Summary
Bill.com closed the fiscal 2022 second quarter with revenue of $156.5 million, up 190% from $54.0 million in the prior-year quarter. Net loss was $80.4 million, or $0.78 per diluted share, compared with $17.2 million in the same quarter a year earlier. The loss widened as the company absorbed the operating costs of Divvy and Invoice2go, both of which are included in the reported figures. Operating loss was $76.1 million, compared with a loss of $14.2 million in the second quarter of fiscal 2021. Gross profit rose to $122.1 million from $40.1 million, and gross margin expanded to 78.0% from 74.1%.
Revenue mix shifted toward transaction fees. Subscription fees were $49.2 million, up 85% year-over-year. Transaction fees reached $106.3 million, up 313%, which management tied to adoption of new product offerings and a shift toward variable-priced products. Total core revenue, consisting of subscription and transaction fees, was $155.5 million, up 197%. Organic core revenue, which excludes Divvy and Invoice2go, was $97.0 million, up 85%, while the two acquisitions contributed $58.5 million. On a non-GAAP basis, gross margin was 85.3%, and non-GAAP income from operations was $3.4 million, compared with a non-GAAP loss from operations of $1.6 million a year earlier. Non-GAAP net loss was $220,000, or $0.00 per share. Those figures strip out stock-based compensation, amortization of intangible assets, acquisition and integration-related expenses, depreciation, payroll taxes tied to stock compensation, and related items.
Bill.com served 135,000 customers at quarter end. Divvy added 15,500 spending businesses and Invoice2go added 223,000 subscribers. Total payment volume on the Bill.com platform was $56.4 billion, up 62%, and the platform processed 9.8 million transactions, up 35%. Divvy separately processed $1.9 billion in card payment volume and 5.3 million card transactions. Deferred revenue was $30.5 million, up 466.8% from $5.4 million a year earlier. Remaining performance obligations totaled $155.0 million, up 4.2% from $148.7 million.
The cash picture is less comfortable. Operating cash flow was negative $12.9 million for the quarter, worse than negative $9.2 million a year earlier, and negative $34.1 million for the six months ended December 31, 2021. Free cash flow, a non-GAAP measure, was negative $16.1 million for the quarter. Capital expenditures fell to $1.1 million from $7.7 million, while capitalization of internal-use software costs, which sit in a separate line of the free cash flow reconciliation, rose. The operating loss reflects big spending increases: research and development expense reached $52.0 million, sales and marketing $80.8 million, and general and administrative expense $65.4 million, driven largely by headcount added through the Divvy and Invoice2go acquisitions. Cash and cash equivalents stood at $1.7 billion as of December 31, 2021, helped by roughly $1.9 billion in combined net proceeds from a public offering and the 2027 notes issued in September 2021.
Guidance covers the fiscal third quarter ending March 31, 2022 and the full fiscal year ending June 30, 2022. For the fiscal third quarter, the company guided to a non-GAAP net loss of $16.9 million to $15.9 million, or $0.16 to $0.15 per share. For the full fiscal year, it guided to a non-GAAP net loss of $47.2 million to $44.2 million, or $0.46 to $0.43 per share. Bill.com also gave a revenue outlook for both periods but did not reconcile the non-GAAP net loss guidance to the most comparable GAAP measures, saying the excluded items cannot be reasonably calculated or predicted at this time. Risks hanging over the story include the COVID-19 pandemic and its variants, a history of operating losses, the large sums of customer funds transferred daily, fraud and credit loss exposure, and the work of integrating Divvy and Invoice2go. One condition for early conversion of the 2025 notes was also triggered, giving holders the right to convert during the quarter after December 31, 2021.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2022 | Q1 FY2022 | QoQ | Q2 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $156.5M | $116.4M | +34.4% | $54.0M | +189.5% |
| Gross profit | $122.1M | $86.6M | +41.0% | $40.1M | +204.7% |
| Gross margin | 78.0% | 74.4% | +3.7 pp | 74.2% | +3.9 pp |
| Research & development | $52.0M | $42.5M | +22.3% | $20.5M | +153.6% |
| Sales & marketing | $80.8M | $62.3M | +29.7% | $14.2M | +470.2% |
| General & administrative | $65.4M | $57.9M | +12.9% | $19.6M | +233.9% |
| Total operating expenses | $198.2M | $162.7M | +21.8% | $54.2M | +265.3% |
| Operating income (loss) | -$76.1M | -$76.2M | +0.1% | -$14.2M | -436.8% |
| Operating margin | -48.6% | -65.4% | +16.8 pp | -26.2% | -22.4 pp |
| Net income (loss) | -$80.4M | -$75.7M | -6.3% | -$17.2M | -368.2% |
| Net margin | -51.4% | -65.0% | +13.6 pp | -31.8% | -19.6 pp |
Risks
BILL reported a net loss of $80.4M in FY2022 Q2 versus $17.2M in FY2021 Q2, with the loss widening, and a year-to-date net loss of $154.7M versus $30.1M in the prior-year period. It had an accumulated deficit of $373.2M as of December 31, 2021 and may not achieve or sustain profitability.
