Wrkr (ASX:WRK) executives used the company’s quarterly investor webinar to outline progress toward Payday Super readiness with major superannuation clients, provide a cash flow update, and explain the strategic rationale behind its all-scrip acquisition of payroll compliance business PaidRight Holdings.
Operational milestones: contracted users, fund rollouts, and headcount
CEO Trent Lund reiterated Wrkr’s positioning as a RegTech business focused on “compliance from hire to retire,” with a near-term emphasis on superannuation processing as a beachhead for expanding into adjacent compliance workflows.
On customer implementations, Lund highlighted:
- Rest Pay has gone live, which he described as a branded solution being taken to market by Rest beyond its existing employer base.
- AustralianSuper has moved into production, with testing underway using live payments; Lund said the company expects an early March launch, subject to AustralianSuper’s readiness criteria.
Lund also said Wrkr’s headcount has reached about 80 (including contractors), with a longer-term view that about 100 staff is an appropriate scale. He noted the PaidRight acquisition adds a further 14 people. He added that cash at bank remained “very, very healthy,” citing more than AUD 16 million.
From a market footprint perspective, Lund said Wrkr’s presence across AustralianSuper, Australian Retirement Trust (via Beam), and Rest represents about 36% of the superannuation market, which he argued is important for scale and credibility.
Quarterly cash flow and investment focus
CFO Karen Gilmour walked through quarter two cash flow outcomes. She said cash receipts were AUD 3.2 million, noting they were slightly lower than they otherwise would have been due to an overdue invoice of around AUD 880,000 at quarter end. Gilmour attributed underlying momentum to the achievement of additional milestones under Wrkr’s MUFG contracts, ongoing change requests and development relating to Hong Kong, and continuing platform licensing and transactional flows with Australian Retirement Trust, CSC, and IOOF.
Gilmour said the company recorded AUD 1.8 million of capital investment in the quarter, aligned with delivery work for Rest and AustralianSuper implementations, API investment for digital service provider integrations (she referenced Workday, Solaris, and SAP), and efforts to capture the small business market.
Looking ahead, Gilmour described the current quarter as “very, very important” due to implementation delivery, and said the company expects to begin seeing transactional flows and revenue increases as employers are onboarded for Rest and AustralianSuper, with the aim of onboarding occurring ahead of Payday Super.
PaidRight acquisition: price, structure, and strategic rationale
Lund said Wrkr acquired 100% of PaidRight Holdings for a final transaction value of AUD 13.9 million, completed as an all-scrip deal. He said 90.9 million shares were issued, representing about 4.8% of Wrkr’s issued capital. Lund also disclosed he had previously been a director of PaidRight and said that familiarity contributed to confidence in the asset and team.
In explaining the rationale, Lund argued there is “great risk” in being “only Super-based,” given payroll vendors could expand into adjacent compliance spaces. He described payroll and wages as a more complex regulatory domain than superannuation, with “tenfold” more “client compliance moments.”
Lund said PaidRight’s technology addresses award interpretation and enterprise agreement risk, including the “BOOT” test (better off overall test), and characterized PaidRight as a mathematics-based engine that converts written industrial relations interpretation into computer-readable logic. He said the product has benefited from a long R&D history, including origins at CSIRO and subsequent development through CSIRO and PwC Ventures.
He also cited testing and scale indicators, including that the software has been tested across more than 500,000 employees spanning diverse roles, involving about AUD 15 billion in wages over five years. He also referenced the complexity of award interpretation, estimating the General Retail Industry Award alone could involve “over 72,000 interpretations.”
Go-to-market plans and revenue mix: SaaS focus with services transition
Lund said PaidRight’s operating revenue is about AUD 3.4 million today. In response to investor questions, he said “a little under a third” of that revenue is “true SaaS,” while services work has historically been a significant component. He added that services engagements often lead to SaaS, but services revenue can appear inflated because remediation projects look back seven to ten years.
Wrkr’s plan is to prioritize SaaS-based growth while continuing to deliver both services and SaaS. Lund said Wrkr believes it can improve PaidRight’s go-to-market outcomes by leveraging Wrkr’s scale, partnerships, and customer reach, potentially at a lower cost of sale than PaidRight could achieve on its own.
He described PaidRight as effectively offering three product groupings:
- Pay precision checks prior to pay approval
- Wage remediation to assess historic pay outcomes
- Risk assessments
Wrkr expects to allocate around AUD 1.5 million to AUD 2 million toward PaidRight, covering product development enhancements, working capital, and lead generation. Gilmour added the investment will include items expensed through the P&L (such as marketing) and capitalized costs associated with integration work, with amortization beginning from the acquisition date.
Lund said the business will operate standalone through the end of the financial year while sharing a common office and back-office support, with deeper integration planned later. He also previewed a planned offering he referred to as “SuperRight”, described as a more bite-sized subscription layer intended to help customers prepare for Payday Super and potentially serve as a pathway to broader PaidRight modules.
Competitive landscape, AI, and additional opportunities
On competition, Lund addressed Westpac’s QuickSuper, saying he did not believe it would take a sizable share of the small business clearinghouse market, in part due to QuickSuper’s positioning within Westpac’s institutional banking. He said interoperability readiness at the gateway level is required across the industry, but emphasized employer experience and capabilities such as stapling as key differentiators.
When asked about AI, executives characterized it as more of an opportunity than a near-term risk, noting Wrkr handles highly sensitive personal information and cannot send that data offshore. Lund also said the company uses AI for productivity and prototyping where it does not touch critical data. On PaidRight specifically, Lund said Wrkr’s testing suggests AI models are not yet accurate enough for payroll compliance use cases where “you can’t” tolerate hallucinations.
On offshore expansion, Lund said the company’s Hong Kong work with MUFG was profitable, structured more like services delivery with typical “30% margins,” while ongoing business would align more closely with SaaS margins. He said Wrkr could do more internationally, but that offshore expansion is not part of the current calendar-year strategy given the scale of domestic opportunities.
Lund also said Wrkr continues to work with MUFG and other funds on implementations, noting four boutique fund slots are already booked through MUFG and that Wrkr is also engaged with additional funds directly at earlier preparation stages.
About Wrkr (ASX:WRK)
Wrkr Ltd, together with its subsidiaries, provides software as a service to solve compliance needs for companies to process pay, superannuation and SMSF contributions, onboard new staff and contractors, and check credentials of new employees and contractors in Australia. It offers Wrkr PLATFORM, a cloud-based compliance platform for handling messaging; Wrkr PAY, a superannuation gateway and clearing house, and payment handling solution for processing of employee pay and super contributions for payrolls and superfunds; Wrkr SMSF Hub, which provides ATO messaging and contributions compliance for self-managed super funds; and Wrkr READY, a white label employee onboarding solution to manage the compliant onboarding of full-time and casual workers.
