Payments and billing software maker Bill.com (NYSE:BILL) reported Q1 CY2025 results beating Wall Street’s revenue expectations, with sales up 10.9% year on year to $358.2 million. On the other hand, next quarter’s revenue guidance of $375.5 million was less impressive, coming in 1.8% below analysts’ estimates. Its non-GAAP profit of $0.50 per share was 33.7% above analysts’ consensus estimates.
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Bill.com (BILL) Q1 CY2025 Highlights:
- Revenue: $358.2 million vs analyst estimates of $355.4 million (10.9% year-on-year growth, 0.8% beat)
- Adjusted Operating Income: $53.3 million vs analyst estimates of $41.32 million (14.9% margin, 29% beat)
- Revenue Guidance for Q2 CY2025 is $375.5 million at the midpoint, below analyst estimates of $382.3 million
- Management raised its full-year Adjusted EPS guidance to $2.08 at the midpoint, a 8.1% increase
- Operating Margin: -8.1%, in line with the same quarter last year
- Customers: 488,600
- Market Capitalization: $4.7 billion
StockStory’s Take
Bill.com’s latest quarterly performance was shaped by continued expansion into larger business accounts, rollout of advanced features for complex financial operations, and increased adoption of its supplier solutions. CEO Rene Lacerte emphasized how recent product introductions—such as multi-entity management and procurement tools—are driving productivity gains for customers and opening new mid-market opportunities. Management pointed to “disciplined execution” and advances in automation as key contributors to profitability. Additionally, the company reported a notable uptick in customer adoption driven by its accounting channel, with net new adds in this segment rising by over 60% year-over-year. Lacerte also highlighted early traction in the company’s AI investments, explaining that these tools are streamlining tasks and delivering efficiencies to both Bill.com and its small and midsize business customers.
Looking ahead, Bill.com’s management flagged a more cautious outlook due to emerging headwinds in small and midsize business spending patterns and uncertainty in the macroeconomic environment. CFO John Rettig explained that the firm is “navigating a more challenging near-term business climate,” citing early signals of reduced transaction volumes and lower discretionary spending among clients. Lacerte stated, “I don’t think SMBs have seen this much uncertainty since the beginning of COVID,” noting that clients are closely managing expenses. While the company expects some positive impact from recent price increases and continued product adoption, management acknowledged that shifting trade policies and economic volatility could constrain near-term growth, particularly in payment volumes and monetization. Bill.com plans to balance investment in innovation with operational efficiency as it adapts to these market conditions.
Key Insights from Management’s Remarks
Management attributed the quarter’s growth to new product introductions for larger businesses, improvements in supplier solutions, and a broadened distribution ecosystem through accounting firms and technology partners.
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Larger business product suite: The launch of advanced solutions—such as multi-entity management and procurement—allowed Bill.com to address more complex needs, expanding its reach into mid-market and larger businesses. Early customer testimonials highlighted substantial productivity improvements.
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Supplier experience enhancements: New supplier-focused offerings, including a beta advanced ACH product, were introduced to simplify payment reconciliation for large suppliers. The company reported strong demand and expects broader rollout over the next several quarters.
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Ecosystem expansion: Bill.com grew its network with over 9,000 accounting firms now offering its platform, helping drive significant client adoption. Net adds from the accounting channel rose more than 60% year-over-year, reflecting the success of this distribution strategy.
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AI investment acceleration: Management highlighted increased investment in AI-powered automation to streamline financial operations for small businesses. Early results included improved efficiency and cost savings for both customers and Bill.com’s operations.
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Spend and expense solution growth: The Divvy spend and expense management solution continued to gain traction, with card payment volume up 22% year-over-year. Card spend rose in travel, entertainment, and retail categories, though management remains cautious about discretionary spend in the near term.
Drivers of Future Performance
Management expects near-term performance to be shaped by SMB spending caution, continued product adoption, and the impact of updated pricing strategies.
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SMB spending trends: Management cited early signs of reduced transaction frequency and spending among small and midsize businesses, attributing these trends to heightened economic uncertainty and possible impacts from trade policies. This cautious spending environment may moderate growth in payment volumes in the next quarter.
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Pricing and monetization initiatives: Bill.com recently implemented price increases for ACH and check payments, with the full effect expected in the coming year. Management expects these changes, along with ongoing enhancements in product bundling, to drive higher average revenue per user over time.
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AI and new product adoption: The company is investing heavily in AI-powered finance agents and automation, aiming to streamline back-office operations for customers. Management believes these innovations will support long-term growth by increasing customer efficiency and expanding the platform’s value proposition, even as near-term adoption is still in early stages.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the extent to which SMB spending patterns stabilize or further weaken, (2) the adoption rate and revenue contribution from new products like advanced ACH and procurement, and (3) the realized impact of pricing changes on overall monetization. Additionally, we will watch for updates on AI-driven automation and its measurable effect on customer productivity and Bill.com’s operational efficiency.
Bill.com currently trades at a forward price-to-sales ratio of 2.9×. In the wake of earnings, is it a buy or sell? Find out in our full research report (it’s free).
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