BILL - Earnings call 1 2024 | Bill.com Holdings, Inc.

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Operator

Good afternoon, and welcome to BILL's First Quarter Fiscal 2024 Earnings Conference Call.

Joining us today for today's call are BILL's CEO, Rene Lacerte; CFO and President, John Rettig and VP of Investor Relations, Karen Sansot. With that, I would like to turn the call over to Karen Sansot for introductory remarks. Karen?

Karen Sansot

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

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

solutions. financial non-GAAP non-GAAP additional Invoice-to-Go to release obligation which disclaim performance to receivable Please company's refer and this Form during and regarding periodic GAAP today's call, in for additional quarterly Divvy, accounts press will our we SEC, at our our to on on BILL's discussion, issued call, We any and filed recent Planning Form exclude the disclosures press spend and that refer measures. times any financial with both reports these the Note to XX-K to will and management BILL's called GAAP statements. On formerly reports of we measures. the most update reconciliation results FinMark expense including release please discuss refer to today's the forward-looking text report today stand-alone annual For XX-Q. Financial and

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

René Lacerte

Thank you afternoon, Good joining for Karen. everyone. us you, today. Thank

grew Revenue to operations XX% year-over-year. profitable category Non-GAAP income a strong delivered of the also QX for time $XXX the was net BILL redefine million platform. exceeded our and at first with integrated the quarter, growth strong and margin. XX% launch the continue financial in During

on to October. While macro see quarter, strong that our through to spend late started in we the adoption customer pressure more our and performance business outlook intense and continued, continued exceeded related has our

higher cash have become and As credit result available rates markets, of tighter a interest less and SMBs. for affordable capital and

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things at taking continuing challenges to actions ability are North are macro new and serving most adjust work we get our headwinds are focus short-term to financial model environments continue help combined know these businesses of operations market. on exceptional this execute in past, temporary confident the our for navigate behind challenging confident is to dynamic millions and our not We their building suppliers to to history to are in when more this our given business the them SMBs the and with innovation, often in We for our while we transform to will environment hand. long-term the SMBs we stronger. will them, long-term opportunity and invest are value while forgone forget create that only their them the I'm strength Star, as of responding in our and business. ability an to will of

than members. operations. millions solutions hub in our their of accountants, also of and volume. be empowers operations, Today, business leading more category and to ecosystem BILL's finish their XXX,XXX and have use financial payment automate businesses and financial transact central SMB's than [indiscernible] an more trust of annualized billion of network platform cash serves and their thousands flow. a better so SMBs We can they built help $XXX to manage institutions

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platform quarter, rolled our unified to customers. out This we

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Bank This integrated best-in-class for making are of banks are label card, by pay has we white available with this BXB executing a are expertise embedded a payment the U.S. such of deeply in delivering solutions of nation's us SMBs. of our to our as many the more the more inside platform the of largest our enabled now platform approach, and and card transact solutions capabilities automate of accounts, modalities, with payments. X addition bank In experience use their in our help partners, the Bill's Through of and great Bank, leading to operations digital and host newest happy virtual combined of more payment SMB Bill millions all agreement our for in serve better efficiently and partners, reach Regions approach largest financial dollars its of with share solution payments. AR leverage is with our partner, to institutions. Today, new financial SMBs we've of U.S. institutions international reached we of AP solutions the will our banks and will customers of XX commercial Regions is market. to payment our to the that which example trillions an bringing a to broad segment power I'm Together collaborative

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for the thrive. businesses is and partners software objective essential Our be to to operations

All BILL want are are on help thank they our SMBs of us this business. change us to with at and to We by way potential. the energized customers do partners this journey who

Now I'll over John. turn call the to

John Rettig

Thanks, Rene.

in updated growth small transaction Core of of or million, subscription XXX% that fiscal climate, I what seeing was up we uncertainty revenue, revenue delivered was environment net $XXX increased year-over-year. $XX XX.X%. financial year-over-year. revenue and an businesses, million creating our of million, for XX% income is year-over-year. strong was year-over-year. the challenging In we XX% $XXX includes and Subscription XX% our are million, QX results. provide Total was up business margin discussing was $XX quarter for overview Before Non-GAAP will and outlook first a representing X% results. gross revenue economic Non-GAAP approximately revenue which

