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What changed in Bumble Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Bumble Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+528 added−629 removedSource: 10-K (2024-02-28) vs 10-K (2023-02-28)

Top changes in Bumble Inc.'s 2023 10-K

528 paragraphs added · 629 removed · 377 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

66 edited+15 added−34 removed19 unchanged
Biggest changeSome of these additional in-app purchases include: • SuperSwipe : Users can use SuperSwipe to inform potential matches that they are confidently interested in them, whereas typically a yes vote is anonymous until both matches vote yes. • Spotlight : Users can use Spotlight to advance their profile to the top of the list of potential matches so it is viewable by more potential matches instantly. • Compliments : In most of our markets, users can purchase more Compliments to send a kind reaction to another user’s bio, photo, or profile prompt, which allows the sender to stand out and be intentional about starting a conversation in a positive way.
Biggest changeThere are also additional, in-app purchases that subscribers and non-subscribing users can purchase, such as SuperSwipe (to inform potential matches that the user is confidently interested in them) and Spotlight (to advance the user's profile to the top of the list of potential matches so it is viewable by more potential matches instantly).
In addition, the insights we have gained from our community have encouraged us to extend Bumble app into many more areas of life, such as platonic friendships and business networking, and we have built our platform with the flexibility to pursue these opportunities. Our Technology Has Transformed Online Dating Technology is at the core of what differentiates our platform.
In addition, the insights we have gained from our community have encouraged us to extend Bumble app into many more areas of life, such as platonic friendships and business networking, and we have built our platform with the flexibility to pursue these opportunities. 7 Our Technology Has Transformed Online Dating Technology is at the core of what differentiates our platform.
Users can opt to use one of our filters to be more specific in the types of matches they see. A user can swipe right to vote “yes” to a potential match, or left to go to the next profile, or, in most of our markets, leave a compliment on a specific photo or profile prompt on someone’s profile.
Users can opt to use one of our filters to be more specific in the types of matches they see. A user can swipe right to vote “yes” to a potential match, or left to go to the next profile, or, in most of our markets, leave a compliment on a bio, specific photo or profile prompt on someone’s profile.
Licensing and Regulation We are subject to a variety of laws and regulations in the United States and around the world that involve matters central to our business. Many of these laws and regulations are still evolving and being tested in courts, and could be interpreted in ways that could harm our business.
Licensing and Regulation We are subject to a variety of laws and regulations in the United States and around the world that involve matters central to our business. Many of these laws and regulations are still evolving and being tested in courts, and could be interpreted in ways that could 11 harm our business.
We expect to pursue additional trademark registrations to the extent we believe they would be beneficial and cost-effective. 12 In addition to trademark protection, we own numerous domain names, including www.bumble.com, and patents and designs for various product features.
We expect to pursue additional trademark registrations to the extent we believe they would be beneficial and cost-effective. In addition to trademark protection, we own numerous domain names, including www.bumble.com, and patents and designs for various product features.
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.
The information we post through 12 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.
Badoo app’s focus is to make finding meaningful connections easy, fun and accessible for a mainstream global audience. Badoo app continues to be a market leader in Europe and Latin America. We had approximately 1.2 million Badoo App and Other Paying Users during the year ended December 31, 2022.
Badoo app’s focus is to make finding meaningful connections easy, fun and accessible for a mainstream global audience. Badoo app continues to be a market leader in Europe and Latin America. We had approximately 1.2 million Badoo App and Other Paying Users during the year ended December 31, 2023.
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 Annual Report. 14
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 Annual Report. 13
In addition to the GDPR, there are a number of legislative proposals in the EU as well as other jurisdictions that could impose new obligations or limitations in areas affecting our business. There are other privacy and data protection laws and regulations that impact the products and services we offer to users in different countries.
In addition to these laws, there are a number of legislative proposals in the EU as well as other jurisdictions that could impose new obligations or limitations in areas affecting our business. There are other privacy and data protection laws and regulations that impact the products and services we offer to users in different countries.
We own a number of trademarks that have been registered, or for which registration applications are pending, in the U.S. as well as in certain foreign jurisdictions. These trademarks include, among others, BUMBLE, BADOO and FRUITZ.
We own a number of trademarks that have been registered, or for which registration applications are pending, in the U.S. as well as in certain foreign jurisdictions. These trademarks include, among others, BUMBLE, BUMBLE FOR FRIENDS, BADOO, FRUITZ and OFFICIAL.
Fruitz App Fruitz app requires all users to select a profile fruit to symbolize their dating intention: cherries for those seeking a serious relationship, grapes for those looking to date, watermelons for those who are not seeking anything serious, and peaches for those looking for a casual relationship.
Fruitz App Fruitz app requires all users to select a profile fruit to indicate their dating intention: cherries for those seeking a serious relationship, grapes for those looking to date, watermelons for those who are not seeking anything serious, and peaches for those looking for a casual relationship.
For information regarding risks related to our intellectual property, please see “Item 1A—Risk Factors—Risks Related to Information Technology Systems and Intellectual Property.” Seasonality We experience seasonality in user growth, user engagement, Paying User growth, and monetization on our platform.
For information regarding risks related to our intellectual property, please see “Item 1A—Risk Factors—Risks Related to Intellectual Property.” Seasonality We experience seasonality in user growth, user engagement, Paying User growth, and monetization on our platform.
We compete with a number of companies that provide dating products and services for the same markets in which we operate, including other online dating platforms and social media platforms that offer dating features.
We compete with a number of companies that provide dating products and services for the same markets in which we operate, including other online dating platforms and social media platforms.
In addition to prioritizing verification of users and offering communication like voice and video chat tools to allow interactions before or in lieu of in-person meeting without exchanging sensitive personal information, we have also engineered other safety features such as our proactive safety monitoring.
In addition to prioritizing verification of user photos and offering communication like voice and video chat tools to allow interactions before or in lieu of in-person meeting without exchanging sensitive personal information, we have also engineered other safety features such as our proactive safety monitoring.
Benefits, Safety & Wellbeing The success of our business is fundamentally connected to the wellbeing of our people. We continue to invest in benefits that help our employees, support our mission, and align with market practice across five key health pillars: physical, mental, financial, family, and social.
Benefits, Safety & Wellbeing The success of our business is fundamentally connected to the wellbeing of our people. We continue to invest in benefits that help our employees and their families, support the Bumble mission, and align with market practice across five key health pillars: physical, mental, financial, family, and social.
At the center of this initiative is Diversibees, an intersectional, employee-led organization consisting of more than 300 employees. Single-identity affinity groups come together under the Diversibees umbrella. 11 Our ERGs sponsor many initiatives throughout the year, which build community and advocacy through workshops, newsletters, listening circles, leadership development and other training programs, and cultural celebrations.
At the center of this initiative is Diversibees, an intersectional, employee-led organization consisting of approximately 300 employees. Single-identity affinity groups come together under the Diversibees umbrella. Our ERGs sponsor many initiatives throughout the year, which build community and advocacy through workshops, newsletters, listening circles, leadership development and other training programs, and cultural celebrations.
Intellectual Property We believe that our rights in our intellectual property, including patents, designs, copyrights, trademarks and domain names, as well as contractual provisions and restrictions on access to our proprietary technology, are important to our marketing efforts to develop brand recognition and differentiate our brand from our competitors.
Intellectual Property We believe that our rights in our intellectual property, including but not limited to patents, designs, copyrights, trademarks and domain names, as well as contractual provisions and restrictions on access to our proprietary technology, are important to our marketing efforts to develop brand recognition and differentiate our brand from our competitors.
Bumble app is a leader in the online dating sector across several countries, including the United States, United Kingdom, Australia and Canada. We had approximately 2.0 million Bumble App Paying Users during the year ended December 31, 2022. • Badoo app, launched in 2006, was one of the pioneers of web and mobile free-to-use dating products.
Bumble app is a leader in the online dating sector across several countries, including the United States, the United Kingdom, Australia and Canada. We had approximately 2.5 million Bumble App Paying Users during the year ended December 31, 2023. Badoo app, launched in 2006, was one of the pioneers of web and mobile free-to-use dating products.
Bumble’s mission is to create a world where all relationships are healthy and equitable, through Kind Connections. Our platform enables people to connect and build healthy and equitable relationships on their own terms. We focus on building authenticity and safety in the online space, which is marked at times by isolation and toxicity.
Item 1. Business Who We Are Bumble’s mission is to create a world where all relationships are healthy and equitable, through Kind Connections. Our platform enables people to connect and build healthy and equitable relationships on their own terms. We focus on building authenticity and safety in the online space, which is marked at times by isolation and toxicity.
The contents of these websites are not intended to be incorporated by reference into this report or in any other report or document we file. 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 contents of these websites are not intended to be incorporated by reference into this report or in any other report or document we file. Website and Social Media Disclosure We use our websites (www.bumble.com and ir.bumble.com) and at times our corporate X account (formerly known as Twitter) (@bumble) and LinkedIn (www.linkedin.com/company/bumble) to distribute company information.
Bumble BFF and Bumble Bizz In addition to dating, we also provide products that enable social connection, offering users the opportunity to develop platonic connections through Bumble BFF for friendships and through Bumble Bizz for professional networking and mentorship.
Bumble BFF and Bumble Bizz Modes In addition to dating, in Bumble app we also provide products that enable social connection, offering users the opportunity to develop platonic connections through the BFF mode for friendships and through the Bizz mode for professional networking and mentorship.
Other company initiatives include: continuing to expand the role of our Diversity, Equity, Inclusion and Belonging Center of Excellence, setting workforce representation goals, providing diversity and inclusion training to all employees, and continuing our investment in the Bumble Tech Academy graduates, which encourages and supports the transition of talent from underrepresented groups and communities to the tech sector.
Other company initiatives include: continuing to expand the role of our Diversity, Equity, Inclusion and Belonging Center of Excellence, providing diversity and inclusion training to all employees, and continuing our investment in the Bumble Tech Academy graduates, which encourages and supports the transition of talent from underrepresented groups and communities to the tech sector.
Our mission-first strategy ensures that values guide our business decisions and our business performance enables us to drive impact. Our strategy is anchored by our powerful brand, product leadership, operational excellence and impact initiatives.
Our mission-first strategy ensures that values guide our business decisions and our business performance enables us to drive impact. Our strategy is anchored by our powerful brand, product leadership, operational excellence, and public policy and social impact initiatives.
Proposed, new and evolving legislation and regulations could also significantly affect our business. For example, the implications of the European Union (“EU”) and United Kingdom’s General Data Protection Regulation (collectively referred to as “GDPR”), which applies to our products and services, are far-reaching and constantly evolving.
Proposed, new and evolving legislation and regulations could also significantly affect our business. For example, the implications of the European Union (“EU”) and United Kingdom’s General Data Protection Regulation, which applies to our products and services, are far-reaching and constantly evolving.
When both users vote yes, a connection is made. After an initial match is formed, users on Bumble app must initiate a chat within 24 hours or the connection disappears. As our motto implies, women make the first move by initiating a chat in a heterosexual connection.
When both users vote yes, a connection is made. After an initial match is formed, users on Bumble app must initiate a chat within 24 hours or the connection disappears. In a heterosexual connection, women make the first move by initiating a chat.
We have also engineered other safety features such as Rude Message Detector, which uses machine learning to detect any text that could be perceived as rude, abusive, homophobic or discriminatory and gives the user the control to dismiss the message if they are not comfortable with the language used.
On Badoo app, we have engineered safety features such as Rude Message Detector, which uses machine learning to detect any text that could be perceived as rude, abusive, homophobic or discriminatory and gives the user the control to dismiss the message if they are not comfortable with the language used.
These laws may relate to privacy, data protection and personal information, online safety, rights of publicity, content, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, electronic contracts and other communications, competition, protection of minors, consumer protection, telecommunications, taxation, economic or other trade prohibitions or sanctions, anti-corruption law compliance, securities law compliance, online payment services, and labor and employment.
These laws may relate to privacy and data protection, online safety, rights of publicity, content, intellectual property, advertising, marketing, distribution, data security, electronic contracts and other communications, artificial intelligence, competition, protection of minors, consumer protection, telecommunications, taxation, economic or other trade prohibitions or sanctions, anti-corruption law compliance, securities law compliance, online payment services, and labor and employment.
We were the first company in the dating app industry to develop technology to proactively blur lewd photos shared within a chat, which Bumble recently open-sourced for the technology community as part of a larger effort to help rid the internet of "cyberflashing," the sharing of unsolicited lewd photos online.
We were the first company in the dating app industry to develop technology to proactively blur lewd photos shared within a chat, which we open-sourced in 2022 for the technology community as part of a larger effort to help rid the internet of “cyberflashing,” the sharing of unsolicited lewd photos online.
How We Grow Our Community We are investing in growing our community by building our apps as distinct brands with complementary but unique user value propositions. For Bumble app, we educate audiences on how women making the first move creates healthier relationships across love, 10 friendship, and business.
How We Grow Our Community We are investing in growing our community by building our apps as distinct brands with complementary but unique user value propositions. For Bumble app, we educate audiences on how women making the first move creates healthier relationships.
This allows us to quickly test new features, provides us with flexibility to migrate features from one app to another where appropriate, and improves execution at scale by driving faster improvements in our apps, while simultaneously driving operating efficiencies by reducing the cost of launching new features.
Our technology platform is fueled by: • Shared infrastructure : Our shared infrastructure allows us to quickly test new features, provides us with flexibility to migrate features from one app to another where appropriate, and improves execution at scale by driving faster improvements in our apps, while simultaneously driving operating efficiencies by reducing the cost of launching new features.
Bumble app, Badoo app and Fruitz app 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.
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.
See the discussion contained in the “Risk Factors” section of this Annual Report for information regarding how actions by regulatory 13 authorities or changes in legislation and regulation in the jurisdictions in which we operate may have a material adverse effect on our business.
See the discussion contained in the “Risk Factors” section of this Annual Report for information regarding how actions by regulatory authorities or changes in legislation and regulation in the jurisdictions in which we operate may have a material adverse effect on our business. Additional Information Bumble Inc. was incorporated in Delaware on October 5, 2020.
We have machine and deep learning capabilities that we leverage to personalize the potential matches we display, inform our product pipeline and otherwise tailor the experience for specific users.
We have introduced artificial intelligence capabilities that we leverage to personalize the potential matches we display, inform our product pipeline and otherwise tailor the experience for specific users.
In 2022, we operated three apps, Bumble app, Badoo app and Fruitz app, where during 2022, on average, over 40 million users came on a monthly basis to discover new people and connect with each other in a safe, secure and empowering environment.
In 2023, we operated five apps, Bumble app, Bumble For Friends app, Badoo app, Fruitz app and Official app, where during 2023, on average, over 42 million users came on a monthly basis to discover new people and connect with each other in a safe, secure and empowering environment.
We offer a competitive benefits package, which includes access to private healthcare coverage for employees and their families, paid six-month leave for parents regardless of gender, path to parenthood support, unlimited paid time off, and paid leave for survivors of domestic violence or violent crimes. We also invest in initiatives for financial and retirement planning.
We offer a competitive benefits package, which includes access to private healthcare coverage for employees and their families, paid six-month leave for parents regardless of gender, path to parenthood support, unlimited paid time off, and paid leave for survivors of domestic violence or violent crimes. All employees have access to a wellbeing portal.
Examples of how our mission drives our business include: • We enhance our brand through impact initiatives beyond our apps, including advocating for legislative solutions to prohibit nonconsensual intimate image abuse and other online harms, including unsolicited lewd photos. • We engage in worldwide nonprofit partnerships to support healthy, safe, and equitable relationships, and to elevate women and other underrepresented communities. • We enhance our brand through marketing campaigns centered around elevating women, including the “Be the CEO Your Parents Wanted You to Marry” and “Believe Women” campaigns.
Examples of how our mission drives our business include: • We enhance our brand through initiatives beyond our apps, including advocating for policy and legislative solutions to prohibit nonconsensual intimate image abuse and other online harms, including unsolicited lewd photos. • We engage in worldwide nonprofit partnerships to support healthy, safe, and equitable relationships, and to further our commitment to equity by supporting women and other underrepresented communities. • We enhance our brand through marketing campaigns centered around elevating women, including the “Believe Women” and “Love Letters to Black Women” campaigns.
Badoo app is about helping people overcome the self-doubt they might feel, to open themselves up to others, embrace the journey of meeting people to figure out what they want. Fruitz app is about encouraging honesty and transparency through the disclosure of dating intentions at the outset.
Badoo app is about helping people overcome the self-doubt they might feel, to open themselves up to others, embrace the journey of meeting people to figure out what they want. Fruitz app is centered around encouraging honesty and transparency by sharing dating intentions from the first touch point.
Generally, our highest performing months for user growth and user engagement are during the first and third quarters of the fiscal year, and our highest performing months for Total Paying Users are in the third and fourth quarters of the fiscal year.
Generally, our highest performing months for user growth and user engagement are during the first and third quarters of the fiscal year, and our highest performing months for Total Paying Users are in the third and fourth quarters of the fiscal year. Seasonal trends are difficult to predict accurately and may change from year to year.
These subscription plans also offer flexible packages, similar to on Bumble app. Badoo app also offers Badoo Credits, which can be purchased in bundles and used to acquire in-app features such as one-off popularity boosts.
Badoo app also offers Badoo Credits, which can be purchased in bundles and used to acquire in-app features such as one-off popularity boosts.
The safety of our employees remains among our top priorities. We regularly engage a mental health liaison to work with our internal safety team, host benefit sessions on topics of safety, and offer mental healthcare resources to employees. Competition The online dating industry is fast growing and highly competitive.
We regularly engage a mental health liaison to work with our internal safety team, host benefit sessions on topics of safety, and offer targeted mental healthcare resources to our internal safety team employees, providing an additional layer of care for their wellbeing. Competition The online dating industry is growing and highly competitive.
Human Capital Our company culture and people practices are critical to achieving our mission of creating a world where all relationships are healthy and equitable, and our values are rooted in growth, kindness, equity, accountability and honesty. Diversity & Inclusion The diversity of our management team and workforce is key to our success and reflects our mission and values.
Human Capital Our company culture and people practices are critical to achieving our mission of creating a world where all relationships are healthy and equitable, through Kind Connections, and our values are rooted in growth, kindness, equity, accountability and honesty.
To build an organization where employees feel engaged, valued and heard, we gather and respond to employees’ feedback in a variety of ways, including through periodic employee engagement surveys, new joiner surveys, one-on-one interactions, and regular "All Hands" meetings that bring the entire company together.
In 2023, we continued to refine our performance evaluation processes and carried out a company-wide manager development program. 10 To build an organization where employees feel engaged, valued and heard, we gather and respond to employees’ feedback in a variety of ways, including through periodic employee engagement surveys, new joiner surveys, one-on-one interactions, and regular “All Hands” meetings that bring the entire company together.
Badoo Premium allows additional features such as: • Liked You : Allows users to find out who has already liked them. • Invisible Mode : Allows users to browse the app without being shown to other users. • Undo Vote : Undoes a “no” vote on a potential match.
Our subscription offerings on Badoo app, Badoo Premium and Badoo Premium Plus, allow additional features such as: Liked You, which allows users to find out who has already liked them; and Invisible Mode, which allows users to browse the app without being shown to other users.
Our Impact Since the founding of Bumble app, we have established, engaged in, and supported a wide range of social impact efforts to further our mission, primarily focused on women’s empowerment, healthy relationship education, and the reduction in toxicity on our platform and society at large.
These centralized functions enable us to share marketing learnings across our apps and geographies, allowing for the broadest application of successful strategies. 9 Our Impact Since the founding of Bumble app, we have established, engaged in, and supported a wide range of public policy and social impact efforts to further our mission, primarily focused on women’s empowerment, healthy relationship education, and the reduction in toxicity on our platform and society at large.
We are a leader in the online dating space, which has become increasingly popular over the last decade and has been cited as the most common way for new couples to meet in the United States.
