- Earnings call transcript Q1 2023

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Operator

Hello, everybody, and welcome to the Bill.com First Quarter Full Year 2023 Earnings Conference Call. My name is Sam, and I will be coordinating your call today. [Operator Instructions]. I will now hand you over to your host, Karen Sansot, Vice President of Investor Relations, to begin. Karen, please go ahead.

Karen Sansot

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

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

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

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

Rene Lacerte

of macro another results financial been the created us in for towards led several Karen. midsized XX% profitability climate, for disciplined less. strong Bill building these ever create was where growth performance more a businesses investing QX ways of of new more beginning, results a expanded non-GAAP today's us are customers, to We execution revenue dynamic in more From everyone. than have Bill ways small today. Thank achieved increasingly achieving record We we platform. quarter model acquired delivered non-GAAP In in significant the do Good afternoon, first and stand-alone delivered QX to monetization in environment. and steadily gross you profitability. you, net looking year-over-year quarter joining value on highest business for transaction with and our margin Thank milestones. while with durable our number businesses. an have to

term, may moderated trends these While near growth payment platform lead volume has more our never been to relevant.

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Additionally, to Divvy and are gain having reduce fantastic even teams make time that is cash vendors product priority our deliver many transit and our on #X helping platform Repurpose unified of our Bill more us both more the inspiration to payment like us XXXX. Customers Bill sources our helps been have so of greener solutions for using together flow. and efficient." control engineering and Bill a fiscal our as experience, work of network

on a are our we brand map we identity. that have announced our progress weeks platform. to become Bill, few strong design expertise modernizing great for the combined behind. teams, unified project the the ago, making road are Leveraging leaving this We we And dot-com just

easy-to-customized signed insights accounting data for to a efforts Finmark, aggregates our addition payroll, acquire that announced as platform, earnings Finmark financial and sales forecast agreement and cloud-based we better help our These from of build start-ups businesses we leading believe to them will platform [indiscernible] capabilities to enabling We for systems financial strategic new with be proposition this especially useful In their another to operations. add advisory definitive their SMBs. such planning offering data, the our a accountants, to gain this financial future enhance empower valuable channel. and planning to dashboards. budgets, today, through organic will practices. real-time tool businesses cash further flow our solution combined value to important to manage we increase When will and

platform is partners, go-to-market we their expanded is more driving Recently, for our deployment partner new our agreement channel. our management. theme valorem the through scale XXXX an new extend Continuing of partners solutions offering to bank among our its entered our spend of QX, bank priority optimistic In are on cards expertise. bring we as net FI an behalf partner solution now milestone issuing partner. relationships, acquiring FI overall spend adopted momentum adoption This reach our and customers. bank to ecosystem our processing the Bill as existing further important a relationships an existing opportunity channel of in first to supplier This about with ad well relationships. with time, as into platform financial the we institution and the on existing by current virtual a our in Our are enablement second we because adoption management of to deeper to new SMBs well into into as FI the driving solution expense partner payment functionality the fiscal of going to

the drives combination practice. and third to clients more Financial business BergenKDV's our Our partners continue in hundreds progresses. our I with to the and both." team Advisory a see solution future practice our services tech have X speed institution said and and Divvy are than We Divvy Bill preferred a term, clients. accounts financial and growth "The XXX powerful their payments of Canadian have new key reach. enabling firm implementation component accounting We their U.S. financial platform accounting CPA.com, we of countries and to to U.K. ecosystem. our use loved ongoing leverage priority Today, are quote, expand FX we and leverages now on Bill operations. Solution drive talk of the have they've and Gallo, substantial suppliers go-to-market as that our begin to example calls In stack reach is for all Bill in our network, offering team advisory top good partnership to bank Divvy, in higher bookkeeping plan accounting driving Accounting tools, engagement. These grow and in channels. enabled of cross-border X,XXX firms growing firm A for automate using Accounting payment solutions already of choose interest option we'll number of firms of our advisory and our to Finally, BergenKDV, offer adoption about successful other another efficiency. Divvy their Leader channel. simpler Services their our major partners Chris our suite to great that and their of how more we receive more to Recently, begun recently near expanding signed it payments as practice. the via for across it Through BergenKDV and we in to currency adoption made receive innovation further suppliers this us,

moat. As we of competitive platform, our multi-facet enhance our capabilities the strengthen continue we to

payment payment Our end-to-end technology proprietary SMB to team and to by creatively us gives quickly points. able our network visibility and pain be the our tools the solve afforded

and can't businesses. Our to We to drive smaller enable that manage trust assets them money licenses help replicate. that with transmitter market data us expertise, risk their to management players efficiencies go partners SMBs

experts as attract to culture and software, magnet world-class businesses. Our in a payments acts small

and products of brings recently global Officer. businesses. over Shopify, Chief as to in On developing Padelford including welcomed years services revenue. than executive in X another Loren QX, merchants the front, countries, X added experience, brought seasoned annual Loren Shopify's more experience we In people over team XXX where and leadership our we generating with multibillion-dollar Commercial wealth million $X sales a billion at his

and level Google growth Google Her We the an scaling on over businesses last was in marketing results. Google joined she operating at also to leader rapid Cloud, XXXX invaluable be plans. of we worked Board Bill. global partner fiscal recently contributing off years. companies, closing, fast-growing over the to where with Capital, Cloud, Cloud XXXX of welcomed strategy Marketing our Alison will with a their Alison global for Chief the Officer XX go-to-market helping In kicked division's first X to the excellent Emergence Alison with Wagonfeld, SaaS experience Directors. to as Prior Google

managing on XXXX strategic in executing investing priorities while and long also We run. non-GAAP business our to laser-focused for fiscal profitability against are deliver our the

of All to helping Bill at succeed. dedicated us SMB are

us. opportunities to now like call would over about excited thank I talk in and the our for John I'll detail they turn about and in trust more partners their continue employees, place quarter. the are many customers to ahead, to to We our

