BILL Holdings, Inc 10-Q for FY2023 Q2

BILL Holdings, Inc. (BILL)

10-Q 2023-02-03 For: 2022-12-31

Added on April 12, 2026

About this 10-Q

BILL Holdings, Inc filed this 10-Q on February 3, 2023, covering the quarter ended December 31, 2022 (FY2023 Q2).

Headline figures

Quarter ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $260.01M; up 66.2% from $156.48M a year earlier
Net loss: $95.08M; compared with a net loss of $80.44M a year earlier
Diluted EPS: -$0.90; 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	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	15
	Note 5 – Funds Held for Customers	16
	Note 6 – Acquired Card Receivables	18
	Note 7 – Debt and Borrowings	21
	Note 8 – Stockholders’ Equity	25
	Note 9 – Other Income (Expenses), Net	26
	Note 10 – Income Taxes	26
	Note 1 1 – Leases	27
	Note 1 2 – Commitments and Contingencies	28
	Note 1 3 – Net Loss Per Share Attributable to Common Stockholders	29

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	47

Part II. OTHER INFORMATION		48
Item 1.	Legal Proceedings	48
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	88
Item 3.	Defaults Upon Senior Securities	88
Item 4.	Mine Safety Disclosures	88
Item 5.	Other Information	88
Item 6.	Exhibits	89

SIGNATURES		90


	December 31, 2022		June 30, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	1,616,758	$	1,596,542
Short-term investments	1,066,538		1,108,493
Accounts receivable, net	31,261		24,045
Acquired card receivables, net	380,895		256,392
Prepaid expenses and other current assets	178,688		151,258
Funds held for customers	3,474,048		3,142,660
Total current assets	6,748,188		6,279,390
Non-current assets:
Operating lease right-of-use assets, net	72,725		76,445
Property and equipment, net	69,383		56,985
Intangible assets, net	401,869		432,583
Goodwill	2,396,509		2,362,893
Other assets	49,600		47,730
Total assets	$	9,738,274	$	9,256,026

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	14,262	$	9,948
Accrued compensation and benefits	31,021		29,004
Deferred revenue	30,358		31,868
Other accruals and current liabilities	181,551		120,080
Borrowings from revolving credit facility, net	—		75,097
Customer fund deposits	3,474,048		3,142,660
Total current liabilities	3,731,240		3,408,657
Non-current liabilities:
Deferred revenue	2,013		2,159
Operating lease liabilities	78,207		82,728
Borrowings from revolving credit facility, net	112,570		—
Convertible senior notes, net	1,701,397		1,697,985
Other long-term liabilities	28,970		20,803
Total liabilities	5,654,397		5,212,332
Commitments and contingencies (Note 12)
Stockholders' equity:
Common stock	2		2
Additional paid-in capital	4,811,780		4,598,737
Accumulated other comprehensive loss	(6,361)		(10,217)
Accumulated deficit	(721,544)		(544,828)
Total stockholders' equity	4,083,877		4,043,694
Total liabilities and stockholders' equity	$	9,738,274	$	9,256,026


	Three Months Ended December 31,				Six Months Ended December 31,
	2022		2021		2022		2021
Revenue	$	260,006	$	156,478	$	489,930	$	274,827
Cost of revenue
Service costs	36,965		24,338		71,786		45,051
Depreciation and amortization of intangible assets (1)	10,502		10,048		20,789		19,170
Total cost of revenue	47,467		34,386		92,575		64,221
Gross profit	212,539		122,092		397,355		210,606
Operating expenses
Research and development	78,910		51,377		154,030		93,261
Sales and marketing	164,683		69,896		283,308		123,525
General and administrative	69,381		64,965		136,119		122,480
Depreciation and amortization of intangible assets (1)	12,028		11,929		24,055		21,620
Total operating expenses	325,002		198,167		597,512		360,886
Loss from operations	(112,463)		(76,075)		(200,157)		(150,280)
Other income (expenses), net	17,022		(5,000)		22,970		(8,475)
Loss before benefit from income taxes	(95,441)		(81,075)		(177,187)		(158,755)
Benefit from income taxes	(365)		(635)		(471)		(4,056)
Net loss	$	(95,076)	$	(80,440)	$	(176,716)	$	(154,699)

Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.90)	$	(0.78)	$	(1.68)	$	(1.56)
Weighted-average number of common shares used to compute net loss per share attributable to common stockholders:
Basic and diluted	105,906		102,910		105,494		99,401


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 )


	Six Months Ended December 31, 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	—		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, 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
Issuance of common stock upon exercise of stock options and release of restricted stock units	1,022	—		14,140		—		—		14,140
Stock-based compensation	—	—		50,701		—		—		50,701
Other comprehensive loss	—	—		—		(1,711)		—		(1,711)
Net loss	—	—		—		—		(80,440)		(80,440)
Balance at December 31, 2021	103,461	$	2	$	4,468,341	$	(1,850)	$	(373,166)	$	4,093,327


