Bill Holdings (BILL) Leans On AI To Power Its Next Chapter

Bill Holdings (NYSE:BILL) reported strong fiscal fourth-quarter results on August 19, demonstrating the potential for AI-powered growth. Core revenue climbed 16% year-over-year to $400.5 million, but the significant growth was reflected in non-GAAP operating margin, which expanded 860 basis points to 23%. The company's AI agents are driving this success, with over 175,000 businesses now running financial tasks through Bill's AI.

The adoption of Bill's AI agents is evident, with more than 40,000 organizations using the W-9 agent, which collected over 240,000 forms without manual customer work. Additionally, the invoice coding agent, live since February, is utilized by over 60,000 companies, reducing coding steps by roughly 90%. The touchless transactions agent, generally available since April, has automated more than 7 million transaction fields for 30,000 customers.

These AI-driven workflows have already been adopted by customers, contributing to the impressive financial results. Management expects GAAP net profit to exceed $125 million in fiscal 2027, a milestone the company has never achieved before. The company is also benefiting from reduced stock-based compensation and restructuring moves, generating about $110 million in gross savings.

Bill's focus on AI and a leaner structure could make it a profitable entity while preserving its growth potential. However, challenges remain, such as the slower-than-expected growth in new customers and the ongoing reshaping of the bank channel. Despite these concerns, Bill Holdings' forward price-to-earnings ratio of 14.29 seems affordable for a company targeting double-digit revenue growth and expanding margins.