Grindr Inc

Previous wording

Grindr Inc. (“Grindr” or the“Company”) manages and operates the Grindr platform, a global social network platform serving and addressing the needs of the LGBTQ community. We had 13.7 million Average MAUs and 1,011 thousand Average Paying Users for the three months ended March 31, 2024, as compared to 12.8 million Average MAUs and 866 thousand Average Paying Users for the three months ended March 31, 2023.

Current wording

Grindr Inc.’s (“Grindr” or the “Company”) mission is to build the global Gayborhood in Your Pocket™, and, through its success, to make a world where the lives of our global community are free, equal, and just. We manage and operate the Grindr platform, a global social network platform serving and addressing the needs of gay, bi, and sexually explorative people around the world. We had 14.1 million Average MAUs and 1,056 thousand Average Paying Users for the three months ended June 30, 2024, as compared to 13.1 million Average MAUs and 929 thousand Average Paying Users for the three months ended June 30, 2023. We had 13.9 million Average MAUs and 1,033 thousand Average Paying Users for the six months ended June 30, 2024, as compared to 13.0 million Average MAUs and 898 thousand Average Paying Users for the six months ended June 30, 2023.

Previous wording

The Grindr platform includes a mobile application and a web-browser-based application. The Grindr mobile application is free to download and provides certain services and features to Grindr's users at no cost. We also offer a variety of additional controls and features for users who enroll in our premium subscription and add-on products, including access to our web application for Grindr XTRA and Grindr Unlimited. A substantial portion of our revenue is from direct revenue, representing 85.4% of total revenue for the three months ended March 31, 2024. Direct revenue is derived directly from users in the form of subscription fees, providing our users access to a variety of features for the period of their subscription, or in the form of add-ons pay-per-use access to premium features. Leveraging strong brand awareness and our significant user network stemming from our first mover advantage in the LGBTQ social networking industry, our historical growth in number of users has been driven primarily by word-of-mouth referrals and other organic means.

Current wording

The Grindr mobile application is free to download and provides certain services and features to Grindr’s users at no cost. We also offer a variety of additional controls and features for users who enroll in our paid subscriptions and add-on products, including Grindr XTRA and Grindr Unlimited. A substantial portion of our revenue is from direct revenue, representing 84.9% and 85.2% of total revenue for the three and six months ended June 30, 2024, respectively. Direct revenue is derived directly from users in the form of subscription fees, providing our users access to a variety of features for the period of their subscription, or in the form of add-ons for pay-per-use access to premium features. Leveraging strong brand awareness and our significant user network stemming from our first mover advantage in the LGBTQ social networking industry, our historical growth in number of users has been driven primarily by word-of-mouth referrals and other organic means. Through gayborhood expansion initiatives, we are developing new products for users to engage with the Grindr platform, which include new partnership-based digital versions of services typically found in physical gayborhoods. Our social impact division, Grindr for Equality, advances human rights, health, and safety for millions of LGBTQ people in partnership with organizations in every region of the world.

Previous wording

In addition to our revenue generated from subscription fees and premium add-ons, we also generate indirect revenue, representing 14.6% of total revenue for the three months ended March 31, 2024, which includes, both first-party and third-party advertising. We provide advertisers with the opportunity to directly target and reach our community. Advertisers on our Grindr platform span across many different industries, including healthcare, entertainment, gaming, travel, and consumer goods. We offer our partners a diverse range of advertising opportunities, including in-app banners, full-screen interstitials, and other customized units, typically sold on a number of impressions basis. Additionally, we contract with a variety of third-party advertisement sales platforms to market and sell digital advertising inventory on the Grindr platform. We will continue to evaluate opportunities to increase ad inventory with differentiated offerings.

Current wording

In addition to our revenue generated from subscription fees and premium add-ons, we also generate indirect revenue, representing 15.1% and 14.8% of total revenue for the three and six months ended June 30, 2024, respectively. Indirect revenue includes both first-party and third-party advertising. We provide advertisers with the opportunity to directly target and reach our community. Advertisers on our Grindr platform span across many different industries, including healthcare, entertainment, gaming, travel, and consumer goods. We offer our partners a diverse range of advertising opportunities, including in-app banners, full-screen interstitials, and other customized units, typically sold on a number of impressions basis. Additionally, we contract with a variety of third-party advertisement sales platforms to market and sell digital advertising inventory available on the Grindr platform. We will continue to evaluate opportunities to increase ad inventory with differentiated offerings.

