Q3 2024 Earnings Summary
Reported on Jan 8, 2025 (After Market Close)
Pre-Earnings Price$63.30Last close (May 2, 2024)
Post-Earnings Price$68.05Open (May 3, 2024)
Price Change
$4.75(+7.50%)
- Strong Customer Growth and Execution: BILL reported an acceleration in net new customer adds, with 1,800 net new spending businesses added in their Spend & Expense solution and 4,100 net new customers in BILL stand-alone during the quarter, indicating effective execution of go-to-market strategies and alignment of teams to focus on customer needs.
- Stabilization in B2B Spend Environment: The company observed signs of stabilization in the B2B spend environment, noting spend-neutrality across their customer base, which suggests potential for future expansion as economic conditions improve.
- Improved Payment Monetization: BILL stand-alone payment monetization expanded sequentially, driven by increased adoption of newer ad valorem products and enhancements to payment experiences, which could lead to higher revenue generation per transaction.
- Slowing Core Revenue Growth and Deceleration in Guidance: Management guided for fiscal Q4 total revenue growth of 8% to 11% year-over-year , which is lower compared to previous quarters. Analysts noted that the Q4 core growth guide implies a deceleration compared to last quarter's guidance. This suggests that the company's growth rate is slowing down.
- Flat Transaction Volumes Without Spend Expansion: The company is experiencing spend-neutrality, with no significant expansion in transaction volumes. While the B2B spend environment shows signs of stabilization, SMBs continue to be pressured by high inflation and interest rates. The lack of transaction volume growth could limit revenue expansion.
- Take Rate Improvement Driven by One-Time Benefits: The increase in payment monetization in Q3 was partly due to a nonrecurring benefit from migrating volumes between processing providers. Excluding this one-time uptick, the improvement in monetization was less significant. Additionally, the virtual card program has not yet driven significant expansion, indicating potential challenges in driving future take rate improvements.