0001558370-20-005936 | 10-Q | XBRL Viewer

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Mar. 31, 2020	May 01, 2020
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	001-36348
Entity Registrant Name	PAYLOCITY HOLDING CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-4066644
Entity Address, Address Line One	1400 American Lane
Entity Address, City or Town	Schaumburg
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60173
City Area Code	847
Local Phone Number	463-3200
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	PCTY
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		53,686,172
Entity Central Index Key	0001591698
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Jun. 30, 2019
Current assets:
Cash and cash equivalents	$ 114,325	$ 132,476
Corporate investments	66,308	29,314
Accounts receivable, net	5,761	4,358
Deferred contract costs	29,086	21,677
Prepaid expenses and other	13,337	13,895
Total current assets before funds held for clients	228,817	201,720
Funds held for clients	1,729,176	1,394,469
Total current assets	1,957,993	1,596,189
Capitalized internal-use software, net	34,067	27,486
Property and equipment, net	68,698	70,056
Operating lease right-of-use assets	50,180
Intangible assets, net	9,063	10,751
Goodwill	9,590	9,590
Long-term deferred contract costs	111,842	81,422
Long-term prepaid expenses and other	8,266	1,975
Deferred income tax assets	7,229	6,472
Total assets	2,256,928	1,803,941
Current liabilities:
Accounts payable	3,626	3,954
Accrued expenses	64,002	57,625
Total current liabilities before client fund obligations	67,628	61,579
Client fund obligations	1,729,176	1,394,469
Total current liabilities	1,796,804	1,456,048
Deferred rent		31,263
Long-term operating lease liabilities	74,912
Other long-term liabilities	1,668	1,723
Deferred income tax liabilities	9,169	6,943
Total liabilities	1,882,553	1,495,977
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000 authorized, no shares issued and outstanding at June 30, 2019 and March 31, 2020
Common stock, $0.001 par value, 155,000 shares authorized at June 30, 2019 and March 31, 2020; 53,075 shares issued and outstanding at June 30, 2019 and 53,660 shares issued and outstanding at March 31, 2020	54	53
Additional paid-in capital	215,101	207,982
Retained earnings	159,322	99,817
Accumulated other comprehensive income (loss)	(102)	112
Total stockholders' equity	374,375	307,964
Total liabilities and stockholders' equity	$ 2,256,928	$ 1,803,941

Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Revenues:
Recurring and other revenue	$ 167,095	$ 133,355	$ 416,948	$ 333,096
Interest income on funds held for clients	4,551	6,197	13,792	14,164
Total revenues	171,646	139,552	430,740	347,260
Cost of revenues:
Cost of revenues	48,081	39,745	136,135	113,757
Gross profit	123,565	99,807	294,605	233,503
Operating expenses:
Sales and marketing	37,801	27,699	112,051	80,687
Research and development	15,612	12,688	45,416	36,886
General and administrative	22,411	23,208	77,283	68,915
Total operating expenses	75,824	63,595	234,750	186,488
Operating income	47,741	36,212	59,855	47,015
Other income	435	540	1,194	1,155
Income before income taxes	48,176	36,752	61,049	48,170
Income tax expense	8,044	8,726	1,544	4,588
Net income	40,132	28,026	59,505	43,582
Other comprehensive income (loss), net of tax
Unrealized gains (losses) on securities, net of tax	(182)	161	(214)	161
Total other comprehensive income (loss), net of tax	(182)	161	(214)	161
Comprehensive income	$ 39,950	$ 28,187	$ 59,291	$ 43,743
Net income per share:
Basic (in dollars per share)	$ 0.75	$ 0.53	$ 1.11	$ 0.82
Diluted (in dollars per share)	$ 0.72	$ 0.51	$ 1.07	$ 0.79
Weighted-average shares used in computing net income per share:
Basic (in shares)	53,629	52,934	53,486	52,880
Diluted (in shares)	55,953	55,465	55,760	55,280

Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings (Accumulated Deficit).	Accumulated Other Comprehensive Income (Loss)	Total
Balance at Jun. 30, 2018	$ 53	$ 219,588	$ (6,678)	$ (139)	$ 212,824
Balance (in shares) at Jun. 30, 2018	52,758
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		30,817			30,817
Stock options exercised		4,140			4,140
Stock options exercised (in shares)	329
Issuance of common stock upon vesting of restricted stock units (in shares)	623
Issuance of common stock under employee stock purchase plan		2,824			2,824
Issuance of common stock under employee stock purchase plan (in shares)	58
Net settlement for taxes and/or exercise price related to equity awards		(25,804)			(25,804)
Net settlement for taxes and/or exercise price related to equity awards (in shares)	(362)
Repurchases of common shares		(34,991)			(34,991)
Repurchases of common shares (in shares)	(442)
Unrealized gains (losses) on securities, net of tax				161	161
Net income			43,582		43,582
Balance at Mar. 31, 2019	$ 53	196,574	89,576	22	286,225
Balance (in shares) at Mar. 31, 2019	52,964
Balance at Dec. 31, 2018	$ 53	189,473	61,550	(139)	250,937
Balance (in shares) at Dec. 31, 2018	52,887
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		9,972			9,972
Stock options exercised		1,483			1,483
Stock options exercised (in shares)	117
Issuance of common stock upon vesting of restricted stock units (in shares)	19
Net settlement for taxes and/or exercise price related to equity awards		(4,354)			(4,354)
Net settlement for taxes and/or exercise price related to equity awards (in shares)	(59)
Unrealized gains (losses) on securities, net of tax				161	161
Net income			28,026		28,026
Balance at Mar. 31, 2019	$ 53	196,574	89,576	22	286,225
Balance (in shares) at Mar. 31, 2019	52,964
Increase (Decrease) in Stockholders' Equity
Cumulative effect of change in accounting policy (adoption of Topic 606)			52,672		52,672
Balance at Jun. 30, 2019	$ 53	207,982	99,817	112	$ 307,964
Balance (in shares) at Jun. 30, 2019	53,075				53,075
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		36,191			$ 36,191
Stock options exercised		1,707			1,707
Stock options exercised (in shares)	153
Issuance of common stock upon vesting of restricted stock units	$ 1	(1)
Issuance of common stock upon vesting of restricted stock units (in shares)	708
Issuance of common stock under employee stock purchase plan		3,961			3,961
Issuance of common stock under employee stock purchase plan (in shares)	45
Net settlement for taxes and/or exercise price related to equity awards		(34,739)			(34,739)
Net settlement for taxes and/or exercise price related to equity awards (in shares)	(321)
Unrealized gains (losses) on securities, net of tax				(214)	(214)
Net income			59,505		59,505
Balance at Mar. 31, 2020	$ 54	215,101	159,322	(102)	$ 374,375
Balance (in shares) at Mar. 31, 2020	53,660				53,660
Balance at Dec. 31, 2019	$ 54	212,240	119,190	80	$ 331,564
Balance (in shares) at Dec. 31, 2019	53,573
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		10,051			10,051
Stock options exercised		1,318			1,318
Stock options exercised (in shares)	130
Issuance of common stock upon vesting of restricted stock units (in shares)	20
Net settlement for taxes and/or exercise price related to equity awards		(8,508)			(8,508)
Net settlement for taxes and/or exercise price related to equity awards (in shares)	(63)
Unrealized gains (losses) on securities, net of tax				(182)	(182)
Net income			40,132		40,132
Balance at Mar. 31, 2020	$ 54	$ 215,101	$ 159,322	$ (102)	$ 374,375
Balance (in shares) at Mar. 31, 2020	53,660				53,660

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net income	$ 59,505	$ 43,582
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense	34,348	28,837
Depreciation and amortization expense	27,832	25,213
Deferred income tax expense	1,544	4,584
Provision for doubtful accounts	232	220
Net accretion of discounts and amortization of premiums on available-for-sale securities	(1,673)	(1,607)
Amortization of debt issuance costs	113
Loss on disposal of equipment	331	399
Changes in operating assets and liabilities:
Accounts receivable	(1,635)	(1,904)
Deferred contract costs	(37,829)	(25,359)
Prepaid expenses and other	68	(1,485)
Accounts payable	863	596
Accrued expenses and other	3,096	5,299
Tenant improvement allowance		784
Net cash provided by operating activities	86,795	79,159
Cash flows from investing activities:
Purchases of available-for-sale securities and other	(400,343)	(210,374)
Proceeds from sales and maturities of available-for-sale securities	250,791	161,306
Capitalized internal-use software costs	(19,213)	(14,706)
Purchases of property and equipment	(14,578)	(9,621)
Lease allowances used for tenant improvements		(784)
Net cash used in investing activities	(183,343)	(74,179)
Cash flows from financing activities:
Net change in client fund obligations	334,707	496,695
Repurchases of common shares		(34,991)
Proceeds from exercise of stock options		85
Proceeds from employee stock purchase plan	3,961	2,824
Taxes paid related to net share settlement of equity awards	(33,136)	(21,749)
Payment of debt issuance costs	(675)
Net cash provided by financing activities	304,857	442,864
Net change in cash, cash equivalents and funds held for clients' cash and cash equivalents	208,309	447,844
Cash, cash equivalents and funds held for clients' cash and cash equivalents-beginning of period	1,426,143	1,239,731
Cash, cash equivalents and funds held for clients' cash and cash equivalents-end of period	1,634,452	1,687,575
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Purchases of property and equipment, accrued but not paid		3,529
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	115
Cash paid for income taxes	24	375
Reconciliation of cash, cash equivalents and funds held for clients' cash and cash equivalents to the Consolidated Balance Sheets
Cash and cash equivalents	114,325	90,856
Funds held for clients' cash and cash equivalents	1,520,127	1,596,719
Total cash, cash equivalents and funds held for clients' cash and cash equivalents	$ 1,634,452	$ 1,687,575

Summary of Significant Accounting Policies

9 Months Ended

Mar. 31, 2020

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation, Consolidation and Use of Estimates

These unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. In March 2020, the World Health Organization declared the outbreak of the novel coronavirus disease (“COVID-19”) as a pandemic which has caused a global slowdown of economic activity that the Company believes will unfavorably impact its business operations and financial conditions. The duration and severity of the COVID-19 pandemic, and the effect the pandemic will have on the Company’s clients and general economic conditions, remains uncertain and difficult to predict. Accounting estimates used in the preparation of these consolidated financial statements may change as new events occur, more experience and additional information is acquired, and the operating environment evolves, including the ongoing impact of COVID-19.

