Tiny Beans announced their Q4 FY22 results, highlights include:

• FY22 Revenue of $10.9m (34% increase pcp)
• Advertising revenue makes up the majority of this at $9m (up 31% pcp)
• Paid subscriptions $1.5m (up 77% pcp)
• Currently there are 51K paying subscribers
• Monthly recurring revenues $166k from subscriptions
• 90% conversion rate from trial to paid subscription
• Cash balance of $4.2m
• Focus on becoming cash flow positive within 12-18months

The market wasn’t really impressed by the results. No trades were made today. They did discuss some concerns that advertising may slow due to economic conditions.

If management could continue growing and achieve cash flow positive in the near future, I think the company is looking interesting at current market cap of $8.88m USD (PS 0.80)

Tinybeans released their Q3 results

• Q3 revenue grew 40% to US$1.85m (PCP) this includes US$1.31m in advertising revenue (up 37%)
• Paid subscriptions grew to 48k, which at $40pm translates to US$1.92m pa
• Nasdaq listing on hold while they focus on strengthening foundations to become cash flow positive. It’s still a future plan to dual list on the Nasdaq
• Monthly active users for Q3 declined from 4.2m to 2.4 PCP due to transition from free to paid subscription.
• Trial service to paid subscription conversion of 87%

The transition from free to paid subscription has definitely muddied the numbers. This and cash burn is the most likely reason for the drop in share price. However, the company reported that they plan to maintain a positive cash balance without raising capital.

As a daily user myself (my wife makes us upload a photo of our three kids each day) we find the product to be a great way to share photos privately with family. The app is easy to use and even the grandparents and great grandparents upload and comment on photos/activities. Tinybeans have also brought out a pet category which opens up a new market opportunity.

The company is moving to become more of a marketplace where advertisers can target parents and parents can find special deals for products/services. I’m not sure how well this will work out; but I do feel they have something with their base service - private photo sharing. The US is a huge market, if they can build a base there, existing customers (parents) will advertise to new parents and subscriptions will grow organically from there.

The company is valued at US$16m market cap and expected revenue is approx $10m, this is a price to sales of 1.6x for a software based company. This is a pretty low valuation if they can grow subscriptions (currently only 48k paid users). They can do this by initially growing organically in the US and then expanding into other countries. The advertising revenue is a bonus if they can find a good balance. It’s also worth noting that more advertiser revenue will be generated as they grow users on the platform.

I have recently bought a small parcel of shares in SM and IRL.