BILL's FQ2 2022 earnings - my update

As one of the biggest BILL bulls on the board, I didn’t expect BILL could deliver such a blockbuster quarter - it turns out that I was too conservative in my own estimations!

I just wanted to highlight some key numbers which really stand out in this quarter:

  1. Total revenue QoQ growth at 34.5%! (With big acquisitions, the QoQ growth gives us a better picture and this is the first complete QoQ comparison post acquisition. We know BILL’s QoQ is seasonal but 34.5% is more than double of 16.9% a year ago!! Thank you Divvy!!)

  2. Organic core revenue growth further accelerated to 85% YoY! (73%->78%->85%!)

  3. Organic subscription revenue accelerated to 51% from 39% last quarter! (I know it is less important in BILL’s investment thesis but glad to see this accelerated!!)

  4. Organic transaction revenue remains at very high 121% YoY and 30% QoQ! (23.2%->21%->30%)

  5. Organic TPV was 56.4m - 20.3% QoQ! (this is really impressive as the management warned in last CC that “Looking ahead, we expect lower TPV growth rates as we’re assuming the seasonal spike in TPV we experienced in Q2 last year doesn’t occur this year.” but it turned out that they just delivered a similar QoQ TPV growth(TPV QoQ growth was a ATH 21% a year ago)!)

  6. Organic take rate further improved to 0.1% from 0.09% last quarter (11% QoQ growth)

  7. NG gross margin improved to 85.3% (Divvy’s contributions I guess)

  8. NG operating margin improved to 2.17% (huge improvement from last quarter and a year ago - this is really I want to see, the acquisitions started to show operating leverage over time)

  9. FCF margin also improved to -10%, huge improvement both QoQ and YoY

Last 2 days have been rough for all of us due to bad PYPL and FB ER and all our stocks have been indiscriminately crushed. BILL’s blowout ER is really what we need right now, up 28% AH.

Zoro (Long BILL with 20% position)