EPS of $0.00 increased by 138.5% from previous year
Gross margin of 78.4%
Net income of 31.81M
""There is a significant growth runway ahead for BILL, and we continue to position ourselves to be the essential financial operations platform for SMBs."" - Rene Lacerte
Billcom Holdings Inc (BILL) delivered a solid QQ3 2024 performance, underpinned by both top-line growth and ongoing improvements in profitability and operating leverage. Total revenue of $323 million rose 19% year over year, with core revenue (subscription and transaction revenue) up 17% to $281 million. The company achieved non-GAAP operating income of $59 million, rising 68% YoY and delivering an 18% non-GAAP operating margin, aided by one-time gross-margin benefits of approximately $6 million. Gross margin stood at 87%, reflecting a software-led fintech business with a strong profitability profile for a growth-oriented SaaS/fintech vendor. Float revenue contributed $42 million, up 26% YoY, highlighting BILL’s unique cash-management income generated by its payment infrastructure and licenses. Net income on a non-GAAP basis reached $68.6 million, with a 21% non-GAAP net income margin, marking a meaningful expansion in profitability even as SMB spend remains challenged by macro headwinds.
Segment highlights underscore a diversified monetization engine: Spend & Expense revenue grew 29% YoY with 1,800 net new spending businesses, and Spend & Expense card volume reached $4.4 billion (YoY +29%). BILL stand-alone payment volume was $67 billion, up 9% YoY, while stand-alone transaction revenue rose 20% YoY. BILL stand-alone subscription revenue (ex-FI) rose 9% YoY, though overall stand-alone subscription revenue declined 2% YoY due to FI channel mix changes. Net new BILL stand-alone customers reached 4,100 in Q3 (direct and accounting channels), with FI channel enrollments high but quarterly churn in that channel impacting quarter-over-quarter figures. The company generated $66.8 million in net cash provided by operating activities and delivered $60.0 million in free cash flow, supporting a strong balance sheet with cash and cash equivalents of $1.105 billion and total liquidity of roughly $2.0 billion including short-term investments.
Management framed the external environment as stabilizing but still challenging: a spend-neutrality dynamic across BILL’s customer base, with no clear expansion in spend yet. The roadmap remains anchored on expanding the embedded, integrated platform (AP/AR, Spend & Expense, cash flow insights via Finmark) and extending global payment capabilities (12 rails, 8 modalities, 130+ countries) while accelerating ecosystem expansion through partnerships (Airwallex for local clearing, Xero embedding onboarding workflows). Management also signaled ongoing discussions with Bank of America regarding its FI go-to-market strategy, emphasizing a three-pronged near/medium/long-term plan to broaden SMB reach via direct, accounting, and FI channels. Full-year guidance was raised, with 2024 total revenue now guided to $1.267–$1.277 billion and non-GAAP net income of $227–$235 million, supported by expected float revenue of $165 million and a blended non-GAAP tax rate of 20% for non-GAAP results.
Key takeaways for investors: BILL’s growth is broadening beyond core payments into a more integrated financial operations platform with an expanding network and an AI-enabled data layer. The monetization cadence is improving, aided by ad valorem offerings and international expansion, while management emphasizes discipline on costs and capital deployment. The near-term hurdle remains macro-driven SMB spend volatility, but the improving take rates, steady gross margins, and cash-flow generation position BILL to execute toward its longer-term trajectory of becoming the de facto SMB financial operations platform.
Key Performance Indicators
Revenue
323.03M
QoQ: 1.42% | YoY:40.49%
Gross Profit
253.16M
78.37% margin
QoQ: -2.67% | YoY:36.98%
Operating Income
-25.52M
QoQ: 62.29% | YoY:70.90%
Net Income
31.81M
QoQ: 178.69% | YoY:138.96%
EPS
0.30
QoQ: 178.95% | YoY:138.46%
Revenue Trend
Margin Analysis
Key Insights
Revenue and profitability – QQ3 2024 total revenue of $323.0 million (+19% YoY; +1.4% QoQ). Core revenue (subscription + transaction) was $281.0 million, up 17% YoY. Non-GAAP gross profit was $281.0 million, up 19% YoY, with non-GAAP gross margin of 87% (including ~$6 million of one-time gross-margin benefits). Non-GAAP operating income was $59.0 million, up 68% YoY, with a non-GAAP operating margin of 18% (versus ~13% prior-year period). Float revenue rose 26% YoY to $42.0 million. Non-GAAP net income was $68.6 million, a 42% YoY increase, with a 21% non-GAAP net income margin.