Previous wording

While we have users in over 190 countries and territories, our core markets are currently North America and Europe, from which we derived 84.4% and 85.0% of our total revenues for the three months ended March 31, 2024 and 2023, respectively. We intend to grow our user base and revenues by continuing to introduce new and innovative products and services to all of our users and by providing products and services in targeted geographic regions outside of our current core market. We intend to focus on regions with a large number of potential users, favorable regulatory environments, and fast-growing economies.

Current wording

While we have users in over 190 countries and territories, our core markets are currently North America and Europe, from which together we derived 84.6% and 85.1% of our total revenues for the six months ended June 30, 2024 and 2023, respectively. We intend to grow our user base and revenues by continuing to introduce new and innovative products and services to all of our users across the globe.

Previous wording

In July 2023, the Communications Workers of America AFL-CIO (“CWA”) filed an election petition with the National Labor Relations Board (“NLRB”) seeking to hold a representation election for certain categories of our employees. CWA subsequently filed with the NLRB a total of several unfair labor practice charges against us and requested injunctive relief under Sec. 10(j) of the National Labor Relations Act. Acting on the petition, the NLRB conducted a secret-ballot election in November and December 2023. As of the date of filing of this Quarterly Report on Form 10-Q, the NLRB has not yet completed the tallying of votes from the election nor has it ruled on the unfair labor practice charges.

Current wording

In July 2023, the Communications Workers of America AFL-CIO (“CWA”) filed an election petition with the National Labor Relations Board (“NLRB”) seeking to hold a representation election for certain categories of our employees. CWA subsequently filed with the NLRB several unfair labor practice charges against us and requested injunctive relief under Sec. 10(j) of the National Labor Relations Act. Acting on the petition, the NLRB conducted a secret-ballot election in November and December 2023. As of the date of filing of this Quarterly Report on Form 10-Q, the NLRB has not yet completed the tallying of votes from the election nor has it ruled on the unfair labor practice charges.

Previous wording

•Net loss of $9.4 million and $32.9 million, respectively. The decrease for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was $23.5 million, or 71.4%. This resulted in a net loss margin of 12.5% and 58.9%, respectively.

Current wording

•Net loss of $22.4 million and net income of $22.3 million, respectively. This resulted in a net loss margin of 27.2% and a net income margin of 36.3%, respectively. The decrease for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was $44.7 million.

Previous wording

•Adjusted EBITDA of $31.6 million and $22.0 million, respectively. The increase for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was $9.6 million, or 43.6%. This resulted in an Adjusted EBITDA margin of 41.9% and 39.4%, respectively. See“—Non-GAAP Financial Measures—Adjusted EBITDA”below for more details on the calculations and reconciliations.

Current wording

•Adjusted EBITDA of $36.9 million and $26.9 million, respectively. This resulted in an Adjusted EBITDA margin of 44.9% and 43.7%, respectively. The Adjusted EBITDA increase for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was $10.0 million, or 37.2%. See“—Non-GAAP Financial Measures”below for more details on the calculations and reconciliations.

Previous wording

Direct Revenue is driven by our subscription revenue and premium add-ons. Our current subscription offerings are Grindr XTRA and Grindr Unlimited. Our subscription revenue has grown through organic user acquisition and the viral network effects enabled by our brand and the quality of our platform. We utilize a freemium model to drive increased user acquisition, subscriber conversions, and monetization on the Grindr platform. We offer premium add-ons on a pay-per-use, or a-la-carte, basis, such as the ability to boost a user profile to the top of the cascade. By introducing subscription and premium add-on offerings, we continue to increase our Average Paying Users. For the three months ended March 31, 2024 and 2023, our Direct Revenue accounted for 85.4% and 86.2% of our total revenue, respectively.

Current wording

Direct Revenue is driven by our subscription revenue and premium add-ons. Our current subscription offerings are Grindr XTRA and Grindr Unlimited. Our subscription revenue has grown through organic user acquisition and the viral network effects enabled by our brand and the quality of our platform. We utilize a freemium model to drive increased user acquisition, subscriber conversions, and monetization on the Grindr platform. We offer premium add-ons on a pay-per-use, or a-la-carte, basis, such as the ability to boost a user profile to the top of the cascade. By introducing subscription and premium add-on offerings, we continue to increase our Average Paying Users. For the three and six months ended June 30, 2024, our Direct Revenue accounted for 84.9% and 85.2% of our total revenue, respectively. For the three and six months ended June 30, 2023, our Direct Revenue accounted for 86.4% and 86.3% of our total revenue, respectively.

