Part I [Business Overview](index=6&type=section&id=Item%201.%20BUSINESS) BILL Holdings, Inc. provides an AI-enabled financial operations platform for SMBs, automating payables, receivables, and spend management, serving ~493,800 businesses and processing $330 billion in TPV in fiscal 2025 - BILL Holdings, Inc. is a financial operations platform for SMBs, automating payables, receivables, and spend/expense management with AI-enabled solutions[23](index=23&type=chunk)[24](index=24&type=chunk) Fiscal Year 2025 Key Business Metrics | Metric | Value (as of June 30, 2025) | | :-------------------------------- | :-------------------------------- | | Businesses using solutions | 493,800 | | Total Payment Volume (TPV) (in billions) | $329.8 | | Network Members | 8.3 million | | TPV Growth (YoY) | 13% | | Network Member Growth (YoY) | 18% | | BILL AP/AR Customers | 169,500 | | BILL Spend and Expense Businesses | 41,100 | | Embedded Solutions and Other Customers | 283,200 | - The platform offers comprehensive payment services including ACH, card payments (virtual and physical), real-time payments (RTP), checks, cross-border payments to over 130 countries, and invoice financing[37](index=37&type=chunk)[38](index=38&type=chunk) - BILL leverages a unique data asset and AI capabilities to drive product innovation, enhance risk management, and power the development of AI agents for SMB financial operations[46](index=46&type=chunk) - The company operates in a highly regulated environment, requiring money transmitter licenses in most U.S. states and Canada, and compliance with AML, CTF, sanctions, and data protection laws (e.g., GLBA, CCPA, GDPR)[77](index=77&type=chunk)[78](index=78&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) [Overview](index=6&type=section&id=Overview) BILL Holdings, Inc. is a leading AI-enabled financial operations platform for SMBs, automating finance for business success and connecting millions of network members - BILL's mission is to simplify business connections and operations through an **AI-enabled financial software platform**[22](index=22&type=chunk)[24](index=24&type=chunk) Fiscal Year 2025 Operational Scale | Metric | Value (as of June 30, 2025) | | :-------------------------------- | :-------------------------------- | | Businesses using solutions | ~493,800 | | Total Payment Volume (TPV) (in billions) | ~$330 | | Network Members | ~8.3 million | [Our Solution](index=6&type=section&id=Our%20Solution) The BILL platform automates SMB back-office functions, acting as a control system for accounts payable, accounts receivable, and spend/expense management - The platform automates SMB back-office operations, providing key benefits such as **AI-enabled efficiency**, integration with critical financial partners, digital security, and transparent cash flow management[27](index=27&type=chunk) [What Sets Us Apart](index=7&type=section&id=What%20Sets%20Us%20Apart) BILL differentiates itself through an integrated platform leveraging network effects and data for AI-driven innovation, proprietary risk management, and comprehensive payment services - The integrated platform leverages network effects and a large data asset to drive rapid information and fund exchange, product innovation, and proprietary risk management[30](index=30&type=chunk)[31](index=31&type=chunk)[46](index=46&type=chunk) - Accounts Payable automation includes intelligent bill capture using AI, digital workflows, and collaboration tools, while Accounts Receivable automation offers easy invoicing, digital workflows, and client payment portals[32](index=32&type=chunk)[35](index=35&type=chunk) - BILL Spend and Expense provides smart corporate cards (BILL Divvy Card) with proactive spend controls, real-time budgeting, and mobile management, with credit underwriting performed using proprietary risk management capabilities[33](index=33&type=chunk)[36](index=36&type=chunk) - Payment services include ACH, virtual and physical card payments, Real-time Payments (RTP), checks, cross-border payments to over **130 countries**, and 'Pay By Card' for vendors not accepting cards[38](index=38&type=chunk) - Value-added services include two-way sync with major accounting systems (QuickBooks, NetSuite, Sage Intacct, Xero, Microsoft Dynamics 365), purchase order matching, cash flow forecasting, treasury services, custom user roles, and integrated mobile functionality[38](index=38&type=chunk)[39](index=39&type=chunk)[43](index=43&type=chunk) - The company's risk engine, trained on millions of B2B transactions, monitors for suspicious behavior and fraud, resulting in nominal fraud and credit loss rates (**0.01% for BILL AP/AR, 0.23% for BILL Divvy Cards in fiscal 2025**)[51](index=51&type=chunk)[56](index=56&type=chunk) - Security, privacy, and data protection are prioritized through robust access controls, continuous external testing (SOC1 Type II, SOC2 Type II certified), NIST-800-53 alignment, and close attention to network security and third-party supplier security[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) [Competition](index=12&type=section&id=Competition) BILL competes against legacy manual processes, large enterprise firms, niche solutions, and new market entrants, leveraging its comprehensive portfolio and proprietary payments engine - Primary competition is legacy manual processes, alongside large enterprise firms, niche point solutions, and adjacent product providers entering BILL's market segments[62](index=62&type=chunk)[150](index=150&type=chunk)[152](index=152&type=chunk) - Key competitive factors include product features, AI leverage, ease of deployment and integration, automation capabilities, cloud architecture, security, regulatory compliance, brand recognition, and pricing[64](index=64&type=chunk)[72](index=72&type=chunk)[155](index=155&type=chunk) [Research & Development](index=13&type=section&id=Research%20%26%20Development) BILL invests significantly in R&D, with teams focused on understanding customer needs and innovating new functionality, usability, reliability, and performance for its applications - Substantial investment in R&D focuses on understanding customer needs and innovating new functionality, usability, reliability, and performance of existing applications[66](index=66&type=chunk) [Sales and Marketing](index=13&type=section&id=Sales%20and%20Marketing) BILL uses direct and indirect channels for distribution, with marketing efforts focused on lead generation, brand awareness, partner enablement, and customer growth - Distribution channels include direct sales (self-service, inside sales) and indirect partnerships with accounting firms, financial institutions, and software providers[68](index=68&type=chunk)[69](index=69&type=chunk) - Marketing focuses on lead generation, brand awareness, partner enablement, and customer growth, supported by digital campaigns, referrals, and a card rewards program for BILL Divvy Cards[70](index=70&type=chunk)[71](index=71&type=chunk) [Customer Success](index=14&type=section&id=Customer%20Success) BILL's customer success team provides onboarding, ongoing support, and training, leveraging insights from millions of transactions to continuously improve the platform - Customer success provides onboarding, ongoing support, and training, leveraging deep understanding of SMB spending and behavior patterns to improve the platform and experience[74](index=74&type=chunk) [Regulatory Environment](index=14&type=section&id=Regulatory%20Environment) BILL operates in a complex regulatory landscape, requiring money transmission licenses and compliance with AML, CTF, sanctions, consumer protection, and data privacy laws - BILL holds money transmitter licenses in most U.S. states and Canada, registered as a Money Services Business with FinCEN and FINTRAC, subjecting it to AML, CTF, OFAC sanctions, record-keeping, bonding, and capital requirements[77](index=77&type=chunk)[78](index=78&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk] - Compliance extends to consumer protection laws, Visa/Mastercard rules as a card program manager, and state/federal lending regulations for invoice financing products[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk] - Data handling is subject to GLBA, CCPA, GDPR, and other global privacy laws, with increasing regulatory scrutiny on privacy, data protection, and cybersecurity practices[84](index=84&type=chunk)[85](index=85&type=chunk] - The company is also subject to anti-corruption laws like the FCPA and similar international statutes, with policies and controls in place to ensure compliance[86](index=86&type=chunk) [Culture, Inclusion and Sustainability](index=16&type=section&id=Culture%2C%20Inclusion%20and%20Sustainability) BILL is committed to a sustainable future, guided by core values, focusing on diverse talent attraction, inclusive workplace culture, and environmental responsibility - BILL's culture is centered around five core values: Humble, Authentic, Passionate, Accountable, and Fun, guiding operations and employee interactions[91](index=91&type=chunk)[97](index=97&type=chunk) - The company had **2,364 employees** as of June 30, 2025, with a focus on recruiting, developing, and retaining talent through equitable compensation, comprehensive benefits, and leadership development programs, including AI training[91](index=91&type=chunk)[92](index=92&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk)[98](index=98&type=chunk] - Inclusion is fostered through eight Employee Resource Groups (ERGs) and community outreach programs, such as partnerships with local high schools and the African Diaspora Network's ABLE program[101](index=101&type=chunk)[102](index=102&type=chunk] - Environmental efforts include LEED Gold and Energy Star certified headquarters, free EV charging stations, and a hybrid work model to reduce commute-related energy consumption and pollution[103](index=103&type=chunk) [Intellectual Property](index=17&type=section&id=Intellectual%20Property) BILL protects its intellectual property through patents, trademarks, copyrights, trade secrets, and contractual measures, holding 26 issued U.S. patents and 12 U.S. trademark registrations - As of June 30, 2025, BILL held **26 issued U.S. patents** (expiring 2028-2042) and 9 pending applications, along with **12 U.S. trademark registrations** and international applications[106](index=106&type=chunk)[107](index=107&type=chunk] - The company relies on trade secrets and confidential information, secured through confidentiality and invention assignment agreements with employees and third parties[109](index=109&type=chunk) [Available Information](index=18&type=section&id=Available%20Information) BILL makes its SEC filings available free on its investor relations website, which also serves as a channel for disclosing material non-public information - SEC filings (10-K, 10-Q, 8-K) are available free on www.bill.com, which also serves as a channel for disclosing material non-public information[112](index=112&type=chunk)[113](index=113&type=chunk] [Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) Investing in BILL's stock carries risks from operating losses, economic downturns, competition, credit/fraud, regulatory compliance, debt, and stock volatility - BILL has a history of operating losses and may not sustain profitability, with a net income of **$23.8 million** in fiscal 2025 but accumulated deficit of **$1.5 billion** as of June 30, 2025[119](index=119&type=chunk)[121](index=121&type=chunk] - A significant portion of revenue comes from SMBs, which are highly susceptible to macroeconomic conditions (e.g., inflation, interest rates, recessions), potentially impacting demand for products and services[119](index=119&type=chunk)[122](index=122&type=chunk)[127](index=127&type=chunk] - The BILL Divvy Card offering exposes the company to credit risk, as it bears the entire credit risk for most card balances, and proprietary risk models may not accurately predict creditworthiness, leading to potential charge-offs[119](index=119&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk] - The company transfers large sums of customer funds daily, exposing it to risks of financial losses from credit losses, operational errors, software defects, employee misconduct, and security breaches, which could damage reputation and financial results[119](index=119&type=chunk)[154](index=154&type=chunk)[156](index=156&type=chunk] - Reliance on third-party service providers for transaction processing and other services means significant disruptions could prevent transaction