$XRO reported their FY23 results this morning. The table below from the release show their highlights.
The financials are messy, due to yet more write-downs of acquisition goodwill (Waddle and ... wait for it ... PlanDay). However, looking past the profligacy of the past, on an operating basis the result is strong, with 28% revenue growth, Operating Cash Flow of $390m (up 65%) and FCF of over $100m.
Costs have been well-managed, and we are yet to see the full benefit of the cost reduction effort initiated late in the financial year. The restructuring costs of $35m are also a drag on the financials.
As highlighted above, the operating leverage is now showing through strongly and with disciplined management, we will now start to see $XRO becoming a strong cash generator.
Growth was driven both by new subcribers, price increases and usage, and monthly churn stayed low at 0.9%. Importantly, as the major price rise was in September, with a small one in mid March, there is a strong revnue exit run rate for the year, which sets up FY24 with a good start.
Customer additions were strong in Australia (+15% yoy) and UK (+14% yoy), and were double digits across the board. North America still making steady but slower progress at +13% (competition from Intuit is just too strong).
Jumping on the Investor Call at 10:30 and will report any significant insights over the next day or so.
HIGHLIGHTS FROM RELEASE
![7858b8d101bce3e943f7e87e5da1539bd7522d.png](//strawman.com/member/uploads/objects/60/7858b8d101bce3e943f7e87e5da1539bd7522d.png)
CASH FLOW TRENDS
(Note my numbers for FCF are different from their reports, as it looks like we include/exclude different items in getting to FCF.)
![48a056970a0d8ebf600043f6041e75f505145c.png](//strawman.com/member/uploads/objects/a5/48a056970a0d8ebf600043f6041e75f505145c.png)
Disc: Held IRL (4.8%) and SM (8.3%)