Bob Scott reporting in his weekly Insights column.
Xero says it had 44,000 subscribers in North America at the end of the half on September 30. The low-cost accounting cloud software company said this week that was an increase in 114 percent over the first half of 2015 in what it terms an off-peak season. Worldwide, Xero had 593,000 subscribers on September 30, a 60-percent increase from the total a year earlier. Most of the total is 425,000 subscribers in Australia and Xero’s home country, New Zealand. In a prepared statement, CEO Rod Drury says the company is on track for $200 million sales (New Zealand)—about $130.5 million (All other numbers $U.S.) The company lost roughly $28.9 million for the recently ended half, up 80.8 percent the corresponding half a year earlier. Subscription revenue reached about $58.6 million, a rise of 72 percent from the prior year. Increased spending ate up the sales increases. Sales and marketing rose to roughly $46.3 million, 84.9-percent higher than spending for the same category in the first half of fiscal 2015. Product design and development spending doubled to about $24.3 million while G&A expenses were up about 48.3 percent to approximately $9.5 million.