Bumble Inc. (BMBL) Q3 2021 Earnings Report, Transcript and Summary

Good day and thank you for standing by. Welcome to Bumble Third Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. I would now like to hand the conference over to your speaker today, [indiscernible], VP of Investor Relations. Please go ahead.

Thank you for joining us to discuss Bumble's Third Quarter 2021 Financial results. With me today are Whitney Wolfe Herd, Founder and CEO; Tariq Shaukat, President; and Anu Subramanian, CFO of Bumble. Before we begin, I'd like to remind everyone that certain statements may be made on this call today that are forward-looking statements. These forward-looking statements are subject to various risks and uncertainties and reflect our current expectations based on our beliefs, assumptions, and information currently available to us. Although we believe these expectations are reasonable, we undertake no obligation to revise any statements to reflect changes that occur after this call. Descriptions of these factors and other risks that could cause actual results to differ materially from these forward-looking statements are discussed in more detail in our filings with the SEC, including our annual report on Form 10-K for the year ended December 31st, 2020 and our subsequent periodic filings. During the call, we also refer to certain non-GAAP financial measures. These non-GAAP measures should be considered in addition to, and not as a substitute for or in isolation from, our GAAP results. Reconciliations to the most comparable GAAP measures are available in today's earnings press release, which is available on the Investor Relations section for the website at ir.bumble.com. With that, I will turn it over to Whitney.

