Bill.com Earnings Call Highlights Growth, Margins and AI

Bill.Com Holdings, Inc. ((BILL)) has held its Q2 earnings call. Read on for the main highlights of the call.

Bill.com Delivers Revenue Beat, Margin Gains and AI Momentum Despite Near-Term Trade-Offs

Bill.Com Holdings, Inc. delivered a notably upbeat earnings call, underscoring a quarter that beat revenue expectations, expanded margins, and showcased tangible progress in product innovation—especially in AI and newer financial services. Management leaned into the company’s growing scale, rising multi-product adoption, and emerging card and invoice financing businesses, while acknowledging trade-offs from moving upmarket, modest payment volume growth per customer, and a multi-year horizon for some cost and enterprise initiatives. Overall, upgraded fiscal 2026 guidance, disciplined capital return, and strong product execution painted a constructive picture that appeared to outweigh the near-term execution risks.

Core Revenue Beat and Growth Acceleration

Bill.com’s core revenue reached $375 million in the quarter, up 17% year-over-year and above the high end of guidance, signaling both solid demand and improving execution. Management highlighted that growth also accelerated sequentially by 370 basis points, suggesting the business is regaining momentum after a more cautious macro environment in prior periods. This core beat is particularly important for investors because it reflects the health of the underlying payments and software engine, not just the benefit of interest income on customer funds.

Margin Expansion and Profitability Trajectory

Profitability was another bright spot, with Bill.com posting a non-GAAP operating margin of 18% in the quarter, even before factoring in the boost from float. Year-over-year, operating margins expanded significantly, and the company’s upgraded fiscal 2026 outlook now implies roughly a 17% non-GAAP operating margin and more than 320 basis points of annual improvement excluding float. Management framed this as evidence that the model is scaling efficiently, with the ability to invest in growth and AI while still driving higher earnings power.

Platform Scale and Network Effects

Bill.com emphasized its growing platform scale and the strength of its proprietary B2B payments network as key competitive moats. The company now serves nearly 500,000 customers and works with more than 9,500 accounting firms, while its network connects over 8 million businesses. Cumulatively, Bill.com has processed about $1 trillion in payments, which management translated as moving more than 1% of U.S. GDP through its rails. This scale not only supports durable transaction flows but also underpins cross-sell opportunities and data advantages that can be leveraged for AI and risk management.

Multi-Product Adoption Lifts Revenue Per Customer

A central theme of the call was the push toward deeper customer relationships, with more businesses using multiple Bill.com solutions. The number of customers using both Accounts Payable/Accounts Receivable and Spend & Expense products grew 28% year-over-year. These multi-product users generate higher revenue per customer and are generally more entrenched in the platform, improving stickiness and lowering churn risk. Management signaled that this multi-product approach is a cornerstone of the company’s long-term growth strategy.

Spend & Expense and Card Volumes Show Strong Growth

Spend & Expense continued to stand out as a growth engine. Revenue from this segment reached $166 million, up 24% year-over-year, powered by rising card payment activity. Overall card payment volume climbed 25% year-over-year, while AP card payment volume—cards used specifically for payables use cases—surged more than 160%. The card take rate held at a robust ~255 basis points in the quarter, indicating the business is monetizing card volumes effectively. This combination of volume growth and attractive take rates is becoming an increasingly important contributor to the company’s growth and margin profile.

Invoice Financing Gains Adoption and Economics Improve

Bill.com’s invoice financing business showed notable traction, reinforcing the company’s ambition to become a broader financial services platform for SMBs. Customers using invoice financing grew nearly 50% year-over-year, and origination volume expanded by more than 30%. As adoption has scaled, unit economics have improved, suggesting the company is learning quickly and pricing risk more efficiently. Investors may view this as an early but promising avenue for incremental revenue streams and deeper customer engagement.

AI and Agentic Automation Driving Real Operational Leverage

Artificial intelligence and agent-based automation featured prominently, with management detailing how these tools are already reshaping operations. A W-9 agent deployed across the platform has been enabled by about 10,000 customers and has collected around 40,000 W-9s so far, with a target of reaching several million by year-end. An invoice-coding agent has cut the number of steps required for invoice processing by roughly 90%, while the Bill Assistant product has boosted self-serve rates from 13% to 40%. On the risk side, AI-driven fraud systems blocked 5.3 million fraudulent attempts and reduced manual fraud reviews by 40% in the first half of the fiscal year. Collectively, these AI deployments are not just buzzwords—they are reducing friction, lowering costs, and strengthening risk controls.

Embed 2.0 Partnerships Extend Market Reach

The company is also leaning on partnerships to expand distribution through its Embed 2.0 strategy. Recently announced integrations with NetSuite, Acumatica, and Paychex moved from announcement to live market presence in roughly three months, underscoring an accelerated go-to-market cadence. Management believes these relationships could collectively open doors to nearly 1 million additional businesses, significantly broadening Bill.com’s addressable reach. For investors, these embedded partnerships are strategic because they position Bill.com’s services inside software platforms customers already use daily.

