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Share Name | Share Symbol | Market | Type |
---|---|---|---|
BILL Holdings Inc | NYSE:BILL | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.50 | 1.03% | 48.90 | 49.53 | 48.00 | 48.55 | 1,911,220 | 00:45:09 |
BILL (NYSE: BILL), a leader in financial automation software for small and midsize businesses (SMBs), today announced financial results for the first fiscal quarter ended September 30, 2023.
“We delivered strong first quarter results as we executed on our strategy to be the essential financial operations platform for SMBs,” said René Lacerte, BILL CEO and Founder. “During the quarter, we also launched our integrated financial operations platform that empowers SMBs to manage their accounts payable, accounts receivable, and spend & expense all in one place with intelligent workflow and consolidated insights. This is a big step towards our objective to become the essential software for SMBs to operate and thrive.”
“In a challenging macro environment, we delivered strong financial results in Q1. Total revenue increased 33% year-over-year, and non-GAAP profitability expanded year-over-year,” said John Rettig, BILL President and CFO. “We are carefully navigating the current environment while continuing to invest behind the long term opportunity to serve millions of SMBs.”
Financial Highlights for the First Quarter of Fiscal 2024:
Business Highlights and Recent Developments
Financial Outlook
We are providing the following guidance for the fiscal second quarter ending December 31, 2023 and the full fiscal year ending June 30, 2024.
Q2 FY24
Guidance
FY24
Guidance
Total revenue (millions)
$293 - $303
$1,205 - $1,245
Year-over-year total revenue growth
13% - 17%
14% - 18%
Non-GAAP net income (millions)
$42 - $52
$195 - $235
Non-GAAP net income per diluted share
$0.35 - $0.44
$1.64 - $1.97
These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
BILL has not provided a reconciliation of non-GAAP net loss or non-GAAP net loss per share guidance measures to the most directly comparable GAAP measures because certain items excluded from GAAP cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort.
1 Businesses using more than one of our solutions are included separately in the total for each solution utilized.
Conference Call and Webcast Information
In conjunction with this announcement, BILL will host a conference call for investors at 1:30 p.m. PT (4:30 p.m. ET) today to discuss fiscal first quarter 2024 results and our outlook for the fiscal second quarter ending December 31, 2023 and the fiscal year ending June 30, 2024. The live webcast and a replay of the webcast will be available at the Investor Relations section of BILL’s website: https://investor.bill.com/events-and-presentations/default.aspx.
About BILL
BILL (NYSE: BILL) is a leading financial operations platform for small and midsize businesses (SMBs). As a champion of SMBs, we are automating the future of finance so businesses can thrive. Our integrated platform helps businesses to more efficiently control their payables, receivables and spend and expense management. Hundreds of thousands of businesses rely on BILL’s proprietary member network of millions to pay or get paid faster. Headquartered in San Jose, California, BILL is a trusted partner of leading U.S. financial institutions, accounting firms, and accounting software providers. For more information, visit bill.com.
Note on Forward-Looking Statements
This press release and the accompanying conference call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements other than statements of historical facts, and statements in the future tense. Forward-looking statements are based on our expectations as of the date of this press release and are subject to a number of risks, uncertainties and assumptions, many of which involve factors or circumstances that are beyond our control. These statements include, but are not limited to, statements regarding our expectations of future performance, including guidance for our total revenue, non-GAAP net income, and non-GAAP net income per share for the fiscal second quarter ending December 31, 2023 and full fiscal year ending June 30, 2024, our expectations for the growth of demand on our platform and the expansion of our customers’ utilization of our services. These risks and uncertainties include, but are not limited to macroeconomic factors, including changes in interest rates, inflation and volatile market environments, as well as fluctuations in foreign exchange rates, our history of operating losses, our recent rapid growth, the large sums of customer funds that we transfer daily, the risk of loss, errors and fraudulent activity, credit risk related to our BILL Divvy Corporate Cards, our ability to attract new customers and convert trial customers into paying customers, our ability to develop new products and services, increased competition or new entrants in the marketplace, potential impacts of acquisitions and investments, including our ability to integrate acquired businesses, incorporate their technology effectively and implement appropriate internal controls at such businesses our relationships with accounting firms and financial institutions, and the global impacts of the conflicts in Ukraine and in Israel, and other risks detailed in the registration statements and periodic reports we file with the SEC, including our quarterly and annual reports, which may be obtained on the Investor Relations section of BILL’s website (https://investor.bill.com/financials/sec-filings/default.aspx) and on the SEC website at www.sec.gov. You should not rely on these forward-looking statements, as actual results may differ materially from those contemplated by these forward-looking statements as a result of such risks and uncertainties. All forward-looking statements in this press release are based on information available to us as of the date hereof. We assume no obligation to update or revise the forward-looking statements contained in this press release or the accompanying conference call because of new information, future events, or otherwise.
Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain, and the conference call will contain, non-GAAP financial measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP net income and non-GAAP net income per share, basic and diluted. The non-GAAP financial information is presented for supplemental informational purposes only and is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP.
Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. Items excluded from non-GAAP gross profit and non-GAAP gross margin include amortization of certain intangible assets, stock-based compensation and related payroll taxes, and depreciation expense. Items excluded from non-GAAP operating expenses include amortization of certain intangible assets, stock-based compensation and related payroll taxes, depreciation expense, and acquisition and integration-related expenses. Items excluded from non-GAAP net income and non-GAAP net income per share include stock-based compensation expense and related payroll taxes, depreciation expense, amortization of certain intangible assets, acquisition and integration-related expenses, amortization of debt issuance costs, accretion of debt premium and income tax effect associated with acquisitions and non-GAAP adjustments. It is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry.
We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.
We adjust the following items from one or more of our non-GAAP financial measures:
Stock-based compensation and related payroll taxes charged to cost of revenue and operating expenses. We exclude stock-based compensation, which is a non-cash expense, and related payroll taxes from certain of our non-GAAP financial measures because we believe that excluding these items provide meaningful supplemental information regarding operational performance. In particular, companies calculate stock-based compensation expenses using a variety of valuation methodologies and subjective assumptions while the related payroll taxes are dependent on the price of our common stock and other factors that are beyond our control and do not correlate to the operation of our business.
Depreciation expense. We exclude depreciation expense from certain of our non-GAAP financial measures because we believe that excluding this non-cash expense provides meaningful supplemental information regarding operational performance. Depreciation expense does not include amortization of capitalized internal-use software costs paid in cash.
Amortization of intangible assets. We exclude amortization of acquired intangible assets from certain of our non-GAAP financial measures because we believe that excluding this non-cash expense provides meaningful supplemental information regarding our operational performance.
Acquisition and integration-related expenses. We exclude acquisition and integration-related expenses from certain of our non-GAAP financial measures because these costs would have not otherwise been incurred in the normal course of our business operations. In addition, we believe that acquisition and integration-related expenses are non-recurring charges unique to a specific acquisition. Although we may engage in future acquisitions, such acquisitions and the associated acquisition and integration-related expenses are considered unique and not comparable to other acquisitions.
Amortization of debt issuance costs, net of accretion premium. We exclude amortization of debt issuance costs associated with our issuance of our convertible senior notes and credit arrangement and accretion of debt premium associated with our credit agreement from certain of our non-GAAP financial measures because we believe that excluding this non-cash interest expense provides meaningful supplemental information regarding our operational performance.
Income tax effect associated with acquisitions. We exclude the income tax effect associated with acquisitions from certain of our non-GAAP financial measures because we believe that excluding this provides meaningful supplemental information regarding our operational performance.
There are material limitations associated with the use of non-GAAP financial measures since they exclude significant expenses and income that are required by GAAP to be recorded in our financial statements. Please see the reconciliation tables at the end of this release for the reconciliation of GAAP and non-GAAP results.
