Bill.com Q2 2026 Earnings Call Transcript

Bill.com (NYSE: BILL) Q2 2026 Earnings Call dated Feb. 05, 2026

Presentation

Operator

Good afternoon. My name’s Lydia and I’ll be your conference operator today. At this time I’d like to welcome everyone to Bill’s fiscal second quarter 2026 conference call. All lines have been placed on mute to prevent any background noise. After the Speaker’s remarks, there’ll be a question and answer session. Thank you. I’ll now turn the call over to Jack Andrews, Vice President, Investor Relations. You may begin.

Jack Andrews — Vice President, Investor Relations

Thank you. Good afternoon everyone. Welcome to Bill’s fiscal second quarter 2026 earnings conference call. We issued our earnings press release a short time ago and filed the related form 8K with the SEC. The press release can be found on our investor relations website@investor.bill.com joining me on the call today are Rene Lacert, Chairman, CEO and Founder, John Redig, President and COO and Rohini Jain, cfo. Before we begin, please remember that during. The course of this call we may. Make forward looking statements about the future business operations, targets, products and expectations of Bill that involve many assumptions, risks and uncertainties. Actual results could differ materially from those expressed or implied by our forward looking statements. In addition to our prepared remarks, please refer to the information in the Company’s press release issued today, our Q2 26. Investor deck and our periodic reports filed. With the SEC, including our most recent annual report on Form 10K and quarterly. Reports on Form 10Q. We disclaim any obligation to update any forward looking statements. On today’s call, we will refer to both GAAP and non GAAP financial measures. Please refer to today’s press release for reconciliation of GAAP to non GAAP and additional information regarding these measures. With that, let me turn the call over to Renee.

Rene Lacerte — Chairman, CEO and Founder

Thanks Jack. Good afternoon everyone and thank you for joining us. During Q2 we continued to build on the strong momentum of Q1 and delivered a meaningful beat on both core revenue and profitability. Our consistent and disciplined execution against our strategic priorities drove 17% core revenue growth versus last year and an 18% non GAAP operating margin in Q2.

Additionally, we’re seeing encouraging signs of SMB resilience with increasing spend volumes across the platform. Our innovation defines the broad category of how businesses manage their financial operations. We are introducing new products and partnerships that extend our capabilities and reach while delivering durable growth and expanding margins. Nearly 500,000 customers trust bill and use our software solutions to run and grow their businesses with speed, confidence and clarity. More than 9,500 accounting firms rely on our platform and over 8 million businesses are now part of our proprietary B2B payment network. This unmatched scale and richness of data gives us broad visibility across the SMB economy and positions us to both grow and expand the intelligent financial operations category.

We are seeing our massive scale and the deep trust we built across our ecosystem translate directly into value creation. By spanning the critical workflows our customers rely on every day, we are driving higher engagement and more transaction volume across the entire platform. We’ve also continued to strengthen our position with accountants through new offerings such as procurement, multi entity support and advanced reporting in the accountant console. These tools are increasingly important as AI reshapes accounting and more specifically the accounting profession. As the profession adapts to a rapidly changing technology landscape, our foundational knowledge of the back office for SMBs and the accounts that serve them is unique.

This capability, combined with the breadth of our platform is enabling firms to transform their mundane transactional work into high value automated advisory services. We are deeply integrated across many of the largest firms and are best positioned to support this evolution by combining modern workflows, scale and continuous innovation. AI is prompting more firms to adopt and embrace automation and so that they can provide more strategic value to their clients. With Bill already trusted by nearly 90 of the top 100 firms, we’re leading this transformation through innovation by rapidly deploying new AGENTA capabilities to eliminate workflows for accountants and their clients.

A significant part of the value we provide customers is through our world class money moving capability. We are a regulated provider that moves over 1% of US GDP and supports over a dozen payment modalities. Importantly for customers, we also optimize payment speed as a direct result of our proprietary data models and risk engine. Our ongoing investment in integrating software and payments enables us to give businesses a unified real time view of their financial health while helping them maximize their capital and make better strategic decisions. As businesses increase their use of bill, they unlock more from the platform.

Our momentum with multi product adoption demonstrates this. The number of businesses using both APAR and spend and expense grew 28% year over year in Q2. These customers drive significantly more revenue per customer and become stickier as they realize more combined value from the platform. We leverage our world class payment and risk management capabilities to give SMBs what they want the ability to maximize cash flow. Invoice financing is a fast growing emerging payment solution that provides flexible capital exactly when it’s needed, addressing a critical operating need for many SMBs. In Q2, customers using invoice financing grew by nearly 50% year over year and the origination volume increased by more than 30%.

We increased adoption while improving unit economics at the same time, this outcome is a direct result of our powerful AI models and our evolving capability to safely underwrite a wider range of suppliers. Bill Cash Account is another important extension of the overall value we create to help SMBs maximize cash flow at the core. It is an integrated operating account that makes it easier for SMBs to optimize cash flow and gain greater control and flexibility over their financial operations. We see Cash Account as an opportunity to bring billions of dollars of monthly offline spend onto our network, Increasing our Wallet Share early indications since launching in Q2 show that more than 70% of cash account users have increased their spend volumes on our network.

Our embed 2.0 growth strategy continues to show great progress and potential. Last quarter we announced new partnerships with NetSuite, Acumatica and Paychex, and within three months all are in market, demonstrating the strength of our platform and the ability to move quickly. Our Embed 2.0 strategy is purpose built to extend our reach with SMBs and complement our other go to market channels. It allows us to meet growing businesses inside the systems they already use, reduce friction as complexity increases, and deliver a more unified technology stack. With these three partnerships alone, we’ve unlocked the potential to reach close to 1 million businesses, showing how embedded capabilities scale our ecosystem efficiently.

