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What changed in BILL Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of BILL Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+468 added−455 removedSource: 10-K (2025-08-28) vs 10-K (2024-08-23)

Top changes in BILL Holdings, Inc.'s 2025 10-K

468 paragraphs added · 455 removed · 379 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

63 edited+11 added−16 removed88 unchanged
Biggest changeWe are hopeful that through programs and partnerships like these, we can both help local communities and build a solid pipeline of future employees for our company. As part of our focus on community outreach, we sponsor the Adelante Program, a partnership with a local high school in San Jose, California, to expose underprivileged, low-income students to technology-focused careers.
Biggest changeAs part of our focus on community outreach, we partner with a local high school in San Jose, California, to expose underprivileged, low-income students to technology-focused careers. The program’s goal is to prepare these young adults for academic success, college acceptance, and early career growth by offering work study opportunities, internships, and mentoring.
Our integrated platform helps businesses to more efficiently control their payables, receivables, and spend and expense management. Hundreds of thousands of businesses rely on BILL’s proprietary network of millions of members to pay or get paid faster. Headquartered in San Jose, California, we are a trusted partner of leading U.S. financial institutions, accounting firms, and accounting software providers.
Our integrated platform helps businesses to more efficiently control their payables, receivables, and spend and expense management. Hundreds of thousands of businesses rely on BILL’s proprietary network of millions of members to pay or get paid faster. Headquartered in San Jose, California, we are a trusted partner of leading U.S. financial institutions, accounting firms, and software providers.
Our inside sales team augments our direct sales capabilities by targeting potential customers that have engaged with us on their own. We also reach customers indirectly through our partnerships with accounting firms, financial institutions, and accounting software providers.
Our inside sales team augments our direct sales capabilities by targeting potential customers that have engaged with us on their own. We also reach customers indirectly through our partnerships with accounting firms, financial institutions, and software providers.
We make available free of charge, on our website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (SEC).
We make available free of charge, on our website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Leveraging our data, our proprietary risk engine has trained upon millions of business-to-business ACH, check, card, and wire transactions, enabling us to keep businesses using our solutions’ funds secure and to manage our own risk exposure. • Experienced Management Team and Vibrant Culture. Our management team has deep experience with SMBs, software-as-a-service companies, AI, accounting firms, and financial institutions.
Leveraging our data, our proprietary risk engine has trained upon millions of business-to-business ACH, check, card, and wire transactions, enabling us to keep businesses using our solutions’ funds secure and to manage our own risk exposure. • Experienced Management Team and Vibrant Culture. Our management team has deep experience with SMBs, payments, software-as-a-service companies, AI, accounting firms, and financial institutions.
Our document management capabilities help businesses using our solutions make payment decisions, answer supplier questions, and provide support to accountants and auditors. 4 • Intelligent bill capture – We have automated the capture of data from bills by leveraging our proprietary AI capabilities. Incoming bills are machine-read, and critical data fields, including due date, amount, and supplier name, are pre-populated.
Our document management capabilities help businesses using our solutions make payment decisions, answer supplier questions, and provide support to accountants and auditors. • Intelligent bill capture – We have automated the capture of data from bills by leveraging our proprietary AI capabilities. Incoming bills are machine-read, and critical data fields, including due date, amount, and supplier name, are pre-populated.
Rather than building a business budgeting strategy using outdated numbers in a static spreadsheet, our budgeting software syncs automatically with the employee's Mastercard or Visa cards, while also facilitating reimbursements and vendor spend. The intuitive web and mobile applications enable budget owners to drill down into spending by department, team, 5 project, or individual.
Rather than building a business budgeting strategy using outdated numbers in a static spreadsheet, our budgeting software syncs automatically with the employee's Mastercard or Visa cards, while also facilitating reimbursements and vendor spend. The intuitive web and mobile applications enable budget owners to drill down into spending by department, team, project, or individual.
We have built a unique culture that resonates strongly with employees. Our Platform Our purpose-built platform leverages our ability to see both sides of a transaction and can easily connect both transaction parties. This promotes the rapid exchange of information and funds, with strong network effects and greater monetization opportunities as more customers adopt our platform.
We have built a unique culture that resonates strongly with employees. Our Platform Our purpose-built, integrated platform leverages our ability to see both sides of a transaction and can easily connect both transaction parties. This promotes the rapid exchange of information and funds, with strong network effects and greater monetization opportunities as more customers adopt our platform.
Any actual or perceived failure to comply with legal and regulatory requirements may result in, among other things, revocation of required licenses or registrations, loss of approved status, private litigation, 12 regulatory or governmental investigations, administrative enforcement actions, sanctions, civil and criminal liability, and constraints on our ability to continue to operate.
Any actual or perceived failure to comply with legal and regulatory requirements may result in, among other things, revocation of required licenses or registrations, loss of approved status, private litigation, regulatory or governmental investigations, administrative enforcement actions, sanctions, civil and criminal liability, and constraints on our ability to continue to operate.
Once approved for a BILL Divvy Corporate Card, the spending business is provided a credit limit and can use the BILL Spend and Expense software to request virtual cards or physical cards. Payment Services Our suite of comprehensive payment services includes: • ACH payments – We enable ACH transactions for both disbursements and collections.
Once approved for a BILL Divvy Card, the spending business is provided a credit limit and can use the BILL Spend and Expense software to request virtual cards or physical cards. Payment Services Our suite of comprehensive payment services includes: • ACH payments – We enable ACH transactions for both disbursements and collections.
This eliminates the need to switch between systems for two-way matching and reduces the back-and-forth communication between PO creators and accounts payable managers. • Frequent status updates – We provide timely status updates of financial inflows and outflows by providing status updates of all transactions on a regular basis.
This eliminates the need to switch between systems for two- 6 way matching and reduces the back-and-forth communication between PO creators and accounts payable managers. • Frequent status updates – We provide timely status updates of financial inflows and outflows by providing status updates of all transactions on a regular basis.
We leverage both direct and indirect channels - accounting firms, financial institution partners, and accounting software integrations - to efficiently go-to-market. • Large and Growing Network. As accounts receivable customers issue invoices, and accounts payable customers pay bills, they connect to their clients and suppliers, driving a powerful network effect.
We leverage both direct and indirect channels - accounting firms, financial institution partners, and other software integrations - to efficiently go-to-market. • Large and Growing Network. As accounts receivable customers issue invoices, and accounts payable customers pay bills, they connect to their clients and suppliers, driving a powerful network effect.
Customers who use 6 other types of systems use our advanced file import/export capabilities to minimize data entry activities. • Purchase order (PO) matching – We sync POs directly from accounting software systems, including Oracle NetSuite and Sage Intacct, and QuickBooks Desktop into our platform.
Customers who use other types of systems use our advanced file import/export capabilities to minimize data entry activities. • Purchase order (PO) matching – We sync POs directly from accounting software systems, including Oracle NetSuite, Sage Intacct, and QuickBooks Desktop into our platform.
Spend and Expense Management With BILL Spend and Expense, spending businesses gain robust spend and expense management tools, helping them spend smarter. Our spend and expense management product provides businesses full visibility into their spend, by giving businesses the ability to issue any employee their own BILL Divvy Corporate Card, a charge card for business expenses.
Spend and Expense Management With BILL Spend and Expense, spending businesses gain robust spend and expense management tools, helping them spend smarter. Our spend and expense management product provides businesses full visibility into their spend, by giving businesses the ability to issue any employee their own BILL Divvy Card, a charge card for business expenses.
With 9 respect to the domestic payments that comprise a large portion of our business, we disburse and collect funds on behalf of our customers through our proprietary payments engine. We manage the associated financial risk of processing billions in total payment volume through our proprietary risk models and rules.
With respect to the domestic payments that comprise a large portion of our business, we disburse and collect funds on behalf of our customers through our proprietary payments engine. We manage the associated financial risk of processing billions in total payment volume through our proprietary risk models and rules.
Transactions are synchronized automatically between the financial institution’s platform and ours, keeping the customer’s view current and consistent. 7 In addition to our white-labeled solution, we support a broad range of partners and customers with our platform application programming interfaces (APIs).
Transactions are synchronized automatically between the financial institution’s platform and ours, keeping the customer’s view current and consistent. In addition to our white-labeled solution, we support a broad range of partners and customers with our platform application programming interfaces (APIs).
As a Money Services Business and a licensed money transmitter we are subject to U.S. anti-money laundering (AML) laws and regulations, including under the Bank Secrecy Act, as amended (BSA), and similar U.S. state laws and regulations, and as a Foreign Money Service Business (MSB) in Canada we are subject to various AML laws and regulations in Canada.
As a Money Services Business and a licensed money transmitter we are subject to U.S. anti-money laundering (AML) laws and regulations, including under the Bank Secrecy Act, as amended (BSA), and similar 11 U.S. state laws and regulations, and as a Foreign Money Service Business (MSB) in Canada we are subject to various AML laws and regulations in Canada.
The lending products and services subject us to state and federal lending regulations including, but not limited to Fair Lending, state specific lending disclosures, and Unfair, Deceptive, or Abusive Acts and Practices and Unfair or Deceptive Acts or Practices requirements. 11 Anti-money Laundering, Counter-terrorist Financing, and Sanctions.
The lending products and services subject us to state and federal lending regulations including, but not limited to Fair Lending, state specific lending disclosures, and Unfair, Deceptive, or Abusive Acts and Practices and Unfair or Deceptive Acts or Practices requirements. Anti-money Laundering, Counter-terrorist Financing, and Sanctions.
Other competitors range from large firms that predominantly focus on selling to enterprises; to firms focusing on adjacent products for SMBs which enter one or more of our market segments and offer products that compete with ours; to providers of point solutions that focus exclusively on one of the many aspects of our business: document management, workflow management, accounts payable solutions, spend and expense management, card issuance, or accounts receivable solutions; to companies that offer industry-specific payment solutions.
Other competitors range from large firms that predominantly focus on selling to enterprises; to firms focusing on adjacent products for SMBs which enter one or more of our market segments and offer products that compete with ours; to providers of point solutions that focus on one of the many aspects of our business: document management, workflow management, accounts payable solutions, spend and expense management, card issuance, or accounts receivable solutions; to companies that offer industry-specific payment solutions; to companies that offer competing products to ours.
We have built sophisticated integrations with popular accounting software solutions, banks, card issuers, and payment processors, enabling our customers to access these mission-critical services quickly and easily.
We have built sophisticated integrations with popular software solutions, banks, card issuers, and payment processors, enabling our customers to access these mission-critical services quickly and easily.
These APIs allow our partners to integrate our platform seamlessly into their solutions, create web or mobile apps that integrate with ours, or leverage our payments capabilities.
These APIs allow our partners to integrate our platform 7 seamlessly into their solutions, create web or mobile apps that integrate with ours, or leverage our payments capabilities.
When a business applies for a BILL Divvy Corporate Card, we utilize, on behalf of the Issuing Bank, proprietary risk management capabilities to confirm the identity of the business, and perform a credit underwriting process to determine if the business is eligible for a BILL Divvy Corporate Card pursuant to our credit policies.
When a business applies for a BILL Divvy Card, we 5 utilize, on behalf of the Issuing Bank, proprietary risk management capabilities to confirm the identity of the business, and perform a credit underwriting process to determine if the business is eligible for a BILL Divvy Card pursuant to our credit policies.
We define network members as our BILL standalone customers plus their suppliers and clients, who have paid or received funds electronically via our platform. These network effects promote greater adoption of our platform, higher levels of engagement, and increased value across our ecosystem. Payment and Risk Management Services Our payments engine powers our payment services.
We define network members as our BILL AP/AR customers plus their suppliers and clients, who have paid or received funds electronically via our platform. These network effects promote greater adoption of our platform, higher levels of engagement, and increased value across our ecosystem. Payment and Risk Management Services Our payments engine powers our payment services.
We closely monitor employee turnover, conducting exit interviews and surveys to alert us to any issues, as well as to make improvements to the employee experience. Diversity, Equity, and Inclusion Through an equitable approach to hiring, compensation, and career growth, we have built a company that fosters inclusivity, authenticity, and action.
We closely monitor employee turnover, conducting exit interviews and surveys to alert us to any issues, as well as to make improvements to the employee experience. Through an equitable approach to hiring, compensation, and career growth, we have built a company that fosters inclusivity, authenticity, and action.
Further, we embrace a hybrid work model at each of our office locations, permitting employees to work remotely several days a week, in addition to having a significant number of fully-remote employees who collaborate via videoconference and periodic offsite retreats. This flexible model allows us to minimize employee commute times, thereby reducing congestion, the consumption of energy, and pollution.
Further, we embrace a hybrid work model at each of our office locations, supporting employees to work remotely two days a week, in addition to having a significant number of fully-remote employees who collaborate via videoconference and periodic offsite retreats. This flexible model allows us to minimize employee commute times, thereby reducing congestion, the consumption of energy, and pollution.
Through our APIs, developers can: • interact with business entities, like suppliers and clients; • obtain summary-level reports, such as payables and receivables reports; and • interact with accounting details, such as the general ledger codes of the chart of accounts.
Through our APIs, developers can: • make and receive payments; • interact with business entities, like suppliers and clients; • obtain summary-level reports, such as payables and receivables reports; and • interact with accounting details, such as the general ledger codes of the chart of accounts.
We differentiate ourselves from our competitors by offering a portfolio of financial back-office solutions that handle all of these core cash flow activities end-to-end. Our extensive investment in building a fully-integrated two-way sync with popular accounting software providers is well-regarded in the industry.
We differentiate ourselves from our competitors by offering a comprehensive portfolio of financial back-office solutions that handle all of these core cash flow, expense, and financing activities end-to-end. Our extensive investment in building a fully-integrated two-way sync with popular software providers is well-regarded 9 in the industry.
Through dedicated connections with banks and payment processors, we issue checks, initiate card-based transactions, originate ACH-based payments, including real-time payments, through our instant transfer feature, and execute wire transfers. Our payments engine handles all aspects of payment file transfers, exception file handling, and required payment status reporting.
Through dedicated connections with banks and payment processors, we issue checks, initiate card-based transactions, originate ACH-based payments, including real-time payments, through our instant transfer feature, and execute wire transfers. Our payments engine handles all aspects of the payment life cycle, including risk management, payment transfers, exception handling, and payment status reporting.
As a card program manager for the CPMBs, we have implemented compliance programs designed to ensure we are in compliance with applicable regulations and card network rules. The CPMBs oversee our compliance program and conduct periodic audits to ensure compliance with applicable regulations and rules.
As a card program manager for the Issuing Banks, we have implemented robust programs designed to ensure we are in compliance with applicable regulations and card network rules. The Issuing Banks oversee our compliance program and conduct periodic reviews and third-party audits to ensure compliance with applicable regulations and rules.
For additional discussion on governmental regulation affecting our business, please see the risk factors related to regulation of our payments business and regulation in the areas of privacy and data use, under the section titled “ Risk Factors—Risks Related to our Business and Industry .” Environmental, Corporate Governance, and Social (ESG) Oversight and Initiatives ESG Management We are committed to helping build a more sustainable future for businesses using our solutions, as well as for their communities, and stakeholders.
For additional discussion on governmental regulation affecting our business, please see the risk factors related to regulation of our payments business and 12 regulation in the areas of privacy and data use, under the section titled “ Risk Factors—Risks Related to our Business and Industry .” Culture, Inclusion and Sustainability We are committed to helping build a more sustainable future for businesses using our solutions, as well as for their communities, and stakeholders.
As a percentage of our TPV, fraud and credit loss rates for our BILL standalone payment services were nominal, less than 0.01% for fiscal 2024. As a percentage of total card payment volume transacted by spending businesses that use BILL Divvy Corporate Cards, fraud and credit loss rate was approximately 0.35% for fiscal 2024.
As a percentage of our TPV, fraud and credit loss rates for our BILL AP/AR payment services were nominal, approximately 0.01% for fiscal 2025. As a percentage of total card payment volume transacted by spending businesses that use BILL Divvy Cards, fraud and credit loss rate was approximately 0.23% for fiscal 2025.
Through a grassroots effort, BILL employees have established seven ERGs focused upon the following dimensions of identity: women, Latinx, Black, LGBTQIA+, disabilities and mental health, veterans, and Pan Asian and Pacific Islanders. These ERGs support the career development of their members through customer chats, skill-building workshops and community engagement.
Through a grassroots effort, BILL employees have established eight ERGs focused on different affinities: women, Latinx, Black, LGBTQIA+, disabilities and mental health, veterans, Pan Asian and Pacific Islanders, and community giving. These ERGs are open to everyone and support the career development of their members through customer chats, skill-building workshops, and community engagement.
None of our employees are represented by a labor union in connection with their employment. We know our success is tied to recruiting, developing, and retaining our employees. Our Chief People Officer is responsible for creating and implementing our initiatives around our employees and our board of directors has ultimate oversight and receives updates on these initiatives periodically.
We know our success is tied to recruiting, developing, and retaining our employees. Our Chief People Officer is responsible for creating and implementing our initiatives around our employees and our board of directors has ultimate oversight and receives updates on these initiatives periodically.
Our in-app messaging capabilities make communications between businesses using our solutions and their employees, vendors, and clients, easy. For example, BILL allows administrators and payors to remind approvers to act, or delegate payment authority when a key employee is unavailable. Our platform creates a clear audit trail that becomes invaluable in the event of an audit, or for tax compliance.
For example, BILL allows administrators and payors to remind approvers to act, or delegate payment authority when a key employee is unavailable. Our platform creates a clear audit trail that becomes invaluable in the event of an audit, or for tax compliance.
As of June 30, 2024, approximately 474,000 businesses used our solutions and processed $292 billion in Total Payment Volume (TPV) during fiscal 2024. As of June 30, 2024, approximately 7.1 million network members have paid or received funds electronically using our platform.