John Rettig

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

income $XX from optimization of customer we Divvy margin, Several our discussion comparable that results non-GAAP invoice tables measure. reflecting million, Please to payment XX.X% range. for estimates profitability. have expectations. and gross financial to delivered out management We're note impact was they in payment volume favorable Bill's exceeded and including includes was above which and to increases in QX profitability the We for combined began more $XX on receivable non-GAAP Float spend significantly and the reminder, I result GAAP margin non-GAAP also our quarter net year-over-year, to financial strong refer reconciliation estimated directly gross Total measures. press solutions. in significantly nearly a earlier million than on funds earnings managed stand-alone approach to XX% strong XX% our with an with gross to transition valorem release positive had QX revenue refer of to financial subscription revenue results, a a of well disciplined $XXX we Please Non-GAAP transition exclude QX, As XXXX. performance, year-over-year. for million, higher growth. to factors pleased higher-yielding accounts as payments, well revenue. today's float and ad from to-go investing the a was gate most was mix margin last revenue our that up million, XX% above our fiscal non-GAAP the Revenue $XX million, growth. in investments. includes increase year-over-year as fees to $XXX Non-GAAP Core revenue, transaction was transitioned our increased when

record stand-alone number customers of remained last XX,XXX. totaling platform the quarter. we and was added quarter, net retention with During Bill healthy consistent to our a new Customer

platform valorem year. Throughout of we made last stand-alone at We led to to accounting Bill's very channel ad customers increasing QX. similar QX direct transacted transaction see growth from the to progress and our which continue from revenue strong engagement also on yield on strong QX, a payments, customers a rate XX% and of

are even increasingly Our average in their customers deliver environment SMBs transaction an demonstrate grew by approximately monetization These reducing the revenue year-over-year where reacting per to we tools have results $X. expand value influences and XX% to to to macro spending.

the In micro our X% customers stand-alone to beginning declined channel, we in excluding by QX, trends is their that moderate mid-market are now These sequentially. well. TPV and During will and reflected businesses I trend QX, spending, visible saw SMB our Bill outlook, discuss which customer, FI with per later. as

our all small by with Divvy-spending driven quarter an customers, metrics. of the to of go-to-market channels. accounting impact key We increase of Bill institution migration Bill stand-alone platform. ended our includes customers, was In XX,XXX on white-label This adds platform the which customer had X,XXX our businesses of businesses. at solutions. signing an new the XXX,XXX net fiscal Now using X,XXX to turning Bill X,XXX. update stand-alone Among our as on the our our Net XX,XXX partners. above channels, new well of direct a in we and white-label channel, range financial customers to onetime we businesses number and had platform first customers strong use across bank are adds, was the X,XXX net stand-alone from our existing partner up FI In an expected onto as XXX,XXX our

institution's our a channel timing the As quarter-to-quarter each fluctuate upon initiatives. depending FI adds net and customer in marketing of reminder, sales

year-over-year. On Card per spending growth billion. spending year-over-year. Divvy to payment processed includes representing Bill payment XX% customers Divvy businesses, stand-alone TPV Bill total from $XX.X financial growth we billion $X increased XXX% QX volume from partners, stand-alone volume business on institutions of TPV, payment our institution $XX.X volume in and in and was payment the a billion financial in card representing per from customers, customer billion $XX.X volume, year-over-year quarter, basis, increased This volume Bill XX% year-over-year payment growth. excluding our total XX% stand-alone of X% representing year-over-year. Moving during excluding

the transaction payments Customer XX.X million our platform. includes solutions Moving processed engagement strong. with QX, payments XX.X Bill We volumes. on representing XX% million on to This growth. in year-over-year very remains stand-alone

in to channel, Excluding year Bill transactions XX last the that FI quarter, averaged ago. a stand-alone customers quarter and similar

million During card X.X we quarter, reflecting the year-over-year processed XX% transactions, Divvy also growth.

