Tiny Reports Q2 2025 Results

Executive Summary

• Tiny Ltd. reported Q2 2025 financial results, highlighting significant improvements in profitability and cash flow driven by the recent acquisition of Serato and operational cost discipline.
• The company successfully closed the acquisition of a majority interest in Serato on May 12, 2025, which contributed to a 22% year-over-year increase in Adjusted EBITDA and a substantial turnaround in Free Cash Flow.
• Strategic portfolio updates include Letterboxd reaching 21.4 million members (up 47% YoY) and launching a transactional video-on-demand service, while Metalab completed landmark AI projects.

Key Details

• Financial Performance (Q2 2025 vs Q2 2024):
  • Revenue: $50.0 million (reported decrease of 2%, but up 4% when adjusting for prior year enterprise licensing deals and dispositions).
  • Adjusted EBITDA: $8.2 million (22% increase YoY); Margin expanded to 16% from 13%.
  • Free Cash Flow: $6.0 million (improvement of $9.7 million YoY, turning from negative $3.7 million).
  • Net Income: $11.0 million (vs. net loss of $1.7 million in Q2 2024).
  • Diluted EPS: $0.05 (vs. loss of $0.01 in Q2 2024).
  • Recurring Revenue: $13.2 million (37% increase YoY), representing 26% of total revenue.
• Six-Month Performance (H1 2025):
  • Adjusted EBITDA: $17.9 million (32% increase YoY); Margin improved to 18% from 14%.
  • Free Cash Flow: $9.0 million (increase of $11.6 million YoY).
• Serato Acquisition Details:
  • Closed May 12, 2025.
  • Consolidated results include approximately half a quarter of Serato's financials.
  • Pro Forma Adjusted EBITDA for Q2 2025 was $10.3 million.
  • Serato launched Apple Music integration within the DJ platform.
• Balance Sheet & Liquidity:
  • Cash on Hand: $26.7 million (up from $22.9 million at Dec 31, 2024).
  • Total Debt: $116.9 million (unchanged from Dec 31, 2024; repayments offset by new credit facilities for Serato).
  • Debt Repayment: $5.2 million paid down in Q2 2025.
  • Net Debt to Pro Forma LTM Adjusted EBITDA: 2.8x (down from 3.1x in Q2 2024 and 3.8x at Dec 31, 2023).
  • Total Assets: $524.4 million (up from $350.5 million at Dec 31, 2024).
• Portfolio Updates:
  • Letterboxd: Reached 21.4 million members (47% YoY increase, 106% since acquisition in Sept 2023); announced launch of transactional video-on-demand service at Cannes Film Festival.
  • Metalab: Completed landmark AI projects for Windsurf and Crusoe.
  • Tiny Fund I: Net Asset Value increased by US$13.2 million to US$142.0 million; Tiny received $0.5 million in distributions.

Notable Quotes

• "Closing the acquisition of Serato Audio Systems Limited ('Serato') marked a significant milestone for Tiny, substantially increasing our recurring revenue and profitability, and enhancing the foundation for sustainable long-term growth." — Management Commentary
• "Q2 was another strong quarter for Tiny and our team. By welcoming Serato to the Tiny portfolio and continuing our focus on disciplined cash flow growth across the businesses, we are delivering on our strategic priorities. Long term organic and acquisition-led growth, operational excellence, cash flow generation, and managing our leverage profile remain key drivers of our strategy." — Jordan Taub, CEO