By Stuart Condie

SYDNEY--Xero Ltd.'s annual profit increased almost six-fold after a second-half recovery in the cloud accounting firm's subscriber growth.

The New Zealand-based company on Thursday reported a net profit for the 12 months through March of 19.8 million New Zealand dollars (US$14.2 million), compared with NZ$3.3 million a year earlier. Operating revenue rose by 18% to NZ$848.8 million.

After a Covid-hit first half, Xero added 288,000 net additions in the six months through March, a half-year record. Xero said the rise came following a progressive increase in sales and marketing spend as business conditions improved.

Total subscribers increased by 456,000, or 20%, over the full-year to 2.74 million.

Xero expects FY 2022 operating expenses to remain consistent with those in the second half of FY 2021 at 80%-85% of operating revenue. That is also consistent with pre-Covid levels, Xero said.

The integration of the Planday, Tickstar and Waddle businesses it acquired during FY 2021 will increase that ratio by about 2%, Xero said.

The company did not declare a dividend. It said it would continue to focus on growing its small business platform globally, reinvesting cash to drive long-term shareholder value.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

05-12-21 1910ET