01NASDAQ · INTU
Software toolbench
Subscription software is the product and the profit pool. Payments exist inside the ecosystem, but Intuit does not disclose them as a clean revenue line.
$18.8BFY25 revenue
THE SMB MONEY STACK
Three companies.
One wallet.
Who wins?
Intuit, BILL, and Toast monetize the same small business customer in three very different ways. This case study finds which model is built to last.
THE SHORT ANSWER
Hold Intuit. Watch Toast. Underwrite BILL as a special situation.
DURABILITY LEDGER · FY2025EXHIBIT 01
UNDERWRITING CASE
Intuit
PERIODFY2025
REVENUE GROWTH15.6%
+FCF MARGIN32.3%
=RULE OF 4047.9%
40% threshold+7.9 pts
FIG. AA live Rule of 40 reconciliation
01
THE QUESTION
ONE WALLET · THREE REVENUE ENGINES
WHY THESE THREE
The customer is the constant.
The monetization layer changes.
02NYSE · BILL
Workflow + take rate
Software wins the workflow; transaction fees monetize the money movement; float adds a rate sensitive third engine.
$1.46BFY25 revenue
03NYSE · TOST
Payments operating system
Software and hardware land the restaurant; payments carry the revenue. The model trades headline margin for embedded distribution.
$6.15BFY25 revenue
02
THE DATA
SEC EDGAR · 10 K + LATEST 10 Q
THE EVIDENCE BASE
Four fiscal years.
No calendarizing.
Each company keeps its reported fiscal year. Intuit ends July 31, BILL June 30, and Toast December 31. Aligning them to a common calendar would create precision the filings do not support.
Four annual observations create three compounding intervals; the displayed CAGR runs from FY2022 to FY2025.
COLLECTION REGISTERSTATUS · RECONCILED
3public companies
12core line items / FY
4annual periods / company
0revenue check breaks
CONTROL
Every revenue mapping must tie back to the reported total before it enters a metric. All dollar figures are in millions.
✓THE LATEST PULSE
Annual durability, checked against current momentum.
The latest reported quarters preserve the same ordering: Toast grows fastest; Intuit compounds more slowly; BILL’s core transaction engine outgrows its rate sensitive float.
Q3 FY26Apr. 30, 2026
10%YoY revenue growth
Tax season quarter; nine month revenue grew 14%.
Q3 FY26Mar. 31, 2026
13%YoY revenue growth
Core fees grew 16%; float revenue fell 7%.
Q1 FY26Mar. 31, 2026
22%YoY revenue growth
Growth remained broad across software and fintech.
03
THE METHOD
COLLECT · CHECK · COMPUTE · INTERPRET
THE TEARDOWN ENGINE
Build the truth
one auditable line at a time.
The model separates raw filing inputs from derived metrics. Yellow cells hold sourced values; formulas carry the comparison. Judgment calls stay visible instead of being hidden inside a chart.
DATA CHECK12 / 12 PERIODS TIE
Collect
Revenue streams, stream costs, sales & marketing, SBC, OCF, capex, and NRR where disclosed.
Reconcile
Computed revenue must equal the reported income statement total in every company year.
Compute
Growth, margin, FCF, Rule of 40, sales efficiency, dilution, and revenue mix flow from formulas.
Interpret
Separate model economics from disclosure artifacts before making the five year call.
Rule of 40
YoY revenue growth
+FCF margin
Sales efficiency
Net new revenue
÷Prior year S&M
Free cash flow
Operating cash flow
−Capital expenditure
Stream margin
Revenue − direct cost
÷Stream revenue
Payments are embedded, not isolated.
QuickBooks Payments sits inside broader online services. Because the filing does not support a clean split, the model maps total revenue to software and leaves payments blank.
Stream costs are not disclosed.
BILL reports one combined cost of revenue line. The analysis uses blended gross margin only; any 100% stream margin is a spreadsheet artifact, not an economic claim.
04
THE FINDINGS
05 EXHIBITS · ONE DURABILITY RANKING
THE COMPARISON DASHBOARD
Growth is easy to spot.
Durability lives in the mix.
The charts move from output to mechanism: first the Rule of 40, then the four year growth path, the revenue engine, the margin anatomy, and finally the cost of acquiring that growth.
EXHIBIT 01 · DURABILITY
Growth × cash conversion
FY2025 · bubble size approximates revenue scale
EXHIBIT 02 · GROWTH PATH
Four years, normalized
FY2022 = 100
EXHIBIT 03 · REVENUE ENGINE
What each dollar is made of
FY2025 revenue mix
INTU$18.8B
Software toolbench
BILL$1.46B
Workflow + take rate
TOST$6.15B
Payments operating system
EXHIBIT 04 · THE AHA
Headline margin hides the product stack
GAAP gross margin · FY2025
TOAST · REPORTED25.9%
DECOMPOSE
NET REVENUE VIEW¹70.4%
SOFTWARE71.8%
PAYMENTS22.8%
¹ Illustrative: gross profit ÷ (reported revenue − fintech cost of revenue). Fintech cost includes processor pass through costs plus personnel and infrastructure, so this is not a GAAP restatement.
