Shares of Grindr (GRND) saw an uptick after reporting better-than-expected full-year earnings, posting full-year revenue of $260 million. Grindr CEO George Arison joins Yahoo Finance Live to discuss the results, stating that the company is seeing "really great engagement."
Arison notes that the company is "in a strong position," with losses solely stemming from fees associated with the SPAC transaction through which the company went public. While acknowledging that dating has been "at the core of Grindr for a long time," it's "a combination of a social network" for the LGBTQ+ community to develop friendships when traveling and gather health-related information. Arison expresses his aim to build "different use cases" to enhance the app experience for various purposes.
Arison states that when features provide value to individuals, "they are willing to pay for those." He noted that although people use Grindr in many different ways, the "features don't support those yet." Arison mentions that generative AI could "help users with communications" given Grindr's substantial chat space — leveraging user data to recommend matches for users and "extend the dating pool."
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Editor's note: This article was written by Angel Smith
JULIE HYMAN: After a roller coaster 18 months since its public debut in 2022, shares of Grindr are higher. They've just reported their first full-year earnings. And it seems like users or investors are feeling the love for the stock.
It gained around 7% in today's trading after it posted full-year revenue of $260 million. Grindr CEO George Arison is joining us now. George, first of all, thank you so much for joining us. Appreciate it.
GEORGE ARISON: Thanks for having me.
JULIE HYMAN: So you guys have been seeing growth. You've been seeing growth of chats on the platform. You've been seeing growth of users, and you've been seeing growth in revenue.
You are still posting losses. So talk to me about the trajectory for reaching profitability.
GEORGE ARISON: Well, on an operating level, we were very profitable, I think, in a really strong position. And EBITDA was at 42%. The losses piece is purely accounting from warrants.
Grindr went public through a SPAC. And there are warrants associated with the SPAC transaction. And given SEC requirements for how you count those, that drags you down to losses. And we can't really do anything about that, because if the share price continues to increase, we will continue to suffer through that until warrants are cleared out in the future.
JULIE HYMAN: Gotcha.
JOSH LIPTON: And, George, I'm interested kind of big picture is Grindr strictly a dating app, George. Or long-term, do you see the app evolving into something bigger and broader?
GEORGE ARISON: Well, I've been saying since I got here and even before the grinder is a combination of a dating app and a social network for the gay community. Because our users use it in so many different ways. Obviously, one of the ways they use it is to date both casually and for the long-term.
When you survey users, they'll tell you that Grindr is the best place for them to find a long-term relationship. And that's what really works for them, which is fantastic. Obviously, casual dating has been at the core of Grindr for a long time.
But people also use it for social networking kind of finding friends and developing relationships when they move into new locations, travel, kind of figuring out what they should do when they go to a new place to visit. And even public health information like played a critical role in informing the users about monkeypox, and vaccinations, and they should get vaccinated, et cetera.
I don't think any of that is going to change. What we can do is really build awesome products to help them with all of those different use cases so that the experience is better in the app versus what has been in the past.
JULIE HYMAN: So tell us more about that, George. Because as you say, if users are already using the app for some of these other purposes, how do you monetize that? How do you take advantage of that to then grow the business?
GEORGE ARISON: My general view is that when you build features that people find value in, they're very willing to pay for those. Grindr historically has been a fairly simple app. Think of it as almost like an Uber for booking black cars and Uber. But that's it.
But people could use them for other things. But you could get an Uber to go and pick up food for you at a restaurant. I tend to think of Grindr in the same way.
We know that people already use grinder a lot of different ways. But our features don't support those yet. We want to extend the feature set to allow you to do all the different things you might want to do.
For example, have a dating profile and have a casual date profile. And those might not necessarily be the same. They might have different information on them.
The pictures might be different because the use case is different. And so different information might be useful for the other person who's looking at your profile. Even in the inbox, we might be able to things for you where these are my relationship discussions, and these are my casual dating discussions, and these are my friends with whom I have nothing sexual going on and sort that in different way.
I think for all these kind of value added features, people will pay for them. That's normally what happens. And there might be in different subscription tiers, or there might be a La Carte based on the usage of the product.
JOSH LIPTON: And, George, broadly, we did see some evidence of maybe some kind of structural fatigue setting in, George, with dating apps especially with younger people. Are you seeing any evidence of that?
GEORGE ARISON: Yeah, I've been asked this question a lot by analysts in the last 24 hours. And frankly, at Grindr, that's not been the case. We are seeing really great engagement from young people, 18 plus coming back into the app on a regular basis.
That's been the case for granted for 15 years now. We've not had trouble attracting the newest 18 plus cohort into the business. And frankly, that relates back to what Grindr is, right?
Grindr is almost like a gayborhood on your mobile phone. In real-life, meaning in the real-world, a lot of people who might finish college are coming out, they actually move into a gayborhood in large cities because they want to be around people who are more like them. But not everyone can do that, right? It depends on where you live.
And in Grindr's case, you kind of build that community that you might have in a gayborhood on the mobile phone. And you kind of always have that. That's really valuable.
Younger users actually really want that because they want to figure out who they are, what it's like to be gay, what life would be like in the future. And so having younger and older people on the same app, obviously, 18 plus only is actually really valuable and very beneficial for a lot of people.
JOSH LIPTON: George, I'll get you got to hear on this. Most every company now George seems to have an AI story. What is yours, George? I mean, you've got a lot of data. How can AI improve the experience?
GEORGE ARISON: Yeah, we have a ton of data. And we're going to use it, obviously, with users consent for a lot of great things. On the generative side, we think given how big chat is in Grindr.
I mean, last year, Grindr users sent $123 billion chats I believe, which is like it's a huge number when you think about it. The big opportunity for us is to help users with the communications, right? There's suggestive text for what you might want to write, or understanding the user that you're talking to a little bit better, or even recommending you guys are talking about going to dinner here are three places where you might want to go for dinner because they all have spots available.
So that's one component of AI that I think is going to be really helpful. And the other one is around matching. Grindr does not do matching today. Its location-based only on a grid.
But on the dating side, actually, being able to recommend people to and say, hey, these people make sense for these reasons. And here's the data behind it. I think can be really valuable for people.
In the gay community, in particular, density is a challenge in virtually no city in the country. Do you have enough people to really satisfy your matching pool because we are only a subset of the population? And so being able to extend the dating pool a little bit more broadly geographically through better matching, I think, is a really huge opportunity for AI.
JOSH LIPTON: George, thank you so much for joining the show today. Appreciate it.
GEORGE ARISON: Thanks for having me.