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GI

Grindr Inc. (GRND)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 revenue grew 25% YoY to $93.94M, with Adjusted EBITDA of $40.69M (43.3% margin) and net income of $27.02M (28.8% margin); diluted EPS was $0.09 .
  • Mix: Direct revenue $80M (+24% YoY) and Indirect (ads) $14M (+26% YoY), supported by Unlimited Weekly, XTRA Weekly merchandising, and new ad formats; MAUs 14.6M (+7% YoY), payers 1.2M (+16% YoY), ARPPU $22.86 (+8% YoY) .
  • Guidance raised: FY25 revenue growth ≥26% and Adjusted EBITDA margin ≥43% (from ≥24% and ≥41% on 3/5/25) — a clear positive revision vs. .
  • Versus S&P Global consensus*: revenue missed ($93.94M actual vs $95.94M est), while EPS was in line/slightly above ($0.09 reported vs ~$0.095 est actual; consensus $0.09) — CFO also guided Q2 EBITDA to look “a lot like Q1” . Values retrieved from S&P Global*.
  • Catalysts: early monetization of “Right Now” (20–25% WAU engagement in launch cities) and ongoing AI-native “A-List” testing; redemption of all outstanding warrants removes non-cash P&L volatility going forward .

What Went Well and What Went Wrong

  • What Went Well

    • Strong growth and profitability: revenue +25% YoY to $93.94M; Adj. EBITDA $40.69M (43.3% margin); NI $27.02M (28.8% margin) .
    • Product and AI execution: “Right Now” expanded (15 new cities) with 20–25% weekly engagement and initial monetization in select markets; CEO: “We’re kicking off 2025 with exceptional Q1 results and strong momentum in product development” .
    • User monetization and ads: Direct revenue +24% YoY to $80M; Indirect (ads) +26% YoY to $14M, aided by native/rewarded formats and partner expansion .

  • What Went Wrong

    • Revenue slightly below S&P Global consensus*: $93.94M actual vs $95.94M estimate*; EPS essentially in line/slightly above (reported $0.09 vs ~$0.09 est*) — minor top-line shortfall despite profitable quarter. Values retrieved from S&P Global*.
    • OpEx pressure: operating expenses (ex-COGS) rose 21% YoY to $44M (primarily compensation/SBC) as headcount increased 13% YoY, partially offset by scale (47% of revenue vs 48% prior year) .
    • Cloud cost headwinds flagged: management noted AI investment will come with elevated cloud costs, implying careful second-half spend to preserve margins .

Financial Results

Q1 YoY comparison

MetricQ1 2024Q1 2025
Revenue ($USD Millions)$75.35 $93.94
Net Income ($USD Millions)$(9.41) $27.02
Diluted EPS ($)$(0.05) $0.09
Adjusted EBITDA ($USD Millions)$31.61 $40.69
Net Income Margin %(12.5)% 28.8%
Adjusted EBITDA Margin %41.9% 43.3%
Cash from Operations ($USD Millions)$20.45 $23.79
Free Cash Flow ($USD Millions)$19.30 $23.17

Sequential trend (last three quarters)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$89.00 $98.00 $93.94
Direct Revenue ($USD Millions)$77.00 $80.00 $80.00
Indirect (Ads) Revenue ($USD Millions)$12.00 $18.00 $14.00
Adjusted EBITDA ($USD Millions)$40.00 $38.62 $40.69
Adjusted EBITDA Margin %45% 39.6% 43.3%

User KPIs (last three quarters)

KPIQ3 2024Q4 2024Q1 2025
Average MAUs (Millions)14.6 14.7 14.6
Average Paying Users (Millions)1.11 1.10 1.20
Paying Penetration %7.6% 7.7% 8%
ARPPU ($)$23.07 $23.46 $22.86

Estimates vs Actuals (Q1 2025)

MetricConsensus*Actual
Revenue ($USD Millions)$95.94*$93.94
Diluted EPS ($)$0.09*$0.09

Values retrieved from S&P Global*.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue Growth %FY 2025≥24% ≥26% Raised
Adjusted EBITDA Margin %FY 2025≥41% ≥43% Raised
EBITDA cadenceQ2 2025 (qualitative)—“Q2 looking a lot like Q1 with respect to EBITDA” Color

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
AI-native initiatives (A-List, Wingman, Discover)Early Wingman testing; 2025 roadmap highlights AI features A-List in testing with subset of Unlimited users; privacy-first architecture via AWS Bedrock; expanding AI feature set Accelerating buildout and testing
“Right Now” intent productTesting in DC; scale planned by end of 2025 Expanded to 15 new cities; 20–25% WAU engagement; initial monetization in select markets contributing to guidance raise Rapid rollout + early monetization
AdvertisingQ3 ads +43% YoY; ad tech upgrades underway Q1 ads $14M (+26% YoY) with native/rewarded formats and more partners Continuing ramp after Q4 spike
MacroNo explicit headwinds prior“We’ve not seen any consumer weakness” among peers’ concerns Stable to resilient
Regulatory/app stores—Apple direct-pay enablement would be additive; not in guidance Optional upside
Gayborhood expansion (Woodwork)Limited beta planned Soft beta launched in two markets; early-stage, not in guidance Early learning phase

Management Commentary

  • CEO framing the year and product cadence: “We’re kicking off 2025 with exceptional Q1 results… raise our full year outlook to 26% or greater revenue growth and at least 43% adjusted EBITDA margin.”
  • On “Right Now”: engagement and monetization drive confidence — “20% to 25% of our users engage with Right Now weekly… we’ve begun monetizing it in select regions.”
  • On AI-native A-List and privacy: “A-List delivers… smarter, best-fit priority connections… leveraging 130B chats annually… privacy remains nonnegotiable… using Amazon’s Bedrock… with user control and guardrails.”
  • CFO on quarter and outlook: “Total revenue grew 25% YoY to $94M… Adjusted EBITDA margin reached 43%… we now expect revenue growth of 26% or greater and an adjusted EBITDA margin of at least 43%.”
  • Capital structure clean-up: “All… outstanding warrants… redeemed… this source of non-cash volatility has been eliminated and will no longer impact GAAP net income going forward.”

Q&A Highlights

  • Guidance raise drivers: several in-flight tests turned positive; early “Right Now” monetization; some late-March FX tailwind; Q2 EBITDA expected to resemble Q1 while monitoring AI cloud costs and discretionary spend in H2 .
  • Apple direct payments: potential to enable direct pay; not embedded in guidance; would be additive if implemented .
  • Competitive defensibility: intent-based roadmap serves gay men’s specific needs (e.g., immediate connections via “Right Now”, relationship features upcoming); strong cultural understanding and engagement metrics .
  • Macro backdrop: management not seeing consumer weakness discussed by peers; user base characterized by higher education and disposable income; Grindr as an “escape” platform .
  • Geographic growth: robust U.S. opportunity and larger long-term international runway (brand awareness ~60% in tested countries); localization and product-led growth to drive adoption .

Estimates Context

  • Q1 2025 vs S&P Global consensus*: revenue $93.94M actual vs $95.94M consensus (miss), diluted EPS $0.09 reported vs $0.09 consensus (in line/slight beat vs SPGI actual ~$0.0953). Values retrieved from S&P Global* and company filings .
  • Implications: Raised FY25 guidance (≥26% revenue growth, ≥43% Adj. EBITDA margin) suggests sell-side models may need higher FY revenue/EBITDA, with near-term drivers including monetizing “Right Now”, ads ramp, and continued payer/ARPPU momentum .

Key Takeaways for Investors

  • Execution remains strong: 25% YoY revenue growth with 43%+ EBITDA margin underscores operating leverage despite elevated AI/cloud investments .
  • Guidance revision is a clear positive: FY25 raised to ≥26% growth and ≥43% margin, backed by test results and early “Right Now” monetization .
  • Product catalysts: “Right Now” (20–25% WAU in launch cities) and AI-native “A-List” broaden monetization surface across free and paid tiers .
  • Ads runway: new formats/partners driving 26% YoY growth in Q1; normalization from Q4 spike but continued ad-tech improvements should support mix and CPMs .
  • Cleaner P&L going forward: warrant redemption removes non-cash EPS volatility; CFO expects positive GAAP EPS going forward .
  • Balance sheet/capital returns: $23.17M FCF in Q1, $256M cash/cash equivalents, and $359M remaining under $500M repurchase authorization support capital allocation flexibility .
  • Watch H2 margins: management flagged potential AI cloud cost uptick and discretionary spend gating; Q2 EBITDA expected similar to Q1 .

Appendix: Additional Detail

  • Free Cash Flow and Cash Metrics (Q1 2025): CFO reported ~$23M FCF; company reconciliation shows Cash from Ops $23.79M, FCF $23.17M; FCF conversion 56.9% .
  • Revenue composition drivers: Unlimited Weekly/XTRA Weekly demand; Recommendations (more quality profiles) boosting conversion; ads benefitting from native/rewarded formats and ad tech optimization .
  • KPIs: MAUs 14.6M (+7% YoY), Average Paying Users 1.2M (+16% YoY), ARPPU $22.86 (+8% YoY), Paying Penetration 8% .

Citations:

  • Q1 2025 8-K and Shareholder Letter:
  • Q1 2025 Earnings Call:
  • Q4 2024:
  • Q3 2024:
  • S&P Global consensus and actuals: Values retrieved from S&P Global*.