As businesses grow, complexity compounds. Large enterprises solve that complexity by adding layers of people, processes and systems. But for the fortune 5 million businesses that power the economy, growth too often means more manual work, more risk, and more friction. That imbalance has defined this category for decades and is exactly what we are aiming to change. Agentic AI is live across our platform. Today, agents are actively running core financial workflows, eliminating manual work, reducing risk, and improving reliability and accuracy. To date, we have focused on three areas with unnecessary friction vendor management, transaction entry and operational efficiency, and risk management.

First, let me discuss vendor management. Running a business requires spend, and spend requires vendors. Yet managing vendors remains one of the most manual and fragmented parts of finance. Bill’s W9 agent and our new Smart Response Agent autonomously collect tax documents and and manage routine vendor communications, helping customers stay compliant, build trust, and keep money moving without adding overhead. Since launching in Q2, nearly 10,000 customers have turned on the W9 agent and 40,000 W9s have been collected. We recently added new mobile capabilities enabling real time compliance control from anywhere, and expect our W9 agent to collect and automate 3 million W9s by the end of the year, saving thousands of weeks of manual work for our customers.

Second, turning to transactions, Bill sits at the center of how Money flows for our customers and our agents are making those transactions increasingly touchless and intelligent. We are eliminating the manual work required to code, match and reconcile transactions. Leveraging rai, our invoice coding agent can now fully code complex invoices, which reduces the steps required by 90%. We have also expanded our transactions agent with auto generated receipts and Gmail capture, improving visibility while further reducing daily friction. Third, operational efficiency and risk management is critical for both us and our customers. Secure financial operations are core to our platform and a key reason customers trust us to run their workflows.

As businesses scale, risk grows alongside complexity. Our AI powered fraud and risk systems apply deep domain expertise and network level intelligence to protect customers at scale while reducing operational burden. In the first half, our system stopped 5.3 million fraudulent attempts and reduced manual fraud reviews by 40%. We are also reducing operational complexity for our customers through the Build Assistant agent. This agent provides customers with real time automated support. Prior to its introduction, 13% of customer contacts were self serve for customers enabled. With this new agent, self serve rates have more than tripled and now represent 40% of customer contacts.

We have unique capabilities to advance agenta finance. We are embedded in the financial operations of nearly half a million businesses. Our models are trained on insights from more than $1 trillion in payment volume and billions of process documents. Our network gives us unmatched visibility into vendor behavior, transaction patterns and operational risk detection across millions of workflows. This combination of these assets positions us to significantly amplify time savings and efficiency gains for our customers. We’re seeing strong early momentum and as we continue to launch more agents, we believe the impact will compound. From saving weeks and months of work to creating the capacity of entire finance teams, we’re redefining how financial operations scale, enabling SMBs to expand capability and capacity without adding costs.

This is the future we are building so every Fortune 5 million business, regardless of size, can operate with the power of a full finance organization. Bill holds a leading, highly advantaged position in a large and growing market. We built a deeply differentiated platform at scale, powered by proprietary data, established and expanding partnerships and mission critical workflows that are difficult to replicate. We are simplifying the financial lives of businesses in a meaningful way and as a result we are capturing the economic returns of our differentiation. We are very excited about our future. We are executing and delivering against our commitments while proving the durability of our model.

And with that, I’ll turn it over to john.

John Resig — President and COO

Thanks Renee. Q2 results exceeded our expectations with strong execution, operational leverage and improving volume trends across our platform, all having a positive impact on performance. As a reminder, we outlined three strategic priorities for this fiscal year on our Q4 earnings call last August. They are drive growth from our integrated platform, expand and penetrate our addressable market and innovate with AI to create incremental value for customers and productivity for employees. We are making good progress against these strategic priorities. In Q2, we delivered accelerated growth from our integrated platform, most notably in the transaction revenue stream. We are providing highly differentiated payment offerings that customers and their suppliers are adopting.

Here’s one great example. Customers are leveraging our bill dibby card as an alternative to ACH and checks to make traditional AP payments and the adoption is growing rapidly in Q2 volume for these AP card payments grew more than 160% year over year. The reason behind such strong growth is simple. AP customers are realizing more value from this integrated solution including improved efficiency, enhanced reporting and better economics. This offering is also adding to our overall card portfolio growth. In addition, we continue driving awareness and adoption of Supplier Payments plus or SPP from the largest suppliers in our network.

Since its introduction 2/4 ago, early adopting suppliers have committed to approximately 400 million in annual TPV. Several of these suppliers are multi billion dollar revenue enterprises such as a Fortune 500 company that provides workplace and safety products and services as well as one of the largest waste management companies in North America. These enterprises adopted our SPP solution for one key reason we enable automation at scale. Our large AP footprint gives suppliers a single connection into their SMB customer base and SPP provides a secure, trusted and efficient payment receiving experience. We expect SBP volume to be an excellent complement to virtual card payments and also address a significant portion of our ACH volume over the intermediate term.

Turning to our second priority, expanding and penetrating our addressable market. On the AP side, we scaled our multi entity capability so larger businesses can efficiently onboard and manage hundreds of subsidiaries within a single bill environment. We also saw encouraging signals of improving core ARPU among the most recent cohorts within our Direct Channel which reflects our increased focus on larger businesses. As we continue to innovate and create more value from our integrated platform for customers, we are also implementing measures to better align pricing with the value our AP customers realize. As a recent example, we have implemented targeted subscription price increases for new and existing Direct Channel customers.

