yahoo_default_logo-1200x1200.png

SAN JOSE, Calif., February 02, 2023–(BUSINESS WIRE)–BILL (NYSE: BILL), a leader in financial automation software for small and midsize businesses (SMBs), today announced financial results for the second fiscal quarter ended December 31, 2022.

“We delivered strong second quarter results and achieved another quarter of non-GAAP profitable growth as we executed on our strategy to be the essential financial operations platform for SMBs,” said René Lacerte, BILL CEO and Founder. “As champions of SMBs, we are proud that our solutions empowered more than 400,000 businesses to automate their financial operations, gain more visibility and control of their spend, and focus more of their time on running their businesses.”

“In Q2, we delivered revenue growth of 66% year-over-year and record non-GAAP gross margin, non-GAAP net income, and free cash flow,” said John Rettig, BILL CFO. “Our performance demonstrates the durability of our business model regardless of the macro environment and our diligent execution to deliver balanced growth, profitability and cash flow.”

Financial Highlights for the Second Quarter of Fiscal 2023:

The financial measures listed below identified as BILL standalone exclude the results of Divvy and Invoice2go.

  • Total revenue was $260.0 million, an increase of 66% year-over-year.

  • Core revenue, which consists of subscription and transaction fees, was $231.1 million, an increase of 49% year-over-year.

    • Subscription fees were $61.5 million, up 25% year-over-year. This includes $52.7 million of subscription fees from the BILL standalone platform, which increased 31% year-over-year.

    • Transaction fees were $169.6 million, up 59% year-over-year. This includes $80.4 million of transaction fees from the BILL standalone platform, which increased 42% year-over-year, and $86.6 million of transaction fees from our Divvy spend management solution, which increased 78% year-over-year.

  • Float revenue, which consists of interest on funds held for customers, was $28.9 million.

  • Gross profit was $212.5 million, representing an 81.7% gross margin, compared to $122.1 million, or a 78.0% gross margin, in the second quarter of fiscal 2022. Non-GAAP gross profit was $225.4 million, representing an 86.7% non-GAAP gross margin, compared to $133.5 million, or a 85.3% non-GAAP gross margin, in the second quarter of fiscal 2022.

  • Loss from operations was $112.5 million, compared to a loss from operations of $76.1 million in the second quarter of fiscal 2022. Non-GAAP income from operations was $30.8 million, compared to a non-GAAP income from operations of $3.4 million in the second quarter of fiscal 2022.

  • Net loss was $95.1 million, or ($0.90) per share, basic and diluted, compared to net loss of $80.4 million, or ($0.78) per share, basic and diluted, in the second quarter of fiscal 2022. Non-GAAP net income was $49.4 million, or $0.42 per diluted share, compared to non-GAAP net loss of $0.2 million, or ($0.00) per share, basic and diluted, in the second quarter of fiscal 2022.

Business Highlights and Recent Developments

The metrics listed below identified as BILL standalone exclude the results of Divvy and Invoice2go.

  • Completed the acquisition of Finmark, a financial planning and cash flow insights software company.

  • Served 435,800 businesses using our solutions as of the end of the second quarter. This includes 182,700 BILL standalone customers, 24,700 spending businesses that used Divvy, and 228,500 subscribers that used Invoice2go.

  • Processed $67.3 billion in total payment volume in the second quarter, an increase of 15% year-over-year. This includes $63.7 billion of total payment volume on our BILL standalone platform, an increase of 13% year-over-year, and $3.3 billion in total card payment volume for Divvy, an increase of 76% year-over-year.

  • Processed 20.8 million transactions during the second quarter, an increase of 34% year-over-year. This includes 11.0 million transactions on our BILL standalone platform, representing an increase of 12% year-over-year, and 9.4 million Divvy card transactions, an increase of 77% year-over-year.

  • Announced that its Board of Directors approved a share repurchase program with authorization to purchase up to $300 million of BILL’s common stock.

Financial Outlook

We are providing the following guidance for the fiscal third quarter ending March 31, 2023 and the full fiscal year ending June 30, 2023.

Q3 FY23

Guidance

FY23

Guidance

Total revenue (millions)

$245 – $248

$999 – $1,007

Year-over-year total revenue growth

47% – 49%

56% – 57%

Non-GAAP net income (millions)

$26.5 – $29.5

$117.5 – $125.5

Non-GAAP net income per diluted share

$0.22 – $0.25

$0.99 – $1.05

These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

BILL has not provided a reconciliation of non-GAAP net income or non-GAAP net income per share guidance measures to the most directly comparable GAAP measures because certain items excluded from GAAP cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort.

