Interim results: Let’s play
Takeaways from today’s results are: (i) cash US$9.2m vs US$2.5m at end-December; (ii) own IP 78% of Gaming revenue vs 65% at H1 23. While CEO Alex Nichiporchik describes the market as ‘difficult’, the H1 print tell us that the focus on cash generation and financial stability is working. The strategy of ‘investing cautiously’ in higher-budget games and building a diversified portfolio of own IP is similarly working. tinyBuild is gaining mindshare and added over 3 million wishlists across the portfolio in June alone. Own-IP sales were up to US$13.1m, from US$12.8m last year, as group revenue fell 19% to US$18.8m. Short- term fortunes remain tethered to H2 performance but tinyBuild has an improved pipeline (including larger-budget US$1m+ titles). We adjust estimates to reflect a highly competitive market for new launches, with FY24E adj. EBITDA at US$0.3m (prior US$1.1m). tinyBuild retains its emphasis on IP, expanding reach, title debuts and monetising the back-catalogue, which should encourage Investors. H1 was a rebuild, a catalyst to addressing the stark valuation gap (EV/Sales 0.3x vs sector 2.3x).