Q4 2024 BILL Holdings Inc Earnings Call

August 22, 2024

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Speaker Change: Good afternoon, and welcome to Bill fourth quarter fiscal 'twenty to 'twenty four earnings conference call.

Speaker Change: Joining us for today's call are Bill C O when they lose their president and CFO, John Rettig N V P of Investor Relations Karen Samsung.

With that I would like to turn the call over to Karen Samsung for introductory remarks Karen.

Karen Samsung: Thank you operator, welcome to Bill fiscal fourth quarter and full fiscal year 2024 earnings Conference call. We issued our earnings press release, a short time ago and furnished the related form 8-K to the SEC.

Speaker Change: Press release can be found on the Investor Relations section of our website at Investor <unk> Dot Com with me on the call today are renewable certain chairman CEO and founder of Bill and John Rettig, President and CFO before we begin please remember that during the course of this call we may make forward looking.

Speaker Change: <unk> about the future operations targets and results of Bill that involve many assumptions risks and uncertainties.

Speaker Change: If any of these risks or uncertainties develop or if any of the assumptions prove incorrect actual results could differ materially from those expressed or implied by our forward looking statements for additional discussion. Please refer to the text in the Companys press release issued today and to our periodic reports filed with the SEC, including our most.

Speaker Change: Recent annual report on Form 10-K, and quarterly reports on Form 10-Q, we disclaim any obligation to update any forward looking statements.

Speaker Change: On today's call, we will refer to both GAAP and non-GAAP financial measures. Please refer to today's press release for the reconciliation of GAAP to non-GAAP financial performance and additional disclosures regarding these measures.

Speaker Change: Note that at times during this call, we will discuss <unk> standalone results, which exclude our bill spend and expense management, which was formerly called <unk>.

Speaker Change: Invoice to grow accounts receivable and its been Mark financial planning solutions.

Speaker Change: Not that we will be revising our key metrics presentation, beginning in the first quarter of fiscal 2025 to reflect our evolving product solution set this new presentation will provide investors with an enhanced view of our integrated platform, which includes bill a P. A R and spend and expense excluding the financial institution channel.

Oh yeah.

Speaker Change: It will also provide an enhanced view of our embedded and other solutions, which includes the financial institution channel invoice to go and other solutions. The appendix of our fiscal Q4 2024 investor deck previews. This presentation and provides a nine quarter look back for reference now I'll turn the call over to Rene.

Good afternoon.

Operator: Good afternoon. I welcome to build fourth quarter fiscal 2024 earnings conference call.

I welcome to build fourth quarter fiscal 2024 earnings conference call.

Speaker Change: Joining us for today's call are Bill C.O.

Operator: Joining us for today's call are Bill C.O. Renee Lizert, President and CFO, John Rettig, and VP of Investor Relations, Karen Sansot.

Speaker Change: Renee Lizert, President and CFO, John Rettig, and VP of Investor Relations, Karen Sansot.

Speaker Change: With that, I would like to turn the call over to Karen Sansot for introductory remarks.

Karen Sansot: With that, I would like to turn the call over to Karen Sansot for introductory remarks.

Speaker Change: Karen?

Karen Sansot: Karen? Thank you operator.

Darren: Darren good afternoon, everyone.

Karen Sansot: Thank you operator.

Rene: Fiscal 2024 was an important year for Bill we delivered more innovations to Smbs, we launched our integrated platform made capital more accessible and empowered small and mid sized businesses with insights to control with their cash flow.

Karen Sansot: Welcome to build fiscal fourth quarter and full fiscal year 2024 earnings conference call.

Karen Sansot: Welcome to build fiscal fourth quarter and full fiscal year 2024 earnings conference call. We issued our earnings press release a short time ago and furnished the related form 8K to the SEC. The press release can be found on the Investor Relations section of our website and investor.bill.com.

Karen Sansot: We issued our earnings press release a short time ago and furnished the related form 8K to the SEC.

Karen Sansot: The press release can be found on the Investor Relations section of our website and investor.bill.com.

Rene: In addition, we built tight organizational alignment laying the foundation for future growth.

Karen Sansot: With me on the call today are Renee Lizert, Chairman C.E.O, and founder of Bill, and John Rettig, President and CFO.

Karen Sansot: With me on the call today are Renee Lizert, Chairman C.E.O, and founder of Bill, and John Rettig, President and CFO. Before we begin, please remember that during the course of this call, we may make forward-looking statements about the future operations, targets, and results. [inaudible] We disclaim any obligation to update any forward-looking statements.

Rene: These and future innovations are especially valuable for smbs as they face an uncertain economic environment.

Rene: In a world of change Bill is the concept that they can rely on.

Speaker Change: Before we begin, please remember that during the course of this call, we may make forward-looking statements about the future operations, targets, and results.

Rene: The steadfast commitment to raising the bar to serve Smbs led to strong financial results.

Rene: During the year, we delivered strong growth and enhanced profitability as we executed on our objective to be the essential financial operations platform for Smbs.

Speaker Change: [inaudible] We disclaim any obligation to update any forward-looking statements.

Rene: Total revenue for fiscal 2024 was $1 3 billion up 22% year over year in core revenue exceeded $1 billion for the first time.

Importantly, we delivered substantial profitability expansion as non-GAAP operating income totaled nearly $200 million.

Rene: Growing 68% year over year, and we were profitable excluding the benefit of float revenue.

Speaker Change: On today's call, we will refer to both GAAP and non-GAP financial measures. Please refer to today's press release for the reconciliation of GAAP to non-GAP financial performance and additional disclosures regarding these measures.

Karen Sansot: On today's call, we will refer to both GAAP and non-GAP financial measures. Please refer to today's press release for the reconciliation of GAAP to non-GAP financial performance and additional disclosures regarding these measures. Note that at times during this call, we will discuss Bill's standalone results, which exclude our Bill's blended expense management, which was formerly called Divi, invoiced to go accounts receivable, and finmarked financial planning solutions.

We achieved these results despite economic headwinds and shifting SMB behaviors, we experienced during the year.

Rene: When challenges arose we demonstrated our ability to adapt quickly and we exited the year with a much stronger foundation just scale for the future.

Speaker Change: Note that at times during this call, we will discuss Bill's standalone results, which exclude our Bill's blended expense management, which was formerly called Divi, invoiced to go accounts receivable, and finmarked financial planning solutions.

Rene: In fiscal 2024, we served nearly half a million businesses.

Rene: <unk> and safeguarded nearly $300 billion in payment volume and facilitated more than $100 million payment transactions.

Speaker Change: Note that we will be revising our key metrics presentation beginning in the first quarter of fiscal 2025 to reflect our evolving product solutions set. This new presentation will provide investors with an enhanced view of our integrative platform, which includes Bill APAR and spend an expense, excluding the Financial Institution Channel.

Karen Sansot: Note that we will be revising our key metrics presentation beginning in the first quarter of fiscal 2025 to reflect our evolving product solutions set. This new presentation will provide investors with an enhanced view of our integrative platform, which includes Bill APAR and spend an expense, excluding the Financial Institution Channel. It will also provide an enhanced view of our embedded and other solutions, which includes the Financial Institution Channel, invoice to go, and other solutions.

Rene: Many industry, leading partners, including more than 8000 accounting firms and top financial institutions use bill as an essential part of the tech stack they provide their clients.

Rene: Our network members increased to $7 1 million up 21% year over year as we further build platform capabilities for suppliers.

Speaker Change: It will also provide an enhanced view of our embedded and other solutions, which includes the Financial Institution Channel, invoice to go, and other solutions.

This scale is a direct reflection of the incredible value delivered to smbs through our products and services.

Speaker Change: The appendix of our fiscal Q4 2024 investor decks previews this presentation and provides a nine-quarter look back for reference.

Karen Sansot: The appendix of our fiscal Q4 2024 investor decks previews this presentation and provides a nine-quarter look back for reference.

Rene: We turned that financial back office complexity that drains smbs of time and money into simple automated tools that provide visibility and control.

Speaker Change: I'll turn the call over to Renee.

Renee Lizert: I'll turn the call over to Renee. Thank you, Karen.

We empower smbs to run better businesses.

Renee Lizert: Thank you, Karen.

Renee Lizert: Good afternoon, everyone.

Renee Lizert: Good afternoon, everyone. Fiscal 2024 was an important year for Bill. We delivered more innovations to SMBs. We launched our integrative platform, made capital more accessible, and empowered small and mid-sized businesses with insights and control with their cash flow. In addition, we built tight organizational alignment, laying the foundation for future growth. These and future innovations are especially valuable for SMBs as they face an uncertain economic environment. In a world of change, Bill is the concept that they can rely on.

Speaker Change: Fiscal 2024 was an important year for Bill.

Rene: In fiscal 2024, we launched our integrated platform incorporating the combined strength of our category defining bill AP and spend and <unk> solutions.

Bill C.O.: We delivered more innovations to SMBs. We launched our integrative platform, made capital more accessible, and empowered small and mid-sized businesses with insights and control with their cash flow.

Speaker Change: In addition, we built tight organizational alignment, laying the foundation for future growth.

Rene: We then added a data and analytics layer to our platform providing businesses a comprehensive view of their cash flow, we continue to simplify and personalized user experiences by leveraging AI throughout the platform.

Speaker Change: These and future innovations are especially valuable for SMBs as they face an uncertain economic environment.

Rene: In addition, we redesigned our mobile app from the ground up to leverage our evolving platform, making sure our customers can increasingly operate their business, where they are in the office or on the go.

Speaker Change: In a world of change, Bill is the concept that they can rely on.

Speaker Change: The set-fast commitment to raising the bar to serve SMBs led to strong financial results. During the year, we delivered strong growth and enhanced profitability as we executed on our objective to be the Essential Financial Operations Platform for SMBs. Total revenue for fiscal 2024 was $1.3 billion, up 22% year-over-year, and core revenue exceeded $1 billion for the first time.

Renee Lizert: The set-fast commitment to raising the bar to serve SMBs led to strong financial results. During the year, we delivered strong growth and enhanced profitability as we executed on our objective to be the Essential Financial Operations Platform for SMBs. Total revenue for fiscal 2024 was $1.3 billion, up 22% year-over-year, and core revenue exceeded $1 billion for the first time. Importantly, we delivered substantial profitability expansion as non-gap operating income total nearly $200 million, growing 68% year-over-year, and we were profitable excluding the benefit of low revenue.

Rene: The value of our integrated platform resonates with Smbs at the end of fiscal 2024, approximately 11500 businesses as both our AP and spend and expense solutions up from 7200, a year ago.

Speaker Change: Importantly, we delivered substantial profitability expansion as non-gap operating income total nearly $200 million, growing 68% year-over-year, and we were profitable excluding the benefit of low revenue. We achieved these results despite economic headwinds and shifting SMB behaviors we experienced during the year.

Rene: We provide smbs with fast and secure payment experiences and access to capital.

Rene: In the past year, we enhanced our foundational infrastructure and unlocks new payment capabilities to drive faster payment speed and more choice.

Rene: Since fiscal 2018, our platform has processed more than one trillion dollars of total payment volume, making us one of the largest providers of fast affordable BTB payments.

Speaker Change: When challenges arose, we demonstrated our ability to adapt quickly, and we exited the year with a much stronger foundation to scale for the future.

Renee Lizert: We achieved these results despite economic headwinds and shifting SMB behaviors we experienced during the year. When challenges arose, we demonstrated our ability to adapt quickly, and we exited the year with a much stronger foundation to scale for the future. In fiscal 2024, we served nearly half a million businesses, moved and safeguarded nearly $300 billion in payment volume, and facilitated more than 100 million payment transactions. Many industry-leading partners, including more than 8,000 accounting firms and top financial institutions, used Bill as an essential part of the tech stack they provide their clients.

Speaker Change: <unk> is a powerful advantage, we have that enables us to innovate faster and better.

Speaker Change: For example in fiscal 2024, we launched our new payment engine, leveraging our experience and data from moving more than one trillion dollars across hundreds of millions of transactions.

Speaker Change: In fiscal 2024, we served nearly half a million businesses, moved and safeguarded nearly $300 billion in payment volume, and facilitated more than 100 million payment transactions.

Speaker Change: This allows us to drive faster payments speed and better manage risk across a multitude of payment offerings, which is critical as we extend our platform.

Speaker Change: We also started activating supplier engagement by establishing direct relationships suppliers and enhancing their user experiences for.

Speaker Change: Many industry-leading partners, including more than 8,000 accounting firms and top financial institutions, used Bill as an essential part of the tech stack they provide their clients.

Speaker Change: For example, we streamline the onboarding experience for suppliers, who accept international payments and made it easier for them to claim the local currency they want through and product experiences.

Speaker Change: Our network members increased to $7.1 million, up 21% year-over-year, as we further built platform capabilities for suppliers. This scaled as a direct reflection of the incredible value delivered to SMBs through our products and services.

Renee Lizert: Our network members increased to $7.1 million, up 21% year-over-year, as we further built platform capabilities for suppliers. This scaled as a direct reflection of the incredible value delivered to SMBs through our products and services. We turned the financial back-office complexity that drains SMBs of time and money into simple, automated tools that provide visibility and control. We empower SMBs to run better businesses. In fiscal 2024, we launched our integrated platform incorporating the combined strength of our category-defining Bill AP and spending expense solutions.

Speaker Change: From day, one we have made breadth of payment choices, a key component of our platform behind each new choice. There is an innovative offering rigorous compliance and extensive risk management.

Speaker Change: We turned the financial back-office complexity that drains SMBs of time and money into simple, automated tools that provide visibility and control.

Speaker Change: This year, we enabled local transfer for international payments and fed now support for instant transfer. In addition, we executed a controlled launch of invoice financing, which is one of our first working capital solutions and the products exhibited both strong early adoption and repeat usage.

Speaker Change: We empower SMBs to run better businesses.

Speaker Change: In fiscal 2024, we launched our integrated platform incorporating the combined strength of our category-defining Bill AP and spending expense solutions. We then added a data and analytics layer to our platform, providing businesses a comprehensive view of their cash flow.

Renee Lizert: We then added a data and analytics layer to our platform, providing businesses a comprehensive view of their cash flow. We continued to simplify and personalize user experiences by leveraging AI throughout the platform. In addition, we redesigned our mobile app from the ground up to leverage our evolving platform, making sure our customers can increasingly operate their business where they're in the office or on the go. The value of our integrated platform resonates with SMBs.

Speaker Change: We reach Smbs through our direct channel and our partner ecosystem, our constant focus on innovation enables all types of partners to provide value and achieve tangible results.

Speaker Change: We continued to simplify and personalize user experiences by leveraging AI throughout the platform.

Speaker Change: Accounts have been a core focus area since the inception of bill.

Our innovation has been a critical driver of their rapidly expanding client advisory service practice areas. We.

Speaker Change: In addition, we redesigned our mobile app from the ground up to leverage our evolving platform, making sure our customers can increasingly operate their business where they're in the office or on the go.

Speaker Change: Partnering with accountants to build solutions tailored to their business and today, they represent our largest customer acquisition channel.

Speaker Change: The value of our integrated platform resonates with SMBs.

Speaker Change: Our accountant relationships are very sticky and have a very high retention rate. The result is that more than half of our customers are from the accounting channel.

Speaker Change: At the end of fiscal 2024, approximately 11,500 businesses use both our AP and spend in expense solutions, up from 7,200 a year ago.

Renee Lizert: At the end of fiscal 2024, approximately 11,500 businesses use both our AP and spend in expense solutions, up from 7,200 a year ago. We provide SMBs with fast and secure payment experiences and access to capital. In the past year, we enhanced our foundational infrastructure and unlocked new payment capabilities to drive faster payments' speed and more choice. Since fiscal 2018, our platform has processed more than $1 trillion of total payment volume, making us one of the largest providers of fast, affordable B2B payments.

Speaker Change: A great example of how our platform empowers accounting firms to provide differentiated value is <unk>, a premier national business Advisory and accounting services firm founded and $19 52 <unk>.

Speaker Change: We provide SMBs with fast and secure payment experiences and access to capital.

Speaker Change: In the past year, we enhanced our foundational infrastructure and unlocked new payment capabilities to drive faster payments' speed and more choice.

Speaker Change: <unk> partner of managed services operations shared and I quote at <unk>, we cultivate a growth mindset at every level of the firm we adopted bill in 2010 have grown together over the past 14 years.

Speaker Change: Since fiscal 2018, our platform has processed more than $1 trillion of total payment volume, making us one of the largest providers of fast, affordable B2B payments.

Speaker Change: We have over 25 national locations build as a trusted financial operations leader for over 500 clients in the technology backbone for our client advisory practices, which is the fastest growing part of our business.

Speaker Change: Scale is a powerful advantage we have that enables us to innovate faster and better. For example, in fiscal 2024, we launched our new payment engine, leveraging our experience and data for moving more than $1 trillion across hundreds of millions of transactions. This allows us to drive faster payments' speed and better managed risk across the multitude of payment offerings, which is critical as we extend our platform.

Renee Lizert: Scale is a powerful advantage we have that enables us to innovate faster and better. For example, in fiscal 2024, we launched our new payment engine, leveraging our experience and data for moving more than $1 trillion across hundreds of millions of transactions. This allows us to drive faster payments' speed and better managed risk across the multitude of payment offerings, which is critical as we extend our platform. We also started activating supplier engagement by establishing direct related suppliers and enhancing their user experiences.

Speaker Change: Using bill its accounts payable and spend and expense solutions allows us to expand and provide more value for our clients and having bill as a recommended part of our clients Tech stack allows us to stay ahead of the game for our clients.

Speaker Change: Just like we empower Africa, we enable thousands of accounting firms to provide strategic and differentiated value to their clients.

Speaker Change: We also started activating supplier engagement by establishing direct related suppliers and enhancing their user experiences. For example, we streamlined the onboarding experience for suppliers who accept international payments and made it easier for them to claim the local currency they want through in product experiences.

Speaker Change: Recently, we held our sixth annual build account and partner Council meeting, bringing together industry leaders from some of the most innovative and influential accounting firms from across the country to discuss the state of the profession and financial automation.

