Xero loss doubles as staff numbers jump
Xero, the cloud-based accounting software company, widened its full-year loss after it doubled staff numbers to drive overseas sales.
New Zealand's second-largest listed company lost about $35 million in the year ended March 31, more than double last year's $14.4 million loss, the Wellington-based company said in a statement citing unaudited figures. The company increased staff numbers to 758 from 382 over the year, it said.
Shares in Xero have soared 229 per cent over the past year, making it the best-performing stock on New Zealand's benchmark NZX 50 Index, as it raised new capital and added workers to expand in the US, the world's largest economy. Xero had $210 million of cash to fund its growth, up from $78 million a year earlier, it said today.
"Recruiting senior management for growth and filling out global teams was a key focus for the 2014 financial year as Xero added a further 376 employees," the company said. "Xero expects strong growth to continue for the foreseeable future."
In the past year, Xero's subscription revenue increased 84 per cent to $66.6 million. Australian subscription revenue rose 120 per cent to $27.7 million while New Zealand revenue increased 48 per cent to $23.2 million and UK revenue was up 92 per cent to $9.8 million.
"With strong growth expected to continue in these markets, Xero turns its focus on the important US market," the company said.
In the past year, North American subscription revenue increased 154 per cent to $3.3 million.
Total operating revenue rose 83 per cent to $70.1 million, Xero said. The strong New Zealand dollar had reduced the returns it receives from overseas as 66 per cent of operating revenue is in foreign currencies and on a constant currency basis, operating revenue rose 92 per cent, it said.
Shares in Xero last traded at $37.20 and the stock is rated an average 'hold' according to analysts polled by Reuters.