Bill Com Holdings Inc (BILL)

Interest coverage

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Earnings before interest and tax (EBIT)	US$ in thousands	30,410	-7,137	-207,714	-321,260	-111,179
Interest expense	US$ in thousands	18,563	19,182	15,203	9,419	28,158
Interest coverage		1.64	-0.37	-13.66	-34.11	-3.95

June 30, 2025 calculation

Interest coverage = EBIT ÷ Interest expense
= $30,410K ÷ $18,563K
= 1.64

The interest coverage ratio of Bill Com Holdings Inc. demonstrates a concerning trend from June 30, 2021, through June 30, 2025. Specifically, the data indicates negative interest coverage ratios for the years 2021, 2022, 2023, and 2024, with ratios of -3.95, -34.11, -13.66, and -0.37, respectively. Negative ratios suggest that the company's earnings before interest and taxes (EBIT) were insufficient to cover its interest obligations during these periods, implying that the company was not generating enough operational income to meet its interest expenses and was likely relying on external financing or other sources to service debt.

Notably, the ratios experienced significant deterioration between June 30, 2021, and June 30, 2022, moving from a deficit of -3.95 to a much more severe deficit of -34.11. This substantial decline indicates a substantial deterioration in operating earnings relative to interest obligations in that period. Although there was some improvement in subsequent years—reflected in the ratios improving to -13.66 and then approaching near-balance at -0.37 by June 30, 2024—interest coverage remained negative overall, signifying ongoing difficulties in comfortably covering interest expenses from EBIT.

By June 30, 2025, the ratio turns positive at 1.64, indicating that in this particular period, the company's earnings have finally exceeded its interest expenses, suggesting an improvement in financial health relative to its past performance. This positive shift implies that the company may have implemented operational or financial strategies that enhanced profitability, leading to sufficient earnings to cover interest obligations and potentially reducing financial risk associated with debt servicing.

In conclusion, the historical data reveals periods of significant financial stress characterized by insufficient earnings to cover interest expenses, though recent signs suggest a possible trend towards improved debt resilience. Continuous monitoring of subsequent periods will be necessary to confirm if this positive trajectory persists and if the company's operational earnings sustain a comfortable interest coverage ratio.