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Bumble shares drop as AI revamp fails to reverse paying user decline

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Bumble’s stock tumbled 17% on Thursday after the dating app operator posted another quarterly drop in paying users, raising doubts about its AI-driven turnaround plan and long-term growth outlook.

The company revealed that total paying users fell 8.7% year-on-year to 3.8 million in Q2, despite efforts to enhance match quality and connect users with similar engagement levels and intentions.

In contrast, rival Hinge — owned by Match Group — has been outperforming thanks to its broader international presence and more competitive AI tools, which provide personalized matches and boost engagement. Analysts note that Hinge’s emphasis on authentic profiles and creative prompts has helped sustain stronger user retention rates.

Bumble is still in the early stages of its strategy to improve user experience, introducing AI-powered features to bolster trust and safety. However, analysts warn that the tighter verification measures could slow user and payer growth in the short term.

Citi analysts noted that visibility into future user and payer trends remains low, and that increased marketing and R&D spending could put pressure on margins into 2026.

Shares of the Austin-based company are down over 6% this year, currently trading at 7.96 times projected earnings for the next 12 months, compared with Match Group’s 14.64.

Bumble’s Paying User Decline Raises Concerns Amid AI-Driven Revamp

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Bumble, the dating app operator, reported a decline in paying users during the second quarter, casting doubts on the speed of its AI-fueled turnaround efforts and causing its shares to drop 8% in after-hours trading. The company’s paying user base fell 8.7% to 3.8 million, highlighting ongoing challenges in re-engaging its core audience.

Despite deploying artificial intelligence tools to fight industry-wide “dating fatigue,” analysts note that Bumble lags behind larger rival Match Group, whose AI initiatives are more advanced. Bumble’s recent AI-powered coaching hub aims to enhance user experience by blending human expertise with machine learning, but much of its innovation remains in early testing stages.

Financially, Bumble posted a net loss of $367 million in Q2, including $404.9 million in non-cash impairment charges, a significant turnaround from a net profit of $37.7 million a year earlier. The company did not elaborate on the one-time costs.

To attract younger users, Bumble plans to launch a new Bumble BFF app this month aimed at Gen Z, alongside community-driven offline events designed to foster friendships beyond dating.

Revenue for the quarter came in at $248.2 million, slightly above analysts’ expectations of $245.1 million. For the third quarter, Bumble forecasts revenue between $240 million and $248 million, exceeding the average estimate of $241.4 million.

The company also announced a leadership change, appointing Kevin Cook—formerly CFO at Cloudera—as its new CFO, effective August 12, replacing interim CFO Ronald Fior.

Match Group Beats Q2 Revenue Estimates, Pushes AI to Attract Gen Z Users

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Match Group (MTCH.O), the parent company of Tinder, reported second-quarter revenue of $864 million, surpassing Wall Street estimates of $853.6 million, driven by strong performance from Hinge and a renewed AI-focused strategy under CEO Spencer Rascoff. Shares rose about 10% in extended trading on Tuesday.

The company attributed the revenue beat to an ongoing overhaul emphasizing user experience improvements, including the integration of an AI-powered core discovery algorithm designed to attract and retain users. M Science analyst Chandler Willison noted early benefits from Match Group’s AI initiatives, highlighting enhancements in recommendations and user interactions.

Despite revenue growth, paying users declined 5% to 14.1 million, reflecting sector-wide challenges in online dating. Peers like Bumble (BMBL.O) have also seen sluggish demand due to inflation and perceived innovation gaps, leading some consumers to pull back from app-based dating.

In response, Match and Bumble are prioritizing user experience by introducing AI-enabled discovery features to improve dating outcomes. Match Group aims to revamp Tinder’s brand as a “low-pressure, serendipitous experience” tailored for Gen Z.

Beyond Tinder, Match also owns Hinge and OkCupid, rolling out AI-driven interactive matching products targeting younger audiences. The company plans to reinvest around $50 million in H2 2025 for strategic initiatives, including product testing on Tinder and geographic expansion of Hinge, Azar, and The League.

For Q3, Match projects revenue between $910 million and $920 million, above estimates of $890.3 million.