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    BMBL   US12047B1052

BUMBLE INC.

(BMBL)
  Report
Delayed Nasdaq  -  04:00 2022-09-30 pm EDT
21.49 USD   -1.87%
09/14Stifel Nicolaus Resumes Coverage of Bumble With Buy Rating, $35 Price Target
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09/12Transcript : Bumble Inc. Presents at Goldman Sachs Communacopia + Technology Conference 2022, Sep-12-2022 03:45 PM
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09/08Bumble Inc. to Participate in Goldman Sachs Communacopia + Technology Conference
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BUMBLE INC. Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

08/12/2022 | 04:12pm EDT
You should read the following discussion and analysis of the financial condition
and results of operations of Bumble Inc. in conjunction with our unaudited
condensed consolidated financial statements and related notes included elsewhere
in Part I, "Item 1 - Financial Statements (Unaudited)". This discussion contains
forward-looking statements that involve risks and uncertainties about our
business and operations. Our actual results could differ materially from those
discussed in the forward-looking statements. Factors that could cause or
contribute to these differences include, without limitation, those discussed in
this Management's Discussion and Analysis of Financial Condition and Results of
Operations and those identified under "Special Note Regarding Forward-Looking
Statements" and Part I, "Item 1A-Risk Factors" in our 2021 Form 10-K.

Overview


We provide online dating and social networking platforms through subscription
and in-app purchases of dating products servicing North America, Europe and
various other countries around the world. Bumble operates three apps, Bumble,
Badoo and Fruitz. Our apps monetize via a freemium model, where the use of the
service is free and a subset of the users pay for subscriptions or in-app
purchases to access premium features. We launched Bumble app in 2014 to address
antiquated gender norms and a lack of kindness and accountability on the
internet. By placing women at the center - where women make the first move - we
are building a platform that is designed to be safe and empowering for women,
and in turn, provide a better environment for everyone. Badoo app, launched in
2006, was one of the pioneers of web and mobile free-to-use dating products. In
January 2022, we acquired Fruitz, a fast-growing dating app with a Gen Z focus,
which is a growing segment of online dating consumers. Fruitz encourages open
and honest communication of dating intentions through playful fruit metaphors.
Our consolidated results for the three and six months ended June 30, 2022
included the operating results of Fruitz from January 31, 2022. Revenues from
Fruitz were included in Badoo App and Other Revenue but excluded from our key
operating metrics. For additional information, see Note 5, Business Combination,
to our unaudited condensed consolidated financial statements included in Part I,
"Item 1 - Financial Statements (Unaudited)" of this Quarterly Report on Form
10-Q.

Quarter ended June 30, 2022 Consolidated Results

For the three months ended June 30, 2022 and 2021, we generated:

Total Revenue of $220.5 million and $186.2 million, respectively;

Bumble App Revenue of $169.6 million and $127.3 million, respectively;

Badoo App and Other Revenue of $50.8 million and $58.9 million, respectively;

Net loss of $6.4 million and $11.1 million, respectively, representing net loss margins of (2.9)%, and (6.0)%, respectively; and

Adjusted EBITDA of $54.8 million and $51.9 million, respectively, representing Adjusted EBITDA margins of 24.8% and 27.9%, respectively.

Year-to-Date June 30, 2022 Consolidated Results

For the six months ended June 30, 2022 and 2021, we generated:

Total Revenue of $431.7 million and $356.9 million, respectively;

Bumble App Revenue of $325.0 million and $240.0 million, respectively;

Badoo App and Other Revenue of $106.6 million and $117.0 million, respectively;

Net earnings of $17.5 million and $312.3 million, respectively, representing net earnings margins of 4.1%, and 87.5% respectively;

Adjusted EBITDA of $104.6 million and $98.0 million, respectively, representing Adjusted EBITDA margins of 24.2% and 27.4%, respectively.

Net cash provided by (used in) operating activities of $44.8 million and $(31.4)
million, respectively, and operating cash flow conversion of 255.6% and (10.1)%,
respectively; and

Free cash flow of $36.7 million and $(37.0) million, respectively, representing free cash flow conversion of 35.1% and (37.8)%, respectively.

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

Key Operating and Financial Metrics


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


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

                                          Three Months     Three Months      Six Months       Six Months
                                           Ended June       Ended June       Ended June       Ended June
(In thousands, except ARPPU)                30, 2022         30, 2021         30, 2022         30, 2021
Key Operating Metrics
Bumble App Paying Users                        1,924.5          1,473.0          1,849.8          1,412.9
Badoo App and Other Paying Users               1,096.2          1,454.3          1,164.2          1,452.4
Total Paying Users                             3,020.7          2,927.3          3,014.0          2,865.3
Bumble App Average Revenue per Paying
User                                      $      29.38     $      28.81     $      29.28     $      28.31
Badoo App and Other Average Revenue per
Paying User                               $      13.60     $      12.85     $      13.55     $      12.80
Total Average Revenue per Paying User     $      23.65     $      20.88     $      23.21     $      20.45




                                            Three Months     Three Months      Six Months        Six Months
(In thousands, except per share / unit       Ended June       Ended June       Ended June        Ended June
data and percentages)                         30, 2022         30, 2021         30, 2022          30, 2021
Condensed Consolidated Statements of
Operations Data:
Revenue                                     $    220,454     $    186,217     $     431,653     $     356,930
Net earnings (loss)                               (6,423 )        (11,147 )          17,515           312,295
Net earnings (loss) attributable to
Bumble Inc. shareholders / Buzz Holdings
L.P. owners                                       (4,392 )         (7,083 )          12,003           334,707
Net earnings (loss) per unit attributable
to Bumble Inc. shareholders / Buzz
Holdings L.P. owners
Basic earnings (loss) per share / unit      $      (0.03 )   $      (0.06 )   $        0.09     $        1.67
Diluted earnings (loss) per share / unit    $      (0.03 )   $      (0.06 )   $        0.09     $        1.62

                                                                              June 30, 2022     December 31,
(In thousands)                                                                                      2021
Condensed Consolidated Balance Sheets
Data:
Total assets                                                                  $   3,767,819     $   3,775,820
Cash and cash equivalents                                                           334,645           369,175
Long-term debt, net including current
maturities                                                                          621,645           622,939


Profitability and Liquidity


We use net earnings (loss) and net cash provided by (used in) operating
activities to assess our profitability and liquidity, respectively. In addition
to net earnings (loss) and net cash provided by (used in) operating activities,
we also use the following measures:

Adjusted EBITDA. 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, 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. Adjusted EBITDA margin represents Adjusted
EBITDA as a percentage of revenue.

