Way2VAT’s H1 FY25: AUD 2.49M Revenue, 31% Lower Operating Loss
Way2VAT Ltd reported a 43% revenue increase to AUD 2.49 million in H1 FY25, driven by new enterprise contracts including a major deal with JLL. Despite improved operating losses and successful fundraising, the company faces ongoing net losses and liquidity concerns.
- Revenue up 43% to AUD 2.49 million in H1 FY25
- Operating loss narrowed by 31% to AUD 2.33 million
- Secured major global VAT reclaim contract with JLL
- Raised AUD 4.55 million through convertible notes and placement
- Going concern uncertainty due to current liabilities exceeding assets
Robust Revenue Growth Driven by New Client Wins
Way2VAT Ltd has delivered a strong first half for fiscal 2025, with revenues climbing 43% to AUD 2.49 million compared to the same period last year. This growth was largely fueled by the conversion of new client contracts ahead of key tax deadlines, notably including a significant global VAT reclaim and compliance agreement with JLL, a multinational real estate services firm operating in over 80 countries. The contract not only covers VAT recovery on travel and entertainment expenses but also introduces Way2VAT’s APAI Compliance platform to JLL’s operations, expanding the scope of services.
Improved Operating Efficiency and Cost Management
Alongside revenue gains, Way2VAT reduced operating expenses by 7% to AUD 4.37 million, reflecting cost-cutting initiatives implemented late last year. This has contributed to a 31% reduction in operating loss to AUD 2.33 million, signaling progress toward operational scalability. The company’s gross profit margin improved to 82%, underscoring its ability to leverage higher volumes efficiently.
Capital Raising and Financial Position
Way2VAT successfully completed two funding rounds in the first half, raising a combined AUD 4.55 million through convertible notes and a share placement. The convertible notes, issued in January and converted to equity by May, carried a 10% interest rate and included a conversion discount. The June placement was supported by both new and existing shareholders. Additionally, the company secured a 12-month extension on a AUD 1.2 million secured loan facility with Israeli Bank Hapoalim, providing some near-term liquidity relief.
Lingering Challenges and Going Concern Risks
Despite these positive developments, Way2VAT reported a net loss of AUD 3.7 million for the half, a 14% increase from the prior period. The company’s current liabilities slightly exceed current assets, prompting an auditor’s emphasis of matter regarding going concern. Management remains confident that ongoing revenue growth and shareholder support will sustain operations, but the financial position warrants close monitoring. The shift in reporting currency from US dollars to Australian dollars aims to better align financial disclosures with the company’s investor base and operational realities.
Outlook and Market Implications
Way2VAT’s expanding enterprise client base, now at 414 customers, and its strategic contract with JLL position it well in the VAT automation niche. However, the company must continue to balance growth ambitions with prudent cost control and capital management to navigate liquidity risks. Investors will be watching closely for signs of sustained profitability and cash flow improvements in the coming quarters.
Bottom Line?
Way2VAT’s growth story is gaining momentum, but its path to profitability remains uncertain amid ongoing funding needs and liquidity pressures.
Questions in the middle?
- Can Way2VAT convert its growing client base into sustainable profitability?
- How will the company manage its debt and liquidity risks beyond the loan extension?
- What impact will the JLL contract expansion have on future revenue and margins?
