Daily Roundup

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Xero Reports Strong FY26 Results, Accelerating US Growth

Xero Limited (ASX: XRO) has delivered a standout performance in the 2026 financial year, reporting a 31% increase in revenue to NZ$2.8 billion and an 18% rise in adjusted EBITDA to NZ$757 million. The company's 3x3 + AI strategy is firing on all cylinders, with the US market emerging as a key growth driver.

Xero saw a significant acceleration in its US operations, adding 110,000 new customers, including those from the Melio direct payments acquisition. This propelled the company's pro-forma revenue growth in the US to a remarkable 50%. Xero's innovative use of AI is powering enhanced customer value and operational excellence, positioning it as a long-term winner in the age of artificial intelligence.

The company's focus on disciplined capital allocation and operational efficiency has delivered consistent returns, with a Rule of 40 metric of 48.5%. Xero's balance sheet remains strong, with available liquid resources of NZ$1.9 billion to fund future growth initiatives.

Looking ahead, Xero expects to maintain its strong financial performance, with revenue growth and adjusted EBITDA margin in line with its FY25-FY27 strategy. The company is well-positioned to capitalize on the ongoing digital transformation of small businesses globally, with its innovative 3x3 + AI strategy driving growth across its key markets.

Megaport Secures Major Compute, Network & Storage Contracts

Megaport Limited (ASX: MP1), a leading global automated infrastructure platform, has announced a significant contract win. Its wholly owned subsidiary, Latitude.sh, has secured three major GPU, CPU, network, and storage contracts across two customers, with a combined total contract value of approximately USD$182.9 million (AUD$254.0 million).

These long-term, fixed-term contracts represent around USD$65.2 million (AUD$90.6 million) in Annualised Recurring Revenue (ARR) for Megaport. The combination of Megaport's foundational network infrastructure automation and Latitude.sh's compute and storage capabilities has created a powerful global automated infrastructure platform, enabling the company to pursue and secure new value-accretive opportunities.

Megaport reaffirms its FY26 revenue and EBITDA guidance and expects to fund the incremental capital expenditure of USD$101.0 million (AUD$140.3 million) through a mix of existing cash reserves and a newly-upsized debt facility.

Bapcor Provides Turnaround and Trading Update

Bapcor Limited (ASX: BAP) has reported improved sales momentum across all its business segments in the February to April 2026 period, compared to the prior comparative period. This turnaround comes after the company experienced declines across all segments from July 2025 to January 2026.

However, trading conditions have deteriorated since late March 2026 due to the Middle East conflict and rising interest rates. As a result, Bapcor has revised its FY26 earnings guidance, now expecting underlying EBITDA of AUD$144 million to AUD$150 million (post AASB16) and AUD$62 million to AUD$68 million (pre AASB16).

To address the challenges, Bapcor is implementing initiatives to strengthen its competitiveness and improve performance, including enhancing profitability, optimizing costs, improving capital efficiency, and returning to growth. The company is confident these measures will demonstrate positive results, as evidenced by the recent sales momentum.

Kingsgate Acquires Royalty and Water Rights at Nueva Esperanza

Kingsgate Consolidated Limited (ASX: KCN) has announced the acquisition of the royalty and water rights for its Nueva Esperanza Silver-Gold Project in Chile. The transaction eliminates US$2 million in annual pre-production royalties, removes the 5% NSR royalty over Esperanza and the 3% NSR royalty over Arqueros, and secures long-term water rights, removing US$0.8 million in annual payments.

Kingsgate believes this acquisition significantly enhances the value and development potential of the Nueva Esperanza project. The company is now focused on accelerating key technical workstreams to optimize the project's development pathway, including assessing the potential for heap leach processing, which could reduce capital intensity and accelerate the timeline.

oOh!Media Provides Strategy and Trading Update

oOh!Media Limited (ASX: OML) has provided a strategy and trading update, reporting Q1 revenue growth of 7% in Australia and 4% for the group, slightly ahead of previous projections. The company has launched an Operational Excellence program, which is expected to deliver AUD$12 million in annualized pre-tax savings from FY27.

However, oOh!Media's 1H gross margin will be softer than anticipated, driven by industry-wide pressure on Billboards. The company expects underlying adjusted opex for 1H to be slightly lower than the prior corresponding period, with one-off costs of around AUD$6 million to deliver the targeted savings.

Looking ahead, oOh!Media expects CY2026 capex to be between AUD$45 million and AUD$55 million, with gearing at or below 1.0X. The company remains positive about the structural growth in the Out of Home sector and is confident in its strategy to cement its market leadership position.