WELLINGTON, NEW ZEALAND--(Marketwired - Apr 23, 2015) - Xero Limited (
Paying customers grew to 475,000 at 31 March 2015, up 67%, and subscription revenue grew 81% to $120.9m. Xero's recurring revenue model means that it commences its 2016 financial year strongly with $159.3m in annualised committed monthly revenue, a 71% increase on the same time last year.
The Company will continue to invest to fuel growth and scale while maintaining its focus on building a high margin business model. The business maintained a strong cash position with $268.9m of cash at 31 March 2015 to continue to invest in creating long-term shareholder value.
Highlights of the financial year ended 31 March 2015 include:
Revenue
- Subscription revenue of $120.9m, up 81% from $66.9m in FY14
- Constant currency subscription revenue of $122.5m, up 83% compared to FY14
- Operating revenue of $123.9m, up 77% compared with FY14
- Annualised committed monthly revenue (ACMR) of $159.3m, a 71% increase on FY14
Operating Loss
- The net loss after tax for FY15 increased 96% to $69.5m, increasing to 56% of operating revenue from 51% from FY14, reflecting the investment in product development, and sales and marketing
Balance Sheet and Cash Flow
- Cash of $268.9m available to fund future growth and expansion
- During FY15, the Company used $88.4m of cash and cash equivalents in operating and investing activities compared to $48.4m during FY14
- Xero raised $147.2m in March 2015
Business Highlights
- Paying customers increased to 475,000 at 31 March 2015, an increase of 191,000 or 67% compared to 284,000 last year at 31 March 2014
- Xero added 403 employees, and now has 1,161 staff globally to support customer growth across all markets and to scale product development. Xero anticipates a slower rate of employee growth in FY16.
| Regional Breakdown | |||||||
| Year ended 31 March | |||||||
| Subscription revenue | 2015 | 2014 | % Change | ||||
| New Zealand | 32.6 | 23.2 | 41 | % | |||
| Australia | 56.5 | 27.7 | 104 | % | |||
| United Kingdom | 19.3 | 10.1 | 91 | % | |||
| North America | 7.7 | 3.3 | 133 | % | |||
| Rest of World | 4.8 | 2.6 | 85 | % | |||
| Total | 120.9 | 66.9 | 81 | % | |||
| Year ended 31 March | |||||||
| Paying customers | 2015 | 2014 | % Change | ||||
| New Zealand | 138,000 | 102,000 | 35 | % | |||
| Australia | 203,000 | 109,000 | 86 | % | |||
| United Kingdom | 83,000 | 47,000 | 77 | % | |||
| North America | 35,000 | 18,000 | 94 | % | |||
| Rest of World | 16,000 | 8,000 | 100 | % | |||
| Total | 475,000 | 284,000 | 67 | % | |||
Comment from CEO, Rod Drury "We're delighted with our achievements this year. We focused on adding and integrating 400 talented people to our team for critical mass around the globe. We're extremely proud to have done that while continuing to drive strong revenue and customer growth across all markets. We have emerged as the cloud accounting leader in three countries and are seeing positive momentum in the U.S. market," said Rod Drury, CEO, Xero.
"Our platform now provides the most comprehensive small business accounting experience for customers, winning against desktop solutions while delivering the benefit of running a business anywhere, anytime, from any device. We have delivered payroll and inventory across all markets, and we will continue to add value to small businesses, accountants and bookkeepers through continued innovation. We are very excited about FY16 and expect strong growth to continue in all our core markets for the foreseeable future."
FY15 Commentary Xero continues exceptional growth as the leader in cloud accounting in New Zealand, Australia and the United Kingdom, with annualised subscriptions of $39.5m, $74.2m and $25.9m respectively.
Strong growth is expected to continue in these markets, and Xero has focused on building infrastructure to support its expansion in the U.S. market. The U.S. remains a significant and addressable opportunity with the majority of small businesses unserved by cloud accounting software. Xero is well positioned to meet this need through its complete small business accounting solution, purpose built for the Cloud and mobile devices.
