BILL - Earnings call transcript Q3 2021

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Operator

Good afternoon and welcome to Bill.com's Third Quarter of Fiscal 2021 Earnings Conference Call.

Joining us today for today's call are Bill.com's CEO René Lacerte and CFO, John Rettig and VP of Investor Karen Sansot. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session [Operator Instructions]. Please be advised that today’s conference is being recorded. like introductory the remarks. would Karen over I for Sansot that, to call turn to With Karen?

Karen Sansot

earnings short Thank Rettig, third related release conference our can quarter operator. Form XXXX release you, Welcome SEC. earnings call. to X-K to We The furnished ago and time Bill.com's the fiscal press the a press issued be investor.bill.com. Lacerte, the John on is René Vice With Chairman, Bill.com the and Executive call Relations of of section CFO. Investor on and me found our at Founder CEO website President today and

Bill.com by are also that Murray, We this forward-looking future of Co-founder Divvy course of the the we joined call, remember Blake please about CEO may make and statements and risks If results actual begin, we implied expressed of Before risks many if by operations during uncertainties. statements. or develop, our involve those of uncertainties differ of any the prove that any forward-looking or materially from or assumptions, assumptions these could incorrect, and results

a figures release non-GAAP to the refer refer GAAP is and discussed financial measures. we measure disclosures call financial today's to will quarterly to On our Relations regarding reconciliation GAAP today’s measueres. the that we risk For statements. website. including the refer issued on the most report of today XX-K on the any obligation forward-looking any financial the Form The disclaim and with We press recent XX-Q Form On both section Company's filed SEC today's periodic both and financial on are filed annual refer available unless statements, our in and today with factors stated call, to a to non-GAAP our GAAP release and non-GAAP, forward-looking non-GAAP number. will report these Investor reports discussion SEC, associated non-revenue additional of to update text please measures. to performance GAAP our with the Please for press and of the

René. the Now I'll to call over turn René?

René Lacerte

accelerated and commitment and slide increased quarter fiscal after for XX% website Investor transaction. revenue We fees and in core helping deck Divvy, I record to hope transaction families good was total delivered report I'll Thank the Karen. more our transaction thrive. Good excited We pleased to a posted space. It am and a leader third everyone. cannot our with acquire volume. more recap an third SMEs spend These a results. thank as quarter. midsize companies transaction excellent our growth transform of that of In of the grow our Divvy and revenue you, quarter value the on Divvy vision our share your our results talented CEO and to of agreement Thank to create health quarter all also I them afternoon, dedication simplify us with results Murray, overview fiscal definitive I'd about increased Relations and payment in year-over- on quarter help of another year-over-year, small delivering to the well. in our our can family the their rigorous focus transaction operations. that Every transform joining strong fees today. co-founder possible execution. we've laser and I'm result day talk on they're management doing to that QX continued how this announce efforts the today you increased us very Bill.com TPV is a we Blake when tireless XXX% for XX% businesses into Divvy and because and passion you and I'm about welcome their year-over-year, about year. financial only can entered enthusiastic for a are significant be customers. the employees. team for focused the to in are shared like transaction combined and thrilled the closes.

it connect to business. Our simple to make and mission do is

platform one the and innovation third this and of with Throughout more believe been Our for helping more are and our enables SMBs financial We BXB half annualized the office suppliers than the SMB of United been TPV. in customers customers. COVID-XX and in States. run operations. a year with pandemic, by everyone's customers, disrupted the business digital quarter network ended the payments. over make XXX,XXX by businesses lives largest and leading we payments of changed back billion than the the resilience platform members operations, and we and networks connect BXB have simplify two $XXX million It's rate a their since We operate inspired

time this their we've business their tools. seen models, During adapt customers digital services our and embrace expand

For Dog-Walking offerings training. Service advice example, virtual new into pet Wag wag health, the expanded remote and like care,

of new while virtual cloud help pet with in serve them enabled expenditures new empowered offerings. automation. technology solutions which were investing into reduce spend to daily parents through their the faster and With services and they flow, able more these many insight them like cash Bill.com Bill.com, to

quickly freed simplicity SMBs activities, for time, SMB interaction. make scarcest and with an up every has through focus virtual track was plans post for Another dime flow The their deep to able With help and ones. ease and events time analyze on including events. financials our to evolution their the integrated them virtual us cash more systems the from understanding solutions, example, their closely events that Bill.com pandemic company Bill.com live experience and their When is to is the pandemic resource on and sure to crisis. hit, daily focusing needed a be you pivot to had and to of manage they on driven live Bill.com strategic

February best use use. they've was least The super Bill.com for create two Bill.com in the aligned or said platform that mission and the customers, the invoices, what best same learn and of in For for for Delivering customers us businesses website extremely a methods winner me efficiency up Bill.com all that of economy. in recent This easiest XXXX commitment is at those GX’s speak collecting collaborate of our all example, day. use market saves to from for to of the every with on the ease times all said named year than the use I'm our is implement, sign year. co-workers I easy. make the for was new is with GX in Bill.com life customers day documents, to to last they made customers XX% a grateful to so makes faster are bills able than customers and actually survey our more our These payments manage comments to keeps the one of them XX% improvement at that quotes payable reasons and the to themselves. over and system drive the another, more is and customer efficient. much bringing Bill.com. Bill.com team's it motivates payable found on said biggest one, love second paying accounts me of finally more And payments, easy It and traditional Bill.com. said time row. organized software

of year customers, as the to a growth mid-sized plan of effort digital XX% an learn companies that how COVID-XX. and on across new with owners talking XXXX two they We the begin a also in surveyed We're survey pandemic. small hearing to doing. the businesses understand businesses to they're transformation services U.S. ahead. XX% about About we country business recently drive to to planning are in year addition reach commissioned many and as numbers began the In and introducing out of during SMBs are or optimistic products navigate

are as the priority. where both is that attracting shift driving XX% companies accelerated which These and from points and digital our significant of a COVID SMB addition, and can has year that adaptation. of cost and the expanded us financial of gears, a office new In Shifting our some customers adoption the beginning been highlight were the We among are business of their businesses recent survey ones. generating driving an data by SMBs of ranked we be back important like population digital believe from everywhere. ago, multiyear on to for our tell wave general focused transformation are customers I'd part model current This savings top transformation revenue a we pandemic. at initiatives

to We of Adoption our continue in offerings enhance significantly our to fee our transaction newer for as virtual members. payment such of and growth menu cross QX. our contributes border network methods card and payment customers

