Nov. 14 (BusinessDesk) - Xero, the cloud-based accounting service, posted a wider first-half loss and said it will keep spending to build sales after more than doubling its global customer base.
The loss was $7 million in the six months ended Sept. 30, up from a loss of $3.7 million a year earlier, the Wellington-based company said in a statement. Sales soared 119 percent to $17.3 million, closely followed by a 105 percent jump in operating expenses to $22.8 million.
Xero expects to double operating revenue in the full year, when it will post a second-half loss bigger than the first half loss.
“We have $30.6 million of cash on hand and the ability to raise significantly more cash if required,” said chief executive Rod Drury. “The transition of the accounting industry into the cloud is in full swing and we are very well positioned.
“We believe it is in the best interests of shareholders to continue to grow the business aggressively,” he said.
Xero shares fell 1.9 percent to $6.24. Investors who bought the stock at the start of the year are sitting on a paper profit of 130 percent.
The company plans to embark on new developments including additional tax features for its Australia product, adding payroll in the US and adding to sales teams in Australia, the UK and the US.
The company has one recommendation on Reuters, ‘underperform’ with a price target of $3.93.