Tinybeans Group Limited (TNY) Earnings Call Transcript & Summary

All right. Hi, everyone. Well, good evening for people here in the U.S., good morning for people here -- there in Australia. My name is Eddie Geller, CEO of Tinybeans Group, and thanks so much for joining us today on our earnings call. With me, I've got Chris Motsay, our CFO, at Tinybeans also.

Hi, everyone. How are you?

So excitingly today, we'll share a little bit more about our results we've just released to the market. So wherever you will hope you all staying safe and being well, and thank you for being such wonderful supporters and shareholders of the company and following us from where we are today when we're going into the future. . Those of you who don't know, I'm a dad of 4 boys, 11 to 19. And yes, they're amazing, but they're also challenging. And as a parent, I -- you think after the years of experience I have that -- we think I'm pretty good at it. Well, I personally think I need all the help I can get. So I'm really on a personal mission to build something truly special that all parents can benefit from. So I personally could benefit -- all parents that we can benefit from, and we're in a figure of doing something truly amazing, and I think Tinybeans in a really special time to really create a platform that we can help, I guess, the world and parents everywhere really raise amazing kids. So today, what we're going to do is, jump in and talk about our second quarter, so second quarter of the fiscal year. It's a record quarter, which is really exciting to talk more about today. I'll talk about the highlights, and you clearly have everyone a chance to answer -- and will submit -- answer questions. We've intended some questions earlier, so I'll start with those at the end. But if you do have questions throughout the presentation, please pop them into the Q&A box, and then we'll get to them at the end. So let's jump in and talk about some of these highlights. So rather than jumping into the numbers and giving you a specific, I just -- it's important just to set the scene about the space we're in and the community we're servicing. So Tinybeans across the platform and across the social channels that we have reached over 28 million parents. And I just want to say for those parents that they are proactive, influential parents. And what's exciting about these parents is that basically, they see a huge amount of value in what we can offer. They're telling us the types of things we should be offering in the future and it presents an enormous opportunity for us to really offer these things for them to be able to engage and use Tinybeans as a much more, I guess, habitual utility to come back daily, weekly, monthly. So yes, the platform has today about 3.5 million monthly active users, but our reach is much greater -- and what's important is that the reach of these parents themselves is also very, very high. And we've been talking to a lot of these parents. You can still hear some of the stats we are hearing from them every day, and it's really exciting. So all the things we're talking about in terms of what we're building out is being validated every day by the parents we're talking to on the platform, both within the app, within the website and on our social channels. So in terms of results, so like we shared with the market early December, it's been a wonderful, wonderful quarter. So to finish the quarter with USD 3.65 billion, it's a record for us. It's 59% year-on-year growth in the same period, 12 months earlier, which is this incredible again, all driven organically, all driven by a lot of work internally to really drive value to our customers. Part of that is really driven by advertising revenue, up 64%. And then as everyone would know, we launched a new paid subscription product called Beanstalk, which I'll talk about more in a few minutes. But it also reached incredible record USD 360,000 just for the quarter, were just 70% up on the year. So really happy with the quarter. It really shows what the business can do and what the opportunities are ahead. And just some major growth drivers there really by the advertising value prop is still very, very compelling, and we're just beginning with that. A lot of the uniqueness of the platform is really starting to resonate with brands, brands are coming back for more things. We've got a case study here. I want to talk about it in a few minutes also. So it's not just about the value of the brand that we have, the platform in terms of our parents, but also for advertisers and also our first-party data. Those of you who don't know about first-party data, it's where parents share this information with us and then we can give them a more unique personalized experience. And the other thing that's really exciting about the brand relationships is that, it keep coming back for more. 70% -- 76% of our advertising revenue came from existing brands, and 24% came from new brands. So really a great result for the quarter. And not only do we have a great result and a record quarter financially, but also we released a whole new way of experience, which was a huge 6-month project. So you got a tinybeans.com, it folded in the old Red Tricycle brand under a new experience and really paved a way for a lot of the newer things we're looking to launch over 2022. So a really exciting year ahead. And then the other thing I just want to highlight here is that our paid subscription product also had tremendous growth. We got the 46,000 paying subscribers. So that was up from roughly 25,000 quarter prior. And again, I'll dig into more of that very shortly. In terms of advertising revenue, just to begin there, it's just been a phenomenal quarter, really about understanding what the brands are doing, understanding how we're going to add value and really driving