Wonderful. Thanks very much, Simon, and Simon Hinsley from NWR Communications, who is working on our investor relations. Very pleased to be here to present to you today. This has been an incredible quarter and a heck of a lot of hard work from the team. A great opportunity to share that with you. We will keep it fairly short and sharp today, and give you some time for Q&A in the end. This is being recorded, and will be made available on our Investor Hub Live. If we just jump into, obviously, first key point is record volumes in this quarter. While we expected higher transactions with Payday Super, we are seeing them, and there are still more customers to meet the Payday Super requirements. What we are really delighted with is the growth in users from our existing fund clients starting to come on live onto the platform.
Where we spoke to you a quarter ago, there has been a steep jump, and we expect that trend to continue. That really is key for us, because as you all would be aware, activation of clients really is the lead indicator for our revenue, and it is that activation, making clients come onto the platform and go through their complete setup, that has effectively doubled in that time. In addition, obviously, you can see early signs from that already flowing through into our ARR, so our average revenue per user on an annualized basis. When we record it from this last month, so the end of the quarter month, and roll forward 12 months, we jump to an ARR of AUD 17 million. You will see that jump month- by- month- by- month now, as we get to our target state towards the end of the year.
Most importantly, as we foreshadowed in the capital raise, this was going to be a month where we would be spending at our highest to drive through for the business and bring this growth on, which brings our reward particularly towards the back two quarters. Given the current growth rate, that really puts us as fully funded to cash flow break-even. We are excited by that, and that is obviously by the AUD 14.6 million cash at bank at 30th September. If we just jump ahead, let me give you some of the highlights and key metrics, and I will explain through these. I mentioned active organizations. This is an organization coming on and going through the full vetting, so KYC, KYB, AML checks, full identity checks, and account control verifications.
This has risen from 31,000, where we were at 30 June, so at the end of the quarter, we are at 60,000 organizations. A long way, actually now towards our target of 111,000 thereabouts. The growth rate in particular, 111%, which is fantastic. That is still growing week on week, so we are delighted with that. The registered TFNs, so that is when a company then does their setup and starts to load all of their employees, that has gone from 1.6 million- 2.43 million, a 50% jump, which is enormous. Also contributing TFNs from 420,000 has jumped to 1.23 million, so 193%. That is the number we care most about. That is the number that we want to see drive closer toward the 3 million by the Christmas mark, at a minimum standard, is what we are hunting for here.
Activation rate has gone up, so that's that conversion from putting an employee on and doing your loading to actually paying contributions, which is where we make our money. Look, fantastic growth across there, that again, 60% is that jump for, or 107% on organizations towards our goal. What you're seeing there, these are really the lead indicators. And the top line, in this quarter alone, we have processed AUD 2.57 billion across the platform, which is quite high given the number of users. That AUD 2.57 billion, just to give you an idea, our last year's entire amount of cash processed over 12 months was AUD 3.98 billion. So, sitting at AUD 2.57 billion for the quarter, with this early group of customers on board. We're fairly excited by that, and that gives us good confidence, actually, in the quality of the platform as well. Thanks, Karen.
I'll touch on a couple of the operational highlights. So, what's been going on? We mentioned we're running three business models at once here. We are in standard operation once a customer comes on board. We are in hypercare to bring the customers on board, and we're continuing to develop features and prepare ourselves for more growth, more relevance, more stickiness in the market. Couple of the things that were delivered over this quarter, on top of obviously the growth that you can see. Number one, that I just draw your attention to is our fraud monitoring. We have had a very large investment in both manual and automated fraud monitoring. When we're bringing on this volume of businesses, we've not seen these accounts before, so we have to be incredibly diligent, and our technology has to be highly robust to ensure that we minimize or reduce fraud.
I can happily say that we've achieved those goals, and in fact, we are at, in terms of fraud, that is at the cost of our business, through either a weak process or a gap, is at 0. So we're delighted by that. We'll continue to over-invest there because we think that is one of the best signals of strength of quality. Second area is just complex employers, and just to talk, we did a major update to be able to handle Australia's most complex business structures, which are franchise-based businesses where there is multi-ownership, different controls as to who pays versus who makes the payment, who decides what super gets paid, and this is to comply with the franchise-based laws under Fair Work. That was a big uplift.
That was achieved in relatively record time, and we're very impressed by what the team's been able to do there, and that has come through the system at error-free, which is for that size of work. That's telling us the team is bedding down well. Final bit was PaidRight, and I just came out of a meeting actually with our partner company, CloudRock. We were able to deliver with PaidRight using their product as an API, and CloudRock connecting Workday directly to it. In a 12-hour Workday Developer Event, we came out as the winners. We were able to take data directly from Workday and do the Better Off Overall Test for a retail worker. That product has actually generated such interest, we have actually several businesses already wanting to queue up to buy it, even though that came straight out of a 12-hour hackathon event.
