All right. Ready?
Yeah. Let's do it.
Awesome. Thank you everyone for joining us here. My name is Chris Quintero . I am the Office of the CFO Software Analyst here at Morgan Stanley. I'm really excited to be joined here by René Lacerte, the CEO and founder of BILL. Thanks for joining us, René.
Thanks for having me, Chris. Looking forward to the conversation.
Yeah. Before we get into the interesting stuff, for important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. René, I couldn't think of someone better to talk to about the accounting industry, especially right now. I think we're at a pretty interesting inflection point, especially with AI entering the space. We recently held a webinar with a MIT professor of accounting, and she said that 50%-65% of an accountant's time can now be automated using AI, large language models. A lot of the work they were doing was more kind of manual data entry type of stuff.
I'm curious, is that kind of consistent with what you've heard from your customers, and how do you think about how AI kind of revolutionized the accounting job over the next, you know, three to five years?
I mean, if anybody knows me well, they know that I love accountants, that you're preaching to the choir. Like, the opportunity that we have set out from day one is to enable accountants to be more successful, to be more strategic, and to really help their clients and businesses with capabilities they didn't have before, to eliminate friction, to eliminate hassle. You know, an example of that is, you know, we did a partnership with CPA.com, which is the division of the AICPA, where we've developed this client advisory services. I think, you know, what the MIT professor is seeing is actually the evolution.
Like, we've already taken care of actually making it possible to get the data centralized for the clients so that the accountant can actually now have processes that are rigorous, that have the right set of controls in place, that give the accountant comfort, that allows us to execute transactions. We've already done that. Our accountants today will say that we do help them save 50% of the time. That is preaching to the choir. I think the point is like, well, what is AI gonna do for that? I think AI is gonna continue to just accelerate this transition from accountants doing busywork to accountants doing strategic work. By the way, like, having been an accountant, my grandmothers were accountants, like, nobody likes the busywork, right?
People like doing the busywork only because you get then to have insights and be valuable to the engagement that you have with your clients. What we're already seeing is that, you know, the elimination of the friction points that a business has, that enables an accountant to be far more strategic. I think AI, you know, whether that's us continuing to eliminate the hassle of collecting documents and entering documents and, or eliminate the hassle of collecting the W-9s, and eliminate the hassle of payments and reconciliation, integrating it with the ERPs the customers use. Like, eliminating all that hassle means the accountant gets to come in and now have time to be strategic. Now, I think ultimately, what's gonna be very interesting is using the data that we have.
1% of the GDP goes through BILL, $300 billion a year, you know, hundreds of millions of documents, you know, billions actually in the lifetime of the company. How to use that data to then provide strategic advice toolkit, so accountants can actually start with a starting point. I think ultimately that's probably what the professor was thinking about MIT. Like, all that is coming, and it's gonna be a game changer for accountants.
Yeah, absolutely. Becoming much more strategic, being able to take on more clients, being a greater kind of business partner to the overall business.
It's the fastest-growing part of an accountant's practice right now.
Yeah. Yeah.
is what we do.
Yeah. let's jump into kind of the moat aspect of Bill.com. I think you mentioned this a little bit on the last earnings call when I asked you the question, but maybe for those who weren't on the call, remind us again, like, why do you think Bill is defensible from AI startups' large language models?
I think it gets back to you know, unfortunately or fortunately, I've got a lot of experience now. I've been building software for 30-plus years, and every evolution of building software comes down to kinda three things that I see. You have to have domain expertise, you have to have technology expertise, and you have to have trust. Customers don't do something with you unless they trust you. You know, when I think about the domain expertise, having the ability to look at 500,000 businesses across our platform, seeing how they use our platform or services, seeing how they understand the payments that we offer them, the capabilities we offer there, that gives us a set of domain expertise that is unparalleled. Like, we understand financial operations that others are having to go figure out, right? They don't have that.
