Breaking #Fintech News:
Weyland Tech (OTCQX: $WEYL) (OTCQX: $WEYLD) Reports Revenue up 86% to Record
$10.0 Million in Q4 2019, and up 53% to Record $34.6 Million for the Full Year;
@weylandtechinc
NEW YORK - March 31, 2020 (Investorideas.com
Newswire) Weyland Tech, Inc. (OTCQX:
WEYL) (OTCQX:
WEYLD) a leading global provider of mCommerce
platform-as-a-service (PaaS), reported results for the fourth quarter and full
year ended December 31, 2019. All quarterly and yearly comparisons are to the
same year-ago period unless otherwise noted.
Financial Highlights
·
Q4 2019 revenue, comprised of recurring
subscription fees, totaled a record $10.0 million, up 11% from the previous
quarter and up 86% from the year-ago quarter.
·
Full-year 2019 revenue increased 53% to a record
$34.6 million.
·
Full-year 2019 gross profit increased 55% to $6.2
million, with gross margin improving 30 basis points to 18.0%
·
Cash and cash equivalents totaled $3.0 million at
December 31, 2019.
Q4 2019 Operational Highlights
·
Increased adoption of the company's CreateApp
mobile app solution for SMBs, which included new customers as well as existing
customers subscribing to additional features and modules. The CreateApp user
base, comprised of businesses across Southeast Asia, grew 47 percent last year
to more than 360,000.
·
Entered agreement to acquire the assets and
operations of the eCommerce technology company, Push Interactive, which closed
on January 8, 2020.
·
Acquired 31% beneficial ownership of PT Weyland
Indonesia Perkasa (WIP), owner and operator of the fast-growing AtozPay and
AtozGo platforms. AtozGo™, a short distance food delivery service in Jakarta,
Indonesia, addresses the need for a hyper-local, pedestrian-powered food
delivery service that can make food delivery from local establishments quick
and easy for office workers and urbanites. In the eight months since its
launch, lunchtime deliveries have scaled to more than 100,000 customers.
Management Commentary
"For Q4 and the full year of 2019, our record
topline performance was driven by continued growth in CreateApp subscription
fees, with this due to the increasing adoption of our CreateApp
Platform-as-a-Service by businesses in the markets we serve," commented
Weyland Tech CEO, Brent Suen. "Excluding a recent change in the accounting
for our R&D expense, expensing immediately versus amortizing, we would have
been adjusted EBITDA positive for the fourth quarter."
"CreateApp, which enables businesses to create
and deploy native mobile applications for Apple iOS and Google Android without
technical knowledge or background, realized strong gains in 2019 in terms of
new users and market expansion. Our CreateApp user base, which is mostly
comprised of businesses across Southeast Asia and other select countries, grew
47% in 2019 to more than 360,000.
"This growth continues to be driven primarily
by our highly-productive channel partners who have been introducing new
customers, as well by existing customers subscribing to additional features and
modules. We also continued to benefit from the overall positive trends in
global markets toward e-Commerce, and for emerging markets the continued shift
to m-Commerce.
"In February of this year we announced a new
partnership with Indosat Ooredoo, Indonesia's second largest telecom provider,
to launch a nationwide marketing campaign for CreateApp. We expect this
partnership to greatly expand our market reach in Indonesia, especially where
there is strong smartphone penetration and virtually no competition for DIY
mobile app platforms like CreateApp.
"This campaign also presents up- and
cross-sell opportunities for AtozPay, our fintech solution for businesses to go
cashless in a market where 60% of the adult population is unbanked. The
Indonesia market has the fastest adoption of mobile apps. It also has the
largest and fastest-growing Internet economy, expected to grow at a 49% CAGR to
more than $100 billion by 2025.
"CreateApp and our newly acquired U.S.-based
business, Push Interactive, provide ‘e-Commerce enablement,' with this now more
important than ever for enterprises and brands around the world. Key to our
acquisition of Push is how it has provided Weyland, which historically has been
focused on South East Asia, a well-established beachhead in North America. We
believe this will allow us to attract new users to CreateApp and AtozPay more
quickly and cost efficiently.
"Push's eCommerce platform is highly
synergistic to our existing m-Commerce technologies, including AtozGo, our
hyper-local, ‘foot-powered' food delivery service operated by our AtozGo
fintech subsidiary in Jakarta. We recently reported that the number of
registered users for AtozGo reached more than 100,000. This major milestone was
achieved within only eight months since AtozGo's official launch. Given the
trending, we see AtozGo growing to 1 million users by year-end.
