Weyland Tech Reports Revenue up 76% to Record $15.0 Million in Q1 2020
NEW YORK, May 15, 2020 (GLOBE NEWSWIRE) — Weyland Tech, Inc. (OTCQX: WEYL), a leading global provider of mCommerce platform-as-a-service (PaaS), reported results for the first quarter ended March 31, 2020. All quarterly comparisons are to the same year-ago period unless otherwise noted.
Q1 Financial Highlights
- Revenue increased 76% to a record $15.0 million. The increase was due to a $3.3 million or 38% increase in subscription revenue generated by the company’s CreateApp B2B mCommerce platform and $3.2 million contributed by its new Push Interactive subsidiary acquired on January 8, 2020.
- Consolidated gross profit increased 75% to $2.6 million or 17.7% of consolidated revenue.
- Cash and cash equivalents and restricted cash totaled $4.0 million at March 31, 2020.
Q1 2020 Operational Highlights
- Acquired the assets and operations of Push Holdings to launch mobile apps in North America leveraging Weyland’s mCommerce and mobile fintech solutions, as well as offer Push’s eCommerce products and services globally.
- Partnered with Indosat Ooredoo, Indonesia’s second largest telecom provider, to launch a nationwide marketing campaign for CreateApp in Indonesia.
- Launched CreateApp in Taiwan to reach the more than 1.3 million small-and-medium sized businesses (SMBs) across the country and help them easily establish a mobile presence.
- Partnered with Medias-Com’S SA, a Swiss company specializing in media and communication in order to launch its CreateApp mobile commerce platform-as-a-service in Italy.
- Increased adoption of CreateApp mobile app solution for small and medium-sized businesses, which included existing customers subscribing to additional features and modules. The CreateApp user base, comprised of businesses across Southeast Asia, grew to more than 390,000 during the quarter.
“Our record topline performance in the first quarter was primarily due to the continued adoption of our CreateApp Platform-as-a-Service by SMBs, plus a nearly full quarter of revenue generated from Push Interactive that we acquired on January 8th,” said Weyland Tech CEO, Brent Suen. “CreateApp and Push both provide ‘e-Commerce enablement,’ with these services now becoming more important than ever for businesses and brands in an increasingly mobile world.
“Key to our acquisition of Push is how it provides brands for which CreateApp can launch mobile Apps globally. Push’s eCommerce platform is also synergistic to our m-Commerce technologies deployed in Indonesia, including AtozGo, our hyper-local, ‘foot-powered’ food delivery service operating 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. We still see AtozGo hitting 1 million registered users by year-end despite the impact of COVID-19 on businesses given the service’s recent expansion into the residential market. The residential launch was long planned but was accelerated due to the stay-at-home orders and shift to working from home.
“As with CreateApp, our primary focus with AtozGo has always been on user and transaction growth, and this strategy has been highly successful. As expected, our unique approach with AtozGo, powered by an innovative mobile app, has now attracted the attention of larger delivery service providers who traditionally use only motorized delivery. We are now actively involved in discussions with a potential buyer or major partner for AtozGo.
“The valuations of app-based food delivery services are highly favorable. Whether it’s an Uber Eats or GrubHub, or even similar services in Southeast Asia like GrabFood or Go-Food, the average value per user is pegged at around $330. For AtozGo, this would imply a stand-alone valuation of around $33 million, and that is just as of today. If we hit our goal of 1 million users by year-end, the valuation would come in at 10 times that or nearly $330 million.
“SMBs in the markets we serve have become increasingly aware that selling online is important and worth a premium to use a service like CreateApp to sell more. To better serve our target customers and optimize our price points, we realigned our CreateApp platform into 10 modules, reducing it from 70. So, now within each of these 10 modules are multiple functions we previously offered separately. We discovered that by offering a more streamlined set of modules, with each having greater functionality, it makes it easier to sell subscriptions to the platform and charge an overall higher price. We see this also supporting greater gross margins on these subscription-based revenues.
“However, over the near term, with the shutdowns continuing in Southeast Asia due to COVID-19, we’ve begun to see the impact on small businesses in a region that represents virtually all of our current CreateApp customers. Like many subscriber-based businesses are doing these days, we have the flexibility give our distributors, through whom we primarily sell CreateApp, the flexibility to selectively extend CreateApp subscriptions from 30 to 90 days without charge.
“As we all know, once a customer is lost, it is much more difficult to bring them back. So, we believe this is not only good for customers but also for Weyland, as sustaining our customer base is key. Over the short term, we will incur some special COVID-19 related charges related to reduced service revenues. The full amount we cannot determine until the end of the quarter or year. But over the longer term, we believe supporting our customers and distributors in this way will provide a stronger foundation for future growth.
“The impact of COVID-19 on our Push Interactive business in the U.S. has been considerably less than for CreateApp. In fact, we recently saw two of Push’s larger and higher profile customers step up their business activity. These major customers also tend be timelier with their payments, reducing our accounts receivable.
“We are continuing to explore how we can leverage CreateApp to build native mobile apps for Push brands and enterprise customers in the U.S., as well as synergic ways we can drive growth across our global operations. We believe Push’s data-driven strategies can help us grow its business and reach $13 million to $15 million in revenue in 2020, with margins improving to approximately 20%.
“Our planned NASDAQ up-listing is progressing, but like many things these days, has been slowed by the distraction of the pandemic. At this point, we still have little indication of timing, but are also considering alternatives that have come to us unsolicited. We hope to provide more details as these progress. Clearly, from a capital markets perspective, there is a lot of unrealized or unrecognized value in Weyland Tech.
