Xero Limited (XRO) Q4 2025 Earnings Call

Investor webinar replay

Replay transcript excerpt

Thank you, Operator. Good morning from Sydney, Australia. Thank you for joining our investor briefing today covering Xero's financial and operating results for the full year ending March 31st, 2025. I'm Sukhinder Singh-Cassidy, and I'm with Claire Bramley, our newly appointed CFO. Our first agenda item is a summary of Xero's performance for the full year. I'll then pass to Claire to cover our financial results in more detail before I finish with strategic priorities and Xero's outlook. After that, we'll move to Q&A. So, moving to a summary of our results on slide five. We're really pleased with our FY25 results, and in particular, our ability to deliver strong financial outcomes while executing our strategy with focus and purpose. You'll see that we continue our track record of strong macro resilient revenue growth with each of our large markets contributing. This, along with another meaningful increase in profitability through disciplined capital allocation, has led us to generate another greater than rule of 40 outcome. I'm going to touch on the key metrics here, and Claire will discuss them in more detail later. Revenue grew 23% to $2.103 billion year-on-year. Adjusted EBITDA of $641 million is up $114 million, or 22% over last year. Together, the strong operating result and improved free cash flow generation resulted in a Rule of 40 outcome of 44.3, up by 3.3 percentage points year over year. Moving to the next slide, Xero is a macro-resilient business. We have a large book of recurring subscription revenue spread across our global portfolio that enables us to consistently deliver strong top-line growth. You can see this in the chart on the left. The charts in the middle and on the right show our key revenue drivers, Subscription and ARPU growth. We provided both...