BILL Holdings (BILL) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01We have a history of operating losses and may not sustain or expand our profitability in the future
2. 02A significant portion of our revenue comes from small and medium-sized businesses, which may have fewer financial resources to weather an economic downturn, and volatile or weakened economic conditions in the U.S. and globally may adversely affect our business and operating results
3. 03government spending, including in the U.S. Small Business Administration, may adversely impact the SMBs we serve
4. 04We expect fluctuations in our financial results, making it difficult to project future results, and if we fail to meet the expectations of securities analysts or investors with respect to our operating results, our stock price and the value of your investment could decline
5. 05If we are unable to attract new customers or convert trial customers into paying customers or if our efforts to promote our charge card usage through marketing, promotion, and spending business rewards are unsuccessful, our revenue growth and operating results will be adversely affected
6. 06expensive or difficult. As a result of these and other factors, we may be unable to attract new customers or our related expenses may increase, which would have an adverse effect on our business, revenue, gross margins, and operating results
7. 07If we are unable to retain our current customers, increase customer adoption of our products, sell additional services to our customers, or develop and launch new payment products, our business and growth will be adversely affected
8. 08Our BILL Divvy Card offering exposes us to credit risk and other risks related to spending businesses' ability to pay the balances incurred on their BILL Divvy Cards. Certain of our other current and future product offerings, such as invoice financing, may also subject us to credit risk
9. 09Our risk management efforts may not be effective to prevent fraudulent activities by our customers, subscribers, spending businesses, or their counterparties, or other third parties which could expose us to material financial losses and liabilities and otherwise harm our business
10. 10The markets in which we participate are competitive, and if we do not compete effectively, our operating results could be harmed
11. 11We transfer large sums of customer funds daily, and are subject to numerous associated risks which could result in financial losses, damage to our reputation, or loss of trust in our brand, which would harm our business and financial results
12. 12Funds that we hold for the benefit of our customers are subject to market, interest rate, credit, foreign exchange, and liquidity risks, as well as general political and economic conditions. The loss of any of these funds could adversely affect our business, operating results and financial condition
13. 13We earn revenue from interest earned on customer funds held in trust while payments are clearing, which is subject to market conditions and may decrease as customers’ adoption of electronic payments and technology continues to evolve
14. 14Our business depends, in part, on our relationships with accounting firms
15. 15Our business depends, in part, on our business relationships with financial institutions
16. 16Our recent growth may not be indicative of our future growth, and there is no assurance that we will be able to scale our platform and infrastructure, and manage our growth effectively
17. 17Certain credit products, including our BILL Divvy Card, are dependent on our relationship with the Issuing Banks
18. 18If we do not or cannot maintain the compatibility of our platform with popular software solutions or offerings of our partners, our revenue and growth prospects will decline
19. 19We use artificial intelligence in our business, and any challenges with successfully developing and deploying new AI tools or properly managing the use of AI could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations
20. 20If we lose our founder or key members of our management team or are unable to attract and retain executives and employees we need to support our operations and growth, our business may be harmed
21. 21Future acquisitions, strategic investments, partnerships, collaborations, or alliances could be difficult to identify and integrate, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our operating results and financial condition
22. 22operations may not be fully compliant with all applicable law, including economic and trade sanctions and anti-money laundering, counter-terrorist financing, and privacy laws, subjecting us to potential liabilities and requiring us to spend considerable time, effort, and resources to address
23. 23If we fail to offer high-quality customer support, or if our support is more expensive than anticipated, our business and reputation could suffer
24. 24If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing business needs, requirements, or preferences, our products may become less competitive
25. 25If the prices we charge for our services are unacceptable to our customers, our operating results will be harmed
26. 26Interruptions or delays in the services provided by AWS or other third-party data centers or internet service providers could impair the delivery of our platform and our business could suffer
27. 27Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our products
28. 28We currently handle cross-border payments and plan to expand our payments offerings to new customers and to make payments to new countries, creating a variety of operational challenges
29. 29A substantial portion of our revenue is derived from interchange fees, which exposes us to potential variability in income and other risks
30. 30If we fail to maintain and enhance our brands, our ability to expand our customer base will be impaired and our business, operating results, and financial condition may suffer
31. 31Changes to payment card networks rules or fees could harm our business
32. 32We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all
33. 33Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations
34. 34We could be required to collect additional sales taxes or be subject to other tax liabilities that may increase the costs our customers would have to pay for our offering and adversely affect our operating results
35. 35Changes in our effective tax rate or tax liability may adversely affect our operating results
36. 36Natural catastrophic events, pandemics, and man-made problems such as power-disruptions, computer viruses, data security breaches, war, and terrorism may disrupt our business
37. 37If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired
38. 38Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the U.S
39. 39If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our operating results could be adversely affected
40. 40Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all
41. 41We rely on assumptions and estimates to calculate certain of our performance metrics, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business
42. 42Any future litigation against us could be costly and time-consuming to defend
43. 43If we cannot maintain our company culture as we grow, our success and our business may be harmed
44. 44We are exposed to foreign currency exchange risk relating to our Canadian operations
45. 45Our business could be negatively affected as a result of actions by or proposals from activist stockholders, and such activism could impact the trading value of our securities and harm our business, financial condition and results of operations

