Q4 2024 Grindr Inc Earnings Call

Before earnings conference call.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you.

Speaker Change: I'd now like to turn the conference over to total audiophile trainers head of Investor Relations. Please go ahead.

Speaker Change: Thank you moderator Hello, and welcome to the Grinder earnings call for the fourth quarter and full year 2020 for today's call will be led by grinder CEO, George Aronson CFO van in France.

Speaker Change: They will make a few brief remarks, and then we'll open it up for questions. Please.

Please note <unk> released its shareholder letter. This afternoon and this is available on the SEC website, and grinders investor page at investors <unk> grinder Dot com.

Speaker Change: Before we begin I will remind everyone that during this call we may discuss our outlook and future performance.

Speaker Change: These forward looking statements may be preceded by words, such as we expect we believe we anticipate or similar such statements. These.

Speaker Change: These statements are subject to risks and uncertainties and actual results could differ materially from the views expressed today.

Speaker Change: Some of these risks have been set forth in our earnings release and our periodic reports filed with the SEC. During today's call. We will also present, both GAAP and non-GAAP financial measures additional disclosures regarding non-GAAP measures, including a reconciliation of GAAP to non-GAAP measures are included in the earnings release, we issued today, which has been posted on the investor.

Speaker Change: <unk> page of <unk> website, and in <unk> filings with the SEC.

George Aronson: With that I'll turn it over to George.

George Aronson: Thank you total and Hello, Hi, very much appreciate everyone, who is joining us today.

George Aronson: 2002 important was a landmark vehicle greiner.

We grew full year revenue, 33% year over year to $345 million 10 percentage points higher than the initial guidance. We provided on our Q4 call last March.

George Aronson: And our adjusted EBITDA margin was 43% three percentage points higher than initial guidance.

George Aronson: These results were driven by a relentless focus on user experience.

George Aronson: <unk> to delivering great products and the continued expansion of our advertising business.

George Aronson: <unk> continues to have incredible engagement with you.

George Aronson: In 2024, they sent more than 130 billion chance.

George Aronson: We had more than 2 billion albums.

George Aronson: Spend more than 70 minutes on average on the other day.

Speaker Change: When <unk> went public in November 2022, we faced certain hurdles from pipelines ownership, such a significant technical debt and a need for a long term vision and a team to deliver on our ambitious goals.

George Aronson: Today.

George Aronson: As discussed in greater detail in our shareholder letter those challenges are largely behind us.

George Aronson: I'm, especially proud of our SaaS moving.

George Aronson: Performance, driven culture, which has enabled us to chart a clear path for long term component growth as the global cable have in your pocket, we have a robust product roadmap obey iqos experiences are uses are.

George Aronson: Continuously delivering excellent financial results.

George Aronson: Our strong momentum through 2024 is continuing into 2021.

George Aronson: In January we released our first annual Goldman shaped by user input.

George Aronson: On products, we laid out last summer at Investor Day.

George Aronson: In February we do not want cleaning up our balance sheet and here in March we are announcing our first share repurchase program for up to $500 million.

George Aronson: A lot of shares.

George Aronson: The buyback program underscores the board and management's confidence in <unk> long term potential and affirms our commitment to returning excess capital to shareholders.

George Aronson: Also today, we are laying out a strong initial guidance for 2025, and Savannah will provide along with our focus on four key priorities first rapid lift with the new product because we elevated grinder pump.

George Aronson: We.

George Aronson: We expect to use to appreciate new products, such as a list for you and discovery.

George Aronson: These and many other products, we're working on will allow us to maintain strong product led growth in the years to come.

George Aronson: Second strengthening our global brand by actively promoting that a global understanding of who we are and what we stand for Borgwarner created content and brief the full possibilities of the global Gayborhood twice.

George Aronson: Executing on our neighborhood expansion by launching our first product outside of the core App and the health and wellness space.

George Aronson: The test beta launch in limited markets is expected to start in the coming months.

George Aronson: And fourth further increasing talent density to execute on our ambitious plans.

George Aronson: A great confidence in our team's ability to continue to drive strong shareholder value through outstanding execution on the needs of our users.

George Aronson: I'm proud of the foundation that we built in the 30 months since I became CEO and enthusiastic for what lies ahead.

Speaker Change: As always we greatly appreciate the support of our shareholders and user community and closing I would encourage you to read the shareholder letter for greater detail on the points I discussed Niall.

Speaker Change: Now I'll turn it over to Dana who will speak to our financial results, one redemption and share buyback plan and wait until and provide 2002.

Dana: 25 guidance.

Dana: Thank you George and Hello, everyone I'll walk you through our fourth quarter and full year results providing.

Dana: Provide an update on our completed warrant redemption, and Rachel a announced share repurchase program before sharing our guidance.

Dana: As George highlighted 2024 was a phenomenal year for <unk> with revenue growing 33% to $345 million for the full year.

Dana: And we achieved 43% adjusted EBITDA margin first of all as $147 million.

Dana: Our strong performance was driven by merchandising new and existing features in our core subscription tiers. We also optimized paywall and a foundational products, while continuing to maintain excellent engagement.

Dana: These enhancements increased our conversion rates of users from free to paid.

Dana: [noise] grinders advertising business had a fantastic year growing 56% year over year.

Speaker Change: Our refreshed go forward strategy developed under the experienced new leader we brought in last spring has driven growth in both third party advertising and the direct advertising business.

Speaker Change: We are in the early stages of enhancing our AD tech, which offer new AD formats and increase <unk> over time.

Speaker Change: All business Kpis grew again in 2024.

Speaker Change: Average monthly active users increased 7% over the prior year to $14 2 million.

Speaker Change: Average paying users increased 15% over the prior year to $1 1 million, bringing payer penetration to seven 6% for the year.

Speaker Change: And our average direct revenue per paying user increased 12% over the prior year to $22 and 53 sites.

Speaker Change: Turning to the fourth quarter revenue was $98 million up 35% year over year from $72 million. That's comprised 80 million indirect revenue, which was up 28% year over year and $18 million of indirect revenue, which was up 85% year over year.

Speaker Change: As a reminder, our advertising business benefited from a large direct brand campaign in Q4 that significantly outperformed expectations in December.

Speaker Change: Adjusted EBITDA for the quarter was $39 million with a 40% margin strong even when we executed on some of the planned investments late in the year.

