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№ 345 34 filings · 2021-07-26 → 2026-06-18

TINYBUILD INC.

TBLD
Consumer Products and Services Share price 11.50p Market cap £45m Overall fit 330 /1000

Fair-price story with genuine operating leverage and clean balance sheet, but essentially zero AI-receiver exposure (35% of the investor's weighting) and mid-tier quality on execution and earnings quality. Outside the strategy's primary hunting ground.

Fair value range 8p–14p Mid case · £43m
Absolute upside -4.9% vs current market cap
Conviction 3/5 confidence in fair call
Supports the call
  • clear H1 25 EBITDA inflection on lean cost base
  • debt-free balance sheet with transparent disclosure
  • consistent small beats in last two prints
Limits the call
  • pipeline outcomes (Kingmakers/SAND) are binary and swing FY26 EBITDA materially
  • capitalised dev costs of $30m carry ongoing impairment risk
Methodology

Blended EV/Sales and EV/Adj EBITDA vs small-cap games peers, balance-sheet floor check

In one line · bull case

Debt-free, cost-cut games publisher trading near book with a strong wishlist pipeline and visible operating-leverage inflection — but with no AI-receiver angle and pipeline binary risk.

In one line · biggest risk

Cash troughs at mid-single-digit millions in summer 2026 with no facility, so a slipping Kingmakers/SAND release would likely force another dilutive raise.

Drivers
AI beneficiary 12 /100
Video-games publisher with no AI-linked revenue line or captured productivity moat; consumer-facing not enterprise-facing.
Operating leverage 68 /100
Fixed SG&A now ~$7m/half against ~$17m revenue; catalogue royalties carry very high incremental margin; new titles diluted by heavy dev amortisation.
Earnings vs expectations 52 /100
Beats in H1 25 and FY25 pre-close, but Dec 2023 profit warning within the period; net roughly in line.
Growth momentum 55 /100
H1 25 EBITDA inflection and 2026 wishlist pipeline are strong; revenue base still well below FY22 peak.
Moat 32 /100
Franchise durability in Hello Neighbor and a few evergreens; otherwise low switching costs and platform-dependent economics.
Earnings quality 35 /100
$13.7m FY24 dev impairment and $27m in H1 23 signal aggressive capitalisation; Adj EBITDA excludes recurring items.
Management quality 45 /100
Founder CEO owns 37.8%+, underwrote 2024 rescue; but Versus Evil acquisition destroyed capital and rapid headcount unwind suggests over-hiring.
Cyclicality 55 /100
Consumer discretionary; games sector visibly reset in 2023 alongside advertising/streaming.
Leverage 8 /100
Zero debt, $4.6m cash at 30 June 2025; fortress by intent but only modest liquidity cushion.
Value-trap signals · 6
  • Revenue declined 52% peak to trough ($63m FY22 → $30m FY24) before stabilising
  • $13.7m dev-cost impairment in FY24 plus $27m in H1 23 suggests aggressive capitalisation
  • Dilutive Jan 2024 rescue placing at 5p nearly doubled share count and required CEO underwrite; alternative was chapter 11
  • $3.5m Versus Evil litigation settlement (Dec 2023) evidences a failed 2021 acquisition
  • Customer concentration: three customers = 81% of H1 25 revenue
  • Related-party dominance: CEO now controls 37.8%+ with mandatory-offer waivers pre-approved

TinyBuild, Inc. (TBLD) — Investment Research Note

Executive summary

TinyBuild is an AIM-listed premium video games publisher and developer (Delaware-incorporated) with a catalogue of 100+ titles, franchise IP such as Hello Neighbor and Graveyard Keeper, and a pipeline led by Kingmakers, SAND and Graveyard Keeper 2. The trajectory across the period is a boom-bust-recovery: revenue peaked at $63.3m in FY22 (Adj EBITDA $24.4m), collapsed to $30.4m in FY24 (Adj EBITDA loss $5.9m and $13.7m of development-cost impairments), and is now stabilising with H1 25 delivering $17.0m revenue and $4.2m of Adj EBITDA on a leaner cost base. The single most important valuation question today is whether the strong 2026 wishlist pipeline converts into cash before the mid-single-digit-million cash balance troughs in summer 2026.

