BILL - Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon. Thank you for attending the Bill.com's Fourth Quarter Fiscal Year 2022 Earnings Conference Call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the conference over to your host, Karen Sansot with Bill.com. Thank you.

proceed. may You

Karen Sansot

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

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

associated statements, GAAP performance September exclude which disclosures we periodic release for recent reports the the on the company's today times and report results, X, our to of during press to Please discussion is text reconciliation to including number. discussed organic our and SEC, XXXX, organic press are release our the help on and understand of please with refer available risk to filed to any both a GAAP section and will June refer our financial this today performance. filed a non-GAAP, we Form quarterly InvoiceXgo, measures. Divvy unless the SEC non-GAAP in update discuss listeners with any X, and standalone the will annual XXXX The on refer issued to For obligation factors measure At respectively, most regarding to forward-looking stated these call, Form and our website. or XX-K today's On acquired on we call, which and that report Relations non-revenue Investor disclaim measures. figures with the XX-Q financial financial today's additional of non-GAAP the We GAAP forward-looking statements.

Now, Rene. Rene? to I'll call turn the over

Rene Lacerte

today Thank mid-market our Thank your extended XXXX entered and you, We year new customers countries. platform going for hope joining is solution summer was us building Karen. serving afternoon, significantly partnerships Fiscal in XXX than global from companies. I expanded businesses and strategic well. a to ranging you and customer for base, everyone. proprietors sole reach a serving transformative began Good more We Bill.com. our

on We billion fiscal the that originated We In in to of used year. us tremendous are that prior in to automate solutions better number and to flow. Xx businesses opportunity used manage or in and more than More electronic businesses an financial their cash well-positioned capitalize $XXX our faster, through the the payments our get market million network have front XXXX, payment received operations, platform. us. members grew than their managed paid our of XXX,XXX X.X

the strategic as of Our growth acquisitions well organic initiatives, and our was Divvy by as driven InvoiceXgo.

from financial grew revenue significantly and organic Bill.com’s from management our XX% full year-over-year XXX% the XXX% revenue of expectations. year exceeded spend fiscal increased a year, increase ago. was year-over-year. our solution we an million, core than revenue more For and $XXX Total expense

X expanded we year-over-year. In our up gross points margin non-GAAP to percentage XX%, addition to top line growth,

demand created result year, $XX go-to-market as ecosystem. loss of fiscal year a throughout the lower million on the that provides Our the of us the value of fiscal of a approach was our XXXX. non-GAAP The net very efficiency to our growth XX% a basis momentum non-GAAP disciplined and positions profitable is solid XXXX our platform healthy at fiscal the estimate and This the in year. our than execution. testament in start to be We for to we experienced

growth base and retention patterns, the customer of environment started Toward to macro saw net in fourth and Bill.com meaningfully. advertising. especially Organic end our quarter, Our see categories rates dollar customer we the signals of record like both impacting the based expanded spend discretionary retention

use XX are As businesses environment, control. A to companies while the of to simulators. transform how scale, operations. $XX aboutGOLF, based ecosystem becomes There developer million we its and macro paper than by great more help more processes. and the majority are financial example With million of more of is do our visibility enabling of a small our premium in that U.S. we their businesses help businesses well-positioned manual and millions valuable react we the believe less, still particularly platform these SMBs and globally platform to succeed golf increasing

chain platform platform, Spend strong taking Prior of competitive to assess attach enables XX and into forecasts. ecosystem checks, provides more write Director Ashlee us the bring solutions more Finance Our and enable Bill.com’s out accounting institutions, partners, to Bill.com seal The to hours us financials, SMBs. envelopes, our firm to dedicated serve able have clients' to goal paper-based pay with cash services, to trusted “we and to on practices to more unique value in Top gives the them hundreds and month. X,XXX as and powerful processes our a week Bill.com, flow, businesses work our better our financial U.S. the our added go to Miller, Excellence got navigate said, is spend manual internal accountants, our We of continuing Flores, really to firms many of AP instead visibility accounting their team firms build we and to enables a An efficiently add how stamps, bills on bookkeeping Bill.com seamlessly. collaborate time align AP Consulting and financial is enabling accounting of Management analyze XX confidence to Accounting more operations. constraints.” distributed our accounting advantage. risk, automate building more example Armanino, than our of said, time clients. of best consuming, with time up now We Leveraging have was us me use More Partner staff platform with and activities, use center most our accountants each and to David small Bill.com. focus teams of around freeing market clients value of and supply a which less and share “Bill.com businesses a routine process combination

more our capabilities, cost expanding expands Top white XX network their opportunities provides efficient our flywheel] With solution U.S. This driving have increase their always for payment with our [ph]. data continue institutions simplifies better experiences time financial inflationary encourages solutions in challenges. faster and Now data of and we savings, monetization. a evolve members, adoption. bill needs customer to help label turn banks adoption we grows platform partnerships and The we of transactions, More them businesses turned insights.” had that and an six In environment, the learning part which deflationary workflow enable [organic further as a which AI with set, subscribers in incremental serves better for network to can Businesses to financial powers and is delivering these our developed better machine macro institutions a more our face at more rate, Bill.com asset. tool platform help invoicing that drive financial our the

time our the objectives. but fully evolving management commitment take we AI we initial I building experience AP accomplishments. Before completed three want these have our offerings enhance and card, of payment balance priorities, We integration seriously savings. our year, At to We start the our of launched Divvy the fiscal organization. expand XXXX on continually user our and set capabilities, strategic all fiscal extend transfer, lay and giving of and customers of our our were through companies separate We out integrate priorities XXXX platform our more all into I employees and to using connected, our automated monetization, talk single platform reach solution, Bill.com payback a the InvoiceXgo, and workflows, about partners. integrated a our and instant more spend experience our accomplished

partner significantly, for management for We receive agreement it We spend add wallet added on also white with label of exclusive existing share vendors, new experience, expense financial to entered We to and a we making their Most increased serve launched enhanced platform America improve and and the payments. bills, SMB card with their and to partners. be initiate institution users CPA.com move easier our new solutions. corporate and our with Bank mobile partners an customers and

and navigation, single unified Now feel, a consolidated priority turning through is first delivered consistent look insights platform to to a comprehensive fiscal with and seamless objectives, XXXX develop business dashboard. experience a our

our well as solutions ecosystem our is as by scale more acquiring ones. to priority second Our new of offering to partners, our further current platform

third to Our drive innovation continue our and payment priority solutions. of is adoption to

of We overarching of the leverage payment adoption profitability accounts, our drive Underpinning includes [indiscernible] initiatives advance to sales, our we business which non-GAAP will priorities, for fiscal financial institutions an deliver to further managing and XXXX. direct have these ecosystem, our enablement suite. focus to all on

us at millions essential for the people Bill.com SMBs. building of operations on focused financial All X,XXX now platform are of strong

