Bumble Inc (BMBL) 2021 Q2 法說會逐字稿

Thank you for standing by. Welcome to the Bumble Second Quarter 2021 Financial Results. (Operator Instructions)

I would now like to hand the conference over to your speaker today, Brinlea Johnson. Please go ahead.

Thank you for joining us to discuss Bumble's Second Quarter 2021 Financial Results. With me today is Whitney Wolfe Herd, Founder and CEO; Tariq Shaukat, President; and Anu Subramanian, CFO of Bumble.

Before we begin, I'd like to remind everyone that certain statements may be made on this call today that are forward-looking statements. These forward-looking statements are subject to various risks and uncertainties and reflect our current expectations based on our beliefs, assumptions and information currently available to us. Although we believe these expectations are reasonable, we undertake no obligation to revise any statement to reflect changes that occur after this call. Descriptions of these factors and other risks that could cause actual results to [differ] materially from these forward-looking statements are discussed in more detail in our filings with the SEC, including our annual report on Form 10-K for the year ended December 31, 2020, and our subsequent periodic filings.

During the call, we also refer to certain non-GAAP financial measures. These non-GAAP measures should be considered in addition to and not as a substitute for, or in isolation from, our GAAP results. Reconciliations to the most comparable GAAP measures are available in today's earnings press release, which is available on our Investor Relations section of our website at ir.bumble.com.

With that, I'll turn it over to Whitney.

Thank you, Brinlea, and thank you all for joining us. I hope everyone tuning in today is staying healthy and well.

Q2 was another excellent quarter for us. At the group level for Bumble Inc., we delivered strong results with total revenue of $186 million, up 38% year-over-year and adjusted EBITDA of $52 million, representing a 28% margin. Bumble App revenue grew 55% year-over-year to $127 million, and Badoo App and Other Revenue grew 11% to $59 million. Our average paying users in Q2 increased 20% year-over-year to 2.9 million.

Our excellent performance demonstrates that the need for love and relationships is more important than ever before. After 1.5 years of the pandemic, more people than ever before now recognize the benefits, safety and access that online dating provides. When COVID accelerates and loneliness climbs, people turn to us for connections. And when markets reopen and the desire to meet new people in real life surges, Bumble Inc. helps people find new relationships quickly and safely.

Despite the challenges that the world is facing with the Delta variant, we are continuing to see positive trends across our platforms, even in some of the most affected markets. For example, in Q2, we saw increasing engagement and activity even with the spread of the Delta variant in India, and Bumble App monthly active users grew at over 60% year-over-year in that market. According to third-party sources, we have gained or maintained download share in most of our major markets for both Bumble App and Badoo App in 2021 and in Q2, including download share gain in the U.S. for Bumble App.

Our results in Q2 and the traction we are seeing in Q3 show that we are able to serve our users effectively as the world faces pandemic curbs and also as markets reopen. While we continue to actively monitor the COVID situation in all of our markets around the world, we are confident in our performance for the rest of 2021. And I am pleased to say that we are increasing our full year revenue guidance to $752 million to $762 million, up from our previous high-end guide of $734 million, representing a year-on-year growth rate of 30% at the midpoint.

This performance is driven by strong execution against the strategic priorities we outlined earlier this year, including our ongoing monetization efforts, rapid international expansion, reengagement of users in our core markets and retention and engagement improvements driven by product innovation and data science efforts. We are continuing to expand these efforts, including acceleration of Bumble app's global expansion; investment in the next generation of our friend-finding service, Bumble BFF; and rollout of 2-tier pricing for the first time on Badoo starting in Q3.

Let me give you some details on performance by app, starting with Bumble App. Bumble App had a very strong quarter, with revenue growing 55% with growth coming both from paying users and ARPPU. On a global basis in Q2, registrations and monthly active users on Bumble App grew at the fastest year-over-year rate since the beginning of the pandemic. We also saw a 26% increase in reengaged users and achieved record levels of daily active users in Q2, fueled by registration growth, customer reactivation and material improvement in customer engagement and retention.

Our teams continue to innovate to ensure that we are serving our users in the most forward-thinking, safe and effective way possible. During the pandemic, women searching for serious relationships was at an all-time high. So we updated our onboarding process for those looking for more serious relationships, prompting members to create robust and more in-depth profiles to really increase the compatibility between 2 customers. We also partnered with Snap to bring augmented reality features into our video chat. And we extended our Night In trivia experience to India, with high levels of engagement.

The average time spent on the Bumble App increased by 10% in Q2, with time on the platform for women 24% higher than that for men, demonstrating the power of our woman-first model that really leads to healthier and more balanced ecosystems for all users.

Global expansion continues to be a major driver of Bumble App's growth. As the U.K. and Ireland started to reopen in Q2, we saw very rapid growth with user revenue growth of over 70% year-over-year, supported by our targeted local marketing efforts. The DACH region continues to be a major driver of growth, growing monthly active users by over 100% and now representing our fourth highest revenue market, with revenue growing at over 200% year-on-year. Other parts of Western Europe, including France and the Benelux region, also continue to grow at a very rapid rate, as does our presence in Southeast Asia and India.

