Grindr Inc. (GRND) Earnings Call Transcript & Summary

Hello, and welcome to Grindr's First Investor Day. I'm Tolu Adeofe, Head of Investor Relations. And on behalf of the entire Grindr team, we're so happy to have you here in the room with us in New York. We also want to give a special welcome to those of you joining via the webcast. Before we begin, I will remind everyone that today's presentations contain non-GAAP financial measures as well as forward-looking statements regarding our outlook and future performance, which are subject to risks and uncertainties that could cause actual results to differ materially. You can find more information regarding forward-looking statements and the reconciliation to GAAP financial measures in the presentation and press release made available today and posted on the Investor Relations page of Grindr's website as well as our filings with the SEC. And now turning to the agenda. You'll be hearing today from members of our executive leadership team, followed by a Q&A session at the end. Our speakers today are: our CEO, George Arison; our Chief Product Officer, AJ Balance; our SVP of Brand Marketing and Communications, Tristan Pineiro. We'll have a brief break, and then Vanna Krantz, our CFO, will provide a financial wrap up. Afterwards, all of today's speakers will be available for a Q&A session, and we ask that you please hold your questions until that time. [Operator Instructions] Lastly, a replay of today's webcast, plus our presentation materials will be available on the Investor Relations website shortly after today's event. All right. Let's get started. Please enjoy the short video before we welcome our CEO, George Arison to the stage. Thank you. [Presentation]

Please welcome to the stage Grindr CEO, George Arison.

Hello, everybody, and thank you for being here with us today. I'm so happy to be here with all of you at Grindr's first ever Investor Day. And it's also awesome to see so many faces I've talked to in video over the last few -- couple of quarters, but haven't met in person. So looking forward to chatting. I'm excited to be discussing Grindr's success as a product in the business and where we're going with a product in the service of our users. It's particularly fitting that we are here today together in New York during Pride Month, as we celebrate all the great wins that we've had since Grindr's founding in 2009. In April, as part of our 15th anniversary, we publicly outlined our mission for the future, to be the global gayborhood in your pocket and, through its success, to make a world where the lives of our global community are free, equal and just. This mission resonates with all of us, I hope, because it's both descriptive and aspirational, descriptive in what Grindr is for a lot of users today and aspirational in where we will be taking Grindr in the coming years. Physical gayborhoods in cities around the world have existed for decades. They are really important hubs for our community. Think of Logan Circle and Dupont Circle in Washington D.C., Chelsea and Hell's Kitchen here in New York, West Hollywood in Los Angeles, Soho in London. Gayborhoods are places where members of the LGBT community can connect with each other, access information that is relevant for their lives. In the case of those, they'll figure themselves out, those individuals can learn what it's likely to be gay. And gayborhood is a community of businesses, gyms, bars, restaurants, shops, doctors' offices and many other resources specifically catering to the members of the community. My own life is an example of what a lot of people do when they finish college. After college, I moved to D.C., where I very intentionally established myself in Logan Circle to be around other people like me as I was figuring out if, when and how to come out. Connecting in person and building trust with others like me was really important. It enabled me to build relationships, romantic ones, and friendships, some of which are key relationships in my life today. I even met my -- one of my first co-Founders in a gayborhood in D.C., and that's a story that you will hear from countless of other people. However, not everybody has an opportunity to live in or near a gayborhood, which is where Grindr comes in. For millions of our users, Grindr replicates that sense of community that is present in a physical gayborhood in a virtual/digital one. By being the gayborhood in your pocket, we bring that community of our users all over the world to each other with immediacy. This is the reason why Grindr is so enduring as a product and the reason why Grindr is so much more than just a dating application, more akin to a social network. Over the years, our users have found ways to "hack the app" to create additional use cases and benefits from the product, whether it's building extended relationships or travel, discover and recommendations or obtaining health information or making professional connections. As we scale Grindr to fulfill our unique role as the global gayborhood in our users' pocket, we will be building functionality for these various use cases that are already taking place in the app, but for which we do not yet have clear functionality. As we do this, connection and casual dating, which have been Grindr's bread and butter since the very beginning, will remain front and center. But we also know that users want additional functionality to enhance the quality of their lives. This includes access to other broader sets of social relationships and community. They also want to have access to curated relevant information that will improve their life experiences. And we at Grindr are uniquely positioned to meet this user need. We're at the beginning of a multiyear journey to build out the functionality and services to fulfill this gayborhood vision, and we're excited about what is possible for the app and what we can do for the community at large. The trust that we've earned from users around our original use case gives us the invitation to help them in these other parts of their lives as well. I'd like to next turn to what makes Grindr so unique. Grindr is special because it was built by gay people for gay people. Because it grew out of the community at large, Grindr has become the connective tissue for gay and bi people all over the world. For almost everyone in the user community, Grindr is one of those five apps that you have on your home screen for a long time at some point in your life like Instagram, Twitter/X and Facebook combined. Grindr provides a network for our users to be themselves. We can and do help people connect with each other in their home countries. But as a global app, we also connect people across the borders. It is this deep understanding of our community and focused on serving their needs that has helped Grindr become such a key part of gay culture and everyday life. Back in 2009, in the hey days of mobile, Grindr was one of the very early iPhone apps and among the very first to take advantage of iPhone's geolocation capabilities in a really transformative way. Grindr was built on a very special premise of open architecture, which enables the user to see everyone who is around you and to message to anyone on the grid. I'll tell a little bit of a personal story. I remember vividly the first time I learned about Grindr in 2009 when a friend of mine in D.C. pulled put his iPhone. We're at a bar, and suddenly, you could see all these people in the bar on the app. The power on that, at least on me, was really incredible. I had been building a startup on Blackberry at that time, and so I was not using an iPhone. But right after that experience, I went out and got an iPhone because I felt like I needed the app to use, and I was not the only one. In those early days, Grindr helped iPhone adoption in the community in a pretty significant way. At the time, the primary use case was immediate casual connection to those around you. Over the years, this expanded largely organically with changes driven by the users. As a company, we now extending Grindr's use cases to follow our user behavior. We are doing this by focusing on their intent. Grindr's biggest strength is our users and the connection that we have with them. Our audience is large, generally affluent, skews to young adults and is highly, highly engaged. They come to Grindr for a lot of things, from casual dating and long-term relationships to seeking information and resources for many aspects of their lives, from health care like our free HIV testing ordering program to entertainment. Our users are highly educated. According to a 2021 study, roughly 52% of gay men in the U.S. have a bachelor's degree, while the overall national number is 36% for all adults. 6% of gay men in the U.S. have an advanced degree, a JD, MBA, MD, PhD, which is about 50% higher than that of straight men. Our users are also fairly affluent. In the U.S., the median age -- median household income for a gay male couple is $128,000 compared to $75,000 for the total population. Our users are heavy consumers with lots of disposable income, and we'll share some data about that in a little bit as well. And our user base is really evolving. Things that may not have been important to them in the past, like long-term relationships, family, life and retirement, are becoming really important today. It won't surprise anybody here that a gay man who lived their entire life in New York City probably is not going to be retiring in the villages. Our engagement is also pretty extraordinary driven by chats, messages and photo sharing, enabling a powerful viral network effect. This creates awesome opportunities for growth in paying users, better results for advertisers and increased long-term monetization. Our users spend roughly 1 hour in the app per day. As a comparison, people spend about 30 minutes per day on Instagram. In 2023, our users produced more than 121 billion chat conversations with one another. Last year, they also shared 2.6 billion albums. This is a product that didn't exist until mid-2021 and scales completely virally with absolutely no marketing in the app. And lastly, Grindr [ bleeds ] into in real life like no other app. Location shares are a great proxy for when users actually make in real life connections. In 2023, we saw 500 million location shares on Grindr. This ability to transition from online to in real life keeps our user base really engaged with the product and makes them very loyal to us, and that's why our user retention is so high. These engagement stats are the reason I'm so excited about the future and about our ability to grow our business in the years to come. Grindr also benefits from a very powerful brand. We have nearly 90% brand awareness in our target demo. We're a household name that's consistently referenced to in pop culture, TV, movies and music. Since I took this role almost 2 years ago, I've only had 3 instances where I had to explain to somebody what Grindr was. This affords us the opportunity and the privilege to take advantage of our incredible brand halo and extend it into new products and features with users. Tristan will discuss this in great detail later this morning. I'd like to turn next to our future. Our architecture, our highly engaged user base and our brand together form a very strong moat and make us fundamentally differentiated. We're a network based on connections, not just a dating application. As we think about the future, there are 3 companies with unique moat and experiences are applicable to Grindr in how we plan on expanding our app. The first one is LinkedIn, which has also a very uniquely engaged user base. Because top 20% of all employers are on LinkedIn and the people that you work -- want to work with are on LinkedIn, the result is that everybody else is on LinkedIn as well. LinkedIn also has this ability to expand beyond job search, as they've done with education. Second example is Uber, a company that has taken its most unique asset, the driver network, and use it to become a true platform through product expansions. Many of Uber's product expansions were built on product hacking, where users were engaging in -- on the app way before those services were offered on the app. Uber went from offering one type of car sharing service to offering many different types of car services, to enabling package pickups and drop-offs and then expanding into restaurant delivery of food. Many people, myself included, were already using Uber to get takeout food delivered way before Uber Eats came on the market. And third, Instagram, which uses great technology to better understand user behavior and, through that, user intent. With that, it has been able to deliver users with the content that they want, with relevant and highly engaged advertising and even in-app shopping in some cases. Like LinkedIn, we have a really engaged and highly strong user base that is very devoted to the app. Like Uber, we have a platform that can utilize and that we can utilize to grow into new adjacencies. And like Instagram, we can understand user intentionality and deliver to users experiences that they want and need, even in cases when users don't actually realize that. By drawing on these 3 core capabilities, Grindr is creating a broader social network that specifically caters to our highly engaged and very special community. We've built a fairly good track record of strong financial performance, and we're still in our early innings as a public company. We have sustained strong growth and are operating in a highly efficient way. Given the huge potential of our market and growth in our product, we are focused on 4 key growth levers. Number one, we are improving and advancing our core product and, through that, driving strong monetization. This includes making the casual connection use case, which will always be Grindr's bread and butter truly awesome. To do this, we are launching a broad suite of features called Right Now, along with improving our UX, an overhaul of our chat functionality. The core use case also includes creating AI-driven experiences for our long-term relationships. We've often called this dating. When Grindr was built, there was less of a need for these types of features for long-term relationships because fewer of our users wanted them. The world has changed now. More users are pursuing long-term relationships and even marriage and are actively using Grindr to find long-term partners. We're developing specific features to facilitate this use case. We have significant information about our users and their interest. With machine learning and user consent, we can use that information to create better matching and make it easier for our users to connect with the right people for them. We're also working on a generative AI tool that we call wingman that can help solve a variety of different dating-related problems for our users. Key principle to our approach to product innovation is to focus on user's intentions, making sure that the app serves the various intentions people have in the product. This requires a deep understanding based on data of how people use our app and what they're telling us they want. AJ will spend quite a bit of time later this morning digging into our product road map with a key focus on intent in a little bit. The second lever for growth is our advertising business. With a highly engaged user base, which encompasses people with high disposable income and a willingness to spend on experiences, we believe there is a significant opportunity to grow this business. The third lever is focused on growing our international revenue. Grindr has a significant global presence. 75% of our users, but only 40% of our revenue comes from outside of North America. Our growth potential abroad is pretty significant, and there are secular tailwinds that fuel our international growth. For example, Thailand just approved gay marriage last week. We hope and expect that more countries become more accepting of all people in the LGBT community and their desire to be their true authentic selves, and that will help drive our growth abroad. And the fourth lever encompasses our efforts to extend our product into adjacencies that better serve the needs of our users in the gayborhood, areas that go beyond dating and relationships, for example, into travel and health and wellness. The first 3 levers represent the vast majority of the team's focus. As AJ and Vanna will discuss shortly, these 3 will be the key drivers of our financial performance over the next couple of years. The fourth is in development and will evolve over time. With that, I wanted to give you a taste of what Grindr's gayborhood expansions opportunities look like. Travel and the events and experiences that our users enjoy when they travel is a great example. Our users naturally gravitate towards high-quality events. Nearly every month, there are several big experiential events in the U.S. that had affected a lot of our users to come together. This week in New York, there are quite a few of them. Today, Grindr has already actively used during these events, but we lack features to support all the ways that our users want to use Grindr when they're happening. For example, Gay Ski Weeks happen every year in places like Aspen and Park City. Ticket sales for ski week usually sell within a few hours of opening up. Imagine if our users could have a special tag on their profile well in advance of the event that says that they're going to Aspen Ski Week. We could then couple this with the capability to match all the users that are attending Aspen Ski Week with each other prior to the event, making it easier to make in real-life connections at the event. This will both improve our user experience and be a way for local businesses to engage with our users attending the event as well. Now I want to spend a moment on 2 topics that will help us unleash our full potential and allow us to achieve our audacious goals, our company culture and use of AI. These are really fundamental to how we will operate and how we will succeed, creating great value for both our users and our shareholders. We are building a performance-driven culture of excellence in execution. Having the right people resources to execute on is critical for this, and I'm really proud of the talent that we are now attracting to Grindr. I believe strongly that lean and driven teams are best when you strive to achieve audacious goals, so we will always be very deliberate in our hiring. To foster strong execution on the team, we rolled out our operating principles last year, you can see those on the screen, defining how we work and what we expect from our employees. We've been operationalizing this, this year, and the process is going really well. That said, culture does take time. And as we continue to grow our team and put our operating principles into practice day in and day out, this will be a long-term focus for the business. AI is a paradigm shift, the same way that the iPhone was 15 years ago. And this -- for this reason, we are harnessing AI in both what we build and, as importantly, how we build it. AJ will discuss how we are incorporating AI into our product with their deliberately built features that will provide real value to our users. None of us yet know how users will use AI. We can make some predictions, but we don't know. What we are striving to do is give users useful AI functionality and allow them to tell us what is working for them and how to best improve these capabilities. We're also harnessing AI in how we work. For example, this summer, we have several AI engineering interns that are working at Grindr. These are synthetic software engineers that are capable of executing on contained coding tasks independently under senior engineer's supervision. 18 months ago, this was probably an unimaginable for most people. During our [ engineer's ] hackathon earlier this summer, I had an opportunity to see how effectively these synthetic software engineers can be in increasing speed and quality of the delivery of the product. I believe there will be significant opportunities for this synthetic engineers to evolve and improve. But as they fulfill their promise, as I expect them to do over the next couple of years, that will create incredible leverage for how our engineers works and how much a strong individual contributor can deliver in a given time frame. Incorporating the use of AI in how we work is a principle that we'll apply not just to engineering, but every function across the business. As I get ready to wrap up, I want to talk to you about something that is really special at Grindr and is very important to me personally. Being the gayborhood in your pocket is primarily about providing our users with an incredible product experience and, through that, growing a great, highly profitable business. But when it comes to fulfilling our promise, it also means being a champion for the rights of the broader LGBT community around the world, something that we do through Grindr for Equality, or G4E, our public good initiative, which is fully integrated as a part of our business team. G4E has 3 global priorities: number one, achieving marriage equality and decriminalization; number two, increasing access to health resources, especially HIV prevention and testing; and number three, empowering users with education about safety as well as physical and emotional well being. And in the U.S., G4E is also prioritizing enhancing access to fertility care and adoption, especially given that that's becoming more important to our users. G4E advances these priorities by building in-app features for health and safety, by supporting nonprofit advocacy and impact groups financially, especially internationally, where the impact of every dollar is very high, and enabling these groups to communicate with our users through our platform. Additionally, by partnering with nonprofit and governments, we provide access to free HIV testing and other sexual health and safety resources in the app. And that provides a great segue back to our mission, to build a global gayborhood in your pocket and through our success to make a world where the lives of our global community are free, equal and just. The community that we serve is very, very special and has unique needs. For 15 years and counting, Grindr has built a strong relationship with this community, and that has been borne out in our growing user base and our phenomenal engagement. This relationship gives us an incredible opportunity to create value, both for our users and our shareholders. Everything I've talked about today, from improving our core product road map to upping our ads game to growing internationally and to gayborhood expansions, all of this is in the service of our users, and ultimately our mission. When I was approached about this role about 3 years ago, I quickly realized that this was an amazing opportunity, but also an awesome responsibility, to oversee such a vital product and to serve our users day in and day out. It is this user focus that has driven our success to date and what will determine our future success and allows to create the most shareholder value. We're in a great position to realize these opportunities. We have a strong moat, a clear road map and strategy and strong cash generation. And we have an amazing team, seasoned smart executives and talented employees who are dedicated and driven by our mission. Let me introduce those key leaders on our team who will be speaking to you today. AJ is our Chief Product Officer. He's historically used the app, has incredible intuition about our users on how they use the product and does a great job at converting big product ideas into achievable launches that serve our users well. He's been instrumental in significantly increasing our productivity and driving our cultural change. Tristan leads Marketing and Communications. He also has used the app historically for many years and is an awesome storyteller. He's added great rigor to our marketing efforts and quickly scaling efforts across a variety of channels to help us expand our brand. And Vanna is our CFO. She is an experienced leader who brings strong data-driven approach to everything she does and helps us maintain strong operational rigor and performance. And with that, I will leave you with AJ, who'll talk about our product. Thank you very much.

