Bill.com Holdings, Inc. (BILL) | Investment Case

1. Company Snapshot

1.a. Company Description

Bill.com Holdings, Inc.provides cloud-based software that simplifies, digitizes, and automates back-office financial operations for small and midsize businesses worldwide.The company provides software-as-a-service, cloud-based payments, and spend management products, which allow users to automate accounts payable and accounts receivable transactions, as well as enable users to connect with their suppliers and/or customers to do business, eliminate expense reports, manage cash flows, and improve office efficiency.

It also offers onboarding implementation support, and ongoing support and training services.The company serves accounting firms, financial institutions, and software companies.Bill.com Holdings, Inc.

was incorporated in 2006 and is headquartered in San Jose, California.

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1.b. Last Insights on BILL

BILL Holdings' recent performance was negatively impacted by slowing fundamentals, inability to deliver operating profitability, and prolonged share price underperformance. Barington Capital Group urged the company to reduce operating costs and explore strategic alternatives, including a potential sale or merger. Despite a Q2 beat, with 17% core revenue growth, and raised guidance for FY26, concerns persist. Insider purchases and institutional investor interest, such as Totem Point Management's $3.77 million stake, contrast with Frontier Capital Management's 42% reduction in holdings.

1.c. Company Highlights

Last Price	39.85
Change Percentage	-2.50%
Open	39.95
Previous Close	40.87
Market Cap ( Millions)	3991
Volume	2328025
Year High	57.21
Year Low	35.46
M A 50	44.9
M A 200	47.6

FCF Yield	8.72%
Dividend Yield	0.00%
ROE	-0.63%
Debt / Equity	50.98%
Net Debt / EBIDTA	685.72%
Price To Book	1.06
Price Earnings Ratio	-166.61
Price To FCF	11.47
Price To sales	2.57
EV / EBITDA	44.88

2. BILL's Strong Q2 Earnings Beat Expectations with 17% Core Revenue Growth

BILL delivered a robust fiscal second quarter 2026, with core revenue reaching $375 million, a 17% year-over-year growth, surpassing the top end of the guidance range. Non-GAAP operating margin expanded to 18%, growing both sequentially and year-over-year. The company's EPS came in at $0.64, beating estimates of $0.56. The strong financial performance was driven by the company's consistent and disciplined execution against its strategic priorities, with AP/AR core revenue growing 11% year-over-year and spending expense revenue totaling $166 million, representing 24% year-over-year growth.

Publication Date: Feb -16

                                    📋 Highlights
                                    Core Revenue Growth::
                                                Achieved $375M core revenue, 17% YoY growth, surpassing guidance top end.
Non-GAAP Margin Expansion::
                                                18% non-GAAP operating margin, up 290 bps YoY and 70 bps sequentially.
Spending Expense Growth::
                                                Generated $166M revenue, 24% YoY increase, driven by SMB resilience.
Capital Returns::
                                                $133M in stock repurchases during Q2, reflecting strong balance sheet capitalization.
B2B Network Scale::
                                                Over 8M businesses on the proprietary B2B payments network, with 9.5K accounting firms using the platform.

                                

Operational Highlights

The company's operational performance was equally impressive, with nearly 500,000 customers trusting BILL's software solutions to manage their financial operations. More than 9,500 accounting firms rely on the platform, and over 8 million businesses are part of the proprietary B2B payment network. The company's innovation and unique assets, expertise, and platform at the intersection of software and payments continue to drive its competitive advantage.

Growth Acceleration and Guidance

Rohini Jain, CFO, attributed the growth acceleration to the durability of building a great business, strong execution, and the resilience of SMBs. The company guided for Q3 '26 total revenue of $397.5 million to $407.5 million and core revenue of $364.5 million to $374.5 million, reflecting 14% to 17% year-over-year growth. For fiscal '26, the company expects core revenue to be in the range of $1.490 billion to $1.510 billion, reflecting 15% to 16% growth year-over-year.

Valuation and Growth Expectations

Analysts estimate next year's revenue growth at 13.2%. With a P/S Ratio of 3.03, the market is pricing in a moderate growth expectation. The company's EV/EBITDA ratio stands at 50.91, indicating a relatively high valuation. However, the Free Cash Flow Yield of 7.39% suggests that the company is generating significant cash from its operations. As the company continues to execute on its strategic priorities, its strong financial performance and growth prospects make it an attractive investment opportunity.