Monetization and take rate – BILL stand-alone monetization expanded sequentially; total BILL stand-alone payment volume was $67.0 billion, up 9% YoY. BILL stand-alone transaction revenue grew 20% YoY; stand-alone subscription revenue (ex-FI) grew 9% YoY, while overall stand-alone subscription revenue declined 2% YoY due to FI channel mix shifts. Management noted a non-recurring uplift from migrating volume between processing providers that contributed to the quarter’s monetization uplift; excluding this one-time effect, monetization still expanded. In Q4, BILL monetization is expected to be at or above Q1 levels, aligning with seasonality and ongoing product improvements.
Growth by segment – Spend & Expense revenue grew 29% YoY with 1,800 net new spending businesses added. Card payment volume in Spend & Expense was $4.4 billion, up 29% YoY. For BILL stand-alone, net new direct/accounting channel customers were 4,100 in Q3 (excluding Intuit Simple Bill Pay roll-off of ~600 customers). The FI channel enrolled customers remained active but declined QoQ due to periodic removal of inactive customers.
Cash flow and liquidity – Operating cash flow: $66.8 million; free cash flow: $62.96 million. Net cash used in investing activities: $(617.98) million; net cash used in financing activities: $(801.22) million; cash at end of period: $1.105 billion. Total debt stood at $1.2117 billion, with net debt about $1.0577 billion. These dynamics reflect active debt management and sizable near-term cash deployment in repurchases and financing activity.
Balance sheet health – Total assets of $9.1226 billion, total liabilities of $5.0635 billion, and total stockholders’ equity of $4.0587 billion. The company carries long-term debt of $1.2113 billion and a substantial cash position, supporting ongoing investment in growth initiatives and share repurchases. Cash and cash equivalents plus short-term investments total approximately $2.0 billion in liquidity.
Financial Highlights
- Revenue and profitability – QQ3 2024 total revenue of $323.0 million (+19% YoY; +1.4% QoQ). Core revenue (subscription + transaction) was $281.0 million, up 17% YoY. Non-GAAP gross profit was $281.0 million, up 19% YoY, with non-GAAP gross margin of 87% (including ~$6 million of one-time gross-margin benefits). Non-GAAP operating income was $59.0 million, up 68% YoY, with a non-GAAP operating margin of 18% (versus ~13% prior-year period). Float revenue rose 26% YoY to $42.0 million. Non-GAAP net income was $68.6 million, a 42% YoY increase, with a 21% non-GAAP net income margin.
- Monetization and take rate – BILL stand-alone monetization expanded sequentially; total BILL stand-alone payment volume was $67.0 billion, up 9% YoY. BILL stand-alone transaction revenue grew 20% YoY; stand-alone subscription revenue (ex-FI) grew 9% YoY, while overall stand-alone subscription revenue declined 2% YoY due to FI channel mix shifts. Management noted a non-recurring uplift from migrating volume between processing providers that contributed to the quarter’s monetization uplift; excluding this one-time effect, monetization still expanded. In Q4, BILL monetization is expected to be at or above Q1 levels, aligning with seasonality and ongoing product improvements.
- Growth by segment – Spend & Expense revenue grew 29% YoY with 1,800 net new spending businesses added. Card payment volume in Spend & Expense was $4.4 billion, up 29% YoY. For BILL stand-alone, net new direct/accounting channel customers were 4,100 in Q3 (excluding Intuit Simple Bill Pay roll-off of ~600 customers). The FI channel enrolled customers remained active but declined QoQ due to periodic removal of inactive customers.