Turning to our balance sheet, we ended the year with $59 2 million in cash and cash equivalents and our gross leverage ratio of two <unk> based on our full year adjusted EBITDA, which reflects a reduction of $51 million in leverage pay down during the year.

Speaker Change: As we've reported early in the new year, we executed a redemption of outstanding warrants associated with our go public transaction.

Speaker Change: The redemption was completed last week and out of the $37 4 million outstanding warrants eligible for redemption.

Speaker Change: Total of $36 8 million warrants were exercised.

Speaker Change: This includes $9 5 million warrants exercised on a cashless basis at an exchange ratio of 0.3 6 million shares per warrant, resulting in the issuance of $3 4 million shares.

Speaker Change: And $27 3 million warrants cash exercised resulting in the issuance of 27 3 million shares and generating $314 million in cash proceeds to the company.

Speaker Change: Our pro forma cash balance as of December 31, 2024, after giving effect to the net proceeds from the warrant redemption stood at approximately $370 million.

Speaker Change: This was a significant financial milestone for the company that simplifies our capital structure and enables grinder to move forward with our capital allocation planning as we initially discussed at our Investor Day last June.

Speaker Change: In keeping with that plan you've seen today that our board of directors has authorized a two year stock repurchase program of up to $500 million of our common stock.

Speaker Change: The program signals, our confidence in the Companys strong performance now and into the future.

Speaker Change: Now, let's turn to our guidance for 2025.

Speaker Change: As a reminder, we set our annual guidance in March and updated as appropriate on a quarterly basis as we move through the year.

Speaker Change: Our initial 2025 guidance calls for revenue growth of greater than 24%.

Speaker Change: And an adjusted EBITDA margin of 41% or greater.

Speaker Change: Our expectation for another strong year of growth and profitability.

Speaker Change: As we've always said we set our initial guidance based on what we have a clear line of sight to for the year and we'll keep you posted.

Speaker Change: Overall, we are excited about our momentum entering into 2025 and the opportunities that we have on tap.

Speaker Change: And with that operator, we'll now take questions.

Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session. At this time I would like to remind everyone to ask a question press the star button, probably the number one on your telephone keypad. If you would like to withdraw your question. Please press star one again one moment. Please for your first question.

Andrew Merrick: Your first question comes from the line of Andrew Merrick Raymond James. Please go ahead.

Andrew Merrick: Alright, Thanks for taking my questions I wanted to start on products. So obviously very strong execution. So far in the January roadmap, what's really encouraging we've seen everything either on track or ahead of expectations versus the Investor Day. I guess my question is what are the surprise factors in those intervening six to nine months was it a little bit of <unk>.

Andrew Merrick: Services are embedded in the Investor day, but what is it maybe a little bit easier going really trough as you started doing.

Andrew Merrick: These products thanks.

Andrew Merrick: Hi, Andrew good to talk to you and Hello, everybody.

Andrew Merrick: I think the company is a young company so that recently went public.

Andrew Merrick: And we are working on a lot of things as everybody knows and we also went through a pretty significant change in the team that we have.

Andrew Merrick: 75% of people, who are what they are going to now.

Andrew Merrick: Since I joined.

Andrew Merrick: And we've been really focused on driving productivity levels to be seasonally higher as one example that we gave in the shareholder letter we are seeing three times as many chickens and get hub on a monthly basis per engineer.

Andrew Merrick: So today I would say in 2024 versus what we were seeing in 2022. So there is no question that our productivity has gone up which has allowed us to ship dramatically more stuff and work on a lot more things and I think that's something that we as a company are really products. So a significant set of things that we've added to the product roadmap came from our ability to be able to.

Andrew Merrick: Build more things as a result of us being a lot more productive.

Andrew Merrick: That's awesome. We also have added it seems in Colombia in the last year of dedicated engineers and they are also very helpful in additive and our ability to ship more things.

Andrew Merrick: And then the other.

Andrew Merrick: Thing here is that as we learn more about how you react to certain products and how they engage with them we come up with additional things that are more responsive to their needs concurrently with.

Jenny: By Jenny I in Virginia, I can do.

Jenny: To take advantage of that as well in product development. So that is also helping and are believed to.

Jenny: Deploy more product one of the things you'll see this year is that a lot of the funds. We're building will be using our <unk> technology as a backbone.

Jenny: And obviously.

Jenny: Some of the Big movement first and launch it quickly way ahead of schedule is making that possible and so we're excited about that as well.

Jenny: Yeah.

Speaker Change: Really helpful color. Thank you and maybe one more quick one if I could on the share repurchase program, so $500 million figures not a small number but one piece of feedback we've heard from investors recently I was kind of the challenges around liquidity and float and things like that so I guess, how do you balance your ability to buyback shares and the contracts are still having it.

Jenny: Appreciable amount of your shares held in private hands. Thank you.

Jenny: I appreciate the question.

Jenny: To realize that for some people, but Florida is a topic.

Jenny: We also can say that from the time when we went public to today the float has doubled.

Jenny: And so there's a lot more float available now and whenever I was asking about the float in 2022 early 'twenty three I would try to say that it would take care of itself and I think it has been able to take care of itself in that sense.

Jenny: At the same time I think the fact that we do have these long term holders who are.

Jenny: Frankly in some respect a doubling down on the company one of them exercised all of his warrants in cash and that's a pretty significant increase in his financial stake in the company and the amount of cash that he's put into supporting Brian I think that signals something very strong.

Jenny: But our job is to ensure that we invest in the business and set it up for growth and then be return the excess capital beyond what is necessary for that to shareholders and we're doing that so I think our shareholders that I'm at least spoke you spoken to have been very happy about us having a clear capital allocation strategy.

Jenny: We've been asked about that quite a bit and we're now coming back with the answer on what that is and how we're going to deploy it so.

Jenny: My General sense is the float will take care of itself over the long term.

Jenny: Much appreciate it thank you.

John Blackledge: Your next question comes from the line of John Blackledge with PD Cowen. Please go ahead.

John Blackledge: Oh, great. Thanks, two questions first on the 25 revenue outlook given.

John Blackledge: Given the 24% or greater revenue growth guide for 2025, how should we think about the mix of kind of paying user growth and <unk> growth and given where kind of a little over two months into the first quarter any any color on how <unk> is trending would be great and then I have a follow up after that.

John Blackledge: Sure. Thanks for the question. So let me just put the guidance in a bit of perspective as you know we guide to what we have line of sight too and we update the guidance as we learn more throughout the year and we have a very robust product roadmap that we shared in June and we refreshed one in January so you know as that testing reaches statistical significance.

