Xero is a leading cloud-based accounting software company that has seen remarkable growth since its listing on the ASX. Targeting small to medium-sized enterprises (SMEs), Xero provides tools for invoicing, payroll, bank reconciliation, tax management, and financial reporting—all through a user-friendly, subscription-based platform. Its recurring revenue model offers consistency and predictability, making it attractive to long-term investors.

Xero is considered a growth stock because of its software-as-a-service (SaaS) model with recurring revenue, expanding global market penetration and synergies from acquisitions like Melio (a US fintech platform). Continued innovation in AI and payments, and the massive total addressable market of SMB accounting and financial services globally, support its long-term growth trajectory even if short-term share price volatility persists.

For the year ended 31 March 2025, Xero reported operating revenue of NZ$2.1bn, up about 23% on the previous year, with adjusted EBITDA growing by more than 22% and strong free cash flow of roughly NZ$507m, demonstrating that growth is translating into improved profitability. Subscriber numbers exceeded 4.4 million, and annualised monthly recurring revenue (AMRR) rose by roughly 22%, highlighting the strength and stickiness of its subscription model

Megaport operates a Network-as-a-Service (NaaS) platform that provides on-demand connectivity between businesses and cloud providers across a global infrastructure. Its service allows enterprises to dynamically scale network capacity without owning physical infrastructure, tapping into major cloud, data centre and internet exchange ecosystems worldwide. This software-defined networking strategy positions Megaport at the centre of digital transformation, hybrid cloud adoption and increasing demand for scalable network services tied to AI, analytics and distributed computing.

In FY25 (year ended 30 June 2025), Megaport delivered record results: total revenue of A$227.1 million, up ~16% year-on-year, and Annual Recurring Revenue (ARR) of A$243.8 million, up 20%. EBITDA grew modestly as the company deliberately reinvested in expansion initiatives, and cash holdings strengthened to about A$102 million with positive net cash. ARR growth underscores recurring, predictable revenue — a key trait for growth investors.

Megaport is considered a growth stock because its network platform benefits from rapid digital and cloud migration, rising enterprise demand for flexible connectivity, and strong net retention rates (over 100% ARR retention). The company is also scaling into compute, GPU-as-a-service and internet exchange segments, broadening its addressable market. Early FY26 data shows continued ARR acceleration, reinforcing its long-term revenue potential.

Pro Medicus is a global medical imaging technology company best known for its Visage imaging platform — advanced, cloud-based software used by major hospitals and health systems to manage and interpret medical images. The platform’s scalability, speed and integration into clinical workflows have earned it strong adoption, particularly in the United States. High switching costs and long-term contracts underpin recurring revenue and enhance earnings visibility, while medical imaging demand continues to grow with ageing populations and higher healthcare diagnostics utilisation.

Pro Medicus’s most recent financial year results continued to showcase revenue and profit growth as it upsells services and expands its client footprint. While exact figures vary by reporting period, the company has consistently delivered double-digit growth in revenue and statutory profit margins, with new long-term service agreements adding to near-term earnings. Analysts have highlighted strong margins relative to peers and significant pipeline expansion.

Pro Medicus is considered a growth stock due to its high-quality software franchise, scalable global sales model, long contracts with hospital networks, and increasing demand for digital imaging and health-tech solutions. Its work in advanced visualization tools and AI augments growth potential, as health systems continue digital transformation.