We continue to be pleased with the progress we are seeing in our social discovery and friend-finding platform, BFF. Despite still being a V1 product, as of Q2, 10% of our Bumble App monthly active users are using BFF. Our teams are hard at work building the next-generation BFF platform, and we expect our new product features to start rolling out over the next several months.

The early results of our tests are encouraging and suggest strong user appetite for these new features that are under development. For example, on the first day of beta testing our new Interest feature on BFF, we saw an over 500% increase in users adding Interest to their profile. We really look forward to providing more updates as we continue to advance our launch.

So now let's turn to Badoo App and Other Revenue, which grew 11% year-on-year in Q2. Badoo App is a global-scale player operating in a large number of markets, including Eastern and Western Europe and Latin America. The pandemic is still a significant challenge to the broader population in many of these areas, and in particular to the Badoo user community, which is predominantly in the urban middle class and has faced economic pressures from COVID, while according to third-party sources, Badoo has maintained or gained download share in most of its major markets in Q2 and user growth, especially in our legacy web platform, has been challenged under these conditions. However, we're pleased to report on many successes at Badoo this quarter that fueled our double-digit growth. The Badoo team has focused on improving monetization and user engagement, and many of our user engagement metrics are at their highest levels in over 2 years. Day 1 and Week 1 retention and one of our core measures of user success, which we call Good Chat, have all increased in Q2. We remain very focused on improving monetization and engagement and are seeing evidence of our efforts taking hold.

Payer penetration is growing at healthy rates in many of our major markets, including a 40% increase in Brazil and a 34% increase in the United States. And we are starting to see user growth on iOS. For the second half of the year, we are focused on reintroducing Badoo to users as COVID conditions improve and on launching a range of new features and experiences tailored towards the changes in user behavior that have emerged during this pandemic. We look forward to continued improvement in Badoo as markets and economies recover from the pandemic conditions.

Coming back up to the Bumble Inc. level. One of the key elements that makes us who we are is our focus on safety and accountability. This is not just a onetime investment or an initiative run out of a special silo. It is embedded in every aspect of our business. Last week, we announced an industry first, a partnership with Chayn and Bloom to be the first dating app to provide trauma support to survivors of sexual assault. I cannot tell you how important this is to me and to our entire team, and it is something we hope that the entire dating industry will follow.

We have been continuing to deploy our machine learning expertise to make the experience on our apps even better, even if faced with bad actors. In Q2, we made a major push with a new set of data analytics and machine learning models to improve the moderation of chats on Badoo, and we are very pleased with the results. We now catch more bad actors before a user experiences an issue, improving the quality of our experiences and reducing potential abuse. This is a continuing focus of ours across all of our brands.

As we think about the future of Bumble Inc., our team remains focused on executing against our strategic priorities and long-term growth plan. Our group today consists of Bumble App, the woman-first app where women always make the first move, and Badoo App, where users can quickly and easily make real connections without pressure. Both are built on our foundation of engineering excellence and safety, accountability and kindness. We are looking to grow organically by leveraging our shared technology platform to build safe, kind and accountable technology for new communities. We also see opportunities to acquire businesses consistent with our mission and values that can help us expand our presence, reaching new geographies and customer demographics.

Bumble Inc.'s mission of helping communities across the globe find healthy and equitable relationships through all stages of their lives, supports a tremendous, very long-term opportunity, one we believe our brand can own.

And with that, I want to say thank you so much for your time today, and I will now hand it over to our CFO, Anu.

Thanks, Whitney, and hello, everyone. In Q2, we saw continued momentum in our business with higher-than-expected revenue and adjusted EBITDA performance. Total revenue in the quarter grew to $186 million, an increase of 38% year-over-year, and adjusted EBITDA was $52 million, representing a 28% margin, an increase versus 24% in Q2 of last year. As a reminder, revenue in the second quarter of 2020 was impacted by a $4 million reduction in deferred revenue recorded in purchase accounting.

Q2 revenue growth was driven by strong improvements in total paying users, which grew 20% as well as growth in total ARPPU, which grew to $20.88, an increase of 15% year-over-year and 4% sequentially from Q1. Bumble App revenue was $127 million for the quarter, representing strong growth of 55% year-over-year. Bumble App paying users increased 36% year-over-year to 1.5 million, an addition of 120,000 versus last quarter.

As Whitney noted, the growth in our Bumble app community continues to be robust with strong contributions from North America as well as from our newer international region. In Q2, we continued our expansion in Europe with the launch of Austria, Switzerland, Netherlands and Belgium. Throughout Western Europe, we saw triple-digit paying user growth in Q2, with the DACH region being exceptional, growing more than 200%.

Bumble App's ARPPU for the quarter was $28.81, which grew 13% year-over-year and was up 4% sequentially. We were especially pleased with the strength and metrics for women, with year-over-year ARPPU growth rates for women outpacing that of men by more than 100%.