And reported of of Core This reflecting million, ago. in on revenue XX% Divvy. ad XX% from $XXX.X FI from revenue on monetization growth. last result growth growing funds growth revenue our of ago. to was increase partners. base September expectations revenue million, valorem higher-yielding a review up customer of Total XXX% TPV QX XX% given Float year-over-year, our I'll revenue increased growth and driven to totaled $XXX.X magnitude growth, from from recent the XX% year-over-year Float stand-alone subscription was subscribers as year includes of by the Fed year-over-year XX% year-over-year. Bill an our Bill product from a up of year. rate increasing Subscription transaction stand-alone $XX.X million, approximately increased X, results. QX was million, exceeded closed acquisition reflecting increased strong a revenue migration million inclusion spend of proactive million, increases revenue Now into $XX.X the was and increase million, and of XXXX. customer representing $XX.X year million a $XX funds of that Divvy the million InvoiceXgo year-over-year an Transaction $XX.X revenue revenue investments. revenue totaled XX% transaction $XXX.X our QX, year-over-year. $X.X

the this rising quarter, to proprietary be tailwinds that is that Our demonstrating interest enables yield differentiator important XXX combined create to basis with rates. was points period in technology proving payment of our an during scale, our us

Non-GAAP a X mix as higher was a float economics strong and XX.X%, fee up of and revenue. transaction our transaction Turning points revenue improving results of for to margin margin operating result variable gross year-over-year QX. our gross

of manage range As currently a favorable margins reminder, payment and of a very we mix. that a of stages payment are portfolio with offerings we have various in a adoption,

of in operating million XX% XXXX, to of fiscal million, QX. the For increase be $XX Non-GAAP expenses increased range an were from margin non-GAAP gross our expectation we have $XXX to XX%. for

Non-GAAP year. percentage experience. as X%, management margin the of improvement XX $X.X operating on continue non-GAAP million expenses X.X% income from our we net was Non-GAAP and and benefited and an rewards other operating increased unified other in the associated was last balances. of introduce initiatives We due to to products points corporate marketing Divvy our negative enhance and solution. customer invest new of R&D go-to-market our million, platform, cash from yields income, $X.X spend Sales and was expansion our build with expenses expenses, higher

on Our weighted million based income non-GAAP diluted outstanding. net net million $XX.X non-GAAP share was per average $X.XX XXX.X diluted for a of income shares

was income our our to due revenue to approach performance net non-GAAP than Our expectations our disciplined growth. better significantly and managing

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

continue advantage, We market continue believe cycle. penetration to is important well be during we capitalized, to which an enabling us this investing economic in

retention environment, with from fiscal resonating more ahead. growth existing customer volume our Before the engagement our same proposition And their the how continue that high seen financial I'd the in and will new quarters our year-over-year outlook impacting this fiscal have moderating continued macro value businesses and into we've appears lower to customers full At increasingly we the and quarter challenging business. and we businesses. like throughout second of shifting time, healthy environment see than the payment observed We trends the to platform spend XXXX. term, macro SMBs, anticipate be translate near XXXX, the environment with to year in expect we cover will the ever this is fiscal for In for strong SMBs demand.

uncertain is globally SMBs impact the in believe our we're proactively believe growth the navigate to non-GAAP for us environment, solutions We this our can having for the profitability. need business. opportune time and while businesses invest positive monitoring ever, we external environment accelerate an and balancing and than to more Now we

upfront. Now our outlook. of notes turning to A couple

a not downturn. economic our severe First, outlook does assume

of development our integration close a in material results our in quarter, have fiscal and therefore, and to associated expect to XXXX. product have included XXXX. guidance we their with on fiscal Finmark investments not and incremental acquisition we impact Finmark acquisition expected costs second year for is the Second, during the QX fiscal continuing revenue

growth revenue million versus XX% For fiscal strong total seasonally of be our reflects very expect year-over-year to we range $XXX.X in million, a the XX% QX, last QX to $XXX.X year. to which

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

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

we For of for OIE QX, to income other be expenses. $X.X expect million, net other

includes This the We strategic million. plus million $XX approximately a in requires treatment related of million forward to period expect vesting $X the of the stock-based to Officer to to in expect we run expenses compensation capital to this pull although the stock-based Revenue impact which GAAP a In $X new accounting treatment expense expenditures role Chief role, of million QX, of adviser. accounting approximately $XXX compensation related change rate our QX, us remains the unchanged.

the employees we high collective we expect $X in billion opportunity solutions, million range, Bill. value of XXXX, end talented the revenue the our fiscal large our billion. of to milestone to to total which reached At the the efforts speaks the the proposition $X.XXX revenue at range of revenue For and market be of $XXX

basis a $XX XXX funds on year. which be fiscal to assumes We XXXX, approximately expect float for million revenue FBO points the yield approximately of in

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

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

our navigate for expense and million, positioned we confidence diversified that $XXX have to multiple environment the For economic the uncertain In of business because we of and well million model. year. stock-based total recurring revenue expect fiscal successfully of approximately compensation $XX capital streams XXXX, we're closing, expenditures

SMBs. to for are market ready opportunity take we We cloud-based given growth are questions. invest continuing adoption now the solutions of efficient large the and Operator, by increasing to

Operator

first Goldman our And Instructions]. Will question from Sachs. from Nance comes [Operator

William Nance

also kind Nice the I moderated around little the of was base. sort other your how that maybe cohorts results just incrementally I the into some could guys of And payment there's embed are a wondering on today. of kind slowdown we you quarters deeper future and of outlook payment of and guys seeing. to enter commentary volume are expecting up a in might your if anything assumptions your in compare dimensionalize growth to fare to happen of what you maybe contrast bit versus wanted volume outlook? the among you smaller you economic some as customer downturn. embedded And the share if did metrics

Rene Lacerte

Thanks, Will.