Good afternoon and thank you all for taking the time to join us today. I hope everyone is staying healthy and well. As we draw closer to Thanksgiving weekend here in the US, I'm especially grateful for the opportunity we had in late September to be together in our London office for the first time in over 18 months. In addition to a very productive week of meetings, the highlight for me was being able to catch up in person with many tenured members of our team, as well as finally meeting several wonderful and talented newbies that have joined us in the last year-and-a-half. It reminded me of a quote that someone shared with me that I wanted to share here today. The pandemic has reminded us that life is more than what we do. It is about whom we spend our lives with. We cannot hug a career or laugh with a promotion. We are made for friendship, love and community. At Bumble Inc., we remain committed to our mission of creating a world where all relationships are healthy and equitable, and in providing our users with easy, compelling ways to find the connections they seek. We do this via our two brands, Bumble App and Badoo app, which are two of the leading players in the rapidly growing global online dating market. This is a market that, in 2020, had a global TAM, excluding China, of 5.3 billion and is still in relatively early innings of growth, with robust secular tailwinds. As people become increasingly comfortable with leveraging technology to interact with others and as more users have seen the value proposition that online dating offers from a choice, convenience and even cost standpoint, we believe there is ample runway for TAM expansion through broader user adoption, pair conversion and revenue growth per user. Apps today still have a small wallet share of overall dating spend and online dating is not a zero sum game, with most users on multiple apps at any given time. So this long tail of secular growth, combined with our unique strengths and differentiated core value proposition, adds up to a tremendous opportunity ahead of us that we are really excited about. Our broad global footprint across each of these apps and our market leadership position is reflected in our strong results this quarter. At a group level, Bumble Inc. delivered total revenue of $201 million, which was up [Technical Difficulty 0:04:31] from last year and adjusted EBITDA of $54 million, representing an adjusted EBITDA margin of 27%. We grew total payers to 2.9 million, while average revenue per paying user, or our PPU, accelerated by 19% on a year-over-year basis. Let me unpack these results and share more detailed updates, beginning with Bumble app. Bumble app had another excellent quarter, with revenue of $142 million up 39% year-over-year, and representing more than 70% of total company revenue for Q3. We saw strong engagement across the app with record levels of activity once again in monthly active and daily active users, leading to total paying users of 1.5 million, up 20% year-over-year. I am proud of the brand affinity, trust and loyalty we have with Bumble's rapidly growing community of users worldwide. Consumer research tells us that our brand personality is different from our peers on average. A significant majority of our users believe that Bumble app is modern, safe and easy to use. And the brand is viewed as empowering and as a force for good. This is reflected in our results and in Q3. Revenue generated by women on Bumble app increased at a faster rate than men on a year-over-year basis. In particular, our PPU growth for women continues to outpace that for men across all three major generational segments, Gen X, Millennials and Gen Z. This is truly a testament to the strength of our woman-first brand. According to third-party data sources, Bumble app gained download share on a quarter-over-quarter basis in all of its core markets, including US, Canada, UK and Australia. In the US, which remains Bumble's largest and most established market, we have continued to maintain our leadership position as the number two grossing lifestyle app on the iOS platform. As we've mentioned in the past, one of the biggest priorities for Bumble app is international expansion, and we were very pleased to see continued strong growth in many markets around the world. In the past year, we've significantly expanded beyond our core English speaking markets. In Q3, we made meaningful progress in entering new markets in LatAm. We have successful launches supported by marketing campaigns in Mexico and Brazil, which contributed to nearly 100% year-over-year paying user growth across the LatAm region. Other newer regions, such as DACH and Southeast Asia, continued the growth momentum we've seen in prior quarters. India continued is resilience as the country slowly opened up and we also saw strengthen in markets such as Indonesia and Philippines, where we saw robust growth in users, pairs and revenue. Our ability to localize the Bumble app experience for many nuances is a key differentiator that enables this growth. For example, this quarter, we launched language badges and localized interest badges in many of our international markets. Among users who adopted language badges, we saw an increase in matches and a higher tendency to have good chats. It's exciting to see how customers in such different regions have embraced Bumble app's commitment to safety and women-focused narratives, which further proves that Bumble's foundational mission is much needed and wanted around the world. Product innovation is a core priority for us and we build and implement a range of different approaches that allow us to be market leaders in our category. This quarter, we focused on encouraging high intent dating behaviors in order to deliver greater levels of overall user success. As part of this, we optimized our user onboarding process, introduced a new profile wizard, and made a minimum of two photos mandatory for most new users to elicit richer, more detailed user profiles. In addition to improving profile completion rates, this also enables us to increase safety on the platform with the percentage of users that are now photo verified up 31% year-over-year. We also introduced features to deliver more relevant potential matches and easier ways to initiate meaningful chats, including discovery by dating intent, a new screen for passive matches and chat initiations from user profiles. These enhancements significantly improved engagement metrics. Our goal is to build a better ecosystem experience for women, so that Bumble becomes a clear dating app of choice. And finally, we remain focused on this future relaunch of Bumble BFF, our platform for platonic relationships. We've spoken before of the affinity and trust people have for Bumble, given our mission and our focus on safety, which allows us to expand into other areas of social discovery and connections. V1 of BFF was originally created in response to user demand and the continued adoption of this early version, with MAU growth of 45% in Q3, speaks to pent up need in this space. Our initial focus will be on building community and ensuring a differentiated user experience for friendship seekers. On BFF, we are building a product that will help you find one-on-one connections, but will also help you find a broader community for shared joys and shared struggles. The first phase of building that has been to test multiple changes to the user experience, to make it easier to discover and to use BFF. For example, we recently tested a navigation flow change that increased crossover usage between modes. We saw a 150% plus increase in users, using more than one mode, thus further proving that BFF allows us to extend the lifetime value of a date customer. We plan to test with small groups in Q4 and we'll start expanding the test in early 2022. But looking even further ahead, Bumble BFF gives us a platform for Bumble to become a leader in the Web 3.0 world. Web 3.0 is all about community and treats everyone in the community as participants who together make the community what it is. Built on blockchain technology, we believe it will enable a level of participation and empowerment that will make our mission come to life. In the near term, this means new engagement, participation and creator models. But longer term, it becomes a way for members to own their experience on Bumble. This could happen through the communities they build, the virtual goods and experiences they acquire, or through new ways of owning their identity as they navigate the metaverse. As an engineering-oriented company, we are really excited by the possibilities that this opens up for us. And we are actively exploring how we bring these next gen opportunities to our members, beginning with BFF. Now turning to Badoo app and other revenue, which was $58 million for Q3, down 3% year-over-year. Badoo remains the second most downloaded dating app in the world. And from an engagement standpoint, its value proposition of providing quick and authentic connections without pressure continues to deliver. According to third-party data sources, on a quarter-over-quarter basis, Badoo has continued to outperform overall market download trends in many of its top markets, including the UK, Spain, Russia, and the US. But as we said last quarter, Badoo operates in a large number of markets where the pandemic is still a significant challenge. And the core Badoo user community, which is predominantly in the urban middle class segment, continues to face economic pressures from COVID. This has had an impact on user growth in these markets, with differences in pace of recovery by region. While many key markets, such as Russia and Brazil, have shown strong growth in both paying users and user revenue, other markets like France and Italy have lagged. We also see differences in performance by platform. It is important to recognize that Badoo has successfully expanded from legacy Web to mobile app platform. But over time, we've seen a secular decline in users and revenue on Badoo's desktop and mobile Web platforms that has accelerated during COVID. For example, in Q3, while Badoo revenue was up on iOS year-over-year, revenues from mobile web and desktop were down. We are managing this transition by moving our Web experience from a siloed independent experience to one that's more integrated, so we can better support customers who want that combination of a native app experience with the occasional use of desktop or mobile Web. In addition, we also saw a decline in paying users on Android this quarter. As we said before, we currently offer third-party billing options on the Android platform. For part of Q3, we disabled these third-party payment mechanisms, which caused some disruption to our customers and resulted in a decline in paying users. We've since reenabled these non-native payment platforms and are currently working closely with our partners to best optimize our payment flows, so that we can ensure minimal impact in the future. As we prepare for many Badoo markets to emerge from COVID, we are actively investing to release new features and strengthen product performance. For example, in Q3, we introduced Badoo Clips, a new short form video format for profiles, which has shown early signs of increasing retention among users who have engaged with the clip. We also improved our talk to someone experience to help people more easily start conversations with their matches, which has also had a positive impact on chats initiated. Alongside this, we've made multiple investments to drive more safety and accountability on Badoo. We've expanded our safety center and prioritize user education on blocking mechanisms, resulting in the effective removal of bad actors. We also recently launched rude message detector, a new feature that checks in with a member who has received a message that could be harmful or hurtful. The model initiates a pop up to make sure everything is okay and encourages the member to report, if not. This is available in over 100 languages and will also be expanded to Bumble. Now, moving back up to Bumble Inc. I'd like to highlight a couple of additional initiatives that underscore our overall company commitment to safety. During Q3, we launched a new machine learning model to reduce response times and respond to the most serious reports faster. We are also continuing our investments in automation and AI-based technology to improve proactive detection of content and behavior that violates our community guidelines. As I've said before, the safety of our community is our highest priority. And we continually strive to manifest that in every facet of our product and user experience. In closing, I am very proud of our team's focus, hard work and discipline and continuing to execute on our strategic priorities, including international expansion, growing users and engagement, stellar product innovation and building safe and accountable technology. In today's very competitive job market, particularly in tech, Bumble continues to be an employer of choice because of our mission, values and the strength of our team. I'm very grateful for that and excited about what we will all accomplish together in the future. And with that, let me turn it to Anu to discuss our latest financial and operational results. Thank you so much.

