Grindr Inc

Previous 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.

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 14.6 million Average MAUs and 1,111 thousand Average Paying Users for the three months ended September 30, 2024, as compared to 13.5 million Average MAUs and 962 thousand Average Paying Users for the three months ended September 30, 2023. We had 14.1 million Average MAUs and 1,057 thousand Average Paying Users for the nine months ended September 30, 2024, as compared to 13.1 million Average MAUs and 919 thousand Average Paying Users for the nine months ended September 30, 2023.

Previous 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.

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 86.1% and 85.5% of total revenue for the three and nine months ended September 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 GBTQ 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 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.

Current wording

In addition to our revenue generated from subscription fees and premium add-ons, we also generate indirect revenue, representing 13.9% and 14.5% of total revenue for the three and nine months ended September 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 advertising platforms to market and sell digital advertising inventory available on the Grindr platform. We will continue to evaluate opportunities to increase advertising inventory by both enhancing and differentiating our advertising offerings in addition to scaling our advertising volume.

Previous 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.

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 84.8% and 85.2% of our total revenues for the nine months ended September 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

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.

Current wording

We had 1,111 thousand and 962 thousand Average Paying User, respectively, for the three months ended September 30, 2024, and 2023, and we had 1,057 thousand and 919 thousand Average Paying Users, respectively, for the nine months ended September 30, 2024, and 2023, representing period-over-period growth of 15.5% and 15.0% as compared to the corresponding three-month and nine-month periods in 2023, respectively.

Previous wording

On average, profiles on our platform sent 476.5 million and 330.8 million daily messages for the three months ended June 30, 2024, and 2023, respectively, and 421.8 million and 324.3 million daily messages for the six months ended June 30, 2024, and 2023, respectively.

Current wording

On average, profiles on our platform sent 416.6 million and 339.1 million daily messages for the three months ended September 30, 2024, and 2023, respectively, and 420.1 million and 329.3 million daily messages for the nine months ended September 30, 2024, and 2023, respectively.

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 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 classifications of our employees. CWA subsequently filed several unfair labor practice charges against us with the NLRB, including a request for injunctive relief under Sec. 10(j) of the National Labor Relations Act. Regarding the election petition, the NLRB conducted a secret mail-ballot election and held partial vote counts in November and December 2023. As of the date of filing of this Quarterly Report on Form 10-Q, the NLRB has not completed tallying all the votes from the election as there are numerous outstanding challenged ballots. On November 1, 2024, the local regional office of NLRB issued a complaint on the unfair labor practice charges, which is scheduled for a hearing in March 2025. This complaint is the first step in the administrative process and is not a finding of any wrongdoing, nor is it a decision or ruling of the NLRB.

Previous 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.

Current wording

•Net income of $24.7 million and net loss of $0.4 million, respectively. This resulted in a net income margin of 27.6% and a net loss margin of 0.6%, respectively. The increase for the three months ended September 30, 2024, compared to the three months ended September 30, 2023 was $25.1 million.

Previous 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.

Current wording

•Adjusted EBITDA of $40.1 million and $32.6 million, respectively. This resulted in an Adjusted EBITDA margin of 44.9% and 46.4%, respectively. The Adjusted EBITDA increase for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was $7.5 million, or 23.0%. See “—Non-GAAP Financial Measures” below for more details on the calculations and reconciliations.

Previous wording

•Net loss of $31.8 million and $10.6 million, respectively. This resulted in a net loss margin of 20.2% and 9.0%, respectively. The net loss increase for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was $21.3 million, or 201.2%.

Current wording

•Net loss of $7.1 million and $11.0 million, respectively. This resulted in a net loss margin of 2.9% and 5.9%, respectively. The net loss increase for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was $3.9 million, or 35.0%.

Previous wording

•Adjusted EBITDA of $68.6 million and $48.9 million, respectively. This resulted in an Adjusted EBITDA margin of 43.5% and 41.7%, respectively. The Adjusted EBITDA increase for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was $19.7 million, or 40.3%. See“—Non-GAAP Financial Measures”below for more details on the calculations and reconciliations.

Current wording

•Adjusted EBITDA of $108.7 million and $81.5 million, respectively. This resulted in an Adjusted EBITDA margin of 44.0% and 43.4%, respectively. The Adjusted EBITDA increase for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was $27.2 million, or 33.4%. See“—Non-GAAP Financial Measures”below for more details on the calculations and reconciliations.

