BILL Holdings (BILL) risk factors, FY2026 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 future37% rewritten
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 results70% rewritten
3. 03We 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
4. 04If 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 affected60% rewritten
5. 05If 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
6. 06Our 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 risk35% rewritten
7. 07underperformance, of the account receivables participation interests that we own could have an adverse effect on our businessNew
8. 08Our 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, potentially augmented by AI, could expose us to material financial losses and liabilities and otherwise harm our business
9. 09The markets in which we participate are competitive, and if we do not compete effectively, our operating results could be harmed33% rewritten
10. 10We 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
11. 11Funds 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
12. 12We 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 evolve22% rewritten
13. 13Our business depends, in part, on our relationships with accounting firms, financial institutions, software providers and other partners71% rewritten
14. 14Our 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 effectively22% rewritten
15. 15Certain credit products, including our BILL Divvy Card, are dependent on our relationship with the Issuing Banks
16. 16If 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 decline87% rewritten
17. 17entry and provides the basis for managing cash-flow through an integrated solution for accounts payable, accounts receivable, spend and expense management, and paymentsNew
18. 18We use AI 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, legal liability, and regulatory compliance burdens, and adversely affect our results of operations43% rewritten
19. 19If 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
20. 20Future 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 condition56% rewritten
21. 21If we fail to offer high-quality customer support, or if our support is more expensive than anticipated, our business and reputation could suffer
22. 22If 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
23. 23If the prices we charge for our services are unacceptable to our customers, our operating results will be harmed
24. 24Interruptions 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 suffer26% rewritten
25. 25Failure 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
26. 26We 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
27. 27A substantial portion of our revenue is derived from interchange fees, which exposes us to potential variability in income and other risks44% rewritten
28. 28using our card products as a result of merchant policies, new surcharges or reduced attractiveness of rewards programs, our business, financial condition, and operating results could be adversely impactedNew
29. 29If 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
30. 30Changes to payment card networks rules or fees could harm our business
31. 31Our reductions in force, transition to a remote-first company, and restructuring efforts may result in unanticipated costs or consequencesNew
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 limitations32% rewritten
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, tax assets or tax liabilities may adversely affect our operating results43% rewritten
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 impaired29% rewritten
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, or if changes to such policies are not well-understood, our operating results could be adversely affected and the trading price of our common stock could decline32% rewritten
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 harmed27% rewritten
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 operations46% rewritten

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 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
4. 49We 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
5. 50We 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. 51If 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. 52We 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. 53Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, data protection, and other losses
4. 54We use open source software in our products, which could subject us to litigation or other actions

Risks Related to Our Indebtedness

1. 55Our debt service obligations, including the Notes, may adversely affect our financial condition and results of operations
2. 56We 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. 57The conditional conversion feature of the Notes, when triggered, may adversely affect our financial condition and operating results
4. 58The Capped Calls may affect the value of our Notes and our common stock
5. 59We are subject to counterparty risk with respect to the Capped Calls

Risks Related to Ownership of Our Common Stock

1. 60The 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. 61Anti-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. 62We do not intend to pay dividends for the foreseeable future
4. 63If 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
5. 64The timing and amount of any repurchases of common stock by us are subject to a number of uncertainties90% rewritten
6. 65discussion about our share repurchase program activity during the period and shares available for future repurchases, refer to Note 10 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-KNew