During the second half of the year the U.S. management team formed, led by U.S. President Russ Fujioka. The focus was on ensuring a solid foundation for North America to enable it to scale, and during the second six months customer growth was 300% greater than the first six months.
Xero continued to build its Global Leadership Team appointing Andy Lark as Chief Marketing Officer, Angus Norton as Chief Product Officer, and San Francisco-based Graham Smith was appointed to the Board as a non-Executive Director.
An additional $147.2m of capital was raised in March 2015 from Accel Partners and existing investor Matrix Capital Management, positioning Xero strongly with $269m of cash.
Investor calendar (NZT) 24 April 2015, 9am NZT - Investor conference call 21 May 2015 - Annual Report release 22 July 2015 - Annual General Meeting (Wellington, New Zealand) 19 November 2015 - Half Year Interim Report release
| XERO Limited | ||||||
| Condensed Consolidated Statements of Financial Position | ||||||
| (Unaudited, in thousands) | ||||||
| As at 31 March | ||||||
| 2015 | 2014 | |||||
| Assets | ||||||
| Current assets | ||||||
| Cash and cash equivalents | 58,866 | 14,886 | ||||
| Short-term deposits | 210,000 | 195,000 | ||||
| Trade and other receivables | 21,499 | 14,374 | ||||
| Short-term derivative assets | 3,151 | - | ||||
| Total current assets | 293,516 | 224,260 | ||||
| Non-current assets | ||||||
| Property, plant and equipment | 16,631 | 9,856 | ||||
| Intangible assets | 64,057 | 34,828 | ||||
| Deferred tax asset | 1,427 | 486 | ||||
| Other receivables | 1,712 | 2,371 | ||||
| Total non-current assets | 83,827 | 47,541 | ||||
| Total assets | 377,343 | 271,801 | ||||
| Liabilities | ||||||
| Current liabilities | ||||||
| Trade and other payables | 14,904 | 7,105 | ||||
| Employee entitlements | 14,040 | 9,026 | ||||
| Income tax payable | 2,218 | 732 | ||||
| Short-term derivative liabilities | 130 | - | ||||
| Total current liabilities | 31,292 | 16,863 | ||||
| Non-current liabilities | ||||||
| Deferred tax liability | 398 | - | ||||
| Total non-current liabilities | 398 | - | ||||
| Total liabilities | 31,690 | 16,863 | ||||
| Equity | ||||||
| Share capital | 492,173 | 336,308 | ||||
| Share based payment reserve | 7,537 | 4,682 | ||||
| Accumulated losses | (155,474 | ) | (85,940 | ) | ||
| Foreign currency translation reserve | (758 | ) | (112 | ) | ||
| Cash flow hedge reserve | 2,175 | - | ||||
| Total equity | 345,653 | 254,938 | ||||
| Total liabilities and shareholders equity | 377,343 | 271,801 | ||||
| XERO Limited | ||||||
| Condensed Consolidated Income Statements | ||||||
| (Unaudited, in thousands, except per share data) | ||||||
| Year ended 31 March | ||||||
| 2015 | 2014 | |||||
| Subscription revenue | 120,928 | 66,853 | ||||
| Other operating revenue | 2,922 | 3,238 | ||||
| Total operating revenue | 123,850 | 70,091 | ||||
| Other income | 3,369 | 1,383 | ||||
| Total revenue and other income | 127,219 | 71,474 | ||||
| Cost of revenues | 37,403 | 24,516 | ||||
| Gross profit | 89,816 | 46,958 | ||||
| Operating expenses: | ||||||
| Sales and marketing | 93,478 | 55,105 | ||||
| Product design and development | 48,959 | 18,409 | ||||
| General and administration | 24,548 | 11,716 | ||||
| Total operating expenses | 166,985 | 85,230 | ||||
