Thank you, everybody, for joining us. Appreciate the time today. With us, we have John Rettig, the CFO of Bill.com. John, I know that we've known each other for years now, but just for those in the audience that may be a little bit less familiar with Bill, if you could give us a quick overview of the company, especially it's changed a lot since the IPO, I think that'd be really helpful. Sure. Good place to start, for those that might be new to Bill, we're leading financial operations platform for SMBs. That means we help automate things like the really exciting, sexy stuff in businesses, accounts payable, accounts receivable, more recently, spend and expense management. Basically, we help businesses go digital. Most SMBs today are still analog. They use legacy manual paper-based systems. It's hard to believe because so much in consumer financial operations, payments and things like that have gone digital. That's not the case for SMBs. We started with one of the hardest problems, which is to take manual processes and digitize them. It's not so much about a transaction, but all the things that go into a transaction. Our tools help small businesses go from paper invoices to digital. We have AI and machine learning capabilities that extract data from all the documents that a business uses when doing business with buyers and suppliers, and we take that data, and we intelligently route it for approval. We code it so that it can sync with the accounting system, and then ultimately, by automating the processes involved in these transactions, we get to do payments for businesses as well. Both buyers, you know, payment transactions to suppliers, and suppliers also elect different payment methods. The foundation of our, of our business is really subscriptions to this platform that we've built. Along the way, we've done a ton of innovation around payments. We've launched a bunch of new products. We help remove friction between buyers and suppliers, that's led to significant monetization growth for us and transaction revenues. Today, we're actually more of our revenue comes from the transaction side of things than the subscription side. The core of what we do is really around process automation and helping businesses go digital, and then payments, they come along with that as opposed to the payments being the thing that we do. Great. I think that's really helpful. You know, I want to touch on some more big picture strategic elements, but just given what's going on in the world right now, I wanna touch maybe on the short term ahead of that. The F3Q numbers were much better than what you guided for, I think, than what investors anticipated. On the other hand, you call that that's still a tough environment. Can you maybe talk through where you're seeing strength and weakness in your end markets, and what are areas where you're still seeing really good growth? Yeah. One of the unique parts about having a really large customer base, over 400,000 businesses use one or more of our solutions, and we have 4.7 million network members. There's a many to many situation going on with transactions. That produces this great data set, this data asset that gives us visibility into what's happening with our small business customers. Starting in probably last June, we began to see a change in spend patterns, primarily with larger businesses back then. Then through the second half of the calendar year, it kinda touched all size businesses, including, you know, small companies and across all spend categories. We saw some pretty significant abnormal seasonal patterns in the December quarter, where you normally see a big spike in spending, driven by e-commerce, advertising, other things that are typical for that December season, we didn't really see that. We saw a very small sequential growth in TPV. We were expecting that that was really a sharp beginning to the macro cycle impacting small businesses, it would continue for some period of time. Our estimates for the March quarter suggests a pretty significant sequential downturn, the results were much better than we thought, I think it was another indication of how resilient SMBs are. They adjusted quickly, now they're getting to whatever the new normal for them is gonna be. We think that's still a fairly muted spend environment, though. We're seeing some improvement, some growth in spend across categories where there's also third-party data that supports this, like travel, entertainment is a category that small businesses are still spending there. Most of the other categories, they're still adjusting to the external environment. For us, going into the quarter, the current quarter, we said that that probably means flat TPV for the quarter, and it may be on a per customer basis, down slightly. That's still our visibility. Maybe it's roughly flat, maybe it's up slightly, but that reflects in an ongoing adjustment cycle that small businesses are doing. They're not back to the expansion mode yet, where, you know, spend is gonna start to increase. I think that's probably here to stay for a little while, so we're not calling the trough, if you will, in spend behaviors, but it seems like a more stable environment, and we're seeing the beginnings of that with small businesses. Great. You know, I think one of the things that maybe is not as appreciated is the remarkable recurring nature of the transactions and the frequency, but the dollar amount, but also the type. I think just maybe thinking about that and just the general KPIs, just stabilization was key last quarter. Can you just remind maybe everybody how that, what the recurring nature is and what you see generally and what you see maybe more recently as well? Yeah. The thing to remember is that most customers, once they've been on our platform for two quarters or three quarters, they're running the vast majority of their transactions through our solution. That means that they're leveraging our tools to create automation and workflow and collaboration in the platform, then we're getting the transactions that come with that. It's not like a solution where they pick and choose how to use it with certain transactions. The stat that is super interesting is that 80% of the transactions