BILL Holdings, Inc.

Previous wording

Our purpose-built, artificial intelligence (AI)-enabled financial software platform creates seamless connections between our customers, their suppliers, and their clients. Businesses on our platform generate and process invoices, streamline approvals, make and receive payments, manage employee expenses, sync with their accounting system, foster collaboration, and manage their cash flow. We have built sophisticated integrations with popular software solutions, banks, card issuers, and payment processors, enabling our customers to access these mission-critical services quickly and easily. Our integrated platform also includes BILL Spend and Expense, our spend and expense management product, which provides a solution for businesses to have smart corporate cards, build and monitor budgets, manage payments, and eliminate the need for manual expense reports.

Current wording

Our platform creates seamless connections between our customers, their suppliers, and their clients. Businesses on our platform generate and process invoices, streamline approvals, make and receive payments, manage employee expenses, sync with their accounting system, foster collaboration, and manage their cash flow. We have built sophisticated integrations with popular software solutions, banks, card issuers, and payment processors, enabling our customers to access these mission-critical services quickly and easily. Our integrated platform also includes BILL Spend and Expense, our spend and expense management product, which provides a solution for businesses to have charge cards, build and monitor budgets, manage payments, and eliminate the need for manual expense reports.

Previous wording

We efficiently reach SMBs through our proven direct and indirect go-to-market strategies. We acquire new businesses to use our solutions directly through digital marketing and inside sales, and indirectly through accounting firms, financial institution partnerships and software providers. As of June 30, 2025, our partners included some of the most trusted brands in the financial services business, including more than 85 of the top 100 accounting firms and six of the top ten largest financial institutions for SMBs in the United States (U.S.), including JPMorgan Chase, Bank of America, Wells Fargo Bank, and American Express. As we add customers and partners, we expect our network to continue to grow organically.

Current wording

We efficiently reach SMBs through our proven direct and indirect go-to-market strategies. We acquire new businesses to use our solutions directly through digital marketing and inside sales, and indirectly through accounting firms, financial institution partnerships and software providers. As of June 30, 2026, our partners included some of the most trusted brands in the financial services business and more than 85 of the top 100 accounting firms. As we add customers and partners, we expect our network to continue to grow organically.

Previous wording

We have grown rapidly and scaled our business operations in recent periods. Our revenue was $1.5 billion and $1.3 billion during fiscal 2025 and 2024, respectively, a year-over-year increase of $172.4 million. We generated net income of $23.8 million and net loss of $28.9 million during fiscal 2025 and 2024, respectively.

Current wording

We have grown significantly and scaled our business operations in recent years. Our revenue was $1.7 billion and $1.5 billion during fiscal 2026 and 2025, respectively, a year-over-year increase of $190.6 million. We generated net loss of $11.2 million and net income of $23.8 million during fiscal 2026 and 2025, respectively.

Previous wording

Current macroeconomic conditions and uncertainties, including volatility in interest rates and borrowing costs, inflation and currency exchange rates, and recent changes in international trading relationships, supply chains and U.S. and foreign tariff rates have impacted and could continue to impact our business and the SMBs we serve. SMBs are particularly susceptible to changes in overall economic and financial conditions, and certain SMBs may, in the event of adverse economic conditions or a recession or any inability to access financing moderate their expenditures, shift to lower-cost methods of payment, or cease operations entirely. For example, in fiscal 2025, we observed certain BILL AP/AR customers reduce their spending, resulting in a reduced TPV per customer. Reductions in interest rates by the U.S. Federal Reserve Bank may improve financial conditions for SMBs, but there can be no assurance of future rate cuts or any corresponding increase in economic activity. At the same time, such reductions in interest rates have the effect of reducing the interest on funds held for customers we generate. We intend to continue to monitor macroeconomic conditions closely and to take appropriate financial or operational actions in response to such conditions.

