XRO v intuit

I have been tracking Xero versus Intuit for a number of years.

QB has consistently reported things differently from quarter to quarter to embellish their results.

Two clear trends have emerged over this time:

1) Xero is consistently taking aware market share from QB as a whole (when accounting for cannibalisation from desktop which is now accelerating)- now at close to 40% market share

2) Xero has better quality customers- on a revenue basis, after adjustment for currency Xero is now at 43% of QBO.  This must be particularly concerning for QB given that Xero's key markets have largely undergone the transition to cloud accounting whereas the US still is under-penetrated.

This is the easiest investment in the world. It is like a series of dominoes- and what is happening in one place will happen in another and so forth for many many many more years to come.  When I first invested a few years ago- I was investing under the assumption that growth would be 30% for at least 5 years- 3-4 years on, we are at 37% annual revenue growth, with no end in sight without the added bonus of excess free cashflow which can be invested in the underlying business and bolt on strategic acquisitions...

For the next 3 years we have UK and US market penetration and growth in adjacencies in Australia/NZ as well as Singapore/Hong Kong/South Africa to get us that growth. Thereafter they have flagged multi-language and natural movement in UK/US and the above into the adjacencies...

In my mind this is one of the best investments in the world, but only at a fair price unfortunately...