Sydney, June 24, 2026, 05:07 (AEST)
Xero Limited shares ended Tuesday at A$65.00, down 5.28% and at a fresh 52-week low, nearly 67% below their 52-week peak. The ASX cash market was closed early Wednesday, with pre-open due at 7 a.m. and normal trading beginning around 10 a.m. Sydney time.
The stock has lost about 9.6% over Monday and Tuesday and 11.4% in seven days. The speed of the fall is testing whether Xero’s revenue gains can offset a market-wide decision to pay less for future software earnings.
It was not a Xero-only move. Australia’s information-technology index fell 4.04%, compared with a 0.33% decline in the S&P/ASX 200. Listed software peers TechnologyOne and WiseTech Global dropped 7.1% and 4.4%, respectively.
The pressure extended beyond Australia. U.S. technology shares fell on Tuesday as traders raised bets on another Federal Reserve rate increase and questioned debt-funded artificial-intelligence spending. Baird investment strategy analyst Ross Mayfield called the trade “highly concentrated and flow-driven,” while SimCorp’s Melissa Brown said “the whole market is likely to get more volatile.” Reuters
Xero’s full-year figures, released in May, offered a counterweight. Operating revenue rose 31% to NZ$2.753 billion, while adjusted EBITDA — operating profit before interest, tax, depreciation and amortisation, adjusted for selected non-cash and one-off items — increased 18% to NZ$757.4 million. Free cash flow gained 9% to NZ$554 million.
Chief Executive Sukhinder Singh Cassidy called the result evidence of “disciplined execution and macro-resilience.” The board also authorised up to A$550 million of on-market purchases in fiscal 2027 to offset dilution from employee share awards.
Growth came with a changed earnings mix. Net profit after tax fell 27% to NZ$167.4 million and gross margin narrowed 5.1 percentage points to 83.9%. Xero said the margin decline largely reflected the addition of Melio, whose payments business carries a different cost profile; Melio generated a NZ$111.7 million net loss for the period.
For fiscal 2027, Xero expects revenue of NZ$3.62 billion to NZ$3.73 billion and adjusted EBITDA of NZ$860 million to NZ$920 million. The plan includes as much as NZ$55 million of additional U.S. brand spending, with a greater-than-usual share of earnings expected in the second half. The downside is that spending arrives before growth, leaving less time to recover if the first half disappoints.
The Melio bet remains central to the valuation debate. When Xero announced the acquisition in 2025, E&P analyst Paul Mason said the price “looks pretty full for the stand-alone business” and would make sense only if Xero delivered the expected distribution synergies. Reuters
Wednesday’s open will show whether buyers view A$65 as a reset or another warning. Near-term direction is likely to hinge on whether the wider technology selloff eases; the longer test is delivery against Xero’s U.S. spending and earnings timetable.
