GRND - Earnings call transcript Q3 2024

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Operator

Good afternoon. My name is Rob, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Grindr Third Quarter 2024 Earnings Conference Call. [Operator Instructions]

Thank you. to of conference Investor like Adeofe, to now Head Grindr's Relations. would turn over the Tolu I Please go ahead.

Tolu Adeofe

and Today's led Thank you, released and for at XXXX. available Call the and this CFO, afternoon, Grindr will letter moderator. Hello, will and the welcome Vanna Krantz. then remarks, Third up make George Grindr's on brief shareholder CEO, by SEC's to They Earnings call Arison; be a open it page for this its is Grindr's questions. few we'll Please investors.grindr.com. the website note, Investor Grindr and Quarter

we I our everyone by expressed or discuss preceded from These actual These statements. Before and will we subject similar we future the materially statements views call, forward-looking during words may such begin, risks such outlook performance. anticipate and and are remind uncertainties, believe, statements results that as be this to today. differ we may could our we expect,

and our risks these have of release the Some reports forth been in filed SEC. with earnings our set periodic

call, today's measures. both GAAP also we present financial and non-GAAP will During

of on reconciliation Investor Additional are SEC. today, GAAP measures, posted non-GAAP has including of disclosures website Grindr's issued Grindr's in in filings a we with been the to included non-GAAP page earnings regarding Relations and release which measures, the the

With that, George. over it to I'll turn

George Arison

growth we revenue Thanks, hello, our exceptional an delivered third or metrics, for our of again greater. quarter, to user increase XX% and Tolu, us and everyone. With all the strength financial enabling to year across guidance

expectations increased partners. our Advertising revenue as advertising our this Our our outperformance optimizations. merchandising subscription effective the and weekly offering Unlimited exceeded by third-party paywall demand fueled quarter, well of success from reflects also as

will user. you a innovative on shortly. team's the on and of the will focus products continued our features And detailed highlights I focus remainder our in as few review Vanna shareholder my of and on can letter. focused a remarks find always, the quarter building more cover launching

testing Right Washington, D.C. expanded area. of we Now the metro In QX, to

Now launched each post users users intent We a feature Right to other. mode to that with in the chat nearby also allows their directly of feed RightNow's and then who are group

We the goal the with XXXX. Now by and end with scaling Right of continue more across more product the of geographies will expanding features

focus engagement, there monetization as significant Our potential is is user on but for well.

also to launched We payer tab, increased interest the to add and conversion an Viewed which In feature. inbound will the over the and this led Interest in tab. increase Viewed across future, centralizing XXX% engagement we inbound-related features Taps, with Me additional user Me

now to given traveling to globally, is addition, are before X their Grindr in who in users Roam allowing move location users profile week. arriving, any live the In a serving different X

as We're letter. in we areas making shareholder progress early Wingman, including good the product well, AI-powered highlighted in which our of testing other

are Additionally, I'm quality resolving supports QX, important our very improvements expect improved the users our bugs and recognize also that as we proud indirectly part we to legacy in team's app place increased to delivering. stability user in an work focus. of and time, This value experience over conversion of took

for map remain development, product ahead approach at is we product the or Day, to Overall, which Investor all track key we're portfolio to about road we on our on our items success. bullish on and plan shared long-term

be others. This sure to that approach make products features Worth before We drive their inherent features revenue. build allows Our preferences. and to us that implementing product our connection unique that however, our bigger community their their that users, drive also noting, work the likelihood this starts is steps with than behaviors, remains some will engagement that with needs, strong. their

continue bigger strategies. setting optimization are performance In we drivers on growth another continue term, likely to initiatives year XXXX as financial test, in are execution year, not up launched I scaling monetization our execute our paywall will team well deliver all to products our both as year, existing creating strong great new exceptional as this launching in products well next results already expect as for as we will good targeted or but that strong an that effective and user With merchandising. Grindr only the be at progress also of in experience. near achieve

potential new these results As grows. a upside from result, we as adoption have our products in

work support, Thank and to for for team a great your big all you thanks in our their QX.

