BILL Holdings, Inc 10-Q for FY2024 Q2

BILL Holdings, Inc. (BILL)

10-Q 2024-02-09 For: 2023-12-31

Added on April 12, 2026

About this 10-Q

BILL Holdings, Inc filed this 10-Q on February 9, 2024, covering the quarter ended December 31, 2023 (FY2024 Q2).

Headline figures

Quarter ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $318.5M; up 22.5% from $260.01M a year earlier
Net loss: $40.42M; compared with a net loss of $95.08M a year earlier
Diluted EPS: -$0.38; compared with -$0.90 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 I. 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	8
	Notes to Condensed Consolidated Financial Statements	9
	Note 1 – The Company and Its Significant Accounting Policies	9
	Note 2 – Revenue	11

	Note 3 – Fair Value Measurement	12
	Note 4 – Short-Term Investments and Funds Held for Customers	15
	Note 5 – Acquired Card Receivables	18
	Note 6 – Debt and Borrowings	19
	Note 7 – Stockholders’ Equity	23
	Note 8 – Other Income , Net	24
	Note 9 – Income Taxes	24
	Note 1 0 – Commitments and Contingencies	25
	Note 11 – Restructuring	25
	Note 12 – Net Loss Per Share Attributable to Common Stockholders	25
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	44

Part II. OTHER INFORMATION		45
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	83
Item 3.	Defaults Upon Senior Securities	84
Item 4.	Mine Safety Disclosures	84
Item 5.	Other Information	84
Item 6.	Exhibits	85

SIGNATURES		86


	December 31, 2023		June 30, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	1,579,633	$	1,617,151
Short-term investments	972,621		1,043,110
Accounts receivable, net	26,652		28,233
Acquired card receivables, net of allowances of $21,509 and $15,498 as of December 31, 2023 and June 30, 2023, respectively	516,980		458,650
Prepaid expenses and other current assets	204,726		170,111
Funds held for customers	3,655,435		3,355,909
Total current assets	6,956,047		6,673,164
Non-current assets:
Operating lease right-of-use assets, net	63,505		68,988
Property and equipment, net	86,577		81,564
Intangible assets, net	320,985		361,427
Goodwill	2,396,509		2,396,509
Other assets	48,788		54,366
Total assets	$	9,872,411	$	9,636,018

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	8,772	$	8,519
Accrued compensation and benefits	33,228		32,901
Deferred revenue	17,327		26,328
Other accruals and current liabilities	268,409		194,733
Borrowings from credit facilities, net	135,021		135,046
Customer fund deposits	3,655,435		3,355,909
Total current liabilities	4,118,192		3,753,436
Non-current liabilities:
Deferred revenue	4,174		410
Operating lease liabilities	67,725		72,477
Convertible senior notes, net	1,708,208		1,704,782
Other long-term liabilities	22,267		18,944
Total liabilities	5,920,566		5,550,049
Commitments and contingencies (Note 10)
Stockholders' equity:
Common stock	2		2
Additional paid-in capital	5,088,799		4,946,623
Accumulated other comprehensive income (loss)	237		(4,488)
Accumulated deficit	(1,137,193)		(856,168)
Total stockholders' equity	3,951,845		4,085,969
Total liabilities and stockholders' equity	$	9,872,411	$	9,636,018


	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
Revenue
Subscription and transaction fees	$	274,992	$	231,095	$	540,134	$	445,706
Interest on funds held for customers	43,503		28,911		83,346		44,224
Total revenue	318,495		260,006		623,480		489,930
Cost of revenue
Service costs	47,239		36,965		92,143		71,786
Depreciation and amortization of intangible assets (1)	11,138		10,502		22,260		20,789
Total cost of revenue	58,377		47,467		114,403		92,575
Gross profit	260,118		212,539		509,077		397,355
Operating expenses
Research and development	86,489		78,910		175,552		154,030
Sales and marketing	118,305		164,683		236,704		283,308
General and administrative	85,583		69,381		170,909		136,119
Depreciation and amortization of intangible assets (1)	12,324		12,028		25,141		24,055
Restructuring	25,091		—		25,091		—
Total operating expenses	327,792		325,002		633,397		597,512
Loss from operations	(67,674)		(112,463)		(124,320)		(200,157)
Other income, net	28,919		17,022		58,227		22,970
Loss before provision for (benefit from) income taxes	(38,755)		(95,441)		(66,093)		(177,187)
Provision for (benefit from) income taxes	1,666		(365)		2,189		(471)
Net loss	$	(40,421)	$	(95,076)	$	(68,282)	$	(176,716)

Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.38)	$	(0.90)	$	(0.64)	$	(1.68)
Weighted-average number of common shares used to compute net loss per share attributable to common stockholders:
Basic and diluted	105,914		105,906		106,350		105,494


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 )


	Common stock			Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated deficit		Total stockholders' equity
	Shares	Amount
Balance at June 30, 2023	106,550	$	2	$	4,946,623	$	(4,488)	$	(856,168)	$	4,085,969
Issuance of common stock upon exercise of stock options and release of restricted stock units	634	—		2,946		—		—		2,946
Issuance of common stock under the employee stock purchase plan	91	—		7,846		—		—		7,846
Repurchase and retirement of common stock	(160)	—		—		—		(16,068)		(16,068)
Stock-based compensation	—	—		64,606		—		—		64,606
Other comprehensive income	—	—		—		675		—		675
Net loss	—	—		—		—		(27,861)		(27,861)
Balance at September 30, 2023	107,115	$	2	$	5,022,021	$	(3,813)	$	(900,097)	$	4,118,113
Issuance of common stock upon exercise of stock options and release of restricted stock units	689	—		2,106		—		—		2,106
Repurchase and retirement of common stock, including excise tax	(2,723)	—		—		—		(196,675)		(196,675)
Stock-based compensation	—	—		64,672		—		—		64,672
Other comprehensive income	—	—		—		4,050		—		4,050
Net loss	—	—		—		—		(40,421)		(40,421)
Balance at December 31, 2023	105,081	$	2	$	5,088,799	$	237	$	(1,137,193)	$	3,951,845


	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	—		3,901		—		—		3,901
Issuance of common stock under the employee stock purchase plan	67	—		8,494		—		—		8,494
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
Issuance of common stock upon exercise of stock options and release of restricted stock units	663	—		4,316		—		—		4,316
Issuance of common stock as consideration for an acquisition	40	—		3,376		—		—		3,376
Stock-based compensation	—	—		119,604		—		—		119,604
Other comprehensive income	—	—		—		4,126		—		4,126
Net loss	—	—		—		—		(95,076)		(95,076)
Balance at December 31, 2022	106,336	$	2	$	4,811,780	$	(6,361)	$	(721,544)	$	4,083,877


	Six Months Ended December 31,
	2023		2022
Cash flows from operating activities:
Net loss	$	(68,282)	$	(176,716)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation	130,647		191,925
Amortization of intangible assets	40,443		39,763
Depreciation of property and equipment	6,958		5,081
Amortization of capitalized internal-use software costs	3,739		1,901
Amortization of debt issuance costs, net of accretion of debt premium	3,523		3,483
Amortization of premium (accretion of discount) on investments in marketable debt securities	(24,171)		(10,401)
Provision for losses on acquired card receivables and other financial assets	28,689		15,042
Non-cash operating lease expense	4,552		4,718
Deferred income taxes	(116)		(826)
Other	(2,615)		516
Changes in assets and liabilities:
Accounts receivable	390		(7,052)
Prepaid expenses and other current assets	(151)		(4,623)
Other assets	(1,240)		(1,880)
Accounts payable	233		3,511
Other accruals and current liabilities	20,944		15,408
Operating lease liabilities	(4,917)		(4,794)
Other long-term liabilities	(47)		35
Deferred revenue	(5,237)		(1,709)
Net cash provided by operating activities	133,342		73,382
Cash flows from investing activities:
Cash paid for acquisition, net of acquired cash and cash equivalents	—		(28,902)
Purchases of corporate and customer fund short-term investments	(990,240)		(1,641,193)
Proceeds from maturities of corporate and customer fund short-term investments	1,281,505		1,683,413
Proceeds from sale of corporate and customer fund short-term investments	—		5,088
Purchases of loans held for investment	(110,113)		—
Principal repayments of loans held for investment	94,300		—
Acquired card receivables, net	(12,342)		(102,353)
Purchases of property and equipment	(755)		(3,161)
Capitalization of internal-use software costs	(10,762)		(10,510)
Proceeds from beneficial interest	—		2,080
Other	—		1,000
Net cash provided by (used in) investing activities	251,593		(94,538)
Cash flows from financing activities:



