I checked the Link website and shares were showing up about 9am today
Printable View
I checked the Link website and shares were showing up about 9am today
Check the share registery
http://www.xero.com/investors/yourXero/
Thanks for that.
Multi-Currency is being released on the 22nd, Opens the door to a lot of international customers.
Picked up a small parcel today.
Quite a few people are quietly picking this company to do big things over time.
I have snuck a few of these into my portfolio as a punt on other peoples picks.
Cheers,
MPC
Nice move pre multi currency Pietro. I never realised the importance of that release. The SP has followed.
I just checked out the demo of it on Xero’s site – quite an impressive piece of work. It’s been said before, but boy there are some good things going on at that place. Scary potential.
I Like this company but not much interest on this site.
Who else has some of these...?
Cheers,
MPC
Holding and content to wait for the market to revalue. This one is lower risk but still has A LOT of upside IMO : )
PS nice steady grind up over the last wee while...accumulation occurring now?
Decent revaluation will occur once they reach break even point. Keep an eye on customer sign ups, seem to be increasing at an impressive rate and in more countries all the time. Management seem to want to keep us updated as much as they possibly can as well so a lot of positives.
Cheers,
MPC
Wonder if that Sam Stewart is going to do another update .... that analysis linked above was pretty good
Xero's product by all accounts is impressive. It is also beautifully scalable. With the right channels in place (which appear to be in place) uptake could well be, well amazing. An interesting one to follow.
Revaluation once they reach breakeven point?
My experience with these sort of stocks is, yeah, they do get a revaluation as they approach break even point....usually downwards!
Once you have even the glimmer of an "E", it makes people actually look at the "P" rather than assume it *must* be a bargain because the company is about to take over the world.
Don't get me wrong, I like Xero. But a lower risk stock as someone above said? No way!
I’m expecting another jump July/August when BT in the UK and Telstra in Aussie start pushing this product in their ICT offerings.
The big make or break in my mind is whether this can come off in America where integration with banks could prove difficult.
I agree that from July/August forward will be very important in terms of customer growth. I imagine that it will take a little while for Telstra and BT marketing to get traction but hopefully will result in a much improved rate of customer growth. I'll be looking forward to the regular updates about paying customer number and average revenue per customer. Sam Stewarts analysis will be useful for comparison.
I should mention as well that I got in with capital raising so hold a small parcel. Could sell for not a bad little profit but think the company has a way to go yet. Not sure how long it will take though.
Stranger danger,
I actually agree with you.
Re rating will happen once we know that break even point will almost definitely occur at some time in the near future. It will then get priced in. Maybe then drop as it approaches that actual point.
I don't think this is a high risk stock, I am quite happy with the risk/return potential on this one. Happy to have a few of them to keep it interesting though.
Cheers,
MPC
I started to take an interest in these but got cold feet when I studied the recent charts - not that I am a charting expert, by any means, but I know enough to indicate that the present does not seem to be an auspicious time to buy in.
Will keep watching from the sidelines, for the time being.
Hi Colin,
Can you expand on your charting views please?
Share movements seem to reflect the recent capital raising and profit taking from being given cheap shares.
Cheers,
MPC
Sweet. Thanks Colin
OBV, RSI and slow stocastic looked good for an entry about 1.25 a week or so ago. Since then OBV and RSI have continued to increase. From my limited chart knowledge this seems good so far.
Any thoughts Phaedrus?
Nice movement since the multi-currency release.
I look forward to the announcement of the UK CEO for Xero. According to a recent blog post^, it will be an "accounting vendor rock star"
I wonder if the have managed to snaffle up a big name from one of the incumbents
^ http://www.accmanpro.com/2009/06/27/...onsor-success/
Was defiantly not expecting a reaction like this to that release. Still, I feel the true value of this share will be apparent after its next market announcement. The 3 key factors I see are:
1. How they have went in acquiring resource – the big one being the 40-50 or so developers required in Wellington which would not be easy.
2. Proof of Xero being a strong part of BT/Telstra’s ICT offerings
3. Proof of subscriptions growing on top of the huge increase they saw between Q3/Q4 last year
Some sort of strategy around entry to the US market would be nice as well
Maybe they could get someone from BT for a year as UK CEO. (Staff have the opportunity to take a year off on 25% pay)
http://news.bbc.co.uk/1/hi/business/8134123.stm
Sounds like Xero have their 'man'
"Later today, I will be able to reveal Hamish’s successor. In my opinion, they’ve snagged one of the brightest and best minds on the UK accounting circuit. Watch this space."
http://www.accmanpro.com/2009/07/06/...talks-success/
I look forward to finding our who it is tomorrow morning!
Hope the competitors feel the wrath...
http://en.wikipedia.org/wiki/Gary_Turner
AGM is in just over a week (23rd) and will most likely update the market on customer numbers.
Any predictions on this magic number?
6000 as of the 31st of March
7500 as of the 10th of May
at a continuation of this rate they would have 10275.
I doubt that the will have this many though, as the previous rate was over the start of the financial year NZ/UK
Big factor will be the OZ growth over their FYE.
9500 is my guess.
4 posts in a row is definitely a case for accusing me of ramping =]
Massive turnover today ahead of the AGM, any idea of the cause? Gary Turner buying in?
Hope the drop relates to a buy in...
In regards to your predictions on paying customers - I think you are dreaming if you think you can get within 5-10% of that..
Lets hope its on the high side..
big trade at 1.35. Nice to see market confirm value is well north of 90c issue.
10,000 Customers - Hockey stick growth in full flight!
10,000 customers is awesome. That should be 500k in revenue per month.
Watch the numbers closely. If they are for real the actual cash coming through the door per month is about to take off.
But that is substantially less than their minimum price, and they stated that they only count paying customers?
"Xero currently has in excess of 7,500 customers who, in aggregate, are committed to approximately $250,000
of monthly revenues. Revenue collection and recognition is subject to timings of customer promotional
periods."
Lower than $50 Month due to:
-Annual Payment discount
-Not for profit discounted rate
-Xero Accountants edition (lower functionality available through accounting firms only - at a discount, but usually bundled with accounting services)
-Telecom, Telstra & BT taking a cut?
"10,000 paying customers is a ten-fold increase in our customer numbers since March 2008 and, in aggregate, these 10,000 customers generate approximately $330,000 of committed monthly revenues"
Ha Share buy-back announcement today - so soon after the SPP
Market likes : ) Expect some more favorable price action as XRO forward momentum pick-ups further and traders again enter.
I expected XRO to race away a bit more than this on the 10k news, and the other positive signs out there. We were at 1.42 before the good news. So that raises the question - is XRO still at value to an investor?
To tell the truth I have no idea how to value XRO - does anyone?
The stock has so many unknowns, all good, but how good?. In the end it does come down how you value the benefits of these future possibility’s.
I'm expecting news from XRO is going to slow down a tad and really enter a BAU phase. As;
- Telco contracts in place
- Major system upgrades complete (multi currency)
- UK office set up
- FY09 and AGM behind us
The announcement on treating the USA with care, to me is a huge hint they are a long way away from pushing into that market. This obviously means they feel very comfortable easily making that break even in good time without the US. Another nice display of confidence.
In the medium term, I'm thinking about 3 things:
- Continuing to bulk up XRO accounting functionality
- Looking into adding value added services integration, i.e Web 2.0 Payroll apps. To lift that $33 ARPU.
- A stronger force in Aussie. Road shows have just completed, hopefully these have spread the word as they have very small market share over there.
Defiantly a slow down in advancements/news though. So a decent time to value XRO - anyone?
My thoughts as well Buns. I was thinking today what the company would be worth once they have 20000 or 100000 customers. 10000 is a drop in the ocean but a nice start.
I am happy with progress and with the company in general. Nice to see positive articles in the media but words of caution from the company itself is also reassuring, they know what is needed and how hard it will be to become a big player. Interesting future.
Regards,
MPC
Winnner, that is picking a sentence out of context to make a point.
That number of customers needed in 5 years time to get a 5x return on investment.
Cheers,
MPC
That figure is based on an Average revenue of $35... Currently it is $33 but Xero have intentions to raise this through added functionality/intergrations
I keep hearing Xero being mentioned by more and more accountants as I talk to people and or accountants.
And apprently MYOB is working on an online product but way off producing somethimg at present
Still worth inveting into I think - but not right now as it is falling back a bit.