During the quarter, we completed the launch of 2 tier for Android in our remaining markets. And I'm very pleased to say that as of the end of Q2, the adoption rate of the higher tier continues to be more than 2/3 of new users.

Within the Bumble App, we expect our monetization work to continue with the introduction of new consumables and subscription offerings. For example, in June, we launched Extended Spotlight, which provides increased visibility for our super users.

Badoo App and other revenue was $59 million in Q2, which was up 11% year-over-year. Similar to Bumble app, we saw improvements in payer penetration with paying users increasing to 1.5 million, up 8% year-over-year. Paying user growth came from our core Badoo markets such as Brazil, Russia and the United States, which delivered strong results. Badoo App ARPPU in Q2 increased 4% year-over-year to $12.85. Drawing on the learnings from the launch of Bumble Premium, we will be rolling out 2-tier pricing for Badoo later in Q3. We expect to launch first in the U.S. on both iOS and Android, with the remaining markets to follow closely in Q4. In addition, as we mentioned in the prior quarter, our work on our next generation of consumable products on Badoo is also ongoing as we work on providing a low entry point for members to convert into paying users.

Turning now to expenses. I will discuss these on an adjusted basis, excluding the impact of stock-based compensation and onetime transaction costs. Cost of revenue was $50 million, up 36% compared to Q2 of last year, on account of higher aggregator fees which grew in line with revenue. As a percentage of revenue, this was flat year-over-year at 27%. Sales and marketing expenses in the quarter were $47 million, up 20% year-over-year. As a percentage of revenue, it was 25%, down from 29% in Q2 last year and slightly up from 24% of revenue in Q1 this year.

As some markets opened up at the beginning of summer, we leaned into reopening campaigns in the U.S., France, Germany, Netherlands and the U.K. We will continue to be nimble in investing in marketing next quarter around reopening efforts, including market expansion initiatives in Asia and on-campus and field marketing efforts as colleges come back in session.

G&A spend was $21 million or 11% of revenue, in line with our spend in absolute dollars in Q1 of this year but higher than Q2 last year, mainly driven by increased headcount and public company costs. Second quarter adjusted EBITDA grew to $52 million, an increase of 60% over the prior year, representing adjusted EBITDA margins of 28%. As our top line revenue has shown rapid growth, we are continuing to demonstrate operating leverage in our business.

Our stock-based compensation expense was $30 million for the quarter, which was up from $3 million in Q2 of last year, primarily due to modification of equity awards at IPO. We generated a net loss of $11 million for the quarter, and we ended Q2 with $252 million of cash.

Turning to our outlook. We are confident that our momentum on Bumble App will continue into the second half of the year. While Badoo has shown itself to be resilient through the pandemic, Badoo's exposure to COVID is more prominent than Bumble App given its geographic and demographic footprint. And hence, we expect that Q3 for Badoo may see some impact from Delta. But as these markets come up on the vaccine curve, we feel confident in our ability to continue our momentum through the end of the year, and this is captured in our increased full year outlook. With that, we are pleased to raise our full year guidance for both revenue and EBITDA.

Looking ahead to Q3, we expect total revenue in the range of $195 million to $198 million, representing a growth rate of 21% at the midpoint of the range. We expect adjusted EBITDA to be in the range of $48 million to $50 million, which represents a margin of 25% at the midpoint. For the full year, we expect revenue in the range of $752 million to $762 million, a growth rate of 30% at the midpoint of the range. For adjusted EBITDA, we expect $195 million to $200 million, which represents an EBITDA margin of 26% at the midpoint.

To close out, we had a very strong first half performance. We demonstrated our ability to scale our business, grow revenue while staying disciplined and improving profitability. Our increased guidance reflects our confidence in the momentum in our business and our ability to execute on our strategic direction.

And with that, we will now be happy to take your questions.

(Operator Instructions) Our first question comes from Cory Carpenter with JPMorgan.

I think first one for Whitney or Tariq. You touched on this a bit in your opening comments, but hoping you could expand on the impact you're seeing from the latest surge of COVID cases. Any evidence at all of slowing momentum in markets such as the U.S.? And then for Anu, could you expand a bit on just kind of some of the drivers of the upside that you saw from revenue in 2Q and some of your key assumptions in the guide?

Sure. Cory, this is Tariq. Thanks for the question. I guess I'll start with the first piece. On Bumble App in particular, we're not seeing any material impact from COVID, from the Delta variant spread in the U.S. I think that the U.S. markets are continuing to perform very well for us on Bumble. That is generally true on the Bumble App worldwide, even in markets that are experiencing this resurgence of Delta.

As we mentioned, Badoo is seeing a little bit more impact, particularly in some of the international markets where there is more COVID impact. But in general, on Bumble, like I said, no real sign of an impact. Engagement is at pre-pandemic highs on both Bumble and Badoo. And so we're feeling, as Anu said, very confident about this quarter.

