10-Q

Bumble Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Cash flows from operating activities:
Net earnings (loss)	$	(2,329	)	$	23,748
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		16,731			26,929
Changes in fair value of interest rate swaps		4,233			(10,817	)
Changes in fair value of contingent earn-out liability		(646	)		(20,709	)
Non-cash lease expense		862			1,169
Deferred income tax		(2,721	)		(2,479	)
Stock-based compensation expense		28,584			17,557
Net foreign exchange difference		(1,990	)		(7,822	)
Research and development tax credit		(292	)		(323	)
Other, net		12,147			10,513
Changes in assets and liabilities:
Accounts receivable		(26,034	)		494
Other current assets		(7,060	)		(5,989	)
Accounts payable		6,037			(10,355	)
Deferred revenue		1,021			106
Legal liabilities		—			(750	)
Lease liabilities		(959	)		(1,201	)
Accrued expenses and other current liabilities		(14,164	)		(718	)
Other, net		(31	)		5
Net cash provided by (used in) operating activities		13,389			19,358
Cash flows from investing activities:
Capital expenditures		(6,811	)		(4,996	)
Acquisition of business, net of cash acquired		—			(69,720	)
Net cash provided by (used in) investing activities		(6,811	)		(74,716	)
Cash flows from financing activities:
Repayment of term loan		(1,438	)		(1,438	)
Distributions paid to non-controlling interest holders		(5,409	)		—
Withholding tax paid on behalf of employees on stock-based awards		(9,321	)		(5,708	)
Net cash provided by (used in) financing activities		(16,168	)		(7,146	)
Effects of exchange rate changes on cash and cash equivalents		(4,261	)		2,117
Net increase (decrease) in cash and cash equivalents and restricted cash		(13,851	)		(60,387	)
Cash and cash equivalents and restricted cash, beginning of the period		407,042			369,175
Cash and cash equivalents and restricted cash, end of the period		393,191			308,788
Less restricted cash		(4,236	)		—
Cash and cash equivalents, end of the period	$	388,955		$	308,788

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Bumble Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 - Organization and Basis of Presentation

Company Overview

Bumble Inc.’s main operations are providing online dating and social networking applications through subscription and in-app purchases of products servicing North America, Europe and various other countries around the world. Bumble Inc. provides these services through websites and applications that it owns and operates.

Bumble Inc. (the "Company" or "Bumble") was incorporated as a Delaware corporation on October 5, 2020 for the purpose of facilitating an initial public offering (“IPO”) and other related transactions in order to operate the business of Buzz Holdings L.P. (“Bumble Holdings”) and its subsidiaries.

Prior to the IPO and the Reorganization Transactions, Bumble Holdings L.P. ("Bumble Holdings"), a Delaware limited partnership, was formed primarily as a vehicle to finance the acquisition (the “Sponsor Acquisition”) of a majority stake in Worldwide Vision Limited by a group of investment funds managed by Blackstone Inc. (“Blackstone” or our "Sponsor"). As Bumble Holdings did not have any previous operations, Worldwide Vision Limited, a Bermuda exempted limited company, is viewed as the predecessor to Bumble Holdings and its consolidated subsidiaries. Accordingly, these consolidated financial statements include certain historical consolidated financial and other data for Worldwide Vision Limited for periods prior to the completion of the business combination.

On February 16, 2021, the Company completed its IPO of 57.5 million shares of Class A common stock at an offering price of $43 per share and received net proceeds of $2,361.2 million after deducting underwriting discounts and commissions. The Company used the proceeds from the issuance of 48.5 million shares ($1,991.6 million) to redeem shares of Class A common stock and purchase limited partnership interests of Bumble Holdings ("Common Units") from entities affiliated with our Sponsor, at a price per share / Common Unit equal to the IPO price, net of underwriting discounts and commissions.

In connection with the IPO, the organizational structure was converted to an umbrella partnership-C-Corporation with Bumble Inc. becoming the general partner of Bumble Holdings. The Reorganization Transactions were accounted for as a transaction between entities under common control. As a result, the financial statements for periods subsequent to the Sponsor Acquisition and prior to the IPO and the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. As the general partner, Bumble Inc. operates and controls all of the business and affairs, and through Bumble Holdings and its subsidiaries, conducts the business. Bumble Inc. consolidates Bumble Holdings in its consolidated financial statements and reports a noncontrolling interest related to the Common Units held by the pre-IPO common unitholders and the incentive units held by the continuing incentive unitholders in the consolidated financial statements.

Assuming the exchange of all outstanding Common Units for shares of Class A common stock on a one-for-one basis under the exchange agreement entered into by holders of Common Units, there would be 189,098,564 shares of Class A common stock outstanding (which does not reflect any shares of Class A common stock issuable in exchange for as-converted Incentive Units or upon settlement of certain other interests) as of March 31, 2023.

All references to the “Company”, “we”, “our” or “us” in this report are to Bumble Inc.

Secondary Offerings

On September 15, 2021, the Company completed a secondary offering of 20.70 million shares of Class A common stock on behalf of certain selling stockholders affiliated with Blackstone (the "Blackstone Selling Stockholders") at a price of $54.00 per share. This transaction resulted in the issuance of 9.2 million shares of Class A common stock for the period ending September 30, 2021.

On March 8, 2023, the Company completed a secondary offering of 13.75 million shares of Class A common stock on behalf of the Blackstone Selling Stockholders and the Founder at a price of $22.80 per share. This transaction resulted in the issuance of 7.2 million shares of Class A common stock for the period ending March 31, 2023.

Bumble did not sell any shares of Class A common stock in the secondary offerings and did not receive any of the proceeds from the sales. Bumble paid the costs associated with the sale of shares by the Blackstone Selling Stockholders and the Founder, net of the underwriting discounts.

Basis of Presentation and Consolidation

The unaudited condensed consolidated financial statements that accompany these notes include the financial statements of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. Intercompany transactions and balances have been eliminated. The unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, consistent in all material respects with those applied in the Company's 2022 Form 10-K. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated statements and notes thereto included in the 2022 Form 10-K.

A noncontrolling interest in a consolidated subsidiary represents the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to the Company. Noncontrolling interests are presented as a separate component of equity in the consolidated balance sheets and the presentation of net income is modified to present earnings and other comprehensive income attributed to controlling and noncontrolling interests. The Company’s noncontrolling interest represents substantive profit-sharing arrangements and profit and losses are attributable to controlling and noncontrolling interests using an attribution method.

Reclassification

Beginning on January 1, 2023, the Company reclassified certain employee and non-employee related expenses that support engineering, data design and product management, as well as maintenance and support costs for technology infrastructure, from "General and administrative expense" to "Product and development expense" in the Condensed Consolidated Statement of Operations to align with operational functions. The Company has reclassified $2.6 million of expenses for the three months ended March 31, 2022 to conform to the current year presentation.

Note 2 - Summary of Selected Significant Accounting Policies

Included below are selected significant accounting policies including those that were added or modified during the three months ended March 31, 2023 as a result of new transactions entered into or the adoption of new accounting policies. Refer to Note 2, Summary of Selected Significant Accounting Policies, within the annual consolidated financial statements in our 2022 Form 10-K for the full list of our significant accounting policies.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses. The Company’s significant estimates relate to business combinations, asset impairments, potential obligations associated with legal contingencies, the fair value of contingent consideration, the fair value of derivatives, stock-based compensation, tax receivable agreements, and income taxes.

These estimates are based on management’s best estimates and judgment. Actual results may differ from these estimates. Estimates, judgments and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions, judgments and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include cash in banks, cash on hand, cash in electronic money accounts, overnight deposits and investment in money market funds.

As of March 31, 2023 and December 31, 2022, the Company has classified the cash held in Russia as restricted cash due to the sanctions imposed by the Russia-Ukraine Conflict, which is included in “Other noncurrent assets” within the accompanying condensed consolidated balance sheets.

Revenue Recognition

The Company recognizes revenue from services in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, the Company recognizes revenue when or as the Company’s performance obligations are satisfied by transferring control of the promised services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps as prescribed by ASC 606:

(i)

identify the contract(s) with a customer;

(ii)

identify the performance obligations in the contract;

(iii)

determine the transaction price;

(iv)

allocate the transaction price to the performance obligations in the contract; and

(v)

recognize revenue when (or as) the entity satisfies performance obligations.

The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assess whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Revenue is primarily derived in the form of recurring subscriptions and in-app purchases. 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. Unused in-app purchase fees expire and are recognized as revenue after six months. The Company also earns revenue from online advertising and partnerships. Online advertising revenue is recognized when an advertisement is displayed. Revenue from partnerships is recognized according to the contractual terms of the partnership.

As permitted under the practical expedient available under ASC 606, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, and (ii) contracts for which the Company recognizes revenue at the amount which it has the right to invoice for services performed.

During the three months ended March 31, 2023 and 2022, there were no customers representing greater than 10% of total revenue.

For the periods presented, revenue across apps was as follows (in thousands):


	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Bumble App	$	194,277	$	154,367
Badoo App and Other		48,671		55,663
Total Revenue	$	242,948	$	210,030

Deferred Revenue

Deferred revenue consists of advance payments that are received or are contractually due in advance of the Company's performance. The Company’s deferred revenue is reported on a contract by contract basis at the end of each reporting period. The Company classifies deferred revenue as current when the term of the applicable subscription period or expected completion of the performance obligation is one year or less. The deferred revenue balance is $47.1 million and $46.1 million as of March 31, 2023 and December 31, 2022, respectively, all of which is classified as a current liability. During the three months ended March 31, 2023 and 2022, the Company recognized revenue of $34.5 million and $29.8 million, which was included in the deferred revenue balance at the beginning of each respective period.

Fair Value Measurements

The Company follows ASC 820, Fair Value Measurement, for financial assets and liabilities measured at fair value on a recurring basis. The Company uses the fair value hierarchy to categorize the financial instruments measured at fair value based on the available inputs to the valuation and the degree to which they are observable or not observable in the market.

The three levels of the fair value hierarchy are as follows:


	•	Level 1 - Quoted prices in active markets for identical assets or liabilities.


	•	Level 2 - Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.


	•	Level 3 - Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available.

See Note 8, Fair Value Measurements, for additional information.

Stock-Based Compensation

The Company issues stock-based awards to employees that are generally in the form of stock options, restricted shares, incentive units, or restricted stock units (“RSUs”). Compensation cost for equity awards is measured at their grant-date fair value, and in the case of restricted shares and RSUs is estimated based on the fair value of the Company’s underlying common stock. The grant date fair value of stock options is estimated using the Black-Scholes option pricing model for time-vesting awards or a Monte Carlo simulation approach in an option pricing framework for exit-vesting awards. These require management to make assumptions with respect to the fair value of the Company’s equity award on the grant date, including the expected term of the award, the expected volatility of the Company’s stock calculated based on a period of time generally commensurate with the expected term of the award, risk-free interest rates and expected dividend yields of the Company’s stock. For time-vesting awards, compensation cost is recognized over the requisite service period, which is generally the vesting period, using the graded attribution method. For performance-based stock awards, compensation expense is recognized over the requisite service period on a straight-line basis when achievement is probable. At the IPO date, the Company concluded that our public offering represented a qualifying liquidity event that would cause the performance conditions to be probable of occurring.

For periods prior to the Company’s IPO, the grant date fair value of stock-based compensation awards and the underlying equity were determined on each grant date using a Monte Carlo model. As the Company's equity was not publicly traded, there was no history of market prices for the Company's equity. Thus, estimating grant date fair value required the Company to make assumptions, including the value of the Company's equity, expected time to liquidity, and expected volatility.