- Cash flow and liquidity – Operating cash flow: $66.8 million; free cash flow: $62.96 million. Net cash used in investing activities: $(617.98) million; net cash used in financing activities: $(801.22) million; cash at end of period: $1.105 billion. Total debt stood at $1.2117 billion, with net debt about $1.0577 billion. These dynamics reflect active debt management and sizable near-term cash deployment in repurchases and financing activity.
- Balance sheet health – Total assets of $9.1226 billion, total liabilities of $5.0635 billion, and total stockholders’ equity of $4.0587 billion. The company carries long-term debt of $1.2113 billion and a substantial cash position, supporting ongoing investment in growth initiatives and share repurchases. Cash and cash equivalents plus short-term investments total approximately $2.0 billion in liquidity.
- Outlook and guidance – Q4 2024 revenue guidance of $320–$330 million (+8% to +11% YoY); float revenue of about $40 million; non-GAAP gross margin around 84%; non-GAAP operating income of $40–$50 million; non-GAAP net income of about $46.4–$54.4 million; non-GAAP diluted EPS in the range of $0.41–$0.49 (based on ~112 million diluted shares). For FY2024, revenue guidance raised to $1.267–$1.277 billion (+20–21% YoY) with float revenue around $165 million; non-GAAP net income of $227–$235 million and non-GAAP EPS of $1.96–$2.03 (based on ~115.5 million diluted shares). Stock-based compensation is projected at ~$255 million; capex about $23 million. Management noted macro crosswinds could impact SMB spending, but sees a stabilizing spend backdrop and a continued opportunity to expand the ecosystem via partners and embedded solutions.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
323.03M
40.49%
1.42%
Gross Profit
253.16M
36.98%
-2.67%
Operating Income
-25.52M
70.90%
62.29%
Net Income
31.81M
138.96%
178.69%
EPS
0.30
138.46%
178.95%
Key Financial Ratios
currentRatio
1.63
grossProfitMargin
78.4%
operatingProfitMargin
-7.9%
netProfitMargin
9.85%
returnOnAssets
0.35%
returnOnEquity
0.78%
debtEquityRatio
0.3
operatingCashFlowPerShare
$0.63
freeCashFlowPerShare
$0.6
priceToBookRatio
1.68
priceEarningsRatio
53.45
Net Income vs. Revenue
Expense Breakdown
Management Commentary
- Strategy and ecosystem expansion: Rene Lacerte stated, “There is a significant growth runway ahead for BILL, and we continue to position ourselves to be the essential financial operations platform for SMBs.” He highlighted the AI engine’s scale and data assets (over 300 million transactions and 0.5 billion documents) and the network reach (over 5.8 million members) as foundational competitive advantages. He also noted progress on embedding BILL’s onboarding workflows with Xero to expand the partner ecosystem and reach US-based customers. “Xero…embed our onboarding workflows and a suite of ad valorem offerings into their platform,” reflecting the embedded strategy’s momentum.
- Monetization and platform acceleration: John Rettig emphasized monetization acceleration, noting that excluding a onetime AR volume shift, monetization expanded and that Q4 monetization is expected to be at or above Q1 levels. He explained that “the onetime uptick” from migrating volume between processing providers contributed to the quarter’s revenue mix and that “we expect our Q4 monetization to be at or above Q1,” indicating discipline in monetization efforts and a path to more consistent take-rate expansion.
- Macro environment and go-to-market focus: Rene Lacerte acknowledged a stabilizing yet still cautious B2B spend environment, highlighting a “spend-neutrality” dynamic across BILL’s customer base and the company’s strategy to focus on higher-spend customers and larger wallets (Spend & Expense). He also discussed the bank relationship with Bank of America as a long-term, multi-pronged go-to-market strategy involving direct, accounting, and FI channels, with the long-term FI contribution around 2% of total revenue today and a growing ecosystem via strategic partnerships.
- Embedded and API-first growth: Rene noted the embed strategy’s resonance with software partners, pointing to increasing inbound interest from software firms and the importance of workflows, risk practices, and a broad network. He highlighted that “software and payments are converging,” and BILL is “leading the charge,” pointing to a scalable embed framework with partners like Xero and Airwallex for local clearing capabilities.
