Ygal Arounian, Internet team here at Citi. Really excited to have Bumble CFO Anu Subramanian. Did I get that right?
Right.
All right. Thanks for joining us. I think it's the first time I said your last name out loud, so. But thanks for joining us. Really excited to have you here.
Thank you for having me.
Before I start, I'm just gonna read Bumble's safe harbor. So, this presentation, including our comments and answers to questions, may include forward-looking statements. These forward-looking statements are subject to various risks, and the uncertainties reflect our current expectations based on our beliefs, assumptions, and information currently available to us. Descriptions of these factors and other risks that could cause actual results to differ materially from these forward-looking statements are discussed in more detail in our earnings press release dated August 8th, 2023, and our filings with the SEC, including our annual report on Form 10-K for the year ended December 31st, 2022, and our subsequent periodic filings. That out of the way?
Well.
So when we look up at Bumble, a lot seems to be going in the right direction. Consistently growing over 20%, it's really one of the strongest growth rates within our internet landscape. On top of that, I think execution on products, product releases has improved. You're seeing share gains, you're seeing margin expansion. Yet when we look at the stock, it's this year, it's been under pressure, you're trading at a discount to your peers. You know, what do you think it is that investors, from your point of view, are misunderstanding about the story, and what do you think investors should be focused to gain more confidence?
Sure. So, you know, I think if you take a step back and you think about Bumble, you know, Inc's mission, right? Our mission is to create healthy and equitable relationships for all, right? And we are about doing that, not just, you know, today, but in the long term. And within the relationship space, dating is where we play now. And within dating, if you look at the assets that we have, we have Bumble, Badoo, and Fruitz, which are, you know, large-scaled assets. Fruitz is smaller, but growing within the Gen Z space. And, you know, they're scaled assets in a category that's actually pretty difficult to scale, right?
I mean, dating in itself is a network business, and many companies have tried to start dating apps, but very few have been able to get to the scale and size that, you know, we've been at. And I think that's pretty unique. And if you think about dating as a category, and you think about the number of singles that exist in the world, there is a ton of room still for the category to grow, both from a secular perspective as well as from a innovation and product perspective. And that's definitely something that we've spent a lot of time over the last few years, really focused on. Our product roadmap is the most exciting it's ever been, and we've been shipping stuff out, right? And you've obviously seen that in our results.
To your point, you know, we are a company, this year will be upwards of $1 billion in revenue and growing at scale, and we are extremely profitable. From a financial profile perspective, very few companies are able to do that. You know, we also throw out a ton of cash. Again, if you put it all together, this is a business that is inherently a very, very good business. From our perspective, our goal is just to make sure that, you know, we continue to deliver on that mission of healthy and equitable relationships. If you think beyond dating for a second, and we'll talk, I guess, more today about BFF and Official, we want to play in the larger relationship category.
If you look at us from a brand perspective, there are very, very few companies, I can probably think of none other than us, that have the permission to actually play both in dating and in other relationship categories, right? You can think of other dating apps that suddenly would become a mainstream app for friendship, as an example, right? So we are very, very excited about what the brand means. And you know, we're just putting our heads down, and we are focused on our strategies for, you know, the next few years, and we know that ultimately that's going to be the biggest proof point for how we do as a business.
Okay, great. So we'll dig into all those things. But let's start with payer growth. I think it's top of mind for most investors, and that's been trending in the right direction for the core Bumble app. You raised the guidance slightly there in 2Q. So you're coming in a little bit ahead of expectations. Maybe one of the things that investors get caught up in a little bit for Bumble is, like, how to understand the sustainability or how to think about the sustainability of user growth.
I don't know, maybe you could talk about it in the context of, you know, free users at the top of the funnel, and then conversion to paying users, and how you see that opportunity to sustain the growth that you've been seeing.
Yeah, sure.
The share gains, which is pretty important.
