管理層發言
Good day, everyone. My name is Megan, and I will be your conference operator today. At this time, I would like to welcome you to the Grindr Second Quarter 2026 Earnings Call. Operator provided instructions. At this time, I would like to turn the call over to Tolu Adeofe, Head of Investor Relations.
Hello, and welcome to the Grindr Earnings Call for the Second Quarter 2026. Today's call will be led by Grindr's CEO, George Arison; and CFO, John North. They will make a few brief remarks, and then we'll open it up for questions. Please note, Grindr released its shareholder letter this afternoon, and this is available on the SEC's website and Grindr's Investor page at investors.grindr.com. Before we begin, I will remind everyone that during this call, we may discuss our outlook, future performance and future prospects. You should not rely on forward-looking statements as predictions of future events. These forward-looking statements are subject to risks and uncertainties, and our actual results could differ materially from the views expressed today. Some of the risks that could cause our actual results to differ from views expressed in our forward-looking statements have been set forth in our earnings release and our periodic reports filed with the SEC, including our annual report on Form 10-K for the year ended December 31, 2025, or any subsequently filed quarterly reports.
During today's call, we will also present both GAAP and non-GAAP financial measures. Additional disclosures regarding non-GAAP measures, including a reconciliation of these non-GAAP financial measures to their most closely comparable GAAP financial measure are included in the earnings release we issued today, which has been posted on the Investor Relations page of Grindr's website and in Grindr's filings with the SEC. With that, I'll turn it over to George.
Thanks, Tolu, and hello. Thank you, everyone, for joining us today. Grindr delivered another outstanding quarter and continued to build on the momentum we have established over the last three years. Our users are responding even better than we expected to the significant product work underway across the app, driving strong organic momentum and exceptional second quarter results. Today, we are raising our full year guidance to approximately $540 million in revenue and approximately $232 million in adjusted EBITDA. What excites me most is that we are able to invest more aggressively in the future of Grindr than ever before while creating stronger operating leverage. With AI, we are delivering on our product roadmap and expansion efforts with less headcount growth than we expected, particularly in engineering. As always, I encourage you to read our shareholder letter for greater detail, but I believe three areas best explain the quarter.
First, AI. Over the last several quarters, we have been terraforming Grindr into an AI-native company, which is changing how we build software. Engineers are increasingly architecting, directing and reviewing AI synthetics rather than writing code themselves. As a result, our conservative estimate is that engineering output increased approximately 2.5x from July 2025 to April 2026 with roughly the same size team. Before generative AI, we estimate that producing that much output would have required roughly 200 additional engineers and about $60 million in annual cost. This is also assuming we could have found that quantity of exceptional engineering talent, which has historically been the true limiting factor. With this technological evolution, our exceptional engineers can now focus more of their time on creativity, judgment and architecture while AI increasingly handles implementation. That is why I call this AI terraforming.
It's a bit like creating oxygen on Mars. Second, product. Many of the product initiatives we have been investing in are beginning to reinforce each other. The free experience continues to improve. AI and better data are making the product more useful. Users are increasingly feeling the benefits of the work we have done over the last several years to simplify and rearchitect our code base. We also continue to make strong progress in both Right Now, which remains one of the most important opportunities to strengthen Grindr's core use case, and Edge, our AI-enabled tier that will be a key driver of our revenue growth in 2027. Third, Madonna. Even a couple of years ago, no one would have expected one of the world's biggest cultural icons to launch a major album through Grindr. Today, that is natural. That incredible moment in Times Square, where an estimated 50,000 people showed up after hearing about Madonna's performance just 30 minutes earlier through Grindr, demonstrated our unique ability to bring together product, culture, commerce and real-world experiences in a way that no other social connections platform can.
We're showing that as the Global Gayborhood, Grindr can play a much larger role in gay life without moving away from our core. In fact, the strength of our core is what gives us the opportunity to do more. Overall, thanks to our team and our users, our business is firing on all cylinders. I continue to believe the opportunity ahead for Grindr is much larger than the market has historically given us credit for. Thank you to our shareholders for your continued support. With that, I will turn it over to John for detailed financial results.
