GRND - NYSE

My name is Kate, and I will be your conference operator today. At this time, I would like to welcome you to the Grindr Fourth Quarter 2025 Earnings Call. [Operator Instructions] At this time, I would like to turn the call over to Tolu Adeofe, Director of Investor Relations.

Thank you, moderator. Hello, and welcome to the Grindr Earnings Call for the Fourth Quarter and Full Year 2025. Today's call will be led by Grindr's CEO, George Arison; and CFO, John North. They'll make a few brief remarks, and then we'll open it up for questions. Please note, Grindr released its shareholder letter this afternoon, and this is available on the SEC's website and Grindr's Investor page at investors.grindr.com. Before we begin, I will remind everyone that during this call, we may discuss our outlook and future performance. These forward-looking statements may be preceded by words such as we expect, we believe, we anticipate or similar such statements. These statements are subject to risks and uncertainties, and our actual results could differ materially from the views expressed today. Some of these risks have been set forth in our earnings release and our periodic reports filed with the SEC. During today's call, we will also present both GAAP and non-GAAP financial measures. Additional disclosures regarding non-GAAP measures, including a reconciliation of GAAP to non-GAAP measures, are included in the earnings release we issued today, which has been posted on the Investor Relations page of Grindr's website and in Grindr's filings with the SEC. With that, I'll turn it over to George.

Good afternoon, everyone, and thank you for joining us today. 2025 was an exceptional year for Grindr. Revenue grew 28% year-over-year to $440 million, and we delivered roughly $196 million of adjusted EBITDA, meaning we achieved more EBITDA than our revenue just 3 years ago. We accomplished that while materially improving the product and platform and while rapidly terraforming Grindr into an AI-native organization. With such a fantastic year, I'd point to 3 highlights. First, the core business stayed strong. We expanded the product in ways that deepen engagement and clarified intent, including the global expansion of Right Now and launches like For You, Chat Summaries and A-List. We strengthened XTRA and Unlimited and expanded monetization through ad formats like Rewarded Video. Second, we made real progress on AI, not as a feature, but as an operating advantage. In Q4, AI agents drove between 60% and 70% of our new code and our engineers are reporting roughly a 1.5x productivity improvement per person. We're now able to ship faster with higher quality without the company getting heavier and slower. Third, we took steps to drive revenue growth in a way that matches what we've built. Over the last several years, we've added a lot of new value to XTRA and Unlimited, significantly expanding what users get from both tiers. To make sure we're capturing the right economics and return, in August, we began rolling out new pricing for XTRA and unlimited. Results have been encouraging, and we are continuing to roll out these changes globally through the first half of 2026. Looking ahead, our framing for 2026 is to raise the baseline. Our best execution periods during 2025 with high output, high urgency, high quality will become our default operating mode. And from that baseline, we intend to push even higher. Therefore, this year, we are concentrating on 4 priorities: first, premium AI experiences [indiscernible] and Edge. This AI native premium tier is built for power users who want the most capable version of Grindr that today's technology enables us to build. We'll continue refining the experience and testing price points through the year. Second, durable core growth, that means improving onboarding, translation and localization, [indiscernible] personalization and intent clarity through AI and beginning to strengthen the user experience in lower density and international markets. Third, operational rigor through Grindr [indiscernible], clearer ownership, higher productivity, faster decision-making, greater leverage for our management layer and AI embedded into everyday workflows across functions. Fourth, deliberate investment for durability and upside. We are leaning into reinvestment in our team, our platform foundations and ecosystem health. That same posture applies beyond subscriptions, we will continue building [ Grindr Health ] anchored by Woodwork and we will keep strengthening our ads platform with increased focus on direct advertising and brand partnerships. Up to this point, these remarks were read by AI using a proprietary voice model trained on my voice by one of our [ Gayborhood ] expansion teams. We did that deliberately as a small demonstration of how deeply AI is becoming embedded in both our product and our operations. Our continued focus as a management team is to execute against the strategy that creates significant long-term shareholder value by building exceptional experiences for our users while driving sustained growth in revenue and profitability. At both the management and the Board level, we are committed to demonstrating this through our actions and to continue doing all we can to earn our investors long-term trust and support. Thank you to the Grindr team for delivering through another ambitious year and to our users for their continued willingness to come to Grindr for their Gayborhood. With that, I'll turn it over to John to review the financials and guidance.

