XRO: FY26 Delivers, but Claude Crashes the Party

研报英文原文证据摘录

XRO: FY26 Delivers, but Claude Crashes the Party

iced as of prior trading day's market close, EST (unless otherwise noted).

increases TAM which is uneconomical to reach alone, on the other hand

an aggregator sitting on top of Xero could be interpreted as a potential

weakening of bargaining power, as well as the implications for margins that

come with it. Management still working through the monetisation piece,

with the economic model for JAX, XeroForce, and Claude yet to be finalised.

US Doesn't Disappoint, Doubles Down on Investment. US customers/

revenue beat consensus +3%/+4% supported by Melio growth of +58% pcp

(PF) and Xero US revenue +50% (PF). Cashflow Central went live with U.S.

Bank in the 2H with management reiterating syndication remains in early

innings. Stepping up incremental investment with NZ$55m for market/

brand building, in conjunction with a unified US GTM team, should see the

region continue to yield results over time.

FY27 Guide Paints the Bridge to Rule of 40. The pathway to Rule of 40

clearer with FY27 revenue guide mid-point implying ~25% growth (PF),

suggesting ~15% FCF margin required to hit Rule of 40 vs. 13.3% FCF

margin FY26 (PF). However, implicit in the achievement of FY28's Rule of 40

aspiration is the continuation of accelerating revenue growth, compared to

+22% FY25 and +23% FY26. RBCe/cons more conservative with FY28 Rule

of 40 of ~38% respectively.

Estimate Changes, New $130/share PT, Retain Outperform. FY27/28

revenue increased +2%/+3% and EBITDA +0%/+13%. FY27 guide clarified

and we estimate ~38% Rule of 40 for FY28. Acknowledging some

longer-term impacts to bargaining power if AI agents own the customer

relationship and reducing EBIT exit multiple from 15x to 12x. Still seeing