Sure. And Cory, just to your second question, our growth in Q2 really has been a function of strong growth across the board for paying users and ARPPU for both Bumble and Badoo. And like I said in my comments, we've been very pleased on the Bumble side with the momentum we've seen with growth not only in our existing markets, but also in a lot of our new markets, which is obviously very exciting as we look at our international expansion. And a lot of the work that we've been doing around 2-tier pricing has really paid out as we think about ARPPU growth.

As we thought about guidance, if you take all of this, we've been super pleased with the strong first half growth we've had so far. And with revenue up 38% in Q2, with Bumble growing at 55% and Badoo at 11%, our overall business is just showing very strong healthy engagement and momentum in many of our markets. And so we are super confident about raising our full year guidance at 30% at the midpoint of the range. And our Q3 guidance assumes revenue will grow at 21% at the midpoint.

And if you sort of break it down by app, for Bumble App, because of the growth that we've seen in Q2 and as we look at the progress so far in Q3, we've seen very strong growth rates across all our major markets. And we're expecting growth in both paying users and ARPPU. And we expect that sequentially that will continue between Q2 and Q3.

We are very positive about, like I said, markets that we are in today like North America and U.K., where vaccination rates are high; and also in the markets that we are expanding, including Western Europe, DACH, et cetera.

For ARPPU, we finished the rollout of 2 tier, like I said, but we do expect to continue to see the benefit of that as more new users continue to come into the higher-priced tier. So that is very positive news for us as we think about growth in ARPPU in Q3 and Q4.

And interestingly, in addition in recent months, we've actually seen that adoption of the higher-priced tier has been more than the 2/3 that we've been talking about. So in some markets, we've actually seen growth of upwards of 70% -- adoption of upwards of 70%. Again, very, very positive signals as we think about what the rest of the year looks like.

And for Badoo App, as I mentioned, Badoo has a large-scale base today, and its users are in the urban middle class. And it also has a large geographic footprint where they have experienced a higher impact from COVID. So we do expect to see some impact to users and paying user growth.

But as we move into Q4, we're actually very excited about the rollout of 2 tier for Badoo, which we think will be very beneficial from a monetization perspective. So if you put all of this together, we feel very confident about raising our full year guidance.

Our next question comes from Nick Jones with Citi.

I guess first on new product features increasing users. How should we think about any additional features through the rest of the year and what the potential impact could be on users? Do you think there's some features that can still kind of move the needle meaningfully there? And then, I guess, maybe could you expand a little bit on the Snap partnership to bring AR features on board?

Sure. Nick, so this is a great question. Let me talk about Bumble and Badoo in turn. I think that a lot of what we are focusing on, on the Bumble side is really these features that are helping to engage our users as their preferences have shifted from a relationship standpoint. Whitney mentioned more focus on serious relationships. We're seeing a lot more focus on what we're calling intentional dating or what we think of as intentional dating, meaning people are much clearer coming into the dating market about what they're looking for from a relationship. And we are really trying to give them the tools to do that and make the experience better for the more serious and intentional types of relationships that our users are talking about. So a lot of what we've done in Q2, as well as the plan for Q3 and Q4, is really focused on activities like that, in addition to new monetization features and what I referenced last quarter, some of the consumable experiments that we're doing in different parts of the world.

We do have a very active innovation program that is building on top of what I just talked about is the more optimization part of what we're doing. And that is really active exploration of some of the features that we talked about with augmented reality, with Snaps and video features, areas like that. It's probably too early to go into a lot of depth about those pieces, but a lot of work and testing going on in those areas as well.

On the Badoo side, kind of a similar story. We are very focused on how do we help people as they start to come out of the pandemic. It's a little bit of a lag from what we're seeing on Bumble, largely because of the geographic footprint. But again, the same themes around intentional dating, more robustness in the profile element, better matching features, algorithmic updates across both Bumble and Badoo. All of those are kind of coming together for us in the second half of this year.

Next question comes from Mike Ng with Goldman Sachs.

I just had one on Bumble App ARPPU. It was really strong in the quarter. I was wondering if you could help to quantify some of the contributors to the year-over-year acceleration in growth. How much was really the 2-tier pricing rollout at iOS and then Android, as well as some of the innovation in the a la carte products?

Sure. Thanks, Mike. So when we talked about monetization for Bumble, we've always said that we've been really focused on moving more people into the subscription tier when we started this work last year. And if you recall, the number of Bumble users that were also subscribers -- number of Bumble paying users that were also subscribers was around the 90% range. That number has actually gone up now. We are actually closer to 93% in terms of the number of paying users that also subscribe to one of our products. And that has largely been due to 2-tier because 2-tier now actually includes consumables in the package as well, which was not the case prior to that.

Obviously, we launched Bumble Premium. And the rollout, obviously, is now complete. And like I said when I was answering the prior question, we are starting to see adoption pick up for the higher-priced tier. In many markets, we had upwards of 70%. And we still actually have a small -- a long tail of users that are still on the old pricing system, and they will continue to sort of migrate as they churn out and they start to reenter the system. So that still needs to move into the new price tier.

But 2-tier really has been a huge part of why you've seen the growth in ARPPU, which is obviously very important to us, especially as we think about taking the learnings from Bumble App to Badoo.

