Q2 2023 Grindr Inc Earnings Call

Two decliners second quarter 2023 earnings conference call.

Operator 1: I would like to welcome everyone to the Grindr Q2 2023 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. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star two. Thank you. I would now like to turn the conference over to Patrick Lannon, a representative for Grindr. Please go ahead.

All lines have been placed on mute to prevent any background noise.

After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question. Please press star two thank you.

Patrick Flanigan: I'd now like to turn the conference over to Patrick Flanigan.

Speaker Change: Representative for greater please go ahead.

Speaker Change: Thank you operator, and good afternoon, everyone. Today's call will be led by grinders, CEO, Georgia, Ericsson and CFO banner crafts.

Patrick Lannon: Thank you, operator, and good afternoon, everyone. 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 their Q2 2023 shareholder letter yesterday afternoon and 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.

Speaker Change: A few brief remarks, and then we will open it up for questions.

Speaker Change: Please note grinder released our Q2 2023 shareholder letter yesterday afternoon.

Speaker Change: It's available on the Sec's website, and grinders investor page at investors Doc 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.

Speaker Change: These statements are subject to risks and uncertainties and our 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.

Speaker Change: 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 yesterday, which has been posted on the Investor Relations page of <unk> website and in <unk> filings with the SEC.

Patrick Lannon: 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 yesterday, 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 Arison.

Speaker Change: SEC.

Speaker Change: With that I'll turn it over to George Harrison.

George Harrison: Hello, everyone and thank you for joining us today.

George Arison: Hello, everyone, thank you for joining us today. We appreciate your patience with us when rescheduling today's call. We needed more time to run some additional processes before finalizing our financial results this quarter. We're pleased that we were able to file our 10-Q and letter yesterday and look forward to sharing additional perspective on our progress today. We had an excellent quarter and continue to build momentum for H1 of the year. We're delivering a better user experience with significant feature improvements, and we're continuing to improve monetization, highlighted by our new weekly subscription plan, which is performing well. I'm proud of what we have been able to achieve so far, and there's a lot more to come. Our shareholder letter covers the key developments in the quarter, and I encourage you to read more there.

Speaker Change: We appreciate your patience with us when reschedule in today's call.

Speaker Change: More time to add some additional processes before finalizing our financial was up this quarter.

Speaker Change: We're pleased that we were able to file our 10-Q and letter yesterday and look forward to sharing additional perspective on our progress today.

Speaker Change: We had an excellent quarter and continues to build momentum through the first half of the year.

Speaker Change: We're delivering a better user experience with significant feature improvements and we're continuing to improve on innovation.

Speaker Change: By a new weekly subscription plan, which is performing well.

Speaker Change: I am proud of what we have been able to achieve so far and there's a lot more to come.

Speaker Change: Our shareholder letter covers the key developments in the quarter and I encourage you to read more of that for my remarks here I will give a high level review of the results and execution message of priorities before turning it over to Dan.

George Arison: For my remarks here, I will give a high-level review of the results and execution of our strategic priorities before turning it over to Vanna. We delivered revenue growth of 32% year over year with an operating income margin of 23% and an adjusted EBITDA margin of 44%. Given strong momentum in the first two quarters of this year, we're pleased to be able to raise our 2023 guidance to revenue growth of 28% or greater and an EBITDA margin of 41% or greater for 2023. Vanna will cover the details behind the guidance raise. Let me just say that our confidence in our outlook is supported by the rapid progress we're making on our strategic priorities. The first of these priorities is improving our user experience.

Speaker Change: We delivered revenue growth of 32% year over year with an operating income margin of 8%.

Speaker Change: <unk> EBITDA margin of 44%.

Speaker Change: Given the strong momentum in the first two quarters of this year, we're pleased to be able to raise that 2020 guidance to revenue growth of 28% or greater and EBITDA margin of 41% or greater for 2023.

Speaker Change: Then I will cover the details behind the guidance raise.

Speaker Change: Let me just say that our confidence in our outlook is supported by the rapid progress, we're making on our strategic priorities.

Speaker Change: The first of these priorities is improving our user experience during Q2, we rolled out and received positive user feedback on our newly designed homes suite to help our users connect more efficiently. We also rolled out a redesigned profile that enables high quality photo sharing and features a clear and upfront about infection among many upper improvements.