economy, First work of all, profitability. because of just meaningful with we're say soft in we for we meet employees. ability platform just to And if let the businesses. X,XXX our all only the the actually that's of very non-GAAP grow that pleased flipped the of the And needs me XX% did not

And that it we QX seeing so on first was And demand started this that the spend, in would being talking adds. that about the you is saw is and say net moderated. TPV thing call the with this healthy, and the the I

we're so that X across call seeing we and is the all the per remained of QX, out QX difference in And sizes. saw consistent. customer that It's thing in now mid-market, now has between not number of all the as said and that transactions businesses we to

the and platform using business. the they So what actively their engaged pulling product the people tells really managing but this and is us that are are back spend, in

William Nance

for the maybe cards. changed the over a or your a in methods channel some some any it. impact the channel progress. follow-up And new how Yes, impacts meaningful the FI sounds channel of a you quarters? maybe within deals virtual disclose, the time. major could announcements partnerships sense. know about on just had you valorem And new FI related as you made about I ad of then quick on expectations have could ton in talk you payment if new Got opportunity then you issuing of Makes signed handful just that It I'm color the John. of numbers has how the payment handful future wondering could like FI that KPIs

Rene Lacerte

Thanks, again. Well, a couple strategy we're I FI with of very partner there's with quarter. things think the channel happy that this

So to the right? our as saw things the we that the we including we on saw work card FIs, focusing vendor the unified FI. we offering, that platform, a that were rolling year. get one it out, So the to thing our And kind managed hard foremost, work management, partners I entire for the that our first ecosystem. of quarter solution build spend was respect we'll we things their platform And start be that we do of then also saw, channels X in is our FI make of announcing say, across to to or through all to ability across into to other later that's with X and in this what drive should platform

we'll the strength of say card, them the roll later the X ecosystem in saw that of is FIs we out. platform, the then those of And more their more card the up and as great that We in sign But saw the is which own great FIs our and that with about program we they're banks of the have have. great accounts. instead using strength talk virtual using strong. super supplier all, We direct. saw the the program third thing the in overall growth growth we virtual additional we'd saw for enablement growth we So in all because

John Rettig

obligations the this these part in the that just in about us model of continuation made that to and on partners. of the XX think of that more announced adding lot impact question numbers quarters. monetization future quarter, And financial the institution our momentum think the where, a derived a last out I a of time booked that most longer FI as versus have quarter, from announcements, our incremental performance these the a in remaining we over of talked from impact intermediate of our will revenue we just versus it, the what that some of so. helps term last revenue short we've we the, those With things more and be from but very our I over of of plays new term. partners confident are or call our said, some terms We've of months channel positive And over to the period of second in bring already course products will progress

Operator

Our from Blair. William Napoli from Bob next question comes

Robert Napoli

quarter. Nice Very impressive.

front additions? of I customers challenging environment? a even what in on You core InvoiceXgo. is added number the for that new through what marketing quite Bill, in I there something and a more few new Divvy the mean, Was accelerated really -- drove that, additions think, quarter record

Rene Lacerte

product we're I building market of seeing to and and I of people, the a Good business your platform, things what that kind Bob. lot hear love momentum and kind just think I the effect the and about call Thanks, snowball building of is the the voice. A that. of

change way our business inflation choose with they done ability And was is economy And an the that beginning with an that that that the software. have The high platform to that for manage less, in office. can't means this. in work real. remote Customers this do their haven't to to there elective wave more to businesses it's in opportunity do through seeing opportunity force your being saw to seeing gets with we hybrid that happening. is We financial is done, digital be deflationary we're not And the really that back done the soft what it's provides also the we're before. what really a transformation help ultimately, operations way not

But And us demand. we across opportunity this that That's about, something doing. we're an and in the believe that that continue for driving would momentum see all to that that building I platform healthy the is we drive is is so through in just the ecosystem to this all that snowball. -- say is excited something demand unified we're the things us all,

Robert Napoli

the color and in how just the of helpful. the be update, -- core cross-sell, would opportunity? with Divvy? is What then the And And on you and momentum cross-sell an give those there success is Bill XXX,XXX many currently customers using can any are

Rene Lacerte

that We're happy with to Sure. success very cross-sell date. the had we've

going We unified continue means and thing we one cross-selling ways of to drive with feel The are brand quarter, and can attract that that But more announcement the is all into look platform. of the comfortable was the this obviously past the experience. that we obviously, of that the platform. on we drive to unified did getting roll the

we'll that unified platform. we more go integration is to well, continue so once and becomes products available. that do And have we And of share And the the that continuing we that solutions as to the believe we'll more the have.

