BILL Holdings, Inc 10-Q for FY2024 Q1

BILL Holdings, Inc. (BILL)

10-Q 2023-11-03 For: 2023-09-30

Added on April 12, 2026

About this 10-Q

BILL Holdings, Inc filed this 10-Q on November 3, 2023, covering the quarter ended September 30, 2023 (FY2024 Q1).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $304.99M; up 32.6% from $229.92M a year earlier
Net loss: $27.86M; compared with a net loss of $81.64M a year earlier
Diluted EPS: -$0.26; 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 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	7
	Notes to Condensed Consolidated Financial Statements	8
	Note 1 – The Company and Its Significant Accounting Policies	8
	Note 2 – Revenue	10

	Note 3 – Fair Value Measurement	10
	Note 4 – Short-Term Investments	14
	Note 5 – Funds Held for Customers	15
	Note 6 – Acquired Card Receivables	17
	Note 7 – Debt and Borrowings	19
	Note 8 – Stockholders’ Equity	23
	Note 9 – Other Income (Expenses), Net	24
	Note 10 – Income Taxes	24
	Note 11 – Commitments and Contingencies	24


	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	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	42

Part II. OTHER INFORMATION		44
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	81
Item 3.	Defaults Upon Senior Securities	82
Item 4.	Mine Safety Disclosures	82
Item 5.	Other Information	82
Item 6.	Exhibits	83

SIGNATURES		84


	September 30, 2023		June 30, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	1,527,182	$	1,617,151
Short-term investments	1,119,456		1,043,110
Accounts receivable, net	24,100		28,233
Acquired card receivables, net	552,827		458,650
Prepaid expenses and other current assets	195,027		170,111
Funds held for customers	3,263,528		3,355,909
Total current assets	6,682,120		6,673,164
Non-current assets:
Operating lease right-of-use assets, net	66,600		68,988
Property and equipment, net	85,294		81,564
Intangible assets, net	341,206		361,427
Goodwill	2,396,509		2,396,509
Other assets	48,654		54,366
Total assets	$	9,620,383	$	9,636,018

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	6,491	$	8,519
Accrued compensation and benefits	23,030		32,901
Deferred revenue	19,489		26,328
Other accruals and current liabilities	252,932		194,733
Borrowings from credit facilities, net	135,033		135,046
Customer fund deposits	3,263,528		3,355,909
Total current liabilities	3,700,503		3,753,436
Non-current liabilities:
Deferred revenue	4,800		410
Operating lease liabilities	69,969		72,477
Convertible senior notes, net	1,706,494		1,704,782
Other long-term liabilities	20,504		18,944
Total liabilities	5,502,270		5,550,049
Commitments and contingencies (Note 11)
Stockholders' equity:
Common stock	2		2
Additional paid-in capital	5,022,021		4,946,623
Accumulated other comprehensive loss	(3,813)		(4,488)
Accumulated deficit	(900,097)		(856,168)
Total stockholders' equity	4,118,113		4,085,969
Total liabilities and stockholders' equity	$	9,620,383	$	9,636,018


	Three Months Ended September 30,
	2023		2022
Revenue
Subscription and transaction fees	$	265,142	$	214,611
Interest on funds held for customers	39,843		15,313
Total revenue	304,985		229,924
Cost of revenue
Service costs	44,904		34,820
Depreciation and amortization of intangible assets (1)	11,122		10,287
Total cost of revenue	56,026		45,107
Gross profit	248,959		184,817
Operating expenses
Research and development	89,065		75,121
Sales and marketing	118,398		118,633
General and administrative	85,326		66,738
Depreciation and amortization of intangible assets (1)	12,817		12,019
Total operating expenses	305,606		272,511
Loss from operations	(56,647)		(87,694)
Other income, net	29,308		5,947
Loss before provision for (benefit from) income taxes	(27,339)		(81,747)
Provision for (benefit from) income taxes	522		(107)
Net loss	$	(27,861)	$	(81,640)

Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.26)	$	(0.78)
Weighted-average number of common shares used to compute net loss per share attributable to common stockholders:
Basic and diluted	106,817		105,086


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 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


	Common stock			Additional paid-in capital		Accumulated other comprehensive income		Accumulated deficit		Total stockholders' deficit
	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


