Bumble Inc

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.

On February 16, 2021, the Company completed its IPO and used the proceeds from the issuance to redeem shares of Class A common stock and purchase limited partnership interests of Bumble Holdings (“Common Units”) from entities affiliated with our Sponsor.

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 owners that hold Common Units following the Reclassification 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 158,767,246 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 September 30, 2024.

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

Secondary Offering

On March 8, 2023, the Company completed a secondary offering of 13.75 million shares of Class A common stock on behalf ofcertain selling stockholders affiliated with Blackstone (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 ended March 31, 2023, which were issued in exchange for Common Units held by the selling stockholders.

Bumble did not sell any shares of Class A common stock in the secondary offering 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. All intercompany transactions and balances have been eliminated. The unaudited condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), consistent in all material respects with those applied in the Company's 2023 Form 10-K. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated statements and notes thereto included in the 2023 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 earnings (loss) is modified to present earnings and other comprehensive income (loss) 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.

Condensed Consolidated Statements of Equity for the three months and nine months ended September 30, 2024 include adjustments to correct non-controlling interest, additional paid-in capital and treasury stock related to repurchases of common stock and common units during the year ended December 31, 2023 and the six months ended June 30, 2024. The Company concluded the adjustment to be immaterial to the condensed consolidated financial statements and noted that it has no impact on previously reported consolidated statements of operations, comprehensive operations and cash flows.

Reclassifications

Certain prior year amounts have been reclassified 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 nine months ended September 30, 2024 as a result of new transactions entered into or the adoption of new accounting policies. See Note 2, Summary of Selected Significant Accounting Policies, within the annual consolidated financial statements in our 2023 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 investments in money market funds.

As of September 30, 2024 and December 31, 2023, 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.

Impairment of Goodwill

Goodwill represents the excess of the purchase price of an acquired business over the fair value of net assets acquired. The Company tests for goodwill impairment annually as of October 1 or more frequently when events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

During each annual impairment test, the Company has the option to first assess qualitatively whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The qualitative assessment includes, but is not limited to: (i) deterioration in macroeconomic conditions or changes in market competitiveness; (ii) significant changes in cash flows and cost factors; (iii) changes in planned use of the assets; (iv) a significant decline in the Company’s stock price for a sustained period; and (v) a significant change in the Company’s market capitalization relative to its net book value.

As a result of the qualitative assessment, if the Company determines that it is more likely than not (i.e., greater than 50% likelihood) that the fair value of a reporting unit is less than its carrying amount, it will perform a quantitative test by estimating the fair value of the reporting unit. If the carrying value of a reporting unit exceeds its fair value, the Company records a goodwill impairment loss equal to the excess of the carrying value of the reporting unit over its fair value, not to exceed the carrying amount of goodwill.

Alternatively, the Company is permitted to bypass the qualitative assessment and proceed directly to performing the quantitative assessment.

The Company considers both the income and market approaches to estimate the fair value of a reporting unit. The income approach utilizes a discounted cash flow analysis. The market approach utilizes comparable public company information and key valuation multiples and considers a market control premium and guideline transactions, when applicable. The estimated fair value of a reporting unit is highly sensitive to changes in management’s estimates and assumptions including, but not limited to, the revenue growth rate, discount rate and valuation multiples.

During the three months ended September 30, 2024, the Company recorded $197.2 million of goodwill impairment charges associated with its reporting unit. See Note 5, Goodwill and Intangible Assets, Net.

Impairment of Indefinite-lived Intangible Assets

The Company tests intangible assets that are not amortized (i.e., indefinite-lived brands) for impairment at the asset level. Indefinite-lived intangibles are tested for impairment annually as of October 1 or more frequently if certain circumstances indicate a possible impairment may exist. The Company performs a qualitative assessment to determine whether it is more likely than not that the fair value of the asset is less than its carrying value. If the Company determines that it is more likely than not that the intangible asset is impaired, it performs a quantitative assessment by comparing the fair value of the asset with its carrying amount. If the fair value, which is based on expected future cash flows, exceeds the carrying value, the asset is not considered impaired. If the carrying amount exceeds the fair value, an impairment loss would be recognized in an amount equal to the excess of the carrying amount of the asset over the fair value of the asset.

