Way2VAT Reports 43% Revenue Increase and 10% Client Growth in 1H FY25

Strong Revenue Growth and Client Expansion

Way2VAT Ltd (ASX – W2V), a global fintech leader specialising in automated VAT reclaim and compliance solutions, has delivered a compelling first half for FY25. The company reported revenue of A$2.49 million, marking a 43% increase compared to the same period last year. This growth reflects Way2VAT’s successful strategy of signing larger multinational clients and deepening engagements with existing customers.

Notably, the enterprise client base expanded by 10%, rising from 375 to 414. A highlight was the significant contract with JLL, a global real estate services firm, which not only secured VAT reclaim services but also incorporated Way2VAT’s APAI real-time invoice compliance platform. The scope of this contract has since broadened to cover 77 entities, underscoring the company’s ability to scale within large organisations.

Operational Efficiency and Profitability Pathway

Way2VAT’s gross profit surged 57% to A$2.05 million, supported by a strong gross margin of 82%. This improvement was driven by stable costs of goods sold alongside rising revenues, demonstrating the company’s scalable business model. Meanwhile, operating expenses decreased by 7% to A$4.37 million, thanks to cost-cutting initiatives implemented in the previous quarter, particularly in staff and administrative costs.

These financial dynamics position Way2VAT on a promising trajectory toward profitability. CEO Amos Simantov expressed confidence that the company’s organic revenue growth of approximately 50% per annum will continue into the second half of 2025, supported by a robust pipeline and increased client activity ahead of key VAT reclaim deadlines.

Cash Flow and Financing Updates

During the half, Way2VAT completed two funding rounds, raising a combined A$4.55 million through convertible notes and a placement. These capital injections, alongside extended secured and bridge loan facilities with Israeli Bank Hapaolim, provide the company with liquidity to support its growth initiatives. However, accounts receivable rose significantly to A$5.5 million, reflecting the timing lag in cash collections from various government tax authorities.

Strategic Growth Pillars and Outlook

Way2VAT’s “Four Pillar” growth strategy, unveiled earlier this year, continues to guide its expansion into global VAT reclaim, real-time invoice compliance, VAT compliance services, and real-time e-invoicing. The company’s ability to increase client penetration, adding new projects for existing clients such as Solenis Chemical and TikTok, further validates this approach.

Looking ahead, Way2VAT anticipates a seasonally stronger second half, with many clients’ VAT reclaim activities peaking around September and December tax deadlines. The company’s backlog and pipeline suggest sustained momentum, with management optimistic about converting opportunities into revenue and advancing toward profitability.