George Arison: During Q2, we rolled out and received positive user feedback on a newly redesigned home screen to help our users connect more efficiently. We also rolled out a redesigned profile that enables higher-quality photo sharing and features a clear and upfront about me section, among many other improvements. Our second priority is monetization through greater conversion and new offerings. Our global rollout of Weeklies, a lower-priced, shorter-duration subscription offering that gives users access to extra features and functionality for one week, has had excellent adoption. Weeklies contributed to our growth in paying users and higher ARTPU. We continue to test additional lower pricing options as well as develop features for a premium tier, but we do not expect to launch either of these in 2023. Our third priority is planning for future growth. In May, we rolled out Grindr Web to 100% of all our paying users.

Speaker Change: Priority is monetization through greater conversion and new offerings.

Our global rollout of weekly.

Speaker Change: And lower priced shorter duration subscription offering but gives us access to extra features and functionality for one week.

Speaker Change: It's an excellent adoption weeklies contributed to our growth in paying users and higher arpus with.

Speaker Change: We're continuing to test additional lower pricing options as well as develop features for a premium tier.

Speaker Change: But we do not expect to launch even though these in 2023.

Speaker Change: Our first priority is planning for future growth.

Speaker Change: In may we rolled out Glenn to web to a 100% of our paying users.

Speaker Change: Represents a long term opportunity to build nsfw features our users want.

George Arison: That represents a long-term strategic opportunity to build NSFW features our users want that we have not previously been able to provide on a mobile form factor. We're also working on a broad set of paid features that our users have long wanted us to build, which are being tested in H2, and we expect will go live next year. We are in early stages of developing our AI products. We believe that AI will transform the ability to match users with each other and create new use cases for engagement, and we are making investments across a broad range of AI and ML use cases and features that we expect to bring to market in the coming quarters.

Speaker Change: Have not previously been able to provide on a mobile form factor.

Speaker Change: We're also working on a broad set of paid features that our users have long wanted us to build which are being tested in phase II and we expect will go live next year.

Speaker Change: We are in early stages of developing products we.

Speaker Change: We believe that AI will transform the ability to match users with each other and create new use cases for engagement and we're making investments across a broad range of the AI and the amount of use cases and features that we expect to bring to market in the coming quarters.

Speaker Change: Regarding the team we are focused on accelerating our execution and we are bringing some terrific talent on board to help us in areas like product management engineering marketing advertising data science anymore.

George Arison: Regarding the team, we are focused on accelerating our execution. We are bringing some terrific talent on board to help us in areas like product management, engineering, marketing, advertising, data science, and more. Expect to see more from us on this front as the year progresses. Our shift to hybrid work structure has impacted our hiring pace as we prioritize building a high-performing public company team. We expect to meet our headcount resource requirements in H2 2023 and 2024. Our fourth priority is about serving our community, something that continues to animate our business and team. We're pleased with the success of Together Take Me Home from our longtime collaborators at Building Healthy Online Communities, working closely with Emory University and the US Centers for Disease Control and Prevention.

Speaker Change: Expect to see more from us on this front via progresses.

Speaker Change: Shift to hybrid work structure has impacted 100 pace as we prioritize building a high performing public companies, we expect to meet our headcount resources Department and <unk> hundred 23 and 2021.

Speaker Change: Our fourth priority is about serving our community suddenly that continues to animate our business and team.

Speaker Change: We're pleased with the success of together taking home.

Speaker Change: From our longtime kilometers of building healthy online communities working closely with Emory University and the U S centers for disease control and prevention.

Speaker Change: So a unique public private partnership.

George Arison: Through a unique public-private partnership, we've made the program reachable with a single click from our app, providing our users around the country access to free at-home HIV test kits. I'm proud of the strong results in the quarter and the progress we've made to improve the Grindr app in the H1 of the year, and I look forward to sharing all the great things we are already working on in the H2 with you in the coming quarters, including an update at our inaugural Investor Day event. Stay tuned for more information on this in the coming weeks. With that, I'd like to turn the call over to our CFO, Vanna Krantz, to walk through our Q2 financial results.

Speaker Change: We've made the program, which are both with a single click from our App, providing end users around the country access a free at home HIV test kits.

Speaker Change: I am proud of the strong results in the quarter and the progress we've made to improve decliner app in the first half of the year and I look forward to sharing all the great things. We are already working on in the second half with you in the coming quarters, including an update at our inaugural Investor day, but stay tuned for more information on this in the coming weeks.

Democrats: With that I'd like to turn the call over to our CFO Democrats to walk through our second quarter financial results.

Democrats: Thank you George and Hello, everyone.

