A 616% increase in subscription revenue – up to $959,000 from $134,000 - is one of the highlights of Xero’s financial results for the year to March 31, which were released today.
However, a lowlight is that the subscription-based accounting software provider is still yet to make a profit, booking a $6.7 million loss for the year.
The loss was 57% higher than last year, but was expected, according to Xero.
The result left Xero in the position of having just $3,807,000 in cash and bank balances at the end of the reporting period, but a successful $23.2 million capital raising after the reporting period ended (subject to approval at a shareholder meeting today) has boosted the company’s coffers. Of the $23.2 million, $18 million was stumped up by Craig Winkler, formerly of rival accounting software vendor MYOB.
Factors pushing this year’s loss higher include greater costs, both in labour and supplier payments. Xero had 55 staff at the end of the reporting period, as opposed to 44 at year-end 2008.
According to Xero’s commentary on the results, “The net cash used for operations amounted to $5,144,000 compared to $3,875,000 for the previous year.
“These increased costs are primarily attributable to the increase in staff in all areas of operations, particularly product development and sales and marketing.”
Among the year’s highlights is that Xero exceeded 6,000 paying customers, up from 950 at the end of the previous year. More than 2,000 of those are in the UK.
Product highlights during the year include ANZ, NAB and Commonwealth Bank in Australia all providing bank feeds to Australian Xero customers, a global version of Xero released in December, and a PayPal link being embedded with Xero invoices for online payments.
The commentary concludes: “Xero has successfully delivered on its initial milestones, namely to complete product development, establish itself in the New Zealand market and enter the Australian and UK markets.
“Xero is beginning to see early-adopter accounting practices converting their client base and is seeing continued strong growth through this channel.”