Current wording

Current macroeconomic conditions and uncertainties, including volatility in interest rates and borrowing costs, inflation and currency exchange rates, the impact of the ongoing rapid development and adoption of new AI capabilities, ongoing geopolitical conflicts and related supply chain disruptions, increases in the cost of memory, computing power, and related raw materials, and recent changes in international trading relationships, and U.S. and foreign tariff rates have impacted and could continue to impact our business and the SMBs we serve. SMBs are particularly susceptible to changes in overall economic and financial conditions, and certain SMBs may, in the event of adverse economic conditions or a recession or any inability to access financing, moderate their expenditures, shift to lower-cost methods of payment, or cease operations entirely. Reductions in interest rates by the U.S. Federal Reserve Bank may improve financial conditions for SMBs, but there can be no assurance of future rate cuts or any corresponding increase in economic activity. At the same time, such reductions in interest rates have the effect of reducing the interest on funds held for customers we generate. We intend to continue to monitor macroeconomic conditions closely and to take appropriate financial or operational actions in response to such conditions.

Previous wording

Any of these conditions or actions may have a negative impact on our future results of operations, liquidity, and financial condition. We are unable to predict the full impact that macroeconomic factors, banking sector dynamics, or ongoing global geopolitical conflicts will have on our future results of operations, liquidity, and financial condition due to numerous uncertainties, including changes in central bank policies and interest rates, rates of inflation, the strength of the U.S. dollar, the related impact to our customers, spending businesses, subscribers, partners, and suppliers, and other factors described in the section titled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

Current wording

Any of these conditions or actions may have a negative impact on our future results of operations, liquidity, and financial condition. We are unable to predict the full impact that macroeconomic factors, banking sector dynamics, or ongoing global geopolitical conflicts will have on our future results of operations, liquidity, and financial condition due to numerous uncertainties, including government budget cuts and government shut downs, changes in central bank policies and interest rates, rates of inflation, the strength of the U.S. dollar, the related impact to our customers, spending businesses, subscribers, partners, and suppliers, and other factors described in the section titled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

Previous wording

Our subscription revenue is primarily based on a fixed monthly or annual rate per user or per customer account. Our transaction revenue consists of transaction fees and interchange fees on a fixed or variable rate per transaction. Transactions primarily include card payments, real-time payments, check payments, ACH payments, cross-border payments, pay-by-card, invoice financing, and creation of invoices. Much of our revenue comes from repeat transactions, which are an important contributor to our recurring revenue.

Current wording

Our subscription revenue is primarily based on a fixed monthly or annual rate per user or per customer account. Our transaction revenue consists of transaction fees on a fixed or variable rate per transaction, and interchange fees. Transactions primarily include card payments, real-time payments, check payments, ACH payments, cross-border payments, pay-by-card, invoice financing, and creation of invoices. Much of our revenue comes from repeat transactions, which are an important contributor to our recurring revenue.

Previous wording

We market our BILL Spend and Expense software and BILL Divvy Card, a charge card for business expenses, to potential spending businesses and issue business-purpose charge cards through our card issuing partner banks (Issuing Banks). When a business applies for a BILL Divvy Card, we utilize, on behalf of the Issuing Bank, proprietary risk management capabilities to confirm the identity of the business, and perform a credit underwriting process to determine if the business is eligible for a BILL Divvy Card pursuant to our credit policies. Once approved for a BILL Divvy Card the spending business is provided a credit limit and can use the BILL Spend and Expense software to request virtual cards or physical cards, establish budgets, and manage spend.

Current wording

We market our BILL Spend and Expense software and BILL Divvy Card, a charge card for business credit and expense management, to potential spending businesses and issue business-purpose charge cards through our card issuing partner banks (Issuing Banks). When a business applies for a BILL Divvy Card, we utilize, on behalf of the Issuing Bank, proprietary risk management capabilities to confirm the identity of the business, and perform a credit underwriting process to determine if the business is eligible for a BILL Divvy Card pursuant to our credit policies. Once approved for a BILL Divvy Card, the spending business is provided a credit limit and can use the BILL Spend and Expense software to request virtual cards or physical cards, establish budgets, and manage spend.

Previous wording

The majority of cards on our platform are issued by Cross River Bank, a Federal Deposit Insurance Corporation (FDIC)-insured New Jersey state chartered bank, and WEX Bank, an FDIC-insured Utah state chartered bank. Under our arrangements with the Issuing Banks, we must comply with their respective credit policies and underwriting procedures, and the Issuing Banks maintain ultimate authority to decide whether to issue a card or approve a transaction. We are responsible for all fraud and unauthorized use of a card and generally are required to hold the Issuing Bank harmless from such losses unless claims regarding fraud or unauthorized use are due to the sole gross negligence of the Issuing Bank.

