BILL Holdings
Software that small businesses use to pay their bills and run company cards, earning a small fee every time money moves.
The scores
Growth3/4 ↓
Revenue net of rewards grew 9.7% and core 12.5% in FY2026, slowing from 65% in FY2023, while customers fell 3%.
Business quality2/4 ↓
Switching costs and the accountant channel are real, but QuickBooks, Ramp and Capital One sell the same job and customers fell.
Financial position3/4 →
Net cash about $84M and $354.7M of free cash flow, but $1.4B of notes due 2030 and a drawn revolver fund the buyback.
Execution record3/4 ↑
Eight straight beats and a raised FY2026 outlook, but customer adds slipped through the reorganisation and growth guidance stepped down.
Per share capture3/4 ↑
Buybacks cut shares about 14% since May, outrunning stock pay, but stock pay still takes about 14% of revenue.
Potential2/4 →
A market near $14B at its own price with about 8% of firms served, but growth needs agents unpriced and rivals held off.
Risk profile3/4 →
Card interchange rules, interest rates on customer funds and an unresolved sale process; no single customer dominates.
Valuation3/4 →
After stock pay the price needs about 9% yearly cash growth if the FY2027 guide lands, near management's own range.
Evidence quality3/4 →
Filed figures carry revenue, cash and debt, but retention, take rates and the AI plan rest on management's word.
If it works 1.1× · if it fails you keep about 100%.
The Verdict
We rate BILL Holdings Neutral. It is a mixed business: payment fees from about 479,000 small firms that keep growing, but QuickBooks and card companies now sell the same thing, and the customer count fell. The price is fair: it looks cheap on the company's adjusted profit, but once the shares it pays staff are counted as a cost, it needs next year's plan to land. As a bet it is defensive: the new AI agents could add a little, and almost all of today's value rests on the payments business alone.
The long caseIf agents do the bookkeeping, the firm that holds the payments and the data can charge for the work.
The evidence under this - 7 claims
Management says the change aligns with industry practice and improves comparability, so it is a presentation choice, not a loss of business.
Management attributes part of the fall to a deliberate move to larger customers and to leaving custom bank programmes (C30, C32).
- Management's range of low double digits to mid teens for core growth, with margins rising, would carry the guided base (C13b).
- Interest on customer funds, about a tenth of revenue, falls when rates do (C34), which the growth has to outrun.
Severance cash from the May 2026 job cuts falls partly in FY2027 (C14), which the ratio does not hold back.
The 10-K lists AI-native entrants among rivals and says AI lowers barriers to entry (C22).
The company
Paying a small firm's supplier bills means checking each one, getting the owner to approve it, writing a check or a bank transfer and recording it in the books. BILL does all of that online: bills arrive by email, are read automatically, approved by the right person and paid, and the books update themselves.
It also issues company cards with spending limits, and sells the same tools inside other companies' software. It is now building AI agents that do this work for them.
The evidence under this - 4 claims
Management attributes part of the fall to a deliberate move to larger customers and to leaving custom bank programmes (C30, C32).
The 10-K lists AI-native entrants among rivals and says AI lowers barriers to entry (C22).
How it makes money
Most of it is a small fee on each payment: a cut of every bank transfer, check or card payment it moves. On its cards it earns the fee shops pay, but hands about half back to users as rewards, which from July 2026 it subtracts from revenue. Monthly subscriptions bring in about a sixth, and interest on customers' money waiting to be paid out a little under a tenth, a slice that shrinks when interest rates fall.
The evidence under this - 4 claims
Management says the change aligns with industry practice and improves comparability, so it is a presentation choice, not a loss of business.
