BILL Holdings, Inc.

Previous wording

BILL is the intelligent finance platform trusted by nearly half a million businesses and their accountants to manage, move, and maximize their money. BILL powers businesses ranging from fast-moving startups to growing companies with complex operations. We use artificial intelligence (AI) to deliver strategic finance capabilities in one integrated platform that includes accounts payable (AP), accounts receivable (AR), expenses, forecasting, procurement, and more. With more than 8 million network members, our platform's total payment volume represents approximately 1% of U.S. gross domestic product. Headquartered in San Jose, California, BILL is a trusted partner of leading U.S. financial institutions, accounting firms, and software providers.

Current wording

BILL is the intelligent finance platform trusted by nearly half a million businesses and their accountants to manage, move, and maximize their money. BILL powers businesses ranging from fast-moving startups to growing companies with complex operations. We use artificial intelligence (AI) to deliver strategic finance capabilities in one integrated platform that includes accounts payable (AP), accounts receivable (AR), expenses, forecasting, procurement, and more. With more than 9 million network members, our platform's total payment volume represents over 1% of U.S. gross domestic product. Headquartered in San Jose, California, BILL is a trusted partner of leading U.S. financial institutions, accounting firms, and software providers.

Previous 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 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 March 31, 2026, 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 some of the largest financial institutions for SMBs in the United States (U.S.). As we add customers and partners, we expect our network to continue to grow organically.

Current wording

We efficiently reach small and midsized businesses (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 September 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 recently launched BILL AI, including our first suite of AI agents, which are designed to simplify and accelerate SMB workflows. Examples include W-9 filings, customer support and assistance, touchless transactions, automatic reconciliations and complex invoice coding. We have enhanced the capabilities of our Supplier Payments Plus product with expanded digital acceptance and greater control of preferences. In addition, we previously announced embed partnerships with Paychex, Oracle NetSuite, and Acumatica, which we expect will extend our platform's reach and offer new payment capabilities to our partners' users. Finally, we recently launched BILL Travel, our travel management offering, to empower our customers' employees to book trips and track expenses through our platform.

Current wording

In fiscal 2026, we launched BILL AI, including our first suite of AI agents, which are designed to simplify and accelerate SMB workflows, including W-9 filings, customer support and assistance, touchless transactions, automatic reconciliations and complex invoice coding. We recently announced an expanded suite of AI features, including new risk intelligence, a consolidated control hub, AI-assisted onboarding, an external MCP connector, a smarter inbox, and BILL inside Claude connector marketplace. A newly announced collaboration with Visa and Billtrust marks the debut of the first live pilot empowering AI agents to execute approved buyer invoice payments through supplier portals from start to finish. Furthermore, our newly announced embed partnership with Blackbaud expands upon prior partnerships with Paychex, Oracle NetSuite, and Acumatica — all under our "Embed 2.0" initiative, which aims to deliver our platform capabilities as embeddable solutions through third-party platforms. We expect this approach will extend our platform's reach and offer new payment capabilities to our partners' users.

Previous wording

We have grown rapidly and scaled our business operations in recent periods. Our revenue was $406.6 million and $358.2 million during the three months ended March 31, 2026 and 2025, respectively, representing an increase of $48.3 million. Our revenue was $1,217.0 million and $1,079.2 million during the nine months ended March 31, 2026 and 2025, respectively, representing an increase of $137.8 million. We generated a net income of $12.8 million and a net loss of $11.6 million during the three months ended March 31, 2026 and 2025, respectively, and a net income of $7.2 million and $30.9 million during the nine months ended March 31, 2026 and 2025, respectively.

Current wording

We have grown significantly and scaled our business operations in recent periods. Our revenue was $353.8 million and $314.5 million during the three months ended September 30, 2026 and 2025, respectively, representing an increase of $39.3 million. We generated net income of $60.3 million compared to a net loss of $3.0 million during the three months ended September 30, 2026 and 2025, respectively.

Previous 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, the conflict in Iran and related supply chain disruptions, 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.

Current wording

Current macroeconomic conditions and uncertainties, including volatility in interest rates and borrowing costs, inflation, changes in currency exchange rates (including changes in the value of the U.S. dollar), 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 a recession or increased borrowing costs, moderate their expenditures, shift to lower-cost methods of payment, or cease operations entirely. The interest income we generate on funds held for customers is subject to the effects of interest rate volatility. 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 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 II, Item 1A of this Quarterly Report on Form 10-Q.