We are a leader in the online dating space, which has become increasingly popular over the last decade and has been cited as the most common way for new couples to meet in the United States. Bumble app, launched in 2014, is one of the first dating apps built with women at the center, where women make the first move.
Our platform is designed to be safe and empowering for women, and, in turn, provides a better environment for everyone. We are leveraging innovative technology solutions to create a more inclusive, safe and accountable way to connect online for all users regardless of gender.
We are leveraging innovative technology solutions to create a more inclusive, safe and accountable way to connect online for all users regardless of gender.
Foreign data protection, privacy, content, competition, and other laws and regulations can impose different obligations or be more restrictive than those in the United States. U.S. federal and state and foreign laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change.
U.S. federal and state and foreign laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change.
This simple feature normalizes the notion of users disclosing their dating intentions from the first touchpoint with any user, encouraging honesty and transparency. On Fruitz app, the safety and security of our users is paramount. Fruitz leverages shared infrastructure from the Bumble and Badoo apps for photo moderation. Fruitz app's premium subscription offerings are Fruitz Premium and Fruitz Golden.
This simple feature normalizes the notion of users sharing their dating intentions from the first touchpoint with any user, encouraging honesty and transparency. Fruitz app's premium subscription offerings are Fruitz Premium and Fruitz Golden.
Our website address is www.bumble.com and our investor relations website is located at https://ir.bumble.com. The information posted on our website is not incorporated into this Annual Report.
Our principal executive offices are located at 1105 West 41st Street, Austin, Texas 78756, and our telephone number is (512) 696-1409. Our website address is www.bumble.com and our investor relations website is located at https://ir.bumble.com. The information posted on our website is not incorporated into this Annual Report.
Premium features include: Filter by Fruit, which enables users to filter other users by their dating intention, represented by their fruit, and Who Liked Me, which allows users to see who has already liked them.
Premium features include: Filter by Fruit, which enables users to filter other users by their dating intention, represented by their fruit, and Who Liked Me, which allows users to see who has already liked them, among others. Official App On Official app, users connect their profile with that of their partner, enabling a shared, linked product experience.
The more we know about our community’s interests, the better we can innovate products that maximize their chances of making connections most likely to turn into the relationships they are seeking.
The more we know about our community’s interests, the better we can innovate products that maximize their chances of making connections most likely to turn into the relationships they are seeking. Our apps share some common infrastructure, which allows insights to be shared between apps and is critical to providing our users with personalized and superior experiences.
New privacy laws or regulations are likely to grant enhanced privacy rights to individuals and impose obligations on us as a business operating in those jurisdictions. In addition, some countries are considering or have passed legislation requiring local storage and processing of data or similar requirements that could increase the cost and complexity of delivering our services.
In addition, some countries are considering or have passed legislation requiring local storage and processing of data or similar requirements that could increase the cost and complexity of delivering our services.
For information regarding risks related to these compliance requirements, please see “Item 1A—Risk Factors—Risks Related to Regulation and Litigation—We must comply with rapidly-evolving privacy and data protection laws across jurisdictions, and the failure to do so could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.” The foregoing description does not include an exhaustive list of the laws and regulations governing or impacting our business.
For information regarding risks related to these compliance requirements, please see “Item 1A—Risk Factors—Risks Related to Regulation and Litigation—We must comply with rapidly evolving privacy and data protection laws across jurisdictions, and the failure to do so could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.” In addition to privacy laws, there are emerging online safety laws globally such as the EU Digital Services Act, the UK Online Safety Act and U.S. laws targeting companies that operate online dating services that have already come into effect or are coming into effect in 2024, which include significant penalties for non-compliance.
We also allow profile videos on Badoo app. In addition, users can use the "Moods" feature to share what's on their minds. This can either be based around their current emotions or what kind of date they want to pursue.
Badoo App On Badoo app, users’ profiles can be customized in many ways, such as by using the “Moods” feature to share what's on their minds, either based around their current emotions or what kind of date they want to pursue.
As of the date of this Annual Report, 73% of our Board and more than 50% of our management team are women. As of December 31, 2022, we had over 950 full-time employees, of which approximately 770 are located outside of the United States.
We seek to be fully reflective of the communities we serve around the world. As of December 31, 2023, 73% of our Board and more than 50% of our management team were women. As of December 31, 2023, we had approximately 1,200 full-time employees, of which approximately 980 were located outside of the United States.
Our brands’ marketing strategies are especially effective due to our centralized performance marketing, partnership, and creative functions. These centralized functions enable us to share marketing learnings across our apps and geographies, allowing for the broadest application of successful strategies.
Our brands’ marketing strategies are especially effective due to our centralized performance marketing, partnership, and creative functions.
For example, we are a member of the Technology Coalition, an industry body that shares best practices to combat child sexual exploitation online. • In-App Integration of Bumble Initiatives : The Moves Making Impact product feature within Bumble app allows users to select a cause that matters to them.
For example, we are a member of the Tech Coalition, an industry body that shares best practices to combat child sexual exploitation online. • In-App Integration of Bumble Initiatives : The Moves Making Impact product feature within Bumble app allows a user to select and support a cause that matters to them and is relevant to the Bumble brand and mission, each time that user sends a first message. • Policy Advocacy and Legislation Efforts : In 2019, we helped pass one of the first state-level laws to address the act of sending unsolicited lewd photos in Texas, and have since helped pass similar legislation in California and Virginia.
We strongly encourage people of color, lesbian, gay, bisexual, transgender, queer and non-binary people, veterans, and individuals with disabilities to apply to work with us. We seek to be fully reflective of the communities we serve around the world.
Diversity & Inclusion The diversity of our management team and workforce is key to our success and reflects our mission and values. We strongly encourage people of color, lesbian, gay, bisexual, transgender, queer and non-binary people, veterans, parents, people with disabilities, and neurodivergent people to apply to work with us.
Our machine and deep learning capabilities plays a key role in identity fraud prevention as well as blocking inappropriate behavior and content from polluting our platform. • Our data protection and privacy standards : We are both committed and mandated to adhere to strict privacy standards.
Our artificial intelligence capabilities play a key role in creating a safe environment for our users, providing protection against identity fraud as well as blocking inappropriate behavior and content from polluting our platform. • Our data protection and privacy standards : We are both committed and mandated to adhere to strict privacy standards, such as the General Data Protection Regulation in the European Union and the United Kingdom and several state laws in the United States (each as discussed below in “—Licensing and Regulation”).
Another unique feature of Badoo app is the My Interests feature, which allows users to highlight certain topics by entering words or multiple words that are then displayed on the users’ profiles. Badoo app has a similar matching algorithm to Bumble app and the same vote “yes” or “no” methodology by swiping right and left, respectively.
Badoo app has a similar matching algorithm to 8 Bumble app and the same vote “yes” or “no” methodology by swiping right and left, respectively. It allows users the option to directly message anyone who is of interest without having to mutually vote yes.
In particular, we are subject to federal, state, and foreign laws regarding privacy and protection of people’s data and we currently, and from time to time, may not be in technical compliance with all such laws.
We currently, and from time to time, may not be in technical compliance with all such laws. Foreign data protection, privacy, content, competition, and other laws and regulations can impose different obligations or be more restrictive than those in the United States.
Bumble BFF and Bumble Bizz have a format similar to Bumble Date, requiring users to set up profiles and matching users through “yes” and “no” votes, similar to the dating platform. 9 Badoo App Profile, Matching and Chatting Badoo app’s profile customizations include the ability to add photos, work or educational background, and other personal information such as height and religion.
The BFF and Bizz modes have a format similar to the Date mode, requiring users to set up profiles and matching users through “yes” and “no” votes, similar to the dating platform. Bumble For Friends App Bumble For Friends app works in a similar way to the Date and BFF modes on Bumble app.
This feature uses machine learning to identify harassment and identity-based hate, which is then flagged to moderators to review and action appropriately according to our Community Guidelines. Our Safety Center is an in-app section with advice around safety and security, standards of behavior, how to report unwanted behavior, and other information about how Bumble app maintains safety.
This feature uses machine learning to identify harassment and identity-based hate, which is then flagged to moderators to review and action appropriately according to our Community Guidelines. Our subscription offerings, Bumble Boost and Bumble Premium, provide users with additional features to increase their success in making a meaningful connection.
At a national level in the United States, Congress may pass a comprehensive federal privacy statute and agencies such as the Federal Trade Commission are increasing their enforcement efforts and considering adopting new privacy rules.
Agencies such as the Federal Trade Commission are increasing their enforcement efforts and considering adopting new privacy rules. New privacy laws or regulations are likely to grant enhanced privacy rights to individuals and impose obligations on us as a business operating in those jurisdictions.
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.
We also have extended our platform beyond online dating into healthy relationships in other areas of life, such as friendships. The Bumble brand was built with women at the center. Our platform is designed to be safe and empowering for women, and, in turn, provides a better environment for everyone.
Our apps share some common infrastructure, which allows insights to be shared between apps. 7 Our shared infrastructure is also critical to providing our users with personalized and superior experiences. Our team has a strong track record of product leadership in online dating.
Our team has a strong track record of product leadership in online dating.
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Item 1. B usiness Who We Are Bumble app was founded because we noticed two different, yet related issues in our society: antiquated gender norms, and a lack of kindness and accountability on the internet. We observed that women were often treated unequally in society, especially in romantic relationships.
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In January 2022, we acquired Fruitz, an intentions-driven dating app focused on Gen Z, operating in EMEA and Canada. In April 2023, we acquired Official, an app that is intended to help couples build healthy and lasting habits in their romantic relationships.
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At the same time, social networks created possibilities for connections, but they were focused on connections with people you already know and lacked guardrails to encourage better behavior online. We created Bumble app to change this. The Bumble brand was built with women at the center—where women make the first move.
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Building on the BFF mode in Bumble app, in July 2023 we officially launched a standalone Bumble For Friends app. Bumble For Friends app is a friendship app where people in all stages of life can meet people nearby and create meaningful platonic connections. Bumble is more than our apps—we are powering a movement.
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The Bumble and Badoo apps ranked among the top five grossing iOS lifestyle apps in 109 and 99 countries, respectively, as of December 31, 2022. • Bumble app, launched in 2014, is one of the first dating apps built with women at the center. On Bumble app, women make the first move.
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We are continuously introducing new artificial intelligence capabilities to enhance our users' experience and safety, such as the recently announced Deception Detector, which uses artificial intelligence to help identify spam, scam, and fake profiles.
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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 app was the second most downloaded dating app in France, its core market, during the year ended December 31, 2022. Bumble is more than our apps—we are powering a movement.
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Bumble App On Bumble app, users can input information about themselves and set up a profile, which can be customized in many ways, such as by adding a Badge to prominently display certain values or characteristics. We use a matching algorithm combined with the preferences provided by users to recommend potential connections.
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Our technology platform is fueled by: • Shared infrastructure : Our apps share some common infrastructure, which allows insights to be shared between apps.
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The most popular features in the subscription plans include: Unlimited Rematch, where subscribers have an unlimited number of opportunities to rematch with prior matches that have already expired after a 24-hour period; and Unlimited Extends, where subscribers have an unlimited number of 24-hour extensions on conversations.
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Bumble App Profile, Matching and Chatting Setting up a profile on Bumble app is easy. First, users input information about themselves, including their name, age, gender identity, sexual orientation / who they are looking for, and a photo. In addition, we offer multiple ways for users to add customization and detail to their profiles.
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In 2023, we introduced a new subscription tier, Bumble Premium Plus. The Premium Plus tier offers expanded benefits, including being able to see whose profile is trending.
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Users can also add Badges to their profiles, which allows a user to prominently display certain values or characteristics, ranging from religion, to preference around having children, to zodiac sign. We also enable enhanced personalization of your profile, through integration with Spotify and Instagram.
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The app is intended to help couples build healthy and lasting habits in their relationships, with features that promote communication, self-reflection, memory sharing, and discovery. Features include: daily check-ins, quizzes, partner nudges, shared notes, and date idea discovery, among others. In 2023, Official launched its premium subscription offering, which unlocks expanded content across features.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe difference in voting rights subject us to numerous risks that could adversely affect the value of our Class A common stock by, for example, delaying or deferring a change of control or if investors view, or any potential future purchaser of our company views, the superior voting rights of our Principal Stockholders to have value. 42 Because of the ten-to-one voting ratio between our Class A and Class B common stock held by our Principal Stockholders, on the one hand, and Class A and Class B common stock held by individuals other than our Principal Stockholders, on the other hand, the Principal Stockholders collectively control a majority of the combined voting power of our common stock and therefore are able to control all matters submitted to our shareholders.
Biggest changeThe difference in voting rights subject us to numerous risks that could adversely affect the value of our Class A common stock by, for example, delaying or deferring a change of control or if investors view, or any potential future purchaser of our company views, the superior voting rights of our Principal Stockholders to have value.
Any decrease in user retention, growth or engagement could render our products less attractive to users, which is likely to have a material and adverse impact on our revenue, business, financial condition and results of operations.
Any decrease in user retention, growth or engagement could render our products less attractive to users, which is likely to have a material adverse impact on our revenue, business, financial condition and results of operations.
These changing rules, regulations and stakeholder expectations have resulted in, and are likely to continue to result in, increased general and administrative expenses and increased management time and attention spent complying with or meeting such regulations and expectations.
These changing rules, regulations and stakeholder expectations have resulted in, and are likely to continue to result in, increased general and administrative expenses and increased management time and attention spent complying with such regulations or meeting such expectations.
We may also communicate certain initiatives and goals, regarding environmental matters, diversity, responsible sourcing and social investments and other ESG-related matters, in our SEC filings or in other public disclosures.
We may also communicate certain initiatives and goals regarding environmental matters, diversity, responsible sourcing, social investments and other ESG-related matters in our SEC filings or in other public disclosures.
Among other things, these provisions: • provide that our Board of Directors will be divided into three classes, as nearly equal in size as possible, with directors in each class serving three-year terms and with terms of the directors of only one class expiring in any given year; • provide for the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2 ⁄ 3 % in voting power of the outstanding shares of our capital stock entitled to vote, if our Principal Stockholders and our Co-Investor beneficially own less than 30% of the total voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors and provide that specified directors designated pursuant to the stockholders agreement may not be removed without cause without the consent of the specified designating party; 44 • provide that subject to the rights of the holders of any preferred stock and the rights granted pursuant to the stockholders agreement, vacancies and newly created directorships may be filled only by the remaining directors at any time the Principal Stockholders and our Co-Investor beneficially own less than 30% of the total voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors; • would allow us to authorize the issuance of shares of one or more series of preferred stock, including in connection with a stockholder rights plan, financing transactions or otherwise, the terms of which series may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock; • prohibit stockholder action by written consent from and after the date on which our Principal Stockholders and our Co-Investor beneficially own at least 30% of the total voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors unless such action is recommended by all directors then in office; • provide for certain limitations on convening special stockholder meetings; • provide that the Board of Directors is expressly authorized to make, alter, or repeal our bylaws and that our stockholders may only amend our bylaws with the approval of 66 2 ⁄ 3 % or more of all of the outstanding shares of our capital stock entitled to vote, if our Principal Stockholders and our Co-Investor beneficially own less than 30% of the total voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors; • provide that certain provisions of our amended and restated certificate of incorporation may be amended only by the affirmative vote of the holders of at least 66 2 ⁄ 3 % in voting power of the outstanding shares of our capital stock entitled to vote, if our Principal Stockholders and our Co-Investor beneficially own less than 30% of the total voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors; and • establish advance notice requirements for nominations for elections to our Board or for proposing matters that can be acted upon by stockholders at stockholder meetings.
Among other things, these provisions: • provide that our Board of Directors will be divided into three classes, as nearly equal in size as possible, with directors in each class serving three-year terms and with terms of the directors of only one class expiring in any given year; • provide for the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2 ⁄ 3 % in voting power of the outstanding shares of our capital stock entitled to vote, if our Principal Stockholders and our Co-Investor beneficially own less than 30% of the total voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors and provide that specified directors designated pursuant to the stockholders agreement may not be removed without cause without the consent of the specified designating party; 40 • provide that subject to the rights of the holders of any preferred stock and the rights granted pursuant to the stockholders agreement, vacancies and newly created directorships may be filled only by the remaining directors at any time the Principal Stockholders and our Co-Investor beneficially own less than 30% of the total voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors; • would allow us to authorize the issuance of shares of one or more series of preferred stock, including in connection with a stockholder rights plan, financing transactions or otherwise, the terms of which series may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock; • prohibit stockholder action by written consent from and after the date on which our Principal Stockholders and our Co-Investor beneficially own at least 30% of the total voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors unless such action is recommended by all directors then in office; • provide for certain limitations on convening special stockholder meetings; • provide that the Board of Directors is expressly authorized to make, alter, or repeal our bylaws and that our stockholders may only amend our bylaws with the approval of 66 2 ⁄ 3 % or more of all of the outstanding shares of our capital stock entitled to vote, if our Principal Stockholders and our Co-Investor beneficially own less than 30% of the total voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors; • provide that certain provisions of our amended and restated certificate of incorporation may be amended only by the affirmative vote of the holders of at least 66 2 ⁄ 3 % in voting power of the outstanding shares of our capital stock entitled to vote, if our Principal Stockholders and our Co-Investor beneficially own less than 30% of the total voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors; and • establish advance notice requirements for nominations for elections to our Board or for proposing matters that can be acted upon by stockholders at stockholder meetings.
In the event that content shown on Bumble app or our other products is subject to censorship, access to our products is restricted, in whole or in part, in one or more countries, we are required to or elect to make changes to our operations, or other restrictions are imposed on our products, or our competitors are able to successfully penetrate new geographic markets or capture a greater share of existing geographic markets that we cannot access or where we face other restrictions, our ability to retain or increase our user base, user engagement, or the level of advertising by marketers may be adversely affected, we may not be able to maintain or grow our revenue as anticipated, and our financial results could be materially adversely affected.
In the event that content shown on Bumble app or our other products is subject to censorship, access to our products is restricted, in 32 whole or in part, in one or more countries, we are required to or elect to make changes to our operations, or other restrictions are imposed on our products, or our competitors are able to successfully penetrate new geographic markets or capture a greater share of existing geographic markets that we cannot access or where we face other restrictions, our ability to retain or increase our user base, user engagement, or the level of advertising by marketers may be adversely affected, we may not be able to maintain or grow our revenue as anticipated, and our financial results could be materially adversely affected.
Operating internationally, particularly in countries in which we have limited experience, exposes us to a number of additional risks, including: • operational and compliance challenges caused by distance, language and cultural differences; • difficulties in staffing and managing international operations; • differing levels of social and technological acceptance of our products or lack of acceptance of them generally; • foreign currency fluctuations; • restrictions on the transfer of funds among countries and back to the United States, as well as costs associated with repatriating funds to the United States; • differing and potentially adverse tax laws; • multiple, conflicting and changing laws, rules and regulations (including those intended to strengthen a government's control over the internet and to reduce its dependence on foreign companies and countries), and difficulties understanding and ensuring compliance with those laws by both our employees and our business partners, over whom we exert no control; • compliance challenges due to different laws and regulatory environments, particularly in the case of intellectual property, privacy, data security, and intermediary liability, and consumer protection; • actions by governments or others to restrict access to or censor content on our platform, whether these actions are taken for political reasons, in response to decisions we make regarding governmental requests or content generated by our users, or otherwise; • competitive environments that favor local businesses; • increased competition from largely regional websites, mobile applications and services that provide real-time communications and have strong positions in particular countries, which have expanded and may continue to expand their geographic footprint; • limitations on the level of intellectual property protection; • low usage and/or penetration of internet-connected consumer electronic devices or a wide diversity of device capabilities and operating systems (for example, some countries may have a high penetration of older phones running on older versions of operating systems that are not adequately supported by our updated software); • geopolitical tension or social unrest and economic instability, particularly in countries in which we operate; • trade sanctions such as those administered by the U.S.