See Note 11, Stock-based Compensation, for a discussion of the Company’s stock-based compensation plans and awards.

Recently Adopted Accounting Pronouncement

In March 2020, FASB issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and then subsequent amendments, which provide optional guidance and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued. In December 2022, the FASB issued ASU 2022-06 Reference Rate Reform (Topic 848) - Deferral of the Sunset Date of Topic 848 (ASU 2022-06), which extends the optional transition relief to ease the potential burden in accounting for reference rate reform on financial reporting. The transition relief is provided through December 30, 2024 based on the expectation that the LIBOR will cease to be published as of June 30, 2023. The amendments are effective prospectively at any point through December 31, 2024.

The Company utilized the LIBOR transition relief for the amendments to its credit agreement and interest rate swaps. The Company implemented its transition plan toward the cessation of LIBOR and modified its financial instruments with attributes that are either directly or indirectly influenced by LIBOR. The adoption of Topic 848 did not have a material impact on the Company's consolidated financial statements and disclosures.

Note 3 - Income Taxes

The Company is subject to U.S. federal and state income taxes and files consolidated income tax returns for U.S. federal and certain state jurisdictions with respect to its allocable share of any net taxable income of Bumble Holdings. For the three months ended March 31, 2023, the Company's effective tax rate was 920.1% which differs from the U.S. federal statutory tax rate of 21% primarily due to the geographical distribution of our earnings, income attributable to non-controlling interests, nondeductible stock-based compensation, and a valuation allowance recorded against certain deferred tax assets arising in the current year. Our effective tax rate for the three months ended March 31, 2023 is also impacted by the near break-even income before income taxes for the period.

For the three months ended March 31, 2022, the Company's effective tax rate was 10.9% which is lower than the U.S. federal statutory tax rate of 21% primarily due to the geographical distribution of our earnings, income attributable to non-controlling interests, nondeductible stock-based compensation, and a valuation allowance recorded against certain deferred tax assets arising in the current year.

Note 4 - Payable to Related Parties Pursuant to a 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 and other tax benefits related to entering into the tax receivable agreement. 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 tax benefits related to certain basis adjustments and acquired net operating losses 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 March 31, 2023. The realizability of the deferred tax assets 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 realizability of the deferred tax assets 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. At the time of the Sponsor Acquisition, the assets and liabilities of Bumble Holdings were adjusted to fair value on the closing date of the business combination for both financial reporting and income tax purposes. As a result of the IPO transaction, we inherited certain tax benefits associated with this stepped-up basis (“Common Basis”) created when certain pre-IPO owners acquired their interests in Bumble Holdings in the Sponsor Acquisition. This Common Basis entitles us to the depreciation and amortization deductions previously allocable to the pre-IPO owners. Based on current projections, we anticipate having sufficient taxable income to be able to realize the benefit of this Common Basis and have recorded a tax receivable agreement liability to related parties of $425.7 million related to these benefits as of March 31, 2023, of which $8.9 million is included in "Accrued expenses and other current liabilities." To the extent that we determine that we are able to realize the tax benefits associated with the basis adjustments and net operating losses, we would record an additional liability of $298.0 million for a total liability of $723.7 million. If, in the future, we are not able to utilize the Common Basis, we would record a reduction in the tax receivable agreement liability to related parties that would result in a benefit recorded within our consolidated statement of operations. During the three months ended March 31, 2023, our tax receivable agreement liability increased by $31.4 million principally due to the effects of the March 2023 secondary offering of 13.75 million shares of Class A common stock of certain selling stockholders and the Founder.

Note 5 - Property and Equipment, net

A summary of the Company’s property and equipment, net is as follows (in thousands):


	March 31, 2023			December 31, 2022
Computer equipment	$	27,137		$	22,366
Leasehold improvements		5,904			6,135
Furniture and fixtures		925			875
Total property and equipment, gross	$	33,966		$	29,376
Accumulated depreciation		(16,666	)		(14,909	)
Total property and equipment, net	$	17,300		$	14,467

Depreciation expense related to property and equipment, net for the three months ended March 31, 2023 and 2022 was $2.5 million and $2.3 million, respectively.

Note 6 - Goodwill and Intangible Assets, net

Goodwill

The changes in the carrying amount of goodwill for the periods presented is as follows (in thousands):


Balance as of December 31, 2022	$	1,579,770
Foreign currency translation adjustment		746
Balance as of March 31, 2023	$	1,580,516

There were no impairment charges recorded for goodwill for the three months ended March 31, 2023 and 2022.

Intangible Assets, net

A summary of the Company’s intangible assets, net is as follows (in thousands):


	March 31, 2023
	Gross Carrying Amount		Accumulated Amortization			Accumulated Impairment Losses			Net Carrying Amount		Weighted- Average Remaining Useful Life (Years)
Bumble and Badoo brands	$	1,511,269	$	—		$	(141,000	)	$	1,370,269	Indefinite
Fruitz brand		36,963		(2,875	)		—			34,088		13.8
Developed technology		248,801		(156,210	)		—			92,591		1.9
User base		113,502		(112,930	)		—			572		—
White label contracts		33,384		(6,953	)		(26,431	)		—		—
Other		20,274		(4,419	)		—			15,855		4.2
Total intangible assets, net	$	1,964,193	$	(283,387	)	$	(167,431	)	$	1,513,375


	December 31, 2022
	Gross Carrying Amount		Accumulated Amortization			Accumulated Impairment Losses			Net Carrying Amount		Weighted- Average Remaining Useful Life (Years)
Bumble and Badoo brands	$	1,511,269	$	—		$	(141,000	)	$	1,370,269	Indefinite
Fruitz brand		36,280		(2,217	)		—			34,063		14.1
Developed technology		248,727		(143,704	)		—			105,023		2.1
User base		113,487		(112,877	)		—			610	—
White label contracts		33,384		(6,953	)		(26,431	)		—		—
Other		17,761		(3,298	)		—			14,463		4.3
Total intangible assets, net	$	1,960,908	$	(269,049	)	$	(167,431	)	$	1,524,428

Amortization expense related to intangible assets, net for the three months ended March 31, 2023 and 2022 was $14.3 million and $24.6 million, respectively.

As of March 31, 2023, amortization of intangible assets with definite lives is estimated to be as follows (in thousands):


Remainder of 2023	$	42,853
2024		56,795
2025		10,389
2026		3,341
2027 and thereafter		26,969
Total	$	140,347

Note 7 - Other Financial Data

Consolidated Balance Sheets Information

Other current assets are comprised of the following balances (in thousands):


	March 31, 2023		December 31, 2022
Capitalized aggregator fees	$	11,527	$	10,917
Prepayments		15,615		9,201
Income tax receivable		4,590		4,491
Other receivables		7,516		7,273
Total other current assets	$	39,248	$	31,882

Accrued expenses and other current liabilities are comprised of the following balances (in thousands):


	March 31, 2023		December 31, 2022
Legal liabilities	$	20,535	$	20,501
Payroll and related expenses		8,438		20,814
Marketing expenses		19,338		19,874
Other accrued expenses		14,203		14,536
Lease liabilities		2,646		3,135
Income tax payable		8,033		3,092
Contingent earn-out liability		51,681		52,327
Payable to related parties pursuant to a tax receivable agreement		8,947		8,826
Other payables		12,532		13,338
Total accrued expenses and other current liabilities	$	146,353	$	156,443

Other non-current liabilities are comprised of the following balances (in thousands):


	March 31, 2023		December 31, 2022
Lease liabilities	$	13,834	$	13,750
Other liabilities		858		838
Total other liabilities	$	14,692	$	14,588

Note 8 - Fair Value Measurements

The following tables present the Company’s financial instruments that are measured at fair value on a recurring basis (in thousands):


	March 31, 2023
	Level 1		Level 2		Level 3		Total Fair Value Measurements
Assets:
Cash equivalent - money market funds	$	264,909	$	—	$	—	$	264,909
Derivative asset		—		17,861		—		17,861
Investments in equity securities		—		—		2,486		2,486
	$	264,909	$	17,861	$	2,486	$	285,256
Liabilities:
Contingent earn-out liability	$	—	$	—	$	51,681	$	51,681
	$	—	$	—	$	51,681	$	51,681


	December 31, 2022
	Level 1		Level 2		Level 3		Total Fair Value Measurements
Assets:
Cash equivalent - money market funds	$	322,409	$	—	$	—	$	322,409
Derivative asset		—		22,094		—		22,094
Investments in equity securities		—		—		2,577		2,577
	$	322,409	$	22,094	$	2,577	$	347,080
Liabilities:
Contingent earn-out liability	$	—	$	—	$	52,327	$	52,327
	$	—	$	—	$	52,327	$	52,327

There were no transfers between levels between March 31, 2023 and December 31, 2022.

The carrying value of accounts receivable, accounts payable, income tax payable, accrued expenses and other payables approximate their fair values due to the short-term maturities of these instruments.

The Company’s contingent earn-out liability is measured at fair value on a recurring basis using significant unobservable inputs (Level 3) and totaled $51.7 million and $52.3 million as of March 31, 2023 and December 31, 2022, respectively. Contingent earn-out liability is included in “Accrued expenses and other current liabilities” in the accompanying condensed consolidated balance sheets.

As of March 31, 2023, there is a contingent consideration arrangement, consisting of an earn-out payment to former shareholders of Worldwide Vision Limited of up to $150 million. The Company determined the fair value of the contingent earn-out liability by using a probability-weighted analysis to determine the amount of the liabilities, and, if the arrangement is long-term in nature, applying a discount rate that captures the risks associated with the duration of the obligation. The number of scenarios in the probability-weighted analyses vary; generally, more scenarios are prepared for longer duration and more complex arrangements. As of March 31, 2023 and December 31, 2022, the fair value of the contingent earn-out liability reflects a risk-free rate of 4.6% and 4.7%, respectively.

In addition, there is a contingent consideration arrangement, consisting of an earn-out payment of up to $10 million in connection with the acquisition of Fruitz in January 2022. As of March 31, 2023, the balance of the contingent earn-out liability was $0.

The Company classified contingent earn-out arrangements as liabilities at the time of the acquisition, as they will be settled in cash, and remeasures the fair values of the contingent earn-out liabilities each reporting period thereafter until settled. The fair value of the contingent earn-out liabilities are sensitive to changes in the forecasts of earnings and/or the relevant operating metrics and changes in discount rates. Changes in fair values of contingent earn-out liabilities are recognized in “General and administrative expense” in the accompanying condensed consolidated statements of operations. The change in fair value of the contingent earn-out liability was $(0.6) million and $(20.7) million for the three months ended March 31, 2023 and 2022, respectively.

Note 9 - Debt

Total debt is comprised of the following (in thousands):


	March 31, 2023		December 31, 2022
Term Loan due January 29, 2027	$	631,375	$	632,813
Less: unamortized debt issuance costs		7,420		7,840
Less: current portion of debt, net		5,750		5,750
Total long-term debt, net	$	618,205	$	619,223

Credit Agreements

On January 29, 2020, the Company and the wholly-owned subsidiaries, Buzz Bidco LLC, Buzz Merger Sub Limited, and Buzz Finco LLC (the “Borrower”) entered into a credit agreement (the “Original Credit Agreement”). The Original Credit Agreement permitted the Company to borrow up to $625.0 million through a seven-year $575.0 million term loan (“Original Term Loan”), as well as a five-year senior secured revolving credit facility of $50.0 million (the "Revolving Credit Facility") and $25.0 million available through letters of credit. In connection with the Original Credit Agreement, the Company incurred and paid debt issuance costs of $16.3 million during the year ended December 31, 2020.

