Key highlights

  • Xero shares closed at $75.17 on 12 November 2026, up 6.08%, while the S&P/ASX 200 eased 0.07%.
  • H1 FY27 Operating Revenue rose 46% to NZ$1.7 billion, with 226,000 net new customers taking the total to 5.1 million.
  • The board approved an on-market buy-back of up to A$1 billion over 12 months, and FY27 revenue and adjusted EBITDA guidance were lifted.

Shares in Xero Limited (ASX:XRO) closed at $75.17 on 12 November 2026, up 6.08% on the session. The S&P/ASX 200 closed at 9,146.80, down 0.07%. Xero is a global small Business platform for accounting, Payroll and payments, registered in New Zealand. Its latest update was its half-year results to 30 September 2026, released on 12 November 2026, the same day as the share close. All figures below are in New Zealand dollars unless stated.

Revenue and customers

Operating revenue rose 46% to $1.7 billion, or 41% in constant currency, with the Melio Acquisition contributing for the first time in H1 FY27. Annualised monthly Recurring Revenue grew 41% to $3.8 billion. Xero added 226,000 net new customers, taking its total to 5.1 million, and average monthly churn was 1.19%, with underlying churn at 0.83%.

Profit and cash flow

Adjusted EBITDA rose 3% to $362 million, and 23% on a pro-forma basis. Free Cash Flow was $238 million, down 26% on a reported basis but up 32% pro forma. Statutory net profit after tax fell to $18.5 million from $134.8 million, reflecting a full six months of Melio and non-cash items. Adjusted NPATA was $81.1 million on a pro-forma basis.

Upgraded FY27 outlook

Operating revenue guidance for FY27 is now $3.77 billion to $3.83 billion, up from $3.62 billion to $3.73 billion, largely reflecting stronger Melio payments performance and a weaker NZD. Adjusted EBITDA guidance is $880 million to $920 million. Xero now expects a pro-forma Rule of 40 outcome of around 40% for FY27, and sees FY28 revenue opportunity of more than $4.6 billion, excluding revenue synergies.

Buy-back and balance sheet

The board approved an on-market buy-back of up to A$1 billion over the next 12 months, in addition to a recently completed A$550 million program. The buy-back includes an amount intended to offset dilution from expected FY28 share-based compensation. Cash and short-term deposits were $1.15 billion at 30 September 2026. The buy-back is expected to commence on or after 13 November 2026.

Melio and AI

Melio is currently loss-making, and Xero expects it to reach adjusted EBITDA breakeven on a run-rate basis in H2 FY28. Xero also highlighted AI adoption among small businesses and accountants, with its JAX agentic platform and the Xforce service for accounting firms in Beta with design partners in Australia, New Zealand and the UK.

Sector context

Xero operates in cloud accounting and small business software, where growth depends on customer additions, average revenue per customer and the ability to add payments and AI features. Its three largest markets are Australia, the UK and the US, with US revenue growing sharply following the Melio and Gusto payroll launches. The broader ASX 200 eased slightly on 12 November.

Risks and limitations

Melio remains loss-making, and statutory Earnings were well below the prior period. The company says its guidance has a higher second-half weighting. The buy-back is subject to prevailing share price and market conditions and will be executed at the company's discretion. Revenue guidance also benefits from FX movements, which can reverse.

What to watch ahead

Investors will watch the start of the buy-back from 13 November 2026, delivery against second-half adjusted EBITDA guidance, Melio's progress toward breakeven, and the development of Xforce and AI-led pricing.

Closing thoughts

Xero shares finished the session up 6.08% at $75.17 on the day of its half-year result. The company reported higher revenue and customer numbers, an upgraded outlook and a sizeable buy-back, while statutory earnings were held back by the Melio consolidation.