Thank you, George, and hello, everyone. I'll start by summing up the year and then dive into the fourth quarter. Grindr delivered outstanding results in 2025. Revenue grew 28% year-over-year to $440 million, and adjusted EBITDA was $196 million, representing a 44% margin. For the full year, we reported net income of $103 million compared with a loss in 2024 that reflected a noncash warrant liability revaluation. In the fourth quarter, revenue was $126 million, up 29% year-over-year. Direct revenue was $103 million and indirect revenue was $23 million for the quarter. Revenue exceeded our increased full year guidance provided in November due to continued strength from our subscription and add-on offerings as well as strong performance in our TPA business, which benefited from strong demand from both our partners and growing international markets. Adjusted EBITDA for the quarter was $56 million, a 44% margin, and net income was $29 million. We demonstrated operating leverage in the fourth quarter. Operating expenses, excluding cost of revenue, were $63 million. As a percent of revenue, those expenses declined to 50% from 54% in the prior year, which supported operating income for the quarter of $31 million or 25% of revenue. For the full year, operating expenses, excluding cost of revenue, were $201 million, declining 2% to 46% of revenue versus 48% in 2024. Operating income for 2025 was $126 million or 29% of revenue. We finished the year in a strong liquidity position. Cash and cash equivalents were approximately $87 million at year-end and total gross debt was roughly $396 million. We generated $133 million in free cash flow in 2025, which we utilized for both investment and growth initiatives and our share buyback program. Today, we announced a 3-year $400 million expansion of our share repurchase authorization and extended the program by 3 years to March 2029. This step reinforces our conviction in the strategy and our optimism of what's ahead for Grindr. In 2025, we repurchased 25.1 million shares against the original $500 million authorization for approximately $450 million. The balance of approximately $50 million will roll into the increased and extended program announced today, giving us total repurchase availability of up to $450 million. When we launched the initial 2-year $500 million authorization a year ago, a key objective was to offset the dilution we expected from the cash exercise of Grindr post the de-SPAC warrants. We moved through most of that authorization quickly, clearing the warrant overhang, eliminating nearly all of the associated dilution and doing so without increasing our aggregate debt. This expanded authorization gives us flexibility to buy shares when appropriate and in doing so, return capital to shareholders. Going forward, we expect our pace to be materially more measured. And because the business continues to execute at a high level with strong cash generation and real durability, we can return substantial capital to shareholders and keep investing aggressively in the long-term road map that will compound growth and profitability over time. Before I discuss our outlook, I'll briefly expand on user metrics and our updated MAU disclosure. Average MAU for 2025 was $15 million. Average paying users were approximately 1.26 million and ARPU was $24.25. As we discussed in November, we will be providing average MAU on an annual basis rather than quarterly going forward. This change better reflects the way we manage our business, focusing on delivering value and a great experience to our reliable funnel of free users and enhancing the features we provide to our paying users and aligns our disclosures with many of our public consumer Internet peers. We'll continue to provide quarterly visibility on leading engagement indicators. Finally, we have introduced our outlook for 2026. We expect to continue growing the business while scaling investments in longer-term initiatives, including premiumization, AI and the Gayborhood. For full year 2026, we expect revenue of greater than $528 million and adjusted EBITDA of greater than $217 million. As we have consistently discussed, we guide to what we have clear line of sight to. George noted some of our early initiatives like Edge and Woodwork are not yet included in our outlook as the pace of revenue growth is not yet predictable, though the investments and expense are factored into our adjusted EBITDA for the year. We will continue to invest carefully with discipline and to protect our ability to generate strong cash flow. Additionally, while we do not provide guidance on a quarterly basis, we currently expect our revenue growth rate and adjusted EBITDA margin in Q1 to pace well ahead of our annual results, reflecting early year revenue momentum and the timing of our planned 2026 investments, respectively. As noted in the past, we do not manage our business for quarter-to-quarter performance, but for long-term durable and sustainable growth and profitability. In closing, 2025 was another great year of strong growth, outstanding margins and durable free cash flow generation. In addition to our highly cash-generative business model, we have a healthy balance sheet that gives us the flexibility to invest and return capital. And with that, operator, please open the line to questions.

[Operator Instructions] Your first question comes from Andrew Marok with Raymond James.

Thanks to AI, George, for the remarks. If we could start with 2026, I guess, what you've seen so far in terms of things like retention and churn impacts from your pricing actions that you've done to your base plans at this point and kind of some of the assumptions underpinning Edge into the '26 outlook? And then I have a follow-up.

Sure. I can start with that, and then John can chime in if he wants to add anything. So with regards to 2026 and pricing changes, we were very happy with the results of the test that we ran in 2025, starting in about August on pricing. The user base accepted the price changes very well. I think that speaks to the fact that we have added an incredible amount of value to both XTRA and Unlimited over the last 3 to 4 years. A lot of new features and products were added to those tiers, but we never charged for those, right? So I think users like the features and the offering that is there. And so now having to pay a little bit more for all that extra value that had been generated over the last 3 years was not a significant challenge, and I think has been really well received. So we don't expect to have any significant impact on conversion from the price changes that we made. And we will be rolling out the price changes throughout the first half of the year across the globe. It's live with a lot of users already, but not live at 100%, and that's something we expect to happen in H1. With regard to Edge, we started Edge in -- the products that are in Edge have been in testing for a while, but as a tier, it went live in Q4 of last year in Australia. The feedback on that was extremely positive. Frankly, demand was higher than we had anticipated in a pretty significant way, which told us that there's a lot of value in what we're creating and potentially, we were not pricing it appropriately for the amount of value that we were generating. To get a better sense of the price points, given that we've never done anything of that nature before. We've never offered a product of that much value in the past. We felt that it was important to do tests outside of Australia as well. And so we launched tests in certain U.S. and other global markets where we have a significant number of users who are paying customers. Those tests are ongoing today, and that's some of the information that got out into the public which was inevitable when you start doing price tests like this, it will attract attention. We would expect testing to continue through H1 and probably in Q3 as well. Edge is being really built as the core foundation of growth in 2027. If we go global with Edge outside of testing in 2026, it will be upside. It's not assumed at all in our guidance for the year.

Great. Really clear there. And then maybe in a different direction, following the break of the proposed takeout offer a couple of months ago, you were left with 2 major shareholders, one of whom has been selling down a stake pretty significantly. I guess can you give us any color as to your expectations for how the situation plays out and how you're approaching the governance situation in the meantime?

Thanks for the question. I appreciate where the question is coming from, and I understand that -- this is an important issue for a lot of shareholders. We ourselves get this question from folks pretty regularly and also appreciate that in light of last fall, there is more interest in that. As I believe everybody knows, James has stepped down from the Board, and the Board does continue to view this issue as quite important, and that's something that they've always thought about. I think one of the things that came out from last fall is that everybody is in alignment that Grindr remaining a public company is the best thing to do. That's true for Ray as our largest shareholder. That's true for the remainder of the Board, and that's true for management as well. I think the other thing that came out last fall that was very positive is that Michael Gearon, our Lead Independent Director, was willing to step into that role when James stepped down. Michael is among the most successful entrepreneurs in the world, period. And so to have him be in that role is extremely valuable to me. He's been a great mentor, and I've learned a ton from him in the 3.5 years we've been working together and very much looking forward to continuing to work with him in that role. Since going public, Grindr has had an independent Board, and our Board is very committed to remaining independent and to continue to be stronger. That's not something new that got started just in the fall. It's been going on for a long time. We have been adding new directors. We added Chad Cohen as a Director in May. I think it was a very positive addition to us given his financial expertise and roles twice as the CFO of a public company. And we are in the process of interviewing candidates for Board membership now. We've interviewed over a dozen very serious and credible candidates so far with support from 2 different search firms, and we will continue that process for the next several weeks as we get ready for the shareholder meeting this summer, and I think there will be an update on that at the shareholder meeting. And then lastly, what I'd say is that I have a very positive relationship with Ray. Ray has been a very good shareholder to Grindr. What Ray, James and Michael did when they rescue this company from China ownership was massive, and it really saved the product and saved it for the community, and I think that's really valuable. And in the 4 years that I've known Ray, we've had a very positive and strong working relationship. He is a very entrepreneurial investor in that he very much likes to think about the long term and is very optimistic about the future and what the company can do, whether it's in -- as a business overall or within products that we're launching and is pretty deep in knowing what we're doing and what the road map is, which I think is really positive. So we've had a very good working relationship. I've learned a lot from him as well. Obviously, he has expertise in areas that I don't know as much about like capital markets. And so I've very much enjoyed working with him. I think he's a very strong shareholder, and I believe he'll continue to be a very committed shareholder for the long term, who is very dedicated to this business. And there was -- you could speak to that from the fact that last year, even though he owns so much of the company, he bought even more ownership in the business by putting in nearly $200 million into the company at the time. So I think we are in a very strong position from the governance standpoint, and the Board will continue to be very focused on ensuring that we are run as an independent company, which is something that's very important to me and to the Board.

