Wrkr Ltd reports strong commercial progress and strategic hires in Q2 FY25, positioning itself for growth with key platform enhancements and pilot completions ahead of Payday Super implementation.
- Accelerated investment approved to support Payday Super rollout
- Key hires including COO, Head of Delivery, and cybersecurity experts
- MUFG partnership nearing completion with international and industry builds
- Q2 cash balance of $7.2 million supports scaling and pipeline execution
- Improved cost-to-income ratio by 17% over the past 12 months
Strategic Focus and Commercial Momentum
Wrkr Ltd (ASX: WRK) has reported a proactive quarter ending December 2024, marked by significant commercial negotiations and technical advancements across multiple superannuation funds and HRM providers. The company’s board has endorsed an accelerated investment approach to meet the aggressive timelines set by the Payday Super initiative, reflecting confidence in the growing pipeline and market demand.
During Q2 FY25, Wrkr intensified its efforts on formal technical responses and security assessments, laying the groundwork for upcoming implementations. This strategic momentum is underscored by the company’s focus on delivering pilot milestones, particularly with Rest and other funds leveraging the MUFG Retirement Services clearing house platform.
Operational Enhancements and Talent Acquisition
To support this growth trajectory, Wrkr has expanded its team with critical hires, including a Chief Operating Officer, Head of Delivery, a Senior Cyber Security Analyst, and three Cloud Engineers. These appointments are designed to bolster delivery capabilities and enhance post-implementation support, ensuring the company can effectively scale as it transitions from pilot phases to full rollout.
Platform development remains a core focus, with API enhancements underway to meet the detailed requirements of HRM platform providers. Wrkr is also building accelerators to expedite fund onboarding ahead of Payday Super, demonstrating a clear commitment to operational readiness and customer experience.
Financial Position and Cost Management
Financially, Wrkr reported a cash balance of $7.2 million at quarter-end, providing a solid runway to execute its growth plans. While net operating cash flows declined compared to the previous quarter, this was attributed to timing differences in milestone-linked cash receipts rather than a slowdown in business activity. The company continues to balance investment with revenue generation, with FY25 revenue growth expected to be driven primarily by implementation fees from super funds.
Cost discipline is evident in the 17% improvement in the cost-to-income ratio over the past year, reflecting Wrkr’s ongoing commitment to efficient resource management even as it invests in scaling its operations.
Progress on MUFG Partnership and International Expansion
The MUFG Retirement Solutions partnership is approaching completion of its industry build, with the Hong Kong deployment testing phase near conclusion and scheduled to go live in Q3. Additional features requested by MUFG are in development, indicating a dynamic and evolving collaboration. The Rest pilot is progressing well, with development continuing to support a smooth transition to full implementation post-pilot.
Wrkr’s integrations with third-party payroll and human capital management systems, including early engagements with Workday and SAP partners, are on track, positioning the company to broaden its market reach and deepen its ecosystem connectivity.
Security and Customer Retention
Security remains a priority, with Wrkr successfully completing ISO27001 and GNGB audits during the quarter. These certifications reinforce the company’s robust security posture, a critical factor for clients in the financial technology and superannuation sectors.
Customer retention remains strong, with full retention of key platform clients and high retention rates across superannuation, pay processing, STP, and SMSF customers, underscoring the value and reliability of Wrkr’s solutions.
Bottom Line?
Wrkr’s strategic investments and operational advances set the stage for a pivotal year as Payday Super implementation accelerates.
Questions in the middle?
- How will Wrkr’s accelerated investment impact its revenue recognition timeline in FY25?
- What are the key risks associated with the transition from pilot to full implementation for Payday Super?
- How might further enhancements requested by MUFG influence Wrkr’s product roadmap and resource allocation?