Bill Com at JPMorgan Conference: Strategic Growth Amid Challenges

On Tuesday, 13 May 2025, Bill Com Holdings Inc (NYSE:BILL) participated in the 53rd Annual JPMorgan Global Technology, Media and Communications Conference. The company shared its strategic plans amid both opportunities and challenges. The leadership highlighted resilience and growth strategies, while acknowledging the economic uncertainties impacting the broader market.

Key Takeaways

• Bill Com is focusing on serving small and medium-sized businesses (SMBs) with innovative financial solutions.
• The company is investing heavily in AI to enhance customer experience and operational efficiency.
• Bill Com is actively pursuing stock buybacks and evaluating mergers and acquisitions (M&A) to expand its platform.
• Despite a slight decline in transaction volume, the company remains optimistic about its growth potential.

Financial Results

• Total Payment Volume (TPV) per customer decreased by 2% year-over-year in Q3.
• Adjusted TPV per customer, accounting for leap year, decreased by 0.5% year-over-year.
• Spend & Expense volume grew by more than 20%.
• The company has committed $400 million to stock buybacks this fiscal year.
• Approximately $45 million is being invested in payments, suppliers, accounting firms, and embedded strategies.

Operational Updates

• Bill Com is doubling down on partnerships with accounting firms, achieving a 60% year-over-year increase in net adds.
• The company is enhancing its cross-sell efforts for the Spend & Expense product.
• Bill Com is focusing on advanced ACH and working capital solutions, leveraging its data on buyers and suppliers.
• Challenges include uncertainties from trade policies and the stabilization of Virtual Card Payment adoption.

Future Outlook

• Bill Com aims to expand its revenue capabilities from $1 billion to $10 billion.
• The company is diversifying its business model and investing in technology for greater scale and efficiency.
• AI is expected to accelerate customer adoption and enhance internal processes.
• Bill Com is exploring M&A opportunities to further expand its platform and technology.

Q&A Highlights

• The leadership addressed cyclical challenges in the B2B sector.
• Discussions included the expansion of payment products and AI investments.
• Bill Com is committed to stock buybacks and remains open to M&A opportunities.
• Strong free cash flow and a solid balance sheet provide strategic flexibility.

In conclusion, Bill Com remains focused on strategic growth and innovation. For a more detailed account, refer to the full transcript below.

Full transcript - 53rd Annual JPMorgan Global Technology, Media and Communications Conference:

Tien Tsin Huang, Analyst: think it should work. Yeah. So thank you. This is the bill session. My name is Tien Tsin Huang.

I I cover the payments and ID services sector. So glad to have bill back with us. Renee Lacerte, founder and CEO of bill. John Reddick, president and CFO. I’ve gone to go through a list of of questions that I’ve gathered from from investors, and and hopefully, if we have time, we’ll we’ll take some questions at the the end.

But I think we’ll cover some of the the the main issues that are on top of everyone’s mind. But thank you both for for being with us.

Renee Lacerte, Founder and CEO, Bill: Thank you.

Tien Tsin Huang, Analyst: Thanks for having us. No. It’s always great great to have you. It’s always something to learn and and ask about. But, Renee, maybe just to just to kick it off, I I think I may have asked you this before, but I’ll ask it again in this this setting since you’ve you’ve seen a few cycles and, you know, you’ve you’ve led businesses through those cycles.

I’m curious to get your perspective on, you know, what you’ve learned about SMBs and their resilience. I know we’ve we’ve discussed that in the past, but maybe you can share it with the with the broader audience and how the current cycle compares to the past.

Renee Lacerte, Founder and CEO, Bill: Yeah. I appreciate the question. And I think just some context. One of the things I’ve learned through the cycles is that you do not flinch. You do not get distracted from the mission of serving your customers and making a difference for them each and every day.

