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BILL Holdings, Inc. (BILL)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 FY25 delivered solid growth and profitability: total revenue $362.6M (+14% YoY), core revenue $319.6M (+16% YoY), non-GAAP operating income $62.8M, and non-GAAP diluted EPS $0.56; GAAP gross margin 81.6% and non-GAAP gross margin 85.2% .
  • Segment performance mixed: Spend & Expense revenue $134M (+21% YoY) on +23% card volume, while AP/AR revenue $167M (+13% YoY); overall monetization dipped slightly QoQ due to TPV seasonality, mix shift toward ACH/check, and FX volatility (IP monetization ~0.3 bps below expectation) .
  • Guidance: Q3 FY25 total revenue $352.5–$357.5M; FY25 raised/maintained with total revenue $1.454–$1.469B and profitability increased (non-GAAP EPS $1.87–$1.97 vs prior $1.65–$1.83) .
  • Capital structure actions: issued $1.4B 0% converts (2030), repurchased $134M (2025 notes) and $451M (2027 notes), and bought back ~2.3M shares for ~$200M, reinforcing liquidity and share count efficiency .

What Went Well and What Went Wrong

What Went Well

  • Core revenue growth +16% YoY with non-GAAP operating margin at 17% (+300 bps YoY), reflecting disciplined execution and efficiency; “free cash flow margin of 20% in Q2” .
  • Spend & Expense strength: revenue $134M (+21% YoY), card payment volume +23%; interchange 257 bps, rewards 48% of S&E revenue .
  • Strategic channel momentum: accounting net new adds +38% YoY; Embedded 2.0 Spend & Expense integration live with 200+ customers and early signs of higher card spend .

Selected quotes:

  • “We delivered strong financial results… Non-GAAP operating margin was 17% and expanded 3 percentage points year-over-year. … free cash flow margin of 20% in Q2.”
  • “Q2 marked another quarter of BILL successfully balancing growth and profitability… priority investment areas across payments and working capital, supplier solutions, accounting firms and embedded finance.”
  • “In Q2, net new adds in our accounting channel increased 38% from the same period a year ago.”

What Went Wrong

  • Monetization came in slightly below internal expectations QoQ due to seasonality (December TPV mix shift to ACH/check) and FX volatility; international payments monetization ~0.3 bps below expectation .
  • Advertising category acceptance policy change by the largest online ad player shifted volume from cards to ACH, creating ~4 points of revenue headwind for S&E and modest card spend pressure .
  • AP/AR TPV per customer declined 1% YoY; overall transaction monetization was down slightly QoQ amid mix effects .

Financial Results

MetricQ4 FY24Q1 FY25Q2 FY25
Total Revenue ($M)$343.7 $358.5 $362.6
Core Revenue ($M)$301.3 $314.9 $319.6
Subscription Fees ($M)$65.8 $67.4 $67.7
Transaction Fees ($M)$235.5 $247.5 $251.9
Float Revenue ($M)$42.4 $43.5 $42.9
Gross Margin (GAAP, %)81.0% 82.0% 81.6%
Gross Margin (Non-GAAP, %)85.0% 85.7% 85.2%
Non-GAAP Operating Income ($M)$60.0 $67.1 $62.8
GAAP EPS (Basic)$0.07 $0.08 $0.33
GAAP EPS (Diluted)($0.03) $0.08 ($0.06)
Non-GAAP EPS (Diluted)$0.57 $0.63 $0.56
Free Cash Flow ($M)$73.1 $81.5 $71.6

Segment breakdown (Q2 FY25):

SegmentQ2 FY25 Revenue ($M)YoY Growth
BILL AP/AR$167 +13%
Spend & Expense$134 +21%
Embedded & Other (incl. FI channel, Invoice2go etc.)$19 +16%
Integrated Platform Total$301 +16%

KPIs:

KPIQ4 FY24Q1 FY25Q2 FY25
Businesses served474,600 476,200 481,300
TPV ($B)$76 $80 $84
Transactions (M)28 29 30

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($M)Q3 FY25N/A$352.5–$357.5 New
Core Revenue ($M)Q3 FY25N/A$317.5–$322.5 New
Float Revenue ($M)Q3 FY25N/A~$35 New
Non-GAAP Operating Income ($M)Q3 FY25N/A$38–$43 New
Non-GAAP Net Income ($M)Q3 FY25N/A$42–$46 New
Non-GAAP EPS (Diluted)Q3 FY25N/A$0.35–$0.38 New
Total Revenue ($B)FY25$1.439–$1.464 $1.454–$1.469 Raised (tightened)
Core Revenue ($B)FY25$1.291–$1.316 $1.297–$1.312 Maintained/tightened
Float Revenue ($M)FY25N/A~$157 New
Non-GAAP Operating Income ($M)FY25$182.5–$207.5 $207.5–$222.5 Raised
Non-GAAP Net Income ($M)FY25$181.5–$201.5 $216–$228 Raised
Non-GAAP EPS (Diluted)FY25$1.65–$1.83 $1.87–$1.97 Raised

