XERO LIMITED — Earnings Release 2015

Oct 7, 2014

rod

MARKET

RELEASE

**Xero

grows
subscription
revenue
85%**

_8

October
2014_

(Note:
all
currency
is
in
New
Zealand
dollars
and
results
are
unaudited)

Xero
Limited
(XRO)
announces
subscription
revenue
of
$52.0m
for
the
half
year
ended
30
September 2014,
up
85%
from
$28.1m
for
the
half
year
ended
30
September
2013.

With
monthly
committed
subscriptions
growing
to
$11.0m,
annualised
subscriptions
have
grown
to $132.3m
(an
87%
increase
on
the
$70.6m
reported
at
the
same
time
last
year).

Xero
continued
its
focus
on
building
capacity,
passing
1,000
employees
in
early
October
this
year.

The
company
has
$170.8m
of
cash
to
fund
its
growth.

==> picture [460 x 166] intentionally omitted <==

On
a
constant
currency[1] basis,
Xero
grew
subscription
revenue
by
91%
and
operating
revenue
by
85% in
the
period.

1 The
constant
currency
analysis
is
a
non-­‐GAAP
financial
measure
which
has
been
provided
to
assist
readers
to
better understand
and
assess
the
company's
financial
performance
excluding
the
impact
of
foreign
currency
fluctuations
during
the period.

Commentary

Xero’s
global
customer
base
has
grown
76%
in
the
last
12
months
to
371,000
customers.

In
New
Zealand,
over
20%
of
small
businesses
are
using
Xero,
processing
$60B
of
transactions
in
the last
year.
The
focus
is
now
on
connecting
small
business
with
large
Enterprises,
Financial
Institutions, and
the
Government.

Both
Australia
and
the
UK
are
now
significant
growth
engines
for
the
company.
Xero's
largest
market, Australia,
doubled
customer
numbers
over
the
last
year
and
increased
subscription
revenue
by
115% for
the
period
compared
to
the
six
months
to
30
September
2013.

In
the
UK,
Xero
doubled
its
customer
base
for
the
sixth
consecutive
year,
and
is
now
the
number
one cloud
accounting
application
for
small
businesses.

With
the
three
markets
set
up
to
deliver
strong
future
growth,
global
management
is
now
firmly focussed
on
the
North
American
market.
The
company
today
announces
the
appointment
of
Andy Lark,
internationally
recognised
marketer
and
online
leader,
to
Chief
Marketing
Officer
and
will announce
further
executive
appointments
over
the
coming
months.

Regional breakdown

==> picture [466 x 196] intentionally omitted <==

Xero
confirms
guidance
of
forecasted
subscription
revenue
growth
of
approximately
80%
on
a constant
dollar
basis
for
the
2015
financial
year.
Xero
expects
strong
growth
to
continue
for
the foreseeable
future.

Xero
Limited’s
Half
Year
Report
will
be
released
on 20
November
2014.

ENDS

	ENDS
For more information contact: Rod Drury Xero CEO rod.drury@xero.com +64 27 6000 007	Ross Jenkins Xero CFO ross.jenkins@xero.com
	+1 415 860 3910