Billcom Holdings Inc (BILL) reported a solid start to fiscal 2025 (Q1) with notable strength in core revenue, profitability expansion, and cash flow generation. Total revenue reached $358.5 million, up 18% year over year, while core revenue (subscription and transaction fees) grew 19% YoY to $315.0 million, underscoring the momentum in BILL’s integrated platform. Management highlighted disciplined investment to accelerate growth while delivering durable profitability, as evidenced by non-GAAP operating income of $67.0 million (19% non-GAAP margin) and free cash flow of $81.5 million (approx. 23% free-cash-flow margin) in the quarter. BILL also stressed favorable unit economics with TPV growth, increased adoption across larger SMBs, and expanding Spend & Expense usage. Combined with a strong balance sheet and abundant cash flow, BILL is executing on its strategy to extend the financial-operations category for SMBs while funding investments to widen its competitive moat.
Management reiterated that the large US SMB opportunity remains highly addressable, with only a minority of SMBs having automated AP/AR today. The company cited a scalable platform with integrated BILL AP/AR, Spend & Expense, and working-capital solutions, plus an expanding ecosystem (accountants, financial institutions, and partners like Xero) as critical pillars for long-term growth. BILL’s actions in Q1—real-time funding, BILL Divvy AP card availability, international payments expansion, and ongoing AI-enabled product enhancements (Sync Assist)—are positioned to lift monetization and drive adoption across higher-spend cohorts. The company also signaled that its $45 million incremental investment in 2025 is back-loaded in cadence, with hiring and execution intensifying later in the year, supporting a multi-year growth trajectory toward the operative target of durable scalable growth.
Key Performance Indicators
Revenue
358.45M
QoQ: 4.30% | YoY:17.53%
Gross Profit
293.75M
81.95% margin
QoQ: 11.37% | YoY:17.99%
Operating Income
21.98M
QoQ: 200.66% | YoY:138.79%
Net Income
8.91M
QoQ: 17.34% | YoY:131.99%
EPS
0.08
QoQ: 17.90% | YoY:132.42%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $358.45 million in Q1 2025, up 18% YoY; Core revenue $315.0 million, up 19% YoY; Float revenue $44.0 million.
Integrated platform (ex-FI channel) revenue: $295.0 million, up 18% YoY. BILL AP/AR revenue: $162.0 million, up 13% YoY; TPV growth: 12% YoY; TPV per customer: +2% YoY. Spend & Expense revenue: $133.0 million, up 25% YoY; card spend growth: +26% YoY; Spend & Expense interchanges: 260 bps; Rewards: 47% of Spend & Expense revenue.
Embedded and other solutions (FI channel, Invoice2go, etc.): $20.0 million, up 28% YoY.
Non-GAAP gross profit: $307.0 million; non-GAAP gross margin: 86% (above target low-80s due to float revenue/mix).
- Revenue: $358.45 million in Q1 2025, up 18% YoY; Core revenue $315.0 million, up 19% YoY; Float revenue $44.0 million.
- Integrated platform (ex-FI channel) revenue: $295.0 million, up 18% YoY. BILL AP/AR revenue: $162.0 million, up 13% YoY; TPV growth: 12% YoY; TPV per customer: +2% YoY. Spend & Expense revenue: $133.0 million, up 25% YoY; card spend growth: +26% YoY; Spend & Expense interchanges: 260 bps; Rewards: 47% of Spend & Expense revenue.
- Embedded and other solutions (FI channel, Invoice2go, etc.): $20.0 million, up 28% YoY.
- Non-GAAP gross profit: $307.0 million; non-GAAP gross margin: 86% (above target low-80s due to float revenue/mix).
- Non-GAAP operating income: $67.0 million; non-GAAP operating margin: 19%; operating income margin (GAAP): 6.13%.
- Net income (GAAP): $8.9 million; net margin: 2.49%; EPS (GAAP): $0.084; EPS (diluted): $0.083; Non-GAAP diluted EPS: $0.63.
- Operating cash flow: $88.6 million; free cash flow: $81.5 million (free cash flow margin not explicitly stated).
- Balance sheet: cash and equivalents $853.5 million; total cash and short-term investments $1.473 billion; total assets $9.045 billion; total liabilities $5.032 billion; total stockholders’ equity $4.013 billion; net debt of about $58 million (net cash).
- Share repurchase: $200 million repurchased under the $300 million program.
- Guidance (2Q and FY25): modest sequential operating expense growth; Q2 revenue guidance $355.5–$360.5 million; core revenue guidance $316–$321 million; float revenue $39.5 million. FY25 revenue guidance $1.439–$1.464 billion; core revenue $1.291–$1.316 billion; float revenue ~$148 million; non-GAAP net income $181.5–$201.5 million; non-GAAP diluted EPS $1.65–$1.83; SBC <20% of revenue; share count ~110 million.