growth. You can see 64% year-on-year out. I just want to say for the record that quarter, which is the Q4 calendar quarter, is the biggest quarter of the year, because clearly, that's the quarter where a lot of brands doubled down and there's lots of big dates for Halloween, obviously, shopping and Thanksgiving all the rest of it in the U.S. So it is the biggest quarter of the year, but the fact that we grew so much in the 12-month period is really a testament to the team we had internally. And that -- and that business came from lots of great brands, large brands, Google, YouTube, Lego, Paramount Pictures and also other brands like local brands. We have a wonderful local business that really drives local engagement, that leverages a lot of the local content we create across the U.S. that also complemented the revenue stream as well. So the business continues to grow really nicely. Brands continue to see value. And it's not just about advertising for sake of advertising. I don't think I speak enough about this. We offer real solutions and real value to parents. I mean, take CooperVision, for example, they're trying to prevent myopia in their teens and they know that the targets that they want to get to are on our platform. So it's not just about slapping an ad, and then hoping someone sees it. It's really about interacting with those ads and parenting value. And these brands are getting the value, otherwise, it wouldn't be coming back for more. And I think that's we share the testament of the platform and that engagement that we're delivering to those brands. In terms of the ad platform, it's really important just to highlight the fact, the ad platform and what we offer is not just about the website and not driven just by traffic to the website. Speaking to investors in the past, there seems to be sort of understanding that the web is a key channel and frankly, the only channel for advertising, it's not. It's just 1 of many. And this really illustrates the expanded offering we have for brands in how we can tailor and cooperate content that serves our parent as well. So it's all about serving consumers and parents and helping raise amazing kids in order to help them do that. There's opportunities to engage with wonderful products and wonderful content. And there's a whole range of areas that we incorporate those messages. Whether it's basically the app, whether it's the web, whether it's e-mail is a great platform and many other channels as well. Social has been a fairly new channel for us in terms of monetizing, advertising. We see that as a significant growth opportunity in the future as well. So stay tuned for more about that into the future. But social for us is definitely a growth opportunity. I just want to summarize here that the advertising experience is much greater than just the web. And it's not just about the ad experience itself in terms of the placements, there's a lot of capability we offer brands around personalization, around that targeting piece which again, is very difficult to find. So not only do you find here the trust we have with those parents, but also the ability to target them quite effectively, and that's our brands are coming back for more and more. So I just wanted to make the point that it's much more than just the website alone. Here is a wonderful case study. So those of you who didn't know the -- and when we launched tinybeans.com at the new site in October, we also had our launch sponsor of YouTube Kids. And again, it was a wonderful, wonderful partnership. It's something we worked extensively with them to plan, figure out, how it work with obviously the platform, what their goals are in terms of what they're trying to do, and you can see some of those objectives here. And then also how it basically aligns to our launch and how our parents are going to see value from it beyond just what we're offering them in terms of content and all those other things. So the campaign was tremendously successful, but lots of engagement across a variety of different elements. And the benchmarks are very high in terms of engagement, whether it's clicks, whether it's opens, whether it's starting free trials, et cetera, basically some wonderful results and YouTube, it's thrilled. You can see some of the results here in terms of their quotes. And I just want to say, often I get asked about what's the ROI and why the brands come to you? Every brand has a different measure of success. So it's just important to understand what those managers are and then we drive to them. And again, that's the key goal. Every brand and every campaign is different when we tied it to them, and that's why I think brands see that value and keep coming back for more. So a wonderful partnership shows you that global businesses like YouTube and many other big brands I've shown before, fact that they're betting on Tinybeans and see much, much more value and they're coming back for more into the future. So a really exciting partnership there with YouTube and a testament to the team we have in place to really deliver. Just moving also -- offer advertising to subscriptions. So the last 3 months, the last 6 months have been really big change also for subscriptions. We announced this to the market about 6 months ago, where we would launch the product to be paid for products and moving the traditional free experience to a paid-for product where we had a payroll and kicked off in October, and the results are really, really positive to get to doubling the monthly recurring revenues to 148,000, is really a wonderful success metric. We were -- for many, many years, that number didn't grow much at all and paid subscribers to 46,000. Now most of that is definitely moving the free audience to paid audience. We definitely had some of that audience leave and churn, and we