And what I’ve learned having grown up in SMBs, my parents, grandparents were small businesses, I’ve started a couple, I’ve definitely served my whole life supporting SMBs, is that they are very resilient. They find ways to make things happen. If they didn’t actually have that characteristic, they wouldn’t be able to start their companies. And so they are acting as they know best, and that is they’re finding ways to get things done. If you think about the impact that we’ve seen over the last couple of years, we’ve had COVID and supply chain constraints and businesses have reacted.

It’s been uncertain. But when that happens, they innovate on their processes. They manage their cash more closely. They focus on their mission for their customers. And our platform enables them to do all of that.

That’s one of the things that we feel really good about is that our platform enables businesses to save time. That’s 50% of the time it takes them to manage their finances. It manages the ability to give them context so they can decide which bills to pay and which ones not to pay. That creates cash flow. So the most important thing a business has is their cash flow and how do you create that leverage.

And the tools we have with insights and obviously AP and AR and spend expense, we have an ability to actually drive cash flow. And, you know, we’re doing this across, you know, half a million customers approximately and 7,000,000 across the network. So lots of opportunity for us in any environment to, you know, stay true to the mission, but I think the main thing I’ve learned through these cycles is that you have to stay focused in these cycles and not get distracted by the noise that’s out there. And so that’s the not flinching, that’s the staying on what you’re out here to do, which is to make an impact on SMBs.

Tien Tsin Huang, Analyst: Good. Perfect. So thinking about demand then for bill services around and bill pay, spending expense, and everything you just discussed there, how would you characterize that given given what you’ve observed so far year to date? Any change in sales cycles or maybe the pitch that your sales team has gone out Yeah.

Renee Lacerte, Founder and CEO, Bill: No, I mean we’ve seen consistent customer acquisition for, you know, probably four to six quarters, more than four to six, probably eight to twelve quarters, right? Which we’ve said is somewhere in the 4,000 to 5,000 customer range for the core APAR platform and somewhere around 1,500 for the spend and expense. And we’ve been consistent in those ranges. What we see is an opportunity though to double down on certain areas of the business. And so one of the areas that we’ve doubled down in is our accountants.

So our accounting firms, we have 9,000 firms across the country. We are the leader when it comes to helping accountants develop their CAS practice, the client advisory services practice. We’ve been doing this since the beginning with CPA.com, the division of the AICPA, and we’re doubling down to help them do more right now. There’s more opportunity where their clients are asking for an opportunity to actually leverage technology to actually be more efficient so they go to the accounts. The 9,000 firms, they come to us.

We build new tools and platform capabilities, which we’ll talk about I’m sure. And what that results in is that our accountants over the last year net adds are up 60% in the given quarter. So that doubling down is working. And the other place we’re doubling down is where we’re being pulled upmarket, right? So the larger customers in the build platform, whether they’re mid market or lower mid market, they’re using the platform, they’re getting a lot of great success with it and now they’re saying, well what if you could do this for me?

What if you could do that for me? And that’s going to enable us to actually develop all the capabilities we did with multi entity and procurement, and that’s going to allow us to go actually reach out to new SMBs and lower market customers that aren’t on the platform. So nothing’s changed in our go to market ecosystem other than continuing to refine the motions that we have and what we see is strong success in accountants and strong success with the outbound efforts with the lower mid market.

Tien Tsin Huang, Analyst: Okay. Good. So ads are consistent for both core and the spend and expense. And let’s just quickly talk about TPV then and spend trends. I know you and John, John you talked about sort of the observations you saw.

What changed from the most recent quarter to from the prior quarter and what trends do you see on the ground today?

John Reddick, President and CFO, Bill: Yes, it’s obviously a little bit more uncertainty in the external environment these days. It’s interesting that SMBs on average though are larger, financially healthier and better equipped to deal with uncertainty than say prior to the pandemic. At the same time, they’re reacting. They’re starting to adapt to some of the unknowns that are out there. They’re a little bit more wait and see than previously, certainly not in full expansion mode.

