ASX-listed accounting platform Xero has more than doubled its net loss from 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-year results through September 30 detailed revenue growth of 30% to NZ$658.5 million (A$603 million), but the company’s net loss is up about 270% from NZ$5.59 million in 12 months suffered to NZ$16.1 million (€14.6 million).
Total subscribers grew 16% to 3.5 million and annualized monthly recurring revenue grew 31% to NZ$1.5 billion. EBITDA increased 11% to NZ$108.6 million.
The result was mixed compared to analysts’ expectations.
Vamos, who turns 65 next month, said the strong sales growth bolstered the company’s strategy as Yodlee co-founder and president of eBay subsidiary StubHub, Sukhinder Singh Cassidy, steps into his shoes in February next year, while he leaves later this month. joins the company for the transition.
Xero chairman 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 annualized monthly recurring revenue; and total subscriber lifetime value (LTV) from $3.2 billion to $13 billion,” he said.
“Steve has overseen Xero’s significant expansion, including completing several acquisitions in Canada, US, Sweden, Singapore, Denmark, Australia and UK; completing two capital increases; operationalize our global sales force and go-to-market channels; and introducing sustainability and climate goals for Xero.”
Singh Cassidy said “huge opportunities” lie ahead.
“I am committed to building on the company’s great momentum, in line with Xero’s values. I look forward to meeting Xero’s people, partners, customers and shareholders around the world and taking the company through its next phase,” she said.
But the market was less than impressed with the results and the news, with Xero shares falling more than 10% on Thursday to their 2.5-year low.
Xero (ASX:XRO) recovered about 8% today, closing at A$70.09.
But the stock has halved in value by 2022, amid a broader flow of technology stocks to keep the calendar year 52% lower.
- Editor’s Note: Vamos is Spanish for “let’s go!”