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]

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 expectations [23] - Non-GAAP operating margin was 18%, showing both sequential and year-over-year expansion [23][26] - The company repurchased $133 million of stock during the quarter, indicating a disciplined approach to share repurchases [26] Business Line Data and Key Metrics Changes - AP/AR core revenue grew 11% year-over-year, with transaction revenue reaching $128 million, up 14% year-over-year [23][24] - Spend and expense revenue totaled $166 million, representing a 24% year-over-year growth, driven by a 25% increase in card payment volume [24][25] - The number of businesses using both AP/AR and spend and expense solutions grew 28% year-over-year in Q2 [7] Market Data and Key Metrics Changes - The company observed strong spend trends in manufacturing and a rebound in construction, reversing previous trends [24][51] - There was a resurgence in spending in advertising and retail sectors, which had been muted in prior quarters [51] Company Strategy and Development Direction - The company is focused on three strategic priorities: driving growth from its integrated platform, expanding its addressable market, and innovating with AI to create value [16] - The Embed 2.0 growth strategy aims to extend reach with SMBs and enhance distribution through partnerships, unlocking potential to reach close to 1 million businesses [9][10] - The company is enhancing its offerings for accountants and larger businesses, indicating a shift towards targeting larger clients [18][79] 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 drive stickiness and growth [49] - The company anticipates continued momentum in invoice financing, with a nearly 50% year-over-year growth in customers using this service [8][64] - Management highlighted the importance of trust and unique data assets as competitive advantages against potential AI disruptions [33][36] Other Important Information - The company expects core revenue for fiscal 2026 to be in the range of $1.490 billion to $1.510 billion, reflecting a 15%-16% growth year-over-year [29] - Stock-based compensation expenses are projected to be approximately $255 million, below previous guidance [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 company's unique expertise and data assets as competitive advantages [33][36] Question: What contributed to the growth acceleration? - Management attributes growth to the durability of the business model and the resilience of SMBs, alongside innovation creating more value opportunities [49][51] Question: How sustainable is the growth in spend and expense? - Management sees encouraging signs in recent spending trends but remains cautious about baking in these trends into future guidance [55] Question: What is the outlook for invoice financing? - Management notes strong demand for invoice financing, with repeat usage and significant impact on cash flow for SMBs [64][66]

Summary of BILL Holdings (NYSE:BILL) 2025 Conference Call Company Overview - **Company**: BILL Holdings (NYSE:BILL) - **Event**: 2025 Conference Call - **Date**: December 03, 2025 Key Points Strategic Priorities - **Durable Growth**: The CFO emphasized the importance of driving durable growth through three main initiatives: 1. **AI Integration**: Utilizing AI to enhance customer experiences and modernize services [11][12] 2. **Supplier Payment Plus (SPP)**: Aiming to monetize a large Total Payment Volume (TPV) on the platform, with a focus on revenue growth [12] 3. **Embed Work**: Targeting specific customer segments and expanding channels like accountants to capture market opportunities [13] Cost Structure and Profitability - **Cost Refinement**: There are opportunities to optimize the cost structure to enhance profitability and shareholder value [14] - **Balancing Growth and Profitability**: The CFO highlighted the importance of revenue growth as a pathway to profitability, with a goal to achieve the Rule of 40 [19][20] Mid-Market Focus - **Reallocation of Resources**: The company is reallocating resources to focus on mid-market initiatives rather than smaller customers, which may lead to fluctuations in Net New Adds (NNA) in the short term [24][25] - **Customer Segmentation**: BILL is refining its target customer profile to focus on higher-end mid-market customers who require comprehensive services [31][36] Key Performance Indicators (KPIs) - **NNA and ARPU**: The company will monitor NNA and Average Revenue Per User (ARPU) as key metrics to gauge success in the mid-market transition [29][30] - **TPV and Revenue Growth**: The CFO expects to see increases in TPV and revenue per customer as the mid-market strategy unfolds [30][49] Pricing Strategy - **Modular Pricing**: BILL is introducing modular pricing to align the value provided with the price charged, allowing customers to pay for specific features as needed [51][53] - **Long-term Pricing Framework**: A comprehensive pricing strategy is being developed to ensure clarity and structure in pricing across the business [52][53] Take Rate and Emerging Portfolio - **Take Rate Growth**: The company reported a 0.3 basis point expansion in take rate, with expectations for continued growth driven by the emerging portfolio [55] - **Supplier Payment Plus (SPP)**: SPP is anticipated to contribute significantly to take rate growth in the following year [59] Embed Partnerships - **Partnerships with Major Players**: BILL has formed partnerships with companies like NetSuite and Paychex, which are expected to enhance market reach and customer acquisition [60][62] - **Revenue Sharing**: These partnerships include revenue-sharing models that simplify sales processes and reduce costs for BILL [62][63] Future Outlook - **Optimism for Growth**: The CFO expressed confidence in achieving growth targets and improving profitability through strategic initiatives and market focus [20][49] Additional Insights - **Customer Experience Improvements**: Efforts are underway to modernize the platform and reduce onboarding friction, which is expected to decrease churn rates [26] - **Market Conditions**: The company is not anticipating significant macroeconomic changes that could impact performance, focusing instead on internal execution and customer needs [43][44] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting BILL Holdings' focus on growth, profitability, and market positioning.

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