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FY12 operating update

We’ve just updated the market on our progress to March 31, 2012.

Xero doubles revenue and invests for growth

Key metrics for the 12 months to March 31, 2012

  • Revenue doubled from $9.3m to over $19m
  • Business customers grew from 36,000 to over 78,000
  • Offshore revenue rose to 51% of Monthly Committed Revenue (MCR)
  • Annualised MCR is now in excess of $25.5m

Doubling of customer growth across regions

Country FY2011 FY2012 Growth
New Zealand 23,000 47,000 104%
Australia 6,000 16,000 166%
United Kingdom 5,000 11,000 120%
United States/Global 2,000 4,000 100%

Substantial investment continues

As stated at the Xero Annual Meeting in July 2011, the company is pursuing a growth agenda and has recently successfully raised $35.6m to fund that growth.

Xero has become a significant Financial Technology (FinTech) provider having securely processed over $20 billion of transactions on behalf of customers in the last quarter and over $100 billion in transactions in total.

Xero has been focused on growing the business significantly in the last year:

  • Staff employed rose from 113 to 194 with 44 staff based in offshore markets
  • New offices opened in Auckland, Wellington, Melbourne, Canberra, Milton Keynes and San Francisco
  • Two acquisitions were made – PayCycle and WorkflowMax – these have been successfully integrated into the business
  • Substantial investment in the Xero hosting platform, which comprises 50 servers hosted across dual data centers in the US. Xero manages over 50 terabytes of production data.

General Commentary

It was another year of substantial growth for Xero as the company focused on acquiring customers and growing revenue, as well as building its team. Xero continues to demonstrate that it can execute effectively across multiple regions, innovate and keep delivering a best in class product and customer experience.

In its home market of New Zealand, Xero is proving to be the preferred provider for the accounting industry. In Australia and the UK, Xero is emerging as a leading challenger by winning market share from the incumbents and introducing a new generation of businesses to accounting.

For FY13, New Zealand, Australia and the UK will be the growth engines for the company. Entry into the US market is progressing well as the company executes its plan and works with early adopters. Key objectives for the US during FY13 are to deliver US product features, further build out the US team and demonstrate traction against incumbent provider Intuit in key accounts.

Thank you to our valued customers, partners and shareholders for your ongoing support.

 

Read more about Company News

 

8 comments

Michael Porter
3 April 2012 #

Rod, brilliant progress ! – key metric the ongoing users, can you clarify that on 26 Jan 2012 Xero had 60,000 and as at 31 March – 78,000 – 18,000 extra users in 68 days ?
Prima facie that appears to be an impressive step change. > 260 users / day added.
Good to have the regional data released.
I hope you’ve chilled the bubbles for the 100k user milestone. It doesn’t feel that far off…
Mike

Kelvin Hartnall
3 April 2012 #

Excellent momentum! And great to see the regional breakdown. I track the number of registered accountants against the different regional markets since I understand that accountants are your most important channel. What is going to be really interesting over the next quarter is growth in Australia especially with the release of the fully integrated Xero-blue PayCycle. Assuming that growth in registered accountants precedes growth in client numbers, I suspect that Xero will continue to see high growth in Australia. I agree with Michael, looking forward to your 100k party!

Gayle Buchanan
3 April 2012 #

fantastic news to the shareholders and users globally, especially the growth and huge potential – very very exciting for us partners hanging on the shirt tails and most definately taking advantage of the jet stream you and the team are providing – very much appreciated – high 5!

Rod Drury
3 April 2012 #

@Michael, yes – we are in the key selling season. Not promising we can do that month on month but as other countries come on stream we should smooth out the seasonal bursts.

Justin
3 April 2012 #

I can predict that Xero will control more that 80% of the global small business accounting market within 5 years. The rest of the other cloud and non-cloud players shall be “me too” in the small business accounting market.

Fantastic job Xero, as a new partner, its great to know we have teamed up with an awesome NZ company who are moving great guns ahead. Keep up the fantastic work, exciting stuff!

Graeme Leo
4 April 2012 #

With MYOB struggling to get credibility and stability for their new releases, Reckon dropping the bombshell of not carrying the QuickBooks brand beyond early 2014, the stars seem well aligned in Xeros favour right now. Be interesting to see how profitability shapes.

Elizabeth Salter
11 April 2012 #

Awesome stuff! :)

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