SYDNEY, May 18, 2026, 02:04 (AEST)
- Xero finished Friday at A$79.67, gaining 8.13% after dropping 9.04% on Thursday. Shares still wrapped up the week around 4.7% under last Friday’s close.
- The ASX cash market was closed at the dateline time. Trading for Monday is set from 9:59 a.m. to 4:00 p.m. AEST, according to .
- The focus this week is on how investors react to Xero’s A$550 million buyback and if it’s enough to make up for the weaker profit and Melio acquisition charges.
Xero Ltd opens Monday on the ASX as traders weigh whether Friday’s jump signals a real turnaround or was just a brief recovery after the results-day drop.
Xero shares bounced 8.13% to A$79.67 on Friday, clawing back some of Thursday’s 9.04% slide. The accounting software firm reported its full-year earnings and approved a buyback of up to A$550 million. The stock now sits between investors weighing faster U.S. growth against a weaker statutory profit.
Xero said operating revenue rose 31% to NZ$2.75 billion for the year to March 31. Adjusted EBITDA came in at NZ$757.4 million, up 18%. Adjusted EBITDA strips out some one-off or non-cash items from earnings before interest, tax, depreciation and amortisation. Net profit after tax dropped 27% to NZ$167.4 million. Operating income was down 13%.
The company said the buyback is intended to offset dilution—specifically, the dilution from staff share vesting tied to share-based compensation for FY27 and earlier staff share grants. The company did not call it a broad capital return.
Xero CEO Sukhinder Singh Cassidy said the company had “disciplined execution and macro-resilience,” calling out “powerful momentum across our markets.” Xero reported it gained 110,000 U.S. customers, with Melio direct payments customers included, and said pro-forma revenue growth was 50%.
Xero’s U.S. focus is key. The company bought payments firm Melio in 2025, looking to grow in North America, where Reuters said Xero made only about 7% of its sales at that time. The deal now puts Xero in direct competition with Intuit’s QuickBooks on small-business accounting and payments, moving beyond rivals listed on the ASX.
Citi’s Siraj Ahmed said profit came in below forecasts, blaming higher interest and tax, Capital Brief reported. Ahmed also pointed out the result was strong on “US momentum,” subscriber growth, Melio and the FY27 outlook. He said most on the buy side had expected a beat, which he said explained the initial selloff. Capital Brief
Xero is guiding to operating revenue between NZ$3.62 billion and NZ$3.73 billion for FY27, and adjusted EBITDA in a range of NZ$860 million to NZ$920 million. The company said the outlook factors in up to about NZ$55 million of additional U.S. brand spending. Xero expects earnings to be more second-half weighted.
Xero is stepping up its artificial intelligence game. The company said it expanded its AI partnership with Anthropic and will bring Claude to Xero, adding to its current work with OpenAI. It also rolled out XeroForce, an alpha invite-only tool for users to create custom finance and accounting AI agents.
Xero shares have rallied, but that could be getting ahead of actual earnings recovery. Gross margin dropped to 83.9% from 89.0%. In its presentation, Xero said Melio’s payments bring in a lower margin compared to subscriptions. If U.S. payments growth cools, integration costs stick around, or extra U.S. brand spending doesn’t pull in new customers soon, the buyback might soften dilution, but questions about profit remain.
S&P/ASX 200 slipped 0.12% to 8,630.8 on Friday, dragged down by mining stocks. The All Tech index added 2.25%, and information technology was up 3.20%. The broader market’s weakness offered little support.
That makes Monday’s open the real test. Buyers get the buyback, U.S. growth and the FY27 outlook. Sellers have the profit drop, pressure on margins, and risk from Melio execution still hanging over the stock.
