DATABLE TECHNOLOGY CORPORATION ANNOUNCES FINANCIAL RESULTS FOR Q1 2023 AND UPDATE FOR YEAR-TO-DATE 2023
VANCOUVER, BC, June 29, 2023 /CNW/ - Datable Technology Corporation (TSXV: DAC) (OTC Pink: TTMZF) (the "Company" or "Datable" or "DTC"), the developer of a proprietary, SaaS-based Consumer Lifecycle and Data Management Platform called PLATFORM3, is pleased to announce its financial results for the quarter ended March 31, 2023 ("Q1 2023").
For the period three months ended March 31, 2023, the Company achieved the following milestones:
Decreased total operating expenses by 51% to $736,714 compared to $1,510,768 in the same period in 2022 mainly due to implementation of cost-cutting and improved operational efficiencies, resulting in a 57% reduction of net loss to $571,785, compared to $1,225,745 in same period in 2022.
Revenue decreased slightly to $857,948 compared to $860,586 in the same period in 2022 due to a reduction in new annual and long-term licenses signed in 2022.
At the end of Q1 2023 total contracted revenue for 2023 and future periods was approximately $2.9 million, compared to approximately $3.1 million in the same period in 2022. Total contracted revenue includes agreements signed in the year and multi-year agreements carried forward from prior years.
On June 16, 2023, the Company announced that it has entered into a non-binding letter of intent with LMSG to sell its software-as-a-service business in exchange for a 15% interest in LMSG.
The Company is also pleased to provide the following 2023 updates:
Due to the continued cost-cutting and improved operational efficiencies, total operating expenses are expected to be reduced by approximately 50 percent for the year ended December 31, 2023, compared to the same period in 2022.
As of the date of this news release, Datable has agreements, which together with license agreements signed in prior periods amount to approximately $3.6 million in revenue under contract for 2023 and future periods, of which 56% is expected to be recognized as revenue in 2023. This includes approximately $3.2 million in contracted revenues and close to $0.4 million in expected program fees from customers. Datable expects gross margin to be between 40% and 50% in 2023, depending on product mix and an increase and expected improvements in operational efficiency.
"We are pleased that we have maintained our revenue base in Q1 2023 while reducing operating expenses by over fifty percent. Our core customers continue to renew their licenses, and we expect revenue growth in the second half of 2023 due to upsizing of existing customers and new customers that are in our sales pipeline." said Robert Craig, Datable's CEO. "We are working with LMSG to leverage their sales team and products to drive growth in 2023, as we work towards a definitive agreement to sell our business to LMSG and scale up as part of a larger and better capitalized company."
Results of Operations:
Revenue for the three months ended March 31, 2023 decreased by nil percent to $857,948, compared with $860,586 in the same period in 2022 due to a flat growth in contracted project deliveries and transactional orders compared to 2022. DTC'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 current year reflected recognition of revenue from previous year contracts and new sales of the PLATFORM3 product offering.
Revenue growth for the year of 2021 and 2022 was partly due to improvements in the functionality of PLATFORM3. In late 2020, DTC launched version 5.0 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.
Gross profit for the three months ended March 31, 2023 decreased by 15% to $314,991, compared to $368,620 in the same period in 2022. The Company's cost of sales for the three months ended March 31, 2023 increased by 10% to $542,957, compared to $491,966 in the same period in 2022 due to a change in product mix and an increase in delivery resources during the period in 2023.
Gross margin as a percentage of revenue for the three months ended March 31, 2023 was 37%, compared to 43% in the same period in 2022. The decrease for the three months ended March 31, 2023 was due to higher growth in lower margin services compared to the licensing and Software as a Service product. 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, and reward service combined with some lower margin third party services.
Cost of sales includes an API connection to third party digital rewards platforms. 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 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 months ended March 31, 2023 decreased by 42% to $233,457, compared to $402,792 in the same period in 2022. The decrease for the three months ended March 31, 2023 was mainly due to a decrease in corporate consultancy fees, professional fees, investor relations and general administration.
Sales and marketing expenses include wages and salaries, consulting fees, travel expenses, and advertising and licenses. Sales and marketing expenses for the three months ended March 31, 2023 decreased by 51% to $127,849, compared to $261,279 in the same period in 2022. The decrease for the three months ended March 31, 2023 was mainly due to reduction in staff resources and consultants paid in connection with advertising, sales and marketing activities.
Research and development expenditures for the three months ended March 31, 2023 decreased by 35% to $340,529, compared to $527,844 in the same period in 2022. The decrease in research and development expenses for the three months ended March 31, 2023 was related to reduction in staff and consulting resources while maintaining the quality enhancement to PLATFORM. Research and development expense is expected to be significantly lower in 2023 compared to 2022, since the development of the next generation of PLATFORM3 is completed. The enhanced version of PLATFORM3 delivers improved efficiency and reduced implementation cost along with new tools to further monetize first-party consumer data customers.
Net and comprehensive loss for the three months ended March 31, 2023 decreased by 57% to $521,785, compared to $1,225,745 in the same period in 2022. The decrease in net loss for the three months ended March 31, 2023 was mainly due to the reduction of sales and marketing expenses, general and administrative expenses and research and development expenses.
About Datable Technology Corporation
Datable has developed PLATFORM3 a proprietary Consumer Lifecycle and Data Management Platform that is sold to global consumer brands. PLATFORM3 is delivered as a subscription service (Software as a Service model) and used by some of the worlds' most valuable consumer brands to access new consumer communities and engage them while collecting, analyzing, and managing their first-party 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.
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