Grindr Inc.

Ladies and gentlemen, the conference will begin shortly. You will be a music hold. We thank you for your patience. © transcript Emily Beynon Thank you. Thank you. Good afternoon. My name is JP and I will be your conference operator today. At this time, I would like to welcome everyone to the Grindr fourth quarter and full year 2022 earnings conference call. All lights have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question and answer session. If you would like to ask during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star two. Thank you. I would now like to turn the conference over to Patrick Lenhan, VP of Communications. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Today's call will be led by Grindr's CEO, George Arison, and CFO, Vanna Krantz. They'll make a few brief remarks and then we'll open it up for questions. I'll also note that we released our shareholder letter this afternoon and that is available on our website at investors.grinder.com. Before we begin, I will remind everyone that during this call, we may discuss our outlook and future performance. These forward-looking statements may be preceded by words such as we expect, we believe, we anticipate, or similar statements. These statements are subject to risks and uncertainties and our actual results could differ materially from the views expressed today. Some of these risks have been set forth in our earnings release and our periodic reports filed with the SEC. 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 GAAP and non-GAAP measures are included in the earnings release we issued today, which has been posted on our investor relations page of our website and in our filings with the SEC. With that, I'll turn the call over to George.

Hello, everyone, and welcome to our earnings call. I'm pleased to share that Grindr had a great 2022. We closed the year near the top of our range, growing full-year revenue 34% year-over-year to $195 million and hitting an adjusted EBITDA margin of 44%. Then I will talk more about our financial results shortly. First, I want to take a few minutes to share with you my initial insight about the company and some key business and product highlights from the past year. When evaluating the grand opportunity last year, I quickly saw that the fundamentals of our business are awesome. We have a differentiated product with unmatched fit in the marketplace, incredible user engagement with a young and growing user base, attractive market penetration opportunity, very strong global brand recognition, and outstanding margins. And our passionate team has done a fantastic job delivering strong financial results while working over the past two and a half years to address a historical underinvestment in technology, product development, and monetization. What gets me most excited about this business is Grindr's immense opportunity to grow and deliver shareholder value. I'm highly confident in the plans we're developing to generate sustainable, double-digit revenue growth and continued high profitability as we enhance our user experience, better monetize our core business, execute over time to build out our international business, and add new, adjacent business opportunities as part of our community-focused super app. We intend to deliver strong results in our first full year as a public company. We anticipate a 2023 full-year revenue growth of 25% or greater, with a 38% or greater 2023 full-year adjusted EBITDA margin. We see our growth opportunities in three overlapping time horizons. Near term, we will better monetize the users we have and drive conversion of free to paying users through new impactful features and services in the Grindr app. Because we are early in our monetization journey, we will work to find the right balance between free and paid features. We will also invest in our advertising and brand partnerships to benefit both users and the businesses who want to connect with them. Medium term, Currently, we operate in nearly every country across the globe, but there is more we can do to monetize and grow. We can better serve our international users by further localizing products, bringing Grindr to more and different form factors, and effectively marketing a brand. In addition to internationalization, we will work on using machine learning and artificial intelligence for better matching and generative conversation purposes. Long term. Grindr not only has the largest user base of gay, bi, and trans men in the world, we also have a deep connection to the broader LGBT community. By tapping into our community's unique needs, we can develop distribution partnerships, products and services that deliver new revenue lines that have a hyper-focus on this highly valuable demographic. Having previously founded three companies, I bring to Grindr a founder's mindset and decades of experience in building and scaling successful technology platforms. I'm excited to share more about our accomplishments and results from last year and how they set us up to further scale in 2023. Starting with 2022, the team had a productive year continuing to tackle technology and product debt while building new features and setting ourselves up for further growth in the years to come, all while maintaining adjusted EBITDA margins that compare very terribly with our peer group. Our obvious feature is a perfect example of our user-focused and privacy-centered design, initially deployed in Q1 2022, AlbumEase gives Grindr users the ability to share multiple photos instantaneously with their connections while blocking screenshots and enabling the instant revocation of album access at user's discretion. In 2022, our users globally added more than 70 million photos in 20 million albums and shared them over 999 million times. Our product and engineering team launched Boost, a paid a la carte feature in Q2 of 2022. And while it currently is a relatively small new revenue stream for us, we're confident that as we optimize it over time, it will continue to scale. The successful launch of Boost, which users purchased more than 1.4 million times in just around six months, indicates a strong opportunity for us to grow our card offerings this year and in the years to come. TED is the foundation of Glenda's unique engagement experience. Last year alone, our users sent a total of over 111 billion chats on our platform. Yes, 111 billion. That's over 300 million a day. In 2022, our engineering team will platform our chat functions in order to support faster feature development in coming quarters, including the modernizing of the UI and the UX of our inbox. Using industry-leading encryption, we continue to ensure our users enjoy the best available technology in terms of privacy and security. Turning to 2023 strategic priorities. We made significant technology and product investments over the past two years that helped establish a foundation for long-term growth. Our first priority is to improve the user experience. Specifically, we will help our users make more and better connections by updating features such as the cascade, search and discovery, profile, and tags. And we will create an improved chat interactions experience by improving the inbox, and chat interface to make messaging more reliable, organized, relevant, and actionable. Our second priority is to drive monetization through conversions and new offerings. The core way in which we will drive monetization in 2023 will be through pricing and plan optimization and increased monetization of features and services that we have already built, such as boosts, albums, and filters. Dana will discuss the features as she discusses monetization in other marks. Priority number three is planning for future growth. As we move further ahead, the obvious opportunities for growth are demographic and geographic, and exist in our ads and brands partnerships business where we have underinvested. We also have an incredible opportunity to expand our products and services beyond our core, given we have one of the largest communities of gay, bisexual, trans, and queer people in the world, and we are imagining how we can better serve them holistically. And last but not least, our fourth priority is to continue to commit to our community. Grindr is not a typical business. We have a deep and vital mission of service to our users and to the broader LGBTQ community. Nothing we accomplish would be sustainable without the support of the users we serve. Therefore, we see our commitment to every segment of the LGBTQ community as a foundational strategic priority for the company. In addition to providing financial support where resources can do the most good, namely in the developing world where the LGBTQ community can often be forgotten, We will also continue to serve as a vital source of information about health for our users, like we did with monkeypox in 2022. With that, I'd like to turn it over to our CFO, Vanna Krantz, to talk through our Q4 and full year 2022 financial results.