Xero’s half year 2019 financial & operating results

Today we announced Xero’s half year results which covers our financial and operating performance to 30 September 2018 (H1 FY19). You can find the results materials here: www.xero.com/about/investors

These results show that Xero continued to demonstrate strong growth and operating discipline across our business. Highlights include:

• 1.6 million subscribers on the Xero platform, adding 380,000 in the past year
• Revenue up 37% on the same period last year (H1 FY18) to $256.5 million (33% in constant currency (CC))
• Continued growth in annualised monthly recurring revenue, increasing by 40% to $589.1 million (36% in CC)
• Average revenue per user increased 6% from H1 FY18 to $31.1 (3% in CC)
• Cash flows from operating activities increased to $36.0 million, a substantial improvement from $15.1 million in H1 FY18
• EBITDA of $16.8 million, compared to $15.6 million in H1 FY18
• Added $1.1 billion in total subscriber lifetime value in the past year (unchanged in CC)

In my first seven months as Xero’s CEO, we’ve continued to move at a rapid rate to achieve a number of important milestones, while continuing to execute our strategy and pursue many initiatives to even better position us for the future.

During the half year, these initiatives included the acquisition of leading data capture solution Hubdoc and a strategic partnership with leading US payroll platform Gusto. We also successfully secured US$300 million in capital through a convertible note issue – we intend to use this capital for complementary and targeted acquisitions and investment to enhance and extend our small business platform and ecosystem capabilities.

Every aspect of our business is evolving as we pursue our goal to further develop Xero as a global small business platform.

The opportunity for Xero is significant, especially considering that less than a quarter of small businesses around the world benefit from cloud accounting solutions.

I’d like to thank the entire Xero team and our community for your ongoing support and for the important role you played in helping us to a strong start in the 2019 financial year.