Product of the platforms share Operating team helping is Sofya passion having leading that, team a Chief leader to was Our excited excellent at as global Officer, Officer. by the we Intuit. that Chief Prior Irana and product product addition to extensive success leadership shared for Irana Wasti executive as experience expanded for teams, SMBs at with built with I'm an driven SMBs. a you with Pogreb Typeform. and has GoDaddy she

as will management she will to of Senior be the at at brings join it growth. customer responsibility these Prior and a Americas. operations and off executives fintech I PayPal teams through through and taking who strategy be our leading transition Officer simple is a for to experience from policy our mission Sofya to across tremendous led product both with a SMBs Bill.com couldn't and sharing to smooth has connect at Irana. Bora Chung, for happier Chief period and do Operating time Bora risk NEXT TrueAccord. accomplished over Irana experience management retiring. to that, hand Insurance including Executive business. companies, was have make a She continue of extensive

four her Bill.com during many year of appreciative Bora's tenure. are us at contributions All of deeply

board able into payments Tina or risk brings fintech We member, In Tina global also year. new transformational financial our roles over Board Chase, and management. being Citibank, to we closing, great expertise about recently advised expertise industry the Chan held are of XX Express, Reich, at a her services years we had having American welcomed startups, and unique executive and excited and to tap

multi-year both revenue significant for continue and SMBs plan is and the TAM profitability. haul, we to growth value Our creating in for driving invest long to

focused We on finance future laser are businesses that of can flourish. all so automating the

We we are our and in us. they to customers, continue and grateful trust thank them employees, place the journey on this partners to for

to turn the about I'll in call over to John talk our more quarter. Now, detail

John Rettig

Today, first quarter our fiscal of results Rene. fiscal our outlook an and full XXXX. and XXXX discuss I'll the Thanks, financial provide year fourth for overview quarter fiscal

today's XXX% revenue significantly the million, revenue, financial revenue] year-over-year most increased directly refer As XX% was our margin release QX we go XXX the gross discussion significant was in non-GAAP to market which non-GAAP transaction and a and million platform, exceeding strong revenue expectations. with includes loss integration quarter, results all our vigilant press to the reflecting acquisitions. $X.XX our of expenses. financial includes delivered from Core margin and for transaction fiscal and net margin strong measures. core net per gross year-over-year. during a loss growth was comparable earnings for net Fed driven year-over-year. gross GAAP [Total estimated making Total X.X revenue our to We Please XX.X% [ph] to our the subscription cost XX% two growth. the the share increases. non-GAAP XXX% fees, performance grew margin optimization we've investments our operating and sequential delivered range, and improvements, and our Organic reflecting measure. ecosystem, share, well gross while reconciliation for QX reminder, financial was revenue, in tables employed. quarter, mix per and non-GAAP also XXXX, by non-GAAP strategies managing Non-GAAP approach funds recent In margin payment above Non-GAAP showing rate non-GAAP

customer model strong We business expanding based and continue a efficient with retention, short retention, operate to dollar payback customer period. net an revenue cost acquisition and acquisition

in outlook, here so, we're of fiscal And to our progress discuss scaling and business XXXX. when as non-GAAP of profitable pleased show to I become the our we the plan our strength

metrics. update turning an on key Now to our

partners. year-end the InvoiceXgo our organic new XXX,XXX customers from in updates. new adds This institution includes XX,XXX the fourth FI is earnings channels spending quarter customer We the Net We've on delivered partners. from platform adds solutions. this significantly metrics our customers, businesses improving also using and and XXX,XXX of added certain our these while our beyond call, Of XX,XXX fiscal on in I'll accounting quarter. ended As scaled subscribers. financial Divvy quarterly our with economics. showed provide quarter continued year, or businesses, the net disclosures last FI momentum customer XXX,XXX net the additional We Bill.com XX,XXX in we elevated acquisition direct regular are customers, and acquisition another Bill.com

platform time our of payback is quarters, period with organic retention IPO. averaged improvement resulted For customers, in five four value this the quarters and resonating The from expansion Bill.com improving customers XXXX, of and trends. at our has during an fiscal acquired our

customer channel, end retention as QX up excludes always FI as XX% XXXX. XX% of increased rate, our organic from the XXXX, customers annual end QX of of to which from Our the at

dollar in of large our revenue the XXX% from increase as rate expanded of of by improvement platform. payments our adoption annual XXXX, driven as of based XXXX. critical QX and QX part Our to This success an was stickiness retention mission XXX% fiscal driving variable price net

friction ago. fiscal increase XXXX, we network of a members, more X.X eliminate members of and end clients subscribers their opportunity network than as of as future our to the million size for the compared an to to funnel important indicator have the a X.X reported and of grew create suppliers, customer between of well acquisition. XX%, As to our we million an The year is

Bill.com the during This in growth partners businesses, We a an billion volume billion approximately basis payment volume year-over-year on billion XX% sequentially QX, XXX% increased which QX. from X% Bill.com in TPV XX.X customer organic per year-over-year XX% volume total in is quarter. of payments. TPV, FI spending $XX.X represented from and customers, of Divvy X.X increase to card on year-over-year. excluding our in was and managed and Moving XX% transaction representing payment includes

trend August. starting this to mentioned, rates moderate in TPV and June, continued Rene growth early July see As began into we and

of provides While is continue business value it customer macroenvironment SMBs. engagement, our the see acquisition, to we as very the appears that platform strong influencing spend, retention for evidence and

variable virtual progress TPV. X.X% have We substantial and payment were payments cross Bill.com border price TPV QX, made driving X.X% of of adoption organic products. totaled cards In organic of Bill.com

fourth Foreign currency payments represented XX% of total cross border volume in quarter. the