We understand that. That's domain expertise. On the technology expertise, it's probably, you know, it's the other half of having the domain expertise. Having a platform that supports half a million and all the connections, we have over 10 different payment products. We have $1 trillion in spend that's come across the platform. Like, having that technology expertise to manage risk, to manage all the integrations that we do, that gives us an opportunity, again, that a young startup doesn't have, because we understand that. Ultimately, both of those work hand in hand to create trust with customers.
Yeah.
I think that the most important thing that you can have with any customer relationship is trust. Having the ability to actually, you know, earn the right to actually move all the money that we move for our customers, to have them store all the documents, to have them use us for all their workflow, integrate with all their accounting systems, like, that's something that we take, you know, very seriously. I think that's something that is a moat, that it takes time to build those things. We've been building it with intentionality since day one, and, you know, we'll continue to add to that platform and expertise every day with the capabilities that we have.
Yeah. Absolutely. You've also said that SMBs don't want more AI, they want less work. How do you think about your agent strategy and the ones you've launched, you know, W-9 Agents, Reconciliation Agent? Like, what are you trying to go after with this strategy of these very kind of specific, like, use case agents?
Well, I think, you know, one of the things we're trying to do is just to really eliminate work that was being done manually. Another thing we're trying to do is to eliminate, you know, any friction in what we already have, right? There's lots of different things. The BILL W-9 Agent is an example of if you think about our network, we have a unique asset. We've got over eight million entities in the network that use us to pay and get paid, and we have this opportunity to take that network and actually engage customers and suppliers in different ways. Whether that's Supplier Payments Plus, which I'm sure we'll talk about, or a BILL W-9 Agent, they're very similar. It's part of the same experience. Like, what is the supplier experience that needs to happen?
The BILL W-9 Agent is, "Hey, let's go out and collect the W-9s for a new vendor that's gonna get paid through Bill.com." When you go and do that collection, customers don't have to do any work. The supplier has very little work to do. What we're seeing is that it's early days, but we have over around 10,000 businesses that have already started using it. They've done over 40,000 W-9s. We expect, you know, in the coming years it's gonna be, you know, close to three million W-9s that we'll do. We think there's a unique opportunity for us to take, you know, what is work and actually just eliminate that.
Another example is our BILL Assistant, where, you know, self-service is a super important part of any customer experience, and our ability to actually drive AI efficiencies where customers can actually have the time and the ability to do the service when they want, that's gonna be important. We've, you know, developed a tool. Not all customers have it yet, but for those customers, we had a 3x improvement from, you know, 13% usage to over 40% doing self-service. That tells you, like, the opportunity to really kind of save, again, customers time and let them do work when they want. The third example I'd call out is our BILL Invoice Coding Agent, which allows our customer now to go into all the line item details on invoice.
You know, big invoices have a lot of details, and if we can go in and extract all that data, that means we save customers 90% of the time it takes for them to go enter that data. Significant examples of how we're just eliminating work for our customers, and that leads to opportunities to drive either more customer adoption or more revenue in the future.
Yeah. Driving some pretty tangible, real results for your customers here. You mentioned it a little bit, but, like, how is this also impacting customer usage, you know, adoption of the broader platform you all have now?
What we're seeing is that there is a, you know, significant opportunity from customers to be able to, you know, save time. What we're seeing is in our conversations with accountants, for example, like, they're now, to their first question yet, they now see kind of a maybe the next chapter in the book for them. These tools enable them to say, "Okay, I wanna partner with BILL." We have other partnerships we've done to kind of continue to extend the network and the capabilities, whether that's NetSuite, Acumatica, Paychex, really, like, these are all capabilities for us to kind of bring more into the fold. Using AI to actually be the way that we actually drive customer elimination of friction is something that everybody's interested in, and customers are, you know, starting to use it, which is great.
Yeah. Results, usage. How do you think about the monetization angle of this too? I think you guys have talked about a two-pronged kind of approach to it. Could you kind of unpack that and why did you kind of take that approach?
