Latest news with #subscriberincrease
Yahoo
19-05-2025
- Business
- Yahoo
Digi Communications NV (FRA:53N) Q1 2025 Earnings Call Highlights: Strong Revenue Growth Amidst ...
Release Date: May 15, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Digi Communications NV (FRA:53N) reported a 20% increase in revenues, reaching 532 million in Q1 2025. The company achieved significant growth in Spain, with mobile users surpassing 6.2 million and broadband users growing by 39% year-on-year. Romania saw a 7% growth across all main segments, including mobile, pay TV, and broadband. The company successfully raised over 600 million in funds for further expansion and refinancing efforts. Digi Communications NV (FRA:53N) maintained a healthy EBITDA margin of over 40% in Romania, excluding IFRS 16 numbers. Portugal reported a negative EBITDA, indicating challenges in achieving profitability in this market. Interest expenses increased significantly due to refinancing at higher rates, impacting overall financial performance. The company faces operational challenges in Belgium, with early-stage operations and slower customer growth. There are concerns about the impact of pricing policy changes on margins, particularly in Spain. The company is dealing with high income taxes, partly due to deferred tax and asset sales in Spain. Warning! GuruFocus has detected 5 Warning Signs with FRA:53N. Q: You have shown impressive subscriber growth in Spain, but the margin performance has been weaker. What explains the higher operational pressure in Q1, and how do you think about margins going forward? A: In absolute terms, EBITDA has been stable in Spain, with a marginal decline in Q1 compared to Q4. The slight decrease in margin is due to changes in our pricing policy and the introduction of more affordable products. We expect margins to bounce back to previous levels by the end of the year. (Respondent: CEO) Q: Some of your peers have been vocal about the need for in-market consolidation in Europe and Spain. Do you think the Spanish market needs consolidation, and does Digi have a potential role to play here? A: We operate in competitive markets, including Spain. Our main strategy is organic growth, and we are not aiming to be a consolidator. If consolidation happens, we will take note but likely continue our operations as usual. (Respondent: CEO) Q: Could you provide some color on your subscriber trend in Belgium? Why is portability coming down since launch, and how is your mobile network development in Belgium progressing? A: Belgium is our youngest operation, and we are still in the early stages. We have gained 53,000 users by the end of Q1, and we are happy with this number. It is difficult to provide meaningful projections for coverage or portability at this stage. (Respondent: CEO) Q: Can you provide an update on the acquisition of Telecom Romania Mobile? A: The process is ongoing. The competition authority announced the remedies proposed by us and Vodafone. These remedies are publicly available, and there is a public process for comments. We hope to be in the final stages of the process soon. (Respondent: CEO) Q: What is your revenue outlook for 2025, and what is your longer-term growth outlook? A: For 2025, we expect a low single-digit increase in EBITDA and a low double-digit increase in revenues. Long-term growth is difficult to predict, especially with new markets like Portugal and Belgium in early stages. (Respondent: CFO) For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
16-05-2025
- Business
- Yahoo
Xero Ltd (XROLF) (FY 2025) Earnings Call Highlights: Strong Revenue Growth and Strategic Investments
Revenue: Increased by 23% to $2.103 billion year over year. Adjusted EBITDA: Rose by 22% to $641 million, up $114 million from the previous year. Rule of 40 Outcome: Achieved 44.3%, up 3.3 percentage points year over year. Subscriber Growth: Underlying growth of 10% after removing 160,000 long idle subscriptions. ARPU Growth: Increased by 11% on an underlying basis. Free Cash Flow Margin: Expanded to 24.1%. AMRR: Surpassed $2.3 billion, up 22% year over year. Churn Rate: Low at 1.03% for the year. Operating Expenses Ratio: Achieved 71.8% for fiscal '25. Cash and Liquidity: Total net cash addition of $683 million, with approximately $2.3 billion in available liquidity. Payment Revenue Growth: Increased by 65% year over year. Platform Revenue Growth: Accelerated to 29% year over year. Sales and Marketing Costs: Increased by 23%, maintaining a flat percentage of revenue at 31.6%. Warning! GuruFocus has detected 4 Warning Sign with XROLF. Release Date: May 15, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Xero Ltd (XROLF) reported a 23% increase in revenue, reaching $2.103 billion year on year. Adjusted EBITDA rose by 22% to $641 million, demonstrating strong financial performance. The company achieved a Rule of 40 outcome of 44.3%, indicating a balance between growth and profitability. Subscriber growth was robust, with a 10% increase in underlying subscribers and an 11% rise in ARPU. Xero Ltd (XROLF) expanded its payment offerings, resulting in a 65% increase in payment revenue year on year. The removal of long idle subscriptions impacted subscriber growth metrics. Subscriber growth in Canada was limited due to a subdued market backdrop. The company faces tougher revenue growth comparisons in the first half of fiscal '26 due to strong prior performance. There is a potential ARPU headwind in the UK due to the introduction of the lower-priced Xero Simple product. The North American market still requires significant investment to fully capture growth opportunities. Q: At the Investor Day, you targeted an improvement in the long-term OpEx to sales ratio. For FY27, will you target an improvement versus the 71.5% headline FY25 number or the 69% to 70% underlying FY25 number? A: Claire Bramley, CFO: We're pleased with our FY25 OpEx ratio performance and have set a 71.5% guidance for FY26. There are nonrecurring items included in this figure. Looking forward, we're focused on investing for growth, maintaining a disciplined approach to drive free cash flow margins and top-line growth, aiming for a Rule of 40 outcome. Q: Can you provide an update on the North American product roadmap and what's holding Xero back in terms of product gaps? A: Sukhinder Cassidy, CEO: We've improved product market fit with core accounting and are building a full stack of competitive products. We've released end-of-period reconciliation and improved bank feeds. We're also working on embedding payroll with Gusto. Incremental brand spend is planned, but significant investment will require a multiyear approach. Q: Regarding AI, where do you see incremental opportunities to broaden product capability and monetize it? A: Sukhinder Cassidy, CEO: We're pleased with JAX's progress, now in beta for all subscribers. We aim to expand its utility across all platform jobs, including bank reconciliation and analytics. Monetization is a long-term opportunity, but our current focus is on expanding product utility. Q: What are your first impressions and potential changes you might consider at Xero? A: Claire Bramley, CFO: I'm excited to join Xero, which has shown strong growth and profitability. We aim to balance operating leverage with growth investments, focusing on returns and customer value. Our capital management strategy remains focused on building, partnering, and buying, with a strong balance sheet providing optionality. Q: Can you discuss the US growth opportunity and the importance of partnerships like Gusto? A: Sukhinder Cassidy, CEO: We control retail pricing and aim to drive ARPU growth through partnerships. A full value proposition in the US is crucial for sustainable economics. We plan to invest significantly in brand awareness once we have a complete offering. Q: How do you view the balance between subscriber growth and ARPU growth, especially in ANZ? A: Sukhinder Cassidy, CEO: We're excited about opportunities in both ANZ and international markets. In ANZ, we see potential to deepen customer engagement and product capabilities. Internationally, we focus on underpenetrated markets, balancing subscriber growth with ARPU expansion. Q: Can you clarify if Xero is prepared to dip below the Rule of 40 for investment opportunities? A: Claire Bramley, CFO: The Rule of 40 is an aspiration, not a strict guidance. We aim to balance investments in growth with operating leverage and profitability. We'll continue to invest strategically to drive both revenue and profitability growth. Q: What are your expectations for subscriber interest related to Making Tax Digital in the UK? A: Sukhinder Cassidy, CEO: Historically, subscriber interest tends to pick up closer to the deadline rather than early. We expect similar behavior with the upcoming mandate, with Xero Simple for SPs launching this summer. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