Two things to note out of that, the quality of the product to be able to connect via the API, but also the market appetite for our broader services is quite clear. That has really been key operational insights. Others we can talk about at another time, but just to give you an idea of what the team has worked on. Karen, maybe over to you on share some of the financial highlights.
Yeah, thank you, Trent. I will bring up the slide. As Trent mentioned, this quarter was really a transitional quarter between predominantly finishing all of the implementation for our MUFG funds and now moving into the operational space. We performed the capital raise partly to fund that transitional phase until we see the transactional receipts coming in. At the end of the quarter, we finished with a AUD 14.6 million cash balance, and we expect that that will provide sufficient funding until we get to cash flow positive, as per our forecasts. The closing cash balance was also aligned with where we had budgeted as well, so that was good to see.
The Q1 was really affected materially by some timing differences, so we do not expect to see that level of cash outflow continue into the rest of the year, and I will go into that a little bit more in a minute. The cash receipts were lower than the prior quarter and the prior comparable period. That is really, again, we did not see any transactional revenues from the MUFG funds yet. They have started to flow through in Q2, and Trent talked through those great figures that we are seeing with the onboarding and activation rates earlier. So that is really good signs that we will continue to see that trend upwards and that we will get the revenues on the back of that. In terms of cash outflows, the capital raise, we really looked at what were we funding.
Funding the extended hypercare and data migration for AustralianSuper, and also increasing our growth capacity with some new roles, really in that kind of operational project management space, and some engineering in our Super Pod, and also in our [Wrkr Pay], which is all about where is the strategy of our next horizon going, so to make sure that that is being developed and implemented properly. Then we had the PaidRight platform readiness that Trent talked about, so just making sure that the platform is ready to go on the integration with Workday to make the most of that opportunity in Q3 and Q4. Then we had the additional fraud controls, which I think Trent said over-investing, but I probably just would never say we could over-invest in that space.
Obviously know that this area with cash movements is rife with fraud, and we have really been successful to have no fraud cases that we have had to pay out on this platform since it is launched, although plenty of attempts. It is great to see those fraud controls really working well. I think the big question is, how do we get to cash flow positive. We have got a really solid plan around what happens through Q2, Q3, and Q4. Firstly, obviously, is the transactional revenues that we will see continue to grow, and those cash receipts will continue to grow through the year. We are lowering costs. We are winding down the subcontractors that have been in place for the hypercare and data migration.
We have also had some contractors making sure that our data lake and warehousing is correctly set up for appropriate reporting to funds and MUFG and ourselves. They will all wind down by December. It is quite a material cost saving. At one point, it peaked at AUD 500,000 in a month on that cost. That has already come down, and we are continuing to wind that down to 0 by December. The other place is the rationalizing of our development environments, now that we are really kind of moving into operational phase. We are looking at bringing that down, and our infrastructure costs will start to scale as we just move to that operational transactional phase. The third area is just in our organizational structure. I think I have talked about this previously.
There is going to be a natural shift in the business of the organizational structure as we move through this phase as well. That is the plan. We are still targeting our AUD 32 million cost base for the year. I am happy to take any questions around that when we get to the Q&A. Back over to you, Trent.
Great. Thank you. If we just talk about, maybe I will explain a little bit about the path to the gateway revenue, and this also, I think, answers one of the questions in there. Right now, we are processing and onboarding all of the users for our target funds with MUFG for processing their clearing house, so payments and gateway messages into the SuperStream Transaction Network. We get paid for that piece. There is also a second leg that we are paid for equally, which is from out of the SuperStream Transaction Network and into the fund. That is around about half of our revenue. Actually, of that revenue, it is off a higher volume of transactions, but we do not have to move the money in that particular process. That goes live into the end of November, and we see that go all the way through to February.
The STN, that fund processing commences, and that is an overnight shift. Those are not onboarded users. That is every user for our current contracted funds switching over, and that happens between the end of November through to February. Today, the revenues that we see are half at a transaction level of what we will expect to see in Q3 and Q4. Hence our confidence. In addition to that, the current systems that our fund clients use to take money from the employers and the gateway message and put it into the SuperStream Transaction Network, those systems are moved to read-only and start their decommissioning process for the MUFG-owned systems. It starts at the end of November and goes through to the end of December. There is contingency for some clients that may overhang. However, we then expect to see a large shifting across at that point.
Those two key blocks actually are what sees our transactional value drive up much, much higher than where it is right now today. Also, we have expected into Q3 our R&D offsets, which just as an additional set of revenues, which is really the payment back and offset of prior work done in last financial year.