Renee Lizert: For example, we streamlined the onboarding experience for suppliers who accept international payments and made it easier for them to claim the local currency they want through in product experiences. From day one, we have made breadth of payment choices a key component of our platform. Behind each new choice, there is an innovative offering, rigorous compliance and extensive risk management. This year, we enabled local transfer for international payments and fed now support for instant transfer.

Speaker Change: From day one, we have made breadth of payment choices a key component of our platform. Behind each new choice, there is an innovative offering, rigorous compliance and extensive risk management. This year, we enabled local transfer for international payments and fed now support for instant transfer. In addition, we executed a controlled launch of invoice financing, which is one of our first working capital solutions and the product exhibited both strongly adoption and repeat usage.

Speaker Change: These accounting firms we're excited by the progress we made in fiscal 'twenty, four and are energized for the opportunity to expand their business leveraging bills growing capabilities.

Speaker Change: The other we are developing joint roadmaps to better serve Smbs and we are investing behind these opportunities.

Renee Lizert: In addition, we executed a controlled launch of invoice financing, which is one of our first working capital solutions and the product exhibited both strongly adoption and repeat usage. We reach SMBs through our direct channel and our partner ecosystem. Our constant focus and innovation enables all types of partners to provide value and achieve tangible results. Accounts have been a core focus area since the inception of Bill. Our innovation has been a critical driver of the rapidly expanding client advisory service practice areas.

Speaker Change: Some areas of investment for accountants in fiscal 'twenty. Five include additional multi entity functionality to help them scale growth, providing more tools for cash flow budgeting and forecasting and insights and increasing our sales and support efforts to partner, even more deeply with them.

Speaker Change: We reach SMBs through our direct channel and our partner ecosystem.

Speaker Change: Our constant focus and innovation enables all types of partners to provide value and achieve tangible results.

Our commitment to Smbs means that we work hard to serve them wherever they are using our robust ecosystem.

Speaker Change: Accounts have been a core focus area since the inception of Bill.

Speaker Change: In addition to accounts, we worked closely with financial institutions and software companies by enabling them with embedded solutions for their customers.

Speaker Change: Our innovation has been a critical driver of the rapidly expanding client advisory service practice areas.

Speaker Change: The core of our ecosystem strategy is about expanding our reach and serving SMB, where they want to do business laying the foundation to serve customers across different channels over the long term.

Speaker Change: We partner with accountants to build solutions tailored to their business and today, they represent our largest customer acquisition channel. Our account and relationships are very sticky and have a very high retention rate. The result is that more than half of our customers are from the accounting channel. A great example of how our platform empowers accounting firms to provide differentiated value is Afrio.

Renee Lizert: We partner with accountants to build solutions tailored to their business and today, they represent our largest customer acquisition channel. Our account and relationships are very sticky and have a very high retention rate. The result is that more than half of our customers are from the accounting channel. A great example of how our platform empowers accounting firms to provide differentiated value is Afrio. A premier national business advisory and accounting services firm founded in 1952.

Speaker Change: We've been creating value for years with scalable embedded solutions for financial institutions recently, one of our large bank partners easily migrating thousands of customers. They acquired through an acquisition onto our white label Bill pay platform.

Speaker Change: A premier national business advisory and accounting services firm founded in 1952.

Speaker Change: This bank is also offering our expense management solution to their commercial customers to help them streamline expenses automated reporting and provide more real time visibility and controls.

Speaker Change: Amber Wellby loved partner of managed services operations shared an I quote.

Renee Lizert: Amber Wellby loved partner of managed services operations shared an I quote. At Afrio, we cultivated growth mindset at every level of the firm. We adopted Bill in 2010 and have grown together over the past 14 years. Today, we have over 25 national locations. Bill is a trusted financial operations leader for 500 clients and the technology backbone for our client advisory practices, which is the fastest growing part of our business. Using Bill's accounts payable and spend and expense solutions allows us to expand and provide more value for our clients.

Amber Wellby: At Afrio, we cultivated growth mindset at every level of the firm.

Speaker Change: Regional banks are also looking to provide more value to their customers.

Speaker Change: We adopted Bill in 2010 and have grown together over the past 14 years.

Speaker Change: One of the largest reasonable banks recently began to offer our white label platform and our large suite of payment offerings to do more for their clients.

Speaker Change: Today, we have over 25 national locations.

Speaker Change: Bill is a trusted financial operations leader for 500 clients and the technology backbone for our client advisory practices, which is the fastest growing part of our business. Using Bill's accounts payable and spend and expense solutions allows us to expand and provide more value for our clients.

Speaker Change: This bank Leverages, our advanced workflows, and our many payment offerings, including pay by card virtual card and international payments.

Speaker Change: As we have shared with you we've been working with one of our top three U S Bank partners to modify our partnership to fit their evolving needs better.

Speaker Change: And having Bill as a recommended part of our clients text fact allows us to stay ahead of the game for our clients.

Renee Lizert: And having Bill as a recommended part of our clients text fact allows us to stay ahead of the game for our clients. Just like we empower Afrio, we enable thousands of accounting firms to provide strategic and differentiated value to their clients. We recently held our six annual Bill Accountant Partner Council meeting bringing together industry leaders from some of the most innovative and influential accounting firms from across the country to discuss the state of the profession and financial automation.

Speaker Change: We recently extended our agreement with the bank for an additional three years for them to use our current offering consistent with our embedded strategy. We also made our API is available as part of this contract amendment.

Speaker Change: Just like we empower Afrio, we enable thousands of accounting firms to provide strategic and differentiated value to their clients.

Speaker Change: We recently held our six annual Bill Accountant Partner Council meeting bringing together industry leaders from some of the most innovative and influential accounting firms from across the country to discuss the state of the profession and financial automation.

Speaker Change: Our experience and expertise in serving banks over the last decade, plus has informed our overall embed strategy opens up more avenues to amplify the power of our platform and translated into fast time to market with our new software partner zero.

Speaker Change: These accounting firms were excited by the progress we made in fiscal 24 and are energized for the opportunity to expand their business leveraging Bill's growing capabilities.

Renee Lizert: These accounting firms were excited by the progress we made in fiscal 24 and are energized for the opportunity to expand their business leveraging Bill's growing capabilities. Together, we are developing joint road maps to better serve SMBs and we are investing behind these opportunities. Some areas of investment for accountants in fiscal 25 include additional multi entity functionality to help them scale growth, providing more tools for cash flow by getting forecasting insights. And increasing our sales and support efforts to partner even more deeply with them.

Speaker Change: Earlier this year, we announced the strategic partnership with zero to embed, our Onboarding and bill payment capabilities and its software I'm excited that the solution will soon be available in beta to zero as U S customers, which demonstrates our ability to rapidly launch solutions for our partners.

Speaker Change: Together, we are developing joint road maps to better serve SMBs and we are investing behind these opportunities.

Speaker Change: Some areas of investment for accountants in fiscal 25 include additional multi entity functionality to help them scale growth, providing more tools for cash flow by getting forecasting insights.

Speaker Change: More and more we are seeing strong interest in the market for embedded finance offerings and our investments in learnings make us well positioned to support this demand.

Speaker Change: In summary, we have built a growing $1 billion business and we're just scratching the surface of the market potential there are 6 million smbs in the U S with employees and they contribute trillions of dollars of GDP annually.

Speaker Change: And increasing our sales and support efforts to partner even more deeply with them.

Renee Lizert: Our commitment to SMBs means that we work hard to serve them wherever they are using our robust ecosystem. In addition to accounts, we work closely with financial institutions and software companies by enabling them with embedded solutions for their customers. The core of our ecosystem strategy is about expanding our reach and serving SMBs where they want to do business, laying the foundation to serve customers across different channels over the long term. It is thousands of customers they acquired through an acquisition onto our White Label Build Pay platform.

Speaker Change: The opportunity we are pursuing is immense and we are confident in our ability to capture it.

Speaker Change: We are focused on growing into a multibillion dollar highly profitable business.

Speaker Change: Our commitment to SMBs means that we work hard to serve them wherever they are using our robust ecosystem.

In fiscal 2025, we intend to capitalize on the momentum we created in fiscal 2024, and widen our leadership position in the market.

Speaker Change: Our top priorities are to continue to simplify and enhance our platform experience.

To enrich existing payment offerings, and deliver new payment options and to diversify and deepen our ecosystem.

Speaker Change: In addition to our ongoing platform and ecosystem investments, we are making a number of targeted investments in fiscal 2025 to support these priorities, including enhancing and expanding existing solutions that increase the value proposition for virtual card international payments and working capital.

Speaker Change: In addition to accounts, we work closely with financial institutions and software companies by enabling them with embedded solutions for their customers.

Renee Lizert: This bank is also offering our expense management solution to their commercial customers to help them streamline expenses, automate reporting, and provide more read time visibility and controls. Regional banks are also looking to provide more value to their customers. One of the largest regional banks recently began to offer our White Label platform and our large suite of payment offerings to do more for their clients. This bank leverages our advanced workflows and our many payment offerings, including pay by card, virtual card, and international payments.

Speaker Change: <unk> the experience and go to market capabilities for suppliers.

Speaker Change: Delivering new capabilities and deepening relationships with accounting firms.

Speaker Change: And driving expansion and adoption of our embedded solutions.

Speaker Change: We have a strong and unique business model that generates multiple revenue streams and a track record of driving balanced growth and profitability.

Renee Lizert: As we have shared with you, we have been working with one of our top three US bank partners to modify our partnership to fit their evolving needs better. We recently extended our agreement with the bank for an additional three years for them to use our current offering. Consistent with our embedded strategy, we also made our APIs available as part of this contract amendment. Our experience and expertise in serving banks over the last decade plus has informed our overall embed strategy, opened up more avenues to amplify the power of our platform, and translated into fast time to market with our new software partner zero.

Speaker Change: We increased our non-GAAP operating margin every year since our IPO, while driving significant growth.

Speaker Change: Where they are proven strong cash generation and balance sheet, we are well capitalized to strategically put resources behind these top priorities that we believe solidify and extend our leadership.

Speaker Change: We believe our category leadership and scale are critical for the long term growth and profitability of Bill. We are planning offense strategically with our strong balance sheet to prioritize the long term potential of our business.

Renee Lizert: Earlier this year, we announced a strategic partnership with zero to embed our onboarding and build payment capabilities in its software. I'm excited that the solution will soon be available in beta to zero US customers, which demonstrates our ability to rapidly launch solutions for our partners. More and more, we are seeing strong interest in the market for embedded finance offerings and our investments and learnings make us well positioned to support this demand.

Speaker Change: As we do this we are keenly focused on capital allocation and balancing investments in the business with return of capital to shareholders.

Today, we announced that the board authorized a new $300 million share repurchase program. This reflects the confidence that the board management team and I have in our strategy and in Bill as an investment opportunity with significant upside.

Speaker Change: We are deeply committed to our success and committed to taking actions that deliver value.

Renee Lizert: In summary, we built a growing billion dollar business and we're just scratching the surface of the market potential. There are six million SMBs in US with employees, and they contribute trillions of dollars of GDP annually. The opportunity we are pursuing is immense, and we are confident in our ability to capture it. We are focused on growing into a multi-billion dollar highly profitable business. In fiscal 2025, we intend to capitalize on the momentum we created in fiscal 2024 and widen our leadership position in the market.

Speaker Change: We are all in for Smbs and we are all in to win the market that we created I'd like to thank our customers and partners for their continued trust they place in us.

Speaker Change: I also want to thank our employees for their constant dedication to serving SMB and each other.

Speaker Change: Now I'll turn the call over to John Thanks.

John: Thanks, Renee during fiscal 2024, we acted decisively when cyclical headwinds caused moderated <unk> spend and a shift in payment method preferences.

Speaker Change: The core of our ecosystem strategy is about expanding our reach and serving SMBs where they want to do business, laying the foundation to serve customers across different channels over the long term.

Renee Lizert: Our top priorities are to continue to simplify and enhance our platform experience, to enrich existing payment offerings and deliver new payment options, and to diversify and deepen our ecosystem. In addition to our ongoing platform and ecosystem investments, we are making a number of target investments in fiscal 2025 to support these priorities, including enhancing and expanding existing solutions that increase the value proposition for virtual card, international payments, and working capital. I'm metting the experience and go to market capabilities for suppliers.

John: We responded quickly by adapting our go to market initiatives, improving product experiences and working diligently with partners.

John: We focused our resources and execution on our most important priorities and proactively adjusted operating expenses to improve profitability.

John: These actions enabled us to improve customer acquisition and stabilized payment monetization enhanced profitability and position Bill for continued market leadership.

Speaker Change: In fiscal 2024, we delivered 22% revenue growth $196 million in non-GAAP operating income for our non-GAAP operating margin of 15% and $258 million in free cash flow in.

In addition, we delivered $31 million in non-GAAP operating income, excluding float revenue compared to $4 million a year ago.

Renee Lizert: We have a strong and unique business model that generates multiple revenue streams and a track record of driving balanced growth and profitability. We increase our non-dap operating margin every year since our IPO while driving significant growth. With our proven strong-cast generation and balance sheet, we are well capitalized to strategically put resources behind these top priorities that we believe solidify and extend our leadership. We believe our category leadership and scale are critical for the long-term growth and profitability of Bill.

Speaker Change: During fiscal 'twenty, four we repurchased $212 million in common stock and retired $983 million in aggregate principal amount of our 2025 convertible notes.

Speaker Change: These actions contributed to our full year fiscal 2024 weighted average diluted share count declining by 2% year over year.

Speaker Change: In addition, and most importantly in fiscal 'twenty four we strengthened our foundation for the future.

Speaker Change: Have a clear vision and strategy centered around the needs of Smbs and we are executing to capture the large market opportunity ahead of us.

Renee Lizert: We are planning offense strategically with our strong balance sheet to prioritize the long-term potential of our business. As we do this, we are keenly focused on capital allocation and balancing investments in the business with your turn of capital to shareholders.

Speaker Change: We are laser focused on driving long term shareholder value through strong profit and free cash flow generation, while optimizing our capital structure.

Speaker Change: Now onto a few highlights of our fiscal Q4 results.

Renee Lizert: Today, we announced that the board authorized a new $300 million share repurchase program. This reflects the confidence that the board, management team, and I have in our strategy and in Bill as an investment opportunity with significant upside. We are deeply committed to our success and committed to taking actions that deliver value. We are all in for SMBs, and we are all in to win the market that we created. I'd like to thank our customers and partners for the continued trust that they've placed enough. And I also want to thank our employees for their constant dedication to serving SMBs and each other.

Speaker Change: We delivered against our goal of profitable growth in Q4 total revenue was $344 million up 16% year over year core revenue, which includes subscription and transaction fees was 301 million also up 16% year over year.

Speaker Change: Float revenue was $42 million.

Speaker Change: non-GAAP operating income was $60 million and grew 42% year over year, reflecting a 17% margin.

Speaker Change: It is thousands of customers they acquired through an acquisition onto our White Label Build Pay platform.

Speaker Change: non-GAAP operating income excluding float revenue was $19 million, an increase more than 200% year over year.

Turning to updates on our key solutions fueled standalone revenue was $161 million in Q4 up 8% year over year.

John Rettig: Now, I'll turn the call over to John. Thanks, Renee. During fiscal 2024, we acted decisively when cyclical headwinds caused moderated B2B spend and a shift in payment method preferences. We responded quickly by adapting our go-to-market initiatives, improving product experiences, and working diligently with partners. We focused our resources and execution on our most important priorities and proactively adjusted operating expenses to improve profitability. These actions enabled us to improve customer acquisition and stabilize payment monetization, enhance profitability, and position bill for continued market leadership.

Speaker Change: This bank is also offering our expense management solution to their commercial customers to help them streamline expenses, automate reporting, and provide more read time visibility and controls.

Our enhanced go to market initiatives drove higher customer acquisition.

Speaker Change: We added 4600, net new customers in our direct and accounting channels.

Speaker Change: Regional banks are also looking to provide more value to their customers. One of the largest regional banks recently began to offer our White Label platform and our large suite of payment offerings to do more for their clients. This bank leverages our advanced workflows and our many payment offerings, including pay by card, virtual card, and international payments.

And our financial institution or Fi channel, we added 6700 net new customers.

Speaker Change: As we have shared with you, we have been working with one of our top three US bank partners to modify our partnership to fit their evolving needs better. We recently extended our agreement with the bank for an additional three years for them to use our current offering. Consistent with our embedded strategy, we also made our APIs available as part of this contract amendment.

Speaker Change: The annual customer retention rate of Bill Standalone customers, which excludes <unk> was a healthy 83%.

Speaker Change: Our experience and expertise in serving banks over the last decade plus has informed our overall embed strategy, opened up more avenues to amplify the power of our platform, and translated into fast time to market with our new software partner zero. Earlier this year, we announced a strategic partnership with zero to embed our onboarding and build payment capabilities in its software.

Speaker Change: Excluding the impact of the Sunset of Intuit simple bill pay earlier in the year customer retention was 86% consistent with levels over the past several years.

John Rettig: In fiscal 2024, we delivered 22% revenue growth, 196 million in non-gap operating income for a non-gap operating margin of 15%, and 258 million in free cash flow. In addition, we delivered 31 million in non-gap operating income, excluding float revenue, compared to 4 million a year ago. During fiscal 24, we repurchased 212 million in common stock and retired 983 million in aggregate principal amount of our 2025 convertible notes. These actions contributed to our full year of fiscal 2024 weighted average diluted share count declining by 2% year over year.

Speaker Change: Bill Standalone subscription revenue, excluding our Fi partners increased 7% year over year in Q4.

Speaker Change: Overall, Bill Standalone subscription revenue declined 1% from last year, which reflects changes in our <unk> channel.

Speaker Change: Bill Standalone transaction revenue grew 14% year over year.

Speaker Change: <unk> in Q4 was up 9% over a year ago in line with recent quarters.

Speaker Change: Monetization or take rate exceeded our expectations that we set in Q1, as we scaled newer payment offerings and enhanced existing products.

Vendor cost sensitivity on some of our higher monetization products persistent which impacted TPB penetration rates.

Speaker Change: I'm excited that the solution will soon be available in beta to zero US customers, which demonstrates our ability to rapidly launch solutions for our partners.