Capital Allocation and Balance Sheet Flexibility

Bill.com showed a more shareholder-friendly stance on capital allocation, repurchasing $133 million of its own stock during the quarter. Alongside this buyback, the company reiterated and raised elements of its full-year financial guidance, with core revenue expected to land between $1.49 billion and $1.51 billion and total revenue between $1.631 billion and $1.651 billion. The firm also guided float revenue to $141.5 million, reflecting the ongoing benefit from interest earned on customer balances. This combination of balance sheet strength, buybacks, and improved guidance suggests management sees the current valuation as attractive and has confidence in the long-term earnings trajectory.

Slower Net Customer Adds as Bill.com Moves Upmarket

A more nuanced part of the story is the company’s decision to prioritize larger customers over headline customer growth. In the quarter, Bill.com added about 4,000 net new AP/AR customers, but management warned that net adds are likely to trend slightly lower as it shifts focus upmarket and introduces targeted price increases. While this may cap short-term customer count growth, the strategy aims to favor higher-value segments with better monetization and stickier relationships. Investors will need to watch whether this mix shift effectively offsets the slower pace of new logo additions.

Moderate TPV Growth Per Customer

Despite strong platform improvements, transaction volume growth per customer remained modest. Same-store total payment volume (TPV) per customer grew just 4% year-over-year. This signals that, while the base is healthy, existing customers are not dramatically increasing their payment flows yet, likely reflecting both macro caution and the natural maturity of some cohorts. For a payments-driven model, stronger TPV per customer would be a powerful lever for revenue, so this remains a key metric to monitor.

Rewards and Take-Rate Optimization Pressures

The Spend & Expense business also faces a balancing act between growth incentives and unit economics. Bill.com’s rewards rate rose to 133 basis points, up 9 bps from a year ago, pushing up the cost of driving card volume. Management said it is revisiting go-to-market incentive plans and evaluating contribution margin across the Spend & Expense portfolio, highlighting that trade-offs between customer rewards and company take rate remain active. Protecting long-term profitability in this high-growth segment will likely involve fine-tuning rewards, pricing, and promotional strategies.

Enterprise Products Like SPP Will Take Time to Scale

On the enterprise side, Supplier Payments Plus (SPP) is still in early innings. Early adopters of SPP have committed roughly $400 million in annual TPV, showing interest in the product’s value proposition. However, SPP follows an enterprise sales motion with inherently longer deal cycles and implementation times, and management cautioned that it will take time before SPP meaningfully impacts overall company metrics. Investors hoping for a near-term step-change from enterprise initiatives may need to be patient as these products build pipelines and ramp adoption.

Cost Optimization Benefits Pushed Out

Bill.com has identified several structural efficiency initiatives—including geographic diversification of operations, AI-driven productivity improvements, and go-to-market optimization—but it framed these as multi-year programs. Initial meaningful benefits are expected to show up around fiscal 2027, with limited incremental cost savings beyond current improvements during fiscal 2026. While this underscores a long runway for future margin expansion, it also means the near-term margin story is driven more by revenue growth and existing efficiency gains than by any large new cost-cut measures.

Macro Environment and Sustainability of Spend

Management remained measured about the macroeconomic backdrop, even as it acknowledged stronger activity in verticals like advertising, retail, and construction during the quarter. The company expressed caution about how sustainable this rebound in customer spending will be and built a range of outcomes into its guidance to reflect sector and macro uncertainty. Investors should note that while Bill.com’s diversified base helps cushion shocks, broader economic trends still influence payment volumes and customer behavior.

Guidance: Steady Growth, Margin Expansion and Disciplined Assumptions

For the third quarter of fiscal 2026, Bill.com guided total revenue to $397.5 million–$407.5 million and core revenue to $364.5 million–$374.5 million, implying 14%–17% year-over-year core growth. Non-GAAP operating income is projected between $62.5 million and $67.5 million, with non-GAAP EPS of $0.53–$0.57. For the full fiscal year 2026, the company now expects core revenue of $1.49 billion–$1.51 billion, float revenue of $141.5 million, and total revenue of $1.631 billion–$1.651 billion. Non-GAAP operating income is forecast at $274.0 million–$286.5 million, translating to about a 17% operating margin and more than 320 basis points of year-over-year improvement excluding float, and roughly 130 basis points of margin upside versus the prior outlook. Underlying these targets are conservative assumptions: only modest AP/AR payment-volume-per-customer growth, a 0.4 basis point annual take-rate expansion, Spend & Expense card volume growth in the low-20% range, and card take rates slightly above 250 basis points. The guidance suggests management is confident but not overreaching on macro or volume expectations.

In closing, Bill.com’s earnings call painted the picture of a company executing well on its core payments and software franchise while aggressively investing in AI, cards, and financing products that can expand its opportunity over time. The beat on core revenue, clear margin progress, and higher full-year guidance were balanced by realism around slower customer adds, modest TPV-per-customer growth, and the long time frame for some enterprise and cost initiatives to scale. For investors, the story emerging from this quarter is one of steady, profitable growth with meaningful upside if AI, embedded partnerships, and newer financial products continue to gain traction as planned.