Cloud-based technology firm setting sights on US expansion after recording further growth in UK subscriptions
CLOUD ACCOUNTING firm Xero was in bullish mood after publishing encouraging financial results, despite making a net loss of over NZD$82m (£38m) over the past year.
The New Zealand-based technology company has hit 717,000 paid subscribers of its accounting software globally, with 242,000 subscribers added in the 12 months to 31 March 2016, with its UK subscriber market adding 33,000 new subscribers to its 100,000 total announced last year.
Xero also recorded annualised committed monthly revenue of $257.9m, a year-on-year increase of 62%.
However the firm also recorded a net loss of $82.5m for the year, an increase of $12.9m over 2014/2015, with Xero putting those figures down to planned investments as it “continues to invest in scaling its global business”.
The US is part of Xero’s global business strategy for the near future, as the firm looks to build upon its 62,000 North American subscribers.
“We have also made good progress in the competitive United States market where the accounting industry is early in its migration to cloud technologies. Our global experience and platform investment positions us well as the transition to cloudbased business software continues its momentum,” the financial statement noted.
In a further move to capture the US market, Xero has also released TaxTouch, a cloudbased tax solution for freelancers and the self-employed in the United States.
“In the past 12 months, the Xero platform has been used to record more than $1trn of activity across more than 450 million incoming and outgoing transactions. Our vision is to use software to rewire the global small business economy by connecting small businesses to their trading partners,” commented Rod Drury, Xero CEO.
Last week, accounting software firm and one of Xero’s main competitors Sage posted its half-year financial results, recording higher-than-expected revenues as it restructures its business to compete with the likes of Xero and Intuit QuickBooks.
Despite multiple accounting software companies crowding the market, Gary Turner, UK managing director and co-founder of Xero, told Accountancy Age that he doesn’t fear the competition.
Speaking at Accountex 2016, Turner told Accountancy Age: “We’re not really seeing anything coming from the likes of Sage or Intuit,” who he claims are both trying to “make up for some lost time” in the sector.
“Nobody else is delivering the innovation and the value that we’re delivering to our customers and in spite of the noise of what is quite an intensive marketplace; competitively we’re still pumping out about 50,000 new customers every year.”
Watch Accountancy Age’s full interview with Gary Turner from Accountex 2016, where we discuss Xero’s commercial partnerships, breaking the 100,000 subscriber mark and what Xero’s first head of UK accounting Paul Bulpitt is doing to help British practitioners.