Your next question comes from Nathan Feather with Morgan Stanley.

Congrats on the results here. I guess first, I'm thinking about the at least 20% revenue growth guidance you gave, can you help us think through the primary contributors that are included within that, whether it's the price increase or other kind of factors? And then second, really interesting to hear the positive receptivity to the Edge tier. Can you provide some more information on within that, what are the early subscribers saying is the primary value they're getting. There's a lot of different features. So trying to help kind of contextualize what are the things that people are really circling as these are things that are really improving my experience.

Nathan, good to hear from you and really appreciate you picking up coverage earlier this week. So thank you for that. I'll take the guidance question, and then maybe I can turn it over to George for the second question. When we think about guidance, our philosophy has been pretty consistent from the beginning, which is what do we have line of sight to and how do we think about the business over the long term. We're not going to take a quarterly approach to managing the business. We're going to be long term and thoughtful in how we talk about what our outlook is. And that's reflected in the guidance for '26. It's what we have line of sight to. And I think the 20% revenue growth, to your point, is still a great growth rate. It's primarily focused off of the product enhancements that we've been making over the last 18 to 24 months and then the fact that we hadn't really taken a price increase since 2018, if you can believe it. And so as George mentioned earlier, we implemented those pricing changes just right at the end of last year. And those are going to continue to work their way through the first 2 quarters of this year. And that's our expectation in terms of where the majority of the revenue growth is going to come, along with continued growth in our advertising business, which was up 37% last year and making sure that we also enhance the quality of that business, both through better advertising, things like rewarded ads and then also through direct advertising. So those are the primary drivers as we think about it. To the extent there are expansion opportunities, Edge gets pulled forward, things of that nature, we don't have line of sight to that now. It's not included in the guidance. And if and when that happens, it would hopefully lead to upside.

