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BILL (BILL) - 2025 Q1 - Earnings Call Transcript
BILLBILL (BILL)2024-11-08 01:12
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Financial Data and Key Metrics Changes - In Q1 2025, the company reported strong core revenue growth of 19% year-over-year, up from 16% in the previous quarter [9][40] - Total revenue reached 358million,an18358 million, an 18% increase year-over-year [43] - Non-GAAP operating income margin improved to 19%, an increase of 8 percentage points from the previous year [9][50] - Free cash flow margin expanded to 23%, reflecting a 7 percentage point increase from last year [10][50] - Non-GAAP net income was 69 million, up 33% year-over-year, with a non-GAAP net income margin of 19% [51] Business Line Data and Key Metrics Changes - Revenue from the integrated platform, excluding the financial institution channel, was 295million,up18295 million, up 18% year-over-year [44] - BILL AP/AR solution revenue was 162 million, a 13% increase year-over-year, with total payment volume (TPV) growing 12% [45] - BILL Spend & Expense solution revenue was 133million,up25133 million, up 25% year-over-year, driven by 26% card payment volume growth [46] - Revenue from embedded and other solutions, including Invoice2go, was 20 million, up 28% year-over-year [48] Market Data and Key Metrics Changes - The company managed 80billionintotalpaymentvolumeacross29millionpaymenttransactionsduringthequarter[10]−TheannualgrowthratesforinternationalFXpaymentvolumeandrevenueincreasedby10percentagepointscomparedtothepreviousquarter[36]CompanyStrategyandDevelopmentDirection−Thecompanyisfocusedonexpandingitsleadinthefinancialoperationscategoryforsmallandmid−sizedbusinesses(SMBs)[15][27]−Investmentsarebeingmadeinenhancingvirtualcard,internationalpayments,andworkingcapitalsolutionstodrivesustainablerevenuegrowth[34][36]−Thecompanyaimstoleverageitslargedistributionecosystem,whichincludespartnershipswithover8,500accountingfirms,toenhancemarketpenetration[26]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementnotedthatwhiletheeconomyremainsuncertain,therearesignsofresilienceamongSMBs,whichisexpectedtosupportgrowth[92]−Thecompanyiscommittedtobalancinginvestmentsforfuturegrowthwhilereturningcapitaltoshareholders,havingrepurchased80 billion in total payment volume across 29 million payment transactions during the quarter [10] - The annual growth rates for international FX payment volume and revenue increased by 10 percentage points compared to the previous quarter [36] Company Strategy and Development Direction - The company is focused on expanding its lead in the financial operations category for small and mid-sized businesses (SMBs) [15][27] - Investments are being made in enhancing virtual card, international payments, and working capital solutions to drive sustainable revenue growth [34][36] - The company aims to leverage its large distribution ecosystem, which includes partnerships with over 8,500 accounting firms, to enhance market penetration [26] Management's Comments on Operating Environment and Future Outlook - Management noted that while the economy remains uncertain, there are signs of resilience among SMBs, which is expected to support growth [92] - The company is committed to balancing investments for future growth while returning capital to shareholders, having repurchased 200 million of shares [30][31] - Guidance for Q2 2025 expects total revenue in the range of 355.5millionto355.5 million to 360.5 million, reflecting a conservative outlook due to economic uncertainties [54] Other Important Information - The company introduced new payment innovations, including real-time funding options and expanded international payment capabilities [19][21] - The company has added leadership talent to its executive team to drive innovation and growth in payments and financial services [29] Q&A Session Summary Question: Success in moving upmarket with BILL AP/AR - Management highlighted a focus on driving more functionality per customer, resulting in increased value and revenue growth [62][64] Question: Trends in vendor acceptance and take rate - Management noted stable take rates and ongoing efforts to engage suppliers, which have positively impacted overall monetization [68][70] Question: New client growth expectations - Management emphasized a strong focus on different go-to-market strategies, with significant opportunities to increase market penetration among SMBs [80][81] Question: Health of small businesses and durability of TPV increase - Management expressed confidence in the resilience of SMBs and noted positive signals in spending trends, indicating a potential for sustained growth [92][111] Question: Insights on investment spending and risk appetite - Management confirmed that investments are on track and that they are leveraging data to manage risk effectively while scaling new products [84][88]