On the spend and expense side, we’re balancing market penetration with a focus on customer unit economics. Our go to market execution drove consistent customer acquisition velocity and yielded a record high card spend per business of $148,000 in the second quarter. We believe the differentiated experience of our spend and expense software solution positions us well to win in our targeted segment. For example, we consistently hear positive customer feedback on the depth and flexibility of our two way sync capability, our strong controls to manage cards and types of transactions, and the ability to track and categorize expenses.

Moving on to our partner channels, we believe our established accounting firm channel and emerging Embed 2.0 channel are highly complementary to our direct go to market strategy. Today we partner with more than 9,500 accounting firms which collectively drive a material number of our quarterly APA AR Net ads. As we provide an expanded set of solutions to accountants, we believe together we can further unlock market adoption on our embed 2.0 channel. We’re pleased the solution is live and available to customers for all three of our newly signed partners. Over time we expect this channel to meaningfully expand our distribution footprint and enhance our overall embed monetization through ad valorem payment adoption.

To illustrate, one of these partners has recently activated both virtual card and instant transfer payment methods. Over the next several quarters we are focusing on enabling and scaling these partnerships. Turning to our third priority, innovate with AI. In addition to customer facing agents, we are investing in deploying agentic capabilities to improve internal efficiency. We recently introduced a pay for you agent which autonomously executes card payments based on each supplier’s preferences. This is streamlining what was previously a multi step human workflow into a single agent driven process. In transactions where the agent has been deployed, we are already seeing significantly lower per transaction costs.

We believe this agent will also enable payments beyond cards leading to a higher adoption of our ad valorem portfolio over time. In summary, we delivered a very strong quarter. We’re concentrating our investments on the priorities that will meaningfully improve outcomes for our customers and and drive durable value for Bill. With clear strategic focus and strong execution, we’re well positioned to deliver the next phase of profitable growth and expand the opportunity ahead. I’ll now hand the call over to Rahini to provide details on our financial performance.

Rohini Jain — CFO

Thanks John. We are pleased with our business momentum in Q2. These results mark another step forward in growing Bill into a larger, more profitable enterprise. In Q2 we delivered $375 million in core revenue, growing 17% year over year, exceeding the top end of our guidance range. This represents an acceleration of 370 basis points sequentially driven by broad based strength across the business. Non GAAP operating margin was 18%, expanding both sequentially and year over year. The efficiency initiatives we identified this year are yielding Results Let me share some key highlights of our Q2 performance within our integrated platform.

Growth in both Bill APAR and spend and expense accelerated in Q2. Apar core revenue grew 11% year over year. In Q2 we added approximately 4,000 net new customers. We expect this number to trend down slightly in the short term as we enhance our focus on larger customers and take steps to better align pricing with the value we deliver. Early indicators of these actions are positive. As subscription ARPU grew 1% sequentially, APAR transaction revenue was $128 million up 14% year over year. TPV per customer increased modestly, which was ahead of our expectations. TPV on the same store sales basis grew 4% year over year above the Q1 level.

We saw continued spend strength in manufacturing and an uptick in construction. Reversing the trend in recent quarters, APAR Transaction monetization increased 0.4 basis points year over year. Spend and expense revenue totaled $166 million in Q2, representing 24% year over year growth. The revenue upside was primarily driven by accelerated card volume growth and better than expected spend and expense. Take rate Card payment volume increased 25% year over year driven by meaningful spend uptake in advertising, retail and health care services industries. Take rate was 255 basis points driven by volume in higher interchange verticals such as advertising and healthcare services.

Rewards rate as a percentage of payment volume was 133 basis points, up 9 basis points compared to Q2.25. As the initiatives to optimize rewards started to kick in, we saw the rate of increase moderating. This quarter we have updated our go to Market incentive plan to better align rewards programs with our unit economics. Additionally, we are evaluating the contribution margin across the portfolio at the spending business level, making deliberate trade offs as appropriate. Moving on to profitability, non GAAP operating margin excluding the benefit of float expanded 70 basis points sequentially and 290 basis points year over year.

Discontinued margin expansion reflects our ongoing focus on driving operating efficiencies. Turning to the balance sheet, we remain well capitalized to fund strategic investments while returning value to shareholders. During the quarter, we repurchased $133 million of stock as we pursue a disciplined approach to share repurchases. Now. Turning to Guidance as always, we would like to provide a few assumptions upfront that underpin our guidance. First, on the APAR side, we are now assuming modest growth in payment volume per customer in fiscal 26. We are reiterating our previous expectation for take rate to increase from the Q2 level in second half of fiscal 26.

For the year, we are reiterating a 0.4 basis points expansion. Second on spend and expense. We now expect card payment volume to grow in the low 20% range year over year. We continue to expect the take rate to be slightly above 250 basis points for the year. For fiscal Q3 26 we expect total revenue to be in the range of 397.5 to $407.5 million and core revenue to be in the range of 364.5 to $374.5 million, reflecting 14 to 17% year over year growth. On the bottom line for Q3 we expect to report non GAAP operating income in the range of 62.5 to $67.5 million.

We expect non GAAP net income in the range of 60.5 to $64.5 million and non GAAP EPS to be between 53 and 57 cents. Shifting to full year guidance for fiscal 26, we now expect core revenue to be in the range of 1.490 to $1.510 billion, reflecting 15 to 16% growth year over year. This is approximately 170 basis points higher than our previous guide. We expect float revenue of $141.5 million, an increase of 7.5 million compared to prior guidance driven by higher expected yields on funds held for customers. We now expect total revenue to be in the range of 1.631 to $1.651 billion.

