Xero jumps after unveiling new AI growth targets
Make us a preferred source
Make us a preferred source on Google
More news: Xero shares rose after the company outlined long-term ambitions to quadruple its total addressable market from NZD750 billion ($647 billion) to NZD3.3 trillion, driven by new AI-enabled features.
Shares climbed 2.37% to $95.91 at 11:16am AEDT.
RBC Capital Markets analyst Garry Sherriff said Xero's recent acquisition of Melio raised questions about how it will translate into Xero's revenue growth, but he viewed the update as positive. He holds an 'outperform' rating on Xero, setting the price target to $155 per share.
Xero reiterates FY26 guidance, unveils AI growth targets
The news: Accounting software company Xero has reiterated its FY26 guidance as CEO Sukhinder Singh Cassidy laid out a fresh AI strategy this morning.
The numbers: Xero said more than 2 million subscribers are now using the company's full AI features, with over 300,000 using its newer generative AI features.
In an investor briefing, the company set out long-term ambitions to quadruple its total addressable market (TAM) from NZD750 billion ($647 billion) to NZD3.3 trillion, driven by new AI-enabled features.
The context: Xero also said its newly acquired US payments company Melio is expected to reach adjusted EBITDA breakeven on a run-rate basis in the second half of FY28.
The company reiterated its previously announced FY28 ambitions, including more than doubling its FY25 group revenue, excluding anticipated revenue synergies with Melio.
What they said: "We are deeply focused on capturing the global AI and US accounting plus payments TAM," said Singh Cassidy.
"Xero is well positioned to shepherd [small and medium sized businesses] into the AI era and take advantage of this technology. We are already a trusted system of record and are now orchestrating multiple agents to evolve into the key system of action and decision making for our customers."
The source: ASX
