Monday, October 13, 2014

Xero will hire 500 more staff / "Xero is the fastest growing - publicly-listed 'software as a service' (Saas) company in the world," CEO Rod Drury said.

Tom Pullar Strecker for writes: Cloud accounting company Xero is likely to take on at least another 500 staff over the coming 12 months, chief executive Rod Drury says.
The forecast came as the company's shares dropped a further 7 per cent to a new annual low of $17.80 in morning trading on the NZX. Volumes were moderate with nearly 90,000 shares changing hands by 11am.
The drop put its shares 35 cents below the price at which Xero raised $180 million from United States and Kiwi investors in a landmark capital raising a year ago.
Drury would not comment on one analyst's suggestion that the company's losses might now be peaking, saying it had not issued any annual guidance.
Xero said on Thursday that it expected its loss for the six months to the end of September would come in at about $25m and Forsyth Barr analyst Blair Galpin is forecasting an annual loss of $50m.
A defiant Drury said Xero was "nailing its strategy" and US investors were still telling him to go for growth.
Xero's workforce has now topped 1000 and Drury said that while the rate of increase in its staff numbers would slow in percentage terms, he expected the Wellington-based firm would take on at least another 500 employees over the coming 12 months.
"We would love to hire as many of those as possible in New Zealand because there is a cost advantage, especially for development staff," he said.
"The thing no-one has picked up on is passing US$100m in annualised monthly revenue at an 85 per cent growth rate puts us at the very top end - if not the fastest growing - publicly-listed 'software as a service' (Saas) company in the world," Drury said.
"Xero is on a different trajectory to 'enterprise' Saas companies in the past, whose growth has tended to slow. We don't see any real barriers to growth in the future."
Xero's share price has come under pressure partly because Thursday's half-yearly trading update showed it had only won 4000 net new customers in the United States during the six months to September 30.
But Drury said it was disappointing people were focusing on that.
"We have been very clear the US will take a while, so we have executed our strategy of getting Australia and Britain into our growth engine," he said.
"We have done exactly what we said we were going to do.
"Because we are a global business, what I need to do is make sure we keep hitting that growth rate, which is why we are very focussed on Australia and Britain.
"Do we have to prove ourselves in the US? Yes, absolutely, which we will do over time."
Xero had released a big update to its cloud accounting software this morning adding a host of requested features, he said, and had a lot more big features coming by the end of the year.
"It feels like we are starting to sail away now in terms of functionality," he said.
"We are just machining this stuff out now."