BILL Holdings, Inc.

(Unaudited)

NOTE 1 –THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES

Bill.com, Inc. was incorporated in the State of Delaware in April 2006. Bill.com Holdings, Inc. was incorporated in the State of Delaware in August 2018 (and renamed BILL Holdings, Inc. in February 2023). In November 2018, Bill.com, Inc. consummated a reorganization with BILL Holdings, Inc., resulting in the latter becoming the parent entity of Bill.com, Inc. BILL Holdings, Inc. and its wholly-owned subsidiaries are collectively referred to as the “Company”.

The Company is a provider of software-as-a-service, cloud-based payments, and spend and expense management products, which allow users to automate accounts payable and accounts receivable transactions, enable businesses to easily connect with their suppliers and/or customers to do business, eliminate expense reports, manage cash flows, and improve back-office efficiency.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and were prepared in conformity with U.S. generally accepted accounting principles (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all normal and recurring adjustments that are, in the opinion of management, necessary to state fairly the Company’s financial position, results of operations, comprehensive income, changes in stockholders’ equity, and cash flows for the periods presented. The results of operations for the three months ended September 30, 2025 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2026 or for any other future annual or interim period. The unaudited condensed consolidated balance sheets as of June 30, 2025 included herein was derived from the audited financial statements for the year ended June 30, 2025, but does not include all disclosures including certain notes required by GAAP on an annual reporting basis. All intercompany accounts and transactions have been eliminated.

These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (2025 10-K).

Segment Reporting

The Company operates asone operating segment because its chief operating decision maker (CODM), who is the Chief Executive Officer, reviews its financial information on a consolidated basis with net income (loss) as the primary measure of segment profitability for purposes of making decisions regarding allocating resources and assessing performance. The CODM uses this measure to evaluate the Company’s operational efficiency and profitability, make strategic capital allocation decisions, and assess progress against financial targets, and is regularly provided with financial results comparing actual performance to budgeted targets and prior periods. The CODM does not evaluate the performance of the operating segment using asset information.

On a regular basis, the Company’s CODM is provided with significant segment expenses as reported within the consolidated statements of operations, adjusted for depreciation, amortization and restructuring, as presented in the consolidated statements of operations, stock-based compensation (refer to Note 8), and amortization of debt issuance costs (refer to Note 9). Other items included in the segment's profit or loss measure are interest income, interest expense (refer to Note 9), and provision for income taxes presented in the consolidated statements of operations and comprehensive income. In addition, on a regular basis the CODM is also provided with rewards expense and losses from fraud. Rewards expense, which is included in sales and marketing, was $81.3 million and $62.1 million for the three months ended September 30, 2025 and 2024, respectively. Losses from fraud, which are included in general and administrative, were $6.8 million and $4.9 million for the three months ended September 30, 2025 and 2024, respectively.

Total revenue from external customers outside of the U.S. was less than 2% of consolidated total revenue during each of the three months ended September 30, 2025 and 2024.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make various estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and the accompanying notes. Management regularly assesses these estimates, including, but not limited to useful lives of long-lived assets; capitalization of internal-use software costs; the estimate of expected credit losses on accounts receivable, acquired card receivables, and loans held for investment; accrual for rewards; benefit periods used to amortize deferred costs; reserve for losses on funds held for customers; and valuation of deferred tax assets. The Company evaluates these estimates and assumptions and adjusts them accordingly. Actual results could differ from those estimates, and such differences may be material to the condensed consolidated financial statements.

