BILL Holdings, Inc 10-Q for FY2021 Q1

BILL Holdings, Inc. (BILL)

10-Q 2020-11-06 For: 2020-09-30

Added on April 12, 2026

About this 10-Q

BILL Holdings, Inc filed this 10-Q on November 6, 2020, covering the quarter ended September 30, 2020 (FY2021 Q1).

Headline figures

Quarter ended September 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $46.21M; up 31.4% from $35.18M a year earlier
Net loss: $12.95M; compared with a net loss of $5.7M a year earlier

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Delaware		83-2661725

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

1800 Embarcadero Road, Palo Alto, CA		94303

(Address of principal executive offices)		(Zip Code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.00001 par value		BILL		The New York Stock Exchange

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☐

Emerging growth company	☒

		Page
Special Note Regarding Forward-Looking Statements		1

Part 1. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Loss	5
	Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	37

Part II. OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67
Item 3.	Defaults Upon Senior Securities	67
Item 4.	Mine Safety Disclosures	67
Item 5.	Other Information	67
Item 6.	Exhibits	68
	Signatures	69

	September 30,			June 30,
	2020			2020
ASSETS
Current assets:
Cash and cash equivalents	$	564,153		$	573,643
Short-term investments		136,171			123,974
Accounts receivable, net		5,042			4,252
Unbilled revenue		6,925			6,549
Prepaid expenses and other current assets		15,421			26,781
Funds held for customers		1,668,903			1,644,250
Total current assets		2,396,615			2,379,449
Non-current assets:
Operating lease right-of-use assets		43,400			—
Property and equipment, net		21,709			13,866
Other assets		17,484			10,700
Total assets	$	2,479,208		$	2,404,015

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	6,566		$	3,478
Accrued compensation and benefits		7,605			12,387
Other accrued and current liabilities		8,335			8,541
Deferred revenue		6,166			5,891
Line of credit borrowings		2,300			2,300
Operating lease liabilities		2,485			—
Customer fund deposits		1,668,903			1,644,250
Total current liabilities		1,702,360			1,676,847
Non-current liabilities:
Deferred revenue		2,785			2,622
Operating lease liabilities		52,934			—
Other long-term liabilities		2,361			13,827
Total liabilities		1,760,440			1,693,296
Commitments and contingencies
Stockholders' equity:
Preferred stock		—			—
Common stock		2			2
Additional paid-in capital		879,346			857,044
Accumulated other comprehensive income		1,118			2,420
Accumulated deficit		(161,698	)		(148,747	)
Total stockholders' equity		718,768			710,719
Total liabilities and stockholders' equity	$	2,479,208		$	2,404,015

	Three months ended September 30,
	2020			2019
Revenue
Subscription and transaction fees	$	43,788		$	28,548
Interest on funds held for customers		2,421			6,632
Total revenue		46,209			35,180
Cost of revenue		12,106			9,147
Gross profit		34,103			26,033
Operating expenses
Research and development		17,786			11,515
Sales and marketing		12,908			10,267
General and administrative		17,190			10,535
Total operating expenses		47,884			32,317
Loss from operations		(13,781	)		(6,284	)
Other income, net		830			639
Loss before provision for income taxes		(12,951	)		(5,645	)
Provision for income taxes		—			51
Net loss	$	(12,951	)	$	(5,696	)

Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.16	)	$	(0.69	)
Weighted-average number of common shares used to compute net loss per share attributable to common stockholders:
Basic and diluted		80,216			8,231