Operating internationally, particularly in countries in which we have limited experience, exposes us to a number of additional risks, including: • operational and compliance challenges caused by distance, language and cultural differences; • difficulties in staffing and managing international operations; • differing levels of social and technological acceptance of our products or lack of acceptance of them generally; • foreign currency fluctuations; • restrictions on the transfer of funds among countries and back to the United States, as well as costs associated with repatriating funds to the United States; • differing and potentially adverse tax laws; • multiple, conflicting and changing laws, rules and regulations (including those intended to strengthen a government's control over the internet and to reduce its dependence on foreign companies and countries), and difficulties understanding and ensuring compliance with those laws by both our employees and our business partners, over whom we exert no control; • compliance challenges due to different laws and regulatory environments, particularly in the case of intellectual property, privacy, data security, intermediary liability, and consumer protection; • actions by governments or others to restrict access to or censor content on our platform, whether these actions are taken for political reasons, in response to decisions we make regarding governmental requests or content generated by our users, or otherwise; • competitive environments that favor local businesses; • increased competition from largely regional websites, mobile applications and services that provide real-time communications and have strong positions in particular countries, which have expanded and may continue to expand their geographic footprint; • limitations on the level of intellectual property protection; • low usage and/or penetration of internet-connected consumer electronic devices or a wide diversity of device capabilities and operating systems (for example, some countries may have a high penetration of older phones running on older versions of operating systems that are not adequately supported by our updated software); • geopolitical tension (such as the wars in Ukraine and Israel) or social unrest and economic instability, particularly in countries in which we operate; • trade sanctions such as those administered by the U.S.
These laws and regulations, as well as any associated inquiries or investigations or any other government actions, may be costly to comply with and may delay or impede the development of new products, require that we change or cease certain business practices, result in negative publicity, increase our operating costs, require significant management time and attention, and subject us to remedies that may harm our business, including fines, demands or orders that require us to modify or cease existing business practices.
These laws and regulations, as well as any associated 29 inquiries or investigations or any other government actions, may be costly to comply with and may delay or impede the development of new products, require that we change or cease certain business practices, result in negative publicity, increase our operating costs, require significant management time and attention, and subject us to remedies that may harm our business, including fines, demands or orders that require us to modify or cease existing business practices.
In addition, if, at any time, our Founder is neither an employee nor a director, any Class A common stock or Class B common stock held by our Founder will be entitled to one vote per share (in the case of the Class A common stock) or a number of votes that is equal to the aggregate number of Common Units (including Common Units issued upon conversion of vested Incentive Units) of Bumble Holdings held by our Founder (in the case of the Class B common stock), in each case on all matters on which stockholders of Bumble Inc. are entitled to vote generally.
In addition, if, at any time, our Founder is neither an employee nor a director, any Class A common stock or Class B 38 common stock held by our Founder will be entitled to one vote per share (in the case of the Class A common stock) or a number of votes that is equal to the aggregate number of Common Units (including Common Units issued upon conversion of vested Incentive Units) of Bumble Holdings held by our Founder (in the case of the Class B common stock), in each case on all matters on which stockholders of Bumble Inc. are entitled to vote generally.
We may experience operational and financial risks in connection with historical and future acquisitions if we are unable to: • properly value prospective acquisitions, especially those with limited operating histories; • accurately review acquisition candidates’ business practices against applicable laws and regulations and, where applicable, implement proper remediation controls, procedures, and policies; 48 • successfully integrate the operations, as well as the accounting, financial controls, management information, technology, human resources and other administrative systems, of acquired businesses with our existing operations and systems; • overcome cultural challenges associated with integrating employees from the acquired company into our organization; • successfully identify and realize potential synergies among acquired and existing businesses; • fully identify potential risks and liabilities associated with acquired businesses, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities, litigation or other claims in connection with the acquired company, including claims from terminated employees, former stockholders or other third parties, and other known and unknown liabilities; • retain or hire senior management and other key personnel at acquired businesses; and • successfully manage acquisition-related strain on our management, operations and financial resources and those of the various brands in our portfolio.
We may experience operational and financial risks in connection with historical and future acquisitions if we are unable to: • properly value prospective acquisitions, especially those with limited operating histories; • accurately review acquisition candidates’ business practices against applicable laws and regulations and, where applicable, implement proper remediation controls, procedures, and policies; • successfully integrate the operations, as well as the accounting, financial controls, management information, technology, human resources and other administrative systems, of acquired businesses with our existing operations and systems; 43 • overcome cultural challenges associated with integrating employees from the acquired company into our organization; • successfully identify and realize potential synergies among acquired and existing businesses; • fully identify potential risks and liabilities associated with acquired businesses, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities, litigation or other claims in connection with the acquired company, including claims from terminated employees, former stockholders or other third parties, and other known and unknown liabilities; • retain or hire senior management and other key personnel at acquired businesses; and • successfully manage acquisition-related strain on our management, operations and financial resources and those of the various brands in our portfolio.
Failure to comply with evolving privacy laws could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business or our reputation, and to the extent that we need to alter our business model or practices to adapt to these obligations, we could incur additional expenses, which may in turn materially adversely affect our business, financial condition, and results of operations.
Failure to comply with evolving privacy laws and standards could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business or our reputation, and to the extent that we need to alter our business model or practices to adapt to these obligations, we could incur additional expenses, which may in turn materially adversely affect our business, financial condition, and results of operations.
In addition, the structuring of future transactions may take into consideration our pre-IPO owners’ tax or other considerations even where no similar benefit would accrue to us. 40 Our amended and restated certificate of incorporation does not limit the ability of our Principal Stockholders to compete with us and they may have investments in businesses whose interests conflict with ours.
In addition, the structuring of future transactions may take into consideration our pre-IPO owners’ tax or other considerations even where no similar benefit would accrue to us. Our amended and restated certificate of incorporation does not limit the ability of our Principal Stockholders to compete with us and they may have investments in businesses whose interests conflict with ours.
Any changes in service levels at our data centers, cloud infrastructure and service providers, or payment aggregators, or any interruptions, outages or delays in our systems or those of our third-party providers, or deterioration in the performance of these systems, could impair our ability to provide our products or process transactions with our users, which could materially adversely impact our business, financial condition, results of operations and prospects.
Any changes in service levels at our data centers, cloud infrastructure and service providers, or payment aggregators, or any interruptions, outages or delays in our systems or those of our third-party providers, or deterioration in the performance of these systems, could impair our ability to provide our products or process transactions with our users, which could materially adversely impact our business, financial condition and results of operations.
There may be intellectual property or other rights held by others, including issued or pending patents, that cover significant aspects of our products and services, and we cannot be sure that we are not infringing or violating, and have not infringed 29 or violated, any third-party intellectual property rights or that we will not be held to have done so or be accused of doing so in the future.
There may be intellectual property or other rights held by others, including issued or pending patents, that cover significant aspects of our products and services, and we cannot be sure that we are not infringing or violating, and have not infringed or violated, any third-party intellectual property rights or that we will not be held to have done so or be accused of doing so in the future.
In addition, certain publishers and channels have, from time to time, limited or prohibited advertisements for dating products for a variety of reasons, including as a result of poor behavior by other industry participants. There is no assurance that we will not be limited or prohibited from using certain current or prospective marketing channels in the future.
Certain publishers and channels have, from time to time, limited or prohibited advertisements for dating products for a variety of reasons, including as a result of poor behavior by other industry participants. There is no assurance that we will not be limited or prohibited from using certain current or prospective marketing channels in the future.
In addition, substantial negative commentary by others on social media platforms could have an adverse impact on our reputation and ability to attract and retain users. If our advertising and marketing campaigns do not generate a sufficient number of users, our business, financial condition and results of operations will be materially affected.
In addition, substantial negative commentary by others on social media platforms could have an adverse impact on our reputation and ability to attract and retain users. If our advertising and marketing campaigns do not generate a sufficient number of users, our business, financial condition and results of operations will be materially adversely affected.
Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to environmental, social and governance matters, that could expose us to numerous risks. We are subject to changing rules and regulations promulgated by a number of governmental and self-regulatory organizations, including the SEC, Nasdaq and the Financial Accounting Standards Board.
Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to environmental, social and governance matters, that could expose us to numerous risks. We are subject to rules and regulations promulgated by a number of governmental and self-regulatory organizations, including the SEC, Nasdaq and the Financial Accounting Standards Board.
Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. For example, third parties have challenged our “BUMBLE” trademarks in the United Kingdom (“UK”) and the EU, and if such challenges are successful, we could lose valuable trademark rights.
Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. For example, third parties have challenged our “BUMBLE” trademarks in the United Kingdom and the EU, and if such challenges are successful, we could lose valuable trademark rights.
Such laws also are becoming increasingly rigorous and could be interpreted and applied in ways that may have a material adverse effect on our business, financial condition, results of operations and prospects. In addition, enforcement practices are likely to remain unpredictable for the foreseeable future.
Such laws also are becoming increasingly rigorous and could be interpreted and applied in ways that may have a material adverse effect on our business, financial condition and results of operations. In addition, enforcement practices are likely to remain unpredictable for the foreseeable future.
When one or more of our users suffers or alleges to have suffered any such harm either on our platform or in person after meeting on our products, we have in the past, and 23 could in the future, experience negative publicity or legal action that could damage our brands and our brands’ reputation.
When one or more of our users suffers or alleges to have suffered any such harm either on our platform or in person after meeting on our products, we have in the past, and could in the future, experience negative publicity or legal action that could damage our brands and our brands’ reputation.
Any failure to update and 28 enhance our technology in a timely and cost-effective manner could materially adversely affect our users’ experience with our various products and thereby negatively impact the demand for our products, and could increase our costs, either of which could materially adversely affect our business, financial condition and results of operations.
Any failure to update and enhance our technology in a timely and cost-effective manner could materially adversely affect our users’ experience with our various products and thereby negatively impact the demand for our products, and could increase our costs, either of which could materially adversely affect our business, financial condition and results of operations.
Any of the foregoing, and any unfavorable resolution of such disputes and litigation, would materially and adversely impact our business, financial condition, results of operations and prospects. We may fail to adequately obtain, protect and maintain our intellectual property rights or prevent third parties from making unauthorized use of such rights.
Any of the foregoing, and any unfavorable resolution of such disputes and litigation, would materially adversely impact our business, financial condition and results of operations. We may fail to adequately obtain, protect and maintain our intellectual property rights or prevent third parties from making unauthorized use of such rights.
Under the GDPR we may be subject to fines of up to €20 million or up to 4% of the total worldwide annual group turnover of the preceding financial year (whichever is higher), as well as face claims from individuals based on the GDPR’s private rights of action.
Under the GDPR we may be subject to fines of up to €20 million or up to 4% of the total worldwide annual group turnover of the preceding financial year (whichever is higher), as 30 well as face claims from individuals based on the GDPR’s private rights of action.
In addition, our Sponsor has pledged substantially all of the shares of our Class A common stock held by it pursuant to a margin loan agreement and any foreclosure upon those shares could result in sales of a substantial number of shares of 43 our Class A common stock in the public market, which could substantially decrease the market price of our Class A common stock.
In addition, our Sponsor has pledged substantially all of the shares of our Class A common stock held by it pursuant to a margin loan agreement and any foreclosure upon those shares could result in sales of a substantial number of shares of our Class A common stock in the public market, which could substantially decrease the market price of our Class A common stock.
We may not prevail in any intellectual property-related proceedings that we initiate against third parties. Further, in such proceedings or in proceedings before patent, trademark and copyright agencies, our asserted intellectual property could be found to be invalid or unenforceable, in which case we could lose valuable intellectual property rights.
We may not prevail in any intellectual property-related proceedings that we initiate against third parties. Further, in such proceedings or in proceedings before patent, trademark and copyright agencies, our asserted intellectual property could be found to be invalid or unenforceable, in which case we could lose 28 valuable intellectual property rights.
As a result, our accelerated payment obligations and/or the assumptions adopted under the tax receivable agreement in the case of a change of control may impair our ability to consummate change of control transactions or negatively impact the value received by owners of our Class A common stock in a change of control transaction.
As a result, our accelerated payment obligations and/or the assumptions adopted under the tax receivable agreement in the case of a change of 36 control may impair our ability to consummate change of control transactions or negatively impact the value received by owners of our Class A common stock in a change of control transaction.
Under these corporate governance standards, a company of which more than 50% of the voting power in the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements.
Under these corporate governance standards, a company 37 of which more than 50% of the voting power in the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements.
These social 16 media and mobile platform competitors could use strong or dominant positions in one or more markets, and ready access to existing large pools of potential users and personal information regarding those users, to gain competitive advantages over us.
These social media and mobile platform competitors could use strong or dominant positions in one or more markets, and ready access to existing large pools of potential users and personal information regarding those users, to gain competitive advantages over us.
Finally, the passage or adoption of any legislation or regulation affecting the ability of service providers to periodically charge consumers for, among other things, recurring subscription payments may materially adversely affect our business, financial condition and results of operations.
Finally, the passage or adoption of any legislation or regulation affecting the ability of service providers to periodically charge consumers for, among other things, recurring subscription payments may materially adversely affect our business, financial condition 24 and results of operations.
Any number of factors can negatively affect user retention, growth, and engagement, including if: • users increasingly engage with other competitive products or services; • user behavior on any of our products changes, including decreases in the quality of the user base and frequency of use of our products and services; • users feel that their experience is diminished as a result of the decisions we make with respect to the frequency, prominence, format, size and quality of ads that we display; • there are decreases in user sentiment due to questions about the quality of our user data practices or concerns related to privacy and the sharing of user data; • there are decreases in user sentiment due to questions about the quality or usefulness of our products or concerns related to safety, security, well-being or other factors; • users are no longer willing to pay (or pay as much) for subscriptions or in-app purchases, including due to changes to the payment platform or payment methods; • users have difficulty installing, updating or otherwise accessing our products on mobile devices as a result of actions by us or third parties, such as application marketplaces and device manufacturers, that we rely on to distribute our products and deliver our services; • we fail to introduce new features, products or services that users find engaging or if we introduce new products or services, or make changes to existing products and services, that are not favorably received; • we fail to keep pace with evolving online, market and industry trends (including the introduction of new and enhanced digital services); • we fail to appeal to and engage the younger demographic of users (for example, Gen Z), with their different dynamics of connection; • initiatives designed to attract and retain users and engagement are unsuccessful or discontinued, whether as a result of actions by us, third parties or otherwise; • there is a decrease in user retention as a result of users finding meaningful relationships on our platforms and no longer needing to engage with our products; • third-party initiatives that may enable greater use of our products, including low-cost or discounted data plans, are discontinued; 15 • we adopt terms, policies or procedures related to areas such as user data or advertising that are perceived negatively by our users or the general public; • we fail to combat inappropriate or abusive activity on our platform; • users, particularly women, do not perceive our products as being safer than other competitive products or services; • we fail to provide adequate customer service to users, marketers or other partners; • we fail to protect our brand image or reputation; • we, our partners or companies in our industry are the subject of adverse media reports or other negative publicity, including as a result of our or their user data practices; • technical or other problems prevent us from delivering our products in a rapid and reliable manner or otherwise affect the user experience, such as security breaches, distributed denial-of-service attacks or failure to prevent or limit spam or similar content; • there is decreased engagement with our products as a result of internet shutdowns or other actions by governments that affect the accessibility of our products in any of our markets; • there is decreased engagement with our products, or failure to accept our terms of service, as part of changes that we have implemented, or may implement, in the future in connection with regulations, regulatory actions or otherwise; • there is decreased engagement due to the expansion of one of our apps into new markets which cannibalizes any of our other apps that historically operated in such markets; • there is decreased engagement with our products as a result of changes in prevailing social, cultural or political preferences in the markets where we operate; or • there are changes mandated by legislation, regulatory authorities or litigation that adversely affect our products or users.
Any number of factors can negatively affect user retention, growth, and engagement, including if: • users increasingly engage with other competitive products or services; • user behavior on any of our products changes, including decreases in the quality of the user base and frequency of use of our products and services; • users feel that their experience is diminished as a result of the decisions we make with respect to the frequency, prominence, format, size and quality of ads that we display; • there are decreases in user sentiment due to questions about the quality of our user data practices or concerns related to privacy and the sharing of user data; • there are decreases in user sentiment due to questions about the quality or usefulness of our products or concerns related to safety, security, well-being or other factors, including our implementation and use of artificial intelligence; • users are no longer willing to pay (or pay as much) for subscriptions or in-app purchases, including due to changes to the payment platform or payment methods; • users have difficulty installing, updating or otherwise accessing our products on mobile devices as a result of actions by us or third parties, such as application marketplaces and device manufacturers, that we rely on to distribute our products and deliver our services; • we fail to introduce new features, products or services that users find engaging or if we introduce new products or services, or make changes to existing products and services, that are not favorably received, including artificial intelligence-driven changes; • we fail to keep pace with evolving online, market and industry trends (including the introduction of new and enhanced digital services and technologies); • we fail to appeal to and engage the younger demographic of users (for example, Gen Z), with their different dynamics of connection; • initiatives designed to attract and retain users and engagement are unsuccessful or discontinued, whether as a result of actions by us, third parties or otherwise; • there is a decrease in user retention as a result of users finding meaningful relationships on our platforms and no longer needing to engage with our products; • third-party initiatives that may enable greater use of our products, including low-cost or discounted data plans, are discontinued; • we adopt terms, policies or procedures related to areas such as user data or advertising that are perceived negatively by our users or the general public; 14 • we fail to combat inappropriate or abusive activity on our platform; • users, particularly women, do not perceive our products as being safer than other competitive products or services; • we fail to provide adequate customer service to users, marketers or other partners; • we fail to protect our brand image or reputation; • we, our partners or companies in our industry are the subject of adverse media reports or other negative publicity, including as a result of our or their user data practices; • technical or other problems prevent us from delivering our products in a rapid and reliable manner or otherwise affect the user experience, such as security breaches, distributed denial-of-service attacks or failure to prevent or limit spam or similar content; • there is decreased engagement with our products as a result of internet shutdowns or other actions by governments that affect the accessibility of our products in any of our markets; • there is decreased engagement with our products, or failure to accept our terms of service, as part of changes that we have implemented, or may implement, in the future in connection with regulations, regulatory actions or otherwise; • there is decreased engagement due to the expansion of one of our apps into new markets which cannibalizes any of our other apps that historically operated in such markets; • there is decreased engagement with our products as a result of changes in prevailing social, cultural or political preferences in the markets where we operate; or • there are changes mandated by legislation, regulatory authorities or litigation that adversely affect our products or users.
Similar events affecting users of our competitors’ products have in the past, and could in the future, result in negative publicity for the dating industry generally, which could in turn negatively affect our business, particularly if such objectionable events are widely reported.
Similar events affecting users of our competitors’ products have resulted in the past, and could result in the future, in negative publicity for the dating industry generally, which could in turn negatively affect our business, particularly if such objectionable events are widely reported.
While these metrics are based on what we believe to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges in measuring how our products are used across large populations globally.
While these metrics are based on what we believe to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges in measuring how our products are used across large 21 populations globally.
These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell shares of our Class A common stock in the future at a time and at a price that we deem appropriate.
These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell shares of our Class A common stock in the future at a time and at a price 39 that we deem appropriate.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of 27 litigation.
Moreover, there may be restrictions on payments by subsidiaries to their parent companies under applicable laws, including 36 laws that require companies to maintain minimum amounts of capital and to make payments to stockholders only from profits.
Moreover, there may be restrictions on payments by subsidiaries to their parent companies under applicable laws, including laws that require companies to maintain minimum amounts of capital and to make payments to stockholders only from profits.
We may introduce significant changes to our existing brands and products, or acquire or introduce new and unproven brands, products and product extensions, including using technologies with which we have little or no prior development or operating experience.
We may introduce significant changes to our existing brands and products, or acquire or introduce new and unproven brands, products and product extensions, including using technologies with which we have little or no prior 17 development or operating experience.
Amongst other laws and regulations, we are and will continue to be subject to: • the General Data Protection Regulation (“GDPR”), which has a broad array of detailed requirements for the handling of personal data.
Amongst other laws and regulations, we are and will continue to be subject to: • the EU's General Data Protection Regulation (“GDPR”), which has a broad array of detailed requirements for the handling of personal data.
We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able 37 to obtain waivers from the lenders and/or amend the covenants.
We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.
We regularly review metrics, including our Bumble App Paying Users, Badoo App and Other Paying Users, Total Paying Users, Bumble App ARPPU, Badoo App and Other Average Revenue per Paying User and Total Average Revenue per Paying User metrics, to evaluate growth trends, measure our performance, and make strategic decisions.
We regularly review metrics, including our Bumble App Paying Users, Badoo App and Other Paying Users, Total Paying Users, Bumble App Average Revenue per Paying User, Badoo App and Other Average Revenue per Paying User and Total Average Revenue per Paying User metrics, to evaluate growth trends, measure our performance, and make strategic decisions.
We are subject to a variety of laws and regulations in the United States and abroad that involve matters that are important to or may otherwise impact our business, including, among others, broadband internet access, online commerce, online safety, advertising, user privacy, data protection, cyber security, intermediary liability, protection of minors, consumer protection, general safety, sex-trafficking, labor and employment, taxation and securities law compliance.
We are subject to a variety of laws and regulations in the United States and abroad that involve matters that are important to or may otherwise impact our business, including, among others, broadband internet access, online commerce, online safety, advertising, user privacy, data protection, cyber security, artificial intelligence, intermediary liability, protection of minors, consumer protection, general safety, sex-trafficking, labor and employment, taxation and securities law compliance.
We have recently experienced higher interest expense on our Senior Secured Credit Facilities due to interest rate increases and, if interest rates continue to increase, our debt service obligations on our Senior Secured Credit Facilities would further increase even though the amount borrowed remained the same, especially if our hedging strategies do not effectively mitigate the effects of these increases, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease.
We have recently experienced higher interest expense on our credit facilities due to interest rate increases and, if interest rates continue to increase, our debt service obligations on our credit facilities would further increase even though the amount borrowed remained the same, especially if our hedging strategies do not effectively mitigate the effects of these increases, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease.
Companies in the internet, technology and social media industries are subject to frequent litigation based on allegations of infringement, misappropriation or other violations of intellectual property rights.
Companies in the internet, technology and social 26 media industries are subject to frequent litigation based on allegations of infringement, misappropriation or other violations of intellectual property rights.
Our financial condition and operating results in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including, for example: • the timing, size and effectiveness of our marketing efforts; • the timing and success of new product, service and feature introductions by us or our competitors or any other change in the competitive landscape of our market; • fluctuations in the rate at which we attract new users, the level of engagement of such users and the propensity of such users to subscribe to our brands or to purchase à la carte features; • successful expansion into international markets; • errors in our forecasting of the demand for our products and services, which could lead to lower revenue or increased costs, or both; • increases in sales and marketing, product development or other operating expenses that we may incur to grow and expand our operations and to remain competitive; • the diversification and growth of our revenue sources; • our ability to maintain gross margins and operating margins; • fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies; • changes in our effective tax rate; • changes in accounting standards, policies, guidance, interpretations, or principles; • our development and improvement of the quality of our app experiences, including, enhancing existing and creating new products, services, technology and features; • the continued development and upgrading of our technology platform; • system failures or breaches of security or privacy; • 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; • adverse litigation judgments, settlements, or other litigation-related costs; • changes in the legislative or regulatory environment, including with respect to privacy, intellectual property, consumer product safety, and advertising, or enforcement by government regulators, including fines, orders, or consent decrees; • changes in business or macroeconomic conditions, including the impact of lower consumer confidence in our business or in the online dating and social connection industry generally, recessionary conditions, inflation, interest rates, increased unemployment rates, stagnant or declining wages, political unrest, armed conflicts, pandemics or epidemics or natural disasters; and • changes in our expected estimated useful life of property and equipment and intangible assets.
Our financial condition and operating results in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including, for example: • the timing, size and effectiveness of our marketing efforts; • the timing and success of new product, service and feature introductions by us or our competitors or any other change in the competitive landscape of our market; • fluctuations in the rate at which we attract new users, the level of engagement of such users and the propensity of such users to subscribe to our brands or to purchase à la carte features; • successful expansion into international markets; • errors in our forecasting of the demand for our products and services, which could lead to lower revenue or increased costs, or both; • increases in sales and marketing, product development or other operating expenses that we may incur to grow and expand our operations and to remain competitive; • the diversification and growth of our revenue sources; • our ability to maintain gross margins and operating margins; • fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies; • changes in our effective tax rate; • changes in accounting standards, policies, guidance, interpretations, or principles; • our development and improvement of the quality of our app experiences, including, enhancing existing and creating new products, services, technology and features; • the continued development and upgrading of our technology platform; • system failures or breaches of security or privacy; • 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; • adverse litigation judgments, settlements, or other litigation-related costs; • changes in the legislative or regulatory environment, including with respect to privacy, intellectual property, consumer product safety, and advertising, or enforcement by government regulators, including fines, orders, or consent decrees; • changes in business or macroeconomic conditions, including the impact of lower consumer confidence in our business or in the online dating and social connection industry generally, recessionary conditions, inflation, interest rates, increased unemployment rates, stagnant or declining wages, political unrest (which may be heightened in a U.S. presidential election year), terrorism, armed conflicts, pandemics or epidemics or natural disasters; and • changes in our expected estimated useful life of property and equipment and intangible assets.
While we have systems and processes in place that aim to monitor and review the appropriateness of the content accessible through our products, which include, in particular, reporting tools through which users can inform us of such behavior on the platform, and have adopted policies regarding illegal, offensive or inappropriate use of our products, our users have in the past, and could in the future, nonetheless engage in activities that violate our policies.
While we have systems and processes in place that aim to monitor and review the appropriateness of the content accessible through our products, which include, in particular, reporting tools through which users can inform us of such behavior on the platform, and have adopted policies regarding illegal, offensive or inappropriate use of our products, our users have in the past, and could in the future, nonetheless engage in activities that violate our policies, and/or the systems and processes that we have in place to monitor and review the appropriateness of content may fail.
Purchases of these subscriptions and features via our mobile applications are mainly processed through the in-app payment systems provided by Apple and Google.
Purchases of these subscriptions and features 16 via our mobile applications are mainly processed through the in-app payment systems provided by Apple and Google.
See Part I, “Item 3— Legal Proceedings” and Note 20, Commitments and Contingencies, to the audited consolidated financial statements included in “Item 8―Financial Statements and Supplementary Data.” Online applications are subject to various laws and regulations relating to children’s privacy and protection, which if violated, could subject us to an increased risk of litigation and regulatory actions.
See Part I, “Item 3— Legal Proceedings” and Note 19, Commitments and Contingencies, to the audited consolidated financial statements included in “Item 8―Financial Statements and Supplementary Data.” Online applications are subject to various laws and regulations relating to children’s privacy and protection, which if violated, could subject us to an increased risk of litigation and regulatory actions.
Our quarterly operating results and other operating metrics may fluctuate from quarter to quarter, which makes these metrics difficult to predict. Our quarterly operating results and other operating metrics have fluctuated in the past and may continue to fluctuate from quarter to quarter, which makes them difficult to predict.
Our quarterly operating results and other operating metrics have fluctuated in the past and may continue to fluctuate from quarter to quarter, which makes them difficult to predict.
Risks Related to Information Technology Systems and Intellectual Property Security breaches, improper access to or disclosure of our data or user data, other hacking and phishing attacks on our systems, or other cyber incidents could compromise the confidentiality and/or availability of sensitive information related to our business and/or personal data processed by us or on our behalf and expose us to liability, which could harm our reputation and materially adversely affect our business.
Risks Related to Information Technology Systems Security breaches, improper access to or disclosure of our data or user data, other hacking and phishing attacks on our systems, or other cyber incidents could compromise the confidentiality and/or availability of sensitive information related to our business and/or personal data processed by us or on our behalf and expose us to liability, which could harm our reputation and materially adversely affect our business.
Specifically, our high level of debt could have important consequences, including the following: • it may be difficult for us to satisfy our obligations, including debt service requirements under our outstanding debt; • our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions or other general corporate purposes may be impaired; • a substantial portion of cash flow from operations are required to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures, future business opportunities and other purposes; • we could be more vulnerable to economic downturns and adverse industry conditions and our flexibility to plan for, or react to, changes in our business or industry is more limited; • our ability to capitalize on business opportunities and to react to competitive pressures, as compared to our competitors, may be compromised due to our high level of debt and the restrictive covenants in the Credit Agreement that governs our Senior Secured Credit Facilities; • our ability to borrow additional funds or to refinance debt may be limited; and • it may cause potential or existing customers to not contract with us due to concerns over our ability to meet our financial obligations under such contracts.
Specifically, our high level of debt could have important consequences, including the following: • it may be difficult for us to satisfy our obligations, including debt service requirements under our outstanding debt; • our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions or other general corporate purposes may be impaired; • a substantial portion of cash flow from operations are required to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures, future business opportunities and other purposes; • we could be more vulnerable to economic downturns and adverse industry conditions and our flexibility to plan for, or react to, changes in our business or industry is more limited; 33 • our ability to capitalize on business opportunities and to react to competitive pressures, as compared to our competitors, may be compromised due to our high level of debt and the restrictive covenants in the Credit Agreement that governs our credit facilities; • our ability to borrow additional funds or to refinance debt may be limited; and • it may cause potential or existing service providers to not contract with us due to concerns over our ability to meet our financial obligations under such contracts.
Internal Revenue Service (“IRS”) may challenge all or part of the validity of that tax basis, and a court could sustain such a challenge.
Internal Revenue Service (“IRS”) may challenge all or part of the 35 validity of that tax basis, and a court could sustain such a challenge.
We rely on third parties, primarily data center service providers (such as colocation providers), as well as third-party cloud infrastructure and service providers, payment aggregators, computer systems, internet transit providers and other communications systems and service providers, in connection with the provision of our products generally, as well as to facilitate and process certain transactions with our users.
We rely on third parties, primarily data center service providers (such as colocation providers), as well as third-party cloud infrastructure and service providers, payment aggregators, computer systems, internet transit providers, other communications systems and service providers, and system management service providers, in connection with the provision of our products generally, as well as to facilitate and process certain transactions with our users.
Changes to our existing brands and products, or the introduction of new brands or products, could fail to attract or retain users or generate revenue and profits.
Changes to our existing brands and products, or the introduction or acquisition of new brands or products, could fail to attract or retain users or generate revenue and profits.
Risks Related to Ownership of our Class A Common Stock Our Principal Stockholders control us and their interests may conflict with ours or yours in the future. As of the date of this Annual Report, our Principal Stockholders beneficially own approximately 92% of the combined voting power of our Class A and Class B common stock.
Risks Related to Ownership of our Class A Common Stock Our Principal Stockholders control us and their interests may conflict with ours or yours in the future. As of the date of this Annual Report, our Principal Stockholders beneficially own approximately 89% of the combined voting power of our Class A and Class B common stock.
The anticipated benefits of one or more of our acquisitions may not be realized or the value of goodwill and other intangible assets acquired could be impacted by one or more continuing unfavorable events or trends, which has resulted in Badoo brand impairment, and could result in further significant impairment charges.
The anticipated benefits of one or more of our acquisitions may not be realized or the value of goodwill and other intangible assets acquired could be impacted by one or more continuing unfavorable events or trends, which resulted in Badoo brand impairment in 2022 and could result in further significant impairment charges.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.
Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.
If we are unable 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, it could materially adversely impact our business, financial condition and results of operations.
Risks Related to Intellectual Property If we are unable 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, it could materially adversely impact our business, financial condition and results of operations.
Our Principal Stockholders are parties to a stockholders agreement and, as of the date of this Annual Report, beneficially own approximately 92% of the combined voting power of our Class A and Class B common stock. As a result, we are a “controlled company” within the meaning of the Nasdaq corporate governance standards.
Our Principal Stockholders are parties to a stockholders agreement and, as of the date of this Annual Report, beneficially own approximately 89% of the combined voting power of our Class A and Class B common stock. As a result, we are a “controlled company” within the meaning of the Nasdaq corporate governance standards.
If the security of personal and confidential or sensitive user information that we maintain and store is breached, or otherwise accessed by unauthorized persons, it may be costly to remediate such a breach and our reputation could be harmed.
If the security of personal and confidential or sensitive user information that we or some of our partners maintain and store is breached, or otherwise accessed by unauthorized persons, it may be costly to remediate such a breach and our reputation could be harmed.
Risks Related to Our Brand, Products and Operations If we fail to retain existing users or add new users, or if our users decrease their level of engagement with our products or do not convert to paying users, our revenue, financial results and business may be significantly harmed.
Risks Related to Our Brands, Products and Operations If we fail to retain existing users or add new users, or if our users decrease their level of engagement with our products or do not convert to paying users, our revenue, financial results and business may be significantly harmed.
Risk Facto rs You should carefully consider the following risks and all of the other information set forth in this Annual Report, including without limitation “Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes in “Item 8—Financial Statements and Supplementary Data.” The following risk factors have been organized by category for ease of use; however, many of the risks may have impacts in more than one category.
Ri sk Factors You should carefully consider the following risks and all of the other information set forth in this Annual Report, including without limitation “Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes in “Item 8—Financial Statements and Supplementary Data.” The following risk factors have been organized by category for ease of use; however, many of the risks may have impacts in more than one category.
The accelerated payments required in such circumstances will be calculated by reference to the present value (at a discount rate equal to the lesser of (i) 6.5% per annum and (ii) one year LIBOR (or its successor rate) plus 100 basis points) of all future payments that holders of Common Units or other recipients would have been entitled to receive under the tax receivable agreement, and such accelerated payments and any other future payments under the tax receivable agreement will utilize certain valuation assumptions, including that Bumble Inc. will have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the tax receivable agreement and sufficient taxable income to fully utilize any remaining net operating losses subject to the tax receivable agreement on a straight line basis over the shorter of the statutory expiration period for such net operating losses or the five-year period after the early termination or change of control.
The accelerated payments required in such circumstances will be calculated by reference to the present value (at a discount rate equal to the lesser of (i) 6.5% per annum and (ii) the Secured Overnight Financing Rate plus 100 basis points) of all future payments that holders of Common Units or other recipients would have been entitled to receive under the tax receivable agreement, and such accelerated payments and any other future payments under the tax receivable agreement will utilize certain valuation assumptions, including that Bumble Inc. will have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the tax receivable agreement and sufficient taxable income to fully utilize any remaining net operating losses subject to the tax receivable agreement on a straight line basis over the shorter of the statutory expiration period for such net operating losses or the five-year period after the early termination or change of control.
If any of our employees were to engage in or be accused of misconduct, or if we were to fail to properly address misconduct, particularly behavior or actions that are 24 inconsistent with our mission-driven culture, we could be exposed to regulatory scrutiny or legal liability, our business and reputation could be materially adversely affected, and we could fail to retain key employees.
If any of our employees were to engage in or be accused of misconduct, or if we were to fail to properly address misconduct, particularly behavior or actions that are inconsistent with our mission-driven culture, we could be exposed to regulatory scrutiny or legal liability, and our business and reputation could be materially adversely affected.
For example, several countries in the European Union have proposed or enacted taxes applicable to digital services, which includes business activities on social media platforms and online marketplaces, and would likely apply to our business. Many questions remain about the enactment, form and application of these digital services taxes.
In addition, several countries in the European Union have proposed or enacted taxes applicable to digital services, which includes business activities on social media platforms and online marketplaces, and would likely apply to our business. Many questions remain about the enactment, form and application of these digital services taxes.
For example, controlled companies: • are not required to have a Board that is composed of a majority of “independent directors,” as defined under Nasdaq rules; • are not required to have a compensation committee that is composed entirely of independent directors; and • are not required to have director nominations be made, or recommended to the full Board of Directors, by its independent directors or by a nominations committee that is composed entirely of independent directors.
For example, controlled companies: (1) are not required to have a Board that is composed of a majority of “independent directors,” as defined under Nasdaq rules; (2) are not required to have a compensation committee that is composed entirely of independent directors; and (3) are not required to have director nominations be made, or recommended to the full Board of Directors, by its independent directors or by a nominations committee that is composed entirely of independent directors.
Such new regulations, 34 or changes to existing regulations, could increase the cost of our operations and materially adversely affect our business, financial condition and results of operations. We are subject to taxation related risks in multiple jurisdictions. We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions.
Moreover, new regulations, or changes to existing regulations, could increase the cost of our operations and materially adversely affect our business, financial condition and results of operations. We are subject to taxation related risks in multiple jurisdictions. We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions.
There are a variety of laws and regulations, some of which have been adopted in recent years, aimed at protecting children using the internet, such as Article 8 of the GDPR, the California Age Appropriate Design Code Act and the EU Digital Services Act.
There are a variety of laws and regulations, some of which have been adopted in recent years, aimed at protecting children using the internet, such as Article 8 of the GDPR, the EU Digital Services Act, the UK Online Safety Act and the California Age-Appropriate Design Code Act.
For additional information see “—In certain cases, payments under the tax receivable agreement may be accelerated and/or significantly exceed the actual benefits Bumble Inc. realizes in respect of the tax attributes subject to the tax receivable agreement.”, “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations” and Note 6, Payable to Related Parties Pursuant to a Tax Receivable Agreement , to our consolidated financial statements included in Part II, “Item 8—Financial Statements and Supplementary Data” of this Annual Report.
For additional information see “—In certain cases, payments under the tax receivable agreement may be accelerated and/or significantly exceed the actual benefits Bumble Inc. realizes in respect of the tax attributes subject to the tax receivable agreement.”, “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations and Contingencies” and Note 5, Payable to Related Parties Pursuant to a Tax Receivable Agreement , to our consolidated financial statements included in Part II, “Item 8—Financial Statements and Supplementary Data” of this Annual Report.
Facebook, Apple and Google have broad discretion to change their terms and conditions in ways that could limit, eliminate or otherwise interfere with our ability to use Facebook, Apple or Google as a registration method or to allow Facebook, Apple or Google to use such data to gain a competitive advantage.
Facebook, Apple and other platforms such as Google have broad discretion to change their terms and conditions in ways that could limit, eliminate or otherwise interfere with our ability to use them as a registration method or to allow them to use such data to gain a competitive advantage.
In addition, as of the date of this Annual Report, the Pre-IPO Common Unitholders (which include our Sponsor and our Founder) own approximately 31% of the Common Units.
In addition, as of the date of this Annual Report, the Pre-IPO Common Unitholders (which include our Sponsor and our Founder) own approximately 27% of the Common Units.
Bumble Inc. intends to cause Bumble Holdings to make distributions to holders of its Common Units, including Bumble Inc. and our Pre-IPO Common Unitholders, and Incentive Units in an amount sufficient to cover all applicable taxes at assumed tax rates, payments under the tax receivable agreement and dividends, if any, declared by it.
Bumble Inc. has caused and intends to continue to cause Bumble Holdings to make 34 distributions to holders of its Common Units, including Bumble Inc. and our Pre-IPO Common Unitholders, and Incentive Units in an amount sufficient to cover all applicable taxes at assumed tax rates, payments under the tax receivable agreement and dividends, if any, declared by it.
Office of Foreign Assets Control, that restrict our dealings with certain sanctioned countries, territories, individuals and entities; these laws and regulations are complex, frequently changing, and increasing in number, and may impose additional prohibitions or compliance obligations on our dealings in certain countries and territories; • political unrest, terrorism, war, health and safety epidemics (such as COVID-19) or the threat of any of these events; • breaches or violation of any anti-corruption laws, rules or regulations applicable to our business, including but not limited to the Foreign Corrupt Practices Act of 1977, as amended; and • any failure to comply with any demand by enforcement authorities to access our user data, which could lead to our inability to operate in such country or other punitive acts.
Office of Foreign Assets Control, that restrict our dealings with certain sanctioned countries, territories, individuals and entities; these laws and regulations are complex, frequently changing, and increasing in number, and may impose additional prohibitions or compliance obligations on our dealings in certain countries and territories; • political unrest, terrorism, war, health and safety epidemics (such as COVID-19) or the threat of any of these events; • advisories by the U.S. or other governments regarding usage of our apps in other countries; 18 • breaches or violation of any anti-corruption laws, rules or regulations applicable to our business, including but not limited to the Foreign Corrupt Practices Act of 1977, as amended; and • any failure to comply with any demand by enforcement authorities to access our user data, which could lead to our inability to operate in such country or other punitive acts.
If this were to happen in the case of a significant marketing channel and/or for a significant period of time, our business, financial condition and results of operations could be materially adversely affected. Finally, many users historically registered for (and logged into) the application through their Facebook profiles, their Apple IDs or their Google Account.
If this were to happen in the case of a significant marketing channel and/or for a significant period of time, our business, financial condition and results of operations could be materially adversely affected. Finally, many users historically registered for (and logged into) our applications through their Facebook profiles or their Apple IDs.
This could result in lost revenue, significant expenditures of capital, a delay or loss in market acceptance, and damage to our reputation and brand.
This could result in lost revenue, significant expenditures of capital, a delay or loss in market acceptance, and damage to our reputation and brands.
Unfavorable economic conditions may lead consumers to delay or reduce purchases of our products and consumer demand for our products may not grow as we expect. Fluctuations in inflation may also negatively affect our business, financial condition and results of operations by affecting our expenses, including, but not limited to, employee compensation expenses.
Unfavorable economic conditions may lead consumers to delay or reduce purchases of our products and consumer demand for our products may not grow as we expect. Fluctuations in inflation have negatively affected and may continue to negatively affect our business, financial condition and results of operations by affecting our expenses, including, but not limited to, employee compensation expenses.
Certain index providers have announced restrictions on including companies with multiple class share structures in certain of their indices.
Certain index providers have in the past announced restrictions on including companies with multiple class share structures in certain of their indices.
If we fail to successfully integrate the companies we acquire, we may not realize the benefits expected from the transactions and our business may be harmed. Item 1B. Unresolved Staff Comments None.
If we fail to successfully integrate the companies we acquire, we may not realize the benefits expected from the transactions and our business may be harmed. Item 1B. Un resolved Staff Comments None.
It is possible that a new product could gain rapid scale at the expense of existing brands through harnessing a new technology, or a new or existing distribution channel, creating a new or different approach to connecting people or some other means.
It is possible that a new product could gain rapid scale at the expense of existing brands through harnessing a new technology (such as artificial intelligence), or a new or existing distribution channel, creating a new or different approach to connecting people or some other means.
Based upon certain assumptions, we estimate that if Bumble Inc. had exercised its termination right as of December 31, 2022, the aggregate amount of the early termination payments before application of the discount rate required under the tax receivable agreement would have been approximately $1,043 million. The foregoing number is merely an estimate and the actual payments could differ materially.
Based upon certain assumptions, we estimate that if Bumble Inc. had exercised its termination right as of December 31, 2023, the aggregate amount of the early termination payments before application of the discount rate required under the tax receivable agreement would have been approximately $935.3 million. The foregoing number is merely an estimate and the actual payments could differ materially.
Our efforts to protect our confidential and sensitive data, the data of our users or other personal information we receive, and to minimize undesirable activities on our platform, may also be unsuccessful due to software bugs or other technical malfunctions; employee, contractor, or vendor error or malfeasance, including defects or vulnerabilities in our service providers’ information technology systems or offerings; government surveillance; breaches of physical security of our facilities or technical infrastructure; or other threats that may surface or evolve.
Our efforts to protect our confidential and sensitive data, the data of our users or other personal information we receive, and to minimize undesirable activities on our platform, may also be unsuccessful due to software bugs or other technical malfunctions; employee, contractor, or vendor error or malfeasance, including defects or vulnerabilities in our service 22 providers’ information technology systems or offerings; government surveillance; breaches of physical security of our facilities or technical infrastructure; our or our third-party vendors’ implementation or use of artificial intelligence; or other threats that may surface or evolve.
Furthermore, all of the debt under our Senior Secured Credit Facilities bears interest at variable rates.
Furthermore, all of the debt under our credit facilities bears interest at variable rates.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters is located in leased office space in Austin, Texas and consists of approximately 7,500 square feet. In addition, we lease properties located outside of the United States, including office space in London, Barcelona and Paris and work space in Mexico City, Mumbai, and Sydney.
Biggest changeItem 2. Properties Our corporate headquarters is located in leased office space in Austin, Texas and consists of approximately 7,400 square feet. In addition, we lease properties located outside of the United States, including office space in London, Barcelona and Paris and work space in Mexico City, Mumbai, Sydney and Berlin.
We believe that our facilities are generally adequate for our current anticipated and future use, although we may from time to time lease additional facilities or vacate existing facilities as our operations require.
We believe that our facilities are generally adequate for our current 45 anticipated and future use, although we may from time to time lease additional facilities or vacate existing facilities as our operations require.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

9 edited+17 added−13 removed1 unchanged
Biggest changeThe 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 which 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.
Biggest changeProceedings Related to the September 2021 Secondary Public Stock Offering (the “SPO”) 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 asserting claims under the U.S. federal securities laws that the Registration Statement and prospectus used for the SPO 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; 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.
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 October 2023, the court denied defendants’ motion to dismiss the consolidated complaint.
For additional information, refer to Note 20, Commitments and Contingencies , within the audited consolidated financial statements included in “Item 8―Financial Statements and Supplementary Data” in this Annual Report. Item 4. Mine Saf ety Disclosures Not applicable. 50
For additional information, refer to Note 19, Commitments and Contingencies , within the audited consolidated financial statements included in “Item 8―Financial Statements and Supplementary Data” in this Annual Report.
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.
Litigation Related to the Illinois Biometric Information Privacy Act (the “BIPA”) In late 2021 and early 2022, four putative class action lawsuits were filed against the Company alleging that certain features of the Badoo or Bumble apps violate the BIPA.
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.
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.
As of December 31, 2022, management has assessed that provisions of $20.5 million are our best estimate of any probable future obligation, including legal costs incurred to date and expected to be incurred up to completion, for the ongoing litigations.
As of December 31, 2023, management has assessed that provisions of $65.8 million are our best estimate of any probable future obligation, including legal costs incurred to date and expected to be incurred up to completion, for the ongoing litigations. This provision includes amounts accrued in connection with the litigation related to the BIPA and mass arbitrations described above.
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 William B.
The complaint seeks unspecified damages; rescission of certain employment agreements between the individual defendants and the Company, disgorgement from defendants of any improperly or unjustly obtained profits or benefits; an award of costs and disbursements, including reasonable attorneys’ fees; punitive damages; pre- and post-judgment interest, and that the Company be directed to take action to reform its corporate governance and internal procedures.
The Sanchez shareholder derivative complaint, filed in January 2023, asserts claims for breach of fiduciary duty and unjust enrichment against, among others, management, our Board of Directors, and Blackstone based on the same allegations and events described in the class action complaint.
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.
Plaintiffs in these lawsuits seek statutory damages, compensatory damages, attorneys’ fees, injunctive relief, and (in one action) punitive damages.
Each of 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.
Removed
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.
Added
These matters are subject to inherent uncertainties and it is possible that an unfavorable outcome of one or more of these legal proceedings or other contingencies could have a material impact on the business, financial condition, or results of operations of the Company.
Removed
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. 49 In January 2022, a purported class action complaint, UA Local 13 Pension Fund v.
Added
The parties in some of these lawsuits have filed motions with the court on procedural issues and some of the lawsuits have been narrowed. The parties have engaged in preliminary settlement discussions and an agreement in principle has been reached. An accrual has been made based on the probable and estimable loss.
Removed
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.
Added
In February 2024, an additional class action lawsuit was filed in Illinois alleging that certain features of Bumble app violates BIPA. This case is early stage and the Company cannot predict at this point the length of time that this matter will be ongoing, the outcome or the liability, if any, which may arise therefrom.
Removed
The complaint seeks unspecified damages and an award of costs and expenses, including reasonable attorneys’ fees, as well as equitable relief. The Company believes that the allegations contained in the complaint are without merit and intends to defend the complaint vigorously.
Added
In August 2023, the Company received over 17,000 pre-arbitration demands regarding Bumble’s alleged violation of BIPA. The Company is evaluating the demands and 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.
Removed
Five 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.
Added
The Glover-Mott shareholder derivative complaint was filed in April 2022 in federal court. The Michael Schirano shareholder derivative complaint was filed in May 2023 in federal court. The United States District Court for the District of Delaware ordered the two actions consolidated in August 2023 under the caption In Re Bumble Inc. Stockholder Derivative Litigation.
Removed
The Glover-Mott shareholder derivative complaint, filed in April 2022, alleges a breach of fiduciary duty against management and our Board of Directors based on the same allegations and events described in the class action complaint.
Added
An amended consolidated complaint was filed in August 2023 alleging violations of Section 14(a) of the Exchange Act, Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and Section 29(b) of the Exchange Act, as well as for breach of fiduciary duty, waste, and unjust enrichment against, among others, management, our Board of Directors and Blackstone.
Removed
Federman Irrevocable Trust shareholder derivative complaint, filed in May 2022, alleges violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, aiding and abetting breach of duty and gross mismanagement based on misstatements or omissions in the Company’s April 2022 Proxy Statement concerning alleged deficiencies in the Company’s risk management and internal controls which allegedly led to disclosure deficiencies in the SPO documents.
Added
Two federal court shareholder derivative complaints 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.
Removed
The complaint seeks a declaration that the individual defendants breached their fiduciary duties, aided and abetted breach of fiduciary duty, were unjustly enriched, grossly mismanaged the Company and violated the federal securities laws; an order that the individual defendants are jointly and severally liable for all damages; an order requiring the individual defendants to remit their salaries and compensation to the Company for the period of breach; unspecified equitable and injunctive relief; and costs and disbursements, including reasonable attorneys’, consultants’ and experts’ fees.
Added
In August 2023, Bumble received litigation demands from (i) 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 and (ii) counsel representing the purported Bumble shareholder who filed the voluntarily dismissed Dana Messana derivative action in the U.S.
Removed
The Dana Messana shareholder derivative complaint, filed in September 2022, alleges violation of Section 10(b) of the Exchange Act, breach of fiduciary duty against management and the Board, aiding and abetting breach of fiduciary duty, unjust enrichment, and waste of corporate assets based on the same allegations and events described in the SPO class action complaint.
Added
District Court for the District of Delaware. Both litigation demands are 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.
Removed
The complaint seeks unspecified damages; an order that the individual defendants are jointly and severally liable for all damages; an order for imposition of a constructive trust on any profits and unjust enrichments received by the individual defendants through unlawful conduct; and an award of costs and disbursements, including reasonable attorneys’, accountants’, and experts’ fees.
Added
The letters demand, among other things, that Bumble’s Board undertake an independent investigation into alleged legal 46 violations, and that Bumble commence a civil action to pursue related claims against any individuals who allegedly harmed Bumble. In November 2023, Bumble formed a Special Litigation Committee (“SLC”) to investigate the claims at-issue in the In Re Bumble Inc.
Removed
The complaint seeks unspecified damages; an order that the defendants are jointly and severally liable for all damages; disgorgement from defendants of any profits, benefits, and other unjust gains from misconduct; and an award of costs and disbursements, including attorneys’ fees, accountants’ fees, and experts’ fees.
Added
Stockholder Derivative Litigation pending in the United States District Court for the District of Delaware and Delaware Court of Chancery, as well as the William B. Federman Irrevocable Trust and Dana Messana litigation demands.
Removed
The City of Vero Beach Police Officers’ Retirement Trust Fund derivative complaint, filed in February 2023, asserts claims for breach of fiduciary duty and unjust enrichment against, among others, management, our Board of Directors, and Blackstone based on the same allegations and events described in the class action complaint.
Added
In January 2024, the Delaware Court of Chancery entered an order staying the litigation for 180 days while the SLC investigation is ongoing, and the United States District Court for the District of Delaware so-ordered a stipulation similarly staying the litigation until July 15, 2024 while the SLC investigation is ongoing.
Removed
This provision 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.
Added
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.
Added
Proceedings Related to the California Unruh Civil Rights Act Between June 2023 and August 2023, the Company received over 20,000 pre-arbitration demands or demands for arbitration regarding Bumble’s alleged violation of California’s Unruh Civil Rights Act as a result of its “women message first” feature.
Added
We agreed to enter into mediations and, as a result, the arbitrations were stayed pending resolution of the mediations. The mediations concluded successfully, and the Company has made, or is negotiating the terms pursuant to which it anticipates making, settlement offers to each of the individual claimants based on the outcomes of the mediations.
Added
Although the Company expects that most claimants will accept the settlement offers and that most demands will be withdrawn and dismissed, certain claimants who reject the settlement offers may continue to prosecute their demands.
Added
The Company cannot predict at this time the number of claimants who will continue to prosecute their demands and thus cannot predict at this time the outcome or liability that may result from any such continued arbitrations. For the year ended December 31, 2023, we recorded approximately $20.3 million in costs in connection with the aforementioned matters.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+8 added−1 removed5 unchanged
Biggest changeData for the Nasdaq Composite Index and the Nasdaq CTA Internet Index assume reinvestment of dividends. 52 The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our Class A common stock. Item 6. R e served 53
Biggest changeData for the Nasdaq Composite Index and the Nasdaq CTA Internet Index assume an initial investment of $100 at market close on February 11, 2021 and the reinvestment of dividends. 49 The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our Class A common stock.
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A common stock began trading on the Nasdaq Global Select Market under the symbol "BMBL" on February 11, 2021. Prior to that date, there was no public trading market for our Class A common stock.
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A common stock began trading on the Nasdaq Global Select Market under the symbol “BMBL” on February 11, 2021. Prior to that date, there was no public trading market for our Class A common stock.
There is no established public trading market for our Class B common stock. Holders of Record As of January 31, 2023, there were 67 registered holders of our Class A common stock and 20 registered holders of our Class B common stock.
There is no established public trading market for our Class B common stock. Holders of Record As of January 31, 2024, there were 63 registered holders of our Class A common stock and 20 registered holders of our Class B common stock.
Removed
Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None.
Added
Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities In May 2023, we announced that our Board of Directors had approved a share repurchase program of up to $150.0 million of our outstanding Class A common stock.
Added
On November 7, 2023, the Company announced an increase in the share repurchase program authorized amount from $150.0 million to $300.0 million.
Added
In December 2023, the Company and Bumble Holdings entered into an agreement with Blackstone in a private transaction under the Company’s existing share repurchase program, whereby the Company agreed to repurchase 4.0 million shares of its Class A common stock beneficially owned by Blackstone and Bumble Holdings agreed to repurchase from Blackstone 3.2 million Common Units, which are exchangeable for shares of Class A common stock on a one-for-one basis, for an aggregate purchase price of $100 million.
Added
The program had $143 million remaining as of December 31, 2023.
Added
Share repurchases under the program will be made on a discretionary basis from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions in compliance with Rule 10b-18 under the Exchange Act or other means, including through Rule 10b5-1 trading plans.
Added
The share repurchase program does not have an expiration date and may be suspended or discontinued at any time. 48 The following table sets forth purchases by the Company of its Class A common stock during the year ended December 31, 2023 under this publicly announced share repurchase program.
Added
Period (a) Total Number of Shares Purchased (b) Average Price Paid Per Share (1) (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs (2) October 1 - October 31, 2023 — $ — — $ 129,110,016 November 1 - November 30, 2023 2,500,000 14.45 2,500,000 242,980,726 December 1 - December 31, 2023 (3) 7,204,247 13.90 7,204,247 142,860,371 Total 9,704,247 $ 14.04 9,704,247 $ 142,860,371 (1) Average price paid per share includes costs associated with the repurchases (i.e. broker commissions, etc.).
Added
(2) Represents the approximate dollar value of shares of Class A common stock that remained available for repurchase as of December 31, 2023. (3) Includes 3,192,146 Common Units, which are exchangeable for shares of Class A common stock on a one-for-one basis, repurchased from Blackstone by Bumble Holdings.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

119 edited+60 added−81 removed60 unchanged
Biggest changeOur effective tax rates will vary depending on the relative proportion of foreign to domestic income, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws. 61 Results of Operations The following table sets forth our consolidated statement of operations information for the periods presented: Successor Predecessor (in thousands) Year Ended December 31, 2022 Year Ended December 31, 2021 Period from January 29, through December 31, 2020 Period from January 1, through January 28, 2020 Revenue $ 903,503 $ 760,910 $ 539,546 $ 39,990 Operating costs and expenses: Cost of revenue 249,490 205,171 143,628 10,790 Selling and marketing expense 249,269 211,711 152,588 11,157 General and administrative expense 319,300 265,738 181,807 44,907 Product development expense 98,575 105,917 46,994 4,087 Depreciation and amortization expense 89,713 107,056 91,767 408 Total operating costs and expenses 1,006,347 895,593 616,784 71,349 Operating earnings (loss) (102,844 ) (134,683 ) (77,238 ) (31,359 ) Interest income (expense) (24,063 ) (24,574 ) (21,927 ) 50 Other income (expense), net 16,189 3,160 (917 ) (882 ) Income (loss) before income tax (110,718 ) (156,097 ) (100,082 ) (32,191 ) Income tax benefit (provision) (3,406 ) 437,837 (9,411 ) (365 ) Net earnings (loss) (114,124 ) 281,740 (109,493 ) (32,556 ) Net earnings (loss) attributable to noncontrolling interests (34,378 ) (28,075 ) 806 1,917 Net earnings (loss) attributable to Bumble Inc. shareholders / Buzz Holdings L.P. owners / Worldwide Vision Limited shareholders $ (79,746 ) $ 309,815 $ (110,299 ) $ (34,473 ) The following table sets forth our consolidated statement of operations information as a percentage of revenue for the periods presented: Successor Predecessor Year Ended December 31, 2022 Year Ended December 31, 2021 Period from January 29, through December 31, 2020 Period from January 1, through January 28, 2020 Revenue 100.0 % 100.0 % 100.0 % 100.0 % Operating costs and expenses: Cost of revenue 27.6 % 27.0 % 26.6 % 27.0 % Selling and marketing expense 27.6 % 27.8 % 28.3 % 27.9 % General and administrative expense 35.3 % 34.9 % 33.7 % 112.3 % Product development expense 10.9 % 13.9 % 8.7 % 10.2 % Depreciation and amortization expense 9.9 % 14.1 % 17.0 % 1.0 % Total operating costs and expenses 111.4 % 117.7 % 114.3 % 178.4 % Operating earnings (loss) (11.4 )% (17.7 )% (14.3 )% (78.4 )% Interest income (expense) (2.7 )% (3.2 )% (4.1 )% 0.1 % Other income (expense), net 1.8 % 0.4 % (0.2 )% (2.2 )% Income (loss) before income tax (12.3 )% (20.5 )% (18.5 )% (80.5 )% Income tax benefit (provision) (0.4 )% 57.5 % (1.7 )% (0.9 )% Net earnings (loss) (12.6 )% 37.0 % (20.3 )% (81.4 )% Net earnings (loss) attributable to noncontrolling interests (3.8 )% (3.7 )% 0.1 % 4.8 % Net earnings (loss) attributable to Bumble Inc. shareholders / Buzz Holdings L.P. owners / Worldwide Vision Limited shareholders (8.8 )% 40.7 % (20.4 )% (86.2 )% 62 The following table sets forth the stock-based compensation expense included in operating costs and expenses: Successor Predecessor (in thousands) Year Ended December 31, 2022 Year Ended December 31, 2021 Period from January 29, through December 31, 2020 Period from January 1, through January 28, 2020 Cost of revenue $ 3,819 $ 3,749 $ 615 $ — Selling and marketing expense 8,064 12,925 2,055 75 General and administrative expense 65,957 62,284 17,318 3,997 Product development expense 33,168 44,952 7,480 84 Total stock-based compensation expense $ 111,008 $ 123,910 $ 27,468 $ 4,156 The following table sets forth our revenue across apps for the periods presented: Successor Predecessor (in thousands) Year Ended December 31, 2022 Year Ended December 31, 2021 Period from January 29, through December 31, 2020 Period from January 1, through January 28, 2020 Bumble App $ 694,329 $ 528,585 $ 334,979 $ 23,256 Badoo App and Other 209,174 232,325 204,567 16,734 Total Revenue $ 903,503 $ 760,910 $ 539,546 $ 39,990 Total revenue was $903.5 million for the year ended December 31, 2022, compared to $760.9 million for the same period in 2021.