Goodwill

Goodwill represents the excess of the purchase price of the acquisition over the net fair value of identifiable assets acquired and liabilities assumed. Goodwill amounts are not amortized. The Company monitors goodwill for impairment on at least an annual basis, or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. No triggering events indicating possible impairment were identified during the three months ended September 30, 2025 or in any prior period. The Company continually evaluates its current and estimated future financial results, macroeconomic environment and industry-specific conditions, which are subject to many uncertainties, including the impact of government budget cuts, government shut downs and tariffs, volatility related to changes in rates of inflation, interest rates, the strength of the U.S. dollar, and the potential for a slowing economy. These conditions, if sustained or exacerbated, could negatively impact the estimated fair value of the Company’s single reporting unit. As a result, the Company may be required to perform a quantitative goodwill impairment test in a future period, which could result in a non-cash impairment charge.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, restricted cash, restricted cash equivalents, short-term investments, accounts receivable, acquired card receivables and loans held for investment (collectively referred to as Financial Assets). The Company maintains its cash, cash equivalents, restricted cash, restricted cash equivalents and short-term investments with large multinational financial institutions that may at times exceed federally insured limits. Management believes that the financial institutions with which the Company does business are financially sound with minimal credit risk. Management further believes the associated risk of concentration for the Company’s investments is mitigated by holding a diversified portfolio of highly rated investments consisting of money market funds and short-term debt securities.

The Company performs credit evaluations to verify the credit quality of its Financial Assets and determine any at-risk financial instruments. As of September 30, 2025 and June 30, 2025, the allowance for expected credit losses related to accounts receivable, acquired card receivables, and loans held for investment totaled approximately $30.2 million and $30.3 million, respectively. These amounts do not include the immaterial allowance for expected credit losses on the card receivables that have been authorized but not cleared at the end of the periods.

There wereno customers that exceeded 10% of the Company’s total revenue during the three months ended September 30, 2025 and 2024.

Foreign Currency

The functional currency of the Company's foreign subsidiary is the U.S. dollar, which is the Company's reporting currency. Gains and losses from the remeasurement of transactions denominated in foreign currencies other than the functional currency of the foreign subsidiary are included in other income, net in the accompanying condensed consolidated statements of operations.

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies described in the 2025 10-K, except as noted below:

Restructuring

Restructuring charges may consist of severance, benefits, payroll taxes, costs related to contract terminations, and other related costs. The Company recognizes a liability for involuntary employee termination benefits pursuant to a mutually understood severance benefits plan when it is probable and the termination benefits are estimable. One-time involuntary termination benefits that are not provided under the ongoing severance benefits plan or enhancements to the ongoing severance benefits plan are not accrued until the terms of the benefit arrangement have been communicated to the affected employees. Costs related to contracts without future benefit or contract termination are recognized at the earlier of the contract termination or the cease-use dates. Other exit-related costs are recognized as incurred.

New Accounting Pronouncements and Disclosure Rules Not Yet Adopted

There have been no changes to the Company’s new accounting pronouncements and disclosures not yet adopted as described in the 2025 10-K, except as noted below:

In July 2025, the Financial Accounting Standards Board issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326). The guidance in ASU 2025-05 provides all entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of current accounts receivable and contract assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company determined that there is no material impact to the consolidated financial statements.

In September 2025, the Financial Accounting Standards Board issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Topic 350). The amended guidance modernizes the accounting for costs related to internal-use software to more closely align with current software development methods. The guidance removes references to project stages and clarifies when the Company is required to start capitalizing eligible costs. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The guidance can be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis. The Company is evaluating the impact this amended guidance may have on its consolidated financial statements.

NOTE 2 –REVENUE

The Company generates revenue primarily from subscription and transaction fees. The table below shows the Company’s revenue from subscription and transaction fees, which are disaggregated by solutions, and revenue from interest on funds held for customers (in thousands). For the purpose of disaggregating revenue by solutions, the Company defines BILL AP/AR as transaction and subscription revenue derived from businesses that use its core BILL accounts payable and receivable platform; BILL Spend and Expense as interchange revenue derived from BILL Divvy Card transactions; and Embedded and Other Solutions as transaction and subscription revenue from businesses that access the Company's solutions through its embedded partners' platforms and other indirect sales channels (including financial institution partners), and Invoice2go revenue.

Deferred revenue

Fees from customers with which the Company has annual or multi-year contracts are generally billed in advance. These fees are initially recorded as deferred revenue and subsequently recognized as revenue as the performance obligation is satisfied. During the three months ended September 30, 2025, the Company recognized $12.4 million of revenue that was included in the deferred revenue balances as of June 30, 2025.