John Rettig: In addition, and most importantly, in fiscal 24, we strengthened our foundation for the future. We have a clear vision and strategy centered around the needs of SMBs, and we are executing to capture the large market opportunity ahead of us. We are laser focused on driving long-term shareholder value through strong profit and free cash flow generation while optimizing our capital structure.

Speaker Change: In Q4 instant transfer is 1% of Bill Standalone TPB, while virtual cards were two 9% and cross border payments were four 5%.

Speaker Change: More and more, we are seeing strong interest in the market for embedded finance offerings and our investments and learnings make us well positioned to support this demand. In summary, we built a growing billion dollar business and we're just scratching the surface of the market potential.

Speaker Change: Foreign currency payments represented 34% of total cross border payment volume in the quarter.

Speaker Change: These penetration rates were slightly lower compared to a year ago as our overall suite of payment offerings expanded and vendors optimized their cost of acceptance.

John Rettig: Now, on to a few highlights of our fiscal Q4 results. We delivered against our goal of profitable growth. In Q4, total revenue was 344 million, up 16% year over year. Core revenue, which includes subscription and transaction fees, was 301 million, also up 16% year over year. Quote revenue was 19 million, and increased more than 200% year over year. Turning the updates on our key solutions, Bill's standalone revenue was 161 million in Q4, up 8% year over year.

Speaker Change: As of June 32024, our dollar based net revenue retention rate for Bill Standalone was 92%.

Speaker Change: As expected this was impacted by the lower spend environment, which impacted payment volume payment choice and subscription fees during the year.

Speaker Change: Excluding the impact of a large fi partner contract Amendment, our dollar based net revenue retention rate was 96%.

Speaker Change: We expect this to be above 100% as we continued to rollout new offerings and the economy returns to growth mode for Smbs.

Speaker Change: As a reminder, our dollar based net revenue retention rate excludes the impact of our spend and expense offering.

Speaker Change: Moving on to Bill spend and expense, formerly known as Debbie spending expense revenue totaled $126 million in Q4 up 26% year over year.

John Rettig: Our enhanced go-to-market initiatives drove higher customer acquisition. We added 4,600 net new customers in our direct and accounting channels. In our financial institution or FI channel, we added 6,700 net new customers. The annual customer retention rate of Bill's standalone customers, which excludes FIs, was a healthy 83%. Excluding the impact of the sunset of into its simple bill pay earlier in the year, customer retention was 86%, consistent with levels over the past several years.

Speaker Change: Driven by 28% card payment volume growth.

Interchange fees were 261 basis points.

Speaker Change: We added 1300, net new spending businesses, which was in line with our expectations.

Speaker Change: As we are focusing on businesses with a higher propensity to spend.

Speaker Change: Rewards were 48% of spend and expense revenue.

Speaker Change: The customer value proposition of leveraging an expanded suite of platform capabilities is resonating with smbs.

John Rettig: Bill's standalone subscription revenue, excluding FI partners, increased 7% year over year in Q4. Overall, Bill's standalone subscription revenue declined 1% from last year, which reflects changes in our FI channel. Bill's standalone transaction revenue grew 14% year over year. TPV in Q4 was up 9% over a year ago, in line with recent quarters. Monetization or take rate exceeded our expectations that we set in Q1, as we scaled newer payment offerings and enhanced existing products.

Speaker Change: Number of joint customers, who use both bill AP and spend and expense in Q4 increased to 11500 at the end of fiscal 2024, reflecting an increase of nearly 60% compared to a year ago.

Speaker Change: Joint customers are stickier and show strong engagement is reflected in low attrition rates and strong net dollar based revenue retention compared to other customers.

Speaker Change: Our portfolio of payment offerings creates multiple avenues to drive AD valorem payment adoption and penetration on a company level, our AD valorem penetration, excluding FY payment volume was 14% in Q4 up from 13% a year ago.

John Rettig: Fender cost sensitivity on some of our higher monetization products persisted, which impacted TPV penetration rates. In Q4, instant transfers 1% of Bill's standalone TPV, while virtual cards were 2.9%, and cross-border payments were 4.5%. Foreign currency payments represented 34% of total cross-border payment volume in the quarter. These penetration rates were slightly lower compared to a year ago, as their overall suite of payment offerings expanded and vendors optimized their cost of acceptance. As of June 30th, 2024, our dollar-based net revenue retention rate for Bill's standalone was 92%.

Speaker Change: As our integrated solutions converge, we will provide a consolidated AD valorem payment rate as opposed to individual solution rates on an annual basis.

Speaker Change: We believe that over the long term our portfolio of AD valorem products can be above 20% of our Fi TPB.

Speaker Change: Moving on to financial highlights non-GAAP gross profit in Q4 was $292 million up 14% year over year and non-GAAP gross margin was 85%.

Speaker Change: Our strong business model enables us to consistently deliver a gross margin that is among the best in class for software and Fintech companies.

John Rettig: As expected, this was impacted by the lower spend environment, which impacted payment volume, payment choice, and subscription fees during the year. Excluding the impact of a large FI partner contract amendment, our dollar-based net revenue retention rate was 96%. We expect this to be above 100% as we continue to roll out new offerings and the economy returns to growth mode for SMBs. As a reminder, our dollar-based net revenue retention rate excludes the impact of our spend and expense offering.

Speaker Change: We continue to demonstrate our ability to drive leverage in our business non.

Speaker Change: non-GAAP operating income for Q4 was $60 million up 42% year over year representing.

Speaker Change: Representing a 17% non-GAAP operating margin and an expansion of three points year over year.

Speaker Change: There are six million SMBs in US with employees, and they contribute trillions of dollars of GDP annually.

Speaker Change: non-GAAP net income was $64 million, reflecting a 19% margin.

Speaker Change: Stock based compensation in Q4 was 17% of total revenue down from 20% a year ago.

John Rettig: Moving on to Bill's spend and expense, formerly known as Divi, spend and expense revenue totaled 126 million in Q4, up 26% year over year, driven by 28% card payment volume growth. Interchange fees were 261 basis points. We added 1,300 net new spending businesses which was in line with our expectations as we are focusing on businesses with a higher propensity to spend. The war is 48% of spend and expense revenue. The customer value proposition of leveraging an expanded suite of platform capabilities is resonating with SMBs.

Weighted average diluted shares declined by $5 6 million or 5% year over year, primarily due to our initiatives to repurchase shares and convertible notes during the year.

Speaker Change: Turning to remaining performance obligations or <unk>.

Speaker Change: As Rene discussed we amended our existing agreement with a top three bank in the U S by extending it for an additional three years.

Rene: The <unk> associated with this partner remained consistent but its now spread out over approximately four years.

Speaker Change: A shift in timing to fulfill their appeal.

Speaker Change: We also expanded the product set available under this agreement to include our newest API is consistent with our embedded strategy.

John Rettig: The number of joint customers who use both Bill AP and spent an expense in Q4 increased to 11,500 at the end of fiscal 2024, reflecting an increase of nearly 60% compared to a year ago. Joint customers are stickier and show strong engagement as reflected in low attrition rates and strong net dollar-based revenue retention compared to other customers. Our portfolio of payment offerings creates multiple avenues to drive ad-volarm payment adoption and penetration.

Speaker Change: Moving on to capital allocation, we continue to optimize our capital structure in Q4, we repurchased $234 million in aggregate principal amount of our 2025 convertible notes, resulting in cash usage of $222 million and a reduction in non-GAAP diluted share count of <unk> 4 million weighted shares.

Speaker Change: The repurchase of these notes resulted in an $11 million net benefit to other income and expenses, which is reflected in our GAAP results, but excluded from our non-GAAP results.

John Rettig: On a company level, our ad-volarm penetration excluding FIP payment volume was 14% in Q4 up from 13% a year ago. As our integrated solutions converge, we will provide a consolidated ad-volarm payment rate as opposed to individual solution rates on an annual basis. We believe that over the long term, our portfolio of ad-volarm products can be above 20% of our XFI GPB. Moving on to financial highlights, non-gap growth profit in Q4 was 292 million, up 14% year over year, and non-gap growth margin was 85%.

We are well capitalized with $1 $6 billion in cash cash equivalents and short term investments.

Speaker Change: Shifting to our outlook as we enter fiscal 2025, we have never been better positioned to capitalize on the opportunity to further penetrate the market and help SMB succeed.

Speaker Change: Our solutions are a critical part of their daily operations and give them the industry's best tools to better run and grow their business.

Speaker Change: We are confident that the strong and growing customer value proposition of our platform and ecosystem positions Bill for continued long term growth and leadership, which will in turn deliver value to our shareholders.

John Rettig: Our strong business model enables us to consistently deliver a growth margin that is among the best in class for software and FinTech companies. We continue to demonstrate our ability to drive leverage in our business. Non-gap operating income for Q4 was 60 million, up 42% year over year, representing a 17% non-gap operating margin and an expansion of three points year over year. Non-gap net income was 64 million, reflecting a 19% margin. Stock-based compensation in Q4 was 17% of total revenue, down from 20% a year ago.

Speaker Change: We believe maintaining a dynamic balance between growth and profitability is essential for long term business success with our strong execution capabilities and the market opportunity ahead of US we are strategically investing for growth acceleration and extension of our category leadership, while delivering attractive margins across our business lines.

Speaker Change: We generate significant free cash flow and have a strong balance sheet, which enables us to invest which we do with purpose and discipline.

Speaker Change: We have a unique business model that includes float revenue, which we view as a key competitive advantage from which we generate significant free cash flow.

John Rettig: Weighted average deluded shares declined by 5.6 million or 5% year over year, primarily due to our initiatives to repurchase shares and convertible notes during the year. Turning to remaining performance obligations or RPO, as Renee discussed, we amended our existing agreement with a top three bank in the US by extending it for an additional three years. The RPO associated with this partner remain consistent, but is now spread out over approximately four years, causing a shift in timing to fulfill the RPO. We also expanded the products that available under this agreement to include our newest APIs consistent with our embedded strategy.

Speaker Change: These factors enable us to accelerate our pace of investments opportunistically as well as fund longer term opportunities.

Speaker Change: We view our board authorized share repurchase program, where we will be deploying 300 million to buy build shares in the open market as both a great investment opportunity as well as in an indication of our optimism for the future.

Speaker Change: As Rene discussed in fiscal 2025, we will be making a number of targeted investments that accelerate our strategic priorities and our ability to capture the large greenfield market opportunity that we're pursuing.

Rene: We believe these investments position us to deliver significant sustainable revenue growth and margin expansion over many years, but we will moderate our profitability growth in the near term.

John Rettig: Moving on to capital allocation, we continue to optimize our capital structure. In Q4, we repurchase 234 million in aggregate principal amount of our 2025 convertible notes, resulting in cash usage of 222 million and a reduction in non-gap deluded share count of 0.4 million weighted shares. The repurchase of these notes resulted in an $11 million net benefit to other income and expenses, which is reflected in our gap results, but excluded from our non-gap results. We are well-capitalized with 1.6 billion in cash, cash equivalents, and short-term investments.

Rene: We operate our business with the objective to be ex float profitable on a non-GAAP basis and to generate significant free cash flow.

Rene: We intend to scale both over time on the road to becoming GAAP profitable.

Rene: For fiscal 2025, we will be making incremental investments in our most important initiatives of approximately 45 million throughout the year.

Rene: We believe now is the right time to invest as we have seen signs of stabilization in the macro environment and continued strong business momentum from the actions we took last year.

Rene: After holding head count flat for the last three quarters. We are now hiring additional talent in our R&D and go to market teams.

Speaker Change: The opportunity we are pursuing is immense, and we are confident in our ability to capture it.

John Rettig: Shifting to our outlook, as we enter fiscal 2025, we've never been better positioned to capitalize on the opportunity to further penetrate the market and help SMB succeed. Our solutions are a critical part of their daily operations and give them the industry's best tools to better run and grow their business. We are confident that the strong and growing customer value proposition of our platform and ecosystem positions bill for continued long-term growth and leadership, which will in turn deliver value to our shareholders.

Rene: We expect our initiatives and investments today will position bill to deliver core revenue growth of 20% or greater in fiscal 2026.

Rene: The midpoint of our full year guidance reflects a slight increase in non-GAAP operating income on an ex float basis. Despite additional planned investments and increased rewards expenses as our spend and expense solution scales.

Rene: We are prudently managing our expenses, while investing for growth.

Speaker Change: We are focused on growing into a multi-billion dollar highly profitable business.

John Rettig: We believe maintaining a dynamic balance between growth and profitability is essential for long-term business success. With our strong execution capabilities and the market opportunity ahead of us, we are strategically investing for growth acceleration and extension of our category leadership while delivering attractive margins across our business lines. We generate significant free cash flow and have a strong balance sheet, which enables us to invest which we do with purpose and discipline. We have a unique business model that includes float revenue, which we view as a key competitive advantage from which we generate significant free cash flow.

Rene: As we accelerate revenue growth, we will also be continuing to create operating leverage.

Rene: At the time of our IPO, we discussed at our non-GAAP operating income margin could be 20% or more over the long term.

Rene: Since then we have quickly expanded our scale and demonstrated our ability to drive leverage in our business and.

Rene: And we see no obstacles to prevent us from achieving significantly higher margins over the long term.

Rene: Now moving onto guidance.

Rene: Yeah.

Speaker Change: Our guidance assumes the macro and BW spend environment remained consistent with recent quarters and that AD valorem payment adoption and monetization rates increased modestly in the latter part of the fiscal year.

John Rettig: These factors enable us to accelerate our pace of investments opportunistically, as well as fund longer-term opportunities. We view our board-authorized share repurchase program, where we will be deploying 300 million to buy bill shares in the open market, as both a great investment opportunity, as well as an indication of our optimism for the future. As Renee discussed, in fiscal 2025, we will be making a number of targeted investments that accelerate our strategic priorities and our ability to capture the large greenfield market opportunity that we are pursuing.

Speaker Change: For fiscal Q1, we expect total revenue to be in the range of 346 to 351 million, which reflects 13% to 15% year over year growth.

Speaker Change: We expect core revenue to be in the range of $305 to $310 million in Q1, which reflects 15% to 17% year over year growth.

Speaker Change: In fiscal 2025, we intend to capitalize on the momentum we created in fiscal 2024 and widen our leadership position in the market.

Speaker Change: Float revenue is expected to be $41 million in Q1, which assumes our yield on FPL funds will be approximately 470 basis points.

Speaker Change: Our top priorities are to continue to simplify and enhance our platform experience, to enrich existing payment offerings and deliver new payment options, and to diversify and deepen our ecosystem.

John Rettig: We believe these investments position us to deliver significant sustainable revenue growth and margin expansion over many years, but will moderate our profitability growth in the near term. We operate our business with the objective to be explode profitable on a non-gap basis and to generate significant free cash flow. We intend to scale both over time on the road to becoming gap profitable. For fiscal 2025, we will be making incremental investments in our most important initiatives of approximately 45 million throughout the year.

Speaker Change: On the bottom line for Q1, we expect to report non-GAAP operating income in the range of 52 to 57 million and non-GAAP net income in the range of $53 million to $57 million.

Speaker Change: We expect non-GAAP net income per diluted share in the range of 48 to <unk> 51 in Q1 based on a share count of 111 million diluted weighted average shares outstanding.

Speaker Change: In addition to our ongoing platform and ecosystem investments, we are making a number of target investments in fiscal 2025 to support these priorities, including enhancing and expanding existing solutions that increase the value proposition for virtual card, international payments, and working capital.

Speaker Change: As a reminder, our guidance for non-GAAP net income includes a non-GAAP provision for income taxes of 20%.

Speaker Change: I'm metting the experience and go to market capabilities for suppliers.

John Rettig: We believe now is the right time to invest, as we have seen signs of stabilization in the macro environment and continued strong business momentum from the actions we took last year. After holding headcount flat for the last three quarters, we are now hiring additional talent in our R&D and go-to-market teams. We expect our initiatives and investments today will position bill to deliver core revenue growth of 20% or greater in fiscal 2026.

Speaker Change: Shifting to full year guidance for fiscal 2025, we expect total revenue to be in the range of $1 $415 million to $1 billion and $450 million, which reflects 10% to 12% year over year growth.

Speaker Change: We expect core revenue to be in the range of $1 $270 million to $1 $305 million, which reflects 13% to 16% year over year growth.

Speaker Change: We expect float revenue to be approximately $145 million in fiscal 2025, which assumes a yield on FPL funds of approximately 400 basis points for the year and an exit fed funds rate by 350 basis points as of June 2025.

John Rettig: The midpoint of our full year guidance reflects a slight increase in non-gap operating income on an explode basis despite additional planned investments and increased rewards expenses as our spend and expense solution scales. We are prudently managing our expenses while investing for growth. As we accelerate revenue growth, we will also be continuing to create operating leverage. At the time of our IPO, we discussed that our non-gap operating income margin could be 20% or more over the long term. Since then, we have quickly expanded our scale and demonstrated our ability to drive leverage in our business, and we see no obstacles to prevent us from achieving significantly higher margins over the long term.

Speaker Change: On the bottom line for fiscal 2025, we expect to report non-GAAP operating income in the range of 160 to 195 million and non-GAAP net income in the range of $154 million to $182 million.

Speaker Change: We expect non-GAAP net income per diluted share to be $1 36 to.

Speaker Change: <unk> to $1 61.

Speaker Change: Based on a share count of 113 million diluted weighted average shares outstanding.

Speaker Change: Note that our Q1 and full year guidance for share count and non-GAAP net income per share do not reflect the impact of our share repurchase program.

John Rettig: Now moving on to guidance. Our guidance assumes the macro and B2B spend environment remain consistent with recent quarters and that ad-valorem payment adoption and monetization rates increase modestly in the latter part of the fiscal year. For fiscal Q1, we expect total revenue to be in the range of 346 to 351 million, which reflects 13 to 15% year-over-year growth. We expect core revenue to be in the range of 305 to 310 million in Q1, which reflects 15 to 17% year-over-year growth.

Speaker Change: For fiscal 2025, we expect stock based compensation expenses to be approximately 20% of total revenue.

Speaker Change: In closing we are pursuing a large market opportunity to automate financial operations for Smbs and Bill is perfectly positioned to capture this opportunity with our platform large and expanding ecosystem and strong dedicated team.