- Commentary on macro and market: management noted continued macro uncertainty but remains confident in a multi-year growth path; investments are back-loaded and aimed at accelerating core revenue and margin expansion over the long term.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
358.45M
17.53%
4.30%
Gross Profit
293.75M
17.99%
11.37%
Operating Income
21.98M
138.79%
200.66%
Net Income
8.91M
131.99%
17.34%
EPS
0.08
132.42%
17.90%
Key Financial Ratios
currentRatio
1.53
grossProfitMargin
82%
operatingProfitMargin
6.13%
netProfitMargin
2.49%
returnOnAssets
0.1%
returnOnEquity
0.22%
debtEquityRatio
0.2
operatingCashFlowPerShare
$0.84
freeCashFlowPerShare
$0.77
priceToBookRatio
1.39
priceEarningsRatio
156.4
Net Income vs. Revenue
Expense Breakdown
Management Commentary
- Strategy and growth focus: Rene Lacerte emphasized BILL’s integrated platform and market opportunity, noting the company’s progress expanding depth and breadth of the platform and go-to-market actions to serve SMBs. He highlighted the 40% increase in new Spend & Expense spending from SMBs acquired in the last two quarters as evidence of go-to-market momentum. Quote: “In Q1, we delivered very strong financial results, innovated at a rapid pace, and executed well across the company.” (Rene Lacerte)
- Product and platform innovations: BILL rolled out real-time funding options, the BILL Divvy card for AP payments, expanded international payments to 2 dozen countries, and introduced AI-driven Sync Assist to simplify syncing with accounting systems. Quote: “We recently enabled real-time funding options… and BILL Divvy card available to accounts payable customers… an upgrade path for our BILL AP customers to the full Spend & Expense platform.” (Rene Lacerte)
- Monetization and margin dynamics: John Rettig outlined that take rate was largely stable sequentially, with expected modest uptick in the second half as TPV volume seasonality improves and monetization per transaction rises. He also noted that transaction yields were up; e.g., transaction monetization rose despite flat take rate. Quote: “We beat core revenue by $7.3 million in the first quarter,” (John Rettig), and “transaction monetization is increasing” (John Rettig).
- Investment cadence and profitability: The management called out incremental investments of roughly $45 million front-loaded in 2025, with cadences expected to be back-loaded and hiring accelerating into Q3/Q4, intending to support multi-year growth while expanding margins. They also highlighted a significant share repurchase, signaling confidence in growth potential. Quote: “We repurchased $200 million of shares under the $300 million share repurchase program announced in August.” (Rene Lacerte)
- Market context and SMB health: The executives stressed SMB resilience and the addressable greenfield opportunity, with SMBs underserved by technology and only a minority having fully automated AP/AR today. They cited industry stats such as only 5% of larger SMBs fully automate AP/AR, indicating substantial growth runway. (Rene Lacerte)
- Outlook and guidance: Management reaffirmed a path toward durable revenue growth and margin expansion, signaling continued investments in product, go-to-market, and ecosystem partnerships, and a long runway toward accelerating growth beyond FY25. (John Rettig, Rene Lacerte)
In Q1, we delivered very strong financial results, innovated at a rapid pace, and executed well across the company.
— Rene Lacerte
We beat core revenue by $7.3 million in the first quarter.
— John Rettig
Forward Guidance
- Near-term outlook (Q2 2025): Revenue guidance of $355.5–$360.5 million; core revenue guidance of $316–$321 million (about 15–17% YoY growth); float revenue guidance of about $39.5 million. Non-GAAP operating income guidance of $47.5–$52.5 million; non-GAAP net income guidance of $48–$52 million; non-GAAP diluted EPS guidance of $0.44–$0.48 based on ~109 million diluted shares.
- Full-year outlook (FY2025): Total revenue guidance of $1.439–$1.464 billion; core revenue guidance of $1.291–$1.316 billion (15–17% YoY growth); float revenue ~ $148 million (assuming ~400 bps FX yield and Fed funds rate). Non-GAAP net income guidance of $181.5–$201.5 million; non-GAAP diluted EPS guidance of $1.65–$1.83 with ~110 million diluted shares. SBC to be less than 20% of total revenue.
- Commentary on cadence and assumptions: Management expects a back-loaded spend profile on incremental investments for fiscal 2025, with hiring accelerating later in the year. The company also highlighted international growth, invoice financing utilization (nearly 200k loans funded since launch at quarter-end), and continued embedded solutions expansion (Xero beta) as key growth drivers.
