Bill Com Holdings Inc (BILL)

Interest coverage

Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 44,612 60,232 102,640 30,432 -7,137 -30,222 -93,542 -172,003 -237,096 -309,916 -370,873 -336,991 -327,095 -313,574 -241,986 -177,576 -111,934 -51,566 -44,088 -37,494
Interest expense (ttm) US$ in thousands 18,564 19,158 19,091 19,232 19,182 18,827 18,283 17,092 15,203 13,238 11,507 10,439 9,418 19,096 28,522 29,956 28,158 15,877 4,012 105
Interest coverage 2.40 3.14 5.38 1.58 -0.37 -1.61 -5.12 -10.06 -15.60 -23.41 -32.23 -32.28 -34.73 -16.42 -8.48 -5.93 -3.98 -3.25 -10.99 -357.09

June 30, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $44,612K ÷ $18,564K
= 2.40

The interest coverage ratio of Bill Com Holdings Inc exhibits a significant negative trend over the analyzed period, indicating persistent difficulties in meeting interest obligations through operating earnings. Starting from September 30, 2020, the ratio was notably negative at -357.09, reflecting substantial challenges in covering interest expenses, likely due to negative earnings or extraordinary losses. Although there is some fluctuation over subsequent quarters—such as the ratio improving marginally to -10.99 by December 31, 2020, and then fluctuating within a wide negative range—the overall trend remains adverse through 2021 and 2022, with ratios reaching as low as -34.73 in June 2022.

Throughout this period, the consistently negative interest coverage ratios suggest that operating profits considerably lag behind interest expenses, indicating weak earning capacity and potential liquidity pressures. The ratio improvements are marginal and do not signify a meaningful recovery until late 2023 and early 2024, when the ratio moves toward break-even levels and positive territory. Specifically, by September 30, 2024, the interest coverage ratio transitions to positive at 1.58, and it further improves to 5.38 by December 31, 2024. This positive shift indicates a significant turn to profitability or cost restructuring efforts that better support debt service.

In the subsequent quarters, the ratios remain positive, albeit at a decreasing level, with values of 3.14, 2.40, and further down to 1.58 by September 2024. These figures suggest that the company's operating earnings are increasingly sufficient to cover interest expenses, reducing financial risk. Overall, the trend from severe negative ratios to positive coverage signifies a substantial improvement in the company’s ability to meet its interest obligations, though the earlier periods denote a period of substantial financial distress with heavy reliance on external financing or restructuring efforts for recovery.