Beginning in fiscal 2020, the Company simplified the presentation of revenue and cost of revenues on its Unaudited Consolidated Statements of Operations and Comprehensive Income. The line items “Recurring fees” and “Implementation services and other” have been combined into one revenue line: “Recurring and other revenue”. Likewise, the line items “Cost of revenues – recurring revenues” and “Cost of revenues – implementation services and other” have been combined into one line: “Cost of revenues”. The Company changed the presentation of revenue and cost of revenues as Implementation services and other has become a smaller component of its overall revenue mix due to the human capital management (“HCM”) suite becoming a larger part of the portfolio. Previously reported results for the three and nine months ended March 31, 2019 have been reclassified to conform to the current presentation.

(b) Interim Unaudited Consolidated Financial Information

The accompanying unaudited consolidated financial statements and notes have been prepared in accordance with GAAP and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the Company’s financial position, results of operations, changes in stockholders’ equity and cash flows. The results of operations for the three and nine months ended March 31, 2020 are not necessarily indicative of the results for the full year or the results for any future periods. The financial impacts from the COVID-19 pandemic became more observable in the latter half of March 2020. As a result, the impact of the COVID-19 pandemic will not be fully known or reflected in the Company’s results of operations and overall financial performance until future periods. Refer to “Item 1A. Risk Factors” in this Quarterly Report on Form 10-

Q for risks related to the COVID-19 pandemic on its business and financial performance. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended June 30, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC on August 9, 2019.

Income taxes are accounted for in accordance with ASC 740, Income Taxes, using the asset and liability method. The Company’s provision for income taxes is based on the annual effective rate method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net-recorded amount, it would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

(d) Recently Adopted Accounting Standards

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The Company adopted the new standard on July 1, 2019 using the modified retrospective method and the transition relief guidance provided by the FASB in ASU 2018-11, Leases (Topic 842): Targeted Improvements. Consequently, the Company did not update financial information or provide disclosures required under the new standard for dates and periods prior to July 1, 2019. The Company elected the package of practical expedients and did not reassess prior conclusions on whether contracts are or contain a lease, lease classification, and initial direct costs. In addition, the Company adopted the lessee practical expedient to combine lease and non-lease components for all asset classes and elected to not recognize ROU assets and lease liabilities for leases with a term of 12 months or less.

Adoption of the new standard resulted in the Company recording operating lease ROU assets and operating lease liabilities of $52,083 and $83,852, respectively, as of July 1, 2019. The ROU assets were recorded net of $31,769 in deferred rent adjustments that were previously recorded in Accrued expenses and Deferred rent on the Consolidated Balance Sheets as of June 30, 2019. The adoption of this standard did not result in any cumulative-effect adjustments to Retained earnings. Additionally, there was no impact on the Company’s unaudited consolidated statements of operations and comprehensive income or the unaudited statement of cash flows as a result of the adoption of Topic 842 for the three and nine months ended March 31, 2019.

Refer to Note 8 for additional disclosures over the Company’s leases.

(e) Recently Issued Accounting Standards

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which amends the requirements for fair value measurement disclosures. ASU 2018-13 removes, modifies or adds certain disclosure requirements under GAAP. This standard is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. Any new disclosure requirements must be applied on a prospective basis in the interim and annual periods of initial adoption; all removed or modified requirements must be applied retrospectively to all periods

presented. The Company plans to adopt this standard on July 1, 2020 and does not expect any material impact from adoption.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”) which provides guidance to reduce complexity in certain areas of accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and simplifies various aspects of the current guidance to promote consistent application of the standard among reporting entities. This standard is effective for fiscal years beginning after December 15, 2020 with early adoption permitted. The Company is currently assessing the impact of ASU 2019-12 on its financial statements as well as the timing and method of adoption.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional practical expedients and exceptions for applying GAAP to contracts and transactions, including debt agreements, affected by interest rate reform as regulators discontinue the use of the London Interbank Offered Rate (LIBOR) and other similar reference rates. This standard is effective for contract modifications made as of March 12, 2020 through December 31, 2022, on a prospective basis. The Company adopted this standard upon its issuance, and it did not have a material impact on the Company’s financial statements.

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of other recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption.

Revenue

9 Months Ended

Mar. 31, 2020

Revenue

Revenue

(3) Revenue

The Company derives its revenue from contracts predominantly from recurring and non-recurring service fees. While the majority of its agreements are generally cancellable by the client on 60 days’ notice or less, the Company also has term arrangements, which are generally two years in length. Recurring fees are derived from payroll, timekeeping, and HR-related cloud-based computing services. The majority of the Company’s recurring fees are satisfied over time as services are provided. The performance obligations related to payroll services are satisfied upon the processing of the client’s payroll with the fee charged and collected based on a per employee per payroll frequency fee. The performance obligations related to time and attendance services and HR related services are satisfied over time each month with the fee charged and collected based on a per employee per month fee. For subscription-based fees which can include payroll, time and attendance, and HR related services, the Company recognizes the applicable recurring fees over time each month with the fee charged and collected based on a per employee per month fee. Non-recurring service fees consist mainly of nonrefundable implementation fees, which involve setting the client up in, and loading data into, the Company’s cloud-based modules. These implementation activities are considered set-up activities. The Company has determined that the nonrefundable upfront fees provide certain clients with a material right to renew the contract. Implementation fees are deferred and amortized generally over a period up to 24 months.

Disaggregation of revenue

The following table disaggregates revenue by Recurring fees and Implementation services and other, which the Company believes depicts the nature, amount and timing of its revenue:


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2019		2020		2019		2020
Recurring fees	$	129,976	$	161,266	$	326,012	$	402,605
Implementation services and other		3,379		5,829		7,084		14,343
Total revenues from contracts	$	133,355	$	167,095	$	333,096	$	416,948

Deferred revenue

The timing of revenue recognition for recurring revenue is consistent with the timing of invoicing as they occur simultaneously based on the client’s payroll frequency or by month for subscription-based fees. As such, the Company does not recognize contract assets or liabilities related to recurring revenue.

The nonrefundable upfront fees related to implementation services are invoiced with the client’s first payroll period. The Company defers and recognizes these nonrefundable upfront fees generally over a period up to 24 months based on the type of contract. The following table summarizes the changes in deferred revenue (i.e. contract liability) related to these nonrefundable upfront fees as follows:


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2019		2020		2019		2020
Balance at beginning of the period	$	3,623	$	6,853	$	—	$	6,289
Deferral of revenue		4,730		6,099		10,243		12,342
Revenue recognized		(2,354)		(3,992)		(4,244)		(9,671)
Balance at end of the period	$	5,999	$	8,960	$	5,999	$	8,960

Deferred revenue related to these nonrefundable upfront fees are recorded within Accrued expenses and Other long-term liabilities on the Unaudited Consolidated Balance Sheets. The Company expects to recognize these deferred revenue balances of $3,466 in fiscal 2020, $4,463 in fiscal 2021, $1,031 in fiscal 2022 and thereafter.

Deferred contract costs

The Company defers certain selling and commission costs that meet the capitalization criteria under ASC 340-40. The Company also capitalizes certain costs to fulfill a contract related to its proprietary products if they are identifiable, generate or enhance resources used to satisfy future performance obligations and are expected to be recovered under ASC 340-40. Implementation fees are treated as nonrefundable upfront fees and the related implementation costs are required to be capitalized and amortized over the expected period of benefit, which is the period in which the Company expects to recover the costs and enhance its ability to satisfy future performance obligations.

The Company utilizes the portfolio approach to account for both the cost of obtaining a contract and the cost of fulfilling a contract. These capitalized costs are amortized over the expected period of benefit, which has been determined to be over 7 years based on the Company’s average client life and other qualitative factors, including rate of technological changes. The Company does not incur any additional costs to obtain or fulfill contracts upon renewal. The Company recognizes additional selling and commission costs and fulfillment costs when an existing client purchases additional services. These additional costs only relate to the additional services purchased and do not relate to the renewal of previous services.

The following tables present the deferred contract costs and the related amortization expense for these deferred contract costs:


	Three Months Ended March 31, 2019
	Beginning		Capitalized				Ending
	Balance		Costs		Amortization		Balance
Costs to obtain a new contract	$	71,476	$	10,544	$	(4,386)	$	77,634
Costs to fulfill a contract		10,787		5,583		(538)		15,832
Total	$	82,263	$	16,127	$	(4,924)	$	93,466


	Three Months Ended March 31, 2020
	Beginning		Capitalized				Ending
	Balance		Costs		Amortization		Balance
Costs to obtain a new contract	$	92,848	$	15,141	$	(5,738)	$	102,251
Costs to fulfill a contract		32,685		7,483		(1,491)		38,677
Total	$	125,533	$	22,624	$	(7,229)	$	140,928


	Nine Months Ended March 31, 2019
	Beginning		Capitalized				Ending
	Balance		Costs		Amortization		Balance
Costs to obtain a new contract	$	68,107	$	21,890	$	(12,363)	$	77,634
Costs to fulfill a contract		—		16,833		(1,001)		15,832
Total	$	68,107	$	38,723	$	(13,364)	$	93,466


	Nine Months Ended March 31, 2020
	Beginning		Capitalized				Ending
	Balance		Costs		Amortization		Balance
Costs to obtain a new contract	$	82,103	$	36,027	$	(15,879)	$	102,251
Costs to fulfill a contract		20,996		21,348		(3,667)		38,677
Total	$	103,099	$	57,375	$	(19,546)	$	140,928

Deferred contract costs are recorded within Deferred contract costs and Long-term deferred contract costs on the Unaudited Consolidated Balance Sheets. Amortization of deferred contract costs is recorded in Cost of revenues, Sales and marketing, and General and administrative in the Unaudited Consolidated Statements of Operations and Comprehensive Income.

Remaining Performance Obligations

The balance of the Company’s remaining performance obligations related to minimum monthly fees on its term-based contracts was approximately $47,673 as of March 31, 2020, which will be generally recognized over the next 24 months. This balance excludes the value of unsatisfied performance obligations for contracts that have an original expected duration of one year or less and contracts for which the variable consideration is allocated entirely to wholly unsatisfied performance obligations.

Balance Sheet Information

9 Months Ended

Mar. 31, 2020

Balance Sheet Information

Balance Sheet Information

(4) Balance Sheet Information

The following tables provide details of selected consolidated balance sheet items:

Activity in the allowance for doubtful accounts was as follows:


Balance at June 30, 2019	$	473
Charged to expense		232
Write-offs		(116)
Balance at March 31, 2020	$	589

Capitalized internal-use software and accumulated amortization were as follows:


	June 30,		March 31,
	2019		2020
Capitalized internal-use software	$	90,991	$	111,556
Accumulated amortization		(63,505)		(77,489)
Capitalized internal-use software, net	$	27,486	$	34,067

Amortization of capitalized internal-use software costs is included in Cost of revenues and amounted to $4,224 and $4,926 for the three months ended March 31, 2019 and 2020, respectively, and $12,854 and $14,073 for the nine months ended March 31, 2019 and 2020, respectively.

