@Slew great to get your experiences. Similarly, I run the back office for my own and my wife's businesses. I have a really efficient set of spreadsheets and templates set up, which my accountant loves because I do all his work for him, apart from the tax calc. So, I've never made the leap because I was put off by the Xero subscription. I will look a Xero Go when it launches in Australia.

No doubt slow progress of $XRO in USA is that Intuit was well-established incumbent who pivtoed quickly to develop a cloud SaaS offering. Also the way in which business owners, book-keepers, accountants and tax advisors work in the US is quite different to UK,Aus, NZ and Canada. (BTW, I've heard this said often and taken it at face value, but don't claim to understand it. Happy to be educated!)

I guess the UK is the test-bed because of the MTD (make tax digital) initiative. However, it was discussed on the call that the reason why UK growth is disappointing is because HMRC don't seem to be taking compliance and enforcement of deadlines very seriously at the moment. UK has had a bad run through COVID-19, inflation is at 10%, war in Ukraine has driven gas prices through the roof, BREXIT has created a lot of issues for businesses, and political tumoil. I just spent two weeks there and everyone I saw looks more paillid, drawn and ill than usual despite a great summer - I lived in the UK for over 20 years.)

My experience doing BAS, COVID Job Keeper reporting, payroll, bank reconciliations etc with Xero over my previous experience with other products means I would pay twice as much without a second of thought for my subscription. Please dont tell them this

Yep, that's what my accountant said to me.

I run on Reckon One for my small business and it's incredibly annoying, but the only thing more annoying would be changing my accounting package.

The devil you know....

I own and operate my own small hospitality business with 15 employees. Do all the accounting data entry and payroll myself. My accountant mostly just logs in, runs a few reports here and there, especially eofy.

Funnily enough I was an Oracle implementation consultant for 10yrs in another life, and the description of changing erp platforms as being like a "spinal transplant" for a company is apt....moving accounting packages for a small business owner/operator has much the same energy imo.

Unless there was another transformative technological event like the move to web-based applications….a lot of customers in my mind just won't change.

There's only so many hrs in the day and some have to be spent sleeping and with family...lol

Interesting stuff the way the human brain works.

Hi @BoredSaint

My pre-meeting summary captures the key points. I think the sell-off is a combination of 1) tech weakness overnight on NASDAQ, 2) a bit of unwinding in the recovery that we've seen since late June in the absence of a postive update/upgrade and 3) disappointment at continuing UK weakness.

Maybe, and I am reading too much into this, the Chairman made a remark in his opening that Xero will have strong years and weaker years from time to time, but overall the long term opportunity is still very much there.

I think there will be some disappointment that UK progress is slow. Its a market potential of 2-3 x ANZ and still immature from the point of view of cloud accounting, and after a fast start there investors I think have been disappointed at the recent slowing growth and the foreshadowing that this is continuing. For example, GS "First take" headline is "US Subscriber weakness continuing" so I think I was on the money there and we may see GS downgrade from current TP of $113/sh.

After results season, I'll revisit my own model, but there was nothing alarming today for me. I continue to hold a 5-6% (initially courtesy of Matt Joass in 2017 at $19/share).

That's all I can see.

I bought it at $19 too and thought I was a superstar selling it at $29.... Have bought back in since and still think it is a great company with strong future. So sticky! So easy to use! So critical to small business.

Thanks @mikebrisy. Always value your assessments. Like you and @Duffshot38 i was lucky enough to buy early and low, thx to MFPro. I even went a bit crazy and doubled my exposure at $13, so I ended up with nearly 10% of my MFPro portfolio being Xero !

I mostly sold out at $75 in a COVID induced funk but that profit was in large part why I had done so well over the preceding years. At one point my portfolio was nearly 40% Xero!

Clearly I missed out on an additional 100% upside but am clearly happy I took the risk of topping up at those prices.

I am patiently waiting for a good re-entry point. My current exposure is 2% in super.

Interestingly, this one of those occasions when I broke a rule by averaging down, and then another by selling one of my highest long term conviction holdings due to short issues .

I would like to think I have gained some inside or new pearl of wisdom from the experience, but I haven’t . It just blurred this more than usual .

While reportng on the AGM, there were two other interesting items.

Plan Day

PlanDay rollout is coming to Australia in the next year. It will be interesting to see if this significant acquisition adds any value.

Xero Go

One shareholder asked whether $XRO saw much potential from the new Xero Go app uptake in the "side hustle" businesses. The response was that the small business (zero employees) sector was a key target, with David Thodey saying that $XRO would like every SMB to be a customer irrespective of size. There was not much specific in the way of response on Xero Go as its early days, but Steve Vamos said he hoped it would encourage the smallest businesses to become customers and that the UK MTD initiative would be an impetus towards this (which is why UK is the first launch). Now, I follow $XRO, but I missed Xero Go, which was launched in UK in July, and was interested in the market potential, so have just done some back of envelope calcs.

UK has 4.2m non-employing small businesses (total market across ANZ, Canada, USA, UK is c. 35.0m)

Pricing is GBP4.99/month, so ARPS = A$105. Therefore, TAM = $441m UK and $3,700m all 5 countries

Let's say that 50% of the market adopts a digital solution over 5 years and that Xero gets 20% market share.

Revenue in 5 years would be $44m UK and $370m for all 5. That's decent in the context of 2022 revenues of c. $1bn and gross margin of 85%.

And of course, a proportion of those businesses will grow and migrate over time to the full Xero ecosystem. Get them while they're young!

Not earth shattering, but I found it interesting and always learning something when I go to shareholder meetings.

@mikebrisy thanks for the insight, appreciated as always.