In been piloting addition, instant branded product, transfer. which we time real our payments we've

bank Stripe enabling will funds mentioned vendors Stripe As expand quarter, we receive with our this half integration time are available to will to deliver product instant payments and than cards. more generally the a two building an be all debit The nearly will integration and via network to accounts. transfer we by us that of allow members real reach quarter, of our last million

area focus has while creation for the through straight enabling on bill been Another process simplifying supplier payments. processing

capture with the directly to platform. third AI capabilities, also on are give fetch such automatically companies as our and our ability will data large work This and a presentment electronic to entry enable enterprises using bills our addition In us to into our working we platform. party bill enter from for utility

process The a to working those near bill virtual third is with this and cards party end. payment to autonomous route beginning from to are also automatically collection We payments suppliers. via same result

We to platform. partners join this introduce new is enabled to a once later capability of scale onboard functionality firms expect calendar our clients firms to accounting year. to much This feature firm at recently upload launched that reason faster and enables and accounting individually. this our XXX powerful to for We up instead

opportunities. accounting attract clients at Our manage new business platform's onboard to ability help scale and firms

to firms example, distribute applications an won make seamless and of with with platforms distribute states contract we As process relief handling our songs and our large funds. of Warren and one selected mourn payments help a to Bill.com because volumes accounting several these API's. LLP COVID partners

rely Given way of customers. our real sync This positive. integration on opportunity between use, a integration with of and announced platform's ERP software. has of continue customers Business to midmarket this of for and workload we sync our the been controls XXXXs Microsoft, We're ease about two recently data significant The Microsoft new companies systems. seeing efficiency, time initial from midmarket XXX, excited has GP Central demand our our creating Dynamics extend Dynamics very Microsoft ease XXs and increases as by both platform feedback We reach Dynamics. use,

at real Collin eliminates integration the offerings For time for a breadth wealth sizes. CFO visibility duplication asset platform. accounting entire and coding estate of serves “The midmarket are and enabling saves quote, streamlines In It collecting efforts real approvals This level. of the our Dynamics finance powers across digital Bill.com this operations AP accounting Casper, businesses, said, the with From syn investment both us XXX understanding tremendous Ventures, example, it branded partners and process”. and are organizations development the a entire company. position, cash management strong quarter making of payments, for firm time invoices, summary, to and and companies, JMA to us have I and of to and the of our work small financial management very results from ranging demonstration all team of

We the large strategy, win opportunity market and have to a team partnerships platform it. right and

Now financial results. to to our I'll over turn call review the John John?

John Rettig

of quarter the results our brief financial Thanks a financial for and our I'll fiscal provide outlook overview XXXX Today fiscal quarter. fourth third discuss René.

release the non-GAAP includes certain reconciliation tables Note financial non-GAAP GAAP method for appendix for presentation As calculating measures. to Please XX the directly for press our includes to discussion reflects revised that a in website. financial and table reconciliation Investor posted our and an the which periods comparable today's to results. our most our non-GAAP release measures. in We've included found refer a that be prior earnings a measure. made on financial quick we Relations both from QX nominal also today's a XX adjustments can details QX press reconciliation The reminder, to

revenue $XX.X across expectations the our in existing growth operations. adoption to quarter XX% XX% year-over-year was on financial which $XX.X in and the financial which year-over-year, turn newer updated our for mainly was areas our used platform revenue in million, their for number by per up quarter. strong customer payment QX increased our QX, revenue and on subscription from transaction, areas engagement digitize me by driven financial across business, our increased year-over-year, progress million, $XX.X on operating million by the based of payment the QX our for results revenue, definitions. our exceeded Transaction key existing $XX.X let driven non-GAAP QX both and our Total was delivered our transaction all This all higher are new strong our leveraged year-over-year of of primarily Core as QX platform. million solid by driven Revenue results of platform which composition the Now last changing XX% offerings new and due customers to We customers. to and metrics. in of represents average up QX increased customers fees Subscription up to acceleration growth up and year-over-year, in XXX% year-over-year. increase growth XX% to XX% types customers. driving

by with payment TPV in of shift fourth XX% revenue in transaction XX% up strong year now pricing. represents Transaction growth, and mix quarter driven a of our a from products a growth represents growth variable accelerated the XXX% towards continuation transaction revenue Our and QX ago. core was of revenue row revenue

we employing this our in vendor matching enablement recall, automate you initiative. in As AI house QX to entirely brought own logic supplier

our capabilities efforts our QX paid and their who We results. to local in to enhanced traction better of in expected resulted international Both identify also than revenue dollar want apply suppliers these payments. versus AI during U.S. be transaction currencies

generated QX. in in we revenue $X.X float float, to Moving million

at annualized XX the quarter quarter the of XX was on yield reduced return points in down funds for approximately last rate and reflects and basis being rate customer environment The from from estimated levels. interest points, low rate investments our held above maturing slightly Our quarter. current QX last range lower reinvested basis

metrics, quarter XXX,XXX the with an we XX% year-over-year. update key ended our customers up business to on Turning

above we than expected During new the expectations institution due financial our performance added quarter, which XXXX to customers net better our from channel.

bank to added they a program our of customers in of quarter. the incremental launch the that due partners One over XXXX new implemented

new below and adds Excluding last our would these have quarter customer customers, with been incremental our expectations. new net consistent slightly

few unit and newest are ads our enter the roughly the to for institutions financial as over expect to investing quarters We strong and we customer generate discussed. XXXX next XXXX. customer economics new growth net phase, scaling until previously

payment transactions year-over-year. total both XX% pattern. X.X which and On we which up billion to follows volume, up on million $XX platform our on typical we during our year-over-year, basis, roughly a and qX, TPV Moving QX, flat, processed processed in was in XX% transactions TPV were payment seasonal sequential

margin gross operating our and Moving results. on to

R&D third of low basis Note rate gross the updated the in of $XX our a with the our margin non-GAAP our that in the investments calculation million for our to strong consistent of quarter XX.X%, in are which from from non-GAAP revenue compared to to revenues the was variable the range definitions fiscal XX% non-GAAP reduction environment. prior XX%, or at institution as XXXX. by end reduce XX% partially partners, of quarter price margin Our from we was transaction primarily gross was margin as quarter support XX high interest methodology. expense offset expected well financial resulted gross float quarter of products, points infrastructure the revenue, making for

$X invest R&D hiring partnerships. support and related to million. and investment financial for revenue XXXX. continued and QX and sales quarter XX% for We $XX.X million marketing institution of work roadmap payments spend platform, our of increased were XX% marketing in fiscal in additional product expenses Sales Quarter-over-quarter innovation, to the our our compared to revenue, continue of in or to newer

expenses product efficiency. We fiscal an discovery payment marketing in compared QX in of this million or incremental of XX% the have been of marketing through our XX% were $XX.X to and and G&A driven successful minimal has spend. in XXXX. for sales increase sales products driving revenue mainly adoption with and And in quarter upsell

management part competitive a investments and risk part an core in include we of are capabilities proprietary Our which our our compliance, regulatory payment believe G&A advantage. form and expenses important of

$X.X $X.X and And Note a in ahead, loss non-GAAP updated weighted last will to QX, net to in methodology. definitions $X.XX risk scale quarter, loss $X.X compliance a but based share our in our we XX modest improvement continue Looking a of operating the expect of million QX calculation $X.X term. our was non-GAAP over was invest loss year. improvement net of our or versus achieve capabilities, in economies on non-GAAP million longer our million loss in prior to per share the million resulted outstanding. of non-GAAP $X.XX shares loss compared that basic million per In in or

the billion balance term to investments. quarter Turning cash, we the sheet, short $X.X ended cash equivalents with and over in

customer funds our had As $X.X balance we in of billion March XXXX, on sheet. XX

contribution for any let's Now that and the transaction. basis our not with our QX the standalone we're execution encouraging to and in on QX solid Divvy is business, Please a outlook. move seeing include in momentum. Based from our entering financial on note our we're trends outlook does Bill.com

driving shift Our increased payments. partnerships core are go-to-market revenue initiatives expanded to offerings and strategic revenue adoption platform and growth, payment mix strong a higher

of provide an fourth for I'll Now fiscal outlook XXXX. the quarter

For fiscal is QX, million million. to expected revenue to be $XX.X the $XX.X of range in total

range of that expect the $XX.X will We view in in momentum revenue continue $XX.X current representing the QX million to our core million, from quarter. the

the revenue to during quarter, of Funds and that the zero Fed range rate float the in range points to XXX to XX will XX outlook range our June points. and assumes the annualized in basis float to the expect yield We XXX,XXX of that revenue continue be will target XX be our in basis

environment. float foreseeable range our rate low will the yield the future expect that remain given in for We interest

financial our creating development we to products. R&D newer platform's planned payment capabilities and product relating our to to develop our and operating new invest Regarding in work will partnerships, expenses, institution continue support

will and economics and investment our sales regards increase our opportunities will continue warrant. marketing as We unit vigilant with approach to and investment

$X.X $X.XX shares of of loss average range non-GAAP in line, bottom count EPS and a expect non-GAAP a the based $X.X million XX.X weighted record to QX. net for loss basis of the on approximately million share to basic we share on $X.X a per million On a to

in delivering digital financial to securely. XX stock-based safely core strong X SMBs leading transaction a XX million. revenue solutions. their for us for customers trust a new and adopt In to funds million need to simplifies QX, operations headquarters in million transform that our our We're of we X revenue position We're be other business requirements by efficiently, the their addition, strong move and expect to the platform to approximately and We're pleased financial and of growth operations growth. driven capital compensation expenses expenditures with and strength very accelerated with and approximately

We are our reach durable to capabilities, for platforms market. expand long Bill.com committed to our investing a strategically runway we term and believe growth SMB will in the which create

Now René I'll over René? turn the our to Divvy, of about call talk acquisition to

René Lacerte

combines to Thank we all solution you, the together, to own. our faster to customers about John. to transaction reach and smart value our Earlier bringing the expense one companies platform do expanded today, welcome thrilled By extend I'm and spend manage definitive Divvy, agreement budgeting an cards. in space. can is a their can than BXB Divvy customers more we very for extremely the even family. that management our which will acquire on our Divvy spend our software, excited into corporate modern, and announced the management the Bill.com team we provide this create place, innovative

has entrepreneurs our corporate revenue. done, Divvy’s loved SMBs mission Divvy milestone. spend. to to I Bill.com the the their SMBs. for To at for simplifying We're We value was SMBs been since mission ago. both business founded run tremendous do AP growth help run alignment solution both run from been Divvy was years connect in make simple SMB with attractive leader strategic companies status and disrupting today platform a a financial with our our is similar be give product which watched purpose I elegant a customers. exiting And the their know to quarter, always is their XX their software grown gets business. their mode an And and by approximately and recurring XXXX platform recurring the XXXX we We of rate I've visions a that how thrive of have to operations. of it our we'll they team is XXX% is We launched and it incredible impressed There and I've help own, value are my the is leading than more to their to March Together, hard a you quo years the March how can by idea between annualized customers million, $XXX have scale in rate. revenue three Having simple is up for companies. transform operations. founding committed our major aligned expanding and always financial of in built card and and create customers employees. believe ago leader I have automation, to automate Divvy in our to and family high first-hand that work relationships And they core we Divvy solve challenges managing a running company. get office he away experienced card to and most which important is them. the of experienced founded building to the visibility sophisticated solution that with processes, pain built. combining card and I and empowers software add team solution and to really Blake single them the financial frequent has expense hunt automating unexpected for for both having day-to-day be their our savings. to to too, to help that day corporate cards businesses by It's of that takes spend simple It's the fact, why business insight, to founded customers the card into expense control more on companies from and gives and office By business. information. single and is solution its card back requests spend. of most all solution Divvy significant should Similarly, a tools. and smart That has of and point a management budgeting that admire evolving to on surprised spend me for solution, small businesses management by I growth spend focus manage I've a card be real Divvy from expenditures, another simpler the back founded no customers to customers. a thrive business platform. focusing on to respect a with can our in provides And SMBs. across is managing constantly were simplifying the so a time midsize more what's Bill.com meaningful champion time premise business one the the No small being day be

