Highlights

  • Xero increased H1 FY27 Operating Revenue 46% to NZD 1.75 bn as its payments Business expanded.
  • The company added 226,000 net customers, lifting its global base to approximately 5.15 million across markets.
  • Xero approved an on-market share buy-back of up to AUD 1 bn over the next 12 months.
  • Management raised FY27 revenue guidance to NZD 3.77–3.83 bn and adjusted EBITDA guidance to NZD 880–920 mn.

A bigger revenue base, rising customer numbers and an expanded payments offering have put fresh weight behind Xero Limited (ASX:XRO)’s FY27 ambitions. The accounting software company reported a 46% increase in operating revenue for the six months ended 30 September 2026 and announced an on-market share buy-back of up to AUD 1 bn. Its results also brought higher full-year guidance, placing operating performance and Capital management at the centre of the latest update.

Revenue Growth Meets an Expanding Customer Base

Operating revenue reached NZD 1.745 bn in H1 FY27, compared with NZD 1.194 bn a year earlier. On a pro-forma basis, incorporating Melio into the comparative period, growth was 27%. The distinction matters because Melio contributed a full six months to the latest period following its Acquisition in H2 FY26.

Customer numbers rose to 5.146 million, up 12% year on year, after 226,000 net additions. Average revenue per customer increased 25% to NZD 62.21, while annualised monthly Recurring Revenue climbed 41% to NZD 3.841 bn. These measures show that growth came from both a larger customer base and higher average customer spending.

Melio Reshapes the Earnings Picture

Adjusted EBITDA rose 3% to NZD 361.6 mn on a reported basis and 23% on a pro-forma basis. Free Cash Flow was NZD 238.1 mn, down 26% as reported but up 32% against the pro-forma comparison. Net profit after tax declined to NZD 18.5 mn from NZD 134.8 mn, reflecting the impact of including Melio for the full period.

The US business reported revenue of NZD 365 mn, up 536% as reported and 51% pro-forma. US customer numbers reached 455,000. Xero also reported pro-forma US payments growth of 62%, while its combined Australia and New Zealand operations delivered revenue of NZD 795 mn, up 20%.

A Billion-Dollar Capital Return Takes Shape

Alongside the results, the board approved an on-market share buy-back of up to AUD 1 bn, intended to run over 12 months. It follows a completed AUD 550 mn buy-back programme. The new programme is expected to begin on or after 13 November 2026, subject to share-price conditions and company discretion.

Xero held cash and short-term deposits of NZD 1.15 bn at 30 September 2026. The company said it intends to preserve balance-sheet strength while continuing to fund its strategic priorities. Its product development includes JAX, its AI platform, and XeroForce, which is being tested with accounting-practice design partners.

Higher Guidance Sets the Next Milestones

Xero now expects FY27 operating revenue of NZD 3.77–3.83 bn, compared with its previous NZD 3.62–3.73 bn range. Adjusted EBITDA is projected at NZD 880–920 mn, raising the bottom of its prior NZD 860–920 mn range. Management also sees an opportunity for FY28 revenue above NZD 4.6 bn, excluding revenue synergies.

Melio is still expected to reach adjusted EBITDA break-even on a run-rate basis in H2 FY28. These are stated targets rather than completed outcomes, with payments growth, operating efficiency and product adoption among the areas shaping execution.

Xero shares closed at AUD 75.17 on 12 November 2026, gaining 6.08% for the session. The stock traded between AUD 74.27 and AUD 80.02, with Volume of 2,210,628 shares.