EPS of $-0.06 increased by 83.8% from previous year
Gross margin of 81.6%
Net income of 33.55M
"AI has been deeply embedded since the beginning to eliminate data entry, accelerate payments, and easily match customers with suppliers within our network." - Rene Lacerte
Billcom Holdings reported QQ2 2025 total revenue of $362.6 million, up 14% year over year, with core revenue (subscription and transaction fees) of $320.0 million, up 16% year over year. Non-GAAP operating income rose to $63.0 million, yielding a 17% non-GAAP operating margin, and free cash flow margin reached 20% in the quarter, signaling strong operating leverage amid ongoing investments to scale SMB financial operations. The company’s AI-enabled platform continues to broaden its surface area: Bill APAR and spend & expense revenue grew 16% and 21% YoY respectively, with embedded solutions contributing $19.0 million in revenue. The network now comprises over 7 million members, with more than 480,000 SMBs using the platform and $85 billion in payment volume across 30 million transactions. Management highlighted continued monetization initiatives (e.g., embedded 1099s, new card experiences, and real-time payments) and multi-entity capabilities intended to deepen wallet share, particularly among mid-market customers. However, the quarter was not without headwinds: monetization was modestly affected by seasonality (TPV mix shifts toward checks/ACH) and currency volatility, leading to a slight dip in take rate from the prior quarter. For the second half of fiscal 2025, management reiterated guidance implying continued monetization expansion and a return to growth momentum, underscored by expanding card adoption, ACH enhancements, and a broader go-to-market focus with accounting firms and larger suppliers. The company remains confident in achieving its full-year targets, including core revenue growth of 16%–17% and non-GAAP net income per share of roughly $1.87–$1.97, supported by a robust balance sheet and strong cash flow generation.
Key Performance Indicators
Revenue
362.55M
QoQ: 1.14% | YoY:13.83%
Gross Profit
295.95M
81.63% margin
QoQ: 0.75% | YoY:13.77%
Operating Income
7.51M
QoQ: -65.84% | YoY:111.09%
Net Income
33.55M
QoQ: 276.44% | YoY:183.00%
EPS
-0.06
QoQ: -173.07% | YoY:83.79%
Revenue Trend
Margin Analysis
Key Insights
Total revenue: 362.6 million, up 14% YoY; QoQ: 1.14% increase in QQ2 2025 vs QQ1 2025.
Revenue and profitability snapshot (USD):
- Total revenue: 362.6 million, up 14% YoY; QoQ: 1.14% increase in QQ2 2025 vs QQ1 2025.
- Core revenue: 320.0 million, up 16% YoY (subscription + transaction fees).
- Gross profit: 295.9 million; gross margin 81.6%.
- Non-GAAP gross profit: 309.0 million; non-GAAP gross margin 85.0% (above the 80s target).
- Operating income: 7.0 million GAAP; margin 2.07%; Non-GAAP operating income: 63.0 million; margin 17.0% (up >300 bps YoY).
- Net income: 33.5 million; net income margin 9.25%; Non-GAAP net income: 63.0 million; non-GAAP net margin 17.0%; Non-GAAP diluted EPS: 0.56.
- ESP and shares: EPS (GAAP) -0.0616; Diluted -0.0600; weighted-average diluted shares 104.48 million.
- Cash flow and liquidity: Net cash provided by operating activities 78.7 million; free cash flow 85.8 million; cash at end of period 3.8207 billion; cash and cash equivalents 1.5663 billion; short-term investments 644.7 million; total cash & short-term investments 2.2109 billion.
- Balance sheet highlights: Total assets 9.6742 billion; total liabilities 5.8648 billion; total stockholders’ equity 3.8094 billion; net debt 208.999 million (total debt 1.7753 billion).