processing and adversely affect business[186](index=186&type=chunk) - The use of AI in business presents risks related to development success, competitive harm, reputational damage from inaccurate/biased outputs, cybersecurity incidents, and evolving regulatory frameworks (e.g., EU AI Act)[119](index=119&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk] - The company is subject to extensive and evolving governmental regulations and legal obligations, particularly concerning payments, financial services, data privacy (GLBA, CCPA, GDPR), and anti-money laundering/counter-terror financing, with non-compliance potentially leading to significant fines, litigation, and business restrictions[124](index=124&type=chunk)[242](index=242&type=chunk)[245](index=245&type=chunk)[249](index=249&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk)[260](index=260&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk] - Debt service obligations from convertible senior notes (**$1.5 billion** outstanding as of June 30, 2025) and revolving credit facilities may adversely affect financial condition and results of operations, with potential liquidity challenges for cash settlements upon conversion or repurchase[124](index=124&type=chunk)[286](index=286&type=chunk)[288](index=288&type=chunk)[292](index=292&type=chunk] [Summary of Risk Factors](index=19&type=section&id=Summary%20of%20Risk%20Factors) This section provides a high-level overview of the key risks facing BILL Holdings, Inc., including financial performance, economic conditions, customer acquisition, credit/fraud, competition, and regulatory compliance - Key risks include operating losses, economic downturns affecting SMBs, inability to attract/retain customers, credit/fraud risks from BILL Divvy Card, intense competition, large daily fund transfers, reliance on accounting firms/financial institutions, growth management, AI development challenges, loss of key management, acquisition integration, regulatory non-compliance, debt obligations, and stock price volatility[119](index=119&type=chunk)[124](index=124&type=chunk] [Risks Related to Our Business and Industry](index=20&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) This section details risks inherent to BILL's business model and industry, such as operating losses, macroeconomic vulnerability, customer acquisition challenges, credit/fraud risks, and operational dependencies Net Income (Loss) and Accumulated Deficit (Fiscal Years) | Fiscal Year | Net Income (Loss) (in millions) | Accumulated Deficit (as of June 30) (in billions) | | :---------- | :------------------------------ | :------------------------------------------------ | | 2025 | $23.8 | $1.5 | | 2024 | $(28.9) | N/A | | 2023 | $(223.7) | N/A | - Fluctuations in financial results are expected due to factors like demand, pricing, customer retention, partner relationships, AI development costs, macroeconomic conditions, and competition[128](index=128&type=chunk)[133](index=133&type=chunk] - Revenue growth depends on attracting new customers, converting trial users, and increasing charge card usage, with potential for reduced profitability from lower-priced products or increased rewards expenses[130](index=130&type=chunk)[131](index=131&type=chunk)[135](index=135&type=chunk] - Customer retention and increased adoption are critical, but many contracts are open-ended and can be terminated, making renewal and expansion rates unpredictable[137](index=137&type=chunk)[138](index=138&type=chunk] - The BILL Divvy Card exposes the company to credit risk, with proprietary risk models potentially failing to predict creditworthiness, leading to charge-offs and reliance on warehouse facilities for funding[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk)[177](index=177&type=chunk] - Fraudulent activities by customers or third parties pose significant financial loss and liability risks, requiring continuous investment in evolving risk management techniques[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk] - Competition is intense and evolving, with new entrants and existing players (e.g., Intuit, Brex, Ramp) potentially offering competing solutions or bundling services, challenging BILL's market position[150](index=150&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk] - Transferring large sums of customer funds daily carries risks of financial losses from operational errors, software defects, and security breaches, which could damage reputation and lead to regulatory action[154](index=154&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk] - Interest earned on customer funds, a significant revenue component, is subject to market interest rate fluctuations and could decrease with lower rates or increased adoption of expedited electronic payments[163](index=163&type=chunk) - Dependence on relationships with accounting firms and financial institutions means any damage to reputation or inability to establish/grow partnerships could weaken growth prospects[164](index=164&type=chunk)[165](index=165&type=chunk)[167](index=167&type=chunk] - Rapid growth requires scaling platform, infrastructure, and internal systems, with failure to do so effectively impacting future operating results and profitability[169](index=169&type=chunk)[170](index=170&type=chunk] - The BILL Divvy Card offering is dependent on relationships with Issuing Banks, and challenges to legal structures or bank failures could disrupt product offerings[174](index=174&type=chunk)[176](index=176&type=chunk] - Maintaining compatibility with popular software solutions (e.g., QuickBooks, NetSuite) is crucial; changes to APIs or competitors developing their own solutions could diminish platform value[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk] - Reliance on third-party service providers for transaction processing means disruptions could interrupt business operations[186](index=186&type=chunk) - Challenges in developing and deploying AI tools, or managing AI use, could lead to reputational harm, competitive disadvantage, and legal liability, especially with evolving AI regulations[187](index=187&type=chunk)[188](index=188&type=chunk] - Loss of key management or inability to attract/retain qualified talent, particularly in software development and compliance, could harm business growth[189](index=189&type=chunk)[190](index=190&type=chunk] - Future acquisitions carry risks of difficult integration, diversion of management attention, increased liabilities (especially cybersecurity and compliance), and potential dilution of stockholder value[191](index=191&type=chunk)[192](index=192&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk] - Failure to provide high-quality customer support or if support becomes too expensive could harm business and reputation[198](index=198&type=chunk) - Inability to adapt to rapidly changing technology, industry standards, and regulations could make products less competitive and increase R&D expenses[199](index=199&type=chunk)[200](index=200&type=chunk] - Pricing pressures or inability to attract/retain customers at current prices could harm revenue and gross profits[201](index=201&type=chunk) - Interruptions or delays in services from cloud providers (e.g., AWS) or other third-party data centers could impair platform delivery and damage business[202](index=202&type=chunk)[203](index=203&type=chunk] - Failure to meet service level commitments in financial institution partner agreements could lead to credits, refunds, or contract terminations[204](index=204&type=chunk) - Ineffective sales and marketing efforts, including challenges in recruiting personnel or managing online advertising costs, could harm customer base expansion[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk] - International expansion and cross-border payments introduce operational challenges and risks related to foreign regulations, macroeconomic conditions, and geopolitical conflicts[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk] - A substantial portion of revenue from interchange fees exposes the company to variability due to changes in card network rules, legal scrutiny (e.g., antitrust litigation), and competitive pressures[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk)[216](index=216&type=chunk] - Failure to maintain and enhance brands, especially during rebranding efforts (e.g., phasing out Divvy brand), could impair customer base expansion[215](index=215&type=chunk) - Need for additional capital to support growth, which may not be available on acceptable terms, leading to dilution or increased debt obligations[217](index=217&type=chunk)[220](index=220&type=chunk] - Ability to use net operating losses (NOLs) and tax credits may be limited by ownership changes or future tax law changes (e.g., Section 382/383 of the Code)[221](index=221&type=chunk] - Potential for increased sales tax collection obligations due to evolving state laws (e.g., Wayfair ruling) could increase costs for customers and administrative burdens[222](index=222&type=chunk] - Changes in effective tax rate or tax liability due to differing statutory rates, new tax laws (e.g., Inflation Reduction Act, One Big Beautiful Bill Act), or audit outcomes could adversely affect operating results[223](index=223&type=chunk)[224](index=224&type=chunk] - Natural catastrophic events, pandemics, and man-made problems (e.g., cyber-attacks, war) could disrupt business operations, leading to system interruptions, data breaches, and reputational harm[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk] - Failure to maintain effective disclosure controls and internal control over financial reporting could impair ability to produce timely and accurate financial statements, leading to investor loss of confidence and potential SEC sanctions[228](index=228&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk] - Reported financial results may be adversely affected by changes in GAAP or incorrect estimates/judgments related to critical accounting policies[232](index=232&type=chunk)[233](index=233&type=chunk] - Market opportunity estimates and growth forecasts may be inaccurate, and even if the market grows, BILL's business may not grow at similar rates[234](index=234&type=chunk] - Reliance on assumptions and estimates for performance metrics means inaccuracies could harm reputation and negatively affect business[235](index=235&type=chunk] - Future litigation could be costly, time-consuming, and divert management attention, potentially harming business and financial condition[236](index=236&type=chunk] - Failure to maintain company culture during growth, especially through acquisitions, could negatively affect talent retention and corporate objectives[237](index=237&type=chunk)[238](index=238&type=chunk] - Exposure to foreign currency exchange risk, particularly with Canadian operations, can affect financial results due to transaction gains or losses[239](index=239&type=chunk] - Actions by activist stockholders could be costly, disrupt business, divert management attention, and impact stock trading value[240](index=240&type=chunk] [Risks Related to Government Regulation and Privacy Matters](index=43&type=section&id=Risks%20Related%20to%20Government%20Regulation%20and%20Privacy%20Matters) This section details BILL's extensive regulatory and legal obligations, particularly concerning financial services, data privacy, and anti-corruption, with non-compliance posing significant risks - BILL is subject to extensive local, state, federal, and international laws governing banking, money transmission, lending, AML, CTF, sanctions, and data security, with non-compliance potentially leading to investigations, fines, and business restrictions[242](index=242&type=chunk)[243](index=243&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk] - Data handling is subject to GLBA, CCPA, GDPR, and other global privacy laws, with increasing regulatory scrutiny and potential for significant fines, lawsuits, and required business changes if practices are inconsistent with evolving interpretations[255](index=255&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk] - Improper or unauthorized use, disclosure, or access to sensitive data (including cybersecurity incidents) could harm BILL's reputation, lead to financial losses, regulatory scrutiny, and significant costs for remediation[264](index=264&type=chunk)[266](index=266&type=chunk)[267](index=267&type=chunk)[268](index=268&type=chunk)[269](index=269&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk] - Compliance with