Bill.com TPV payment total QX, up This variable consolidated XX% card FI the instant by For of payment virtual card, transactions, volume, Divvy foreign volume. pay currency excluding transfer, from price and card payments, payments channel. made includes

type. adoption on variety As for a overall we've shared previously, payment and given we of payment customers is focus offer solutions our driving electronic versus our optimizing payment any

fiscal slightly which margin than a were credit the Regarding card we take a lower pleased improvements card payments driven higher by year ago. has and generated basis were processed points losses. exiting margins take gross QX, We're solution, for of through with our expansion than payments, XXXX been in and faster anticipated rate approximately rate XXX spend they management

days. a charge And the spend payment the cycle management that approximately a credit leverages balances. As revolving balance to carry card be customers reminder, is a opposed paid the program solution each XX Divvy where month to average as requires

as payments we these approximately volumes, we platform, QX. preceding were the between and payments, within months. same transaction payments which XX.X to vendor payments growth. initiated three organic define on million XX% Moving This on XX% the repeat processed in includes year-over-year the organic million XX.X transactions, reflecting Bill.com subscriber Of

up channel, last last from and financial XX the transactions in institution average XX the year quarter. Bill.com quarter, customers Excluding

X.X also card During we the million quarter, Divvy transactions. processed

other QX I our Before contract these adds. the channel the differ in revenue reflected RPOs. is remaining tied term, financial minimums, RPOs part want to as FI on of revenue additional the term discussing over our institution channels. some expected customer customer in about our to results, obligations or long-term our than partners We rather FI performance dynamics from provide the insight near under new based earn adoption since financial to In contractual the from

other who businesses represented wholesale as of and the channel motions In offer XXXX, our the market and for the responsible adopt fees. consistent fees. generated banks. other other In with the channels. The X% these this with are approximately and contribution return, being revenue core our label this our go at well platform between rates as partners transaction our channel fiscal Net-net, marketing, white revenue majority subscription difference key we our FIs on to of FI FIs vast sales that margin subscription customer for support is

review up revenue an XXX.X revenue, year ago. XXX% results. ad strong Total million, QX XXX% million, I'll fees, growth transaction year-over-year. increase across representing channels was Bill.com was consists Core from XX% which Organic of increased adoption payment million, our reported our and customer and to year-over-year, XXX.X due revenue products. Now, of valorem demand was of core subscription XXX.X of a

recent the was year-over-year. of and XX% revenue year-over-year. by given to exceeded X.X revenue increases. and million, core transaction XXX% was year-over-year, revenue million, In million TPV grew our on the inclusion year-over-year. XX.X our to management Bill.com increased which our Organic more Bill.com Float subscribers. revenue the Float transaction expectations Fed organic revenue in Bill.com core organic addition funds revenue XX% revenue spend solution due revenue of increased year-over-year. spend stream, customers year-over-year. XX% growth than growth XX.X customer our strength, of Subscription totaled increased year-over-year, organic organic and Transaction revenue increasing XXX.X increase increased an of revenue XX% expense ARPU, excluding up XXX% adoption valorem to XXX% growing subscription was products, rate to driven magnitude our from ad InvoiceXgo up base million, Divvy, QX. FI for

basis yield in Our XX the was points quarter.

our for was revenue margin gross economics. transaction improving operating Turning to higher XX.X%, non-GAAP mix and variable of up QX, margin by a four fee gross and transaction results year-over-year, driven points

operating an increase range with addition manage XXX.X expense increased very short-term, our related our expanding million, to innovation reminder, In XX% adoption various gross Non-GAAP in a solution. expenses management XX% of expenses offerings Sales to our and we have associated be previously market investments a margin non-GAAP our with were Non-GAAP expanded from to the of a acquisitions we and R&D platform of QX. marketing slightly we payment enhancing of As expect operating mix. favorable product have to and the payment are to million. a to portfolio currently that above We in recent discussed. we that integrating margins XX million range and primarily was capabilities. spend go initiatives rewards and loss expenses due X.X stages

negative from operating non-GAAP negative Our improvement X%, was last year. X% margin an

X.X net weighted non-GAAP based Our a loss $X.XX million share per on was net shares XXX.X of loss outstanding. or basic million,

than Our given non-GAAP performance revenue and managing our our net approach was our significantly rigorous to expectations expenses. better loss

cash, the Moving equivalents sheet, end the of short-term quarter-over-quarter. X.X investments at cash billion, on and balance to flat were QX

us capabilities, extend go our to our platform, to in and market continue our market We enabling well leadership. invest be to capitalized expand

in had balance up June XX, of XX funds As billion QX, on from end driven XXXX, X.X strong of TPV. sheet, by our the million we customer

environment year full the relates for XXXX, our to fiscal to business. on the and like current as to fiscal outlook our first quarter shifting it our macro financial views address I'd Before

cash to better Looking we're operations spend ahead, excited pursuing transform and and businesses we large the their their financial global flow. are manage about opportunity help

businesses scale solutions. drive Our our and while and customer efficiency, help economic need create platform, to them challenging ecosystem, and and go Entering acquisition automate a solutions increasing to with continue strong engagement visibility market environment, control. to

early invest investment of to presents continue year, the outlook the bias ahead spend to the react late as environment Our trends throughout us will fiscal capture approach large our is leverage disciplined and customers to The in XXXX that and we grow. anticipates while saw external exercising numerous QX allow drive us current market operating to quarter. and the to opportunity this uncertainties factors similar macro will we our to emerging near-term temper

from no We uncertain assumes material we customer the credit is customer are losses. by outlook awareness an have. multiple to expansion that acquisition rising in Our monetization the or retention, tailwinds changes These significant environment the given and cloud by to which operations payment believe succeed trends the adopting in interest near-term positioned the include solutions. we the driver environment, growing revenue, rate exists, revenue the very largest well their of transform margin and opportunity potential SMBs contribution about financial

proposition regardless macro the situation. value Our of SMBs with resonates

XX% QX, to XXX Turning of outlook our total million, XX% to million to range XXX expect we in our reflects which for be fiscal revenue to growth. the year-over-year

expect points. our million on XX yield revenue to funds approximately will We float FBO assumes QX, basis XXX be be approximately in which