As we think about the rest of the year and going forward, we are continuing to review pricing in every market. And you will see us continue to adjust and iterate to be competitive in every market that we're in, but also to make sure that all the work that we're doing around price elasticity on subscriptions manifests itself into real improvements in ARPPU. So that's very exciting for us. We are working on additional product features in the form of consumables. I'd mentioned in my prepared remarks that we launched Extended Spotlight in June. It is a consumable that provides increased visibility if you're a power user. So that helps to improve ARPPU as well. And we have a few other interesting consumables that we are testing that are in the works that you will hear us talk about in the next few quarters.

Our next question comes from Brad Erickson with RBC.

I guess I had just a follow-on to that last comment. Just curious, what's the cadence by which you guys expect to sort of roll out those -- some of those new products? And like the consumables, for example, that you just mentioned, is that going to be sort of like an every year thing alongside potential new tiers? Or is it maybe a little bit less frequent than that?

Yes. I think, Brad, the -- we have kind of a multistep launch process. We are very active test and learners. And one of the advantages of the footprint that we've got geographically and from a demographic, from a segmentation standpoint, is we can test a lot of things and build confidence in the impact and the engagement and the value before we roll it out. And so we have dozens, if not hundreds, of experiments going on at any given time. When we find something that really adds material value to the user, we actually roll those out pretty continuously. That is generally for enhancements to the user experience. We always want to provide the best experience possible to our users.

As it comes to monetization, we try to bundle these together a little bit more, but certainly on a frequency that is more than the annual that you're talking about. So we would expect several times a year. Of course, it depends on how big the change is. So it might be a little lumpy from year to year. But generally speaking, we believe in launching frequently and really driving -- trying to drive the innovation experience that our users have.

That's helpful to understand the philosophy. And then I guess just a follow-up. Just what kind of have you seen lately in terms of competitive landscape for Bumble brand? Just curious if you can share a bit, particularly about how you're feeling sort of your diversification-wise beyond some of the major MSAs, where I think some of your competitors have also shown some strength lately. Just an update there would be great.

Yes. Sure. This is Whitney speaking. So we are continuing to see very rapid growth on Bumble App. And as we mentioned briefly earlier, according to third-party data sources that we're looking at, in the majority of scaled markets that we operate in, including the U.S., of course, we are holding or gaining download share. So when you look across the landscape, some competitors are growing, some are declining, but we do not see any scaled player who in the last 6 months is gaining any material share at the expense of Bumble.

I think it's very important to note that we continuously invest not just in our product innovation and our technology innovation and our machine learning, but we also continue to invest in our brand, which gives us competitive advantage and really allows us to reinvest in that moat that has been such a big part of our success to date. And we're very confident that will carry us in the decades to come.

So I think it's just also important to turn to Badoo App for a quick second. While the markets that it's operating in are slightly more challenged from a COVID standpoint, the same point really holds. We're gaining or holding share while most of those markets are dealing with the pandemic. So of course, we're always focused and paying attention to our competition, but we're obsessively focused on our users.

And the most important point I can make here is that we continue to listen to the customer, and we build for the customer. We optimize for the customer. If you continue to do that, we are very confident that by providing the very best experience for what they want, we will continue to be successful and competition will not be a risk.

And I think just to build on that for one second, in terms of the MSAs specifically and the geographies, in the U.S., we have a strong presence in the larger cities. We are continuing to build our geographic expansion, not just internationally but in the U.S. as well, focusing on other Tier 1 cities and Tier 2 cities and in particular, as Anu or Whitney mentioned, with college towns and areas like that. So we do see opportunities even in our established markets like the U.S. and U.K. to really continue to geographically diversify in addition to the work we're doing in Western Europe and Southeast Asia.

Yes. And the final point I want to make, not to overdo this point, is really -- the brand is so strong. And if we just continue to stay focused on the machine learning, the algorithm and the continuous improvements in that, we're very confident that competition is not an issue for us.

Our next question comes from Shweta Khajuria with Evercore.

Two questions for me, please. Can you please talk about engagement trends? You called out India in particular. So was there anything in particular that you would like to call out that drove engagement? I think you mentioned Trivia. And any other geographies where you saw outsized engagement and the reasons why?

And then the second question is, how is BFF trending? You're planning to roll out some new features over the next few months, which to us implies that you're seeing some strength and engagement there. So could you please talk about what you're seeing with BFF?

Sure. Whitney, why don't you start with BFF, yes.

Great. Thank you so much for the question. So let's start on BFF. It's important to set the stage for the exceptional TAM that exists within BFF. So the friend-finding opportunity and the platonic relationship opportunity has only progressed and become even more important and in demand throughout the pandemic. People have had their loneliest times, and this really does exist across the friend-finding category.

And so the fact that we have 10% of our Bumble users also using BFF today tells us that we have immense permission to be a much broader brand for friend-finding, and ultimately, a broader woman's lifestyle brand. So when we look to how we are improving this in the future, our focus in 2021 is really fundamentally on product development, getting the product to be in a very strong position and certainly beyond what it is today, which is very much a minimum viable product.

