Tiny Ltd.

Good morning and welcome to the Tiny Limited Q1 2025 results conference call. 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'd like to ask a question during this time, please press star followed by one on your telephone keypad. If you'd like to withdraw your question, press star followed by two. Before we start, we ask you to take a moment to read the disclaimer the beginning of the slides that accompany this presentation as it contains important information we'd also like to remind you that all amounts discussed on this call are denominated in canadian dollars unless otherwise indicated please note that statements made during this call may include forward-looking statements and information and future orientated financial information regarding tiny and its business and disclosure regarding possible events conditions or results are based on information currently available to management, which indicate management's expectation of future growth, results, results of operations, business performance, and business prospects and opportunities. Such statements are made as of this date hereof, and tiny assumes no obligation to update or revise them to reflect events, disclosures, or circumstances, except as required by applicable security laws. Such statements involve significant risks and uncertainties, are not a guarantee of future performance or results. A number of these risks and uncertainties could cause results to differ materially from results discussed today. Given these risks and uncertainties, one should not place undue reliance on these statements and information. Please refer to the forward-looking statements disclaimer in the slides accompanying this presentation and in the company's press release issued today for additional information. We use non-IFRS financial measures to help investors understand our operating performance. Non-IFRS financial measures may not be comparable to similarly titled measures used by other companies and should not be considered along with, but not as an alternative to, measures calculated in accordance with IFRS. I would now like to turn the call over to the executive team from Tiny for today's earnings call. Please go ahead.

Thank you. Good morning, everyone. You've got Jordan Tobe here, CEO of Tiny. I'm joined by Mike McKenna, our CFO, and we're excited to speak to you this morning. So really proud to report our Q1 results, which showed continued momentum on all our strategic priorities. You know, first off, Tad Piper- In q1 or right at the end of q1 we announced the acquisition serato a global DJ software leader, and you know excited to announce that we actually close the transaction on may 12. Tad Piper- This this really represents an ideal tiny acquisition, I mean the the fundamentals of the business are quite strong we've seen your term organic growth opportunities. Tad Piper- You know i'll talk about it a bit more on the next slide but we're excited to get working with the team and partnering with the founders to drive long term. value and growth for Tiny and Cerato. We also announced the integration of Stamped, Repeat and NoCommerce under the new leadership of Jeremiah Prummer. Previously, he was the CEO of NoCommerce and he's done an incredible job of growing that business and marketing it and really driving value for merchants. But we're excited about the integration. We're unifying reviews, loyalty, customer insights, retention, actually a number of other features under a common data layer and using machine learning and using AI to provide increased value to merchants. So, you know, think things like, you know, tracking and increased conversion and driving revenue and actually really rethinking the entire reviews and loyalty, you know, capability and feature. So we're excited to release that product and we're excited about the near-term and long-term roadmap there. And then finally, Dribbble officially launched its project and services offering. This is really part of the strategic refocus of the business. We're generating additional transaction revenue for Dribbble through GMB that's now running through the platform. We're investing in the services platform. We continue to partner with advertisers and Along with the project and services offering, you know, this really actually drives further growth in our subscription offering. So it's something that we're focused on right now. And it's really all in the service of making Dribbble that destination where designers can, you know, basically further their career, make money, come to the site and get inspiration. So we'll continue to keep you updated on the progress there as well. And then finally, on the financial highlights, uh, you'll see a 41% increase in our adjusted EBITDA for the quarter that brings our LPM adjusted EBITDA to about 34 million. So, you know, again, really showing the continued progress of cost rationalization, focus on organic growth, um, big improvement in free cashflow generated. And, and Michael will talk a little bit more about that. And, um, you know, in terms of our debt reduction strategy and just managing cashflow and improving working capital. And then finally excited to announce a 1Million dollar distribution from tiny fund 1. and again, we'll talk a little bit more about the increased disclosure there a little bit later in the presentation, but we do expect to be on a regular cadence of dividends there. And we'll continue to get. Better and better at disclosing the performance of the fund over the coming quarters. So Serato, we are excited again to announce the closing on May 12th. Just as a reminder, and I know this was only about a month and a half ago, but this is the global DJ software leader. It has an amazing history of innovation and really is part of music and DJ culture. This is a piece of software that is mentioned in popular music. But it's also a wonderful business with amazing organic growth opportunities. It's expected to increase our recurring revenue by almost 70%, total revenue by greater than 20, and improve our adjusted EBITDA and improve our cash flow. We really do think this represents a transformational acquisition, and it is that kind of ideal platform that we look for in terms of hardware partnerships, hardware moat, even just technology. And innovation and we're just excited to keep you updated on the progress of the investment and and to partner with the management team. So, moving on to revenue. Revenue pro forma are divestitures of Frosty and 8020. We achieved 6% growth quarter over quarter, which we're very, very proud of. Digital services is actually driving quite a bit of that growth, but we also saw growth in our other platforms as well. There was some seasonality in our software and apps business compared to Q4, but Um, you know, that was, that was expected. Um, when we're comparing Q1, 24 to 25, um, you'll see some growth in digital services again. Um, you know, X, sorry, X, uh, for us, unity 20, actually we grew, uh, almost 24%. Um, so that's, that's great. And, uh, and the decrease in our creative platform is really driven by that, by that strategic shift in dribble. And there is some impact from enterprise revenue timing, especially with some bigger deals that landed in Q1. And you'll see that smooth out over the rest of the year. And then finally, you'll see some increase in the other platform, and that was driven by our acquisition of Medianet. But we're also seeing some nice organic growth in our other businesses as well, including WeWork, Promotely, and Meteor. On the recurring revenue front, we saw some slight growth year over year compared to Q1 2024, driven by our acquisition of Medianet and our continued focus on improving recurring revenue in our businesses that have it. But the big story here, obviously, is our Serato acquisition. You know, we're going to have that included in our Q2 results and in 2025. It is expected to improve the ratio of recurring revenue for Tiny overall to 27%, and we just see some amazing opportunities to improve that organic recurring revenue growth with things like improving their payment strategy, near-term development roadmap that we've been really working on in diligence, and even just in the past few days after closing the deal. So we're excited to keep reporting on our recurring revenue metric and the growth there over the coming year. I'll pass it on to Mike to go over the next slide.