Thanks, George, and hello, everyone. Second quarter was an outstanding quarter across the board, as George highlighted. Revenue grew 33% year-over-year to $138 million. Adjusted EBITDA was $58 million, representing a margin of 42%. The performance was driven by continued momentum in core app revenue, reflecting strong conversion, ARPU and user retention as well as robust ads performance. App-based revenue grew 30% year-over-year to $113 million, supported by solid demand across our extra and unlimited tiers and strong consumables performance. Advertising revenue grew 44% to $25 million, driven by strength in programmatic advertising performance and the continuation of our large year-long direct brand campaign. We continue to expect advertising revenue to run in the mid- to high-teens as a percentage of total revenue for full year 2026. This comes even as we are balancing a disciplined approach to third-party ad loads in connection with our priorities around user experience and ecosystem health.
As previously discussed, we expect ads as a percentage of total revenue to normalize back near the historical 15% range in 2027 and beyond. Adjusted EBITDA grew 27% year-over-year to $58 million or a 42% margin. This strong result reflects top-line outperformance, combined with the operational leverage unlocked by our AI terraforming efforts. Operating expenses, excluding cost of revenue, were $71 million, up from $53 million in the second quarter of last year, with a portion of the uptick driven by one-time marketing expenses for our Madonna partnership. Our strong revenue growth more than offset this investment. Turning to share repurchase activity. During the second quarter, we executed another accelerated share repurchase for an upfront payment of $60 million. As of quarter end, this and certain other repurchase transactions remain in progress with settlement expected to be completed in the third quarter.
We have approximately $300 million remaining under our $900 million share repurchase authorization, and we'll maintain flexibility to buy back shares opportunistically. Given our strong growth through the first half of the year, positive user response to core product improvements and higher-than-anticipated AI-driven operational leverage, we are raising our full year 2026 outlook today. We now expect full year revenue to be approximately $540 million, up from $535 million, and adjusted EBITDA to be approximately $232 million, up from $227 million. In the second half of the year, as we have previously discussed, we expect growth rates will naturally moderate in the third quarter and fourth quarter as we anniversary the global rollout of our subscription pricing changes and lap more difficult comparisons from the second half of 2025. Overall, we are pleased with how the business is performing.
The structural leverage we're seeing allows us to reinvest in high-ROI growth initiatives like Edge while both returning capital to shareholders and expanding our bottom line. We intend to carry this momentum for the rest of the year. With that, operator, please open the call to questions.
分析師問答
Our first question will come from Nathan Feather with Morgan Stanley.
A few, if I may. First, talk about broadening Right Now. Can you go a little bit more into the changes in the product experience you're making there? And help us think through how Right Now adoption and utilization has evolved over the past few years that product matured?
Right Now was the first product that we started working on after the current management team came into place with the idea that people who joined Grindr joined with many different intentions. Users who wanted a more immediate or soon-to-happen connection, something more casual, were feeling like they couldn't have as easy of a time finding other people who wanted that since some people didn't want that. Right Now is a way for people to express that kind of need directly and connect with others who have that interest. We have very good usage on Right Now. We're really happy with how much traction that product has gained over the last 1.5 years or so. At the same time, we've gotten feedback on things that users want to be different. For example, people say the name Right Now implies that I need to connect at this very moment. Being in Right Now for an hour also implies that you have to connect immediately, whereas some people say they want to be able to connect soon — it could be tomorrow or the day after, but not in the very moment.
We are taking that feedback from users and are going to make some changes to the product to be responsive to that. I think that's a normal process: you launch one version, you get feedback and then improve on it, which is how we tend to build products in general. And I think these changes are going to make the product even better and lead to more people using it. Some other things we've done recently are we now allow people to post in Right Now without tying that post directly to their Grindr profile because there are people who want to say, 'Hey, I am in Right Now mode. I'm willing to engage people in that, but I don't want people to know on my regular profile that I'm in Right Now,' which was very well received. Overall, I'm pretty happy with the product and really happy with the roadmap that we have for what we want to do to make it better.
Great. That's helpful. And then the 2.5x increase in engineering output is really interesting. I haven't seen many companies try to frame the actual uplift they've seen through AI tool utilization. Can you help us frame, one, how you're calculating that — the methodology there? And then two, how should we think about token costs and how you're balancing between open and frontier models to balance that with profitability?
So we looked at how much was shipped in a period of time when our team had minimal AI coding adoption versus how much was produced after we pushed adoption. Specifically, we compared output from July of last year to output in April. When you compare those metrics across a variety of measures, the numbers initially came out to 3.5x more, but we reduced that number to 2.5x because we thought it was unreasonable to expect things to have changed that much and because the mix of projects is different now than it was then. Looking at the number of projects people are working on concurrently now versus before, you clearly get more done, but it's a different way of working. I remember when I took this job, I met with a very prominent CEO as a mentorship meeting and I told them the things I wanted to do at Grindr over the next few years. My initial guess was that in three to four years I'd need a team of about 250 to 300 engineers.