Conference Call and Webcast Information

In conjunction with this announcement, BILL will host a conference call for investors at 1:30 p.m. PT (4:30 p.m. ET) today to discuss fiscal second quarter 2023 results and our outlook for the fiscal third quarter ending March 31, 2023 and the fiscal year ending June 30, 2023. The live webcast and a replay of the webcast will be available at the Investor Relations section of BILL’s website: https://investor.bill.com/events-and-presentations/default.aspx.

About BILL

BILL (NYSE: BILL) is a leader in financial automation software for small and midsize businesses (SMBs). As a champion of SMBs, we are dedicated to automating the future of finance so businesses can thrive. Hundreds of thousands of businesses trust BILL solutions to manage financial workflows, including payables, receivables, and spend and expense management. With BILL, businesses are connected to a network of millions of members, so they can pay or get paid faster. Through our automated solutions, we help SMBs simplify and control their finances, so they can confidently manage their businesses, and succeed on their terms. BILL is a trusted partner of leading U.S. financial institutions, accounting firms, and accounting software providers. BILL is headquartered in San Jose, California. For more information, visit bill.com.

Note on Forward-Looking Statements

This press release and the accompanying conference call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements other than statements of historical facts, and statements in the future tense. Forward-looking statements are based on our expectations as of the date of this press release and are subject to a number of risks, uncertainties and assumptions, many of which involve factors or circumstances that are beyond our control. These statements include, but are not limited to, statements regarding our expectations of future performance, including guidance for our total revenue, non-GAAP net income, and non-GAAP net income per share for the fiscal third quarter ending March 31, 2023 and full fiscal year ending June 30, 2023, our expectations for the growth of demand on our platform and the expansion of our customers’ utilization of our services. These risks and uncertainties include, but are not limited to, macroeconomic factors, including interest rate, inflationary and recessionary environments, fluctuations in foreign exchange rates, instability and the global impact of the ongoing war in Ukraine, the coronavirus pandemic (COVID-19), variants thereof, and their impact on our employees, customers and strategic partners and on supply chains and labor markets, our history of operating losses, our recent rapid growth, the large sums of customer funds that we transfer daily, the risk of loss, errors and fraudulent activity, the market, interest rate, foreign exchange and other conditions that the customer funds we hold in trust are subject to, our ability to attract new customers and convert trial customers into paying customers, our ability to develop new products and services, increased competition or new entrants in the marketplace, potential impacts of acquisitions and investments, including our ability to integrate Divvy and Invoice2go, our accounting for and internal controls related to Divvy and Invoice2go operating results, changes in staffing levels, and other risks detailed in registration statements and periodic reports we file with the Securities and Exchange Commission (SEC), including our quarterly and annual reports, which may be obtained on the Investor Relations section of BILL’s website (https://investor.bill.com/financials/sec-filings/default.aspx) and on the SEC website at www.sec.gov. You should not rely on these forward-looking statements, as actual results may differ materially from those contemplated by these forward-looking statements as a result of such risks and uncertainties. All forward-looking statements in this press release are based on information available to us as of the date hereof. We assume no obligation to update or revise the forward-looking statements contained in this press release or the accompanying conference call because of new information, future events, or otherwise.

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain, and the conference call will contain, non-GAAP financial measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP net income (loss) and non-GAAP net income (loss) per share, basic and diluted. The non-GAAP financial information is presented for supplemental informational purposes only and is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP.

Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. Items excluded from non-GAAP gross profit and non-GAAP gross margin include amortization of certain intangible assets, stock-based compensation and related payroll taxes, and depreciation expense. Items excluded from non-GAAP operating expenses include amortization of certain intangible assets, stock-based compensation and related payroll taxes, depreciation expense, and acquisition and integration-related expenses. Items excluded from non-GAAP net income (loss) and non-GAAP net income (loss) per share include stock-based compensation expense and related payroll taxes, depreciation expense, amortization of certain intangible assets, acquisition and integration-related expenses, amortization of debt premium and issuance costs, and income tax effect associated with acquisitions. It is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

We adjust the following items from one or more of our non-GAAP financial measures:

Stock-based compensation and related payroll taxes. We exclude stock-based compensation, which is a non-cash expense, and related payroll taxes from certain of our non-GAAP financial measures because we believe that excluding these items provide meaningful supplemental information regarding operational performance. In particular, companies calculate stock-based compensation expenses using a variety of valuation methodologies and subjective assumptions while the related payroll taxes are dependent on the price of our common stock and other factors that are beyond our control and do not correlate to the operation of our business.

