Shares of Bill Holdings Inc., a key provider of financial software services to small businesses, plummeted by 29% in after-hours trading following a downward revision of its annual sales forecast. The company assists small enterprises with payment, invoice, and expense management.
The firm revised its revenue outlook for the year to between $1.205 billion and $1.245 billion, down from its previous estimate of $1.29 billion-$1.31 billion. It also adjusted its profit-per-share prediction to a range of $1.64-$1.97.
Looking ahead to the fiscal second quarter, Bill Holdings is expecting sales to fall between $293 million and $303 million and an adjusted earnings per share of 35-44 cents, both figures falling short of market expectations.
Despite surpassing estimates in the fiscal first quarter with earnings per share of 54 cents on a revenue of $305 million, the company has acknowledged that challenging macroeconomic conditions have adversely affected their performance.
"The current economic climate has presented us with significant challenges," said John Rettig, CFO of Bill Holdings. He noted that these difficulties have had a negative impact on the company's performance and are the primary reason for the revised outlook.
In spite of these challenges, Bill Holdings remains committed to delivering essential financial software services to small businesses, providing them with tools for efficient payment, invoice, and expense management.
InvestingPro Insights
According to InvestingPro, Bill Holdings holds more cash than debt on its balance sheet and its liquid assets exceed short term obligations, positioning it well to weather economic challenges. Despite a recent slowdown in revenue growth and a significant fall in price over the last three months, the company's gross profit margin remains impressive at 85.76% as of Q4 2023, with gross profits reaching $907.77 million.
InvestingPro Tips suggest that while the company's net income is expected to grow this year, it has not been profitable over the last twelve months. However, analysts predict the company will return to profitability this year. It's worth noting that the stock price movements can be quite volatile, as evidenced by a 23.83% decrease in the last three months of 2023.
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