0001558370-21-014749 | 10-Q | XBRL Viewer

Print Document View Excel Document

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Sep. 30, 2021	Oct. 29, 2021
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
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		55,026,308
Entity Central Index Key	0001591698
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false

Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021
Current assets:
Cash and cash equivalents	$ 66,431	$ 202,287
Corporate investments	3,151	4,456
Accounts receivable, net	8,094	6,267
Deferred contract costs	46,928	44,230
Prepaid expenses and other	21,903	15,966
Total current assets before funds held for clients	146,507	273,206
Funds held for clients	3,185,520	1,759,677
Total current assets	3,332,027	2,032,883
Capitalized internal-use software, net	48,719	45,018
Property and equipment, net	62,265	59,835
Operating lease right-of-use assets	44,249	43,984
Intangible assets, net	37,175	13,027
Goodwill	68,022	33,650
Long-term deferred contract costs	179,079	170,663
Long-term prepaid expenses and other	7,399	4,223
Deferred income tax assets	32,602	11,602
Total assets	3,811,537	2,414,885
Current liabilities:
Accounts payable	6,910	4,230
Accrued expenses	81,017	103,109
Total current liabilities before client fund obligations	87,927	107,339
Client fund obligations	3,185,520	1,759,677
Total current liabilities	3,273,447	1,867,016
Long-term operating lease liabilities	66,684	67,201
Other long-term liabilities	1,905	1,958
Deferred income tax liabilities	1,928	1,780
Total liabilities	3,343,964	1,937,955
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000 authorized, no shares issued and outstanding at June 30, 2021 and September 30, 2021
Common stock, $0.001 par value, 155,000 shares authorized at June 30, 2021 and September 30, 2021; 54,594 shares issued and outstanding at June 30, 2021 and 55,019 shares issued and outstanding at September 30, 2021	55	55
Additional paid-in capital	201,504	241,718
Retained earnings	266,023	235,091
Accumulated other comprehensive income (loss)	(9)	66
Total stockholders' equity	467,573	476,930
Total liabilities and stockholders' equity	$ 3,811,537	$ 2,414,885

Unaudited Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2021	Jun. 30, 2021
Unaudited 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	55,019	54,594
Common Stock, shares outstanding	55,019	54,594

Unaudited Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Revenues:
Recurring and other revenue	$ 180,824	$ 134,875
Interest income on funds held for clients	873	919
Total revenues	181,697	135,794
Cost of revenues	63,249	49,380
Gross profit	118,448	86,414
Operating expenses:
Sales and marketing	49,885	37,674
Research and development	23,076	18,647
General and administrative	35,235	26,644
Total operating expenses	108,196	82,965
Operating income	10,252	3,449
Other expense	(117)	(257)
Income before income taxes	10,135	3,192
Income tax benefit	(20,797)	(9,268)
Net income	30,932	12,460
Other comprehensive loss, net of tax	(75)	(223)
Comprehensive income	$ 30,857	$ 12,237
Net income per share:
Basic (in dollars per share)	$ 0.56	$ 0.23
Diluted (in dollars per share)	$ 0.55	$ 0.22
Weighted-average shares used in computing net income per share:
Basic (in shares)	54,810	54,015
Diluted (in shares)	56,506	56,050

Unaudited Consolidated Statement of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Total
Balance at Jun. 30, 2020	$ 54	$ 227,907	$ 164,272	$ 675	$ 392,908
Balance (in shares) at Jun. 30, 2020	53,792
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		15,046			15,046
Stock options exercised		529			529
Stock options exercised (in shares)	88
Issuance of common stock upon vesting of restricted stock units (in shares)	599
Net settlement for taxes and/or exercise price related to equity awards		(33,900)			(33,900)
Net settlement for taxes and/or exercise price related to equity awards (in shares)	(256)
Unrealized losses on securities, net of tax				(223)	(223)
Net income			12,460		12,460
Balance at Sep. 30, 2020	$ 54	209,582	176,732	452	386,820
Balance (in shares) at Sep. 30, 2020	54,223
Balance at Jun. 30, 2021	$ 55	241,718	235,091	66	$ 476,930
Balance (in shares) at Jun. 30, 2021	54,594				54,594
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		21,106			$ 21,106
Stock options exercised		1,429			1,429
Stock options exercised (in shares)	151
Issuance of common stock upon vesting of restricted stock units (in shares)	524
Net settlement for taxes and/or exercise price related to equity awards		(62,749)			(62,749)
Net settlement for taxes and/or exercise price related to equity awards (in shares)	(250)
Unrealized losses on securities, net of tax				(75)	(75)
Net income			30,932		30,932
Balance at Sep. 30, 2021	$ 55	$ 201,504	$ 266,023	$ (9)	$ 467,573
Balance (in shares) at Sep. 30, 2021	55,019				55,019

Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities:
Net income	$ 30,932	$ 12,460
Adjustments to reconcile net income to net cash used in operating activities:
Stock-based compensation expense	19,559	14,277
Depreciation and amortization expense	11,322	10,235
Deferred income tax benefit	(20,827)	(9,268)
Provision for credit losses	38	56
Net accretion of discounts and amortization of premiums on available-for-sale securities	90	133
Amortization of debt issuance costs	44	37
Other	27	31
Changes in operating assets and liabilities:
Accounts receivable	(173)	195
Deferred contract costs	(11,114)	(10,409)
Prepaid expenses and other	(9,807)	(2,144)
Accounts payable	1,567	1,611
Accrued expenses and other	(25,790)	(18,781)
Net cash used in operating activities	(4,132)	(1,567)
Cash flows from investing activities:
Purchases of available-for-sale securities	(135,849)
Proceeds from sales and maturities of available-for-sale securities	9,648	37,493
Capitalized internal-use software costs	(9,159)	(7,884)
Purchases of property and equipment	(3,220)	(2,045)
Acquisition of business, net of cash acquired	(59,581)
Net cash provided by (used in) investing activities	(198,161)	27,564
Cash flows from financing activities:
Net change in client fund obligations	1,425,782	51,671
Taxes paid related to net share settlement of equity awards	(60,809)	(33,402)
Payment of debt issuance costs	(9)	(9)
Net cash provided by financing activities	1,364,964	18,260
Net change in cash, cash equivalents and funds held for clients' cash and cash equivalents	1,162,671	44,257
Cash, cash equivalents and funds held for clients' cash and cash equivalents-beginning of period	1,945,881	1,492,133
Cash, cash equivalents and funds held for clients' cash and cash equivalents-end of period	3,108,552	1,536,390
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Purchases of property and equipment and internal-use software, accrued but not paid	3,079	1,479
Liabilities assumed for acquisition	2,165
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	63	311
Cash paid (refunds received) for income taxes	13	(119)
Reconciliation of cash, cash equivalents and funds held for clients' cash and cash equivalents to the Consolidated Balance Sheets
Cash and cash equivalents	66,431	221,514
Funds held for clients' cash and cash equivalents	3,042,121	1,314,876
Total cash, cash equivalents and funds held for clients' cash and cash equivalents	$ 3,108,552	$ 1,536,390

Organization and Description of Business

3 Months Ended

Sep. 30, 2021

Organization and Description of Business

Organization and Description of Business

(1) Organization and Description of Business

Paylocity Holding Corporation (the “Company”) is a cloud-based provider of payroll and human capital management software solutions. Services are provided in a Software-as-a-Service (“SaaS”) delivery model utilizing the Company’s cloud-based platform. The Company’s comprehensive product suite, comprised of payroll, human capital management, workforce management, talent management, benefits, modern workforce solutions and analytics & insights, delivers a unified platform that allows clients to make strategic decisions while promoting a modern workplace and improving employee engagement.

Summary of Significant Accounting Policies

3 Months Ended

Sep. 30, 2021

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. Accounting estimates used in the preparation of these consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes.

(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 three months ended September 30, 2021 are not necessarily indicative of the results for the full year or the results for any future periods. 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, 2021 included in the Company’s Annual Report on Form 10-K.

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 Issued Accounting Standards

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board 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

3 Months Ended

Sep. 30, 2021

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 offers term agreements to its clients, 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.

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
	September 30,
	2020		2021
Recurring fees	$	129,692	$	174,697
Implementation services and other		5,183		6,127
Total revenues from contracts	$	134,875	$	180,824

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 amortizes 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
	September 30,
	2020		2021
Balance at beginning of the period	$	8,434	$	8,734
Deferral of revenue		3,130		4,353
Revenue recognized		(3,894)		(4,370)
Balance at end of the period	$	7,670	$	8,717

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 $6,231 in fiscal 2022, $2,351 in fiscal 2023 and $135 in fiscal 2024 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 September 30, 2020
	Beginning		Capitalized				Ending
	Balance		Costs		Amortization		Balance
Costs to obtain a new contract	$	113,575	$	11,641	$	(6,572)	$	118,644
Costs to fulfill a contract		44,468		7,361		(2,021)		49,808
Total	$	158,043	$	19,002	$	(8,593)	$	168,452


	Three Months Ended September 30, 2021
	Beginning		Capitalized				Ending
	Balance		Costs		Amortization		Balance
Costs to obtain a new contract	$	145,718	$	11,737	$	(8,233)	$	149,222
Costs to fulfill a contract		69,175		10,940		(3,330)		76,785
Total	$	214,893	$	22,677	$	(11,563)	$	226,007

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 $45,484 as of September 30, 2021, 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.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

+ Details

Business Combinations

3 Months Ended

Sep. 30, 2021

Business Combinations

Business Combinations

(4) Business Combinations

On August 31, 2021, the Company entered into an Equity Purchase Agreement (the “Purchase Agreement”) with Blue Marble Payroll, LLC (“Blue Marble”) and its equity holders and acquired all of the issued and outstanding equity interests of Blue Marble for cash consideration of $60,309, subject to working capital and certain other customary purchase price adjustments. Blue Marble’s payroll platform enables U.S.-based companies to manage payroll for employees outside the U.S. in line with complex local and country-specific requirements across many countries. This acquisition enables the Company to better serve its clients in managing their international workforces through a unified solution to pay employees, automate processes and stay compliant with regulations in other countries.

