Logiq Reports Q3 2020 Results, with Nine Month Revenues up 27% to $31.3 Million
NEW YORK, Nov. 16, 2020 (GLOBE NEWSWIRE) -- Logiq, Inc. (OTCQX: LGIQ) (formerly Weyland Tech), a global provider of award-winning eCommerce and Fintech solutions, reported results for the three and nine months ended September 30, 2020. All quarterly and nine-month comparisons are to the same year-ago period unless otherwise noted.
Q3 2020 Operational Highlights
“Q3 was another exciting and event-filled quarter for Logiq, which included the roll out of a whole new look and brand,” commented company president, Brent Suen. “Our new name reflects the transformation of our company that began at the beginning of this year with the acquisition of our fast-growing eCommerce technology platform, now branded DataLogiq.
“Our overall offerings now extend from mobile commerce and fintech solutions for small- and medium-sized businesses or SMBs, to AI-powered, SaaS-based, customer acquisition for major enterprises and brands.
“Our customer relationships now range from hundreds of thousands of SMBs around the world to publicly traded Fortune 500 companies. Our marquee clients now include Cox Automotive (owners of Kelly Blue Book and Auto Trader), Home Advisor, QuinStreet and Sunrun, and the recent addition of an eCommerce brand Purple, the creator of the renowned Purple Mattress.
“The transformation also involved the streamlining during the third quarter of our various brands and business units into two business segments: DataLogiq and AppLogiq.
“DataLogiq’s data engine uses proprietary methodologies and AI systems to deliver valuable consumer insights that can dramatically enhance the effectiveness, reach, and ROI of online marketing spend for enterprises and major brands. Alongside DataLogiq is our new Fixel AI technology unit that offers simplified online marketing with critical privacy features.
“Our AppLogiq mobile Commerce platform-as-a-service enables small-and-medium sized businesses (SMBs) worldwide to easily create and deploy a native mobile app for their business without technical knowledge or background. Now as part of our AppLogiq mobile platform is our PayLogiq fintech and GoLogiq delivery services that have become magnets of interest by potential partners due to the deep consumer data both have been acquiring since their inception.
“A few weeks ago, we were selected to provide mobile microlending and related services to 48 million Indonesians and more than 600,000 businesses in an exclusive strategic alliance with the country’s social security program provider, KMSB. To put the opportunity in perspective, through our Indonesian operations, we currently have 36,000 SMBs and 130,000 individual customers. But we’ve now have gained access to an exponentially larger base of new customers who are a captive audience of KMSB.
“The opportunities for new revenue streams from microlending, mobile payments, and our eCommerce solutions with this enormous user base are also phenomenal, potentially generating tens of millions of dollars of revenue annually once the alliance with KMSB is fully launched. As we continue to attract additional major global partners like KMSB, ShopeePay and TechMahindra, we see ourselves at just the beginning of a long-term acceleration in this key segment of our global business operations.
“This new diversification of our revenue sources has allowed us to weather the pandemic storm perhaps better than others. In emerging markets where we’ve had a specific focus with AppLogiq, the micro and small businesses there pay a monthly subscription that represents a fair percentage of their monthly income. Because of the economic impact of COVID-19, for many, it became difficult to justify the expense without measured results from their nascent mCommerce activities. So, we made the decision to provide a low-no-cost solution to them for 1-3 months to keep them on board. This has naturally impacted our results over the near-term, but we believe it will be good for long term growth.
“Such proactive steps demonstrate how our Logiq teams have remained execution focused to mitigate the effects of the global pandemic on our business. For AppLogiq, this has also meant using these challenging times as an opportunity to transition away from lower margin service offerings marketed through distributors to more direct, B2B, higher margin business. Under this new direction, we see AppLogiq’s gross margins increasing from around 17% to 35% - 40%, which is more in line with a true platform-as-a-service offering.
“As we get past the pandemic with the advent of the vaccine that is reportedly rolling out over the next few months, 2021 could well be our most profitable year for AppLogiq, especially as we extend its direct market reach through the new partnerships we’ve announced over last few months. For DataLogiq, adapting to the changes in the marketplace has meant introducing a new SaaS revenue stream per the recent acquisition of Fixel AI. DataLogiq’s ability to adapt to changing environments and consumer demands has helped it navigate and overcome today’s unprecedented challenges.