Current wording

The cards on our platform are issued by Cross River Bank, a Federal Deposit Insurance Corporation (FDIC)-insured New Jersey state chartered bank, and WEX Bank and WebBank, FDIC-insured Utah state chartered banks. Under our arrangements with the Issuing Banks, we must comply with their respective credit policies and underwriting procedures, and the Issuing Banks maintain ultimate authority to decide whether to issue a card or approve a transaction. We are responsible for all fraud and unauthorized use of a card and generally are required to hold the Issuing Bank harmless from such losses unless claims regarding fraud or unauthorized use are due to the sole gross negligence of the Issuing Bank.

Previous wording

In order to purchase the participation rights in the receivables, we maintain certain funding arrangements, including warehouse facilities. We typically fund some portion of these participation interest purchases by borrowing under our credit facilities, although we may also fund purchases using corporate cash.

Current wording

In order to ensure we have the operational flexibility and liquidity to purchase the participation rights in the receivables, we maintain certain funding arrangements, including warehouse facilities. We typically fund some portion of these participation interest purchases by borrowing under our credit facilities, although most purchases are funded using corporate cash.

Previous wording

Our revenue from existing businesses using our solutions is visible and predictable. For fiscal 2025, over 89% of our subscription and transaction revenue from BILL AP/AR customers came from customers who were acquired prior to the start of the fiscal year. See "—Key Business Metrics—Businesses Using Our Solutions" below for the definition of BILL AP/ARcustomers. We expand within our existing customer base by adding more users, increasing transactions per customer, launching additional products, and through pricing and packaging our services. We make it easy for SMBs to try our platform through our risk-free trial program. Should an SMB choose to become a customer after the trial period, it can take several months to adapt their financial operations to fully leverage our platform. Even with a transition period, however, we believe our customer retention is strong. Excluding those customers of our financial institution partners, approximately 86% of BILL AP/AR customers as of June 30, 2024 were still customers as of June 30, 2025.

Current wording

Our revenue from existing businesses using our solutions is visible and predictable. For fiscal 2026, over 87% of our subscription and transaction revenue from BILL AP/AR customers came from customers who were acquired prior to the start of the fiscal year. See "—Key Business Metrics—Businesses Using Our Solutions" below for the definition of BILL AP/ARcustomers. We expand within our existing customer base by adding more users, increasing transactions per customer, launching additional products, and through pricing and packaging our services. We make it easy for SMBs to try our platform through our risk-free trial program. Should an SMB choose to become a customer after the trial period, it can take several months to adapt their financial operations to fully leverage our platform. Even with a transition period, however, we believe our customer retention is strong. Excluding those customers of our financial institution partners, approximately 85% of BILL AP/AR customers as of June 30, 2025 were still customers as of June 30, 2026.

Previous wording

Our net dollar-based retention rate was 94%, 92%, and 111% during fiscal 2025, 2024, and 2023, respectively. The increase in fiscal 2025 when compared to fiscal 2024 was primarily due to increased revenue from businesses associated with financial institution partners and growth in total payment volume. The decrease in fiscal 2024 when compared to fiscal 2023 was primarily due to the change in spending patterns per customer, continued softness in the SMB economic environment, which limited payment monetization, and the migration or churn of certain customers of a bank partner.

Current wording

Our net dollar-based retention rate was 95%, 94%, and 92% during fiscal 2026, 2025, and 2024, respectively. The increase in fiscal 2026 when compared to fiscal 2025 was primarily due to increased revenue from businesses associated with financial institution partners and the impact of pricing changes on existing customers. The increase in fiscal 2025 when compared to fiscal 2024 was primarily due to increased revenue from businesses associated with financial institution partners and growth in total payment volume.

Previous wording

(1)As of June 30, 2025, the total number of BILL AP/AR customers was approximately 169,500; the total number of spending businesses that used our BILL Spend and Expense solution was approximately 41,100, and the total number of Embedded Solutions and Other customers was approximately 283,200.

