Xero Limited FY26 result conference call feedback

Research evidence excerpt

Xero Limited FY26 result conference call feedback

J P M O R G A N Asia Pacific Equity Research

14 May 2026

Xero Limited Overweight

XRO.AX, XRO AU

FY26 result conference call feedback Price (13 May 26):A$81.00

Price Target (Mar-27):A$150.00

• Confident in building blocks to FY28 aspirations. Management provided Australia

FY27 revenue/EBITDA guidance, and remained positive on the trajectory to

Technology, Media &

deliver on FY28 revenue and Rule of 40 targets. FCF margin expansion will Telecommunications

come through (vs. FY26 pro-forma, incl. Melio of 13.3%) as Melio AC Bob Chen

profitability improves towards the FY28 EBITDA breakeven exit rate.

(61-2) 9003-8611

• Claude for Small Business. Anthropic announced the launch of Claude for bob.chen@jpmorgan.com

Small Business overnight, seemingly leaning on Quickbooks integration for Benjamin Jones

accounting reconciliation work. XRO has recently announced an MCP (61-2) 9003-8627

partnership with Claude, which is a pre-requisite for deeper connection with benjamin.s.jones@jpmorgan.com

J.P. Morgan Securities Australia Limited

Claude, and sounded positive on the prospect for deeper integration.

Ultimately, Anthropic should be viewed as a TAM expander to access as many

customers as possible.

• AI product and monetization. On AI monetization, XRO will continue to

think about bundled vs. unbundled features based on ‘core value’, and which

features might be better suited to an ‘a-la-carte’ or hybrid/usage-based pricing

model where there is a higher associated compute cost. Monetization will come

through in FY27, but the contribution to FY27 revenue will not be material.

XRO also announced the launch of Xeroforce, a ‘simple AI agent builder’ on

top of Xero. The product is in a closed alpha testing phase prior to general

release.