Don't buy into a down trending share - Phaedrus must have taught me something!
yep I expect XRO to go through a bit of a lull for a while. They are well past building the product, and are in an accumulation of customers stage.
They have just integrated with sharesite though, quite interesting.. I had a trail and loved the 2.0 interface.. Then got over it and went back to my trusty excel sheet.
http://blog.xero.com/2009/08/sharesight-and-xero/
Not too much to get excited about. The revenue share from this would be minimal
Anyone use sharesite?
All quiet from Xero for a couple of months now - not like Rod Drury at all - he loves publicity. Something must be announced soon.
They have taken on a load more development staff in the last two months and are looking for more staff in NZ, Oz and the UK.
So - what will they announce next - increased functionality or the latest number of customers? They must be close to the magic 30,000 mark by now.
Ta for that.
I got a beer that says 15,000 minimum!
As much as believe in this company
I have a beer that says it's sub 15,000...
It's pretty hard to sell accounting software in August and September.
Nothwithstanding the time of the year I stand by my 15,000+. 12,700 is straight-line growth and I think that they will do much better than that.
GENERAL: XRO: Xero throws the net wider
28 Sep 2009 10:25 am
XRO 28/09/2009 GENERAL
REL: 1025 HRS Xero Limited
GENERAL: XRO: Xero throws the net wider
Xero throws the net wider
Market release 18 September 2009
Online accounting software company Xero (XRO) is extending its reach within the SME market.
Since listing in June 2007, Xero has generally been available under a 'one size fits all' pricing plan of $NZ49 per month. From October 11 Xero will add two new price points so that it will be available in Small, Medium and Large.
The change broadens Xero's appeal to more customers across the SME spectrum. For instance the Large plan priced at $NZ64 per month includes sophisticated features that only some customers will need, such as multi-currency conversion for exporters and importers.
Small at $NZ29 a month will deliver all the standard features of Xero but the cost is more affordable to customers who have low levels of transactions, such as small property investors and freelancers.
"We're delighted to get to the point where the feature set in Xero has become comparable, and in many cases exceeded, the last generation of desktop software," says Xero CEO Rod Drury.
"With recent investment in our hosting capability we can now deliver Xero at a price point that will make Xero compelling to a further, large segment of the market - many of whom have been doing accounting manually or using spreadsheets", he says.
The new plans will also be available in Australian, United Kingdom and Global versions of Xero at appropriate pricing for each market.
Email Received today:
Quote:
Flexible pricing to suit you
Hi there,
We’ve been investing heavily in new features and our platform. With this investment we can now appeal to more of the SME market.
Instead of a ‘one size fits all’ we’ll be offering Xero at a further two price points. For customers who do a small number of transactions, such as small property investors and freelancers there will be a lower cost entry. Rather than limit the features that make Xero great or limit the number of users, we’ve simply set some transaction limits.
When we released multi-currency we signaled that this was a premium feature – one not everyone needs but which is a fabulous tool for exporters and importers. So for those of you wanting this and more sophisticated features we plan to release over time, we’ve come up with another price plan.
The plans are pretty simple really – Small, Medium and Large.
The Detail
What happens now?
We’ll move you to the Medium plan and make allowances for any multiple organisation discounts or special pricing. This will ensure you pay the same as you pay now. As a valued, loyal customer you’ll receive multi-currency for free just long as you stay on the Medium plan.
What do I do?
You don’t need to do anything - unless you think it is worth your while to downgrade. Just remember the Small plan has a limit on transactions and does not include multi-currency.
The Timing
The new pricing comes into effect from 11 October. Your next invoice will reflect the period before and after the changes are introduced.
We’re excited about extending the reach of the Xero and hope you enjoy this new flexibility.
Best regards,
The Xero Team
New Pricing Structure:
SMALL - $29per Month
- Up to 5 Accounts Receivable and 5 Accounts Payable
- Up to 20 reconciled bank statement lines per month
MEDIUM - $49per Month
- Unlimited invoicing
- Unlimited bank reconciliation
LARGE - $64per Month
- Multi-Currency
- Unlimited invoicing
- Unlimited bank reconciliation
24 Oct 2008 Consolidated financial statements 6 months to 300908
24 Oct 2008 Half year results for the 6 months ended 300908
1 Oct 2008 Operating update to 30 September 2008
I would expect the same time frame this year... will still be running at a massive loss IMHO.