And we’ve started to see that show up in some of the trends. In the third quarter, we saw slightly lower TPV per customer, about 2% down year over year, about 0.5 if you adjust for leap year, but still down just a little bit. And then transactions per customer, similar story, so down slightly on a year over year basis even more so than the seasonal effect would indicate. So there’s a few categories of slight pullback, things like wholesale trade, real estate, construction, where there’s definitely more of a pause mentality going. On the spend and expense side, we’ve seen much more resilient strength in travel entertainment and other categories that continue to hold up well.

Tien Tsin Huang, Analyst: Good. Good. No, thanks for going through that. I don’t want to spend too much time on the macro. Know you guys see so much data, but I did want to hit a few big picture subjects if that’s okay.

So maybe back to you, Renee, on the industry consolidation Yeah. Question. We we’ve seen your peer Avid Exchange go private. Mastercard, I talked to you earlier today, talked about their investment in in core pay for cross border, high ticket bill payments. Paylocity bought Airbase.

Does this surprise you at all, or does that change your maybe your sense of urgency to to act inorganically? So I don’t think

Renee Lacerte, Founder and CEO, Bill: it surprises us. Mean, we define the category. Day one, I thought and understood that this was a massive need that SMBs had, that they needed an opportunity to automate their financial operations. Everybody was ignoring them. People weren’t paying attention to what they needed.

People were just developing solutions that they thought they needed. And having been an SMB and grown up around SMBs, it was pretty easy for me to see what was missing. And so we defined this category. And so when I see other people coming into it and thinking, oh, well, that’s interesting. Like, well, It’s definitely interesting.

That’s why I’m here. And so, you know, when I think about what we’re building, we’re building something much bigger than I think what I see anybody else trying to We’re building a platform that enables the complete automation of financial operations and that leads to everything from better insights to better cash management to save time. Like these are things that businesses need. And we’ve been building a platform day one that’s purpose built to do all those things. And nothing will distract or deter us from that mission.

The platform we’ve built, I just think about the scale that we have. We have a unique scale that nobody else has, hundreds of billions of dollars moving through the payment rails of our company, 1% of GDP, managed from a risk perspective very efficiently and effectively, and nobody else has that. We’re sending billions of dollars in international payments. We’re doing billions of dollars in card payments. We have tens of billions of dollars on corporate spending programs.

Like there is nobody that has unique assets that we have to actually go after this market aggressively and assertively with conviction that this is what SMBs need. So I think when I see news like this in market, it’s like, yep, I knew it was interesting. This is why I started the company. It does not change at all how we think about going after it because the opportunity is just that big. It allows us to think about building our platform for scale.

So we’ve done acquisitions in the past. We’ll continue to think about that going forward. How do we continue to expand the capabilities, whatever adjacencies may make sense for customers. And this will put us on a path and we’re already on this path to be multiple billions in revenue. So when we crossed a billion, I started thinking about what does it take to go from 1,000,000,000 to 10,000,000,000.

And so the focus has not changed and in fact it maybe does intensify not because of the market but because the opportunity at hand is just so great. The other reason that some urgency comes in and we’ll talk about this later is just the opportunity to leverage AI and how can we accelerate customer adoption, how can we accelerate efficiencies in the business. These are all things that we can do and once you know that you can do them then you should go do them, you shouldn’t wait. And so I think that part is true but I think the overall consolidation is just in some ways it’s interesting, but it’s not really anything that we think about because there are opportunities just that big.

Tien Tsin Huang, Analyst: Okay. Perfect. I do wanna talk about AI and all that good stuff, I do wanna just follow through on that, Renee. Think you’ve taken a long view. We agree, right?

You’ve defined the category, and you’re in the poll position right there with you thinking about it that way. But the b to b group from a stock standpoint, it’s they’ve struggled. Right? Post the pandemic boom, I don’t think that debatable. You know, the cyclicality questions, monetization questions have have come up, and it’s something that that we’ve learned.

So my my question to you is, you know, is it more structural or cyclical versus secular, right, is is is the question? Or have we misunderstood or misjudged expectations? How do you see it?