As of June 30, 2025, approximately 493,800 businesses used our solutions and processed approximately $330 billion in Total Payment Volume (TPV) during fiscal 2025. As of June 30, 2025, approximately 8.3 million network members have paid or received funds electronically using our platform.
One of the ways we strengthen our workplace culture of DEI is by supporting employee resource groups (ERGs). ERGs are self-organized communities that bring employees together to raise awareness and belonging for under-represented groups.
We seek to embed a sense of inclusion and community into our culture and how we serve the businesses using our solutions. One of the ways we strengthen our workplace culture of inclusion is by supporting employee resource groups (ERGs). ERGs are self-organized communities that bring employees together to raise awareness and belonging for under-represented groups.
As of June 30, 2024, we had a total of 2,187 employees working across three offices in the U.S.: San Jose, CA, Houston, TX, and Draper, UT; and others working remotely. We also employ individuals on a temporary basis and use the services of contractors as necessary.
As of June 30, 2025, we had a total of 2,364 employees working in two offices in the U.S.: San Jose, CA, and Draper, UT; and others working remotely. We also employ individuals on a temporary basis and use the services of contractors as necessary. None of our employees are represented by a labor union in connection with their employment.
Our Unique Data Asset BILL's TPV and number of documents processed for businesses using our solutions provide us with a unique data asset. This asset has allowed us to build powerful AI capabilities.
Our Unique Data Asset Our TPV, network size, and number of transactions processed for businesses using our solutions provide us with a unique data asset. This asset has allowed us to build powerful AI capabilities and is powering our development of AI agents for SMB payables, receivables, procurement, and cash management.
We are contractually obligated to comply with consumer protection laws and regulations applicable to our product offerings and customer base, as well as with Visa, MasterCard, and American Express rules, as a card program manager for our card program management banks (CPMB) for our card product offerings.
Global Affairs Canada and Canada's Department of Public Safety administer Canadian sanctions programs and oversee our compliance with these regulations. We are contractually obligated to comply with consumer protection laws and regulations applicable to our product offerings and customer base, as well as with Visa, Mastercard, and American Express rules, as a card program manager for our card product offerings.
We have redundancy across our core payment methods such that if there is an outage with one payment processor, we can direct payments to an alternative provider. Through our risk engine, we use both proprietary and third-party tools to assess, detect, and mitigate financial risk associated with the payment volume that we process.
We maintain redundancy across core payment methods to ensure that, in the event of an outage with one payment processor, payments can be routed through an alternative provider. Our risk engine uses both proprietary and third-party tools to detect, identify, and mitigate financial risk associated with payment flows.
We have used, and intend to continue to use, our website, investor relations website (accessible via our website), and social media accounts, including our X, formerly Twitter, feed (@billcom), our LinkedIn page and our Facebook page, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. 15 The contents of the websites provided above are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC.
We have used, and intend to continue to use, our website, investor relations website (accessible via our website), and social media accounts, including our X, formerly Twitter, feed (@billcom), our LinkedIn page and our Facebook page, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
Once a payment transaction is processed, we continue to manage our exposure. We have extensive contacts in the banking industry, and we utilize these to reverse payments when possible. If a suspicious or fraudulent payment cannot be reversed, we follow a rigorous collections process to recover funds.
This approach enables rapid adaptation to emerging threats and regulatory changes. Once a payment transaction is processed, we continue to manage our exposure including, in some cases, seeking to reverse payments when possible. If a suspicious or fraudulent payment cannot be reversed, we follow a rigorous collections process to recover funds.
The customer's Accounts Payable staff can review the result and make any adjustments required, and our platform routes the bill internally for approval. • Digital workflows and approvals – Our platform speeds approval processes through policy-driven workflows. Much of this activity takes place while people are on-the-go: one of the top three uses of our mobile app is bill approvals.
The customer's Accounts Payable staff can review the result and make any adjustments required, and our platform routes the bill internally for approval. 4 • Digital workflows and approvals – Our platform speeds approval processes through policy-driven workflows.
We leverage data and analytics to align the recruiting function to business growth and revenue drivers. We are committed to providing a fair and equitable compensation and benefits program that supports our diverse workforce. BILL offers market-competitive base salaries, semi-annual bonuses, and sales incentives.
We are committed to providing a fair and equitable compensation and benefits program that supports our diverse workforce. BILL offers market-competitive base salaries, semi-annual bonuses, and sales incentives. Many of our employees are awarded equity at the time of hire and through annual equity grants.
Last year, ABLE graduated 11 entrepreneurs with impact-oriented solutions at the local and national levels across multiple sectors. 14 Environmental Matters Our San Jose headquarters building is LEED Gold and Energy Star certified, and our Houston building is LEED GOLD certified. In San Jose, California and Draper, Utah, we also offer employees free electric vehicle charging stations.
Environmental Matters Our San Jose headquarters building is LEED Gold and Energy Star certified. In San Jose, California and Draper, Utah, we also offer employees free electric vehicle charging stations.
Intellectual Property We seek to protect our intellectual property rights by relying upon a combination of patent, trademark, copyright, and trade secret laws, as well as contractual measures.
Intellectual Property We seek to protect our intellectual property rights by relying upon a combination of patent, trademark, copyright, and trade secret laws, as well as contractual measures. As of June 30, 2025, in the U.S., we had 26 issued patents that expire between 2028 and 2042, and 9 pending patent applications.
Our full-time employees are eligible to receive, subject to the satisfaction of certain eligibility requirements, our comprehensive benefits package, including medical, dental, and vision insurance, family planning support and fertility treatments, and life and income protection plans. In addition, we provide generous paid time-off policies, access to free mental health services, and offer a tax-qualified 401(k) retirement plan.
We also offer an employee stock purchase plan to foster a strong sense of ownership and engage our employees in our long-term success. Our full-time employees are eligible to receive, subject to the satisfaction of certain eligibility requirements, our comprehensive benefits package, including medical, dental, and vision insurance, family planning support and fertility treatments, and life and income protection plans.
We intend to pursue additional patent protection to the extent we believe it would be beneficial and cost effective. As of June 30, 2024, in the U.S. we had two trademark registrations covering the “Bill.com” logo and three trademark registrations for DIVVY or the Divvy logo, along with registrations for Divvy slogans.
We intend to pursue additional patent protection to the extent we believe it would be beneficial and cost effective. As of June 30, 2025, in the U.S. we had 12 trademark registrations and one pending application covering our company logos and related designs.
We are required to comply with Regulation E, the Electronic Funds Transfer Act, which regulates certain funds transfers. We are procuring additional state lending licenses to support certain lending products. We also partner with an FDIC and state-regulated bank to offer lending products originated by such bank and may originate loans using our own licenses in the future.
We are required to comply with Regulation E, the Electronic Funds Transfer Act, which regulates certain funds transfers. We are procuring additional state lending licenses to support certain lending products.
The integrated platform enables businesses using our solutions to navigate our product offerings easily, and to gain more visibility and control, empowering them to better manage their finances. Accounts Payable Automation Our accounts payable automation service streamlines the entire payables process, from the receipt of a bill, through the approvals workflow, to the payment and synchronization with the accounting system.
Accounts Payable Automation Our accounts payable automation service streamlines the entire payables process, from the receipt of a bill, through the approvals workflow, to the payment and synchronization with the accounting system.
We own one registration in Australia for the Invoice2Go logo, along with additional registrations internationally for the mark INVOICE2GO or the Invoice2Go logo. We will pursue additional trademark registrations to the extent we believe it would be beneficial and cost-effective. We also own several domain names, including www.bill.com, www.getdivvy.com, and www.invoice2go.com.
We also hold two registrations in Canada and one pending application, as well as various pending registrations and applications in other countries. We will pursue 14 additional trademark registrations to the extent we believe it would be beneficial and cost-effective. We also own several domain names, including www.bill.com.
Guided by best practices, feedback we receive from our stockholders, and third-party frameworks such as the Sustainability Accounting Standards Board Software & IT Services standards, we are focused on the initiatives described below. Our Culture and Employees Our culture enables us to attract and retain exceptional talent.
We take this commitment seriously and provide transparent disclosures on the progress of this work through both our internal and external communications. Guided by best practices, feedback we receive from our stockholders, and third-party frameworks such as the Sustainability Accounting Standards Board Software & IT Services standards, we are focused on the initiatives described below, among others.
We deliver single sign-on, multi-factor authentication, integrated provisioning, and entitlement of new accounts, as well as integration with required compliance systems.
We provide our financial institution partners a technology platform that enables various integrations, including a white-label integration with their existing business banking services. We deliver single sign-on, multi-factor authentication, integrated provisioning, and entitlement of new accounts, as well as integration with required compliance systems.
Our platform empowers accountants with a purpose-built console to collaborate with their staff and clients across multiple workflows enabling them to be more strategic and serve more clients. We provide our financial institution partners a technology platform that enables a white-label integration with their existing business banking services.
Partner Integrations Accounting firms use our platform to provide financial automation, bill payment, and client advisory services, or “CAS,” to their clients. Our platform empowers accountants with a purpose-built console to collaborate with their staff and clients across multiple workflows enabling them to be more strategic and serve more clients.
Once in the network, other BILL customers can easily link to that same supplier without the supplier having to repeat this process again. This approach to connecting businesses has allowed us to build a robust and growing business-to-business payments directory, which includes approximately 7.1 million network members as of June 30, 2024.
This approach to connecting businesses has allowed us to build a robust and growing business-to-business payments directory, which includes approximately 8.3 million network members as of June 30, 2025, representing an increase in cumulative total network members of approximately 18% since June 30, 2024.
The program’s goal is to prepare these young adults for academic success, college acceptance, and early career growth by offering work study opportunities, internships, and mentoring. BILL also partnered with the African Diaspora Network to launch their Accelerating Black Leadership and Entrepreneurship (ABLE) program, an enterprise accelerator program, now in its fourth year.
BILL also partnered with the African Diaspora Network to launch their Accelerating Business Leadership and Entrepreneurship (ABLE) program, an enterprise accelerator program, now in its fifth year.
Our platform proactively suggests payment dates based upon a bill’s due date, helping customers avoid late payment penalty fees. Businesses using our solutions assign each user a role: administrator, payor, approver, clerk, or accountant. Each role has its own entitlements to ensure appropriate checks and balances in the back office. • Collaboration and engagement – Our platform promotes collaboration.
Much of this activity takes place while people are on-the-go: one of the top three uses of our mobile app is bill approvals. Our platform proactively suggests payment dates based upon a bill’s due date, helping customers avoid late payment penalty fees. Businesses using our solutions assign each user a role: administrator, payor, approver, clerk, or accountant.
Through the self-directed brokerage features of the plan, participants in the 401(k) plan can choose to invest their contributions in funds that are focused on their particular goals and preferences, such as ESG matters. We develop our leaders and high-potential employees through intensive, cohort-based, key talent programs. We offer training for new people managers.
In addition, we provide generous paid time-off policies, access to free mental health services, and offer a tax-qualified 401(k) retirement plan. Through the self-directed brokerage features of the plan, participants in the 401(k) plan can choose to invest their contributions in funds that are focused on their particular goals and preferences.
This risk management process gets progressively more insightful as our data set gets larger and our AI-enabled risk engine gets smarter. This is an advantage that we expect to continue to grow over time. Our success in managing the risk inherent in moving funds for business customers is proven.
As our risk management process grows more insightful, we efficiently handle larger payment volumes with AI-enabled risk engines. Protocols are regularly reviewed and updated to ensure ongoing compliance and operational resilience, supporting secure and reliable payment processing for our customers. Our success in managing the risk inherent in moving funds for business customers is proven.
We also recently launched a quarterly DEI Speaker Series, where we invite internal and external subject matter experts to speak to DEI topics in which our employees have expressed interest. We partner with organizations like Codepath.org and ColorStack to support Black, Latinx, and Indigenous students interested in technical careers.
We also host a quarterly Leadership Speaker Series, where we invite internal and external subject matter experts from a diverse range of backgrounds to speak to topics in which our employees have expressed interest. All employees are eligible and participate in developmental reviews with their managers. We conduct performance review cycles twice a year.
Our platform also expands the ability of businesses using our solutions to real-time budget for, monitor, and approve employee expenses across organizations of all sizes. In fall 2023, we announced the launch of our “integrated platform," which incorporated BILL Spend and Expense into our main accounts payable and receivable platform, and which we have continued to augment during fiscal 2024.
Our platform also expands the ability of businesses using our solutions to real-time budget for, monitor, and approve employee expenses across organizations of all sizes. Our integrated platform enables businesses using our solutions to navigate our product offerings easily, and to gain more visibility and control, empowering them to better manage their finances.
Through our apps, businesses using our solutions can manage their transaction workflows, send an invoice, make payments on-the-go, and manage spend. Partner Integrations Accounting firms use our platform to provide financial automation, bill payment, and client advisory services, or “CAS,” to their clients.
Through our apps, businesses using our solutions can manage their transaction workflows, send an invoice, make payments on-the-go, and manage spend. • Supplier payments plus – A new offering that enables large suppliers to quickly and efficiently process and reconcile high volumes of payments from SMBs through our platform, providing a more seamless payment experience for the businesses they work with.
Further, our references to the URLs for these websites are intended to be inactive textual references only. 16
The contents of the websites provided above are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC. Further, our references to the URLs for these websites are intended to be inactive textual references only. 15
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Throughout the transaction lifecycle, we monitor data and payments to ensure that we are safeguarding our customers, their suppliers and clients, and our company.
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Each role has its own entitlements to ensure appropriate checks and balances in the back office. • Collaboration and engagement – Our platform promotes collaboration. Our in-app messaging capabilities make communications between businesses using our solutions and their employees, vendors, and clients, easy.
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When a bank account is added to the platform, we validate that the bank account is held at a U.S.-domiciled financial institution, is associated with the organization adding the account, and is in good standing. 8 When customers use our services, we monitor key activities looking for signals that would indicate anomalies that could create risk exposure and need to be investigated.
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Once in the network, other BILL customers can easily link to that same supplier without the supplier having to repeat this process again.
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Our risk engine analyzes many unique data elements to score transactions. Those that score above our thresholds are routed to trained risk agents for manual review. Agents have the latitude to contact customers to gather further information, or if a financial risk is imminent, to prevent funds from leaving our system until any suspicious activity can be resolved.
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All transactions are monitored for suspicious behavior and potential fraud, working closely with banking partners to address issues swiftly. 8 Our system monitors activity for anomalies, ensuring compliance with regulatory requirements and internal risk policies and thresholds. Agents and automated tools collaborate to investigate and resolve issues, safeguarding customer accounts and maintaining the integrity of financial operations.
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Global Affairs Canada and Canada's Department of Public Safety administer Canadian sanctions programs and oversee our compliance with these regulations.
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We also partner with a Federal Deposit Insurance Corporation (FDIC) and state-regulated bank to offer lending products originated by such bank and may originate loans using our own licenses in the future.
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In addition, by partnering with regulated banks for the provision of business deposit accounts in connection with certain of our Invoice2Go products, we are indirectly subject to certain regulations of the Federal Deposit Insurance Corporation (FDIC).
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Our Culture and Employees Our culture enables us to attract and retain exceptional talent.
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We take this commitment seriously and will continue to provide transparent disclosures on the progress of this work through both our internal and external communications. Our executive leadership team sponsors and funds our ESG programs, with our board of directors exercising ultimate oversight.
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To support hiring the best talent for BILL, we have a rigorous interview process with training for hiring managers and interviewers, interview guides tailored specifically for different roles, and impartial talent champions whose role is to uphold BILL’s high hiring standards in our candidate debriefs.
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The majority of our employees are awarded equity at the time of hire and through annual equity refresh grants. We also offer an employee stock purchase plan to foster a strong sense of ownership and engage our employees in our long-term success.
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We leverage data and analytics to align the recruiting function to business growth and revenue drivers. We also partner with organizations like Codepath.org and ColorStack to support students interested in technical careers. In addition, we have an Ambassador Program that gives candidates an opportunity to connect with current employees to learn more about BILL’s culture before deciding to join BILL.
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To facilitate ongoing learning and development, we provide employees with an online curriculum of study, linked to business needs, leveraging a third-party platform. The curriculum includes coursework in inclusion, change management, and decision-making. All 13 employees are eligible and participate in developmental reviews with their managers. We conduct performance review cycles twice a year.
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We develop our leaders and high-potential employees through intensive, cohort-based, key talent programs. We offer training for new people managers. To facilitate ongoing learning and development, we provide employees with an online curriculum of study, linked to business needs, leveraging a third-party platform and including special trainings on areas of particular interest.
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We seek to embed a sense of inclusion and social responsibility into our culture and how we serve the businesses using our solutions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeCertain of our other current and future product offerings may also subject us to credit risk; • Our risk management efforts may not be effective to prevent fraudulent activities by our customers, subscribers, spending businesses or their counterparties, or other third parties which could expose us to material financial losses and liabilities and otherwise harm our business; • The markets in which we participate are competitive, and if we do not compete effectively, our operating results could be harmed; • We transfer large sums of customer funds daily, and are subject to numerous associated risks which could result in financial losses, damage to our reputation, or loss of trust in our brand, which would harm our business and financial results; • Our business depends, in part, on our relationships with accounting firms; • Our business depends, in part, on our business relationships with financial institutions; • We are subject to numerous risks related to partner banks and financing arrangements with respect to our spend and expense management solution; • Future acquisitions, strategic investments, partnerships, collaborations, or alliances could be difficult to identify and integrate, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our operating results and financial condition; • Payments and other financial services-related regulations and oversight are material to our business.
Biggest changeCertain of our other current and future product offerings, such as invoice financing, may also subject us to credit risk; • Our risk management efforts may not be effective to prevent fraudulent activities by our customers, subscribers, spending businesses, or their counterparties, or other third parties which could expose us to material financial losses and liabilities and otherwise harm our business; • The markets in which we participate are competitive, and if we do not compete effectively, our operating results could be harmed; • We transfer large sums of customer funds daily, and are subject to numerous associated risks which could result in financial losses, damage to our reputation, or loss of trust in our brand, which would harm our business and financial results; • Our business depends, in part, on our relationships with accounting firms; • Our business depends, in part, on our business relationships with financial institutions; • Our recent growth may not be indicative of our future growth, and there is no assurance that we will be able to scale our platform and infrastructure, and manage our growth effectively. • We are subject to numerous risks related to partner banks and financing arrangements with respect to our spend and expense management solution; • We use artificial intelligence in our business, and any challenges with successfully developing and deploying new AI tools or properly managing the use of AI could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations; 16 • Future acquisitions, strategic investments, partnerships, collaborations, or alliances could be difficult to identify and integrate, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our operating results and financial condition; • Payments and other financial services-related regulations and oversight are material to our business.
Our amended and restated certificate of incorporation and second amended and restated bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our common stock; • require that any action to be taken by our stockholders be affected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, or our chief executive officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; 53 • provide that our directors may be removed for cause only upon the vote of sixty-six and two-thirds percent (66 2/3%) of our outstanding shares of common stock; • provide that vacancies on our board of directors may be filled only by a majority vote of directors then in office, even though less than a quorum; and • require the approval of our board of directors or the holders of at least sixty-six and two-thirds percent (66 2/3%) of our outstanding shares of common stock to amend our bylaws and certain provisions of our certificate of incorporation.
Our amended and restated certificate of incorporation and second amended and restated bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our common stock; • require that any action to be taken by our stockholders be affected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, or our chief executive officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed for cause only upon the vote of sixty-six and two-thirds percent (66 2/3%) of our outstanding shares of common stock; • provide that vacancies on our board of directors may be filled only by a majority vote of directors then in office, even though less than a quorum; and • require the approval of our board of directors or the holders of at least sixty-six and two-thirds percent (66 2/3%) of our outstanding shares of common stock to amend our bylaws and certain provisions of our certificate of incorporation.
Our failure to comply could materially harm our business; 17 • Our debt service obligations, including the Notes, may adversely affect our financial condition and results of operations; • We may not have the ability to raise the funds necessary for cash settlement upon conversion of the Notes or to repurchase the Notes for cash upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion of the Notes or to repurchase the Notes; and • The market for our common stock has been, and will likely continue to be, volatile and the market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control.
Our failure to comply could materially harm our business; • Our debt service obligations, including the Notes, may adversely affect our financial condition and results of operations; • We may not have the ability to raise the funds necessary for cash settlement upon conversion of the Notes or to repurchase the Notes for cash upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion of the Notes or to repurchase the Notes; and • The market for our common stock has been, and will likely continue to be, volatile and the market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control.
The occurrence of any credit losses, operational errors, software defects, service disruptions, employee misconduct, security breaches, or other similar actions or errors on our platform could result in financial losses to our business and our customers, loss of trust, damage to our reputation, or termination of our agreements with financial institution partners and accountants, each of which could result in: • loss of customers; • lost or delayed market acceptance and sales of our platform; 25 • legal claims against us, including warranty and service level agreement claims; • regulatory enforcement action; or • diversion of our resources, including through increased service expenses or financial concessions, and increased insurance costs.
The occurrence of any credit losses, operational errors, software defects, service disruptions, employee misconduct, security breaches, or other similar actions or errors on our platform could result in financial losses to our business and our customers, loss of trust, damage to our reputation, or termination of our agreements with financial institution partners and accountants, each of which could result in: • loss of customers; • lost or delayed market acceptance and sales of our platform; • legal claims against us, including warranty and service level agreement claims; • regulatory enforcement action; or • diversion of our resources, including through increased service expenses or financial concessions, and increased insurance costs.
Interchange fees generally involve a variety of risks, including: • fluctuations due to the variability of card acceptance practices at supplier locations, and the resulting effect on our revenue; • changes in card network interchange rates or rules which could dissuade new and existing card-accepting suppliers from continuing to accept card payments; • unexpected compliance and risk management imposed by the card networks or resulting from changes in regulation; • declines in the number of active card-accepting suppliers due to concerns about cost or operational complexity; and • unexpected changes in card acceptance or card issuing rules which may impact our ability to offer this payment product.
Interchange fees generally involve a variety of risks, including: • fluctuations due to the variability of card acceptance practices at supplier locations, and the resulting effect on our revenue; • changes in card network interchange rates or rules which could dissuade new and existing card-accepting suppliers from continuing to accept card payments; • unexpected compliance and risk management imposed by the card networks or resulting from changes in regulation; 34 • declines in the number of active card-accepting suppliers due to concerns about cost or operational complexity; and • unexpected changes in card acceptance or card issuing rules which may impact our ability to offer this payment product.
Prior to the close of business on the business day immediately preceding September 1, 2025, in the case of the 2025 Notes, and January 1, 2027, in the case of the 2027 Notes, the holders of the applicable Notes may elect to convert their Notes during any calendar quarter (and only during such calendar quarter) if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day (Conversion Condition).
Prior to the close of business on the business day immediately preceding September 1, 2025, in the case of the 2025 Notes, January 1, 2027, in the case of the 2027 Notes, and January 1, 2030, in the case of the 2030 Notes, the holders of the applicable Notes may elect to convert their Notes during any calendar quarter (and only during such calendar quarter) if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day (Conversion Condition).
Accounting software providers, such as Intuit, as well as the financial institutions with which we partner, may internally develop products, acquire existing, third-party products, or may enter into partnerships or other strategic relationships that would enable them to expand their product offerings to compete with our platform or provide more comprehensive offerings than they individually had offered or achieve greater economies of scale than us.
Software providers, such as Intuit, as well as the financial institutions with which we partner, may internally develop products, acquire existing, third-party products, or may enter into partnerships or other strategic relationships that would enable them to expand their product offerings to compete with our platform or provide more comprehensive offerings than they individually had offered or achieve greater economies of scale than us.
If any of the accounting software providers change the features of their APIs, discontinue their support of such APIs, restrict our access to their APIs, or alter the terms or practices governing their use in a manner that is adverse to our business, we may be restricted or may not be able to provide synchronization capabilities, which could significantly diminish the value of our platform and harm our business, operating results, and financial condition.
If any of the software providers change the features of their APIs, discontinue their support of such APIs, restrict our access to their APIs, or alter the terms or practices governing their use in a manner that is adverse to our business, we may be restricted or may not be able to provide synchronization capabilities, which could significantly diminish the value of our platform and harm our business, operating results, and financial condition.
Regulators regularly re-examine the transaction volume thresholds at which we must obtain and keep applicable records or verify identities of customers, and any change in such thresholds could result in greater costs for compliance. We are subject to anti-corruption, anti-bribery, and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business.
Regulators regularly re-examine the transaction volume thresholds at which we must obtain and keep applicable records or verify identities of customers, and any change in such thresholds could result in greater costs for compliance. 46 We are subject to anti-corruption, anti-bribery, and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business.
While we believe our platform offers much greater functionality than these products, there can be no assurance that QuickBooks customers will not opt to change providers for certain accounts payable services in the future, or that our ability to win, retain and expand our footprint with BILL Divvy Corporate Card customers will not be challenged by these competing offerings.
While we believe our platform offers much greater functionality than these products, there can be no assurance that QuickBooks customers will not opt to change providers for certain accounts payable services in the future, or that our ability to win, retain and expand our footprint with BILL Divvy Card customers will not be challenged by these competing offerings.
If we are unable to enhance our platform, add new payment methods, or develop new products that keep pace with technological and regulatory change and achieve market acceptance, or if new technologies emerge that are able to deliver competitive products and services at lower prices, more efficiently, more conveniently, or more securely than our products, our business, operating results, and financial condition would be adversely affected.
If we are unable to enhance our platform, add new payment methods, or develop new products that keep pace with technological and regulatory change and achieve market acceptance, or if new technologies emerge that are able to deliver competitive products and services at lower prices, more efficiently, more conveniently, or more 31 securely than our products, our business, operating results, and financial condition would be adversely affected.
For a substantial majority of extensions of credit to BILL Spend and Expense spending businesses facilitated through our spend and expense management platform, we purchase from the Issuing Banks participation interests in the accounts receivables generated when spending businesses make purchases using BILL Divvy Corporate Cards, and we bear the entire credit risk in the event that a spending business fails to pay card balances.
For a substantial majority of extensions of credit to BILL Spend and Expense spending businesses facilitated through our spend and expense management platform, we purchase from the Issuing Banks participation interests in the accounts receivables generated when spending businesses make purchases using BILL Divvy Cards, and we bear the entire credit risk in the event that a spending business fails to pay card balances.
We do not file UCC liens or take other security interests on BILL Divvy Corporate Card balances, which significantly reduces our ability to collect amounts outstanding from spending businesses that file for bankruptcy protection. Any such losses or failures of our risk models could harm our business, operating results, and financial condition.
We do not file UCC liens or take other security interests on BILL Divvy Card balances, which significantly reduces our ability to collect amounts outstanding from spending businesses that file for bankruptcy protection. Any such losses or failures of our risk models could harm our business, operating results, and financial condition.
We face risks, including to our reputation as a trusted brand, in the handling and protection of this data, and these risks will increase as our business continues to expand to include new products and technologies. Cybersecurity incidents and malicious internet-based activity continue to increase generally, and providers of cloud-based services have frequently been targeted by such attacks.
We face risks, including to our reputation as a trusted brand, in the handling and protection of this data, and these risks will increase as our business continues to expand to include new products and technologies. 44 Cybersecurity incidents and malicious internet-based activity continue to increase generally, and providers of cloud-based services have frequently been targeted by such attacks.
As a result of these and other factors, we may be unable to attract new customers or our related expenses may increase, which would have an adverse effect on our business, revenue, gross margins, and operating results. 21 In addition, revenue growth from our charge card products is dependent on increasing business spending on our cards.
As a result of these and other factors, we may be unable to attract new customers or our related expenses may increase, which would have an adverse effect on our business, revenue, gross margins, and operating results. In addition, revenue growth from our charge card products is dependent on increasing business spending on our cards.
In recent periods, market interest rates have increased and the trading prices for our common stock and other technology companies have been highly volatile, which may reduce our ability to access capital on favorable terms or at all. More recently, credit and capital markets have been impacted by instability in the U.S. banking system.
In recent periods, market interest rates have increased and the trading prices for our common stock and other technology companies have been highly volatile, which may reduce our ability to access capital on favorable terms or at all. More recently, credit and capital markets have been impacted by 35 instability in the U.S. banking system.
For instance, these provisions would not preclude the filing of claims brought to enforce any liability or duty created by the Exchange Act or Securities Act of 1933, as amended (Securities Act), or the rules and regulations thereunder in federal court. Moreover, Section 203 of the DGCL may discourage, delay, or prevent a change in control of our company.
For instance, these provisions would not preclude the filing of claims 52 brought to enforce any liability or duty created by the Exchange Act or Securities Act of 1933, as amended (Securities Act), or the rules and regulations thereunder in federal court. Moreover, Section 203 of the DGCL may discourage, delay, or prevent a change in control of our company.
Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments. 54 If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, our stock price and trading volume could decline.
Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments. If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, our stock price and trading volume could decline.
To increase our revenue, in addition to acquiring new customers, we must continue to retain existing customers and convince them to expand their use of our platform by incentivizing them to pay for additional services and driving adoption of new and existing payment products, including ad valorem products such as our BILL Divvy Corporate Cards, virtual cards, instant transfer, and international payment offerings.
To increase our revenue, in addition to acquiring new customers, we must continue to retain existing customers and convince them to expand their use of our platform by incentivizing them to pay for additional services and driving adoption of new and existing payment products, including ad valorem products such as our BILL Divvy Cards, virtual cards, instant transfer, and international payment offerings.
We are required, pursuant to Section 404 of Sarbanes-Oxley (Section 404), to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud.
We are required, pursuant to Section 404 of Sarbanes-Oxley (Section 404), to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. Effective 37 internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud.
This may require us to expend substantial resources or to discontinue certain products, which would negatively affect our business, financial condition, 45 and operating results. In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise adversely affect the growth of our business.
This may require us to expend substantial resources or to discontinue certain products, which would negatively affect our business, financial condition, and operating results. In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise adversely affect the growth of our business.
As a licensed Foreign Money Services business in Canada, we are subject to Canadian compliance regulations applicable to money movement and sanctions requirements. In addition, our DivvyPay, LLC subsidiary holds brokering and servicing licenses required in connection with our BILL Divvy Corporate Card offering, and certain of our other subsidiaries hold loan brokering and servicing licenses as well.
As a licensed Foreign Money Services business in Canada, we are subject to Canadian compliance regulations applicable to money movement and sanctions requirements. In addition, our DivvyPay, LLC subsidiary (Divvy) holds brokering and servicing licenses required in connection with our BILL Divvy Card offering, and certain of our other subsidiaries hold loan brokering and servicing licenses as well.
Additionally, as customers increasingly seek expedited methods of electronic payments, such as instant transfer, or potentially migrate spend to our BILL Divvy Corporate Card offering, our revenue from interest earned on customer funds could decrease (even if offset by other revenue) and our operating results could be adversely affected.
Additionally, as customers increasingly seek expedited methods of electronic payments, such as instant transfer, or potentially migrate spend to our BILL Divvy Card offering, our revenue from interest earned on customer funds could decrease (even if offset by other revenue) and our operating results could be adversely affected.
As part of our compliance efforts, we scan our customers against OFAC and other watch lists and have controls to monitor and mitigate these risks. If our services are accessed from a sanctioned country in violation of the trade and economic sanctions, we could be subject to fines or other enforcement action.
As part of our compliance efforts, we scan our customers and payments against OFAC and other watch lists and have controls to monitor and mitigate these risks. If our services are accessed from a sanctioned country in violation of the trade and economic sanctions, we could be subject to fines or other enforcement action.
As a result, we could be subject to lawsuits by parties claiming ownership of what we believe to be open source software. 49 Litigation could be costly for us to defend, have a negative effect on our operating results and financial condition, or require us to devote additional research and development resources to change our products.
As a result, we could be subject to lawsuits by parties claiming ownership of what we believe to be open source software. Litigation could be costly for us to defend, have a negative effect on our operating results and financial condition, or require us to devote additional research and development resources to change our products.
Any failure to preserve our culture could negatively affect our ability to retain and recruit personnel, which is critical to our growth, and to effectively focus on and pursue our corporate objectives. As we grow and develop the infrastructure of a public company, we may find it difficult to maintain these important aspects of our culture.
Any failure to preserve our culture could negatively affect our ability to retain and recruit personnel, which is critical to our growth, and to effectively focus on and pursue our corporate objectives. As we grow and develop the infrastructure of a public company, we may find it difficult to maintain these important 39 aspects of our culture.
If security, data protection, and information security measures in place at businesses we acquire are 31 inadequate or breached, or are subject to cybersecurity attacks, or if any of the foregoing is reported or perceived to have occurred, our reputation and business could be damaged and we could be subject to regulatory scrutiny, investigations, proceedings, and penalties.
If security, data protection, and information security measures in place at businesses we acquire are inadequate or breached, or are subject to cybersecurity attacks, or if any of the foregoing is reported or perceived to have occurred, our reputation and business could be damaged and we could be subject to regulatory scrutiny, investigations, proceedings, and penalties.
We may also acquire businesses whose operations may not be fully compliant with all applicable law, including economic and trade sanctions and anti-money laundering, counter-terrorist financing, and privacy laws, subjecting us to potential liabilities and requiring us to spend considerable time, effort, and resources to address.
We may also acquire businesses whose 30 operations may not be fully compliant with all applicable law, including economic and trade sanctions and anti-money laundering, counter-terrorist financing, and privacy laws, subjecting us to potential liabilities and requiring us to spend considerable time, effort, and resources to address.
In addition, if any of the accounting software providers with which our platform currently integrates should choose to disable two-way synchronization, there can be no assurance that customers shared with such providers would not choose to leave our platform, adversely affecting our business and results of operations.
In addition, if any of the software providers with which our platform currently integrates should choose to disable two-way synchronization, there can be no assurance that customers shared with such providers would not choose to leave our platform, adversely affecting our business and results of operations.
In addition, if any of these accounting software providers reconfigure their platforms in a manner that no longer supports our integration with their accounting software, we would lose customers and our business would be adversely affected. If we are unable to increase adoption of our platform with customers of these accounting software solutions, our growth prospects may be adversely affected.
In addition, if any of these software providers reconfigure their platforms in a manner that no longer supports our integration with their software, we would lose customers and our business would be adversely affected. If we are unable to increase adoption of our platform with customers of these software solutions, our growth prospects may be adversely affected.
In addition, we offer promotion programs whereby spending businesses that use our spend and expense management product can earn rewards based on transaction volume on our BILL Divvy Corporate Cards, and the cost of earned rewards that are redeemed impacts our sales and marketing expenses.
In addition, we offer promotion programs whereby spending businesses that use our spend and expense management product can earn rewards based on transaction volume on our BILL Divvy Cards, and the cost of earned rewards that are redeemed impacts our sales and marketing expenses.
If we are unsuccessful in establishing, growing, or maintaining our relationships with financial institution partners, or if any of our financial institution 27 partners elect to terminate their relationships with us, our ability to compete in the marketplace or to grow our revenue could be impaired, and our operating results may suffer.
