BILL Q2 Deep Dive: Product Expansion and AI Initiatives Drive Revenue, Guidance Reflects Caution

Financial automation platform BILL (NYSE:BILL) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 11.5% year on year to $383.3 million. On the other hand, next quarter’s revenue guidance of $390 million was less impressive, coming in 1.1% below analysts’ estimates. Its non-GAAP profit of $0.53 per share was 30.4% above analysts’ consensus estimates.

Is now the time to buy BILL? Find out in our full research report (it’s free).

StockStory’s Take

BILL’s second quarter was met with a positive market response, as revenue and non-GAAP profitability exceeded Wall Street’s expectations. Management attributed the outperformance to new product launches and increased adoption across its platform, particularly among mid-market customers and accounting firms. CEO Rene Lacerte highlighted the company’s strategic investments in artificial intelligence and the rollout of features like Supplier Payments Plus, stating, “We launched new software and payment products, made strategic investments to drive future growth, and drove significant profitability expansion.”

Looking ahead, BILL’s guidance reflects a more cautious outlook, shaped by external uncertainties affecting small and midsized business spending and anticipated impacts from tariffs. CFO Rohini Jain noted that the company is assuming flat volume per customer, citing pressure on discretionary spending due to tariff-related headwinds. Management emphasized planned investments in AI agents and embedded finance partnerships, with the expectation that these initiatives will gradually accelerate growth as the macro environment stabilizes and product adoption increases.

Key Insights from Management’s Remarks

Management pointed to strong platform adoption, successful product launches, and expansion in mid-market and accounting channels as key drivers of the quarter.

• AI platform advancements: BILL continued to invest in its AgenTeq AI platform, rolling out intelligent financial operations agents aimed at automating routine tasks for small and midsized businesses. Over 40,000 customers now use multiple AI features, and the company processed nearly 500 million documents through AI-powered solutions, resulting in faster bill automation and improved fraud detection.
• Supplier Payments Plus launch: The introduction of Supplier Payments Plus, which streamlines payment reconciliation for large suppliers, was highlighted as a significant product development. The feature enables suppliers to convert paper checks into digital payments, improving cash flow and reducing manual work. Early adoption among national law firms and other enterprise customers was cited as a positive indicator.
• Mid-market expansion: The company saw faster customer growth in the mid-market segment compared to the overall base, reflecting a focus on larger businesses with higher transaction volumes. Management indicated this segment offers twice the payment volume per customer and presents a long-term growth opportunity.
• Accounting channel momentum: Enhanced tools and expanded sales coverage led to a 24% year-over-year increase in net new customer adds from the accounting channel, reinforcing BILL’s position among accounting firms and supporting broader platform adoption.
• Embed 2.0 strategy progress: Management reported progress on the Embed 2.0 initiative, signing a new strategic partnership with a Fortune 500 software company aimed at expanding BILL’s reach through embedded finance offerings. This approach is expected to drive adoption among thousands of lower mid-market and small businesses.

Drivers of Future Performance

BILL’s outlook is shaped by cautious spend assumptions for small businesses, ongoing investments in AI, and targeted product expansion.

• Tariff and spend headwinds: Management expects external pressures, particularly new tariffs, to limit discretionary spending among small and midsized business customers. Rohini Jain explained that this could reduce transaction volume growth and put pressure on take rates, as businesses adjust to higher costs.
• AI monetization roadmap: The company is prioritizing the rollout of AI-powered financial agents, initially focusing on driving adoption and customer value. Management aims to introduce differentiated subscription pricing for advanced AI features over time, with the goal of increasing recurring revenue and improving margins as customer usage grows.
• Mid-market and embed expansion: Continued emphasis on mid-market customer acquisition and embedded finance partnerships is expected to expand BILL’s addressable market. Management believes these channels will deliver higher per-customer payment volumes and drive multi-product adoption, contributing to longer-term growth.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will watch (1) adoption rates and monetization of AI-powered agents, (2) measurable progress in mid-market customer growth and embedded finance partnerships, and (3) the ability to offset tariff-driven headwinds through continued product innovation and expansion. Tracking retention, net new customer additions, and take rate trends will also be crucial for assessing execution against BILL’s strategic priorities.

BILL currently trades at $45.32, up from $41.70 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).

High Quality Stocks for All Market Conditions

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.