"AtozGo users are collectively generating an
average of more than 15,500 delivery orders per day after hitting a high of
17,500. Orders declined about 10% due to the ongoing 14-day period of ‘social
distancing' recommended by the government to slow the spread of the
coronavirus, with this resulting in more people not commuting into the city and
instead working from home. However, offsetting this has been an increasing
percentage of orders for unprepared food and household supplies from local
grocery and convenience stores.
"As we anticipated, our success with AtozGo
has attracted the attention of other larger delivery service providers who
traditionally operate in areas that require motorized delivery, and we've been
involved in a number of ongoing discussions that could involve a potential
buyer of AtozGo or a major partnership.
"The valuations of app-based food delivery
services like AtozGo are highly favorable. If you look at the industry
landscape, whether it's an Uber Eats or DoorDash, or even similar services in
Southeast Asia like GrabFood or Go-Food, the average value per user is around $330.
For AtozGo, this would imply a stand-alone valuation of around $33 million.
"CreateApp's subscription-based model and the
advantages of digital customer interaction continue to drive business activity
despite the problems created by the coronavirus. There is now a greater focus
with consumers on buying things that don't require going out, but which you can
order online and have it delivered to your door. As a result, we continue to
expect growth in 2020, with our positive outlook aligned with industry analyst
expectations for all e-Commerce- focused companies.
"We continue to work to elevate our profile in
the financial community, since we believe the market valuation for a company
like ours with $34.6 million in subscription-based revenue should garner a
several times multiple in its price-to-revenue ratio. Publicly traded
Software-as-a-Service and Platform-as-a-Service companies in our peer group
typically trade at an average of around 10x revenues. Other microcap
comparables trade at around 4x to 5x revenues on average, still considerably
above our trading range. We expect the revenue and synergistic offerings of
Push should drive our valuation even higher.
"We understand the benefit to our valuation of
uplisting to a national exchange, and that such a listing would provide our
investors with better trade execution and liquidity, as well as increase our
visibility with retail and institutional investors. Near the end of February,
we implemented a 1-for-13 reverse split of our common stock to allow our stock
price to meet listing requirements. No one anticipated that so soon after that
the spread of the coronavirus would hit the U.S. so hard and crush the
financial markets. But we are continuing to advance the application process and
hope to receive approval soon.
"To drive business growth and expansion, for
the remainder of 2020 we will continue to focus on supporting our channel
partners and enhancing our platform offerings. We expect margins to improve as
we introduce more value-added services and increase our revenue base. We will
also continue to evaluate a number of attractive merger and acquisition
opportunities. We have the team and infrastructure to execute on our strategic
business plan, but we also plan to continue to invest in our platform and
people, with a focus on global expansion and user growth above all else. Given
our momentum and proven differentiated products and strategies that address
large and growing global markets, we anticipate finishing the year better and
stronger than ever before.
"We came into 2020 with an annualized run rate
of more than $48.6 million, or $60.6 million on a combined pro forma basis with
Push. This compares to the $34.6 million in revenue for Weyland alone in 2019.
In Q1 2020, we anticipate combined revenue of more than $15 million, with Push
contributing to this more than $3 million. Given these results, we believe we
remain on track for another year of double-digit organic growth, and triple
digit acquisitive growth when factoring in the contribution of Push."
2019 Financial Summary
Revenue increased 53% to a record $34.6 million in
2019, as compared to $22.7 million in 2018. The increase was due to a push for
market share for the CreateApp platform during 2019 in highly competitive
emerging markets as well as new subscriptions sold to existing customers and
subscriptions sold directly to new customers.
Gross profit increased 55% to $6.2 million or 18.0%
of revenue compared to $4.0 million or 17.7% of revenue in 2018.
Total operating expenses increased 62% to $12.8
million from $7.9 million in 2018.
Net loss was $6.5 million or $(0.11) per basic and
fully diluted share, compared to net loss of $4.1 million or $(0.14) per basic
and fully diluted share in the same year-ago period.
At December 31, 2019, cash and cash equivalents
totaled $3.0 million, compared to $0.7 million on December 31, 2018. The
increase was primarily the result of proceeds from an equity offering.
