Way2VAT Boosts Q1 Revenue 54% Amid Client Growth and Cost Cuts
Way2VAT Ltd reported a robust 54% increase in Q1 FY25 revenue to A$1.05 million, driven by new client onboarding and higher VAT claim volumes, alongside strategic cost reductions and fresh credit facilities.
- Q1 FY25 revenue surged 54% to A$1.05 million versus prior year
- Enterprise client base expanded to 409, including major multinational contracts
- Completed cost reduction program targeting 20% annual savings
- Secured $720,000 credit line and $430,000 short-term loan to support cash flow
- Accounts receivable rose slightly to A$4.6 million, reflecting revenue ahead of cash collections
Strong Revenue Growth Despite Seasonal Headwinds
Way2VAT Ltd (ASX: W2V), a global fintech leader in automated VAT claim and return solutions, has delivered a striking 54% increase in quarterly revenue for Q1 FY25, reaching A$1.05 million compared to A$680,000 in the same period last year. This growth is particularly notable given Q1 is traditionally the weakest quarter for VAT reclaim activity due to the absence of major tax deadlines.
Founder and CEO Amos Simantov attributed the revenue surge to onboarding new enterprise clients, processing historical VAT claims, and increased volumes from existing customers. The company’s platform, powered by patented AI technology, continues to gain traction across over 40 countries and 20 languages.
Expanding Client Base and New Contracts
Way2VAT’s enterprise client roster grew to 409 by the end of Q1, up from 395 in the previous quarter. Key new clients include a multinational real estate services company covering approximately 130 entities across Europe, Kaizen Gaming, a major international Game Tech operator with US$1.6 billion in revenue, and Grupo Restalia, a leading franchised Spanish restaurant group with a significant global footprint.
While these new contracts are expected to generate revenue over time, they are not yet individually material to 2025 revenue. The company remains focused on integrating these clients and scaling VAT reclaim volumes.
Financial Discipline and Cash Flow Management
Way2VAT completed a cost reduction program targeting an annualised 20% savings, with one-off restructuring costs of approximately A$150,000 incurred in January. This initiative is expected to improve the company’s operating leverage going forward.
Despite revenue growth, accounts receivable increased slightly to A$4.6 million, reflecting revenue recognition ahead of cash collections. To manage cash flow, Way2VAT repaid A$810,000 in short-term loans during the quarter and secured additional financing facilities from Bank Hapoalim, including a $720,000 credit line tied to purchase orders and a $430,000 short-term loan.
Outlook and Market Positioning
Looking ahead, Way2VAT is preparing for a busy period leading up to the key VAT reclaim deadline on 30 June, with a larger client base and a strong pipeline of work. The company anticipates higher volumes of VAT claims and increased revenues in subsequent quarters as new clients’ expense data flows into its platform.
Simantov expressed confidence in sustained growth, supported by operational efficiencies and ongoing client wins. The company’s strategic positioning in the fintech VAT reclaim sector, combined with its AI-driven platform, underpins its competitive advantage.
Bottom Line?
Way2VAT’s Q1 momentum sets the stage for accelerated growth, but managing receivables and cash flow will be critical as new contracts ramp up.
Questions in the middle?
- How quickly will new multinational contracts translate into material revenue contributions?
- What strategies will Way2VAT deploy to reduce its high accounts receivable balance?
- Can the company sustain its revenue growth through the upcoming peak VAT reclaim deadlines?