	Three months ended September 30, 2020
							Accumulated
					Additional		other						Total
	Common stock				paid-in		comprehensive			Accumulated			stockholders'
	Shares		Amount		capital		income			deficit			equity
Balance at June 30, 2020		79,635	$	2	$	857,044	$	2,420		$	(148,747	)	$	710,719
Issuance of common stock upon exercise of stock options and release of restricted stock units		1,164		—		8,081		—			—			8,081
Issuance of common stock under the employee stock purchase plan		226		—		4,327		—			—			4,327
Stock-based compensation		—		—		9,894		—			—			9,894
Other comprehensive loss		—		—		—		(1,302	)		—			(1,302	)
Net loss		—		—		—		—			(12,951	)		(12,951	)
Balance at September 30, 2020		81,025	$	2	$	879,346	$	1,118		$	(161,698	)	$	718,768

	Three months ended September 30, 2019
	Redeemable										Accumulated
	convertible								Additional		other						Total
	preferred stock				Common stock				paid-in		comprehensive			Accumulated			stockholders'
	Shares		Amount		Shares		Amount		capital		income			deficit			deficit
Balance at June 30, 2019		52,435	$	276,307		8,154	$	1	$	14,672	$	326		$	(117,656	)	$	(102,657	)
Issuance of common stock upon exercise of stock options		—		—		142		—		294		—			—			294
Stock-based compensation		—		—		—		—		2,276		—			—			2,276
Other comprehensive loss, net of tax		—		—		—		—		—		(198	)		—			(198	)
Net loss		—		—		—		—		—		—			(5,696	)		(5,696	)
Balance at September 30, 2019		52,435	$	276,307		8,296	$	1	$	17,242	$	128		$	(123,352	)	$	(105,981	)

	Three months ended September 30,
	2020			2019 ⁽¹⁾
Cash flows from operating activities:
Net loss	$	(12,951	)	$	(5,696	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		924			985
Stock-based compensation		9,894			2,276
Amortization of premium (accretion of discount) on investments in marketable debt securities		46			(730	)
Non-cash operating lease expense		765			—
Revaluation of warrant liabilities		—			165
Changes in assets and liabilities:
Accounts receivable		(790	)		707
Unbilled revenue		(376	)		(621	)
Prepaid expenses and other current assets		2,314			(1,142	)
Other assets		(6,784	)		(50	)
Accounts payable		1,566			508
Accrued and other current liabilities		(4,504	)		1,132
Operating lease liabilities		5,764			—
Other long-term liabilities		1,338			93
Deferred revenue		438			(7	)
Net cash used in operating activities		(2,356	)		(2,380	)
Cash flows from investing activities:
Purchases of corporate and customer fund short-term investments		(343,345	)		(189,204	)
Proceeds from maturities of corporate and customer fund short-term investments		244,332			255,171
Proceeds from sale of corporate and customer fund short-term investments		33,286			10,761
(Increase) decrease in other receivables included in funds held for customers		(1,522	)		2,049
Purchases of property and equipment		(5,894	)		(1,946	)
Capitalization of internal-use software costs		(314	)		(215	)
Net cash (used in) provided by investing activities		(73,457	)		76,616
Cash flows from financing activities:
Increase in customer fund deposits liability		24,653			137,186
Proceeds from exercise of stock options		8,962			294
Proceeds from issuance of common stock under the employee stock purchase plan		4,327			—
Payments of offering costs related to the follow-on public offering		(664	)		—
Payments of deferred offering costs		—			(874	)
Payments of deferred debt issuance costs		—			(151	)
Net cash provided by financing activities		37,278			136,455
Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents		(38,535	)		210,691
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period		1,592,377			983,168
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period	$	1,553,842		$	1,193,859
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows above:
Cash and cash equivalents	$	564,153		$	86,249
Restricted cash included in other current assets		119			256
Restricted cash and restricted cash equivalents included in funds held for customers		989,570			1,107,354
Total cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period	$	1,553,842		$	1,193,859

	As previously reported			ASU No. 2016-18 adjustments		As adjusted
Net cash used in operating activities	$	(2,380	)	$	—	$	(2,380	)
Net cash (used in) provided by investing activities		(138,132	)		214,748		76,616
Net cash provided by financing activities		136,455			—		136,455
Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents		(4,057	)		214,748		210,691
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period		90,306			892,862		983,168
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period	$	86,249		$	1,107,610	$	1,193,859

	September 30, 2020
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	7,615	$	—	$	—	$	7,615
		7,615		—		—		7,615
Short-term investments:
U.S. treasury securities		45,054		—		—		45,054
Corporate bonds		—		69,573		—		69,573
Asset-backed securities		—		21,544		—		21,544
		45,054		91,117		—		136,171
Funds held for customers:
Restricted cash equivalents		387,710		33,662		—		421,372
Corporate bonds		—		489,165		—		489,165
Certificates of deposit		—		163,819		—		163,819
U.S. treasury securities		20,787		—		—		20,787
Municipal bonds		—		6,064		—		6,064
		408,497		692,710		—		1,101,207
Total assets measured at fair value	$	461,166	$	783,827	$	—	$	1,244,993

	June 30, 2020
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	20,075	$	—	$	—	$	20,075
		20,075		—		—		20,075
Short-term investments:
U.S. treasury securities		28,368		—		—		28,368
Corporate bonds		—		71,131		—		71,131
Asset-backed securities		—		24,475		—		24,475
		28,368		95,606		—		123,974
Funds held for customers:
Restricted cash equivalents		357,350		76,359		—		433,709
Corporate bonds		—		493,879		—		493,879
Certificates of deposit		—		85,953		—		85,953
U.S. treasury securities		48,952		—		—		48,952
		406,302		656,191		—		1,062,493
Total assets measured at fair value	$	454,745	$	751,797	$	—	$	1,206,542

	September 30, 2020
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
U.S. treasury securities	$	45,007	$	49	$	(2	)	$	45,054
Corporate bonds		69,360		214		(1	)		69,573
Asset-backed securities		21,455		89		—			21,544
Total	$	135,822	$	352	$	(3	)	$	136,171

	September 30, 2020
	Fair value		Unrealized losses
U.S. treasury securities	$	9,502	$	(2	)
Corporate bonds		3,258		(1	)
Total	$	12,760	$	(3	)

Fiscal years ending June 30:	Amount
Remainder of 2021	$	809
2022		7,207
2023		7,432
2024		7,653
2025		7,704
2026		7,416
Thereafter		40,525
Gross lease payments		78,746
Less - present value adjustments		(20,407	)
Less - tenant improvement allowance receivable		(2,920	)
Total operating lease liabilities, net	$	55,419

	September 30,		June 30,
	2020		2020
Deferred sales commissions:
Current	$	3,196	$	2,829
Non-current		5,949		5,613
Total deferred sales commissions	$	9,145	$	8,442
Deferred service costs:
Current	$	837	$	618
Non-current		10,802		4,474
Total deferred service costs	$	11,639	$	5,092

	Amount
Operating lease expense	$	1,547
Short-term lease expense		141
Variable lease expense		668
Total	$	2,356

	As of September 30,
	2020		2019		% Growth
Number of customers		103,600		81,400		27	%

	Three months ended September 30,
	2020		2019		% Growth
Total Payment Volume (amounts in millions)	$	28,822	$	21,982		31	%

	Three months ended September 30,
	2020		2019		% Growth
Transactions processed		6,526,000		5,935,000		10	%

	Three months ended
	September 30,				Change
	2020		2019		Amount			%
Subscription and transaction fees	$	43,788	$	28,548	$	15,240			53	%
Interest on funds held for customers		2,421		6,632		(4,211	)		(63	)%
Total revenue	$	46,209	$	35,180	$	11,029			31	%

November 6, 2020	By:		/s/ René Lacerte
(Date)			René Lacerte
			Chief Executive Officer
			(Principal Executive Officer)

November 6, 2020	By:	/s/ John Rettig
(Date)		John Rettig
		Chief Financial Officer and Executive Vice President, Finance and Operations
		(Principal Financial and Accounting Officer)