Grindr Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 7, 2025

Key Takeaways

  • Positive Sentiment: Grindr reported 27% year-over-year revenue growth to $104 million in Q2 with a 43% adjusted EBITDA margin, and reaffirmed its full-year 2025 guidance.
  • Positive Sentiment: Average monthly active users grew 6% year-over-year to 14.9 million, with paying users up 16% to 1.2 million and direct revenue per paying user rising 7%.
  • Positive Sentiment: The company launched beta mobile mapping in RightNow and Explore, monetizing the feature faster than expected and laying the groundwork for future local discovery products like events and neighborhood activities.
  • Neutral Sentiment: Indirect advertising revenue climbed 39% year-over-year to $17 million thanks to third-party ad partners and new rewarded-video formats, though direct brand advertising remains under pressure.
  • Neutral Sentiment: CEO outlined its new GAI GenAI strategy with model, architecture, and application layers designed to drive differentiated user experiences and long-term revenue growth.
AI Generated. May Contain Errors.
Earnings Conference Call
Grindr Q2 2025
00:00 / 00:00

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Operator

Good afternoon. My name is Kathleen, and I will be your conference operator today. At this time, I would like to welcome everyone to the Grindr Second Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Operator

Thank you. And I would now like to turn the conference over to Tolu Adiove, Grindr's Head of Investor Relations. Please go ahead.

Tolu Adeofe
Tolu Adeofe
Director - IR at Grindr

Thank you, moderator. Hello, and welcome to the Grindr earnings call for the second quarter twenty twenty five. Today's call will be led by Grindr's CEO, George Arison and CFO, Van de Krant. They will make a few brief remarks and then we'll open it up for questions. Please note, Grindr released its shareholder letter this afternoon and this is available on the SEC's website and Grindr's Investor page at investors.grinder.com.

Tolu Adeofe
Tolu Adeofe
Director - IR at Grindr

Before we begin, I will remind everyone that during this call, we may discuss our outlook, future performance and future prospects. You should not rely on forward looking statements as predictions of future events. These forward looking statements are subject to risks and uncertainties, and our actual results could differ materially from the views expressed today. Some of the risks that could cause our actual results to differ from the views expressed in our forward looking statements have been set forth in our earnings release and our periodic reports filed with the SEC, including our annual report on Form 10 ks for the year ended 12/31/2024. During today's call, we will also present both GAAP and non GAAP financial measures.

Tolu Adeofe
Tolu Adeofe
Director - IR at Grindr

Additional disclosures regarding non GAAP measures, including a reconciliation of these non GAAP financial measures to their most closely comparable GAAP financial measure, are included in the earnings release we issued today, which has been posted on the Investor Relations page of Grindr's website and in Grindr's filings with the SEC. With that, I'll turn it over to George.

George Arison
George Arison
CEO & Executive Director at Grindr

Thanks, Togo, and hi, everyone. Brian has delivered another strong quarter with results that keep us firmly on track for the year. I've said that 2025 is about accelerating execution towards our long term vision, including the launch of transformative products within the app, which expand how our user engage. This quarter is another proof point that we can deliver on our road map while continuing to drive strong financial performance. For years, users have asked for maps within the Grindr app, but technical and privacy constraints made it hard to do well.

George Arison
George Arison
CEO & Executive Director at Grindr

This has changed when we launched beta versions of mobile mapping in both RightNow and Explore. Engaging with RightNow continues to be strong, and we've already begun to monetize the product faster than expected. We're excited to see adoption built as we enable users to move fluidly between the grid and the map views. Explore remains one of our most valuable features, especially for power users and frequent travels with over 25% of our mile using it monthly. We've now launched Explore heat maps, dynamic city level views showing the most active areas across 21 markets.