If we are unsuccessful in establishing, growing, or maintaining our relationships with financial institution partners, or if any of our financial institution partners elect to terminate their relationships with us, our ability to compete in the marketplace or to grow our revenue could be impaired, and our operating results may suffer.
Laws and regulations in these 44 jurisdictions apply broadly to the collection, use, storage, disclosure, and security of various types of data, including data that identifies or may be used to identify an individual, such as names, email addresses, and internet protocol addresses.
Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure, and security of various types of data, including data that identifies or may be used to identify an individual, such as names, email addresses, and internet protocol addresses.
Any of our patents, trademarks, or other intellectual property rights may be 48 challenged or circumvented by others or invalidated through administrative process or litigation. There can be no guarantee that others will not independently develop similar products, duplicate any of our products, or design around our patents.
Any of our patents, trademarks, or other intellectual property rights may be challenged or circumvented by others or invalidated through administrative process or litigation. There can be no guarantee that others will not independently develop similar products, duplicate any of our products, or design around our patents.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the NYSE. 39 Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the U.S.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the NYSE. Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the U.S.
The credit decision-making process for our BILL Divvy Corporate Cards uses techniques designed to analyze the credit risk of specific businesses based on, among other factors, their past purchase and transaction history, as well as their credit scores.
The credit decision-making process for our BILL Divvy Cards uses techniques designed to analyze the credit risk of specific businesses based on, among other factors, their past purchase and transaction history, as well as their credit scores.
We offer software that digitizes and automates financial operations for a large number of customers and executes payments to their vendors or from their clients. We are responsible for verifying the identity of our 23 customers and their users, and monitoring transactions for fraud.
We offer software that digitizes and automates financial operations for a large number of customers and executes payments to their vendors or from their clients. We are responsible for verifying the identity of our customers and their users, and monitoring transactions for fraud.
With the introduction of new technologies and market entrants, we expect that the competitive environment will remain intense going forward. Our competitors that currently focus on enterprise solutions may offer products to SMBs that compete with ours.
With the introduction of new technologies and market entrants, we expect that the competitive environment will remain intense going forward. Our competitors that currently focus on enterprise 22 solutions may offer products to SMBs that compete with ours.
As we expand into new jurisdictions, the number of foreign laws, rules, regulations, licensing schemes, and standards governing our business will expand as well. In addition, as our 41 business and products continue to develop and expand, we may become subject to additional laws, rules, regulations, licensing schemes, and standards.
As we expand into new jurisdictions, the number of foreign laws, rules, regulations, licensing schemes, and standards governing our business will expand as well. In addition, as our business and products continue to develop and expand, we may become subject to additional laws, rules, regulations, licensing schemes, and standards.
The Capped Calls may affect the value of our Notes and our common stock. In connection with the sale of each of the 2025 Notes and the 2027 Notes, we entered into privately negotiated Capped Call transactions (collectively, the Capped Calls) with certain financial institutions (option counterparties).
The Capped Calls may affect the value of our Notes and our common stock. In connection with the sale of each of the 2025 Notes, the 2027 Notes and the 2030 Notes we entered into privately negotiated Capped Call transactions (collectively, the Capped Calls) with certain financial institutions (option counterparties).
In addition, we do not make any representation that the option counterparties will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice. We are subject to counterparty risk with respect to the Capped Calls.
In addition, we 50 do not make any representation that the option counterparties will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice. We are subject to counterparty risk with respect to the Capped Calls.
In addition, it may be necessary to engage in more sophisticated and costly sales and marketing efforts in order to attract new customers, and changes in privacy laws and third-party practices may make adding new customers more expensive or difficult.
In addition, it may be necessary to engage in more sophisticated and costly sales and marketing efforts in order to attract new customers, and changes in privacy laws and third party practices may make adding new customers more 19 expensive or difficult.
We currently handle cross-border payments and plan to expand our payments offerings to new customers and to make payments to new countries, creating a variety of operational challenges. A component of our growth strategy involves our cross-border payments product and, ultimately, expanding our operations internationally.
We currently handle cross-border payments and plan to expand our payments offerings to new customers and to make payments to new countries, creating a variety of operational challenges. A component of our growth strategy involves our cross-border payments product and expanding our operations internationally.
Certain of our products, including our BILL Divvy Corporate Card and our virtual card products, generate revenue primarily from interchange fees paid by the supplier accepting the cards for purchase transactions. Interchange fees comprise a substantial portion of our total revenue.
Certain of our products, including our BILL Divvy Card and our virtual card products, generate revenue primarily from interchange fees paid by the supplier accepting the cards for purchase transactions. Interchange fees comprise a substantial portion of our total revenue.
Any of these developments could adversely affect our business, financial condition, and operating results. 35 If we fail to maintain and enhance our brands, our ability to expand our customer base will be impaired and our business, operating results, and financial condition may suffer.
Any of these developments could adversely affect our business, financial condition, and operating results. If we fail to maintain and enhance our brands, our ability to expand our customer base will be impaired and our business, operating results, and financial condition may suffer.
If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm 36 our business, operating results, and financial condition.
If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, operating results, and financial condition.
In addition, the market for our spend and expense management solution is new and fragmented, and it 32 is uncertain whether we will achieve and sustain high levels of demand and market adoption.
In addition, the market for our spend and expense management solution is new and fragmented, and it is uncertain whether we will achieve and sustain high levels of demand and market adoption.
Further, as our business develops, we may revise or cease 40 reporting certain metrics if we determine that such metrics are no longer accurate or appropriate measures of our performance.
Further, as our business develops, we may revise or cease reporting certain metrics if we determine that such metrics are no longer accurate or appropriate measures of our performance.
If we do not or cannot maintain the compatibility of our platform with popular accounting software solutions or offerings of our partners, our revenue and growth prospects will decline.
If we do not or cannot maintain the compatibility of our platform with popular software solutions or offerings of our partners, our revenue and growth prospects will decline.
For example, we recently identified gaps in our IP address blocking controls and believe that certain U.S. domestic payments were made through our platform by U.S. customers while traveling in sanctioned countries. In addition, we identified that one of our acquired subsidiaries, Zipbooks, onboarded and received a limited amount of subscription payments from certain subscribers potentially located in sanctioned countries.
For example, we previously identified gaps in our IP address blocking controls and believe that certain U.S. domestic payments were made through our platform by U.S. customers while traveling in sanctioned countries. In addition, we identified that one of our acquired subsidiaries, Zipbooks, onboarded and received a limited amount of subscription payments from certain subscribers potentially located in sanctioned countries.
A change in foreign currency exchange rates, particularly in Australian dollars to U.S. dollars, can affect our financial results due to transaction gains or losses related to the remeasurement of certain monetary asset and monetary liability balances that are denominated in currencies other than U.S. dollars, which is the functional currency of our Australian subsidiary.
A change in foreign currency exchange rates, particularly in Canadian dollars to U.S. dollars, can affect our financial results due to transaction gains or losses related to the remeasurement of certain monetary asset and monetary liability balances that are denominated in currencies other than U.S. dollars, which is the functional currency of our Canadian subsidiary.
In addition, Brex and Ramp, 24 firms primarily known for offering spend and expense management products, introduced bill payment products in recent periods.
In addition, Brex and Ramp, firms primarily known for offering spend and expense management products, introduced bill payment products in recent periods.
In addition, any of these accounting software providers may seek to develop a payment solution of its own, acquire a solution to compete with ours, or decide to partner with other competing applications, any of which its SMB customers may select over ours, thereby harming our growth prospects and reputation and adversely affecting our business and operating results. 29 We depend on third-party service providers to process transactions on our platform and to provide other services important to the operation of our business.
In addition, any of these software providers may seek to develop a payment solution of its own, acquire a solution to compete with ours, or decide to partner with other competing applications, any of which its SMB customers may select over ours, thereby harming our growth prospects and reputation and adversely affecting our business and operating results. 28 We depend on third-party service providers to process transactions on our platform and to provide other services important to the operation of our business.
We also rely on third-party providers to support other aspects of our business, including, for example, for card transaction processing, check printing, real-time payments, virtual and physical card issuance, and our cross-border funds transfer capabilities.
We also rely on third-party providers to support other aspects of our business, including, for example, for card transaction processing, check printing, real-time payments, virtual and physical card issuance, sanctions screening, and our cross-border funds transfer capabilities.
These risks may be exacerbated, individually or in the aggregate, during periods of heavy financial market volatility, such as that experienced in 2008 and 2022, that may result from inflation, high interest rate or recessionary environments, from actual or perceived instability in the U.S. and global banking systems, or from war (such as the ongoing conflicts in Ukraine and the Middle East) or other geopolitical conflicts.
These risks may be exacerbated, individually or in the aggregate, during periods of heavy financial market volatility, such as that experienced in 2008 and 2022, that may result from inflation, high interest rate or recessionary environments, from actual or perceived instability in the U.S. and global banking systems, or from war (such as the ongoing conflict in Ukraine and recent developments in the Middle East) or other geopolitical conflicts.
The use of AI applications has resulted in, and may in the future result in, cybersecurity incidents that implicate the personal data of customers analyzed within such applications. Any such cybersecurity incidents related to our use of AI applications to analysis personal data could adversely affect our reputation and results of operations.
The use of AI applications has resulted in, and may in the future result in, cybersecurity incidents that implicate the personal data of customers analyzed within such applications. Any such cybersecurity incidents related to our use of AI applications to analyze personal data could adversely affect our reputation and results of operations.
Our ability to make payments of the principal of, to pay interest on, or to refinance our indebtedness, including the Notes and our Revolving Credit Facility, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
Our ability to make payments of the principal of, to pay interest on, or to refinance our indebtedness, including the Notes and our Revolving Credit Facilities, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
Moreover, if our renewal or expansion rates fall significantly below the expectations of the public market, securities analysts, or investors, the trading price of our common stock would likely decline. 22 Our BILL Divvy Corporate Card offering exposes us to credit risk and other risks related to spending businesses' ability to pay the balances incurred on their BILL Divvy Corporate Cards.
Moreover, if our renewal or expansion rates fall significantly below the 20 expectations of the public market, securities analysts, or investors, the trading price of our common stock would likely decline. Our BILL Divvy Card offering exposes us to credit risk and other risks related to spending businesses' ability to pay the balances incurred on their BILL Divvy Cards.
In addition to the other risks described herein, factors that may affect our operating results include the following: • fluctuations in demand for, or pricing of our platform; • our ability to attract new customers; • our ability to retain and grow engagement with our existing customers; • our ability to retain and expand our relationships with our accounting firm partners, financial institution partners and accounting software partners, or to identify and attract new partners; • customer expansion rates; • changes in customer preference for cloud-based services as a result of security breaches in the industry or privacy concerns, or other security or reliability concerns regarding our products; • fluctuations or delays in purchasing decisions in anticipation of new products or product enhancements by us or our competitors; • general economic, market, credit and liquidity conditions, both domestically and internationally, such as inflation, high interest rate and recessionary environments, and actual or perceived instability in the U.S. and global banking systems, as well as economic conditions specifically affecting SMBs or the industries in which our customers participate; • changes in customers’ budgets and in the timing of their budget cycles and purchasing decisions, as a result of general economic factors or factors specific to their businesses; • potential and existing customers choosing our competitors’ products or developing their own solutions in-house; • the development or introduction of new platforms or services that are easier to use or more advanced than our current suite of services, especially related to the application of AI-based services; • our failure to adapt to new forms of payment that become widely accepted; • the adoption or retention of more entrenched or rival services in the international markets where we compete; 20 • our ability to control costs, including our operating expenses; • the amount and timing of payment for operating expenses, particularly research and development and sales and marketing expenses, including commissions; • the amount and timing of non-cash expenses, including stock-based compensation, goodwill impairments, and other non-cash charges; • the amount and timing of costs associated with recruiting, training, and integrating new employees, including employees acquired inorganically, and retaining and motivating existing employees; • fluctuation in market interest rates, which impacts interest earned on funds held for customers; • the effects of acquisitions and the integration of acquired technologies and products, including impairment of goodwill; • the impact of new accounting pronouncements; • security breaches of, technical difficulties with, or interruptions to, the delivery and use of our platform; • the impact of the ongoing geopolitical conflicts, including any related economic sanctions and countermeasures taken by other countries, and market volatility resulting therefrom; and • awareness of our brand and our reputation in our target markets.
In addition to the other risks described herein, factors that may affect our operating results include the following: • fluctuations in demand for, or pricing of our platform; • our ability to attract new customers; • our ability to retain and expand utilization by our existing customers; • our ability to retain and expand our relationships with our accounting firm partners, financial institution partners and software provider partners, or to identify and attract new partners; • our ability to build and deploy AI-powered solutions and the amount and timing of the associated research and development expenses; • changes in customer preference for cloud-based services as a result of security breaches in the industry or privacy concerns, or other security or reliability concerns regarding our products; • fluctuations or delays in purchasing decisions in anticipation of new products or product enhancements by us or our competitors; • general economic, market, credit and liquidity conditions, both domestically and internationally, such as inflation, high interest rate and recessionary environments, tariffs, and actual or perceived instability in the U.S. and global banking systems, as well as economic conditions specifically affecting SMBs or the industries in which our customers participate; • changes in customers’ budgets and in the timing of their budget cycles and purchasing decisions, as a result of general economic factors or factors specific to their businesses; • potential and existing customers choosing our competitors’ products or developing their own solutions in-house; 18 • the development or introduction of new platforms or services that are easier to use or more advanced than our current suite of services; • our failure to adapt to new forms of payment that become widely accepted; • the adoption or retention of more entrenched or rival services in the international markets where we compete; • our ability to control costs, including our operating expenses; • the amount and timing of payment for operating expenses, particularly research and development and sales and marketing expenses, including commissions; • the amount and timing of non-cash expenses, including stock-based compensation, goodwill impairments, and other non-cash charges; • the amount and timing of costs associated with recruiting, training, and integrating new employees, including employees acquired inorganically, and retaining and motivating existing employees; • fluctuation in market interest rates, which impacts interest earned on funds held for customers; • the effects of acquisitions and the integration of acquired technologies and products, including impairment of goodwill; • the impact of new accounting pronouncements; • security breaches of, technical difficulties with, or interruptions to, the delivery and use of our platform; • the impact of the ongoing geopolitical conflicts, including any related economic sanctions and countermeasures taken by other countries, and market volatility resulting therefrom; and • awareness of our brand and our reputation in our target markets.
We rely on a variety of funding sources to support our BILL Divvy Corporate Card offering.
We rely on a variety of funding sources to support our BILL Divvy Card offering.
Our founder and Chief Executive Officer, René Lacerte, and our President and Chief Financial Officer, John Rettig, are critical to our overall management, as well as the continued development of our products, our partnerships, our culture, our relationships with accounting firms, and our strategy.
Our founder and Chief Executive Officer, René Lacerte, and our President and Chief Operating Officer, John Rettig, are critical to our overall management, as well as the continued development of our products, our partnerships, our culture, our relationships with accounting firms, and our strategy.
In addition, our subsidiary, Bill.com Canada, LLC is a Foreign Money Services Business in Canada and the regulations applicable to our activity in Canada are enforced by FINTRAC and Quebec’s Financial Markets Authority.
In addition, our subsidiary, Bill.com Canada, LLC is a Foreign Money Services Business in Canada and the regulations applicable to our activity in Canada are enforced by FINTRAC, the Bank of Canada, and Quebec’s Financial Markets Authority.
Government agencies may impose new or additional rules on money transmission, including regulations that: • prohibit, restrict, and/or impose taxes or fees on money transmission transactions in, to, or from certain countries or with certain governments, individuals, and entities; • impose additional customer and spending business identification and customer or spending business due diligence requirements; • impose additional reporting or recordkeeping requirements, or require enhanced transaction monitoring; • limit the types of entities capable of providing money transmission services, or impose additional licensing or registration requirements; • impose minimum capital or other financial requirements; • limit or restrict the revenue that may be generated from money transmission, including revenue from interest earned on customer funds, transaction fees, and revenue derived from foreign exchange; 42 • require enhanced disclosures to our money transmission customers; • require the principal amount of money transmission originated in a country to be invested in that country or held in trust until paid; • limit the number or principal amount of money transmission transactions that may be sent to or from a jurisdiction, whether by an individual or in the aggregate; and • restrict or limit our ability to process transactions using centralized databases, for example, by requiring that transactions be processed using a database maintained in a particular country or region.
Government agencies may impose new or additional rules on money transmission, including regulations that: • prohibit, restrict, and/or impose taxes or fees on money transmission transactions in, to, or from certain countries or with certain governments, individuals, and entities; • impose additional customer and spending business identification and customer or spending business due diligence requirements; • impose additional reporting or recordkeeping requirements, or require enhanced transaction monitoring; • limit the types of entities capable of providing money transmission services, or impose additional licensing or registration requirements; • impose minimum capital or other financial requirements; • limit or restrict the revenue that may be generated from money transmission, including revenue from interest earned on customer funds, transaction fees, and revenue derived from foreign exchange; • require enhanced disclosures to our money transmission customers; • require the principal amount of money transmission originated in a country to be invested in that country or held in trust until paid; • limit the number or principal amount of money transmission transactions that may be sent to or from a jurisdiction, whether by an individual or in the aggregate; and • restrict or limit our ability to process transactions using centralized databases, for example, by requiring that transactions be processed using a database maintained in a particular country or region. 41 Our business is subject to extensive government regulation and oversight.
If we fail to maintain our company culture, our business and competitive position may be adversely affected. We are exposed to foreign currency exchange risk relating to our Australian operations. We are exposed to foreign currency exchange risk relating to our Australian operations and Australian subsidiary.
