Shares in Xero jumped to a two-month high after the stock exchange-listed cloud accounting firm raised guidance and declared a $1 billion stock buyback program.
The stock climbed nine per cent to $77.22 on Thursday afternoon, the highest level since early September, although the gains still left the company down nearly a third year-to-date.
The Wellington, New Zealand-based company, which is one of the few high-tech plays on the Australian bourse, grew revenue by 46 per cent to $NZ1.7 billion ($1.4 billion) in the half-year to September 30.
Its underlying earnings before interest, tax, depreciation and amortisation dropped eight per cent to $NZ347.5 million ($282 million) while bottom-line net profit fell 86 per cent to $NZ18.5 million ($15 million).
The company attributed the drop to costs involved in incorporating the loss-making Melio small-business bill-pay platform it acquired for around $4 billion in June 2025.
Xero expects Melio to reach break-even by the second half of 2028, and said overall the results showed momentum with strong customer growth.
Xero has forecast around $NZ3.8 billion ($3.1 billion) in full-year revenue, up from its previous forecast of around $NZ3.675 billion ($3 billion).
It's also tightened its earnings guidance upwards and said it would spend $1 billion buying back shares beginning on Friday.
"We're continuing to do what we said we'd do, delivering strong macro-resilient growth at scale with momentum across every region," chief executive Sukhinder Singh Cassidy told an earnings briefing.
"The key takeaway here is that the underlying business is growing strongly, and cash conversion is improving."
The company added 226,000 net new customers in the period to finish the half with 5.1 million, up 12 per cent from a year ago.
One million customers have used Xero's generative artificial intelligence features in the past 12 months, and 97 per cent of the company's engineers are using at least one AI tool daily.
RBC Capital Markets analyst Tom Beadle said the results were a headline net positive outcome for Xero, despite a small miss on earnings.
