What Did Xero's (ASX:XRO) H1 FY27 Results and $1 Billion Buy-Back Signal About Growth?

Sonal Goyal

12 November 2026 11:33 AM AEDT

What Did Xero's (ASX:XRO) H1 FY27 Results and $1 Billion Buy-Back Signal About Growth?

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Key Highlights

Revenue rose 46 percent to $1.7 billion for H1 FY27, or 41 percent in constant currency, with Melio included for the first time.
Adjusted EBITDA increased 3 percent to $362 million, while pro forma adjusted EBITDA rose 23 percent.
Free Cash Flow was $238 million, up 32 percent on a pro forma basis.
The board approved an on-market buy-back of up to A$1 billion over the next 12 months, and the company upgraded its FY27 outlook.

Xero Limited (ASX:XRO) has reported its half-year results to 30 September 2026, with a market release dated 12 November 2026. The company reported Revenue of $1.7 billion, growth of 46 percent or 41 percent in constant currency, and upgraded its FY27 outlook. The board also approved an on-market share buy-back of up to A$1 billion over the next 12 months. Figures are presented in New Zealand dollars, and comparisons are against H1 FY26.

Growth and the Melio effect

Revenue growth was driven by customer growth and higher average revenue per customer across all markets, along with continued payments growth. The inclusion of Melio, acquired by Xero, lifted reported revenue and tempered the reported growth in adjusted EBITDA. The company presents pro forma figures to show the underlying performance with Melio included in both periods.

Operating expenses fell to 68.9 percent of revenue, an improvement of 8.1 percentage points. Adjusted EBITDA, which excludes one-off and non-cash Revaluation items, rose 3 percent to $362 million. On a pro forma basis, adjusted EBITDA was up 23 percent.

Cash flow and capital

Free cash flow was $238 million, up 32 percent on a pro forma basis. The company says its Balance Sheet supports the buy-back program. The buy-back is in addition to its outlook upgrade and is designed to be completed over the next 12 months.

Final Word

Xero's results combine rapid reported revenue growth with a smaller increase in adjusted EBITDA, largely because of the Melio acquisition. The pro forma measures present a more favourable picture, but investors will need to consider how the buy-back, the outlook and the Acquisition integration play out over the coming periods. The company's operating efficiency gains and cash flow growth will be central to that assessment.

FAQs

Q: How much did Xero's revenue grow?

A: Revenue grew 46 percent to $1.7 billion, or 41 percent in constant currency.

Q: What is the size of the buy-back?

A: The board approved an on-market buy-back of up to A$1 billion, to be completed over the next 12 months.

Q: Why did adjusted EBITDA grow less than revenue?

A: The reported growth was tempered by the inclusion of Melio in H1 FY27, while pro forma adjusted EBITDA was up 23 percent.

Q: What currency are the figures in?

A: The figures are presented in New Zealand dollars, with comparisons against H1 FY26.

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