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Grindr Inc. (GRND)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered solid top-line and cash flow: revenue grew 27% YoY to $104.220M, net income was $16.638M (16.0% margin), and Adjusted EBITDA was $45.207M (43.4% margin) .
  • Versus consensus: revenue was roughly in line ($104.220M vs $104.775M*), but EPS missed ($0.0828 actual vs $0.1033*); Adjusted EBITDA exceeded internal margin guardrails yet SPGI’s EBITDA actual is not directly comparable to company Adjusted EBITDA* .
  • Guidance maintained: management reaffirmed FY25 outlook of ≥26% revenue growth and ≥43% Adjusted EBITDA margin, following a raise last quarter from the initial 24%/41% framework .
  • Key catalysts: product momentum (mapping in Right Now and Explore heatmaps), strong indirect ads ramp, and gAI/A-List rollout supporting premium monetization into 2026 .

Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

  • Direct revenue grew 24% YoY to $87M and indirect revenue rose 39% YoY to $17M, supported by subscription enhancements, merchandising/paywall optimization, and new ad partners/formats .
  • User KPIs improved: Average MAUs reached 14.9M (+6% YoY), average paying users hit 1.2M (+16% YoY), and ARPPU expanded to $23.65 (+7% YoY) .
  • Management emphasized AI-native product progress: “We are delivering on our performance objectives while continuing to execute at a high level on our product innovation and AI roadmaps” — George Arison (CEO) . Also highlighted A-List as the first AI-native product at scale to redefine user connection .

What Went Wrong

  • EPS missed consensus (actual $0.0828 vs $0.1033*), despite revenue being broadly in line* .
  • Operating expenses (ex-COGS) rose 43% YoY to $53M, driven primarily by stock-based compensation, pressuring EPS despite strong EBITDA margins .
  • Direct brand advertising remains slower than hoped due to lingering industry caution post-Anheuser Busch; international ad fill rates still have room to improve .

Values retrieved from S&P Global.*

Financial Results

Summary P&L and EPS

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$97.621 $93.938 $104.220
Net Income ($USD Millions)$(123.852) $27.019 $16.638
Net Income Margin %(126.9)% 28.8% 16.0%
Adjusted EBITDA ($USD Millions)$38.617 $40.689 $45.207
Adjusted EBITDA Margin %39.6% 43.3% 43.4%
Diluted EPS ($USD)N/A$0.09 $0.08

Segment Breakdown

MetricQ4 2024Q1 2025Q2 2025
Direct Revenue ($USD Millions)$80 $80 $87
Indirect Revenue ($USD Millions)$18 $14 $17

KPIs

MetricQ4 2024Q1 2025Q2 2025
Average MAUs (Millions)14.7 14.6 14.9
Average Paying Users (Millions)1.1 1.2 1.2
ARPPU ($USD)$23.46 $22.86 $23.65

Cash Flow and Liquidity

MetricQ4 2024Q1 2025Q2 2025
Net Cash from Operations ($USD Millions)$29.533 $23.793 $37.518
Capitalized Dev + PP&E ($USD Millions)$(1.258) $(0.628) $(0.880)
Free Cash Flow ($USD Millions)$28.275 $23.165 $36.638
Free Cash Flow Conversion (%)73.2% 56.9% 81.0%
Cash and Equivalents (Period End)N/AN/A~$121

Q2 2025 Actual vs Consensus

MetricActual Q2 2025Consensus Q2 2025*Surprise
Revenue ($USD)$104,220,000 $104,775,000*Slight miss
Primary EPS ($USD)$0.0828*$0.1033*Miss
EBITDA ($USD)$27,414,000*$45,933,330*Miss vs SPGI EBITDA; note company reports Adjusted EBITDA of $45,207,000

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue Growth %FY 202524%+ (initial, Mar) 26%+ (raised in May, reaffirmed in Aug) Raised in Q1; Maintained in Q2
Adjusted EBITDA MarginFY 2025≥41% (initial, Mar) ≥43% (raised in May, reaffirmed in Aug) Raised in Q1; Maintained in Q2
Share Repurchase AuthorizationThrough Mar 2027$500M program announced $175M remaining as of Q2; $325M repurchased YTD Executing program

