Tinybuild (LSE:TBLD) — Interim results for the six months ended 30 June 2021

0:01 Good morning, ladies and gentlemen, and welcome to the TINYBUILD INTERM RESULTS INVESTOR PRESENTATION. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Please just simply type in your question and press send. The company may not be in a position to answer every question it receives during this meeting. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard, and we will send you an

0:32 email when they're ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, we'd like to submit the following poll. And if you would give that your kind attention, we would be most grateful. And I'd now like to hand over to Alex Nikoporkic, CEO from TINYBUILD. Good morning, sir. Good morning, Mark, and thanks everyone for tuning in to our first interim results of 2021. So today, we're going to take a look at a few things. I think it's going to be important to set some context of who we are, how we got here. Then we'll talk about the operational review for the first half of year. Then Tony will join Tony will dive into the finances, and then we will take a look at the operational outlook for the rest of the year.

1:20 I'm joined today by Jazz, our head of investor relations, and Antonio, our chief financial officer. And let's just go ahead and start. These are our disclaimers, which I'm sure everyone has read. Then here's our agenda as well. And I think just to kick start things this morning, let's go ahead and do a short introduction introductionary show real video. So can we please play that?

4:04 Now this gives you some idea of some of the games we have released and that we're working on. As you can see, we have a very wide range of games in the portfolio, and that is going to be important to the story. And talking of stories, I'm just going to spend a little bit of time on sharing the brief history of TINYBUILD. So we've been around for almost a decade now. And oh, my coffee just arrived. Can you please place it here? Thank you so much. So the company started when in 2011, I was working in The Netherlands on what are called web games, you know, short flash games that maybe some of your kids have played at that time. And I noticed the trend that a lot of web game developers were going towards the more, you know, premium front where you could sell a game on a digital platform, be that PC or console, and make, you know, a proper studio out of that.

5:03 So that is exactly what happened. I found this small web game made by Tom Brian, our cofounder, And he had made it in a weekend. It was called No Time to Explain. It was supposed to be a one off joke that a lot of people on the Internet really liked, including myself. So I reached out and said, hey. Let's make this game into a full steam game. Let's make a Kickstarter and, you know, make a company. And after some contemplation, we have started the business. We did the Kickstarter where our biggest backer was Marcus Person, also known as Notch or the creator of Minecraft. So in a way, we're here because of Minecraft, and that game is really close to my heart. So then we spent two years on developing No Time to Explain into a full game. It was a roller coaster, right, of emotions, and eventually, we were facing a lot of technical challenges, a lot of budget challenges, and we released the game. The game became an overnight commercial success, which was kind of the dream at the time if you you think about it because we were really interested in making something that would allow us to continue making games because that's the whole point is, you know, we love video games, and we want to continue making them. However, we have had overnight control success justified, you know, quitting our jobs and diving into game number two, which is what everyone did because you have your first success and then you dive into game number two.

6:31 Instead, we decided to help other developers with what we just went through. Right? Because the challenges of getting your game noticed, the challenges of making production right, the budgetary challenges because there wasn't enough game funding a decade ago. So instead, we partnered up with another development team and released their game as a publisher and co developers. So then we partnered up with more people. And it just so happened that, as you can hear by by my accent, I speak Russian as well. And the core team, the founder's team, has spent a bunch of time in Eastern Europe in general. One of our cofounders, Luke, here used to run a video games conference in Eastern Europe. So we had an understanding of how business is there, and we had just launched essentially two web games into full commercial games.

7:24 And from there, we started partnering up with a lot of developers from Eastern Europe, became one of the top recognizable brand and brands towards developers in the region and started expanding. Now our business model was quite simple. It's referred to as I'm gonna use air quotes. I hate it, but I still need to indie publishing or third party publishing. Right? It's more of a transactional relationship where we come in with budgets, with marketing, with your help in QA localization, etcetera, and help bring the game over the line. However,

7:59 excuse me, it's more of a transactional relationship if you think about. And what happened was we have seen situations where we had a hit on our hands, and there was an opportunity to create a franchise out of that hit. However, it didn't really go anywhere mostly because of kind of misalignment between a publisher and developer relationship. Because if you want to continue growing something, well, if there is commercial success on your hands, a lot of the sign crazy people will maybe decide to go and do something else. And that's totally fine. It's just that for me, the value of franchises is really, really important. And from what I can from, you know, about 2016 or so, we decided to shift our focus into intellectual property, so investing into IP.

