What Happened?
Shares of payments and billing software maker Bill.com (NYSE: BILL) fell 34.7% in the morning session after the company reported weak fourth-quarter results. Revenue was just in line, although operating profit beat expectations. The company's core revenue, driven by subscription and transaction fees, rose 16%, but growth appears to be slowing compared to previous quarters. Also, Bill.com's revenue guidance for next quarter missed significantly, and this seems to be weighing heavily on shares, showing that the market cares deeply about topline for this business.
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What The Market Is Telling Us
Bill.com’s shares are very volatile and have had 23 moves greater than 5% over the last year. But moves this big are rare even for Bill.com and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 17.7% on the news that the company reported impressive third-quarter earnings which exceeded analysts' revenue and EPS estimates. The 19% year-over-year core revenue growth was driven by increased customer acquisition and higher payment volumes among newer cohorts, demonstrating the improved efficiency in converting new users. Operating income margin also improved, reflecting the company's ability to balance growth and profitability.
As a result, Bill was able to provide an optimistic EPS forecast for the next quarter, which blew past analysts' expectations. Overall, we think this was a strong quarter, with key metrics such as revenue growth and operating margin exceeding expectations.
Bill.com is down 24% since the beginning of the year, and at $63.90 per share, it is trading 34.4% below its 52-week high of $97.41 from December 2024. Investors who bought $1,000 worth of Bill.com’s shares 5 years ago would now be looking at an investment worth $1,145.
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