Family photo sharing app Tinybeans Group Ltd‘s (ASX: TNY) shares have risen by 15.87% so far in today’s trading. At the time of writing, the Tinybeans share price is trading at $1.46 after closing yesterday’s session at $1.26. Today’s moves follow an announcement by the company this morning that it hired two new executives in its United States operations. The hires reinforce the importance to the company’s business model of the US market, which is where 92% of its revenue comes from.
According to the release, leading US executives, Andrea Cutright and Kathy Mayor, will join the company as non-executive directors commencing immediately. Both Ms. Cutright and Ms. Mayor have substantial experience in digital marketing – the exact skillset Tinybeans needs to increase its footprint in the market.
Tinybeans in a nutshell
Tinybeans was founded in Sydney in 2012 by Stephen O’Young. It’s a family photo sharing app that helps parents capture and organise their children’s life using photos, video, and written messages.
One big selling point for the app is that it has privacy features that allow parents to retain legal ownership of their content, unlike other larger social media sites. According to the company, it has a user base of more than 4.65 million people spanning over 200 countries. The app is available in both Android and iOS.
Despite this wide user base, Tinybeans’ revenue is predominantly generated in two countries – the US and Australia. As mentioned, the US makes up 92% of the company’s revenue, while Australia contributes most of the remainder. The company employs both a premium subscription and advertising revenue model.
How healthy is Tinybeans financially?
In the company’s release of its Q1 FY21 update last week, it reported that revenue jumped to $2.5 million, a 123% increase on the prior corresponding period. The record result was achieved by Tinybeans’ premium subscription base growing above 22,000 members, with total registered users surpassing a record 4.65 million.
Additionally, the company achieved big advertising contract wins this year with Amazon.com, Inc. (NASDAQ: AMZN), Penguin Random House, General Mills, Inc. (NYSE: GIS) and Alphabet Inc‘s (NASDAQ: GOOGL) (NASDAQ: GOOG) YouTube Kids. It already has Walt Disney Co‘s (NYSE: DIS) Disney+ as a client on its books.
The company uses little debt and has a strong debt to equity ratio of 8.5%, compared to 30.5% in its sector. Its cash position at $5.2 million is strong, which also makes the company relatively liquid compared to the sector.
About the Tinybeans share price
The Tinybeans share price has been an impressive performer since the beginning of August, delivering a gain of over 80% for shareholders. Year to date, however, the Tinybeans share price has declined by over 34% due to the loss in advertising revenue as COVID-19 disrupted its major advertisers.
Tinybeans will be hoping that the hiring of experienced executives today will help the company secure more advertising contracts and grow its user base in the US.
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- Why is the Tinybeans (ASX:TNY) share price edging higher today?
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. dsunarto has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tinybeans Group Ltd and recommends the following options: long January 2021 $60 calls on Walt Disney, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Tinybeans Group Ltd, and Walt Disney. 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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