Xero’s cash burn accelerates as costs run ahead of sales
Cashflow statement shows it was sitting on $68.8m of cash as at June 30, down $9.4m from three months earlier.
Cloud-based accounting firm Xero burned through more cash last quarter as rapid expansion saw wages, advertising and marketing payments run ahead of sales.
The Wellington-based company's cashflow statement shows it was sitting on $68.8 million of cash as at June 30, down $9.4 million from three months earlier. It used $6.57 million in the first quarter of the year.
Xero is chasing sales growth in lieu of profits, with an aspirational target of one million customers worldwide, from 157,000 as at March 31.
In the latest quarter, receipts from customers rose to $12.97 million, from $11.4 million three months earlier. Staff costs climbed to $10 million from $6.9 million and advertising and marketing rose to $2.1 million from $881,000.
That resulted in negative operating cashflow widening to $4.4 million from $2.5 million in the first quarter.
The company has ample cash to continue to pursue its growth plans. At the second-quarter burn rate, it could continue to fund its operations for at least seven more quarters without having to seek additional funding.
The shares [NZX:XRO] slipped 1.1 percent to $17.31 on the NZX today and have soared 130 percent this year.
The company went public in 2007, selling shares in an initial public offering at $1 apiece.
(BusinessDesk)
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Xero’s cash burn accelerates as costs run ahead of sales
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