bill.com's Revenue

[tiger350]

Hi everyone,

I’ve been lurking on this board for about half a year now, and it’s been an invaluable resource to me as a relatively new investor. Thanks to Saul and everybody else on this board for collaborating and freely sharing knowledge about great growth companies. I switched my portfolio to a “Saul-style” concentrated growth portfolio late last summer, and I plan to continue learning from the investors on this board. I thought I’d make my first post on the board regarding some thoughts and questions about bill.com’s revenue (an 8% position in my portfolio).

BILL made some recent relatively large acquisitions of Divvy and Invoice2go, but for the purposes of this post and to get a clearer picture of the business performance, I will be discussing organic core revenue.

BILL defines their “core revenue” as subscription revenue + transaction revenue. As of their most recent reported quarter, this core revenue makes up 99% of their total revenue.

The subscription revenue portion of their core revenue is the recurring, predictable SaaS revenue that we all know and love on the board. However, this subscription revenue only makes up 30% of their total revenue.

The part of their core revenue that I want to focus on with this post is their transaction revenue. This now makes up 69% of their total revenue, and its proportion of total revenue has been rapidly increasing the last few quarters.

Their yoy organic core revenue growth is high and has accelerated nicely the last several quarters. The last 5 quarters (oldest to newest), their yoy organic core revenue growth has looked like this: 53%, 59%, 62%, 73%, 77%. So very nice acceleration. This, combined with their strong net retention rate of 124%, makes up the bulk of my investment thesis for BILL.

However, it seems like most of this revenue acceleration has come from their transaction revenue (as evidenced by transaction revenue’s rapidly growing proportion of total revenue). This transaction revenue is probably not as consistent/reliable as the classic SaaS subscription revenue. So on one hand, this high transaction revenue may make BILL a riskier investment compared to our other SaaS companies, as it may be more volatile and vulnerable to macro/market conditions. As well, I’m not sure how sustainable this acceleration of transaction revenue is.

On the other hand, this transaction revenue could represent an opportunity for BILL that other SaaS companies don’t have (similar to Snowflake’s consumption revenue model). The digital transformation that’s happening across businesses could act as a tailwind that keeps this transaction revenue growing. After all, without this extra revenue source, BILL’s revenue growth would certainly not be accelerating as much.

That being said, I feel that the tailwinds fueling this accelerating transaction revenue may not be as explosive or sustainable as the data explosion fueling SNOW’s consumption revenue model.

This is certainly a more complicated story than the pure SaaS companies with near 100% subscription revenue, so I personally wouldn’t want an outsized position in this company at this time (even if their organic core revenue acceleration is very compelling). What are everyone else’s thoughts on this? How do you think about BILL’s transaction revenue and its consistency/sustainability?

-tiger

[stocknovice]

Hi, tiger -

Good post. I see BILL’s revenue situation the same way you do. The fact so much of it is transaction based creates a variable that doesn’t apply to many of the other firms discussed here. That must obviously be taken into account if deciding to own it. Below are my original thoughts from when I purchased it in November. They still hold true today.

BILL – A new position, Bill.com is a billing software firm that “simplifies, digitizes, and automates complex back-office financial operations for small and midsized businesses.” It’s basically a one-stop shop for monitoring and managing Accounts Payable, Accounts Receivable, spend management, payments, and cash flows. The company is also working on features for budgeting, reporting, and analytics. It earns revenue mostly from subscription and transaction fees along with a tiny amount from interest collected while holding funds for in-progress transactions.

In its most recent quarter, BILL earned $116M for 152% YoY growth (78% organic). That includes $35M in subscription revenue (+43% YoY/39% organic) and $80.6M in transaction revenue (+319% YoY/+127% organic). The phenomenal growth in transactions has pushed that revenue stream from 42% to 69% of total revenue over the last four quarters. During that same timeframe, payments volume through BILL’s platform has surged from $28.8B to $46.9B (+63%) while gross margin has improved from 76% to 83%. That suggests a considerable amount of operational efficiency being created as the company scales.

