Great. Good afternoon, everyone. Thank you so much for joining us. My name is Nathan Feather, and I am Morgan Stanley's small and mid-cap internet analyst. I'm excited to be joined by George Erickson, Grindr CEO. Thanks so much for joining us. Thanks for having me. Now, before we begin, quick housekeeping item. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morgansanley.com slash researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. And with that, let's kick it off. So, George, for investors new to the story, can you give us an overview of the Grindr business and how it's evolved since you joined the grinder is the largest social

network for gay people in the world by far there's nothing really as large as us or even close to it you know 98 percent of our users are gay and by men all over the world we're in almost every country in the world except for the ones that u.s. has sanctions on including our and although we have gotten a lot of requests from Iran to be available there so hopefully not in too distant future and you know we've been around for almost 17 years now the product kind of took off like wildfire when it launched on iPhone and has grown you know every year ever since then grinder became public in 2022 and I became CEO that year as well before we went public what we've been focused on as a business is really three things since I've been here. Number one is preserving the core free product to be as strong as possible. We have a very robust free product and we want it to be as good as it can be and frankly better than it has been so far. Number two is driving monetization by getting either users to convert to become payers or getting people who are already paying to pay more because of the value that we're adding to the product for them. And I think that's been really successful so far we're probably shifting a little bit from focusing on conversion to actually driving value from people who are already paying on a go-forward basis and then certainly thinking about new initiatives or new business lines that we can build out that can serve this core audience but drive new dollars to grinder outside of our core product and so we know that our users are spending money on other things as well, which we believe we can provide to them better than some of the other providers might. And like, how do we launch those products? And how do we bring those dollars to Grindr? Which is not going to be something we'll see in the bottom line in the next year or two years. But over the long term, we believe we can establish that to be a bigger part of the business, that we have more revenue sources

than just one poor app. Okay, great. Now, thinking of the financials at your Investor Day back in 2024, you outlined targets for 2027. Revenue of about $600 million, adjusted EBITDA of around $245. How are you tracking towards those targets, and what will be the one or two key drivers over the next 24 months to help you attain those goals?

Based on our guidance, I think we're tracking really well. We finished one year of the three years, because we really gave three and a half years at InvestDate, so we finished the first year and a half of that guidance, and now we're in year two, full year two. Based on what we said for about 2026, I think we're tracking really well. I think 528 for revenue and 217 for EBITDA. And we're really happy with where the business is. I think we've launched products at a really good pace. Feedback from users has been really good. The productivity on the team is very strong. And so I've been very happy with the results. And we should be able to achieve everything that we set out to achieve. And beyond that, while we haven't given guidance beyond the third year, which would be 2027, there's nothing that's happening at Grindr today that makes me feel like we can continue on a very similar trajectory into the future. The big thing for us is going to be where the revenue comes from. We had outlined at Investor Day that we will be building products focused on intentions and finding what are the intentions of our users and how do we serve them for those intentions with features. One intention is right now. Another intention is around relationships. A third intention is something like travel. And we are doing that. And the takeaway in doing that is that people are very willing to pay for premium products and premium services. For example, last year we tested what we call mega boost. So boost is a way people can boost their profile for more people to be able to see it. And, you know, historically we've had like a $9.99 boost as well as a $19.99 boost. And just, I mean, literally totally randomly I said, well, what if we tried like a $99 boost? And we did. And it turns out that actually a really large number of people will pay for a boost that lasts 24 hours, whereas previous one only lasted an hour or an hour plus was specialized in who you targeted at and are willing to pay a lot of money for it. Now, $9.99 was a bit of a stretch. they're only willing to pay $59.99, but that's still a lot more than we were charging previously. And so what we're finding is that for the segment of users who are Grindr's power users, who use the product a lot and who like the value-added services and have disposable income to the point where they can afford to do these things, there is a much higher limit to what they're willing to spend than we might have thought previously. And so a lot of our monetization will be focused on those users, and the benefit of that is that then we can take some of that revenue and invest it back into the free product experience to keep the product-free experience really robust, since having more free users makes all users happy, whether they're paying customers or free customers.

Well, I want to get into a lot of those things, but first, since the proposed take private last year, there's been a lot of noise related to ownership, governance, and share pledging. Can you talk through the latest on those topics and the changes the company's made to the

corporate governance structure sets? Thanks for that question. That's probably the toughest question I get, and I get it, unfortunately, too often, so good to talk about it. I fully appreciate how that's really important to shareholders. Again, they ask me that as well, and so we know, and I think the board knows that as well and is very focused on these issues. So to start with, you know, the issues with a margin call last year and what happened, and James is no longer on the board. He has stepped down as chairman and as a board member, and I think that was addressed kind of well. And number two, we have a very independent board. That was something that was very important to me coming into this job, that the company maintain a majority independent board. Now the board is overwhelmingly independent and I think has shown its independence in a pretty strong way given the actions that it's taken over the time that the company has been public, whether it was in terms of addressing the warrant overhang or in how it dealt with the proposal to go private last year. It formed a committee. The committee evaluated the proposal and responded. And there were other analysts who thought that the deal was done just because it was made by, you know, majority shareholders. And clearly that was not the case, which I think speaks to the independence of the board. When James stepped down, we were really fortunate that Michael Guerin stepped in as a lead independent director. Michael literally is probably among the top entrepreneurs in the United States over the last, you know, 30, 40 years. And so it's awesome for me to have him be in that role. He's been a great mentor to me and I've learned a ton from him. And the board is actively working on adding more independent directors to it, not something we started out just last fall. We had been working on that previously. We added Chet Cohen as the chair of the audit committee in May of last year, and we have two different recruiting firms helping us fill out the available slots on the board for the shareholder meeting coming up this summer. And so I think we'll have some more names to announce in the coming months. And then lastly, Ray is our large shareholder, and his and my relationship is really strong. I really like working with Ray. He is very committed to the long term of the business. I think the reality is that Ray, Michael, and James, in buying this company from Chinese ownership through a U.S. required divestiture, actually saved the product for the user base and have invested significant resources over time into ensuring the product remains really strong and Ray's been at the forefront of that. And as a, you know, I'm a founder at heart. I have built companies from scratch and you always want investors who are as optimistic as you are about things when you are a person like me because you believe that anything is possible. And oftentimes investors are the ones that are kind of keeping you more in check with reality. Well, Ray's the kind of investment you want to have as a founder because he's also super optimistic about the future and always believes that more can happen. And I think that's really positive to have that kind of a voice on the board. He obviously has a ton of expertise in areas that I'm not as of an expert on, like capital markets, and I think that's also super helpful. So my relationship with him is very strong, and I think he remains a very committed shareholder for the long term of this business. So those are the things I'd say kind of on that topic. I realize that there's more to do. I think the board realized that there's more to do, and we'll continue to work on those issues for the future.

Now, back to the financials. So I just had earnings last week guided to fiscal 26 revenue growth of at least 20% year on year. Can you walk through the puts and takes as you were thinking about putting together that revenue guidance, and what key changes are included within the 20%? And then what are the one or two things that could deliver the most upside?