I think, when I started the company, it was all about serving, you know, SMB, mid-market companies and really eliminating, making it simple to, you know, connect and do business. That's the mission statement. When we look at the opportunity in front of us, it's always gonna be, let's do the most to bring people in, and let's do things to raise revenue per customer. We do both at all times. The two-pronged approach is there are gonna be tools that we do that will bring people in, and it'll just be part of the base subscription pricing that we have. That's kind of the more tactical. The next level will be when we start to think about roles that we're actually supporting or eliminating, the need to go do.
When we have roles, we think there's an opportunity for us to either put subscription pricing into different tiers to actually raise the revenue per customer that way or potentially charge separately for that. Then the third area would be strategic advice, and that will be us charging, you know, for the advice that we're giving. I think each of these things, I think the important thing is that, you know, having an intentional plan, a pricing strategy that works across all so that you bring as many customers into the fold. I mean, we have, you know, roughly 0.5 million businesses. There's, you know, there's tens of millions. There's 6 million employers in the U.S., and there's a lot more to go get.
Our focus is on how do we actually drive that adoption, 'cause that's the first thing that we wanna do.
Yeah. If we take a step back, you know, I mentioned the platform you all have built. Walk us through that journey of, you know, starting out as a AP provider. You build out this broader platform, inorganically and organically. Where are we today, and how do you think about the future evolution of that platform going forward?
Yeah. I think the original idea comes from being, you know, a small business owner and entrepreneur and seeing the pain points real time and experiencing the challenges that SMBs have when it comes to managing their finances. It was different. I was a product manager out at Intuit, and I didn't see it. Then I started living it. I started running a company. I started actually seeing all the things that were hassles and pain points that were the same things I would hear my parents and grandparents complain about at the dinner table 'cause they had a lot of businesses. And the aha for me was this is an opportunity to actually flip that to actually get into the doing of business, right?
Like, we have a chance to make running a business about being with your customers and being with your employees, and not about doing business. Like, BILL can do the business. Like, we can be the doers here. When I think about the platform, how we started was, you know, let's look at the, you know, what our ideal customer profile is, and let's look at those customers that are big enough to need to have a pain point and see it and, you know, not so big that they already have teams doing it. That focus area was let's focus on AP. Let's focus on cash in and cash out, right? AP, AR, and then as spend and expense category evolved, we added the spend and expense capabilities onto the platform.
As we've had more data, we've been able to add some of the lending capabilities, the working capital, invoice financing capabilities, you know, international payment capabilities. We've been able to extend our core platform around payables and receivables into much more. I think over time, what you'll see from us is continuing to leverage the data set that we have, the capabilities we have around, you know, technology and the domain expertise we have about what customers need into more and more adjacencies that are, you know, next to the platform that we've already built.
Yeah. Let's talk about some of those newer ones you've developed, Procurement, multi-entity reporting, advanced reporting. What's been the kind of the customer feedback to some of those newer solutions you've rolled out?
Yeah. It's been very, very strong. One of the things we did, and this kind of gets back to the pricing question we had earlier, one of the things we did with Procurement is that it was part of a larger tier, you know, more expensive tier for our customers. One of the things that we did is you had to opt in to say you want a Procurement. There's other things you might have opted in for. What we've seen is that we've now had 10,000 customers opt into that tier. That tells you that there's demand and there's desire to be able to have more capabilities because there's more things that customers wanna do with us. That's the Procurement.
On multi-entity, what we're hearing from our customers, again, very strong early adoption, but what we're hearing that it gives us confidence is 30%-40% time savings across all the entities they use, at BILL. That's something that we're super excited about. I just think that, you know, we continue to, you know, spend time understanding what the customers want, spend time understanding what the technology capabilities are, and then putting those two together to make better experiences. Though there's more to come, and we're excited about the engagement that we're seeing on these two in particular.
Yeah. I think the build-out of the platform also lends itself well to your move upmarket to more larger businesses, mid-market side of the equation. Can you share with us, like, how you've been evolving the kind of go-to-market strategy and the product portfolio as well to, you know, be successful in that kind of newer segment?