And with regards to Edge, thanks for the question. B, looking forward to seeing you on Monday at the conference. And Edge is something that I'm super excited about because, honestly, I came up with it thinking through like what the opportunity is, and the team has done a really awesome job at making it happen. And also is awesome because it's built on technology that wasn't in existence 4 years ago. One of my thesis about taking this role and coming to Grindr was AI would become a game changer in how technology is being built. And Grindr was very uniquely positioned to be able to be an AI-first company, and AI-first product because we have so much data. Like AI is good theoretically, but if you don't have the data, it can't really do very much. And we do have a ton of data that we can utilize. So the things that we're trying to solve with Edge are twofold. One is that people end up having many, many conversations inside Grindr, which don't go very far, partly because new conversations take over, right? So because we're an open architecture platform, people can talk to anybody and people have many, many conversations at once. Power users, in particular, have even more conversations, but an average user sends 50 messages a day. So you have many people that you're talking to all the time. That's really magical, and that's where a lot of the excitement of Grindr comes from. But one of the negatives of that is that some of the great conversation you might be having get kind of pushed down and lost in the inbox. And the thing we've been kind of thinking about over the years is how do we avoid that from happening? How do we help the user have a better sense of, hey, these are the conversations that I'm having, and I want to maintain them and maybe they go somewhere beyond just the conversation over the long term. That's especially true for users who travel a lot because you might be having conversations in many different places. And then you're in New York, you have a bunch of conversations in New York, then those get lost when you go back to, say, Chicago and are having conversations in Chicago. What we've built within Edge is a product called A-List, which takes your entire chat history and builds on top of it a set of summaries of the richest and the best conversation that you've had with people that the AI believes are your best matches. And then you can go to your A-List and see those conversations and brings together those conversations. It brings together the summary, it tells you what you told them, what that person told you and why that's interesting. What are the important information that you shared about each other, whether it's your name or other relevant information, et cetera. It brings together the other person's photos as well. So you can see all the photos that he has shared with you or anything that you've shared with him. And that feature is a killer feature. The users really, frankly, love it. And I might remember in my head, the day when we, as a team described it for the first time about 2 years ago and to go have it go from like just a concept in a conversation to hear it's live and is as awesome as it is, I think, is fantastic. So that's the first piece of what we're trying to solve. The second piece that we're trying to solve is discovery. Grindr does not have a lot of information about its users on its profile. That's, again, part of the magic of Grindr. Privacy is very important to users. And so we don't require you to say a lot about you. But there is a limitation to that in that you don't actually oftentimes know, is this the right person for me to be reaching out to or not. And what we are doing with Edge is for people who want to be a part of this, obviously, it's all by person's choice. We don't force people into our AI functionality. Only people choose to be part of the AI functionality. Is this true? The user who is subscribing to Edge will be able to see Grindr derived information about the other user. So if I'm looking at somebody's profile and I'm an Edge subscriber, I will know things about that user's behavior patterns that are useful for me to know in deciding whether I should reach out to him or not. And I think that's extremely valuable and people are really loving that experience. And tied to that is the second piece, which is discovery. In almost every location in the world, the number of gay people in a given geography is actually quite limited because we're about, what, 5% of population, maybe 6%, and that's not that many people. When you take half the population is male and then 5% of that is gay. Maybe in New York, that's an exception where you do have a critical density, but everywhere else, density is lacking. And so through a feature we call Discover, we're able to identify and surface people to you that are the right matches for you, meaning we believe you will like them based on everything we know about you and everything we know about them, but you otherwise might not find. And that's less contained by geography where Grindr is very geography focused. It's like I'm here and here's my greater Army by geography, it's broader in nature. And that allows people to find new people that they otherwise might not connect with. But because it is based on all this information that we possess, it's actually a very positive recommendation and because it's transparent because of insights, there's actually a desire on the person's part to engage in a conversation and take a risk on a longer distance because there's so much alignment of interest. So that's what Edge is doing. I think it's a really incredible set of products because it's truly AI [indiscernible] Grindr for people. I've been using it since about September when it got put on my phone. And it's really an incredible user experience. It also is very magical because as a product guy, knowing we can do this, you now know that every other company is going to build products like this over time, meaning legacy products. And the legacy products are going to become even better with AI as a result. And so kind of thinking through that is really cool. One last thing I'd say is we are starting this out at the premium tier, obviously. But over time, elements of what we are building with Edge will be available to everybody because we want the entirety of Grindr experience to be AI [indiscernible] and to be really amazing. The free user experience and 91.5% of our users or 92% of our users don't pay for Grindr at all. And we do want to keep a really robust experience for them. And that's something that we will continue to do in the future as well.

Your next question comes from Eric Sheridan with Goldman Sachs.

And maybe building on that last answer, George, the first part would be just how your philosophy might change over time with respect to striking the right balance in terms of tiering the products and the platform. So you're continuing to grow the user base and also continuing to sort of evolve the user funnel more broadly described on the platform? And then the second part of the question would be, what have you learned about marketing as a potential stimulant for either accelerating the path towards higher tiers or more monetization for the platform more broadly or just user acquisition or traffic more broadly?