An entity affiliated with Steven I. Sarowitz, the Chairman of the Board of Directors and the largest shareholder of the Company, was the largest equity holder of Blue Marble. The Board of Directors of the Company appointed the Audit Committee, which is comprised solely of directors who are independent of the management of Blue Marble, the Blue Marble equity holders and the Company, to evaluate, assess and negotiate on its behalf the terms and conditions in the Purchase Agreement. The Audit Committee and the disinterested directors of the Company’s Board of Directors unanimously approved the Purchase Agreement and transactions specified within it.

The Company accounts for business combinations in accordance with ASC 805, Business Combinations. The Company applied the acquisition method of accounting and recorded the assets acquired and liabilities assumed at their respective estimated fair values as of the date of acquisition with the excess consideration paid recorded as goodwill. The fair values of assets acquired and liabilities assumed are currently provisional and may change as the estimates and assumptions are subject to change over the measurement period as the Company continues to evaluate and analyze the transaction. The measurement period will end no later than one year from the acquisition date.

The preliminary allocation of the purchase price for Blue Marble is as follows:


	August 31, 2021
Proprietary technology	$	21,200
Client relationships		3,100
Trade names		1,200
Goodwill		34,372
Other assets acquired		2,602
Liabilities assumed		(2,165)
Total purchase price	$	60,309

The results from this acquisition have been included in the Company’s consolidated financial statements since the closing of the acquisition and are not material to the Company. Pro forma information was not presented because the effect of the acquisition was not material to the Company’s consolidated financial statements. The goodwill related to this transaction is primarily related to the assembled workforce and growth opportunities from the expansion of the Company’s product offerings. The goodwill associated with this acquisition is deductible for income tax purposes. Direct costs related to the acquisition were immaterial and recorded as General and administrative expenses as incurred.

Balance Sheet Information

3 Months Ended

Sep. 30, 2021

Balance Sheet Information

Balance Sheet Information

(5) Balance Sheet Information

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

Activity in the allowance for credit losses related to accounts receivable was as follows:


Balance at June 30, 2021	$	800
Charged to expense		38
Write-offs		(44)
Balance at September 30, 2021	$	794

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


	June 30,		September 30,
	2021		2021
Capitalized internal-use software	$	150,922	$	160,751
Accumulated amortization		(105,904)		(112,032)
Capitalized internal-use software, net	$	45,018	$	48,719

Amortization of capitalized internal-use software costs is included in Cost of revenues and amounted to $5,386 and $6,128 for the three months ended September 30, 2020 and 2021, respectively.

Property and equipment, net consist of the following:


	June 30,		September 30,
	2021		2021
Office equipment	$	5,211	$	5,327
Computer equipment		45,420		50,055
Furniture and fixtures		13,104		13,350
Software		6,641		7,091
Leasehold improvements		46,814		47,191
Time clocks rented by clients		5,399		5,769
Total		122,589		128,783
Accumulated depreciation		(62,754)		(66,518)
Property and equipment, net	$	59,835	$	62,265

Depreciation expense amounted to $4,005 and $3,842 for the three months ended September 30, 2020 and 2021, respectively.

The following table summarizes changes in goodwill during the three months ended September 30, 2021:


	September 30,
	2021
Balance at June 30, 2021	$	33,650
Additions attributable to acquisition		34,372
Balance at September 30, 2021	$	68,022

Refer to Note 4 for further details on the current year acquisition.

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


					Weighted
					average
	June 30,		September 30,		useful
	2021		2021		life (years)
Proprietary technology	$	6,129	$	27,329	6.6
Client relationships		19,200		22,300	7.8
Non-solicitation agreements		1,600		1,600	3.1
Trade names		440		1,640	5.0
Total		27,369		52,869
Accumulated amortization		(14,342)		(15,694)
Intangible assets, net	$	13,027	$	37,175

Amortization expense for acquired intangible assets was $844 and $1,352 for the three months ended September 30, 2020 and 2021, respectively.

Future amortization expense for acquired intangible assets as of September 30, 2021 is as follows:


Remainder of fiscal 2022	$	5,981
Fiscal 2023		7,808
Fiscal 2024		6,803
Fiscal 2025		5,748
Fiscal 2026		4,129
Thereafter		6,706
Total	$	37,175

The components of accrued expenses were as follows:


	June 30,		September 30,
	2021		2021
Accrued payroll and personnel costs	$	73,969	$	46,220
Operating lease liabilities		7,549		7,729
Deferred revenue		9,442		10,167
Other		12,149		16,901
Total accrued expenses	$	103,109	$	81,017

Corporate Investments and Funds Held for Clients

3 Months Ended

Sep. 30, 2021

Corporate Investments and Funds Held for Clients

Corporate Investments and Funds Held for Clients

(6) Corporate Investments and Funds Held for Clients

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


	June 30, 2021
			Gross		Gross
	Amortized		unrealized		unrealized
Type of Issue	cost		gains		losses		Fair value
Cash and cash equivalents	$	202,287	$	—	$	—	$	202,287
Funds held for clients' cash and cash equivalents		1,743,594		—		—		1,743,594
Available-for-sale securities:
Corporate bonds		13,390		70		—		13,460
Asset-backed securities		7,062		17		—		7,079
Total available-for-sale securities (1)		20,452		87		—		20,539
Total investments	$	1,966,333	$	87	$	—	$	1,966,420

(1)

Included within the fair value of total available-for-sale securities above is $4,456 of corporate investments and $16,083 of funds held for clients.