Speaker Change: We've built a dynamic business with powerful levers to drive growth and we are investing now to optimize our results for the long term, which we believe will extend our lead and accelerate the pace of capturing the market opportunity and creating value for shareholders.

John Rettig: Float revenue is expected to be 41 million in Q1, which assumes our yield on FBO funds will be approximately 470 basis points. On the bottom line, for Q1, we expect to report non-gap operating income in the range of 52 to 57 million in non-gap net income in the range of 53 to 57 million. We expect non-gap net income per diluted share in the range of 48 to 51 cents in Q1 based on a share count of 111 million diluted weighted average shares outstanding. As a reminder, our guidance for non-gap net income includes a non-gap provision for income taxes of 20%.

Speaker Change: And now we'll open up the call for Q&A.

Speaker Change: If you would like to ask a question. Please press star followed by one on your telephone keypad.

Speaker Change: Sure. What's your question Press Star followed by two.

Speaker Change: And if you are using a speakerphone. Please pick up your handset before asking your question.

Speaker Change: Our first question today comes from William <unk> with Goldman Sachs. Your line is now open.

William <unk>: Hey, guys.

William <unk>: Taking the question here, maybe I'll start on the Si channel renewal that you mentioned, John I think you called out that the RPM remains similar but spread over all over additional years could you just maybe unpack what that means in terms of just the quarterly subscription revenue from.

John Rettig: Shifting to pull your guidance for fiscal 2025, we expect total revenue to be in the range of 1,415 million to 1,450 million, which reflects 10 to 12% year-over-year growth. We expect core revenue to be in the range of 1,270 million to 1,305 million, which reflects 13 to 16% year-over-year growth. We expect float revenue to be approximately 145 million in fiscal 2025, which assumes a yield on FBO funds of approximately 400 basis points for the year and an exit Fed funds rate of 350 basis points as of June 2025.

Speaker Change: Embedded solutions.

Speaker Change: Part of the business and just how youre thinking about that I know that had taken a step down when you had initially contemplated changes so how will that flow through the numbers in the coming year.

Speaker Change: Yes, thanks for the question.

Speaker Change: We are <unk> as of the end of the year is about $87 million and there is a meaningful percentage of that.

Speaker Change: By the large Si partner that we've talked about throughout the year, where we have finalized the contract amendment and the RP O is consistent for that particular customer as.

John Rettig: On the bottom line, for fiscal 2025, we expect to report non-gap operating income in the range of 160 to 195 million and non-gap net income in the range of 154 to 182 million. We expect non-gap net income per diluted share to be $1.36 to $1.61 based on a share count of 113 million diluted weighted average shares outstanding. Note that our Q1 and full-year guidance for share count and non-gap net income per share do not reflect the impact of our share repurchase program. For fiscal 2025, we expect stock-based compensation expenses to be approximately 20% of total revenue.

Speaker Change: Where we had ended the year and instead of one year left on the contract we've extended it for three years, so we'll be recognizing that revenue over four years.

Speaker Change: In addition to that we're obviously marrying our embedded strategy with our financial institution partners as well and making available our newest API to support the bank and their new program and working with them in any way, we can to help drive success there.

Speaker Change: So that's the kind of the extent of the moving parts on the numbers is really not much change from the ending RVO.

Speaker Change: We have a strong and unique business model that generates multiple revenue streams and a track record of driving balanced growth and profitability.

John Rettig: In closing, we are pursuing a large market opportunity to automate financial operations for SMBs and bill is perfectly positioned to capture this opportunity with our platform, large and expanding ecosystem and strong dedicated team. We've built dynamic business with powerful levers to drive growth and we are investing now to optimize our results for the long term, which we believe will extend our lead and accelerate the pace of capturing the market opportunity and creating value for shareholders.

Speaker Change: Yeah.

Speaker Change: Got it appreciate that that's helpful and just maybe a broader question you mentioned the 20%.

Speaker Change: We increase our non-dap operating margin every year since our IPO while driving significant growth. With our proven strong-cast generation and balance sheet, we are well capitalized to strategically put resources behind these top priorities that we believe solidify and extend our leadership.

Speaker Change: Kind of a long term goal of AD valorem payments revenue.

Speaker Change: I hear the commentary on that's how you'll be kind of communicating advances.

Speaker Change: Monetization going forward just to help us think about.

Speaker Change: How we should how we should think about the monetization of those volumes.

Operator: And now we'll open up the call for Q&A. If you would like to ask a question, please press star followed by one on your telephone keypad. To remove your question, press star followed by two. And if you are using a speaker phone, please pick up your handset before asking your question.

Speaker Change: And just sort of how the mix of payment methods.

Speaker Change: And it may impact the ultimate take rate that you get on that 20% of volumes.

Speaker Change: Yes, sure it's a good question.

Speaker Change: I'd say there is a number of investments that we're making near term to improve existing product experiences drive payment speed improved reconciliation of those things, which I think will help.

William Nance: Our first question then comes from William Nance with Goldman Sachs.

John Rettig: Your line is not open. Hey guys, I appreciate you taking the question here. Maybe I'll start on the the FI channel renewal that you mentioned. John, I think you called out that the RPO may remain similar but spread over over additional years. Could you just maybe unpack what that means in terms of just the quarterly subscription revenues from the embedded solutions part of the business and just how you're thinking about that. I know that it's taken a step down when you're initially contemplated changes. So how will that flow through the numbers with the coming year?

Speaker Change: Spanned volumes and monetization associated with products that we are already offering customers and suppliers and those are relatively short term initiatives. In addition to that we see card payments generally being a larger part of the payment mix in the bill portfolio of payment products. So beyond what we do.

Speaker Change: With spend and expense and things like that and so across.

Speaker Change: Across all of our payment products as we see that mix evolving we sort of view that 20% as more of a floor to where we're going to be able to take monetization longer term and we feel really good about the levers that we have and frankly the value proposition that we're offering for both buyers and suppliers with this mix of payment.

John Rettig: Yeah, thanks for the question. We are RPO as of the end of the year is about $87 million and there's a meaningful percentage of that by the large FI partner that we talked about throughout the year where we have finalized the contract amendment. And the RPO is consistent for that particular customer as as where we had ended the year. And instead of one year left on the contract, we've extended it for three years.

Speaker Change: Alex.

Speaker Change: Yeah.

Got it appreciate you taking the questions.

Alex: You bet.

Speaker Change: Our next question comes from Tien Tsin Huang with Jpmorgan.

Line is now open.

Speaker Change: Okay, great. Thanks, so much just thinking about these investments here how quickly do you expect to spend $45 million what kind of.

John Rettig: So we recognize in that revenue over four years. And in addition to that, we're obviously marrying our embedded strategy with our financial institution partners as well making available our newest APIs to support the bank and their new program and working with them in any way we can to help drive success there. So that's the kind of the extent of the moving parts on the numbers is really not much change from the ending RPO. I appreciate that. That's helpful.

Return or payback do you expect that hurt the 20% core growth in.

Speaker Change: In 2006, but.

Speaker Change: Just curious what else we can.

Speaker Change: Build off of that and then just to also clarify are these new investments driven by new opportunities or is it driven by competitive changes or is this just a catch up in spending from a period of pause.

Speaker Change: Given the macro uncertainty left two three quarters.

Speaker Change: Thanks, Tien Tsin, Great question, let me just give some background first I mean, we.

Speaker Change: We believe our category leadership and scale are critical for the long-term growth and profitability of Bill.

John Rettig: And just maybe a broader question you mentioned the 20% you know kind of long term goal of at the law and payment revenue. I hear the commentary on that's how you'll be kind of communicating advances in monetization going forward. Just to help us think about how we should think about the monetization of those volumes and just sort of have a mix of payment methods may impact the ultimate take rate that you get on that 20% of volumes.

Speaker Change: We made a we saw a shift in kind of what was happening in the market. We adapted quickly very agile and the team delivered exceptional results throughout the rest of the year. So that would have that obviously ended last calendar year, and we had great results through the fiscal year and seeing the efficiency that we're able to drive and if you just think about the high <unk>.

Speaker Change: Our operating income less flow grew 750% over $31 million or so from last year increase in so just giving you my perspective seeing the strength that we're able to drive and then seeing the innovation opportunities again, just more context like we've defined this category and that Bill we're all a bunch of lead.

John Rettig: Thanks. Yeah, sure. It's a good question. I'd say there's a number of investments that were making near term to improve existing product experiences drive payment speed improve reconciliation and those things which I think will help expand volumes and monetization associated with products that we are already offering customers and suppliers and those are relatively short term initiatives. In addition to that we see card payments generally being a larger part of the payment mix in the bill portfolio of payment products so beyond what we do with with spend and expense and things like that.

Speaker Change: We are planning offense strategically with our strong balance sheet to prioritize the long-term potential of our business.

Speaker Change: There's an meters don't wait.

Speaker Change: Not going to be a market CAGR, we're going to be a market maker and when we see and interact with our customers whether they are direct customers account customers, our ecosystem partners or suppliers in our network or large larger suppliers, we hear and understand there's opportunities to expand that the value that we're providing them and so that's the reason.

Speaker Change: That's because we feel really good about what the team is executing on and the ability for us to deploy capital to drive growth really is I think how I would define everything that we've done is we've been defining this category from day, one and we're going to continue to do that and.

John Rettig: And so across you know across all of our payment products as we see that mix evolving we sort of view that 20% as more of a forward to where we're going to be able to take monetization you know longer term. And we feel really good about the levers that we have and frankly the value proposition that we're offering for both buyers and suppliers with this mix of payment products. I appreciate you taking the question.

Speaker Change: How we're doing that as we have kind of four specific areas that we're investing in the first one I would say is that we are enhancing and expanding the value proposition for our existing solutions.

Operator: You bet.

Speaker Change: You think about.

Speaker Change: International payments, we started some local transfer capabilities, we're going to roll that out John already referenced that we're going to expand card usage across the platform, we're going to get folks more opportunities to leverage the car.

Tencent Huang: Our next question comes from Tencent Huang with JP Morgan. He lives now open. Hey, great. Thanks so much. I'm just thinking about these investments here. How quickly do you expect to spend the 45 million? What kind of return or pay back? Do you expect that heard the 20% core growth in 26? But just here as well as we can build off of that. And then just to also clarify, are these new investments driven by new opportunities? Or was it driven by competitive changes? Or is it just a catch-up in spending from a period of pause given the macro uncertainty last two to three course? Thanks. Thank you, Jen.

Speaker Change: And then when you.

Speaker Change: As we do this, we are keenly focused on capital allocation and balancing investments in the business with your turn of capital to shareholders.

John: The next thing the second thing I would say is that we're going to augment the experience and go to market for suppliers. What we started doing again to halfway through the year was having dedicated teams that talk to suppliers that have a significant volume on the platform. We have learned a time theres a lot of opportunity for us to create more value for them better reconciliation.

John: More automation, even leveraging AI across the experience that they have and that's what we're hearing and that's what we're developing and thats, where we want to invest.

John: Then on the third thing that we're going to invest and it's going to be deepening our accounting relationships. We have defined an entirely new line of business for accounts and we've worked with CPA dot com the AICPA to create client advisory services cast practices and you heard a quote from <unk> and in <unk>, they're talking about how they saw.

Renee Lizert: Great question. Let me just get some background first. I mean, we made a, we saw a shift in kind of what was happening in the market. We adapted quickly, very agile and the team delivered exceptional results throughout the rest of the year. So that would have been obviously the end of the last calendar year. And we had great results through the fiscal year and seeing the efficiency that we were able to drive.

Speaker Change: Today, we announced that the board authorized a new $300 million share repurchase program. This reflects the confidence that the board, management team, and I have in our strategy and in Bill as an investment opportunity with significant upside.

Speaker Change: We are deeply committed to our success and committed to taking actions that deliver value.

Speaker Change: <unk> at 14 years ago with no customers onto the <unk> platform and now have over 500, but when you have 500 customers. How you manage support those customers becomes a lot more challenging and so we have an opportunity to actually provide cash flow insights and strategic advisory services through the platform. We have we have an opportunity to create efficiency for the accounts and how they match.

Renee Lizert: And if you just think about, you know, the high level, our operating income less flow grew 750%. You know, over $31 million or so from last year's increase. And so just giving you, in my perspective, seeing the strength that we were able to drive and then seeing the innovation opportunities, again, you know, just more context like we've defined this category. And at Bill, we're all bunch of leaders. And leaders don't wait.

Speaker Change: Their clients and we have an opportunity to create better customer experiences around multi entities since many of their clients have that and so we're investing behind that and the fourth and final area of investment is driving expansion of our ecosystem and this is what we've done from the very beginning we really believe that the ecosystem is a critical part of our platform and our strategy.

Speaker Change: We are all in for SMBs, and we are all in to win the market that we created.

Renee Lizert: You know, we're not going to be a market takeer. We're going to be a market maker. And when we see and interact with our customers, whether they're direct customers, accountant customers or ecosystem partners or suppliers in our network or large, you know, larger suppliers, we hear and understand there's opportunities to expand that, you know, the value that we're providing them. And so that's the reason to invest because we feel really good about what the team is executing on.

Speaker Change: I'd like to thank our customers and partners for the continued trust that they've placed enough.

Speaker Change: And what we're going to be doing is investing in go to market resources, we're going to be investing in advancing our API and I think when you see what we're able to do with zero roughly.

Speaker Change: And I also want to thank our employees for their constant dedication to serving SMBs and each other.

Speaker Change: Roughly six months, when we announced we were able to go to beta.

John: That's something that we're super proud of and we know there is an opportunity in the market. That's the DMR. So I'll, let John maybe answer the rest of your question there and go from there sure just adding to the part of your question about pacing, we're expecting it to be spread throughout the year, a little bit more frontloaded than not.

Speaker Change: Now, I'll turn the call over to John.

Renee Lizert: And the ability for us to deploy capital drive growth really is, I think how I would define everything that we've done is we've been defining this category from day one. And we're going to continue to do that.

John Rettig: Thanks, Renee.

Speaker Change: During fiscal 2024, we acted decisively when cyclical headwinds caused moderated B2B spend and a shift in payment method preferences. We responded quickly by adapting our go-to-market initiatives, improving product experiences, and working diligently with partners.

Renee Lizert: And how we're doing that is we have kind of four specific areas that we're investing in. The first one I would say is that we are enhancing and expanding the value proposition for our existing solutions. So if you think about, you know, international payments, you know, we started some local transfer capabilities. We're going to roll that out. John already referenced that we're going to expand car juices across the platform. We're going to give folks more opportunities to leverage the car.

Speaker Change: As we as we look at the impact of these investments plus the ongoing improvements, we're making to our platform efficiency, we're driving with go to market and things of that nature, we expect to be able to increase our revenue growth rate in 2006 as I as I mentioned earlier and that's really the beginning phase of growth expansion.

Speaker Change: We focused our resources and execution on our most important priorities and proactively adjusted operating expenses to improve profitability.

Speaker Change: These actions enabled us to improve customer acquisition and stabilize payment monetization, enhance profitability, and position bill for continued market leadership.

Speaker Change: In fiscal 2024, we delivered 22% revenue growth, 196 million in non-gap operating income for a non-gap operating margin of 15%, and 258 million in free cash flow.

Speaker Change: In addition, we delivered 31 million in non-gap operating income, excluding float revenue, compared to 4 million a year ago.

Speaker Change: During fiscal 24, we repurchased 212 million in common stock and retired 983 million in aggregate principal amount of our 2025 convertible notes. These actions contributed to our full year of fiscal 2024 weighted average diluted share count declining by 2% year over year.

It's not the end goal that we have it's not just 26, it's multiyear.

Speaker Change: In addition, and most importantly, in fiscal 24, we strengthened our foundation for the future.

Renee Lizert: And then, you know, when the next thing, the second thing I would say is that we're going to augment the experience and go to market for suppliers. What we started doing, again, you know, halfway through the year was having dedicated teams that talk to suppliers that have significant volume on the platform. We've learned a ton. There's a lot of opportunity for us to create more value for them, better reconciliation, more automation, even leveraging AI across the experience that they have. And that's what we're hearing and that's what we're developing and that's where we want to invest.

Speaker Change: Multi year improvements in our growth rate as evidenced by some of our investments as Rene mentioned, particularly on the embedded platform. Both the technology and our go to market capabilities. There. That's a multi year time horizon that we view as driving growth and.

Speaker Change: We have a clear vision and strategy centered around the needs of SMBs, and we are executing to capture the large market opportunity ahead of us.

Speaker Change: We are laser focused on driving long-term shareholder value through strong profit and free cash flow generation while optimizing our capital structure.

Speaker Change: Now, on to a few highlights of our fiscal Q4 results. We delivered against our goal of profitable growth. In Q4, total revenue was 344 million, up 16% year over year. Core revenue, which includes subscription and transaction fees, was 301 million, also up 16% year over year.

Speaker Change: And at the same time, we do expect beginning in FY 'twenty, six and beyond to be expanding profitability more so than we've seen in FY 'twenty five as we're pulling forward some of those investment dollars and just one more thing I would add is yes.

Renee Lizert: And then on the third thing that we're going to invest in, it's going to be deepening our accounting relationships. We have defined an entirely new line to business for accounts. We've worked with CPA.com and the ACPA to create client advisory services, cast practices. You heard a quote from Acrio and Amber are there talking about how they started 14 years ago with no customers on the bill platform and now have over 500.

Speaker Change: The conviction that both John and I have is so strong that when the market opens up we're going to be buying shares as well as the company is doing.

Yes, it's all clear.

Speaker Change: Quote revenue was 19 million, and increased more than 200% year over year.

Renee Lizert: But when you have 500 customers, how you manage to support those customers becomes a lot more challenging. And so we have an opportunity to actually provide cash flow insights and strategic advisory services through the platform we have. We have an opportunity to create efficiency for the account and how they manage their clients. And we have an opportunity to create better customer experience around multi entities since many of their clients have that. And so we're investing behind that.

That comment.

Speaker Change: Thank you both answered it really well just really quickly to clarify Renee it sounds like I think you mentioned these are offensive not defensive investments just wanted to clarify that.

