Tinybeans (ASX:TNY) share price will be on watch tomorrow, here's why!

The Tinybeans Group Ltd (ASX: TNY) share price will be on watch tomorrow, as the social platform provider released its results this afternoon

Mitchell Lawler

Mitchell stumbled upon the concept of investing when in high school, devotedly urging his parents to put some money into a handful of technology companies with increasingly popular products among his demographic – many of which have gone on to great success. It wouldn’t be until 2017, some five years later, that Mitchell became an investor of his own money. Having studied and worked as a mechanical engineer in the building services industry, Mitchell takes a methodical and analytical approach to evaluating businesses. Rather than relying purely on numbers, Mitchell drills beyond a company’s metaphorical mantle to unearth obscure patterns or competitive advantages that would go otherwise unnoticed. His expertise resides within areas such as software, consumer goods, and building services equipment. However, his quest to find quality companies that set the industry standard and flex some degree of an impenetrable position has no limits – small cap to mega cap, cosmetics to healthcare – if it’s an exceptional business it’s on his radar.

Published February 25, 2021 5:19 pm AEDT

The Tinybeans Group Ltd (ASX: TNY) share price will be in focus in early trade tomorrow, after the social platform for parents and their children reported its half-year accounts.

Tinybeans sneakily released its announcement 10 minutes before market close, at which point the share price had already taken a 6.5% dive.

young woman sitting cross legged with large tub of popcorn and surprised facial expression — Image Source: Getty Images

So, what are the numbers?

The numbers shouldn't be too much of a surprise to the market, as it is essentially the accumulation of September's quarterly report and January's report. However, half-year reports can sometimes include amendments and adjustments that were not originally captured.

First of all, Tinybeans' revenue for the first half came in at a total of $5.633 million. This represents an increase of 141% compared to the previous corresponding period (pcp).

The company also highlighted the following significant items in the half:

Advertising revenue reaching over $4.72 million, an increase of 185% pcp
Subscription revenues increased to $507,000, an increase of 18% pcp
Monthly active users (MAU) reached over 4.8 million, an increase of 253%
Cash balance of $4.46 million as at the end of December.

Tinybeans' advertising revenue benefitted from both the renewal of existing advertisers and the addition of new ones. The Australian company now boasts an impressive list of advertisers including Apple, Netflix, Amazon, Google, and Walmart.

Given that the premium service of the Tinybeans app has an annual option, the retention rate is important. Based on the report, premium subscriptions maintained a retention rate of 92%.

On the bottom line, Tinybeans reduced the net loss to $1.073 million, down from a loss of $1.873 million. The company finished the half with a cash balance of $4.464 million, declining from $5.220 million at the end of June 2020.

Growth in the sights of management

CEO, Edward Geller, outlined that the company is still in its very early stages of what it aspires to be. Currently, Tinybeans is fundamentally a photo-sharing app for parents with children/babies. However, Mr. Geller sees the company evolving into a platform that parents use daily.

Mr. Geller further commented on the growth trajectory of Tinybeans:

As announced to the market at the Innovation event, the product roadmap is ambitious, so the right balance of capital investment is needed to ensure its success. Since July 2020, the Company has ramped its capital investment to nearly $1 million per quarter to begin executing on this vision but it is important to note that this is being done prudently with the right balance of revenue growth and cash management.

Tinybeans share price snapshot

The Tinybeans share price appears to have benefitted from a continued emphasis on privacy. The company's share price has risen 23% in the past 12 months. Surprisingly, the small-cap share has not experienced excessive volatility in the past 3 months.

The company currently has a market capitalisation of $79 million.

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