8:50 And, essentially, we moved from a third party relationship to a second party relationship where we would own the IP and not necessarily the studio. And then the logical step from there is to move to first party when studio and intellectual property are internal. Now this comes with better margins, obviously, as will be seen in this presentation, and it also gives us the opportunity to create bigger projects when we see that there is traction, when we see that there is hype going on. So with that in mind, Jazz, Tony, unless I missed something here because this is literally my first coffee that just landed, We will move on to the actual h one presentation. Are we good? I was just hoping for a pause so that I could drink some coffee, and people will say a couple words. Oh, good. Oh, good.

9:39 Alright. So then if we look at the beginning of this year let me just see. Hoping I don't break anything. So the highlights. We have achieved 18,600,000 in revenues, and that has an 18% adjusted EBITDA growth within those revenues. Right now, we have the biggest pipeline we have ever had with 29 games, and 10 of those were signed year to date. We went public in March. That's why we're talking here, and we have raised 50,000,000 in gross proceeds from the IPO. Right now, we have 78% of our revenue coming from own IP. And in the first half of year, we have closed three acquihires with a total of five year to date.

10:31 Now why is IP important? Well, because when we have control over the intellectual property, we can decide what we do with it. And that has a lot of benefits, including making spin offs or sequels or even now that we have a lot of development capacity, having multiple studios work on the same IP. Because if the IP is, you know, gaining traction, then we can quickly turn it into a franchise. We'll talk about that, and here is our latest distribution on our IP portfolio. And just a side note here that the first game that followed this IP ownership model was Hello Neighbor. And as you can see, it was a runaway hit for us in 2017.

11:19 From there, we have learned a lot. We have invested into spin offs and into many more titles, and we have diversified our revenues significantly since then.

11:32 Now the quality of our back catalog is really something I am proud of because there is a lot of work that goes into that. So when we talk back catalog, let's say if we were in January right now and we had released a game in December just a month ago, it would still be considered back catalog because it's calendar year last calendar year. Right? So when we talk about back catalog, we talk about games that we have launched over the last decade. And there is a lot of work being done on those titles from continuous updates to downloadable content to social media engagement to more spin offs to, you know, things like doing level editor competitions. So sound for our games have the ability to create more content. And within those level editors, we will highlight specific levels created by the community, and then that creates a viral effect of content created by the communities that we showcase, thus reengaging the games. We also work a lot with platforms for promotions, discounts, features, etcetera.

12:31 And this really underpins the solid base that the business has because for me, that was the main goal from day one is how do we build something that is long lasting. Now a couple of words about our focused m and a strategy. In the first half of the year, we have acquihired three studios. Now what is an acquihired? It's kind of similar to an acquired studio or a traditional m and a. It's just that we take all of the assets and then all of the people, and we put them into a new entity, thus alleviating any kind of risk that might come with the old entity. It's just the way that we have started to do things and it works for us. Now in the beginning of the year, we have acquired the team We Are Five Games. These are the developers of Totally Reliable Delivery Service, which was a runway hit last year, and they're now in active preproduction under Next Style in the franchise called Totally Reliable Adventure Party.

13:30 I can't wait to talk about we will talk about that at the later stage during the game's development. Hungry Couch Games is a studio of 11 people that started out with just one solo developer two years ago. And this studio has just released Black Skylands into early access, and they're spending a lot of time on iterating on that game. And Doc Home is the solo studio developer of Streets of Rogue. This is the highest rated game in our portfolio, and we are actively working on a sequel. So the overarching thread here between these three and pretty much everything we have done is that it's all strategically cohesive. All of these studios fit into the grand master plan of building a company with sustainable franchises. And an example of Doc Home, the goal here is to help grow the studio much like Hungry Couch did so that we can meet and exceed expectations of fans when it comes to the sequel that is in early stages of production right now.