Yeah, sure. So inherently, Bumble's job is to connect people, help people find matches so that they can then go meet in real life, right? Ultimately, that's our goal. So it is in some ways, you know, it's a, it's a, it's a marketplace business that has demand and supply on both sides of the equation. And it is a freemium app, which means anybody can use the app for free, and a subset of people pay for the app, to access, you know, enhanced features. So, the most important thing for us is in making sure that our overall user base is healthy, it's stable, and we are very, very focused on creating the best ecosystem possible.
'Cause ultimately, if you have a very lopsided balance of genders, demographics, intentions within the app, then that just leads to a bad user experience ultimately, and, you know, you can't monetize, and you can't do all the things that we wanna do, right? So that you know, first and foremost, continues to be the biggest thing that we focus on as a business. And that spans, not just our core markets, all our international markets. And the strength that you've seen in the last three years across, you know, the many markets that we are in, you know, really shows that the brand really resonates across the globe, and the brand really stands for safe, healthy connections, right? That's, that's what, you know, we're, we're really focused on as a business.
And then once we get the right user base, then we have things that we do from a product perspective, from a user perspective, that then helps us convert those users into paying users, right? And that can span everything from always-on optimizations that we do. Again, these are small things that you may never see on a daily basis as big features, but they drive a lot of value in converting people from being a free user into a paying user. These also include always-on pricing optimizations that we do. This also includes big, you know, features that we launch. And, you know, people often get very, very excited about the new feature launches, but we never release a feature just to say we want more payers or we wanna you know, deliver more revenue.
We are always thinking about it from an overall ecosystem perspective. Is it going to get more users into the platform? Is it going to have better engagement? All of that, right? And ultimately, like I said, you know, we focus on making sure that the customer has the best possible experience, and that's what, you know, you've seen reflected in the numbers over the last few years. Obviously, to your point, this year, most recently, we guided to higher net adds than what we had originally guided to at the beginning of the year. And so we feel, you know, very good about where we are on our trajectory. And we know, like I said earlier, there is a ton of room for us to continue growing.
Ultimately, if you look at the value that dating apps provide, and the price point at which we, dating apps provide that value, it is a very small, the price point is very small compared to what people spend in their overall dating journey. So I think if you put all of these things together, you know, it makes for continued sort of health in the future as well.
Got it. So, within that, do you think about the competitive landscape at all, or you just kind of heads down, focused on your own product? And you hit on one of the things that investors, I think, get stuck on a little bit, and that's kind of like the industry-level growth where, you know, you see, still see a big opportunity. So which is important, 'cause it, it's a difference between growing because you're shifting share versus, like-
Right
... the total pie is still growing. So how do you see, see those two things?
Yeah. So, you know, if you go back to, you know, why we've seen strength over the last few years, I think it really goes back to what Bumble stands for from a brand perspective, right? Our brand is our biggest moat, and, people really... and, and the brand really resonates with our audience, right? And the Bumble, you know, was the only brand that was built to put women at the center of the relationship. We put power back in the hands of women, and in a category which historically has not been great for women, right? And so every product that we think about is built with women at the center of the experience, and that truly, I think, has been one of our biggest sort of reasons for why we've seen the share gains that we've seen.
And you'll never see us sort of, sort of veer away from that, you know, in the future as well. I think that is going to be the most important thing for us as we think about continuing to grow in the category. And that allows us to not have to just spend to get a customer, right? A lot of the growth that we have is very organic. It's based on network effects, it's based on the virality that comes because you have, you know, women walking around on college campuses wearing Bumble hats and Bumble sweatshirts and Bumble t-shirts, and talking about the brand as being much more than a dating app, right? And so we are able to cater to different age groups, different generations of people that want to find a safe and healthy, and equitable relationship.
That inherent need, if you think about the category as a whole, is not going anywhere, right? People are still going to always want to find a relationship. And there's a lot of talk about, oh, you know, how does Gen Z date? What do they want? Ultimately, it doesn't matter who you are, how old you are, what generation you're on, you're still looking to find a relationship. The dynamics and the mechanics of how people want that may change over time, and that is where, you know, we are very focused from a product perspective in making sure that we offer that right product experience. So you are 18, we want to meet you where you are, and if you're 50 and you're in your second, you know, span of a long-term relationship, we wanna meet you where you are, right?
I think we feel very, very comfortable that the category as a whole is still very healthy. It's going to continue growing, because, again, if you go back to the number of people that are still single and looking for relationships, you know, that is still... that, that tab still exists.
Right. Okay, so let's dive into the products, 'cause that's pretty important. You know, you're not launching products for the sake of it, but it matters in terms of the experience. So you guys have been busy. You've had a number of things coming out, talk Compliments, Best Bees, the standalone BFF app, which we'll talk about more. You've talked about developing new tiers. So within all that, maybe just expand a little bit on the biggest drivers. Is there anything we're missing, other products that you kind of think about, on the roadmap?
So, product and innovation is definitely everything for us, right? And it is not just for monetization, it's not just to get more revenue, it is to drive more users, all the things that we talked about today, right? Ultimately, the engagement user experience is all driven by what we do from a product perspective. And if at any point in the user flow we see friction, we have the ability to fix that with our product, right? So from a roadmap perspective, I think, I said this earlier, our roadmap is the most exciting we've had in many years. And, the reason for that is it's a very balanced roadmap because it has features that go towards a user's core experience. It has features that cater towards new geographies. It has features that cater towards new monetization experiences.
You know, to your point about BFF, it has features that, you know, it has new things as well that go beyond dating. So the teams have been really, you know, heads down on delivering on the product experience, and you clearly see that in the numbers in terms of, you know, the revenue that we've posted and the Net Adds that we've been posting. So a very exciting time.
Okay. Well, so let's dig into two of those just to understand your philosophy maybe a little bit more. So, the Best Bees product, you kind of just rolled into the experience, not a separate monetization product, versus Compliments, which has been a, I don't know, maybe if your most important, if not your most important recent product launch, it's certainly up there, and that you're monetizing separately. So why the approach? Why, why is one rolled in versus one separate? Just to kind of understand how you think about the products and where they fit.
Sure. So when we launch a product, we rarely think about it as purely a, "This has to be a consumable, this has to be a subscription." We are always thinking about it more from a, "What does this mean for a user perspective?" And often, you know, we tend to take a test, learn, iterate approach to product, which spans many months and many quarters. Yeah, you'll rarely see us drop a product in a quarter and then just say, "We are done," right? So if you think about Compliments, we launched Compliments because we received a lot of feedback from our users, especially men, where they said that they would love... Because on our app, women have to make the first move, men often had to swipe right and then wait for the woman to make the first move.
Men often wanted a mechanism to stand out, and they wanted additional ways to express themselves. Equally, we heard from women that sorting through the, you know, hundreds of likes that they get from men, if there was an easy way for them to sort of sort through that, that would be a great thing. That's really how we thought about Compliments. On Compliments today, you can message before match. Even if you think about the way we... The Compliments, the word itself is very in tune with how we think about it from a brand perspective, right? Compliments is not called messaging, it's not called reaction, it's actually a compliment. It's meant to be something that's kind, it's meant to be something that's positive.
When we first launched this end of Q4, early Q1 this year, we actually launched it as an additional feature to our existing payers, and that was actually in our PPO driver in the beginning of the year. As we've started to expose it now to non-payers and to our large freemium user base, we've started to see that now become a payer conversion, right? So it isn't, again, a one-size-fits-all approach for any product. You'll see us continuously experimenting with every feature that we have. Even our existing consumables, like Spotlight and SuperSwipe, they exist as standalone features, but they also exist within the premium category in different iterations. And so that goes back to... Then that goes to Best Bees.
Again, if you think about it similarly, we launched Best Bees actually as a consumable, and we started to see that the entry point for Best Bees was actually a very strong conversion driver for people to actually not just buy it as a consumable, but actually then subscribe to Bumble Premium. So we said, "You know what? Why don't we just offer it as a additional value add to our existing subscription feature?" It doesn't, you know, preclude us from still having it as a consumable in the future at some point, but right now we think that having that be another anchor feature for Bumble Premium is a, is a really good thing, and that's what we are focused on. I will say, there is still a lot of work we need to do to optimize these features.