fully expected that. One point I just want to make is that, this decision was done very intentionally to build a very large subscription business. And when I say large, it's in the hundreds of thousands of millions of paying subscribers is my goal in years to come, and we want to build something and quite something circa probably for parents that they're willing to pay for it. And we didn't want to have this legacy experience of, oh, there's cohort over here that is always free and they didn't convert and always having to deal with it. So I know it's a difficult decision. But I think it was the right decision for the longer term. And I know we had customers that were very upset by that decision, but we felt it's the right decision for the long term of the business. And we've been working through it over the last 3 months, investing in our customer service, investing all sorts of things. We're definitely improving all that area to drive, obviously, engagement with those customers. Another wonderful metric is trial to pay conversion is 92%, which is incredible. It just shows basically the people that were using the product from free to paid is really, really high. And I just want to say also that 20% of that audience is new audience, meaning not the previous free to paid, the new users signing up for the platform that basically started a trial and moved to paid. So it's a really high number. Yes, as we scale with that number sustained we'll see, but it's a really high number to begin with. So overall, the subscription product is in great shape. There's a whole range of our tactics we're employing through this quarter and experimenting and doing a lot of research with our customers as well. Both paid media and validation, we're also looking to invest in SEO, which I'll talk about in a minute with the search engine optimization, which drives traffic from search to our site. But overall, really pleased with the subscription business, and we're just beginning this journey. So the fact that our strategy, again, and I'll talk about this later, continuing to grow the ad business and accelerate the consumer subscription business is well in hand and we're in the thick of it. Our audience. So through these changes over the last 3 months, we definitely have changes to our audience and we fully expected. So we merged the platform. So prior to this we have the tinybeans.com website and the redtri.com, the website, we merged them into a single brand experience. We saw a decline in monthly active users related to a couple of different elements. One was there was an overlap. We're doubling up of the users across the 2 sites. We definitely saw some impact to an organic search that came through the Google search algorithm changes, which we're addressing and then some reduction of active users moving from free-to-paid. So it definitely was in line with our expectations. And really, what's great about this is that, this is a customer base that is really seeing value of what we offer, seeing value in the services for parenting, they're able -- to obviously grow and monetize with advertising and clearly with consumer revenue and all the other things we want to do into the future. So -- but it's really not stopping there. We're not stopping to grow. We have grand ambitions to grow the audience, but at least the baseline of what that audience is assessed in terms of where we're looking to grow and really we expect that to evolve and change through the next 6 months and beyond as we look to stabilize the platform and really reset growth in terms of the audience, but also the lifetime value, which I'll talk about in a minute as well. One last point that I don't talk a lot about, but we have a wonderful partnership with Apple, where the exclusive parenting content provider inside Apple guide, so you go to open up Apple maps and type in, for example, New York or Seattle, any content related to parenting is served by us. And that's a wonderful partnership. We're a top 3 partner of 100 partners, which talks to the quality of the editorial that we have in the team. Look, on lifetime values, so this is an exciting time for us, an exciting metric to share. This is something that we started to talk about, about a month or 2 ago that now we're really spending a lot of time understanding internally and trying to share externally. And also customer acquisition costs. I know for many, many months, investors were asking us what the customer acquisition cost, what's the lifetime value, and this is something we're really proud to announce our early results today. So customers -- as far as acquisition costs or sometimes referred to as CAC, customer acquisition cost is about USD 50. And then our lifetime value is about $178. And what's exciting about that is that we're just really beginning. And that number is largely driven by subscriptions, of course, because of the retention and the revenue and then also advertising other revenue streams as well. And for us, it's about optimizing this, experimenting this and growing it. So we'll obviously do a lot of work around the acquisition cost to grow that and then also do work around growing lifetime value. And I'll talk about later on. We see lifetime value being substantial, huge opportunity, and we've done some research, which is incredibly insightful. I just wanted to share this, and I'll say it slowly. We have a very high percentage of proactive parents out of the U.S. And we have a low percentage of their lifetime value, meaning they're not spending much with us, but they are spending a lot with other platforms. The fact that basically these parents are on our platform really gives us incredible confidence that as we offer new services to them, that lifetime value will grow and now spend much more with us, and obviously engage with us and