BILL Q4 results

So let me be frank, I thought that BILL would have produced better results than they actually did yesterday.

Still, they delivered the goods, especially on cash flow, and they provided commentary of a very long runway ahead. Kinda like a steamboat. It definitely lost the feel and excitement of a hypergrowth story. Here are the numbers to kickstart the discussion about the quarter and the stock.


Revenue $m Q1 Q2 Q3 Q4 QoQ Q1 Q2 Q3 Q4
2020 28.5 39.1 41.2 42.1 37.2% 5.4% 2.2%
2021 46.2 54.0 59.7 78.3 9.7% 16.9% 10.6% 31.2%
2022 116.4 156.5 166.9 200.2 48.7% 34.5% 6.6% 20.0%
2023 229.9 260 272.6 296 14.8% 13.1% 4.8% 8.6%

So revenue growth was strong and accelerated from Q3, but it was also supposed to be a seasonally stronger quarter (see the bold qoq rates from prior years), so I was left a little disappointed.

Subscription revenue

Sub revs $m Q1 Q2 Q3 Q4 QoQ Q1 Q2 Q3 Q4
2020 19.9 22.3 23.6 12.1% 5.8%
2021 25.9 26.6 29.3 31.2 9.7% 2.7% 10.2% 6.5%
2022 37.0 49.2 52.2 55.2 18.6% 33.0% 6.1% 5.7%
2023 58.1 61.5 66.7 66.9 5.3% 5.9% 8.5% 0.3%

Yikes - subscription revenue only increased marginally qoq, up by all of $200,000. But management had an explanation: BofA’s small customers left the platform, as is part of the master plan, and growth will continue to be lower due to contractual changes to the BofA agreement for the full 2024 - BUT in 2025 - then we’ll see massive benefits from BofA. So while the explanations seemed sound, the whole BofA thing sounded like jam tomorrow in a jam today environment to me. So again, I was left a little disappointed.

Transaction revenues

Trans revs $m Q1 Q2 Q3 Q4 QoQ Q1 Q2 Q3 Q4
2020 13.1 13.8 15.2 5.3% 10.1%
2021 19.2 25.7 29.3 46.3 26.3% 33.9% 14.0% 58.0%
2022 80.6 106.3 113.3 139.6 74.1% 31.9% 6.6% 23.2%
2023 156.5 169.6 172.8 192.6 12.1% 8.4% 1.9% 11.5%

Same as overall revenues, this was up vs the prior Q, but less than what I was hoping for. SMB customers just didn’t spend that much…and management thinks that’ll be the story for the whole of next year too…

Float revenue

Float revs $m Q1 Q2 Q3 Q4 QoQ Q1 Q2 Q3 Q4
2020 6.1 5.1 3.3 -16.4% -35.3%
2021 1.1 1.7 1.1 0.8 -66.7% 54.5% -35.3% -27.3%
2022 -1.2 1.0 1.4 5.4 -250.0% -183.3% 40.0% 285.7%
2023 15.3 28.9 33.1 36.5 183.3% 88.9% 14.5% 10.3%

This was up nicely and as expected - no surprise for me here; rates were higher in this quarter than last - if float revenue wasn’t up, I would have been disappointed. So nothing really to see here. They got some free revenue and margin, as was to be expected.

→ So overall on the top line I was left slightly disappointed, and for the guide - which was exactly equal to the average analyst forecast (as if the CFO might just have had access to that data point!) - the maximum that they could derisk the forecast - I was also left a bit let down.

On to margins, where things looked better.

Operating margin (excluding float revenue):

Op % Q1 Q2 Q3 Q4
2020 -12% -10% -9% -1%
2021 -5% -3% -4% -8%
2022 -10% 2% -3% -2%
2023 4% 12% 13% 14%

→ Again no shooting out of the lights here, but steady progress. Operating margin increased by 1%pt for each of the last 3 quarters. They are showing some operating leverage. But nothing like Monday, for example.

Free cash flow

FCF% Q1 Q2 Q3 Q4
2020 -15.8% -7.4% -5.1% -16.6%
2021 -18.6% -32.0% -9.0% 18.8%
2022 -22.2% -10.3% 13.6% -7.4%
2023 5.2% 18.5% 8.6% 24.6%

→ Free cash flow margin popped very nicely, driven by float revenue (as the operating margin improvement wasn’t that big).


Given all the ways that they slice and dice customers, I put it in a graph to see if it made more sense to me (it didn’t really). Even though the only customers contributing meaningfully to revenue are Bill and Divvie, the rest shows a picture of potential for cross-sell in the years ahead; something which they’ve only started to do. So a positive here for the future again. Anyhow here’s the graph - and it is nicely up and to the right, is probably the main takeaway. Looking a bit closer does show nice positive: Divvie customer growth - which brings in 3x the revenue of a Bill customer (and to be fair then costs half of what is brought in as marketing expense, so probably more 1.5x) continued the upward trajectory, albeit at a slower pace.