| Operating deficit | (77,169 | ) | (38,272 | ) | ||
| Interest income | 7,713 | 5,062 | ||||
| Interest expense | (25 | ) | - | |||
| Other gains/(losses) | 2,025 | (690 | ) | |||
| Net loss before tax | (67,456 | ) | (33,900 | ) | ||
| Income tax expense | (2,078 | ) | (808 | ) | ||
| Net loss from continuing operations | (69,534 | ) | (34,708 | ) | ||
| Net loss from discontinued operations | - | (838 | ) | |||
| Net loss after tax for the period attributable to the shareholders of the Company | (69,534 | ) | (35,546 | ) | ||
| Earnings per share | ||||||
| Basic and diluted loss per share | ($0.55 | ) | ($0.29 | ) | ||
| Amounts include non cash share-based compensation expense as follows: | Year ended 31 March | |||||
| 2015 | 2014 | |||||
| Cost of revenues | 594 | 554 | ||||
| Sales and marketing | 3,517 | 2,088 | ||||
| Product design and development | 4,478 | 1,683 | ||||
| General and administration | 3,402 | 778 | ||||
| Total share-based compensation expense | 11,991 | 5,103 | ||||
| XERO Limited | ||||||
| Condensed Consolidated Statements of Cash flows | ||||||
| (Unaudited, in thousands) | ||||||
| Year ended 31 March | ||||||
| 2015 | 2014 | |||||
| Operating activities | ||||||
| Cash was provided from/(applied to): | ||||||
| Receipts from customers | 119,566 | 67,136 | ||||
| Other income | 2,580 | 1,086 | ||||
| Interest received | 7,950 | 2,613 | ||||
| Payments to suppliers and employees | (166,853 | ) | (91,175 | ) | ||
| Income tax paid | (1,866 | ) | (679 | ) | ||
| Net cash flows from operating activities | (38,623 | ) | (21,019 | ) | ||
| Investing activities | ||||||
| Cash was applied to: | ||||||
| Purchase of property, plant and equipment | (10,315 | ) | (5,150 | ) | ||
| Capitalised development costs | (32,994 | ) | (21,540 | ) | ||
| Business acquisitions | (5,349 | ) | - | |||
| Intangible assets | (174 | ) | (63 | ) | ||
| Rental bonds | (926 | ) | (627 | ) | ||
| Net cash flows from investing activities | (49,758 | ) | (27,380 | ) | ||
| Financing activities | ||||||
| Cash was provided from/(applied to): | ||||||
| Exercising of share options | 709 | 492 | ||||
| Share issue | 149,290 | 180,000 | ||||
| Cost of share issue | (2,845 | ) | (438 | ) | ||
| Payments for short-term deposits | (418,000 | ) | (256,300 | ) | ||
| Proceeds from short-term deposits | 403,000 | 133,425 | ||||
| Net cash flows from financing activities | 132,154 | 57,179 | ||||
| Net increase in cash and cash equivalents held | 43,773 | 8,780 | ||||
| Foreign currency translation adjustment | 207 | (13 | ) | |||
| Cash and cash equivalents at the beginning of the year | 14,886 | 6,119 | ||||
| Cash and cash equivalents at the end of the year | 58,866 | 14,886 | ||||
About Xero Xero is beautiful, easy-to-use online accounting software for small businesses and their advisors. The company has 475,000 paying customers in more than 180 countries. Xero seamlessly integrates with over 400 third-party tools, and was recently ranked No. 1 by Forbes as the World's Most Innovative Growth Company.
For more information contact: Rod Drury Xero CEO rod.drury@xero.com +64 27 6000 007 Ross Jenkins CFO ross.jenkins@xero.com +64 21 963 909 Chris Teeling Investor Relations chris.teeling@xero.com +64 21 227 3136 Bridget MacDonald Corporate Communications and Media bridget.macdonald@xero.com +64 27 801 6000