	Three Months Ended September 30,
	2023		2022
Cash flows from operating activities:
Net loss	$	(27,861)	$	(81,640)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation	65,147		72,620
Amortization of intangible assets	20,221		19,769
Depreciation of property and equipment	3,718		2,546
Amortization of capitalized internal-use software costs	1,352		924
Amortization of debt issuance costs, net of accretion of debt premium	1,761		1,712
Amortization of premium (accretion of discount) on investments in marketable debt securities	(13,093)		(2,215)
Provision for losses on acquired card receivables and other financial assets	12,401		6,611
Non-cash operating lease expense	2,388		2,342
Deferred income taxes	(42)		(299)
Other	(562)		930
Changes in assets and liabilities:
Accounts receivable	3,707		(4,774)
Prepaid expenses and other current assets	(4,704)		(1,339)
Other assets	(1,074)		(1,138)
Accounts payable	(2,508)		1,511
Other accruals and current liabilities	(2,286)		4,247
Operating lease liabilities	(2,423)		(2,386)
Other long-term liabilities	(32)		34
Deferred revenue	(2,449)		(1,303)
Net cash provided by operating activities	53,661		18,152
Cash flows from investing activities:

Purchases of corporate and customer fund short-term investments	(399,588)		(859,911)
Proceeds from maturities of corporate and customer fund short-term investments	757,169		838,099

Purchases of loans held for investment	(32,756)		—
Principal repayments of loans held for investment	25,330		—
Acquired card receivables, net	(42,333)		(107,943)
Purchases of property and equipment	(403)		(1,376)
Capitalization of internal-use software costs	(5,645)		(4,764)
Proceeds from beneficial interest	—		2,080
Other	—		500
Net cash provided by (used in) investing activities	301,774		(133,315)
Cash flows from financing activities:



Customer fund deposits liability and other	(91,190)		(25,472)
Prepaid card deposits	(13,979)		10,923
Repurchase of common stock	(12,061)		—


Proceeds from exercise of stock options	2,946		3,901
Proceeds from issuance of common stock under the employee stock purchase plan	7,846		8,494
Contingent consideration payout	(5,471)		—
Net cash used in financing activities	(111,909)		(2,154)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	(180)		(277)
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents	243,346		(117,594)
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period	4,224,840		3,542,715
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period	$	4,468,186	$	3,425,121
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	$	1,527,182	$	1,608,966
Restricted cash included in other current assets	98,313		71,629
Restricted cash included in other assets	7,088		6,724
Restricted cash and restricted cash equivalents included in funds held for customers	2,835,603		1,737,802
Total cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period	$	4,468,186	$	3,425,121


	September 30, 2023
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	1,056,800	$	—	$	—	$	1,056,800
Corporate bonds	—		50,655		—		50,655
U.S. treasury securities	—		14,858		—		14,858
	1,056,800		65,513		—		1,122,313
Short-term investments:
Corporate bonds	—		452,417		—		452,417
U.S. treasury securities	—		483,829		—		483,829
U.S. agency securities	—		54,086		—		54,086
Asset-backed securities	—		63,220		—		63,220
Certificates of deposit	—		65,904		—		65,904
	—		1,119,456		—		1,119,456
Funds held for customers:
Restricted cash equivalents:
Money market funds	1,133,687		—		—		1,133,687


	1,133,687		—		—		1,133,687
Short-term investments:
Corporate bonds	—		199,128		—		199,128
Certificates of deposit	—		93,317		—		93,317
U.S. agency securities	—		27,484		—		27,484
Asset-backed securities	—		49,087		—		49,087
U.S. treasury securities	—		54,560		—		54,560
	—		423,576		—		423,576
Total assets measured at fair value	$	2,190,487	$	1,608,545	$	—	$	3,799,032

Liabilities
Contingent consideration(1)	$	—	$	—	$	(5,630)	$	(5,630)
Total liabilities measured at fair value	$	—	$	—	$	(5,630)	$	(5,630)


	June 30, 2023
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	1,131,621	$	—	$	—	$	1,131,621
Certificates of deposit	—		2,578		—		2,578
Corporate bonds	—		45,301		—		45,301
U.S. treasury securities	44,856		—		—		44,856
	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. agency securities	—		27,458		—		27,458
Asset-backed securities	—		70,661		—		70,661
U.S. treasury securities	81,074		—		—		81,074
	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)


	September 30, 2023
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Corporate bonds	$	454,350	$	75	$	(2,008)	$	452,417
U.S. treasury securities	484,895		17		(1,083)		483,829
Asset-backed securities	63,323		17		(120)		63,220
Certificates of deposit	65,904		—		—		65,904
U.S. agency securities	54,283		6		(203)		54,086
Total	$	1,122,755	$	115	$	(3,414)	$	1,119,456


