Business Wire | Nov 4, 2021 04:07PM EDT

Bill.com Reports First Quarter Fiscal 2022 Financial Results

Nov. 04, 2021

SAN JOSE, Calif.--(BUSINESS WIRE)--Nov. 04, 2021--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 (SMBs), today announced financial results for the first fiscal quarter ended September 30, 2021.

"We kicked off our fiscal year with momentum and strong first quarter results that exceeded our expectations," said Ren Lacerte, Bill.com CEO and Founder. "We also completed our acquisition of Invoice2go, which significantly expands our reach to serve millions more businesses around the globe. Most importantly, we helped hundreds of thousands of businesses simplify and automate their operations so they can focus on what they do best. Our leading accounts payable and accounts receivable platform and spend management solution position us well to become the all-in-one financial operations platform for SMBs."

"Our organic core revenue growth increased 78% year-over-year in the first quarter, and our spend management solution continued its robust growth trajectory," said John Rettig, Bill.com CFO. "Our performance was driven by strong adoption and usage of our solutions and solid execution across our team. We are in a strong position to extend our leadership in serving the SMB market."

Bill.com completed the acquisition of Invoice2go, a leading mobile-first accounts receivable (AR) software provider, on September 1, 2021. Bill.com's reported financial results for the first quarter fiscal 2022 include the results of Invoice2go from that date, while prior periods presented do not. Organic results exclude the impact of Invoice2go and recently-acquired Divvy.

Financial highlights for the first quarter of fiscal 2022, as reported, including Divvy and Invoice2go, unless otherwise indicated:

* Total revenue was $116.4 million, an increase of 152% from the first quarter of fiscal 2021. * Core revenue, which represents subscription and transaction fees was $115.6 million, an increase of 164% year-over-year. Organic core revenue was $77.7 million, up 78% year-over-year, and excluded Divvy and Invoice2go revenue of $37.9 million. Subscription fees were $35.0 million, up 43% year-over-year. Organic subscription fees were $34.1 million, up 39% year-over-year, and excluded Divvy and Invoice2go fees of approximately $1.0 million. Transaction fees were $80.6 million, up 319% year-over year. Organic transaction fees were $43.7 million, up 127% year-over-year, and excluded Divvy and Invoice2go fees of $36.9 million. * Gross profit was $86.6 million, representing a 74.4% gross margin, compared to $34.1 million, or a 73.8% gross margin, in the first quarter of fiscal 2021. Non-GAAP gross profit was $97.0 million, representing a 83.3% non-GAAP gross margin, compared to $35.2 million, or a 76.2% non-GAAP gross margin in the first quarter of fiscal 2021. * Loss from operations was $76.2 million, compared to a loss from operations of $13.8 million in the first quarter of fiscal 2021. Non-GAAP loss from operations was $11.1 million, compared to a non-GAAP loss from operations of $2.3 million in the first quarter of fiscal 2021. * Net loss was $75.7 million, or ($0.79) per share, basic and diluted, compared to net loss of $13.0 million, or ($0.16) per share, basic and diluted, in the first quarter of fiscal 2021. Non-GAAP net loss was $14.1 million, or ($0.15) per share, basic and diluted, compared to non-GAAP net loss of $1.4 million, or ($0.02) per share, basic and diluted, in the first quarter of fiscal 2021.

Business Highlights and Recent Developments

The metrics listed below identified as Bill.com metrics exclude the results of Divvy and Invoice2go.

* Completed the acquisition of Invoice2go, a leading mobile-first AR software provider. * Served 126,800 Bill.com customers as of the end of the first quarter. Also served 13,500 spending businesses that used Divvy in September 2021 and approximately 226,000 subscribers that used Invoice2go. * Processed $46.9 billion in total payment volume ("TPV") for Bill.com customers in the first quarter, an increase of 63% year-over-year. Also processed $1.5 billion in TPV related to card payment volume for Divvy and approximately $100 million in TPV for Invoice2go. * Processed 8.8 million transactions during the first quarter through the Bill.com platform, representing an increase of 35% year-over-year. Also processed 4.6 million transactions with Divvy cards and over 100,000 transactions through Invoice2go. * Added seasoned SaaS executive, Scott Wagner, to our board of directors. * Completed an equity offering of $1.38 billion of common stock and an offering of $575 million of 0% convertible senior notes due 2027.

Financial Outlook

We are providing the following guidance for the fiscal second quarter ending December 31, 2021 and the full fiscal year ending June 30, 2022.

Q2 FY22 FY22 Guidance Guidance

Total revenue (millions) $130.0 - $131.0 $538.0 - $541.0

Year-over-year total revenue growth 141% - 142% 126% - 127%

Non-GAAP net loss (millions) ($18.0) - ($17.0) ($81.0) - ($78.0)

Non-GAAP net loss per share ($0.18) - ($0.17) ($0.80) - ($0.77)

These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Bill.com has not provided a reconciliation of non-GAAP net loss or non-GAAP net loss per share guidance measures to the most directly comparable GAAP measures because certain items excluded from GAAP cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort.

