Business Wire | Aug 27, 2020 04:05PM EDT

Bill.com Reports Fourth Quarter and Fiscal 2020 Financial Results

Aug. 27, 2020

PALO ALTO, Calif.--(BUSINESS WIRE)--Aug. 27, 2020--Bill.com (NYSE: BILL), a leading provider of cloud-based software that simplifies, digitizes, and automates complex back-office financial operations for small and midsize businesses, today announced financial results for the fourth fiscal quarter and fiscal year ended June 30, 2020.

"We capped off the end of our fiscal year with very strong financial results," noted Bill.com CEO Ren Lacerte. "In addition, we saw continued success in strengthening our partnerships with both new and existing financial institutions, accounting software companies and accounting firms. The momentum in our go-to-market distribution efforts, combined with our purpose-built platform for SMBs, give us confidence to believe that we are well-positioned for continued success," concluded Mr. Lacerte.

Financial Highlights for the Fourth Quarter of Fiscal 2020

* Total revenue was $42.1 million, an increase of 33% from the fourth quarter of fiscal 2019. Subscription and transaction revenue was $38.8 million, an increase of 54% from the fourth quarter of fiscal 2019. * GAAP gross profit was $32.0 million, representing a 76.0% gross margin, compared to $23.2 million, or a 73.2% gross margin, in the fourth quarter of fiscal 2019. Non-GAAP gross profit was $33.1 million, representing a 78.6% non-GAAP gross margin, compared to $24.1 million, or a 76.1% non-GAAP gross margin in the fourth quarter of fiscal 2019. * Loss from operations was $10.3 million, compared to a loss from operations of $5.2 million in the fourth quarter of fiscal 2019. Non-GAAP loss from operations was $2.6 million, compared to a non-GAAP loss from operations of $3.2 million in the fourth quarter of fiscal 2019. * Net loss was $9.5 million, or ($0.13) per share, basic and diluted, compared to net loss of $4.5 million, or ($0.56) per share, basic and diluted, in the fourth quarter of fiscal 2019. Non-GAAP net loss was $1.8 million, or ($0.02) per share, basic and diluted, compared to non-GAAP net loss of $2.4 million, or ($0.04) per share, basic and diluted, in the fourth quarter of fiscal 2019. * Cash, cash equivalents and short-term investments were $697.6 million at June 30, 2020.

Financial Highlights for Fiscal Year 2020

* Total revenue was $157.6 million, an increase of 45% from the prior fiscal year. Subscription and transaction revenue was $136.4 million, an increase of 59% from the prior fiscal year. * GAAP gross profit was $118.5 million, representing a 75.2% gross margin, compared to $78.4 million, or a 72.4% gross margin, from the prior fiscal year. Non-GAAP gross profit was $123.2 million, representing a 78.2% non-GAAP gross margin, compared to $82.2 million, or a 75.8% non-GAAP gross margin, from the prior fiscal year. * Loss from operations was $34.2 million, compared to a loss from operations of $9.8 million in the prior fiscal year. Non-GAAP loss from operations was $15.0 million, compared to a non-GAAP loss from operations of $5.1 million in the prior fiscal year. * Net loss was $31.1 million, or ($0.70) per share, basic and diluted, compared to net loss of $7.3 million, or ($0.94) per share, basic and diluted, in the prior fiscal year. Non-GAAP net loss was $11.1 million, or ($0.17) per share, basic and diluted, compared to non-GAAP net loss of $2.6 million, or ($0.05) per share, basic and diluted, in the prior fiscal year.

Business Highlights and Recent Developments

* Served over 98,000 customers as of the end of the fourth quarter of fiscal 2020, representing year-over-year customer growth of 28%. * Processed $25.4 billion in total payment volume on our platform in the fourth quarter, an increase of 26% year-over-year. For the full fiscal year, processed $96.5 billion in total payment volume on our platform, an increase of 35% over last fiscal year. * Processed 5.6 million transactions in the fourth quarter of fiscal 2020 and 23.9 million in the full fiscal year. * At the end of the fourth quarter, Bill.com had over 2.5 million network members, an increase of 39% year-over-year. * Expanded an existing agreement with one of the top three banks in the U.S. to serve its SMB customers. * Extended an agreement with Intuit to jointly promote our standalone offering to customers of QuickBooks Online Advanced as part of Intuit's application ecosystem. * Partnered with KeyBank to introduce Key CashFlow(r), an online banking solution that streamlines payments for KeyBank's SMB customers as well as their commercial customers. * Completed a follow-on public offering of 8,280,000 shares of our common stock, including the exercise in full of the underwriters' option to purchase an additional 1,080,000 shares of our common stock. We sold 4,330,000 shares of our common stock in the offering, and selling stockholders sold 3,950,000 shares of common stock in the offering.

Conference Call

In conjunction with this announcement, Bill.com will host a conference call at 1:30 p.m. PT (4:30 p.m. ET) today to discuss the fourth quarter and fiscal year 2020 results, as well as our outlook for the first quarter of fiscal 2021. The conference call will be available via live webcast and replay at the Investor Relations section of Bill.com's website: https://investor.bill.com/events-and-presentations/default.aspx .

About Bill.com

Bill.com is a leading provider of cloud-based software that simplifies, digitizes, and automates complex, back-office financial operations for small and midsize businesses. Customers use the Bill.com platform to manage end-to-end financial workflows and to process payments. The Bill.com AI-enabled, financial software platform creates connections between businesses and their suppliers and clients. It helps manage cash inflows and outflow. The company partners with several of the largest U.S. financial institutions, the majority of the top 100 U.S. accounting firms, and popular accounting software providers. Bill.com has offices in Palo Alto, California and Houston, Texas. For more information, visit www.bill.com .

Note on Forward-Looking Statements

This press release and the accompanying conference call include forward-looking statements, which are statements other than statements of historical facts, and statements in the future tense. Forward-looking statements are based on our expectations as of the date of this press release and are subject to a number of risks, uncertainties and assumptions, many of which involve factors or circumstances that are beyond our control. These statements include, but are not limited to, statements regarding our expectations for future performance and results in the fourth quarter of fiscal 2020, the growth of demand on our platform and the expansion of our customers' utilization of our services. These risks and uncertainties include, but are not limited to, the novel coronavirus pandemic (COVID-19) and its impact on our employees, customers, strategic partners, vendors, results of operations, liquidity and financial condition, our history of operating losses, our recent rapid growth, the large sums of customer funds that we transfer daily, the risk of loss, errors and fraudulent activity, the market, interest rate, foreign exchange and other conditions that the customer funds we hold in trust are subject to, our ability to attract new customers and convert trial customers into paying customers, our ability to develop new products and services, increased competition or new entrants in the marketplace, potential impact of acquisitions and investments, changes in staffing levels, and other risks detailed in registration statements and periodic reports we file with the SEC, including our quarterly report on Form 10-Q filed with the SEC on May 8, 2020, and our annual report on Form 10-K for the fiscal year ended June 30, 2020 to be filed with the SEC, and which may be obtained on the Investor Relations section of Bill.com's website ( https://investor.bill.com/financials/sec-filings/default.aspx) and on the SEC website at www.sec.gov. Actual results may differ materially from those presently reported. All forward-looking statements in this press release are based on information available to us as of the date hereof. We assume no obligation to update the information contained in this press release or the accompanying conference call.

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), this press release and the accompanying tables contain, and the conference call will contain, non-GAAP financial measures, including non-GAAP loss from operations, non-GAAP net loss and non-GAAP net loss per share, basic and diluted. The non-GAAP financial information is presented for supplemental informational purposes only and is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. However, it is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry.

We adjust the following items from one or more of our non-GAAP financial measures:

Stock-based compensation expense. We exclude stock-based compensation expense, which is a non-cash expense, from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance. In particular, companies calculate stock- based compensation expenses using a variety of valuation methodologies and subjective assumptions.

Employer payroll tax expense related to employee stock-based compensation: We exclude payroll tax expense related to employee stock-based transactions because we believe that excluding this item provides meaningful supplemental information regarding operational performance. In particular, this expense is dependent on the price of our common stock and other factors that are beyond our control and do not correlate to the operation of our business. Employer payroll tax expense related to employee stock-based compensation was not material for all previous periods presented, and therefore it was excluded from periods prior to June 30, 2020.