	September 30, 2021
			Gross		Gross
	Amortized		unrealized		unrealized
Type of Issue	cost		gains		losses		Fair value
Cash and cash equivalents	$	66,431	$	—	$	—	$	66,431
Funds held for clients' cash and cash equivalents		3,042,121		—		—		3,042,121
Available-for-sale securities:
Commercial paper		70,166		5		(1)		70,170
Corporate bonds		44,305		24		(26)		44,303
Asset-backed securities		7,836		5		(1)		7,840
Certificates of deposit		15,376		2		—		15,378
U.S government agency securities		7,000		—		(18)		6,982
Other		1,880		—		(3)		1,877
Total available-for-sale securities (2)		146,563		36		(49)		146,550
Total investments	$	3,255,115	$	36	$	(49)	$	3,255,102

(2)

Included within the fair value of total available-for-sale securities above is $3,151 of corporate investments and $143,399 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 and commercial paper at June 30, 2021 and September 30, 2021.

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


	June 30,		September 30,
	2021		2021
Cash and cash equivalents	$	202,287	$	66,431
Corporate investments		4,456		3,151
Funds held for clients		1,759,677		3,185,520
Total investments	$	1,966,420	$	3,255,102

Available-for-sale securities that have been in an unrealized loss position for a period of less than 12 months as of September 30, 2021 had fair market value as follows:


	September 30, 2021
	Securities in an unrealized loss
	position for less than 12 months
	Gross
	unrealized		Fair
	losses		Value
Commercial paper	$	(1)	$	20,239
Corporate bonds		(26)		27,743
Asset-backed securities		(1)		3,009
U.S. government agency securities		(18)		6,982
Other		(3)		1,877
Total available-for-sale securities	$	(49)	$	59,850

There were no available-for-sale securities in an unrealized loss position at June 30, 2021. As a result, no securities have been in an unrealized loss position for more than 12 months as of September 30, 2021.

The Company regularly reviews the composition of its portfolio to determine the existence of credit impairment. The Company did not recognize any credit impairment losses during the three months ended September 30, 2020 or 2021. All securities in the Company’s portfolio held an A-1 rating or better as of September 30, 2021.

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 months ended

September 30, 2020 or 2021. There were no realized gains or losses on the sale of available-for-sale securities for the three months ended September 30, 2020 and 2021.

Expected maturities of available-for-sale securities at September 30, 2021 are as follows:


	Amortized		Fair
	cost		value
One year or less	$	102,679	$	102,708
One year to two years		25,865		25,855
Two years to three years		9,958		9,941
Three years to five years		8,061		8,046
Total available-for-sale securities	$	146,563	$	146,550

Fair Value Measurement

3 Months Ended

Sep. 30, 2021

Fair Value Measurement

Fair Value Measurement

(7) Fair Value Measurement

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, 2021 and September 30, 2021 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, 2021 or September 30, 2021.

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


	June 30, 2021
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	202,287	$	202,287	$	—	$	—
Funds held for clients' cash and cash equivalents		1,743,594		1,743,594		—		—
Available-for-sale securities:
Corporate bonds		13,460		—		13,460		—
Asset-backed securities		7,079		—		7,079		—
Total available-for-sale securities		20,539		—		20,539		—
Total investments	$	1,966,420	$	1,945,881	$	20,539	$	—


	September 30, 2021
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	66,431	$	66,431	$	—	$	—
Funds held for clients' cash and cash equivalents		3,042,121		3,030,371		11,750		—
Available-for-sale securities:
Commercial paper		70,170		—		70,170		—
Corporate bonds		44,303		—		44,303		—
Asset-backed securities		7,840		—		7,840		—
Certificates of deposit		15,378		—		15,378		—
U.S government agency securities		6,982		—		6,982		—
Other		1,877		—		1,877		—
Total available-for-sale securities		146,550		—		146,550		—
Total investments	$	3,255,102	$	3,096,802	$	158,300	$	—

- 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

Debt

3 Months Ended

Sep. 30, 2021

Debt

Debt

(8) Debt

In July 2019, the Company entered into a five-year revolving credit agreement with PNC Bank, National Association, and other lenders, which is secured by substantially all of the Company’s assets, subject to certain restrictions. The revolving credit agreement provides for a senior secured revolving credit facility (the “credit facility”) under which the Company may borrow up to $250,000, which may be increased to up to $375,000, subject to obtaining additional lender commitments and certain approvals and satisfying other requirements. The credit facility is scheduled to expire in July 2024. There were no borrowings under the credit facility at June 30, 2021 or September 30, 2021.

