Bill Holdings, the business-payments firm under pressure from activist investor Starboard, is exploring options including a potential sale, sources said https://t.co/MPZxeDMObK ...

Core Viewpoint - Bill Holdings (NYSE:BILL) is at a critical juncture in its trading phase, specifically Phase 7 of the Adhishthana Cakra formation, which will determine its future price movement [1][7]. Group 1: Chart Analysis - The Adhishthana Principles indicate that stocks typically form a Cakra structure between Phases 4 and 8, which usually has bullish implications [2]. - Bill Holdings entered Phase 4 in January 2023 and is currently in Phase 7, near the lower arc of the Cakra formation [3]. - The lower bound of the Cakra, between $35–40, is a key technical parameter, having provided support six times [6]. Group 2: Potential Outcomes - Two potential outcomes exist: a bullish reversal from the lower bound leading to a gradual rise through Phase 8, or a bearish breakdown below the lower bound, resulting in a significant decline known as the Move of Pralaya [5][9]. - The bullish scenario would allow the stock to move towards $75–80 before a potential breakout in Phase 9, which begins in June 2026 [6][10]. Group 3: Investor Sentiment - Institutional positioning remains overweight, indicating comfort with current valuations, but the decisive breakout is still months away [8]. - Current holders should monitor the lower arc closely, as a decisive break could lead to a bearish trend, while potential buyers may find a good risk-reward opportunity if the stock holds support [10].

Core Insights - BILL Holdings, Inc. reported better-than-expected first-quarter financial results, with adjusted earnings of 61 cents per share, surpassing market estimates of 51 cents per share [1] - Quarterly sales reached $395.741 million, exceeding expectations of $391.077 million [1] - The company raised its FY2026 adjusted EPS guidance from $2.00-$2.20 to $2.11-$2.25 and narrowed its FY2026 sales guidance from $1.589 billion-$1.629 billion to $1.597 billion-$1.627 billion [1] Company Performance - CEO René Lacerte highlighted strong momentum at the start of fiscal 2026, emphasizing the expansion of BILL's reach and profitability [2] - New partnerships with NetSuite, Paychex, and Acumatica are aimed at embedding BILL into the tech stacks of small and midsize companies [2] - The introduction of BILL AI Agents is expected to simplify operations and enhance efficiency in B2B transactions [2] - Following the earnings announcement, BILL Holdings shares rose by 3.8% to $46.03 [2] Analyst Reactions - Analysts adjusted their price targets for BILL Holdings post-earnings announcement, with varied ratings and target changes [3] - Keefe, Bruyette & Woods maintained a Market Perform rating and reduced the price target from $56 to $48 [5] - BMO Capital also maintained a Market Perform rating, lowering the price target from $56 to $54 [5] - Susquehanna maintained a Positive rating but cut the price target from $89 to $84 [5] - UBS maintained a Buy rating and decreased the price target from $65 to $60 [5] - JP Morgan maintained an Overweight rating and raised the price target from $55 to $60 [5]

Core Insights - BILL Holdings reported earnings of 61 cents per share for Q1 fiscal 2026, exceeding the Zacks Consensus Estimate of 51 cents but down from 63 cents in the same quarter last year [1] - Revenues reached $395.7 million, surpassing the consensus by 1.3% and reflecting a year-over-year increase of 10.4%, driven by growth in subscription and transaction fees [2][10] - Core revenues, which include subscription and transaction fees, totaled $358.0 million, marking a 13.7% year-over-year increase [5] Revenue Breakdown - Subscription fees amounted to $70.8 million, up 5% due to increased software usage among small and midsize businesses [5] - Transaction fees surged 16% to $287.2 million, driven by strong payment volume growth [5] - Float revenues decreased by 13.3% to $37.7 million compared to the prior year [5] Operational Performance - Total payment volume (TPV) processed was $89 billion, reflecting a 12% year-over-year increase, with 33 million transactions processed, up approximately 16% [6][10] - Non-GAAP gross profit was $332.1 million, with a slight contraction in gross margin to 83.9% from 85.7% [7] - Non-GAAP operating income increased to $68.2 million, up from $67.1 million in the previous year [7] Financial Position - As of September 30, 2025, cash and short-term investments totaled $2.31 billion, an increase from $2.22 billion at the end of fiscal 2025 [8] - Cash flow from operations was $96.85 million, compared to $88.6 million a year ago, with free cash flow of $82.3 million reported [8] Future Guidance - For Q2 fiscal 2026, revenues are expected to be between $394.5 million and $404.5 million, indicating 9-12% year-over-year growth [9] - For the full fiscal 2026, revenues are projected between $1.596 billion and $1.626 billion, implying 9-11% growth, with core revenues expected to increase by 12-15% [11] - Non-GAAP EPS for fiscal 2026 is anticipated to be between $2.11 and $2.25 per share [11] Market Performance - Shares of BILL Holdings rose in after-market trading, with a 15.6% increase over the past three months, contrasting with a 9.2% decline in the Zacks Computer & Technology sector [4]