Conference Call and Webcast Information

In conjunction with this announcement, Bill.com will host a conference call for investors at 1:30 p.m. PT (4:30 p.m. ET) today to discuss fiscal first quarter results and our outlook for the fiscal second quarter ending December 31, 2021 and full fiscal year ending June 30, 2022. The live webcast and a replay of the webcast will be available 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 is headquartered in San Jose, California. For more information visit www.bill.com.

Note on Forward-Looking Statements

This press release and the accompanying conference call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, 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 of future performance, including guidance for our revenue and net loss for the fiscal second quarter ending December 31, 2021 and our fiscal year ending June 30, 2022, our expectations for 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 and on supply chains and labor markets, 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 impacts of acquisitions and investments, including our ability to integrate Divvy and Invoice2go, our accounting for and internal controls related to Divvy and Invoice2go operating results, changes in staffing levels, and other risks detailed in registration statements and periodic reports we file with the SEC, including our quarterly and annual reports, 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. You should not rely on these forward-looking statements, as actual results may differ materially from those contemplated by these forward-looking statements as a result of such risks and uncertainties. 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 or revise the forward-looking statements contained in this press release or the accompanying conference call because of new information, future events, or otherwise.

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 gross margin, non-GAAP operating expenses, 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.

Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. Items excluded from non-GAAP gross margin include amortization of intangible assets, stock-based compensation, employer payroll taxes related to employee stock-based compensation and depreciation expense. Items excluded from non-GAAP operating expenses include amortization of intangible assets, stock-based compensation, employer payroll taxes related to employee stock-based compensation, depreciation expense, and acquisition and integration-related expenses. Items excluded from non-GAAP net loss and non-GAAP net loss per share include stock-based compensation expense, employer payroll taxes related to employee stock-based compensation, depreciation expense, amortization of intangible assets, acquisition and integration-related expenses, amortization of debt discount (and accretion of debt premium) and issuance costs, and income tax associated with acquisition and non-GAAP adjustments. 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 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.

Beginning the quarter ended March 31, 2021, we changed our method of calculating certain non-GAAP financial measures by removing the adjustments related to the capitalized service costs, capitalized internal-use software, capitalized sales commissions, and the associated amortization expenses. These changes are reflected in our non-GAAP financial measures for the quarter ended September 30, 2021. In addition, our non-GAAP financial measures for the quarter ended September 30, 2020 were also adjusted to conform to the current quarter presentation. These changes are further described in the reconciliation of GAAP to non-GAAP financial measures below.

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 taxes 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 periods prior to June 30, 2020; therefore, it was excluded from those prior periods.

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

Amortization of intangible assets. We exclude amortization of intangible assets from certain of our non-GAAP financial measures because we believe that excluding this non-cash expense provides meaningful supplemental information regarding our operational performance.

Acquisition and integration-related expenses. We exclude acquisition and integration-related expenses from certain of our non-GAAP financial measures because these costs would have not otherwise been incurred in the normal course of our business operations. In addition, we believe that acquisition and integration-related expenses are non-recurring charges unique to a specific acquisition. Although we may engage in future acquisitions, such acquisitions and the associated acquisition and integration-related expenses are considered unique and not comparable to other acquisitions.

Amortization of debt discount (accretion of debt premium) and issuance costs. We exclude amortization of debt discount and issuance costs associated with our issuance of our convertible senior notes and accretion of debt premium associated with our credit agreements from certain of our non-GAAP financial measures because we believe that excluding this non-cash interest expense provides meaningful supplemental information regarding our operational performance.

Income tax effect associated with acquisition and non-GAAP adjustments. We exclude the income tax effect associated with acquisition and non-GAAP adjustments from certain of our non-GAAP financial measures because we believe that excluding this provides meaningful supplemental information regarding our 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.

Free Cash Flow

Free cash flow is a non-GAAP measure that we calculate as net cash used in operating activities, reduced by purchases of property and equipment and capitalization of internal-use software costs. We believe free cash flow is an important liquidity measure of the cash (if any) that is available, after capital expenditures, for operational expenses and investment in our business. Free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash. One limitation of free cash flow is that it does not reflect our future contractual commitments. Additionally, free cash flow does not represent the total increase or decrease in our cash balance for a given period. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth.

