Q2 2024 Earnings Summary
- Grindr is experiencing strong Monthly Active User (MAU) growth of 7% year-to-date without relying on traditional performance marketing, indicating robust organic growth potential. The company expects this growth to continue into the back half of the year.
- The company has a 90%+ brand recognition in the U.S., with significant opportunity for international expansion as brand recognition in select international regions is currently 60%, suggesting a substantial untapped market for user growth and revenue.
- New product features like "Roam", which targets the 27% of weekly active users who are traveling, are expected to drive significant future monetization. If "Roam" achieves one-fourth of the revenue generated by Boost, Grindr's most successful a-la-carte offering, it would be an exceptional outcome, contributing meaningfully to the company's growth in the next 1.5 to 2 years.
- The company's executives indicate that growth from new features and international expansion may take several years to materialize, which could challenge near-term revenue growth. For instance, they acknowledge that increasing international brand awareness "will drive more user growth... over the mid and long-term... that's not going to be accomplished in 1 or 2 years" , and that international efforts are "not something we're counting on and expect a lot of results in this year or next year".
- The company admits to having "not done a very good job in product marketing" historically, meaning previous revenue growth may have been suboptimal. While improvements are underway, there is uncertainty about the timing and effectiveness of these efforts to boost conversion and ARPPU (Average Revenue Per Paying User).
- The key new feature 'Right Now' is focused on user engagement rather than monetization, with the CEO stating "I would not expect significant monetization from Right Now in 2024 or in 2025, frankly. And that's not the objective". This suggests that near-term financial performance may not benefit significantly from this feature.
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MAU Growth Drivers
Q: What is driving strong MAU growth?
A: Grindr's monthly active users have grown 7% year-to-date without relying on traditional performance marketing. This growth is attributed to strong brand awareness in the U.S. (90%) and plans to introduce new features catering to users seeking long-term relationships, which may re-engage past users. The company expects similar MAU growth in the second half of the year. -
Merchandising Conversion
Q: How are merchandising efforts improving conversion and ARPPU?
A: Grindr improved product marketing by making features like Boost more accessible through a prominent button, the "Boost Fab," leading to better conversion rates. They also informed users that paid subscribers don't see ads, which increased conversions. By clearly communicating the benefits of paid tiers, they've enhanced both conversion and average revenue per paying user. -
New Features Monetization
Q: What are early learnings from Right Now and Roam features?
A: The Right Now feature enhances user engagement by facilitating immediate connections, with monetization expected beyond 2025. The Roam feature targets the 27% of weekly active users who travel, aiming to achieve one-fourth of Boost's revenue over the next 1.5 to 2 years. Roam has been released to limited users, with broader availability planned by year-end. -
International Expansion
Q: What drives investment in the Spanish channel and other languages?
A: Recognizing that Spanish is the second most dominant language among its users, especially in growing markets like Latin America, Grindr launched a Spanish social media channel. While expansion to other languages like Portuguese is possible, current efforts focus on mid to long-term international growth through organic, viral user acquisition rather than immediate investment. -
Brand Engagement Efforts
Q: How is Grindr measuring brand efforts like the Rides America tour?
A: The Grindr Rides America tour strengthened user engagement, with high participation at events and significant social media interaction. With brand recognition at 90% in the U.S. and 60% in select international regions, these initiatives aim to maintain top-of-mind awareness and foster positive associations with the brand.