Depreciation expense. We exclude depreciation expense from certain of our non-GAAP financial measures because we believe that excluding this non-cash expense provides meaningful supplemental information regarding operational performance. Depreciation expense does not include amortization of capitalized internal-use software costs.

Amortization of intangible assets. We exclude amortization of acquired intangible assets from certain of our non-GAAP financial measures because we believe that excluding this non-cash expense provides meaningful supplemental information regarding our operational performance.

Acquisition and integration-related expenses. We exclude acquisition and integration-related expenses from certain of our non-GAAP financial measures because these costs would have not otherwise been incurred in the normal course of our business operations. In addition, we believe that acquisition and integration-related expenses are non-recurring charges unique to a specific acquisition. Although we may engage in future acquisitions, such acquisitions and the associated acquisition and integration-related expenses are considered unique and not comparable to other acquisitions.

Amortization of debt premium and issuance costs. We exclude amortization of debt issuance costs associated with our issuance of our convertible senior notes and credit agreement and accretion of debt premium associated with our credit agreement from certain of our non-GAAP financial measures because we believe that excluding this non-cash interest expense provides meaningful supplemental information regarding our operational performance.

Income tax effect associated with acquisitions. We exclude the income tax effect associated with acquisitions from certain of our non-GAAP financial measures because we believe that excluding this provides meaningful supplemental information regarding our operational performance.

There are material limitations associated with the use of non-GAAP financial measures since they exclude significant expenses and income that are required by GAAP to be recorded in our financial statements. Please see the reconciliation tables at the end of this release for the reconciliation of GAAP and non-GAAP results.

Free Cash Flow

Free cash flow is a non-GAAP measure that we calculate as net cash provided by (used in) operating activities, adjusted by purchases of property and equipment and capitalization of internal-use software costs. We believe that free cash flow is an important liquidity measure of the cash (if any) that is available, after capital expenditures, for operational expenses and investment in our business. Free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash. One limitation of free cash flow is that it does not reflect our future contractual commitments. Additionally, free cash flow does not represent the total increase or decrease in our cash balance for a given period. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth.

BILL.COM HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

December 31,
2022

June 30,
2022

ASSETS

Current assets:

Cash and cash equivalents

$

1,616,758

$

1,596,542

Short-term investments

1,066,538

1,108,493

Accounts receivable, net

31,261

24,045

Acquired card receivables, net

380,895

256,392

Prepaid expenses and other current assets

178,688

151,258

Funds held for customers

3,474,048

3,142,660

Total current assets

6,748,188

6,279,390

Non-current assets:

Operating lease right-of-use assets, net

72,725

76,445

Property and equipment, net

69,383

56,985

Intangible assets, net

401,869

432,583

Goodwill

2,396,509

2,362,893

Other assets

49,600

47,730

Total assets

$

9,738,274

$

9,256,026

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

14,262

$

9,948

Accrued compensation and benefits

31,021

29,004

Deferred revenue

30,358

31,868

Other accruals and current liabilities

181,551

120,080

Borrowings from revolving credit facility, net

75,097

Customer fund deposits

3,474,048

3,142,660

Total current liabilities

3,731,240

3,408,657

Non-current liabilities:

Deferred revenue

2,013

2,159

Operating lease liabilities

78,207

82,728

Borrowings from revolving credit facility, net

112,570

Convertible senior notes, net

1,701,397

1,697,985

Other long-term liabilities

28,970

20,803

Total liabilities

5,654,397

5,212,332

Commitments and contingencies (Note 12)

Stockholders’ equity:

Common stock

2

2

Additional paid-in capital

4,811,780

4,598,737

Accumulated other comprehensive loss

(6,361

)

(10,217

)

Accumulated deficit

(721,544

)

(544,828

)

Total stockholders’ equity

4,083,877

4,043,694

Total liabilities and stockholders’ equity

$

9,738,274

$

9,256,026

BILL.COM HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands except per share amounts)

