Way2VAT continues to experience no negative impact on its global operations from the ongoing security situation in Israel. Ninety per cent of clients are based in Europe and the UK, with 80% of staff based in Spain, the UK and Romania.
Global fintech company in automated VAT/GST claim and return solutions, Way2VAT Ltd, provides an update on its activities for the quarter ended 31 March 2024 (Q1 FY24).
Q1 FY24 Highlights (all figures A$ unless otherwise stated and unaudited)
- Revenue of $680K, up 32% on pcp ($514k in Q1 FY23)
- Transaction volume of $4.1M, up 84% on pcp ($2.23 million in Q1 FY23)
- Cash receipts of $934k, up 83% on pcp ($510k in Q1 FY23)
- Accounts receivable on client VAT claims already submitted to tax authorities $3.3 million
- AI-AP Compliance launched and receiving positive feedback on pilot with key clients for world’s first AI-driven automated auditing product for use in 80 countries
- Entered Australian enterprise market with new Australian multinational industrial company
- Enterprise clients now number ~365
- Secured $5.5 million (before costs) via Convertible Notes issuance and a strongly supported Placement during the period and a subsequent Share Purchase Plan in April
- Way2VAT continues to experience no negative impact on its global operations from the ongoing security situation in Israel. Ninety per cent of clients are based in Europe and the UK, with 80% of staff based in Spain, the UK and Romania.
Commenting on the company’s achievements over Q1 FY24, Way2VAT Founder & CEO, Amo Simantov, said: “Our performance over the first quarter continues the momentum we’ve built over the past financial year as we start to scale, and I’m pleased to report our quarterly revenue of $680K has increased 32% from the same period last year. Due to seasonality, our first quarter revenue is traditionally less than other quarters given the annual expense claim deadlines of either 30 June or 30 September imposed by most EU tax authorities, and the fact that many companies have their financial year-ends with 30 June or 31 December, leading to an influx of claims at these times. Our incremental increase in Q1 revenue over the past three years is an excellent indicator of our growth trajectory as we progress our pathway to profitability.
“With $5.5 million (before costs) of recently secured funds through the ongoing support of existing and new shareholders, we are well placed to continue to grow in Europe where we are firmly established as the leading provider of automated VAT/GST claim and return solutions, and expand to new territories around the world. The funds we have received are a strong endorsement of our growth strategy and will allow us to continue scaling our business and accelerating our profitability initiatives.
“Supporting our expansion efforts is our latest AI-driven automated product AI-AP Compliance. Our latest technology performs a full audit of all accounts payable invoices for clients and paves the way for Way2VAT to enter 40 additional countries in addition to the 40 we currently can operate in. We are receiving positive feedback to our current pilot with two existing clients and expect to launch it to the current client base and new multinational enterprise company prospects by the third quarter.
“Australia became our newest enterprise market during the quarter. Our technology will help a localmultinational industrial company more efficiently manage expenses for its 6,000 staff in 15 countries across the recovery of their VAT/GST claims on invoices for everything from accommodation, transport, travel, fuel and employee expenses.
“We continued to grow our enterprise customer base, which now numbers about 365, welcoming Swiss multinational SGS, Spanish pharmaceutical company Hipra, and Israel-based CyberArk among others.”
Financial highlights
Transaction volume for the quarter was $4.1M, up 84% on pcp ($2.23 million in Q1 FY23). Quarterly cash receipts of $934k were up 83% on pcp ($510k in Q1 FY23). Accounts receivable on client VAT claims already submitted to tax authorities are now at $3.3 million. While all metrics are trending up, our cash receipts continue to be difficult to forecast while we await processing of VAT submissions from some large customers with tax authorities in certain jurisdictions. We expect an increase in cash receipts in coming quarters as these larger VAT submissions are processed.
During the quarter, Way2VAT secured $5.5 million (before costs). A $4.25 million Placement in two tranches at $0.022 cents per share was strongly supported by new and existing institutional, professional and sophisticated investors. Every three shares issued under the Placement includes two free attaching options, exercisable at $0.033 and expiring on 28 February 2026. An additional $1.1 million in Convertible Notes was supported by cornerstone investor Thorney Investment Group during the period. The 22 Notes each had a face value of $50,000 and have been converted to equity during April.
