Grindr Inc. Q3 FY2025 earnings call

• Revenue was up 30% year-over-year with an adjusted EBITDA margin of 47%.
• Increased full year 2025 adjusted EBITDA outlook to $191 million to $193 million with a margin >43% and reaffirmed revenue growth of 26% or greater.
• Product expansion with Gen AI features like chat summary, discovery, and profile recommendations. Tested subscription price changes with de minimis impact on paying user base.
• Launched a new AI-powered premium tier for power users starting late 2026.
• Strong user KPIs with 1.3 million paying users, 8.6% penetration rate, $15.1 million average MAU, and $24.70 ARPU.
• Focus on user demographics, noting younger users (18-29) are a majority and drive engagement, while older users drive monetization.

Total revenue for the third quarter was up 30% year-over-year to $116 million. Adjusted EBITDA was $55 million, up 37% year-over-year with a margin of 47%. Direct revenue grew 25% year-over-year, while indirect revenue was up 56%. The ads business was a primary driver of outperformance. In the core app, revenue growth was driven by the unlimited tier and weeklies product across subscription tiers. Paying users averaged 1.3 million in the quarter with a penetration rate of 8.6%. Average MAU totaled $15.1 million and ARPU was $24.70. Revenue contribution from different segments included growth in direct and indirect revenue, with ads and subscription tiers both playing roles.

• Full year 2025 adjusted EBITDA expected to be between $191 million and $193 million, implying a margin >43%.
• Reaffirmed revenue growth outlook of 26% or greater.
• Q3 results reinforce confidence in the outlook, with Q3 revenue growth driven by ads business, but noting Q4 ads growth not expected to repeat due to one-time campaign in 2024 Q4.

• Risks associated with forward-looking statements, including potential differences from actual results due to market uncertainties, competition, and execution of product initiatives. Also, potential impacts from bad actors and their removal affecting user metrics.

Q: Follow-up on user base breakdown and initiatives for age groups.

A: George Arison discussed younger users responding to older users' messages but not initiating, and plans to use product features to facilitate communication. Also mentioned older users' changing priorities and how AI insights can help, with Grindr being 18-plus only.