With Mint in the US just being bought out by quicken(?) in the US, I wonder if they will expand that outside the US and the implications that will have on Xero.
I know Mint is personal finance but if people know how to use that, it is a natural progression to use whatever business version they also offer.
Xero doubles customer numbers in six months
MARKET RELEASE
Xero doubles customer numbers in six months
01 Oct 2009
Key operating metrics
- Xero’s paying customers double to more than 12,000 since March 31 2009. This compares to 2,200 customers at the same time last year (Sept 30 2008).
- Xero now has paying customers in more than 50 countries. Key markets include New Zealand, the United Kingdom and Australia.
- Total staff numbers have increased to 73, including new development staff in Wellington and sales staff in support of new bases established in Melbourne and Sydney.
Product Highlights
- Xero invests in a major upgrade to its hosting environment, which will allow the company further capacity to scale and grow.
- Xero releases its most significant feature, multi-currency, to the market. This offers real-time exchange rate conversion in up to 160 currencies.
- Xero offers automated daily bank feeds from HSBC – the first bank to do so in the UK. Xero already has automated daily bank feeds from most of the major banks in New Zealand and Australia.
- Xero broadens customer reach within the SME market, introducing price points that cater for those with low levels of transactions and those who need more sophisticated features such as multi-currency.
- Xero releases version 2 of its API (application programming interface) which allows software partners to integrate their solutions more easily and quickly with Xero.
Capital Raising
- Xero raises a total of $29 million. The capital raising includes the following:
- A strategic capital raising of NZ$23.2 million at NZ$0.90 per share from key investors including Craig Winkler, a founder and former major shareholder of Australian based accounting software company, MYOB. With shareholder approval Craig Winkler went on to acquire NZ$18.0 million of new Xero shares.
- Xero Share Purchase Plan raises $5.8 million and receives 70 per cent take-up among existing investors.
Company news
- Microsoft executive and former Pegasus Software MD Gary Turner is appointed to head the Xero UK operation.
- Xero co-founder and former UK managing director Hamish Edwards focuses on driving global sales.
- Former MYOB founder and Xero corner-stone investor Craig Winkler joins the Xero board.
- Marketing partnerships with British Telecom and Telstra in Australia commence. Xero is now available to a collective 2.4 million small business customers via BT’s business application portal and Telstra’s software-as-a-Service platform T-Suite
- Key sales and customer care staff are appointed in Sydney and Melbourne. This is part of Xero’s Australian growth strategy and is designed to build on the success of roadshows held in the main centres in July.
- Share buyback results in the purchase of 500,000 shares at a cost of $744,085. The share buyback was intended to eliminate any increase in capital arising from Xero's employee restricted share plan for the year ended 31 March 2010 and any consequential dilutionary effect for existing shareholders.
- Xero wins the category for best business application on the internet at the New Zealand Internet industry Awards.
- Xero wins two Webbys - the Oscars of the internet, in the banking/bill paying category.
Summary
It's been a very busy half-year for Xero. The company has completed its capital raising and continued to build the Xero platform and team, ready for the next stage of growth. Xero is pleased that the strong customer acquisition experienced at the March 31 year-end, continued beyond the seasonal peak.
Expanding the development team has been successful in a market where experienced and talented people are still in short supply. This supports Xero’s quest to deliver a feature set that exceeds desk-top software functionality on offer from incumbent providers.
Following on from overseas market entry activities in the last half, Xero recruited experienced senior sales staff in Sydney, Melbourne and the UK and has made significant progress in developing these markets.
Xero continues to execute its plans and is well positioned for growth in coming years.
Was hoping for the 15,000 figure though. =]
Will be interesting to see the cash burn, to be fair they have a lot and it is there to be used.
Interesting to see the new pricing structure, wonder how many current users will be able to downgrade. This move will likely decrease the ARPU and with increased staff levels, I expect the breakeven point to climb well above 30,000 users.
Xero has established New Zealand and Australia country manger positions, with former NZ sales general manager Leanne Graham taking the local country manager role, and Wayne Schmidt taking up the Australian post.