Depreciation and amortization expense. We exclude depreciation and amortization expenses from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance.

Capitalized internal-use software and amortization. We include capitalization and exclude the subsequent amortization of internal-use software costs in certain of our non-GAAP financial measures. We capitalize direct costs incurred related to obtaining or developing internal-use software during the application development stage and we amortize those costs over the estimated useful lives of the software. The capitalization and subsequent amortization of those costs can vary every period depending on our business needs and the timing on the software's availability for its intended use. We believe that including or excluding the effect of the capitalized internal-use software in certain of our non-GAAP financial measures provides us useful information in evaluating and comparing the consistency of our operating performance on a period-to-period basis.

Capitalized sales commissions and amortization. We include capitalization and exclude the subsequent amortization of sales commissions in certain of our non-GAAP financial measures. We capitalize sales commissions that are incremental costs in obtaining new customer contracts and we amortize such costs over the benefit period of our relationship with the acquired customers. We believe that including or excluding the effect of the capitalization of sales commissions in certain of our non-GAAP financial measures in a given period provides us useful information in evaluating and comparing the consistency of our performance in acquiring new customer contracts on a period-to-period basis.

Capitalized service costs and amortization. We include capitalization and exclude the subsequent amortization of service costs in certain of our non-GAAP financial measures. These service costs, which primarily consist of direct payroll costs, pertain to the implementation services that we provide to our financial institution customers and certain SMB customers prior to the launching of our product for general use. We capitalize such service costs and amortize them over the estimated benefit period. Our implementation service is generally a non-recurring type of service that we perform for our new customers. We believe that including or excluding the effect of the capitalization of service costs in certain of our non-GAAP financial measures provides us useful information in evaluating and comparing the consistency of our operating performance on a period-to-period basis.

Gain or loss on revaluation of warrant liabilities and gain on forfeiture of warrants. We exclude gain or loss on revaluation of warrant liabilities and gain on forfeiture of warrants, which is a non-cash income or expense, from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance.

Stock warrants expense. We exclude stock warrants expense, which is a non-cash expense, from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance.

There are material limitations associated with the use of non-GAAP financial measures since they exclude significant expenses and income that are required by GAAP to be recorded in our financial statements. Please see the reconciliation tables at the end of this release for the reconciliation of GAAP and non-GAAP results.

BILL.COM HOLDINGS, INC.CONSOLIDATED BALANCE SHEETS(Unaudited, in thousands) June 30,

2020 2019

ASSETSCurrent assets:Cash and cash equivalents $ 573,643 $ 90,306

Short-term investments 123,974 71,969

Accounts receivable, net 4,252 4,398

Unbilled revenue 6,549 4,795

Prepaid expenses and other current assets 26,781 12,326

Funds held for customers 1,644,250 1,329,306

Total current assets 2,379,449 1,513,100

Property and equipment, net 13,866 6,557

Other assets 10,700 6,641

Total assets $ 2,404,015 $ 1,526,298

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERREDSTOCK AND STOCKHOLDERS' EQUITY (DEFICIT)Current liabilities:Accounts payable $ 3,478 $ 5,063

Accrued compensation and benefits 12,387 4,333

Other accrued and current liabilities 8,541 6,556

Redeemable convertible preferred stock warrant - 688 liabilitiesDeferred revenue 5,891 3,469

Line of credit borrowings 2,300 -

Customer fund deposits 1,644,250 1,329,306

Total current liabilities 1,676,847 1,349,415

Deferred revenue, non-current 2,622 1,786

Other long-term liabilities 13,827 1,447

Total liabilities 1,693,296 1,352,648

Commitments and contingenciesRedeemable convertible preferred stock - 276,307

Stockholders' equity (deficit):Common stock 2 1

Additional paid-in capital 857,044 14,672

Accumulated other comprehensive income 2,420 326

Accumulated deficit (148,747 ) (117,656 )

Total stockholders' equity (deficit) 710,719 (102,657 )

