Xero’s growth slows, Sukhinder Singh Cassidy to succeed Steve Vamos as CEO

Sukhinder Singh Cassidy will take over as CEO from Steve Vamos. Photo / Xero

Xero chief executive Steve Vamos will step down in February next year after five years in the top job and will be replaced by Sukhinder Singh Cassidy.

Sukhinder, who will join Xero on November 28, is an experienced Silicon Valley executive with more than 25 years’ global experience. She has been president for Asia, Pacific and Latin America for Google, president at StubHub and founder of theBoardlist and Joyus.

She has also had significant experience on public and private boards with multiple companies, Xero said.

Chair David Thodey said: “As Xero continues to focus on achieving our global ambitions, we’re delighted to appoint someone of Sukhinder’s calibre as chief executive to lead Xero through our next phase of growth.”

The announcement of the change at the top comes the same day as Xero reported a $16.1 million first-half loss, up from a $5.9m net loss in the same six months a year earlier.

The accounting software company’s revenue rose 30 per cent to $658.5m in the six months ended September while annualised monthly recurring revenue grew 31 per cent to $1.5 billion, or 23 per cent in constant currency terms.

Slowing subscriber growth

Subscriber numbers rose 16 per cent to 3.5 million, slower than the 19 per cent growth of the year ended March and the 23 per cent growth in the previous first half.

Xero’s gross margin eased 10 basis points to 87 per cent, while earnings before interest, tax, depreciation and amortisation (Ebitda) rose 11 per cent to $108.6m.

Free cash flow rose to $15.6m in the latest six months from $6.4m in the same months last year.

Xero said the total lifetime value of its subscribers was $13b at September 30, up 30 per cent from a year ago.

The company said it made a $25.9m non-cash impairment of the Waddle business, reflecting “changed operational and market conditions”.

The company announced the Waddle purchase in August 2020 when it paid A$31m ($33.9m) upfront and said it might pay up to A$80m, depending on revenue and product-development milestones.

It described the cloud-based lending business then as “best-in-class”.

On Thursday, it said the write-down was partly offset by non-cash revaluation gains of $10.8m and that without these one-off items, Ebitda would have been up 28 per cent at $123.7m.

- BusinessDesk