BILL Holdings, Inc 10-Q for FY2024 Q3

BILL Holdings, Inc. (BILL)

10-Q 2024-05-03 For: 2024-03-31

Added on April 12, 2026

About this 10-Q

BILL Holdings, Inc filed this 10-Q on May 3, 2024, covering the quarter ended March 31, 2024 (FY2024 Q3).

Headline figures

Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $323.03M; up 18.5% from $272.56M a year earlier
Net income: $31.81M; compared with a net loss of $31.14M a year earlier
Diluted EPS: $0.00; compared with -$0.29 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	25
	Note 9 – Income Taxes	25
	Note 10 – Commitments and Contingencies	25
	Note 11 – Restructuring	25
	Note 12 – Net Income (Loss) Per Share Attributable to Common Stockholders	26
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	28
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	47
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	85
Item 3.	Defaults Upon Senior Securities	85
Item 4.	Mine Safety Disclosures	85
Item 5.	Other Information	85
Item 6.	Exhibits	86

SIGNATURES		87


	March 31, 2024		June 30, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	952,474	$	1,617,151
Short-term investments	837,140		1,043,110
Accounts receivable, net	29,891		28,233
Acquired card receivables, net of allowances of $23,853 and $15,498 as of March 31, 2024 and June 30, 2023, respectively	641,861		458,650
Prepaid expenses and other current assets	256,199		170,111
Funds held for customers	3,510,918		3,355,909
Total current assets	6,228,483		6,673,164
Non-current assets:
Operating lease right-of-use assets, net	61,466		68,988
Property and equipment, net	87,300		81,564
Intangible assets, net	300,764		361,427
Goodwill	2,396,509		2,396,509
Other assets	47,736		54,366
Total assets	$	9,122,258	$	9,636,018

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	6,824	$	8,519
Accrued compensation and benefits	27,619		32,901
Deferred revenue	17,547		26,328
Other accruals and current liabilities	263,603		194,733
Borrowings from credit facilities, net	—		135,046
Customer fund deposits	3,510,918		3,355,909
Total current liabilities	3,826,511		3,753,436
Non-current liabilities:
Deferred revenue	4,156		410
Operating lease liabilities	65,023		72,477
Borrowings from credit facilities, net	180,011		—
Convertible senior notes, net	966,242		1,704,782
Other long-term liabilities	21,582		18,944
Total liabilities	5,063,525		5,550,049
Commitments and contingencies (Note 10)
Stockholders' equity:
Common stock	2		2
Additional paid-in capital	5,165,049		4,946,623
Accumulated other comprehensive loss	(1,507)		(4,488)
Accumulated deficit	(1,104,811)		(856,168)
Total stockholders' equity	4,058,733		4,085,969
Total liabilities and stockholders' equity	$	9,122,258	$	9,636,018


	Three Months Ended March 31,				Nine Months Ended March 31,
	2024		2023		2024		2023
Revenue
Subscription and transaction fees	$	281,294	$	239,495	$	821,428	$	685,201
Interest on funds held for customers	41,734		33,060		125,080		77,284
Total revenue	323,028		272,555		946,508		762,485
Cost of revenue
Service costs	43,845		37,897		135,988		109,683
Depreciation and amortization of intangible assets (1)	11,167		10,953		33,427		31,742
Total cost of revenue	55,012		48,850		169,415		141,425
Gross profit	268,016		223,705		777,093		621,060
Operating expenses
Research and development	81,594		78,761		257,145		232,791
Sales and marketing	118,105		115,350		354,808		398,658
General and administrative	81,573		71,719		252,482		207,837
Depreciation and amortization of intangible assets (1)	12,262		12,093		37,403		36,149
Restructuring	2,104		—		27,195		—
Total operating expenses	295,638		277,923		929,033		875,435
Operating loss	(27,622)		(54,218)		(151,940)		(254,375)
Other income, net	59,801		23,622		118,026		46,591
Income (loss) before provision for income taxes	32,179		(30,596)		(33,914)		(207,784)
Provision for income taxes	370		542		2,559		70
Net income (loss)	$	31,809	$	(31,138)	$	(36,473)	$	(207,854)

Net income (loss) per share attributable to common stockholders:
Basic	$	0.30	$	(0.29)	$	(0.34)	$	(1.96)
Diluted	$	0.00	$	(0.29)	$	(0.34)	$	(1.96)
Weighted-average number of common shares used to compute net income (loss) per share attributable to common stockholders:
Basic	105,436		106,597		106,045		105,843
Diluted	111,176		106,597		106,045		105,843