Property and equipment, net consist of the following:


	June 30,		March 31,
	2019		2020
Office equipment	$	4,406	$	4,491
Computer equipment		36,798		42,478
Furniture and fixtures		11,857		12,764
Software		6,332		6,603
Leasehold improvements		44,350		45,366
Time clocks rented by clients		4,679		4,907
Total		108,422		116,609
Accumulated depreciation		(38,366)		(47,911)
Property and equipment, net	$	70,056	$	68,698

Depreciation expense amounted to $3,626 and $4,082 for the three months ended March 31, 2019 and 2020, respectively, and $10,671 and $12,071 for the nine months ended March 31, 2019 and 2020, respectively.

The Company’s amortizable intangible assets and estimated useful lives are as follows:



	June 30,		March 31,		Useful
	2019		2020		Life
Client relationships	$	18,130	$	18,130	7 - 9 years
Non-solicitation agreements		600		600	2 - 4 years
Total		18,730		18,730
Accumulated amortization		(7,979)		(9,667)
Intangible assets, net	$	10,751	$	9,063

Amortization expense for acquired intangible assets was $562 and $563 for the three months ended March 31, 2019 and 2020, respectively, and $1,688 for both the nine months ended March 31, 2019 and 2020.

Future amortization expense for acquired intangible assets as of March 31, 2020 is as follows:


Remainder of fiscal 2020	$	563
Fiscal 2021		2,251
Fiscal 2022		2,232
Fiscal 2023		2,118
Fiscal 2024		1,356
Thereafter		543
Total	$	9,063

The components of accrued expenses were as follows:


	June 30,		March 31,
	2019		2020
Accrued payroll and personnel costs	$	39,095	$	38,386
Operating lease liabilities		—		7,955
Deferred revenue		5,572		8,308
Other		12,958		9,353
Total accrued expenses	$	57,625	$	64,002

Corporate Investments and Funds Held for Clients

9 Months Ended

Mar. 31, 2020

Corporate Investments and Funds Held for Clients

Corporate Investments and Funds Held for Clients

(5) Corporate Investments and Funds Held for Clients

Corporate investments and funds held for clients consist of the following:


	June 30, 2019
			Gross		Gross
	Amortized		unrealized		unrealized
Type of Issue	cost		gains		losses		Fair value
Cash and cash equivalents	$	132,478	$	—	$	(2)	$	132,476
Funds held for clients' cash and cash equivalents		1,293,673		—		(6)		1,293,667
Available-for-sale securities:
Commercial paper		63,397		33		(2)		63,428
Corporate bonds		27,044		59		(4)		27,099
Asset-backed securities		26,488		55		(3)		26,540
U.S. treasury securities		13,736		21		—		13,757
Total available-for-sale securities (1)		130,665		168		(9)		130,824
Total investments	$	1,556,816	$	168	$	(17)	$	1,556,967

(1)

Included within the fair value of total available-for-sale securities above is $30,022 of corporate investments and $100,802 of funds held for clients.


	March 31, 2020
			Gross		Gross
	Amortized		unrealized		unrealized
Type of Issue	cost		gains		losses		Fair value
Cash and cash equivalents	$	114,323	$	3	$	(1)	$	114,325
Funds held for clients' cash and cash equivalents		1,520,105		23		(1)		1,520,127
Available-for-sale securities:
Commercial paper		150,388		50		(1)		150,437
Corporate bonds		52,587		18		(357)		52,248
Asset-backed securities		57,612		64		(90)		57,586
U.S. treasury securities		21,302		155		—		21,457
Total available-for-sale securities (2)		281,889		287		(448)		281,728
Total investments	$	1,916,317	$	313	$	(450)	$	1,916,180

(2)

Included within the fair value of total available-for-sale securities above is $72,679 of corporate investments and $209,049 of funds held for clients.

Cash and cash equivalents and funds held for clients’ cash and cash equivalents include demand deposit accounts, money market funds, commercial paper and U.S. treasury securities with original maturities of three months or less as of June 30, 2019 and March 31, 2020.

Classification of investments on the unaudited consolidated balance sheets is as follows:


	June 30,		March 31,
	2019		2020
Cash and cash equivalents	$	132,476	$	114,325
Corporate investments		29,314		66,308
Funds held for clients		1,394,469		1,729,176
Long-term prepaid expenses and other		708		6,371
Total investments	$	1,556,967	$	1,916,180

Available-for-sale securities that have been in an unrealized loss position for a period of less and greater than 12 months are as follows:


	June 30, 2019
	Securities in an				Securities in an
	unrealized loss				unrealized loss
	position for less				position for greater
	than 12 months				than 12 months				Total
	Gross				Gross				Gross
	unrealized				unrealized				unrealized
	losses		Fair value		losses		Fair value		losses		Fair value
Commercial paper	$	(2)	$	19,055	$	—	$	—	$	(2)	$	19,055
Corporate bonds		(1)		1,500		(3)		3,701		(4)		5,201
Asset-backed securities		(1)		386		(2)		2,958		(3)		3,344
Total available-for-sale securities	$	(4)	$	20,941	$	(5)	$	6,659	$	(9)	$	27,600


	March 31, 2020
	Securities in an				Securities in an
	unrealized loss				unrealized loss
	position for less				position for greater
	than 12 months				than 12 months				Total
	Gross				Gross				Gross
	unrealized				unrealized				unrealized
	losses		Fair value		losses		Fair value		losses		Fair value
Commercial paper	$	(1)	$	498	$	—	$	—	$	(1)	$	498
Corporate bonds		(357)		42,474		—		—		(357)		42,474
Asset-backed securities		(90)		29,900		—		—		(90)		29,900
Total available-for-sale securities	$	(448)	$	72,872	$	—	$	—	$	(448)	$	72,872

The Company regularly reviews the composition of its portfolio to determine the existence of other-than-temporary-impairment (“OTTI”). The Company did not recognize any OTTI charges in accumulated other comprehensive income during the three or nine months ended March 31, 2019 or 2020, nor does it believe that OTTI exists in its portfolio as of March 31, 2020. The Company plans to retain the securities in an unrealized loss position for a period of time sufficient enough to recover their amortized cost basis or until their maturity date. The Company does not believe that the unrealized losses in its portfolio are due to material credit risks. The securities in an unrealized loss position held an A-1 rating or better as of March 31, 2020.

The Company did not make any material reclassification adjustments out of accumulated other comprehensive income for realized gains and losses on the sale of available-for-sale securities during the three or nine months ended March 31, 2019 or 2020. Gross realized gains and losses on the sale of available-for-sale securities were immaterial for both the three and nine months ended March 31, 2019 and 2020.

Expected maturities of available-for-sale securities at March 31, 2020 are as follows:


	Amortized
	cost		Fair value
One year or less	$	244,939	$	245,004
One year to two years		36,950		36,724
Total available-for-sale securities	$	281,889	$	281,728

Fair Value Measurement

9 Months Ended

Mar. 31, 2020

Fair Value Measurement

Fair Value Measurement

(6) Fair Value Measurement

The Company applies the fair value measurement and disclosure provisions of ASC 820, Fair Value Measurements and Disclosures, and ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

●

Level 1—Quoted prices in active markets for identical assets and liabilities.

●

Level 2—Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

●

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The Company measures certain cash and cash equivalents, accounts receivable, accounts payable and client fund obligations at fair value on a recurring basis using Level 1 inputs. The Company considers the recorded value of these financial assets and liabilities to approximate the fair value of the respective assets and liabilities at June 30, 2019 and March 31, 2020 based upon the short-term nature of these assets and liabilities.

Marketable securities, consisting of securities classified as available-for-sale as well as certain cash equivalents, are recorded at fair value on a recurring basis using Level 2 inputs obtained from an independent pricing service. Available-for-sale securities include commercial paper, corporate bonds, asset-backed securities and U.S. treasury securities. The independent pricing service utilizes a variety of inputs including benchmark yields, broker/dealer quoted prices, reported trades, issuer spreads as well as other available market data. The Company, on a sample basis, validates the pricing from the independent pricing service against another third-party pricing source for reasonableness. The Company has not adjusted any prices obtained by the independent pricing service, as it believes they are appropriately valued. There were no available-for-sale securities classified in Level 3 of the fair value hierarchy at June 30, 2019 or March 31, 2020, and the Company did not transfer assets between Levels during the nine months ended March 31, 2019 or 2020.

The fair value level for the Company’s cash and cash equivalents and available-for-sale securities is as follows:


	June 30, 2019
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	132,476	$	116,387	$	16,089	$	—
Funds held for clients' cash and cash equivalents		1,293,667		1,244,856		48,811		—
Available-for-sale securities:
Commercial paper		63,428		—		63,428		—
Corporate bonds		27,099		—		27,099		—
Asset-backed securities		26,540		—		26,540		—
U.S. treasury securities		13,757		—		13,757		—
Total available-for-sale securities		130,824		—		130,824		—
Total investments	$	1,556,967	$	1,361,243	$	195,724	$	—


	March 31, 2020
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	114,325	$	90,791	$	23,534	$	—
Funds held for clients' cash and cash equivalents		1,520,127		1,439,324		80,803		—
Available-for-sale securities:
Commercial paper		150,437		—		150,437		—
Corporate bonds		52,248		—		52,248		—
Asset-backed securities		57,586		—		57,586		—
U.S. treasury securities		21,457		—		21,457		—
Total available-for-sale securities		281,728		—		281,728		—
Total investments	$	1,916,180	$	1,530,115	$	386,065	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Leases

9 Months Ended

Mar. 31, 2020

Leases

Leases

(8) Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets, Accrued expenses, and Long-term operating lease liabilities in the Unaudited Consolidated Balance Sheets. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, the Company uses its incremental borrowing rate based on the information available at the lease commencement date. The operating lease right-of-use assets also include any lease payments made at or before the commencement date and are reduced by any lease incentives received. The Company’s lease terms may include options to extend or not terminate the lease when it is reasonably certain that it will exercise any such options. For the majority of its leases, the Company concluded that it is not reasonably certain that any renewal options would be exercised, and, therefore, the amounts are not recognized as part of Operating lease right-of-use assets nor Operating lease liabilities. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense is recognized on a straight-line basis over the expected lease term.

The Company’s most significant leases are real estate leases of office space. The remaining operating leases are primarily comprised of leases of printers and other equipment. For all leases, the Company has elected the practical expedient permitted under Topic 842 to combine lease and non-lease components. As a result, non-lease components, such as common area or equipment maintenance charges, are accounted for as a single lease element. The Company does not have any finance leases.

Fixed lease expense payments are recognized on a straight-line basis over the lease term. Variable lease payments vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time, and are often due to changes in an external market rate or the value of an index (e.g. Consumer Price Index). Certain of the Company’s operating lease agreements include variable payments that are passed through by the landlord, such as insurance, taxes, and common area maintenance, payments based on the usage of the asset, and rental payments adjusted periodically for inflation. Variable payments are expensed as incurred and included within variable rent expense.