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to turning Now outlook. our

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in to expense of the Larger network choose payment have addition, suppliers our lower-cost payment started speed. In at sometimes increasingly methods,

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to for increase to to in For increase fiscal expense approximately XXXX, we payment XX% payment total X% year-over-year. expect year-over-year and card BILL volume stand-alone volume spend approximately XX%

environment economic in longer take led prioritize acquisition many to has initiatives, to the customer small remained businesses digital While has strong recent quarters.

approximately quarters, FI Over expect to the we per $X,XXX the the solution. BILL next the be stand-alone couple Pay of Bill Simple and excluding adds Intuit of channel quarter, net sunset

Now turning to outlook. financial our

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

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

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

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

expect stock-based to million and capital expenditures We million. to $XX $X approximately approximately expenses we million in be compensation QX, of $XX expect

to Moving year full guidance. on

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continue will operating We expenses. to with vigilant be

the we to growth. approximately of revenue be XX% For $X.XXX billion XX% to year-over-year billion expect to $X.XXX which fiscal XXXX, total in range represents

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fiscal of million. million net in for $XXX income year $XXX range to XXXX non-GAAP the We expect to report

outstanding. income share We per expect to $X.XX of million shares diluted to weighted non-GAAP on net be XXX diluted share count $X.XX based a average

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

out adjust to most We to expect to and of to are build have be expect and closing, success environment the approximately and the realities. small in capital We choppiness for commitment because are they historically year. In we set underserved, to we increasing million an current the $XX $XXX economic SMB the the been market expenditures full million of operating SMBs is of stock-based expenses pressure million XXXX increasing under for fiscal for businesses approximately $XX unwavering. compensation to our

Our our ecosystem while diversified platform enables business profitability. growth model, which investing and continue includes and macro in revenue helps balanced subscription, delivering sheet float balance build strong transaction to mitigate and and our us and headwinds

than We are through we closer improve, economic this to conditions and We become created to are carefully well to solution for we are take the the be believe positioned to navigating its We will now are questions. ready their SMBs de cycle. we the automate category, financial from to a market. And company this we benefit tailwinds. macro much mature best beginning when positioned operations. Operator, facto

Operator

Instructions]. [Operator

today question comes Bryan first at Bank. Our Keane from Deutsche

Bryan Keane

is how What all anything kind go-forward on versus outlook guess the thinking landscape? I seeing that are versus structural much macro-driven guide competitive mine is competitive? just that's your you of the or at pure lower based just of about changing on macro? Anything

René Lacerte

saw opportunity you, market continues and having The see the that we the competitive, kind by in This competition. been SMBs continue structural Thank to quarters. more the is probably hub talked have been not for increase, that of X or scrutiny at instead or discretionary from managing needs and how October, market in the discretionary the the in What last over in impact we getting any Bryan, the our of solving difficult And around and impacted large. late perspective, to environment have we your front definitely today. around What question the hub, they've we the X about a ecosystem is us seen, that we've question. whether spend. businesses macro. opportunity spend see the is from do financial we that the is to And businesses the to into central large see continued quarter what is that's operations and of increase. with just something see

we And so when and perspective, businesses else. you that anything the all add? your they this any through have here, challenge you to payments actually And of to that's you'd challenge the have. think sometimes. way comes health color And we up see more we end it. macro their like health it's from But by impacted the and definitely the that's supporting kind of that then John, see is than

John Rettig

Sure. I sensitive trends would tell really retention, is customer associated things. number customer us for related businesses overall the quarters in. talked are continuing environment being operating now measures And just good for of of we've that the some customers, spend soft. add, very is Bryan, One platform we to are to deliver value see we that but engagement, a a with couple that small other about environment

some entertainment, our core to spend There see and around like of a an of weakness environment and and strength recent assume to going soft in travel some on facilities see most are rents areas things as around that and estimates continue that the we're AP of spend signs forward. spend. example, pockets We around card quarter going forward office and advertising in that

competition as environment today. we as structural and things to can it optimize envelope behaviors and like by to spend So results do seeing nature that or feels we're of adapt environment, and more in that influenced the of the us we're cyclical to customer the supplier than is current situation to or much within to feels macro and up this total, related significantly which obviously the gearing

Bryan Keane

Or have and you any the to a volumes? cut cut as quick last out just year, ahead bone do I here now like turned up. and some this should to we feel shoe there's on guess you're do enough the this another bit I of just headwinds, And it. if businesses be little macro know sense given be follow-up. drop to you numbers you of the spend where you've numbers. numbers cutting Got in visibility, a year, of