The awareness for something like Compliments, for example, is still has a lot of opportunity. There are lots of people that don't know what the Compliments button on the screen means. You know, between CRM, product marketing, all of those things, there is still a lot of work that we still need to do to make sure that everybody understands the product.
Okay. That's really helpful. Is there any way to kind of financially frame how, you know, investors should think about... I don't know, maybe you answer it for Compliments specifically or more broadly on the products, like how, how it drives conversion or ARPPU growth, like, you know, you roll out Compliments, how do you think about the impact it can have from the outside looking in?
Yeah. You know, I would say for this year, we've said of the new features that we've launched, Compliments is the biggest contributor to revenue. Again, remember, a big part of our sort of revenue and payer growth comes from just growth in our user base, the optimization work that we do. The new features this year are, you know, if I put these into three buckets, are the smallest of the three buckets, right? Of where revenue growth is coming from. And of that, Compliments, I would say, is the biggest one. But again, it is, I would still classify the contribution from Compliments and Best Bees as still something that is going to continue to grow over time, because the exposure and the knowledge of these features is still low on the app.
and we are already seeing, amongst the people that know about the features, we are seeing really strong engagement rates. People that use Compliments, you know, are seeing better match rates, so all of the numbers are trending in the right direction. We are just now heads down, focused on making sure that we continue to roll it out to more people, make people understand what it means, tweak the experience, all of that. So more to come as we continue to iterate.
Got it. And just to follow up, so that's the smallest of the three buckets, and then the other two would be?
The other two would be user growth would be our biggest bucket. And then the second would be what we call always-on optimizations, you know, to drive payer or conversion up. Yeah.
Right. So then the other... I don't know if you consider this product be a big kind of thing, is new tiers. So you've talked about potentially a premium tier, and then, and then one on the lower end, which I think would be more geared towards the Gen Z audience. Can you talk about those, those new tiers, the, the roadmap and the, you know, impact you expect?
Yeah, sure. So if you go back to the point about we are a Freemium app, and we have a small percentage of people that pay for our app, we do know that we have a ton of users on the platform that are engaged with the app in a very meaningful way, but are not paying for the app, right? And as you think about how do you continue to expand that percentage, we've been thinking about people on sort of both ends of the spectrum, right? So if you from an age band perspective, and the decision to add more tiers really was born out of this, right? So if you think about the 18- to 22-year-old, and I'm not even saying Gen Z, because Gen Z spans a larger age group.
But we said, "Okay, if you think about a college-age user on our platform, these are people that use our app, but, you know, they are in a college environment where they can go to bars every day and are surrounded by, you know, liquidity, for lack of a better word," right? "They're surrounded by a ton of people. But they love using the app because they love the features of the app, right? But they may not be paying for Bumble Premium because they don't necessarily need the features that are on Bumble Premium." So what our focus from a base tier is on really is: how do you allow that group to express themselves in a way that's much more authentic to them, much more meaningful to them?
And that could be, you know, by giving them options to add stickers, as an example. It could be things like college verification that we've tested, right? That makes who they see on the app more meaningful. And it would be at a lower price point, but it allows us to convert a portion of the users that at that, you know, life stage may not convert, right, normally. And then equally, on the other end of the spectrum, we hear from, you know, we have a lot of people on our platform that spend a lot of money, right? And these are people that have high intent and that, that are really looking to find a relationship.
And the higher priced tier is going to give them the ability to be much more curated, to be much more targeted in their search for whatever they are looking for. And that's really the focus on the higher priced tier. And equally, I would say, we also hear from people that are not on dating apps anymore, that used to be on dating apps, and are looking for something that is much more high touch, much more curated, right? So the higher tier allows you to not just convert your existing user base, it also allows you to actually get more users into the ecosystem. These are people that, like I said, have used dating apps in the past, but have opted out now because they feel like the experience doesn't work for them, right?
Again, these are people that really want to use it because they have high intent, they also have high income, but they just are looking for something that feels much more exclusive. That's really how we've been thinking about the two tiers. From a higher priced tier perspective, we can talk more about AI today. We are really excited about GenAI, because it allows us to now present a curated, exclusive experience that is not, you know, high touch from a human or a manual perspective. I think as the use cases for GenAI improves over time, I think the value coming from these products is going to be significantly higher as well.
