BILL Holdings, Inc.BILL

BILL Holdings, Inc. Fair Value Disclosure

10-KFiled Aug 28, 20253 min read
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):
Fair Value at
Pricing CategoryJune 30,
2025		June 30,
2024
Assets
Cash equivalents:
Money market fundsLevel 1$365,456$522,618
Corporate bondsLevel 269,956—
Certificates of depositLevel 22,216—
Short-term investments:
Corporate bondsLevel 2758,333 298,202 
U.S. treasury securitiesLevel 2287,559 180,983 
Asset-backed securitiesLevel 2118,236 59,363 
Certificates of depositLevel 215,982 38,370 
U.S. agency securitiesLevel 2— 24,617 
Funds held for customers:
Restricted cash equivalents
Money market fundsLevel 11,642,494 1,319,609 
Corporate bondsLevel 218,929 89,082 
Short-term investments
Corporate bondsLevel 2486,362 937,198 
U.S. treasury securitiesLevel 2868,705 342,041 
Asset-backed securitiesLevel 2167,970 116,475 
Certificates of depositLevel 299,138 119,616 
Municipal bondsLevel 26,592 — 
Liabilities (1)
0% 2025 Notes
Level 232,567 154,933 
0% 2027 Notes
Level 2112,738 489,112 
0% 2030 Notes
Level 2$1,185,128 $— 
(1) These liabilities are carried at par value, less the unamortized issuance costs in the accompanying 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, including cash, restricted cash, acquired cards receivables, loans held for investment, interest receivable, 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.
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About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

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