If we fail to maintain our company culture, our business and competitive position may be adversely affected. We are exposed to foreign currency exchange risk relating to our Canadian operations. We are exposed to foreign currency exchange risk relating to our Canadian operations and Canadian subsidiary.
The Capped Call transactions are expected generally to reduce the potential dilution upon conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap.
The Capped Call transactions are designed to reduce the potential dilution upon conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap.
These laws, rules, regulations, licensing schemes, and standards are enforced by multiple authorities and governing bodies in the U.S., including the Department of the Treasury, the Consumer Financial Protection Bureau, the SEC, self-regulatory organizations, and numerous state and local agencies.
These laws, rules, regulations, licensing schemes, and standards are enforced by multiple authorities and governing bodies in the U.S., including the Department of the Treasury, the Federal Trade Commission, the Consumer Financial Protection Bureau, the SEC, self-regulatory organizations, and numerous state and local agencies.
A range of high-quality support options is critical for the renewal and expansion of our subscriptions with existing customers: we provide customer support via chat, email, and phone through a combination of AI-assisted interactions with the BILL Virtual Assistant as well as robust support from a highly trained staff of customer success personnel.
A range of high-quality support options is critical for the renewal and expansion of our subscriptions and driving additional transaction volume with existing customers: we provide customer support via chat, email, and phone through a combination of AI-assisted interactions with the BILL Virtual Assistant as well as robust support from a highly trained staff of customer success personnel.
The Issuing Banks are subject to oversight by the FDIC and state banking regulators and must comply with applicable federal and state banking rules, regulations, and examination requirements.
The Issuing Banks are subject to oversight by the FDIC and state banking regulators and must comply with applicable federal and state banking laws, regulations, and examination requirements.
Our relationships with our more than 8,000 accounting firm partners contribute a significant portion of our consolidated revenue. We market and sell our products and services through accounting firms, including via "client advisory services" through which the firms manage finances and make payments on behalf of their clients, in each case through our platform.
Our relationships with our more than 9,000 accounting firm partners contribute a significant portion of our total revenue. We market and sell our products and services through accounting firms, including via "client advisory services" through which the firms manage finances and make payments on behalf of their clients, in each case through our platform.
Certain of our other current and future product offerings may also subject us to credit risk. We offer our BILL Divvy Corporate Card as a credit product to a wide range of businesses in the U.S., and the success of this product depends on our ability to effectively manage related risks.
Certain of our other current and future product offerings, such as invoice financing, may also subject us to credit risk. We offer our BILL Divvy Card as a credit product to a wide range of businesses in the U.S., and the success of this product depends on our ability to effectively manage related risks.
Holders of the Notes have the right to require us to repurchase their notes upon the occurrence of a fundamental change (as defined in the indentures governing the 2025 Notes and 2027 Notes, respectively) at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid special interest, if any.
Holders of the Notes have the right to require us to repurchase their notes upon the occurrence of a fundamental change (as defined in each of the indentures governing the Notes) at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid special interest, if any.
As our market matures, product and service offerings evolve, and competitors introduce lower cost or differentiated products or services that compete or are perceived to compete with our platform, our ability to sell subscriptions or successfully increase customer adoption of new payment products could be impaired.
As our market matures, product and service offerings evolve, and competitors introduce lower cost or differentiated products or services that compete or are perceived to compete with our platform, our ability to sell subscriptions, drive transaction volume, or successfully increase customer adoption of new products could be impaired.
We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all. We have funded our operations since inception primarily through equity and debt financings, sales of subscriptions to our products, usage-based transaction fees and interest earned on customer funds.
We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all. We have funded our operations since inception primarily through equity and equity-linked securities offerings, sales of subscriptions to our products, transaction fees, interest earned on customer funds, and debt financings.
Adverse orders or regulatory enforcement actions against the Issuing Banks, even if unrelated to our business, could impose restrictions on the Issuing Banks’ ability to continue to extend credit through our platform or on current terms, or could result in the Issuing Banks increasing their oversight or imposing tighter controls over our underwriting practices or compliance procedures or subjecting any new products to be offered through the Issuing Banks to more rigorous reviews.
Adverse orders or regulatory enforcement actions against one or more of the Issuing Banks, even if unrelated to our business, could impose restrictions on such Issuing Banks’ ability to continue to extend credit through our platform or on current terms, or could result in the Issuing Banks increasing their oversight or imposing tighter controls over our underwriting practices or compliance procedures or subjecting any new products to be offered by an Issuing Bank to more rigorous reviews.
Our business is subject to extensive government regulation and oversight. Our failure to comply with extensive, complex, overlapping, and frequently changing rules, regulations, and legal interpretations could materially harm our business. Our success and increased visibility may result in increased regulatory oversight and enforcement and more restrictive rules and regulations that apply to our business.
Our failure to comply with extensive, complex, overlapping, and frequently changing rules, regulations, and legal interpretations could materially harm our business. Our success and increased visibility may result in increased regulatory oversight and enforcement and more restrictive rules and regulations that apply to our business.
Summary of Risk Factors Consistent with the foregoing, we are exposed to a variety of risks, including the following: • We have a history of operating losses and may not achieve or sustain profitability in the future; • Our recent rapid growth, including growth in our volume of payments, may not be indicative of our future growth, and if we continue to grow rapidly, we may not be able to manage our growth effectively; • A significant portion of our revenue comes from small and medium-sized businesses, which may have fewer financial resources to weather an economic downturn, and volatile or weakened economic conditions in the U.S. and globally may adversely affect our business and operating results; • If we are unable to attract new customers or convert trial customers into paying customers or if our efforts to promote our charge card usage through marketing, promotion, and spending business rewards are unsuccessful, our revenue growth and operating results will be adversely affected; • If we are unable to retain our current customers, increase customer adoption of our products, sell additional services to our customers, or develop and launch new payment products, our business and growth will be adversely affected; • Our BILL Divvy Corporate Card offering exposes us to credit risk and other risks related to spending businesses' ability to pay the balances incurred on their BILL Divvy Corporate Cards.
Summary of Risk Factors Consistent with the foregoing, we are exposed to a variety of risks, including the following: • We have a history of operating losses and may not sustain or expand our profitability in the future; • A significant portion of our revenue comes from small and medium-sized businesses, which may have fewer financial resources to weather an economic downturn, and volatile or weakened economic conditions in the U.S. and globally may adversely affect our business and operating results; • If we are unable to attract new customers or convert trial customers into paying customers or if our efforts to promote our charge card usage through marketing, promotion, and spending business rewards are unsuccessful, our revenue growth and operating results will be adversely affected; • If we are unable to retain our current customers, increase customer adoption of our products, sell additional services to our customers, or develop and launch new payment products, our business and growth will be adversely affected; • Our BILL Divvy Card offering exposes us to credit risk and other risks related to spending businesses' ability to pay the balances incurred on their BILL Divvy Cards.
In addition to the factors discussed in this report, the market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • overall performance of the equity markets; • actual or anticipated fluctuations in our revenue and other operating results; • changes in the financial projections we may provide to the public or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • recruitment or departure of key personnel; • the economy as a whole and market conditions in our industry, such as high inflation and high interest rate and recessionary environments; • negative publicity related to the real or perceived quality of our platform, as well as the failure to timely launch new products and services that gain market acceptance; • rumors and market speculation involving us or other companies in our industry; • announcements by us or our competitors of new products or services, commercial relationships, or significant technical innovations; • acquisitions, partnerships, joint ventures, or capital commitments; 52 • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • lawsuits threatened or filed against us, litigation involving our industry, or both; • developments or disputes concerning our or other parties’ products, services, or intellectual property rights; • changes in accounting standards, policies, guidelines, interpretations, or principles; • interpretations of any of the above or other factors by trading algorithms, including those that employ natural language processing and related methods to evaluate our public disclosures; • other events or factors, including those resulting from local or federal elections, war or other geopolitical conflicts, incidents of terrorism, or responses to these events; • actual or perceived instability in the U.S. and global banking systems; • the expiration of contractual lock-up agreements; and • sales of shares of our common stock by us or our stockholders.
In addition to the factors discussed in this report, the market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • overall performance of the equity markets; • actual or anticipated fluctuations in our revenue and other operating results; • changes in the financial projections we may provide to the public or our failure to meet these projections; • changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • recruitment or departure of key personnel; • the economy as a whole and market conditions in our industry, such as inflation and high interest rate and recessionary environments; • negative publicity related to the real or perceived quality of our platform, as well as the failure to timely launch new products and services that gain market acceptance; • rumors and market speculation involving us or other companies in our industry; • announcements by us or our competitors of new products or services, commercial relationships, or significant technical innovations, including with respect to our and our competitors' agentic and other AI offerings; • acquisitions, partnerships, joint ventures, capital commitments, or other strategic transactions; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • lawsuits threatened or filed against us, litigation involving our industry, or both; • developments or disputes concerning our or other parties’ products, services, or intellectual property rights; • changes in accounting standards, policies, guidelines, interpretations, or principles; • interpretations of any of the above or other factors by trading algorithms, including those that employ natural language processing and related methods to evaluate our public disclosures; • other events or factors, including those resulting from war or other geopolitical conflicts, incidents of terrorism, or responses to these events; 51 • actual or perceived instability in the U.S. and global banking systems; and • sales of shares of our common stock by us or our stockholders.
For fiscal 2024, 2023, and 2022, we generated $167.4 million, $113.8 million, and $8.6 million, respectively, in revenue from interest earned on funds held in trust on behalf of customers while payment transactions were clearing, or approximately 13%, 11%, and 1% of our total revenue for such periods, respectively.
For fiscal 2025, 2024, and 2023, we generated $161.8 million, $167.4 million, and $113.8 million, respectively, in revenue from interest earned on funds held in trust on behalf of customers while payment transactions were clearing, or approximately 11%, 13%, and 11% of our total revenue for such periods, respectively.
More broadly, the U.S. and other key international economies have experienced and may in the future experience significant economic and market downturns in which economic activity is impacted by falling demand for a variety of goods and services, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity, and foreign exchange markets, inflation, bankruptcies, and overall uncertainty with 19 respect to the economy.
More broadly, the U.S. and other key international economies have experienced and may in the future experience significant economic and market changes and downturns in which economic activity is impacted by falling demand for a variety of goods and services, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity, and foreign exchange markets, inflation, bankruptcies, new or increased trade barriers, and overall uncertainty with respect to the economy.
The imposition by state governments or local governments of sales tax collection obligations on out-of-state sellers could also create additional administrative burdens for us, put us at a perceived competitive disadvantage if they do not impose similar obligations on our competitors, and decrease our future sales, which could adversely affect our business and operating results. 37 Changes in our effective tax rate or tax liability may adversely affect our operating results.
The imposition by state governments or local governments of sales tax collection obligations on out-of-state sellers could also create additional administrative burdens for us, put us at a perceived competitive disadvantage if they do not impose similar obligations on our competitors, and decrease our future sales, which could adversely affect our business and operating results.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur foundational security engineering, governance risk and compliance, product security and security operations teams report into our CISO and provide regular updates on significant or potentially significant threats and incidents. Our CISO has over 20 years of experience in information security, serving in roles of increasing responsibility within several public companies including companies in the cybersecurity and software fields.
Biggest changeOur foundational security engineering, governance risk and compliance, product security and security operations teams report into our interim CISO 54 and provide regular updates on significant or potentially significant threats and incidents. Our interim CISO has nearly 20 years of experience serving in information security roles in healthcare and technology companies.
Although we are subject to ongoing and evolving cybersecurity threats, we are not aware of any risks from cybersecurity threats that have materially affected or are reasonably likely to affect us, including our 56 business strategy, result of operations or financial condition.
Although we are subject to ongoing and evolving cybersecurity threats, we are not aware of any risks from cybersecurity threats that have materially affected or are reasonably likely to affect us, including our business strategy, result of operations or financial condition.
The CISO provides reports at least quarterly to the cybersecurity committee as well as to our Chief Executive Officer, Chief Technology Officer, and other members of our senior management, as appropriate. The cybersecurity committee also receives quarterly updates from our legal department and third-party experts.
The interim CISO provides reports at least quarterly to the cybersecurity committee as well as to our Chief Executive Officer, Chief Technology Officer, and other members of our senior management, as appropriate. The cybersecurity committee also receives quarterly updates from our legal department and third-party experts.
Our cybersecurity committee will also receive prompt and timely information regarding any material cybersecurity threats or incidents, as well as ongoing updates regarding any such threat or incident until it has been mitigated, resolved, or otherwise addressed.
Our cybersecurity committee will also receive prompt and timely information regarding any material cybersecurity threats or incidents, as well as ongoing 55 updates regarding any such threat or incident until it has been mitigated, resolved, or otherwise addressed.
Our information security program is managed by a dedicated Chief Information Security Officer (CISO), who reports to our Chief Technology Officer and oversees a team responsible for leading enterprise-wide cybersecurity strategy, policy, standards, architecture, and processes.
Our information security program is managed by our interim Chief Information Security Officer (CISO), who reports to our Chief Technology Officer and oversees a team responsible for leading enterprise-wide cybersecurity strategy, policy, standards, architecture, and processes.
In addition, our Deputy CISO has nearly 20 years of experience serving in information security roles in healthcare and technology companies. Our information security program includes an incident response program that coordinates activities across multiple teams in responding to cybersecurity incidents in accordance with a defined Incident Management Policy.
Our information security program includes an incident response program that coordinates activities across multiple teams in responding to cybersecurity incidents in accordance with a defined Incident Management Policy.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur leased facilities in Draper, Utah consist of 155,000 square feet of office space for our employees located in Draper, Utah, approximately 26,000 square feet of which is being subleased for a period of 5 years expiring in December 2025. The lease for our Draper, Utah property expires in March 2030.
Biggest changeOur leased facilities in Draper, Utah consist of 155,000 square feet of office space for our employees, approximately 26,000 square feet of which is being subleased expiring in December 2030. The lease for our Draper, Utah property expires in May 2031. We believe that our office facilities are adequate to meet our needs for the immediate future.
Item 2. PROPERTIES We lease our office facilities, including approximately 138,000 square feet in San Jose, California for our corporate headquarters. This lease agreement expires in June 2031. We also maintain offices in Draper, Utah, and Houston, Texas.
Item 2. PROPERTIES We lease our office facilities, including approximately 138,000 square feet in San Jose, California for our corporate headquarters. This lease agreement expires in June 2031. We also maintain an office in Draper, Utah.
We believe that our office facilities are adequate to meet our needs for the immediate future. We continue to evaluate our real estate strategy to accommodate expansion of our operations.
We continue to evaluate our real estate strategy to accommodate expansion of our operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe results of any future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. 57 Item 4. MINE SAFETY DISCLOSURES Not applicable. 58 PART II
Biggest changeThe results of any future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Item 4. MINE SAFETY DISCLOSURES Not applicable. 56 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe Warrants, which were issued as a result of the achievement of certain performance milestones under the commercial relationship, were subsequently net exercised in full for 150,662 shares of our common stock. The issuance of the Warrants and Warrant Shares has not been, and will not be, registered under the Securities Act of 1933, as amended (the Securities Act).
Biggest changeThe Warrants, which were issued as a result of the achievement of certain performance milestones under the commercial relationship, were net exercised on April 13, 2025 in full for 312,607 shares of our common stock.
The performance shown in the graph below is not intended to forecast or be indicative of future stock price performance. 59 Recent Sales of Unregistered Equity Securities In connection with our commercial relationship with CPA.com, Inc.
The performance shown in the graph below is not intended to forecast or be indicative of future stock price performance. 57 Recent Sales of Unregistered Equity Securities In connection with our commercial relationship with CPA.com, Inc.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on The New York Stock Exchange under the symbol “BILL”. Holders of Record As of June 30, 2024, there were 162 holders of record of our common stock.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on The New York Stock Exchange under the symbol “BILL”. Holders of Record As of June 30, 2025, there were 151 holders of record of our common stock.
The graph assumes an initial investment of $100.00 at the close of trading on December 12, 2019 and that all dividends paid by companies included in these indices have been reinvested.
The graph assumes an initial investment of $100.00 at the close of trading on June 30, 2020, and that all dividends paid by companies included in these indices have been reinvested.
(CPA.com), on April 2, 2024, we issued to CPA.com warrants (the Warrants) to purchase up to an aggregate of 150,686 shares (the Warrant Shares) of our common stock at an exercise price $0.01 per Warrant Share.
(CPA.com), on April 7, 2025, we issued to CPA.com warrants (the Warrants) to purchase up to an aggregate of 312,682 shares (the Warrant Shares) of our common stock at an exercise price $0.01 per Warrant Share.
The Warrants and the Warrant Shares were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act. The Warrants and the Warrant Shares may not be offered or sold in the United States absent registration under or exemption from the Securities Act and any applicable state securities laws.
The Warrants and the Warrant Shares may not be offered or sold in the United States absent registration under or exemption from the Securities Act and any applicable state securities laws.
The following graph depicts the total cumulative stockholder return on our common stock from December 12, 2019, the first day of trading of our common stock on the NYSE, through June 30, 2024, relative to the performance of the S&P 500 Index and S&P 500 IT Index.
The following graph depicts the total cumulative stockholder return on our common stock from June 30, 2020, through June 30, 2025, relative to the performance of the S&P 500 Index and S&P 500 IT Index.
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Purchase of Equity Securities by the Issuer None. Item 6. RESERVED Not applicable. 60
Added
The issuance of the Warrants and Warrant Shares has not been, and will not be, registered under the Securities Act of 1933, as amended (the Securities Act). The Warrants and the Warrant Shares were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act.
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Purchase of Equity Securities by the Issuer In August 2025, our board of directors approved a new share repurchase program, pursuant to which we announced our intention to purchase up to $300.0 million of our outstanding shares of common stock (the 58 2025 Share Repurchase Program).
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Under the 2025 Share Repurchase Program, we may repurchase shares from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans. The timing and total amount of stock repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations.
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The 2025 Share Repurchase Program has no mandated end date, may be suspended, discontinued or modified at any time, and does not obligate us to acquire any amount of common stock.
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Previously, in August 2024, our board of directors approved a share repurchase program, pursuant to which we announced our intention to purchase up to $300.0 million of our outstanding shares of common stock (the August 2024 Share Repurchase Program).
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As shown below, as of June 30, 2025, approximately $65.0 million remained available for future share repurchases under the August 2024 Share Repurchase Program; however, in July 2025, we repurchased $65.0 million of our common stock under this program and completed the repurchase of shares under the August 2024 Share Repurchase Program.
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The following table provides shares repurchase activity during the three months ended June 30, 2025: Period Total number of shares purchased (in thousands) (1) (2) Average price paid per share (2) Total number of shares purchased as part of publicly announced plans or programs (in thousands) (1) (2) Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) (1) (2) April 1, 2025 - April 30, 2025 — — — $ 99,985 May 1, 2025 - May 31, 2025 — — — $ 99,985 June 1, 2025 - June 30, 2025 776 $ 45.09 776 $ 64,988 Total 776 776 $ 64,988 (1) See Note 10, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K for additional information.
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(2) Represents repurchases and then-remaining amounts under our August 2024 Share Repurchase Program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe maintain a full valuation allowance against our U.S. federal, state and Australian net deferred tax assets as we have concluded that it is more likely than not that we will not realize our net deferred tax assets. 67 Results of Operations The following table sets forth our results of operations together with the dollar and percentage change for the periods presented (amounts in thousands): Year ended June 30, Change (2024 compared to 2023) Change (2023 compared to 2022) 2024 2023 2022 (1) Amount % Amount % Revenue Subscription and transaction fees (2) $ 1,122,733 $ 944,710 $ 633,365 $ 178,023 19 % $ 311,345 49 % Interest on funds held for customers 167,439 113,758 8,594 53,681 47 % 105,164 1224 % Total revenue 1,290,172 1,058,468 641,959 231,704 22 % 416,509 65 % Cost of revenue Service costs (2) 189,894 151,010 105,496 38,884 26 % 45,514 43 % Depreciation and amortization (3) 44,722 42,967 39,508 1,755 4 % 3,459 9 % Total cost of revenue 234,616 193,977 145,004 40,639 21 % 48,973 34 % Gross profit 1,055,556 864,491 496,955 191,065 22 % 367,536 74 % Operating expenses Research and development (2) 336,754 314,632 219,818 22,122 7 % 94,814 43 % Sales and marketing (2) 478,540 515,858 307,151 (37,318) (7) % 208,707 68 % General and administrative (2) (4) 277,662 249,054 221,030 28,608 11 % 28,024 13 % Provision for expected credit losses (4) 60,105 32,224 20,144 27,881 87 % 12,080 60 % Depreciation and amortization (3) 49,072 48,496 45,630 576 1 % 2,866 6 % Restructuring 27,587 — — 27,587 100 % — — % Total operating expenses 1,229,720 1,160,264 813,773 69,456 6 % 346,491 43 % Operating loss (174,164) (295,773) (316,818) 121,609 (41) % 21,045 (7) % Other income (expense), net 147,845 72,856 (13,861) 74,989 103 % 86,717 (626) % Loss before provision for (benefit from) income taxes (26,319) (222,917) (330,679) 196,598 (88) % 107,762 (33) % Provision for (benefit from) income taxes 2,559 808 (4,318) 1,751 217 % 5,126 (119) % Net loss $ (28,878) $ (223,725) $ (326,361) $ 194,847 (87) % $ 102,636 (31) % (1) Includes the results of Invoice2go from the acquisition date on September 1, 2021.
Biggest changeWe maintain a full valuation allowance against our U.S. federal, state and Australian net deferred tax assets as we have concluded that it is more likely than not that we will not realize our net deferred tax assets. 66 Results of Operations The following table sets forth our results of operations together with the dollar and percentage change for the periods presented (amounts in thousands): Year ended June 30, Change (2025 compared to 2024) Change (2024 compared to 2023) 2025 2024 2023 Amount % Amount % Revenue Subscription and transaction fees (1) $ 1,300,804 $ 1,122,733 $ 944,710 $ 178,071 16 % $ 178,023 19 % Interest on funds held for customers 161,766 167,439 113,758 (5,673) (3) % 53,681 47 % Total revenue 1,462,570 1,290,172 1,058,468 172,398 13 % 231,704 22 % Cost of revenue Service costs (1) 229,805 189,894 151,010 39,911 21 % 38,884 26 % Depreciation and amortization 42,298 44,722 42,967 (2,424) (5) % 1,755 4 % Total cost of revenue 272,103 234,616 193,977 37,487 16 % 40,639 21 % Gross profit 1,190,467 1,055,556 864,491 134,911 13 % 191,065 22 % Operating expenses Research and development (1) 340,059 336,754 314,632 3,305 1 % 22,122 7 % Sales and marketing (1) 543,711 478,540 515,858 65,171 14 % (37,318) (7) % General and administrative (1) (3) 281,913 277,662 249,054 4,251 2 % 28,608 11 % Provision for expected credit losses 72,749 60,105 32,224 12,644 21 % 27,881 87 % Depreciation and amortization (2) 32,637 49,072 48,496 (16,435) (33) % 576 1 % Restructuring — 27,587 — (27,587) (100) % 27,587 100 % Total operating expenses 1,271,069 1,229,720 1,160,264 41,349 3 % 69,456 6 % Operating loss (80,602) (174,164) (295,773) 93,562 (54) % 121,609 (41) % Other income, net 111,012 147,845 72,856 (36,833) (25) % 74,989 103 % Income (loss) before provision for income taxes 30,410 (26,319) (222,917) 56,729 (216) % 196,598 (88) % Provision for income taxes 6,611 2,559 808 4,052 158 % 1,751 217 % Net income (loss) $ 23,799 $ (28,878) $ (223,725) $ 52,677 (182) % $ 194,847 (87) % (1) Includes stock-based compensation charged to revenue and expenses as follows (amounts in thousands): Year ended June 30, Change (2025 compared to 2024) Change (2024 compared to 2023) 2025 2024 2023 Amount % Amount % Revenue - subscription and transaction fees $ 2,329 $ 1,831 $ 188 $ 498 27 % $ 1,643 874 % Cost of revenue - service costs 9,627 9,309 9,111 318 3 % 198 2 % Research and development 107,603 103,382 93,364 4,221 4 % 10,018 11 % Sales and marketing * 39,992 49,070 130,421 (9,078) (19) % (81,351) (62) % General and administrative 82,981 81,209 80,619 1,772 2 % 590 1 % Restructuring — 3,574 — (3,574) (100) % 3,574 100 % Total stock-based compensation $ 242,532 $ 248,375 $ 313,703 $ (5,843) (2) % $ (65,328) (21) % * Fiscal 2023 includes $52.2 million of stock-based compensation expense related to separation and advisory agreements with our former Chief Revenue Officer.
Sales and marketing – Sales and marketing expenses consist primarily of personnel-related expenses, including stock-based compensation expenses, for our sales and marketing teams, rewards expense in connection with our card rewards programs, sales commissions, marketing program expenses, travel-related expenses, and costs to market and promote our platform through advertisements, marketing events, partnership arrangements, direct customer acquisition, and allocated overhead costs.
Sales and marketing – Sales and marketing expenses consist primarily of rewards expense in connection with our card rewards programs, personnel-related expenses, including stock-based compensation expenses, for our sales and marketing teams, sales commissions, marketing program expenses, travel-related expenses, and costs to market and promote our platform through advertisements, marketing events, partnership arrangements, direct customer acquisition, and allocated overhead costs.
If the note holders exercise their right to convert, our current intent is to settle such conversion through a combination settlement involving a repayment of the principal portion in cash and the balance in shares of common stock.
If the note holders exercise their right to convert, our current intent is to settle such conversion through a combination settlement involving a repayment of the principal portion in cash and the balance in shares of common stock.
The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported revenue generated, and reported expenses incurred during the reporting periods.
The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported revenue generated, and reported expenses incurred during the reporting periods.
Our short-term investments are comprised primarily of available-for-sale investments in corporate bonds, certificates of deposit, asset-backed securities, municipal bonds, U.S. agency securities, and U.S. treasury securities with original maturities of more than three months. Our corporate deposits held at large multinational financial institutions and U.S. national or regional banks, may at times exceed federally insured limits.
Our short-term investments are comprised primarily of available-for-sale investments in corporate bonds, certificates of deposit, asset-backed securities, municipal bonds, and U.S. treasury securities with original maturities of more than three months. Our corporate deposits held at large multinational financial institutions and U.S. national or regional banks, may at times exceed federally insured limits.
Businesses on our platform generate and process invoices, streamline approvals, make and receive payments, manage employee expenses, sync with their accounting system, foster collaboration, and manage their cash. We have built sophisticated integrations with popular accounting software solutions, banks, card issuers, and payment processors, enabling our customers to access these mission-critical services quickly and easily.
Businesses on our platform generate and process invoices, streamline approvals, make and receive payments, manage employee expenses, sync with their accounting system, foster collaboration, and manage their cash flow. We have built sophisticated integrations with popular software solutions, banks, card issuers, and payment processors, enabling our customers to access these mission-critical services quickly and easily.
For additional discussion about our 2027 Notes and the capped call transactions, refer to Note 10 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. 2025 Notes On November 30, 2020, we issued $1.15 billion in aggregate principal amount of our 0% convertible senior notes due on December 1, 2025 (the 2025 Notes).
For additional discussion about our 2027 Notes and the capped call transactions, refer to Note 9 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. 2025 Notes On November 30, 2020, we issued $1.15 billion in aggregate principal amount of our 0% convertible senior notes due on December 1, 2025 (the 2025 Notes).
Revolving loans under the Revolving Credit Facility bear interest at a rate per annum determined by reference to either the SOFR Rate or an adjusted benchmark rate plus an applicable margin ranging from 2.65% to 2.75%, based on the outstanding principal amount and the date that principal amounts are outstanding.
Revolving loans under the 2021 Credit Facility bear interest at a rate per annum determined by reference to either the SOFR Rate or an adjusted benchmark rate plus an applicable margin ranging from 2.65% to 2.75%, based on the outstanding principal amount and the date that principal amounts are outstanding.
We acquire them directly through digital marketing and inside sales and indirectly by partnering with leading companies that are trusted by SMBs, including accounting firms, financial institutions, and software companies. Our revenue from existing businesses using our solutions is visible and predicta ble.
We acquire them directly through digital marketing and inside sales and indirectly by partnering with leading companies that are trusted by SMBs, including accounting firms, financial institutions, and software providers. Our revenue from existing businesses using our solutions is visible and predicta ble.
The 2027 Notes are senior, unsecured obligations, will not 75 accrue interest unless we determine to pay special interest, and are convertible on or after January 1, 2027 until the close of business on the second scheduled trading day immediately preceding the maturity date on April 1, 2027.
The 2027 Notes are senior, unsecured obligations, will not accrue interest unless we determine to pay special interest, and are convertible on or after January 1, 2027 until the close of business on the second scheduled trading day immediately preceding the maturity date on April 1, 2027.
When a business applies for a BILL Divvy Corporate Card, we utilize, on behalf of the Issuing Bank, proprietary risk management capabilities to confirm the identity of the business, and perform a credit underwriting process to determine if the business is eligible for a BILL Divvy Corporate Card pursuant to our credit policies.
When a business applies for a BILL Divvy Card, we utilize, on behalf of the Issuing Bank, proprietary risk management capabilities to confirm the identity of the business, and perform a credit underwriting process to determine if the business is eligible for a BILL Divvy Card pursuant to our credit policies.
The Issuing Bank then sells a 100% participation interest in the receivable to us. Pursuant to our agreements with the Issuing Banks, we are obligated to purchase the participation interests in all of the receivables originated through our platform, and our obligations are secured 62 by cash deposits.
The Issuing Bank then sells a 100% participation interest in the receivable to us. Pursuant to our agreements with the Issuing Banks, we are obligated to purchase the participation interests in all of the receivables originated through our platform, and our obligations are secured by cash deposits.
Interest is earned from interest-bearing deposit accounts, certificates of deposit, money market funds, corporate bonds, asset-backed securities, municipal bonds, commercial paper, U.S. treasury securities, and U.S. agency securities, until those payments are cleared and credited to the intended recipient.
Interest is earned from interest-bearing deposit accounts, certificates of deposit, money market funds, corporate 64 bonds, asset-backed securities, municipal bonds, commercial paper, U.S. treasury securities, and U.S. agency securities, until those payments are cleared and credited to the intended recipient.
These contracts typically include fees for initial implementation services that are paid during the period the implementation services are provided as well as fees for subscription and transaction processing services, which are subject to guaranteed monthly minimum fees that are paid monthly over the contract term.
These contracts typically include fees for initial implementation services that are paid during the period the implementation services are provided as well as fees for subscription and transaction processing services, which are subject to guaranteed minimum fees that are paid over the contract term.
Once approved for a BILL Divvy Corporate Card the spending business is provided a credit limit and can use the BILL Spend and Expense software to request virtual cards or physical cards, establish budgets, and manage spend.
Once approved for a BILL Divvy Card the spending business is provided a credit limit and can use the BILL Spend and Expense software to request virtual cards or physical cards, establish budgets, and manage spend.
Additionally, management evaluates whether to include qualitative reserves to cover credit losses that are expected but may not be adequately represented in the quantitative methodology or the economic assumptions.
Additionally, management evaluates whether to include qualitative reserves to cover credit losses that are 76 expected but may not be adequately represented in the quantitative methodology or the economic assumptions.
Hundreds of thousands of businesses rely on BILL’s proprietary network of millions of members to pay or get paid faster. Headquartered in San Jose, California, we are a trusted partner of leading U.S. financial institutions, accounting firms, and accounting software providers. Our purpose-built, AI-enabled financial software platform creates seamless connections between our customers, their suppliers, and their clients.
Hundreds of thousands of businesses rely on BILL’s proprietary network of millions of members to pay or get paid faster. Headquartered in San Jose, California, we are a trusted partner of leading U.S. financial institutions, accounting firms, and software providers. Our purpose-built, artificial intelligence (AI)-enabled financial software platform creates seamless connections between our customers, their suppliers, and their clients.
Service Costs and Expenses Service costs – Service costs consist primarily of personnel-related costs, including stock-based compensation, for our customer success and payment operations teams, costs that are directly attributed to processing customers’ and spending businesses' transactions (such as the cost of printing checks, postage for mailing checks, fees associated with the issuance and processing of card transactions, fees for processing payments), outsourced support services for our customer success team, direct and amortized costs for implementing and integrating our cloud-based platform into our customers’ systems, and cloud payments infrastructure costs.
Service Costs and Expenses Service costs – Service costs consist primarily of costs that are directly attributed to processing customers’ and spending businesses' transactions (such as the cost of printing checks, postage for mailing checks, fees associated with the issuance and processing of card transactions, net of card network incentives, fees for processing payments), personnel-related costs, including stock-based compensation, for our customer success and payment operations teams, outsourced support services for our customer success team, direct and amortized costs for implementing and integrating our cloud-based platform into our customers’ systems, and cloud payments infrastructure costs.
Provision for Income Taxes Provision for income taxes during fiscal year ended June 30, 2024, consists of a current federal and state tax liability as a result of the mandatory R&D capitalization by the Tax Cuts and Jobs Act of 2017, which became effective for us beginning fiscal 2023.
Provision for Income Taxes Provision for income taxes during fiscal year ended June 30, 2025, consists of a current federal and state tax liability as a result of the mandatory R&D capitalization by the Tax Cuts and Jobs Act of 2017, which became effective for us beginning fiscal 2023.
Recent Accounting Pronouncements See “The Company and its Significant Accounting Policies” Note 1 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of June 30, 2024.
Recent Accounting Pronouncements See “The Company and its Significant Accounting Policies” Note 1 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of June 30, 2025.
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.
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 strong balance sheets and invest in future growth.
We believe free cash flow is an important liquidity measure of the cash (if any) that is generated, after incurring operating expenses, purchases of property and equipment and capitalization of internal-use software costs, for future operational expenses and investment in our business.
We believe free cash flow is an important liquidity measure of the cash that is generated, after incurring operating expenses, purchases of property and equipment and capitalization of internal-use software costs, for future operational expenses and investment in our business.
For additional discussion about our Revolving Credit Facility, refer to Note 10 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Off-Balance Sheet Arrangements We are contractually obligated to purchase all card receivables from U.S.-based Issuing Banks including authorized transactions that have not cleared.
For additional discussion about our 2025 Credit Facility, refer to Note 9 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Off-Balance Sheet Arrangements We are contractually obligated to purchase all card receivables from U.S.-based Issuing Banks including authorized transactions that have not cleared.
Such payments comprised less than 2% of TPV during each of fiscal 2024, 2023, and 2022. Transactions Processed We define transactions processed as the total number of payments initiated and processed through our platform during a particular period. Payment transactions include checks, ACH payments, card payments, Invoice2go subscriber transactions, real-time payments, pay by card, invoice financing, and cross-border payments .
Such reversals comprised less than 2% of TPV during each of fiscal 2025, 2024, and 2023. Transactions Processed We define transactions processed as the total number of payments initiated and processed through our platform during a particular period. Payment transactions include checks, ACH payments, card payments, Invoice2go subscriber transactions, real-time payments, pay by card, invoice financing, and cross-border payments .
