0001628280-25-050328
SEC filingRevenue grew 10% to $396M, but operating loss widened on restructuring costs and margin compression from payment mix.
Total revenue for the three months ended September 30, 2025 was $395.7 million, up 10% from $358.5 million in the prior year period. Growth was driven by transaction fees, which increased 16% to $287.2 million, reflecting higher total payment volume (TPV) of $89.3 billion (up 12%) and customer adoption. Subscription fees grew a modest 5% to $70.8 million. Interest on funds held for customers declined 13% to $37.7 million due to lower yields from interest rate cuts.
Gross profit increased 9% to $318.7 million, but gross margin compressed to 80.5% from 82.0% a year ago, as service costs grew faster than revenue (23% vs 10%) due to higher direct costs from payment processing and data hosting. Operating loss widened to $20.7 million (5.2% of revenue) from $7.7 million (2.1%), pressured by an 18% rise in sales and marketing expenses (driven by higher card rewards) and a $8.9 million restructuring charge. Net income swung to a loss of $3.0 million from income of $8.9 million in the prior year.
While MD&A does not provide segment-level financials, key business metrics reveal underlying momentum. BILL AP/AR customers reached 173,500, contributing $74.7 billion in TPV. BILL Spend and Expense (Divvy) had 42,500 spending businesses and $6.2 billion in card volume, but card rewards expense increased to 52% of interchange revenue from 47%, reflecting higher reward rates. Embedded Solutions and Other grew to 282,500 customers with $8.4 billion in TPV. Overall, businesses using solutions grew 5% year-over-year to 498,500, and transactions processed rose 16% to 33.3 million.
Management highlighted the launch of BILL AI in October 2025, including AI agents for W-9 collection and receipt reconciliation, with more features expected. New embed partnerships with Paychex, Oracle NetSuite, and Acumatica are anticipated to extend platform reach. The company aims to improve organizational efficiency, as evidenced by the October 2025 RIF impacting 6% of employees. No specific numeric guidance was provided, but the company expects continued investment in R&D (21% of revenue) and managing sales and marketing spend in response to macroeconomic conditions. The macro environment, including interest rate volatility and tariff changes, remains a key uncertainty, particularly for SMB customers.
Cash and cash equivalents stood at $1.10B, with additional short-term investments of $1.22B, providing strong liquidity. Total debt increased to $1.87B from $1.71B, primarily due to a new $150M credit facility (2025 Credit Facility) drawn in May 2025. Shareholders' equity was $3.88B.
Multi-year agreements with third parties and financial institution partners total $140.4M, with $36.3M due within the next year, $88.2M in 1-3 years, and $15.8M thereafter. Additionally, the company has $3.6B in unused credit arrangements available to customers, but these are unconditionally cancellable and not recorded as liabilities.
During the quarter, the company repurchased 1.7M shares for $81.7M under two programs. A new $300M share repurchase program was authorized in August 2025, with $283.7M remaining. Debt issuance included $150M from the 2025 Credit Facility. Capital expenditures totaled $14.6M (3.7% of sales), primarily for internal-use software capitalization.
The company operates as a single operating segment. The CODM reviews financials on a consolidated basis using net income (loss) as the primary profit measure. Revenue from outside the US is less than 2% of total revenue. No separate segment asset information is provided.