14:34 And with that, I will hand it over to Tony who is joining us from Florida at a at an early hour. So, Tony, let's talk about finances. Yeah. Thanks, Alex. So to start with our financial highlight, we'll look at our net game revenues. Regarding our net game revenues for h one twenty twenty one, we're able to achieve 18,400,000 in net game revenues. But the main highlight when it comes to to this graph is really really the increase in in gross margin since it shows our transition from third party to first and second. And what the what this means regarding our adjusted EBITDA, which is our second financial highlight is an increase in our in our adjusted EBITDA margins. For h one twenty twenty one, we're able to achieve 7,900,000 in adjusted EBITDA.

15:24 Finally, regarding our adjusted operating cash flow, as we can see, it did below a 100%. This is largely due to timing differences in our accounts payable and our accounts receivable. Regarding our accounts receivable, this is money that is coming from blue chip companies such as Microsoft, Nintendo, so there's virtually no risk in collecting that that revenue. For next slide, we'll go through our p and l. Regarding our p and l, as anticipated due to a heavier h two game release schedule, We achieved small growth when compared to last year. But the main highlight, I think, when it comes to sort of our p and l is really that adjusted EBITDA growth. Since, again, it shows our transition from our third party to first and second.

16:11 For next slide, we'll go through our cash flow. As mentioned in our cash flow, the main differences for compared to last year is really that accounts receivable and accounts payable, and that's due to timing. Finally, we'll go through our balance sheet. Regarding our balance sheet, the two main things to highlight here is our cash and cash equivalents. So we could see that there's been an increase. This includes the proceeds from going public and our intangible assets, and then increasing our intangible assets, which demonstrates our reinvestment into the company. And with that, I'll pass it back to Alex. Thank you so much, Tony. Now we've been making a lot of progress since h one ended.

16:58 So I'll just do a few highlights here, and we'll dive deeper into every single one of them. We have just closed last week the acquihire of Bad Pixel, the developers of Deadside, and there is a really interesting story that I'll share there. We have the largest pipeline of our part upcoming portfolio with 29 games in active development right now, and that includes 10 new titles that we have signed year to date. We have launched four games in the first half of year, and we have announced we have just recently announced three new titles. Now we're continuing to increase staff in our key positions. And since the beginning of the year, just in the studios that we have acquired, we have hired over 30 people.

17:47 So we are, you know, helping these entities grow and achieve goals that, you know, together we we can achieve and that would be difficult to achieve separately. And we have also recently secured a $25,000,000 credit facility facility to accelerate our growth and m and a. Now let's talk about the tiles that we have released. We have launched four new tiles in the beginning of the year, and it's important to understand what we mean by early access here. Right? Because you're going to see a lot of early access or EA on this slide. Now Cartel Tycoon, Hello Engineer, and Black Skylands are all from our first party studio, so they are part of TinyBuild.

18:33 And they have launched into early access because they're still in active development. This is what we do a lot. We will let players engage with our games. We will monitor certain KPIs within those games to see how, well, how engaged the players are. And we will do that oh, I think we lost the presentation here for a second. That wasn't me. I promise. Thanks, Mark. So we have spent a lot of time on experimenting with these games and letting players play them early on. And that is a lot of how we do marketing by letting the products market themselves. So now we are in active development on these games when players can actually buy them. Right? And what that means is that during early access, typically, a game launches on one platform only. Right? It's an active development because it's unclear on what the final scope of the game game design is going to be, and you're getting very, very objective feedback on early access on know, that's that's why you buy in. One note here is that Hello Engineer is a Hello Neighbor spin off focused on user generated content, and it's in early access on Stadia. The other two are out on Steam. And you can expect the games, when they come to full one point o release, to maybe release on more platforms or have much more features when they do.

19:53 Now close to launch, we have and, again, let's define this term. We call it near launch. One of the reasons why we don't give out launch dates really early on is because of what I just said. We like to iterate a lot. We like to get objective feedback and have our KPIs in place before we announce the launch date. So tomorrow, we are launching Potion Craft into early access on Steam, and we have announced that launch date just three weeks ago. So we like to keep it very concentrated and also for marketing reasons. Then in middle of October, we're launching Despas game also into early access. And then we have three one point o releases in the near future, including Happy's Humble Burger Farm, which is a game about working on a fast food restaurant, but it's also a horror game.

20:40 Then we have Trash Sailors, which is all about sailing out on a raft and collecting trash in an adventurous, really unique looking game. And on dungeon, which is a Kickstarter favorite that is also launching on more than one platform. So we have a very diverse portfolio coming up, and it is second half weighted. What's important here is that we are typically second half weighted. And during IPO back in the beginning of the year, we have set out to launch roughly twice as many games this year as compared to last year. And last year, we launched five titles, so we are, you know, on schedule there. Now we have recently announced three new titles.

21:27 One of them is TINYKEN, which is if anyone played Pikmin by Nintendo, that is exactly what this game is in terms of look and feel, but then the story, everything is quite unique. There's a team of France working on it, and we're really excited about this game coming to all platforms at once, which we have just announced. Then book walker is a game about diving into books and stealing artifacts from those books. You're essentially

21:55 a thief. Now this is the second game with a studio. The first one launched in 2015 and was our highest rated game of the year. That game was called the final station. And finally, Spider Hack is a game about spiders fighting with lightsabers. It also comes from my home country of Latvia, which is really interesting to see game development develop in that region.

22:22 Now let's talk about the Hello Neighbor franchise. We have launched the original back in 2016, then kept on bringing it to more platforms and essentially build the framework for how to build a franchise. This game is a really unique case because at least for us, because when it took off, when we saw that it was becoming a hit since we owned the intellectual property, at that time we co owned, it was Dynamic Pixels. We kinda it kinda felt like we have this train that is going on tracks and it's accelerating, and then we have to build the tracks. Well, now we have built the tracks and we can put more trains on it. So what happened there was we launched the original, and that's the original team had a lot of ideas of what to do. And first and foremost, they wanted to finish the story that, you know, we we didn't fully explore in the first one. So the original team set out to make a prequel for the game,

23:25 which was launched a year later. At the same time, a team that we had co had co developed one of our titles, party hard two, was the team was called Hologroof. We ended up acquiring them. Spoilers. So that team pitched us an idea of a game that would be social multiplayer horror slash thriller, And that ended up being secret neighbor. Because within the pitch, the guys envisioned that the core gameplay will

23:56 be about kind of when you play board games like werewolf or mafia, you know, that anxiety feeling of trying to pretend like you're not the spy or you're not the traitor. And that was a core idea, and it ended up releasing in 2019 on PC and Xbox becoming its own hit powered by the Hello Neighbor brand. Speaking of Secret Neighbor, just, you know, talking about back catalog. Secret Neighbor launched in 2019. Right? And

24:26 in the first half of twenty twenty one, we have launched Secret Neighbor on PlayStation followed by iOS and most recently Switch, Nintendo Switch in August. So what does that mean? Does it mean that we haven't done anything on the game since 2019? No. The opposite. The game has had on PC and Xbox dozens and dozens of updates as we were preparing to make the game cross play between certain platforms so you can play with friends on other platforms and then launch it on more platforms. And in terms of marketing and exposure, the game

25:00 got over 2,800,000 downloads on iOS alone. And we didn't do traditional, you know, mobile games marketing. We didn't do, like, you know, advertising on social media that would then track conversion and things like that. Now we focused on working with our community with our influencers and seeing what they like. And because of that kind of direct communication, a lot of users really like us, and Apple featured us all over the place. So

25:30 we got that 2,800,000. Just a couple of words here. We have over 5,000,000 downloads on Hello Neighbor two alpha, which is in active development right now. And independent if the game launches this year or not, we're still very confident in meeting our targets. I just want to get that one out of the way. The original Hello Neighbor over already has over 70,000,000 downloads. The graphic novels and the books are still selling really well. The game has a lot of franchise expansion already, and

