XERO LIMITED — Earnings Release 2013

May 20, 2014

==> picture [177 x 79] intentionally omitted <==

MARKET RELEASE

Xero comparative financial information

21 May 2014

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

To assist analysts in recalibrating their models, Xero Limited (XRO) has today released a restated comparative income statement for the 2013 financial year. This is issued in advance of the release of Xero’s Annual Report for the 2014 financial year on Thursday, 22 May 2014.

Xero has elected, for its Annual Report for the 2014 financial year, to change how its income statement is presented. Expenses are now categorised by cost of revenues, sales and marketing, product design and development, and general and administration, rather than expense types such as employee entitlements, advertising and marketing, consulting, travel and so on.

The new presentation provides greater insight into Xero’s business model. It also ensures that its reporting is more closely aligned to other major SaaS (“software as a service”) companies.

	GROUP INCOME STATEMENT ­ FOR THE YEAR ENDED 31 MARCH 2013
	(unaudited)	($000s)
	Subscription revenue	36,088
	Other operating revenue	2,265
	Total operating revenue	38,353
	Other income	936
	Total revenue & other income	39,289
	Cost of revenues	13,916
	Gross profit	25,373
	Operating expenses
	Sales and marketing	22,043
	Product, design and development	11,618
	General and administration	7,996
	Total operating expenses	41,657
	Operating deficit	(16,284)
	Interest income	1,838
	Net loss before tax	(14,446)
	Income tax expense	(231)
	Net loss from continuing operations	(14,677)
	Net (loss) / profit from discontinued operations	234
	Net loss after tax for the period attributable to the shareholders of the company	(14,443)

ENDS

For more information contact: Ross Jenkins, Xero CFO ross.jenkins@xero.com +64 21 963 909