Xero : Investor presentation H1 FY26

XERO LIMITED

INVESTOR BRIEFING

13 November 2025

Sukhinder Singh Cassidy

Chief Executive Officer

Claire Bramley

Chief Financial Officer

Xero UK partner Tyler Trew, founder of Highlight Accounting and his client Rebecca Shoobert, owner of Oh Happy Creative in Leigh-on-Sea- ohhappycreative.com

AGENDA

01 02 03 04

Introduction and Summary of Results

Financial Results Strategic Themes Q&A

Sukhinder Singh Cassidy

Chief Executive Officer

Claire Bramley

Chief Financial Officer

Sukhinder Singh Cassidy

Chief Executive Officer

INTRODUCTION AND SUMMARY OF RESULTS

Sukhinder Singh Cassidy

Chief Executive Officer

Xero UK customer Rosette Ale, founder of Revival London and her designer

Saabira Muhammad in London - revivalldn.com

H1 FY26 reflects momentum and execution to deliver strong financial results

Sustained, strong revenue growth across our 3x3 portfolio

Continuing to deliver above Rule of 40, strong cash generation

Operating revenue

Adjusted EBITDA

Rule of 401

$1,194m

+20% YOY

(+18% in constant currency)

$351m

+12% or +$38m YOY

44.5%

+0.6pp YOY

1. Rule of 40 is defined as the sum of annual revenue growth percentage in constant currency and free cash flow margin percentage (free cash flow as a percentage of revenue) 5

ANZ is a key part of our portfolio & continues to deliver quality growth off a large base

$664m REVENUE

(+17% YOY, +17% constant currency)

2.65m SUBSCRIBERS

(+7% YOY | H1 89k net additions)

$46.39 ARPU1

(+12% YOY, +8% constant currency)

• Australia: Strong revenue growth

  • New sales motions in our partner channel building momentum

    and Syft provides new opportunities

  • Direct channel supports focus on mix

  • Customer migrations completed, reinstated payroll inclusions

    in low tier BE plans

• New Zealand: Quality growth in deeply penetrated market

Australia New Zealand

H1 FY26 Δ YOY H1 FY26 Δ YOY

638k +4%

Revenue $546m +19% +19% CC $118m +8% +8% CC

additions

Subscribers 2.02m +9% H1: +80k net

H1: +9k net additions

1. Price changes for Australia were effective from July 2025. Price Changes for New Zealand were effective from September 2025 6

International revenue growth reflects strong strategic execution

- well positioned for further growth

$530m REVENUE

(+24% YOY, +19% constant currency)

1.94m SUBSCRIBERS

(+13% YOY | H1 87k net additions)

$54.08 ARPU1

(+19% YOY, +8% constant currency)

• UK: Continued momentum from good strategic execution

  • Direct channel use increasing, partner channel focused on mix

  • Release of Xero Simple supporting early adopters of MTD for IT

• North America: Good outcome in seasonally weaker half

  • US subscriber additions reflected typically low H1

  • Ready to capitalise on early Melio completion

  • Canadian cloud accounting backdrop remained subdued

• ROW: Capital light approach continues to deliver, South Africa key driver

Reflects spot FX rates at 30 September, for more information refer to slide 41

United Kingdom North America Rest of World

H1 FY26 Δ YOY H1 FY26 Δ YOY H1 FY26 Δ YOY

Revenue $339m +25% +20% CC $72m +21% +18% CC $120m +22% +16% CC

excl. Xerocon2 +27% +23% CC +26% +23% CC N/A N/A

net additions

Subscribers 1.21m +13% H1: +56k

H1: +19k

419k +15%

net additions

H1: +12k

308k +11%

net additions

1. Price changes effective September 2025 in the UK, November 2025 in the US and in Rest of World 2. Xerocon occurred in the UK and North America in H1 FY25 only, resulting in a drag on H1 FY26 YOY growth 7

Consistent delivery: Performing above Rule of 40 - Strong cash generation

ADJUSTED EBITDA ($m) FREE CASH FLOW ($m) & MARGIN (%) RULE OF 401 (%)

Revenue growth CC (%) Free cash flow margin (%)

+25% YOY

$124m

+65% YOY

$205m

+53% YOY

$312m

+12% YOY

$351m

$16m 2.4%

$107m 13.3%

$209m 21.0%

$321m 26.9%

Growth impacted by tough YOY comparison from one off benefits in H1 FY25

33%

29%

20%

27%

13%

44%

23%

21%

45%

18%

27%

2%

1. Rule of 40 is defined as the sum of annual revenue growth percentage in constant currency and free cash flow margin percentage (free cash flow as a percentage of revenue) 8

FINANCIAL RESULTS

Claire Bramley

Chief Financial Officer

Millie O'Neill, Bookkeeper at The Highlight Partnership and her client Oh Happy Creative in Leigh-on-Sea - ohhappycreative.com

Sustained revenue growth - balanced between ARPU & subscribers

REVENUE ($m) SUBSCRIBERS (#m) ARPU ($)

H1 FY26 growth lower vs. H1 FY25 partly due to benefit in H1 FY25 from changes to AU price rise timing and payments

+20% YOY

(+18% CC)

Includes impact of removing 160k long idle subscriptions

+6% YOY

+10% YOY 4.59m

Impact from removed long idle subscriptions

+15% YOY

(+8% CC)

$49.63

+21% YOY

$800m

+25% YOY

$996m

$1,194m

+13% YOY 3.95m

(+10% underlying1)

4.19m

+6% YOY

$37.38

+15% YOY

(+11% underlying1)

$43.08

$1.43

$41.65

1. Underlying subscriber and ARPU growth excludes the impact of the removal of long idle subscriptions. For further details refer to slide 33 of Xero's FY25 Results presentation 10

Good momentum in AMRR and robust gross margin

AMRR ($m)

Gross profit ($m) and Gross margin (%)

+26% YOY

+19% CC

$2,734m

Gross margin (%) Gross profit ($m)

Gross profit margin down 0.4pp, reflecting continued strategic investment in platform capabilities and customer experience

88.9% 88.5%

$2,164m

87.0% 87.5%

$1,057m

+19.4%

$1,481m

$1,770m

$700m

$885m

$573m

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Continued ARPU expansion reflects pricing for value as we add new features and capabilities

50 - 75% contribution

25% - 50% contribution

0% - 25% contribution Negative contribution

ARPU increased $4.55 to 30 September 2025 $49.63

Price changes

• Monetising value added through new features and capability improvements

• Low end (Ignite) plans saw no price changes

• Strength of contribution partly reflects timing of price rises with majority of customer price rises (AU, UK & NZ) occurring in H1

  Product mix

• Front book mix incrementally improving in UK / US as we embed new GTM motions, AU impacted by changes to payroll functionality inclusions

• Direct channel to support focus on mix

  Platform attach & other1

• Largely reflects strong payments performance

  FX movements

• ARPU presented on spot basis, with NZD weaker vs. major currency pairs at 30 September

ARPU at 31 March 2025 $45.08

1. Platform attach includes products such as Payments, Payroll and Planday 12

Strong payments momentum continues. Gusto beta now live, adding payroll for US users

Total payment value1

Indexed to September-23

Employees paid through Xero Payroll in AU / UK / NZ2

Indexed to September-23

Payments revenue growth +40% YOY3

largely reflecting strong TPV growth

+35% YOY

• Lower growth reflects large existing customer base in Australia.

• Changes made to NZ / UK in H1 aim to support increased adoption of Xero Payroll

+5% YOY

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1. Total invoice payment value across our connected online payment service providers who process the payment of invoices on the Xero platform 2. Total employees paid through Xero Payroll in Australia, UK and New Zealand (markets with a Xero Payroll solution)

3. YOY referring to H1 FY26 vs H1 FY25 revenue growth

Churn remains below pre-pandemic trends, despite mix shift from growth in Direct channel and International

MRR churn (%)

Churn is reported on a percentage of monthly recurring revenue basis

Long term pre-pandemic1 average - 1.15%

1.10% 1.13%

1.11%

1.04%

0.99%

1.07%

1.09%

1.01%

0.88% 0.90%

0.91%

0.90%

0.94%

1.03%

1.00%

COVID-19 resulted in greater demand from SMBs for cloud accounting to have a real time view on their cash flow

Underlying churn excluding impact of long idle subscriptions2

1. Average calculated as MRR churn for the period FY16-FY20 2. For further details refer to slide 33 of Xero's FY25 Results presentation 14

LTV continues to expand

LTV movements by driver ($b)

$0.86b ($0.98b)

$1.04b

$19.56b

$17.95b

$0.78b

Group SaaS metrics to 30 Sep 25

($0.09b)

LTV per sub: CAC per gross add:

CAC months: LTV / CAC:

$4,261

$757 15.2

5.6

1

15

1. March 2025 LTV, has been calculated using churn excluding the impact of the removal of long idle subscriptions of 1.03%, this reflects churn dynamics present in Xero's go-forward subscriber base. For further detail on the removal of these subscriptions refer to slide 33 of Xeros FY25 Results presentation

