Way 2 Vat Ltd (W2V) Earnings Call Transcript & Summary

Good afternoon, everyone. I have the Founder and CEO of Way2VAT with me today for the webinar. So Way2VAT is a tax tech company. They are positioned themselves as a leading SaaS platform for global VAT reclaim, invoice validation, compliance and invoicing solutions. The company's growth is built on 4 connected revenue lines that they're calling the 4 pillars: Global VAT reclaim, APAI invoice validation, VAT compliance services and real-time e-invoicing. And what makes Way2VAT so compelling is the large addressable market that they have in the 4 pillars. This is in the multi-tens of billions of dollars in total. They have patent-protected technology, and they have cross-selling opportunities available. They have a global -- growing global client list that includes the likes of Duracell, Sony and Nestle. And with that, I will hand over to Amos to start the presentation. Thank you, Amos.

Yes. Thanks for having me, Anthony. So yes, my name is Amos Simantov. I'm the Founder and CEO of Way2VAT. My background is taking company for small scale to large. Last company, we sold for a very large private equity fund for USD 400 million. We built for Way2VAT a very unique platform. I would like to walk you through today and explain exactly what we are doing here commercially and technologically. So as Anthony said, in Way2VAT, we have today 4 pillars. Those 4 pillars are the main growth for the business for the next few years. Some are newcomers like new technology that we developed recently. Some are already like kind of bread and butter for the business in the last few years. Let me walk you through one by one. So -- and the first one is the global VAT reclaim. So VAT and GST reclaim for large corporates, this is what we are doing. very large businesses. Just to give you the idea, companies with a size of 1,000 to 30,000, 40,000 employees, having presence in many countries around the globe. For the global VAT reclaim, what we do for those businesses, we do the reclaim for all the travel and expenses that they are having. Employees are traveling globally between countries to promote their business, if it's hotel, if it's accommodation, transportation, events, hosting clients in any area in the world, country in the world, we are getting all these invoices in very large scale from those clients through their ERP system, if it's SAP or Oracle and we are working simultaneously in 40 countries, 20 languages to reclaim those -- all those expenses in front of 40 different tax authorities. So this is a very scalable machine that we built. We started it like 8 years ago. Before AI came to our life, it was like a machine learning that we started. So we're very familiar with all these technologies. We have 7 patents around that. So all the idea is to look on the invoice as image and to capture all the data per invoice and to reclaim it in different tax authorities. So we are doing that in a very large scale. We are talking about million of invoices that we are dealing in a quarterly basis, and it's growing daily with different clients that we are signing with. The global VAT reclaim business, it's actually our bread and butter. We build all the system and our technology based on that. When I'm saying, by the way, VAT, GST is the same. So it's the same. VAT is value-added tax and Global Sales Tax. So it's the same thing. So we do both. We do VAT and GST reclaim. This platform today, we have about more than 500 clients in that platform working with them in a daily basis. The second pillar is the APAI. It's invoice validation. This is a new technology that we presented recently in the market. We call it -- it's a part of wider solution. We call it the Way2Invoice. So there is a Way2VAT; this solution, we call it Way2Invoice. APAI is based on AI technology that we developed recently. The idea with APAI, it's invoice validation. Big, big corporates that they are getting invoices from their supplier, mainly account payable invoices in very large scale, different languages, different issues that they are having. It's very complicated for them to reclaim that and also to manage it. And the way that they are doing that is many manual process. What we develop, we develop an online platform can get invoices in very large scale, look on each individual invoice and can tell the client if it's compliance, yes or no. This is a revolutionary solution that we developed recently. So as I said, we are working in different languages, different tax authorities. We are getting those invoices in very large scale. Client is like a traffic light. He can see real time if the invoice is compliant, yes or no. If it's red, so if it's duplicate or kind of, let's say, a fraud, they are stopping the process. If it's green, it's green and yellow, it needs to check it with the supplier. When we are looking now in companies, a very large one, so they have their own AP team. AP team are dedicated to look and to validate those invoices before they do the payment to the supplier. Mostly, they do like a random check or doing check here and there. It's impossible to go after each individual invoice. What we developed here, a platform that can do A to Z. They can validate any invoice in any size, in any language. And this is a revolutionary solution that we are providing to the market today. The third pillar is the VAT compliance, VAT compliance. So it's a new pillar that we presented in the market. This is based on the acquisition we did in last October. In London, we bought a company called RBC. So RBC providing us all the VAT services like compliance and consultancy. This is like today, I would say, 15% or 17% of our revenue is from that area, and it's growing and it's growing. And the idea is to provide to clients what we found ourselves in a situation that we are advising our