Xero: Less about subs and more about profit & ARPU growth

About the author:

Nick Harris
Author name:
By Nick Harris
Job title:
Senior Analyst
Date posted:
10 November 2023, 7:00 AM
Sectors Covered:
Telecommunications, Technology

  • Xero's (ASX:XRO) 1H24 result was largely inline with our expectations and marginally below consensus. Shares were sold off, in our view, due to decelerating subscriber growth momentum with slowing NAM and UK subscriber growth disappointing.
  • Revenue was up 21% YoY but ARPU and ANZ did the bulk of the heavily lifting, once again. Tighter cost control, as pre-flagged, meant Underlying EBITDA was up 51% YoY. FCF was the highlight, jumping YoY and inc. $30m of interest income.
  • FY24 outlook commentary unchanged with expenses “of around 75%” of revenue. We have slowed our revenue and EBITDA growth and lifted our FCF forecasts.

Find out more

Download full research note

If you would like more information, please contact your adviser or nearest Morgans office. 

Request a call Find local branch

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.

  • Print this page
  • Copy Link