John Blackledge: We'll certainly update you.

John Blackledge: As you know our business model are really if we outperform that revenue tends to flow directly to the bottom line with respect to <unk> and a mix of new pair growth I'd say that we have a lot of new features and those features we have been showing over the last couple of years that hour.

John Blackledge: Conversion rates from free to paid have been going up in a steady steady perspective, I think we expect that to continue so and.

So you should see some pair growth this year as well as our two if you think about international versus domestic both levers are moving nicely. So.

John Blackledge: I would say probably more of the same quite frankly and just as a reminder, we are guiding to 100 basis points higher than our original guidance last year at 24% revenue growth and 42% EBIT margin really at the top end of our ranges that we gave out sorry, 42% of <unk>.

John Blackledge: EBITDA margin.

And those are really on the top ranges of what we gave out in our June Investor day, So we're pretty happy with what we're showing so far.

John Blackledge: So I think that addresses both of those questions and just to be specific on the number there is 24% of our higher revenue growth and 41% or higher.

John Blackledge: EBITDA for the year.

John Blackledge: The only color I would.

John Blackledge: I'd like to add just a little bit on that says.

John Blackledge: We are still again in very early stages of monetizing this product and our approach is to create a lot of new features and products for people and prove out to drive monetization.

John Blackledge: What's going to happen this year and especially next year is that a lot of our paying tier clears a ballpark figure to you they're going to have a lot of new features added to them, which would be creating a lot of value to users and there was a real argument on kind of what how much of a how do we is that right because it would justify an amount of value for 40 bucks or is that value that we're now.

Given them worth more and that's something we're going to have to learn about over the coming say 24 months and at the same time in the free product. We're also creating a lot about them right. Now is a huge addition to the product that's going to be really beneficial to people.

John Blackledge: And we are having really great results from that in the two test markets.

John Blackledge: 95% of our Wow are using right now every week, which is one of the fantastic and frankly higher than we would have expected. So the intention based methodology is working really well and so as you do that over time, we believe that you can drive more people to start paying for the product because they're seeing so much.

John Blackledge: Yeah.

John Blackledge: Given them.

John Blackledge: That's super helpful and just a follow up on the margin.

Speaker Change: Like you said, 41% or greater margin just any further color on kind of key investment areas in 2025 would be would be helpful. Thank you.

Speaker Change: Sure So with respect to investment as you know we have a very robust product roadmap and a fairly lean team. So you'll see us to continue to add head count in these key areas of technology.

Speaker Change: And data science.

Speaker Change: As you can see the product roadmap is is getting more and more sophisticated with respect to AI, we've been really leaning into it so think about it in those kinds of dimensions.

Speaker Change: Okay. Thank you.

Speaker Change: Your next question comes from the line of Eric Sheridan with Goldman Sachs. Please go ahead.

Eric Sheridan: Thanks, so much for taking my questions and thanks for all the details in the shareholder letter.

Speaker Change: Big Picture question, maybe for George George We get asked a lot by investors with so much product and platform innovation ahead of you as a company over the next couple of years, how do you think about what signals you're looking for just sort of accelerate the pace of innovation or to move things from beta into wider expansion across the platform, but just philosophically.

Speaker Change: Lay out sort of your management's view about what youll be watching for and what we should be sort of analyzing the outside look again, if you could possibly even speed up the rate of innovation and are based on the comments on the advertising business I wanted to ask one quick follow up just how much in terms of the AD Tech stack of the positioning of the business and the marketplace is now behind.

Speaker Change: And you as opposed to ahead of you and it really is just about execution and sort of closing.

Speaker Change: It.

Speaker Change: Just sort of marketplace view on the advertising business.

Speaker Change: Looking at revenue.

Speaker Change: On the execution side as opposed to more of the built in bauxite. Thank you so much.

Speaker Change: Yes, so I'll take the first question and then it will probably take the second.

Speaker Change: We are building a lot of things and no question and I will be proud of the team's ability to do that just the speed at which we are shipping now.

Speaker Change: Not comparable to what we're doing before some days early this year, we would sit down to have product updates and I'd highlight three or four of them a day and then my head would be a little bit spilling because I'm like Wow them and we're working on so many really cool things and a lot of anything there like way ahead of even most much larger companies in terms of how they're deploying.

Speaker Change: The test and what kind of type of their deployment, which is really awesome. So for right now I don't think we want to add many more things to the list of things, we're working on and shipping.

Speaker Change: And the really big thing for us will be getting that out into the market getting you the feedback for them.

Speaker Change: And then making.

Speaker Change: Making changes as needed if those things are necessary.

Speaker Change: And then putting them back onto the market with those things in place.

Speaker Change: No matter how much do you ask users at a survey hey, do you want to exit or you unwind.

Frankly people oftentimes respond one way into a survey in another way when the product is live and so I think having a real product out.

Speaker Change: A minimum viable product ways is really critical and that's generally our approach and then we can add more features to it.

Speaker Change: Overtime.

Speaker Change: Those kinds of things we track when we do that is obviously a usage rate for example for right now with.

Speaker Change: A quarter of our weekly active users and Washington D C. Using it that's a really positive signal for getting a deployed to many more users.

Speaker Change: It's also just the quality of the product.

Speaker Change: Initially when you have a minimum viable product and not everything that the users want in the product and so understanding that hey, like if you had X Y Z feature that would be really helpful is something that we are.

Speaker Change: Always looking for as a data point and then thirdly, I think with so many new things happening at the same time, we don't want to release those things all at once you want to release things for them to settle in for people starting to engaging and using them and then release more and so some of this stuff will simply be driven by the fact that we don't want to put out every.

In all at ones out into the market.

Speaker Change: My General view is.

Speaker Change: The core things inside granite today that are working really really well, we don't want to touch so the grid for example.

Speaker Change: That is the kind of core of grinder, we don't want to touch that we'd want to make that different.

Speaker Change: Did add to it.

Speaker Change: Our ability to recommend some additional uses 2% below the first 100 that I see that's been a very popular feature and so that is one change that we made to the grid, but beyond that we're not going to be starting with let's change a lot of stuff on the grid and will answer the first launch a discover tab, which will be a separate new space in the App, where you will have people present.

Speaker Change: <unk> not by geography, but rather by like what are you finding them interesting and potentially later on then finding new interesting and in that space. We will have an opportunity to do a lot more experimentation around how do we help you with discovery and what kind of people. We show you based on either insurance or.