Where the money comes from, stream by stream
| Stream | Share of sales (FY2026) | How it earns it |
|---|---|---|
| Spend & Expense transaction fees | 41% | Interchange on Divvy card spending, of which rewards now netted out take about half. |
| AP/AR transaction fees | 30% | A fee per payment sent or received: ACH, card, check, cross-border and instant transfers. |
| Subscription fees | 18% | Monthly or yearly fees per user for AP/AR and Invoice2go, and from embedded partners. |
| Interest on customer funds | 9% | Interest earned on customers' money between collection and payout. |
| Embedded transaction fees | 2% | Payment fees earned inside partners' and banks' software. |
Who runs it
René Lacerte founded BILL and is chief executive and chair; he owns about 4%. Rohini Jain became finance chief in July 2025 and set the new profit targets. Starboard, an activist fund that owns about a tenth of the company, has a seat on the board after threatening a vote fight in 2025.
Bonuses pay on revenue and a profit measure that leaves out share-based pay. In September 2026 Lacerte sold about 257,000 shares near $49, outside a pre-set selling plan.
The evidence under this - 4 claims
The sales were about 7% of his holding, and the finance and product chiefs' sales the same week were under plans.
Why it wins, and who could beat it
Why customers come back
Once a business has its suppliers, approval rules and accounting link set up in BILL, and its accountant runs it there, moving is a chore. And the job is worth paying for: a survey of finance staff put the cost of sending one paper check at $2.01 to $4, against cents for an electronic payment.
That has held so far. Payment fees on the core product still grew 12% last year. But BILL no longer says how many customers stay, and the total using it fell.
The evidence under this - 4 claims
Total businesses fell 3% in FY2026 (C05) and Intuit offers the same job inside QuickBooks (C23).
The AP/AR fee per dollar paid is falling (C32) and customer adds slowed, the signs a substitute shows first.
Management attributes part of the fall to a deliberate move to larger customers and to leaving custom bank programmes (C30, C32).
The threat
Intuit added bill payment inside QuickBooks, the accounting software most small businesses already use, in 2023. Ramp, a private card company, and Brex, now owned by the bank Capital One, have added bill payment to their cards. Each can offer it as part of something the customer already pays for. BILL kept growing after Intuit's move, but the fee it earns per dollar paid is edging down.
The evidence under this - 3 claims
The AP/AR fee per dollar paid is falling (C32) and customer adds slowed, the signs a substitute shows first.
The rivals: INTU, COF, and 3 more that are private, in-house or listed abroad.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| INTU | Intuit QuickBooks bill payPriced against it: Not checked | Payments and finance software: AP/AR, Spend & Expense and embedded | On sale | Not checked |
| Private | RampPriced against it: Private | Payments and finance software: AP/AR, Spend & Expense and embedded | On sale | Private |
| COF | Capital One with BrexPriced against it: Not checked | Payments and finance software: AP/AR, Spend & Expense and embedded | On sale | Not checked |
| In-house | Banks' own bill pay and paper checksPriced against it: In-house | Payments and finance software: AP/AR, Spend & Expense and embedded | On sale | In-house |
| Private | AI-native finance start-upsPriced against it: Private | AI agents: the agentic platform and agent payments | On sale | Private |
How big it could get
How big this could get
The US has about 5.9 million businesses with employees. If each paid what the average BILL customer pays, about $2,400 a year, that would be about $14.2B a year. BILL counts about 479,000 businesses, roughly 8% of that number, though many tiny firms will never pay for software. The tailwind is real: business payments by bank transfer grew almost 10% in 2025 as firms moved away from checks.
The evidence under this - 4 claims
Many employer firms are too small to pay for a subscription, so the count overstates the buyers.
Management attributes part of the fall to a deliberate move to larger customers and to leaving custom bank programmes (C30, C32).
Where the growth is coming from, business by business
Where the growth is coming from
| Business | Share of revenue | Growth: last quarter | Last half-year | Last year | Share in 3 years at its half-year rate |
|---|---|---|---|---|---|
| Subscription And Transaction Fees | 92% | +15.8% | +15.8% | +15.7% | 95% |
| Interest On Funds Held For Customers | 8% | -4.5% | -5.6% | -8.3% | 5% |
| Whole company | 100% | +13.8% | +13.6% | +13.0% | 100% |
On the filed split through 2026-06-30, if each business keeps its last half-year's growth, the company grows about 14% next year and 15% in year 3, against 13.0% over the last twelve months. A scenario, not a forecast: no business holds its rate.