Schmidt comes to the Xero Australia from automated mobile communications specialist Whispir and has also held positions with MYOB.
In a statement posted on the NZX, Xero CEO Rod Drury says "We're delighted to have someone with such knowledge of the Australian accounting industry lead out team there.
"It's an exciting time for us in Australia. Xero is starting to get some traction with the establishment of sales offices in Sydney and Melbourne and out marketing relationship with Telstra," Drury says.
Graham, who joined Xero in April as sales GM, was a co-founder of Enprise and held the roles of sales and marketing head, and managing director of the company's global business.
If accounting software company Xero continues adding customers at its current rate of about 1,000 a month, its disclosed break-even level of 30,000 customers should be reached in less than 18 months from now, says First NZ Capital retail research manager Barry Lindsay.
"There is nothing to say that (growth) should slow; in fact, it may well accelerate, given the additional sales staff that have been employed and the strategic partnerships set up with Telstra and British Telecom," Lindsay says.
The indications are Xero needs annual revenue of about $12 million to cover its operating costs. "The $12 million in annual sales could also be reached sooner than earlier suggested as the company has recently moved to a new pricing scale," he says.
This will see Xero charging large customers, who need additional features such as multi-currency options, more.
Lindsay estimates Xero could achieve a $1.5 million net profit in the year ended March 2012 and that could jump to $4 million the following year.
"The operating leverage this company enjoys is enormous - it costs very little to add a new customer. Our 2012 assumption is based on 45,000 customers by year end and, by the end of 2013, 60,000 customers." Xero had more than 12,000 customers at September 30.
BROKER CALL: First NZ Capital rate Xero as "should appeal to those investors who are willing to back the skilled, committed people driving this business."
Yeah I think something is up...
XRO 02/11/2009 GENERAL
REL: 0918 HRS Xero Limited
GENERAL: XRO: Xero to break into the consumer market
Online small business accounting software provider Xero (XRO) will launch a personal money manager in early 2010.
Xero Personal will allow consumers to have a complete view all aspects of their finances. They'll be able to see ALL their bank accounts in one place; accurately track where their money is going; set savings goals and monitor the progress toward these - all in a way that's not been seen before.
"There's an increasing blur between consumer and SME services and personal/consumer finance literacy is a hot topic on the global stage,'' says Xero CEO Rod Drury.
"Recent evidence of this is US financial and business solution giant Intuit acquiring Californian based online personal finance service Mint.com for US$170 million."
Xero Personal extends the Xero service, exposing it to a vast, much wider consumer market.
"Xero Personal is a spectacular hybrid model, which we believe is a world first," says Rod Drury.
"We looked at the current stand alone offerings and solutions provided within Internet banking sites and decided to take a different approach that combines the rapid innovation Xero customers have come to expect, with the power of the transactional banking platforms."
To develop Xero Personal and to help take it to market in New Zealand, Xero has formed a partnership with the BNZ, which is a strategic investor in Xero.
"We're delighted with what we've been able to achieve with BNZ," says Rod Drury.
"As a long term partner of Xero, BNZ is excited about being involved with such an innovative product which will allow our customers to see at a glance where their money is being spent and how they can reach their savings goals quicker," says BNZ's Director, Retail, Chris Bayliss
BNZ will be offering a co-branded version of Xero Personal to its customers. This version will allow bank statement details to be imported automatically each day, giving BNZ customers an up-to-date snapshot of their finances.
While Xero Personal will be available to Xero customers who don't bank with BNZ, bank statements from other banks will need to be imported manually.
Xero is looking to partner with banks in other offshore markets and jointly promote the Xero Personal offering to their customers. For customers who use Xero's online business accounting service, Xero Personal will give them the ability to lodge and track business expenses - paid for from a personal account or credit card, directly back into Xero.
Xero personal has been in development for the past 6 months and an internal pilot will start next month in conjunction with BNZ.
That should be interesting. Shame they are limiting it to BNZ (for automatic updates).
Also no mention of pricing. I assume BNZ will foot the bill initially for their customers but for non bank users.
It would be interesting to if it became quasi ad funded. Mint apparently while tracking your expenditure also gave recommendations - ie. your credit card fees are too high, consider this product. Mints income came from those referals adding true value to users at no cost. It is a shame it never released outside the US.