Risks Related to Government Regulation and Privacy Matters

1. 46Payments and other financial services-related regulations and oversight are material to our business. Our failure to comply could materially harm our business
2. 47Our business is subject to extensive government regulation and oversight. Our failure to comply with extensive, complex, overlapping, and frequently changing rules, regulations, and legal interpretations could materially harm our business
3. 48We have heightened monitoring in the face of such risks, but cannot guarantee that our efforts, or the efforts of those upon whom we rely and partner with, will be successful in preventing any such information security incidents
4. 49We are subject to governmental laws and requirements regarding economic and trade sanctions, anti-money laundering, and counter-terror financing that could impair our ability to compete in international markets or subject us to criminal or civil liability if we violate them
5. 50We are subject to anti-corruption, anti-bribery, and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business
6. 51We cannot assure you that all of our employees and agents will not take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. As we increase our international business, our risks under these laws may increase

Risks Related to Our Intellectual Property

1. 52If we fail to adequately protect our proprietary rights, our competitive position could be impaired and we may lose valuable assets, generate less revenue, and incur costly litigation to protect our rights
2. 53We have been in the past, and may in the future be, subject to intellectual property disputes, which are costly and may subject us to significant liability and increased costs of doing business
3. 54Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, data protection, and other losses
4. 55We use open source software in our products, which could subject us to litigation or other actions

Risks Related to Our Indebtedness

1. 56Our debt service obligations, including the Notes, may adversely affect our financial condition and results of operations
2. 57We may not have the ability to raise the funds necessary for cash settlement upon conversion of the Notes or to repurchase the Notes for cash upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion of the Notes or to repurchase the Notes
3. 58The conditional conversion feature of the Notes, when triggered, may adversely affect our financial condition and operating results
4. 59The Capped Calls may affect the value of our Notes and our common stock
5. 60We are subject to counterparty risk with respect to the Capped Calls

Risks Related to Ownership of Our Common Stock

1. 61The stock price of our common stock has been, and will likely continue to be volatile, and you may lose part or all of your investment
2. 62Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management, and affect the market price of our common stock
3. 63brought to enforce any liability or duty created by the Exchange Act or Securities Act of 1933, as amended (Securities Act), or the rules and regulations thereunder in federal court
4. 64Our management team has limited experience managing a public company
5. 65We do not intend to pay dividends for the foreseeable future
6. 66If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, our stock price and trading volume could decline
7. 67The timing and amount of any repurchases of common stock by us are subject to a number of uncertainties