Xero customer sales up 79pc

Xero founder and chief executive Rod Drury. Photo / Dean Purcell

Xero, the cloud-based accounting firm, said customer sales are tracking 79 per cent ahead of the year earlier in the first nine months of its financial year, in line with its revenue growth forecasts.

The Wellington-based company had $83.9 million of receipts from customers in the nine months ended December 31, up from $46.7 million in the year earlier period, it said in a statement. In the third quarter ended December 31, receipts rose 81 per cent to $32.5 million from the same quarter a year earlier, it said.

The unprofitable accounting software developer is foregoing profits as it invests in growth. It's forecast to post a loss of $56.5 million this financial year ending March 31, from a loss of $35 million last year, according to analysts polled by Reuters. Total revenue is expected to jump 80 per cent to $126.3 million, according to the analyst forecasts.

Xero had $147.8 million of cash to fund its growth at the end of the third quarter, down from $170.8 million at the end of the second quarter, it said today. The company in October 2013 raised $180 million in new capital to fund its US growth plans and is eyeing a US listing after it reaches annual revenues of US$100 million.

During the third quarter, it paid $5.3 million in cash and 238,490 in shares for Seattle-based online payroll software company Monchilla. The acquisition took its total operating and investing cash outflow to $22.9 million in the quarter, from $22.6 million in the second quarter. Had it not been for Monchilla, the cash outflow would have declined from the earlier quarter, it said.

Xero shares are the worst performer on the NZX benchmark NZX50 Index the past year, having lost 62 per cent of their value. The stock last traded at $15.64.

See today's Xero announcement here: