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Family-oriented social media platform Tinybeans (ASX: TNY) has exploded out of the gates during the first quarter of FY20, reporting a 91 per cent increase in revenue during the period.
The strong revenue growth comes on the back of a healthy influx of new users, with 210,000 joining in the last three months, and a stronger rate of monthly active users, up 50,000 on the previous quarter.
Despite the strong growth investors appear to have expected more from the social media group, with shares in Tinybeans down 15.35 per cent to $2.04 per share at 12.20pm AEDT.
Advertising revenue pushed total revenue to nearly double on the same quarter in 2018, and the company expects this to increase further in Q2 given it is the largest quarter spend within the advertising calendar for the social media group.
The group saw a 109 per cent increase in advertising revenue during the quarter, up from $407,020 in Q1FY19 to $851,997 in Q1FY20.
READ MORE: Our exclusive interview with Tinybeans CEO Eddie Geller.
Tinybeans CEO Eddie Geller says the strong first quarter positions the company well moving forward.
"We're pleased to deliver a strong start to FY20 by nearly doubling the revenues on the same period 12 months earlier," says Geller.
"Also encouraging is that we achieved solid growth in all key metrics while beginning to make more longer-term investments with the proceeds from the capital raise."
"As we further invest through FY20 to grow the brand, build out the platform's capabilities and continue sales efforts, we're encouraged the market is responding well to these investments to make Tinybeans a stronger company delivering sustainable growth and diversification in revenues for future years."
Premium subscriber revenue hit an all-time high of $299,424 during the quarter, with total paid subscriptions hitting over 17,300.
Tinybeans notes that in the past 60 days it now has over $4.3 million in advertising sales in the pipeline, derived from the group targeting longer term partnerships with larger brands.
"The company expects 2020 to be the year where more large brands will follow in Lego's footsteps and bet on Tinybeans as its targeted platform of choice for parents and families," says Tinybeans.
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