Grindr Inc. Reports First Quarter 2024 Revenue Growth of 35%

Rhea-AI Summary

Grindr Inc. (NYSE: GRND) reported a 35% revenue growth in the first quarter of 2024, with $75 million in revenue, $19 million in operating income, a net loss margin of 12.5%, and an adjusted EBITDA margin of 41.9%. The CEO, George Arison, highlighted the excellent results, strategic priorities progress, and new product development. The company is optimistic about future opportunities to build the 'Global Gayborhood in Your Pocket'.

Positive

• 35% revenue growth in the first quarter of 2024

• $75 million revenue and $19 million operating income

• Strong margins with a net loss margin of 12.5% and adjusted EBITDA margin of 41.9%

• Excellent results across the business with progress on strategic priorities

• New product development in line with user intent

• Optimistic outlook for future opportunities

Negative

• None.

Insights

Financial Analyst

Grindr Inc.'s reported revenue growth of 35% is a robust indicator of the company's expanding market presence, demonstrating an effective monetization strategy in the LGBTQ+ niche. With an operating income of $19 million, the firm exhibits strong profitability relative to its revenue, suggesting efficient operational management. However, it's important to note the net loss margin of 12.5%, which although not uncommon in growth-focused companies, warrants consideration of how it might affect future profitability and cash flows. This could be due to heavy investments in product development, marketing, or other growth strategies that may pay off in the long term. The Adjusted EBITDA Margin of 41.9% is impressive, indicating that the company has substantial earnings before interest, taxes, depreciation and amortization, which gives it a cushion to cover these expenses and potentially invest in future development. As a retail investor, examining these margins in conjunction with the company's strategic milestones, such as the development of two new products, offers insight into whether the current growth can be sustained. The focus on strategic priorities and product innovations might be a driving force for increased user engagement and additional revenue streams.

Market Research Analyst

Focusing on the company's position within the LGBTQ+ social networking sector, Grindr Inc.'s reported revenue spike is a strong signal to investors about its competitive edge and appeal amongst its target demographic. The concept of a 'Global Gayborhood in Your Pocket' not only encapsulates the essence of community within the LGBTQ+ user base but also demonstrates Grindr's ambition to be more than just a social platform. With continuous product innovation at the forefront, such as the two new products in development, Grindr appears committed to maintaining and expanding its user base, which is critical for long-term success in the tech sector. The potential for these products to disrupt the market or add significant value to the existing user experience could be substantial, possibly leading to further increases in engagement and monetization. From an investor's perspective, it is vital to track user acquisition costs and retention rates alongside innovative developments, as these are key metrics for social platforms that can significantly influence a company's market value and growth prospects.

Technology Analyst

Grindr Inc.'s emphasis on product development, particularly the two new products in the works, reflects a strategic investment in technology that aligns with user intent. This user-centric approach can be a differentiator in the crowded social networking space, where the ability to innovate effectively correlates with user retention and growth. By leveraging technology to further niche-specific functionalities that resonate with the LGBTQ+ community, Grindr may strengthen its position as a specialized connector, potentially translating into sustained revenue growth and market share expansion. Additionally, the focus on a long-term vision to build the 'Global Gayborhood in Your Pocket' portrays a synergy between technological investment and community building, an aspect that could lead to significant network effects and drive user loyalty over time. For investors, this suggests that Grindr's technology strategy is intertwined with its business model, which could lead to advantageous competitive positioning if executed successfully.

First Quarter 2024 Revenue $75 Million, Operating Income of $19 Million

Net Loss Margin of 12.5% and Adjusted EBITDA Margin of 41.9%

LOS ANGELES--(BUSINESS WIRE)-- Grindr Inc. (NYSE: GRND), the premiere LGBTQ+ social connector, today posted its financial results for the first fiscal quarter ended March 31, 2024 in a Letter to Shareholders. The Letter to Shareholders can be accessed on Grindr’s Investor Relations website.