Good morning. I'm AJ, our Chief Product Officer at Grindr. I've been with the company for nearly 3 years, and I'm excited to talk to you today about our product and the road map ahead. Like George shared, we're building the global gayborhood in our users' pockets, and I'm going to talk to you today about how we're going to productize the gayborhood. This is a big part of why I joined Grindr. I myself came to a gayborhood, West Hollywood, California, when I was 22. I had never been around so many people like me. And through the gayborhood, I found love, friendship and community, which have shaped my life and opportunities ever since. And many of those connections, I made on Grindr. From one of my closest friends in San Francisco to reconnecting with an old friend from college, to making a friend in my building during the pandemic, to making friends in Spain while traveling. Helping bring that type of opportunity to people around the world and the ability to innovate a product that I've used for over a decade, but that still has so much potential is a big part of why I am here. Productizing the gayborhood is fundamentally about harnessing evolving technology to meet the needs of our users, which we've done since our founding. We're a product built by our community for our community. Building the gayborhood will involve 2 key components, which we'll talk about more in depth. First is our core. We're starting from a very strong foundation. Casual dating will always be front and center for Grindr, but innovating and optimizing our core products will be key. We'll do this in 3 ways: first, by building new products to better capture user intent; second, by improving our pricing and packaging; and third, by internationalizing our product, localizing it for markets around the world. We'll do that in a way that drives more monetization by enhancing our existing subscription tiers and add-on features and developing new ones as well. We'll also leverage AI and machine learning as critical foundations. They'll be key underpinnings for all of this. Because of our strong foundation and the wide range of use cases we already serve, we'll be able to expand into more adjacency, building out many aspects of gayborhoods in ways that scale globally with technology. First, I want to share a bit about our users and their needs. We conducted a robust segmentation effort among our whole audience, the full GBT community, not just those who use the app today, to better understand both our current user base, but also our potential users as well. We've identified 6 target segments. The first 3 on the top row are those that are most drawn to our original use case. We call them the connectors. They love us. They pay us well for the value they get on the platform today. There are a few different types of connectors, from those who are proud about publicly using us to those who are a bit more discrete or subdued about their use. But they're here for connections. We want to give them more value, so that we can continue to bring more of them into our ecosystem, keep them engaged, get more of them to want to pay and get some of those who want to pay today to pay more. Another group are social users. These are the users who are using us for browsing or chatting today more so than meeting up. They still get value from us, but they likely could get even more value from social features dedicated to things like browsing and chatting. We need to support these users as well as they're valuable to other users for social connections and a key part of our ecosystem. A third group of users are those who want to settle down and are more oriented toward the romantic. There's a bigger need among these users for finding relationships, but traditional dating apps haven't served them well. So solving their needs is a big opportunity for us. We're learning more about them and building products for their romantic intent, to bring more of them into our ecosystem and better monetize them. We're starting from a strong foundation. We're a real-time location-based connectivity app. The product is simple, but powerful, but it hasn't yet caught up with all of the ways our users use it or want to use it. It has 4 main interfaces today, but still fairly limited functionality for an app in 2024. You create a profile, you then browse others, and you can see who's browsing you. This is done in real time. It shows you who was online in the last hour, and it's location based. You see people in your grid ordered by distance. You can then chat and message other people with our open messaging system. You can message others or be messaged without needing to swipe or match first. This open architecture is a key component to what makes it so engaging and differentiated, along with our real-time and location-based connection model. On other dating apps, it can take days or even weeks to make a connection asynchronously. When you open Grindr, you can get 10 messages in the first 2 minutes. It's highly engaging. We also have a very limited map, which I call a secondary interface. You can't do a lot with it today, but it presents a big opportunity for the future. Our monetization model is similarly simple but powerful, and it aligns with how our users use the product. Users pay for access to connect with one another through either browsing, users pay to browse more people than the 99 profiles they get in our free tier or they pay for what we call inbound, users pay to see who's browsing them. We do this today through 3 products. We have 2 subscription tiers, which have paywalls at both the browsing and inbound stage, XTRA, which is our $19.99 per month tier in the U.S. and Unlimited, which is our $39.99 per month tier in the U.S. We also have one primary add-on feature called Boost, which is $9.99 in the U.S. on iOS. We're also starting to monetize new features like Albums, which has both a free and a paid component and helps grow subscribers. But this barely scratches the surface of our monetization potential. Other dating and social products have much richer premium feature sets, features that we can adapt, like we did with our Boost feature. We also have advertisements for users in our free tier, which are a smaller portion of our revenue, but are a way we monetize our free user base and they provide an additional value proposition for users to pay for one of our premium products. Vanna will share more about ads in a bit. Our freemium business model is a robust part of the business and a key driver of user growth and engagement. Our large free user base gives us a dedicated and resilient network of users that are valuable to one another and to our paying users. However, there's evidence that the difference in value between our free tier and our paid products is not as high as it could be. Users get a lot of value in the free tier. App engagement is also very high among both our free and our paid users. There are 2 ways for us to approach monetization going forward. The first is adding new value to our paid products and adding more paid products to get more users to want to pay and to get some of those who pay today to want to pay more. A different approach would be to optimize the value we give in our free tier relative to our paid tiers through things like new paywalls or higher ad volumes. This approach would get us shorter-term results faster, but risks the product in our ecosystem more for the long term. So we're leaning more into the first approach, adding more value through new products, as we believe it's the best way to grow for the long term. But a quick note on this approach. It takes time. The impact is realized not just over the next month or 2, but over the next several years. To serve user as well as the gayborhood, we need to be privacy forward. Privacy is uniquely important to our community. Unfortunately, in many places around the world, sometimes even here in the U.S., the consequences of coming out and being out can be serious. This means that we put users' privacy front and center and make decisions in our product design that empower users who feel the need to be discrete to stay discrete. This is why, for example, we don't require users to submit photos when they create a profile. We focus on 3 key pillars of privacy: user choice, users get to decide what they want to share and what they don't; second, data minimization, we limit how much data is required from our users; and third, transparency, we're explicit with users on what we do with their data. Our product has not yet captured the full potential of the multiple use cases and intentions our users are using it for today. As we discussed, we're starting with a strong foundation. Casual dating will always remain front and center for Grindr. Our road map from there starts with our core. First, we'll introduce, innovate and optimize new products to our core to create and capture more value. We'll do this by building new products to better solve user intent. Intent means helping users find others to connect with who want the same thing they do, for the user who wants to meet up right now for a casual date or for the user who wants to focus more on finding a long-term relationship. As part of this, we'll build a set of 8 new products, which will have new dedicated interfaces for key user intense. As we do so, we'll extend our core product and interfaces. We'll preserve our main grid and open messaging model to keep the experience focused, elegant and engaging, but we'll build extensions into other parts of the app with feedback loops back to our core experience, much like Instagram has done to extend its core product by building new tabs for new experiences, but having feedback loops back to its main feed. These new products will drive monetization, both by creating new monetization mechanism, new add-ons and possibly new subscription tiers as well as adding more value to our existing monetization mechanisms for XTRA and our Unlimited subscription tiers. In addition to building new products, we'll also improve pricing and packaging, offering new prices and packages like we did with our extra weekly package. And we will more effectively merchandise our offerings through product marketing, which is a new capability we're building now. Third, we will internationalize by localizing our core product more effectively through translations, localized imagery, custom features for select large markets and optimizing our pricing around the world. AI will be a key foundation across these products, particularly for the use case of finding a relationship. The rapid evolution of AI and ML technology will become a key foundation for the future. Much like the advent of the smartphone was in 2009, we will harness this paradigm shift to better meet the needs of our users. AI will become particularly helpful in discerning intent and creating even more seamless experiences that are truly personalized to our users and their given intent at any moment. We also see significant opportunity to expand beyond our core given the many use cases and needs in the gayborhood, beyond dating to travel, local discovery, health care and more. But our 3-year base revenue model only factors revenue from our core, as that's where we have the most line of sight. So we see these expansion areas as upside potential as we expand further over time. I want to share a bit more about how we develop products as this is key to our road map and our approach to driving revenue growth in the coming years. We really think of the road map as a product portfolio. Some of our products have asymmetric upside potential and can become home runs, much like Boost and our weekly planned package, some of which are more incremental but still meaningful, like our Albums feature. And some of the products lay the foundation for future areas of expansion as we build them out, which we'll talk about in a bit. As such, we develop our products in a highly iterative and rigorous fashion by, first, conducting foundational research to better understand our users through interviews, focus groups and surveys. We then ideate and create a vision of what the feature could become, leveraging technology to better serve the needs of our users. We scope and design a first version or a minimum viable product. We can then launch that into testing with real users to get feedback and data along the way. This includes A/B testing to see how users adopt to the feature in real life. In most cases, we don't fully understand how users will use the new product until they start using a version of it, which is why we build this way. And we want to measure the full effects of a new product on our ecosystem. Often, it takes 2 to 3 versions to develop a new product. And at that point, we launch it to realize the full impact and revenue potential of it. What this means is this process takes time. This can take on the order of 12 to 24 months, especially for our larger initiatives. I'll share a bit more about how this plays out when we look at the road map and time line together. But the approach is highly iterative, which helps derisk key assumptions and increase the odds of success for the portfolio overall. So again, we believe this is the best way to drive long-term value. Now let's talk about how we will be developing our core product, starting with the Right Now feature. From the foundational research we've done, our users already use us for a variety of use cases. Of course, a large number use us for casual dating, the original use case for which Grindr was built in 2009. But a very large number of users, over 50%, use us for the traditional dating use case as well, and many report having more success given the size and engagement of our user base. A large portion of users, around 60%, also use us for the social use case, chat or find friends. When there are multiple different use cases occurring in the same product and the product features and functionality haven't caught up yet, trying to find others with the same intention at the same time is challenging. User who wants to date is having a very different conversation than the user who wants travel recommendations. Most of our users, like many of us, are multi-intent. They want to find love, connection, community and are open to casual dating along the way. So as we look to expand to the use cases, productizing intent is going to be critical, both for the core and as we expand. Our efforts on the Right Now feature illustrate how we plan to do this. By productizing intent, through a new interface in the app, introducing new monetization leverage as part of that, adding more value to our existing monetization mechanisms like our XTRA and Unlimited subscription tier, leveraging AI and ML and building the product in a way that creates future blue sky opportunities to expand. Let's walk through that. First, like we talked about earlier, our approach is to extend our product, to enable new spaces for new intentions while still preserving and enhancing our core interfaces. We'll build a dedicated space for people to meet up for casual dates. This is our gayborhood concept. This is kind of like the dance floor at the bar, not where you're buying someone a drink and asking them on a date, but when you're ready to dance. Something we've learned from research on our existing product is that intent is better shown than told. People with multiple intentions don't always know what they want until they see it. So we'll build a feed in a dedicated Right Now space of the app, where users can post that they're looking for Right Now, along with text and images to show others who are geographically nearby. We know from many other social products like Instagram, Twitter and LinkedIn, feeds are highly engaging for sharing content and content is great at conveying intent. Once a user posts, others can enter the space and reply to those posts via our open messaging system, making it easy to connect. We'll also integrate this experience into our core interfaces and monetization model to drive more value. Users on the main grid can filter for those who are in Right Now. And the