6 month report out this morning , more of the same !
Xero CEO and successful technology entrepreneur Rod Drury is to become a Director of NZX, effective today.
A passionate business person with a clear vision for New Zealand's entrepreneurial future, Drury is distinctive for his ability to turn technology ideas into thriving companies, recognised internationally for their excellence and ongoing growth potential.
NZX Chairman Andrew Harmos said, "NZX's current businesses, and its future capabilities, are founded on a unique combination of strategy and people, technology and determined loyalty toward a successful New Zealand. Rod's credentials reflect all of these.
"Rod shares the same vision of success for New Zealand business on a global scale, and we're confident that NZX, and the companies in our markets, will benefit from his insight and energy."
Rod Drury said, "Listing on NZX - our national stock exchange - should be an aspiration of all New Zealand business owners. Our businesses need the capital to grow, and create attractive investment opportunities for other New Zealanders to be part of that growth.
NZX CEO Mark Weldon said, "Rod's belief in what Kiwi companies can achieve is evidenced in the success of his own businesses - AfterMail and Xero - Xero having been strongly supported by the market, and having grown rapidly since listing with NZX in 2007.
"Technology is the great 21st century enabler for businesses in all sectors, regardless of their scale, and for timely and transparent access to markets here and around the world. This is the right time for NZX to add a technology expert and entrepreneur to its board and we're excited by the possibilities of what we can achieve."
Drury's first official role as an NZX Director will be to address the final 2009 Global Entrepreneurship Week event at the NZX Centre on 20 November.
From Xero this morning -
Today is our last major feature release for 2009 and as usual the elves have been hard at work.
In this release we have completed our end-to-end creditors functionality with the introduction of batch payment features. Xero is now a powerful solution for restaurants and cafes or anyone that needs to manage lots of payable invoices.
http://blog.xero.com/2009/12/what-sa...ontent=Twitter
Xero have done the hard yards and got themselves in a strong position for growth.
They now have acquired 15,000 odd customers (reported 12,000 as of 30/9 and reported current growth of 1,000 per month)
The next 3 - 6 months are going to be very interesting, XRO are likely to double customer numbers over this period with the FYE in NZ UK then AUS.
Xero Personal edition to be released soon, this is going to be an incredible marketing/branding tool.
Xero has increased Bank feeds from about 10 to 11,000 with an agreement with Yodlee...
This is going to be huge for the US market and opens up a whole lot more customers in the UK and Australia. The floodgates will open, hope the customer service team is ready!
Have a few thousand of these from float time and a few more from the capital raising.
To be honest i have never really bothered looking into them in much depth, just put my faith in the management.
Prompted by an article i read in one of yesterdays aussie papers i decided to have a look at what they were upto.
First thing to note is the share register has some very clever people on board . Including ex MYOB people and the founder of trademe.
Secondly the capital raising has strengthened their position considereable , they now have no debt and plenty of cash reserves. They did remarkably well to gather so much cash at a time of market turmoil.
Thirdly , they have been growing customers at a decent rate and if yesterdays reports are anything to go by takeup will be accelerating.
Fourthly , they are moving into the area of personal finance and will be releasing new software mid year , they have now expanded their network of banks etc to enable customers to update live all their account info etc.
They seem to be doing a very good job and have made significant progress since listing .
Question is , is it a good time to buy a few more ? Certainly no intention of selling those i already have , they going back in the bottom draw , and will have another look next year
will this strategy work?
- How many people will pay for personal finance
- Most banks are now rolling out their own versions (ASB, Kiwibank, westpac) though clearly not as good.
- With the makers of Quicken buying out Mint, willl there be a global roll out of mint?
An update on customer numbers is due 1st April, wil be interesting to see how if the seasonal rush is even bigger this year.
Im conservitively picking 19,000 customers at 31/3/2010 = approx $600,000 rev per month, which is getting closer and closer to breakeven.
I am looking forward to the Yodlee bank account link up due later this year. This could really open up the floodgates...
Speaking to an accountant who has quite a few clients using Xero the comment was made that they (as well as their clients) are getting more and more frustrated at the slow response time of the Xero servers and that they urgently need to do something to fix that problem ... maybe breakeven is about to go up
Schools annoucement today, Xero Personal launch on Monday, then thier market update... Exciting times
Xero personal $5 a month, looks pretty damn good... http://moneymap.bnz.co.nz/section/updates-and-info/
I have wanted something like this for a long time!
