The Tinybeans Group Ltd (ASX: TNY) share price has been one to watch following its June quarterly report release. The ASX tech share reached 96 cents by the close, an increase of 6.1% for the day.
What is Tinybeans?
Tinybeans is a free social media platform developed in Australia and targeted to parents globally who want to share photos and videos of their children within a secure community. The company’s platform is designed to boost online safety by creating a contained, invite-only environment. This allows parents to upload photos and videos of their kids and securely share the content within an approved network.
How did Tinybeans perform in the fourth quarter?
Tinybeans performed very well in the fourth quarter despite the negative impacts of COVID-19. This was seen as users increased by 39%, compared to the prior corresponding period, to reach 4.65 million. Monthly active users also grew to over 3.7 million, an increase of over 160,000 new active users.
Strong performance across the board saw revenues for Q4 reach a record high of $2.36 million, an increase of 93% on the prior year. This record result, however, was adversely affected by reduced advertising spend and the deferment of key campaigns. Also, Tinybeans has $4.3 million in forward booked contracts which, by comparison, is 300% higher than 12 months earlier. This was significantly aided by the successful integration of the Red Tricycle operations.
Another highlight for the company was new advertising wins with great brands including Amazon, Apple, Penguin Random House, General Mills and YouTube Kids. Tinybeans recorded cash receipts of $1.93 million for the quarter with cash burn of $582,000, not including loans from the United States. Tinybeans’ cash balance sits at $5.22 million.
Tinybeans CEO, Eddie Geller, spoke of the results saying: “I’m pleased to report that we delivered strong growth for the quarter despite COVID disruptions to our operations and our brand partners. Despite market conditions, the platform saw an increase in new member sign ups and engagements as ‘stay at home orders’ across the US encouraged more interaction across the platforms.”
What’s next for this ASX share?
This quarterly report is much needed good news for the ASX micro cap. Its share price has been plummeting in 2020, down 57% for the year. However, while advertisers in the US have begun to resume spending, there is still some uncertainty in relation to the pace at which spending will recover. Tinybeans investors will be hoping for a faster than expected recovery to the pandemic to get this spending back on track.
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Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Tinybeans Group Ltd. The Motley Fool Australia has recommended Tinybeans Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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