existing paywall will apply, creating more value to encourage subscription. We'll also build out a map as part of this feature, which shows users who want to be shown to others nearby. Users will be able to browse the map like they browse the grid today to see those people who are online and nearby and want to meet up right now. There'll be a filter on the map to filter for Right Now. And again, our existing paywall will apply, adding more value to drive better monetization. Creating new surfaces like this, the map can then become a foundation for future gayborhood expansion, like travel and local discovery, which we'll talk about in a bit. We'll also be leveraging AI to help discern intent and suggest to users when might be a good time for them to check out the dance floor when they're in the mood or a potential good connection for them is there as well. We're testing the first version of this feature in one market right now and following a robust product development process towards this vision. Again, we view this as a portfolio. Some features of this Right Now experience may become larger hits than others, but I want to share some details about this feature to give you a picture of some of what's to come. Another key part of our road map is a set of add-on features to better meet the needs of our users and drive better monetization. These add-ons serve another important function. They are building blocks towards larger products and new use cases down the road. They can serve as that first version of a product from which we build and iterate further. They also serve as valuable features with which we can bundle into our subscription tiers to create more value there and drive better monetization in the core business. We've identified 5 key needs for add-on feature opportunities. The first is Roam. This is our first add-on on the road map, and it's already in testing. Roam gives users the ability to move their profile to another location before they travel there to make connections before a trip. It's valuable on its own, but it's also a first step towards unlocking more travel features as we expand. We expect Roam to be launched at scale by Q1 2025. For the next 4 add-ons, I'll describe the functionality, but please note, the names do not represent the final branded names of these products, which we'll share in time. The second opportunity we see is for more Boost functionality. We believe that there is opportunities to give our users additional Boost functionality for even more powerful boosting and the ability to Boost for longer and to people who are even more likely to be a fit for them. The third opportunity we see is built around interest, the ability for our users to indicate a strong interest in someone else by appearing at the top of their inbox, much like the super-like feature in other dating apps. The fourth opportunity we see is around insights, giving our users the ability to get insights about another person and whether they're a mutual fit. The fifth is recommendations, the ability for our users to get personalized recommendations on others who could be a good fit for them. This will continue to be based on our open architecture, where users can message others without needing to swipe, as that's a key differentiator for us. Some of these add-ons were adapting from an existing playbook, like more premium boosting and the ability to send strong signals of interest. And some of these are very much Grindr-specific innovations like insights. Like all products, we think of these as a portfolio as well, some of which will lead to different outcomes than others. Like I mentioned before, our users are already using Grindr for a variety of use cases, and finding relationships is a big one. Most of our users are multi-intent. They want to find love, but are open to casual connections along the way. Finding relationships for the LGBT user base is fundamentally different in several key ways. The pool is much smaller. In any given city, there are fewer people to connect with to find dates or partnership. There are also many subcommunities and interests, specifically different sets of preferences than in a non-LGBT user base, which makes it even harder to find a partner. People also settle down later. The average age of partnership for a gay man is 38 versus 28 for non-gay counterparts. The combination of these means that people are willing to travel further for a relationship and be more flexible on certain criteria like height or age or even nationality and country of origin. This is an opportunity for us to expand the range of users we serve and bring more of those romantically oriented users into our ecosystem. In the app today, a very large number of our users, over 50%, are already using us to find relationships, and many report having more success with that given the size and engagement of our user base. Other dating apps are not serving them well. The size of the pool is more limited, and it's hard to find connections with asynchronous matching. Our unique differentiators like being real time and location based and our open messaging system make it easier to form connections on Grindr, even for other use cases. But the biggest pain point for our users in finding relationships on Grindr today is intent. The user who wants to have a date is having a very different conversation than the user who's looking for travel advice. The rapid development of generative AI and our incredibly rich engagement data creates a big opportunity for us to harness this technology. As we think about building products for finding relationships, we're thinking about it in an AI-first world of how do we create the next generation of features that don't exist today. When tech paradigm shifts like this happen, the products that are built for where technology will be 2 to 3 years out have a chance to leap frog us ahead to the next era. Like in 2009, Grindr's use of location from the smartphone was ahead of its time and part of why Grindr was able to get such a leap. We're pursuing a similar approach with AI in finding relationships. The big opportunities that generative AI allows us in this regard are interactive chat interfaces as a new way of interacting. The use of a much broader range of data, like our chat data, to better understand who users are and who might be compatible with them, which can give us signals that can create much more effective connections. And third, we see a big opportunity in actually explaining to users in a transparent way why the connections they're getting are a good fit for them. This is a big gap and opportunity in the market that we see a key to our product. In terms of what this product will look like, our dating product will leverage AI to automatically create a profile for you that represents you with much more minimal effort and a much more accurate set of data based not only on your profile, but also the massive rich data set that we have on Grindr. We can help you select photos, find your unique interest to add to your profile and help curate your profile automatically to best represent yourself to others. We can also get you better matches more proactively with much less effort based on a more accurate knowledge of your preferences. We can help you have better conversations, give you icebreakers and chat suggestions to help move the conversation along and help you make that connection in real life once you're ready to meet up. We're uniquely well positioned for this given our incredibly rich engagement data, our open architecture, which is a key differentiator, and our ability to make connections with users quickly and easily. We'll maintain an open architecture and the immediacy of our product given it's such a differentiator to better solve finding relationships for our users. We're in early development here. And like I mentioned, this will take time, but it's a large opportunity for us, and we're following our product development process. As you can see with dating, AI will play a critical role as a new tech paradigm. It will become a foundation across the app as we build the gayborhood, powering features like wingman, recommendations and insights. In addition to powering features, AI can help us better identify intent, personalize the in-app user experience and guide our users to the right people and places in the app, including to the right premium products that might be a good fit for them, helping us to drive more monetization in a personalized and targeted way. We forged a partnership with a great technology partner to accelerate our development here, and I have some news to share with you today on this front. We're now testing our first ML-based feature live in the app to recommend profiles to other users to make better connections. I have some additional news to share. We've talked publicly about products like wingman, which is sort of like an assistant or a sidekick across your dating journey to help you succeed. We'll have our first version of wingman and testing by the end of this year. So let's take a look at our core road map. As we discussed, we'll focus primarily on building new products to add more value that users want to pay for, to get more users to want to pay and to get some of our users who pay to pay more. This approach takes longer than optimizing our freemium tier, but we believe it's better for long-term value creation. Here's a bit of detail on the timing of these products. We'll have a steady pace of product launches that gives us confidence in meeting our revenue growth plans. As we go, we'll give you an indication of how early a product is in the development cycle to help communicate the amount of certainty around the time line. Like we discussed, it starts with innovating our core, building the Right Now product. This product is already in testing and will be iterated over the coming months and scaled by the end of 2025. Our product for finding a relationship will come about a year behind that, starting in mid-2025 in testing and scaling by the end of 2026. Our add-ons will be released on a steady cadence throughout with about 1 to 2 per year. Roam is in testing now, and we expect it to be scaled by Q1 2025. Wingman will be in testing by the end of this year. It will take on the longer end of our product development cycle to iterate given the new technology paradigm, and we expect impact to come in 2027. So that's our core and what's included in our base revenue plan, which Vanna will speak about more in a moment. Now I'd like to talk about some gayborhood expansion opportunities. Our approach to expansion is to leverage partnerships along with our platform and distribution capabilities. This allows us to invest in new verticals prudently with minimal investment to gain signal on what's working. To recap, these opportunities are not included in our base revenue plan. We see them as upside. Travel and local discovery is one large such opportunity for us. A staggering 27% of our weekly active users are traveling on Grindr. I'll pause to let that sink in for a minute. 1/4 of our weekly active users are traveling. There are key user needs and opportunities around connecting travelers and locals, knowing where the local gayborhood is in a new city you might be visiting and finding local events and recommendations. The map that we build out for the Right Now product in our core plants the seed for us to create more robust travel experiences over time. It's a great example of how building out our core creates new blue sky opportunities for expansion. With the map and our Roam add-on as foundations from our core, we'll be able to build out better travel and local discovery experiences. For example, we could package some of our existing functionality into a new travel pass package. We can also begin to offer users the ability to see event listings. They could see events near them through a partner, see who's going to be there from Grindr that they may want to connect with, purchase tickets through our partner and, even for some users, participate in an exclusive experience with one another at these events. These big events like Ski Weeks, Coachella, Provincetown, Eurovision, New York Pride this coming weekend are great opportunities for our user to connect. And we can work with these events to create VIP access to Grindr's users, monetized by subscriptions and transactions to our partners. We could also partner with local businesses like hotels and begin to offer listings in the gayborhood. We could partner with boutique hotels and create experiential events in tandem with our event products. We could monetize through partnerships here as well. We'll continue to develop these products towards our ultimate gayborhood vision with user research and data along the way, much like we've done with our other products to date. And this is really just a sample of what we're talking about here, but where we could go from here. Another such opportunity is around personal wellness. There are unique set of user needs among game around health and wellness. Our user's look and feel is very important to them, and there's a variety of information and services we can help them with. 43% of our users have expressed needs and a desire to purchase cosmetic wellness products, presenting a big opportunity. We already have a unique impact on our users' health care needs. In the app today, we offer several health-related fields and sources of information about health, all with user consent. We also play a critical role in messaging in partnership with the CDC around the monkeypox epidemic, coinciding with a significant increase in vaccination rates. We also partner with organizations to distribute at-home HIV testing kits. Personal wellness represents a big opportunity for us. Down the road, we could offer products and services like advice using interactive AI-enabled chatbot experiences to make information that we share more accessible and engaging or even consumer cosmetic medications, which are in high demand for the community. The value to our customers in purchasing these products through our app would be that it's simpler to purchase, and we can bundle it with the other value we offer and other products like XTRA and Unlimited to make it even more cost effective with them. Again, this is a sample of what we're talking about, but where we could go from here. We're early in this journey, and there will be more to come, and we'll share updates along the way. We'll be building these expansion opportunities in parallel with our core. We aim to launch at least one of these into testing by 2025 and iterate it through 2027. We expect these to take longer to realize the full impact, and we have less line of sight so they're not included in our base revenue plan. To recap, we're building the global gayborhood in our users' pockets. We're starting with a solid foundation, a product that is fundamentally a connectivity app where users are already asking us for a variety of use cases that they want and are trying to use the app for today, but without all the features and functionality they need to do so. We'll evolve our core product by innovating our core use case with new features and expanding into new products that better serve user intent. We'll also harness AI and machine learning across our application to become a truly AI-first product position for the future. But we'll do so in a way that reinforces and compounds the value of our core products and monetization model. We have an unparalleled opportunity to impact the lives of this community and build a robust and enduring business in the process. We're prudent in our 3-year revenue plan. All of our revenue comes from our core product and our base plan, and we see upside beyond that in building out the gayborhood further into adjacencies like travel experiences, local discovery, wellness and more. I look forward to partnering in this journey with you and delivering great results for our users and shareholders. With that, I'll hand it over to Tristan to talk about how our brand will evolve and support our efforts to build the global neighborhood.