Turning to the bottom line, we expect non GAAP operating income in the range of 274.0 to $286.5 million. This represents a non GAAP operating margin of approximately 17%. Our updated operating income guidance implies a year over year margin expansion of more than 320 basis points excluding the benefit of float. Relative to our initial fiscal 26 guidance, this updated outlook reflects more than 130 basis points of additional margin improvement. We expect non GAAP net income in the range of 267.5 to $277.5 million and non GAAP EPS to be between $2.33 and $2.41 for fiscal 26. We now expect stock based compensation expenses to be approximately 255 million do below our previous guidance as we diligently manage the use of equity to attract and retain talent.

In closing, we accelerated core revenue growth and strengthened our margin profile, proving that our disciplined investment approach and improved execution are Delivering tangible results. We are extending our differentiation across mission critical financial operation solutions. This will enable us to both price to value and deepen customer relationships. The breadth of our platform and scale of our payments network reinforce our position as a trusted long term partner to SMB. We are highly confident in our strategy to extend builds category leadership and deliver a durable attractive financial profile. And now we’ll open up the call for Q and A.

Question & Answers

Operator

Thank you. Please press star followed by the number one. If you’d like to ask a question and ensure your line is unmuted locally when it’s your turn to speak, our first question comes from Chris Quintero with Morgan Stanley. Please go ahead. Your lines open.

Chris Quintero — Analyst, Morgan Stanley

Hey Renee, John Rohini, thanks for taking the questions and congrats on a solid quarter here. I want to ask the main question I think all of us have been getting from investors recently is how at risk is Bill from AI disruption from your perspective at a very high level, what is your competitive moat and how is that defensible against AI startups?

Rene Lacerte — Chairman, CEO and Founder

Well, thank you Chris for the question. Always good to talk to you. Happy to talk about this. I think it’s a little bit overplayed out there. The impact of AI and software really comes down to it’s just another tool to accelerate the democratization of software development.

I’ve been building software for SMBs, financial software for SMBs now, for over 35 years. And every evolving language, if you will, has just made more and more people able to develop software. And that’s been a great thing. That means we have a lot more capabilities for customers today than we had before. And so when we think about developing solutions to solve real pain points and real problems for our customers, it requires expertise combined with creativity. And so, you know, our understanding of the problem that SMBs face today is rooted in a deep level of expertise with technology.

And so that foundational understanding of the financial operations underlines the transactions that we drive today for our business. The deep expertise that we have built actually kind of comes through obviously in the fact that we’ve created a category. Nobody was thinking or talking about financial operations before Bill came along. And now we have this category that we continuously redefine and add agentic capabilities. And that means that AI can’t replace that expertise. Instead it will bring it to life. We have and have built a unique company. We operate where software meets money movement. We have married software and payments seamlessly, automating more B2B payments than anyone else.

Our scale in B2B transactions is unmatched and we have an advantage position that will continue to grow with agentic AI. And because of the three differentiating factors I think are really important for folks to understand. That’s why I have this confidence. So first I would say there’s a large quantum of highly contextual data that we have nobody else has done. $1 trillion in spend in payments across our network. Hundreds of millions of transactions, over a billion documents, and that we’ve digested and supported our customers on. This gives us a unique data set to understand customer behavior and to build risk models around how you move money.

And like I said, no one else has this. This is not something five guys in a garage can just build on their own. It takes time. You have to scale, you have to grow and build the asset to be able to make these capabilities come to life. The second thing that I think is differentiating for Bill is that trust customers trust Bill. We talked about 9,500 plus accounts across the country trust Bill to actually build their business off of us. It’s a critical intangible that allows money to move freely and quickly in society. And I just wanted, you know, pause and just make sure everybody understands how important trust is when it comes to moving money.

I mean, when the precision bar is 100%, which it is for money, the consequences of failure can be catastrophic for an SMB. And so anything less, we know they will be out of business. And our track record having moved more than a trillion dollars speaks for itself. So we have this massive amount of data, we’ve got a large amount of trust. And the third area that differentiates us and really defines how we will move forward is the network effects. We have a unique set of 8 million entities on our network. No one connects and understands how buyers and suppliers transact better than Bill.

And I want to be clear that our network depth enables intelligence across an ecosystem, not just within a single business. And we will continue to leverage this to help business get done across the ecosystem. So to sum it up, our assets are scarce, they’re unique. Our platform is at the intersection of both software and payments. It’s carefully built, it’s honed with expertise. And these assets are not easy and they’re maybe even impossible to replicate. And that will allow us to create significant opportunities with agentic AI. So I’m pretty obviously pumped about the depth of expertise and rigorous execution that we demonstrate.

And I know that will unlock the power of SMBs going forward. Thank you, Chris.

Chris Quintero — Analyst, Morgan Stanley

Awesome. Super helpful, robust answer there. Renee. Maybe just as a follow up to that on the opportunity front. With AI, I think your agent strategy is really interesting because it seems to be going after more specific use cases to ultimately just reduce the amount of work that SMBs are doing. So curious to kind of get your thoughts on that strategy, why that’s the right one and what’s been the feedback from SMBs?

Rene Lacerte — Chairman, CEO and Founder

That’s another great question, Chris. So I think this is what happens when you have a foundational understanding of what drives a business.

You know, this business was born out of, you know, processing and managing payments in my family and my businesses. And that understanding means that we get to actually develop capabilities that hadn’t been thought of before. And so agentic AI will allow us to dive deeper into the stack of transactional confusion, if you will, and simplify it. And so what we see is an opportunity to create essentially roles that manage the different transaction levels that businesses have. So an example of this that we’ve talked about a bunch so far is the supplier management. What we’re doing with W9s, you know, nobody was thinking about, okay, well W9s need to be collected, they need to be entered, they need to be stored, they need to then drive a 1099.

