New Zealand listed Cloud accounting developer Xero doubled its user base in the past year, it reported as results for the year to 31 March showed revenues up nearly three times to NZ$9.34m.
Operating expenses amounted to $18m for the year as Xero continues to invest in growth, but alongside a net loss of NZ$7.5m (down from $8.4m), the company said it retained $16.9m in cash bank accounts.
Cloud software companies live and die by the numbers of paying subscribers they can recruit and the key figure Xero highlighted in 2011 was the $1m monthly revenue rate it achieved in February, which would point to revenues of $14m on an annualised basis.
From its base in New Zealand, Xero has expanded into Australia and the UK, where it claims to be building similar momentum to the success achieved in its home market. An assault on the US has been on the cards for a few years now, but Xero said it has taken “a measured approach” to expansion, working on local partnerships and product refinements to prepare the way for its push into America.
In the UK, Xero’s revenues almost quadrupled to approximately £630,000 at March 31 and the subsidiary attained profitability at the turn of 2011.
“Having entered the UK in 2008, some considerable time after other vendors, our UK business is now established,” said UK managing director Gary Turner.
The uptake of Cloud accounting was “a little behind the curve” in the UK, he added, but Xero noted a marked improvement in general interest levels in the UK mid-way through 2010 following the launch of its UK bank feed strategy. More than 50 bank and credit card feeds were introduced in the first wave and more are scheduled to come on stream during 2011, Turner said.
Entering the new financial year, Xero’s UK monthly subscription revenues annualise to more than £1m, locking in 75% year-on-year growth with a full financial year of trade remaining, he added.