High growth continues for Xero

High growth continues for loss-making cloud accounting software maker Xero, but the jury remains out on the company's drive into the US market.

Xero announced that its subscription revenue grew to NZ$52 million for the half year ended September 30, up 85 percent from NZ$28.1 million for the same half year in 2013.

Monthly committed subscriptions grew to NZ$11 million, while annualised subscriptions increased to NZ$132.3 million, up 87 percent on the NZ$70.6 million reported at the same time last year.

Xero's global customer base grew 76 percent in the last year, reaching 371,000.

Customer growth in the US was the strongest of any market Xero operates in, at 120 percent. However, that was off a small base of 10,000 customers, growing to 22,000.

In its home base of New Zealand, the company said that over 20 percent of small businesses are using Xero. Year-on-year growth there is now the slowest of any region, at 38 percent.

The focus there is now on connecting small business with large enterprises, financial institutions, and the government.

Growth in both Australia and the UK is strong. In Australia, customer numbers doubled and subscription revenue grew by 115 percent year on year.

The UK operation recorded similar progress.

Xero said its US business is "going great" (PDF), but also identified a few weaknesses, such as gaps in its product offering. It said the transition to cloud accounting there will play out over a number of years.

Xero passed 1,000 employees in October, it said, and has NZ$170.8 million of cash to fund its growth.