Biggest changeResults of Operations The following table sets forth our consolidated statements of operations information for the periods presented: (in thousands) Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Revenue $ 1,051,830 $ 903,503 $ 760,910 Operating costs and expenses: Cost of revenue 307,835 249,490 205,573 Selling and marketing expense 270,380 249,269 211,711 General and administrative expense 221,649 308,855 257,489 Product development expense 130,565 109,020 113,764 Depreciation and amortization expense 68,028 89,713 107,056 Total operating costs and expenses 998,457 1,006,347 895,593 Operating earnings (loss) 53,373 (102,844 ) (134,683 ) Interest income (expense), net (21,534 ) (24,063 ) (24,574 ) Other income (expense), net (26,537 ) 16,189 3,160 Income (loss) before income tax 5,302 (110,718 ) (156,097 ) Income tax benefit (provision) (7,170 ) (3,406 ) 437,837 Net earnings (loss) (1,868 ) (114,124 ) 281,740 Net earnings (loss) attributable to noncontrolling interests 2,345 (34,378 ) (28,075 ) Net earnings (loss) attributable to Bumble Inc. shareholders $ (4,213 ) $ (79,746 ) $ 309,815 57 The following table sets forth our consolidated statements of operations information as a percentage of revenue for the periods presented: Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Revenue 100.0 % 100.0 % 100.0 % Operating costs and expenses: Cost of revenue 29.3 % 27.6 % 27.0 % Selling and marketing expense 25.7 % 27.6 % 27.8 % General and administrative expense 21.1 % 34.2 % 33.8 % Product development expense 12.4 % 12.1 % 15.0 % Depreciation and amortization expense 6.5 % 9.9 % 14.1 % Total operating costs and expenses 94.9 % 111.4 % 117.7 % Operating earnings (loss) 5.1 % (11.4 )% (17.7 )% Interest income (expense), net (2.0 )% (2.7 )% (3.2 )% Other income (expense), net (2.5 )% 1.8 % 0.4 % Income (loss) before income tax 0.5 % (12.3 )% (20.5 )% Income tax benefit (provision) (0.7 )% (0.4 )% 57.5 % Net earnings (loss) (0.2 )% (12.6 )% 37.0 % Net earnings (loss) attributable to noncontrolling interests 0.2 % (3.8 )% (3.7 )% Net earnings (loss) attributable to Bumble Inc. shareholders (0.4 )% (8.8 )% 40.7 % The following table sets forth the stock-based compensation expense included in operating costs and expenses: (in thousands) Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Cost of revenue $ 4,054 $ 3,819 $ 3,749 Selling and marketing expense 9,803 8,064 12,925 General and administrative expense 52,008 63,575 60,535 Product development expense 38,473 35,550 46,701 Total stock-based compensation expense $ 104,338 $ 111,008 $ 123,910 The following table sets forth our revenue across apps for the periods presented: (in thousands) Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Bumble App $ 844,774 $ 694,329 $ 528,585 Badoo App and Other 207,056 209,174 232,325 Total Revenue $ 1,051,830 $ 903,503 $ 760,910 Total revenue was $1,051.8 million for the year ended December 31, 2023, compared to $903.5 million for the same period in 2022.
We believe Adjusted EBITDA provides visibility to the underlying continuing operating performance by excluding the impact of certain expenses, including income tax (benefit) provision, interest (income) expense, depreciation and amortization, stock-based compensation expenses, employer costs related to stock-based compensation, foreign exchange (gain) loss, changes in fair value of contingent earn-out liability, interest rate swaps and investments in equity securities, transaction and other costs, litigation costs net of insurance reimbursements that arise outside of the ordinary course of business, tax receivable agreement liability remeasurement (benefit) expense and impairment loss, as management does not believe these expenses are representative of our core earnings.
We believe Adjusted EBITDA provides visibility to the underlying continuing operating performance by excluding the impact of certain expenses, including income tax (benefit) provision, interest (income) expense, net, depreciation and amortization expense, stock-based compensation expenses, employer costs related to stock-based compensation, foreign exchange (gain) loss, changes in fair value of contingent earn-out liability, interest rate swaps and investments in equity securities, transaction and other costs, litigation costs net of insurance reimbursements that arise outside of the ordinary course of business, tax receivable agreement liability remeasurement (benefit) expense and impairment loss, as management does not believe these expenses are representative of our core earnings.
We define Adjusted EBITDA as net earnings (loss) excluding income tax (benefit) provision, interest (income) expense, depreciation and amortization, stock-based compensation expense, employer costs related to stock-based compensation, foreign exchange (gain) loss, changes in fair value of contingent earn-out liability, interest rate swaps and investments in equity securities, transaction and other costs, litigation costs net of insurance reimbursements that arise outside of the ordinary course of business and tax receivable agreement liability remeasurement (benefit) expense and impairment loss.
We define Adjusted EBITDA as net earnings (loss) excluding income tax (benefit) provision, interest (income) expense, net, depreciation and amortization expense, stock-based compensation expense, employer costs related to stock-based compensation, foreign exchange (gain) loss, changes in fair value of contingent earn-out liability, interest rate swaps and investments in equity securities, transaction and other costs, litigation costs net of insurance reimbursements that arise outside of the ordinary course of business, tax receivable agreement liability remeasurement (benefit) expense and impairment loss.
Some of the limitations are: • Adjusted EBITDA and Adjusted EBITDA margin exclude the recurring, non-cash expenses of depreciation and amortization of property and equipment and definite-lived intangible assets and, although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future; • Adjusted EBITDA and Adjusted EBITDA margin do not reflect changes in, or cash requirements for, our working capital needs; • Adjusted EBITDA and Adjusted EBITDA margin exclude stock-based compensation expense and employer costs related to stock-based compensation, which has been, and will continue to be for the foreseeable future, an important part of how we attract and retain our employees and a significant recurring expense in our business; • Adjusted EBITDA and Adjusted EBITDA margin do not reflect the interest (income) expense or the cash requirements to service interest or principal payments on our indebtedness, and free cash flow does not reflect the cash requirements to service principal payments on our indebtedness; • Adjusted EBITDA and Adjusted EBITDA margin do not reflect income tax (benefit) provision we are required to make; and • Free cash flow and free cash flow conversion do not represent our residual cash flow available for discretionary purposes and does not reflect our future contractual commitments.
Some of the limitations are: • Adjusted EBITDA and Adjusted EBITDA margin exclude the recurring, non-cash expenses of depreciation and amortization of property and equipment and definite-lived intangible assets and, although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future; • Adjusted EBITDA and Adjusted EBITDA margin do not reflect changes in, or cash requirements for, our working capital needs; • Adjusted EBITDA and Adjusted EBITDA margin exclude stock-based compensation expense and employer costs related to stock-based compensation, which has been, and will continue to be for the foreseeable future, an important part of how we attract and retain our employees and a significant recurring expense in our business; • Adjusted EBITDA and Adjusted EBITDA margin do not reflect the interest (income) expense, net or the cash requirements to service interest or principal payments on our indebtedness, and free cash flow does not reflect the cash requirements to service principal payments on our indebtedness; • Adjusted EBITDA and Adjusted EBITDA margin do not reflect income tax (benefit) provision we are required to make; and • Free cash flow and free cash flow conversion do not represent our residual cash flow available for discretionary purposes and does not reflect our future contractual commitments.
Net earnings in the year ended December 31, 2021 was primarily driven by $441.5 million tax benefit related to the reversal of a deferred tax liability due to a restructuring of the Company’s international operations, partly offset by stock-based compensation of $123.9 million, depreciation and amortization of $107.1 million, changes in the fair value of the contingent earn-out liability of $55.9 million and impairment loss of $26.4 million in relation to the white label contracts.
Net earnings in the year ended December 31, 2021 was primarily driven by $441.5 million tax benefit related to the reversal of a deferred tax liability due to a restructuring of the Company’s international operations, partly offset by stock-based compensation of $123.9 million, depreciation and amortization of $107.1 million, changes in the fair value of the contingent earn-out liability of $55.9 million and an impairment loss of $26.4 million in relation to the white label contracts.
The fair value of the reporting unit is based on a discounted cash flow model involving several assumptions. There were no impairment charges recorded for goodwill for the years ended December 31, 2022 and 2021, respectively. Contingent consideration arrangements are recognized at their acquisition date fair value and included as part of purchase price at the acquisition date.
The fair value of the reporting unit is based on a discounted cash flow model involving several assumptions. There were no impairment charges recorded for goodwill for the years ended December 31, 2023, 2022 and 2021, respectively. Contingent consideration arrangements are recognized at their acquisition date fair value and included as part of purchase price at the acquisition date.
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.
Following the $200.0 million aggregate principal payment 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.
This discussion is provided to supplement the descriptions of our accounting policies 71 contained in Note 2, Summary of Selected Significant Accounting Policies, within the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Business Combination We estimate the fair value of assets acquired and liabilities assumed in a business combination.
This discussion is provided to supplement the descriptions of our accounting policies contained in Note 2, Summary of Selected Significant Accounting Policies, within the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Business Combination We estimate the fair value of assets acquired and liabilities assumed in a business combination.
This decrease was primarily driven by a 15% decrease in the number of Badoo App and Other Paying Users to 1.2 million due to the Company’s decision to remove all of its apps from the Apple App Store and Google Play Store in Russia and Belarus in March 2022 and the continued impact of COVID and macroeconomic conditions.
This decrease was primarily driven by a 15.4% decrease in the number of Badoo App and Other Paying Users to 1.2 million due to the Company’s decision to remove all of its apps from the Apple App Store and Google Play Store in Russia and Belarus in March 2022 and the continued impact of COVID and macroeconomic conditions.
We also strongly urge investors to review the reconciliation of net earnings (loss) to Adjusted EBITDA, the computation of Adjusted EBITDA margin as compared to net earnings (loss) margin which is net earnings (loss) as a percentage of revenue, the reconciliation of net cash provided by (used in) operating activities to free cash flow, and the computation of free cash flow conversion as compared to operating cash flow conversion, which is net cash provided by (used in) operating activities as a percentage of net earnings (loss) in each case set forth below.
We also strongly urge investors to review the reconciliation of net earnings (loss) to Adjusted EBITDA, the computation of Adjusted EBITDA margin as compared to net earnings 62 (loss) margin which is net earnings (loss) as a percentage of revenue, the reconciliation of net cash provided by (used in) operating activities to free cash flow, and the computation of free cash flow conversion as compared to operating cash flow conversion, which is net cash provided by (used in) operating activities as a percentage of net earnings (loss) in each case set forth below.
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. 59 • 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 Bumble Inc. • 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 Bumble Inc.
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 Bumble Inc. • 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 Bumble Inc.
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 70 as of the date of the closing of the Incremental 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.
The change was primarily due to a $10.5 million increase in net gain on interest rate swaps, a $3.8 million increase in net foreign currency exchange gains (losses), a $3.4 million loss on extinguishment of long-term debt recognized in 2021 when we repaid $200.0 million of debt in March 2021, partially offset by a $4.2 million loss recognized for the increase in tax receivable agreement liability, and a $1.0 million decrease in fair value of investments in equity securities.
The change was primarily due to a $10.5 million increase in net gains on interest rate swaps, a $3.8 million increase in net foreign currency exchange gains, a $3.4 million loss on extinguishment of long-term debt recognized in 2021 when we repaid $200.0 million of debt in March 2021, partially offset by a $4.2 million loss recognized for the increase in tax receivable agreement liability, and a $1.0 million decrease in fair value of investments in equity securities.
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 in Part I, “Item 1A — Risk Factors." Overview We provide online dating and social networking applications through subscription and in-app purchases of dating products servicing North America, Europe and various other countries around the world.
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 in Part I, “Item 1A — Risk Factors.” Overview We provide online dating and social networking applications through free subscription and in-app purchases of products servicing North America, Europe and various other countries around the world.
Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of revenue. 67 We define free cash flow as net cash provided by (used in) operating activities less capital expenditures. Free cash flow conversion represents free cash flow as a percentage of Adjusted EBITDA.
Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of revenue. We define free cash flow as net cash provided by (used in) operating activities less capital expenditures. Free cash flow conversion represents free cash flow as a percentage of Adjusted EBITDA.
We have determined that it is more likely than not that we will be unable to realize certain tax benefits 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 December 31, 2022.
We have determined that it is more likely than not that we will be unable to realize certain tax benefits 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 December 31, 2023.
Accounting Pronouncements Not Yet Adopted Recently-issued accounting pronouncements that may be relevant to our operations but have not yet been adopted are outlined in Note 2, Summary of Selected Significant Accounting Policies , within the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. 74
Accounting Pronouncements Not Yet Adopted Recently-issued accounting pronouncements that may be relevant to our operations but have not yet been adopted are outlined in Note 2, Summary of Selected Significant Accounting Policies , within the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. 69
Revenue We monetize the Bumble, Badoo and Fruitz apps via a freemium model where the use of our service is free and a subset of our users pay for subscriptions or in-app purchases to access premium features. Subscription revenue is presented net of taxes, refunds and credit card chargebacks.
Revenue We monetize the Bumble, Bumble For Friends, Badoo, Fruitz and Official apps via a freemium model where the use of our service is free and a subset of our users pay for subscriptions or in-app purchases to access premium features. Subscription revenue is presented net of taxes, refunds and credit card chargebacks.
The decrease was primarily due to the repayment of $200.0 million of debt in March 2021, as well as the Company investing surplus funds in money market funds in the fourth quarter of 2022 creating interest income, partially offset by an increase in interest rates on our outstanding debt under the credit agreements.
The decrease was primarily due to the repayment of $200.0 million of debt in March 2021, as well as the Company investing surplus funds in money market funds in the fourth quarter of 2022 creating interest income, partially offset by an increase in interest rates on our outstanding debt under the Credit Agreement.
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 . In connection with the IPO, we adopted the 2021 Omnibus Incentive Plan (the "2021 Omnibus Plan"), which became effective on the date immediately prior to the effective date of the IPO.
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 . In connection with the IPO, we adopted the 2021 Omnibus Incentive Plan (the “2021 Omnibus Plan”), which became effective on the date immediately prior to the effective date of the IPO.
For additional information, see “Item 1A―Risk Factors—Bumble Inc. will be required to pay certain of our pre-IPO owners for most of the benefits relating to tax depreciation or amortization deductions that we may claim as a result of Bumble Inc.’s allocable share of existing tax basis acquired in the IPO, Bumble Inc.’s increase in its allocable share of existing tax basis and anticipated tax basis adjustments we receive in connection with sales or exchanges of Common Units (including Common Units issued upon conversion of vested Incentive Units) in connection with or after the IPO and our utilization of certain tax attributes of the Blocker Companies. ” and “Item 1A―Risk Factors—In certain cases, payments under the tax receivable agreement may be accelerated and/or significantly exceed the actual benefits Bumble Inc. realizes in respect of the tax attributes subject to the tax receivable agreement. ” For additional information, see Note 6, Payable to Related Parties Pursuant to a Tax Receivable Agreement, to our co nsolidated financial statements included in Part II, “Item 8 – Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
For additional information, see “Item 1A―Risk Factors—Bumble Inc. will be required to pay certain of our pre-IPO owners for most of the benefits relating to tax depreciation or amortization deductions that we may claim as a result of Bumble Inc.’s allocable share of existing tax basis acquired in the IPO, Bumble Inc.’s increase in its allocable share of existing tax basis and anticipated tax basis adjustments we receive in connection with sales or exchanges of Common Units (including Common Units issued upon conversion of vested Incentive Units) in connection with or after the IPO and our utilization of certain tax attributes of the Blocker Companies. ” and “Item 1A―Risk Factors—In certain cases, payments under the tax receivable agreement may be accelerated and/or significantly exceed the actual benefits Bumble Inc. realizes in respect of the tax attributes subject to the tax receivable agreement. ” 54 For additional information, see Note 5, Payable to Related Parties Pursuant to a Tax Receivable Agreement, to our consolidated financial statements included in Part II, “Item 8 – Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
For the year ended December 31, 2021, the Company received net proceeds of $2,361.2 million after deducting underwriting discounts and commissions, of which $1,991.6 million was used to redeem shares of Class A common stock and purchase Common Units from our Sponsor and $200 million was used to repay a portion of the outstanding indebtedness under our Incremental Term Loan Facility.
For the year ended December 31, 2021, the Company received net proceeds of $2,361.2 million in our IPO after deducting underwriting discounts and commissions, of which $1,991.6 million was used to redeem shares of Class A common stock and purchase Common Units from our Sponsor and $200.0 million was used to repay a portion of the outstanding indebtedness under our Incremental Term Loan Facility.
These contingent consideration arrangements are classified as liabilities and are remeasured to fair value at each reporting period, with any change in fair value being recognized in “General and administrative expense” in the consolidated statement of operations.
These contingent consideration arrangements are classified as liabilities and are remeasured to fair value at each reporting period, with any change in fair value being recognized in “General and administrative expense” in the consolidated statements of operations.
See Note 6, Payable to Related Parties Pursuant to a Tax Receivable Agreement , for additional information. In connection with the Sponsor Acquisition in January 2020, we entered into a contingent consideration arrangement, consisting of an earn-out payment to the former shareholders of Worldwide Vision Limited of up to $150 million.
See Note 5, Payable to Related Parties Pursuant to a Tax Receivable Agreement , for additional information. In connection with the Sponsor Acquisition in January 2020, we entered into a contingent consideration arrangement, consisting of an earn-out payment to the former shareholders of Worldwide Vision Limited of up to $150.0 million.
Bumble Inc. will consolidate Bumble Holdings on its consolidated financial statements and record a non-controlling interest, related to the Common Units and the Incentive Units held by our pre-IPO owners, on its consolidated balance sheet and statement of operations. Bumble Inc. is a corporation for U.S. federal and state income tax purposes.
Bumble Inc. will consolidate Bumble Holdings on its consolidated financial statements and record a non-controlling interest, related to the Common Units and the Incentive Units held by our pre-IPO owners, on its consolidated balance sheets and statements of operations. Bumble Inc. is a corporation for U.S. federal and state income tax purposes.
In addition to Adjusted EBITDA and Adjusted EBITDA margin, we believe free cash flow and free cash flow conversion provide useful information regarding how cash provided by (used in) operating activities compares to the capital expenditures required to maintain and grow our business, and our available liquidity, after funding such capital expenditures, to service our debt, fund strategic initiatives and strengthen our balance sheet, as well as our ability to convert our earnings to cash.
In addition to Adjusted EBITDA and Adjusted EBITDA margin, we believe free cash flow and free cash flow conversion provide useful information regarding how cash provided by (used in) operating activities compares to the capital expenditures required to maintain and grow our business, and our available liquidity, after funding such capital expenditures, to service our debt, fund strategic initiatives, effectuate discretionary share repurchases and strengthen our balance sheet, as well as our ability to convert our earnings to cash.
During our annual impairment testing for the year ended December 31, 2022, the Company determined that an indefinite long-lived asset was impaired and recognized an impairment charge of $141.0 million in "General and administrative expense" within the accompanying consolidated statement of operations.
During our annual impairment testing for the year ended December 31, 2022, the Company determined that an indefinite long-lived asset was impaired and recognized an impairment charge of $141.0 million in “ General and administrative expense ” within the accompanying consolidated statements of operations.
