Xero Reports Record Full-Year Revenue Despite Drop in Net Profit
New Zealand cloud accounting software firm Xero posted record revenue for its 2026 financial year, but heavier spending on artificial intelligence and US-market expansion pushed net profit lower. Subscriber numbers grew 14% during the year.
Xero said revenue rose around 22% to a record level in the financial year ended March 31. The firm reported that AI features added to its cloud-based products helped lift the subscriber base for small and medium businesses to 4.8 million.
Net profit, however, fell against the prior year as the company spent more on sales, marketing and engineering hiring to push deeper into the United States market. Management guided to a recovery in operating margins next year.
Xero shares moved in a tight range on the New Zealand exchange and traded flat on the ASX, where its main listing sits. Analysts are watching closely for the contribution of AI features to revenue per customer.
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