Xero Limited (ASX: $XRO) FY24 Annual Results Investor Presentation

Xero Limited (ASX: $XRO) has released its FY24 Annual Results Investor Presentation, showcasing a 22% year-over-year (YOY) growth in revenue and a remarkable 75% YOY increase in Adjusted EBITDA. The company's strong performance is evident in its operating revenue of $1,714 million, reflecting a 22% YOY growth (21% in constant currency), and an Adjusted EBITDA of $527 million, marking a 75% or $225 million YOY increase. Xero's Rule of 40 outcome stood at 41.0%, showing a 9.1 percentage point YOY increase.

Executive Commentary on FY24 Performance

Kirsty Godfrey-Billy, Chief Financial Officer, highlighted the FY24 results as a demonstration of Xero's ability to execute towards its future aspirations. The company achieved strong revenue growth, particularly in the ANZ region, with $970 million in revenue and 2.38 million subscribers, reflecting an 11% YOY growth and 243,000 net additions. The international markets also saw robust revenue growth, with $744 million in revenue and 1.8 million subscribers, marking an 11% YOY growth and 176,000 net additions. Additionally, significant investments were made in product development to support future growth, including enhancements in accounting, payroll, and payments.

Summary of FY24 Results and Outlook

Xero's FY24 results showcased its ability to balance growth with profitability, as evidenced by the strong revenue growth and improved Adjusted EBITDA. The company's strategic focus on winning on purpose, delivering winning solutions for customers, and living its purpose consistently positions it well for the future. Looking ahead to FY25-27, Xero aspires to be a world-class SaaS business, aiming to double its size and deliver Rule of 40 or greater performance. The company's outlook includes a more balanced approach between subscriber growth and ARPU expansion, with a focus on strategic priorities such as winning the 3x3, a winning GTM playbook, focused bets to win the future, and unleashing Xero(s) to win. Xero's continued progress in purposefully allocating capital and its strategic focus sets a positive trajectory for its future endeavors.