ASX-listed accounting platform Xero has more than doubled its net loss on the previous year to the chagrin of investors who wiped more than $1 billion from the company’s valuation following the announcement and news that CEO Steve Vamos is stepping down after nearly five years at the helm.
The New Zealand tech company’s half yearly results to September 30 detailed revenue growth of 30% to NZ$658.5 million (A$603m), but the company’s net loss is up around 270% from NZ$5.59m 12 months ago, to NZ$16.1m (A$14.6m).
Total subscribers increased 16% to 3.5 million and annualised monthly recurring revenue grew 31% to NZ$1.5 billion. EBITDA was up 11% to NZ$108.6 million.
The result was mixed compared to analyst expectations.
Vamos, who turns 65 next month, said the strong revenue growth validated the company’s strategy as Yodlee cofounder and the president of ebay subsidiary StubHub, Sukhinder Singh Cassidy, steps into his shoes in February next year, while joining the business later this month for the transition.
Xero chair David Thodey praised Vamos for building the fintech since 2018.
“Steve has led Xero from 1.4 million to 3.5 million subscribers; from $484.4 million to $1.5 billion annualised monthly recurring revenue; and total subscriber lifetime value (LTV) from $3.2 billion to $13 billion,” he said.
“Steve has overseen significant expansion of Xero including completing several acquisitions in Canada, the US, Sweden, Singapore, Denmark, Australia and the UK; completing two capital raises; operationalising our global sales team and go-to-market channels; and introducing sustainability and climate targets for Xero.”
Singh Cassidy said “huge opportunities” lay ahead.
“I’m committed to building on the business’ great momentum, in line with Xero’s values. I’m looking forward to meeting Xero’s people, partners, customers and shareholders around the world, and leading the business through its next stage,” she said.
But the market was less than impressed with the result and news, with Xero shares falling more than 10% on Thursday to their lowest point in 2.5 years.
Xero (ASX: XRO) recovered by around 8% today to close at A$70.09.
But the stock has halved in value in 2022 amid a broader rout in tech stocks to sit 52% down for the calendar year.
- Editor’s note: vamos is Spanish for “let’s go!”