Vanna Krantz: Thank you, George, and hello, everyone. We built upon our Q1 momentum to deliver an excellent Q2 financially, achieving 32% year-over-year revenue growth, an operating income margin of 23%, and an adjusted EBITDA margin of 44%. As you heard from George, our strong financial performance in the first two quarters and continued positive user engagement trends have led us to raise our full-year outlook. We now expect full-year revenue growth of 28% or greater, up from 25% or greater, with an adjusted EBITDA margin of 41% or greater, up from 38% or greater. The improved outlook primarily reflects increased confidence in the performance of new subscription and a la carte products as we continue to improve monetization as well as operational efficiencies. We expect revenue growth to outpace increases in operating expenses over the H2 of the year.

Speaker Change: We built upon our first quarter momentum to deliver an excellent second quarter financially.

Keeping 32% year over year revenue growth and the operating income margin of 23% and then adjusted EBITDA margin of 44%.

Speaker Change: As you heard from George our strong financial performance in the first two quarters and continued positive user engagement trends have led us to raise our full year outlook.

Speaker Change: We now expect full year revenue growth of 28% or greater up from 25% or greater with an adjusted EBITDA margin of 41% or greater up from 38% or greater.

Speaker Change: The improved outlook, primarily reflects increased confidence in the performance of new subscription and Ala Carte products as we continue to improve monetization as well as operational efficiencies.

Speaker Change: We expect revenue growth to outpace increases in operating expenses over the second half of the year.

Speaker Change: Yeah.

Speaker Change: Turning to our user metrics in the second quarter average monthly active users increased 8% over the prior year and 2% sequentially to $13 1 million.

Vanna Krantz: Turning to our user metrics. In Q2, average monthly active users increased 8% over the prior year and 2% sequentially to 13.1 million. Average paying users in Q2 increased 22% over the prior year to 929,000. Result of the increases in average MAU and average paying users, our average payer penetration grew to 7.1% for Q2. Improved monetization was primarily driven by the global rollout of our new Weeklies, which we've been testing since late last year. Our average revenue per paying user increased $0.56 sequentially to $19.08 this Q2. We continue testing subscription options with our goal of increasing total paying users, we expect this metric may fluctuate quarter to quarter. Turning to the more detailed results, beginning with revenue.

Speaker Change: Average paying users in the quarter increased 22% over the prior year to 929000.

Speaker Change: As a result of the increases in average MAU and average paying users our average payer penetration grew to seven 1% for the second quarter.

Speaker Change: Improved monetization was primarily driven by the global rollout of our new weekly subscription offering, which we have been testing since late last year.

Speaker Change: Our average revenue per paying user increased 56% sequentially to $19 eight.

Speaker Change: <unk>.

Speaker Change: As we continue testing subscription option with our goal of increasing total paying users. We expect this metric may fluctuate quarter to quarter.

Speaker Change: Turning to the more detailed results beginning with revenue.

Speaker Change: Second quarter revenue of $61 5 million was up 32% year over year from $46 6 million.

Vanna Krantz: Second quarter revenue of $61.5 million was up 32% year over year from $46.6 million. Direct revenue for the second quarter increased 37% year over year to $53.2 million, driven by the new Weeklies subscription offerings and continued adoption of the Boost a la carte product. Advertising or indirect revenue for the second quarter grew 7% year over year to $8.3 million. Operating expenses decreased by $1 million year over year. We incurred higher expenses related to distribution fees driven by subscription growth and increased headcount-related expenses in support of product development. These costs were offset by lower stock-based compensation expense and lower depreciation and amortization. Net income for the second quarter was $22.3 million, up from a net loss of $4.3 million in Q2 of 2022.

Speaker Change: Direct revenue for the second quarter increased 37% year over year to $53 2 million driven by the new weekly subscription offerings and continued adoption of the boost Ala carte product.

Speaker Change: Advertising or indirect revenue for the second quarter grew 7% year over year to $8 3 million.

Speaker Change: Operating expenses decreased by $1 million year over year, we incurred higher expenses related to distribution fees driven by subscription growth and increased head count related expenses in support of product development.

Speaker Change: These costs were offset by lower stock based compensation expense and lower depreciation and amortization.

Speaker Change: Net income for the second quarter was $22 3 million up from a net loss of $4 3 million in Q2 of 2022.

Speaker Change: Basic and diluted earnings per share it was 13 sets.

Vanna Krantz: Basic and diluted earnings per share was $0.13. Adjusted EBITDA for the quarter was $26.9 million or 44% of total revenue. These results were primarily driven by revenue growth and strong operating margins inherent in the Grindr business model. Approximately 1 percentage point of our adjusted EBITDA resulted from certain one-time adjustments, but regardless, our performance was stronger than anticipated. Turning to our balance sheet. Grindr made principal debt repayments of $17.6 million in the quarter, resulting in reduced net debt of $342.9 million at 30 June 2023. We ended the quarter with $22.1 million in cash and cash equivalents, down from $25.5 million in the prior year and $33.8 million in Q1 2023. With that, I will pass it back to George, who will open it up for Q&A.

Speaker Change: Adjusted EBITDA for the quarter was $26 9 million or 44% of total revenue.

Speaker Change: These results were primarily driven by revenue growth and strong operating margins inherent in the grinder business model.

Speaker Change: Approximately one percentage point of our adjusted EBITDA resulted from certain onetime adjustments, but regardless our performance was stronger than anticipated.

Speaker Change: Turning to our balance sheet grinder made principal debt repayments of $17 6 million in the quarter, resulting in reduced net debt of $342 9 million at June 32023.

Speaker Change: We ended the quarter with $22 1 million in cash and cash equivalents down from $25 5 million in the prior year and $33 8 million in the first quarter of 2023.

Speaker Change: With that I will pass it back to George who will open it up for Q&A.

George Harrison: Thank you Dana we're excited about the progress we've made so far this year and look forward to continue to delight users silver community and generate value for shareholders.

George Arison: Thank you, Vanna. We're excited about the progress we've made so far this year and look forward to continue to delight our users, serve our community, and generate value for our shareholders. At this time, I'll ask the operator to open up the line for questions.

George Harrison: I'll ask the operator to open up the line for questions.

Thank you ladies and gentlemen, we will now begin the question and answer session.

Operator 2: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request. Questions will be taken in the order received. Should you wish to cancel your request, please press the star followed by the two.

George Harrison: Do you have a question. Please press the star followed by the one on your Touchtone phone.

George Harrison: Here are three telecom technology, and Youll request questions will be taken in the order received should you wish to cast and we will request. Please press the star followed by the two.

Speaker Change: We will begin by taking a couple of questions from the Se platform.

Patrick Lannon: We'll begin by taking a couple of questions from the Say platform, which is a platform that enables us to take questions from retail investors. First question is from Manuel C: Will you consider making your premium subscriptions more affordable to increase sales, or how about adding a cheaper plan that only removes ads?

George Harrison: Which is a platform that enables us to take questions from retail investors.

Speaker Change: First question is from Manuel fee.

Manuel fee: Will you consider making your premium subscriptions more affordable to increase sales.

Manuel fee: Or how about adding a cheaper plan only renewed.

Manuel fee: Thank you for the question.

Vanna Krantz: Thank you for the question. Absolutely. We are focused on meeting our users with price points and features that they want. We have launched what's called The Weeklies. The Weeklies allow our users to take our product for a shorter period of time, perhaps when they're traveling to a new city, and just use the product for that duration. That gives them more flexibility, and it is a cheaper option. Also, we have recently launched Grindr Plus, and that allows you to have the product without ads. That also is a cheaper option. Thank you.

Manuel fee: Absolutely we are focused on meeting our users with price points and features that they want.

Manuel fee: So we have launched what's called the weeklies the weeklies allow our users to take our product for a shorter period of time, perhaps when they're traveling to New York City and just use the product for that duration that gives them more flexibility and it is a cheaper option.

Manuel fee: Also we have recently launched <unk> plus and that allows you to have the product without.

Manuel fee: Without ads.

Manuel fee: So.

Manuel fee: That also is a cheaper option.

Manuel fee: Thanks.

Manuel fee: Thank you all right next.

Patrick Lannon: All right. Next question is from Kelly R. Can you explain why you hired Littler Mendelson while your employees are attempting to unionize?

Speaker Change: Next question is from Kelly or can you explain why you hired little.

Manuel fee: Littler mendelson, while your employees or attempting to unionize.

Manuel fee: Thanks for the question at this time, we are not enough position to comment on matters pending before the NLRB we.

George Arison: Thanks for the question. At this time, we are not in a position to comment on matters pending before the NLRB. We have said and will continue to say that we respect and support our team members' rights to make their own decisions about union representation.

Manuel fee: Have said and we will continue to say that we respect and support our team members rights to make their own decisions about union representation.

