Xero Passes Quarter Billion Annualised Revenue

Performance highlights
(All figures in NZ$)

Strong global revenue and subscriber growth

• Paid subscribers hit 717,000 globally, with 242,000 subscribers added in the 12 months to 31 March 2016
• Annualised committed monthly revenue of $257.9 million, a year-on-year increase of 62%
• Operating revenues of $207.1 million, an increase of 67% on FY15
• Global year-on-year revenue growth of 95% in international markets, and 57% in Australia and New Zealand

Improvement in operating metrics

• Gross margin increased by 6 points year-on-year to 76%
• Net loss of $82.5 million for the year, an increase of $12.9 million over the previous year, as Xero continues to invest in scaling its global business
• Net loss of $38.1 million for H2 FY16 moderated from the net loss in H2 FY15 by $6.9m
• EBITDA margin in H2 FY16 improved to -23% from -36% in H1 FY16 and -53% in H2 FY15
• EBITDA margin (excluding share-based compensation) in H2 FY16 improved to -15% from -30% in H1 FY16 and -43% in H2 FY15

Reducing cash usage

• Operating and investing cash usage for the second half of the year of $39.1 million, an improvement of $9.4 million from $48.5 million for the same period in the previous year
• Cash usage from operating and investing activities (including FX) was $86.1 million for FY16, lower than the cash usage of $88.2 million in the previous year
• Closing cash and cash equivalents and short-term deposits position of $184.0 million

Guidance

• Operating metrics to continue improvement in FY17 as the Company continues to drive efficiencies through automation and economies of scale
• Cash usage in FY17 (based on FX rates at 1 April 2016) is forecast to reduce from FY16. Xero is managing the business to cash flow break-even within its current cash balance