Go Xero!! We love Xero in at Slater Chartered Accountants and we've been with them for years now. That's because we do our research and we knew it was the way forward in accounting. We're proud of that. We're even received the Platinum partners award and we're one of the smallest firms to achieve that status! Here's a it of info that may give you some insight into this new program. Cloud based accounting vendor Xero has become New Zealand’s second largest public listed company. Its market capitalisation has surpassed Auckland International Airport of $4.7 billion, Telecom of $4.24 billion and only behind Fletcher Building of $6.7 billion. Meanwhile, it is anticipated by a New Zealand broking firm to grow to a $10 billion NASDAQ company within five years. Its share price has increased dramatically from $1 each at its IPO registration to $37.7 as on 6 Nov, 2013. Further, according to the company’s 2013 annual report, its revenue has increased significantly from $9.3 million in 2012 to 39 million along with the increase of its paying customer from 78,000 to 157,000 over the last year. With a major focus on growth supported by $200 million NZD in the bank and no debt, Xero is on its way to create long-term share holder value by building a global software as a service (SaaS) company. SaaS is different from other revenue recurring revenue businesses as the revenue for the service is generated over an extended period which is the customer’s lifetime. That is, if a customer is happy with the service, they will stick around for a long time and therefore, the profit that can be made from the customer will increase substantially. However, SaaS businesses such as Xero face significant financial challenges in the early years. This is reflected in a sense that they have to invest heavily upfront to obtain customers and recover the profits of that investment over a long period of time. Many investors have difficulties understanding the nature of a SaaS business and want to hit the brakes at precisely moment when they should be hitting the accelerator.
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