8-K: BILL Holdings Reports Strong Q2 FY26 Revenue Growth

BILL Holdings, Inc. announced robust second fiscal quarter 2026 financial results, with core revenue increasing 17% year-over-year and non-GAAP operating income up 18%.

Summary

• Total revenue for the second fiscal quarter ended December 31, 2025, reached $414.7 million, marking a 14% increase year-over-year.
• Core revenue, comprising subscription and transaction fees, grew 17% year-over-year to $375.1 million.
• Subscription fees increased 6% year-over-year to $72.1 million, while transaction fees rose 20% year-over-year to $303.1 million.
• GAAP net loss was $2.6 million, or $(0.03) per basic and diluted share, compared to a net income of $33.5 million in the prior year's second fiscal quarter.
• Non-GAAP net income was $73.4 million, or $0.64 per diluted share, an increase from $62.9 million, or $0.56 per diluted share, in the second fiscal quarter of 2025.
• The company served 498,500 businesses and processed $95 billion in total payment volume, up 13% year-over-year, across 35 million transactions, up 16% year-over-year.
• Approximately 2.5 million shares of common stock were repurchased for about $133 million during the quarter.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report, driven by strong core revenue growth, increasing non-GAAP profitability, and strategic share repurchases. The GAAP net loss and slight decline in gross margins introduce some caution, but the overall operational performance and future outlook are robust.

Positives

• Core revenue increased by a strong 17% year-over-year to $375.1 million, demonstrating robust growth in primary business segments.
• Transaction fees, a significant component of core revenue, grew 20% year-over-year to $303.1 million.
• Non-GAAP operating income increased 18% year-over-year to $74.1 million, indicating improved operational efficiency on an adjusted basis.
• Non-GAAP net income grew to $73.4 million, or $0.64 per diluted share, up from $62.9 million, or $0.56 per diluted share, in the prior year.
• Total payment volume processed increased 13% year-over-year to $95 billion, reflecting strong platform usage.
• The number of transactions processed grew 16% year-over-year to 35 million.
• The company repurchased approximately 2.5 million shares for $133 million, signaling confidence in its valuation and returning value to shareholders.
• GAAP operating loss improved to $(18.1) million from $(21.7) million in the prior year, showing a reduction in operating losses.

Negatives

• GAAP net income shifted to a net loss of $2.6 million, or $(0.03) per share, compared to a net income of $33.5 million in the second fiscal quarter of 2025.
• Float revenue, derived from interest on funds held for customers, decreased to $39.5 million from $42.938 million in the prior year, indicating a potential impact from interest rate changes or customer fund balances.
• GAAP gross margin slightly decreased to 79.8% from 81.6% in the prior year, and non-GAAP gross margin also declined to 83.9% from 85.2%.

Risks

• Macroeconomic factors, including changes in interest rates, significant political and regulatory developments, trade policy changes, government budget cuts, shutdowns, tariffs, inflationary, recessionary, and volatile market environments, as well as fluctuations in foreign exchange rates.
• The company has a history of operating losses.
• Risks associated with the large sums of customer funds transferred daily, including potential for loss, errors, and fraudulent activity.
• Credit risk related to BILL Divvy Cards and the invoice financing offering.
• Challenges in attracting new customers and converting trial customers into paying customers.
• Uncertainties regarding the development and deployment of AI agents and other AI tools.
• Ability to invest in the business and develop new products and services.
• Increased competition or new entrants in the marketplace.
• Potential impacts of acquisitions, investments, and other strategic transactions.
• Changes to card network rules and interchange fee rates.
• Reliance on relationships with accounting firms, financial institutions, and software providers.
• Global impacts of ongoing geopolitical conflicts.
• The actual and expected impacts of the aforementioned factors on the small and medium-sized businesses (SMBs) served by the company.

Future Outlook

For the fiscal third quarter ending March 31, 2026, BILL projects total revenue between $397.5 million and $407.5 million (11%-14% Y/Y growth) and core revenue between $364.5 million and $374.5 million (14%-17% Y/Y growth). Non-GAAP operating income is expected to be $62.5 million to $67.5 million, with non-GAAP net income between $60.5 million and $64.5 million, or $0.53 to $0.57 per diluted share. For the full fiscal year ending June 30, 2026, total revenue is guided to be $1,631.0 million to $1,651.0 million (12%-13% Y/Y growth) and core revenue $1,489.5 million to $1,509.5 million (15%-16% Y/Y growth). Non-GAAP operating income is projected at $274.0 million to $286.5 million, and non-GAAP net income at $267.5 million to $277.5 million, or $2.33 to $2.41 per diluted share. The outlook for non-GAAP net income includes a 20% provision for income taxes and does not account for future share repurchases.

Management Comments

• Ren Lacerte, CEO and Founder: "We delivered a strong Q2, with a significant beat on revenue and profitability, and continued our track record of rapid innovation. With a leading position in a large market, strong brand recognition, and a differentiated platform and distribution ecosystem, we are leveraging our unique assets alongside AI to eliminate unnecessary workflows and shape the future of touchless B2B transactions."
• Rohini Jain, CFO: "We accelerated core revenue growth while strengthening our margin profile. Our Q2 performance underscores the durability of our business and the discipline of our investment approach. Looking ahead, we are focused on extending differentiation, driving efficiency, and delivering long-term shareholder value."

Industry Context

StockSavvy.ai notes that BILL's continued strong core revenue growth and increasing non-GAAP profitability, despite a challenging macroeconomic environment and a decline in float revenue, highlight the resilience and demand for intelligent finance platforms in the B2B sector. The emphasis on AI integration aligns with broader industry trends towards automation and efficiency in financial operations, positioning BILL competitively against other fintech providers and traditional payment processors.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results for direct industry standard comparison.

Stakeholder Impact

• Shareholders: Potential positive impact due to strong core revenue growth, increased non-GAAP profitability, and share repurchase program, which could support share price. However, the GAAP net loss might introduce short-term volatility.
• Customers: Continued innovation and leveraging AI aim to improve solutions, eliminate workflows, and enhance the platform experience for businesses.
• Employees: Focus on efficiency and strategic investments could imply continued optimization of resources, but no direct impact on employment levels is mentioned.
• Creditors: The company's financial performance and outlook suggest a stable operational environment, which is generally favorable for creditors.

Next Steps

• Host a conference call for investors at 1:30 p.m. PT (4:30 p.m. ET) on February 5, 2026, to discuss fiscal second quarter 2026 results and outlook.
• Continue focusing on extending differentiation, driving efficiency, and delivering long-term shareholder value.
• Further develop and deploy AI agents and other AI tools to eliminate unnecessary workflows and shape the future of touchless B2B transactions.

Key Dates

Recommendation

While BILL Holdings demonstrated strong core revenue growth and improved non-GAAP profitability, the shift to a GAAP net loss and a decline in float revenue warrant a 'hold' recommendation. The company's strategic focus on AI and share repurchases are positive, but investors should monitor the path to GAAP profitability and the impact of interest rate fluctuations on float revenue. The outlook is positive, suggesting continued operational strength, but the mixed GAAP and non-GAAP results suggest a balanced approach rather than an immediate 'buy' or 'sell'.

Keywords

BILL Holdings, BILL, Financial Results, Q2 FY26, Earnings, Revenue Growth, Non-GAAP Income, Payment Processing, B2B Transactions, Fintech, AI, Share Repurchase, Subscription Fees, Transaction Fees, Operating Income