Previous wording

Indirect Revenue primarily consists of revenue generated by third parties who pay us to advertise to our users. Our advertising offerings provide advertisers with the opportunity to target and directly reach the LGBTQ community, a group with significant global purchasing power and economic potential. We have attracted advertisers from a diverse array of industries, including healthcare, entertainment, gaming, travel, and consumer goods. We offer a diverse range of advertising opportunities to advertisers, such as in-app banners, full-screen interstitials, and other customized units, typically on a cost per mille (“CPM”) basis. We contract with a variety of third-party ad platforms to market and sell a portion of our digital and mobile advertising inventory on the Grindr platform. We intend to continue to grow our Indirect Revenue through advertising, partnerships, and other non-direct initiatives. For the three months ended March 31, 2024 and 2023, our Indirect Revenue accounted for 14.6% and 13.8% of our total revenue, respectively.

Current wording

Indirect Revenue primarily consists of revenue generated by third parties who pay to advertise to our users. Our advertising offerings provide advertisers with the opportunity to target and directly reach the LGBTQ community, a group with significant global purchasing power and economic potential. We have attracted advertisers from a diverse array of industries, including healthcare, entertainment, gaming, travel, and consumer goods. We offer a diverse range of advertising opportunities to advertisers, such as in-app banners, full-screen interstitials, and other customized units, typically on a cost per mille (“CPM”) basis. We contract with a variety of third-party advertising platforms to market and sell a portion of our advertising inventory available on the Grindr platform. We intend to continue to grow our Indirect Revenue through advertising, partnerships, and other non-direct initiatives. For the three and six months ended June 30, 2024, our Indirect Revenue accounted for 15.1% and 14.8% of our total revenue, respectively. For the three and six months ended June 30, 2023, our Indirect Revenue accounted for 13.6% and 13.7% of our total revenue, respectively.

Previous wording

•Average MAUs. A MAU is a unique device that demonstrates activity on the Grindr platform during any given calendar month. Activity on the platform is defined as opening the app, chatting with another user, or viewing the cascade of other users. We also exclude devices where all linked profiles have been banned for spam. We calculate Average MAUs as a monthly average, by counting the total number of MAUs in each calendar month and then dividing by the number of months in the relevant period. We use Average MAUs to measure the number of active users on our platform on a monthly basis. We believe Average MAUs is a useful metric for assessing the health of our business and our growth in users.

Current wording

•Average MAUs. A Monthly Active User (“MAU”) is a unique device that demonstrates activity on the Grindr platform during any given calendar month. Activity on the platform is defined as opening the app, sending or receiving a chat, or viewing another person's profile. We also exclude devices with linked profiles banned for spam. We calculate Average MAUs as a monthly average, by counting the total number of MAUs in each calendar month and then dividing by the number of months in the relevant period. We use Average MAUs to measure the number of active users on our platform on a monthly basis. We believe Average MAUs is a useful metric for assessing the health of our business and our growth in users.

Previous wording

•ARPPU. We calculate ARPPU based on Direct Revenue in any measurement period, divided by Average Paying Users in such a period divided by the number of months in the period. We believe ARPPU is a useful metric for assessing the growth of our business and future revenue trends.

Current wording

•ARPPU. We calculate Average Revenue Per Paid User (“ARPPU”) based on Direct Revenue in any measurement period, divided by Average Paying Users in such a period and then divided by the number of months in the period. We believe ARPPU is a useful metric for assessing the growth of our business and future revenue trends.

Previous wording

•ARPU. We calculate ARPU based on total revenue in any measurement period, divided by our Average MAUs in such a period divided by the number of months in the period. We believe ARPU is a useful metric for assessing the growth of our business and future revenue trends.

Current wording

•ARPU. We calculate Average Revenue Per User (“ARPU”) based on total revenue in any measurement period, divided by our Average MAUs in such a period divided by the number of months in the period. We believe ARPU is a useful metric for assessing the growth of our business and future revenue trends.

Previous wording

We use Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP measures, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may differ from similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP.

Current wording

We use Adjusted EBITDA, Adjusted EBITDA margin, free cash flow, and free cash flow conversion, which are non-GAAP measures, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may differ from similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP.

Previous wording

Adjusted EBITDA adjusts for the impact of items that we do not consider indicative of the operational performance of our business. We define Adjusted EBITDA as net income (loss) excluding income tax provision; interest expense, net; depreciation and amortization; stock-based compensation expense; transaction-related costs; gain (loss) in fair value of warrant liability; and severance expense, litigation-related costs, and other items, in each case, that are unrelated to our core ongoing business operations. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA for a period by revenue for the same period.

