BILL (US:BILL)2025-11-06 22:34Financial Performance - Revenue for the three months ended September 30, 2025, was $395.7 million, an increase of $37.3 million from $358.5 million in the same period of 2024[137] - Total revenue for the three months ended September 30, 2025, increased by $37.3 million, or 10%, compared to the same period in 2024, reaching $395.7 million[187] - The company generated a net loss of $3.0 million for the three months ended September 30, 2025, compared to a net income of $8.9 million in the same period of 2024[137] - Net loss for the period was $2.96 million, a significant decline from a net income of $8.9 million in the same period last year, marking a 133% decrease[184] Transaction and Customer Metrics - The total payment volume (TPV) for the three months ended September 30, 2025, was $89.3 billion, representing a 12% growth from $79.8 billion in 2024[158] - The number of businesses using the company's solutions increased to 498,500 as of September 30, 2025, up 5% from 476,200 in 2024[158] - The company processed 33.3 million transactions during the three months ended September 30, 2025, a 16% increase from 28.6 million transactions in 2024[158] - The total number of BILL AP/AR customers was approximately 173,500 as of September 30, 2025[158] - The total number of spending businesses using the BILL Spend and Expense solution was approximately 42,500 as of September 30, 2025[158] Expenses and Costs - Subscription and transaction fees contributed $358.0 million, a 14% increase from $314.9 million in the prior year, driven by a $39.7 million increase in transaction fee revenue[187] - Service costs rose by $12.5 million, or 23%, to $66.1 million, impacting gross profit which increased by $25.0 million, or 9%, to $318.7 million[189] - Gross margin decreased to 80.5% for the three months ended September 30, 2025, down from 82.0% in the prior year, attributed to changes in cost mix[189] - Research and development expenses increased by $1.6 million, or 2%, primarily due to a $10.4 million rise in personnel-related costs, offset by a $9.9 million decrease from higher capitalization of software development costs[190] - Sales and marketing expenses increased by $22.9 million, or 18%, reflecting continued investment in brand awareness and customer acquisition[184] - General and administrative expenses rose by $10.1 million, or 15%, as the company expanded its administrative functions to support growth initiatives[184] - The operating loss for the three months ended September 30, 2025, was $20.7 million, compared to a loss of $7.7 million in the prior year, representing a 169% increase in losses[184] Cash Flow and Investments - Free cash flow increased to $82.3 million for the three months ended September 30, 2025, compared to $81.5 million in the prior year period[209] - Cash and cash equivalents totaled $1.1 billion, with available-for-sale short-term investments of $1.2 billion as of September 30, 2025[211] - Net cash provided by operating activities increased to $96.9 million during the three months ended September 30, 2025, from $88.6 million in the prior year period[220] - Net cash used in investing activities decreased to $108.7 million during the three months ended September 30, 2025, from $139.5 million in the prior year period[223] - Net cash provided by financing activities was $1.1 million for the three months ended September 30, 2025, compared to a net cash used of $105.2 million in the prior year period[225] Debt and Financing - Issued $1.4 billion in aggregate principal amount of 0% convertible senior notes due on April 1, 2030, with a conversion price of $119.45 per share[226] - Issued $575.0 million in aggregate principal amount of 0% convertible senior notes due on April 1, 2027, with a conversion price of $414.80 per share[227] - Repurchased $451.5 million of 2027 Notes for $408.6 million in cash, leaving $123.5 million outstanding[228] - Repurchased $1.116 billion of 2025 Notes for $1.0634 billion in cash, leaving $33.5 million outstanding[231] - Total borrowing capacity of $300.0 million under the 2021 Credit Facility, with $180.0 million borrowed as of September 30, 2025[232] - Total borrowing capacity of $300.0 million under the 2025 Credit Facility, with $150.0 million borrowed as of September 30, 2025[233] Credit and Risk Management - The company is exposed to credit risk related to customer funds collected, with potential credit losses if customers dispute transactions after funds are remitted[254] - The company continually evaluates the credit quality of securities in its portfolios, making decisions based on credit rating thresholds and payment performance[255] - Credit risk arises from card receivable balances and loans held for investment, with potential defaults due to various factors including bankruptcy and operational failure[256] - The company relies on the creditworthiness of spending businesses for repayment of card receivables, which limits recourse for collection[256] Foreign Currency Risk - Foreign currency exchange risk is present in the company's cross-border payment service, with transaction fees not adjusted for foreign exchange fluctuations[257] - The company's Canadian subsidiary is also exposed to foreign currency exchange risk, affecting financial results due to transaction gains or losses[258] - A 10% change in the value of the U.S. dollar relative to foreign currencies is believed to have an immaterial effect on cash flows and operating results[259] New Initiatives - The company launched BILL AI in October 2025, introducing AI agents designed to autonomously collect and validate W-9s and reconcile receipts[136] - The company announced a reduction in force impacting approximately 6% of employees to improve organizational agility and efficiency[142]