BILL.COM HOLDINGS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited, in thousands) September 30, June 30, 2021 2021

ASSETSCurrent assets:Cash and cash equivalents $ 2,013,433 $ 509,615

Short-term investments 821,554 655,314

Accounts receivable, net 19,815 18,222

Acquired card receivables, net 174,338 147,093

Prepaid expenses and other current assets 71,551 67,195

Funds held for customers 2,432,521 2,208,598

Total current assets 5,533,212 3,606,037

Non-current assets:Operating lease right-of-use assets, net 78,930 71,925

Property and equipment, net 51,142 48,902

Intangible assets, net 491,888 417,341

Goodwill 2,354,812 1,772,043

Other assets 54,221 52,925

Total assets $ 8,564,205 $ 5,969,173

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable $ 13,142 $ 11,904

Accrued compensation and benefits 18,176 20,287

Deferred revenue 21,328 12,848

Other accruals and current liabilities 79,296 72,022

Convertible senior notes, net 1,132,793 -

Customer fund deposits 2,432,521 2,208,598

Total current liabilities 3,697,256 2,325,659

Non-current liabilities:Deferred revenue 2,640 2,926

Operating lease liabilities 85,722 86,639

Borrowing from credit facilities, net 79,014 79,534

Convertible senior notes, net 560,113 909,847

Deferred income tax liability 3,877 9,090

Other long-term liabilities 26,372 25,888

Total liabilities 4,454,994 3,439,583

Commitments and contingenciesStockholders' equity:Common stock 2 2

Additional paid-in capital 4,403,500 2,777,155

Accumulated other comprehensive loss (139 ) (100 )

Accumulated deficit (294,152 ) (247,467 )

Total stockholders' equity 4,109,211 2,529,590

Total liabilities and stockholders' equity $ 8,564,205 $ 5,969,173

BILL.COM HOLDINGS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited, in thousands except per share amounts)Three months endedSeptember 30,2021 (2)

2020

Revenue$

116,403

$

46,209

Cost of revenue (1)29,835

12,106

Gross profit86,568

34,103

Operating expensesResearch and development (1)42,472

17,786

Sales and marketing (1)62,312

12,908

General and administrative (1)57,935

17,190

Total operating expenses162,719

47,884

Loss from operations(76,151

)

(13,781

)

Other (expense) income, net(3,475

)

830

Loss before benefit from income taxes(79,626

)

(12,951

)

Benefit from income taxes(3,941

)

-

Net loss$

(75,685

)

$

(12,951

)

Net loss per share attributable to common stockholders,basic and diluted$

(0.79

)

$

(0.16

)

Weighted-average number of common shares used to computenet loss per share attributable to common stockholders,basic and diluted95,892

80,216

(1) Includes stock-based compensation expense as follows:Cost of revenue$

1,127

$

601

Research and development10,560

3,069

Sales and marketing8,114

1,504

General and administrative18,086

4,720

$

37,887

$

9,894

(2) Includes the results of Divvy and Invoice2go.BILL.COM HOLDINGS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited, in thousands except per share amounts) Three months ended September 30, 2021 ^(2) 2020

Revenue $ 116,403 $ 46,209

Cost of revenue ^(1) 29,835 12,106

Gross profit 86,568 34,103

Operating expensesResearch and development ^(1) 42,472 17,786

Sales and marketing ^(1) 62,312 12,908

General and administrative ^(1) 57,935 17,190

Total operating expenses 162,719 47,884

Loss from operations (76,151 ) (13,781 )

Other (expense) income, net (3,475 ) 830

Loss before benefit from income taxes (79,626 ) (12,951 )

Benefit from income taxes (3,941 ) -

Net loss $ (75,685 ) $ (12,951 )

Net loss per share attributable to common $ (0.79 ) $ (0.16 )stockholders,basic and dilutedWeighted-average number of common shares used tocompute 95,892 80,216 net loss per share attributable to commonstockholders,basic and diluted ^(1) Includes stock-based compensation expense asfollows:Cost of revenue $ 1,127 $ 601

Research and development 10,560 3,069

Sales and marketing 8,114 1,504

General and administrative 18,086 4,720

$ 37,887 $ 9,894

^(2) Includes the results of Divvy and Invoice2go.BILL.COM HOLDINGS, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited, in thousands)Three months endedSeptember 30,2021 (1)

2020

Cash flows from operating activities:Net loss$

(75,685

)

$

(12,951

)

Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization2,388

924

Stock-based compensation37,887

9,894

Amortization of debt discount (accretion of debt premium) and issuance costs556

-

Amortization of intangible assets16,672

-

Amortization of premium (accretion of discount) on investments in marketable debt securities2,857

46

Non-cash operating lease expense1,960

765

Provision for losses on acquired card receivables4,049

-

Deferred income taxes(3,943

)

-

Changes in assets and liabilities:Accounts receivable1,198

(790

)

Prepaid expenses and other current assets6,321

1,938

Other assets(1,385

)

(6,784

)

Accounts payable(732

)

