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]

Core Insights - 13D Activist Fund reported a Q3 2025 return of 8.88%, underperforming the Russell 2000 Index which returned 12.39% [1] - The Russell 2000 outperformed the S&P 500 by the largest margin in three years, with returns of 12.39% compared to 8.12% for the S&P 500 [1] Company Overview: BILL Holdings, Inc. - BILL Holdings, Inc. provides cloud-based software solutions aimed at simplifying and automating back-office financial operations for small and midsize businesses (SMBs) [2][3] - The stock of BILL Holdings, Inc. had a one-month return of 16.66%, but it has lost 45.78% of its value over the past 52 weeks, closing at $51.76 per share with a market capitalization of $5.196 billion on December 03, 2025 [2] Revenue Breakdown - BILL's revenue for 2025 was $1.45 billion, with the following contributions: - Accounts Payable/Accounts Receivable generated $668 million, accounting for 46% of total revenue, with one-third from subscription fees and the remainder from payment processing fees [3] - BILL Spend and Expense, which includes the BILL Divvy Card, contributed $555 million, representing 38% of total revenue [3] - Embedded and Other Solutions, including white label solutions and Invoice2go, generated $78 million, or 5% of total revenue [3] - Interest on funds held for customers contributed $162 million, making up 11% of total revenue [3]