receivables employees I'll scale cases before. keep like opportunity businesses use over their automated go management more for simplify and support never operations manage proposed be With transaction. this management. to the along his our will a innovation customers combined and with of dedicated of and on their experience corporate payables, our the lifecycle, platform now And to spend. insight experienced accelerate workflow share into purpose budgeting able an of to XXXX bring more majority budgeting and solutions, with and further transaction the and also move Divvy’s and management, call businesses we more and transformational with Blake with midmarket spend at will expense and real have their transform We of card talented enable Together strategy. turn perspective to and forward year financial of up SMB expectations quickly. innovation center than we agendas visibility the bringing capabilities, can cash Divvy spend us empowering Customers by our will a with exceed together time to our addition BXB Bill.com’s flow the The spend to of have VR and them vast and

Blake Murray

software access how Divvy join I to closes. the small backbone businesses them for the an mind, we thrive. economy. of transaction grow give and they that thing René. When to the we medium say to behalf This and when that the members. com sized build to to are I Divvy’s are would great the excited help founded customers a I'd financial run business. the one amazing team and the entire had Bill team and company in you, needed that Divvy, we wanted supporting On team, Thank them like to of incredibly day the a wanted tools is

Our a corporate time, make been We spend. software an payments very into period customers lots mission our we've been $X to amount X,XXX finance and and manage a in businesses March, to as Divvy. more successful all-in-one and spend we time monthly significant have build for to wasted of more now of scaling think of when different business than have spending solution is always has just teams. annualized of on short In than log billion

SMBs. René, revenue importantly, than for like everything Bill.com annualized making of Our Bill.com. and DNA. us was them. fit, team perfect north, advocates they we is do up life is more so built It's John a large part incredible This a ambitious our they're our for is our about been are exciting XXX% for have simpler on most true growth And authentic. and has customers fierce what an company. in driven, They're focused

Our on meaningful impact their solution has customers. a

to with to during customer recently to With equipment. immediately provide quickly our to deliver to solution. one No platform the to enable wasting safe while back equipment companies needs. René. have our now their bring buy The time really stop two customers the excited help call joining office under I'll issue Bill.com we be couldn't remotely, all turn and staying they on as thrive work manual that No staying tools by to. with budget. their needed close example, for day in will needed known our make more at late been that be have the spending forces had able combination Together operations. a business a modernizing bank BXB the you SMBs tool they And transforming them all their need COVID, no Bill.com, that to We're they financial customers work, to how for payment their finance everything employees For to cards money of owners employees we'll waiting Divvy, for. one solution more PPE one, to does to single the teams and were recounted with asking From able for get the market more limits books. stay

René Lacerte

you, to by result we really of direct developed, businesses together. transaction growth vendor for supports has the which it's doubles corporate will for we adopting Divvy domestic this invest we Divvy our be solutions. Thank be that and excited And opportunity. in more XXX,XXX and about to product This our corporate is scale. of two card our virtual our market. rates portion than a that with Blake. card monetization investing our commitment card offering. This our We're customers companies comes to And create total interested bringing value can believe similar in customers addressable everywhere We're significant the believe very growth excited attractive

a pursue. aggressively So there's sizable sell we will cross opportunity that

for believe our Additionally, to SMBs management spent quickly market increase Bringing of prospective having more we us capabilities the and penetration. deepen allow will will platform that our companies value together customers. midmarket these

look forward now will the when simple remain to I'll and team John about expanding Divvy our be to XXX and of We call accelerate transaction terms talk combination members who Utah automate operations financial welcoming geographic the the And closes. plus Our the talent. reach team our platform SMBs for in transaction. will turn And over to shared to connect the to leading vision will for do Divvy’s make business. it

John Rettig

René. Thanks,

and start combining Let opportunity by for by Blake's companies. saying share our and the ahead I me transaction this enthusiasm René

solutions and by for financial commitment serving to shared our bringing Our operations with automating be will vision only innovative companies enhanced together. SMBs

cash million terms Bill.com $X.X consisting billion approximately of the on and acquire Under stock share of in X.XXX definitive for Bill.com of $XXX price transaction. in agreement, $XXX.XX. a the will Divvy based to Turning billion, the

close acquisition the subject conditions. XX the expect closing XXXX ending to quarter by to We fiscal customary September

We will will cover combined say revenue our after details expect can at though of financial I company's growth rate. we that this be time, to profile accretive the closing Divvy

that virtual card revenue expertise variable addition, is scale in In similar very based monetization that brings we and recurring our offering. price rates us with payments transaction Divvy earn model on and attractive predominantly are those to card a has

annual our this transaction we'd Divvy in to in execute our Operator? guidance and once confidence and earnings on and growth a for the serving the call accelerate our XXXX is intend success together Divvy open our once incredible Bill.com has With are of can that for questions. companies that closed. impact SMBs. team towards business up an maintain to transaction like this including closes. bias combined to year reflection transaction market our fiscal excited provide The our in to expect combination growth vision likely penetration the and our we We next belief investing the We opportunity the team, of call creates of

Operator

your And Josh question first from from Instructions] comes [Operator a of Beck line KeyBanc.

line open. Your is

Josh Beck

your was decided transaction I larger much And you the was such why tuck-ins, to some wanted taking sure bit ask many, Divvy do a I'm question. you good so Divvy that many thought go you congratulations about fit. for on before companies partner. you Thank everyone. a deals, for looked right some the just little companies at Obviously,

through a your little was So maybe us of seat? a it walk background why fit the bit from you such of good just