1,566

Other accruals and current liabilities(17,930

)

(4,504

)

Operating lease liabilities(792

)

5,764

Other long-term liabilities(121

)

1,338

Deferred revenue5,566

438

Net cash used in operating activities(21,134

)

(2,356

)

Cash flows from investing activities:Cash paid for acquisition, net of acquired cash and cash equivalents(144,452

)

-

Purchases of corporate and customer fund short-term investments(608,552

)

(343,345

)

Proceeds from maturities of corporate and customer fund short-term investments318,907

244,332

Proceeds from sale of corporate and customer fund short-term investments17,234

33,286

Increase in other receivables included in funds held for customers(946

)

(1,522

)

Increase in acquired card receivables(31,717

)

-

Purchases of property and equipment(1,404

)

(5,894

)

Capitalization of internal-use software costs(2,942

)

(314

)

Net cash used in investing activities(453,872

)

(73,457

)

Cash flows from financing activities:Proceeds from issuance of common stock upon public offering, net of underwriting discountsand other offering costs1,341,597

-

Proceeds from issuance of convertible senior notes, net of discounts and issuance costs562,704

-

Purchase of capped call(37,893

)

-

Increase in customer fund deposits liability223,923

24,653

Proceeds from exercise of stock options8,336

8,962

Proceeds from issuance of common stock under the employee stock purchase plan5,726

4,327

Other(282

)

(664

)

Net cash provided by financing activities2,104,111

37,278

Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents(172

)

-

Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents1,628,933

(38,535

)

Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period1,809,692

1,592,377

Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period$

3,438,625

$

1,553,842

Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalentswithin the condensed consolidated balance sheets to the amounts shown in thecondensed consolidated statements of cash flows above:Cash and cash equivalents$

2,013,433

$

564,153

Restricted cash included in other current assets16,619

119

Restricted cash included in other assets6,724

-

Restricted cash and restricted cash equivalents included in funds held for customers1,401,849

989,570

Total cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period$

3,438,625

$

1,553,842

(1) Includes the results of Divvy and Invoice2go.BILL.COM HOLDINGS, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited, in thousands) Three months ended September 30, 2021 ^(1) 2020

Cash flows from operating activities:Net loss $ (75,685 ) $ (12,951 )

Adjustments to reconcile net loss to net cashused in operating activities:Depreciation and amortization 2,388 924

Stock-based compensation 37,887 9,894

Amortization of debt discount (accretion of debt 556 - premium) and issuance costsAmortization of intangible assets 16,672 -

Amortization of premium (accretion of discount) 2,857 46 on investments in marketable debt securitiesNon-cash operating lease expense 1,960 765

Provision for losses on acquired card receivables 4,049 -

Deferred income taxes (3,943 ) -

Changes in assets and liabilities:Accounts receivable 1,198 (790 )

Prepaid expenses and other current assets 6,321 1,938

Other assets (1,385 ) (6,784 )

Accounts payable (732 ) 1,566

Other accruals and current liabilities (17,930 ) (4,504 )

Operating lease liabilities (792 ) 5,764

Other long-term liabilities (121 ) 1,338

Deferred revenue 5,566 438

Net cash used in operating activities (21,134 ) (2,356 )

Cash flows from investing activities:Cash paid for acquisition, net of acquired cash (144,452 ) - and cash equivalentsPurchases of corporate and customer fund (608,552 ) (343,345 )short-term investmentsProceeds from maturities of corporate and 318,907 244,332 customer fund short-term investmentsProceeds from sale of corporate and customer fund 17,234 33,286 short-term investmentsIncrease in other receivables included in funds (946 ) (1,522 )held for customersIncrease in acquired card receivables (31,717 ) -

Purchases of property and equipment (1,404 ) (5,894 )

Capitalization of internal-use software costs (2,942 ) (314 )

Net cash used in investing activities (453,872 ) (73,457 )

Cash flows from financing activities:Proceeds from issuance of common stock upon 1,341,597 - public offering, net of underwriting discountsand other offering costsProceeds from issuance of convertible senior 562,704 - notes, net of discounts and issuance costsPurchase of capped call (37,893 ) -

Increase in customer fund deposits liability 223,923 24,653

Proceeds from exercise of stock options 8,336 8,962

Proceeds from issuance of common stock under the 5,726 4,327 employee stock purchase planOther (282 ) (664 )

Net cash provided by financing activities 2,104,111 37,278

Effect of exchange rate changes on cash, cash (172 ) - equivalents, restricted cash and restricted cashequivalentsNet increase (decrease) in cash, cash 1,628,933 (38,535 )equivalents, restricted cash, and restricted cashequivalentsCash, cash equivalents, restricted cash, and 1,809,692 1,592,377 restricted cash equivalents, beginning of periodCash, cash equivalents, restricted cash, and $ 3,438,625 $ 1,553,842 restricted cash equivalents, end of period Reconciliation of cash, cash equivalents,restricted cash, and restricted cash equivalentswithin the condensed consolidated balance sheetsto the amounts shown in thecondensed consolidated statements of cash flowsabove:Cash and cash equivalents $ 2,013,433 $ 564,153

