Company History and Evolution
BILL was incorporated in the State of Delaware in April 2006 with the goal of automating the financial operations of small and medium-sized businesses (SMBs). Initially operating under the name CashView, the company recognized the challenges faced by small businesses in efficiently handling accounts payable, accounts receivable, and other critical financial tasks. In November 2018, Bill.com, Inc. completed a reorganization with BILL Holdings, Inc., resulting in BILL Holdings becoming the parent entity.
Over the years, BILL has evolved its platform to become a comprehensive solution, catering to the diverse needs of its growing customer base. The company entered the market with its cloud-based payments platform that allowed SMBs to automate accounts payable and accounts receivable transactions. BILL has built sophisticated integrations with popular accounting software solutions, banks, card issuers, and payment processors, enabling its customers to access these mission-critical services quickly and easily.
In 2018, BILL introduced its cross-border payments product, giving its U.S.-based customers the ability to disburse funds to over 130 countries. This expansion into international payments was an important milestone for the company as it looked to broaden its reach beyond the domestic market. However, BILL has faced challenges in navigating the regulatory environment and complying with various financial services laws across different jurisdictions.
Despite these challenges, BILL has continued to grow its customer base and expand its offerings. In 2020, the company acquired Divvy, a spend and expense management solution, and in 2022, it acquired Invoice2go, a mobile invoicing and payments app. These strategic acquisitions have allowed BILL to further penetrate the SMB market and provide a more comprehensive suite of financial operations tools to its customers.
Financial Performance and Scalability
BILL has demonstrated impressive financial performance, driven by its ability to scale its business and capitalize on the growing demand for intelligent financial management solutions. In the fiscal year 2024, the company reported revenue of $1.29 billion, a 22% increase from the previous year. This growth was fueled by a 16% increase in core revenue, which includes subscription and transaction fees, as well as a 12% increase in total payment volume (TPV) processed on the BILL platform.
The company's focus on operational efficiency has also translated into improved profitability. In fiscal 2024, BILL reported a non-GAAP operating margin of 14.5%, a significant improvement from the previous year's 11.2% margin. This increased profitability has enabled the company to reinvest in product development, sales and marketing, and strategic initiatives, further strengthening its competitive position.
For the most recent quarter (Q2 FY 2025), BILL reported revenue of $362.6 million, up 14% year-over-year. Net income was $33.6 million, compared to a net loss of $40.4 million in the prior year quarter. The company reported free cash flow of $153.1 million, up from $121.8 million in the prior year quarter. Management attributed the year-over-year growth to increased customer adoption and expansion of payment products like virtual cards and invoice financing.
Financials
BILL's financial performance has been consistently strong, with revenue growth and improving profitability. The company's revenue streams are diversified, including subscription fees, transaction fees, and interest income from funds held for customers. This diversification helps to mitigate risks associated with fluctuations in any single revenue source.
In Q2 FY 2025, BILL delivered strong financial results, with 16% year-over-year core revenue growth and non-GAAP operating margin expansion of 3 percentage points to 17%. The company beat its past guidance, generating a free cash flow margin of 20% in Q2 2025.
BILL operates in three primary product segments:
1. BILL APAR (Accounts Payable and Accounts Receivable): This segment represents BILL's core platform that automates back-office financial operations for businesses. As of December 31, 2024, BILL had approximately 160,600 customers using its BILL APAR solutions. During the three months ended December 31, 2024, the total payment volume (TPV) transacted by BILL APAR customers was approximately $71.9 billion, and the total number of transactions executed was approximately 12.2 million.
2. BILL Spend and Expense: This segment includes BILL's spend and expense management products, such as the BILL Divvy Corporate Card. As of December 31, 2024, BILL had approximately 37,800 spending businesses using its BILL Spend and Expense solutions. During the three months ended December 31, 2024, the total card payment volume transacted by spending businesses using BILL Divvy Corporate Cards was approximately $5.2 billion, and the total number of transactions executed was approximately 16.1 million.
3. Embedded and Other Solutions: This segment encompasses BILL's solutions that are accessed through its embedded partners' platforms and other indirect sales channels, including its Invoice2go product. As of December 31, 2024, BILL had approximately 282,900 customers using its Embedded and Other Solutions.
In total, BILL had approximately 481,300 businesses using its solutions as of December 31, 2024. The company's total revenue was $362.55 million and $721.00 million during the three and six months ended December 31, 2024, respectively. This represents an increase of 14% and 16% compared to the same prior-year periods, respectively.
Liquidity
BILL maintains a strong liquidity position, with a healthy balance of cash and cash equivalents. The company's liquidity is further supported by its positive cash flow from operations, which provides flexibility for ongoing investments in growth initiatives and potential strategic acquisitions.
As of December 31, 2024, BILL had a debt-to-equity ratio of 0.41. The company had $1.57 billion in cash and cash equivalents, and $644.7 million in short-term investments. BILL also has a $300 million revolving credit facility, of which $120 million was available as of the end of Q2. The company's current ratio was 1.66 and quick ratio was 1.66, indicating strong liquidity.
Innovative Product Suite and Ecosystem
BILL's comprehensive platform offers a suite of integrated solutions that address the diverse financial needs of SMBs. The company's core offerings include accounts payable and receivable automation, spend and expense management, invoice financing, and various payment processing capabilities. By leveraging advanced technologies, such as artificial intelligence and machine learning, BILL's platform delivers intelligent workflows, seamless integrations, and data-driven insights to help SMBs optimize their financial operations.
One of BILL's key strengths is its extensive ecosystem of partners, including accounting firms, financial institutions, and software providers. These strategic alliances enable BILL to reach a broader customer base and provide a seamless experience for SMBs, who can access BILL's solutions through their existing trusted service providers.
Growth Opportunities and Market Positioning
The SMB market represents a vast and underserved opportunity for BILL. According to the U.S. Census Bureau, there are over 32 million small businesses in the United States, accounting for 99.9% of all businesses. However, many of these SMBs still rely on manual, legacy processes for their financial management, highlighting the significant potential for BILL's automated and AI-driven solutions.
BILL's market positioning is further strengthened by its focus on customer success and its ability to continuously innovate and expand its product capabilities. The company's investments in areas such as supplier solutions, accounting firm partnerships, and embedded finance have positioned it to capture an even larger share of the SMB financial operations market.
Risks and Challenges
While BILL has demonstrated impressive growth and market leadership, the company is not without its risks and challenges. The highly competitive nature of the financial software and payments industry, combined with the potential for economic volatility and regulatory changes, could impact BILL's future performance.
Additionally, BILL's reliance on strategic partnerships and integrations with third-party platforms introduces some degree of counterparty risk. The company must also navigate the evolving cybersecurity landscape and ensure the security and reliability of its platform to maintain the trust of its growing customer base.
Outlook and Guidance
BILL's strong financial performance, innovative product offerings, and extensive partner ecosystem position the company for continued growth in the SMB financial operations market. The company's focus on customer success, coupled with its ability to continuously enhance its platform, suggests a promising outlook.
For Q3 2025, BILL expects core revenue in the range of $317.5 to $322.5 million, reflecting 13% to 15% year-over-year growth, and total revenue in the range of $352.5 to $357.5 million. The company anticipates non-GAAP operating income in the range of $38 to $43 million and non-GAAP net income per diluted share in the range of $0.35 to $0.38, based on a share count of 119.5 million.
For the full fiscal year 2025, BILL projects core revenue in the range of $1.297 billion to $1.312 billion, reflecting 16% to 17% year-over-year growth, and total revenue in the range of $1.454 billion to $1.469 billion. The company expects non-GAAP operating income in the range of $207.5 to $222.5 million and non-GAAP net income per diluted share in the range of $1.87 to $1.97, based on a share count of 115.5 million.
As BILL navigates the dynamic financial technology landscape, its ability to adapt to changing market conditions, address emerging risks, and capitalize on new opportunities will be crucial in maintaining its position as a leading provider of intelligent financial solutions for SMBs. The guidance provided demonstrates BILL's focus on balancing growth and profitability, as well as their confidence in the execution of their strategic initiatives to drive long-term durable growth.