Remaining performance obligations

The Company has performance obligations associated with commitments in customer contracts for future services that have not yet been recognized as revenue. As of September 30, 2025, the aggregate amount of transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied), including deferred revenue, was $68.5 million. Of the total remaining performance obligations, the Company expects to recognize approximately 50% over the next year,23% between one to two years and 27% over the next three to five years thereafter. The Company determines remaining performance obligations at a point in time based on contracts with customers. However, actual amounts and timing of revenue recognized may differ due to subsequent contract modifications, renewals and/or terminations.

Unbilled revenue

Unbilled revenue consists of revenue recognized that has not been billed to the customers yet. The unbilled revenue amounted to $17.4 million and $17.3 million as of September 30, 2025 and June 30, 2025, respectively and are included in accounts receivable, net in the accompanying consolidated balance sheets.

NOTE 3 –FAIR VALUE MEASUREMENT

The Company measures and reports its cash equivalents, short-term investments, funds held for customers that are invested in money market funds and marketable debt securities at fair value. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows:

Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs other than quoted prices included within Level 1 that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity for the related assets or liabilities and typically reflect management’s estimate of assumptions that market participants would use in pricing the assets or liabilities.

In determining fair value, the Company utilizes quoted market prices, or valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, and also considers counterparty credit risk in its assessment of fair value.

The following table summarizes the fair values of the financial assets and liabilities, determined using quoted market prices of identical assets or market prices of similar assets from active markets as of the dates presented (in thousands):

(1)These liabilities are carried at par value, less the unamortized issuance costs in the accompanying condensed consolidated balance sheets.

There were no transfers of financial instruments between Level 1, Level 2, and Level 3 during the periods presented.

The Company's financial instruments that are not measured and recorded at fair value, such as cash, restricted cash, acquired cards receivables, loans held for investment, interest receivables, incentive receivables, and borrowings from credit facilities, are carried at amortized cost, which approximates their fair value. If these financial instruments were measured at fair value in the financial statements, cash would be classified as Level 1; restricted cash, interest receivables, incentive receivables and borrowings from credit facilities would be classified as Level 2 and the acquired card receivables and loans held for investment would be classified as Level 3 in the fair value hierarchy.

NOTE 4 –SHORT-TERM INVESTMENTS AND FUNDS HELD FOR CUSTOMERS

The following table summarizes the assets underlying short-term investments and funds held for customers as of the dates presented (in thousands):

(1) Represents interest income, accretion of discount (offset by amortization of premium), and net unrealized gains on customer funds that were invested in money market funds and short-term marketable debt securities. The Company contractually earns interest income on these investments, which is expected to be transferred into the Company’s corporate deposit account upon sale or settlement of the associated investment, and is not considered funds held for customers.

The following table summarizes the estimated fair value of available-for-sale debt securities, included within short-term investments and funds held for customers, as of the dates presented (in thousands):

The amortized cost and fair value amounts forshort-term investments include interest receivables of $8.3 million and $8.9 million as of September 30, 2025 and June 30, 2025, respectively. The amortized cost and fair value amounts for funds held for customers include interest receivable of $13.7 million and $12.4 million as of September 30, 2025 and June 30, 2025, respectively.

The following table summarizes fair value of the Company's available-for-sale debt securities, included within short-term investments and funds held for customers, by remaining contractual maturity as of the dates presented (in thousands):

As of September 30, 2025, approximately 60 out of approximately 820 investments in available-for-sale debt securities were in an unrealized loss position. The following tables show gross unrealized losses and fair values for those investments that were in an unrealized loss position as of the dates presented (in thousands):

Unrealized losses have not been recognized into income as the Company neither intends to sell, nor anticipates that it is more likely than not that the Company will be required to sell, the securities before recovery of their amortized cost basis. The decline in fair value is due primarily to changes in market interest rates, rather than credit losses.