Restricted cash included in other current assets 16,619 119

Restricted cash included in other assets 6,724 -

Restricted cash and restricted cash equivalents 1,401,849 989,570 included in funds held for customersTotal cash, cash equivalents, restricted cash, $ 3,438,625 $ 1,553,842 and restricted cash equivalents, end of period ^(1) Includes the results of Divvy andInvoice2go.BILL.COM HOLDINGS, INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(Unaudited, in thousands except percentages and per share amounts)Three months endedSeptember 30,2021

2020 (2)

Reconciliation of gross profit:GAAP gross profit$

86,568

$

34,103

Add:Amortization of intangible assets8,401

-

Stock-based compensation expense1,127

601

Payroll taxes related to stock-based compensation expense163

46

Depreciation expense721

479

Non-GAAP gross profit$

96,980

$

35,229

GAAP gross margin74.4

%

73.8

%

Non-GAAP gross margin83.3

%

76.2

%

Three months endedSeptember 30,2021

2020 (2)

Reconciliation of operating expenses:GAAP research and development expenses$

42,472

$

17,786

Less:Stock-based compensation expense(10,560

)

(3,069

)

Payroll taxes related to stock-based compensation expense(582

)

(271

)

Depreciation expense(588

)

(59

)

Non-GAAP research and development expenses$

30,742

$

14,387

GAAP sales and marketing expenses$

62,312

$

12,908

Less:Amortization of intangible assets(8,271

)

-

Stock-based compensation expense(8,114

)

(1,504

)

Payroll taxes related to stock-based compensation expense(195

)

(132

)

Depreciation expense(413

)

(35

)

Non-GAAP sales and marketing expenses$

45,319

$

11,237

GAAP general and administrative expenses$

57,935

$

17,190

Less:Stock-based compensation expense(18,086

)

(4,720

)

Payroll taxes related to stock-based compensation expense(1,042

)

(507

)

Depreciation expense(419

)

(106

)

Acquisition and integration-related expenses(6,325

)

-

Non-GAAP general and administrative expenses$

32,063

$

11,857

Three months endedSeptember 30,2021

2020 (2)

Reconciliation of loss from operations:GAAP loss from operations$

(76,151

)

$

(13,781

)

Add:Amortization of intangible assets16,672

-

Stock-based compensation expense37,887

9,894

Payroll taxes related to stock-based compensation expense1,982

956

Depreciation expense2,141

679

Acquisition and integration-related expenses6,325

-

Non-GAAP loss from operations$

(11,144

)

$

(2,252

)

Three months endedSeptember 30,2021

2020 (2)

Reconciliation of net loss:GAAP net loss$

(75,685

)

$

(12,951

)

Add (less):Amortization of intangible assets16,672

-

Stock-based compensation expense37,887

9,894

Payroll taxes related to stock-based compensation expense1,982

956

Depreciation expense2,141

679

Acquisition and integration-related expenses6,325

-

Amortization of debt discount (accretion of debt premium)and issuance costs556

-

Income tax effect associated with acquisition andnon-GAAP adjustments(3,943

)

-

Non-GAAP net loss$

(14,065

)

$

(1,422

)

Three months endedSeptember 30,2021

2020 (2)

Reconciliation of net loss per share attributable tocommon stockholders, basic and dilutedGAAP net loss per share attributable to common stockholders,basic and diluted$

(0.79

)

$

(0.16

)

Add (less):Amortization of intangible assets0.17

-

Stock-based compensation expense0.40

0.12

Payroll taxes related to stock-based compensation expense0.02

0.01

Depreciation expense0.01

0.01

Acquisition and integration-related expenses0.07

-

Amortization of debt discount (accretion of debt premium)and issuance costs0.01

-

Income tax effect associated with acquisition andnon-GAAP adjustments(0.04

)

-

Non-GAAP net loss per share attributable to commonstockholders, basic and diluted$

(0.15

)

$

(0.02

)

Three months endedSeptember 30,2021

2020

Shares used to compute GAAP and non-GAAP net loss per shareattributable to common stockholders, basic and diluted95,892