Current wording

(1)As of June 30, 2026, the total number of BILL AP/AR customers was approximately 183,300; the total number of spending businesses that used our BILL Spend and Expense solution was approximately 46,500, and the total number of Embedded Solutions and Other customers was approximately 249,500.

Previous wording

(2)During fiscal 2025, the TPV by BILL AP/AR customers was approximately $279.0 billion; the total card payment volume transacted by spending businesses that used BILL Divvy Cards was approximately $21.5 billion; and the TPV transacted by Embedded Solutions and Other customers was approximately $29.3 billion.

Current wording

(2)During fiscal 2026, the TPV by BILL AP/AR customers was approximately $310.5 billion; the total card payment volume transacted by spending businesses that used BILL Divvy Cards was approximately $26.4 billion; and the TPV transacted by Embedded Solutions and Other customers was approximately $34.4 billion.

Previous wording

(3)During fiscal 2025, the total number of transactions executed by BILL AP/AR customers was approximately 47.8 million; the total number of transactions executed by spending businesses that used BILL Divvy Cards was approximately 66.4 million; and the total number of transactions executed by Embedded Solutions and Other customers was approximately 7.1 million.

Current wording

(3)During fiscal 2026, the total number of transactions executed by BILL AP/AR customers was approximately 50.4 million; the total number of transactions executed by spending businesses that used BILL Divvy Cards was approximately 79.9 million; and the total number of transactions executed by Embedded Solutions and Other customers was approximately 9.1 million.

Previous wording

We define businesses using our solutions as the summation of: (A) businesses that use our core BILL accounts payable and receivable platform (BILL AP/AR), (B) spending businesses that use our BILL Spend and Expense product, and (C) businesses that access our solutions through our embedded partners' platforms and other indirect sales channels (including our financial institution partners), and Invoice2go subscribers (Embedded Solutions and Other). Businesses using more than one of our solutions are included separately in the total for each solution utilized; as of June 30, 2025, this included approximately 15,800 businesses. Businesses using our solutions during a trial period are not counted as new businesses using our solutions during that period. If an organization has multiple entities billed separately for the use of our solutions, each entity is counted as a business using our solutions. Businesses using our solutions exclude certain network members utilizing limited features of our platform, such as those that only receive payments. The number of businesses using our solutions in the table above represents the total number of businesses using our solutions at the end of each fiscal year.

Current wording

We define businesses using our solutions as the summation of: (A) businesses that use our core BILL accounts payable and receivable platform (BILL AP/AR), (B) spending businesses that use our BILL Spend and Expense product, and (C) businesses that access our solutions through our embedded partners' platforms and other indirect sales channels (including our financial institution partners), and Invoice2go subscribers (Embedded Solutions and Other). Businesses using more than one of our solutions are included separately in the total for each solution utilized; as of June 30, 2026, this included approximately 21,400 businesses. Businesses using our solutions during a trial period are not counted as new businesses using our solutions during that period. If an organization has multiple entities billed separately for the use of our solutions, each entity is counted as a business using our solutions. Businesses using our solutions exclude certain network members utilizing limited features of our platform, such as those that only receive payments. The number of businesses using our solutions in the table above represents the total number of businesses using our solutions at the end of each fiscal year.

Previous wording

To grow revenue from businesses using our solutions, we must deliver a product experience that helps them automate their back-office financial operations. The more they use and rely upon our product offerings to automate their operations, the more transactions they process on our platform. This metric provides an important indication of the aggregate value of transactions that businesses using our solutions are completing on our platform and is an indicator of our ability to generate revenue from businesses using our solutions. We define TPV as the total value of transactions that we process on our platform during a particular period, comprising transactions from BILL AP/AR customers, BILL Divvy Card transactions, and transactions executed by Embedded Solutions and Other customers. Our calculation of TPV is presented gross of payments that may be subsequently reversed. Such reversals comprised less than 2% of TPV during each of fiscal 2025, 2024, and 2023.

Current wording

To grow revenue from businesses using our solutions, we must deliver a product experience that helps them automate their back-office financial operations. The more they use and rely upon our product offerings to automate their operations, the more transactions they process on our platform. This metric provides an important indication of the aggregate value of transactions that businesses using our solutions are completing on our platform and is an indicator of our ability to generate revenue from businesses using our solutions. We define TPV as the total value of transactions that we process on our platform during a particular period, comprising transactions from BILL AP/AR customers, BILL Divvy Card transactions, and transactions executed by Embedded Solutions and Other customers. Our calculation of TPV is presented gross of payments that may be subsequently reversed. Such reversals accounted for less than 2% of TPV during each of fiscal 2026, 2025, and 2024.

