On the EDGE of Glory; Upgrade to Overweight

研报英文原文证据摘录

On the EDGE of Glory; Upgrade to Overweight

IdeaMGRND is a one-of-one asset that’s heavily undermonetized versus peers: Grindr

has strong network effects among its 15M users, reaching 60% global brand

awareness despite marketing spend at <4% of revenue. Users are highly engaged

with DAUs spending >65 minutes on the app daily. That has translated to consistent

>40% EBITDA margins. For a sense of its ubiquity, about half of gay relationships

in the US start on GRND. It also plays in a higher income and more retentive

segment than online dating brands like Tinder or Bumble. Despite its advantages,

the app monetizes ~30% below other dating apps - a gap which we believe can

close as GRND expands its product suite.

GRND is shifting from value extraction to value creation with two products that

could enable step-function upside: Grindr had been underinvested in and

undermonetized before going public in 2022. Since then, the company materially

increased and optimized the paywall which delivered a remarkable ~31% '22-'25

topline CAGR, but also increased user frustration and led to MAU growth concerns.

The company has been working to pivot towards healthier product-led monetization

(creating new value for users and then capturing it). That process has taken time,

but we now have line of sight to meaningful contribution from two new products

that we believe can drive revenue without impacting user growth: EDGE (an ultra-

premium tier) and Woodwork (a DTC telehealth brand). The upside from these new

products is material: GRND has grown revenue at ~$90M per year and we

believe EDGE and Woodwork could each deliver 'one-year' or more of revenue

growth (>$90M).

1) EDGE: Grindr is set to launch an ultra-premium, AI-led tier which could drive