Xero has announced from its annual Xerocon conference, held this year in Denver, that it has surpassed 500,000 subscribers globally.
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 which is foregoing profits to expand sales, posted a wider first-half loss even as revenue increased 71 percent, and said it wants to maintain the current annual cash burn through the rest of the year.
The Wellington-based company posted a loss of $44.3 million,or 33 cents per share, in the six months ended September 30, from $24.5 million, or 19 cents, a year earlier, it said in a statement. Revenue rose to $92.9 million from $54.3 million a year earlier, of which subscription revenue climbed 72 percent to $85.9 million. Gross margin increased to 74 percent from 67 percent a year earlier.
Last week Xero reported a slower quarterly cash outflow in the three months through September, lifting customer receipts at a faster pace than its hefty wage cost. It generated an operational and investment cash outflow of $88.4 million in the 2015 financial year, a level it wants to maintain in the current year.
"Xero is focused on containing its full financial year cash outflow to similar levels to the prior financial year," chief executive Rod Drury said. "This growth, as well as the rigour that we have established within the business positions Xero for long-term value creation."
Xero chief executive and founder Rod Drury. Photo / NZME.
The company has been a pioneer on the local stock exchange for software-as-a-service firms forgoing short-term profits in a bid to create a business that can thrive on the global stage, and has attracted major US investors happy to keep its coffers full, pumping in another $147 million in March this year. It had a closing cash position of $224.5 million as at September 30.
The shares rose 2.8 percent to $18.25, the highest level since July 27, and have increased 3.4 percent this year.
Xero increased total subscriber numbers 60 percent to 593,000, as it more than doubled clients in its key market of North America to 47,000. Australian customers rose 66 percent to 262,000, New Zealand gained 37 percent to 163,000, and UK clients increased 67 percent to 102,000. Customers in the rest of the world advanced 73 percent to 19,000.
That translated to a 69 percent lift in Australian revenue to $43.4 million, a 39 percent increase in New Zealand sales to $21.4 million, and a 98 percent jump in UK revenue to $16.4 million. Revenue in North America more than doubled to $7.5 million, while sales from the rest of the world rose 105 percent to $4.1 million.
Annualised committed monthly revenue, Xero's favoured metric for measuring sales, climbed 65 percent to $218.2 million, and the company grew headcount 32 percent to 1,312 as at September 30 from the same time a year earlier.