Previous wording

Service costs– Service costs consist primarily of costs that are directly attributed to processing customers’ and spending businesses' transactions (such as the cost of printing checks, postage for mailing checks, fees associated with the issuance and processing of card transactions, net of card network incentives, fees for processing payments), personnel-related costs, including stock-based compensation, for our customer success and payment operations teams, outsourced support services for our customer success team, direct and amortized costs for implementing and integrating our cloud-based platform into our customers’ systems, and cloud payments infrastructure costs. We expect that service costs will increase in absolute dollars, but may fluctuate as a percentage of revenue from period to period, as we continue to invest in growing our business and based on whether or not we are the principal or the agent under arrangements with third parties.

Current wording

Service costs– Service costs consist primarily of costs that are directly attributed to processing customers’ and spending businesses' transactions (such as the cost of printing checks, postage for mailing checks, fees associated with the issuance and processing of card transactions, net of card network incentives, and fees for processing payments), personnel-related costs, including stock-based compensation expenses, for our customer success and payment operations teams, outsourced support services for our customer success team, direct and amortized costs for implementing and integrating our cloud-based platform with our customers’ systems, and cloud payments infrastructure costs. We expect that service costs will increase in absolute dollars, but may fluctuate as a percentage of revenue from period to period, as we continue to invest in growing our business and based on whether or not we are the principal or the agent under arrangements with third parties.

Previous wording

Research and development (R&D) – R&D expenses consist primarily of personnel-related expenses, including stock-based compensation expenses, for our R&D teams, incurred in developing new products or enhancing existing products, and allocated overhead costs. We expense a substantial portion of R&D expenses as incurred. We believe that delivering new and enhanced functionality is critical to attract new customers and expand our relationship with existing customers. We expect to continue to make investments in and expand our offerings to enhance our customers’ experience and satisfaction, and to attract new customers. We expect our R&D expenses to increase in absolute dollars, but they may fluctuate as a percentage of revenue from period to period as we expand our R&D team to develop new products and product enhancements, including continued investments in our artificial intelligence tools and offerings, such as AI agents. We capitalize certain software development costs that are attributable to developing new products and adding incremental functionality to our platform and amortize such costs into service costs over the estimated life of the new product or incremental functionality, which is generally three years.

Current wording

Research and development (R&D) – R&D expenses consist primarily of personnel-related expenses, including stock-based compensation expenses, for our R&D teams, incurred in developing new products or enhancing existing products, and allocated overhead costs. We expense a substantial portion of R&D expenses as incurred. We believe that delivering new and enhanced functionality is critical to attract new customers and expand our relationship with existing customers. We expect to continue to make investments in and expand our offerings to enhance our customers’ experience and satisfaction, and to attract new customers. We expect our R&D expenses to increase in absolute dollars, but they may fluctuate as a percentage of revenue from period to period as we expand our R&D team to develop new products and product enhancements, including continued investments in our AI tools and offerings, such as AI agents. We capitalize certain internal-use software development costs that are attributable to developing new products and adding incremental functionality to our platform and amortize such costs into service costs over the estimated life of the new product or incremental functionality, which is generally three years.

Previous wording

General and administrative – General and administrative expenses consist primarily of personnel-related expenses, including stock-based compensation expenses, for finance, corporate business operations, risk management, legal and compliance, human resources, information technology, costs incurred for external professional services, losses from fraud, and allocated overhead costs. We expect to incur additional general and administrative expenses as we explore various growth initiatives, which include incurring higher costs for professional services. We also expect to increase the size of our general and administrative functions to support the growth in our business. As a result, we expect that our general and administrative expenses will increase in absolute dollars but may fluctuate as a percentage of revenue from period to period.