3. NewsRoom

Barington Companies Management LLC Purchases Shares of 65,000 BILL Holdings, Inc. $BILL

Mar -08

Source: defenseworld.net

BILL Holdings, Inc. (BILL) Presents at Morgan Stanley Technology, Media & Telecom Conference 2026 Transcript

Mar -03

Source: seekingalpha.com

BILL and Rillet Partner to Power Real-Time, AI-Native Finance Workflows

Mar -02

Source: businesswire.com

Is This Super Software Stock a Buy After Its Dramatic 86% Decline? Here's What Wall Street Thinks

Feb -25

Source: fool.com

BILL Stock Down 24%, Core Revenue Up 17%: Why a 14% Portfolio Bet Signals Conviction

Feb -16

Source: fool.com

SaaSmageddon Is Here – and Not All Software Stocks Will Survive

Feb -09

Source: investorplace.com

BILL Holdings Q2 Earnings Beat Estimates on Core Strength & Higher TPV

Feb -06

Source: zacks.com

BILL Q2 Earnings Call Highlights

Feb -06

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.43%)

6. Segments

Subscription and Transaction Fees

Expected Growth: 14.0%

Bill.com's 14.0% growth in Subscription and Transaction Fees is driven by increasing adoption of digital payment solutions, expansion of existing customer relationships, and growing demand for accounts payable and receivable automation. Additionally, the company's strategic partnerships, such as the one with American Express, have contributed to the growth.

Interest on Funds Held for Customers

Expected Growth: 18.0%

The 18.0% growth in Interest on Funds Held for Customers from Bill.com Holdings, Inc. is driven by increasing adoption of digital payment solutions, rising transaction volumes, and expansion into new markets. Additionally, the company's focus on providing value-added services, such as cash flow management and financial software integration, contributes to the growth.

7. Detailed Products

Bill Pay

A cloud-based payment platform that enables businesses to pay bills, invoices, and vendors electronically.

Invoicing

A digital invoicing solution that allows businesses to create, send, and track invoices electronically.

Cash Flow Management

A financial management tool that provides real-time visibility into a company's cash flow, enabling informed business decisions.

AP Automation

An automated accounts payable solution that streamlines invoice processing, approval, and payment.

AR Automation

An automated accounts receivable solution that accelerates invoice delivery, tracking, and payment.

8. Bill.com Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bill.com Holdings, Inc. operates in a niche market, providing cloud-based software that integrates with accounting software, making it difficult for substitutes to emerge.

Bargaining Power Of Customers

While customers have some bargaining power due to the availability of alternative solutions, Bill.com's strong brand recognition and customer loyalty mitigate this power.

Bargaining Power Of Suppliers

Bill.com Holdings, Inc. has a diversified supplier base, reducing dependence on individual suppliers and minimizing their bargaining power.

Threat Of New Entrants

While there are barriers to entry, such as the need for significant investment in technology and marketing, new entrants can still emerge, especially from adjacent industries.

Intensity Of Rivalry

The accounting software market is highly competitive, with established players like QuickBooks and Xero, as well as emerging players, leading to intense rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	31.88%
Debt Cost	3.95%
Equity Weight	68.12%
Equity Cost	12.35%
WACC	9.67%
Leverage	46.80%

11. Quality Control: Bill.com Holdings, Inc. passed 6 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

CleanSpark

A-Score: 4.1/10

Value: 7.0

Growth: 5.1

Quality: 8.2

Yield: 0.0

Momentum: 3.5

Volatility: 0.7

1-Year Total Return ->

Dayforce

A-Score: 4.1/10

Value: 2.8

Growth: 7.3

Quality: 5.0

Yield: 0.0

Momentum: 4.0

Volatility: 5.3

1-Year Total Return ->

Instructure Holdings

A-Score: 4.1/10

Value: 3.7

Growth: 7.8

Quality: 3.5

Yield: 0.0

Momentum: 6.0

Volatility: 3.3

1-Year Total Return ->

Blackbaud

A-Score: 3.6/10

Value: 6.2

Growth: 3.3

Quality: 3.2

Yield: 0.0

Momentum: 2.0

Volatility: 7.0

1-Year Total Return ->

Bill.com

A-Score: 3.6/10

Value: 2.8

Growth: 9.4

Quality: 5.1

Yield: 0.0

Momentum: 1.5

Volatility: 3.0

1-Year Total Return ->

Asana

A-Score: 3.4/10

Value: 4.4

Growth: 6.3

Quality: 3.8

Yield: 0.0

Momentum: 3.0

Volatility: 3.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

1.69%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.67%

Bill.com Holdings, Inc. - US0900431000

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on BILL

1.c. Company Highlights

Weak Momentum

Average Growth

Fairly Valued

Earnings Beats

Revenues Beats

Average Quality

Earnings Miss

Expensive

Medium Volatility

Stable Momentum

Revenues Miss

Higher Growth

2. BILL's Strong Q2 Earnings Beat Expectations with 17% Core Revenue Growth

Operational Highlights

Growth Acceleration and Guidance

Valuation and Growth Expectations

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.43%)

6. Segments

Subscription and Transaction Fees

Expected Growth: 14.0%

Interest on Funds Held for Customers

Expected Growth: 18.0%

7. Detailed Products

Bill Pay

Invoicing

Cash Flow Management

AP Automation

AR Automation

8. Bill.com Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Bill.com Holdings, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

39.85$

Current Price

39.85$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA