Bill.com (NYSE:BILL) Reports Upbeat Q1, Provides Optimistic Full-Year Guidance

Kayode Omotosho /
2024/05/02 4:28 pm EDT

Payments and billing software maker Bill.com (NYSE:BILL) beat analysts' expectations in Q1 CY2024, with revenue up 18.5% year on year to $323 million. On top of that, next quarter's revenue guidance ($325 million at the midpoint) was surprisingly good and 3.3% above what analysts were expecting. It made a non-GAAP profit of $0.60 per share, improving from its profit of $0.50 per share in the same quarter last year.

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Bill.com (BILL) Q1 CY2024 Highlights:

  • Revenue: $323 million vs analyst estimates of $306 million (5.6% beat)
  • EPS (non-GAAP): $0.60 vs analyst estimates of $0.54 (12.1% beat)
  • Revenue Guidance for Q2 CY2024 is $325 million at the midpoint, above analyst estimates of $314.5 million
  • Gross Margin (GAAP): 83%, down from 86.1% in the same quarter last year
  • Free Cash Flow of $62.96 million, down 15.2% from the previous quarter
  • Market Capitalization: $6.60 billion

“We delivered strong profitable growth for the quarter, continued our rapid pace of innovation, and executed with persistent rigor and effectiveness,” 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 three years, growing from $59.74 million in Q3 2021 to $323 million this quarter.

Bill.com Total Revenue

This quarter, Bill.com's quarterly revenue was once again up 18.5% year on year. However, its growth did slow down compared to last quarter as the company's revenue increased by just $4.53 million in Q1 compared to $13.51 million in Q4 CY2023. While we'd like to see revenue increase by a greater amount each quarter, a one-off fluctuation is usually not concerning.

Next quarter's guidance suggests that Bill.com is expecting revenue to grow 9.8% year on year to $325 million, slowing down from the 47.8% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 9.1% 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 $62.96 million in Q1, up 163% year on year.

Bill.com Free Cash Flow

Bill.com has generated $257.7 million in free cash flow over the last 12 months, an impressive 20.7% of revenue. This high FCF margin stems from its asset-lite business model and strong competitive positioning, giving it the option to return capital to shareholders or reinvest in its business while maintaining a cash cushion.

Key Takeaways from Bill.com's Q1 Results

We enjoyed seeing Bill.com exceed analysts' revenue expectations this quarter. We were also glad next quarter's revenue guidance came in higher than Wall Street's estimates. On the other hand, its gross margin declined. Overall, we think this was a really good quarter that should please shareholders. Investors were likely expecting more, however, and the stock is down 2% after reporting, trading at $62 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.