Bill Holdings shares get a lift from buyback plan

By Bill Peters

CFO describes economic backdrop as 'muted,' but says software company plans 'targeted investments' to help expansion

Shares of Bill Holdings Inc. gained after hours on Thursday, after the business-assistance software company reported estimate-topping fourth-quarter results and announced a $300 million stock buyback, even as its full-year outlook came up short of estimates.

The company (BILL) reported the results as smaller businesses - its main customers - have watched their spending amid higher costs and remain more vulnerable to inflation than their larger peers.

While Chief Financial Officer John Rettig described the market backdrop as "muted," he said the company planned to spend the next fiscal year making "targeted investments" intended to help expand its business.

"We believe these investments will reinforce our industry leadership and position us to deliver significant, sustainable revenue growth and margin expansion in future periods," Rettig said in a statement.

Bill said it expects full-fiscal-year sales of $1.415 billion to $1.45 billion, with the midpoint just below FactSet analyst forecasts for $1.44 billion. The company said it projects adjusted earnings per share of $1.36 to $1.61, compared with FactSet estimates for $2.22. Bill's fiscal year concludes around the end of June.

Its outlook for its current first quarter was mixed. The company forecast first-quarter sales of $346 million to $351 million, above FactSet forecasts for $337 million. But the midpoint of its expectations for adjusted earnings per share - a forecast for 48 cents to 51 cents - was below FactSet estimates for 51 cents.

Shares rose 4.6% after hours. The stock is down 37.8% so far this year.

Chief Exeucutive Rene Lacerte, in Bill's earnings release, said the buyback reflected increased optimism around the company.

"Our new $300 million share-repurchase program is enabled by our strong cash-flow generation and reflects our confidence in our strategy and in Bill as an investment opportunity with significant upside," he said.

For its fourth quarter, Bill reported net income of $7.6 million, or 7 cents a share - contrasting with a net loss of $15.9 million, or 15 cents a share, in the same quarter last year.

Adjusted earnings were 57 cents a share. Revenue rose 16% year over year to $343.7 million. Both figures were above estimates.

-Bill Peters

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08-22-24 2037ET

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