Bill.com Holdings, Inc. Q2 FY2026 earnings call

• Strong core revenue growth: Delivered $375 million in core revenue, growing 17% year-over-year, exceeding guidance range. - Operating margin: Non-GAAP operating margin was 18% in Q2. - Agentic AI initiatives: Agentic AI live across the platform, focusing on vendor management, transaction entry, operational efficiency, and risk management. For example, W-9 agent collected nearly 10,000 customers' W-9s since Q2 launch, and invoice coding agent reduced steps by 90%. - Embed 2.0 strategy: New partnerships with NetSuite, Acumatica, and Paychex in market within 3 months, unlocking potential to reach close to 1 million businesses. - SMB resilience: Increasing spend volumes across the platform, with 28% year-over-year growth in businesses using both AP/AR and Spend & Expense.

In Q2, AP/AR core revenue was $128 million, up 14% year-over-year. Spend & Expense revenue totaled $166 million in Q2, representing 24% year-over-year growth. AP/AR core revenue growth was 11% year-over-year, with AP/AR transaction revenue at $128 million, up 14% year-over-year. Spend & Expense revenue was driven by accelerated card volume growth and better-than-expected take rate, with card payment volume increasing 25% year-over-year.

• Q3 2026: Expect total revenue in the range of $397.5 million to $407.5 million and core revenue in the range of $364.5 million to $374.5 million, reflecting 14% to 17% year-over-year growth. Non-GAAP operating income expected in the range of $62.5 million to $67.5 million. - FY2026: Expect core revenue in the range of $1.490 billion to $1.510 billion, reflecting 15% to 16% growth. Total revenue expected in the range of $1.631 billion to $1.651 billion. Non-GAAP operating income guidance implies a year-over-year margin expansion of more than 320 basis points, excluding the benefit of float. Non-GAAP net income expected in the range of $267.5 million to $277.5 million and non-GAAP EPS between $2.33 and $2.41.

• AI disruption: While AI is seen as a tool to accelerate software development, competition from AI startups could pose a risk. - Macroeconomic factors: Uncertainty in the SMB spend environment could impact revenue growth if macroeconomic conditions deteriorate.

Q: How at risk is BILL from AI disruption and what is its competitive moat?

A: René Lacerte stated BILL's competitive moat includes large quantum of contextual data, trust from customers, and network effects. AI is seen as a tool to accelerate software development and bring BILL's expertise to life.

Q: On the opportunity front with AI, thoughts on the agent strategy and SMB feedback?

A: René Lacerte mentioned the agent strategy targets specific use cases to reduce SMB work, with positive feedback like self-serve rates increasing from 13% to over 40% with the Bill Assistant agent.

Q: Attribution of growth acceleration, macro vs. investments?

A: René Lacerte and Rohini Jain discussed the durability of the business, execution of GTM and product strategy, and resurgence of spend in certain verticals as factors in growth acceleration.

Q: Sustainability of Spend & Expense growth?

A: Rohini Jain noted strong Q2 results and early trends indicating sustainability, with the range provided in guidance feeling solid.

Q: Sustainability of Embedded growth and comparison to other channels?

A: Rohini Jain and René Lacerte discussed Embed 2.0 being nascent but with potential, with Embed 2.0 partners like NetSuite, Acumatica, and Paychex in market, and the channel expected to expand distribution footprint over time.

Q: Pricing impact for core AP/AR solution and win rates?

A: John Rettig and Rohini Jain mentioned ongoing pricing optimization, with targeted changes and positive early results, and the strategy being a multiyear effort with initial benefits expected in fiscal '27.

Q: Ramp in SPP commitments and monetization rate?

A: John Rettig discussed SPP having strong early traction with early adopting suppliers committing $400 million in annual TPV, noting it's an enterprise sales motion with long sales cycle but big opportunity long term.