Current wording

General and administrative – General and administrative expenses consist primarily of personnel-related expenses, including stock-based compensation expenses, for finance, corporate business operations, risk management, legal and compliance, human resources, and information technology functions, costs incurred for external professional services, losses from fraud, and allocated overhead costs. We expect to incur additional general and administrative expenses as we explore various growth initiatives, which include incurring higher costs for professional services. We also expect to increase the size of our general and administrative functions to support the growth in our business. As a result, we expect that our general and administrative expenses will increase in absolute dollars but may fluctuate as a percentage of revenue from period to period.

Previous wording

Provision for expected credit losses – Provision for expected credit losses represents the amount of expense required to maintain the allowance for expected credit losses on our consolidated balance sheets, which represents management’s estimate of expected credit losses. In the event that our receivables outperform expectation and/or we reduce our expectation of credit losses in future periods, we may release reserves and thereby reduce the provision for expected credit losses. The provision is determined based on our estimate of expected credit losses on acquired cards receivables, loans held for investment and accounts receivable on our balance sheets, changes in our estimate of expected credit losses on receivables outstanding and loans held for investment as of the end of the period and the net charge-offs incurred in the period.

Current wording

Provision for expected credit losses – Provision for expected credit losses represents the amount of expense required to maintain the allowance for expected credit losses on our consolidated balance sheets, which represents management’s estimate of expected credit losses. In the event that our receivables outperform expectation and/or we reduce our expectation of credit losses in future periods, we may release reserves and thereby reduce the provision for expected credit losses. The provision is determined based on our estimate of expected credit losses on acquired card receivables, loans held for investment and accounts receivable on our balance sheets, changes in our estimate of expected credit losses on receivables outstanding and loans held for investment as of the end of the period and the net charge-offs incurred in the period.

Previous wording

Depreciation and amortization – Depreciation and amortization consist of depreciation and amortization of property and equipment, and amortization of acquired intangibles, such as developed technology, customer relationship, and trade names. Amortization of capitalized internal-use software costs paid in cash are excluded.

Current wording

Depreciation and amortization – Depreciation and amortization consists of depreciation and amortization of property and equipment, and amortization of acquired intangibles, such as developed technology, and customer relationships. Amortization of capitalized internal-use software costs paid in cash is excluded.

Previous wording

Restructuring– Restructuring costs consist primarily of employee severance and other employment termination benefits, including commission, and stock-based compensation expense. Additionally, these costs include contract termination expenses and other costs related to the execution of our restructuring plan announced on December 5, 2023, which included a reduction in force (RIF) and closure of our office in Sydney, Australia (Restructuring Plan). Refer to Note 15 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information on the Restructuring Plan.

Current wording

Restructuring– Restructuring costs consist primarily of employee severance and other employment termination benefits related to the RIFs. Additionally, these costs include other costs related to the execution of our efforts to improve organizational agility and efficiency, while also seeking to drive greater profitability. Refer to Note 15 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.

Previous wording

Other income, net – Other income, net consist primarily of interest income on our corporate funds, gain on debt extinguishment and interest expense on our borrowings (including amortization of debt discount and issuance costs).

Current wording

Other income, net – Other income, net consists primarily of interest income on our corporate funds, gain on debt extinguishment and interest expense on our borrowings (including amortization of debt discount and issuance costs).

Previous wording

Provision for income taxes – Income tax expense consist of U.S. federal, state and foreign income taxes. We maintain a full valuation allowance against our U.S. federal, state and Australian net deferred tax assets as we have concluded that it is more likely than not that we will not realize our net deferred tax assets.

Current wording

Provision for income taxes – Income tax expense consists of U.S. federal, state and foreign income taxes. We maintain a full valuation allowance against our U.S. federal, state and Australian net deferred tax assets as we have concluded that it is more likely than not that we will not realize our net deferred tax assets.

Previous wording

(2)Depreciation and amortization do not include amortization of capitalized internal-use software costs paid in cash.

Current wording

(2)Depreciation and amortization does not include amortization of capitalized internal-use software costs paid in cash of $33.9 million, $14.5 million, and $9.4 million during each of the years ended June 30, 2026, 2025, and 2024, respectively, which are included in service costs and general and administrative in the consolidated statements of operations.