Speaker Change: Other things that you tell us about yourself.

Speaker Change: And so that will give us another opportunity to have much better experimentation and the platform without really any risk for the core product and how we experiment with it I.

Speaker Change: I hope that answers the question and I'll, let Dan talk about advertising and I'm happy to come back more to this a telephone.

Eric Sheridan: Hi, Eric.

Dan: Yes, 2024, it was a great year for advertising both on the third party advertising side and on the brand side you saw a nice little bump in Q4, which was really part of the outperformance.

Dan: We bought in a new experienced leader and he's he's really doubled down on advancing the AD tech to allow us to generate these higher CPM as we introduce native ads and rewarded video. We believe there continues to be significant room in addressing both volume domestically and internationally as well as higher.

Dan: CPM is with this elevated AD tech spin.

Dan: Specifically on your question of how much is behind us versus ahead of US I would say that we still have a long way to go on advancing our AD tax is still a long way ahead of us, but we're really pleased with our performance to date and continue to be comfortable in achieving the target of 15% of our total revenue coming from advertising.

Dan: Revenue where.

Dan: Where we are right now in AD Tech.

Dan: Really appreciate it thanks for sexual the detail.

Speaker Change: Your next question comes from the line of Samuel Lawrence of <unk> Capital. Please go ahead.

Samuel Lawrence: Great. Thanks.

Speaker Change: So some pretty fantastic results.

Samuel Lawrence: Firstly.

Samuel Lawrence: <unk> features on the roadmap around the core product so it'd be great to have some examples of how users are using the off in different ways and how youre thinking about the long long term potential.

Samuel Lawrence: Some features and functionality around these edge cases as you drive towards division is becoming.

Speaker Change: Saddam community platform for gay man.

Samuel Lawrence: Yeah.

Samuel Lawrence: Thanks, Sam that's a great question. So we do have a lot of ideas for how to kind of service that use it and the way that they want and also in the way that the culture and society is moving forward.

Samuel Lawrence: On the second point, we recently did a survey on last year and one of the really interesting data points with bond was.

Samuel Lawrence: 50% of people 35, and under and people being gay in <unk> because of the survey of 1400 gained by men in United States want to be in a long term relationship at some point in their life, which is a much higher number than I think you would have gone from gave men say 20 or 25 years ago.

Samuel Lawrence: And especially kind of in that younger cohort and then secondly, 25% of those same 35 or under our respondents said that they wanted to have children, which is an exponential behind them, but like what is the amount of a high number then I think you would have seen previously and so as we know what users want and as we think through what users want in the future based on what they're telling.

Samuel Lawrence: It is imperative for us to be building features that respond to that and so <unk> actually is a good example of how we're thinking of introducing features into the product without really fundamentally changing the product.

Samuel Lawrence: We're going to as I described earlier to launch a.

Samuel Lawrence: Discover tab.

Samuel Lawrence: And that will be a place where you will see people from all over the world based on things that we infer about you or we infer about them.

Samuel Lawrence: Obviously, all with user consent, we just went through a lengthy process of getting us a consent to use AI to where the product in the late rates of response were very very high in the positive which is fantastic.

Samuel Lawrence: And.

Samuel Lawrence: Within that then you could easily see a world where we build an additional feature that shows you people not just based on pure interest, but actually what I'm seeing data because they're having to create a totally new space for leading we can use something that we are already building to allow a person to see.

Samuel Lawrence: Set of people that are interesting for them from the <unk> perspective, and then.

Samuel Lawrence: Step beyond that would be okay, not just that they are interesting to you from a data perspective, but actually.

Samuel Lawrence: Based on what we know about them, it's more like because they would also like you. So then the quality of people that we're showing you is very very high rate because either like highly qualified people and a former data perspective that are really interesting both from your perspective and from their perspective, our view and we think that is a great user experience and a lot of value without having to.

Speaker Change: Right like a totally new space where that happens.

Samuel Lawrence: And then at the same time.

Samuel Lawrence: It's also something that probably ultimately should be something we charge significant amount of money for because of the value that we're creating and that is so significant because ultimately our job is to facilitate as good of a connection as possible and so that's just an example of how we think through that I think Thats why building wing man is so important.

Samuel Lawrence: Because that technology can allow us to do a lot more of these shortcuts around how we build product without really disrupting the oven and that's something that is very useful for us.

Samuel Lawrence: I do want to as I mentioned, we do want to go back to the previous question on what can we accelerate so one thing I did not talk about is the gayborhood initiatives.

Samuel Lawrence: We obviously you've talked about that invested in and we think those are huge opportunities for quanta to build.

Samuel Lawrence: And this is on top of the core blend of business that are very appealing to our users.

Samuel Lawrence: Are going to be launching the first one this year in beta.

Samuel Lawrence: And really excited about that so if there is an area, where we might see acceleration and beyond all of the things that we're already building would be in the neighborhood initiatives because those will be dealt with.

Samuel Lawrence: We could speed up.

Samuel Lawrence: There is a limit to how many people can do at once but certainly we do think that with more right resources and right is it really imperative term there we could accelerate some of those things faster and we're definitely working on that.

Samuel Lawrence: Maybe one more from me please.

Samuel Lawrence: Clearly very early in this journey and have a ton of opportunities.

Speaker Change: But on the other side you remain pretty late laser focus on maintaining high efficiency within the company because you've made me. This is Scott how are you.

Samuel Lawrence: Were thinking and looking to manage that.

Speaker Change: Yeah.

Speaker Change: Look we've gone through a lot of change as an organization as I mentioned earlier was 75% of the team has been hired.

Speaker Change: Since I became CEO so.

Speaker Change: In some ways. That's one of the helpful. Because they've been hired with a clear understanding of the culture that we have and we do have a very high performance driven hard charging for euro and accountability culture, and and one that we want people to obviously joined but they need to be on board with what their joining our culture is not for everybody, but for people who.

Speaker Change: Who want to be in a culture that excels and constantly strives to ask more of people by unleashing that potential and allowing them to grow and improve as.

Speaker Change: And the employees and as professionals and this is a really great culture to be and Additionally, it's also how we comp our compensation is very much performance focused and I think people really appreciate that.

Speaker Change: So we're in a really good place in that regard, where we are but we want to continue improving our talent density and that is why talent that said he is one of our key priorities for next year.

Speaker Change: Where I believe we have a really big opportunity is actually at the middle layer.