Have you spoken at all about what a price point for a premium, that premium-
We haven't. We are in the process of, obviously, looking at pricing across all our tiers, so more to come. We intend to start testing this by the end of the year, so this is definitely something that you'll hear us talk more about in 2024.
On both the premium and the-
Right.
- lower end.
Yes.
Great. Yeah, we'll look for more color around that. So international expansion, you touched on that. It's a, you know, big growth driver, both. I mean, there, there's two factors in expansion. There's one is expanding to tier two and three cities, that's both domestic and international, but international is still pretty early for you guys, too. So can you talk about that roadmap?
Sure. When we went public two and a half years ago, at this point, I remember, everybody's question was: "Can you guys, you seem to be a very U.S.-centric product. Can you, you know, can your message survive outside the U.S.?" That was, like, you know, the single most question everybody would ask. And, you know, now, with the two and a half years behind us, we can, you know, very clearly tell you that the message of what Bumble is intending to do has very clearly resonated with women in every market, right? And that is a big strength that we see. I would still say that we are in early stages of growth in our international markets, and not every international market is treated the same.
So if you think about different regions, Western Europe, for example, is where we've spent a lot of time over the last 12, 18 months, and a lot of markets in Western Europe, like Germany, the Benelux region, et cetera, are now at a point where the user base is now large, right? And now we're really focused on... But paid penetration is still low. So now we are really focused on how do you drive paid penetration up in these markets, and these are high ARPPU markets, right? These aren't, these are the U.S. is still high, the highest, probably from an ARPPU perspective, but these are all markets that, you know, that rank up there, in terms of, purchasing power, propensity to pay, et cetera, et cetera.
So now we are in the process of driving paid conversion up in these markets, and we know that there is a ton of room around that. There are other markets like India, as an example, which we've had strength in for a while now. Again, big user base focused now on conversion. And then you have other markets like LatAm, where we are still coming up the curve in terms of user base. The teams are really focused on how do you move those markets up the curve. Also, markets in Southern Europe, so we launched in Spain recently. So again, a lot of those markets are also coming up the curve. So the opportunity is vast. Now, I think it's really about us being able to deploy the resources, focus on, you know, getting the job done.
That's, that's what's exciting for us. And equally, our core markets, you know, which if you look at the U.S., the U.K., Canada, the traditionally English-speaking markets, again, are still, you know, a big focus area for us. I think people think of the U.S. as a mature market, but if you think about how big the you know, the U.S. market is overall for singles, the number of people on dating apps today are still very, very low. And so, there is a lot of concentration today on the coastal regions, but as you go outside of New York and L.A. and San Francisco, there are lots of singles in parts of the U.S. that, you know, we haven't really tapped into. So that's where the focus on tier two, tier three, et cetera, comes into play.
You know, there is a dedicated U.S. strategy for growing the user base as well as for paid conversion as well.
Yeah, great. You didn't mention Asia, ex India. That's been a market that's obviously opportunity, but where the, kind of, behavioral and social norms around online dating are also a little bit more challenging. Is that an opportunity for you?
For sure. We actually have a lot of organic growth in many countries in Asia. The advantage of being a freemium app is, even if you don't formally spend money on marketing in a country or don't formally enter a market, in a way, anyone can download an app and start using the app. So we often find pockets of just organic growth in markets where, you know, we'll see downloads start to spike, and then as we start to dig in, we'll find things like, you know, a TikTok influencer found their, you know, boyfriend or girlfriend on the app, and they started talking about it, and suddenly there was, like, a viral effect and, you know, we got a bunch of organic growth.
So we are always keeping an eye on pockets of growth like that, and then we sort of turbocharge it with on-the-ground marketing or growth marketing or whatever the case may be. So Asia is definitely an area of focus for us as well, and many markets that you would consider, you know, traditionally conservative, we see a lot of strength in those markets. And so, you know, we certainly don't think that the Asian markets are not exposed to dating. I think dating apps are becoming a norm in many of those markets, and I think obviously as you know, this becomes more normalized, it's only going to get bigger. So we are definitely excited about that.
