Recent strong fluctuations in the Bill.com stock have taken place. The software company focuses on the digitization of accounting and has shown high growth rates in recent years. However, the recently presented figures have caused some investors to become uncertain and resulted in a noticeable sale of the stock.

As uncertain as the investors are, some of the company insiders are showing confidence. Two insiders used the price dip to stock up on significant stock packages.

Bill.com revolutionizes payments, founded in 2006 by Rene Lacerte, Bill.com supports companies in the completion of accounting and invoicing. The cloud-based software digitalizes and automates back-office financial processes for small and medium-sized businesses. Payment processes are to be rationalized in order to save valuable time and money.

Specifically, all processes are brought together on the software platform. Incoming documents such as invoices arriving by email are automatically forwarded and organized with the help of artificial intelligence. The user only has to log in and confirm the invoice receipt in the system. Payments can also be made and received on the platform, so that a better overview of the payment flows in one’s own company is obtained. All these processes can be synchronized with the usual accounting software and no longer have to be entered manually.

Subscription model provides well-planned revenues Bill.com operates a SaaS business model (Software-as-a-Service). There are basically three sources of income: first, monthly subscription fees from customers, which contributed 20% to total sales last time. Secondly, transaction-dependent fees, which were responsible for 66% of total sales and last but not least revenues from the interest on customer funds held in trust. With a contribution of around 13% in sales, this area benefits from the significantly higher interest rate.

Continued high growth dynamics The most recent figures beat expectations: revenue rose 33% to $305 million in the first quarter (Bill.com’s fiscal year ends June 30th). This exceeded analyst estimates by another $6.7 million (Source: Seeking Alpha).

Bill.com also scored points in new customer acquisition: the number of customers increased 12% year-over-year to 471,000. In total, the company processed payments valued at $70 billion, an increase of 8% from the previous quarter. In the past quarter, core business revenues (subscription fees + transaction-dependent fees) rose 24% to $265 million, while interest income increased 166% from $15 to $40 million.

Higher profit than expected In the end, the software specialist reached the profit zone on an adjusted basis. A net result of $63.9 million remained, much more than in the previous quarter ($16.9 million). In the end, an adjusted profit of 54 cents per share was recorded. This was 4 cents better than analysts had expected beforehand (Source: Seeking Alpha).

Revenue increase of up to 18% expected The delivered figures were therefore solid. On the other hand, investors were disappointed with the slightly reduced full-year forecast: CEO René Lacerte expects revenues of $1.21 to $1.25 billion (previously $1.28 to $1.31 billion). If the forecast is reached, Bill.com will achieve revenue growth of 14 to 18% in the current fiscal year. The company is also making progress on the way to the profit zone: the software specialist expects an adjusted net income of $195 to $235 million. Previously, the forecast was $217 to $235 million. The lower limit was therefore widened.

Insiders with conspicuous stock purchases According to the company insiders, potential could emerge at the current price level. After all, there have been the first stock purchases in over a year: at prices between $56.49 and $58, members of the board of directors Scott Wagner and David Hornik acquired 26,460 shares. Accordingly, the value of the purchases amounted to over $1.5 million. Wagner increased his stake by 973% to 9,649 shares, while Hornik grabbed 17,710 shares for the first time. After that, the stock reacted positively and ended trading on Friday at $63.72.