Core Insights - BILL Holdings reported revenue of $395.74 million for the quarter ended September 2025, reflecting a year-over-year increase of 10.4% and a surprise of +1.31% over the Zacks Consensus Estimate of $390.61 million [1] - The company's EPS was $0.61, slightly down from $0.63 in the same quarter last year, but exceeded the consensus estimate of $0.51 by +19.61% [1] Financial Performance Metrics - Total Payment Volume reached $89 billion, surpassing the average estimate of $87.94 billion [4] - The number of transactions processed was 33 million, which fell short of the estimated 33.96 million [4] - Revenue from interest on funds held for customers was $37.74 million, compared to the average estimate of $36.22 million, representing a year-over-year decline of -13.3% [4] - Revenue from subscription and transaction fees was $358.01 million, exceeding the average estimate of $354.03 million, with a year-over-year increase of +13.7% [4] - Subscription fees generated $70.8 million, above the average estimate of $68.77 million, while transaction fees accounted for $287.2 million, also surpassing the average estimate of $285.3 million [4] Stock Performance - Shares of BILL Holdings have declined by -10.8% over the past month, contrasting with the Zacks S&P 500 composite's increase of +1.3% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Insights - BILL Holdings reported quarterly earnings of $0.61 per share, exceeding the Zacks Consensus Estimate of $0.51 per share, but down from $0.63 per share a year ago, representing an earnings surprise of +19.61% [1] - The company achieved revenues of $395.74 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.31% and increasing from $358.45 million year-over-year [2] - BILL Holdings has consistently surpassed consensus EPS estimates over the last four quarters [2] Financial Performance - The company has shown a significant earnings surprise of +29.27% in the previous quarter, where it reported earnings of $0.53 per share against an expected $0.41 per share [1] - BILL Holdings shares have declined approximately 45.1% since the beginning of the year, contrasting with the S&P 500's gain of 15.6% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.52, with expected revenues of $398.78 million, and for the current fiscal year, the estimate is $2.14 on $1.62 billion in revenues [7] - The company's favorable estimate revisions trend prior to the earnings release has resulted in a Zacks Rank 2 (Buy), indicating expected outperformance in the near future [6] Industry Context - The Internet - Software industry, to which BILL Holdings belongs, is currently ranked in the top 35% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Revenue for the three months ended September 30, 2025, was $395.7 million, an increase of $37.3 million from $358.5 million in the same period of 2024[137] - Total revenue for the three months ended September 30, 2025, increased by $37.3 million, or 10%, compared to the same period in 2024, reaching $395.7 million[187] - The company generated a net loss of $3.0 million for the three months ended September 30, 2025, compared to a net income of $8.9 million in the same period of 2024[137] - Net loss for the period was $2.96 million, a significant decline from a net income of $8.9 million in the same period last year, marking a 133% decrease[184] Transaction and Customer Metrics - The total payment volume (TPV) for the three months ended September 30, 2025, was $89.3 billion, representing a 12% growth from $79.8 billion in 2024[158] - The number of businesses using the company's solutions increased to 498,500 as of September 30, 2025, up 5% from 476,200 in 2024[158] - The company processed 33.3 million transactions during the three months ended September 30, 2025, a 16% increase from 28.6 million transactions in 2024[158] - The total number of BILL AP/AR customers was approximately 173,500 as of September 30, 2025[158] - The total number of spending businesses using the BILL Spend and Expense solution was approximately 42,500 as of September 30, 2025[158] Expenses and Costs - Subscription and transaction fees contributed $358.0 million, a 14% increase from $314.9 million in the prior year, driven by a $39.7 million increase in transaction fee revenue[187] - Service costs rose by $12.5 million, or 23%, to $66.1 million, impacting gross profit which increased by $25.0 million, or 9%, to $318.7 million[189] - Gross margin decreased to 80.5% for the three months ended September 30, 2025, down from 82.0% in the prior year, attributed to changes in cost mix[189] - Research and development expenses increased by $1.6 million, or 2%, primarily due to a $10.4 million rise in personnel-related costs, offset by a $9.9 million decrease from higher capitalization of software development costs[190] - Sales and marketing expenses increased by $22.9 million, or 18%, reflecting continued investment in brand awareness and customer acquisition[184] - General and administrative expenses rose by $10.1 million, or 15%, as the company expanded its administrative functions to support growth initiatives[184] - The operating loss for the three months ended September 30, 2025, was $20.7 million, compared to a loss of $7.7 million in the prior year, representing a 169% increase in losses[184] Cash Flow and Investments - Free cash flow increased to $82.3 million for the three months ended September 30, 2025, compared to $81.5 million in the prior year period[209] - Cash and cash equivalents totaled $1.1 billion, with available-for-sale short-term investments of $1.2 billion as of September 30, 2025[211] - Net cash provided by operating activities increased to $96.9 million during the three months ended September 30, 2025, from $88.6 million in the prior year period[220] - Net cash used in investing activities decreased to $108.7 million during the three months ended September 30, 2025, from $139.5 million in the prior year period[223] - Net cash provided by financing activities was $1.1 million for the three months ended September 30, 2025, compared to a net cash used of $105.2 million in the prior year period[225] Debt and Financing - Issued $1.4 billion in aggregate principal amount of 0% convertible senior notes due on April 1, 2030, with a conversion price of $119.45 per share[226] - Issued $575.0 million in aggregate principal amount of 0% convertible senior notes due on April 1, 2027, with a conversion price of $414.80 per share[227] - Repurchased $451.5 million of 2027 Notes for $408.6 million in cash, leaving $123.5 million outstanding[228] - Repurchased $1.116 billion of 2025 Notes for $1.0634 billion in cash, leaving $33.5 million outstanding[231] - Total borrowing capacity of $300.0 million under the 2021 Credit Facility, with $180.0 million borrowed as of September 30, 2025[232] - Total borrowing capacity of $300.0 million under the 2025 Credit Facility, with $150.0 million borrowed as of September 30, 2025[233] Credit and Risk Management - The company is exposed to credit risk related to customer funds collected, with potential credit losses if customers dispute transactions after funds are remitted[254] - The company continually evaluates the credit quality of securities in its portfolios, making decisions based on credit rating thresholds and payment performance[255] - Credit risk arises from card receivable balances and loans held for investment, with potential defaults due to various factors including bankruptcy and operational failure[256] - The company relies on the creditworthiness of spending businesses for repayment of card receivables, which limits recourse for collection[256] Foreign Currency Risk - Foreign currency exchange risk is present in the company's cross-border payment service, with transaction fees not adjusted for foreign exchange fluctuations[257] - The company's Canadian subsidiary is also exposed to foreign currency exchange risk, affecting financial results due to transaction gains or losses[258] - A 10% change in the value of the U.S. dollar relative to foreign currencies is believed to have an immaterial effect on cash flows and operating results[259] New Initiatives - The company launched BILL AI in October 2025, introducing AI agents designed to autonomously collect and validate W-9s and reconcile receipts[136] - The company announced a reduction in force impacting approximately 6% of employees to improve organizational agility and efficiency[142]