And when you look at the experiment data that's coming out of these early innovations and early product developments, we are actually seeing that our new onboarding flow has led to an over 200% increase in the daily active users that are already using both BFF and Date in those test markets where it's live currently. And this continues to validate the opportunity ahead for both engagement and monetization.

And we've seen historically that the ARPU for BFF and Date together, the users that use both, is 30% higher than the Date-only customer, which really signals huge growth for us in the future.

And ultimately, just to go into what this product will do, it's really providing users with the ability to connect platonically, to lean into this opportunity to find groups of friends, to find communities, not just the one-to-one experience. And we are very excited to update you more on the next earnings call.

And turning, Shweta, to your first part of your question around engagement. I think there's a couple of things that we would call out. I think one of them is what I mentioned earlier around just the optimization efforts that we do. We have teams that are really just focused on improving the onboarding experience, improving the retention experience, et cetera. And it's hard to overstate how important those efforts are in continuing to boost engagement for us. So that is certainly one piece of it.

I think the second is that we have been investing very heavily in algorithmic changes around our, what we think of as our people recommendation, our people connection algorithm and how do we actually identify who you're most likely to want to match with. And we've seen some really significant improvements in our ability to do that matching. And we have actually invested a lot in capabilities to give us more data, such as asking people to express their interests. We have about 40% of people on Bumble App at the moment who are telling us not just their profile information, but what are they interested in. And we use that as part of the matchmaking algorithm. So that is certainly the second piece.

And then some of these elements that you referenced like Night In, if we look at India, in particular, India is a combination of the first 2 pieces I just mentioned. Plus India has probably had the best response of all the markets that we've seen so far for the Night In Trivia feature. It was quite widely adopted from people who use video chat and are engaged in post-match inside of India. And that's all despite obviously the catastrophe that was happening during Q2 in India. So I think it really did provide an outlet for people, like an ability for them to connect outside of -- in this virtual world outside of what was going on in the real world.

Our next question comes from John Blackledge with Cowen.

Two questions. First, any updated thoughts on potential app store relief and timing? And then secondly, very solid EBITDA beat with strong incremental margins. With the guide, the implied margins in the back half are stepping down a couple of hundred bps from first half levels. So just curious about investments in the second half driving the slight margin compression.

Sure. John, so obviously, there's a ton of regulatory scrutiny around app store fees. We are watching all of it very closely, as you can imagine. So we'll be waiting to see what happens from those conversations.

Our current EBITDA guidance for the second half assumes minimal impact from Google Play. And we're having conversations with them about what this means for 2022. They've been great partners to us. Our discussions with them are still ongoing. And as we have more information about what that means for us, we will definitely share them with all of you.

With respect to your question about EBITDA, I mean, you're right. I think we are planning, as far as our second half is concerned, incremental investment with respect to things like marketing. We've always said that we want to be nimble, and we want to be opportunistic about continuing to invest in our business as the opportunities present themselves. So our goal is, and that's what we've guided to in terms of plans for Q3 and Q4, is to continue making that investment. And marketing is one of the biggest areas where you will see us do it. Obviously, we have to see what happens with respect to the world reopening and markets reopening. So we will adjust our marketing plans based on that.

But the one thing that we've done really well over the last 12 to 18 months is take our on-the-field, on-the-ground grassroots marketing, and we've transitioned that to digital marketing in a very effective way. So we will make sure that we are super efficient in terms of how we deploy that capital. So that's what's built into our guidance as you think about a step-down from Q2. So yes.

Our next question comes from Andrew Marok from Raymond James.

How should we be thinking about the size or the magnitude of the opportunity in the 2-tier pricing and the effect that it could have for the Badoo App versus Bumble App given the differences in customer demographics and payer penetration rates between the 2 apps?

Sure. So I can take that. So obviously, the benefit of us launching 2-tier after having spent the last few quarters launching Bumble Premium is we have a ton of learnings from all the markets that we have launched Bumble in. And you're absolutely right. I mean there are differences in terms of how a Badoo customer behaves and their propensity to pay is, versus what you would see for Bumble.

One of the things that we will be doing differently as we launch 2-tier is we expect to launch the lower tier at the same price as where Bumble -- Badoo customers are today, with the higher tier including additional consumables. So it's a slightly different strategy than how we launched Bumble Premium.

We've been doing many tests in many markets already, and that makes us very confident that we will see strong ARPPU lifts as we start the launch. So we look forward again to giving you more updates once the launch happens, starting in the end of Q3.

Another thing you will see us do is we are planning a much faster rollout of 2-tier, again, because we have the benefit of having all the learnings from Bumble. And so you'll see us accelerate the rollout through the end of the year for Badoo.

Our next question comes from Lauren Schenk from Morgan Stanley.

Just on the implied fourth quarter guide, it looks like you're expecting sort of acceleration in the fourth quarter on tougher comps last year. Just wondering what the driver is behind that. Maybe it's just Badoo being impacted by [adults] in the third quarter and then not in the fourth quarter, but any color there would be helpful. And then secondly, just any impact that you're seeing from IDFA on your marketing efficiency broadly?

