Xro - xero

[couta1]

Hmm, what about GeoOp? It is up 45% from its low of last week.
True but its still down 60% from its high of $4.49 and I'm not going to offend anyone by printing what I think of Geoop personally.T didn't see your post before putting mine up,on the same wavelength

[Bilbo]

True but its still down 60% from its high of $4.49 and I'm not going to offend anyone by printing what I think of Geoop personally.T didn't see your post before putting mine up,on the same wavelength

Yes, my comment was a bit tongue in cheek.

[Copper]

Hmm, what about GeoOp? It is up 45% from its low of last week.

I know it's not this thread but I was watching Geo Op and the turnover was so thin that you wouldn't or couldn't have bought at bottom and if you did you wouldn't of had a clue whether they were going up or down from there.At least with Xero you have some turnover...

[skid]

Yep Xro was a slow starter but doing pretty well now.
Disc.-Im to much of a coward to stump up that amount per share--but good luck to all.

(so far US earnings seem to be panning out better than predicted-watch that space)

[skid]

Any links / references to support that comment Skid? My understanding was that general market sentiment re US results (that have been announced to the market at least) were at best neutral.

Cheers.

It was looking a bit gloomy last week with earnings ut these seemed a bit better bearing in mind that most were pessimistic about earnings coming up
http://money.cnn.com/2014/04/22/investing/stocks-markets/index.html
Id have to look back to see the details of disappointing earnings --one of the large banks had disappointing earnings (Goldman Sachs?) but then J P Morgan had positive earnings.(but you never know what they are doing with their books)
Im certainly not major bullish on the US markets but I guess I was expecting worse(and maybe that will come)
http://www.gmanetwork.com/news/story/357971/economy/finance/us-stocks-earnings-healthcare-give-wall-street-sixth-straight-gain

[skid]

Heres a bit more of an overall view with a slightly different ''feel''to it in terms of earnings
http://www.fxstreet.com/analysis/indices-insider/2014/04/22/04/

So its still anyones ball game--probably best to err on the side of caution

This stuff probably does have an effect on Xro,especially until more info about their own sales comes in

[robbo24]

Anyone explain why, despite the NASDAQ being down 1% and high growth stocks down by upwards of 5% overnight, XRO has opened up 2.2%?

Voodoo magic

(and some stocks on the Nasdaq Composite actually go up while the index is down too. Every company still has its individual merits.)

[Xerof]

Nasdaq rallied late. It's now UP in after hours

[vorno]

http://boxfreeit.com.au/2014/04/23/myob-essentials-vs-xero-review-best-micro-business/

"Conclusion

At the entry level, Xero is an appealing and easy to use program. Its main problem is the severe restrictions that are placed on the number of transactions that can be used per month in the Starter package. The next edition, which is closer to MYOB Essentials in features, costs double the price.

MYOB Essentials Accounting has no restrictions on the number of transactions, so would be suitable for a business that has grown beyond the micro stage."

Any experienced candidates able to draw a comparison?

[Xerof]

My daily chart shows a green hammer close, and higher into new day, but thats based on FXCM CFD's, not physical exchange. Bloomberg have it down at the close

[Bilbo]

Anyone explain why, despite the NASDAQ being down 1% and high growth stocks down by upwards of 5% overnight, XRO has opened up 2.2%?

Both FB and Apple up strongly after hours after beating earnings estimates.

[Harvey Specter]

http://boxfreeit.com.au/2014/04/23/myob-essentials-vs-xero-review-best-micro-business/

"Conclusion

At the entry level, Xero is an appealing and easy to use program. Its main problem is the severe restrictions that are placed on the number of transactions that can be used per month in the Starter package. The next edition, which is closer to MYOB Essentials in features, costs double the price.

MYOB Essentials Accounting has no restrictions on the number of transactions, so would be suitable for a business that has grown beyond the micro stage."

Any experienced candidates able to draw a comparison?Its $50 per month for essentially unlimited transactions. If you cant afford $600 a year which will save you over $1000 with your accountant, then maybe you are too small for Xero.

I think the issue is for real small companies that may have an account on Ebay or Shopify so they actually turn over more than the maximum transaction on the small program, but the business doesn't really warrent more.

[tzbang]

As a small business owner (8 staff) we moved to Xero when there was only 2 of us. Best move ever and we weren't concerned with the monthly cost. In the scheme of running a growing business, efficient accounting is paramount. Most people who go into business aren't too worried about $50 a month. Perhaps, when you're working out of a bedroom or something on a shoe-string.. but I find even they want to start the way they want to continue as soon as possible.

[winner69]

As a small business owner (8 staff) we moved to Xero when there was only 2 of us. Best move ever and we weren't concerned with the monthly cost. In the scheme of running a growing business, efficient accounting is paramount. Most people who go into business aren't too worried about $50 a month. Perhaps, when you're working out of a bedroom or something on a shoe-string.. but I find even they want to start the way they want to continue as soon as possible.

Just as a matter of interest what do you do about the payroll

Helping a guy out with 25 employees and payroll (using myob payroll) seems to be a hurdle in changing to Xero he says

[Harvey Specter]

Just as a matter of interest what do you do about the payroll

Helping a guy out with 25 employees and payroll (using myob payroll) seems to be a hurdle in changing to Xero he saysMy brothers company uses one of the online payroll providers which integrates with Xero I am not involved in that so dont know much about it. Similar sized business 20-30 staff.

http://www.xero.com/nz/add-ons/payroll/

[winner69]

Thanks Harvey

[baller18]

http://www.dailydo.co.nz/auckland/xeroaccounting585893

Interesting an Australia website marketing an online course in xero on a nz website..

[robbo24]

Interesting to see a bot buyer going today...

[robbo24]

I cant recall a day when there wasn't of late. Seems to be a bit of strength off of $32 huh Robbo, what do you think?

Robot seller is more common than robot buyer!

And yes it seems to be a favourable support level with reference to December thru to January. A significant volume traded at price too, looking at the volume by price indicator.

[robbo24]

KW never been a big XRO fan ;)

Here's a response from the Xero blog if anyone hadn't seen it already:
http://www.xero.com/blog/2014/04/managing-xero-subscription/

Let's hope the stories of brutal molestation begin to disappear then.

[skid]

Nasdaq up a solid 1% in futures trading, may be time to pile into XRO for a ride up to $35 if she can close above the old PSAR sell level of $32.50 today...

Looks like the buyers didnt care about Nasdaq futures Moosie:)

[skid]

Patiently waiting for the Kiwi to lose a bit of ground against the US--(that would make both me and Xro happy)
Dag Nabbit those interest rate rises:(

[skid]

Another rough day on Monday after fridays Nasdaq

[LegendOfRiot]

I was thinking XRO didn't track the NASDAQ exactly recently?

[winner69]

I was thinking XRO didn't track the NASDAQ exactly recently?

What happened after hours ......and what futures saying

Might be ok .....one up day and one down day .......no harm?

[skid]

The up day was 1/2% Nasdaq and the next (down) was 1.75%--headlines were ''Stock end the week in the red as teck stocks get hammered''-----Time will tell for Xro..---The ''oh no not again'' factor may come into play.

[couta1]

Intuit finished up 1.59% so that's good aye

[skid]

Intuit finished up 1.59% so that's good aye

Yep,they're not All down--there were always gainers even in the last fall--I also think it helps having a weekend in between--The Tecks did better than boitecks-- Xro was funny last time--It didnt fall as bad as some when it was all on,but then kept falling when things turned.(go figure)before turning--Its just a worry in light of the fact that it was looking like things were getting back to normal and then 1 small fall,followed by another more sizable one.
Guess tomorrow will tell -I dont think there will be panic,but SP will probably be moving in the wrong direction--What the Nasdaq does on Monday will be important in terms of setting the stage for the week.--ATM is doesnt appear that the market has gotten the shock of the last fall out of its system.

[robbo24]

That's why we use resistance levels as gauges my good friend!

If anyone is wondering why XRO
ASC closed up, look at the AUDxNZD...

http://www.fxempire.com/technical/technical-analysis-reports/nasdaq-forecast-for-the-week-of-april-28-2014-technical-analysis/

Watch the low from last week's HAMMER TIME.

[Valuegrowth]

We might see some sell off in NASDQ. We have to wait and see. If we see more selling in over stretched tech stocks it could affect XERO too. Next couple of weeks will be very interesting to watch. Some high-momentum overvalued tech stocks should be avoided at this time, despite the correction. Some tech stocks are trading at excessive valuations.

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please note that I do not endorse or take responsibility for material in the above hyper-linked site. Please do your own research.

[robbo24]

http://www.bloomberg.com/news/2014-04-28/fear-muted-in-nasdaq-amid-biggest-swings-in-two-years-options.html

Nice little piece to keep the bulls running.