So we, just to step back on how we guide, And this is really very much driven by my own experience because I was a private company CEO before Grindr. I then took that company public, and we went in a company through a SPAC process and had to give long-term and short-term guidance in the SPAC process, and we missed it the first quarter we were public, and that was very painful. And I don't like going through those kinds of experiences, and so I tend to be really careful in how we give guidance as a result. I found that if you deliver 98% to private investors, they're really happy. But if you deliver 98% to public investors, they're usually not. And so we give guidance only to the things that we have clear line of sight to do today. And then as the year progresses, we update guidance based on things that develop because obviously we're not stopped. We're working on more things. What had happened over the last few years at Grinder was that we created a ton of new value in our extra and unlimited tiers, which are our two paid tiers so far. But we never charged users for that value. So a lot of new features went into those products, and we put in some paywalls for free users as well, which made the tiers even more valuable. But the price on the tiers didn't go up. Indeed, price on the TS hadn't changed since 2018. And so last year, we started to look at whether we needed to change pricing to better align the value that the users were getting with the price that they were paying. And in August, we started to run some experiments on price tests. The results were actually much better than we thought they would be in terms of people being okay with the price changes and not churning off being paying subscribers. And so we moved forward with those pricing changes in Q4 of last year, initially for new payers. And that's going to percolate through in the first half of this year across the entire global ecosystem, including the current paying customers who are still on the old price. That is going to be the lion's share of our revenue growth in 2026, which is really monetizing all the things we had launched in 23, 24, and 25 this year and kind of harvesting that. So I think that's really great for us because it's not impacting free users in any way. It allows us to kind of keep the free experience as robust as it is. What is not included is anything that we're doing on Edge. Edge is our premium tier that we are just testing now. We started testing it in Q4 of last year in Australia. Results on that were very strong. We're now running tests on that in a bunch of other markets, including a few U.S. markets, and I'm happy to talk more about that in a minute. And we are really targeting Edge as a 2027 launch, and for that to be the driver of revenue growth in 2027, in line with what we said at the Investor Day in 2024. But if the tests go well and we feel comfortable launching that product globally earlier, then that would be upside to what we are giving in guidance. And, you know, as the year progresses, we'll know more about that and we'll update folks on that. Additionally, last year we started building our first GABOID expansion initiative, which is a business outside of the core app. That's how we call them. And that's Woodwork, which is our performance medications business as an anchor to our health business. Woodwork revenue is also not included in the guidance because it's still very early. So Woodwork has served many thousands of users and is ready for more scale, but it's still very early. It's only month 10 of it being in operations. And so we didn't feel like including it in guidance made sense. So that's another area that's pure upside. And then we have a few of our smaller products that have potential to have upside as well. So I think that is the right approach for Grindr in terms of how we guidance, and we'll update folks when we do the earnings again in May.

Well, thinking a little more holistically here, you mentioned of your three main priorities, there's increased monetization and improving the free user experience. I think that's different from a lot of similar companies where you're doing one or the other a little bit more strictly. And so how do you try and balance those dynamics there, what you're maximizing for? And I guess looking ahead, where do you see the room to really continue to improve that free user experience?

So when I started at Grindr and I came in as a tech CEO and I started three different tech companies, I'd never run a subscription business previously before. The thing I heard from people internally and our board and large shareholders, as well as outside, there's like potential investors is, hey, Grindr is awesome because you have 6% pay penetration and Bumble has 15, you know, so much room, which made sense to me in some respects. But as we learned more about the business, we realized that there's a lot more to this than just, hey, go from 6% to 15%. Now, we have increased pay penetration significantly. We are now at 8.5%, which is way more than 6%, and the user base has grown from 12 million to 15. So if you hold the user base steady, actually, the conversion on the users we had back then is even higher than 8.5%, but it's actually much closer to where Bumble might be today. But what you learn within the dynamics of that is that there's a big difference in who is the payer. And we released some of this data to investors last November, where our younger users, so people 18 to 30, tend to have a lower payer penetration. And then our older users, 35 plus, but especially 35 plus, have a much higher penetration rate on being payers, which means that they're more willing to pay for these value-added services that they benefit from, whereas the younger users don't find that need to pay for those. But we all want as many new people coming to the product as possible, especially as they turn 18 and start becoming kind of aware of Grindr and or join as a rite of passage because they want to come out and figure out what it's like to be gay, et cetera. And so we want to keep that user base as vibrant as possible, and I think that's why we don't have some of the challenges that some of the other products have as far as the younger users are concerned. And so keeping that free product really robust for people who don't feel like they need to pay for it is great because it can mature to becoming pairs over time. We don't need to have them become pairs right away. Some of our straight pairs are in a world where if you don't become a pair in the first week, you never become a pair. But that's not the case at Grindr because with Grindr, as you age, you mature into becoming a pair. And so we do want to keep that very robust. And so we are less focused on kind of grow the pay penetration and more on saying where is their revenue to be had with the people who already pay and how do we get them to be payers at high percentage rates and or to be paying more than they're paying today. As far as the free product is concerned, I think the single biggest thing we can do today for them is actually make the product be less buggy. And, you know, historically, we have had a lot of bugs in the product. A lot of it is an outgrowth of just company history. Grindr was founded by a solo founder, zero investor dollars put into the business. He funds it all himself and makes it be profitable, like, right away, and then grows it from there, and it kind of grows, you know, very quickly and exponentially, and it's all contractors. And so the initial code base is not great, and that just continued for a long time. Then Grindr's bought by the Chinese ownership. They don't invest in the product at all. They're just going to harvest the revenue and don't do technology investments. So then in 2020, when the company is bought out from Chinese, it's left with a very old code base. And we've been slowly chipping away at that. We've done all the back-end work. We hadn't done the front-end work. We started to refactor the front-end of the product and rewrite a lot of the code last Q4. We're now well along on that. As one example, we said it in our shareholder letter last week. You know, for our cascade, which is our front page, the main page that people go to, we went from 30,000 lines of code to six. So we reduced the number of lines of code by 80%, which, like, is a significant change. And the number of bugs that you could potentially put into that code base now is a lot lower. So doing that across the entire code base, both on iOS and Android, will be a big step forward for us. That's going to take about a year and a half still, but I think it will be a big improvement for the free users. And then secondly, I think a really big thing that we need to focus on, and that will not be a change in one quarter, it's going to take some time, is improving the quality of the ads that people see and the type of ads that they see. That is one of the ways we monetize the free users is through advertising. We have a very robust and good advertising business at $70-plus million last year and continues to grow. But it's all third-party ads. We would prefer to have a lot more direct ads in the business that could both drive even more revenue but also be much more relevant to the user. And we can have other ad formats besides what we offer today. For example, rewarded video, which has much higher CPM when you show it, but is also higher quality. And so that's going to be another big area of investment for us this year, next year, and beyond, is taking this very good ads business and making it even better through better quality ads and more relevant ads that are more direct that will take some time to materialize, but I think will be very effective for the future. All right, great.

