Haven't broken down a 10k in a while.
The market is closed today so let's do one.
Here is the Bill.com 10k in 10 tweets...⬇️
The market is closed today so let's do one.
Here is the Bill.com 10k in 10 tweets...⬇️
https://twitter.com/investing_city/status/1283433572498628610
2/ In June, they bought Divvy for $2.3 billion which has really accelerated Bill.com's growth.
A month later, the company also bought Invoice2Go for $625 million.
A month later, the company also bought Invoice2Go for $625 million.
3/ There are two main aspects to Bill.com's business. The first is: accounts payable (AP) automation
This includes a supplier-specific email address to receive invoices, intelligent bill capture, accounting synchronization and Divvy's spend management platform.
This includes a supplier-specific email address to receive invoices, intelligent bill capture, accounting synchronization and Divvy's spend management platform.
4/ The second part is: accounts receivable (AR) automation.
This includes a simple invoicing platform where customers can easily pay any way they want (ACH, real-time payments, credit card, etc.)
Orders are also automatically synced with leading accounting systems.
This includes a simple invoicing platform where customers can easily pay any way they want (ACH, real-time payments, credit card, etc.)
Orders are also automatically synced with leading accounting systems.
5/ Within these 2 aspects, Bill.com makes money in 3 ways.
1. Subscription fees
- Customers pay $39/month for either AP or AR automation. For both, it's $69/month.
2. Transaction fees
- For each payment, Bill.com takes a small cut.
3. Float
1. Subscription fees
- Customers pay $39/month for either AP or AR automation. For both, it's $69/month.
2. Transaction fees
- For each payment, Bill.com takes a small cut.
3. Float
6/ The combination of subscription & transaction revenue is called "core revenue."
Over the TTM, core revenue made up 99% of overall revenue because interest rates on the float have been so low.
If rates did go up 100 bps, that would be worth $30-35 mil in annual revs (~5%).
Over the TTM, core revenue made up 99% of overall revenue because interest rates on the float have been so low.
If rates did go up 100 bps, that would be worth $30-35 mil in annual revs (~5%).
7/ Transaction revenue is the real growth engine, especially with the Divvy acquisition.
Pre-Divvy, the transaction take-rate was roughly 5 bps. In 2020, there were 24 million transactions that made up $96 billion in total payment volume...
Pre-Divvy, the transaction take-rate was roughly 5 bps. In 2020, there were 24 million transactions that made up $96 billion in total payment volume...
8/ So, on average, a bill paid/received was $4k and Bill.com made ~$2.2 in revenue.
The averages are sort of weird because the take-rate differs for each payment method.
ACH transfers can be as low as 10 cents and credit cards can be as high as 2.9%.
The averages are sort of weird because the take-rate differs for each payment method.
ACH transfers can be as low as 10 cents and credit cards can be as high as 2.9%.
9/ Over the TTM, Bill.com now has 135,000 customers and $180 billion in payment volume.
With the Divvy + Invoice2Go acquisitions, Divvy has added roughly $100 million in inorganic revenue (24% of the total).
Divvy's 2.9% fee has tripled the blended take-rate.
With the Divvy + Invoice2Go acquisitions, Divvy has added roughly $100 million in inorganic revenue (24% of the total).
Divvy's 2.9% fee has tripled the blended take-rate.
9b/ Just a quick note on Divvy. It's a software platform that enables SMBs to control employee spending through physical or virtual credit cards. They make money by keeping a part of the 2.9% interchange fee.
This rake is MUCH higher than the 10 cents that $BILL gets for an ACH.
This rake is MUCH higher than the 10 cents that $BILL gets for an ACH.
10/ Transaction revenue now makes up ~64% of overall revenue (and growing much faster) vs. the 35% that subscription fees account for.
One more interesting thing is that Bill.com has a great distribution strategy through banking partners and accounting firms.
One more interesting thing is that Bill.com has a great distribution strategy through banking partners and accounting firms.
End/ Divvy is a KEY part of Bill.com's growth story.
It is still growing well over 100% and now Bill.com can bundle a powerful spend management platform with their well-distributed AR/AP solutions.
It is still growing well over 100% and now Bill.com can bundle a powerful spend management platform with their well-distributed AR/AP solutions.
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