The ‘SaaS-pocalypse’ doesn’t scare this accounting software CFO

Earlier this year, the so-called “SaaS-pocalypse” hit the stock market. Fearing that AI agents and tools like Claude’s Cowork could make traditional software obsolete, investors pulled money out of SaaS companies.

The sector lost more than $1 trillion in market capitalization in just one bruising week in February. New Zealand-based and Australia-listed accounting software company Xero was among the companies hit. Its stock was down nearly 23% year-to-date on March 5. But its CFO, Claire Bramley, is convinced Xero has what it takes to ride out AI disruption.

“Clearly there’s been a meaningful sector-wide de-rating in software and SaaS, and it’s clearly driven by AI disruption fears,” the former CFO of Teradata and global controller of HP told CFO Brew. But she’s quick to point out that the stock dip had “nothing to do with near-term fundamentals.” During a November investor briefing, Xero reported that its operating revenue was up 20% year over year. Subscriptions had grown by 10% worldwide, and revenue per user was up 15%.

Advantages. As differentiators, Xero, which sells to small businesses and to accounting and advisory firms, has a platform that clients trust with sensitive personal financial information like bank accounts, and it has data from more than 4 million customers that its own AI agents can draw upon to help organizations make “tailored financial insights.”

Bramley said she expects SaaS stocks to stay choppy for the near future. “I’m not expecting a big pop tomorrow,” she said. “I think it will be volatile for a while until the true winners emerge.”

Xero’s small-business focus may also help. Part of the SaaS sell-off was prompted by fears that more organizations will start vibe-coding their own software. But that’s not what small businesses want, Bramley said. “What we’re getting feedback on is” that they want AI to “just make life easier for me,” she said. “Most small businesses don’t want to have to do coding or create things themselves.” Customers like Xero’s also want “a control system that is really reliable,” she said, and accuracy and privacy matter to them.

That said, the possibility of AI disruption may cause Xero to reconsider its pricing model.

During the SaaS stock dip, pundits questioned the viability of SaaS companies’ price-per-seat strategy. Xero is considering moving to a “hybrid monetization model,” Bramley said, with a base subscription that includes “meaningful AI features” plus “usage links, top-ups, add-on-type offerings for the heavier users to leverage over time.” Buyers are looking for those “choice points,” she said: They’re “willing to pay” for upgrades, “but they don’t want to feel like it’s not transparent or that it’s difficult to monitor.”

Coming to America: In 2025, the company acquired US-Israeli payments software company Melio in a deal worth around $3 billion. The goal, Bramley said, was to make Xero more competitive in the US market.

“We are very underrepresented in the US,” she said. There are only 419,000 Xero subscribers in North America, versus 2.02 million in Australia and 1.21 million in the UK. Still, the company’s made inroads of late. In the first half of fiscal year 2026, North American revenue was up 21% year over year, and subscriptions had risen 15%.

Melio has 80,000 subscribers who could potentially be converted to Xero customers. The payments capability it brings also makes Xero more attractive to potential buyers. “Being able to go in not just with an accounting software but with a payments offering first, that’s a good way, obviously, to get in the door,” Bramley said.

The Melio math just made sense, according to Bramley, a self-described “bit of a nerdy accountant” who knew she wanted to go into accounting or finance at age 14. Being able to offer payments is “a very big uplift to just pure accounting,” she said.

Tracking performance. Ultimately, Bramley strives to make sure Xero’s big US bet is bolstered by strong fundamentals.

She focuses on “having a very disciplined return on investment approach” for large expenses such as engineering or brand marketing, and pays close attention to productivity measures such as revenue per full-time employee. Though she monitors metrics like the Rule of 40, she doesn’t steer the company too far in the direction of either profitability or growth. The goal isn’t to make “knee-jerk reactive decisions” due to headlines or share prices, she said, but to consider, “are we doing what’s right for our business over the medium to long term?”