Current wording

Any of the conditions and uncertainties described above 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, actual or perceived instability in the U.S. and global banking systems, or ongoing global geopolitical conflicts will have on our future results of operations, liquidity, and financial condition due to numerous uncertainties, including economic downturns or recessions, government budget cuts and government shutdowns, tariffs and other changes in trade policy, changes in central bank policies and interest rates, rates of inflation, changes in the value 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 II, Item 1A of this Quarterly Report on Form 10-Q.

Previous wording

(1)As of March 31, 2026, the total number of BILL AP/AR customers was approximately 181,500; the total number of spending businesses that used our BILL Spend and Expense solution was approximately 45,600; and the total number of Embedded Solutions and Other customers was approximately 266,700.

Current wording

(1)As of September 30, 2026, the total number of BILL AP/AR customers was approximately 186,300; the total number of spending businesses that used our BILL Spend and Expense solution was approximately 47,100; and the total number of Embedded Solutions and Other customers was approximately 241,900.

Previous wording

(2)During the three months ended March 31, 2026, the Total Payment Volume (TPV) by BILL AP/AR customers was approximately $73.9 billion; the total card payment volume transacted by spending businesses that used BILL Divvy Cards was approximately $6.6 billion; and the TPV transacted by Embedded Solutions and Other customers was approximately $8.2 billion. During the nine months ended March 31, 2026, the TPV by BILL AP/AR customers was approximately $228.6 billion; the total card payment volume transacted by spending businesses that used BILL Divvy Cards was approximately $19.3 billion; and the TPV transacted by Embedded Solutions and Other customers was approximately $25.2 billion.

Current wording

(2)During the three months ended September 30, 2026, the Total Payment Volume (TPV) by BILL AP/AR customers was approximately $85.0 billion; the total card payment volume transacted by spending businesses that used BILL Divvy Cards was approximately $6.9 billion; and the TPV transacted by Embedded Solutions and Other customers was approximately $9.9 billion.

Previous wording

(3)During the three months ended March 31, 2026, the total number of transactions executed by BILL AP/AR customers was approximately 12.1 million; the total number of transactions executed by spending businesses that used BILL Divvy Cards was approximately 19.5 million; and the total number of transactions executed by Embedded Solutions and Other customers was approximately 2.4 million. During the nine months ended March 31, 2026, the total number of transactions executed by BILL AP/AR customers was approximately 37.4 million; the total number of transactions executed by spending businesses that used BILL Divvy Cards was approximately 58.1 million; and the total number of transactions executed by Embedded Solutions and Other customers was approximately 6.5 million.

Current wording

(3)During the three months ended September 30, 2026, the total number of transactions executed by BILL AP/AR customers was approximately 12.9 million; the total number of transactions executed by spending businesses that used BILL Divvy Cards was approximately 22.3 million; and the total number of transactions executed by Embedded Solutions and Other customers was approximately 2.8 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 quarter.

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 quarter.

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 the three and nine months ended March 31, 2026 and 2025.

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 the three months ended September 30, 2026 and 2025.

Previous wording

Sales and marketing – Sales and marketing expenses consist primarily of rewards expense in connection with our card rewards programs, personnel-related expenses, including stock-based compensation expenses, for our sales and marketing teams, sales commissions, marketing program expenses, travel-related expenses, and costs to market and promote our platform through advertisements, marketing events, partnership arrangements, direct customer acquisition, and allocated overhead costs. Sales commissions that are incremental to obtaining new customer contracts are deferred and amortized ratably over the estimated period of our relationship with new customers.

Current wording

Sales and marketing – Sales and marketing expenses consist primarily of personnel-related expenses, including stock-based compensation expenses, for our sales and marketing teams, sales commissions, marketing program expenses, travel-related expenses, and costs to market and promote our platform through advertisements, marketing events, partnership arrangements, direct customer acquisition, and allocated overhead costs. Sales commissions that are incremental to obtaining new customer contracts are deferred and amortized ratably over the estimated period of our relationship with new customers.

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 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.

