What do Abdiel Capital, Citadel Advisers, Dragoneer Investment Group, Melvin Capital, Point 72 Asset Management, Tiger Global and Whale Rock Capital have in common? Aside from being among the world’s leading hedge funds, Bill.com 13F holdings reveal all the above bought shares of Bill.Com (BILL) in Q4 of 2019.
It was a good move. The Palo Alto-based payment software company priced its IPO at $22 on Dec. 12. Selling 9.82 million shares, Bill.com raised about $216 million at a roughly $1.6 billion valuation. The stock ended its first day of trading at $35.50. Yesterday it closed at $62.78. That’s a market cap of about $4.3 billion.
13F holdings of U.S. funds were filed last week. We can presume the funds holding BILL bought at the IPO price, though there’s no way to be sure. I used WhaleWisdom.com’s “Consensus Pick’s” feature to discover new stock positions in the portfolios of leading hedge funds in Q4. Other positions added by multiple top hedge funds included: Bristol Myers Squib rights (BMY/R), XP Inc. (XP) and Charles Schwab Corp.(SCHW).
Bill.com offers cloud-based software that allows small businesses to automate back-office operations.
Founded in 2006, Bill.com offers cloud-based software that enables small and midsize businesses to automate back-office financial operations, including paying bills and receiving payments.
In the prospectus for the companies IPO, CEO René Lacerte said:
“Using AI, we are eliminating data entry, preventing duplicate payments, and providing our customers with actionable insights to inform their business decisions. We are convinced that we have only scratched the surface of this new technology, and I am thrilled about the potential that lies ahead.”
There was plenty of skepticism when Bill.com went public. But two months and 180% later, the IPO price looks dirt cheap. And the hedge funds that bought into it look smart.
Bill.com 13F Holdings reveal leading hedge funds recognized BILL’s IPO as a good deal.
And the company’s first report since it went public in December beat expectations. Revenue rose 50% in the quarter to $39.1 million. That beat estimates of $33.8 million. Subscription and transaction revenue rose 61% to $33 million. Interest on funds held for customers rose 10% to $6.1 million. Bill.com reported an adjusted loss of $0.06 per share, vs a profit of $0.01 in the quarter a year ago. That was better than estimates of a $0.08 loss.
Bill.com’s first post-IPO earnings report beat expectations.
CEO Lacerte said:
I am very happy to report that in our first quarter as a public company we posted strong results. Our performance this quarter was highlighted by solid revenue growth and expansion of non-GAAP gross margins. Customers continue to leverage the platform to automate their financial operations, resulting in accelerating core (subscription and transaction) revenue growth year-over-year.
In its third-quarter outlook, the company expects revenue of $38 million to $38.7 million. That’s well ahead of estimates at $34.4 million. Bill.com sees full-year revenue of $150.3 million to $151.7 million, compared with the consensus at $140.6 million.
After Bill.com’s Q2 report, Needham’s Scott Berg raised his target on the company to $55.00 (from $43.00).
The analyst commented, “Bill.com delivered impressive financial results for its first post-IPO quarter… While all operating metrics were very good, we remain big fans of the marco trends in the payment space. We believe BILL’s opportunity will improve as recent GTM expansion takes hold in FY21. We maintain a Buy rating as we think the combination of 60% core revenue growth and a massive greenfield opportunity is unique in our space and the company will see above average growth for several years.”
Contact Mark about investing based on SEC filings and smart money disclosures.
Disclaimer:
This investment blog (the “Blog”) is created and authored by Mark W. Gaffney (the “Content Creator”) and is published and provided for informational and entertainment purposes only (collectively, the “Blog Service”). The information in the Blog constitutes the Content Creator’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You understand that the Content Creator is not advising, and will not advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the information contained in the Blog may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
From time to time, the Content Creator or its affiliates may hold positions or other interests in securities mentioned in the Blog and may trade for their own account(s) based on the information presented. The Content Creator may also take positions inconsistent with the views expressed in its messages on the Blog.
The Content Creator may hold licenses with FINRA, the SEC or states securities authorities and these licenses may or may not be disclosed by the Content Creator in the Blog.
Investing in the investments discussed in the Blog may be risky and speculative. The companies may have limited operating histories, little available public information, and the stocks they issue may be volatile and illiquid. Trading in such securities can result in immediate and substantial losses of the capital invested. You should use invest risk capital, and not capital required for other purposes, such as retirement savings, student loans, mortgages or education.