Thanks very much, AJ. Good morning. I'm Tristan Pineiro, SVP of Brand Marketing and Communications, and it's great to be here this morning. Now as both George and AJ have already mentioned, Grindr already serves as a digital gayborhood to millions of users around the world, and we're focused on evolving our product with functionality that will support a variety of use cases. Coming to Grindr almost a year ago, this gayborhood expansion opportunity really resonated with me for a number of reasons. For example, I've been with my husband for 11 years. However, we still use Grindr to connect with new people when we go traveling for recommendations, to make friends, to find strength in numbers. And I know that I'm not alone in doing this. Over the years, we've seen countless of examples of our users finding endless new use cases for our app to suit their individual needs. And now we're building and amplifying this functionality for them to do so more easily. Over 15 years, Grindr has built an amazing resonant and ubiquitous global brand with an established and unique role in culture. Having worked for other large brands like Candy Crush and Netflix, I can say with confidence that this type of positioning and recognition is what all large global brands aspire to. And to date, we've done it with minimal investment in formal marketing. For example, as you saw in the video earlier, there was the hilarious moment in the Eurovision Song Contest, see it here, where someone opened the Grindr app, and the notifications went off. And the clip went viral, got global coverage, and we didn't have to pay $0.01 for that. To become the #1 choice, brands want to infiltrate and permeate popular culture and conversation to be talked about, to have great recall and recognition. And to date, the great news is that Grindr is already there, with nearly 90% brand familiarity amongst our target audiences in the U.S., which is huge. We also have an enviably strong brand awareness of 60% in other key markets around the world, which presents a fantastic opportunity. We know through our research that awareness is directly correlated to actual usage. The more our audience know about us, the more they use us. Just last week, for example, we launched our Spanish language social media channels, but more on that later. Building brand awareness is traditionally the most expensive part of marketing, and we do not need to do that. Given these levels of awareness, there are 3 main things that we can focus on, creating more positive associations with Grindr and combating incorrect perceptions that are out there to in turn delight our current users and, of course, attract new ones. Supporting the strategic expansion of our core Grindr products as well as launching and landing all our new gayborhood expansion products and helping key stakeholders and partners better understand the product's value and the great things we do for our community. Later, I'll share more about the strategies we have in place to support each of these objectives. Strength, authenticity and worldwide fame of the Grindr brand is what gives Grindr the invitation to productize our global gayborhood. We've been around for 15 years. We were created by the community, for the community and understand our users in a way that other brands just can't. But why do we need to do this? There's a real business impact that we can drive. There are a lot of things beyond our core use case that we've become synonymous with, but don't necessarily want to be synonymous with, which means when we sneeze, we get global attention and not necessarily always in the right way. For example, we announced a return to office in line with industry practices and yet managed to get stories in almost all the national newspapers. Part of this is because Grindr sells papers, but part of it is inherent bias. What do you expect? It's Grindr factor. We know that this happens. We know that it can be a problem for stakeholders associated with us. Part of this is telling our story better, telling the stories of the positive things we do for the community and users every single day all over the world. And this will start to outweigh the negative as we correct the balance. Our fame is both a challenge and a huge opportunity for us that we're now confronting head on. Very intimate conversations and connections happen on the app, and that builds trust because we're there at the moments that matter. Grindr is shorthand for gay connection. You can show up in any country and say Grindr, and people know what you're talking about. We're the Airbnb, the Amex, the Coke of queer connections. This trust that we've built is a valuable asset. And as a new team, we're focused on owning our real narrative, enhancing our brand's value and amplifying our multiple use cases to expand how and when people think about Grindr. Each of the brands mentioned here has built an emotional connection with our audience. And while Grindr has the utility aspect of our brand solidified, the emotional connection like Coke standing for happiness or Airbnb letting you experience a new places like a local is not quite there yet. As we establish this emotional connection, it will be helpful for our business and extend the trust we've built around our core products into our gayborhood expansions and also help key stakeholders appreciate Grindr's important role for our global community. As Grindr executes on our monetization journey, we are positioning ourselves to support that growth strategy. As I previously mentioned, for most of our history, Grindr hasn't invested much in traditional marketing. Most of the growth in recognition has come from word of mouth and by becoming an integral part of the gay community. Now we're building a really strong team with global capabilities. We've also been investing in researching and fully understanding our audience, both current and future users, and getting a better idea of their needs so we can connect with them. In the same way that AJ mentioned this deep understanding of our users helps us build products that suit them, it also helps us target them where they are in the media and platforms they engage with and with the right spokespeople and partners to effectively land our product and brand messages in and out of the app. As George and AJ have mentioned, our audience has financial means and influence. The purchasing power and trend setting clout of the LGBTQ+ community is well documented and both continue to be a boom for Grindr's growth, profitability and reputation. Our audience is really valuable to advertisers and brand partners, and this is something we'll continue to message and demonstrate through new and engaging campaigns. If you're around for Pride this Saturday here in New York or if you just have a look at our social channels, you'll see the Grindr bus, an immersive Grindr experience, which is currently at the end of its national Pride tour. For this, we brought on board a health care sponsor who has benefited from the pull of our brand through footfall, through press, through social and overall phenomenal engagement. Win-win for both of us. And this is just the beginning. As you know, people in more than 190 countries and territories have already come to rely on Grindr as the gayborhood in their pocket. And while our app is used around the world, we still have tremendous untapped potential for international growth and increased paid penetration. We speak their language with authority and authenticity in a way that no other brand can. And these users that we know so well have told us what they're looking for, to be connected with people who are there for the same reasons and, of course, the right partners and advertisers. Because of that, we've also been working to understand the connection between our audience and the reasons they use Grindr as we continue to build out the global gayborhood in your pocket. We've heard loud and clear that there are several use cases they care about, and that extends our permission to operate in these areas. These are community and friendship, networking, identity exploration, travel and discovery, entertainment and culture, personal wellness, that's it. Marketing is key here to expand our brand's permission to operate in these areas. We know a lot of people are doing this, like hacking the app, like George mentioned earlier. And by amplifying and legitimizing these ways of using Grindr, we enable more users to also do this. Now let me tell you a bit about our strategy and why it works. We have a tailored plan to increase emotional engagement with Grindr that leads with social content and communications and focuses on owned and earned strategies at its delivered through editorial publications, social media and, of course, in app to our captive audience. Using our insights, our deep understanding of our community and our unique role in popular culture we're investing prudently to create new, engaging and entertaining content that taps into the zeitgeist, becomes the media story and gets talked about and shared in and out of the app. All of this creates more positive associations with our brand to continually engage our current users as well as attracting new ones. All our content focuses on the very real good news stories and successes our app delivers every day, much like some of the couples that you saw in the video when we first started. And you will also see those on our social channels right now. So as I've mentioned, a core component of the strategy is to highlight all the good that is happening in Grindr day to day. We're focused on expanding the positive corporate and consumer new stories around the world through an always-on media outreach program with 2 distinct pillars. The first is corporate news where we talk about our successes and innovation, the great business that we have, our beloved product and the impact we have on the community, not least through our Grindr for equality program. And in parallel, we have an ongoing program with consumer media, where we amplify the human side of the product and create engaging customer-centric stories and activations and partnerships. Now media covers Grindr a lot. So we're ensuring we're mentioned in a positive way wherever possible as well as creating and distributing news to spread our story far and wide. And we do this in a couple of ways. By ensuring our perspective isn't included in any negative stories, to ensure our point of view is represented and by being more proactive about highlighting the positive stories we have to tell every day. So for example, we regularly make announcements around in product and company updates, like the launch of the Gayborhood at Rio Web Summit, our innovation with our AI or our growing sexual health outreach program, and we also create our own interesting news with the help of data. Like our annual end of year Unwrapped report, which uses our unique data to create news that gets us widespread coverage and recognition, keeping us top of mind in culture and conversation as I mentioned. As we work to drive retention and engage with our community, we also need to make sure our key partners and stakeholders are aware of this work. Grindr is more than just a product. We're actually a key part of the gay community. We're doing all this by amplifying our voice and engaging our users through combining content and communications to ensure maximum brand impact with multiple opportunities to engage across the platforms and media that we know our audience is consuming. As I mentioned earlier, we've been taking the Grindr bus on the road, this month to engage with our community across the U.S. We have our met on Grindr series, which is the success stories that we talked about and we're about to launch our second season of our very successful podcast, which has already been making headlines. We're supporting our strategic expansion into more products and optimizing international user growth by increasing our already good Grindr brand awareness in international markets. This is all perfectly aligned with the product localization efforts that AJ mentioned earlier. Our data shows that when our audience knows us, they're more likely to use us than a competitor. So the trick is to grow awareness to deliver results. We're currently starting to focus on building our brand in Spain and Spanish-speaking markets, where we have a big opportunity. Brazil is also a focus because of the size of the market and openness to LGBTQ+ lifestyles. As you can imagine, India where it was illegal to be gay just 6 years ago is also a big opportunity for us and one that we're beginning to research. As well as launching our Spanish social media channels, we're about to launch our global online travel series called Host or Travel. This will show the real Grindr use case of travel, like I mentioned to you when I first met you. With travelers using our Roam functionality to find their way around international destinations and meeting up with Grindr users around the world to show them around amplifying global Gayborhoods and showing how no matter where you are, there is someone just like you on Grindr. So summing up, our brand work is all set to pave the way for our future as the global Gayborhood. We'll continue to build and protect our brand reputation. We'll continue to be authentic and speak to our users in their language and will support the growth and productization of Grindr's global Gayborhood. After all, the strength, authenticity and global fame of the grander brand is what gives us the invitation to become the global Gayborhood. And what's more, we're only just getting started. We're now going to take a quick break before I hand it over to Vanna, who will be bringing us home. Thank you very much. [Break]