until more people like them about us. So it's a flywheel of growth that we're just getting going on, but we see lifetime value being substantial and all based on a lot of the services that we've already had in place and all the services we look to launch. So as we sort of, I guess, aligned to our strategic goals and imperatives where these 3 pillars that I talked about when we kicked off the financial year, growing lifetime value, enhancing and scaling the platform and really elevating the brand to the single brand for parents and brands. And we're in it, we're in a think of it. We're executing. We're delivering against all those strategies. A lot of the highlights I just shared have been summarized here on 1 slide, but talks about how we're looking to grow lifetime value, how we're looking to enable the platform for scale and really drive retention. And then also how do we elevate a single brand. Again, that was part of our strategy and also support our wonderful team. We have about 60-plus full time equivalents, as I said before, we've grown the customer support team, and we'll continue to grow the company as we see success and as we see returns of this investment. So with that, I'm going to hand over to my partner here, Chris, to talk about some of the financial highlights. Over to you, Chris.

Thanks so much, Eddie. So good evening and good morning to everybody on our earnings call, and thanks so much for joining. Here on Slide 13, I'd like to just take you through the P&L summary at a very high level. So I won't touch much on revenue other than just to state the fact as Eddie has kind of gone through on previous slides, we're really pleased with the quarterly results. Revenue up 59% versus the prior year. Again, to reiterate, this is all organic at this point. The inorganic implication of the Red Tricycle acquisition long in the rearview mirror. So this is all apples-to-apples versus prior year, driven equally by both ad sales and subscription growth. And it's a result that we're really, really happy with and a really strong quarter. As we get to below gross revenue. So gross margin is something that we manage carefully in the company. We did have gross margin decreased to 90%. It was 95% last year. This is very much in line with the expected growth of the company and the way that we manage the business for the long term with our long-range planning. There's really twofold reasons for this. The first being that on the ad sales team as we grow and get much larger ad sales campaigns in the door, there's a little bit of a cost to ensure that we fulfill and provide customized client solutions to these really important clients for us. The other aspect of it is that, as subscription revenue grows, as most of you all know, we'll be paying commissions to Apple and Google, and that's something that's going to be between 15% and 30%. So as subscription revenue grows organically and it becomes a more important part of our business, gross margins will settle down. But I think the long-term view for us is to manage it in the 80%, and we think that, that would be a really successful result, which means that subscription revenue has grown substantially. Operating expenses grew 40% versus last year. That's very much in line with where we expected it to be as well. We are investing in people and through that compensation to support the product and operational investments, including the launch of Beanstalk and the merger of the brands, and that includes software and services. The company does -- as we're in growth stage in growth mode at this point, we are incurring a new run rate of G&A costs. And that relates to both us just organically growing, growing up as a company. So that includes investments in upgrading the accounting and finance department, human resources, other things related to infrastructure. And then very specific things as we're in the early stages of [ uplisting ] to NASDAQ, and that's where you see things like increased audit fees, upgrading to a global top 5 auditor with Grant Thornton and other compliance costs come into play. Just as a note, as a reminder, to users of our financials and investors. A couple of quarters ago, we didn't start capitalizing software development costs. The 1 main project in there is related to the launch of the Beanstalk product. This quarter, as it launched in October, we had about $100,000 of cap software development costs. They totaled about $500,000 over the last 3 quarters between April and the end of October. That's amortized below adjusted EBITDA and it's amortized over an estimated product life of 5 years. Just to talk about the year-to-date really quick. So the first half of the year, super pleased with the year-to-date results. We had adjusted EBITDA of negative $200,000 to a margin of minus 4%. And it is knocking on the door of breakeven, and this is a really strong, very low loss negative margin. This is with our largest ad sales quarter of the year from a seasonality perspective being the second quarter. So we would just like to point out that in the second half of the year, as we invest in marketing, we really haven't spent any marketing dollars to this point to grow the subscription product. And as we incur some seasonality in the ad business with the next quarter being the lowest of the 4 quarters, and add revenue. We do expect margins to not be this strong over the next couple of quarters. And for the full year, we do expect margins to be roughly in line with our adjusted EBITDA margins from last year, which were negative 22%. I think that's a relatively new calculation for us. And so I want -- we did want to share that numbers to give you a benchmark of where we expect the year to be, and that's kind of how we're managing the business from an EBITDA perspective. So with that, on the next slide, just