“Our planned listing on the NEO exchange continues well on course. NEO’s investor-first approach to trading represents the next evolution in capital market transactions, and it currently accounts for 30% of the total trading volume in Canada. Why Canada? Canada is home to one of our best peers, Shopify, and just about every individual or institutional investor there is familiar with SHOP and has participated in its dramatic rise.
“As a global, fast-growing company, our listing on NEO presents a great opportunity to increase awareness of Logiq in the North American investment community. A listing on the NEO also presents an opportunity to eventually dual-list our stock on the NYSE American through a special relationship NEO has with the NYSE.
“The second half of this year is appearing to be a pivotal period for us overall, as we begin transitioning away from lower margin services to focus on higher margin offerings and opportunities. We have executed well by adjusting and finding opportunities under the pandemic and believe this demonstrates the resiliency of our business model.
“In all, and despite a tumultuous year of challenges and setbacks created by the global pandemic, we have been able to transform Logiq into a global provider of a full range of eCommerce solutions for companies of all sizes. This has put us on course for strong growth in 2021 and beyond with more diversified, high-margin revenue streams derived from the strongest segments of our industry. Combined with our DataLogiq and Fixel acquisitions, we remain on track to end 2020 with record revenue at more than $38 million, and with margins expanding across all business segments.”
Q3 2020 Financial Summary
Revenue decreased 22% to a $7.0 million in the third quarter of 2020, as compared to $9.0 million in the same year-ago quarter, with the decrease largely due to the impact of COVID-19.
The company’s AppLogiq mCommerce platform-as-as-service (PaaS) contributed $3.2 million or 45.6% of consolidated revenue in the third quarter, which decreased 64% from $9.0 million or 100% of consolidated revenue in the same year-ago period. The decrease was primarily due to the impact of the COVID-19 pandemic, and the resulting lockdown of commercial businesses and stay-at-home orders. The company has focused on its direct sales business as part of its plan to increase its margin profile and align with other PaaS companies. As part of this focus, the company is expected to have lower top-line revenue, but higher margins on a going-forward basis.
Gross profit decreased 30% to $1.1 million or 15.8% of revenue in Q3 2020 from $1.6 million or 17.7% of revenue in the same year ago quarter. The decrease in gross profit and margin resulted primarily from the aforementioned impact of the COVID-19 pandemic.
Total operating expenses increased 47% to $4.0 million in Q3 2020 from $2.7 million in the same year ago period. The increase was primarily due to the addition of $1.0 million in general and administrative expenses for the DataLogiq operations acquired in January, and an increase in sales and marketing expenses, which was partially offset by a reduction in general and administrative expenses related to the AppLogiq platform.
Net loss was $2.9 million or $(0.23) per basic and fully diluted share in Q3 2020, compared to net loss of $1.1 million or $(0.19) per basic and fully diluted share in the same year-ago period.
At September 30, 2020, cash and cash equivalents totaled $4.8 million, compared to cash and cash equivalents of $3.9 million at June 30, 2020. The increase was primarily the result of proceeds from financing activities.
9M 2020 Financial Summary
Revenue increased 27% to a record $31.3 million for the first nine months of 2020, as compared to $24.6 million in the same year-ago period. The increase in revenues for the nine-month period was attributed to the revenue contributions from DataLogiq of $10.7 million.
Gross profit increased 14% to $5.0 million or 15.9% of revenue for first nine months of 2020 compared to $4.4 million or 17.7% of revenue in the same year ago period.
Total operating expenses increased 68% to $12.1 million for first nine months of 2020 from $7.2 million in the same year ago period. The increase was primarily due to an increase in general and administrative expenses to $6.3 million compared to $3.5 million in the same year ago period.
Net loss was $7.4 million or $(0.60) per basic and fully diluted share in the first nine months of 2020, compared to net loss of $2.8 million or $(0.69) per basic and fully diluted share in the same year-ago period.
Logiq management will host the call, followed by a question and answer period.
Date: Monday, November 16, 2020
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 4:00 p.m. Eastern time on the same day through Monday, November 30, 2020, as well as available for replay via the Investors section of the Logiq website at weyland-tech.com/ir/.
Toll-free replay number: 1-844-512-2921
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