Bill.com has augmented its core business with two recent acquisitions. The first was Divvy, which is the main reason for the surge in inorganic growth. Divvy focuses on expense reporting and spend management including facilitating business-linked credit cards. Divvy had a hugely successful Q1 with standalone revenue up 187% YoY. Granted much of this increase is likely due to the return of business travel since last year, but management expresses confidence it can get many of BILL’s current 126K+ customers to join Divvy’s existing 13.5K. If so, there’s plenty of room to run for this new service.

The more recent acquisition of Invoice2go just closed this quarter. Invoice2go is a mobile-first solution providing smaller businesses and sole proprietors with a simple invoicing, estimate, expense tracking, and online payments solution. Geared more toward ease of use, Invoice2go has 226K+ customers in 150 countries. In addition to potential cross-selling opportunities as some of these smaller users grow, Invoice2go will provide management with potential insight into international possibilities for its other products. The ultimate vision is to turn Bill.com into “the all-in-one financial operations platform for entities ranging from the smallest of businesses to midsized companies,” including financial industry businesses themselves like banks and accounting firms. So far, BILL appears to be making progress in this direction.

One thing to note though is all this top line goodness has yet to positively influence the bottom line. As shown below, cash flows and profit margins that were improving slightly over time have dipped sharply the last two quarters due to costs for the Divvy and Invoice2go buys. Since it’s easy to see how these acquisitions augment BILL’s core business, I’m temporarily OK with the dip. However, I’m expecting these metrics to quickly get back on track toward challenging and eventually clearing breakeven.

 
non-GAAP Operating Income					% Revenues				
	Q1	Q2	Q3	Q4	YR			Q1	Q2	Q3	Q4	YR
2018	 	 	 	 	 		2018	 	 	 	 	 
2019	-$0.77	-$0.07	-$1.11	-$3.18	-$5.13		2019	-3.5%	-0.3%	-3.9%	-10.0%	-4.7%
2020	-$3.51	-$4.51	-$3.79	-$0.47	-$11.50		2020	-10.0%	-11.5%	-9.2%	-1.1%	-7.3%
2021	-$2.25	-$2.66	-$2.13	-$6.20	-$12.20		2021	-4.9%	-4.9%	-3.6%	-7.9%	-5.1%
2022	-$11.14	 	 	 	 		2022	-9.6%	0.0%	 	 	0.0%
												
non-GAAP Net Income					% Revenues				
	Q1	Q2	Q3	Q4	YR			Q1	Q2	Q3	Q4	YR
2018	 	 	 	 	 		2018	 	 	 	 	 
2019	-$0.44	$0.33	-$0.14	-$2.40	-$2.64		2019	-1.9%	1.3%	-0.5%	-7.6%	-2.4%
2020	-$2.76	-$3.60	-$2.40	$0.29	-$7.70		2020	-7.8%	-9.2%	-5.8%	0.7%	-4.9%
2021	-$1.42	-$2.09	-$1.74	-$5.82	-$10.00		2021	-3.1%	-3.9%	-2.9%	-7.4%	-4.2%
2022	-$14.07	-$17.00	 	 	-$78.00		2022	-12.1%	-12.1%	 	 	-14.4%
												
Operating Cash Flow					% Revenues				
	Q1	Q2	Q3	Q4	YR			Q1	Q2	Q3	Q4	YR
2018	 	 	 	 	 		2018	0.0%	0.0%	0.0%	0.0%	0.0%
2019	 	 	 	-$1.87	-$3.95		2019	0.0%	0.0%	0.0%	-5.9%	-3.6%
2020	-$2.38	-$1.77	$0.82	-$1.10	-$4.43		2020	-6.8%	-4.5%	2.0%	-2.6%	-2.8%
2021	-$2.36	-$9.23	-$1.58	$17.79	$4.62		2021	-5.1%	-17.1%	-2.6%	22.7%	1.9%
2022	-$21.13	 	 	 	 		2022	-18.2%	0.0%	 	 	0.0%
												
