Bill.com (NYSE:BILL) Posts Better-Than-Expected Sales In Q2, Stock Jumps 16.1%

Radek Strnad /
2024/02/08 4:13 pm EST

Payments and billing software maker Bill.com (NYSE:BILL) beat analysts' expectations in Q2 FY2024, with revenue up 22.5% year on year to $318.5 million. The company expects next quarter's revenue to be around $304 million, in line with analysts' estimates. It made a non-GAAP profit of $0.63 per share, improving from its profit of $0.42 per share in the same quarter last year.

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Bill.com (BILL) Q2 FY2024 Highlights:

  • Revenue: $318.5 million vs analyst estimates of $298.3 million (6.8% beat)
  • EPS (non-GAAP): $0.63 vs analyst estimates of $0.40 (57.2% beat)
  • Revenue Guidance for Q3 2024 is $304 million at the midpoint, roughly in line with what analysts were expecting
  • The company lifted its revenue guidance for the full year from $1.23 billion to $1.24 billion at the midpoint, a 1.1% increase
  • Free Cash Flow of $74.21 million, up 55.9% from the previous quarter
  • Gross Margin (GAAP): 81.7%, down from 85.8% in the same quarter last year
  • Market Capitalization: $8.00 billion

“We delivered strong growth during the quarter as we automated financial operations for more than 470,000 businesses,” said René Lacerte, BILL 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

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 two years, growing from $156.5 million in Q2 FY2022 to $318.5 million this quarter.

Bill.com Total Revenue

This quarter, Bill.com's quarterly revenue was once again up a very solid 22.5% year on year. On top of that, its revenue increased $13.51 million quarter on quarter, a very strong improvement from the $9.00 million increase in Q1 2024. This is a sign of acceleration of growth and great to see.

Next quarter's guidance suggests that Bill.com is expecting revenue to grow 11.5% year on year to $304 million, slowing down from the 63.3% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 9.9% over the next 12 months before the earnings results announcement.

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Cash Is King

If you've followed StockStory for a while, you know that we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. Bill.com's free cash flow came in at $74.21 million in Q2, up 55.6% year on year.

Bill.com Free Cash Flow

Bill.com has generated $218.7 million in free cash flow over the last 12 months, a solid 18.1% of revenue. This strong FCF margin stems from its asset-lite business model, giving it optionality and plenty of cash to reinvest in its business.

Key Takeaways from Bill.com's Q2 Results

We enjoyed seeing Bill.com exceed analysts' revenue expectations this quarter. We were also glad its full-year revenue guidance came in higher than Wall Street's estimates and free cash flow was strong. Overall, this quarter's results seemed positive and shareholders should feel optimistic. The stock is up 16.1% after reporting and currently trades at $87.92 per share.

So should you invest in Bill.com right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.

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