Manuel fee: Thank you very much I believe we have a question in the queue operator.

Patrick Lannon: Thank you very much. I believe we have a question in the queue, operator.

Speaker Change: Yes. Your question is from Emily <unk> from New Street Research. Please ask your question.

Operator 2: Yes. Your question is from Emily Stokes from New Street Research. Please ask your question.

Emily: Hi, good afternoon, everyone and thanks for taking my question, so with the LGBTQ plus community.

Emily Stokes: Hi. Great. Good afternoon, everyone, and thanks for taking the question. The LGBTQ plus community dating app landscape has gotten a little bit more competitive lately with the introduction of a new app from another major player in the space. That was released a little bit over two months ago. How do you see this impacting Grindr and its user base? Thank you.

Speaker Change: Atlantic has gone a little bit more competitive lately with the introduction of a new up from another major player in the space.

Speaker Change: That was really a little bit over two months ago, how do you see this impacting grinder and its user base.

Speaker Change: Yes.

Speaker Change: Our experience from looking at this space for quite some time now is that users that use more than one <unk>.

George Arison: Our experience from looking at the space for quite some time now is that users generally use more than one app for dating. We know that some of our users are using other apps that already exist. We would expect them to continue to do that. What's really important for us is for our users to have Grindr as the primary app, and then for them to log into the app frequently and use it for a long time so that they're enjoying their experience and have a lot of engagement. I think from that perspective, we are in a very strong position. We know the things that our users want from Grindr in terms of improvements. Specifically, users want more NSFW features, and they want more dating features. The cohort of users who want those things differ, right?

Speaker Change: So we know that some of our users are using our app that already exist.

Speaker Change: And we would expect them to continue to do that.

Speaker Change: It will be important for us is for our users to have an grinder as the primary app and then for them to log into the up frequently and use it for a long time. So that they are enjoying their experience and have a lot of engagement from that perspective, we are in a very strong position.

Speaker Change: We know the things that our users want from vendor in terms of improvements specifically uses wanted more nsfw features and they want more data and features and the cohorts of users who want those things differently. The younger users want nsfw features the older users wanted more dating features and.

George Arison: The younger users want NSFW features, the older users want more dating features, and we are doing a lot to build the functionality for those features. I don't see anybody out there at this time who's really thinking about it from that perspective, between where the user need is, and where we think demand for the functionality is as well.

Speaker Change: We are doing a lot to build the functionality for those features.

Speaker Change: I don't see anybody out there at this time.

Speaker Change: So from that perspective between where they use their need is and where we think the demand for the functionality as well.

Yeah.

Speaker Change: Okay.

Speaker Change: Great.

Patrick Lannon: Great. Returning back to our saved questions, from Daniel D. Does the leadership team have plans for how to improve market value in the next quarter?

Speaker Change: We're turning back to our say questions from Daniel D.

Daniel D.: Does the leadership team have plans for how to improve market value in the next quarter.

Daniel D.: Well, we obviously always thinking about how to create shareholder value over the long term.

George Arison: Well, we're obviously always thinking about how to create shareholder value over the long term. I don't know if I can speak to the next specific quarter, but I can definitely speak to what we're doing over the long term. The way we think about that is by creating value for our users, we would expect the users to pay for that value, which leads to more monetization in the product, that creates value for our shareholders as well. As you can see from our quarterly results, we've been laser-focused on that so far and will continue to do so given that we were fortunate to be able to increase guidance both on revenue and EBITDA for the year. When we think about the long term, there are really four key areas where we are focused, and those are our strategic priorities.

Daniel D.: I don't know if I can speak to the next specific quarter, but I think nothing speaks to what we're doing over the long term in the way we think about that is by creating value for our users and we would expect some users to pay for that value, which then leads to more monetization and the products and that creates value for our shareholders as well.

Daniel D.: You can see from our quarterly results, we have been laser focused on that so far and we'll continue to do so given that we were fortunate to be able to increase guidance, both on revenue and EBITDA for the year.

Daniel D.: When we think about the long term that really four key areas, where we're focused I know they are a strategic priority. So number one we got a key improving the user experience.

George Arison: Number one, we've got to continue improving the user experience. We've done quite a bit on that already, and we'll continue that in the future. In Q2, we released a new home screen. We also released a new profile page, which has gotten really good feedback from users, and we'll continue to make similar investments for our users to make the app be better. Number two, we continue to invest in monetization and drive conversions to be higher. We had 55,000 new paying subscribers in the quarter, which we are very happy about. The weekly product has done very well, and we expect it to be an important contributor to the year. Number three, this is something that we've spent a significant amount of time on, is really planning for the future.

