Xero Limited · ASX:XRO
Xero — H1 FY26 Earnings Presentation
43 slides from Xero's earnings presentation, Nov 13, 2025
Slide 1: Investor Briefing
XERO LIMITED INVESTOR BRIEFING 13 November 2025 Sukhinder Singh Cassidy Chief Executive Officer Claire Bramley Chief Financial Officer Xero UK partner Tyler Trew, founder of Highlight Accounting and his client Rebecca Shoobert, owner of Oh Happy Creative in Leigh-on-Sea— ohhappycreative.com 1
Slide 2: Important Notice
IMPORTANT NOTICE This presentation is given on behalf of Xero Limited (Xero) (ASX:XRO) (Company number NZ 183 0488, ARBN 160 661 183) Information in this presentation: ● is for general information purposes only, and is not an offer or invitation ● includes statements relating to past performance, wh
Slide 3: Agenda
AGENDA 01 02 03 04 Introduction and Financial Results Strategic Themes Q&A Summary of Results Sukhinder Singh Cassidy Claire Bramley Sukhinder Singh Cassidy Chief Executive Officer Chief Financial Officer Chief Executive Officer
Slide 4: Introduction and Summary of Results
INTRODUCTION AND SUMMARY OF RESULTS Sukhinder Singh Cassidy Chief Executive Officer Xero UK customer Rosette Ale, founder of Revival London and her designer Saabira Muhammad in London — revivalldn.com 4
Slide 5: H1 FY26 reflects momentum and execution to deliver strong financial results
H1 FY26 reflects momentum and execution to deliver strong financial results Sustained, strong revenue growth across our 3x3 portfolio Continuing to deliver above Rule of 40, strong cash generation Operating revenue Adjusted EBITDA Rule of 401 $ 1,194m $ 351m 44.5% +20% YOY +12% or +$38m YOY +0.6pp YOY
Slide 6: ANZ is a key part of our portfolio & continues to deliver quality growth
ANZ is a key part of our portfolio & continues to deliver quality growth off a large base ● Australia: Strong revenue growth $664m REVENUE ○ New sales motions in our partner channel building momentum (+17% YOY, +17% constant currency) and Syft provides new opportunities ○ Direct channel supports foc
Slide 7: International revenue growth reflects strong strategic execution
International revenue growth reflects strong strategic execution — well positioned for further growth ● UK: Continued momentum from good strategic execution $530m REVENUE ○ Direct channel use increasing, partner channel focused on mix (+24% YOY, +19% constant currency) ○ Release of Xero Simple suppor
Slide 8: Consistent delivery: Performing above Rule of 40 — Strong cash generation
Consistent delivery: Performing above Rule of 40 — Strong cash generation ADJUSTED EBITDA ($m) FREE CASH FLOW ($m) & MARGIN (%) RULE OF 401 (%) Revenue growth CC (%) Free cash flow margin (%) +12% YOY $321m Growth impacted by tough $351m 26.9% YOY comparison from one +53% YOY off benefits in H1 FY25 4
Slide 9: Financial Results
FINANCIAL RESULTS Claire Bramley Chief Financial Officer Millie O'Neill, Bookkeeper at The Highlight Partnership and her client Oh Happy Creative in Leigh-on-Sea - ohhappycreative.com 9
Slide 10: Sustained revenue growth — balanced between ARPU & subscribers
Sustained revenue growth — balanced between ARPU & subscribers REVENUE ($m) SUBSCRIBERS (#m) ARPU ($) H1 FY26 growth lower vs. H1 FY25 Includes impact of +15% YOY Impact from removed long partly due to benefit in H1 FY25 removing 160k long idle idle subscriptions (+8% CC) from changes to AU price ris
Slide 11: Good momentum in AMRR and robust gross margin
Good momentum in AMRR and robust gross margin AMRR ($m) Gross profit ($m) and Gross margin (%) Gross margin (%) +26% YOY Gross profit margin down 0.4pp, reflecting Gross profit ($m) continued strategic investment in platform +19% CC capabilities and customer experience $2,734m 88.9% 88.5% 87.5% 87.0% $