Sure. I'll take the first part and, Tariq, I'll hand it over to you. In terms of uptick in Q4, there are 2 things. As you think about Bumble app, we're very excited about continuing the rollout of our international markets. So you'll see more growth coming from some of the markets we've already launched, such as Western Europe, DACH, et cetera. And we're also excited about launching newer markets, some of them in Asia, Lat Am. So that's part of some of the uptick we expect to see.

From an ARPPU perspective for Bumble, again, we expect to see healthy growth coming from benefits of 2-tier as well as launch of new products that we have planned in the pipeline. And as we think about Badoo, 2-tier for Badoo is a big part of how we think about growth increasing in Q4. Like I was just telling, a lot of the test results that have come out of the tests that we've already done show us that ARPPU will see nice growth. So we are excited about that as we think about the Q4 growth.

Tariq?

And Lauren, on the IDFA question, so we are seeing essentially flat to even slightly down CPIs even through the IDFA. So I'm actually very proud of our marketing team and how we've been able to navigate through that to date. One of the things that I'd remind everyone of is that we only rely on performance marketing for about 20% or so of our new customer acquisitions. So we have a very strong organic channel. And so that certainly has helped us in general. But the CPIs are pretty stable for us as we've navigated through this. The team is currently working through how do we continue to scale that even further, and it's something that they're working through. But so far, I think it's been generally good news in terms of the things we've done.

Our next question comes from Brent Thill with Jefferies.

Whitney, I know you've mentioned to us don't get excited in our models about BFF in the short term. But as you look longer term, do you think there are different revenue models you could attach? Your advertising business, for example, was barely up year-on-year. I'm curious if you think you could open up a much bigger advertising segment of the business? Or are there other ways you're creatively thinking through the monetization of BFF and [at work] over time?

Thanks so much for the question. A topic I'm very excited about. So we cannot give you specifics, but the short answer is absolutely. There are major monetization opportunities ahead of us. We would probably categorize that in 3 ways. Number one, subscription, obviously different from the ones you're seeing today in Dating. These are very different use cases, right? Looking for a love interest is different than looking for a friend. So of course, the way we would back into the subscription model will be different, but we are very bullish on the opportunity around subscription in the future.

The second category is advertising. This is an advertising megawatt opportunity down the road. And I don't want to spend the time on today's earnings call talking about the way we would approach that.

But the third category would be the creator economy. This is a really exciting opportunity, one that we know our audience is prime for. And we are very excited about all 3 of those categories as we look to the future, and again, as we just talk more broadly about the BFF opportunity. If you were to go back to 2012 when we were launching one of the first mainstream products with Tinder, this is an exploding category, friend-finding, kind of like what dating was several years ago. And so we're very excited about the growth horizon.

And maybe just a quick follow-up for Anu, just on the geos. Was there a territory that you would consider that surprised you in terms of the bounce-back or one that just really stood out? I know you mentioned there were a couple, but if you had to take the strongest kind of bounce-back, how would you characterize the 1 or 2 regions that you were most excited by?

Sure. I think I said this in my comments. We've seen DACH region do really well from a user growth perspective, but we've started to see really impressive growth from a revenue perspective and from a payer penetration perspective as well. So DACH is a top region for us from a total revenue perspective that's been exciting.

Like Tariq mentioned earlier, we were surprised by the level of engagement that we saw in markets like India. Obviously, India was pretty hard-hit in Q2 with COVID. But we released a ton of features, and I think that really helped keep the market pretty strong as well.

And our next question comes from Dan Salmon with BMO Capital Markets.

Whitney and Tariq, I think, maybe could you just expand a bit more on your M&A priorities right now, certain features, certain markets? And maybe your latest views on whether it makes sense to grow your portfolio.

And Whitney, you're right, it probably doesn't make sense to go into the entire advertising opportunity on this call right now. But maybe 1 or 2 more lines on what might make a megawatt opportunity and the differentiation on what you see down the road?

Sure. Thank you so much for the question. So I'll kick off on the M&A topic first. So I think I'd like to begin by saying we're in this incredibly fortunate position where M&A is not a requirement for us to maintain and accelerate our growth at the group level. Bumble App has tremendous potential in and of itself, which is very untapped for the extensibility opportunities. And we believe that the TAM for Badoo, when you look at that customer as a scaled player, is also incredibly significant.

But that said, we love growth and we love growth horizons. And we are very open to M&A if the opportunity is right. So we have a very disciplined approach to this with a lot of both operational and financial rigor. So essentially, we're looking at a few questions when we look at M&A. How can we reach more audiences in a deeper way? How can we take our pre-existing members and help them find more tailored ways to connect? And how can we leverage our scale, technology, marketing, safety and monetization platform and infrastructure and leverage that for other brands that have huge growth opportunities?