My take

Bill continued to deliver the goods and put down the most de-risked guide that it could do without upsetting analysts. Free cash flow popped and will likely remain there, and they have a plan to continue to do well in the years ahead.

However this quote by the CEO probably summed it up for me:

“And so I think – how we think about this is that the market is maturing. There’s more competitors coming into the space and we are leading, we’re defining and folks are looking to us to follow, and we don’t look to anybody to follow.”

I will probably reduce my position from currently being overweight BILL. [edit: I sold my entire position on Friday; I agree with all the posters below]



@wsm007 – That is a better analysis than should be available for free. Thank you!

You didn’t leave much out, but I’ll hit on guidance quickly. It was lower than I had hoped. 30% for Q1 and 23% for the FY. I was expecting more like mid to high 20’s for the FY.

They gave us a reason – the BofA deal. But I didn’t think they did a great job of explaining how it will work. We just know that subscription revenue will be up single digits YoY in Q1 (which actually means down sequentially), and it will also only be up single digits for the full year. Why they expect this will create a bigger opportunity long term…I am not clear on.

Intuit didn’t renew their contract which took away 12,000 customers, but they were “micro-businesses” which only accounted for less than 1% of revenue…still, the move just makes things even more competitive.

I guess thanks to BILL’s ability to still eke out some growth and expand EPS, this quarter gets a tepid pass for me, meaning I’m not exiting. But I’ve cut BILL back down to 7% or so. I still think the price is fair, but the report did not prove it to be a screaming buy like I’d hoped it would. All we needed was a routine “all systems go” quarter and we did not get that.

Honestly, I’m just glad to not get shellacked on this one!



Great analysis! Thanks.

Bear asked: “Why they expect this will create a bigger opportunity long term…I am not clear on.”

John Rettig (CFO): As Rene discussed earlier, we are enhancing and expanding our solution with Bank of America to serve their large installed SMB customer base in addition to their new SMB customers. Together with BofA, we will both be accelerating our investments to address this very large market opportunity. As a part of this initiative, we are restructuring the contractual minimums to push out subscription fees planned for fiscal 2024 to future years. While this impacts our fiscal 2024 revenue and profitability, we expect it to unlock a significantly larger revenue opportunity in the future and accelerate the adoption of financial operations for SMBs.


Reading between the lines, I’m not as enthusiastic about this quote and share @PaulWBryant’s uncertainty. I see it as Bill wanting BofA more than BofA needing Bill.

Specifically, Bill is forgoing 2024 benefits in exchange for continued customer access in hopes of increased volume in the future (which will almost certainly still be shared with BofA). Bill is basically taking lesser terms now rather than risk losing the pipeline completely. In that respect FI customers will likely always be less attractive. This is already showing up in the numbers and will need to be watched going forward.

Again, that is just my take trying to piece it all together. Ultimately, BofA seems to have the pricing power here. The good thing is Bill has the cash flow and profits to absorb this move just like Zscaler did recently when similarly extending payments. The difference is ZS simply changed the timing of when it gets the pie rather than giving up a piece or two now in hopes of getting them back later.

The bottom line is I agree with the sentiment this was a passable but ultimately underwhelming report.


Frankly, I took a loss and got out. I’m not waiting around for the “future opportunity” to arrive who knows when. And management didn’t make any effort to specify in which quarter it might arrive.


I agree with Brittlerock (just above). The amount of unexplained things and uncertainty was just too much for me.

For example we have to believe that all those bank-added customers that are providing almost no revenue will suddenly become very profitable in the future. When? Why? How?

And that BofAm will suddenly become more profitable in 2025. In 2025??? They’ve got to be kidding!

And that we shouldn’t worry about potentially falling interest rates in the next couple of years, interest rates that currently provide an important part of their revenue, and even more of their profit as they provide 100% gross margin revenue.

I had a small position and a small profit and I got out too.



The last part of that CEO quote really does not jibe with the bolt-on acquisition for spend mgmt w/ Divvy and Inv2Go.

Divvy moved them into the market of Ramp, who has been heavily moving into BILL’s space. The consolidated play is being pursued by both sides now (CC spend mgmt + invoicing/payments).

It’s been interesting to watch Divvy then become larger (revenue and TPV wise) than standalone Bill. Great acquisition, but beyond their payment rail types I think its cloudy as to where Bill is leading the consolidated play.

And don’t get me started on Inv2Go… that acquisition is a giant lump of low-end custs thus far, where they had to clean up the risk profile, and is not showing any signs of cross-selling transaction services.



As I remember it, most of the comments surrounding Inv2Go at the time were about testing products for micro-sized businesses and international go-to-market strategies. Now I2G just seems to let management state a very large customer number padded by a bunch of solopreneurs basically contributing zip. Divvy was the real business driver.

Anecdotally, this seems to be the risk in using acquisition and partnerships rather than organic innovation to expand their offerings. Bill ended up trying to integrate Divvy and building out these partner channels right into a tightening economy. That narrows the margin of error in making it all work.