If you reconcile the difference between Bill.com’s overall transaction revenues vs. its organic transaction revenues, you’re basically left with Divvy’s numbers.
This is because Invoice2Go is more than 90% subscription revenue as they are still in the early stages of monetizing invoices through payments.
What we’re left with is this:
Last 3 quarters of overall transaction revenue
Organic transaction revenues
But what’s important to point out is that the $10.3 mil number only includes 1 month of Divvy’s contribution because of the date the acquisition closed (h/t Muji & Bear).
“In addition, our acquisition of Divvy closed on June 1 and therefore our reported fiscal fourth quarter results include one month of Divvy’s results. At times during this call we will discuss organic or stand-alone results which exclude Divvy to help listeners understand our organic performance.”
Over the past two quarters, Divvy’s YoY growth has been 187% and 188% respectively. So we can use that to triangulate what a full Q4 of Divvy’s revenue could’ve looked like.
180% growth is ~9% monthly compounded growth.
So if $10.3 mil was the last month, we can take 9% off of the previous two months which would be ~$9.4 mil and ~$8.7 mil.
Adding all three up, the full quarter may have been something like $28.4 mil.
So then the last three quarters of Divvy revenue would be:
$36.9 mil (30% QoQ)
$49.5 mil (34% QoQ)
Management did say that Divvy’s growth would be 132% for the upcoming quarter, citing travel slowdown:
“For Q3, Bill.com organic core revenue annual growth is expected to be approximately 67% on a stand-alone basis, while Divvy’s spend management revenue growth is expected to be approximately 132%, which reflects lower seasonal card spend in Q3 for the advertising and travel categories and an estimated take rate closer to the top end of the 230 to 250 basis points previously discussed.”
But the point is that for the past two quarters Divvy’s QoQ growth has been over 30%. Two data points doesn’t quite make a trend and management has told us to expect Q3 to be a little lighter but the numbers do look good.
I also dug up the acquisition SEC filing when Bill.com bought Divvy: https://www.sec.gov/Archives/edgar/data/1786352/000119312521…
It notes that Divvy’s annual revenue last year was $69 million. I think it’s possible that Divvy will do well over $200 million for this year, maybe even $225 million. At a $2.5 billion purchase price, that means Bill.com bought Divvy, which will grow 200% this year, for 11-13x forward revenues.
Not a bad deal!
All in all, I think the acquisition of Divvy has been amazing for Bill.com and it’s great to see Blake Murray (Divvy’s founder) stick around and become Bill.com’s Chief Revenue Officer. This is the exact opposite of what happened when Teladoc bought Livongo. Glen Tullman and company couldn’t get out of there fast enough.