80,216

_______________________(2) During the quarter ended March 31, 2021, we changed our method of calculating certain non-GAAP financial measures by removing the adjustments related to the capitalized service costs, capitalized internal-use software, capitalized sales commissions, and the associated amortization expenses. These changes are reflected in our non-GAAP financial measures for the quarter ended September 30, 2021. In addition, our non-GAAP financial measures for the quarter ended September 30, 2020 were adjusted to conform to the current period presentation. The tables below show the reconciliation of the non-GAAP financial measures as previously reported and as restated during the quarter ended September 30, 2020.BILL.COM HOLDINGS, INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(Unaudited, in thousands except percentages and per share amounts) Three months ended September 30, 2021 2020 ^(2)

Reconciliation of gross profit:GAAP gross profit $ 86,568 $ 34,103

Add:Amortization of intangible assets 8,401 -

Stock-based compensation expense 1,127 601

Payroll taxes related to stock-based 163 46 compensation expenseDepreciation expense 721 479

Non-GAAP gross profit $ 96,980 $ 35,229

GAAP gross margin 74.4 % 73.8 %

Non-GAAP gross margin 83.3 % 76.2 %

Three months ended September 30, 2021 2020 ^(2)

Reconciliation of operating expenses:GAAP research and development expenses $ 42,472 $ 17,786

Less:Stock-based compensation expense (10,560 ) (3,069 )

Payroll taxes related to stock-based (582 ) (271 )compensation expenseDepreciation expense (588 ) (59 )

Non-GAAP research and development expenses $ 30,742 $ 14,387

GAAP sales and marketing expenses $ 62,312 $ 12,908

Less:Amortization of intangible assets (8,271 ) -

Stock-based compensation expense (8,114 ) (1,504 )

Payroll taxes related to stock-based (195 ) (132 )compensation expenseDepreciation expense (413 ) (35 )

Non-GAAP sales and marketing expenses $ 45,319 $ 11,237

GAAP general and administrative expenses $ 57,935 $ 17,190

Less:Stock-based compensation expense (18,086 ) (4,720 )

Payroll taxes related to stock-based (1,042 ) (507 )compensation expenseDepreciation expense (419 ) (106 )

Acquisition and integration-related expenses (6,325 ) -

Non-GAAP general and administrative expenses $ 32,063 $ 11,857

Three months ended September 30, 2021 2020 ^(2)

Reconciliation of loss from operations:GAAP loss from operations $ (76,151 ) $ (13,781 )

Add:Amortization of intangible assets 16,672 -

Stock-based compensation expense 37,887 9,894

Payroll taxes related to stock-based 1,982 956 compensation expenseDepreciation expense 2,141 679

Acquisition and integration-related expenses 6,325 -

Non-GAAP loss from operations $ (11,144 ) $ (2,252 )

Three months ended September 30, 2021 2020 ^(2)

Reconciliation of net loss:GAAP net loss $ (75,685 ) $ (12,951 )

Add (less):Amortization of intangible assets 16,672 -

Stock-based compensation expense 37,887 9,894

Payroll taxes related to stock-based 1,982 956 compensation expenseDepreciation expense 2,141 679

Acquisition and integration-related expenses 6,325 -

Amortization of debt discount (accretion of 556 - debt premium)and issuance costsIncome tax effect associated with acquisition (3,943 ) - andnon-GAAP adjustmentsNon-GAAP net loss $ (14,065 ) $ (1,422 )

Three months ended September 30, 2021 2020 ^(2)

Reconciliation of net loss per shareattributable tocommon stockholders, basic and dilutedGAAP net loss per share attributable to $ (0.79 ) $ (0.16 )common stockholders,basic and dilutedAdd (less):Amortization of intangible assets 0.17 -

Stock-based compensation expense 0.40 0.12

Payroll taxes related to stock-based 0.02 0.01 compensation expenseDepreciation expense 0.01 0.01

Acquisition and integration-related expenses 0.07 -

Amortization of debt discount (accretion of 0.01 - debt premium)and issuance costsIncome tax effect associated with acquisition (0.04 ) - andnon-GAAP adjustmentsNon-GAAP net loss per share attributable to $ (0.15 ) $ (0.02 )commonstockholders, basic and diluted Three months ended September 30, 2021 2020

Shares used to compute GAAP and non-GAAP netloss per share 95,892 80,216 attributable to common stockholders, basicand diluted _______________________

^(2) During the quarter ended March 31, 2021, we changed our method ofcalculating certain non-GAAP financial measures by removing the adjustmentsrelated to the capitalized service costs, capitalized internal-use software,capitalized sales commissions, and the associated amortization expenses. Thesechanges are reflected in our non-GAAP financial measures for the quarter endedSeptember 30, 2021. In addition, our non-GAAP financial measures for thequarter ended September 30, 2020 were adjusted to conform to the currentperiod presentation. The tables below show the reconciliation of the non-GAAPfinancial measures as previously reported and as restated during the quarterended September 30, 2020.Three months endedSeptember 30, 2020AsreportedAdjustmentAsrestatedReconciliation of gross profit:GAAP gross profit$

