Expectations and Macro Impact

Hi all,
please see below my thoughts on

Exchange Rate Risks:
According to 10-Q “a weakening US dollar would have an immaterial negative effect.”
Conclusion: We are in times of a strong US dollar. So if anything this will have a minor positive effect for

Inflation Impact:
According to last CC “we do not believe that inflation had a material effect on our cash flows and operating results during the three months ended March 31,
2022. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through increase in prices of our product offerings.”

Further, “in inflatonary times, customers are seeking cash management control” (such as

And, “it is likely that inflation had a positive impact on total payment volume but overall immaterial”

Conclusion: High inflation likely drives adoption of solution as a means to get transparancy about spending and cost saving opportunities. This positive effect should offset a negative effect due to decreased SME spending confidence.

Rate Hike Impact:
Every 100BPS would result in $30-35M annual float revenue
Conclusion: Overall positive (but immaterial)

Overall conclusion:
The three big macro uncertainities that all companies face at the moment seem to be a net positive for
I personally find this very encouraging and positively suprising and hope this bodes will for their upcoming quarter results.

Given the qualitative assessment above I expect revenue for to come in > $200M for this quarter.
That would represent a roughly 10% beat to the midpoint of their guidance and 23,2% QoQ growth from the seasonaly weakest quarter.
I do not really have an opinion regarding bottom line and leave that to the experts here :slight_smile:


Great post StockFanatic and I agree with you.

Here are some additional thoughts from my side:

  1. In the current macro environment, someone have concern that BILL might slowdown more than other SaaS companies given that they were negatively impacted in Covid Jun 2020 quarter, but let’s dig deep into it - IMO, the conclusion is just opposite:
  • To analyze what really happened to BILL in that quarter, I think we need to look at growth for BILL’s core revenue, not total revenue as BILL still had a fairly large (12.6%) float revenue in Mar 2020 quarter, while that percentage dropped to 7.8% in Jun 2020 quarter (it was 15.6% in Dec 2019 quarter) => the drop in float revenue was due to Fed cut interest rate to 0 on Mar 15 2020
  • As I only had BILL’s core revenue number from Dec 2019 quarter, I have BILL’s core revenue growth (at that time all organic) in 2020 like this:
Mar 2020 Jun 2020 Sep 2020 Dec 2020 (QoQ)
9.2%     **7.7%**     12.9%    19.4%

Mar 2020 Jun 2020 Sep 2020 Dec 2020 (YoY)
63%      **54%**      53%      59%

  • From here, you will see BILL was actually very resilient in the worst Covid Q2 quarter, only slightly down in QoQ basis and still grew 54% YoY!
  • To elaborate this, if you compare to one of the boards favorite stocks DDOG, actually they had a much greater slowdown in Covid Jun 2020 quarter than BILL in both QoQ (from 15.5% to 6.7%!!) and YoY basis:
Mar 2020 Jun 2020 Sep 2020 Dec 2020 (QoQ)
15.5%    **6.7%**     10.5%    14.7%
Mar 2020 Jun 2020 Sep 2020 Dec 2020 (YoY)
87%      **68%**      61%      56%

  1. What differences between this recession and Jun 2020 quarter and why it is a tailwind for BILL but not a tailwind for others (I think StockFanatic also had these well covered in his post)
  • Since Fed cut interest rate on Mar 15 2020, it significantly reduced BILL’s float revenue therefore at that time the interest rate was a headwind for BILL from total revenue point of view
  • But now we are in a rate hiking cycle and we can foresee BILL’s CY2022’s float revenue would be significantly higher than what did last year => hence now increasing interest rate becomes a tailwind for BILL, while obviously other SaaS companies don’t have such revenue portion to be benefited from
  1. On the worries of SMB market in a recession environment/potential macro impact
  • I highly recommend everyone who is interested in investing in BILL or holding BILL already reading BILL’s Bank of America 2022 Global Technology Conference CC on Jun-09-2022, when they already had more than 2 months going into FQ4 2022. And here are some of comments giving by the CEO on this topic:
    - I think the first thing is when we talk to customers and partners, we hear a lot of people wondering about it, but not a lot of data necessarily saying that there’s an issue today. And what we know also from the pandemic is that SMBs are extremely resilient. And if you think about it, like if you’ve gone out to start your own business, you are a problem solver. And you will find a way to get through this and that’s kind of the mindset they have.
    - So I have faith in the SMBs. I have faith in their ability to kind of adjust. And I also know, to your first question, that what do we do to help? And so in our solution, our ability to provide a 50%-plus time savings as well as more knowledge around how to manage your cash flow, having the content and the context to be able to make those decisions, that ability for us to be able to do that means that in inflationary time we are a counterbalance to inflation. We give customers, one way that we think about it is, if we save people 50% of their time, you can do twice as much work with the same staff. That’s super powerful in this market, and we think it’s going to help be the second tailwind for the digital transformation that’s happening.
    - We haven’t seen really signs of macro influence on spend patterns or engagement from customers at this point. Most of the and even Divvy and Invoice2go customers are service-based businesses. And that means the majority of their expenses are people-related one way or another, payroll, whatnot. And the way our platform is used, it’s kind of the essential back-office utility for managing what’s mostly fixed expenses. There’s certainly some discretionary spend that happens that could be influenced by the macro environment. But so far, we see pretty consistent engagement and activity from the customer base.

Hope this helps.



Zoro was 100% spot on his analysis and conviction on BILL, and the macro scares I had in mind completely proven wrong and blown away by the results and guidance! I wanted at least 30% QoQ Divvy tx fee growth and they delivered it, among other metrics. Revenue and profitability guides are excellent.