Online accounting company Xero has doubled its revenue this financial year (ending March 31) over last year, a statement to the Stock Exchange shows. This is on the back of at least a doubling in the number of business customers in all of its market territories.
A loss figure has not yet been calculated, says CEO Rod Drury, but it is likely to be of the same order as last year’s after-tax net loss of $7.5 million. At last year’s annual general meeting, Drury formally announced that the company had abandoned its goal to break even in the short term and was investing in growth.
Revenue for the year just ended is more than $19 million, compared to $9.3 million for the previous year, which was about a threefold increase on the year before.
The number of business customers grew from 36,000 to more than 78,000. More than half of the monthly committed revenue from regular customers now comes from Xero’s three overseas territories – Australia, the UK and the US.
The lack of profit doesn’t seem to have worried the market, where the company’s shares continued to rise following the announcement.
The UK business is set for good growth now Xero has established business banking feeds from some of the major British banks, says Drury.
The US is proving a tougher nut to crack, against the entrenched presence of Intuit, a $US14 billion company with a lock on most of the accountancy practices. Intuit has been around for a long time without significant competition, he says and Xero is looking to change that. A key factor is to get specific US-relevant features into the product suite, the primary missing element being management of cheques, which are used in the US far more than in Xero’s other markets.
Drury has mentioned the addition of US-specific features in earlier talks with Computerworld, he acknowledges, but relative priorities have since changed, he says, with the company deciding to put more effort into growing the NZ, Australia and UK markets.
The embryonic mobile business is “going really well”, Drury says, though with “everybody going mobile”, getting developer resources on a highly competitive market has proved a challenge, he says. Xero has a team of four developers working on further developing mobile versions of the interface to its software.