René Lacerte

and great Thank your voice to you, hear question. a Josh, good

blending talked XX to opportunity been which expand the well as and we canvass we about about features, add as the and the to definitely working years. obviously both we market, by we've which we how think right, on some acquiring new talked as on real partnering, the and really enhance platform that the a You're as taking about lot building we well a and script, our platform, on also for can actually

And that we that's, is something had, their super that it to fast, comes the success really important. the kind they're they're, and had, looked so is to has at speed since stands exciting success we mean, there, but of growing see just really that which founding, they've also and out. I when looked the back customers, device out it

for, so we're listening talking with to customers, customers, we do, we're to always And everything and to talking always us, for we're prospects. always

market with see in so, And kind XXX,XXX general. in to the of we're on what's customers, able going

are do XXXXs of we have using XXXX actually are solutions, and DB spend customers. customers have over management so that doing And and that we

to of alignment, And goes to have, transformed, when kind doing the high about has had DNA companies, just of is they their success, love the that that it have, talk vision found mean, this SMBs a customers is really to team shared the which lot reminds customers. the of thrive. fun Blake of And And sense of you strong. SMBs deal me this me leading are is automate vision, the at with most from this and of is was powerful that both their to success across of we get help we kind to just high it's to really on that the is And is as our when they people a part well be of things execution, to there really the purpose you back DNA, the really them. his you one have with. platform to so how been both we've and phenomenal. which customers, getting customer grow shared to It high, this purpose, you it's a those be we team. much operations, know the see, I really what They Divvy the really for that see know financial thing as they And really values. kind for I, have, to the know, out the goes everything as fun

think I've whoever a of the.com, to be sure when into folks. focused comes going it's about aligned so on be years, just that over Bill.com that very And lot we've that those making to XX I family, the work the and fun with built been team

But, in notice asking team kind reasons do it excited really digging about us of the lots the pretty with of then being of taking and with good business it. so customers results, that. started then So, and to

Josh Beck

just about good a deep on Really hear there. alignment Maybe to the quick follow the synergies. up

think of to And when become maybe they're Divvy to this all those convert is strategy within they So customers Divvy What the customers customers generally, that are about today, are expense management? not what you category what well? using your of users as

René Lacerte

we at when working we spend at And we let's look think spend when on. that, it overall the really of XX% is if roughly, all the not what's XX% the a say think on our isn't customer that, customer that's XX% BXB space. of spend, in we the corporate XX% that and to of look platform, remaining, we Yes, card what lot Divvy have,

without where So, hear to solution a doing kind corporate so manual are a customers happening we a businesses customers lot of chance Excel solution. it's track this sees solution know, payables But processes a in is, of Blake, lot they're of when manual of kind he just the solution, you that kind to you processes what get their of like process using spend talk using the to the that's to spreadsheets, that manual of you are, have. track outside

And revenue business. the of what is you the, product, leads business a us opportunity get at, monetization two times TAM the type to is the is price know, so to multiple type of, know we business. the to when you monetization, that our the monetization the of Divvy approach synergistic that that leads it you. variable, actually for that spend it This this that have. essentially, the are helps we on for double a the opportunity comfortable us an looked And This card on is of that that revenue has, opportunity is is that the

and double of that. And think forward the that we look that so confidence the overall just Tam can we that to business doing gives us

Josh Beck

hear. Congrats, to everyone. Great

René Lacerte

Hey Josh.

Operator

Bank from line question comes Brad next of from of America. Your Sills a

open. is line Your

Brad Sills

Bill.com Thanks, been on mix and move small guys, please. and on and my has ask between see business the that progress they on transaction Congratulations Oh, question real nice for seeing market up taking I embarking already Yes, to have a on pretty a a there. here. great. well, quarter I as question. Divvy wanted of good midmarket. Obviously,

what to cross up could this? to into midmarket Is know, up that move bring a this You the accelerate kind Or is in is the do Is even ability business market? between solution? you view think this market? addition to base, of balanced guys small this this more it you your extent of that more sell

René Lacerte

of to Yes, build serve reach all we that the And customers as is along the and scale, get them. to better ways functionality, find us pool said, midmarket the ask things one sizes. of that we we more all around we into they

as lot across we as the obviously with team well day actually, for broad we Blake base. size of it when we So, alignment and section is have, cross data in customer that the industry looked the a and serve. And his customer customer both country, Divvy talk at we they a and us saw that we businesses of when had, to with

going think focus, isn't need want going and to businesses all this our that serve all businesses. we financial automate we're is solution to their So operations, to change continue to a which

each something meaningful it's We segments to will we isn't allow build very continue a side going to of going to for that way. But continue the features, serve. that's accelerate, this monetize in to us

Brad Sills

the like and one, traction some driving if border. this capability called sales you'd terms in the question with the really new, supplier you're adoption hitting was promotion? My there. firm, in really past, product tremendous. is Thanks you're may, I motion like promotion. Seems with is you're of quarter great. And a This revenue like your cross for you it of seen VCard. supplier VCard the product capabilities, hitting guys couple transaction And, René. seeing, In what That's really relatively sounds your and enablement and then is, out feel here quarters, you traction enabling stride within you had last stride

So, here, that's and how where does of tracking? commentary that motion this any on and kind go from sales

René Lacerte

do do are Blake cross our execute great to, sell they agree serving be a and amazing make lives scaling better. employees and something part It just about a we've as you cross how excited important SMBs even we know products, we get we the transaction passion that that's guess to gotten sell, you to closes, demonstrate to the better to talked have everything call we and able learning. opportunity would at the customers, and that that elegant, that we simple. have start for real rigorous country, do. this They know, we're to have. that's his I an that cross the the it's which to we just And out to thirst lead And, How and and And same for over that their team, would great sell out. focus like the business love that they be just the with at learning had can the to knock something love and really results internal had to going is they're this like I something are into the that very get essentially all a And It's own better. of Divvy. park. and I getting XXX,XXX having how doing. something once they're thank testament an it’s well. execution you can are quarter, And on an how team going better that, everything in rigorous that fun about think we've it's such that And, I to actually aggressively the a that have the every execution, beginning with that's we to solution. and, that's of delivering excellent that's And of really, we we solution It's do quarter I script, is I it the been see we together. And that day

