It would be nice to know those customers having more than 100 payroll employees by 1 July 2015 because of this http://www.digitalfirst.com/2015/04/...p-pricing-plan
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It would be nice to know those customers having more than 100 payroll employees by 1 July 2015 because of this http://www.digitalfirst.com/2015/04/...p-pricing-plan
A couple of points re recent posts & XRO latest.
The point of the ASX letter was this. Was the news of increased loss price sensitive? It clearly is & the SP is reflecting that.
XRO's response is either showing arrogance & I might add to the wrong entity, you don't want to get these people offside. Or its naivety.
Increased loss is suggesting that costs are growing faster than revenue, this is SP sensitive.
One poster says there are only a couple of types of people on this thread. Those who missed out, those who bought & those who don't understand it. Well there is a fourth, those who understand it & clearly saw it as over valued & the SP again is reflecting this.
On a positive note it is now better value than it was, but imo still over priced, but just not as much as it was.
I've been travelling for a few days so haven't had a chance to contribute to this thread.
I find it interesting that there are still people out there that have absolutely no faith in the execution of Xero. This is a company that now has close to half a million customers, each paying about $30 per month for a service that they consider useful. Yet some commenters here are adamant that Xero is a house of cards that will come tumbling down and Rod Drury is a con artist.
I find the focus on profit by detractors to be very odd too. "Tell us when you'll make a profit?", they say.
If you can't see how it might be possible for Xero to be profitable if they were to have 2 million, 5 million, or 10 million customers, then clearly you consider Xero to be worthless and there is not point in even contributing to this thread.
Some people are treating Xero as if they have no plan at all for profit. That there is no possibility at all that they will ever make a profit. I don't subscribe to this opinion. I'm pretty sure there will be detailed modelling within Xero of the next few years as they grow the company and head towards profit. (Whether they survive that long is a different matter).
Looking through the annual results, I'm a little surprised by the big drop in the share price. There is nothing in here that was surprising to me, especially given the size of the Australian market was announced on 31/3. Of the five main markets, (NZ, Aus, UK, US, RoW), I correctly estimated the subscriber numbers in three of them, Xero announced Australia, and I should've revised down my UK figures given the Aus figures were lower than expected.
To put that another way, I would've expected the price to drop following the announcement of 200k Aus subscribers on 31/3 (I had estimated 217k) rather than with the Annual results. This obviously doesn't factor in the departure of the CFO which I do consider to be a problem and worthy of a price drop.
In terms of achieving profitability, there are three things Xero is spending money on: running the business, growing the software, and growing the customer base. Only the first of those expense groups relates to just the current year. I believe that growing the software and growing the customer base are expenses where the benefits will accrue over multiple years. They are investing for the future and it is acceptable to me that this should cause losses for now.
And finally, in response to Jantar who is complaining about the lack of tangible assets: this is a software business. Not a factory. Tangible assets don't matter at all. A software company like Xero can service 500,000 customers or 50,000,000 customers with the same amount of NTA. This is even more irrelevant, since (as far as I'm aware not being an accountant) isn't the software itself an intangible asset?
My current expectation is that Xero should be profitable in about 18 months. Growth is slowing a little quicker than I would like so profitability might take two to two and a half years. Getting growth ramped up in US and UK is important to justify the current SP and get to profitability.
Bloody recruitment agencies ....an suppose being punched in the face than having your pony tail pulled
http://www.sharechat.co.nz/article/0...drury-sayshtml
Xero changes recruitment tactics as unsuitable US head, CFO depart, Drury says
Friday 1st May 2015
Text too small?
Xero boss Rod Drury says the accounting software developer has changed its tactics for hiring senior executives after the departure of a US chief executive who lacked urgency and a chief financial officer who didn’t like to travel.
The departure of former North American CEO Peter Karpas in September, after six months in the job, and last week’s announcement that US based CFO Douglas Jeffries has left after just six weeks, unsettled investors. The shares dropped to a two month low following news of Jeffries’ departure and the company’s annual results, prompting the ASX to ask Xero if it was complying with disclosure rules.
Drury says Karpas ticked all the boxes, having worked at both larger rival Intuit and run Paypal’s small business arm in the US, but he didn’t have the “urgent start-up mentality.”
“The performance wasn’t there, the numbers weren’t there, boom,” Drury told BusinessDesk. With Jeffries, the former CFO himself realised he had taken the wrong job.
“Within two months of him travelling around he realised it wasn’t for him,” Drury said. “He wanted to be in a business where all the chief executives were based in San Francisco. That’s not our business.”
“It’s unfortunate he didn’t realise that in the beginning because it’s like coming into our business and setting a bomb off, but it really has no impact. It is a perception thing.”
The mis-hires have prompted Xero to rely less on recruitment agencies for top executives and more on its own networks and shareholders, which include seasoned Silicon Valley venture capital firm, Accel Partners and Matrix Capital Management who contributed $147.2 million in equity capital in February. The company also taps the networks of its directors like Salesforce CFO Graham Smith and Hewlett-Packard executive Bill Veghte.
“What we found is when we get people from a recruitment process and not through our networks it is not as good, and the chemistry wasn’t there, so better to work that out now and deal with it than not,” Drury said. “It’s eyes wide open because we don’t want to get another one.”
The US is the smallest of the company’s four key markets behind Australia, New Zealand and the UK, but its fastest growing. In the year through March, its US customer base grew 94 percent to 35,000. The country has an estimated 24 million small businesses.
Xero has been forced to adjust to a more direct marketing model in the US, where many small and medium sized businesses do their own accounts rather than outsource the work in what is a more litigious market where accountants tend to focus more on compliance issues, Drury said. More than half of its US customers now subscribe directly through the xero.com website, which has been simplified for end users.
By contrast, accountancy firms have been an important catalyst to sales growth in Australia and New Zealand, alerting clients to Xero’s easy to use, cloud-based service.
Drury says Xero is still eyeing a Nasdaq listing as a way to boost its US profile. The company has reached one of its own pre-conditions, achieving more than US$100 million in annualised revenue, but would prefer to wait until it had gained more traction against rival Intuit in terms of winning customers.
Globally, Intuit has 841,000 subscribers to its QuickBooks online accounting software, compared with Xero’s 475,000 customers.
Xero also plans to strengthen its push in the US by partnering with global brand companies such as Google, Microsoft, Amazon, Wells Fargo, Bank of America, Visa, Mastercard, Verizon and Sprint. It hired former Microsoft executive James Maiocco as head of business development in November to help clinch the deals.
“We are nailing these big partnerships, so we don’t have to build our brand on our own, that’s a very logical strategy for a new entrant coming into a market,” Drury said
Xero told the ASX this week that it was in compliance with listing rules after being asked whether it telegraphed a 96 percent blow-out in its full year net loss as soon as it became aware of the deterioration. In its response, Xero said it didn’t regard profit as the right measure of performance for an early stage, high growth, loss making, software as a service company.
Drury emphasised that view at the two day Xerocon conference in Auckland this week.
"If someone comes up and says when will you guys make a profit, I’m going to punch you in the face because we have a quarter of a billion in cash to invest,” Drury said. “Our investors don’t want us to put it in the bank, they want us to grow and hire so we build a much higher value business later.”
At March 31, the company had $268.9 million of cash. Drury said the company may reach $1 billion of revenue in four to five years, saying it is much harder to get from nought to $100 million than to make the next step to $1 billion.
“We think somebody needs to create the Facebook sized company in small business, it could be us,” Drury said. “This is the biggest monetisable opportunity on the web. We feel confident. We think we have got a real shot at being that hugely global significant company.”
The company’s shares last traded at $19.90, compared with its 2007 initial public offering at $1 apiece, and a record high of $45.99 in March last year.
That's quite an extreme view that I haven't seen anyone espouse, so your interpretation of posts that are contrary to shareholders is far different from mine.
1) its a bit hard for a company that goes broke that has cash in the bank.[
2) there is a very big difference in saying a company is over valued & under performing compared to valuation, than its going broke.
Cheers Daytr
QUOTE=mikeybycrikey;570461]I've been travelling for a few days so haven't had a chance to contribute to this thread.
