• Xero reports 20% revenue growth, 42% increase in net profit
• Successful acquisition of Melio, a leading US SMB bill pay platform
• Continued investment in AI and mobile capabilities to enhance customer experience

Xero Limited (ASX: XRO) has delivered a strong result for the first half of the 2026 financial year (H1 FY26), reinforcing the company's ability to execute its strategy. Revenue increased 20% to $1,194 million, and the company achieved a greater than Rule of 40 outcome of 44.5% alongside significant cash generation. Xero has made key progress against its 3x3 strategy, including the successful early close of the acquisition of Melio, a leading US SMB bill pay platform. The company also continued to enhance its go-to-market (GTM) sales motions and focused on leveraging AI and mobile technology to reimagine financial management for its customers. Xero sees generative AI as a significant opportunity and has expanded the capabilities of its AI financial superagent, JAX, to automate tasks, provide actionable insights, and deliver a trusted partnership for customers. The company also continued to enhance its mobile experience, including the introduction of mobile bill capture with AI. Looking ahead, Xero is focused on integrating Melio and delivering its compelling value proposition to US customers, while continuing to build on its platform and deliver more intelligent capabilities across all markets.

Xero has outlined its FY28 aspirations, which include significantly accelerating US revenue growth and the opportunity to more than double its FY25 group revenue in FY28, excluding anticipated revenue synergies. The company also aspires to deliver greater than Rule of 40 outcomes for the group in FY28, including both expected revenue and cost synergies.

Xero remains focused on executing its strategy across its portfolio of regions and businesses, with a continued emphasis on helping to make life better for small businesses and their advisors. The company is confident in its ability to pursue the significant opportunity ahead and is committed to its aspiration to be a world-class SaaS business.