Most of the companies are fast leveraging the AI technology to not only deliver impressive performance but also to position at the forefront of AI technology integration and innovation.
Xero Limited (ASX: XRO)
Xero Limited (ASX: XRO) has recently announced a major leadership transition within the company, with CFO Kirsty Godfrey-Billy set to step down on March 31, 2025, after nine years with the company. Kirsty had invaluable contributions, particularly in steering Xero's growth and profitability, enhancing financial reporting, and managing capital effectively.
Another important move has been Xero's agreeing to buy Syft Analytics, a cloud-based reporting and analytics platform, for as much as $70 million. Syft is further aligned with Xero's vision to improve accounting and reporting functions to provide deeper insights to small businesses and their advisors. Syft's established presence across 80 countries provides an excellent way to enrich analytics and reporting abilities for Xero to further assist small businesses with their financial challenges.
Xero's financial results for FY24 reflect a strong performance, marked by a 22% revenue growth to $1.714 billion and a significant 75% increase in adjusted EBITDA. The company achieved a Rule of 40 outcome of 41%, showcasing its ability to balance growth with profitability. This positive trend indicates a robust demand for Xero's services, even as small businesses face economic pressures. The firm is also focusing on expanding its customer base while enhancing the platform's value for existing users, demonstrating its resilience in a competitive market.
Xero is committed to executing its FY25-27 strategy, which centers on optimizing its operations and introducing innovative solutions. The strategy comprises four key pillars, including strengthening its market position and enhancing product offerings. Recent initiatives highlight improvements in customer experience and product capabilities, such as the integration of generative AI tools and enhanced payroll features. As Xero continues to respond to the changing requirements of small businesses, it remains focused on sustainability and social responsibility, delivering long-term stakeholder value while promoting an inclusive workplace.
Seek limited (ASX: SEK)
Seek limited announced that it had signed an Exclusivity Deed with Xref Limited (ASX: XF1) following Seek’s non-binding, indicative offer to acquire all Xref’s ordinary shares at A$0.2181 per share in cash through a scheme of arrangement. Seek also reported robust FY24 financial results, delivering 17% YoY sales revenue growth to A$1.406 billion, a 13% increase in EBITDA to A$553.4 million, and a 31% rise in NPAT to A$258.1 million. This strong financial performance was achieved despite a substantial decline in job ad volumes across APAC, reflecting challenging post-peak market conditions.
SEEK, one of the best AI stocks to use this, leveraged several operational strategies to counterbalance the headwinds. Key initiatives included completing the Platform Unification project, which streamlined operations across regions, bolstered market alignment, and contributed to double-digit yield growth that partially offset volume declines. Additionally, SEEK divested its Latin American assets to prioritize the platform's unified potential, emphasizing the company’s focus on core, scalable markets. SEEK also integrated advanced AI capabilities, enhancing system efficiencies, optimizing operational costs, and providing continuous improvements in AI-driven matching and verification processes. The robust network effects and data from SEEK’s platform underpin these advancements, reinforcing competitive advantages in accuracy and service speed.
In the ANZ region, job ad volumes declined by 20%, consistent with macroeconomic pressures such as rising unemployment and reduced job vacancies. Despite this, SEEK's dynamic pricing model supported a 13% yield increase, benefiting from wage growth and an increase in job applications per ad, thereby helping to mitigate revenue impacts. In Asia, revenues remained steady with the previous year, despite a 21% drop in paid ad volumes. A notable 24% yield increase offset the volume decline, driven by higher engagement with premium features, a standardized discount model, and pricing flexibility facilitated by the unified platform. Total expenses were on par with the prior year, as Platform Unification costs phased out as planned. SEEK’s focus now shifts to accelerating product development after a period of limited activity. The SEEK Growth Fund valuation also rose 26% since its inception, supported by a 31% revenue increase from HR SaaS assets, despite some valuation pressures in Online Education and Contingent Labour due to subdued private market activity. For FY25, SEEK has provided revenue guidance between A$1.02 billion and A$1.14 billion, with projected EBITDA of A$430 million to A$500 million and adjusted NPAT between A$130 million and A$180 million. The company remains committed to its long-term strategic goal of achieving A$2 billion in revenue by FY28, targeting operating leverage through disciplined expense management and productivity gains. SEEK expects ad volumes in ANZ to continue declining amid challenging economic conditions, though Asia may see partial recovery in H2, supported by stable revenue levels and sustained yield growth. Positioned to expand unified platform capabilities and drive premium feature adoption, SEEK is strategically aligned to navigate near-term challenges and capitalize on long-term growth opportunities.
(Source: Company’s Reports)
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