On October 19, 2020, the Company entered into the Amendment No.1 to the Credit Agreement, which provides for incremental borrowing of an aggregate principal amount of $275.0 million (the “Incremental Term Loan”, and collectively with the Original Term Loan, the “Term Loans”). The terms of the Amendment No.1 to the Credit Agreement were unchanged from the Original Credit Agreement, and the sole purpose of the amendment was to increase the principal available to the Company. In connection with the Amendment No.1 to the Credit Agreement, the Company incurred and paid debt issuance costs of $4.8 million during the year ended December 31, 2020, of which approximately $1.6 million was capitalized as debt issuance costs.

On March 31, 2021, the Company used proceeds from the IPO to repay outstanding indebtedness on the Incremental Term Loan Facility in an aggregate principal amount of $200.0 million, which has prepaid our obligated principal repayments until maturity on the Incremental Term Loan and, as a result, has reduced our contractual obligations. In connection with the repayment, the Company recognized a $3.4 million loss on extinguishment of long-term debt.

On March 20, 2023, in connection with a Benchmark Discontinuation Event, the Company entered into Amendment No. 2 to the Original Credit Agreement (“Amendment No. 2”), which provided for the transition of the benchmark interest rate from LIBOR to the Secured Overnight Financing Rate ("SOFR") pursuant to benchmark replacement provisions set forth in the Original Credit Agreement. Pursuant to the terms of Amendment No. 2, effective with the interest period beginning March 31, 2023, LIBOR was replaced with Term SOFR, a forward-looking term rate based on SOFR, plus a credit spread adjustment of 0.10% with respect to the Term Loans and 0.00% with respect to loans under the Revolving Credit Facility (Term SOFR plus such credit spread adjustment, “Adjusted Term SOFR”). All other terms of the Original Credit Agreement unrelated to the benchmark replacement and its incorporation were unchanged by Amendment No. 2. Effective March 31, 2023 all Term Loans outstanding are bearing interest based on Adjusted Term SOFR and there were no Revolving Credit Loans outstanding.

Based on the calculation of the applicable consolidated first lien net leverage ratio, the applicable margin for borrowings under the Revolving Credit Facility is between 1.00% to 1.50% with respect to base rate borrowings and between 2.00% and 2.50% with respect to (i) prior to March 31, 2023, LIBOR rate borrowings and (ii) on or after April 1, 2023, Adjusted Term SOFR borrowings. The applicable commitment fee under the revolving credit facility is between 0.375% and 0.500% per annum based upon the consolidated first lien net leverage ratio, The Borrower must also pay customary letter of credit fees and an annual administrative agency fee.

The interest rates in effect for the Original Term Loan and the Incremental Term Loan as of March 31, 2023 were 7.38% and 7.88%, respectively. The Original Term Loan Facility amortizes in equal quarterly installments in aggregate annual amounts equal to 1.00% of the principal amount of the Original Term Loan Facility outstanding as of the date of the closing of the Original 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 $200.0 million aggregate principal payment of amount of outstanding indebtedness during the three months ended March 31, 2021 quarterly installment payments on the Incremental Term Loan Facility are no longer required for the remaining term of the facility. Principal amounts outstanding under the Revolving Credit Facility are due and payable in full at maturity on January 29, 2025. As of March 31, 2023, and at all times during the three month period ended March 31, 2023, the Company was in compliance with the financial debt covenants.

As the loans are issued with a floating rate of interest, the Company believes that the fair value of the obligations is approximated by the principal amount of the loans as of March 31, 2023. The carrying value of the Term Loans includes the outstanding principal amount, less unamortized debt issuance costs. Therefore, the Company assumes the carrying value of the debt, before any transaction costs, would closely approximate the fair value of the loan obligation with the assumptions above.

Future maturities of long-term debt as of March 31, 2023, were as follows (in thousands):


Remainder of 2023	$	4,313
2024		5,750
2025		5,750
2026		5,750
2027 and thereafter		609,812
Total	$	631,375

Note 10 - Earnings (Loss) per Share

The Company computes earnings per share (“EPS”) of Class A common stock using the two-class method required for participating securities. The Company considers unvested restricted shares and vested RSUs to be participating securities because holders are entitled to be credited with dividend equivalent payments, upon the payment by the Company of dividends on shares of Common Stock.

Undistributed earnings allocated to participating securities are subtracted from net earnings (loss) attributable to Bumble Inc. in determining net earnings (loss) attributable to common stockholders. Basic EPS is computed by dividing net earnings (loss) attributable to common stockholders by the weighted-average number of shares of our Class A common stock outstanding.

For the calculation of diluted EPS, net earnings (loss) attributable to common stockholders for basic EPS is adjusted by the effect of dilutive securities.

Diluted EPS attributable to common stockholders is computed by dividing the resulting net earnings (loss) attributable to common stockholders by the weighted-average number of common shares outstanding, adjusted to give effect to dilutive elements including restricted shares, RSUs, and options to the extent these are dilutive.

The following table sets forth a reconciliation of the numerators used to compute the Company's basic and diluted earnings (loss) per share (in thousands):


	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Numerator:
Net earnings (loss)	$	(2,329	)	$	23,748
Net earnings (loss) attributable to noncontrolling interests		(718	)		7,547
Net earnings (loss) attributable to Bumble Inc. shareholders	$	(1,611	)	$	16,201

The following table sets forth the computation of the Company's basic and diluted earnings (loss) per share (in thousands, except share amounts, and per share amounts, unaudited):


	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Basic earnings (loss) per share attributable to common stockholders
Numerator
Allocation of net earnings (loss) attributable to Bumble Inc. shareholders	$	(1,614	)	$	16,246
Less: net earnings (loss) attributable to participating securities		—			20
Net earnings (loss) attributable to common stockholders	$	(1,614	)	$	16,226
Denominator
Weighted average number of shares of Class A common stock outstanding		131,924,371			129,233,843
Basic earnings (loss) per share attributable to common stockholders	$	(0.01	)	$	0.13

Diluted earnings (loss) per share attributable to common stockholders
Numerator
Allocation of net earnings (loss) attributable to Bumble Inc. shareholders	$	(1,614	)	$	16,047
Increase in net earnings (loss) attributable to common shareholders upon conversion of potentially dilutive Common Units		—			7,701
Less: net earnings (loss) attributable to participating securities		—			20
Net earnings (loss) attributable to common stockholders	$	(1,614	)	$	23,728
Denominator
Number of shares used in basic computation		131,924,371			129,233,843
Add: weighted-average effect of dilutive securities		—
Restricted shares		—			—
RSUs		—			579,928
Options		—			—
Common Units to Convert to Class A Common Stock		—			61,516,126
Weighted average shares of Class A common stock outstanding used to calculate diluted earnings (loss) per share		131,924,371			191,329,897
Diluted earnings (loss) per share attributable to common stockholders	$	(0.01	)	$	0.12

The following table sets forth potentially dilutive securities that were excluded from the diluted earnings (loss) per share computation because the effect would be anti-dilutive, or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the periods:


	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Time-vesting awards:
Options		3,902,069		2,684,067
Restricted shares		38,669		—
RSUs		6,810,786		1,165,808
Incentive units		3,017,321		507,237
Total time-vesting awards		13,768,845		4,357,112

Exit-vesting awards:
Options		95,154		164,362
Restricted shares		49,378		—
RSUs		502,251		1,007,648
Incentive units		3,363,792		4,324,868
Total exit-vesting awards		4,010,575		5,496,878
Total		17,779,420		9,853,990

Note 11 - Stock-based Compensation

Total stock-based compensation cost, net of forfeitures, was as follows:



(In thousands)	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Cost of revenue	$	1,138	$	948
Selling and marketing expense		3,527		(1,322	)
General and administrative expense		14,817		9,807
Product development expense		9,102		8,124
Total stock-based compensation expense	$	28,584	$	17,557

Plans

Prior to the IPO, Bumble Holdings had three active plans under which awards had been granted to various employees of the Company, including key management personnel, based on their management grade.

In connection with the Sponsor Acquisition, Bumble Holdings and Buzz Management Aggregator L.P., an interest holder in Bumble Holdings, adopted two new incentive plans for the employees’ performance and retention purposes, namely the Employee Incentive Plan (“Non-U.S. Plan”) and the Equity Incentive Plan (“U.S. Plan”). The participants of the Non-U.S. Plan and U.S. Plan are selected employees of the Company and the subsidiaries. Bumble Holdings and Buzz Management Aggregator L.P. also adopted one incentive plan for Whitney Wolfe Herd (the “Founder Plan”). Awards granted under the Founder Plan and U.S. Plan were in the form of Class B Units in Bumble Holdings and Class B Units in Buzz Management Aggregator L.P., respectively (collectively, the “Class B Units”). Under the Non-U.S. Plan, participants have received phantom awards of Class B Units in Buzz Management Aggregator L.P. (the “Phantom Class B Units”) that are settled in cash equal to the notional value of the Buzz Management Aggregator Class B Units at the settlement date.

The Class B Units under the Founder Plan and U.S. Plan and the Phantom Class B Units under the Non-U.S. Plan comprise:

●

Time-Vesting Class B Units and Time-Vesting Phantom Class B Units (60% of the Class B Units and Phantom Class B Units granted) that generally vest over a five-year service period and for which expense is recognized under a graded expense attribution model; and

●

Exit-Vesting Class B Units and Exit-Vesting Phantom Class B Units (40% of the Class B Units and Phantom Class B Units granted). Vesting for these awards is based on a liquidity event in which affiliates of Blackstone receive cash proceeds in respect of its Class A units in the Company prior to the termination of the participant. Further, the portion of the Exit-Vesting Class B Units and Exit-Vesting Phantom Class B Units that vest is based on certain Multiple on Invested Capital (“MOIC”) and Internal Rate of Return (“IRR”) hurdles associated with a liquidity event. The MOIC and IRR hurdles impact the fair value of the awards. As the vesting of these units is contingent upon a specified liquidity event, no expense was required to be recorded prior to the occurrence of a liquidity event.

Time-Vesting Class B Units and Exit-Vesting Class B Units

Expense for the Time-Vesting Class B Units and Exit-Vesting Class B Units was based on the grant date fair value of the Class B Units. The grant date fair value was measured using a Monte Carlo model, which incorporates various assumptions noted in the following table. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility was calculated based on the observed equity volatility for comparable companies. The expected time to liquidity event was based on management’s estimate of time to an expected liquidity event. The dividend yield was based on the Company’s expected dividend rate. The risk-free interest rate was based on U.S. Treasury zero-coupon issues. Forfeitures were accounted for as they occurred.

The weighted-average assumptions the Company used in the Monte Carlo model for 2020 are as follows:


Dividend yield	—
Expected volatility	58	%
Risk-free interest rate	0.86	%
Expected time to liquidity event (years)	4.7

Post-IPO Award Reclassification

In connection with the Company’s IPO, 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 the Company.

●

In each of the above 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.

At the IPO date, the Company concluded that our public offering represented a qualifying liquidity event that would cause the Exit-Vesting awards’ performance conditions to be probable. As such, the Company has begun to recognize stock-based compensation expense in relation to the Exit-Vesting awards.

On July 15, 2022, the Exit-Vesting awards granted to 386 participants were modified to also provide for time-based vesting in 36 equal installments, with the first installment vesting on August 29, 2022 and subsequent installments vesting on each of the next 35 monthly anniversaries of August 29, 2022, subject to the award holder's continued employment through each applicable vesting date and subject to other terms and conditions of the award. Incremental expense associated with the modification of the Exit-Vesting awards was $35.8 million, which is expected to be recognized over a period of 3.0 years. If the performance conditions are met prior to their respective time-vesting schedules, vesting of these Exit-Vesting awards and the associated stock-based compensation will be accelerated pursuant to the terms of the award agreements.

