conversion of 37.0% and 35.1%, respectively.

For a reconciliation of Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow and Free Cash Flow Conversion, which are all non-GAAP measures, to the most directly comparable GAAP financial measures, information about why we consider Adjusted EBITDA, Adjusted EBITDA margin, free cash flow and free cash flow conversion useful and a discussion of the material risks and limitations of these measures, please see “—Non-GAAP Financial Measures.”

Key Operating and Financial Metrics

We regularly review a number of metrics, including the following key operating and financial metrics, to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions. We believe these non-GAAP and operational measures are useful in evaluating our performance, in addition to our financial results prepared in accordance with GAAP. See “—Non-GAAP Financial Measures” for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures.

The following metrics were calculated excluding paying users and revenue generated from Fruitz:


(In thousands, except ARPPU)	Three Months Ended June 30, 2023		Three Months Ended June 30, 2022		Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
Bumble App Paying Users		2,457.8		1,924.5		2,388.3		1,849.8
Badoo App and Other Paying Users		1,175.5		1,096.2		1,158.3		1,164.2
Total Paying Users		3,633.3		3,020.7		3,546.6		3,014.0
Bumble App Average Revenue per Paying User	$	28.21