to results. discuss the Vanna here's Now

Vandana Mehta-Krantz

adoption for margin well in XX% increased driven as million, an and of paywall adjusted Direct the George, revenue by everyone. and quarter, $XX better performance higher EBITDA delivered Grindr metrics. tier of increased of exceptional optimizations, by hello, you, marked resulted user to financial year-over-year by year-over-year revenue of an continued the third Thank all Weekly our QX Unlimited Total as $XX free which merchandising XX% XX%. to solid and users. to with paid across conversion million

active growth. prior to few monthly a increased X.XX million, prior users grew our year per the $XX.XX million, with share paying Average in year outperformance X.X% XX% to XX.X increased our year-over-year users for quarter payer being driven direct increased prior user year revenue business the average X% over to demand the average strong metrics, our this quarter. XX% over bringing user the And key the revenue for to To the paying million. to X% by Indirect in penetration quarter. over advertising QX $XX

EBITDA profitability. XX% up $XX $XX Operating XXXX, expenses million million, of to QX of or EBITDA cost year margin XXXX million in excluding ago XX% and revenue. for revenue, of expenses, versus $XX year-over-year. were Adjusted QX was a X% a to adjusted Moving equating

We balance and cash quarter equivalents. ended our million sheet. cash in with to the $XX.X Turning

on conversion the flow Our our gross we million, EBITDA. the X.Xx adjusted of last EBITDA. cash was based from months generated of ratio of leverage In $XX.X quarter, XX% a XX rate positive free adjusted third

working flow in free timing a reminder, As our capital. cash quarterly to is subject changes conversion of

EBITDA raised for the anticipate expect that XXXX we in now margin on outperformance We outlook revised greater. adjusted our our recap year-to-date, Based guidance we of letter. revenue or growth our I'll XX% and greater, or revenue shared continue year. of XX% Lastly, we've to our

on Our updated are timing in we we consistent implies of as with the and Overall, for an XXXX. strong outlook our planned absolute the business stage the basis growth set relatively QX pleased continued quarter-over-quarter investments. revenue

With that, I'll ask the up line operator the to questions. for open

Operator

first [Operator Instructions] from Jones question line JMP. Your comes of Nick the from Citizens

Nicholas Jones

Great.

kind consider you this investment last those accelerate potentially As at and we of and over kind the subscribers there and quarter, kind accelerate map Analyst opportunities or of the to quarter? the out you about ARPPU road of couple performance performs, to kind accelerate accelerated of we maybe about in I time better-than-expected think this deliver quarters think are opportunities as paying we there of philosophically these as should Day results, average maybe are lines? kind increase the How time users potentially lines? of mean laid

George Arison

Nick, and to the you. question, for Thanks good to talk

obviously, or want as set. always We target want So right? much the the that exceed. don't our philosophy. accept deliver we always everyone we might on my minimum generally to just as possible management team, We That's to

is than and have the then a plan. plan, a plan stretch the plan, and lot aggressive a have we more stretch We

map out by We is are really laid as we're and today which on the things where working product we've with the far as those. happy

As markets. X globally. live the Roam is is in now letter, we in discussed shareholder Now now Right

of under kind in X to bunch X features also have we works, would there the year. add-ons of launch the to and a that them next of We expect are

talk example the And are in as been map it then we're on which future, as also that positive, paying perceiving launched. releasing excited the The how that are feature But didn't of things quite working bunch well it the it both of impact public users the we prior that really we'll of terms Interest about. conversion be impact is road in about the of being on where an actual a to to the not customers. tab has on I'm

I and everything think are what have. be will we or publicly So be track we which said, that, more on to things we'll we'll important that see launching either from us is of you think ahead schedule beyond on

products. learning as kind and have in market monetize building my space to about once our that general, why that because then new on of with product development. with reasons of the fit is users is possible they and of those the tend users get amount underinvest products it one aggressively have trouble frustrated new In maximization as the not And product, of product people really profitability

to make lot then a want and And product, start product users, it. so to to their happy differently to monetize users make the and thinking things with in try sure about are that sure the how scale I experience of we do invest

over year the Grindr for success I just up X think setting or term. but longer for that's a not

Nicholas Jones

you George, the guess, then maybe using out progress exciting start indirect of follow-ups. what of Right Vanna, there? updates it about the you monetization And then, X and the what opportunity users of as kind kind product I formats within could just any maybe roll kind there? revenue new of Now, you're things Great. to -- One, learning about are quick most speak as ad some you get that the and excited And