Incremental expense for the modified Exit-Vesting awards was based on the modification date fair value of modified Exit-Vesting Awards. The modification date fair value was measured using a Monte Carlo model, which incorporates various assumptions noted in the following table. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility was calculated based on the observed equity volatility for comparable companies. The expected time to liquidity event was based on management’s estimate of time to an expected liquidity event. The dividend yield was based on the Company’s expected dividend rate. The risk-free interest rate was based on U.S. Treasury zero-coupon issues. Forfeitures are accounted for as they occur.

The weighted-average assumptions the Company used in the Monte Carlo model for the modified Exit-Vesting awards are as follows:


Dividend yield		—
Expected volatility		60	%
Risk-free interest rate	2.1% to 3.1%
Expected time to liquidity event (years)		1.0

Compensation cost related to the Exit-Vesting awards for the three months ended March 31, 2023 and 2022 was $3.6 million and $0.9 million, respectively.

On February 25, 2023, the Board of Directors approved amendments to outstanding Exit-Vesting awards with respect to change in control provisions. See “Item 9B — Other Information” of our 2022 Form 10-K for additional details. The Company reviewed the amendments to the change of control provisions in accordance with ASC 718, Compensation—Stock Compensation, and determined that the modification does not impact the existing expense recognition and financial statement presentation.

2021 Omnibus Plan

In connection with the IPO, the Company adopted the 2021 Omnibus Plan, which became effective on the date immediately prior to the effective date of the IPO. The 2021 Omnibus Plan provides the Company with flexibility to use various equity-based incentive awards as compensation tools to motivate and retain the Company’s workforce. The Company initially reserved 30,000,000 shares of Class A common stock for the issuance of awards under the 2021 Omnibus Plan. The number of shares available for issuance under the 2021 Omnibus Plan will be increased automatically on January 1 of each fiscal year, by a number of shares of our Class A common stock equal to the least of (i) 12,000,000 shares of Class A common stock; (ii) 5% of the total number of shares of Class A common stock outstanding on the last day of the immediately preceding fiscal year, and (iii) a lower number of shares as may be determined by the Board. The Board elected not to approve an increase to the number of shares available for issuance under the 2021 Omnibus Plan for each of 2022 and 2023.

The fair value of Time-Vesting awards granted or modified at the time of the IPO was determined using the Black-Scholes option pricing model with the following assumptions:


Volatility	55%-60%
Expected Life	0.5 - 7.4 years
Risk-free rate	0.1%-0.8%
Fair value per unit	$43.00
Dividend yield		0.0	%
Discount for lack of marketability(1)	15% - 25%

The fair value of Exit-Vesting awards granted or modified at the time of the IPO was determined using a Monte Carlo simulation approach in an option pricing framework, where the common stock price of the Company was evolved using a Geometric Brownian Motion over a period from the Valuation Date to the date of Management's expected exit date - a date at which MOIC and IRR realized by the Sponsor can be calculated ("Sponsor Exit"), with the following assumptions:


Volatility		55	%
Expected Life	1.8 years
Risk-free rate		0.1	%
Fair value per unit	$43.00
Dividend yield		0.0	%
Discount for lack of marketability(1)		15	%

(1) Discount for lack of marketability for Time-Vesting awards and Exit-Vesting awards is only applicable for Incentive Units granted in Bumble Holdings at the time of the IPO.

The fair value of Time-Vesting Options granted during the three months ended March 31, 2023 was determined using the Black-Scholes option pricing model with the following assumptions:


Volatility		80	%
Expected Life	7
Risk-free rate	3.67% - 3.86%
Fair value per unit	$14.70 - $18.19
Dividend yield		0.0	%

Incentive Units in Bumble Holdings:

The following table summarizes information around Incentive Units in Bumble Holdings. These include grants of Class B Units that were reclassified into Incentive Units as described above, as well as Incentive Units issued to new recipients. The Incentive Units received as a result of the Reclassification of Class B Units retain the vesting attributes (including original service period vesting start date) of the Class B Units. The Company did not recognize any incremental fair value due to the reclassification of awards as the fair value per award was the same immediately prior to and after the Reclassification. The newly granted Incentive Units contain the same vesting attributes as Incentive Units granted as a result of the Reclassification. In July 2022, the Exit-Vesting RSUs were modified to also provide for time-based vesting in 36 equal installments, with the first installment vesting on August 29, 2022, and subsequent installments vesting on each of the next 35 monthly anniversaries of August 29, 2022, subject to the award holder’s continued employment through each applicable vesting date and subject to other terms and conditions of the award (as noted above in the section headed “Post-IPO Award Reclassification”).



	Time-Vesting Incentive Units					Exit-Vesting Incentive Units
	Number of Awards			Weighted- Average Participation Threshold		Number of Awards			Weighted- Average Participation Threshold
Unvested as of December 31, 2022		3,857,248		$	14.33		3,724,214		$	13.81
Granted		—			—		—			—
Vested		(839,936	)		13.91		(360,416	)		13.81
Forfeited		—			—		—			—
Unvested as of March 31, 2023		3,017,312		$	14.44		3,363,798		$	13.81

As of March 31, 2023, total unrecognized compensation cost related to the Time-Vesting Incentive Units is $8.6 million, which is expected to be recognized over a weighted-average period of 2.1 years. Total unrecognized compensation cost related to the Exit-Vesting Incentive Units is $17.4 million, which is expected to be recognized over a weighted average period of 2.3 years.

Restricted Shares of Class A Common Stock in Bumble Inc.:

The following table summarizes information around restricted shares in the Company. The restricted shares granted as a result of the reclassification of Class B Units retain the vesting attributes (including original service period vesting start date) of the Class B Units. The Company did not recognize any incremental fair value due to the reclassification of awards as the fair value per award was the same immediately prior to and after the Reclassification. In July 2022, the Exit-Vesting restricted stock were modified to also provide for time-based vesting in 36 equal installments, with the first installment vesting on August 29, 2022, and subsequent installments vesting on each of the next 35 monthly anniversaries of August 29, 2022, subject to the award holder’s continued employment through each applicable vesting date and subject to other terms and conditions of the award (as noted above in the section headed “Post-IPO Award Reclassification”).



	Time-Vesting Restricted Shares of Class A Common Stock					Exit-Vesting Restricted Shares of Class A Common Stock
	Number of Awards			Weighted- Average Grant-Date Fair Value		Number of Awards			Weighted- Average Grant-Date Fair Value
Unvested as of December 31, 2022		58,247		$	7.02		55,744		$	17.26
Granted		—			—		—			—
Vested		(18,746	)		6.73		(5,369	)		17.25
Forfeited		(832	)		6.73		(997	)		17.01
Unvested as of March 31, 2023		38,669		$	7.17		49,378		$	17.26

As of March 31, 2023, total unrecognized compensation cost related to the Time-Vesting restricted shares is $0.1 million, which is expected to be recognized over a weighted-average period of 1.9 years. Total unrecognized compensation cost related to the Exit-Vesting restricted shares is $0.4 million, which is expected to be recognized over a weighted average period of 2.3 years.

RSUs in Bumble Inc.:

The following table summarizes information around RSUs in the Company. These include grants of Phantom Class B Units that were reclassified into RSUs in conjunction with the IPO, as well as Promised RSUs issued to new recipients. The RSUs granted as a result of the reclassification of Phantom Class B Units retain the vesting attributes (including original service period vesting start date) of the Phantom Class B Units. As the Phantom Class B Units were legally settled in cash and the RSUs will be settled with equity, this represents a liability-to-equity modification. The Company reclassified any outstanding liabilities to equity and recognized expense in accordance with the appropriate pattern using the modification date fair value.

Time-Vesting RSUs that were granted as a result of the Reclassification generally vest in equal annual installments over a five-year period, whereas Time-Vesting RSUs that were granted at the time of the Company’s IPO generally vest in equal annual installments over a four-year period. Time-Vesting RSUs that have been granted since the Company’s IPO will generally vest 25% on the first anniversary of the date of grant, or other vesting commencement date, and the remaining 75% of the award vests in equal installments on each monthly anniversary thereafter such that the award will be fully vested on the fourth anniversary of the date of grant, or other vesting commencement date. Exit-Vesting RSUs that were granted as a result of the Reclassification contain similar vesting requirements to the previously Exit-Vesting Phantom Class B Units. In July 2022, the Exit-Vesting RSUs were modified to also provide for time-based vesting in 36 equal installments, with the first installment vesting on August 29, 2022, and subsequent installments vesting on each of the next 35 monthly anniversaries of August 29, 2022, subject to the award holder’s continued employment through each applicable vesting date and subject to other terms and conditions of the award (as noted above in the section headed “Post-IPO Award Reclassification”).



	Time-Vesting RSUs					Exit-Vesting RSUs
	Number of Awards			Weighted- Average Grant-Date Fair Value		Number of Awards			Weighted- Average Grant-Date Fair Value
Unvested as of December 31, 2022		4,845,852		$	32.50		761,473		$	40.23
Granted		3,151,151			23.10		—			—
Vested		(910,819	)		34.24		(63,808	)		41.31
Forfeited		(275,398	)		37.21		(195,414	)		33.30
Unvested as of March 31, 2023		6,810,786		$	27.73		502,251		$	42.79

As of March 31, 2023, total unrecognized compensation cost related to the Time-Vesting RSUs is $125.7 million, which is expected to be recognized over a weighted-average period of 3.3 years. Total unrecognized compensation cost related to the Exit-Vesting RSUs is $8.3 million, which is expected to be recognized over a weighted average period of 2.3 years.

Options

Under the 2021 Omnibus Plan, the Company has granted certain 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 stock options either vest over a four or a five-year period, and weighted-average remaining contractual term has been specified in the table below. Exit-Vesting stock options vest upon satisfaction of a performance condition under which Blackstone and its affiliates receive cash proceeds in respect of certain MOIC and IRR hurdles, subject to the recipient’s continued employment at the time of satisfaction. At the IPO date, the Company concluded that the public offering represented a qualifying liquidity event that would cause the Exit-Vesting options’ performance conditions to be probable of occurring. In July 2022, the Exit-Vesting options were modified to also provide for time-based vesting in 36 equal installments, with the first installment vesting on August 29, 2022, and subsequent installments vesting on each of the next 35 monthly anniversaries of August 29, 2022, subject to the award holder’s continued employment through each applicable vesting date and subject to other terms and conditions of the award (as noted above in the section headed “Post-IPO Award Reclassification”).

The following table summarizes the Company’s option activity as it relates to Time-Vesting stock options as of March 31, 2023:


	March 31, 2023
	Number of Options			Weighted- Average Exercise Price Per Share		Weighted- Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2022		2,946,118		$	35.64	$	20.34
Granted		1,118,390			21.36		15.96
Exercised		—			—		—
Forfeited and expired		(162,439	)		42.03		21.21
Outstanding as of March 31, 2023		3,902,069		$	31.28	$	19.03
Exercisable as of March 31, 2023		1,025,020		$	39.20	$	20.78

The following table summarizes the Company’s option activity as it relates to Exit-Vesting stock options as of March 31, 2023:


	March 31, 2023
	Number of Options			Weighted- Average Exercise Price Per Share		Weighted- Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2022		164,362		$	43.00	$	18.66
Granted		—			—		—
Exercised		—			—		—
Forfeited		(69,208	)		43.00		15.30
Outstanding as of March 31, 2023		95,154		$	43.00	$	21.10
Exercisable as of March 31, 2023		32,998		$	43.00	$	19.02

Total unrecognized compensation cost related to the Time-Vesting options is $34.8 million, which is expected to be recognized over a weighted-average period of 3.2 years. Total unrecognized compensation cost related to the Exit-Vesting options is $0.5 million, which is expected to be recognized over a weighted-average period of 2.3 years.