34,103

$

-

$

34,103

Add (less):Stock-based compensation expense601

-

601

Payroll taxes related to stock-basedcompensation expense46

-

46

Depreciation expense479

-

479

Amortization of capitalized service costs129

(129

)

-

Amortization of capitalized internal-usesoftware costs246

(246

)

-

Non-GAAP gross profit$

35,604

$

(375

)

$

35,229

GAAP gross margin73.8

%

73.8

%

Non-GAAP gross margin77.0

%

-0.8

%

76.2

%

Three months endedSeptember 30, 2020AsreportedAdjustmentAsrestatedReconciliation of operating expenses:GAAP research and development expenses$

17,786

$

-

$

17,786

Add (less):Stock-based compensation expense(3,069

)

-

(3,069

)

Payroll taxes related to stock-basedcompensation expense(271

)

-

(271

)

Depreciation expense(59

)

-

(59

)

Capitalized service costs314

(314

)

-

Capitalized internal-use software costs783

(783

)

-

Non-GAAP research and developmentexpenses$

15,484

$

(1,097

)

$

14,387

GAAP sales and marketing expenses$

12,908

$

-

$

12,908

Add (less):Stock-based compensation expense(1,504

)

-

(1,504

)

Payroll taxes related to stock-basedcompensation expense(132

)

-

(132

)

Depreciation expense(35

)

-

(35

)

Capitalized sales commissions1,468

(1,468

)

-

Amortization of capitalized salescommissions(765

)

765

-

Non-GAAP sales and marketing expenses$

11,940

$

(703

)

$

11,237

GAAP general and administrative expenses$

17,190

$

-

$

17,190

Less:Stock-based compensation expense(4,720

)

-

(4,720

)

Payroll taxes related to stock-basedcompensation expense(507

)

-

(507

)

Depreciation expense(106

)

-

(106

)

Non-GAAP general and administrative expenses$

11,857

$

-

$

11,857

Three months endedSeptember 30, 2020AsreportedAdjustmentAsrestatedReconciliation of loss from operations:GAAP loss from operations$

(13,781

)

$

-

$

(13,781

)

Add (less):Stock-based compensation expense9,894

-

9,894

Payroll taxes related to stock-basedcompensation expense956

-

956

Depreciation expense679

-

679

Amortization of capitalized service costs,net of amount capitalized(185

)

185

-

Amortization of capitalized internal-usesoftware costs, net of amount capitalized(537

)

537

-

Capitalized sales commissions, netof associated amortization expense(703

)

703

-

Non-GAAP loss from operations$

(3,677

)

$

1,425

$

(2,252

)

Three months endedSeptember 30, 2020AsreportedAdjustmentAsrestatedReconciliation of net loss:GAAP net loss$

(12,951

)

$

-

$

(12,951

)

Add (less):Stock-based compensation expense9,894

-

9,894

Payroll taxes related to stock-basedcompensation expense956

-

956

Depreciation expense679

-

679

Amortization of capitalized service costs,net of amount capitalized(185

)

185

-

Amortization of capitalized internal-usesoftware costs, net of amount capitalized(537

)

537

-

Capitalized sales commissions, netof associated amortization expense(703

)

703

-

Non-GAAP net loss$

(2,847

)

$

1,425

$

(1,422

)

Three months endedSeptember 30, 2020AsreportedAdjustmentAsrestatedReconciliation of net loss per shareattributable to common stockholders,basic and dilutedGAAP net loss per share attributable to commonstockholders, basic and diluted$

(0.16

)

$

-

$

(0.16

)

Add (less):Stock-based compensation expense0.12

-

0.12

Payroll taxes related to stock-basedcompensation expense0.01

-

0.01

Depreciation expense0.01

-

0.01

Amortization of capitalized service costs,net of amount capitalized-

-

-

Amortization of capitalized internal-usesoftware costs, net of amount capitalized(0.01

)

0.01

-

Capitalized sales commissions, netof associated amortization expense(0.01

)

0.01

-

Non-GAAP net loss$

(0.04

)

$

0.02

$

(0.02

)

Three months ended September 30, 2020 As Adjustment As reported restatedReconciliation of gross profit:GAAP gross profit $ 34,103 $ - $ 34,103

Add (less):Stock-based compensation expense 601 - 601

Payroll taxes related to stock-based 46 - 46 compensation expenseDepreciation expense 479 - 479

Amortization of capitalized service costs 129 (129 ) -

Amortization of capitalized internal-use 246 (246 ) - software costsNon-GAAP gross profit $ 35,604 $ (375 ) $ 35,229

GAAP gross margin 73.8 % 73.8 %

Non-GAAP gross margin 77.0 % -0.8 % 76.2 %

Three months ended September 30, 2020 As Adjustment As reported restatedReconciliation of operating expenses:GAAP research and development expenses $ 17,786 $ - $ 17,786