Have to do some serious research on the company, I know of a few people who are seriously thinking of investing heavily.
I prefer these guys
http://www.pocketsmith.com/
Just Playing with Xero Personal now... good fun! the whole Xero website has changed but looks just as 'sexy' as before!
does personal track stock portfolios as well as bank accounts?
Xero triples revenue
https://www.i-search.nzx.com/blobs/N...XRO-116974.pdf
Over $3m revenue for Last year,
With 17,000 Business customers @ ARPU of $33 thats a committed revenue of $6.7m for this year, so revenues will be doubled again this year, even if they add no more customers.
Will be interesting to hear the update in May, especially as people tend to wait until April to change accounting systems.
Growth Chart Attached, Illustrates the seasonal signups in April
I'm clearly a luddite but, as a general rule, are you guys into buying shares on a P/S of 46, or is Xero an exception?
My estimate was based on the "over 3 million" sales figure that was announced today, not sure what "growth announced since" refers to as todays announcement is the most up to date data we have. My estimated P/S is on estimated figures for a year that ended only yesterday.
Don't get me wrong, Xero are doing lots of good things. I just have a suspicion that when/if these things come to fruition, the valuation will be less than today. I like the product and the company. The stock at this valudation? Not so much.
They are not close to profitability but lets say they shock the market and announce a net profit of 1 million tomorrow.
Is that good news?
All it would do is clarify the situation, ie, a P/E of 140 or so.
Stranger:
The $3m Revenue is equal to a weighted average of 9000 customers throughout the year. This year they are starting with 17,000 customers, which is what I believe winner is talking about.
Sure looking at P/S or P/E short term, this looks like an absolute lemon... Xero is all about growth, if they can manage to maintain their hockey stick growth, the revenue numbers get pretty big pretty quick.
I have it from good connections that the exit strategy for XRO is some what simular to Software for Excellence once the T/O and profit are established that XRO will be taken out, if we shareholders do nothing else it is to hitch our waggon to this rising star, so far XRO is meeting its targets, the rest will follow and people are taking note.
With the penetration of customers in many countries the XRO system is gaining recognition for reliability and flexibility.
Taken out by who?
Until MYOB from taken over by private equity, I would have agreed with you. I strongly suspected that Xero was basically formed to sell to MYOB.
I can't see how buying Xero fits into a private equity model - borrow 200 million to get a few million of sales, and no profits? Paying interest with what?
Therefore, I can't see MYOB being a buyer.
This leaves.... ?
Further to the above, I know someone is going to answer "no, MYOB would wait until sales/profits are X 20 and then buy it!".
Whilst this makes sense in theory, for it to happen, MYOB's existing business would probably have to have been impacted to the point where it could no longer afford to buy Xero.
Borrow 200m?
Xero rasised 15m on IPO? and then another 20m from SPP/ placement last year. They have no debt. Also I think Drury made it clear when they first listed, that he was looking to make Xero a multi-billion dollar business.
His words were pretty short at the pre IPO presentations that they would tell any takeover suitors where to go.
MYOB is owned by private equity. Unlisted company. Couldn't issue shares to buy it.
Generally PE deals are funded by debt. Xero would want a premium. Thats where my (totally pulled from the sky) figure comes from.
I'm not talking about Xero borrowing money, as you say, their cash position is strong.
So who then?
I just don't see who the natural buyer is.
Cant see XRO being sold off anytime in the next 5 years, as silverlight said - Drury stated early on that he has played that game before but this time he was looking to make Xero a multi-billion dollar business...
Well , they have gone from 11.000 customers in september to 17.000 at the end of march . Quite an impressive ramp up which ever way you look at it.
Pointless trying to value this company via the usual methods , its all about rapid growth at this stage. No reason why growth should slow anytime soon , if anything it should accelerate , and all this excludes their new personal product.
If they continue to grow at current rate then by this time next year they should be well over the 30.000 they need to breeak even , again excluding new product
Rod has told me that he will not sell Xero. He wants to show that, with the weightless economy, NZ can produce and sustain a world class multi-national company from a base here.