Please welcome to the stage Grindr CFO, Vanna Krantz.

Welcome back from the break. You've heard our team share a lot of great info today on our business, our vision and how we're executing. I'm going to translate all of this into how we're thinking about our financial performance over the next few years. I joined Grindr in the fall of 2022. Around the same time as George after helping launch Disney+. I've spent the latter half of my career with direct-to-consumer subscription models, and I can say that Grindr is especially powerful and unique. Let's dive right in. Grindr's powerful business model starts with a strong foundation. We're a 15-year-old company with remarkable global brand awareness, but we're early in our monetization journey. You've heard why this is. We were built by the community for the community, and this created a significant with tremendous engagement. And our financial performance is at or near best-in-class for consumer apps relative to what you'll find in the public markets. We have structural cost advantages rooted in our low marketing spend, given outstanding product market fit and brand awareness. We've shown that we can consistently deliver adjusted EBITDA margins in the range of 40%. And these 2 pillars are early in our monetization journey and strong profitability point to a future of durable growth and cash generation as we execute on our road map. I'll also share our expectations for baseline revenue growth and adjusted EBITDA profitability how we're thinking about our financial priorities long term. I also said our business model was unique, and this slide nicely captures that fact. These numbers are all public and well known by many of you. So I won't step through them. But I'd like to emphasize just 2 points. We are the go-to brand for connecting an affluent and captive demographic and we deliver compelling user experience that's highly engaging. It is rare to walk into a 15-year-old company with this kind of loyal following, generating this level of profitability and to also have the opportunity to transform the business and propel Grindr to even greater success. And we're in the early stages of doing just that. In the last 6 quarters, we've strengthened our management team. We launched a lower-priced weekly offering. And now we're building a road map for the future. We've delivered on our guidance in our first year as being a public company, and we're well on our way to do so yet again in our second year. In fact, today, we're taking up our revenue growth guidance for 2024 to reflect the strong trends we're seeing in our business. Our execution has been consistent, and we aim to continue this as we tackle our future opportunities. With that in mind, I'd like to provide a framework for how -- I'd like to provide a framework for how we're thinking about the next several years from an execution perspective. AJ shared our vision of building up the Gayborhood expansion, and you've also heard us say that casual dating will always be at the center of what we do. It is the engine of our performance and provides us the invitation for what we can accomplish in the future. Therefore, continuing to deliver industry-leading growth and profitability in the core business remains our top priority. Delivering on that priority requires focused execution on our product road map that we've laid out today. Specifically, it translates to growing our foundational subscription and add-on offerings, driving monetization through addressing user intent with new subscription tiers and add-ons and growing our advertising business through modernized ad formats and quality, along with new advertiser partnerships. On top of that, we'll be investing prudently towards our larger vision of building out the Gayborhood. Tapping into this user intent gives us the opportunity to serve the community in more ways over the longer term. With our strong financial profile, we'll further optimize the balance sheet with the goal of maintaining leverage in the range of 1.5x to 2x adjusted EBITDA. We're generating strong free cash flow today, and that scales as we grow the business. Along with our Board, we're putting in place a capital allocation framework to ensure we're optimizing value for our shareholders. I'll share thoughts on that later in the presentation. Now let's turn to the outlook. In our press release just before today's event, we shared our financial targets for the 4-year period through 2027. We also noted that we're taking up our revenue growth guidance from 23% or better to 25% or better. This reflects favorable business trends and continued strong execution. As we've often said, our financial guidance reflects our line of sight. With Grindr, there is a lot of white space for innovation. But for the outlook, we're focused on our core offering, as a reminder, core consists of our foundational products, XTRA, Unlimited and Boost and the 8 new products that AJ shared today. We believe our core business will deliver 20% to 25% revenue growth annually through 2027 with adjusted EBITDA margins in the range of 39% to 42%. What's not included in our revenue outlook is the Gayborhood expansion opportunities that we've discussed today. We are prudently investing in these expansion opportunities over the next few years and that is included in our target adjusted EBITDA margin of 39% to 42%. Depending on how and when that these expansion initiatives develop, they could provide upside to the revenue margin -- the revenue and margin targets we're sharing today. The headline here is that we expect to deliver fast in-class growth and profitability while also investing for what could be a much bigger future. So let's talk about how we'll achieve this growth. This slide presents the core revenue build for our base case guidance of $600 million. And let's start with the largest section in blue, our foundational products, XTRA, Unlimited and Boost. These continue to be the driving force in our 3-year outlook. These products have performed nicely over time. And our model assumes that they'll continue to do so. As AJ mentioned, we're also enhancing the differentiation for premium offerings versus our free offering. In yellow, you'll see the projected revenue impact for our product road map, including dating, Wingman, Roam and the suite of Right Now products. We anticipate that these products will contribute 30% of our implied 2027 direct revenue target. And at the bottom, you can see that we expect advertising to pace with our growth rates similar to direct revenue at 14% of total revenue. I'll cover advertising in a few more minutes. This slide is a view of our average monthly active users and our average payers. You'll note that our users and payers are truly global. Both metrics have grown at a healthy rate. And in fact, payers have almost doubled in the last 3 years. To date, we've released products globally and simultaneously. Adoption has been broad despite little to no tailoring in products for the regional markets. Social tailwinds of acceptance, coupled with our global product market fit, continue to drive our success everywhere. The opportunity for growth internationally is significant as we improve our localization and begin to actively build a marketing presence in a few target markets. We believe we can compel our global users to find value in subscribing to our premium tiers and this will increase our paid penetration everywhere. Next, let's turn to advertising, and that falls under our indirect revenue for financial reporting. Ads are important to us because we have always provided a robust free and premium experience. As you've heard many times today, Grindr is different. Traditional dating apps and our ability to deliver mid-teens revenue contribution from ads is yet another reason why it's particularly remarkable because we put the privacy of our users first. and share only the most basic information. This is something that's paramount to our users and the trust inherent in our platform. In recent history, ads were deprioritized. In fact, the bottom banner was turned off 2022. We later reintroduced this in 2023, and it provided a great impact on our revenue, but this is just the beginning. We'll continue working to make ads more relevant because it improves the quality of our app and user experience while also improving ad rates and revenue. We're building our ad business to deliver at least mid-teens contribution to total revenue over the coming years. We believe there are 3 key levers to achieve this, starting with creating modernized ad formats and improving the ad quality attract more kinds of advertisers. As we evolve Grindr product set, this will open up more opportunities to develop target offers and add formats to reach a broader set of advertisers. And we're also looking to build more third-party partnerships to better open up global ad markets efficiently. All in, we see advertising revenue growing at least as fast as direct revenue in the coming years as we build out our capabilities. I started talking about prudent investment to fund both our growth in the core product and our Gayborhood expansion. Let me share more color on how we fund these initiatives without significant impact to our outlook. In 2023, we delivered an adjusted EBITDA margin of 42% as we leverage the incremental value from Boost from Weeklies and the transitional staff changes as we executed our return to office plan. Now as we begin to return to more normalized talent levels, our 2027 targets call for maintaining best-in-class margins in the 39% to 42% range. We use 2023 margin of 42% to help illustrate how our model will evolve based on the strategy that we've laid out today. First, we accounted for a slight increase in the cost of revenue, and this primarily relates to cloud data costs. Today, you've heard about how we'll be leveraging AI throughout product innovation efforts and may also recall that in Q1, we relaunched our chat feature, and that moved storage from the app to the cloud. Second, you'll see that we have room for potential OpEx leverage even as we build out our core offerings and scale for the future. We're making incremental investments to acquire talent, stabilize our platform, upgrade our infrastructure to scale implement the marketing initiatives that Tristan discussed and make early investments in the Gayborhood expansion. So the long-term margin target is consistent with our guidance for 2024. And even as we invest in what we believe is significant long-term potential. We can accommodate these investments while delivering around $600 million in revenue and $245 million in adjusted EBITDA annually from 2027. These are the respective midpoints of our outlook, and it's before any upside in our Gayborhood expansion. So with line of sight, the strong revenue growth and high margins with investment in our product road map and Gayborhood vision, the next question could naturally be, how are we thinking about capital allocation with the cash our business generates? Given we're early in our journey, this will be a developing story. But what should be clear is that we are focused on driving organic growth with our robust product road map and our vision for expanding deeper into the Gayborhood. We anticipate converting 70% of our adjusted EBITDA into free cash flow, even over the several next years with the balance largely going towards taxes. This translates to over $180 million in free cash flow annually when we exit 2027. In the near term, our primary use of cash will be paying down our debt with the goal of being in the range of 1.5x to 2x our leverage. Beyond that, we expect to be adding cash to give us optionality on our balance sheet and flexibility as we execute. I would note here that while we will always be opportunistic in regards to M&A, we operate in a fragmented industry with relatively niche competitors and have a very high bar for our organic business returns. That leads to the topic of capital returns, including the potential for dividends and share buybacks. Those are based on market conditions. And we believe that investing in ourselves is a good use of cash. These discussions are already happening with our Board and will play out over time. We have a board that is well aligned with our shareholders and our goal of making the best decision for all shareholders. With that, I'll close by bringing this full circle. We have a durable business with a devoted and engaged user base that we've only just begun to monetize. We have a powerful financial model, and we're focused on building it over time by providing a robust set of products and services for the global Gayborhood. And all this translates to strong free cash flow and value creation. On behalf of our entire team, we are pleased to have had this opportunity to share more about our company and our strategy for the future. Thank you all for attending and listening today. And now let's move directly to Q&A.