U.S. economic and trade sanctions (OFAC) and international AML/CTF laws is critical; past gaps in IP blocking and subscriber onboarding in sanctioned countries led to a cautionary letter from OFAC[273](index=273&type=chunk)[274](index=274&type=chunk] - The company is subject to anti-corruption and anti-bribery laws (e.g., FCPA, UK Bribery Act), with non-compliance potentially leading to criminal/civil liability and reputational harm, especially as international operations expand[275](index=275&type=chunk)[276](index=276&type=chunk)[277](index=277&type=chunk] [Risks Related to Our Intellectual Property](index=50&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section outlines risks related to BILL's intellectual property, including inadequate protection, costly litigation from disputes, substantial indemnification liability, and open-source software use - Failure to adequately protect proprietary technology (patents, copyrights, trademarks, trade secrets) could impair competitive position, lead to loss of valuable assets, and incur costly litigation[279](index=279&type=chunk) - Intellectual property disputes are costly, time-consuming, and can divert management attention, potentially leading to significant liability or the need to limit/stop sales of software[281](index=281&type=chunk)[282](index=282&type=chunk] - Indemnity provisions in agreements with financial institution partners and larger customers could expose BILL to substantial, uncapped liability for intellectual property infringement or data protection losses[283](index=283&type=chunk) - Use of open-source software could subject the company to litigation or require the release of proprietary software source code under certain licenses[284](index=284&type=chunk] [Risks Related to Our Indebtedness](index=52&type=section&id=Risks%20Related%20to%20Our%20Indebtedness) This section addresses risks associated with BILL's debt obligations, including convertible senior notes and revolving credit facilities, which may adversely affect financial condition and liquidity Outstanding Debt as of June 30, 2025 | Debt Instrument | Principal Amount (in millions) | | :---------------------- | :----------------------------- | | 2025 Convertible Senior Notes | $33.5 | | 2027 Convertible Senior Notes | $123.5 | | 2030 Convertible Senior Notes | $1,400.0 | | 2021 Credit Facility (drawn) | $180.0 | - Debt service obligations could adversely affect financial condition, limit flexibility, and make the company more vulnerable to adverse economic changes, potentially leading to default if cash flow is insufficient[286](index=286&type=chunk)[287](index=287&type=chunk] - The company may not have sufficient cash to settle conversions of notes or repurchase them upon a fundamental change, and future debt agreements could impose limitations[288](index=288&type=chunk)[291](index=291&type=chunk] - Conditional conversion features of the Notes, if triggered, could require cash payments, adversely affecting liquidity, or reclassify debt as current liability, reducing net working capital[292](index=292&type=chunk] - Capped Call transactions, designed to reduce dilution, expose the company to counterparty credit risk, which is unsecured and could lead to adverse tax consequences or increased dilution if a counterparty defaults[293](index=293&type=chunk)[294](index=294&type=chunk)[297](index=297&type=chunk] [Risks Related to Ownership of Our Common Stock](index=54&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) This section highlights risks associated with owning BILL's common stock, including price volatility, anti-takeover provisions, management experience, dividend policy, and potential dilution - The market price of common stock has been and will likely remain volatile due to factors like financial performance, analyst expectations, macroeconomic conditions, competition, and geopolitical events[299](index=299&type=chunk) - Anti-takeover provisions in charter documents (e.g., staggered board, limitations on stockholder actions) and Delaware law (Section 203) could make acquisitions more difficult and limit stockholders' ability to influence management[301](index=301&type=chunk)[304](index=304&type=chunk)[305](index=305&type=chunk] - The management team has limited experience managing a public company, which could divert attention from business operations[306](index=306&type=chunk) - The company does not intend to pay dividends in the foreseeable future, requiring investors to rely on stock price appreciation for gains[307](index=307&type=chunk) - Sales of substantial amounts of common stock by directors, executive officers, or significant stockholders, or the perception of such sales, could cause the market price to decline and dilute existing stockholders[309](index=309&type=chunk)[311](index=311&type=chunk] - The timing and amount of share repurchases are subject to uncertainties, and excise taxes on repurchases (e.g., Inflation Reduction Act) may increase costs and reduce the number of shares repurchased[313](index=313&type=chunk)[314](index=314&type=chunk)[315](index=315&type=chunk] [Unresolved Staff Comments](index=57&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) No unresolved staff comments from the SEC regarding the company's filings - No unresolved staff comments[316](index=316&type=chunk) [Cybersecurity](index=57&type=section&id=Item%201C.%20Cybersecurity) BILL maintains a robust cybersecurity program, overseen by its board and CISO, aligning with NIST/ISO standards, with no material incidents reported - Cybersecurity risk management is integrated into overall risk systems, overseen by the board's cybersecurity committee and managed by an interim CISO[317](index=317&type=chunk)[318](index=318&type=chunk)[323](index=323&type=chunk] - The information security program is based on NIST, ISO, and industry standards, featuring continuous threat assessment, incident response, third-party risk management, and regular employee training[317](index=317&type=chunk)[320](index=320&type=chunk)[321](index=321&type=chunk] - As of the report date, the company is not aware of any cybersecurity threats that have materially affected or are reasonably likely to affect its business strategy, operations, or financial condition[322](index=322&type=chunk) [Cybersecurity Risk Management and Strategy](index=57&type=section&id=Cybersecurity%20Risk%20Management%20and%20Strategy) BILL's cybersecurity strategy involves an information security program aligned with NIST and ISO frameworks, managed by an interim CISO and a dedicated team - The information security program, managed by an interim CISO, aligns with NIST-800-53 and ISO standards, focusing on enterprise information security governance and product development security[317](index=317&type=chunk)[318](index=318&type=chunk] - Key components include routine assessment of cybersecurity threats, an incident response program, a 'red team' of engineers, third-party evaluations, and technical safeguards like firewalls and access controls[317](index=317&type=chunk)[320](index=320&type=chunk)[321](index=321&type=chunk] [Governance](index=58&type=section&id=Governance) A standing cybersecurity committee oversees BILL's cybersecurity program, meeting quarterly to review risks, controls, and incident responses, coordinating with the audit committee - A standing cybersecurity committee, formed in spring 2023, meets quarterly to review cybersecurity risks, controls, and processes, receiving updates from the interim CISO and legal department[323](index=323&type=chunk] - The committee coordinates with the audit committee on financial reporting risks and receives prompt information on material cybersecurity threats or incidents[323](index=323&type=chunk)[324](index=324&type=chunk] - Cybersecurity insurance is maintained to mitigate the financial impact of incidents[326](index=326&type=chunk] [Properties](index=59&type=section&id=Item%202.%20Properties) BILL leases its San Jose headquarters (138,000 sq ft) and a Draper, Utah office (155,000 sq ft), deeming current facilities adequate - Corporate headquarters in San Jose, CA (**138,000 sq ft**) and an office in Draper, UT (**155,000 sq ft**, **26,000 sq ft subleased**) are leased, with leases expiring in June 2031 and May 2031, respectively[327](index=327&type=chunk] - Current office facilities are deemed adequate for the immediate future, with ongoing evaluation of real estate strategy for expansion[328](index=328&type=chunk] [Legal Proceedings](index=59&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, though litigation can arise in the ordinary course - The company is not currently a party to any legal proceedings considered material to its business or financial condition[329](index=329&type=chunk) - Litigation, which can arise in the ordinary course of business, is inherently unpredictable and may result in substantial costs and diversion of management resources[329](index=329&type=chunk)[330](index=330&type=chunk] [Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to BILL Holdings, Inc - Not applicable[331](index=331&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=60&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) BILL's common stock trades on NYSE; the company has 151 record holders, no dividends, and active share repurchase programs - Common stock trades on The New York Stock Exchange under the symbol "**BILL**"[333](index=333&type=chunk) - As of June 30, 2025, there were **151 holders of record** of common stock[334](index=334&type=chunk) - The company has never declared or paid cash dividends and intends to retain future earnings for operations, acquisitions, repurchases, or debt repayment[335](index=335&type=chunk) - In April 2025, the company issued warrants to CPA.com, Inc. to purchase **312,682 shares** of common stock, which were net exercised for **312,607 shares**[339](index=339&type=chunk) - A new **$300 million** share repurchase program (2025 Share Repurchase Program) was authorized in August 2025, with no mandated end date[341](index=341&type=chunk)[342](index=342&type=chunk] Share Repurchase Activity (Q4 Fiscal 2025) | Period | Total Shares Purchased (thousands) | Average Price Paid Per Share | | :----------------------------- | :------------------------------- | :--------------------------- | | April 1, 2025 - April 30, 2025 | — | — | | May 1, 2025 - May 31, 2025 | — | — | | June 1, 2025 - June 30, 2025 | 776 | $45.09 | | **Total** | **776** | | - The August 2024 Share Repurchase Program, which had **$65.0 million** remaining as of June 30, 2025, was completed in July 2025[343](index=343&type=chunk) [Market Information](index=60&type=section&id=Market%20Information) BILL Holdings, Inc.'s common stock is listed and traded on The New York Stock Exchange under the ticker symbol "BILL" - Common stock trades on The New York Stock Exchange under the symbol "**BILL**"[333](index=333&type=chunk) [Holders of Record](index=60&type=section&id=Holders%20of%20Record) As of June 30, 2025, there were 151 holders of record for BILL Holdings, Inc.'s common stock, excluding beneficial owners - As of June 30, 2025, there were **151 holders of record** of the company's common stock[334](index=334&type=chunk) [Dividend Policy](index=60&type=section&id=Dividend%20Policy) BILL Holdings, Inc. has not declared or paid cash dividends and does not anticipate doing so, intending to retain future earnings for business operations - The company has never declared or paid cash dividends and does not intend to in the foreseeable future, prioritizing retention of earnings for operations, acquisitions, repurchases, or debt repayment[335](index=335&type=chunk) [Stock Performance Graph](index=60&type=section&id=Stock%20Performance%20Graph) The report includes a stock performance graph comparing BILL's common stock return from June 30, 2020, to June 30, 2025, against market indices - A stock performance graph compares BILL's common stock return from June 30, 2020, to June 30, 2025, against the S&P 500 and S&P 500 IT Indices[337](index=337&type=chunk) [Recent Sales of Unregistered Equity Securities](index=61&type=section&id=Recent%20Sales%20of%20Unregistered%20Equity%20Securities) On April 7, 2025, warrants for 312,682 shares of common stock were issued to CPA.com, Inc. and net exercised, exempt from registration - On April 7, 2025, warrants for **312,682 shares** of common stock were issued to CPA.com, Inc. and net exercised on April 13, 2025, for **312,607 shares**[339](index=339&type=chunk) - The issuance was exempt from registration under Section 4(a)(2) of the Securities Act[340](index=340&type=chunk) [Purchase of Equity Securities by the Issuer](index=61&type=section&id=Purchase%20of%20Equity%20Securities%20by%20the%20Issuer) In August 2025, BILL's board authorized a new $300 million share repurchase program, following the completion of a previous $300 million program in July 2025 - A new **$300 million** share repurchase program (2025 Share Repurchase Program) was authorized in August 2025[341](index=341&type=chunk)[342](index=342&type=chunk] - The August 2024 Share Repurchase Program, which had **$65.0 million** remaining as of June 30, 2025, was completed in July 2025, with **$235 million** repurchased by June 30, 2025[314](index=314&type=chunk)[343](index=343&type=chunk] - An additional **$200 million** in shares were repurchased in December 2024, concurrent with the issuance of the 2030 Notes[314](index=314&type=chunk) - Share repurchases are subject to a **1% non-deductible excise tax** under the Inflation Reduction Act of 2022[315](index=315&type=chunk] [Reserved](index=62&type=section&id=Item%206.%20Reserved) This item is reserved and not applicable - Not applicable[345](index=345&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=63&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes BILL's financial condition and results, showing $1.5 billion revenue and $23.8 million net income in fiscal 2025, discussing revenue models, metrics, and liquidity Revenue and Net Income (Loss) (Fiscal Years) | Fiscal Year | Total Revenue (in billions) | Net Income (Loss) (in millions) | | :---------- | :-------------------------- | :------------------------------ | | 2025 | $1.46 | $23.8 | | 2024 | $1.29 | $(28.9) | | 2023 | $1.06 | $(223.7) | - Macroeconomic conditions, including interest rate volatility and inflation, have impacted SMB spending patterns, leading to reduced TPV per customer in fiscal 2025 and a shift to lower-cost payment methods[355](index=355&type=chunk)[356](index=356&type=chunk] - Revenue is primarily generated from subscription fees (fixed monthly/annual rate) and transaction fees (fixed/variable rate per transaction), including interchange fees from card payments, and interest on funds held for customers[359](index=359&type=chunk)[360](index=360&type=chunk)[361](index=361&type=chunk)[385](index=385&type=chunk)[386](index=386&type=chunk)[387](index=387&type=chunk)[388](index=388&type=chunk)[389](index=389&type=chunk)[390](index=390&type=chunk)[391](index=391&type=chunk] - The company's business model relies on direct and indirect go-to-market strategies, with over **89%** of fiscal 2025 subscription and transaction revenue from existing BILL AP/AR customers, indicating strong retention[369](index=369&type=chunk)[370](index=370&type=chunk] Net Dollar-Based Retention Rate (Fiscal Years) | Fiscal Year | Net Dollar-Based Retention Rate | | :---------- | :------------------------------ | | 2025 | 94% | | 2024 | 92% | | 2023 | 111% | - The increase in net dollar-based retention rate in fiscal 2025 (**94% from 92%**) was due to increased revenue from financial institution partners and growth in total payment volume[372](index=372&type=chunk) [Overview](index=63&type=section&id=Overview) BILL is a leading AI-enabled financial operations platform for SMBs, automating payables, receivables, and spend/expense management, achieving significant revenue and net income in fiscal 2025 - BILL is a leading AI-enabled financial operations platform for SMBs, automating payables, receivables, and spend/expense management[350](index=350&type=chunk)[351](index=351&type=chunk] - The company partners with over **85 of the top 100 accounting firms** and **six of the top ten largest U.S. financial institutions** for SMBs[352](index=352&type=chunk] Fiscal Year 2025 Financial Highlights | Metric | Fiscal 2025 | | :---------------- | :------------------------ | | Revenue (in billions) | $1.5 | | Net Income (Loss) (in millions) | $23.8 (net income) | [Macroeconomic and Other Factors](index=63&type=section&id=Macroeconomic%20and%20Other%20Factors) Macroeconomic conditions, including interest rate volatility and inflation, have impacted SMBs and BILL's business, affecting TPV per customer and interest income - Macroeconomic conditions (interest rates, inflation, trade changes) have impacted SMBs, leading to reduced spending and a shift to lower-cost payment methods, affecting TPV per customer in fiscal 2025[355](index=355&type=chunk)[356](index=356&type=chunk] - Reductions in interest rates, while potentially improving SMB financial conditions, also decrease interest income earned on customer funds[356](index=356&type=chunk] [Our Revenue Model](index=64&type=section&id=Our%20Revenue%20Model) BILL generates revenue primarily from subscription fees, transaction fees (including interchange), and interest earned on customer funds held during payment processing - Primary revenue sources are subscription fees (fixed monthly/annual per user/account) and transaction fees (fixed/variable per transaction, including card payments, ACH, checks, cross-border, invoice financing)[359](index=359&type=chunk)[360](index=360&type=chunk] - Interest is earned on customer funds held during payment clearing, deposited in highly liquid investments, with revenue fluctuating based on fund volume and market interest rates[361](index=361&type=chunk] [Our Receivables Purchases and Servicing Model](index=64&type=section&id=Our%20Receivables%20Purchases%20and%20Servicing%20Model) BILL markets its Spend and Expense software and BILL Divvy Card, issuing cards through partner banks and using proprietary risk management, obligated to purchase 100% of receivables - BILL markets its Spend and Expense software and BILL Divvy Card, issuing cards through partner banks (Cross River Bank, WEX Bank) using proprietary risk management for credit underwriting[363](index=363&type=chunk)[364](index=364&type=chunk] - BILL is obligated to purchase **100% participation interests** in receivables generated from BILL Divvy Card transactions from Issuing Banks, funded by credit facilities or corporate cash[365](index=365&type=chunk)[367](index=367&type=chunk] [Our Business Model](index=65&type=section&id=Our%20Business%20Model) BILL acquires SMBs through direct and indirect channels, with strong retention indicated by over 89% of fiscal 2025 subscription and transaction revenue from existing customers - Customer acquisition is through direct digital marketing/inside sales and indirect partnerships with accounting firms, financial institutions, and software providers[369](index=369&type=chunk) - Over **89%** of fiscal 2025 subscription and transaction revenue from BILL AP/AR customers came from those acquired prior to the fiscal year, indicating strong retention (**86%** for BILL AP/AR customers as of June 30, 2024, retained as of June 30, 2025)[370](index=370&type=chunk] Net Dollar-Based Retention Rate (Fiscal Years) | Fiscal Year | Net Dollar-Based Retention Rate | | :---------- | :------------------------------ | | 2025 | 94% | | 2024 | 92% | | 2023 | 111% | - The increase in fiscal 2025 retention was due to increased revenue from financial institution partners and growth in total payment volume, while the decrease in fiscal 2024 was due to changes in customer spending patterns and macroeconomic softness[372](index=372&type=chunk) [Key Business Metrics](index=65&type=section&id=Key%20Business%20Metrics) BILL tracks 'Businesses Using Our Solutions,' 'Total Payment Volume (TPV),' and 'Transactions Processed' to reflect customer adoption, transaction value, and payment activity Key Business Metrics (Fiscal Years) | Metric | 2025 | 2024 | 2023 | % Growth 2025 | % Growth 2024 | | :-------------------------------- | :----- | :----- | :----- | :------------ | :------------ | | Businesses using our solutions | 493,800 | 474,600 | 461,000 | 4% | 3% | | Total Payment Volume (billions) | $329.8 | $292.4 | $266.0 | 13% | 10% | | Transactions processed (millions) | 121.3 | 103.8 | 85.1 | 17% | 22% | - As of June 30, 2025, BILL AP/AR customers totaled **~169,500**, BILL Spend and Expense businesses **~41,100**, and Embedded Solutions and Other customers **~283,200**[381](index=381&type=chunk] - In fiscal 2025, TPV by BILL AP/AR customers was **~$279.0 billion**, BILL Divvy Card volume **~$21.5 billion**, and Embedded Solutions and Other TPV **~$29.3 billion**[381](index=381&type=chunk] - In fiscal 2025, BILL AP/AR customers executed **~47.8 million transactions**, BILL Divvy Cards **~66.4 million**, and Embedded Solutions and Other **~7.1 million**[381](index=381&type=chunk] [Components of Results of Operations](index=67&type=section&id=Components%20of%20Results%20of%20Operations) This section details revenue from subscriptions, transactions, and interest, alongside service costs, R&D, sales/marketing, G&A, credit loss provisions, depreciation, and restructuring expenses - Revenue sources: subscription fees (fixed per user/account), transaction fees (fixed/variable per transaction, including interchange), and interest on funds held for customers[385](index=385&type=chunk)[386](index=386&type=chunk)[387](index=387&type=chunk)[388](index=388&type=chunk)[389](index=389&type=chunk)[390](index=390&type=chunk)[391](index=391&type=chunk] - Service costs include direct transaction processing costs (e.g., check printing, card fees), customer success personnel, outsourced support, and cloud infrastructure[392](index=392&type=chunk) - R&D expenses are primarily personnel-related for developing new/enhanced products, including AI tools, with a portion capitalized[393](index=393&type=chunk) - Sales and marketing expenses include card rewards, personnel, commissions, advertising, and marketing events[394](index=394&type=chunk) - General and administrative expenses cover finance, operations, risk, legal, HR, external professional services, and fraud losses[396](index=396&type=chunk) - Provision for expected credit losses reflects management's estimate of uncollectible balances on acquired card receivables, loans, and accounts receivable[397](index=397&type=chunk)[399](index=399&type=chunk] - Depreciation and amortization relate to property, equipment, and acquired intangible assets[400](index=400&type=chunk) - Restructuring costs primarily include employee severance and contract termination expenses from the December 2023 Restructuring Plan[401](index=401&type=chunk] [Results of Operations](index=70&type=section&id=Results%20of%20Operations) In fiscal 2025, total revenue grew 13% to $1.46 billion, leading to a net income of $23.8 million, driven by subscription and transaction fees despite lower interest income Consolidated Statements of Operations (Fiscal Years, in thousands) | Metric | 2025 | 2024 | 2023 | Change 2025 vs 2024 (Amount in thousands) | Change 2025 vs 2024 (%) | | :------------------------------------ | :--------- | :--------- | :--------- | :--------------------------- | :---------------------- | | Subscription and transaction fees (in thousands) | $1,300,804 | $1,122,733 | $944,710 | $178,071 | 16% | | Interest on funds held for customers (in thousands) | $161,766 | $167,439 | $113,758 | $(5,673) | (3)% | | **Total revenue (in thousands)** | **$1,462,570** | **$1,290,172** | **$1,058,468** | **$172,398** | **13%** | | Total cost of revenue (in thousands) | $272,103 | $234,616 | $193,977 | $37,487 | 16% | | **Gross profit (in thousands)** | **$1,190,467** | **$1,055,556** | **$864,491** | **$134,911** | **13%** | | Research and development (in thousands) | $340,059 | $336,754 | $314,632 | $3,305 | 1% | | Sales and marketing (in thousands) | $543,711 | $478,540 | $515,858 | $65,171 | 14% | | General and administrative (in thousands) | $281,913 | $277,662 | $249,054 | $4,251 | 2% | | Provision for expected credit losses (in thousands) | $72,749 | $60,105 | $32,224 | $12,644 | 21% | | Depreciation and amortization (in thousands) | $32,637 | $49,072 | $48,496 | $(16,435) | (33)% | | Restructuring (in thousands) | — | $27,587 | — | $(27,587) | (100)% | | **Total operating expenses (in thousands)** | **$1,271,069** | **$1,229,720** | **$1,160,264** | **$41,349** | **3%** | | Operating loss (in thousands) | $(80,602) | $(174,164) | $(295,773) | $93,562 | (54)% | | Other income, net (in thousands) | $111,012 | $147,845 | $72,856 | $(36,833) | (25)% | | Income (loss) before provision for income taxes (in thousands) | $30,410 | $(26,319) | $(222,917) | $56,729 | (216)% | | Provision for income taxes (in thousands) | $6,611 | $2,559 | $808 | $4,052 | 158% | | **Net income (loss) (in