X.X On million, the income count the income we a report line, based the non-GAAP to for outstanding. expect net average in to weighted share million, X range of share shares bottom on XXX.X of net to million of $X.XX per QX, diluted diluted range and in non-GAAP $X.XX

QX, for other million X.X other we of income addition, to be expenses. In net expect

total For we million. fiscal range be of XXX.X XXXX, to to in XXX.X million the revenue expect

the a funds in higher revenue payment float in clearing. and to which based XXXX, on in assumes on transactions FBO expect is in yield funds be year approximately funds X% invested mix for support XX deposit and approximately yielding of of demand fiscal a securities million We accounts held of

million average a We non-GAAP expect to count of XX.X million, million per $X.XX, shares XX.X the share $X.XX to report share range to diluted non-GAAP outstanding. weighted in XXXX for of income net of on fiscal net income XXX and based

we XXXX, fiscal other expenses. for addition other income of net expect be XX to In million,

to cash per reiterate opportunity to and there that quarter X believe financial of per a million approximately quarter. In X their flows, to capital million million we operations. be I to manage us closing, compensation greenfield their significant approximately businesses We and of expect stock-based expenses transform XX ahead is expenditures millions help want of

uniquely position de opportunity companies the us positions take and rigor This for to platform sole from mid-market now financial scale XXXX. Operator, transition firms. increasing operations efficient be broad execution facto to together profitable distribution capabilities, to a our fiscal Our non-GAAP model ranging to proprietors questions. in to business company with ready diverse we're platform and be ecosystem, us

Operator

first line of [Operator is Deutsche Instructions] question The Bryan Keane the from with Bank.

You may proceed.

Bryan Keane

ask upfront. quarter two on guys. questions Hi, outlook. and I'll the my Congrats

now talked about a non-discretionary to little spend, breakout softness a bit of versus way Is by we any services? a spend are for some year, has out margin clients in seeing You that And then in advertising. been or secondly, especially maybe that spend maybe adjusted turning trajectory margin of non-GAAP discretionary break profitable there there any think Thanks. clients for for EBITDA about we long-term about or the thought margins?

Rene Lacerte

of always, This of would end is the TPV you, out kind SMBs was And we macroenvironment, always something at quarter. quarter the base particular it companies. the that Thank customers. but is the larger to And growth of is the say hard across called we a broad the around beginning is have what of the all And to nuance customers. moderating base what read, the we broad mid-market in of of Brian. this through way customers really

the activities daily do And it's, of that kind business environment a business discretionary nuance so, think – that's so have they we because basis. spend, about when many in they on

see we would for growth forward there. I so, grow us, continuing to say from strong going and And the

John Rettig

Maybe Bryan. margin I'll take the long-term question,

and in ahead. with a non-GAAP done a too We're the expecting future, the we've lot but expecting we're dollars made yet. so happy We very We'll not of news distant with momentum, that business and revenue yet. roll haven't this billion explicitly progress the longer-term profitability longer year. targets out in out targets haven't good nearing And term scaling laid

Bryan Keane

taking for the Great. Thanks questions.

Rene Lacerte

Thank you.

Operator

next line of the Sills America. is with Brad you. Thank from of question Bank The

proceed. may You

Brad Sills

congratulations year Great. the here. that outlook the on you've question for are thanks and some in what end near-term? on other I and of there been nice guys different I'll the Hey, assuming categories change TPV. any on a Obviously, real specific in and very rationale, impact you ask a gives way. the of guess softening slightly that you're macro the Outside doesn't advertising, there noticing

Rene Lacerte

healthy XX%. was year-over-year, quarter-to-quarter, of Hey, voice. than stronger TPV was the We've hear had that. TPV throughout your TPV Good Yes. XX% Brad. demand great quarter. customer bill The We quarter Divvy to growth the growth growth across saw growth core was the

tailwinds those talked so, And environment, look and we do are tailwinds really supporting of a we to overall that about macro really we've get business when number before. the see things at the

So, we've the would back first have pocket, the for customers. the and we kind need your that back have to and about and of desire the capabilities in office ability talked remote financial pandemic for delivered the our been which

their The other deflationary to about have take have. only macro businesses manage business And you're that inflationary the to thing on anywhere impact is your financial The that the need and be that for one, of business. digital and software in create environment is advantage be across is, pure to transformation going we've talked new and times, that efficiencies is of the in, this to third operations. kind just desire we're more able which your kind of

our customers more SMB and their across with to good we that their efficient be been one more serve more really drive that's we've from really the to about. ability and technology so, day vendors. and to customers And engagement their built And feel employees usage something

that spend So, starting out wanted perspective. macro level we the to to the really just call customer, did rate perspective, we TPV from see from growth a moderate a high larger

Brad Sills

please. I Thanks if may, Rene. that, One for more

to at or network seeing the of customers? in to progress we channel made in we the hold you've your Thank there? see InvoiceXgo, should effect now and might flywheel take point payables integrating much. really more receivables that combination the the growth expect With you to, momentum that so you're of kind bringing customers, start that Are of we

Rene Lacerte

Brad. Thank you,

the integrated to fully year about, we company's the unified priorities the develop We of talked organizational to key the priorities think structure really is have platform. one continue unified across timeframe, a we in with to call, one QX February, been – for the March It's – I platform. drive that

to dashboard manage operations. all common one have customers their So, financial of

would and we so, happens. are that. building that beginning say, progress of the year, more I throughout And as we'll stages the And the, fiscal you make in update

Brad Sills

to Great Rene. Thanks hear.

Rene Lacerte

Thank you, Brad.

Operator

Darrin Thank is from question the you. Research. The Wolfe Peller of with line next

You may proceed.