on our platform are repeat transactions between the same buyer and supplier in the prior three months. It's the things that happen when you run a business. You have lease payments, internet connections, utilities, advertising, however it is you're generating demand, those things continue to happen in our platform. We've seen, certainly through the March quarter, we gave an update, a really good engagement with the platform, even though spend is down on a dollar per transaction basis, and that's leading to some of the softness in TPV, engagement is really high. We see that in number of transactions per customer, being really healthy. It's down slightly from, like, the peak during the pandemic, but if you look at it on a seasonal basis and year-over-year, it's pretty consistent with what we've seen. That tells us that the value proposition is still there, for customers, even in an environment where they're adjusting, some of their, you know, expenses and things like that. You spoke to engagement remaining really healthy. The company last quarter saw good net adds. I wanna maybe zoom out and just we've talked about stabilization for SMBs. How would you describe maybe the appetite right now for those that haven't maybe moved over to Bill? What are you hearing from SMBs about adopting back office applications now versus maybe a year ago, and just how do you think about that? Yeah, for a long time, one of the biggest obstacles to unlocking the SMB market and having it mature much faster was really inertia. Businesses continuing to operate the way they did with manual legacy systems and awareness that there's a different way of doing things. The pandemic really changed all that. Like, it was an overnight awareness creator, such that businesses now know at some point they need to adopt solutions to help them not get stuck with anything that might happen in the economy or with their particular business. That was a structural change in the market that I think means the market will mature faster than it was otherwise going to. It doesn't mean that all businesses have adopted these solutions yet. During the pandemic, we saw elevated demand and, more importantly, elevated, like, intent, where businesses wanted to get up and running really fast. Now what we're seeing is significant demand. In fact, in the last quarter, we had our highest quarterly net new customer adds in the history of the company. I'll talk a little bit about why that is in a second with our distribution ecosystem. What we're seeing is small businesses taking longer to decide. The conversion rates are lower than we saw during the pandemic, and it's because businesses are, in large part, distracted with other things, other pressures, other challenges that are happening in their business. It's not a price thing. It's not a number of people who need to decide, like you might have in the enterprise markets. It's really about the distraction factor and businesses being preoccupied with here and now things happening in their business versus wanting to make a change. We're adapting to that. We're increasing the size of the funnel. We're making sure we're targeting the right kinds of customers who are predisposed to adopt now versus later. Overall, we feel really good about the demand environment for solutions like ours. Great. I wanna transition a little bit to one of the top questions we get from investors. You've addressed the Intuit boogeyman already. You get asked about it, so I wanted to ask maybe a slightly different version of the question, which is: Can you just remind us in the many different ways that you're partnering with Intuit, and then what's up for renewal in late June, where investors are focused, maybe? We've had a distribution or referral relationship with Intuit for, I think, north of six years now. We've had an integration via the App Store and API with the platform for much longer than that, as do lots of other companies. We started working with them on the really small businesses, almost micro customers with a simple bill pay product. We transitioned about three years ago to supporting the larger businesses. They look more like the average business that uses the Bill platform, QuickBooks Online Advanced customers. I'd say the partnership, while strong and healthy, hasn't really produced material results for either company. Like, it's not moving the needle for Bill. It's less than 1% of our customers or revenue or any other measure you want, which means it's not moving the needle for, you know, for Intuit or those customers either. We are continuing to rely on sort of the unique nature of our go-to-market ecosystem to reach, not just, you know, QBO customers, but customers with any accounting system, and bringing the sort of power of our platform and our ability to complement the accounting system to those customers. Our arrangement with Intuit expires, I think, in June of this quarter, and I think there's ways, certainly, that we could both work together to create more value for both companies while continuing to serve small businesses. This is where things stand now, and we're super confident in our ability to continue to penetrate the market through our diverse distribution ecosystem, regardless of the relationship with any one accounting system provider. I think I wanna follow up on that because a lot of investors end up talking about Intuit, but you work with several different key financial accounting software partners. It maybe just help us understand when we think about QuickBooks as part of the base versus some of your other notable partners like NetSuite, Microsoft, and so on. We strategy for the business is a horizontal approach. We don't necessarily target specific industry verticals when trying to reach SMBs. We might have tailored go-to-market plans, but our product is built for the horizontal market. The needs of 80% of businesses are about the same, and that's what we build for, as opposed to the unique needs of one vertical. In doing so, we integrate with the accounting systems that 90% of small businesses use, whether that's a version of QuickBooks or Xero or Sage Intacct, NetSuite from Oracle or Microsoft Dynamics. This is where most of the market is. We