Renee: Absolutely. We're all about offense, we have defined the category, we see other people following us and then playing catch up and we're going to keep widening the gap that we have because that's the advantage that customers needed because the customers need innovation Smbs are innovating every day in each of their businesses and they need to count on somebody to innovate.

And that's what they do with us so.

John Rettig: And the fourth and final area of investment is driving expansion of our ecosystem. And this is what we've done from the very beginning. We really believe that the ecosystem is a critical part of our platform and our strategy. And what we're going to be doing is investing and go to market resources. We're going to be investing in advancing our APIs. And I think when you see what we're able to do with zero, roughly six months from when we announce we're able to go to beta, that's something that we're super proud of. And we know there's an opportunity in the market for us to be more. So I'll let John maybe answer the rest of your question there and go from there.

Renee: So I think it's super important and we're going to continue to do that when we see opportunities.

Speaker Change: Turning the updates on our key solutions, Bill's standalone revenue was 161 million in Q4, up 8% year over year.

Thank you Renee and thank you John.

Renee: Thank you.

Speaker Change: Our enhanced go-to-market initiatives drove higher customer acquisition. We added 4,600 net new customers in our direct and accounting channels.

Renee: Our next question comes from Andrew Smith with Citigroup.

Speaker Change: In our financial institution or FI channel, we added 6,700 net new customers.

Speaker Change: Your line is now open.

Speaker Change: The annual customer retention rate of Bill's standalone customers, which excludes FIs, was a healthy 83%. Excluding the impact of the sunset of into its simple bill pay earlier in the year, customer retention was 86%, consistent with levels over the past several years.

Speaker Change: Okay.

Andrew Smith: Hey, John Thanks for taking my questions.

So I wanted to drill down just on the environment for our supplier acceptance, maybe John you got some comments, but maybe you could put a finer point on what you saw in the fiscal fourth quarter and into FY 'twenty five and then maybe just to tag on to that.

Speaker Change: Bill's standalone subscription revenue, excluding FI partners, increased 7% year over year in Q4.

Speaker Change: Overall, Bill's standalone subscription revenue declined 1% from last year, which reflects changes in our FI channel. Bill's standalone transaction revenue grew 14% year over year.

Speaker Change: TPV in Q4 was up 9% over a year ago, in line with recent quarters.

John Rettig: Sure, just adding to the part of your question about pacing. We're expecting it to be spread throughout the year. A little bit more front loaded than than not. And as we as we look at the impact of of these investments plus the ongoing improvements we're making to our platform efficiency we're driving would go to market and things of that nature. We expect to be able to increase our revenue growth rate in in 26 as I as I mentioned earlier.

Speaker Change: Monetization or take rate exceeded our expectations that we set in Q1, as we scaled newer payment offerings and enhanced existing products.

Andrew Smith: No.

Speaker Change: <unk> put some supplier enablement teams in place.

Speaker Change: At or better manage the supply relationships, maybe your early reads on that and what Youre seeing in terms of it acceptance when you have kind of pushed a little bit deeper on those relationships.

Speaker Change: Anything on those two fronts would be helpful. Thanks, so much.

Speaker Change: Well, yes, thank you Andrew.

Speaker Change: Fender cost sensitivity on some of our higher monetization products persisted, which impacted TPV penetration rates.

John Rettig: And actually the beginning phase of growth expansion. It's not the end goal that we have. It's not just 26. It's multi-year multi-year improvements in in our growth rate. As evidenced by some of our investments as Renee mentioned particularly on the embed platform both the technology and our go-to market capabilities there. That's a multi-year time horizon that we we do as driving growth. And at the same time we do expect beginning an FY26 and beyond to be expanding profitability more so than than we've seen in FY25 as we're pulling forward some of those investment dollars.

Speaker Change: First thing I would say is as we talk to suppliers is not going to be a surprise, but they don't want checks. They really don't want checks, we have a tremendous amount of volume that we drive through our platform they like getting electronic payments, but they need more help in reconciliation and they need more help in automating all the things that are coming from bill and so as we talk with suppliers. We're here.

Speaker Change: In Q4, instant transfers 1% of Bill's standalone TPV, while virtual cards were 2.9%, and cross-border payments were 4.5%. Foreign currency payments represented 34% of total cross-border payment volume in the quarter.

Speaker Change: These penetration rates were slightly lower compared to a year ago, as their overall suite of payment offerings expanded and vendors optimized their cost of acceptance.

Speaker Change: As of June 30th, 2024, our dollar-based net revenue retention rate for Bill's standalone was 92%. As expected, this was impacted by the lower spend environment, which impacted payment volume, payment choice, and subscription fees during the year. Excluding the impact of a large FI partner contract amendment, our dollar-based net revenue retention rate was 96%.

Speaker Change: We expect this to be above 100% as we continue to roll out new offerings and the economy returns to growth mode for SMBs.

Speaker Change: As a reminder, our dollar-based net revenue retention rate excludes the impact of our spend and expense offering. Moving on to Bill's spend and expense, formerly known as Divi, spend and expense revenue totaled 126 million in Q4, up 26% year over year, driven by 28% card payment volume growth. Interchange fees were 261 basis points.

Speaker Change: Being that loud and clear and we're putting R&D dollars as well as go to market dollars around creating services for them. So that they actually have a different experience than just not at the receiving end, they're engaging with us I think one of the examples that we think about it we have a tremendous amount of volume that goes to you on that.

Speaker Change: We added 1,300 net new spending businesses which was in line with our expectations as we are focusing on businesses with a higher propensity to spend.

Speaker Change: The war is 48% of spend and expense revenue.

John Rettig: And just one more thing I would add is the conviction that that both John and I have is so strong that when the market opens up we're going to be buying shares as well as the company is doing. Yeah I know that's all clear. Second fact that comment. No, I think you both answered it really well. Just fully quickly to clarify, Renee, it sounds like I think you mentioned these are all senses that defensive investments just wanted to clarify that.

Speaker Change: But theres very poor reconciliation on these transactions and the ability for suppliers to kind of take those transactions and have an experience where they can obviously understand but the payments are attributed to potentially collaborating with their customers, which would be our customers. All of these things or something they want and we see an opportunity to drive value there.

Speaker Change: A product we have in market today, but I'm just giving you. An example of the learning that we have that's going on right now that gives us the confidence that there is an opportunity to create more value for suppliers to keep them really doing their business job better and to keep us serving our customers better.

John Rettig: Absolutely. We're all about offense. We have defined the category. We see other people following us and then playing catch up and we're going to keep widening the gap that we have because that's the advantage that customers need. The customers need innovation. SMBs are innovating every day in each of their businesses and they need to count on somebody to innovate and that's what they do with us. So I think it's super important and we're going to continue to do that when we see opportunities. Thank you, Renee. Thank you, John. Thank you.

Andrew Schmidt: Our next question comes from Andrew Schmidt with Sacred.

Speaker Change: The customer value proposition of leveraging an expanded suite of platform capabilities is resonating with SMBs.

Speaker Change: The number of joint customers who use both Bill AP and spent an expense in Q4 increased to 11,500 at the end of fiscal 2024, reflecting an increase of nearly 60% compared to a year ago.

Speaker Change: Joint customers are stickier and show strong engagement as reflected in low attrition rates and strong net dollar-based revenue retention compared to other customers.

Speaker Change: Got it. Thank you so much for that Renee.

Speaker Change: John I think you had some comments on stabilization.

Speaker Change: Our portfolio of payment offerings creates multiple avenues to drive ad-volarm payment adoption and penetration.

John: Maybe you can talk about this.

John: Just more broadly your thoughts on the macro environment heading into FY, 'twenty, five and how that might translate into things like CPP per customer. Thank you very much.

Speaker Change: On a company level, our ad-volarm penetration excluding FIP payment volume was 14% in Q4 up from 13% a year ago.

Speaker Change: As our integrated solutions converge, we will provide a consolidated ad-volarm payment rate as opposed to individual solution rates on an annual basis.

Andrew Schmidt: Your line is not open. Hey, Renee. Hey, John. Thanks for taking my question. So I want to drill down just on the environment for supplier acceptance. Maybe I know John needs some comments, but maybe to put a finer point on what you saw in the fiscal fourth quarter and into FY25. And then maybe just a cab on to that. I know you put some supplier enablement teams in place that are better managed by relationships.

John: Yes, Thanks, Andrew.

John: We've seen pretty consistent behaviors on the part of small businesses over the last few quarters, you've seen that play out in.

Speaker Change: We believe that over the long term, our portfolio of ad-volarm products can be above 20% of our XFI GPB.

Andrew Schmidt: Maybe early reads on that and what you're seeing in terms of the acceptance when you have kind of, you know, pushed a little bit deeper on those relationships. Anything on those two fronts would be helpful. Thanks so much. Well, yeah, thank you, Andrew. The first thing I would say as we talk to suppliers is not going to be a surprise, but they don't want checks. They really don't want checks. We have a tremendous amount of buying that we drive through our platform.

Speaker Change: Moving on to financial highlights, non-gap growth profit in Q4 was 292 million, up 14% year over year, and non-gap growth margin was 85%.

Speaker Change: In our <unk> per customer numbers being pretty consistent.

Speaker Change: I'll be down 1% up 1%, but in that same range.

Speaker Change: Obviously, our overall <unk> growth.

Speaker Change: For the last couple of quarters, there's been a little bit ahead of our expectations.

Speaker Change: We're expecting a similar environment throughout FY 'twenty five I think.

Speaker Change: This stability is.

Speaker Change: It's showing up in engagement, where you have very healthy transactions per customer saw a slight uptick in that in the fourth quarter, but still slightly lower dollars per transaction for small businesses was reflective of the environment that everyone's operating in so we feel we feel good about the stability and we're not.

Speaker Change: Our strong business model enables us to consistently deliver a growth margin that is among the best in class for software and FinTech companies.

Speaker Change: We continue to demonstrate our ability to drive leverage in our business. Non-gap operating income for Q4 was 60 million, up 42% year over year, representing a 17% non-gap operating margin and an expansion of three points year over year. Non-gap net income was 64 million, reflecting a 19% margin.

Andrew Schmidt: They like getting electronic payments, but they need more help from reconciliation and they need more health and automating all the things that are coming from Bill. And so as we talked with suppliers, we're hearing that loud and clear and we're putting R&D dollars as well as good market dollars around creating services for them so that they actually have a different experience. So that's just not out the receiving end. They're engaging with us.

Speaker Change: Embedded in our assumptions for expectations in FY 'twenty, five assuming any rapid rebound in <unk> spending or the flip side any deterioration in and the current level of activity.

Speaker Change: Got it thank you very much John.

Speaker Change: Thank you.

Andrew Schmidt: I think one of the examples that we think about is we have a tremendous amount of buying that goes through on the ACH, but there's very poor reconciliation on the ACH transactions. And the ability for suppliers to kind of take those transactions and have an experience where they can obviously understand what the payments are attributed to, potentially collaborating with their customers, which would be our customers. All these things are something they want and we see an opportunity to drive value there.

Speaker Change: Our next question comes from Scott Berg with Needham <unk> Company your.

Your line is now open.

Speaker Change: Hi, My name's, John Nice quarter here I guess, a couple of questions I think it was in.

Speaker Change: <unk> please.

Speaker Change: Pre scripted remarks about the supplier financing.

Speaker Change: I guess can you help maybe quantify kind of what youre seeing there early on and they just recently.

Speaker Change: The product.

Renee Lizert: And that's not a product we have in market today. But I'm just giving you an example of the learning that we have that's going on right now that gives us the confidence that there's an opportunity to create more value for suppliers, to keep them really doing their business job better and to keep us serving our customers better. God, thank you so much for that, Renee.

Speaker Change: It seems to be a part of your Reacceleration story and with fiscal 'twenty six I guess, how do we maybe set expectations around the impact on the business.

Speaker Change: Thank you Scott for the question I think.

Speaker Change: Invoice financing is just another example of innovation that we're bringing to the market and we have a unique set of data and scale. When you think about what we have with scale. It just makes us a learning machine. We have so much data across the platform. So many opportunities for us to leverage that for our customers and what we're seeing in invoice financing is it's early days and there's lots of.

John Rettig: And John, I think you had some comments on stabilization. Maybe you can talk about just more broadly your thoughts on the macro environment having a network 25 and how that might translate into things like PPB for customer. Thank you very much. Yeah, thanks Andrew. We've seen pretty consistent behaviors on the part of small businesses over the last few quarters. You've seen that play out in our TPB per customer numbers, being pretty consistent, maybe down 1% up 1%, but in that same range, obviously our overall TPB growth for the last couple of quarters has been a little bit ahead of our expectations.

Speaker Change: Lots of work for us to do around kind of the modeling and risk profiles and stuff like that but what we're seeing is customers want it and they use it again and again and so what we will continue to do is to refine the experience they have to refine the backend system. So that we can roll this out more broadly.

Speaker Change: And I think it's going to be one of the important drivers of our expansion of AD valorem revenue as we go forward into 2006 and beyond.

Speaker Change: Got it helpful. And then you also need to comment on the number of customers using both the AP and the spin.

John Rettig: And we're expecting a similar environment throughout FY 25. I think their disability is showing up in engagement. We have very healthy transactions for customers, slight uptick in that in the fourth quarter, but still slightly lower dollars per transaction for small businesses was reflective of the environment that everyone's operating in. So we feel good about this ability and we're not embedded in our assumptions for expectations in FY 25, assuming any rapid rebound in B2B spending or the flip side any deterioration in the current level of activity. Thank you. Got it. Thank you very much John.

Speaker Change: <unk> expense solutions, it's up roughly 60% year over year is now that the over the last year the products have been properly integrated and combined is I guess.

Operator: Thank you.

Is there anything that you can take away from those customers outside of better retention rates is there any examples where one plus one equals more than two words that simply just a one plus one equals better retention rates overtime.

Speaker Change: That's definitely one plus one is more than two I mean were getting obviously the retention makes that true, but I think we're also getting more usage across the platform. There's more opportunities we've talked about the opportunity across.

Speaker Change: Our platform to continue to extend.

Speaker Change: Proliferation, if you will of card payments that comes from all the capabilities. We have with the platform that was formerly known as <unk> that is now our spend and expense platform. So thats an area.

Speaker Change: Stock-based compensation in Q4 was 17% of total revenue, down from 20% a year ago. Weighted average deluded shares declined by 5.6 million or 5% year over year, primarily due to our initiatives to repurchase shares and convertible notes during the year.

Scott Berg: Our next question comes from Scott Berg with Needham and Company.

Scott Berg: Your line is not open. I have an angi on this quarter here. I guess a couple questions. I think it was in Renee Prescripted remarks about the supplier financing. I guess can you help maybe quantify kind of what you're seeing there early on in the industry? So you know, we can release the product and that seems to be a part of your re-acceleration story in the fiscal 26. I guess how do we maybe set expectations around the impact on the business?

Speaker Change: And I think maybe a high level.

Speaker Change: Area to think about that we see is that the proliferation of all these different software and Fintech solutions is actually driving in the market at need for more consolidation and unification of platforms and so when you think about what we are able to provide customers today from financial operations perspective, we give them the best World class.

Speaker Change: Turning to remaining performance obligations or RPO, as Renee discussed, we amended our existing agreement with a top three bank in the US by extending it for an additional three years. The RPO associated with this partner remain consistent, but is now spread out over approximately four years, causing a shift in timing to fulfill the RPO. We also expanded the products that available under this agreement to include our newest APIs consistent with our embedded strategy.

Speaker Change: Moving on to capital allocation, we continue to optimize our capital structure. In Q4, we repurchase 234 million in aggregate principal amount of our 2025 convertible notes, resulting in cash usage of 222 million and a reduction in non-gap deluded share count of 0.4 million weighted shares. The repurchase of these notes resulted in an $11 million net benefit to other income and expenses, which is reflected in our gap results, but excluded from our non-gap results.

Speaker Change: We are well-capitalized with 1.6 billion in cash, cash equivalents, and short-term investments.

Speaker Change: <unk> solution, we can indeed, that's world class S knee solution, we're giving them the best cash flow insights and forecasting capabilities. These are things that we add into the platform that continue to create more value for the customer experience across their portfolio of ours and something that we're excited about so I think the main thing is we do think one and one is going to be.

Speaker Change: Shifting to our outlook, as we enter fiscal 2025, we've never been better positioned to capitalize on the opportunity to further penetrate the market and help SMB succeed.

Speaker Change: Our solutions are a critical part of their daily operations and give them the industry's best tools to better run and grow their business.

Renee Lizert: Thank you, Scott, for the question. I think, you know, invoice financing is just another example of innovation that we're bringing to the market. You know, we have a unique set of data and scale when you think about, you know, what we have with scale. It just makes us a learning machine. We have so much data across the platform, so many opportunities for us to leverage that for our customers. And what we're seeing in voice financing is it's early days and there's lots of lots of work for us to do around kind of the modeling and risk profiles and stuff like that.

Speaker Change: We are confident that the strong and growing customer value proposition of our platform and ecosystem positions bill for continued long-term growth and leadership, which will in turn deliver value to our shareholders.

Speaker Change: We believe maintaining a dynamic balance between growth and profitability is essential for long-term business success.

Speaker Change: With our strong execution capabilities and the market opportunity ahead of us, we are strategically investing for growth acceleration and extension of our category leadership while delivering attractive margins across our business lines.

Speaker Change: Far greater than two.

Speaker Change: We generate significant free cash flow and have a strong balance sheet, which enables us to invest which we do with purpose and discipline. We have a unique business model that includes float revenue, which we view as a key competitive advantage from which we generate significant free cash flow. These factors enable us to accelerate our pace of investments opportunistically, as well as fund longer-term opportunities.

Speaker Change: Excellent thanks for taking my questions.

Speaker Change: We view our board-authorized share repurchase program, where we will be deploying 300 million to buy bill shares in the open market, as both a great investment opportunity, as well as an indication of our optimism for the future.

Scott Berg: Thank you Scott.

Sam Matsumoto: Our next question comes from some Matsumoto with Jefferies. Your line is now open.

Speaker Change: As Renee discussed, in fiscal 2025, we will be making a number of targeted investments that accelerate our strategic priorities and our ability to capture the large greenfield market opportunity that we are pursuing. We believe these investments position us to deliver significant sustainable revenue growth and margin expansion over many years, but will moderate our profitability growth in the near term.

