Bill Holdings, Inc. Q3 FY2025 earnings call

Key Points

• Delivered strong financial results in Q3 with core revenue growth, non-GAAP operating income margin of 15%, and free cash flow growth of 44%.
• Made progress on strategic priorities: expanded capabilities for larger businesses, enhanced payment portfolio, extended lead in accounting channel, added new distribution channel, and accelerated AI growth strategy.
• Launched advanced solutions for large businesses to address complex needs like multi-entity management. Expanded supplier experience offerings with solutions for enterprise and smaller suppliers. Broadened ecosystem with accounting firms and financial institutions, and increased AI investment for customer-facing experiences.

In Q3, core revenue grew 14% year-over-year. Total revenue was $358 million, up 11% year-over-year. Core revenue (subscription and transaction fees) was $320 million, up 14% year-over-year. Float revenue was $38 million. Non-GAAP operating income margin was 15%. Free cash flow grew 44% year-over-year in Q3 with a 25% margin. Within the integrated platform, revenue from the BILL AP AR solution was $164 million, up 10% year-over-year with 4,200 net new customers. Revenue from the BILL spend and expense solution was $138 million, up 21% year-over-year driven by 22% card payment volume growth. Revenue from embedded and other solutions was $19 million.

Fiscal Q4 Guidance

• Core revenue expected $335M - $345M (11%-15% yoy growth).
• Total revenue expected $370.5M - $380.5M.
• Float revenue expected $35.5M, assuming a yield on FBO funds of ~400 basis points.
• Non-GAAP operating income expected $43M - $48M.
• Non-GAAP net income expected $46.5M - $50.5M, non-GAAP net income per diluted weighted average share $0.39 - $0.43.

Full Year 2025 Guidance

• Core revenue expected $1.290B - $1.300B (15%-16% yoy growth).
• Total revenue expected $1.450B - $1.460B.
• Float revenue expected ~$160M, assuming a yield on FBO funds of ~435 basis points and exit fed funds rate of 425 basis points as of June 2025.
• Non-GAAP operating income expected $226.2M - $231.2M.
• Non-GAAP net income expected $236.7M - $240.7M, non-GAAP net income per diluted weighted average share $2.06 - $2.09.

• Macroeconomic uncertainty affecting SMB spend patterns, leading to constrained near-term TPV per customer growth and monetization expansion.
• FX volatility impact on international payments, though proactive measures to manage currency exposure have been taken.
• Potential headwinds from trade policy changes and uncertainty in SMB spend categories like travel, entertainment, and retail.

Q: Ian Black asked about cross-sell with accountants A: Rene Lacerte responded that they continue to invest in the platform, accountants are receptive, and there's significant opportunity to drive cross-sell among accountants Q: Tien-Tsin Huang asked about investments and macro impact A: Rene Lacerte stated confidence in company execution, and John Rettig discussed FX losses and international payment product improvements Q: Kenneth Suchoski asked about tariffs and cross-border transactions A: John Rettig responded on cross-border transaction mix, FX exposure, and progress with international payment product Q: Chris Quintero asked about pricing and packaging A: Rene Lacerte talked about product innovation and AI driving potential pricing changes Q: Andrew Schmidt asked about payments monetization A: John Rettig discussed Q3 take rate expansion drivers and positive early reads on new payment products Q: Darrin Peller asked about take rate and 2026 guidance A: John Rettig mentioned Q4 monetization expectations and uncertainty in FY2026 guidance Q: Alexander Markgraff asked about AI agents A: Rene Lacerte explained how AI agents will simplify SMB financial processes using company's data and customer understanding Q: Adib Choudhury asked about advanced ACH and spend mix A: Rene Lacerte and John Rettig discussed advanced ACH rollout and spend mix trends in Divvy Q: Andrew Harte asked about price increases for ACH and check A: John Rettig discussed timing of price increases and future pricing optimization plans