BILL Holdings, Inc 10-Q for FY2023 Q1

BILL Holdings, Inc. (BILL)

10-Q 2022-11-04 For: 2022-09-30

Added on April 12, 2026

About this 10-Q

BILL Holdings, Inc filed this 10-Q on November 4, 2022, covering the quarter ended September 30, 2022 (FY2023 Q1).

Headline figures

Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $229.92M; up 94.3% from $118.35M a year earlier
Net loss: $81.64M; compared with a net loss of $74.26M a year earlier
Diluted EPS: -$0.78; compared with -$0.78 a year earlier

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Delaware						83-2661725

(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

6220 America Center Drive, Suite 100, San Jose, CA						95002

(Address of principal executive offices)						(Zip Code)


Large accelerated filer	x	Accelerated filer	o

Non-accelerated filer	o	Smaller reporting company	o

Emerging growth company	o


		Page
Special Note Regarding Forward-Looking Statements		1

Part 1. FINANCIAL INFORMATION		3
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Loss	5
	Condensed Consolidated Statements of Stockholders' Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
	Note 1 – The Company and Its Significant Accounting Policies	8
	Note 2 – Revenue	10
	Note 3 – Business Combination	11
	Note 4 – Fair Value Measurement	11
	Note 5 – Short-Term Investments	14
	Note 6 – Funds Held for Customers	15
	Note 7 – Acquired Card Receivables	17
	Note 8 – Debt and Borrowings	20
	Note 9 – Stockholders’ Equity	24
	Note 10 – Other Income (Expenses), Net	26
	Note 11 – Income Taxes	26
	Note 12 – Leases	26
	Note 13 – Commitments and Contingencies	27
	Note 14 – Net Loss Per Share Attributable to Common Stockholders	28
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	45

Part II. OTHER INFORMATION		47
Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	48
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	86
Item 3.	Defaults Upon Senior Securities	86
Item 4.	Mine Safety Disclosures	86
Item 5.	Other Information	86
Item 6.	Exhibits	87
	Signatures	88


	September 30, 2022		June 30, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	1,608,966	$	1,596,542
Short-term investments	1,034,537		1,108,493
Accounts receivable, net	29,060		24,045
Acquired card receivables, net	357,741		256,392
Prepaid expenses and other current assets	140,019		151,258
Funds held for customers	3,121,654		3,142,660
Total current assets	6,291,977		6,279,390
Non-current assets:
Operating lease right-of-use assets, net	75,106		76,445
Property and equipment, net	62,025		56,985
Intangible assets, net	412,814		432,583
Goodwill	2,362,330		2,362,893
Other assets	48,847		47,730
Total assets	$	9,253,099	$	9,256,026

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	11,508	$	9,948
Accrued compensation and benefits	20,649		29,004
Deferred revenue	30,401		31,868
Other accruals and current liabilities	141,806		120,080
Borrowings from revolving credit facility, net	—		75,097
Customer fund deposits	3,121,654		3,142,660
Total current liabilities	3,326,018		3,408,657
Non-current liabilities:
Deferred revenue	2,323		2,159
Operating lease liabilities	80,440		82,728
Borrowings from revolving credit facility, net	75,083		—
Convertible senior notes, net	1,699,690		1,697,985
Other long-term liabilities	22,014		20,803
Total liabilities	5,205,568		5,212,332
Commitments and contingencies (Note 13)
Stockholders' equity:
Common stock	2		2
Additional paid-in capital	4,684,484		4,598,737
Accumulated other comprehensive loss	(10,487)		(10,217)
Accumulated deficit	(626,468)		(544,828)
Total stockholders' equity	4,047,531		4,043,694
Total liabilities and stockholders' equity	$	9,253,099	$	9,256,026


	Three Months Ended September 30,
	2022		2021
Revenue	$	229,924	$	118,349
Cost of revenue
Service costs	34,820		20,713
Depreciation and amortization of intangible assets (1)	10,287		9,122
Total cost of revenue	45,107		29,835
Gross profit	184,817		88,514
Operating expenses
Research and development	75,121		41,884
Sales and marketing	118,633		53,629
General and administrative	66,738		57,515
Depreciation and amortization of intangible assets (1)	12,019		9,691
Total operating expenses	272,511		162,719
Loss from operations	(87,694)		(74,205)
Other income (expenses), net	5,947		(3,475)
Loss before benefit from income taxes	(81,747)		(77,680)
Benefit from income taxes	(107)		(3,421)
Net loss	$	(81,640)	$	(74,259)

Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.78)	$	(0.78)
Weighted-average number of common shares used to compute net loss per share attributable to common stockholders:
Basic and diluted	105,086		95,892


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			(Registrant’s telephone number, including area code)

			(Former name, former address and former fiscal year, if changed since last report )


	Three months ended September 30, 2022
	Common stock			Additional paid-in capital		Accumulated other comprehensive loss		Accumulated deficit		Total stockholders' equity
	Shares	Amount
Balance at June 30, 2022	104,731	$	2	$	4,598,737	$	(10,217)	$	(544,828)	$	4,043,694
Issuance of common stock upon exercise of stock options and release of restricted stock units	835	—		8,494		—		—		8,494
Issuance of common stock under the employee stock purchase plan	67	—		3,901		—		—		3,901
Stock-based compensation	—	—		73,352		—		—		73,352
Other comprehensive loss	—	—		—		(270)		—		(270)
Net loss	—	—		—		—		(81,640)		(81,640)
Balance at September 30, 2022	105,633	$	2	$	4,684,484	$	(10,487)	$	(626,468)	$	4,047,531


	Three Months Ended September 30, 2021
	Common stock			Additional paid-in capital		Accumulated other comprehensive income		Accumulated deficit		Total stockholders' deficit
	Shares	Amount
Balance at June 30, 2021	94,504	$	2	$	2,777,155	$	(100)	$	(247,467)	$	2,529,590
Cumulative effect of the accounting change upon the adoption of ASU 2020-06	—	—		(245,066)		—		29,000		(216,066)
Issuance of common stock upon public offering, net of underwriting discounts and other offering costs	5,074	—		1,341,122		—		—		1,341,122
Issuance of common stock as consideration for an acquisition, net of issuance costs	1,788	—		488,263		—		—		488,263
Fair value of replacement awards	—	—		26,710		—		—		26,710
Issuance of common stock upon exercise of stock options and release of restricted stock units	1,033	—		8,644		—		—		8,644
Issuance of common stock under the employee stock purchase plan	40	—		5,726		—		—		5,726
Purchase of capped calls	—	—		(37,893)		—		—		(37,893)
Stock-based compensation	—	—		38,839		—		—		38,839
Other comprehensive loss	—	—		—		(39)		—		(39)
Net loss	—	—		—		—		(74,259)		(74,259)
Balance at September 30, 2021	102,439	$	2	$	4,403,500	$	(139)	$	(292,726)	$	4,110,637


	Three months ended September 30,
	2022		2021
Cash flows from operating activities:
Net loss	$	(81,640)	$	(74,259)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	72,620		37,887
Amortization of intangible assets	19,769		16,672
Depreciation of property and equipment	2,546		2,129
Amortization of capitalized internal-use software costs	924		259
Amortization of debt discount (accretion of debt premium) and issuance costs	1,712		556
Amortization of premium (accretion of discount) on investments in marketable debt securities	(2,215)		2,857
Provision for losses on acquired card receivables	6,611		4,049
Non-cash operating lease expense	2,342		1,960
Deferred income taxes	(299)		(3,423)
Other	930		—
Changes in assets and liabilities:
Accounts receivable	(4,774)		1,198
Prepaid expenses and other current assets	(1,339)		6,321
Other assets	(1,138)		(1,385)
Accounts payable	1,511		(732)
Other accruals and current liabilities	4,247		(17,930)
Operating lease liabilities	(2,386)		(792)
Other long-term liabilities	34		(121)
Deferred revenue	(1,303)		3,620
Net cash provided by (used in) operating activities	18,152		(21,134)
Cash flows from investing activities:
Cash paid for acquisition, net of acquired cash and cash equivalents	—		(144,452)
Purchases of corporate and customer fund short-term investments	(859,911)		(608,552)
Proceeds from maturities of corporate and customer fund short-term investments	838,099		318,907
Proceeds from sale of corporate and customer fund short-term investments	—		17,234
Increase in acquired card receivables and other	(107,443)		(32,663)
Purchases of property and equipment	(1,376)		(1,404)
Capitalization of internal-use software costs	(4,764)		(2,942)
Proceeds from beneficial interest	2,080		—
Net cash used in investing activities	(133,315)		(453,872)
Cash flows from financing activities:
Proceeds from issuance of common stock upon public offering, net of underwriting discounts and other offering costs	—		1,341,597
Proceeds from issuance of convertible senior notes, net of discounts and issuance costs	—		562,704
Purchase of capped calls	—		(37,893)
Increase (decrease) in customer fund deposits liability and other	(14,549)		223,641
Proceeds from exercise of stock options	3,901		8,336
Proceeds from issuance of common stock under the employee stock purchase plan	8,494		5,726
Net cash provided by (used in) financing activities	(2,154)		2,104,111
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	(277)		(172)
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents	(117,594)		1,628,933
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period	3,542,715		1,809,692
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period	$	3,425,121	$	3,438,625
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows above:
Cash and cash equivalents	$	1,608,966	$	2,013,433
Restricted cash included in other current assets	71,629		16,619
Restricted cash included in other assets	6,724		6,724
Restricted cash and restricted cash equivalents included in funds held for customers	1,737,802		1,401,849
Total cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period	$	3,425,121	$	3,438,625


	Three Months Ended September 30, 2021
Total revenue	$	124,867
Net loss	$	(75,034)


	September 30, 2022
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	1,413,916	$	—	$	—	$	1,413,916
Corporate bonds	—		33,243		—		33,243
U.S. treasury securities	19,976		—		—		19,976
	1,433,892		33,243		—		1,467,135
Short-term investments:
Corporate bonds	—		595,286		—		595,286
U.S. treasury securities	372,350		—		—		372,350
Asset-backed securities	—		21,055		—		21,055
Certificates of deposit	—		45,846		—		45,846
	372,350		662,187		—		1,034,537
Funds held for customers:
Restricted cash equivalents:
Money market funds	26,988		—		—		26,988
Corporate bonds	—		147,303		—		147,303
	26,988		147,303		—		174,291
Short-term investments:
Corporate bonds	—		850,613		—		850,613
Certificates of deposit	—		413,178		—		413,178
Municipal bonds	—		5,020		—		5,020
Asset-backed securities	—		77,594		—		77,594
U.S. treasury securities	37,258		—		—		37,258
	37,258		1,346,405		—		1,383,663
Beneficial interest derivative on card receivables sold	—		—		470		470
Total assets measured at fair value	$	1,870,488	$	2,189,138	$	470	$	4,060,096


	June 30, 2022
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	1,424,259	$	—	$	—	$	1,424,259
Corporate bonds	—		11,430		—		11,430
	1,424,259		11,430		—		1,435,689
Short-term investments:
Corporate bonds	—		597,204		—		597,204
U.S. treasury securities	421,728		—		—		421,728
Asset-backed securities	—		51,406		—		51,406
Certificates of deposit	—		38,155		—		38,155
	421,728		686,765		—		1,108,493
Funds held for customers:
Restricted cash equivalents:
Money market funds	34,703		—		—		34,703
Corporate bonds	—		133,557		—		133,557
	34,703		133,557		—		168,260
Short-term investments:
Corporate bonds	—		807,685		—		807,685
Certificates of deposit	—		397,533		—		397,533
Municipal bonds	—		6,516		—		6,516
Asset-backed securities	—		69,912		—		69,912
U.S. treasury securities	3,072		—		—		3,072
	3,072		1,281,646		—		1,284,718
Beneficial interest derivative on card receivables sold	—		—		398		398
Total assets measured at fair value	$	1,883,762	$	2,113,398	$	398	$	3,997,558


	September 30, 2022
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Corporate bonds	$	600,560	$	9	$	(5,283)	$	595,286
U.S. treasury securities	375,171		2		(2,823)		372,350
Asset-backed securities	21,193		—		(138)		21,055
Certificates of deposit	45,846		—		—		45,846
Total	$	1,042,770	$	11	$	(8,244)	$	1,034,537


	September 30, 2022		June 30, 2022
Current and less than 30 days past due	$	360,638	$	257,618
30 ~ 59 days past due	2,661		1,677
60 ~ 89 days past due	1,125		1,199
90 ~ 119 days past due	813		1,186
Over 119 days past due	45		126
Total	$	365,282	$	261,806


	September 30, 2022		June 30, 2022
Current and less than 30 days past due	$	340	$	56,162
30 ~ 59 days past due	537		292
60 ~ 89 days past due	634		375
90 ~ 119 days past due	547		422
Over 119 days past due	1		30
Total	$	2,059	$	57,281


	September 30, 2022				June 30, 2022
	2027 Notes		2025 Notes		2027 Notes		2025 Notes
Liability component:
Principal	$	575,000	$	1,150,000	$	575,000	$	1,150,000
Less: unamortized debt discount and issuance costs	(12,203)		(13,107)		(12,873)		(14,142)
Net carrying amount	$	562,797	$	1,136,893	$	562,127	$	1,135,858