have other ways of working well with, there's hundreds, thousands of other accounting systems, and we can work with those also, but we have deeper, sinks and integrations, and so we tend to go find customers wherever they are, whether that's through banks, accounting system, accounting firms or whatnot. Then we sit alongside the accounting system, and customers leverage our platform regardless of the other tools that they're using. You mentioned banks. It's definitely been a, I think, interesting year for the financial services sector. There's a lot of concerns, especially around regional banks and some of their struggles, and you work with some regionals. You work with some of the really big, notable, large global banks. Can you maybe just help us understand what you're seeing in that financial institution partner channel right now for the business? Yeah. There's strong interest from financial institutions to get closer to their customers, not just a deposit relationship, not just a credit relationship with the larger businesses they work with, but actually be integrated into how they're operating their business, and that's where Bill comes in. We connect banks much closer to their businesses because they're leveraging essentially the same tools that Bill's standalone platform offers, but they're doing it through their bank. We're reaching them, you know, where they are. We've seen really good traction. We're now starting to work with banks across the whole spectrum of size businesses, where when we first started, it was mostly the larger commercial customers, and now we're seeing good success with small businesses as well. That requires actually us to innovate in ways beyond payments. It's making the product simpler to use and easier to adopt and much more self-service. We're seeing good traction there with banks. We do have numerous relationships, commercial relationships, where our platform's integrated with smaller banks. Silicon Valley Bank and First Republic were two of those, but we have lots of other banks we work with, and I'd say six of the top 10 banks are partners of Bill for our platform. We've done a good job at penetrating the market, and I feel like there's a long way to go to now achieve adoption within these banks. Just, quickly, have you seen any change in the priorities that what you're offering sits in with banks, right? Again, if they're distracted or is it just business as usual from the, from your perspective? Well, there's been a lot of noise the last few months, for sure, that certainly had to be a distraction. If anything, we see as much demand and interest in getting closer to small businesses with banks than we ever have before. Great. I wanna maybe touch on some of the, some of the other parts of BILL's business. Divvy's been remarkably resilient, and I'm curious if you can maybe just help us understand how the technology integration is going and how you're thinking about maybe ramping the cross-sell opportunity there. Yeah. Our spend and expense product that we acquired when we purchased Divvy is really a leader in the market. We looked at the whole landscape before we did that acquisition and figured out where the points of value creation were in this new category of spend and expense, and what we determined was it's about the software. Similar to the Bill platform, similar story, how businesses can transform the way they operate and have much more visibility and control into their corporate card spend, which if any of you've used some of the, you know, traditional players who are great at providing credit, you know, big banks and others, the software is always a little bit lacking and doesn't allow businesses to have complete control, and it's not integrated with their other tools that they use, and that's where the Divvy spend and expense solution comes in. Our primary strategy when we first did the acquisition was to continue the momentum that they had in the market, and I think we've been able to do that. We've also increased monetization significantly, and we've grown our contribution margin on the Divvy business. The next step was around technology integration and bringing the platforms more closely together, such that any new prospect to the business, could come into a front door, whether it's AR, AP, or spend and expense, and then leverage any of the solutions we have. I'd say the cross-sell efforts to date have been focused on those with the highest intent to use spend and expense on a standalone basis. I'd say over the course of 2023, this calendar year, we'll bring the platforms together enough, and we'll start to ramp up the awareness and selling with a unified platform approach, and the product will be available and visible to the majority of Bill customers, where today it's not. We think about, you know, 50% or more of the existing Bill customer base is actually a candidate for the spend and expense solution with the corporate card. Those are the largest 50% of our customers. There's also solutions around expense reimbursement, expense reporting, debit cards, that might be applicable to the entire Bill customer base. We're pretty excited about what that cross-sell motion looks like, and it'll play out over the course of the next year. You talked about expense reports, and my spine shivered a little bit. Hate doing those. Yes. You know, we talked about AP, we talked about spend. Maybe let's talk about the accounts receivable side. Invoice2go has started to see some good monetization trends. I know it's gonna ebb and flow, but maybe just help us understand what you're seeing there and how we should think about that. Invoice2go is an advanced mobile-first AR solution that we acquired with a customer base of around 200,000 really small businesses. Think of a service business that, you know, the owner or an employee is in the field, and they wanna prepare an estimate for a customer, do the work, submit the invoice, and get paid all with a mobile app, not sitting, you know, in the office, you know, behind a desk. That's the promise of this solution. What we're doing is integrating these capabilities into the core BILL platform. In the Invoice2go solution, the features, the functionality will become the