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 condensed 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 consists of depreciation and amortization of property and equipment, and amortization of acquired intangibles, such as developed technology, and customer relationship. Amortization of capitalized internal-use software costs paid in cash is 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 related to the RIFs. Additionally, these costs may include contract termination expenses and 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 12 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

Current wording

Restructuring – Restructuring costs consist primarily of employee severance and other employment termination benefits related to the RIFs, and non-cash impairment charges related to operating lease ROU assets and property and equipment associated with office space we exited and intend to sublease. 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 12 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q 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 and state 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 does not include amortization of capitalized internal-use software costs paid in cash of $7.9 million and $25.0 million during the three and nine months ended March 31, 2026, respectively, and $3.6 million and $10.9 million during the three and nine months ended March 31, 2025, respectively, which are included in service costs and general and administrative in the condensed consolidated statements of operations.

Current wording

(3) Depreciation and amortization does not include amortization of capitalized internal-use software costs paid in cash of $10.5 million and $4.5 million during the three months ended September 30, 2026 and 2025, respectively, which are included in service costs and general and administrative in the condensed consolidated statements of operations.

Previous wording

The following table sets forth the components of our consolidated statements of operations for the periods presented as a percentage of revenue:

Current wording

The following table sets forth the components of our condensed consolidated statements of operations for the periods presented as a percentage of revenue:

Previous wording

Comparison of the three and nine months ended March 31, 2026 and 2025

Current wording

Comparison of the three months ended September 30, 2026 and 2025

Previous wording

The following table sets forth our revenue during the three and nine months ended March 31, 2026 and 2025, respectively (amounts in thousands):

Current wording

The following table sets forth our revenue during the three months ended September 30, 2026 and 2025, respectively (amounts in thousands):

Previous wording

Total revenue increased by $48.3 million and $137.8 million during the three and nine months ended March 31, 2026, respectively, as compared to the prior year period, primarily due to:

Current wording

Total revenue increased by $39.3 million during the three months ended September 30, 2026 as compared to the prior year period, primarily due to:

Previous wording

•a $44.5 million and $135.3 million increase, respectively, in transaction fees primarily due to increased total payment volume driven by the increase in customer adoption of our products; and

Current wording

•a $33.2 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 $6.3 million and $14.1 million increase, respectively, in subscription fees primarily due to an increase in customers as compared to the same prior year period; partially offset by

Current wording

•a $6.5 million increase in subscription fee revenue primarily due to an increase in BILL AP/AR customers as compared to the same prior year period.

Previous wording

Cost of revenue, gross profit, and gross margin during the three and nine months ended March 31, 2026 and 2025, respectively, were as follows (amounts in thousands):

Current wording

Cost of revenue, gross profit, and gross margin during the three months ended September 30, 2026 and 2025, respectively, were as follows (amounts in thousands):

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 of $7.2 million and $23.5 million during the three and nine months ended March 31, 2026, respectively, and $3.6 million and $10.9 million during the three and nine months ended March 31, 2025, respectively, which are included in service costs.

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 $9.3 million and $4.5 million during the three months ended September 30, 2026 and 2025, respectively, which are included in service costs.

Previous wording

Service costs increased by $6.0 million and $31.4 million during the three and nine months ended March 31, 2026, respectively, as compared to the prior year periods, primarily due to:

Current wording

Service costs increased by $2.9 million during the three months ended September 30, 2026 as compared to the prior year period, primarily due to:

Previous wording

•a $9.1 million increase in consulting fees for outside services, including fees related to shareholders' activism;

Current wording

•a $2.8 million decrease in consulting fees for outside services, including fees related to shareholders' activism.

Previous wording

General and administrative expenses decreased by $1.6 million during the three months ended March 31, 2026 as compared to the prior year period, primarily due to the following:

Current wording

Provision for expected credit losses decreased by $1.6 million during the three months ended September 30, 2026 as compared to the prior year period. Provision for expected credit losses from acquired card receivables decreased by $1.9 million during the three months ended September 30, 2026, as compared to the prior year period, primarily due to improvements in delinquency performance, partially offset by portfolio growth.

Previous wording

Depreciation and amortization increased by $2.1 million and $5.6 million during the three and nine months ended March 31, 2026, respectively, as compared to the prior year periods, primarily due to higher amortization of capitalized internal-use software costs during the periods.

Current wording

Depreciation and amortization increased by $2.0 million during the three months ended September 30, 2026 as compared to the prior year period, primarily due to higher amortization of capitalized internal-use software costs during the period.

Previous wording

Other income, net decreased by $3.5 million during the three months ended March 31, 2026, as compared to the prior year period, primarily due to a decrease in interest income of $1.8 million resulting from lower yield driven by the decrease in interest rates.

