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Investing.com -- Bill Com (NYSE:BILL) shares tumbled more than 28% in premarket trading Friday after the financial operations platform provider issued weaker-than-expected guidance for the third quarter, overshadowing its better-than-anticipated second-quarter results.
The company reported adjusted earnings per share of $0.56 for the second quarter, surpassing the analyst estimate of $0.46.
Revenue came in at $362.6 million, slightly above the consensus estimate of $359.53 million and up 14% YoY. Core revenue, consisting of subscription and transaction fees, increased 16% YoY to $319.6 million.
Despite the strong Q2 performance, Bill.com’s outlook for the third quarter fell short of expectations. The company forecasts Q3 adjusted EPS between $0.35 and $0.38, compared to the analyst consensus of $0.34. However, projected Q3 revenue of $352.5-357.5 million came in below the $360.4 million consensus, signaling a slowdown in growth.
"We delivered strong financial results and innovated at a rapid pace as we executed on our vision to be the de facto intelligent financial operations platform for SMBs," said René Lacerte, BILL CEO and Founder.
Mizuho (NYSE:MFG) analysts said the negative stock reaction comes as the results "disappointed investors," who had bullish expectations heading into the print.
"We remain on the sidelines given BILL’s current investment cycle and look for consistent execution and path to top-line reacceleration towards its 20% target," they added, lowering the price target on BILL stock to $70 from $75.
Bill.com processed $84 billion in total payment volume during Q2, a 13% increase YoY, and handled 30 million transactions, up 17% YoY. The company served 481,300 businesses as of the quarter’s end.
For the full fiscal year 2025, Bill.com expects adjusted EPS of $1.87-$1.97, above the consensus of $1.78. The company projects annual revenue of $1.454-1.469 billion, in line with analyst expectations of $1.46 billion.
Oppenheimer analysts also slashed the target price on BILL to $90 from $110. "We expect shares will encounter pressure on concerns that noisy monetization and softer F3Q outlook could put management’s 20% growth target in FY26 at risk."