During the three months ended September 30, 2024, the Company recorded $670.3 million of impairment charges associated with indefinite-lived assets. See Note 5, Goodwill and Intangible Assets, Net.

Impairment of Long-lived Assets and Definite-lived Intangible Assets

Long-lived assets, which primarily consist of property and equipment and right-of-use assets, and definite-lived intangible assets, which primarily consist of developed technology and definite-lived brands, are reviewed for impairment whenever events or circumstances indicate that the carrying value of such assets or asset group may not be recoverable. An asset group is the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The carrying value of such assets or asset groups is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group. If the carrying value is deemed not to be recoverable, an impairment loss is recorded equal to the amount by which the carrying value of the assets or asset group exceeds its fair value. The remaining estimated useful lives of long-lived assets and definite-lived intangible assets are routinely reviewed and, if the estimate is revised, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life.

During the three months ended September 30, 2024, the Company recorded $24.7 million of impairment charges associated with the Fruitz asset group. See Note 5, Goodwill and Intangible Assets, Net.

Share Repurchase Program

Shares repurchased pursuant to the Company's share repurchase program are held as treasury stock and reflected as a reduction of stockholders' equity within the accompanying condensed consolidated balance sheets. Upon retirement, the share repurchases will reduce Class A common stock based on the par value of the shares and reduce its capital surplus for the excess of the repurchase price over the par value. In the event the Company still has an accumulated deficit balance, the excess over the par value will be applied to “Additional paid-in capital.” Once the Company has retained earnings, the excess will be charged entirely to retained earnings.

Direct costs and excise tax obligations will be included in the cost of the repurchased shares in the Company’s condensed consolidated financial statements. Reduction to the excise tax obligation associated with subsequent issuance of shares will be reflected as an adjustment to the excise tax previously recorded.

In May 2023, the Company announced that the Board of Directors approved a share repurchase program of up to $150.0 million of its outstanding Class A common stock with repurchases under the program to be made on a discretionary basis from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or other means, including privately negotiated transactions. The Company announced increases in the share repurchase program authorized amount from $150.0 million to $300.0 million in November 2023 and from $300.0 million to $450.0 million in May 2024. During the three months ended September 30, 2024, the Company repurchased 14.2 million shares of Class A common stock for$89.7 million, excluding excise tax obligations. During the nine months ended September 30, 2024, the Company repurchased 19.5 million shares of Class A common stock and 2.0 million Common Units for$174.1 million, excluding excise tax obligations. There wereno share repurchases during the three months ended September 30, 2023. During thenine months ended September 30, 2023, the Company repurchased 1.3 million shares of Class A common stock for $20.9 million. As of September 30, 2024, a total of$119.0 million remained available for repurchase under the repurchase program. See Note 12, Related Party Transactions, for additional information on share repurchases from Blackstone.

Revenue Recognition

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 and estimated breakage revenue associated with unused in-app purchases. Unused in-app purchase fees expire based on the terms of the underlying agreement and are recognized as revenue when it is probable that a significant revenue reversal would not occur. 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.

During the three and nine months ended September 30, 2024 and 2023, there were no customers representing greater than 10% of total revenue.

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

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$45.3 million and$48.7 million as of September 30, 2024 and December 31, 2023, respectively, all of which is classified as a current liability. During the three months ended September 30, 2024 and 2023, the Company recognized revenue of $3.5 million and $2.9 million, respectively, which was included in the deferred revenue balance at the beginning of each respective period. During the nine months ended September 30, 2024 and 2023, the Company recognized revenue of $47.7 million and $45.0 million, respectively, that was included in the deferred revenue balance at the beginning of each respective period.

Restructuring Charges

Restructuring charges consist primarily of severance, relocation, asset impairment and other related costs. The Company evaluates the nature of these costs to determine if they relate to ongoing benefit arrangements, which are accounted for under ASC 712, Compensation - Nonretirement Postemployment Benefits, or one-time benefit arrangements, which are accounted for under ASC 420, Exit or Disposal Cost Obligations. The Company records a liability for ongoing employee termination benefits when it is probable that an employee is entitled to them and the amount of the benefits can be reasonably estimated. One-time employee termination costs are recognized when management has communicated the termination plan to employees, unless future service is required, in which case the costs are recognized ratably over the future service period. All other related costs are recognized when incurred. Restructuring charges are recognized as an operating expense within the consolidated statements of operations and are classified based on each employee’s respective function. See Note 6, Restructuring Charges, for additional information on restructuring charges.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. ASU 2023-07 is effective for the Company beginning in fiscal year 2024 and interim periods beginning in the first quarter of 2025. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures. The ASU requires entities to provide disaggregated income tax disclosures on the rate reconciliation and income taxes paid on an annual basis. ASU 2023-09 is effective for the Company beginning in fiscal year 2025. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

