Executive Summary

Revenue rose 30% y/y to $116M and beat S&P Global consensus ($115.77M actual vs $113.31M estimate*); EPS also beat ($0.172 “Primary EPS” actual vs $0.113 estimate*). Adjusted EBITDA was $54.8M (47.4% margin); management highlighted strong ads and record free-to-paid conversion as drivers .
Guidance: Raised FY25 Adjusted EBITDA to $191–$193M with margin “above 43%,” and reaffirmed FY25 revenue growth of 26%+ .
Mix: Direct revenue $96M (+25% y/y); Indirect (ads) $19M (+56% y/y) with international third‑party ad partners as key contributors .
Product and pricing: Began price testing in paid tiers with de minimis churn and started alpha testing an AI‑powered premium tier aimed at power users; broader rollout targeting 2026 H2 .
Stock catalysts: A non‑binding take‑private proposal at $18/share from majority holders (60%+ ownership) and subsequent law firm investigations create an event-driven backdrop .

What Went Well and What Went Wrong

What Went Well

Revenue and EPS beats vs S&P consensus; Indirect (ads) strength drove outperformance, especially via international TPAs; subscription conversion reached a record in Q3 .
Profitability expanded: Adjusted EBITDA margin improved to 47.4% (from 44.9% in Q3’24) on strong flow-through and higher capitalized product development costs; net income margin 26.6% .
Product velocity and monetization setup: Price tests showed “de minimis churn” and alpha of AI premium tier started; management reiterated confidence in premium tier as a 2027 growth driver .

What Went Wrong

On S&P’s EBITDA metric, Q3 EBITDA came in below consensus (actual $46.5M* vs $49.2M* estimate), even as company-reported Adjusted EBITDA was $54.8M; definitions differ (GAAP “EBITDA” vs company Adjusted EBITDA) .
Operating expenses (ex‑COGS) rose 9% y/y on higher people costs as the company invests in its roadmap and AI .
Disclosure change: MAU will move to annual disclosure after Q4, which may reduce short‑term transparency for some investors . Also, take‑private and resulting law firm investigations create governance overhang until resolved .

Financial Results

P&L summary vs prior quarters

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$94.0	$104.0	$115.77
Diluted EPS ($)	$0.09	$0.08	$0.16
Net Income Margin %	29%	16%	26.6%
Adjusted EBITDA ($USD Millions)	$41.0	$45.0	$54.83
Adjusted EBITDA Margin %	43%	43%	47.4%

Revenue mix

Metric	Q1 2025	Q2 2025	Q3 2025
Direct Revenue ($USD Millions)	$80	$87	$96
Indirect Revenue ($USD Millions)	$14	$17	$19

Indirect revenue +56% y/y in Q3 on strong international TPA demand ; management does not expect the Q4 ads benefit from a large one‑time campaign last year to repeat .

KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
Average MAU (Millions)	14.6	14.9	15.1
Average Paying Users (Millions)	1.2	1.2	1.3
Avg Paying User Penetration (%)	8%	—	8.6%
ARPPU ($)	$22.86	$23.65	$24.70

Non‑GAAP reconciliation items (Q3): stock‑based comp $6.02M; litigation‑related costs $0.78M; employee transition costs $2.18M . Free cash flow in Q3 was $51.24M; FCF conversion 93.5% .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue Growth	FY 2025	26%+	26%+	Maintained
Adjusted EBITDA	FY 2025	≥43% margin (no $ target)	$191–$193M; margin “above 43%”	Raised ($ target added)
Indirect Revenue commentary	Q4 2025	—	Lower y/y growth vs Q4’24 given non‑recurring brand campaign last year	—

Management noted Q3 Adj. EBITDA margin benefited from higher capitalized product development and non‑recurring executive transition cost effects; full‑year margin outlook implies “strong, steady profitability” but not at Q3’s level .