Daniel D.: Done quite a bit on that already and we will continue that in the future. In Q2, we released a new home screen and also released a new profile page, which has gotten really good feedback from users and we will continue to make similar investments for our users to make me out be better number two we continue to nimble.

Daniel D.: Monetization and drive conversion to be higher.

Daniel D.: 55000, new paying subscribers in the quarter, which we are very happy about and we thought it has done very well and we expect it to be an important contributor to the year.

Daniel D.: Number three and this is something that we've spent a significant amount of time on is going to be <unk>.

Daniel D.: Planning for the future looking ahead to the things that with the users want and have been asking for for a long time that we've not had enough money into belt and really going after those on product through those products and those features we believe that we'll be able to drive monetization.

George Arison: Looking ahead to the things that the users want and have been asking for a long time, that we've not had an opportunity to build, and really going after those products. Through those products and those features, we believe that we'll be able to drive monetization to be higher. We've spoken about this in our shareholder letter, but we're competing. Things like more à la carte offerings we think users very much want and we have on the come. Lastly, being very engaged with our user base and our community. Continuing to serve the LGBTQ community is a focus for us as well.

Daniel D.: To be higher and we've spoken about this in our shareholder letter, but what competing things like more Ala Carte offerings. We think uses very much want and we have an outcome and then lastly, being very engaged with our user base and our community continue to serve as the edge, which community is a focus for us as well. So those are the kind of four strategic priorities that we spoke.

George Arison: Those are our four strategic priorities that we've spoken about at every call, and we think that by focusing on those, we are in a very good position to be able to create value for our users, and through that, create value for our shareholders.

Daniel D.: And about at every call and we see them by focusing on those.

Daniel D.: In a very good position to be able to create value for our users and through that create value for our shareholders.

Manuel fee: Alright next question from Manuel fee.

Patrick Lannon: All right. Next question from Manuel C. What are you doing to make your app more responsive and less battery intensive?

Speaker Change: What are you doing to make your app more responsive and less battery in Texas.

Speaker Change: So it's a really good question.

George Arison: It's a really good question, because I personally have thought about that both now and in the past. The reality, unfortunately, for Grindr is that historically there was a definite underinvestment in technology. That's been corrected in a significant way over the last three years under the ownership that took over from Kunlun. We spend a significant amount of time on the engineering team trying to rebuild the technology stack to make the app be in a position where we could then start building new features. The fact that this year we're launching as many features as we are speaks to the fact that a lot of that work was very valuable and has put us in a strong position to now build a better user experience. Obviously making the app be less battery intensive is part of that user experience.

Speaker Change: Christina.

Speaker Change: I thought about that Scott, both now and in the past.

Speaker Change: The reality Unfortunately for grinder is that historically, there was a definite under investment in technology and that has been corrected in a significant way over the last three years under the ownership that took over from colon and we spend a significant amount of time on the engineering team trying to rebuild that the technology stack to make.

Speaker Change: <unk> be in a position where we could then start building new features.

Speaker Change: This year, we're launching as many features as we are speaks to the fact that a lot of that work was very valuable and has put us in a strong position to now build a better user experience.

Speaker Change: Obviously, making the ought be less better intensive as part of that user experience.

Speaker Change: We also.

George Arison: We also have made the app much faster. I think people have noticed that in the last few months, that's quite exciting. We're also building a lot of things for the future to make the app have AI features in it, both on the generative side and better matching. Investing into the app and making the better user experience is something that we're very much focused on. Now, the reality also is that Grindr is a location-based app. Those types of products, in general on mobile, are quite battery intensive, and so some of it is just the requirements of the product for it to be location-based, and that's not something that we can solve.

Speaker Change: Maybe off much faster I think you will have noticed that in the last few months and that's quite exciting and we are also building a lot of things for the future to make Nab.

Speaker Change: AI features an open the generative side and better matching.

Speaker Change: So investing into the App and make them be a better user experience is something that we're very much focused on.

Speaker Change: Now the reality also is that greiner.

Speaker Change: Location based App and so those types of products.

Speaker Change: General on mobile are quite batteries 10, seven so some of it is just the requirements of the product and for a relocation basin, that's not something that we can comment at all.

Speaker Change: We had a couple of questions about safety and scams two in particular from Christian B, how do you plan to mitigate the proliferation of AI and bot, scammers and identity theft and from Lynette G.