Three Months Ended
December 31,

Six Months Ended
December 31,

2022

2021

2022

2021

Revenue

$

260,006

$

156,478

$

489,930

$

274,827

Cost of revenue

Service costs (1)

36,965

24,338

71,786

45,051

Depreciation and amortization of intangible assets (2)

10,502

10,048

20,789

19,170

Total cost of revenue

47,467

34,386

92,575

64,221

Gross profit

212,539

122,092

397,355

210,606

Operating expenses

Research and development (1)

78,910

51,377

154,030

93,261

Sales and marketing (1)

164,683

69,896

283,308

123,525

General and administrative (1)

69,381

64,965

136,119

122,480

Depreciation and amortization of intangible assets (2)

12,028

11,929

24,055

21,620

Total operating expenses

325,002

198,167

597,512

360,886

Loss from operations

(112,463

)

(76,075

)

(200,157

)

(150,280

)

Other income (expenses), net

17,022

(5,000

)

22,970

(8,475

)

Loss before benefit from income taxes

(95,441

)

(81,075

)

(177,187

)

(158,755

)

Benefit from income taxes

(365

)

(635

)

(471

)

(4,056

)

Net loss

$

(95,076

)

$

(80,440

)

$

(176,716

)

$

(154,699

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.90

)

$

(0.78

)

$

(1.68

)

$

(1.56

)

Weighted-average number of common shares used to compute net loss per share attributable to common stockholders, basic and diluted

105,906

102,910

105,494

99,401

____________________________________

(1) Includes stock-based compensation expense as follows:

Three Months Ended
December 31,

Six Months Ended
December 31,

2022

2021

2022

2021

Cost of revenue

$

2,298

$

1,285

$

4,299

$

2,412

Research and development

26,981

14,280

47,831

24,840

Sales and marketing

69,522

11,039

98,779

19,153

General and administrative

20,641

23,080

41,152

41,166

$

119,442

$

49,684

$

192,061

$

87,571

(2) Depreciation expense excludes amortization of capitalized internal-use software costs.

BILL.COM HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

Three Months Ended
December 31,

Six Months Ended
December 31,

2022

2021

2022

2021

Cash flows from operating activities:

Net loss

$

(95,076

)

$

(80,440

)

$

(176,716

)

$

(154,699

)

Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation

119,305

49,684

191,925

87,571

Amortization of intangible assets

19,994

19,768

39,763

36,440

Depreciation of property and equipment

2,535

2,221

5,081

4,350

Amortization of capitalized internal-use software costs

977

414

1,901

673

Amortization of debt premium and issuance costs

1,771

1,399

3,483

1,955

Amortization of premium (accretion of discount) on investments in marketable debt securities

(8,186

)

3,781

(10,401

)

6,638

Provision for losses on acquired card receivables

8,431

5,486

15,042

9,535

Non-cash operating lease expense

2,376

2,123

4,718

4,083

Deferred income taxes

(527

)

(399

)

(826

)

(3,822

)

Other

(414

)

516

Changes in assets and liabilities:

Accounts receivable

(2,278

)

(4,618

)

(7,052

)

(3,420

)

Prepaid expenses and other current assets

(3,284

)

(14,868

)

(4,623

)

(8,547

)

Other assets

(742

)

286

(1,880

)

(1,099

)

Accounts payable

2,000

(1,291

)

3,511

(2,023

)

Other accruals and current liabilities

11,161

6,500

15,408

(11,430

)

Operating lease liabilities

(2,408

)

(2,160

)

(4,794

)

(2,952

)

Other long-term liabilities

1

(1,577

)

35

(1,698

)

Deferred revenue

(406

)

761

(1,709

)

4,381

Net cash provided by (used in) operating activities

55,230

(12,930

)

73,382

(34,064

)

Cash flows from investing activities:

Cash paid for acquisition, net of acquired cash and cash equivalents

(28,902

)

(89

)

(28,902

)

(144,541

)

Purchases of corporate and customer fund short-term investments

(781,282

)

(843,867

)

(1,641,193

)

(1,452,419

)

Proceeds from maturities of corporate and customer fund short-term investments

845,314

348,947

1,683,413

667,854

Proceeds from sale of corporate and customer fund short-term investments

5,088

27,510

5,088

44,744

Increase in acquired card receivables, net and other

6,090

(44,796

)

(101,353

)

(77,459

)

Purchases of property and equipment

(1,785

)

(1,063

)

(3,161