BILL’s third quarter results came in above Wall Street’s revenue and profit expectations, with management crediting strong execution and disciplined investment for the outcome. CEO René Lacerte highlighted the impact of new embedded partnerships and the rollout of AI-powered automation tools as key contributors to the company’s performance. The launch of BILL Cash Account and enhancements to the core platform further supported customer adoption, while a focus on operational efficiency drove profitability gains. Management emphasized that these strategic moves are designed to deepen customer engagement and expand BILL’s market reach.
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BILL (BILL) Q3 CY2025 Highlights:
- Revenue: $395.7 million vs analyst estimates of $391 million (10.4% year-on-year growth, 1.2% beat)
- Adjusted EPS: $0.61 vs analyst estimates of $0.51 (20.5% beat)
- Adjusted Operating Income: $68.24 million vs analyst estimates of $56.54 million (17.2% margin, 20.7% beat)
- The company slightly lifted its revenue guidance for the full year to $1.61 billion at the midpoint from $1.61 billion
- Management raised its full-year Adjusted EPS guidance to $2.18 at the midpoint, a 3.8% increase
- Operating Margin: -5.2%, down from -2.1% in the same quarter last year
- Customers: 498,100, up from 493,800 in the previous quarter
- Billings: $394.1 million at quarter end, up 9.8% year on year
- Market Capitalization: $5.2 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From BILL’s Q3 Earnings Call
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Andrew Schmidt (KeyBanc): Asked if the strategy to move upmarket was evident in current customer metrics. President John Rettig explained that while mid-market focus is growing, it will take time to materially shift the overall customer mix and revenue, but higher ARPU and unit economics are already becoming apparent.
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Keith Weiss (Morgan Stanley): Inquired about the scope and nature of the Embed 2.0 partnerships. CEO René Lacerte detailed that these are deep integrations with revenue-sharing models and joint go-to-market strategies, targeting nearly one million SMBs.
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Spencer Anson (SIG): Sought updates on invoice financing growth and profitability. CFO Rohini Jain responded that the emerging ad valorem portfolio, including invoice financing, grew nearly 40% year-over-year, with a focus on balancing risk and profitability.
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Tien-Tsin Huang (JPMorgan): Questioned the impact of focusing on larger clients and the pipeline for additional AI agents. Rettig noted improved engagement and ARPU with mid-market clients, while Lacerte and Jain described a two-pronged approach to AI agent monetization and ongoing product expansion.
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Christopher Svensson (Deutsche Bank): Asked for early results and revenue impact from the BILL Cash Account. Lacerte and Rettig emphasized increased transaction volume and longer cash retention on the platform, supporting both customer value and incremental revenue streams.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely monitor (1) adoption rates and customer engagement for the new embedded partnerships, (2) the rollout and monetization of additional AI-powered automation tools, and (3) BILL’s ability to improve margins through further cost actions and operational efficiencies. Updates on the uptake of the BILL Cash Account and progress in expanding mid-market customer penetration will also be important indicators of execution.
BILL currently trades at $52.13, up from $44.40 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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