Subscriptions boost MYOB
MYOB, now owned by private equity firm Bain Capital, made its name in the 1990s selling accounting software packages for small businesses to install on their desktop computers.
But it has faced growing competition from new rivals such as ASX-listed Xero providing similar services over the web.
After reporting a 7.6 per cent rise in first-half revenue to $115.7 million, chief executive Tim Reed said the share of new customers coming to the business via online subscriptions had surged to 42 per cent and would soon be much higher.
"The market is evolving. That 42 per cent a year ago would have been sub-10 per cent, so it is moving quite quickly," he said. "I certainly expect that over the next 12 months it will go well past 50 per cent."
Mr Reed said MYOB had made the transition to a company driven by online subscription revenue.
In the latest half it made a net loss of $6.3 million after tax. The company said this figure was not a key focus because its profit statement contained many non-cash items.
Frequently Asked Questions about this Article…
MYOB said the share of new customers buying online subscriptions surged to 42% in the latest half, up sharply from what the company described as sub-10% a year earlier. CEO Tim Reed expects that figure to move well past 50% over the next 12 months.
MYOB reported a 7.6% rise in first-half revenue, bringing total sales to $115.7 million for the period.
No. MYOB recorded a net loss of $6.3 million after tax in the latest half. The company said this figure was not a key focus because its profit statement included many non-cash items.
MYOB is privately owned by private equity firm Bain Capital. The article notes the company is undergoing a strategic shift toward online subscription revenue under that ownership.
The rise of cloud computing is reshaping the sector and driving customers toward online services. MYOB has transitioned from desktop software to a company increasingly driven by online subscription revenue.
MYOB faces growing competition from rivals such as ASX-listed Xero, which offers similar accounting and business services delivered over the web.
The shift means a rising share of new customers are buying subscriptions online, and MYOB says its business is now driven by subscription revenue rather than primarily desktop software sales.
Investors should note the combination of stronger first-half revenue (up 7.6% to $115.7m) and rapid growth in online subscription customers (42% of new customers), alongside a reported net loss of $6.3m that the company attributed in part to non-cash items. These facts highlight MYOB's ongoing transition to a subscription-focused, cloud-driven business model.
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