John Rettig

behaviors It's suppliers particularly and our considered, large Brian. obviously more All network we've a things evolving starting that. over from who like dynamic variables suppliers, both exert and choices environment, to we've and seen payment-type taken customers things these Thanks, are operating rest of payment types. into consideration some our in the assumption estimates some it the both we of headwinds associated certain reflects there's with the continuation that we the plus in, year, that for payment as volume think of and updated environment adoption we're and influence

So we that as account we've all seeing. tried can, take the of into we're to best variables

Operator

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

Bradley Sills

just macro. that's you're the when kind you what in guys saw Can you Were sustained the on saw categories late certain sounds Maybe that see see Okay. this? just of comment here in you It started and a your softness on quarter question like another expecting you started to on to this there guidance. you deceleration. reflected

firms midsized small businesses, behaving? they're mid-market, out versus business called commentary on small You holding? how and any categories just then And

René Lacerte

the -- saw Brad. back just adoption I say strong platform. first, Thanks, Sure. and across The mean, I step we

we're integrated We the together the about obviously the started AP there. and So to were on spending happy with adoption We've platform. get able seeing expense platform that.

you saw larger more will, there's overall, choices And if we having from the what over of scrutiny, spend whole quarter so tail -- payment that over their businesses spend that have. how they in the very were was end the perspective, and

to probably little bit current given can scrutiny in John it we think that do was how the and more translated, continue a on late macro expect that color but environment. I exactly quarter, provide the

John Rettig

We've of emerging seen Yes. a couple trends.

U.S. A payment transactions around their buyers do think transactions, we is just types. the are an that it has our both customers there. payment to suppliers dollar of payments, examples first that making relates On business and to increase choices and everything as FX are we've in international that the and suppliers couple on versus The and payments, seen with things composition for acceptance time, payments that product, doing opt the that's we've on Vendor that large the led part to sensitivity to macro cost pressures may card our and larger outs nature. overall some more the and impact and of exist dollar virtual costs, same At card on suppliers virtual of Direct seen of businesses. and their

we that call that managing our become second The credit not environment how we're and proactive was card program around and earlier the increasingly sure expense on just mentioned to lines taking component credit for the credit significant with this product. that spend associated of the on the think expense with but a card in we and risk somewhat That has incremental on of effect right our spend we've associated make in trade-off environment. spend creating product, headwind that's

Bradley Sills

one the Divvy more, largely may, here. if the just most to start you integrated Is And I about? are on opportunity that What launch complete, expect hold platform take of you from excited here? integration cross-sell the to do

René Lacerte

of and wallet, wanted during we good. so able that for Yes, that more we're teams kind But of getting opportunity. intend. and we The The just It's kind integrated of be were to quotes to we and they customers are the our included customer speak, their quarter. of on there that obviously Brad. what initial would Group be that the platform. more using both cross-sell up Bonadio platform, Thanks, running the expecting the and ways spend put to customers would is the launched traction that both the hoping [indiscernible], are so do their and we on

push time, of the base. is across that we exciting ability more that the customer more payment platform thing other share The think for products wallet and integrated for about to, drive us over having is when super us the

to being that in going things do be to of example an by customers able suppliers involved we're to so help able pay their And connecting with is be to card.

card any manage will back and by about that we But one all to be having bill help might from already rebates able customer card card a place to rewards of in to transactions. the the to We participate spend happen adoption consistent also of that expense more those supplier for have customer, coming to payments. product. the able So or if a think their drive by think of spend the you in approach pay card in are the be pay

something So this over really has think just that then customers. the building an how the of because and last example platform happen expand that the a the and capabilities you been XX category, capabilities like build business, this overnight X about your you step I and defined enhance and that actually back of and doesn't platform you health experiences having the years, the matters we've category when for

And the continue about. integrated payment that I'm so platform with the to think for make actually them something That's participate. SMB, for pull this it excited and we the experience serve acquisition, starting going financial is when I eventually, super really got we're importance that what is more having to customers us SMB excited choices the our capabilities step the sell that the for partners. And that that institution that drive the our going be available the and back having adoption, when to and thing hub about the to and that comes overall that we're of our application obviously is about available we're experience to to market we for be and enhanced into putting to Divvy financial we for accounts