Renee Lacerte, Founder and CEO, Bill: I definitely see the challenges in b to b as being cyclical. And really just step back and share kind of my experience. Please. Like I said, I was born into an SMB business, and I saw my parents and grandparents build lots of businesses serving lots of SMBs, and that gives a unique perspective of understanding the fire that’s in the belly of every SMB. Like, you don’t go and start a business unless you wanna win.

You don’t take that risk. You don’t take that financial risk. You don’t take that personal risk. You don’t take that ego risk. I mean, there’s a lot of risk that you take when you start a business.

And so the fact that they started a business and now there’s some noise on the outside macro isn’t going to deter them either. They’re gonna be very focused on pursuing their mission and achieving what they wanna achieve for the world. And so I see the cyclical nature of, like, we haven’t seen this before. COVID was something we hadn’t seen. Right?

Supply chain, 10,000,000,000,000 in stimulus. I think all of us can look around and be like, okay, that was probably too much. We could debate what was the right amount, should have been. But 10,000,000,000,000 in stimulus, that’s just a crazy amount that inflated supply chain. Nobody expected that and so that created a problem.

And so and now you’ve got the uncertainty from policies around trade that are creating some unknowns for businesses. And so what I’ve learned about SMBs is there unknowns, they focus on the knowns. What can they control? What can they focus on? And so to me that’s why we think it’s cyclical because we look at our data, still consistent customer adds, right?

We’re adding the same number of customers. You would think maybe macro would impact that, it does not. Still roughly the same number of payments. We have one or two less payments this quarter, which last time you saw that was when COVID hit. That’s a macro thing.

That’s not a structural thing. Still consistent usage of our platform across all payment types, increasing Ad Valorum on the emerging Ad Valorum products, right? So that would be the invoice financing, the instant transfer, the Pay by Card. These products are growing in their adoption. So we continue to see all the things that we put into the platform continue to grow.

It’s still increasing opportunities with international payments. And we think as the friction to card payments abates, which card payments often have cycles of friction, that will also be something that will be in the past and not necessarily anything more than just dynamic in time.

Tien Tsin Huang, Analyst: No. I agree. Thanks for going through that. And look, it’s a long cycle game and I don’t want get too caught up in the short term. But I did, you know, we did appreciate the way we wrote it up was that you are taking matters into your own hands.

You’re not waiting around for the cycle to improve. You’re investing the 40,000,000 to to accelerate growth. Can you just give us a progress report on that? Are you getting the returns you expected? I know the goal was to to get 20% core growth next year.

Is that harder given what we’ve seen with the cycle? I’ll start

Renee Lacerte, Founder and CEO, Bill: and then let John, you know, add some more color. So I mean if you look at what we’ve done to date, we’ve actually delivered on each of the quarters that we said we were going to hit. We had to make some adjustments, we said, for the fourth quarter based on where we saw the macro. And so I would say that our investments are acting as we expected. There’s now a new uncertainty from the macro that we needed to factor in.

Anything else?

John Reddick, President and CFO, Bill: Yes, it feels like we’re making really good progress across investments in four areas focused on payments, suppliers, doubling down on accountants and our embed strategy. We’ll come in a little bit below that $45,000,000 for the year just based on timing throughout the year. But with these investments, important part is it gives us more levers to drive growth going forward. Some of these will materialize fairly quickly. IP local transfer allows us to get international payments wallet share quickly.

Supplier solutions like enhanced ACH and working capital products allow us to monetize more quickly. Doubling down on accountants, you’ve already seen us start to scale account net new adds. Some of the other investments will take a little bit longer to mature and have a material impact on our model. Things like stabilizing virtual card payment adoption growth, driving more card adoption across the whole platform, our embed strategy to reach the long tail. We’re really excited about these, but they’re probably one, two plus year initiatives before they provide material growth.