Darrin Peller

Hey, on thanks guys and great these job results.

obviously the given and swing Let think there's ton to and how are try outlook, business, the me little bit the output When a in we there that understand – of guidance. could the many moving just assumptions there's parts guidance of more. a

of if assumptions the around guess maybe that the I cross-sell InvoiceXgo, of love us go of So, any stop can and is I any with just probably really be and help assumptions understand you you what there. to made on on, some perhaps inputs around Divvy, Divvy variables. also? maybe versus made would And I’ll you kind Bill the on color hear main going, Bill.com more We can great? progress but how

John Rettig

Sure. are there right, you're of parts. moving Thanks, a Darrin. Good question. lot And

large base continued behaviors. of to visibility is do call, repeat spend be a One and have very, the and about the We into benefits transaction of that and our very customer lot high. talked repeat activities very the the have patterns earlier that we of scale we rates in

helpful is as visibility our we assumptions. So pin that down

it's throughout Divvy the say is that a or the the with Divvy, on some months spend I'd softness customers it's couple into And last continues is – the that given the and manage visibility creates they the the environment. base, have we're regardless that and card as in just customer spend. call amongst to We I both And – variable, operate assuming year not spend a number, as Divvy that have And Bill, visibility external so a it would businesses. larger Bill we well. and absolute across the slightly point the management patterns moderation not it's way spend integrated companies solution the of the of us. of main It's like out tool focused spending for good high we're

about that. So, we feel good

have We with probably activities. made FY progress in anticipated we cross-sell faster have some than XXXX, the would of

Divvy platforms on even tighter. our efforts as focus about we I who in good so in think the Bill customers Divvy the XXXX, Bill.com directions. help with solution, we and that's think spend had and cross-selling We [X,XXX] will both FY going that additional momentum customers management adopted and into [ph] integrating

Darrin Peller

That's really in was fit heard adds quickly core versus how much wasn't new mean, sure the the quarter, I a if Thanks. question, adds can that of Bill mechanical this time in around? if I I the John. just I FI helpful, just

John Rettig

look of excluding channel. Yes, contribution excluding I we had ads about net We we adds financial core business, FY had that the second X,XXX to all out for the XX,XXX the sort we, of as Bill, the, in the excluding so is what good net quarter. range think highest over FI Bill adds would X,XXX placeholder. from describe, in the quarter channel, ever. X,XXX new the It's XX.X. a XXXX, Last our FI And was new probably institution

Darrin Peller

guys. good. very Thanks Okay,

John Rettig

you. Thank

Operator

next you. line Thank with of The the is question from Josh KeyBanc. Beck

You may proceed.

Josh Beck

you the kind layer taking also some of I macro Thank on the of for question. to, impact. Yes, wanted

made critical some payback and and one very period deflationary So, right now. Rene certainly of SMBs really in had made Bill was comments about comments improvement to obviously that's the we the

when So, it months, the Are you're look in notable the there held has variable? that to at payback with of recent any steady? seeing changes, respect you kind that

Rene Lacerte

Josh. you, Thank Yes.

As that The the they payment and dollar an the our whether actually retention that or or net based most, up to tapped a ecosystem accountant ability drive way customers, with that partners you is we've products distribution are, reach trust us financial the we which increasing help our talked of a broad where it's ecosystem very our to that know, SMBs and of see whether does ability better they drive it's usage into channel through continue institution, allows it. that that have end directly really drive to our numbers. kind our for value we opportunity combination we've payback number to, that of about businesses

to the our that All bring together improve goes attract of more customers platform. and ability help onto really

So, we've just working for building no trends been right It's specific it's us. now. years everything has been – for

Josh Beck

Any that in could think Are just on really cross the there up, year about of moving years? that to out? framework steepen last we stats adoption follow-up Okay. about and sense about of were shape very future a virtual, of adoption How the from we the it curve, factors That's we have pace should trended adoption to year. level forward? then pretty there adoption that's border think think when how that the certainly, very And good that of pace helpful. And this maybe curve so helpful.

John Rettig

suppliers. transactions experiences you would Yes. for to [ph], our the I we've know from to the to payments X.X% things XX%. international happy platform all of that we'll XX% been And a drive in effort create original the payment able the from proprietary we around our that at we've we card that [X.X% that had rate that And that adoption X.X%] takes and the where for with international we because to is to to had, TPV, their We from very continue that's It that. growing Thank years the we payment really so need been the that happy in as we're virtual backbone for we'll build. payments expect. this grow do at work in the this beginning, X.X% that to All could and we've done. FX say able to time to FX invest adoption. drive we're just a commitments been over look we're within penetration from made multiyear we've transfer and customers that's we've the proprietary continue that and drive international how of card we've the virtual better strategy to platform customer is in payments, success building

Josh Beck

Excellent. Thanks for that.

John Rettig

Thanks, Josh.

Operator

Thank with Bauch next the Andrew you. is Nikko. SMBC line The question from of

proceed. may You

Andrew Bauch

mentioned often color trying that on results get XXX but that one fairly Wanted and the nice remaining on is I revenue the over of investors my fiscal what kind on just comes of what's, bucket thinking in as you of within several quarters? a years. customers you lot – those And the are the those are of for the have appreciate understand so, remarks, kind couple Thanks that at and we set we years This could last layered fairly about level hit guys. that anticipate in minimums, performance going next in million as steady and that to to Hey, the guess, to taking from how with question prepared of I XXXX you're the far two this minimums here. to regards it another we remained provided obligations. question touch you

John Rettig

question, Thanks Andrew. for the

contractual number of approximately So, reflects minimum RPO XXX the commitments. the million

the So, we financial the of period adoption and targeted than think our in have To that way floor, both ceiling. with partners multi-year over institution drive better revenue than time, the work to we is the about not to subscription fees. a extent that initially upside transaction

years. out expectation total our the think much from for two I and over the revenue both that the will earn RPO spell how disclosures next

that, obviously We months disclosure haven't RPO signed or two XX to then as balance. of number those granular so. over term as in stable than ways provided last the minimums added RPO get moves the in you revenue RPO, more the out pretty earn institutions, been we we new comes but near It's as and that the financial said,

any that's revenue significant a contractually it's subject fairly stream so, movement guaranteed not And steady and quarter-to-quarter. to