The results
The numbers
Sales grew 13% in the year to Jun 2026, about the same pace as the 13% in the year before.
Operating margin is −4.4%, up from −28% in the year to Jun 2023.
Running costs take 85¢ of each sales dollar, down from 127¢ in the year to Jun 2022.
Shareholders' money lost 0.3% a year, up from −9.9% in the year to Jun 2022.
It turned 25% of sales into free cash, $412M over the year.
It holds $1.94B of cash against $1.84B of debt, $101M more cash than it owes.
The share count fell 1.8% in 4.0 years, and pay in shares costs 14% of sales.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-31. Fiscal years end in June.
| Jun 2022 | Jun 2023 | Jun 2024 | Jun 2025 | Jun 2026 | |
|---|---|---|---|---|---|
| Size and growth | |||||
| Sales | $642M | $1.06B | $1.29B | $1.46B | $1.65B |
| Sales growth | +169% | +65% | +22% | +13% | +13% |
| Profit | |||||
| Gross margin | 77% | 82% | 82% | 81% | 81% |
| Operating margin | −49% | −28% | −13% | −5.5% | −4.4% |
| Net margin | −51% | −21% | −2.2% | 1.6% | −0.7% |
| What growth costs, per sales dollar | |||||
| Research and development | 34% | 30% | 26% | 23% | 18% |
| Sales and marketing | 48% | 49% | 37% | 37% | 37% |
| General and admin | 34% | 24% | 22% | 19% | 18% |
| Pay in shares | 31% | 30% | 19% | 17% | 14% |
| Capital spending | 0.8% | 0.7% | 0.1% | 0.3% | 0.2% |
| Cash | |||||
| Cash from operations | −$18.1M | $188M | $279M | $351M | $416M |
| Free cash flow | −$23.5M | $180M | $278M | $346M | $412M |
| Balance sheet | |||||
| Cash and short-term investments | $2.71B | $2.66B | $1.59B | $2.22B | $1.94B |
| Debt | $1.77B | $1.84B | $914M | $1.71B | $1.84B |
| Net cash | $932M | $820M | $673M | $504M | $101M |
| Returns and shares | |||||
| Return on capital | - | - | - | −1.2% | - |
| Shares (diluted) | 102M | 106M | 106M | 104M | 99.9M |
What growth costs
Sales rose about 56% from 2023 to 2026 while research and office costs barely moved, so the loss shrank year by year. The 2026 job cuts take more out. The cost that has not shrunk enough is pay in shares: about 14% of revenue last year, which the company's preferred profit figure leaves out.
The evidence under this - 4 claims
The last report (19 Aug)
Quarter ended June 2026, filed figures.
In the fourth quarter of fiscal 2026, to June, core revenue rose 16% to $400.5M and the value of payments grew 14%. The loss under accounting rules was $34.3M, mostly the cost of cutting staff. The profit management prefers to quote, which leaves out share-based pay and those costs, nearly doubled.
Two things went the other way. BILL added only about 1,800 customers, below its usual pace, and the fee it earns per dollar paid on bill payments slipped. For the year to June 2027 management expects growth of 10% to 14% after rewards, and a profit of well over $125M under accounting rules.
What it did to the thesisIt showed the cost cuts are real and that the plan now promises an accounting profit. It did not show growth holding up: customer additions slowed and the fee per payment slipped, so the question of whether rivals are chipping away stays open.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $0.84 against $0.71 expected.
The evidence under this - 5 claims
Management says the fall in AP/AR take rate came from large customers' ACH volume and would otherwise have been flat.
The guide carries 3 points of growth headwind the company itself names (C30), and the 104M share count includes 11.7M shares behind convertible notes it intends to settle mostly in cash (C09).
Management says the change aligns with industry practice and improves comparability, so it is a presentation choice, not a loss of business.
Gross margin and fraud losses also moved in Q4, so not all of the margin jump is the job cuts (C31).