Operator

Our next Samad Samana question from Jefferies. comes from

Samad Samana

the the could opens how your together? Or well? maybe maybe current you're roads brings question of what But understand I portfolio? it's it spend first other glue future it Great. this you that us And management hoping seeing the how Maybe acquisition, you as and maybe look was for ton the to AP on fit what you Rene, as makes a strategic help sense. into

Rene Lacerte

Samad. office, money dashboard. actually, roots that. of was is the the whether of their said out idea And manage critical have all that like and name that insights Cashboard, go for in, of We company I receivables the back for dashboards that money think the help CashView. company, a is the to payables the with we original that was you the name that's of the financial if back or operations go things one because and Thanks, And original to a businesses while things

view one across team goal creates financial create here when the done the you tools different tech So to place innovation the To driving they've Finmark, And from value, platform that able their is data really disparate the be manage your and for financial business way with together very so that we before comes is elegant at that's is actually more X to manage that see it efficiency. systems that can operations. solution what tool in to operations. into more pulling than the a do multiple different really a ever to

excited Super those in team the team our forward and delivering super have excited the future. that. to So solutions join to about look

Samad Samana

a And the maybe, the then around incremental the ex disclosure just follow-up you. appreciate TPV, John, I for Great. channel. FI

decline? think forecast, we a same-store heard think slowdown? should maybe And about I about sales how embedding -- should the you your Bill.com think X% if about if think How expecting up actually I trending? said maybe you expecting we further you a correctly, Are ex is forward that FI? we TPV, year-over-year. that Is you that it's only

John Rettig

Yes. Thanks, Samad.

continue. it, be our numbers, months assumed FI to some We recently to there but to for of are of with a really think, trends channel ex SMBs. handful that growth we've for our factored is What and so outlook happening really on trends or economic X dependent We customers There of the current year. cycle actual opportunities for those over of we've observed that We've call the profile is last, the spend continue. the the expecting that some is I seen going growth expectation. means into upside lower the impact moderating what's that from going us our are upon to forward are,

Operator

Peller from question Wolfe from Darrin comes Our Research. next

Darrin Peller

competitive customer good NetSuite or particularly this continuing see all trends the acquisition is Intuit heard others. to rate, whether at It we've dynamics, headlines from competitors the it's given or and

it's moment. thoughts more love of little different for your on you SMB, break competitors if the if or really could real landscape it a these make tiers down, your certainly some it of And in seeing. really a not mind, SMB what partners up and some competitors look terms doesn't in So of progress think I'd you're because or don't And actually just like showing numbers. you yet

Rene Lacerte

it's And complex really complex. all it, Yes. about operations, years to how We payments, your the hear compliance, XX get Good of category. it's the financial Thanks, the last very around Darrin. go defining kind and to that just we things this it. think voice, -- the spent

have a we lead And market. in so strong as a result, untapped a large

SMBs diverse channel. And approach so reach we horizontal have us direct working or our across through a We either ecosystem. for broad can what's accounting is a

customers. X,XXX We have for part are solution firms accounting the our of that

of and services doing deliver the X and we're with those top customers. have to more We more banks to with XX banks, more accountants and

the the the we to us a this value us combination that's a is And in time. from so was really SMBs that it's and valuable. and SMBs mean the the it's drive built deflationary allowed ecosystem something soft is of and force for I to reach that help ability platform think beginning super economy for be to continue them and to really

#X them, just where it pen how So is be automate business say and has is on how on the value for that take small and long that's you a do and you -- pain ultimately, the of to going stay I actually we're the do for out them. it competitor paper, been delivering and And for time. would focus manual processes, side these focused will

Darrin Peller

take quick again, mean if for as just the strong? one rate maybe resilient is of sequential change the And you us change what opportunities remind through key John, just scenarios, been almost how And sources on move that revenue see there. in could strong. follow-up the take Okay. I just regardless you rate a the to potential volume of But kind has of still up the -- goes, the payments any and macro reminder. being

John Rettig

couple monetization the of last We've Sure. Thanks, progress years. great our made monetization over expanding transaction Darrin.

adoption fact, of monetization In continued ad was our in best at in last ever part our percentage quarter, we we're to TPV XX% transaction grow. a as this terms of mentioned ad driven products, growth valorem about that valorem by of quarter-to-quarter has continues QX

ongoing of QX, networks that issuing In a addition, the our we the in level next really, I'd we're volume than grow over our between to averages going given we've perfectly near more to I the term, same very over the macro in the near is and term, the And opportunity as intact. than expect be expecting even forward issuers time, expansion quarters, in an in that to In few in But about our providers monetization. said say of benefit But necessarily the lower time. migration we've led given had expansion rate step-up stable environment remains perhaps monetization and card between take we're don't would a monetization expect, our expansion long-term and quarters. the we the near term, the bullish lower for long historical rate, environment. to take seen continue historically. just a That lower as

Operator

Suchoski comes Ken Research. from Autonomous from Our question next

Kenneth Suchoski

on last The up on fee transaction us But specific accelerated if this are quarters. it I take a question I think prior give And seeing And so. of expects added the in answer. in Divvy, there. increase provide types of quarter. few which wanted traction? just follow I versus to don't can the over you rates Darrin's the mean, really you excluding you've rate, types quarter you touched know sense or payment penetration year to anyone last this I new a the payment kind most

John Rettig

really Ken. with our board products. the It's Thanks, across ad valorem

is. runway of transactions stages more customers' there's payment We payments virtual earlier think choice in ago. launched international a the significant We growth adoption. ahead what right are figuring their allowing suppliers We a in than for and the method cards years couple of out still in by

largest having transfer newer are the pretty basis, around products are that on real-time well consolidated our small a contributors and though, of doing as dollar a instant those expanding nicely and On dollar our payments some adoption level pay are contributors. overall those the to still as of is monetization. So But impact card positive growth. by

Kenneth Suchoski

Okay.

to step I looks specifically could continues that that Okay. That up think about wondering math guess, you the and a just transaction the And how we of increase revenue. makes talk And to the driving I is. that was InvoiceXgo I on sustainable try some of And what's lot if sense. revenue, then run it like nicely.