The proceeds of any borrowings are to be used to fund working capital, capital expenditures and general corporate purposes, including permitted acquisitions, permitted investments, permitted distributions and share repurchases. The Company may generally borrow, prepay and reborrow under the credit facility and terminate or reduce the lenders’ commitments at any time prior to revolving credit facility expiration without a premium or a penalty, other than customary “breakage” costs with respect to London Interbank Offered Rate (“LIBOR”) revolving loans.

Any borrowings under the credit facility will generally bear interest, at the Company’s option, at a rate per annum determined by reference to either the LIBOR (or a replacement index for the LIBOR rate) or an adjusted base rate, in each case plus an applicable margin ranging from 0.875% to 1.375% and 0.0% to 0.375%, respectively, based on the then-applicable net senior secured leverage ratio. Additionally, the Company is required to pay certain commitment, letter of credit fronting and letter of credit participation fees on available and/or undrawn portions of the credit facility.

Under the credit facility, the Company is required to comply with certain customary affirmative and negative covenants, including a requirement to maintain a maximum net total leverage ratio of not greater than 4.00 to 1.00, a maximum net senior secured leverage ratio of not greater than 3.50 to 1.00 and a minimum interest coverage ratio of not less than 3.00 to 1.00. As of September 30, 2021, the Company was in compliance with all of the aforementioned covenants.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Stock-Based Compensation

3 Months Ended

Sep. 30, 2021

Stock-Based Compensation

Stock-Based Compensation

(9) Stock-Based Compensation

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 restricted stock units 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.

As of September 30, 2021, the Company had 12,053 shares allocated to the plans, of which 2,052 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 three months ended September 30, 2021:


		Number of Shares
Available for grant at July 1, 2021		10,312
RSUs granted		(523)
MSUs granted		(44)
Shares withheld in settlement of taxes and/or exercise price		250
Forfeitures		51
Shares removed		(45)
Available for grant at September 30, 2021		10,001

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 restricted stock units (“RSUs”), market share units (“MSUs”) and the Employee Stock Purchase Plan is included in the following line items in the accompanying unaudited consolidated statements of operations and comprehensive income:


	Three Months Ended September 30,
	2020		2021
Cost of revenues	$	1,832	$	2,607
Sales and marketing		3,880		5,159
Research and development		2,230		3,702
General and administrative		6,335		8,091
Total stock-based compensation expense	$	14,277	$	19,559

In addition, the Company capitalized $769 and $1,547 of stock-based compensation expense in its capitalized internal-use software costs in the three months ended September 30, 2020 and 2021, respectively.

In August 2020, the compensation committee of the Company’s board of directors approved the modification of the performance targets for vesting of the performance-based restricted stock units granted in fiscal 2020. The Company recorded $860 and $1,243 in stock-based compensation expense during the three months ended September 30, 2020 and 2021, respectively, related to these modified performance-based restricted stock units.

There were no stock options granted during the three months ended September 30, 2020 or 2021. The table below presents stock option activity during the three months ended September 30, 2021:


	Outstanding Options
				Weighted
		Weighted		average
		average		remaining	Aggregate
	Number of	exercise		contractual	intrinsic
	shares	price		term (years)	value
Balance at July 1, 2021	765	$	16.06	2.4	$	133,550
Options exercised	(151)	$	9.46
Balance at September 30, 2021	614	$	17.69	2.3	$	161,112
Options vested and exercisable at September 30, 2021	614	$	17.69	2.3	$	161,112

The total intrinsic value of options exercised was $11,408 and $35,868 during the three months ended September 30, 2020 and 2021.

The Company grants 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 three or 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/or Adjusted EBITDA margin targets. For these performance-based RSUs, the Company recognizes stock-based compensation expense based upon the probable or actual achievement of these aforementioned performance metrics.

The following table represents restricted stock unit activity during the three months ended September 30, 2021:


	Units	Weighted average grant date fair value
RSU balance at July 1, 2021	1,388	$	100.33
RSUs granted	523	$	250.22
RSUs vested	(524)	$	83.27
RSUs forfeited	(46)	$	135.51
RSU balance at September 30, 2021	1,341	$	164.71
RSUs expected to vest at September 30, 2021	1,226	$	162.92

At September 30, 2021, there was $148,712 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 2.2 years.

The Company also grants MSUs under the 2014 Plan with terms determined at the discretion of the Committee. The actual number of MSUs that will be eligible to vest is based on the achievement of a relative total shareholder return (“TSR”) target as compared to the TSR realized by each of the companies comprising the Russell 3000 Index over an approximately three-year period. The MSUs cliff-vest at the end of the TSR measurement period, and up to 200% of the target number of shares subject to each MSU are eligible to be earned.

