BILL (US:BILL)2020-05-10 03:53Financial Data and Key Metrics Changes - Core revenue grew by 63% year-over-year to $36.1 million, while total revenue increased by 46% year-over-year to $41.2 million [10][36] - Non-GAAP gross margins were strong at 78.8%, up from 76% in the same quarter last year [40] - The company processed $24.2 billion in total payment volume (TPV), a 35% increase year-over-year, and handled over 6 million payment transactions, representing a 23% year-over-year growth [12][32] Business Line Data and Key Metrics Changes - Subscription revenue rose to $22.3 million, a 44% increase year-over-year, driven by more customers and higher average revenue per customer [37] - Transaction revenue surged to $13.8 million, up 106% year-over-year, attributed to the adoption of new product offerings and an increase in transaction volume [38] - Float revenue decreased by 16% year-over-year to $5.1 million, primarily due to a significant reduction in the federal funds rate [39] Market Data and Key Metrics Changes - The company ended the quarter with over 91,000 customers, reflecting a 28% year-over-year growth [11][29] - The monthly attrition rate increased by approximately 15% in April compared to March, particularly in industries severely impacted by COVID-19 [34] Company Strategy and Development Direction - The company aims to support small and mid-sized businesses (SMBs) through the COVID-19 crisis by waiving subscription fees for new customers and offering assistance to existing customers [7][17] - Bill.com is focused on expanding its payment rails and capturing more business-to-business payment flows from both direct and financial institution partners [27] - The company is investing in R&D to enhance platform capabilities and support larger mid-market customers [48] Management's Comments on Operating Environment and Future Outlook - Management noted that the COVID-19 pandemic has created uncertainty but also highlighted the opportunity for digital transformation in financial operations for SMBs [14][46] - The company expects total revenue for Q4 to be in the range of $37.4 to $38.4 million, with core revenue projected between $34.8 to $35.6 million [48] - Management acknowledged the potential for increased customer acquisition and retention due to heightened awareness of the need for digital solutions [63] Other Important Information - The company has a strong balance sheet with over $382 million in cash and short-term investments [16][45] - Bill.com has established partnerships with major financial institutions, including Wells Fargo, to enhance its service offerings [24][79] Q&A Session Summary Question: Can you elaborate on the attrition rates and renewal rates? - Management indicated that while there was some attrition in severely impacted industries, overall renewal rates remained stable, with strong inflows in March and April [54][55] Question: What is the trend in transaction revenue as a percentage of TPV? - The transaction revenue per transaction increased to approximately $2.30, up 10% sequentially and 68% year-over-year, driven by the adoption of new products [61] Question: Are there specific verticals seeing increased inbound activity? - Management noted that the increased activity was broad-based, driven by a general awareness of the need for digital financial operations rather than concentrated in specific verticals [63] Question: How are financial institution partners responding to the current environment? - Financial institution partners are keen to assist their customers, particularly with PPP programs, and there is increased interest in marketing Bill.com's features [73][74] Question: What is the impact of the free trial offer on customer acquisition? - The free trial offer is seen as additive to the typical customer acquisition flow, with over 1,000 trial customers signing up under the new offer [81]