Slide 12: Continued ARPU expansion reflects pricing for value
Continued ARPU expansion reflects pricing for value as we add new features and capabilities 50 - 75% contribution 25% - 50% contribution 0% - 25% contribution Negative contribution ARPU increased $4.55 to 30 September 2025 $49.63 ● Monetising value added through new features and capability improvemen
Slide 13: Strong payments momentum continues. Gusto beta now live
Strong payments momentum continues. Gusto beta now live, adding payroll for US users Total payment value1 Employees paid through Xero Payroll in AU / UK / NZ2 Indexed to September-23 Indexed to September-23 +35% YOY ● Lower growth reflects large existing Payments revenue growth +40% YOY3 customer bas
Slide 14: Churn remains below pre-pandemic trends
Churn remains below pre-pandemic trends, despite mix shift from growth in Direct channel and International MRR churn (%) Churn is reported on a percentage of monthly recurring revenue basis Long term pre-pandemic1 average — 1.15% 1.07% 1.09% 1.13% 1.04% 1.10% 1.11% 0.99% 0.94% 1.03% 1.01% 0.90% 0.91
Slide 15: LTV continues to expand
LTV continues to expand LTV movements by driver ($b) $19.56b $0.86b ($0.98b) $1.04b $0.78b ($0.09b) $17.95b Group SaaS metrics to 30 Sep 25 LTV per sub: $4,261 CAC per gross add: $757 CAC months: 15.2 LTV / CAC: 5.6 1 1. March 2025 LTV, has been calculated using churn excluding the impact of the rem
Slide 16: Investing for growth while driving operating leverage
Investing for growth while driving operating leverage Operating expenses as a % of operating revenue Revenue per FTE ($k)5 — excl. transaction costs $513k +16% YOY 80.7%3 H1 FY26 OPEX ratio 72.8% 1 $444k FY26 OPEX to operating revenue expected to be around 70.5% and includes the Melio business2 73.3
Slide 17: Capital allocation remains disciplined, G&A impacted by non-recurring costs
Capital allocation remains disciplined, G&A impacted by non-recurring costs as highlighted at FY25 result Sales & marketing Product design & development General & administration Expenses as a % of revenue $379m +19% YOY 34.6% Gross product spend as a % of Expenses ($m) revenue (up 1.2pp) $336m +18%
Slide 18: Strong 29.4% Adj-EBITDA margin reflects robust return on investment
Strong 29.4% Adj-EBITDA margin reflects robust return on investment Movements in Adj-EBITDA ($m)1 $198m Increase largely due to the accounting treatment of executive option and sign-on grants announced in FY25 ($25m) ($57m) $351m $313m ($29m) ($50m) Primarily performance marketing spend across digita
Slide 19: Strong free cash generation growth continues
Strong free cash generation growth continues Movements in free cash flow ($m)1 Impact limited due to utilisation of pre-paid tax balances $194m $25m $3m $321m 26.9% FCF margin $9m ($68m) ($50m) $209m 21.0% FCF margin Growth in payments to suppliers & employees lower than OPEX growth, given increase i
Slide 20: Balance sheet strength maintained following Melio acquisition
Balance sheet strength maintained following Melio acquisition ensuring financial flexibility to pursue opportunity ahead Movement in net cash position $bn H1 FY25 H1 FY26 Δ YOY Cash and cash equivalents 0.8 3.5 2.7 Short-term deposits 1.2 1.3 0.1 ● Net cash position grew by $2.7 billion, reflecting net
Slide 21: Melio contribution accelerates revenue growth, step change in US scale
Melio contribution accelerates revenue growth, step change in US scale XERO + MELIO COMBINED PRO-FORMA (NZ$)1 H1 FY26 MELIO PERFORMANCE COMMENTARY Revenue growth drivers ● Transaction completed 15 October, did not contribute to H1 FY26 performance ● Underlying2 YOY Melio revenue growth ~68% ● Pro-fo
