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### BILL Holdings, Inc., Q2 2024 Earnings Call Summary
Financial Results
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- BILL Holdings reported strong profitable growth in Q2 2024 with 22% year-over-year revenue growth, 48% year-over-year non-GAAP net income growth, and a 23% non-GAAP net income margin.
- Total revenue was $318 million, up 22% year-over-year, and non-GAAP net income was $73 million, up 48% year-over-year.
- Subscription revenue grew 3% year-over-year to $63 million, while transaction revenue grew 25% year-over-year to $212 million.
- Total payment volume grew 11% year-over-year to $75 billion, with BILL's stand-alone TPV growth improving to 10% year-over-year in Q2 compared to 7% in Q1.
- Float revenue increased 50% year-over-year to $44 million, with a yield on FBO funds of 490 basis points in the quarter.
- Non-GAAP gross margin was 86%, above the target range due to favorable float revenue, but is expected to moderate to the low to mid-80s as the payment mix evolves and float revenue declines with lower interest rates.
- Non-GAAP operating expenses were flat sequentially at $229 million, with rewards expenses representing 49% of spend and expense card revenue.
- Non-GAAP operating income was $44 million or 14% of revenue, and non-GAAP net income was $73 million or 23% of revenue, up 48% year-over-year.
- Free cash flow grew 56% to $74 million for a free cash flow margin of 23%.
Strategic Priorities
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- Driving adoption of its integrated financial operations platform.
- Expanding its ecosystem by bringing more innovation to partners and attracting new partners.
- Enriching its payment experiences and driving penetration of its ad valorem solutions.
Challenges and Opportunities
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- Managing payment acceptance costs and taking actions to improve product experiences and increase payment timing and speed.
- Exploring API access and embedded finance opportunities to expand its distribution strategy and reach more SMBs.
- Adapting its marketing spend and customer acquisition strategies to align with its new focus on delivering strong growth in customers and revenue per customer.
- Considering extending the duration of their investment portfolio by exploring opportunities to lock in higher interest rates for a longer period as the macro environment changes.
- The partnership with Bank of America to serve their existing customers is being impacted by the bank's recent decision to broaden its firm-wide payment strategy.
- Discussions are ongoing with Bank of America to determine how to support their existing installed base of customers through the bank's new payment strategy.
This is why non-GAAP numbers are reported. $BILL is not and has never been profitable. And they only have op cash flow bc of amortization and SBC.
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