The Company’s lease agreements do not contain material residual value guarantees, restrictions, or covenants.

The components of operating lease expense were as follows:


	Three Months Ended		Nine Months Ended
	March 31, 2020		March 31, 2020
Operating lease cost	$	2,358	$	6,995
Short-term lease cost		1		15
Variable lease cost		848		2,308
Total lease costs	$	3,207	$	9,318

The classification of the Company’s operating lease right-of-use assets and operating lease liabilities and other supplemental information related to the Company’s operating leases are as follows:


	March 31, 2020
Operating lease right-of-use assets	$	50,180
Accrued expenses	$	7,955
Long-term operating lease liabilities	$	74,912
Weighted-average remaining lease term (years)		10.44
Weighted-average discount rate		3.83	%

The following table summarizes supplemental cash flow information related to the Company’s operating leases as of March 31, 2020:


	Nine Months Ended
	March 31, 2020
Cash paid for amounts included in the measurement of operating lease liabilities	$	7,716
Operating lease assets obtained in exchange for new liabilities	$	2,723

The undiscounted cash flows for future maturities of the Company’s operating lease liabilities and the reconciliation to the balance of operating lease liabilities reflected on the Company’s balance sheet are as follows as of March 31, 2020:


Remainder of fiscal 2020	$	2,755
Fiscal 2021		10,890
Fiscal 2022		9,609
Fiscal 2023		9,229
Fiscal 2024		9,210
Thereafter		60,026
Total undiscounted cash flows		101,719
Less: Present value discount		(18,852)
Total operating lease liabilities	$	82,867

The table above excludes $546 in the undiscounted future minimum lease payments for operating lease liabilities that had not yet commenced for terms up to 5.67 years.

Rent expense was $2,596 and $7,059 for the three and nine months ended March 31, 2019, respectively.

Future minimum lease payments under non-cancellable operating leases (with initial or remaining terms in excess of one year) as of June 30, 2019 under ASC 840 were as follows:


Fiscal 2020	$	10,449
Fiscal 2021		11,150
Fiscal 2022		9,500
Fiscal 2023		8,840
Fiscal 2024		8,838
Thereafter		59,401
Total minimum lease payments	$	108,178

Benefit Plans

9 Months Ended

Mar. 31, 2020

Benefit Plans

Benefit Plans

(9) Benefit Plans

(a) Equity Incentive Plan

The Company maintains a 2008 Equity Incentive Plan (the “2008 Plan”) and a 2014 Equity Incentive Plan (the “2014 Plan”) pursuant to which the Company has reserved shares of its common stock for issuance to its employees, directors and non-employee third parties. The 2014 Plan serves as the successor to the 2008 Plan and permits the granting of options to purchase common stock and other equity incentives at the discretion of the compensation committee of the Company’s board of directors. No new awards have been or will be issued under the 2008 Plan since the effective date of the 2014 Plan. Outstanding awards under the 2008 Plan continue to be subject to the terms and conditions of the 2008 Plan. The number of shares of common stock reserved for issuance under the 2014 Plan may increase each calendar year, continuing through and including January 1, 2024. The number of shares added each year may be equal to the lesser of (a) four and five tenths percent (4.5%) of the number of shares of common stock of the Company issued and outstanding on the immediately preceding December 31, or (b) an amount determined by the Company’s board of directors. The Company’s board of directors determined that it would not increase the number of shares in reserve for issuance under the 2014 Plan as of January 1, 2020.

As of March 31, 2020, the Company had 12,518 shares allocated to the plans, of which 3,026 shares were subject to outstanding options or awards. Generally, the Company issues previously unissued shares for the exercise of stock options or vesting of awards; however, shares previously subject to 2014 Plan grants or awards that are forfeited or net settled at exercise or release may be reissued to satisfy future issuances.

The following table summarizes changes in the number of shares available for grant under the Company’s equity incentive plans during the nine months ended March 31, 2020:


		Number of Shares
Available for grant at July 1, 2019		9,759
RSUs granted		(642)
Shares withheld in settlement of taxes and/or exercise price		321
Forfeitures		93
Shares removed		(39)
Available for grant at March 31, 2020		9,492

Shares removed represents forfeitures of shares and shares withheld in settlement of taxes and/or payment of exercise price related to grants made under the 2008 Plan. As noted above, no new awards will be issued under the 2008 Plan.

Stock-based compensation expense related to stock options, restricted stock units (“RSUs”), and the Employee Stock Purchase Plan (as described below) is included in the following line items in the accompanying unaudited consolidated statements of operations and comprehensive income:


	Three Months Ended March 31,				Nine Months Ended March 31,
	2019		2020		2019		2020
Cost of revenues	$	1,192	$	1,362	$	3,734	$	4,057
Sales and marketing		1,799		3,466		5,496		10,813
Research and development		1,287		1,899		4,025		4,945
General and administrative		5,035		2,789		15,582		14,533
Total stock-based compensation expense	$	9,313	$	9,516	$	28,837	$	34,348

In addition, the Company capitalized $659 and $535 of stock-based compensation expense in its capitalized internal-use software costs in the three months ended March 31, 2019 and 2020, respectively, and $1,980 and $1,843 in the nine months ended March 31, 2019 and 2020, respectively.

Under the 2008 and 2014 Plans, the exercise price of each option cannot be less than the fair value of a share of common stock on the grant date. The options vested ratably over a three or four-year period and expire 10 years from the grant date. Stock-based compensation expense for the fair value of the options at their grant date is recognized ratably over the vesting schedule for each separately vesting portion of the award.

There were no stock options granted during the nine months ended March 31, 2019 or 2020. The table below presents stock option activity during the nine months ended March 31, 2020:


	Outstanding Options
				Weighted
		Weighted		average
		average		remaining	Aggregate
	Number of	exercise		contractual	intrinsic
	shares	price		term (years)	value
Balance at July 1, 2019	1,525	$	12.24	3.95	$	124,373
Options exercised	(153)	$	11.15
Balance at March 31, 2020	1,372	$	12.37	3.20	$	104,172
Options vested and exercisable at March 31, 2020	1,372	$	12.37	3.20	$	104,172

The total intrinsic value of options exercised was $7,197 and $16,164 during the three months ended March 31, 2019 and 2020, respectively, and $20,901 and $18,244 during the nine months ended March 31, 2019 and 2020, respectively. As of March 31, 2020, the Company had recognized all stock-based compensation cost related to outstanding stock options and all outstanding options had vested.

The Company may also grant RSUs under the 2014 Plan with terms determined at the discretion of the compensation committee of the Company’s board of directors. RSUs generally vest over four years following the grant date. Certain RSU awards have time-based vesting conditions while other RSUs vest based on the achievement of certain revenue growth and Adjusted EBITDA margin targets in future fiscal years. For these performance-based RSUs, the Company recognizes stock-based compensation expense based upon the probable achievement of these aforementioned performance metrics. In the third quarter of fiscal 2020, the Company determined that the probable achievement of performance metrics for such outstanding performance-based awards would be lower as a result of the COVID-19 pandemic and its anticipated impact on the Company’s operating results. As a result, the Company reversed $2,053 in stock-based compensation expense associated with such awards during the three months ended March 31, 2020.

The following table represents restricted stock unit activity during the nine months ended March 31, 2020:


	Units	Weighted average grant date fair value
RSU balance at July 1, 2019	1,813	$	53.78
RSUs granted	642	$	99.72
RSUs vested	(708)	$	49.75
RSUs forfeited	(93)	$	59.72
RSU balance at March 31, 2020	1,654	$	73.57
RSUs expected to vest at March 31, 2020	1,442	$	71.83

At March 31, 2020, there was $50,414 of total unrecognized compensation cost, net of estimated forfeitures, related to unvested restricted stock units granted. That cost is expected to be recognized over a weighted average period of 1.91 years.

(b) Employee Stock Purchase Plan

Under the Company’s Employee Stock Purchase Plan (“ESPP”), the Company can grant stock purchase rights to all eligible employees during specific offering periods not to exceed twenty-seven months. Each offering period will begin on the trading day closest to May 16 and November 16 of each year. Shares are purchased through employees’ payroll deductions, up to a maximum of 10% of employees’ compensation for each purchase period, at a purchase price equal to 85% of the lesser of the fair market value of the Company’s common stock at the first trading day of the applicable offering period or the purchase date. Participants may purchase up to $25 worth of common stock or 2 shares of common stock in any one year. The ESPP is considered compensatory and recorded as stock-based compensation expense.

As of March 31, 2020, a total of 950 shares of common stock were reserved for future issuances under the ESPP. The number of shares of common stock reserved for issuance under the ESPP may increase each calendar year, continuing through and including January 1, 2024. The number of shares added each year may be equal to the lesser of (a) 400, (b) seventy-five one hundredths percent (0.75%) of the number of shares of common stock of the Company issued and outstanding on the immediately preceding December 31, or (c) an amount determined by the Company’s board of directors. The Company’s board of directors determined that it would not increase the number of shares in reserve for issuance under the ESPP as of January 1, 2020.

The Company issued 45 shares upon the completion of its six-month offering period ending November 15, 2019. The Company recorded compensation expense attributable to the ESPP of $516 and $831 for the three months ended March 31, 2019 and 2020, respectively, and $1,401 and $2,208 for the nine months ended March 31, 2019 and 2020, respectively, which is included in the summary of stock-based compensation expense above. The grant date fair value of the ESPP offering periods was estimated using the following weighted average assumptions:


	Nine Months Ended
	March 31,
	2019		2020
Valuation assumptions:
Expected dividend yield	0	%	0	%
Expected volatility	33.5 - 38.3	%	38.6 - 43.3	%
Expected term (years)	0.5		0.5
Risk‑free interest rate	2.10 - 2.48	%	1.58 - 2.44	%

The Company maintains a 401(k) plan with a matching provision that covers all eligible employees. The Company matches 50% of employees’ contributions up to 8% of their gross pay. Contributions were $1,604 and $2,176 for the three months ended March 31, 2019 and 2020, respectively, and $4,138 and $5,947 for the nine months ended March 31, 2019 and 2020, respectively.