Slide 22: Strategic Themes
STRATEGIC THEMES Sukhinder Singh Cassidy Chief Executive Officer Xero Australia customers Wayne & Sallina, owners of Cheol’s in Perth — cheols.com.au 22
Slide 23: Winning On Purpose
Winning On Purpose Purpose Vision WHY WE To make life better for people in small business, their To be the most trusted and insightful EXIST advisors and communities around the world small business platform A Winning GTM Focused Bets to Unleash Xero(s) Win the Playbook Win the Future to Win 3x3 FY25
Slide 24: Well executed strategy with key wins in our 3x3
Well executed strategy with key wins in our 3x3, continuing to deliver value for our customers ● Completed Melio acquisition, bill pay for US customers coming in December 2025 WIN THE 3X3 ● Embedded Gusto solution now live in beta to provide US payroll capabilities ● Analytics Powered by Syft rolled
Slide 25: Financial superagent JAX to provide powerful new features
Financial superagent JAX to provide powerful new features New homepages with JAX embedded Financial insights powered by Xero & Open AI Xero’s AI strategic pillars Reimagined Actionable experiences insights Auto bank reconciliation powered by JAX Automated Trusted actions and partner workflows 25
Slide 26: Strategic rationale for Melio gives us strong conviction
Strategic rationale for Melio gives us strong conviction SOLVES CRITICAL ✓ Accounting + Payments = critical for US SMBs 1 CUSTOMER NEED ✓ Large and growing US SMB Payments TAM US$29b1 POWERFUL ✓ Owning Payments critical to our 3x3 strategy 2 STRATEGIC FIT ✓ Delivers a step-change in US proposition &
Slide 27: Melio completion brings together world class teams & platforms
Melio completion brings together world class teams & platforms to deliver value creation — Melio bill pay inside Xero, launch in December 2025 FY26 ● Acquisition completed 15 October 2025 ● Melio bill pay available inside Xero from Dec-2025 Integration ● Moving quickly to leverage Xero’s GTM capabil
Slide 28: FY26 Outlook: OPEX ratio lowered, now includes Melio
FY26 Outlook: OPEX ratio lowered, now includes Melio Total operating expenses as a percentage of revenue is now expected to be around 70.5% in FY261,2 Xero previously expected this ratio to be around 71.5% in FY26 This ratio is expected to be lower in H2 FY26 vs. H1 FY26 and includes the Melio busin
Slide 29: Xero continues to focus on its aspirations outlined with Melio acquisition
Xero continues to focus on its aspirations outlined as part of the Melio acquisition The combined business is expected to significantly accelerate US revenue growth and gives us the opportunity to more than double Xero’s FY25 group revenue in FY28 excluding anticipated revenue synergies1, 2 This outc
Slide 30: Wrap up of H1 FY26 key themes
Wrap up of H1 FY26 key themes Sustained, strong revenue growth across our 3x3 portfolio Continuing to deliver above Rule of 40, strong cash generation Well executed strategy with key wins in our 3x3, continuing to deliver value for our customers as we aspire to be a world class SaaS business 30
Slide 31: Appendix
APPENDIX Xero UK team members in our London office 31
Slide 32: Subscriber growth trend
Subscriber growth trend Includes impact of 160k long idle subscriptions removed during H1 FY25. Underlying subscriber growth was 10% in both H1 and H2 FY25 excluding this impact Closing subscriber balance from H1 FY23 to H1 FY26 +10% YOY +6% YOY 4.59m Australia +11% YOY +6% YOY 4.41m +13% YOY New Ze
Slide 33: SaaS metrics summary
