Can BILL Holdings regain investor confidence as activist pressure and buyback shift sentiment?

Shares of BILL Holdings, Inc. (NYSE: BILL), a San Jose–based financial operations platform that provides automated payables, receivables, and expense management solutions for small and midsize businesses (SMBs), jumped more than 10% on September 5 after activist investor Starboard Value disclosed an 8.5% stake and formally notified the company of its intent to nominate directors to the board. The announcement, which caught much of the market off guard, came just over a week after BILL reported solid fourth-quarter and full-year results for fiscal 2025 and authorized a USD 300 million share repurchase program aimed at supporting the company’s valuation.

The stock closed at USD 51.54, up 10.39% for the day, before trading slightly lower in the after-market. The move marked one of the most substantial single-day rallies in BILL Holdings’ recent trading history, reversing a sustained period of sluggish investor sentiment that had seen the stock underperform broader software and fintech benchmarks over the summer.

Starboard’s filing with the U.S. Securities and Exchange Commission stated that the activist investor had surpassed the 5% ownership threshold and planned to propose board candidates at BILL Holdings’ 2025 annual shareholder meeting. BILL acknowledged the outreach in a statement on September 5, confirming that management had already engaged in discussions with Starboard and was open to further dialogue. The board of directors, led by founder and CEO René Lacerte and including several longstanding executives, emphasized its focus on sustainable growth and long-term shareholder value.

What are the motivations behind Starboard Value’s 8.5% stake in BILL Holdings and board nomination plans?

The timing and tone of Starboard’s engagement indicate a targeted effort to influence strategy at a critical inflection point for BILL Holdings. While Starboard has not yet outlined specific operational or structural demands, the firm’s track record suggests it may seek improvements in cost discipline, capital allocation, or strategic direction. With the stock still down significantly from its 2021 highs, BILL had become a viable activist candidate amid rising calls for accountability in underperforming software names.

Industry analysts noted that BILL’s current valuation, when paired with rising non-GAAP profitability and scale advantages in SMB automation, presents a compelling case for renewed institutional interest. Starboard’s entry is seen by some as a proxy for broader institutional pressure on fintech platforms to optimize growth at a time when profitability has become a central investor focus.

BILL’s board structure, which includes significant founder ownership and management continuity, could complicate the path for a successful activist campaign. However, the company’s statement that it will consider nominations through established channels suggests a willingness to avoid escalation, at least in the near term.

How did BILL Holdings perform in Q4 FY25, and what signals are being sent through its share buyback?

On August 27, BILL Holdings reported earnings for the fourth quarter and full fiscal year ended June 30, 2025. Total revenue for the quarter rose 12% year-over-year to USD 383.3 million, while core revenue—which includes subscription and transaction fees—rose 15% to USD 345.9 million. Transaction fees accounted for the majority of core revenue, growing 18% to USD 277.1 million, while subscription fees increased 5% to USD 68.8 million.

The company’s payment volumes also continued to climb. BILL processed USD 86 billion in total payment volume during Q4 across 33 million transactions, representing 13% and 18% year-over-year growth, respectively. Gross profit for the quarter stood at USD 309.8 million, with a GAAP gross margin of 80.8% and non-GAAP margin of 84.2%. Non-GAAP operating income came in at USD 56.4 million, and net income, on a non-GAAP basis, was USD 61.6 million, or USD 0.53 per diluted share.

For the full year, total revenue reached USD 1.46 billion, a 13% year-over-year increase. Core revenue rose 16% to USD 1.3 billion, while non-GAAP net income climbed to USD 251.8 million, or USD 2.21 per diluted share. This marked a significant turnaround from the prior year’s net loss, and signaled to investors that BILL’s underlying economics were improving despite a tougher macro backdrop for small and midsize businesses (SMBs).

The more impactful announcement, however, came with the introduction of a USD 300 million share repurchase program. The company disclosed that it had already spent approximately USD 100 million to repurchase 2.2 million shares in the quarter and through July, with the remaining USD 200 million to be deployed opportunistically.

CFO Rohini Jain described the buyback as a direct result of BILL’s enhanced cash flow generation and an expression of internal confidence in the company’s growth strategy. Analysts interpreted the move as both a tactical defense against further stock declines and a longer-term mechanism to support shareholder returns amid activist scrutiny.

What are analysts saying about BILL Holdings’ strategic position heading into fiscal 2026?

Institutional sentiment toward BILL Holdings appears to be cautiously improving. Analysts generally viewed the Q4 beat and buyback announcement as credible steps toward rebuilding market trust. The operational scale of BILL’s platform—serving nearly 500,000 SMBs and 8.3 million active network members—continues to be cited as a differentiator in a fragmented fintech landscape.

However, some remain wary of slowing subscription growth and the need for tighter cost controls. Non-GAAP operating income declined slightly in Q4 compared to the prior year, and margins, while strong, are being closely watched for signs of durability. Analysts noted that activist pressure could accelerate internal focus on profit expansion and product efficiency, which may benefit long-term shareholder returns but create short-term execution risk.

With investor interest rebounding on the back of Starboard’s involvement and improving financials, some institutional funds have begun rotating back into BILL Holdings as a high-beta rebound candidate. However, market watchers expect volatility to persist if board dynamics intensify.

What guidance has BILL Holdings issued for FY26 and how does it compare to previous performance?

For the fiscal year ending June 30, 2026, BILL Holdings expects total revenue to fall between USD 1.59 billion and USD 1.63 billion, representing 9% to 11% year-over-year growth. Core revenue is projected at USD 1.45 billion to USD 1.49 billion, up 12% to 15%. The company has forecast non-GAAP net income between USD 236 million and USD 260 million, or USD 2.00 to USD 2.20 per diluted share.

For Q1 FY26, the company guided for revenue of USD 385 million to USD 395 million and core revenue of USD 348 million to USD 358 million. Non-GAAP net income is expected to range from USD 56.5 million to USD 60.5 million, or USD 0.49 to USD 0.52 per diluted share.

These figures suggest that while headline growth may be moderating, profitability continues to trend in the right direction. Analysts say the key to upside surprises will lie in accelerating transaction volumes and platform-level monetization, especially as macro headwinds for SMBs begin to stabilize.

What should investors expect as BILL Holdings enters a potentially contentious FY26 proxy season?

The coming quarters will be critical for BILL Holdings as it balances performance execution with activist engagement. Investors are closely watching for additional moves from Starboard Value, including the formal submission of board nominees, public letters, or targeted operational demands. The tone and content of management’s next earnings call may also offer insight into whether a cooperative engagement is underway or a more contentious proxy battle is brewing.

Beyond the governance narrative, investors will be focused on Q1 earnings as a test of forecast credibility, further deployment of the share repurchase program, and incremental updates on customer adoption, transaction growth, and margin stability. With buybacks in motion and activist scrutiny intensifying, the company’s messaging and financial discipline may prove as critical as its product roadmap.