Friday, 24 April 2015 15:38

Xero: Customers 'switching' from competitors helps fuel growth Featured

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New Zealand-based cloud accounting software provider Xero has recorded strong global customer growth over the 12 months to the end of March, claiming that much of the growth has come from 35% of new customers switching from other accounting software providers.

Releasing its results to the ASX today, Xero (ASX:XRO) reports global operating revenues were $114.9 million, up 87% from $62.2 million in the FY14.

Xero says Australian customers now exceed 203,000, up 86% from 109,000 customers the same time last year, while claiming that more than 15,000 have switched from competitor MYOB.

The company says its accounting software is now used by Australian small businesses to process $1.5 billion in payroll each month.

Globally, Xero reports paying customers grew to 475,000 small businesses, up 67%, while subscription revenue grew 88.9% to $112.2 million – with its recurring revenue model providing the basis for commencing the 2016 financial year strongly, with $156.4 million in annualised subscriptions.

“Xero continued to grow strongly over the past 12 months, showing that small businesses in this country want accounting software they can use anywhere, from any device,” said Chris Ridd, Managing Director of Xero Australia.

“Our recent partnerships with NAB and CGU Insurance have enabled small businesses to tap into our vision for smarter financial services. In the case of our recent API partnership with NAB, we are providing small business customers the ability to immediately and automatically link their bank accounts to their Xero dashboard, and open up new possibilities in the future.

“We’re expecting the 2016 financial year will be even bigger than 2015, with a large number of updates planned for our customers.”

Ridd said Xero now has three platinum accounting partners in Australia (partners with over 500 clients on Xero), including Crowe Howarth Australia, Mulcahy & Co and Bentleys Paragon.

Xero regional customer breakdown:

                            Year ended 31 March

Paying customers

                             2015

      2014

% Change

New Zealand

138,000

102,000

35%

Australia

203,000

109,000

86%

United Kingdom

83,000

47,000

77%

North America

35,000

18,000

94%

Rest of World

16,000

8,000

100%

Total

475,000

284,000

67%

 

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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