Current wording

Adjusted EBITDA adjusts for the impact of items that we do not consider indicative of the operational performance of our business. We define Adjusted EBITDA as net income (loss) excluding income tax provision (benefit); interest expense, net; depreciation and amortization; stock-based compensation expense; transaction-related costs; gain (loss) in fair value of warrant liability; and severance expense, litigation-related costs, and other items, in each case, that are unrelated to our core ongoing business operations. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA for a period by revenue for the same period.

Previous wording

Our results of operations and financial condition have been, and will continue to be, affected by a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as amended.

Current wording

Our results of operations and financial condition have been, and will continue to be, affected by a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section titled“Risk Factors” included under Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2023, as amended.

Previous wording

We acquire new users through investments in generating brand awareness as well as through word of mouth from existing users and others. We convert these users to Paying Users by offering premium features that increase the probability of developing meaningful connections, improve the user experience, and provide more control over the experience. For the three months ended March 31, 2024 and 2023, our Average Paying Users were 1,011 thousand and 866 thousand, respectively, representing an increase of 16.7% period-over-period. We grow Paying Users by acquiring new users and converting new and existing users to purchasers of one of our subscription plans and/or our add-on offerings. As we scale and our community grows larger, we are able to facilitate more meaningful interactions as a result of the wider selection of potential connections. This in turn increases our product value and can increase conversion to one of our paid products. Our revenue growth depends on growth in Paying Users. While we believe we are in the early days of our opportunity, at some point we may face challenges increasing our Paying Users, including competition from alternative products and services and lower adoption of certain product features.

Current wording

We acquire new users through investments in generating brand awareness as well as through word of mouth. We convert these users to Paying Users by offering premium features that increase the probability of developing meaningful connections, improve the user experience and provide more control over the experience, and the ability to have an ad-free experience. We had over 1,056 thousand and 1,033 thousand Average Paying Users for the three and six months ended June 30, 2024, respectively, representing period-over-period growth of 13.7% and 15.0% as compared to the three-month and six-month periods in 2023, respectively. We grow Paying Users by acquiring new users and converting new and existing users to purchasers of one of our subscription plans and/or our premium add-on offerings. As we scale and our community grows larger, we are able to facilitate more meaningful interactions as a result of the wider selection of potential connections. This in turn increases our product value and can increase conversion to one of our paid products. Our revenue growth depends on growth in Paying Users. While we believe we are in the early days of our opportunity, at some point we may face challenges increasing our Paying Users, including competition from alternative products and services and lower adoption of certain product features.

Previous wording

We continually work to develop new monetization features and improve existing features in order to increase adoption of premium add-ons and our subscription programs. Many variables will impact our ARPPU, including the number of Average Paying Users, paid product mix, the Paying Users geographic, and the revenue generated from subscription versus add-on revenue. Our pricing is in local currency and may vary between markets. As foreign currency exchange rates change, foreign currency exchange risk related to transactions carried out in a currency other than the U.S. dollar could negatively impact revenue and distort year-over-year comparability of operating results. To the extent our ARPPU growth slows, our revenue growth will become increasingly dependent on our ability to increase our Average Paying Users.

Current wording

We continually work to develop new monetization features and improve existing features in order to increase adoption of premium add-ons and our subscription programs. Many variables will impact our ARPPU, including paid product mix, the Paying Users geography, and the revenue generated from subscription versus premium add-on revenue. Our pricing is in local currency and may vary between markets. As foreign currency exchange rates change, foreign currency exchange risk related to transactions carried out in a currency other than the U.S. dollar could negatively impact revenue and distort year-over-year comparability of operating results. To the extent our ARPPU growth slows, our revenue growth will become increasingly dependent on our ability to increase our Average Paying Users.

Previous wording

Key investment areas for us include increasing headcount to rebuild our team, enhancing our platform and the value we provide our users by harnessing artificial intelligence and machine learning, which we refer to as AI/ML, along with prioritizing security and privacy, and improving matching capabilities for successful connections.

Current wording

Key investment areas for us include increasing headcount to rebuild our team. Additionally, we are investing in areas that will enhance our platform and the value we provide our users, which includes introducing new products, improving pricing and packaging, and localizing our products in international markets. We will also harness artificial intelligence and machine learning, which we refer to as AI/ML, along with prioritizing security and privacy, and improving matching capabilities for successful connections.