At the same time, regarding the 20%, we are really confident in our ability to reaccelerate growth in the business. When we look at the investments we’re making in 2025 combined with the leading platform, ecosystem, we feel like we have the levers to drive accelerated growth. Things were a little bit different today than a few quarters ago though when we established the timeline and that target of 20% growth, there’s a little bit more uncertainty how that’s going to impact SMBs is still playing out. And so we’re confident in reacceleration, but it’s a little bit less clear the timeline for that. And I think over the course of the next couple of quarters, we’ll know a lot more about how SMBs are reacting to the environment and we’ll obviously have details share in August around our FY ’26 plan.

Tien Tsin Huang, Analyst: No. All fair. All fair. Thank you for going through that. So quickly, just staying with what you mentioned a little bit there, John, just the playbook to drive the take rate expansion from some of the efforts around your investments focusing on the supplier.

I know there’s been some pricing changes as well, but just give us a little bit more on how that builds up.

John Reddick, President and CFO, Bill: Yes. So we think of it in a few different dimensions. One is scaling existing products, driving adoption through product motions and human sales motions, launching new products for customers and suppliers. As we introduce more solutions, we typically drive better adoption, better adoption, some of that flows to ad valorem payments that has a positive impact on take rate expansion. We’re seeing good growth with SNE.

That’s going to impact our business overall, not just the SNE card product as we do more volume with AP card on the bill core AP platform. And we talked about some of the enterprise supplier solutions, enhanced ACH, which we think that’s going to be an important value add for suppliers and also introduces a new AdVal product for us that stepping back 70 plus percent of our volume is ACH and check payments. And we think a significant piece of that can be addressed through an enterprise supplier solution like this. So I think tens of billions of dollars that are potentially at play moving from a low monetizing fixed fee payment to an AdVal payment. Looking ahead though, and that’s just about payment take rate expansion.

Looking ahead, we’re also investing to diversify the business model though, so that take rate expansion and transaction monetization is one component of a diversified growth algorithm. So expanded use cases on our platform, enabling customers to do more. We have recently talked about procurement, multi entity, batch capabilities. That opens up a larger subscription lever. Working with larger customers, that expands overall ARPU.

Obviously, we talked about the payment enhancements to increase take rate and then finally working capital products, which is a complement to everything we’re doing at the transaction layer for customers. So when we step back and look at maybe over the intermediate term, all these things together provide a pretty significant growth lever for us.

Tien Tsin Huang, Analyst: Okay. Good. That’s a good summary. So I know you mentioned Advanced ACH and product bill typically introduces a couple of new payment products a year. How does Advanced ACH rank relative to some other launches?

What else would you get us to hone in on in terms of what might impact the P and L in terms of new payment products?

John Reddick, President and CFO, Bill: I’d say the two that are top of our list would be this Advanced ACH product and think of it as a category, we’re talking about one unique product right now, but there will be multiple that spin out from this. It’s a lower priced, lower monetizing product than say some of the highest variable price solutions out there, which means it will have much broader appeal. It will address a much higher percentage of our overall payment volume and be a catalyst for growth in AdVal payments for years to come. The second is also a category and that’s these working capital solutions where we know that we’re uniquely positioned with our platform, our unique data and context that we have, understanding both buyers and suppliers, the relationships, the connections, the transaction details. We’re uniquely positioned to underwrite and manage the credit exposure and that will be a big driver as well.

Okay.

Tien Tsin Huang, Analyst: Good. So I do wanna talk about some of the other products, but let’s do tech and bring it back to AI if you don’t mind, Renee. Just just thinking about the AI investments, we talked about it a little bit last year and know it’s come up on on the call, but, you know, we’ve been asking the question of productivity and cost from AI enhancements versus growth benefits from AI products and solutions as you extend it externally. What are you excited about specifically for Bill in AI? Yeah.

Renee Lacerte, Founder and CEO, Bill: I think when I step back and think about the impact of AI just on, you know, anyone’s job, anyone’s role in society, the game changing aspect is it’s gonna be an unlock for creativity. Right? So when the mundane tasks are removed and somebody can actually think more thoughtfully about the rest of their job Yep. That’s gonna be the unlock. And you think about what we do for SMBs, all day long, we’re trying to create unlocks for them.