Speaker Change: Below kind of my immediate executive team.

Speaker Change: The next layer of managers, we definitely needed as additional ones on the team.

Speaker Change: My team has been fueling that pretty strongly because they've oftentimes had to do both their day to day role and also the role of somebody below them that they would normally be playing.

Speaker Change: We are going to be adding a few folks lifetime to the team across many different.

Speaker Change: <unk> and product finance engineering, and others and Thats coming soon we're not going to probably do a press release about it but I think people will only can see some of these folks come on board and that'll be a really good addition, and once we have those people then we can more easily think about adding additional people to the team because there'll be more.

Speaker Change: What kind of folks who could provide the right management oversight and performance driven culture to the rest of the team. So I would expect us to continue to invest in the team. We added a significant number of employees last year, we're going to add a significant number of employees this year as well, while maintaining a very lean organization and whatnot.

Speaker Change: We're doing.

Speaker Change: A lot of revenue per employee, which I think to be something we are very proud of them.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Alright, so I think thats the questions for today really appreciate everyone's time.

Speaker Change: This week already we spent two days at the Morgan Stanley and JMP.

Speaker Change: Conferences and had to fireside chat and really appreciated the incredible level of investor engagement that we got.

Speaker Change: It did not.

Speaker Change: Realize you could fit that many people into some of these small hotel rooms at the meetings I usually in as we had in a few of our our meetings. It was really a lot of fun.

Speaker Change: And so.

Speaker Change: It's great to be out there talking to folks and telling them the story.

Speaker Change: Awesome, what we're doing is in all the potential that we have so.

Speaker Change: So it isn't really a beautiful day in the neighborhood and look forward to speaking to everybody soon.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen that concludes your conference call. We thank you for participating and ask you to please disconnect your lines.

Operator: Grindr Q4 and full year 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. Thank you. I would now like to turn the conference over to Tolu Adeofe, Grindr's Head of Investor Relations. Please go ahead.

Tolu Adeofe: Thank you, moderator. Hello and welcome to the Grindr Earnings Call for the Q4 and full year 2024. Today's call will be led by Grindr's CEO, George Arison, and CFO, Vanna Krantz. They will make a few brief remarks and then we'll open it up for questions. Please note, Grindr released its shareholder letter this afternoon, and this is available on the SEC's website and Grindr's investor page at investors.grindr.com. Before we begin, I will remind everyone that during this call we may discuss our outlook and future performance. These forward-looking statements may be preceded by words such as "we expect," "we believe," "we anticipate," or similar such statements. These statements are subject to risks and uncertainties, and our actual results could differ materially from the views expressed today. Some of these risks have been set forth in our earnings release and our periodic reports filed with the SEC.

Tolu Adeofe: During today's call, we will also present both GAAP and non-GAAP financial measures. Additional disclosures regarding non-GAAP measures, including a reconciliation of GAAP to non-GAAP measures, are included in the earnings release we issued today, which has been posted on the investor relations page of Grindr's website and in Grindr's filings with the SEC. With that, I'll turn it over to George.

George Arison: Thank you, Tolu. Hello. I very much appreciate everyone who is joining us today. 2024 was a landmark year for Grindr. We grew full-year revenue 33% year over year to $345 million, 10 percentage points higher than the initial guidance we provided on our Q4 call last March. Our adjusted EBITDA margin was 43%, 3 percentage points higher than our initial guidance. These results were driven by a relentless focus on user experience, our commitment to delivering great products, and the continued expansion of our advertising business. Users continue to have incredible engagement with the app. In 2024, they sent more than 130 billion chats, shared more than 2 billion albums, and spent more than 70 minutes on average on the app a day.

George Arison: When Grindr went public in November 2022, we faced certain hurdles from prior Chinese ownership, such as significant taxable debt and a need for a long-term vision and a team to deliver on our ambitious goals. Today, as discussed in greater detail in our shareholder letter, those challenges are largely behind us. I'm especially proud of our fast-moving, performance-driven culture, which has enabled us to chart a clear path for long-term compound growth as a global Gayborhood in your pocket. We have a robust product roadmap of AI-first experiences our users deserve while continuously delivering excellent financial results. Our strong momentum in 2024 is continuing into 2025. In January, we released our first annual product roadmap shaped by user input, building on products we laid out last summer at Investor Day. In February, we redeemed our warrants, cleaning up our balance sheet.

George Arison: Here in March, we're announcing our first share repurchase program for up to $500 million worth of shares. The buyback program underscores the board and management's confidence in Grindr's long-term potential and affirms our commitment to returning excess capital to shareholders. Also today, we're laying out our strong initial guidance for 2025, which Vanna will provide, along with our focus on four key priorities. First, rapidly shipping products as we elevate Grindr to a world-class app. We expect our users to appreciate new products such as A-List, For You, and Discover. These and many other products we're working on will allow us to maintain strong product-led growth in the years to come. Second, strengthening our global brand by actively promoting better global understanding of who we are and what we stand for through Grindr creative content that brings the full possibilities of the global Gayborhood to life.

George Arison: Third, executing on the Gayborhood expansion by launching our first product outside of the core app in the health and wellness space. The test beta launch in limited markets is expected to start in the coming months. Stay tuned. Fourth, further increasing talent density to execute on our ambitious plans. I have great confidence in our team's ability to continue to drive strong shareholder value through outstanding execution on the needs of our users. I'm proud of the foundation that we've built in the 30 months since I became CEO and enthusiastic for what lies ahead. As always, we greatly appreciate the support of our shareholders and user community. In closing, I would encourage you to read the shareholder letter for greater detail on the points I discussed.

George Arison: Now, I'll turn it over to Vanna, who will speak to our financial results, warrants redemption, and share buyback plan in greater detail and provide 2025 guidance.

Vanna Krantz: Thank you, George, and hello, everyone. I'll walk you through our Q4 and full year results, provide an update on our completed warrant redemption, and recently announced share repurchase program before sharing our guidance. As George highlighted, 2024 was a phenomenal year for Grindr, with revenue growing 33% to $345 million for the full year. We achieved 43% adjusted EBITDA margin for a total of $147 million.

