If you own Xero Ltd (ASX: XRO) shares or are considering investing in them, you're likely aware the company held its annual general meeting (AGM) yesterday.
Shareholders of the S&P/ASX 200 Index (ASX: XJO) business and accounting software provider were addressed by chair David Thodey, CEO Sukhinder Singh Cassidy and remuneration committee chair Susan Peterson.
Much of what was discussed has been previously disclosed. But management is clearly excited about the future prospects for this fast-growing ASX 200 tech stock.
Xero shares closed up 0.2% yesterday on the day of the AGM.
In early morning trade today, shares are changing hands for $143.38 apiece, down 0.9%.
That sees Xero shares up 105% since the start of 2023 when the company engineered a strong turnaround from the 2022 price rout.
With that in mind, here are some key takeaways from Xero's 2024 AGM.
Xero shares eyeing 'largely untapped' $100 billion market
Addressing Xero shareholders yesterday, chair David Thodey said, "Xero delivered a pleasing operating result in FY24 with a balance between strong revenue growth and significantly improved profitability."
Thodey added:
There continues to be significant opportunity to introduce the benefits of cloud accounting to new customers while increasing the use of our platform by existing customers…
We see an opportunity to capture the largely untapped Total Addressable Market of over $100 billion present within our 3×3 strategy.
Indeed, Xero's FY 2024 growth metrics were impressive.
Among the core measures, revenue increased 22% year on year (21% in constant currency) to $1.72 billion. Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) were up 75% from FY 2023 to $527 million. That helped drive a free cash flow margin of 20.0%.
CEO Sukhinder Singh Cassidy said, "The increase here reflects the benefits of the restructuring we completed late in FY 2023."
Xero shares also benefited over the year with the addition of 419,000 new subscribers, up 11%. Average revenue per user (ARPU) was up 14% from FY 2023.
Commenting on that growth path, Singh Cassidy said:
We've launched simplified product packages in Australia, New Zealand and the UK. This supports our GTM playbook strategic pillar to make it easier to help customers choose the right plan for them and their level of complexity.
As part of our focused bets for the future and growing other markets efficiently, we've restructured our Canada sales team. This reflects us right-sizing for the current cloud accounting backdrop.
We're also retiring Xero Go in the UK as we evolve our mobile efforts and focus on our primary segments.
Looking at what could impact Xero shares in the year ahead, there were no changes announced to the company's outlook provided with its FY 2024 results announcement.
In FY 2025, management expects total operating expenses as a percentage of revenue to be around 73%.
"We also continue to expect to remove between 125 and 175 thousand long idle subscriptions in the first half of FY 2025," Singh Cassidy said.