Free cash flow. 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.

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Adjusted EBITDA, Adjusted EBITDA margin, free cash flow and free cash flow
conversion are key measures we use to assess our financial performance and are
also used for internal planning and forecasting purposes. We believe Adjusted
EBITDA, Adjusted EBITDA margin, free cash flow and free cash flow conversion are
helpful to investors, analysts and other interested parties because they can
assist in providing a more consistent and comparable overview of our operations
across our historical financial periods. In addition, these measures are
frequently used by analysts, investors and other interested parties to evaluate
and assess performance.

See "-Non-GAAP Financial Measures" for additional information and a reconciliation of net earnings (loss) to Adjusted EBITDA and Adjusted EBITDA margin and net cash provided by (used in) operating activities to free cash flow.

Impact of Russia-Ukraine Conflict


The ongoing conflict between Russia and Ukraine has increased global economic
and political uncertainty. On March 8, 2022, we announced that we will
discontinue our operations in Russia and remove all of our apps from the Apple
App Store and Google Play Store in Russia and Belarus. Our decision to
discontinue our operations in Russia and remove all of our apps from the Apple
App Store and Google Play Store in Russia and Belarus has led to reduced
revenues and Paying Users from these countries and increased costs. For further
information regarding revenues and Paying Users see the "Results of
Operations-Comparison of the Three and Six Months Ended June 30, 2022 and
2021-Revenue" section further below. For further information regarding the cost
related to our discontinuation of operations in Russia see Note 8,
Restructuring, to our unaudited condensed consolidated financial statements
included in Part I, "Item 1 - Financial Statements (Unaudited)" of this
Quarterly Report on Form 10-Q.

As of June 30, 2022, the net assets of our subsidiary in Russia comprised 0.2%
of total net assets. For the three and six months ended June 30, 2022, revenues
from Russia, Belarus and Ukraine combined were approximately 0.4% and 1.1%,
respectively, of our total revenues. Operating costs related to our Russian
operations were approximately 2.7% and 2.2% of our total operating costs for the
three and six months ended June 30, 2022.

For additional information, see "Risk Factors-Risks Related to Our Brand,
Products and Operations-Our operations may be adversely affected by ongoing
developments in Russia, Ukraine and surrounding countries, including due to the
impact of our decision to discontinue our operations in Russia and remove our
apps from the Apple App Store and Google Play Store in Russia and Belarus" in
Part I, Item 1A. of our 2021 Form 10-K.

Impact of COVID-19 and Macroeconomic Conditions


Since early 2020, COVID-19 has impacted market and economic conditions globally,
resulting in the implementation of significant governmental measures, including
lockdowns, closures, quarantines, and travel bans intended to control the spread
of the virus, as well as changes in consumer behavior as some individuals have
become reluctant to engage in social activities with people outside their
households. While many jurisdictions have relaxed restrictions, others have
remained in place with some areas continuing to experience renewed outbreaks and
surges in infection rates despite more widespread availability of vaccines.
Future prevention and mitigation measures, as well as the potential for some of
these measures to be reinstituted in the event of subsequent waves or the
emergence of new variants of the virus, have had and are likely to continue to
have an adverse impact on global economic conditions and consumer confidence and
spending in many parts of the world for some time. Such macroeconomic conditions
have adversely affected and may continue to adversely affect demand, and/or
users' ability to pay, for our products and services, particularly in the
geographic and demographic markets in which Badoo app operates. Given the
continued uncertainty around the duration and severity of the impact on market
conditions and the business environment, the impact of the COVID-19 pandemic on
our business, financial condition and results of operations going forward
remains uncertain for the foreseeable future.

In addition, other macroeconomic conditions, including but not limited to
heightened inflation, slower growth or economic recession, changes to fiscal and
monetary policy, higher interest rates and exchange rate fluctuations could
adversely impact our business. We continuously monitor the direct and indirect
impacts of these circumstances on our business and financial results, as well as
the overall global economy. Based on current conditions, exchange rate
fluctuations may continue to negatively impact our revenue and earnings in the
second half of fiscal 2022.

For additional information, see "Risk Factors-General Risk Factors-Our business
and results of operations may be materially adversely affected by the ongoing
COVID-19 outbreak or other similar outbreaks" and "Risk Factors-General Risk
Factors-An economic downturn or economic uncertainty may adversely affect
consumer discretionary spending and demand for our products and services" in
Part I, Item 1A. of our 2021 Form 10-K.

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Factors Affecting the Comparability of Our Results of Operations


As a result of a number of factors, our historical results of operations may not
be comparable from period to period or going forward. Set forth below is a brief
discussion of the key factors impacting the comparability of our results of
operations.

Initial Public Offering and Offering Transactions


On February 10, 2021, our registration statement on Form S-1 relating to our
initial public offering ("IPO") was declared effective by the U.S. Securities
and Exchange Commission, and our Class A common stock began trading on the
NASDAQ on February 11, 2021. Our IPO closed on February 16, 2021.

