Grindr Inc. Reports Strong Growth and Positive Outlook

Grindr Inc. ((GRND)) has held its Q1 earnings call. Read on for the main highlights of the call.

Grindr Inc. Reports Strong Growth and Positive Outlook in Latest Earnings Call

The recent earnings call from Grindr Inc. painted a picture of robust revenue and user growth, alongside successful product launches. The company expressed a positive outlook for future AI integration and the Woodwork health initiative. Despite an increase in operating expenses, these were outweighed by the positive financial and strategic developments, signaling a strong performance overall.

Revenue and EBITDA Growth

Grindr Inc. reported a significant 25% year-over-year increase in total revenue, reaching $94 million. The adjusted EBITDA margin also showed impressive growth, reaching 43%, which translates to $41 million. Direct revenue saw a 24% increase, while indirect revenue grew by 26% compared to the previous year.

User Metrics and Engagement

The company saw a 7% rise in average monthly active users, totaling 14.6 million. Paying users increased by 16%, bringing the paid penetration rate to 8% for the quarter. Additionally, the average direct revenue per paying user rose by 8% to $22.86.

RightNow Feature Expansion

The RightNow feature has been successfully rolled out to 17 major cities, with 20 to 25% of users engaging weekly. Grindr Inc. expects this engagement to expand to nearly 50% of weekly active users in the coming weeks.

AI-Native Product Developments

Grindr Inc. announced the development of a suite of AI-native products, including “A List,” which is currently being tested with a quarter of unlimited users. The company aims to establish itself as a leader in AI-native consumer apps.

Woodwork Health Initiative

The company launched a soft beta of Woodwork, a men’s health subscription service designed for gay people, in partnership with the telehealth provider Open Loop. This initiative marks Grindr Inc.’s strategic expansion into healthcare.

Cash Flow and Stock Repurchase

Grindr Inc. generated over $23 million in free cash flow and ended the quarter with approximately $256 million in cash. The company also repurchased $141 million in common stock, with $359 million remaining under the repurchase program.

Increased Guidance

Grindr Inc. raised its full-year guidance, projecting revenue growth of 26% or more and an adjusted EBITDA margin of at least 43%. This optimistic outlook is driven by the ongoing tests and early monetization of the RightNow feature.

Operating Expenses Increase

Operating expenses, excluding $25 million in cost of revenue, rose by 21% year over year to $44 million. This increase was primarily due to compensation-related expenses.

Forward-Looking Guidance

During the earnings call, Grindr Inc. provided updated guidance, projecting full-year revenue growth of 26% or more and an adjusted EBITDA margin of at least 43%. The company highlighted the monetization of the RightNow feature and the introduction of an AI-native product suite as key drivers of this growth. Despite macroeconomic uncertainties, Grindr Inc. reported a net income of $27 million, a significant improvement from a net loss of $9 million in the same period last year.

In conclusion, Grindr Inc.’s earnings call reflected a strong performance with significant revenue and user growth, successful product launches, and a positive outlook for future developments. The company’s strategic initiatives, such as the expansion of the RightNow feature and the launch of the Woodwork health service, position it well for continued success despite increased operating expenses.