Previous wording

On May 9, 2022, Grindr, Tiga Acquisition Corp. (“Tiga”) and Tiga Merger Sub LLC, a Delaware limited liability company and direct and wholly-owned subsidiary of Tiga (“Merger Sub I”) entered into that certain Agreement and Plan of Merger (the “Original Merger Agreement”), as amended by that certain First Amendment to Agreement and Plan of Merger, dated as of October 5, 2022, by and among Grindr, Tiga, Merger Sub I and Tiga Merger Sub II LLC, a Delaware limited liability company and direct and wholly-owned subsidiary of Tiga (“Merger Sub II”) (together with the Original Merger Agreement, the “Merger Agreement”) pursuant to which Grindr was merged with and into Merger Sub I, with Grindr as the surviving entity and a wholly owned subsidiary of Tiga (the “First Merger”), and promptly afterwards and as part of the same overall transaction as the First Merger, the merger of such surviving company with and into Merger Sub II, with Merger Sub II being the surviving entity and a wholly owned subsidiary of Tiga (the “Second Merger”), in accordance with the terms and conditions of the Merger Agreement. The transaction was completed on November 18, 2022 (the “Business Combination”). Grindr was deemed the accounting predecessor and the combined entity is the successor registrant with the Securities and Exchange Commission (“SEC”), meaning that Grindr’s condensed consolidated financial statements for previous periods will be disclosed in Grindr’s future periodic reports filed with the SEC.

Current wording

Grindr as the surviving entity and a wholly owned subsidiary of Tiga (the “First Merger”), and promptly afterwards and as part of the same overall transaction as the First Merger, the merger of such surviving company with and into Merger Sub II, with Merger Sub II being the surviving entity and a wholly owned subsidiary of Tiga (the “Second Merger”), in accordance with the terms and conditions of the Merger Agreement. The transaction was completed on November 18, 2022 (the “Business Combination”). Grindr was deemed the accounting predecessor and the combined entity is the successor registrant with the Securities and Exchange Commission (“SEC”), meaning that Grindr’s condensed consolidated financial statements for previous periods will be disclosed in Grindr’s future periodic reports filed with the SEC.

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 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.

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 Boost, Roam™, and Right Now. By introducing subscription and premium add-on offerings, we continue to increase our Average Paying Users. For the three and nine months ended September 30, 2024, our Direct Revenue accounted for 86.1% and 85.5% of our total revenue, respectively. For the three and nine months ended September 30, 2023, our Direct Revenue accounted for 87.6% and 86.8% of our total revenue, respectively.

Previous 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.

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 GBTQ 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 nine months ended September 30, 2024, our Indirect Revenue accounted for 13.9% and 14.5% of our total revenue, respectively. For the three and nine months ended September 30, 2023, our Indirect Revenue accounted for 12.4% and 13.2% of our total revenue, respectively.

Previous 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.

Current wording

We acquire new users through word of mouth as well as through investing in generating brand awareness and affinity. We convert these users to Paying Users by offering premium features that increase the probability of developing meaningful connections, improve the user experience, offer greater control over the experience, and provide the ability to have an ad-free experience. We had 1,111 thousand and 1,057 thousand Average Paying Users for the three and nine months ended September 30, 2024, respectively, representing period-over-period growth of 15.5% and 15.0% as compared to the three-month and nine-month periods in 2023, respectively. We grow Paying Users by 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 addition to the continuous offering of premium features, 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 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.

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 geographic location of Paying Users, 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 fluctuate, transactions carried out in foreign currencies 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. 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.

Current wording

Key investment areas for us include continuing to expand and enhance our team as well as enhancing our platform and increasing the value we provide our users. Part of our efforts are focused on introducing new products, improving pricing and packaging, and localizing our products in international markets. We are also 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.

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 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.

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 September 30, 2024, we had 148 employees globally, 144 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

In 2023 our leadership team announced a transition to a hybrid work model involving a multi-phase return-to-office plan (“RTO Plan”) beginning in the fall of 2023. Our hybrid work model requires employees to work two days per week in offices where their respective teams are based. The RTO Plan provided employees with a one-time relocation package to support relocation if necessary, or separation packages for employees who chose not to relocate or participate in our RTO Plan. The RTO Plan has temporarily resulted in lower headcount resulting in a higher reliance on contractors and other services, higher severance expenses in 2023, and lower people related costs. During 2024 and 2025, we plan to scale the size of our team while supplementing our immediate capacity and product development needs with embedded contractors, particularly in supporting our engineering function.