thousands)** | **$23,799** | **$(28,878)** | **$(223,725)** | **$52,677** | **(182)%** | Revenue Breakdown (Fiscal Years, in thousands) | Revenue Type | 2025 | 2024 | Change (Amount in thousands) | Change (%) | | :----------------------------- | :--------- | :--------- | :-------------- | :--------- | | Subscription fees (in thousands) | $272,136 | $257,143 | $14,993 | 6% | | Transaction fees (in thousands) | $1,028,668 | $865,590 | $163,078 | 19% | | Interest on funds held for customers (in thousands) | $161,766 | $167,439 | $(5,673) | (3)% | | **Total revenue (in thousands)** | **$1,462,570** | **$1,290,172** | **$172,398** | **13%** | - Gross margin decreased slightly to **81.4%** in fiscal 2025 from **81.8%** in fiscal 2024, primarily due to a change in the mix of payment processing costs[409](index=409&type=chunk) - Sales and marketing expenses increased by **$65.2 million (14%)** in fiscal 2025, mainly due to a **$52.2 million** increase in BILL Divvy Card rewards expense and higher advertising/marketing costs[412](index=412&type=chunk)[413](index=413&type=chunk] - Provision for expected credit losses increased by **$12.6 million (21%)** in fiscal 2025, driven by growth in loans held for investments, partially offset by a **$6.8 million** decrease in acquired card receivables due to methodology refinements and improved delinquency trends[416](index=416&type=chunk] - Other income, net decreased by **$36.8 million (25%)** in fiscal 2025, primarily due to a **$31.4 million** reduction in interest income from corporate funds and a lower gain on debt extinguishment[419](index=419&type=chunk)[422](index=422&type=chunk] [Non-GAAP Financial Measures](index=74&type=section&id=Non-GAAP%20Financial%20Measures) BILL uses non-GAAP measures like Gross Profit, Gross Margin, and Free Cash Flow to provide a clearer view of core operating performance, excluding certain non-cash and capital items - Non-GAAP financial measures (Non-GAAP Gross Profit, Non-GAAP Gross Margin, Free Cash Flow) are used to understand core operating performance, excluding items like depreciation, stock-based compensation, and capital expenditures[424](index=424&type=chunk)[425](index=425&type=chunk)[427](index=427&type=chunk)[428](index=428&type=chunk] Non-GAAP Gross Profit and Margin (Fiscal Years, in thousands) | Metric | 2025 | 2024 | 2023 | | :---------------------------------------------------- | :--------- | :--------- | :--------- | | Revenue (in thousands) | $1,462,570 | $1,290,172 | $1,058,468 | | Gross profit (in thousands) | $1,190,467 | $1,055,556 | $864,491 | | Add: Depreciation and amortization (in thousands) | $42,298 | $44,722 | $42,967 | | Add: Stock-based compensation and related payroll taxes (in thousands) | $9,920 | $9,594 | $9,428 | | **Non-GAAP gross profit (in thousands)** | **$1,242,685** | **$1,109,872** | **$916,886** | | Gross margin | 81.4% | 81.8% | 81.7% | | **Non-GAAP gross margin** | **85.0%** | **86.0%** | **86.6%** | Free Cash Flow (Fiscal Years, in thousands) | Metric | 2025 | 2024 | 2023 | | :------------------------------------------ | :--------- | :--------- | :--------- | | Net cash provided by operating activities (in thousands) | $350,644 | $278,771 | $187,768 | | Purchases of property and equipment (in thousands) | $(4,335) | $(976) | $(7,589) | | Capitalization of internal-use software costs (in thousands) | $(33,767) | $(19,917) | $(23,614) | | **Free cash flow (in thousands)** | **$312,542** | **$257,878** | **$156,565** | [Liquidity and Capital Resources](index=75&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, BILL had $1.0 billion in cash, $1.2 billion in short-term investments, and $420.0 million in undrawn credit, believing current liquidity is sufficient for the next 12 months Liquidity Sources (as of June 30, 2025, in billions) | Source | Amount (in billions) | | :-------------------------------- | :----- | | Cash and cash equivalents | $1.0 | | Available-for-sale short-term investments | $1.2 | | Undrawn Revolving Credit Facilities | $0.42 | - In December 2024, **$1.4 billion** in 2030 convertible senior notes were issued, with net proceeds used to repurchase 2025 and 2027 notes (**$130.8 million** and **$408.6 million**, respectively), repurchase **$200.0 million** of common stock, and pay **$93.0 million** for capped call transactions[432](index=432&type=chunk) - The company believes current liquidity is sufficient for the next 12 months but may raise additional capital through equity or debt, potentially diluting existing stockholders or increasing fixed payment obligations[433](index=433&type=chunk] - Share repurchase programs include the completion of the August 2024 program (**$300.0 million**) in July 2025 and the authorization of a new **$300 million** 2025 Share Repurchase Program in August 2025[437](index=437&type=chunk)[438](index=438&type=chunk] [Cash Flows](index=76&type=section&id=Cash%20Flows) Net cash from operating activities increased to $350.6 million in fiscal 2025, while investing activities used $817.4 million, and financing activities provided $666.5 million Consolidated Cash Flows (Fiscal Years, in thousands) | Cash Flow Type | 2025 | 2024 | 2023 | | :-------------------------------- | :--------- | :--------- | :--------- | | Net cash provided by operating activities (in thousands) | $350,644 | $278,771 | $187,768 | | Net cash provided by (used in) investing activities (in thousands) | $(817,390) | $(409,374) | $259,285 | | Net cash provided by (used in) financing activities (in thousands) | $666,522 | $(742,599) | $235,110 | - Net cash from operating activities increased due to revenue growth[443](index=443&type=chunk) - Net cash used in investing activities increased due to decreased proceeds from maturities of corporate/customer short-term investments and increased purchases, offset by changes in acquired card receivables[445](index=445&type=chunk] - Net cash provided by financing activities was driven by proceeds from new convertible senior notes, decreased payments for note repurchases, and increased prepaid card deposits, partially offset by increased common stock repurchases and capped call purchases[447](index=447&type=chunk] [2030 Notes](index=77&type=section&id=2030%20Notes) On December 6, 2024, BILL issued $1.4 billion in 0% convertible senior notes due April 1, 2030, with an initial conversion price of approximately $119.45 per share - Issued **$1.4 billion** in **0% convertible senior notes** due April 1, 2030, on December 6, 2024[448](index=448&type=chunk) - Notes are senior, unsecured obligations, convertible under specific conditions (e.g., stock price exceeding **130%** of conversion price)[448](index=448&type=chunk] - Initial conversion price is approximately **$119.45 per share**, with intent to settle conversions using cash for principal and common stock for excess value[448](index=448&type=chunk] [2027 Notes](index=77&type=section&id=2027%20Notes) BILL issued $575.0 million in 0% convertible senior notes due April 1, 2027; $451.5 million principal was repurchased in December 2024, leaving $123.5 million outstanding - Issued **$575.0 million** in **0% convertible senior notes** due April 1, 2027, on September 24, 2021[449](index=449&type=chunk) - In December 2024, **$451.5 million** principal amount was repurchased for **$408.6 million**, leaving **$123.5 million** outstanding[452](index=452&type=chunk] - Initial conversion price was approximately **$414.80 per share**, with intent to settle conversions using cash for principal and common stock for excess value[449](index=449&type=chunk)[451](index=451&type=chunk] [2025 Notes](index=78&type=section&id=2025%20Notes) BILL issued $1.15 billion in 0% convertible senior notes due December 1, 2025; repurchases reduced the outstanding principal to $33.5 million - Issued **$1.15 billion** in **0% convertible senior notes** due December 1, 2025, on November 30, 2020[453](index=453&type=chunk) - Repurchases in fiscal 2024 and December 2024 (totaling **$982.7 million** and **$133.9 million** principal, respectively) reduced the outstanding amount to **$33.5 million**[454](index=454&type=chunk] - Initial conversion price was approximately **$160.88 per share**, with intent to settle conversions using cash for principal and common stock for excess value[453](index=453&type=chunk] [Revolving Credit Facilities](index=78&type=section&id=Revolving%20Credit%20Facilities) BILL has two revolving credit facilities totaling $600.0 million capacity, secured by BILL Divvy Card receivables, with $180.0 million drawn from one and $150.0 million from the other - Total borrowing capacity from Revolving Credit Facilities is **$600.0 million**[431](index=431&type=chunk) - The 2021 Credit Facility has a **$300.0 million** capacity, with **$180.0 million** drawn as of June 30, 2025, maturing in June 2026[455](index=455&type=chunk] - The 2025 Credit Facility, established in May 2025, has a **$300.0 million** capacity, with **$150.0 million** borrowed in July 2025, maturing in November 2027[456](index=456&type=chunk] - Both facilities are secured by BILL Divvy Card receivables and subject to limited guarantees by BILL Holdings, Inc. and compliance with covenants[455](index=455&type=chunk)[457](index=457&type=chunk] [Off-Balance Sheet Arrangements](index=79&type=section&id=Off-Balance%20Sheet%20Arrangements) BILL is contractually obligated to purchase all card receivables from Issuing Banks, including $76.0 million in authorized but uncleared transactions, and has $3.6 billion in unused credit available - Contractually obligated to purchase all card receivables from Issuing Banks, including **$76.0 million** in authorized but uncleared transactions as of June 30, 2025, which are off-balance sheet[458](index=458&type=chunk] - Approximately **$3.6 billion** in unused credit was available to spending businesses and invoice financing borrowers as of June 30, 2025, not expected to be fully utilized[460](index=460&type=chunk] [Critical Accounting Estimates](index=79&type=section&id=Critical%20Accounting%20Estimates) BILL's financial statements require significant estimates for expected credit losses, goodwill impairment, and accrued rewards, involving substantial judgment and periodic review - Critical accounting estimates include expected credit losses on acquired card receivables and loans held for investment, goodwill valuation, and accrued rewards liability[463](index=463&type=chunk] - Estimates for expected credit losses involve models incorporating historical loss experience, current/future economic conditions, and portfolio segmentation by credit limit size, with qualitative reserves for unrepresented factors[464](index=464&type=chunk)[465](index=465&type=chunk] - Goodwill is monitored annually for impairment, with potential for non-cash impairment charges if financial results or macroeconomic conditions negatively impact fair value[467](index=467&type=chunk] - Accrued rewards liability is estimated based on historical redemption trends and weighted-average redemption costs, assuming substantially all earned rewards will be redeemed[468](index=468&type=chunk] [Recent Accounting Pronouncements](index=80&type=section&id=Recent%20Accounting%20Pronouncements) BILL adopted ASU 2023-07 retrospectively for fiscal 2025, and has several new ASUs (2023-09, 2024-03, 2024-04, 2025-05) effective in fiscal years 2026-2027 - Adopted ASU 2023-07 (Reportable Segments) retrospectively for fiscal year ended June 30, 2025, enhancing segment expense disclosures[594](index=594&type=chunk)[595](index=595&type=chunk] - New ASUs not yet adopted include ASU 2023-09 (Income Tax Disclosures, effective fiscal 2026), ASU 2024-03 (Disaggregation of Income Statement Expenses, effective fiscal 2027), ASU 2024-04 (Induced Conversions of Convertible Debt Instruments, effective fiscal 2026), and ASU 2025-05 (Financial Instruments - Credit Losses, effective fiscal 2026)[596](index=596&type=chunk)[597](index=597&type=chunk)[598](index=598&type=chunk)[599](index=599&type=chunk] [Quantitative and Qualitative Disclosures About Market Risk](index=80&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) BILL faces market risks from interest rate fluctuations on investments and customer funds, credit risk on receivables, and immaterial foreign currency exchange risk - Investment portfolio includes corporate investments and funds held for customers, primarily in highly liquid, investment-grade marketable securities and cash equivalents[471](index=471&type=chunk) - Exposed to interest rate risk on corporate cash and customer funds, with interest earned on customer funds recognized as revenue. The annualized interest rate earned decreased to **4.50%** in fiscal 2025 from **5.07%** in fiscal 2024[474](index=474&type=chunk)[475](index=475