All right. We're now going to kick off Q&A. [Operator Instructions] With that, let's get started.

Nick Jones from Citizens of JMP. AJ went through a bunch of interesting products. And I think you mentioned some partnership opportunities, particularly around travel and experience. It also sounds like Roam kind of underpins the ability to maybe get into the segment. So I guess, should we expect to start seeing partnerships as part of the Roam rollout? Or is that more of what's not included in the product road map longer term? And then I guess maybe for Vanna in partnerships? Is this kind of like a rev share in a booking an Expedia or a Ticketmaster or StubHub? Like how should we think about how this rolls out over time?

Thanks for the question. Let me start with that and then maybe specifically to Roam, AJ might want to add some things. So Roam is a stand-alone add-on that could exist even if we were not doing anything else in travel, right? Our companies have it, our users have asked for it a lot. I've literally had people come up to me at conference the and be like we really need this feature and one guy told me you would pay thousands of thousands of dollars a year for something like Roam if we had it. So it's pretty clear that you just want that. So I don't think we need to conflate that with anything else. Yes, it is a good way for us to start addressing the travel use case. I do think it's pretty incredible that 1/4 of our users on a weekly basis are traveling. I mean, in some way, it's almost hard to believe but when you think about the fact that most of them are -- don't have children and have very high disposable income, travel becomes a logical thing for them to do. And that presents a ton of opportunities. We can get into serving those opportunities in different ways. We think the best way to get started is through partnerships versus doing it ourselves because that's the way for us to test whether something works or not. And then if it is working, then consider different ways that we might want to handle that. And it can be any number of things. It can mean the example that I gave, where we build features into the product that allow people to know that they're going somewhere and through that, have great engagement with each other and also with advertisers because local advertiser advertise to them. It could be that we are creating special high-quality experiences with partners at events because there are -- these very big events with thousands and thousands of people where access to unique experiences during the event is really valuable. Or it could be that we work with hotels in New York and say, "Hey, these are the hotels that we know from a user they really like." They are able to offer special opportunities to our users, whether it's access to unique experiences or special pricing, and we drive that as a product. So it can be any number of things in that direction. I don't think we yet know exactly which one that will be, right? That's why we think that there are kind of big opportunities that go after in the able expansions, but we're not modeling any of those today so that we can learn along the way and then come back to you guys and tell you a that will actually mean for the financial story.

