Dive Brief:

• Bill.com revenue for fiscal year 2022 more than doubled as the company steadily expanded its reach to more small and mid-sized business customers, according to an earnings report last week. It had 157,800 customers as of the end of June, up about 30% from 121,200 at the end of last year, according to its most recent annual filings with the Securities and Exchange Commission.
• The San Jose, California company, which provides software services so that other businesses can digitize their payments, accounting, expense and other workflows, is expanding despite a difficult economic environment in which some peers, including Brex, pulled back from the SMB market.
• While Bill.com’s net losses ballooned for the year, its gross profits, which are calculated before expenses, nearly tripled, the company said in its Aug. 18 earnings report.

Dive Insight:

Bill.com is one of the many digital financial services companies targeting the SMB market, seeking to persuade the businesses to convert their payments and other processes to digital alternatives. It has been building its business since 2006 and it remains under the leadership of founder and CEO René Lacerte.

The company delivers its services directly and as a white label services provider for some of the biggest financial institutions in the country, including JPMorgan Chase, Bank of America and American Express, according to its annual SEC filing.

For the fiscal year ending on June 30, Bill.com reported revenue jumped to $642 million, from $238.3 million for the prior year as its total payment volume rose 56% to $219.1 billion. Meanwhile, its gross profit more than doubled to $497 million, from $176.5 million as the net loss expanded to $326.4 million, from $98.7 million.

The company’s long-term goal is to become profitable and cater to millions of SMBs as it drives adoption of services in a multi-year endeavor, Bill.com executives said during an earnings call with analysts to discuss recent financial results.

Customer demand remained strong despite economic headwinds that include the rising cost of goods and services due to inflation and an increase in interest rates. On the earnings call with analysts, company executives said they’re some weakness with respect to larger customers.

“We did see the larger customer (total payments volume) spend starting to moderate, from a growth rate perspective,” Lacerte said on the call.

Nonetheless, the executives also noted they have instituted some price increases this year and suggested they may have more later in the year.

For the most recent quarter, also ended in June, the company said its net loss widened to $84.9 million from $41.9 million in the year-ago quarter as revenue shot up to $200.2 million, from $78.3 million, according to the recent earnings report.

Bill.com’s biggest costs were for sales and marketing. The company’s headcount has also grown, with 2,269 employees as of the end of June, across three U.S. offices and one in Australia, up 64% from 1,384 a year ago at that time.