EXHIBIT 05 · QUALITY OF GROWTH
Acquisition efficiency versus equity cost
FY2025
Sales efficiency
Net new revenue per $1 of prior year S&M.
02.80×
INTU
0.59×
BILL
0.36×
TOST
2.54×
Equity dilution
Stock based compensation as a share of revenue.
018.0%
INTU
10.5%
BILL
16.6%
TOST
3.9%
Sales efficiency is directionally useful, not perfectly directly comparable: Toast and BILL report gross transaction revenue, and BILL records Divvy rewards inside sales & marketing.
THE FULL LEDGER
Comparable metrics, one view.
“n/d” means the company did not disclose a useful figure. BILL’s 94% FY25 net dollar based retention is corrected from the blank workbook input using its 10 K.
| Metric · FY2025 | IntuitFY ends July 31 | BILLFY ends June 30 | ToastFY ends December 31 |
|---|---|---|---|
| Revenue | $18.8B | $1.46B | $6.15B |
| FY25 growth | 15.6% | 13.4% | 24.1% |
| FY22→FY25 CAGR | 14.0% | 31.6% | 31.1% |
| Blended gross margin | 79.6% | 81.4% | 25.9% |
| Software gross margin | 79.6% | n/d | 71.8% |
| Payments gross margin | n/d | n/d | 22.8% |
| FCF margin | 32.3% | 21.4% | 9.9% |
| Rule of 40 | 47.9% | 34.7% | 33.9% |
| Sales efficiency | 0.59× | 0.36× | 2.54× |
| SBC / revenue | 10.5% | 16.6% | 3.9% |
| Net retention | n/d | 94% | 109% |
05
THE CALL
INVESTMENT COMMITTEE MEMO · 1 PAGE
THE FIVE YEAR HOLD
Buy the proof.
Keep the optionality on watch.
Intuit wins on demonstrated durability. Toast has the best path to change the ranking. BILL’s filing data explain the sponsor interest, but they do not make the operating questions disappear.
STRATEGIC FINANCEINVESTMENT COMMITTEE
MEMORANDUM27 JUL 2026
SUBJECT
The SMB Money Stack · five year durability
INTUCONVICTION · HIGH
If I had to hold one for five years, I would hold Intuit. The call rests on two FY2025 numbers: a 47.9% Rule of 40 score and a 32.3% free cash flow margin.
Exhibit 1 makes the durability ranking clear. Intuit is the only company above the 40% threshold: 15.6% growth plus a 32.3% FCF margin. BILL reaches 34.7%; Toast 33.9%. The four observation CAGRs reverse the headline. BILL reaches 31.6% and Toast reaches 31.1% versus 14.0% for Intuit, but the latest year shows what those averages conceal. Intuit’s growth is not the fastest; it is the least dependent on future margin improvement.
Exhibit 4 changes the Toast interpretation. Its 25.9% blended margin contains a 71.8% software layer and a 22.8% payments layer. Hardware and professional services generated $180 million of revenue against $405 million of cost, including acquired intangible amortization. That strengthens the long term margin case, but 81.9% of current revenue still comes from payments.
Exhibit 5belongs to Toast: $2.54 of incremental revenue per dollar of prior year S&M, 3.9% SBC / revenue, and 109% NRR. It has the best upside to the ranking, but its 9.9% FCF margin keeps that upside as an execution requirement, not yet a proven result.
BILL’s sponsor appeal is visible in the filings: 81.4% blended gross margin, 21.4% FCF margin, and $312.5 million of FCF on $1.46 billion of revenue. Its 0.36× sales efficiency and 16.6% SBC burden create obvious levers. The harder facts are structural: growth has slowed to 13.4%, 70.3% of revenue is transaction based, 11.1% is float, and net dollar based retention is 94%. The data explain why private equity is interested; they do not answer what price it should pay.
S. SinghANALYST
HOLDINTUIT · 5Y
The memo is formatted for print. Use your browser’s “Save as PDF” option for a one page handoff.
WHAT BREAKS THE CALL
Three models, three distinct failure modes.
The mix can move before the model sees it.
Embedded payments are not isolated in the filing. A lower margin mix shift, tax season concentration, or weaker Mailchimp / Credit Karma execution could pressure the quality signal.
MONITOR · ONLINE SERVICES MIXCost levers may not fix demand quality.
High dilution and weak efficiency can be attacked. Transaction concentration, falling float yield, credit exposure, and 94% net retention are harder to solve with a sponsor playbook.
MONITOR · CORE FEES VS. FLOATDistribution can remain expensive at scale.
Restaurant cyclicality, interchange economics, and a loss leading hardware wedge could keep blended margin and cash conversion below the level its growth rate deserves.
MONITOR · FCF MARGINSOURCES & NOTES
Read the filings behind the call.
Annual metrics come from the supplied collection workbook and are traceable to SEC filings. Quarterly figures are used as a current momentum check, not mixed into annual calculations.
For portfolio demonstration and analytical discussion only. This is not investment advice. Figures may not be perfectly comparable because fiscal calendars and disclosure taxonomies differ.