Bill.com (BILL) Stock Forecast & Price Target

BILL Holdings Inc demonstrated a strong financial performance for FY2Q, with total revenue projected between $394.5 million and $404.5 million, reflecting an increase of 9% to 12% year-over-year, and core revenue expected to rise by 12% to 15%. The company reported a 10.4% year-over-year increase in total revenues, driven by a robust 13.7% growth in core revenue, which encompasses subscription and transaction fees. Additionally, transaction revenue rose 16% year-over-year, bolstered by significant contributions from both Bill AP/AR and Bill Spend and Expense sectors, indicating a positive trajectory for the company’s operations and market positioning.

BILL Holdings Inc experienced a decline in gross margins, which fell 180 basis points year-over-year to 83.9%, primarily due to a shift in revenue mix away from float revenue. Additionally, while the company added 4,000 customers in its accounts payable/accounts receivable segment, this growth was lower than the previous quarter's 4,700 additions, and a similar trend was seen in the Spend & Expense segment with customer growth decreasing from 1,600 to 1,400. Furthermore, BILL Holdings has a bloated cost structure relative to other cloud-based software providers, with concerns about the adoption ceiling of its Virtual Card offering due to high transaction costs, which may hinder future growth prospects.