In March 2024, the FASB issued ASU 2024-01, Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. The ASU clarifies how an entity determines whether a profits interest or similar award is within the scope of Topic 718 or is not a share-based payment arrangement and therefore within the scope of other guidance. Entities can apply the amendments either retrospectively to all prior periods presented in the financial statements or prospectively to profits interest and similar awards granted or modified on or after the date of adoption. If prospective application is elected, an entity must disclose the nature of and reason for the change in accounting principle. ASU 2024-01 is effective for the Company beginning in the first quarter of 2025. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to improve the disclosures of expenses by providing more detailed information about the types of expenses in commonly presented expense captions. The standard requires breaking down expenses into specific categories, such as employee compensation and costs related to depreciation and amortization, as well as a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. This ASU also requires disclosure of the total amount of selling expense and, in annual reporting periods, an entity’s definition of selling expenses. ASU 2024-03 is effective for the Company beginning in fiscal year 2027 and interim periods beginning in fiscal year 2028, either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statement disclosures.

The Company considers the applicability and impact of all recently issued accounting pronouncements. Recent accounting pronouncements not specifically identified in our disclosures are not applicable to the Company.

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. The subsidiaries of Bumble Holdings are also subject to income taxes in the foreign jurisdictions in which they operate.

For the three and nine months ended September 30, 2024, the Company's effective tax rate was(0.5)% and(2.1)%, respectively, which differs from the U.S. federal statutory tax rate of 21% primarily due to a valuation allowance recorded against the deferred tax benefits associated with pre-tax losses in these periods in addition to the tax impacts associated with the geographical distribution of our earnings, income attributable to noncontrolling interests, nondeductible stock-based compensation, and Pillar Two minimum taxes.

For the three and nine months ended September 30, 2023, our effective tax rate was 7.5% and 19.3%, respectively, which differs from the U.S. federal statutory tax rate of 21% primarily due to the geographical distribution of our earnings, income attributable to noncontrolling 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 havenot recorded the benefit of these deferred tax assets as of September 30, 2024. 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, 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$413.0 million related to these benefits as of September 30, 2024. 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$290.4 million for a total liability of $703.4 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 statements of operations. During the nine months ended September 30, 2024, our tax receivable agreement liability decreased by a net$17.2 million due to the following:(1) a $23.1 million decrease from tax receivable agreement payments made during the first quarter of 2024, and (2) a partially offsetting net increase of $5.9 million, primarily due to the effects of the repurchase of Common Units in Bumble Holdings from Blackstone entities completed in the first quarter of 2024 and the effects of the repurchase of Common Units in Bumble Holdings from Bumble during 2024, the proceeds from which were used to fund Class A common stock repurchases during 2024.

Note 5 - Goodwill and Intangible Assets, Net

Goodwill

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

During the three months ended September 30, 2024, the Company identified potential impairment triggering events indicating that the fair value of its reporting unit was more likely than not less than its carrying value. These triggering events included the Company’s revised 2024 outlookand a decrease in the Company’s stock price and market capitalization that was sustained during the third quarter of 2024. In accordance with ASC 350, Intangibles – Goodwill and Other, the Company performed a quantitative goodwill impairment test. The fair value of the reporting unit was estimated using a combination of two approaches, an income approach, employing a discounted cash flow model, and a market approach, employing a guideline public company approach. These valuation approaches require the Company to make various assumptions regarding the timing and amount of expected cash flows, including, but not limited to, the revenue growth rate, the discount rate and valuation multiples. As a result of this impairment test, the Company recognized a goodwill impairment charge of $197.2 million during the three and nine months ended September 30, 2024. The fair value of the Company’s reporting unit was impacted by its revised forecast, as well as adverse macroeconomic factors, including but not limited to, slower economic growth, a higher cost of borrowing, inflationary pressures, and fluctuations in foreign currency exchange rates. There wereno impairment charges recorded for the three and nine months ended September 30, 2023.