Now, one of the things the market's been really focused on is certainly malgrowth, moderated a little bit over the past few quarters, nice improvement in 4Q. I guess, can you talk to what led to that recent slowdown and the path forward for user growth? And then just as you think about all the dimensions of the business, to what extent are you managing that KPI?

So we don't manage Mao almost at all. And I realize that's very tough for investors because you all build models on how the business will do based on Mao, but that's not how we think about it internally. We have this very good flywheel where people turn 18, they come to Grindr, and that just kind of happens on its own without us really doing much about it. Are there things we can do to impact Mao? Yes. Have we done them historically? No. Should we do them in the future? Probably. but it's going to take time for that to have an impact. And most of it is going to be outside of the United States because we are pretty well penetrated in the U.S. and very well known. And I can talk about that in a minute as well. But historically, we have not managed tomorrow at all, and internally we don't really manage tomorrow at all. What we do manage for is actually a healthy ecosystem and ensuring that we can remove bad actors from that ecosystem, whether it's illegal behavior or bots or spamming of people, et cetera. It's another area where historically we've done less work, and we do more work on it now, partly because we can build way better tools to find bad actors today than we could three years ago because of Gen.AI. Also, the same with tools that you use to find bad actors, bad actors can use to create more bad behavior, so you're playing whack-a-mole with them a little bit. But overall, we are removing significantly more bad actors from the platform today than we were 12 months ago and 24 months ago. And it turns out that most bad actors show up in the new mile that you might be getting at any given time. Because they were always going to be removed at some point, but they were going to be in the product for longer previously versus what they're going to be in the product now. And so if you look at our MAO growth in 25 versus 24, the only real difference is the account removals that we did, which we shared as a number. We removed about 350,000 unwanted MAO more last year than we did in 2024. And had we had the tools that we had in 25, we would have removed those in 24 as well, and so the MAO growth would have been roughly the same as it was in 24. But we think the rough number of new aggregate ads that we saw in Mao last year is going to be what we'll see in the future as well, all through organically. Now, where we have potential for a lot more Mao growth is internationally, in Latin America, in Asia, and India in particular. And there, marketing can play a role because our brand awareness is not as high as it is in the U.S. Here we have like a 90, 95-plus brand awareness. That's not the case in most of Latin America and Asia and even in some European countries. And so obviously people know you, they use you, but if they don't know you, they can't use you. And so more people knowing us can be really valuable in driving more model. Understood.

