Cloud software company XERO FPO NZ (ASX: XRO) likes to remind investors of how many customers it has. It seems to be part of Xero's strategy to remain front-most in the mind of the market as well as to offer a quick skite about how rapidly its customer numbers are growing.
Today, Xero announced that it has reached a combined total of 400,000 subscribers in Australia and New Zealand, with over 150,000 in NZ, and Australia expected to reach 250,000 next week.
This represents an increase of 44% since 30 September 2014, when Xero had 277,000 customers throughout the ANZ region. Today, ANZ customers make up approximately 74% of the total number of Xero customers.
International growth story
Anybody buying Xero today does so for the company's future growth potential, since shares aren't exactly cheap on conventional metrics. Yet over the long term today's price of $14.60 could prove to be quite the bargain.
I'm biased though, as I recently quadrupled my holdings in Xero as I felt that the company was strengthening its competitive advantage and offers a bright – albeit risky – long-term future.
Much hinges on expansion in foreign markets and as investors can see from today's update, only 26% of subscribers come from outside the ANZ region. International customer numbers are growing faster than ANZ ones, but it will still be a while before Xero becomes a foreign income story.
In the meantime, while customer growth and recurring subscriptions continue it's definitely a stock to watch.