Fair value estimate

Range: 8p – 14p per share (implied market cap £31m – £55m). Central estimate ~11p / £43m.

Methodology: blended EV/Sales and EV/EBITDA against small-cap games-publisher peers, sanity-checked against balance-sheet floor.

Assumptions:

  • FY25 revenue $30-34m (annualising H1 25 $17.0m with typical H2 seasonality; pre-close 2026-02-05 confirms "slightly ahead of expectations" — converts to ~£24-27m).
  • FY26 Adj EBITDA range $5-12m depending on Kingmakers/SAND execution; mid-case ~$8m (£6m).
  • Peer multiples: 1.0-1.7x forward sales, 4-6x EV/Adj EBITDA (Team17, Devolver Digital, Frontier now all trade at depressed multiples; TBLD deserves the low end given lower quality, smaller scale, execution risk).
  • 1.3x FY25 sales × £26m + $4m net cash / £3m + no debt → EV ~£34m + cash → equity ~£37m → ~9.5p.
  • 5x FY26 mid-case Adj EBITDA (£6m) = £30m EV + cash = £33m → ~8.4p.
  • Bull case (pipeline hits, £10m FY26 Adj EBITDA × 6x) → £62m equity → ~15p.
  • Balance-sheet floor: net assets $41.8m (30 June 2025) = ~£33m = ~8.4p, but this is inflated by $30.4m capitalised software dev costs which have already been aggressively impaired and could impair further.

Compared to £41.3m current market cap: absolute upside ~5% to mid-case; range spans -25% to +33%. View: fair.

Sector context

  • Sector classification confirmed: Consumer Discretionary / Consumer Products and Services / Leisure Goods (video games). The AIM ICB sub-industry is Toys, Games & Hobbies.
  • Relative to typical peers: below on quality (repeated impairments, dilutive rescue at 5p in Jan 2024), broadly in line on growth (industry-wide reset 2022-24), above on balance sheet (no debt).
  • Listed peers: Team17 (TM17.L), Frontier Developments (FDEV.L), Devolver Digital (DEVO.L), Keywords Studios (taken private). All have de-rated sharply from 2021 peaks; TBLD is at the small, higher-risk end.

Investment thesis

  • Operating leverage inflection is visible. H1 25 continuing revenue $17.0m (broadly flat vs $16.8m H1 24) turned a $2.3m Adj EBITDA loss into a $4.2m profit purely on cost-out: SG&A fell to $7.1m from $10.5m and dev-cost impairment fell to $1.1m from $3.0m. Any pipeline success (Kingmakers is #5 on Steam wishlists per 2026-06-18) drops incrementally onto a much lower fixed cost base 2025-09-16 H1 25 results; 2026-06-18 AGM trading update.
  • Debt-free balance sheet gives execution time. No borrowings; $4.6m cash at 30 June 2025 grew from $3.1m at Dec 2024 via disposal of Red Cerberus. Management has demonstrated willingness to sell assets (Surgeon Sim, Totally Reliable Delivery Service, Red Cerberus) to preserve liquidity, and CEO has previously personally underwritten fundraising 2025-09-16 H1 25 results; 2023-12-21 placing.
  • Own-IP mix now 85% of gaming revenues (H1 24: 78%). Higher-margin franchise revenue is displacing lower-margin third-party publishing. Hello Neighbor continues generating revenue nearly a decade after release, evidencing catalogue longevity 2026-02-05 pre-close update; 2025-09-16 H1 25 results.