There have beenno significant realized gains or losses on the short-term investments and funds held for customers during the three months ended September 30, 2025 and 2024.

NOTE 5 –ACQUIRED CARD RECEIVABLES

As of September 30, 2025, approximately $475.3 million of the acquired card receivables balance served as collateral for the Company’s borrowings from the Revolving Credit Facilities (as defined below, see Note 7).

The Company incurred losses related to card transactions disputed by spending businesses. The amounts were not material during the three months ended September 30, 2025 and 2024.

The acquired card receivables balances do not include purchases of participation interests in card receivables from the Company's card issuing partner banks (Issuing Banks) that have not cleared at the end of the reporting period. Purchases of participation interests in card receivables that have not cleared as of September 30, 2025 totaled $91.8 million. The Company recognized an immaterial amount of expected credit losses on the card receivables that have not cleared yet as of September 30, 2025.

Credit Quality Information

The Company regularly reviews collection experience, delinquencies, and net charge-offs in determining allowance for expected credit losses related to acquired card receivables. Historical collections rates have shown that days past due is the primary indicator of the likelihood of loss. The Company uses the delinquency trends or past due status of the acquired card receivables as the credit quality indicator. Acquired card receivables are considered past due if full payment is not received on the bill date or within a grace period, which is generally limited tofive days. Below is a summary of the acquired card receivables by class (i.e., past due status) as of the dates presented (in thousands):

Allowance for Expected Credit Losses

Below is a summary of the changes in allowance for expected credit losses (in thousands):

Card receivables acquired from the Issuing Banks were $6.2 billion and $5.2 billion during the three months ended September 30, 2025 and 2024, respectively. The provision for expected credit losses related to acquired card receivables decreased during the three months ended September 30, 2025 compared to the same prior year periods due to improvements in delinquency performance, which was offset by portfolio growth. The charge-off amounts related to acquired card receivables increased during the three months ended September 30, 2025 compared to the same prior year period due to portfolio growth.

NOTE 6 –LOANS HELD FOR INVESTMENT

Loans held for investment represent funds advanced under a line of credit agreement, through a partnership with a third-party bank (the Originating Bank Partner). Loans held for investment are included in prepaid expenses and other current assets in the accompanying consolidated balance sheets and consisted of the following as of the dates presented (in thousands):

Credit Quality Information

The Company conducts an eligibility assessment prior to loan origination by the Originating Bank Partner. This process is performed at the invoice level and involves evaluating the invoice repayment likelihood by the respective network members associated with each invoice. Subsequently, the credit quality of these loans is monitored based on the delinquency trends or past due status of the loans held for investment, which are considered the credit quality indicators. Below is a summary of the loans held for investment by class (i.e., past due status) as of the dates presented (in thousands):

Allowance for Credit Losses

Below is a summary of the changes in allowance for credit losses presented (in thousands):

The provision for expected credit losses related to loans held for investments decreased during the three months ended September 30, 2025 compared to the same prior year period mainly due to an immaterial release from the allowance for credit losses attributable to changes in assumptions related to macroeconomic factors. The charge-off amounts and allowance for credit losses related to loans held for investment increased during the three months ended September 30, 2025 compared to the same prior year period due to portfolio growth.

NOTE 7 –DEBT AND BORROWINGS

Debt and borrowings consisted of the following (in thousands):

(1)Unamortized debt issuance costs balance for the Revolving Credit Facilities was $1.7 million and $2.1 million as of September 30, 2025 and June 30, 2025, respectively, and is included in other assets on the condensed consolidated balance sheets.

Convertible senior notes

2030 Notes

On December 6, 2024, the Company issued $1.4 billion aggregate principal amount of 0% convertible senior notes due April 1, 2030, in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2030 Notes are subject to the terms and conditions of the indenture governing the 2030 Notes between the Company and Computershare Trust Company, N.A., as trustee (in its capacity as trustee for each of the 2030 Notes, the 2025 Notes (as defined below) and the 2027 Notes (as defined below), as applicable, the Notes Trustee). The net proceeds from the issuance of the 2030 Notes were $1.38 billion, after deducting the debt discount and debt issuance costs totaling $24.0 million.