Yeah, and just to add to that, and thanks, Trent, because I have seen a couple of questions there kind of saying that the ARR does seem to be lagging a little bit at that 30 September. Yeah, if you take into consideration this additional transactional revenue from this part of the SuperStream Transaction Network into funds transactions, we will see that lift. That will be great to see. The majority of those numbers are coming on in December. That is kind of like the first tranche to go is with our largest fund, and then the next biggest fund is scheduled for January with the smaller funds in February. We will get kind of at least the six months of that transactional revenue once that switches over.
Yeah. Great. Thanks, Karen. If we jump to, some of our, obviously, our key priorities. I think Karen really touched on these, but the focus you will see out of our business is, we are all eyes and all attention to this second leg of the gateway, which brings in 50% of the revenue, so making sure that turns on live and appropriately. The lowering our costs, as Karen mentioned, that will continue now. Also, new funds in the pipeline. We have been delighted by the fact that MUFG so far has been successful with ACCC approval on Grow, and that is bringing a larger group of funds back to the table, another four funds, but effectively another 2 million odd potential users, which just increases, nearly doubles our sales funnel and activity with MUFG that we will talk a little more about around AGM time, I suspect.
The non-fund channels just came out of that meeting, which was off the back of Workday. Between both Workday and SAP, both of those two channels, the sales pipeline that has grown from that work, we expect it is a much more profitable user for us. Hard to get the same volume as the biggest super funds in Australia, but at a profit level and volume, we are very excited by what they will bring to the table around Q3 and Q4, so the very back end of this year financially. Thanks, Karen. That is the end of the presentation, but maybe we can take some of the Q&A now and work our way through that list.
Thanks, Trent. Thanks, Karen. First question, what is the actual contractual arrangement for invoice payments for Payday Super transaction by the funds? 90+ days does not seem normal for real-time digital transactions.
Yeah, so it is 30 days. That is what is contracted. It was a little bit delayed in Q1. We would have liked to have seen some of the revenues come through. We were just working with MUFG to get the right purchase orders in place. They are obviously material, and they had to go through a lot of different approval layers at MUFG. They are all in place now, and we have started invoicing, so we have caught up with the September quarter transactions, and we do expect that to be on the 30 days moving forward.
We have not heard too much around the cyber partnership with Transmit Security. It has obviously been successful. Can you elaborate on the partnership?
Yeah, so, and I don't want to give them too much credit, because they've done a portion of it. What they are very good at is bot detection and identifying, are we really dealing with a real human and real user, as well as for some of our identity checks. I will, on the fraud side, actually, I've got to take my hat off to Karen and our CISO, McIlwaine, who have pulled together a very rigorous process, where we are both manually checking every transaction and variance and putting that information into, effectively, into a machine learning capability to be able to pick up and identify those issues in real time. Their work has been forensic, so that has been a great help. The fraud engine that we will finish with in this market will certainly be a competitive edge, as it's already proving to be.
Great. Thanks, Trent. Just based on the current clients, what's the estimate for total registered TFNs?
Yeah, so we have obviously our own traditional clients, which sit around the 700,000 for different services at TFNs. We're sitting 4.4 is our target at the front end, or 4.4, sorry, in total, which adds to ours. We're still targeting that AUD 5 million, although on what we call the first leg of transactions, we will be very happy when we reach that AUD 3 million level, in terms of our ARR projections. That really underpins it. It's nearly double that number for the second leg of transactions, so it's around AUD 6 million. The net off between the two is quite a healthy number. We'll continue to grow all through the year, though, but we're certainly targeting to get to that AUD 3 million before we hit the midpoint of the year.
You obviously called out 4.4 million MUFG TFNs contracted. Is that still the case?
Yeah, very much so. In our arrangements with MUFG and their funds, we want those to all be onboarded and of a quality, where we just have to move at the pace with the funds to onboard each of those. I've probably become more reluctant about the timing we get the full portion. However, the high-value and high-volume targets are all what we are currently bringing on, which is why we're seeing our transaction volumes go up.
There's a few questions here, so we might go one by one. What's the average onboarding rate per day so far?
Look, it varies. We've had mixes between 10,000 in a day and 30, 35, 37,000 at the peak. We are well within probably the midpoint of the chart that we last shared, so confident on that onboarding. We do a measure every day, so we can see flat periods, and it usually syncs directly with the marketing activities with the funds. As soon as we see a spike in the email chain and the data transfers, we see that number scale up dramatically. So, it ebbs and flows on a daily basis between the 12 and the 30, but we are well within our mid-range for our target.
Does the 5 million users or employees contracted figure include ART?
