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 number of new customers buying subscriptions to its online services surged, with 42% of new customers coming via online subscriptions in the latest period and the CEO expecting that figure to climb past 50% within 12 months.
MYOB reported a 7.6% rise in first-half revenue, reaching $115.7 million, driven in part by increased uptake of its online subscription services.
MYOB posted a net loss of $6.3 million after tax for the latest half. The company said that figure wasn’t a key focus because the profit statement included many non-cash items, so investors should consider the broader transition to subscription revenue and other operating metrics when assessing performance.
MYOB is privately owned by private equity firm Bain Capital. The business made its name in the 1990s selling desktop accounting software to small businesses and is now shifting toward cloud-based subscription services.
The rise of cloud computing is shaking up the sector by moving customers from desktop software to web-based subscription services, and MYOB has seen this trend push a large share of new customers toward its online subscriptions.
Yes. The article notes growing competition from rivals such as ASX-listed Xero, which offers similar cloud-based accounting services over the web.
MYOB says it has transitioned to being driven by online subscription revenue. That shift suggests a move toward more recurring, web-delivered services rather than one-off desktop software sales, which can change revenue predictability and growth dynamics.
Investors should monitor the pace of online subscription growth (the CEO expects it to exceed 50%), future revenue results, how non-cash items affect reported profits, and competitive pressure from cloud rivals like Xero — all factors highlighted in the article.
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