0001628280-26-005879
SEC filingBill.com grew revenue 14% in Q2 FY26 but swung to a net loss due to lower other income and higher costs.
Bill.com reported total revenue of $414.7 million for the three months ended December 31, 2025, a 14% increase from $362.6 million in the prior year period. The growth was driven by a 20% rise in transaction fees to $303.1 million, reflecting higher total payment volume (TPV) of $95.1 billion (up 13%). Subscription fees grew 6% to $72.1 million due to customer additions. Interest on funds held for customers declined 8% to $39.5 million, primarily due to lower interest rates.
Gross profit increased 12% to $331.1 million, but gross margin contracted from 81.6% to 79.8%, mainly because of higher amortization of capitalized internal-use software costs. Operating expenses rose 10% to $349.2 million, with sales and marketing (+17%) and general and administrative (+12%) leading the increase. Research and development decreased 2% due to higher capitalization of software costs. Restructuring charges of $0.4 million were incurred in the quarter, part of a cumulative $9.3 million for the first half related to a 6% workforce reduction announced in October 2025.
Operating loss improved to $18.1 million from $21.7 million. However, other income, net plummeted 71% to $16.0 million, largely because the prior year included a $40.5 million gain on debt extinguishment. Consequently, the company reported a net loss of $2.6 million, compared to net income of $33.5 million in the prior year. For the six months ended December 31, 2025, revenue grew 12% to $810.4 million, with a net loss of $5.6 million versus net income of $42.5 million.
Segment-level financials are not explicitly disclosed in the MD&A; however, key business metrics illuminate underlying trends. BILL AP/AR customers processed $79.9 billion in TPV during the quarter, representing the bulk of volume. BILL Spend and Expense saw $6.5 billion in card payment volume, while Embedded Solutions and Other contributed $8.7 billion. Transaction growth was robust across segments, with total transactions up 16% to 34.7 million. The card rewards expense increased to 52% of spend and expense interchange revenue, up from 48%, reflecting higher reward rates and driving a 17% rise in sales and marketing costs.
Management highlighted ongoing macroeconomic uncertainties, including interest rate volatility and tariff impacts, which could affect SMB customers. The company is focusing on operational efficiencies, as evidenced by the restructuring and continued investments in AI capabilities. The launch of BILL AI in October 2025 and upcoming agents are expected to enhance the platform. No specific numerical guidance was provided, but the company emphasized monitoring conditions and taking appropriate actions. Free cash flow generation remains strong at $173.4 million for the first half, underpinned by revenue growth and disciplined spending.