Avalara Enhancing Its Products With AI And ML

According to a Markets and Markets report, the global tax management market is expected to grow at 12% CAGR to reach $27 billion by 2024 from $15.5 billion in 2019. Seattle, Washington-based Avalara (NYSE: AVLR) is a leading player in tax management market.

Avalara’s Financials

For the recently reported fourth quarter, Avalara’s revenues grew 40% to $107.6 million, ahead of the market’s forecast of $100.17 million. Net loss was $12.3 million compared with a net loss of $2 million a year ago. On an adjusted basis, net loss was $0.03 per share compared with the Street’s forecast of a loss of $0.09 per share.

By segment, revenues from subscription services grew 39% over the year to $100 million. Professional services revenues grew 48% over the year to $7.6 million.

Avalara ended the year with revenues of $382.4 million and an adjusted net loss of $0.12 per share. Calculated billings for the year grew to $423.4 million compared with billings of $314.5 million a year ago.

Among key metrics, it ended the fourth quarter with nearly 11,960 core customers compared with 11,240 core customers a quarter ago and 9,070 at the end of the previous fiscal year. Net revenue retention rate was 111% for the quarter and the year.

Avalara expects to end the first quarter with revenues of $107.5-$108.5 million. It forecast revenues of $470-$474 million for the year. The market was looking for revenues of $106.2 million for the quarter and $467.8 million for the year.

Avalara’s Growth Focus

Avalara has been driving market growth through the use of advanced technologies to replace manual parts of the compliance process. It has been investing in the application of AI and ML tools. Last year, it acquired AI capabilities from Seattle-based Indix for an undisclosed sum. Indix’s AI technology and expertise had helped collate vast amounts of data on product information. Avalara is using the acquired technology to strengthen its tax content database that includes international product codes and classifications to taxability rules.

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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