Billing and payments software maker Bill.com (NYSE:BILL) beat analyst expectations in the first quarter of fiscal 2024, with revenue up 18.5% year-over-year to $323 million. On top of that, revenue guidance for the next quarter ($325 million at the midpoint) was surprisingly good and 3.3% above what analysts were expecting. It posted non-GAAP earnings of $0.60 per share, improving on its earnings of $0.50 per share in the same quarter last year.
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Bill.com (BILL) Q1 CY2024 Highlights:
- Revenue: $323 million vs. analyst estimates of $306 million (5.6% beat)
- EPS (non-GAAP): $0.60 vs. analyst estimates of $0.54 (12.1% beat)
- Revenue Guidance for the Second Quarter of Fiscal Year 2024 is $325 million at the midpoint, above analyst estimates of $314.5 million.
- Gross Margin (GAAP): 83%, compared to 86.1% in the same quarter last year
- Free cash flow of $62.96 million, 15.2% less than the previous quarter
- Market capitalization: $6.60 billion
Founded by René Lacerte in 2006 after selling his previous accounting and payroll software company PayCycle to To sense (NASDAQ:), Bill.com (NYSE:BILL) is a software-as-a-service platform that aims to facilitate payments and billing processes for small and medium-sized businesses.
Finance and Accounting Software Finance and accounting software benefits from dual trends around cost savings and ease of use. First, there is the introduction of SaaS to businesses, large and small, who prefer the flexibility of cloud-based, web-browser-delivered software, paid for by subscription, than the hassle and expense of purchasing and managing on-premise enterprise software. . Second is the consumerization of enterprise software, whereby multiple independent processes, such as supply chain and tax management, are aggregated into a single, easy-to-use platform.
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Sales Growth As you can see below, Bill.com's revenue growth has been incredible over the past three years, going from $59.74 million in Q3 2021 to $323 million this quarter.
This quarter, Bill.com's quarterly revenue again increased by 18.5% year-over-year. However, its growth slowed compared to the last quarter as the company's revenue increased only $4.53 million in the first quarter compared to $13.51 million in the fourth quarter of fiscal 2023. While we would like to see a larger increase in revenue each quarter, a one-time fluctuation is generally not concerning.
Next quarter guidance suggests Bill.com expects revenue to grow 9.8% year-over-year to $325 million, slowing the 47.8% year-over-year increase it posted in the same quarter last year. Looking ahead, analysts covering the company expected sales to grow 9.1% over the next 12 months before the earnings results were announced.
Cash is King If you've followed StockStory for a while, you know that we emphasize free cash flow. Why do you ask? We believe that in the end, cash is king and you can't use accounting profits to pay the bills. Bill.com's free cash flow amounted to $62.96 million in the first quarter, an increase of 163% year-over-year.
Bill.com has generated $257.7 million in free cash flow over the trailing 12 months, an impressive 20.7% of revenue. This high FCF margin is due to its asset-light business model and strong competitive positioning, giving it the option to return capital to shareholders or reinvest in its business while maintaining a cash cushion.
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Key Takeaways from Bill.com's First Quarter ResultsWe enjoyed seeing Bill.com beat analyst revenue expectations this quarter. We were also pleased that next quarter's revenue guidance came in above Wall Street estimates. On the other hand, its gross margin decreased. Overall, we think this was a really good quarter that should please shareholders. However, investors were probably expecting more, and the stock is down 2% after the report, trading at $62 per share.
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