Another Look at Bill.com

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Bill.com was once a board favorite here, known for its “sticky” user base, high growth numbers, and an executive team helmed by industry leaders. Many of us on the board built very large positions, with Saul, Bear, and others approaching the 20% mark.

However, it’s been a rough journey for most shareholders, with the stock currently down 32% YTD and sitting at just 15% of its all-time highs in November 2021.

That being said, that’s in the past—let’s re-examine their position today.

Last week, they reported Q4 2024 results, which I thought were better than expected. They had guided for revenue of $320–330M, which would have represented 8–11% YoY growth. They came in well ahead of that at $343.7M, or 16% YoY growth. They have consistently been beating guidance for the last few quarters and have also guided for $346–351M next quarter, which would represent 13–15% growth. It seems as though growth is re-accelerating, and I expect them to continue to exceed the top end of that range again pushing toward 20% growth.

Now that the Fed has signaled it’s time to cut interest rates, this should be a tailwind for Bill.com, whose customer base consists of small businesses that are much more rate-sensitive. This will help Bill.com continue to re-accelerate growth in its core business (with the notable headwind of float revenue decreasing as interest rates drop).

Other highlights:

  • They have been FCF positive for eight quarters in a row.
  • They announced a $300M share repurchase plan (they just completed a $234.5M buyback).
  • Most importantly, both the CEO and CFO made insider purchases today; the CFO increased his total share count by over 15% with a ~$1M purchase, while the CEO purchased 2.1M worth of additional shares.

I was out of Bill altogether for quite some time but restarted building up to a 5.1% position starting on 5/3. I think it is at a very attractive price for a modest growth company that is re-accelerating.

Curious if anyone else has taken a look at this company recently.

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A board member, Brian Jacobs - also just increased his holdings by ~10% with an additional 1.35m purchase over the last two days.

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Hi RikiMaki,

You make some excellent points and i particularly like seeing the CFO, board member, and the CEO eat their own cooking and buying shares.

Free cash flow is solid and offers them opportunity to make strategic acquisitions as they eluded to
John Rettig, BILL President and CFO stated,

“In fiscal 2025, we plan to make targeted investments that accelerate our strategic priorities and ability to capture the large, greenfield market opportunity that we are serving.

We believe these investments will reinforce our industry leadership and position us to deliver significant, sustainable revenue growth and margin expansion in future periods.”

i may be jaded by some of their past reports and the extreme deceleration in Revs so i have difficulty seeing more than a leveling off.

  1. Core and Total revenues continue to decelerate, down to 16% for each. As these revenues have decelerated so has investor sentiment and the share price. :

Core Revenue Increase YoY

Q4'24   Q3'24   Q2'24   Q1'24   Q4'23    Q3'23    Q2'23    Q1'23    
16%    17%     19%     24%     33%      45%      49%      83%

Total Revenue Increase YoY

Q4'24    Q3'24    Q2'24   Q1'24   Q4'23    Q3'23    Q2'23    Q1'23     
 16%      19%      22%     33%     48%      63%      66%      94%

-----------------------

  1. Total payment volume and number of processed transactions remains muted and decelerating and Transaction revenues are a large portion of their revs
    Also, Bill’s revenues are sensitive to any economic downturn.
  • Total Payment Volume in the Q4 increased just 10% YoY, the same as it did last quarter.
  • They processed 28 million transactions during Q4, increasing 19% YoY compared to a 20% increase in transactions last quarter

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  1. Competition has heated up as i see that Intuit just reported well, though muted results with raised guidance… Paycom reported similarly muted results as this whole sector appears to be struggling to satisfy investors in a slowing economy.
    Offering AI based solutions appears to be the latest theme in the sector.
  2. Soft Guidance, we see that Total rev guidance for next quarter does not yet indicate an upswing from the aforementioned dwindling. ;^(
  3. Also, FY’24 YoY total revenue Guidance was for 16%-18% and they did report that 16% total revenue you mention, so i was disappointed by this years guidance of 10%-12%, along with flat YoY core rev guidance.

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Bill’s software as a service platform focus on helping small and medium-sized businesses with payments and billing processes may do well as the economy improves and is a strong founder lead enterprise.

BILL customers report saving, on average, 50% of time on bill pay thanks to their artificial intelligence simplifying the payments process .

Still, i will continue to observe their performance over the next few quarters before committing to reinvesting.

Best, kevin c

Stocks I Own:
aapl, amzn, axon, celh, elf, goog, isrg, meli, nu, nvda, ttd, smci, tmdx Dividend: avgo, MA

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Following up on my post after the last earnings report, Bill.com has once again delivered a pretty solid quarter. Last week they reported Q1 2025 results; let’s dive in and take a look.

Revenue: They guided for 346-351m, they came in at 358.5M (18% YoY) (4.13% sequentially)
Free Cash Flow: 81.5M (41.6% YoY) (10.3% sequentially)

They are guiding for 15-17% growth in core revenue both in Q2 as well as FY25. They seem confident that with time and strategic investment they will re-accelerate revenue above the 20% mark. When specifically asked by an analyst:

“So it would be fair to say that you guys - yes, would it be fair to say you guys are still believers in that sort of longer-term path back to a 20% plus growth rate?”

The CEO response:

“We absolutely are believers in the conviction that we have around driving growth for multiple years ahead. And I think this is something that we’re - we’ve demonstrated that we have those capabilities.”

The CFO response:
“Yes. I mean, look, we’re obviously a growth company going after a large emerging market, and we expect to accelerate revenue growth from where we are today. If you look at our prepared remarks, we provided a handful of updates on key initiatives and the early impact that we’re seeing from those initiatives. This only increases our confidence and conviction in our ability to accelerate growth.”

As I mentioned last quarter, both the CEO and the CFO have made insider purchases when the stock was severely beaten down. Since then, the stock is up ~60% and up ~95% from the August lows.

After 2022, I have personally been a little more cautious of throwing money at overly high growth, unprofitable businesses. I have not bought or sold any shares since August and will continue holding in the meantime.

Rick
BILL - 4.1%

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Thank you so much for recommending BILL. Your post was really well timed. I built up a 5% position after reading the post and have had a 63% return so far. It look like BILL’s business metrics really have stablized as the management pointed out.

Luffy

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