Xero will leave the New Zealand share market and consolidate its listing in Australia.

The announcement came as the company revealed its first positive earnings for the six months to September.

The accounting software firm said the decision to stop trading and de-list from the NZX was made after an extensive strategic process which thoroughly canvassed all available options.

Chief executive Rod Drury said: "While more than half of Xero's people live and work in New Zealand, 80 per cent of our revenue now comes from outside New Zealand.

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"Our strategy is to drive further growth in markets like UK, North America and Southeast Asia.

"As Xero continues to grow, gaining enhanced access to deeper capital markets, increased liquidity and a broader base of potential investors is critical to fulfilling our ambition to be the leading global small business platform serving millions of customers."

Drury said the company would remain headquartered in Wellington and it thanked the NZX for providing its start.

"We thank the NZX for providing a valuable platform to support Xero's first decade as a public company. Our success wouldn't be possible without the support of the NZX and our shareholders."

Xero shares fell more than 4 per cent on opening trade this morning dropping $1.45 to $32.60.

An NZX spokeswoman said it was naturally disappointed that Xero had decided to leave the local market

"We are proud of Xero's achievements over the past decade. Its strong performance and support from the New Zealand market has generated opportunities and wealth for local investors."

She said Xero's listing on the NZX had extended beyond the benefits of solely raising capital.

"It has supported Xero's growth aspirations, with the company successfully leveraging its local listing to reinforce its brand and compete globally. NZX is pleased to have played a pivotal role in this."

The surprise announcement came as Xero's earnings went into positive territory for the first time as the accounting software provider shrunk its half-year loss to $21.1 million.

The company reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $5.4m for six months to September 30.

Drury said: "Xero delivered another strong half-year result, achieving positive EBITDA for the first time, and is emerging as one of the largest and fastest growing listed technology companies in Australasia."

Xero's half-year loss was down from $43.9m in the same prior period as the company continued to grow subscription numbers and revenue.

Its added more than 160,000 net new subscribers over the six months growing numbers to 1,199,000 subscribers at September 30, 2017.

More than half of those subscribers are in New Zealand and Australia but the cloud accounting firm also grew its numbers by 54 per cent in the United Kingdom to 253,000 subscribers.

Its North America subscribers grew to 110,000 while the its presence in the rest of world grew to 47,000 subscribers.

"We continue to cement our position as the cloud accounting leader in Australia, New Zealand and the UK, with more than half a million subscribers in Australia, and quarter of a million subscribers in each of the New Zealand and UK markets."

In a note Citi Group's Jane Clapcott said the positive EBITDA was slightly below its optimistic expectation of $11.6m but Xero's core business trends were solid.

The lower than expected earnings were driven by lower than forecast subscriber numbers and revenue from Xero's North America business, she noted.

But the company's gross margin of 80.1 per cent was slightly better than it expected and subscriber growth in Australia and New Zealand was also better.

Total subscriber numbers were higher than expected overall although the North American market numbers were lower.

Drury said the result had been driven by a push for quality subscribers.

"We haven't been just growing at all cost. We have been looking for quality subs."

That was resulting in better margins, improving customer satisfaction and reducing customer churn which increased its life-time income.

Drury said the US was a slow market but ticking over 100,000 subscribers it was starting to get momentum.

"We have always been really confident, it just takes some time."

Now the business had reached earnings break-even it would focus on getting cash-flow break-even, he said.

Drury said the focus now was on building up its leadership team.

The company said it would stop trading on the NZX on January 31, 2018 and de-list on February 2.