Core Insights - BILL Holdings reported Q4 fiscal 2025 earnings of $0.53 per share, exceeding the Zacks Consensus Estimate of $0.41 but down from $0.57 in the same quarter last year [1][9] - Revenues reached $383.3 million, surpassing the consensus by 2% and reflecting an 11.5% year-over-year increase [1][9] - The company announced a $300 million share repurchase program, indicating confidence in its cash flow and long-term strategy [1] Financial Performance - For fiscal year 2025, non-GAAP earnings per share were $2.21, up from $2.12 in the previous year, with revenues of $1.46 billion, marking a 13% year-over-year increase [2] - In Q4, core revenues from subscription and transaction fees totaled $345.9 million, a 15% increase year over year, with transaction fees growing 18% to $277.1 million [3] - Non-GAAP gross profit was $322.7 million, an 11% increase year over year, while gross margin slightly contracted to 84.2% from 85% [5] Operational Metrics - The company processed $86 billion in total payment volume (TPV) during the quarter, a 13% increase year over year, and handled 33 million transactions, up 18% from the prior year [4] - As of June 30, 2025, cash, cash equivalents, and short-term investments totaled $2.22 billion, an increase from $1.59 billion a year earlier [6] Guidance - For Q1 fiscal 2026, BILL expects revenues between $385 million and $395 million, indicating a growth of 7-10% year over year, with non-GAAP EPS projected between $0.49 and $0.52 [7] - For fiscal 2026, projected revenues are in the range of $1.59 billion to $1.63 billion, implying a growth of 9-11% year over year, with non-GAAP earnings expected between $2.00 and $2.20 per share [8]

Core Insights - BILL Holdings reported revenue of $383.35 million for the quarter ended June 2025, marking an 11.6% year-over-year increase [1] - The company's EPS for the same period was $0.53, down from $0.57 a year ago, but exceeded the consensus estimate of $0.41 by 29.27% [1] - The reported revenue surpassed the Zacks Consensus Estimate of $375.7 million, resulting in a surprise of 2.04% [1] Key Performance Metrics - Total Payment Volume reached $86 billion, exceeding the estimated $83.4 billion [4] - Transactions processed amounted to 33 million, surpassing the average estimate of 32.42 million [4] - Revenue from subscription and transaction fees was $345.95 million, compared to the estimated $339.06 million, reflecting a 14.8% increase year-over-year [4] - Revenue from interest on funds held for customers was $37.4 million, slightly above the estimated $35.92 million, but showed a year-over-year decline of 11.7% [4] Stock Performance - Shares of BILL Holdings have declined by 9.8% over the past month, while the Zacks S&P 500 composite increased by 1.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Financial Data and Key Metrics Changes - Total revenue for fiscal year 2025 reached $1,500,000,000, with core revenue growth of 16% year over year [7] - Non-GAAP operating income exceeded the high end of initial guidance by over 20%, totaling $240,000,000 for the year [38][39] - Non-GAAP operating margin (ex float) expanded by 345 basis points year over year [38] Business Line Data and Key Metrics Changes - Bill APAR transaction revenue grew 15% year over year in Q4, with total payment volume increasing by 13% [40] - Revenue from spend and expense solutions totaled $151,000,000 in Q4, up 19% year over year, driven by a 22% growth in card payment volume [42] - The number of joint customers using both Bill APAR and spend and expense grew nearly 40% to 15,800 by year-end 2025 [43] Market Data and Key Metrics Changes - The Bill network surpassed 8,000,000 members, an increase of 18% from the previous year [12] - The net revenue retention rate, including financial institutions, was 94%, reflecting a lower B2B spend environment [41] - Annual customer retention remained healthy at 86%, indicating strong platform value [41] Company Strategy and Development Direction - The company aims to drive growth from its integrated platform, expand its addressable market, and innovate with AI to enhance value for SMBs [28][34] - Strategic investments were made to strengthen the core business and build a foundation for future growth, particularly in AI capabilities [22][36] - The launch of AgenTik AI is expected to transform financial operations for SMBs, moving towards a "do it for you" model [17][69] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in driving growth due to foundational elements built into the company and product platform [56] - The company anticipates some headwinds from external factors, including tariff impacts on SMB spending, but remains optimistic about internal growth initiatives [60][91] - The focus for fiscal year 2026 includes enhancing customer experience and expanding market penetration, particularly in the mid-market segment [32][81] Other Important Information - The company repurchased $100,000,000 of its stock in Q4 and plans to execute up to $300,000,000 in share repurchases in the fiscal year [50][51] - The new CFO, Rohini Jain, emphasizes transparency and accountability in communicating results and strategic priorities [37][64] Q&A Session Summary Question: What are the key factors that would drive any deceleration to the midpoint of revenue outlook? - Management highlighted foundational elements and product strengths as key drivers of growth, despite external pressures [56][60] Question: What are Rohini Jain's early impressions of the company? - Rohini noted the stickiness of the products and the strong execution culture within the team [64] Question: Can you elaborate on the agents opportunity across payables and payments? - Management discussed the transition from a "do it with you" to a "do it for you" model, leveraging AI to automate mundane tasks [68][69] Question: How do you think about evolving the go-to-market motion for the mid-market segment? - The company plans to continue leveraging existing channels while increasing resources focused on the mid-market segment [81] Question: What is the thought process behind the guidance for the year? - Management indicated that the guidance reflects a prudent approach considering macroeconomic headwinds, with potential for growth in the latter half of the year [91]

Financial Data and Key Metrics Changes - Total revenue for fiscal year 2025 reached $1.5 billion, with core revenue growth of 16% year over year [6][37] - Non-GAAP operating income exceeded the high end of initial guidance by over 20%, totaling $240 million for the year [6][37] - In Q4, core revenue grew 15% year over year, amounting to $346 million, surpassing guidance [38] Business Line Data and Key Metrics Changes - Bill APAR transaction revenue grew 15% year over year in Q4, contributing to a total payment volume increase of 13% [39] - Revenue from spend and expense solutions totaled $151 million in Q4, up 19% year over year, driven by a 22% increase in card payment volume [41] - The number of joint customers using both Bill APAR and spend and expense solutions grew nearly 40% to 15,800 by year-end 2025 [42] Market Data and Key Metrics Changes - The Bill network surpassed 8 million members, an increase of 18% from the previous year [12] - 54% of payments on Bill occur seamlessly within the network, enhancing transaction efficiency and visibility [13] - Mid-market customer growth outpaced overall customer growth by five points in fiscal year 2025 [30] Company Strategy and Development Direction - The company aims to drive growth from its integrated platform, expand its addressable market, and innovate with AI to enhance value for SMBs [26][32] - Strategic investments in AI and financial operations agents are expected to redefine financial management for SMBs [7][16] - The company is focused on enhancing its payment portfolio and expanding its market presence among mid-market businesses [28][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the foundational elements built into the company, which support growth and market penetration [57] - The company anticipates a stable core revenue growth outlook, with potential deceleration due to macroeconomic factors affecting SMB spending [58][59] - Management highlighted the importance of AI initiatives in driving customer retention and acquisition [17][33] Other Important Information - The company plans to repurchase up to $300 million in shares during the fiscal year, reflecting confidence in its growth strategy [49] - The new CFO, Rohini Jain, emphasizes transparency and accountability in communicating financial results and strategic priorities [36][64] Q&A Session Summary Question: Revenue outlook and factors affecting growth - Management noted strong Q4 performance but indicated potential deceleration in core revenue growth due to external factors impacting SMB spending [53][58] Question: Early impressions of the company and investor relations - The new CFO expressed excitement about the product stickiness and the team's expertise, aiming to strengthen communication with the investor community [62][64] Question: Agents opportunity across payables and payments - Management discussed the transition from a "do it with you" to a "do it for you" model, leveraging AI to automate mundane tasks in financial operations [67][70] Question: Mid-market growth and go-to-market strategy - The company plans to continue leveraging existing channels while increasing resources focused on the mid-market segment, which has shown faster growth [80][82] Question: Guidance and take rate outlook - Management provided insights on expected take rate expansion and the impact of macroeconomic conditions on customer spending [86][89]

BILL NYSE BILL Investor Deck Aug 2025 Champions of small and midsize businesses. In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles GAAP, this presentation contains non-GAAP financial measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and non-GAAP net income. The non-GAAP financial information is presented for supplemental informational purposes only and is not intended to be consid ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) BILL reported strong Q4 and FY25 financial results, emphasizing growth, profitability, and market penetration [Company Overview and Strategic Focus](index=1&type=section&id=Company%20Overview%20and%20Strategic%20Focus) BILL, a financial operations platform for SMBs, achieved strong Q4 and FY25 results, focusing on growth and profitability - Fiscal year 2025 was pivotal for BILL, driving growth and profitability, launching essential new software and payment products, and expanding market opportunity[2](index=2&type=chunk) - BILL's platform serves approximately **half a million SMBs** and **9,000 accounting firms**, with a network of **8 million members**, reinforcing its scale advantage[2](index=2&type=chunk) - The company is driving growth through strategic initiatives while sharpening its focus on expanding profitability, reflecting confidence in its strategy and investment opportunity[2](index=2&type=chunk) [Key Financial Achievements](index=1&type=section&id=Key%20Financial%20Achievements) BILL achieved significant financial growth in FY25 and Q4 FY25, with full-year total revenue at **$1.5 billion** FY25 and Q4 FY25 Key Financial Metrics | Metric | FY25 Value (Billions) | YoY Change | Q4 FY25 Value (Millions) | YoY Change | | :----------------- | :-------------------- | :--------- | :----------------------- | :--------- | | Total Revenue | $1.5 | +13% | $383.3 | +12% | | Core Revenue | $1.3 | +16% | $345.9 | +15% | [Financial Highlights for the Fourth Quarter of Fiscal 2025](index=1&type=section&id=Financial%20Highlights%20for%20the%20Fourth%20Quarter%20of%20Fiscal%202025) This section presents BILL's Q4 FY25 revenue, profitability, and earnings per share performance [Q4 Revenue Performance](index=1&type=section&id=Q4%20Revenue%20Performance) BILL's Q4 FY25 total revenue grew **12%** to **$383.3 million**, with core revenue increasing **15%** Q4 FY25 Revenue Performance | Metric | Q4 FY25 (Millions) | YoY Change | | :---------------------- | :----------------- | :--------- | | Total Revenue | $383.3 | +12% | | Core Revenue | $345.9 | +15% | | Subscription Fees | $68.8 | +5% | | Transaction Fees | $277.1 | +18% | | Float Revenue | $37.4 | N/A | [Q4 Profitability and