Yahoo Finance

Grinder reporting first quarter earnings yesterday, missing on revenue, but raising its full-year guidance, and here to break down that report is Grinder CEO George Arison. George, it is great to see you. So let's talk about this quarter, George. So you did report first quarter revenue. Looks like it missed expectations there, though you raised your forecast for full year revenue growth, it looks like, and adjusted EBITDA margins. So so what are you seeing in the business, George? What gave you the confidence to raise those financial targets?

Yeah, thanks for having me. We had a really awesome quarter in Q1. Uh, results were really strong. We grew 25%. EBITDA was over 43%. So really happy with how the quarter went. Um, we don't guide on a quarter by quarter basis. We only guide for the full year because I don't think you should be managing a business um, by quarter, um, but rather for the long term. Uh, and we had been testing a bunch of things in Q1 that were meant to help us drive revenue this year, and some of those results came in pretty strong. So that that helped us raise guidance up by two percentage points. Uh, and additionally, um, we recently started to release our new product called right now to a lot more people. Uh, we launched it to about 15 US cities in March and are adding more um, over the next few weeks and starting to monetize that product a little bit more than we had expected. We had initially planned to monetize it in 2026, but we're going to start doing that in 2025. So that also helped with the raise and in guidance.

And George, you know, investors have a lot of questions about the consumer right now, their health, their resilience, George. You have an interesting line of sight there. How does the consumer look to you?

Yeah, I get asked this question all the time and I have, I don't have a good answer because uh we actually have not really experienced any negative impact from any economic challenges with our users uh at all. Now there are some differences with our users. They come to Grinder for fun, joyful experiences, not for economic issues or for politics. And even if things are bad, um they still need that outlay of doing something fun and enjoyable. Um and so from that perspective, I think we're pretty protected. Uh and then secondly, our, you know, generally speaking, gay and by men, which is like the overwhelming majority of Grindr users, are um more protected, I think, even in a bad economic environment. Um they generally have high disposable income, probably more savings, um more graduate degrees, etc. So I think even if the economy goes badly, they'll be generally protected. So we have no view into anything negative right now. Things are going really well with our user base.

That that's interesting, George. So I was going to ask you who is the Grinder demo in terms, George, of broadly age and income and whether that has sort of, you know, evolved over time, George.

It certainly has evolved. Um vast majority of Grindr users are gay and bi men. Um I think if you were to go to Grindr in 2009 or 2010 when it first launched and when I was using it a lot more because I was not a married dad at that point, um we had a lot more um just gay men versus today where we have a lot more bi men as well. I think that's one of the biggest shifts over the last decade is people being much more comfortable saying that they're bi. And so a higher percentage of our users are saying that they're bi. But we still are fundamentally a product for gay and bi men. That's what we target and that's what we know really well. From the age demographics, Grindr has been very successful at getting younger people post them turning 18, because we are an 18 and only app, to come into Grindr and become users. Um that's probably because when you first come out and go to college or finish college, being around older gay men is something you want as well, because you kind of learn what it's like to be gay from them. Um and so I think that's probably driven allows us to kind of bring in the 18 plus cohort as they become of age into the app. And then secondly, we are a community. Like that's probably the biggest place to find other people like you um in the world for any single gay individual. And so being part of that community is is really critical for a lot of people. And I think that helps us with younger users as well. We probably do have some opportunity in being able to keep our users longer in the app as they get older, right? So they kind of reach that 35 or 40-year-old cohort. We probably don't get as much engagement from them as um we would want. Uh partly because we don't do as good of a job in dating features um versus more immediacy features. And so one of the big things we're working through now, and that's probably more for 2026 versus 2025 in terms of when it comes into market, is features that will help our users with finding their long-term partners. One of the things we're learning about our demographic is that a lot more of the people in our cohort want to be in a monogamous relationship over the long term versus used to be the case 10 or 20 years ago. And so we need to help them find their partners um as they seek them.

And George, let's talk about what's new at Grindr too. Tell me about woodwork, which I guess, George, is this new telehealth service. Walk me through it.

Yep. So Woodwork is a completely new new thing that we launched. It's uh we are building what we call the gayborhood in your pocket, um where we offer a lot of the, we can offer a lot of the things that happen in the gayborhood to everybody on their phones. Um and this is our first gayborhood expansion opportunity that kind of takes us out of the core dating and social connections set of products that we've offered before into something new. Um we are starting out with an ED medication that you can buy um from us in partnership with our partner called Open Loop. Um and so far it's only available in two locations. Um we very much think of woodwork as a startup inside Grindr. So think of something as like zero to one. It's an angel round funded company at this point. Um and so we're not really going to be giving a lot of updates on woodwork in the immediate term while the business kind of learns what it should do and how to do it best, because we do want to give them the time to do that. But I think it's a huge opportunity. You know, 30% of users on Grindr have used ED medications. Um 60% have told us that they've concerned them. And so from that point of view, offering ED medications and later on other additional products that are kind of tangential to that um is a huge opportunity for us. And obviously, our whole concept is we use Grindr, the app, as a primary distribution engine for the woodwork brand, and that would drive, you know, CAC significantly down because we wouldn't be spending all this money on advertising. And then it's also a product built by gay people for gay people. So if you go to woodwork.com, you'll see that the branding is very different than everybody else. And that's also I think something our users would very much appreciate.

George, it is always good to see you and to have you on the show. Thank you for joining us.

Thank you very much. I really appreciate it.