- Operating efficiency: DSO 151.6 days; CCC ~143.8 days; cash flow generation supports continued investment in growth initiatives.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
362.55M
13.83%
1.14%
Gross Profit
295.95M
13.77%
0.75%
Operating Income
7.51M
111.09%
-65.84%
Net Income
33.55M
183.00%
276.44%
EPS
-0.06
83.79%
-173.07%
Key Financial Ratios
currentRatio
1.66
grossProfitMargin
81.6%
operatingProfitMargin
2.07%
netProfitMargin
9.25%
returnOnAssets
0.35%
returnOnEquity
0.88%
debtEquityRatio
0.47
operatingCashFlowPerShare
$0.76
freeCashFlowPerShare
$0.83
priceToBookRatio
2.29
priceEarningsRatio
65.08
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key management themes and insights from the QQ2 2025 earnings call:
- Strategy and platform evolution: Rene Lacerte emphasized Bill.com’s AI-enabled platform and ecosystem approach as the driver of durable SMB growth, noting the expansion of the two-sided network and the focus on higher-value capabilities for mid-market customers (e.g., procure-to-pay, multi-entity tools) and embedded solutions.
- Monetization and margin expansion: John Rettig highlighted that Q2 monetization was slightly below expectations due to seasonal TPV mix (more checks/ACH) and FX volatility, but reiterated expectations for monetization expansion in the second half of fiscal 2025. He cited that newer products (invoice financing, real-time payments, pay-by-card) are driving ad valorem growth and longer-term upside.
- Product and network investments: The team stressed progress across four investment areas—payments & working capital, supplier solutions, accounting firms, and embedded finance. Notable advances include embedded 1099 functionality (5% of customers filed ~200k 1099s since January) and Embed 2.0 enhancements enabling larger-scale spend onboarding and card issuance (over 200 customers).
- Customer and ecosystem momentum: The company reported over 160,000 Bill APAR customers and more than 480,000 businesses on the platform, with 7 million network members. 4,500 net new Bill APAR customers added in the quarter; spend & expense revenue up 21% YoY on 23% card volume growth.
- Guidance and macro considerations: Management acknowledged macro and policy risks but continued to guide to 13–15% core revenue growth for Q3 and 16–17% for FY2025 core revenue, with float revenue (~$35m in Q3) and monetization expansion anticipated in H2. They emphasized resilience of SMBs and the importance of their AI-driven operating model in navigating a challenging macro backdrop.
AI has been deeply embedded since the beginning to eliminate data entry, accelerate payments, and easily match customers with suppliers within our network.
— Rene Lacerte
Bill.com Holdings, Inc. has been a life changer by supporting our rapid growth. We manage nearly 2,000 rehabilitation resorts and process about 2,000 payments a month. It replaces the manual process with digitized and automated workflows and provides robust document management and collaboration tools.
— Shona Hanscom
Forward Guidance
Outlook and assessment:
- Near-term guidance (fiscal Q3 2025): Core revenue expected 317.5–322.5 million (+13% to +15% YoY); total revenue 352.5–357.5 million. Float revenue ~35 million with FBO yield ~390 bps. Non-GAAP operating income 38–43 million; non-GAAP net income 42–46 million; non-GAAP diluted EPS 0.35–0.38, based on 119.5 million diluted shares.
- Full-year guidance (fiscal 2025): Core revenue guided at 1.297–1.312 billion (+16% to +17% YoY); total revenue 1.454–1.469 billion; float revenue ~157 million; non-GAAP net income 216–228 million; non-GAAP EPS 1.87–1.97 on 115.5 million diluted shares.
- Observations and achievability: The company remains confident in monetization expansion through product diversification (invoice financing, real-time payments, pay-by-card), deeper engagement with large suppliers and mid-market accounts, and enhanced lender/supplier partnerships. FX volatility was cited as a short-term drag on monetization in Q2; management expects the second half to show improved monetization as the company scales newer payment products and realizes efficiency gains from AI-enabled sales motion. The guidance does not reflect any material changes to the macro outlook, but the company notes continued macro uncertainty and SMB spending sensitivity.
