BILL Holdings, Inc.

Thank you for attending the Bill's Physical Fourth Quarter 2023 Earnings Conference Call. My name is Ciara, 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. I would now like to pass the conference over to Karen Sansot, Vice President of Investor Relations at Bill. Please go ahead.

Thank you, Operator. Welcome to Bill's fiscal fourth quarter and full fiscal year 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 are 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 future operations and 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 additional discussion, 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 reports on Form 10-Q. 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. Please refer to today's press release for the reconciliation of GAAP to non-GAAP financial performance and additional disclosures regarding these measures. At times during this call, we will discuss Bill's standalone results, which exclude our Divi Spend and Expense Management, Invoice to Go accounts receivable, and FINMARC 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. Before diving into our business results, I would like to share my thoughts on the awful disaster in Maui. I was in Maui just one mile north of the fires in Lahaina when it happened. During the fires, it was scary on so many levels, mostly because of the lack of communication that plagued all of West Maui. Waking up Wednesday to hear the stories of destruction was devastating. Talking to the Hawaiians who knew they had lost all of their possessions and were unsure if they had lost their friends or even worse, family members, was overwhelming. And then leaving on Thursday and driving through the war zone, not just seeing the scorched earth, but smelling it, is something I will never forget nor should any of us. Lahaina is at the heart of the beautiful people of Hawaii. All of the Lahaina artifacts to remind us of their heritage have been lost, but what cannot be lost is a strong sense of community, the aloha spirit that makes Hawaii so special. Now is the time if you have ever felt the aloha spirit of love, compassion, and respect to give back. The Hawaiian people need to know that their aloha spirit is going to come back to them when they need it most. Our hearts go out to the Hawaiians and the Hawaiian community. We stand ready to assist our customers and all small businesses affected by these fires. Many of us at Bill will be giving to Maui Strong. Please give from your heart and let the healing begin. Thank you for your consideration. Now on to our business results. Fiscal 2023 was a defining year for Bill. The strength of our business model and talent of our team were on full display as we delivered our commitments to hundreds of thousands of businesses during a year filled with macro challenges and banking turmoil. We delivered more than $1 billion in revenue and 65% year-over-year revenue growth while achieving our first year of non-GAAP profitability. Strong demand for our platform combined with our disciplined investment approach and rigorous execution led to non-GAAP net income of $194 million, reflecting an 18% margin. Free cash flow for the year was 157 million. We are most proud of the significant number of SMBs we empower each and every day. At the end of fiscal 2023, more than 460,000 businesses used Bill as their central hub of financial operations. We expanded our network to 5.8 million members that have originated or received an electronic payment through our platform. By making it easy for buyers and suppliers to connect and transact payments, we enabled $266 billion in total B2B payment volume across our platform, reflecting approximately 1% of US GDP and a significant milestone. Our strong financial performance and significant scale are due to many factors, including the mission critical nature of our platform, the breadth of our strategic ecosystem, and constant focus to solve the needs of SMBs. 17 years ago, Bill was founded with the mission to make it simple for SMBs to connect and do business. We created a category as we set out to help businesses automate their financial back office. Early on, we knew it was important to partner with an SMB's most trusted advisors to develop the market. That is why we built an ecosystem that strategically integrates with accounting firms and the top banks in the country. Driving success for our entire ecosystem is core to our DNA. Together with our partners, we can serve SMBs at a much faster pace. We have big ambitions. Today, we serve hundreds of thousands of SMBs. But we want to serve millions more. There are 30 million small businesses in the U.S. and 70 million globally. The majority still use manual paper-based processes to manage their financial back office. There is a vast opportunity to help these small businesses automate their financial operations to gain better insight to confidently manage their business and cash flow and easily transact trillions of dollars of B2B payments. As the creator of this category and with our leading platform, payments expertise, large network, partner ecosystem, and scale, we are uniquely positioned to capture these large greenfield opportunity. A great example of how we help companies reimagine their financial operations and create efficiency is Talbot Farms, a 100-year-old family farm in Colorado known for sweet palisade peaches. Desiree Schumann, bookkeeper of Talbot Farms, said, and I quote, We previously received invoices in the mail and would manually enter them into our accounting system and need to print and mail out checks. Bills, accounts payable, and spend management solutions changed how we do our finances. I can approve bills on the go and have real-time visibility. I save on average two hours a day, which is particularly important during our busy seasonal harvesting time, end quote. Our large-scale two-sided network serves as a key pillar for frictionless connections and secure payment transactions. It frees our AP and AR customers from the need to share bank information with each other. It acts as a payment choice switchboard, enabling both customers and network members to choose their preferred method of payment. Our network doesn't require a subscription, is accounting software agnostic, and even works when businesses don't have a general ledger system. With its ease of use, tens of millions of transactions flow through our network each year. This creates a valuable data asset that we apply our AI engine to. which enables us to develop better user experiences such as auto-matching customers and suppliers, auto-populating invoices no matter how they are received, managing risk, and providing payment and funding choices for customers and network members. An example of how network members benefit from our platform and managed payment choice is Chariots of Fire Transportation, a business that provides door-to-door transportation services to seniors and disabled adults, and whose clients include medical, nursing, and rehabilitation centers. Chariots of Fire uses Excel as their accounting system. To Makia Reed, the owner said, and I quote, every day our drivers help many people get to the important places they need to go. We process lots of money coming in and going out. Since we pay our drivers daily, we need our money from customers quickly. Bill's instant transfer helps us a lot. By getting paid instantly instead of waiting a few days, we can better manage our cash flow and pay drivers quickly, end quote. This is a great example