"There is a significant growth runway ahead for BILL, and we continue to position ourselves to be the essential financial operations platform for SMBs."
— Rene Lacerte
"A fresh approach to beauty deserves a fresh approach to business financial operations. Our company has been scaling fast. In less than two years, our business basically tripled. Being able to scale with all the tools, solutions and services that BILL provides has been phenomenal."
— Victor Leu, CFO of Tower 28
Forward Guidance
- Near-term outlook: BILL expects Q4 2024 total revenue of $320–$330 million (8–11% YoY growth) with float revenue around $40 million. Non-GAAP gross margin is projected at ~84% as payment mix evolves and as onetime gross-margin benefits from Q3 normalize. Non-GAAP operating income is expected to be $40–$50 million, with non-GAAP net income of $46.4–$54.4 million and non-GAAP diluted EPS of $0.41–$0.49 on ~112 million diluted shares. These targets imply a modest deceleration in TPV growth and a drift toward lower near-term monetization leverage, consistent with a backdrop of macro headwinds but with ongoing improvements in platform value proposition.
- Full-year view: FY2024 revenue guidance raised to $1.267–$1.277 billion (+20–21% YoY). Float revenue is guided at $165 million. Non-GAAP net income is planned at $227–$235 million and non-GAAP EPS of $1.96–$2.03 (assuming 20% blended non-GAAP tax rate for non-GAAP results). Stock-based compensation is expected to be ~$255 million and capex around $23 million. The guidance assumes some easing in macro pressures and stable monetization long-term as the ecosystem expands and the embedded model matures.
- Outlook risks and factors to monitor: The company highlighted ongoing macro crosswinds (inflation and interest rates) that could impact SMB spend, the potential impact of regulatory changes on cross-border payments, and the timing/structure of Bank of America’s arrangements. The success of the embedded and ecosystem strategy, including Airwallex local-clearing capabilities and Xero embedding, will be key drivers of monetization expansion and cross-border adoption. Investors should monitor: (1) trajectory of TPV per customer and overall spend growth across BILL platform segments, (2) take-rate trajectory on ad valorem and newer payment modalities, (3) progression of FI/channel mix, and (4) cadence of monetization improvements from the integrated platform (AP/AR, cash flow insights, mobile app adoption).
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
BILL Focus
78.37%
-7.90%
0.78%
53.45%
DDOG
81.10%
-0.77%
1.25%
327.61%
ASAN
90.40%
-38.10%
-18.60%
-16.58%
GTLB
89.90%
-26.90%
-52.20%
-5.89%
TEAM
81.70%
1.52%
1.12%
984.58%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Billcom Holdings continues to execute against a multi-year plan to become the central financial operations platform for SMBs. QQ3 2024 demonstrated meaningful revenue growth (total revenue +19% YoY) and meaningful improvements in non-GAAP profitability (non-GAAP operating income +68% YoY, 18% margin) despite macro headwinds. The monetization mix is evolving: ad valorem and cross-border expansion (Airwallex, local clearing) and new embedded partnerships (Xero) are expected to support higher take rates and broader wallet share over time. The company’s strong gross margin (87%) and robust FCF generation underpin a healthy balance sheet, providing flexibility to fund continued R&D, product expansion, and ecosystem investments while pursuing opportunistic capital deployment.
Key catalysts include: (1) continued monetization expansion from newer ad valorem products and cross-border capabilities, (2) acceleration of the embedded-partner model to broaden SMB reach, (3) mobile app adoption driving engagement and supplier participation, (4) potential improvement in FI channel contribution as legacy products sunset and partnerships mature, and (5) the ramp of cash-flow forecasting and FP&A insights driving higher-value SMB usage. However, upside is contingent on a stabilization or improvement in SMB spend, and execution risk around the Bank of America relationship and the broader FI/partner environment remains a factor. Overall, BILL trades at a high multiple (approx. P/S ~21x) reflecting its growth trajectory and platform-scale advantages; continued execution and monetization leverage will be essential to justify multiple expansion versus near-term volatility. Investors should monitor: (a) TPV growth and per-customer spend signals, (b) take-rate trajectory across ad valorem and core payment products, (c) progression of embedded partnerships and cross-border enablement, (d) regulatory and competitive dynamics in the fintech payments space, and (e) currency- and rate-driven float revenue sensitivity to interest rate cycles.
