Muji, I’m getting somewhat different numbers on organic core rev growth YoY (bolded the differences below)
Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22
Org core YoY 32.9% 31.3 38.3 44.9 **73.2 77.5** 85.5
Org sub YoY 40% 36.7 33.7 31.4 **31.8 38.6** 51.5
In any case, I want to highlight some other signs of their exploding accelerating growth everywhere:
Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22
Bill ARPU $396 423 479 507 554 613 719
QoQ -0.2% 6.7 13.4 5.8 9.33 10.5 17.4
YoY 24.9% 27.8 40 45 50
Divvy ARPU 962 2807 3774
QoQ 192% 34.4
Bill TPV/cust $259K 278K 319k 303K 344K 370K 418K
Div CPV/cust 41K 111K 126K
Bill takerate 0.06% 0.067 0.074 0.084 0.087 0.093 0.10
Div takerate 2.33% 2.46 2.60
ARPU continued to accelerate on Bill.com’s platform! Divvy ARPU per divvy business increased.
Bill.com TPV per customer still growing!! Divvy card payment volume also increased.
And most importantly, the take rate continues to climb for both Bill.com platform and Divvy spend!
They are grabbing higher yielding customers and customers that continue to expand their transactions on the platform.
Conference call highlights:
1.) There is uncertainty regarding the impact of Omicron, inflation and supply chain constraints being experienced by businesses. While we don’t see an impact on our overall SMB base at the moment, we continue to monitor the situation closely.
This was why I had kept my Bill allocation at the lower end for my portfolio. Well, this quarter has allayed much of my macroecon effects fears - clearly these kinds of payments in SMB world is more resilient and more reliable than the concentrated consumer facing businesses that LSPD dealt with, or other companies that heavily depend upon consumers (Compare, for example, UPST’s March COVID quarter’s plummet in revenue which was 80% drop QoQ, while Bill.com still managed to grow a little QoQ).
2.) In prior earnings calls, we discussed being selected to design a new payables and receivable solution for one of the top three small business banks in the U.S. Today, I’m excited to share that the bank is Bank of America. This new partnership came together as a result of our success serving Bank of America’s commercial customers and extends our reach to support all of the small businesses, including sole proprietors that Bank of America serves. The new solution was launched in several markets in Q2, and the nationwide rollout will continue throughout calendar year 2022.
This is going to fuel more customer additions in the coming quarters.
3.) Bill.com organic subscription revenue growth…accelerated…driven mainly by the impact of a slightly larger average customer size and the new Bank of America revenue.
In fact, the BoA partnership is already growing the top line!
4.) G&A expenses increased $3 million from Q1, reflecting a full quarter of Invoice2go and increased fraud and credit losses associated with the growth in TPV and card spend with estimated loss rates being consistent with historical trends.
Something to keep an eye on. Losses not getting out of bounds so far.
5.) The slight decline in net new customers added at Divvy and Invoice2go as expected as we applied Bill.com’s more robust underwriting and onboarding criteria to their new customer sign-up flows. We believe this application of our proprietary risk logic will yield higher-value customers going forward.
Something else to watch.
6.) …when they first subscribed to the Bill.com platform, they tend to have many more check payments versus electronic payments. They tend to have some of their suppliers on the network but not all…over the course of several quarters, as they get further engaged with the platform, we see the electronic payments go up. And as a result of that, we see higher adoption of some of the newer ad valorem products that we have that has the effect of increasing our overall transaction monetization.
LAND and EXPAND at work here.
7.) For fiscal Q3, we expect our total revenue to be in the range of $157 million to $158 million. Note that sequential revenue growth in Q3 will be influenced by seasonality as well as the step-up in revenue recognized in Q2 that I referenced earlier for Invoice2go and Bank of America subscription fees.
Explanation of the guide for next Q.
8.) We have focused for years about the future. And when we think of the future, we think in terms of years and decades, not months and quarters. And our focus on the success of the business is predicated on our ability to drive penetration into the market that we have. This is a massive opportunity in front of us. We’ve got just over 2% of the SMBs in this country that have employees that are on our core Bill.com platform…we’re super excited when we have a revenue beat like we just did that drives kind of the numbers that we just had.
Enough said…the market opportunity is immense. And not just in the US but their growth internationally, with Invoice2Go to help cross sell