Bumble Inc. issued and sold 57.5 million shares of its Class A common stock in
the IPO, including 7.5 million shares sold pursuant to the exercise in full by
the underwriters of their option to purchase additional shares. Bumble Inc. used
the proceeds (net of underwriting discounts) from the issuance of 9 million
shares ($369.6 million) to acquire an equivalent number of newly-issued Common
Units from Buzz Holdings L.P, which Buzz Holdings L.P. used to repay outstanding
indebtedness under our Term Loan Facility totaling approximately $200.0 million
in aggregate principal amount and approximately $148.3 million for general
corporate purposes, and to bear all of the expenses of the IPO. Bumble Inc. used
the proceeds (net of underwriting discounts) from the issuance of 48.5 million
shares ($1,991.6 million) to purchase or redeem an equivalent aggregate number
of shares of Class A common stock and Common Units from our pre-IPO owners. We
refer to the foregoing transactions as the "Offering Transactions".

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.

Bumble did not sell any shares of Class A common stock in the offering and did
not receive any of the proceeds from the sale. Bumble paid the costs associated
with the sale 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. As the general partner of Bumble Holdings, Bumble Inc. now
operates and controls all of the business and affairs of Bumble Holdings, has
the obligation to absorb losses and receive benefits from Bumble Holdings and,
through Bumble Holdings and its subsidiaries, conducts our business. The
Reorganization Transactions were accounted for as a reorganization of entities
under common control. As a result, the consolidated financial statements of
Bumble Inc. will recognize the assets and liabilities received in the
Reorganization Transactions at their historical carrying amounts, as reflected
in the historical financial statements of Bumble Holdings, the accounting
predecessor. 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.'s accounting predecessor, Bumble Holdings is and has been since the
Sponsor Acquisition, treated as a flow-through entity for U.S. federal income
tax purposes, and as such, has generally not been subject to U.S. federal income
tax at the entity level. Accordingly, the historical results of operations and
other financial information set forth in this Quarterly 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.



In addition, in connection with the Reorganization Transactions and our IPO, we
entered into the tax receivable agreement as described under "-Tax Receivable
Agreement."



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

                                       40
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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.


We estimate the amount of existing tax basis with respect to which our pre-IPO
owners will be entitled to receive payments under the tax receivable agreement
(assuming all Pre-IPO Common Unitholders exchanged their Common Units for shares
of Class A common stock on the date of the IPO, and assuming all vested
Incentive Units were converted to Common Units and immediately exchanged for
shares of Class A common stock at the IPO prices of $43.00 per share of Class A
common stock) is approximately $2,603 million, which includes the Company's
allocable share of existing tax basis acquired in the IPO, which we have
determined to be approximately $1,728 million. In determining the Company's
allocable share of existing tax basis acquired in the IPO, we have given
retrospective effect to certain exchanges of Common Units for Class A shares
that occurred after the IPO that were contemplated to have occurred pursuant to
the Blocker Restructuring. The payments under the tax receivable agreement are
not conditioned upon continued ownership of the Company by the pre-IPO owners.

We have determined that it is more likely than not that we will be unable to
realize 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 June 30, 2022.
The Company is entitled to certain depreciation and amortization deductions as a
result of its allocable share of existing tax basis acquired in the IPO and
increases in its allocable share of existing basis and adjustments to the tax
basis of the assets of Bumble Holdings as a result of sales or exchanges in
connection with the IPO. There is significant existing tax basis in the assets
of Bumble Holdings as a result of the Sponsor Acquisition. Based on current
projections, we anticipate having sufficient taxable income to be able to
realize these tax benefits and have recorded a liability of $389.0 million
associated with the tax receivable agreement related to these benefits. 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. We will assess the ability of the deferred tax
assets to be realized at each reporting period, and a change in our estimate of
our liability associated with the tax receivable agreement may result as
additional information becomes available, including results of operations in
future periods. During the three months ended June 30, 2022, our tax receivable
agreement liability did not materially change.



Employee Equity Plans



In connection with the Reorganization Transactions and our IPO, we undertook a
number of modifications to existing employee equity plans such that awards under
the Founder Plan, U.S. Plan, and Non-U.S. Plan were reclassified as follows:

The Time-Vesting and Exit-Vesting Class B Units in Bumble Holdings under the
Founder Plan and granted to Senior Management under the U.S. Plan were
reclassified to vested Incentive Units (in the case of Vested Class B Units) and
unvested Incentive Units (in the case of unvested Class B Units) in Bumble
Holdings.

The Time-Vesting and Exit-Vesting Class B Units in Bumble Holdings (other than
those granted to senior management) were reclassified to Class A common stock
(in the case of vested Class B Units) and restricted shares of Class A common
stock (in the case of unvested Class B Units) in 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. As
the modification resulted in a change from liability-settled to equity-settled,
the RSUs were fair valued at the date of the IPO.



In all cases of respective reclassifications, the Post-IPO awards retained the
same terms and conditions (including applicable vesting requirement). Each
Post-IPO award was converted to reflect the $43.00 share price contemplated in
the Company's IPO while retaining the same economic value in the Company.



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. Under the 2021 Omnibus Plan, we granted equity awards
as follows:

Stock options with the underlying equity being shares of the Company's Class A common stock. These stock options are inclusive of both Time-Vesting stock options and Exit-Vesting stock options.

Time-Vesting Restricted Stock Units with the underlying equity being shares of the Company's Class A common stock.

Time-Vesting and Exit-Vesting Incentive Units in Bumble Holdings.

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At the IPO date, we concluded that our public offering represented a qualifying
liquidity event that would cause the Exit-Vesting awards' performance conditions
to be probable. As such, we started to recognize stock-based compensation
expense for the Exit-Vesting awards. Compensation cost related to the
reclassified Exit-Vesting awards for the three months ended June 30, 2022 and
2021 was $2.6 million and $7.8 million, respectively, and $3.5 million and $19.1
million, respectively, for the six months ended June 30, 2022 and 2021.


For additional information, see Note 14, Stock-based Compensation, to our unaudited condensed consolidated financial statements included in Part I, "Item 1 - Financial Statements (Unaudited)" of this Quarterly Report on Form 10-Q.

Components of Results of Operations

Our business is organized into a single reportable segment.

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. 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.

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.

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.
These purchases incur fees which vary depending on payment method. Purchase fees
are deferred and expensed over the same period as revenue.