non-GAAP Free Cash Flow					% Revenues				
	Q1	Q2	Q3	Q4	YR			Q1	Q2	Q3	Q4	YR
2018	 	 	 	 	-$10.40		2018	 	 	 	 	 
2019	-$3.51	-$1.07	-$1.07	-$2.60	-$8.25		2019	-15.7%	-4.1%	-3.8%	-8.2%	-7.6%
2020	-$4.54	-$2.92	-$2.09	-$6.95	-$16.51		2020	-12.9%	-7.5%	-5.1%	-16.5%	-10.5%
2021	-$8.56	-$17.32	-$5.38	$14.68	-$16.58		2021	-18.5%	-32.0%	-9.0%	18.8%	-7.0%
2022	-$25.48	 	 	 	 		2022	-21.9%	0.0%	 	 	0.0%

In addition, it’s important to recognize Bill.com’s recent return to hypergrowth is being mostly driven by its more variable revenue stream. Its recurring revenue signals like subscriptions and RPO aren’t nearly as attractive as many other software firms. Transactions revenue is much more dependent on usage/volume, which also makes it less reliable and harder to predict. That in turn can increase the likelihood of an earnings surprise…or an earnings disappointment. Management states, “while we haven’t seen any material impact [from supply chain issues] to our business to date, we are monitoring the situation closely.” So am I. Consequently, transactions revenue will be the #1 signal I’ll be watching with this position.

For now, Bill.com’s revenue is small enough to give it some leeway while it focuses on growth. It only needs to show leverage before the market loses patience. Prior holding Livongo trended this same way a couple years before exploding upward once leverage kicked in. Of course, prior holdings Smartsheet and Twilio did the same before the market decided it was tired of waiting and rerated the stocks down. I’m of course hoping Bill.com mimics Livongo rather than sliding toward Smartsheet/Twilio. This allocation will stay on the smaller side until BILL clarifies its path.

[OldNovice65]

Tiger,

While the transaction revenue may be ‘variable’ I think you also have to think about what those transactions represent to the BILL customer and their business operations. Bills come in and have to be reviewed, approved and paid. That is why they buy BILL in the first place. It (in theory) is reducing their operational cost to automate something that otherwise is done manually and often ‘tracked’ via emails.

It would surprise me if a customer that is happy with BILL would reduce the criteria used to put transactions through the system. With approval rules and the ability to make decisions in an automated fashion, I would think they would broaden over time. What is interesting there is that they might not buy more ‘licenses’, but be handling more items.

Once a customer is familiar and happy with this type of service, they don’t typically decrease their usage as it saves them time (and money) when using it. Will the number of bills vary from month to month? Yes. In a downturn, the customer might have fewer bills to pay. They might also reduce staff (and thus licenses). Conversely, there will also probably be a seasonal uptick in their transactions due to increased buying (and the associated review/approvals needed). So if CYQ4 sees a significant jump in transactions and thus CYQ1 a slight decline, it wouldn’t surprise me. That side of the revenue will be more variable as a result.

The bigger issue here from our perspective is the NRR. From a services perspective, there is limited room for BILL to increase subscription fees over time within an established customer unless they expand their offering. Once you hit their $69/mo/user plan, no more to buy. Growth will be more tied to the customers growth through transaction count and maybe adding more users. Larger customers with multiple divisions are probably the exception here. I could see scenarios where BILL may only be used in select Divisions and thus has some growth potential. It’s not the type of service though that ‘every employee’ would ever be licensed to use. I would guess that this wouldn’t be ‘explosive’ growth for the majority of the established customer base.

Consumption pricing is definitely a concern with SaaS. But that is also part of the ‘value’ they tout to their customers…only pay for what you use. If the service provided is worth it, they will use it.

In this case, I think what you have to ask is if you have faith that a happy customer will stay BILL over time or not. If they stay, I feel their transactional revenue is ‘sustainable’.

