FY20 Financial and Strategic Overview
Managing COVID-19 financial risks
Group cost
structure
General and
administration
Cost of revenue
12% 14%
31%
Product design and
development (gross)
43%
Sales and
marketing
Scenario planning
Rigorous stress testing of revenue, spending and investment
outlook under a range of scenarios by market, considering:
• Gross subscriber additions: Impact of macro conditions
and lead indicators external to Xero, eg web traffic, trials,
business closures and new business creation rate
• Subscription cancellations and churn: Customer sentiment
and small business performance indicators
•⚫ Other revenue contributors: Eg Xerocon and other events
Focus on costs and capital allocation
Identification of fixed and variable cost base elements:
• People: Selective approach to staff-related costs including hiring,
compensation and travel
• Workplace: Support for extended office closures and work-from-
home arrangements
• Procurement: Reassessment of vendor agreements
• Capital allocation: Capital allocation and resource planning
necessary to support and reprioritise strategic investment planning
15View entire presentation