The following table represents market share unit activity during the three months ended September 30, 2021:


	Units	Weighted average grant date fair value
MSU balance at July 1, 2021	58	$	178.04
MSUs granted	44	$	355.60
MSUs forfeited	(5)	$	178.04
MSU balance at September 30, 2021	97	$	257.87

The Company estimated the grant date fair value of the MSUs using a Monte Carlo simulation model that included the following assumptions:


	Three Months Ended
	September 30,
	2020		2021
Valuation assumptions:
Expected dividend yield	—	%	—	%
Expected volatility	52.0	%	47.5	%
Expected term (years)	3.04		3.04
Risk‑free interest rate	0.18	%	0.43	%

At September 30, 2021, there was $18,240 of total unrecognized compensation cost, net of estimated forfeitures, related to unvested MSUs. That cost is expected to be recognized over a period of 2.6 years.

Litigation

3 Months Ended

Sep. 30, 2021

Litigation

Litigation

(10) Litigation

On November 16, 2020, a potential class action complaint was filed against the Company with the Circuit Court of Cook County alleging that the Company violated the Illinois Biometric Information Privacy Act. The complaint seeks statutory damages, attorney’s fees and other costs. This claim is still in its earliest stages and the Company is unable to estimate any reasonably possible loss, or range of loss, with respect to this matter. The Company intends to vigorously defend against this lawsuit.

From time to time, the Company is subject to litigation arising in the ordinary course of business. Many of these matters are covered in whole or in part by insurance. In the opinion of the Company’s management, the ultimate disposition of any matters currently outstanding or threatened will not have a material adverse effect on the Company’s financial position, results of operations, or liquidity. However, these matters are subject to inherent uncertainties and could materially impact the Company’s financial position, results of operations, or liquidity based on the final disposition of these matters.

Income Taxes

3 Months Ended

Sep. 30, 2021

Income Taxes

Income Taxes

(11) Income Taxes

On March 11, 2021, the President signed the American Rescue Plan Act, 2021 into law. The bill complements the provisions set forth in the Coronavirus Aid, Relief, and the Economic Security Act (the “CARES Act”) and the Consolidated Appropriations Act, 2021, which were signed into law on March 27, 2020, and December 27, 2020, respectively. The provisions of the legislation do not have a significant impact on the Company’s income taxes.

The Company’s quarterly provision for income taxes is based on the annual effective rate method. The Company’s quarterly provision for income taxes also includes the tax impact of certain unusual or infrequently occurring items, if any, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, and other discrete items in the interim period in which they occur.

The Company’s effective tax rate was (290.3)% and (205.2)% for the three months ended September 30, 2020 and 2021, respectively. The Company’s effective tax rate for the three months ended September 30, 2020 and September 30, 2021 was lower than the federal statutory rate of 21% primarily due to excess tax benefits from employee stock-

based compensation and research and development tax credits, partially offset by an increase to the valuation allowance for the period ended September 30, 2021.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Net Income Per Share

3 Months Ended

Sep. 30, 2021

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 market share 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
	September 30,
	2020		2021
Numerator:
Net income	$	12,460	$	30,932

Denominator:
Weighted-average shares used in computing net income per share:
Basic		54,015		54,810
Weighted-average effect of potentially dilutive shares:
Employee stock options, restricted stock units, market share units and employee stock purchase plan shares		2,035		1,696
Diluted		56,050		56,506

Net income per share:
Basic	$	0.23	$	0.56
Diluted	$	0.22	$	0.55

The following table summarizes the outstanding restricted stock units and market share units as of September 30, 2020 and 2021 that were excluded from the diluted per share calculation for the periods presented because to include them would have been antidilutive:


	Three Months Ended
	September 30,
	2020	2021
Market share units	58	—
Restricted stock units	462	507
Total	520	507

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2021
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. Accounting estimates used in the preparation of these consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes.
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 three months ended September 30, 2021 are not necessarily indicative of the results for the full year or the results for any future periods. 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, 2021 included in the Company’s Annual Report on Form 10-K.
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 Issued Accounting Standards	(d) Recently Issued Accounting Standards From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board 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 + Details

Revenue (Tables)

3 Months Ended

Sep. 30, 2021

Revenue

Schedule of disaggregation of revenue


	Three Months Ended
	September 30,
	2020		2021
Recurring fees	$	129,692	$	174,697
Implementation services and other		5,183		6,127
Total revenues from contracts	$	134,875	$	180,824

Schedule of changes in deferred revenue related to nonrefundable upfront fees


	Three Months Ended
	September 30,
	2020		2021
Balance at beginning of the period	$	8,434	$	8,734
Deferral of revenue		3,130		4,353
Revenue recognized		(3,894)		(4,370)
Balance at end of the period	$	7,670	$	8,717

Schedule of deferred contract costs and the related amortization expense


	Three Months Ended September 30, 2020
	Beginning		Capitalized				Ending
	Balance		Costs		Amortization		Balance
Costs to obtain a new contract	$	113,575	$	11,641	$	(6,572)	$	118,644
Costs to fulfill a contract		44,468		7,361		(2,021)		49,808
Total	$	158,043	$	19,002	$	(8,593)	$	168,452


	Three Months Ended September 30, 2021
	Beginning		Capitalized				Ending
	Balance		Costs		Amortization		Balance
Costs to obtain a new contract	$	145,718	$	11,737	$	(8,233)	$	149,222
Costs to fulfill a contract		69,175		10,940		(3,330)		76,785
Total	$	214,893	$	22,677	$	(11,563)	$	226,007