Vanna Krantz: Our strong performance was driven by merchandising new and existing features in our core subscription tiers. We also optimized paywalls in our foundational products while continuing to maintain excellent engagement. These enhancements increased our conversion rates of users from free to paid. Grindr's advertising business had a fantastic year, growing 56% year over year. Our refreshed Go Forward strategy, developed under the experienced new leader we brought in last spring, has driven growth in both third-party advertising and the direct advertising business. We are in the early stages of enhancing our ad tech, which offer new ad formats and increase CPMs over time. All business KPIs grew again in 2024. Average monthly active users increased 7% over the prior year to 14.2 million. Average paying users increased 15% over the prior year to 1.1 million, bringing payer penetration to 7.6% for the year.

Vanna Krantz: Our average direct revenue per paying user increased 12% over the prior year to $22.53. Turning to Q4, revenue was $98 million, up 35% year over year from $72 million. This comprised $80 million in direct revenue, which was up 28% year over year, and $18 million of indirect revenue, which was up 85% year over year. As a reminder, our advertising business benefited from a large direct brand campaign in Q4 that significantly outperformed expectations in December. Adjusted EBITDA for the quarter was $39 million, with a 40% margin. Strong, even when we executed on some of the planned investments late in the year.

Vanna Krantz: Turning to our balance sheet, we ended the year with $59.2 million in cash and cash equivalents and a gross leverage ratio of 2x, based on our full-year adjusted EBITDA, which reflects a reduction of $51 million in leverage paid down during the year. As we reported early in the new year, we executed a redemption of outstanding warrants associated with our go-public transaction. The redemption was completed last week, and out of the 37.4 million outstanding warrants eligible for redemption, a total of 36.8 million warrants were exercised. This includes 9.5 million warrants exercised on a cashless basis at an exchange ratio of 0.361 shares per warrant, resulting in the issuance of 3.4 million shares, and 27.3 million warrants cash exercised, resulting in the issuance of 27.3 million shares and generating $314 million in cash proceeds to the company.

Vanna Krantz: Our pro forma cash balance as of 31 December 2024, after giving effect to the net proceeds from the warrant redemption, stood at approximately $370 million. This was a significant financial milestone for the company that simplifies our capital structure and enables Grindr to move forward with our capital allocation planning, as we initially discussed at our Investor Day last June. In keeping with that plan, you've seen today that our board of directors has authorized a 2-year stock repurchase program of up to $500 million of our common stock. The program signals our confidence in the company's strong performance now and into the future. Now let's turn to our guidance for 2025. As a reminder, we set our annual guidance in March and update it as appropriate on a quarterly basis as we move through the year.

Vanna Krantz: Our initial 2025 guidance calls for revenue growth of greater than 24% and an adjusted EBITDA margin of 41% or greater, reflecting our expectation for another strong year of growth and profitability. As we've always said, we set our initial guidance based on what we have a clear line of sight to for the year, and we'll keep you posted. Overall, we are excited about our momentum entering into 2025 and the opportunities that we have on tap. With that, operator, we'll now take questions.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. At this time, I would like to remind everyone to ask a question, press the star button followed by the number 1 on your telephone keypad. If you would like to withdraw your question, please press star one again. One moment, please, for your first question. Your first question comes from the line of Andrew Marok of Raymond James. Please go ahead.

Andrew Marok: Hi. Thanks for taking my questions. Wanted to start on product. Obviously, very strong execution so far, and the January roadmap was really encouraging. We've seen everything either on track or ahead of expectations versus the Investor Day. I guess my question is, what were the surprise factors in those intervening 6 to 9 months? Was it a little bit of conservatism embedded in the Investor Day, or was it maybe a little bit easier going than you thought as you started developing these products? Thanks.

George Arison: Hi, Andrew. Good to talk to you, and hello, everybody. I think the company is a young company still, that recently went public. We are working on a lot of things, as everybody knows.

George Arison: We also went through a pretty significant change in the team that we have. 75% of people who work at Grindr now have joined since I joined. We've been really focused on driving productivity levels to be significantly higher. As one example that we gave in the shareholder letter, we are seeing 3 times as many check-ins in GitHub on a monthly basis per engineer today, oh, sorry, in 2024 versus what we were seeing in 2022. There's no question that our productivity has gone up, which has allowed us to ship dramatically more stuff and work on a lot more things. I think that's something that we as a company are really proud of.

George Arison: A significant set of things that we added to the product roadmap came from our ability to be able to build more things as a result of us being a lot more productive. I think that's awesome. We also have added a team in Colombia in the last year of dedicated engineers, and they're also very helpful and additive in our ability to ship more things. The other thing here is that as we learn more about how users react to certain products and how they engage with them, we come up with additional things that are more responsive to their needs concurrently with, as we learn more about GenAI and what GenAI can do, being able to take advantage of that as well in product development. That is also helping in our ability to deploy more products.

George Arison: One of the things you'll see this year is that a lot of the products we're building will be using our Wingman technology as a backbone. Obviously, being able to build Wingman first and launch it quickly, way ahead of schedule, is making that possible. So we're excited about that as well.

Andrew Marok: Really helpful, Kahlra. Thank you. Maybe one more quick one, if I could, on the share repurchase program. That $500 million figure is not a small number, but one piece of feedback we've heard from investors recently is kind of the challenges around liquidity and float and things like that. I guess, how do you balance your ability to buy back shares in the context of still having an appreciable amount of your shares held in private hands? Thank you.

George Arison: I appreciate the question. I do realize that for some people, the float is a topic. We also can say that from the time we went public to today, the float has doubled. There's a lot more float available now. Whenever I was asked about the float in 2022, early 2023, I would try to say that it would take care of itself, and I think it has been able to take care of itself in that sense. At the same time, I think the fact that we do have these long-term holders who are, frankly, in some respects, doubling down on the company. One of them exercised all of his warrants in cash, and that's a pretty significant increase in his financial stake in the company and the amount of cash that he's put into supporting Grindr, I think it signals something very strong.

George Arison: Our job is to ensure that we, A, invest in the business and set it up for growth, and then, B, return the excess capital beyond what's necessary for that to shareholders, and we're doing that. I think our shareholders that I've at least spoken to have been very happy about us having a clear capital allocation strategy. We've been asked about that quite a bit, and we're now coming back with the answer for what that is and how we're going to deploy it. My general sense is the float will take care of itself over the long term.

Andrew Marok: Much appreciated. Thank you.

Operator: Your next question comes from the line of John Blackledge with TD Cowen. Please go ahead.

John Blackledge: Great, thanks. Two questions. First, on the 2025 revenue outlook. Given the 24% or greater revenue growth guide for 2025, how should we think about the mix of kind of paying user growth and ARPU growth? Given we're kind of a little over two months into Q1, any color on how Q1 is trending would be great. I have a follow-up after that.