Intangible Assets, Net

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

During the three months ended September 30, 2024, the decline in the Company's stock price and market capitalization indicated that the fair value of the Company's indefinite-lived assets was more likely than not less than its carrying value. The Company evaluated the fair value of its indefinite-lived assets by using the relief from royalty methodology based on management’s assumptions. This valuation approach requires the Company to make various assumptions regarding the timing and amount of expected cash flows, including, but not limited to, the revenue growth rate, royalty rate, and discount rate. As a result, the Company recognized an impairment charge of $670.3 million associated with the indefinite-lived assets during the three and nine months ended September 30, 2024, representing the difference between the carrying value and the fair value of the Company's indefinite-lived intangible assets.

Additionally, the Company assessed the recoverability of our long-lived assets and definite-lived intangible assets at the asset group level and determined that the carrying value of the Fruitz asset group was not recoverable. The Company then evaluated the fair value of the Fruitz asset group using a discounted cash flow method, which required the Company to make various assumptions, including, but not limited to, the revenue growth rate and discount rate. As a result of this impairment test, the Company recognized $24.7 million of impairment charges during the three and nine months ended September 30, 2024. The impairment charges were allocated to the Fruitz asset group on a pro-rata basis based on the carrying amounts of the long-lived assets and definite-lived intangible assets. Additionally, the Company revised the remaining useful life of certain definite-lived intangible assets of Fruitz.

There wereno impairment charges recorded for the three and nine months ended September 30, 2023.

On July 1, 2024, the Company completed the acquisition of Geneva Technologies, Inc. (“Geneva”) for total cash consideration of $17.5 million (the “Purchase Consideration”), net of cash acquired. The principal assets of Geneva, which is a pre-revenue company, are a social networking and communications platform for building friendship and community and related intellectual property rights. As substantially all of the fair value of the acquired assets was concentrated in Geneva’s developed technology, the transaction did not meet the definition of a business combination. As such, the Company accounted for this transaction as an asset acquisition in accordance with ASC 805, Business Combinations. The Purchase Consideration was allocated to the acquired assets and liabilities based on their relative fair values, with $17.2 million allocated to developed technology, which will be amortized on a straight-line basis over four years, and $0.3 million allocated to other assets and liabilities.

Amortization expense related to intangible assets, net for the three months ended September 30, 2024 and 2023 was $16.4 million and $14.9 million, respectively, and for the nine months ended September 30, 2024 and 2023 was $47.1 million and $43.8 million, respectively.

As of September 30, 2024, amortization of intangible assets with definite lives is estimated to be as follows (in thousands):

Note 6 - Restructuring Charges

On February 27, 2024, the Company announced that it adopted a restructuring plan (the “Restructuring Plan”) to reduce its global workforce by approximately 350 roles to better align its operating model with future strategic priorities and to drive stronger operating leverage. The Restructuring Plan was completed in the third quarter of 2024, and the Company incurred approximately$20.4 million of total non-recurring charges through the third quarter of 2024, consisting primarily of employee severance, benefits, and related charges for impacted employees. The following table presents the total non-recurring restructuring charges by function for the periods indicated (in thousands):

The Company didnot record any restructuring charges for the three and nine months ended September 30, 2023. As of September 30, 2024, the remaining$1.3 million restructuring liability consists primarily of accrued severance costs, which are included in "Accrued expenses and other current liabilities" in the accompanying condensed consolidated balance sheets.

The following table summarizes the restructuring-related liabilities (in thousands):

Note 7 - Other Financial Data

Consolidated Balance Sheets Information

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

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

Other long-term liabilities are comprised of the following balances (in thousands):

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):

There were no transfers between levels between September 30, 2024 and December 31, 2023.