Financial Data and Key Metrics Changes - Core revenue for Q1 2026 reached $358 million, representing a 14% year-over-year growth, hitting the top end of guidance [4][26] - Non-GAAP operating margin expanded to 17%, a significant increase due to a focus on profitability [5][28] - Non-GAAP operating income was $68 million, exceeding guidance by $10 million, driven by disciplined expense management [26][29] Business Line Data and Key Metrics Changes - BILL APAR revenue grew 10% year-over-year, with transaction revenue at $123 million, up 12% [26][28] - Subscription revenue increased by 6%, with 4,000 net new customers added during the quarter [27][28] - Spend and expense revenue totaled $157 million, reflecting a 19% growth year-over-year, with card payment volume increasing by 21% [28][29] Market Data and Key Metrics Changes - The company signed three new embedded partnerships with NetSuite, Paychex, and Acumatica, collectively serving nearly 1 million small and mid-sized customers [7][8] - The partnerships are expected to significantly enhance BILL's reach and support for SMBs, representing an estimated $1 trillion in annual payment volume [7][8] Company Strategy and Development Direction - The company is focused on intelligent automation and efficient operations to drive business results and expand platform value [4][5] - The Embed 2.0 strategy aims to reduce friction for partners and enhance customer engagement through integrated solutions [6][9] - The introduction of AI agents is set to transform financial workflows, making them more efficient and touchless [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to reshape financial operations for SMBs, emphasizing the importance of trust and customer relationships [5][6] - The company is building a more efficient organization, with a focus on aligning cost structures and streamlining operations for sustainable success [16][29] - Future guidance for Q2 2026 anticipates total revenue between $395-$405 million, reflecting a 12%-15% year-over-year growth [32][33] Other Important Information - The company has processed over $1 trillion in transaction volume and holds a rich dataset of verified financials, enhancing its competitive advantage [11][12] - A reduction in force of approximately 6% was executed, incurring $9 million in restructuring charges, aimed at improving profitability [29][30] Q&A Session Summary Question: Update on move-up market strategy and customer numbers - Management noted that the focus on mid-market has evolved into a deliberate strategy, with steady progress in acquiring larger customers, which typically have higher ARPU [36][37] Question: Discussion on AI and its monetization - Management highlighted the unique data set and expertise in financial operations, emphasizing the potential for AI agents to drive efficiency and create additional value for customers [38][39] Question: Clarification on the rule of 40 and its implications - Management stated that profitability is part of the company's DNA, and they are comfortable with the rule of 40 as a target for balancing growth and margin [44][45] Question: Insights on Embedded 2.0 initiative with NetSuite - Management explained that the partnership with NetSuite involves integrating payment functionalities into their ERP, with a revenue-sharing model to incentivize volume [50][53] Question: Update on invoice financing initiative - Management reported strong growth in the invoice financing program, which is part of the emerging ad valorem portfolio, with a focus on balancing growth and profitability [59][60]