talk about cash for a second. A big event happening this quarter was our tranche 1 of our capital raise. We started the quarter with $1.5 million. Cash received $3.1 million, that's up 35% year-over-year. The operating cash in general is in line with the P&L activity of the business. It's up 35%, which is a little bit less than the revenue growth because the collections are lagged off of the revenue growth. And so we will see -- continue to see strong collections in this coming quarter as well as we collect on the strong ad revenue that we just generated. Operating cash burn of negative $440,000 is a great result for us. It's something that's in line with expectations. I think we had said negative $500,000 in our last earnings call were expected this quarter. The capital raise Tranche 1 came in. It was gross proceeds of $5.1 million less the transaction costs related to the cap raise. And then we repaid directors' loans for 2 of our 3 directors, our third Director, Eddie transferred his loan into stock. The operating cash burn for next quarter as we invest in marketing and as we have that seasonality in the ad business is expected to be about negative $1.2 million. That will be partially offset by USD 800,000 of the Tranche 2 proceeds of our capital raise, which we expect to receive next week. And then lastly, we do -- Eddie and I do get this question a lot about free cash flow and the anticipation of becoming breakeven in the business. I should kind of see from the year-to-date and the first couple of quarters of our P&L, we're capable of being cash flow breakeven and our expectations and our internal planning, we have demonstrated the capability to be cash flow breakeven in calendar '22, something that we always talk about as a business that is the need for investments and especially to grow the subscription product in the long term. And so we do anticipate continuing to make those investments that will drive future revenue growth. And we're always carefully weighing that with -- so we don't quite want to explicitly state that we're going to be free cash flow breakeven because if we see an opportunity to make an investment that we think will pay off for all of our investors in the long run, we want to maintain the flexibility to do that. But overall, we're in a very comfortable place from a cash perspective with an ending balance of over $5 million and enough cash to operate well into the foreseeable future. So Eddie, with that, I'll turn it back over to you.

Great. Thanks so much, Chris. So we thought we'd also share a little bit about the strategy and to remind everyone what our strategy is and also to dig in a little bit in some of the more relevant areas. So in terms of the market, the addressable market, this is something we start to talk about on a few months ago, and we thought we'd just continue to sort of share with everyone the significance of the market opportunity. The addressable market here is really boils down to the spending that parents do every day on their children. And there's a pretty easy math there that there's obviously a set amount of babies born every year in the U.S. This is largely the U.S. market, of course. How much is spent on raising a child? And then how much of that is annual. So it's enormous. And yes, it's big. And yes, there's huge opportunities and that the opportunity for us and the challenge for us is, how we're going to get access to it. But what's wonderful about just acknowledging this is that -- we already have a significant amount of parents that are really spending this. They're just not spending it with us. And that's exactly what our goal is and our intention is to continue to broaden the value -- drive value, create utility, the parents will begin to transact and use with us. And that's the opportunity we see up there. So definitely, you'll continue to see this addressable market very specifically in parenting, very specifically in the space that's really important. And I just want to say for the record, which is something that I'll open here through conversation is that, what Tinybeans you're an app. We're not an app only. We're in a media business, we're on the media business. We're a parenting business. We serve parents and family members, and I'm going to talk a little bit about how we serve them in a minute. In terms of the lifetime value, I talked a little bit earlier about what $178 today made up of subscription and advertising. And I wanted to sort of share with all of you this aspirational goal, but really what I just showed earlier, this really, I guess, straightforward potential because they're really spending it. And I think there's a huge opportunity to be able to spend with us. And we think that your parents will be doing much more with us, whether it's doubling down more in subscriptions, will relay in e-commerce, other services, advertising. So there's sort of an aspirational goal of 2025 getting to $1,000 per customer, which is still tiny compared to what they spend already. It's not a lot of services you need to launch, a lot of product you need to launch for parents to be able to do this. If you divide the math of how many customers we have already and what they're spending, even if you just engage on existing customers, these numbers get very big already. I mean, 25% growth just on this would be enormous. And because we have such a good acquisition cost to lifetime value at 3.6 already, we can spend more money on acquisition because we're seeing the lifetime value grow. And again, we've got this target of 28 million active parents reporting the value prop and again, driving this whole split between advertising and subscription/consumer. So it's a really important point to note, and this is something I'll be continually reporting in the market around lifetime value, optimizing