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
Issuance of common stock upon exercise of stock options and release of restricted stock units, net of shares withheld and retired for tax and excise tax	727	—		(206)		—		573		367
Issuance of common stock under the employee stock purchase plan	134	—		8,649		—		—		8,649
Unwind of capped calls	—	—		8,502		—		—		8,502
Stock-based compensation	—	—		59,305		—		—		59,305
Other comprehensive loss	—	—		—		(1,744)		—		(1,744)
Net income	—	—		—		—		31,809		31,809
Balance at March 31, 2024	105,942	$	2	$	5,165,049	$	(1,507)	$	(1,104,811)	$	4,058,733


	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
Issuance of common stock upon exercise of stock options and release of restricted stock units	596	—		2,643		—		—		2,643
Issuance of common stock under the employee stock purchase plan	115	—		9,385		—		—		9,385
Repurchase and retirement of common stock	(359)	—		—		—		(27,000)		(27,000)
Stock-based compensation	—	—		63,392		—				63,392
Other comprehensive income	—	—		—		3,178		—		3,178
Net loss	—	—		—		—		(31,138)		(31,138)
Balance at March 31, 2023	106,688	$	2	$	4,887,200	$	(3,183)	$	(779,682)	$	4,104,337


	Nine Months Ended March 31,
	2024		2023
Cash flows from operating activities:
Net loss	$	(36,473)	$	(207,854)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation	190,036		255,717
Amortization of intangible assets	60,663		59,984
Depreciation of property and equipment	10,167		7,907
Amortization of capitalized internal-use software costs	6,332		3,009
Amortization of debt issuance costs	5,174		5,217
Accretion of discount on investments in marketable debt securities	(39,285)		(23,710)
Accretion of discount on loans held for investment	(5,531)		(9)
Provision for credit losses on acquired card receivables and other financial assets	47,279		23,685
Gain on debt extinguishment	(35,715)		—
Non-cash operating lease expense	6,590		7,114
Deferred income taxes	(126)		(1,169)
Other	1,787		1,357
Changes in assets and liabilities:
Accounts receivable	(3,795)		(9,969)
Prepaid expenses and other current assets	5,413		(7,477)
Other assets	(2,068)		(2,040)
Accounts payable	(1,898)		(1,265)
Other accruals and current liabilities	6,812		9,639
Operating lease liabilities	(7,559)		(7,711)
Other long-term liabilities	(2,617)		(272)
Deferred revenue	(5,035)		(4,740)
Net cash provided by operating activities	200,151		107,413
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	(2,042,849)		(2,394,518)
Proceeds from maturities of corporate and customer fund short-term investments	1,857,220		2,510,829
Proceeds from sale of corporate and customer fund short-term investments	1,539		11,607
Purchases of loans held for investment	(218,943)		(537)
Principal repayments of loans held for investment	191,861		325
Acquired card receivables, net	(139,850)		(198,244)
Purchases of property and equipment	(771)		(6,499)
Capitalization of internal-use software costs	(14,595)		(17,231)
Proceeds from beneficial interest	—		2,080
Other	—		1,167
Net cash used in investing activities	(366,388)		(119,923)
Cash flows from financing activities:
Payments for repurchase of convertible senior notes	(710,931)		—
Proceeds from unwind of capped calls	10,252		—
Customer fund deposits liability and other	155,376		(46,092)
Prepaid card deposits	(20,776)		21,064
Repurchase of common stock	(211,902)		(24,001)
Proceeds from line of credit borrowings	45,000		60,000
Proceeds from exercise of stock options	6,525		10,860
Tax withholdings related to net share settlements of equity awards	(1,681)		—
Proceeds from issuance of common stock under the employee stock purchase plan	16,495		17,879
Contingent consideration payout	(10,762)		—
Net cash provided by (used in) financing activities	(722,404)		39,710
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	(397)		12
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents	(889,038)		27,212
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	$	3,335,803	$	3,569,927

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	$	952,474	$	1,590,560
Restricted cash included in other current assets	153,031		96,823
Restricted cash included in other assets	5,297		6,724
Restricted cash and restricted cash equivalents included in funds held for customers	2,225,001		1,875,820
Total cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period	$	3,335,803	$	3,569,927