Renee Lizert: But what we're seeing is customers want it and they use it again and again. And so what we will continue to do is to refine kind of the experience they have, to refine, you know, the backend systems so that we can roll this out more broadly. And I think it's going to be one of the, you know, important drivers of our expansion of outdoor revenue as we go forward into the 26 and beyond.

Sam Matsumoto: Great. Good evening, Thanks for taking my questions first maybe the.

Speaker Change: We operate our business with the objective to be explode profitable on a non-gap basis and to generate significant free cash flow.

Speaker Change: 20% growth comment for 2020, our fiscal 'twenty six.

Really encouraging and especially as you think about the stabilization that you've highlighted that bar.

Speaker Change: We intend to scale both over time on the road to becoming gap profitable.

Speaker Change: For you.

Speaker Change: <unk> or John but as you guys think about the building blocks to that 20% how much of that is re accelerating existing pieces of the business and getting new customer acquisition of fire again, and getting more adoption of AD valorem versus new revenue streams that youre anticipating that the investments you called out are going to drive can you just maybe.

Renee Lizert: We've got it helpful. And then you both need to comment on the number of customers using both AP and send and expense solutions with up roughly 60% year over year is, you know, now that the over the last year, the products have been properly integrated and combined is, I guess. Is there anything you can take away from those customers who have set a better retention rates? Is there any examples where one plus one equals more than two words that simply just the one plus one equals better retention rates over time?

Speaker Change: Help us understand how much you already have line of sight to you versus what has to has to be blocked and tackled over the next year.

Speaker Change: That's a great question, it's not in one of the things I've learned over the last three decades ranked businesses that you've got a kind of a balancing act between obviously, what you've got and what you want.

Renee Lizert: That's definitely one plus one is more than two. I mean, we're getting obviously the retention makes that true. But I think we're also getting more usage across the platform. There's more opportunities. We've talked about the opportunity, you know, across, you know, our platform to continue to extend the proliferation, if you will, of card payments. That comes from all the capabilities we have with the platform that, you know, was formally known as Divi, that is now our spending expense platform.

Speaker Change: And so what we're doing is actually a balancing act there is definitely more clarity across the business as we consolidated the organizations and the teams really aligned about what drives the results on the existing business, but we also had that same clarity being driven around the innovation teams across the company and so I think it's a reasonably good balance between the two.

Speaker Change: And we're going to always invest.

Speaker Change: We serve customers with what we have but we're also going to invest to innovate and so we're balancing that maybe one other area of investment that I Didnt call out earlier that I think it's important for folks to know is that we.

Renee Lizert: So that's an area. You know, and I think, you know, maybe a higher level, you know, area to think about that we see is that the proliferation of all these different software and then tech solutions is actually driving in the market and need for more consolidation and notification of platforms. And so when you think about what we are able to provide customers today from financial operations perspective, we give them the best world class AP solution.

Speaker Change: We talked about this we're highly committed to being highly profitable and part of the investment as we have a lot of internal tools. This is a big company now.

Speaker Change: Brian and money movement over the last five years to over 300 billion of year. We've got teams in multiple countries that support customers they need tools and capabilities to continue to drive efficiency and scale and we're going to invest behind that because that's the right thing to do for the long term growth of the business.

Renee Lizert: We're giving them the best cash flow insights and forecasting capabilities. These are things that we add into the platform that continue to create more value for customer experience across their portfolio usage of ours. And it's something that we're excited about. So I think the main thing is we do think one and one is going to be part greater than two.

Scott Berg: Excellent. Thanks for taking my questions.

Speaker Change: Great and then John maybe just to follow up on the on the NRI.

Scott Berg: Thanks, Scott.

John: I appreciate the disclosure on what it would have been ex the top three bank. So I was just wondering if you could maybe help us understand from where it was last year to this year that I think 111 to 96, how much of that was due to PPV contraction in the installed base versus down selection of payment type just trying to understand.

Samad Samana: Our next question comes from Samad Samana with Jeffries.

Samad Samana: The line is not open. Great, good evening. Thanks for taking my questions. First, maybe the, you know, the 20% growth comment for 2020 or fiscal 26 is really encouraging and especially as you think about the stabilization. That you've highlighted so far. This side for you, you Renee or John, but as you guys think about the building blocks to that 20% how much of that is re accelerating existing pieces of the business and getting new customer acquisition of fire again.

Speaker Change: The mechanics of maybe what drove the contraction portion of it and how we should think about the shape of that going forward.

Speaker Change: For fiscal 2025, we will be making incremental investments in our most important initiatives of approximately 45 million throughout the year. We believe now is the right time to invest, as we have seen signs of stabilization in the macro environment and continued strong business momentum from the actions we took last year. After holding headcount flat for the last three quarters, we are now hiring additional talent in our R&D and go-to-market teams.

Speaker Change: Yeah. Thanks for the question some odd.

Speaker Change: Most of the change on a year to year basis was really driven by the lower TV TPB from the spend environment that our SMB customers are operating in which obviously translates into lower transaction revenue growth, which is a significant contributor to.

Speaker Change: We expect our initiatives and investments today will position bill to deliver core revenue growth of 20% or greater in fiscal 2026.

Speaker Change: To that retention dynamic.

The second thing is probably the.

Speaker Change: The midpoint of our full year guidance reflects a slight increase in non-gap operating income on an explode basis despite additional planned investments and increased rewards expenses as our spend and expense solution scales. We are prudently managing our expenses while investing for growth.

Samad Samana: And getting more adoption of ad ballorum versus new revenue streams that you're anticipating that the investments you call that are going to drive. Can you just maybe help us understand how much you already have one aside to versus what has to has to be kind of blocked and tackled. That's a great question to mod and you know, one of the things I've learned over the last three decades right businesses that you've got to kind of have a bouncing act between, you know, obviously what you've gotten, what you want.

Speaker Change: The revenue associated with a large partner that we've talked about maybe to a lesser extent than TPB. Those two things combined though are the vast majority of the change on a year to year basis.

Speaker Change: As we accelerate revenue growth, we will also be continuing to create operating leverage.

Speaker Change: Things like that.

Number of users per customer in.

Variables like that are very small in the Grand scheme of.

Speaker Change: That retention number.

Speaker Change: Great. Thanks for the clarity I appreciate taking my questions.

Samad Samana: And so what we're doing is actually bouncing at there is definitely more clarity across the business as we consolidate the organizations and have, you know, the teams really aligned about what drives results on the existing business. But we also have that same clarity being driven around the innovation teams across the company. And so I think it's a reasonably good balance between the two and we're going to always invest to, you know, obviously serve customers with what we have.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Darrin Peller with Wolfe Research. Your line is now open.

Darrin Peller: Hey, guys. Thanks.

Darrin Peller: First question is just around go to market I mean, I saw you jumped like you said from a b.

Speaker Change: It was 7000 or so up to over 11000 cross sold customers.

Samad Samana: But we're also going to invest to innovate and so we were, you know, balancing that maybe one other area of investment that I didn't call out earlier that I think it's important for folks to know. Is that, you know, we're, we talked about this. We're highly committed to being highly profitable. And part of the investment is, you know, we have a lot of internal tools. This is a big company now, you know, it's a trillion dollars of money movement over the last five years to over 300 billion a year.

Speaker Change: By the end of last year this fiscal year.

Speaker Change: And so that's obviously showing good progress just maybe touch on the go to market or really the cross sell between.

Speaker Change: To build solutions and now the one more unified offering.

Speaker Change: At the time of our IPO, we discussed that our non-gap operating income margin could be 20% or more over the long term. Since then, we have quickly expanded our scale and demonstrated our ability to drive leverage in our business, and we see no obstacles to prevent us from achieving significantly higher margins over the long term.

Speaker Change: Now moving on to guidance.

Speaker Change: And really what if anything has changed what kind of what's the approach now.

Speaker Change: Our guidance assumes the macro and B2B spend environment remain consistent with recent quarters and that ad-valorem payment adoption and monetization rates increase modestly in the latter part of the fiscal year.

Speaker Change: Can you even accelerate that you'd really still have a long runway. When you look at the size of your customers versus what you've accomplished so far and I guess I'd just to add onto that the strategy on go to market on the financial side now the financial institutions and has that changed at all versus what we've seen a lot of focus on the accounting channel would be very successful just curious where the folk.

Speaker Change: For fiscal Q1, we expect total revenue to be in the range of 346 to 351 million, which reflects 13 to 15% year-over-year growth.

Samad Samana: We've got teams in multiple countries that support customers. They need tools and capabilities to continue to drive and efficiency and scale. And we're going to invest behind that because that's the right thing to do for the long term growth of the business.

Speaker Change: We expect core revenue to be in the range of 305 to 310 million in Q1, which reflects 15 to 17% year-over-year growth.

Speaker Change: Float revenue is expected to be 41 million in Q1, which assumes our yield on FBO funds will be approximately 470 basis points.

Speaker Change: On the bottom line, for Q1, we expect to report non-gap operating income in the range of 52 to 57 million in non-gap net income in the range of 53 to 57 million.

Speaker Change: We expect non-gap net income per diluted share in the range of 48 to 51 cents in Q1 based on a share count of 111 million diluted weighted average shares outstanding. As a reminder, our guidance for non-gap net income includes a non-gap provision for income taxes of 20%.

John Rettig: Great. And then John, maybe just to follow up on the NRR. I appreciate the disclosure on what it would have been X the top three bank. So I was wondering if you can maybe help us understand from it going where it was last year to this year, the, I think, 111 to 96. How much of that was due to TV contraction in the install base versus down selection of payment type, just trying to understand the mechanics of, of maybe what drove the contraction portion of it and, and how we should think about the shape of that going forward.

Speaker Change: This is on the financial institution side too guys.

Scott Berg: Thank you Scott.

Scott Berg: Got it.

Speaker Change: So good question Darren I would say on the go to market.

Roche: Roche when it comes to cross selling.

Speaker Change: Use a framing that I've always had in driving business success, it's kind of a wash rinse repeat like you innovate then you're adapting and learning and then innovate again and so when we pull together the platforms. We have the organizations lined up the go to market is going to be obviously, it's going to be iterative and what we're learning from customers as we have more and more tests.

John Rettig: Yeah, thanks for the questions, Samad. Most of the change on your to your basis is really driven by the lower TV TV from the spend environment that our SMB customers are operating in, which obviously translates into lower transaction revenue growth, which is a significant contributor to that retention dynamic. The second thing is probably the revenue associated with the large FI partner that we've talked about, and to a lesser extent than TPP.

Speaker Change: Reducing the joint solution enables us to drive that future state that you are talking about which is far more adoption of customers using both the core platforms that we have and so we see continued learning and alignment within the organization to kind of listen to customers and drive that success across the customer base and I think we're going to.

Speaker Change: Can you drive that and I'll, let John add anything to that if you want and I'll come back and answer the ecosystem question, Yes, I would just add that the progress we've made so far on this cross sell effort has predominantly come from.

John Rettig: Those two things combined, though, are the vast majority of the change on a year-to-year basis. Things like number of users per customer and variables like that are very small in the grand scheme of that retention number. Thanks for the thirdity.

Samad Samana: Appreciate you taking my questions.

John: Customers, who we've acquired through our direct marketing efforts.

Speaker Change: To a much smaller degree.

Speaker Change: We've seen cross sell activity within our accounting channel. So when we talk about doubling down on accountants, it's not just extending our lead in establishing new relationships. It's also starting to activate this cross sell motion working very closely with accounting firms and their clients to provide new solutions in this regard.

Operator: Thank you.

Speaker Change: Shifting to pull your guidance for fiscal 2025, we expect total revenue to be in the range of 1,415 million to 1,450 million, which reflects 10 to 12% year-over-year growth. We expect core revenue to be in the range of 1,270 million to 1,305 million, which reflects 13 to 16% year-over-year growth. We expect float revenue to be approximately 145 million in fiscal 2025, which assumes a yield on FBO funds of approximately 400 basis points for the year and an exit Fed funds rate of 350 basis points as of June 2025.

Darren Peller: Our next question comes from Darren Peller, Wolf Wolf Research.

Speaker Change: On the bottom line, for fiscal 2025, we expect to report non-gap operating income in the range of 160 to 195 million and non-gap net income in the range of 154 to 182 million. We expect non-gap net income per diluted share to be $1.36 to $1.61 based on a share count of 113 million diluted weighted average shares outstanding.

Darren Peller: Elan is now open. Hey guys, thanks. You know, first question is just around go to market. I mean, I saw you jumped, like you said, from $7,000 or so up to over $11,000 cross-old customers by the end of last year, the fiscal year. And so that's obviously showing good progress, just maybe touch on the go-to market of really the cross-zone between Divi and the bill solutions and now the one more unified offering.

Speaker Change: Note that our Q1 and full-year guidance for share count and non-gap net income per share do not reflect the impact of our share repurchase program.

Speaker Change: It's twofold.

Speaker Change: For fiscal 2025, we expect stock-based compensation expenses to be approximately 20% of total revenue.

Speaker Change: Twofold Theres lots of opportunity left in and one of the biggest spaces for growth is an area, we do really well, which is an account channel.

Speaker Change: In closing, we are pursuing a large market opportunity to automate financial operations for SMBs and bill is perfectly positioned to capture this opportunity with our platform, large and expanding ecosystem and strong dedicated team. We've built dynamic business with powerful levers to drive growth and we are investing now to optimize our results for the long term, which we believe will extend our lead and accelerate the pace of capturing the market opportunity and creating value for shareholders.

And just on the ecosystem just to give you some framing.

Speaker Change: And now we'll open up the call for Q&A.

Speaker Change: Our long term strategy around the ecosystem has always been that we need to surround the market with distribution channels and be at the center of each and what you see with Bill is obviously, we are at the center when it comes to direct we're meeting there were at the center of it it kind of stay accounts over 8000 firms growing 14% year over year over half the business.

Speaker Change: If you would like to ask a question, please press star followed by one on your telephone keypad.

Darren Peller: And really, if anything has changed, what's the approach now? Can you even accelerate that you've really still have a long runway when you look at the face and size of your customers versus what you've accomplished so far? And I guess they just add on to that. This strategy got to go to market on the financial side. Now the financial institutions have that changed at all versus, you know, it's you know, a lot of focus on the accounting channel.

Speaker Change: To remove your question, press star followed by two.

Speaker Change: And then in the longer term play here is going to be with our financial institution partners and obviously, our new accounting partners shipped with zero and others to come and so the opportunity for US is to make sure that we're in a position to win and that's part of the strategy along all along it's just that we're always going to place ourselves in a position.

Speaker Change: And if you are using a speaker phone, please pick up your handset before asking your question.

Speaker Change: Our first question then comes from William Nance with Goldman Sachs.

Speaker Change: Your line is not open.

Speaker Change: Hey guys, I appreciate you taking the question here.

Speaker Change: Maybe I'll start on the the FI channel renewal that you mentioned.

Speaker Change: John, I think you called out that the RPO may remain similar but spread over over additional years.

Darren Peller: Be very successful. Just curious where the focus is on the financial institution side too, guys. Thank you. Cool. Good question, Darren. You know, I would say on the go-to market approach when it comes to cross-selling. You know, I'm going to use a framing that I've always had in driving business success. It's kind of a wash, rinse, repeat. Like you innovate, then you adapt, and you learn, and then you innovate again. And so, you know, when we pull together the platforms, we have the organizations lined up.

Speaker Change: <unk> to win with our partners and with the ecosystem more broadly and so I would not say, it's a shift I would say, it's an expansion because there is now more opportunity in the market from small business aggregators outside of financial institutions, and we are starting to engage with those like you saw with zero.

Speaker Change: Could you just maybe unpack what that means in terms of just the quarterly subscription revenues from the embedded solutions part of the business and just how you're thinking about that.

Speaker Change: I know that it's taken a step down when you're initially contemplated changes.

Speaker Change: So how will that flow through the numbers with the coming year?

Speaker Change: Yeah, thanks for the question.

Speaker Change: We are RPO as of the end of the year is about $87 million and there's a meaningful percentage of that by the large FI partner that we talked about throughout the year where we have finalized the contract amendment.

John: Very helpful. John can I just quickly squeeze in one follow up is just whats assumed in your guide for greater maybe if you can give us any direction on that and then maybe bofa also the <unk> is there an assumption of $1. We can think about that may have been a better credit. This year wasn't lost I think framing on those would be great. Thanks again guys.

Speaker Change: And the RPO is consistent for that particular customer as as where we had ended the year. And instead of one year left on the contract, we've extended it for three years. So we recognize in that revenue over four years.

Darren Peller: The go-to market is going to be obviously going to be iterative. And what we're learning from customers as we have more and more customers using the joint solutions enables us to drive that future state that you're talking about, which is far more adoption of customers using both the core platforms that we have. And so, you know, we see continued learning and alignment within the organizations to kind of listen to customers and drive that success across the customer base.

Speaker Change: And in addition to that, we're obviously marrying our embedded strategy with our financial institution partners as well making available our newest APIs to support the bank and their new program and working with them in any way we can to help drive success there.

Speaker Change: So that's the kind of the extent of the moving parts on the numbers is really not much change from the ending RPO.

John: Sure Darrin on the take rate we're assuming.

Speaker Change: Essentially flattish.

Speaker Change: With an uptick in the second half of the year. It we've made a lot of progress and obviously, bringing stability to take rate and we think these first couple of quarters will be the point at which we frankly trough for lack of a better better term and start to expand in the second half of the year and we would expect to be above.

Speaker Change: I appreciate that.

Darren Peller: And I think we're going to continue to drive that. And I'll let John add anything to that if he wants, and I'll come back and answer the ecosystem question. Yeah, I would just add that the progress we've made so far on this cross-sell effort has predominantly come from customers who we've acquired through our direct marketing efforts. To a much smaller degree, have we seen cross-sell activity within our accounting channel? So, when we talk about doubling down on accountants, it's not just extending our lead and establishing new relationships.

Speaker Change: That's helpful.

Speaker Change: At the end of 'twenty, five where we are at the end of 'twenty four.

Speaker Change: In terms of the.

