Xero Limited · ASX:XRO
Xero — FY2026 Earnings Presentation
46 slides from Xero's earnings presentation, May 14, 2026
Slide 1: FY 2026 Investor briefing
FY 2026 Investor briefing Results for the twelve months ended 31 March 2026 Sukhinder Singh Cassidy Chief Executive Officer Claire Bramley Chief Financial Officer 14 MAY 2026 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 for subscription, or also include: general economic co
Slide 3: Agenda
Agenda 01. Introduction and summary of results Sukhinder Singh Cassidy Chief Executive Officer 02. Financial results Claire Bramley Chief Financial Officer 03. Strategic themes Sukhinder Singh Cassidy Chief Executive Officer 04. Q&A 3
Slide 4: Introduction and summary of results
Introduction and summary of results Sukhinder Singh Cassidy Chief Executive Officer 4
Slide 5: A milestone year — strong growth, US + AI stepchange, delivering consistent returns
A milestone year — strong growth, US + AI stepchange, delivering consistent returns Sustained revenue and 3x3 + AI innovation Continued capital and Adj-EBITDA growth accelerating operational discipline with strong US momentum with payments + AI scaling funding growth, and and Melio investment fast a
Slide 6: Execution across the board: growth, efficiency and US acceleration in FY26
Execution across the board: growth, efficiency and US acceleration in FY26 Revenue growth broad Strong Adj-EBITDA growth, based and sustained absorbing Melio investment Operating revenue Adjusted EBITDA Rule of 401 $2,753m $757m 48.5% +31% YOY headline +18% or +$116m YOY headline +4.2pp YOY headline
Slide 7: ANZ continues to deliver strong revenue growth supported by quality customer acquisition
ANZ continues to deliver strong revenue growth supported by quality customer acquisition Australia FY26 Δ YOY $1,392m Revenue Strong revenue growth continues ● Execution focused on data driven engagement with ABs and SMBs Revenue $1,148m +20% +19% CC (+18% YOY, +17% YOY constant currency) ● Using ec
Slide 8: International growth gaining momentum, fueled by organic growth and Melio acquisition
International growth gaining momentum, fueled by organic growth and through Melio acquisition United Kingdom FY26 Δ YOY High growth with some MTD tailwinds Revenue $727m +26% +21% CC $1,361m Revenue ● AB channel improving ability to drive multi product ● Evidence of early adoption of MTD at end of H
Slide 9: Adj-EBITDA growth strong, absorbing Melio investment
Adj-EBITDA growth strong, absorbing Melio investment Adj-EBITDA 30% YOY organic growth FCF up 5x in 4 years R40 = 48.5%, 36.0% pro-forma Adjusted EBITDA ($m) Free cash flow ($m) & margin (%) Rule of 401 (%) +18% YOY headline Revenue growth CC (%) Pro-forma Rule of 40 (+30% YOY organic) $554m Free ca
Slide 10: Financial results
Financial results Claire Bramley Chief Financial Officer 10
Slide 11: Strong revenue growth driven by both ARPC expansion and customer additions
Strong revenue growth driven by both ARPC expansion and customer additions ARPC up 23% (2x FY25 growth), adding Melio Revenue up 31%, Customers up 11%, Payments drove the surge, contributing ~40% AMRR $3.3b1 — up 26% pro-forma 10% organic — international accelerating of uplift Revenue ($b) Customers
Slide 12: Gross profit dollars expanding, enabling reinvestment
Gross profit dollars expanding, enabling reinvestment Gross profit up 23% to $2.3b Organic gross margin 89% Gross margin (%) Melio mix effect 5pp1 Gross profit ($m) 89.0% 88.2% 87.3% 83.9% Subscription and payments combining to $2,309m drive strong absolute gross profit growth $1,872m $1,511m $1,222
Slide 13: Melio drives step change in ARPC, contributing ~40% of ARPC expansion
