Xero Limited · ASX:XRO
Xero — Shareholder Meeting (July 2015)
47 slides from Xero's shareholder meeting presentation, Jul 22, 2015
Slide 1: Annual meeting
For personal use only Annual meeting 1
Slide 2: Rod Drury, Chief Executive
For personal use only Rod Drury Chief Executive 2
Slide 3: Important notice
Important notice For personal use only This presentation is given on behalf of Xero Limited (Company number NZ 1830488, AU ARBN 160661183 NZX/ASX:XRO). Information in this presentation: • is for general information purposes only, and is not an offer or invitation for subscription, purchase, or recom
Slide 4: 500,000+ subscribers
For personal use only 40 500,000+ subscribers Announced June 3rd 2015 4
Slide 5: 540,000+ subscribers
50,000 For personal use only <10 weeks 540,000+ subscribers 50,000 4 years 5
Slide 6: Scaling the platform
Scaling the platform For personal use only Built people capability Transaction value processed Partners 1,200+ 403 added in FY2015 $300B+ In past 12 months 16,000+ 28% of partners added in FY2015 6
Slide 7: Subscription revenue growth of 81% FY2015
Subscription revenue growth For personal use only of 81% FY2015 ACMR 31 Mar 2015 Subscription revenue FY2015 Capital raised Cash to invest at 31 Mar 2015 $159M $121M $147M $269M $93m 31 Mar 2014 $67m FY2014 March 2015 $210M 31 Mar 2014 7
Slide 8: IDC names Xero fastest growing vendor
For personal use only Payroll accounting Financial accounting IDC named Xero the fastest growing Xero was also recently named the company in the payroll accounting space fastest growing financial applications demonstrating 74.7% year-over-year vendor with 80.3% year-over-year revenue growth in 2014
Slide 9: Attracting world class investment
Attracting world class investment For personal use only $50 $37.50 $147m Feb 2015 - $20 $25 $180m Oct 2013 - $18.15 $12.50 $60m Nov 2012 - $6 $20m Feb 2012 - $2.75 2012 2013 2014 2015 9
Slide 10: We're delivering what we said last year
We’re delivering what we said last year For personal use only PRODUCT PEOPLE PARTNERSHIPS GO TO MARKET Deliver best in class Complete US Best ecosystem Build online channel US product leadership team Execute on existing Focus on key Innovate faster Global Management relationships segments focused on
Slide 11: Feature timeline
xero.com/feature-timeline For personal use only 11
Slide 12: We're delivering what we said last year
We’re delivering what we said last year For personal use only PRODUCT PEOPLE PARTNERSHIPS GO TO MARKET Deliver best in class Complete US Best ecosystem Build online channel US product leadership team Execute on existing Focus on key Innovate faster Global Management relationships segments focused on
Slide 13: We're delivering what we said last year
We’re delivering what we said last year For personal use only PRODUCT PEOPLE PARTNERSHIPS GO TO MARKET Deliver best in class Complete US Best ecosystem Build online channel US product leadership team Execute on existing Focus on key Innovate faster Global Management relationships segments focused on
Slide 14: We're delivering what we said last year
We’re delivering what we said last year For personal use only PRODUCT PEOPLE PARTNERSHIPS GO TO MARKET Deliver best in class Complete US Best ecosystem Build online channel US product leadership team Execute on existing Focus on key Innovate faster Global Management relationships segments focused on
Slide 15: Less than 7% of SaaS companies achieve greater than 10k users
Less than 7% of SaaS companies achieve greater than 10k users For personal use only Scale is hard to achieve Companies rely on direct sales Direct Sales User base size 0-100 100-1k Partnerships 1k-10k Viral >10k Lead Gen 0% Percent of Companies 70% WOM Social Media SEO SEM Blogs Email 11% 22% “State
Slide 16: Lifetime value
Lifetime value For personal use only ( LTV = ARPU * average lifetime * current gross margin ) ARPU Gross margin Lifetime* Lifetime value Group $28.00 70% 83mths $1,622 AU $30.50 69% 95mths $2,008 FY2015 Group gross margin Group retention Future dollars of 65% in FY2014 improved by 20 gross margin mt
Slide 17: Building long term margin
Building long term margin For personal use only CAC New customers New ARPU Sub Rev 20 months lifetime ACMR 5% gross margin LTV* Added $450M in FY2015 $200M $400M $600M $800M FY2013 FY2014 FY2015 *LTV x subscribers 17
Slide 18: Early FY2016 outlook
For personal use only Early FY2016 outlook While it’s early in our financial year we are expecting subscription revenue for the full year to 31 March 2016 to exceed NZ$200m, based on June 2015 FX rates. While we still intend to list on a US stock exchange, timing will be dependent on internal and ex
Slide 19: Approaching a third of NZ software exports
For personal use only Approaching a third* of NZ software exports with Xero exports growing 102% to $88m in FY2015 *ICT Report 2015 | Information and Communications Technology Ministry Of Business, Innovation And Employment 19
Slide 20: Annualised committed monthly revenue