In addition to paying interest on the outstanding principal under the Senior Secured Credit Facilities, the Borrower is required to pay a commitment fee of 0.50% per annum (which is subject to a decrease to 0.375% per annum based upon the consolidated first lien net leverage ratio of the Borrower and its restricted subsidiaries) to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder.
In addition to paying interest on the outstanding principal under the Credit Agreement, the Borrower is required to pay a commitment fee of 0.50% per annum (which is subject to a decrease to 0.375% per annum based upon the consolidated first lien net leverage ratio of the Borrower and its restricted subsidiaries) to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder.
These challenges may include the prevailing global economic climate, competition from alternative products, lack of appealing product features, enforcement of restrictive payment policies from in-app payment systems provided by Apple and Google, and saturation of the online dating market.
These challenges may include the prevailing global economic climate, competition from alternative products, lack of appealing product features, enforcement of restrictive payment policies from in-app payment systems provided by Apple and Google, and slower rates of growth in the online dating market.
This increase was primarily driven by a 34% increase in the number of Bumble App Paying Users to 2.0 million, partially offset by a 2% decrease in Bumble App ARPPU to $28.90. The increase in Bumble App Revenue was due to higher re-engagement in core markets and international expansion partially offset by fluctuations in foreign currency exchange rates.
This increase was primarily driven by a 33.5% increase in the number of Bumble App Paying Users to 2.0 million, partially offset by a 1.6% decrease in Bumble App ARPPU to $28.90. The increase in Bumble App Revenue was due to higher re-engagement in core markets and international expansion, partially offset by fluctuations in foreign currency exchange rates.
If at the end of the 18 months, or upon early termination, the Company has not reached the $7.1 million in spend, we will be required to pay for the difference between the sum of fees already incurred and the minimum commitment.
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.
The applicable margin for loans under the Revolving Credit Facility is subject to adjustment based upon the consolidated first lien net leverage ratio of the Borrower and its restricted subsidiaries and is subject to reduction after the consummation of our initial public offering.
The applicable margin for loans under the Revolving Credit 65 Facility is subject to adjustment based upon the consolidated first lien net leverage ratio of the Borrower and its restricted subsidiaries and is subject to reduction after the consummation of our IPO.
Key investment areas for our platform include machine learning capabilities, including improving our matching and content moderation technologies; features that enhance trust and safety on our platform; new offerings that enhance user engagement and retention; marketing, data analytics, and personalization capabilities; and new subscription and consumable offerings to drive incremental value to Paying Users.
Key investment areas for our platform include artificial intelligence capabilities, including improving our matching and content moderation technologies; features that enhance trust and safety on our platform; new offerings that enhance user engagement and retention; marketing, and personalization capabilities; and new subscription and consumable offerings to drive incremental value to Paying Users.
During the years ended December 31, 2022 and 2021, we recognized compensation cost related to Exit-Vesting awards of $31.3 million and $26.3 million, which includes the modification of these awards in fiscal year 2022.
During the years ended December 31, 2023, 2022 and 2021, we recognized 55 compensation cost related to Exit-Vesting awards of $13.2 million and $31.3 million and $26.3 million, respectively, which includes the modification of these awards in fiscal year 2022.
The following metrics were calculated excluding paying users and revenue generated from Fruitz: (in thousands, except ARPPU) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Key Operating Metrics Bumble App Paying Users 2,002.2 1,499.8 1,142.1 Badoo App and Other Paying Users 1,179.7 1,394.1 1,363.4 Total Paying Users 3,181.9 2,893.9 2,505.5 Bumble App Average Revenue per Paying User $ 28.90 $ 29.37 $ 26.14 Badoo App and Other Average Revenue per Paying User $ 13.06 $ 13.13 $ 12.66 Total Average Revenue per Paying User $ 23.03 $ 21.55 $ 18.81 Key Factors Affecting our Performance Our results of operations and financial condition have been, and will continue to be, affected by a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in Part I, “Item 1A—Risk Factors. ” Growth in Monetization Our apps monetize via a freemium model where the use of our service is free and a subset of our users pay for subscriptions or in-app purchases to access premium features.
(in thousands, except ARPPU) Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Key Operating Metrics Bumble App Paying Users 2,517.4 2,002.2 1,499.8 Badoo App and Other Paying Users 1,203.3 1,179.7 1,394.1 Total Paying Users 3,720.7 3,181.9 2,893.9 Bumble App Average Revenue per Paying User $ 27.97 $ 28.90 $ 29.37 Badoo App and Other Average Revenue per Paying User $ 12.70 $ 13.06 $ 13.13 Total Average Revenue per Paying User $ 23.03 $ 23.03 $ 21.55 Key Factors Affecting our Performance Our results of operations and financial condition have been, and will continue to be, affected by a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in Part I, “Item 1A—Risk Factors.” Growth in Monetization Our apps monetize via a freemium model where the use of our service is free and a subset of our users pay for subscriptions or in-app purchases to access premium features.
Borrowings under the Senior Secured Credit Facilities bear interest at a rate equal to, at the Borrower’s option, either (i) LIBOR for the relevant interest period, adjusted for statutory reserve requirements (subject to a floor of 0.0% on the Original Term Loan and 0.50% on the Incremental Term Loan), plus an applicable margin or (ii) a base rate equal to the highest of (a) the rate of interest in effect as last quoted by the Wall Street Journal as the “Prime Rate” in the United States, (b) the federal funds effective rate plus 0.50% and (c) adjusted LIBOR for an interest period of one month plus 1.00% (subject to a floor of 0.00% per annum), in each case, plus an applicable margin.
Borrowings under the Credit Agreement bear interest at a rate equal to, at the Borrower’s option, either (i) LIBOR prior to March 31, 2023 and Adjusted Term SOFR beginning March 31, 2023 for the relevant interest period, adjusted for statutory reserve requirements (subject to a floor of 0.0% on the Original Term Loan and loans under the Revolving Credit Facility and 0.50% on the Incremental Term Loan), plus an applicable margin or (ii) a base rate equal to the highest of (a) the rate of interest in effect as last quoted by the Wall Street Journal as the “Prime Rate” in the United States, (b) the federal funds effective rate plus 0.50% and (c) adjusted LIBOR prior to April 1, 2023 and Adjusted Term SOFR beginning April 1, 2023, for an interest period of one month plus 1.00% (subject to a floor of 0.00% per annum), in each case, plus an applicable margin.
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.
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.
Macroeconomic Conditions The prevailing global economic climate, Russia-Ukraine conflict and other macroeconomic conditions, including but not limited to slower growth or economic recession, changes to fiscal and monetary policy and exchange rate fluctuations have adversely affected and may continue to adversely impact our business as consumers face greater pressure on disposable income.
Macroeconomic Conditions The prevailing global economic climate, the conflicts in Eastern Europe and the Middle East, and other macroeconomic conditions, including but not limited to slower growth or economic recession, changes to fiscal and monetary policy, and exchange rate fluctuations have adversely affected and may continue to adversely impact our business as consumers face greater pressure on disposable income.
In addition, a $23.2 million increase in personnel-related expenses, a $7.8 million increase in professional and transaction costs, a $4.6 million increase in insurance expenses, and a $2.5 million increase in other overhead expenses also contributed to the increase. These increases were partially offset by a decline of $103.1 million in the fair value of the contingent earn-out liabilities.
In addition, a $21.7 million increase in personnel-related expenses, a $7.8 million increase in professional and transaction costs and a $4.6 million increase in insurance expenses. These increases were partially offset by a decline of $103.1 million in the fair value of the contingent earn-out liabilities.
The increase in interest rates by the Federal Reserve and overall market conditions have led to significant strengthening of the U.S. dollar against other global currencies in 2022. A strong U.S. dollar has impacted and may continue to impact our revenue and earnings in 2023.
The increase in interest rates by the Federal Reserve and overall market conditions led to significant strengthening of the U.S. dollar against other global currencies in 2022. Throughout 2023, the U.S. dollar experienced volatility, which stabilized in the fourth quarter. A strong U.S. dollar has impacted and may impact our revenue and earnings in the future.
Indebtedness Senior Secured Credit Facilities In connection with the Sponsor Acquisition, in January 2020, we entered into the Original Term Loan Facility in an original aggregate principal amount of $575.0 million and the Revolving Credit Facility in an aggregate principal amount of up to $50.0 million.
Indebtedness Senior Secured Credit Facilities In connection with the Sponsor Acquisition, in January 2020, we entered into a credit agreement (the “Credit Agreement”) providing for (i) a term loan facility in an original aggregate principal amount of $575.0 million (the “Original Term Loan Facility”) and (ii) a revolving facility in an aggregate principal amount of up to $50.0 million.
Overview of Financial Results For the year ended December 31, 2022, the year ended December 31, 2021, the period from January 29 through December 31, 2020 and the period from January 1 through January 28, 2020, we generated: • Total Revenue of $903.5 million, $760.9 million, $539.5 million and $40.0 million, respectively; • Bumble App Revenue of $694.3 million, $528.6 million, $335.0 million and $23.3 million, respectively; • Badoo App and Other Revenue of $209.2 million, $232.3 million, $204.6 million and $16.7 million, respectively; • Net Earnings (Loss) of $(114.1) million, $281.7 million, $(109.5) million and $(32.6) million, respectively, representing Net Earnings (Loss) Margins of (12.6)%, 37.0%, (20.3)% and (81.4)%, respectively; • Adjusted EBITDA of $226.9 million, $207.2 million, $143.4 million and $9.4 million, respectively, representing Adjusted EBITDA Margins of 25.1%, 27.2%, 26.6% and 23.4%, respectively; • Net cash provided by (used in) operating activities of $132.9 million, $104.8 million, $53.1 million and $(3.3) million, respectively, and Operating Cash Flow Conversion of, (116.5)%, 37.2%, (48.5)% and 10.2%, respectively; and • Free Cash Flow of $116.6 million, $91.2 million, $42.4 million and $(4.4) million, respectively, representing Free Cash Flow Conversion of 51.4%, 44.0%, 29.6% and (46.4)%, respectively. 54 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 Metrics We regularly review a number of metrics, including the following key operating metrics, to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions.
Overview of Financial Results For the years ended December 31, 2023, 2022 and 2021, we generated: • Total Revenue of $1,051.8 million, $903.5 million and $760.9 million, respectively; • Bumble App Revenue of $844.8 million, $694.3 million and $528.6 million, respectively; • Badoo App and Other Revenue of $207.1 million, $209.2 million and $232.3 million, respectively; • Net Earnings (Loss) of $(1.9) million, $(114.1) million and $281.7 million, respectively, representing Net Earnings (Loss) Margins of (0.2)%, (12.6)% and 37.0%, respectively; • Adjusted EBITDA of $275.6 million, $226.9 million and $207.2 million, respectively, representing Adjusted EBITDA Margins of 26.2%, 25.1% and 27.2%, respectively; • Net cash provided by operating activities of $182.1 million, $132.9 million and $104.8 million, respectively, and Operating Cash Flow Conversion of *, (116.5)% and 37.2%, respectively; and • Free Cash Flow of $167.2 million, $116.6 million and $91.2 million, respectively, representing Free Cash Flow Conversion of 60.7%, 51.4% and 44.0%, respectively. * Not meaningful 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 Metrics We regularly review a number of metrics, including the following key operating metrics, to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions.
The timing and amount of such payments, that we may be required to make, is not reflected in the contractual obligations table set forth above as the payment to the former shareholders of Worldwide Vision Limited is dependent upon the achievement of a specified return on invested capital by our Sponsor and our payment to Fruitz is dependent upon the achievement of certain net revenue targets.
The timing and amount of such payments, that we may be required to make, is not reflected in the contractual obligations table set forth above as the payment to the former shareholders of Worldwide Vision Limited is dependent upon the achievement of a specified return on invested capital by our Sponsor. See Note 11, Fair Value Measurements, for additional information.
See Note 20, Commitments and Contingencies , to the audited consolidated financial statements included in “Item 8―Financial Statements and Supplementary Data.” (3) Represents foreign exchange (gain) loss due to foreign currency transactions. (4) Represents fair value loss (gain) on interest rate swaps.
See Note 19, Commitments and Contingencies , to the audited consolidated financial statements included in “Item 8―Financial Statements and Supplementary Data.” (3) Represents foreign exchange (gain) loss due to foreign currency transactions.
(2) Represents certain litigation costs and insurance proceeds associated with pending litigations or settlements of litigation. 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.
(2) Represents certain litigation costs and insurance proceeds associated with pending litigations or settlements of litigation. Includes amounts accrued with respect to the litigation related to the Biometric Information Privacy Act, the mass arbitrations and the Company’s class action lawsuit related to the secondary public stock offering, representing management’s then-current estimated probable loss for this matter.
The tax benefit of $437.8 million recorded in the year ended December 31, 2021 includes a $441.5 million tax benefit related to the reversal of a net deferred tax liability due to the restructuring of our international operations.
(8) Net earnings (loss) margin for the year ended December 31, 2021 includes a $441.5 million tax benefit related to the reversal of a deferred tax liability due to a restructuring of the Company’s international operations.
Income tax provision Successor Predecessor (in thousands, except percentages) Year Ended December 31, 2022 Year Ended December 31, 2021 Period from January 29, through December 31, 2020 Period from January 1, through January 28, 2020 Income tax benefit (provision) $ (3,406 ) $ 437,837 $ (9,411 ) $ (365 ) Effective income tax rate (3.1 )% 280.5 % (9.4 )% (1.1 )% For further detail of income tax matters, see Note 5, Income Taxes , within the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
Income tax provision (in thousands, except percentages) Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Income tax benefit (provision) $ (7,170 ) $ (3,406 ) $ 437,837 Effective income tax rate 135.2 % (3.1 )% 280.5 % For further detail of income tax matters, see Note 4, Income Taxes , within the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
Assuming no material changes in the relevant tax law, and that we earn sufficient taxable income to realize all tax benefits that are subject to the tax receivable agreement, we expect future payments under the tax receivable agreement related to the Offering Transactions to aggregate to $672.8 million and to range over the next 15 years from approximately $8.8 million to $57.3 million per year and decline thereafter.
Assuming no material changes in the relevant tax law, and that we earn sufficient taxable income to realize all tax benefits that are subject to the tax receivable agreement, we expect future payments under the tax receivable agreement related to the Offering Transactions and subsequent activity through December 31, 2023 to aggregate to $721.0 million and to range over the next 15 years from approximately $16.7 million to $73.6 million per year and decline thereafter.
Reorganization Transactions Prior to the completion of the IPO, we undertook certain reorganization transactions (the “Reorganization Transactions”) such that Bumble Inc. is now a holding company, and its sole material asset is a controlling equity interest in Bumble Holdings.
Bumble paid the costs associated with the sales of shares by the selling stockholders, net of the underwriting discounts. Reorganization Transactions Prior to the completion of the IPO, we undertook certain reorganization transactions (the “Reorganization Transactions”) such that Bumble Inc. is now a holding company, and its sole material asset is a controlling equity interest in Bumble Holdings.
Cost of revenue Cost of revenue consists primarily of in-app purchase fees due on payments processed through the Apple App Store and Google Play Store. Purchases on Android outside of the United States and United Kingdom, mobile web and desktop have additional payment methods, such as credit card or via telecom providers.
Revenue from partnerships is recognized according to the contractual terms of the partnership. Cost of revenue Cost of revenue consists primarily of in-app purchase fees due on payments processed through the Apple App Store and Google Play Store. Purchases on Android, mobile web and desktop may have additional payment methods, such as credit card or via telecom providers.
Investing in Growth While Driving Long-Term Profitability Our mission-driven strategy ensures that values guide our business decisions and our business performance enables us to drive impact through investment in technology, marketing and product innovation, balancing growth with long-term margins.
We may also see a lower propensity to pay as we enter certain new markets. Investing in Growth While Driving Long-Term Profitability Our mission-driven strategy ensures that values guide our business decisions and our business performance enables us to drive impact through investment in technology, marketing and product innovation, balancing growth with long-term margins.
The following table reconciles our non-GAAP financial measures to the most comparable GAAP financial measures for the periods presented: Successor Predecessor (in thousands, except percentages) Year Ended December 31, 2022 Year Ended December 31, 2021 Period from January 29, through December 31, 2020 Period from January 1, through January 28, 2020 Net earnings (loss) $ (114,124 ) $ 281,740 $ (109,493 ) $ (32,556 ) Add back: Income tax (benefit) provision 3,406 (437,837 ) 9,411 365 Interest (income) expense 24,063 24,574 21,927 (50 ) Depreciation and amortization 89,713 107,056 91,767 408 Stock-based compensation expense 111,008 123,910 27,468 336 Employer costs related to stock-based compensation (1) 2,054 2,438 — — Litigation costs, net of insurance reimbursements (2) 22,734 6,943 (6,008 ) — Foreign exchange (gain) loss (3) (3,679 ) 132 9,525 523 Changes in fair value of interest rate swaps (4) (17,086 ) (6,593 ) 1,586 — Transaction and other costs (5) 5,226 22,491 69,443 40,345 Changes in fair value of contingent earn-out liability (47,134 ) 55,900 27,800 — Changes in fair value of investments 18 (1,100 ) — — Tax receivable agreement liability remeasurement expense (6) 5,332 1,112 — — Impairment loss (7) 145,388 26,431 — — Adjusted EBITDA $ 226,919 $ 207,197 $ 143,426 $ 9,371 Net earnings (loss) margin (8) (12.6 )% 37.0 % (20.3 )% (81.4 )% Adjusted EBITDA margin 25.1 % 27.2 % 26.6 % 23.4 % Net cash provided by (used in) operating activities $ 132,941 $ 104,837 $ 53,069 $ (3,306 ) Less: Capital expenditures (16,333 ) (13,653 ) (10,632 ) (1,045 ) Free Cash Flow $ 116,608 $ 91,184 $ 42,437 $ (4,351 ) Operating cash flow conversion (116.5 )% 37.2 % (48.5 )% 10.2 % Free cash flow conversion 51.4 % 44.0 % 29.6 % (46.4 )% (1) Represents employer portion of Social Security and Medicare payroll taxes domestically, National Insurance contributions in the United Kingdom and comparable costs internationally related to the settlement of equity awards.
The following table reconciles our non-GAAP financial measures to the most comparable GAAP financial measures for the periods presented: (in thousands, except percentages) Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Net earnings (loss) $ (1,868 ) $ (114,124 ) $ 281,740 Add back: Income tax (benefit) provision 7,170 3,406 (437,837 ) Interest (income) expense, net 21,534 24,063 24,574 Depreciation and amortization expense 68,028 89,713 107,056 Stock-based compensation expense 104,338 111,008 123,910 Employer costs related to stock-based compensation (1) 4,535 2,054 2,438 Litigation costs, net of insurance reimbursements (2) 71,918 22,734 6,943 Foreign exchange (gain) loss (3) 2,185 (3,679 ) 132 Changes in fair value of interest rate swaps (4) 13,806 (17,086 ) (6,593 ) Transaction and other costs (5) 2,309 5,226 22,491 Changes in fair value of contingent earn-out liability (29,569 ) (47,134 ) 55,900 Changes in fair value of investments 843 18 (1,100 ) Tax receivable agreement liability remeasurement expense (6) 10,341 5,332 1,112 Impairment loss (7) — 145,388 26,431 Adjusted EBITDA $ 275,570 $ 226,919 $ 207,197 Net earnings (loss) margin (8) (0.2 )% (12.6 )% 37.0 % Adjusted EBITDA margin 26.2 % 25.1 % 27.2 % Net cash provided by operating activities $ 182,086 $ 132,941 $ 104,837 Less: Capital expenditures (14,935 ) (16,333 ) (13,653 ) Free cash flow $ 167,151 $ 116,608 $ 91,184 Operating cash flow conversion * (116.5 )% 37.2 % Free cash flow conversion 60.7 % 51.4 % 44.0 % * Not meaningful (1) Represents employer portion of Social Security and Medicare payroll taxes domestically, National Insurance contributions in the United Kingdom and comparable costs internationally related to the settlement of equity awards.
