By Stuart Condie
SYDNEY--Xero Ltd. is still some distance from worrying about market share because of the size of the untapped opportunity offered by the relatively immature cloud-accounting industry, Chief Executive Steve Vamos said.
Mr. Vamos said the New Zealand-based firm remained relatively sanguine about the competitive landscape despite slowing customer growth in the first half of fiscal 2021, which was characterized by coronavirus-generated volatility.
Of the 396,000 Xero subscribers added in the 12 months through September, 168,000 were added in the latter six months, which represents the first half of fiscal 2021. That was 26% lower compared with the second half of fiscal 2020, but Mr. Vamos said Xero was not worried customers were defecting to rival providers of small- and medium-sized business-accounting services.
"With the size of the opportunity we have and the low levels of penetration around the world, it's not something we spend a lot of time thinking about," Mr. Vamos told Dow Jones Newswires in an interview.
"It's quite a way off. The small-business application segment is one of the last significant frontiers for tech, so I think that it's a while before that becomes a critical perspective," he said.
Mr. Vamos said the existence of multiple providers' voices encouraged growth and awareness.
"We believe the penetration of cloud accounting in New Zealand at over 60% probably helped to the extent that we are seeing accountants and bookkeepers, who are late adopters or haven't adopted, now are very interested in coming on board," Mr. Vamos said.
"When you're in a market where a lot of your peers are using Xero and you know of Xero, the effects of Covid-19 drive more interest by later adopters."
Xero on Thursday reported a first-half net profit of 34.5 million New Zealand dollars (US$23.7 million), compared with a maiden NZ$1.3 million profit a year earlier. Revenue rose 21% on year to NZ$409.8 million.
Mr. Vamos said Xero would look at unwinding its fiscal 2020 price deferrals on a region-by-region basis, but did not give a timeline.
Its shares rose 0.6% to A$123.38.
Write to Stuart Condie at email@example.com
(END) Dow Jones Newswires