Why are Xero shares flying 12% higher today?

Detailed summary

Find out why investors are flocking to the stock today. The post Why are Xero shares flying 12% higher today? appeared first on The Motley Fool Australia.

Xero Ltd (ASX: XRO) shares have soared higher in Thursday morning trade.

At the time of writing, the technology shares are up around 12% and changing hands at $79.66 apiece.

The increase means the shares have now climbed 29% over the past month, and have rebounded 42% from a multi-year low of $55.31 on the 1st of October.

There's still some way for the share to go until they recoup the losses shed this year. Xero shares are 29% lower for the year to date. They're also around 43% lower than 12 months ago.

The cloud accounting platform provider released its eagerly anticipated half-year FY27 results ahead of the market open this morning.

Its first-half FY27 revenue grew 46% (41% in constant currency) to NZ$1.7 billion. Its operating expense to revenue ratio of 68.9%, improved by 8.1 percentage points.

Adjusted EBITDA, which excludes one-off and non-cash revaluation impacts, increased 3% to NZ$362 million.

Xero said that its growth was tempered by the incorporation of Melio (in H1 FY27 only).

On a pro-forma basis, adjusted EBITDA was up 23%. This translates to free cash flow of NZ$238 million, up 32% on a pro-forma basis.

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