George Arison

ads take then Right will I'll take the the Vanna question. Now, Sure. and

need that are name again, people to then them of people to for of Now chat sort but do a and Not offer. built. meet who are broad where number initiate can to up are it's suite say people They suite try openly all Now, implies. there, there's of from them can the for one, then are the to in now, is not a Now And mode. feature all Right as some of the the Now in able today who features Right It post built, What that Right grid them chat discussions. right? and be available that yet one-on-one the messages in can everybody, a mode. people are already want are just it's right So is, Right to they're we broad So of pretty mode built, --

One saying from be as everything users group not being of with we chat. added think That's being Now to it's to of something future, popular available photos send the we things to in adding going we'll the that to Right in feedback the gather. and to experience is come we and the photos chat Now can photos want we Right to be going that's able with available, be a well. get lot quite being

be should that come. on So the

and things There's percentage using of not of think don't intent to using that right? benefit we like Right that enabling user and see, seen often. to base kind are give expected. users, to want that XXX% by user to that now, the speaking it of are position And to a And engagement see a in The that's we exactly their publicly experience that's address think not portion I we right Now intent. I'm We want a our for positive. is a been then active what but will we've from from it as them features is a everybody. have this number really

The back do they in running Australia metro product then thing an and And other thing meaning for in seeing both Right it's is one tracking area, we're it good experience once reengagement people or D.C. really Now, tests. to And where try once. we're we're reengagement, come to again? on the

kind user. overall, I scaling I'll focused So work we more to on going experience a and We focused as going will far -- suite in feedback get Now in as probably be on be with And year more as parallel we of works. those not user planned getting Right monetization as the to It's good. end of much good need as learnings add next then few slowly on are product for think to And set up turn for in over the the launch to is next a last this doing, the and scaling do so question. markets it through Vanna we it then of and engagement test to features product on possible very year. had the Now. that's much the of Right to pretty And

Vandana Mehta-Krantz

ads. the Nick, just to on up follow

really we've XX% at grew indirect yes, including all which quarter our of revenue, strong a had business So across lines, year-over-year.

here. ads know, our and of you As a our differentiator robust freemium really monetize for ability are because us offering to

fairly this because have no really payments margins on also Google. there's third-party the or to Store We App nice

been interstitials. by mean are enhanced ad tech think I'd more And of from also also And drive and we're addressed a from had perspective. been so have what to more we've And those complicated little when partners. being We're the ad We've I interstitials third-party the joined, able of filled underinvested formats. bit a slightly to say are we rewarded And is talent really little addressed. in having both perspective process sales Both us. starting therefore That that and be a opened ads. higher more our demand up been And and has those ad by about CPM. a video. business native

So pretty confident say, in I'd our some ads, to continue that able to we'll here. we for be we're journey, early still really feel returns but real show

George Arison

little the appear ad. like things what would in I mean even ordering the of

had order ad house our and money perspective ad. external does set the making the appear So been where on a ad from which not would an of up first second, then make appear would sense obviously

actually major And so not obviously we had very switched thing a but a impact. that, positive which is

where area huge and just of not opportunity it's has So a lot attention paid. been an

business for work a to is us done being into year, last lot year this this set for year work the well a growth more into lot up did ads XXXX. we to And so successful move year a and of

Operator

comes the from Your James. line Andrew of next Raymond question Marok from

Andrew Marok

to You contributors to I you've still a a historically, And you I being mentioned might in improvements? undermonetized I hold? merchandising just but how that? merchandising little want be little How touched run and quarter. are pricing maybe are balancing they direct response, there balancing of do pricing And your think more I changes philosophically room explicit, bit guess to be you that on given and monetization in move past you your the I early and on guess. So versus think growth that is more user to sensitive in last pricing forward much stages you to it in key bit optimizations kind revenue an mentioned as bit start a the think base how merchandising service, take and this

George Arison

Totally.

that's definitely about We offering, versus question. a Grindr the different anybody the for robust thanks something else very in and really free So have that's space.