[winner69]

http://www.bloomberg.com/news/2014-04-28/fear-muted-in-nasdaq-amid-biggest-swings-in-two-years-options.html

Nice little piece to keep the bulls running.

Says NAS100 has risen in 10 of the last 11 years.

That's pretty impressive, a sure bet

Wonder what happened 12 and 13 years ago?

[drswag]

H&R Blcok and Xro form strategic alliance in the US

https://www.nzx.com/companies/XRO/announcements/249887

[sommelier]

Yea, 24.5 million tax returns, MCap US$7.7B, 12,700 offices worldwide, primarily small/medium. Looks like an outstanding partnership.

[robbo24]

Beast mode activated

[Harvey Specter]

Yea, 24.5 million tax returns, MCap US$7.7B, 12,700 offices worldwide, primarily small/medium. Looks like an outstanding partnership.Great for brand awareness in the US.

[drswag]

Disc - glad I held cash and didn't buy DIL. Looking for an opening to get in ;)

I too am glad for not buying DIL. 10% is a huge rise though, what's a good opening price.. it moves upwards everytime I blink

[robbo24]

I think Hoop will be watching his favourite TA indicator right now :)

For those who don't follow Hoop, DMI looks like it might cross some time over the next few days.

Hoop said it is his favourite.

MACD and stochastic look like they are reacting nicely too...

[robbo24]

Down to 3150... Lol irl.

Get them stops!

[robbo24]

Looking good for a rally later in the day. Down and up, nice big valley!

For those who consider moosie a contrarian indicator it is time to sell before it tanks...

[Lorne Ranger]

10% is a bit rich to pay on open but I can't see anything but positives here for a big rebound.

Disc - glad I held cash and didn't buy DIL. Looking for an opening to get in ;)

Did you see the opening? Came and went about 30 minutes ago.

[tzbang]

"H&R Block prepares one in every seven US tax returns" - That alliance HAS to be a big step up the ladder for Xero in the US.

[robbo24]

Another test of 3100.. Are we seeing a reversal pattern?? Where will she close?? Two attempt theory??

See you at $60 per share??

[Lorne Ranger]

OK. So.... have to be honest, pretty perplexing afternoon. Given recent good news I was expecting a bit more of a kick, especially after the promising start. Certainly did not see the lower close coming. Any theories?

[mp52]

... I was expecting a bit more of a kick, especially after the promising start.

Institutions already priced in a US sales partner of scale? Not unreasonable given Xero's strategy elsewhere and their recent stateside hires. Wonder how much significance the lower Q3 loss really has in the big picture given some serious money will need to be spent the coming months to get customer attention in the US.

[vorno]

Here's a link to the Xero Blog take on the H&R Block strategic alliance.

http://www.xero.com/blog/2014/04/xero-forms-strategic-alliance-well-known-u-s-tax-company-hr-block/

Milford have also made comment on the deal.

http://www.radionz.co.nz/news/business/242999/us-deal-may-carry-xero-to-profit

I'm quite surprised that announcement hasn't had that big of an impact (previous announcements have had much sharper results!)

[zijiji]

At the end of March 2014, XERO had 284,000 customers - growing at about 542 new customers a day since the end of January 2014. Assuming that rate of new customers hasn't changed, I estimate that XERO now has around 303,000 customers... So the magic 300,000 milestone has been reached..

I suspect though, the numbers are higher if the recent strategic alliances with KMPG and H&R Block are already helping to gain more traction in UK and US.

Anyone have any thoughts of how quickly and at what rate these alliances will help increase customer numbers?




- XERO gained 127,000 new customers in the 12 months to 31 March 2014. This works out to an average of 348 per day.

- Since the "we've reached over 252,000 customers" announcement at the end of January 2014, this works out to be 32,000 new customers or 542 per day (assuming it was last day of Jan they reached this figure). So growth per month appears to be accelerating and I estimate think they will reach 500,000 customers by end of April next year.

[In4a$]

The question is, when will the make a profit from these customers, currently the more customers the bigger the loss ! 81% increase in subscriptions, loss more than doubled.
Disc: No longer holding.
From April :
With monthly committed subscriptions growing to $7.8m, the recurring revenue model means that Xero commences its 2015 financial year strongly with $93m in annualised subscriptions (representing an 81% increase on the $51.5m reported at the same time last year).
The net loss after tax for the second half of the year ending 31 March 2014 is anticipated to be similar to that reported for the first half resulting in a full year loss of approximately $35m, compared to $14.4m last year. Xero has expanded its team to 758 employees and has $210m of cash to fund its growth

[skid]

My guess is that it takes labor (sales staff-employees) to get new customers,but after that ,providing they stay,its pretty easy money in subscriptions.(There will always be running cost though)

[In4a$]

My guess is that it takes labor (sales staff-employees) to get new customers,but after that ,providing they stay,its pretty easy money in subscriptions.(There will always be running cost though)
You are right, but will they be in this phase for years to come, like, BLT, WDT, and the many others who have come and gone. Different products, but same problem. no profit. I made my share of $ from XRO, staying clear now.

[skid]

Fair enough.
Im not a holder (from a combination of fact that the environment for growth stocks is different now than from before-and being just plain cowardly of such a high SP)
I do however find it an interesting share to follow.

[couta1]

Fair enough.
Im not a holder (from a combination of fact that the environment for growth stocks is different now than from before-and being just plain cowardly of such a high SP)
I do however find it an interesting share to follow.
The wheels go round and round the up cycle will return in due course meanwhile Xro continues to do what it said it would aye,holding at $42 so cant be a coward:cool:

[Harvey Specter]

The question is, when will the make a profit from these customers, currently the more customers the bigger the loss ! 81% increase in subscriptions, loss more than doubled.
Disc: No longer holding.
From April :
With monthly committed subscriptions growing to $7.8m, the recurring revenue model means that Xero commences its 2015 financial year strongly with $93m in annualised subscriptions (representing an 81% increase on the $51.5m reported at the same time last year).
The net loss after tax for the second half of the year ending 31 March 2014 is anticipated to be similar to that reported for the first half resulting in a full year loss of approximately $35m, compared to $14.4m last year. Xero has expanded its team to 758 employees and has $210m of cash to fund its growthAssume the Gross margin on XRO is very high - DIL is over 80% from memory.

Lets also assume that once you sign a customer, they are retained for 5 years (XRO doesn't publish its retention ratio which I think all SaaS companies should)

Lets also assume that they will sign up $100m of recurring income from the US over the next 2 years due to that $35m cash burn.

Would you not pay $70m over two years to earn $500m over 5 years with a 80% gross margin. ($500m x 80% = $400m - $70m = $330 NPBT)

Tweek those numbers as you see fit. While those S&M costs may continue beyond 2 years, they will be securing the next $100m ruccuring income for another 5years onward.

[winner69]

Rod has some real problems to sort out, he not thinking XRO today

Was transferring his iTunes files to a external drive yesterday and it all went wrong grr grr h sai .......and now this tweet

@roddrury: Consolidation of iTunes (as per Apple instructions) has meant half of media locations (000's) can't be found. Any good iTunes repair tools

[In4a$]

Assume the Gross margin on XRO is very high - DIL is over 80% from memory.

Lets also assume that once you sign a customer, they are retained for 5 years (XRO doesn't publish its retention ratio which I think all SaaS companies should)

Lets also assume that they will sign up $100m of recurring income from the US over the next 2 years due to that $35m cash burn.

Would you not pay $70m over two years to earn $500m over 5 years with a 80% gross margin. ($500m x 80% = $400m - $70m = $330 NPBT)

Tweek those numbers as you see fit. While those S&M costs may continue beyond 2 years, they will be securing the next $100m ruccuring income for another 5years onward.

Your onto it Harvey, it's just a bit risky for me at the moment, SUM, RYM etc safer short term and long term investments for me. I will be back into XRO eventually, sooner than later if those loss's start reducing

[winner69]

Not a bad sort of day for XRO

Jeez somebody had to say something about XRO today

[robbo24]

Zddviyctwqglnovdd!!!???

Nasdaq down over a percent... :)

[bull....]

Nasdaq down over a percent... :)

ugly xero could be headed to recent lows again

[couta1]

ugly xero could be headed to recent lows again
This repetitious daily commenting on the Nasdaq being up and down is getting quite boring both on this thread and other tech/biotech threads until the tide turns and the cycle reverses there will be no returns to previous highs and the tide will turn but maybe not for a year once the yanks get sick of the boring old so called safe stocks which of course they will its just in their nature

[bull....]

at your peril the person who does not take notice of relevant news or markets

[couta1]

at your peril the person who does not take notice of relevant news or markets
Irrelevant if your long and the fundamentals haven't changed and the company is still growing, cycles come and go and always will.

[Goldstein]

Picked a few up at $30. The SP is down a lot more than the Nasdaq went down overnight. First time I've touched these in a while.