Current wording

In 2023 our leadership team announced a transition to a hybrid work model involving a multi-phase return-to-office plan (“RTO Plan”) beginning in the fall of 2023. Our hybrid work model requires employees to work two days per week in offices where their respective teams are based. The RTO Plan provided employees with a one-time relocation package to support relocation if necessary, or separation packages for employees who chose not to relocate or participate in our RTO Plan. The RTO Plan has temporarily resulted in lower headcount, resulting in a higher reliance on contractors and other services, higher severance expenses in 2023, and lower people related costs. During 2024 and 2025, we are expanding and enhancing our team while selectively supplementing immediate capacity and product development needs with contractors, particularly in supporting our engineering function.

Previous 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.

Current wording

The Grindr platform has MAUs in over 190 countries and territories. Our international revenue represents 43.1% and 42.5% of total revenue for the three and nine months ended September 30, 2024, respectively, and 42.4% and 41.5% of total revenue for the three and nine months ended September 30, 2023, respectively. We vary our pricing to align with relative value to local purchasing power and competitors while also maximizing our monetization opportunities. Our international revenue is typically earned in local currencies. In addition, the mobile app 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

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.

Current wording

Indirect Revenue. Indirect revenue primarily consists of revenue generated by third parties who pay us to advertise to our users. We provide advertisers with the opportunity to target and directly reach the GBTQ community, a group with significant global purchasing power and economic potential. We have attracted advertisers from a diverse array of industries, including healthcare, 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. Revenue from advertising transactions with advertising service providers is recognized net of the amounts retained by the advertising service provider as we do not know and expect not to know the gross amount paid by advertisers.

Previous wording

Cost of revenue. Cost of revenue consists primarily of the distribution fees we pay to Apple and Google, infrastructure costs associated with supporting the Grindr platform, which stem largely from our use of Amazon Web Services, and costs associated with content moderation, which involve ensuring that users are complying with our community standards.

Current wording

Cost of revenue. Cost of revenue consists primarily of the distribution fees we pay to Apple and Google Play, infrastructure costs associated with supporting the Grindr platform, which stem largely from our use of Amazon Web Services, and costs associated with content moderation, which involve ensuring that users are complying with our community standards.

Previous wording

Selling, general and administrative expenses. Selling, general and administrative expenses consists primarily of compensation and other employee-related costs, professional fees, sales and marketing expenditures, and general administrative expenses, including facilities, insurance, and information technology and infrastructure support. We plan to continue efforts to attract new users, retain existing users and increase monetization of both our new and existing users, which may result in increased sales and marketing expenses in future periods.

Current wording

Selling, general and administrative expenses. Selling, general and administrative expenses consists primarily of compensation and other employee-related costs, professional fees, sales and marketing expenditures, and general and administrative expenses, including facilities, insurance, and information technology support. We plan to continue efforts to attract new users, retain existing users and increase monetization of both our new and existing users, which may result in increased sales and marketing expenses in future periods.

Previous wording

Other (expense) income, net. Other (expense) income, net consists of realized and unrealized exchange rate gains or losses.

Current wording

Other income (expense), net. Other income (expense), net consists of realized and unrealized exchange rate gains or losses.

Previous 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.

Current wording

Gain (loss) in fair value of warrant liability. Gain (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, all of the warrants are remeasured from the publicly traded quotes from the active market.

Previous 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.

Current 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.

Previous wording

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

Current wording

Three and Nine Months Ended September 30, 2024, Compared to Three and Nine Months Ended September 30, 2023

Previous 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.

Current wording

For the three months ended September 30, 2024 and 2023, direct revenue was $76.9 million and $61.6 million, respectively. The increase in direct revenue of $15.3 million, or 24.8%, was driven by year-over-year increases in ARPPU of $1.74 and in Average Paying Users of 149 thousand. Year-over-year growth for both ARPPU and Averaging Paying Users is a result of (i) higher conversion of free to paid users as more users responded favorably to shorter duration subscription offerings through the roll out of our weekly Unlimited subscription offerings to all of our users worldwide, (ii) the launch of various packaging and marketing initiatives intended to drive conversation, and (iii) continued MAU growth. Weekly Unlimited was introduced late in the first quarter of 2024, giving our users a second lower priced option in addition to the weekly XTRA subscription. ARPPU increased by 8.2%, or $1.74, to $23.07 for the three months ended September 30, 2024, from $21.33 for the three months ended September 30, 2023. Our ARPPU increased as a result of improved product mix, with higher revenue generated by subscription products with higher average monthly-equivalent price, such as weekly Unlimited. 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 September 30, 2024, Average Paying Users increased by 149 thousand, from 962 thousand for the three months ended September 30, 2023, to 1,111 thousand for the three months ended September 30, 2024.