SMBs wear so many hats. Like, when you really understand the challenges they have, like, they’re just trying to do everything to move their business forward. They’re trying to be a dad, a mom. They’re trying to raise their kids. They have challenges because at work they don’t have just one hat.

Right? And so the unlock that’s necessary for them is massive. And the way we think about it is if you think about a Fortune 500 company, Fortune 1,000 company, there are jobs in the finance teams that actually go after AP, go after AR, go after treasury management, go after collections, go after reconciliation. There are whole teams dedicated to these jobs. And what we see the opportunity to do is to leverage that data and the unique asset that we have to go after creating agents, if you will, that will be the finance team for the entrepreneur that’s doing something at night after the kids have gone to bed.

And so the approach that we’re taking is really leveraging two unique skills that we have. Those skills are, one, we have a great understanding of SMBs. Everybody in the company is passionate. We’re champions for SMBs. We think about what they do, what they need every day.

And we have been doing that for a very long time. So we have a unique skill set to understand what those jobs are, how they do them, what they need from us. We’ve already provided a set of tools that allows them to do some of those things. Right? So I would say today what we have is a do it with you approach where customers are able to actually get support doing their payables, receivables, their spending expense, their cash management with tools from Bill.

But as we roll AI into the capabilities of the software experience, then you get to an opportunity where it’s a do it for you approach. And the human in the loop is still the entrepreneur, the SMB, the CFO at a mid market company, but that human is able to kind of get much better served up information based on the context of the data. So two things we have. One is just that deep experience. The second is the data.

And the data that we have, it’s not just the scale of the data, like the 1% of GDP that goes through Bill that we manage from a risk perspective that nobody else is doing at that level. There’s that size of it, but then there’s also the context. Reason we’re able to actually do the 1% of GDP the way we do it is because we have very rich content data underneath the platform. So that content would be the context of any transaction. So we just don’t have who you paid, when you paid them, how much.

We have all the details of what that transaction is made up of. We have the detail line items, for example. We have the workflow internally, who approved it, who paused on it. All those things are something that we have. And so when you combine that deep passion for SMBs and the understanding, expert understanding that we have with the deep rich data context we have, we are in a position to build agents in ways to help go after those jobs that traditionally would have been jobs that finance teams and Fortune 500 companies had people dedicated to, and now the SMB can have somebody dedicated to and an agent.

So super exciting on that front. And then the second part of your question would be internally what am I excited about? And this is unlocking the creativity of employees. And so when you think about all the capabilities that have really developed in the last twelve to twenty four months, there are so many more tools today that can be leveraged to help whether it’s customer facing, that could be sales, marketing or customer support, or development, which would be obviously engineering and QA. There’s so many more tools that we are leveraging and will be leveraging in the coming year to really create more efficiencies so that our employees can be more creative about those agents that we want to go develop for the SMBs.

So I think it is a pretty interesting time to be a software developer. And one of the things that I’m super excited about is I do believe the increase in efficiency that we will get in the customer experience will be the next call to adoption, if you will, by SMBs. So we say to them today 50% or more of the time it takes to manage their finances, but imagine when you can really drive that down because of the agent capability and give them something they never had before. That will be another significant call to adoption and we’re looking forward to leading that and being a part of that revolution.

Tien Tsin Huang, Analyst: So Renee, are you investing in this today in terms of the agents? Are you constrained in any way? Because you’ve delivered on the margin expansion that you’ve called But given what you just described, do you are you able to invest what you’d like to invest to get to where you want to be on AI?

Renee Lacerte, Founder and CEO, Bill: We are investing where we want to be right now. So I think one of the challenges that anybody should be thinking about is there’s I’ll give some story. A friend of mine’s wife started an AI company three years ago and she sold that to go start another one because she already had tech debt. And so there is this amazing speed that’s happening, and so we are investing, we’re designing all of the capabilities into the platform so that we can grow with these tools as they get better and better versus just, you know, going after one particular strategy. So so we feel good about it and and Ken’s doing a great job leading that effort

Tien Tsin Huang, Analyst: for us. Good. Just staying with margins since I I mentioned it just with, you know, you you talked about timeline being a little bit different confident in in the acceleration. To the extent that the macro does get worse, god forbid that happens, but how how much flexibility do you have to to protect margins and and stay down this path of over delivering on profits if revenue gets a little bit tougher?

John Reddick, President and CFO, Bill: Well, we’ve historically I think tried to balance growth and profitability and we’ve done a really good job at that. We’ve been thoughtful about our investments measuring ROI. We obviously have strong free cash flow, a very strong balance sheet that gives us optionality. The exact formula of balancing growth profitability obviously depends on the severity of the external environment and how that impacts SMBs. But we’re committed to continue our bias for investing to extend our lead in the market and capture the opportunity we’re going after, while at the same time producing great margins and returns for the invested capital that we’re deploying.

So we’ll continue to recalibrate that growth versus profitability balance as we learn more about the external environment. But we feel like as the business has scaled, we’ve also developed levers to create operating efficiency. You’ve seen that in gross margin. You’ve seen that in overall margins including ex float. We’ve been investing, as Renee said, not just in AI for customer use cases, but for internal efficiency purposes.

We’ve been creating expense optimization through offshoring and other efficiency initiatives. And as we scale, that gives us even more opportunity to expand those programs as needed. Okay. And then

Tien Tsin Huang, Analyst: similar macro question, but different approach just with the risk management side and your appetite to extend working capital loans and there’s a lot of products that fit the whole embedded finance or embedded banking theme that’s popular within fintech, spend and expense being part of that. Is there any signs of needing to hold back a little bit?

John Reddick, President and CFO, Bill: Well, starting with spend and expense, we’ve actually been fairly cautious on the macro environment. Ever since interest rates You were early on So it isn’t just now that we’re starting to take a look at that. So we’re very selective at where we lean in. We’ve got really good experience with credit underwriting and we’ve improved results since we’ve owned the Divvy asset.

We also have an advantage in that we’re talking about a pretty short duration asset. Is a charge card, a thirty day charge card. We don’t have a revolving component of that. We may in the future at some point, probably not in this environment. And we feel good about how we’re positioned.

So we don’t view the credit part of the offering as the growth algorithm. We view the software as the big value add and we’ll manage that accordingly. We are making a lot of progress with that SNE business. Obviously net adds are up. Volume is growing north of 20%.

And one of the unique advantages we have is we’re increasingly applying a cross sell motion for this S and E product into the bill customer base where we have even more of an advantage in underwriting given the history and the knowledge of those folks. So I think that also helps us in an uncertain environment with the credit exposure. As it relates to working capital, we’re much earlier in the curve on that product. And so by definition, we’re taking a more cautious approach and learning as we go. Losses will be a part of the growth in figuring out that business, but we’re not in an environment right now where we’re trying to buy growth by being more aggressive with our credit products.

We’re trying to produce the proper margins and returns and we’re very aware of the external environment.

Tien Tsin Huang, Analyst: Yeah. And you can be selective there, right, because it’s so early. That’s right. You can pick the best credits and and grow with that. That make that makes sense.

So that leads me to another question I have just around Renee, you talked about resilience of SMBs. Your partners are also trying to engage with SMBs. Banks are are trying to engage with SMBs. And I know, you know, cash flow three sixty at j is where they’re trying to promote, SMB. So is do you feel more energy out of the partner channel at this stage, whether it be the accountants or the ISVs, banks, you name it?

Any update there?

Renee Lacerte, Founder and CEO, Bill: Yeah. Definitely there’s more energy. We’ve talked about this having started the category, especially with accounts. Think about the 9,000 firms that we are a part of their everyday practice. This is how they make money now.

They support their SMBs with client advisory services, and that’s something they didn’t have before. So the energy in the accounting community continues to grow, and it’s not just the firms we have, which has more clients, but it’s also to bring new firms in. So that awareness is something that’s there because of the trust that we’ve enabled with our partners there. We’ve been doing this a long time. That same trust happens in the FI channel, which we’re transferring into the non FI channel, right, the example of Xero coming online as MGA.