Key Investment Factors
Growth Potential
Massive SMB market opportunity remains; BILL’s integrated platform, AI-enabled insights, and embedded ecosystem position the company to capture a substantial share of SMB financial operations. Key growth drivers include: (a) expansion of ad valorem and cross-border payments with local clearing (Airwallex) and faster settlement, (b) deeper penetration of the Spend & Expense stack and associated wallet/share-of-wallet gains, (c) embedding BILL’s platform into software ecosystems (e.g., Xero) to reach a broader SMB audience, (d) expansion of BILL’s AR/AP mobile app to increase engagement and supplier adoption, and (e) continued monetization improvements from platform consolidation and data-driven pricing.
Profitability Risk
Macro sensitivity to SMB spend remains a core risk; take-rate normalization may be uneven quarter-to-quarter. Execution risk around embedding partnerships and the rate of ecosystem adoption could influence monetization. Regulatory and currency-related risks in cross-border payments, potential changes to interchange, and competitive pressure from established players in SMB payments. The FI channel’s cadence is sensitive to partner churn and the sunsetting of legacy products (e.g., Simple Bill Pay). High stock-based compensation and converting floating revenue exposure to earnings can also pose volatility. These factors could affect near-term profitability and valuation multiples.
Financial Position
Strong liquidity with $1.106B cash and cash equivalents and $2.0B+ liquidity when including short-term investments. Net debt of ~($1.06)B supported by robust cash flow generation (Q3 operating cash flow $66.8M; free cash flow $62.96M). Balance sheet remains solid with total assets of $9.12B and stockholders’ equity of $4.06B. The balance sheet supports continued investments in product development, partnerships, and potential opportunistic share repurchases. Leverage is moderate (long-term debt ~$1.21B) for a growth-focused software/fintech business, providing financial flexibility for future capacity expansion or M&A in the ecosystem space.
SWOT Analysis
Strengths
Large, growing SMB market with global payment opportunities and a two-sided network (>5.8 million members) that supports >1/3 of BILL’s stand-alone core revenue
Integrated platform combining AP/AR, Spend & Expense, and a broad set of payment rails (12 rails, 8 modalities, 130+ countries)
AI-enabled data assets (300M+ transactions, 0.5B documents) driving product value and forecasting capabilities (Finmark integration)
Strong gross margins (non-GAAP 87% in Q3) and meaningful free cash flow generation (FCF ~$63M in Q3)
Growing embedded ecosystem with partner momentum (Xero embedding onboarding workflows; Airwallex for local clearing)
Weaknesses
Macro-driven SMB spend sensitivity remains a near-term challenge for monetization expansion
FI channel variability and churn can impact quarter-to-quarter metrics
Take-rate normalization risk if macro conditions suppress spending or mix shifts away from higher-margin products
Regulatory and compliance complexity across international payments could constrain near-term growth if not managed effectively
Opportunities
Expanded cross-border payments with local-clearing capabilities to reduce settlement times and expand supplier reach
Broader adoption of embedded finance in software ecosystems beyond Xero, including new accounting and financial software partners
Enhanced cash-flow forecasting and FP&A capabilities via Finmark to win more SMB customers with deeper wallet share
Mobile AP/AR app adoption driving engagement and supplier-enabled transactions (e.g., Instant Transfer, invoice financing)
Threats
Rising macro headwinds (inflation, higher interest rates) could dampen SMB spend and monetization velocity
Interchange/regulatory changes (potential near-term impact on take rates) create execution uncertainty
Competitive pressure from established fintechs and ERP/payments ecosystems targeting SMB back-office automation