Key risks

  • Cash trough in summer 2026 with no debt facility. Company disclosed cash of "mid-single digit millions" at end-May 2026 and expects it to trough over the summer. A slipping Kingmakers/SAND release window could force another dilutive raise like Jan 2024's £8m at 5p (a 100% premium to the then-price but hugely dilutive: shares outstanding went from 203m to 397m) 2026-06-18 AGM trading update; 2023-12-21 placing.
  • History of large development-cost impairments. $13.7m impairment in FY24, $18.3m in H1 23 alone, plus $6.1m goodwill and $2.8m intangibles impaired in H1 23. Capitalised dev costs still stand at $30.4m on the balance sheet at 30 June 2025 — further impairments cannot be ruled out if pipeline titles underperform 2025-09-16 H1 25 results Note 8; 2023-09-26 H1 23 results Note 7.
  • Ukraine/Russia staff and revenue exposure. Repeatedly flagged in every filing since 2022. Also customer concentration: three customers = 81% of H1 25 revenue (30 June 24: four customers = 75%). Any platform partner (Steam, Sony, Microsoft) altering terms or subscription economics is a material risk 2025-09-16 H1 25 results Note 5.

Operating leverage

TinyBuild has genuine operating leverage but it is project-dependent, not the perpetual SaaS variety. The cost base is dominated by capitalised software development ($6.2m in H1 25, down from $8.7m in H1 24) plus SG&A of $7.1m in H1 25 (down from $10.5m in H1 24 after the 2024 headcount reduction from 400 to ~200 staff). Gross margin ex-impairment rose to 67% in H1 25 from 36% in H1 24 as the revenue mix shifted to own-IP back-catalogue (100% of gaming revenue was back-catalogue in H1 25). A 10-20% revenue upside on the current $32-34m run-rate — say $37-40m for FY26 with Kingmakers — would plausibly add $5-8m to Adj EBITDA (i.e. double or triple the FY25 result) because SG&A is largely fixed and back-catalogue royalties carry very high incremental margins. The counter-caveat: new-title revenue is heavily consumed by dev-cost amortisation (H1 25: $3.9m), so operating leverage is real for catalogue hits but modest for freshly-launched titles amortising heavy prior investment 2025-09-16 H1 25 results financial review.

Value-trap signals

  • Revenue trajectory over the period covered: $52.2m (FY21) → $63.3m (FY22) → $44.7m (FY23) → $30.4m (FY24) → recovery to ~$30-34m (FY25e). Meaningful multi-year decline, and revenue is not back to FY20 levels.
  • Repeated large non-cash impairments ($13.7m in FY24, $27.2m in H1 23) — pattern suggests aggressive dev-cost capitalisation.
  • 2024 emergency raise at 5p (a 100% premium to then-market but massively dilutive) is a value-trap flag: without CEO underwrite, the board flagged likely chapter-11.
  • Repeated downward guidance in 2023 (Dec 2023 profit warning cut FY23 revenue guidance from ~$50m consensus to $40-50m actual).
  • CEO now controls 37.8%+; independent minority protection reduced.
  • Related-party history: Versus Evil acquisition (Nov 2021) turned into $3.5m litigation settlement in Dec 2023 plus large impairments.

Earnings vs. expectations

  • H1 22 (result 27 Sep 22): slightly ahead of expectations vs prior AGM statement of "at least in line". Beat.
  • FY22 (pre-close 25 Jan 23): revenue in line, EBITDA broadly in line. Met.
  • Dec 2023 profit warning: FY23 revenue guided down to $40-50m vs Bloomberg consensus $49.9m. Miss (actual $44.7m at midpoint).
  • H1 24 (30 Sep 24 result): in line with recently-reset expectations. Met (after prior downgrade).
  • FY24 (pre-close 6 Feb 25): revenue and Adj EBITDA broadly in line. Met.
  • H1 25 (16 Sep 25): "ahead of expectations". Beat.
  • FY25 pre-close (5 Feb 26): "slightly ahead of expectations". Beat.

Pattern: severe misses through 2023 during industry reset, disciplined resets, then consistent small beats through 2025 as cost-out flowed through. 2 clear beats in the last three prints suggests conservative guidance under the current CFO.