BILL is responsible for verifying customer identities and monitoring transactions for fraud, and may bear losses from stolen identities, account takeover, employee fraud, and unauthorized card use. General and administrative expenses included a $7.2M increase in provision for card and fraud losses in FY2022 Q2 and a $12.5M increase year to date.
For a substantial majority of Divvy card extensions of credit, BILL purchases participation interests in receivables from issuing banks and bears the entire credit risk if spending businesses fail to pay. Its risk models may not accurately predict creditworthiness, and non-payment or underperformance could harm results.
Divvy relies on warehouse facilities and purchase arrangements with financing partners to fund receivables purchases. If those partners terminate, interrupt, or fail to renew funding on acceptable terms, BILL may have to use corporate cash, which it says it has limited ability to do.
Accounting firm partners, more than 5,500 as of December 31, 2021, accounted for approximately 50% of total customers and 44% of revenue in FY2022 Q2. Dependence on these partners and on financial institution partners means loss or delay in those relationships could weaken growth.
BILL's platform is integrated into Intuit QuickBooks, and the agreement with Intuit terminates on June 26, 2023 unless earlier terminated. Intuit has integrated another third-party bill pay solution and could develop or acquire a competing solution, harming growth prospects.
Divvy cards are issued through Cross River Bank and WEX Bank, and the bank-nonbank partnership structure faces true lender and valid when made challenges. Adverse rulings or enforcement actions could require BILL to find alternative bank relationships or modify business practices.
BILL had $1.15B principal of 2025 Notes and $575.0M principal of 2027 Notes outstanding as of December 31, 2021. The conversion condition for the 2025 Notes was triggered as of December 31, 2021, and the net carrying amount was classified as a current liability, which could affect liquidity if holders convert.
BILL identified a material weakness in its internal control over financial reporting. If remediation is not effective, its ability to produce timely and accurate financial statements or comply with laws and regulations could be impaired.
Revenue rose 189.5% in FY2022 Q2 and 174.1% year to date, but BILL expects its growth rate to decline as its scale increases. Rapid growth in payment volume and headcount may strain operations and make future results difficult to predict.
BILL offers rewards to Divvy spending businesses based on card usage, and redemptions create significant costs. Sales and marketing expenses included a $21.5M increase in rewards expense in FY2022 Q2 and a $37.2M increase year to date, and competitive pressure may require higher rewards.
BILL holds customer funds in trust in liquid investments, but those assets are subject to market, interest rate, foreign exchange, liquidity, and general economic risks. As a licensed money transmitter in required U.S. states, it must hold eligible liquid assets equal to at least 100% of aggregate customer balances.
The Invoice2go acquisition closed September 1, 2021 for $674.3M, bringing international operations in Australia and subscribers in approximately 150 countries. Integration, international compliance, and bringing Invoice2go controls up to public company standards may require substantial time and resources.
The market for financial back-office solutions is competitive, and risk factors cite new platforms or services that are easier to use or more advanced, especially related to artificial intelligence-based services. Competitors such as Intuit and financial institutions may bundle competing solutions or develop their own.
The COVID-19 pandemic and new variants continue to create uncertainty; BILL says customers, spending businesses, and subscribers may be negatively impacted by government restrictions, closures, and unemployment, and may go out of business, request discounts, extend payment terms, or discontinue services.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Gross Margin
Invoice2go subscribers
Remaining performance obligations (Total)
Divvy Spending Businesses
Divvy Card Payment Volume
Summary, forecast, risks and KPIs are extracted from BILL Holdings, Inc.'s SEC filings for Q2 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.