Thanks, Eric. Let me start with the first one. So historically, Grindr has had a very, very strong tier, very robust free tier. There are 2 things that make, I think, it particularly robust compared to most other products of our kind. One is unlimited messaging, the fact that you can message anybody and continue having those conversations in an unlimited way. It's not like we tell you can only see 10 messages at a time or 20 messages at a time. It's completely free. The result is people send 50 messages a day on average, and that's more messages than you see on WhatsApp a day, right? And messaging is just one portion of Grindr. And the second part is discovery, the fact that you see this group of people and you can start a conversation with anybody. And as you move around the city, the grid changes because different people come close to you and you can see them. That robustness, we obviously want to maintain and we want to keep. What we've done since probably 2020, so both during my time here and before, is start to slowly introduce some paywalls across the experience whether it's in filtering or in visibility or in other areas that drive more people to convert to become paying users. And that has served us well. It has allowed us to put a lot more value into the extreme unlimited tiers, and we are seeing the benefits of that now because people very much value those tiers and are willing to pay slightly more for them in light of all the extra value that we put into them over the last few years. We could continue doing that, and that's a path that a lot of other companies have taken as well in continuing to monetize by putting in more and more paywalls along the way, which would end up pushing more and more people to become paying customers. But as we discussed at Investor Day back in June of 2024, the alternative way of monetizing is to actually start offering more premium features which a smaller subset of people will really value and want to pay for. And that would then eliminate the need for you to put in paywalls that are new and force more people to become converts to paying customers. And we believe that for Grindr, given the magical nature of the free user experience and keeping it very robust, that latter way of doing things might be a better approach. And so what we're going to be focusing on in 2026 and 2027 is that AI-driven premiumization, where we will be offering new features and new products to a smaller subset of users, initially power users and then slightly broader that we believe will really serve them very well and they will be willing to pay for. That will be the driver of our revenue growth this year, next year and so forth. And then we'll be able to take some of that growth and be able to push it back to the free user to ensure that the free experience ends up being really awesome and actually starts to improve. And so one of the things that we're doing this year is actually unwinding some of the paywalls that have been put in place over the years and reducing some of the ad triggers that have been put in place as well as a giveback to the free user experience to make that experience even better than it is right now. And that's something that we believe we can continue to do as we premiumize the product. I think if you look back at last year's data from November, you'll see that younger users, 18 to 29 had a much lower payer rate. But that's okay because they can use the free product very successfully. And then as they age, they become more likely to pay because they want those added features at the more older age level. With regards to marketing, I oftentimes say that Grindr became successful in spite of its marketing rather than because of it. We, frankly, we're not really focused on marketing at all and not really paying attention to it. When I got here, I felt that marketing was a huge opportunity, and we need to really lean into it. Even though we have amazing brand awareness, 95% brand awareness in the United States, but that doesn't mean that everyone loves us and marketing's goal should be partly to have the product be loved. And what we are really doing with our marketing efforts is creating an experience that -- or creating experiences in real world and digitally that will get people to appreciate us as a business and as a product and love us more. And so what you saw last year a lot with things like the Gay Sheep campaign or the Christina Aguilera campaign are these really cultural shaping magical moments that speak to the power that Grindr has on society in terms of cultural impact. We have an audience that is very much a trendsetter. And when they start doing something, a lot of our people follow, and we very much like to lean into that with our marketing efforts. And I think the marketing change that we've seen through our new brand approach has been really fantastic and the users really love it. And we just got a little bit of data from a survey we did where like love for brand actually has increased in a significant way over the last 2 years, and we're very happy about that among [ gay men ], the kind of the core audience. We do believe there's a lot of opportunity with brand building internationally because our brand is not as known in many countries as it is in the United States. And so that is an area that we have not historically leaned into, but we will be spending more of an effort on. You saw this a little bit last year with us launching our social media channels in Spanish. We now have an agency supporting our communications work in Latin America, where we are doing a lot more comms work than we had done in the past, and we'll be leaning into that. And so we are starting to take a little bit more of a global footprint on marketing. And I do believe that over time, though that's not going to be immediate, we will see positive results in terms of user growth from more and more people knowing that we exist and then using us, right? Because what we do know is that when people know us about us in certain countries like Brazil or Philippines or India, they use us and they really like us. But a lot of people still don't know us, and they can't use us if they don't know us, right?

Your next question comes from Andrew Boone with Citizens.

