Xero on target with sales up 81pc

XERO maintained its growth rate in the final three months of last year, according to its latest quarterly cash-flow report.

The Wellington-based cloud software firm said sales in the quarter were up 81 per cent on the same quarter in 2013 at $32.5 million, which was in line with its financial guidance.

Xero burned through $22.9m of cash during the quarter, up slightly from $22.6m during the same period in 2013, ending 2014 with $147.8m in cash and equivalents.

Its net operating cash outflow was $8.5m, compared with $9.6m in the September quarter.

Xero shares rose 0.7 per cent to trade at $15.75 in the wake of the announcement.

Woodward Partners analyst Nick Lewis said the report revealed nothing unexpected, although the fact Xero had maintained 80 per cent revenue growth was positive.

Assuming no changes in its cash-burn rate, Xero had to be looking at raising fresh capital in about a year, which meant preparing in about six months’ time, he said.

Xero has signalled its intent to list in the United States this year, but has downplayed the likelihood of it needing more cash from investors.

Lewis speculated that most of the revenue growth in the December quarter would have come from Australia and Britain.

Xero’s year-end figures, which will be released in about two months, would be critical, he said.

‘‘They will either support, or not support, a US listing.’’