Current wording

Other income, net decreased by $7.6 million during the three months ended September 30, 2026 as compared to the prior year period, primarily due to an $8.0 million decrease in interest income as a result of a lower average balance of corporate funds, and lower yields driven by the decrease in average interest rates throughout the quarter.

Previous wording

We define non-GAAP gross profit as gross profit minus depreciation and amortization, and stock-based compensation and related payroll taxes charged to cost of revenue. Non-GAAP gross margin is defined as non-GAAP gross profit, divided by total revenue. We believe non-GAAP gross profit and non-GAAP gross margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations. The following table shows a reconciliation of our non-GAAP gross profit and non-GAAP gross margin to our gross profit and gross margin for the periods presented (amounts in thousands):

Current wording

We define non-GAAP gross profit as gross profit adjusted for depreciation and amortization, and stock-based compensation and related payroll taxes charged to cost of revenue. Non-GAAP gross margin is defined as non-GAAP gross profit, divided by total revenue. We believe non-GAAP gross profit and non-GAAP gross margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations. The following table shows a reconciliation of our non-GAAP gross profit and non-GAAP gross margin to our gross profit and gross margin for the periods presented (amounts in thousands):

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 of $7.2 million and $23.5 million during the three and nine months ended March 31, 2026, respectively, and $3.6 million and $10.9 million during the three and nine months ended March 31, 2025, respectively, which are included in service costs in the condensed consolidated statements of operations.

Current wording

(2) Consists of depreciation of property and equipment and amortization of developed technology that are revenue generating, excluding amortization of capitalized internal-use software costs paid in cash of $9.3 million and $4.5 million during the three months ended September 30, 2026 and 2025, respectively. These amounts are included in service costs in the condensed consolidated statements of operations.

Previous wording

Free cash flow is a non-GAAP measure defined as net cash provided by operating activities, adjusted by purchases of property and equipment and capitalization of internal-use software costs. We believe free cash flow is an important liquidity measure of the cash that is generated, after incurring operating expenses, purchases of property and equipment and capitalization of internal-use software costs, for future operational expenses and investment in our business. Free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash in the ordinary course of business. One limitation of free cash flow is that it does not reflect our future contractual commitments. Additionally, free cash flow does not represent the total increase or decrease in our cash balance for a given period. Once our business needs and obligations are met, cash can be used to maintain strong balance sheets and invest in future growth. The following table provides a reconciliation of our free cash flow to net cash provided by operating activities for the periods presented (in thousands):

Current wording

Free cash flow is a non-GAAP measure defined as net cash provided by operating activities, less purchases of property and equipment and capitalization of internal-use software costs. We believe free cash flow is an important liquidity measure of the cash that is generated, after incurring operating expenses, purchases of property and equipment and capitalization of internal-use software costs, for future operational expenses and investment in our business. Free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash in the ordinary course of business. One limitation of free cash flow is that it does not reflect our future contractual commitments. Additionally, free cash flow does not represent the total increase or decrease in our cash balance for a given period. Once our business needs and obligations are met, cash can be used to maintain strong balance sheets and invest in future growth. The following table provides a reconciliation of our free cash flow to net cash provided by operating activities for the periods presented (in thousands):

Previous wording

As of March 31, 2026, our principal sources of liquidity were our cash and cash equivalents of $1.0 billion, our available-for-sale short-term investments of $1.2 billion, and our available undrawn Revolving Credit Facilities (as defined below) of $270.0 million. Our cash equivalents are comprised primarily of money market funds, certificates of deposit, and investments in debt securities with original maturities of three months or less at the time of purchase. Our short-term investments are comprised primarily of available-for-sale investments in corporate bonds, certificates of deposit, asset-backed securities, municipal bonds, and U.S. treasury securities with original maturities of more than three months. Our corporate deposits held at large multinational financial institutions and U.S. national or regional banks, may at times exceed federally insured limits. We monitor the financial strength of the financial institutions with which we do business to ensure they are financially sound and present minimal credit risk. We further believe the associated risk of concentration for our investments is mitigated by holding a diversified portfolio of highly rated investments consisting of the money market funds and short-term debt securities described above. We have a total borrowing capacity of $600.0 million from our Revolving Credit Facilities, and have drawn $330.0 million as of March 31, 2026. Our principal uses of cash are funding our operations and other working capital requirements, including the contractual and other obligations discussed below.