clients in different situations that we have issues with VAT or GST with different suppliers, the clients having asking questions. Mostly when they do, they go to the Big 4, Ernst & Young, Deloitte, the PwC to get their advice. We decided to provide these services internally and to provide kind of solution for them through RBC. So it's a complementary solution. So it's not just we do the VAT reclaim and do the AP compliant things, we do the advisory itself. So it's a complementary solution. It's growing. As I said, revenue is very nice. RBC, we are very pleased from this acquisition. And I will walk you through this RBC and the situation in the market and the way that we have more and more appetite to acquire companies like that. This is part of our strategic roll-up growth that we have in the next few years. The last pillar, we call it real-time e-invoicing. This is the real-time invoicing, the 4 pillar and the second pillar, it's part of the Way2Invoice platform that we are having. So what exactly we do here? We are getting invoices from our clients from their supplier in very large scale, very large. We're checking them real time. It's a real-time platform, and we can say if they are compliance, yes or not, in terms of the internal policy of the client or compliance in terms of the tax authority. We are doing this check. And once we did this check, we moved it to the e-invoicing format. So e-invoicing is a new standard in Europe and also will come to Australia, New Zealand, some of APAC countries shortly. This is to avoid fraud. Countries are losing billions of dollars because they are paying VAT/GST to the wrong direction for invoices that are really fake. So they would like to avoid it and they would like to do a real-time hand check between the supplier, the invoice itself and the payment potentially they will do for the GST/VAT component. So this is an invoicing standard for countries. We develop a solution and they can support it. So we do like end-to-end. So we are checking the invoice. We are saying if it's a compliant, yes or not. And then we are moving the invoices to the e-invoicing format. So this could be inbound invoices or outbound invoices. So it can be AP invoices or AR invoices, account receivable invoices. So these are the 4 pillars of Way2VAT. This is the platform that we are having here. This is our main growth for the next years to come. And we are very pleased that we have it. So let me walk you through for the first pillar, the global VAT reclaim. As I said, it's about 80% of the revenue today is from that pillar. So in the last 4 years from 2022 till today, we reclaimed cash in to our clients about AUD 125 million. They got cash from us in the last 4 years and growing nicely. We are in monthly 1 million invoices per month that we are getting to our platform and then validating that and then reclaiming that in different countries. Working in 40 different countries simultaneously in 20 different languages. We have about 560 clients using this platform. One of the growth strategy for the next years to come is about based on roll-up and acquisition. So we did 2 acquisitions from -- in the last few years. In 2022, we acquired a company in Barcelona in October '22 in Barcelona called DevoluIVA, now it's called Way2VAT Spain. And this is a company that do a VAT reclaim in the Spanish market. It's a complementary solution to our current business line, and we are very pleased from that acquisition. In 2025, we acquired a company called RBC. This is the VAT consultancy and compliance company that I showed you before. We are very pleased for this acquisition. They are growing. There is -- between Way2VAT and RBC, there is a cross-sell between clients. So we are in the right path. And this is, by the way, the trigger for us to look for more acquisitions in that area. Lastly, technologically, technology is in our life, it's in our blood. We build this business based on technology. As I said, we started in early days with computer vision, looking on the image itself -- we call it like the same technology that for the face recognition that been presented like 6, 7 or 8 years ago, we've been using the same kind of solution, but this was proprietary. Whatever you are seeing here, it's proprietary, 100% developed by Way2VAT, no third party at all. And today, it's most likely based on AI. So it's very scalable one. So we see the opportunity with AI that we can work closely in very large scale with clients. Also, the accuracy is very high. We've been more competitive now because AI machine can replace human. So we are reducing cost as well. So this is going to different areas. But again, whatever you are seeing here, you will see here in this presentation is based about unique technology. We call it today AI, but it's based on 7 -- 8 patents that we started based on machine learning 8 years ago. Let me walk you through the numbers. So you can see the growth from 2022 when we started our journey in ASX. So revenue was about AUD 1.8 million. In '25, we've been about AUD 6.5 million. So we are growing in average about, I would say, 50% year-over-year. First half of '26 was AUD 4.2 million. We cannot provide any indication for forecast, but you can see a number. You see the growth for this year. We will keep the same momentum of 40% or 50% growth for this year as well. We have a growth compared to the revenue for -- in this quarter, Q2 quarter, it's about 30% on PCP. Quarterly cash receipt was up of 83% on PCP. So we are growing in any direction. Let me explain to you about the big element of the growth and the base platform of this business there. First, it's all about growth. So we are growing, and we will keep growing. So the main growth will come from clients, signing new contracts, enterprise clients. So we very much would like to see the growth running from 30% to 