Datable Technology Corp. Announces Q3 2020 Financial Results
VANCOUVER, BC, Nov. 25, 2020 /CNW/ - 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 the quarter ended September 30, 2020 ("Q3 2020").
For the nine months ended September 30, 2020, the Company achieved the following milestones:
The Company is also pleased to provide the following 2020 updates:
"In the third quarter in 2020, we continued to grow our core SaaS business signing multiple Fortune 500 companies as new customers during the Covid-19 pandemic. We expanded the scope and scale of our license and service agreements with leading brands that have been customers since 2018, and added new global brands as customers. Our customers have large and growing budgets for digital marketing, and we are getting a larger share as we continue delivering measurable ROI by adding tools that enable the use of opt-in consumer data to drive incremental revenues," said Robert Craig, Datable's CEO. "The Company also continued work to develop its own Consumer Loyalty and Rewards Portal - the flexxi Rewards Network. This Portal will provide opt-in registered consumers with valuable rewards for purchasing products and engaging with leading consumer goods companies to complete activities that support their brands. The flexxi Rewards Network will enable Datable to begin collecting consumer data and expand its business model to include data and transactional revenue. We expect that building communities of consumers and owning the relationships and consumer data will be a big driver of revenue in the coming years. The flexxi Rewards Network is built on top of Datable's proprietary PLATFORM³ technology which dramatically reduces costs and time to market."
Results of Operations:
Revenue for three months ended September 30, 2020 decreased by 4% to $433,116 and revenue for the nine months ended September 30, 2020 increased by 9% to $1,239,710, compared with the same periods in 2019 respectively. Year-to-date, contracted revenues grew by more than 100% to approximately $5 million, however growth of recognized revenues was slower due to a number of projects being delayed, largely due to logistics issues stemming from COVID, until later in 2020 and early 2021.
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.
The growth in contracted revenues in 2020 has been due to larger renewals and new licenses driven by improvements in PLATFORM³, and an established track record of delivering ROI to customers. In late 2019, DTC launched version 4.0 of PLATFORM³ which included new modules that extended and deepened its differentiation in the market by launching a break-through feature on PLATFORM³ - Dynamic Messaging and Rewards (DMR). This feature 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).
Gross margin as a percentage of revenue for the three and nine months ended September 30, 2020 was 67% and 67% respectively, compared to 71% and 72% for the three and nine months ended September 30, 2019. Gross margin depends on the product mix for the reporting period. 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 products and services. While Datable expects strong revenue growth of high-margin PLATFORM³ licenses, revenues from lower-margin services and rewards products are expected to grow faster, which will reduce consolidated gross margin to as a percentage of revenue.
Datable launched an API connection to third party digital rewards platforms in 2019. This service enables Datable clients to offer third-party digital rewards such as gift cards, movie tickets and virtual visas to incentivize purchase and purchase frequency. Datable purchases these rewards on behalf of the Company's clients and charges a transaction fee for the total 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 the three and nine months ended September 30, 2020 increased to $535,887 and $1,153,627 respectively, compared to $328,470 and $935,586 for the three and nine months ended September 30, 2019. The slight increase for the nine months ended September 30, 2020 was mainly due to increase in corporate consultancy and corporate finance service contracts engaged in 2020 compared to the same period in prior year.
Sales and marketing expenses for the three and nine months ended September 30, 2020 was $249,818 and $589,815 respectively compared to $156,801 and $419,348 for the three and nine months ended September 30, 2019. The increase was due to increased sales and marketing activity related to the launch of new products, which resulted in the growth in contracted revenues, which will be recognized in future periods.
Research and development expenditures for the three and nine months ended September 30, 2020 was $266,978 and $721,243 respectively compared to $239,446 and $559,875 for the three and nine months ended September 30, 2019. The increase in research and development expenses for the nine months ended September 30, 2020 was related to enhancements of PLATFORM³ and developing the new flexxi Rewards Network. 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 the three months and nine months ended September 30, 2020 was $789,251 and $1,911,036 respectively, compared to $631,092 and $1,440,214 for the three and nine months ended September 30, 2019. This increase in net loss for the nine months ended September 30, 2020 was mainly due to the increase of general and administrative, marketing, and research and development expenses, net of the increase in gross profit and the growth in revenue. These increased expenses are expected to be off-set by increasing revenues and gross profit as the growth in contracted revenues is recognized in future periods.
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 proprietary technology 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.
SOURCE Datable Technology Corp.
Company Codes: OTC-QB:TTMZF, TorontoVE:DAC
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