Andrew Bauch

you're obviously we operating of Got has progression Obviously, in margins the lower of the a starting the first helpful. and throughout quarter in then year. ton business leverage a this at it. as think point it. It’s about And

the And one about to year like should where steps high-single-digits, way thinking Are margins we kind it's variables need the implying, consider? is this mid-single-digit so, that the in like throughout guide exiting the we I off there is the in, any sequential or year? you're the of guess range be

John Rettig

is – full-year. laid obviously, first and of there Well, quarter the all, out first we've the

some is stepping a as the but talked softer about the does the payment bit it December and we're that some at than quarter full-year, will margins, the in the year way and volume the business relates with business, our payment point we're We volumes, haven't that or back being obviously reflect in third the this That given little how and the estimates comfortable particularly to details, the ranges looking at the influence provided starting quarter. how evolve. quarterly seasonality we've we there about best March quarter,

Andrew Bauch

results. on it. Got another Congrats of nice set

John Rettig

Thank you.

Operator

with The you. Bracelin from is Thank Piper Sandler. question line next of the Brent

may proceed. You

Brent Bracelin

confidence of operations on is continue QX in what in this here net new customers resonating here? see ability environment? upside of visibility magnitude here clearly core growth was your The ads, to and slowdown guide a down the new another SMBs, midpoint me double-click on afternoon. in straight the kind seeing other What's SMB into of we're that second XX% automating new out land to of macro. adding companies quarter just Could with Good XX,XXX you customers? giving to, finance challenging you stood resonating What's suggests

Rene Lacerte

Great Brent. Hey, voice. to hear your

mid-market this now really industries been building adoption drive have to partners all XX years companies, and ecosystems. for sizes We across multiple amongst from to of SMBs platform the and all really smallest the

partnership Bank that we And SMBs so, ability continue serve is new to to announced to year. drive bank. is, America fiscal We that to of were success the the the have the our their with obviously during partnerships

provider] [future the spend with We be also bill expense to [ph] CPA.com announced their management, management. partnership across and payment

to helping the tailwinds demand we've the inflationary an and tools in all to These increased combine partnerships remotely, the able happening today, that awareness what's need the the tailwinds mentioned, I technical to to that the environment the that I your be on X,XXX financial that be visibility done are are with into give types need efficiency able would work anywhere. capabilities these have to able with on really run so, platform manage from front. them. definitely to able and for be to innovation of combination in of And operations be accounts payment drive to you drive us the need are say

create to all that of healthy continues that So, demand.

to about we good as to a more do the to massive market and going keep as can. and go working hard we we it's So, of have we're demand SMBs and in many plenty feel us front serve

Brent Bracelin

there. on into quarter, doubling color volumes the just basis wanted drove looks it more then going there Divvy Divvy And how helpful last some acceleration momentum the specifically, And benefits? like Divvy year? jumped all kind increasing? about Super than drove a from there? on there in you're meaningfully cross-sell sequential John, seeing Was what that? Is to adoption next just ask of should think the we that additional What

John Rettig

Yes. Brent. Thanks,

with strong The right. Divvy. You're momentum quite is

platform before, done they've their spend Bill. spend And visibility result automate really spend slightly is those the efforts large of at that from increased and mentioned business and a the both Divvy seeing is job we serving solution customer As they're that good and have spending capabilities the And businesses. spend or in customers help the average larger through solutions than management control. offering come

made Bill And small being customers feel businesses. the we good the So, versus I'd Bill still Divvy spending spend that's the then it's who've solution, Divvy adopted relatively the management so progress base that there. about contribution, really say

to we really in excited continued XXXX to beyond have we're cross-sell about continue fiscal and opportunity the So, adoption. drive that

Brent Bracelin

to Great color. you. Helpful see. Thank

Operator

you. Thank Jefferies. is with of Samad The Samana line next the question from

proceed. You may

Samad Samana

Hi. Good you start evening. for guidance. taking to with one John, Thanks on maybe questions. my the

figure past year you've comps] wrapping are [Visa In the kind given versus of fiscal on from assumptions, high XXXX, Divvy? are know especially level, terms Bill.com fiscal see ends up a around that revenue just thinking of [ph]? as the in fully the could Divvy, maybe I for we core what the what you for I assumptions the and

John Rettig

Yes. Thanks, Samad.

growth. So, growth, XX% so Bill, And planning year-over-year core for above XX% our of transaction organic Divvy float, combination subscription fees, organic and revenue excluding excluding I can in planning we're for Divvy, tell above were the direction, terms growth. of for you for

but guidance that, combined helps. that our businesses now, operating hopefully we're them obviously, as around color is the Beyond formal additional

Samad Samana

maybe And sets you helpful. would customers of you helpful own to have competitors have terms I question. and well later strong, different attracting to slowed I'm Very There's something think that macro. private curious of adds, right? or guys can I Bill. you're to volume there's that? really I of if are in the and more with In wanted net in do there's to KPIs capitalize smaller think, doing been are whether then, if and they're that you what the great, business ask [explaining] struggling may opportunistic about yet [ph] some their guys say on of TPV I a had even competitors, – struggles, your the accelerate if Rene, you're you your you be terms some doing quarter, be if of still can do while decisions something seeing

Rene Lacerte

Thanks, hard are Samad. markets, That's to the serving have. hard business. why have Yes. The SMBs and to we tricky the reach Pursuing and ecosystem SMB find. we

a Our SMBs. investment profitable philosophy long-term to has serves day aspirations been one since millions be of our that company grounded in

And what's the so, channel, we've direct paying focus to partner SMB opportunities over execution and from our that channel, that had perspective, market, what's it's whether create is we have our rigor I around the the with our think And the channel. years attention account and that off. or able that's in

just resonate solutions make So, and customers difference. it think to I being comes way to are that being really committed back and able that delight really and we really a focused that create a in executing

