Weyland Tech Reports Revenue up 86% to Record $10.0 Million in Q4 2019, and up 53% to Record $34.6 Million for the Full Year
NEW YORK, March 30, 2020 (GLOBE NEWSWIRE) — Weyland Tech, Inc. (OTCQX: WEYL), 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.
- 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.
“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.
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.
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.
Brent Suen, CEO
Weyland Tech Inc.
Media & Investor Contact
Ronald Both or Grant Stude
Tel (949) 432-7566
WEYLAND TECH, INC.
Consolidated Balance Sheets
|December 31||December 31|
|Intangible assets, net||611,598||713,531|
|Total non-current assets||611,598||713,531|
|Amount due from Associate||2,825,700||862,000|
|Other amounts recoverable||549,550||–|
|Prepayment, deposit and other receivables||1,641,684||3,181,651|
|Financial Assets held for resale||2,730,363||–|
|Cash and cash equivalents||2,972,649||731,355|
|Total current assets||10,719,946||4,775,006|
|LIABILITIES AND STOCKHOLDER’S EQUITY|
|Accruals and other payables||298,453||283,795|
|Amount due to director||77,500||77,500|
|Total current liabilities||375,953||379,295|
|Total non-current liabilities||500,000||–|
|Common stock, $0.0001 par value, 250,000,000 shares authorized, 111,304,253 and 36,915,343 shares issued and outstanding as of December 31, 2019 and 2018, respectively||11,130||3,692|
|Additional paid-in capital||58,058,118||46,177,521|
|Accumulated deficit brought forward||(47,613,657||)||(41,071,971||)|
|Total stockholder’s equity||10,455,591||5,109,242|
|Total liabilities and stockholders’ equity||$||11,331,544||$||5,488,537|
WEYLAND TECH, INC.
Consolidated Statements of Operations
|For The Years Ended
|Cost of Service||28,411,869||18,643,914|
|Depreciation and amortization||101,933||268,600|
|Research and development||6,412,998||4,773,349|
|Sales and Marketing||389,610||–|
|General and administrative||5,918,660||2,880,387|
|Total Operating Expenses||12,823,201||7,922,336|
|(Loss) from Operations||(6,514,090||)||(3,898,677||)|
|Impairment loss on associate||–||(200,000||)|
|Net (Loss) before income tax||(6,514,090||)||(4,098,677||)|
|Income tax (Corporate tax)||27,596||–|
|Net (Loss) for the year||$||(6,541,686||)||$||(4,098,677||)|
|Net (loss) profit per common share – basic and fully diluted:||(0.1147||)||(0.1423||)|
|Weighted average number of basic and fully diluted common shares outstanding||57,016,221||28,809,276|