	Six Months Ended December 31,
	2022		2021
Cash flows from operating activities:
Net loss	$	(176,716)	$	(154,699)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	191,925		87,571
Amortization of intangible assets	39,763		36,440
Depreciation of property and equipment	5,081		4,350
Amortization of capitalized internal-use software costs	1,901		673
Amortization of debt premium and issuance costs	3,483		1,955
Amortization of premium (accretion of discount) on investments in marketable debt securities	(10,401)		6,638
Provision for losses on acquired card receivables	15,042		9,535
Non-cash operating lease expense	4,718		4,083
Deferred income taxes	(826)		(3,822)
Other	516		—
Changes in assets and liabilities:
Accounts receivable	(7,052)		(3,420)
Prepaid expenses and other current assets	(4,623)		(8,547)
Other assets	(1,880)		(1,099)
Accounts payable	3,511		(2,023)
Other accruals and current liabilities	15,408		(11,430)
Operating lease liabilities	(4,794)		(2,952)
Other long-term liabilities	35		(1,698)
Deferred revenue	(1,709)		4,381
Net cash provided by (used in) operating activities	73,382		(34,064)
Cash flows from investing activities:
Cash paid for acquisition, net of acquired cash and cash equivalents	(28,902)		(144,541)
Purchases of corporate and customer fund short-term investments	(1,641,193)		(1,452,419)
Proceeds from maturities of corporate and customer fund short-term investments	1,683,413		667,854
Proceeds from sale of corporate and customer fund short-term investments	5,088		44,744
Increase in acquired card receivables, net and other	(101,353)		(77,459)
Purchases of property and equipment	(3,161)		(2,467)
Capitalization of internal-use software costs	(10,510)		(5,023)
Proceeds from beneficial interest	2,080		—
Net cash used in investing activities	(94,538)		(969,311)
Cash flows from financing activities:
Proceeds from issuance of common stock upon public offering, net of underwriting discounts and other offering costs	—		1,341,152
Proceeds from issuance of convertible senior notes, net of discounts and issuance costs	—		560,075
Purchase of capped calls	—		(37,893)
Increase (decrease) in customer fund deposits liability and other	332,661		1,171,446
Proceeds from line of credit borrowings	37,500		—
Proceeds from exercise of stock options	8,217		22,784
Proceeds from issuance of common stock under the employee stock purchase plan	8,494		5,726
Net cash provided by financing activities	386,872		3,063,290
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	182		(75)
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents	365,898		2,059,840
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	$	3,908,613	$	3,869,532
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	$	1,616,758	$	1,672,166
Restricted cash included in other current assets	103,809		16,364
Restricted cash included in other assets	6,724		6,724
Restricted cash and restricted cash equivalents included in funds held for customers	2,181,322		2,174,278
Total cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period	$	3,908,613	$	3,869,532


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	1,227,764	$	—	$	—	$	1,227,764
Corporate bonds	—		19,121		—		19,121
U.S. treasury securities	19,950		—		—		19,950
	1,247,714		19,121		—		1,266,835
Short-term investments:
Corporate bonds	—		641,267		—		641,267
U.S. treasury securities	313,704		—		—		313,704
U.S. agency securities	—		26,119		—		26,119
Asset-backed securities	—		31,270		—		31,270
Certificates of deposit	—		54,178		—		54,178
	313,704		752,834		—		1,066,538
Funds held for customers:
Restricted cash equivalents:
Money market funds	29,061		—		—		29,061
Corporate bonds	—		237,682		—		237,682
	29,061		237,682		—		266,743
Short-term investments:
Corporate bonds	—		734,878		—		734,878
Certificates of deposit	—		426,189		—		426,189
Municipal bonds	—		635		—		635
Asset-backed securities	—		81,680		—		81,680
U.S. treasury securities	53,221		—		—		53,221
	53,221		1,243,382		—		1,296,603
Total assets measured at fair value	$	1,643,700	$	2,253,019	$	—	$	3,896,719

Liabilities
Contingent consideration(1)	$	—	$	—	$	10,794	$	10,794
Total liabilities measured at fair value	$	—	$	—	$	10,794	$	10,794


	June 30, 2022
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	1,435,111	$	—	$	—	$	1,435,111
Corporate bonds	—		11,430		—		11,430
	1,435,111		11,430		—		1,446,541
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	$	1,894,614	$	2,113,398	$	398	$	4,008,410


	December 31, 2022
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Corporate bonds	$	644,658	$	70	$	(3,461)	$	641,267
U.S. treasury securities	315,325		21		(1,641)		313,705
Asset-backed securities	31,368		10		(108)		31,270
Certificates of deposit	54,178		—		—		54,178
U.S. agency securities	26,079		51		(11)		26,119
Total	$	1,071,607	$	152	$	(5,221)	$	1,066,538


	December 31, 2022
	Fair value		Unrealized losses
Corporate bonds	$	354,715	$	(3,461)
U.S. treasury securities	223,429		(1,641)
Asset backed securities	27,508		(108)
U.S. agency securities	8,769		(11)
Total	$	614,421	$	(5,221)


	December 31, 2022		June 30, 2022
Current and less than 30 days past due	$	384,944	$	257,618
30 ~ 59 days past due	2,882		1,677
60 ~ 89 days past due	2,449		1,199
90 ~ 119 days past due	2,463		1,186
Over 119 days past due	105		126
Total	$	392,843	$	261,806