Options have a maximum contractual term of 10 years. The aggregate intrinsic value – assuming all options are expected to vest – and weighted average remaining contractual terms of Time-Vesting and Exit-Vesting options outstanding and options exercisable were as follows as of March 31, 2023.


Aggregate intrinsic value
Time-Vesting options outstanding			—
Time Vesting options exercisable			—
Exit-Vesting options outstanding			—
Exit-Vesting options exercisable			—
Weighted-average remaining contractual term (in years)
Time-Vesting options outstanding			8.7
Time Vesting options exercisable			7.3
Exit-Vesting options outstanding			6.6
Exit-Vesting options exercisable			4.3

The weighted average exercise price exceeded the market price as of March 31, 2023, and as such, resulted in the aggregate intrinsic value to be negative for all of the Company’s stock options (referred to as “out-of-the money”).

Note 12 - Related Party Transactions

In the ordinary course of operations, the Company enters into transactions with related parties, as discussed below.



Related Party relationship	Type of Transaction	Financial Statement Line	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Other	Marketing costs	Selling and marketing expense	$	1,232	$	492
Other	Moderator costs	Cost of revenue		1,123		—
Other	Advertising revenue	Revenue		176		—



Related Party relationship	Type of Transaction	Financial Statement Line	March 31, 2023		December 31, 2022
Other	Tax receivable agreement	Accrued expenses and other current liabilities	$	8,947	$	8,826
Other	Tax receivable agreement	Payable to related parties pursuant to a tax receivable agreement	$	416,754	$	385,486

Payable to related parties pursuant to a tax receivable agreement

Concurrent with the completion of the IPO, the Company entered into a tax receivable agreement with pre-IPO owners including our Founder, our Sponsor, an affiliate of Accel Partners LP and management and other equity holders (see Note 4, Payable to Related Parties Pursuant to a Tax Receivable Agreement).

Other

The Company recognizes advertising revenues and incurs marketing expenses from Liftoff Mobile Inc. ("Liftoff"), a company in which Blackstone-affiliated funds hold a controlling interest. The Company uses TaskUs Inc. ("TaskUs"), a company in which Blackstone-affiliated funds holds more than a 20% ownership interest, for moderator services.

Note 13 - Segment and Geographic Information

The Company operates as a single operating segment. The Company’s chief operating decision maker is the Chief Executive Officer, who reviews financial information presented on a consolidated basis, accompanied by disaggregated information about the Company’s revenue, for purposes of making operating decisions, assessing financial performance and allocating resources.

Revenue by major geographic region is based upon the location of the customers who receive the Company’s services. The information below summarizes revenue by geographic area, based on customer location (in thousands):



	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
North America(1)	$	143,073	$	123,465
Rest of the world		99,875		86,565
Total	$	242,948	$	210,030

(1) North America revenue includes revenue from the United States and Canada.

The United States is the only country with revenues of 10% or more of the Company’s total revenue for the three months ended March 31, 2023 and 2022.

The information below summarizes property and equipment, net by geographic area (in thousands):


	March 31, 2023		December 31, 2022
United Kingdom	$	5,948	$	5,893
United States		4,104		4,462
Czech Republic		4,461		1,491
Rest of the world		2,787		2,621
Total	$	17,300	$	14,467

United Kingdom, United States and Czech Republic are the only countries with property and equipment of 10% or more of the Company’s total property and equipment, net at March 31, 2023 and December 31, 2022.

Note 14 - Commitments and Contingencies

The Company has entered into indemnification agreements with the Company’s officers and directors for certain events or occurrences. The Company maintains a directors and officers insurance policy to provide coverage in the event of a claim against an officer or director.

Litigation

We are subject to various legal proceedings, claims, and governmental inspections, audits or investigations arising out of our business which cover matters such as general commercial, consumer protection, governmental regulations, product liability, privacy, safety, environmental, intellectual property, employment and other actions that are incidental to our business, including a number of trademark proceedings, both offensive and defensive, regarding the BUMBLE, BADOO and FRUITZ marks. Although the outcomes of these claims cannot be predicted with certainty, in the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on our financial position or results of operations.

In late 2021 and early 2022, four putative class action lawsuits were filed against the Company in Illinois alleging that certain features of the Badoo or Bumble apps violate the Illinois Biometric Information Privacy Act (“BIPA”). These lawsuits allege that the apps used facial geometry scans in violation of BIPA’s authorization, consent, and data retention policy provisions. Plaintiffs in these lawsuits seek statutory damages, compensatory damages, attorneys’ fees, injunctive relief, and (in one action) punitive damages. These cases are still in early stages and at this time the Company cannot reasonably estimate a range of potential liability, if any, which may arise therefrom.

In January 2022, a purported class action complaint, UA Local 13 Pension Fund v. Bumble Inc. et al., was filed in the United States District Court for the Southern District of New York naming, among others, the Company, our Chief Executive Officer, our Chief Financial Officer, our Board of Directors and Blackstone, as defendants. The complaint asserts claims under the U.S. federal securities laws, purportedly brought on behalf of a class of purchasers of shares of Class A common stock in Bumble’s secondary public stock offering that took place in September 2021 (the “SPO”), that the SPO Registration Statement and prospectus contained false and misleading statements or omissions by failing to disclose certain information concerning Bumble and Badoo app paying users and related trends and issues with the Badoo app payment platform, and that as a result of the foregoing, Bumble’s business metrics and financial prospects were not as strong as represented in the SPO Registration Statement and prospectus. The complaint seeks unspecified damages and an award of costs and expenses, including reasonable attorneys’ fees, as well as equitable relief. In March

2023, the parties executed a settlement agreement that includes a full release of the asserted claims against the Company and other defendants in exchange for a settlement amount of $18 million. The court subsequently granted preliminary approval of the proposed settlement. The Company and its insurers have paid the full settlement amount into an escrow account in accordance with the terms of the court’s preliminary approval. The proposed settlement does not reflect an admission of any allegation or wrongdoing, and the Company believes that the allegations contained in the complaint are without merit.

Five shareholder derivative complaints have been filed in the United States District Court for the Southern District of New York, United States District Court for the District of Delaware and Delaware Court of Chancery against the Company and certain directors and officers.

•

The Glover-Mott shareholder derivative complaint, filed in April 2022, alleges a breach of fiduciary duty against management and our Board of Directors based on the same allegations and events described in the class action complaint above. The complaint seeks unspecified damages, an award of costs and disbursements, including reasonable attorneys’ fees, and that the Company be directed to take action to reform its corporate governance and internal procedures.

•

The William B. Federman Irrevocable Trust shareholder derivative complaint, filed in May 2022, alleges violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, aiding and abetting breach of duty and gross mismanagement based on misstatements or omissions in the Company’s April 2022 Proxy Statement concerning alleged deficiencies in the Company’s risk management and internal controls, which allegedly led to disclosure deficiencies in the SPO documents. The complaint seeks a declaration that the individual defendants breached their fiduciary duties, aided and abetted breach of fiduciary duty, were unjustly enriched, grossly mismanaged the Company and violated the federal securities laws; an order that the individual defendants are jointly and severally liable for all damages; an order requiring the individual defendants to remit their salaries and compensation to the Company for the period of breach; unspecified equitable and injunctive relief; and costs and disbursements, including reasonable attorneys’, consultants’ and experts’ fees.

•

The Dana Messana shareholder derivative complaint, filed in September 2022, alleges violation of Section 10(b) of the Exchange Act, breach of fiduciary duty against management and the Board, aiding and abetting breach of fiduciary duty, unjust enrichment, and waste of corporate assets based on the same allegations and events described in the SPO class action complaint. The complaint seeks unspecified damages; an order that the individual defendants are jointly and severally liable for all damages; an order for imposition of a constructive trust on any profits and unjust enrichments received by the individual defendants through unlawful conduct; and an award of costs and disbursements, including reasonable attorneys’, accountants’, and experts’ fees.

•

The Sanchez shareholder derivative complaint, filed in January 2023, asserts claims for breach of fiduciary duty and unjust enrichment against, among others, management, our Board of Directors, and Blackstone based on the same allegations and events described in the class action complaint. The complaint seeks unspecified damages; an order that the defendants are jointly and severally liable for all damages; disgorgement from defendants of any profits, benefits, and other unjust gains from misconduct; and an award of costs and disbursements, including attorneys’ fees, accountants’ fees, and experts’ fees.

•

The City of Vero Beach Police Officers’ Retirement Trust Fund derivative complaint, filed in February 2023, asserts claims for breach of fiduciary duty and unjust enrichment against, among others, management, our Board of Directors, and Blackstone based on the same allegations and events described in the class action complaint. The complaint seeks unspecified damages; a finding that the individual defendants breached their fiduciary duties; disgorgement from defendants of any unjustly obtained profits or benefits; and an award of costs and disbursement, including attorneys’ fees, accountants’ fees, and experts’ fees.

In March 2023, the Delaware Court of Chancery consolidated the Sanchez and City of Vero Beach Police Officers’ Retirement Trust Fund actions under the caption In re Bumble Inc. Stockholder Derivative Litigation. In April 2023, the consolidated action plaintiffs filed a consolidated complaint that asserts substantially similar claims and seeks substantially similar relief as the Sanchez and City of Vero Beach Police Officers’ Retirement Trust Fund complaints.

The Company has also received an inquiry from the SEC relating to the disclosures at issue in the SPO class action complaint. The Company cannot predict at this point the length of time that these matters will be ongoing, their outcome or the liability, if any, which may arise therefrom.

From time to time, the Company is subject to patent litigations asserted by non-practicing entities.

As of March 31, 2023 and December 31, 2022, the Company determined that provisions of $20.5 million and $20.5 million, respectively, reflect our best estimate of any probable future obligation for the Company’s litigations. The provision includes amounts accrued with respect to the Company’s class action lawsuit related to the SPO, representing management’s current estimated probable loss for this matter following a court-ordered mediation between the parties to the litigation. During the three months ended March 31, 2023, the Company made no payments to settle litigation matters. Legal expenses are included in “General and administrative expense” in the accompanying condensed consolidated statements of operations.

Purchase Commitments

In September 2022, the Company entered into an agreement for third-party cloud services. The Company is committed to pay a minimum of $7.1 million over the period of 18 months. If at the end of the 18 months, or upon early termination, the Company has not reached the $7.1 million in spend, the Company will be required to pay for the difference between the sum of fees already incurred and the minimum commitment. As of March 31, 2023, our minimum commitment remaining is $5.0 million.

Note 15 - Subsequent Events

In April 2023, Bumble Inc. made an additional $8.6 million distribution to the non-controlling interest holders of Bumble Holdings.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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 2022 Form 10-K.

Overview

We provide online dating and social networking applications through subscription and in-app purchases of products servicing North America, Europe and various other countries around the world. Bumble operates three apps, Bumble, Badoo and Fruitz, and we are a leader in the online dating space. 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. We believe that healthy and equitable relationships begin with Kind Connections and focus on building authenticity and safety in the online space, which is marked at times by isolation and toxicity. We also believe there is a significant opportunity to extend our platform beyond online dating into healthy relationships across all areas of life: love, friendships, careers and beyond. By empowering women across all of their relationships, we believe that we have the potential to become a preeminent global women’s brand. 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. Revenues from Fruitz were included in Badoo App and Other Revenue but excluded from our key operating metrics.

