Q2 2026 Tiny Ltd Earnings Call Transcript
Key Points
- Revenue reached $51.6 million in Q2 2026, a 3% increase year-over-year, with adjusted EBITDA of $10.6 million, representing a 21% margin.
- Annualized recurring revenue (ARR) grew 32% year-over-year to approximately $70 million, now accounting for 34% of total revenue, driven by the Serato acquisition.
- Serato, a key acquisition, has 70% recurring revenue and is experiencing strong growth in net new customers and upgrades to higher-tier subscription plans.
- Letterboxd surpassed 30.7 million registered members, up 185% since acquisition in September 2023, and Matina leads the Whole Foods energy category with 1.8 times the volume of the second-place competitor.
- The company repaid $2 million of debt in Q2 and an additional $1.6 million after the quarter, demonstrating commitment to reducing leverage, which ended at 2.8 times.
- Tiny Fund revenue increased 15% year-over-year to $13.2 million (USD) in Q2, with distributions to Tiny of $0.5 million in the quarter and $2.8 million on an LTM basis.
- Cost rationalization efforts, particularly in e-commerce and creative markets, are expected to drive further margin improvements in coming quarters.
- Digital services revenue declined to $16 million from $19.6 million in Q2 2025, reflecting a tough comparable and the divestiture of Frosty, AD20, and Z1.
- The company took a significant bad debt charge of $4.1 million in the quarter, related to a minority investment write-down and review of major receivables.
- LTM free cash flow decreased to $13.4 million ($0.46 per share) from $18.6 million ($0.70 per share) in the prior year period, due to timing of contract payments, income tax installments, and working capital movements.
- Net debt to adjusted EBITDA ratio stands at 2.8 times, slightly above the target range of 2 to 2.5 times, indicating ongoing balance sheet pressure.
- E-commerce and creative markets are facing more competitive and challenging conditions, leading to revenue pressure and necessitating structural cost reductions, including severance costs.
- The company's indirect interest in SpaceX through Metalab Ventures is only 14.1% as an LP, limiting potential flow-back of proceeds to Tiny shareholders.
Good morning and welcome to Tiny Limited second quarter 2026 results conference call.
(Operator Instructions)
All lines have been placed on mute to prevent any background noise, and after the speaker's remarks, there will be a question-and-answer session.
If you would like to ask a question during this time, simply press 1, the number 1 on your telephone keypad.
If you would like to withdraw your question, press restart. We ask you to take a moment to read the disclaimer at the beginning of the slides that accompany this presentation, as it contains important information.
We would also like to remind you that all amounts discussed on this call are denominated in CAD unless otherwise indicated. Please note that statements made during this call may include forward-looking statements and future-oriented financial information regarding Tiny and its business.
Disclosure regarding possible expectations, events, conditions, or results that are based on information currently available to management, which indicate management's expectation of Chinese future
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