10 May 2018

Xero cuts full year net loss by 60 percent

3:34 pm on 10 May 2018

Xero has cut its full year net losses by 60 percent and reported an underlying profit for the first time.

Xero's Wellington office.

Xero's Wellington office. Photo: Supplied.

The accounting software company, which shifted its listing to the ASX stock exchange earlier this year, cut its full year loss to $27.8 million for the 12 months ended March, compared with last year's loss of $69.1m.

The company also reported a maiden underlying profit of $26m, compared with last year's loss of $28.6m.

Revenue rose 38 percent to $406.6m, while annualised monthly recurring revenue rose 33 percent to $484.4m.

The recently appointed Xero chief executive Steve Vamos said the result was impressive with strong subscriber and revenue growth.

The company gained another 351,000 subscribers, taking the total to nearly 1.4m, including another 40,000 subscribers in North America.

"We are well poised to leverage Xero's international market leading positions as we continue to build a diversified growth profile," he said, adding that the company was expanding in new and established markets.

He said the company would continue to focus on building a global small business platform, although FY19 cash flow was expected to fall from FY18's $41.2m, as it moves to a cash flow break-even position.

"Following cash flow break-even, it is intended that surplus cash flow will be reinvested, subject to investment criteria, to drive long-term shareholder value," he said.

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