Year-to-Date March 31, 2023 Consolidated Results

For the three months ended March 31, 2023 and 2022, we generated:

•

Total revenue of $242.9 million and $210.0 million, respectively;

•

Bumble App Revenue of $194.3 million and $154.4 million, respectively;

•

Badoo App and Other Revenue of $48.7 million and $55.7 million, respectively;

•

Net earnings (loss) of $(2.3) million and $23.7 million, respectively, representing net earnings (loss) margins of (1.0)%, and 11.3%, respectively; and

•

Adjusted EBITDA of $59.3 million and $49.8 million, respectively, representing Adjusted EBITDA margins of 24.4% and 23.7%, respectively.

•

Net cash provided by operating activities of $13.4 million and $19.4 million, respectively, and operating cash flow conversion of (574.9)% and 81.5%, respectively; and

•

Free cash flow of $6.6 million and $14.4 million, respectively, representing free cash flow conversion of 11.1% and 28.8%, respectively.

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:


(In thousands, except ARPPU)	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Bumble App Paying Users		2,318.8		1,775.2
Badoo App and Other Paying Users		1,141.0		1,232.0
Total Paying Users		3,459.8		3,007.2
Bumble App Average Revenue per Paying User	$	27.93	$	28.99
Badoo App and Other Average Revenue per Paying User	$	12.47	$	13.48
Total Average Revenue per Paying User	$	22.83	$	22.63



(In thousands, except per share data and percentages)	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Condensed Consolidated Statements of Operations Data:
Revenue	$	242,948		$	210,030
Net earnings (loss)		(2,329	)		23,748
Net earnings (loss) attributable to Bumble Inc. shareholders		(1,611	)		16,201
Net earnings (loss) per share attributable to Bumble Inc. shareholders
Basic earnings (loss) per share	$	(0.01	)	$	0.13
Diluted earnings (loss) per share	$	(0.01	)	$	0.12

(In thousands)	March 31, 2023			December 31, 2022
Condensed Consolidated Balance Sheets Data:
Total assets	$	3,702,592		$	3,692,621
Cash and cash equivalents		388,955			402,559
Long-term debt, net including current maturities		623,955			624,973

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 in equity securities, transaction and other costs, litigation costs net of insurance reimbursements that arise outside of the ordinary course of business, tax receivable agreement liability remeasurement benefit and impairment loss. 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.

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.

Macroeconomic Conditions

The prevailing global economic climate, Russia-Ukraine conflict and other macroeconomic conditions, including but not limited to slower growth or economic recession, changes to fiscal and monetary policy, and exchange rate fluctuations have adversely affected and may continue to adversely impact our business as consumers face greater pressure on disposable income. The increase in interest rates by the Federal Reserve and overall market conditions have led to significant strengthening of the U.S. dollar against other global currencies in 2022, and has remained volatile during the first quarter of 2023. A strong U.S. dollar has impacted and may continue to impact our revenue and earnings through the remainder of 2023. We continuously monitor the direct and indirect impacts of these circumstances on our business and financial results.

For additional information, see “Risk Factors—General Risk Factors—We are exposed to changes in the global macroeconomic environment beyond our control, which may adversely affect consumer discretionary spending, demand for our products and services, and our expenses” in Part I, Item 1A. of our 2022 Form 10-K.

Impact of Russia-Ukraine Conflict

Historically, we have had business operations in Russia. Prior to the Russian invasion of Ukraine in February 2022, we leased office space in Moscow and had approximately 125 employees based out of the Moscow office, consisting primarily of engineers responsible for services including anti-spam, integrity, incident management and product development and services related to supportive IT infrastructure.

On March 8, 2022, we announced the discontinuation of our operations in Russia and the removal of all of our apps from the Apple App Store and Google Play Store in Russia and Belarus. We closed our Moscow office and shifted our resources based in Moscow, where feasible, to other geographic locations.

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 2022 Form 10-K.

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 SEC, 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 Bumble Holdings, which Bumble Holdings 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 Offerings

On September 15, 2021, the Company completed a secondary offering of 20.70 million shares of Class A common stock on behalf of certain selling stockholders affiliated with Blackstone Inc. 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.

On March 8, 2023, the Company completed a secondary offering of 13.75 million shares of Class A common stock on behalf of certain selling stockholders affiliated with Blackstone Inc., and the Founder at a price of $22.80 per share. This transaction resulted in the issuance of 7.2 million Class A shares for the period ending March 31, 2023.

Bumble did not sell any shares of Class A common stock in these offerings and did not receive any of the proceeds from the sales. Bumble paid the costs associated with the sales of shares by the selling stockholders, net of the underwriting discounts.

Reorganization Transactions

Prior to the completion of the IPO, we undertook certain reorganization transactions (the “Reorganization Transactions”) such that Bumble Inc. is now a holding company, and its sole material asset is a controlling equity interest in Bumble Holdings. 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

existing tax basis and adjustments to the tax basis of the assets of Bumble Holdings as a result of sales or exchanges of Common Units (including Common Units issued upon conversion of vested Incentive Units), and our utilization of certain tax attributes of the Blocker Companies (including the Blocker Companies’ allocable share of existing tax basis) and certain other tax benefits related to entering into the tax receivable agreement.

For additional information, see “Risk Factors—Bumble Inc. will be required to pay certain of our pre-IPO owners for most of the benefits relating to tax depreciation or amortization deductions that we may claim as a result of Bumble Inc.’s allocable share of existing tax basis acquired in the IPO, Bumble Inc.’s increase in its allocable share of existing tax basis and anticipated tax basis adjustments we receive in connection with sales or exchanges of Common Units (including Common Units issued upon conversion of vested Incentive Units) in connection with or after the IPO and our utilization of certain tax attributes of the Blocker Companies.” and “Risk Factors—In certain cases, payments under the tax receivable agreement may be accelerated and/or significantly exceed the actual benefits Bumble Inc. realizes in respect of the tax attributes subject to the tax receivable agreement.” in each case, in Part I, Item 1A. of our 2022 Form 10-K.

For additional information, see Note 4, Payable to Related Parties Pursuant to a Tax Receivable Agreement, to our unaudited condensed consolidated financial statements included in Part I, “Item 1 – Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q.

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 March 31, 2023. 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 $425.7 million associated with the tax receivable agreement related to these benefits, of which $8.9 million is included in "Accrued expenses and other current liabilities." The ability of the deferred tax assets to be realized is evaluated based on all positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. 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 March 31, 2023, our tax receivable agreement liability increased by $31.4 million principally due to the effects of the March 2023 secondary offering of 13.75 million shares of Class A common stock of certain selling stockholders and the Founder.

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 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 requirements). 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.

•

Shares of Class A common stock issuable in exchange for an equivalent number of Common Units in Bumble Holdings to be received upon the conversion of vested Time-Vesting and Exit-Vesting Incentive Units in Bumble Holdings.

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. On July 15, 2022, the Exit-Vesting awards, with vesting based on certain performance conditions, were modified to also provide for time-based vesting in 36 equal installments and we began to recognize incremental stock-based compensation associated with the modification of these awards. Compensation cost related to the Exit-Vesting awards for the three months ended March 31, 2023 and 2022 was $3.6 million and $0.9 million, respectively.

For additional information, see Note 11, 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, mobile web and desktop may 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 losses, changes in fair value of contingent earn-out liability, expenses associated with facilities, information technology, external professional services, legal costs, settlement of legal claims, restructuring charges and other administrative expenses.

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.

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, loss on debt extinguishment, fair value changes in derivatives, sub-lease income and investments in equity securities.

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:



(In thousands)	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Revenue	$	242,948		$	210,030
Operating costs and expenses:
Cost of revenue		70,580			55,612
Selling and marketing expense		63,590			56,829
General and administrative expense		49,831			23,853
Product development expense		33,152			27,788
Depreciation and amortization expense		16,731			26,929
Total operating costs and expenses		233,884			191,011
Operating earnings (loss)		9,064			19,019
Interest income (expense)		(5,219	)		(5,591	)
Other income (expense), net		(3,561	)		13,230
Income (loss) before income taxes		284			26,658
Income tax benefit (provision)		(2,613	)		(2,910	)
Net earnings (loss)		(2,329	)		23,748
Net earnings (loss) attributable to noncontrolling interests		(718	)		7,547
Net earnings (loss) attributable to Bumble Inc. shareholders	$	(1,611	)	$	16,201

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



	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Revenue		100.0	%		100.0	%
Operating costs and expenses:
Cost of revenue		29.1	%		26.5	%
Selling and marketing expense		26.2	%		27.1	%
General and administrative expense		20.5	%		11.4	%
Product development expense		13.6	%		13.2	%
Depreciation and amortization expense		6.9	%		12.8	%
Total operating costs and expenses		96.3	%		90.9	%
Operating earnings (loss)		3.7	%		9.1	%
Interest income (expense)		(2.1	)%		(2.7	)%
Other income (expense), net		(1.5	)%		6.3	%
Income (loss) before income taxes		0.1	%		12.7	%
Income tax benefit (provision)		(1.1	)%		(1.4	)%
Net earnings (loss)		(1.0	)%		11.3	%
Net earnings (loss) attributable to noncontrolling interests		(0.3	)%		3.6	%
Net earnings (loss) attributable to Bumble Inc. shareholders		(0.7	)%		7.7	%

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



(In thousands)	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Cost of revenue	$	1,138	$	948
Selling and marketing expense		3,527		(1,322	)
General and administrative expense		14,817		9,807
Product development expense		9,102		8,124
Total stock-based compensation expense	$	28,584	$	17,557

Comparison of the Three Months Ended March 31, 2023 and 2022

Revenue



(In thousands)	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Bumble App	$	194,277	$	154,367
Badoo App and Other		48,671		55,663
Total Revenue	$	242,948	$	210,030

Total Revenue was $242.9 million for the three months ended March 31, 2023, compared to $210.0 million to the same period in 2022. The increase was primarily driven by growth in Total Paying Users and, to a lesser extent, a slight increase in Total Average Revenue per Paying User, partially offset by fluctuations in foreign currency exchange rates.

Bumble App Revenue was $194.3 million for the three months ended March 31, 2023, compared to $154.4 million for the same period in 2022. This increase was primarily driven by a 30.6% increase in Bumble App Paying Users to 2.3 million partially offset by a 3.6% decline in Bumble App ARPPU to $27.93. The increase in Bumble App Revenue was due to growth in core markets and international expansion, partially offset by fluctuations in foreign currency exchange rates.

Badoo App and Other Revenue was $48.7 million for the three months ended March 31, 2023, compared to $55.7 million for the same period in 2022. This decrease was driven by a 7.4% 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 global macroeconomic conditions. We expect the impact of macroeconomic conditions to continue to have an adverse impact on Badoo App and Other Paying Users in the remaining quarters of 2023. The decrease in Badoo App and Other Revenue was also driven by a 7.5% decrease in Badoo App and Other ARPPU to $12.47. In addition, other revenue of $6.0 million for the three months ended March 31, 2023, increased by $0.1 million, or 2.4% compared to the same period in 2022.

Cost of revenue



(In thousands, except percentages)	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Cost of revenue	$	70,580		$	55,612
Percentage of revenue		29.1	%		26.5	%

Cost of revenue for the three months ended March 31, 2023 increased by $15.0 million, or 26.9%, as compared to the same period in 2022, driven primarily by growth in in-app purchase fees due to increasing revenue. As a percentage of revenue, cost of revenue increased primarily due to increased moderators of our content and the adoption of Google Play billing in many of our markets.

Selling and marketing expense



(In thousands, except percentages)	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Selling and marketing expense	$	63,590		$	56,829
Percentage of revenue		26.2	%		27.1	%

Selling and marketing expense for the three months ended March 31, 2023 increased by $6.8 million, or 11.9%, as compared to the same period in 2022. The change was primarily due to a $6.0 million increase in personnel-related expenses.