	March 31, 2024
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	352,954	$	—	$	—	$	352,954
Corporate bonds	—		10,913		—		10,913
Certificates of deposit	—		1,952		—		1,952
	352,954		12,865		—		365,819
Short-term investments:
Corporate bonds	—		394,497		—		394,497
U.S. treasury securities	—		271,941		—		271,941
Asset-backed securities	—		78,338		—		78,338
Certificates of deposit	—		61,607		—		61,607
U.S. agency securities	—		30,757		—		30,757
	—		837,140		—		837,140
Funds held for customers:
Restricted cash equivalents:
Money market funds	917,948		—		—		917,948
Corporate bonds	—		239,513		—		239,513
	917,948		239,513		—		1,157,461
Short-term investments:
Corporate bonds	—		964,256		—		964,256
U.S. treasury securities	—		187,654		—		187,654
Certificates of deposit	—		74,909		—		74,909
Asset-backed securities	—		51,264		—		51,264
	—		1,278,083		—		1,278,083
Total assets measured at fair value	$	1,270,902	$	2,367,601	$	—	$	3,638,503


	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)


	March 31, 2024
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Short-term investments:
Corporate bonds	$	394,730	$	357	$	(590)	$	394,497
U.S. treasury securities	272,320		8		(387)		271,941
Asset-backed securities	78,262		118		(42)		78,338
Certificates of deposit	61,607		—		—		61,607
U.S. agency securities	30,802		6		(51)		30,757
Total short-term investments	$	837,721	$	489	$	(1,070)	$	837,140
Funds held for customers:
Corporate bonds	$	964,944	$	26	$	(714)	$	964,256
Certificates of deposit	74,909		—		—		74,909
Asset-backed securities	51,304		4		(44)		51,264
U.S. treasury securities	187,676		—		(22)		187,654
Total funds held for customers	$	1,278,833	$	30	$	(780)	$	1,278,083


	March 31, 2024		June 30, 2023
Due within one year	$	1,856,999	$	1,543,379
Due in 1 year through 5 years	258,224		346,135
Total	$	2,115,223	$	1,889,514


	March 31, 2024
	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	$	153,102	$	(486)	$	30,842	$	(103)	$	183,944	$	(589)
U.S. treasury securities	196,269		(287)		31,491		(100)		227,760		(387)
Asset-backed securities	22,624		(29)		2,554		(14)		25,178		(43)
U.S. agency securities	25,940		(51)		—		—		25,940		(51)
Total short-term investments	$	397,935	$	(853)	$	64,887	$	(217)	$	462,822	$	(1,070)
Funds held for customers:
Corporate bonds	$	451,361	$	(679)	$	—	$	—	$	451,361	$	(679)
Asset-backed securities	30,076		(34)		6,555		(9)		36,631		(43)
U.S. treasury securities	297,385		(58)		—		—		297,385		(58)
Total funds held for customers	$	778,822	$	(771)	$	6,555	$	(9)	$	785,377	$	(780)


	March 31, 2024		June 30, 2023
Current and less than 30 days past due	$	650,613	$	463,704
30 ~ 59 days past due	5,097		2,507
60 ~ 89 days past due	6,578		4,544
90 ~ 119 days past due	3,200		3,196
Over 119 days past due	226		197
Total	$	665,714	$	474,148


	March 31, 2024				June 30, 2023
	2027 Notes		2025 Notes		2027 Notes		2025 Notes
Principal	$	575,000	$	401,798	$	575,000	$	1,150,000
Less: unamortized issuance costs	(8,165)		(2,391)		(10,188)		(10,030)
Net carrying amount	$	566,835	$	399,407	$	564,812	$	1,139,970


	Unrecognized compensation (in thousands)		Weighted-average recognition period (in years)
RSUs	$	491,111	2.7
Performance-based awards	16,390		3.2
Market-based RSUs	8,096		1.6
Stock options	5,888		1.1
Employee stock purchase plan	7,154		0.8
Total unamortized stock-based compensation	$	528,639


	Severance and termination benefits		Contract termination		Other		Total restructuring liability
Balance, at June 30, 2023	$	—	$	—	$	—	$	—
Charges	22,588		480		552		23,620
Cash payments	(21,100)		(480)		(417)		(21,997)
Balance, at March 31, 2024	$	1,488	$	—	$	135	$	1,623