Conviction

3 — moderate.

Anchors: (i) clean segmental and impairment disclosure allows the P&L to be reconstructed; (ii) balance sheet is transparent and debt-free; (iii) the H1 25 turnaround from -$2.3m to +$4.2m Adj EBITDA on a lean cost base is convincing evidence the operating-leverage story is real.

Limits: (i) pipeline conversion is genuinely binary — Kingmakers and SAND either hit or miss and could swing FY26 EBITDA by $10m+; (ii) capitalised dev-cost accounting means reported earnings can differ materially from cash generation, and further impairments are possible; (iii) games-industry cyclicality and Ukraine exposure add wide range around any point estimate.

Driver scoring

  • AI beneficiary: 12. Games publisher with no material AI-driven revenue line or productivity moat that TBLD itself captures. AI may help all game developers on cost, but value flows to the tooling vendor.
  • Operating leverage: 68. Predominantly-fixed SG&A ($7.1m H1 25) plus catalogue revenue at very high incremental margin. Attenuated by heavy dev-cost amortisation on new releases.
  • Earnings surprise trend: 52. Two clean beats in the last three prints, but 2023 profit warning is a fresh scar; roughly in line overall.
  • Cyclicality: 55. Consumer discretionary spend, sensitive to macro; less cyclical than autos but visibly hit by 2023 industry reset.
  • Moat: 32. Some IP durability (Hello Neighbor still selling a decade on), but publishing/dev is fiercely competitive with low switching costs and platform-dependent economics.
  • Leverage: 8. Net cash $4.6m, zero debt, no drawn facility. Fortress by intent but small cash cushion.
  • Earnings quality: 35. Repeated large impairments, aggressive capitalisation of dev costs, non-IFRS "Adjusted EBITDA" excluding meaningful recurring dev impairments in some periods.
  • Management quality: 45. CEO founder-aligned (37.8% stake, underwrote 2024 rescue); but Versus Evil acquisition destroyed value, and rapid unwind of over-hiring shows the earlier build-out was mispriced.
  • Growth momentum: 55. From a deep trough — H1 25 EBITDA inflection is real; pipeline wishlist metrics are strong; but revenue base still well below 2022 peak.

Overall score: 330 / 1000

The score is dragged down by a near-zero AI-beneficiary reading (35% of the weighting) — this is a video-games publisher whose IP has no obvious AI-driven revenue lift and whose customers are consumers, not enterprises augmenting workflows with AI. Operating leverage is a legitimate positive and the valuation is fair rather than stretched, but the strategy the user has articulated (AI-receivers with operating leverage at a fair price) puts TBLD outside the primary universe. Would only score higher if AI weighting were relaxed.

Filings consulted · 39

Every document the LLM read for this note. Click any row to open the source.

  1. 2026-06-18Result OF Agm2026-06-18_9626214_result-of-agm.md0.30
  2. 2026-06-18Agm Trading Update2026-06-18_9624078_agm-trading-update.md0.85
  3. 2026-04-27Notice OF Agm And Posting OF The Annual Report2026-04-27_9538184_notice-of-agm-and-posting-of-the-annual-report.md0.95
  4. 2026-03-17Notice OF Results Amp Investor Presentations2026-03-17_9477014_notice-of-results-amp-investor-presentations.md0.70
  5. 2026-02-05Pre Close Trading Update2026-02-05_9410009_pre-close-trading-update.md0.72
  6. 2025-09-162025 Half Year Results2025-09-16_9109667_2025-half-year-results.md0.77
  7. 2025-09-10Notice OF Results And Investor Presentation2025-09-10_9097799_notice-of-results-and-investor-presentation.md0.59
  8. 2025-06-03Result OF Agm2025-06-03_8910785_result-of-agm.md0.20
  9. 2025-06-03Agm Trading Update2025-06-03_8908719_agm-trading-update.md0.55
  10. 2025-05-14Notice OF Agm And Posting OF The Annual Report2025-05-14_8876351_notice-of-agm-and-posting-of-the-annual-report.md0.62
  11. 2025-04-03Notice OF Results Amp Investor Presentation2025-04-03_8811765_notice-of-results-amp-investor-presentation.md0.46
  12. 2025-02-06Pre Close Trading Update2025-02-06_8724046_pre-close-trading-update.md0.55
  13. 2024-09-302024 Half Year Results2024-09-30_8448105_2024-half-year-results.md0.58
  14. 2024-06-28Result OF Agm2024-06-28_8285587_result-of-agm.md0.14
  15. 2024-06-24Trading Update2024-06-24_8273201_trading-update.md0.38
  16. 2024-06-14Notice OF Agm2024-06-14_8260987_notice-of-agm.md0.14
  17. 2024-03-27Investor Presentation Via Investor Meet Company2024-03-27_8108654_investor-presentation-via-investor-meet-company.md0.32
  18. 2023-12-21Results OF Placing2023-12-21_7957560_results-of-placing.md0.32
  19. 2023-12-21Placing Private Placement Subscription Open Offer2023-12-21_7955343_placing-private-placement-subscription-open-offer.md0.32
  20. 2023-12-05Trading Update And Litigation Settlement2023-12-05_7921427_trading-update-and-litigation-settlement.md0.38
  21. 2023-09-262023 Half Year Results2023-09-26_7777214_2023-half-year-results.md0.41
  22. 2023-09-13Notice OF Results And Investor Presentation2023-09-13_7751815_notice-of-results-and-investor-presentation.md0.32
  23. 2023-06-30Result OF Agm2023-06-30_7604448_result-of-agm.md0.07
  24. 2023-06-29Agm Trading Update And Directorate Change2023-06-29_7601711_agm-trading-update-and-directorate-change.md0.21
  25. 2023-06-07Posting OF Annual Report And Notice OF Agm2023-06-07_7563039_posting-of-annual-report-and-notice-of-agm.md0.24
  26. 2023-03-08Investor Presentation2023-03-08_7327634_investor-presentation.md0.17
  27. 2023-01-23Pre Close Trading Update2023-01-23_7473445_pre-close-trading-update.md0.21
  28. 2022-09-272022 Half Year Results2022-09-27_7122992_2022-half-year-results.md0.23
  29. 2022-09-08Investor Presentation2022-09-08_7269522_investor-presentation.md0.17
  30. 2022-07-12Agm Trading Update And Notice OF Results2022-07-12_6990829_agm-trading-update-and-notice-of-results.md0.21
  31. 2022-06-10Posting OF Annual Report And Notice OF Agm2022-06-10_6876186_posting-of-annual-report-and-notice-of-agm.md0.24
  32. 2022-06-07Capital Markets Day2022-06-07_7112800_capital-markets-day.md0.24
  33. 2022-03-14Investor Presentation2022-03-14_6896768_investor-presentation.md0.17
  34. 2022-01-25Pre Close Trading Update2022-01-25_6951150_pre-close-trading-update.md0.21
  35. 2021-11-23Acquisition OF Versus Evil And Red Cerberus2021-11-23_6837546_acquisition-of-versus-evil-and-red-cerberus.md0.19
  36. 2021-09-15Half Year Results2021-09-15_6827282_half-year-results.md0.23
  37. 2021-09-01Investor Presentation2021-09-01_6696604_investor-presentation.md0.17
  38. 2021-07-28Result OF Agm2021-07-28_6783385_result-of-agm.md0.03
  39. 2021-07-26Agm Statement And Notice OF Results2021-07-26_6742436_agm-statement-and-notice-of-results.md0.04

This research note was authored by a large language model after reading 34 regulatory filings published between 2021-07-26 and 2026-06-18. Each citation refers to a specific RNS announcement in the underlying data set. The note is an opinion, not advice. Do your own work before risking capital.