By Emily Dattilo

Shares of Bill Holdings spiraled after the financial platform for small and midsize businesses easily beat quarterly earnings estimates but disappointed on an industry metric.

For its second fiscal quarter, the company reported adjusted earnings of 56 cents per share, beating Wall Street's call for 47 cents, according to FactSet. Total revenue of $362.6 million was above the consensus estimate of $360.1 million.

For its third fiscal quarter, Bill Holdings forecast revenue between $352.5 million and $357.5 million, while analysts had penciled in $360.3 million.

For fiscal 2025, the company now estimates revenue between $1.454 billion and $1.469 billion, while analysts had anticipated $1.46 billion.

Bill stock fell 32% to $65.14 in premarket trading Friday.

Susquehanna analysts James Friedman and Spencer Anson, who rate the stock at Positive with a price target of $81, offered a possible reason for the decline. The company's second-quarter results were hit by strength in the U.S. dollar which tends to weigh on cross-border volumes as suppliers prefer to be paid in U.S. dollars.

"This weighed on take rates by 0.3 bps," the analysts continued. "The stock trades in part on take rates, hence the sharp sell-off in the shares. We generally view the FX effect as transitory." Take rates are the portion of total payment volumes, or TPV, the company keeps as transaction fees.

Needham analysts led by Scott Berg, who rate the stock at Buy with a price target of $100, offered a similar perspective, arguing that a return to first-quarter take rate levels may take two quarters.

"Nevertheless, stable customer growth, TPV/customer growth, and transaction count deserve attention, suggesting sales trends remain robust and macro headwinds are in the rear-view mirror," they wrote.

Write to Emily Dattilo at emily.dattilo@dowjones.com

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February 07, 2025 09:02 ET (14:02 GMT)

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