Xero first-half loss more than doubles, losses to grow with new customers
Xero [NZX: XRO], the cloud-based accounting software company that's now the second-biggest listed company more than doubled its first-half loss as it continues its drive for global domination.
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Unprofitable by design as it grabs market share,Xero says it sees faster sales growth and more red ink for the rest of the year.
Wellington-based Xero's net loss widened to $17.1 million, or 14 cents per share, in the six months ended Sept. 30, from $7 million, or 7 cents, a year earlier, it said in a statement after the close of trading on the NZX.
The company had already reported an 84 percent gain in first-half sales to $30.3 million, and said it expects annual revenue to exceed 80 percent growth and bigger operating losses in the second half of the year.
Xero is flush with cash after raising $180 million in new capital last month, mainly from US investors, leaving it with some $230 million in funding to launch its assault on the US market, where it claims to be the number one challenger.
"The board is continuing to follow a growth agenda focused on creating longer-term shareholder value rather than short-term profitability," the company said. "Xero is investing in the infrastructure to support millions of customers and create a significant cloud-based financial platform for its customers and partners."
The shares fell 0.9 percent to $35.66 on the NZX, before the release, and have almost doubled from $17.95 from before the October capital raising. The shares were down 1.8 percent to A$31.61 on the ASX, where trading was still open.
Xero's operating cash-burn more than doubled to $8.9 million in the first half from $3.7 million a year earlier, while investing cash outflow surged to almost $14 million in the half from $4.8 million, mainly on increased capitalised development costs.
(BusinessDesk)
Paul McBeth
Wed, 11 Jul 2018
Wed, 11 Jul 2018
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Xero first-half loss more than doubles, losses to grow with new customers
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