This was contrasted with Xero which reported customers were up 67 per cent year on year, subscription revenue up 81 per cent and annualised revenues were up 71 per cent year on year - with a net loss of $NZ69.5 million. We all know what happened when that was announced.
Amazon, despite being a massive business with a market cap of $200bn+ - is still a growth company. And the managers continue to show a willingness to put long term growth ahead of short term profits. I can't imagine a company like that getting any support here in the land of Oz.
In contrast, Xero while dominant in AUS/NZ - is the upstart in the UK/US. It must spend a lot to grow. It's advantage is that it started off in the cloud, but that head start can be quickly eroded by the much much bigger incumbents in those local markets. I can see that already happening in the U.S with Intuit which is a concern.
Xero is a business that is impacted heavily by network effects, so growth must be the number one priority. If they put profits ahead of growth anytime in the next five years (or possibly even ten), I'll be dumping my shares. For now though, I think they have their priorities right.
XRO Price at posting:
$16.00 Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)