They pushed back on the idea that AI coding would take over. They were right. For the things we're doing, we actually would have needed about a 250- to 300-person team in the old world, but with AI coding, we don't anymore. It's an incredible outcome for us. We're of the view that teams should use all the tools out there and not worry about cost as long as the ROI is there. Ultimately, that comes down to management. If you manage the business tightly, which we do, I don't think there's a risk people will waste time or run agents unnecessarily. Historically, we've used a lot of Cursor and a lot of Claude Code. In the last few weeks, we've seen a ton of adoption for Devon, which is exciting. Most of what we use comes from frontier companies. We have deployed open-source models for other things, but not aggressively for coding yet.
Okay. Great. That's helpful. And then one more, if I may. The back half has a relatively large implied step down through the year. Help us think through the puts and takes here. And as we head into 2027, can you help us qualitatively stack-rank the major drivers of revenue growth that could lead to an acceleration versus at least back-half levels?
Our philosophy hasn't changed, and our expectations for the back half are consistent with how we started the year in February. We anticipated the second half would see some deceleration, which is an artifact of a couple of things. One is subscription pricing increases that were put in place at the end of last year and the beginning of this year, which provided a one-time pickup for the year but were not anticipated to continue in the back half. The other factor is anniversarying a strong finish to 2025; revenue growth accelerated each quarter last year, so comparisons are tougher. The increase in guidance we announced today is a function of outperformance in the first half and particularly the second quarter, despite the investment in the Madonna event. That event was significant in terms of both execution and spend, and it did impact marketing. Despite that, we increased guidance primarily because retention and paying-user conversion were better than we anticipated with the pricing increases.
We run A/B tests and had an informed hypothesis on pricing response; the results were better than expected. People churned less than expected and displayed greater inelasticity to price increases, so we didn't see the degradation in metrics we had forecasted. That led to the outperformance that accounts for the majority of the increase in revenue and EBITDA this year, effectively outperformance relative to plan in the first half and not a major change to expectations for the second half. As we think about 2027, we are excited about the opportunity. Edge, our AI-enabled next-tier premium product, is a big part of the 2027 story. We expect direct advertising to potentially modulate a bit; we had some very good outcomes this year that we are not underwriting for next year, and ads may trend closer to 15% of revenue. That's as much as we can offer qualitatively about next year at this time. We'll have better views as we get to November and into next year when we introduce guidance more formally. Stay tuned; we'll have more precision as the year progresses.
Your next question will come from Andrew Marok with Citizens.
This is Tim on for Andrew.
I believe you lost your audio. Are you there, Tim?
Can you hear me now?
Yes. We can hear you now.
Sorry about that. This is Tim on for Andrew. You talked about how you are moderating third-party ad load to better support the free user ecosystem. I'm curious how you distinguish sustainable ARPU growth from monetization that borrows from future engagement. What are the internal metrics or guardrails that inform how monetization intensity takes a toll on the free experience? And what did those metrics tell you in the first half?
Broadly speaking, Grindr is testing all the time. We run many experiments across the board on what free users are doing and experiencing and on product improvements, what paid users are doing, what leads people from being free users to being payers and what impact a given conversion mechanism might have in the short and long term. Ads factor into that as well. We consider where to place ads and where not to. We implemented certain ad triggers in the past and got feedback from users, which led us to change some of those triggers earlier this year in many locations around the U.S. We track the impact on revenue and what impact it has on user experience through feedback, surveys and engagement metrics. Overall, our objective is to maintain an extremely robust free offering, and we have done that over the last four years. We've added many features to the free offering like Right Now that are available to everybody.
I expect we will continue to add more features while aiming to maintain as robust an offering as possible because free users are the lifeblood of Grindr. Unlike some other products in our category, we don't aspire to a world where as many people as possible are paying. We want a portion of our users to become payers, and we want to offer even more premium options to users who want them. We expect most users will not be payers and should have as good an experience as possible in the free cohort.
And a second, if I may. The guide now implies 43% margin for the year in a year that was a deliberate investment year. Is the 39% to 42% margin band being re-underwritten because of the lower user churn? Or is investment sliding into 2027?
