Xero posts increased profit amid pandemic — but growth slows
AUCKLAND: Xero continued to increase profit and revenue during a pandemichit firsthalf, but subscriber growth slowed.
The ASXlisted cloudaccounting software company reported a net profit of
$34.5 million for the six months to September, against its breakeven ($1.2 million profit) result for the first half of FY2020.
Ebitda increased to $120.8 million from the yearago
$55.9 million.
Operating revenue increased 21% to $409 million as Xero added 396,000 customers against its yeargo number (and 164,000 against its fullyear FY2020 number) for a total of 2.45 million subscribers.
Xero said its monthly revenue runrate was 15% ahead of last year and equated to FY2021 revenue of $877.6 million.
Free cashflow improved from $9.8 million in the red in the firsthalf of FY2020 to
$54.3 million.
No guidance was given for the second half.
Chief executive Steve Vamos said any attempt at a forecast would be speculative, given ‘‘the continued uncertainty created by Covid19’’.
Xero shares closed at a record of $A122.71 yesterday, for a market cap of $A17.2 billion ($NZ18.3 billion).
Its stock had been on a bullrun since a midAugust update revealed Xero was still adding subscribers, in all its major territories, despite pandemic lockdowns, though a slower rate than 2019.
If the company had maintained its local listing, it would now be the second most valuable company on the NZX behind Fisher & Paykel Healthcare ($19.1 billion).
There was also a fintech deal that could result in Xero lending money to customers.
In August, Xero bought Australian invoice financing firm Waddle in a deal worth up to $A80 million.
Waddle lets a small business take a quick secured loan against its accounts receivables, helping to tide it over until an invoice is paid.
In a market filing, Xero indicated the move could be part of a broader push into financing.
‘‘Post the acquisition of Waddle, Xero will continue to explore how to facilitate small business access to capital beyond invoice financing,’’ it said. — The New Zealand Herald