Total liabilities, redeemable convertible $ 2,404,015 $ 1,526,298 preferred stock and stockholders' equity(deficit)

BILL.COM HOLDINGS, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited, in thousands except per share amounts) Three months ended June Year ended June 30, 30,

2020 2019 2020 2019

RevenueSubscription and $ 38,801 $ 25,225 $ 136,405 $ 85,951 transaction feesInterest on funds held 3,309 6,459 21,195 22,400 for customersTotal revenue 42,110 31,684 157,600 108,351

Cost of revenue ^(1) 10,100 8,488 39,144 29,918

Gross profit 32,010 23,196 118,456 78,433

Operating expensesResearch and development 14,929 9,447 53,405 28,924 ^(1)Sales and marketing ^(1) 11,796 9,949 45,356 30,114

General and 15,546 8,953 53,893 29,198 administrative ^(1)Total operating expenses 42,271 28,349 152,654 88,236

Loss from operations (10,261 ) (5,153 ) (34,198 ) (9,803 )

Other income, net 764 596 3,160 2,333

Loss before provision for (9,497 ) (4,557 ) (31,038 ) (7,470 )(benefit from) incometaxesProvision for (benefit 1 (59 ) 53 (156 )from) income taxesNet loss $ (9,498 ) $ (4,498 ) $ (31,091 ) $ (7,314 )

Net loss per shareattributable to common $ (0.13 ) $ (0.56 ) $ (0.70 ) $ (0.94 )stockholders, basic anddilutedWeighted-average numberof common shares used tocompute net loss per 74,141 8,088 44,106 7,797 share attributable tocommon stockholders,basic and diluted ^(1) Includes stock-basedcompensation expense asfollows:Cost of revenue $ 476 $ 126 $ 1,257 $ 331

Research and development 2,274 397 5,495 1,128

Sales and marketing 1,134 336 2,777 922

General and 3,744 646 8,535 1,701 administrative $ 7,628 $ 1,505 $ 18,064 $ 4,082

BILL.COM HOLDINGS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited, in thousands) Three months ended June 30, Year ended June 30,

2020 2019 ^(1) 2020 2019 ^(1)

Cash flows fromoperatingactivities:Net loss $ (9,498 ) $ (4,498 ) $ (31,091 ) $ (7,314 )

Adjustments toreconcile netloss to net cashused in operatingactivities:Depreciation and 1,052 735 4,257 3,154 amortizationStock-based 7,628 1,505 18,064 4,082 compensationAccretion ofdiscount on (960 ) (434 ) (3,815 ) (1,319 )investment inmarketable debtsecuritiesRevaluation ofwarrant - 164 717 25 liabilities andforfeiture ofwarrantsIssuance of - 135 - 274 warrantsDeferred income - (63 ) - (176 )taxesChanges in assetsand liabilities:Accounts (2,012 ) (394 ) (1,054 ) (2,098 )receivableUnbilled revenue 802 (363 ) (554 ) (1,748 )

Prepaid expenses 409 (1,349 ) (10,434 ) (5,690 )and other currentassetsOther assets (3,881 ) (191 ) (4,928 ) (995 )

Accounts payable (121 ) 31 (1,596 ) 3,171

Accrued and other 2,862 2,554 9,755 4,336 currentliabilitiesOther long-term 2,302 514 12,991 302 liabilitiesDeferred revenue 314 (217 ) 3,258 47