Longer term, that 39% to 42% guidepost is the right one to keep in your models. We certainly could improve operating and EBITDA margin significantly if that were the primary objective. We've talked about investing in very early-stage or no-revenue businesses today and incurring costs in both product development and SG&A that are effectively setting the stage for 2027, 2028 and beyond. We've also said this year was an intentional year for investment where we consciously underwrote certain things that don't have large associated revenue today in order to position us for the future. None of that has changed. What is specific to this guidance was outperformance in the second quarter, which gave us better operating leverage for the full year. We also saw a significant improvement in productivity, particularly within engineering, which allows us to temper headcount additions more than we had anticipated. We're still hiring and will grow, but we're being thoughtful given this massive transition period. Where headcount will be added may shift to other functions like product management. Overall, we are not looking to cut headcount; we are just directing resources thoughtfully and may push some hiring into profitability.
Historically, engineering was the primary constraint on how much you could get done — not because you couldn't afford engineers, but because you couldn't hire the engineers you wanted. What we've seen at Grindr, and at other companies at the forefront of AI adoption, is that engineering as a constraint is decreasing significantly. Other constraints are now coming into place, such as product management. Today, we don't have enough product managers to do all the projects we want at the speed we want. The constraints have shifted, and the kinds of product managers you'll need will be different because they'll be doing more code-like work as well. Over time, roles between engineer, designer and product manager will converge. We will continue to hire, but we're being thoughtful in how quickly and where we grow given this transition. Where we might have planned on hiring 10 or 20 more engineers, we found that was not necessary and we could direct those resources elsewhere or toward profitability.
Your next question will come from Andrew Marok with Raymond James.
Sorry about that. I was unmuted on the last question as well. You said in your shareholder letter that packaging and marketing a premium experience like Edge is a new muscle for Grindr. What are some of the key learnings you have made so far? And what are some of the key markers you feel are yet to be addressed?
Historically, the way Grindr has pitched its paid tiers is that people can see more users in the app wherever they are located. We limit how many people a free user can see to a certain number; an Extra user sees more and then an Unlimited user sees an unlimited number of people. There are other things, like Explore, but the primary offering was more people. That was straightforward to pitch. With Edge, the offering is more complicated to explain. There's a lot of extra functionality that is very helpful for managing and navigating the product. If you are an Edge user, it's hard to imagine going back because it's so useful, but people need to understand what they're getting before converting at that price. A lot of the work we're doing is around how to tell the story — testing language, packaging, presentation, aesthetics, photography — to get users to buy. That's not something we've had to do historically.
Edge is at a very different price point than anything we've offered before, so the learning process will continue. We'll go live with a set of things we've perfected going into the fall and then iterate. The product itself tests really well. User engagement with the features is extremely high. Retention for people who sign up for Edge is higher than expected. We are getting people converting to Edge who were not previously payers at all. Our initial expectation was that only Unlimited users would convert to Edge, but a portion of users who had never been payers are converting, which is interesting. Lastly, regarding some information out in the press that we tested a $500 price point for Edge: we actually haven't tested a $500 price point in the U.S. We tested CAD 500, which is not the same.
Got it. Maybe one more on the platform health initiatives you spoke to in the shareholder letter. We've heard similar moves from other players in the industry, and they've sometimes lingered. How are you approaching this issue, and what are your expectations for ongoing efforts to address new forms of bad actors?
You can't assume that ecosystem management is a one-and-done activity. Since 2020, managing the ecosystem has been an important focus for us. Illegal activity should not take place in the app, and if we find illegal activity, we'll remove those accounts and devices and prohibit them from creating Grindr accounts in the future. From 2020 through early 2025, most ecosystem management was manual: a team reviewed flags and reports from users and identified questionable accounts. There was some technology, but it was basic. Over the last few years with generative AI, we've been able to build much more powerful technology to proactively identify bad actors and remove them, using both in-house and third-party technology. As modeling improves, you can create even better tools. It will be a constant effort to remove bad actors. There is some impact on MAU from that because bad actors might appear in one month and then be removed the next, but that's a cost worth paying to have a cleaner ecosystem. Lastly, while the technology to fight bad actors improves, that same technology can be used by bad actors to create accounts. That's true for all social networks, not just Grindr. So you'll constantly need to get better; it's a whack-a-mole. I don't expect this to go away, but modern technology over the last three to four years has made it possible to do this much better than before.
Our next question comes from Logan Whalley with TD Cowen.