George Arison
George Arison
CEO & Executive Director at Grindr

Although privacy in mind, events reflect historical, not live activity to help users search smarter online and in real life. Longer term, that sum up a powerful surface for the neighborhood for products around events, local activity, and businesses. If you've been following our shareholder letters, you've seen us articulate a clear ambition to build one of the leading AI native consumer companies when it creates triple shareholder value by using GenAI to deliver high impact user experiences, differentiated value, and long term revenue growth. To that end, we're building a full step foundation called GAI or GAI comprised of three layers. A model layer using a combination of our custom models and leading third party foundation models, an architecture layer where we are applying brand behavioral, conversational, and male imagery data to evaluate, combine, and enhance those models, generating insights and capabilities tailored to a specific context and needs, and an application layer that synthesizes those capabilities into differentiated user experiences.

George Arison
George Arison
CEO & Executive Director at Grindr

The architecture layer is core to our durable advantage. It allows us to run variety of models to produce custom datasets and structured insights, trained AI to understand daylight, cultural norms, and their imagery, established a robust types of framework, and build a world class talent engine at the intersection of product, engineering, and AI. Our goal is to keep shipping features that wouldn't be possible without the stock, like a list, while developing other products that match its level of ambition and value. For more detail, I'd encourage you to read the full ship or letter. We have also posted a short deck on our website to walk you through our approach to AI.

George Arison
George Arison
CEO & Executive Director at Grindr

I want to acknowledge Vienna for her amazing contributions as our CFO over the past three years. We know that we can as Vienna has initiated transition. She's graciously agreed to continue on in her role as we identify a successor. Vienna has been a key player on our team in setting us up to deliver the type of results you're seeing today, and he has been a great partner to myself and the Grindr team. We're all committed to business as usual as we move forward, and we will continue with strong and improving execution.

George Arison
George Arison
CEO & Executive Director at Grindr

As a team, we're moving fast, executing well, and making real progress in the future of Grindr. While continuing to deliver strong results. Thank you all for your continued support. I'm excited about the momentum in the business and what h two has to bring and grateful to the team for their continued hard work. With that, I will turn it over to Vienna to update you on the financial results.

Vandana Mehta-Krantz
Chief Financial Officer at Grindr

Thank you, George. I appreciate the kind words as well as the partnership from you and the entire Grindr team as we work towards a seamless transition. Now let's turn to the results. Grindr delivered another strong quarter. In Q2, total revenue grew 27% year over year to $104,000,000 and the adjusted EBITDA margin was 43% or 45,000,000 right in line with our raised full year guidance we provided last quarter, which we are reaffirming.

Vandana Mehta-Krantz
Chief Financial Officer at Grindr

Direct revenue for the quarter was $87,000,000 up 24% year over year with growth led by the continued strength of our subscription offerings as we further enhanced our recommendations feature and continue to benefit from merchandising and paywall optimizations. Highlighting our key user metrics, average monthly active users in Q2 were 14,900,000 representing 6% growth year over year. Average paying users in the quarter reached 1,200,000, up 16% year over year. And our average direct revenue per paying user increased 7% over the prior year to $23.65 this quarter. Indirect revenue was $17,000,000 up 39% year over year driven by the ramping of our new third party advertising partners and early traction in international markets as we continue to build out our third party advertising platform.

Vandana Mehta-Krantz
Chief Financial Officer at Grindr

Moving to expenses and profitability, operating expense in Q2 excluding $27,000,000 in cost of revenue was $53,000,000 up 43% year over year, primarily driven by stock based compensation. Adjusted EBITDA for the quarter was $45,000,000 or 43% of revenue compared to $37,000,000 or 45% of revenue a year ago. Net income was $17,000,000 for the second quarter, representing 16% of revenue compared to a net loss of $22,000,000 in the same period last year. In Q1, we completed the redemption of all outstanding unexercised warrants, which has eliminated the quarter to quarter valuation impact on GAAP net income. Accordingly, we delivered GAAP EPS in Q2 of $08 and expect to continue to generate positive EPS going forward.

