Bill Holdings Beats Revenue Expectations in Fiscal Q4

Bill Holdings (BILL -1.42%)a leading provider of financial automation solutions, posted stronger-than-expected results for the fourth quarter of fiscal 2024 on August 22. The company reported revenue of $343.7 million, beating the high end of the $320 million guidance range for $330 million. Non-GAAP operating income was $60.0 million, compared to guidance of $40 million to $50 million.

Source: Guidance figures provided by management in its fiscal third quarter earnings report released on May 2.

Bill Holdings Understanding

Bill Holdings provides tailored financial automation solutions for small and medium-sized businesses (SMEs). It provides software to simplify and streamline back-office financial operations such as billing, invoicing and payment processing.

Bill currently boasts a significant market presence with more than 474,600 companies using its solutions as of June 30, 2024, the end of fiscal year 2024. This large network has helped it facilitate a total payment volume of over $76 billion in Q4 — up 10% YoY. throughout the year — showing impressive commitment to its platform. The company’s artificial intelligence-based financial automation capabilities increase efficiency, reduce manual errors and accelerate financial operations. Moreover, it combines both direct and indirect distribution channels such as accounting firms and financial institutions, expanding its reach.

Quarterly highlights

During the fiscal fourth quarter, Bill Holdings performed well on several key metrics. First, its revenue rose 16.1% year-over-year to $343.7 million. This increase was largely driven by transaction fees, which increased 22.0% to $235.5 million.

Additionally, the company reported non-GAAP operating income of $60.0 million, up 41.8% from $42.3 million in the prior year. Its non-GAAP net income also increased to $63.9 million, compared to $56.3 million in the year-ago period. Non-GAAP net income per diluted share of $0.57 exceeded the high end of management’s guidance range of $0.41 to $0.49.

Operationally, Bill facilitated 28 million transactions during the quarter, up 19% from the prior period. In addition, 7.1 million BILL autonomous network members used its platform for electronic payments, a 22% increase from 5.8 million members a year ago. These values ​​reflect increased user engagement and a growing network effect.

The company also continued to develop its AI-enabled financial automation capabilities. Bill’s platform automates various processes such as data capture and invoice processing, which simplifies back-office operations for SMEs. Reliance on artificial intelligence is a crucial part of Bill’s strategy to improve operational efficiency and reduce errors. In addition, Bill has strong distribution channels, leveraging both direct client connections and partnerships with accounting firms and financial institutions.

Bill also uses his proprietary risk engine, trained on millions of transactions, to mitigate financial risks. This ensures low fraud and loss rates, maintaining customer confidence in the platform.

Looking ahead

Management provided upbeat guidance for fiscal 2025, projecting total revenue between $1.415 billion and $1.450 billion, which would represent growth of 10% to 12%. Core revenue is anticipated to be between $1.270 billion and $1.305 billion, for growth of 13% to 16%. Non-GAAP operating income is expected to range from $160 million to $195 million, while non-GAAP net income is expected to be between $154 million and $182 million, or $1.36 per diluted share to $1.61 per diluted share.

Investors should pay attention to several key areas. Revenue growth remains crucial, and the stability of transaction fees and the subsequent expansion of its network effects will be significant. Attention should also be paid to the trajectories of subscription fees which have seen slight declines recently. Moreover, the company’s ability to maintain low fraud and credit loss rates will also be a determining factor in supporting its strong performance. Finally, monitoring management’s progress in addressing GAAP operating losses despite strong non-GAAP results will be vital to assessing long-term financial health.