OldNovice
Long BILL with a starter position

[brittlerock]

I too just picked up a 2% starter position in BILL recently. While it is true that the transaction revenue dominates their total revenue stream and it is much less predictable than the subscription revenue, there is a correlation between subscriptions and transactions. The transactions are coming from subscribers. I’ve not performed an analysis to determine what the correlation is. Nevertheless, it seems apparent that subscribers increase their utilization over time as the transaction volume is growing faster than the subscription.

One thing that is somewhat worrisome is that there doesn’t appear to be much opportunity for BILL to expand their offerings. Unlike most of our SaaS companies that have a land and expand business model, it appears that once a subscriber is fully subscribed to the tune of $69/mo they have bought all the BILL services there are to buy. This puts a lot of pressure on them to keep adding subscribers. The only avenue of expansion is increasing transaction volume as discussed previously.

In summary, this is a fairly low conviction position for me. I’ll be watching this one closely to determine if I want to add to my small position or exit and put my 2% to work elsewhere.

[ZoroSGInvesting]

As I mentioned before in my twitter thread on BILL’s investment thesis - it’s all our BILL’s dominance in the accounting and SMB space and accelerating & explosive transaction revenue growth.

Similar to the tailwind for SNOW and DDOG (data is always more and more to drive the consumption growth although they are not 100% subscription based), since BILL’s solution is super sticky and mission critical (probably their solution is the last thing for the customers to cancel if they are really in a trouble), the usage will for sure grow significantly over time - their customers are moving more and more legacy paper/manual transaction to BILL’s platform and this is all organic growth (Divvy’s acquisition just further accelerated the transaction growth). SHOP has basically similar playbook (GMV driven) but IMO BILL is even better as they have much much higher GM (Non-GAAP 83.3%!!).

Here is how to think about BILL’s transaction revenue growth. Transaction revenue = TPV x take rate. Hence there are two sources to drive transaction revenue growth:

1. TPV growth
2. Expanding take rate

First let’s look at TPV growth. BILL’s financials do have strong seasonality based on history, in QoQ basis, Jun and Dec quarters are strong, Sep quarter is a bit weaker and Mar quarter is weakest. (similar to other GMV/TPV businesses).

         Mar2019 Jun2019 Sep2019 Dec2019 Mar2020 Jun2020 Sep2020 Dec2020 Mar2021 Jun2021 Sep2021
TPV(B)   17.9    20.2    22      24.9    24.3    25.4    28.8    34.8    35      41.7    46.9
TPV(QoQ)         12.85%  8.91%   12.99%  -2.22%  4.50%   13.23%  21.00%  0.57%   19.14%  12.47%
TPV(YoY)                                 35.79%  25.74%  30.73%  40.00%  44.00%  64.17%  63.07%

From here we can see BILL’s TPV accelerated significantly post-covid from Sep2020 with much stronger QoQ TPV growth. The last two quarters are not all organic with Jun2021 including 437m TPV from Divvy and Sep2021 including 1.5B TPV from Divvy and 100M TPV from Invoice2Go.

To give us better perspective, I excluded these TPVs to get the organic TPV growth picture as below:

         Mar2019 Jun2019 Sep2019 Dec2019 Mar2020 Jun2020 Sep2020 Dec2020 Mar2021 Jun2021 Sep2021
TPV(B)   17.9    20.2    22      24.9    24.3    25.4    28.8    34.8    35      **41.3    45.3**
TPV(QoQ)         12.85%  8.91%   12.99%  -2.22%  4.50%   13.23%  21.00%  0.57%   **18.00%  9.69%**
TPV(YoY)                                 35.79%  25.74%  30.73%  40.00%  44.0%   **62.60%  57.51%**

The conclusion is the same - in an organic basis, BILL’s TPV has accelerated significantly to 57%+ in the last 2 quarters.