Vandana Mehta-Krantz
Chief Financial Officer at Grindr

Turning to cash flow and the balance sheet. In the second quarter, Grindr generated free cash flow of $37,000,000 and ended the quarter with approximately $121,000,000 in cash and cash equivalents. Our gross leverage was 1.7 times the last twelve months adjusted EBITDA. Year to date, Grindr has repurchased $325,000,000 in common stock and as of today, we have $175,000,000 remaining under the share repurchase program. Based on our performance through the first half of the year, we are reaffirming our full year 2025 outlook of 26% or greater revenue growth and adjusted EBITDA margin of at least 43%. And with that, operator, we'll now take questions.

Operator

Thank you. We will now begin the question and answer you. And your first question comes from the line of John Blackledge of TD Cowen. Your line is now open.

Logan Whalley
VP - Equity Research at TD Cowen

Hi, there. It's Logan on for John. Thanks for the question. First question maybe, MAUs stepped up nicely in the quarter, both sequentially and on a year over year basis. Could you just talk about the biggest drivers of top of funnel, MAU growth in 2Q?

Logan Whalley
VP - Equity Research at TD Cowen

And then looking forward, could you comment on of Grindr's penetration as you see it right now of the overall TAM in The US and and globally at this point? And then I just have one follow-up question as well.

George Arison
George Arison
CEO & Executive Director at Grindr

Hi, Logan. Good to talk to you, and welcome, everybody. On the MAU question, have three things I want to talk about. So bear with me as I go through that. First on kind of how MAU is doing overall.

George Arison
George Arison
CEO & Executive Director at Grindr

Second on third party data. And then thirdly on long term MAU opportunities, which I think we'll get to all the things you're asking about. With regards to MAU right now, you're correct. MAU grew 6% quarter over year over year in Q2. We are very happy with that, and MAU is doing very well this summer as well.

George Arison
George Arison
CEO & Executive Director at Grindr

We have a very, very healthy mild situation with our users. We looked at users by country recently in terms of age, and we saw that we have a very strong presence with the younger cohorts, whether it's 18 to 22 or 23 to 29 cohorts, they're doing really, really well and growing in a very strong way. So the kinds of challenges that people talk about in the space with regards to Gen Z, Grindr does not have, we're doing very well. I think that's probably because we are the place to go to if you wanna figure out what it's like to be gay and what your life is like. We are the gayborhood on your phone for people who don't live in gayborhoods in large cities, and that's what people kinda look forward to.

George Arison
George Arison
CEO & Executive Director at Grindr

So we're really happy with the the mile number as of right now and kinda how it's how it's doing. And I, you know, generally don't expect that to change in the future. Number two topic on MAO is is regarding third party data. You know, I I know that a lot of you have to rely on these data sources for your analysis and I remind you, the analysts and investors. But we also know that in Grindr's case, regularly are incorrect in what they project, frankly, probably more incorrect than correct.

George Arison
George Arison
CEO & Executive Director at Grindr

We've tried to work with them to understand their methodologies to help them correct the methodology, but they don't wanna release what the methodology is, and so it's impossible for us to help them along. We count MAU using unique devices. We think that's the most accurate way to do it after, you know, a lot of work having gone into it to figure out what is the best way because our users do have some tenancies that are unique and unusual. People oftentimes create an account and then shut that account down and then create a new account, And you don't want that to be counted as, you know, two people in a in a given a given quarter. So we go down to the level of to to level of of device.

George Arison
George Arison
CEO & Executive Director at Grindr

And so while I totally appreciate the reliance on third party data, I think the reality is that, you know, our numbers speak for themselves, I think MAU is going very well. And then lastly, with regards to long term, we do think there's a lot of opportunity for what we can do. Grindr's MAU growth historically has never been impacted by things that we do. It's always been kind of organic from the fact that people know us and and come to us. But we think there are a lot of things we can do to help that along.