You called out that the core free experience on the app continues to get better. Could you talk about changes you're making to the core app and whether you're seeing positive impacts to engagement or app opens due to any updates? As part of that, did the Madonna campaign act as a top-of-funnel demand driver and drive new users to the platform at all? I have one follow-up as well.
From the free experience perspective, we've done a lot to make it much better. One thing that's not obvious because it's not a single feature is that the product is much healthier now. The code base is healthier, so we have fewer crashes and fewer bugs. Grindr's bugginess used to be a common complaint, but you can't say that about Grindr anymore. We've done an incredible amount of work to make the app more stable and faster, and that has made a big difference. That was a massive investment of effort and time. We've basically rewritten almost the entirety of the Grindr code base. We're not done; there's probably one more quarter of work, but that effort made it possible to deploy AI coding safely because prior to that, agents could create buggy code. Right Now is another major addition to the free experience that we are improving constantly. Maps is another area we've started to invest in, which will be a new surface for people to use and should make a significant difference.
Grindr's overall engagement metrics are strong, so it's hard to attribute changes to any one move, but we're focused on keeping engagement metrics strong. Grindr is where many people, when they turn 18 or when they are exploring their sexuality, come to build community and relationships. Maintaining a robust free experience is important. Regarding the Madonna partnership, it was an incredible moment to have 50,000 people turn up in Times Square on 30 minutes' notice when we couldn't announce it earlier. We were concerned about leaks and event safety, but it was a fantastic demonstration of the Global Gayborhood in practice and what Grindr can do. We weren't focused on it being a top-of-funnel driver; the goal was to own a big cultural moment and build positive associations with our brand. Grindr is a known brand, but not yet a loved brand, and a lot of our marketing aims to move from known to loved, which is a multiyear effort.
We also still face challenges getting advertisers to work directly with Grindr rather than through third parties. There are reasons for that, some of which are challenging, but having a case study like Madonna launching an album on the app — and us driving album sales early on — should be a compelling case study for advertisers.
That's good to hear. One question on the cost lines: you called out marketing and SG&A stepped up in 2Q with the Madonna campaign. Looking at SG&A and product development expense, it stepped up as a percentage of revenue. Should we expect those cost lines to step down in 3Q and 4Q to levels more in line with 1Q? What's the best way to think about costs there?
In general, our operating margins stayed pretty consistent in the quarter despite revenue growing significantly year-over-year, which aligns with our longer-term objective of 39% to 42%. We've given the EBITDA approximation relative to revenue, so there's not a lot more nuance to provide beyond that we expect a relatively similar trajectory. We held operating margin consistent year-over-year despite a big increase in revenue. We did see elevated marketing costs associated with the Madonna event in the second quarter. That will moderate a bit, but I don't think it will make a material difference to your forecast going forward. If you need more help, we can follow up offline.
Our final question comes from the Wall Street Press community.
How are you engaging with Gen Z, given the perception that they are less interested in traditional dating and prefer to avoid getting entangled in relationships? Are you seeing increasing interest and engagement in this age group? How does that compare with millennials, Gen X and other cohorts? Looking further ahead, how do you plan to attract the generation after Gen Z, which may be even less interested in interacting with people in traditional ways?
I'm excited to speak with the Wall Street Press later this quarter. We released data in November of last year in our shareholder letter that looked at Grindr demographics across cohorts. That data showed 46% of Grindr users in the U.S. are ages 18 to 30, and that number is over 50% globally. Grindr is the central place where gay Gen Z people come and connect; those numbers over-index versus that cohort's share of the population. If anything, we probably have more opportunity to get older gay men to stay in the app as they move into their 50s and 60s. Gen Z is very engaged, which is great. My general sense is Gen Z doesn't want to use apps that are stale, don't innovate or are so heavily monetized you can't use them if you're not paying. If apps respond to their needs and are usable as a free product, people are inclined to use them. Look at TikTok and Gen Z: they are online a lot. Maintaining a robust free experience is critical, and we'll continue to do that.
Looking ahead, it's hard to predict, but our goal is that when people turn 18 — whether they're out or coming out later — they think of Grindr as a place to understand what it means to be gay and to build community. If we do that continuously, we'll be in a strong position with future generations. We remain an 18-plus product only. Lastly, as people age into their 30s and 35s, their inclination to become payers increases significantly, so we have a robust free cohort when they're younger and then monetization opportunity as they mature. That complements our business well and differentiates us from other products.
This completes the allotted time for questions. I will now turn the call back over to George Arison for any closing remarks.
Well, thank you, everybody, for being here, and we'll speak to you in November.