John Rettig

with Yes. We're the making that with progress InvoiceXgo. we're pleased

subscribers to In still continue as the, revenue, made invoice a product, go be it's and opportunity, opportunity existing apply stream together, a some branded to and accounts we going to way revenue invoice have terms where to term. a but the of was improvements to think, network of InvoiceXgo to Bill the that's changes and overall And think see say, still our longer capabilities, intermediate monetization of monetization receivable, driven experience, knowledge in first, But development. longer profile business. the growing integrating payments. of of we volume product by the the members. is a customers, product And on earlier material our secondly, but the and phases and the payments predominantly just subscription AR, that's not the stand-alone not It's of to above we've transaction basis, those significantly to I'd we drive big long then InvoiceXgo is we for go. the to over And we big term our

Operator

And from question from JPMorgan. our next Tien-Tsin Huang comes

Tien-Tsin Huang

here. results Great

ago SMB or of adds on environment, in versus stable views XX on the payment Just days on this adoption client transactions. comments. I investing change given growth net volume, your Any any heard lower sort that thoughts uncertain front?

Rene Lacerte

softening demand is direct approach efficiency. we up as customers. more Thanks them of with And sizes to what to talked -- ecosystem a healthy. that with manage In business the a we less. platform we seen or has the we've all ends well across the it's And institution large meaning for doing script that we any is enables the go-to-market, our this And is that, accountant do what about helps your question, say because to just the part really mid-market in of businesses would efforts that their whether horizontal that is business economy much Tien-Tsin. turned to I that businesses financial our less, up have have entire partners with as serve more of through partners

market more ahead And and strong. for demand is the healthy. have continue we We untapped in to that so customer drive businesses more opportunity value the the think to is growth

Tien-Tsin Huang

Okay. Great.

If you you. don't ask mind, I to have

that, partner. if asking cards understand Just partners? through detail. they trying that Rene, banking behalf an me before on better small existing issuing to using to an selling virtual incumbent were business their Bill FI solution is you're of of that the don't of mentioned, of I'm you to and benefit kind speaks curious, something alongside mind integrated You

Rene Lacerte

of and it's to partners. customers the No, institution Yes. are switched and have proud the because using that one platform supplier of driving financial have we since are transactions broad been our of and we the creates the strength team, that business working for they network, suppliers It's driving of. great to partner of customers. on our That's and virtual the a on, we've financial for that's to that saw of power things ours And capability our partners we suppliers And a take institution that what strength is launched of the value of ability card we've connect. working enablement the question. value the on the our before to advantage the And their been using all product Bill.com wanted something did were with point, customers. really that their that's for your customer very that which they help

it. we did why that's So

Operator

comes Our next of Morgan question from Stanley. Weiss Keith

Unidentified Analyst

of talk forward seeing macro you Keith. us the and evolve and to commentary? trends. expect start to Bill want that with you you're going for just given in differentiation any I on Divvy It's how Jonathan TPV trends through Can TPV core some

Rene Lacerte

Jonathan. you, Thank

seen moderate in this all businesses businesses, have We economy. their generally spend

have so our faster, continued strong TPV -- across we to you see, I it all just customers. that of softer would Divvy and a is in what start see year-over-year in it's much But is do there. smaller spend we've base growing to say, And with growth so

Unidentified Analyst

want opportunity modalities Appreciate And Understood. And amidst how to payment more opportunity that with suppliers. macro? color. working think suppliers? drive we talk dig through is adoption should I softening Can opportunity with And to the any of your that? that into more there monetize about work a you closer through of to

Rene Lacerte

now the want paid and in. they about here. Another to and Canada the good what in enabling network to We currency be to to decide be in suppliers how question able U.K. want talked be they our paid

that's made say, network activated rate the from U.S. is, their what a by create. So paid being leads better is movement when could Canada monetization business customers FX And for and as what of in potentially that say, monetization and that FX or who treating they sides that and than well. bank, would to is viewing, I should we the we've suppliers value that's this transaction somebody us the a opportunity local both I an on them as that U.K. Bill, so the get us. a gives is creates for that

of the and be other first to how front. both continue will sides we network, innovate that's to example. So think we'll value the examples There that of adding and about on invent

Operator

from question from comes Bank Brad Sills of next Our America.