[winner69]

Not saying it is not a good buy mate, but comparing the XRO fall to the braoder NASDAQ is a mistake. It's the high growth stocks that are relevant and they are down a packet overnight.

Twitter down 18%
Netflix down 5%
Pandora down 9%
LinkedIn down 6%
Amazon down 4%

and XRO's "peer" companies, CRM, WDAY and N all down over 3%

Just saying, be careful not to confuse what is going on with the NASDAQ and what is going on with "high growth stocks".

Jeez twitter down 18% in one day .... that's heaps

[Goldstein]

Not saying it is not a good buy mate, but comparing the XRO fall to the braoder NASDAQ is a mistake. It's the high growth stocks that are relevant and they are down a packet overnight.

Twitter down 18%
Netflix down 5%
Pandora down 9%
LinkedIn down 6%
Amazon down 4%

and XRO's "peer" companies, CRM, WDAY and N all down over 3%

Just saying, be careful not to confuse what is going on with the NASDAQ and what is going on with "high growth stocks".

Point taken Turmeric. I'm only buying small amounts at the moment. I'm great at exiting stocks but rubbish at entering them.

[blackcap]

Jeez twitter down 18% in one day .... that's heaps

Probably because Judith Collins is no longer participating?

[Goldstein]

Hey, you may have got it bang on, I hope so :)

Who knows. I'm prepared to average around for the next 3 months and then set a stop-loss.

[Goldstein]

I think Snap is referring to Twitter Turmeric

[Banksie]

You are kidding me right? What a load of rubbish! There has been less than a million traded today which is very much on the low side for XRO these days. So nothing to suggest a surge of sell downs by insiders, or am I missing something Snap? On top of that, as has been pointed out, XRO is down today most likely based on general tech sentiment and is actually fairing pretty well relative to its peers. So again, nothing to suggest any significant insider selling.

Calm the farm :) - snapiti was talking about twitter http://www.ft.com/cms/s/0/8e670f40-d532-11e3-9bca-00144feabdc0.html

[winner69]

Probably because Judith Collins is no longer participating?

Good one .... lack of ministerial support could have a lot to do it

[Santiago]

haha, my bad. Apologies :)

Though, your comment Turmeric did make me wonder what'll happen in October when Theil and co, who participated in the capital raising that set this XRO run off, can sell (I recall they had a 12 month no sale period). Considering they bought in for 18ish, if we're at where it is today, that's a pretty handy profit to book in a year. My feeling is that they are longer term than that, having seen some big potential for the company, but you never know what could happen if the market is still as spooked as it is now...

[Harvey Specter]

alot of insider share's where locked up and today was the first day they could be traded since the IPO.
Not a great vote of confidence in the companyI think Twitter is still up on the IPO price and definitely up on the price the early employees/investors paid so cashing in to diversify is expected. The large shareholders (ie. founders) have said they are not selling so that is a good vote of confidence.

[sommelier]

If the NASDAQ has a double doji then I'll be looking for a mid term uptrend in XRO. It's a great reversal pattern but there are more powerful forces at play.

[Goldstein]

I'm not a chartist, but I'm interested in them and would like to learn more.

ANyway, here's the OHLC plot of XRO for the last month.

5805

According to Wikipedia a doji is when the opening and closing price are similar and mark a possible change in trend direction (there is indecision in the market). So a double doji is two in successive days? Is that what you mean Moosie? Most images i saw when Googling had a kind of zig-zag pattern over a few days - so I'm struggling to get a good definition.

I've been quite happy with the $30 support over the last two days.

[winner69]

Anyone chartists know what a double doji means? Never seen one before, has me stumped!

Sitting directly on 10 day MA and if tomorrow is an up day then I can see an uptrend line forming...

As long as it is not as bad as a hanging baby we should be OK

Haven't found that hanging baby yet .... the one you bought up on the DIL thread ..... been searching everywhere since and no hanging baby ... hope she OK still

[skid]

http://money.cnn.com/2014/05/08/investing/stocks-markets/index.html

[couta1]

Sell Bot in control.

[Xerof]

Anyone chartists know what a double doji means?

a chart with a stutter?

yesterdays candle was a spinning top, signifying indecision. The day before was a 'sort of' doji. Prefer the close to be much nearer the top than the middle, but a minor victory for the buyers that day, soured by the slightly lower closes though

[Goldstein]

Quite interesting over the last 3 days. A well tested $30 support with quite a headwind from the US.

The stronger the support seems at $30 the more attractive the stock looks to me.

Perhaps we'll see a triple doji at the end of the day?

[winner69]

Quite interesting over the last 3 days. A well tested $30 support with quite a headwind from the US.

The stronger the support seems at $30 the more attractive the stock looks to me.

Perhaps we'll see a triple doji at the end of the day?

$30 must be one of those magic numbers that sometimes attaches itself to stock

[Goldstein]

$30 must be one of those magic numbers that sometimes attaches itself to stock

I don't think SP's like prime numbers. XRO happens to be stuck between a prime pair (29, 31).

I think I'll blindly follow Snap's advice and get a curry.

[winner69]

Another (nearly!) doji! Can't win these days :p

Aren't triple 'nearly' dojis good news when a stock has been trending down

When you saw this happening you should have bought at the close ......and make heaps on Monday when it opens up a lot higher than today's close

I don't trade candles so don't take my advice

[Goldstein]

I've been thinking similarly. I picked some up at $30 thinking I might need to average down to $28, but it looks like I might be averaging up now. I was tempted today to pick some more up, but then thought I'd wait to see how the US performs overnight.

I suspected you were going to do what you did with SUM there Moosie and flick your lot off at $31.

I'd be keen for your chart.

[couta1]

Gotta love that Moose with all that dirty talk of $40 again, Disc- Not faint of heart

[zijiji]

I'd be keen to see the chart too!

[couta1]

Ok shall post up later. $40 is still awhile off unless something mafical happens unfortunately couta! Have to remember Goldman Sachs has a $32.50 (neutral/sell?) target on it as well.
Well aware of that Moosie but I'm patient so keep talking dirty:cool:

[Ninefingers]

Definitely a fun stock to follow. Got burned buying in at $39 (holding)....tempting to get some more though ;)

[Toasty]

The customer numbers are the thing that drives my interest. They may be small bikkies compared to intuit but the market is so big and that's just the US. A small percentage of the worlds SME's and they will be generating huge revenue. Very keen to see the effect the H&R block alliance will have on the next update.

[Santiago]

I've been averaging in again, topping up. Good to see the price action, but I feel the nosebleeds of mid-40s may be a ways off...

[robbo24]

$33 is next resistance, with $35 up after. I suspect a 6-8% day is in the offing with follow on buying throughout the week. We shall see.

Sell sell sell!! For the love of God, SELL NOW!!!

[couta1]

Sell sell sell!! For the love of God, SELL NOW!!!

No probs mate ive got a parcel i can sell you for $45 otherwise no go:cool:

[Santiago]

Yep, she's definitely got no legs at the moment

[winner69]

Yep, she's definitely got no legs at the moment


Moosie
Seems like everyone wants outnow! Not good having a nice fat gravestone doji if it falls further...

Good god ....she must have died after having her legs chopped off

As long as no abandoned babies in the graveyard we should be OK

[Copper]

Haha nope! It appears a large insto was keen to acquire as they upped their large parcel bid from $31.00 to $31.40 at end of day. Interesting to hear the logic behind that as sellers were keen to meet them lower. Ah well, each to their own, I've had enough risk for awhile and am happy with my profits :)
I personally think that you are assuming things here.A keen buyer ,probably an overseas insto may have been in the background waiting for the mass of weak sellers at the end of the day to clean them all up.He may well still be in there and a firming market may eventuate.Good on you for making a modest profit but I think this stock has a mind of its own.

[Toasty]

Wow. $33.60. Have I missed some news?

[Bilbo]

Wow. $33.60. Have I missed some news?

Wow, 100,000 at $34.00 just went through off market. What is up?

[Copper]

Looks like someone trying to massage the sp to get some stops triggered to offload that parcel...
Again no chartist but at 34 it's thru your ten and thirty day aves isn't it......??

[robbo24]

Budget day flurry?

Knowing that the NZ micro environment isn't looking to go to shiz like the Australian budget does?

Surely it makes the NZX investment that little bit safer...

[Santiago]

Someone knows something about something. Would love to know what it is. Hold onto your hats- anything can happen...

[Copper]

Jeezus H Christ, 1M+ shares gone through today already!
I hear they went into the Morgan Stanley index today.That would figure ???

[robbo24]

unforetunately it make's our $ look safer so more pressure up

Yes but equally NZ micro environment is stable, Russian nationalists aren't taking over and the government isn't insolvent.

If dollar is gonna go up then clearly a good time to buy NZX stock ;)

[sommelier]

What do you think the MSCI uptake means for trading tomorrow? Will index trackers continue to buy, and can we predict how long they will be buying for?

