Xero CEO says the fintech company will start breaking even 'over the next year or two'

Xero CEO Rod Drury. Image: Supplied.

Xero has cut the cash flowing from the company and maintained subscriber and revenue growth as the cloud accountancy business heads to break even.

A short time ago, Xero shares were up 3.6% to $16.66.

The subscription software business today posted a 48% rise in half year operating revenue to $137.2 million.

This brought the business to a run rate of $300 million in annualised revenue, almost a third of the way to its $1 billion target.

Subscribers numbers are now 862,000, a 45% jump on a year ago.

The net loss after tax for the half year is $43.9 million, almost the same as the $44.3 million in the same period last year.

However, the cash bleed is slowing. Operating cash outflow fell to $13.4 million from $23.4 million.

“Our focus is to build a sustainable global business with high margins, while managing our cash,” says Xero founder and CEO Rod Drury.

“Our revenue growth has allowed us to continue the significant investment in our platform, back-office and team to support our global footprint.”

Asked when the company would hit a break even point, he told Business Insider: “Certainly over the next year or two.”

He says the company is now focusing on new revenue opportunities, and more from each customer.

“This year we reduced our cash usage, pleasingly, but we still had a lot of double expenses without our platform migration (to Amazon Web Services),” Drury told Business Insider.

“Over the next half, what we want to show is a significant reduction in cash usage and people can see us tracking towards that.

“We are an interesting hybrid. We are driving towards break even but we are still investing for massive growth.”

Subscribers grew in Australia and New Zealand by 39% to 592,000 in the year to September.

In the UK, subscribers grew 61% to 164,000 and in the UK by 64% to 77,000.

Here are the half year results in detail:

Source: Xero

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