Cost of revenue also includes data center expenses such as rent, power and bandwidth for running servers, employee compensation (including stock-based compensation) and, other employee related costs and restructuring charges. Expenses relating to customer care functions such as customer service, moderators and other auxiliary costs associated with providing services to customers such as fraud prevention are also included within cost of revenue.

Selling and marketing expense


Selling and marketing expense consists primarily of brand marketing, digital and
social media spend, field marketing, restructuring charges, compensation expense
(including stock-based compensation) and other employee-related costs for
personnel engaged in sales and marketing functions.

General and administrative expense


General and administrative expense consists primarily of compensation (including
stock-based compensation) and other employee-related costs for personnel engaged
in executive management, finance, legal, tax and human resources. General and
administrative expense also consists of transaction costs, impairment of
right-of-use assets, 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.

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.

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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.

Other income (expense), net

Other income (expense), net consists of insurance reimbursement proceeds, impacts from foreign exchange transactions, tax receivable agreement liability remeasurement (benefit) expense and fair value changes in derivatives and investments.

Income tax benefit (provision)


Income tax benefit (provision) represents the income tax benefit or expense
associated with our operations based on the tax laws of the jurisdictions in
which we operate. These foreign jurisdictions have different statutory tax rates
than the United States. Our 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.

Results of Operations

The following table sets forth our unaudited condensed consolidated statement of operations information for the periods presented:



                                      Three Months      Three Months       Six Months       Six Months
                                       Ended June        Ended June        Ended June       Ended June
(In thousands)                          30, 2022          30, 2021          30, 2022         30, 2021
Revenue                               $     220,454     $     186,217     $    431,653     $     356,930
Operating costs and expenses:
Cost of revenue                              62,757            50,797          119,538            98,544
Selling and marketing expense                59,483            49,711          116,312            96,549
General and administrative expense           51,375            43,381           77,821           169,905
Product development expense                  22,456            24,921           47,651            59,966
Depreciation and amortization
expense                                      27,151            26,905           54,080            53,860
Total operating costs and expenses          223,222           195,715          415,402           478,824
Operating earnings (loss)                    (2,768 )          (9,498 )         16,251          (121,894 )
Interest income (expense)                    (6,281 )          (5,921 )        (12,164 )         (13,650 )
Other income (expense), net                   4,954             4,731           18,184            11,722
Income (loss) before income taxes            (4,095 )         (10,688 )         22,271          (123,822 )
Income tax benefit (provision)               (2,328 )            (459 )         (4,756 )         436,117
Net earnings (loss)                          (6,423 )         (11,147 )         17,515           312,295
Net earnings (loss) attributable to
noncontrolling interests                     (2,031 )          (4,064 )          5,512           (22,412 )
Net earnings (loss) attributable to
Bumble Inc. shareholders / Buzz
Holdings L.P. owners                  $      (4,392 )   $      (7,083 )   $     12,003     $     334,707




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The following table sets forth our unaudited condensed consolidated statement of
operations information as a percentage of revenue for the periods presented:


                                        Three Months         Three Months         Six Months          Six Months
                                       Ended June 30,       Ended June 30,        Ended June        Ended June 30,
                                            2022                 2021              30, 2022              2021
Revenue                                          100.0 %              100.0 %            100.0 %             100.0 %
Operating costs and expenses:
Cost of revenue                                   28.5 %               27.3 %             27.7 %              27.6 %
Selling and marketing expense                     27.0 %               26.7 %             26.9 %              27.0 %
General and administrative expense                23.3 %               23.3 %             18.0 %              47.6 %
Product development expense                       10.2 %               13.4 %             11.0 %              16.8 %
Depreciation and amortization
expense                                           12.3 %               14.4 %             12.5 %              15.1 %
Total operating costs and expenses               101.3 %              105.1 %             96.2 %             134.2 %
Operating earnings (loss)                         (1.3 )%              (5.1 )%             3.8 %             (34.2 )%
Interest income (expense)                         (2.8 )%              (3.2 )%            (2.8 )%             (3.8 )%
Other income (expense), net                        2.2 %                2.5 %              4.2 %               3.3 %
Income (loss) before income taxes                 (1.9 )%              (5.7 )%             5.2 %             (34.7 )%
Income tax benefit (provision)                    (1.1 )%              (0.2 )%            (1.1 )%            122.2 %
Net earnings (loss)                               (2.9 )%              (6.0 )%             4.1 %              87.5 %
Net earnings (loss) attributable to
noncontrolling interests                          (0.9 )%              (2.2 )%             1.3 %              (6.3 )%
Net earnings (loss) attributable to
Bumble Inc. shareholders / Buzz
Holdings L.P. owners                              (2.0 )%              (3.8 )%             2.8 %              93.8 %


The following table sets forth the stock-based compensation expense, net of forfeitures, included in operating costs and expenses:


                                          Three Months       Three Months       Six Months         Six Months
                                         Ended June 30,     Ended June 30,      Ended June       Ended June 30,
(In thousands)                                2022               2021            30, 2022             2021
Cost of revenue                          $          971     $          604     $       1,919     $        2,211
Selling and marketing expense                     2,091              2,500               769              7,641
General and administrative expense               12,149             17,960            22,547             37,868
Product development expense                       7,236              8,852            14,769             28,019

Total stock-based compensation expense $ 22,447 $ 29,916

$ 40,004 $ 75,739



On July 15, 2022, the Exit-Vesting awards, with vesting based on certain
performance conditions, were modified to also provide for vesting in 36 equal
installments. We expect to incur incremental non-cash stock based compensation
associated with the modification of these awards. See Note 18, Subsequent
Events, within the unaudited condensed consolidated financial statements
included in this Quarterly Report, for additional information.


Comparison of the Three and Six Months Ended June 30, 2022 and 2021

Revenue


                                       Three Months      Three Months       Six Months       Six Months
                                        Ended June        Ended June        Ended June       Ended June
(In thousands)                           30, 2022          30, 2021          30, 2022         30, 2021
Bumble App                             $     169,608     $     127,319     $    325,028     $    239,955
Badoo App and Other                           50,846            58,898          106,625          116,975
Total Revenue                          $     220,454     $     186,217     $    431,653     $    356,930


Total Revenue for the three months ended June 30, 2022 increased by $34.2 million, or 18.4%, compared to the same period in 2021 primarily driven by growth in Total Paying Users and an increase in Total Average Revenue per Paying User.

