Thank you all for joining. I'd like to introduce Zsofi Paterson, CEO of Tinybeans, and Chantale Millard, Chairman of Tinybeans, today to present the first half results. It's been, you know, a period of six months of transition, following changing in CEO and the, the management team. And from a developmental perspective, the guys have done a great job in tidying up but also setting up the platform for success. And I think the key points that we focused on specifically, the retention of subscribers and the leverage of the subscriber base going forward that we think can drive real value for shareholders. I won't steal any more of your thunder, Zsofi, and Chantale, but thank you very much for joining us. And if you've if anybody has any questions, feel free to ask them through the presentation. Over to you, Zsofi.
Thanks to you. Good morning, everyone. Thank you for joining. I'm gonna take myself off camera and take us through the presentation. And then I'll pop back on and be around for any questions that come up. So click right into it. So, for those new to Tinybeans, not sure if there are any people new to Tinybeans on the call, but just in case there are. We are one of the leading private and safe family photo sharing apps that connect generations and turn moments into memories. We've been loved and trusted by families around the world for over 10 years. And there are a number of things that keep our business going and put us in a real position of strength moving forward. Four of them are called out on the screen today. The first, our size and scale.
We have over four million parents and families that we reach every month across our different platforms. That includes our app, our websites, our social channels, and our email communications. We have diversified revenue streams which include premium recurring subscription revenue, advertising revenue, affiliate revenue, and e-commerce revenue. Our highest growth segment is the subscription revenue which is also the most valuable. We are a true daily use product where we see over 40% of our paid subscribers using Tinybeans every single day putting us well and truly on the daily use product category. We have really strong engagement retention and, and consequently a really nice LTV with people sticking around four to five years, and yeah continuing to use the product very meaningfully through that time as well. It's been a really busy half. It's been my first half in the seat.
And we've accomplished a lot while facing some real challenges. In addition to some of the financial highlights which I'll get to in a second, we've defined and began implementing a clear company strategy focused on growing the subscription business. We've retained over 80% of annual subscribers despite a material price increase from the new Tinybeans Plus pricing. We've unified a team that was lacking in clarity and direction and we've streamlined it for efficiencies and performance gains. We've rolled out a fantastic fresh brand and visual identity and a new website that for the first time enables a funnel to drive subscriber growth. We've launched the new Android app and we're seeing material improvement in the all-important star ratings in the Google Play Store. And we've undertaken a meaningful sales review to understand the reason for the steep decline in revenue year-on-year.
We are in the process of taking all the steps we can to try and rebuild that. It's been a really busy half. I'll move on to the financials. As we've reported revenue has decreased to AUD 2.76 million for the half which was 47% down against the prior comparable period. This was primarily caused by the decline in advertising revenue which decreased 72% PCP to AUD 1.08 million due to minimal pipeline entering the year and the sales team rebuild required in the half. We've talked a lot about the efforts that we've taken to put us in a stronger position moving forward and we remain committed to doing so. Conversely subscription revenue increased 36% against the prior comparable period up to AUD 1.39 million outpacing advertising revenue for the first time.
Interestingly as well, the average revenue per user increased from AUD 54 per year to AUD 63 per year over the half due to subscribers rolling onto and being acquired at the new pricing. We move really quickly and effectively to reduce operating expenses by 22% against the prior comparable period with savings being achieved primarily in headcount. Cash burn for the half was AUD 1.09 million compared to AUD 1.51 million in the PCP. We finished the half with a strong cash balance of AUD 2.34 million due to strong renewals, improved collections and cash management as well as early payment from Apple for a portion of the subscription receipts in the quarter. This also included the AUD 1.9 million capital raise from July 2023. I'll touch on a couple of additional points in the P&L.
