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Weyland Tech Reports Q3 2019 Results; Revenue at Record $9.0 MillionNEW YORK, Nov. 15, 2019 (GLOBE 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. Q3 2019 Highlights
Subsequent Events
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. 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. 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 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 About Weyland Tech 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. For more information, visit www.weyland-tech.com. About the Use of Non-GAAP Financial Measures 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 Media & Investor Contact
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