Customer fund deposits liability and other	299,770		325,846
Prepaid card deposits	(16,484)		6,815
Repurchase of common stock	(211,902)		—

Proceeds from line of credit borrowings	—		37,500
Proceeds from exercise of stock options	5,052		8,217
Proceeds from issuance of common stock under the employee stock purchase plan	7,846		8,494
Contingent consideration payout	(5,471)		—
Net cash provided by financing activities	78,811		386,872
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	(7)		182
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents	463,739		365,898
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period	4,224,841		3,542,715
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period	$	4,688,580	$	3,908,613
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	$	1,579,633	$	1,616,758
Restricted cash included in other current assets	103,462		103,809
Restricted cash included in other assets	7,116		6,724
Restricted cash and restricted cash equivalents included in funds held for customers	2,998,369		2,181,322
Total cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period	$	4,688,580	$	3,908,613


	December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	993,163	$	—	$	—	$	993,163
Corporate bonds	—		41,644		—		41,644
Certificates of deposit	—		2,097		—		2,097
U.S. agency securities	—		4,965		—		4,965
	993,163		48,706		—		1,041,869
Short-term investments:
Corporate bonds	—		424,434		—		424,434
U.S. treasury securities	—		372,197		—		372,197
Asset-backed securities	—		71,724		—		71,724
Certificates of deposit	—		58,811		—		58,811
U.S. agency securities	—		45,455		—		45,455
	—		972,621		—		972,621
Funds held for customers:
Restricted cash equivalents:
Money market funds	1,449,575		—		—		1,449,575
Corporate bonds	—		283,988		—		283,988
U.S. treasury securities	—		139,414		—		139,414

	1,449,575		423,402		—		1,872,977
Short-term investments:
Corporate bonds	—		338,855		—		338,855
U.S. treasury securities	—		182,430		—		182,430
Certificates of deposit	—		86,490		—		86,490
Asset-backed securities	—		30,771		—		30,771
U.S. agency securities	—		13,839		—		13,839
	—		652,385		—		652,385
Total assets measured at fair value	$	2,442,738	$	2,097,114	$	—	$	4,539,852

Liabilities
Contingent consideration(1)	$	—	$	—	$	(6,500)	$	(6,500)
Total liabilities measured at fair value	$	—	$	—	$	(6,500)	$	(6,500)


	June 30, 2023
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	1,131,621	$	—	$	—	$	1,131,621
Corporate bonds	—		45,301		—		45,301
U.S. treasury securities	44,856		—		—		44,856
Certificates of deposit	—		2,578		—		2,578
	1,176,477		47,879		—		1,224,356
Short-term investments:
Corporate bonds	—		479,483		—		479,483
U.S. treasury securities	408,368		—		—		408,368
U.S. agency securities	—		57,967		—		57,967
Asset-backed securities	—		51,193		—		51,193
Certificates of deposit	—		46,099		—		46,099
	408,368		634,742		—		1,043,110
Funds held for customers:
Restricted cash equivalents:
Money market funds	713,469		—		—		713,469
	713,469		—		—		713,469
Short-term investments:
Corporate bonds	—		433,920		—		433,920
Certificates of deposit	—		233,291		—		233,291
U.S. treasury securities	81,074		—		—		81,074
Asset-backed securities	—		70,661		—		70,661
U.S. agency securities	—		27,458		—		27,458
	81,074		765,330		—		846,404
Total assets measured at fair value	$	2,379,388	$	1,447,951	$	—	$	3,827,339