Previous wording

For the six months ended June 30, 2024 and 2023, indirect revenue was $23.4 million and $16.0 million, respectively. The increase in indirect revenue of $7.4 million, or 46.3% was primarily driven by growth in revenue from third-party advertising platforms.

Current wording

For the three months ended September 30, 2024 and 2023, indirect revenue was $12.4 million and $8.7 million, respectively. The increase in indirect revenue of $3.7 million, or 42.5%, was primarily driven by growth in revenue from interstitial advertising from our third-party advertising platforms as new partners were added and use of interstitial advertising continued, as well as growth in direct brand sales as the number of direct brand advertisers on the platform grew.

Previous 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.

Current wording

Revenue from North America increased by $10.8 million, or 25.3%, for the three months ended September 30, 2024, to $53.3 million as compared to $42.6 million for the three months ended September 30, 2023. During this same period, revenue from Europe increased by $5.4 million, or 30.8%, to $22.8 million in the three months ended September 30, 2024, as compared to $17.4 million in the three months ended September 30, 2023. Revenue from the remainder of the world increased by $2.9 million, or 28.6%, to $13.2 million in the three months ended September 30, 2024, as compared to $10.3 million in the three months ended September 30, 2023.

Previous wording

For the six months ended June 30, 2024 and 2023, direct revenue was $134.3 million and $101.3 million, respectively. The increase in direct revenue of $33.0 million, or 32.6% was driven by the year-over-year increase in ARPPU of $2.86 and in Average Paying Users of 135 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 15.2%, or $2.86, to $21.67 for the six months ended June 30, 2024, from $18.81 for the six months ended June 30, 2023. Our ARPPU increased mainly as a result of improved product mix with higher revenue from 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 six months ended June 30, 2024, Average Paying Users increased by 135 thousand, from 898 thousand for the six months ended June 30, 2023, to 1,033 thousand for the six months ended June 30, 2024.

Current wording

For the nine months ended September 30, 2024 and 2023, direct revenue was $211.2 million and $162.9 million, respectively. The increase in direct revenue of $48.3 million, or 29.7% was driven by the year-over-year increase in ARPPU of $2.51 and in Average Paying Users of 138 thousand. Year-over-year growth for both ARPPU and Averaging Paying Users is largely a result of rolling out our weekly XTRA and weekly Unlimited subscription offerings (“Weeklies”), to all of our users worldwide, the launch of various packaging and marketing initiatives to drive conversion, as well as a result of 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 12.7%, or $2.51, to $22.20 for the nine months ended September 30, 2024, from $19.69 for the nine months ended September 30, 2023. Our ARPPU increased mainly as a result of improved product mix with higher revenue from 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 nine months ended September 30, 2024, Average Paying Users increased by 138 thousand, from 919 thousand for the nine months ended September 30, 2023, to 1,057 thousand for the nine months ended September 30, 2024.

Previous wording

For the three months ended June 30, 2024 and 2023, indirect revenue was $12.4 million and $8.4 million, respectively. The increase in indirect revenue of $4.0 million, or 47.6% was primarily driven by growth in revenue from third-party advertising platforms.

Current wording

For the nine months ended September 30, 2024 and 2023, indirect revenue was $35.8 million and $24.7 million, respectively. The increase in indirect revenue of $11.1 million, or 44.9% was primarily driven by growth in revenue from third-party advertising platforms.

Previous wording

Revenue from North America increased by $22.9 million, or 31.5%, for the six months ended June 30, 2024, to $95.6 million as compared to $72.7 million for the six months ended June 30, 2023. During this same period, revenue from Europe increased by $10.7 million, or 39.3%, to $37.8 million in the six months ended June 30, 2024, as compared to $27.1 million in the six months ended June 30, 2023. Revenue from the remainder of the world increased by $6.8 million, or 38.7%, to $24.3 million in the six months ended June 30, 2024, as compared to $17.5 million in the six months ended June 30, 2023.

Current wording

Revenue from North America increased by $33.7 million, or 29.2%, for the nine months ended September 30, 2024, to $148.9 million as compared to $115.3 million for the nine months ended September 30, 2023. During this same period, revenue from Europe increased by $16.0 million, or 36.0%, to $60.6 million in the nine months ended September 30, 2024, as compared to $44.6 million in the nine months ended September 30, 2023. Revenue from the remainder of the world increased by $9.7 million, or 35.0%, to $37.5 million in the nine months ended September 30, 2024, as compared to $27.8 million in the nine months ended September 30, 2023.

