Xero boosts subscriber numbers by 60 percent in September year

Annualised committed monthly revenue growth slows as NZ$44 million net loss tracks second half 2014.
Written by Rob O'Neill, Contributor

Cloud accounting company Xero has reported 65 percent year-on-year growth in annualised committed monthly revenue for the half year ended 30 September 2015.

Committed revenue grew by NZ$85.9 million from NZ$132.3 million at 30 September 2014 to NZ$218.2 million.

Annualised committed revenues for the same period of 2014 grew by 87 percent from NZ$70.6 million at 30 September 2013.

Subscription revenues of NZ$89.8 million for the half year, represented an increase of NZ$37.6 million, or 72 percent, from NZ$52.2 million.

At the end of the half, Xero had 593,000 paying subscribers globally, up by 222,000 (60 percent) from 371,000 at 30 September 2014.

Subscriber growth was 79 percent in markets outside of Australia and New Zealand while in the US it was 114 percent, to 47,000 subscribers, the company told investors today.

"Operating metrics are expected to continue to improve as the company continues to drive efficiencies through automation and economies of scale in cost to serve, customer acquisition and product development," Xero's interim half year report says.

"We've achieved strong growth for the first half and we're on track to achieve NZ$200 million subscription revenue based on June 2015 foreign exchange rates this financial year.

"The company is focused on containing its full financial year cash outflow to similar levels to the prior financial year."

Xero's net loss after tax was NZ$44.3 million, up by NZ$19.8 million from NZ$24.5 million year-on-year but in line with the second half of 2015.

Xero said this reflected increased investment in product development and distribution and was impacted adversely by a declining New Zealand currency.

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