The accounting software provider saw its net loss widen to $NZ28.6 million, up from $NZ19.6 million from the previous year.
Xero added 193,000 subscribers in the six months to 30 September 2018, taking total subscribers to 1.579 million.
Total operating revenue also grew by 37 per cent to $NZ256.5 million, with cashflow from operating activities increasing to $36 million, up from $15.1 million in H1 FY2018.
“Xero’s half year results demonstrate strong top and bottom line results with significant improvements in cash flow margins and average revenue per user,” said Xero chief executive Steve Vamos.
“We remain focussed on disciplined execution of our strategy to drive growth while improving financial outcomes through operating efficiencies.
“Xero is very well positioned to take advantage of organic growth opportunities and following the completion in October of our US$300 million convertible notes issue, we have the financial flexibility to target complementary acquisitions and investments.”
Subscribers in Australia and New Zealand grew by 24 per cent to 981,000, with the software company on track to hit the 1 million subscriber milestone in the region.
Xero has embarked on a number of significant initiatives in the first half of the 2019 financial year, including the acquisition of Hubdoc for US$60 million in August – consisting of about 35 per cent cash and 65 per cent in Xero equity, and the partnership with US payroll provider, Gusto.
Xero had earlier announced a price hike on all plans apart for those on standard, starter, and partner plans, beginning from 28 September 2018.
According to Xero managing director Trent Innes, the price change “reflects a rising cost to serve larger employers on a per-employee basis.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.