Way2VAT prepares to accelerate growth in multiple markets through expanded product suite

Global fintech leader in automated VAT/GST claim and return solutions, Way2VAT Ltd  provides an update on its activities for the quarter ended 30 June 2024 (Q2 FY24), alongside the company’s Appendix 4C.

Commenting on the company’s achievements over Q2 FY24, Way2VAT Founder & CEO, Amos Simantov, said: “Our growth momentum continues, and I’m pleased to report a record quarterly revenue of $1.1 million, an increase of 13% from the same period last year and a considerable increase of 62% from Q1 this year, as we see the ongoing benefits from integrating our acquisitions and continued client growth. We expect this to continue next quarter as we process multiple years of invoices in initial batches from our newly signed multinational clients. Our growth is driven by our unique IP protected AI technology which addresses a global market of unclaimed VAT/GST valued at US$20 billion per year.

“During the quarter we successfully completed the pilot of our latest APAI Compliance product with two key clients, including a NASDAQ-listed telecom provider with a global footprint, and I’m pleased to report both clients are now formally integrating this product within their systems. APAI Compliance has delivered 90% success rate on test invoices paving the way for a full commercial roll out with first revenues during Q3 for existing and new enterprise multinational clients.

“We are seeing considerable appetite for this service as existing and new clients start to understand how APAI Compliance reduces risk and liability by ensuring companies are compliant with invoicing regulations across different jurisdictions. We have a strong pipeline of new opportunities for APAI Compliance, and we will be adding new clients for this product over the next half year.

“We welcomed new clients during the quarter, including Ranstad, one of the world’s largest recruitment companies, offering Way2VAT’s VAT/GST claim and returns solution to over 40,000
employees in more than 4,500 offices. Our pipeline remains strong with 26 potential deals with clients in several industries across Europe, with at least 80% conversion probability and potentially up to total revenue or annual contract value of ~$3.5 million.

“To continue our current growth trajectory, we expanded our business development and sales team, bringing on board a top VAT specialist for the compliance team in London with more than 25 years’ experience, strengthened our sales office in London, and appointed new senior sales representative in Spain.”

Financial highlights

Revenue for the quarter was $1.1 million up 13% on pcp ($961k in Q2 FY23) and an increase of 62% on previous quarter ($680k in Q1 FY24), reflecting the increasing scale of the business over the last two years.

Quarterly cash receipts of $927k were up 36% on pcp ($683k in Q2 FY23). We are now starting to see an increase in cash receipts which we expect to continue over coming quarters as tax authorities process a backlog of larger VAT submissions previously submitted. Accounts receivable on client VAT claims already submitted to tax authorities remains steady at $3.3 million.

The company paid back a further $93k in loans during the reporting period to reduce its financing facility to $1.54 million. During the quarter, $133k in payments were made to related parties and their associates, being wages for the CEO (including superannuation equivalent), Chairman and Non-Executive Directors.

Completion of APAI Compliance pilot

During the quarter Way2VAT successfully completed a pilot of its latest AI-driven automated accounts payable auditing product, APAI Compliance, with two top-ten clients across several
jurisdictions. APAI Compliance has received 90% success rate on test invoices. The two clients are now formally integrating APAI into their systems and the company will commercially launch this product with current clients in Q3 and expects first revenues immediately.

Other enterprise clients

During the quarter, Way2VAT signed new deals with large enterprise clients in Europe, taking enterprise client numbers to approximately 375. The company also expanded existing agreements
with large enterprise companies some of which include Ariston Thermo Spa and global software company Nutanix.

Key new clients include:

Randstad, one of the largest recruitment companies in the world based in the Netherlands with 40,000 employees and 4,500 offices
Fever, an entertainment technology platform with 2,000 employees and annual revenue of £1billion
Acciona, S.A., a Spanish multinational conglomerate developing infrastructure (construction, water, industrial and services) and renewable energy projects with over 40,000 employees.

Outlook

Way2VAT Founder & CEO, Amos Simantov, said: “We will continue to build on strong momentum over coming months, meeting unmet market needs with new AI compliance technology by expanding our product suite and evaluating opportunities for growth in Europe and beyond. One area of focus over the second half of this financial year will be targeting existing clients for APAI Compliance while converting our strong pipeline in the UK and Europe into sales.”

Other matters

The company refers to its ASX announcement dated 18 June 2024 in respect to the Tranche 2 Placement and advises it has entered into a deed of settlement (Settlement Deed) with BMYG
Capital Pty Ltd (BMYG) in respect to its allocation amount of $500,000 under the Tranche 2 Placement (Allocation Amount). Under the terms of the Settlement Deed, BMYG will pay the
Allocation Amount to the company in tranches in the coming months. Payment of the first tranche, being $150,000, was received by the company on July 19th and the company has issued the shares in respect to that tranche.

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