Bill.com (NYSE:BILL) Surprises With Strong Q3, Stock Jumps 15.4%

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Bill.com (NYSE:BILL) Surprises With Strong Q3, Stock Jumps 15.4%

Payments and billing software maker Bill.com (NYSE:BILL) reported Q3 CY2024 results beating Wall Street’s revenue expectations , with sales up 17.5% year on year to $358.5 million. The company expects next quarter’s revenue to be around $358 million, slightly above analysts’ estimates. Its non-GAAP profit of $0.78 per share was also 55.4% above analysts’ consensus estimates.

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Bill.com (BILL) Q3 CY2024 Highlights:

  • Revenue: $358.5 million vs analyst estimates of $347 million (3.3% beat)

  • Adjusted EPS: $0.78 vs analyst estimates of $0.50 (55.4% beat)

  • Adjusted Operating Income: $67.09 million vs analyst estimates of $54.39 million (23.3% beat)

  • The company lifted its revenue guidance for the full year to $1.45 billion at the midpoint from $1.43 billion, a 1.3% increase

  • Management raised its full-year Adjusted EPS guidance to $1.74 at the midpoint, a 17.2% increase

  • Gross Margin (GAAP): 82%, down from 85.3% in the same quarter last year

  • Operating Margin: -2.1%, up from -18.6% in the same quarter last year

  • Free Cash Flow Margin: 22.7%, up from 21.3% in the previous quarter

  • Market Capitalization: $6.70 billion

Company Overview

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

A company’s long-term performance is an indicator of its overall business quality. While any business can experience short-term success, top-performing ones enjoy sustained growth for multiple years. Over the last three years, Bill.com grew its sales at an incredible 63% compounded annual growth rate (partly thanks to some acquisitions along the way). This is encouraging because it shows Bill.com’s offerings resonate with customers, a helpful starting point.

Bill.com Total Revenue
Bill.com Total Revenue

This quarter, Bill.com reported year-on-year revenue growth of 17.5%, and its $358.5 million of revenue exceeded Wall Street’s estimates by 3.3%. Management is currently guiding for a 12.4% year-on-year increase next quarter.

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