	Three Months Ended March 31,				Nine Months Ended March 31,
	2024 (1)		2023		2024		2023
Numerator:
Net income (loss) attributable to common stockholders
Basic	$	31,809	$	(31,138)	$	(36,473)	$	(207,854)
Gain on debt extinguishment and change on mark to market derivatives, net of amortization of debt issuance costs,	(31,641)		—		—		—
Diluted	$	168	$	(31,138)	$	(36,473)	$	(207,854)
Denominator:
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders
Basic	105,436		106,597		106,045		105,843
Effect of dilutive securities:
Convertible senior notes	3,721		—		—		—
Equity awards	2,019		—		—		—
Diluted	111,176		106,597		106,045		105,843
Net income (loss) per share attributable to common stockholders
Basic	$	0.30	$	(0.29)	$	(0.34)	$	(1.96)
Diluted	$	0.00	$	(0.29)	$	(0.34)	$	(1.96)


	March 31,
	2024	2023
Equity awards	7,201	7,355
Convertible senior notes	3,884	8,534
Total	11,085	15,889


	As of March 31,
	2024	2023	% Growth
Businesses using our solutions (1)	464,900	455,300	2%


	Three Months Ended March 31,				Change				Nine Months Ended March 31,				Change
	2024		2023		$		%		2024		2023		$		%
Revenue
Subscription and transaction fees (2)	$	281,294	$	239,495	$	41,799	17	%	$	821,428	$	685,201	$	136,227	20	%
Interest on funds held for customers	41,734		33,060		8,674		26	%	125,080		77,284		47,796		62	%
Total revenue	323,028		272,555		50,473		19	%	946,508		762,485		184,023		24	%
Cost of revenue
Service costs (2)	43,845		37,897		5,948		16	%	135,988		109,683		26,305		24	%
Depreciation and amortization of intangible assets (1)	11,167		10,953		214		2	%	33,427		31,742		1,685		5	%
Total cost of revenue	55,012		48,850		6,162		13	%	169,415		141,425		27,990		20	%
Gross profit	268,016		223,705		44,311		20	%	777,093		621,060		156,033		25	%
Operating expenses
Research and development (2)	81,594		78,761		2,833		4	%	257,145		232,791		24,354		10	%
Sales and marketing (2) (3)	118,105		115,350		2,755		2	%	354,808		398,658		(43,850)		(11)	%
General and administrative (2)	81,573		71,719		9,854		14	%	252,482		207,837		44,645		21	%
Depreciation and amortization of intangible assets (1)	12,262		12,093		169		1	%	37,403		36,149		1,254		3	%
Restructuring (2)	2,104		—		2,104		100	%	27,195		—		27,195		100	%
Total operating expenses	295,638		277,923		17,715		6	%	929,033		875,435		53,598		6	%
Operating loss	(27,622)		(54,218)		26,596		(49)	%	(151,940)		(254,375)		102,435		(40)	%
Other income, net	59,801		23,622		36,179		153	%	118,026		46,591		71,435		153	%
Income (loss) before provision for income taxes	32,179		(30,596)		62,775		(205)	%	(33,914)		(207,784)		173,870		(84)	%
Provision for income taxes	370		542		(172)		(32)	%	2,559		70		2,489		3556	%
Net income (loss)	$	31,809	$	(31,138)	$	62,947	(202)	%	$	(36,473)	$	(207,854)	$	171,381	(82)	%


	Three Months Ended March 31,				As a % of total revenue				Nine Months Ended March 31,				As a % of total revenue
					Three Months Ended March 31,								Nine Months Ended March 31,
	2024		2023		2024		2023		2024		2023		2024		2023
Acquisition Related Awards	$	3,567	$	10,813	1	%	4	%	$	12,962	$	103,727	1	%	14	%
Restructuring Awards	220		—		—	%	—	%	3,574		—		—	%	—	%
Non-Acquisition Related Awards	55,602		52,977		17	%	19	%	173,500		152,125		18	%	20	%
Total stock-based compensation	$	59,389	$	63,790	18	%	23	%	$	190,036	$	255,852	19	%	34	%


May 3, 2024	By:	/s/ René Lacerte
(Date)		René Lacerte
		Chief Executive Officer
		(Principal Executive Officer)

May 3, 2024	By:	/s/ John Rettig
(Date)		John Rettig
		President and Chief Financial Officer
		(Principal Financial Officer)


BILL Holdings, Inc.

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