have pay they acknowledging the primary think important, have product. significant turn users when fully kind can as a attracting adults. and very few comes going and never That You limitations product, people that be of and trouble with is and Grindr which Grindr we that use obviously for to XX that's the And as new benefit, mature is become and don't I they crucial. join

as free paid that as paid users. One users you of things working the in this with as is meet I are start about think to just learn space want important free because users you'll users

between here And experience is said, a robust user so where free having should user is paid base line and very crucial. That there free user always be around a a the a experience. discussion

some some should is others having no call of then things is are we're actually that, And significant happened. planned of of kind back so like are just tier. that value a this are tightening, that where discussion that paid doors, like actually but being on were be offered being our meaning things them that that frankly, people the way, And them -- they we one part

change free other of through many user we year -- they send to that did user a could things -- messages So is found this move a how Explore the one feature. the users

you people I'm feature or Palo on a have I map, be San New that location and I'm in that can you a in look the in we see up can either look a go put can people who in that where where map Francisco, in And location. and is Alto particular Alto in and -- different grid I on York. So Palo are from up can

that limited think with the just send value, you incredible the improvement from believe a if paying You obviously, can has we that allowed per users one. an that historically, paid tiers. to should We've to And we we X to that, through reason And that, amount messages that significant. there not and now sit value an our pretty of in you're And benefits change. day -- that were conversion see did is are Explore. customer,

fantastic. product there time, long a lot of believe we the in things limited same making value can Interest the big So really usage, have increasing invest are is That's jump user as which Building Me, located in that that, list And At robust free experience to paid right? by that with we've well. maintaining the result free not like users do in It's saw in tiers significant continuously that offering. a seen users paying tab is do a existed, the it's but something feature a a we free really we users. Viewed where we jump a while is and fairly better. how that in it, changing engage

something and not chat bugs working publicly important, a both to about that of user well. can things in as we way map, be problems improved is free discussed everyone's the the going different come everybody, remain product on talked obviously, a very well. a user future really on -- offered a very, That's free experience that solves think, we've that things that and we free lot architecture, there's experience to the obviously was in significantly lot I as in robust. important that that addressing will was that And the product enjoy are the moving better. Us users and really the me. Us to to that makes the to built stuff experience team It's road that

think ways in it a paid the manner. But there exists more to super shifting the doing us to we think which We're with make to do be there's sit feature about continue in a that. think very opportunity going not aggressive should We're do we on for sense, that and going plenty or it. value we thoughtful set in can and specific side there deliberately are a product those

that experiment not of Taps So run. time, did And fully in at run that add it, it that you'd changing that We did did a product look decide I'll might customer. global is line be see at changing did a you rolled the sense who test. we from know. testing where things one and to we then And that's this will paying Reddit it guess make and with not pursue make the only something be have This we number to last where Taps will and worked decided in we test otherwise, I to back people right? an of hours, thing. area certain and how we've could with go not terms paid change, that that free on the based we between there a

Vandana Mehta-Krantz

that one Andrew, thing an add, a just last XTRA nice saw merchandising Just message. change a last you if that wanted to Andrew, We ad into oh, and is be get to upsell. just ads no one suggesting with add, and that if would simple and to thing pop-up you -- weekly conversion simple of saw

Andrew Marok

then in anything noticed may launch. competitor Really thorough. iOS very, into thrown just around believe And XX Store that App a be today who or you wrench new disruptions a There maybe things? one. evidence iOS seen? rankings some Is any very the the was out that quick what a Or changes to potential that they had had have

George Arison

track to we the but our that have don't new yet. to quite anything. anything launching, not do ratings noticed closely, with we've I iOS add Obviously,

Vandana Mehta-Krantz

it look. another bubble in but didn't well, definitely transcript Yes, as we'll us, saw and to we up take a that

Operator

Cowen. Your next the John from from comes question Blackledge TD of line

John Blackledge

questions. of couple A

do driving X to then mix of tier? Unlimited that have the driving is higher conversion? And switch the both? it so payer a it tier, I more Or payers is see to follow-ups. on you Or existing weekly First,

Vandana Mehta-Krantz

for Thanks Sure. question. the

closely. continuing to track We very rates increase, have we do conversion and seen cannibalization

as brought would were for And very how cannibalization so you surprised is I new I low. pleasantly asking was And cannibalization think was out Unlimited we suggest that the the this weekly. what duration you're that

And is so it helping conversion drive rates.