Thanks, Whitney. And hello, everyone. In Q3, we delivered excellent results with total revenue of $201 million and adjusted EBITDA of $54 million, both exceeding the high end of our previous guidance ranges for the quarter. Total revenue grew 24% year-over-year, with Q3 paying users at 2.9 million, up 5% year-over-year, and our PPU accelerating to $22.97, up 19% year-over-year. Bumble app continued to deliver strong growth, with revenue of $142 million, up 39% year-over-year and was up 12% sequentially. Growth was driven by healthy increases in both paying users and our PPU. Bumble app had over 1.5 million paying users in Q3, up 20% year-over-year. We continue to add paying users as we expand both in our core market and also internationally, with many of our newer launch countries in DACH and LatAm, showing triple-digit revenue growth. The product features we launched this quarter have also enabled us to improve conversion. One recent example on this front was a UX design shift, moving our popular Beeline feature to the bottom of users' navigation screen. This has helped increase awareness and adoption of the feature which has led to positive improvements in pair penetration. Bumble app's ARPPU was $30.99, up 16% year-over-year and 8% sequentially, with growth in nearly all regions, including in our core market. Our ARPPU growth reflects pricing optimizations and a full-year benefit from two tier subscription. Our work on consumables is also ongoing. The launch of extended spotlight and upsell of our popular spotlight feature has been well received globally, driving uplift in ARPPU. Our work around pricing and monetization will continue as we work on optimizing the user experience across different geographies with the goal of maximizing revenue. Badoo app and other revenue totaled 58 million, down $1.7 million or 3% year-over-year. In Q3, we saw a 9% year-over-year decrease in paying users to 1.3 million, which was offset by a 6% increase in ARPPU to $13.75. As you heard just now from Brittany, the declining paying users primarily reflects the headwinds in some geographic and demographic markets that have been more impacted by COVID and continued erosion in desktop and mobile Web usage. Paying users were also impacted for part of Q3 where we disable certain payment mechanisms on the Android platform. Badoo ARPPU in Q3 was up 6% year-over-ear, due to ongoing monetization improvements and a mix shift towards more longer-term subscriptions in Q3. We launched our second tier subscription product, Badoo Premium Plus late in Q3, so it only had a marginal revenue contribution in the quarter. Early signs post launch are very promising, and we plan to complete the global rollout of two tier pricing by early Q1. Turning now to expenses. I will discuss these on an adjusted basis excluding the impact of non-cash, one-time and other expenses. Cost of revenue was $56 million in Q3, up 28% year-over-year, representing 28% of revenue. The increase was primarily due to higher aggregator fees from higher revenue this quarter. Sales and marketing expenses were $52 million, up 41% year-over-year. This represents 26% of revenue compared to 23% last year. Most of the increase was due to reentry marketing campaigns and new market launches for Bumble as well as some performance marketing and rebranding initiatives for Badoo. Please note that we had lower-than-normal marketing spend in Q3 of last year, given COVID uncertainty and higher levels of lockdown. G&A spend was $24 million, up 35% year-over-year due to increased headcount and public company costs. As a percentage of revenue, this was 12%, up slightly from 11% last year. Product development expenses totaled $14 million, up 36% year-over-year. This was 7% of revenue compared to 6% last year. Most of the increase was also driven by higher headcount. Stock-based compensation expense for the quarter was $24 million compared to $9 million last year, primarily due to modification of equity awards at IPO and headcount growth. These expenses resulted in third quarter adjusted EBITDA of $54 million, up 1% on a year-over-year basis. Adjusted EBITDA margin was 27% compared to 33% last year. The difference reflects both higher cost of revenue and marketing expenses this quarter. We reported a GAAP net loss of $11 million compared to a net loss of $23 million last year. During the quarter, we also completed a secondary offering of 20.7 million Class A common shares. The follow-on secondary offering was for the sole benefit of our majority shareholder, and Bumble Inc. did not receive any proceeds from the transaction. Our cash and cash equivalents totaled $292 million as of the end of the quarter. Lastly, turning to our Q4 outlook. We are pleased with our Q3 performance. We delivered strong results and meaningful progress on many key initiatives. We feel well positioned for the rest of the year in continuing to grow top line revenue, as well as leaning into the operational leverage in our model to deliver a healthy margin. As a result, we are pleased to raise our full-year 2021 guidance for both revenue and adjusted EBITDA. For Q4, we expect total revenue to be in the range of $208 million to $211 million, representing a growth rate of 27% at the midpoint of the range. We expect adjusted EBITDA to be in the range of $53 million to $55 million, which represents a margin of 26% at the midpoint. For the full year, this translates to revenue guidance in the range of $765 million to $768 million, representing a growth rate of 32% at the midpoint of the range. We expect adjusted EBITDA to be in the range of $205 million to $207 million, which represents a margin of 27% at the midpoint. Thank you for your time. And with that, operator, we are ready to take questions.

[Operator Instructions]. Our first question is from Cory Carpenter with JP Morgan.

My first one's just on – hoping you could elaborate on Bumble app international expansion priorities for the rest of the year and into 2022. What geos you see the most opportunity and, therefore, you're most focused on? And then secondly, totally different topic, but App Store, just hoping to get your thoughts on the recent changes there and the potential impact to Bumble?

It's Tariq. In terms of international expansion, for Bumble, we continue to be very, very pleased with the results we're seeing in Western Europe, as we mentioned, in the prepared remarks. The German speaking regions of Europe are continuing to grow very strongly for us. We're continuing to lean in there. So think there's a lot of upside there. Other parts of Western Europe continuing as well to be very strong, such as France and the Benelux region. So, we're very pleased with that. We think that the value proposition for Bumble is really resonating quite strongly. And as the ecosystem has got larger and more vibrant, we're seeing just really good success both on the on the ARPU front as well as on the user front. If you look at Latin America, as Whitney mentioned, we have really started in the last quarter a big push into Latin America as some of the pandemic conditions have changed, and again, are seeing some really good results in countries like Mexico and Brazil. We're really focusing on the larger markets in Latin America to start with, but are seeing really, really solid triple-digit growth in those markets, very pleased with what we're seeing there. Again, very different cultural context in Western Europe, but continuing to see the Bumble value proposition and missions and ethos really resonate there. And then, I would call out Southeast Asia as the third area that we're continuing to invest in – both South Asia and Southeast Asia. So, India continues to grow very nicely for us. Indonesia, Philippines, and Singapore areas, we've been investing more and more in marketing this quarter, and we're continuing to see some strength in those regions as well. So, really broad-based resonance of the Bumble value proposition pretty much across the board in all those markets that we've talked about. I'll turn it over to Anu for the App Store question.

I'll just talk about both Apple and Google and what we're seeing there. So, obviously, there is a lot that has happened in the last few months around the topic of the App Store fees and we've been following it very closely. Things are changing pretty fast and things are quite fluid. The most recent ruling, of course, in the Epic case, especially as it relates to the anti-steering provision, we believe these are absolutely a step in the right direction as we think about what happens to the experience of developers like us. Especially given yesterday's news around the appeal, we are waiting to see how Apple will enact specific policy and the change, so we can ascertain how we will be linking to third-party payment systems going forward. There are still some outstanding questions to be answered before we can definitively say what this looks like, especially since an iOS user has historically never had the ability to sort of choose non-Apple payments. Having said that, we do have deep expertise today in enabling non-App Store payment systems. So, once we get clarity on that front, we feel actually very good about being able to build the right payment experience for our users. And obviously, of the total amount of money that we pay to app stores today, a huge majority goes to Apple. So we are watching what they will do very closely. And with respect to Android and Google, again, the news that they are dropping the fees from 30% to 15%, we see as very positive in terms of what this could mean, again, for the overall app ecosystem. A majority of revenue today for our company, especially on Bumble, is via subscriptions. And so, this change in fees is especially relevant for us and important. And Google has been a fantastic partner to us on several fronts. And so, we actually are looking forward to working closely with them to figure out how this will play out. And if Google were to mandate Google Pay billing in March, then we will have to figure out the corresponding offsets around that versus the reduction in the fees and the puts and takes around that. So, we still need to work through all of this. It's a little bit early to quantify the benefit. But we are thrilled that the changes are happening because we absolutely believe these are the right steps for Apple and Google to be taking. So, we're tracking this closely and we look forward to providing more information in the future.

Our next question comes from Lauren Schenk with Morgan Stanley.

It's Nathan Feather on for Lauren Schenk. So, Bumble and Badoo ARPPU were both up really nicely in the quarter. For Bumble ARPPU, any way to think about kind of the relative impact of the two tier subscription versus the other product improvements you've been making? And then, how are you thinking about higher ARPPU in terms of the trade-off with pair acquisition?

