Go Xero $30, page-67

Intuit had their investor day at the start of October.
There were a couple of striking things.

1) UK subs at 166K with YoY growth of 132%. This is much faster growth than Xero in the same market (54%) currently at 253K
2) Improving customer retention rate from 79% to 81%

3) ARPU flat:
QBO US $434, QBO non-US $135, QBSE $84....this is substantially lower than Xero's $360AUD across the board...
-->IE the 390K QBSE users contribute 33m; the 503K non-US users contribute 68m, and the US revenue 646m.


Interestingly the NPS is the worst in Australia and the trend is also accelerating the least which suggests in the most mature market that Intuit is in, Xero directly influences customers' perceptions of the expectations of a service...

Am not sure what to make of all of this, but it does suggest that Intuit's strategy is very much to price cut to build market share and buy time to improve the product to Xero's standard. It is therefore imperative that Xero gets to cashflow breakeven (hopefully next fortnight but if not the 6 months after), and then continues to invest heavily in R&D to maintain the product lead. I do think we are in for several years of margin expansion after this next report, which if combined with continued reasonable subscriber velocity (ideally 30% plus for next 5 years) will put Xero in very nice shape.

One negative I have noticed is that there have been several negative reviews on Rod on glassdoor lately, and I am hoping the success has not gotten to his head and he is still listening to his employees.

Will be quite interested to see what comes out in the next report.