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Steve Vamos and Sukhinder Singh Cassidy
Xero

Xero CEO says cheerio, new chief starts in February

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Steve Vamos has announced his departure as global CEO of cloud accounting platform Xero. He will hand the virtual reins to Silicon Valley veteran Sukhinder Singh Cassidy, who takes on the challenge of shifting the company into its next phase of growth and innovation.

15th Nov 2022
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After four and a half years as Xero’s global chief, Steve Vamos announced he will be retiring from the business to devote more time to his business coaching and investment portfolios.

He will be succeeded by Canadian Sukhinder Singh Cassidy, who will take up the role of global CEO on 1 February 2023. Singh Cassidy officially starts at the cloud developer at the end of this month, working with Vamos until his departure at the end of May 2023.

Vamos took the helm at Xero in April 2018, following founder Rod Drury’s decision to step back from the top job after 11 years in which he grew the firm from an idea of a single ledger in the cloud to more than a million subscribers and 2,000 employees.

In a statement to the Australian stock market, Xero chair David Thodey hailed Vamos’s “significant contribution” to Xero’s development as a global business. 

“Steve has led Xero from 1.4m to 3.5m subscribers; from $484.4m to $1.5bn annualised monthly recurring revenue; and total subscriber lifetime value (LTV) from $3.2bn to $13bn,” said Thodey.

He added Vamos had overseen “significant expansion” of Xero including the completion of two capital raises, the “operationalisation” of its global sales team and go-to-market channels, and the introduction of sustainability and climate targets.

Leadership pedigree

Singh Cassidy brings a wealth of leadership pedigree to the CEO role from a range of firms across the world of finance and consumer technology.

She co-founded finance data aggregator Yodlee before joining Google as the first general manager for Google Local & Maps (and going on to hold a range of senior positions at the company). She founded Joyus, which billed itself as the web’s first video shopping network, and has sat on the board at a diverse range of multinational entities, including telecoms giant Ericson, TripAdvisor, eBay ticketing offshoot StubHub and retail behemoth Urban Outfitters.

Writing on her LinkedIn page, Singh Cassidy outlined her excitement at joining Xero and added a bit of her own personal accounting history from her family’s medical practice. “Every year around March 1st (beginning when I was 7 or 8), my father would gather our whole family around the dining room table, bring out his all checkbooks for the past year, and have us start recording every expense from our parents’ medical practice. As tax day grew near, the frenzied activity would accelerate – our army of family accountants working until the very last minute to figure out the year’s income, profits and taxes owed. By 12 or 13, I could do most of the tax return and by 18 I’d built an Excel spreadsheet to speed up the system. But my view of entrepreneurship and small business building was built line by line with each ledger entry of my youth.”

Opportunities and challenges ahead

Singh Cassidy inherits a business transitioning from scrappy underdog to established global player – in some territories even incumbent – in the cloud accounting software landscape, with all the opportunities and challenges this brings.

For more than a decade the Kiwi developer enjoyed a stratospheric spell of growth, driving adoption of cloud accounting tools and their accompanying ecosystem. But in recent years it has also faced calls from accounting partners to boost support, and received criticism for a perceived lack of development of its product and outages earlier this year.

Breaking Singh Cassidy’s native North America has long been an ambition for Xero, and while its current subscriber numbers hover at 350,000, comparable figures for QuickBooks Online users are ten times higher (according to the last figures available). At its recent conference in New Orleans, Xero declared itself “all in” on America, and perhaps Singh Cassidy’s knowledge and contacts in the region can play a part in fulfilling this ambition.

News of Singh Cassidy’s appointment and Vamos’s retirement was released at the same time as Xero’s half-yearly results to 30 September, with the figures presenting a mixed picture for investors. 

Company revenue grew 30% to NZ$658.5m (A$603m), total subscriber numbers rose 16% to 3.5m, annualised monthly recurring revenue grew 31% to NZ$1.5 bn and EBITDA was up 11% to NZ$108.6m.

UK revenue growth grew 32% to NZ$175m, but Xero’s report put subdued subscriber growth of 16% down to “slower than expected uptake of the final stage of MTD for VAT, a less than buoyant macro backdrop and changes we implemented to our partner sales approach”. As the Making Tax Digital for income tax self assessment (MTD ITSA) deadline draws nearer, it will be instructive to see what impact this has on the next set of figures, particularly with the new Xero Go product targeting sole traders now live.

The company’s overall net loss also rose sharply from NZ$5.59m 12 months ago, to NZ$16.1m (A$14.6m).

The markets reacted less than favourably to the results and CEO news, with Xero’s price on the Australian stock exchange plunging more than 10% on Thursday to its lowest point in two and half years – although it had recovered most of that by the end of the day.

Accounting software eyes will be keenly focused on Wellington to see what Singh Cassidy has planned for Xero’s next phase of growth. 

A global environment where cloud accounting adoption is still relatively low, and with a strong brand and product behind it, points to opportunities for Xero to prosper in a market looking for efficiencies and gripped by a recruitment crisis. However, with an uncertain economic environment, business costs being cut and a competitive software landscape, particularly among tools for smaller businesses, this will be no small challenge.

 

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Replies (5)

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By Winnie Wiggleroom
17th Nov 2022 06:56

according to the latest email from them they have been working on "a single source of truth" well - Praise Be Brothers and Sisters and thank the Lord.

(who thinks of these things)

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Replying to Winnie Wiggleroom:
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By User deleted
17th Nov 2022 07:59

Their xerocons seem to be full of worshippers. It's a wonder the speaker doesn't shout "Can I get an Amen" when there's an announcement. Very Apple-esque

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Danny Kent
By Viciuno
17th Nov 2022 09:47

" Xero’s report put subdued subscriber growth of 16% down to .... changes we implemented to our partner sales approach"

Is that simply ignoring them? Half implementing ideas? Increasing pricing? Blindly spending resources on useless features/layouts that no accountant will care or need for? Reducing support staff?

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By Hugo Fair
17th Nov 2022 11:47

“Steve has led Xero from 1.4m to 3.5m subscribers; from $484.4m to $1.5bn annualised monthly recurring revenue; and total subscriber lifetime value (LTV) from $3.2bn to $13bn”

So he increased average spend per licensee by over 25% in 4 years - who'd have guessed.
And I've not come across LTV before, but 'do the maths' and you'll see how much Xero expects to extract from each licensee ... 68% more than 4 years ago (niiice)!

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By Philysis
17th Nov 2022 12:22

this tech company seems to be going thro a lot of senior execs, i guess the cash burn is causing the investors much concern, and hence they are jumping a ship taking on water.

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