What management did with the money
Since May 2026 it has bought back about 15 million shares, close to a seventh of the company, mostly near $35, under a $1.0B programme. It paid with cash from the business and borrowing, and still has about as much cash as debt.
Insiders in 2026Q3: 12 purchases and 26 sales, from their Form 4 filings.
The evidence under this - 2 claims
The price, and where we disagree
In short. Fair. Cheap on the company's preferred profit, but fair once share-based pay is counted, and only if next year's plan lands.
The shares fell from $97.41 in December 2024 to $31.96 in June 2026, then recovered to $48.31. In February 2026 Bloomberg reported a buyout firm in talks to buy the company. No deal was announced, and the company has since acted as if it will stay independent, with a large buyback and deep job cuts.
The next test comes fast: first-quarter results on 5 November 2026, the first reported with card rewards taken out of revenue.
The evidence under this - 5 claims
Neither the 10-K nor the proxy mentions a sale process, and the company announced a $1.0B buyback in May (C18).
A sale process can run without disclosure, and a buyer could return at a price (C17).
Q4 FY2026 added only about 1,800 customers (C32), below the range now guided.
How we read the multiple
The shares are worth about $4.12B in all. What has to be true:
1. Last year the business made $354.7M of spare cash, but paid $229.8M of staff in shares, leaving about $124.9M for owners. 2. A buyer wanting 9% a year sells in ten years at 15 times that cash. 3. From last year's base, that cash must grow about 18% a year. If next year's plan lands, about 10% is enough.
Management plans growth in the low teens, so the price pays for that plan and little more.
Against its own history. Buyers pay far less per dollar of sales than they used to, because growth has slowed from a startup's pace to a mature company's.
The evidence under this - 4 claims
- Management's range of low double digits to mid teens for core growth, with margins rising, would carry the guided base (C13b).
- Interest on customer funds, about a tenth of revenue, falls when rates do (C34), which the growth has to outrun.
Severance cash from the May 2026 job cuts falls partly in FY2027 (C14), which the ratio does not hold back.
Restructuring charges of $90.9M in FY2026 (C14) depressed cash from operations, so the year understates a normal one somewhat.
Priced against its rivals
Its rivals have not yet been checked against their own filings, so there is no group to price it against; the price is judged against its own history instead.
The bet: what it pays if it works
The bet is on BILL's AI agents: software that reads, approves and pays bills on a customer's behalf. Visa is testing payments by BILL's agent, but no agent has a price or sales yet.
Valued at a fair price, the payments business alone covers today's share price, so the agents come free. If they sell well they add only a little, so the bet is expensive. If they sell nothing, shareholders keep almost all of what they hold.
| AI agents: the agentic platform and agent payments revenue in two to three years | AP/AR customers paying for AI agents needed | At the stated multiple |
|---|---|---|
| $5.00M | about 15.5K at 25% kept | 1.0× |
| $20.00M (the big win) | about 62.1K at 25% kept | 1.1× |
| $50.00M | about 155.3K at 25% kept | 1.1× |
To pay 2× (a Fair bet) it would need about $998.69M of AI agents: the agentic platform and agent payments revenue (about 3.1M AP/AR customers paying for AI agents at 25% kept); to pay 5× (a Cheap bet), about $4.11B of AI agents: the agentic platform and agent payments revenue (about 12.8M AP/AR customers paying for AI agents at 25% kept), at the same multiple.
Each row is AI agents: the agentic platform and agent payments alone, plus the rest of the company (Payments and finance software: AP/AR, Spend & Expense and embedded) counted at about $4.30B.
The steps it has to take
- Done AI agents launched to customers
- In progress Live agent payments with Visa and Billtrust due 2027-06-30
- Not started A price or revenue figure disclosed for the agents due 2027-08-20
The detail behind the label
The evidence under this - 6 claims
The 10-K lists AI-native entrants among rivals and says AI lowers barriers to entry (C22).
Management attributes part of the fall to a deliberate move to larger customers and to leaving custom bank programmes (C30, C32).
Severance cash from the May 2026 job cuts falls partly in FY2027 (C14), which the ratio does not hold back.