	Three Months Ended December 31, 2022		Six Months Ended December 31, 2022
Principal subject to forgiveness(1)	$	81	$	81
Principal subject to late fee forgiveness(1)	—		696
Other-than-insignificant payment delay(2)	199		2,439
Payment term extension(3)	544		577
Total card receivables	$	824	$	3,793


	Three Months Ended December 31,				Six Months Ended December 31,
	2022		2021		2022		2021
Balance, beginning	$	7,541	$	3,717	$	5,414	$	1,740
Initial allowance for credit losses on purchased card receivables with credit deterioration	—		296		10		310
Provision for expected credit losses	8,520		5,190		15,103		9,225
Charge-off amounts	(4,379)		(5,020)		(9,412)		(7,296)
Recoveries collected	266		424		833		628
Balance, end of period	$	11,948	$	4,607	$	11,948	$	4,607


	December 31, 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	(11,532)		(12,071)		(12,873)		(14,142)
Net carrying amount	$	563,468	$	1,137,929	$	562,127	$	1,135,858


	December 31, 2022		June 30, 2022
Restricted cash	$	1,914,579	$	1,685,937
Restricted cash equivalents	266,743		168,260
Funds receivable	9,470		6,747
Corporate bonds	734,878		807,685
Certificates of deposit	426,189		397,533
Municipal bonds	635		6,516
Asset backed securities	81,680		69,912
U.S. treasury securities	53,221		3,072
Total funds held for customers	3,487,395		3,145,662
Less - income earned by the Company included in other current assets	(13,347)		(3,002)
Total funds held for customers, net of income earned by the Company	$	3,474,048	$	3,142,660


	December 31, 2022		June 30, 2022
Gross amount of acquired card receivables	$	392,843	$	261,806
Less: allowance for credit losses	(11,948)		(5,414)
Total	$	380,895	$	256,392


	Three Months Ended December 31,				Six Months Ended December 31,
	2022 (1)		2021		2022 (1)		2021
Initial fair value of consideration received:
Cash	$	—	$	366,706	$	316,477	$	625,207
Beneficial interest derivative	—		1,093		1,682		2,287
Total	$	—	$	367,799	$	318,159	$	627,494


Fiscal years ending June 30:	Amount
Remainder of 2023	$	7,558
2024	13,920
2025	13,424
2026	13,292
2027	13,226
2028	13,590
Thereafter	35,919
Gross lease payments	110,929
Less - present value adjustments	(19,913)
Total operating lease liabilities, net	$	91,016


	December 31,
	2022	2021
Stock options	3,156	4,862
Restricted stock units	4,644	2,866
Total	7,800	7,728


	As of December 31,
	2022	2021	% Growth
Businesses using our solutions (1)	435,800	373,500	17%


	Three Months Ended December 31,				Change				Six Months Ended December 31,				Change
	2022		2021		$		%		2022		2021 (1)		$		%
Revenue	$	260,006	$	156,478	$	103,528	66	%	$	489,930	$	274,827	$	215,103	78	%
Cost of revenue
Service costs (2)	36,965		24,338		12,627		52	%	71,786		45,051		26,735		59	%
Depreciation and amortization of intangible assets (3)	10,502		10,048		454		5	%	20,789		19,170		1,619		8	%
Total cost of revenue	47,467		34,386		13,081		38	%	92,575		64,221		28,354		44	%
Gross profit	212,539		122,092		90,447		74	%	397,355		210,606		186,749		89	%
Operating expenses
Research and development (2)	78,910		51,377		27,533		54	%	154,030		93,261		60,769		65	%
Sales and marketing (2)(4)	164,683		69,896		94,787		136	%	283,308		123,525		159,783		129	%
General and administrative (2)	69,381		64,965		4,416		7	%	136,119		122,480		13,639		11	%
Depreciation and amortization of intangible assets (3)	12,028		11,929		99		1	%	24,055		21,620		2,435		11	%
Total operating expenses	325,002		198,167		126,835		64	%	597,512		360,886		236,626		66	%
Loss from operations	(112,463)		(76,075)		(36,388)		48	%	(200,157)		(150,280)		(49,877)		33	%
Other income (expense), net	17,022		(5,000)		22,022		(440)	%	22,970		(8,475)		31,445		(371)	%
Loss before benefit from income taxes	(95,441)		(81,075)		(14,366)		18	%	(177,187)		(158,755)		(18,432)		12	%
Benefit from income taxes	(365)		(635)		270		(43)	%	(471)		(4,056)		3,585		(88)	%
Net loss	$	(95,076)	$	(80,440)	$	(14,636)	18	%	$	(176,716)	$	(154,699)	$	(22,017)	14	%


February 3, 2023	By:	/s/ René Lacerte
(Date)		René Lacerte
		Chief Executive Officer
		(Principal Executive Officer)

February 3, 2023	By:	/s/ John Rettig
(Date)		John Rettig
		Chief Financial Officer and Executive Vice President, Finance and Operations
		(Principal Financial Officer)


Bill.com Holdings, Inc.

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