Business Combinations (Tables)

3 Months Ended

Sep. 30, 2021

Business Combinations

Summary of the preliminary allocation of the purchase price for Blue Marble


	August 31, 2021
Proprietary technology	$	21,200
Client relationships		3,100
Trade names		1,200
Goodwill		34,372
Other assets acquired		2,602
Liabilities assumed		(2,165)
Total purchase price	$	60,309

Balance Sheet Information (Tables)

3 Months Ended

Sep. 30, 2021

Balance Sheet Information

Schedule of activity in the allowance for credit losses related to accounts receivable


Balance at June 30, 2021	$	800
Charged to expense		38
Write-offs		(44)
Balance at September 30, 2021	$	794

Schedule of capitalized internal-use software and accumulated amortization


	June 30,		September 30,
	2021		2021
Capitalized internal-use software	$	150,922	$	160,751
Accumulated amortization		(105,904)		(112,032)
Capitalized internal-use software, net	$	45,018	$	48,719

Schedule of property and equipment, net


	June 30,		September 30,
	2021		2021
Office equipment	$	5,211	$	5,327
Computer equipment		45,420		50,055
Furniture and fixtures		13,104		13,350
Software		6,641		7,091
Leasehold improvements		46,814		47,191
Time clocks rented by clients		5,399		5,769
Total		122,589		128,783
Accumulated depreciation		(62,754)		(66,518)
Property and equipment, net	$	59,835	$	62,265

Schedule of changes in goodwill


	September 30,
	2021
Balance at June 30, 2021	$	33,650
Additions attributable to acquisition		34,372
Balance at September 30, 2021	$	68,022

Schedule of amortizable intangible assets and estimated useful lives


					Weighted
					average
	June 30,		September 30,		useful
	2021		2021		life (years)
Proprietary technology	$	6,129	$	27,329	6.6
Client relationships		19,200		22,300	7.8
Non-solicitation agreements		1,600		1,600	3.1
Trade names		440		1,640	5.0
Total		27,369		52,869
Accumulated amortization		(14,342)		(15,694)
Intangible assets, net	$	13,027	$	37,175

Schedule of future amortization expense for acquired intangible assets


Remainder of fiscal 2022	$	5,981
Fiscal 2023		7,808
Fiscal 2024		6,803
Fiscal 2025		5,748
Fiscal 2026		4,129
Thereafter		6,706
Total	$	37,175

Schedule of components of accrued expenses


	June 30,		September 30,
	2021		2021
Accrued payroll and personnel costs	$	73,969	$	46,220
Operating lease liabilities		7,549		7,729
Deferred revenue		9,442		10,167
Other		12,149		16,901
Total accrued expenses	$	103,109	$	81,017

Corporate Investments and Funds Held For Clients (Tables)

3 Months Ended

Sep. 30, 2021

Corporate Investments and Funds Held for Clients

Schedule of corporate investments and funds held for clients


	June 30, 2021
			Gross		Gross
	Amortized		unrealized		unrealized
Type of Issue	cost		gains		losses		Fair value
Cash and cash equivalents	$	202,287	$	—	$	—	$	202,287
Funds held for clients' cash and cash equivalents		1,743,594		—		—		1,743,594
Available-for-sale securities:
Corporate bonds		13,390		70		—		13,460
Asset-backed securities		7,062		17		—		7,079
Total available-for-sale securities (1)		20,452		87		—		20,539
Total investments	$	1,966,333	$	87	$	—	$	1,966,420

(1)

Included within the fair value of total available-for-sale securities above is $4,456 of corporate investments and $16,083 of funds held for clients.


	September 30, 2021
			Gross		Gross
	Amortized		unrealized		unrealized
Type of Issue	cost		gains		losses		Fair value
Cash and cash equivalents	$	66,431	$	—	$	—	$	66,431
Funds held for clients' cash and cash equivalents		3,042,121		—		—		3,042,121
Available-for-sale securities:
Commercial paper		70,166		5		(1)		70,170
Corporate bonds		44,305		24		(26)		44,303
Asset-backed securities		7,836		5		(1)		7,840
Certificates of deposit		15,376		2		—		15,378
U.S government agency securities		7,000		—		(18)		6,982
Other		1,880		—		(3)		1,877
Total available-for-sale securities (2)		146,563		36		(49)		146,550
Total investments	$	3,255,115	$	36	$	(49)	$	3,255,102

(2)

Included within the fair value of total available-for-sale securities above is $3,151 of corporate investments and $143,399 of funds held for clients.