Yeah. Maybe I'll just first, you know, step back a little bit and talk about this ideal customer that we set out from the beginning. When we think about the ideal customer, like I said, it's customers that are complex enough that they have a pain point but not so complex that they've already tried to solve it. You know, that would be customers from a few million to a few hundred million in revenue. That's the largest, you know, segment of the business economy, but it's not all of it, right? Let's say that's 50% of the overall economy.
What we know from what we've done today is that we have very strong, better than market adoption rates of those customers, meaning that if you would expect, you know, 5% of customers to be X, we might be 7% of customers being X because we have the right product market fit, or it might be 10%. Anyways, what that tells us is that we have very strong fit with those businesses that are just, you know, not so small that they don't need us, but they're getting bigger. What we've been able to do on the mid-market approach is actually listen to the customers about what else that they needed.
Whether that was multi-entity, whether that was procurement, those are the most recent examples, whether that's integration with, you know, different, capabilities and actually the partnerships we've done with Acumatica and NetSuite, those are examples of larger businesses saying, "Hey. We kinda want more to happen here." Like, these capabilities of being able to kinda listen to customers and really drive the opportunities, you know, into what they're asking for allows us to continue to expand our abilities and really the revenue per customer, you know, we're seeing across all of our mid-market customers.
Yeah. Curious, like, what metrics are you really most focused on, and what's your kind of north star? Is it, like, NPS score? Is it something else? Like, what are you mostly focused on from a metric perspective to, you know, make sure you're, you know, retaining customers and, and driving expansion with existing?
I mean, the first metric that, probably, any business leader thinks about is top line, so revenue. Second would be profitability. You know, those two go hand in hand together. From a pure customer, adoption, there are so many different metrics, but I would look at our kind of our net revenue retention, the logo retention rate over time because that's the best. It's not, it's not quite, you know, it's not. The leading indicators of a new customer are not the same as one that's been on the platform for six months. We look at that on a consistent basis.
Got it. You mentioned a little bit about the pricing and packaging, how do you think about the phasing, the timing, the rollout of, you know, some of these changes that you're making as you continue to add more and more value into the platform?
I think the, you know, our focus is always gonna be on listening to customers and doing what's best for them and driving the results from that. We have done some price adjustments, if you will, over the last year, first on transactions and now on subscription revenue. We have a broad pricing strategy, I would expect as we roll that broad pricing strategy out over the next year or so, that we'll be able to talk more about that.
Got it. Wanted to hit on Supplier Payments Plus or used to be known as Advanced ACH. Maybe give us a quick overview of what this product does and why you, as BILL, are best positioned to really deliver this capability.
Yeah. The first thing, that the suppliers need is simple reconciliation.
Mm-hmm.
If you think about the large suppliers, and we've said Supplier Payments Plus is targeted today for the, you know, the top 10,000 on our network, those suppliers are receiving thousands of payments from BILL customers. Their AR departments are having to reconcile those payments, and those payments, by the way, come in a multitude of factors, form factors. It could be a check, it could be an ACH, it could be a card payment. What that means is the reconciliation job just got harder for any one of those particular payments.
Having a tool, which we built a platform for suppliers to be able to manage all of those payments in one experience, to be able to manage their own users on that platform, to be able to engage and get what they want, to potentially, you know, sync that with their accounting platform, all of that means that they're able to be much more efficient, and they're very happy about that. Now, what makes it unique, which is the second part of your question, is that we have scale. You know, from a B2B perspective, and the amount of payments we do on the B2B front, we think we're unique. We don't see anybody else doing the amount of volume that we have today.
When we work with suppliers, the number of entities that we support, the dollars that we transfer, like, that's all something that they care about. What we're finding as we work suppliers is that they most want to get rid of checks. Everybody hates checks. There's still plenty of checks out there, so they want to get rid of checks. They're comfortable, you know, and want to pay for the service we provide, whether that's an ACH or a virtual card. We've seen consistent feedback from our suppliers that, like, this is an opportunity for them to be more efficient and for them to pay us. We're excited about that. It's early days. We have $400 million in TPV that we've already contracted in the first 6 months, which we feel good about.
