Grindr Inc. (GRND) Earnings

Management highlights

### AI Transformation (AI Terraforming) - Grindr has transformed into an AI-native company, where engineers now architect, direct, and review AI-generated code instead of writing most code manually - With a roughly unchanged engineering headcount, engineering output increased approximately 2.5x between July 2025 and April 2026; the 2.5x estimate is conservative, down from a raw 3.5x measured output - This productivity gain eliminates the projected need for 200 additional engineers that would have been required to deliver the same output pre-GenAI, saving an estimated $60 million in annual costs - AI allows engineers to focus on high-value creative and architectural work, while AI handles implementation, significantly reducing engineering as a traditional business constraint - Engineering productivity gains unlocked structural operating leverage for the business, supporting higher margins and reinvestment while returning capital to shareholders ### Product Development - The core free app experience has improved significantly: after rewriting ~75% of the legacy code base, the app is faster, has fewer crashes and bugs, and has improved overall stability - RightNow, a core feature for users seeking immediate/near-term connections, has gained strong traction over 1.5 years. Management is updating the product based on user feedback, including expanding timeframes beyond immediate connections and allowing anonymous RightNow posts unlinked to user profiles - Edge, the upcoming AI-enabled premium tier, is on track to be a key driver of 2027 revenue growth. User engagement and retention for Edge are already higher than expected, with conversion from both existing Unlimited users and non-paying users - Product innovation continues with new work on in-app maps to add new functionality for users ### Marketing and Brand Building - Grinder partnered with Madonna to host a surprise album launch pop-up performance in New York's Times Square, which drew an estimated 50,000 attendees after 30 minutes of notification via the app - The campaign demonstrated Grindr's unique ability to connect digital and in-person experiences. The primary goal was brand building, moving Grindr from a known brand to a loved brand rather than pure top-of-funnel user acquisition - The partnership also helped build credibility with potential direct advertisers, expanding future advertising growth opportunities ### Capital Return - As of Q2 2026, there is approximately $300 million remaining under the approved $900 million share repurchase authorization. Management will maintain flexibility to repurchase shares opportunistically.

Guidance

- Management raised full-year 2026 guidance to reflect stronger-than-expected first half performance and higher AI-driven operational leverage. Full-year 2026 revenue guidance is increased to ~$540 million, up from the prior guidance of ~$535 million - Full-year 2026 adjusted EBITDA guidance is increased to ~$232 million, up from the prior guidance of ~$227 million - The expected implied revenue deceleration in the second half of 2026 was anticipated at the start of the year, driven by lapping 2025's accelerating quarterly growth and the one-time revenue lift from 2025 end-of-year/early 2026 subscription price increases, with no change to this expectation from prior guidance - Long-term adjusted EBITDA margin guidance remains at the 39% to 42% range. The higher 2026 margin implied by current guidance comes from first half outperformance and higher engineering productivity, not a change to long-term margin targets, as management continues to invest in future growth initiatives - Management expects advertising revenue to normalize to ~15% of total annual revenue by 2027, which was already previously communicated, with no change to this expectation

Segment performance

Grindr operates two core revenue segments: app-based subscription/consumables revenue and advertising revenue. In Q2 2026, total company revenue grew 33% year-over-year to $138 million. App-based revenue reached $113 million, growing 30% year-over-year, and contributed 82% of total Q2 2026 revenue. This growth was driven by solid demand for the Extra and Unlimited premium tiers and strong consumables performance. Advertising revenue grew 44% year-over-year to $25 million, contributing 18% of total Q2 2026 revenue. For full-year 2026, management expects advertising revenue to remain in the mid-to-high teens percentage of total revenue, and is projected to normalize back to the historical 15% range in 2027 and beyond. Adjusted EBITDA for the total company grew 27% year-over-year to $58 million in Q2 2026, representing a 42% margin.

Risks & headwinds

- Bad actor and ecosystem management is an ongoing, continuous effort. While AI has improved proactive detection and removal of bad actors, bad actors also use new AI tools to create fake accounts more easily, creating a persistent whack-a-mole dynamic that will not be fully resolved - Grindr still faces headwinds in attracting direct brand advertisers due to persistent industry bias against the platform, which could limit future advertising growth - The company faces talent constraints shifted from engineering to product management, as the company does not currently have enough product managers to execute all desired projects at the desired speed - Pricing elasticity for subscription increases could differ from internal forecasts, impacting conversion and churn rates - Forward-looking statements are inherently uncertain, and actual results could differ materially from expectations due to a range of market and operational risks, as detailed in the company's SEC filings

Analyst Q&A

• Q: Nathan Feather (Morgan Stanley) asked how management calculated the 2.5x engineering output gain from AI, how token costs are managed, and how the company balances frontier vs open source AI models. /

  A: Management compared engineering output (volume of shipped work and active projects) in July 2025 (pre-wide AI adoption) to April 2026 (after wide AI adoption), which returned a raw 3.5x gain that was adjusted down to 2.5x as a conservative estimate. The company encourages use of all AI tools that deliver positive ROI, with tight operational management to prevent wasted spend on unnecessary use. Most coding work currently uses frontier models from major providers, with open source models deployed only for non-coding use cases to date. (392 characters)

• Q: Andrew Merrick (Raymond James) asked what key learnings Grindr has had developing packaging and marketing for the new Edge premium tier, and what gaps remain to address. /

  A: Historically, Grindr's premium tiers were sold on a simple value proposition of access to more users, which required little advanced marketing. Edge's more complex AI-driven feature set requires more sophisticated storytelling, packaging, and user education to drive conversion, which is a new capability for the company. Management is currently testing messaging, design, and presentation to optimize conversion. The product itself tests very well with high engagement and retention, including unexpected conversion from non-paying users, so work is focused on go-to-market rather than product changes. (441 characters)

• Q: Tim (Citizens) asked how Grindr balances advertising monetization intensity with protecting the free user experience, and what guardrails are used. /

  A: Grindr runs continuous A/B tests to measure the impact of ad changes on both revenue and user engagement, feedback, and retention. The company's core strategy prioritizes maintaining a robust free user experience, as free users are the foundation of the platform's ecosystem; unlike many competitors, Grindr does not aim to convert the majority of users to paid. Management adjusts ad load based on test results, and recently modified some ad triggers in the U.S. based on negative user feedback, with ongoing monitoring of engagement metrics. (384 characters)

• Q: Wall Street Bets community asked how Grindr engages Gen Z users, given perceptions that Gen Z is less interested in traditional dating, and how the company plans to attract future generations. /

  A: Grindr already over-indexes with Gen Z: 46% of U.S. users and over 50% of global users are 18-30, so Gen Z is already highly engaged. Management notes Gen Z prefers innovative, non-stale apps that maintain a strong free experience, which aligns with Grindr's core product strategy. Older cohorts are more likely to convert to paid, creating a natural complementary dynamic where young free users become paying users as they mature, which supports the long-term business model. (352 characters)