26:00 we are working on the animated series. I can't wait to share the news on who's involved in that, but the idea is we a couple of years ago, we have aired a pilot for the animated show. It was a test pilot as we call it. It had a basic idea of a story animation, and we want to see how will people react to it. Well, search for Hello Neighbor animated series pilot on YouTube and see how many views it has. Now going forward,

26:31 let's talk about the most recent m and a's. I mentioned the credit line, and we're going to put that to use. Animal is the team behind the game called Raw Men. And if you remember, I mentioned that we had acquired the team that worked on Secret Neighbor. Right? Well, the reason was that Secret Neighbor was a lot of its updates and your community interaction. It became a game as a service. Right? So we continue working on post release. And we realized that it doesn't really work in remember that the

27:03 developer publisher relationship I mentioned in the beginning of the presentation? We noticed it doesn't really work, game as a service, in that kind of relationship. So we brought the team in house and have tremendously accelerated our development. A similar thing has happened with Animal because their game, Ramen, is showing a lot of potential, and we realized that together we can build something bigger. So, therefore, they have joined us to release Ramen, and we'll talk about that game when it is near launch. And finally, let's talk about Batpixel, the developers of a game called Deathsight. If we could roll the video, here, that would be super helpful for context. Okay. Story time again. I think next time

28:51 we need to put, like, a fireplace here with some crackling, and then, you know, we'll just sit here and tell stories because I love telling stories. So that side, There are two aspects here. Right? One is how it fits into a portfolio, and the second one is how it happened. So the first one regarding our portfolio, you can see that this looks very different from what we have done before.

29:14 And the logic here is remember I mentioned Minecraft ten years ago. Right? So Minecraft came out in 2011 in November. And what happened is that that game has so much emergent gameplay that it created and expanded this whole new generation of gamers that have played similar games since. So by immersion gameplay, I mean that if all of us on the call right now go to a Minecraft server, workings have very different experiences depending on whom we meet, if it's a player versus player server, depending on where we spawn,

29:50 on what how the map is generated, etcetera. So unique situations where players create the content for themselves are what I define as emergent gameplay. And guess what? That was ten years ago. So today, this target audience, which I believe is one of the biggest in the world, is in their teens to early twenties. And they're not necessarily interested in more classic multiplayer games that are, you know, session based where you, you know, respawn and then there are certain rules, and then you need to follow

30:21 those rules, and there's a definition of winning the game. You know, like, you wander out. In games like Deathside, there is no definition of win. I define my own conditions for me to win or lose. It might be that I made friends with my neighbor who, just for context, is an open world, right, where you saw a lot of the chewing. But what happens is if you encounter a player and, you know, you kill them, you get to take their loot, which is still on their body. If you log in from

30:51 if you log off from the server, then your loot remains on your body and anyone can take it. So therefore, you need to secure your your loot by building a base. And as you run back from your base, imagine you have built next to a neighbor, it's your choice if you want to be friends with your neighbor or if you want to be foes. And both create really interesting situations that are very unique to your specific game session. So this game, I believe, fits that the emerging market crowd. And as we had seen with KPIs

31:24 of the game already being out in early access on just one platform in active development, that has a lot of potential. And last year, to answer how it happened, I had spent about one hundred hours playing the game on and off, and I was really excited when whenever updates would come out. Because games like this, they are live services games. They're games as a service.

31:45 You need to pump out a lot of updates to keep the community engaged to build that trust and build hype towards the one point o launch. And when I contacted the developers, which I knew from a couple of years ago, I started asking, like, hey. You know, how's it going? How are the updates, etcetera? I want the updates. And I realized that they were going through the same challenges as a few of our internal teams faced. They had a product that suddenly had a lot of community engagement around it, and

32:17 they were just seven people trying to get things done. Right? They didn't have time to think about the long term strategy about how to scale the team nor did they have any experience with it. However, they had a great product. So one thing led to another in the conversation, and now we are here. If we look at the deal, the deal consists of cash and stock upfront, and then it is heavily backloaded. That is about as much as I can say about the details of it.