There's a significant opportunity when we look at the, you know, the tens of billions of dollars that these suppliers have.
Really leveraging that network that you have, the large SMB customer base with those suppliers that they send those payments to. How do you think about the go-to-market strategy, you know, going after the supplier for the first time versus, you know, the typical kind of SMB customer you have historically? What's different about that go-to-market strategy?
It is. It's, it is different. It's an enterprise customer, so a little bit more handholding, more sales touches, different marketing is required. That's all the things we've been working on the first 6 months. We feel good about what we've learned. Like we said, we've gotten some adoption, and we'll be able to take that adoption forward into getting more suppliers on the platform. It's helpful when people see kind of the success that others are having. We feel, you know, like there's an opportunity to continue getting better, and an opportunity to obviously, you know, bring more revenue into the business.
Yeah. How do you think about the sales cycle length for those customers? Is that like a 6-12 month type of cycle?
I mean, enterprise would typically be more than six, right? That's probably the right timeline that we're thinking of.
Yeah. Anything on pricing you can give? You know, you have a bunch of different payment products. How does SPP kind of match up versus those others?
Yeah. I think the If you look at similar products in the market, you know, what we have said in the past is that the monetization is somewhere between 50 and 125 bps. We're consistently in that range. you know, obviously it's not gonna be at the high end, it's not gonna be at the low end. It's gonna be somewhere in between. it's a significant opportunity and, you know, like I said, we're learning with the large suppliers. We think the smaller suppliers, there could be some capabilities for them that we learn from this that will help them-
Mm.
as well.
Got it. Shift gears to go-to-market strategy with Embed 2.0. Could you give us a quick overview of what that is for those who aren't familiar? How does it exactly work?
The Embed 2.0 capabilities that we have basically enable any of our partners to take advantage of, you know, the products and services we build. The primary things that folks are wanting to take advantage of are the connection to the payments capabilities. Our ability to kind of have, you know, payments inside of NetSuite, payments inside of Acumatica, means that it's easier for the customer to be able to execute and transfer funds to the supplier, whatnot. What we've been able to do, you know, is on like from a technology perspective, leverage the first 10 years of partnering with banks and others.
Mm.
to be able to create a platform that each of these partners, Paychex, Acumatica, and NetSuite, all got up and running in less than 90 days. That gives you a technology expertise that we've been able to develop that is super important. The other thing I would say is that these partnerships really enable us to extend into different adjacencies, right? If you think about the Paychex with, you know, has close to 1 million businesses on its own, our ability to kind of reach into all of those payroll companies-
Mm.
that tend to be smaller
Mm.
is much stronger, because we have a great partnership. In that embedded partnership, they're taking all of the capabilities of BILL, the workflow, the document management, all of that, and creating an experience inside of, you know, a new platform that they've built.
Yeah.
I think there's lots of things that we're excited about with Embed, like we're trying to be able to support our partners with what they want from us. One last thing I would say on this is that different than our first version of Embed, this version is all of our customers, partners are getting access to all of our payment products, from day one. They won't all use all the payment products day one, but they all have in their contract and have told us that they want to use all the payment products. It's just a question of when they, you know, are ready to kind of open up some of that stuff.
Yeah.
It's a good thing from a monetization perspective.
Totally. You've been, you know, announcing a lot more of these partnerships over the past few weeks. You've got Acumatica, Paychex, NetSuite. Those are live now.
Mm-hmm.
How do you think about the early traction you're seeing there? You know, what are the kind of economics look like? Is there kind of a rev share program? You know, when are you expecting this to be more of a meaningful contributor? It's like the overall growth profile of the company.
Yeah. No, it's so far the early data is that customers are very happy. They are enjoying the products, high NPS scores, which is this is when you would use NPS as a leading indicator to kind of help understand if you're getting the right product market fit. We feel good about that. We're seeing data on the platform, but now we're busy working with the go-to-market teams of each of those firms to really help them roll this out to all their customers. I've done enough and worked enough with partners that I don't expect home runs out of the gate because that would be unreasonable. Like, it takes time to train sales teams to get the right go-to-market message.