BILL solution. We're enhancing what we've done historically with Bill. One of the big opportunities we think is actually, with our network, 4.7 million network members who receive payments from BILL customers, shifting that relationship slightly to more of an AR persona, so they can leverage more of our tools once it's integrated into the platform. As a standalone business, Invoice2go monetized about 4% of their payment volume. It's about $25 billion a year, of which 4% or so, $1 billion was monetized. We think it can be much bigger than that. They weren't necessarily a payments business, and so we've brought some of our payment capabilities to the platform and start to integrate into the platform, and I think we'll see over time, a much higher percentage of the invoice volume, being leverage our electronic payments and our monetization on that. That does require a change in behavior by the existing customer base, and so we think that will play out over time, but we're excited about that. Great. I'm gonna, just in the interest of time, merge a couple of my questions together. You bought a company called Finmark, and I think it makes it more advanced what a customer can do with core Bill once that's integrated in. How should we think about both that specifically, and then maybe more broadly, how that fits into your strategy of maybe getting larger customers over time? Yeah. Finmark is a fantastic. Think of it as a financial planning tool that helps businesses get more visibility, create budgets, do forecasting, and it connects to all of the solutions that a business uses. Bill is primarily tethered to the accounting system, so we pass and pull transactional data back and forth. Finmark integrates with e-commerce systems, payroll systems, any solution that a business uses. It's a complete view of the financial status of a business. I'd say the demand for FP&A tools, planning and forecasting and things like that, is probably fundamentally more with larger businesses, with the mid-market segment. The promise of Finmark in the Bill platform is really to bring light versions of that, cash flow insights, forecasting, cash flow planning, to the masses, to all SMBs in a really easy-to-use way. We expect that we'll have sophisticated versions of these planning tools available for larger businesses, but our sweet spot is really gonna be bringing some of those insights to the smaller businesses and helping the Bill platform transition slightly to not just be a place where transactional activities are optimized and managed, but a place where you actually go to for cash flow, insights, and visibility in running your business. Great. Maybe switching gears. One of the big changes in the last, call it couple of quarters, has been the inflection in margins and the real significant ramp in profitability. I'm curious how you're thinking about that growth versus profitability and managing that, and then just maybe thinking about that in terms of headcount as well, as you contextualize that. Yeah, it's always a balancing act. We don't think it's a one-for-one trade-off, growth versus profitability. We're going after a huge market opportunity. There are, you know, 6 million businesses with employees, another 25 million sole props and even more, you know, freelancers. We've always focused throughout the whole history of the company in getting the unit economics right. How do we acquire customers, keep them, grow relationships, have a good return, a short payback period, and knowing that with scale, we'll be able to achieve profitability and margin expansion over time. That continues to be our focus today. I think we're in a unique position of being a really high growth company, north of 60% revenue growth in the last couple of quarters, and producing really high non-GAAP net income margins with really strong gross margins as well. Obviously, we've had the benefit, the tailwind benefit of the higher interest rate environment and float revenue, which is very high margin. That supported expansion and gross margins. It's obviously generating a big piece of our free cash flow throughout this year. I think it's something that, you know, maybe we've gotten to peak interest rates now, but normal interest rates are still 2% or 3%. If you fast forward and look at our business down the road, we're expecting to continue to be able to scale profitability and margins as we penetrate the market and as we grow the business. On to your question about, like, headcount and that, we have actually scaled back on the rate of expansion in OpEx. We're still growing. We're increasing our expenses quarter-to-quarter, we're doing it at a rate that's much less than our revenue growth, you can see that flow through in our actual hiring numbers. Each quarter, we've been paring back a little bit in hiring, and that's the balancing act. We still have aspirations to build a lot more products and do more things and find more ways to serve businesses. Our mindset is still growth. We're trying to do it in a way that is balancing expanding margins at the same time. Great. I'm gonna end with this. You guys became a billion-dollar company a lot faster than I think anybody in the room thought, and you're still relatively early in your public company cycle. Maybe if we kind of look beyond the current cycle that we're in, and how should we think about Bill over a three to five-year horizon? How are we thinking about that big picture over the next few years? Yeah. I think our CEO, René, has often talked about thinking in orders of magnitude, and so, you know, from $10 million to $100 million, $100 million to $1 billion, and now it's $1 billion to $10 billion. I don't know that that's 3-5 years, but we think it's a massive market opportunity. There's analogies to the payroll space, where the market is so big, there's hundreds of billions of dollars of market cap supporting that market. We think B2B payments is so early, but it could evolve in a very similar way, and it's our, it's our goal to continue our leadership position and build a really big business. Great. Well, John, we'll leave it there for time, but thank you so much for joining us, and we really appreciated learning more about Bill today. Thank you.