BILL Holdings, Inc.

Thank you for attending today's Bills Fiscal Second Quarter 2023 Earnings Conference Call. My name is Megan, and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. I would now like to pass the conference over to Karen Sansot, Vice President of Investor Relations at Bill.com.

Please go ahead. Thank you, operator. Welcome to Bill's fiscal second quarter 2023 earnings conference call. We issued our earnings press release a short time ago and furnished the related form 8K to the SEC. The press release can be found on the investor relations section of our website at investor.bill.com. With me on the call today is Renee LeCert, chairman, CEO, and founder of Bill, and John Reddick, executive vice president and CFO. 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 BIL 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 SEC, including our most recent annual report on Form 10-K and quarterly report on Form 10-Q, filed with the SEC and available on the investor relations section of our website. 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 to non-GAAP financial performance and additional disclosures regarding these measures. Additionally, please note that the appendix for quarterly investor deck, which is posted on our investor relations website, contains a supplemental table of revenue and metrics information. At times during this call, We will discuss Bill's standalone results, which exclude our Divi Spend Management, Invoice2Go accounts receivable, and Finmark financial planning solutions. Now I'll turn the call over to Rene. Rene?

Thank you, Karen. Good afternoon, everyone. Thank you for joining us today. Bill delivered strong second quarter results and achieved another quarter of profitable growth as we executed on our strategy to be the essential financial operations platform for SMBs. Revenue in Q2 grew 66% year over year. We made exceptional progress growing non-GAAP net income, which was $49 million for the quarter. Our non-GAAP net income margin was 19% in Q2, and we also delivered another quarter of positive free cash flow. Our results demonstrate the commitment we have to execution rigor and investing for profitable growth. The power of our scale, technology, and business model enabled us to create significant float revenue tailwinds in this higher interest rate environment. We are leveraging our float revenue to invest in long-term strategic opportunities while also delivering non-GAAP profitability. Given the strength of our financial position, conviction in our growth prospects, and our proven ability to execute, today we announce board authorization for a $300 million share buyback program which we believe will further enhance shareholder value and minimize dilution without compromising our ability to invest in future growth. Before talking about our business, I'd like to comment on the health of SMBs. Businesses today are faced with a challenging economy that includes inflation and rising interest rates. Time and time again, SMBs proved to be resilient and agile, and we're seeing them adjust to the current conditions. With our solutions, SMBs are empowered to better manage their business and cash flow. we are energized by the opportunity to help our customers succeed. As we discussed on our Q4 and Q1 calls, macro conditions are impacting small businesses, and they are taking action to moderate expenses. As we anticipated, these trends continued in fiscal Q2, and we experienced lower growth in total payment volume compared to prior periods. Our proven business model and track record of execution position us well to navigate this economy. while pursuing our long-term aspirations to serve millions of businesses and capture billions of dollars in revenue. As champions of SMBs, we're proud that more than 400,000 SMBs use our solutions to better run their businesses. A great example of how we help companies streamline their financial operations is Ditch Switch Undercon, a commercial and industrial equipment distributor that first used Divi's spend management solution and then adopted Bill's accounts payable solution. Ditch Witch Undercon started as a family-owned company in 1972 and currently has six dealership locations throughout the Midwest and South. Ede Albasari, CFO, said, and I quote, Divi and Bill have been a game changer by giving us more visibility and control of our cash flow. The ease of use and automating our finances is really important in running our day-to-day operations. The combination of Bill and Divi has removed the hassle of of that paper-based process and given us time back to focus on growing our business and providing our customers the equipment and service they need to get the job done. End quote. Our large and growing partner and network ecosystem enables us to efficiently reach new businesses and gives us a competitive edge. We partner with SMB's most trusted advisors, including their accounting firms and financial institutions, with the shared goal to create more value for SMBs. Our diverse distribution channels are a key advantage and represent a competitive moat. Our proprietary network of 4.7 million members transact with billed customers. This network enables us to offer a strong value proposition to both parties in every transaction, while creating a network effect for new customer acquisition. Our network members benefit from fast, efficient electronic payments, the ability to choose their payment types, and easy access to data for streamlined reconciliation. We make it easy for businesses to connect pay and get paid. Behind the scenes of our network, our platform is a complex scale operation with sophisticated capabilities, including risk management, multiple payment rails, and a robust regulatory and compliance foundation. These capabilities enable us to innovate fast and to deliver efficient payment experiences at scale. We are now processing $250 billion in payment volume annually. The breadth of our platform positions us to be the financial nervous system for millions of SMBs. Another core foundation of our strategy is our go-to-market partnership with accounting firms. Our solutions enable more than 6,000 accounting firms to automate their bookkeeping operations, create insights for clients, grow their practices, and provide strategic advisory services. Accounting firms often drive technology adoption and usage as key collaborators and strategic advisors to SMBs. Recognizing this, we build tools that are embedded into the operational day-to-day activity of their firms. Because of Bill, accountants are able to engage more efficiently with their clients. Our solution enables them to better support their existing accounts, as well as take on additional clients. Bill is an integral part of their business. With the addition of Divi, we have strengthened our ability to serve accountants' needs. During the quarter, we streamlined the Divi sign-up and client onboarding process. Looking ahead, one of the earliest customer-facing aspects of our unified platform experience will be a more powerful tool for accountants to help them manage and support their clients. An example of the power that Bill and Divi bring to accountants is RKL, a top 100 firm in the U.S. Gretchen Nasso, president of RKL Virtual Management Solutions, said, and I quote, RKL Virtual is focused on optimizing and managing our clients' accounting and finance functions. Our best-in-class tech stack, featuring Bill and Divi, enables us to streamline clients' operations, deliver better insights, and help our clients grow. RKL Virtual's rapid growth over the past 18 months would not have been possible without Bill and Divi. We leverage Bill and Divi's functionality, ease of use, and end-to-end automation to triple our practice's transaction volume." Financial institutions represent another important component of our distribution strategy, and we partner with six of the top 10 banks in the US. On the last earnings call, we discussed being selected to provide an SMB-focused solution for a new bank partner. Today, I'm happy to share that we have recently launched with BMO, Our white-label solution will offer a variety of our payment solutions, including virtual cards, to BMO's customers, giving them a broad range of payment capabilities within one solution that automates bill pay and digitizes invoicing to help manage cash flow. Core to our success has been constantly driving innovation that creates more value for members of our ecosystem. With our diverse product portfolio and payment scale, we are able to quickly identify areas of opportunity and turn these learnings into new offerings. Increasingly, we are exercising our innovation muscle to provide more features and payment choices for the supplier side of our network. An example of this is our instant transfer product, which has seen strong demand and good repeat usage among smaller suppliers in our network. Instant transfer enables us to pay suppliers faster and helps shape our roadmap for future innovation. With these learnings, we are developing a working capital solution for existing known suppliers in our network, to help them improve their cash flow by getting paid much faster. With our large data asset of existing customer and supplier relationships and transaction history, as well as strong risk management capabilities, we are uniquely positioned to provide working capital solutions to existing customers and network members to enable payment advances. We believe there is significant demand for solutions like this in the marketplace today, and we are excited about the potential here. In closing, We delivered another strong quarter with high revenue growth and significant improvement in profitability while making progress toward our goal of being the essential financial operations platform for SMBs. We have built our business to create value for our customers while also driving gross margin expansion and profitability. Our powerful business model positions us well to navigate the macro environment while pursuing our long-term aspirations to serve millions of businesses and capture billions of dollars in revenue. I'd like to thank our customers and partners for the trust they placed in us. I'd also like to thank the Bill team for their commitment to serving SMBs, which enabled us to deliver strong financial results. I'll now turn the call over to John to talk in more detail about our quarter.