By Stuart Condie

SYDNEY--Xero increased its first-half profit by 76% on growth in both the cloud-accounting software provider's prices and subscribers.

The New Zealand-based company on Thursday reported a net profit of 95.1 million New Zealand dollars (US$56.4 million) for the six months through September, compared with a NZ$54.1 million profit a year earlier.

Revenue rose 25% to NZ$995.9 million as Xero's subscriber base rose 6% to 4.2 million even as the company deactivated 160,000 dormant accounts over the fiscal half.

Earnings before interest, tax, depreciation and amortization rose 51% to NZ$311.7 million as Xero reduced its operating-expenses-to-operating-revenue ratio to 71.2% from 79.1% a year earlier. It reiterated its guidance for a full-year ratio of 73%, which some analysts think is too high.

Xero did not declare a dividend. Analysts had been looking for a net profit of NZ$110.2 million from revenue of NZ$994.6 million, according to data compiled by Visible Alpha. A majority of analysts monitored are bullish on the stock.

Free cashflow almost doubled to NZ$208.7 million at a 21% margin. With revenue growing about 23% in constant currency terms, Xero achieved a score of 43.9 on the so-called rule-of-40, a metric designed to measure profitable growth at software-as-a-service providers.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

November 13, 2024 17:00 ET (22:00 GMT)

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