John Blackledge

the but George kind strong, user on up top this pretty growth touched a helpful. remained little That's And funnel, of Okay. of just the X%. bit,

in question the drivers Just in kind that geos you stood mentioned of of then of prior technical debt. talk addressing and achieved for the terms where technical the And of team MAU the that of Grindr technical the kind final the growth. teams accrued fixing and current key from infrastructure. if any then in how on much me some is sustained addressing kind is out can And debt management growth team and just -- it of clicking is has of in terms -- back that just that the you release, the MAU

Vandana Mehta-Krantz

I'll start with MAU.

you favor. growth as our perspective, And are number. MAU noted, the of being people we're from one countries more them is working a that a see that identifying A that of we and from with couple are more more and -- at so more happy fluid. things in we At yes, macro And level, see level, the micro continue we to X% as open. and more

as helpful that's so And well.

actually focusing with of happy a with great couple experience. things on a to We're user respect

that so experience app. great user on a focusing the app, And helps in the in people bring people keep

And MAU. bug and that would our suggest helping are therefore the I fixes, so user a great instance, for experience

Secondly, that at also bring I'd our just in our map keep MAU numbers. on people features product and all like to the good help mention road

so those for are our working in things growth. MAU And all favor

George Arison

Yes.

I'll have and kind to. had have later a a Grindr Grindr used don't thing do of lives add as but a they as their there might that use one account that are still think users mid-stage much might Grindr of MAU is know on on we account, I

want of partners that find down the settle for using have world. a long-term that reasons the even that partner. primary find which the excited a is into lot they move though Grindr long-term long-term the know is less fact community purpose around of we -- way gay by them for in that Grindr of people we in One also features to they relationships a make the stage want to the and they And don't

obviously and a road our as case, we those working product better is map. do is something are that believe that users And to engage we there that's which so on, use we build on way relationship the

being cohort. going will that, help to like with I kind it I that cohort. it's inevitably little the on do that older MAU And of So when as reengage built not think to of ability MAU, while age have impact because the we older, my hey, in I use well bit that's a idea an that think

product necessarily old us. So very versus you'd it's but like a what on older not expect

totality with that's technical years debt, turning is regards Grindr And long a very around mobile in of years. not the be been product years actually to that transition It's to the in world mobile of that's time while old the very a long, a then March. XX XX technology, now. for only that's the long time, in last because going right, in happened And

was so but at sense a Grindr technology And necessarily foundation, the build how lot made use it built with you not of to when technology it's was that built, today.

over address of right, the was X-plus inherited. done technical the lot since last have a really XXXX We debt to that years, work

the out large example, Grindr For there when is that very who on today today technology Chinese completed fundamentally folks what that a the from the was and bought different the from shareholder product back purchase. remain of end, underlines ownership kind

And in really place. strong so that's a

more monolithic in would really transition base, you do Android you today, there mobile much we if iOS make. because, so still to the were scratch and things challenges this base, to new that from for needed was causes nature. another that differently. architecture And is the are Moving In architecture code app is example, right, code the building the that big

bug, part you base any to something on code feature base, that totally related the that modern you but the like way, in And built impacting recently working of of that you're bug and that so and And new be that code tests run feature and wouldn't the a in the base have situation. ones don't then causing part new code a you you different apps of release a part kind on one so after based a built wouldn't discover bugs, find it's feature you sometimes right? and of

it's we changes right and say of we base we working them, will work for rewrite ago, the mobile. and made we the So code think changes features, decision I that also decision, X as address the base And then through to parts make years add that. these are we was meaning was code in the as that through

And time. take along so kind and on come own of some its will that will

X-week did We is a And kind time. bug bash. accumulated a lot what had did of been have product in of that bugs we the over run

that As But I don't should there love accumulation time. a all technology the bugs been be because bashed actually had bugs. builder, this of

I sense so stop bugs. X like development felt And for to product made just it on work and weeks

very product. As expensive that, process bug a the positive. a think, have when on working will the you the were in bugs of a imagine, just impact can bashed out it's the people But XX% results XX-plus pretty all than you really And have and bash. We direct more positive I there. on user experience

cause speaks commitment having very and quality high an and We to that towards bugs. are also more is it have need the very that potentially in problematic so was high of right? we much worth frankly, ensuring eye things And ship with we and, product to the doing I build product not that quality, should that think

so high for bug very in investing that was a think goes And that ensuring bash the us. having quality is product positive thing on. I continue And as of we'll a time

Operator

And end you concludes This call. reached your question-and-answer today's thank participation. session. for we the We of conference our have

disconnect. now may You

Grindr (GRND) 7 Nov 242024 Q3 Earnings call transcript