Our fiscal year end is June 30, and our fiscal quarters end on September 30, December 31, and March 31. This Management’s Discussion and Analysis of Financial Condition and Results of Operations focuses on a discussion of fiscal 2024 compared to fiscal 2023.
Our fiscal year end is June 30, and our fiscal quarters end on September 30, December 31, and March 31. This Management’s Discussion and Analysis of Financial Condition and Results of Operations focuses on a discussion of fiscal 2025 compared to fiscal 2024.
We are unable to predict the full impact that macroeconomic factors, banking sector dynamics, or ongoing global geopolitical conflicts will have on our future results of operations, liquidity, and financial condition due to numerous uncertainties, including changes in central bank policies and interest rates, rates of inflation, the impact to our customers, spending businesses, subscribers, partners, and suppliers, and other factors described in the section titled “ Risk Factors ” in Part I, Item 1A of this Annual Report on Form 10-K.
We are unable to predict the full impact that macroeconomic factors, banking sector dynamics, or ongoing global geopolitical conflicts will have on our future results of operations, liquidity, and financial condition due to numerous uncertainties, including changes in central bank policies and interest rates, rates of inflation, the strength of the U.S. dollar, the related impact to our customers, spending businesses, subscribers, partners, and suppliers, and other factors described in the section titled “ Risk Factors ” in Part I, Item 1A of this Annual Report on Form 10-K.
Our cash equivalents are comprised primarily of money market funds and investments in debt securities with original maturities of three months or less at the time of purchase.
Our cash equivalents are comprised primarily of money market funds, certificates of deposit, and investments in debt securities with original maturities of three months or less at the time of purchase.
A discussion of fiscal 2023 compared to fiscal 2022 can be found under Item 7 of Part II in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, filed with the SEC on August 29, 2023, which is available free of charge on the SEC’s website at www.sec.gov and on the Investor Relations section of our corporate website at investor.bill.com.
A discussion of fiscal 2024 compared to fiscal 2023 can be found under Item 7 of Part II in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, filed with the SEC on August 23, 2024, which is available free of charge on the SEC’s website at www.sec.gov and on the Investor Relations section of our corporate website at investor.bill.com.
We also periodically review our non-GAAP financial measures and may revise these measures to reflect changes in our business or otherwise. 72 Non-GAAP Gross Profit and Non-GAAP Gross Margin We define non-GAAP gross profit as gross profit minus depreciation and amortization, and stock-based compensation and related payroll taxes recognized in cost of revenue.
We also periodically review our non-GAAP financial measures and may revise these measures to reflect changes in our business or otherwise. Non-GAAP Gross Profit and Non-GAAP Gross Margin We define non-GAAP gross profit as gross profit minus depreciation and amortization, and stock-based compensation and related payroll taxes charged to cost of revenue.
When a spending business completes a purchase transaction, the payment to the supplier is made by the cards' Issuing Bank. Obligations incurred by the spending business in connection with their purchase transaction are reflected as receivables on the Issuing Bank's balance sheet from the BILL Divvy Corporate Card account for the spending business.
When a spending business completes a purchase transaction, the payment to the supplier is made by the cards' Issuing Bank. Obligations incurred by the spending business in connection with their purchase transaction are reflected as receivables on the Issuing Bank's balance sheets from the BILL Divvy Card account for the spending business.
Our cash proceeds from our investing activities consist primarily of proceeds from the maturities and sale of corporate and customer fund available-for-sale investments and repayments of loans held for investment. Additionally, the increase or decrease in our net cash from investing activities is impacted by the net change in acquired card receivable balances.
Our cash proceeds from our investing activities consist primarily of proceeds from the maturities and sale of corporate and customer fund available-for-sale investments and repayments of loans held for investment. Additionally, the increase or decrease in our net cash from investing activities is impacted by the net change in acquired card receivables.
Current Period Revenue includes any upsells and is net of contraction or attrition, but excludes revenue from new customers and excludes interest earned on funds held on behalf of customers.
Current Period Revenue includes any upsells and is net of contraction or attrition, but excludes revenue from new customers and excludes interest earned on funds held for customers.
As of June 30, 2024, our partners included some of the most trusted brands in the financial services business, including more than 85 of the top 100 accounting firms and seven of the top ten largest financial institutions for SMBs in the United States (U.S.), including Bank of America, JPMorgan Chase, Wells Fargo Bank, and American Express.
As of June 30, 2025, our partners included some of the most trusted brands in the financial services business, including more than 85 of the top 100 accounting firms and six of the top ten largest financial institutions for SMBs in the United States (U.S.), including JPMorgan Chase, Bank of America, Wells Fargo Bank, and American Express.
Provision for expected credit losses – Provision for expected credit losses represents the amount of expense required to maintain the allowance for expected credit losses on our consolidated balance sheet, which represents management’s estimate of credit losses.
Provision for expected credit losses – Provision for expected credit losses represents the amount of expense required to maintain the allowance for expected credit losses on our consolidated balance sheets, which represents management’s estimate of expected credit losses.
We then calculate the revenue billed to these same customers in the last quarter of the current fiscal year (Current Period Revenue). See "— Key Business Metrics—Businesses Using Our Solutions " below for the definition of BILL standalone customer.
We then calculate the revenue billed to these same customers in the last quarter of the current fiscal year (Current Period Revenue). See "— Key Business Metrics—Businesses Using Our Solutions " below for the definition of BILL AP/AR customer.
Our models use past loss experience to estimate the probability of default and exposure at default by aged balances. We also estimate the likelihood and magnitude of recovery of previously charged-off loans based on historical recovery experience.
Our models use past loss experience to estimate the probability of default and exposure at default by credit limit size and aged balances. We also estimate the likelihood and magnitude of recovery of previously charged-off loans based on historical recovery experience.
We calculate our net dollar-based retention rate at the end of each fiscal year. We calculate our net dollar-based retention rate by starting with the revenue billed to BILL standalone customers in the last quarter of the prior fiscal year (Prior Period Revenue).
We calculate our net dollar-based retention rate at the end of each fiscal year. We calculate our net dollar-based retention rate by starting with the revenue billed to BILL AP/AR customers in the last quarter of the prior fiscal year (Prior Period Revenue).
The provision is determined based on our estimate of expected credit losses on acquired cards receivables, loans held for investment and accounts receivable on our balance sheet, changes in our estimate of expected credit losses on these receivables outstanding as of the end of the period and the net charge-offs incurred in the period.
The provision is determined based on our estimate of expected credit losses on acquired cards receivables, loans held for investment and accounts 65 receivable on our balance sheets, changes in our estimate of expected credit losses on receivables outstanding and loans held for investment as of the end of the period and the net charge-offs incurred in the period.
Following the repurchases, we cancelled the repurchased 2025 Notes and, after such cancellation, $233.2 million aggregate principal amount of 2025 Notes remains outstanding. For additional discussion about our 2025 Notes and the capped call transactions, refer to Note 10 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Following each of the repurchases, we cancelled the repurchased 2025 Notes and, after such cancellation, $33.5 million aggregate principal amount of 2025 Notes remains outstanding. For additional discussion about our 2025 Notes and the capped call transactions, refer to Note 9 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Provision for (benefit from) income taxes – Income tax expense consist of U.S. federal, state and foreign income taxes.
Provision for income taxes – Income tax expense consist of U.S. federal, state and foreign income taxes.
Revolving Credit Facility We have a total borrowing commitment of $300.0 million pursuant to our Revolving Credit and Security Agreement, by and between our subsidiary, Divvy Peach, LLC, Goldman Sachs Bank USA and the lenders party thereto (as amended to date, the Revolving Credit Facility), of which we borrowed $180.0 million as of June 30, 2024.
Revolving Credit Facilities 2021 Credit Facility We have a total borrowing capacity of $300.0 million pursuant to our Revolving Credit and Security Agreement, by and between our subsidiary, Divvy Peach, LLC, Goldman Sachs Bank USA and the lenders party thereto (as amended to date, the 2021 Credit Facility), of which we borrowed $180.0 million as of June 30, 2025.
For fiscal 2024, over 89% of ou r subscription and transaction revenue from BILL standalone customers came from customers who were acquired prior to the start of the fiscal year. See "— Key Business Metrics—Businesses Using Our Solutions " below for the definition of BILL standalone customers .
For fiscal 2025, over 89% of ou r subscription and transaction revenue from BILL AP/AR customers came from customers who were acquired prior to the start of the fiscal year. See "— Key Business Metrics—Businesses Using Our Solutions " below for the definition of BILL AP/AR customers .
Our net dollar-based retention rate equals the Aggregate Current Period Revenue divided by Aggregate Prior Period Revenue. Our net doll ar-based retention rate was 92%, 111%, and 131% during fiscal 2024, 2023, and 2022, respectively.
Our net dollar-based retention rate equals the Aggregate Current Period Revenue divided by Aggregate Prior Period Revenue. Our net doll ar-based retention rate was 94%, 92%, and 111% during fiscal 2025, 2024, and 2023, respectively.
The transactions that have been authorized but not cleared totaled $27.2 million as of June 30, 2024 and have not been recorded on our consolidated balance sheets. We have off-balance sheet credit exposures with these authorized but not cleared transactions; however, our expected credit losses with respect to these transactions were not material as of June 30, 2024.
The transactions that have been authorized but not cleared totaled $76.0 million as of June 30, 2025 and have not been recorded on our consolidated balance sheets. We have off-balance sheet credit exposures with these authorized but not cleared transactions; however, our expected credit losses with respect to these transactions were not material as of June 30, 2025.
Restructuring – Restructuring costs consist primarily of employee severance and other employment termination benefits, including commission, as well as stock-based compensation expense. Additionally, these costs include contract termination expenses and other costs related to the execution of our restructuring plan announced in December 2023, which included the RIF and closure of our office in Sydney, Australia (Restructuring Plan).
Restructuring – Restructuring costs consist primarily of employee severance and other employment termination benefits, including commission, and stock-based compensation expense. Additionally, these costs include contract termination expenses and other costs related to the execution of our restructuring plan announced on December 5, 2023, which included a reduction in force (RIF) and closure of our office in Sydney, Australia (Restructuring Plan).
The current tax liability was offset by the reduction to the net deferred tax liability. Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance.
The current tax liability was offset by the reduction to the net deferred tax liability. 70 Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance.
Our Receivables Purchases and Servicing Model We market our BILL Spend and Expense software and BILL Divvy Corporate Card solutions to potential spending businesses and issue business-purpose charge cards through our card issuing partner banks (Issuing Banks).
Our Receivables Purchases and Servicing Model We market our BILL Spend and Expense software and BILL Divvy Card, a charge card for business expenses, to potential spending businesses and issue business-purpose charge cards through our card issuing partner banks (Issuing Banks).
As we add customers and partners, we expect our network to continue to grow organically. We have grown rapidly and scaled our business operations in recent periods. Our revenue was $1.3 billion and $1.1 billion during fiscal 2024 and 2023, respectively, a year-over-year increase of $231.7 million.
As we add customers and partners, we expect our network to continue to grow organically. We have grown rapidly and scaled our business operations in recent periods. Our revenue was $1.5 billion and $1.3 billion during fiscal 2025 and 2024, respectively, a year-over-year increase of $172.4 million.
Our Revenue Model We generate revenue primarily from subscription and transaction fees. Our subscription revenue is primarily based on a fixed monthly or annual rate per user charged to our customers. Our transaction revenue consists of transaction fees and interchange fees on a fixed or variable rate per transaction.
Our Revenue Model We generate revenue primarily from subscription and transaction fees. Our subscription revenue is primarily based on a fixed monthly or annual rate per user or per customer account. Our transaction revenue consists of transaction fees and interchange fees on a fixed or variable rate per transaction.
Our research and development expenses decreased to 25% as a percentage of revenue during fiscal 2024 from 30% during fiscal 2023, primarily due to a higher revenue growth rate but a relatively lower increase in personnel-related expenses, including stock-based compensation, as a percentage of revenue.
Our research and development expenses decreased to 23% as a percentage of revenue during fiscal 2025 from 25% during fiscal 2024, primarily due to revenue growth, but a relatively lower increase in personnel-related expenses, including stock-based compensation, as a percentage of revenue.
Excluding those customers of our financial institution partners, approximately 83% of BILL standalone customers as of June 30, 2023 were still customers as of June 30, 2024. Net Dollar-Based Retention Rate Net dollar-based retention rate is an important indicator of customer satisfaction and usage of our platform, as well as potential revenue for future periods.
Excluding those customers of our financial institution partners, approximately 86% of BILL AP/AR customers as of June 30, 2024 were still customers as of June 30, 2025. Net dollar-based retention rate is an important indicator of customer satisfaction and usage of our platform, as well as potential revenue for future periods.
Businesses using more than one of our solutions are included separately in the total for each solution utilized; as of June 30, 2024, this included approximately 11,500 businesses. Businesses 64 using our solutions during a trial period are not counted as new businesses using our solutions during that period.
Businesses using more than one of our solutions are included separately in the total for each solution utilized; as of June 30, 2025, this included approximately 15,800 businesses. Businesses using our solutions during a trial period are not counted as new businesses using our solutions during that period.
Our general and administrative expenses decreased to 22% as a percentage of revenue during fiscal 2024 from 24% during fiscal 2023, primarily due to a higher revenue growth rate but a relatively lower increase in personnel-related expense, including stock-based compensation, as a percentage of revenue.
Our general and administrative expenses decreased to 20% as a percentage of revenue during fiscal 2025 from 22% during fiscal 2024, primarily due to revenue growth, but a relatively lower increase in personnel-related expenses, including stock-based compensation, as a percentage of revenue.
Based on our agreements with the 65 Issuing Banks, we recognize the interchange fees as revenue gross or net of rebates received from the Issuing Banks based on our determination of whether we are the principal or the agent under the agreements.
Based on our agreements with the Issuing Banks, we recognize the interchange fees as revenue gross or net of fees paid to the Issuing Banks based on our determination of whether we are the principal or the agent under the agreements.
Our transaction revenue is comprised of transaction fees on a fixed or variable rate per type of transaction. We also generate cash from the interest earned on both corporate funds and funds held in trust on behalf of customers.
Our subscription revenue is primarily based on a fixed monthly or annual rate per user or per customer account. Our transaction revenue is comprised of transaction fees on a fixed or variable rate per type of transaction. We also generate cash from the interest earned on both corporate funds and funds held in trust on behalf of customers.
In addition, we have minimum commitments under our noncancellable operating lease agreements and agreements with certain vendors. For additional discussion about our commitments, including operating leases, refer to Note 15 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
For additional discussion about our Notes and Revolving Credit Facilities, refer to Note 9 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. In addition, we have minimum commitments under our noncancellable operating lease agreements and agreements with 72 certain vendors.
We present our key business metrics on a consolidated basis, which we believe better reflects the performance of our consolidated business overall. Our key business metrics are defined following the table below and track our BILL standalone, BILL Spend and Expense, and Invoice2go solutions combined.
We present our key business metrics on a consolidated basis, which we believe better reflects the performance of our consolidated business overall. Our key business metrics are defined following the table below and track our BILL AP/AR, BILL Spend and Expense, and Embedded Solutions and Other combined (as further defined below).
The majority of our rewards are earned and paid based on fixed rates and are not subject to estimation uncertainty. The remaining rewards are earned through our reward points program and may be redeemed at varying rates based on the redemption method selected by the spending business. Redemption methods include statement credits, cash, travel, and gift cards.
The remaining rewards are earned through our reward points program and may be redeemed at varying rates based on the redemption method selected by the spending business. Redemption methods include statement credits, cash, travel, and gift cards.
Restructuring Restructuring expense increased by $27.6 million during fiscal 2024 as compared to fiscal 2023 as a result of the Restructuring Plan announced on December 5, 2023. Refer to Note 16 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information on the Restructuring Plan.
Restructuring Restructuring expense decreased by $27.6 million during fiscal 2025 as compared to fiscal 2024 as the Restructuring Plan announced on December 5, 2023 was substantially completed in fiscal 2024. Refer to Note 15 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information on the Restructuring Plan.
We expect our R&D expenses to increase in absolute dollars, but they may fluctuate as a percentage of revenue from period to period as we expand our R&D team to develop new products and product enhancements.
We expect our R&D expenses to increase in absolute dollars, but they may fluctuate as a percentage of revenue from period to period as we expand our R&D team to develop new products and product enhancements, including continued investments in our artificial intelligence tools and offerings, such as AI agents.
When we purchase the participation interests, the purchase price is equal to the outstanding principal balance of the receivable. In order to purchase the participation rights in the receivables, we maintain certain funding arrangements, including warehouse facilities and, from time-to-time, other purchase arrangements with third-party funding sources.
When 61 we purchase the participation interests, the purchase price is equal to the outstanding principal balance of the receivable. In order to purchase the participation rights in the receivables, we maintain certain funding arrangements, including warehouse facilities.
In August 2024, our board of directors authorized a share repurchase program pursuant to which we intend to purchase to $300 million of our outstanding shares of common stock (the August 2024 Share Repurchase Program).
In August 2024, our board of directors approved a new share repurchase program pursuant to which we announced our intention to purchase up to $300.0 million of our outstanding shares of common stock (the August 2024 Share Repurchase Program).
We use these models and assumptions to determine the reserve rates applicable to the outstanding acquired card receivables balances to estimate reserves for expected credit losses. Based on historical loss experience, the probability of default decreases over time, therefore the attribute used to segment the portfolio is the length of time since an account’s credit limit origination.
We use these models and assumptions to determine the reserve rates applicable to the outstanding acquired card receivables balances to estimate reserves for expected credit losses. Based on historical loss experience, the probability of default varies by credit limit sizes, therefore the attribute used to segment the portfolio is the credit limit size of spending businesses.