	September 30, 2023
	Fair value		Unrealized losses
Corporate bonds	$	292,968	$	(2,008)
U.S. treasury securities	298,908		(1,083)
Asset-backed securities	47,466		(120)
U.S. agency securities	49,275		(203)
Total	$	688,617	$	(3,414)


	September 30, 2023		June 30, 2023
Current and less than 30 days past due	$	559,169	$	463,704
30 ~ 59 days past due	5,196		2,507
60 ~ 89 days past due	3,277		4,544
90 ~ 119 days past due	2,883		3,196
Over 119 days past due	815		197
Total	$	571,340	$	474,148


	September 30, 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	(9,514)		(8,992)		(10,188)		(10,030)
Net carrying amount	$	565,486	$	1,141,008	$	564,812	$	1,139,970


	Three Months Ended September 30,
	2023		2022
RSUs	$	54,864	$	55,670
Stock options	3,707		11,793
Performance-based awards	5,063		3,291
Employee stock purchase plan	2,766		2,821
Market-based RSUs	1,070		1,254
Total stock-based compensation	$	67,470	$	74,828


	Unrecognized compensation (in thousands)		Weighted-average recognition period (in years)
RSUs	$	622,831	3.2
Performance-based awards	24,240		3.3
Market-based RSUs	11,114		1.4
Stock options	11,069		1.2
Employee stock purchase plan	3,446		0.6
Total unamortized stock-based compensation	$	672,700


	September 30, 2023		June 30, 2023
Restricted cash	$	1,701,916	$	1,793,088
Restricted cash equivalents	1,133,687		713,469
Funds receivable	11,611		12,822
Corporate bonds	199,128		433,920
Certificates of deposit	93,317		233,291

Asset-backed securities	49,087		70,661
U.S. agency securities	27,484		27,458
U.S. treasury securities	54,560		81,074
Total funds held for customers	3,270,790		3,365,783
Less - income earned by the Company included in other current assets	(7,262)		(9,874)
Total funds held for customers, net of income earned by the Company	$	3,263,528	$	3,355,909


	September 30, 2023		June 30, 2023
Gross amount of acquired card receivables	$	571,340	$	474,148
Less: allowance for credit losses	(18,513)		(15,498)
Total	$	552,827	$	458,650


	September 30,
	2023	2022
RSUs	5,619	4,904
Stock options	2,363	3,498
Performance-based awards	228	—
Employee stock purchase plan	182	—
Market-based RSUs	115	—
Total	8,507	8,402


	As of September 30,
	2023	2022	% Growth
Businesses using our solutions (1)	471,200	419,800	12%


	Three Months Ended September 30,				Change
	2023		2022		$		%
Revenue
Subscription and transaction fees (2)	$	265,142	$	214,611	$	50,531	24	%
Interest on funds held for customers	39,843		15,313		24,530		160	%
Total revenue	304,985		229,924		75,061		33	%
Cost of revenue
Service costs (2)	44,904		34,820		10,084		29	%
Depreciation and amortization of intangible assets (1)	11,122		10,287		835		8	%
Total cost of revenue	56,026		45,107		10,919		24	%
Gross profit	248,959		184,817		64,142		35	%
Operating expenses
Research and development (2)	89,065		75,121		13,944		19	%
Sales and marketing (2)	118,398		118,633		(235)		—	%
General and administrative (2)	85,326		66,738		18,588		28	%
Depreciation and amortization of intangible assets (1)	12,817		12,019		798		7	%
Total operating expenses	305,606		272,511		33,095		12	%
Loss from operations	(56,647)		(87,694)		31,047		(35)	%
Other income, net	29,308		5,947		23,361		393	%
Loss before provision for (benefit from) income taxes	(27,339)		(81,747)		54,408		(67)	%
Provision for (benefit from) income taxes	522		(107)		629		(588)	%
Net loss	$	(27,861)	$	(81,640)	$	53,779	(66)	%


	Three Months Ended September 30,				As a % of total revenue
					Three Months Ended September 30,
	2023		2022		2023		2022
Acquisition Related Awards	$	5,066	$	28,953	1	%	13	%
Non-Acquisition Related Awards	60,081		43,667		20	%	19	%
Total stock-based compensation	$	65,147	$	72,620	21	%	32	%


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)
July 1, 2023 - July 31, 2023	—	$	—	—	$	212,383
August 1, 2023 - August 31, 2023	0	$	96.64	0	$	212,338
September 1, 2023 - September 31, 2023	160	$	100.32	160	$	196,335
Total	160			160	$	196,335


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

November 3, 2023	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)