Grindr (US:GRND)2023-08-14 21:13Financial Performance - For the three months ended June 30, 2023, Grindr generated revenue of $61.5 million, a 32.0% increase from $46.6 million in the same period of 2022[119]. - Adjusted EBITDA for the three months ended June 30, 2023, was $26.9 million, reflecting a 25.2% increase from $21.5 million in the same period of 2022[127]. - The net income for the three months ended June 30, 2023, was $22.3 million, a significant increase of 618.6% from a net loss of $4.3 million in 2022[127]. - Revenue for the three months ended June 30, 2023, was $61.5 million, a 32% increase from $46.6 million in Q2 2022[185]. - Net income for Q2 2023 was $22.3 million, a $26.6 million increase compared to a net loss of $4.3 million in Q2 2022[181]. - Adjusted EBITDA for Q2 2023 was $26.9 million, up from $21.5 million in Q2 2022, with an Adjusted EBITDA margin of 43.7%[185]. User Metrics - The number of Paying Users increased to approximately 929 thousand for the three months ended June 30, 2023, representing a growth of 21.5% compared to 765 thousand in 2022[132]. - Grindr's Monthly Active Users (MAUs) reached approximately 13.1 million for the three months ended June 30, 2023, compared to 12.2 million in the same period of 2022[132]. - For the six months ended June 30, 2023, the company reported approximately 898 thousand Paying Users, a 20.7% increase from 744 thousand in the same period of 2022[139]. - Paying Users increased by 164 thousand, from approximately 765 thousand to approximately 929 thousand for the three months ended June 30, 2023[161]. Revenue Streams - Grindr's Direct Revenue accounted for 86.4% of total revenue for the three months ended June 30, 2023, up from 83.2% in the same period of 2022[130]. - The company generates revenue from two streams: Direct Revenue from user subscriptions and premium add-ons, and Indirect Revenue from third-party advertising[148]. - Indirect Revenue for the three months ended June 30, 2023, was $8.4 million, an increase from $7.8 million in the same period of 2022[133]. - International revenues accounted for 41.3% of total revenue for the three months ended June 30, 2023, up from 37.8% in the same period of 2022[147]. Cost and Expenses - Total operating expenses for the three months ended June 30, 2023, were $47.6 million, a decrease from $48.6 million in the same period of 2022[168]. - Cost of revenue for the three months ended June 30, 2023, was $16.1 million, a 33.1% increase from $12.1 million in the same period of 2022[166]. - Selling, general and administrative expenses for the three months ended June 30, 2023, decreased by 25.9% to $17.2 million from $23.2 million in the same period of 2022[168]. - Product development expenses for the three months ended June 30, 2023, increased by 47.6% to $6.2 million from $4.2 million in the same period of 2022[170]. Cash Flow and Investments - Grindr's net cash provided by operating activities for the three months ended June 30, 2023, was $63.7 million, compared to $14.0 million in the same period of 2022[133]. - Net cash provided by operating activities for the six months ended June 30, 2023, was $14.8 million, down from $27.8 million in the same period of 2022[189]. - Cash and cash equivalents as of June 30, 2023, were $23.5 million, a decrease from $26.9 million at the end of June 2022[189]. - Net cash used in investing activities for the six months ended June 30, 2023, was $2.6 million, primarily for capitalized software[193]. - The company expects to increase capital investments over time to enhance its platform and product offerings[194]. Debt and Financing - As of June 30, 2023, the company had a total debt of approximately $197.9 million, with various repayment schedules[202]. - The company may seek additional funds through equity or debt financing to support future activities if existing cash flows are insufficient[198]. - The Initial Term Loans require a premium on voluntary and mandatory prepayments until June 10, 2024, and November 14, 2024, for the remaining loans[208]. - The applicable margin for index rate loans is currently 7.0%, while for the Supplemental Term Loan II, it is 3.2%[209]. - The total leverage ratio must not exceed 4.50:1.00 until May 17, 2024, if any Supplemental Term Loan II is outstanding[210]. - As of June 30, 2023, the company was in compliance with the financial covenants under the Credit Agreement[210]. - A default interest rate of an additional 2.0% per annum will apply on all outstanding obligations after an event of default[211]. Strategic Goals - The company aims to expand its user base and revenues by introducing new products and services in untapped geographic regions[121]. - The company aims to increase ARPPU through new monetization features and improved existing features, with ARPPU being influenced by product mix and geographic mix[141]. - The company is focused on expanding its platform globally, which includes entering new markets and investing in under-penetrated markets[140]. - The company plans to continue expanding sales and marketing efforts to attract new users and increase monetization[153]. - The company is investing in machine learning capabilities and features that prioritize security and privacy to drive long-term profitability[142]. Employee Metrics - The company had 174 full-time employees as of June 30, 2023, with approximately 62.0% working in engineering and product development[143]. Accounting and Compliance - The company has not made material changes to its critical accounting estimates since the last Annual Report[215]. - The company is classified as a smaller reporting company and is not required to provide extensive market risk disclosures[218]. - There are no significant off-balance sheet arrangements reported by the company[213].