Core Revenue Growth
Core revenue of $371 million in Q3, up 16% year-over-year, demonstrating continued top-line growth.
Bill.com Holdings
· BILL
May 7th, 2026
Summary
- Earnings Call Date:
- 2026-05-07
- Change Since:
- -11.15%
- Next Earnings Date:
- 2026-08-20
Earnings Call Sentiment
PositiveThe call emphasizes durable revenue growth, meaningful margin expansion and a strategic pivot to an AI-native operating model with measurable early AI adoption metrics. Management achieved GAAP profitability, raised full-year guidance, authorized a $1B buyback and outlined significant cost-savings initiatives. However, the company is executing a sizable workforce reduction (up to 30%), expects net new customer adds to moderate as it moves upmarket, and faces uneven demand across some verticals plus longer sales cycles in enterprise supplier offerings. On balance, the positives around strong financial results, margin improvement, AI-driven productivity gains and capital returns outweigh the execution and transition risks disclosed.
Company Guidance
BILL guided Q4 FY‑26 total revenue of $425–$435 million and core revenue of $392–$402 million (13%–16% YoY), assuming AP/AR TPV in line with Q3, Spend & Expense volume ~20% YoY, AP/AR take rates steady with Q3 and Spend & Expense take rate slightly above 250 bps; they expect Q4 non‑GAAP operating income of $81.5–$86.5 million, non‑GAAP net income of $78–$82 million and non‑GAAP EPS of $0.69–$0.72. For fiscal 2026 they raised the midpoint and now expect core revenue of $1.496–$1.506 billion (15%–16% YoY), float revenue of $145.7 million (up $4.2 million vs prior guidance), total revenue of $1.642–$1.652 billion, non‑GAAP operating income of $303.6–$308.6 million (≈19% margin; >460 bps YoY expansion excluding float and ~270 bps of upside vs initial guidance), non‑GAAP net income of $298.7–$302.7 million and non‑GAAP EPS of $2.61–$2.64, with stock‑based compensation expected below $250 million; management also said the workforce optimization will generate ~$110 million of gross annualized savings with $20–$30 million to be reinvested in FY‑27 and the Board authorized up to $1 billion for share repurchases.
Profitability and Margin Expansion
Achieved GAAP profitability in the quarter; non-GAAP operating margin of ~20%, expanding 176 basis points sequentially and 475 basis points year-over-year; non-GAAP net income of $77 million (+5% sequentially, +32% year-over-year).
Updated FY'26 Guidance and Upgrades
Raised full-year midpoint: core revenue now $1.496B–$1.506B (15%–16% YoY); total revenue $1.642B–$1.652B; non-GAAP operating income $303.6M–$308.6M (~19% margin), implying >460 bps YoY margin expansion (ex-float) and ~270 bps additional improvement vs prior guidance.
Spend & Expense Momentum
Spend & Expense revenue of $167 million, up 21% year-over-year; card payment volume grew 23% YoY; quarter take rate ~254 basis points; transaction monetization improving with favorable mix (high-interchange verticals).
AP/AR Performance and Monetization
AP/AR core revenue grew 12% YoY; AP/AR transaction revenue $122 million (+13% YoY); AP/AR take rate 16.5% (modest expansion); transaction revenue per transaction $10.14 (+8% YoY).
Customer & Platform Adoption
Added ~4,100 net new customers in Q3; over 20,000 businesses now use both AP and Spend & Expand products with joint-customer count accelerating 39% YoY; TPV (same-store) grew 4% YoY.
AI Adoption and Operational Impact
Over 100,000 customers using AI agents; agents automated ~1.2 million invoices across ~9 million data fields; tens of thousands of autonomous card transactions executed by 'pay-for-you' agent; launched QA agent scoring 100% of customer interactions (vs prior 1–2% sampling) to drive efficiency and retention.
Scale and Network Strength
Platform has moved over $1 trillion in payments and processed over 1 billion financial documents; partner ecosystem of nearly 10,000 accountants/banks/software partners and a B2B payment network of over 8 million members.
Capital Allocation - Share Repurchase
Board authorized up to $1 billion aggregate share repurchase program to return capital and retire shares.
Operational Cost Savings Roadmap
Workforce optimization expected to generate approximately $110 million in gross annualized savings with $20M–$30M to be reinvested into critical growth areas in FY'27, supporting further margin expansion.
Operator
Hello, everyone. Thank you for joining us and welcome to BILL's Fiscal Third Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Jack Andrews, Vice President, Investor Relations. Jack, please go ahead.
Jon Andrews
Good afternoon, everyone. Welcome to BILL'S Fiscal Third Quarter 2026 Earnings Conference Call. We issued our earnings press release a short time ago and filed the related Form 8-K with the SEC. The press release can be found on our Investor Relations website at investor.bill.com. Joining me on the call today are Rene Lacerte, Chairman, CEO and Founder; and Rohini Jain, CFO. We also have John Rettig, President and COO, joining us for the Q&A portion of the call. Before we begin, please remember that during the course of this call, we may make forward-looking statements about the future business, operations, targets, products and expectations of BILL that involve many assumptions, risks and uncertainties. Actual results could differ materially from those expressed or implied by our forward-looking statements.
In addition to our prepared remarks, please refer to the information in the company's press release issued today, our Q3 '26 Investor Deck and our periodic reports filed with the SEC, including our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. We disclaim any obligation to update any forward-looking statements. On today's call, we will refer to both GAAP and non-GAAP financial measures. Please refer to today's press release for a reconciliation of GAAP to non-GAAP and additional information regarding thes...
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