Xero halfway to million customer target

Xero has announced from its annual Xerocon conference, held this year in Denver, that it has surpassed 500,000 subscribers globally.

Xero, the cloud-based accounting software developer, is halfway to its target of a million customers, adding 25,000 new subscribers since its March 31 balance date.

The Wellington-based company has been forgoing short-term profits and burning through cash as it chases global scale by targeting New Zealand, Australia, the UK and the US markets.

Xero had 475,000 customers at March 31, with annualised recurring monthly revenue of $159.3 million.

With today's announcement of the addition of another 25,000 customers since then, annualised recurring revenue of $167.7 million is implied.

"Four years ago we reached 50,000 subscribers. Since then we have grown our paying subscriber base ten-fold, built our accounting platform through constant innovation, and become one of the fastest growing software-as-a-service companies in the world," chief executive Rod Drury said in a statement.

"We're immensely proud of achieving 500,000 subscribers who can be found using Xero across US states, UK counties, Australian states and territories, New Zealand, and the large continents and small islands in between."

Xero raised another $147 million from US investors in February and had cash and equivalents of $268.9 million as at March 31.

The company expects to keep posting losses while building up a pipeline of committed recurring revenue, on which it expects to produce profits in the future.

Xero shares last traded at $20.40, and have gained 26 per cent this year.

The stock is rated an average 'sell' based on five analyst recommendations compiled by Reuters, with a median price target of $20.