Bill.com (NYSE:BILL) Reports Bullish Q4, Stock Jumps 18.2%

Radek Strnad /
2022/08/18 4:32 pm EDT

Payments and billing software maker Bill.com (NYSE:BILL) reported Q4 FY2022 results topping analyst expectations, with revenue up 155% year on year to $200.2 million. On top of that, guidance for next quarter's revenue was surprisingly good, being $209.5 million at the midpoint, 11.7% above what analysts were expecting. Bill.com made a GAAP loss of $84.9 million, down on its loss of $41.8 million, in the same quarter last year.

Is now the time to buy Bill.com? Access our full analysis of the earnings results here, it's free.

Bill.com (BILL) Q4 FY2022 Highlights:

  • Revenue: $200.2 million vs analyst estimates of $183.1 million (9.35% beat)
  • EPS (non-GAAP): -$0.03 vs analyst estimates of -$0.14
  • Revenue guidance for Q1 2023 is $209.5 million at the midpoint, above analyst estimates of $187.5 million
  • Management's revenue guidance for upcoming financial year 2023 is $964.5 million at the midpoint, beating analyst estimates by 9.66% and predicting 50.7% growth (vs 169% in FY2022)
  • Free cash flow was negative $14.9 million, down from positive free cash flow of $22.7 million in previous quarter
  • Customers: 157,800, up from 146,600 in previous quarter
  • Gross Margin (GAAP): 78.3%, up from 74% same quarter last year

“We delivered a strong fourth quarter to conclude fiscal 2022, serving 400,000 businesses and crossing $200 million in quarterly revenue,” 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 $78.2 million, to $200.2 million.

Bill.com Total Revenue

This was another standout quarter with the revenue up a splendid 155% year on year. On top of that, revenue increased $33.3 million quarter on quarter, a very strong improvement on the $10.4 million increase in Q3 2022, and a sign of acceleration of growth, which is very nice to see indeed.

Guidance for the next quarter indicates Bill.com is expecting revenue to grow 79.9% year on year to $209.5 million, slowing down from the 151% year-over-year increase in revenue the company had recorded in the same quarter last year. For the upcoming financial year management expects revenue to be $964.5 million at the midpoint, growing 50.7% compared to 169% increase in FY2022.

In volatile times like these we look for robust businesses with strong pricing power. Unknown to most investors, this company is one of the highest-quality software companies in the world, and their software products have been the default standard in critical industries for decades. The result is an impressive business that is up an incredible 18,152% since the IPO. You can find it on our platform for free.

Customer Growth

You can see below that Bill.com reported 157,800 customers at the end of the quarter, an increase of 11,200 on last quarter. That's about the same customer growth as what we seen last quarter and quite a bit above what we have typically seen over the last year, confirming the company is sustaining a good pace of sales.

Bill.com Customers

Key Takeaways from Bill.com's Q4 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 $15.7 billion and more than $2.7 billion in cash, the company has the capacity to continue to prioritise growth over profitability.

We were impressed by the very optimistic revenue guidance Bill.com provided. And we were also excited to see the strong gross margin growth. Overall, we think this was a strong quarter, that should leave shareholders feeling very positive. The company is up 18.2% on the results and currently trades at $177.05 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.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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