Top ASX Stocks with Strong Operational Strength to Watch in 2026

XRO and PME delivered strong results during the year with commendable operational performance. Take a look at the factors driving it.

Xero Limited (ASX: XRO)

As on 14 May 2026, published its March ending full year results for FY26, reflecting a strong performance as operating revenue went up by 31% to NZ$2.75 billion while reporting an 18% increment in adjusted EBITDA to NZ$757 million.

The annual monthly recurring revenue (AMRR) increased by 37% with customers rising up by 11% to around 4.9 million and ARPC reaching NZ$55.44, showcasing strong customer acquisition and retention capabilities.

The growth was primarily driven by international markets as the revenue in that region increased by 47% while ARPC rising by 28% to NZ$63.74. Australia and New Zealand region also performed well with 18% revenue growth and ARPC reaching NZ$48.89, contributing to the overall growth of the company.

Xero Limited has a market capitalisation of approximately $13.54 billion with a free cash flow of NZ$554 million by the year end. It is heavily investing in AI to smoothen its operations and make the process easier for its customers. In FY26, Xero extended its AI strategic partnerships through a new agreement with Anthropic to integrate Claude’s AI into Xero, alongside a secure connector into Claude.ai, which was rapidly developed and deployed to customers in May 2026. This augments Xero’s existing partnership with OpenAI, bringing the power of multiple AI platform providers to users across our various agents.

Looking ahead, the company expects operating revenue between NZ$3.62 - 3.73 billion with an estimated adjusted EBITDA of NZ$860 - 920 million. The product capitalisation rates are expected to be similar to the long term range of 40-45% with amortization and depreciation expenses to remain around NZ$465 million in FY27.

Pro Medicus Limited (ASX: PME)

On 21 August 2026, announced that it has signed a 7-year, $25 million contract with Valley Health based in Winchester, Virginia. Valley Health includes 6 hospitals, spanning the northern Shenandoah Valley of Virginia and the Eastern Panhandle of West Virginia. Planning for the rollout commenced immediately and will be based on Visage’s proven cloud-based implementation process, with go-live targeted for Q1 of CY27.

The company announced its FY26 results on 18 August 2026, delivering robust performance as the revenue went up by 22.9% to $261.7 million with underlying EBIT and underlying NPAT rising by around 24% both. The company recorded a NPAT of $265.3 million, a 130% surge, which majorly includes fair value gains on assets and interest.

North America region contributes about 90% in the total revenue with a 24% growth while Europe grew by 37.2% but the number is quite small with Australia’s growth of 7.3%, being quite low comparatively.

Pro Medicus has a market capitalisation of approximately $18.17 billion and has signed multiple new and recurring contracts during the year, reflecting strong customer conviction in its operations.

With its Visage imaging software being in great demand alongside various other services, the company positions itself strongly for in the future race, indicating a powerful long-term growth.

(Source: Company Announcements)