The 2030 Notes are senior, unsecured obligations of the Company, and will not accrue interest unless the Company determines to pay special interest as a remedy for failure to timely file any reports required to be filed with the SEC, the failure to remove certain trading restrictions, or failure to deliver reports to the Notes Trustee. The 2030 Notes rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated to the 2030 Notes and rank equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated, including the 2025 Notes and 2027 Notes. In addition, the 2030 Notes are effectively junior in right of payment to any of the Company's secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company's subsidiaries.

The 2030 Notes have an initial conversion rate of 8.3718 shares of common stock per $1,000 principal amount, which is equivalent to an initial conversion price of $119.45 per share of the Company’s common stock and 11.7 million shares issuable upon conversion. The conversion rate is subject to customary adjustments for certain events as described below. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company's election. The Company’s current intent is to settle conversions of the 2030 Notes through a combination settlement, which involves a repayment of the principal portion in cash with any excess of the conversion value over the principal amount settled in shares of common stock.

The Company may redeem for cash, all or any portion of the 2030 Notes, at the Company’s option, on or after December 1, 2027 if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on and including the trading day preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus any accrued and unpaid special interest to, but excluding, the redemption date. No sinking fund is provided for the 2030 Notes. The holders of the 2030 Notes may convert their notes at their option at any time prior to the close of business on the business day immediately preceding January 1, 2030 in multiples of $1,000 principal amount, under the following circumstances:

•during any calendar quarter commencing after the calendar quarter ending on December 31, 2024, and only during such calendar quarter, if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on and including the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

•during the 5 business day periods after any 5 consecutive trading day period in which the trading price per $1,000 principal amount of the 2030 Notes for each trading day of that period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day;

•if the Company calls such notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or

•upon the occurrence of specified corporate events.

The conversion rate is subject to adjustment upon the occurrence of certain events or if the Company’s board of directors determines it is in the best interest of the Company. Additionally, holders of the 2030 Notes that convert their notes in connection with a make-whole fundamental change or during the redemption period, may be eligible to receive a make-whole premium through an increase of the conversion rate based on the estimated fair value of the 2030 Notes for the given date and stock price. The make-whole premium is designed to compensate the holder for lost “time-value” of the conversion option. The maximum number of additional shares that may be issued under the make-whole premium is 2.9301 per $1,000 principal (the lowest price of $88.48 in the make whole).

The indenture governing the 2030 Notes contains customary events of default with respect to the 2030 Notes and provides that upon certain events of default occurring and continuing, the holders of the 2030 Notes will have the right, at their option, to require the Company to repurchase for cash all or a portion of their outstanding notes, at a price equal to 100% of the principal amount of the 2030 Notes to be repurchased, plus any accrued and unpaid interest.

2027 Notes

On September 24, 2021, the Company issued $575.0 million in aggregate principal amount of its 0% convertible senior notes due on April 1, 2027, in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the 2027 Notes). The 2027 Notes are subject to the terms and conditions of the indenture governing the 2027 Notes between the Company and the Notes Trustee. The net proceeds from the issuance of the 2027 Notes were $560.1 million, after deducting debt discount and debt issuance costs totaling $14.9 million.

On December 6, 2024, using proceeds from the issuance of the 2030 Notes, the Company entered into privately negotiated transactions with certain holders of its 2027 Notes to repurchase $451.5 million aggregate principal amount for an aggregate cash repurchase price of $408.6 million. The carrying amount of the extinguished 2027 Notes was $446.5 million, net of unamortized issuance cost of $5.0 million, resulting in a $37.9 million gain recorded in other income, net in the accompanying consolidated statement of operations.