George Arison
George Arison
CEO & Executive Director at Grindr

And I'll talk about two buckets, one in marketing and one in product. You know, on the marketing side, we believe that presenting ourselves better in different countries in a way that's more appropriate for that country would really help. And by that, I literally mean things like imagery that we show in the app store, the language that we show in the app store, and translations in the app itself would really help, especially in places like Asia and Latin America. And that's something we've not done and are working towards putting resources behind. Additionally, the same brand that Grindr faced in The United States three years ago, which I think we've done a lot of work to correct.

George Arison
George Arison
CEO & Executive Director at Grindr

We need to do similar work in other parts of the world, Latin America in particular, and we're starting that in 2025 and we'll continue into next year as well. And then on the product side, part of the concept behind intentions based product, which we've been talking about for a long time now, is that there are people who might have a Grindr account but not use it as much because Grindr is very general in terms of what its offering is, whereas they want a more specific intention, whether it's a right now intention, whether it's a relationship intention, or whether it's something else like travel. And so as we build out these intention based products right now and, like, relationships, we believe that it's a way to bring users to be more engaged with the app. That mostly applies to users who are older, kind of 40 years in age, who have a Grindr account but not might not be using it very much. On your second question with regards to TAM, we there's two ways to think about TAM.

George Arison
George Arison
CEO & Executive Director at Grindr

You can think of TAM as just number of people that Grindr could bring on board. And obviously, we think there is a ton of growth opportunity there, less so in the developed world, although still a ton, and more so in developing countries like India and Philippines, etcetera, where people are only now starting to to come out and become comfortable with their sexualities. So growth opportunity there with TAM is is huge. But I also think another way to think of TAM is just dollars that we can go after, right, the total amount of revenue we could amass. And our strategy is to both make Grindr the core product really great, but also to build these long term new businesses like Woodwork and the health vertical where we can sell more things to our users and offer them more services.

George Arison
George Arison
CEO & Executive Director at Grindr

And so from that point of view, we think the TAM can expand dramatically since obviously health care alone for our users is a huge opportunity to expand TAM. And then there are other areas like travel that we're going to go after next that add more to the TAM. So we think TAM is big and growing. So that's on your first two questions. Happy to answer the third.

Logan Whalley
VP - Equity Research at TD Cowen

Great. Thanks, George. Yeah. The on the mapping announcement, it's it's exciting. Could you could you just talk more about potential of mapping and and what it could mean for maybe other product initiatives and and use cases outside of of, like, right now or explore looking forward?

George Arison
George Arison
CEO & Executive Director at Grindr

For for for mapping? I just wanna make sure I heard it right. Yeah. So we released, initial letter, we talked about the fact that we released, map features in the app. This is something that users have asked for for for years.

George Arison
George Arison
CEO & Executive Director at Grindr

And, you know, we show obviously, Grindr is very location based, and so immediacy around you is very important. And people were always like, can you actually show us on a map how far somebody is? And so we started to do that both in the explore feature as well as in RightNow. So in RightNow, you can today, in the place where it's out, look at users not just based on when they posted something, but also how close they are to you. And then in the Explore function, we show you heat maps in 21 cities where it's really busy.

George Arison
George Arison
CEO & Executive Director at Grindr

We use historical data, not live data, to protect users' privacy. And that allows us to basically help users understand, hey, these are the areas where usually people are present. And if I wanna search for people or if I wanna figure out where to stay, etcetera, I I can use that data to to do that. So over the long term, we believe mapping can be really helpful in building out what we call local discovery, which is one of our long term neighborhood growth verticals. Things like identifying where to stay, where to eat, what kind of activities might be happening around you to go to.

George Arison
George Arison
CEO & Executive Director at Grindr

That can be used by people locally. Right? Like, if you're in San Francisco and you live in San Francisco, still could use that, or by people who wanna travel to a given city for that. So those are the kinds of things that we envision long term mapping to help with, and and we think it will be very valuable. It was a in the past, historically, it was a complicated technology to enable in the app because of the mobile nature of our app, and and now technology is in a place where we think we can do it really well, and so we're excited to tell.

