Summary
Bill.com reported total revenue of $166.9 million for the fiscal third quarter ended March 31, 2022, up 179% year over year. Revenue for the first nine months of fiscal 2022 rose 176% to $441.7 million. The reported quarter carries the full weight of Divvy and Invoice2go, acquired on June 1, 2021 and September 1, 2021 for $2.3 billion and $674.3 million. Organic core revenue, a non-GAAP measure, was $102.1 million, up 74%, after excluding $63.4 million of revenue from the two acquisitions. Core revenue, also non-GAAP, grew 182% to $165.5 million, with transaction fees up 286% and subscription fees up 78%.
Gross profit was $129.6 million and gross margin climbed to 77.6% from 74.2%. On a non-GAAP basis, gross profit was $141.1 million and gross margin was 84.6%. The operating loss widened to $83.2 million, and operating margin dropped to -49.8%. The net loss widened to $86.7 million, or $0.84 per diluted share. Non-GAAP results look far better: the non-GAAP net loss was $8.7 million, or $0.08 per diluted share, and the non-GAAP loss from operations was $5.7 million. Stock-based compensation explains much of the gap. It totaled $52.8 million in the quarter, up from $10.7 million a year earlier.
Customer activity kept expanding. The company served 146,600 Bill.com customers at quarter end, up 27%, while Divvy added 18,100 spending businesses and Invoice2go counted 221,400 subscribers. Total payment volume reached $55.1 billion, up 57%, on 9.5 million transactions, up 32%. Divvy card volume contributed $2.1 billion. Cash flow turned positive in the quarter. Operating cash flow was $26.4 million versus negative $1.58 million a year earlier, and free cash flow was $22.8 million. Over the first nine months, operating cash flow was negative $7.6 million and free cash flow was negative $18.8 million. Capital expenditures fell 62.3% to $1.29 million. Remaining performance obligations were $148.0 million, roughly flat against $147.5 million, and deferred revenue was $33.6 million.
Guidance covers the fiscal fourth quarter and the full fiscal year ending June 30, 2022. Fourth-quarter revenue growth is expected at 133% to 134%, with a non-GAAP net loss between $14.9 million and $13.9 million, or $0.14 to $0.13 per diluted share. For the full fiscal year, revenue growth is guided to 162%, with a non-GAAP net loss between $35.9 million and $34.9 million, or $0.35 to $0.34 per diluted share. The company said it could not reconcile the non-GAAP guidance measures to the comparable GAAP measures without unreasonable effort. Management also flagged a long list of risks: a history of operating losses, the work of integrating Divvy and Invoice2go, COVID-19 and its variants, fraud and credit losses on customer funds, dependence on bank partners, competition, and macroeconomic pressure from inflation and interest rates.
Two balance sheet and personnel items deserve a mention. The conversion condition on the 2025 Notes was triggered because the stock traded above 130% of the conversion price for more than 20 consecutive trading days in the March quarter, so those notes were reclassified as a current liability. Mark Lenhard, Invoice2go's CEO and Bill.com's COO, will leave the company in September 2022. Cash and cash equivalents stood at $1.6 billion, with $1.1 billion of short-term investments, at March 31, 2022.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2022 | Q2 FY2022 | QoQ | Q3 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $166.9M | $156.5M | +6.7% | $59.7M | +179.4% |
| Gross profit | $129.6M | $122.1M | +6.1% | $44.3M | +192.5% |
| Gross margin | 77.6% | 78.0% | -0.4 pp | 74.2% | +3.5 pp |
| Research & development | $60.2M | $52.0M | +15.9% | $22.3M | +170.3% |
| Sales & marketing | $92.1M | $80.8M | +13.9% | $15.2M | +506.1% |
| General & administrative | $60.5M | $65.4M | -7.6% | $22.1M | +173.3% |
| Total operating expenses | $212.8M | $198.2M | +7.4% | $59.6M | +257.0% |
| Operating income (loss) | -$83.2M | -$76.1M | -9.3% | -$15.3M | -443.8% |
| Operating margin | -49.8% | -48.6% | -1.2 pp | -25.6% | -24.2 pp |
| Net income (loss) | -$86.7M | -$80.4M | -7.8% | -$26.7M | -224.5% |
| Net margin | -52.0% | -51.4% | -0.6 pp | -44.7% | -7.2 pp |
Risks
Net loss widened to $86.7 million in FY2022 Q3 from $26.7 million in FY2021 Q3, and to $241.4 million year to date from $56.9 million. As of March 31, 2022, accumulated deficit was $459.9 million, and operating loss also widened.
As of March 31, 2022, the conversion condition for the 2025 Notes was triggered after the stock traded above 130% of the initial conversion price for more than 20 consecutive trading days, and the notes were classified as a current liability. The company had $1.15 billion of 2025 Notes and $575.0 million of 2027 Notes outstanding.
The Divvy card exposes the company to credit risk because it purchases receivables from issuing banks and bears the entire credit risk if spending businesses fail to pay. Provision for card and fraud losses increased $7.4 million in the quarter and $19.8 million year to date.
Risk management may not prevent fraud by customers, spending businesses, or counterparties, and the automated platform could enable significant theft. The company continues to be targeted by fraud techniques including stolen identities, account takeover, and check fraud.
Divvy card receivables are originated through Cross River Bank and WEX Bank, and the bank-nonbank partnership structure faces true lender and valid when made challenges. If the structure is successfully challenged or a bank partner suspends or terminates, the company may need alternative compliant bank relationships and could face business interruptions.
Divvy relies on warehouse facilities and purchase arrangements to fund receivables purchases. If finance partners terminate, interrupt, or fail to renew financing on acceptable terms, the company may have to use corporate cash, which it says it has limited ability to do and would stress cash resources. As of March 31, 2022, it had $155.0 million committed credit facility capacity and $77.5 million drawn.
Customer funds held in trust are invested in marketable securities and are subject to market, interest rate, foreign exchange, and liquidity risks, and the company must hold eligible liquid assets equal to at least 100% of customer balances. A loss of or inability to access customer funds could require additional liquidity and materially affect results.
The agreement with Intuit terminates on June 26, 2023 unless earlier terminated, and Intuit has integrated another third-party bill pay solution and may develop or acquire a competing solution. If Intuit reconfigures QuickBooks in a way that no longer supports the integration, the company would lose customers.
Divvy revenue growth depends on increasing card spending, and rewards redemptions create significant costs. Sales and marketing rewards expense increased $24.3 million in the quarter and $61.4 million year to date, driven by transaction volume and estimated earned rewards expected to be redeemed.
Payments and financial services regulations are material, and the company holds money transmitter licenses and must comply with the BSA, OFAC, FDIC, and card network rules. Invoice2go has subscribers in approximately 150 countries, increasing international sanctions, AML, and privacy compliance burdens.
The company identified a material weakness in internal control over financial reporting as of June 30, 2021. If remediation is not effective, its ability to produce timely and accurate financial statements or comply with applicable laws could be impaired.
Relationships with more than 5,500 accounting firm partners accounted for approximately 49% of total customers as of March 31, 2022 and approximately 26% of total revenue during the quarter ended March 31, 2022. If the company cannot maintain or grow those relationships, growth prospects would weaken.
The Invoice2go acquisition closed September 1, 2021 for an aggregate purchase price of $674.3 million, and risks include integration challenges, retaining key personnel, international operations in approximately 150 countries, and foreign currency exposure. Invoice2go had not maintained public-company internal control infrastructure.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Gross Margin
Invoice2go subscribers
Core Revenue
Divvy Spending Businesses
Number of customers
Divvy Card Payment Volume
Non-GAAP loss from operations
Summary, forecast, risks and KPIs are extracted from BILL Holdings, Inc.'s SEC filings for Q3 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.