Bill Holdings Revenue Jumps 12% in Q4

Key Points

• Total revenue (GAAP) rose 12% to $383.3 million, surpassing the high end of company guidance in Q4 FY2025.

• Non-GAAP earnings per share declined to $0.53 compared to $0.57 in the prior-year quarter, but beat expectations for GAAP revenue.

• Bill Holdings authorized a $300 million share repurchase program, with $100 million completed to date.

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Bill Holdings (NYSE:BILL), a leading financial automation platform for small and mid-sized businesses, reported its fiscal fourth-quarter earnings on August 27, 2025. The most important news from the release was that GAAP revenue, at $383.3 million, topped the guidance range of $370.5 to $380.5 million for Q4 FY2025. Non-GAAP earnings per share landed at $0.53. Non-GAAP operating income and net income also beat expectations.

However, the company saw a slight decline in gross margin, free cash flow at $68.5 million, down from $73.1 million in Q4 FY2024, and a modest decline in non-GAAP earnings per share versus the prior-year quarter. Overall, the period showed continuing growth and strong execution but at a moderating pace, as the business faced some pressure on margins and slower growth in certain revenue lines.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q3 2025 earnings report.

What Bill Holdings Does and Its Strategic Focuses

Bill Holdings is a technology company that automates financial operations for small and midsize businesses (SMBs). Its cloud-based platform handles core functions like accounts payable, accounts receivable, and spend and expense management. The platform uses artificial intelligence to streamline data capture, automate payment processes, and detect duplicate invoices, helping customers save time, minimize errors, and increase efficiency.

In recent years, Bill Holdings has prioritized expansion of its user network, increased payment volume, and ongoing product innovation. Key factors for its long-term growth include deep platform integrations with popular accounting software, robust security and risk controls to maintain low loss rates, and compliance with strict financial regulations. The company sees network growth and AI-based automation as central to differentiating its offering and driving both customer stickiness and new signups.

Fourth Quarter: Performance and Key Developments

During the quarter, the company’s total revenue grew 12% year over year and core revenue, which comes from subscription and transaction fees, increased 15%. This result outpaced both prior guidance and expectations, supported mainly by robust payment transaction activity. Transaction fees, a component of core revenue, grew notably faster than subscription fees, pointing to higher payments volume and effective monetization of those flows.

The business ended June with nearly 494,000 companies using its solutions, up from about 488,000 in the prior quarter. Its broader network reached 8.3 million members as of June 30, 2025, an 18% year-over-year increase. These network effects are important, as more users attract more vendors and customers, and expand the usefulness and reach of the platform. The company processed $86 billion in payment volume, representing 13% year-over-year growth. Payment transaction count reached 33 million, up 18% year over year.

On the margin front, the company’s non-GAAP gross margin slipped 0.8 percentage points compared to the prior year, landing at 84.2%. Non-GAAP operating income fell to $56.4 million, a 6% decrease versus the prior year period, reflecting higher operating expenses. Research and development spending (GAAP) was $340.1 million in FY2025, increasing 1% year over year, while Sales and marketing expense grew 13.6% year over year in FY2025, and total revenue grew 13.4%. Provision for expected credit losses increased from $14.8 million in Q4 FY2024 to $15.8 million in Q4 FY2025.

The company authorized a new $300 million share repurchase program and completed $100 million of buybacks during and just after the quarter, signaling use of its strong cash flow. Free cash flow (non-GAAP) was $68.5 million, down from $73.1 million in Q4 FY2024. Cash and short-term investments at the end of the period totaled just over $2.2 billion, with total liabilities and convertible debt (GAAP) slightly higher year over year as of June 30, 2025.

How the Platform and Product Efforts Shaped Results

Bill Holdings’ platform centers on automating business financial tasks with artificial intelligence, but emphasized ongoing innovation around automation and “intelligent financial operations.” AI underpins features like routing bills, scanning documents for duplicates and errors, and streamlining manual reconciliation processes. These advances are designed to improve productivity for end-users.

The large network effect remains a standout feature: with 8.3 million network members, nearly 500,000 customers, and partnerships with 9,000 accounting firms as of June 30, 2025, the platform’s utility expands as more people join. The scale of the network supports customer loyalty and adoption of new tools. Management highlighted network growth as a long-term driver of transaction and payment volume expansion.

Security and risk management remain core, and the company increased its provisions for expected credit losses (GAAP) in FY2025. This step reflects ongoing vigilance in managing growing payment volumes. Past results showed loss rates below 0.01% for FY2024, underscoring the effectiveness of its risk controls.

Integration with leading accounting software is another pillar of the company’s strategy, as the two-way data syncing with platforms like Xero and other accounting tools adds to the platform’s value and helps reduce manual entry for customers. Seamless integrations remain essential for broad adoption among SMBs.

Outlook and What to Watch Going Forward

For Q1 FY2026, the company forecasts total revenue between $385 million and $395 million, representing expected growth of 7% to 10%. Core revenue is expected to grow 11% to 14%. Non-GAAP operating income is projected to be between $53.5 million and $58.5 million, roughly flat with the most recent quarter. Full-year guidance points to GAAP revenue between $1.59 billion and $1.63 billion for FY2026, up 9% to 11%, and non-GAAP net income in the range of $236 million to $260 million for FY2026, showing little growth at the midpoint.

Non-GAAP diluted earnings per share guidance is $2.00 to $2.20 for FY2026, which may be lower year over year unless offset by further share repurchases. The company noted that buybacks already made are not fully factored into per-share guidance.

Looking ahead, investors may want to monitor the pace of core revenue growth, the mix between subscription and transaction fees, and trends in gross margin. The new share repurchase program could affect per-share figures depending on execution. Key operational drivers include ongoing network expansion, product innovation -- especially around AI -- and managing credit and fraud risks as payment volume grows. Bill Holdings does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Motley Fool Markets Team is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. The Motley Fool takes ultimate responsibility for the content of these articles. Motley Fool Markets Team cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends Bill Holdings. The Motley Fool has a disclosure policy.