Summary
BILL reported total revenue of $414.7 million for its fiscal 2026 second quarter, up 14.4% from the prior-year quarter. Core revenue, which the company defines as subscription and transaction fees, reached $375.1 million, up 17%. Gross profit rose 11.9% to $331.1 million. Gross margin was 79.8%, down 1.8 percentage points from the prior-year quarter. The operating loss of $18.1 million narrowed 16.7% from the prior-year quarter. Net loss was $2.6 million, a swing to a loss from net income in the prior-year quarter. Diluted EPS was a loss of $0.03, and the loss narrowed 50.0% from the prior-year quarter. Non-GAAP operating income was $74.1 million, up 18%, and non-GAAP net income was $73.4 million, or $0.64 per diluted share.
BILL served 498,500 businesses at quarter end, up 4% from a year earlier. Total payment volume was $95.1 billion, up 13%, and transactions processed were 34.7 million, up 16%. For the six months ended December 31, 2025, total payment volume was $184.4 billion, up 12%, and transactions processed were 68.0 million, up 15%. The company repurchased about 2.5 million shares for roughly $133 million during the quarter. It also announced a reduction in force affecting about 6% of employees, and incurred $0.4 million of restructuring costs in the quarter. Operating cash flow was $105.3 million, up 33.8%. Capital expenditures were $1.5 million, up 290.6%. Deferred revenue was $20.9 million, down 4.1%. Remaining performance obligations were $65.0 million, down 16.7%.
Guidance for the fiscal third quarter ending March 31, 2026 calls for total revenue growth of 11% to 14% and core revenue growth of 14% to 17%. Non-GAAP operating income is projected at $62.5 million to $67.5 million, and non-GAAP net income at $60.5 million to $64.5 million, or $0.53 to $0.57 per diluted share. For the full fiscal year ending June 30, 2026, management guides to total revenue growth of 12% to 13% and core revenue growth of 15% to 16%. Full-year non-GAAP operating income is guided to $274.0 million to $286.5 million, non-GAAP net income to $267.5 million to $277.5 million, and non-GAAP net income per diluted share to $2.33 to $2.41. The non-GAAP net income outlook assumes a 20% non-GAAP provision for income taxes and excludes any effect from future share repurchases.
Cost pressure showed in the quarter. Gross margin fell because of higher amortization of capitalized internal-use software costs. Sales and marketing expenses rose on higher rewards expense tied to BILL Divvy Card volume, where rewards reached 52% of spend and expense interchange fees from 48% a year earlier. General and administrative expenses increased on consulting fees, including shareholder activism costs, and on higher fraud losses. Other income fell sharply because the prior-year period included a gain on debt extinguishment. Interest on funds held for customers declined as yields fell with interest rates.
Management flagged macroeconomic risks, including interest rates, inflation, tariffs, government budget cuts and shutdowns, and pressure on the small and midsize businesses it serves. Credit risk on card receivables and loans, fraud, competition, and the execution of its AI agent roadmap are additional risks. Liquidity remains substantial, with cash and short-term investments and undrawn capacity on its revolving credit facilities. The company settled the remaining balance of its 2025 Notes and has a share repurchase program in place.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $414.7M | $395.7M | +4.8% | $362.6M | +14.4% |
| Gross profit | $331.1M | $318.7M | +3.9% | $295.9M | +11.9% |
| Gross margin | 79.8% | 80.5% | -0.7 pp | 81.6% | -1.8 pp |
| Research & development | $82.8M | $80.3M | +3.1% | $84.8M | -2.3% |
| Sales & marketing | $155.4M | $149.2M | +4.2% | $132.5M | +17.3% |
| General & administrative | $79.5M | $76.9M | +3.4% | $71.1M | +11.8% |
| Total operating expenses | $349.2M | $339.5M | +2.9% | $317.7M | +9.9% |
| Operating income (loss) | -$18.1M | -$20.7M | +12.8% | -$21.7M | +16.7% |
| Operating margin | -4.4% | -5.2% | +0.9 pp | -6.0% | +1.6 pp |
| Net income (loss) | -$2.6M | -$3.0M | +12.6% | $33.5M | -107.7% |
| Net margin | -0.6% | -0.8% | +0.1 pp | 9.3% | -9.9 pp |
| Diluted EPS | -$0.03 | -$0.03 | ±$0.00 | -$0.06 | +$0.03 |
Risks
A significant portion of revenue comes from SMBs, which have fewer financial resources to weather an economic downturn; in recent periods SMBs tightened budgets and selected lower-cost payment methods, adversely impacting operating results. Recent reductions in U.S. federal government spending, including at the U.S. Small Business Administration, may also pressure the SMBs BILL serves.
