SYDNEY--Accounting-software provider Xero's bullish commentary about future revenue and up to 1 billion Australian dollars (US$690 million) share buyback sent its stock up 8.7% to a two-month high on Thursday.
Xero said it now sees an opportunity to achieve revenue of more than 4.6 billion New Zealand dollars (US$3.15 billion) in the 2028 fiscal year, up from a prior goal of NZ$4.2 billion.
That means it is now ahead of RBC Capital Markets' estimate of NZ$4.43 billion for that year, and also above consensus estimates of NZ$4.47 billion.
RBC analyst Tom Beadle listed other positives from the result, including Xero's raised guidance for operating revenue of between NZ$3.77 billion and NZ$3.83 billion in the 12 months through March. Xero had originally signaled NZ$3.62 billion-NZ$3.73 billion of revenue.
Xero attributed the upgraded guidance to a stronger performance from business-to-business payments platform Melio, which Xero acquired in 2025 in a bid to accelerate its U.S. expansion, and a weaker New Zealand dollar. It forecast revenue growth at 24%-27% when currency swings are stripped out.
The company also narrowed its guidance range for annual adjusted earnings before interest, tax, depreciation and amortization--or Ebitda--to between NZ$880 million and NZ$920 million, from an earlier forecast of NZ$860 million-NZ$920 million.
In early trading, Xero's share price rose to A$76.99, putting it on track for its best close since the first week of September.
"With the stronger inferred 2H weighting than RBC/consensus, and increase to FY28's aspiration we continue to highlight that consensus is not factoring Xero's momentum into FY28, where our Ebitda estimate is currently 8% ahead of consensus," RBC said.
Other analysts were less upbeat. Jefferies said the result was a bit mixed, noting adjusted Ebitda in Xero's first half was 2% below consensus estimates and while it beat net profit expectations by 3% that was partly due to a lower-than-expected tax rate.
"Based on the mid-point of the new guidance, the implied FY27 net profit is 1% below consensus," analyst Roger Samuel said. "The outlook for FY28 is much better, with revenue at least 3% higher than consensus, but we note the CFO is leaving after than 2 years with Xero."
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