Investing for growth while driving operating leverage

Operating expenses as a % of operating revenue

- excl. transaction costs

Revenue per FTE ($k)5

$513k

80.7%3

H1 FY26 OPEX ratio 72.8%1

+16% YOY

73.3%

FY26 OPEX to operating revenue expected to be around 70.5% and includes the Melio business2

71.7%4

$282k

$337k

$444k

~70.5%

1. Excluding $51m of transaction costs in H1 FY26 2. Refer slide 28 for further details of Xero's FY26 outlook 3. Excluding $34.7m of restructuring costs from FY23 4. Excluding M&A costs associated with the acquisition of Syft 5. LTM revenue figures 16

Capital allocation remains disciplined, G&A impacted by non-recurring costs as highlighted at FY25 result

Sales & marketing

Expenses as a % of revenue Expenses ($m)

$379m

+19% YOY

Product design & development

34.6% Gross product spend as a % of

$336m

General & administration

revenue (up 1.2pp)

47.4% Capitalisation rate (up 3.4pp)

+18% YOY

12.9%

+2.4pp

31.7%

-0.3pp

28.2%

-0.5pp

$154m

+48% YOY

• Largely driven by investment in digital performance marketing to support growth in our core large markets

• Continuing to build internal marketing capabilities

• Increase reflects continued focus on pace of product delivery, including investment in domain experts

• Capitalisation rate elevated due to more developer time spent on releasing new product features for customers - including new AI capabilities

• Increase largely driven by the accounting treatment of options and sign-on equity grants for executive compensation. The majority of these costs are not expected to recur in FY27 (as highlighted at FY25 results announcement)

  17

  
  
  

  Strong 29.4% Adj-EBITDA margin reflects robust return on investment

  Movements in Adj-EBITDA ($m)1

  $198m

  $313m

  ($25m)

  Increase largely due to the accounting treatment of executive option and sign-on grants announced in FY25

  ($57m)

  ($29m)

  ($50m)

  $351m

  Primarily performance marketing spend across digital channels

  1. Data based on Note 5 of Xero's H1 FY26 Financial Statements. For detail on Adj-EBITDA refer to slide 34. Chart may not add through due to rounding 18

  
  
  

  Strong free cash generation growth continues

  Movements in free cash flow ($m)1

  $194m

  ($68m)

  $209m 21.0% FCF margin

  $25m

  $3m

  Impact limited due to utilisation of pre-paid tax balances

  ($50m)

  $9m

  $321m 26.9% FCF margin

  Growth in payments to suppliers & employees lower than OPEX growth, given increase in share based payments (12.3% of revenue in H1 FY26 vs. 8.9% in H1 FY25)

  1. Chart may not add through due to rounding 2. Refer to slide 20 for further details 19

  
  
  

  Balance sheet strength maintained following Melio acquisition ensuring financial flexibility to pursue opportunity ahead

  $bn	H1 FY25	H1 FY26	Δ YOY
  Cash and cash equivalents	0.8	3.5	2.7
  Short-term deposits	1.2	1.3	0.1
  Total cash and short-term deposits	2.0	4.8	2.8
  Convertible notes - principal value of	(1.5)	(1.6)	(0.1)

  Movement in net cash position

  • Net cash position grew by

    $2.7 billion, reflecting net funds raised for Melio acquisition1

    term debt
    Net cash position	0.5	3.2	2.7
    Melio completion impact	H1 FY26	Completion	H1 FY26 pro-forma
    Total cash and short-term deposits	4.8	(3.0)	1.8
    Revolving credit facility	-	(0.7)	(0.7)
    Convertible notes - principal value of term debt	(1.6)	-	(1.6)
    Net cash / (debt) position	3.2	(3.7)	(0.5)
    Shareholders equity	4.6	0.6	5.2

  • Post acquisition completion net debt of $0.5 billion

  • Xero's balance sheet strength will be maintained through the Melio transaction - pro-forma LTM net debt / EBITDA of ~0.9x2

  • Xero expects to continue generating positive cash flow following the transaction, and for this to facilitate a meaningful deleveraging profile in the coming periods

1. Net of FX impact on Convertible notes which are US dollar denominated 2. For further details refer to pro-forma EBITDA disclosure on slide 21 20

Melio contribution accelerates revenue growth, step change in US scale

XERO + MELIO COMBINED PRO-FORMA (NZ$)1

• Transaction completed 15 October, did not contribute to H1 FY26 performance

• Pro-forma provided to aid understanding of go forward business

  H1 FY25 H1 FY26 YOY Mvmt

  H1 FY26 MELIO PERFORMANCE COMMENTARY

  Revenue growth drivers

• Underlying2 YOY Melio revenue growth ~68%

• Customers up 7k since H2 FY25. YOY contraction reflects impact of previously disclosed exit of syndication customer in accounting software segment

  Total revenue $1,108m $1,378m 24%, 22% CC

  US revenue $158m $241m 53%, 49% CC

  EBITDA

  • Melio gross margin was largely flat compared to FY25, reflecting timing of product-led syndication additions. Key drivers for future expansion including scale, syndication, payment mix and subscription growth, firmly in place3

    Adj-EBITDA

    Margin

    Free cash flow

    Margin

    $252m

    23%

    $125m

    11%

    $295m

    21%

    $246m

    18%

    17%

    (2pp)

    96%

    +7pp

  • OPEX growth reflected planned investment in sales and marketing to support growth opportunity

    Free Cash flow considerations

  • Pro-forma FCF doesn't incorporate shift to net debt position. This will increase interest costs and reduce interest received (H1 FY26 benefited from interest income on higher cash balances following capital raise)

  • Accounting treatment of Melio management earnout / incentive plans will

    Rule of 404 36.2% 39.8% +3.6pp

    have an incremental ~$10m OPEX in H2 FY26. This is not reflected in pro-forma

    Melio Customers5

    90k 87k (3k)

    Acquired intangible asset amortisation

    • Xero expects an estimated value of NZ$350-490 million of amortisable intangible assets to arise from the acquisition.

      Melio TPV

      Underlying TPV 2

      $26bn

      $22bn

      $26bn

      $26bn

      1%

      18%

    • These will have a useful life of 6-8 years on average, and the related expenses will be recognised as an operating expense from H2 FY26 onwards, but have no impact on FCF or EBITDA

1. Unaudited Melio management accounts, not subject to independent review, adjusted for applicable US GAAP to IFRS differences (to align to Xero's reporting requirements). 2. Underlying revenue growth and underlying TPV (Total Payments Value) excludes the impact of the exit of a syndication customer in the accounting software segment. 3. For further details on these drivers refer to slide 32 of the Investor Presentation lodged with the ASX on 25 June 4. Rule of 40 is defined as the sum of annual revenue growth percentage in constant currency and free cashflow

margin percentage (free cash flow as a percentage of revenue) 5. Customers are defined as users who made at least one transaction in the final quarter of the reporting period. 21

STRATEGIC THEMES

Sukhinder Singh Cassidy

Chief Executive Officer

Xero Australia customers Wayne & Sallina, owners of Cheol's in Perth - cheols.com.au

Winning On Purpose

WHY WE EXIST

Purpose

To make life better for people in small business, their advisors and communities around the world

Vision

To be the most trusted and insightful small business platform

FY25-FY27 STRATEGIC PRIORITIES

Win the 3x3

Complete our JTBD and journeys in AU, UK, US

A Winning GTM Playbook

Make it easier for customers to find, use and grow with Xero

Focused Bets to Win the Future

Invest selectively to help Xero keep winning longer term

Unleash Xero(s) to Win

Enable Xero to move faster and Xeros to do the best work of their lives

WE MAKE IT BEAUTIFUL

WE MAKE IT HAPPEN

WE MAKE IT HUMAN

WE MAKE IT TOGETHER

VALUES

Underpinned by disciplined capital allocation; including a Build, Partner or Buy approach to pursue growth opportunities

CAPITAL ALLOCATION

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Well executed strategy with key wins in our 3x3, continuing to deliver value for our customers

WIN THE 3X3

• Completed Melio acquisition, bill pay for US customers coming in December 2025

• Embedded Gusto solution now live in beta to provide US payroll capabilities

• Analytics Powered by Syft rolled out to US, UK, AU

• Customisable homepage (in beta) provides an insight rich view of customers business performance

  A WINNING GTM PLAYBOOK

  
  
  

• Increasing the sophistication of our sales motions to deliver improvements in new customer mix

• Added Syft Analytics features - to different business plans to drive improved mix

• Improved payroll flexibility across UK and NZ plans with per-employee pricing for more straightforward onboarding and scaling for customers

  FOCUSED BETS TO WIN THE FUTURE

  
  
  

• Next evolution of JAX announced & in Beta rolling out incl auto bank rec and financial insights

• Partnered with OpenAI to bring integrated GenAI web research capabilities for financial information inside JAX

• AI capabilities accelerating as we continue to invest in a world-class team

• Enhanced mobile experience

  UNLEASH XERO(S) TO WIN

  
  
  