Then let’s look at organic take rate (I only managed to find transaction revenue up to Dec2019 quarter):

                               Dec2019 Mar2020 Jun2020 Sep2020 Dec2020 Mar2021 Jun2021 Sep2021
Organic transaction revenue(m) 13.0    13.8    15.2    19.2    25.7    29.3    36.1    43.7
Organic TPV (B)                24.9    24.3    25.4    28.8    34.8    35      41.3    45.3
Organic take rate              0.05%   0.06%   0.06%   0.07%   0.07%   0.08%   0.09%   0.10%

So take rate has been steadily improved in the past 2 years, in fact it is doubled!!

Above is all organic analysis. For investors all follow BILL closely, we know that Divvy acquisition was really a game-changer. It massively increased BILL’s TAM, TPV and take rate. Yes, Divvy’s take rate is much higher. See what Divvy bought to BILL (below is the actual take rate including Divvy and invoice2go):

                       Dec2019 Mar2020 Jun2020 Sep2020 Dec2020 Mar2021 Jun2021 Sep2021
Transaction revenue(m) 13.0    13.8    15.2    19.2    25.7    29.3    **46.3    80.6**
TPV (B)                24.9    24.3    25.4    28.8    34.8    35      **41.7    46.9**
Take rate              0.05%   0.06%   0.06%   0.07%   0.07%   0.08%   **0.11%   0.17%**

WoW, with Divvy, BILL’s take rate increased 70%(!!) from 0.10% to 0.17%!!

Then last thing, this is what the management was saying the last CC on how they improved their take rate and how Divvy further gave them a turbo boost:

John Coffey

So my question is really a modeling question. So if you define the transaction take rate as the transaction revenue is divided by the TPV, since the IPO, this will seem like a pretty straightforward calculation and analysts could make their own assumptions on payment sources and how that would go into the take rate.

Broadly speaking, how should we think about the impact to the take rate now due to the acquisitions of Divvy and Invoice2go? Just kind of thinking broadly about what those big moving pieces are and how they affect the numerator and denominator here?

John Rettig

Sure. Thanks, John. I’ll take that. Yes, we have had significant expansion in our take rate, as you defined it since the IPO as we’ve seen a pretty steady progress with a changing payment mix, more adoption of these ad valorem-priced products that increases our transaction revenues.

And I’d say the Divvy card product continues that trend. It improves upon our monetization because they’re spending businesses, the gross fees that we receive on those transactions is much, much higher than average Bill.com kind of take rate today.

With that said, we don’t optimize or manage the business to try to produce a take rate result. What we try to do is drive customers to adopt electronic payments. And the measure that we look at more often around our progress is just how are we growing overall transaction revenue per transaction, which was approximately $5 in the quarter, $4.97, up about 69% year-over-year, and you’ve seen pretty steady growth in that.

And I think both Invoice2go and Divvy and obviously, the portfolio of Bill.com products positions us pretty well to continue to drive expansion in that metric.

Zoro

[PaulWBryant]

WoW, with Divvy, BILL’s take rate increased 70%(!!) from 0.10% to 0.17%!!

Zoro,

This is incorrect, I believe. It looks like you’re comparing the Total Revenue (including inorganic) with the Organic TPV. If you use organic for both you come up with something like 0.09%. Still an improvement – the trend is up!

But Divvy is really interesting…

Divvy TPV this last quarter was just 1.5b. Divvy transaction revenue was 36.6m. So the Divvy take rate is 2.4%. When Rettig says it is “much, much, higher,” he’s not kidding!

Bear

[Neverstoplearn]

I recently just completed an interview for a mid-senior level position at Bill.com. While I got the offer, I opted to decline the offer (not related to Bill.com at all rather due to personal reasons to have a more relaxed job).

Bill.com focused on the initial growth on SMB and it’s a well oiled machine for them. Over the last year to 18 months, they have been focused on moving up to mid-market and they have experienced tremendous success with it. My job would have to be build out a team to improve the midmarket customer experience during the onboarding phase. My final interview was with the CRO and I drilled in on the growth prospects and without missing a beat his response was his increased demand from the midmarket is accelerating. While the churn for SMB is high for Bill.com, the churn is much lower for midmarket clients.

