Grindr (GRND) - 2025 Q2 - Quarterly Results

Executive Summary & Q2 2025 Financial Highlights Grindr Inc. presents its Q2 2025 financial results, highlighting strong performance and strategic focus on product innovation and AI roadmaps Q2 2025 Performance Overview Grindr Inc. reported strong financial results for the second quarter of 2025, demonstrating significant revenue growth and healthy profit margins, which keeps the company on track to achieve its 2025 outlook Q2 2025 Key Financial Highlights | Metric | Value ($ Million) | | :-------------------- | :---------- | | Revenue | $104 Million | | Revenue Growth (YoY) | 27% | | Net Income | $17 Million | | Net Income Margin | 16% | | Adjusted EBITDA | $45 Million | | Adjusted EBITDA Margin | 43% | CEO Commentary & Strategic Focus CEO George Arison highlighted the company's strong quarterly performance, emphasizing continued execution on product innovation and AI roadmaps. He underscored Grindr's unique assets and capabilities positioning it to build a leading AI-native consumer platform, aiming to maintain competitive advantage and long-term shareholder value - Grindr is firmly on track to achieve its 2025 outlook, delivering on performance objectives[1] - The company is executing at a high level on product innovation and AI roadmaps[1] - Grindr aims to build a leading AI-native consumer platform to maintain competitive advantage and long-term shareholder value[1] Earnings Webcast Information Details regarding Grindr's Q2 2025 earnings webcast and its availability for replay are provided Webcast Details Grindr hosted a live webcast on August 7, 2025, to discuss its second quarter 2025 financial results. An archived version of the conference call is also available on the company's Investor Relations website - Grindr hosted a live webcast on Thursday, August 7, 2025, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss Q2 2025 financial results[2] - The webcast and its archived version are accessible on Grindr's Investor Relations website: **https://investors.grindr.com/**[2](index=2&type=chunk) Forward-Looking Statements & Risk Factors This section outlines cautionary forward-looking statements and enumerates key risks that could materially impact future financial results Disclaimer This section serves as a cautionary note, indicating that the press release contains forward-looking statements about future events and financial performance. These statements are subject to numerous known and unknown risks, uncertainties, and changes in circumstances that could cause actual results to differ materially from expectations. Investors are advised not to place undue reliance on these statements, and the company disclaims any obligation to update them - Forward-looking statements relate to expectations, beliefs, projections, future plans, and strategies, and are not historical facts[3] - Actual results may differ materially due to numerous known and unknown risks, uncertainties, assumptions, and changes in circumstances[4] - The company is under no obligation to update or revise forward-looking statements, and investors should not unduly rely on them[6][8] Key Risk Factors Grindr identifies a range of factors that could significantly impact its future results, including challenges related to user retention, regulatory compliance, data security, strategic growth initiatives, personnel management, market competition, technological adaptation, and broader macroeconomic conditions - Key risk factors include[7] - Ability to retain existing users and add new users[7] - Impact of regulatory environment and compliance complexities (privacy, data protection, online safety)[7] - Ability to address privacy concerns and protect systems from cyber-attacks[7] - Success in identifying and consummating strategic transactions (partnerships, acquisitions, investments)[7] - Ability to retain or recruit key personnel and manage changes in roles[7] - Response to general economic conditions and competition in the dating and social networking industry[7] - Ability to adapt to changes in technology and user preferences, including successful adoption of generative AI and ML[7] - Dependence on the integrity of third-party systems and infrastructure[7] - Ability to protect intellectual property rights[7] - Concentration of stock ownership and voting power limiting stockholders' influence[7] - Timing, price, and quantity of share repurchases and ability to fund them[7] - Effects of macroeconomic and geopolitical events[7] Non-GAAP Financial Measures This section defines and reconciles non-GAAP financial measures, Adjusted EBITDA and Free Cash Flow, used to assess core operating performance and liquidity Adjusted EBITDA and Adjusted EBITDA Margin Grindr utilizes Adjusted EBITDA and Adjusted EBITDA Margin as non-GAAP financial measures to assess its core operating performance, excluding certain non-cash or non-recurring items. These metrics are crucial for internal evaluation and management compensation, providing a supplemental view to GAAP results Definition and Purpose Adjusted EBITDA is defined as net income (loss) adjusted