Previous 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.

Current wording

Cost of revenue for the three months ended September 30, 2024 and 2023, was $22.9 million and $18.2 million, respectively. The $4.7 million increase, or 25.8%, was primarily due to growth in app store distribution fees of $3.2 million (consistent with direct revenue growth), and increased infrastructure costs of $1.4 million.

Previous wording

Cost of revenue for the six months ended June 30, 2024 and 2023, was $40.6 million and $30.9 million, respectively. The $9.7 million increase, or 31.4%, was primarily due to growth in distribution fees of $7.8 million (consistent with direct revenue growth), and increased infrastructure costs of $2.2 million.

Current wording

Cost of revenue for the nine months ended September 30, 2024 and 2023, was $63.5 million and $49.2 million, respectively. The $14.3 million increase, or 29.1%, was primarily due to growth in app store distribution fees of $11.0 million (consistent with direct revenue growth), and increased infrastructure costs of $3.6 million.

Previous wording

Selling, general and administrative expense for the six months ended June 30, 2024 and 2023, was $51.4 million and $36.1 million, respectively. The $15.3 million increase, or 42.4%, was primarily due to higher personnel related expenses of $11.1 million, including an increase of $8.2 million in stock-based compensation expense, primarily related to executive incentive awards, and an increase of $2.9 million in employee compensation. There is also an increase of $2.5 million in contractor expenses to support scaling the size of our team back to early 2023 levels and an increase of $2.3 million in marketing expenses.

Current wording

Selling, general and administrative expense for the three months ended September 30, 2024 and 2023, was $25.0 million and $16.4 million, respectively. The $8.6 million increase, or 52.4%, was primarily due to higher personnel related expenses of $6.0 million, including an increase of $2.2 million in stock-based compensation expense, primarily related to executive incentive awards, and an increase of $3.8 million in employee compensation. There was also an increase of $1.4 million in marketing expenses.

Previous wording

Selling, general and administrative expense for the three months ended June 30, 2024 and 2023, was $24.8 million and $17.2 million, respectively. The $7.6 million increase, or 44.2%, was primarily due to higher personnel related expenses of $6.8 million, including an increase of $3.9 million in stock-based compensation expense, primarily related to executive incentive awards, and an increase of $2.2 million in employee compensation. There is also an increase of $1.3 million in marketing expenses, and an increase of $0.7 million in contractor expenses to support scaling the size of our team back to early 2023 levels.

Current wording

Selling, general and administrative expense for the nine months ended September 30, 2024 and 2023, was $76.4 million and $52.5 million, respectively. The $23.9 million increase, or 45.5%, was primarily due to higher personnel related expenses of $17.1 million, including an increase of $10.4 million in stock-based compensation expense, primarily related to executive incentive awards, and an increase of $6.7 million in employee compensation. There was also an increase of $3.0 million in contractor expenses to support scaling our team and an increase of $3.8 million in marketing expenses.

Previous wording

Product development expense for the three months ended June 30, 2024 and 2023, was $7.8 million and $6.2 million, respectively. The $1.6 million increase, or 25.8% is primarily related to a $1.7 million increase in contractor fees to support the engineering function while scaling the size of our team back to early 2023 levels.

Current wording

Product development expense for the three months ended September 30, 2024 and 2023, was $8.8 million and $13.3 million, respectively. The $4.5 million decrease, or 33.8% is primarily related to a $5.9 million decrease in personnel-related expenses, primarily driven by $6.5 million of severance expense incurred during the three months ended September 30, 2023 related to the RTO Plan. This decrease is partially offset by a $1.7 million increase in contractor fees to support the engineering function while scaling the size of our team.

Previous 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.

Current wording

Product development expense for the nine months ended September 30, 2024 and 2023, was $22.3 million and $25.0 million, respectively. The $2.7 million decrease, or 10.8% was primarily related to a $7.7 million decline in personnel-related expenses primarily driven by $7.5 million of severance expense incurred during the nine months ended September 30, 2023 related to our RTO Plan. This decrease was partially offset by $4.7 million increase in contractor fees to support the engineering function while scaling the size of our team.

Previous 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.

Current wording

Depreciation and amortization for the three months ended September 30, 2024 and 2023, was $4.2 million and $5.8 million, respectively. The $1.6 million decrease, or 27.6%, was primarily due to acquired intangibles amortization from an acquisition in June 2020. There was a $1.1 million decrease due to customer relationship intangibles that were amortized under an accelerated amortization schedule, with higher amounts expensed in 2023.