No. No, ART, we do not charge on a per-user basis. We charge them on a fixed license fee as well as services, so that number stays separate. We would ideally love them to come onto this platform and move into this model. We will continue to nudge them that way. But no, at this stage, we do not include those in our 5 million number, because they are a different We do not measure their value by user, so it would skew the numbers.
offline 2 million members with Grow. What platform do they use at the moment to facilitate Payday Super?
Yeah, so most of Grow customers are on Westpac, same as AustralianSuper were, and also one, as a legacy, was on the same platform as Rest. So, we have good background and good confidence that we have a position or an offer that is highly competitive for them. The Grow platform itself is an administration platform, the same as MUFG's Aspire, just a modern version. So, it still requires a clearing house gateway infrastructure, and that, on the majority of the numbers, is Westpac.
We partner with anyone moving towards NPP and PayID in pay?
Do we partner? We are bank agnostic, so we manage the entire process ourselves and then pass off on the banking rails. We have a couple of conversations in place to increase the number of providers so that we can ensure that we have got the best value for money for our funds. Today we are using Westpac, because Westpac is our main banking partner.
Got a few last questions. I am not sure if you give specific forecasts around this, so just noting that. Please explain what ARR we should expect specifically from PaidRight by the end of this financial year, and why you are confident with the long-term prospects for this acquisition.
I can touch on that. We expect it to maintain its current rate of total revenue of around AUD 4 million ARR of one this year. However, our growth is going higher in terms of sales rate, so we think we have built the right underpinnings for next financial year, as was the plan. We are really comfortable for a couple of reasons. One, as a business, although we have shifted services, but grown a larger volume of customers, so we have come off some of the traditional services revenue, which means we do not have concentration risk.
It is a good book of customers. We have gone out to market in this project with Workday and CloudRock, and the level of demand is far higher than PaidRight has ever seen for the PaidRight product, and that is off the back of Wrkr's own partnership already with Workday and CloudRock for super contributions.
That is a pretty good indicator for us. We have had the same level of feedback from SAP integrators looking to partner with us. Look, we are confident in PaidRight. I think the test will be when you see PaidRight in the same screen as Wrkr on the Wrkr tenant, and someone can pick and select. That is when we expect to see the volumes really scale. At this stage, we are bullish on PaidRight. Great acquisition, not a cost burden, and I would say, in net for net, we are getting more value out of the people from PaidRight into some of our integration and capability than going back the other way at this point.
How many of these quarter TFNs onboarded are active workers that would utilize our services rather in retirement phase?
All active. When we talk about numbers or TFNs, these are all TFNs that are in the contribution phase, so they are still adding to their super. We do not manage them when they are in retirement. We only manage them in the accumulation phase. That said, we can see the shift starting to come in numbers. The funds are replacing higher volume than they are losing by member, but the members that are retiring are taking a large chunk of fund compared to the funds going into the system.
We do not see a negative impact from the shift to decumulation. Population growth in and of itself holds our position and lifts us, but we are already working on decumulation solutions because we have the same infrastructure that is required to take money out and pay it to an individual, is the same as what we do for wage payment today.
Last question. Just a question around operating leverage once hypercare ends. Q1 deliberately front-loaded contractor costs come out through Q2. Just in terms of revenue scaling on the platform, how should we think about operating leverage in the business once costs are normalized at steady state?
Do you want me to go first?
Take that one, Trent, if you like.
Yeah, okay.
Yeah. Look, we're going to be moving into an operational steadiness state, and we're looking to work closely with MUFG and their operations team to actually find more efficiencies there. A lot of work has been done to automate already where we can on the operational services of the platform, but we know that there's still work that can be done. We really see some great efficiencies to be achieved there working together, and we actually had a call with MUFG earlier today, starting to talk through that now that we are really in this transition phase and steaming ahead. Yeah, I hope that kind of answers the question.
That concludes the Q&A segment. I might just hand it back to you for closing remarks.
Look, we would just say to everyone, obviously, we are bullish about where the business is at. This is an exciting phase for Wrkr. The hard work is obviously building these contracts and selling and bringing super funds to the table to make a change for the first time, for some of them, in certainly 13- 16 years. That hard part has been done to guide them through and give them the technology, but be working with them with their clients. That is the phase we are in right now, and that is exciting. As technologists, we are only valuable to the extent our technology is being used in anger. Obviously, we feel the back end of this year is then when we and our investors then get to start to see the financial reward for that hard work.
These two quarters in front of us, we are still operating three business models and sleepless nights, but actually, we are really excited. We are enjoying it, because we can actually see the reward that comes at the back end now. Oh, you are on mute, Simon.
Good way to finish. I was just saying, that concludes the webinar. We can finish up there, and thanks, everyone, for joining. Have a good weekend.
Great.
Thank you.
Have a great weekend.