BILL Holdings, Inc. Q2 FY2025 earnings

BILL closed its fiscal 2025 second quarter with total revenue of $362.6 million, up 13.8% from the prior-year quarter. Core revenue, which consists of subscription and transaction fees, reached $319.6 million, up 16%. The platform served 481,300 businesses at December 31, 2024, and processed $84 billion in total payment volume, up 13%, and 30 million transactions, up 17%. Those volume metrics show that BILL is still adding customers and deepening usage. The mix still matters. Float revenue from interest on funds held for customers is sensitive to interest rates, and the company noted that rate reductions would lower that revenue.

Profitability improved sharply on a GAAP basis. Gross profit was $295.9 million, and gross margin was 81.6%, essentially flat versus the prior-year quarter. The operating loss narrowed to $21.7 million, and operating margin improved to -6.0%. Net income was $33.5 million, a swing to profit from a prior-year loss, while diluted EPS was -$0.06, an improvement from the prior-year quarter. On a non-GAAP basis, gross profit was $308.9 million with an 85.2% margin, operating income was $62.8 million, and net income was $62.9 million, or $0.56 per diluted share. The gap between GAAP and non-GAAP results remains wide, largely because of stock-based compensation, depreciation and amortization, and restructuring costs excluded from non-GAAP measures. For the first six months of fiscal 2025, revenue was $721.0 million, up 15.6% from the prior-year period, and net income was $42.5 million, a swing to profit from the prior-year period.

Cash generation was mixed. Operating cash flow was $78.7 million in the quarter, down 1.2% from the prior-year quarter, but year-to-date operating cash flow rose 25.5% to $167.3 million. Free cash flow, a non-GAAP measure, was $71.6 million in the quarter and $153.1 million year to date, above the $121.8 million reported in the prior-year period. Capital expenditures were $0.38 million in the quarter, up 8.5%, and deferred revenue, current portion only, was $21.8 million, up 25.7%. Remaining performance obligations were $78.0 million, down 29.1% from the prior-year quarter. BILL issued $1.4 billion of 0% convertible senior notes due 2030, repurchased roughly $134 million of its 2025 notes and roughly $451 million of its 2027 notes, and bought back about 2.3 million shares for approximately $200 million. It ended the quarter with $100.0 million remaining under its August 2024 share repurchase program.

Guidance points to a slower growth quarter but a solid full year. For the fiscal third quarter ending March 31, 2025, BILL expects total revenue growth of 9% to 11% year over year and core revenue growth of 13% to 15%. Non-GAAP operating income is guided to $38.0 million to $43.0 million, non-GAAP net income to $42.0 million to $46.0 million, and non-GAAP net income per diluted share to $0.35 to $0.38. For the full fiscal year ending June 30, 2025, total revenue growth is guided to 13% to 14% and core revenue growth to 16% to 17%. Full-year non-GAAP operating income is guided to $207.5 million to $222.5 million, non-GAAP net income to $216.0 million to $228.0 million, and non-GAAP net income per diluted share to $1.87 to $1.97. The outlook assumes a non-GAAP provision for income taxes of 20%.

Risks include macroeconomic pressure on SMBs, changes in interest rates, inflation, tariffs and trade barriers, foreign exchange fluctuations, credit losses on BILL Divvy Corporate Cards, fraud and loss of customer funds, competition, and dependence on accounting firm and financial institution partners. The company also has a history of operating losses, and its float revenue could fall if interest rates decline.