We were thinking about that. We built that agent. We did it before anybody else. Nobody else is thinking about, okay, well, you know, coding invoice actually is really hard. Well, that’s why we have documents at the source of our, of our platform. And it’s why we started with, you know, our inbox virtual assistant. But then now we’ve added our coding agent that can go and take 90% of the steps out of coding. That’s an incredible amount of time savings that we’ve been able to provide. Nobody else is thinking about the fact that SMBs, you know, need help, they need assistance and they want to be able to do it on their time.

And so our ability with the bill assistant agent that we just launched, it’s just early. Right. But what we’ve seen is we’ve gone from a 13% self serve rate to over 40%. That means customers get back to doing what they love. They get their questions answered, they’re able to kind of move quickly into what they love. And that’s, that’s everything that we’re about to build is just helping business get back to work, helping them pursue their passion. So, you know, I think that our approach to kind of understand the underlying foundational challenges that a business has, that’s going to be what differentiates us in the market.

And we have a lot more to go on this. We’re super excited about what AI is going to enable us to tackle.

Chris Quintero — Analyst, Morgan Stanley

Excellent. Thanks.

Rene Lacerte — Chairman, CEO and Founder

Thanks, Chris. Thank you.

Operator

Thank you. Our next question comes from Tien Hsuyn Hon with JP Morgan. Please go ahead.

Tien-Tsin Huang — Analyst, JP Morgan

Thanks a lot. Good afternoon. Yeah, nice to see the growth acceleration and the upside to the guidance. I’m just curious, from an attribution standpoint, what would you assign it to in terms of what did a little bit better. I heard the improving volume. I’ve been getting questions around how much of that is macro versus using some of the return on the investments that you put in, for example. Thanks.

Rene Lacerte — Chairman, CEO and Founder

Yeah, I’ll start and then I’ll have Rohini jump in. So I mean I think the first thing you’re seeing is the results, just the durability of building a great business.

I mean we are constantly focused on actually taking care of building solutions for our customers that deliver value for them the long term. And we’re also obviously have a strong pulse on how SMBs are kind of moving through the cycles. And so we definitely see the resilience of SMBs kick in. We see the opportunity for them to drive and grow their business with our platform. And we think that the innovation that we’ve been bringing is creating more stickiness with the platform and creating more value opportunities for the platform. So with that I’ll let Rohini add a bit more.

Rohini Jain — CFO

Yeah, absolutely. Just to add color. And I want to start by saying that if you have a strong platform, a robust business and the right product for the customers, when there is increase in spend, we will get the benefit of that. So to unpack that a little bit more, as we have said, the same store sales on the Apr platform grew 4% which actually was an acceleration from the last quarter of a point, grew from 3% to 4%. What was really encouraging is some of the foundational industries like manufacturing continue to do well as well as construction.

Actually had a nice rebound on the APR side which we are, you know, very happy to see. And on the SNE side in particular, we had resurgence of spend going into the advertising and retail, which is like the discretionary verticals. We’ve called out for a couple of quarters to be a little bit muted. So very encouraged to see some of those trends. So overall we were seeing some green shoots as a combination of the execution of the gtm, the product strategy as well as, you know, the spend environment. Coming through.

Tien-Tsin Huang — Analyst, JP Morgan

Good. No, that’s encouraging. So maybe as my follow up I’ll ask on spending expense. Since you mentioned it there, I’m just just thinking Growing two times the market. There’s been some consolidation in the space. 20% growth. I think you’re calling out for the. For the rest of the year. So I’m curious how sustainable how. How visible that is. What’s preventing you from maybe growing a little bit faster given the shift to larger clients and the big installed base you have there? Is there a change in the credit appetite? All of that. Thank you.

Rohini Jain — CFO

Yeah, sure. So the way I think about it is, you know, we talked about the reversal of trends in some of the categories, you know, that we saw in this quarter play out, especially advertising and retail. So, you know, three months, not relying a lot on that trend, and would love to see these encouraging signs play out for a little bit longer before we break in again. As we think about the guidance, it’s a range. As we think about all the puts and takes, we’d continue to point you to the midpoint as our, you know, highest fidelity number.

But that’s why we give you the range of outcomes that could play out.

Tien-Tsin Huang — Analyst, JP Morgan

Fair enough. Thank you. Thank you.

Operator

Thank you. Our next question is from Nate Svensson with Deutsche Bank. Your line’s open.

Nate Svensson — Analyst, Deutsche Bank

Hey, thanks. I wanted to follow up on the AI question, maybe with regards to pricing. I know you’ve talked about kind of some of the targeted actions that you’re taking, but just in the context of all the headlines around AI and LMS. Providing tools for creating their own software. Solutions, do you see any risk to the pricing algorithm over the long term? Like, I think we get the picture in the near term, but just any thoughts on how to think about that over the long term? And I thought the answer earlier from Renee just on the overall competitive chart was helpful, but just wondering more specifically. With regards to pricing.

Rene Lacerte — Chairman, CEO and Founder

Yeah. Thank you, Nate. First, I’ll start off, and then I think Rohini can kind of add some comments. But at the highest level, you know, pricing comes from the value you create for your customers. And so what we see happening with AI is that it will continue to unlock the friction that maybe is the inertia behind why more businesses don’t use our solution. And so we think there are lots of opportunities to create more value inside the applications that will attract more customers. And we also see opportunities to create more services that we can price for as well.

In addition, we believe that AI will be a significant helpful partner, if you will, on how we drive. More consolidation in the expenses, more efficiency across the business. We’ve seen some of that. We talked about the bill assistant agent that’s actually driving self Serve and, you know, eliminating calls with higher, you know, satisfaction for customers. These are things that we will continue to do to kind of, you know, obviously drive both the top line and the bottom line. But Rahini, what else would you like to add?