- Management's range of low double digits to mid teens for core growth, with margins rising, would carry the guided base (C13b).
- Interest on customer funds, about a tenth of revenue, falls when rates do (C34), which the growth has to outrun.
Where we disagree with the market
A cheap fintech and a takeover candidate, at about 13 times next year's adjusted profit, with activists on the board.
Counted with share-based pay as a cost and revenue after card rewards, it is fairly priced if the plan lands, not cheap.
Most analysts rate it a buy, and the takeover reports keep a bid in mind. But the cheapness rests on a profit figure that leaves out share-based pay, and on revenue counted before card rewards. We could be wrong if profit under accounting rules beats the plan, or a buyer returns.
What analysts say, and the evidence
The evidence under this - 6 claims
Neither the 10-K nor the proxy mentions a sale process, and the company announced a $1.0B buyback in May (C18).
The guide carries 3 points of growth headwind the company itself names (C30), and the 104M share count includes 11.7M shares behind convertible notes it intends to settle mostly in cash (C09).
- Management's range of low double digits to mid teens for core growth, with margins rising, would carry the guided base (C13b).
- Interest on customer funds, about a tenth of revenue, falls when rates do (C34), which the growth has to outrun.
Management says the change aligns with industry practice and improves comparability, so it is a presentation choice, not a loss of business.
What could go wrong, and how we would know
The risks
- Rivals bundle the same job QuickBooks, Ramp and Capital One offer bill payment inside things customers already pay for, and BILL's customer count fell 3%.
- Card fee rules A court or card-network settlement capping card fees or allowing surcharges would cut the card business's income.
- Rewards eat card income Rewards took about half of card fees last year, and the biggest customers bargain hardest.
- Interest rates Interest on customer money falls when rates do, and it is almost a tenth of revenue.
- The founder sold The chief executive sold about 7% of his shares in September outside a pre-set plan.
The evidence under this - 7 claims
Management attributes part of the fall to a deliberate move to larger customers and to leaving custom bank programmes (C30, C32).
The sales were about 7% of his holding, and the finance and product chiefs' sales the same week were under plans.
Management renegotiated the top rewards tier in Q4 (C32), so the share may fall in FY2027.
What we still do not know
- Whether the sale process reported in February 2026 is over, and whether a buyer could return.
- How many customers stay each year; BILL no longer publishes it for all of them.
- How the AI agents will be priced, and whether anyone will pay for them.
The evidence under this - 4 claims
Neither the 10-K nor the proxy mentions a sale process, and the company announced a $1.0B buyback in May (C18).
A sale process can run without disclosure, and a buyer could return at a price (C17).
Total businesses fell 3% in FY2026 (C05) and Intuit offers the same job inside QuickBooks (C23).
The 10-K lists AI-native entrants among rivals and says AI lowers barriers to entry (C22).
What would change our view
- Neutral→AttractiveA price that pays for the cash already made
It needs all of:
- ○The shares fall to 9 times last year's spare cash, with next year's plan intact.checked daily
- ○Core revenue after card rewards grows 10% or more from a year earlier at the next report.checked at the next results, due by 5 Nov
- Neutral→AttractiveProof the business is profitable and growing
It needs all of:
- ○Profit from operations under accounting rules reaches 8% of revenue after rewards over four quarters.checked at the next results, due by 5 Nov
- ○The number of businesses using BILL grows from a year earlier again.checked at the next results, due by 5 Nov
We would also be wrong if
- Core revenue after card rewards grows less than 8% in any quarter of the year to June 2027.
- Profit under accounting rules for that year falls short of $125M.
- Card rewards take more than 55% of card fees for that year.
What is coming
- 5 November 2026 Q1 FY2027 results: Whether growth net of rewards holds at 10% to 14% and customer adds recover after the job cuts.
Every dated event ahead
- 5 November 2026 Q1 FY2027 results: Whether growth net of rewards holds at 10% to 14% and customer adds recover after the job cuts.