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 uses interest rate derivative instruments to manage the risk related to fluctuating cash flows from interest rate changes on the debt. These instruments are not designated as hedges for accounting purposes and are recorded in “Other current assets,” “Other noncurrent assets,” “Accrued expense and other current liabilities” or “Other long-term liabilities,” with changes in fair value recognized in “Other income (expense), net.” The Company's derivative asset, which consists of interest rate swaps, is measured at fair value on a recurring basis using observable market data (Level 2) and totaled$1.3 million and$8.3 million as of September 30, 2024 and December 31, 2023, respectively. The fair value of interest rate swaps is estimated using a combined income and market-based valuation methodology based on Level 2 inputs, including forward interest rate yield curves obtained from independent pricing services. Derivative assets are included in “Other noncurrent assets” as of September 30, 2024 and “Other current assets” as of December 31, 2023 in the accompanying condensed consolidated balance sheets.

The Company’s contingent earn-out liability is measured at fair value on a recurring basis using significant unobservable inputs (Level 3) and totaled$0.7 million and$22.8 million as of September 30, 2024 and December 31, 2023, respectively. Contingent earn-out liability is included in “Accrued expenses and other current liabilities” in the accompanying condensed consolidated balance sheets.

As of September 30, 2024, there is a contingent consideration arrangement, consisting of an earn-out payment to former shareholders of Worldwide Vision Limited of up to $150.0 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 September 30, 2024 and December 31, 2023, the fair value of the contingent earn-out liability reflects a risk-free rate of 4.2% and 5.0%, respectively.

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 stock price, discount rates and the timing of the future payments, which are based upon estimates of future achievement of the performance metrics. 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$(2.7) million and$(11.3) million for the three months ended September 30, 2024 and 2023, respectively, and$(22.0) million and$(24.2) million for the nine months ended September 30, 2024 and 2023, respectively.

Assets and liabilities that are measured at fair value on a non-recurring basis include indefinite-lived intangible assets, long-lived assets, definite-lived intangible assets and goodwill. During the three months ended September 30, 2024, the Company recorded impairment charges of $670.3 million for indefinite-lived intangible assets, $24.7 million for the Fruitz asset group and $197.2 million for goodwill. The Company determined the fair value of indefinite-lived intangible assets, Fruitz long-lived assets and definite-lived intangible assets and its reporting unit for goodwill impairment using unobservable inputs (Level 3). Refer to Note 2, Summary of Selected Significant Accounting Policies and Note 5, Goodwill and Intangible Assets, Net.

Note 9 - Debt

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

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 “Credit Agreement”), which permitted the Company to borrow up to $625.0 million through aseven-year $575.0 million term loan (“Original Term Loan”), as well as afive-year senior secured revolving credit facility of $50.0 million (the “Revolving Credit Facility”) and $25.0 million available through letters of credit.

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”).

On March 20, 2023, in connection with a Benchmark Discontinuation Event, the Company entered into Amendment No. 2 to the 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 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 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 September 30, 2024 were 8.10% and 8.60%, respecti vely. 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 termof the facility. Principal amounts outstanding under the Revolving Credit Facility are due and payable in full at maturity on January 29, 2025. As of September 30, 2024, and at all times during the nine months ended September 30, 2024, 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 September 30, 2024. 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.

Note 10 - Earnings (Loss) per Share

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):

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):

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:

Note 11 - Stock-based Compensation

Total stock-based compensation expense was as follows:

During the three and nine months ended September 30, 2024, stock-based compensation expense decreased from the same periods in 2023, primarily due to forfeitures for terminations including the reduction in force related to the Restructuring Plan.

Incentive Units in Bumble Holdings

The following table summarizes information around Incentive Units in Bumble Holdings:

As of September 30, 2024, total unrecognized compensation cost related to the Time-Vesting Incentive Units was $0.7 million, which is expected to be recognized over a weighted-average period of 0.5 years. As of September 30, 2024, total unrecognized compensation cost related to the Exit-Vesting Incentive Units was $1.2 million, which is expected to be recognized over a weighted-average period of 0.8 years.

Restricted Shares of Class A Common Stock in Bumble Inc.

The following table summarizes information around restricted shares in the Company:

As of September 30, 2024, total unrecognized compensation cost related to the Time-Vesting restricted shares was $3.4 thousand, which is expected to be recognized over a weighted-average period of 0.3 years. As of September 30, 2024, total unrecognized compensation cost related to the Exit-Vesting restricted shares was $13.7 thousand, which is expected to be recognized over a weighted-average period of 0.8 years.

RSUs in Bumble Inc.