(2) Consists of depreciation of property and equipment and amortization of developed technology, excluding amortization of capitalized internal-use software costs paid in cash. Free Cash Flow Free cash flow is a non-GAAP measure defined as net cash provided by (used in) operating activities, adjusted by purchases of property and equipment and capitalization of internal-use software costs.
Free Cash Flow Free cash flow is a non-GAAP measure defined as net cash provided by operating activities, adjusted by purchases of property and equipment and capitalization of internal-use software costs.
Components of Results of Operations Revenue We generate revenue primarily from subscription and transaction fees. Subscription fees are fixed monthly or annually and charged to customers for the use of our platform to process transactions. Subscription fees are generally charged either on a per user or per customer account per period basis, normally monthly or annually.
Components of Results of Operations Revenue We generate revenue primarily from subscription and transaction fees. Subscription fees are fixed at a monthly or annual rate per user or per customer account for the use of our platform to process transactions. Transaction fees are fees collected for each transaction processed, on either a fixed or variable fee basis.
Transaction fees are fees collected for each transaction processed, on either a fixed or variable fee basis. Transaction fees primarily include processing of payments in the form of checks, ACH, card payments, real-time payments, pay by card, invoice financing, and cross-border payments, and the creation of invoices. Transaction fees also include interchange fees paid by suppliers accepting card payments.
Transaction fees primarily include processing of payments in the form of checks, ACH, card payments, real-time payments, pay by card, invoice financing, cross-border payments, and the creation of invoices. Transaction fees also include interchange fees paid by suppliers accepting card payments.
Our primary uses of cash in our operating activities include payments for employees' salaries and related costs, payments to third parties to fulfill our payment transactions, payments to sales and marketing partners, payments for card rewards expenses, and other general corporate expenditures.
Our primary uses of cash in our operating activities include payments for employees' salaries and related costs, payments to third parties to fulfill our payment transactions, payments to sales and marketing partners, payments for card rewards expenses, and other general corporate expenditures. 73 Net cash provided by operating activities increased to $350.6 million during fiscal 2025 compared to $278.8 million during fiscal 2024.
Net Cash Provided by (Used in) Financing Activities Our cash proceeds from our financing activities consist primarily of proceeds from line of credit borrowings, employee purchases of our common stock under our Employee Stock Purchase Plan (ESPP). Our cash usage for our financing activities consists primarily of the repurchase of convertible senior notes and repurchases of shares.
Net Cash Provided by (Used in) Financing Activities Our cash proceeds from our financing activities consist primarily of proceeds from issuance of convertible senior notes, and employee purchases of our common stock under our employee stock purchase plan.
If an organization has multiple entities billed separately for the use of our solutions, each entity is counted as a business using our solutions. Businesses using our solutions may exclude certain network members which receive a bill from us in connection with limited use of our platform.
If an organization has multiple entities billed separately for the use of our solutions, each entity is counted as a business using our solutions. Businesses using our solutions exclude certain network members utilizing limited features of our platform, such as those that only receive payments.
The SMBs we serve are particularly susceptible to changes in overall economic and financial conditions, and certain SMBs may cease operations in the event of a recession or inability to access financing.
SMBs are particularly susceptible to changes in overall economic and financial conditions, and certain SMBs may, in the event of adverse economic conditions or a recession or any inability to access financing moderate their expenditures, shift to lower-cost methods of payment, or cease operations entirely.
We efficiently reach SMBs through our proven direct and indirect go-to-market strategies. We acquire new businesses to use our solutions directly through digital marketing and inside sales, and indirectly through accounting firms and financial institution partnerships.
We acquire new businesses to use our solutions directly through digital marketing and inside sales, and indirectly through accounting firms, financial institution partnerships and software providers .
We define TPV as the total value of transactions that we process on our platform during a particular period, comprising transactions from BILL standalone customers, BILL Divvy Corporate Card transactions, and transactions executed by Invoice2go subscribers. Our calculation of TPV includes payments that are subsequently reversed.
We define TPV as the total value of transactions that we process on our platform during a particular period, comprising transactions from BILL AP/AR customers, BILL Divvy Card transactions, and transactions executed by Embedded Solutions and Other customers. Our calculation of TPV is presented gross of payments that may 63 be subsequently reversed.
In March 2024 and May 2024, we entered into privately-negotiated transactions with certain holders of our 2025 Notes to repurchase $748.2 million and $234.5 million aggregate principal amount of our 2025 Notes, respectively, for an aggregate cash repurchase price of $711.0 million and $221.6 million, inclusive of transaction costs, respectively.
In addition, in fiscal 2024, we entered into privately negotiated transactions with certain holders of our 2025 Notes to repurchase $982.7 million aggregate principal amount of our 2025 Notes for an aggregate cash repurchase price of $933.2 million, inclusive of transaction costs.
In the future, we may attempt to raise additional capital through the sale of equity securities or through equity-linked or debt financing arrangements to fund future operations or obligations, including the repayment of the principal amount of the Notes in the event that the Notes become convertible and the note holders opt to exercise their right to convert.
In the future, we may attempt to raise additional capital through the sale of equity securities or through additional equity-linked or debt financing arrangements to fund future operations or obligations, including the repayment of outstanding convertible senior notes.
Other than our expected credit loss exposure on the card transactions that have not cleared, we had no other off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures, or capital resources as of June 30, 2024. 76 As of June 30, 2024, we, in partnership with the Issuing Banks and the Originating Bank Partner, had approximately $2.8 billion in unused credit available to spending businesses and borrowers using our invoice financing product.
Other than our expected credit loss exposure on the card transactions that have not cleared, we had no other off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures, or capital resources as of June 30, 2025.
As of June 30, % Growth as of June 30, 2024 2023 2022 (4) 2024 2023 Businesses using our solutions (1) 474,600 461,000 400,100 3 % 15 % Year ended June 30, % Growth Year ended June 30, 2024 2023 2022 (4) 2024 2023 Total Payment Volume (amounts in billions) (2) $ 292.4 $ 266.0 $ 228.1 10 % 17 % Year ended June 30, % Growth Year ended June 30, 2024 2023 2022 (4) 2024 2023 Transactions processed (in millions) (3) 103.8 85.1 62.9 22 % 35 % (1) As of June 30, 2024, the total number of BILL standalone customers was approximately 222,000; the total number of spending businesses that used our BILL Spend and Expense solution was approximately 34,800, and the total number of Invoice2go subscribers was approximately 217,800.
As of June 30, % Growth as of June 30, 2025 2024 2023 2025 2024 Businesses using our solutions (1) 493,800 474,600 461,000 4 % 3 % Year ended June 30, % Growth Year ended June 30, 2025 2024 2023 2025 2024 Total Payment Volume (billions) (2) $ 329.8 $ 292.4 $ 266.0 13 % 10 % Year ended June 30, % Growth Year ended June 30, 2025 2024 2023 2025 2024 Transactions processed (millions) (3) 121.3 103.8 85.1 17 % 22 % (1) As of June 30, 2025, the total number of BILL AP/AR customers was approximately 169,500; the total number of spending businesses that used our BILL Spend and Expense solution was approximately 41,100, and the total number of Embedded Solutions and Other customers was approximately 283,200.
R&D expenses are capitalized and amortized over five years for domestic R&D and fifteen years for international R&D. The requirement increases our current year cash tax liabilities, however, the cash flow impact is expected to decrease over time as capitalized research and development expenses continue to amortize.
R&D expenses are capitalized and amortized over five years for domestic R&D and fifteen years for international R&D. The requirement increases our current year cash tax liabilities.
We enable our SMB and accounting firm customers to make virtual card payments to their suppliers. We also facilitate the extension of credit to spending businesses in the form of BILL Divvy Corporate Cards. The spending businesses utilize the credit on BILL Divvy Corporate Cards as a means of payment for goods and services provided by their suppliers.
We enable our SMB and accounting firm customers to make virtual card payments to their suppliers. We also facilitate the extension of credit to spending businesses through the BILL Spend and Expense product in the form of BILL Divvy Cards.
We expect that service costs will increase in absolute dollars, but may fluctuate as a percentage of revenue from period to period, as we continue to invest in growing our business.
We expect that service costs will increase in absolute dollars, but may fluctuate as a percentage of revenue from period to period, as we continue to invest in growing our business and based on whether or not we are the principal or the agent under arrangements with third parties.
Research and Development Expenses Research and development expenses increased by $22.1 million during fiscal 2024 as compared to fiscal 2023, primarily due to a $22.9 million increase in personnel-related costs, including stock-based compensation expense.
Research and Development Expenses Research and development expenses increased by $3.3 million during fiscal 2025 as compared to fiscal 2024, primarily due to a $20.9 million increase in personnel-related costs, including stock-based compensation expense, due to increase in headcount, offset by a $18.6 million decrease due to higher capitalization of certain software development costs.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

19 edited+2 added−1 removed14 unchanged
Biggest changeIn addition to interest rate risks, we also have exposure to risks associated with changes in laws and regulations that may affect customer fund balances. For example, a change in regulations that restricts the permissible investment alternatives for customer funds would reduce our interest earned revenue.
Biggest changeA hypothetical 1.0%-5.0% increase or decrease in interest rates would not have a material effect on our financial results. In addition to interest rate risks, we also have exposure to risks associated with changes in laws and regulations that may affect customer fund balances.
In addition, our ability to manage credit risk 79 or collect amounts owed to us may be adversely affected by legal or regulatory changes (such as restrictions on collections or changes in bankruptcy laws, and minimum payment regulations). We rely principally on the creditworthiness of spending businesses for repayment of card receivables and therefore have limited recourse for collection.
In addition, our ability to manage credit risk or collect amounts owed to us may be adversely affected by legal or regulatory changes (such as restrictions on collections or changes in bankruptcy laws, and minimum payment regulations). We rely principally on the creditworthiness of spending businesses for repayment of card receivables and therefore have limited recourse for collection.
Unrealized gains or losses on our marketable debt securities are due primarily to interest rate fluctuations from the time the securities were purchased. We account for both fixed and variable rate securities at fair value with unrealized gains and losses recorded in accumulated other comprehensive loss since we classify our marketable debt securities as available-for-sale.
Unrealized gains or losses on our marketable debt securities are due primarily to interest rate fluctuations from the time the securities were purchased. We account for both fixed and variable rate securities at fair value with unrealized gains and losses recorded in accumulated other comprehensive income (loss) since we classify our marketable debt securities as available-for-sale.
Funds that we hold for customers are held in non-interest and interest-bearing bank deposits, money market funds, certificates of deposit, commercial paper, 78 other corporate notes, and U.S. treasury securities. We recognize interest earned from funds held for customers as revenue. We do not pay interest to customers.
Funds that we hold for customers are held in non-interest and interest-bearing bank deposits, money market funds, certificates of deposit, commercial paper, other corporate notes, and U.S. treasury securities. We recognize interest earned from funds held for customers as revenue. We do not pay interest to customers.
We mitigate this credit exposure by leveraging our data assets to make credit underwriting decisions about whether to accelerate disbursements, managing exposure limits, and various controls in our operating systems. We continually evaluate the credit quality of the securities in our portfolios.
We mitigate this credit exposure by leveraging our data 78 assets to make credit underwriting decisions about whether to accelerate disbursements, managing exposure limits, and various controls in our operating systems. We continually evaluate the credit quality of the securities in our portfolios.
There is risk that we may not be able to satisfy customer obligations in full or on time due to insufficient liquidity or due to a decline in value of our investments.
There is risk that we may not be able to satisfy customer obligations in full or on time 77 due to insufficient liquidity or due to a decline in value of our investments.
Our investments in marketable debt securities are generally held through maturity with minimal sales before maturity barring unforeseen circumstances, and thus unrealized gains or losses on fixed-income securities from market interest rate decreases or increases are not realized as the securities mature at par. We are also exposed to interest-rate risk relating to borrowings from our Revolving Credit Facility.
Our investments in marketable debt securities are generally held through maturity with minimal sales before maturity barring unforeseen circumstances, and thus unrealized gains or losses on fixed-income securities from market interest rate decreases or increases are not realized as the securities mature at par. We are also exposed to interest-rate risk relating to borrowings from our Revolving Credit Facilities.
Although we regularly review our credit exposure to specific spending businesses and to specific industries that we believe may present credit concerns, default risk may arise from events or circumstances that are difficult to foresee or detect, such as fraud.
Although we regularly review our credit exposure to specific spending businesses and borrowers as well as to specific industries that we believe may present credit concerns, default risk may arise from events or circumstances that are difficult to foresee or detect, such as fraud.
Any material increases in delinquencies and losses beyond our current estimates could have a material adverse impact on us. Although we make estimates to provide for expected credit losses in our outstanding portfolio of card receivables, these estimates may differ from actual losses.
Any material increases in delinquencies and losses beyond our current estimates could have a material adverse impact on us. Although we make estimates to provide for expected credit losses in our outstanding portfolio of card receivables and loans held for investments, these estimates may differ from actual losses.
Our transaction fees to our customers are not adjusted for changes in foreign exchange rates between the initiation date of the transaction and the date the funds are converted. We are also exposed to foreign currency exchange risk relating to the operations of our subsidiaries in Australia and Canada.
Our transaction fees to our customers are not adjusted for changes in foreign exchange rates between the initiation date of the transaction and the date the funds are converted. We are also exposed to foreign currency exchange risk relating to the operations of our subsidiary in Canada.
A change in foreign currency exchange rate can affect our financial results due to transaction gains or losses related to the remeasurement of certain monetary asset and monetary liability balances that are denominated in currencies other than the functional currency of our Australian and Canadian subsidiaries, which are both in U.S. dollars.
A change in foreign currency exchange rate can affect our financial results due to transaction gains or losses related to the remeasurement of certain monetary asset and monetary liability balances that are denominated in currencies other than the functional currency of our Canadian subsidiary, which is in U.S. dollars.
These assets are available for corporate operating purposes and mature within 24 months from the date of purchase based on the effective maturity date. The funds held for customers are invested with safety of principal as the primary objective. As secondary objectives, we seek to provide liquidity and diversification and maximize interest income.
These assets are available for corporate operating purposes with maturities of up to 37 months from the date of purchase based on the effective maturity date. The funds held for customers are invested with safety of principal as the primary objective. As secondary objectives, we seek to provide liquidity and diversification and maximize interest income.
If the value of the U.S. dollar weakens relative to the foreign currencies, this may have an unfavorable effect on our cash flows and operating results. We do not believe that a 10% change in the relative value of the U.S. dollar to other foreign currencies would have a material effect on our cash flows and operating results. 80
If the value of the U.S. dollar weakens relative to the foreign currencies, this may have an unfavorable effect on our cash flows and operating results. We believe that a 10% change in the relative value of the U.S. dollar to other foreign currencies would have an immaterial effect on our cash flows and operating results. 79
However, the liquidity risk is minimized by collecting the customer’s funds in advance of the payment obligation and by maintaining significant investments in bank deposits and constant net asset value money market funds that allow for same-day liquidity.
However, the liquidity risk is minimized because we typically collect the customer’s funds in advance of the payment obligation and by maintaining certain investments in bank deposits and constant net asset value money market funds that allow for same-day liquidity.
We are exposed to credit risk from card receivable balances we have with our spending businesses. Spending businesses may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure, or other reasons.
We are exposed to credit risk from card receivable balances we have with our spending businesses and loans held for investment balances from borrowers using our invoice financing product. Spending businesses and borrowers may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure, or other reasons.
We are also exposed to credit risk related to the timing of payments made from customer funds collected. We typically remit customer funds to our customers’ suppliers in advance of having good or confirmed funds collected from our customers and if a customer disputes a transaction after we remit funds on their behalf, then we could suffer a credit loss.
For certain transactions we remit customer funds to our customers’ suppliers in advance of having good or confirmed funds collected from our customers and if a customer disputes a transaction after we remit funds on their behalf, then we could suffer a credit loss.
As of June 30, 2024, we borrowed $180.0 million from our Revolving Credit Facility. Because the interest rate on our borrowings is indexed to SOFR, which is a floating rate mechanism, our interest cost may increase if market interest rates rise. A hypothetical 1.0%-5.0% increase or decrease in interest rates would not have a material effect on our financial results.
As of June 30, 2025, we borrowed $180.0 million from our Revolving Credit Facilities. Because the interest rate on each of our Revolving Credit Facilities is indexed to a designated term SOFR, which is a floating rate mechanism, our interest cost may increase if market interest rates rise.
We are exposed to credit risk in connection with our investments in securities through the possible inability of the borrowers to meet the terms of the securities.
For example, a change in regulations that restricts the permissible investment alternatives for customer funds would reduce our interest earned revenue. We are exposed to credit risk in connection with our investments in securities through the possible inability of the borrowers to meet the terms of the securities.
Factors that influence the rate of interest we earn include the short-term market interest rate environment and the weighting of our balances by security type.
Factors that influence the rate of interest we earn include the short-term market interest rate environment and the weighting of our balances by security type. The annualized interest rate earned on our corporate investment portfolio and funds held for customers decreased to 4.50% during fiscal 2025 compared to 5.07% during fiscal 2024.
Removed
The annualized interest rate earned on our corporate investment portfolio and funds held for customers increased to 5.07% during fiscal 2024 compared to 3.51% during fiscal 2023 due primarily to the changes in the short-term interest rate environment during fiscal 2023 that remained elevated throughout fiscal 2024.
Added
We are also exposed to credit risk related to the timing of payments made from customer funds collected.
Added
We rely principally on our ability to collect outstanding balances on loans held for investment by receiving payments processed through our platform from the borrowers' customers and applying them to outstanding loan balances.

Other BILL 10-K year-over-year comparisons