Which stocks have the potential to become the best performing ASX tech stocks in 2026?

These ASX technology companies delivered strong FY26 growth through AI expansion, rising revenue, higher subscriptions and improving profits.

Xero Limited (ASX: XRO)

Xero Limited on 14 May 2026, reported FY26 revenue of $2.8 billion, increased 31% whereas adjusted EBITDA increased 18% to $757.4 million. Free cash flow reached $554 million and customer numbers grew by 506,000. The company also announced a share buyback of up to A$550 million in FY27 to offset staff share-based compensation dilution.

Australia and New Zealand revenue rose 18% to $1.4 billion with customers increasing to 2.8 million. International revenue climbed 47% to $1.4 billion helped by strong US momentum and growth in the UK market. US revenue increased sharply following the Melio acquisition and expansion in payments services.

During FY26, Xero expanded AI tools including JAX, automated bank reconciliation and smart document capture. The company also introduced XeroForce, an AI agent builder for accountants and small businesses, currently in invite only alpha.

For FY27, revenue guidance is between $3.62 billion and $3.73B with adjusted EBITDA expected between $860 million and $920 million. Xero also maintained its FY28 target of achieving greater than Rule of 40 outcomes.

Technology One Limited (ASX: TNE)

Technology One Limited On 19 May 2026, said strong demand for SaaS+ products and AI solutions continued to support growth and the company reaffirmed its upgraded FY26 guidance announced earlier in February 2026.

For H1 FY26, profit before tax increased 9% to $89.1 million though profit after tax rose 6% to $66.8 million. ARR grew 17% to $598 million, total revenue increased 11% to $322.7 million and UK ARR climbed 23% to $53 million. The company also reported a Rule of 40 result of 55% and raised its interim dividend by 21% to 8.0 cents per share.

During the half year, TechnologyOne expanded its AI strategy through Plus, Guide and in-product AI tools. These products are designed to automate tasks, predict business needs and improve services for councils, universities and other customers using conversational AI.

The company maintained FY26 guidance for 18% to 20% profit growth and ARR growth of 16% to 18% whereas continuing investment in AI, Showcase and SaaS+ initiatives.

Life360, Inc. (ASX: 360)

Life360, Inc. on 12 May 2026, reported having achieved record Q1 2026 results with total revenue rising 38% year-on-year to $143.1 million. Annualized monthly revenue increased 32% to $517.9 million although advertising revenue reached a record $19.7 million.

The company ended the quarter with around 97.8 million monthly active users, up 17% from last year. Paying Circles grew 27% to 3.0 million after adding 201,000 net new Paying Circles during the quarter. Average revenue per Paying Circle also increased due to higher priced subscription plans in some international markets.

During Q1 2026, subscription revenue raised to $108.2 million and adjusted EBITDA reached $17.1 million. The operating cash flow increased 42% to $17.2M.

For FY26, Life360 increased its revenue guidance to $650 million–$685M and adjusted EBITDA guidance to $130 million–$140 million. The company also said AI is improving product features, advertising performance, customer support and internal efficiency.

(Source: Company Report)