Free Cash Flow
Free cash flow is a non-GAAP measure that we calculate as net cash provided by (used in) operating activities, adjusted by purchases of property and equipment and capitalization of internal-use software costs. We believe that free cash flow is an important liquidity measure of the cash that is available, after capital expenditures, for operational expenses and investment in our business. Free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash. One limitation of free cash flow is that it does not reflect our future contractual commitments. Additionally, free cash flow does not represent the total increase or decrease in our cash balance for a given period. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth.
BILL HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
September 30,
2023
June 30,
2023
ASSETS
Current assets:
Cash and cash equivalents
$
1,527,182
$
1,617,151
Short-term investments
1,119,456
1,043,110
Accounts receivable, net
24,100
28,233
Acquired card receivables, net
552,827
458,650
Prepaid expenses and other current assets
195,027
170,111
Funds held for customers
3,263,528
3,355,909
Total current assets
6,682,120
6,673,164
Non-current assets:
Operating lease right-of-use assets, net
66,600
68,988
Property and equipment, net
85,294
81,564
Intangible assets, net
341,206
361,427
Goodwill
2,396,509
2,396,509
Other assets
48,654
54,366
Total assets
$
9,620,383
$
9,636,018
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
6,491
$
8,519
Accrued compensation and benefits
23,030
32,901
Deferred revenue
19,489
26,328
Other accruals and current liabilities
252,932
194,733
Borrowings from credit facilities, net
135,033
135,046
Customer fund deposits
3,263,528
3,355,909
Total current liabilities
3,700,503
3,753,436
Non-current liabilities:
Deferred revenue
4,800
410
Operating lease liabilities
69,969
72,477
Convertible senior notes, net
1,706,494
1,704,782
Other long-term liabilities
20,504
18,944
Total liabilities
5,502,270
5,550,049
Commitments and contingencies
Stockholders' equity:
Common stock
2
2
Additional paid-in capital
5,022,021
4,946,623
Accumulated other comprehensive loss
(3,813
)
(4,488
)
Accumulated deficit
(900,097
)
(856,168
)
Total stockholders' equity
4,118,113
4,085,969
Total liabilities and stockholders' equity
$
9,620,383
$
9,636,018
BILL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share amounts)
Three Months Ended
September 30,
2023
2022
Revenue
Subscription and transaction fees (2)
$
265,142
$
214,611
Interest on funds held for customers
39,843
15,313
Total revenue
304,985
229,924
Cost of revenue
Service costs (2)
44,904
34,820
Depreciation and amortization of intangible assets (1)
11,122
10,287
Total cost of revenue
56,026
45,107
Gross profit
248,959
184,817
Operating expenses
Research and development (2)
89,065
75,121
Sales and marketing (2)
118,398
118,633
General and administrative (2)
85,326
66,738
Depreciation and amortization of intangible assets (1)
12,817
12,019
Total operating expenses
305,606
272,511
Loss from operations
(56,647
)
(87,694
)
Other income, net
29,308
5,947
Loss before provision for (benefit from) income taxes
(27,339
)
(81,747
)
Provision for (benefit from) income taxes
522
(107
)
Net loss
$
(27,861
)
$
(81,640
)
Net loss per share attributable to common stockholders, basic and diluted
$
(0.26
)
$
(0.78
)
Weighted-average number of common shares used to compute net loss per share attributable to common stockholders, basic and diluted
106,817
105,086
____________________
(1)
Depreciation expense does not include amortization of capitalized internal-use software costs paid in cash.
(2)
Includes stock-based compensation charged to revenue and expenses as follows (in thousands):
Three Months Ended
September 30,
2023
2022
Revenue - subscription and transaction fees
$
370
$
—
Cost of revenue
2,547
2,001
Research and development
27,365
20,851
Sales and marketing
13,885
29,258
General and administrative
20,980
20,510
Total stock-based compensation (3)
$
65,147
$
72,620
(3)
Consists of acquisition related equity awards (Acquisition Related Awards), including equity awards assumed and retention equity awards granted to certain employees of acquired companies in connection with acquisitions, and non-acquisition related equity awards (Non-Acquisition Related Awards), which include all other equity awards granted to existing employees and non-employees in the ordinary course of business. The following table presents stock-based compensation recorded for the periods presented and as a percentage of total revenue:
Three Months Ended
September 30,
As a % of total revenue
Three Months Ended
September 30,
2023
2022
2023
2022
Acquisition Related Awards
$
5,066
$
28,953
1
%
13
%
Non-Acquisition Related Awards
60,081
43,667
20
%
19
%
Total stock-based compensation
$
65,147
$
72,620
21
%
32
%
BILL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Three Months Ended
September 30,
2023
2022
Cash flows from operating activities:
Net loss
$
(27,861
)
$
(81,640
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation
65,147
72,620
Amortization of intangible assets
20,221
19,769
Depreciation of property and equipment
3,718
2,546
Amortization of capitalized internal-use software costs
1,352
924
Amortization of debt issuance costs, net of accretion of debt premium
1,761
1,712
Amortization of premium (accretion of discount) on investments in marketable debt securities
(13,093
)
(2,215
)
Provision for losses on acquired card receivables and other financial assets
12,401
6,611
Non-cash operating lease expense
2,388
2,342
Deferred income taxes
(42
)
(299
)
Other
(562
)
930
Changes in assets and liabilities:
Accounts receivable
3,707
(4,774
)
Prepaid expenses and other current assets
(4,704
)
(1,339
)
Other assets
(1,074
)
(1,138
)
Accounts payable
(2,508
)
1,511
Other accruals and current liabilities
(2,286
)
4,247
Operating lease liabilities
(2,423
)
(2,386
)
Other long-term liabilities
(32
)
34
Deferred revenue
(2,449
)
(1,303
)
Net cash provided by operating activities
53,661
18,152
Cash flows from investing activities:
Purchases of corporate and customer fund short-term investments
(399,588
)
(859,911
)
Proceeds from maturities of corporate and customer fund short-term investments
757,169
838,099
Purchases of loans held for investment
(32,756
)
—
Principal repayments of loans held for investment
25,330
—
Acquired card receivables, net
(42,333
)
(107,943
)
Purchases of property and equipment
(403
)
(1,376
)
Capitalization of internal-use software costs
(5,645
)
(4,764
)
Proceeds from beneficial interest
—
2,080
Other
—
500
Net cash provided by (used in) investing activities
301,774
(133,315
)
Cash flows from financing activities:
Customer fund deposits liability and other
(91,190
)
(25,472
)
Prepaid card deposits
(13,979
)
10,923
Repurchase of common stock
(12,061
)
—
Proceeds from exercise of stock options
2,946
3,901
Proceeds from issuance of common stock under the employee stock purchase plan
7,846
8,494
Contingent consideration payout
(5,471
)
—
Net cash used in financing activities
(111,909
)
(2,154
)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents
(180
)
(277
)
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents
243,346
(117,594
)
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period
4,224,840
3,542,715
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period
$
4,468,186
$
3,425,121
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows above:
Cash and cash equivalents
$
1,527,182
$
1,608,966
Restricted cash included in other current assets
98,313
71,629
Restricted cash included in other assets
7,088
6,724
Restricted cash and restricted cash equivalents included in funds held for customers
2,835,603
1,737,802
Total cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period
$
4,468,186
$
3,425,121
BILL HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited, in thousands except percentages and per share amounts)
Three Months Ended
September 30,
2023
2022
Reconciliation of gross profit:
GAAP gross profit
$
248,959
$
184,817
Add:
Depreciation and amortization of intangible assets (1)
11,122
10,287
Stock-based compensation and related payroll taxes charged to cost of revenue
2,628
2,066
Non-GAAP gross profit
$
262,709
$
197,170
GAAP gross margin
81.6
%
80.4
%
Non-GAAP gross margin
86.1
%
85.8
%
____________________(1)
Consists of depreciation of property and equipment and amortization of developed technology, excluding amortization of capitalized internal-use software costs paid in cash.
