Subscriber growth drives Xero’s operating revenues up 29% in FY22

Xero, a New Zealand-based accounting software firm, reported a 29% jump in its operating revenue for financial year 2022 ended March 31 to NZ$1.1 billion (around US$690 million).

The surge was fueled by a 19% growth in subscribers to more than 3.3 million and a 7% jump in average revenue per user to around US$20. It was also supported by revenues from recently acquired businesses.

Photo credit: Xero

However, the firm posted a net loss of US$5.7 million, falling from a profit of US$12.4 million in the same period last year. In a statement, the firm said that the loss is due to its preference to reinvest capital generated back into the business.

Its EBITDA sat at US$133.3 million for FY22, growing 11% compared to the same period last year.

Xero’s total operating expenses, including acquisition integration costs, increased as a percentage of operating revenue to 84%. The company aims to slightly reduce the number to the lower end of a range of 80% to 85% in the next financial year.

See also: The key players in Indonesia’s SaaS industry

Last year, the accounting software firm acquired several companies such as employee scheduling firm Planday, e-invoicing platform Tickstar, tax software TaxCycle, and inventory management solution Locate Inventory. These acquisitions contributed around US$26.1 million to Xero’s operating revenue for FY22.

In a statement, the New Zealand-based firm said that it will focus on growing its platform while continuing to reinvest cash generated to drive “long-term shareholder value.”