Absolutely. I think to George's point, these products are individual features that are valuable on their own. So Roam is a great example of that. And by building these new products, it creates opportunities expand, but we can approach that in several ways, and we'll continue to do so as we iterate on these expansion opportunities.

Andrew Marok from Raymond James. Thanks for all the information today. I think the kind of overarching theme is that we're early as a company, and that came through pretty clearly. So maybe on that point, we've seen LGBTQ+ identification rates rise in the U.S. in each successive generation as acceptance becomes broader and comfort in identification rises. Obviously quite variable around the world. But where are we in that evolution internationally? And how do you think about that growth and acceptance for your global user TAM, given that you're already commanding almost 14 million MAUs.

So there's a bunch of things there. Let me start and then perhaps Tristan would like to add some things Yes, we are early but I don't think it's just that we're early. We're early and we have a very clear plan for what we're going to do about it in the years to come, right? I think that is a big change from, say, where we were, I think, 2 years ago. We felt like we were early, but we still need to decide exactly what the strategy would be for growth. So I hope that kind of came through as well. As far as TAM more broadly, when I first was approached about this role. I did spend a lot of time on TAM for many reasons because it was part of me getting the conviction that it made sense. And my takeaway pretty quick was that the TAM is very large and it's growing. And while Grindr is a really powerful brand in that TAM, it's by no means penetrated anywhere near as far as it could be. The reason it's growing is a few things. One is that people are starting to be more comfortable with who they are and people who are a decade or 2 decades ago might not have been willing to say that they were gay or bi or in the community, now are willing to say that. So that's not so much generational within each generation, people are more willing to say that. And that, I think, helps us with the TAM. Secondly, it is also true that each successive generation has more people [indiscernible] identifying the community. That's kind of a second trend that helps us. So with both of those, I think we do quite well. And we've seen, for example, in Brazil, acceptance levels of LGBT people is our highest of anywhere in the world. which is not something you would have expected 10 or 20 years ago. And that's really encouraging. That's one of the reasons we actually chose Brazil as a way to celebrate our 15th anniversary because we believe that Latin America is a huge growth market for Grindr in the future. And beyond that, our TAM's are also growing because we're expanding into these additional use cases, whether in the core or in the Gayborhood expansions, which then allow us to hopefully collect more money from our users through new products and new offerings, right? If you create value for users, you'd expect users to pay for that value and that then grows your TAM as well. So we think that there's a ton of ways in which we can capture the TAM more in the years to come. Even just in dating as an example, we know that Grindr is used for dating a lot. It's a place where our users find the best long-term relationships. But a lot of people get frustrated with the fact that we lack features for dating a long-term relationship. So as we build those features, we think more and more people will engage in that online and that won't be very beneficial.

Yes. I think the main thing to add to that is that we -- any market that we do go into, we'll go into with our eyes wide open. So to really research acceptance of LGBTQ+ people and have a look at it from a sociopolitical, religious, demographic point of view so that we really know who the people are, what their needs are and how we can really approach them in a way that's going to be meaningful and accretive so that we are focusing on them with the right messages to really engage them and to get them using Grindr more ultimately.

Great. And then maybe one more, if I could, on a different direction. We've seen maybe some compatriots in the dating space have their product road maps upended by changing consumer tastes. Grindr has been insulated from those factors to date. But if you had to put your pessimist or risk analyst hat on, what are some of the risks you could see that would require an alteration or potentially changing [ tack ] in product road map as you get insights and data from your users?

Let me start there as well, and then we'll hand over to AJ So I think if you had asked that question to me, 2 years ago, I would have said, hey, there's probably quite a few things we need to be thinking on. But part of developing the product road map was to really deeply understand what our users want or may want in the future. And the takeaways were, we love Grindr, we use it all the time, but it's really hard to use because we want to be doing different things in the app and the app does not allow us to do all the different things that we want to do. And that's how the product road map was developed by building out this intention focused set of experiences right now being one, long-term relationships being another one, the use of AI across all of these to make the intention even clearer for people and help them more specifically for what their needs are. And then thinking about all the internal use cases outside of the core connection use cases where we can expand to. So we have, I think, a lot of the needs of the user covered on the road map. What could change is what we prioritize, right? Inevitably, we have, I think, a pretty good priority set right now. But obviously, if things change and if we learn more things from our users, we might pull some things forward and put some things back. I think we are working really hard to be as fast as we can with the things we want to build, but there's always a way to kind of make those changes. I think this team being as nimble as it is because we are a fairly small team actually really benefits from being able to change fast. And we also benefit from the fact that we have a lot of Grindr users who work for Grindr. Meaning not just people who use Grindr because they work at Grindr but because these people are actively using Grindr all the time. And that really helps us have a really good intuition on what we need to do for the user. Anything you want to add, AJ?

And this really speaks to how we develop products, which is by listening to our users, both in research and looking at data on how they use the product. It really allows us to kind of keep pace with what their needs are and iterate our products over time as we build them. So we take these products, put a first version to market. Learn, listen, iterate as we go.

Great job today. A couple of questions. One is just on understanding users and competitive dynamics in the space. Maybe talk through over the last 18 months, you have been public, and you've probably gathered more spotlight from what other companies may be willing to do in this space? Talk through how competitive dynamics have evolved and maybe top 3 reasons people churn off of Grindr, what can you do to stop them from churning or have them come back. And then I have a few questions for Vanna on the financials.

I want to start with that and I'll tell you for churn and then kind of come back. So as far as competitors are concerned, we know that in our space, meaning the connections and/or dating, which however you want to classify it, people use more than one app. That's inevitable. It makes sense for people to do that even. What's important for us is to be like a credit card first in wallet, the app that people go to first and people use the most and ideally stay in for a long time, and we can do that by ensuring that the needs are satisfied. And that includes both a great user experience and also ultimately, the success in whatever intention they have with the product. So that is kind of how we think about what users need. I don't think building product based on competition is the way to go. You build product based on understanding user needs and then building from there. That is probably an overarching theme for how Grindr approaches things may be in part because you have 2 people who are founders at heart who are building product here. So we inevitably come to things from the user perspective. And so I think we are in a very strong position to really innovate on things that people want. Now that said, what we heard from my users is, Grindr is by far the best for right now, but we wanted to be a lot better. And hence, you're seeing us talk first and foremost that how do we make that casual connection experience, the best that it can potentially be and making that the #1 priority because that is the bread and butter. That's what makes users to be connected to our product and then everything else comes out of that, and we'll continue to do that. Do you want to speak about churn?

Absolutely. Thanks for the question. So the app is highly sticky and it's very engaging. And so our users, it's really meeting a core need for them, casual dating. And they do use the app a lot, they spend nearly an hour a day and it -- they do occasionally take breaks from it. And very often, they come back again, and it's very sticky in the long term. And so as we think about building these different use cases and meeting different of their needs, we really see that as a way to improve engagement and stickiness over time.

And I just add one thing to that. You saw from AJ the kind of the 6 different subcategories of our users that we have, not just on Grindr, but in the community at large. And 2 of those are people who really care about romantic long-term relationships. I think had we done that work 20 years ago when I was in my early 20s, that would not have been anywhere near as high as it is today. Kind of thinking about, hey, I want to settle down long term or even in the near term was not a thing that younger game and we're thinking about in the late 1990s and early 2000s. And so that's fundamentally changing. And so there definitely is a segment of users who still have the app, still have a log-in but don't come into the app as often as they used to because they've kind of moved on, hey, I've already sown my wild oats. As a young person, I now want to settle down. And so I do think there's a reengagement opportunity with those users with a great long-term relationship set of features because they are looking for that. And that's -- I think that's something that we need to do in general, but especially to serve that need.

Okay. A couple of questions on what you included in the guidance and what you did not? First on what you included, the 23% CAGR, can you break it down the revenue CAGR by user growth, ARPU growth? How should we think about that? If you can provide? And then what's not included in the guidance? Maybe you had a lot of discussion around Gayborhood expansion, travel, wellness and all those incremental revenue opportunities. Maybe help us think through which of those opportunities are the largest? And how do you see them layering on in terms of the potential revenues that you could have on top of the $600 million that you already have given out?

So I'll start with what we did include and so we included basically our foundational products, which, as you know, are Akron Limited and Boost as well as everything that's on AJ's new products. We don't provide guidance on the underlying metrics that pushed that number out. However, what I can tell you is that our model of growth and our conversion rates the rates that we're using are very reasonable. So you've seen those rates over time move and we continue to use very reasonable rates to drive that 70% of our baseline direct. From the ARPU perspective, we've always considered that an output. And so what I mean by that is when we think about the road map going forward, there's probably some subscription tiers that are higher value there, right? The AI generated ones dating ones, most likely higher value. However, if you see international growth kind of eclipse and really overtake domestic, those ARPU rates tend to be lower than domestic and so ARPU continues to be something that we elect fluctuate. And I would say we'll see it how it turns out over time. It continues to be an output. And then on the Gayborhood expansion. I think you know that we didn't put $1 in for any of that. All of that is upside. And -- call me finance, I wasn't taking any guess. And so I'll let some of the other colleagues in, Yes, if they would like to.

Yes. I don't think we want to guess anything has a little bit more time as we get into having these out there. I think what you've heard from us is that we very much believe in test and learn. Right? What users tell you in surveys is obviously helpful, but the most valuable thing is what do they do with something when it's in their hands. And so we believe strongly in having the minimum viable version of something out there that might not be perfect and it might not go all the way, but getting signals from users from that is really valuable. So we'll start doing that fairly quickly. I think AJ was pretty clear that expansion does not mean that we're going to start those in 2027. They're going to -- we're working on those today. And then as we're ready, we'll introduce them into the market. We're going to do this through partnerships primarily, which will make it easier, hopefully, to bring stuff to market and also be more cost effective and prudent for us. But I think folks can think through ideas that we've put out there and given some pretty concreteness to what we invest in and model those themselves. Obviously, we've done some of that thinking on our own, but I don't think we're getting a place to go to share those numbers. Thanks.

Logan Whalley with TD Cowen. You guys discussed pricing and packaging as a core component of improving the core product. Could you just discuss how far you've come on pricing and packaging optimization, and then -- like how much of an impact do you expect that to have looking forward?