I would say, you know, we will continue to, you know, develop this and I would expect not this year, but I would expect next year we'd start talking more about the financial impact on the results from these partnerships.
Fiscal year or calendar year?
Yeah.
Both.
Well, 2027, yeah.
Gotcha. Let's shift to competition. We've seen some consolidation in the industry. AvidXchange got acquired, you know, Capital One purchased Brex, all kind of in the space here. Curious to, from your perspective, how you view that kind of industry consolidation, evolution, from a competitive standpoint and how do you continue to stand out?
Yeah, I think, you know, at a... When I step back, one, I set out when I started this to redefine how business gets done, and we've done that. BILL's done that, right? These companies, they weren't doing what we were doing. Other bigger players are now coming and saying they want to be a part of that. That tells me the category is evolving, it's maturing, that there's gonna be an opportunity for even more customer adoption because larger players are saying, hey, that they're coming after this. We, and from day one, we've focused on building, you know, the best tools and capabilities to be, you know, a public independent company. We continue to focus on building those capabilities out to be able to serve our customers, as many as possible.
You know, what I see from a competitive standpoint is that we continue to see more and more opportunities. You know, while there are more competitors in the space, we're seeing more opportunities, you know, by extending our platform, by actually reaching the close to 10,000 accountants we have and leveraging that network. I mean, all these things give us an opportunity that we didn't have before. Like, you think about the NetSuite and the Acumatica and Paychex deals, those weren't deals five years ago that those companies, they would take a call from me, but they wouldn't actually engage.
Mm-hmm.
This is, I think, just a reflection of the competitive space, is that there's more awareness. People are excited about the space, and that's actually good for customer adoption. That's good for the business.
Yeah. Let's talk a little bit about the numbers. core revenue growth accelerated from 14% in your fiscal Q1 to 17% in Q2. Can you walk us through kind of what's driving that acceleration and how sustainable you think that can be for the rest of the fiscal year?
Yeah. No, I think it's always happy when we have good results. Obviously, we've spent a lot of time working on that, not just today, but, you know, for the future. One of the examples here is the emerging portfolio of Avalara payment products. When we look across our, you know, our business, we've got, you know, 10 different payment products that customers... a little bit more than 10 different payment products customers use to, you know, to execute their payments, and each one of those has a different attach rate and a different monetization. We're seeing good adoption. Invoice Financing is an example I talked about. We have a product called AP card, which is when you have the S&E card with BILL, you can actually do virtual cards inside for your payables.
We have a Pay By Card product. These, you know, emerging payment products are actually having an impact, which is great. Then I would say the other part that we saw in the quarter was strength in the spend, on an S&E perspective.
Mm-hmm.
You know, it was a, it was a strong you know, volume growth, you know, in the quarter. That's in part due to the focused efforts from the teams on driving usage and adoption, helping customers understand that, getting the right customers on the platform to begin with, and that's something that, you know, we're, you know, very happy with. You know, we've had an opportunity now because of the success to, you know, you know, raise the guidance, which we feel good about. To really continue to drive financial success, you know, for the business this fiscal year.
Got it. Emerging products starting to contribute more meaningfully, and on the spend and expense side, some of that push up market, a little bit better spend as well, from an overall macro perspective. Move on to kind of margins, capital allocation. You know, you've mentioned Rule of 40 as a key operating metric for the business here. Why'd you go with that framework, and how do you think about getting to that type of operating profile?
Well, I said the reason we like the Rule of 40 is it balances growth and profitability, and I think it's really important in a business, especially a business that's in, you know, at our stage of market development, right? We're the largest player and, you know, roughly if you look at our AP spend expense business, you know, we probably have, you know, 4% or 5% of the market, right? There's a massive market to go get, so we should be holding ourselves accountable to driving more growth. You know, given our size, we should be holding ourselves accountable to driving more profitability. I think the Rule of 40, what I like about that is kind of a balance of the two.