32:48 The main thing to note here is that the game did come out in early access in 2020. It generated about 3,000,000 in USD in unaudited EBITDA for the company, and we're going to be investing into growing this team towards one point o launch. Therefore, it is going to be marginally accretive for us this year.

33:12 Now if we look a little bit further on our strategy check, when we went public, we set out to do a few things. Right? We set out to leverage our existing IP and tiles that we have in the back catalog. And just recently, we have announced that we are going to be releasing our annual Halloween DLC for Graveyard Keeper. It is called Better Save Soul. The previous one was called Game of Kron, and the one before that was called Breaking

33:42 Dead. So we're very clever with our naming here. We have also done a few acquisitions, and we are continuing to explore many opportunities, large and small. And I think one of the questions you'll have about our m and a strategy is, well, where and why? So I mentioned that it needs to be strategic. And so far, development studios have been, you know, very logically strategic for us. But then we're also looking at other opportunities, think in the realm of service providers and things that we can bring in house if we can increase its efficiency working with the teams.

34:20 We continue to expand our franchise model with both Totally Reliable and Hello Neighbor, with Hello Neighbor being the prime example and actively working on the sequel all the while continuing to support all of our existing products, And we are working on cross media launches. Now

34:39 we do have a few appendix slides here and there, but I think this would be a good time to turn to questions if there are any. That's great. Alex, Tony, Jess, thank you very much indeed for your presentation and updating investors. Ladies and gentlemen, could I please ask you to continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. But just wanted the company to take a few moments to review those questions submitted already. I'd like to remind you that recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your Investor Meet company dashboard.

35:09 I'd also like to remind you that your feedback is important to the company. And immediately after this presentation has ended, we'll redirect you for the opportunity to provide feedback in order the company can better understand your views and expectations. Alex, Jaz, Tony, obviously investors had the ability to pre submit questions and perhaps I could just start off the Q and A with that. And then I'll ask, if I may, to open up the Q and A tab and just if you would be so kind as to respond to any question that you see in there. The pretty submitted question reads as follows. Hi, Alex. Congratulations on the results and the recent ish IPO.

35:41 Could you please talk about the development of Hello Neighbor TV series? I watched your twenty minute video on YouTube. I loved it. Definitely see the potential for it and other brand development and extension opportunities. Can you give us any more information on other titles or areas you'd be looking to do this and any time scales on which you should be seeing this? And I know you did touch on that in the presentation, but just in case you've got any more color on that one.

36:04 Right. So what I can tell you is that working in linear mediums compared to interactive where, you know, I grew up professionally is very different. Right? The one thing that you need to consider is that making iterations can be a little bit labor intensive. Right? Because in video games, it's so interactive. Right? But in two d animation, it's difficult. So we decided to spend a lot more time as we went into the full season production on writing to make sure that the story

36:36 arc makes sense. And then at the same time, to make it so that you don't necessarily need to know the game to enjoy the TV show and vice versa. Right? But then when you have experience both, you're going to have a lot more context. Also, in terms of the story and the timeline there, we wanted to figure out a way to make it, you know, not necessarily overlap, but to add on to all of the other products. So that's why we're working on that really hard, and we have some experienced people doing that. That said, we have also experiment experimented a lot over the year with, you know, animation for storytelling and not necessarily for, you know, TV or linear formats, but for marketing. So we're definitely exploring that for our other tiles to see where it makes sense. I wish I could give some time scales, but, you

37:29 know, it's whenever I give a time scale, it usually doesn't work out. So when this near launch, we'll talk about. That's great. Thank you very much indeed, Alex. Jazz, perhaps I could just hand over to you if I may. And thank you to all those investors that have submitted questions this morning. And perhaps if I could ask you, Jazz, to read out the questions and obviously, where appropriate, let's give a response, that'd be great. Yes, sure. Next question on the size of the company. Can you speak about the number of staff studios and, in general, geographic place geographic presence? Yeah. So right now, we have over 170 people. And the way to think about is that just over 40 or so are on the publishing side. The rest are within the development studios.

38:17 And if we look at the amount of studios, right now, it's becoming a little bit more equal between Eastern between Europe and The US, where in The US, we have obviously made a few acqui hires. But then the bulk of the headcount is still in Eastern Europe, Russia, Belarus, Ukraine. We are pre distributed when when it comes to work. And what we have found, I guess, like, as a logical follow on question, what we would what we have found during the pandemic is that the only limitation that we really have is time zone. Right? So working remotely does work for us. And then from there, it's about having, you know, not not necessarily frequent, but as much as possible, FaceTime with the team whenever, you know, you go to a conference or something like that. So we're looking forward to things getting back to normal, but we have scaled tremendously during the last eighteen months.

39:17 And on marketing, can you tell us about your marketing strategy? How much of that is in house versus outsourced? Yes. So most of our marketing happens in house in terms of strategy and a lot of the execution. Depending on the specific titles, we will sometimes partner up with PR agencies to do some of the legwork, but most of it comes from within the company. And we work really hard on embedding marketing within production because I don't believe that those two things are separate. I believe they're one and the same because when people who produce the content understand what makes the content popular, you create a symbiotic relationship, and that is how we market a lot of our games. Next question is on m and a. You've closed the five deals since the beginning of the year. Do you intend to slow down or accelerate from here?

40:12 We have a great pipeline of m and a coming up. It it would be easy to assume what our intentions are considering the credit facility. So just as a reference, we had just over $60,000,000 in cash at the end of the half year, And we have just signed our first credit facility, which adds an additional $25,000,000 if we need. Next question on staff. Some of your competitors have seen staff attrition. What is the staff churn for you guys, and how do you see that evolving? We have low single digit staff churn, and that's considering that we have grown exponentially.

41:03 We see that there is a lot of competition in the market in, like, Western Europe or The US. But since we're a global company, we can hire from regions where there's a lot of technical capability, case in point, Eastern Europe. And then we help if those people develop their skills by putting them into an international organization that has a lot of opportunities for growth. So we're not seeing any challenges with attrition or getting new talent in. I think the biggest challenge that we face as an industry is making sure that, well, everyone knows how tall everyone else is because it's weird when you meet in person. Coming back quickly on m and a. Is there a cap you have set for any future m and a deal?

41:57 That's a great question. I mean, we're looking at such a wide range of opportunities that one of the reasons we went public was to be able to, you know, create aligned incentive. So if within our current size, the incentives make sense, we will explore that. But like I said, it needs to be strategically cohesive, first and foremost. Next one, quickly on that side. Is there any overlap with the Fortnite IP rights? And in general, how do you protect your own IP? There's no overlap whatsoever with Fortnite or any other game. We work with several companies in different regions that help us secure trademarks, and it's part of our due diligence process always to make sure that we're not infringing on anything.

42:51 Next question. In terms of managing and integrating the acquired companies, how you manage growth, weekly reporting, management capacity? Right. So we believe that when a company is acquired, acquired, there are certain things that made them work. Right? And usually, it's a lot to do with the culture that has been built in the company. And we want to maintain that culture as much as possible. So while we do build in some process when it comes to accounting contracts and general workflow, we keep we treat the studios as independent, right, because they are creatives. And we work based on milestone schedules.

43:39 This is very similar to how we work with external teams as well. It's just that with internal teams, we have aligned incentives. So those milestone schedules, they make a lot of sense, and we iterate upon them. But, yes, the the controls are mostly based on milestone schedules and all of the parts that comes to any kind of contracts, any kind of HR things. And we treat ourselves as a supporting function in those kind of structures and a leading function in terms of product development and marketing. Next question, sir, you're gonna find it difficult to answer. Which is your favorite game in the pipeline right now? Which one should I send which one of my kids should I send to college? Right?

