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BILL (BILL) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q3 FY26)· Information Technology· May 7, 2026

Source: earnings call transcript

Executive summary

BILL Q3 FY26 — Strong Revenue Growth, GAAP Profitability, and AI-Driven Restructuring

BILL delivered strong Q3 FY26 results, showcasing durable growth and expanding profitability, including achieving GAAP profitability. The company is aggressively transitioning to an AI-native organization, which includes a significant workforce reduction to align its cost base and accelerate execution. This strategic shift is complemented by a substantial increase in the share repurchase authorization, reflecting confidence in future growth and shareholder value creation.

Highlights

5

  • Core revenue grew 16% year-over-year to $371 million.

  • Non-GAAP operating margin reached 20%, expanding 475 basis points year-over-year.

  • Achieved GAAP profitability in the quarter.

  • Board authorized a significant increase to the share repurchase program, now totaling $1 billion.

  • Over 100,000 customers are using AI agents, automating 1.2 million invoices.

Concerns

3

  • Workforce reduction of up to 30% by the end of Q4 FY26.

  • Net new AP/AR customer adds are expected to trend below 4,000 in the near term.

  • Investor Day timing pushed out due to strategic and organizational changes.

Guidance & targets

CategoryTargetConfidence
Total Revenue
$425M-$435M
high materiality
High
Core Revenue
$392M-$402M
high materiality
High
Non-GAAP Operating Income
$81.5M-$86.5M
medium materiality
High
Non-GAAP Net Income
$78M-$82M
medium materiality
High
Non-GAAP EPS
$0.69-$0.72
high materiality
High
Core Revenue
$1.496B-$1.506B
high materiality
High
Float Revenue
$145.7M
medium materiality
High
Total Revenue
$1.642B-$1.652B
high materiality
High
Non-GAAP Operating Income
$303.6M-$308.6M
high materiality
High
Non-GAAP Net Income
$298.7M-$302.7M
medium materiality
High
Non-GAAP EPS
$2.61-$2.64
high materiality
High
Stock-based compensation expenses
below $250M
medium materiality
High
AP/AR TPV growth
in line with Q3
medium materiality
High
Spend & Expense volume growth
approximately 20% YoY
medium materiality
High
AP/AR take rates
in line with Q3
medium materiality
High
Spend & Expense take rate
slightly above 250 bps
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
AP/AR
Net new customer adds exceeded expectations due to strength in wealth management, though expected to trend below 4,000 in the near term as the company focuses on larger customers. Subscription ARPU showed sequential growth. TPV growth was in line with Q3 trends.
Net new customers: 4,100Subscription ARPU growth: >3% sequentiallyTransaction revenue: $122MTransaction revenue growth: 13% YoYTake rate: 16.5%Take rate expansion: 0.5 bps sequentiallyTake rate expansion: 0.3 bps (2%) YoYTransaction revenue per transaction: $10.14Transaction revenue per transaction growth: 8% YoYTPV same-store sales growth: 4% YoY
—12%——
Spend & Expense
Revenue growth was fueled by sustained momentum in card volume and take rate. Card payment volume strength in shipping, advertising, and travel offset deceleration in healthcare and retail. Take rate benefited from a favorable mix of high interchange verticals. Rewards rate showed sequential improvement due to disciplined management.
Card payment volume growth: 23% YoYTake rate: 254 bpsRewards rate: 130 bps
$167M21%——

Orderbook & backlog

Suppliers under contract doubled Q3 FY26

from Q2

Refers to suppliers under contract for the Supplier Payments Plus (SPP) portfolio, including the largest supplier signed to date.

Product announcements

ProductTypeDetails
International capabilities for BILL's Spend & Expenseexpansion
BILL Travellaunch

Risks & headwinds

Workforce reduction impact By end of Q4 FY26

Up to 30% reduction in workforce

Mitigation:Aligning cost base to an AI-native future, aiming for a leaner, flatter, faster organization. Expects $110M gross annualized savings, with $20M-$30M reinvested in critical growth areas (AI).