[Copper]

What do you think the MSCI uptake means for trading tomorrow? Will index trackers continue to buy, and can we predict how long they will be buying for?

I am no authority but I think some buying would go on for weeks.All the funds that are affected are not going to buy on day one.They are a bunch of bureaucrats and will need to go thru the process.They then may even buy in Aussy cos they haven't got a broker here.Not that bad but nothing is instant in that part of the world.IMHO....

[Bilbo]

I am no authority but I think some buying would go on for weeks.All the funds that are affected are not going to buy on day one.They are a bunch of bureaucrats and will need to go thru the process.They then may even buy in Aussy cos they haven't got a broker here.Not that bad but nothing is instant in that part of the world.IMHO....

From what I can ascertain from msci.com, changes to the MCSI indexes were announced in the last 24 hours. There may be other changes, but from what I can tell, it appears XRO was added to the MSCI global Standard Index and removed from the MCSI Global Small Cap Index.
See http://www.msci.com/eqb/gimi/stdindex/MSCI_May14_STPublicList.pdf and http://www.msci.com/eqb/gimi/smallcap/MSCI_May14_SCPublicList.pdf for full details and please DYOR.

The header on those documents states the index changes will take place at the close of May 30.

Hope that helps. Could be an interesting couple of weeks in terms of volume and price volatility. The last index inclusion I was aware of in April coincided with a solid rise in the SP, however once the buying support dried up the it coincided with the NASDAQ spitting the dummy and XRO fell dramatically. From a long term holder perspective any SP rise as a result of index changes makes me uneasy. I'd far rather see the SP rise on the back of growth and execution.

Not prepared to speculate on what might happen to the SP over the next 2 weeks or beyond.

[robbo24]

Yup, I'd be very cautious against buying here on index changeups, has absolutely nothing to do with the company's business or the macro environment (still weak on the Nasdaq). Popping in the morning then trading lower all day is not what you want to see either (this has been the trend for awhile now. Backwardation???). Concordantly, didn't buy back in today!

You all have short memories... circa 2 years ago when XRO was added to msci small cap index, the SP went into BEAST MODE.

Thus, be prepared for more.

[winner69]

You all have short memories... circa 2 years ago when XRO was added to msci small cap index, the SP went into BEAST MODE.

Thus, be prepared for more.

But those funds need to sell now don't they?

[robbo24]

But those funds need to sell now don't they?

I know you are just playing silly winner69.

The more credible index makes XRO a more credible investment.

Which means it is a safer bet for institutions under a duty to invest in a prudent manner.

Which means more exposure to the stock from the "big boys."

Which means BEAST MODE.

[winner69]

I know you are just playing silly winner69.

The more credible index makes XRO a more credible investment.

Which means it is a safer bet for institutions under a duty to invest in a prudent manner.

Which means more exposure to the stock from the "big boys."

Which means BEAST MODE.

Not disputing anything .... some funds will need to sell and some will need to buy ..... depending on XRO weighting in each

Yes the new index should make XRO a 'more credible' investment over time but that is different from the buying and selling until funds get their weighting right over the next few days.

OK lets be silly together then and chant BEAST MODE - I am all for that

[Copper]

Robbo, a more relevant question is, what valuation and multiples are these big boys willing to pay post the Nasdaq selldown? I can guarantee you it is not as much as before thr mini meltdown. Only recently Goldman Sachs said sell with a $32.50 valuation. Unless the macro environment changes, these boys aren't going to pay up like they used to...
Good balanced call but as I have said before you can't assume anything.It has a life of it's own and we are but 4 mill in a 4 bill world.....

[robbo24]

Not disputing anything .... some funds will need to sell and some will need to buy ..... depending on XRO weighting in each

Yes the new index should make XRO a 'more credible' investment over time but that is different from the buying and selling until funds get their weighting right over the next few days.

OK lets be silly together then and chant BEAST MODE - I am all for that

Any old roadside lemonade stand can get on the small cap index.

[robbo24]

Robbo, a more relevant question is, what valuation and multiples are these big boys willing to pay post the Nasdaq selldown? I can guarantee you it is not as much as before thr mini meltdown. Only recently Goldman Sachs said sell with a $32.50 valuation. Unless the macro environment changes, these boys aren't going to pay up like they used to...

I'm beating GS on the Sharetrader Forum stock picking contest 2014.

Their opinion has little value to me.

[bull....]

hit top of range 34 yest, time to test down again?

[Shore]

Zendesk had a positive IPO overnight - I think closing up over 40%. It seems though there revenues are under US$100m and that they launched on the NYSE. It seems Xero is steering towards the NASDAQ - does anybody know what the pros & cons are over listing on one exchange versus the other?

[Harvey Specter]

Zendesk had a positive IPO overnight - I think closing up over 40%. It seems though there revenues are under US$100m and that they launched on the NYSE. It seems Xero is steering towards the NASDAQ - does anybody know what the pros & cons are over listing on one exchange versus the other?More details here:
http://techcrunch.com/2014/05/15/zendesk-sees-a-modest-24-pop-on-its-first-day-of-trading-after-raising-100m-in-ipo/
MV now just under $1B with revenues of $72m, up 88%. I dont know much about their market but those revenue and growth figures look similar to XRO's suggesting XRO is 3x overvalued?

Disc: hold XRO

[Shore]

I don't think Zendesk has anywhere near the lock-in value that Xero has, nor the scope to branch out and enhance their offering. For those reasons alone I can see why it doesn't command the same premium.

[Bilbo]

More details here:
http://techcrunch.com/2014/05/15/zendesk-sees-a-modest-24-pop-on-its-first-day-of-trading-after-raising-100m-in-ipo/
MV now just under $1B with revenues of $72m, up 88%. I dont know much about their market but those revenue and growth figures look similar to XRO's suggesting XRO is 3x overvalued?

Disc: hold XRO

I'd prefer to believe that Zendesk is undervalued by 3x :) But with a $10.3m loss for Q1 it looks like they are bleeding $ faster than XRO. I'm a huge fan of Zendesk though and will keep a close eye on their SP looking for a good entry point.

[Santiago]

I reckon, and I'm probably cursing it, that XRO is decoupling it's daily performance from the Nasdaq slowly. Quality will shine through in these coming months in tech stocks, something XRO has in spades.

[Lorne Ranger]

Nasdaq looking very sickly in pre-open and FTSE down quite a bit in London now. There is a lot of fear in this market and it is beginning to make me not even consider tech stocks as an investment right now. If 4,000 is punched through on the Nasdaq then the pain could really start to be piled on. Just a level to keep in mind these days if looking at Xero and its tie-in with global markets...

I cant see the "very sickly" NASDAQ pre-market? Yes FTSE is currently down 0.7%, but its had a reasonable run of late and if you look at the patterns it due for a little sell off anyway, and Astrazenica seems to have been responsible for most of todays decline. Doesnt altogether standout as a pending disaster to me...? Odd comment? Oh wait! MOOSIE! ha, it's you! Phew, you had me wondering there for a moment. Just normal undermining thinly disguised as objective analysis. sigh. No doubt there's some fear on the market, but this kind of baloney doomsaying serves no broader purpose. By all means make your own mind up about what you invest in and when, but tighten up on the focus a little and we'll all get along fine.

[winner69]

Nasdaq looking very sickly at the moment but up nearly 1% as I write.

That not far off being closer to 4500 than the catastrophe of 4000 (SNK maths)

Seems the usually irrationally exuberant moose has had a change of heart. Has he been talking to Bobcat? Or is reading too much Naomi Klein? Even worse found some Kuntsler articles?

We be OK moosie .....Nasdaq et al be ok ....Janet will see to that

[winner69]

Looks like we've switched job titles winner ;)

I have always been bullish .... NZX 6000 by Xnas ..... next step S&P 2000 etc

But I am a miserable cynical coot so need to manage risk as well .... there may will be an impending collapse .... but there will signs when it has coming .... might give back 5-10% of prior gains but not all of them

And yes moosie the overvalued ones will suffer more and maybe that is one of the signals ..... be a brave man to say that MBE collapsing below 20 or the Nasdaq puching below 4000 is confirmation that the market collapse has started

I have faith in Janet (until the next US election that is)

[robbo24]

Lol... XRO are changing their reporting methods... SELL SELL SELL

[winner69]

Lol... XRO are changing their reporting methods... SELL SELL SELL

Change of balance date next?

[robbo24]

Change of balance date next?

What are you inferring?

PS - I like the new format, the biggest expense is marketing and advertising.

[Stranger_Danger]

What are you inferring?

PS - I like the new format, the biggest expense is marketing and advertising.

Frank Gaudette, Microsoft's first CFO, was once asked when you'd know that Microsoft was a "sell".

