XRO.ASX: FY26 Annual Results Market Release

FY26 Annual Results Market Release

Stock	Xero Ltd (XRO.ASX)
Release Time	14 May 2026, 8:09 a.m.
Price Sensitive	Yes

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Xero delivers strong FY26 results, accelerating US growth

Key Points

$2.8 billion in revenue, up 31%, with 18% adjusted EBITDA growth
Accelerating US growth with 110,000 new customers, including Melio direct payments customers
Positioned as an AI winner, with AI powering customer value and operational excellence

Full Summary

Xero Limited (ASX: XRO) today reports its full year earnings to 31 March 2026 (FY26). The results reinforce Xero's strong track record of delivering robust growth and financial performance through effective strategic execution. Xero's strong operating results included operating revenue growth of 31% (28% in constant currency) to $2.8 billion and an operating expense to revenue ratio of 70.5%, excluding Melio-related transaction costs. This supported a solid 18% increase in adjusted EBITDA compared to FY25, to $757.4 million, with EBITDA of $789.5 million. Xero also generated free cash flow of $554.0 million. Xero's 3x3 strategy is hitting its stride, demonstrated by accelerating US growth with 110,000 new customers, including new Melio direct payments customers, and pro-forma revenue growth of 50%. Xero is pioneering the future of SMB finance with its trusted financial operating system for the AI era and is well positioned to be a long-term AI winner. Xero is already delivering AI-powered innovation, including Just Ask Xero (JAX) and AI-powered smart document capture. Xero is also announcing XeroForce, a natural language custom AI agent builder for the financial workflows of accountants, bookkeepers and small businesses.

Guidance

Operating revenue is expected to be between $3,620 million and $3,730 million. Adjusted EBITDA is expected to be between $860 million and $920 million. This includes incremental US brand spend of up to ~NZ$55 million. Xero expects a higher than historical weighting of Adjusted EBITDA to be delivered in the second half of FY27.

Outlook

Xero outlined its FY28 aspirations as part of the acquisition of Melio, which include significantly accelerating US revenue growth and the opportunity to more than double its FY25 group revenue in FY28 excluding anticipated revenue synergies. This is expected to support Xero's aspiration to deliver greater than Rule of 40 outcomes for the group in FY28.