The following table summarizes information around RSUs in the Company:

During the nine months ended September 30, 2024 and 2023, the total fair value of vested RSUs as of the respective vesting dates was $24.7 million and $36.0 million, respectively. As of September 30, 2024, total unrec ognized compensation cost related to the Time-Vesting RSUs was $44.8 million, which is expected to be recognized over a weighted-average period of 2.8 years. As of September 30, 2024, total unrecognized compensation cost related to the Exit-Vesting RSUs was $0.6 million, which is expected to be recognized over a weighted-average period of 0.8 years.

Options

The following assumptions were utilized to calculate the fair value of Time-Vesting Options granted during the nine months ended September 30, 2024:

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

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

As of September 30, 2024, total unrecognized compensation cost related to the Time-Vesting options was $19.5 million, which is expected to be recognized over a weighted-average period of 3.2 years. As of September 30, 2024, total unrecognized compensation cost related to the Exit-Vesting options was $34.8 thousand, which is expected to be recognized over a weighted-average period of 0.8 years.

Note 12 - Related Party Transactions

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

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 20% of ownership interests, for moderator services.

Share Repurchase

In December 2023, the Company and Bumble Holdings entered into an agreement with certain entities affiliated with Blackstone in a private transaction under the Company’s existing share repurchase program, under which the Company agreed to repurchase approximately 4.0 million shares of its Class A common stock beneficially owned by Blackstone and Bumble Holdings agreed to repurchase from Blackstone approximately 3.2 million Common Units, which are exchangeable for shares of Class A common stock on a one-for-one basis, for an aggregate purchase price of $100 million. In March 2024, the Company and Bumble Holdings entered into an agreement with certain entities affiliated with Blackstone in a private transaction under the Company’s existing share repurchase program, under which the Company agreed to repurchase approximately 2.5 million shares of its Class A common stock beneficially owned by Blackstone and Bumble Holdings agreed to repurchase from Blackstone approximately 2.0 million Common Units, which are exchangeable for shares of Class A common stock on aone-for-one basis, for an aggregate purchase price of $50 million.

Note 13 - Segment and Geographic Information

The Company operates as asingle 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):

The United States is the only country with revenues of 10% or more of the Company's total revenue for thethree and nine months ended September 30, 2024 and 2023.

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.

These actions frequently seek putative damages that may significantly exceed our assessment of any reasonably possible loss from the resolution of such actions. We record a liability for legal claims when the Company determines that a loss is probable and the amount can be reasonably estimated, and, if the liability is material, we disclose the amount of the liability reserved. Except as otherwise disclosed below, while it is reasonably possible that a loss for a particular matter may be incurred in excess of recorded amounts as of September 30, 2024, a reasonable estimate of the amount or range of possible loss in excess of amounts already accrued cannot be made at this time.

These matters are subject to inherent uncertainties and it is possible that an unfavorable outcome of one or more of these legal proceedings or other contingencies could have a material impact on the business, financial condition, or results of operations of the Company.

Litigation Related to the Illinois Biometric Information Privacy Act (the “BIPA”)

In late 2021 and early 2022, four putative class action lawsuits were filed against the Company alleging that certain features of the Badoo or Bumble apps violate the Illinois BIPA. Each of these lawsuits allege that the apps used facial geometry scans in violation of BIPA’s authorization, consent, and data retention policy provisions. Plaintiffs in these lawsuits seek statutory damages, compensatory damages, attorneys’ fees, injunctive relief, and (in one action) punitive damages. The parties reached a proposed class action settlement in these lawsuits, which were consolidated on May 30, 2024. The settlement was preliminarily approved on June 6, 2024, and the Court entered a final approval order as to the settlement on October 24, 2024.

Between September 2023 and March 2024, the Company received approximately 29,000 pre-arbitration demands regarding Bumble’s alleged violation of BIPA. The parties reached settlements to resolve all of these individual demands, and the settlements have been fully paid as of August 1, 2024.

An accrual has been made based on the probable and estimable loss in connection with the aforementioned class and individual matters. For the three and nine months ended September 30, 2024, we recordednil and $2.5 million, respectively, in costs in connection with the aforementioned class and individual matters.

In February 2024, an additional class action lawsuit was filed in Illinois alleging that certain features of Bumble app violate BIPA. The case has been administratively terminated pending resolution of the plaintiff’s individual claims in arbitration.

