Ann: Investor Briefing Full Year Ended 31 March 2017, page-16

Investment thesis essentially gone to plan. It is now a matter of patiently waiting as the dominoes fall over. There is so much business intelligence that we aren't privy to that Xero has developed that they can essentially copy their secret sauce/playbook and use it in whichever market they go to next.

LTV/CAC is astonishing really. I think the segmented LTV/CAC international is masking the real result of what is probably 4-5 in the UK and very low in the US/North America.
Churn dropping still
GM improving
Operating leverage clearly at play as cycling 40+% revenue whilst only increasing S&M and R&D by 20%
There will be a big boost in available funding in the next 1-2 years as the inflection when cashflow positive will be enormous, allowing money to be ploughed into R&D and to a lesser extent sales. Main bottleneck will be attracting and retaining staff but Rod and his team clearly have a pro-business government and are really trying to set up employee friendly offices eg. in Denver and Hawkes Bay.
The biggest plus for me was the total cashburn of 25m, which give another year and a half runway at current runrates, but realistically has all but proven that the model works and will be cashflow positive imminently. I notice from the next FY they are making customers pay in advance instead of arrears so should be another small boost from that.

This will be my last post for awhile, as far as I can see everything is going to plan and I have no intention of selling in the next 5-10 years unless some major changes occur, which I can't foresee whilst Rod is at the helm.

I have done extensive modelling of what I see the shareprice being and I disagree with most of the posters on the forum.

Using trailing multiples, comparable businesses with similar margins, growth rates and competitive advantages tend to be valued quite similarly on a metric similar to a PEG.

By my calculations that gives Xero a price of approx $25 during this FY, rising to approx $35 the following FY (ie 12-18 months) and I don't see 40+ for a couple of years.

Good luck all,