that and some of the products we're launching clearly drive the opportunity for them to spend it on our platform. One thing I just want to spend a bit of time on is around who is our customer. So historically, the customer has been largely family members and really the children. And when I say children, parents engage because of their children, right? And we help them to arrange different things in parenting. And again, relates to their children. What we're doing is broadening that to not only serve grandparents and family members and their children, of course, but also the parents. The parents also can be served and the parents are also have needs and opportunities. So it's not just about just the family members and just about consumers as it relate to parents, but also more than that. Let me explain that a bit more detail. So here's a very, I guess, simple table. And what it's there to show is that basically we have 3, I guess, stakeholders at a headline of what -- who the customer is. Extended families, the grandparents, children and parents. And if you look at the top, these are some of the services we're offering them. So today, in the narrow area, we offer them ability to share memories, organized memories and we offer parenting content. And in actual fact, most of the value around the memory space for sharing is the family. The children get some benefit because family knows them. There's lots of value around that, lots of engagement and love that we create every day because of it. The organizing memories is really everyone wins from that because you can easily search, access, all sorts of wonderful features the app provides, creating albums, they really offer value to everyone. The parenting content, obviously, through the acquisition made a few years ago, also serves everyone, but really the children of the winners, right, because parents are in there and trying to figure out all sorts of -- whether it's things to do, whether it's our tactics, whether it's taking action adjusting behaviors, finding product, the children are the ones that are benefiting. And clearly, the indirect value is the parent because we get enormous satisfaction and we're very proud of our kids, but it's really the children. But as we move forward and expand, again, we're not moving away, we're expanding -- there's all sorts of value, I think we can offer them through a lot more content that's more personal based, all sorts of things we're testing and validating for at the moment. Community, our parents connect with parents, all sorts of different ways, again, with its location base, with a wonderful local business, location is very impactful and a huge opportunity and also stage-based. And then brought in that to e-commerce and the marketplace in the future. So it's an exciting time to broaden this value prop, and it's really important to point out who the customer is and where customer obsessed, we need to get better every day. I'm always working and always talking to them about how do we get more customers every time. And the value here is tremendous. And here is, I guess, a mini road map, if you will, of how we see that lifetime value really growing and scaling out. And we have the audience. We're going to get a bigger audience, but we have an audience that really I think is right to be able to do much more with them. Here's a slide that we've shown previously, and I want to keep on showing this around how we're strategically going after multiple revenue streams. So today, with largely 85% advertising, 50% consumer, and I've talked really already in the last 6 months, and today and moving forward about our strategic imperative together to 50-50 in the next 3 years. And it's -- for us, it's about making deliberate steps that sometimes are difficult decisions to really build out a very large consumer business and really scale this business. And that's really the whole goal. So everything internally is about how we intentionally design the experience to grow the consumer value and drive your benefit that's not only driven -- driving the consumer revenue, but also the ad revenue. And yes, there's sometimes there's conflict, that's healthy conflict. We need to always -- it's always trumped by the customer value, and there's all sorts of ways in which we can drive value that both enable the advertising revenue to grow and also the consumer revenue stream to grow. So as I wrap up and conclude the presentation, it's really a phenomenal time for the company. We've got a single brand and a platform, and the brand is not only a single brand on our own sites, but also on social. We just also taken some time to get there. And again, we're looking to double down on that into the future. We have a great team that has a wonderful experience. We're investing in and continue to obviously grow and recruit. We're always out there looking for wonderful new people to continue the journey, but we've got a wonderful team and very proud of. We've got a great customer base. A great brand that these customers rely on -- parents of all the kids, young parents. They love the privacy and the personalization aspect. And I just touched on, we have a multiple revenue stream strategy. And again, we're early on in that strategy, but we're making very intentional decisions to build a much bigger business to grow to the thousands of dollars of lifetime value into the future. So with that, I'm going to jump into some questions. So I've been sent some questions already. So I'm going to start those. If you do have questions, please feel free to put them in there, and then we'll be able to work through them. And yes, we'll take it from there. So I'm just going to start with some of the questions that were sent in and then we'll take it from here. Hope we have some time, so okay. Let's jump in.