Net Income Per Share

9 Months Ended

Mar. 31, 2020

Net Income Per Share

Net Income Per Share

(12) Net Income Per Share

Basic net income per common share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of common shares outstanding during the period and, if dilutive, potential common shares outstanding during the period. The Company’s potential common shares consist of the incremental common shares issuable upon the exercise of stock options, the release of restricted stock units, and the shares purchasable via the employee stock purchase plan as of the balance sheet date. The following table presents the calculation of basic and diluted net income per share:


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2019		2020		2019		2020
Numerator:
Net income	$	28,026	$	40,132	$	43,582	$	59,505

Denominator:
Weighted-average shares used in computing net income per share:
Basic		52,934		53,629		52,880		53,486
Weighted-average effect of potentially dilutive shares:
Employee stock options, restricted stock units and employee stock purchase plan shares		2,531		2,324		2,400		2,274
Diluted		55,465		55,953		55,280		55,760

Net income per share:
Basic	$	0.53	$	0.75	$	0.82	$	1.11
Diluted	$	0.51	$	0.72	$	0.79	$	1.07

The Company excluded 18 and 6 outstanding RSUs from the diluted per share calculations during the three months ended March 31, 2019 and 2020, respectively, and 49 and 17 outstanding RSUs from the diluted per share calculations during the nine months ended March 31, 2019 and 2020, respectively, because to include them would have been anti-dilutive.

In August 2018, the Company announced that its board of directors approved a program to repurchase up to $35,000 of the Company’s common stock, with authorization through August 14, 2019. The Company completed the repurchase program during the first quarter of fiscal 2019 and repurchased 442 shares for $34,991. All shares of common stock repurchased were retired.

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2020
Summary of Significant Accounting Policies
Basis of Presentation, Consolidation, and Use of Estimates	(a) Basis of Presentation, Consolidation and Use of Estimates These unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. In March 2020, the World Health Organization declared the outbreak of the novel coronavirus disease (“COVID-19”) as a pandemic which has caused a global slowdown of economic activity that the Company believes will unfavorably impact its business operations and financial conditions. The duration and severity of the COVID-19 pandemic, and the effect the pandemic will have on the Company’s clients and general economic conditions, remains uncertain and difficult to predict. Accounting estimates used in the preparation of these consolidated financial statements may change as new events occur, more experience and additional information is acquired, and the operating environment evolves, including the ongoing impact of COVID-19. Beginning in fiscal 2020, the Company simplified the presentation of revenue and cost of revenues on its Unaudited Consolidated Statements of Operations and Comprehensive Income. The line items “Recurring fees” and “Implementation services and other” have been combined into one revenue line: “Recurring and other revenue”. Likewise, the line items “Cost of revenues – recurring revenues” and “Cost of revenues – implementation services and other” have been combined into one line: “Cost of revenues”. The Company changed the presentation of revenue and cost of revenues as Implementation services and other has become a smaller component of its overall revenue mix due to the human capital management (“HCM”) suite becoming a larger part of the portfolio. Previously reported results for the three and nine months ended March 31, 2019 have been reclassified to conform to the current presentation.
Interim Unaudited Consolidated Financial Information	(b) Interim Unaudited Consolidated Financial Information The accompanying unaudited consolidated financial statements and notes have been prepared in accordance with GAAP and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the Company’s financial position, results of operations, changes in stockholders’ equity and cash flows. The results of operations for the three and nine months ended March 31, 2020 are not necessarily indicative of the results for the full year or the results for any future periods. The financial impacts from the COVID-19 pandemic became more observable in the latter half of March 2020. As a result, the impact of the COVID-19 pandemic will not be fully known or reflected in the Company’s results of operations and overall financial performance until future periods. Refer to “Item 1A. Risk Factors” in this Quarterly Report on Form 10- Q for risks related to the COVID-19 pandemic on its business and financial performance. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended June 30, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC on August 9, 2019.
Income Taxes	(c) Income Taxes Income taxes are accounted for in accordance with ASC 740, Income Taxes, using the asset and liability method. The Company’s provision for income taxes is based on the annual effective rate method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net-recorded amount, it would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
Recently Adopted Accounting Standards	(d) Recently Adopted Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The Company adopted the new standard on July 1, 2019 using the modified retrospective method and the transition relief guidance provided by the FASB in ASU 2018-11, Leases (Topic 842): Targeted Improvements. Consequently, the Company did not update financial information or provide disclosures required under the new standard for dates and periods prior to July 1, 2019. The Company elected the package of practical expedients and did not reassess prior conclusions on whether contracts are or contain a lease, lease classification, and initial direct costs. In addition, the Company adopted the lessee practical expedient to combine lease and non-lease components for all asset classes and elected to not recognize ROU assets and lease liabilities for leases with a term of 12 months or less. Adoption of the new standard resulted in the Company recording operating lease ROU assets and operating lease liabilities of $52,083 and $83,852, respectively, as of July 1, 2019. The ROU assets were recorded net of $31,769 in deferred rent adjustments that were previously recorded in Accrued expenses and Deferred rent on the Consolidated Balance Sheets as of June 30, 2019. The adoption of this standard did not result in any cumulative-effect adjustments to Retained earnings. Additionally, there was no impact on the Company’s unaudited consolidated statements of operations and comprehensive income or the unaudited statement of cash flows as a result of the adoption of Topic 842 for the three and nine months ended March 31, 2019. Refer to Note 8 for additional disclosures over the Company’s leases.
Recently Issued Accounting Standards	(e) Recently Issued Accounting Standards In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which amends the requirements for fair value measurement disclosures. ASU 2018-13 removes, modifies or adds certain disclosure requirements under GAAP. This standard is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. Any new disclosure requirements must be applied on a prospective basis in the interim and annual periods of initial adoption; all removed or modified requirements must be applied retrospectively to all periods presented. The Company plans to adopt this standard on July 1, 2020 and does not expect any material impact from adoption. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”) which provides guidance to reduce complexity in certain areas of accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and simplifies various aspects of the current guidance to promote consistent application of the standard among reporting entities. This standard is effective for fiscal years beginning after December 15, 2020 with early adoption permitted. The Company is currently assessing the impact of ASU 2019-12 on its financial statements as well as the timing and method of adoption. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional practical expedients and exceptions for applying GAAP to contracts and transactions, including debt agreements, affected by interest rate reform as regulators discontinue the use of the London Interbank Offered Rate (LIBOR) and other similar reference rates. This standard is effective for contract modifications made as of March 12, 2020 through December 31, 2022, on a prospective basis. The Company adopted this standard upon its issuance, and it did not have a material impact on the Company’s financial statements. From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of other recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption.

- Definition

Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 20
-URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32847-109319

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 954
-SubTopic 740
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6491622&loc=d3e9504-115650

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=84158767&loc=d3e18780-107790

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=116657188&loc=SL116659661-227067

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 19
-URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32840-109319

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 45
-Paragraph 25
-URI http://asc.fasb.org/extlink&oid=116821951&loc=d3e32247-109318

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 45
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=116821951&loc=d3e32280-109318

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 05
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=65884525&loc=d3e40913-109327

+ Details

Revenue (Tables)

9 Months Ended

Mar. 31, 2020

Revenue

Schedule of disaggregation of revenue


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2019		2020		2019		2020
Recurring fees	$	129,976	$	161,266	$	326,012	$	402,605
Implementation services and other		3,379		5,829		7,084		14,343
Total revenues from contracts	$	133,355	$	167,095	$	333,096	$	416,948

Schedule of changes in deferred revenue related to nonrefundable upfront fees


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2019		2020		2019		2020
Balance at beginning of the period	$	3,623	$	6,853	$	—	$	6,289
Deferral of revenue		4,730		6,099		10,243		12,342
Revenue recognized		(2,354)		(3,992)		(4,244)		(9,671)
Balance at end of the period	$	5,999	$	8,960	$	5,999	$	8,960

Schedule of deferred contract costs and the related amortization expense


	Three Months Ended March 31, 2019
	Beginning		Capitalized				Ending
	Balance		Costs		Amortization		Balance
Costs to obtain a new contract	$	71,476	$	10,544	$	(4,386)	$	77,634
Costs to fulfill a contract		10,787		5,583		(538)		15,832
Total	$	82,263	$	16,127	$	(4,924)	$	93,466


	Three Months Ended March 31, 2020
	Beginning		Capitalized				Ending
	Balance		Costs		Amortization		Balance
Costs to obtain a new contract	$	92,848	$	15,141	$	(5,738)	$	102,251
Costs to fulfill a contract		32,685		7,483		(1,491)		38,677
Total	$	125,533	$	22,624	$	(7,229)	$	140,928


	Nine Months Ended March 31, 2019
	Beginning		Capitalized				Ending
	Balance		Costs		Amortization		Balance
Costs to obtain a new contract	$	68,107	$	21,890	$	(12,363)	$	77,634
Costs to fulfill a contract		—		16,833		(1,001)		15,832
Total	$	68,107	$	38,723	$	(13,364)	$	93,466


	Nine Months Ended March 31, 2020
	Beginning		Capitalized				Ending
	Balance		Costs		Amortization		Balance
Costs to obtain a new contract	$	82,103	$	36,027	$	(15,879)	$	102,251
Costs to fulfill a contract		20,996		21,348		(3,667)		38,677
Total	$	103,099	$	57,375	$	(19,546)	$	140,928

Balance Sheet Information (Tables)

9 Months Ended

Mar. 31, 2020

Balance Sheet Information

Schedule of activity in the allowance for doubtful accounts


Balance at June 30, 2019	$	473
Charged to expense		232
Write-offs		(116)
Balance at March 31, 2020	$	589

Schedule of capitalized internal-use software and accumulated amortization


	June 30,		March 31,
	2019		2020
Capitalized internal-use software	$	90,991	$	111,556
Accumulated amortization		(63,505)		(77,489)
Capitalized internal-use software, net	$	27,486	$	34,067

Schedule of property and equipment, net


	June 30,		March 31,
	2019		2020
Office equipment	$	4,406	$	4,491
Computer equipment		36,798		42,478
Furniture and fixtures		11,857		12,764
Software		6,332		6,603
Leasehold improvements		44,350		45,366
Time clocks rented by clients		4,679		4,907
Total		108,422		116,609
Accumulated depreciation		(38,366)		(47,911)
Property and equipment, net	$	70,056	$	68,698

Schedule of amortizable intangible assets and estimated useful lives



	June 30,		March 31,		Useful
	2019		2020		Life
Client relationships	$	18,130	$	18,130	7 - 9 years
Non-solicitation agreements		600		600	2 - 4 years
Total		18,730		18,730
Accumulated amortization		(7,979)		(9,667)
Intangible assets, net	$	10,751	$	9,063

Schedule of future amortization expense for acquired intangible assets


Remainder of fiscal 2020	$	563
Fiscal 2021		2,251
Fiscal 2022		2,232
Fiscal 2023		2,118
Fiscal 2024		1,356
Thereafter		543
Total	$	9,063

Schedule of components of accrued expenses


	June 30,		March 31,
	2019		2020
Accrued payroll and personnel costs	$	39,095	$	38,386
Operating lease liabilities		—		7,955
Deferred revenue		5,572		8,308
Other		12,958		9,353
Total accrued expenses	$	57,625	$	64,002

Corporate Investments and Funds Held For Clients (Tables)

9 Months Ended

Mar. 31, 2020

Corporate Investments and Funds Held for Clients

Schedule of corporate investments and funds held for clients


	June 30, 2019
			Gross		Gross
	Amortized		unrealized		unrealized
Type of Issue	cost		gains		losses		Fair value
Cash and cash equivalents	$	132,478	$	—	$	(2)	$	132,476
Funds held for clients' cash and cash equivalents		1,293,673		—		(6)		1,293,667
Available-for-sale securities:
Commercial paper		63,397		33		(2)		63,428
Corporate bonds		27,044		59		(4)		27,099
Asset-backed securities		26,488		55		(3)		26,540
U.S. treasury securities		13,736		21		—		13,757
Total available-for-sale securities (1)		130,665		168		(9)		130,824
Total investments	$	1,556,816	$	168	$	(17)	$	1,556,967

(1)

Included within the fair value of total available-for-sale securities above is $30,022 of corporate investments and $100,802 of funds held for clients.