“Looking ahead, we remain optimistic about the continued demand for our products and services and look forward to Weyland hitting key milestones and becoming a more commercially successful, profitable business. While we expect Q2 to have its challenges due to the continuing global pandemic, we see the second half of the year trending back up as Southeast Asia opens up, and as our new operations in the U.S. help us transition to a more valuable, data-driven organization.”
Q1 2020 Financial Summary
Revenue increased 76% to a record $15.0 million in the first quarter of 2020, as compared to $8.5 million in Q1 2019. The increase was due to increased service income and inclusion of $3.2 million from its new Push Interactive subsidiary acquired in January 2020.
Gross profit increased 75% to $2.6 million or 17.7% of revenue in Q1 2020 compared to $1.5 million or 17.7% of revenue in the same year ago period.
Total operating expenses increased 256% to $5.5 million in Q1 2020 from $1.5 million in the same year ago period. The increase was primarily due to inclusion of $1.0 million in G&A expenses from its new Push Interactive subsidiary, as well as due to an increase in R&D, depreciation and amortization, and sales and marketing.
Net loss was $2.8 million or $(0.24) per basic and fully diluted share, compared to net loss of $27,000 or $(0.00) per basic and fully diluted share in the same year-ago period.
At March 31, 2020, cash and cash equivalents totaled $3.0 million, restricted cash of $1 million, compared to cash and cash equivalents of $3.0 million at December 31, 2019. The increase was primarily the result of additional cash as a result of the Push acquisition.
Weyland CEO Brent Suen will host a conference call later today to discuss the company’s first quarter 2020 results, followed by a question and answer period. He will be joined by the company’s CFO Lionel Choong, as well as Push Interactive CFO Rod Granero and Push Interactive Chief Technology Officer Tom Furukawa.
Date: Friday, May 15, 2020
Time: 11:00 a.m. Eastern time (8:00 a.m. Pacific time)
Toll-free dial-in number: 1-800-289-0438
International dial-in number: 1-323-794-2423
Conference ID: 1704393
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 2:00 p.m. Eastern time on the same day through May 29, 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: 1704393
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.
Earlier this year, Weyland completed the acquisition of the Minneapolis-based eCommerce technology company, Push Interactive. Push provides an eCommerce marketing solution for enterprises and major U.S. brands. For more information, visit weyland-tech.com.
About AtozPay™ and AtozGo™
Through Weyland Tech’s minority-owned subsidiary, Weyland Indonesia Perkasa (WIP), the company operates AtozPay™ and AtozGo™. The AtozPay mobile payments platform serves the burgeoning mCommerce and e-Payment markets in Indonesia, the world’s fourth most populous country. AtozGo is a fast-growing provider of short-distance food delivery and home services from local establishments operated in Jakarta, Indonesia. For more information, visit atozpayindonesia.com.
About Push Interactive
The e-Commerce platform of Weyland’s Push Interactive subsidiary features comprehensive customer acquisition capabilities, highly productive media and channel strategies, well-tuned product promotion and messaging, and sales funnel development and optimization. The direct-to-consumer platform provides an end-to-end solution for SMBs and major brands, allowing these organizations to dramatically increase online revenue while lowering the cost of customer acquisition and order fulfillment. Post-sale, Push supports fulfillment, customer relationship management, and further monetization through re-engagement and remarketing toolsets that enhance customer lifetime value (LTV). For more information about Push Interactive, visit www.pushint.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.
Brent Suen, CEO
Weyland Tech Inc.
Media & Investor Contact
Ronald Both or Grant Stude
Tel (949) 432-7566
WEYLAND TECH, INC.
Consolidated Balance Sheets
|March 31||December 31|
|Intangible assets, net||8,423,615||611,598|
|Property and equipment, net||213,485||–|
|Total non-current assets||13,418,308||611,598|
|Amount due from associate||3,750,700||2,825,700|
|Other amount recoverable||49,550||549,550|
|Prepayment, deposit and other receivables||1,689,245||1,641,684|
|Financial assets held for resale||2,820,625||2,730,363|
|Cash and cash equivalents||2,996,667||2,972,649|
|Total current assets||13,591,923||10,719,946|
|Liabilities and Stockholders’ Equity|
|Accruals and other payables||544,279||298,453|
|Deposits received for shares to be issued||1,407,506||–|
|Amount due to director||77,500||77,500|
|Total current liabilities||2,423,732||375,953|
|Total non-current liabilities||1,990,000||500,000|
|Common stock, $0.0001 par value, 250,000,000 shares authorized, 12,353,630 and 111,304,253 shares issued and outstanding as of March 31, 2020 and December 31, 2019 respectively||16,060||11,130|
|Additional paid-in capital||58,725,046||58,058,118|
|Accumulated deficit carried forward||(50,426,750||)||(47,613,657||)|
|Total stockholder’s equity||22,596,499||10,455,591|
|Total liabilities and stockholders’ equity||$||27,010,231||$||11,331,544|
WEYLAND TECH, INC.
Consolidated Statements of Operations
|For the three months ended
|Cost of Service||12,336,262||6,984,427|
|General and administrative||3,202,042||640,921|
|Research and development||1,757,351||867,715|
|Sales and marketing||53,015||–|
|Depreciation and amortization||449,624||25,483|
|Total Operating Expenses||5,462,032||1,534,119|
|(Loss) from Operations||(2,813,092||)||(26,854||)|
|Net (Loss) before income tax||(2,813,092||)||(26,854||)|
|Income tax (Corporate tax)||–||–|
|Net (loss) profit per common share – basic and fully diluted||(0.2430||)||(0.0007||)|
|Weighted average number of basic and fully diluted common share outstanding||11,577,069||38,835,146|