50% around that year-over-year. We have -- one of the main things that we've been -- the uniqueness in this platform, this technology is the high margin that we have. So the cost of goods sold of our business, about 18%, 1-8. So the gross profit is about 82%. So it's a very profitable business in terms of the operational cost. So it's just about the revenue. If we will get to certain revenue, and this is the year that we are aiming to, this will take us to breakeven to profitability. So the path is to P&L breakeven. We very much would like to see us this year and the beginning of next year, keeping that momentum and generating a cash positive and P&L and a positive EBITDA. So this is the idea. It's all about growth. It's all about having new clients. The growth, as I said, we can come by 2 main elements, having new clients and the acquisition. So in the pipeline, we have a few opportunities now, and we hope to close them shortly. This really can move the business to profitability faster. company that we are looking at now are should have -- must have a positive EBITDA. So we are not looking for any company that are bleeding or breakeven, looking for companies in the VAT area, and the VAT domain, consultancy and compliance in Europe, mainly in Europe that can -- the same like RBC, that they can provide their clients, we can provide our technology and our experience leading companies like that to the next level. So it's a perfect match having those companies. We are working with investment banker in the U.K. We have a very strong pipeline for potential acquisition, putting a lot of efforts around it. And I hope we welcome some good news to the market. Shortly, we are cooking something quite big here. About APAI and what we discussed before, the real-time invoice compliance validation. And this is something very unique in the market. As I said, mostly big team AP team are getting data, doing random check, checking them in different technologies. For us, technology is on the shelf. It's a real time. Clients can get -- can upload millions of invoices before they pay to the supplier. They can see if the invoice is compliant, yes or no, in different languages and then they can move it to the payment. The idea here is to give them the confidence that they can really build a robust system that they can trust the system. And through that, once they check the invoice and the invoice is compliant, they can -- nothing -- any activity is almost zero from their side. They need to move it to the ERP and to do that to the payment process. So the main hurdle today and the obstacle that AP team has in a large corporate is to validate the invoice itself. If we have a machine that they can do it automatically and can do it accurately, this is a revolutionary approach. And this is the idea with that system. Now with that product, recently, we signed an agreement with Coupa. Coupa is an invoice management player, a very large one in Europe based in the U.K. So Coupa is going to present Way2VAT like a solution to their clients. So it's going to be another channel for us. Bear in mind, mostly all our business is a direct approach. So we are approaching clients directly, and we are signing contracts. We don't have any channel. So we have a dedicated sales team in Europe running the business in all Europe. Now for the APAI and Way2Invoice, we started to look for a channel, and we build the channel. Coupa is the first one that will start presenting this product, our product to their clients. It's a large player, and we hope to get some nice benefit shortly. About the compliance services, this is RBC. So mostly, as I said, it's a big 4 grade VAT consultancy. We see mostly our clients be in touch with Ernst & Young, Deloitte, PwC that have issues. Now we do that for them through RBC. This is a unique approach. Looking, as I said, in that area, we are very much would like to acquire more companies, and we are putting a lot of efforts for a company like RBC. And as I said, we have a very strong pipeline. I hope we will come something we'll announce in the market shortly. It's going to be quite big. We do a lot of cross-sell between Way2VAT client and RBC and RBC to Way2VAT. Way2Invoice, this is the fourth pillar. We call it the e-invoicing and the APAI in one platform. So we launched it this quarter. So it's a combination of the APAI product and the e-invoicing in one platform. Why we merged these 2 products to one? Because in the end, you need to check the invoice and then you need to move it to invoicing format. Otherwise, no one will pay you and the government will be behind you. You need to go to be fully compliant. So therefore, we developed this solution. The invoicing, as I said, is a mandatory, started in a few countries in Europe, like you can see in Italy, in Greece, Germany will be next year. France is already there. So the main players, the main country, big countries in Europe are already there. I know that there are some talks in Australia and conversation doing that in Australia as well in New Zealand as well. We've seen Singapore invoicing solution and format. So we're going to be a player there. So we're going to provide our clients this access. So it's going to be hand check between -- it's a triangle and hand check between Way2VAT, the client with their supplier and the government. So it's a real-time check, all the time, real-time check, getting invoices, checking them if they are compliant, moving back to the invoicing format. So this is the idea. Therefore, we call it Way2Invoice, this solution Way2Invoice. So we are doing that in 20 countries, multilingual. And I think if we are looking now on that solution, we are the only player in the world that having these 4 pillars in one platform. So the invoicing in Europe, you can see the countries that are '26, '27, Germany, Italy, Romania, Belgium, Poland, Croatia, Greece, France