Add (less):Stock-based compensation expense (3,069 ) - (3,069 )

Payroll taxes related to stock-based (271 ) - (271 )compensation expenseDepreciation expense (59 ) - (59 )

Capitalized service costs 314 (314 ) -

Capitalized internal-use software costs 783 (783 ) -

Non-GAAP research and development $ 15,484 $ (1,097 ) $ 14,387 expenses GAAP sales and marketing expenses $ 12,908 $ - $ 12,908

Add (less):Stock-based compensation expense (1,504 ) - (1,504 )

Payroll taxes related to stock-based (132 ) - (132 )compensation expenseDepreciation expense (35 ) - (35 )

Capitalized sales commissions 1,468 (1,468 ) -

Amortization of capitalized sales (765 ) 765 - commissionsNon-GAAP sales and marketing expenses $ 11,940 $ (703 ) $ 11,237

GAAP general and administrative expenses $ 17,190 $ - $ 17,190

Less:Stock-based compensation expense (4,720 ) - (4,720 )

Payroll taxes related to stock-based (507 ) - (507 )compensation expenseDepreciation expense (106 ) - (106 )

Non-GAAP general and administrative $ 11,857 $ - $ 11,857 expenses Three months ended September 30, 2020 As Adjustment As reported restatedReconciliation of loss from operations:GAAP loss from operations $ (13,781 ) $ - $ (13,781 )

Add (less):Stock-based compensation expense 9,894 - 9,894

Payroll taxes related to stock-based 956 - 956 compensation expenseDepreciation expense 679 - 679

Amortization of capitalized service (185 ) 185 - costs,net of amount capitalizedAmortization of capitalized internal-use (537 ) 537 - software costs, net of amount capitalizedCapitalized sales commissions, net (703 ) 703 - of associated amortization expenseNon-GAAP loss from operations $ (3,677 ) $ 1,425 $ (2,252 )

Three months ended September 30, 2020 As Adjustment As reported restatedReconciliation of net loss:GAAP net loss $ (12,951 ) $ - $ (12,951 )

Add (less):Stock-based compensation expense 9,894 - 9,894

Payroll taxes related to stock-based 956 - 956 compensation expenseDepreciation expense 679 - 679

Amortization of capitalized service (185 ) 185 - costs,net of amount capitalizedAmortization of capitalized internal-use (537 ) 537 - software costs, net of amount capitalizedCapitalized sales commissions, net (703 ) 703 - of associated amortization expenseNon-GAAP net loss $ (2,847 ) $ 1,425 $ (1,422 )

Three months ended September 30, 2020 As Adjustment As reported restatedReconciliation of net loss per shareattributable to common stockholders,basic and dilutedGAAP net loss per share attributable to $ (0.16 ) $ - $ (0.16 )commonstockholders, basic and dilutedAdd (less):Stock-based compensation expense 0.12 - 0.12

Payroll taxes related to stock-based 0.01 - 0.01 compensation expenseDepreciation expense 0.01 - 0.01

Amortization of capitalized service - - - costs,net of amount capitalizedAmortization of capitalized internal-use (0.01 ) 0.01 - software costs, net of amount capitalizedCapitalized sales commissions, net (0.01 ) 0.01 - of associated amortization expenseNon-GAAP net loss $ (0.04 ) $ 0.02 $ (0.02 )

BILL.COM HOLDINGS, INC.FREE CASH FLOW(Unaudited, in thousands)Three months endedSeptember 30,2021

2020

Net cash used in operating activities$

(21,134

)

$

(2,356

)

Purchases of property and equipment(1,404

)

(5,894

)

Capitalization of internal-use software costs(2,942

)

(314

)

Free cash flow$

(25,480

)

$

(8,564

)

BILL.COM HOLDINGS, INC.FREE CASH FLOW(Unaudited, in thousands) Three months ended September 30, 2021 2020

Net cash used in operating activities $ (21,134 ) $ (2,356 )

Purchases of property and equipment (1,404 ) (5,894 )

Capitalization of internal-use software costs (2,942 ) (314 )

Free cash flow $ (25,480 ) $ (8,564 )

BILL.COM HOLDINGS, INC.REMAINING PERFORMANCE OBLIGATIONS(Unaudited, in thousands)September 30,June 30,2021

2021

Remaining performance obligations to be recognized as revenue:Within 1 year$

42,956

$

28,075

Thereafter109,823

117,760

Total$

152,779

$

145,835

View source version on businesswire.com: https://www.businesswire.com/news/home/20211104006148/en/

CONTACT: IR Contact: Karen Sansot ksansot@hq.bill.com

CONTACT: Press Contact: Oriana Branon obranon@hq.bill.com 619-997-0299