Speaker Change: <unk> and dynamics with the one particular partner Theres not a lot of detail. We can give there other than as of the end of the year I think it's approximately 40% of our <unk> balances subject to this amended.

Darren Peller: It's also starting to activate this cross-sell motion working very closely with accounting firms and their clients to provide new solutions in this regard. So, it's a two-fold. There's lots of opportunity left, and one of the biggest spaces for growth is an area we do really well, which is in the account channel. Yeah, and just on the ecosystem, just to give you some framing, our long-term strategy around the ecosystem has always been that we need to surround the market with distribution channels and be at the center of each.

Speaker Change: Our contract that we referred to are the large si partner and that will be spread over four years.

Speaker Change #100: Very helpful. Thanks again guys.

Darren: Thanks Darren.

Speaker Change: And just maybe a broader question you mentioned the 20% you know kind of long term goal of at the law and payment revenue.

Our next question comes from Bryan Keane with Deutsche Bank. Your line is now open.

Bryan Keane: Hi, guys. Thanks for taking the question I guess, John just a follow up on that why would or why are you confident that the second half of the year, we will see a little bit higher penetration in payment modalities and do you think VC and cross border will bounce back and be up this year in particular.

Speaker Change: I hear the commentary on that's how you'll be kind of communicating advances in monetization going forward.

Darren Peller: And what you see with Bill is obviously we are at the center when it comes to direct. We're meeting there where at the center when it comes to accounts over 8,000 firms growing, 14% year-over-year, over half the business. And then, you know, in the longer-term play year is going to be with our financial institution partners and obviously our new accounting partners ship with zero and others to come. And so, the opportunity for us is to make sure that we're in a position to win.

Brian: Yeah. Thanks for the question, Brian I think to the second part of your question. Yes, we do we do have confidence in and additional volumes on those products.

Darren Peller: And that's part of the strategy at all long. It's just that we're always going to place ourselves in a position to win with our partners and with the ecosystem we're broadly. And so, I would not say it's a shift. I would say it's an expansion because there's now more opportunity in the market from small business aggregators outside of financial institutions and we're starting to engage with those like you saw with zero.

Speaker Change #103: There is other.

Speaker Change #103: And I think perhaps I mentioned earlier as well there's other product improvements that we're making and we're filling a couple of I'd say interesting holes in the product portfolio, which will drive additional AD valorem adoption and it's these dynamics that when we look at the volume and expectations around very sure.

Speaker Change #103: <unk> term.

Darren Peller: Very helpful. John, can I just quickly squeeze in? One follow-up is just, what's assumed in your guide for cake rate, or maybe if you can give us any direction on that? And then maybe be available. So the RPOs, is there an assumption on dollars we can think about that may have been, you know, included this year, it wasn't last. Any framing on those would be great. Thanks again, guys. Sure, Darren, on the cake rate, we're assuming, you know, essentially flatish with an uptick in, you know, the second half of the year.

Speaker Change #103: Penetration rates and adoption from suppliers and customers that give us confidence that we will start to back on the road or expanding take rate as we get further into FY 'twenty five.

Speaker Change: Just to help us think about how we should think about the monetization of those volumes and just sort of have a mix of payment methods may impact the ultimate take rate that you get on that 20% of volumes.

Speaker Change: Thanks.

Speaker Change: Yeah, sure.

Got it that's helpful. And then the follow up to that is just in that 20% core revenue growth for fiscal year 'twenty six does that assume getting back to more normal and maybe you can help us what is normal kind of sequential organic take rate expansion.

Speaker Change: It's a good question.

Darren Peller: We've made a lot of progress in obviously bringing stability to cake rate, and we think these first couple of quarters will be the point at which we frankly trough for lack of a better term and start to expand in the second half of the year. And we would expect to be above, you know, at the end of 25 where we are at the end of 24. In terms of the RPO and dynamics with the one particular partner, there's not a lot of detail we can give there, other than as of the end of the year.

Speaker Change #104: I would say that first of all getting to the 20% growth that we talked about that's obviously going to be a progression right. We're going to make great progress in the second half of 'twenty five and we'll continue that through FY 'twenty six we are assuming better expansion of monetization.

Speaker Change #104: In 2006, then in 'twenty five, but that's not the sole driver of.

Speaker Change #104: Our belief that 20% is in range for 'twenty six we obviously have a much higher both volume and revenue growth on our spend and expense product, we talked about the proliferation of card payments starting to happen within the bill ecosystem that will provide incremental growth as well so it's.

Darren Peller: I think it's approximately 40% of our RPO balance is subject to this amended contract that we referred to with a large FI partner, and that'll be spread over four years. Very helpful. Thanks again, guys. Thanks, Darren.

Speaker Change #104: All of the above frankly that that gives us confidence there as far as the sequential quarterly upticks, we don't think of it as that.

Brian King: Our next question comes from Brian King. What's your bank? Your life's not open.

Speaker Change #104: And those terms as much as we do on an annual basis, we would expect to start to get back to higher levels of expansion.

Brian King: Hi, guys. Thanks for taking the question. I guess John just to follow up on that. Why would, or why are you confident that the second half of the year will see a little bit higher penetration and payment modalities? And do you think VC and cross-border will bounce back and be up this year in particular? Yeah, thanks for the question, Brian. I think to the second part of your question, yes, we do have confidence in additional volumes on those products.

Speaker Change #105: Great. Thanks, so much for taking the questions.

Speaker Change #106: Thank you and thank you operator.

Speaker Change #106: Yes.

Speaker Change #107: Have time for one more question.

Okay.

Our final question comes from Ken Wong with Oppenheimer. Your line is now open.

Speaker Change: I'd say there's a number of investments that were making near term to improve existing product experiences drive payment speed improve reconciliation and those things which I think will help expand volumes and monetization associated with products that we are already offering customers and suppliers and those are relatively short term initiatives.

Brian King: I'd say there's other, as Renee, and I think perhaps I mentioned earlier as well, there's other product improvements that we're making. And we're filling a couple of, I'd say, interesting holes in the product portfolio, which will drive additional advalorem adoption. And it's these dynamics that when we look at the volume and expectations around very short-term penetration rates and adoption from suppliers and customers that give us confidence that we'll start to back on the road of expanding takeaways we get further into FY25.

Ken Wong: Okay fantastic.

Ken Wong: The mine have been asked but I guess, one final clarification, just on that <unk> side.

Ken Wong: Did that dollar amount increased with the renewal or was it a static final year number that's now spread over four years or was there an uptick in that number that's now spread over four years, just wanted to make sure we understood the mechanics of that.

Speaker Change #109: What's playing out there.

Yes, the <unk>.

Speaker Change #110: <unk> associated with the large Si partner.

Speaker Change #111: Main roughly the same so no no significant expansion or contraction.

Speaker Change #111: We exited FY 'twenty four and the term on that.

Brian King: Got it, that's helpful. And then the follow-up to that is just in that 20% core revenue growth for fiscal year 26, does that assume getting back to more normal and maybe can help us what is normal kind of sequential organic take rate expansion? I'd say that the first of all getting to the 20% growth that we talked about, that's obviously going to be a progression, right? We're going to make progress in the second half of 25 and we'll continue that through FY26.

Speaker Change #111: Amended contract is now four years.

Speaker Change #111: Okay got it. So so there was there was a sort of a preexisting balance.

Speaker Change #112: And then as you guys renegotiated that remained roughly the same it's just across multiple years instead of a single year right. So it would be like hypothetically a 10 divided by four.

Speaker Change #112: Not some number of bigger than 10 divided by four.

Speaker Change #112: That's right.

Speaker Change #113: Okay. Okay, great. Thank you very much.

Speaker Change #113: Yes.

Speaker Change #113: Thank you.

Brian King: We are assuming a better expansion of monetization in 26 than in 25, but that's not the sole driver of our belief that 20% is in range for 26. We obviously have much higher both volume and revenue growth on our expense product. We talked about the proliferation of card payments starting to happen within the bill ecosystem that will provide incremental growth as well. So it's all of the above, frankly, that gives us confidence there.

Speaker Change #113: Okay.

Speaker Change #113: Thank you everybody I just wanted to say.

Speaker Change #113: Thank you everyone I just wanted to say.

Speaker Change #113: Kate you joining today, we finished fiscal 2024 with great momentum and a really strong foundation to drive growth in <unk>.

Speaker Change #113: 25 and beyond.

Speaker Change #113: We look forward to extending our leadership position and I am exceptionally proud of the team's agility and adaptability shown in the last six months of the year and all of US are very energized about our future. So thank you for joining us and have a great evening.

Speaker Change: In addition to that we see card payments generally being a larger part of the payment mix in the bill portfolio of payment products so beyond what we do with with spend and expense and things like that.

Speaker Change: And so across you know across all of our payment products as we see that mix evolving we sort of view that 20% as more of a forward to where we're going to be able to take monetization you know longer term.

Speaker Change #113: Okay.

Speaker Change: And we feel really good about the levers that we have and frankly the value proposition that we're offering for both buyers and suppliers with this mix of payment products.

Brian King: As far as the sequential quarterly upticks, we don't think of it as that. In those terms as much as we do on an annual basis, we would expect to start to get back to higher levels of expansion. Thank you for your question. Great, thanks so much. Thank you.

That will conclude today's conference call.

Speaker Change #114: Thank you all for your participation you may now disconnect your line.

Speaker Change: I appreciate you taking the question.

Speaker Change: You bet.

Speaker Change: Our next question comes from Tencent Huang with JP Morgan.

Operator: Yeah, and thanks for the operator, we have time for one more question.

Ken Wong: Of course, our final question comes from Ken Wong with Openheimer. Your line is not open. Oh, okay, fantastic. Most of mine have been asked, but I guess the one final clarification just on that RPO side, did that dollar amount increase with the renewal or was it a static final year number that's now spread over four years, or was there an uptick in that number that's now spread over four years, just wanted to make sure we understood the mechanics of how it was playing out there.

Speaker Change: He lives now open.

Speaker Change: Hey, great.

Speaker Change: Thanks so much.

Ken Wong: Yeah, the RPO associated with the large FI partner remain roughly the same, so no significant expansion or contraction as we exited FY24 and the term on that amended contract is now four years. Got it. So there was a sort of pre-existing balance, and then as you guys renegotiated that remained roughly the same, it's just across multiple years instead of a single year. So it would be like hypothetically 10 divided by four, you know, not some number bigger than 10 divided by four. That's right. Okay, okay, great. Thank you very much. Thank you. Okay. Thank you, everybody. I just wanted to say thank you, everybody. I just wanted to say appreciate you joining today.

Speaker Change: I'm just thinking about these investments here.

Speaker Change: How quickly do you expect to spend the 45 million?

Speaker Change: What kind of return or pay back?

Speaker Change: Do you expect that heard the 20% core growth in 26?

Renee Lizert: We finished fiscal 2024 with Grape metham, and a really strong foundation to drive growth in FY25 and beyond. We look forward to extending our leadership position, and I'm exceptionally proud of the team, the agility and the adaptability they've shown in the last six months of the year, and all of us are very energized about our future. So thank you for joining us and have a great evening.

Speaker Change: But just here as well as we can build off of that.

Speaker Change: And then just to also clarify, are these new investments driven by new opportunities?

Speaker Change: Or was it driven by competitive changes?

Speaker Change: Or is it just a catch-up in spending from a period of pause given the macro uncertainty last two to three course?

Speaker Change: Thanks.

Operator: So we'll conclude today's conference, Paul. Thank you all for your participation. You may now disconnect your line.

Speaker Change: Thank you, Jen.

Speaker Change: Great question.

Speaker Change: Let me just get some background first.

Speaker Change: I mean, we made a, we saw a shift in kind of what was happening in the market. We adapted quickly, very agile and the team delivered exceptional results throughout the rest of the year.

Speaker Change #100: So that would have been obviously the end of the last calendar year.

Speaker Change #100: And we had great results through the fiscal year and seeing the efficiency that we were able to drive.

Speaker Change #100: And if you just think about, you know, the high level, our operating income less flow grew 750%.

Speaker Change #100: You know, over $31 million or so from last year's increase.

Speaker Change #100: And so just giving you, in my perspective, seeing the strength that we were able to drive and then seeing the innovation opportunities, again, you know, just more context like we've defined this category.

Speaker Change #100: And at Bill, we're all bunch of leaders.

Speaker Change #101: And leaders don't wait.

Speaker Change #102: You know, we're not going to be a market takeer.

Speaker Change #103: We're going to be a market maker.

Speaker Change #104: And when we see and interact with our customers, whether they're direct customers, accountant customers or ecosystem partners or suppliers in our network or large, you know, larger suppliers, we hear and understand there's opportunities to expand that, you know, the value that we're providing them.

Speaker Change #104: And so that's the reason to invest because we feel really good about what the team is executing on.

Speaker Change #104: And the ability for us to deploy capital drive growth really is, I think how I would define everything that we've done is we've been defining this category from day one.

Speaker Change #104: And we're going to continue to do that.

Speaker Change #104: And how we're doing that is we have kind of four specific areas that we're investing in. The first one I would say is that we are enhancing and expanding the value proposition for our existing solutions.

Speaker Change #104: So if you think about, you know, international payments, you know, we started some local transfer capabilities.

Speaker Change #104: We're going to roll that out.

Speaker Change #105: John already referenced that we're going to expand car juices across the platform.

Speaker Change #106: We're going to give folks more opportunities to leverage the car.

Speaker Change #106: And then, you know, when the next thing, the second thing I would say is that we're going to augment the experience and go to market for suppliers.

Speaker Change #107: What we started doing, again, you know, halfway through the year was having dedicated teams that talk to suppliers that have significant volume on the platform.

Speaker Change #107: We've learned a ton. There's a lot of opportunity for us to create more value for them, better reconciliation, more automation, even leveraging AI across the experience that they have.

Speaker Change #107: And that's what we're hearing and that's what we're developing and that's where we want to invest.

Speaker Change #107: And then on the third thing that we're going to invest in, it's going to be deepening our accounting relationships.

Speaker Change #107: We have defined an entirely new line to business for accounts.

Speaker Change #108: We've worked with CPA.com and the ACPA to create client advisory services, cast practices.

Speaker Change #109: You heard a quote from Acrio and Amber are there talking about how they started 14 years ago with no customers on the bill platform and now have over 500.

Speaker Change #110: But when you have 500 customers, how you manage to support those customers becomes a lot more challenging.

Speaker Change #111: And so we have an opportunity to actually provide cash flow insights and strategic advisory services through the platform we have.

Speaker Change #111: We have an opportunity to create efficiency for the account and how they manage their clients.

Speaker Change #111: And we have an opportunity to create better customer experience around multi entities since many of their clients have that.

Speaker Change #111: And so we're investing behind that.

Speaker Change #111: And the fourth and final area of investment is driving expansion of our ecosystem.

Speaker Change #111: And this is what we've done from the very beginning.

Speaker Change #111: We really believe that the ecosystem is a critical part of our platform and our strategy.

Speaker Change #111: And what we're going to be doing is investing and go to market resources.

Speaker Change #111: We're going to be investing in advancing our APIs.

Speaker Change #111: And I think when you see what we're able to do with zero, roughly six months from when we announce we're able to go to beta, that's something that we're super proud of.

Speaker Change #111: And we know there's an opportunity in the market for us to be more.

Speaker Change #112: So I'll let John maybe answer the rest of your question there and go from there.

Speaker Change #113: Sure, just adding to the part of your question about pacing.

Speaker Change #114: We're expecting it to be spread throughout the year. A little bit more front loaded than than not.

Speaker Change #115: And as we as we look at the impact of of these investments plus the ongoing improvements we're making to our platform efficiency we're driving would go to market and things of that nature.

Speaker Change #115: We expect to be able to increase our revenue growth rate in in 26 as I as I mentioned earlier.

Speaker Change #115: And actually the beginning phase of growth expansion.

Speaker Change #115: It's not the end goal that we have.

Speaker Change #116: It's not just 26.

Speaker Change #117: It's multi-year multi-year improvements in in our growth rate. As evidenced by some of our investments as Renee mentioned particularly on the embed platform both the technology and our go-to market capabilities there.

Speaker Change #118: That's a multi-year time horizon that we we do as driving growth. And at the same time we do expect beginning an FY26 and beyond to be expanding profitability more so than than we've seen in FY25 as we're pulling forward some of those investment dollars.

Speaker Change #119: And just one more thing I would add is the conviction that that both John and I have is so strong that when the market opens up we're going to be buying shares as well as the company is doing.

Speaker Change #120: Yeah I know that's all clear.

Speaker Change #120: Second fact that comment.

Speaker Change #120: No, I think you both answered it really well.

Speaker Change #121: Just fully quickly to clarify, Renee, it sounds like I think you mentioned these are all senses that defensive investments just wanted to clarify that.

Speaker Change #121: Absolutely.

Speaker Change #122: We're all about offense.

Speaker Change #122: We have defined the category.

Speaker Change #123: We see other people following us and then playing catch up and we're going to keep widening the gap that we have because that's the advantage that customers need.

Speaker Change #124: The customers need innovation.

Speaker Change #125: SMBs are innovating every day in each of their businesses and they need to count on somebody to innovate and that's what they do with us.

Speaker Change #125: So I think it's super important and we're going to continue to do that when we see opportunities.

Speaker Change #126: Thank you, Renee.

Speaker Change #127: Thank you, John.

Speaker Change #127: Thank you.

Speaker Change #128: Our next question comes from Andrew Schmidt with Sacred.

Speaker Change #129: Your line is not open.

Speaker Change #130: Hey, Renee.

Speaker Change #131: Hey, John.

Speaker Change #132: Thanks for taking my question.

Speaker Change #133: So I want to drill down just on the environment for supplier acceptance.

Speaker Change #134: Maybe I know John needs some comments, but maybe to put a finer point on what you saw in the fiscal fourth quarter and into FY25.

Speaker Change #134: And then maybe just a cab on to that.

Speaker Change #135: I know you put some supplier enablement teams in place that are better managed by relationships.

Speaker Change #135: Maybe early reads on that and what you're seeing in terms of the acceptance when you have kind of, you know, pushed a little bit deeper on those relationships.

Speaker Change #135: Anything on those two fronts would be helpful.

Speaker Change #135: Thanks so much.