Brad Sills

René. Exciting. Thanks

Operator

Brent comes question a line from Piper from Sandler. next Bracelin Your of

is open. line Your

Clarke Jeffries

revenue is for fantastic. continues Brent, transactional Clark question. Jefferies on first Obviously, be this Hi, growth to

I wholly it X.X what's expectations? And been just it used this the what transactions you ask be back just, has you large now when for on is your revenue to and customers at, transaction products, about and most what think acceleration launched So to you dollar understand virtual and, cards trying the these wanted to willingness when surprised you're the I to, paper us different generating transactions variable stood checks XXXX you just mean, really than transaction. above use each I has think the this million to to when strength feels per out scale? driving and replacing for

René Lacerte

we're into into building supplier and to, Yes, This cross I really right. products, again. it our base, back comes teams sell is, network, our as capabilities our customer the as think execution well rigorous to how around

are So transaction. need something customers, that as need get to FX suppliers as the payments sell then we we well into cross an to our accepting international their

the situation, the of mix of and and virtual tools. product same But marketing, on that wanting excited the a it's with mix technologies them, card so mix the it's a product needing take sales it is true the to suppliers on And and in of transaction. is And car. virtual focused getting

cross And so the about I it excited really is figuring gave this were customer said, us knowing opportunity becomes really, like the what sell, once Divvy base. into of our this got this confidence, built teams and leaning it. success the that we out of platform part to the has And it with, in that the be us, that Divvy I extension would think team do to able is

Clarke Jeffries

any there Great. I just composition terms contribution think of you can there we of And Divvy share the should model this of just should what as, ARR versus about revenue color XXX mean, for extruding up, then how detail more think transaction then today? million about in we post a portion any model. closer, follow the is subscription, and about the

John Rettig

traction we've after a of the of the model the our for We’ll and we customer on on you've is that combined components the thanks with Divvy. they more from great new business. our that Yes, point, provide platform, and transaction. more monetization can the closes. once they more the had a the this the focus color provide growth say is question, the profile model products transaction I that use John. it's is with the more pay alignment I We’ll At color This high financial revenue similar qualitatively Clark. seen And the some true definitely similar transaction mean, growth financial additional close in to customers information of some more Divvy the

Clarke Jeffries

Thank it. Appreciate Perfect. you.

Operator

of Darrin next Wolfe comes the Peller Your line from from question Research.

is open. Your line

Darrin Peller

came above you Divvy. in we or, came customer potential then guys the on seeing still when pandemic on you Hey, they strong. expect? though, trends pocket, pull And that banks on on, cadence just air pace? in on are look, mentioned I the quarter given an accelerated forward carrying coming guys, the demand, expected just the about, new interrelationship. Are seeing I you on we Nice job the revisit trends still congrats thanks. and forward coming can focus at what the actually acquisition any And we're the think can want considering customers to

René Lacerte

that's there customers and transformation there, and accountants, is system call something partners. financial our our away, is see we that in with our customers, digital that's out And with And that the seeing we in, we're happening. direct more awareness both What referenced a of and ask partners for, to be as all digital solution. aggressive expect our are script, how was, sell the being market And people financials they across solutions. partnerships, that one the and to we more is, of continuing to our about demand

we're So, really happy I And acquisition excited think the points we're the able to to it's a something that customer as something to I think results as with the that on teams it's about, be this deliver. trend, that quarter. execution well again, the general

Darrin Peller

the some offerings the Divvy But, terms the more that more examples. if pick be didn't what other clients with timing. think When which of color they guys Thanks see about it'll direction to [Indiscernible] some, of we have, prioritize and helped And mean, have a and cross hill the in maybe in excited going just really have terms most on cross side to you and you be you're of just easily acquisition easiest you just I little guys. who think again, to up. the the just sold clients you is about

René Lacerte

then ask Yes, comes room. in Blake we've it I'll spend obviously, in to because perspective, got start I'll of guru to the when kind management, and of the fill so kind his

of that. guys have kind to a I about you So want talk him to chance to

Shop do one we we've what like is the Stop can They've been managed doing talked about. customers customers for be have our place. that really, they One one been spend able see asking super concept that been these It's They've to So solutions. solutions. is management important because for that asking in it This everything for in place. asking expense things

to of so And see don't lot believe of another transaction, platform. XX% And individual as a the through lot that and go XX% I all a corporate we on got said, card no, through cards we there customers have Bill.com making spend, there's like XX% We see but to XX%. we've transactions. is a the spend we of that

into a the time to that's So, let know this opportunity there's sees a we significant sell words, he all our base. cross I believe his think, from because Blake why business. But me let I out few

Blake Murray

free is where, that the control. spend stop they a And great able when, that It's with nerve, on. with It's entirety opinions with want. They we have that flowing is we the simply platform with after even and want real small obviously data. give so they the Bill.com financial and something their reactive. piece my integrate place striking through strong kind feel and office. in a why. precursor time that's with to their Yes, want reason here, finance why why businesses And know such closely we and a then now Divvy conjunction of it's with them free on closely feel payments will in a want we're and frankly, And what control. close the comfortable obviously with They being what, to future, response. management of That's want that teams, really, it's to work core spends is They make flow we can control premium an management also to certainly who what a but working data complete really customers. our question. And instead midsize a single as combining behaviourally vision of solution of in one managed back of which in they consolidation, this platform important that of spend we in a that they Bill.com have in shared the after so

Darrin Peller

That’s helpful. really

Operator

of comes Needham. a question Your next from Scott from Berg line

Your open. is line

Scott Berg

congrats René, two and guess, the Blake, and on I both quarter here. transaction. the I have Hi, John

had have product question that to Blake, meet for a out strategy aggressive What’s historically. things stood and couple you was chance I've one Divvy. your a First of Blake. for the times you

terms that, transaction maybe you years think look you? your couple functionality the of the over three what this and this together? about roadmap that can you As what bring bring at do transaction, How in next, can

Blake Murray

in to beneficial a well And want, payments to make payments I And us speak hood the the under do teams hope was been the to business. accelerant great of this When able side way make the piece we was pay obviously small roadmap. make that is then you very is and modalities it the and It's allows payment as to need the provide a an of XX% that to clear big illustrated how the product the XX%. accelerate a It's point. you them clear Yes, And to clear to René Payments need Card that fun finance Divvy us. corporate a us. have to it's this, And stop payments. again. you owners peek was rest, this the business And to to was it. as you tools, flexibility, a that rest this your most where on has missing thinking of you giving platform portion solution as to you've already always to to of one it at our that about was as

see we an this roadmap hindrance. of that clearly a yes, as so And rather accelerant than

Scott Berg

a about obviously Got of René or them you etcetera. taking firms be platform the partners? from these others large you solutions addition customers And your currently that to selling follow think through and fun on a chunk AP watch. then current, maybe In institutions, of accounting sell? do acquire Wish financial How it's it'll payment a and to perspective, partners, Intuit, those like customers, and your you lot it, whether you through luck it? up

René Lacerte

growth of a it's strategy, part super We talk have you. the to our on great It's right. to Yes, Scott platform. always customers to a important want first

more to we services Next, products. want sell and more them and

in excited do is it. all they do choose to and direct sell partner us financial to we're customer to we're or partner, And or up going when want accountant, name work an customer to that But a it'll allows like that customers fun hard way are and we execute think be having the to a operations so the idea so that's this. that. to want about be want through, that financial throughout be a going this lot see build critical. through, stop don't a digital to think to of institution to we've what for We platform partners a think whether they pretty and transformation about the one it's part that going shop, one I your talking to this be solution going going of It's wave to partners And a been to of that channels. the our

Scott Berg

looking Good forward luck. Thanks I'm to watching this one. again.

René Lacerte

Thank you, Scott.

Operator

from a from of comes Samad question line next Jefferies. Samana Your

Your open. is line

Samad Samana

John, you. start Congrats my quarter. questions. a on thanks for Hi, to maybe afternoon for strong one off and good very taking

maybe to you think the Bill.com get when we As back base seeing as them at the back starts the look are to customer, you customer pre And to reopen. typical world bill transaction customer still versus to should aggregate COVID an bifurcate, is was, levels basis? on Or, a we volume segment behind? lagging of how volume kind back maybe which what levels normal

John Rettig

product, that, or platform. And because we of ease do mode, things we consolidation simpler Samad. little basis per across a say overall, pre-COVID both customer pandemic of the levels. or throughout volume I'd that by very think per our customer, the than returned in customers pre to payments allow like driven a to this continued see one Thanks bit the number transaction, payment TPV. metrics increasingly evolve look that's that, you recent is pandemic of quarter our transactions with strong. strong customer just TPV continues just it per which batch is near the seen to to we've we it has Yes, a at And on be most today, And question. actually Great if most lower per total levels.

tells at business. back by definitely the to base that, we're customer least our is And we're getting us trends encouraged it of seeing. most So that

Samad Samana

to versus majority providers maybe with sources, heard some their up Chase all of end and MX the Divvy correctly, about think think trying remember I they maybe its one about then Great, institution financial and I'd customers, customers that where just they corporate marry I builds on Divvy. thinking card these relationships of well If how partners, getting like together. the and and from

René Lacerte

start have I'll Blake I'll Sure, few add and comments. a in then

team, team me working they partnering They So obviously is similar. obviously, one things the do. is very They've excited capabilities. like that sales got of motion that capabilities. marketing have And the inside have, Divvy the about actually we go-to-market with digital

and to a opportunity than and partners. the partner the all more an accounts to that, are closed junior talk institutions. that's us And believe sell to to for financial we there's ours. something the have chance we'll of, capabilities through we get But, their sell deal once into that kind the Now on work

Blake Murray

actually working that pieces amount able to the banks they platform we me software the comfortable invested them is of channel deal and with both time got resources and alike, build with one in a large significant traditionally small channel, accounting was and bank that this with that the providing had themselves. of a the specifically hadn't in and been Yes,

each be a work should to both Bill.com in and continue And able with forward. going to think other, Divvy, that way we reinforce healthy so I partners and we

Samad Samana

to on great hear. success And quarter. That's again, the Congrats, of the

René Lacerte

Samad. Thanks,

Operator

Your Brian next question comes of from Schwartz from line a Oppenheimer.

Your line is open.

Chad Schoening

is Schoening great on execution really on for here. quarter Brian, this strong Chad congrats another Hi,

wanted virtual Just go one to I for me, card, if may. I to back

on on I’m be called kind factors to enablement over you've couldn’t to market of wondering just it curious Just XX% Just rate success network? the this why that And of Divvy readiness given long technology of kind penetration than are higher time. bound? Is out that beyond X% term? just XX% gating curious, that one the thing? or the upper What moving

René Lacerte

can spend, different for in of be Yes, make manage AP is to and platform easiest their types on all that whichever customers their pay our AP them. is able we to lots payments. support suppliers of and, And focus the sure

card the the payments the networks, MasterCard the when from data our we So at we accepting how supplier at us are XX%. intersects our that's the of, looking that customers, side, with merchants that card at for X% and based is, look Visa see AP and cross looking section of virtual and that on to what on and payments

doing going Blake was as out, the the, the come the Bill that really all in. that in but executing, a I that, people that type TNA bill, the from term what the in think sometimes and say used that without kind powerful There road, card. invoices right. of Divvy are But obviously on the spending a that's that's businesses services it's spend supports. virtual of, are the they're on So proactive just marketing as payments out earlier this would whether, Divvy I is, program What's that is out with

our continue region transactions, them. us expand and to able to to those And be allows to monetize transactions as so this we capture

that card the ARPU a program door the change times that to variable bring arm, they lot TPV card the we going but So Like are of get opportunity. black this really the is TPV we for because X% all doesn't have payables in, for for Divvy that virtual said XX% said, a of we've out that spend. on the Bill.com traditional is does of multiple it the

business. opportunity interesting, an really be and our it'll So customers exciting our for

Chad Schoening

clear. Got you. Thank it very

René Lacerte

Thank you.

Operator

Your Blair. next line question Napoli comes from William the Robert of from

Your line is open.

Robert Napoli

has XX% of of company on that successful spend correct? one getting? the think really card. the of Is Divvy you been what Blake, base on off Thank good company. Blake your or and I really quarter my for take can exciting quarter customer Congratulations Maybe credit afternoon. is the, you, and list on for that about M&A on spend guess high a spend. acquiring talked the strong a a are percentage René I very two. and the a I But the getting percentage question

Blake Murray

how share that question. That's and wallet a about it's is driven. really good think we driving with When driving think our of customers software spend you

again, they're utility, flywheel powerful Our provide time them entire and a to control. both spending and money delights And has provides focus incredible sure and created them really saving that is making software effect of that behaviors. that in

once we inside two and them with program of program to in features the because are are of Again, they a features. Divvy, from providing each control they conjunction other. saving their different budgeting inextricable dominant traditionally, adopt variety just the with cost card work ecosystem card So their corporate the software,

towards as so they their And predominant then program. using tend card Divvy to lean

Robert Napoli

virtually, XXX% card on of close spending They're to the putting their there.

Blake Murray

outliers. And number. high there's and business. of comfortable But exact Divvy. card program. industry majority incredibly Yes, the business from percent goes program. exclusive customers always of the it wallet But as different outliers are an their use size of not their giving Obviously, exclusive an I'm share for it most through is of

René Lacerte

comes just majority And It's invoices that help to And has just vast Divvy that in, happens there's other solved. XX% just a spend in, the the team that XX% that's hey, right? spend Bob, of clarify, process. right. And payables the the of come the Right. outside to that's then that

I And so place the their homerun, in and think Divvy with of all that's that a business place. because the one spend can there's Bill.com combination now have one

Robert Napoli

Is that more Brett's? with companies focused? you they're just Abraxas have is primary an tech Express? SMB know Or is competitors? like bases? it your it companies. then large are on very or focused client American But And it who overlap where I JPMorgan do [ph] Amex like, like Right? And

René Lacerte

away, spending Yes, small really It's and American midsize. it's By are close. which processes. competitor they serve by paper And manual still great tech pain businesses although question. manual business and the our expense improving in have enabled, largest middle spreadsheets we not driven processes. that far And their and is is and distinct an point operations, to eye is this and management, a

Robert Napoli

congratulations. Great, thank you. And exciting. Very

the combination. to forward Looking

René Lacerte

you, Thank Bob.

Operator

have we your one for time comes And line VanVliet the question. from final of more question And Matt BTIG. from

Your is line open.

Matt VanVliet

legacy on the business, Maybe taking on deal. the will, you Yes, first Congrats thanks question. for financial partnerships. of if sort on the the

sort small of the yet little focus? Just of new pipeline expanding commercial the others What are more at a some the is? both business on [Ph], you with your a have partnerships of of launched having appetite those partnership additional conversations curious, of what, sort one here, you partners larger and as the kind what you've of are for FIIS that

René Lacerte

you, Thank Matt. Yes.

will, and thing payments, processes like, suffering, the challenge you They're and lack their really large digital, make the partners, for been ones saw on enablement. put it that's about a how a businesses, especially is financial has their COVID I banks So that for paper to those institutions everywhere. spotlight us interesting how really businesses these are they do of if and and process manual

combine we of so really about what together. from is we one reasons what it seen new great partners the can we're have existing continued from And to enable our that opportunity, more interest and do the the and there's we, our we platform partners, is, interest, It's, well. be transaction that an financial think is institutions excited into capability expand with able to Divvy as about as

of is levels it's lots it's for the all happening our stuff So, seen we've transformation, us go real, that at and of what digital to out, channels. figure but,

Matt VanVliet

what of there, really out sort pushing Maybe your how just or it. homegrown. what you around was a of of bit, up that bit something advocate about captive to something instead Divvy build little Bill.com on And attempt of capabilities the trying that build this just build a pain to kind the platform, on you are sort and drastic was level time the the taking the already to were here there build thoughts little sort a then, that to out the of of, I to rationale, play is that customers management, difficult a have, more what, in following tried guess, that what of given jumpstarts such was, much of

René Lacerte

and to buy is see said, market something can for team fast, us, definitely we the that a fun chance had is growing you we markets, important. highly that lot management And add was know internal be together, these of of be you adding build have the And, what the Divvy working this at decision. going rate. well, to our versus takes building XXX% to just platform the conclude that I'll and been market the team, types is a rather just it growing built with and got API Divvy platform so time, it looked he when to $XXX like, ons, And, super it's be fast. million expanding onto like growth is you market rate run look that able to at year-over-year, our This platform. time know, that's We our driven.

ways integrate technology. lots have to of We the

the customers, we're look to excited to And to about be can we so and going what's we that impact super them excited to And here, to serve we going their that. And we're fastest? lives? about we're the always going it have have weren't this can doing how for how say decision build And it. we time, best biggest on this was

Matt VanVliet

you, Thank Congrats.

René Lacerte

Thank you, Matt.

Operator

And of I'd over And this remarks. our question-and-answer Bill.com concludes like closing René to Lacerte, session. back turn to the CEO call for

René Lacerte

time will here incredible close not work our Thank for questions without would I today thanking by I all partners. thank with. customers, to employees, great today. We and everyone stakeholders you. the we want your the be

everybody. good Have thank day, So you. a

Operator

Ladies participating. and for concludes conference gentlemen, you today's Thank call. this

now may disconnect. You

Bill.com (BILL) 7 May 212021 Q3 Earnings call transcript