Are these 2 ASX 200 shares too undervalued to ignore in 2026?

Life360 and Xero achieved strong FY26 results, showing solid growth, better profits and strong future outlook.

Life360 (ASX: 360) 

shared its Q1 2026 results for the quarter ended 31 March 2026 on 12 May 2026. The total revenue increasing 38% year over year to $143.1M. Subscription revenue reached $108.2 million whereas Annualized Monthly Revenue grew 32% to $517.9 million. Advertising revenue was a record $19.7 million, increased 329% from the same period last year.

User growth remained strong during the quarter. Monthly Active Users increased by 1.9 million to approximately 97.8 million showing 17% annual growth. Paying Circles grew by 201,000 in Q1 bringing the total to 3.0 million, up 27% year over year. Average revenue per Paying Circle also increased by 7%, helped by greater adoption of higher priced plans in selected international markets.

360 continued to generate positive cash flow and maintain a strong balance sheet. Adjusted EBITDA was $17.1 million whereas operating cash flow reached $17.2 million, increased 42% from a year earlier. Cash, cash equivalents, restricted cash and short term investments totaled $459.0 million at quarter end.

For FY2026, Life360 raised its revenue outlook to $650 million-$685 million. 360 expects subscription revenue of $470 million to $475M and advertising revenue of $98 million to $115 million. Also, the projects hardware revenue of $40 million to $50 million and other revenue of $42 million to $45M. Adjusted EBITDA is likely to be between the $130 million and $140 million.

Xero Limited (ASX: XRO) 

Xero Limited shared its FY26 results for the year ended 31 March 2026 on 14 May 2026. The revenue rose 31% to $2.8 billion and adjusted EBITDA increased 18% to $757.4 million. EBITDA touched $789.5M. The result showed strong growth along with better efficiency across operations.
During the year, the company added 506,000 customers and lifted annualised monthly recurring revenue by 37% to $3.3 billion. Total customer lifetime value reached $21.0 billion, increased 17%. Average monthly churn stayed low at 1.14%. Australia and New Zealand revenue grew 18% to $1.4 billion whereas international revenue also reached $1.4 billion, increasing 47%. The US market showed strong momentum with revenue rising sharply and customer growth supported by payments expansion.

The business continued investing in technology and AI. It introduced new AI powered tools, expanded partnerships and scaled automation features across accounting and payments workflows. Adoption of new AI features reached 500,000 users and transaction automation improved efficiency at scale. A new custom AI agent builder was also introduced to help businesses automate financial tasks using simple prompts.

For FY27, XRO expects revenue between $3,620 million and $3,730M with adjusted EBITDA of $860 million to $920 million. The outlook includes higher marketing spending in the US and expects stronger performance in the second half of the year. The company also showed long term plans for FY28 including further growth in the US, improved platform scale and continued focus on the expanding its financial software ecosystem.

(Source: Company Report)