Annualised committed monthly revenue For personal use only Rest of World $7.2M North America $12.5M New Zealand $39.5M United Kingdom $25.9M Australia $74.2M As at 31 March 2015 20
Slide 21: United Kingdom
STAFF 57 47 + For personal use only GO TO MARKET GLOBAL STAFF SUBSCRIBERS ($25.9M ACMR) 83,000 United Kingdom SUBSCRIBER GROWTH FY2015 Managing Director: Gary Turner 77% PARTNERS As at 31 March 2015 3,000 21
Slide 22: North America
STAFF 64 150 + For personal use only GO TO MARKET GLOBAL STAFF SUBSCRIBERS ($12.5M ACMR) 35,000 North America SUBSCRIBER GROWTH FY2015 Managing Director: Russ Fujioka 94% PARTNERS As at 31 March 2015 2,100 22
Slide 23: New Zealand
STAFF 32 626 + For personal use only GO TO MARKET GLOBAL STAFF SUBSCRIBERS 150,000+ AS AT TODAY New Zealand SUBSCRIBER GROWTH FY2015 Managing Director: Victoria Crone 35% PARTNERS As at 31 March 2015 3,000 23
Slide 24: Australia
STAFF 85 100 + For personal use only GO TO MARKET GLOBAL STAFF SUBSCRIBERS ($74.2M ACMR) 203,000 Australia SUBSCRIBER GROWTH FY2015 Managing Director: Chris Ridd 86% PARTNERS As at 31 March 2015 7,400 24
Slide 25: From accounting to a business platform
For personal use only Accounting People From accounting to a business platform Connections Payments 25
Slide 26: Accounting, People, Payments, Connections
For personal use only Accounting People Payments Connections 540,000+ 400,000+ $300B+ 20M+ subscribers today people got paid transactions processed Businesses have interacted in June 2015 in past 12 months on the Xero platform $5.6B 100M+ in the last 90 days invoices in past 12 months 26
Slide 27: Andy Lark, Chief Marketing Officer
For personal use only Andy Lark Chief Marketing Officer 27
Slide 28: Million use Xero
For personal use only >Million use Xero Many millions of times More than 10,000,000 More than 100,000 Up to 100,000 28
Slide 29: 540,000+ Xero subscribers today
For personal use only 540,000+ Xero subscribers today *Estimated from various Government sources 29
Slide 30: English speaking small businesses
For personal use only 65 million* English speaking small businesses *Estimated from various Government sources 30
Slide 31: Small businesses worldwide
For personal use only 200 million* small businesses worldwide *Estimated from various Government sources 31
Slide 32: Most Innovative Growth Company 2014 & 2015
For personal use only MOST INNOVATIVE GROWTH COMPANY 2014 & 2015 32
Slide 33: Millions of customers, Billions of connections
Millions of customers, Billions of connections For personal use only One Customer Love Flows All Ways 1,000’s connections Engage Connect Link relationships Owners Bookkeepers Customers Managers Accountant Banks Employees Advisors Suppliers 33
Slide 34: 51% of NZ Xero customers trust advice from their accountant
For personal use only 51% of NZ Xero customers trust advice from their accountant* compared to 27% for NZ non-Xero customers *Xero New Zealand Insights Survey 34
Slide 35: Partnerships
For personal use only PARTNERSHIPS SOUTH AFRICA SINGAPORE UK AUSTRALIA 33 OF TOP 100 US FIRMS RANKED BY ACCOUNTING TODAY HAVE CLIENTS ON XERO 35
Slide 36: Screenshot of UI
For personal use only (Screenshot of UI) 36
Slide 37: Best Xero user experience first on Apple devices
For personal use only Best Xero user experience first on Apple devices Best-in-class solutions from the Apple ecosystem, designed specifically for small businesses Tight integration with Apple’s mobility partners to increase time-to-value and reduce friction Small businesses seeking guidance can get
Slide 38: Network effects
For personal use only Network effects Social networks were the last 10 years. Market networks will be the next 10. 38
Slide 39: >3.5 billion opportunities to see Xero
For personal use only >3.5 billion opportunities to see Xero in the last 12 months 39
Slide 40: More people searching than ever before
More people searching than ever before For personal use only XERO CHALLENGER 2 CHALLENGER 3 January 2012 August 2013 April 2015 40
Slide 41: Melbourne, San Francisco
For personal use only MELBOURNE SAN FRANCISCO 41
Slide 42: Whatever business you're in. Xero in.
Whatever business Whatever business ’ me Whatever business it u e in. Xero in. you're in. Xero in. Whatever business you're in. Xero in. Whatever business Whatever business ~yQuire in. Xero in. Whatever business you're in. Xero in. you're in. Xero in Whatever business you're in. Xero ins Whatever bu
Slide 43: For personal use only
For personal use only 43
Slide 44: Future of small business SaaS
For personal use only Future of small business SaaS We enable small businesses to thrive. 44
Slide 45: Summary
First global accounting solution people love For personal use only Massive and expanding TAM, significant new revenue opportunities Summary First global small business cloud accounting platform Global strategy and proven execution 45
Slide 46: Q&A
Q8&A Ajuo esn jeuc Osied JO 46
Slide 47: Beautiful accounting software
For personal use only Beautiful accounting software