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Xero Posts Positive EBITDA

Xero continues to make financial progress. It turned cash positive for the second half ended March 31, 2017. And for the half ended September 30, it reported EBITDA of about $14.7 million, compared to negative EBITDA of approximately $18 million in last's year's corresponding period.

One area of significant improvement was the improvement of gross margins by 5 percentage points to 80 percent, which stemmed from moving the platform to Amazon Web Services. Xero expects to continue margin improvement through economies of scale and automation.

"We are well on our way to rewiring how businesses work together, leveraging our investment in Amazon Web Services with Artificial Intelligence and Machine Learning to deliver a significant wave of new product," CEO Rod Drury said in a prepared statement.

The company ended the year with 1.2 million subscribers, up 337,000 over last year's first half. By contrast, rival Intuit had 2.4 million QuickBooks Online subscribers when its year ended on July 31, up about 870,000 over the prior year's figure.

Xero cut its net loss in half by 51.95 percent with the red ink dropping by 51.9 percent from a year earlier.

As it reported financials results this week, the New Zealand-based cloud Software Company said it would stop trading on the New Zealand stock exchange and rely exclusively on the Australian exchange. The delisting in New Zealand will take place on January 31.

Xero also said it has secured a stand-by debt facility of roughly $69.6 million to provide additional liquidity. However, the company has no plans to draw on thos funds.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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