Guidance
In Q1 2020, the company anticipates revenue of
approximately $15 million, with the contribution of its new Push Interactive
subsidiary totalling more than $3 million.
Conference Call
Weyland management will host a conference call to
discuss its fourth quarter 2019 results tomorrow morning, followed by a
question and answer period.
Date: Monday, March 30, 2020
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in number: 1-888-394-8218
International dial-in number: 1-323-701-0225
Conference ID: 6710935
Please call the conference telephone number five
minutes prior to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the conference call,
please contact CMA at 1-949-432-7566.
A replay of the call will be available after 8:00
p.m. Eastern time on the same day through April 13, 2020, as well as available
for replay via the Investors section of the Weyland Tech website at weyland-tech.com/ir/.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 6710935
About Weyland Tech
Weyland Tech is a developer and global provider of
mobile business software applications. The company operates its CreateApp™
platform-as-a-service (PaaS) across three continents and 10 countries,
including some of the fastest-growing emerging markets in Southeast Asia. The
platform provides a mobile presence for small-and-medium sized businesses
(SMBs) that is supported locally by distributor partnerships.
Offered in 14 languages with more than 70
integrated modules, CreateApp enables SMBs to create and deploy native mobile
applications for Apple iOS and Google Android without technical knowledge or
background. The technology empowers SMBs to increase sales, reach more
customers, manage logistics, and promote their products and services in an
easy, affordable and highly efficient way. For more information, visit weyland-tech.com.
About the Use of Non-GAAP Financial Measures
Weyland management believes the use of adjusted
EBITDA is helpful to assessing the company's financial performance. The company
defines adjusted EBITDA as income before interest and financing expense,
provision for income taxes, depreciation and amortization, stock-based
compensation and acquisition expense.
Adjusted EBITDA is not a measurement of financial
performance under generally accepted accounting principles in the United States
or GAAP. Because of varying available valuation methodologies, subjective assumptions
and the variety of equity instruments that can impact a company's non-cash
operating expenses, management believes that providing a non-GAAP financial
measure that excludes non-cash and non-recurring expenses allows for meaningful
comparisons between the company's core business operating results and those of
other companies, as well as providing an important tool for financial and
operational decision making and for evaluating the company's own core business
operating results over different periods of time.
The company's adjusted EBITDA measure may not
provide information that is directly comparable to that provided by other
companies in its industry, as other companies in the industry may calculate
non-GAAP financial results differently, particularly related to non-recurring,
or unusual items. The company's adjusted EBITDA is not a measurement of
financial performance under GAAP and should not be considered as an alternative
to operating income or as an indication of operating performance or any other
measure of performance derived in accordance with GAAP. The company does not
consider adjusted EBITDA to be a substitute for, or superior to, the
information provided by GAAP financial results.
The company has not provided a reconciliation to
nearest GAAP measure in this press release since the actual amount or range has
not yet been determined, and it would require unreasonable efforts to report a
reconciliation of this information to the nearest GAAP measure.
Important Cautions Regarding Forward-Looking Statements
This release contains certain "forward-looking
statements" relating to the business of the Company. All statements, other
than statements of historical fact included herein are "forward-looking
statements" including statements regarding: the ability of the Company to
successfully integrate Push, the continued growth of the eCommerce segment and
the ability of the Company to continue its expansion into that segment; the
ability of the Company to attract customers and partners and generate revenues;
the ability of the Company to successfully execute its business plan; the
business strategy, plans, and objectives of the Company; and any other
statements of non-historical information. These forward-looking statements are
often identified by the use of forward-looking terminology such as
"believes," "expects" or similar expressions and involve
known and unknown risks and uncertainties. Although the Company believes that
the expectations reflected in these forward-looking statements are reasonable,
they do involve assumptions, risks, and uncertainties, and these expectations
may prove to be incorrect. Investors should not place undue reliance on these
forward-looking statements, which speak only as of the date of this news
release. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of a variety of
factors, including those discussed in the Company's periodic reports that are
filed with the Securities and Exchange Commission and available on its website
(www.sec.gov). All forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by these
factors. Other than as required under the securities laws, the Company does not
assume any duty to update these forward-looking statements.
Company Contact
Brent Suen, CEO
Weyland Tech Inc.
Media & Investor Contact
Ronald Both or Grant Stude
CMA
Tel (949) 432-7566
Weyland Tech
(OTCQB:WEYL) is a featured fintech stock on
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