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
AI/Technology InitiativesAnnounced A-List, Discover, chat summaries; Wingman testing; plan to ship 40+ products in 2025 Reinforced gAI architecture; A-List positioned as AI-native product at scale; agentic AI contributing up to 20% of shipped code Accelerating
Product Performance (Right Now, Explore)Right Now expanded; limited monetization began; Explore enhancements discussed Introduced mapping in Right Now and Explore heatmaps in 21 cities; strong engagement; privacy-protective historical data Improving
Indirect Ads2024 indirect up 56% YoY; Q1 indirect $14M with new formats/partners Q2 indirect up 39% YoY to $17M; rewarded video expected to be 2026 lever; international fill rates opportunity Improving
Pricing/PackagingPrices unchanged since 2018; communicating future tests; focus is 2026 revenue Announced pricing experiments (non-material to 2025); inflation suggests headroom; aim to monetize added value Preparing
Regulatory/LegalLitigation costs (Norwegian DPA fine, unionization) noted in non-GAAP reconciliations Q2 reconciliation includes litigation-related costs; ongoing awareness Stable
Health/Wellness (Woodwork)Soft beta launched in two markets with telehealth partner; capital-light approach Continued groundwork; strategic, long-term effort; near-term focus on learnings and trust Building

Management Commentary

  • Strategic focus: “We are delivering on our performance objectives while continuing to execute at a high level on our product innovation and AI roadmaps.” — George Arison (CEO) .
  • AI-native approach: A-List “uses AI to prioritize high-potential chats, summarize conversations, deliver insights, and guide users back in with intent… broader monetization expected to start in 2026” .
  • Profitability and EPS: “We delivered GAAP EPS in Q2 of $0.08 and expect to continue to generate positive EPS going forward” — Vandana Mehta-Krantz (CFO) .
  • Ads growth narrative: Third-party ads ramped with new partners and formats; rewarded video is a 2026 growth lever; direct brand ads impacted by industry caution post-Anheuser Busch, with ongoing efforts to pitch Grindr’s desirable audience .
  • Guidance posture: Reaffirmed FY25 outlook of ≥26% revenue growth and ≥43% Adjusted EBITDA margin based on H1 performance .

Q&A Highlights

  • MAU growth drivers: Strong presence among younger cohorts (18–29) and plans to tailor marketing and localization to accelerate growth in Asia/LatAm; product initiatives (intent-based offerings) to deepen engagement, especially for older cohorts .
  • Mapping features: Heatmaps in Explore and proximity in Right Now enable local discovery and future monetization around events, activities, and travel; privacy preserved via historical (not live) data .
  • Indirect revenue acceleration: Driven by third-party partnerships and new formats; no plan to increase ads per session; focus on higher-quality ads and improving international fill rates .
  • Operating expenses: Higher OpEx reflects product investment and accruals; more evenly distributed expense cadence across quarters; margins at ~43% align with outlook .
  • Pricing tests: Experiments will be non-material in 2025; noted price headroom since 2018 and added premium-value features (e.g., A-List for Unlimited) to support future monetization .

Estimates Context

  • Q2 2025: Revenue nearly in line ($104.220M vs $104.775M*), while EPS missed ($0.0828 vs $0.1033*). SPGI EBITDA actual ($27.414M*) differs from company Adjusted EBITDA ($45.207M), reflecting metric definitions* .
  • Implications: Street may fine-tune EPS to reflect higher OpEx cadence and stock-based comp, while keeping revenue trajectory supported by subscriptions and ads; FY25 consensus revenue $435.962M* and EBITDA $191.155M* align with the reaffirmed margin framework*.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Core momentum intact: subscriptions and ad tech execution drove 27% YoY revenue growth and 81% FCF conversion; cash balance ~$121M provides flexibility .
  • Guidance credibility: FY25 ≥26% revenue and ≥43% Adjusted EBITDA margin reaffirmed after a Q1 raise, signaling confidence in H2 product rollout and monetization .
  • Near-term catalysts: Mapping/Explore heatmaps, continued Right Now monetization, and ad partner ramp (international fill rates, rewarded formats) .
  • Medium-term monetization: A-List/gAI should support premium pricing and value capture in 2026; pricing tests underway, non-material for 2025 but set foundation for ARPPU uplift .
  • Watch expenses and SBC: Elevated OpEx tied to accelerated product roadmap and stock-based comp—monitor EPS trajectory versus margin preservation .
  • Ads mix: Third-party ads driving growth; brand advertising opportunity remains, contingent on continued brand repositioning and partner confidence .
  • Structural cleanup: Warrant liability redemption removes GAAP volatility, clarifying EPS path going forward .