Operator

question UBS. McGinnis from next from Our comes Taylor

Taylor McGinnis

So implies TPV guide your sequentially. down X%

how compares to which as greater if guide then the things you that an And a get quarter-over-quarter, TPV the understand can we seen the assumptions worse, quarter the start the talk to at maybe what So of you've trying so I'm just assumes about in far can like And the second TPV unchanged the the and assumes acceleration saw looks is half of year there. last than appears follow-up, it -- guide year. for if October?

the there as well? and talk puts some So takes through can you of just

John Rettig

Thanks question, for Sure. the Taylor.

down across quarter-to-quarter that reflects you last are forward, On over we that the estimates digits, looking at suggested. some the business the TPV think And as experienced going of we've I trends quarters. several low the single

changes. or strength of the around But deterioration have BILL. TPV core significant there any pockets for some frankly, seen haven't We been,

the at looking range. something card XX%, year-over-year, On payment volume, we're that flat up in quarter-to-quarter, kind of XX%

wallet. stronger of penetration at one we a components good that a still to That's doing and leads we're customers spend think in increasing So job performance even share our our lower TPV environment. of the that of increasing

We're pretty something right doing some about year. we moving good talked we to able that's of of other about feel we're parts that we're good so And in continue with. now success be operating the that And earlier. that seeing the throughout assuming business versus environment the that spend the of the we'll stability

Operator

from comes from Our Wolfe . Research. next question today Darrin Peller

Darrin Peller

stock I acting cyclical. or market structural more like now. mean, down back look right the questions something than cyclical. than to the with KPIs to that's magnitude after more like It's don't like acting And is on is it's have something I go because your cyclical market reality the the is

again, at look mean, adds we that have I customer the KPIs, So strong. if you look pretty

rate guidance payments? the quarter volume next there trends suggesting we guide [indiscernible] seeing I you're your for other expansion all any KPIs and mind? that was of the on you're quarter. the . take inputs this is should that's Is had the spend beat. about that You is really the that and informing the spend just effect is it maybe guess in But your side trends keep strong sequentially, really that indicating Or

John Rettig

Darren. question, the for Thanks

appropriately. I the parts identified think you have moving

into spend we're We ad to spend the the in a more adoption we've to for muted drive is well. of new That a to That the all. and customers relates certainly continue to seeing factored more some our light trends notwithstanding be the drive year certainly our sign continues environment. in softer that into feel customers. incremental the awareness, of something and about environment. it estimates good positive environment, system buyers valorem go introduced obviously lower of also of And friction ability up are not on reach to We We It's do ability see there, our rest acceptance. of for products. the cost as to between and suppliers our macro desire

mentioned earlier. that. they We product make relative the things by headwinds some or things payment so that say, and to FX card continue we're increasing overall progress like transfer across with though, our to of our Vendor pay with happen payments real-time Direct I'd products needle versus move great Those I like business the or that be whole small like to the, volume seeing and don't instant

and are new in to -- their It in costs. payment a So spend things nature. and we suppliers that. and flows how that necessarily optimize It's feels in these like maybe like retention or have of not changes transitory, customers these think behavior change cyclical initiatives

about I evolve this think we through period. our good feel So pretty ability to particular

René Lacerte

macro this I pattern remain related. Yes. for to in as action a just to I And continue well year going and now. think add that's see rates high, businesses been holding over would have that really drive more that's just wait

continue at we business, underlying so so see fundamentals the do more our for look that business. more continue And and to do much and drive to the of opportunity to historically. things across choices the business we when -- customers haven't to can to drive to success we the are we do leverage can payment things for and we and done there many that

for have it road adjusting environment. And some macro that so maps -- these a is of is this in the but -- will we pulling definitely we things, and are

Darrin Peller

Okay. very in your see plans or terms the quickly, now terms in in on changes sort. by we spend this And the given your year, for trends anything what of expectations your of any investments/profitability just customers

René Lacerte

Darren. you, Thank Yes.

growth. continue DNA that both teams and believe the profitability it, to to really of make it's And both about we're the the is committed the how that to think is progress the have how the the -- we're think our products strength how because are and the path years. over We we've manage with for opportunity on John of built. it. business portfolio of We It's on. there we I profitability business business I've about the It's built to

to goals to the set. we order need that we the drive that we manage will in So expenses