2025 Notes

On November 30, 2020, the Company issued $1.15 billion in aggregate principal amount of its 0% convertible senior notes due on December 1, 2025, in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the 2025 Notes, and together with the 2027 Notes and 2030 Notes, the Notes). The 2025 Notes are subject to the terms and conditions of the indenture governing the 2025 Notes between the Company and the Notes Trustee. The net proceeds from the issuance of the 2025 Notes were $1.13 billion, after deducting debt discount and debt issuance costs totaling $20.6 million.

On December 6, 2024, using proceeds from the issuance of the 2030 Notes, the Company entered into privately negotiated transactions with certain holders of its 2025 Notes to repurchase $133.9 million aggregate principal amount of the 2025 Notes for an aggregate cash repurchase price of $130.8 million. The carrying amount of the extinguished 2025 Notes was $133.4 million, net of unamortized issuance cost of $0.5 million, resulting in a $2.6 million gain recorded in other income, net in the accompanying consolidated statement of operations. In fiscal 2024, the Company repurchased $982.7 million aggregate principal amount of the 2025 Notes in privately negotiated transactions.

The "if-converted" value of the Notes did not exceed the principal amount of $1.6 billion as of each of September 30, 2025 and June 30, 2025, respectively.

Capped Call Transactions

In conjunction with the issuance of the 2030 Notes, the Company entered into capped call transactions (the Capped Calls) with certain financial institutions at a total cost of $93.0 million. The Capped Calls associated with the 2030 Notes are separate transactions and are not part of the terms of the 2030 Notes. The total amount paid for the Capped Calls associated with the 2030 Notes was recorded as a reduction of additional paid-in capital. The Company used a portion of the proceeds from the 2030 Notes to pay for the cost of the applicable Capped Call premium. The cost of the Capped Calls associated with the 2030 Notes is not expected to be tax-deductible as the Company did not elect to integrate the Capped Calls into the 2030 Notes for tax purposes.

The Capped Calls associated with the 2030 Notes each have an initial strike price of $119.45 per share, subject to certain adjustments, which corresponds to the respective initial conversion price of the 2030 Notes, and have an initial cap price of $154.84 per share, subject to certain adjustments; provided that such cap price shall not be reduced to an amount less than their respective strike price. The Capped Calls associated with the 2030 Notes cover, subject to anti-dilution adjustments, a total of 11.7 million shares of the Company’s common stock. The Capped Calls associated with the 2030 Notes are expected to generally reduce the potential dilution of the Company’s common stock upon any conversion of the 2030 Notes and/or offset any cash payments that the Company is required to make in excess of the principal amount of such converted notes, as the case may be, with such reduction and/or offset subject to a cap.

In conjunction with the issuance of the 2025 Notes and 2027 Notes, the Company entered into similar capped call transactions. In fiscal 2024, the Company terminated the capped call transactions previously entered into in connection with the issuance of the 2025 Notes.

2021 Credit Facility

The Company's Revolving Credit and Security Agreement, by and among Divvy Peach, LLC, a wholly-owned subsidiary of the Company, and Goldman Sachs Bank USA, as administrative agent, and the lenders party thereto (as amended from time to time, the 2021 Credit Facility), was initially executed in March 2021, amended in August 2022 to finance the acquisition of card receivables and increase the borrowing capacity, and further amended in March 2024 to extend the maturity date and further increase the borrowing capacity. The 2021 Credit Facility matures in June 2026 or earlier pursuant to the agreement and has a total commitment of $300.0 million. Total outstanding borrowings were $180.0 million as of September 30, 2025. The Company is required to comply with certain restricted covenants, including liquidity requirements. As of September 30, 2025, the Company was in compliance with those covenants.

On October 29, 2025, the Company further amended the 2021 Credit Facility to extend the maturity date from June 2026 to May 2028, and reduce the interest rate from 2.65% to 1.95% plus SOFR (subject to a floor rate of 0.25%) per annum.