SaaS metrics summary 1 ANZ International Group Australia, New Zealand UK, US, CA, ROW Global Total H2 FY24 H1 FY25 H2 FY25 H1 FY26 H2 FY24 H1 FY25 H2 FY25 H1 FY26 H2 FY24 H1 FY25 H2 FY25 H1 FY26 ARPU $37.97 $41.34 $41.66 $46.39 $41.05 $45.59 $49.82 $54.08 $39.29 $43.08 $45.08 $49.63 CAC months 8.1 8
Slide 34: Strong underlying EBITDA trends
Strong underlying EBITDA trends H1 FY25 H1 FY26 Δ YOY H1 FY25 H1 FY26 ($000s) ($000s) (%) ($000s) ($000s) Total operating revenue 995,865 1,194,193 20% EBITDA 311,698 377,866 Cost of revenue (110,533) (137,180) 24% Add back: M&A costs 802 50,647 Gross profit 885,332 1,057,013 19% Subtract: revaluatio
Slide 35: Financial performance
Financial performance H1 FY23 H2 FY23 H1 FY24 H2 FY24 H1 FY25 H2 FY25 H1 FY26 Total operating revenue 658,512 741,372 799,547 914,220 995,865 1,106,787 1,194,193 Gross profit 572,912 649,029 699,790 811,472 885,332 986,918 1,057,013 Gross margin 87.0% 87.5% 87.5% 88.8% 88.9% 89.2% 88.5% Sales & marke
Slide 36: New regional subscriber & revenue reporting aligns with 3 x 3 focus
New regional subscriber & revenue reporting aligns with 3 x 3 focus To align with our 3 x 3 strategy, in Xero’s Full Year 2026 Annual Report we will no longer report the North America (NA) region and will instead provide a US region (incl. Melio). Canada will move into the Rest of World (RoW) region
Slide 37: Next wave of Making Tax Digital (MTD) is coming to the UK
Next wave of Making Tax Digital (MTD) is coming to the UK MTD for Income Tax (IT) Enhanced UK product plans will meet MTD for Income Tax needs confirmed for 2026-2028 Ledger Xero Simple Ignite Reporting & Xero Simple targets businesses needing Implementation in phases (>£50k from Apr reconciliation 2
Slide 38: Xero's top three super jobs represent ~$100b TAM
Xero’s top three super jobs, accounting, payments and payroll, represent ~$100b TAM in AU, NZ, US, UK and CA1 Rest of World (Xero markets) ~$100b Acct.2 ($26b) Payroll ($14b) Payments3 ($59b) Other ($39b) Subscriber growth Other Xero markets (US, UK, CA) 22 14 55 Australia & New Zealand 3 <1 4 Accou
Slide 39: Our focus for FY25–27: Complete the most critical jobs in the biggest markets
Our focus for FY25–27: Complete the most critical jobs in the biggest markets, embed key JTBD, and extend even further through the ecosystem and APIs Rest of World SMALL The ‘3 x 3’ ($43b SAM1) Complete the three key JTBD Singapore 1 (accounting, payroll and payments) for SMBs and ABs in our large m
Slide 40: Jobs to be Done
Jobs to be Done Jobs reflect the common tasks that a customer can perform on the Xero platform to run their business. A job does not directly represent a specific product or solution. Some examples are below. XERO PRODUCT AREAS Accounting Payments Payroll Adjacents JOB AREAS Book- Reporting & Invoicin
Slide 41: 2025 Exchange Rates
2025 Exchange Rates 2025 2024 Average rate Closing rate Closing rate Average rate Closing rate 6 months 30 September 31 March 30 September 6 months 30 September 30 September NZD / AUD 0.916 0.909 0.879 0.915 0.918 NZD / CAD 0.819 0.814 0.805 0.831 0.858 NZD / EUR 0.515 0.526 0.493 0.559 0.568 NZD /
Slide 42: Glossary
Glossary Adjusted EBITDA Constant currency (CC) Operating income Adjusted EBITDA (a non-GAAP financial measure) is provided as Xero Constant currency comparisons for revenue are based on average Operating income is a non-GAAP financial measure that has been believes it provides useful information for
Slide 43: Contact
CONTACT Nicole Mehalski Simon Fitzgerald INVESTOR RELATIONS COMMUNICATIONS nicole.mehalski@xero.com simon.fitzgerald@xero.com +61 400 947 145 +61 460 294 680