Operator

Huang from question comes Tien-Tsin next Our JPMorgan. from

Tien-Tsin Huang

better talk On the to about the make we about -- talking weakness selection we've on versus penetration of you it understand a been much maybe the ad choices. of the the can spend how outlook, sense that impact. is that tied the the valorem on does revision some to maybe so the payment products of the And adverse of lot guidance elaborate

John Rettig

indirectly, is per that. per and we're the cards on transaction that of adjustments like you BILL last any question. much actually higher across back expense to for is spend we this like you better growth the expense that if as great spend our for products, the related which to did customer I core credit our related monetizing -- adjustment ticket for worsening proactive actual The larger, majority our do look products directly we've customers making lower Thanks mid-market versus the quarter all overall the Yes, year, base. say made at I'd product, customer, estimates of in type know, virtual step although has attempt and increased lower the saw and quarter, volume mitigate core then increased our ] sizes in to by with That's to usage, that spend and of FX, slightly [ result macro. exposure product mostly And average and mentioned. a see customers. line to things as as an product. In the we penetration some conditions our size of

the customer and trends platform more these opportunities think behavior that fiscal modular that And this disposal, a to create can like are at the to our throughout related approach drive with trends to expecting about of levers are things have and making. awareness directly make progress those pricing larger of or year. we the and many we think to as some our packaging the we're we do more choices unified launch And that are with year. including We customers that persist suppliers

takes considered. puts So those we are and some that of the

Tien-Tsin Huang

sounds I And and did standards. them. you? down you sure on understood might bit It [indiscernible] When the Okay. up make the a to to quickly tighter change the that credit on the that. for I expense timing credit little reversing before ability like just and spend get of want side side. dial maybe the

John Rettig

the with year. the making been adjustments more of frequent of last for frequently customers' thanks the doing financial more Yes, reviews position and We've over them course clarifying engaging our question. and actually

last in didn't the just quarter. start this So

more made However, month $XXX,XXX, we a a reduce the of and so some we things reducing we Previously, where about consistently, a have is open our to significant exposure. sizes will they have things $XX,XXX that if more minimize and aggressive line using $XX,XXX talked like customer adjustments to line we line like that. doing buy, to

last with avoid credit managing will, I evolving because be the but think, fiscal we of we're over limits expect year, you bit we've them tighter, so, for if a of to the remainder to these over been been, on more the aggressive So some the adjustments credit really little the and losses. year we've last or quarter

Operator

Our question William comes from Goldman next Nance Sachs. from

William Nance

guess that how among of in -- some is something some away you can found noted. wondering of do we headwinds on -- a supplier this of they're on. was I can they that do some this could how their I concentrated you guys suppliers little they it's cheaper flattish the with to square is mechanism the of if have environment? expect ]. the rates have talk [ historical reverse it take to more should in this like guidance what this on suppliers. you a payments to payment discussion time? now And Like to it take the we change kind accept spend the going -- But about that time kind some you Is point bit how does of rate? like stickiness Maybe take on at Or just way of for larger rich from maybe just -- And had that do kind to have preferences? these more be and behavior changes is of a sounds

René Lacerte

the about well Thank addressing, long the the ]. are when international -- we you, serve suppliers as opportunities suppliers, -- [ side. are of them suppliers. think suppliers. side Ian They're as and a card different. suppliers way, to are small the large the By there's It's it's tail virtual how there's both on

when and, So today, impact choice address the more the to we to pull drive seeing that there the we're in are said, for road at I portfolio. us across payment opportunities look like map

using going have leverage obviously integrated road in the drive so create And is focus to the drive payment do platform And to payment adoption. the to we'll leverage strong to map. then on we'll And economics continue first products. operating adoption we of that then we're thing pulling

kind continue specific So drive of opting the to out, that potentially one. John of payment take lots our specifically of I'll products of question let suppliers on to the penetration opportunities

John Rettig

Yes.

the case. back trends So we've that recently about seen to were Ken, increase adoption. think absolutely to or to in more reversed point We that the linear or revert that's

ago are was in product important adoption us environment increasing seen ago more X really An becoming where years this were, Those or improvements say, than year example macro when roughly. be numerous can a they It's areas in drive virtual adoption. unprocessed So we've help drive and have even or for cards rejected passing of transactions reason automated number that enough rich -- a we're the not reconciliation. we actually that part for to is data of go some that instances not cost. would

example to easier it we from when payments. enhancements to to much suppliers was that just product as as so make for our ad remove of make accelerating possible to some payment friction the mentioned one and -- adopt improvements, are And suite from Renee going valorem

just unified increase and to and to enhancements, year, capabilities and ability a If pricing more and incentives, going increasing suppliers involves fiscal them. relationship them within We I within that packaging have payment on leaning look speed, in now we're that we'll these earlier. into we're the involves of we we delivering some that that. the at start of have platform, be products. think also offer if payment all We product change other And can that mentioned proposition with value tools for whole the the see volumes this

William Nance

could -- sort some just lease streams. area weaker, stronger things helpful. to sounds it. around you then guys a more out That's spend, have numbers a And advertising, exposure volume is a question, put like like super just strong cyclical rent payment you of It and digital Got T&E the maybe maybe called weaker. of

size payment around we put just like maybe cyclical the of could call less some kind out out overall volume. as you other categories we numbers like if and So any that more separate kind try versus to streams of of

John Rettig

serve we we just diversified spend XX across more specific have, generally of like we mean all well a other XX expenses haven't or on than we categories share or base things say, customers customers pretty it, I Wallet. have to as of Yes. across percentages percent call provided because industries, or

T&E, quarter out stands our for the because the In we're movement, last in that base case there. slightly spend. like types That's the relative still of total of expense card billion spend large all out most I seeing which called to other small was that flat that's it's down. categories strength what product. It we're But So $X to seeing specifically around are enough spend, and of spend.

category that I'd spend Now is company's the down and transaction basis. facilities lease environment. payments AP companies the everything even that on And average, low their but reductions of related that's on same this digits example aggressive a the are in still businesses per per transaction. is is rethink as automation true side spend like overall rethink small physical single we seeing footprint percent with with the card say in a T&E on rent and

Operator

from from Andrew question Citigroup. Our next comes Schmidt

Andrew Schmidt

the around more would love are going dig on business things a the like into to spectrum, of but on sounds side attrition that. still into want maybe smaller I just business, more seeing little businesses pretty health. engagement bit dig like that any to And front I the on involuntary is back health just it SMB SMB strong, changes are you the characteristics, retention topic.

René Lacerte

Andrew. you, Thank

financial platform, strong this seeing category. definitely continues, good success our across institution in core net obviously, are quarter adds demand X,XXX We the

from So a John their like is And lots when retention the we Divvy -- spot. changed their be said, it's the we're spend belt. where from to spend seeing begin the belt. the to the -- nothing It to perspective, and referenced larger ability And most acquisition. of capabilities larger with. really tighten Those that opportunity have that's tended has expense businesses in And perspective. businesses think we're from to that drive tightening about adoption. a It's I good businesses

why [indiscernible] so And to more customers because and the our from platform, hear we of mean, opportunity what and That's Everything is adopting and call. doing the engagement using that is where -- lives kind businesses to the is continue are through. make expand see adoption SMBs the the larger that we grow that's whole, I that trends. easier of the they're kind to those This of we something of the they're and we there's a comes include types reach we platform. an high. believe as in their them impact

Andrew Schmidt

Anything resources, the it. talk that. it's platform, unified go-to-market? of product then around internal Can you whether that the bandwidth that resources, philosophy, like of with additional Got those And helpful. I'm lot things how sure frees completion front redeploy a up about would you be

René Lacerte

Yes.

continue is that the Another question. we that of to we focused what products have, the we're enhance we and do of on great expand payment experiences iterate how A faster lot the have. customer portfolio

the have So with into before. one, one desktop the not platform did of integration now there's that experience we unified and mobile across

next to customers, but the over mobile out out not experience, our rolling here. on is example, quarters for it that's the Now customers. few all for

because and working by high. the to efficiently excited opportunities So of of get lift. I iterate it had said it of about super are schedule. than effectively, calendar 'XX. got that we'd heavy like continue of was Originally, it that. was said, you we enhance. it lots we number are end done teams and the done happy ahead The earlier of we We a is have faster the to we opportunity got done enhance ideas kind and to And

customers as we'll So we move be for forward. doing that

Operator

Our Weiss Stanley. next from question from Morgan comes Keith

Keith Weiss

think bit the will, a it FI that ability getting a to going the get little impact about think a we terms entire kind equation positive of the went Last because and sort or channel about in you lot should should bit. could adds? to where frame the changing about in of got of good where that are of could roadway, we it of on be you excited the of way? partners. talked we customer customer that of after Like from go to focus. a lot -- thinking a How should of what the about of with we milestones investors new if kind have kind that time Maybe a base sort relationship quarter, a of the new a How one transactional different of customers major