So it seems Tinybeans could maximize network effects by making it easier for families and friends. Other plans to highlight the ability to add families and friends, but possibly allowed to invite send by text or because -- and sometimes I don't know the e-mail address. Speaking for myself, this is from the person saying this question and I don't know that emails of my family members, and I'd love to add them to my account, it's an extra bit of friction to ask him for the e-mail addresses. It's a great question. It's something we've explored in the past. We've identified several opportunities for increasing network effects, including enhancements and how users invite friends and families to follow on Tinybeans. We want to make the process sharing memories easier than any other platform and that starts providing users more ways to bring users on the platform. We're currently exploring at the moment the ability to invite by text, unique invite links and even QR codes -- they're back. So we're just exploring a few different options here as they choose some updates to the product there. Next question. Could you outline the customer acquisition strategy in more detail, recognizing the higher lifetime value and high trial to pay conversion metrics you've noted? Which ad platforms do you intend to advertise on, what CAC are you targeting, if you're able to share? So as I shared today, which is great. So we've got a very high LTV, and we've just begun a potential to even grow it from there. Also, like I shared, we've embarked from various platforms to begin trialing acquisition channels, this includes increasing visibility with these proactive parents who are actively searching for these types of solutions, as well as unique campaigns and programs that break through the cloud and grow awareness with these impassive parents that are struggling and really aren't yet aware of certain solutions. We'll start with paid search. On Google and Apple, paid social and then basically explore other channels to continue evaluate programs where these obviously parents reside. We'll simultaneously optimize these conversion rates. We'll look to optimize customer acquisition cost as well. With increased investment in the channels where you will achieve this target of CAC, which obviously they have 50 today, but who knows where it's going to end up. We'll do a lot of testing and we're going to strive to obviously drive that low. But for us, it's about continuing to work on the conversion of CAC and LTV and optimizing that return on investment. So with the 3.5 million month active users today, we have a tremendous final already that we can drive a lot of features, a lot of evaluations on. And 1 thing I just want to point out is that, we are looking to launch imminently the first feature of the subscription product that's going to be content-based. It's a product called for you, where you're able to get tailored content in your experience based on the agent stage of you and location, and that's actually launching this quarter. So that will be the first content-related feature beyond memories. And again, I think it's a feature we'll continue to invest in to be able to attract the passive users that hit the website that I'm using the memory speeches, who may be interested in the content features of the subscriptions. Next question. Are you able to speak more to why the most recent equity raise happened when it did? The share price has been a bit depressed and similar the company has sufficient cash to fund operations. I'm sure there were other factors led to the decision, if you don't mind, some color, that would be very helpful. So with the company rapidly growing in several exciting and attractive broker initiatives about to the business, the Board decided it was imparted to raise capital in November to enable the management team to execute our long-term strategy. The opportunities are clear that with our recently record results, which obviously I'll talk about today, that the cash will really be needed to continue to drive that strategy. The cash balance at the time would not have enabled this growth and experience nor would it be enough through 2022, given some of the things we shared today. Next question. With a huge TAM, how is Tinybeans going to scale the business and the revenue? As we've shared in today's presentation, there's enormous potential across not only growing the audience of parents, but also growing the lifetime value that the company generates in these audiences. The launch of our paid subscription product, Beanstalk was the first phase of this strategy. And so through 2022 we plan on further investing in growing the value proposition. More recently to include for you, which I just talked about, which is this whole personalization around age and more importantly, location for families. In parallel, we plan on to value a whole bunch of new parts of revenue growth, including e-commerce in the future. And really, we see significant growth potential to offering these parent smarter recommendations to drive content to commerce opportunities more to come through this calendar year. Next question. These are some great questions, and thanks for sending them through earlier. Are you riding any data science and prediction models on the available data to understand target customers? In short, yes, but it's fairly early days for us. Our data science capabilities are focused in 2 areas: classification of our content to extract