Grindr's AI spend is paying off and its pricey new tier has had some surprises, CEO says

Grindr's CEO George Arison revealed that the company's investment in artificial intelligence (AI) is proving fruitful, as the AI strategy is delivering tangible financial returns and improving the dating app experience. In a recent earnings call with CNBC, Arison disclosed that Grindr's second-quarter revenue reached $138 million, a 33% increase from the previous year.

The company also raised its revenue forecast for 2026, now expecting approximately $540 million in annual revenue, up from $535 million, and adjusted EBITDA of around $232 million, up from $227 million.

Arison emphasized that AI is being utilized across various aspects of the business to enhance productivity and reduce costs. Since implementing AI, Grindr has seen a 2.5 times increase in total engineering output between July 2025 and April 2026, without significantly expanding the engineering team. This increased efficiency is attributed to the adoption of coding assistants and software development tools, such as Cursor, Anthropic's Claude, and Devin.

Grindr has introduced a new premium subscription tier called "Edge," which is an AI-powered "dating companion." Initially, management anticipated that only existing "Unlimited" subscribers would upgrade to "Edge." However, the data has shown that users from various subscription tiers, including those who do not subscribe at all, are adopting the new feature. The AI-powered "Edge" is being tested in select markets, including New York, where access costs up to $350 per month.

Despite the higher pricing, Grindr has experienced surprisingly strong subscriber retention and growth. The company's paying user count increased to 1.4 million in the second quarter, a 16% increase from the previous year, with an average revenue per paying user reaching $25.51, a 12% year-over-year increase. Additionally, Grindr's churn rate has been lower than expected, leading to more organic growth in the first half of the year.

Morgan Stanley upgraded the stock to "overweight" from "equal weight" and raised its price target from $15 to $18, citing the potential for the "ultra-premium" subscription tier to be successful.