	March 31, 2020
			Gross		Gross
	Amortized		unrealized		unrealized
Type of Issue	cost		gains		losses		Fair value
Cash and cash equivalents	$	114,323	$	3	$	(1)	$	114,325
Funds held for clients' cash and cash equivalents		1,520,105		23		(1)		1,520,127
Available-for-sale securities:
Commercial paper		150,388		50		(1)		150,437
Corporate bonds		52,587		18		(357)		52,248
Asset-backed securities		57,612		64		(90)		57,586
U.S. treasury securities		21,302		155		—		21,457
Total available-for-sale securities (2)		281,889		287		(448)		281,728
Total investments	$	1,916,317	$	313	$	(450)	$	1,916,180

(2)

Included within the fair value of total available-for-sale securities above is $72,679 of corporate investments and $209,049 of funds held for clients.

Schedule of the classification of investments


	June 30,		March 31,
	2019		2020
Cash and cash equivalents	$	132,476	$	114,325
Corporate investments		29,314		66,308
Funds held for clients		1,394,469		1,729,176
Long-term prepaid expenses and other		708		6,371
Total investments	$	1,556,967	$	1,916,180

Schedule of available-for-sale securities that have been in an unrealized loss position for less than and greater than 12 months


	June 30, 2019
	Securities in an				Securities in an
	unrealized loss				unrealized loss
	position for less				position for greater
	than 12 months				than 12 months				Total
	Gross				Gross				Gross
	unrealized				unrealized				unrealized
	losses		Fair value		losses		Fair value		losses		Fair value
Commercial paper	$	(2)	$	19,055	$	—	$	—	$	(2)	$	19,055
Corporate bonds		(1)		1,500		(3)		3,701		(4)		5,201
Asset-backed securities		(1)		386		(2)		2,958		(3)		3,344
Total available-for-sale securities	$	(4)	$	20,941	$	(5)	$	6,659	$	(9)	$	27,600


	March 31, 2020
	Securities in an				Securities in an
	unrealized loss				unrealized loss
	position for less				position for greater
	than 12 months				than 12 months				Total
	Gross				Gross				Gross
	unrealized				unrealized				unrealized
	losses		Fair value		losses		Fair value		losses		Fair value
Commercial paper	$	(1)	$	498	$	—	$	—	$	(1)	$	498
Corporate bonds		(357)		42,474		—		—		(357)		42,474
Asset-backed securities		(90)		29,900		—		—		(90)		29,900
Total available-for-sale securities	$	(448)	$	72,872	$	—	$	—	$	(448)	$	72,872

Schedule of expected maturities of available-for-sale securities

Expected maturities of available-for-sale securities at March 31, 2020 are as follows:


	Amortized
	cost		Fair value
One year or less	$	244,939	$	245,004
One year to two years		36,950		36,724
Total available-for-sale securities	$	281,889	$	281,728

Fair Value Measurement (Tables)

9 Months Ended

Mar. 31, 2020

Fair Value Measurement

Schedule of fair value level for cash and cash equivalents and available-for-sale securities measured on a recurring basis


	June 30, 2019
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	132,476	$	116,387	$	16,089	$	—
Funds held for clients' cash and cash equivalents		1,293,667		1,244,856		48,811		—
Available-for-sale securities:
Commercial paper		63,428		—		63,428		—
Corporate bonds		27,099		—		27,099		—
Asset-backed securities		26,540		—		26,540		—
U.S. treasury securities		13,757		—		13,757		—
Total available-for-sale securities		130,824		—		130,824		—
Total investments	$	1,556,967	$	1,361,243	$	195,724	$	—


	March 31, 2020
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	114,325	$	90,791	$	23,534	$	—
Funds held for clients' cash and cash equivalents		1,520,127		1,439,324		80,803		—
Available-for-sale securities:
Commercial paper		150,437		—		150,437		—
Corporate bonds		52,248		—		52,248		—
Asset-backed securities		57,586		—		57,586		—
U.S. treasury securities		21,457		—		21,457		—
Total available-for-sale securities		281,728		—		281,728		—
Total investments	$	1,916,180	$	1,530,115	$	386,065	$	—

Leases (Tables)

9 Months Ended

Mar. 31, 2020

Leases

Schedule of components of operating lease expense


	Three Months Ended		Nine Months Ended
	March 31, 2020		March 31, 2020
Operating lease cost	$	2,358	$	6,995
Short-term lease cost		1		15
Variable lease cost		848		2,308
Total lease costs	$	3,207	$	9,318

Schedule of the classification of operating lease right-of-use assets and operating lease liabilities and other supplemental information related to operating leases


	March 31, 2020
Operating lease right-of-use assets	$	50,180
Accrued expenses	$	7,955
Long-term operating lease liabilities	$	74,912
Weighted-average remaining lease term (years)		10.44
Weighted-average discount rate		3.83	%

Schedule of supplemental cash flow information related to operating leases


	Nine Months Ended
	March 31, 2020
Cash paid for amounts included in the measurement of operating lease liabilities	$	7,716
Operating lease assets obtained in exchange for new liabilities	$	2,723

Schedule of future maturities of operating lease liabilities and the reconciliation to the balance of operating lease liabilities


Remainder of fiscal 2020	$	2,755
Fiscal 2021		10,890
Fiscal 2022		9,609
Fiscal 2023		9,229
Fiscal 2024		9,210
Thereafter		60,026
Total undiscounted cash flows		101,719
Less: Present value discount		(18,852)
Total operating lease liabilities	$	82,867

Schedule of future minimum lease payments under non-cancellable operating leases under Topic 840


Fiscal 2020	$	10,449
Fiscal 2021		11,150
Fiscal 2022		9,500
Fiscal 2023		8,840
Fiscal 2024		8,838
Thereafter		59,401
Total minimum lease payments	$	108,178

Benefit Plans (Tables)

9 Months Ended

Mar. 31, 2020

Benefit Plans

Schedule of changes in the number of shares available for grant under equity incentive plans


		Number of Shares
Available for grant at July 1, 2019		9,759
RSUs granted		(642)
Shares withheld in settlement of taxes and/or exercise price		321
Forfeitures		93
Shares removed		(39)
Available for grant at March 31, 2020		9,492

Schedule of stock-based compensation expense related to stock options, restricted stock units and the Employee Stock Purchase Plan


	Three Months Ended March 31,				Nine Months Ended March 31,
	2019		2020		2019		2020
Cost of revenues	$	1,192	$	1,362	$	3,734	$	4,057
Sales and marketing		1,799		3,466		5,496		10,813
Research and development		1,287		1,899		4,025		4,945
General and administrative		5,035		2,789		15,582		14,533
Total stock-based compensation expense	$	9,313	$	9,516	$	28,837	$	34,348

Schedule of stock option activity


	Outstanding Options
				Weighted
		Weighted		average
		average		remaining	Aggregate
	Number of	exercise		contractual	intrinsic
	shares	price		term (years)	value
Balance at July 1, 2019	1,525	$	12.24	3.95	$	124,373
Options exercised	(153)	$	11.15
Balance at March 31, 2020	1,372	$	12.37	3.20	$	104,172
Options vested and exercisable at March 31, 2020	1,372	$	12.37	3.20	$	104,172

Schedule of restricted stock unit activity


	Units	Weighted average grant date fair value
RSU balance at July 1, 2019	1,813	$	53.78
RSUs granted	642	$	99.72
RSUs vested	(708)	$	49.75
RSUs forfeited	(93)	$	59.72
RSU balance at March 31, 2020	1,654	$	73.57
RSUs expected to vest at March 31, 2020	1,442	$	71.83

Schedule of weighted average assumptions used for estimating grant date fair value of the ESPP


	Nine Months Ended
	March 31,
	2019		2020
Valuation assumptions:
Expected dividend yield	0	%	0	%
Expected volatility	33.5 - 38.3	%	38.6 - 43.3	%
Expected term (years)	0.5		0.5
Risk‑free interest rate	2.10 - 2.48	%	1.58 - 2.44	%

Net Income Per Share (Tables)

9 Months Ended

Mar. 31, 2020

Net Income Per Share

Schedule of calculation of basic and diluted net income per share


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2019		2020		2019		2020
Numerator:
Net income	$	28,026	$	40,132	$	43,582	$	59,505

Denominator:
Weighted-average shares used in computing net income per share:
Basic		52,934		53,629		52,880		53,486
Weighted-average effect of potentially dilutive shares:
Employee stock options, restricted stock units and employee stock purchase plan shares		2,531		2,324		2,400		2,274
Diluted		55,465		55,953		55,280		55,760

Net income per share:
Basic	$	0.53	$	0.75	$	0.82	$	1.11
Diluted	$	0.51	$	0.72	$	0.79	$	1.07

Balance Sheet Information - Allowance for Doubtful Accounts, Capitalized Internal-Use Software and Property, Plant and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Jun. 30, 2019
Activity in the allowance for doubtful accounts
Balance at beginning of period			$ 473
Charged to expense			232	$ 220
Write-offs			(116)
Balance at end of period	$ 589		589
Capitalized internal-use software and accumulated amortization
Capitalized internal-use software	111,556		111,556		$ 90,991
Accumulated amortization	(77,489)		(77,489)		(63,505)
Capitalized internal-use software, net	34,067		34,067		27,486
Property and equipment, net
Property and equipment, gross	116,609		116,609		108,422
Accumulated depreciation	(47,911)		(47,911)		(38,366)
Property and equipment, net	68,698		68,698		70,056
Depreciation expense	4,082	$ 3,626	12,071	10,671
Cost of revenues
Capitalized internal-use software and accumulated amortization
Amortization of capitalized internal-use software	4,926	$ 4,224	14,073	$ 12,854
Office equipment
Property and equipment, net
Property and equipment, gross	4,491		4,491		4,406
Computer equipment
Property and equipment, net
Property and equipment, gross	42,478		42,478		36,798
Furniture and fixtures
Property and equipment, net
Property and equipment, gross	12,764		12,764		11,857
Software
Property and equipment, net
Property and equipment, gross	6,603		6,603		6,332
Leasehold improvements
Property and equipment, net
Property and equipment, gross	45,366		45,366		44,350
Time clocks rented by clients
Property and equipment, net
Property and equipment, gross	$ 4,907		$ 4,907		$ 4,679

