Financial Data and Key Metrics Changes - In Q2 2026, the company reported $375 million in core revenue, reflecting a 17% year-over-year growth and exceeding guidance [26][30] - Non-GAAP operating margin was 18%, showing a sequential and year-over-year expansion [26][29] - AP/AR transaction revenue reached $128 million, up 14% year-over-year, with TPV per customer increasing modestly [27][28] Business Line Data and Key Metrics Changes - AP/AR core revenue grew 11% year-over-year, with approximately 4,000 net new customers added in Q2 [26][27] - Spend and expense revenue totaled $166 million, representing a 24% year-over-year growth, driven by card volume growth [28] - The number of businesses using both AP/AR and spend and expense solutions grew 28% year-over-year [9][19] Market Data and Key Metrics Changes - The company observed strong spend growth in manufacturing and a rebound in construction, reversing previous trends [27][55] - Card payment volume increased by 25% year-over-year, particularly in advertising, retail, and healthcare services [28] - The same-store sales growth for the AP/AR platform was 4%, an acceleration from the previous quarter [55] Company Strategy and Development Direction - The company aims to drive growth from its integrated platform, expand its addressable market, and innovate with AI to create value [19][25] - The Embed 2.0 strategy is designed to extend reach with SMBs and enhance distribution through partnerships [11][24] - The company is focused on optimizing pricing to align with the value delivered to customers, particularly in the AP/AR segment [22][63] Management's Comments on Operating Environment and Future Outlook - Management noted resilience among SMBs and the importance of innovation in creating stickiness with the platform [51][55] - The company expects to see continued growth in invoice financing, with a 50% year-over-year increase in customers [10][66] - Management expressed confidence in the company's unique position and the ability to leverage AI for future growth [41][62] Other Important Information - The company repurchased $133 million of stock during the quarter, maintaining a disciplined approach to share repurchases [29] - The company expects core revenue for fiscal 2026 to be in the range of $1.490 billion to $1.510 billion, reflecting 15%-16% growth year-over-year [31][32] Q&A Session Summary Question: How at risk is BILL from AI disruption? - Management believes the impact of AI is overplayed and emphasizes the company's unique expertise and data assets as competitive advantages [36][38] Question: What is the attribution for growth acceleration? - Management attributes growth to a strong platform, customer value delivery, and resilience in SMBs, alongside innovation [51][55] Question: What are the risks to pricing algorithms in the context of AI? - Management asserts that pricing is based on the value created for customers and sees AI as a tool to enhance efficiency and value [62][63] Question: What is the update on the strategic process review? - Management is focused on optimizing costs and enhancing efficiency, with a roadmap for opportunities identified [77][78] Question: How does the company view its ability to win in the move-up market? - Management believes in the unique value of its platform for larger businesses and is seeing positive signals in adoption and ARPU growth [80][82]

Financial Data and Key Metrics Changes - In Q2, the company reported $375 million in core revenue, representing a 17% year-over-year growth, exceeding guidance expectations [26] - Non-GAAP operating margin was 18%, showing a sequential and year-over-year expansion [26][29] - AP/AR transaction revenue reached $128 million, up 14% year-over-year, with TPV per customer increasing modestly [27] - Spend & Expense revenue totaled $166 million, reflecting a 24% year-over-year growth driven by card volume growth [28] Business Line Data and Key Metrics Changes - AP/AR core revenue grew 11% year-over-year, with approximately 4,000 net new customers added in Q2 [27] - Spend & Expense revenue growth was primarily driven by a 25% year-over-year increase in card payment volume [28] - The number of businesses using both AP/AR and Spend & Expense grew 28% year-over-year in Q2 [9] Market Data and Key Metrics Changes - The company observed continued strength in manufacturing and an uptick in construction, reversing previous trends [27] - Spend growth was noted in advertising, retail, and healthcare services, indicating a resurgence in discretionary spending [55] Company Strategy and Development Direction - The company aims to drive growth from its integrated platform, expand its addressable market, and innovate with AI to create value [19] - The Embed 2.0 growth strategy is designed to extend reach with SMBs and complement existing go-to-market channels [11] - The company is focused on enhancing its offerings for accountants and leveraging AI to automate workflows [8][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of SMBs and the value created through innovation, which is expected to enhance stickiness with the platform [51] - The company anticipates continued growth in core revenue and profitability, with a focus on larger customers and improved pricing alignment [26][30] - Management highlighted the importance of trust and data as key differentiators in the competitive landscape [39][40] Other Important Information - The company repurchased $133 million of stock during the quarter, indicating a disciplined approach to capital allocation [29] - The company expects core revenue for fiscal 2026 to be in the range of $1.490 billion to $1.510 billion, reflecting 15%-16% growth year-over-year [31] Q&A Session Summary Question: How at risk is BILL from AI disruption? - Management believes the impact of AI is overplayed and emphasizes the unique expertise and data the company possesses, which cannot be easily replicated [36][41] Question: What is the attribution for growth acceleration? - Management attributes growth to a strong platform, customer value delivery, and resilience in SMBs, alongside innovation creating stickiness [51][55] Question: How sustainable is the growth in Spend & Expense? - Management notes recent positive trends in discretionary spending but remains cautious about long-term sustainability, indicating a need for continued observation [56] Question: What are the risks to pricing algorithms in the context of AI? - Management asserts that pricing is tied to the value delivered to customers and sees opportunities for growth through AI-driven efficiencies [62] Question: What is the status of the strategic process review? - Management indicates ongoing efforts to optimize costs and improve efficiency, with initial benefits expected in fiscal 2027 [77][78] Question: How does the company view its position in the move-up market? - Management expresses confidence in its differentiated platform and the ability to deliver value to larger businesses, with expectations for increased ARPU and retention [80][82]