Neverstoplearning
2% position in Bill.com after having gone through the interview process and having been impressed by the company (Although RSUs would have been much more lucrative, lol)

[ZoroSGInvesting]

This is incorrect, I believe. It looks like you’re comparing the Total Revenue (including inorganic) with the Organic TPV. If you use organic for both you come up with something like 0.09%. Still an improvement – the trend is up!

No Bear, I believe I was correct and I did list out take rate for both organic and inorganic in my original post.

1. This is organic take rate trend (only last 2 quarters were affected):

                               Dec2019 Mar2020 Jun2020 Sep2020 Dec2020 Mar2021 Jun2021 Sep2021
Organic transaction revenue(m) 13.0    13.8    15.2    19.2    25.7    29.3    **36.1    43.7**
Organic TPV (B)                24.9    24.3    25.4    28.8    34.8    35      **41.3    45.3**
Organic take rate              0.05%   0.06%   0.06%   0.07%   0.07%   0.08%   **0.09%   0.10%**

2. This is inorganic take rate trend:

                       Dec2019 Mar2020 Jun2020 Sep2020 Dec2020 Mar2021 Jun2021 Sep2021
Transaction revenue(m) 13.0    13.8    15.2    19.2    25.7    29.3    **46.3    80.6**
TPV (B)                24.9    24.3    25.4    28.8    34.8    35      **41.7    46.9**
Take rate              0.05%   0.06%   0.06%   0.07%   0.07%   0.08%   **0.11%   0.17%**

Hence compare to the take rate without Divvy for Sep2021 quarter, which is 0.10%, it is now way way higher (70% higher!).

Zoro

[PaulWBryant]

Zoro,

From Bill.com’s Q3 call:

Looking at payment volume for the quarter, we processed $47 billion in organic TPV

So I think with Divvy it would be 48.5b inorganic TPV.

Anyway, disregard, because I am nit picking. We both agree, Divvy is huge for them.

Bear

[ZoroSGInvesting]

Bear, I think you were correct - I took all the data from their ER press releases.

In the latest Sep2021 quarter, this was highlighted:

Processed $46.9 billion in total payment volume (“TPV”) for Bill.com customers in the first quarter, an increase of 63% year-over-year. Also processed $1.5 billion in TPV related to card payment volume for Divvy and approximately $100 million in TPV for Invoice2go.

So 46.9B TPV turns out to be the organic TPV (I thought it was total TPV but you got it right as it was confirmed from CC that this was organic) and inorganic TPV shall be 48.5B.

As a result, I need to update all my tables as below. In fact, with the updated info, the TPV organic growth prospect is even better!

Total TPV growth (with acquisitions):

         Mar2019 Jun2019 Sep2019 Dec2019 Mar2020 Jun2020 Sep2020 Dec2020 Mar2021 Jun2021 Sep2021
TPV(B)   17.9    20.2    22      24.9    24.3    25.4    28.8    34.8    35      **42.1    48.5**
TPV(QoQ)         12.85%  8.91%   12.99%  -2.22%  4.50%   13.23%  21.00%  0.57%   **20.29%  15.20%**
TPV(YoY)                                 35.79%  25.74%  30.73%  40.00%  44.00%  **65.75%  68.64%**

Organic TPV growth:

         Mar2019 Jun2019 Sep2019 Dec2019 Mar2020 Jun2020 Sep2020 Dec2020 Mar2021 Jun2021 Sep2021
TPV(B)   17.9    20.2    22      24.9    24.3    25.4    28.8    34.8    35      **41.7    46.9**
TPV(QoQ)         12.85%  8.91%   12.99%  -2.22%  4.50%   13.23%  21.00%  0.57%   **19.14%  12.47%**
TPV(YoY)                                 35.79%  25.74%  30.73%  40.00%  44.0%   **64.17%  63.07%**

Total take rate (with Divvy acquisitions):