Core Insights - Bill.com Holdings (NYSE: BILL) exceeded profitability expectations in Q1 FY26 despite a slight revenue miss, indicating a strategic focus on bottom-line performance over revenue growth [3][5][6] Financial Performance - Non-GAAP EPS was reported at $0.61, surpassing the consensus estimate of $0.52 by 17% [4][11] - Revenue reached $395.7 million, falling short of the expected $398.9 million by approximately 0.8% [4][11] - Core revenue, excluding certain pass-through costs, grew by 14% year over year to $358.0 million [7][11] - Transaction fees increased to $287.2 million, up 16% year over year, with payment volume processed totaling $89 billion, a 12% annual increase [7][11] Cash Flow and Profitability - Operating cash flow was $78.7 million, and free cash flow stood at $71.7 million, despite a GAAP operating loss of $20.7 million and a GAAP net loss of $3.0 million [8][11] - The divergence between cash generation and accounting results highlights the operational strength of the company [8] Strategic Initiatives - New partnerships with NetSuite, Paychex, and Acumatica were announced, expanding the company's reach into larger enterprise workflows [9] - The introduction of "BILL AI Agents" aims to enhance automation in B2B transactions, reflecting industry trends towards intelligent workflows [10] Future Guidance - For Q2 FY26, revenue guidance is set between $394.5 million and $404.5 million, with core revenue growth expected between 12% and 15% year over year [12][13] - The guidance indicates a stabilization in growth rather than acceleration, suggesting a cautious approach moving forward [13]

Core Insights - BILL reported Q3 CY2025 results that exceeded market revenue expectations, with a year-on-year sales increase of 10.4% to $395.7 million [1][6][7] - The company anticipates next quarter's revenue to be approximately $399.5 million, aligning closely with analysts' estimates [1] - Non-GAAP profit per share was $0.61, surpassing analysts' consensus by 20.5% [1][6] Company Overview - BILL is a financial automation platform that aims to streamline back-office financial operations for small and midsize businesses through a cloud-based solution [3] Revenue Growth - Over the past five years, BILL has achieved a compounded annual growth rate of 54.8% in sales, outperforming the average software company [4] - The annualized revenue growth over the last two years stands at 15%, which is below the five-year trend but still considered respectable [5] Financial Performance - Q3 revenue was $395.7 million, exceeding analyst estimates of $391 million by 1.2% [6] - Adjusted EPS was $0.61, beating the expected $0.51 by 20.5% [6] - Adjusted Operating Income reached $68.24 million, with a margin of 17.2%, surpassing estimates by 20.7% [6] - Full-year revenue guidance was slightly raised to $1.61 billion at the midpoint [6] - Full-year Adjusted EPS guidance was increased to $2.18 at the midpoint, reflecting a 3.8% rise [6] - Operating Margin was reported at -5.2%, a decline from -2.1% in the same quarter last year [6] - Free Cash Flow Margin improved to 20.8%, up from 17.9% in the previous quarter [6] - Customer count increased to 498,100, up from 493,800 in the prior quarter [6] - Market Capitalization is currently at $4.73 billion [6] Future Outlook - Management is guiding for a 10.2% year-on-year increase in sales for the next quarter [7] - Analysts project a revenue growth of 10.8% over the next 12 months, indicating a potential deceleration compared to the previous two years [8]