Patrick Lannon: We had a couple of questions about safety and scams. Two in particular. From Christian B, How do you plan to mitigate the proliferation of AI and bot scammers and identity theft? From Lynette G, Are you aware of sextortion scams on Grindr? How do you plan to combat this common scam? And do you have plans for raising awareness with users?

Speaker Change: Are you aware of <unk> scans on grinder, how do you plan to combat this common scam and do you have plans for raising awareness with users.

Speaker Change: I would say in almost every public amongst that I make that privacy and safety point of view that is extremely important and something that we take very very seriously.

George Arison: I say in almost every public remarks that I make that privacy and safety for our users is extremely important and something that we take very seriously. One of the ways that we track that is through flags that we receive from our users themselves, right? The more flags that we get, the worse it is, obviously. Flags can be on a number of things like spam, inauthentic accounts, solicitation, harassment, et cetera. What we are very proud of is that since January 2021, we have seen a over 50% reduction in user flags. That I think is really significant and speaks to the investment that the business has made in improving the quality of the product from the trust and safety perspective. There are several ways in which we've done that.

Speaker Change: One of the ways that we track that is through flags that we receive from our user themselves.

Speaker Change: That would get the worse it is obviously.

Speaker Change: In fact can be on a number of things expand.

Speaker Change: Hunting account solicitation harassment, etc.

Speaker Change: But we are very proud of is that since January 2021, we have seen over 50% reduction.

Speaker Change: Their labs.

Speaker Change: That.

Speaker Change: I think that is really significant and speaks to the investment that the business has made in improving the quality of the product from the trust and safety perspective.

Speaker Change: There is several ways in which we have done that and number one way to grow in the customer service team.

George Arison: Number one, we've grown the customer service team to manage claims and reports that come in from users in a pretty significant way. That's an important and significant investment that we're making in the product. We've also developed a machine learning capability that allows us to detect spam and unsafe activity and proactively remove it. Then we've also built a fairly detailed set of policy guidelines that educate users about what is allowed and what's not allowed to do. Obviously, we are a social product and getting spam and unsafe activity down to zero is next to impossible for any social product, but it is something that we are laser-focused on, trying to ensure that we have as good of an experience as our users can have and expect. Concurrently with that, obviously, we need to be focused on privacy as well.

Speaker Change: To manage.

Speaker Change:

Speaker Change: Claims and reported coming from users in a pretty significant way and that's an important and significant investment that we're making.

Speaker Change: And we've also developed a machine learning capability that allows us to detect spamming and legal activity and proactively remove it.

Speaker Change: And then we've also build.

Speaker Change: The detailed set.

Speaker Change: Is that a policy guidelines that educate users about what is allowed and what's not allowed to do.

Speaker Change: We are a social product and getting.

Speaker Change: Sam and unsafe activity down to zero is next to impossible for any social product, but it is something that we are laser focused on trying to ensure that we have as great of an experience as the users can have an exact concurrently with that obviously, we need to be focused on privacy as well.

Speaker Change: User demand protection of their identity and they frankly required in a lot of places as well because.

George Arison: Our users demand protection of their identity, and they frankly require it in a lot of places as well because of the situations that they live in, whether it's because it's illegal to be gay in those countries or because it's difficult to be gay in those countries or locations. We do have to always be thoughtful about the safety of our users and the privacy of our users.

Speaker Change: Of the.

Speaker Change: The situations that they live in whether it.

Speaker Change: Because it's illegal to be gay in those countries or because it's difficult to begin those countries a location and so we do have to always be thoughtful both about the safety of our users and the privacy of our users.

Matthew P: Next question comes from Matthew P <unk>.

Patrick Lannon: Next question comes from Matthew P. Grindr is in a unique position as the most recognizable LGBT app on the market. How do you plan on leveraging that in the long term to grow the brand beyond its reputation as a gay men's hookup app?

Matthew P: Greider is in a unique position as the most recognizable LGBT app on the market.

Matthew P: Do you plan on leveraging that in the long term to grow the brand beyond its reputation as a game and hook up app.

Matthew P: So we are very fortunate to have a very powerful brand.

