Sydney, May 19, 2026, 06:05 (AEST)
Xero Limited shares slipped 2.0% to A$78.07 on Monday ahead of Tuesday’s ASX session. The accounting-software maker’s stock tracked between A$78.04 and A$82.16, staying above its 52-week low but still well under last year’s peak. Investors are sizing up Xero’s planned A$550 million share buyback against softer profit and slimmer margins as its U.S. push continues. Investing
Xero XRO.AX pulled back after Friday’s jump, when the shares surged 8.67% to close at A$80.07, putting the stock near the top of the S&P/ASX 200. The swings have traders weighing if a U.S. expansion and payments bet can counter Xero’s short-term drag from absorbing Melio. Investing
ASX is set for a regular session Tuesday, with trading open from 9:59 a.m. to 4 p.m. AEST. The 2026 exchange holiday calendar does not list any market closures between ANZAC Day and the King’s Birthday on June 8. TradingHours
Xero posted operating revenue of NZ$2.75 billion for FY26, rising 31%. Adjusted EBITDA climbed 18% to NZ$757.4 million. The adjusted EBITDA figure takes out some one-off and non-cash costs, as well as interest, tax, depreciation and amortisation. Net profit after tax dropped 27% to NZ$167.4 million. Gross margin slipped, falling to 83.9% from 89.0%.
The board signed off on buying back as much as A$550 million of shares in FY27 to balance out dilution from staff share awards. It shows the company has enough capital for buybacks, but the move points to the market’s focus on the quality of earnings, not just top-line growth.
Xero CEO Sukhinder Singh Cassidy said the company added 110,000 new U.S. customers, counting Melio direct payments users, and described the results as “disciplined execution and macro-resilience.” She said Xero has started to connect accounting and payments for U.S. clients, looking to expand from core accounting workflows to broader solutions in the market.
Xero is working to draw investors with its AI push. The company said it’s brought Anthropic’s Claude into its platform, adding to its existing work with OpenAI. Its Just Ask Xero feature reconciled over 40 million transactions and reported 97% accuracy. Xero also rolled out XeroForce, which it described as an invite-only alpha for building custom AI finance agents.
The U.S. is still the main target and also the toughest. Melio, brought in through a US$2.5 billion acquisition, takes Xero deeper into payments and lands it face-to-face with Intuit’s QuickBooks as both go after small-business accounting clients. Reuters
Citi’s Siraj Ahmed said the result matched his estimates once higher R&D capitalisation was included, but noted “buy-side expectations was for a beat,” so the earnings miss might drag on the stock early. Still, Ahmed called it a “strong result,” pointing to U.S. gains, subscriber growth, Melio, and better-than-expected FY27 guidance. Capital Brief
Xero’s shrinking gross margin, falling from 89% to 83.9%, and a net profit miss are in focus for investors, eToro’s lead analyst Josh Gilbert said. “That’s the cost of buying real scale in the U.S.,” Gilbert said, noting investors are now asking how long these margin pressures stick around. The Australian
Xero is targeting NZ$3.62 billion to NZ$3.73 billion in operating revenue for FY27 and NZ$860 million to NZ$920 million in adjusted EBITDA. That includes up to NZ$55 million more on U.S. brand spending. The risk is clear: if Melio’s lower-margin payments business expands quicker than planned, or if U.S. customer growth slips, the buyback might not support the shares.
ASX slides to one-month low as industrials, gold, materials weigh
Australia’s S&P/ASX 200 dropped 1.45% Monday, hitting its lowest in a month. The market was pressured by falls in industrials, gold and materials. Decliners easily outpaced rising stocks in Sydney, dragging the index down. Investing
Xero’s annual meeting is set for Aug. 27, with FY27 half-year results on Nov. 12. Until then, the share price looks tied to three things: if the A$550 million buyback starts clearing out sellers, how Melio’s U.S. growth is holding up, and if margins start to improve. Xero