Samad Samana

guys. Great. success the on all Congrats

Rene Lacerte

you. Thank

Operator

next the Tien-tsin from question JP The with Thank line you. Morgan. is of Huang

You proceed. may

Tien-tsin Huang

big assuming on different last off drivers results. saw example, across be last had about for be versus be pricing, the growth, client will for ask, be heard year how in you client relatively to second, year different what August, impressive you're XXXX great this, might of thinking some some but than growth, and here, fiscal just to volume coming volume the other growth we I jump July call about I wanted going and but uniquely I sounds on like this Hey, in What commentary year? the consistent. that I a think covered to it's growth the drivers to of

Rene Lacerte

Tien. you, Thank

So, it's the we've all the had. we about, this, that continued when look driving of – rigor execution operational it is at I kind – think

And lot virtual international payments, so, with the opportunity card with there's a there. more success we've had

to have do continue to multi-year and we plan that execution continue and We a strategy around will that.

acquisition, customer have. the the I think we've on we ecosystem talked about

that together the that had today results all results we the So, that really things public. it's being these the we've had and working and of since levers create

executing. is see we're executing that the think opportunity I translate that how this So, and at continue into the we level to long-term year

Tien-tsin Huang

Understood.

So, non-negotiable? merging you're anything pushing For focusing and the doing What thinking just about would differently the about are some stacks] Bill.com the Divvy on? [tech still profitability you expenses, that priority. still here and What's things [ph] example, thinking what you're imagine you're I high showing, maybe is out? are there

So, Thank deferred on versus to what be be or prioritize side? investing just may the changed what understand trying you. being is may

John Rettig

to obviously Sure. we're but several the standpoint, Great guess that with out this we're from drive market opportunity strategy question. large given multi-year thinking a year, view pursuing. investing I start an invest always to we're results years

and in priorities call, As solutions platform. our integration number Rene experience user mentioned financial earlier customers automate the tighter help great operations. We're on driving a one across their the to all investing the in

market solutions. as go important as Our ecosystem, awareness partner is capabilities, of driving in our to well which our

for long also our a We capabilities. have own invested time proprietary in payment

one revenue this significant were payments the strategic ago rate with platform. the on manage positions years those companies frankly choices generate also to from of we rising In our the integrated And we have that first many SaaS interest us benefit today funds through fact, to environment technology. and pretty float

of We're that's transaction that expanding have addition tailwinds monetization we of our in a have like terms fairly feel in to to of And we great north We've monetization of the and way on progress. one $X per we payments. in long so, made being journey go. early

Tien-tsin Huang

Good all. stuff. Thank you

John Rettig

Thank you.

Operator

Matt Stotler the Thank you. from William The next question line from Blair. of is

proceed. may You

Matt Stotler

some of or going love gross then levers relates one about forward Thank further you I from just, I gross transaction Maybe here of margin kind dig And impact into transaction color talked questions. to any far? in start, could kind has dynamic. on just economics the a so would leverage factor as to on the better taking for there. What economics Hey leverage you to this provided being margin, it more maybe better mean, that there. front?

John Rettig

the a that seeing an check to adoption than from is profile, part price we're Sure. we or products expecting talked range fixed that products We've good XX%. higher in that that the have higher transaction indicated Matt. payment. be priced margins ACH that not customers bit per recently, variable only We're much above like we've above and suppliers revenue some of because but which about a of be to expect to Thanks, the XX% some

And mix as good happening optimize rising margins had float We've of payment couple a So, we a the have delivering of costs is with tailwinds there. associated positive to rapidly with the ago, a initiatives moment transactions. associated well. also. the margin day That's the as at also end mentioned transaction for I so then fulfillment contributed our to expansion costs, revenue

Matt Stotler

on adds points and institution Right, positive a got million you. consistently. follow-up That's obviously, of channel, a kind been pretty very then and, very just financial kind strong in it's helpful. of out around terms you RPO, questions maybe there, as $XXX pointed of relationships, terms ago, the new in And customer few but commentary of kind some relationships very data of

revenue you partners in point continue we thinking be institution a a actually kind kind to of and to mass where of mean stable, should you and And see of it, as expect see there so, when expectation forward would contributor going get time a of of kind I about of kind terms revenue point financial as is critical that be in revenue expand we to percentage this dollar the being growth? start compress a you should or accretive to of

John Rettig

Sure.

bullish the can using, products are adoption new so to forth. of to the it's label our institution partner of channel, fair our big obviously and longer-term a I our a has as the outside with think do over think against the that we're with who think that slightly and revenue, be and not actually the with banks overall of given of next and are inside It's the payment with our out opportunity that number. intermediate revenues that leads currently in solution our component partners but of We're going declining business some drive percentage banks us growth channel in some of likely there's additional the institution look years stable to financial we a of couple and working a to such the opportunity long-term, short-term, working that in very rapid sort at of white to earn to RPO. revenue financial our larger potential

to directionally big short-term, in intermediate I the opportunity. lower think a it's So, a probably really slightly we longer-term, say percentage, it's but

Matt Stotler

it. Got Thanks again.

John Rettig

bet. You

Operator

next with The you. is Berg the Thank Needham. of line from question Scott

You may proceed.

Michael Rackers

Berg Scott I'm my This quarter. taking on and Thanks on for everyone. for question Hi, and is the Michael Rackers, congrats today.

how but based looks maybe macro versus earlier, touched think ago? bill what it made should You forward? sales adjustments on or the motion today about you you. Thank kind on demand I'm curious this any moving Have bit notable you're strong And year of on, environment a like we core the then a seeing? the

John Rettig

Thank The core to not go you, market changed. Michael. motion has

We approach. market go enhance continue to to the

of say demand One interest, larger And we've we've we've see areas the more we and awareness customers. that it is, other sales enhanced would more the continued that these works those so businesses I've team talked about, I that tailwinds to – had ecosystem. driving to across build more the have continue with

successful really And them and customers [indiscernible] be of responding they what to kind delighted. making and delivering work need we're kept so, for the to that to sure be

really motion. to So, in no market changes the go

Michael Rackers

Great. Thank you.