Okay. So let's zoom out outside of dating specifically. You talked about that being a really big opportunity. I think in the past you've talked about it being a bigger opportunity than dating. Rolling out BFF as a separate app. So are kind of early reads on that, how that's going, expectations, you know, I don't know, impact to monetization, revenue growth. And then you also acquired Official, which is, I think you said at earnings, pre-revenue-
Mm-hmm.
But also opens you up to a new category. So maybe hit on that as well.
Sure. So, you know, if you go back to what I sort of started with, right? We are in the business of healthy and equitable relationships for all, right? So we are. We always say we are in the relationship business, with dating being where we started, but certainly not where we expect to end. Community and relationships have never been more important than they are today. And if you look at statistics and studies, they tell you how everything from your longevity to mental health improves when people have better community, better relationships, and better friendships, right? So our thesis for going beyond dating is not new. BFF was actually started 2016, if I'm not wrong, and it was really born out of our users telling us that, "Hey, I'm in a relationship.
I don't want to use the dating product, but I want to find friends." And people actually started hacking the core dating app to look for platonic relationships. That's really how BFF was born. It was actually born out of, like, what people told us, and so we built the BFF mode as a separate toggle within the core dating app, and we've spent very little time and effort on it until recently, and we started to see organic users grow. And so that's really where the focus for BFF has come from.
The reason to separate the app really, again, came from our users, because as much as we were seeing organic growth within the BFF mode in the core dating app, we still heard from a lot of users that would say, "Hey, I'm in a committed relationship, and my spouse or my boyfriend doesn't really want me to have a dating app downloaded." And that's understandable, right? There is sometimes, you know, still a mental block associated with, "My girlfriend has, you know, a dating app on her phone." And so we decided that to enable us to remove the friction associated with this, launching BFF as a standalone app was, you know, the sort of most important first step. Where we're really excited about BFF is in taking the concept of friendships and relationships beyond just the one-to-one connection that exists today on the app.
Because if you think about how all of us interact in real life, we are about groups of friends, right? We are about going out with people. And it could be you want to have a fitness group, it could be you're a new mom, and you're looking for other moms to connect with. It could be you've moved to a new city, and you want a bunch of girlfriends to go out to have wine with, or do yoga with, or whatever the case might be. That's really where the use case for BFF really shines. And, you know, we have countless examples of people that have met on BFF that have gone on to become, you know, be part of people's weddings, right?
And it is a really special product, and going back to the brand point, if Bumble from day one did not have the brand resonance that it did, we would never be successful in the BFF space, right? Because people would still look at us as a dating app, and people don't do that. People think of Bumble as a brand that they can interact with, well beyond dating. So we're excited about the opportunity that BFF represents. And to your point about monetization, BFF also allows us to go beyond the traditional subscription model, because we recognize that, you know, the desire to pay from a subscription perspective for friendship may be different than what people pay for dating. And so we are very excited, though, about using advertising, sponsorships, as an additional lever for us to monetize this platform.
Because historically, we've always felt that advertising in its traditional form can sometimes be difficult on a dating platform, because you want to be careful that an ad doesn't sort of interact with the relationship that someone is looking for. But in a friendship space, if you think about the number of eyeballs that exist for advertisers, it's a very lucrative opportunities, and we hear from brands all the time wanting to partner with us, and so we are very excited about sort of testing that. So we are, you know, we will, through the course of this year, be testing that, and again, you'll hear more about that in 2024. Lastly, on Official.
Official is slightly different than BFF in the sense that it is meant to be for people that are already in a relationship, but it's meant to help you strengthen your relationship, right? And so if you think about how people are leaning towards self-help, how people are thinking about how do you keep your relationship better? This isn't about going to therapy once your relationship is struggling. This is about communicating better in an existing relationship, making the relationship fun. And that, you know, extends our the number of people that we go after, because you don't necessarily need to have met on Bumble to be on Official. You could have met anywhere, and we can get you into the funnel on Official, and then it extends the LTV opportunity well beyond after someone meets on the app.
