BILL — Q1 Fiscal Year 2027 Earnings Summary

Financial Performance:

• Total revenue was $353.8 million, an increase of 13% year-over-year.
• Core revenue (subscription and transaction fees) was $316.4 million, an increase of 14% year-over-year; subscription fees were $77.3 million (up 9% YoY) and transaction fees were $239.1 million (up 16% YoY).
• Float revenue (interest on funds held for customers) was $37.4 million.
• Gross profit was $272.1 million, representing a 76.9% gross margin, compared to $237.4 million (75.5% margin) in Q1 FY26.
• Non-GAAP gross profit was $286.9 million, representing an 81.1% non-GAAP gross margin, compared to $250.8 million (79.8% margin) in Q1 FY26.
• Operating income was $51.2 million, compared to an operating loss of $20.7 million in Q1 FY26.
• Non-GAAP operating income was $136.9 million, a 101% increase year-over-year compared to $68.2 million in Q1 FY26.
• Net income was $60.3 million ($0.69 basic, $0.61 diluted per share), compared to a net loss of $3.0 million ($(0.03) per share) in Q1 FY26.
• Non-GAAP net income was $119.1 million ($1.18 diluted per share), compared to $70.2 million ($0.61 diluted per share) in Q1 FY26.
• Net cash provided by operating activities was $96.8 million.
• Free cash flow was $82.9 million.
• Cash and cash equivalents were $915.5 million as of September 30, 2026.
• Total assets were $9.69 billion; total liabilities were $6.39 billion.
• Convertible senior notes, net, totaled $1.51 billion ($123.2 million current, $1.38 billion non-current).
• Borrowings from credit facilities were $330.0 million.

Guidance and Future Outlook:

• Q2 FY27 total revenue guidance is $353.0 million to $363.0 million (8% to 11% YoY growth).
• Q2 FY27 core revenue guidance is $315.5 million to $325.5 million (10% to 13% YoY growth).
• Q2 FY27 non-GAAP operating income guidance is $112.5 million to $117.5 million.
• Q2 FY27 non-GAAP net income guidance is $98.0 million to $102.0 million.
• Q2 FY27 non-GAAP net income per diluted share guidance is $0.97 to $1.01.
• Full-year FY27 total revenue guidance is $1.4335 billion to $1.4635 billion (10% to 12% YoY growth).
• Full-year FY27 core revenue guidance is $1.2835 billion to $1.3135 billion (11% to 14% YoY growth).
• Full-year FY27 non-GAAP operating income guidance is $466.0 million to $486.0 million.
• Full-year FY27 non-GAAP net income guidance is $409.0 million to $425.0 million.
• Full-year FY27 non-GAAP net income per diluted share guidance is $3.99 to $4.15.
• Non-GAAP provision for income taxes in the outlook assumes a 20% rate.
• The outlook excludes the impact of future share repurchases on per diluted share calculations.

Business Segments and Product Lines:

• Served 475,300 businesses using solutions as of the end of the first quarter.
• Processed $102 billion in total payment volume (TPV), a 14% increase year-over-year.
• Processed 38 million transactions, a 14% increase year-over-year.
• Five new product launches occurred during the quarter.
• A Visa pilot was built in four weeks.
• BILL AP/AR revenue was $200.4 million; BILL Spend and Expense revenue was $92.5 million; Integrated Platform revenue was $292.9 million; Embedded Solutions and Other revenue was $23.5 million.

Market and Competitive Landscape:

• The platform processes over 1% of U.S. GDP annually.
• The company has a member network of more than 9 million.
• Management highlighted AI as a key driver changing what is possible and noted a durable business model with a leaner organization.
• The company serves millions of businesses that still need help simplifying their finances.

Risks and Challenges:

• Risks include macroeconomic factors, changes in interest rates, political and regulatory developments, trade policy changes, inflation, recession, and volatile market environments.
• Risks include fluctuations in foreign exchange rates, history of operating losses, and rapid growth.
• Risks include the large sums of customer funds transferred daily, risk of loss, errors, fraudulent activity, and credit risk related to BILL Divvy Cards and invoice financing.
• Risks include the ability to attract new customers, convert trial customers, and commercialize AI-enabled tools.
• Risks include increased competition, new market entrants, impacts of acquisitions, changes to card network rules and interchange fees, and changes in accounting principles.
• Risks include the timing of valuation allowance releases on deferred tax assets, relationships with partners, and geopolitical conflicts.

Management Commentary and Tone:

• CEO René Lacerte stated, "AI is changing what's possible for us, and it shows in our product velocity: five new launches this quarter, and a Visa pilot built in four weeks."
• CFO Rohini Jain stated, "In Q1, we delivered 14% core revenue growth, significantly expanded our operating margin, and achieved a Rule of 40 score of 51."
• Management expressed confidence in executing with discipline due to a durable business model, leaner organization, and integrated platform serving a large market.
• Management noted that reported revenue was lower than prior outlook figures solely due to a presentation change regarding rewards, not underlying business performance.

Other Key Points:

• Effective July 1, 2026, the company voluntarily changed its accounting principle to record rewards paid to spending businesses as a reduction of subscription and transaction fees within revenue, rather than in sales and marketing expense.
• All prior-period amounts in the release have been adjusted retrospectively to reflect the accounting change.
• The accounting change affects revenue, gross profit, gross margin, and sales and marketing expense classifications but has no effect on operating income, net income, net income per share, balance sheet, or cash flows.
• The company repurchased approximately 7 million shares of BILL common stock in the first quarter for a total cost of approximately $305 million.
• The company achieved a Rule of 40 score of 51.
• Non-GAAP operating income and non-GAAP net income per share guidance do not include a reconciliation to GAAP measures because certain excluded items cannot be reasonably calculated or predicted.