Xero Rises 8.7% on Revenue Outlook and A$1 Billion Buyback

Xero said it sees an opportunity to generate more than NZ$4.6 billion (US$3.15 billion) in revenue in fiscal 2028, up from its previous goal of NZ$4.2 billion. The new target is above RBC Capital Markets’ estimate of NZ$4.43 billion and consensus forecasts of NZ$4.47 billion.

The company also raised its forecast for operating revenue in the 12 months through March to NZ$3.77 billion-NZ$3.83 billion, from NZ$3.62 billion-NZ$3.73 billion. It attributed the upgrade to stronger performance from Melio, the business-to-business payments platform acquired in 2025 to support Xero’s U.S. expansion, and a weaker New Zealand dollar. Excluding currency movements, Xero expects revenue growth of 24%-27%.

Xero narrowed its adjusted earnings before interest, tax, depreciation and amortization (Ebitda) forecast to NZ$880 million-NZ$920 million, compared with its earlier range of NZ$860 million-NZ$920 million.

RBC analyst Tom Beadle pointed to the stronger implied second-half weighting and higher fiscal 2028 revenue ambition. RBC said its fiscal 2028 Ebitda estimate was 8% above consensus, adding that consensus was not accounting for Xero’s momentum.

Jefferies described the results as mixed. It said first-half adjusted Ebitda was 2% below consensus, while net profit beat expectations by 3%, partly because the tax rate was lower than expected. Based on the midpoint of Xero’s new guidance, Jefferies analyst Roger Samuel said implied fiscal 2027 net profit was 1% below consensus. He said the fiscal 2028 revenue outlook was at least 3% above consensus, while noting that Xero’s chief financial officer was leaving after more than two years with the company.