And then equally, you know, unfortunately, not every relationship lasts forever, and if a relationship doesn't last, it also allows us to funnel you back into Bumble. So again, this is, I think, going to become a growing area of interest for people, and we're very excited about what this represents.
Okay, great. Well, I want to see if there's any questions. But first, I don't want to ignore Badoo. So before we get to the audience, gone through some challenges, stabilizing, expecting better growth in the second half. Just talk to us where that is in the opportunity ahead.
Sure. So for those that don't know about Badoo, Badoo is a pretty scaled asset that is very, very popular in many, many countries across the globe. And it has a different audience than Bumble. It caters to people that are of a different demographic, people that are also at a you know, slightly lower income level, people that are often you know, stressed for time. And it has a deep resonance with this community of people, because these people often feel like they don't have a home on you know, an app like Bumble as an example, right? And these are people that are not looking to create the most curated profile or create the best you know, picture, best filter. These are people that are real authentic.
They just want... They have limited time, and they just wanna get the quick, fast, instant connections. And so we are really leaning into Badoo's proposition of making sure that these people have a home, and these people can find a relationship that makes sense to them. And because we have a large user base, we've been able to really lean into that. And the thing that we've really focused on, which is what is really helping Badoo in the recent past, is helping make the app simple for them to use, right? Really cleaning it up, removing a lot of the noise that you know had sort of built up in the app over the last few years. And again, just dumbing it down and making it simple, and that's really resonating, it's really working.
We've seen strength in new users come to the platform. We've seen strength in net adds. You know, we saw positive net adds in Q2, and we expect, you know, in Q3 to see that as well. We're really excited about what Badoo represents, you know, for us. Because again, I think it—there is no other app today that caters to this group of people, and I think it's a real need in the marketplace.
Great. We have a minute left. If there's any questions, we could squeeze them in. If not, I could keep going. All right, so maybe in the last minute, let's just talk about margins. So you're, you know, doing all this stuff, making a lot of investments. You're still expecting margin expansion this year. So just talk to us how you think about, you know, investment versus cost control, and how investors should think about margins kind of going forward, and the opportunity.
Sure. So for this year, as you all know, we've committed to 100 basis points of margin expansion, and, you know, we are very, very committed to that. I think. Our cost structure is not significantly different than the cost structure of our competitors. And so, you know, we've reached a pretty stable point, as a percentage of revenue on things like cost of revenue. As we get bigger, we are seeing leverage in spend in G&A. And sales and marketing is where we've really been leaning on quite heavily over the last few years, 'cause as we talk about our brand being our biggest moat, we wanna make sure we continue to spend on our brand.
But that's also an area where if you look at 2022 versus 2023, you're seeing us really show leverage, and you'll see us continue to do that over the coming years as well. We wanna make sure we continue to invest for the growth that we know we have, but it's also an area that, you know, we are very heavily committed to saving money on. And you've seen that even this year, both in Q1 and Q2, where we've actually come in above our expectations in terms of EBITDA, because we've actually not felt the need to overspend on marketing. And the area that we want to be opportunistic on in spending is in product and technology. Again, you know, we are a, ultimately, a product-driven and tech-driven company, and innovation is going to be what really drives growth for us.
We'll be opportunistic, but again, our commitment to making sure that, you know, EBITDA margins expand hasn't changed.
Okay, great. And within that topic, also, just, real, real quick, time's going up, not down. It's just-
It's, like, blinking red, huh?
Just real quick, I think we should, we're out of time.
Yeah.
But on with the DMA coming online soon, and App Store fees, what's the impact there?
TBD, I think, you know, we are obviously not modeling any upside yet, but to the extent that there is any change there, I think that'll be a pretty big impact on margin. But I think there's a lot that needs to happen between now and March, so we'll see how some of the existing lawsuits go, and we'll go from there.
Okay, great.
Awesome.
Thanks, Anu. Thanks, thanks for being with us. Thanks, everyone.
Thanks.