His answer was

"Watch for any changes in our accounting," said Gaudette. "If I need to I can start, depreciating the software and maintain earnings growth for years on flat revenue. Watch for the accounting changes, wait for the next uptick in the stock price, and then sell."

Some investors are just naturally cynical about this stuff - fairly, or unfairly.

[Harvey Specter]

Frank Gaudette, Microsoft's first CFO, was once asked when you'd know that Microsoft was a "sell".

His answer was

"Watch for any changes in our accounting," said Gaudette. "If I need to I can start, depreciating the software and maintain earnings growth for years on flat revenue. Watch for the accounting changes, wait for the next uptick in the stock price, and then sell."

Some investors are just naturally cynical about this stuff - fairly, or unfairly.Note that they aren't changing their accounting policies (like they did a few years back), just how they disclose their results. I haven't looked yet but I assume it makes it clearer which costs are service costs and which are growth costs.

[robbo24]

It makes it more similar to other SAAS companies.

SAAS companies on the Nasdaq??

[Bilbo]

It makes it more similar to other SAAS companies.

SAAS companies on the Nasdaq??

Yes you would have to assume this is just housekeeping in preparation for a potential Nasdaq listing. Nothing sinister or untoward IMHO.

[tzbang]

some very :scared: jumpy posters on here!

[Copper]

some very :scared: jumpy posters on here!

It seems to be the season of posters losing on MBE,PEB,DIL and SNK going up.Everything to ruffle the feathers.Nothing to ride the wave on..... IMHO.l

[Shore]

http://www.forbes.com/growth-companies/list/

[Lorne Ranger]

http://www.forbes.com/growth-companies/list/


Hm. Can't hurt.

[Stranger_Danger]

Hm. Can't hurt.

Forbes put the NZX-listed company's "innovation premium" at 91.7 per cent.

"The Innovation Premium is a measure of how much investors have bid up the stock price of a company above the value of its existing business based on expectations of future innovative results," Forbes said.


Hmmmm. A cynic would suggest there is a whole other way to think about that!

[Harvey Specter]

Forbes put the NZX-listed company's "innovation premium" at 91.7 per cent.

"The Innovation Premium is a measure of how much investors have bid up the stock price of a company above the value of its existing business based on expectations of future innovative results," Forbes said.

Hmmmm. A cynic would suggest there is a whole other way to think about that!Thinking about it that way, you could also call it the "bubble factor"

[Joshuatree]

Xero Annual Report FY2014 (https://www.nzx.com/companies/XRO/announcements/250756) Annual report out

[Lorne Ranger]

Annual report, huzzah!

Seems to show steady as she goes in terms of growth, mostly as expected (and continues to look promising for future growth though I know thats a toxic terms for some right now!)

Revenue showing good growth, though outstripped somewhat by the increased operating loss.

All eyes on the US market, which has tripled though still relatively small in these early days. Australia, and UK look good, and even NZ seems to have caught a second wind after what I thought was near saturation.

Just seems like more, all be it expected, good news and on target as projected.

Be interesting to see if the media pick up on the increased growth, or the increased loss figures. They have a make a story either way.

[winner69]

Thinking about it that way, you could also call it the "bubble factor"

A bit about the methodology
http://www.forbes.com/sites/innovatorsdna/2014/05/21/how-we-rank-the-worlds-most-innovative-growth-companies-2014/

One sentence describing the index is The difference between them is the bonus given by equity investors on the educated hunch that the company will continue to come up with profitable new growth.

So in that context is it saying that XRO today is really only worth $2.50 and the other $30 is because of a hunch

[winner69]

Recently passed 300,000 customers, nice. Keep stacking 'em up and takin' 'em down ;)

Is growth slowing though?

[Lorne Ranger]

Is growth slowing though?

Not sure its the right time to look at the growth figures as a whole, while the targeting is in transition from local to global.

Doubling Australia means its done, its taken hold and wont look back.

Doubling in UK is very good, and tripling in US also, though these figures are still embryonic. If it was the other way around and Aus and NZ were the emerging markets then you could project slowing, but UK and US? Now the focus is firmly on them, with the extra staff and costs, the next 12 months will have to show some great growth in those markets, but the potential seems vast and I'm not sure what else anyone could have hoped for in the AR?

[Lorne Ranger]

A bit about the methodology
http://www.forbes.com/sites/innovatorsdna/2014/05/21/how-we-rank-the-worlds-most-innovative-growth-companies-2014/

One sentence describing the index is The difference between them is the bonus given by equity investors on the educated hunch that the company will continue to come up with profitable new growth.

So in that context is it saying that XRO today is really only worth $2.50 and the other $30 is because of a hunch

Actually Winner I dont think it is 90% of the SP, rather its a 90% premium. SP of $17 with a 90% premium gives 32.30. If that is indeed what is meant? Not sure it is meant to be too scientific either way! ; )

[robbo24]

Turmeric: on a market-by-market basis, the rate of growth may increase in the very short term, but will thereafter slow. its the nature of market saturation

Growth of new customers or revenue or net profit?

[Lorne Ranger]

Turmeric: on a market-by-market basis, the rate of growth may increase in the very short term, but will thereafter slow. its the nature of market saturation

I think "very short term" is an overstatement, but yes you would expect a gradual decline in growth rate, of course. If I opened a shop and went from one customer in the first day to 20 on the second, I would be delighted to keep that growth rate up! But you can still see other markers to give an indication.

For Xero, 3x growth in US seems good, but the numbers are still small. If it falls to 2x within three years youre still looking at 250k customers and adding another 100k at least for the few years after that, just in the US alone. That would be fine I would assume, though the visionaries at Xero will know if that is the trajectory or not. NZ certainly has shown a reasonably long tail for Xero.

Media might take another view, and say in 12 months that a x2.5 growth rate in US shows "slowing growth" but its all relative.

[winner69]

Actually Winner I dont think it is 90% of the SP, rather its a 90% premium. SP of $17 with a 90% premium gives 32.30. If that is indeed what is meant? Not sure it is meant to be too scientific either way! ; )

Probably that is what it is meant to be

Didn't some analyst say a few months a shareprice of mid teens is really the realistic number

Do like that phrase that Moodys use - educated hunch

[winner69]

I agree with turmeric.

Apply different growth rates (based on actuals) for each geography (and allowing for growth decay or fade in each geography) you do get a couple more years of increasing growth rates

I put some numbers up to show this a few months ago.

[robbo24]

Headline Alert (http://www.stuff.co.nz/business/industries/financial-results/10073550/Xero-plunges-deeper-in-the-red):
Xero plunges deeper in the red

[winner69]

definitely not what the analyst said.

Of was it it could fall to the mid teens if things didn't turn out as planned .....only going from memory. I do remember it peeved Rod off at the time. Maybe you can recall the actual comment for me.

And I didn't have it in bold in my post either

[winner69]

Headline Alert (http://www.stuff.co.nz/business/industries/financial-results/10073550/Xero-plunges-deeper-in-the-red):
Xero plunges deeper in the red

All going to plan then

Below from XRO presentation .... Chairman says this is business model they working to

[stevo1]

Cheers mate, glad someone understands what I'm on about;) I recall putting numbers up in the past too.

You dont go broke making a profit

[winner69]

The graphic representing their business model doesn't have a time frame

An alternative view would be to imagine customer numbers instead of time .... and put 2 million on the right hand side

So with 300,000 now only 15% of the journey completed.

Increasing losses for a year or so and then heading to the big pay day

[Kjg]

Forbes has xero listed as number 1 for 'most innovative growth company'.

http://www.forbes.com/growth-companies/list/

[Schrodinger]

This is all about the US now. The next 6 - 12 months are extremely important as there will be huge pressure on Xero to bring in the numbers. Their customer numbers in the US are non existent (US terms) and there is still huge opportunities to grow at 3x to 5x due to the quality of the product.

If they crack the US this will be one of the largest Saas companies in the world however this all depends on their execution over the next 12 months.

The Australian results are very good and there is at least another 200k of subs in that market. The UK will be great for Xero and I expect at least 200k extra subs there.

Speed is essential as the product gap between its rivals is shrinking.

PS would like to see a few more connected Americans on the board to grease the wheels. PEB take note.

[Shore]

Does anyone know the dial-in numbers for the conference call today at 10am?

[Shore]

The UK will be great for Xero and I expect at least 200k extra subs there.

I think there's at least 500,000 subs in the UK (long term view).

[Harvey Specter]

Hah, just looked at the presentation today and really happy to see CAC and LTV being reported! Looks like Ross Jenkins was not kidding (the email referred to above was pretty much one year ago to the day!).

https://nzx.com/files/attachments/194281.pdfGreat to see the metrics now being discloses. Means they can more easily be valued as a SAAS company. Will be interesting to see what this does to the shareprice as those clevera that me do their sums.

Churn looks high (why use a monthly, not an annual figure?) but the CAC is low and should go lower as the sales channels in the US they have been working on ramp up.

[Schrodinger]

Churn looks high but isn't that partly due to the nature of their customers. How does <1% per month stack up against other companies who deal with SMEs I wonder?

I recall in the early days they used to report churn by saying it was less than the death rate of SMEs, which on the face of it seemed to suggest XROs churn was pretty good. Now it appears to be improving so maybe the number is actually pretty good? But yup, kinda weird its reported per month I guess it just makes it look lower, or maybe that is what SaaS companies typically report?
I am gonna have to get up to speed on all these metrics now- from a brief lok though CAC, and LTV:CAC look really good.

<1% for a Saas business is outstanding. Even 3-5% is very good.

[Harvey Specter]

<1% for a Saas business is outstanding. Even 3-5% is very good.DIL has about 1% annually though it targets big customers. As T points out, 1% monthly is probably below the SME failure rate.

[Everwood]

listening to call now - they updated on churn so will try and summarise in a bit.

I look forward to reading your summary.

[Valuegrowth]

Headline Alert (http://www.stuff.co.nz/business/industries/financial-results/10073550/Xero-plunges-deeper-in-the-red):
Xero plunges deeper in the red


Is this a short term scenario? Will they make profits after making losses in few quarters. Do you think that their long term growth is intact?

[robbo24]

Is this a short term scenario? Will they make profits after making losses in few quarters. Do you think that their long term growth is intact?

I just think the headline is stupid.

The NASDAQ Composite chart looks interesting, especially now that the DMI has crossed. Higher lows and a strong close.

DMI crossings alone show some fun may arise next week for XRO...

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Index&symb=comp&time=8&startdate=1%2F4%2F1999&enddate=5%2F24%2F2014&freq=1&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=32&lf2=1024&lf3=4&type=4&style=320&size=4&x=44&y=25&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11

[Santiago]

Thanks Turmeric, great summary. The US comments particularly interesting.

[Toasty]

Thanks Turmeric. I sat in on the call briefly..before work called.. I sat in right when the churn discussion was happening and you have captured it as I understood it. Sounded very positive.

[Santiago]

I also am very encouraged by the UK and Oz comments. If they really do own those markets, there is plenty of high value growth left in both, indeed they've only just got started. The revenues from those markets, along with NZ, could sustain them on their initial five-year journey in the US.

[Everwood]

Thank you for the summary Turmeric.

[kiora]

Can you enlighten me on valuation methodologies for valuing a SAAS company HS

Great to see the metrics now being discloses. Means they can more easily be valued as a SAAS company. Will be interesting to see what this does to the shareprice as those clevera that me do their sums.

Churn looks high (why use a monthly, not an annual figure?) but the CAC is low and should go lower as the sales channels in the US they have been working on ramp up.

[Casino]

Great to see the metrics now being discloses. Means they can more easily be valued as a SAAS company. Will be interesting to see what this does to the shareprice as those clevera that me do their sums.

Churn looks high (why use a monthly, not an annual figure?) but the CAC is low and should go lower as the sales channels in the US they have been working on ramp up.

For fast growing companies, it is more honest to report churn on a monthly basis. There have been great improvements in terms of transparency over the last few months.

[Harvey Specter]

There have been great improvements in terms of transparency over the last few months.Completely agree.

The reason I raised is the only other company that I know that reports Churn on the NZX is DIL which they flip around to be annual retention.

[mikeybycrikey]

The reason I raised is the only other company that I know that reports Churn on the NZX is DIL which they flip around to be annual retention.

It looks like Diligent charges "annual non-cancelable subscriptions" vs monthly for Xero so I think it would make more sense for DIL to talk about annual churn. To look at it more cynically though, 1.4% monthly churn looks a lot better than 16% annual.

[Harvey Specter]

It looks like Diligent charges "annual non-cancelable subscriptions" vs monthly for Xero so I think it would make more sense for DIL to talk about annual churn. To look at it more cynically though, 1.4% monthly churn looks a lot better than 16% annual.My original comment was based on your cynical view. The real question is what do the US SaaS companies quote as ideally you would follow the market standard. It could be that DIL is unusual in providing an annual figure.

[winner69]

Im not sure I follow your logic here KW. So Xero report monthly because they know people can't work out the annual? Why don't they just quote the annual then? Your logic would make sense to me if the monthly x 12 (which presumably you are saying the average joe does to get annual churn) was less than what the correct formula gives (the one that you quote which gives the actual annual churn), but its not, its more. What does Xero have to gain from quoting monthly instead of annual in that respect?

Maybe Im missing something?

Monthly billing probably best to measure monthly churn. I doubt whether they even bother to annualised it, particularly if base revenues are going strongly anyway.

How's this for a sum. Revenue growth at 5% a month is 79.6% annual. Apply a churn rate of 1.4% a month and annual growth drops to 68.6%

Maybe just as easy to say there ACMR as at March of $93m is going to reduce by $14.5m over the next 12 months ......to be replaced and heaps more by new customers

[winner69]

Some benchmarking SaaS companies

Quick registration needed but free

http://www.saas-capital.com//index.php?cID=220

[winner69]

So does 1.4% a month churn mean that about 47,000 of the existing 300,000 customers won't be using the beautiful accounting software in a years time?

Or is that too simplistic an assumption

[winner69]

Assuming your maths is right then yes. But of course they'll have added more news one ... ;)

Of course belg .....at least another 300,000 hopefully

[Harvey Specter]

So does 1.4% a month churn mean that about 47,000 of the existing 300,000 customers won't be using the beautiful accounting software in a years time?


Of course belg .....at least another 300,000 hopefullyOn that basis, churn would be higher than 47k as that number (I assume) wasn't applied to the additional new customers acquired over the year. Remember that the growth in numbers that they disclose are net of churn so growth in new customers is actually higher.

[Casino]

On that basis, churn would be higher than 47k as that number (I assume) wasn't applied to the additional new customers acquired over the year. Remember that the growth in numbers that they disclose are net of churn so growth in new customers is actually higher.

I think Winner was referring to existing customers and it shows why monthly numbers are better. Imagine they had 600k subscribers in 12 months with 300k of them acquired in the last month. Your churn would be 50k and around 8% on an annual basis.

[Snow Leopard]

You can have hours of fun learning to understand this churn stuff using this handy happlication from the people who brought you something else as well:

5866

Best Wishes
Paper Tiger

[winner69]

PT, just wondering what you think that 18.43% figure represents? Id suggest you have made a mistake there if what you are trying to calculate as churn over the 12 month period. The correct calculation should be:
46,695/300,000 = 15.56%

Why spreadsheets were invented

So one can quickly fix any errors

[winner69]

Bet you every company has there own methodology

[winner69]

So XRO want a churn rate in line with SME extinction rates or whatever the term was

For what its worth here is a chart I saw the other day for the USA
http://www.mauldineconomics.com/frontlinethoughts

[Everwood]

Very nice article about Rob Drury / Xero in Forbes http://www.forbes.com/sites/halgregersen/2014/05/28/how-rod-drury-built-xero-from-a-small-set-of-rocks-in-the-south-pacific-into-a-global-player/

[winner69]

I've often wondered what the 700 people at Zero do and what the extra 500 planned are going to day

Cant all be developers. Maybe they all sales people. Surely they don't need for support people for every 1000 new customers they take on so obviulsly not one big call centre getting bigger;

Came across this the other day and it all gelled

[Snow Leopard]

PT, just wondering what you think that 18.43% figure represents? Id suggest you have made a mistake there if what you are trying to calculate as churn over the 12 month period. The correct calculation should be:
46,695/300,000 = 15.56%


Also I am a bit confused by the numbers PT has run in the second half (the right hand side) of his spreadsheet. The way PT has it (assuming you adjust for his mistake), annual churn will be greater, the more new customers are added, despite monthly churn being constant at 1.4%....

My understanding is that there are various ways to calculate churn should new customers be being added on a monthly basis. The easiest is to disregard the new customers, the next way is to calculate churn using cohorts Ie separating out existing customers from new customers and calculating monthly churn for each cohort then aggregating using a weighted average. I found this site pretty useful for understanding that method. http://www.evergage.com/blog/how-calculate-customer-churn-and-revenue-churn

They suggest there is a much more complicated method but their link doesnt work anymore.


You can have hours of fun learning to understand this churn stuff using this handy happlication

Might me useful to say at this point that XRO's churn rate is a revenue churn rate and not a customer churn rate.

Anyway the aim was to point out that you can learn what it all means and at least one person has - so some sort of success there.

The two bottom percentages were not supposed to be churn rates - but I can see how it leads to that impression.

Sorry:blush:

Best Wishes
Paper Tiger

[tomblu]

Who wants to apply for Chief Evangalist

[vorno]

It may be approaching your "buy" mark again Moose!

[Shore]

Looks pretty tightly bound to the Goldman Sachs rec doesn't it?

