Way2VAT Ltd (ASX:W2V) has delivered robust financial results for the full year ended December 31, 2022, doubling gross transaction value to A$21.33 million, up 57% from the previous corresponding period in 2021.
During the year, the company saw a 25% increase in enterprise clients, including the likes of TikTok, BASF Spain, Duracell, Playmobil, Artsana and Pizza Hut Spain.
In addition, SMB clients expanded to 29% through indirect sales with strong technology and accounting partnerships with Xero, Zoho, WebExpense, Sage, Circula, Allocate and DevoluIVA.
In a bid to boost finances, Way2VAT raised $2.49 million via a private and oversubscribed share placement to accelerate growth opportunities, with strong support from sophisticated, institutional and cornerstone investors.
In Spain, the company acquired DevoluIVA in the December quarter, which will be the country's first fully digital solution for corporate expense and VAT recovery.
Foreign travel to pre-pandemic levels
Way2VAT founder and CEO Amos Simantov said: “As the year progressed, we began to see the return of foreign travel to pre-pandemic levels, boosting our overall growth and enabling us to attract new enterprise clients and in new sectors.
“Also, the time needed by government tax authorities to process our claims is starting to reduce, after reaching nearly 15 months during the COVID period.
“This accelerating momentum saw gross transaction value to FY22, increasing by 57% to A$21.33 million on the prior year. Importantly, the gross transaction value is a leading indicator of revenues we expect to receive.”
Financial highlights
The increase in FY22 gross transaction value is attributed to the increasing transaction volume and increasing value claims, underpinned by the return of the international travel of our customers during the year.
The company's operational revenue was up 11% to €1.24 million, reflecting underlying growth, especially in the second half of the year.
Furthermore, the reported revenue, after adjusting for currency increased by 7% to $1.88 million compared to the previous corresponding period in 2021.
DevoluIVA acquisition
The acquisition provides Way2VAT entry into the Spanish market, offering complementary domestic and foreign VAT and accounts payable services and supporting the rollout of the world's first Smart Spend Debit Mastercard through an established national network.
Simantov adds: “Our acquisition of Spanish company DevoluIVA has enabled us to enter a new market, with the Spain market having a different VAT structure to most countries in Europe.
“This transaction is in line with our strategy to expand into new markets via acquisitions. Encouragingly we are already seeing substantial growth in Spain, contributing significant transaction volume and revenues, and widening our presence in the global market.”
“After launching the world’s first spending card automating VAT/GST returns for the SMB and Enterprise market in April 2022, we moved from the pilot stage to production and now generating revenue.
“This focus on unique products along with strategic acquisitions has added two new revenue streams, and we will continue to invest in and develop these initiatives.
“Capital from our well-supported share placements is being used to scale the marketing capability of our broadening suite of products, the rollout of the Smart Spend Debit Mastercard and to continue to optimise the patented technology platform.”
Forward plan
Simantov adds: “This year we expect to see the positive trends among foreign travellers to continue, driving strong transaction volumes and revenue growth.
“This combined with improvements in the time it takes tax authorities to process tax refunds will see strong cash flow generation.
“As a result of these drivers, we believe we are on track to reach cash flow breakeven during 2024.”