VANCOUVER, B.C. (April 24, 2020) – Datable Technology Corp. (TSXV: DAC) (OTCQB: TTMZF) (the “Company” or “Datable” or “DTC”), a software company that provides a marketing automation platform called PLATFORM³ to global consumer brands, is pleased to announce its financial results for Q4 2019 and the year ended December 31, 2019 (“Fiscal 2019”).
In 2019, the Company achieved the following milestones:
● 38 signed license agreements, including existing multi-year agreements carried forward from prior years, to provide PLATFORM³ to leading Consumer Packaged Goods (CPG) brands, representing close to $2.6 million in contracted revenues, with approximately 60% recognized as revenue in 2019. About 70% of the license agreements were engaged from returning clients.
● Revenue increased by 10% to $1,560,970, compared to revenue for the year ended December 31, 2018.
● DTC launched version 3.0 of PLATFORM³ which included new modules that extended and deepened its differentiation in the market by launching a break-through features on PLATFORM³ – Dynamic Messaging and Rewards (DMR). This feature is built on an Artificial Intelligence (AI) framework and empowers brands to deploy omnichannel communications, retargeting and contextual rewards to induce consumer purchases based on their previous and ongoing purchase behavior and brand engagement. DMR transforms PLATFORM3 into a self-regulating continuous feedback loop for ongoing sales. (See press release dated Feb. 14, 2020)
● DTC commenced development of flexxi Rewards Network – a web portal that enables opt-in consumers to earn rewards completing activities such as purchasing CPG products, viewing valuable content posted by CPG brands, sharing content on Social media and referring friends. CPG brands will pay DTC for access to the the consumers. The flexxi Rewards Network is built using Datable’s PLATFORM³ technology.
The Company is also pleased to provide the following 2020 updates:
● As of year-to-date in 2020, DTC has signed 15 new license agreements this year, which together with existing license agreements signed in prior periods represent contracted revenues of approximately $2.2 million with 60% expected to be recognized in 2020. About 95% of the new license agreements are with returning customers.
● Datable previously provided guidance that revenue will grow by over 100% in 2020 with expenses increasing by about 10%, compared to 2019 (see press release dated February 5, 2020). Datable expects gross margin to remain at about 70% in 2020. Datable’s progress in year-to-date 2020 has increased the Company’s confidence in this guidance.
● To date, COVID 19 has not materially impacted any of the Company’s long-term license agreements or its ability to deliver its services to customers. Nor has there been any significant negative impact on discussions regarding the expansion of existing license agreements and new agreements under discussion. However, Datable is monitoring the potential and immediate impact of COVID-19 and working with customers and service providers to mitigate issues that may emerge. (See press release dated March 16, 2020).
● Most of Datable’s large customers are leading consumer goods companies that provide staples including food, beverages, and household products which are expected to remain in demand during the COVID 19 crisis. In addition, many of Datable’s license agreements and marketing programs extend into late 2020 for back-to-school and holiday shopping promotions, and into 2021 as long-term loyalty programs.
● DTC has several annual agreements where PLATFORM³ hosts an ongoing digital loyalty and rewards program. DTC is generally paid an annual license fee plus transactions fees based on the number of times consumers validate purchases using PLATFORM³. The $2.2 million in contracted revenues noted above only accounts for license and service fees and does not include any transaction fees.
“In 2019 we continued to grow our core SaaS business signing multiple Fortune 500 companies as new customers and capturing more than 70%, compared to only 50% in 2018, of revenue from returning clients. The Company also continued work to develop its own Consumer Loyalty and Rewards Portals – the flexxi Rewards Network. These Portals provide registered consumers with valuable rewards for engaging with brands and completing brand activities. The flexxi Rewards Network will enable Datable to begin collecting consumer data and expand its’ business model to include data and transactional revenue.” said Robert Craig, DTC’s CEO. “Building communities of consumers and owning the relationships and subsequent data will be a big driver of revenue in the coming years. Portals on the flexxi Rewards Network are built on top of Datable’s proprietary PLATFORM³ technology which dramatically reduces costs and time to market for these properties.”