Proceedings Related to the September 2021 Secondary Public Stock Offering (the “SPO”)

Six shareholder derivative complaints have been filed in the United States District Court for the Southern District of New York, United States District Court for the District of Delaware and Delaware Court of Chancery against the Company and certain directors and officers asserting claims under the U.S. federal securities laws that the Registration Statement and prospectus used for the SPO contained false and misleading statements or omissions by failing to disclose certain information concerning Bumble and Badoo app paying users and related trends and issues with the Badoo app payment platform, and that as a result of the foregoing, Bumble’s business metrics and financial prospects were not as strong as represented in the SPO Registration Statement and prospectus. The Glover-Mott shareholder derivative complaint was filed in April 2022 in federal court. The Michael Schirano shareholder derivative complaint was filed in May 2023 in federal court. The United States District Court for the District of Delaware ordered the two actions consolidated in August 2023 under the caption In Re Bumble Inc. Stockholder Derivative Litigation. An amended consolidated complaint was filed in August 2023 alleging violations of Section 14(a) of the Exchange Act, Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and Section 29(b) of the Exchange Act, as well as for breach of fiduciary duty, waste, and unjust enrichment against, among others, management, our Board of Directors and Blackstone. The complaint seeks unspecified damages; rescission of certain employment agreements between the individual defendants and the Company, disgorgement from defendants of any improperly or unjustly obtained profits or benefits; an award of costs and disbursements, including reasonable attorneys’ fees; punitive damages; pre- and post-judgment interest, and that the Company be directed to take action to reform its corporate governance and internal procedures.

Two federal court shareholder derivative complaints were voluntarily dismissed in July 2023.

In January 2023 and February 2023, purported shareholders Alberto Sanchez and City of Vero Beach Police Officers’ Retirement Trust Fund, respectively, filed shareholder derivative complaints in the Delaware Court of Chancery. In March 2023, the Delaware Court of Chancery consolidated those actions under the caption In re Bumble Inc. Stockholder Derivative Litigation. In April 2023, the consolidated action plaintiffs filed a consolidated complaint that asserts claims for breach of fiduciary duty and unjust enrichment against, among others, management, our Board of Directors, and Blackstone. The complaint seeks unspecified damages; a finding that the individual defendants breached their fiduciary duties; disgorgement from defendants of any unjustly obtained profits or benefits; and an award of costs and disbursement, including attorneys’ fees, accountants’ fees, and experts’ fees. In October 2023, the court denied defendants’ motion to dismiss the consolidated complaint.

In August 2023, Bumble received litigation demands from (i) counsel representing the purported Bumble shareholder who filed the voluntarily dismissed William B. Federman Irrevocable Trust derivative action in the U.S. District Court for the District of Delaware and (ii) counsel representing the purported Bumble shareholder who filed the voluntarily dismissed Dana Messana derivative action in the U.S. District Court for the District of Delaware. Both litigation demands are directed to the Bumble Board and contain factual allegations involving the September 2021 SPO that are generally consistent with those in the derivative litigation filed in state and federal court. The letters demand, among other things, that Bumble’s Board undertake an independent investigation into alleged legal violations, and that Bumble commence a civil action to pursue related claims against any individuals who allegedly harmed Bumble. In November 2023, Bumble formed a Special Litigation Committee (“SLC”) to investigate the claims at-issue in the In Re Bumble

Inc. Stockholder Derivative Litigation pending in the United States District Court for the District of Delaware and Delaware Court of Chancery, as well as the William B. Federman Irrevocable Trust and Dana Messana litigation demands. In January 2024, the Delaware Court of Chancery entered an order staying the litigation for 180 days to allow the SLC to conduct its investigation, and the United States District Court for the District of Delaware so-ordered a stipulation similarly staying the litigation until July 15, 2024 to allow the SLC to conduct its investigation. In June 2024, the stay was extended by 10 days to July 25, 2024 in both the United States District Court for the District of Delaware and the Delaware Court of Chancery. On July 25, 2024, the SLC submitted a report of its factual findings and legal analysis. The SLC determined that terminating and dismissing the litigation would best serve the interests of the Company and its stockholders. The SLC moved to terminate and dismiss with prejudice the litigation pending in the Delaware Court of Chancery, and pursuant to prior Court Order, agreed to meet and confer with the parties to the litigation pending in the United States District Court for the District of Delaware concerning proposed next steps in that litigation, including a motion by the SLC to dismiss the litigation. The SLC also informed counsel for the shareholders who brought litigation demands (William B. Federman Irrevocable Trust and Dana Messana) of its findings. In October 2024, the United States Court for the District of Delaware granted a stay of the litigation pending a decision on the SLC’s forthcoming motion to terminate the Delaware Court of Chancery action. Management is unable to determine a range of potential losses that is reasonably possible of occurring.