Melio drives step change in ARPC, contributing ~40% of ARPC expansion >50% contribution 50% - 25% contribution 25% - 0% contribution Negative contribution Headline ARPC has increased $10.36 (up 23%) to 31 March 2026 $55.44 Melio adds $4.24 ● Structurally higher ARPC payments opportunity contributes
Slide 14: Churn trends reflect mix and post-pandemic normalisation
Churn trends reflect mix and post-pandemic normalisation Underlying cohorted churn 0.81% Headline churn 1.14% Cohorted churn on customers >180 days removes mix impact and better reflects Rising to pre pandemic average. Driven by direct channel mix which has higher ARPC existing customer behaviour Xe
Slide 15: Organic unit economics are compelling: Strong LTV expansion
Organic unit economics are compelling: Strong LTV expansion, up 17% to $21b, reflects investment to drive ARPC and customer growth CAC per gross add $735, LTV/CAC 5.9x LTV per customer $4,304 CAC months 14.4 up 3% YOY International improving LTV movements by driver ($b)1,2 $1.93b $20.96b $1.09b $1.1
Slide 16: Delivering growth with operating leverage while investing in AI innovation
Delivering growth with operating leverage while investing in AI innovation Continued OPEX ratio improvement to 70.5%1 in line with Rev/FTE up 21%, reflects disciplined headcount FY26 guidance management with Xero FTE flat (ex Melio) Operating expenses as a % of operating revenue — excl. transaction
Slide 17: Delivering operating efficiencies across all three cost lines
Delivering operating efficiencies across all three cost lines Sales & marketing efficiency G&A efficiency improves to Product efficiency improves 1.6pp improves 1.5pp 10.4% underlying Sales & marketing Product design & development General & administration +25% YOY Melio contribution (+17% organic) +
Slide 18: Adj-EBITDA grows 18% to $757m as revenue outpaces cost growth
Adj-EBITDA grows 18% to $757m as revenue outpaces cost growth Movements in Adj-EBITDA ($m)1 Includes Melio payments transactional costs $650m Increase largely due to the incorporation of Melio and the accounting treatment of executive option and sign-on grants ($210m) announced in FY25 $757m $642m (
Slide 19: Balance sheet strength provides financial flexibility and optionality
Balance sheet strength provides financial flexibility and optionality Strong balance sheet $1.9b with available liquid resources Offsetting share based compensation Net debt / EBITDA now ~0.5x vs. ~2.3x pro-forma at Melio transaction announcement Movement in net cash position ● Given our strong bala
Slide 20: Strong cashflow generation provides strategic flexibility
Strong cashflow generation provides strategic flexibility Xero’s capital allocation framework Available capital1 Invest to support Rule of 40 outcomes in-line with aspiration Product development GTM/CAC Build Partner Buy Disciplined investment to tightly align with FY25-27 strategy e.g. Win the ‘3 x
Slide 21: Xero reiterates its FY28 aspirations and Melio breakeven guidance
Xero reiterates its FY28 aspirations and Melio breakeven guidance 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 outcome is expected to
Slide 22: FY27 Outlook
FY27 Outlook FY27 Operating revenue is expected to be between $3,620m and $3,730m FY27 Adjusted-EBITDA is expected to be between $860m and $920m This includes incremental US Brand spend of up to ~NZ$55m Over FY27 Xero expects a higher than historical weighting towards H2 Product capitalisation rate
Slide 23: Strategic themes
Strategic themes Sukhinder Singh Cassidy Chief Executive Officer 23
Slide 24: 3x3 traction accelerating with payments scale, US stepchange and AI solutions
