BILL Holdings, Inc.

Good afternoon and welcome to Build.com's first quarter of fiscal 2021 earnings conference call. Joining us today for today's call is Build.com's CEO, Rene LaCerte, and CFO, John Reddick. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. If you ask a question during that time, you will need to press star 1 on your telephone keypad. Please be advised that today's call is being recorded. If you require any further assistance, please press star then zero. With that, I would now like to turn the call over to John Reddick for introductory remarks. John?

Thank you, operator. Welcome to Bill.com's fiscal first quarter 2021 earnings conference call. We issued our earnings press release a short time ago and furnished the form 8K to the SEC. The press release can be found in the investor relations section of our website. With me on the call today is Renee Lacerde, chairman, CEO, and founder of Bill.com. Before we begin, please remember that during the course of this call, we may make forward-looking statements about the operations and future results of Bill.com that involve many assumptions, risks, and uncertainties. If any of these risks or uncertainties develop, or if any of the assumptions prove incorrect, actual results could differ materially from those expressed or implied by our forward-looking statements. For discussion of the risk factors associated with our forward-looking statements, please refer to the text in the company's press release issued today and to our periodic reports filed with the Securities and Exchange Commission, including our Form 10-K, dated August 31, 2020. We disclaim any obligation to update any forward-looking statements. On today's call, we will refer to both GAAP and non-GAAP financial measures. The non-revenue financial figures discussed today are non-GAAP, unless stated that the measure is a GAAP number. Please refer to today's press release for the reconciliation of GAAP and non-GAAP financial performance and additional disclosures regarding these measures. Now, I'll turn the call over to Rene. Rene?

Thanks, John, and good afternoon, everyone. Thank you for joining us today. We kicked off our new fiscal year with strong Q1 financial results, which exceeded our expectations across the board In Q1, we saw our SMB customers getting back to business, illustrated by several of our key metrics showing improvement. We are excited about the increasing adoption of our platform throughout our diversified go-to-market ecosystem. Core revenue, which we define as attrition plus transaction revenue, grew by 53% year-over-year to $43.8 million. We also delivered a strong non-GAAP gross margin of 77% in the quarter. Don will review our financials in more detail later, but first, let me give you an update on our overall progress and execution efforts. At the end of the first quarter, we achieved a company milestone by surpassing the 100,000 customer mark, with overall customer growth at 27% year-over-year. Our customers trust the Build.com platform to manage their workflows and process their payments, which total billions of dollars monthly. As a reminder, our platform extends well beyond our customers to over 2.5 million network members that pay and get paid through Google.com. We believe that we are operating one of the largest B2B networks in the United States. Later, I'll be talking more about how we are focused on growing and monetizing this networked asset. During the quarter, we processed $28.8 billion in total payment volume for TPV, an increase of 31% over Q1 of the prior year. This demonstrates the strong customer demand for our platform and the new payment capabilities we've added over the last 18 months. We recently surveyed over 900 Bill.com customers using a third-party firm. Survey respondents represented a broad spectrum of company sizes, industries, and product usage. The results really showcased Bill.com's strong value proposition with 97% of respondents noting that Bill.com allows them to operate their businesses remotely. The vast majority says that Bill.com enables them to digitize financial operations and describe Bill.com as essential to their operations. It is this value proposition that leads to our platform becoming mission critical for customers and our strong customer and revenue retention metrics. Customers that participated shared direct feedback noting, and I quote, Bill.com enabled us to switch to primarily electronic payments once our office switched to being fully remote during the COVID-19 pandemic. It was easy to learn when I onboarded to my new job at this company and easy to onboard vendors and to do real-time sync with accounting software. The payment process for international contractors is much easier and more efficient. Being able to enter the bills and QuickBooks and have AutoPay set on bill.com is excellent. We also are pleased to see that our customers continue to have high levels of satisfaction as reflected in G2's independent peer-to-peer review research. This year, Go.com moved further to the upper right on G2's grid for small business AP automation and took over the number one ranking to be the clear leader in the eyes of SMB. We remained in first place for market presence, and our average rating this year was 4.85 on a scale of 0 to 5 in this market barometer of small business sentiment. At the end of the day, the satisfaction and value we deliver to our customers can best be illustrated by a real customer experience. Manhattan Soccer Club is one of the largest soccer clubs in New York City. With over 60 teams, 1,000 players, and an annual budget of $3.5 million, the nonprofit offers all levels of development and competition. Over the past few seasons, the paperwork from scorers and managers and coaches was getting out of hand. Each year, their auditors required more detailed proof. such as receipts, check stubs, invoices, all of which had to be processed, sent back to the auditor, and then filed in the home office of Sam Arnott, Director of Operations. With Build.com, Sam no longer uses paper checks, reducing his workload and facilitating faster reimbursement for managers and coaches. Sam also provided the auditors direct access to Build.com, cutting down the time and, just as importantly, the cost of the audit. He also transitioned all paper files to digital on our platform. Sam noted, and I quote, I call Bill.com my personal assistant. I'm also the president of a youth soccer league. If it weren't for Bill.com, I wouldn't have the cycles to pursue my passion for developing and mentoring youth soccer players. In addition to serving our customers, we're also focused on extending our ability to create value for more than 2.5 million network members. We work hard to simplify the process of getting customers, their vendors, and their clients to connect and do business, which creates a healthy flywheel effect. For example, our platform intelligence includes data from suppliers who are currently in the Build.com network. For these suppliers, we store pertinent information such as tax ID, remittance address, and other payment preferences. So when an SMB joins our platform, that new customer can instantly pay many vendors who are already in our network without going through the painful and time-consuming process of collecting confidential financial and bank account details. Recently, we discussed our efforts at increasing the number of card accepting suppliers enabled on our platform, which in turn increases our virtual card PPV. During Q1, we brought supplier enablement entirely in-house, employing our own vendor AI matching logic to automate this critical function. By controlling this process ourselves end-to-end, we've improved our ability to identify card accepting suppliers and pay them more quickly. our own employees are better equipped than a third party to promote the benefits of our virtual card payments to our customers' suppliers. Through these efforts, we are seeing early success adding the long-tail suppliers to our network. We believe there's plenty of opportunity ahead. As we continue to focus on creating a better user experience for suppliers, we have also been expanding our payment capabilities so that we can pay vendors faster. On a prior call, we were adding faster payment functionality by leveraging the real-time payment network from the clearinghouse While the real-time payments rail has been used primarily for consumer payments to date, we believe that there are interesting applications for B2B payments. According to a recent survey conducted by MasterCard and payments.com, 72% of companies stated that they intend to adopt real-time payments within the next three years. We also hear from our own customers and network members that enabling real-time payments is an important use case. Leveraging these rails as fast border, we began rolling out a new feature called instant transfers. With instant transfer, our network vendors can get paid 24-7 and their funds are available immediately. We currently charge the recipient an ad valorem fee for the service. Instant transfer is currently in pilot mode and we are pleased with early engagement data. This latest payment innovation demonstrates our continued efforts to deliver value to both sides of our network. Finally, I want to highlight another indicator of increased platform engagement, the growing use of our native mobile app. In September, the number of mobile.com mobile app downloads almost doubled year on year. And our number of active mobile users hit an all-time high at the end of the quarter. We attribute this increase in mobile usage to better promotion of it in the customer's desktop experience and be a deep linking to the mobile app in our workflow-related emails. Looking ahead, we also expect a higher level of mobile usage by our network members, driven by innovations like the instant transfer product mentioned earlier. Next, let me update you on the progress with our go-to-market initiatives, starting with the status of our newest financial institution partners. Turning to our partnership with KeyBank, key cash flow became generally available for its business banking customers in October and for the commercial banking customers this week. We are very pleased with how quickly we were able to stand up this partnership despite the unexpected challenges presented by COVID-19 from March through September. With respect to our new relationship with Wells Fargo, the integration is now complete, and we began piloting our service inside the bank's commercial electronic office portal in October. This means that the top three commercial banks in the country are now leveraging our white-label solution. We are excited about helping them and all of our bank partners better serve their customers. Finally, we continue to work closely on the design and integration of our platform to serve the S&B customers of one of the top three small business banks in the U.S., We look forward to being able to announce details of our launch plans here in calendar 2021. The accounting channel continues to be a strong part of our customer acquisition ecosystem. Our relationships with over 5,000 accounting firm partners accounted for 51% of our total customers and 46% of our total revenue in fiscal 2020. Like most SMBs that are now working from home, accountants are operating in a similar setting, unable to go to their offices. As a result, we have seen increased interest in our work from anywhere value proposition, particularly from family office and wealth management firms who leverage some of the same tools that accounting firms use to serve their clients. Remote work resonates more and more with accountants. As such, I would like to highlight one of our accounting partners, Countsy. With over 150 employees and hundreds of clients, Countsy is an outsourced provider at back office accounting and HR functions for leading technology and venture-backed companies. Pouncey relies on Build.com to serve customers such as Asana, GreenCloud, CyApps, Intercom, and Quora, to name a few. Founder Martini Nganal commented on the benefits of using Build.com in the remote work environment, as she stated, and I quote, Pouncey's clients utilize Build.com as they realize the benefits it provides, including the flexibility to operate their businesses remotely. When we took over the accounting function of an entirely paper-based client in Seattle at the beginning of the lockdown, where all employees were immediately ordered to stay home, they were very concerned about being able to pay the bills and keep their business running with no interruption. We were able to quickly pivot the company to Bill.com's cloud-based service overnight. Bill.com saved the day. None of our success is possible without the performance of strong teams across our company. During the quarter, we continued to expand both our management team and board of directors, adding top-tier talent. Tom Clayton joined our team as chief revenue officer. As we continue to scale and grow the business, we saw the value in aligning all customer revenue opportunities under one leader. In this newly created role, Tom will focus on growing the company's overall revenue. He leads the sales, marketing, and strategic partnerships organizations for the company. His experience, cultural fit, and agile learning are unique, and we're thrilled that he has joined the Build.com team. We also added two independent directors to our board. He's been Payments Executive Colleen Taylor and Brand Leader Ali Klein. Colleen has considerable payments experience with over 30 years helping different types of customers transact around the world. He is currently the President of Merchant Services U.S. for American Express, and previously she served as the Executive Vice President of Merchant Services for Wells Fargo. Ali's background includes having served as the Chief Marketing Officer for Verizon Media, which consisted of over 20 distinct digital brands reaching 1 billion customers. She also served as the Chief Marketing Officer for AOL, with responsibilities for global consumer and B2B marketing, brand strategy, as well as external and external communications. In closing, I am pleased with our start to the fiscal year. I'd like to give a shout out to all of our employees for their hard work and continued dedication. In spite of the many external distractions, employee engagement and energy has remained high. Everyone at Build.com is focused on helping SMBs succeed in any environment. I'm excited about the momentum we have in FY21 as our platform simplifies business for our customers and their network, making it easier for them to focus on what they do best. Now, I'll turn the call over to John to review our financials.