Three Months Ended
September 30,
2023
2022
Reconciliation of operating expenses:
GAAP research and development expenses
$
89,065
$
75,121
Less - stock-based compensation and related payroll taxes
(27,887
)
(21,357
)
Non-GAAP research and development expenses
$
61,178
$
53,764
GAAP sales and marketing expenses
$
118,398
$
118,633
Less - stock-based compensation and related payroll taxes
(14,082
)
(30,192
)
Non-GAAP sales and marketing expenses
$
104,316
$
88,441
GAAP general and administrative expenses
$
85,326
$
66,738
Less:
Stock-based compensation and related payroll taxes
(21,387
)
(20,918
)
Acquisition and integration-related expenses
(97
)
—
Non-GAAP general and administrative expenses
$
63,842
$
45,820
Three Months Ended
September 30,
2023
2022
Reconciliation of loss from operations:
GAAP loss from operations
$
(56,647
)
$
(87,694
)
Add:
Depreciation and amortization of intangible assets (1)
23,939
22,306
Stock-based compensation and related payroll taxes charged to cost of revenue and operating expenses
65,984
74,533
Acquisition and integration-related expenses
97
—
Non-GAAP income from operations
$
33,373
$
9,145
____________________
(1)
Excludes amortization of capitalized internal-use software costs paid in cash.
Three Months Ended
September 30,
2023
2022
Reconciliation of net loss:
GAAP net loss
$
(27,861
)
$
(81,640
)
Add (less):
Depreciation and amortization of intangible assets (1)
23,939
22,306
Stock-based compensation and related payroll taxes charged to cost of revenue and operating expenses
65,984
74,533
Acquisition and integration-related expenses
97
—
Amortization of debt issuance costs, net of accretion of debt premium
1,761
1,712
Income tax effect associated with acquisitions
(42
)
—
Non-GAAP net income
$
63,878
$
16,911
____________________
(1)
Excludes amortization of capitalized internal-use software costs paid in cash.
Three Months Ended
September 30,
2023
2022
Reconciliation of net loss per share attributable to common stockholders, basic and diluted
GAAP net loss per share attributable to common stockholders, basic and diluted
$
(0.26
)
$
(0.78
)
Add:
Depreciation and amortization of intangible assets (1)
0.22
0.21
Stock-based compensation and related payroll taxes charged to cost of revenue and operating expenses
0.62
0.71
Acquisition and integration-related expenses
0.00
—
Amortization of debt issuance costs, net of accretion of debt premium
0.02
0.02
Income tax effect associated with acquisitions
0.00
—
Non-GAAP net income per share attributable to common stockholders, basic
$
0.60
$
0.16
Non-GAAP net income per share attributable to common stockholders, diluted
$
0.54
$
0.14
____________________
(1)
Excludes amortization of capitalized internal-use software costs paid in cash.
Three Months Ended
September 30,
2023
2022
Shares used to compute GAAP and non-GAAP net income (loss) per share attributable to common stockholders, basic
106,817
105,086
Shares used to compute GAAP and non-GAAP net income (loss) per share attributable to common stockholders, diluted
117,948
117,191
BILL HOLDINGS, INC.
FREE CASH FLOW
(Unaudited, in thousands)
Three Months Ended
September 30,
2023
2022
Net cash provided by operating activities
$
53,661
$
18,152
Purchases of property and equipment
(403
)
(1,376
)
Capitalization of internal-use software costs
(5,645
)
(4,764
)
Free cash flow
$
47,613
$
12,012
BILL HOLDINGS, INC.
REMAINING PERFORMANCE OBLIGATIONS
(Unaudited, in thousands)
September 30,
2023
June 30,
2023
Remaining performance obligations to be recognized as revenue:
Within 2 years
$
101,596
$
101,177
Thereafter
23,518
29,960
Total
$
125,114
$
131,137
View source version on businesswire.com: https://www.businesswire.com/news/home/20231102041787/en/
IR Contact: Karen Sansot ksansot@hq.bill.com
Press Contact: John Welton john.welton@hq.bill.com
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