What is 2018 looking like for your business?
2018 is super exciting for Xero. We recently announced we were EBITDA positive, as at 30 September 2017, for the first time. We now get to decide how to further invest to grow customers and build new revenues as we pass through $100 million of revenue a quarter to our goal of $100m a month.
2018 will see lots of travel as we continue to build our profile in New Zealand, Australia, Asia, the UK and the US. Big highlights will be Xerocon Atlanta in June and Xerocon Brisbane in September which should see close to 4000 accountants and bookkeepers attend. We'll have lots of innovation to show our partners which I'm especially looking forward to.
How is that different to 2017? How has the last year been for your business?
2017 was a milestone year for Xero. We surpassed one million subscribers globally and celebrated 10 years since going public. We delivered more than 2600 new and updated features and functionality during the year, opened a new regional office in Napier and moved into a new Wellington HQ to accommodate our expanding team of more than 1000 people in New Zealand and 1800 globally.
In November, we announced strong financial results for the half year to 30 September 2017, including that Xero was EBITDA positive of $5.4m. Xero also achieved an impressive operating revenue of $187.8m, a gross margin of 80 per cent and hit operating cash flow break even for the second half in a row. We received some mixed feedback in New Zealand on our decision to consolidate our shares on the ASX and de-list from the NZX, but we know this is the right decision to support Xero's future growth, and we've deliberately chosen for Xero to remain a New Zealand company.
We are fired up about the challenge to become a significant player in a bigger market.
Our focus in 2017 was building our team for the next wave of growth and hitting EBITDA positive so 2018 is very exciting that we start working on new and exciting projects we have planned for a while.
What are the issues affecting your industry in the next 12 months?
The cloud has undoubtedly transformed the accounting industry in a positive way.
Machine learning and artificial intelligence are helping to unlock the potential of the Xero community's vast connections and unique data set. It means small businesses can have their own personalised automated accounting systems running in the background. We released an industry-first personalised automation system for small business cloud accounting and we are just getting started.
Access to talent as we grow will be a challenge and over time our most significant constraint. We are doing lots of work to promote technology careers and recruiting people from all over the world to move to New Zealand where they can do world class work at scale, and have all the benefits of living here.
What is the biggest issue you would like the new Government to champion in 2018?
I've talked a lot about the need for a New Zealand Chief Technology Officer that's responsible for New Zealand's technology plan that the public and private sector can collaborate on. It is pleasing to see the Government has this week announced the chief technology officer position and I look forward to seeing some progress on an appointment in early 2018. I hope then we can get together and create our strategy for New Zealand to step change its performance in our digitally connected world where location matters much less than it has in the past.
Do you get a break this summer? What's your favourite way to relax?
I'll be spending my time in Hawke's Bay and will be hopefully catching lots of glassy waves on my paddle board.