Bill Holdings, Inc. Q2 FY2025 earnings call

• Delivered strong financial results in Q2, with 16% year-over-year core revenue growth and non-GAAP operating margin of 17%.
• Launched innovative product updates, including embedded 1099 functionality, and expanded the platform and distribution ecosystem.
• Leveraged AI to eliminate data entry, accelerate payments, and match customers with suppliers.
• Highlighted success with customers like Ignite Medical Resorts, which transformed its financial operations using Bill.com's platform.
• Progress in payments, including card adoption tripling over two years and expansion into working capital solutions.
• Strengthened ecosystem partnerships with accounting firms and banks, and expanded network to over 7 million members.
• Added new board directors Carrie Gohman and Dan Wernicott with expertise in scaling SaaS and FinTech businesses.

Total revenue in Q2 was $363 million, up 14% year over year. Core revenue, including subscription and transaction fees, was $320 million, up 16% year over year. Float revenue was $43 million. Revenue from the integrated platform (Bill APAR and spend and expense solutions) was $301 million, up 16% year over year. Bill APAR solution revenue was $167 million, up 13% year over year. Spend and expense solution revenue was $134 million, up 21% year over year, driven by 23% card payment volume growth. Embedded and other solutions revenue was $19 million, up 16% year over year. Non-GAAP operating margin was 17% and free cash flow margin was 20%.

• Fiscal Q3 core revenue expected to be in the range of $317.5 to $322.5 million (13% to 15% year-over-year growth), total revenue $352.5 to $357.5 million, float revenue $35 million with a yield on FBO funds of approximately 390 basis points.
• Fiscal Q3 non-GAAP operating income expected $38 to $43 million, non-GAAP net income $42 to $46 million.
• Full-year 2025 core revenue expected $1.297 billion to $1.312 billion (16% to 17% year-over-year growth), total revenue $1.454 billion to $1.469 billion.
• Full-year 2025 non-GAAP operating income expected $207.5 to $222.5 million, non-GAAP net income $216 to $228 million.

Uncertainty related to potential fiscal and trade policy changes and their impact on SMB sentiment and spend.

Q: Chris Quintero from Morgan Stanley asked about monetization headwinds and product improvements.

A: John Rettig responded that Q2 monetization was affected by seasonality, FX volatility, and mix shift in payment types, but expected initiatives to drive monetization expansion.

Q: Tien-Tsin Huang from JPMorgan asked about monetization, FX, and spending.

A: John Rettig discussed FX impact and progress against $45M targeted spend. Rene Lacerte added on investment areas and progress in value prop, supplier experience, account relationships, and ecosystem expansion.

Q: Andrew Schmidt from Citigroup asked about take rate and product engine.

A: John Rettig talked about ad valorem volume growth and Rene Lacerte emphasized scale and innovation driving product development.

Q: Kenneth Suchoski from Autonomous asked about take rate and TPV per customer.

A: John Rettig clarified FX impact and Rene Lacerte spoke about TPV trends and share of wallet growth.

Q: Andrew Estes from Wolfe Research asked about product engine and subscription products.

A: Rene Lacerte highlighted scale and innovation enabling product innovation, and John Rettig discussed TPV per customer and macro trends.

Q: Samad Samana from Jefferies asked about forecasting monetization and spend and expense mix.

A: John Rettig explained forecasting philosophy and Rene Lacerte discussed spend and expense mix impact.

Q: Brian Keane from Deutsche Bank asked about core revenue guidance and enhanced ACH rollout.

A: John Rettig explained guidance shift and Rene Lacerte talked about enhanced ACH beta and rollout timing.

Q: Alexander McGrath from KeyCorp asked about treasury products.

A: Rene Lacerte discussed Bill.com's existing payment products and treasury function focus.

Q: Scott Berg from Needham and Company asked about guidance caution and product initiatives.

A: Rene Lacerte spoke about reacceleration target and John Rettig discussed macro monitoring.

Q: Brad Sills from Bank of America asked about growth initiatives and take rate.

A: Rene Lacerte highlighted multiple growth initiatives like supplier work and newer ad valorem products.