Previous wording

Total revenue increased by $172.4 million, or 13% during fiscal 2025 as compared to fiscal 2024, primarily due to:

Current wording

Total revenue increased by $190.6 million, or 13%, during fiscal 2026 as compared to fiscal 2025, primarily due to:

Previous wording

•a $163.1 million increase in transaction fee revenue primarily due to increased total payment volume driven by the increase in customer adoption of our products; and

Current wording

•a $182.5 million increase in transaction fee revenue primarily due to increased total payment volume driven by the increase in customer adoption of our BILL AP/AR and BILL Spend and Expense products; and

Previous wording

•a $15.0 million increase in subscription fee revenue primarily due to an increase in customers as compared to the same prior year period; offset by

Current wording

•a $21.4 million increase in subscription fee revenue primarily due to an increase in BILL AP/AR customers as compared to the same prior year period; offset by

Previous wording

•a $5.7 million decrease in interest on funds held for customers primarily due to lower yield driven by the decrease in interest rates.

Current wording

•a $13.4 million decrease in interest on funds held for customers primarily due to lower yield driven by the decrease in interest rates.

Previous wording

(1)Consists of depreciation of property and equipment and amortization of developed technology, excluding amortization of capitalized internal-use software costs paid in cash.

Current wording

(1)Consists of depreciation of property and equipment and amortization of developed technology, excluding amortization of capitalized internal-use software costs paid in cash of $31.3 million, $14.5 million, and $9.4 million during each of the years ended June 30, 2026, 2025, and 2024, respectively, which are included in service costs in the consolidated statements of operations.

Previous wording

Service costs increased by $39.9 million during fiscal 2025 as compared to fiscal 2024, primarily due to:

Current wording

Service costs increased by $36.0 million during fiscal 2026 as compared to fiscal 2025, primarily due to:

Previous wording

•a $36.6 million increase in direct costs associated with the processing of our customers’ payment transactions, which was driven by the increase in the number of customers, increased adoption of new product offerings, and an increase in the volume of transactions; and

Current wording

•a $21.1 million increase in direct costs associated with the processing of our customers' payment transactions and data hosting services, which were driven by the increase in customer adoption of our products; and

Previous wording

•a $52.2 million increase in rewards expense in connection with our BILL Divvy Cards as a result of increased transaction volume. Rewards expense increased from 48% to 49% as a percentage of revenue from spend and expense interchange fees primarily due to lower interchange fees relative to total card payment volume;

Current wording

•a $75.6 million increase in rewards expense in connection with our BILL Divvy Cards as a result of increased transaction volume. Rewards expense increased from 49% to 51% as a percentage of revenue from spend and expense interchange fees primarily due to higher reward rates; and

Previous wording

•a $6.0 million increase in advertising, marketing initiatives, and software subscription expenses; and

Current wording

•a $3.0 million increase in advertising spend, marketing initiatives, software subscription expenses, and shared overhead; offset by

Previous wording

•a $6.7 million decrease in professional and consulting fees for outside services.

Current wording

•a $13.0 million increase in consulting fees for outside services, including fees related to shareholders' activism; and

Previous wording

Other income, net decreased by $36.8 million during fiscal 2025 as compared to fiscal 2024, primarily due to the following:

Current wording

Other income, net decreased by $47.7 million during fiscal 2026 as compared to fiscal 2025, primarily due to the following:

Previous wording

•a $4.7 million decrease due to a lower gain on debt extinguishment resulting from the partial repurchases of our 2025 Notes and 2027 Notes.

Current wording

•a $40.6 million decrease due to the absence of gain on debt extinguishment resulting from the partial repurchases of our 2025 Notes and 2027 Notes; and

Previous wording

To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly-titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Current wording

To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different from similarly-titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Previous wording

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We are presenting these non-GAAP metrics to assist investors in seeing our financial performance using a management view. We believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

Current wording

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We are presenting these non-GAAP metrics to help investors understand our financial performance from management's perspective. We believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

Previous wording

(1)Consists of depreciation of property and equipment and amortization of developed technology, excluding amortization of capitalized internal-use software costs paid in cash.

Current wording

(1)Consists of depreciation of property and equipment and amortization of developed technology, excluding amortization of capitalized internal-use software costs paid in cash of $31.3 million, $14.5 million, and $9.4 million during each of the years ended June 30, 2026, 2025, and 2024, respectively, which are included in service costs in the consolidated statements of operations.