Net new customer adds deceleration Near term

Expected to trend below 4,000 in near term

Mitigation:Focusing on landing larger, upmarket customers, which is positively impacting subscription ARPU (grew >3% sequentially).

Changes in virtual card acceptance This year or beginning of FY27

Not very material

Mitigation:Latest changes are not expected to be material and largely focus on very large customers, to which BILL has limited exposure. Incorporated within current guidance.

What to watch in Q4 FY26

Impact of workforce optimization

Next quarter (Q4 FY26) and beyond
Current Up to 30% reduction announced
Target Evidence of increased speed, focus, and execution efficiency; realization of expected savings.

Why it matters

This significant restructuring is intended to make BILL an AI-native company, impacting operational efficiency, product development, and overall financial performance.

By the end of Q4, we will reduce the workforce by up to 30%. This is a hard decision, and I want to be direct about that. The reduction will involve colleagues who have helped build BILL. And we will treat them with the care and support they deserve through this transition.

Find out whether BILL delivers this. Inve re-checks your case every morning.

Q&A highlights

Why is a 30% workforce reduction the right magnitude, what should investors track beyond cost savings to see if it's working, and what are the risks involved?

Rene Lacerte explained that the reduction is driven by the need for a leaner, faster organization to execute in an AI-native world, where the time from ideation to execution is compressing. AI enables greater efficiency, and the company is aligning its structure to capitalize on this. He acknowledged it's a difficult decision but necessary for future success and balancing growth with profitability. He highlighted the success of AI agents and internal efficiencies as proof points.

“building in an AI world, where the distance and time between ideation and execution is shrinking rapidly and compressing requires a different organizational structure. We have to drive focus and clarity across the organization at a speed that we haven't had to do in the past.”

asked by Tien-Tsin Huang · answered by René Lacerte

2 min read 5 chapters

Detailed narrative

AI Transformation and Strategic Focus

BILL is undergoing an aggressive AI transformation, making it the #1 priority for the company. This involves building powerful AI infrastructure, leveraging proprietary data assets, and deploying a suite of agents that are already used by over 100,000 customers. The goal is to shift from a 'do-it-with-you' to a 'do-it-for-you' approach for SMB financial operations, dramatically expanding the market and creating new monetization opportunities. The company believes its unique assets—proprietary data, productized operational complexity, and established trust—provide a significant competitive advantage in this AI-driven shift.

Workforce Optimization and Cost Alignment

To align with its AI-native future and operate with greater speed and precision, BILL will reduce its workforce by up to 30% by the end of Q4 FY26. This difficult decision is made from a position of strength, aiming for a leaner, flatter, and faster organization. This initiative is expected to generate approximately $110 million in gross annualized savings, with $20 million to $30 million reinvested into critical growth areas, primarily AI development, in FY27. The net savings are anticipated to drive further margin expansion and support high-return opportunities.

Capital Allocation and Share Repurchase

The Board of Directors has authorized a significant increase to the share repurchase program, now totaling $1 billion. This decision reflects management's conviction in the company's growth trajectory, strong free cash flow generation, and the opportunity to return value to shareholders. The company views its current share price as a significant opportunity to retire shares and create meaningful shareholder value, emphasizing a disciplined approach to capital allocation.

Integrated Platform Strategy Progress

BILL's integrated platform strategy is showing positive results, with over 20,000 businesses leveraging both AP and Spend & Expense solutions, representing 39% year-over-year growth in joint customers. These joint customers exhibit higher retention rates and faster revenue growth. The company continues to enhance its Supplier Payments Plus (SPP) portfolio, streamlining B2B payments and extending digital payment capabilities. Early indications for SPP are positive, with the number of suppliers under contract doubling in Q3 from Q2.

Market Expansion and Product Enhancements

In Q3, BILL broadened its addressable market through product enhancements and partner channel relationships. New international capabilities for BILL's Spend & Expense customers allow global card usage. The launch of BILL Travel, a new Spend & Expense product, aims to reduce travel workflow time by over 85% for businesses on the platform, saving over 100,000 hours monthly in aggregate. The Embed channel is also progressing, with latest partners activating multiple ad valorem payment modalities.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.