Previous wording

Our business relies on our ability to attract and retain talent, including, but not limited to, engineers, data scientists, product designers and product managers. As of March 31, 2024, we had 129 employees globally, 119 of which were full-time employees. We believe that many people want to work at a company committed to creating a world that is fair, equal, and just for the global LGBTQ community and that aligns with their personal values, and therefore our ability to recruit and retain talent is aided by our mission and brand reputation. We compete for talent within the technology industry.

Current wording

Our business relies on our ability to attract and retain talent, including, but not limited to, engineers, data scientists, product designers and product managers. As of June 30, 2024, we had 146 employees globally, 140 of which were full-time employees. We believe that many people want to work at a company committed to creating a world that is fair, equal, and just for the global LGBTQ community and that aligns with their personal values, and therefore our ability to recruit and retain talent is aided by our mission and brand reputation. We compete for talent within the technology industry.

Previous wording

The Grindr platform has MAUs in over 190 countries and territories. Our international revenue represents 42.4% and 40.4% of total revenue for the three months ended March 31, 2024 and 2023, respectively. We vary our pricing to align with relative value to local purchasing power and competitors. Our international business typically earns revenue in local currencies. In addition, some of the platforms we work with utilize internally generated foreign exchange rates that may differ from other foreign exchange rates, which could impact our results of operations.

Current wording

The Grindr platform has MAUs in over 190 countries and territories. Our international revenue represents 41.9% and 42.1% of total revenue for the three and six months ended June 30, 2024, respectively, and 41.3% and 40.8% of total revenue for the three and six months ended June 30, 2023, respectively. We vary our pricing to align with relative value to local purchasing power and competitors. Our international revenues are typically earned in local currencies. In addition, some of the platforms we work with utilize internally generated foreign exchange rates that may differ from other foreign exchange rates, which could impact our results of operations.

Previous wording

Direct Revenue. Direct revenue is reported gross of fees for subscriptions and premium add-ons as we are the primary party obligated in our transactions with customers, and we act as the principal. Our subscription revenues are generated through the sale of subscriptions that are currently offered or renewed in one-week, one-month, three-month, six-month and twelve-month periods. Subscribers pay in advance through third-party platforms, including Apple, Google Play, and Stripe, according to our terms and conditions. Subscription revenues, net of taxes and chargebacks, are recognized ratably over the term of the subscription. Premium add-on revenue is generated through the sale of an add-on feature on a pay-per-use, or a-la-carte, basis. Premium features are activated upon purchase and are available for a short duration, generally, within one day. Revenue from premium add-ons is recognized upon purchase of the premium add-on. Direct revenue is recorded net of taxes, credits, and chargebacks. Customers pay in advance, primarily through mobile app stores, and, subject to certain conditions identified in the Company’s terms and conditions, generally all purchases are final and nonrefundable.

Current wording

Direct Revenue. Direct revenue is reported gross of distribution fees for subscriptions and premium add-ons as we are the primary party obligated in our transactions with customers, and we act as the principal. Our subscription revenue is generated through the sale of subscriptions that are currently offered or renewed in one-week, one-month, three-month, six-month and twelve-month periods. Subscribers pay in advance through third-party platforms, including Apple, Google Play, and Stripe, according to our terms and conditions. Subscription revenues, net of taxes and chargebacks, are recognized ratably over the term of the subscription. Premium add-on revenue is generated through the sale of an add-on feature on a pay-per-use, or a-la-carte, basis. Premium features are activated upon purchase and are available for a short duration, generally, within one day. Revenue from premium add-ons is recognized upon purchase of the premium add-on. Direct revenue is recorded net of taxes, credits, and chargebacks. Customers pay in advance, primarily through mobile app stores, and, subject to certain conditions identified in the Company’s terms and conditions, generally all purchases are final and nonrefundable.

Previous wording

Indirect Revenue. Indirect revenue primarily consists of revenue generated by third parties who pay us to advertise to our users. Our advertising operations provide advertisers with the opportunity to target and directly reach our community, a group with significant global purchasing power and economic potential. We have attracted advertisers from a diverse array of industries, including healthcare, entertainment, gaming, travel, entertainment, and consumer goods. We offer a diverse range of advertising opportunities to advertisers, such as in-app banners, full-screen interstitials, and other customized units, typically on a CPM basis. We also contract with a variety of third-party ad platforms to market and sell a portion of our digital and mobile advertising inventory on the Grindr platform. In those cases, the Company does not have discretion to set pricing in its arrangements because it receives a percentage of the amount the third-party ad platform charges the advertiser and it does not have a contractual relationship with the advertiser. Accordingly, the Company recognizes revenue related to third-party ad platforms on a net basis.

Current wording

Indirect Revenue. Indirect revenue primarily consists of revenue generated by third parties who pay us to advertise to our users. Our advertising operations provide advertisers with the opportunity to target and directly reach our community, a group with significant global purchasing power and economic potential. We have attracted advertisers from a diverse array of industries, including healthcare, entertainment, gaming, travel, entertainment, and consumer goods. We offer a diverse range of advertising opportunities to advertisers, such as in-app banners, full-screen interstitials, and other customized units, typically on a CPM basis. We also contract with a variety of third-party advertising platforms to market and sell a portion of our advertising inventory on the Grindr platform. In those cases, we do not have discretion to set pricing in its arrangements because we receive a percentage of the amount the third-party ad platform charges the advertiser and we do not have a contractual relationship with the advertiser. Accordingly, we recognize revenue related to third-party ad platforms on a net basis.

Previous wording

Product development expense. Product development expense consists primarily of employee-related and contractor costs for personnel engaged in the design, development, testing, enhancement of product offerings and related technology, as well as related software costs.

Current wording

Product development expense. Product development expense consists primarily of employee-related and contractor costs for personnel engaged in the design, development, testing, enhancement of product offerings, related technology, and related software costs.

Previous wording

Depreciation and Amortization. Depreciation is primarily related to computers, equipment, furniture, fixtures, and leasehold improvements. Amortization is primarily related to capitalized software, acquired definite-lived intangible assets (customer relationships, technology, etc.).

Current wording

Depreciation and Amortization. Depreciation is primarily related to computers, equipment, and leasehold improvements. Amortization is primarily related to capitalized software, acquired definite-lived intangible assets (customer relationships, technology, etc.).

Previous wording

Loss in fair value of warrant liability. Loss in fair value of warrant liability represents the change in fair value of our public and private warrants. As the private warrants are substantially similar to the public warrants, the warrants are remeasured from the publicly traded quotes from the active market.

Current wording

(Loss) gain in fair value of warrant liability. (Loss) gain in fair value of warrant liability represents the change in fair value of our public and private warrants. As the private warrants are substantially similar to the public warrants, all of the warrants are remeasured from the publicly traded quotes from the active market.

Previous wording

Income tax provision represents the income tax expense associated with our operations based on the tax laws of the jurisdictions in which we operate. Our effective tax rates will vary depending on changes in the valuation of our deferred tax assets and liabilities, fluctuations in permanent differences, and changes in tax laws.

Current wording

Income tax provision (benefit) represents the income tax expense associated with our operations based on the tax laws of the jurisdictions in which we operate. Our effective tax rates will vary depending on changes in the valuation of our deferred tax assets and liabilities, fluctuations in permanent differences, and changes in tax laws.

Previous wording

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

Current wording

Three and Six Months Ended June 30, 2024 Compared to Three and Six Months Ended June 30, 2023

Previous wording

Revenue for the three months ended March 31, 2024 and 2023 was $75.3 million and $55.8 million, respectively. The $19.5 million increase, or 34.9%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, was primarily driven by an increase in direct revenue of $16.3 million, or 33.9%, from $48.1 million to $64.4 million. The increase in direct revenue was driven by the period-over-period increases in both ARPPU of $2.73 and Average Paying Users of 145 thousand, largely as a result of rolling out Weeklies, our weekly XTRA subscription offering, to all of our users worldwide, as well as of the continued growth of MAUs. Weeklies gave our users a lower priced option for XTRA product with a shorter duration. ARPPU increased by 14.7%, or $2.73, to $21.25 for the three months ended March 31, 2024, from $18.52 for the three months ended March 31, 2023. Our ARPPU increased mainly as a result of improved product mix with subscription products with higher average monthly price and an increase in the price of Boost, which enables a user to boost their profile to the top of the cascade. We expect ARPPU to fluctuate in the near-term as we continue to test different subscription options across different price points and focus on generating more Paying Users. For the three months ended March 31, 2024, Average Paying Users increased by 145 thousand, from 866 thousand for the three months ended March 31, 2023, to 1,011 thousand for the three months ended March 31, 2024. Average Paying Users increased year-over-year driven by the launch of our Weeklies XTRA subscription. The increase in Indirect Revenue of $3.3 million, or 42.9%, from $7.7 million for the three months ended March 31, 2023, to $11.0 million for the three months ended March 31, 2024, was primarily driven by an increase in banner and interstitial supply.