- Investor watchpoints: Monitor core revenue growth trajectory versus macro sentiment, take-rate dynamics vs. TPV seasonality, the pace of investments versus the realized impact on revenue per user, and the adoption rate of Spend & Expense and invoice financing across SMBs and accounting partners.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
BILL Focus
81.95%
6.13%
0.22%
156.40%
DDOG
79.30%
-1.63%
0.85%
345.33%
ASAN
89.70%
-38.40%
-19.90%
-13.25%
GTLB
88.90%
-31.10%
-9.62%
-37.97%
TEAM
81.70%
-2.69%
-12.00%
-83.56%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Billcom is positioned for a multi-year growth trajectory driven by a large, underpenetrated SMB market and a differentiated, open, integrated platform. The Q1 results demonstrate solid revenue growth, improving margins, and robust cash generation, supported by strategic investments in product expansion, international payments, and a broadened ecosystem. The company’s balance sheet strength, sizable free cash flow, and disciplined capital allocation (share buybacks) reduce near-term risk and provide runway for continued investment in growth initiatives that should compound over time. Key catalysts include higher monetization from Spend & Expense, deeper AP/AR adoption among mid-market SMBs, expansion of invoice financing, and greater embedded solutions adoption with accounting partners. Investors should monitor the cadence of investments (back-loaded vs. front-loaded), the pace of TPV growth and take-rate stabilization into H2 2025, the integration milestones with Xero and other partners, and the progression of international payments adoption as indicators of sustainable growth beyond FY25. Overall, BILL’s long-term thesis remains compelling given its scale, platform differentiation, and substantial greenfield opportunities, though near-term results will continue to hinge on macro visibility and the effectiveness of the investments in translating into faster top-line growth and margin expansion.
Key Investment Factors
Growth Potential
- Large, underpenetrated SMB market with ~4% of US SMBs using BILL AP/AR; opportunity to expand across Spend & Expense, Divvy integration, and embedded solutions. - International expansion (local transfers to >2 dozen countries) and real-time funding broaden TAM and improve monetization across cross-border payments. - Invoice financing and working capital offerings show strong early adoption (nearly 200k loans funded since launch; 70% repeat borrowers), enabling higher take rates and stickiness. - AI-driven enhancements (Sync Assist) and ecosystem partnerships (Xero beta, accounting firms) bolster retention, onboarding, and cross-sell potential. - Management’s focus on the Rule of 40 via growing revenue and expanding margins supports long-term upside and operating leverage.
Profitability Risk
- Macro uncertainty may damp SMB spending and investment pace, creating near-term variability in billings, monetization, and customer growth. - Credit risk in invoice financing and working capital offerings could erode margins if not adequately controlled; the company emphasizes targeted credit and automation but remains exposed to economic cycles. - Execution risk from large investments in hiring, product development, and go-to-market transformation; returns depend on successful acceleration in core revenue and monetization. - Competitive intensity in SMB back-office software, payments, and embedded fintech could pressure pricing and adoption. - FX and regulatory risk from international payments expansion and cross-border settlement.
Financial Position
- Strong balance sheet with cash and equivalents of about $853.5M and total cash+short-term investments around $1.47B; net debt is negative (net cash) of roughly $58M, indicating liquidity and balance-sheet strength.
- Healthy liquidity supports ongoing stock repurchases ($200M in Q1) and significant investments in growth initiatives while maintaining cash generation (operating cash flow ~$88.6M and free cash flow ~$81.5M in Q1).
- Gross margins high (non-GAAP gross margin ~86%), with cash-generative, scalable software + fintech mix; operating leverage evident as non-GAAP operating margin expands to 19% in Q1 from prior-year levels. - Leverage metrics (debt-to-capitalization ~16.5%; debt to total capitalization ~16.5%) remain modest, supporting flexibility. - Revenue mix is diversified across BILL AP/AR, Spend & Expense, and embedded solutions, enabling cross-sell opportunities and resilience through product cycle variations.
SWOT Analysis
Strengths
Integrated, modular platform combining BILL AP/AR, Spend & Expense, and working-capital solutions.
Large and expanding ecosystem with 8,500+ accounting firms and 7 million network members.
Significant cash generation and strong balance sheet enabling buybacks and investments.
AI-enabled features (Sync Assist) and open-architecture platform enabling rapid onboarding and integration with major accounting software (e.g., Xero).
Demonstrated scale with $80B annual TPV and >475k SMBs automated.
Proven go-to-market execution with higher spend among newer cohorts and upmarket acceleration.
Weaknesses
Near-term profit growth depends on continued monetization improvements and larger-share uptake which may fluctuate with macro conditions.
Significant reliance on float revenue and revenue mix that can be sensitive to interest-rate and liquidity moves.
Longer-path to sustainable 20%+ growth may require sustained execution across multiple product and go-to-market levers.
Opportunities
Expand cross-sell between AP/AR, Spend & Expense, and invoice financing to lift monetization and customer lifetime value.
Scale international payments and real-time funding to reduce FX volatility and improve efficiency for SMBs.
Expand embedded/payments capabilities with strategic accounting partners (e.g., Xero) to accelerate adoption across SMBs.
Enhance supplier onboarding and straight-through processing to improve efficiency and take rate.
Threats
Macro headwinds impacting SMB investment and payables volumes.
Competitive intensity in SMB back-office and fintech ecosystems.
Credit risk in invoice financing and working-capital products despite risk controls.
Regulatory risk in cross-border payments and data privacy that could impact product roadmap and costs.