for SME and Spain will be in 2027. In Asia Pacific, Malaysia, Singapore, India, Vietnam, and it's coming more and more countries. In Americas, you see Brazil, Mexico, Chile, Colombia, Peru, so it's coming, and this is going to be the next revolution in the market, the e-invoicing. So it's a big thing. Our clients have a budget for it. We see whatever talk we are talking with indirect tax, with tax managers, with VAT director, the main conversation is the e-invoicing. So we're going to be a player there with our solution, but not e-invoicing as stand-alone because e-invoicing standalone won't be enough. It's the invoicing with APAI, with AP compliance. So this is the only added value. Where the main added value we will provide. None of our competitors having that solution with invoice compliance and the invoicing in one platform. So when we are looking now on the fourth pillar the e-invoicing. So we are getting e-invoicing. We call it outbound and inbound. So outbound is -- we call it AR, account receivable. So I am a client. I have my own business. I need to send invoices to my clients. So we are building all that solution that you as my client, you will have will be fully compliant with the e-invoicing solution. We call it outbound and inbound is the AP invoice that we are getting through PDF, we can move it to the right format. Compliance build in, we said the APAI, and this is in one package. Our business model today, mostly for the VAT reclaim for the first pillar I mentioned is contingent based. So it's fees on fees. So from this AUD 125 million we provided to our clients cash-wise, we got between 10% to 15% in average as a fee -- as a success-fees. For the Way2Invoice, we changed the commercial here and the pricing, and we moved the business to SaaS fee. So it's going to be like a SaaS fixed fee monthly cost per invoice for our client. So they will pay us for per invoice per compliance of invoice. And this is the idea here. So if you have like 10,000 or 100,000 invoices, you pay like a few Ps per invoice, like could be 40p, 50p, 60p around that per invoice. And this will be -- this is the business model that we are having. So it's different than the VAT reclaim. Therefore, we've been trying to pack it under the Way2Invoice. Commercially, it's a different solution in terms of the pricing structure. Now looking on the Way2Invoice. So we launched it in July. We launched this Way2Invoice solution. In September, it will be a full market launch with a lot of advertisement. We will do it online activity around that. First sales, we think that we're going to get clients signing contracts in Q4 2027 and skilled by mandate and having this pillar, a main player in this -- in our portfolio in 2027. Okay. So how Way2Invoice works? As I said, outbound, we get the invoice, we create it, we convert it, validate it, transmit it and track it. The inbound we receive, this is the AP one. We check the compliance and we report and reclaim. Looking on the total available market, how sizable it is. And to see there is no issue of the market here. The market is huge. It's all about getting to the right number. So for the VAT reclaim for the first pillar, the market is about $20 billion unclaimed yearly. So $20 billion are sitting in tax authorities. No one reclaimed them. So I think out of the $20 billion on top of $20 billion, $5 billion have been reclaimed. So tax authorities are very happy. Companies are not asking for those kind of potential VAT or GST reclaim. But there is a lot of issues why they are not doing that. We are trying to solve this anomaly and to access this solution to the tax authorities between tax authorities and our clients. But it's still -- it's a big problem. It's a huge market, $20 billion. E-invoicing, we are talking about $60 billion, $58 billion market, and it's growing rapidly on a yearly basis. The invoice validation and compliance about $70 billion and the VAT advisory, it's about $91 billion. So if you are combining all this number, it's going to be quite sizable. Clients that you can see, it's -- we have about more than 500 clients. You can see here CBRE, you can see JLL, you can see TikTok, you can see Ernst & Young, you can see Sony. You can see Aviva, one of the largest insurance company in the U.K. You see Nestle, Sumitomo Bank. And this is like a short list of our clients, BASF, Pact Group in Australia. Yes. So this is Way2VAT. Anthony, thank you for your time. But one thing I would like to add regarding another opportunity that we are having here, and I would like to mention it. For RBC, we do a lot of advisory. Recently, a big opportunity came from one of, I would say, the top player in online, I would say, advertisement market. And this player is one of the largest. It's a company, I think, worth billion, of billion, billion, billion of dollar. Now asking them to help them for -- to advise them, moving goods between APAC countries to the U.K., mainly for 2 countries, Japan and South Korea for Black Friday in 2026 that will be in end of November 2026. And the idea that Way2VAT with another partner will provide that solution. It's like online stores that they would like to move their goods online between those countries to the U.K. Way2VAT and RBC will provide that solution to those small stores. It could be a huge opportunity in terms of number of revenue. So we are working with a partner on this. We hope to announce some figures and big numbers around it in the next few weeks, but this is something that we are working. We got like one trial with one of the online store already. We are talking about hundreds of thousands of store -- online stores that would like to move goods to the U.K. before the Black Friday. So this is a potential deal that we are having on top of what I presented. Thank you very much, Anthony.

