Thank you for a beautiful FY15

Today we announced our FY15 results.

The incredible momentum and exceptional performance we were able to report is in large part due to the 1,161+ Xeros, 475,000 small businesses, and tens of thousands of bookkeepers and accountants around the world. Thank you.

You are all part of a revolution in small business software – one that makes thriving simpler, easier and more connected for owners and advisors.

While you can read more in this morning’s market release I wanted to share a few of the highlights with you:

• We’ve become one of the fastest growing Saas companies. Our subscription revenue grew 81 percent to $120.9m and operating revenue was $123.9m, up 77 percent from $70.1m in FY2014.
• Xero has emerged as the leading cloud accounting solution in three countries – New Zealand, Australia and United Kingdom. In fact, if you added up our customers in those three markets they would exceed the total cloud customers of the incumbents in those markets too.
• Our paying customers grew to 475,000 small businesses, up 67 percent on last year. Our recurring revenue model means that we started the 2016 financial year strongly with $159.3m in annualised existing revenue, a 71 percent increase on the same time last year.
• We are seeing the early positive signs for US growth, strengthened our US management team, and are primed to move forward fast.
• We continued to invest for growth and scale – including in talent to ensure we have the leadership, capability and capacity in place globally to allow this company to flourish and grow globally at scale.
• We have also maintained a strong cash position with $269m of cash to continue to invest in creating long-term shareholder value and, of course, a beautiful user experience.

Beautiful people

FY15 was about building our team up to critical mass. We onboarded more than 400 talented people – that’s a whole lot of new jobs in product development, design, support and sales and marketing. We’re extremely proud to have grown the global team to 1,161 Xeros while continuing to drive strong revenue and customer growth across all markets.

But our real goal is helping the entire small business economy to thrive. As we create one job at Xero, we hope to create hundreds if not thousands of jobs across the small business economy by enabling those small businesses to thrive through better access to information, insights and advice.

Beautiful software

It’s beautiful software – purpose built for small businesses – that makes this possible.

Our platform now provides the most comprehensive small business accounting experience for customers. We are not just rivaling desktop solutions but now exceeding them. In many ways, FY15 was the year in which we closed the first chapter on Xero and started the second, unleashing the full potential of running nearly any core business function anywhere, anytime from any device.

More than 500 updates were delivered to Xero users in the last financial year. That’s from listening and responding to our customers’ needs and, continually improving their experience while rolling out some pretty big products like payroll, quotes, invoices and inventory. We’ll continue to add value to small business and financial advisors through continued innovation – and we’ve got some exciting plans ahead that we know will be game changing.  Xero is a powerful tool that has even more potential to deliver insights and add value through data driven advice.

Beautiful partnerships

Partnerships are everything to Xero. Xero continues to build a solid ecosystem to enable our users to connect and customise with other apps they need to run their businesses, and we now seamlessly integrate with over 400 Add-on applications.

We have also built relationships with over 16,000 accounting and bookkeeping partners, and now connect to over 7,500 bank feeds with more than 5,000 financial institutions globally.

Beautiful potential

We know we have an opportunity and the potential to make a difference in millions of business owners.

In the past year we focused on building our capability through leadership and global teams and investing in infrastructure and automation to support growing to scale. The team at Xero have the momentum to make big things happen.

All 475,000 of our customers – accountants, bookkeepers and small business owners – are part of our Xero family too. Thanks again for your support and for making Xero the success it is.

We are very excited about FY16, and look forward to sharing many more beautiful moments with you.

Rod Drury

CEO