I think it's super important for us to make sure that we invest behind both. You know, from an AI perspective, we are investing behind things that drive more customer adoption or drive more revenue potential, but we're also investing behind things that will create more efficiency in the business, so we can drive more profitability. You've seen that in the business, right? We've, you know, the something I am super proud of, you know, in the last You know, I guess since we went public, we've 16x the revenue. We've added 300 bips pretty much every year to the profitability margin. We've kept headcount flat for the last four years.
Like, I think are doing a good job at balancing growth and profitability, and people don't always, I think, see that, but I think it's something that's super important to do.
Yeah. Let's bring in, like, M&A, just capital returns too into that equation. How do you think about those for BILL?
Yeah. I mean, I think we are a well-capitalized business. We have a lot of capital to put to work. The first and foremost that we're focused on right now is actually driving great customer experiences, and we're investing behind AI to kind of do that, drive great go-to-market experiences and the partnerships. We're investing, I think, more in the stuff that we have control of, but we are always, you know, evaluating, understanding opportunities...
Mm.
To partner and do an M&A. Nothing to say at this point in time, but I think we are well-capitalized to take advantage of that. We've also wanted and have done some capital returns to shareholders by doing some stock buybacks. We've been active, I think each of the last few quarters, taking advantage of, you know, the capital we have to make sure that we provide a return to shareholders on that front.
Yeah. I wanted to ask about stock-based compensation. It's not just you, but, you know, the entire software space is down pretty meaningfully over the past, you know, six months, year. How are you thinking about stock-based compensation going forward? Are you gonna be issuing more units, you know, because the stock's down where it is, or, you know, moving more compensation to cash? How do you think about that equation?
Yeah. I mean, this is a, it's a real thing, and it's something that we do think about and talk about, not just at the exec team, but with the board. If you look at the progress we've made over the last few years, we continue every year, again, to make progress, significant progress every year on driving stock-based compensation as a lower % of overall revenue, as well as, you know, keeping dilution consistent or lower as well. From our perspective, you know, one of the things we did last year is we did some kind of one-time adjustments to the grant, you know, cycle, to kind of, you know, help things this year.
We'll continue to make, you know, adjustments, but I think the one thing folks should know is that we're committed to bringing that down to be, you know, I think, you know, leading in how that reflects across the business. It's gonna take time, but it's something that we have been doing, I think, a good job of so far.
Yeah. Maybe last question here. As you reflect back on 2025, what were some of the key lessons you learned in terms of, you know, what worked really well and what are some areas you're still looking to improve upon?
Yeah. That's such a great question. I think the key learnings, I think, are, you know, leaning into the strengths, I mean, which obviously, you always do. The embed partnerships that we've been able to get because of the domain expertise, the technology expertise, and the trust we have in the market, I think, that's one example. I think leaning into accounts where we continue to have strong success there. I think leaning in on the technology platform. Like, I don't think people fully understand the complexity of what it is that we do, and that's good. Customers shouldn't understand it, but I also think investors don't understand it. Like, the number of touch points we have, 1% of GDP goes through BILL, billions of documents, hundreds of millions of transactions.
Like, that's a crazy amount of data to actually manage and protect and secure, and we do all of that in a way that enables us to have lower risk across the business day in and day out, we keep driving efficiencies there, as well as driving new AI capabilities. I think when I look back at 2025, we did a very strong job of leaning in with the assets that we had and actually made significant improvements on an agentic front, if you will, significant improvements on a business model front when you think of the risk models and capabilities, and significant distribution opportunities. Those are things that, you know, I think not always appreciated, but it comes back to those three buckets of domain expertise, technology expertise, and trust with your customers and partners.
Absolutely. It's an exciting time for both the industry and BILL. I think we end it there.
Okay.
Thank you so much, René.
Thank you, Chris. Appreciate it.
Appreciate it. Yeah.