Shares in cloud-based accounting software business Xero have dropped 10 per cent after the company's full year loss almost doubled.
Xero, which provides accounting software for small businesses, made a full year loss of $NZ69.5 million ($A67.9 million) in the year to March 31, up from a $NZ35.5 million loss a year ago, despite lifting operating revenue from $NZ70 million to $NZ123 million.
Investors punished the company for the result, with its Australian share price dropping $2.33, or 10.3 per cent, to $20.32.
The New Zealand based company, dubbed "the Apple of accounting" by Credit Suisse, has been a market darling in recent years, with its market value stretching beyond $A3 billion despite never posting a profit.
Xero expanded its paying customer base by 67 per cent to 475,000 during the year as it continued to ramp up its global expansion, with subscription revenue from Australian customers more than doubling.
But the strong revenue growth was offset by a sharp increase in marketing and product design costs.
The company has an estimated 31 per cent market share in New Zealand, along with more than 200,000 customers in Australia and is making a play for both the US and UK markets.
Xero chief executive Rod Drury said the company expects to continue to grow strongly in 2016.
"We are very excited about FY16 and expect strong growth to continue in all our core markets for the foreseeable future," he said.
The company's growth in Australasia has put up a challenge to the traditionally dominant MYOB, which is due to re-list on the ASX in the coming months after being bought out by a private equity firm in 2009.
* The reporter owns shares in Xero.
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