And what we’re seeing is that when people see just the product offering that we have, the use case that businesses have with Bill, the sheer volume that happens, people kind of step back and be like, maybe my customers need that too. And so I would say all of that is increasing. None of this happens overnight. Compared to other points in our timeline, I would say the interest in kind of embedding our capabilities inside of other capabilities is higher than we’ve seen before. One of the examples of this is just with our larger customers.

Our larger customers are using our APIs to actually support themselves in ways that we haven’t yet done. And so we’ve called that out with spend and expense, which leads to more spend on the product sooner because they’re able to get more employees on the product, whatever the use case is, and that’s leveraging the APIs. So there’s more demand for consumption of the APIs and the elements and the widgets that we’ve built, and we expect that to continue, especially as AI continues to make things simpler for folks.

Tien Tsin Huang, Analyst: Okay. Good. Glad to hear. We got two minutes left. I wanna hit a couple of things people make sure people wanted me to ask around the capital allocation.

That’s usually end of the conversation question anyway. But I have to ask it, right, stocks been volatile. Your appetite to buy back stock here, don’t know if there’s a bigger appetite maybe to do M and A given I know we talked about consolidation in general, but what do you see here? Has anything changed?

Renee Lacerte, Founder and CEO, Bill: I mean, there’s we’ve done $400,000,000 in stock buybacks this fiscal year. Yep. And there’s $100,000,000 remaining that’s authorized. So it’s possible we’ll end up doing more. We’re also very focused on driving adjacencies onto the platform that makes sense.

So there are M and A opportunities, not necessarily today, but that we look at and we’ll continue to evaluate. The reason we went public was to have a currency and to have the cash to be able to continue to expand the platform. So we want to make sure that that priority doesn’t get lost in the shuffle.

Tien Tsin Huang, Analyst: Good. We’ve one minute left. Maybe just to close it out. Renee, think last year I probably asked you about sort of what’s the misconception with Bill’s stock. But I thought maybe this year, there’s been a lot of volatility, a lot of uncertainty in the market.

We talked about a lot of things AI included, but I mean, what are you what are you excited about? I mean, what what what are you motivated to get up to work and get going? What can really drive a change maybe in the narrative, whether it be for Bill or for the broader b to b sector? What would you hone in on as maybe the top one, two, or three things?

Renee Lacerte, Founder and CEO, Bill: We just have so much opportunity in front of us. I think sometimes people kind of maybe get blinded by all that opportunity, but we’re not. We’re very focused. We have a laser focused strategy around how we’re gonna execute. We have an amazing team.

I think folks have, you know, I don’t know if people have noticed, but if you look at the team members that we brought on, we changed organizational structure to have John as president to bring on two GMs that one leads to payments, one leading software. That’s now in place. It took time to actually get the right people. But when I see how the team’s interacting, how the team’s working, it’s an exceptional team. It’s the best team I’ve been a part of.

And I’m super excited to, to your point, get up every morning and work with this team to actually make a difference. I think when we think about AI and the implications that has not just for our internal usage of it, but obviously what it does for customers. Ken’s leadership there has been phenomenal, and we look forward to adding Mike and Mary Kay’s leadership into how we execute that vision and that strategy. The market’s growing. I think we see continue to see proliferation of our payment products be adopted.

While there might be some friction here and there, like we keep adding more payment products, we keep doing more with our customers so they can get more done in in their lives. And I, you know, I just I think our ecosystem strategy of being wherever the SMB is and being in a position to play wherever they are, whether it’s accounts, whether it’s direct, whether it’s through partners, like we’re uniquely positioned. We’ve demonstrated that we can do that and that gets me excited because I see a lot of stuff unfolding. Right? So it’s a great opportunity for the business and a great opportunity obviously for SMBs as we continue to hone all these strategic skills.

Alright. Great.

Tien Tsin Huang, Analyst: Thank you both for the update.

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