General and administrative expense



(In thousands, except percentages)	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
General and administrative expense	$	49,831		$	23,853
Percentage of revenue		20.5	%		11.4	%

General and administrative expense for the three months ended March 31, 2023 increased by $26.0 million, or 108.9%, as compared to the same period in 2022. The change was primarily driven by a $20.1 million decrease in gain resulting from the change in fair value of the contingent earn-out liabilities and a $7.7 million increase in personnel-related expenses, partially offset by a $2.5 million decrease in legal and professional fees.

Product development expense



(In thousands, except percentages)	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Product development expense	$	33,152		$	27,788
Percentage of revenue		13.6	%		13.2	%

Product development expense in the three months ended March 31, 2023 increased by $5.4 million, or 19.3%, as compared to the same period in 2022, primarily driven by an increase in personnel-related expenses.

Depreciation and amortization expense



(In thousands, except percentages)	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Depreciation and amortization expense	$	16,731		$	26,929
Percentage of revenue		6.9	%		12.8	%

Depreciation and amortization expense for the three months ended March 31, 2023 decreased by $10.2 million, or 37.9%, as compared to the same period in 2022, primarily due to the full amortization of the legacy Badoo user base in July 2022.

Interest income (expense)



(In thousands, except percentages)	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Interest income (expense)	$	(5,219	)	$	(5,591	)
Percentage of revenue		(2.1	)%		(2.7	)%

Interest expense for the three months ended March 31, 2023 decreased by $0.4 million, or 6.7%, compared to the same period in 2022. The change was due to the Company investing surplus funds in money market funds since the fourth quarter of 2022 to earn interest income, partially offset by an increase in interest rates on our outstanding debt under the credit agreements.

Other income (expense), net



(In thousands, except percentages)	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Other income (expense), net	$	(3,561	)	$	13,230
Percentage of revenue		(1.5	)%		6.3	%

Other income (expense), net for the three months ended March 31, 2023 decreased by $16.8 million, or 126.9%, compared to the same period in 2022. The change was primarily due to a $15.0 million decrease resulting from the change in fair values of interest rate swaps, and a $1.8 million decrease in net foreign exchange gains.

Income tax benefit (provision)



(In thousands, except percentages)	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Income tax benefit (provision)	$	(2,613	)	$	(2,910	)
Effective tax rate		920.1	%		10.9	%

Income tax provision was $(2.6) million for the three months ended March 31, 2023, as compared to $(2.9) million for the same period in 2022. The income tax provision was relatively consistent year over year, but resulted in a higher effective tax rate for the three months ended March 31, 2023 as the income before income taxes was near break-even.

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 in equity securities, transaction and other costs, litigation costs net of insurance reimbursements that arise outside of the ordinary course of business, tax receivable agreement liability remeasurement (benefit) expense and impairment loss, as management does not believe these expenses are representative of our core earnings. We 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 investors 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 investors to review the reconciliation of net earnings (loss) to Adjusted EBITDA, the computation of Adjusted EBITDA margin as compared to net earnings (loss) margin

which is net earnings (loss) as a percentage of revenue, the reconciliation of net cash provided by (used in) operating activities to free cash flow, and the computation of free cash flow conversion as compared to operating cash flow conversion, which is net cash provided by (used in) operating activities as a percentage of net earnings (loss) in each case set forth below.

We define Adjusted EBITDA as net earnings (loss) excluding income tax (benefit) provision, interest (income) expense, depreciation and amortization, stock-based compensation expense, employer costs related to stock-based compensation, foreign exchange (gain) loss, changes in fair value of contingent earn-out liability, interest rate swaps and investments in equity securities, transaction and other costs, litigation costs net of insurance reimbursements that arise outside of the ordinary course of business, tax receivable agreement liability remeasurement (benefit) expense and impairment loss. 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:



(In thousands, except percentages)	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Net earnings (loss)	$	(2,329	)	$	23,748
Add back:
Income tax (benefit) provision		2,613			2,910
Interest (income) expense		5,219			5,591
Depreciation and amortization		16,731			26,929
Stock-based compensation expense		28,584			17,557
Employer costs related to stock-based compensation (1)		2,559			1,072
Litigation costs, net of insurance reimbursements (2)		1,533			2,817
Foreign exchange (gain) loss (3)		(568	)		(2,395	)
Changes in fair value of interest rate swaps(4)		4,233			(10,817	)
Transaction and other costs(5)		1,297			3,108
Changes in fair value of contingent earn-out liability		(646	)		(20,709	)
Changes in fair value of investments in equity securities		100			—
Adjusted EBITDA	$	59,326		$	49,811
Net earnings (loss) margin		(1.0	)%		11.3	%
Adjusted EBITDA margin		24.4	%		23.7	%

Net cash provided by (used in) operating activities	$	13,389		$	19,358
Less:
Capital expenditures		(6,811	)		(4,996	)
Free cash flow	$	6,578		$	14,362
Operating cash flow conversion		(574.9	)%		81.5	%
Free cash flow conversion		11.1	%		28.8	%

(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) loss on interest rate swaps.

(5)

Represents transaction costs related to acquisitions and our offerings such as legal, accounting, advisory fees and other related costs. Amount in 2022 also includes employee-related restructuring costs directly associated with our decision to discontinue our operations in Russia including severance benefits, relocation and advisory fees.

Liquidity and Capital Resources

Overview

As of March 31, 2023, we had $389.0 million of cash and cash equivalents, a decrease of $13.6 million from December 31, 2022 primarily due to lower cash generated from operations due to timing of receipts and bonus payouts. 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, funding our debt obligations, partnership tax distributions, paying income taxes and obligations under our tax receivable agreement and effectuating share repurchases as discussed below. 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.

Our Board of Directors has approved a share repurchase program of up to $150 million of our outstanding Class A Common stock. Bumble intends to use the program to repurchase shares on a discretionary basis from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions or other means, including through 10b5-1 trading plans. This repurchase program may be commenced, suspended or discontinued at any time.

Cash Flow Information

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



(In thousands)	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Net cash provided by (used in):
Operating activities	$	13,389		$	19,358
Investing activities		(6,811	)		(74,716	)
Financing activities		(16,168	)		(7,146	)

Operating activities

Net cash provided by operating activities was $13.4 million and $19.4 million, respectively, in the three months ended March 31, 2023 and 2022. This includes adjustments to net earnings (loss) for the three months ended March 31, 2023 and 2022 related to: depreciation and amortization of $16.7 million and $26.9 million, respectively; stock-based compensation of $28.6 million and $17.6 million, respectively; change in fair value of interest rate swaps of $4.2 million and $(10.8) million, respectively; and change in fair value of deferred contingent consideration of $(0.6) million and $(20.7) million, respectively. The changes in assets and liabilities for the three months ended March 31, 2023 and 2022 consist primarily of: changes in accrued expenses and other current liability of $(14.2) million and $(0.7) million, respectively; and changes in accounts receivables of $(26.0) million and $0.5 million, respectively, driven by timing of cash receipts.

Investing activities

Net cash used in investing activities was $6.8 million and $74.7 million for the three months ended March 31, 2023 and 2022, respectively. The Company had capital expenditures of $6.8 million and $5.0 million in the three months ended March 31, 2023 and 2022, respectively. In the three months ended March 31, 2022, the Company also used $69.7 million for the acquisition of Fruitz (net of cash acquired).

Financing activities

Net cash used in financing activities was $16.2 million and $7.1 million in the three months ended March 31, 2023 and 2022, respectively. During the three months ended March 31, 2023 and 2022, the Company used $9.3 million and $5.7 million, respectively, for shares withheld to satisfy employee tax withholding requirements upon vesting of restricted stock units. The Company used $1.4 million in both of the three months ended March 31, 2023 and 2022 to repay a portion of the outstanding indebtedness under our Original Term Loan. In addition, Bumble Holdings made a $5.4 million cash distribution payment to the non-controlling interest holders in the three months ended March 31, 2023. In April 2023, Bumble Holdings made an additional $8.6 million distribution to the non-controlling interest holders of Bumble Holdings.

Indebtedness

Senior Secured Credit Facilities

In connection with the Sponsor Acquisition, in January 2020, we entered into a credit agreement (the “Credit Agreement”) providing for (i) a term loan facility in an original aggregate principal amount of $575.0 million (the “Original Term Loan Facility”) and (ii) a revolving facility in an aggregate principal amount of up to $50.0 million. In connection with a transaction whereby we distributed proceeds to our pre-IPO owners and to partially repay a loan from our Founder, in October 2020, we entered into the Incremental Term Loan Facility (the “Incremental Term Loan Facility” and together with the Original Term Loan Facility, the “Senior Secured Credit Facilities”) in an original aggregate principal amount of $275.0 million. The Incremental Term Loan provides for additional senior secured term loans with substantially identical terms as the Original Term Loan Facility (other than the applicable margin). A portion of the net proceeds from the initial public offering was used to repay $200.0 million aggregate principal amount of our outstanding indebtedness under our Term Loan Facility in the three months ended March 31, 2021. The Credit Agreement was further amended in March 2023, pursuant to which the interest rate benchmark referenced to LIBOR was transitioned to SOFR. The borrower under the Credit Agreement is a wholly owned subsidiary of Bumble Holdings, Buzz Finco L.L.C. (the “Borrower”). The Credit Agreement contains affirmative and negative covenants and customary events of default.

Borrowings under the Credit Agreement bear interest at a rate equal to, at the Borrower’s option, either (i) LIBOR prior to March 31, 2023 and Adjusted Term SOFR beginning March 31, 2023 for the relevant interest period, adjusted for statutory reserve requirements (subject to a floor of 0.0% on the Original Term Loan and 0.50% on the Incremental Term Loan), plus an applicable margin or (ii) a base rate equal to the highest of (a) the rate of interest in effect as last quoted by the Wall Street Journal as the “Prime Rate” in the United States, (b) the federal funds effective rate plus 0.50% and (c) adjusted LIBOR prior to April 1, 2023 and Adjusted Term SOFR beginning April 1, 2023, for an interest period of one month plus 1.00% (subject to a floor of 0.00% per annum), in each case, plus an applicable margin. 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 Credit Agreement, the Borrower is required to pay a commitment fee of 0.50% per annum (which is subject to a decrease to 0.375% per annum based upon the consolidated first lien net leverage ratio of the Borrower and its restricted subsidiaries) to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder. The Borrower must also pay customary letter of credit fees and an annual administrative agency fee.

The Original Term Loan Facility amortizes in equal quarterly installments in aggregate annual amounts equal to 1.00% of the principal amount of the Original Term Loan Facility outstanding as of the date of the closing of the Original 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 $200.0 million aggregate principal payment of outstanding indebtedness during the three months ended March 31, 2021 quarterly installment payments on the Incremental Term Loan Facility are no longer required for the remaining term of the facility. Principal amounts outstanding under the Revolving Credit Facility are due and payable in full at maturity on January 29, 2025.

Contractual Obligations and Contingencies

The following table summarizes our contractual obligations as of March 31, 2023:


	Payments due by period
(In thousands)	Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years		Total
Long-term debt	$	5,750	$	11,500	$	614,125	$	—	$	631,375
Operating leases		3,314		5,902		6,959		2,688		18,863
Other		6,334		2,663		—		—		8,997
Total	$	15,398	$	20,065	$	621,084	$	2,688	$	659,235

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. The payments under the tax receivable agreement are not conditioned upon continued ownership of the Company by the pre-IPO owners.

