A quick comparison before we look at Bill Q3’23 results.
i read that analysts project a 93% upside for Bill (Market cap $8.5B)
Bill Holdings, Inc. provides cloud-based software solutions that simplify, digitize, and automate complex back-office financial operations for small and midsize businesses.
After Paycom (market cap $16.9B) posted great results yesterday, analysts project a 30% upside for Paycom.
Paycom Software sells a suite of cloud-based HR software that helps companies hire, manage, train, and pay their employees.
Bill focuses more on small and medium size businesses and like Paycom, is expanding internationally.
BILL Reports Third Quarter Fiscal Year 2023 Financial Results
05/04/2023
- Q3 Core Revenue is up 45% YoY
- Q3 Total Revenue up 63% YoY
“We delivered strong third quarter results and profitable growth as we executed on our strategy to be the essential financial operations platform for SMBs,”
said René Lacerte, BILL CEO and Founder.
“As champions of SMBs, we are proud that more than 450,000 businesses use our solutions to automate their financial operations and gain more visibility and control of their finances.”
Financial Highlights for the Q3’23
Below BILL standalone measures exclude the results of Divvy, Invoice2go, and newly acqired Finmark.
- Total revenue was $272.6 million, an increase of 63% YoY.
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Core revenue, which consists of subscription and transaction fees, was $239.5 million, an increase of 45% YoY.
- Subscription fees were $66.7M, up 28% year-over-year.
- Transaction fees were $172.8M, up 52% year-over-year.
- Float revenue, which consists of interest on funds held for customers, was $33.1M. (Float rev as a percent of revenue was up to 12% from 1% last quarter)
“In Q3, we delivered revenue growth of 63% year-over-year, record non-GAAP gross margin, and expansion of non-GAAP net income margin,”
said John Rettig, BILL CFO.
“Our performance highlights the strength of our business model and our commitment to deliver balanced growth and profitability.”
- Gross profit was $223.7 million, representing an 82.1% gross margin, compared to $129.6 million, or a 77.6% gross margin, in the third quarter of fiscal 2022.
- Non-GAAP gross profit was $237.2 million, representing an 87.0% non-GAAP gross margin, compared to $141.1 million, or a 84.6% non-GAAP gross margin, in the third quarter of fiscal 2022.
- Non-GAAP net income was $58.7 million, or $0.50 per diluted share, compared to non-GAAP net loss of 8.7 million, or ($0.08) per share, basic and diluted, in the third quarter of fiscal 2022.
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Total revenue of $272.6M an increase of 63% YoY beat both analyst projections by $25.3M and Bill’s guidance ( Bill guided for 47%-49% increase) while Non-GAAP EPS of $0.50 per diluted share was 2x’s analyst projections and Double Bill’s guidance of $0.22 - $0.25.
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Business Highlights and Recent Developments
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Dollar-based net retention rate is 131% for this Q3’23.
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Served 455,300 businesses by the end of Q2’23.
197,900 BILL standalone customers
27,100 spending businesses that used Divvy
230,300 subscribers that used Invoice2go. -
Processed $64.7B in total payment volume in Q3, up 13% YoY.
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Processed 21.4 million transactions during Q3, up 36% YoY.
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Repurchased approximately 359,000 shares of its stock for a total cost of approximately $27 million.
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Experienced tech leader, Ken Moss, is the new Chief Technology Officer.
Guidance
- Q4 FY23 Outlook: Total revenue $277 - $280M, Non-GAAP EPS $0.39 - $0.41.
They also raised Guidance for FY23:
Total revenues to $1,039.5 - $1,042.5M from $999 - $1,007M
Year-over-year total revenue growth to 62% from 56%-57%
Non-GAAP net income to $170.4 - $173.4M up from $117.5 - $125.5M.
Non-GAAP net income per diluted share of $1.46 - $1.48 from $0.99 - $1.05
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Wow, pretty good report, eh.
Da’ Bulls would note a stable Dollar Based Retention Rate, strong business model able to maintain income from Float Revenue, increasing customer base, increased FY23 guidance.
Da’ Bears could focus on a modest decline in YoY revenue increase, macro headwinds for SMB’s.
Fool ommmm, kevin c
long of Bill Holdings, Inc.
long of Paycom