We've already covered revenue and expenses. The gross margin remains really healthy at 90%. We re-reported an adjusted EBITDA position of -AUD 2.02 million for the half. Looking at the balance sheet, we've already covered the cash balance of AUD 2.34 million as of 31 December, which is up from where it was six months prior. The accounts receivable decreased by 25% over the period due to better collection but also lower advertising revenue. Our current liabilities increased 40% due to large annual subscription collections in quarter two being put to deferred revenue for future period recognition. A final note on cash. We've included the cash position as of yesterday for full transparency and that was AUD 1.94 million. Notice that the business expects further cash burn in future quarters.
As per our market announcement just this morning, we have secured a binding loan of AUD 2 million from shareholders, which combined with our cash position provides confidence to continue to execute our strategic growth plans while we continue to explore broader strategic partnerships and opportunities. Turning to the key metrics of the company, which now align better with consumer subscription businesses. Our paid subscribers remain flat over the year ending at 52,500, which is a good result given the lack of investment in marketing and the Tinybeans Plus price increase. Our monthly recurring revenue however increased 51% due to the Tinybeans Plus rollout and price increase. The DAU/WAU engagement metric of our daily active users over our weekly active users is super strong at 59% putting us in the daily use product category.
Our LTV is healthy at AUD 316 and this is just based on the monthly recurring revenue. This helps set guardrails as we increase our investment in marketing, ensuring that our acquisition efforts are profitable and scalable. If we look at the audience metrics and numbers, we have just over 900,000 monthly active users in the Tinybeans app that includes paid subscribers, free subscribers, and their family and friends. We have 1.25 million unique visits to the Tinybeans website, demonstrating continued strength in SEO and our content strategy. As noted in the half-year highlights, and hopefully you all received the communications earlier this month, although technically not in half one, in late January we launched the new Tinybeans brand and website.
The website now reflects and the brand now reflects the central principles of joy and connection with a visual design that is fresh, compelling, and fun. Importantly, the website also offers a clear articulation of who we are, why we exist, and for the first time enables a funnel to drive content web visits to the Tinybeans app. The rollout was seamlessly executed by the team, demonstrating the gains in the operating rhythm, and we supplemented where needed by talent in Australia to deliver it incredibly cost-effectively and efficiently. The feedback and early results since the launch have been really positive, with initial data demonstrating a five times increase in app downloads from tinybeans.com, higher conversion on the app stores, and higher click-through rates in our content newsletters.
If you haven't already please visit tinybeans.com and I provided a sample of the communications and the assets in the following pages for you to have a look at after this call. I'll just flick through them really quickly. Here's the new landing page and website which as you can see is more focused on the app and it makes a really clear case for our value proposition and also has a whole lot of opportunities to try and drive that subscription funnel. Here's a very small sample of some of the updated mobile app screens, which you can see a much tighter fresher kind of visual design. Here's a sample of our newsletters which we've made great gains in. We've really honed in on our content strategy serving you know custom content to the different audiences that receive our content.
And the open rates and click-through rates are really really strong, doing very well. So I'm very pleased with the progress we've made from a content perspective. Moving to look at our strategy for the next half. At the AGM in November I shared a view of the next two years where we're undertaking a reset and a turnaround after a challenging few years. At a high level 2024 will involve a strategic and operational reset which as we've talked about is well underway with the strategy defined, brand refreshed, and fine-tuning of the team. Where we will also be focused on investment and improving in the underlying product, technology, and data and analytics capability. And all of this will then put us in a much better position to generate subscriber growth and begin to market.
Looking more specifically at this half in order to drive subscriber growth and total monthly active users, we're laser focused on the following pillars, which I'll talk to. Acquisition at scale via marketing initiatives. Subscriber activation through product initiatives. And app monetization to improve in-app advertising revenue. Turning to each of those. Marketing. Tinybeans has spent very little on marketing and acquisition over the last few years and consequently has not generated net subscriber growth. The company benefits from a strong paid organic mix with only around 20% of subscribers coming from paid channels and with a healthy cost to acquire. However, we've not been able to drive scalable acquisition. Over the next half, we'll be implementing new channels including affiliate marketing partnerships, niche sponsorships, and possibly, and if possible, ambassador or influencer programs.