Net cash used in (1,103 ) (1,871 ) (4,430 ) (3,949 )operatingactivitiesCash flows frominvestingactivities:Purchases ofcorporate and (257,917 ) (197,217 ) (1,088,611 ) (830,622 )customer fundshort-terminvestmentsProceeds frommaturities ofcorporate and 209,689 143,489 806,000 694,303 customer fundshort-terminvestmentsProceeds fromsale of corporate 20,822 - 46,159 54,715 and customer fundshort-terminvestmentsDecrease(increase) inother receivables 5,642 (2,337 ) (959 ) (10,203 )included in fundsheld forcustomersPurchases of (5,701 ) (484 ) (11,437 ) (2,743 )property andequipmentCapitalization of (150 ) (241 ) (639 ) (1,556 )internal-usesoftware costsNet cash used in (27,615 ) (56,790 ) (249,487 ) (96,106 )investingactivitiesCash flows fromfinancingactivities:Proceeds fromissuance ofcommon stock uponinitial publicoffering, net ofunderwriting (63 ) - 225,481 - discounts andcommissions andother offeringcosts (payment ofother offeringcosts)Proceeds fromissuance ofcommon stock uponsecondary publicoffering, net of 308,176 - 308,176 - underwritingdiscounts andcommissions andother offeringcostsProceeds fromissuance ofredeemableconvertible - (2,715 ) - 85,160 preferred stock,net of issuancecosts (payment ofissuance costs)Increase incustomer fund 290,698 149,396 314,944 414,293 depositsliabilityProceeds from - - 2,300 - line of creditborrowingsPayments on bank - (8,667 ) - (9,500 )borrowingsProceeds from 10,486 386 12,232 1,702 exercise of stockoptionsProceeds from - - 144 - exercise of stockwarrantsPayments of - - (151 ) - deferred debtissuance costsNet cash provided 609,297 138,400 863,126 491,655 by financingactivitiesNet increase incash, cashequivalents, 580,579 79,739 609,209 391,600 restricted cash,and restrictedcash equivalentsCash, cashequivalents,restricted cash, 1,011,798 903,429 983,168 591,568 and restrictedcash equivalents,beginning ofperiodCash, cashequivalents,restricted cash, $ 1,592,377 $ 983,168 $ 1,592,377 $ 983,168 and restrictedcash equivalents,end of period Reconciliation ofcash, cashequivalents,restricted cash,and restrictedcash equivalentswithin theconsolidatedbalance sheets tothe amounts shownin theconsolidatedstatements ofcash flows above:Cash and cash $ 573,643 $ 90,306 $ 573,643 $ 90,306 equivalentsRestricted cash 35 256 35 256 included in othercurrent assetsRestricted cash - 550 - 550 included in otherassetsRestricted cashand restrictedcash equivalents 1,018,699 892,056 1,018,699 892,056 included in fundsheld forcustomersTotal cash, cashequivalents,restricted cash, $ 1,592,377 $ 983,168 $ 1,592,377 $ 983,168 and restrictedcash equivalents,end of period ^(1) Amounts have been adjusted to reflect the adoption of Accounting StandardsUpdate No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash.

BILL.COM HOLDINGS, INC.RECONCILIATION OF GAAP TO NON-GAAP DATATHREE MONTHS ENDED JUNE 30, 2020(Unaudited, in thousands except percentages and per share amounts) Other Stock-based costs GAAP compensation and Non-GAAP expense operating expenses ^(1)Total revenue $ 42,110 $ - $ - $ 42,110

Cost of revenue 10,100 (476 ) (608 ) 9,016

Gross profit 32,010 476 608 33,094

Gross margin 76.0 % 1.1 % 1.4 % 78.6 %

Operating expensesResearch and development 14,929 (2,274 ) 67 12,722

Sales and marketing 11,796 (1,134 ) 1,306 11,968

General and administrative 15,546 (3,744 ) (789 ) 11,013

Loss from operations (10,261 ) 7,628 24 (2,609 )

Other income, net 764 - - 764

Loss before benefit from (9,497 ) 7,628 24 (1,845 )income taxesProvision for income taxes 1 - - 1

Net loss $ (9,498 ) $ 7,628 $ 24 $ (1,846 )

Net loss per shareattributable to common $ (0.13 ) $ (0.02 )stockholders, basic anddiluted ^(2) Weighted-average number ofcommon shares used to computenet loss per share 74,141 74,141 attributable to commonstockholders, basic anddiluted ^(1) Other costs and operating expenses adjustments consist ofdepreciation and amortization expense of $1.0 million, and payrolltaxes related to stock based compensation of $1.4 million; offsetby capitalization of contract and service costs (net ofamortization) of $2.4 million. ^(2) GAAP net loss per share attributable to common $ (0.13 )stockholders, basic and dilutedStock-based compensation 0.10 expenseDepreciation and amortization and other 0.01 expense adjustmentsNon-GAAP net loss per share attributable to common $ (0.02 )stockholders, basic and diluted

