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Bill.com (NYSE:BILL) Q2: Strong Sales, Stock Jumps 23.1%


Jabin Bastian /
2022/02/03 4:15 pm EST
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Payments and billing software maker Bill.com (NYSE:BILL) reported Q2 FY2022 results beating Wall St's expectations, with revenue up 189% year on year to $156.4 million. On top of that, guidance for next quarter's revenue was surprisingly good, being $157.5 million at the midpoint, 12.2% above what analysts were expecting. Bill.com made a GAAP loss of $80.4 million, down on its loss of $17.1 million, in the same quarter last year.

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Bill.com (BILL) Q2 FY2022 Highlights:

  • Revenue: $156.4 million vs analyst estimates of $131 million (19.3% beat)
  • EPS (non-GAAP): -$0.03 vs analyst estimates of -$0.18
  • Revenue guidance for Q3 2022 is $157.5 million at the midpoint, above analyst estimates of $140.3 million
  • The company lifted revenue guidance for the full year, from $539.5 million to $598.5 million at the midpoint, a 10.9% increase
  • Free cash flow was negative $16 million, compared to negative free cash flow of $25.4 million in previous quarter
  • Customers: 135,000, up from 126,800 in previous quarter
  • Gross Margin (GAAP): 78%, up from 74.1% same quarter last year

“We continued to see strong growth across our business in the second quarter and delivered accelerated revenue growth at a meaningful scale,” said René Lacerte, Bill.com CEO and Founder.

Started by René Lacerte in 2006 after selling his previous payroll and accounting software company PayCycle to Intuit, Bill.com (NYSE:BILL) is a software as a service platform that aims to make payments and billing processes easier for small and medium-sized businesses.

Finance and accounting software benefits from dual trends around costs savings and ease of use. First is the SaaS-ification of businesses, large and small, who much prefer the flexibility of cloud-based, web-browser delivered software paid for on a subscription basis than the hassle and expense of purchasing and managing on-premise enterprise software. Second is the consumerization of business software, whereby multiple standalone processes like supply chain and tax management are aggregated into a single, easy to use platforms.

Sales Growth

As you can see below, Bill.com's revenue growth has been incredible over the last year, growing from quarterly revenue of $54 million, to $156.4 million.

Bill.com Total Revenue

This was another standout quarter with the revenue up a splendid 189% year on year. On top of that, revenue increased $40 million quarter on quarter, a solid improvement on the $38.1 million increase in Q1 2022, and happily, a slight re-acceleration of growth.

Guidance for the next quarter indicates Bill.com is expecting revenue to grow 163% year on year to $157.5 million, improving on the 44.8% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 71.9% over the next twelve months.

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Customer Growth

You can see below that Bill.com reported 135,000 customers at the end of the quarter, an increase of 8,200 on last quarter. That is a fair bit better customer growth than last quarter and quite a bit above the typical customer growth we have seen lately, demonstrating that the business itself has good sales momentum. We've no doubt shareholders will take this as an indication that the company's go-to-market strategy is working very well.

Bill.com Customers

Key Takeaways from Bill.com's Q2 Results

Since it has still been burning cash over the last twelve months it is worth keeping an eye on Bill.com’s balance sheet, but we note that with a market capitalization of $18.9 billion and more than $2.78 billion in cash, the company has the capacity to continue to prioritise growth over profitability.

We were impressed by how strongly Bill.com outperformed analysts’ revenue expectations this quarter. And we were also glad that the revenue guidance for the next quarter exceeded analysts' expectations. Zooming out, we think this was a great quarter and shareholders will likely feel excited about the results. The company is up 23.1% on the results and currently trades at $209.32 per share.

Bill.com may have had a good quarter, so should you invest right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.