Revenue from interest on funds held for customers decreased 8% during the three months ended December 31, 2025 and 11% during the six months ended December 31, 2025, primarily due to lower yield driven by a decrease in interest rates; this revenue was approximately 10% of total revenue in each current period.
BILL bears the entire credit risk on BILL Divvy Card receivables through participation interests it purchases from Issuing Banks; provision for expected credit losses increased $1.3 million during the three months ended December 31, 2025, driven by portfolio growth and an increase in delinquencies. Invoice financing and other credit offerings also expose BILL to losses if credit or risk models are insufficient.
BILL is responsible for verifying customer identities and monitoring transactions for fraud, and risk management efforts may not prevent fraudulent activity that could be augmented by AI; general and administrative expenses increased $2.0 million during the three months ended December 31, 2025 and $3.9 million during the six months ended December 31, 2025 from losses from fraud driven by higher transaction volume.
Extensions of credit through BILL Spend and Expense are originated through Issuing Banks Cross River Bank, WEX Bank, and Web Bank, and the legal structure faces true lender challenges and regulatory scrutiny; adverse orders or enforcement against an Issuing Bank could restrict BILL's ability to offer credit products or increase costs.
BILL recently launched AI agents for W-9 collection, transaction reconciliation, and invoice coding and plans additional agents; success depends on delivering them in a compelling and cost-effective way, and customers not using them could adversely affect business. Competitors' agentic and other AI offerings may also affect stock price and competitive position.
A reduction in force announced on October 15, 2025 impacted approximately 6% of employees, with restructuring costs of $9.3 million during the six months ended December 31, 2025; BILL intends to pursue additional actions to improve structural efficiencies, which may disrupt operations and affect employee retention.
Competitors including Intuit, which launched a native bill payment solution for QuickBooks, and Brex and Ramp, which introduced bill payment products, may challenge BILL's ability to win, retain, and expand QuickBooks customers and BILL Divvy Card spending businesses.
As of December 31, 2025, BILL had $123.5 million aggregate principal amount of 2027 Notes, $1.4 billion aggregate principal amount of 2030 Notes, and $330.0 million drawn under Revolving Credit Facilities; debt service obligations and potential cash settlement of conversions may adversely affect liquidity and financial condition.
General and administrative expenses increased $5.6 million during the three months ended December 31, 2025 and $8.1 million during the six months ended December 31, 2025, partly for consulting fees including fees related to shareholders' activism; activist stockholder actions could impact the trading value of BILL securities and harm the business.
Sales and marketing expenses increased $22.9 million during the three months ended December 31, 2025 and $45.8 million during the six months ended December 31, 2025, primarily from a $22.3 million and $41.5 million increase in rewards expense for BILL Divvy Cards; rewards expense rose to 52% of spend and expense interchange fees from 48%, pressuring margins.
MD&A states that macroeconomic and industry conditions, including government budget cuts, tariffs, and inflation or interest rate volatility, could negatively impact the estimated fair value of BILL's single reporting unit and require a quantitative goodwill impairment test and non-cash impairment charge.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Gross Margin
Businesses using our solutions
Core Revenue
Non-GAAP Operating Income
Summary, forecast, risks and KPIs are extracted from BILL Holdings, Inc.'s SEC filings for Q2 FY2026 (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.