Xero Limited (XRO) Q2 2024 Earnings Call

Investor webinar replay

Replay transcript excerpt

Thank you. Good morning from Sydney, Australia. Thank you for joining our investor briefing today covering Xero's financial and operating results for the half year ending the 30th of September, 2023. I'm Sikandra St. Cassidy. This time I'm getting it right, I think. And I'm with Christy Godfrey-Billy, our CFO. Our first agenda item is an introduction and summary of Xero's performance during the half. I'll then pass to Kirstie to cover our financial results in detail before I finish with strategic themes and Xero's outlook. We'll then move to Q&A. So, moving on to a summary of our results on slide five. I'll touch on a few of the key metrics here, and Kirstie will discuss them in more detail later. Revenue grew 21% to $799.5 million. Headline EBITDA of 206.1 million is up 97.5 million on last year. Operating income of 67.4 million increased 46.7 million year-on-year. This strong operating result drove free cash flow generation, with free cash flow increasing to 106.7 million. This reinforces the strength of Xero's fundamental business and shows we are starting to balance growth and profitability. So now moving on to the two key themes in our H1 performance. I'll talk briefly through each key theme with more details in the next few slides. First and foremost, Xero has continued to deliver revenue momentum. Secondly, we're delivering emerging profitability as we operate more efficiently and effectively. Moving to the next slide. Xero is a macro-resilient business that continues to deliver strong top-line growth. Revenue rose 21% or 20% on a constant currency basis. This reflected subscriber growth of 13% year-on-year, with subscriber additions of 204,000 in the first half. Price changes across both our business and partner edition products were a key driver of ARPU, inc...