Bradley Sills

coming coming I'm question a because from might coming the adds when or there. -- accounting net on adds channel a some to of for they another different customer asking direct ramp in is there ramp in through time the channel. -- wondering wanted quarters. the ask in from through these customers versus in from some potential those spend coming I quarter I'm onboard if there be your FI curious, channel, great when net FI I'm in they come unseen average

Rene Lacerte

model on within And for our days, Thank that using customers, build question. platform. product get that to of consistent for we is XX the them you're make you, or We business what it it target we see into across you're and actually the really Brad, the all not. the easy

with channel. activity meaningful on to experience really doesn't us adoption does in to get And that day. kind so have vary Obviously, it with drive of is but our And teams platform, see and a the the Bill, it every continue take we able that opportunity earlier by and that for to work get probably FI X going. to to we the partners, they're up X months to on

Bradley Sills

on macro, it. if Great. then one might. Got And I the

continued TPV, guess, volumes obviously, some mentioned, transaction here has TPV. expecting customer, you're I that moderation held in you're nicely. You per But in mentioning

side would it So regard Is macro I are to you seeing to headwind the on with you referring How where impact? that you're -- where mean TPV? transaction that size? classify the

John Rettig

Yes. Brad. Thanks,

this concentrated pointed I has last we it's in we've well in June. still that As now. I We the we're be started customer month think -- most spend some across of think some It as where observe of Rene quarter to categories. continued. segments -- softness And to discretionary seeing the appears of mentioned, this out the

good So the use advertisers acquisition a would We that a at top and things drive spend example. of advertising other businesses things. lot channels looked like advertising businesses customer be small to small or -- that

So basis externally. that we points segment, across data spend looked at that's really looked whole that we've vendor-specific with on the and found is a And consistent that other down. something is

bit small says just across the seeing I and a customers. so that the the external more our size and environment expenses, cautious And habits spend range customers our think their being of across about are to we're business reacting operating that it

Operator

question comes Josh from KeyBanc. from Beck next Our

Josh Beck

decades. bit Thank it's just management you've philosophy, brings you. card a bit dynamic. something Obviously, I little risk about a that's that little ask platform your receivables, different wanted obviously, of to prior Divvy really ingrained in the probably a

give and maybe sense a well. management kind us So just you maybe that in of to is of risk your how as approach evolving as folded Divvy

John Rettig

acquisition. data capabilities at improve make time allows same experience payments taken with Josh, approach Thanks, combined informed That to to did. been for all that platform consolidated goal we've and includes the experience managing with risk Bill the better, proprietary we been deliver time. volume. with entities the the associated from thing and the we've have capabilities for those since underwriting to we've risk the And we've day team Sure. our deliver payment that able transactions of and combined fast things risk integration in the actually customers us same out the simultaneously in of while decade. for acquisition I exposure order we a a that around the first the underwriting our think Yes, building great question. the is customer And that the to with management, shown more and decisions. And around It's combining risk appropriately teams over X that the asset a Divvy great leverage

to offer. good products progress everyone we're so successful we we with be about feel the way all serving doing really that that about making, but So balancing, a the and it's customers, is able in

Josh Beck

follow-up It of indirect some you maybe benefit like an a bringing customers? partners more point it's Do important an accountants. of tool in new from So of view. it's having accounting of certainly with for and Finmark then And envision on like the revenue Great. or maybe their work a you kind sounds maybe effectively synergies.

some the curious of Just synergies work may there. how

Rene Lacerte

I'll one. this Thanks, Josh. take

I just think accountants. with is the of of as reminder, the -- clients you're manage one multiple a that clients. manage strategic right at dozens tens, Accountants -- values

category providing services. they're there that what really is so client in the And we've helped define the advisory

And so what account they [indiscernible]. for those

you strategic actually digest easily that And small look provide to at weren't dashboards insights necessarily requires so the it, adviser business to the for client themselves. ability data, be and that understand attainable the your a

I help adoption. are going do value it's this integration we that will have as client drive something us and continued accounts it that well together, for so And adoption to we think for think once adoption accountant as

Operator

from Our Deutsche Bank. Bryan next question of comes Keane

Bryan Keane

the results. on Congrats

will little which the is moderating a volume, in you an can it's moderation, but us will If John, -- bit. only it impact it have talk versus transactions material we'll think to impact be a see? to I important transactions point about slight in, that see just to the hold, since we that transactions or holding a model? will are holding P&L of about sensitivity talk the

John Rettig

showed softer platform. run in TPV our financial well spending QX, as as is through the in even to volume. of the the They for operations monitor question, leverage important, mentioned, is use as a And overall of we've platform. our tools one the with some pretty that's metrics We platform than And to we little with they're closely. Bryan. transactions have value operating per you to as customer. do customers Thanks very even spend engagement has deliver us from And with in that and less the continue different profile, Bill the that slightly customers which consistent channel, our still last customer is terms last transaction customers a in it bit FI tells if results quarter consistent monetize if there, expenses results core other their that we customer period, excluding And seen pretty both year. for

So both of the transaction both we and to which obviously, foundation be is and and subscription growth our the continues price contribute have healthy customers so given our way fees, growth to our revenue use which variable in in fixed platform. fees, model

Bryan Keane

expect Or or about kind maybe up And recession, in bigger thinking then a deep even a how different maybe slowdown has one. versus held the it. revenues up? just it of shallow a would Got the scenarios, you how recession picture, to just hold model a for

the of some scenario what model? trying analysis do You sensitivity sense work. the probably of impact be to get downturn to the just a We're could potential a and

John Rettig

Yes. on a and we Bryan, fair the certainly time can scenarios. question, of have represents and outlook we that our of spent information is strong. quite our SMB customer It's I all think say we have What that which different health trends, available base, of recent the around is kind

be that the persists that going throughout some year. assumed spend have of moderation continuing We or fiscal softness there's that, to

economic In assumptions, severe terms assuming our of downturn. outlook set a not we're of