René Lacerte

Keith. you, Thank

actively We enhance It's customers. of working that to the so out with are we're capabilities doing. can our actively partner their we to roll all this something that

the general, excited easy platform in and that we're all of the financial to making has will like about does being an that partner integrated We do are happen back just we It's -- category time. But I available products important. to about in manage seeing not it these from financial update have our their this we're to for created the have and ecosystem on kind have we accountants think opportunity we that the and I pipelines, place something to that build. taken that's all what you year. but to what would all But we've payment when unique. this for platform announced we of things way hub I the for fiscal is we're we're one in on not particular and financial one integrated the SMBs that's that when to in seeing the opportunity from just these step this but getting hear developing, actually ecosystem are partners operations. like the BILL. one people have accountants, operations the different the pretty of give about I It's that timing And I something ecosystem. not can now seeing just think a about partners what this it's partners overnight, that later our add think having on, really super to working It's us those

just we the all So opportunities in one front partner. really of it's It's us. not see

Operator

Our from Kenneth Suchoski from Autonomous. next question comes

Kenneth Suchoski

extrapolating December in both gets I the and October you then to on it understand assuming and better wanted the sort what there? are and I TPV from you the guidance. worse stabilizes guess, trends Or November selection? payment-type assumptions seeing of just Are you're in

John Rettig

question, Thanks for the Ken.

have So in quarter. the second late into trends Those a the continued taken from we've first the look at quarter.

that the adjustment through -- adoption some around in It's the behavioral start some of the see mentioned, the get thing fiscal parts and to stabilization quarter. year. we've rest moving that's the And begin the environment, type persist is trends tried of to assumption composition. really or assumptions that's those throughout some in for the ahead that the We overall, payment of as rest QX stable in pretty of I Our spend We'll our and there overcome mitigate drive happening changes. that is to that of half to year now. incremental capture year those second some but

throughout year the the first not something or to, early for are in calendar we've we assuming example, seen this we So the in continue and that. December quarter that quarter But like the late year. it's trends deteriorate anything expect

Kenneth Suchoski

the declining? to rate Okay. assumed of I for mean And the point, stable this Is transaction in John, of environment guidance type there of what take being quarter-over-quarter? card And just year? on offer solutions it headwinds. other that some capital is an is in rest I of the like offset guess, Or or to is it by pay opportunity sort working those some

John Rettig

Yes.

half other assumption second question for down we about fourth is our And quarter in second So of that's your true. products, in for part exit the that year the the such second we grow first above then to -- slightly quarter were the and the to XXX% the monetization be your quarter. our of where

and we historically. including the ahead. think significant expansion, happening those of this have some we can have have pay drivers card highlighted newer as monetization years payments, been drivers not large some really in but -- growth FX think working later capital. trends virtual products, be only that we examples So transactions But year, because of with by card just good of and

valorem able about in mitigate partially least we portfolio newer be of at the we've trends talked payment that approach with take products some quarters these this some seen ad of and So that prior recently. payments. we've we expect to to

Operator

next comes Our Sandler. from Brent from question Bracelin Piper

Brent Bracelin

seeing for the you. of fractures Rene, in guess, stress a number sector SMB We're emerge. I

quantify in of [indiscernible] spend. in slowed Can these start September? spend are cut And you October you the how now the much nondiscretionary I versus October, SMBs seeing to think last Paycom week. in SoHo

René Lacerte

to are you that best for expenses do professional when you a probably is for large to have talk the economy, question. a a to a dedicated Yes. manage whose business wait-and-see There pattern. look for -- going have holding Thanks, down way job Brent, is about us is it finance how

are segment larger why the larger more expense the about that's of our platform seeing of we business. rest so our keep bill more has And talking the and that impact core which we for why of than and spend year the the platform businesses, of businesses from

side businesses stable. the kind the just some for have pressure, downward And sizes. larger some And very there's so managing new where It's at look all the small and as us expense we have but additional overall discretionary. which stable of managing is that business said spend, spend it's when businesses we're why well have, managing portfolio their that is John of also we've said fortunate we maybe generally customers of generally as the that's we has most they the because are