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 and subsequent activity through March 31, 2023 to aggregate to $723.7 million and to range over the next 15 years from approximately $8.9 million to $58.2 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 Note 4, Payable to Related Parties Pursuant to a Tax Receivable Agreement, for additional information.

In connection with the Sponsor Acquisition in January 2020, we entered into a contingent consideration arrangement, consisting of an earn-out payment to the former shareholders of Worldwide Vision Limited of up to $150 million. 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 “Item 8―Financial Statements and Supplementary Data ― Note 7, Business Combination” in our 2022 Annual Report on Form 10-K for additional information.

In September 2022, we entered into an agreement for third-party cloud services. We are committed to pay a minimum of $7.1 million over the period of 18 months. If at the end of the 18 months, or upon early termination, we have not reached the $7.1 million in spend, we will be required to pay for the difference between the sum of fees already incurred and the minimum commitment. As of March 31, 2023, our minimum commitment remaining is $5.0 million.

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, 2022. There have been no significant changes to these accounting policies and estimates for the three months ended March 31, 2023.

Related Party Transactions

For discussions of related party transactions, see Note 12, Related Party Transactions, to the condensed consolidated financial statements included in "Item 1 - Financial Statements (Unaudited)."

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Foreign Currency Exchange Risk

We conduct business in certain foreign markets, primarily in the United Kingdom and the European Union. For the three months ended March 31, 2023 and 2022, revenue outside of North America accounted for 41.1% and 41.2% of combined revenue, respectively. Our primary exposure to foreign currency exchange risk is the underlying user’s functional currency other than the U.S. Dollar, primarily the British Pound and Euro. As foreign currency exchange rates change, translation of the statements of operations of our international businesses into U.S. dollars affects year-over-year comparability of operating results. The average Euro and British Pound versus the U.S. Dollar exchange rate was 4.5% and 9.5% lower in the three months ended March 31, 2023 compared to the three months ended March 31, 2022, respectively.

Historically, we have not hedged any foreign currency exposures. We have performed a sensitivity analysis as of March 31, 2023 and 2022. A hypothetical 10% change in British Pound and Euro, relative to the U.S. Dollar, would have changed revenue by $1.6 million and $3.4 million for the three months ended March 31, 2023 and 2022, respectively, with all other variables held constant. This accounts for 2% of total revenue for both quarters ended March 31, 2023 and 2022. Our continued international expansion increases our exposure to exchange rate fluctuations and as a result such fluctuations could have a significant impact on our future results of operations.

Interest Rate Risk

At March 31, 2023, we had debt outstanding with a carrying value of $624.0 million. With consideration of the financial impact of our interest rate swaps, a hypothetical interest rate increase of 1% would have increased interest expense for the three months ended March 31, 2023 by $0.7 million based upon the outstanding debt balances and interest rates in effect during that period. See Note 9, Debt, within the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. Borrowings under our Senior Secured Credit Facilities bear interest at a variable market rate. In order to reduce the financial impact of increases in

interest rates, the Company entered into two interest rate swaps for a total notional amount of $350 million on June 22, 2020. The effective date for the interest rate swaps is June 30, 2020 and final maturity date is June 30, 2024. The financial impact of the interest rate swaps is to fix the variable interest rate element on $350 million of the long-term debt at a rate of 0.4008%.

In July 2017, the UK’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out USD LIBOR for new loans by the end of 2021 and will stop publishing USD LIBOR after June 30, 2023. The expected discontinuation, reform or replacement of LIBOR may result in fluctuating interest rates, or higher interest rates, which could have a material adverse effect on our interest expense. In March, 2023, in connection with a Benchmark Discontinuation Event, the Company entered into Amendment No. 2 to the Original Credit Agreement (“Amendment No. 2”), which provided for the transition of the benchmark interest rate from LIBOR to the Secured Overnight Financing Rate ("SOFR") pursuant to benchmark replacement provisions set forth in the Original Credit Agreement. Pursuant to the terms of Amendment No. 2, effective with the interest period beginning March 31, 2023, LIBOR was replaced with Term SOFR, a forward-looking term rate based on SOFR, plus a credit spread adjustment of 0.10% with respect to the Term Loans and 0.00% with respect to loans under the Revolving Credit Facility (Term SOFR plus such credit spread adjustment, “Adjusted Term SOFR”). All other terms of the Original Credit Agreement unrelated to the benchmark replacement and its incorporation were unchanged by Amendment No. 2. Effective March 31, 2023 all Term Loans outstanding are bearing interest based on Adjusted Term SOFR and there were no Revolving Credit Loans outstanding. In April 2023, we amended our interest rate swaps expiring in June 2024. Pursuant to this amendment, effective on March 31, 2023, the benchmark reference rate was transitioned from LIBOR to Term SOFR and the variable interest rate element on $350 million of the long-term debt was fixed at a rate of 0.3299%.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of March 31, 2023, our disclosure controls and procedures are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”), and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are subject to various legal proceedings, claims, and governmental inspections, audits or investigations arising out of our business which cover matters such as general commercial, governmental regulations, product liability, environmental, intellectual property, employment and other actions that are incidental to our business, including a number of trademark proceedings, both offensive and defensive, regarding the BUMBLE mark. Although the outcomes of these claims cannot be predicted with certainty, in the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on our financial position or results of operations.

For additional information, see Note 14, Commitments and Contingencies, to our unaudited condensed consolidated financial statements included in Part I, “Item 1—Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Item 1A. Risk Factors.

For a discussion of our risk factors, see Part I, “Item 1A—Risk Factors” of our 2022 Form 10-K. Refer also to the other information set forth in this Quarterly Report on Form 10-Q, including in the “Special Note Regarding Forward-Looking Statements,” and in Part I, “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Item 1—Financial Statements (Unaudited)”.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 6. Exhibits.

The following is a list of all exhibits filed or furnished as part of this report:


Exhibit Number		Description

2.1		Agreement and Plan of Merger, dated as of November 8, 2019, by and among Buzz Holdings L.P., Buzz Merger Sub Ltd, Worldwide Vision Limited and Buzz SR Limited, as the seller representative (incorporated by reference to Exhibit 2.1 to the Registrant’s Registration Statement on Form S-1 filed on January 15, 2021).
3.1		Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on February 16, 2021).
3.2		Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on February 16, 2021).
10.1		Amended and Restated Employment Agreement, dated February 22, 2023, by and between Bumble Trading LLC and Anuradha Subramanian (incorporated by reference to Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K filed on February 28, 2023).†
10.2		Amended and Restated Employment Agreement, dated February 22, 2023, by and between Bumble Trading LLC and Laura Franco (incorporated by reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K filed on February 28, 2023).†
10.3*		Amendment No. 2 to the Credit Agreement, dated as of March 20, 2023, by and among Buzz Bidco L.L.C., Buzz Finco L.L.C., the guarantors party thereto, Citibank, N.A., as administrative agent, collateral agent and swingline lender and the lenders party thereto.
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)


*	Filed herewith.
†	Management contract or compensatory plan or arrangement.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	BUMBLE INC.

Date: May 5, 2023	By:	/s/ Whitney Wolfe Herd
		Whitney Wolfe Herd
		Chief Executive Officer

Date: May 5, 2023	By:	/s/ Anuradha B. Subramanian
		Anuradha B. Subramanian
		Chief Financial Officer

Exhibit 10.3

AMENDMENT NO. 2 TO CREDIT AGREEMENT

AMENDMENT NO. 2, dated as of March 20, 2023 (this “Amendment”) to the Credit Agreement, dated as of January 29, 2020, among Buzz BidCo L.L.C., a Delaware limited liability company (“Holdings”), Buzz Finco L.L.C., a Delaware limited liability company (and successor by merger to Worldwide Vision Limited, the “Borrower”), the other Guarantors party thereto from time to time, the lenders party thereto from time to time and Citibank, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”), Collateral Agent, Swing Line Lender and an L/C Issuer (as amended by Amendment No. 1, dated as of October 19, 2020 and as further amended, restated, amended and restated, modified and supplemented prior to the date hereof, the “Credit Agreement” and as amended by this Amendment, the “Amended Credit Agreement”); capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.

WHEREAS, pursuant to the definition of “Eurocurrency Rate” set forth in the Credit Agreement, the Borrower and the Administrative Agent have reasonably determined in good faith that a Benchmark Discontinuation Event has occurred and the Borrower has requested an amendment to the Credit Agreement to replace the LIBO Screen Rate with a Successor Benchmark Rate;

WHEREAS, pursuant to the definition of “Eurocurrency Rate” set forth in the Credit Agreement, the Administrative Agent and the Borrower may enter into an amendment to the Credit Agreement to reflect such alternate rate of interests and such other related changes to the Credit Agreement as may be applicable, and such amendment shall become effective without any further action or consent of any party to the Credit Agreement other than the Borrower and the Administrative Agent;

NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto hereby, agree as follows:

ARTICLE I

Amendment

Upon execution and delivery of this Amendment by each of the parties hereto, the Credit Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the underlined text (indicated textually in the same manner as the following example: underlined text) as set forth in the pages of the Credit Agreement attached as Exhibit A hereto; provided that (A) any Eurocurrency Rate Loans (as defined in the Credit Agreement) outstanding as of the date hereof shall remain Eurocurrency Rate Loans until the end of the applicable Interest Period (as defined in the Credit Agreement) in effect as of the date hereof (but may not be continued as Eurocurrency Rate Loans after such applicable Interest Period) and (B) after the date hereof, any new Loans made (and any Loans into which any existing Loans are converted or continued pursuant to Section 2.02(c) of the Amended Credit Agreement) shall be Loans bearing interest as set forth in the Amended Credit Agreement.

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ARTICLE II

Miscellaneous

Credit Agreement. Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders, the Administrative Agent, the Borrower or any other Loan Party under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect after giving effect to this Amendment. After the date hereof, any reference to the Credit Agreement shall mean the Amended Credit Agreement. This Amendment shall constitute a “Loan Document” for all purposes of the Amended Credit Agreement and the other Loan Documents.

No Novation. This Amendment shall not extinguish the Obligations for the payment of money outstanding under the Credit Agreement or discharge or release the lien or priority of any Loan Document or any other security therefor or any guarantee thereof and the liens and security interests existing immediately prior to the date hereof in favor of the Collateral Agent for the benefit of the Secured Parties securing payment of the Obligations are in all respects continuing and in full force and effect with respect to all Obligations. Except as expressly provided, nothing herein contained shall be construed as a substitution or novation, or a payment and reborrowing, or a termination, of the Obligations outstanding under the Credit Agreement or instruments guaranteeing or securing the same, which shall remain in full force and effect, except as modified hereby or by instruments executed concurrently herewith. Nothing expressed or implied in this Amendment or any other document contemplated hereby shall be construed as a release or other discharge of any Loan Party under the Credit Agreement or any Loan Document from any of its obligations and liabilities thereunder, and except as expressly provided, such obligations are in all respects continuing with only the terms being modified as provided in this Amendment.

Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns (it being understood that rights of assignment of the parties hereto are subject to the further provisions of Section 10.07 of the Amended Credit Agreement).

Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. The provisions of Sections 10.15(b) and 10.16 of the Credit Agreement are incorporated herein and apply to this Amendment mutatis mutandis.

Counterparts. This Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the Administrative Agent. This Amendment and the transactions contemplated hereby shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to

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the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

Headings. The headings of the several sections and subsections of this Amendment are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Amendment.

Severability. Any provision of this Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

[Signature Pages Follow]

#4863-3698-5937

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written.


BUZZ FINCO L.L.C., as the Borrower

By:	/s/ Anuradha Subramanian
	Name:	Anuradha Subramanian
	Title:	Chief Financial Officer