                                       44
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Bumble App Revenue for the three months ended June 30, 2022 increased by $42.3 million, or 33.2%, compared to the same period in 2021 driven by a 30.7% increase in Bumble App Paying Users to 1.9 million, and a 2.0% increase in Bumble App Average Revenue per Paying Users.


Badoo App and Other Revenue for the three months ended June 30, 2022, decreased
by $8.1 million, or 13.7%, compared to the same period in 2021. This decrease
was driven by a 24.6% decrease in Badoo App and Other Paying Users to 1.1
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. During the three months
ended June 30, 2022 as compared to March 31, 2022, total paying users decreased
by 136,000 primarily driven by declines in paying users in Russia, Ukraine and
Belarus. We expect the impact of COVID and macroeconomic conditions to continue
to have an adverse impact on Badoo App and Other Paying Users in the third
quarter of 2022

The decline in Badoo App and Other Revenue for the three months ended June 30,
2022 was partially offset by the increase of 5.8% in Badoo App and Other Average
Revenue per Paying Users to $13.60. The increase in Badoo App and Other Average
Revenue per Paying Users was due to product optimization partially offset by
fluctuations in foreign currency exchange rates.

In addition, other revenue of $6.1 million for the three months ended June 30,
2022, increased by $3.3 million, or 117.2% compared to the same period in 2021,
primarily due to Fruitz.

Total Revenue for the six months ended June 30, 2022 increased by $74.7 million, or 20.9%, compared to the same period in 2021 primarily driven by growth in Total Paying Users and an increase in Total Average Revenue per Paying User.

Bumble App Revenue for the six months ended June 30, 2022 increased by $85.1 million, or 35.5%, compared to the same period in 2021 driven by a 30.9% increase in Bumble App Paying Users to 1.8 million, and a 3.4% increase in Bumble App Average Revenue per Paying Users.


Badoo App and Other Revenue for the six months ended June 30, 2022, decreased by
$10.4 million, or 8.8%, compared to the same period in 2021. This decrease was
driven by a 19.8% decrease in 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 expect the impact of COVID and
macroeconomic conditions to continue to have an adverse impact on Badoo App and
Other Paying Users in the third quarter of 2022.

The decline in Badoo App and Other Revenue for the six months ended June 30,
2022 was partially offset by the increase of 5.8% in Badoo App and Other Average
Revenue per Paying Users to $13.55. The increase in Badoo App and Other Average
Revenue per Paying Users was due to product optimization partially offset by
fluctuations in foreign currency exchange rates.

In addition, other revenue of $12.0 million for the six months ended June 30,
2022, increased by $6.6 million, or 122.1% compared to the same period in 2021,
primarily due to Fruitz.

Cost of revenue


                                         Three Months       Three Months       Six Months       Six Months
                                        Ended June 30,     Ended June 30,      Ended June       Ended June
(In thousands, except percentages)           2022               2021            30, 2022         30, 2021
Cost of revenue                         $       62,757     $       50,797     $    119,538     $      98,544
Percentage of revenue                             28.5 %             27.3 %           27.7 %            27.6 %



Cost of revenue for the three months ended June 30, 2022 increased by $12.0
million, or 23.5%, as compared to the same period in 2021 driven primarily by
growth in in-app purchase fees due to increasing revenue. As a percentage of
revenue, cost of revenue was 28.5% for the three months ended June 30, 2022,
compared to 27.3% for the same period in 2021 due to the adoption of Google
Play's billing system partially offset by the reduced Google Play service fees
for subscriptions which has declined from 30% to 15%.

Cost of revenue for the six months ended June 30, 2022 increased by $21.0
million, or 21.3%, as compared to the same period in 2021 driven by growth in
in-app purchase fees due to increasing revenue. As a percentage of revenue, cost
of revenue was 27.7% for the three months ended June 30, 2022, compared to 27.6%
for the same period in 2021 due to the adoption of Google Play's billing system
partially offset by the reduced Google Play service fees for subscriptions which
has declined from 30% to 15%.

We expect cost of revenue as a percentage of revenue to be negatively impacted by additional fees from the adoption of Google Play's billing system by approximately 2% over the remainder of fiscal 2022.

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Selling and marketing expense


                                         Three Months       Three Months       Six Months       Six Months
                                        Ended June 30,     Ended June 30,      Ended June       Ended June
(In thousands, except percentages)           2022               2021            30, 2022         30, 2021
Selling and marketing expense           $       59,483     $       49,711     $    116,312     $      96,549
Percentage of revenue                             27.0 %             26.7 %           26.9 %            27.0 %


Selling and marketing expense for the three months ended June 30, 2022 increased
by $9.8 million, or 19.7%, as compared to the same period in 2021. The change
was primarily due to a $9.5 million increase in digital and social media
marketing costs and a $1.6 million in personnel-related expenses.

Selling and marketing expense for the six months ended June 30, 2022 increased
by $19.8 million, or 20.5%, as compared to the same period in 2021. The change
was primarily due to a $23.2 million increase in digital and social media
marketing costs and a $4.6 million in personnel-related expenses, partially
offset by a $6.9 million decrease in stock-based compensation due to
forfeitures.

General and administrative expense


                                         Three Months       Three Months       Six Months        Six Months
                                        Ended June 30,     Ended June 30,      Ended June        Ended June
(In thousands, except percentages)           2022               2021            30, 2022          30, 2021
General and administrative expense      $       51,375     $       43,381     $      77,821     $    169,905
Percentage of revenue                             23.3 %             23.3 %            18.0 %           47.6 %



General and administrative expense for the three months ended June 30, 2022
increased by $8.0 million, or 18.4%, as compared to the same period in 2021. The
change is primarily driven by a $7.0 million increase in personnel-related
expenses, a $4.4 million right-of-use asset impairment loss related to our
Moscow office, a $1.2 million increase in professional service fees and a $0.8
million net increase in the fair value of the contingent earn-out liabilities.
These increases were partially offset by a $5.8 million decrease in stock-based
compensation.

General and administrative expense for the six months ended June 30, 2022
decreased by $92.1 million, or 54.2%, as compared to the same period in 2021.
The change is primarily driven by a decline of $91.8 million in the fair value
of the contingent earn-out liabilities, a $15.3 million decrease in stock-based
compensation due to forfeitures and a $4.0 million decrease in non-recurring
transaction costs and professional service fees incurred in relation to the IPO
in the three months ended March 2021. These decreases were partially offset by a
$12.9 million increase in personnel-related expenses, a $4.4 million
right-of-use asset impairment loss related to our Moscow office and a $2.8
million increase in insurance expenses.

Product development expense


                                         Three Months       Three Months       Six Months        Six Months
                                        Ended June 30,     Ended June 30,      Ended June        Ended June
(In thousands, except percentages)           2022               2021            30, 2022          30, 2021
Product development expense             $       22,456     $       24,921     $      47,651     $      59,966
Percentage of revenue                             10.2 %             13.4 %            11.0 %            16.8 %



Product development expense in the three months ended June 30, 2022 decreased by
$2.5 million, or 9.9%, as compared to the same period in 2021. The change is
primarily driven by a $1.6 million decrease in stock-based compensation and a
$0.8 million decrease in personnel-related expenses.

Product development expense in the six months ended June 30, 2022 decreased by
$12.3 million, or 20.5%, as compared to the same period in 2021, primarily due
to a $13.2 million decrease in stock-based compensation due to forfeitures.

                                       46
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Depreciation and amortization expense


                                         Three Months       Three Months       Six Months        Six Months
                                        Ended June 30,     Ended June 30,      Ended June        Ended June
(In thousands, except percentages)           2022               2021            30, 2022          30, 2021
Depreciation and amortization expense   $       27,151     $       26,905     $      54,080     $      53,860
Percentage of revenue                             12.3 %             14.4 %            12.5 %            15.1 %



Depreciation and amortization expense for the three months ended June 30, 2022
increased by $0.2 million, or 0.9%, as compared to the same period in 2021. For
the six months ended June 30, 2022, depreciation and amortization expense
increased by $0.2 million, or 0.4%, as compared to the same period in 2021. The
increases in depreciation and amortization expense for the three-month and
six-month periods were due to increases in the amortization of intangibles
acquired from the Fruitz acquisition in January 2022 which was partially offset
by decreases in amortization as a result of the write down of certain white
label contracts in 2021.

Interest income (expense)


                                        Three Months         Three Months        Six Months        Six Months
                                       Ended June 30,       Ended June 30,       Ended June        Ended June
(In thousands, except percentages)          2022                 2021             30, 2022          30, 2021
Interest income (expense)              $        (6,281 )    $       (5,921 )    $    (12,164 )    $    (13,650 )
Percentage of revenue                             (2.8 )%             (3.2 )%           (2.8 )%           (3.8 )%


Interest expense for the three months ended June 30, 2022 increased by $0.4 million, or 6.1%, compared to the same period in 2021 and was due to an increase in interest rates on our outstanding debt under the credit agreements.

Interest expense for the six months ended June 30, 2022 decreased by $1.5 million, or 10.9%, compared to the same period in 2021 as we repaid $200 million of debt in March 2021.


Other income (expense), net


                                         Three Months        Three Months        Six Months        Six Months
                                        Ended June 30,      Ended June 30,       Ended June        Ended June
(In thousands, except percentages)           2022                2021             30, 2022          30, 2021
Other income (expense), net             $         4,954     $         4,731     $      18,184     $      11,722
Percentage of revenue                               2.2 %               2.5 %             4.2 %             3.3 %



Other income (expense), net in the three months ended June 30, 2022 increased by
$0.2 million, or 4.7%, compared to the same period in 2021, primarily due to a
$3.0 million increase in net gain on interest rate swaps, partially offset by a
$2.7 million decrease in net foreign exchange gains.

Other income (expense), net in the six months ended June 30, 2022 increased by
$6.5 million, or 55.1%, compared to the same period in 2021, primarily due to a
$10.9 million increase in net gain on interest rate swaps, partially offset by a
$4.1 million decrease in net foreign exchange gains.

Income tax benefit (provision)


                                         Three Months          Three Months          Six Months       Six Months
                                        Ended June 30,        Ended June 30,         Ended June       Ended June
(In thousands, except percentages)           2022                  2021               30, 2022         30, 2021
Income tax benefit (provision)          $        (2,328 )    $            (459 )    $     (4,756 )   $    436,117
Effective tax rate                                (56.8 )%                (4.3 )%           21.4 %          352.2 %




                                       47
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Income tax provision was $(2.3) million for the three months ended June 30,
2022, compared to $(0.5) million for the same period in 2021. Income tax
provision was $(4.8) million for the six months ended June 30, 2022, compared to
a benefit of $436.1 million for the same period in 2021. The tax benefit of
$436.1 million recorded in the six months ended June 30, 2021 includes a $441.5
million tax benefit related to the reversal of a net deferred tax liability due
to a restructuring of our international operations and a $1.3 million tax
provision associated with prior period items.

Non-GAAP Financial Measures


We report our financial results in accordance with GAAP, however, management
believes that certain non-GAAP financial measures provide users of our financial
information with useful supplemental information that enables a better
comparison of our performance across periods. 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, 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 also provide Adjusted
EBITDA margin, which is calculated as Adjusted EBITDA divided by revenue. 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. Additionally, we believe such metrics are widely used by
investors, securities analysis, ratings agencies and other parties in evaluating
liquidity and debt-service capabilities. We calculate free cash flow and free
cash flow conversion using methodologies that we believe can provide useful
supplemental information to help investors better understand underlying trends
in our business.