for income tax, interest, depreciation, amortization, stock-based compensation, changes in fair value of warrant liability, severance, and litigation-related costs not indicative of core operations. This measure is used internally by management to evaluate business performance and for employee compensation, as it excludes non-cash and non-normal operating results - Adjusted EBITDA is a non-GAAP measure used to understand and evaluate core operating performance[9] - It is defined as net income (loss) excluding income tax, interest, depreciation, amortization, stock-based compensation, gain/loss in fair value of warrant liability, severance expense, litigation-related costs, and other non-core items[10] - Management uses Adjusted EBITDA internally to evaluate business performance and for employee compensation, as it excludes non-cash and non-normal operating results[11] Reconciliation Table The reconciliation table illustrates the adjustments made from net income (loss) to Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024. It shows a significant improvement from net losses to net income in 2025, while Adjusted EBITDA margins remained relatively stable Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | ($ in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $16,638 | $(22,424) | $43,657 | $(31,830) | | Interest expense, net | 3,564 | 6,669 | 7,439 | 13,854 | | Income tax provision | 4,654 | 4,965 | 9,205 | 7,645 | | Depreciation and amortization | 3,068 | 4,235 | 6,545 | 8,354 | | Litigation-related costs | 754 | 661 | 980 | 1,083 | | Stock-based compensation expense | 16,529 | 7,721 | 27,476 | 15,590 | | Severance expense | — | — | 499 | 58 | | Change in fair value of warrant liability | — | 35,118 | (9,905) | 53,798 | | Adjusted EBITDA | $45,207 | $36,945 | $85,896 | $68,552 | | Revenue | $104,220 | $82,345 | $198,158 | $157,690 | | Net income (loss) margin | 16.0 % | (27.2)% | 22.0 % | (20.2)% | | Adjusted EBITDA Margin | 43.4 % | 44.9 % | 43.3 % | 43.5 % | Free Cash Flow and Free Cash Flow Conversion Free cash flow and free cash flow conversion are non-GAAP liquidity indicators that provide insights into the cash generated from operations after capital expenditures, available for debt repayment or strategic initiatives. These measures help management and investors understand the company's financial flexibility Definition and Purpose Free cash flow is defined as net cash provided by operating activities less capitalized software development costs and purchases of property and equipment. It serves as a liquidity indicator, informing management and investors about cash available for debt obligations and strategic initiatives. Free cash flow conversion is calculated by dividing free cash flow by Adjusted EBITDA - Free cash flow is an indicator of liquidity, showing cash generated from operations after capitalized software development costs and purchases of property and equipment[14] - It is used to repay debt obligations and/or for strategic initiatives[14] - Free cash flow conversion is calculated by dividing free cash flow by Adjusted EBITDA for the same period[14] Reconciliation Table The reconciliation table demonstrates a significant increase in free cash flow and free cash flow conversion for both the three and six months ended June 30, 2025, compared to the prior year, indicating improved operational cash generation and liquidity Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (in thousands) | ($ in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $37,518 | $15,850 | $61,311 | $36,299 | | Less: Capitalized development software costs and purchases of property and equipment | (880) | (1,696) | (1,508) | (2,844) | | Free cash flow | $36,638 | $14,154 | $59,803 | $33,455 | | Operating cash flow conversion | 225.5 % | (70.7)% | 140.4 % | (114.0)% | | Free cash flow conversion | 81.0 % | 38.3 % | 69.6 % | 48.8 % | Company Information This section provides information on Grindr's trademarks and an overview of the company's mission and global community impact Trademarks This section clarifies that the press release may contain Grindr's trademarks, and the omission of ® or ™ symbols does not imply a waiver of the company's full legal rights to these trademarks - The press release may contain Grindr trademarks, and the absence of ® or ™ symbols does not indicate a waiver of Grindr's rights to these trademarks[17] About Grindr Inc. Grindr Inc. is a leading global social networking app for the LGBTQ+ community, serving over 14.5 million average monthly active users across 190+ countries. The company is committed to fostering a world where its global community is free, equal, and just, actively advancing human rights, health, and safety through its 'Grindr for Equality' initiative - Grindr has over 14.5 million average monthly active users and is available in 190+ countries and territories[18] - Its mission is to create a world where the lives of its global community are free, equal, and just[18] - Since 2015, 'Grindr for Equality' has advanced human rights, health, and safety for millions of LGBTQ+ people globally[18]