Xero continues to build its sales and presence in global markets as it seeks to become the recognised global provider of online accounting solutions for small businesses and consumers.
The company announced yesterday its sales had risen 79% for the first nine months of the financial year when compared with the previous corresponding period.
Sales for the three months ended December were 81% ahead of last year.
Payments for operating activities were 74% ahead for the quarter and 79% for the year to date.
Payments for investing activities were 97% ahead for the quarter and 72% for the year to date.
The company had yet to produce a profit but Craigs Investment Partners broker Chris Timms said it was not unusual for growth companies, such as Xero, to spend money to establish a global presence before consolidating and turning negative cash flows into positive.
The company had cash and short-term deposit balances of more than $147 million at December 31 and could continue to fund its expansion for some time, he said.
Only when the cash balances got low, would the company consider its options.
''Xero will keep on investing until it has sufficient business to go cash-flow positive. How long they will do that is anyone's guess. They will have a point in mind where they can consolidate to generate income,'' he said.
The quarterly report released to NZX showed the company received $32.5 million from customers in the three months ended December and $83.9 million for the nine months.
Staff costs for the quarter were $24 million and $62.2 million for the nine months.
The company said growth in receipts from customers was in line with guidance provided for revenue growth.
Payments for staff costs exceeded head count growth over the same period due to the timing of cash flows and local capitalisation rates of software development salaries which increased payments for staff costs and reduced payments for intellectual property.
During the quarter, Xero paid $5.4 million in cash and 238,490 in shares for Seattle-based online payroll software company Monchilla.
Excluding the Monchilla purchase, cash outflow fell compared with the previous quarter.
Xero is forecast to lose $56.5 million for the year ended March 31 from a loss of $35 million, according to analysts polled by Reuters.
The shares last traded at $15.75, up 11c.
