Xero shares surge to two-month high on $1b buyback

Résumé détaillé

Shares in the cloud-based accounting software platform for small and medium-sized businesses have jumped after the company announced a $1 billion share buyback.

Shares in Xero jumped to a two-month high after the stock exchange-listed cloud accounting firm raised guidance and declared a $1 billion stock buyback program.

The stock climbed nine per cent to $77.22 on Thursday afternoon, the highest level since early September, although the gains still left the company down nearly a third year-to-date.

The Wellington, New Zealand-based company, which is one of the few high-tech plays on the Australian bourse, grew revenue by 46 per cent to $NZ1.7 billion ($1.4 billion) in the half-year to September 30.

Its underlying earnings before interest, tax, depreciation and amortisation dropped eight per cent to $NZ347.5 million ($282 million) while bottom-line net profit fell 86 per cent to $NZ18.5 million ($15 million).

The company attributed the drop to costs involved in incorporating the loss-making Melio small-business bill-pay platform it acquired for around $4 billion in June 2025.

Xero expects Melio to reach break-even by the second half of 2028, and said overall the results showed momentum with strong customer growth.

Xero has forecast around $NZ3.8 billion ($3.1 billion) in full-year revenue, up from its previous forecast of around $NZ3.675 billion ($3 billion).

It's also tightened its earnings guidance upwards and said it would spend $1 billion buying back shares beginning on Friday.

"We're continuing to do what we said we'd do, delivering strong macro-resilient growth at scale with momentum across every region," chief executive Sukhinder Singh Cassidy told an earnings briefing.

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