3x3 traction accelerating with payments scale, US stepchange and focus on innovative AI solutions ● Launched bill payments powered by Melio ● Introduced Xero Analytics with customisable AI powered insights Win the 3x3 ● Launched US embedded payroll solution (beta) through Gusto ● Introduced Xero Sim
Slide 25: Strong US progress allows us to step up brand investment in FY27
Strong US progress allows us to step up brand investment in FY27 FY27 US ● Incremental spend of up to NZ$55m, STRONG MELIO ● On track to achieve synergies & BRAND SPEND bringing planned FY27 total to US$50m PROGRESS deliver FY28 run-rate break even Xero US standalone Pro-forma Xero + Melio US gross
Slide 26: Global Payments up 53%, driving ARPC and customer penetration
Global Payments up 53%, driving ARPC and customer penetration… FY26 Total TPV = $62b Total payments revenue growth 53%1 in FY26 Pro-forma Total payment value ($b)1,2 Pro-forma payments + invoicing revenue ($m)1,2 Xero BillPay TPV ($b) $62b Payments revenue i.e. Bill Payments + Syndication ($m) Xero
Slide 27: Diversifying our business model with a step change in consumption based revenue
…and diversifying our business model with a step change in consumption based revenue Pro-forma Xero + Melio payments revenue ($m)1 Xero subscription revenue Pro-forma Xero + Melio payments revenue Consumption based revenue, up from 7% in +70% CAGR FY23 to 18% in FY26 $535m 18% 82% $110m FY23 FY24 FY
Slide 28: Xero's opportunity is to be the trusted O/S for the agentic era
Xero’s opportunity is to be the trusted O/S for the agentic era Xero’s competitive advantages SMBs + ABs Customer context GTM layer Global scale New distribution General AI assistants Xero GTM: ~5m+ customers & growing Xero’s SMB customers are channel for Xero not billed by seats Xero app: Financial
Slide 29: New AI features driving customer adoption and value delivery
New AI features driving customer adoption and value delivery 500K+ GenAI customers 2.6m Customers using any AI feature, rolling 12 months (to March 2026) Customers using new GenAI features (000s) rolling 12 months 40m Auto bank reconciliation transactions lines reconciled1 97% 513k Auto bank reconci
Slide 30: FY27 will be a year of driving adoption with deeper AI value in our products
FY27 will be a year of driving adoption with deeper AI value in our products Drive adoption & usage Monetise in line with our principles Leverage partnerships Simplicity = Bundling Adoption = Add Ons Futureproof = Usage Linked Pricing New agents to deepen AI value in our products Payments agents Dat
Slide 31: Innovating is as important as building today's value
Innovating is as important as building today’s value Introducing XeroForce Claude integration A natural language custom AI agent builder ALPHA 31
Slide 32: 83% of Xeros use AI daily
83% of Xeros use AI daily, with Engineering, CX and Marketing driving deep value Product & engineering Customer experience ● 97% of engineers using at least one AI tool daily ● AI agents leveraged to redesign and rebuild timesheet Product product UI — delivered in 10 weeks vs ~6 months without agent
Slide 33: Wrap up: Strong FY26 sets the stage for an exciting FY27
Wrap up: Strong FY26 sets the stage for an exciting FY27 1 2 3 4 5 Strong revenue Durable EBITDA 3x3 execution AI multiplies Capital growth, US growth, with global productivity and discipline accelerating absorbing Melio payments provides new funding growth investment scaling areas of innovation 33
Slide 34: Appendix
Appendix 34
Slide 35: FY27 Outlook — supporting assumptions and commentary
FY27 Outlook — supporting assumptions and commentary FY27 Adjusted-EBITDA is expected to be between FY27 Group Revenue is expected to be between $860m and $920m $3,620m to $3,730m This includes incremental US Brand spend of up to ~NZ$55m Over FY27 Xero expects a higher than historical weighting towa