of how the power and flexibility of our two-sided network and suite of payment choices help SMBs thrive. Our diverse and broad ecosystem enables us to efficiently reach small and mid-sized businesses. Bill is trusted by more than 85 of the top 100 accounting firms and the largest banks in the U.S., including Bank of America and JPMorgan Chase, who all put their brand on our platform to serve their customers. Payments are complex, and our partners trust us to do payments on their behalf given our deep expertise. Over 7,000 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. GRF, an accounting firm based in Washington, D.C., is a great example. Eleanor Litwack, partner of GRF Outsourced Accounting and Advisory Services, said, and I quote, in an environment where automation is crucial to the success of any business, bill remains a key ingredient in the growth of our task practice. With roughly 90 clients on our bill console, we are able to centralize billing selection, staff assignments, and bill implementations. Transferring new clients to our bill console or creating a new bill instance for them is a breeze. and allows us to cross that big piece off of our onboarding checklist with ease. We've onboarded dozens of new cast clients over the past three years, and our practice has doubled in size. Our partnership with Bill is a critical component of our infrastructure and continued growth." Before I lay out our fiscal 2024 priorities, I will recap our fiscal 2023 accomplishments. At the start of the year, we said our priorities were to develop a unified platform experience, further scale our ecosystem, and drive innovation and adoption of our payment solutions. We take our commitment seriously and have accomplished all of these objectives. We laid the foundation to launch a unified platform experience this fall, bringing our accounts payable and spend and expense management solutions seamlessly together. Our tightly woven solution with consolidated insights and unified data enables businesses to manage more of their financial back office in one place than ever before. In parallel, we built our cross-sale plans and capabilities for the unified platform launch. We consolidated our sales teams across channels, created single customer identities, and pre-approved many customers for spend and expense management credit lines. We developed cross-sale plans that encompass in-product discovery, marketing campaigns, partner enablement, and direct sales outreach. In addition, we acquired Finmark to expand our solutions to include financial planning and analysis tools. This is an important step towards evolving our platform to empower SMBs with greater insights to run their business and manage their cashflow. In fiscal 2023, we expanded our distribution ecosystem by acquiring new partners and strengthen our existing partners by bringing more solutions to their customers. For example, in our financial institution channel, we extended our agreement with JPMorgan Chase Commercial Banking's Cashflow360 powered by Bill. for another five years and expanded it to include additional payment capabilities. With Cash Flow 360, JPMorgan Chase commercial banking clients connect digitally with suppliers, vendors, and bill network members to automate invoicing, approvals, payments, and reconciliation. Customers can choose from a variety of payment choices today, including ACH, check, and virtual card. We are in the process of expanding our relationship with Bank of America to serve more of their SMB customers. Given the success of our solution in serving their new small business customers, we are now working together to extend our solution to serve their much larger installed base of SMB customers. We have started investing behind this exciting long-term initiative. The growth in our relationship with B of A speaks to the strong value proposition of our solutions, deep expertise and payments, and the collective success of our strategic partner ecosystem today. Turning to the accounting channel, we acquired many new partners and now serve approximately 7,000 accounting firms, up from 6,000 a year ago. We continue to enhance the tools we provide accountants to manage their clients with simplified workflows, more comprehensive reporting, and integrated accounts payable and spend and expense management. Now, moving on to our agreement with Intuit. Our co-marketing and embedded bill pay agreement expired in June. The customers served through this partnership represented less than 1% of revenue during fiscal 2023. We believe there is a much stronger opportunity for Bill to serve micro and small business directly and through our strategic partner ecosystem with banks and accountants. We will offer them a richer experience with our defining platform that has a broader suite of workflow and payment capabilities. Delivering payment innovations and increasing ad valorem payment adoption has been an important priority for Bill, and we made significant progress in fiscal 2023. By providing choice and helping customers and network members find the best solutions for their needs, Ad valorem penetration, excluding the FI channel, expanded to 13% of our payment volume across solutions, up from 10% a year ago. Our easy and secure payment experience drives growth in our network members, now at 5.8 million, up from 4.7 million a year ago. We expanded our ad valorem solutions by broadly rolling out pay by card and bill balance and introducing a beta version of invoice financing to a select group of network members. We are continuing to test the solution and will make it available to more businesses in fiscal 2024. Our large data asset and risk management expertise provides us a competitive advantage to serve SMBs with working capital and cash flow solutions. Looking ahead to fiscal 2024, we are prepared to operate in a constricted macro environment while executing our top priorities. Our overarching goal is to help small businesses thrive by providing the tools and insight they need to efficiently and confidently manage their financial operations and cash flow. In support of this goal, we have set out these three top priorities for Fiscal 2024. First is to drive adoption of our integrated financial operations platform that empowers SMBs to easily manage their AP and spending expense operations together. Second, we will expand our ecosystem by bringing more innovations to our partners and attracting new partners. And third, we will continue to enrich our payment experiences and drive penetration of our ad valorem solutions. In closing, we delivered a strong defining year as we surpassed more than $1 billion in revenue and achieved meaningful non-GAAP profitability. This threshold is a reminder that we have built and are building a new category around financial operations for S&Ps. We are the leader and continue to innovate across our platform and ecosystem. We've built this category to bring automation, efficiency, and insights around the underlying financial operations that make any business tick. For most of our existence, no other company was doing, let alone thinking about how to help SMBs on this front at scale. Our mission has just begun and we will continue to innovate across our platform and ecosystem of customers, partners, and suppliers to serve more and more SMBs. We want to thank our customers, partners, and employees who are on this journey with us to help SMBs change the way they do business. Now, I'll turn the call over to John to talk in more detail about our quarter.