Xero braces itself for "mind-blowing" 2014 and beyond...
If you’re not moving forward, you’re standing still, or even going backwards, as the saying goes.
While such a phrase may take a front page slot in that worn-out book of old business cliches, at Xero HQ, it may as well be company wallpaper.
“We want to blow people’s mind in the next few years as we get to a million customers and beyond,” says Rod Drury, CEO, Xero.
Built on the foundations of long-term growth, Xero’s numbers show the company as the biggest online accounting software provider in the country.
“The speed that the New Zealand market is changing is phenomenal,” says Drury, who founded the company on 2006.
“When we started MYOB said it had 70,000 customers. We're now at over 90,000 and around half our customers have jumped ship from other solutions. So we’re well ahead and in a strong position.”
Given Xero’s dominance in the New Zealand market, Drury, speaking to IT Brief, believes this helps the business excel in other regions, most notably the UK and US.
“We’ve had great results in New Zealand and Australia - we’ve made sure our businesses across the ANZ region have delivered, and will continue to deliver which allows us to turn our focus to the US market this year,” he says.
The critics may say Xero’s fighting on too many fronts but unsurprisingly, Drury would disagree.
“We’ve got great management teams in each country and they are independently generating very encouraging results,” he says, alluding in part to the recent hiring of Telecom and Chorus stalwart Victoria Crone.
“The reason for getting Victoria on board is due to the growing interest in connecting large and small businesses and business to Government.
“Our aim is to make New Zealand the greatest country in the world for business connectivity.”
Currently employing over 650 staff across four markets, New Zealand, Australia, the UK and the US, Drury says the relatively small workforce is a testament to how resourceful Team Xero is, considering the company’s significantly smaller headcount than the incumbents like MYOB, Sage and Intuit.
After focusing the company’s energies on building senior leadership teams around the world, this year Xero plans to use that huge horsepower to drive the business forward.
“We believe the groundwork put in during 2013 can help us achieve this,” Drury says.
“We’ve started with a very clean platform and unencumbered business and shown we can hire the best staff across the world, which can only be a huge positive for the company.”
Only last week Xero announced operating revenue of $70.1m for the year ended 31 March 2014, up 83% up from last year’s $38.4m result.
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).
“It’s certainly all systems go across the company and we’re not resting on our laurels,” Drury adds.
“Of course we want to turn a profit as quickly as possible but for us, it’s about building a company and growing our team and resources.
“We doubled our team last year but we probably won’t do that this year because it’s just too difficult to hire such talent at that rate.”
But until the company gets to break even, Drury acknowledges there is still an enormous amount of pressure as a New Zealand listed business.