- 10 December 2026 2026 annual meeting: How shareholders vote on the board Starboard helped reshape.
- 1 April 2027 2027 convertible notes mature: Whether $123.5M is repaid from cash without new borrowing.
Since we wrote this
- 1 NovThesis writtenNeutral, medium convictionWritten four days before the Q1 FY2027 results, at the Futures tab's request, after the shares recovered from $31.96 in June to $48.31.
Sources 14
Sources - 14
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-08-20business, products, competition, revenue by product, key metrics, restructuring, convertible notes, interchange and float risks, share countbacksC01C02C03C05C08C09C10C11C13C14C18C22C27C28C33C34C37C38C39C40C41
- S02primarycompany release2026-08-19FY2026 and Q4 results, fiscal 2027 guidance, cash flow statement, non-GAAP reconciliation
Core revenue, which consists of subscription and transaction fees, was $1,504.7 million, an increase of 16% year-over-year.
backsC02C04C05C06C07C08C11C12C31C34C36 - S03primarycompany release2026-10-15eight quarters of revenue restated net of card rewards
Under the new accounting principle, these rewards are classified as a reduction of revenue within subscription and transaction fees.
backsC04C27C41 - S04primarycompany release2026-05-07Q3 results, the $1.0B buyback authorisation, businesses served
BILL announced today that its Board of Directors has authorized the repurchase of up to $1.0 billion in shares of its outstanding common stock.
backsC10C18 - S05primarytranscript2026-08-19take rates, reward rate, net adds, savings from the job cuts, GAAP profit and stock pay guidance, AI and Embed 2.0 plans, analyst questions
We expect to generate well over $125 million of GAAP profits for the full year.
backsC06C07C10C12C13bC15C18C28C30C32C39 - S06primarycompany filing2026-10-27ownership table, Starboard cooperation agreement, board changes, pay design and payoutsbacksC16C18C19C35C36
- S07primarycompany filing2026-09-04the chief executive's open-market sales and the absent Rule 10b5-1 flagbacksC19
- S08secondaryvendor data2026-10-31Research pack (FMP market tier, FINRA short interest, Form 4 feed), frozen at content/BILL/research-pack.jsoncontent/BILL/research-pack.jsondaily closes, the analyst split and its series, short interest, consensus estimates, the next report datebacksC11C14C19C20C21C42
- S09tertiarynews2026-02-09the reported buyout talks and the three activist investors
Hellman & Friedman has held talks about a potential purchase of business payments provider Bill Holdings, Bloomberg reported, citing people familiar with the situation.
backsC17 - S10primarycompany filing2026-09-09Intuit's own bill pay inside QuickBooks
QuickBooks Online and Intuit Enterprise Suite allow small and mid-market businesses to manage their accounts payable through efficient bill ingestion, bill payment, custom workflows, and vendor management
backsC23C40 - S11primaryindustry data2022-02-14Nacha, 'ACH Costs are a Fraction of Check Costs for Businesses, AFP Survey Shows' Nacha, reporting the Association for Financial Professionals' 2022 Payments Cost Benchmarking Surveywhat a paper check and an ACH payment cost a business
ACH costs are a far cry from issuing paper checks, which come with an across-the-board median cost of between $2.01 and $4.
backsC24C39 - S12primaryindustry data2026-01-29Nacha, 'Same Day ACH and Business-to-Business Payments Propel ACH Network Volume Growth in 2025' Nachathe pace at which business payments move to the ACH network
Business-to-business volume grew almost 10% in 2025, with close to 8.1 billion B2B payments.
backsC25 - S13primarygovernment data2024-12-19US Census Bureau, 2023 Annual Business Survey release on employer businesses (reference year 2022) US Census Bureauthe number of US businesses with employees
there were approximately 5.9 million U.S. employer firms, of which 1.3 million (22.6%) were minority-owned
backsC26C27 - S14primarycompany release2026-10-20the agent-payment pilot, from the card network's side
today announced they have launched the first live pilot to enable trusted AI agents to initiate and complete approved buyer invoice payments end-to-end through supplier portals.
backsC29