“Grindr is off to an outstanding start to 2024, highlighted by revenue growth of 35% year-over-year and strong margins in our first quarter,” said George Arison, Grindr’s Chief Executive Officer. “Results were excellent across the business. We’re making good progress on our strategic priorities for the year, highlighted by our product roadmap with two new products in development built with user intent in mind. We are excited about the opportunities ahead in 2024 and beyond as we execute on our long-term vision to build the ‘Global Gayborhood in Your Pocket’.”

Earnings Webcast Information

Grindr will host a live webcast today at 2:00 p.m. Pacific Time to discuss the Company’s first quarter 2024 financial results. The webcast of the conference call can be accessed as follows:

Event: Grindr First Quarter 2024 Earnings Conference Call

Date: Thursday, May 9, 2024

Time: 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time)

Live Webcast Site: https://investors.grindr.com/

An archived webcast of the conference call will also be accessible on Grindr’s Investor Relations page, https://investors.grindr.com.

Forward Looking Statements

This press release contains statements that may constitute as forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. These forward-looking statements include statements regarding our intentions, beliefs, current expectations or projections concerning, among other things, results of operations, financial condition, liquidity, prospects, growth, strategies and the markets in which we operate. In some cases, you can identify these forward-looking statements by the use of terminology such as “anticipates,” “approximately,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “outlook,” “plans,” “potential,” “predicts,” “seeks,” “should,” “upcoming,” “will” or the negative version of these words or other comparable words or phrases.

The forward-looking statements, including statements regarding strategic priorities, product roadmap, new products and long term vision, reflect our current views about our business and future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause actual results to differ materially from those expressed in any forward-looking statement. There are no guarantees that any transactions or events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth in or contemplated by the forward-looking statements:

• our ability to retain existing users and add new users;

• the impact of the regulatory environment and complexities with compliance related to such environment, including maintaining compliance with privacy, data protection, and user safety laws and regulations;

• our ability to address privacy concerns and protect systems and infrastructure from cyber-attacks and prevent unauthorized data access;

• our success in retaining or recruiting our directors, officers, key employees, or other key personnel, and our success in managing any changes in such roles;

• our ability to respond to general economic conditions;

• competition in the dating and social networking products and services industry;

• our ability to adapt to changes in technology and user preferences in a timely and cost-effective manner;

• our dependence on the integrity of third-party systems and infrastructure;

• our ability to protect our intellectual property rights from unauthorized use by third parties;

• whether the concentration of our stock ownership and voting power limits our stockholders’ ability to influence corporate matters; and

• the effects of macroeconomic and geopolitical events on our business, such as health epidemics, pandemics, natural disasters, and wars or other regional conflicts.

In addition, statements that “Grindr believes” or “we believe” and similar statements reflect our beliefs and opinions on the relevant subjects as of the date of any such statement. These statements are based upon information available to us as of the date they are made, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and such statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. Except to the extent required by applicable law, we are under no obligation (and expressly disclaim any such obligation) to update or revise our forward-looking statements whether as a result of new information, future events, or otherwise. For a further discussion of these and other factors that could cause our future results, performance, or transactions to differ significantly from those expressed in any forward-looking statement, please see the section titled “Risk Factors.” in annual reports on Form 10-K and quarterly reports on Form 10-Q that we file with the Securities and Exchange Commission from time to time. You should not place undue reliance on any forward-looking statements, which are based only on information currently available to us (or to third parties making the forward-looking statements).

Non-GAAP Financial Measures

We use Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP measures, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may differ from similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Adjusted EBITDA adjusts for the impact of items that we do not consider indicative of the operational performance of our business. We define Adjusted EBITDA as net income (loss) excluding income tax provision; interest expense, net; depreciation and amortization; stock-based compensation expense; transaction-related costs; gain (loss) in fair value of warrant liability; and severance expense, litigation-related costs, and other items, in each case that are unrelated to our core ongoing business operations. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA for a period by revenue for the same period.