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

Proceedings Related to the California Unruh Civil Rights Act (the "Unruh Act")

On April 9, 2024, a putative class action complaint was filed against the Company in the United States District Court for the Central District of California, also alleging that Bumble’s “women message first” feature violates the Unruh Act. Plaintiffs in these lawsuits sought declaratory and injunctive relief, statutory damages, and attorneys’ fees and costs. On July 8, 2024, the named plaintiffs filed a notice voluntarily dismissing the action without prejudice.

On August 16, 2024, the named plaintiffs refiled their Unruh Act claims in the Superior Court of the State of California for the County of Riverside, this time naming as defendants both the Company and its founder, Executive Chair and former CEO Whitney Wolfe Herd. Similar to the action filed on April 9, 2024, the litigation is a putative class action in which the named plaintiffs allege that the “women message first” feature violates the Unruh Act. Plaintiffs seek declaratory and injunctive relief, statutory damages, and attorneys’ fees and costs. On October 9, 2024, the action was removed to the United States District Court for the Central District of California, where it is currently pending.

Proceedings Related to 2024 Financial Results

In September 2024, a purported securities class action complaint was filed in the United States District Court for the Western District of Texas, naming the Company and certain of its current executives and directors as defendants. The complaint asserts claims under Sections 10(b) and 20(a) of the Exchange Act, alleging that the defendants made or disseminated materially false and misleading statements and/or concealed material adverse facts concerning Bumble’s relaunch strategy announced in 2024. The class action complaint seeks unspecified damages and an award of costs and expenses, including reasonable attorneys’ fees, as well as equitable relief.

On October 31, 2024, a shareholder derivative complaint was filed in the United States District Court for the Western District of Texas, naming as defendants certain of our current and former executives and directors, as well as the Company as a nominal defendant. The complaint asserts state and federal claims based on the same alleged misstatements as the securities class action complaint. The complaints seek unspecified damages, attorneys’ fees, and other costs.

The Company intends to vigorously defend against the claims asserted in the lawsuits. However, any litigation is inherently uncertain, and any judgment or injunctive relief entered against the Company, or any adverse settlement, could materially and adversely impact the business, results of operations, financial condition and prospects of the Company.

Other Proceedings

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

As of September 30, 2024 and December 31, 2023, the Company determined that provisions of$39.7 million and$65.8 million, respectively, reflect our best estimate of any probable future obligation for the Company’s litigations. During the three and nine months ended September 30, 2024, the Company paid $0.7 million and $26.4 million, respectively, to settle litigation matters, which amount is accordingly no longer reflected in the provision as of September 30, 2024. Legal expenses are included in “General and administrative expense” in the accompanying consolidated statements of operations.

Purchase Commitments

In May 2023, the Company amended an agreement with one of our third parties related to cloud services, which superseded and replaced the September 2022 agreement. Under the amended terms, the Company is committed to pay a minimum of $12.0 million over the period of 18 months from May 2023. If at the end of the 18 months, or upon early termination, the Company has not reached the $12.0 million in spend, the Company will be required to pay for the difference between the sum of fees already incurred and the minimum commitment. As of September 30, 2024, our minimum commitment remaining is$2.6 million.

Note 15 - Subsequent Events

In October 2024, the Company repurchased 4.4 million shares of Class A common stock pursuant to a trading plan under Rule 10b5-1 of the Exchange Act in the amount of $30.0 million, excluding excise tax obligations. As of October 31, 2024, a total of $89.0 million remained available for repurchase under the program, subject to an approximately 3.1 million share repurchase limit, which may be increased pursuant to authorization from the Company’s Board of Directors.