Xero shares climb as first-half result meets forecasts
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More news: Xero shares jumped in early trading on the ASX after the accounting software company reported 50% growth in operating profit during the first half of the 2025 financial year.
Xero shares were up 4.7% to $169.10 by 11am AEDT, having advanced more than 65% over the last 12 months.
E&P Capital analyst Paul Mason noted that Xero's first-half revenue was in line with market estimates, while EBITDA and EBIT were ahead of average forecasts and net profit "slightly below" expectations.
What they said: "We think the result will be taken as roughly in-line to marginally ahead depending on how each figure is weighted," said Mason.
"Heading into the result a lot of our conversations featured people worried about the cost side of the business in the first half, and as such the company beating at the EBITDA line will likely be positively received overall, and we would expect the stock to see some support today," he said.
Xero posts NPAT jump in first-half as revenue climbs
The news: Accounting software provider Xero delivered a jump in net profit for the first half of the 2025 financial year, as revenue and subscriber growth continued to climb.
The numbers: Net profit after tax jumped 76% year on year to NZD95 million.
Xero's EBITDA, its preferred measure, gained 51% to NZD312 million ($283 million) compared to the previous corresponding period.
Operating revenue climbed 25% to NZD996 million, as subscribers rose 6% to 4.19 million. Annualised monthly recurring revenue grew by 22% to NZD2.2 billion.
Xero said that total operating expenses as a percentage of revenue is expected to be around 73% in FY25. Meanwhile, full-year product design and development costs as a percentage of revenue are expected to be "broadly similar" to FY24.
The context: Xero also announced that it has extended its partnership with existing payroll partner Gusto, to deliver an embedded payroll solution for US customers to manage payroll within Xero.
What they said: "This result reinforces our ability to deliver on our strategy," Xero chief executive Sukhinder Singh Cassidy said.
"We have delivered a solid performance across the board this half including continued strong revenue growth, and a greater than Rule of 40 outcome for the second period running."
The sources: ASX announcement, E&P Capital research
