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Listed photo-sharing app Tinybeans Group (ASX: TNY) has reported its first ever EBITDA-positive quarter, posting a modest US$8,000 ($11,127) profit in the three months to the end of March on the back of a surge in revenue following the acquisition of US journaling platform Qeepsake Inc. late last year.
The milestone quarter swings from an EBITDA loss of US$328,000 ($456,228) in the prior corresponding period and follows the company's US$2.7 million (A$4.1 million) all-scrip acquisition of Qeepsake in November, a deal that roughly doubled its paid subscriber base.
The Qeepsake deal helped Tinybeans' revenue increase to US$1.79 million ($2.49 million) for the period.
Subscription revenue of US$1.45 million ($2 million) accounted for 81 per cent of total quarterly revenue, while e-commerce revenue exploded 678 per cent to US$198,000 ($275,400) off the back of a new bespoke photobook range.
“This quarter represents a defining milestone for Tinybeans," says interim CEO Tracy Cho, who was appointed in February, replacing Zsofi Paterson.
"Achieving our first EBITDA-positive result validates the scalability of our subscription-led model and reflects the strategic contribution of the Qeepsake acquisition to our consolidated performance.
"During the quarter, we invested in product development across both platforms - integrating AI and machine learning capabilities and launching bespoke in-house photobooks, with both delivering within our existing engineering budgets."
Cho, a seasoned digital media executive and formerly CEO of Qeepsake prior to the acquisition, says AI and automation sit at the centre of the company's product roadmap, which will enable "intelligent photo organisation, personalised content delivery and frictionless capture".
"All (are) increasingly important and pertinent capabilities in an era of AI, designed to deepen the value we deliver to families and accelerate growth whilst still maintaining our focus on as a privacy-first platform and alternative to photography products," she says.
"Market conditions may shift, but families continue to invest in memories that last a lifetime. This quarter’s results speak to that, and to our role as the secure home for those moments.”
Tinybeans Group, which is chaired by former CEO of Seven West Media James Warburton, was also operating cash flow positive during the quarter, generating US$324,000 and closing with a cash balance of US$1.95 million (A$2.81 million).
Customer acquisition cost fell 81 per cent to US$19, with the combined platforms now serving about 95,000 paid subscribers.
Tinybeans reported a retention rate of 95 per cent on its core platform, while Qeepsake sat at 79 per cent.
CFO and executive director Rebecca White says the quarter validates the operating leverage in the business model.
"The combined business is now delivering improved operating efficiencies, which provides a strong foundation for scalable growth," says White.
"Looking ahead, our focus remains on disciplined execution as we continue to integrate operations and optimise the combined business.
"At the same time, we are selectively investing in product development to ensure we remain aligned with the evolving needs of modern families and maintain the quality of our user experience.
"We look forward to building on this early momentum and continuing to drive sustainable growth for the business.”
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