BILL Q3 Earnings Call Highlights

Key Points

• BILL posted solid Q3 results with core revenue up 16% year over year, non-GAAP operating margin near 20%, and its first quarter of GAAP profitability.
• The company is making AI its top strategic priority, saying its agents have automated about 1.2 million invoices and that AI will reshape onboarding, payments, and workflow automation across the platform.
• BILL announced a workforce reduction of up to 30%, expected to generate about $110 million in annualized savings, while also raising its FY2026 outlook and authorizing up to $1 billion in share repurchases.

BILL NYSE: BILL reported fiscal third-quarter 2026 results that executives said showed continued revenue growth, expanding margins and the company’s first quarter of GAAP profitability, while also announcing a major workforce reduction and a larger share repurchase authorization.

Chairman, CEO and Founder René Lacerte said core revenue grew 16% year over year and non-GAAP operating margin approached 20%. CFO Rohini Jain later said core revenue totaled $371 million in the quarter, while non-GAAP operating margin was 20%, up 176 basis points sequentially and 475 basis points from a year earlier. Non-GAAP net income was $77 million, up 5% sequentially and 32% year over year.

“Our strong Q3 results extend the durable trajectory we’ve been building all year,” Jain said. She said the quarter reflected “operating discipline and rigorous execution” and noted that the company also achieved GAAP profitability.

AI Becomes BILL’s Top Strategic Priority

Lacerte said the company is accelerating what he described as an AI transformation across its business, calling AI no longer “one priority among three” but BILL’s “number one priority.” He said the company has built AI infrastructure using its data assets and has launched a suite of agents used by “well over 100,000 customers.”

According to Lacerte, BILL’s AI agents have automated approximately 1.2 million invoices across more than 9 million data fields. He also said the company’s Pay For You agent, launched in beta early in the third quarter, has completed tens of thousands of card transactions without human interaction. Internally, he said BILL launched a quality assurance agent that scores 100% of customer interactions, compared with a prior manual review process covering a 1% to 2% sample.

Lacerte said BILL’s goal is to become “AI native end-to-end,” with AI agents eventually helping customers onboard, connect with business partners, transact and optimize cash flow while keeping humans involved for decisions that require review.

He argued that BILL’s existing platform, network and data position the company to benefit from AI adoption. Lacerte said the platform has moved more than $1 trillion in payments and processed more than 1 billion financial documents. He also cited BILL’s partnerships with nearly 10,000 accountants, banks and software companies, as well as a B2B payment network with more than 8 million members.

Company Plans Workforce Reduction of Up to 30%

BILL said it will reduce its workforce by up to 30% by the end of the fiscal fourth quarter as it restructures around AI and a leaner operating model.

“This is a hard decision,” Lacerte said, adding that the reduction will affect employees who helped build the company. He said BILL is making the move “from a position of strength” and that a smaller, more focused organization with AI embedded into operations will help the company move faster.

During the question-and-answer session, JPMorgan analyst Tien-tsin Huang asked why 30% was the right magnitude and what investors should track beyond cost savings. Lacerte said building in an AI environment requires a different structure because “the distance and time between ideation and execution is shrinking rapidly.” He said the company’s AI efforts have already shown customer adoption and internal efficiency gains.

Jain said the initiative is expected to generate about $110 million in gross annualized savings, with approximately $20 million to $30 million reinvested in critical growth areas in fiscal 2027. In response to a question from Morgan Stanley analyst Chris Quintero, she said the company’s primary investment area will be building an AI-native experience, including talent, tools and infrastructure.

Integrated Platform and Product Updates

Jain said BILL is seeing progress in multi-product adoption, with more than 20,000 businesses now using both its AP and Spend & Expense solutions. She said the number of joint customers grew 39% year over year and that these customers show higher retention rates and faster revenue growth on the platform.

Jain also discussed the company’s BILL Supplier Payments Plus portfolio, saying BILL has streamlined B2B payment processing for suppliers and extended digital payment capabilities for enterprise suppliers receiving payments from small and midsize business customers both inside and outside the BILL network. She noted that Supplier Payments Plus has a longer enterprise sales cycle, but said early indicators remain positive, with the number of suppliers under contract in the third quarter doubling from the second quarter.

On the Spend & Expense side, Jain said BILL launched new international capabilities, allowing BILL Divvy Cards to be used globally wherever cards are accepted. She also highlighted BILL Travel, a new product intended to manage travel and spend in a connected workflow. Jain said BILL estimates the product can reduce customers’ time spent on travel workflows by more than 85%, saving more than 100,000 hours each month in aggregate.

Segment Performance and Customer Trends

AP/AR core revenue grew 12% year over year, and BILL added approximately 4,100 net new AP/AR customers in the quarter, above the company’s expectations. Jain said the outperformance was driven by strength in the wealth management category, but reiterated that net new customer additions are expected to trend below 4,000 in the near term as BILL focuses on larger customers.

AP/AR transaction revenue was $122 million, up 13% year over year. Jain said AP/AR take rate was 16.5 basis points, expanding slightly both sequentially and year over year. Transaction revenue per transaction was $10.14, up 8% year over year.

Spend & Expense revenue totaled $167 million, up 21% year over year. Jain said card payment volume grew 23%, supported by strength in shipping, advertising and travel, offsetting slower healthcare and retail spend. Spend & Expense take rate was 254 basis points, helped by a favorable mix of higher-interchange verticals.

Guidance Raised, Buyback Expanded

For the fiscal fourth quarter, BILL expects total revenue of $425 million to $435 million and core revenue of $392 million to $402 million, representing 13% to 16% year-over-year growth. The company expects non-GAAP operating income of $81.5 million to $86.5 million and non-GAAP earnings per share of $0.69 to $0.72.

For fiscal 2026, BILL raised its outlook and now expects core revenue of $1.496 billion to $1.506 billion, total revenue of $1.642 billion to $1.652 billion, non-GAAP operating income of $303.6 million to $308.6 million and non-GAAP EPS of $2.61 to $2.64. Jain said the updated operating income guidance implies a non-GAAP operating margin of about 19% and year-over-year margin expansion of more than 460 basis points excluding float benefits.

BILL’s board also authorized the repurchase of up to $1 billion of common stock. Lacerte said management and the board view the current share price as an opportunity to return value to shareholders. Jain said the company considered its cash position, balance sheet strength and free cash flow generation before approving the authorization.

The company also said it is delaying its Investor Day because of changes to strategic priorities and organizational structure. Jain said BILL expects to provide more detail on its Rule of 40 framework and GAAP margin expansion opportunity during its August earnings call.

About BILL NYSE: BILL

BILL Holdings, Inc provides financial automation software 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.

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