- Key factors for investors to monitor: (1) progression of monetization in H2 2025, (2) uptake and profitability of embedded and supplier solutions (1099s, Embed 2.0, spend & expense enhancements), (3) growth in larger enterprise/mid-market segments (multi-entity capabilities, PO workflows), (4) currency exposure and float yields, (5) the pace of share repurchases and the impact on diluted share count.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
BILL Focus
81.63%
2.07%
0.88%
65.08%
DDOG
80.80%
1.96%
1.82%
249.35%
ASAN
88.80%
-42.90%
-24.70%
-11.58%
GTLB
88.30%
-22.50%
2.01%
157.93%
TEAM
82.70%
-4.47%
-3.13%
-415.87%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Baselined on quantitative results and qualitative commentary, Billcom Holdings is positioned as a high-growth fintech software platform with meaningful monetization upside from a broader mix of payment types and embedded finance solutions. The QQ2 2025 results show solid revenue growth, improving margins on a non-GAAP basis, and robust free cash flow generation, underscoring the scalability of the platform. The primary investment thesis rests on: (a) continued monetization expansion from newer ad valorem products (invoice financing, pay-by-card, real-time payments) and higher-card adoption; (b) expanding the two-sided ecosystem, with embedding more capabilities for accountants and large suppliers; (c) successful deployment of Embed 2.0 and spend & expense integrations enabling faster onboarding and higher card spend, driving network effects and wallet share; (d) sustained liquidity and buyback program supporting shareholder value while funding growth investments. Risks include FX volatility, macro headwinds affecting SMB spend, and execution risk as the company accelerates product rollouts. Overall, the stock could command a premium multiple given its growth trajectory and the scale of its SMB platform, but investors should monitor monetization stability in H2 2025 and the pace of float-driven profitability gains.
Key Investment Factors
Growth Potential
The growth runway centers on expanding the two-sided Bill.com network, broadening touchpoints with SMBs, and monetizing via higher-margin, information-rich products. Key catalysts include: (a) expanded procurement-to-pay and multi-entity capabilities for mid-market customers; (b) embedded finance enhancements (Embed 2.0, spend & expense integration) driving higher card spend and vendor adoption; (c) real-time/advanced ACH and straight-through processing for suppliers; (d) invoice financing scale with AI-enabled underwriting and liquidity access (over $800m in advances to date across more than 30k vendors); (e) international expansion to 30+ countries improves cross-border payments and growth opportunities. Management targets core revenue growth north of 16% for FY2025 and mid-teens for Q3, with a long-run path to higher velocity through monetization and operating leverage.
Profitability Risk
Key risks include: (1) FX volatility affecting monetization and take rate; (2) seasonality in payment types (TPV mix between check/ACH vs card) impacting revenue mix; (3) macro headwinds reducing SMB spend and payment volumes; (4) competition from fintech/payments incumbents and potential disintermediation; (5) integration and execution risk from accelerating product releases and ecosystem expansion; (6) dependence on network effects and onboarding of large suppliers and accounting partners.
Financial Position
Strong liquidity and balance sheet health underpin ongoing investments: cash and cash equivalents plus short-term investments totaling about $2.211b; net-debt approx. $209m; total debt around $1.775b; total assets ~$9.674b; stockholders’ equity ~$3.809b. Operating cash flow of $78.7m in Q2 and free cash flow of $85.8m demonstrate solid cash generation to support growth initiatives, share repurchases, and potential future acquisitions or partnerships.
SWOT Analysis
Strengths
Large and expanding SMB-centric platform with 7M network members and 480k+ businesses on the platform.
AI-enabled, end-to-end financial operations platform with strong network effects and two-sided network dynamics.
Diversified revenue mix across Bill APAR, spend & expense, embedded solutions, and invoice financing; strong cash generation (FCF margin ~20%).
Decisive investments in Embed 2.0, 1099 automation, straight-through processing for virtual cards, and multi-entity capabilities.
Robust balance sheet and liquidity enabling aggressive growth investments and share repurchases.
Weaknesses
GAAP profitability modest in QQ2 2025 (operating margin ~2.1% GAAP) with reliance on float revenue for margin expansion.
FX volatility and seasonality introduce near-term monetization volatility and take-rate pressure.
High valuation multiples relative to some peers, reflecting growth expectations; execution risk to maintain upgrade trajectory.
Opportunities
Expansion into larger enterprise/mid-market clients with multi-entity capabilities and PO workflows.
Wider adoption of embedded spend & expense integrations and real-time payments across customers and vendors.
Geographic expansion beyond the US to 30+ countries and deeper integration with banking and accounting firm ecosystems.
Device-wide AI-enabled underwriting and working capital solutions improving SMB access to liquidity.
Threats
Macro uncertainty and SMB sentiment affecting B2B spend and adoption of new payment modalities.
Competitive pressure from established fintechs and traditional ERP/payments providers.
Regulatory changes impacting fintech/fintech-adjacent payments and data-sharing rules.