WELLINGTON, March 5, 2026, 20:34 (UTC+13)
- Xero’s latest Small Business Insights update pointed to a slowdown in U.S. sales growth expected by late 2025, though payment times have actually gotten better.
- Xero said small-business sales growth in Canada slipped into negative territory for the December quarter.
- Xero shares finished Thursday’s session in Sydney in positive territory, market data showed.
Xero Limited reported that U.S. small business sales growth cooled to 0.9% year-on-year for the October-December stretch, marking the slowest rate since late 2023, according to its Small Business Insights data. “The December quarter showcased just how quickly conditions can shift,” Xero economist Louise Southall said. Xero
The update is getting attention—investors and policymakers are combing through for any cracks beneath the big economic stats and what’s showing up in stocks. Xero puts this series together with anonymized, aggregated numbers from its customers, tracking things like sales trends and how invoices are paid. “Late payments” looks at days overdue, and “time to be paid” tracks the full stretch from billing to cash in hand. Xero
Xero (ASX:XRO) is feeling the pressure. The Wellington-based company offers a cloud platform that combines accounting, payroll, and payments—all aimed at small businesses. It’s up against competitors like Intuit’s QuickBooks and Sage in that crowded market.
Xero’s U.S. series pegged 2025 sales growth at 2.4%—that’s roughly half the typical long-term pace—even as the S&P 500 climbed about 17% and nominal GDP averaged 5.1%. The company said sales growth clocked in at 4.1% for July through September, then slowed sharply to just 0.9% in the last quarter, despite Fed rate cuts in both October and December. Xero attributed the pullback to tariff impacts and ongoing policy uncertainty.
Payment data swung the opposite direction, according to the company. Late payments dropped to 7.8 days in the December quarter—down from 9.3 days in March. Average time to be paid slipped as well, coming in at 27.9 days. “Xero’s data shows two trends moving in different directions,” said Andrew Kanzer, Xero’s managing director for North America. Xero
Canada came off even weaker: Xero’s data from roughly 12,000 clients showed sales growth dropped 4.1% year-over-year for October through December—marking the sharpest quarterly slide since 2020. British Columbia slumped 8.2%. Alberta did relatively better. “Small businesses are feeling the real impact of a fractured global economy,” said Southall. The environment is “irregular and unpredictable” for owners trying to plan, added Ashalee Mohamed, Xero’s Canadian go-to-market lead. Xero
Xero finished Thursday’s session in Sydney up 4.26% at A$83.89, building on Wednesday’s 2.03% gain, according to Investing.com data.
Xero’s readouts, though, reflect trends within its own customer base and don’t always line up with wider surveys—particularly as sectors and regions often diverge. Should demand continue to fall, gains in payment times might quickly reverse, putting fresh cash flow pressure on the smallest firms.
Xero will release its full-year results for the year ended March 31 on May 14. Investors are watching that update closely for any signs that customer activity is reflecting the late-2025 slowdown.