Current wording

For the three months ended June 30, 2024 and 2023, direct revenue was $69.9 million and $53.2 million, respectively. The increase in direct revenue of $16.7 million, or 31.4% was driven by the year-over-year increases in ARPPU of $3.00 and in Average Paying Users of 127 thousand. Year-over-year growth for both ARPPU and Averaging Paying Users is largely a result of rolling out Weeklies, our weekly XTRA and weekly Unlimited subscription offerings, to all of our users worldwide, as well as a result of the continued MAU growth. Weekly XTRA was introduced late in the second quarter of 2023 and weekly Unlimited was introduced late in the first quarter of 2024. Introducing our shorter duration Weeklies products gave our users lower priced options for both XTRA and Unlimited subscriptions. ARPPU increased by 15.7%, or $3.00, to $22.08 for the three months ended June 30, 2024, from $19.08 for the three months ended June 30, 2023. Our ARPPU increased as a result of improved product mix with higher revenue generated by subscription products with higher average monthly price. We expect ARPPU to fluctuate in the near-term as we continue to test different subscription options across different price points and focus on generating more Paying Users. For the three months ended June 30, 2024, Average Paying Users increased by 127 thousand, from 929 thousand for the three months ended June 30, 2023, to 1,056 thousand for the three months ended June 30, 2024.

Previous wording

Revenue from North America increased by $10.7 million, or 30.7%, for the three months ended March 31, 2024, to $45.5 million as compared to $34.8 million for the three months ended March 31, 2023. During this same period, revenue from Europe increased by $5.5 million, or 43.6%, to $18.1 million in the three months ended March 31, 2024, as compared to $12.6 million in the three months ended March 31, 2023. Revenue from the remainder of the world increased by

Current wording

Revenue from North America increased by $12.2 million, or 32.2%, for the three months ended June 30, 2024, to $50.1 million as compared to $37.9 million for the three months ended June 30, 2023. During this same period, revenue from Europe increased by $5.2 million, or 35.6%, to $19.7 million in the three months ended June 30, 2024, as compared to $14.5 million in the three months ended June 30, 2023. Revenue from the remainder of the world increased by $3.4 million, or 37.7%, to $12.5 million in the three months ended June 30, 2024, as compared to $9.1 million in the three months ended June 30, 2023.

Previous wording

Cost of revenue for the three months ended March 31, 2024 and 2023, was $19.6 million and $14.8 million, respectively. The $4.8 million increase, or 32.4%, was primarily due to growth in distribution fees of $3.8 million (consistent with direct revenue growth), and increased infrastructure costs of $1.0 million.

Current wording

Cost of revenue for the three months ended June 30, 2024 and 2023, was $21.0 million and $16.1 million, respectively. The $4.9 million increase, or 30.4%, was primarily due to growth in distribution fees of $3.9 million (consistent with direct revenue growth), and increased infrastructure costs of $1.2 million.

Previous wording

Product development expense for the three months ended March 31, 2024 and 2023, was $5.7 million and $5.5 million, respectively. There was a $1.7 million increase in contractor fees to support the engineering function after the RTO Plan. This was partially offset by a $1.5 million decline in salaries and employee expenses from lower headcount.

Current wording

Product development expense for the six months ended June 30, 2024 and 2023, was $13.5 million and $11.7 million, respectively. The $1.8 million increase, or 15.4% was primarily related to a $3.0 million increase in contractor fees to support the engineering function while scaling the size of our team back to early 2023 levels. This was partially offset by a $1.8 million decline in personnel related expenses due to lower headcount.

Previous wording

Depreciation and amortization for the three months ended March 31, 2024 and 2023, was $4.1 million and $8.0 million, respectively. The $3.9 million decrease, or 48.8%, was primarily due to acquired intangibles amortization from an acquisition in June 2020. There was a $3.1 million decrease due to technology intangibles that had a three-year useful life which were fully amortized in the second quarter of 2023, and a $1.1 million decrease due to customer relationship intangibles that were amortized under an accelerated amortization schedule, with higher amounts expensed in 2023.