Our management uses this measure internally to evaluate the performance of our business and this measure is one of the primary metrics by which management and other employees are compensated. We exclude the above items as some are non-cash in nature and others may not be representative of normal operating results. While we believe that Adjusted EBITDA and Adjusted EBITDA Margin are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for the related financial information prepared and presented in accordance with GAAP.

A reconciliation of net loss and net loss margin to Adjusted EBITDA and Adjusted EBITDA margin for the three months ended March 31, 2024 and 2023 are presented below. We are not able to estimate net income (loss) or net income (loss) margin on a forward-looking basis or reconcile the guidance provided for Adjusted EBITDA margin to net income (loss) margin on a forward-looking basis without unreasonable efforts due to the variability and complexity with respect to the charges excluded from Adjusted EBITDA margin. In particular, the measures and effects of our stock-based compensation related to equity grants and the gain (loss) on changes in fair value of our warrant liability that, in each case, are directly impacted by unpredictable fluctuations in our share price. The variability of the above charges could have a significant and potentially unpredictable impact on our future GAAP financial results.

	Three Months Ended March 31,
($ in thousands)		2024				2023
Reconciliation of net loss to Adjusted EBITDA
Net loss	$	(9,406	)		$	(32,899	)
Interest expense, net		7,185				10,793
Income tax provision		2,680				15,503
Depreciation and amortization		4,119				7,952
Litigation-related costs (1)		422				1,211
Stock-based compensation expense		7,869				3,341
Severance expense (2)		58				676
Change in fair value of warrant liability (3)		18,680				15,317
Others (4)		—				105
Adjusted EBITDA	$	31,607			$	21,999
Revenue	$	75,345			$	55,809
Net loss margin		(12.5	)%			(58.9	)%
Adjusted EBITDA Margin		41.9	%			39.4	%

(1) Litigation-related costs primarily represent external legal fees associated with the outstanding litigation or regulatory matters, including fees incurred in connection with the potential Norwegian Data Protection Authority fine and employee unionization.

(2) Severance expense relates to severance incurred for employees who elected not to relocate or participate in our hybrid working model involving a multi-phase return-to-office plan and other severance arrangements.

(3) Change in fair value of warrant liability relates to our warrants that were remeasured as of March 31, 2024 due to the increase in our public warrant price since December 31, 2023.

(4) Other represents other costs that are unrelated to our core ongoing business operations.

About Grindr Inc.

With more than 13.5 million monthly active users, Grindr has grown to become the Global Gayborhood in Your Pocket, on a mission to make a world where the lives of our global community are free, equal, and just. Available in 190 countries and territories, Grindr is often the primary way for its users to connect, express themselves, and discover the world around them. Since 2015 Grindr for Equality has advanced human rights, health, and safety for millions of LGBTQ+ people in partnership with organizations in every region of the world. Grindr has offices in West Hollywood, the Bay Area, Chicago, and New York. The Grindr app is available on the App Store and Google Play.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240509618602/en/

Investors:

IR@grindr.com



Media:

Press@grindr.com

Source: Grindr Inc.

FAQ

What was Grindr Inc.'s revenue growth in the first quarter of 2024?

Grindr Inc. reported a 35% revenue growth in the first quarter of 2024.

What were Grindr Inc.'s first quarter 2024 revenue and operating income figures?

Grindr Inc. reported $75 million in revenue and $19 million in operating income for the first quarter of 2024.

Who is the CEO of Grindr Inc.?

George Arison is the CEO of Grindr Inc.

What new products are in development at Grindr Inc.?

Grindr Inc. has two new products in development built with user intent in mind.

Where can the Letter to Shareholders and webcast information be accessed?

The Letter to Shareholders can be accessed on Grindr's Investor Relations website, and the webcast information is available on the investors.grindr.com site.