In April outside the reporting period the company secured another $177,500 (before costs) via a Share Purchase Plan conducted on the same terms as the Placement. Proceeds from the Convertible Notes, Tranche 1 of the Placement, the majority of Tranche 2 placement proceeds and the Share Purchase Plan have all settled at the time of this report, while the remaining proceeds from Tranche 2 of the Placement will be received during Q2 FY24.
All proceeds raised will be used to increase the company’s focus on sales and marketing, facilitate inorganic growth, support rollout of Way2VAT’s latest AI-powered product AI-AP Compliance, and for working capital purposes.
Quarterly operating cash expenses increased on the prior quarter as the company expanded pilot programs with the AI-driven automation auditing product, AI-AP Compliance and increased the sales force in the UK for more focused marketing into European jurisdictions. The company paid back loans of $418k during the reporting period to reduce its financing facility to $1.7 million.
During the quarter, $143k in payments were made to related parties and their associates, being wages for the CEO (including superannuation equivalent), Chairman and Non-Executive Directors.
Launch of world’s first AI-driven automated auditing product, ‘AI-AP Compliance’
In February the company launched a new AI-driven automated accounts payable auditing product, AI-AP Compliance, to complement Way2VAT’s existing suite of AI-powered VAT/GST claim and return solutions.
The company is currently conducting pilots with two top-ten clients across several jurisdictions, the largest of which is being undertaken with a Nasdaq-listed telecom provider with a global footprint. Feedback received so far is positive. The company expects to commercially launch the product with current customers in Q3 FY24 and is confident this product will also drive new enterprise client growth.
Australian enterprise client market entry
In March Way2VAT signed its first Australian enterprise client – a multinational industrial company with 6,000 employees across 15 countries. Way2VAT will integrate with the company’s current expense, invoice and travel management platform, strengthening the ability of the company to recover a substantially higher percentage of VAT/GST across its operations. Our new AI-AP Compliance product is also of interest to this Australian Enterprise client.
Other enterprise clients
During the quarter, Way2VAT signed new deals with large enterprise clients in Europe, taking enterprise client numbers to approximately 365.
Key companies include:
- Swiss multinational SGS, the world’s leading testing, inspection and certification company with an annual revenue of $6 billion and 99,600 employees across 2,600 offices and laboratories worldwide. SGS ranked on Forbes Global 2000 in 2015, 2016, 2017, 2020 and 2021.
- CyberArk, a leading global Cyber Security company based in Israel, with an annual revenue of c$1bn and 3,000 employees. CyberArk specializes in information security, primarily serving financial services, energy, healthcare and government organisations.
- Hipra, a biotech pharmaceutical company headquartered in Spain focused on animal and human health, with a product base of vaccines and diagnostic services. Hipra have an annual revenue of c£350m and over 2,000 employees.
Outlook
Way2VAT Founder & CEO, Amos Simantov, said: “Our revenue base is increasing consistently as we expand. This is partly due to a wider base of clients in multiple sectors and jurisdictions using more of the Way2VAT product suite, an increasing trend towards more travel and expense claims as our clients grow their businesses in a post covid environment, and increased one-off transactions as larger clients come on board and have their historical claims processed. This has also made us more resilient to seasonal fluctuations and reduced our concentration risk.
“The recent launch of our new AI-powered compliance product that helps our customers audit and reclaim their VAT/GST obligations in multiple countries will increase the demand for our services from clients as this product fits well with our existing suite and strengthens our value proposition to them. We expect to finish our pilots soon and rollout AI-AP Compliance to our current client base by the start of Q3, before extending it to new multinational enterprise prospects soon after.
“We value our shareholders’ continuing support through our recent capital raising activity to speed up recent company initiatives undertaken to advance the pathway to profitability, improve our client onboarding processes, and further grow our business by building a strong pipeline in the UK and Europe for our expanding product suite.
“We will keep managing our cash flow carefully. We have recently paid down debt and will examine other credit line extension options that give us the ability to take advantage of acquisitions or other inorganic growth opportunities that are arising in the sector, where it makes business sense and adds value for shareholders.
“A lot of competitors have old-fashioned technology and manual processes and are finding it hard to recover from the difficult COVID period. I firmly believe the sector is ripe for consolidation, especially in Europe. With our world leading technology, we are in a good position to benefit from this trend.”
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
