Cloud-based accounting company Xero posted its eighth
consecutive annual loss yesterday, but revenue grew more than
80% and paying customers have surpassed 300,000 to date.
Xero's after-tax loss was up almost 150% to $35.5 million,
but revenues for the year to March grew 83% from $38.4
million to $70.1 million and it retained a $210 million war
chest from capital raising.
Xero's shares, which had soared to a high of almost $45 in
March, were down 15c at $32.35, following yesterday's
Xero chief executive Rod Drury said the company's ''entry
phase'' to the United States market had been completed
successfully, including the raising of $180 million in
capital last October, and had progressed with several
large-scale partnerships, including with H&R Block.
''Xero has proven its strategy and execution and continues to
build a world-class team, while substantially growing
revenue,'' Mr Drury said in a statement yesterday.
Xero separately announced it had been ranked
No 1 in Forbes annual list of World's 100 most innovative
growth companies. Craigs Investment Partners broker Peter
McIntyre said the $35.5 million loss was expected.
''From here on in depends how Xero uses that cash [$210
million]. The market is watching with much anticipation,'' he
Forsyth Barr broker Haley Van Leeuwen said Xero's full-year
result was ''well signalled'' so there were ''no surprises''
''Xero's changed the way it reports its costs to better align
with the approach taken by US SaaS (software as a service)
companies, a signal of how it wants to be viewed and of its
long-term aspirations,'' she said.
New Zealand and Australia, with more than 100,000 subscribing
customers apiece, provided
76% of the total $66.6 million subscription revenue for the
Employee numbers grew by 376 during the year, largely in the
US. Xero had appointed Chris Liddell,
the former vice-president and chief financial officer of
General Motors and Microsoft, as its New York-based
independent board chairman.
''We're pursuing a growth agenda to become the long-term
global leader in small business accounting software,'' Mr
Liddell and Mr Drury said in a joint statement.