-- lots impacting step And larger the back the customers, large of guess, them. more portfolio opportunity than macro is I the portfolio. is of today, is businesses have this within So we the a rest more of the

Brent Bracelin

one that helpful second like increasing into quick wallet Super in landing? overall a John. you're for actually in XX% guide hard XX% follow-up there. growth, assume rate. are And then does The the just does looking you for still growth landing half those soft look for the Or color baking implied

John Rettig

Yes.

is year-over-year assuming we very on quarter, a our all portfolio, muted have, payment We long a onto digits more per but basis the as payments their have, down with We're automate of the that slightly to helping the think, trends that a record the volume allows customers, that about small platform. of whole overall volume our continue, payment on customer businesses penetration products per payment TPV we processes mid-single those customer. I increasing in and more track talked bring the them second with that

macroeconomic that this have little trying sort bit. we or other So as shifted forecast the impact forward said, from behaviors to overall seen our the in here a we're of not predict we've than customers environment, which, projecting

wallet will experience So mentioned improvements assuming earlier. and or partially mitigate we'll ships offset of share with and we're and of be product continued those those improvements Renee through that to the able some continue progress some

Operator

question Jefferies. comes from from Our next Samad Samana

Samad Samana

the currency going maybe of then suppliers? payments through spend? was local that -- just John, it thinking that's spend of know handful of in commentary like suppliers? in valorem isolate how both But triangulate, So of towards the and ad level ad concentration at valorem it hundreds was types. cross-border accepting suppliers actually Is $X and of if what billion, where in Because is that get right? from if that mix amongst end concentrated could X.X%, maybe, the a card terms it that, themselves, trying payment So selection I on a addressed the the gave payment type are of that look think within virtual I'm if right? are to and you that is terms I just like, about of type from we to X.X% So concentration quarter of talking the transactions fourth you X.X% if the card? about you I what's in certain there annualize number virtual

John Rettig

Yes. Thanks for question the Samad.

So across I'd a it's without suppliers concentration. very a number say on significant diversified payments, cross-border large of

virtual like it's things who not telecoms that do large providers, are With BILL. have used tens we by things, direct that, national of thousands the of or customers thousands it's of hundreds. examples vendor whether On think -- of or card tens utilities suppliers, or and side many are of said, which like or suppliers

particular, spend like overall look one But sort or that the number in relationship. a products, for to payment any concentration but there's that any feel step back we many suppliers. of of of and of there's our anything at don't we a small outsized if So profile very like

Samad Samana

the And question you. the asking maybe on then side. Got spend

card choose for recurring maybe typically that is versus specific is, level. trying if that what the this that So of selected just ad valorem more concentrations may using Once something think if customer payment I I'm that type to make virtual if are ACH about I are a in. that of type payments the it's is guess wondering made versus higher fee different payments more to the discretionary there's ACH. are again, at understand

John Rettig

higher like through great not a a say clarifying which there card be discretionary and mentioned spend therefore, That's of to I'd that involves virtual Yes. which that spend been percentage T&E, question. all of more flows are things and expense our sensitive might because physical that's some strong. program individual before, cards, cards, we

set supplier BILL up that's transaction bank one-off Vendor even it's for that's card ACH side, an versus debit a that a On the a differences a between, card case, be we automation who's program, virtual or the payment one for to don't an Direct see some might auto AP to payment say, driving. auto supplier. the an delivered charge In account virtual or significant

how paid, whether want other size, when most have there's get do and other and differences they where transaction payment. deciding don't takes it's to than card Here's suppliers to take want variables a the limits think various buyer other big I I cases, to manage buyer. their that that In action.

Operator

all we have Those today. are time questions the for

remarks. to back like the Rene any So I'd to for now final call turn

René Lacerte

joining for on financial of our you constant to thank look focus forward Thank automating We great over you, built and We've the today. business them, SMBs. serving the us years joining operations a everyone, us. for for again

Operator

for conference Thank today's joining. concludes you very much call, That everybody.

You may now disconnect your lines.

Bill.com (BILL) 2 Nov 232024 Q1 Earnings call transcript