Xero has bigger losses as it grows revenue by 36 percent
Xero has reported its results for the full fiscal year to 31 March, with the cloud accounting firm once again reporting a net loss, as it also increases its revenue and positive cash flow.
For the 12 month period, Xero recorded a net loss of NZ$27.1 million, compared to the NZ$24.9 million net loss from the year prior.
Operating revenue, however, grew to NZ$552.8 million, which represents a 36% increase year on year.
Xero also recorded positive cash flow for the first time, amounting to NZ$6.5 million for the full year, which was an increase of NZ$34.5 million from the year prior.
Operating expenses and asset impairments for the full year was NZ$470.5 million, up by almost 33%, while earnings before interest, tax, depreciation, and amortisation (EBITDA) for the full year increased 52% to NZ$73.1 million.
According to Xero CEO Steve Vamos, the company’s focus for the year was to increase its subscriber base, with the company adding 432,000 subscribers to put its total subscriber base at 1.8 million.
“We will continue to prioritise investment in growing our subscriber base, improving our capability to deliver more services to our customers and partners, and expanding our presence in new markets such as Asia, Canada, and South Africa,” Vamos said.
Its total lifetime value of subscribers jumped from NZ$3.2 billion to NZ$4.4 billion, which is a 36% increase.
The Australia and New Zealand region continues to be where Xero makes most of its bread, with the region bringing in revenue totalling $NZ359 million. The region also had 1.08 million subscribers as at 31 March.
Xero also performed well in the UK, with the country’s subscriber base growing 48% to 463,000 and revenue increasing 45% to NZ$119.5 million for the full year.
In North America, the company’s subscriber base increased by 48% to 195,000 while its revenue went from NZ$31.8 million to NZ$44.2 million.
During the year, Xero had acquired UK-based Instafile to bolster its presence in the United Kingdom, as well as Canada-based Hubdoc to accelerate the company’s ability to automate the flow of data.
“As we head into FY20 and beyond, we’re making great progress towards our strategic priority of driving cloud accounting adoption globally,” Vamos added.
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