Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Xero narrows 1H loss as revenue rises

Thursday 03 November 2016 10:24 AM

Xero narrows 1H loss as revenue rises, says it's well positioned to breakeven

By Sophie Boot

Nov. 3 (BusinessDesk) - Xero, the cloud-based accounting software firm, narrowed its first-half loss for 2016 as revenue lifted 48 percent, with its cash burn continuing to slow.

The Wellington-based company said its net loss was $43.9 million in the six months ended Sept. 30, from a loss of $44.3 million a year earlier. Operating revenue rose to $137.2 million from $92.9 million, with operating and investing cash outflows down 7.5 percent to $45.8 million.

Xero has $137.9 million cash and short-term deposits on hand, and is well positioned to manage its cash usage to breakeven, it said. It reported an earnings before interest, taxation, amortisation and depreciation loss of $25.9 million from $33.8 million a year earlier, with its ebitda loss margin down to 19 percent from 36 percent.

The company expects to have 1 million customers this year, and has set a target of achieving $1 billion in annual revenue. It had 862,000 customers as at Sept. 30, with annualised monthly committed revenue of $303.2 million, despite the stronger kiwi dollar negatively impacting that figure by $29.9 million.

Xero said its financial performance was impacted by the costs of transitioning from Rackspace to Amazon Web Services, while a recent executive structure overhaul will support it to reach its $1 billion goal. The management restructure sees country managers reporting to chief executive Rod Drury, the disestablishment of Andy Lark's chief marketing and revenue officer position and the creation of a chief marketing officer role to focus on brand and marketing.



Drury said the company is well-positioned to capitalise on machine learning, and it expects all business software vendors to re-platform over the next few years to take advantage of the services available on larger cloud platforms.

"The network effect of strategic partnerships with top banks, financial institutions and global technology companies, combined with Xero’s product and platform, has created an opportunity to pull away from the competition and leverage the significant white space in the global small business market," Drury said.

The company has hired former Capital One executive Keri Gohman to run its American business from Denver "where future US operational investments will be focused, supporting Xero's hubs in San Francisco, New York, Austin and Seattle" when she starts in December.

In the year since Sept. 30, 2015, Xero saw 64 percent growth in North American subscribers to 77,000, while its subscribers in Australia and New Zealand rose 39 percent to 592,000. In the UK, subscriber numbers advanced 61 percent to 164,000.

The shares lasted traded at $16.90, and have dropped 9.9 percent this year.

(BusinessDesk)

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Reference Group Proposal: Motorists, MTI Support Ban On Less Safe Car Imports

A proposal to ban some used car models from being imported into New Zealand is being welcomed by the Motor Industry Association, which says Japan's scraps are being sent here for waste disposal. More>>

ALSO:

Gordon Campbell: On Asking The Banks To Be Nicer To Farmers

Few would begrudge the idea that banks should be made to act more humanely – given the obscene profits that the Aussie banks are extracting annually from New Zealand, they can surely afford to cut some slack. More>>

ALSO:

Wider Net Ban, Other Threats: Plan To Expand Protection For Maui And Hector’s Dolphins

The Government is taking action to expand and strengthen the protection for Māui and Hector’s dolphins with an updated plan to deal with threats to these native marine mammals. More>>

ALSO:

Fish & Game Support: Canterbury Officer Of Health Warns On Nitrates In Water

"Nitrate testing of 114 drinking water samples from across the Canterbury plains showed that more than half of them were above the level considered safe in the world's largest ever study on the impacts of nitrates in drinking water." More>>

ALSO: