As with its recent full-year report, Xero's cash burn, lack of profitability and penetration into the crucial United States market remains at the forefront of analysts' concerns.
While 8-year-old Xero reported revenue up 77% to $123.9 million, it posted a 96% increase in after-tax losses at $69.5 million and clocked up $20 million more in expenses than expected.
For its full-year-to-March result, released in April, Xero maintained about $269 million cash in hand.
Xero's chief executive, Rod Drury, said the company recently surpassed the ''significant milestone'' of gaining half a million subscribers to its global online accounting software platform, with customers now in more than 180 countries.
''Xero is delivering on its growth plans, and is the cloud accounting market leader in New Zealand, Australia and the United Kingdom,'' Mr Drury said in yesterday's market update on subscribers.
Xero's shares were unchanged at $20.40 following yesterday's announcement, and down 32%, or $9.66, during the past year.
Craigs Investment Partners broker Peter McIntyre said while Xero had delivered ''exceptional growth'', two-thirds was driven by New Zealand and Australian sales, which were finite markets.
''For investors to earn acceptable returns, Xero needs to replicate its success in the United Kingdom and the US,'' he said.
He reiterated that in building customers Xero had had to ''ramp up expenses'' which was outweighing profitability and ''they have to strike a balance, sooner or later'' to maintain investor interest.
Forsyth Barr broker Suzanne Kinnaird said while 500,000 customers was ''a great milestone'', Xero's value remained tied to the United States.
She noted there was no by-country breakdown of the growth by Xero in its statement yesterday, and she expected full-year 2016 growth would primarily come from Australia, and to a lesser extent, the UK.
''The United States is still a developing market,'' Ms Kinnaird said.
The 500,000 subscribers was up from 475,000, as at March, and Ms Kinnaird said Xero needed to ''further accelerate growth'' to hit Forsyth Barr's forecast 700,000, to the year-end at March 2016.
The company has also announced several partnerships which it hopes will eventually develop into more connections.
''The key however is converting these relationships to paying subscribers in the US. We wait to see this,'' Ms Kinnaird said.
Mr McIntyre maintains a ''sell'' recommendation on the stock. Ms Kinnaird was unchanged at ''underperform''.
Mr Drury said Xero had delivered strong revenue and customer growth in all markets during its 2015 financial year, and grew its subscription revenue by 81% to $120.9 million, and already this year it had released more than 380 new features and updates.