Margins](index=1&type=section&id=Q4%20Profitability%20and%20Margins) Q4 FY25 GAAP gross profit reached **$309.8 million** with **80.8%** margin, non-GAAP operating income decreased **6%** Q4 FY25 Profitability and Margins | Metric | Q4 FY25 (Millions) | Q4 FY24 (Millions) | YoY Change | | :---------------------- | :----------------- | :----------------- | :--------- | | Gross Profit (GAAP) | $309.8 | $278.5 | +11.2% | | Gross Margin (GAAP) | 80.8% | 81.0% | -0.2 ppts | | Gross Profit (Non-GAAP) | $322.7 | $292.0 | +10.5% | | Gross Margin (Non-GAAP) | 84.2% | 85.0% | -0.8 ppts | | Operating Loss (GAAP) | ($22.3) | ($22.2) | -0.45% | | Operating Income (Non-GAAP) | $56.4 | $60.0 | -6% | [Q4 Net Income and EPS](index=1&type=section&id=Q4%20Net%20Income%20and%20EPS) BILL reported a GAAP net loss of **$7.1 million** in Q4 FY25, with non-GAAP net income at **$61.6 million** Q4 FY25 Net Income and EPS | Metric | Q4 FY25 (Millions) | Q4 FY24 (Millions) | YoY Change | | :---------------------- | :----------------- | :----------------- | :--------- | | Net Income (Loss) (GAAP) | ($7.1) | $7.6 | -193.4% | | EPS (GAAP, Basic) | ($0.07) | $0.07 | -200% | | EPS (GAAP, Diluted) | ($0.07) | ($0.03) | -133.3% | | Net Income (Non-GAAP) | $61.6 | $63.9 | -3.76% | | EPS (Non-GAAP, Diluted) | $0.53 | $0.57 | -7.02% | [Financial Highlights for Fiscal Year 2025](index=1&type=section&id=Financial%20Highlights%20for%20Fiscal%20Year%202025) This section details BILL's full fiscal year 2025 financial performance, covering revenue, profitability, and EPS [FY25 Revenue Performance](index=3&type=section&id=FY25%20Revenue%20Performance) BILL's FY25 total revenue grew **13%** to **$1.46 billion**, with core revenue increasing **16%** FY25 Revenue Performance | Metric | FY25 (Millions) | YoY Change | | :---------------------- | :-------------- | :--------- | | Total Revenue | $1,462.6 | +13% | | Core Revenue | $1,300.8 | +16% | | Subscription Fees | $272.1 | +6% | | Transaction Fees | $1,028.7 | +19% | | Float Revenue | $161.8 | N/A | [FY25 Profitability and Margins](index=3&type=section&id=FY25%20Profitability%20and%20Margins) FY25 GAAP gross profit reached **$1.19 billion** with **81.4%** margin, non-GAAP operating income increased **22%** FY25 Profitability and Margins | Metric | FY25 (Millions) | FY24 (Millions) | YoY Change | | :---------------------- | :-------------- | :-------------- | :--------- | | Gross Profit (GAAP) | $1,190.5 | $1,055.6 | +12.8% | | Gross Margin (GAAP) | 81.4% | 81.8% | -0.4 ppts | | Gross Profit (Non-GAAP) | $1,242.7 | $1,109.9 | +12% | | Gross Margin (Non-GAAP) | 85.0% | 86.0% | -1.0 ppts | | Operating Loss (GAAP) | ($80.6) | ($174.2) | +53.7% | | Operating Income (Non-GAAP) | $239.5 | $196.2 | +22% | [FY25 Net Income and EPS](index=3&type=section&id=FY25%20Net%20Income%20and%20EPS) BILL achieved a GAAP net income of **$23.8 million** in FY25, with non-GAAP net income increasing to **$251.8 million** FY25 Net Income and EPS | Metric | FY25 (Millions) | FY24 (Millions) | YoY Change | | :---------------------- | :-------------- | :-------------- | :--------- | | Net Income (Loss) (GAAP) | $23.8 | ($28.9) | +182.4% | | EPS (GAAP, Basic) | $0.23 | ($0.27) | +185.2% | | EPS (GAAP, Diluted) | ($0.07) | ($0.27) | +74.1% | | Net Income (Non-GAAP) | $251.8 | $244.0 | +3.2% | | EPS (Non-GAAP, Diluted) | $2.21 | $2.12 | +4.2% | [Business Highlights and Recent Developments](index=3&type=section&id=Business%20Highlights%20and%20Recent%20Developments) This section outlines BILL's recent strategic initiatives, operational achievements, and key leadership changes [New Share Repurchase Program](index=3&type=section&id=New%20Share%20Repurchase%20Program) BILL's Board of Directors authorized a new share repurchase program of up to **$300 million** - BILL's Board of Directors authorized a new share repurchase program of up to **$300 million** of its outstanding common stock[9](index=9&type=chunk) - The company expects to fund the share repurchase program using existing cash, reflecting confidence in its strategy and strong cash flow generation[2](index=2&type=chunk)[10](index=10&type=chunk) - Repurchases may occur through open market purchases, privately negotiated transactions, or Rule 10b5-1 trading plans, subject to market conditions[10](index=10&type=chunk) [Operational Metrics](index=3&type=section&id=Operational%20Metrics) BILL's platform served **493,800 businesses**, processed **$86 billion** in payment volume, and expanded its network - Served **493,800 businesses** using solutions as of Q4 FY25 end[15](index=15&type=chunk) - Processed **$86 billion** in total payment volume in Q4, an increase of **13%** year-over-year[15](index=15&type=chunk) - Processed **33 million transactions** during Q4, an increase of **18%** year-over-year[15](index=15&type=chunk) - **8.3 million BILL standalone network members** as of June 30, 2025, an increase of **18%** year-over-year[15](index=15&type=chunk) [Leadership Changes](index=3&type=section&id=Leadership%20Changes) BILL welcomed Rohini Jain, a technology industry finance leader, as its new Chief Financial Officer - Rohini Jain, a technology industry finance leader, was welcomed as BILL's Chief Financial Officer[15](index=15&type=chunk) [Financial Outlook](index=3&type=section&id=Financial%20Outlook) This section provides BILL's financial guidance for Q1 and full fiscal year 2026, including disclaimers [Q1 Fiscal Year 2026 Guidance](index=3&type=section&id=Q1%20Fiscal%20Year%202026%20Guidance) For Q1 FY26, BILL projects total revenue between **$385.0 million** and **$395.0 million** Q1 FY26 Financial Guidance | Metric | Q1 FY26 Guidance (Millions) | YoY Growth | | :-------------------------- | :-------------------------- | :--------- | | Total Revenue | $385.0 - $395.0 | 7% - 10% | | Core Revenue | $348.0 - $358.0 | 11% - 14% | | Non-GAAP Operating Income | $53.5 - $58.5 | N/A | | Non-GAAP Net Income | $56.5 - $60.5 | N/A | | Non-GAAP Net Income per Diluted Share | $0.49 - $0.52 | N/A | [Full Fiscal Year 2026 Guidance](index=3&type=section&id=Full%20Fiscal%20Year%202026%20Guidance) For FY26, BILL anticipates total revenue between **$1.59 billion** and **$1.63 billion**, indicating **9-11%** growth FY26 Financial Guidance | Metric | FY26 Guidance (Millions) | YoY Growth | | :-------------------------- | :----------------------- | :--------- | | Total Revenue | $1,589.5 - $1,629.5 | 9% - 11% | | Core Revenue | $1,450.5 - $1,490.5 | 12% - 15% | | Non-GAAP Operating Income | $240.0 - $270.0 | N/A | | Non-GAAP Net Income | $236.0 - $260.0 | N/A | | Non-GAAP Net Income per Diluted Share | $2.00 - $2.20 | N/A | [Forward-Looking Statements and Non-GAAP Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20and%20Non-GAAP%20Disclaimer) This section highlights uncertainties in financial projections and clarifies the basis for non-GAAP guidance - The outlook for non-GAAP net income and non-GAAP net income per diluted share includes a non-GAAP provision for income taxes of **20%**[12](index=12&type=chunk) - The non-GAAP net income per diluted share outlook does not account for future share repurchases, as their impact is not reasonably estimable[12](index=12&type=chunk) - Reconciliation of non-GAAP guidance to GAAP measures is not provided due to the inability to reasonably calculate or predict certain excluded items without unreasonable effort[14](index=14&type=chunk) [Company Information](index=5&type=section&id=Company%20Information) This section provides details on BILL's recent conference call and an overview of the company's mission [Conference Call and Webcast](index=5&type=section&id=Conference%20Call%20and%20Webcast) BILL hosted a conference call and webcast on **August 27, 2025**, to discuss Q4 and FY25 results and FY26 outlook - A conference call and webcast were held on **August 27, 2025**, to discuss financial results and outlook, with a replay available on the Investor Relations website[16](index=16&type=chunk) [About BILL](index=5&type=section&id=About%20BILL) BILL (NYSE: BILL) is a leading financial operations platform for SMBs, automating payables, receivables, and spend - BILL (NYSE: BILL) is a leading financial operations platform for small and midsize businesses (SMBs), automating payables, receivables, and spend/expense management[17](index=17&type=chunk) - The platform leverages a proprietary network of **millions of members** to facilitate faster payments and is headquartered in San Jose, California[17](index=17&type=chunk) - BILL is a trusted partner of leading U.S. financial institutions, accounting firms, and accounting software providers[17](index=17&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and explains the rationale behind BILL's use of non-GAAP financial measures and free cash flow [Non-GAAP Adjustments and Rationale](index=5&type=section&id=Non-GAAP%20Adjustments%20and%20Rationale) BILL uses non-GAAP measures, excluding items like stock-based compensation, for clearer operational insight - Non-GAAP financial measures are presented for supplemental informational purposes and are not a substitute for GAAP measures[19](index=19&type=chunk) - Excluded items from non-GAAP measures include stock-based compensation and related payroll taxes, depreciation and amortization, acquisition and integration-related expenses, restructuring, gain on debt extinguishment, and amortization of debt issuance costs[21](index=21&type=chunk)[22](index=22&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - Non-GAAP provision for income taxes is based on a statutory tax rate considering the nature of the taxed item and relevant jurisdiction[22](index=22&type=chunk) - These non-GAAP measures provide useful information for understanding financial performance, future prospects, and for management's financial and operational decision-making[23](index=23&type=chunk) [Free Cash Flow Definition](index=9&type=section&id=Free%20Cash%20Flow%20Definition) Free cash flow is a non-GAAP liquidity measure, indicating cash generated from operations after capital expenditures - Free cash flow is a non-GAAP measure defined as net cash provided by operating activities, adjusted by purchases of property and equipment and capitalization of internal-use software costs[33](index=33&type=chunk) - It serves as an important liquidity measure, indicating cash generated for future operational expenses and investment in the business[33](index=33&type=chunk) - Limitations include not reflecting future contractual commitments or the total increase/decrease in cash balance for a given period[33](index=33&type=chunk) [Condensed Consolidated Financial Statements](index=10&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents BILL's condensed consolidated balance sheets, statements of operations, and cash flows [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, BILL's total assets increased to **$10.06 billion**, driven by cash, investments, and customer funds Condensed Consolidated Balance Sheets | Metric | June 30, 2025 (Thousands) | June 30, 2024 (Thousands) | Change (Thousands) | | :-------------------------- | :------------------------ | :------------------------ | :----------------- | | **ASSETS** | | | | | Cash and cash equivalents | $1,038,346 | $985,941 | +$52,405 | | Short-term investments | $1,180,110 | $601,535 | +$578,575 | | Funds held for customers | $4,044,470 | $3,704,907 | +$339,563 | | Total assets | $10,063,982 | $9,178,813 | +$885,169 | | **LIABILITIES** | | | | | Convertible senior notes, net | $1,534,465 | $733,991 | +$800,474 | | Customer fund deposits | $4,044,470 | $3,704,907 | +$339,563 | | Total liabilities | $6,149,942 | $5,044,612 | +$1,105,330 | | **STOCKHOLDERS' EQUITY** | | | | | Total stockholders' equity | $3,914,040 | $4,134,201 | -$220,161 | [Condensed Consolidated Statements of Operations](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For FY25, total revenue grew **13%** to **$1.46 billion**, with reduced operating loss and a return to net income Condensed Consolidated Statements of Operations | Metric | Year Ended June 30, 2025 (Thousands) | Year Ended June 30, 2024 (Thousands) | YoY Change | | :-------------------------- | :----------------------- | :----------------------- | :--------- | | Total revenue | $1,462,570 | $1,290,172 | +13.4% | | Subscription and transaction fees | $1,300,804 | $1,122,733 | +15.9% | | Gross profit | $1,190,467 | $1,055,556 | +12.8% | | Operating loss | ($80,602) | ($174,164) | +53.7% | | Net income (loss) | $23,799 | ($28,878) | +182.4% | | Basic EPS | $0.23 | ($0.27) | +185.2% | | Diluted