Results of Operations:
Revenue for year ended December 31, 2019 increased by 10% to $1,560,970 compared with the same period in 2018 due to increase in average contract value and transactional revenues compared to that incurred in 2018. The Company’s PLATFORM³ product is an integrated suite of digital marketing applications sold as SaaS for short-term promotions or on an annual subscription basis with recurring revenues. Revenue in the period reflected recognition of revenue from previous year contracts and new sales of the PLATFORM³ product offering.
Gross profit for Fiscal 2019 increased by 26% to $1,055,827, compared to Fiscal 2018. Gross margin as a percentage of revenues was 68% in 2019, compared to 59% in the same period in 2018. Revenues are comprised of a combination of higher margin sales of PLATFORM³, the Company’s proprietary Software as a Service product combined with some lower margin third party services.
The increase in gross margin as a percentage of revenue for the year ended December 31, 2019 compared to the same period in 2018 was mainly due to improved resource allocation of product deliveries and margin of project design.
DTC launched an API connection to third party digital rewards platforms in prior years. This service enables DTC clients to offer digital rewards such as gift cards, movie tickets and virtual visas to incentivize purchase and purchase frequency. DTC purchases these rewards on behalf of the Company’s clients and charge a service fee for receipt validation along with the amount of rewards purchased. Cost of sales also includes the cost of servers to host PLATFORM³, and project management and customer support staff.
General and administrative expenses for Fiscal 2019 increased to $1,462,359 and compared to $1,161,376 for Fiscal 2018. The increase for the year 2019 was mainly due to increase in one-off settlement of a resigned executive, professional services, corporate consultancy and corporate finance service contracts engaged in 2019 compare to the same period in prior year. For the year ended December 31, 2019, general and administrative expenses consisted primarily of $741,380 respectively in office and other overhead expenses that include investor relations, corporate advisory fees, and regulatory filing fees, $135,443 in wages and salaries, $438,608 in consulting fees, and $146,928 in professional fees.
Sales and marketing expenses for Fiscal 2019 was $550,010 respectively compared to $760,872 for Fiscal 2018. The decrease for year ended December 31, 2019 was mainly due to decreased wages and salaries and consultancy paid in connection with advertising and marketing activities.
Research and development expenditures for Fiscal 2019 was $879,534 compared to $635,558 for Fiscal 2018. The increase in research and development expenses for year ended December 31, 2019 was related to improving PLATFORM³ and developing new platform flexxi. Research and development expenses may continue to increase in the future as the Company seeks to evolve and improve PLATFORM³ and flexxi, as well as to invest in creating new technology and products that will enhance the Company’s value proposition to customers and provide additional revenues. Research and development expenses include wages and salaries and consulting fees.
Net and comprehensive loss for Fiscal 2019 was $2,214,142 compared to $2,178,847 for Fiscal 2018. This decrease in net loss for year ended December 31, 2019 was mainly due to the decrease of share-based compensation and sales and marketing expenses, net of the increase in research and development spending and general and administrative expenses.
For further information, please contact:
Datable Technology Corp.
Chief Executive Officer
About Datable Technology Corp.
Datable has developed a proprietary, mobile-based consumer marketing platform – PLATFORM³ – that is sold to global Consumer Packaged Goods (“CPG”) companies and consumer brands. PLATFORM³ is delivered as a subscription service (Software as a Service model) and used by CPG companies to engage consumers, reward purchases and collect valuable consumer data. PLATFORM³ incorporates Artificial Intelligence and Machine Learning to monetize the consumer data, including demographics and purchasing behaviour, by sending consumers targeted offers by email and text messages. For more information, visit datablecorp.com.
For additional information about the company please visit www.sedar.com. The TSX Venture Exchange Inc. has in no way passed upon the merits of the transaction and has neither approved nor disapproved the contents of this press release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release contains forward-looking information, which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectation. Important factors – including the availability of funds and the results of financing efforts, – that could cause actual results to differ materially from the Company’s expectations are disclosed in the Company’s documents filed from time to time on SEDAR (see www.sedar.com). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.