So all of this is just aligned, and ultimately, reinforcing our mission of helping people safely build healthy and equitable relationships. And every opportunity is looked at through a make-or-buy criteria. We are going to be building our way into new opportunities as well, and we will supplement that with acquisitions as and when it makes financial and operational sense. We have a foundation of engineering excellence that gives us a lot of strategic flexibility here.

The other thing to note is we have a shared model, right? We are a hub of sorts. So we have this opportunity to really share resources within our group, and that's a huge benefit.

Let's turn to advertising for a quick second. So BFF has this remarkable opportunity for us to really lean into people's shared joys and also their shared struggle. So when you look at the opportunity to serve them relevant content or send them places in the real world, this is very interesting. When you look at traditional advertising models online, most of it doesn't actually follow the post experience. We have this unique model where we send people off-line. If we do our job well, we help them find each other in the real world. And there's a huge advertising and partnership opportunity there.

Also user communities to find people with similar needs, there's a huge advertising opportunity there. And ultimately, this is just great for brand engagement and partnerships, likely not programmatic, but really high quality. And if you look back historically from the interest from partnerships and brands, it's really over-indexed towards BFF. People are very, very excited about tapping into that audience. And so this is something to keep in mind.

And our next question comes from Steve Koenig with SMBC Nikko.

Congratulations, Bumble, on a really good quarter. Great guidance raise. I've got one question for Whitney and kind of a housekeeping question here for Anu. Why don't I start with the housekeeping item. I just want to make sure I got your numbers right. So you mentioned that the headwind from the deferred write-down was $4 million in Q2. And if I recall correctly, it was $9 million in Q1. So am I correct in thinking that, that headwind diminished by $5 million? And so -- and then when does that write-down turn out to be de minimis? How long will that go on? That's the housekeeping. And then I'll follow up with one for Whitney.

Sure. So if you look at our 2020 numbers, our total impact from deferred -- from purchase price accounting was $15 million. So Q1 and Q2 had the most impact in terms of where you would see it. So we just have very little left to go in the second half of the year.

Okay. Very good. And then Whitney, interesting commentary about driving users to -- encouraging them to fill out more detailed profiles in order to cultivate more serious relationships on the Bumble App. Just curious, what's driving your efforts here? And is that kind of a tweak to the model? Or is that kind of a little bit of a shift in the center of gravity? Kind of how should we think about that initiative?

I just want to make sure I understand your question appropriately. So are you talking about moving into more serious dating, the product features we referenced earlier?

Yes. Exactly.

Okay. Great. Okay. Great. So the way we start with this and how we approach this in Q2 was really ultimately at the onboarding, collecting more information on the customer and helping them meet people that are both looking for the same things that they're looking for, but are people that they actually really want to meet. So Bumble App updated our -- we updated our onboarding for those that were actually looking for a serious relationship. And this prompted them to create robust and less superficial profiles. And 10% increase in members filling out the About Me section was seen in Q2 and 13% increase in members that were connecting their Instagram. There was also a 12% increase in members filling out Lifestyle Badges. Lifestyle Badges could be anything from, what's your horizon on children? Do you drink? Do you -- what's your religion? And then there was a 17% increase in members filling out questions in their profile. So ultimately, really building a more robust kind of DNA on the customer has really helped people find really relevant matches.

And what I'm curious about is -- thanks for the color on that -- kind of what's driving that? Is it a belief that, that will improve user engagement ultimately? Or kind of are you seeing that kind of that part of the market opportunity perhaps grow more quickly in the current environment? Kind of what's driving your efforts there, really is the question I'm curious about.

Sure. Of course. So I would say a few things are driving it. I'll start, and then I know Tariq would love to add some more detail to this as well. Ultimately, this is what the customer has told us they want. We constantly and continuously ask our customer what they're looking for. We always invest in listening to them, both through our data but also through surveys. And we recognize that women wanted more serious relationships more than ever before, and this really led to the feature rollout.

And I think the biggest need that we're trying to solve is to make sure that the experience is right for you for whatever relationship type that you are interested in. So whereas Whitney said, there's more people looking for serious relationships, but in general, there are more people just being explicit about the types of relationships they're looking for. And we're trying to give them the tools so that they can state that, nobody is surprised. They can meet with people who are most compatible with them and things like that. That is one of the biggest changes we've seen in the pandemic is people at the moment seem to know what they're looking for and want to get there as quickly as possible.

And our next question comes from Laura Champine from Loop Capital.

It's just a quick housekeeping one for Anu. Stock-based comp came in a little higher than what we expected. What are your thoughts for back half of the year on that line?

Sure. So our stock-based comp was higher this quarter, primarily due to modification of equity awards as well as new grants that we did post IPO. We do expect this number -- if you see, our Q1 number was higher than the $30 million that we posted this quarter. We do expect this number to moderate over the future quarters. But there is an uptick post-IPO, which is leading to the higher expense.

And then into next year, we should think of that roughly at the run rate of the back half of this year. Is that correct?

That's -- yes, that's right.

And at this time, I'm showing no further questions in the queue. I'd like to thank everyone for attending today's earnings conference call. Your -- this concludes the conference. You may now disconnect. Everyone, have a wonderful day.