AJ, you'll take that one?

Absolutely. So in general, we're early in our monetization journey. There's a lot of room to continue to improve and optimize. And the same is true for pricing and packaging. We are just building a product marketing capability internally now, which we expect to be able to deliver value here. And as we create these new features that add more value, we see a lot of opportunity to price and package those effectively over time. And we'll continue to use our product development process, which is kind of grounded in research and data and iterate that with AB testing to optimize the ecosystem overall.

Just to add maybe one more financial component to that. What I would suggest is that when we're thinking about the free tier and the premium tier and what the value exchange could be, there might be 1 or 2 or maybe not, I'm not sure yet, which a la cartes that AJ described that might go into our extra or unlimited. And so I think that's how we're also thinking about packaging.

When we look at kind of your monetization in the U.S. versus international markets and you speak to kind of localizing internationally, give any examples of kind of capabilities of being able to localize. And can you maybe double-click on what that means? Is that really just localizing language? Does the product need to differ materially? Is it different kind of merchandising or packaging. Could you kind of just help us understand what localizing means and how you kind of get to the same monetization levels you're seeing in the U.S.

And why don't we start with AJ first and maybe Tristan might have some things to add.

Absolutely. Thanks for the question. So when we think about localizing the product, we're starting with a global footprint today. And so we really see this as an opportunity to better fit the product through localization and drive upside beyond what's in the base plan. And the types of things we can see it doing there are things like better translations, really making the product language sound and feel very local, local imagery representing the users in that market. We do see the opportunity to build some custom features for certain large markets and that we do see an opportunity to optimize pricing globally as we make those changes the product.

Yes. Some of the examples that we're doing. So for instance, we're looking at a store optimization and how we turn up in the app stores to make sure that we're relevant to the market that we're speaking the right language that would be insensitive to any markets where levels [indiscernible] might not be as high. And then as we start to look at for language social channels. So for instance, the Spanish one that we're doing, we're making sure that we're doing that with local influencers with local talent to really make sure that we infiltrate the culture and conversation in a way that feels relevant and feels ownable and shows that we understand people's lives in those markets so that it will resonate a lot more. And it's really about tweaking to really build that emotional engagement which will, in turn, build that word of mouth that's been so successful for us in the past.

Great. Maybe a follow-up for you, Tristan. When you think about brand and international markets, are there maybe certain countries where it's like Brazil, where you kind of have a playbook that works or are you kind of maybe taking this MVP approach and brand in some of these markets that you can then deploy into specific parties across Europe or Asia, et cetera?

Yes. So we're looking at it in a number of ways. So we're looking at country-specific strategies like Brazil, which you mentioned. And again, we've gone in with a lot of research to understand who the market is, what works. So for instance, we're launching an influence partnership campaign there because we know that those are channels that really work to engage the audiences and we'll be measuring the of those and mapping it onto business markers to show the impact that, that is having. And also within the product in Brazil, we have a specific product where -- which is very much using Brazilian Portuguese vernacular to again build that emotional engagement. And then we look at language as well, so much as we're building our social media presence in Spain, we're doing it very much with a view towards LatAm to ensure that all the Spanish-speaking markets there will feel included and will feel relevant in the content that we're producing. To engage people and get them feeling that Grindr isn't this American product that's just turning up, but that's really part of the community understands the community. So everything we do will be with data and insights and we'll spend time upfront to really understand it. So that when we do go in, we can be really focused and there's no wastage. And we're not -- we won't be broadcasting because we don't need to, but we can really hone in on the audiences that we know are going to tell our story, understand our story and again, build that word of mouth.

Let's take one from the webcast from Matt Farrell with Piper Sandler. Thanks for the great presentation. The product road map is quite impressive with a lot home-run opportunities. Why not lean into investments more significantly in the near term to accelerate the road map knowing that the business could run at 40% plus margins longer term.

Thanks for the question. I guess, AJ and I will probably take it from the product perspective. So yes, the product road map is hopefully impressive that's the objective because we have so much opportunity to really great things. We are working on them pretty fast. I don't think we're slowing anything down. I think with AJ and Joe's leadership. Joel is our SVP of Engineering, we've had incredible acceleration in how much we're building and how quickly. And that will only continue to get -- be more accelerated and produce a lot more. Ultimately, what's really important is to ensure that the core thing that Grindr does so well which is connect day and buy people to each other for whatever needs that they have, remains fantastic, right? So everything you're doing needs to be thought through not just in terms of new things that you're launching, but how does that impact that what we do so well? And so being thoughtful about how we approach the product, testing everything that we do and learning from that is really important. And so I think the time line here is not about to build these things fast. It's about can we engage the users at the right pace to get feedback from them, improve things based on that feedback and then get out something into the market in a way that is most appropriate for the user while maintaining this vital and critical product that is both financially extremely successful and also is so important for the user. So that's, I think, what's driving the time line more than anything else. You want to add anything, AJ?

And to George's point, I think we really think of the next 3 years as a steady cadence of launches. We're going through our rigorous product development process, starting with research, designing, building, testing and iterating. And we do that to ensure that we deliver our financial results confidently, and we feel really good about the plan.

From the webcast, this is related. It's clear how powerful the business model is with your incremental EBITDA margins that are running that have been running approximately 50% as we look at 2027 EBITDA target for 42% or OpEx margin of 41% to 44% of revenue, how much of that is burdened by investments for new expansion where we haven't baked it into the top line guidance?

So our ranges are 39% to 42%. Just to clarify, and $245 million is the midpoint. What I would suggest is that we have decided to invest in acquiring talent, some of that talent might be put towards the expansion, whereas some will be put towards core. I don't think we've exactly defined how that separates and quite may probably [indiscernible] in each other anyway. And so acquiring talent is going to be helpful for everything core and expansion. Same thing I would say with scaling the business, stabilizing the platform. All of these initiatives will -- are focused on the core but will also be helpful on expansion.

I'll just add that vast major of the work that the team is doing, whether it's a product team, the engineering team and everybody else is focused on the core business. That's through today and is going to continue between the future. If we were to launch one of the expansion opportunities at in order to take off in a significant way, obviously, we'd put more talent behind it. But then at that point, we also were in a position to give you guys a sense of how big that particular opportunity can be from the revenue and profitability point of view. But at this stage, the investments into expansion is fairly minor because that's the majority of the work is happening from the core. That's why the way we're going to approach these expansions is going to be through partnerships, and we'll reduce the burden on how much work we need to do internally to learn from is this working or not working and then make a decision on additional investments for those things.

No questions in the room?

There was a question in the front earlier.

I just have one quick question, if you could touch on this. There was the recent litigation recently being brought against Apple in Europe as far as like the App Store in terms of app store fees. Can you talk a little bit about that because I know you talked a little bit about app store optimization and things like that. Can you talk at all about like how you would be thinking about like app store fees and how that -- like how that cost structure might change going forward?

Vanna, do you want to take that?

Sure. So right now, we have not built in any changes to our App Store fees. So what you'll see is the same as what we're experiencing now. If other companies are very successful in having those fees come down, we'll absolutely change our guidance and change your numbers. But for now, you can assume it's steady state.

So you guys obviously outlined a bunch of monetization features looking forward. When we think about like payer conversion and someone like a Tinder where their conversion is closer to like 20%. Is that a level that you think about being able to get to longer term?

Is Tinder's free to paid conversion 20% or paid penetration?

Like their paid user -- their monthly active user to paid user.

So their paid penetration. So we don't believe there's any reason why we wouldn't be able to have the same or even potentially better paid penetration to a dating app. As you can see, we consider ourselves to be much more than a dating app or a connection app. We're talking about expansion opportunities that to probably monetize as well. So we don't use that as our ceiling at all. Although, quite frankly, we're at 7.5% or so. So if we go to 20% I think we'd be pretty happy.

I also think it's really important to just think of what the paid conversion is, but also that the free user is also a critical user to the product, right? And so Grindr has a very, very robust free product we might not keep it as robust as now, but it's still always going to be quite robust because the free user is who connects with a -- with a paying customer. And so free is not really, really critical. I think if you look at the space in general. A lot of the challenges they now face has been the fact that they've not been innovating in product launches and have been only trying to optimize kind of conversion. And I don't think that's the path that we want to go down. That's why what you saw here today is all about product launches and making the user expense a lot better and then that will drive conversion high.

I just wanted to clarify something on the outlook or the 2027 guidance. So in the EBIT -- in the margin guide, does that include investments in kind of Gayborhood expansion, but there's no revenue coming from those investments?

Yes.

I just wanted to ask if you guys have any intention of cleaning up the warrants at some point. They're now in the money. So just wondering if you have any thoughts there.

Vanna, I will let you take that.

Sure. So the warrant exercise price is $11.50. I didn't look to see what it is just before I came up, but I'm not sure we're at that number. Maybe are we at that number right now? Is that what you're telling me? So thank you for the information. But -- so we'll keep you apprised. I would like to say that the Board and management are very aligned on the balance sheet. As you know, it's $11.50. So we'll see -- we'll take it away. Thank you for the homework assignment. For the July 4 weekend.

My experience has been that it takes a while to get questions internally on the team so we can give people in about 10 seconds or 15 seconds. Well, before we close, I want to say 2 things. One, Joel Simkhai here. He's the founder of Grindr and I just want to say thank you for him for thinking of something that's amazing and for bringing it to fruition and growing it. He did it with no capital raise, all bootstrapped, and that's not even more unusual. And so I think he just deserves incredible credit for what he's done. Related to that, when Grindr was sold to a Chinese company, the result was a massive amount of [ under ] investment in the business and folks who bought it from Chinese ownership and are now still the large shareholders, inherit a lot of technical debt. And so when I was talking to them about taking this for like will we have the time to invest in long term was one of my questions, and they very explicit said yes. And that's exactly what we felt. And so I think there is a very strong alignment between the large shareholders and what we need to do for the long term, and I think that's really fantastic because that's not something you usually get to do as a public company. So I really appreciate on them frankly saving this incredible product and business. And then thirdly, just for me now to have the responsibility to nurture that is so amazing. And I really appreciate everyone being here and supporting us on this journey.

Thank you.