BILL.COM HOLDINGS, INC.RECONCILIATION OF GAAP TO NON-GAAP DATATHREE MONTHS ENDED JUNE 30, 2019(Unaudited, in thousands except percentages and per share amounts) Other Stock-based costs GAAP compensation and Non-GAAP expense operating expenses ^ (1)Total revenue $ 31,684 $ - $ - $ 31,684

Cost of revenue 8,488 (126 ) (801 ) 7,561

Gross profit 23,196 126 801 24,123

Gross margin 73.2 % 0.4 % 2.5 % 76.1 %

Operating expensesResearch and development 9,447 (397 ) 52 9,102

Sales and marketing 9,949 (336 ) 542 10,155

General and administrative 8,953 (646 ) (260 ) 8,047

Loss from operations (5,153 ) 1,505 467 (3,181 )

Other income, net 596 - 128 724

Loss before provision for (4,557 ) 1,505 595 (2,457 )income taxesBenefit from income taxes (59 ) - - (59 )

Net loss $ (4,498 ) $ 1,505 $ 595 $ (2,398 )

Net loss per shareattributable to common $ (0.56 ) $ (0.04 )stockholders, basic anddiluted ^(2) Weighted-average number ofcommon shares used to computenet loss per share 8,088 60,523 attributable to commonstockholders, basic anddiluted ^(3) ^(1) Other costs and operating expenses adjustments consist ofdepreciation and amortization expense of $0.7 million, loss onrevaluation of redeemable convertible preferred stock warrantliabilities of $0.1 million, and warrant expense of $0.2 million;offset by capitalization of contract and service costs (net ofamortization) of $0.4 million. ^(2) GAAP net loss per share attributable to common $ (0.56 )stockholders, basic and dilutedStock-based compensation 0.19 expenseDepreciation and amortization and other 0.07 expense adjustmentsImpact of the assumed conversion of redeemable 0.26 convertible preferred stockNon-GAAP net loss per share attributable to common $ (0.04 )stockholders, basic and diluted ^(3) Shares used to compute GAAP net loss per share 8,088 attributable to common stockholders, basic and dilutedWeighted average effect of the assumed conversion of 52,435 redeemable convertible preferred stock from the date ofissuanceShares used to compute non-GAAP net loss per share 60,523 attributable to common stockholders, basic and diluted

BILL.COM HOLDINGS, INC.RECONCILIATION OF GAAP TO NON-GAAP DATAYEAR ENDED JUNE 30, 2020(Unaudited, in thousands except percentages and per share amounts) Other Stock-based costs GAAP compensation and Non-GAAP expense operating expenses ^ (1)Total revenue $ 157,600 $ - $ - $ 157,600

Cost of revenue 39,144 (1,257 ) (3,535 ) 34,352

Gross profit 118,456 1,257 3,535 123,248

Gross margin 75.2 % 0.8 % 2.2 % 78.2 %

Operating expensesResearch and development 53,405 (5,495 ) 520 48,430

Sales and marketing 45,356 (2,777 ) 2,953 45,532

General and administrative 53,893 (8,535 ) (1,114 ) 44,244

Loss from operations (34,198 ) 18,064 1,176 (14,958 )

Other income, net 3,160 - 717 3,877

Loss before provision for (31,038 ) 18,064 1,893 (11,081 )income taxesProvision for income taxes 53 - - 53

Net loss $ (31,091 ) $ 18,064 $ 1,893 $ (11,134 )

