GRND

Grindr is a rare combination of durable top-line growth and genuine cash generation. Revenue compounded from $146M (FY2021) to $440M (FY2025), up 27.6% YoY, driven by Paying Users rising 16.9% to 1.3M against 15.0M Average MAUs and a rising ARPPU — and FY2025 is the year the model crossed into clean profitability: net income swung from -$131M (FY2024) to +$94.8M, operating income $126M (28.7% operating margin), and operating cash flow $142M on just $746K of capex. This is an asset-light freemium subscription business (direct/subscription revenue 83.3% of total) with a structural first-mover moat in GBTQ social networking and organic, word-of-mouth user acquisition — the economics behind the 21.5% net margin are real, not accounting noise.

The headline net income +172.3% and ROE of 201.6% overstate the underlying improvement: ROE is distorted by a deliberately thin $47M equity base, the product of $451M of FY2025 share buybacks that, combined with $314.1M of cash from the February 2025 warrant redemption/exercise, drove shares outstanding DOWN 11.1% to 185M despite the warrant share issuance. Management is aggressively returning capital and shrinking the float while still investing — R&D rose 49.1% to $48.9M to build the full-stack 'Grindr AI' (gAI) platform. That is the right posture for a high-FCF business, but it explains why the balance sheet looks stretched.