2025 Credit Facility

The Company's Revolving Credit and Security Agreement by and among Odin Financing, LLC, a wholly-owned subsidiary of the Company, and JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto (the 2025 Credit Facility and together with the 2021 Credit Facility, the Revolving Credit Facilities) was executed in May 2025 to finance the acquisition of card receivables. Borrowings bear interest at a rate per annum that is based on SOFR or an adjusted benchmark rate plus 1.80%. The 2025 Credit Facility matures in November 2027 or earlier pursuant to the agreement and has a total commitment of $300.0 million. Total outstanding borrowings were $150.0 million as of September 30, 2025. The Company is required to comply with certain restrictive covenants, including liquidity requirements. As of September 30, 2025, the Company was in compliance with those covenants.

NOTE 8 –STOCKHOLDERS’ EQUITY

Stock Based Compensation

Stock-based compensation by award type (in thousands):

Stock-based compensation was included in the following line items in the accompanying condensed consolidated statements of operations and condensed consolidated balance sheets (in thousands):

Share Repurchase Program

In August 2024, the Company's board of directors approved a share repurchase program, pursuant to which the Company announced its intention to purchase up to $300.0 million of its outstanding shares of common stock (the August 2024 Share Repurchase Program). During the three months ended September 30, 2025 and 2024, the Company repurchased 1,392,005 shares for $65.5 million and 3,711,246 shares for $201.7 million, respectively, of its common stock under this program and completed the repurchase of shares under the August 2024 Share Repurchase Program, including the immaterial amount of accrued excise tax.

In August 2025, the Company's board of directors authorized an additional share repurchase program pursuant to which the Company announced its intention to purchase up to $300.0 million of its outstanding shares of common stock (the August 2025 Share Repurchase Program). The Company 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. 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. The August 2025 Share Repurchase Program has no mandated end date, may be suspended, discontinued or modified at any time, and does not obligate the Company to acquire any amount of common stock.

The Company repurchased and subsequently retired 302,715 shares for $16.3 million under the August 2025 Share Repurchase Program, including the immaterial amount of accrued excise tax, during the three months ended September 30, 2025. As of September 30, 2025, $283.7 million remained available for future share repurchases under the August 2025 Share Repurchase Program.

During the three months ended September 30, 2025, the Company repurchased a total of 1,694,720 shares for $81.7 million under both the August 2024 and August 2025 Share Repurchase Programs, including the immaterial amount of accrued excise tax. The total price of the shares repurchased and related transaction costs are reflected as a reduction of common stock and an increase to accumulated deficit on the Company's condensed consolidated balance sheets.

NOTE 9 –OTHER INCOME, NET

Other income, net consisted of the following for the periods presented (in thousands):

NOTE 10 –INCOME TAXES

The Company’s provision for income taxes during the interim periods is determined using an estimate of the Company’s annual effective tax rate, which is adjusted for certain discrete tax items during the interim periods. For the three months ended September 30, 2025 and 2024, the Company's income tax provision was $0.1 million and $1.3 million, respectively.

The Company’s effective tax rate differs from the federal statutory rate primarily due to valuation allowance positions in its federal, state and foreign jurisdictions. The income tax expense during the three months ended September 30, 2025 pertained mainly to an estimated cash tax liability and an increase in the net deferred tax liability.

The Company has subsidiaries in the U.S., Canada, and Australia and may be subject to income tax audits in those jurisdictions. The Company records liabilities related to uncertain tax positions, which provide adequate reserves for income tax uncertainties in all open tax years. Due to the Company’s history of tax losses, all years remain open to tax audit. The Company’s management evaluates the realizability of the Company’s deferred tax assets based on all available evidence, both positive and negative. The realization of net deferred tax assets is dependent on the Company’s ability to generate sufficient future taxable income during the foreseeable future.

On July 4, 2025, legislation commonly referred to as the One Big Beautiful Bill Act of 2025 (OBBBA) was enacted in the U.S. Key tax components of the OBBBA include making permanent certain provisions of the Tax Cuts and Jobs Act and full expensing of domestic research and experimental expenditures. The Company currently expects an immaterial beneficial cash flow impact in fiscal year 2026 from repeal of Section 174. The Company will continue to monitor and assess the impact of OBBBA on the consolidated financial statements.

The Company regularly evaluates the realizability of its deferred tax assets (DTAs) by assessing all available evidence, both positive and negative, to determine whether it is more likely than not that some or all of the DTAs will not be realized. The Company considers its historical earnings, volatility in actual earnings, impact of permanent book to tax difference, the timing of reversal of existing temporary differences, and future profitability to assess its valuation allowance. As of September 30, 2025, substantially all of the Company's U.S. and foreign DTAs, net of deferred tax liabilities, were subject to a valuation allowance. If sufficient positive evidence emerges, some or all of the valuation allowance could be released. Such a release would result in a non-cash income tax benefit in the period of release and the recognition of additional DTAs in the accompanying condensed consolidated statements of operations and balance sheets, respectively. There is a reasonable possibility that, within the next twelve months, sufficient positive evidence may become available to conclude that all or a significant portion of the valuation allowance against U.S. net DTAs is no longer required.

NOTE 11 –COMMITMENTS AND CONTINGENCIES

Unused Credit Arrangements

As of September 30, 2025, the Company, in partnership with the Issuing Banks and the Originating Bank Partner, had approximately $3.6 billion in unused credit available to spending businesses and borrowers using the invoice financing product. While this balance represents the total unused credit available, historical trends and current expectations indicate that the unused credit will likely not be fully utilized by spending businesses using the spend and expense product and borrowers using the invoice financing product at any one time.

The Company manages credit risk exposure by limiting total credit for each spending business using the spend and expense product and borrowers using the invoice financing product. The Company periodically reviews credit lines to assess different factors, including account usage and creditworthiness of spending businesses using the spend and expense product and borrowers using the invoice financing product. The credit lines can be terminated by the Company at any time, and they do not necessarily represent future cash requirements. The Company does not record a liability for expected credit losses for unused lines of credit as they are unconditionally cancellable.

Commitments

The Company has multi-year agreements with certain third parties and financial institution partners, expiring through 2031, which require the Company to pay fees over the term of the respective agreements. Future payments under these agreements as of September 30, 2025 are as follows (in thousands).

During the three months ended September 30, 2025 there have been no material changes to the Company's non-cancelable operating leases from those disclosed in Note 14 to the financial statements in the 2025 10-K.

Litigation

From time to time, the Company is involved in lawsuits, claims, investigations, and proceedings that arise in the ordinary course of business. The Company records a provision for a liability when management believes that it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. As of each of September 30, 2025 and June 30, 2025, the Company’s reserve for litigation is immaterial. The Company reviews these provisions periodically and adjusts these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. Litigation is inherently unpredictable.

NOTE 12 –RESTRUCTURING

The Company is committed to undertaking measures to improve organizational agility and efficiency, while also seeking to drive greater profitability. On October 15, 2025, in furtherance of this commitment, the Company announced a reduction in force (RIF) impacting approximately 6% of employees. The Company incurred the majority of the charges relating to the RIF in the three months ended September 30, 2025. During the three months ended September 30, 2025, the Company recorded restructuring expenses of approximately $9 million related to the RIF, as a separate line item in the accompanying condensed consolidated statements of operations. The Company expects substantially all of the accrued amount to be paid by December 31, 2025, subject to local law and consultation requirements. The Company also intends to consider and pursue additional actions to improve structural efficiencies and optimize operations over the course of the year.

NOTE 13 –NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS

The following table presents the calculation of basic and diluted net income (loss) per share attributable to common stockholders (in thousands, except per share amounts):

(1)For the three months ended September 30, 2024, the dilutive effect of outstanding equity awards is reflected in diluted earnings per share by application of the treasury stock method and if-converted method.

Potentially dilutive securities, which were excluded from the diluted net income (loss) per share calculations because they would have been antidilutive were as follows (in thousands):

Shares issuable under the Notes is subject to adjustment up to approximately 16.6 million shares if certain corporate events occur prior to the maturity date of the Notes or if the Company issues a notice of redemption. As of September 30, 2025, no conversion was triggered for the Notes.