• CX wins leveraging AI continue

• Empowering all Xeros with AI tools to drive developer productivity opportunity

• Investing in improved employee development & learning opportunities 24

Financial superagent JAX to provide powerful new features

New homepages with JAX embedded

Xero's AI strategic pillars

Financial insights powered by Xero & Open AI

Reimagined experiences

Actionable insights

Auto bank reconciliation powered by JAX

Automated actions and workflows

Trusted partner

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Strategic rationale for Melio gives us strong conviction

1

SOLVES CRITICAL CUSTOMER NEED

• Accounting + Payments = critical for US SMBs

• Large and growing US SMB Payments TAM US$29b1

  2

  POWERFUL STRATEGIC FIT

  • Owning Payments critical to our 3x3 strategy

  • Delivers a step-change in US proposition & scale

MELIO:

1. WORLD-CLASS TEAM & PLATFORM

   • Consistent high growth (127% FY21-25 CAGR2)

   • Loved by customers (NPS 453) & industry recognised

   • Extends reach to millions of US SMBs

     TOGETHER:

2. COMPELLING VALUE CREATION

• Highly complementary platforms

• Improved unit economics to invest & scale the US

• Attractive long-term global growth profile for Xero

  26

  1. Total Addressable Market (TAM) estimated by Xero using government statistics, public market data, internal Xero data and commercial assumptions 2. Revenue growth based on Melio Financial Statements restated to 31 March year-end (unaudited); for further details refer to page 17 of the Investor Presentation lodged with the ASX on 25 June 2025 3. NPS calculated from internal Melio survey of 400 direct customers, conducted in December 2024 & January 2025. For further detail refer to page 20 of Investor Presentation lodged with the ASX on 25 June 2025

  Melio completion brings together world class teams & platforms to deliver value creation - Melio bill pay inside Xero, launch in December 2025

  FY26

  Integration Milestones

  • Acquisition completed 15 October 2025

  • Melio bill pay available inside Xero from Dec-2025

  • Moving quickly to leverage Xero's GTM capability & reach to drive Melio standalone growth & cross sell opportunity on Xero.com

Xero bill pay powered by Melio for US customers

…allowing businesses to manage their cash flow!

Enabling multiple ways to pay…

…and giving visibility of payment times…

27

FY26 Outlook: OPEX ratio lowered, now includes Melio

Total operating expenses as a percentage of revenue is now expected to be around 70.5% in FY261,2

Xero previously expected this ratio to be around 71.5% in FY26

This ratio is expected to be lower in H2 FY26 vs. H1 FY26 and includes the Melio business3

1 This includes an expected ~$45m from the accounting treatment of option grants and sign on from new remuneration packages. The majority of this impact will not recur in FY27

2FY26 operating expense to revenue guidance excludes any impacts of transaction costs associated with the acquisition of Melio.

Melio's incorporation into Xero's FY26 OPEX ratio provides a small benefit, with other drivers including improved efficiencies, contributing to the majority of the reduction

3This reflects the phasing of the non-recurring remuneration impacts (described above), Xerocon Brisbane, and timing of other planned investment spend. In addition, Xero expects to generate more revenue in H2 compared to H1 following its typical trend

28

Xero continues to focus on its aspirations outlined as part of the Melio acquisition

The combined business is expected to significantly accelerate US revenue growth and gives us the opportunity to more than double Xero's FY25 group revenue in FY28 excluding anticipated revenue synergies1, 2

This outcome is expected to support our aspiration to deliver greater than Rule of 40 outcomes for the group in FY283, 4, 5

1. Anticipated FY28 revenue synergies are expected to be ~US$70m, for more detail refer page of 27 of the Investor Presentation lodged with the ASX on 25 June 2025. Assuming constant currency conversion of NZ$/US$ 0.57, NZ$/AU$ 0.91 and NZ$/GBP 0.46

2. FY25 revenue was NZ$2,103m. This statement applies to FY28 only and no implication should be made relating to any other financial year

3. In the interim period prior to FY28, Xero expects to deliver below Rule of 40 outcomes on a pro forma basis (pro forma refers to adjusting for inorganic revenue growth benefits from the time of transaction completion by comparing to a prior year revenue base that fully incorporates Melio's revenue)

4. Assessed including both expected revenue and expected cost synergies outlined on page 27 of the Investor Presentation lodged with the ASX on 25 June 2025

5. Rule of 40 is defined as the sum of annual revenue growth percentage in constant currency and FCF margin percentage (free cash flow as a percentage of

revenue) 29

Wrap up of H1 FY26 key themes

Sustained, strong revenue growth across our 3x3 portfolio

Continuing to deliver above Rule of 40, strong cash generation

Well executed strategy with key wins in our 3x3, continuing to deliver value for our customers as we aspire to be a world class SaaS business

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