Bill.com (NYSE:BILL) shares surged Friday after it smashed consensus earnings and revenue expectations for its third quarter. The company also topped guidance estimates.
The software firm's reported Q3 EPS of $0.50, $0.26 better than the analyst estimate of $0.24, while revenue for the quarter came in at $272.6 million, up 63% YoY and above the consensus estimate of $247.05 million.
The company's subscription fees were $66.7 million, rising 28% YoY, with transaction fees coming in at $172.8 million, up 52% YoY.
BILL shares are currently up 19% at just over $95 per share.
Looking ahead, Bill.com sees Q4 2023 EPS from $0.39 to $0.41, versus the consensus of $0.23, with revenue for the period between $277 million and $280 million, versus the consensus of $267.4 million.
BTIG analysts, reacting to the report, said BILL rebounded nicely as the results show the "resilience of BILL and strength of Divvy," BILL's corporate spend management business.
"BILL reported F3Q23 results on May 4, AMC, that exceeded our revenue estimates by $24mn for the quarter, and a raise to FY23 guidance, thanks to continued usage of the platform despite overall macro concerns and headwinds SMBs are facing," said the analysts, who have a Neutral rating on the stock.
"Despite the beat and raise, mgmt forecasts customer TPV to continue to be flat to slightly down. While we would have liked to hear about light at the end of the tunnel in terms of TPV growth from Q3 to Q4, we remain Neutral for now until overall conditions improve."
Morgan Stanley analysts, who have an Overweight rating and a $105 price target on BILL shares, said there are signs of SMB stability.
"Stabilizing spending trends and better ad valorem adoption drove BILL's outperformance in 3Q, highlighting the relative resiliency of SMB spending and value of BILL's platform. Better 3Q take rate and a 4Q TPV outlook ahead of expects should help ease fears of risk to BILL's LT structural story," the analysts said.
Wolfe Research analysts stated that the results reinforce BILL's long-term potential.
The analysts raised the firm's price target on the stock to $110 from $100, maintaining an Outperform rating. They wrote: "BILL surprised to the upside across all KPIs after a few quarters of moderating growth.
"Shares were up 15% AMC, and given the breadth of strength in the quarter, we expect follow through n-term, with some offset from ongoing macro considerations."