Shares declined 6.7% following the earnings release despite management’s optimistic commentary, as investors appeared disappointed by the modest upward revision to full-year guidance and cautious outlook on advertising revenue normalization.
- Q2 revenue grew 33% year-over-year to $138 million; adjusted EBITDA increased 27% to $58 million, with a 42% margin.
- App-based revenue rose 30% to $113 million; advertising revenue surged 44% to $25 million but is expected to normalize to historical mid-to-high teens percentage of total revenue by 2027.
- Operating expenses (ex-revenue costs) increased to $71 million from $53 million last year, partly due to one-time marketing costs related to the Madonna partnership.
- Full-year 2026 revenue guidance was modestly increased to ~$540 million (from $535 million), and adjusted EBITDA guidance raised slightly to ~$232 million (from $227 million), signaling tempered medium-term optimism.
- Management highlighted AI-driven efficiency gains and continued product investments, but the cautious tone on ad load discipline and margin pressure likely fueled investor concerns.
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