Balance Sheet Information - Intangible Assets And Accrued Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Jun. 30, 2019
Amortizable intangible assets
Intangible assets, gross	$ 18,730		$ 18,730		$ 18,730
Accumulated amortization	(9,667)		(9,667)		(7,979)
Intangible assets, net	9,063		9,063		10,751
Amortization expense for acquired intangible assets	563	$ 562	1,688	$ 1,688
Future amortization expense for acquired intangible assets
Remainder of fiscal 2020	563		563
Fiscal 2021	2,251		2,251
Fiscal 2022	2,232		2,232
Fiscal 2023	2,118		2,118
Fiscal 2024	1,356		1,356
Thereafter	543		543
Intangible assets, net	9,063		9,063		10,751
Components of accrued expenses
Accrued payroll and personnel costs	38,386		38,386		39,095
Operating lease liabilities	7,955		7,955
Deferred revenue	8,308		8,308		5,572
Other	9,353		9,353		12,958
Total accrued expenses	64,002		64,002		57,625
Client relationships
Amortizable intangible assets
Intangible assets, gross	18,130		$ 18,130		18,130
Client relationships \| Minimum
Amortizable intangible assets
Useful life			7 years
Client relationships \| Maximum
Amortizable intangible assets
Useful life			9 years
Non-solicitation agreements
Amortizable intangible assets
Intangible assets, gross	$ 600		$ 600		$ 600
Non-solicitation agreements \| Minimum
Amortizable intangible assets
Useful life			2 years
Non-solicitation agreements \| Maximum
Amortizable intangible assets
Useful life			4 years

Corporate Investments and Funds Held For Clients - Reconciliation (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019
Corporate Investments and Funds Held for Clients
Amortized cost of cash and cash equivalents	$ 114,323	$ 132,478
Cash and cash equivalents, gross unrealized gains	3
Cash and cash equivalents, gross unrealized losses	(1)	(2)
Fair value of cash and cash equivalents	114,325	132,476	$ 90,856
Amortized cost of funds held for clients' cash and cash equivalents	1,520,105	1,293,673
Funds held for clients' cash and cash equivalents, gross unrealized gains	23
Funds held for clients' cash and cash equivalents, gross unrealized losses	(1)	(6)
Fair value of funds held for clients' cash and cash equivalents	1,520,127	1,293,667	$ 1,596,719
Available-for-sale securities
Amortized cost	281,889	130,665
Gross unrealized gains	287	168
Gross unrealized losses	(448)	(9)
Fair value	281,728	130,824
Total investments at amortized cost	1,916,317	1,556,816
Total investments gross unrealized gain	313	168
Total investments gross unrealized loss	(450)	(17)
Total investments at fair value	1,916,180	1,556,967
Commercial paper
Available-for-sale securities
Amortized cost	150,388	63,397
Gross unrealized gains	50	33
Gross unrealized losses	(1)	(2)
Fair value	150,437	63,428
Corporate bonds
Available-for-sale securities
Amortized cost	52,587	27,044
Gross unrealized gains	18	59
Gross unrealized losses	(357)	(4)
Fair value	52,248	27,099
Asset-backed securities
Available-for-sale securities
Amortized cost	57,612	26,488
Gross unrealized gains	64	55
Gross unrealized losses	(90)	(3)
Fair value	57,586	26,540
U.S. treasury securities
Available-for-sale securities
Amortized cost	21,302	13,736
Gross unrealized gains	155	21
Fair value	21,457	13,757
Corporate investments
Available-for-sale securities
Fair value	72,679	30,022
Funds held for clients
Available-for-sale securities
Fair value	$ 209,049	$ 100,802

Corporate Investments and Funds Held For Clients - Classification (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Jun. 30, 2019
Corporate Investments and Funds Held for Clients
Cash and cash equivalents	$ 114,325	$ 90,856	$ 114,325	$ 90,856	$ 132,476
Corporate investments	66,308		66,308		29,314
Funds held for clients	1,729,176		1,729,176		1,394,469
Long-term prepaid expenses and other	6,371		6,371		708
Total investments at fair value	1,916,180		1,916,180		1,556,967
Available-for-sale securities
Unrealized loss on available-for-sale securities in a loss position for less than 12 months	(448)		(448)		(4)
Fair market value of available-for-sale securities in an unrealized loss position less than 12 months	72,872		72,872		20,941
Unrealized loss on available-for-sale securities in a loss position for greater than 12 months					(5)
Fair market value of available-for-sale securities in an unrealized loss position greater than 12 months					6,659
Total gross unrealized losses	(448)		(448)		(9)
Total fair value	72,872		72,872		27,600
Gross realized gains and losses on the sale of available-for-sale securities	0	0	0	0
OTTI in accumulated other comprehensive income	0	0	0	0
Reclassification out of Accumulated Other Comprehensive Income (Loss)
Available-for-sale securities
Gross realized gains and losses on the sale of available-for-sale securities	0	$ 0	0	$ 0
Commercial paper
Available-for-sale securities
Unrealized loss on available-for-sale securities in a loss position for less than 12 months	(1)		(1)		(2)
Fair market value of available-for-sale securities in an unrealized loss position less than 12 months	498		498		19,055
Total gross unrealized losses	(1)		(1)		(2)
Total fair value	498		498		19,055
Corporate bonds
Available-for-sale securities
Unrealized loss on available-for-sale securities in a loss position for less than 12 months	(357)		(357)		(1)
Fair market value of available-for-sale securities in an unrealized loss position less than 12 months	42,474		42,474		1,500
Unrealized loss on available-for-sale securities in a loss position for greater than 12 months					(3)
Fair market value of available-for-sale securities in an unrealized loss position greater than 12 months					3,701
Total gross unrealized losses	(357)		(357)		(4)
Total fair value	42,474		42,474		5,201
Asset-backed securities
Available-for-sale securities
Unrealized loss on available-for-sale securities in a loss position for less than 12 months	(90)		(90)		(1)
Fair market value of available-for-sale securities in an unrealized loss position less than 12 months	29,900		29,900		386
Unrealized loss on available-for-sale securities in a loss position for greater than 12 months					(2)
Fair market value of available-for-sale securities in an unrealized loss position greater than 12 months					2,958
Total gross unrealized losses	(90)		(90)		(3)
Total fair value	$ 29,900		$ 29,900		$ 3,344

Fair Value Measurement (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019
Fair value measurement
Cash and cash equivalents	$ 114,325	$ 132,476	$ 90,856
Funds held for clients' cash and cash equivalents	1,520,127	1,293,667	1,596,719
Total investments at fair value	1,916,180	1,556,967
Available-for-sale securities:
Total available-for-sale securities	281,728	130,824
Fair value asset transfers
Transfers from level 1 to level 2	0		0
Transfers from level 2 to level 1	0		$ 0
Level 1
Fair value measurement
Cash and cash equivalents	90,791	116,387
Funds held for clients' cash and cash equivalents	1,439,324	1,244,856
Total investments at fair value	1,530,115	1,361,243
Level 2
Fair value measurement
Cash and cash equivalents	23,534	16,089
Funds held for clients' cash and cash equivalents	80,803	48,811
Total investments at fair value	386,065	195,724
Available-for-sale securities:
Total available-for-sale securities	281,728	130,824
Level 3
Available-for-sale securities:
Total available-for-sale securities	0	0
Commercial paper
Available-for-sale securities:
Total available-for-sale securities	150,437	63,428
Commercial paper \| Level 2
Available-for-sale securities:
Total available-for-sale securities	150,437	63,428
Corporate bonds
Available-for-sale securities:
Total available-for-sale securities	52,248	27,099
Corporate bonds \| Level 2
Available-for-sale securities:
Total available-for-sale securities	52,248	27,099
Asset-backed securities
Available-for-sale securities:
Total available-for-sale securities	57,586	26,540
Asset-backed securities \| Level 2
Available-for-sale securities:
Total available-for-sale securities	57,586	26,540
U.S. treasury securities
Available-for-sale securities:
Total available-for-sale securities	21,457	13,757
U.S. treasury securities \| Level 2
Available-for-sale securities:
Total available-for-sale securities	$ 21,457	$ 13,757

Leases - Future minimum lease payments and rent expense under Topic 840 (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 31, 2019	Mar. 31, 2019	Jun. 30, 2019
Leases
Rental expense for operating leases including amortization of leasehold improvements under Topic 840	$ 2,596	$ 7,059
Future minimum lease payments under Topic 840
Fiscal 2020			$ 10,449
Fiscal 2021			11,150
Fiscal 2022			9,500
Fiscal 2023			8,840
Fiscal 2024			8,838
Thereafter			59,401
Total minimum lease payments			$ 108,178

Benefit Plans - Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Jun. 30, 2019
Vesting period
Expiration period			10 years
Options Outstanding, Number of Shares
Balance at the beginning of the period			1,525
Options granted			0	0
Options exercised			(153)
Balance at the end of the period	1,372		1,372		1,525
Options Outstanding, Weighted average exercise price
Balance at the beginning of the period (in dollars per share)			$ 12.24
Options exercised (in dollars per share)			11.15
Balance at the end of the period (in dollars per share)	$ 12.37		$ 12.37		$ 12.24
Options Additional Disclosures
Weighted average remaining contractual term			3 years 2 months 12 days		3 years 11 months 12 days
Aggregate intrinsic value, at the beginning of the period			$ 124,373
Weighted average remaining contractual term of options vested and exercisable at the end of the period (years)			3 years 2 months 12 days
Aggregate intrinsic value, at the end of the period	$ 104,172		$ 104,172		$ 124,373
Options vested and exercisable at the end of the period (in shares)	1,372		1,372
Options vested and exercisable at the end of the period, weighted average exercise price (in dollars per share)	$ 12.37		$ 12.37
Options vested and exercisable intrinsic value	$ 104,172		$ 104,172
Total intrinsic value of options exercised	$ 16,164	$ 7,197	$ 18,244	$ 20,901
Minimum
Vesting period
Vesting period			3 years
Maximum
Vesting period
Vesting period			4 years