Affiliate marketing offers a flexibility as well as a cost-effective method to have Tinybeans promoted in publications and generate leads. We see partnerships with highly aligned ecosystem brands as another way to get in front of more people within our core target demo of new or expecting first-time moms. We're looking at select sponsorship opportunities particularly in Australia to test these out. Many of these require product support to enable, which the team has been hard at work on in the first few months of the half. In addition to new channels, we'll be upgrading investment and implementing new strategies across existing channels to better drive subscriber growth. This includes diversifying and testing new creative and user-generated comment content across performance media channels. Optimizing our always-on lifestyle marketing. And ensuring our programs are behaviorally timely and insight-based.
Building domain authority for new parent content, honing in on our content strategy and our SEO. Building out referral programs to incentivize subscribers to refer their friends, which is behavior that's already happening organically, and we need to find a way to bring that into the app. Moving on to the key area of product, the key focus areas of product over this half. We know that once a subscriber uploads photos and adds family members, they have a high propensity to convert to a paid subscriber or continue to use Tinybeans within its free limits for several months or years. However, we see a steep drop-off with many new subscribers failing to take their first action and not coming back in subsequent weeks or months after they sign up. As we increase our marketing efforts, this leaky bucket becomes even more important to address.
To improve this, we'll be optimizing the onboarding and welcome app screens. Improving the first-time experience in-app, making it simpler and cleaner to begin engaging. Improving our customer lifecycle journeys and communications to bring people back in. Other product initiatives in the half include addressing legacy performance and stability issues with the app and influencing subscriber acquisition to improve our monthly recurring revenue with a focus on web acquisition and annual plans, which have declined since the Tinybeans price increase. Moving to advertising and monetization. The introduction of Tinybeans Plus allows the company to earn both advertising and subscription revenue from subscribers. However, less than 15% of ad revenue in last half was derived from the app due to poor ad units, low CPMs, and decreased direct sell-through.
The goal this half is to improve the in-app ad units in order to command premium CPMs, meet client briefs for video, and enable stronger direct sell-through. Of course, we must balance this with the need to optimize the UI to support the primary goal of growing the subscriber business. We are also continuing to focus on people, process, and platform-based sales initiatives to rebuild the sales revenue and brand trust. To wrap up, it's been a busy and challenging but really productive first half of the year and my first six months in the seat. We've demonstrated a bias for action and a good ability to execute strategically and operationally with some good wins across product, brand, strategy, and people. Moving into the second half, we are building momentum, laying foundations, and beginning to invest for growth.
We're putting our heads down and getting on with the job and thank our shareholders for their continued support.
Thank you Zsofi. I'll open the floor to any questions. No?
Sure.
Kiel, how you going, Graham?
Of course, great. Of course, Graham.
Zsofi, well done. No, it's a tough gig. Going forward in terms of the cash you've made for the cash burn. One of the is it well are we looking at a cash flow break-even position in the next six months or is it too early to tell?
We will not be looking at a cash flow break-even position in the next six months.
Okay cool. No.
I think it's important to say we've got a pathway to get to that cash flow break-even point. We're not willing to say what that is but the modelling is on that way Graham so it's yeah it's not forever.
No, no, no. Fair comment. Okay, that's good as long as we understood, you know, clear understanding of it, you know. It's made some fantastic improvements. That's for sure. And clarification of the whole exercise. Good work.
Thanks, Graham. Appreciate it.
Thanks, Graham. Are there any other questions? Okay, well, I think everybody's got a busy morning. If you do have any other questions, please feel free to come through to myself at Bell Potter or directly to the company after the call, but thank you very much, Zsofi and Chantale, for your time. We'll look forward to getting an update from you next quarterly.
Thank you.
Thanks everyone for joining.
Yeah, thank you.
Thank you. Bye.
Thank you bye-bye.
Bye.