Rohini Jain — CFO

Yeah, nothing much. But just to reiterate the point that, you know, if the pricing value follows the value that you deliver to the customers, there is always potential for growth here. Right. So again, to step away for a second, about 80% plus of our revenue comes from transaction based businesses and a little less than 20% is subscription based. So the pricing that we’re talking about here, I’m guessing is more around the subscription based and AI and the features that we are developing to remove friction for SMBs is really giving us that advantage to be able to price in a differentiated fashion for a premium product that we have.

So we will be thoughtful about that. And you know, some of the price changes that we have done, we have seen, you know, steady progress on that and overall encouraging results from that. We don’t. We actually see less churn that we would than we were expecting. We see the stickiness of the platform play out and overall very close to the benefit we were expecting in year within our guidance as well. I hope that answers your question.

Nate Svensson — Analyst, Deutsche Bank

That’s super helpful. I appreciate all the detail there. Oh, you know, that was, that was great. I appreciate it. Rohini. The other one that was interesting that stood out to me was the invoice financing. The metrics that were interesting, customers grew 50% origination volume over 30%. You talked about some of that in your prepared remarks. But just interested to hear more where invoice financing is seeing good product market fit either with specific verticals or customer groups or maybe use cases that businesses are leaning on the invoice financing for. And then maybe looking forward, where do. You think adoption can go for that product and how it could impact the P and L going forward?

Rene Lacerte — Chairman, CEO and Founder

Thank you, Nate, for the question. I think it brings back a couple of things I mentioned with the durable assets that we built at Bill. So one is the data that we have and two is the network. And so when you think about invoice financing, we’re opening up the 8 million entities in the network. We’re giving them a chance to get their money faster. They actually get paid maybe four or six weeks earlier than they would have been paid otherwise.

And that’s a huge, huge impact on how they manage their cash flow. So there is definitely demand for it. We see repeat usage and the only reason we’re able to do that is because of the huge data asset that we have. And it really matters that we’re able to look at these patterns over time, to be able to look at the patterns of the network at this moment in time. And that’s how we’re able to drive the success. And so I would say that, you know, the overall, you know, particular verticals or whatnot that are picking the solution, it probably varies, you know, from, from month to month, depending on the cycles that they’re in.

I don’t think there’s anything specific that, you know, I would say other than that this is a product that does have demand and we’re excited to keep rolling it out. And John will kind of add a few comments here.

John Resig — President and COO

Yeah, that makes perfect sense. And the invoice financing product is a great complement to other payment products we have that enable suppliers to get paid quickly. So where access to cash is an important driver, typically that follows the size of the business. So we see across our large network the smaller suppliers who might have just a handful of customers that they’re working with on either service based projects or things like that and needing access to invoice based financing in order to meet cash flow needs. So we’re seeing really good uptick there. It’s a product that has, I think, significant upside for the business overall, but it’s one that we’re managing in a, in a measured way in order to continue to refine and perfect our underwriting and risk models and make sure that we’re delivering not just a great customer to, but also the right economics for Bill as we scale.

Rene Lacerte — Chairman, CEO and Founder

Thank you, Nate.

Nate Svensson — Analyst, Deutsche Bank

Appreciate it. Guys.

Operator

Our next question comes from Darren Peller with Wolf Research. Please go ahead.

Darrin Peller — Analyst, Wolf Research

Thanks guys. Nice job. You know, going back four or five months ago when you had different investors get involved and the board changed a bit, we talked about more of a strategic process review and I guess I’d be curious to hear an update on what findings you’ve had since then. Whether it’s on the revenue side, the cost side or the standalone side or anything else for that matter. Where are we in that process and maybe where do you see us headed on it?

Rene Lacerte — Chairman, CEO and Founder

Thank you, Darren, for the question. I’ll start and then I’ll let John kind of take some points on some of the work he’s been leading on looking at the business more always. So, I mean, first and foremost, you know, when you build a durable business, you have lots of levers at your disposal and you continue to add to those levers over time. And so I think, you know, if you look back six months like you were suggesting, there was at a point in time when we realized we needed to be, you know, activating more of the, you know, the, I guess the efficiency across the business.

And so we’ve been focused on that. You’ve seen that in the results. We continue to drive, you know, growth while balancing obviously and growing the profitability across the business. And that’s just because of the levers that we have. But there are some more opportunities for us. I’ll let John kind of talk broadly to that. Sure.

John Resig — President and COO

Over the first half of this fiscal year, we spent time looking at the business bottoms up with the goal of optimizing costs over time. We developed a series of focus areas with some outside consulting help, including geographical diversification, so geolocation strategy for our employee base, AI driven productivity, which includes developer productivity, internal teams via automation, even go to market customer unit economic optimization as well. Rohini mentioned this earlier around rewards and optimization there. So we feel like we have a good roadmap of opportunities. This is going to be a multi year effort and we think the initial benefits will start to be realized in fiscal 27.

So as given the timeline there, there’s no additional impact that we’re expecting in fiscal 26, but we are planting the seeds for continued optimization.

Darrin Peller — Analyst, Wolf Research

Okay. All right, John, thank you. And Renee, guys, just one more is on the move up market. I just want to hear a little bit more your view of your right to win in that space you talked about. I know a slight downTick on the Versa 4000 APA or net adds based on moving up market to bigger customers. That makes sense. But how should we think about this showing up in other KPIs and again, just more holistically help us understand why you believe you can succeed there versus others. Thanks again guys.

Rene Lacerte — Chairman, CEO and Founder

Yeah, thanks Darren. I’ll start and I’ll let John Rahini add more comments. So I mean, I think the first reason we believe we can win is that we’ve got a unique differentiated platform. We built that platform from the beginning to kind of go square at the heart of business in America. So we have businesses that are small, we have businesses that are medium, and we have larger businesses. We’re not focused on enterprise. But we do think that our solution, if you just look at our data, already suggests that larger businesses get more value out of the platform than even smaller businesses do.

So that is where the conviction comes from. I think when you look at the go to market motion, one of the things we talked about this quarter is that we’ve been able to drive more adoption of both the core APAR and the spend and expense Solutions together driving 28% growth year over year on that. So a lot of opportunities tell us that the platform as a whole is quite meaningful and that that is why we will be able to drive more adoption when we get to larger businesses. So I don’t know if John or Heaney have anything else you want to add.

Sure.

John Resig — President and COO

So we’ve definitely learned over time that the depth of our platform and our sophisticated workflows really resonate with more established small businesses and these lower mid market customers. And as a part of the overall market, 6 million employers in the U.S. 2 to 3 million of those fall into this target category for us. So it’s a huge market opportunity. We’ve been rolling out new product capabilities in support of this segment, enhanced multi entity features, expanded two way sync integrations, procurement. Some of the things that you’ve heard over the last few quarters on our innovation agenda and we’ve evolved our go to market strategies to reach these larger businesses.

So we’ve got dedicated sales teams with channel partners, including pricing strategies and we’re starting to see good signals there. We talked about with AP and AR and improving core ARPU in recent cohorts that reflects the increased size of businesses and slightly more multi product adoption. And then with sne, you know, two quarters in a row of record high card spend per business, we saw that in Q2 as well. So to your question about the metric side of things, over time we would expect this to translate into, you know, higher arpu, increased multi product adoption, increased customer and revenue retention.

It’ll take a little time for that to materialize in the numbers just given the size of our customer base. And then as far as the rest of the market, our Embed 2.0 strategy is a great complement to what we’re doing with our direct efforts where we can reach both smaller businesses and large businesses through partners. So I think we’re really, really well positioned. Darren, to your question about winning this slightly larger segment.

Rene Lacerte — Chairman, CEO and Founder

Okay, thanks John.

John Resig — President and COO

Thank you, Darren.

Operator

Our next question comes from Scott Berg with Needham and Company. Your line is open. Please go ahead.

Scott Berg — Analyst, Needham And Company

Hi everyone. Thanks for taking the questions here today. I want to start off, I guess, asking about the pricing impact for the core APAR solution. Obviously you probably needed to align it for some of the additional value that you’ve added. But you know, early trends, I know Rohini said that we should expect slightly lower customer count going forward, partially due to that impact in your, in your move up market to larger customers. But just want to get a sense on maybe what you’re seeing around, I don’t know, win rates or customer feedback around that pricing if there’s anything, you know, to note with the change.

John Resig — President and COO

Yeah, thanks for the question, Scott. First, I’d say there’s two moving parts as it relates to expanding arpu. One is size of customers, their payment volume, number of users, and we’re seeing some positive signals there. And then the other is specific pricing strategies that we implement and we’re continuing to execute on the plans that we talked about earlier this fiscal year that involve some transaction and subscription pricing targeted changes. This is relatively small in the grand scheme of the scale of our business in fiscal 26, but we’re starting to more and more create alignment between the value we deliver and the value that Bill is achieving.

And it also helps us attract and retain customers that are the best fit for our product. So the overall pricing optimization strategy is a journey and we’re developing that approach incorporating AI and the impact that will have as well as the customer segments that we’re most focused on. We would expect the more holistic pricing optimization to roll out in fiscal 27, but as I said, we have made some, you know, some changes in fiscal 26.

Rohini Jain — CFO

Yeah. And those have been actually good learning opportunities for us since we haven’t done pricing for almost three years in terms of the customer reaction, stickiness and all of that. And we are very optimistic seeing the early results. And just to bring it back into context for the year, we had laid out some plans at the beginning of the year incorporated into our guidance and we are doing well executing on that plan. So the range is still incorporating all the actions that we had committed to.

Scott Berg — Analyst, Needham And Company

Understood. Helpful. Thank you. And then as a follow up perspective, you all tone wise sound much better on the spending on the platform, especially with spending in expense in the quarter. Now we’ve seen some volatility around that last couple three years as sentiment around the macro certainly bounced up and down. I guess your confidence, or at least your tone seems to indicate this is a little bit more sustainable. Any help to maybe see here what you’re seeing in Q3 so far that kind of accentuates that confidence, I guess. I think we’re trying to all understand if this is something that really can continue into the balance of the calendar year.

Rohini Jain — CFO

Sure, I can take that one. So strong, very strong quarter in Q2. You know, when we look at the Q2 results, there are some trends that we Feel really confident about that are enduring, that are continuous. So you see that even though we beat our guidance by about $11 million, we are flowing through a material portion, not all of that trend into the back half as we continue cautiously, cautiously, optimistically continue to look at certain verticals in coming back from a spending perspective. So we feel good about the early trends that we are seeing in this quarter and that has gone into how we think about the guidance as well.

So the range we provided feels solid.

Scott Berg — Analyst, Needham And Company

Very helpful. Thank you.

Rene Lacerte — Chairman, CEO and Founder

Thank you.

Operator

Thank you. Our next question is from Andrew Schmidt with Key Corp. Your line is open.