                       Dec2019 Mar2020 Jun2020 Sep2020 Dec2020 Mar2021 Jun2021 Sep2021
Transaction revenue(m) 13.0    13.8    15.2    19.2    25.7    29.3    **46.3    80.6**
TPV (B)                24.9    24.3    25.4    28.8    34.8    35      **42.1    48.5**
Take rate              0.05%   0.06%   0.06%   0.07%   0.07%   0.08%   **0.11%   0.17%**

Organic take rate:

                               Dec2019 Mar2020 Jun2020 Sep2020 Dec2020 Mar2021 Jun2021 Sep2021
Organic transaction revenue(m) 13.0    13.8    15.2    19.2    25.7    29.3    **36.1    43.7**
Organic TPV (B)                24.9    24.3    25.4    28.8    34.8    35      **41.7    46.9**
Organic take rate              0.05%   0.06%   0.06%   0.07%   0.07%   0.08%   **0.09%   0.09%**

With the updated info, take rate with Divvy = 0.17% which is 89% higher than without Divvy, which is 0.09% (steadily improved in the past 2 years).

So now the big picture for BILL is:

1. Organic TPV grows accelerated to 60%+
2. Further take rate expansion (both organic and with Divvy’s turbo boost)
3. In the latest quarter, the transaction revenue (incl Divvy) is about 69% of total revenue and growing much faster at 100%+ (organic or inorganic) than Subscription revenue (at 30-40% growth, similar to SHOP). As transaction revenue becomes bigger and bigger portion of total revenue, the total revenue is destined to follow and further accelerate.
4. As BILL’s TTM revenue is just about 300M with huge TAM and dominant market position, I can see their organic revenue growth keeps at 70%+ for many quarters to come.

Zoro

[fireblade909]

One thing to note though is all this top line goodness has yet to positively influence the bottom line. As shown below, cash flows and profit margins that were improving slightly over time have dipped sharply the last two quarters due to costs for the Divvy and Invoice2go buys. Since it’s easy to see how these acquisitions augment BILL’s core business, I’m temporarily OK with the dip. However, I’m expecting these metrics to quickly get back on track toward challenging and eventually clearing breakeven.

The investor presentation for Q1 includes a forecast for Non GAAP net loss for the full year of $80m or $0.80 per share. As BILL have reported $14m in Q1 losses and forecast $18m for Q2, which leaves a balance of $24 / quarter for Q3 and Q4. So my concern is that with such healthy top line growth driven further by 2 seemingly great acquisitions, they are intending to really ramp up on the expenses in order to increase their reported losses by 70% (14 to 24) throughout the year.

Whilst I appreciate that there may well be a degree of sandbagging involved and the headline number for a growth stock is usually the top line, I suspect that in this environment more attention will be given to profitability when they report on 3 Feb. Anyone else share this concern of profitability forecast to go increasingly in the wrong direction throughout 2022 or am I over-thinking this?

Thanks to Zoro et al for the thoughtful analysis above

[CMF_muji]

ZORO!

great stuff on Bill a few weeks ago, but you are double counting the effect of acquisitions on TPV… i mentally noted this when you posted it a few weeks ago, but finally remembered today to come back to tell you as I was reading the PR today.

the TPV & tx numbers that Bill provides over last 2 (now 3 today) Qs are already organic… so you are removing the effect from acquisitions from the already organic TPV numbers.

today’s PR: "Processed $46.9 billion in total payment volume (“TPV”) for Bill.com customers
in the first quarter, an increase of 63% year-over-year. Also processed $1.5 billion in TPV related to card payment volume for Divvy and approximately $100 million in TPV for Invoice2go."

language was the same last Q’s PR, and mostly similar 3Qs ago.

so - the growth in tx rev is even better than you stated!

• muji

[ZoroSGInvesting]

Hi Muji,

I corrected it in later post after Bear pointed out. See below:

https://discussion.fool.com/bear-i-think-you-were-correct-i-took…

Haha, we are in the same picture now.

Zoro