Xero highlights global AI and US growth opportunity
| Stock | Xero Ltd (XRO.ASX) |
|---|---|
| Release Time | 3 Feb 2026, 8:36 a.m. |
| Price Sensitive | Yes |
Xero highlights global AI and US growth opportunity
- Xero is well positioned to capture the global AI and US accounting plus payments TAM
- Xero has a clear AI strategy focused on four key pillars to deliver benefits to customers
- Melio is expected to reach Adjusted-EBITDA breakeven on a run-rate basis in H2 FY28
Xero Limited (ASX: XRO) is hosting an investor briefing to provide further details on its global AI and US payments opportunities. The session will feature product demonstrations in both areas, including Xero's multiple AI agents operating under JAX on Xero.com and Melio's multi-channel payments offerings. Xero is well positioned to capture the global AI and US accounting plus payments TAM, with a clear AI strategy focused on four key pillars: get help, get time back, manage their business smarter, and unlock new business growth. Xero has a critical role to play in helping SMBs realize the promise of AI by moving beyond a system of record to a system of action and decision making, leveraging its unique position of strength and foundational advantages. Xero has also provided additional guidance on Melio, which is expected to reach Adjusted-EBITDA breakeven on a run-rate basis in H2 FY28. Xero reiterates its existing FY26 guidance, with total operating expenses as a percentage of revenue expected to be around 70.5%. Xero will transition to providing forward guidance on an Adjusted-EBITDA basis at its FY26 results announcement in May 2026, and will also provide a one-off FY27 revenue growth range guide.
Melio is expected to reach Adjusted-EBITDA breakeven on a run-rate basis in H2 FY28. Xero's FY26 Outlook includes Melio, with total operating expenses as a percentage of revenue expected to be around 70.5%.
Xero re-affirms its FY28 aspirations, including that the combined business is expected to significantly accelerate US revenue growth and give Xero the opportunity to more than double its FY25 group revenue in FY28 excluding anticipated revenue synergies. This outcome is expected to support Xero's aspiration to deliver greater than Rule of 40 outcomes for the group in FY28.