Andrew Schmidt — Analyst, Key Corp

Hey Renee, John Rohini, thanks for taking the questions and nice results here. If I could just dig into Embedded for a moment. That saw some nice growth and that came online much faster than we had anticipated. So it’s great to see that materialize pretty quickly, maybe talk about the sustainability of that growth. It seems still very early. And then, you know, just looking out next couple years, how the embedded distribution compares from a scale perspective versus sort of the, the other channels, accounting, direct, et cetera. Thank you.

Rohini Jain — CFO

Yeah, let me start by just talking about the Embed channel revenue performance. And just to clarify, the revenue numbers, you see it and Embed are related to our original embed 1.0, as we may call it, the 2.0. Very nascent. And you’re kind of right, it’s really early days as we announced and then, you know, took to market the products with these partners. So each one of the banks that we have in our initial version of Embed have their own revenue schedules and there is some change quarter on a quarter to quarter basis that is showing up in the numbers for embed to 2.0 early days and we really expect the numbers to start to show up closer to next year.

Rene Lacerte — Chairman, CEO and Founder

Yeah, just to add to Rene’s comments, the embed 2.0 is just now getting into market with the three new partners, the Netsuite, the Acomatica and Paychex. We’re super excited about the pace that we’ve been able to launch this. It was only six months ago, whatever, that the platform was ready and we launched Sign three Partners and within a quarter have all them alive and in market. And you know, just as a comment, you know, I was up at Acumatica’s, you know, annual conference, you know, last week and John Case, CEO, mentioned us in his keynote address.

But the thing that was super motivating for me was just to actually talk to the VARs that they serve and work with and the customers. And these are large Mid market customers, you know, some of them are in the construction vertical, if you will, and there is demand and interest about what it is that we’re doing. And so I think, you know, the broad Strategy with Embed 2.0 is proving itself out. We have to go execute on the go to market now, but there is an opportunity to reach both larger customers, as John said, and smaller customers like we will with paycheck.

So we’re super excited about it and a lot of opportunity going forward.

Andrew Schmidt — Analyst, Key Corp

Got it. Thanks for that clarification. I appreciate those comments. That’s helpful as we think about a lot of comments on sort of the sustainability of growth. And I’ll kind of throw one more in there as we think about just the base of growth, the core, the base of growth for sort of core revenues. Is this the right way to think about it? Sort of how FY26 is trending? Obviously there’s a lot of other opportunities. We think about getting an FY27, distribution, pricing, et cetera.

But just curious to understand whether this is just sort of a, you know, a nice base to kind of work off here if there’s other considerations we should be taking into account. Thanks so much.

Rohini Jain — CFO

That is correct. You know, this is the right set of metrics that we provided initial, you know, early guidance on as inputs into our guide. So you should rely on that to build out your models and your assumptions for the year.

Andrew Schmidt — Analyst, Key Corp

Okay. I guess we’ll get into more of the out year, you know, sort of sustainability analyst day, which we look forward to. All right. Thanks so much.

Rohini Jain — CFO

Yeah, we do too.

Rene Lacerte — Chairman, CEO and Founder

Thank you, Andrew.

Rohini Jain — CFO

Thanks.

Operator

Thank you. Our next question is from Kenneth Sakowski with Autonomous. Please go ahead.

Kenneth Sadowski — Analyst, Autonomous

Hey, good evening everyone. I wanted to ask about spp. I mean, you talked about early adopting suppliers, having committed 400 million in annual TPV. It’s really good tracks and traction for just a couple quarters. I’m curious how we should think about the ramp in those commitments over the next year or two. I mean, is this initiative that you can get to say 5, 10 billion of volume in a couple years and then anything you could share on the monetization rate of that volume. Meaning how does it compare to other payment types like virtual cards? Just trying to quantify how much this initiative could impact the apar take rate and the transaction revenue there.

Thank you.

John Resig — President and COO

Yeah, thanks for the question, Ken. SPP Supplier Payments plus is a really important solution that we brought to market. It adds significant breadth to our payment portfolio and it’s a really nice complement to virtual card payments for large suppliers and then also a much better experience than vanilla ACH payments given enhanced reconciliation tools, more data, more efficiency. So it actually brings down the cost of payment acceptance for suppliers. And that’s part of the important value proposition here that also sets up this as a, I think a long term growth adval product for us. So we feel good about the initial traction we have.

As you said, it’s just two quarters into the commercial side of things and selling. But I think that experience to date has proven our thesis that we started with, which was that at least for the contracted volume that we’ve seen so far, SVP is a great solution for large suppliers. So we’re, we’re optimistic about where we can take this. It’s an enterprise sales motion, which is a new motion for Bill. We’ve been building that over the last few quarters a little bit longer sales cycle than the SMB base. So I’d say it’s going to take a while to move the needle overall for our metrics.

But we did want to share some of the good early signs of progress and I think as it relates to the multi year impact, we’ll leave that to investor day in terms of the actual numbers. But given the size of ACH volume in our business today and even that Amongst the largest 10,000 suppliers in our network, we’re talking, it’s a really big opportunity for us but it will obviously take some time to play out.

Kenneth Sadowski — Analyst, Autonomous

Okay, great. All right, thanks, John. I’ll leave it there.

John Resig — President and COO

Thanks, Kim.

Operator

Thank you. We’re now out of time for any further questions, so I’ll pass you back over to Renee for any closing comments.

Rene Lacerte — Chairman, CEO and Founder

Thank you, Lydia. Okay, thank you for joining us today. I want to thank our teams for their focused execution during the quarter. We delivered accelerated growth and expanded margins and reflecting the strength of our operating model, the compounding advantage of our platform, we believe this positions us well for sustained, profitable growth over the long term. And thank you. Hope you have a great evening.

Operator

This concludes our call today. Thank you very much for joining. You may now disconnect your line.