Our non-GAAP financial measures may not be comparable to similarly titled
measures used by other companies, have limitations as analytical tools and
should not be considered in isolation, or as substitutes for analysis of our
operating results as reported under GAAP. Additionally, we do not consider our
non-GAAP financial measures as superior to, or a substitute for, the equivalent
measures calculated and presented in accordance with GAAP. 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.


Adjusted EBITDA is not a liquidity measure and should not be considered as
discretionary cash available to us to reinvest in the growth of our business or
to distribute to stockholders or as a measure of cash that will be available to
us to meet our obligations.

To properly and prudently evaluate our business, we encourage you to review the
financial statements included elsewhere in this report, and not rely on a single
financial measure to evaluate our business. We also strongly urge you 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.

                                       48
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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, 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. 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. Operating cash flow conversion represents
net cash provided by (used in) operating activities as a percentage of net
earnings (loss).

The following table reconciles our non-GAAP financial measures to the most comparable GAAP financial measures for the periods presented:


                                            Three Months      Three Months  

Six Months Six Months

                                             Ended June        Ended June        Ended June       Ended June
(In thousands, except percentages)            30, 2022          30, 2021          30, 2022         30, 2021
Net earnings (loss)                         $     (6,423 )    $    (11,147 )    $     17,515     $     312,295
Add back:
Income tax (benefit) provision                     2,328               459             4,756          (436,117 )
Interest (income) expense                          6,281             5,921            12,164            13,650
Depreciation and amortization                     27,151            26,905            54,080            53,860
Stock-based compensation expense                  22,447            29,916            40,004            75,739
Employer costs related to stock-based
compensation (1)                                     125                 -             1,197                 -
Litigation costs, net of insurance
reimbursements (2)                                 1,023             1,541             3,841             1,775
Foreign exchange (gain) loss (3)                  (2,104 )          (4,796 )          (4,499 )          (8,639 )
Changes in fair value of interest rate
swaps(4)                                          (2,813 )             201           (13,630 )          (2,743 )
Transaction and other costs(5)                     1,055             2,522             4,164            16,024
Changes in fair value of contingent
earn-out liability                                 1,314               484           (19,395 )          72,438
Changes in fair value of investments                   -              (123 )               -              (319 )
Impairment loss (6)                                4,388                 -             4,388                 -
Adjusted EBITDA                             $     54,772      $     51,883      $    104,585     $      97,963
Net earnings (loss) margin(7)                       (2.9 )%           (6.0 )%            4.1 %            87.5 %
Adjusted EBITDA margin                              24.8 %            27.9 %            24.2 %            27.4 %

Net cash provided by (used in) operating
activities                                                                      $     44,767     $     (31,439 )
Less:
Capital expenditures                                                                  (8,049 )          (5,552 )
Free cash flow                                                                  $     36,718     $     (36,991 )
Operating cash flow conversion                                                         255.6 %           (10.1 )%
Free cash flow conversion                                                               35.1 %           (37.8 )%




(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.

(2)

Represents certain litigation costs and insurance proceeds associated with pending litigations or settlements of litigation.

(3)

Represents foreign exchange (gain) loss due to foreign currency transactions.

(4)

Represents fair value gain on interest rate swaps.

(5)

Represents transaction costs related to acquisitions and our offerings (IPO, the
Reorganization and the secondary offering) such as legal, accounting, advisory
fees and other related costs. Amounts for 2022 also include employee-related
restructuring costs directly associated with our decision to discontinue our
operations in Russia including severance benefits, relocation and advisory fees.

(6)

Represents impairment loss of a right-of-use asset related to our Moscow office.

(7)

Net earnings margin for the six months ended June 30, 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.


                                       49
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Liquidity and Capital Resources

Overview


The Company's principal sources of liquidity are our cash and cash equivalents
and cash generated from operations. Our primary uses of liquidity are operating
expenses and capital expenditures. As of June 30, 2022, we had $334.6 million of
cash and cash equivalents, a decrease of $34.5 million from December 31, 2021
primarily due to the acquisition of Fruitz.

In connection with our IPO, we used the proceeds (net of underwriting discounts)
from the issuance of 9.0 million shares of Class A common stock ($369.6 million)
in the IPO to purchase an equivalent number of newly issued Common Units from
Bumble Holdings, which Bumble Holdings used to repay outstanding indebtedness
under our Incremental Term Loan Facility totaling $200.0 million in aggregate
principal amount and allocated $169.9 million to be used for general corporate
purposes, to bear all of the expenses of the IPO and we expect that our future
principal uses of cash will also include funding our debt obligations and paying
income taxes and obligations under our tax receivable agreement. Based on
current conditions, we believe that we have sufficient financial resources to
fund our activities and execute our business plans during the next twelve
months.

Cash Flow Information

The following table summarizes our unaudited condensed consolidated cash flow information for the periods presented:


                                                         Six Months          Six Months
                                                       Ended June 30,      Ended June 30,
(In thousands)                                              2022                2021
Net cash provided by (used in):
Operating activities                                   $        44,767     $       (31,439 )
Investing activities                                           (77,769 )            (5,549 )
Financing activities                                            (9,069 )           160,621




Operating activities

Net cash provided by (used in) operating activities was $44.8 million for the
six months ended June 30, 2022, and $(31.4) million for the six months ended
June 30, 2021. This includes adjustments to net earnings (loss) for the six
months ended June 30, 2022 and June 30, 2021 related to: deferred income tax of
$(3.3) million and $(441.8) million, respectively; change in fair value of
deferred contingent consideration of $(19.4) million and $72.4 million,
respectively; stock-based compensation of $40.0 million and $75.7 million,
respectively; and depreciation and amortization of $54.1 million and $53.9
million, respectively.

The changes in assets and liabilities for the six months ended June 30, 2022 and
2021 consist primarily of: changes in legal liabilities of $(7.1) million and
$(37.6) million, respectively; and changes in accounts receivables of $(3.7)
million and $(25.7) million, respectively, driven by timing of cash receipts.

