Strong Q3 Earnings Propel BILL Holdings (BILL): Revenue Surges Year-over-Year

• BILL Holdings reports Q3 earnings of 60 cents per share, surpassing Zacks Consensus Estimate by 13.21% and marking a 46.3% YoY increase.
• Revenues of $323 million, an 18.5% YoY increase, beat the consensus mark by 5.83%, driven by a 17% YoY growth in core revenues.
• Total payment volume (TPV) processed in the quarter was $71.4 billion, a 10.4% YoY increase, including $66.8 billion of TPV on the BILL standalone platform.

BILL Holdings outperforms estimates in Q3 fiscal 2024, with a 46.3% YoY increase in earnings and an 18.5% YoY increase in revenues, driven by growth in core revenues and TPV.

Impressive Q3 Performance

BILL Holdings reported an impressive Q3 performance, with earnings of 60 cents per share, beating the Zacks Consensus Estimate by 13.21% and marking a 46.3% YoY increase. Revenues of $323 million surpassed the consensus mark by 5.83%, driven by a 17% YoY growth in core revenues. The company processed $71.4 billion in total payment volume (TPV) in the reported quarter, up 10.4% YoY. This included $66.8 billion of TPV on its BILL standalone platform, a 9.5% YoY increase.

Customer Base and Revenue Details

BILL’s solutions served 464,900 businesses at the end of the fiscal third quarter. BILL Standalone customers increased 6.5% YoY to 210,700. Excluding financial institutions, BILL Standalone customers increased 9.4% YoY to 146,700. Financial institution customers inched up 0.5% YoY to 64,000. Spend & Expense customer base increased 23.6% YoY to 33,500. Invoice 2go declined 4.2% to 220,700. Core revenues, which consist of subscription and transaction fees, were $281.3 million. Transaction fees were $215.7 million, up 24.8% from the year-ago period’s levels.

Operating Details and Balance Sheet

In the quarter under review, non-GAAP gross profit was $281.5 million, up 18.7% YoY. The gross margin of 87.1% expanded 10 basis points (bps) YoY. Adjusted research and development expenses of $55.5 million increased 10 bps YoY. Adjusted sales and marketing expenses of $106.7 million increased 10.3% YoY. Adjusted general administrative expenses rose 21.2% to $60.7 million. BILL reported a non-GAAP operating income of $59.1 million, up 69.6% YoY. Operating margin expanded 550 bps YoY to 18.3%. As of Mar 31, 2024, cash and cash equivalent and short-term investments were $1.78 billion.

Outlook and Stock Performance

For the fourth quarter of fiscal 2024, BILL expects revenues between $320 million and $330 million, suggesting YoY growth of 8-11%. Non-GAAP earnings are projected between 41 cents and 49 cents. For the fiscal 2024, the company expects revenues between $1.267 billion and $1.277 billion, suggesting YoY growth in the 20-21% range. Non-GAAP earnings are expected between $1.96 and $2.03 per share. Currently, BILL has a Zacks Rank #3 (Hold). BILL’s shares have declined 22.4% year to date compared with the Zacks Computer & Technology sector’s return of 8.5%.

Conclusion

BILL Holdings reported a strong Q3 fiscal 2024 performance, with significant YoY increases in earnings and revenues. The company’s outlook for Q4 and fiscal 2024 also suggests robust growth. However, the stock’s performance has been lackluster, with a 22.4% decline year to date.