Now, one other area the market's had growing concerns over has really been the competitive intensity within the space. And so can you map out the competitive landscape in your view and where you think Grindr fits in? And do you believe competition has had an increased impact on your business over the past year?

So this space, broadly speaking, whether you think of it as dating products or social media products, is a very competitive space. And people use more than one product at once, and we know that. That's true for straight people. That's true for gay people, right? And there's many reasons why people do that. So we are totally comfortable knowing full well that people are going to use more than one product. What we aim at is ensuring that we are the first in wallet product, if you kind of take the credit card analogy, and that we're the product people come to for the longest amount of time, which has, I think, been the case for a long time and has continued to be the case regardless of what the competition may or may not do. All the data that we have shows that that's the case. People spend more time in the app than they ever had. More people are coming to the app than they have ever come to the app before. And young people are coming to the product pretty actively, and that's not an issue. And whenever I say young, to be very clear, I refer to people 18-plus, grander than 18-plus only product. So, you know, competition's out there. That's totally fine. We look a little bit at what they do. We try to stay ahead of competition, but that's not the main focus of our actions at all. What we are focused on is just really good activity for our users and ensuring that they're very happy in the product.

Okay, great. Well, another area where you've been really early adopters has been Gen.AI. I think you've been, especially within the consumer Internet space, one of the most proactive at not just internal operations but also launching products in the app.

Part of the way I took the job.

Which is great. And so can you talk to us about one, what you think the most underappreciated gen AI opportunity is, and two, what do you think the most underappreciated challenge is among investors?

So for us, the way I thought about AI coming into Grindr is I actually had built an AI company in 2019, 2020, and then sold it in the automotive space. And, you know, I knew a lot more about AI, I think, than most people did as a result. And AI is only as good as the data that is driving it. And Grinder has an incredible amount of data. And so to me, coming into this job in 2022, that was a really exciting piece. I'm like, hey, there's like this goldmine of information. And by the way, you have users that are early adopters, right? Like they adopted the iPhone very, very early. And so you could make a conjecture that they would adopt AI early as well. And you could build a truly AI-native experience for them the same way that you were building, you built a mobile-first experience for them in 2009, 2010. So to me that was really, really exciting and the things that I see as huge opportunities is solving some of the challenges that gay people face in meeting other people because of density. So if you talk to gay men, a very large number of them will tell you actually I want to be in a relationship but it's really hard for me to meet somebody that matches what I'm looking for. And that's because most dating in the US is done by geography for where you live and in In most geographies, maybe other than New York and London, the density of people is very low for total number of people to choose from. Even in San Francisco, where we are right now, it's one of the gayest cities in the world, if not the gayest city in the world, as far as percentage of total population. But you're talking about somewhere between 30,000 and 60,000 potential partners. If you look at every gay person in the city of San Francisco, that's not a lot of people to choose from if you are looking for a partner. And so what AI can help us do is allow people to meet other people outside of their geographies and reduce the barrier of, hey, I don't want to travel this far to meet this person because we can share so much more information about the other person with you and match you so much better. And that's what we're doing with AI is taking all this rich data that we have in people's messages, in their activity, in their behavior in the app, and using that to create better matches between people. And that's ultimately what the edge product is all about, right? It's taking all this unique data, putting it into product experiences, and putting them all in one tier and saying, hey, you can use this to either find your casual partners or find your long-term partners or find your friends, et cetera, or use it when you travel. One of the most amazing things for me being in this job now is some of the data I've seen about how gay men's thinking about long-term life has changed post-gay marriage. So when I was younger and not married, I knew I wanted to have a long-term partner, and I even more knew that I wanted to have children. And so in my 20s, when I would say, I want to be married and I want to have children, I was like this weirdo. where maybe like 1 in 10 guys would say they want to be married and 1 in 100 guys would say that they want to have kids. We do a national survey every year, State of the Gay Nation, we call it, and we did it last year, we did it this year. Half of the gay men 35 and under say they want to be married and 25% of the gay men 35 and under say they want to have children. That's a higher rate of I want to be married among gay men and among gay women of the same age cohort. And so we have, like, a huge opportunity to service that cohort in ways that never has been done before through these AI products that I'm, like, super...