And think we've monitoring scope to So of well prepared that's the that, environment beyond serve of external what in. customer remarks, the at. in adapt that operating our as looked business to mentioned a situation we're base scenario I to scale closely, that's health we customers we're and we're outside and continue the we and of the still to positioned think that regardless the

Operator

next of Our Wong Ken comes Oppenheimer. question from

Ken Wong

Great. Fantastic.

on Finmark. Just question a quick

negligible, some impact out likely the that baked did being is revenue call You mentioned spend in. but

of you Just call wondering if margin earnings impact quantification out. that could there's terms in any

Rene Lacerte

we're going providing to great Ken. but platform operations, time, nicely the helping be where explicitly with over around to that. automation transaction, And a financial team, for Yes, product, over insights capability around Finmark a very we tell the numbers customers we time can question, a business. small you haven't it's shifting towards only not core is think as run better we do strategically talented Thanks for Finmark. our very quantified taking I fits provide

scale, at time, team the it's to provide stand-alone we're got the platform. They, the just a So in color product closes. the But continuing And out the stage. as building once more transaction over investment revenue-generating our and we'll obviously, small. business, very

Ken Wong

the And thinking enough. profitability, as guys there trajectory this about should expand that Or linear? margin assume of broken of kind into non-GAAP first that seasonality some should you lumpiness Perfect. quarter we given fairly of another we we question, work kind have is then be Fair the through kind our kind to is be Okay. models? of

John Rettig

We're say around the seasonal Well, transition QX March happens to year. patterns and for some and the yes, the what period. of historical provided from the December for that with fiscal That spend we color I'd during probably QX, can other has the But results use past expecting get of well. to our line continue. QX that, some usually you than as patterns impact on to to bottom numbers. some

Operator

of Our Jester comes Capital from next question Markets. BMO Daniel

Daniel Jester

Great.

Just a a quick point. one clarification and

call. that For some you out the of called spend, are reducing a couple noticed the in customers of that you've times the

going think that at could how usage I'm of themselves. look take payment Just are their ad the evolve valorem way forward. rate just the they wondering trying for you take for -- that's models, cost backwards? If to going if that about may they [indiscernible]

John Rettig

No, a spend their particularly trend. spending that The suppliers. in businesses, question. for haven't of more or the the transactions around but very with we Dan, witnessed high repeat discretionary rate softening less, seen Thanks, is with commentary categories really

see the of the still our the influence point. of more at payment It's across distribution and so be we a or lower in repeat not the transacting we've valorem seen So buyer XX% approximately the transactions between just something really supplier. that ad may It's are transactions absolute on of value. platform But payments recurring this they slightly dollar spend types, platform.

Operator

time next Bauch of SMBC. one comes for from question question. Andrew have only And our We more

Andrew Bauch

we are with from you in And far market to guess, unified the a one I if maybe to platform on underway reality? model bundled to talking now the X of and you Rene, Finmark just or really how give Bill you've impact being to product. pure that about X translate the assets expect go that an able how in way been an away that becoming can all us update another? from

Rene Lacerte

-- and build to to team, to and phases the wanting requires that mean one think each then about kind we first steps. able I be and And this. thing less in integrating really the really with for Sure. We integrate anything obviously that to to announced. the right value back-ends, customer have that organizations last talking about Andrew. different which And Thank see you, top time I look we just obviously, allows feel, to we one that insights. will being one obviously we're of brand get we then continue important. The of winter. and place the having on Finmark it experience. we process time acquisitions of the the financial is started any us we Then But at it developing takes of where customers their now importance And it. the takes and kind be time, it save that and thinking see, that as more platform. one operations see the spend other that to customer managing see start And

and to on develop of be term. mission operations their serve and the something platform, we'll to to work over millions and that continue we financial that to develop So essential that's continue intermediate coming businesses

Andrew Bauch

Great.

I X ask Is expense I'll just delivering peers environment? but is And of different straight mean know your a in seeing I triple-digit progress. Sounds impress. asked quarters before, current Divvy slightly accelerating Divvy kinds from there a way. about like growth heard it maybe been it's We've also similar management next-gen are in solutions results. to or are impressive something continues the of that that great

Rene Lacerte

I'd honing prioritized you're we results engaged get the to say customers. do have and go-to-market on as continue like seeing. work and we for the we hard that, And us, active

to product. on we sure customers the on And value obviously drives the the do when on using getting do is really And have, that, their so they cards are we opportunities them better. for everybody focused they spend make team how that manage that put and business

but opportunity is what early that going to the focus our is think that the we're across And plenty to across there the us core is customers. in of there earlier always the demand would demand I keep be than seeing large. for the on experiences, say and so solution driving is platform and Bill market, is And market you in

Andrew Bauch

core Bill well. it the And platform incubator a for being great

Rene Lacerte

a Thank investments position just us kicked We're today. have QX, say Thank businesses to run. growth for help large today. joining everyone, non-GAAP And of off great I making thanks, finance while millions you. and joining excited XXXX you. the delivering the of thanks for for future high about with for profitability them Well, Bill the want fiscal us to to we again opportunity long to us automate succeed.

Bill.com (BILL) 4 Nov 222023 Q1 Earnings call transcript