I find it interesting that there are still people out there that have absolutely no faith in the execution of Xero. This is a company that now has close to half a million customers, each paying about $30 per month for a service that they consider useful. Yet some commenters here are adamant that Xero is a house of cards that will come tumbling down and Rod Drury is a con artist.
I find the focus on profit by detractors to be very odd too. "Tell us when you'll make a profit?", they say.
If you can't see how it might be possible for Xero to be profitable if they were to have 2 million, 5 million, or 10 million customers, then clearly you consider Xero to be worthless and there is not point in even contributing to this thread.
Some people are treating Xero as if they have no plan at all for profit. That there is no possibility at all that they will ever make a profit. I don't subscribe to this opinion. I'm pretty sure there will be detailed modelling within Xero of the next few years as they grow the company and head towards profit. (Whether they survive that long is a different matter).
Looking through the annual results, I'm a little surprised by the big drop in the share price. There is nothing in here that was surprising to me, especially given the size of the Australian market was announced on 31/3. Of the five main markets, (NZ, Aus, UK, US, RoW), I correctly estimated the subscriber numbers in three of them, Xero announced Australia, and I should've revised down my UK figures given the Aus figures were lower than expected.
To put that another way, I would've expected the price to drop following the announcement of 200k Aus subscribers on 31/3 (I had estimated 217k) rather than with the Annual results. This obviously doesn't factor in the departure of the CFO which I do consider to be a problem and worthy of a price drop.
In terms of achieving profitability, there are three things Xero is spending money on: running the business, growing the software, and growing the customer base. Only the first of those expense groups relates to just the current year. I believe that growing the software and growing the customer base are expenses where the benefits will accrue over multiple years. They are investing for the future and it is acceptable to me that this should cause losses for now.
And finally, in response to Jantar who is complaining about the lack of tangible assets: this is a software business. Not a factory. Tangible assets don't matter at all. A software company like Xero can service 500,000 customers or 50,000,000 customers with the same amount of NTA. This is even more irrelevant, since (as far as I'm aware not being an accountant) isn't the software itself an intangible asset?
My current expectation is that Xero should be profitable in about 18 months. Growth is slowing a little quicker than I would like so profitability might take two to two and a half years. Getting growth ramped up in US and UK is important to justify the current SP and get to profitability.[/QUOTE]
I was headhunted to the CFO role at a large private enterprise in 1987 and left after three months. Any CFO worth his salt wants to see the company they're working for thrive and help the company become very successful.
The CEO was delusional, had extremely poor communication skills, an exasperating lack of financial discipline, (e.g. he airfreighted in the latest V8 Holden from Australia for goodness sake because he couldn't wait for normal shipping...back in 1987 the latest new release Holden was a big deal, my how times have changed lol), ruled with an iron fist on a divide and conquer basis e.t.c. Once inside and having had a good look at the systems, procedures and having obtained a through understanding of their business plan, if you could call it a plan, it was clear the group of companies was headed for a showdown with commercial reality. 1987 was a crazy time. 2001 was a crazy time in the tech world, history repeats.
Notwithstanding all the challenges of dealing with such an individual the main reason I left is I was sure this wasn't good for my career and I was virtually certain the company would go under in the medium term and sure enough it did less than eighteen months later. Just thought I'd share part of my early career story for what its worth.
"Stories" of people leaving because they don't have the right mind-set or didn't fit the culture of the organisation or didn't like travel are just a complete load of B.S. People don't sabotage their own careers without a profoundly good reason or three. I suspect many of the people hot on this stock weren't even born in 1987, were too young to invest in the tech wreck of 2000-2001.
Seems to me every generation that comes along forgets to bother to learn anything from history. Wakey, wakey, history repeats !!
MYOB float a great success. Got $3.65 a share
Market cap 2.1 billion .....less than Xero
http://www.smh.com.au/business/marke...01-1mxj2w.html
Heard this guy on TV tonite saying he has done well over the last 7 years and that surplus is no th far off. Hen another guy said he must be suffering from delusions (or something lie hat)
Thought it was Rod but then looked up it and it was Bill
Seems they both have the same strategy - keep borrowing (raising capital) and that surplus (profit) will come ....one day, be patient
Believe the story