Benefit Plans - RSU activity (Details) - Restricted stock units $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 31, 2020 USD ($) $ / shares shares	Mar. 31, 2020 USD ($) $ / shares shares
Unrecognized Compensation Costs Not yet Recognized, Net of Estimated Forfeitures
Total unrecognized compensation cost, net of estimated forfeitures related to unvested RSUs \| $	$ 50,414	$ 50,414
Weighted average period to recognize unrecognized compensation cost		1 year 10 months 28 days
Amount of stock-based compensation expense reversed during period \| $	$ 2,053
RSUs Outstanding Rollforward, Units
RSU Balance at the beginning of the period \| shares		1,813
RSUs granted \| shares		642
RSUs vested \| shares		(708)
RSUs forfeited \| shares		(93)
RSU Balance at the end of the period \| shares	1,654	1,654
RSUs expected to vest at the end of the period \| shares	1,442	1,442
RSUs Outstanding, Weighted average grant date fair value
RSU Balance at the beginning of the period \| $ / shares		$ 53.78
RSUs granted \| $ / shares		99.72
RSUs vested \| $ / shares		49.75
RSUs forfeited \| $ / shares		59.72
RSU Balance at the end of the period \| $ / shares	$ 73.57	73.57
RSUs expected to vest at the end of the period \| $ / shares	$ 71.83	$ 71.83
Maximum
Equity Incentive Plans
Vesting period		4 years

Benefit Plans - ESPP Information (Details) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
	Jan. 01, 2020	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Equity Incentive Plans
Stock-based compensation expense		$ 9,516	$ 9,313	$ 34,348	$ 28,837
Employee stock purchase plan shares
Equity Incentive Plans
Percentage of employee compensation, maximum		10.00%		10.00%
Percentage of fair market value as a purchase price				85.00%
Maximum value of purchase per employee				$ 25
Number of shares per employee, maximum				2
Period during which shares can be purchased				1 year
Number of shares of common stock reserved for issuance		950		950
Actual increase in number of shares reserved for issuance	0
Potential number of additional shares reserved for issuance each year				400
Potential number of additional shares reserved for issuance each year (as percent)				0.75%
Number of shares issued				45
Stock-based compensation expense		$ 831	$ 516	$ 2,208	$ 1,401
Valuation assumptions:
Expected dividend yield				0.00%	0.00%
Expected term (years)				6 months	6 months
Employee stock purchase plan shares \| Minimum
Valuation assumptions:
Expected volatility				38.60%	33.50%
Risk-free interest rate				1.58%	2.10%
Employee stock purchase plan shares \| Maximum
Equity Incentive Plans
Offering period				27 months
Valuation assumptions:
Expected volatility				43.30%	38.30%
Risk-free interest rate				2.44%	2.48%

Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended			9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Sep. 30, 2018	Mar. 31, 2020	Mar. 31, 2019	Aug. 31, 2018
Numerator:
Net income	$ 40,132	$ 28,026		$ 59,505	$ 43,582
Weighted-average shares used in computing net income per share:
Basic (in shares)	53,629	52,934		53,486	52,880
Weighted-average effect of potentially dilutive shares:
Employee stock options, restricted stock units and employee stock purchase plan shares	2,324	2,531		2,274	2,400
Diluted (in shares)	55,953	55,465		55,760	55,280
Net income per share:
Basic (in dollars per share)	$ 0.75	$ 0.53		$ 1.11	$ 0.82
Diluted (in dollars per share)	$ 0.72	$ 0.51		$ 1.07	$ 0.79
Stock Repurchase Program
Repurchases of common shares			$ 34,991		$ 34,991
Maximum
Stock Repurchase Program
Maximum value of issued and outstanding common stock eligible for repurchase under the stock repurchase program						$ 35,000
Restricted stock units
Anti-dilutive securities excluded from diluted per share calculation
Anti-dilutive securities excluded	6	18		17	49
Common Stock
Stock Repurchase Program
Repurchases of common shares (in shares)			442		442

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Mar. 31, 2020	Jun. 30, 2019
Consolidated Balance Sheets
Preferred Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred Stock, shares authorized	5,000	5,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Common Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common Stock, shares authorized	155,000	155,000
Common Stock, shares issued	53,660	53,075
Common Stock, shares outstanding	53,660	53,075

Revenue - Performance Obligations (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Remaining Performance Obligations
Minimum value of unsatisfied performance obligations on term-based contracts	$ 47,673
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01
Remaining Performance Obligations
Remaining performance obligation period	24 months

Debt (Details) - Five-year revolving credit agreement - Senior secured debt - USD ($) $ in Thousands	1 Months Ended		9 Months Ended
	Apr. 30, 2020	Jul. 31, 2019	Mar. 31, 2020
Debt
Term of credit agreement		5 years
Maximum borrowing capacity		$ 250,000
Maximum borrowing capacity, subject to additional lender commitments and satisfaction of other requirements		$ 375,000
Amount drawn on revolving line of credit			$ 0
Minimum
Debt
Interest coverage ratio		3.00
Maximum
Debt
Net total leverage ratio		4.00
Senior secured leverage ratio		3.50
Subsequent event
Debt
Amount drawn on revolving line of credit	$ 100,000
LIBOR \| Minimum
Debt
Margin on base rate		0.875%
LIBOR \| Maximum
Debt
Margin on base rate		1.375%
Adjusted base rate \| Minimum
Debt
Margin on base rate		0.00%
Adjusted base rate \| Maximum
Debt
Margin on base rate		0.375%

Benefit Plans - 401(k) Plan (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Benefit Plans
401(k) Plan Matching contributions by the Company as percentage of employees' contributions			50.00%
401(k) Plan Maximum contributions by the Company as percentage of employees' gross pay			8.00%
401(k) Plan contributions	$ 2,176	$ 1,604	$ 5,947	$ 4,138

Income Taxes (Details)	3 Months Ended		9 Months Ended
Income Taxes (Details)	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Income Taxes
Effective tax rate for the period (as a percent)	16.70%	23.70%	2.50%	9.50%
U.S. federal income tax rate (as a percent)	21.00%	21.00%	21.00%	21.00%

Summary of Significant Accounting Policies - Adjustments for Adoption (Details) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
	Jul. 01, 2019	Mar. 31, 2019	Mar. 31, 2019	Mar. 31, 2020
Recently adopted accounting standards
Operating lease right-of-use assets				$ 50,180
Operating lease liabilities				$ 82,867
Topic 842
Recently adopted accounting standards
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	true
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected [Fixed List]	Modified Retrospective
Practical expedients package adopted	true
Practical expedient single lease component adopted	true
Operating lease right-of-use assets	$ 52,083
Operating lease liabilities	83,852
Deferred rent adjustments included in net ROU assets	$ 31,769
Impact of adoption on unaudited consolidated statements of operations and comprehensive income or the unaudited statement of cash flows		$ 0	$ 0

Revenue - Disaggregation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Revenue - Disaggregation (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Revenue
Period of term arrangements not cancellable by client			2 years
Disaggregation of revenue
Recurring and other revenue	$ 167,095	$ 133,355	$ 416,948	$ 333,096
Maximum
Revenue
Period of notice to cancel by client			60 days
Recognition period of nonrefundable upfront implementation fees			24 months
Recurring fees
Disaggregation of revenue
Recurring and other revenue	161,266	129,976	$ 402,605	326,012
Implementation services and other
Disaggregation of revenue
Recurring and other revenue	$ 5,829	$ 3,379	$ 14,343	$ 7,084

Corporate Investments and Funds Held For Clients - Maturities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Jun. 30, 2019
Expected maturities of available-for-sale securities, amortized cost
One year or less	$ 244,939
One year to two years	36,950
Total available-for-sale securities	281,889	$ 130,665
Expected maturities of available-for-sale securities, fair value
One year or less	245,004
One year to two years	36,724
Total available-for-sale securities	$ 281,728	$ 130,824

Leases - Operating lease components (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 31, 2020	Mar. 31, 2020
Components of operating lease expense:
Operating lease cost	$ 2,358	$ 6,995
Short-term lease cost	1	15
Variable lease cost	848	2,308
Total lease costs	$ 3,207	$ 9,318

Leases - Operating lease ROU assets, operating lease liabilities and other supplemental information (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Operating leases:
Operating lease right-of-use assets	$ 50,180
Accrued expenses	7,955
Long-term operating lease liabilities	$ 74,912
Weighted-average remaining lease term (years)	10 years 5 months 8 days
Weighted-average discount rate	3.83%

Leases - Leases - Future maturities and leases that had not yet commenced (Details) $ in Thousands	9 Months Ended
	Mar. 31, 2020 USD ($)
Undiscounted cash flows for future maturities of operating lease liabilities and the reconciliation to the balance of operating lease liabilities
Remainder of fiscal 2020	$ 2,755
Fiscal 2021	10,890
Fiscal 2022	9,609
Fiscal 2023	9,229
Fiscal 2024	9,210
Thereafter	60,026
Total undiscounted cash flows	101,719
Less: Present value discount	(18,852)
Total operating lease liabilities	82,867
Amount of undiscounted future minimum lease payments excluded from total for operating lease liabilities that had not yet commenced	$ 546
Maximum
Undiscounted cash flows for future maturities of operating lease liabilities and the reconciliation to the balance of operating lease liabilities
Operating lease term for leases not yet commenced	5 years 8 months 1 day

Benefit Plans - General Information (Details) - shares shares in Thousands		9 Months Ended
	Jan. 01, 2020	Mar. 31, 2020
Equity Incentive Plans
Equity Incentive Plans
Number of shares of common stock reserved for issuance		12,518
Number of shares allocated but not yet issued that are subject to outstanding options or awards		3,026
2008 Plan
Equity Incentive Plans
Awards issued (in shares)		0
Awards issuable (in shares)		0
2014 Plan
Equity Incentive Plans
Potential number of additional shares available for grant each year (as a percent)		4.50%
Actual increase in number of common shares available for grant	0

Benefit Plans - Incentive Plans Activity (Details) - Equity Incentive Plans shares in Thousands	9 Months Ended
	Mar. 31, 2020 shares
Shares Available for Grant
Balance at the beginning of the period	9,759
RSUs granted	(642)
Shares withheld in settlement of taxes and/or exercise price	321
Forfeitures	93
Shares removed	(39)
Balance at the end of the period	9,492

Subsequent Events (Details) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
Subsequent Events (Details) - USD ($) $ in Thousands	Apr. 30, 2020	Mar. 31, 2020	Jul. 31, 2019	Jun. 30, 2019	Mar. 31, 2019
Subsequent events
Cash and cash equivalents		$ 114,325		$ 132,476	$ 90,856
Total available-for-sale securities		281,728		130,824
Corporate investments
Subsequent events
Total available-for-sale securities		72,679		$ 30,022
Five-year revolving credit agreement \| Senior secured debt
Subsequent events
Term of credit agreement			5 years
Maximum borrowing capacity			$ 250,000
Amount borrowed		$ 0
Subsequent event \| VidGrid, Inc.
Subsequent events
Purchase price consideration	$ 17,500
Subsequent event \| Five-year revolving credit agreement \| Senior secured debt
Subsequent events
Amount borrowed	$ 100,000