We are very pleased with the performance of Bumble ARPPU. And two tier has been one of the main contributors to the 16% year-over-year ARPPU growth rate that you saw this quarter. So we're really pleased with that. The adoption of the higher price tier has continued to improve. And the numbers that we've quoted in the past around 70%, upwards of 70%, are still holding true in all markets, as well as for newer cohorts in terms of new people that are opting in. We're also actually very pleased that the adoption rates for women are higher than that of men because this truly is a testament to our women-first brand and also really showcases how we're able to optimize our product for women specifically. So, we're very excited about those numbers. In addition to two tier, as we said before, in the past, we've been doing a lot of work around price elasticity. And we've started to see success, which has contributed to the ARPPU improvements that you see in the third quarter. And our plan is to continue to iterate on that. We have a lot more work that we can do in each of our markets to ensure that we stay competitive in every market that we are in. And lastly, as we think about looking beyond subscriptions, we have seen success in launch of additional consumables. In my prepared remarks, I talk about the launch of extended spotlight. That has already been very successful for us. We expect that that will actually be ARPPU driving – incremental ARPPU driver for us in Q4 as well. So, we have a lot more things in the pipeline as we think about additional consumables to be launched in the coming quarters. So, more to come on that. And just to take a step back, I think from just the philosophy of monetization perspective, and we've sort of consistently said this in the past as well, our goal is always to maximize revenue in any market. And especially this is important as we continue to expand internationally because we know that the country mix can have an impact on the paying potential across various regions. And we also see differences in people's propensity to pay for subscriptions versus consumables between different markets as well. So, as we think about the puts and takes between paying users and ARPPU, we always do that with the goal to maximizing revenue. And you saw that play out in the third quarter. But again, these are decisions that we make on a country by country basis at a very micro level as we enter every market and even at a city level. So, that's an important philosophy we have across both Bumble and Badoo. And you'll hear us talk a lot more about that in the future quarters as well.

Our next question comes from Nick Jones with Citi.

I guess one on maybe Badoo and Bumble. Badoo, I guess, payers weren't as engaged as kind of they were due to COVID pressures and macro pressures. How has engagement panned out or for users? I guess, in other words, kind of how it payers to MAU is looking like? Are people still engaged or just reluctant to pay? Or has overall engagement even for free users decreased? And then the second question, I guess, just to step back, we're hearing more kind of conversation around the metaverse. How was Bumble position to kind of compete as metaverse kind of products and solutions start merging?

Let me try each of those in turn, I guess. On the Badoo, if I just take a step back on Badoo for a second, as we mentioned in the prepared remarks, Badoo, we continue to be very pleased with the underlying business on Badoo. We are seeing that it is a more economically sensitive user. And that has some impact when you look at different countries. Austria went into lockdown, that impacted the Badoo business where it didn't impact the Bumble business, just as one example. So we are in fact seeing some of those COVID headwinds which does drive activity on the app. What we are quite pleased with, however, is that the underlying – for those users who are engaged, they still love the experience. If you look on the App Store, we, generally speaking, have some of the highest NPS scores in the industry on Badoo and I'm measuring that by five star reviews minus one star reviews. But it generally is an experience that people are still liking. If you look at our retention numbers inside of the app, those who are engaged in any given period, tend to be quite active and being engaging in what we think of as good chat and getting connection. So, we're quite happy with the underlying business. There's just a little bit more economic sensitivity in that business, particularly in certain geographies, than there is in the Bumble business where, again, we're not seeing any of that economic sensitivity due to COVID. So, that's sort of how I would frame the Badoo portion. Happy to clarify any of that if it's helpful. On the metaverse piece, we're really taking a Web 3.0 lens on this in particular, meaning we are – I'm sure somebody will build that more virtual experience and we will happily engage and be there when they do that with avatars, et cetera. But what we really think is really interesting in the near term is the application of blockchain and crypto in general to the experience that our communities have. Fundamentally, we are not just an ecosystem, but we're a community of people. And that is true on Bumble and Badoo, but it is particularly true as we think about the kind of reimagined Bumble BFF, as Whitney mentioned. And the opportunities to really engage our members and really think of them as members who are participants in this community, we think, really just super exciting. And so we're continuing to experiment. We've got a couple of tests that we're very excited about that we will be rolling out in the upcoming months around this, but we think that's the first toehold there. This is something that is going to evolve. We want to make sure we're setting the technical and engineering foundation for whatever emerges in the metaverse and in the Web 3.0 world.

Our next question comes from Shweta Khajuria with Evercore ISI.

Let me try two please. Can you please give a little bit more color on BFF, update on product development. You typically give context in terms of 10% of users also use BFF. I wonder if you would use BFF users for pair conversion the other way around if this product scales successfully? And then, the second question is on IDFA. A lot has been talked about. In the past, you've also mentioned 20% of your subscribers come from performance marketing. So, the impact may be limited. But to the extent that you can, could you please talk about how meaningful of an impact it was in the quarter?