Slide 36: Xero has multiple structural advantages against potential AI threats
Xero has multiple structural advantages against potential AI threats Competitor or threat NATIVE AI START-UPS LLM PROVIDERS SEAT-BASED MODELS “VIBE-CODING” SOLUTIONS “Startups built AI-first, no Area of “General purpose models “AI agents replace human “SMBs can code their own concern / legacy cost b
Slide 37: Customer regional composition and growth trends
Customer regional composition and growth trends Closing customer balance from H1 FY24 to H2 FY26 Australia Includes impact of 160k long idle subscriptions removed during H1 FY25. Underlying customer growth was 10% in both H1 and H2 New Zealand FY25 excluding this impact +11% YOY headline (+10% YOY o
Slide 38: SaaS metrics summary
SaaS metrics summary1 ANZ International Group Australia, New Zealand UK, US, CA, ROW Global Total FY23 FY24 FY25 FY26 FY23 FY24 FY25 FY26 FY23 FY24 FY25 FY26 ARPC2 $34.24 $37.97 $41.66 $48.89 $35.10 $41.05 $49.82 $54.20 $34.61 $39.29 $45.08 $51.20 CAC months 9.1 8.1 9.4 9.8 23.3 22.4 20.7 17.2 15.9
Slide 39: US pro-forma disclosure detail
US pro-forma disclosure detail1 Reflects contribution to Xero’s reported performance, i.e. incorporating 5.5 months of Melio contribution following acquisition completion on 15 October US Revenue composition (NZ$) Units FY24 FY25 H1 FY26 H2 FY26 FY26 FY26 headline Subscription, invoicing & other rev
Slide 40: Reported NPAT to Adj-NPATA reconciliation — FY25 vs. FY26
Reported NPAT to Adj-NPATA reconciliation — FY25 vs. FY26 nt te se on red e e ion ge . no rcha on ot on ot ati cqui rat tin ion ati le n ati le n ati ing nv repu ide f con cin uisit s s dc n dc n ts ts or V a alu rtib alu rtib s alu nc FY25 FY25 FY26 FY26 ate itio ate itio on os os ert rev : Fina of
Slide 41: Summary of Melio impacts and pro-forma impacts on key metrics
Summary of Melio impacts and pro-forma impacts on key metrics Xero + Melio pro-forma metrics & adjustments ($NZ 000s)1,2 Organic vs. inorganic Group growth rates FY25 FY26 YOY Mvmt YOY Mvmt Total revenue 2,360,227 2,954,545 Headline Organic Growth (%) 25%, 22% CC 25%, 23% CC Total revenue +31% +21%
Slide 42: Financial performance
Financial performance H1 FY24 H2 FY24 FY24 H1 FY25 H2 FY25 FY25 H1 FY26 H2 FY26 FY26 Total operating revenue 799,547 914,220 1,713,767 995,865 1,106,787 2,102,652 1,194,193 1,558,888 2,753,081 Gross profit 699,790 811,472 1,511,262 885,332 986,918 1,872,250 1,057,013 1,251,608 2,308,621 Gross margin
Slide 43: 2026 Exchange Rates
2026 Exchange Rates Full year ended / as at 31 March 2026 2025 Average rate Closing rate Average rate Closing rate NZD / AUD 0.889 0.834 0.911 0.909 NZD / CAD 0.812 0.796 0.826 0.814 NZD / EUR 0.507 0.499 0.553 0.526 NZD / GBP 0.438 0.434 0.465 0.442 NZD / SGD 0.757 0.738 0.795 0.767 NZD / USD 0.587
Slide 44: Glossary
Glossary Adjusted EBITDA Customers LLMs Adjusted EBITDA (a non-GAAP financial measure) is provided as Xero believes it provides Customers include Xero customers and Melio direct payments customers. A Xero customer Refers to Large Language Models useful information for users to understand and analyse
Slide 45: US disclosure definitions
US disclosure definitions Subscription, invoicing & other revenue Total US direct customer revenue Includes all direct subscription revenue across both Melio and Xero, Invoicing (A/R) related The sum of Subscription, Invoicing & other revenue, and Xero BillPay payments revenue revenue (incl. Float r
Slide 46: 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 46