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

 

Reserve Bank: Official Cash Rate Unchanged At 1 Percent

The Monetary Policy Committee has decided to keep the Official Cash Rate (OCR) at 1.0 percent. Employment remains around its maximum sustainable level while inflation remains below the 2 percent target mid-point but within our target range... More>>

ALSO:

Food Prices: Avocados At Lowest Price In Almost Three Years

Avocados are at their cheapest average price since February 2017, with tomato, lettuce, and cucumber prices also falling, Stats NZ said today. More>>

Auckland Port Move: Cabinet Ministers Deliberate On Report

Cabinet ministers now have a copy of a report urging the government to move the Auckland port up north, but say no final decisions have been made. More>>

ALSO:

Toxicology Tests Planned: Dead Rats Washed Up On Beaches

As many as 600 rats washed up on Westport's North Beach over the weekend to the horror of locals. DOC said they may have been killed by a recent 1080 poison drop 140km away and washed down the Buller River after heavy rain battered the coast. More>>

ALSO: