Bill.com stock rallies 15% after earnings, outlook beat

By Wallace Witkowski

Difficult to close small- to medium-sized business deals figure heavily in growth strategy

Bill.com Holdings Inc. shares rallied in the extended session Thursday after the business-automation software company reported earnings and outlook that both topped Wall Street expectations.

Bill.com (BILL) shares rallied 14.6% after hours, following a 1.6% gain in the regular session to close at $79.91.

The company reported a third-quarter loss of $31.1 million, or 29 cents a share, compared with a loss of $86.7 million, or 84 cents a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were 50 cents a share, versus a loss of 8 cents a share in the year-ago period.

Revenue rose to $272.6 million from $166.9 million a year ago. Analysts surveyed by FactSet had estimated earnings of 24 cents a share on revenue of $247.1 million, based on the company's forecast of 22 cents to 25 cents a share on revenue of $245 million to $248 million.

"We delivered strong third-quarter results and profitable growth as we executed on our strategy to be the essential financial operations platform for [small- to medium-sized businesses]," said René Lacerte, Bill founder and chief executive, in a statement.

Small- to medium-sized (SMB) businesses have been particularly hard sells in light of a looming recession, one reason why cybersecurity company CrowdStrike Holdings Inc. (CRWD)said back in March it was targeting the SMB market.

Bill.com forecast third-quarter earnings of 39 cents to 41 cents a share on revenue of $277 million to $280 million for the fourth quarter, and hiked its annual guidance to $1.46 to $1.48 a share on revenue of about $1.04 billion.

Analysts had estimated 23 cents a share on revenue of $267.8 million for the fourth quarter, and $1.04 a share on revenue of $1 billion for the year. Previously, the company had forecast 99 cents to $1.05 a share on revenue of $999 million to $1.01 billion for the year.

Year to date, Bill.com shares closed Thursday down 26.7%, while the tech-heavy Nasdaq Composite Index has risen 14.3%, and the S&P 500 index has advanced 5.8%.

-Wallace Witkowski

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05-05-23 0738ET

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