By Digifin Pty Ltd · About this coverage
Key Points
- Operating revenue up 46% (41% in constant currency) to NZ$1.7 billion in H1 FY27
- Adjusted EBITDA up 3% to NZ$362 million, or 23% on a pro-forma basis including Melio
- FY27 operating revenue guidance raised to NZ$3,770 million to NZ$3,830 million
- On-market buy-back of up to A$1 billion to be completed over the next 12 months
- Melio expected to reach adjusted EBITDA breakeven on a run-rate basis in H2 FY28
About Xero (ASX:XRO)
Xero Limited is a New Zealand incorporated software company headquartered in Wellington and listed on the ASX. It provides cloud-based accounting and business software for small businesses and their accountants and bookkeepers, including invoicing, payroll, bank reconciliation and payments tools.
Xero (ASX:XRO) released its first-half FY27 result, the first half to include a full six months of Melio, together with an upgraded FY27 outlook and an on-market buy-back of up to A$1 billion over the next 12 months.
Figures are in NZD unless stated. Operating revenue grew 46% (41% in constant currency) to $1.7 billion, or 27% on a pro-forma basis that includes Melio's H1 FY26 results. Adjusted EBITDA increased 3% to $362 million and 23% on a pro-forma basis. Free cash flow was $238 million, down 26% as reported and up 32% pro-forma, and NPAT fell 86%. Xero added 226,000 net new customers to 5.1 million, average revenue per customer rose 25% to $62.21, and annualised monthly recurring revenue grew 41% to $3.8 billion. FY27 operating revenue is now expected to be between $3,770 million and $3,830 million, up from $3,620 million to $3,730 million, which Xero attributes largely to stronger Melio payments performance and an FX benefit from the weaker NZD. Adjusted EBITDA is expected to be between $880 million and $920 million, from $860 million to $920 million. The buy-back is in addition to the recently completed A$550m program and is expected to commence on or after 13 November 2026.
The buy-back is subject to share price and market conditions and will be executed at the company's discretion. Melio remains loss-making and is expected to reach adjusted EBITDA breakeven on a run-rate basis only in H2 FY28, and the EBITDA guide assumes a higher second half weighting.
Source: Xero Limited (ASX:XRO), 12 November 2026. Summary content supplied by Digifin Pty Ltd.
News summary only, not financial advice. It does not consider your objectives, financial situation or needs.