Okay, thanks, Jordan. I'll start off with adjusted EBITDA. And we are again reporting a strong quarter for adjusted EBITDA performance for the second quarter in a row. This has been a significant area of focus for us as the management team. And as investors know, is viewed as a strong KPI for the business overall. So we're very pleased with the progress that we've made in this area. Our adjusted EBITDA increased 41% when you look at the prior period. And when we adjust for those divestitures that Jordan mentioned, it's actually up 63%. compared to Q1 of 2024 so pretty significant increase again really driven by the cost rationalization initiatives the continued focus on organic growth it's just a strong you know overall focus on operating performance and so starting to see those results uh come through um I mentioned the overall margin and again you know a margin again of above 20 in the quarter This is up from about 14% in Q1 of 2024. So we're really continuing to focus on that margin stability. We're seeing improvement across the portfolio, and we're going to be able to maintain that through Q2. And you'll obviously see that increase with the acquisition of Serato and the Serato inclusion in Q2, given the nature of that business. Okay. So if we move on to Adjusted free cash flow. Again, another metric that we've got a lot of focus on internally as a management team. And obviously, you know, to again highlight to investors the importance of this area of focus. We're getting, we're seeing very significant Margin expansion here or increase overall in our free cash flow, 168% on the quarterly basis. But I think the biggest thing to draw attention to in and around the adjusted free cash flow, and we show this on a post debt servicing level. So you can see obviously there's plenty of room for the debt servicing that's required. It's just the smoothness of the quarter and in the context of even comparing to a year ago or even a quarter ago, We did talk about this trend of less adjustments into some of the KPI calculations, and we're seeing that trend flow through, and we're going to be able to see this continue through 2025. We will always continue to have business acquisition costs quarter to quarter, year over year, given that's really the sort of core focus of our growth and the opportunities ahead of us. But just as it relates to the ongoing adjustments to these metrics, adjusted EBITDA, adjusted free cash flow, I think you're seeing quite a bit of smoothness in the numbers now through Q1, and that will continue into Q2. And again, as these numbers continue to be enhanced, We'll obviously have more opportunity for capital redeployment, whether that be to continue to repay debt or look for other growth initiatives. I'll turn it back to Jordan now to talk briefly about the tiny fund one and some new disclosure that we provided in this quarterly overview.