Logan Whalley
VP - Equity Research at TD Cowen

Great. Thank you.

Operator

Your next question comes from the line of Andrew Boone, Citi Sense. Please go ahead.

Brianna Diaz
Equity Research Associate at JMP Securities LLC

Hi, this is Brianna on for Andrew. Thanks so much for taking my questions. Can you just unpack what drove the acceleration in indirect revenue in the quarter? And then on operating expenses, it stepped up this quarter. Can you walk us through the key drivers behind that increase?

Brianna Diaz
Equity Research Associate at JMP Securities LLC

Is this reflective of ongoing investment in product, marketing or headcount? And how should we think about investments going forward? And then I have one more question to that.

George Arison
George Arison
CEO & Executive Director at Grindr

Sure. I'll I'll take the first question on on indirect revenue, and then I'll, like, hand over to Anna to speak about expenses, and then happy to do your next question as well. So I think if we talk about indirect revenue, worth it to talk about it conceptually since from where we were to where we are. When I joined Grindr in 2022, that was an area that was significantly underinvested in for a very long time and was not getting the attention that we believed it it needed to kind of take advantage of the full opportunity. We would have a very desirable user base, people that are very much trendsetters for the world in general, not just for our community.

George Arison
George Arison
CEO & Executive Director at Grindr

And their income is higher, their education is higher as well overall. And so a ton of opportunity with them both for advertising and we were not really taking any advantage of that at all. The growth that we've seen in advertising over the last three years has been primarily driven by third party advertising. And that part of the business has done exceptionally well. I mean, frankly don't think you could ask for anything more than what they've delivered.

George Arison
George Arison
CEO & Executive Director at Grindr

The growth numbers have been stunning. We've significantly increased the number of ads that we show users because Grindr was showing very few ads to users before while maintaining the CPM where it was in the past, and that's something that we didn't think was possible. We thought that CPM would inevitably go down. That was accomplished in part by adding more third party providers that Grindr was not working with before who could serve ads in our platform. So it's it's been really successful.

George Arison
George Arison
CEO & Executive Director at Grindr

We've also added new formats for the types of ads that we show, for example, rewarded video, which also help us increase the CPM and do well there. And I would expect rewarded video in particular to be a big growth lever in 2025 as we sorry, growth big growth lever in 2026, like as we think about next year and where we will see some additional opportunity. We do not expect to be adding more ads per session that people see. We think we're now in a good place versus where we were before, although we do think that there is more opportunity for better quality ads and more fill rates of the ads internationally since we're not fully at the same level as we are in The United And then lastly, I'd say with the one area where, you know, I've had a lot of learnings and people told me when I joined that this would be a lot harder than I thought it would be. And that has to do with direct advertising.

George Arison
George Arison
CEO & Executive Director at Grindr

So these are ads that we partner with specific brands to do. We have a very good brand business. It's done very well as well and has grown significantly. But the categories of verticals that we've added to the brand business or specific companies that have come on board is much lower than I think any of us had hoped would be the case today. That's not so much on Grindr anymore.

George Arison
George Arison
CEO & Executive Director at Grindr

Like we've done a lot of the work that we needed to do in our product to to bring them to to have them come on board, whether it's, you getting them data that they need or the types of ad formats that they want. But what happened two years ago with Anheuser Busch did set us back in a pretty significant way. People are, you know, brands are worried about advertising. And I think there, we just need to continue to hammer the point that Grindr has a very desirable audience of trend setting, you know, higher income, wealthier men who spend a lot of time on the app and it's a great way to reach them and do as good of a job in kind of pitching our story to them as I think we've done in other places. And we're not going to give up.

George Arison
George Arison
CEO & Executive Director at Grindr

We think that there is still a ton of opportunity in the direct business to grow. So I'm very happy with the indirect business' performance this year and in the past, and we expect them to continue to perform really well. So with that, I'll pass it over to Vanna to talk about expenses.