[Lorne Ranger]

Wow that was a decent chunk of shares at closing! Who was that?

DISC: It wasn't me.

[vorno]

If that was you Lorne I think I would be sucking up to you for some spending money!

[Lorne Ranger]

If that was you Lorne I think I would be sucking up to you for some spending money!

Believe me, if that WAS me, I wouldn't be here replying that it wasn't me....

A few other stocks seem to have attracted a huge buy-up in the last minutes of trading (ATM, MFT etc) anyone know what the occasion is?

[Lorne Ranger]

Is it the end of a financial period creating the spend up?

[Santiago]

4 June 2014. NZPA.

Meanwhile, in non-PEB related news, XRO continues its drift lower, and perhaps more surprisingly its thread is relegated to halfway down page 2 on Sharetrader.

All this despite cranking high trade volumes and fantastic publicity around innovation and its charismatic CEO.

Some investors are wondering if perhaps we're staring down the barrel of 12 months (perhaps overdue?) consolidation as the company tackles the US.

Others think that Uk and Aust numbers will continue to surprise. The only question is whether the company will keep the market updated of every minor milestone now it has shifted into a higher profile global environment.

Now, back to PEB, where investors are hatching a plan to piss on the CEO Darling at the next AGM as a metaphorical protest at the company's failure to sell tests in any geography whatsoever.

[Harvey Specter]

fantastic publicity around innovation and its charismatic CEO. He's in Monaco at the moment. I assume for the EY International Entrepreneur of the year completion.

[whatsup]

Sub $30 again but I don't think that it will bounce this time for a while and only on very good news. My opinion only

[tzbang]

What's the reasons for the fall this time? Xero news has only been positive and they appear to be doing everything right.

[couta1]

Panic time!!!
Such fickle creatures those panickers aye:cool:

[couta1]

What's the reasons for the fall this time? Xero news has only been positive and they appear to be doing everything right.
See my comment re this over on the Wyn thread tzbang.

[tzbang]

That.. basically it's too wintery to buy cold tech shares? LOL Surely there is more to it than that.

[couta1]

That.. basically it's too wintery to buy cold tech shares? LOL Surely there is more to it than that.
Well I can't find any other reason none of the stories have changed and the American market isn't freefalling:cool:

[tzbang]

Well in that case.. it's time to buy

[Billy Boy]

Maybe the Fundamentalists are catching up on the Dreamers.
BB;)

[Bilbo]

Well I can't find any other reason none of the stories have changed and the American market isn't freefalling:cool:

Maybe the support provided by large index funds buying on the back of the XRO inclusion in the MSCI global index has now dried up post the index update?

[moimoi]

And maybe those large index funds have lent out a portion of what they recently bought to enable others to short the stock...

[robbo24]

That old Nasdaq Composite sure is getting back up there..

[kiwi_on_OE]

Rod just on CNBC in Europe from Monte Carlo (8:44 London time) - usual story global, doubling staff etc. I wonder if it will add interest in the stock from Europe?

[winner69]

Shame Rod misses on EOY Award to Uday Kotak, founder of Kotak Mahindra Bank.

Never mind Rod you gave it your best shot and to most you are the best

(PS hope the jaunt to Monaco with the support team didn't cost shareholder too much)

[artemis]

Shame Rod misses on EOY Award to Uday Kotak, founder of Kotak Mahindra Bank. Never mind Rod you gave it your best shot and to most you are the best (PS hope the jaunt to Monaco with the support team didn't cost shareholder too much)

Chance to rub shoulders with the best up-and-comers in the world - priceless! I'd bet he took many opportunities to talk to them. He's a likable and charismatic Kiwi bloke, I would not be surprised if he has impressed plenty. (Look what happened when the leader of the free world took a shine to our Mr Key.)

[Stranger_Danger]

Chance to rub shoulders with the best up-and-comers in the world - priceless! I'd bet he took many opportunities to talk to them. He's a likable and charismatic Kiwi bloke, I would not be surprised if he has impressed plenty. (Look what happened when the leader of the free world took a shine to our Mr Key.)

In all seriousness though, I wonder what the cost was? 50K? More?

This stuff does add up, justified or not.

Remember, the IPO prospectus predicted that break even would be at 15,000 clients.

[Harvey Specter]

Chance to rub shoulders with the best up-and-comers in the world - priceless! I'd bet he took many opportunities to talk to them. expansion in India, with the hel of Uday's bank?

Jokes.

[Toasty]

expansion in India, with the hel of Uday's bank?

Jokes.

Why not though? Its a huge market. No shortage of developers and they could have a huge cheap call centre too.

[vorno]

Why not though? Its a huge market. No shortage of developers and they could have a huge cheap call centre too.

...yeah just what we want.. another Telstra.

[whatsup]

When will XRO be sub $29 .00 ?

[couta1]

When will XRO be sub $29 .00 ?
How long is a piece of string? One things for sure you can forget about watching the Nasdaq as its up movements are having no impact on NZ tech stocks other than downward.

[Casino]

I feel this thread needs some cheering up. Look at the huge amount of negative feedback from customers who were migrated to the new version of QBO:

http://blog.qbo.intuit.com/2014/05/23/whats-new-in-quickbooks-may-2014/#comments

The migration was supposed to be complete a few months ago but there are many more customers to go. They only have till July by the look of things.

[RGR367]

I feel this thread needs some cheering up. Look at the huge amount of negative feedback from customers who were migrated to the new version of QBO:

http://blog.qbo.intuit.com/2014/05/23/whats-new-in-quickbooks-may-2014/#comments

The migration was supposed to be complete a few months ago but there are many more customers to go. They only have till July by the look of things.

TY Casino for sharing. Poor QBO users :( Having said that, I think it's time for this punter to gamble now on Xero coming back up to $32 and beyond once again. Who's keen?

[Santiago]

TY Casino for sharing. Poor QBO users :( Having said that, I think it's time for this punter to gamble now on Xero coming back up to $32 and beyond once again. Who's keen?

There's some pretty unhappy customers there. Compare with the Xero blog/ customer feedback. Some unhappy customers, and a lot of very happy punters. I've been topping up when the price dips below $30. But I'm pretty long on this stock. Could go down further, but I see it much much higher a few years down the track.

Agree with Casino though- this thread has become pretty grim recently. Here's hoping for some action to move it along.

[tzbang]

There still doesn't seem to any grounds for the grimness.. Xero release positive announcements, nasdaq is up, Xero continues to wallow downwards - just the cold weather?

[Santiago]

Most NZ tech stocks have run out of juice. A good time to buy perhaps?

[Carpenterjoe]

There still doesn't seem to any grounds for the grimness.. Xero release positive announcements, nasdaq is up, Xero continues to wallow downwards - just the cold weather?

Wouldn't be worried, think long term fifty million plus small business in the USA if they can get near ten percent, its over a billion in revenue. Might take a few years but the opportunity is there.

[blackcap]

Wouldn't be worried, think long term fifty million plus small business in the USA if they can get near ten percent, its over a billion in revenue. Might take a few years but the opportunity is there.

Problem being that a billion in revenue would still not justify a current market cap of $3.7b...

[Santiago]

Problem being that a billion in revenue would still not justify a current market cap of $3.7b...

Depends what their costs are. There's an economy of scale in the cloud. A billion in revenue with 200mil costs would most definitely justify a much larger market cap.

[blackcap]

Depends what their costs are. There's an economy of scale in the cloud. A billion in revenue with 200mil costs would most definitely justify a much larger market cap.

Yes it may justify a larger mkt cap but we are talking about 4-5 years out (maybe) and thus the mkt cap then would have to be discounted back into a PV. Too many uncertainties for me. :)

Look I love the product (XRO) just do not believe in the current market valuation for the stock and the implied growth/expectation that go with it.

[robbo24]

Meanwhile Xero keeps plodding along, building customers and doing deals.

There's an article about the Farming in the Cloud solution between Xero and Figured was launched at Field Days.

[Carpenterjoe]

Problem being that a billion in revenue would still not justify a current market cap of $3.7b...

Would it not? for established software companies don't you divide revenue roughly by 25 to get profit, then the market cap divided roughly by earnings of 250mil gives about 14.5.
Very rough workings and by year XYZ I'm sure the price of the product will be more expensive, the operations will be more efficient, and the exchange rate should improve.

[Carpenterjoe]

A tiler I use in Sydney now uses Zero, a builder I work for uses it. I know somebody who works for MYOB in Australia who wants a job at xero.

[blackcap]

Would it not? for established software companies don't you divide revenue roughly by 25 to get profit, then the market cap divided roughly by earnings of 250mil gives about 14.5.
.

One billion divided by 25 does not equal 250 million. Rather it equals 40 million.

How pray do earnings of 250 mil give a market cap of 14.5b? I would say earnings (for an established software company) of 250 mil would justify at the most a PE of 20 so a market cap of $5b.
Maybe I am misreading something here?