	Three Months Ended September 30,
	2022		2021
Stock options	$	11,793	$	13,236
RSUs	55,670		23,533
Performance-based awards	3,291		—
Market-based RSUs	1,254		—
Employee stock purchase plan	2,821		2,058
Total stock-based compensation cost	$	74,828	$	38,827


	September 30, 2022
	Fair value		Unrealized losses
Corporate bonds	$	388,689	$	(5,283)
U.S. treasury securities	369,402		(2,823)
Asset backed securities	20,678		(138)
Total	$	778,769	$	(8,244)


	September 30, 2022		June 30, 2022
Restricted cash	$	1,563,512	$	1,685,937
Restricted cash equivalents	174,291		168,260
Funds receivable	8,221		6,747
Corporate bonds	850,613		807,685
Certificates of deposit	413,178		397,533
Municipal bonds	5,020		6,516
Asset backed securities	77,594		69,912
U.S. treasury securities	37,258		3,072
Total funds held for customers	3,129,687		3,145,662
Less - income earned by the Company included in other current assets	(8,033)		(3,002)
Total funds held for customers, net of income earned by the Company	$	3,121,654	$	3,142,660


	September 30, 2022		June 30, 2022
Gross amount of acquired card receivables	$	365,282	$	261,806
Less: allowance for credit losses	(7,541)		(5,414)
Total	$	357,741	$	256,392


	September 30, 2022		June 30, 2022
Convertible senior notes:
2027 Notes, principal	$	575,000	$	575,000
2025 Notes, principal	1,150,000		1,150,000
Total principal amount of convertible senior notes	1,725,000		1,725,000
Revolving credit facility	75,000		75,000
Total principal amount of debt and borrowings	1,800,000		1,800,000
Less: unamortized debt discount and issuance costs	(25,227)		(26,918)
Net carrying value of debt and borrowings	$	1,774,773	$	1,773,082

Net carrying value of debt and borrowings consisted of:
Current liabilities:
Borrowings from revolving credit facility (including unamortized debt premium)	—		75,097
Non-current liabilities:
2027 Notes, net	562,797		562,127
2025 Notes, net	$	1,136,893	1,135,858
Borrowings from revolving credit facility (including unamortized debt premium)	75,083		—
Total	$	1,774,773	$	1,773,082


Fiscal years ending June 30:	Amount
Remainder of 2023	$	11,212
2024	13,910
2025	13,424
2026	13,292
2027	13,226
2028	13,590
Thereafter	35,919
Gross lease payments	114,573
Less - present value adjustments	(21,091)
Total operating lease liabilities, net	$	93,482


	September 30,
	2022	2021
Stock options	3,498	5,762
Restricted stock units	4,904	2,895
Total	8,402	8,657


	Three Months Ended September 30,				Change
	2022		2021 (1)		$		%
Revenue	$	229,924	$	118,349	$	111,575	94	%
Cost of revenue
Service costs (2)	34,820		20,713		14,107		68	%
Depreciation and amortization of intangible assets (3)	10,287		9,122		1,165		13	%
Total cost of revenue	45,107		29,835		15,272		51	%
Gross profit	184,817		88,514		96,303		109	%
Operating expenses
Research and development (2)	75,121		41,884		33,237		79	%
Sales and marketing (2)	118,633		53,629		65,004		121	%
General and administrative (2)	66,738		57,515		9,223		16	%
Depreciation and amortization of intangible assets (3)	12,019		9,691		2,328		24	%
Total operating expenses	272,511		162,719		109,792		67	%
Loss from operations	(87,694)		(74,205)		$	(13,489)	18	%
Other income (expense), net	5,947		(3,475)		9,422		(271)	%
Loss before benefit from income taxes	(81,747)		(77,680)		(4,067)		5	%
Benefit from income taxes	(107)		(3,421)		3,314		(97)	%
Net loss	$	(81,640)	$	(74,259)	(7,381)		10	%


November 4, 2022	By:	/s/ René Lacerte
(Date)		René Lacerte
		Chief Executive Officer
		(Principal Executive Officer)

November 4, 2022	By:	/s/ John Rettig
(Date)		John Rettig
		Chief Financial Officer and Executive Vice President, Finance and Operations
		(Principal Financial Officer)


IR	=	the Interest Rate for such Advance on such day;
P	=	the principal amount of such Advance on such day; and
D	=	360.


Bill.com Holdings, Inc.

/s/ René Lacerte
René Lacerte
Chief Executive Officer
(Principal Executive Officer)