Net loss per shareattributable to common $ (0.70 ) $ (0.17 )stockholders, basic anddiluted ^(2) Weighted-average number ofcommon shares used tocompute net loss per share 44,106 67,458 attributable to commonstockholders, basic anddiluted ^(3) ^(1) Other costs and operating expenses adjustments consist ofdepreciation and amortization expense of $4.3 million, payrolltaxes related to stock based compensation of $1.4 million, andloss on revaluation of redeemable convertible preferred stockwarrant liabilities of $0.7 million; offset by capitalization ofcontract and service costs (net of amortization) of $4.5 million. ^(2) GAAP net loss per share attributable to common $ (0.70 )stockholders, basic and dilutedStock-based compensation 0.41 expenseDepreciation and amortization and other 0.04 expense adjustmentsImpact of the assumed conversion of redeemabble 0.08 convertible preferred stockNon-GAAP net loss per share attributable to common $ (0.17 )stockholders, basic and diluted ^(3) Shares used to compute GAAP net loss per share 44,106 attributable to common stockholders, basic and dilutedWeighted average effect of the assumed conversion of 23,352 redeemable convertible preferred stock from the date ofissuanceShares used to compute non-GAAP net loss per share 67,458 attributable to common stockholders, basic and diluted

BILL.COM HOLDINGS, INC.RECONCILIATION OF GAAP TO NON-GAAP DATAYEAR ENDED JUNE 30, 2019(Unaudited, in thousands except percentages and per share amounts) Other Stock-based costs GAAP compensation and Non-GAAP expense operating expenses ^ (1)Total revenue $ 108,351 $ - $ - $ 108,351

Cost of revenue 29,918 (331 ) (3,390 ) 26,197

Gross profit 78,433 331 3,390 82,154

Gross margin 72.4 % 0.3 % 3.1 % 75.8 %

Operating expensesResearch and development 28,924 (1,128 ) 2,056 29,852

Sales and marketing 30,114 (922 ) 1,368 30,560

General and administrative 29,198 (1,701 ) (623 ) 26,874

Loss from operations (9,803 ) 4,082 589 (5,132 )

Other income, net 2,333 - - 2,333

Loss before benefit from (7,470 ) 4,082 589 (2,799 )income taxesBenefit from income taxes (156 ) - - (156 )

Net loss $ (7,314 ) $ 4,082 $ 589 $ (2,643 )

Net loss per shareattributable to common $ (0.94 ) $ (0.05 )stockholders, basic anddiluted ^(2) Weighted-average number ofcommon shares used tocompute net loss per share 7,797 57,599 attributable to commonstockholders, basic anddiluted ^(3) ^(1) Other costs and operating expenses adjustments consist ofdepreciation and amortization expense of $3.2 million and warrantexpense of $0.3 million; offset by capitalization of contract andservice costs (net of amortization) of $2.9 million. ^(2) GAAP net loss per share attributable to common $ (0.94 )stockholders, basic and dilutedStock-based compensation 0.52 expenseDepreciation and amortization and other 0.08 expense adjustmentsImpact of the assumed conversion of redeemabble 0.29 convertible preferred stockNon-GAAP net loss per share attributable to common $ (0.05 )stockholders, basic and diluted ^(3) Shares used to compute GAAP net loss per share 7,797 attributable to common stockholders, basic and dilutedWeighted average effect of the assumed conversion of 49,802 redeemable convertible preferred stock from the date ofissuanceShares used to compute non-GAAP net loss per share 57,599 attributable to common stockholders, basic and diluted

BILL.COM HOLDINGS, INC.FREE CASH FLOW(Unaudited, in thousands) Three months ended June Year ended June 30, 30,

2020 2019 2020 2019

Net cash used in operating $ (1,103 ) $ (1,871 ) $ (4,430 ) $ (3,949 )activitiesPurchases of property and (5,701 ) (484 ) (11,437 ) (2,743 )equipmentCapitalization of internal-use (150 ) (241 ) (639 ) (1,556 )software costsFree cash flow $ (6,954 ) $ (2,596 ) $ (16,506 ) $ (8,248 )

BILL.COM HOLDINGS, INC.REMAINING PERFORMANCE OBLIGATIONS WITH FINANCIAL INSTITUTIONS(Unaudited, in thousands) June 30,

2020 2019

Remaining performance obligations with financialinstitutions to be recognized as revenue:Within 1 year $ 13,001 $ 8,749

Thereafter 139,334 25,220

Total $ 152,335 $ 33,969

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CONTACT: IR Contact: Carolyn Bass Investor@ir.bill.com

CONTACT: Press Contact: Morgan Mason Aircover Communications for Bill.com bill.com-aircoverteam@aircoverpr.com