Current wording

As of September 30, 2026, our principal sources of liquidity were our cash and cash equivalents of $915.5 million, our available-for-sale short-term investments of $678.1 million, and our available undrawn Revolving Credit Facilities (as defined below) of $270.0 million. Our cash equivalents are comprised primarily of money market funds, certificates of deposit, and investments in debt securities with original maturities of three months or less at the time of purchase. Our short-term investments are comprised primarily of available-for-sale investments in corporate bonds, certificates of deposit, asset-backed securities, municipal bonds, and U.S. treasury securities with original maturities of more than three months. Our corporate deposits held at large multinational financial institutions and U.S. national or regional banks, may at times exceed federally insured limits. We monitor the financial strength of the financial institutions with which we do business to ensure they are financially sound and present minimal credit risk. We further believe the associated risk of concentration for our investments is mitigated by holding a diversified portfolio of highly rated investments consisting of the money market funds and short-term debt securities described above. We have a total borrowing capacity of

Previous wording

As of March 31, 2026, our principal commitments to settle our contractual obligations consisted of our 2027 Notes, 2030 Notes (as defined below), and outstanding borrowings from our Revolving Credit Facilities as further discussed below. For additional discussion about our Notes and Revolving Credit Facilities, refer to Note 7 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. In addition, we have minimum commitments under our noncancellable operating lease agreements and agreements with certain vendors. There have been no material changes to our contractual obligations or litigation from those disclosed in Note 14 to the financial statements in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (2025 10-K), except for commitments disclosed in Note 11 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

As of September 30, 2026, our principal commitments to settle our contractual obligations consisted of our 2027 Notes, 2030 Notes (as defined below), and outstanding borrowings from our Revolving Credit Facilities as further discussed below. For additional discussion about our Notes and Revolving Credit Facilities, refer to Note 7 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. In addition, we have minimum commitments under our noncancellable operating lease agreements and agreements with certain vendors. There have beenno material changes to our contractual obligations or litigation from those disclosed in Note 14 to the financial statements in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026 (2026 10-K).

Previous wording

In August 2025, our board of directors authorized an additional share repurchase program pursuant to which we announced our intention to purchase up to $300.0 million of our outstanding shares of common stock (the August 2025 Share Repurchase Program). For additional discussion about our share repurchase program activity during the period and shares available for future repurchases, refer to Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

In August 2025, our board of directors authorized a share repurchase program pursuant to which we announced our intention to purchase up to $300.0 million of our outstanding shares of common stock (the August 2025 Share Repurchase Program).

Previous wording

In April 2026, our board of directors authorized the repurchase of up to $1.0 billion in shares of our outstanding common stock, which authorization includes unused amounts under the August 2025 Share Repurchase Program (the 2026 Share Repurchase Authorization). Pursuant to this authorization, we may repurchase such shares from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The timing and total amount of stock repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. This authorization has a term of 24 months, may be suspended, discontinued or modified at any time, and does not obligate us to acquire any amount of common stock.

Current wording

In May 2026, we announced that our board of directors authorized the repurchase of up to $1.0 billion in shares of our outstanding common stock, which authorization includes unused amounts under the August 2025 Share Repurchase Program (the 2026 Share Repurchase Authorization). Pursuant to this authorization, we may repurchase such shares from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The timing and total amount of stock repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. This authorization has a term of 24 months, may be suspended, discontinued or modified at any time, and does not obligate us to acquire any amount of common stock.

Previous wording

Our primary source of cash provided by our operating activities is our revenue from subscription and transaction fees. Our subscription revenue is primarily based on a fixed monthly or annual rate per user or per customer account. Our transaction revenue is comprised of transaction fees on a fixed or variable rate per type of transaction. We also generate cash from the interest earned on both corporate funds and funds held in trust on behalf of customers. Our primary uses of cash in our operating activities include payments for employees' salaries and related costs, payments to third parties to fulfill our payment transactions, payments to sales and marketing partners, payments for card rewards expenses, and other general corporate expenditures.

Current wording

Our primary source of cash provided by our operating activities is our revenue from subscription and transaction fees. Our subscription revenue is primarily based on a fixed monthly or annual rate per user or per customer account. Our transaction revenue is comprised of transaction fees on a fixed or variable rate per type of transaction. We also generate cash from the interest earned on both corporate funds and funds held in trust on behalf of customers. Our primary uses of cash in our operating activities include payments for employees' salaries and related costs, payments to third parties to fulfill our payment transactions, payments to sales and marketing partners, payments for card rewards, and other general corporate expenditures.