Great. Now, flipping over to the margin side, you've maintained strong EBITDA margins of 40% plus for many years now. As you think about all the different areas you want to expand in and invest in, how do you balance the margin trajectory with revenue growth? And then from an AI perspective, as you lean in here, do you see opportunities to really push the productivity that you can have internally?

Yeah, so that's two different questions, and I'll answer both. When we gave our guidance in June 24, we said 39% to 42% EBITDA margin. We've stayed consistently above that, in large part because we've been leaner than we thought we would be in terms of number of people working there, because ultimately our single biggest expense is people. I think implied EBITDA guidance for this year was 41, which is kind of on the high end of that number for the year, if you look at the revenue on EBITDA that we gave. And it assumes that we're going to actually hire the people that we want to hire, but we tend to usually be behind on hiring because we keep a very high bar because I will not allow the company to get bloated. We had 225 people when I joined.

We went down to 90 at one point.

Now we're at 160 U.S. and 30 in Columbia, but still below where we peaked. But the business is twice as big or more than twice as big now as it was back then. So in terms of revenue per head, it's much higher now. We're at $2.75 million in revenue per head. And so I think keeping – and that's possible because we have a very high bar. I mean, I think our team is about as good of a team as any tech company team in Silicon Valley today. and that's very important to me and we'll continue to keep a bar that's very, very high in that sense. And so the opportunity in margin this year would be we hire slower than we think we will and as a result, margin comes in higher or revenue does better than we're guiding to and then obviously we're not going to spend that money. That's going to drop down to margin as well. With regards to making the team even more efficient, I mean, you know, we, 0% of our code last January was written by AI. 70% of our code this January was written by AI. I don't think there's another legacy product company that can say that. And that happened because we made a decision that we're going to become AI native in how we code, and we did. Now, we're not at 100% AI-generated code. There are some teams at Grindr that do that, but not every team. and we'll get to, I think, that number over the next couple of years. I think some of the refactoring that we need to do, our code will help us do that because not all parts of our code actually can accept AI agents today. But what we're doing with our engineering organization is going to happen across every other organization. For example, we need to stop thinking about engineers. Well, first we need to stop thinking about Android engineer and iOS engineer. Those terms will disappear because yours is going to be an engineer. And if AI is writing your code, it doesn't matter if you're an iOS expert or an Android expert, you should be able to work across the stack. Then we're going to probably stop thinking about PMs, designers, and engineers because they're all going to be doing similar stuff. And that part we have not yet actively started to do. Like our PMs are not yet asked to check in code, but that's going to start happening, and people are going to become more efficient. And then, obviously, we want to do that across every other part of the organization, whether it's in finance or in marketing or in sales or, you know, legal, et cetera. I think we're far along in a lot of those, but not all of those and not as far along as we are in engineering.

Well, you've covered a lot of ground here. So maybe leave us with the one or two things you think investors most underappreciate or misunderstand about the story.

Well, I think people still think of Grindr as a dating product and use the dating companies as the comps, which I think is completely off. I think Grindr should be thought of as a social network, and the social network companies should be the comps to Grindr, except that we are narrowly focused on this particular gay and bi male user-based cohort, which, by the way, is significantly wealthier and has significantly more disposable income than almost any other set of the population and is a trendsetter, which is really valuable. So that's number one. And then number two is the fact that – and the first one is hard for me to understand why that confusion is still there, but I keep hammering on that. The second one I actually do understand why people don't fully get this piece yet because we've not proven it yet is our users spend a lot of money with other products and services. And our hypothesis is, hey, we know them better than anybody else does. The products that they buy were not built for them. They were built for the general population that just happened to buy them. We can actually replicate those products specifically for them better than somebody who is not targeting them. And can we bring them to start buying from us versus somebody else? using, by the way, a product to drive brand awareness and distribution that they use for over an hour a day. And I think that's a very strong thesis. And if you think of Grindr that way, then it's a lot more than even a social network. It has a potential to be the primary super app for gay people. And I think that's the big thesis that people should be thinking about when they think about our business.

Okay. Well, George, this has been great. Thanks so much for being here.

Thanks for having me. I appreciate it.