TinyBuild revenue up 18% to $20m, EBITDA down 23% on second-party royalties and marketing
Summary
TinyBuild revenue rose 18% to $20 million in H1 2026, with 85% of gaming revenue from first- and second-party owned IP.
Gross profit fell 5.7% to $9.8 million on higher royalties from second-party releases.
Adjusted EBITDA dropped 23.2% to $3.2 million on marketing spend behind new launches.
Back catalogue supplied 68% of gaming revenue, keeping an evergreen base under the new-release cost pressure.
"Our medium-term strategy is to expand our position as a leading global video games developer and publisher, focusing on IP ownership while creating long-term scalable franchises across multiple media formats"
01
Second-party royalties are compressing gross margin
Gross profit fell from $10.4 million to $9.8 million despite 18% revenue growth.
TinyBuild ties the decline to higher royalties on successful second-party new releases.
The mix shift toward second-party titles carries a structural royalty cost as their share rises.
Hello Neighbor and Graveyard Keeper anchor the 68% back catalogue at lower royalty overhead.
02
Marketing spend behind new launches erodes EBITDA further
Adjusted EBITDA fell 23.2% from $4.2 million to $3.2 million.
TinyBuild attributes the drop to marketing spend behind Hozy, All Will Fall, and Sand: Raiders of Sophie.
Headcount stayed broadly stable near 200, isolating the decline to go-to-market spend.
"Our multimedia franchise model allows us to extend the life of our IP, maximising our return on investment"
03
A $5m-plus pipeline will test whether the model pays off
TinyBuild disclosed a pipeline with several games budgeted above $5 million plus catalogue expansions.
Management stated confidence in delivering full-year results ahead of expectations.
Griffin Gaming Partners bought a 3.24% stake in June, citing sustainable franchise potential.
What this means
For Investors & VC: Top-line growth is real, but royalty and marketing costs cut into margin before the $5m pipeline lands.
For Publishers & Developers: Second-party IP mix shifts royalty cost onto the publisher, structurally compressing gross margin.
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