Speaker Change #136: Well, yeah, thank you, Andrew.

Speaker Change #137: The first thing I would say as we talk to suppliers is not going to be a surprise, but they don't want checks. They really don't want checks.

Speaker Change #138: We have a tremendous amount of buying that we drive through our platform.

Speaker Change #139: They like getting electronic payments, but they need more help from reconciliation and they need more health and automating all the things that are coming from Bill.

Speaker Change #140: And so as we talked with suppliers, we're hearing that loud and clear and we're putting R&D dollars as well as good market dollars around creating services for them so that they actually have a different experience.

Speaker Change #140: So that's just not out the receiving end.

Speaker Change #140: They're engaging with us.

Speaker Change #140: I think one of the examples that we think about is we have a tremendous amount of buying that goes through on the ACH, but there's very poor reconciliation on the ACH transactions. And the ability for suppliers to kind of take those transactions and have an experience where they can obviously understand what the payments are attributed to, potentially collaborating with their customers, which would be our customers.

Speaker Change #140: All these things are something they want and we see an opportunity to drive value there.

Speaker Change #141: And that's not a product we have in market today.

Speaker Change #141: But I'm just giving you an example of the learning that we have that's going on right now that gives us the confidence that there's an opportunity to create more value for suppliers, to keep them really doing their business job better and to keep us serving our customers better.

Speaker Change #142: God, thank you so much for that, Renee.

Speaker Change #143: And John, I think you had some comments on stabilization.

Speaker Change #144: Maybe you can talk about just more broadly your thoughts on the macro environment having a network 25 and how that might translate into things like PPB for customer.

Speaker Change #144: Thank you very much.

Speaker Change #145: Yeah, thanks Andrew.

Speaker Change #146: We've seen pretty consistent behaviors on the part of small businesses over the last few quarters.

Speaker Change #147: You've seen that play out in our TPB per customer numbers, being pretty consistent, maybe down 1% up 1%, but in that same range, obviously our overall TPB growth for the last couple of quarters has been a little bit ahead of our expectations.

Speaker Change #147: And we're expecting a similar environment throughout FY 25.

Speaker Change #147: I think their disability is showing up in engagement.

Speaker Change #148: We have very healthy transactions for customers, slight uptick in that in the fourth quarter, but still slightly lower dollars per transaction for small businesses was reflective of the environment that everyone's operating in.

Speaker Change #148: So we feel good about this ability and we're not embedded in our assumptions for expectations in FY 25, assuming any rapid rebound in B2B spending or the flip side any deterioration in the current level of activity.

Speaker Change #148: Thank you.

Speaker Change #148: Got it.

Speaker Change #149: Thank you very much John.

Speaker Change #150: Thank you.

Speaker Change #150: Our next question comes from Scott Berg with Needham and Company.

Speaker Change #151: Your line is not open.

Speaker Change #152: I have an angi on this quarter here.

Speaker Change #153: I guess a couple questions.

Renee Lizert: I think it was in Renee Prescripted remarks about the supplier financing.

Speaker Change #154: I guess can you help maybe quantify kind of what you're seeing there early on in the industry?

Speaker Change #155: So you know, we can release the product and that seems to be a part of your re-acceleration story in the fiscal 26.

Speaker Change #155: I guess how do we maybe set expectations around the impact on the business?

Speaker Change #156: Thank you, Scott, for the question.

Speaker Change #157: I think, you know, invoice financing is just another example of innovation that we're bringing to the market.

Speaker Change #157: You know, we have a unique set of data and scale when you think about, you know, what we have with scale.

Speaker Change #157: It just makes us a learning machine.

Speaker Change #157: We have so much data across the platform, so many opportunities for us to leverage that for our customers.

Speaker Change #158: And what we're seeing in voice financing is it's early days and there's lots of lots of work for us to do around kind of the modeling and risk profiles and stuff like that.

Speaker Change #158: But what we're seeing is customers want it and they use it again and again.

Speaker Change #158: And so what we will continue to do is to refine kind of the experience they have, to refine, you know, the backend systems so that we can roll this out more broadly.

Speaker Change #158: And I think it's going to be one of the, you know, important drivers of our expansion of outdoor revenue as we go forward into the 26 and beyond.

Speaker Change #158: We've got it helpful.

Speaker Change #159: And then you both need to comment on the number of customers using both AP and send and expense solutions with up roughly 60% year over year is, you know, now that the over the last year, the products have been properly integrated and combined is, I guess.

Speaker Change #160: Is there anything you can take away from those customers who have set a better retention rates?

Speaker Change #160: Is there any examples where one plus one equals more than two words that simply just the one plus one equals better retention rates over time?

Speaker Change #161: That's definitely one plus one is more than two.

Speaker Change #161: I mean, we're getting obviously the retention makes that true.

Speaker Change #161: But I think we're also getting more usage across the platform.

Speaker Change #161: There's more opportunities.

Speaker Change #162: We've talked about the opportunity, you know, across, you know, our platform to continue to extend the proliferation, if you will, of card payments.

Speaker Change #163: That comes from all the capabilities we have with the platform that, you know, was formally known as Divi, that is now our spending expense platform.

Speaker Change #163: So that's an area.

Speaker Change #163: You know, and I think, you know, maybe a higher level, you know, area to think about that we see is that the proliferation of all these different software and then tech solutions is actually driving in the market and need for more consolidation and notification of platforms.

Speaker Change #163: And so when you think about what we are able to provide customers today from financial operations perspective, we give them the best world class AP solution.

Speaker Change #164: We're giving them the best cash flow insights and forecasting capabilities. These are things that we add into the platform that continue to create more value for customer experience across their portfolio usage of ours.

Speaker Change #164: And it's something that we're excited about.

Speaker Change #165: So I think the main thing is we do think one and one is going to be part greater than two.

Speaker Change #165: Excellent.

Speaker Change #165: Thanks for taking my questions.

Speaker Change #166: Thanks, Scott.

Speaker Change #167: Our next question comes from Samad Samana with Jeffries.

Speaker Change #168: The line is not open.

Speaker Change #169: Great, good evening.

Speaker Change #170: Thanks for taking my questions.

Samad Samana: First, maybe the, you know, the 20% growth comment for 2020 or fiscal 26 is really encouraging and especially as you think about the stabilization.

Samad Samana: That you've highlighted so far.

Speaker Change #172: This side for you, you Renee or John, but as you guys think about the building blocks to that 20% how much of that is re accelerating existing pieces of the business and getting new customer acquisition of fire again.

Speaker Change #173: And getting more adoption of ad ballorum versus new revenue streams that you're anticipating that the investments you call that are going to drive.

Speaker Change #174: Can you just maybe help us understand how much you already have one aside to versus what has to has to be kind of blocked and tackled.

Speaker Change #175: That's a great question to mod and you know, one of the things I've learned over the last three decades right businesses that you've got to kind of have a bouncing act between, you know, obviously what you've gotten, what you want.

Speaker Change #176: And so what we're doing is actually bouncing at there is definitely more clarity across the business as we consolidate the organizations and have, you know, the teams really aligned about what drives results on the existing business.

Speaker Change #176: But we also have that same clarity being driven around the innovation teams across the company.

Speaker Change #176: And so I think it's a reasonably good balance between the two and we're going to always invest to, you know, obviously serve customers with what we have.

Speaker Change #176: But we're also going to invest to innovate and so we were, you know, balancing that maybe one other area of investment that I didn't call out earlier that I think it's important for folks to know.

Speaker Change #176: Is that, you know, we're, we talked about this.

Speaker Change #176: We're highly committed to being highly profitable.

Speaker Change #176: And part of the investment is, you know, we have a lot of internal tools.

Speaker Change #177: This is a big company now, you know, it's a trillion dollars of money movement over the last five years to over 300 billion a year.

Speaker Change #177: We've got teams in multiple countries that support customers.

Speaker Change #177: They need tools and capabilities to continue to drive and efficiency and scale. And we're going to invest behind that because that's the right thing to do for the long term growth of the business.

Speaker Change #177: Great.

Speaker Change #178: And then John, maybe just to follow up on the NRR.

Speaker Change #179: I appreciate the disclosure on what it would have been X the top three bank.

Speaker Change #180: So I was wondering if you can maybe help us understand from it going where it was last year to this year, the, I think, 111 to 96.

Speaker Change #181: How much of that was due to TV contraction in the install base versus down selection of payment type, just trying to understand the mechanics of, of maybe what drove the contraction portion of it and, and how we should think about the shape of that going forward.

Speaker Change #182: Yeah, thanks for the questions, Samad.

Speaker Change #183: Most of the change on your to your basis is really driven by the lower TV TV from the spend environment that our SMB customers are operating in, which obviously translates into lower transaction revenue growth, which is a significant contributor to that retention dynamic.

Speaker Change #184: The second thing is probably the revenue associated with the large FI partner that we've talked about, and to a lesser extent than TPP. Those two things combined, though, are the vast majority of the change on a year-to-year basis.

Speaker Change #184: Things like number of users per customer and variables like that are very small in the grand scheme of that retention number.

Speaker Change #184: Thanks for the thirdity.

Speaker Change #184: Appreciate you taking my questions.

Speaker Change #184: Thank you.

Speaker Change #184: Our next question comes from Darren Peller, Wolf Wolf Research.

Speaker Change #185: Elan is now open.

Speaker Change #186: Hey guys, thanks.

Speaker Change #187: You know, first question is just around go to market.

Speaker Change #188: I mean, I saw you jumped, like you said, from $7,000 or so up to over $11,000 cross-old customers by the end of last year, the fiscal year.

Speaker Change #189: And so that's obviously showing good progress, just maybe touch on the go-to market of really the cross-zone between Divi and the bill solutions and now the one more unified offering.

Speaker Change #189: And really, if anything has changed, what's the approach now?

Speaker Change #190: Can you even accelerate that you've really still have a long runway when you look at the face and size of your customers versus what you've accomplished so far?

Speaker Change #190: And I guess they just add on to that.

Speaker Change #190: This strategy got to go to market on the financial side.

Speaker Change #191: Now the financial institutions have that changed at all versus, you know, it's you know, a lot of focus on the accounting channel.

Speaker Change #191: Be very successful.

Speaker Change #191: Just curious where the focus is on the financial institution side too, guys.

Speaker Change #191: Thank you.

Speaker Change #191: Cool.

Darren Peller: Good question, Darren.

Darren Peller: You know, I would say on the go-to market approach when it comes to cross-selling.

Speaker Change #193: You know, I'm going to use a framing that I've always had in driving business success. It's kind of a wash, rinse, repeat.

Speaker Change #193: Like you innovate, then you adapt, and you learn, and then you innovate again.

Speaker Change #193: And so, you know, when we pull together the platforms, we have the organizations lined up.

Speaker Change #193: The go-to market is going to be obviously going to be iterative.

Speaker Change #194: And what we're learning from customers as we have more and more customers using the joint solutions enables us to drive that future state that you're talking about, which is far more adoption of customers using both the core platforms that we have.

Speaker Change #194: And so, you know, we see continued learning and alignment within the organizations to kind of listen to customers and drive that success across the customer base.

Speaker Change #194: And I think we're going to continue to drive that.

Speaker Change #195: And I'll let John add anything to that if he wants, and I'll come back and answer the ecosystem question.

Speaker Change #196: Yeah, I would just add that the progress we've made so far on this cross-sell effort has predominantly come from customers who we've acquired through our direct marketing efforts.

Speaker Change #197: To a much smaller degree, have we seen cross-sell activity within our accounting channel?

Speaker Change #198: So, when we talk about doubling down on accountants, it's not just extending our lead and establishing new relationships. It's also starting to activate this cross-sell motion working very closely with accounting firms and their clients to provide new solutions in this regard. So, it's a two-fold.

Speaker Change #199: There's lots of opportunity left, and one of the biggest spaces for growth is an area we do really well, which is in the account channel. Yeah, and just on the ecosystem, just to give you some framing, our long-term strategy around the ecosystem has always been that we need to surround the market with distribution channels and be at the center of each.

Speaker Change #200: And what you see with Bill is obviously we are at the center when it comes to direct.

Speaker Change #201: We're meeting there where at the center when it comes to accounts over 8,000 firms growing, 14% year-over-year, over half the business.

Speaker Change #202: And then, you know, in the longer-term play year is going to be with our financial institution partners and obviously our new accounting partners ship with zero and others to come.

Speaker Change #202: And so, the opportunity for us is to make sure that we're in a position to win.

Speaker Change #202: And that's part of the strategy at all long.

Speaker Change #202: It's just that we're always going to place ourselves in a position to win with our partners and with the ecosystem we're broadly.

Speaker Change #202: And so, I would not say it's a shift.

Speaker Change #203: I would say it's an expansion because there's now more opportunity in the market from small business aggregators outside of financial institutions and we're starting to engage with those like you saw with zero.

Speaker Change #203: Very helpful.

Speaker Change #203: John, can I just quickly squeeze in?

Speaker Change #204: One follow-up is just, what's assumed in your guide for cake rate, or maybe if you can give us any direction on that?

Speaker Change #204: And then maybe be available.

Speaker Change #205: So the RPOs, is there an assumption on dollars we can think about that may have been, you know, included this year, it wasn't last.

Speaker Change #205: Any framing on those would be great.

Speaker Change #205: Thanks again, guys.

Speaker Change #206: Sure, Darren, on the cake rate, we're assuming, you know, essentially flatish with an uptick in, you know, the second half of the year. We've made a lot of progress in obviously bringing stability to cake rate, and we think these first couple of quarters will be the point at which we frankly trough for lack of a better term and start to expand in the second half of the year.

Speaker Change #207: And we would expect to be above, you know, at the end of 25 where we are at the end of 24.

Speaker Change #208: In terms of the RPO and dynamics with the one particular partner, there's not a lot of detail we can give there, other than as of the end of the year.

Speaker Change #208: I think it's approximately 40% of our RPO balance is subject to this amended contract that we referred to with a large FI partner, and that'll be spread over four years.

Speaker Change #208: Very helpful.

Speaker Change #208: Thanks again, guys.

Speaker Change #209: Thanks, Darren.

Speaker Change #210: Our next question comes from Brian King.

Speaker Change #211: What's your bank?

Speaker Change #212: Your life's not open.

Speaker Change #213: Hi, guys.

Speaker Change #214: Thanks for taking the question.

Speaker Change #215: I guess John just to follow up on that.

Speaker Change #216: Why would, or why are you confident that the second half of the year will see a little bit higher penetration and payment modalities?

Speaker Change #217: And do you think VC and cross-border will bounce back and be up this year in particular?

Speaker Change #218: Yeah, thanks for the question, Brian.

Speaker Change #219: I think to the second part of your question, yes, we do have confidence in additional volumes on those products.

Speaker Change #220: I'd say there's other, as Renee, and I think perhaps I mentioned earlier as well, there's other product improvements that we're making.

Speaker Change #221: And we're filling a couple of, I'd say, interesting holes in the product portfolio, which will drive additional advalorem adoption.

Speaker Change #222: And it's these dynamics that when we look at the volume and expectations around very short-term penetration rates and adoption from suppliers and customers that give us confidence that we'll start to back on the road of expanding takeaways we get further into FY25.

Speaker Change #222: Got it, that's helpful.

Speaker Change #223: And then the follow-up to that is just in that 20% core revenue growth for fiscal year 26, does that assume getting back to more normal and maybe can help us what is normal kind of sequential organic take rate expansion?

Speaker Change #224: I'd say that the first of all getting to the 20% growth that we talked about, that's obviously going to be a progression, right? We're going to make progress in the second half of 25 and we'll continue that through FY26.

Speaker Change #225: We are assuming a better expansion of monetization in 26 than in 25, but that's not the sole driver of our belief that 20% is in range for 26. We obviously have much higher both volume and revenue growth on our expense product.

Speaker Change #225: We talked about the proliferation of card payments starting to happen within the bill ecosystem that will provide incremental growth as well.

Speaker Change #225: So it's all of the above, frankly, that gives us confidence there.

Speaker Change #225: As far as the sequential quarterly upticks, we don't think of it as that.

Speaker Change #226: In those terms as much as we do on an annual basis, we would expect to start to get back to higher levels of expansion.

Speaker Change #226: Thank you for your question.

Speaker Change #226: Great, thanks so much.

Speaker Change #226: Thank you.

Speaker Change #226: Yeah, and thanks for the operator, we have time for one more question.

Speaker Change #226: Of course, our final question comes from Ken Wong with Openheimer.

Speaker Change #227: Your line is not open.

Speaker Change #228: Oh, okay, fantastic.

Speaker Change #229: Most of mine have been asked, but I guess the one final clarification just on that RPO side, did that dollar amount increase with the renewal or was it a static final year number that's now spread over four years, or was there an uptick in that number that's now spread over four years, just wanted to make sure we understood the mechanics of how it was playing out there.

Speaker Change #230: Yeah, the RPO associated with the large FI partner remain roughly the same, so no significant expansion or contraction as we exited FY24 and the term on that amended contract is now four years.

Speaker Change #230: Got it.

Speaker Change #231: So there was a sort of pre-existing balance, and then as you guys renegotiated that remained roughly the same, it's just across multiple years instead of a single year.

Speaker Change #232: So it would be like hypothetically 10 divided by four, you know, not some number bigger than 10 divided by four.

Speaker Change #232: That's right.

Speaker Change #232: Okay, okay, great.

Speaker Change #232: Thank you very much.

Speaker Change #232: Thank you.

Speaker Change #232: Okay.

Speaker Change #233: Thank you, everybody.

Speaker Change #233: I just wanted to say thank you, everybody.

Speaker Change #233: I just wanted to say appreciate you joining today.

Speaker Change #233: We finished fiscal 2024 with Grape metham, and a really strong foundation to drive growth in FY25 and beyond.

Speaker Change #234: We look forward to extending our leadership position, and I'm exceptionally proud of the team, the agility and the adaptability they've shown in the last six months of the year, and all of us are very energized about our future.

Speaker Change #234: So thank you for joining us and have a great evening.

Speaker Change #235: So we'll conclude today's conference, Paul.

Speaker Change #235: Thank you all for your participation.

Speaker Change #235: You may now disconnect your line.

Q4 2024 BILL Holdings Inc Earnings Call

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