John Rettig

you. Thank

Operator

Research. Suchoski from The with next the Autonomous line you. of question Thank is Ken

proceed. You may

Ken Suchoski

points, job Good and a taking Really John. afternoon incremental here data FI nice the questions. lot of the appreciate excluding thanks and the for Rene Hey, channel. and

in drove virtual guess wanted methods payment we expecting? pay thank and with start quarter? TPV? seeing by traction the card ACH, figures appetite new card, market So, because and these to ask the are some end a came for enhanced across I types contributing most cross you traction about which and into new that. on And those the lower you're your have instant So, of quickly ones in the on I the the upside in the the were which get them payment seeing three little what's penetration transfer, than more of rate products the payment take border to bit

Rene Lacerte

voice. obviously is ways hear our is it's make the your simple need paid. to Yes. a to of deliver connecting pay customers. part Hey, delight of and and platform And do been they really things for success We've one building been it businesses. for multiple Ken. that to Good – always statement get mission to business to And our and

across And payment so, of the adoption are is seeing products think I what valorem continued we ad platform.

potentially capabilities overall to TPV. XX% were add it's It's the on be to be transfer, different there's rolled the We things if to So, up you have lot on balance. to going of going years it's forward ad on all and all come. now, virtual be in is to mentioned know yet you a it's going of that products some card, in last that going at the just others that the valorem the more and we few opportunity we've out international,

multiple that be [indiscernible] across to go think and drive billions part So, able have really where profitable company. continue can part to get team. to the team of focus to is we is of we drive develop going to And the to I and to I think that really the the to be

Ken Suchoski

recently I ask believe were accounting put planning firm similar into we increases follow-up. guys to made expect that channel? your changes higher guess, price And Okay, some I about to are were the should then a increases I those place. wanted flow the you And the in quick channel, that just on of when great. in introducing results? direct prices through those

John Rettig

months the At I ago. this customers, actually channel notified Ken. in August. to increases have a couple Thanks, month of price direct point, effective We them, think we announced this

in like we're end taking the haven't customers quarter or – channels point. reflected year the, would We to price that of announcements in in that that by at the fiscal third made actions probably any the by We model. our fully this would be other other any to quarter, anything expect

the slightly customers informed point, it's about just prices this but assumptions of. at some have we the subscription made that have We year, direct higher channel throughout

Ken Suchoski

lot. All it. Thanks Okay. right. a Appreciate

John Rettig

you. Thank

Operator

Thank question you. The the next is of Cremo line Suisse. from Nik Credit with

You proceed. may

Nik Cremo

unified Thanks benefits congrats start expect the I the FY strong really results. just partnership you quick. should to wanted when do on for in expansion? the CPA question on complete to taking touch Divvy my And At platform what and point from we experience? see XXXX to

Rene Lacerte

Nik. you, Thank

think started connected we and announced pulled that had we and have separate obviously, fall, integration, last a started. in that that teams integration We we February then I together work

to approach customers to to important fast to and as from market share we a hear talk that but will as as be have able We for we approach. we go working definitely are that that make that more it's from with. can happens, unified going think customers integration. to We one be And we the

is there, I'm another good feel And there then So, not sure, question that. about sorry.

Nik Cremo

we one partnership the could expansion? Just benefits see CPA from

Rene Lacerte

Yes. Great.

good today. the are develop and well, that So something muscle help as progress the the on go we Obviously, year. continue approach to partnership, on the it's make throughout on the making market will CPA.com will expansion need we there to of progress we're but that unified teams that to to platform working that

Nik Cremo

like if in squeeze can And that on update look I quick we an follow-up. and payments InvoiceXgo I XXXX? a just in see for could Thanks. wanted just could the get to if efforts monetization

John Rettig

Yes. Nick. Thanks,

as and we So, payment We'll we're a I'd the very Bill that yet. combination And it's throughout contributing on InvoiceXgo’s fiscal progress to early the results year. parties. other say, from materially transitioning provider of have to and outsourced early stages of updates third very our more not in

Nik Cremo

you. Thank Great.

John Rettig

Sure.

Operator

Thank you.

We with of Jeff Cantwell Wells line question. have for from the The question one Fargo. more time is

proceed. You may

Jeff Cantwell

just order scale of a are was I to your Hey, we question give is, And thanks. business. lines operating question the R&D me the for to sales rightsizing is key squeezing you longer-term what your and about go seem lines on you to thoughtful wanted the were years, how if thanks couple on expenses? [that updated Congrats and to to very where ask on the I on thinking, you revenue? space] your in. thinking relative the a some there in being And you back result and a period this, marketing context remember [ph]

to of year XXXX And piece is clearly profitability so, this revenue, me to it being there. and point revenue it's the at the fiscal interesting see reached in

and updated your in that are thoughts of you. your us? So, kind wanted able get to that sales marketing and R&D the with I just Thank you're to share flexibility expenses and thoughts on to longer-term on what extent operating

John Rettig

businesses solutions efficient we're approach I obviously after. really to the we're tens we've of our to out growing scaling of to strong with as that millions unit There's Thanks non-GAAP We're to while form market globally disciplined very customers relationship happy and very product time. progress strong build still I in And serve with we going benefit mentioned evolution XXXX margins. Jeff. acquiring, the to leveraging made question, FY could take continue retaining, in and moving from economics over think of a going our early customers before and business the delivering think think it's for with who I in profitability the to the investing while our growth

Jeff Cantwell

was Okay, make as got sure great. I saying was as you were to were the adds core Thanks. X,XXX Bill.com correct. just that net Is this think want the And year remainder I I and number, And from to FI? follow-up on the FI far that you what got from versus just correct? what the Bill.com for then about channel. commentary

John Rettig

XXXX [XX.XXXX] Yes, channel, new higher is that's obviously X,XXX X,XXX new in new to the range, approximately excluding our in that and that X,XXX fiscal be institution net throughout [ph] would per ad adds again of channel, correct. the bill, net net expectation core the the than be financial institution total organic excluding quarter ads we'd financial which were that. quarter,

Rene Lacerte

you, everybody. Thank Okay.

joining thanks millions Just wanted with say us SMBs. for of had to for quarter. joining. about another again Thanks Bill.com delivered large opportunity excited today. great we We're transform digitally the

Operator

today's for rest concludes That the your day. enjoy you call. of participation your and conference Thank

Bill.com (BILL) 18 Aug 222022 Q4 Earnings call transcript