EPS | ($0.07) | ($0.27) | +74.1% | Stock-based Compensation | Stock-based Compensation | Year Ended June 30, 2025 (Thousands) | Year Ended June 30, 2024 (Thousands) | | :-------------------------------------- | :----------------------- | :----------------------- | | Total stock-based compensation | $242,532 | $248,375 | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) FY25 saw increased net cash from operating activities and improved financing, despite higher investing cash usage Condensed Consolidated Statements of Cash Flows | Metric | Year Ended June 30, 2025 (Thousands) | Year Ended June 30, 2024 (Thousands) | Change (Thousands) | | :-------------------------------------- | :----------------------- | :----------------------- | :----------------- | | Net cash provided by operating activities | $350,644 | $278,771 | +$71,873 | | Net cash used in investing activities | ($817,390) | ($409,374) | -$408,016 | | Net cash provided by (used in) financing activities | $666,522 | ($742,599) | +$1,409,121 | | Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents | $199,486 | ($873,442) | +$1,072,928 | | Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period | $3,550,884 | $3,351,398 | +$199,486 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=14&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations between GAAP and non-GAAP financial measures for performance indicators [Gross Profit Reconciliation](index=14&type=section&id=Gross%20Profit%20Reconciliation) The reconciliation details adjustments from GAAP to non-GAAP gross profit, primarily for depreciation and stock-based compensation Gross Profit Reconciliation | Metric | FY25 GAAP (Thousands) | FY25 Non-GAAP (Thousands) | FY24 GAAP (Thousands) | FY24 Non-GAAP (Thousands) | | :-------------------------- | :-------------------- | :------------------------ | :-------------------- | :------------------------ | | Gross profit | $1,190,467 | $1,242,685 | $1,055,556 | $1,109,872 | | Gross margin | 81.4% | 85.0% | 81.8% | 86.0% | | Add: Depreciation and amortization | $42,298 | | $44,722 | | | Add: Stock-based compensation and related payroll taxes charged to cost of revenue | $9,920 | | $9,594 | | [Operating Expenses Reconciliation](index=14&type=section&id=Operating%20Expenses%20Reconciliation) This reconciliation adjusts GAAP operating expenses for R&D, Sales & Marketing, and G&A by removing non-cash items Operating Expenses Reconciliation | Metric | FY25 GAAP (Thousands) | FY25 Non-GAAP (Thousands) | FY24 GAAP (Thousands) | FY24 Non-GAAP (Thousands) | | :-------------------------- | :-------------------- | :------------------------ | :-------------------- | :------------------------ | | Research and development | $340,059 | $229,804 | $336,754 | $230,994 | | Sales and marketing | $543,711 | $502,910 | $478,540 | $428,467 | | General and administrative | $281,913 | $197,676 | $277,662 | $194,125 | | Less: Stock-based compensation and related payroll taxes (R&D) | ($110,255) | | ($105,760) | | | Less: Stock-based compensation and related payroll taxes (S&M) | ($40,801) | | ($50,073) | | | Less: Stock-based compensation and related payroll taxes (G&A) | ($84,329) | | ($82,565) | | [Operating Loss Reconciliation](index=14&type=section&id=Operating%20Loss%20Reconciliation) The reconciliation converts GAAP operating loss to non-GAAP operating income by adding back non-cash expenses Operating Loss Reconciliation | Metric | FY25 GAAP (Thousands) | FY25 Non-GAAP (Thousands) | FY24 GAAP (Thousands) | FY24 Non-GAAP (Thousands) | | :-------------------------- | :-------------------- | :------------------------ | :-------------------- | :------------------------ | | Operating loss | ($80,602) | $239,546 | ($174,164) | $196,181 | | Add: Depreciation and amortization | $74,935 | | $93,794 | | | Add: Stock-based compensation and related payroll taxes | $245,305 | | $247,992 | | | Add: Restructuring | ($92) | | $27,587 | | [Net Income (Loss) Reconciliation](index=15&type=section&id=Net%20Income%20%28Loss%29%20Reconciliation) This reconciliation details adjustments from GAAP net income (loss) to non-GAAP net income, including tax provisions Net Income (Loss) Reconciliation | Metric | FY25 GAAP (Thousands) | FY25 Non-GAAP (Thousands) | FY24 GAAP (Thousands) | FY24 Non-GAAP (Thousands) | | :-------------------------- | :-------------------- | :------------------------ | :-------------------- | :------------------------ | | Net income (loss) | $23,799 | $251,798 | ($28,878) | $243,994 | | Add: GAAP provision for income taxes | $6,611 | | $2,559 | | | Add: Depreciation and amortization | $74,935 | | $93,794 | | | Add: Stock-based compensation and related payroll taxes | $245,305 | | $247,992 | | | Less: Gain on debt extinguishment | ($40,550) | | ($45,271) | | | Less: Non-GAAP provision for income taxes | ($62,949) | | ($60,999) | | [Net Income (Loss) Per Share Reconciliation](index=15&type=section&id=Net%20Income%20%28Loss%29%20Per%20Share%20Reconciliation) This reconciliation adjusts GAAP EPS to non-GAAP diluted EPS by accounting for stock-based compensation and tax provisions Net Income (Loss) Per Share Reconciliation | Metric | FY25 GAAP (Per Share) | FY25 Non-GAAP (Per Share) | FY24 GAAP (Per Share) | FY24 Non-GAAP (Per Share) | | :-------------------------- | :-------------------- | :------------------------ | :-------------------- | :------------------------ | | Basic EPS | $0.23 | $2.43 | ($0.27) | $2.30 | | Diluted EPS | ($0.07) | $2.21 | ($0.27) | $2.12 | | Add: Stock-based compensation and related payroll taxes | $2.37 | | $2.34 | | | Less: Non-GAAP provision for income taxes | ($0.61) | | ($0.57) | | [Free Cash Flow](index=17&type=section&id=Free%20Cash%20Flow) BILL's free cash flow for FY25 increased to **$312.5 million**, calculated by adjusting operating cash flow Free Cash Flow Reconciliation | Metric | FY25 (Thousands) | FY24 (Thousands) | | :-------------------------- | :--------------- | :--------------- | | Net cash provided by operating activities | $350,644 | $278,771 | | Purchases of property and equipment | ($4,335) | ($976) | | Capitalization of internal-use software costs | ($33,767) | ($19,917) | | Free cash flow | $312,542 | $257,878 | [Remaining Performance Obligations](index=18&type=section&id=Remaining%20Performance%20Obligations) As of June 30, 2025, BILL's total remaining performance obligations amounted to **$73.1 million**, with a portion due within one year Remaining Performance Obligations | Period | June 30, 2025 (Thousands) | | :-------------------------------------- | :------------------------ | | Over the next 1 year | $33,221 | | Between 1 to 2 years | $17,166 | | Thereafter | $22,668 | | Total | $73,055 |

Core Insights - BILL Holdings, Inc. is expected to report its fourth-quarter 2025 results on August 27, with projected revenues between $370.5 million and $380.5 million, indicating growth of 8-11% [1] - The Zacks Consensus Estimate for fourth-quarter revenues is $375.70 million, reflecting a 9.3% increase year-over-year, while the consensus for earnings is 41 cents per share, representing a decline of 28.07% from the previous year [2] - For fiscal 2025, management anticipates revenues between $1.45 billion and $1.46 billion, suggesting growth of 12-13%, with non-GAAP EPS projected between $2.06 and $2.09 [2][3] Revenue and Earnings Projections - The Zacks Consensus Estimate for BILL's fiscal 2025 revenues is $1.45 billion, indicating a year-over-year rise of 12.77%, while the consensus for full-year EPS is $2.09, suggesting a 1.42% decline [3] - For the fourth quarter, management expects core revenues of $335 million to $345 million, which translates to 11-15% year-over-year growth [12] - The consensus estimate for core revenues, which includes subscription and transaction fees, is currently $339.06 million, up from $320.3 million in the prior quarter and $301.31 million in the year-ago period [12] Transaction and Payment Volume - BILL is projected to process 32.4 million transactions in Q4, an increase from 30 million in the prior quarter and 28 million in the year-ago period, reflecting strong engagement from small and mid-sized businesses (SMBs) [15] - The Zacks Consensus Estimate for total payment volume (TPV) in Q4 is around $83.4 billion, up from $79 billion in the prior quarter and $76 billion in the year-ago period [15] Strategic Developments - BILL is strategically advancing by broadening its offerings for larger enterprises and enhancing its payments portfolio, with a focus on AI-driven initiatives for SMBs [9][10] - Recent product launches include Supplier Payments Plus, aimed at automating accounts receivable workflows for high-volume SMB payments, and innovations in procurement and financial automation [10] Market Performance and Valuation - BILL shares have declined 4.8% over the past three months, contrasting with a 14% increase in the Zacks Internet - Software industry and an 11.9% rise in the S&P 500 [17] - The stock is currently trading at a forward Price/Sales (P/S) ratio of 2.60X, which is below the industry average of 5.70X and at a discount compared to peers like SAP and Intuit [18] Overall Assessment - BILL's expanding customer base and comprehensive product suite are driving growth and profitability, although macroeconomic headwinds pose risks for SMB spending [19] - The company holds a Zacks Rank 3 (Hold), indicating a cautious outlook while monitoring future earnings and developments [20]

Core Insights - BILL Holdings (BILL) is expected to report quarterly earnings of $0.41 per share, a decline of 28.1% year-over-year, with revenues forecasted at $375.7 million, reflecting a 9.3% increase compared to the same period last year [1] Earnings Estimates - The consensus EPS estimate has been revised 3.3% lower over the last 30 days, indicating a collective reevaluation by analysts [2] - Revisions to earnings estimates are significant indicators for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock price performance [3] Key Metrics - Analysts estimate 'Revenue- Interest on funds held for customers' to be $35.92 million, a decrease of 15.2% from the prior-year quarter [5] - 'Revenue- Subscription and transaction fees' is projected to reach $339.06 million, indicating a year-over-year increase of 12.5% [5] - Total Payment Volume is expected to be $83.40 billion, up from $76.00 billion a year ago [6] - The estimated 'Transactions Processed' is 32.42 million, compared to 28.00 million in the same quarter of the previous year [6] Stock Performance - Over the past month, BILL Holdings shares have recorded a return of -8.8%, while the Zacks S&P 500 composite has changed by +1.1% [6] - BILL Holdings holds a Zacks Rank 3 (Hold), suggesting its performance will likely align with the overall market in the upcoming period [6]

Industry Overview - Internet stocks are benefiting from the ongoing digitalization wave, which is driving rapid adoption of AI and cloud computing [1] - The deployment of standalone 5G networks and AI-powered services is increasing the usage of social media platforms, digital advertising, online delivery models, streaming, and e-commerce growth [2] - Despite macroeconomic challenges, these factors are expected to positively impact Internet stocks during the earnings season [2] Company Earnings Insights - Four Internet stocks, Globant (GLOB), NICE (NICE), Affirm Holdings (AFRM), and Bill Holdings (BILL), are well-positioned to exceed earnings estimates this season [3] - Meta Platforms reported a 5% increase in ad conversions on Instagram and 3% on Facebook due to its new AI-powered recommendation model [5] - Microsoft’s AI assistants have reached 100 million monthly active users, and Alphabet is enhancing user experience through AI in its Search features [6] - Amazon's advertising business grew 23% year-over-year to $15.69 billion, attributed to successful AI-powered optimization [7] Company-Specific Projections - Globant expects revenues of at least $612 million for Q2 2025, reflecting a 4.2% year-over-year growth, with earnings estimated at $1.52 per share [12][13] - NICE anticipates non-GAAP revenues of $709-$719 million for Q2 2025, indicating 7% year-over-year growth, with earnings projected between $2.93 and $3.03 per share [15][16] - Affirm Holdings forecasts GMV between $9.4 billion and $9.7 billion for Q4 fiscal 2025, with revenues expected to be between $815 million and $845 million [17] - BILL Holdings expects revenues between $370.5 million and $380.5 million for Q4 fiscal 2025, suggesting year-over-year growth of 8-11% [19][20]