The Xero Limited (ASX: XRO) share price has been on form again on Wednesday.
At one point today the business and accounting software platform provider's shares hit an all-time high of $85.04.
When Xero's shares hit that level, it meant they had gained a remarkable 98% since this time last year.
Why is the Xero share price at a record high?
The Xero share price has been racing higher over the last 12 months thanks to its impressive performance in FY 2019 and strong start to the new financial year.
In FY 2019 Xero posted operating revenue of NZ$552.8 million, which was an increase of 36% on the prior corresponding period. This strong top line growth was driven by a 31% lift in total subscribers to 1.818 million and a small increase in average revenue per user to NZ$29.25.
This ultimately led to Xero posting a 32% increase in Annualised Monthly Recurring Revenue (AMRR) to NZ$638.2 million.
Pleasingly, Xero has continued its strong form in FY 2020. During the first half, the company delivered a 32% increase in operating revenue to NZ$338.7 million.
The company's AMRR also grew at a rapid rate. At the end of the half, its AMRR had increased 30% on the prior corresponding period to NZ$764.1 million.
This strong growth was driven by yet another increase in subscriber numbers. Total subscribers grew 30% over the prior corresponding period to 2.057 million.
This led to Xero finishing the period with total subscriber lifetime value (LTV) of NZ$5.4 billion. Which was 37% higher than the prior corresponding period and up NZ$1 billion from the LTV of NZ$4.4 billion it recorded at the end of FY 2019.
Is it too late to invest?
Whilst Xero's shares are looking fully valued now, I would still buy them with a long term view.
As with fellow tech stars Afterpay Ltd (ASX: APT) and Altium Limited (ASX: ALU), I believe Xero is capable of growing materially over the next decade. This is thanks to its massive global market opportunity, high quality and sticky product, and favourable industry trends.