Vandana Mehta-Krantz
Chief Financial Officer at Grindr

Hi there. So, yes, you are are correct. Our operating expenses are reflecting our investment in our products. As you know, we have a very exhaustive product road map, and we're really excited about everything that we have that we're building for our users. So that is bringing along a little higher cost.

Vandana Mehta-Krantz
Chief Financial Officer at Grindr

We also have some accruals that we put that were put into place in q two. And, additionally, I think last year, what you might have seen is that we back ended some of our expenses. As we are now more mature and we have more predictability in our, overall financial, profile by quarter, I would say that that you're just seeing a more flattish expense base in every quarter, and, the margins are reflecting that at 43%, which is right on where we thought we would be.

Brianna Diaz
Equity Research Associate at JMP Securities LLC

Got it. Thank you. And then just you mentioned in the letter that you're experimenting with pricing in existing tiers and testing subscriptions as you guys add more value. Understood that changes aren't expected to materially impact 2025, but are there any early learnings that you guys can share on the test so far and how you're evaluating these changes? That's it. Thank you.

George Arison
George Arison
CEO & Executive Director at Grindr

So I do wanna reemphasize that none of the pricing changes or experiments that we might do will be material to this year, and so no one should kinda count on those for 2025. And I think that's really important. Most of our focus for the rest of this year as a product team and an engineering team is around driving revenue growth next year. I think it's really important to go into the year with a very clear plan of what you're going to be doing and there's a lot of technical and product work to be done on enabling that. And so one of those pieces has to do with experimenting with pricing.

George Arison
George Arison
CEO & Executive Director at Grindr

Grindr has not raised prices since 2018 for either its extra or unlimited offerings, which today are $19.99 and $39.99 If you just look at inflation from that period of time to I mean from 2018 to today, that would push our extra price to something like $25.5 and our unlimited price to $49 In no ways am I suggesting that that's the levels we're going to reach at right away or right now. So please don't assume that. But that would imply that there is a lot of room just purely on inflation for us to increase prices. And when you couple that with the fact that we've added a ton of new products over the last four years and add a lot of value to the premium tiers, we think there is some level of opportunity there. And when I say we've added new products, like we've added a ton of free products or freemium products to the experience, like, right now.

George Arison
George Arison
CEO & Executive Director at Grindr

But then you get a lot more of right now if you're a paying paying user. We've added albums, are available to everybody, but then you get more album capabilities if you are a paying customer. Then obviously, in addition to that, there are specific products that are just for premium users, such as A List, which is only available to unlimited users and as of right now to a portion of unlimited users. So, you know, when we released our three year plan, we talked about the fact that there are two ways we could go about reaching our long term goals. You know, either one of them could get us there, but obviously, we wanted to do both.

George Arison
George Arison
CEO & Executive Director at Grindr

Number one was to get more users to pay for Grindr. And number two was to get people who do pay for Grindr to pay more for all the value added services and products that they are getting from us. And so I think we've done very well with getting more users to pay, we'll continue to do that, obviously. And now there's an opportunity for us to start looking at getting revenue from all the value that we created for users. So far, I don't have any learnings to talk about because we've not done that.

George Arison
George Arison
CEO & Executive Director at Grindr

This was mostly a kind of message to everybody that we will start doing that. And so as you see prices change, don't assume anything on that. This is experimentation and a test run learning process that we're gonna go through over the next, many months as we decide what the right place to be on price is. Operator?

Operator

And there are no further questions at this time. Ladies and gentlemen, that concludes today's call. Thank you everyone for joining. You may now

Executives
Analysts
    • Vandana Mehta-Krantz
      Chief Financial Officer at Grindr
    • Logan Whalley
      VP - Equity Research at TD Cowen
    • Brianna Diaz
      Equity Research Associate at JMP Securities LLC
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