Secondary Offering On September 15, 2021, the Company completed a secondary offering of 20.7 million shares of Class A common stock on behalf of certain selling stockholders affiliated with Blackstone Inc. (the "Selling Stockholders") at a price of $54.00 per share. This transaction resulted in the issuance of 9.2 million Class A shares for the period ending September 30, 2021.
Secondary Offerings On September 15, 2021, the Company completed a secondary offering of 20.7 million shares of Class A common stock on behalf of certain selling stockholders affiliated with Blackstone (the "Blackstone Selling Stockholders") at a price of $54.00 per share.
Accordingly, the historical results of operations and other financial information set forth in this Annual Report do not include any material provisions for U.S. federal income tax for the period prior to our IPO.
Accordingly, the historical results of operations and other financial information set forth in this Annual Report do not include any material provisions for U.S. federal income tax for the period prior to our IPO. Following our IPO, Bumble Inc. pays U.S. federal and state income taxes as a corporation on its share of Bumble Holdings’ taxable income.
For additional information, see Note 16, Stock-based Compensation, to our consolidated financial statements included in Part II, “Item 8 – Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Components of Results of Operations Our business is organized into a single reportable segment.
For additional information, see Note 15, Stock-based Compensation, to our consolidated financial statements included in Part II, “Item 8 – Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
See “Item 1A―Risk Factors―Risks Related to Ownership of our Class A Common Stock―We incur increased costs and are subject to additional regulations and requirements as a result of becoming a public company, which could lower our profits, make it more difficult to run our business or divert management’s attention from our business.” 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, increases in our share of existing tax basis and adjustments to the tax basis of the assets of Bumble Holdings as a result of sales or exchanges of Common Units (including Common Units issued upon conversion of vested Incentive Units), and our utilization of certain tax attributes of the Blocker Companies (including the Blocker Companies’ allocable share of existing tax basis) and certain other tax benefits related to entering into the 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, increases in our share of existing tax basis and adjustments to the tax basis of the assets of Bumble Holdings as a result of sales or exchanges of Common Units (including Common Units issued upon conversion of vested Incentive Units), and our utilization of certain tax attributes of the Blocker Companies (including the Blocker Companies’ allocable share of existing tax basis) and certain other tax benefits related to entering into the tax receivable agreement.
Based on current projections, we anticipate having sufficient taxable income to be able to realize these tax benefits and have recorded a liability of $394.3 million associated with the tax receivable agreement related to these benefits of which $8.8 million is included in "Other current liabilities." The ability of the deferred tax assets to be realized 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.
Tax benefits we anticipate being able to realize are included in “Accrued expense and other current liabilities.” The ability of the deferred tax assets to be realized 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.
As foreign currency exchange rates change, translation of the statements of operations into U.S. dollars could negatively impact revenue and distort year-over-year comparability of operating results.
As foreign currency exchange rates change, translation of the statements of operations into U.S. dollars could negatively impact revenue and distort year-over-year comparability of operating results. To the extent our ARPPU growth slows, our revenue growth will become increasingly dependent on our ability to increase our Paying Users.
Contractual Obligations and Contingencies The following table summarizes our contractual obligations as of December 31, 2022: Payments due by period Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Total (in thousands) Long-term debt $ 5,750 $ 11,500 $ 615,563 $ — $ 632,813 Operating leases 3,823 5,262 6,859 3,456 19,400 Other 13,861 16,171 — — 30,032 Total $ 23,434 $ 32,933 $ 622,422 $ 3,456 $ 682,245 In connection with the IPO, in February 2021, 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 initial public offering and other tax benefits related to entering into the tax receivable agreement.
Contractual Obligations and Contingencies The following table summarizes our contractual obligations as of December 31, 2023 (in thousands): Payments due by period Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Total Long-term debt $ 5,750 $ 11,500 $ 609,813 $ — $ 627,063 Operating leases 1,412 7,806 6,730 418 16,366 Other 10,673 2,628 — — 13,301 Total $ 17,835 $ 21,934 $ 616,543 $ 418 $ 656,730 In connection with the IPO, in February 2021, 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 decrease was primarily due to the full amortization of the legacy Badoo user base in July 2022 and white label contracts in 2021, which are no longer being amortized. These decreases were partially offset by increases in the amortization of intangibles acquired from the Fruitz acquisition in January 2022.
The decrease in depreciation and amortization expense was primarily due to the full amortization of the legacy Badoo user base in July 2022. These decreases were partially offset by increases in the amortization of intangibles acquired from the Official acquisition in April 2023.
We evaluate our critical estimates and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions. The critical accounting estimates, assumptions, and judgments that we believe to have the most significant impact on our consolidated financial statements are described below.
The critical accounting estimates, assumptions, and judgments that we believe to have the most significant impact on our consolidated financial statements are described below.
The increase in cash provided by (used in) operating activities for the periods presented was partly offset by changes in assets and liabilities, which were $(34.9) million, $(56.5) million, $9.0 million and $25.1 million in the year ended December 31, 2022, 69 December 31, 2021, the period from January 29, 2020 to December 31, 2020 and the period from January 1, 2020 to January 28, 2020, respectively.
The increase in cash provided by (used in) operating activities for the periods presented was partly offset by changes in assets and liabilities, which increased $8.7 million, decreased $34.9 million and decreased $56.5 million in the years ended December 31, 2023, 2022 and 2021, respectively.
As we expand into certain new geographies, we may see an increase in users who prefer to access premium features through our in-app purchase options rather than through our subscription packages which could impact our ARPPU. We may also see a lower propensity to pay as we enter certain new markets.
Potential risks to our expansion into new geographies will include competition and compliance with foreign laws and regulations. 52 As we expand into certain new geographies, we may see an increase in users who prefer to access premium features through our in-app purchase options rather than through our subscription packages which could impact our ARPPU.
We group assets for purposes of such review at the lowest level for which identifiable cash flows of the asset group are largely independent of the cash flows of the other groups of assets and liabilities.
Recoverability is measured by comparing the carrying amount of an asset group to future undiscounted net cash flows expected to be generated. We group assets for purposes of such review at the lowest level for which identifiable cash flows of the asset group are largely independent of the cash flows of the other groups of assets and liabilities.
Depreciation and amortization expense Depreciation and amortization expense is primarily related to computer equipment, leasehold improvements, furniture and fixtures, developed technology, user base, white label contracts, trademarks and other definite-lived intangible assets. Interest income (expense) Interest income (expense) consists of interest income received on related party loans receivables and interest expense incurred in connection with our long-term debt.
Depreciation and amortization expense Depreciation and amortization expense is primarily related to computer equipment, leasehold improvements, furniture and fixtures, developed technology, user base, white label contracts, trademarks and other definite-lived intangible assets.
Unforeseen events, changes in circumstances and market conditions and material differences in estimates of future cash flows could adversely affect the fair value of our assets and could result in an impairment charge.
If this comparison indicates impairment, the amount of impairment to be recognized is calculated as the difference between the carrying value and the fair value of the asset group. 67 Unforeseen events, changes in circumstances and market conditions and material differences in estimates of future cash flows could adversely affect the fair value of our assets and could result in an impairment charge.
Cash Flow Information The following table summarizes our consolidated cash flow information for the periods presented: Successor Predecessor (in thousands) Year Ended December 31, 2022 Year Ended December 31, 2021 Period from January 29, through December 31, 2020 Period from January 1, through January 28, 2020 Net cash provided by (used in): Operating activities $ 132,941 $ 104,837 $ 53,069 $ (3,306 ) Investing activities (86,053 ) (12,484 ) (2,850,651 ) (1,029 ) Financing activities (14,954 ) 151,486 2,869,428 — Operating activities Net cash provided by (used in) operating activities was $132.9 million for the year ended December 31, 2022, $104.8 million for the year ended December 31, 2021, $53.1 million for the period from January 29, 2020 to December 31, 2020, and $(3.3) million for the period from January 1, 2020 to January 28, 2020.
Cash Flow Information The following table summarizes our consolidated cash flow information for the periods presented: (in thousands) Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Net cash provided by (used in): Operating activities $ 182,086 $ 132,941 $ 104,837 Investing activities (24,755 ) (86,053 ) (12,484 ) Financing activities (198,891 ) (14,954 ) 151,486 Operating activities Net cash provided by operating activities was $182.1 million, $132.9 million and $104.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.
T he Company used $69.7 million (net of cash acquired) for the acquisition of Fruitz for the year ended December 31, 2022 and $2,837.7 million (net of cash acquired) for the Sponsor Acquisition in the period from January 29, 2020 to December 31, 2020.
T he Company used $9.8 million (net of cash acquired) for the acquisition of Official for the year ended December 31, 2023 and $69.7 million (net of cash acquired) for the acquisition of Fruitz for the year ended December 31, 2022 .
We also earn revenue from online advertising and partnerships, which are not a significant part of our business. Online advertising revenue is recognized when an advertisement is displayed. Revenue from partnerships is recognized according to the contractual terms of the partnership.
Revenue from the purchase of in-app features is recognized based on usage and estimated breakage revenue associated with unused in-app purchases. We also earn revenue from online advertising and partnerships, which are not a significant part of our business. Online advertising revenue is recognized when an advertisement is displayed.
Other income (expense), net Successor Predecessor (in thousands, except percentages) Year Ended December 31, 2022 Year Ended December 31, 2021 Period from January 29, through December 31, 2020 Period from January 1, through January 28, 2020 Other income (expense), net $ 16,189 $ 3,160 $ (917 ) $ (882 ) Percentage of revenue 1.8 % 0.4 % (0.2 )% (2.2 )% Other income (expense), net was $16.2 million for the year ended December 31, 2022, compared to $3.2 million for the year ended December 31, 2021.
Other income (expense), net (in thousands, except percentages) Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Other income (expense), net $ (26,537 ) $ 16,189 $ 3,160 Percentage of revenue (2.5 )% 1.8 % 0.4 % Other income (expense), net for the year ended December 31, 2023, decreased by $42.7 million, or 263.9%, as compared to the same period in 2022.
These estimates could also be adversely impacted by changes in federal, state, or local regulations, economic downturns or developments, or other market conditions affecting our industry. 72 During the fourth quarter of the year ended December 31, 2021, the Company determined that an individual definite long-lived asset was impaired and recognized an impairment charge of $26.4 million in "General and administrative expense" within the accompanying consolidated statement of operations.
During the fourth quarter of the year ended December 31, 2021, the Company determined that an individual definite long-lived asset was impaired and recognized an impairment charge of $26.4 million in “ General and administrative expense ” within the accompanying consolidated statements of operations.
The Distribution Financing Transaction In October 2020, we entered into an incremental senior secured term loan facility (the “Incremental Term Loan Facility” and, together with the Initial Term Loan Facility, the “Term Loan Facility”; the Term Loan Facility, together with the Revolving Credit Facility, the “Senior Secured Credit Facilities”) with the same maturity as the Initial Term Loan Facility in an original aggregate principal amount of $275.0 million.
In connection with a transaction whereby we distributed proceeds to our pre-IPO owners and to partially repay a loan from our Founder, in October 2020, we entered into an Incremental term loan facility (the “Incremental Term Loan Facility” and together with the Original Term Loan Facility, the “Senior Secured Credit Facilities”) in an original aggregate principal amount of $275.0 million.
Critical Accounting Policies and Estimates Our consolidated financial statements have been prepared in accordance with GAAP, which often require us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. Our estimates are based on historical experience, current conditions and various other assumptions that we believe to be reasonable under the circumstances.
As of December 31, 2023, our minimum commitment remaining is $8.4 million. 66 Critical Accounting Policies and Estimates Our consolidated financial statements have been prepared in accordance with GAAP, which often require us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures.
In addition, other revenue of $24.3 million for 2022, increased by $11.6 million, or 92% compared to the same period in 2021, primarily due to Fruitz.
The decrease in Badoo App and Other Revenue was also driven by a 0.5% decrease in Badoo and Other ARPPU to $13.06. In addition, other revenue of $24.3 million for 2022, increased by $11.6 million, or 92.1%, compared to the same period in 2021.
Our actual results could differ materially from those discussed in the forward-looking statements.
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.
The Incremental Term Loan provides for additional senior secured term loans with substantially identical terms as the Initial Term Loan Facility (other than the applicable margin). The borrower under the Incremental Term Loan Facility is a wholly owned subsidiary of Bumble Holdings, Buzz Finco L.L.C.
The Incremental Term Loan Facility provides for additional senior secured term loans with substantially identical terms as the Original Term Loan Facility (other than the applicable margin).
For additional information, refer to Note 9, Goodwill and Intangible Assets , within the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
For additional information around the Tax Receivable Agreement, see Note 5, Payable to Related Parties Pursuant to a Tax Receivable Agreement , within the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Selling and marketing expense Successor Predecessor (in thousands, except percentages) Year Ended December 31, 2022 Year Ended December 31, 2021 Period from January 29, through December 31, 2020 Period from January 1, through January 28, 2020 Selling and marketing expense $ 249,269 $ 211,711 $ 152,588 $ 11,157 Percentage of revenue 27.6 % 27.8 % 28.3 % 27.9 % Selling and marketing expense was $249.3 million for the year ended December 31, 2022, compared to $211.7 million the year ended December 31, 2021.
Selling and marketing expense (in thousands, except percentages) Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Selling and marketing expense $ 270,380 $ 249,269 $ 211,711 Percentage of revenue 25.7 % 27.6 % 27.8 % Selling and marketing expense for the year ended December 31, 2023, increased by $21.1 million, or 8.5%, as compared to the same period in 2022 .
General and administrative expense also consists of transaction costs, impairment losses, changes in fair value of contingent earn-out liability, expenses associated with facilities, information technology, external professional services, legal costs, settlement of legal claims, restructuring charges and other administrative expenses.
General and administrative expense also consists of transaction costs, impairment losses, changes in fair value of contingent earn-out liability, expenses associated with facilities, information technology, external professional services, legal costs, settlement of legal claims and accruals for future legal obligations that are deemed probable and estimable, restructuring charges and other administrative expenses. 56 Product development expense Product development expense consists primarily of compensation (including stock-based compensation) and other employee-related costs for personnel engaged in the design, development, testing and enhancement of product offerings and related technology, as well as restructuring charges.
We believe these operational measures are useful in evaluating our performance, in addition to our financial results prepared in accordance with GAAP. Refer to the section “Certain Definitions” at the beginning of this Annual Report for the definitions of our Key Operating Metrics.
We believe these operational measures are useful in evaluating our performance, in addition to our financial results prepared in accordance with GAAP.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+4 added−3 removed1 unchanged
Biggest changeAs foreign currency exchange rates change, translation of th e statements of operations of our international businesses into U.S. dollars affects year-over-year comparability of operating results. The average Euro and British Pound versus the U.S. Dollar exchange rate was 10.9% and 10.0% l ower, respectively, in the year ended December 31, 2022 compared to the year ended December 31, 2021.
Biggest changeOur primary exposure to foreign currency exchange risk is the underlying user’s functional currency other than the U.S. Dollar, primarily the British Pound and Euro. As foreign currency exchange rates change, translation of th e statements of operations of our international businesses into U.S. dollars affects year-over-year comparability of operating results. The average Euro and British Pound versus the U.S.
The effective date for the interest rate swaps is June 30, 2020 and final maturity date is June 30, 2024. The financial impact of the interest rate swaps is to fix the variable interest rate element on $350 million of the long-term debt at a rate of 0.4008%.
The effective date for the interest rate swaps is June 30, 2020 and the final maturity date is June 30, 2024. The financial impact of the interest rate swaps is to fix the variable interest rate element on $350 million of the long-term debt at a rate of 0.4008%.
The expected discontinuation, reform or replacement of LIBOR may result in fluctuating interest rates, or higher interest rates, which could have a material adverse effect on our interest expense.
The discontinuation, reform or replacement of LIBOR may result in fluctuating interest rates, or higher interest rates, which could have a material adverse effect on our interest expense.
With consideration of the financial impact of our interest rate swaps, a hypothetical interest rate increase of 1% would have increased interest expense for the three months ended and year ended December 31, 2022 by $0.7 million and $2.8 million, respectively, based upon the outstanding debt balances and interest rates in effect during this period.
With consideration of the financial impact of our interest rate swaps, a hypothetical interest rate increase of 1% would have increased interest expense for the three months ended and year ended December 31, 2023 by $0.7 million and $2.8 million, respectively, based upon the outstanding debt balances and interest rates in effect during that period.
In July 2017, the UK’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out USD LIBOR for new loans by the end of 2021 and will stop publishing USD LIBOR after June 30, 2023.
In July 2017, the UK’s Financial Conduct Authority, which regulates LIBOR, announced that it intended to phase out USD LIBOR for new loans by the end of 2021 and would stop publishing USD LIBOR after June 30, 2023.
Our continued international expansion increases our exposure to exchange rate fluctuations and as a result such fluctuations could have a significant impact on our future results of operations. Interest Rate Risk At December 31, 2022, we had debt outstanding with a carrying value of $625.0 million.
Our continued international expansion increases our exposure to exchange rate fluctuations and as a result such fluctuations could have a significant impact on our future results of operations. Interest Rate Risk At December 31, 2023, we had debt outstanding with a carrying value of $620.9 million.
Dollar, would have changed revenue by $18.2 million and $17.3 million for the years ended December 31, 2022 and 2021, respectively, with all other variables held constant. This accounts for 2% of total revenue for both years ended December 31, 2022 and 2021.
Dollar, would have changed revenue by $22.5 million and $18.2 million for the years ended December 31, 2023 and 2022, respectively, with all other variables held constant. This accounts for 2% of total revenue for both years ended December 31, 2023 and 2022.
Historically, we have not hedged any foreign currency exposures. We have performed a sensitivity analysis as of December 31, 2022 and 2021. A hypothetical 10% change in British Pound and Euro, relative to the U.S.
Dollar exchange rate was 2.6% and 0.4% higher , respectively, in the year ended December 31, 2023 compared to the year ended December 31, 2022. Historically, we have not hedged any foreign currency exposures. We have performed a sensitivity analysis as of December 31, 2023 and 2022. A hypothetical 10% change in British Pound and Euro, relative to the U.S.
Item 7A. Quantitative and Qualitati ve Disclosures About Market Risk. Foreign Currency Exchange Risk We conduct business in certain foreign markets, primarily in the United Kingdo m and the European Union.
Item 7A. Quantitative and Qualitati ve Disclosures About Market Risk Foreign Currency Exchange Risk We conduct business in certain foreign markets, primarily in the United Kingdo m and the European Union. For the years ended December 31, 2023, 2022 and 2021, revenue outside of North America accounted for 43.2%, 39.5% and 42.3% of consolidated revenue, respectively.
Removed
For the year ended December 31, 2022, for the year ended December 31, 2021, for the period from January 29, 2020 to December 31, 2020 and for the period from January 1, 2020 to January 28, 2020, revenue outside of North America accounted for 39.5%, 42.3%, 44.3% and 47.5% of consolidated revenue, respectively.
Added
In March 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 Term Secured Overnight Financing Rate (“SOFR”) pursuant to benchmark replacement provisions set forth in the Original Credit Agreement.
Removed
Our operations being materially located in the U.K. and the European Union, our primary exposure to foreign currency exchange risk is the underlying user’s functional currency other than the U.S. Dollar, primarily the British Pound and the Euro.
Added
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”).
Removed
Once one month LIBOR is phased out after June 30, 2023, the interest rates for our LIBOR-based loans will be indexed to a comparable or successor rate as provided for in our loan agreements. 75
Added
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. In April 2023, we amended our interest rate swaps expiring in June 2024.
Added
Pursuant to this amendment, effective on March 31, 2023, the benchmark reference rate was transitioned from LIBOR to Term SOFR and the variable interest rate element on $350 million of the long-term debt was fixed at a rate of 0.3299%. 70

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