Xero nearly triples revenue

NZPA

Friday 20th May 2011

Online accounting software company Xero nearly tripled full year revenue to $9.3 million, as it cut its net loss by almost $1 million to $7.5 million.

Paying business customers rose over the year from 17,000 to 36,000 across 100 countries by March 31, Xero said today.

From February, monthly revenue had been above $1m and was expected to grow strongly, while the annualised subscription run rate was about $14m.

It had established itself inside 2200 accounting firms, with a growing number of accounting practices 100 percent Xero, the company said. Sales operations in all countries were now covering direct costs.

Operating expenses relating to suppliers and employees were up from $12.9m a year ago to $18m, Xero said. That was mainly driven by growth in advertising and marketing, IT infrastructure costs from higher customer numbers and a full year of the Akamai content delivery service, and a rise in employee entitlements as staff numbers rose to 113 from 90.

The operation in this country continued its rapid momentum, while signs of a similar success pattern were apparent in Britain and Australia, giving confidence to further build teams in those markets, Xero said.

The company had taken a measured approach to the United States market as it refined the US version of its software.

Xero had a proven global online accounting platform that provided significant first mover advantage, and was the leading challenger to global business management software incumbents MYOB, Sage and Intuit.

"The incumbents' lack of operational experience in the new online market has meant they are yet to deliver a competitive global solution," Xero said.

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