Let's take a look at BFF from a high level to begin with and then we can get into the granularities a bit. What's so fascinating about this company, brand and mission is there is a huge unlock from a TAM perspective of people who love our brands, love what we stand for, love the idea of finding connection, relationships and community, but they don't necessarily feel ready for dating or they might already be in a happy romantic relationship. Therefore, as it has existed today, BFF has been an incredible on ramp for people to engage with our brand. And we see this as huge unlock opportunity in the future. So, this is not only a massive opportunity to build the future of platonic relationships, which I'll speak about in a moment, but this is most certainly an on ramp into the dating side of our product as well. So, quick example, you have somebody who is newly single, and they are hesitant about getting back out there or joining a dating app, but they love Bumble, they love our brand, they engage with us at their yoga class, they wear our hats. Now they get on this relaunch version of BFF and they become comfortable with engaging and building relationships and connecting. And now, there is an on ramp opportunity to convert them not only to a dating customer, but to a paying dating customer. And that goes both ways. So as you see healthy churn on the dating side of our product, there is now LTV opportunity to extend that lifetime value of that customer and bring them into the platonic side of the platform. So, this really just blows open the future of our of our LTV, in general, as a brand, as a product, as a company. So, let's actually talk about what is going on at BFF and why we're so excited about this. As I said, with some of the prepared remarks, this is really our chance to extend our mission to achieving healthy and equitable relationships for all and all relationships. So, right now, Bumble is a one-to-one experience. You join the product and you connect with a one on one – you have a one-on-one interaction. The community approach to BFF is a huge opportunity. To be able to join the product and still achieve the one-to-one experience, but then to also have one to many and many to many. So this really just blows open the opportunity for broader community and connection. So, in Q3, we tested multiple changes to the user experience to make it easier to discover and to use the pre-existing BFF product. And for example, we made a navigation flow change that increased crossover usage between those modes. And we plan to test with small groups in Q4 and then really start expanding the test in early 2022. So, this is really the beginning of blowing open this opportunity, to bringing people into our product for more than just love. And we're very excited about the crossover opportunity. As far as the next question, I'm going to Tarik.

On the IDFA question, Shweta, I think just to remind everyone what we have said before and it remains true this quarter, that only about one-fifth, 20-ish-percent of our new user acquisition comes in through performance marketing. The remainder comes in through organic means, word of mouth and some of the results of the brand that we've built over the last many years. As you dig into that performance marketing side, I continue to be very, very proud of the team and their ability to navigate through all of the IDFA and just changes going on in the online advertising world. We have not seen any material degradation across the board around our marketing efficiencies on performance marketing. This is something our team has really managed their way through very, very effectively. What we are seeing is some channel mix. The team is very on top of that. Apple Search Ads are, as a number of other people have said, quite successful. There's been a little bit of a rush to advertise on Android and acquire people on Android. So, that's led to a little bit of price inflation on the Android side. But, overall, we are very happy with our ability to navigate through that and our team is very focused on how do we take those lessons and use it to continue scaling the business.

The next question is from Brad Erickson with RBC Capital Markets.

I think this has already been covered a little bit, but just on this payments disruption, can you just kind of go through what happened there in a bit more detail? And then how much of Badoo paying user shortfall would you say was related to COVID's persistence in some of the international markets versus the payments disruption? And then, I have a follow-up.

Badoo is a long standing brand that has existed for many years. And we've talked about this in the past, we have historically enabled multiple third-party payment providers on our Android platform within Badoo. And so, in anticipation of potential changes that may happen on the Android platform in the future, for part of Q3, we decided to turn off these non-native payment platforms, which did lead to some disruption for our users. And as part of this, we also saw a temporary loss of certain subscription plans, like one-day subscriptions that we offer today that was not available to our users when we turned the third-party payment plans off. So, as a result of this, we saw some decline in paying users. But what we also saw was a corresponding increase in ARPPU as many of these payers moved to higher subscription tier, which is reflected in the 6% ARPPU growth that we saw in Badoo in Q3. So, immediately, part of Q3, we turned the third-party payments back on. And we have a great relationship with all our payment partners, and so we're working very closely with them to ensure that we can minimize any future disruption and that we provide the best user experience from a payment perspective for our customers going forward. It's a little bit hard to fully isolate the impact of this versus the changes that are happening with the larger Badoo business. But we are working hard to ensure that any future disruption is fully mitigated with all the work that we're doing with our payment partners.

Maybe just a follow-up there, given some of those headwinds you just mentioned on paying users in the quarter, give us any sense of what your guidance may be contemplates around those metrics as we look forward? And I guess, more specifically, just any sort of line of sight towards recovering some of those subs you lost?

In terms of how we're thinking about Q4 guidance, actually, I can I can talk about both Bumble and Badoo, if it's helpful. So, on Bumble, we are seeing strong engagement across our product in core markets, as well as in the newer markets that we're launching in. So, we expect that that will continue on a year-over-year basis in terms of growth in paying users potentially accelerating as well. And similar to what we saw in Q3, we expect that a majority of this growth will be driven by international expansion. We are working on a lot of product features that will lead to conversion improvements. So, we feel very bullish about that. And while Q4 usually has some seasonality built in, we are expecting that there will be sequential improvement in pair growth going into Q4. And for Bumble on the ARPPU side, we expect that we will continue to see positive impacts from two tier on a year-over-year basis, as well as some of the other pricing optimization work that I just discussed that we've been doing in many other markets, plus the work that we're doing in consumables. So, we think all of that will be accretive as far as growth in ARPPU is concerned. Moving to Badoo, for all the reasons that we discuss and Tariq mentioned earlier, we do expect that we could see some near-term pressure on paying users. As COVID persists, some of the Web usage gets fixed on our side. But we are seeing strong growth in iOS. So we see that as very positive as we think about the resurgence in paying users. That is factored into our Q4 guidance. And we're also very excited about continuing to launch two tier on Badoo in Q4, which we also expect will be positive from a year-over-year ARPPU growth perspective. So, all of those factors are built into our outlook. We feel very confident about raising our overall outlook. We expect full-year revenue growth based on these numbers to be 32% at the midpoint, so we are excited about that.

Our next question comes from Brent Thill with Jefferies.

It's James on for Brent. It would be great if we could get an understanding of how bumbled payer growth has been trending in international markets. Any that you call out as being particularly strong? And can you also comment on the returns that you're seeing from brand marketing campaigns that you've been running in some of your international markets? That's my first question. And my second one, Whitney, I was hoping you could talk about just the importance of video chat as part of the Bumble product experience. Are you continuing to see high levels of engagement on video post the pandemic lockdowns? And are there other ways you think you can leverage video across the rest of the Bumble experience?

Here's probably the most fascinating discovery around videos thus far that has emerged during the pandemic, is people are leveraging this to screen potential matches before meeting for a date even in reopened markets. So, we are hearing increasingly that people love the idea of being able to do a quick video call and to essentially make sure the person they're talking to on the other side is exactly who they say they are and that it's somebody they feel comfortable meeting. So, we fundamentally believe video is here to stay, and that it's here to stay in a different construct than maybe what it was there for as the pandemic emerged because it was the only option for dating, right? People could not go meet around the corner, they could not go out to dinner, they could not go meet for a walk in the park. This is now going to be leveraged to save yourself time, to save yourself potential risk, and to make sure that there's chemistry on the other side of the screen. And so, this is just absolutely imperative to the future, most importantly, of our brand and our mission, right? Everything we do is with safety at the core. Everything we do is with our mission at the core. And video is such a catalyst to achieving that. And so, we're very, very excited about the future of video chat, and not only video one to one. When you think about video more broadly, right, as it pertains to the current experience and even as it's interwoven into Web 3.0, this is such an incredible mechanism to socialize, to have the opportunity to get to know people through interest or through common topics, shared joy, struggles, you'll see this emerge in the future for platonic relationships as well as romantic ones. Video is a great way to get to know each other. And we are in the business of bringing people together and helping people find the people they're seeking and looking for. And we fundamentally have seen, through our data and through the strong engagement, that video is a great mechanism for this. So, with that, James, thanks for the question. I'm going to kick it to Tariq to talk about payer growth in international markets.

There's, I guess, two parts to your question. Let me try and take them in turn. On the payer side, we are continuing to see both monthly active user and registration growth in the international markets I mentioned before in Western Europe and Latin America and in Southeast Asia and South Asia. But we're also seeing very rapid payer growth in those markets as well. If you look at the German speaking regions that I mentioned earlier, we're seeing triple-digit payer growth in addition to very fast MAU growth in those regions. We're seeing very high payer growth in Southeast Asia and in Latin America as well. So we're very happy with that. I would just to emphasize, in answering that question, that we are focusing on maximizing revenue as opposed to maximizing payer. So, if we look at Southeast Asia as an example, we are probably focusing more on normalizing our price point, our ARPPU to the local market levels which has led to an acceleration in payer growth there, whereas in Germany, as an example, we're continuing to see very robust payer growth at the price points we're at as we launch two-tier pricing, et cetera. So, it is a bit of a mosaic, but we're very happy with payer growth and, again, the validation of the value proposition on Bumble. In terms of the brand marketing campaigns, the way that we go into any of these international markets is really trying to build the brand and the ecosystem that we've got. This is a product on the Bumble side that is really about the mission and the quality of the ecosystem and the safe experience and the just positive experience you have on the app. So, all of our brand marketing campaigns are localized for the countries that we are in. That's not just a translation issue, but it's really thinking about what is the right way to explain the value proposition and what is the right thing to emphasize in Germany and how might that differ in Mexico or how might that differ in Singapore? If you Google it on YouTube, I think you'll see our Singaporean jingle that was created about making the first move, which is very localized with a local band in Singapore. And the response has been great. We're very happy with both the influencers, but also the sort of broader market response we're seeing.

Our next question comes from John Blackledge with Cowen.

Some of this has been touched on, but just some further clarification. On the Bumble app, 3Q paying user growth, what were the key markets that drove the user growth and perhaps were there any markets where that was more of a kind of a drag on user growth? And then, just to clarify, Anu, I think just mentioned that Bumble app paying user growth could accelerate in 4Q on the heels of international expansion. Just want to check to see if I did hear that. And are there kind of any other international markets that you recently turned on or you're turning on in 4Q? And then just lastly, any kind of early thoughts on 2022, any way to frame 2022?

Maybe I'll start and I'll turn to Anu for 2022. In terms of the payer growth, our more mature markets grow payers at a slightly lower rate than our less mature markets. But in general, I would not say there's any market that has been a drag on payer growth. We're seeing what we consider to be very robust, both payer growth and payer penetration growth across pretty much all of our markets. It's at the triple-digit percentage increase year-over-year rate in our newer markets, as you'd expect, but generally speaking, it's an across-the-board phenomenon. And it'd be hard to pinpoint one region, certainly not one country, and it'd be hard to pinpoint one region that is contributing disproportionately to that. So, from a payer growth standpoint, I think that we're quite pleased with the breath. In terms of the newer markets, it really gets back to what I said earlier. We've talked about German regions. It's been a newer push for us in France and the Netherlands and Belgium, et cetera, the sort of Benelux region more broadly. We're seeing very rapid growth there. And we're happy to see that the kind of localization efforts that we are putting in place and the kind of local market expertise we're bringing in those markets is continuing to pay off. So, we're continuing to have high investment levels. There, we're continuing to push in Latin America. As I mentioned, Mexico and Brazil are two bright spots. But if you were to look at other countries like – there, the larger markets, Colombia, Argentina, et cetera, there's a lot of traction that we're quite pleased with there. And then in Asia, we're being very focused. These are very large markets with – it's easy to say Asia, but every single country is radically different. And so, we're really focused on Southeast Asia, and particularly Indonesia, Singapore, Malaysia, South Asia with India, and have a small business where we're planting the seeds in North Asia, but we've been very happy with the results we've seen this quarter in the last couple of quarters in markets like Japan, as an example. Still very early days for us there. I'll turn it to Anu for guidance.

On this question about Q4, you're right. We are, from a Bumble paying user perspective, expecting that the year-over-year growth in paying users will accelerate in Q4 versus Q3. Again, for a lot of reasons that Tariq talked about, we're feeling very positive about the growth that we're seeing across the international markets. And a lot of the work that we're doing from the product perspective is also really resonating with our users and contributing to the growth in paying users. So, we feel very, very excited about that. In terms of 2022 outlook, as you can imagine, we are deep in planning for 2022. So, we look forward to providing sort of more detailed numbers in our next call. But our priorities, as we've outlined at the IPO that we've had in 2021, all still remain. Our goal is to be bigger and better in all the markets that we are in, continue to focus on the launch of BFF and continue to do all the amazing work that our teams have been doing around improving payer penetration as well as improving monetization. So, lots happening on our end and we are really excited about what 2022 looks like, especially as we think about the momentum going into Q4 and into Q1 of next year. So, we are excited about that and we look forward to giving you more information in our next quarter.

And we have time for one last question. Question from Steve Koenig from SMBC Nikko.

And I'll have one quick follow up. The BFF relaunch and the impact that it could have on your metrics, is that more of a discrete event or more of a process? And just maybe remind me of the timeframes there. And then, I've got one follow-up if you don't mind.

I would say it's probably, as you're characterizing, more of a process than a discrete timeframe. We are a big believer in sort of test, learn, expand. So we will be, a little later on in Q4, launching some pretty limited market tests on the new – on parts of the new experience. I think those will accelerate into Q1 and early Q2 of next year. And as we get the learnings that we want to see around product market fit, you'll see us expand it, but we are a bigger believer in kind of rolling expansions than the sort of Big Bang type of events. So, that's what you'll see from us there.

I'm going to kind of ask maybe a dumb question. Maybe I'm not being imaginative enough here. But any color you can give me on this application of blockchain and crypto on your community experience? I'm having a hard time imagining how it's relevant, but I'm sure you've got some interesting things up your sleeves.

We think we have some interesting things up our sleeve. And I would not characterize it as a dumb question at all. It's something we're actively working through right now. I think as you think about communities, as an example, one thing that we have heard a lot from our users, and particularly as we talk to more of the engineering community, both inside and outside of the company, is the notion of having communities – as I try to think of how to say this the right way – that have some level of ownership and participation coming from the people who help make those communities successful, right? And it's hard until we announce some of what BFF is going to look like to sort of truly describe it. But if you'll imagine a world in which we're helping people find each other through communities of shared interest, shared joys and shared struggles, as Whitney mentioned before, the way of thinking about that as a membership organization, right, or as a membership construct that you are not just an eyeball for us to monetize, but you are somebody who's helping to create that ecosystem and get value out of that ecosystem. We think that's a really important seismic shift actually in the industry. And we are really thinking through how do we not just tap into that, but enable that. If you come back to our mission around healthy and equitable relationships and women's empowerment in areas like that, we think it is really an important empowerment driver for people really around the world. And so, I don't know if that makes it any more clear for you. But we've got a bunch of experiments going on. We've got a bunch of discussions going on about what this could look like. But generally, that's the concept of the sort of decentralization, the more ownership based economy as it relates to communities and ecosystems.

That's very articulate, and I'm sure I'll understand it better as you move along.

I think as soon as BFF really starts to take shape, I think everybody will have a clearer understanding of how some of these ideas come to life, but we don't really expect it to be crystal clear right now.

I did my best.

Thank you. Ladies and gentlemen, this concludes our Q&A and program for today. We thank you for your participation. Please, have a great evening.