I wanted to ask about Woodwork. Can you guys just help us understand how that fits into the monetization playbook for 2026 and then out years? And then understood you're moving away from the MAU metric, but we've seen 2 quarters of slowing growth. Is there anything that we should be thinking about or you want to highlight as we think about MAU growth on a go-forward basis as you do move to the annual disclosure?

Totally. So let me start with Woodwork. Thanks for asking the question. Woodwork is not at all in our guidance for 2026 from the revenue perspective. It is in there from a cost perspective, but costs on it are fairly modest. There's a small team that is working on that. But because we mostly partner with third parties for how it operates, there is not a lot to kind of cover in terms of costs other than the team. What I've said about Woodwork is everyone should think of it as a start-up inside Grindr. And it's a 10-month old start-up. We launched it in the spring of last year. In that time period, it has served thousands of users and thousands of patients, has launched more than one product. So it started out with ED. Now it offers more than ED medications, and we believe there's opportunity to offer several other treatments over time as well, such as hair care, which we don't yet offer and to really go through a test-and-learn process of like how do you go from 0 to 1. Well, now it's gone to 1 because it's able to go after more scaling, but it still is a start-up. And I joked, I think, at the Board meeting was if it were a stand-alone company and was in Silicon Valley, it'd be one of the hottest companies in Silicon Valley, given how much scale it's achieved in a very short amount of time with minimal spend. But it is still a start-up. And so we don't want to put the pressure of a public company on that team. We want them to operate like a start-up with deep start-up rigor as well as hard corners that start-up companies are run with. And so that's kind of how we are envisioning Woodwork. But we do believe that over time, Woodwork can be a very valuable growth lever for us as well as an anchor for the broader health offering that we are working on and developing. And concurrently with that, it also makes the overall offering from Grindr better, right? Because there's a lot of synergy between I subscribe to Grindr and I subscribe to, say, ED medications from Woodwork. And we are seeing a lot of positive synergy when we are offering those 2 things together. So that's kind of, I think, what I'll say about Woodwork. We're going to continue to maintain the view that giving information about that beyond that probably is not in the best interest of that product being successful. With regards to MAU, to start with, the quarterly MAU is not how we think about our business. That is just not generally what we use in day-to-day management and how we operate. MAU has grown very nicely for a long time at Grindr purely throughout of MAU. Last year, unadjusted MAU growth was 5.2%. I think I've said this before, and I'll explain again for those who haven't heard me, but we did start to much more aggressively remove unwanted accounts from Grindr than we had done in the past in 2025. And the result was that we removed about 350,000 more accounts out of MAU in 2025 than we would have done in 2024 had we not put in place all the new tools that we developed and implemented in 2025 for unwanted account removal. And so at the request from analysts and investors, we also did share an adjusted MAU growth number, meaning what would MAU growth have been like had we not removed these unwanted accounts, and that was 6.1%. So quite similar to what MAU growth would have been in the past years. The only difference really is the fact that we did have this pretty significant adjustment from the more aggressive MAU removal. I do believe that we're going to continue to remove unwanted accounts quite aggressively. And so I think the amount of raw MAU growth that we saw in 2025 is how we should think about MAU growth for 2026 as well. Now we do believe that there's a ton of opportunity for MAU growth beyond what we already do, especially internationally with all the users or all the potential users who don't know about Grindr, but could as well as the fact that there are very positive things happening in certain countries as far as acceptance in India, for example. And so over time, you will have more and more people being willing to use Grindr. And so we are thinking about what types of things we want to be doing internationally. That has been an area that we see as a big opportunity, but it's not one that we've gone after so far, purely out of focus. You can only focus on so many things, and that's not been one that we've been focused on yet, but it will become a bigger part of our focus in '26 and '27. And then the other piece that I think there's an opportunity with [ MAU ] is older cohort retention and reengagement. As you saw from the data we released in November, we have a very strong younger user base, 18 to 29, but we become a little bit weaker at the kind of 45-plus cohort. And we believe that getting those users to reengage with us is an opportunity, especially in countries like the U.S. and the U.K., and that is also something that we are working on as well. But both of those things are going to take a long time to have an impact. And so I wouldn't kind of look to, hey, in one quarter, that's going to have an impact.

