Grindr (GRND) - 2024 Q1 - Quarterly Results

Shareholder Letter Grindr's Q1 2024 saw strong revenue growth and Adjusted EBITDA margin, driven by new product development and strategic team expansion CEO's Message and Q1 Overview Grindr reported strong Q1 2024 results with 35% revenue growth and 42% Adjusted EBITDA margin, focusing on new product development and team expansion Q1 2024 Key Performance Highlights | Metric | Value (Millions $) | Growth (YoY) | | :--- | :--- | :--- | | Revenue | $75M | 35% | | Adjusted EBITDA Margin | 42% | N/A | - Strategic priorities for 2024 include developing products focused on user intent, fostering a performance-driven culture, and building a brand narrative around the 'Global Gayborhood in Your Pocket' concept[4] - The company is developing new products, 'Right Now' and 'Roam', and has launched a new cloud-based chat system, its most complex technical project in nearly a decade[5] - Grindr's long-term vision is to become the 'Global Gayborhood in Your Pocket,' a digital hub for the gay community to connect and access resources, mirroring the function of physical gayborhoods[7][8][9] - The company significantly expanded its team, increasing engineering headcount by over 50% quarter-over-quarter in Q1 2024[6] Q1 Business Highlights This section details Grindr's Q1 product innovations, team growth, and brand initiatives, including new features and marketing efforts Innovating with a Focus on User Intent Grindr rolled out a new cloud-based chat system and 'Unlimited Weekly' subscriptions, while advancing 'Right Now' and 'Roam' features - The new cloud-based chat system was fully rolled out globally by the end of Q1, representing the most complex technical launch in nearly a decade It moves chat storage from local devices to the cloud[11] - The 'Unlimited Weekly' subscription was rolled out globally in Q1, providing access to all Unlimited features for a shorter commitment period[12] - The 'Right Now' feature, designed to make finding connections easier and quicker, is currently in testing with a multi-phased launch planned[14] - The 'Roam' feature, targeting the travel use case, is in late-stage development and testing in select markets, with a full global rollout planned for later in the year[15] Building a Performance-Driven Culture Grindr expanded its global team to 129 employees by Q1 2024, focusing on deliberate hiring to support its product roadmap - As of March 31, 2024, Grindr's global team has grown to 129 employees[16] Telling Our Brand Story Grindr launched a successful podcast and travel series, while expanding 'Grindr for Equality' initiatives in New Zealand and Thailand - The company launched a successful new podcast content series, 'WTA,' hosted by Katya Zamolodchikova, featuring celebrities like Orville Peck and Saucy Santana[17][19] - A six-episode travel series is being created to promote the 'Roam' functionality and reinforce the 'Global Gayborhood' vision[20] - Grindr for Equality expanded its at-home HIV testing program to New Zealand and supported the legislative step toward legalizing same-sex marriage in Thailand[21] Q1 Financial & Operating Performance This section details Grindr's strong Q1 financial results, driven by revenue growth, increased profitability, and positive full-year guidance Performance Overview & Key Metrics Grindr's Q1 2024 performance saw 13.7 million MAUs and 1.0 million paying users, driving strong revenue growth and ARPPU increases Q1 2024 Financial & Operating Metrics | Metric | Q1 2024 Value (Millions) | YoY Growth | | :--- | :--- | :--- | | Total Revenue | $75.3M | +35% | | Net Loss | -$9.4M | N/A | | Adjusted EBITDA | $31.6M | +44% | | Average MAUs | 13.7M | +7% | | Average Paying Users | 1.0M | +17% | | ARPPU | $21.25 | +15% | Detailed Financials Grindr's Q1 revenue reached $75 million, with operating income doubling, despite a net loss impacted by warrant liability adjustments Q1 2024 Revenue Breakdown | Revenue Type | Q1 2024 (Millions $) | YoY Growth | | :--- | :--- | :--- | | Direct Revenue | $64M | +34% | | Indirect Revenue | $11M | +43% | | Total Revenue | $75M | +35% | - Operating income for Q1 2024 was $19 million (26% of revenue), compared to $9 million (15% of revenue) in Q1 2023[30] - The Q1 2024 net loss of $9 million included a non-cash loss of $19 million related to the change in fair value of the warrant liability[32] - Adjusted EBITDA for Q1 2024 was $32 million, a 44% increase from Q1 2023, with the margin expanding to 42%[33] 2024 Outlook Grindr reaffirmed its full-year 2024 guidance, projecting at least 23% revenue growth and an Adjusted EBITDA margin of 40% Full-Year 2024 Guidance | Metric | Guidance | | :--- | :--- | | Revenue Growth | At least 23% | | Adjusted EBITDA Margin | At least 40% | Financial Statements Grindr's Q1 2024 financial statements include balance sheets, income statements, cash flows, and Adjusted EBITDA reconciliation Condensed Consolidated Balance Sheets As of March 31, 2024, Grindr reported $437.7 million in total assets and $459.8 million in liabilities, resulting in a $22.0 million stockholders' deficit Key Balance Sheet Items (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $21,548 | $27,606 | | Total Assets | $437,745 | $444,595 | | Long-term debt, net | $300,049 | $325,600 | | Warrant liability | $86,302 | $67,622 | | Total Liabilities | $459,762 | $462,887 | | Total stockholders' deficit | ($22,017) | ($18,292) | Consolidated Statements of Operations Grindr's Q1 2024 revenue grew 35% to $75.3 million, with operating income at $19.3 million, but a net loss of $9.4 million due to warrant liability Q1 Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $75,345 | $55,809 | | Income from operations | $19,256 | $8,591 | | Loss in fair value of warrant liability | ($18,680) | ($15,317) | | Net loss | ($9,406) | ($32,899) | | Net loss per share, Basic & Diluted | ($0.05) | ($0.19) | Condensed Consolidated Statements of Cash Flows Grindr generated $20.4 million in Q1 operating cash flow, with a net decrease of $6.8 million in cash due to financing activities Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2024 | | :--- | :--- | | Net cash provided by operating activities | $20,449 | | Net cash used in investing activities | ($1,148) | | Net cash (used in) financing activities | ($26,146) | | Net decrease in cash | ($6,845) | | Cash, cash equivalents and restricted cash, end of period | $22,153 | Reconciliation of Net Loss to Adjusted EBITDA Grindr reconciled its Q1 2024 net loss of $9.4 million to an Adjusted EBITDA of $31.6 million, achieving a 41.9% margin Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2024 | | :--- | :--- | | Net loss | ($9,406) | | Interest expense, net | $7,185 | | Income tax provision | $2,680 | | Depreciation and amortization | $4,119 | | Stock-based compensation expense | $7,869 | | Change in fair value of warrant liability | $18,680 | | Other adjustments | $450 | | Adjusted EBITDA | $31,577 | Other Information This section details Grindr's upcoming corporate events and standard disclosures for forward-looking statements and non-GAAP financial measures Corporate Events Grindr scheduled a Q1 results conference call for May 9, 2024, and announced its inaugural Investor Day on June 26, 2024 - A conference call to discuss Q1 2024 results was scheduled for May 9, 2024[40] - Grindr will host its first-ever Investor Day on June 26, 2024, in New York City[41] Forward-Looking Statements & Non-GAAP Financial Measures This section outlines forward-looking statement disclaimers and defines non-GAAP financial measures like Adjusted EBITDA, used for core performance evaluation - The report contains forward-looking statements concerning business plans and performance, which are subject to risks such as user retention, regulatory compliance, and competition[50] - Adjusted EBITDA is defined as net income (loss) excluding items such as interest, taxes, depreciation, amortization, stock-based compensation, and changes in the fair value of warrant liability[52] - The company states it cannot reconcile forward-looking Adjusted EBITDA margin guidance to net loss margin without unreasonable effort due to the unpredictability of excluded items like stock price-driven charges[54]