Bill.com Holdings, Inc. Q1 FY2026 earnings call

• Strong Q1 results: Core revenue grew to $358 million, up 14% YOY, and non-GAAP operating margin was 17%.
• Embed partnerships: Signed 3 broad-reaching Embed partnerships with category-leading software providers, extending BILL's reach. Examples include partnerships with NetSuite, Paychex, and Acumatica.
• AI leadership: Introduced new intelligent AI agents for automation, such as the W-9 agent that simplifies W-9 management and an agent for automatic transaction coding in expense processing.
• BILL Cash account: Launched a high-yield, fully integrated operating bank account to help businesses manage cash flow, optimize operations, and earn interest.
• Mid-market focus: Spend & Expense solution saw strong traction with higher spend businesses, and efforts to adapt go-to-market strategies for mid-market customers.
• Accounting channel: Added over 250 accounting firms, bringing total to over 9,300 firms, strengthening the distribution strategy.

In fiscal Q1 2026, BILL's core revenue grew to $358 million, a 14% year-over-year increase. Within the integrated platform, BILL AP/AR revenue grew 10% year-over-year, with subscription revenue up 6%. BILL AP/AR transaction revenue was $123 million, up 12% year-over-year. BILL Spend & Expense card payment volume increased 21% year-over-year, and Spend & expense revenue totaled $157 million in Q1, reflecting a 19% growth year-over-year. The AP/AR segment contributed significantly to overall revenue, while Spend & Expense also saw notable growth in payment volume and revenue.

• Fiscal Q2 '26: Expected total revenue $395M-$405M, core revenue $359M-$369M; non-GAAP operating income $63M-$68M, non-GAAP net income $63M-$67M, non-GAAP EPS $0.54-$0.57.
• Fiscal '26: Core revenue $1.46B-$1.49B, total revenue $1.6B-$1.63B; non-GAAP operating income $257M-$277M (16%-17% non-GAAP operating margin); non-GAAP net income $249M-$265M, non-GAAP EPS $2.11-$2.25; stock-based compensation expenses approximately $260M, 10% lower than previous communication.

• Uncertainties in forward-looking statements: Actual results could differ materially from forward-looking statements.
• Market conditions: Impact on financial results due to economic uncertainties and changing market dynamics.
• Execution risks: Risks related to successfully executing strategic initiatives, including integration of partnerships and scaling AI agents.

Q: About moving upmarket, whether seeing customer numbers yet and payback period, unit economics, sales and marketing intensity?

A: John Rettig said focus on mid-market is an evolution with increased demand, making steady progress in acquiring mid-market businesses, and a typical mid-market customer has 2x TPV of average SMB and is more likely to adopt multiple products.

Q: On Rule of 40 definition and thought process?

A: René Lacerte said profitability is part of the company's DNA, and Rohini Jain mentioned they'll share the framework during Investor Day '26.

Q: On embedded 2.0 initiative, product functionality, go-to-market, and monetization?

A: René Lacerte explained Embed 2.0 enables extending APIs into partner experiences, joint go-to-market efforts, and rev share monetization model.

Q: Update on invoice financing initiative?

A: René Lacerte said strong growth in emerging ad valorem portfolio, nearly 40% YOY growth in Q1, with focus on profitability balance.

Q: On AR/AP take rate and initiatives to drive it?

A: Rohini Jain said take rate expansion similar to last year, with emerging portfolio growth and SPP contributing to expansion.

Q: On shift to larger clients and impact on P&L, partner channel?

A: John Rettig said mid-market focus drives stronger engagement, retention, and growth, with strategic pricing and agent rollouts contributing.

Q: On BILL Cash account and spend & expense rewards?

A: René Lacerte and John Rettig discussed BILL Cash account's strategic value, revenue benefits, and scrutiny of spend & expense rewards structure to drive profitability.