Liabilities
Contingent consideration(1)	$	—	$	—	$	(12,035)	$	(12,035)
Total liabilities measured at fair value	$	—	$	—	$	(12,035)	$	(12,035)


	December 31, 2023
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Short-term investments:
Corporate bonds	$	424,195	$	730	$	(491)	$	424,434
U.S. treasury securities	372,372		170		(345)		372,197
Asset-backed securities	71,536		217		(29)		71,724
Certificates of deposit	58,811		—		—		58,811
U.S. agency securities	45,460		20		(25)		45,455
Total short-term investments	$	972,374	$	1,137	$	(890)	$	972,621
Funds held for customers:
Corporate bonds	$	338,702	$	158	$	(5)	$	338,855
Certificates of deposit	86,490		—		—		86,490
U.S. agency securities	13,849		—		(10)		13,839
Asset-backed securities	30,824		—		(53)		30,771
U.S. treasury securities	182,375		102		(47)		182,430
Total funds held for customers	$	652,240	$	260	$	(115)	$	652,385


	December 31, 2023		June 30, 2023
Due within one year	$	1,337,185	$	1,543,379
Due in 1 year through 5 years	287,821		346,135
Total	$	1,625,006	$	1,889,514


	December 31, 2023
	Less than 12 months				12 months or longer				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Short-term investments:
Corporate bonds	$	119,582	$	(280)	$	45,813	$	(211)	$	165,395	$	(491)
U.S. treasury securities	54,361		(95)		31,095		(250)		85,456		(345)
Asset-backed securities	10,783		(14)		1,638		(15)		12,421		(29)
U.S. agency securities	45,651		(25)		—		—		45,651		(25)
Total short-term investments	$	230,377	$	(414)	$	78,546	$	(476)	$	308,923	$	(890)
Funds held for customers:
Corporate bonds	$	19,511	$	(5)	$	—	$	—	$	19,511	$	(5)

U.S. agency securities	13,838		(10)		—		—		13,838		(10)
Asset-backed securities	23,151		(29)		7,620		(24)		30,771		(53)
U.S. treasury securities	45,226		(47)		—		—		45,226		(47)
Total funds held for customers	$	101,726	$	(91)	$	7,620	$	(24)	$	109,346	$	(115)


	December 31, 2023		June 30, 2023
Current and less than 30 days past due	$	524,440	$	463,704
30 ~ 59 days past due	5,570		2,507
60 ~ 89 days past due	5,584		4,544
90 ~ 119 days past due	2,511		3,196
Over 119 days past due	384		197
Total	$	538,489	$	474,148


	December 31, 2023				June 30, 2023
	2027 Notes		2025 Notes		2027 Notes		2025 Notes

Principal	$	575,000	$	1,150,000	$	575,000	$	1,150,000
Less: unamortized issuance costs	(8,840)		(7,952)		(10,188)		(10,030)
Net carrying amount	$	566,160	$	1,142,048	$	564,812	$	1,139,970


	Unrecognized compensation (in thousands)		Weighted-average recognition period (in years)
RSUs	$	529,954	3.1
Performance-based awards	19,987		3.2
Market-based RSUs	9,698		1.6
Stock options	7,958		1.2
Employee stock purchase plan	1,526		0.5
Total unamortized stock-based compensation	$	569,124


	Severance and termination benefits		Contract termination		Other		Total restructuring liability
Balance, at June 30, 2023	$	—	$	—	$	—	$	—
Charges	20,975		343		417		21,735
Cash payments	(8,239)		(72)		—		(8,311)
Balance, at December 31, 2023	$	12,736	$	271	$	417	$	13,424