George Arison: We are very fortunate to have a very powerful brand, with nearly universal brand recognition in our user base and beyond, which puts us in a very positive position. The way we think about it and the opportunities to expand the product is through the use cases, starting first with the use cases that already happen in the product. We know that Grindr is used in a lot of other ways besides hookup, which was the primary use case for which it was built. Obviously, dating is the second-biggest use case, but social connections and friendships is another significant component. We also know that our users use Grindr a lot for travel. Frankly, a lot of them also use it for health information. We are a source of health information in a lot of countries, maybe the only source of health information for LGBTQ users and people.

Matthew P: Yeah, you know what the unit.

Matthew P: So on brand recognition.

Matthew P: The base and beyond.

Matthew P: Which puts us in a very positive position.

We the way, we think about it and the opportunity to expand the product is sort of the use cases, starting first with the use cases that already happened in the cloud.

Matthew P: Now that <unk> is using it and a lot of other ways. Besides hookup, which was the primary use case for which was built obviously dating is the second biggest use case, but social connections and friendships is another significant component. We also know that I use it use grinder allot for travel and frankly, a lot of the multi use it for health information.

Matthew P: We are source of health information in a lot of countries.

Matthew P: The only source of help English LGBTQ users.

Matthew P: And and people and we also know what happened last summer where during the multi part.

George Arison: We also know what happened last summer where during the monkeypox epidemic, Grindr played a really critical role in educating our users about what they need to do and how they could protect themselves. The set of use cases that we service is very broad. The functionality that we have in the app is not as broad. A lot of what we're doing today is to ensure that we can build the functionality to support the use cases that already happen within the product. By doing that, we believe that our users will have a better experience. They will see more value in the app. Through that, we will be in a position to create more shareholder value through better monetization as well.

Matthew P: Mike Greiner played a really critical role in educating us about what they need to do and how they could protect themselves and so the set of use cases that we service is very broad functionality that we'd have in the app is not as broad and so a lot of what we're doing today is.

Matthew P: To ensure that we can build the functionality to support the use cases that already happened within the product by doing that we believe that our users will have a better experience and we'll see more value in the app and through that we will be in a position to create more shareholder value for a better monetization as well.

Speaker Change: We will take one more question from Jeff J T.

Patrick Lannon: We'll take one more question. From Javonte T. Are you planning any influencer collaborations in the near term?

Speaker Change: Are you planning any influencer collaborations in the near term.

Speaker Change: It's a great question.

George Arison: It's a great question. First of all, I hope everyone stays tuned for some announcements on the leadership on our brand marketing side that will be coming out in a few weeks as well, which we're excited about. Historically, Grindr has collaborated a lot with artists and influencers in our community. For example, our in-house creative team developed and launched the Bold Gays influencers, which since have garnered 11 million followers across social platforms, with prime-time television appearances and international media coverage as well. It's something that we've done and will continue to do. Obviously, people come to our social platforms. We have over 1.8 million followers across Twitter, TikTok, Facebook, YouTube, et cetera, in order to see really fun and sexy content and enjoy themselves. That is the objective of our social presence, and that's what we want to continue doing.

Speaker Change: So first of all I hope everyone stays safe tuned for some announcements on the leadership on our brand marketing side that won't be coming out in a few weeks as well, which we're excited about.

Speaker Change: Historically went to collaborate a lot.

Speaker Change: And influencers in our community.

Speaker Change: For example, our in house creative team and develop and launch the old days Influencers, which since have garnered 11 million followers across social platforms.

Speaker Change: Primetime television appearances and international media coverage as well and so it's something that we've done and we'll continue to do.

Speaker Change: Obviously.

Speaker Change: People come to our social platforms, which we have over $1 8 million followers across Twitter Tictoc Facebook Youtube etcetera.

Speaker Change: Where do you see really fun and sexy content and enjoy themselves and so that is the objective of our.

Speaker Change: Social presence and that's why we went to when are continuing and we want to make sure that it ties back to our brand and what we want the story behind <unk>.

George Arison: We want to make sure that it ties back to our brand and what we want the story behind Grindr to be. I think that is what we've been aiming to do so far, and we'll continue to do in the future.

Speaker Change: So I think that is what we've been aiming to do so far and we'll continue to do in the future.

George Harrison: Thank you George Thank you very much everyone, who dialed in to listen I'll turn it back over now to the operator to close out the call.

Patrick Lannon: Thank you, George. Thank you very much everyone who dialed in to listen. I'll turn it back over now to the operator to close out the call.

George Harrison: Great. Thanks, so much thanks.

George Arison: Great. Thanks very much.

Operator 2: Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines.

George Harrison: Thank you ladies and gentlemen, the conference has now ended thank you all for joining you may all disconnect your lines.