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]