proof his AI strategy is working

Grindr, the LGBTQ-focused dating app, believes artificial intelligence (AI) can transform its business model and accelerate software development. CEO George Arison revealed that AI will create a new premium subscription tier and enhance engineering productivity. The company reported a 33% revenue increase to $138 million in Q2, up from $103 million a year ago.

Arison expects full-year revenue to reach $540 million, an approximate 1% growth from $535 million. The AI strategy has allowed Grindr to double its engineering output without increasing headcount, a trend investors are keen to observe. Despite investing $6 million on AI tokens, Arison is confident in the productivity gains, estimating a 10-fold return.

Grindr is testing the AI-powered Edge companion, priced at up to $350/month in select markets, like New York. While initial expectations were for Edge to attract only premium subscribers, the customer mix has been broader. The company is pleased with the test results, noting that paying user retention has remained stronger than anticipated despite price hikes.

Grindr's AI investments have shown early signs of translating into business performance, according to Morgan Stanley's recent upgrade to overweight with a price target of $18.