[Carpenterjoe]

One billion divided by 25 does not equal 250 million. Rather it equals 40 million.

How pray do earnings of 250 mil give a market cap of 14.5b? I would say earnings (for an established software company) of 250 mil would justify at the most a PE of 20 so a market cap of $5b.
Maybe I am misreading something here?

sorry mate one too many coffees, 25%. Earnings could pay off MCap in 14.5 years

[blackcap]

sorry mate one too many coffees, 25%. Earnings could pay off MCap in 14.5 years

Thats ok, I get it, I never thought dividing revenues by 25 was realistic. 25% or revenues certainly is. Like I said before though, love the company just do not believe the current valuation. Even earnings of $250 mill (in 4 years time) would make me happy to buy at current mkt cap of 3.7b. But that is just me.

[Carpenterjoe]

Interesting pricing plan they have for the USA, I like the aggressive nature.

http://www.xero.com/us/pricing/

Was it ever that cheep in NZ?

[Harvey Specter]

Interesting pricing plan they have for the USA, I like the aggressive nature.

http://www.xero.com/us/pricing/

Was it ever that cheep in NZ?Which plan are you talking about? The starter plan US$9 compared to NZ$25? You can get cheaper plans through your accountant but I dont think they allow invoices (though a plug in would give that functionality I think).

[RGR367]

Which plan are you talking about? The starter plan US$9 compared to NZ$25? You can get cheaper plans through your accountant but I dont think they allow invoices (though a plug in would give that functionality I think).

Just being curious, anyone here uses Xero or got a small business that uses it? What about sharesight?

[Harvey Specter]

Just being curious, anyone here uses Xero or got a small business that uses it? What about sharesight?I use Xero for my two small investment companies - I use the cheap cashbook available through accountants. I registered as an accountant to get it ;) - plus use the full version it on my Bro's Company which has $2m+ turnover.

I also use sharesight to track my investments.

While it costs more than a spreadsheet, it saves me a lot of time and is upto date, plus you can run reports quickly and easily.

PM me if you want.

[tzbang]

My business uses Xero and the monthly cost is insignificant compared to other business expenses and in relation to what it gives back in terms of perfect accounting efficiency.

[Harvey Specter]

My business uses Xero and the monthly cost is insignificant compared to other business expenses and in relation to what it gives back in terms of perfect accounting efficiency.I think this would be a common comment. Allows the business to take more control and use the external accountant for value add work, not simple bookkeeping (in comparison to an old desktop accounting package).

[Casino]

Which plan are you talking about? The starter plan US$9 compared to NZ$25? You can get cheaper plans through your accountant but I dont think they allow invoices (though a plug in would give that functionality I think).

I was wondering if it would make sense for Xero to offer a cheap starter package that comes with unlimited transactions but limited API functionality? Could be attractive for micro-businesses with lots of small transactions. Or did I just reinvent the cashbook?

[Harvey Specter]

I was wondering if it would make sense for Xero to offer a cheap starter package that comes with unlimited transactions but limited API functionality? Could be attractive for micro-businesses with lots of small transactions. Or did I just reinvent the cashbook?Cash book is unlimited transactions but you operate in cash (there are GST and non GST versions). That means you cant issue invoices and you can input invoices payable.

You do get API access though so the dividend, sale and purchase info from sharesight comes though (i dont think you can see the info) so when the cash hits the account (uploaded each morning), it is there to be matched.

[Casino]

Cash book is unlimited transactions but you operate in cash (there are GST and non GST versions). That means you cant issue invoices and you can input invoices payable.

You do get API access though so the dividend, sale and purchase info from sharesight comes though (i dont think you can see the info) so when the cash hits the account (uploaded each morning), it is there to be matched.

Thanks for clarifying. My feel is that the US starter plan is not as attractive as it could be and that they're missing out on some business.

[Carpenterjoe]

Which plan are you talking about? The starter plan US$9 compared to NZ$25? You can get cheaper plans through your accountant but I dont think they allow invoices (though a plug in would give that functionality I think).

Hey HS,

It seems a more aggressive sales style in the Us/UK with a lower entry price point than in the rest of the world. Just a simple observation.

[Santiago]

And with UK and Aust customer growth continuing at a fair clip, by rough estimate.

[Santiago]

From Xero's blog:

There is a massive investment to build these types of businesses and it doesn’t seem that long ago when were excited to get our first 1000 customers. It was only back in 2009 our revenues were just under $1 million. In 2010 we did $3 million. It wasn’t long ago we hit a million a month which was another big day. It’s very gratifying to see that massive multi-year investment beginning to deliver.


The scary thing is it is still so early. We’re thinking five to 10 years out and over the last year have added so much fantastic new talent into the business. We don’t see barriers for us to grow to a billion of revenue over time.


A huge thank you to our team who have worked tirelessly for seven years. Thank you to our partners and customers. We know we still have so much to do but with your support we are able to keep investing.


Our most exciting work is yet to come.

[zs_cecil]

Could be an importnat milestone, a step closer to potential IPO in US

[Santiago]

Could be an importnat milestone, a step closer to potential IPO in US

I think it would be a Nasdaq listing rather than an IPO. I don't think they need any cash right now (at least I hope they haven't burned through that 200m already...)

[Shore]

I think the $100m mark was a USD figure (re the NASDAQ), so a little further to go. Nice to see them start talking about billion dollar revenues though.

[dingoNZ]

Could be an importnat milestone, a step closer to potential IPO in US


I went to a speech a few months ago from Rod Drury and he said they would eventually list in the states, likely on the NASDAQ. But he said he had no idea on time frame and it wasn't Xero's focus in the short term.

I have no direct holdings in Xero but will be watching closely

[Santiago]

I went to a speech a few months ago from Rod Drury and he said they would eventually list in the states, likely on the NASDAQ. But he said he had no idea on time frame and it wasn't Xero's focus in the short term.

I have no direct holdings in Xero but will be watching closely

I reckon Part of it would be revenue, and the other part would depend on the success of their US operations. At least a few years off I'd say, but who knows.

[brend]

I think the $100m mark was a USD figure (re the NASDAQ), so a little further to go. Nice to see them start talking about billion dollar revenues though.

the announcement said NZD$100m

[Shore]

I would say 12 months.

[Harvey Specter]

I reckon Part of it would be revenue, and the other part would depend on the success of their US operations. At least a few years off I'd say, but who knows.A US listing is required to give liquidity for the US venture funds to exit at some stage.


the announcement said NZD$100mI think he was referring to one of the tests to list on the NASDAQ, which is US$100m (which I note is actual revenue for an accountant period, not annualised going forward - so after March 2015 at least).

[zs_cecil]

I think the $100m mark was a USD figure (re the NASDAQ), so a little further to go. Nice to see them start talking about billion dollar revenues though.

Ah ha.. you are right... Today's greenback exchange rate is 0.87. So, the milestone is about 75% there ..:sleep:

[RGR367]

Ah ha.. you are right... Today's greenback exchange rate is 0.87. So, the milestone is about 75% there ..:sleep:

And 70% of that annualised income is outside of NZ, so it's really looking good. But not good enough to bump up the price yet as of this moment.

[couta1]

And 70% of that annualised income is outside of NZ, so it's really looking good. But not good enough to bump up the price yet as of this moment.
I can't see anything that's going to bump the price up in a steady way for Xro or any of the tech/biotech stocks at the moment winter is well and truly set in IMO:cool:

[Snoopy]

And 70% of that annualised income is outside of NZ, so it's really looking good. But not good enough to bump up the price yet as of this moment.


You are getting ahead of yourself RGR. XRO has no income. None at all. It's loss making.

SNOOPY

[lastmoa]

I can't see anything that's going to bump the price up in a steady way for Xro or any of the tech/biotech stocks at the moment winter is well and truly set in IMO:cool:

As an investor I am not to concerned about the 'bump up' of SP in Xero or others. With the latest result declaring annualised earnings over NZ$100mill this is just more validation that Xero is on the right track. The story is gaining traction.

[tzbang]

Xero now making $8.6M per month in recurring revenue, $100M per annum milestone now passed. Yet another milestone the boys and girls in Wellington will be celebrating.

Keep on going you good things :)


Great news! Lets see how far down Xro goes of the back of this announcement. lol

When Xro lists on the nasdaq.. what effect will this likely have on the SP ?

[lastmoa]

You are getting ahead of yourself RGR. XRO has no income. None at all. It's loss making.

SNOOPY

Why do some people get so hung up on some company's focussing on a big picture and continuing to make losses? Call Xero and tell them to call off expansion into UK, USA, Aust and other countries, fire all its dev's and just have a sys-admin skeleton crew, and then Xero can be a profitable NZ cloud-accounting solution that makes loads of NZ$ money (for investors that fail to dream big). 8-)