Breaking #Fintech News:
Weyland Tech (OTCQX: $WEYL) Reports Q3 2019 Results; Revenue at Record $9.0
Million; @weylandtechinc
NEW YORK - November 15, 2019 (Investorideas.com
Newswire) Weyland Tech, Inc. (OTCQX:
WEYL), a growing global provider of m-Commerce and
fintech business enablement solutions with its CreateApp™ Platform-as-a-Service (PaaS),
reported results for the third quarter ended September 30, 2019. All quarterly
comparisons are to the same period in 2018 unless otherwise noted.
Read this in full at https://www.investorideas.com/CO/WEYL/news/2019/11151Q3-Revenue.asp
Q3 2019 Highlights
·
Revenue, comprised of recurring subscription fees,
totaled a record $9.0 million, up 26% from the previous quarter and up 7% from
the year-ago quarter.
·
Net loss improved 35% from the previous quarter and
46% from the year-ago quarter to a loss of $1.1 million or $(0.01) per share.
·
Turned adjusted EBITDA positive during the final
month of the quarter (see definition of this non-GAAP term, below.)
·
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.
·
Partnered in the launch of AtozGo™, a short distance
food delivery service in Jakarta, Indonesia, followed by joining forces
with Grab, the leading online-to-offline mobile platform in Southeast Asia, to
market the service. AtozGo 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 three months
since launch, lunchtime deliveries have scaled to more than 10,000 per day for
35,000 customers.
·
Appointed Sim Farar and Andre
Peschong to the company's advisory board. Farar's 30
years of experience in both public and private sectors, along with Peschong's
more than 25 years of senior management and capital markets experience, will
provide the board with important insights and guidance as it pursues its plans
for organic and acquisitive growth.
·
Raised gross proceeds of approximately $6.4 million
In a private placement offering.
·
Cash and cash equivalents totaled $5.8 million at
September 30, 2019.
Subsequent Events
Subsequent to the end of the third quarter, Weyland
acquired 31% beneficial ownership in the owner and operator of AtozGo as well
as the AtozPay™ mobile
payment platform that powers AtozGo transactions.
Management Commentary
"In Q3, our topline performance was driven by
growth in CreateApp subscription fees, which was due to greater adoption of our
CreateApp Platform-as-a-Service by SMBs in our existing markets," said
Brent Suen, president and CEO of Weyland Tech.
"Driven primarily by our highly-productive
channel partners, the increased adoption included new customers as well as
existing customers subscribing to additional features and modules. These
results helped us turn positive in terms of adjusted EBITDA in the last month
of the quarter. This momentum has continued into the fourth quarter, keeping us
on track for another year of record growth and shareholder value creation.
"We recently exercised our option to acquire
31% beneficial ownership of PT Weyland Indonesia Perkasa (WIP), owner and
operator of the fast-growing AtozPay and AtozGo platforms.
AtozGo's unique runner-based approach to urban food delivery is quickly
capturing a huge untapped market.
"Jakarta's population of 30 million, with
another 3.5 million commuting daily, made the city an ideal location to launch
the AtozGo delivery service. Within three months from launch, AtozGo has
attracted more than 35,000 customers and continues to grow at a parabolic rate.
We expect this rapid ramp up to pave the way for greater visibility with
potential acquirers, like other major food delivery service providers who
traditionally operate in areas that require motorized delivery. Valuations of
app-based food delivery services average $330 per user, implying a current
stand-alone valuation of AtozGo of more than $10 million.
"AtozPay's consumer-facing fintech solution
supports users on our CreateApp PaaS platform by providing e-payment
capabilities. Given the strong growth in AtozPay and AtozGo, along with the
participation with major partners like Grab, we believe our new ownership
position substantially enhances Weyland Tech's shareholder value.
"For Weyland, we're seeing more than $32
million in recurring revenue on a trailing 12-month basis. The market valuation
for a company like ours with a 100% subscription-based recurring revenue stream
should garner a several times multiple in its price-to-revenue ratio, rather
than merely a fraction as it does today.
"In fact, publicly traded SaaS and PaaS
companies typically trade on average at around 10x revenue, with other microcap
comparables trading around 4x revenue on average. Companies with software
subscription-based models attract higher multiples due to their ‘stickier,'
higher-margin customer engagements that provide greater transparency into
revenue and profitability.
"Given these factors, it appears that the
market price of our stock does not reflect our financial performance, the
quality of our revenue, and the strong prospects for our growth to accelerate
over the coming quarters. However, we believe as we continue to execute on our
growth plans and raise our profile in U.S. investment community, our valuation
will eventually follow suit. This conclusion supported my decision in October
to personally acquire nearly 100,000 shares of WEYL off the open market, with
an eye to making additional purchases in the future.
"In terms of business growth and expansion, we
will continue to focus on supporting our channel partners in enhancing platform
offerings. We expect margins to improve as we introduce more value-added
services and increase our revenue base. We are also continuing to evaluate a
number of attractive merger and acquisition opportunities, including potential
strategic entry points for bringing our award winning CreateApp platform to the
U.S. market which is becoming increasingly mobile-centric.
