Xero vs WiseTech: Which Fallen ASX Tech Stock Has More Upside?

Xero and WiseTech Global are two prominent ASX-listed technology stocks with potential for recovery, supported by their business fundamentals. Both companies have reported revenue growth and are integrating AI into their core business offerings amid concerns about the technology's potential impact on their businesses.

Xero Limited (ASX: XRO)

Xero Limited (ASX: XRO) is one of the leading ASX technology stocks, currently trading with a market capitalisation of $9.86 billion.

Xero's FY26 Financial Performance

On 14 May 2026, Xero announced its FY26 results for the period ended March 2026. Operating revenue increased by 31% year-on-year (YoY) to NZ$2.8 billion, supported by organic growth of 21% YoY.

Customer numbers grew by 11% YoY to 4.9 million, while new customer additions almost doubled, recording 99% growth to 506,000.

Average revenue per customer increased by 23% YoY to NZ$55.44, while annualised monthly recurring revenue rose by 37% to approximately NZ$3.3 billion. Total customer lifetime value (LTV) grew by 17% YoY to NZ$21 billion.

Xero's gross margin declined by 5.1 percentage points to 83.9%. The operating expense-to-revenue ratio stood at 70.5%, excluding Melio-based transaction costs.

Adjusted EBITDA increased by 18% YoY to NZ$757 million, an absolute increase of NZ$116 million, with organic growth of 30% YoY.

The company reported a net profit after tax of NZ$167.4 million, while free cash flow increased by 9% YoY to NZ$554 million.

Xero's FY27 Outlook

Xero expects to generate operating revenue of NZ$3.6 billion to NZ$3.7 billion in FY27. Adjusted EBITDA is expected to range between NZ$860 million and NZ$920 million.

The company also expects a higher-than-historical proportion of adjusted EBITDA to be delivered in the second half of FY27.

WiseTech Global Limited (ASX: WTC)

WiseTech Global Limited (ASX: WTC) is one of the leading ASX technology stocks, currently trading with a market capitalisation of $10.84 billion.

WiseTech Global's FY26 Financial Performance

On 26 August 2026, WiseTech Global announced its FY26 results for the period ended June 2026. Total revenue increased by 79% YoY to approximately US$1.4 billion, with recurring revenue accounting for 95%.

EBITDA grew by 46% YoY to US$558.4 million, with an EBITDA margin of 40%. Underlying net profit after tax (NPAT) increased by 29% YoY to US$313.5 million.

WiseTech Global reported free cash flow of US$410.7 million, representing growth of 43% YoY, with a free cash flow conversion rate of 74%.

The company determined a fully franked final ordinary dividend of US$0.088 per share, representing a 14% YoY increase. The dividend payout ratio stood at 17% of underlying profit after tax.

WiseTech Global's Debt Position

WiseTech Global has a debt facility of US$3 billion, of which US$2.2 billion is outstanding.

Its cash balance reached US$343.5 million, while its net leverage ratio stood at 2.7x, below the previous guidance of approximately 3.0x.

WiseTech Global's FY27 Outlook

WiseTech Global anticipates revenue growth of 6% to 10% in FY27, with expected revenue ranging from US$1.48 billion to US$1.54 billion.

The company expects to generate underlying EBITDA of US$725 million to US$780 million in FY27, reflecting growth of 12% to 21% and an EBITDA margin of 49% to 51%.

Conclusion: Xero vs WiseTech Global

Xero and WiseTech Global are recovering from recent share price falls amid the AI boom and concerns about its potential adverse impact on their core businesses. Both companies have enabled AI integration into their core business offerings to address these concerns.

Xero appears attractive in terms of potential future upside, supported by its US expansion, AI integration and a relatively superior long-term growth outlook.

Source: Company announcements.