Vanna Krantz: Sure. Thanks for the question. Let me just put the guidance in a bit of perspective. As you know, we guide to what we have line of sight to, and we update the guides as we learn more throughout the year. We have a very robust product roadmap that we shared in June, and we refreshed one in January. As that testing reaches statistical significance, we'll certainly update you. As you know, our business model, really, if we outperform, that revenue tends to flow directly to the bottom line. With respect to ARPU and a mix of new payer growth, I'd say that we have a lot of new features, and those features we have been showing over the last couple of years that our conversion rates from free to paid have been going up in a steady perspective.

Vanna Krantz: I think we expect that to continue, so you should see some payer growth this year as well as ARPU. If you think about international versus domestic, both levers are moving nicely. I would say probably more of the same, quite frankly. Just as a reminder, we are guiding to 100 basis points higher than our original guidance last year at 24% revenue growth and 42% of EBITDA margin, really at the top end of our ranges that we gave out. Those are really on the top ranges of what we gave out in our June Investor Day. We're pretty happy with what we're showing so far. I think that addresses both of those questions.

George Arison: Just to be specific on the numbers, it's 24% or higher revenue growth and 41% or higher EBITDA for the year. The only color I would like to add just a little bit on this is we are still, again, in very early stages of monetizing this product, and our approach is create a lot of new features and products for people, and through that, drive monetization. I think what's going to happen this year, and especially next year, is both of our paying tiers are going to have a lot new features added to them, which will be creating a lot of value to users. There is a real argument on how much of a value is that, right? Is it a justified amount of value for $40, or is that value that we're now giving them worth more?

George Arison: That's something we're going to have to learn about over the coming, say, 24 months. At the same time, in the free product, we're also creating a lot of value in it. Right now is a huge addition to the product that's going to be really beneficial to people. We are having really great results from that in the 2 test markets. 25% of our WAU are using Right now every week, which is really fantastic and frankly, higher than we would have expected. The intentions-based methodology here is working really well. As you do that, over time, we believe that you can drive more people to start paying for the product because they're seeing so much value out of what you're giving them.

John Blackledge: That's super helpful. Just a follow-up on the margin. Like you said, 41% or greater, margin. Just any further color on kind of key investment areas in 2025 would be helpful. Thank you.

Vanna Krantz: Sure. With respect to investment, as you know, we have a very robust product roadmap and a fairly lean team. You'll see us to continue to add headcount in these key areas of technology, AI, and data science. Really, as you can see, the product roadmap is getting more and more sophisticated with respect to AI. We've been really leaning into it. Think about it in those kinds of dimensions.

John Blackledge: Okay. Thank you.

Operator: Your next question comes from the line of Eric Sheridan of Goldman Sachs. Please go ahead.

Eric Sheridan: Thanks so much for taking the questions, and thanks for all the details in the shareholder letter. I want a big picture question maybe for George. George, we get asked a lot by investors. With so much product and platform innovation ahead of you as a company over the next couple of years, how do you think about what signals you're looking for to sort of accelerate the pace of innovation or to move things from beta into wider expansion across the platform? Just philosophically lay out sort of your management view about what you'll be watching for and what we should be sort of analyzing from the outside looking in to could possibly even speed up the rate of innovation. Based on the comments on the advertising business, I wanted to ask one quick follow-up.

Eric Sheridan: Just how much in terms of the ad tech stack and the positioning of the ad business in the marketplace is now behind you as opposed to ahead of you, and it really is just about execution and sort of closing the sort of marketplace view on the advertising business and sort of bringing in revenue, on the execution side as opposed to more the building block side? Thank you so much.

George Arison: Yeah. I'll take the first question, and then I will probably take the second. We are building a lot of things, no question, and we'll be proud of the team's ability to do that. Just the speed at which we're shipping now is not comparable to what we were doing before. Some days early this year, we would sit down to have product updates, and I'd have three or four of them a day, and then my head would be a little bit spinning because I'm like, Wow, man, we're working on so many really cool things. A lot of these things are way ahead of even most much larger companies in terms of how they're deploying the tech and what kind of tech they're deploying, which is really awesome.

George Arison: For right now, I don't think we want to add many more things to the list of things we're working on and shipping. The really big thing for us will be getting it out into the market, getting user feedback for them, and then making changes as needed if those changes are necessary, and then putting them back out in the market with those changes in place. No matter how much you ask users as a survey, do you want X or do you want Y, frankly, people oftentimes respond one way to a survey and another way when the product is live. I think having a real product out in a minimum viable product way is really critical, and that's generally our approach. We can add more features to it over time.

George Arison: The kinds of things we track when we do that is obviously usage, right? For example, for right now, with a quarter of our weekly active users in Washington, DC using it, that's a really positive signal for getting it deployed to many more users. It's also just the quality of the product. Initially, when you have a minimum viable product, not everything that the users want is in the product. Understanding that, hey, if you had XYZ feature, that would be really helpful is something that we are always looking for as a data point. Thirdly, I think with so many new things happening at the same time, we don't want to release those things all at once. We want to release things for them to settle in, for people starting to engaging and using them, and then release more.

George Arison: Some of the stuff will simply be driven by the fact that we don't want to put out everything all at once out into the market. My general view is the core things inside Grindr today that are working really, really well, we don't want to touch. The grid, for example, that is a kind of core of Grindr. We don't want to touch that. We don't want to make that different. We did add to it, ability to recommend some additional users to a person below the first 100 that they see. That's been a really popular feature, and so that is one change that we made to the grid. Beyond that, we are not going to be starting with, let's change a lot of stuff on the grid.

George Arison: We'll actually first launch a Discover tab, which will be a separate new space in the app, where you will have people presented to you not by geography, but rather by likelihood of you finding them interesting and potentially later on, them finding you interesting. In that space, we will have an opportunity to do a lot more experimentation around, how do we help you with discovery and what kind of people we show you based on either inference or other things that you tell us about yourself. That will give us another opportunity to have much better experimentation in the platform without really creating any risk for the core product and how we experiment with it. I hope that answers the question, I'll let Diana talk about advertising, and then I'm happy to come back more to this if you have a follow-up.

