• 23% YOY revenue growth to $2.1B, with all large markets contributing
• Adjusted EBITDA of $641M, up 22% YOY
• Rule of 40 outcome of 44%, reflecting continued investment with discipline

Xero Limited (ASX: XRO) reported strong financial results for FY25, with revenue growing 23% YOY to $2.1B and Adjusted EBITDA increasing 22% YOY to $641M. The company's Rule of 40 outcome of 44% demonstrates its ability to deliver disciplined capital allocation and continued investment. All of Xero's large markets, including Australia, New Zealand, the UK, and North America, contributed to the strong growth. Subscriber numbers grew 22% YOY to 4.41M, while ARPU increased 15% YOY to $45.08. The company's payments revenue grew 65% YOY, reflecting growth in total payment value and changes to partner unit economics. Xero maintained a strong balance sheet, with a net cash position of $683M at the end of FY25. The company remains focused on its 3x3 strategy, with continued investment in product design and development to drive product velocity. Xero is aspiring to double the size of its business and deliver Rule of 40 or greater performance in the future, underpinned by disciplined capital allocation and a 'Build, Partner or Buy' approach.

Xero expects its FY26 operating expenses to be around 71.5% of operating revenue, with the ratio expected to be higher in H1 FY26 versus H2 FY26 due to the phasing of non-recurring remuneration impacts, Xerocon Brisbane, and other planned investment spend.

Xero is aspiring to double the size of its business and deliver Rule of 40 or greater performance in the future, underpinned by disciplined capital allocation and a 'Build, Partner or Buy' approach. The company remains focused on its 3x3 strategy, with continued investment in product design and development to drive product velocity.