Your next question comes from Logan Whalley with TD Cohen.

Yes, Logan on for John Blackledge here. Two questions. I guess, first, as you improve app functionality and then undertake big projects like you mentioned rewriting the code base, -- how do you weigh investment behind engineer headcount versus, say, investment behind AI tooling to make your current engineers more productive? And then secondly, as part of your '26 guidance, you called out in the letter you called out unwinding paywall dynamics and ad triggers. Could you just talk about that in a little more detail, like what exactly that looks like for app users?

Sure. Yes. Thank you for that question. The first one is one of my favorite questions. And I think every Grindr employee would certify that George has been pushing them on this point for a lot longer than almost every other executive in tech. I said at a conference in the fall of 2024 that there will be a time that when there are synthetic employees working alongside humans inside companies. And I got a lot of flat for that. But I think no one denies that, that's going to happen anymore. Synthetic AI agents or employees are going to be a fundamental part of our work on a go-forward basis. and we are seeing the impact of that now. At Grindr, we have been at the very, very forefront of adoption of AI in our day-to-day work, especially in engineering. And I'm pretty confident in saying that we're probably in the top 5 percentile of companies in tech in terms of how quickly we're adopting to that and how quickly we're terraforming to being an AI-native organization inside the company. The result of that is that in Q4, somewhere between 60% and 70% of the code that Grindr engineers produced was written by AI rather than by human beings. That number is higher in January and it's going to continue to be higher for the long time. And I believe that there's going to be a time when almost all the code that we produce will be written by AI agents. That does not mean that engineers don't matter. Engineers actually matter even more now and awesome engineers matter even more because the really great engineers are able to take advantage of these tools even more than anybody else's, making themselves even more valuable because they can do so much more, right? The concept of a 10x engineer is now becoming 100x engineer because one 10x engineer can do 4, 5, 6, 7, 10x engineers' worth of work as a result of what the coding agents and AI-based synthetics are able to do for him or her when they are writing code. And the way code is being written completely changes, right? I have some engineers who write me and know things like before I would come in and I would have a new project and I would think about I'm going to assign work for it. I want to give this much to this person and this to this person and would take each of these 2 individuals 6 weeks to write the code that they were going to be working on for that particular project, and I would spend a lot of time helping them be more successful plus writing my own code and then bringing it all together. Now I sit down with an agent, I started talking to it about what it is that I'm working on. I send it off to have them do the work. And within 2 days, that whole thing is done, right? So the speed by which we're going to be producing code is increasing rapidly. Internally, we've seen about a 1.5x increase in productivity per engineer. That's self-reported data. So kind of it is pretty awesome. And we're going to continue to lean into that at Grindr, not just inside engineering, but everywhere else. That does not mean we don't need more people. We are very -- our operational leverage is extremely high, $2.75 million in revenue per head, which I think is awesome. We only have 160 U.S.-based employees. Our EBITDA per employee is also very high. And we're going to continue to be best-in-class in that, but we do need more people, and we do want to continue scaling our [indiscernible] team while maintaining an extremely high talent bar. And so that's very much one of the big focus areas for us for this year, as I spoke about in our shareholder letter, kind of pushing that grinder mode that we'll be talking a lot about both internally and publicly as the year progresses. As far as the unwinding is concerned, one of the things that historically has been true for us is that when we do launch a paywall or we do add, they are global, right? We do them everywhere, all the same. And one of the things that we are learning is that maybe that's not ideal. Certain ad triggers might not matter in some parts of the country or some parts of the world, but really do matter to users in other places. Certain paywalls might not matter to people in certain parts of the world, but really do matter to them in other places based on geography, based on density, based on the type of users we have in those locations. And so some of the unwinding that we're going to be doing on ad triggers and on paywalls will actually be geographic in nature as well as user-focused in nature, meaning understanding the user, what type of category of a user does that person fall into and whether those triggers should be in place for them or not. And we believe that will end up having a better user experience as well as better long-term retention of users based on that segmentation.

There are no more questions at this time. I'd now like to turn the call over to George for closing remarks.