Vanna Krantz: Hi, Eric. Yes, 2024 was a great year for advertising, both on the third-party advertising side and on the brand side. You saw a nice little bump in Q4, which was really part of the outperformance. We brought in a new experienced leader, and he's really doubled down on advancing the ad tech to allow us to generate these higher CPMs as we introduce native ads and rewarded video. We believe there continues to be significant room in addressing both volume, domestically and internationally, as well as higher CPMs with this elevated ad tech.

Vanna Krantz: Specifically on your question of how much is behind us versus ahead of us, I would say that we still have a long way to go on advancing our ad tech, so still a long way ahead of us, but we're really pleased with our performance to date and continue to be comfortable in achieving the target of 15% of our total revenue coming from advertising revenue, where we are right now in ad tech.

Eric Sheridan: Really appreciate it. Thanks for all the detail.

Operator: Your next question comes from the line of Samuel Lawrence of Beth Capital. Please go ahead.

Samuel Lawrence: Great. Thanks. Hey, guys. Some pretty fantastic results there. Firstly, you've got some exciting features on the roadmap around the core dating product. It'd be great to hear some examples of how users are using the app in different ways and how you're thinking about the long-term potential to build some features and functionality around these edge cases as you drive towards the vision of becoming a sort of lifestyle and community platform for gay men.

George Arison: Thanks, Sam. It's a great question. We do have a lot of ideas for how to service the users in the way that they want and also in the way that the culture and society is moving forward. On the second point, we recently did a survey, last year, and one of the really interesting data points we found was 50% of people 35 and under, and people being gay and bi men, because this is a survey of 1,400 gay and bi men in the United States, want to be in a long-term relationship at some point in their lives, which is a much higher number than I think you would have gotten from gay men, say, 20 or 25 years ago, especially in the younger cohort.

George Arison: Secondly, 25% of those same 35-or-under respondents said that they wanted to have children, which is an exponentially high number, like orders of magnitude higher number than I think you would have seen previously. As we know what users want, and as we think through what users will want in the future based on what they're telling us, it is imperative for us to be building features that respond to that. Dating actually is a good example of how we're thinking of introducing features into the product without really fundamentally changing the product. We are going to, as I described earlier, launch a Discover tab, and that will be a place where you will see people from all over the world based on things that we infer about you or we infer about them. Obviously, all with user consent.

George Arison: We just went through a lengthy process of getting user consent to use AI through the product, and the rates of response were very high in the positive, which is fantastic. Within that then, you could easily see a world where we build an additional feature that shows you people not just based on pure interest, but actually who are interested in dating. Instead of having to create a totally new space for dating, we can use something that we are already building to allow a person to see a set of people that are interesting for them from the dating perspectives. Then a step beyond that would be okay, not just that they're interesting to you from a dating perspective, but actually based on what we know about them, it's more likely they will also like you.

George Arison: The quality of people that we're showing you is very high, because these are highly qualified people from a dating perspective that are really interesting both from your perspective and from their perspective of you. We think that is a great user experience and a lot of value without having to create a totally new space where that happens. At the same time, it's also something that probably ultimately should be something we charge a significant amount of money for because the value that we're creating in that is so significant, right? Ultimately our job is to facilitate as good of a connection as possible. That's just an example of how we think through that.

George Arison: I think that's why building Wingman is so important, because that technology can allow us to do a lot more of these shortcuts around how we build product without really disrupting the app. That's something that is very useful, I think, for us. As I'm answering, I do want to go back to the previous question on what can we accelerate. One thing I did not talk about is the Gayborhood initiative. We obviously talked about that and invested in, and we think those are huge opportunities for Grindr to build businesses on top of the core Grindr business that are very appealing to our users. We are going to be launching the first one this year in beta and really psyched about that.

George Arison: If there is an area where we might see acceleration beyond all the things that we're already building, would be in the Gayborhood initiatives, because those we definitely could speed up. There's a limit to how many things we can do at once, but certainly we do think that with more right resources, and right is a really imperative term there, we could accelerate some of those things faster, and we're definitely working on that.

Samuel Lawrence: Maybe one more from me, please. You're clearly very early in this journey and have a ton of opportunities to invest in. On the other side, you remain pretty laser-focused on maintaining high efficiency within the company. Could you maybe just discuss how you're thinking and looking to manage this?

George Arison: Look, we've gone through a lot of change as an organization. As I mentioned earlier, 75% of the team has been hired since I became CEO. In some ways, that's really helpful because they've been hired with a clear understanding of the culture that we have. We do have a very high performance-driven, hard-charging, clear on accountability culture, and one that we want people to obviously join, but they need to be on board with what they're joining. Our culture is not for everybody, but for people who want to be in a culture that excels and constantly strives to ask more of people by unleashing their potential and allowing them to grow and improve as employees and as professionals. This is a really great culture to be in. Additionally, it's also how we comp, right?

George Arison: Our compensation is very much performance-focused, and I think people really appreciate that. We're in a really good place in that regard where we are, but we want to continue improving our talent density, and that's why talent density is one of our key priorities for next year. Where I believe we have a really big opportunity is actually at the middle layer below my immediate executive team. The next layer of managers, we definitely needed additional ones on the team. My team's been feeling that pretty strongly because they've oftentimes had to do both their day-to-day role and also the role of somebody below them that they would normally be playing. We are going to be adding a few folks like that to the team across many different departments in product, finance, engineering, and others. That's coming soon.

George Arison: We're not going to probably do a press release about it, but I think people will only then see as some of these folks come on board, and that'll be a really good addition. Once we have those people, then we can more easily think about adding additional people to the team because there'll be more folks who could provide the right management oversight and this performance-driven culture to the rest of the team. I would expect us to continue to invest in the team. We added a significant number of employees last year. We're going to add a significant number of employees this year as well while maintaining a very lean organization and one that is earning a lot of revenue per employee, which I think is something we are very proud of.

Samuel Lawrence: Fantastic. Thank you.

George Arison: Thank you. All right. I think that's the questions for today. Really appreciate everyone's time. This week already, we spent two days at the Morgan Stanley and the JMP conferences and had two fireside chats and really appreciated the incredible level of investor engagement that we got. I did not realize you could fit that many people into some of these small hotel rooms that the meetings are usually in, as we had in a few of our meetings. It was really a lot of fun. It's great to be out there talking to folks and telling them the story of how awesome what we are doing is and all the potential that we have. It is a really beautiful day in the Gayborhood, and look forward to speaking to everybody soon.

Vanna Krantz: Thank you.

Operator: Ladies and gentlemen, that concludes your conference call. We thank you for participating and ask that you please disconnect your lines.