44:27 Well, you know, it's it's a very difficult question, which is why we're always taking a portfolio approach, touching upon different target audiences. And by doing so, you know, so far, while we're here, it has worked out for us. So I can't really name a specific tile, you know, that I would be more excited about than another one. Next question on on technology. Are you concerned about the chip shortage, or that is maybe an opportunity versus more processing hungry AAA games? You know, the the chip shortage has definitely impacted the current generation of consoles because I still can't get one. And it's an interesting transition there because it used to be that the architectures would fully change between console generations.

45:18 Right now, they don't, which is great for us as developers because getting a game to run across a spectrum of devices is relatively easy compared to developing for two totally different architectures. So I am not very concerned, especially considering that today, in my opinion, graphics have become less relevant than gameplay because visuals have been good enough for closer the better part of the decade. And from there, it's all about innovating on the gameplay part and the game engine part with new technologies. Next question on Hello Engineer. Why is that available only on Google Stadia? It's a timed exclusive with Google Stadia that revolves around the partnership deal we have made with them.

46:11 Next question on the impact from COVID restriction easing. Have you seen any negative impact over the last few months? And do you see any going forward? Right. So when the prescriptions started getting lifted, the obvious question to ask is, well, is everyone going to stop playing games now? We haven't seen any slowdown. We have talked to peers. They're not seeing anything meaningful outside of seasonality. And what we believe has happened is the last two years have made a lot of people aware that they are gamers. Because when you start playing games, you don't really stop. So we have seen, you know, an expansion in the audience in a way that was unprecedented before across all age demographics and touching upon new ones. And those gamers are here to stay because, well, when you realize that you can play games, socialize, be active, and make new friends, that is a really powerful feeling that you don't get from watching, you know, streaming services.

47:21 Next question in terms of the the market more in general. How is your strategy different from competitors and in particular from listed competitors? Right. So we focus on creating franchise. That's the ultimate goal. Because the only thing that is going to outlive us as a generation is going to be intellectual property. If you think about comic books, for example, they have been around for how many decades? And now we're seeing iterations of them. Like in the nineties, we have seen them as cartoons. We're right now, we're seeing them as really, really overly expensive TV shows and great movies, but also video games. So what I want to do is I want to build a multimedia company that knows video games, knows how to make money within video games, and invest that capital into long term strategy of having that IP live everywhere so that, you know, whenever there is a technology disruption, we're able to take that intellectual property and put on a new platform. Be that, I don't know, chips embedded into our brains twenty years from now. Who knows? But the way that we consume media always evolves, and I want to evolve the company alongside that and be wherever it makes sense at that time. And the way to get there is our multimedia strategy.

48:35 And I've got a last question from the line, maybe interesting to close this with this one. What is your guidance for the full year, and how in general do you feel about the next twelve months? I'm pretty confident about this year. With the guidance question, can I refer that back to you, Jas, or Tony? No. I'll put you over to Jas because I'm just gonna say, you know, hand it up back to IR. Yes. In terms of guidance, our official guidance, and that's been the same since IPO, is that we'll at least we feel confident we will at least meet expectations. And as a reference, in terms of analysts following us, there has been, on average, a mid to high single digit upgrade to our 2022 EBITDA.

49:33 That's great. Jazz, Tony, Alex, thank you very much indeed. I think you've addressed most of the questions, if not all of the questions that have come in from investors. So thank you once again for those investors that have taken time to submit the questions today. Alex, I know investor feedback is important to you and to the rest of the management team, and we'll shortly redirect investors to provide you with their thoughts and expectations. But before doing so, perhaps I could just ask you for a few closing comments just to wrap up with. Yeah. I think that we live in the most exciting time for entertainment in general. And to me, it's really important that we take this opportunity to build something that is very long lasting. And one of the reasons we went public is to achieve those goals. So I really appreciate the support of everyone since we went public.

50:22 Thank you so much for the questions, and I'm honestly looking forward to the next one maybe in person. Alex, Tony, Jazz, thank you once again for updating investors this morning. Can I please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations? This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of TINYBUILD, we'd like to thank you very much for attending this morning's presentation. That now concludes today's session, and good morning to you all.