Grindr (GRND) - 2023 Q4 - Annual Results

Financial Highlights & Business Outlook Grindr achieved $260 million revenue (33% YoY growth) and 42% Adjusted EBITDA margin in 2023, projecting 23%+ revenue growth and 40%+ Adjusted EBITDA margin for 2024 Full Year 2023 Financial Results | Metric | Value | | :--- | :--- | | Revenue | $260 Million | | Revenue Growth (YoY) | 33% | | Operating Income | $55 Million | | Net Loss Margin | 21% | | Adjusted EBITDA Margin | 42% | - Revenue from paying users increased by 38% in 2023, and users sent over 121 billion chats throughout the year[2] - The company provides guidance for 2024, expecting revenue growth of 23% or greater and an Adjusted EBITDA margin of 40% or more[2] Management Commentary CEO George Arison emphasized Grindr's strong performance, exceeding guidance in its first public year, driven by the 'Weeklies' product and high user engagement, with momentum continuing into 2024 - The company's financial results for its first full year as a public company came in well ahead of guidance[3] - Growth in paying users was supported by the launch of 'Weeklies,' a popular weekly subscription product[3] - User engagement remains high, with users spending approximately one hour per day on the platform[3] Non-GAAP Financial Measures Grindr utilizes Adjusted EBITDA and Adjusted EBITDA margin to assess core operating performance, excluding non-cash and non-recurring items, and cannot provide forward-looking GAAP reconciliation due to item unpredictability - Adjusted EBITDA is defined as net (loss) income excluding items like interest expense, taxes, depreciation & amortization, stock-based compensation, severance, transaction costs, and changes in fair value of warrant liability[11] - Management uses Adjusted EBITDA internally to evaluate business performance, create budgets, and determine compensation[11] - The company cannot reconcile its forward-looking Adjusted EBITDA margin guidance to the corresponding GAAP measure (net income margin) without unreasonable effort due to the volatility of excluded items like stock-based compensation and warrant liability value[12] Reconciliation of Net (Loss) Income to Adjusted EBITDA In 2023, Grindr's net loss of $55.8 million reconciled to an Adjusted EBITDA of $110.2 million, yielding a 42.4% Adjusted EBITDA margin, compared to 43.7% in 2022 Reconciliation of Net (Loss) Income to Adjusted EBITDA (in thousands) | Line Item | 2023 | 2022 | | :--- | :--- | :--- | | Net (loss) income | $ (55,768) | $ 852 | | Interest expense, net | $ 46,007 | $ 31,538 | | Income tax provision (benefit) | $ 4,023 | $ (859) | | Depreciation and amortization | $ 27,041 | $ 37,505 | | Transaction-related costs | $ — | $ 6,499 | | Litigation related costs | $ 2,339 | $ 1,722 | | Stock-based compensation expense | $ 15,824 | $ 28,586 | | Severance expenses | $ 9,355 | $ — | | Loss on extinguishment of debt | $ 11,582 | $ — | | Loss (gain) in fair value of warrant liability | $ 49,689 | $ (21,295) | | Adjusted EBITDA | $ 110,158 | $ 85,192 | Margin Comparison (2023 vs. 2022) | Margin | 2023 | 2022 | | :--- | :--- | :--- | | Net (loss) income margin | (21.5)% | 0.4% | | Adjusted EBITDA Margin | 42.4% | 43.7% | Forward-Looking Statements & Risk Factors The report includes forward-looking statements and financial guidance, subject to risks like user retention, regulatory compliance, cybersecurity, competition, and macroeconomic conditions, which could materially impact future performance - The company's forward-looking statements, including guidance on revenue and Adjusted EBITDA, are subject to known and unknown risks that may cause actual results to differ materially[6] - Key operational and strategic risks include: - Ability to retain existing users and add new ones - Compliance with privacy, data protection, and user safety laws - Protection against cyber-attacks and unauthorized data access - Competition in the dating and social networking industry - Dependence on third-party systems and infrastructure - Effects of macroeconomic and geopolitical events[9] Company Profile Grindr, launched in 2009 and headquartered in West Hollywood, is a leading LGBTQ social network with over 13 million monthly active users globally, facilitating connection and self-expression - Grindr has more than 13 million monthly active users globally[15] - The company was launched in 2009 and is headquartered in West Hollywood, California[15]