Current wording

Depreciation and amortization for the three months ended June 30, 2024 and 2023, was $4.2 million and $8.1 million, respectively. The $3.9 million decrease, or 48.1%, was primarily due to acquired intangibles amortization from an acquisition in June 2020. There was a $2.3 million decrease due to technology intangibles that had a three-year useful life which were fully amortized in the second quarter of 2023, and a $1.1 million decrease due to customer relationship intangibles that were amortized under an accelerated amortization schedule, with higher amounts expensed in 2023.

Previous wording

Interest expense, net for the three months ended March 31, 2024 and 2023, was $7.2 million and $10.8 million, respectively. The $3.6 million decrease, or 33.3%, was primarily due to lower debt balances and lower interest rates under the 2023 Credit Agreement entered into in November 2023.

Current wording

Interest expense, net for the three months ended June 30, 2024 and 2023, was $6.7 million and $12.9 million, respectively. The $6.2 million decrease, or 48.1%, was primarily due to lower debt balances and lower interest rates under the 2023 Credit Agreement entered into in November 2023.

Previous wording

Other (expense), income, net for the three months ended March 31, 2024 and 2023, was expense of $0.1 million and income of $0.1 million, respectively.

Current wording

Other (expense), income, net for the three months ended June 30, 2024 and 2023, was expense of $0.2 million and income of $0.2 million, respectively.

Previous wording

Loss in fair value of warrant liability represents the change in the fair value ofcertain private placement warrants, public warrants and warrants originally issued to certain equity holders of Legacy Grindr (collectively, the “Warrants”)between measurement dates. The Warrants remained unexercised and were remeasured to fair value of $86.3 million as of March 31, 2024, because of the increase in our public warrant price as compared to December 31, 2023, resulting in a loss of $18.7 million for the three months ended March 31, 2024.

Current wording

(Loss) gain in fair value of warrant liability represents the change in the fair value of our public and private warrants (the “Warrants”) between each reporting period. The Warrants remained unexercised and were remeasured to fair value of $121.4 million as of June 30, 2024, because of the increase in our public warrant price, resulting in a loss for the three and six months ended June 30, 2024 of $35.1 million and $53.8 million, respectively. For the three and six months ended June 30, 2023, we recognized a gain of $7.1 million and a loss of $8.2 million, respectively, related to the change in our public warrant price between reporting periods.

Previous wording

Net loss for the three months ended March 31, 2024 and 2023 was $9.4 million and $32.9 million, respectively. Net loss decreased by $23.5 million mainly due to an increase in revenue and decrease in income tax provision as discussed above.

Current wording

Net loss for the six months ended June 30, 2024 and 2023 was $31.8 million and $10.6 million, respectively. Net loss decreased by $21.2 million is mainly due to $45.6 million increase in loss in fair value of warrant liability, and a $6.1 million increase in income tax provision; partially offset by a $21.3 million increase in income from operations and a $9.8 million decrease in interest expense, as discussed above.

Previous wording

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use Adjusted EBITDA and Adjusted EBITDA margin, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may differ from similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP.

Current wording

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use Adjusted EBITDA, Adjusted EBITDA margin, free cash flow, and free cash flow conversion as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may differ from similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP.

Previous wording

(1)See “—Non-GAAP Financial Measures” below for additional information and a reconciliation of net loss to Adjusted EBITDA and Adjusted EBITDA Margin.

Current wording

Adjusted EBITDA and Adjusted EBITDA Margin

Previous wording

Adjusted EBITDA adjusts for the impact of items that we do not consider indicative of the operational performance of our business. We define Adjusted EBITDA as net income (loss) excluding income tax provision; interest expense, net; depreciation and amortization; stock-based compensation expense; transaction-related costs; gain (loss) in fair value of warrant liability; and severance expense, litigation-related costs, and other items, in each case, that are unrelated to our core ongoing business operations. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA for a period by revenue for the same period.

Current wording

Adjusted EBITDA adjusts for the impact of items that we do not consider indicative of the operational performance of our business. We define Adjusted EBITDA as net income (loss) excluding income tax provision (benefit); interest expense, net; depreciation and amortization; stock-based compensation expense; transaction-related costs; gain (loss) in fair value of warrant liability; and severance expense, litigation-related costs, and other items, in each case, that are unrelated to our core ongoing business operations. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA for a period by revenue for the same period.

Previous wording

(3)Change in fair value of warrant liability relates to the Warrants that were remeasured as of March 31, 2024, due to the increase in our public warrant price since December 31, 2023.

Current wording

(3)Change in fair value of warrant liability relates to the Warrants that were remeasured as of June 30, 2024 and 2023.