A positive announcement by the cloud-based accounting platform yesterday with a definite pivot to a more balanced approach around growth. XRO previously ran operating expenses at 84% of revenue, with a lot of this going into growth initiatives. Yesterday, the new CEO Sukhinder Singh Cassidy, announced plans to pare this back to 75% with a 15% reduction in the workforce the major saving. They also announced plans for a redesign of their technology function in the upcoming quarter which could see further efficiencies. The move will increase earnings over the coming 3 years and brokers this morning are reflecting this in their numbers. This is a strong/positive catalyst for XRO in our view and a sign of what comes next in tech i.e. a focus on earnings rather than growth at all costs.
MM remains long & bullish XRO
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