Bill Holdings outlines $1.59B–$1.63B 2026 revenue target as AI and embedded solutions drive momentum

Earnings Call Insights: BILL Holdings (BILL) Q4 2025

MANAGEMENT VIEW

* Rene A. Lacerte, CEO, described fiscal 2025 as a “pivotal year” for BILL, highlighting the launch of new software and payment products, strategic investments for future growth, and a significant expansion in profitability. Lacerte stated, “The investments we made in fiscal 2025, along with our durable and diversified business model, set the foundation for us to continue to expand profitability and accelerate revenue growth in the years ahead.”
* The company reported total revenue of $1.5 billion with a core revenue growth of 16% year-over-year and noted that non-GAAP operating income surpassed the high end of initial fiscal 2025 guidance by over 20%.
* Lacerte announced the rollout of the Agentic AI platform, with a suite of financial operations agents launching in Q2 of fiscal 2026. He said, “We built our Agentic AI platform that leverages the capabilities, data and scale acquired over the last 20 years...we can launch intelligent finance agents quickly and safely at scale.”
* BILL’s Supplier Payments Plus, launched in Q4, was spotlighted for its ability to streamline millions of payment transactions, shifting from a flat fee ACH model to an ad valorem fee paid by suppliers.
* John R. Rettig, President and COO, reported local transfer payment expansion to over 30 countries and a nearly 600% increase in BILL Divvy card volume among AP customers compared to fiscal 2024. Rettig highlighted a new strategic Embed partnership with a Fortune 500 software company and clarified, “Mid-market customer growth outpaced our overall BILL AP/AR customer growth by 5 points.”
* New executive appointments included Rohini Jain as CFO and Michael Cherry as EVP and GM of Software Solutions.
* Rohini Jain, CFO, stated, “We generated $240 million in non-GAAP operating income and improved our ex float profitability. Non-GAAP operating margin ex float expanded 345 basis points year-over-year.”

OUTLOOK

* Guidance for fiscal Q1 2026: total revenue expected in the range of $385 million to $395 million; core revenue to be between $348 million and $358 million, reflecting 11% to 14% year-over-year growth; non-GAAP operating income expected between $53.5 million and $58.5 million. Non-GAAP EPS is projected between $0.49 and $0.52.
* Full year fiscal 2026 guidance: total revenue projected at $1.59 billion to $1.63 billion, representing 9% to 11% year-over-year growth. Core revenue range is $1.45 billion to $1.49 billion or 12% to 15%. Non-GAAP operating income is expected to be $240 million to $270 million, with a 15% to 17% operating margin. Non-GAAP EPS is expected to be between $2 and $2.20.
* Jain explained that guidance assumes “flat volume per customer year-over-year across the portfolio.”

FINANCIAL RESULTS

* Core revenue accelerated to 15% year-over-year in Q4, reaching $346 million, with annual BILL AP/AR revenue growth accelerating 3 points sequentially to 13% and AP/AR transaction revenue up 15% year-over-year.
* Total payment volume grew 13% year-over-year in Q4. Net revenue retention rate was 94%, while annual customer retention remained at 86%.
* BILL Spend & Expense revenue was $151 million in Q4, up 19% year-over-year, driven by 22% card payment volume growth.
* Non-GAAP net income and operating income both exceeded the high end of guidance, with $56.4 million in non-GAAP operating income in Q4, 17% more than the top end of guidance from one quarter ago.
* The company repurchased $100 million of its stock in Q4 and early this quarter, with a new $300 million share repurchase plan approved for fiscal 2026.

Q&A

* Tien-Tsin Huang, JPMorgan: Questioned the revenue outlook and what could drive deceleration to the midpoint. Lacerte responded that confidence is rooted in foundational elements and platform opportunities. Jain added, “We had a strong Q4...but as we go into Q1 and the rest of the year, our hypothesis was that Q4 strength...was driven by some of the spend pull in with the SMBs as they were starting to expect some of the tariff headwinds.”
* Trevor Dodds, Bank of America: Asked about the agent opportunity and use cases. Lacerte outlined the evolution from do-it-yourself to do-it-for-you models, stating, “Many of the tasks that are inside of the financial operations category...can be automated with great AI capabilities.”
* Christopher Quintero, Morgan Stanley: Inquired about go-to-market motion for mid-market and partnerships. Lacerte noted ongoing investment in international product capabilities and efficient go-to-market motions.
* Darrin Peller, Wolfe Research: Sought clarity on guidance conservatism and take rate drivers. Jain said, “We expect a similar level of take rate expansion as we did in fiscal '25...We have some definitely macro headwinds that we are trying to contemplate within the guide.” Rettig added confidence in ad valorem payments as a take rate driver.
* Kenneth Suchoski, Autonomous: Asked about same-store sales growth and subscription ARPU. Rettig attributed ARPU trends to a mix of smaller customers and slight scaling back among SMBs.

SENTIMENT ANALYSIS

* Analysts showed a neutral to slightly cautious tone, frequently probing around the sustainability of revenue growth, take rates, and the impact of macroeconomic factors such as tariffs.
* Management remained confident and optimistic about their foundational strengths, growth levers, and innovation agenda. Jain emphasized, “We are super excited about all these things that we can control.”
* Compared to the previous quarter, analyst tone remained focused on macro headwinds and growth drivers, while management continued to project confidence, with more emphasis this quarter on AI and new product launches.

QUARTER-OVER-QUARTER COMPARISON

* Guidance for FY 2026 was more detailed than the previous quarter, including specific revenue and margin targets and a clear assumption of flat spend per customer.
* Management’s confidence in AI and embedded solutions increased, with a broader focus on mid-market expansion and multiproduct adoption compared to Q3.
* Analyst questions in both quarters centered on growth sustainability, take rates, and macro risks, but this quarter included more direct inquiry about AI monetization and the impact of external headwinds.
* The tone of management remained confident, with continued emphasis on execution and innovation, while analysts retained a cautious but engaged approach.

RISKS AND CONCERNS

* Jain cited “external uncertainty” and a prudent assumption of flat volume per customer year-over-year.
* Management highlighted macroeconomic headwinds, particularly the impact of tariffs and spend compression among SMBs, as well as a muted spend environment.
* Analysts raised concerns about take rate sustainability, ARPU trends, and the timeline for adoption and monetization of new AI-driven products.
* Management’s mitigation strategies include continued investment in platform innovation, efficiency, cost optimization, and a disciplined approach to expense management.

FINAL TAKEAWAY

BILL Holdings concluded fiscal 2025 with strong revenue and profitability, highlighting robust adoption of new products, expansion into larger and more complex business segments, and accelerated investments in AI-driven financial operations. Management outlined clear fiscal 2026 targets, including total revenue guidance of $1.59 billion to $1.63 billion and a continued focus on innovation, efficiency, and shareholder value through expanded product offerings and substantial share repurchases. The company’s leadership emphasized their confidence in foundational strengths and growth opportunities despite macroeconomic uncertainties, setting expectations for continued platform innovation and deeper market penetration in the coming year.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/bill/earnings/transcripts]

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