"Given our momentum and proven differentiated
products and strategies addressing large and growing global markets, we remain
on track for another year of double-digit growth and a strong start to the new
year."
Q3 Financial Summary
Revenue increased 7% to a record $9.0 million in
the third quarter of 2019, as compared to $8.4 million in the same period last
year. The increase was due to service revenue from customers in targeted
emerging markets at lower price points.
Gross profit was $1.6 million or 17.7% of revenues
as compared to $7.4 million or 87.7% of revenue in the year-ago quarter. The
decrease was primarily due to a reclassification of certain R&D and sales
and marketing expenses to be included in cost of services, which was enacted in
the first quarter of 2019. Weyland believes the reclassification represents a
more conservative approach given that its PaaS business model uses distribution
partners to sell its services.
Total operating expenses decreased to $2.7 million
from $9.4 million in the same year-ago period. The decrease was primarily due
the reclassification of certain expenses to cost of services.
General and administrative (G&A) expenses
increased 52% to $1.6 million in the third quarter 2019 from $1.0 million in
the same year-ago quarter. G&A expenses in the third quarter of 2019
included $286,000 in stock-based compensation as compared to $257,000 in the
same year-ago quarter.
Research and development expense decreased 75% to
$1.1 million in the third quarter of 2019, as compared to $4.5 million in the
same year-ago period. Sales and marketing expenses in the third quarter of 2019
decreased to zero as compared to $3.8 million in the year-ago quarter. The
decreases were primarily due to the reclassification of certain expenses to be
included in cost of services.
Net loss improved to $1.1 million or $(0.01) per
basic and diluted share from a net loss of $2.0 million or $(0.05) per basic
and diluted share in the same year-ago period.
At September 30, 2019, cash, cash equivalents and
marketable equity securities totaled $5.8 million, compared to $5.3 million on
June 30, 2019. The increase was primarily the result of proceeds from an equity
offering.
Nine Month Financial Summary
Revenue increased 43% to a record $24.6 million in
the first nine months of 2019, as compared to $17.3 million in the same period
last year. The increase was due to service revenue from customers in targeted
emerging markets at lower price points.
Gross profit decreased 71% to $4.4 million or 17.7%
of revenue compared to $15.2 million or 87.7% of revenue in the year-ago
quarter. The decrease was primarily due to a reclassification of certain
research & development and sales & marketing expenses.
Total operating expenses decreased 62% to $7.2
million from $18.7 million in the same year-ago period. The decrease was
primarily due to the aforementioned reclassification of certain expenses.
General and administrative expenses increased 35%
to $3.5 million in the third quarter 2019 from $2.6 million in the same
year-ago quarter. G&A expenses in the first nine months of 2019 included
$1.5 million in stock-based compensation as compared to $1.2 million in the
first nine months of 2018.
Research and development expense decreased 60% to
$3.2 million in the third quarter of 2019, as compared to $8.1 million in the
same year-ago period. Sales and marketing expenses for the nine months of 2019
were $390,000, as compared to $7.8 million in the same year-ago period. The
decreases were primarily due to a reclassification of certain R&D and sales
and marketing expenses.
Net loss was $2.8 million or $(0.06) per basic and
fully diluted share, compared to net loss of $3.6 million or $(0.13) per basic
and fully diluted share in the same year-ago period.
Conference Call
Weyland management will host a conference call to
discuss its third quarter 2019 results tomorrow morning, followed by a question
and answer period.
Date: Friday, November 15, 2019
Time: 10:00 a.m. Eastern time (7:00 a.m. Pacific
time)
Toll-free dial-in number: 1-888-394-8218
International dial-in number: 1-323-701-0225
Conference ID: 7147694
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 7:30
p.m. Eastern time on the same day through November 29, 2019, as well as
available for replay via the Investors section of the Weyland website at www.weyland-tech.com/ir.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 7147694
About Weyland Tech
Weyland Tech, Inc. operates as a Fintech focused
company and 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, Weyland 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.
The company's subsidiary, Weyland Indonesia Perkasa
(WIP), operates AtozPay and
AtozGo. The AtozPay mobile payments platform serves the burgeoning m-Commerce
and e-Payment markets in Indonesia, the world's fourth most populous
country. AtozGo is
a fast-growing short-distance food delivery service in Jakarta, Indonesia.
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 EBITDA 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 expects to include adjusted EBITDA in
its future financial reporting, which will include a reconciliation to the
nearest GAAP measure. For the third quarter 2019, the company has reported that
it believes it turned positive during the last month of the quarter, but it is
not providing a reconciliation to nearest GAAP measure in this press release
since it would require unreasonable efforts to report a reconciliation of the
entirely of this information for the singular month and for the anticipated
reporting of adjusted EBITDA in future periods.
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 continued growth of the
e-commerce 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.
Weyland Tech Inc.
Media & Investor Contact
SOURCE: Weyland Tech, Inc.
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