Thank you, Amos. It certainly looks like you have a really big opportunity in front of you to execute on. So if I may, we have some questions for you. I guess the first one is how fragmented is the VAT reclaim market? And what gives you a competitive advantage?

Yes. I think it's a fragmented market by any means. We see a lot of players that do like with zero technology, VAT advisory and VAT reclaim. And there are some players like us that have some technology there. The main, I would say, advantage that we are having is the technology. It's all about the technology. I think what I presented here, the 4 pillars, none of our competitor having that solution in one platform. And this is one of the biggest advantage that we have in the market. Therefore, and the idea, and this is what we are aiming for is to acquire because it's fragmented market, companies with zero technology. And then we want to get their clients and we want to put our technology in front of their clients. So -- and this is the idea. And therefore, we are seeing the opportunity for us because the market is so fragmented.

Yes, it certainly is. It also seems to me that you're providing a solution in a market that is definitely counting its money far more closely than it used to because every piece of currency counts now when it comes to profitability. So if you have a solution that allows them to pick up those little pieces in a very cost-effective manner, then that must help their bottom line, a bit like Boeing when it can save money by shaving a little bit of plastic off of a piece without losing and saving weight and therefore, money for their customers. Can you partner with the -- if I'm assuming that, say, the big 4 accountants, tax accountants and other consultants, are you able to partner with them and provide a solution that would be...

I think this will be the second part of our strategy. First, we need to see that we are selling the product in very large scale. As I said, it's the first time we do indirect approach by having a channel. Coupa is going to be one of the first partner using our solution. And down the road, we very much would like to approach the big players like Ernst & Young, Deloitte, PwC, KPMG, providing or presenting our solution. So this is our -- yes, in our mind as well.

Do you need to make acquisitions if you can partner with especially the big 4 or...

Yes. But big 4 could be a very long sales cycle, and you don't know how long it will take you or what will be the outcome of it. And we are talking about things like bread and butter for tomorrow. And for tomorrow, we need to do those acquisitions.

When looking at the 4 pillars, which do you see as the fastest growing? Or is it all given how interrelated and the cross-sell opportunities, is it...

I would say the growing or the potential growth will be for the Way2Invoice is the APAI and the e-invoicing solution in one platform. This should be the #1. Of course, the bread and butter, the VAT reclaim, we will keep doing that, and we are signing contracts. We won't jeopardize that. The VAT consultancy is mostly depends on acquisition and the company we will acquire.

Do you think that there's -- I know that in the past, there's -- and even now there's a bit of a receivables issue, not on the collections, but just on the length because of the counterparties with being governments, it can take a very long time so -- to get the reclaim money. So is there an ideal mix of business that you see that will enable you to bring forward that cash flow positive, EBITDA positive point and at the same time, sort of give you a much better business mix?

Yes. All the 4 pillars, the main trigger based on the technology we develop is to get to that direction. We very much would like to reduce the dependency that we have on government bodies for the VAT reclaim. Therefore, we came out with the other 2, 3 pillars. Actually, the way to invoice, it's a SaaS-based. So there is no government in that area, not at all. It's between us and the client, cost per invoice. They will pay us monthly. And the VAT compliance and VAT consultancy. So this is a routine business on monthly basis billing. So therefore, we are heading to that direction.

I know in sort of looking at e-invoicing becoming mandatory around the world and the growth that we're seeing in the desire for it to be mandatory by governments. How central do you see that to your business model? I did find a whole list of countries and where they are when it does come to mandatory e-invoicing. So I'm interested to know just how central it is to Way2VAT.

Central in terms of our business line or...

Yes. Yes.

In the end, as I said, this is one of the main engine for us for growth. So we see that a kind of mandatory for us to have a growth in this business. Invoicing is going to be a standard in most of the tax authorities around the globe, and we would like to be a major player there. But being like just an e-invoicing provider won't be enough. Therefore, we came with APAI, with AR and AP compliance. And we are the only one. Let's see if the others will try to duplicate it. But the idea is to come with end-to-end solution, not just for the invoicing solution. So therefore, the 4 pillars really will help us because we can do also VAT reclaim, but mostly is the AP compliance and AR compliance with the e-invoicing. This is, I would say, the main added value advantage that we are having here.