Bill.com (NYSE: BILL) surprised investors by reporting better-than-expected results for the fourth quarter of Fiscal 2022. The provider of cloud-based software solutions for small and midsize businesses (SMBs) beat Wall Street’s expectations on both top and bottom lines. BILL stock is up over 21% in pre-market trading at the time of writing.
Bill.com processed 10.5 million transactions through its platform in Q4, growing 28% year-over-year. It also processed 7.3 million card transactions for Divvy.
Q4 Results in Detail
Bill.com reported an adjusted loss of $0.03 per share, narrower than the consensus estimated loss of $0.14 per share. The figure was even better than the prior year’s adjusted loss of $0.07 per share.
Similarly, total revenue of $200.22 million advanced a humongous 156% year-over-year, beating the consensus estimate by $17.12 million. The solid revenue boost was contributed by a 77% jump in Subscription fees and a whopping 201% growth in Transaction fees compared to the same period last year.
On the annual front, total revenue of $641.96 million leaped 169% compared to last year. Annual subscription fees grew 73% and transaction fees jumped 265% compared to FY21. However, the FY22 adjusted loss of $0.24 per share was almost double the adjusted loss of FY21.
Bill.com Gives Upbeat FY23 Guidance
Based on the continued business momentum, Bill.com gave robust guidance for the first quarter and full year Fiscal 2023, which came in better than analysts’ expectations.
For Q1 FY23, BILL expects total revenue to be in the range of $208-$211 million, better than the analysts’ consensus of $187.5 million. Adjusted earnings are projected between $0.05-$0.07 per share, while the consensus estimate is a loss of $0.10 per share.
For FY23, BILL forecasts total revenue to be between $955.5-$973.5 million, much higher than the consensus estimate of $879.5 million. Similarly, FY23 adjusted earnings are expected to fall between $0.23-$0.38 per share, while the consensus is pegged at a loss of $0.31 per share.
Commenting on the guidance, Bill.com CFO, John Rettig said, “Looking ahead, we expect to deliver high revenue growth and to transition to being a non-GAAP profitable company in the fiscal year 2023. We will continue to invest in our large market opportunity, while maintaining our rigorous operational discipline.”
Is Bill.com a Good Stock?
On TipRanks, BILL stock commands a Strong Buy consensus rating based on 11 Buys and two Holds. The average Bill.com price target of $166.83 implies 11.7% upside potential to current levels. Meanwhile, the stock has lost 36% so far this year.
Encouraged by the results and management’s optimistic outlook for Fiscal 2023, Oppenheimer analyst Kenneth Wong lifted the price target on BILL stock to $200 (33.9% upside potential) from $150, while maintaining a Buy rating. The analyst also raised his model estimates for Fiscal 2023.
Wong concluded, “In our view, Bill.com’s early mover advantages, diverse partnership distribution channels, deep investments in Software-as-a-Service (SaaS) and payments technology, and CEO & founder-led vision set up the company to scale into a much larger business with durable growth and operating margins over time.”
Ending Thoughts
Bill.com’s robust earnings beat has been welcomed with much enthusiasm by investors. Analysts too are highly bullish on the stock. Plus, the management’s optimism about the company’s growth trajectory makes for a good investment case.
