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Accounting software company Xero has had a significant increase in profit on the back of increased users and revenue.
Key numbers for the six months ended September compared with a year ago:
- Net profit $134.8m vs $95.1m
- Revenue $1.19b vs $996m
- Subscribers 4.59m vs 4.19m
- No dividend
The Wellington-based but Australian-listed company reported increased earnings from individual subscribers, while it moved to build on its acquisition of US payments company Melio.
Chief executive Sukhinder Singh Cassidy said the company had looked to improve revenue generation despite a slowing in subscriber growth.
"Xero's H1 FY26 results reinforce our ability to deliver as we continue to do what we said we would do, in line with our strategy.
"We have continued to deliver above 'rule of 40' outcomes and generate significant cash, underpinned by our disciplined allocation of capital."
Sukhinder Singh Cassidy. Photo: Supplied/Xero
The "rule of 40" is an industry benchmark which combines revenue growth and its profit margin and should be at least 40 percent. It is regarded as an indication of a software-as-a-service company's financial health.
Xero's measure increased to 44.5 percent from 43.9 percent a year ago.
Singh Cassidy said the acquisition of US accounting platform Melio Payments would be a significant driver of future growth.
"The acquisition is a significant milestone, creating opportunities to accelerate growth and long-term value. "
She said Xero was also looking to its AI-powered JAX product, which she dubbed a financial superagent that would automate core accounting tasks while bringing efficiencies.
"We see generative AI technology as a significant opportunity to create more value for both our customers and internally at Xero."
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