Investors have been fretting over BILL Holdings' slowing pace of new customer additions, but UBS Securities sees a different story taking shape: the company's growth is shifting from adding accounts to getting more out of the ones it already has.
In a research note Wednesday, UBS said that a combination of larger payment volumes, better monetization, and share buybacks could keep BILL's revenue growing in the low double digits to mid-teens, even as net new customers decelerate. The bank's view offers a counterpoint to the market's focus on the headline slowdown.
What's behind the slowdown?
BILL, which provides payment and financial automation software for small and mid-sized businesses, has long been valued for its ability to add customers rapidly. But that engine is cooling. In the fiscal first quarter, net new customers came in at roughly 600, a sharp drop from the pace investors had grown used to. Total payment volume growth also slowed to 12% year over year, down from the low 20s in prior periods.
Those numbers have dominated the conversation, and it's easy to see why: for a company whose valuation has been tied to growth, a slowdown in new signups can spook the market. But UBS argues that focusing only on those figures misses the more important shift underneath.
The higher-value customer story
According to UBS, the quality of the customers BILL is adding—and the behavior of its existing base—matters more than the raw count. The company appears to be attracting larger businesses that move more money through the platform. That's significant because BILL's revenue is largely tied to payment volumes and transaction fees, not just the number of accounts.
If bigger customers are coming on board, each new account can contribute disproportionately more to the top line. At the same time, existing customers are processing larger payment volumes, which boosts revenue without requiring the same level of acquisition spending.
UBS also pointed to stronger monetization—meaning BILL is earning more per dollar of payment volume—as a key driver. That could come from higher take rates, new product adoption, or a mix shift toward higher-margin services.
Finally, the bank highlighted share buybacks as a supporting factor. By reducing the share count, buybacks can boost earnings per share even when revenue growth is moderating, giving investors a clearer path to per-share gains.
What it means for investors
For everyday investors, the UBS note is a reminder that growth isn't a single number. A company can see its customer acquisition slow and still deliver healthy revenue and earnings growth if the economics of its existing business improve.
In BILL's case, the shift toward higher-value customers could make the business more efficient. Acquiring a handful of large clients that generate significant payment volume may be more profitable than signing up hundreds of small ones that churn quickly. That dynamic can support margins and cash flow, which in turn can fund buybacks.
That said, the slowdown in net new customers is real, and it raises questions about the long-term addressable market. If BILL is increasingly reliant on a smaller pool of larger customers, its growth could become more concentrated and potentially more volatile. Investors will want to watch whether the company can sustain the higher monetization and volume growth that UBS expects.
The broader context also matters. BILL operates in the competitive fintech space, where payment companies are constantly vying for business clients. The company's ability to retain its higher-value customers and keep them expanding their usage will be critical.
UBS's view echoes a theme seen across the software and payments sectors: as the easy growth from new signups fades, companies are leaning on existing customers and financial engineering to keep the story going. It's a strategy that can work, but it requires execution.
For now, UBS's outlook suggests that BILL's growth story isn't breaking down—it's changing shape. Investors who can look past the headline customer numbers may find a more nuanced picture, one where the company's future depends less on how many customers it adds and more on how much value it can extract from the ones it has.
