Bill Holdings (BILL -7.02%) is a software-as-a-service, or SaaS, company that provides a platform for small and midsize businesses to conduct their financial operations.
For example, customers can automate accounts payable, manage cash flow and expenses, connect with customers and suppliers, and much more. It leverages AI technology to maximize the capabilities and efficiency of its platform.
Bill Holdings' revenue grew sharply during the COVID-19 pandemic as businesses invested heavily to automate processes, but its growth rate has since slowed a bit. However, the stock is around 85% below its all-time high at recent prices despite a large market opportunity and a revenue growth rate above 20%.
NYSE: BILL
Key Data Points
There's a lot to like about Bill Holdings
To be sure, Bill is down for some good reasons. For example, customers from the beginning of fiscal 2024 were spending less with Bill by the end of the year, which we can see in its net dollar-based retention rate of 92% -- a significantly lower mark than most other SaaS companies.
On the other hand, Bill is still growing rapidly, with 22% year-over-year revenue growth in fiscal 2024 (which ended in June). The business has an 85% adjusted gross margin and a 17% adjusted operating margin, and over 480,000 businesses rely on Bill's solutions.
There's also a massive market opportunity. While 480,000 businesses sounds like a lot (and it is), there are 34 million small and midsize businesses in the U.S. and over 72 million globally. The need to automate complex processes isn't getting any smaller, and Bill continues to invest in innovation, adding new products and capabilities to its platform to create more value for its customers.
Expect a roller-coaster ride
Bill's stock has been rather volatile. In the past five years, Bill has traded for as little as about $27 per share or as high as $349. And it's likely to be a turbulent stock for the foreseeable future. However, if the company can continue to grow at a rapid pace and take share of its addressable market opportunity, it could have a very bright future ahead of it.