Notes: Guidance assumes a 20% non-GAAP tax rate; Q3/FY25 share count assumptions exclude future repurchases .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY24, Q1 FY25)Current Period (Q2 FY25)Trend
AI/technology initiativesCategory-defining platform; margin expansion and profitability focus “Leading AI-enabled platform… non-GAAP operating margin 17%, FCF margin 20%” Strengthening
Monetization/take rateMixed monetization trends amid macro; focus on ad valorem products Slight QoQ downtick from seasonality, mix shift to ACH/check, FX volatility; IP monetization ~0.3 bps below plan Near-term headwind; H2 improves
Supplier solutions (advanced ACH, straight-through processing)Building capabilities; FI learnings Advanced ACH in beta; new STP provider launched; targeting large suppliers (5,000 ACH/check per quarter) Accelerating rollout
Accounting firm channelStrategic asset; distribution leverage Net new adds +38% YoY; multi-entity/1099 tools; enhanced coverage teams Positive momentum
Embedded 2.0FI channel history; embed expansionSpend & Expense integration live; 200+ customers with higher card spend Scaling
Working capital/invoice financingBuilding underwriting; access to liquidity 30,000+ vendors; $800M invoice advances since launch Expanding
Spend & Expense mix shift (advertising category)Card growth, interchange dynamicsAd giant policy shifted volume to ACH; ~4 points S&E revenue impact; lower gross interchange growth Specific headwind
Macro/trade policy watchCautious stance prior Monitoring fiscal/trade policy changes; assumes macro/B2B spend consistent in H2 Watchful, unchanged assumptions

Management Commentary

  • CEO: “We are capitalizing on this compelling market opportunity to be the de facto intelligent financial operations platform for SMBs.”
  • CFO: “Core revenue increased 16% year-over-year and non-GAAP operating income increased 42% year-over-year… non-GAAP operating margin of 17%… free cash flow margin was 20%.”
  • CEO on suppliers: “Large suppliers, on average, received 5,000 check and ACH transactions per quarter through our platform… we’re investing in enhanced automation such as straight through processing and advanced ACH.”

Q&A Highlights

  • Monetization/take rate: QoQ dip driven by TPV seasonality (ACH/check mix up ~6% QoQ) and FX losses; management expects monetization expansion in H2 FY25; IP monetization ~0.3 bps below expectation .
  • S&E advertising category mix: Largest online ad player shifted acceptance policies, moving volume from cards to ACH; ~4 points revenue impact in Q2 for S&E; headwind incorporated into forward estimates .
  • Advanced ACH & supplier acceptance: Advanced ACH in beta with strong supplier interest; calendar-year rollout expected to impact financials as adoption ramps .
  • Core revenue cadence: Q3 guide slightly lower growth (13–15%) with Q4 higher; midpoint reaffirmed for second half; benefit from higher-for-longer rates on float/profitability .
  • TPV per customer and macro: TPV per customer -1% YoY; SMB sentiment optimistic but spend actions “flattish”; sector pockets: strength in real estate/IT, compression in construction-related .

Estimates Context

  • S&P Global consensus data for EPS and revenue was unavailable due to access limitations at time of analysis; therefore exact beat/miss vs Wall Street is not presented. Management stated a “strong beat on the bottom line and overall total revenue” in Q2 .
  • Given forward commentary (H2 monetization expansion; advanced ACH rollout; raised FY25 profitability guidance), estimates for H2 are likely to adjust upward on margins, with revenue trajectories maintained/tightened per guidance .

Key Takeaways for Investors

  • Monetization inflection is the near-term stock catalyst: management expects H2 expansion as FX volatility abates and ad valorem initiatives (invoice financing, Pay By Card, real-time payments) scale .
  • Supplier automation (advanced ACH, STP) is a structural lever to deepen network adoption and mix toward higher-value payment types; watch timeline and initial KPIs from beta-to-launch .
  • Accounting and Embedded channels are delivering tangible adoption (accounting net adds +38% YoY; 200+ embedded S&E customers); sustained momentum here supports durable core growth .
  • S&E headwind from advertising category policy changes (~4 pts Q2 impact) is incorporated in guidance; diversification and larger-customer focus aim to stabilize card spend growth .
  • FY25 profitability raised materially (non-GAAP EPS $1.87–$1.97, op income $207.5–$222.5M); higher-for-longer rates support float and margins, despite Q3 sequential revenue dip .
  • Capital actions (new $1.4B 0% converts, note repurchases, buybacks) reduce dilution and extend runway; non-GAAP diluted share count down ~4% YoY from repurchases .
  • Near-term trading: focus on Q3 monetization trajectory, FX impacts, card mix evolution, and qualitative proof points from supplier solution rollouts; medium-term thesis hinges on expanding AI-enabled financial operations platform across SMBs, accountants, suppliers, and embedded partners .