Earnings Call Themes & Trends

Topic	Q1 2025 (May)	Q2 2025 (Aug)	Q3 2025 (Nov)	Trend
AI/technology	Launched A‑List testing; building gAI architecture; “AI‑native” roadmap	Mapping in Right Now/Explore; heat maps in 21 markets	Alpha test of premium AI tier; AI features like chat summaries, A‑List progress	Expanding AI scope and monetization optionality
Pricing/Packaging	—	Announced price tests won’t impact 2025 materially	First price change tests in paid tiers; de minimis churn	Moving from testing → 2026 rollout
Ads/TPA	New native/rewarded formats; added ad partners	Indirect +39% y/y; rewarded video called out for 2026 lever	International TPAs drove outperformance; Q4’24 one‑time brand campaign won’t repeat	Ads strength; normalization expected in Q4
International	—	Early localization/brand work; mapping aids discovery	Three‑bucket plan (EU pay penetration, LATAM/APAC awareness, India) and localization focus	Strategic, phased push
Regulatory/Strategic	Buyback authorization in place	CFO transition underway	Take‑private proposal; special committee evaluating; no Q&A on it	Event risk present
User demographics	—	—	Majority of users 18–29; older cohorts have higher pay rates; disclosed one‑time demographic snapshot	Supports long‑term monetization thesis

Management Commentary

“We’re increasing our expectation for full-year 2025 adjusted EBITDA to a range of between $191M–$193M… and reaffirming our revenue growth outlook of 26% or greater.” — CEO George Arison .
“Our ads business was the primary driver of outperformance… strong results from international third-party advertising partners.” — CFO John North .
“Price changes are fairly minor… and we’ve had very little to de minimis change in our conversion rates when you compare new prices versus old.” — CEO George Arison .
“We have something like 350,000 Unlimited subscribers… if 20% switched to the premium tier… you’d have a very nice… growth in our revenue.” — CEO George Arison .

Q&A Highlights

Pricing strategy: Balance conversion growth with modest price increases tied to added value; tests showed de minimis churn, supporting broader rollout planning .
Product engagement: Right Now weekly posters 20–25%; >75% view rate; mapping feature drove strong user reception in NY pilot .
Ads outlook: Ads highly accretive to EBITDA; Q3 strength won’t repeat in Q4 due to last year’s one‑time brand campaign; more to do in 2026+ .
International playbook: EU pay penetration catch‑up to US, awareness in LATAM/APAC, and localized product for India’s discreet users; broader language/marketing expansion planned .
Demographics/monetization: Younger cohorts drive engagement; older cohorts drive pay; AI “insights” intended to improve matches and comfort for older users .

Estimates Context

Metric	Q3 2025 Actual (SPGI)	Q3 2025 Consensus (SPGI)	Surprise
Revenue ($USD Millions)	115.77	113.31*	+2.46*
Primary EPS ($)	0.1719	0.1133*	+0.0586*
EBITDA ($USD Millions)	46.50*	49.23*	−2.73*

Note: SPGI “Primary EPS” may differ from company-reported diluted EPS, and SPGI “EBITDA” differs from company Adjusted EBITDA ($54.83M; 47.4% margin) . Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

Grindr delivered a clean revenue and EPS beat, with robust ads and subscription conversion; sequential revenue climbed from $104M (Q2) to $116M (Q3), while GAAP EPS doubled from $0.08 to $0.16 .
FY25 guide now embeds $191–$193M Adjusted EBITDA and 26%+ revenue growth, but Q4 ads will normalize given the non‑recurring brand campaign in Q4’24 .
Price tests (de minimis churn) and the premium AI tier create incremental ARPU paths into 2026–27; older cohorts’ higher pay rates underpin the monetization runway .
Watch the definition gap: company Adjusted EBITDA vs SPGI EBITDA; the former expanded materially, but the SPGI metric missed consensus this quarter .
Event path: $18/share take‑private proposal and multiple law firm investigations introduce near‑term share path uncertainty; special committee review underway .
Transparency shift: MAU will move to annual disclosure after Q4; focus will likely skew to paying users, ARPPU, and revenue mix to assess momentum .
Net of event risk, the fundamental setup into 2026 is anchored by product velocity (Right Now, mapping, AI features), disciplined cost posture, and maturing ads monetization .

Appendices

Select Non‑GAAP and Cash Flow Reconciliations (Q3 2025)

Adjusted EBITDA reconciliation includes: stock‑based compensation $6.02M; litigation costs $0.78M; employee transition costs $2.18M .
Free cash flow: $51.24M; operating cash flow conversion 179.8%; FCF conversion 93.5% .

Additional Relevant Releases and Governance Items

Take‑private proposal by majority holders ($18/share; ~51% premium to unaffected price) .
Special committee evaluation referenced on call; no Q&A on the topic .
Subsequent law firm investigations regarding fiduciary duties in potential take‑private .

Values with asterisks retrieved from S&P Global.

Grindr Inc. (GRND)·Q3 2025 Earnings Summary