As Grindr continues to expand its offerings in a bid to become known as a more all-purpose LGBTQ+ dating app, Monday’s earnings report could give the newly public company some reasons for optimism around its strategy.
It marks the first time Grindr has reported quarterly earnings as a public company, as it made its debut via SPAC in November. The 13-year-old company made an impressive initial showing, with shares more than doubling throughout that first trading day. But dating apps aren’t only a pain point for some consumers—they can be hard to get investors to buy in on. The stock has since tumbled along with the broader market; shares are now down double digits from its first market close.
The drop doesn’t worry CEO George Arison, who took over the helm in October. “The market in general has been very weird, right?” Arison tells Fast Company in an exclusive interview. “My focus has been on ensuring that we execute really well and build credibility with our investors, new investors and the Street broadly.”
As the team of about 200 total employees continues to develop more offerings in the app and show its growth potential, Arison believes the stock price “will take care of itself.”
For the full year of 2023, Grindr expects its revenue to gain 25%. A lot of the growth likely hinges on its product roadmap. As with most dating apps, Grindr operates on a “freemium” model. Some users pay subscription fees, some pay for one off perks, and many don’t pay at all. Grindr is hoping it can convert those non-paying users to either paid or partly paid offerings with new features. The company shipped a number of features in 2022, and it expects to grow its à la carte offerings this year. It helps that Grindr recently introduced a testing system so it can experiment more.
Grindr closed out 2022 near the top of its guidance, growing revenue 34% year-over-year to $195 million. Monthly average users jumped to roughly 12 million, up from about 11 million from the year prior. At the same time, paying users grew to 873,000 from 703,000.
Arison says the company is also looking at launching a lower subscription tier, which currently starts at $19.99 per month. “There are users who want more things from Grindr and are probably willing to pay a higher price for that,” he adds. “Improving our monetization by optimizing pricing segments better is something that we’re going to spend quite a bit of time on this year.” Arison also hinted at a large product announcement later in the year, but declined to share more.
Dating apps across the sector have been experimenting with different monetization efforts and adding to their product offerings, with the hopes that consumers will hand over their cash to find love. Still, some investors haven’t been convinced of the long-term prospects. Shares of Match Group, which owns Tinder, OkCupid, and Hinge, are down about 55% in the past year. Bumble has gained in the past year, but is down more than 70% from when it started trading February 2021.
Arison took over Grindr in September after having founded Shift, an online marketplace for cars, and Taxi Magic, now Curb. The company was already on its way to a public listing, but it was Arison’s job to ensure it stayed nimble and build up investor confidence. The company has come under fire in the past over concerns regarding its privacy and data practices, as well as its impacts on user safety and mental health.
Arison, quick to acknowledge those critiques, has said he hopes that by going public, Grindr will be able to shift public perception by showing that it is accountable. “Some negatives are going to take time to solve,” he adds.
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