Investing activities


Net cash used in investing activities was $77.8 million and $5.5 million for the
six months ended June 30, 2022 and 2021, respectively. The change was primarily
due to the acquisition of Fruitz (net of cash acquired) of $69.7 million in the
six months ended June 30, 2022. In addition, the Company had capital
expenditures of $(8.0) million and $(5.6) million in the six months ended June
30, 2022 and 2021, respectively.

Financing activities


Net cash provided by (used in) financing activities was $(9.1) million and
$160.6 million in the six months ended June 30, 2022 and 2021, respectively. In
the six months ended June 30, 2022, the Company used $(6.2) million for shares
withheld to satisfy employee tax withholding requirements upon vesting of
restricted stock units, and $(2.9) million to repay a portion of the outstanding
indebtedness under our Original Term Loan. In the six months ended June 30,
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 $(206.1) million was used to repay a portion of the outstanding indebtedness
under our Incremental Term Loan Facility.


                                       50
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Indebtedness

Senior Secured Credit Facilities


In connection with the Sponsor Acquisition, in January 2020, we entered into the
Initial 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. In connection with the Distribution Financing Transaction, in
October 2020, we entered into the Incremental Term Loan Facility (the
"Incremental Term Loan Facility") in an original aggregate principal amount of
$275.0 million. 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). A portion of the net proceeds from the
initial public offering was used to repay $200 million aggregate principal
amount of our outstanding indebtedness under our Term Loan Facility in the three
months ended March 31, 2021. The borrower under the Senior Secured Credit
Facilities is a wholly owned subsidiary of Bumble Holdings, Buzz Finco L.L.C.
(the "Borrower"). The Senior Secured Credit Facilities contain affirmative and
negative covenants and customary events of default.


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 Initial 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. 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.


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. The Borrower must also pay
customary letter of credit fees and an annual administrative agency fee.


The Initial Term Loan Facility amortizes in equal quarterly installments in
aggregate annual amounts equal to 1.00% of the principal amount of the Initial
Term Loan Facility outstanding as of the date of the closing of the Initial Term
Loan Facility, with the balance being payable at maturity on January 29, 2027.
The Incremental Term Loan Facility amortizes in equal quarterly installments in
aggregate annual amounts equal to 1.00% of the principal amount of the
Incremental Term Loan Facility outstanding as of the date of the closing of the
Incremental Term Loan Facility, with the balance being payable at maturity on
January 29, 2027. Following the $200 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.


Tax Receivable Agreement



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.


We estimate the amount of existing tax basis with respect to which our pre-IPO
owners will be entitled to receive payments under the tax receivable agreement
(assuming all Pre-IPO Common Unitholders exchanged their Common Units for shares
of Class A common stock on the date of the initial public offering, and assuming
all vested Incentive Units were converted to Common Units and subsequently
exchanged for shares of Class A common stock at the initial public offering
price of $43.00 per share of Class A common stock) is approximately $2,603.7
million, which includes the Company's allocable share of existing tax basis
acquired in this IPO, which we have determined to be approximately $1,728.1
million. In determining the Company's allocable share of existing tax basis
acquired in the IPO, we have given retrospective effect to certain exchanges of
Common Units for Class A shares that occurred following the IPO that were
contemplated to have occurred pursuant to the Blocker Restructuring. The
payments under the tax receivable agreement are not conditioned upon continued
ownership of the Company by the pre-IPO owners.

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Contractual Obligations and Contingencies


The following table summarizes our contractual obligations as of June 30, 2022:

                                          Payments due by period
                    Less than       1 to 3       3 to 5        More than
(In thousands)       1 year         years         years         5 years         Total
Long-term debt     $     5,750     $ 11,500     $ 618,438     $         -     $ 635,688
Operating leases         5,262        8,156         9,793           5,328        28,539
Other                    2,142        2,973             -               -         5,115
Total              $    13,154     $ 22,629     $ 628,231     $     5,328     $ 669,342


The payments that we may be required to make under the tax receivable agreement
to the pre-IPO owners may be significant and are not reflected in the
contractual obligations table set forth above as they are dependent upon future
taxable income. 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 $660.3
million and to range over the next 15 years from approximately $10.9 million to
$58.5 million per year and decline thereafter. In determining these estimated
future payments, we have given retrospective effect to certain exchanges of
Common Units for Class A shares that occurred after the IPO but were
contemplated to have occurred pursuant to the Blocker Restructuring. The
foregoing numbers are merely estimates, and the actual payments could differ
materially. See "- Tax Receivable Agreement."

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. In
addition, we entered into a contingent consideration arrangement for an earn-out
payment of up to $10 million in connection with our January 2022 acquisition of
Fruitz. 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. See Note 5, Business Combination, for additional information on the
Fruitz acquisition.

Critical Accounting Policies and Estimates


We have discussed the estimates and assumptions that we believe are critical
because they involve a higher degree of judgment in their application and are
based on information that is inherently uncertain in our Annual Report on Form
10-K for the year ended December 31, 2021. There have been no significant
changes to these accounting policies and estimates for the six months ended June
30, 2022, except as described below.

Restructuring charges, associated with office closure or exiting a market,
consist primarily of severance, relocation, right-of-use asset impairment and
other related costs. The Company evaluates the nature of these costs to
determine if they relate to ongoing benefit arrangements which are accounted for
under ASC 712, Compensation - Nonretirement Postemployment Benefits, or one-time
benefit arrangements which are accounted for under ASC 420, Exit or Disposal
Cost Obligations. The Company records a liability for ongoing employee
termination benefits when it is probable that an employee is entitled to them
and the amount of the benefits can be reasonably estimated. One-time employee
termination costs are recognized when management has communicated the
termination plan to employees, unless future service is required, in which case
the costs are recognized ratably over the future service period. All other
related costs are recognized when incurred. See Note 8, Restructuring, for
additional information.

Related Party Transactions

For discussions of related party transactions, see Note 15, Related Party Transactions, to the condensed consolidated financial statements included in "Item 1 - Financial Statements (Unaudited)".

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