	December 31,
	2023	2022
RSUs	5,203	4,644
Stock options	2,189	3,156
Performance-based awards	285	—
Market-based RSUs	115	—
Employee stock purchase plan	6	—
Total	7,798	7,800


	As of December 31,
	2023	2022	% Growth
Businesses using our solutions (1)	473,500	435,800	9%


	Three Months Ended December 31,				Change				Six Months Ended December 31,				Change
	2023		2022		$		%		2023		2022		$		%
Revenue
Subscription and transaction fees (2)	$	274,992	$	231,095	$	43,897	19	%	540,134		445,706		94,428		21	%
Interest on funds held for customers	43,503		28,911		14,592		50	%	83,346		44,224		39,122		88	%
Total revenue	318,495		260,006		58,489		22	%	623,480		489,930		133,550		27	%
Cost of revenue
Service costs (2)	47,239		36,965		10,274		28	%	92,143		71,786		20,357		28	%
Depreciation and amortization of intangible assets (1)	11,138		10,502		636		6	%	22,260		20,789		1,471		7	%
Total cost of revenue	58,377		47,467		10,910		23	%	114,403		92,575		21,828		24	%
Gross profit	260,118		212,539		47,579		22	%	509,077		397,355		111,722		28	%
Operating expenses
Research and development (2)	86,489		78,910		7,579		10	%	175,552		154,030		21,522		14	%
Sales and marketing (2)	118,305		164,683		(46,378)		(28)	%	236,704		283,308		(46,604)		(16)	%
General and administrative (2)	85,583		69,381		16,202		23	%	170,909		136,119		34,790		26	%
Depreciation and amortization of intangible assets (1)	12,324		12,028		296		2	%	25,141		24,055		1,086		5	%
Restructuring (2)	25,091		—		25,091		100	%	25,091		—		25,091		100	%
Total operating expenses	327,792		325,002		2,790		1	%	633,397		597,512		35,885		6	%
Loss from operations	(67,674)		(112,463)		44,789		(40)	%	(124,320)		(200,157)		75,837		(38)	%
Other income, net	28,919		17,022		11,897		70	%	58,227		22,970		35,257		153	%
Loss before provision for (benefit from) income taxes	(38,755)		(95,441)		56,686		(59)	%	(66,093)		(177,187)		111,094		(63)	%
Provision for (benefit from) income taxes	1,666		(365)		2,031		(556)	%	2,189		(471)		2,660		(565)	%
Net loss	$	(40,421)	$	(95,076)	$	54,655	(57)	%	$	(68,282)	$	(176,716)	$	108,434	(61)	%


	Three Months Ended December 31,				As a % of total revenue				Six Months Ended December 31,				As a % of total revenue
					Three Months Ended December 31,								Six Months Ended December 31,
	2023		2022		2023		2022		2023		2022		2023		2022
Acquisition Related Awards	$	4,003	$	63,962	1	%	25	%	$	9,073	$	92,914	1	%	19	%
Restructuring Awards	3,355		—		1	%	—	%	3,355		—		1	%	—	%
Non-Acquisition Related Awards	58,142		55,480		18	%	21	%	118,219		99,147		19	%	20	%
Total stock-based compensation	$	65,500	$	119,442	20	%	46	%	$	130,647	$	192,061	21	%	39	%


Period	Total number of shares purchased (in thousands) (1)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs (in thousands) (1)	Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) (1)
October 1, 2023 - October 31, 2023	535	$	100.99	535	$	142,331
November 1, 2023 - November 30, 2023	1,819	$	63.78	1,819	$	26,325
December 1, 2023 - December 8, 2023	369	$	71.32	369	$	—
Total	2,723			2,723	$	—


February 8, 2024	By:	/s/ René Lacerte
(Date)		René Lacerte
		Chief Executive Officer
		(Principal Executive Officer)

February 8, 2024	By:	/s/ John Rettig
(Date)		John Rettig
		President and Chief Financial Officer
		(Principal Financial Officer)


HOLDER: JPMC STRATEGIC INVESTMENTS I CORPORATION
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BILL Holdings, Inc.

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