Xero Ltd reports 31% revenue growth despite profit decline

Xero Ltd has reported mixed financial results for the 2026 financial year, ending March 31, 2026. While operating revenue grew 31% to $2.75 billion and customers increased 11% to 4.9 million, net profit after tax (NPAT) declined 27% to $167 million. The company attributed the decline in profitability to acquisition costs related to Melio.

Despite the drop in share price, which has fallen significantly over the past year, Xero continues to see strong international growth. US revenue grew 240%, and UK revenue increased by 26%. The company is leveraging price increases to drive financials, with average revenue per customer rising 23% to $55.44. Xero expects future operating revenue to reach at least $3.6 billion.

Founded in New Zealand, Xero operates as a global cloud-based accounting software provider. The company utilizes a software-as-a-service (SaaS) model, which provides recurring revenue and high gross margins, currently reported at 88.20%.