interest that the engine can then understand the content to then serve that and recommend that to our consumers based on a whole range of different parameters, location, interest, age, et cetera. And then again, we're going to use that in the few experience as well. And the other 1 is a greater understanding of how these parents actually engage like what's the content that they're consuming, and that's also driving into this recommendation engine we're building. So today it's largely around content, understanding the profiles of customers. But then we see the content evolving to not only content that we have today, but also content, e-commerce products and other types of content we're looking to launch. Next question. Now the capital raise is completed, what are the detailed marketing plans to dramatically raise a number of users to the target of $70 million? So for those of you that don't know -- a few presentations ago we shared that there was a -- there's about 72 million millennial parents in the U.S. And basically, that was a potential target of ours. So that's where I think this reference as strong just for the context. So turning to the answer I just provided around the market opportunity, there's a whole range of initiatives that we are driving for. Firstly, we're all about the range of projects to grow organically. Search engine optimization, app store optimization are 2 projects that are underway. Paid media is also in the works through a whole bunch of experimentation, I just touched on earlier. And in recent weeks, we started a range of research projects with our customers to seek and refine the messaging and the value proposition, which will help us to drive that scale. Another area, a future opportunity, which I touched on at the start of the presentation is all around social. As for today, we have a content reach of about 28 million parents, proactive parents across the whole range of social platforms. That's a huge opportunity of growth, but yet we've really largely untapped for further growth and engagement. We see a whole strategy forming in a whole range of ways in which we're going to use that audience and then go after more engagement and in turn, more customers, paid customers and obviously, lifetime value as well. And then the lifetime value isn't only on the consumer side, but it's also on the advertising side. Next question. How do you think you're getting subscriptions to pay for your service model? Where do you expect to be in terms of number of subscribers in 12 months? So since launching Beanstalk, the paid subscription service, most new paying customers have come from existing free users, with the memory speeds of the app. About 20%, as I said, you touched on this before as well of new paid subscribers. However, the new registered users were previously used the product really the lion's share of those subscribers. Given all that is organic, we're really pleased with the results. As previously mentioned, we're exploring a whole range of initiatives, paid media channels, [ arranged ] meetings, channels I talked about earlier. And what's exciting is that we have now a metric to optimize, which is the lifetime value in CAC, which is 3.6%. As far as where we believe we'll be in 12 months, I guess it's a $64,000 question. I don't know what will end up and clearly I'm not here unable to provide the forecast, but we're optimistic. I think we have a great position. I think we've got a great product that clearly parents are seeing value from. I certainly think that as we launch these newer features around content, personalization, local content and then driving that the cost value also driving advertising revenue, there's all sorts of ways in which we can grow. But again, it's all about growing both methodically into the future. So I'm hopeful of having millions of subscribers in the future, when they come on, how quickly is really up in the year, but we're very focused on it. And we're very focused on it in terms of all the reasons I've talked about earlier. And the results are showing that early signs are very positive. So it's certainly an exciting time, and I'm hoping and I'm confident we'll share all sorts of upgrade outcomes and great results as we grow the subscription business into the future. All right. So with that, I think that's a wrap from us. I just wanted to say thank you so much for joining us today. It's really been our pleasure to share these results with you. It's just an incredible time for the company, incredible time for the business. We have this huge addressable market that I talked about in terms of the TAM. We have this high lifetime value and really a wonderful team internally that are really committed to build something truly special into the future. I really believe with this inflection point of growth. There's a range of things we've launched, a range of things we're optimizing for and learning about, and we're just around the corn out looking to really accelerate things in all sorts of different ways. So thank you so much for supporting and thanks so much for your interest. Please reach out if you have any other questions, comments and opportunities, but really excited at the moment. So look forward to updating you into the future and updating our parents. And obviously, the market as we look to create something truly compelling and a platform to raise amazing kids. So with that, thanks so much. Have a wonderful evening in the U.S. and a great day in Australia.