Schedule of the classification of investments


	June 30,		September 30,
	2021		2021
Cash and cash equivalents	$	202,287	$	66,431
Corporate investments		4,456		3,151
Funds held for clients		1,759,677		3,185,520
Total investments	$	1,966,420	$	3,255,102

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


	September 30, 2021
	Securities in an unrealized loss
	position for less than 12 months
	Gross
	unrealized		Fair
	losses		Value
Commercial paper	$	(1)	$	20,239
Corporate bonds		(26)		27,743
Asset-backed securities		(1)		3,009
U.S. government agency securities		(18)		6,982
Other		(3)		1,877
Total available-for-sale securities	$	(49)	$	59,850

Schedule of expected maturities of available-for-sale securities


	Amortized		Fair
	cost		value
One year or less	$	102,679	$	102,708
One year to two years		25,865		25,855
Two years to three years		9,958		9,941
Three years to five years		8,061		8,046
Total available-for-sale securities	$	146,563	$	146,550

Fair Value Measurement (Tables)

3 Months Ended

Sep. 30, 2021

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, 2021
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	202,287	$	202,287	$	—	$	—
Funds held for clients' cash and cash equivalents		1,743,594		1,743,594		—		—
Available-for-sale securities:
Corporate bonds		13,460		—		13,460		—
Asset-backed securities		7,079		—		7,079		—
Total available-for-sale securities		20,539		—		20,539		—
Total investments	$	1,966,420	$	1,945,881	$	20,539	$	—


	September 30, 2021
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	66,431	$	66,431	$	—	$	—
Funds held for clients' cash and cash equivalents		3,042,121		3,030,371		11,750		—
Available-for-sale securities:
Commercial paper		70,170		—		70,170		—
Corporate bonds		44,303		—		44,303		—
Asset-backed securities		7,840		—		7,840		—
Certificates of deposit		15,378		—		15,378		—
U.S government agency securities		6,982		—		6,982		—
Other		1,877		—		1,877		—
Total available-for-sale securities		146,550		—		146,550		—
Total investments	$	3,255,102	$	3,096,802	$	158,300	$	—

Stock-Based Compensation (Tables)

3 Months Ended

Sep. 30, 2021

Stock-Based Compensation

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


		Number of Shares
Available for grant at July 1, 2021		10,312
RSUs granted		(523)
MSUs granted		(44)
Shares withheld in settlement of taxes and/or exercise price		250
Forfeitures		51
Shares removed		(45)
Available for grant at September 30, 2021		10,001

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


	Three Months Ended September 30,
	2020		2021
Cost of revenues	$	1,832	$	2,607
Sales and marketing		3,880		5,159
Research and development		2,230		3,702
General and administrative		6,335		8,091
Total stock-based compensation expense	$	14,277	$	19,559

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, 2021	765	$	16.06	2.4	$	133,550
Options exercised	(151)	$	9.46
Balance at September 30, 2021	614	$	17.69	2.3	$	161,112
Options vested and exercisable at September 30, 2021	614	$	17.69	2.3	$	161,112

Schedule of restricted stock unit activity


	Units	Weighted average grant date fair value
RSU balance at July 1, 2021	1,388	$	100.33
RSUs granted	523	$	250.22
RSUs vested	(524)	$	83.27
RSUs forfeited	(46)	$	135.51
RSU balance at September 30, 2021	1,341	$	164.71
RSUs expected to vest at September 30, 2021	1,226	$	162.92

Schedule of market share unit activity


	Units	Weighted average grant date fair value
MSU balance at July 1, 2021	58	$	178.04
MSUs granted	44	$	355.60
MSUs forfeited	(5)	$	178.04
MSU balance at September 30, 2021	97	$	257.87

Summary of the assumptions used for estimating the grant date fair value of MSUs


	Three Months Ended
	September 30,
	2020		2021
Valuation assumptions:
Expected dividend yield	—	%	—	%
Expected volatility	52.0	%	47.5	%
Expected term (years)	3.04		3.04
Risk‑free interest rate	0.18	%	0.43	%

Net Income Per Share (Tables)

3 Months Ended

Sep. 30, 2021

Net Income Per Share

Schedule of calculation of basic and diluted net income per share


	Three Months Ended
	September 30,
	2020		2021
Numerator:
Net income	$	12,460	$	30,932

Denominator:
Weighted-average shares used in computing net income per share:
Basic		54,015		54,810
Weighted-average effect of potentially dilutive shares:
Employee stock options, restricted stock units, market share units and employee stock purchase plan shares		2,035		1,696
Diluted		56,050		56,506

Net income per share:
Basic	$	0.23	$	0.56
Diluted	$	0.22	$	0.55

Summary of anti-dilutive securities


	Three Months Ended
	September 30,
	2020	2021
Market share units	58	—
Restricted stock units	462	507
Total	520	507

Revenue - Disaggregation (Details) - USD ($) $ in Thousands	3 Months Ended
Revenue - Disaggregation (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Revenue
Period of term arrangements not cancellable by client	2 years
Disaggregation of revenue
Total revenues from contracts	$ 180,824	$ 134,875
Maximum
Revenue
Period of notice to cancel by client	60 days
Recurring fees
Disaggregation of revenue
Total revenues from contracts	$ 174,697	129,692
Implementation services and other
Disaggregation of revenue
Total revenues from contracts	$ 6,127	$ 5,183

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Revenue - Deferred Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Changes in deferred revenue related to nonrefundable upfront fees
Balance at beginning of the period	$ 8,734	$ 8,434
Deferral of revenue	4,353	3,130
Revenue recognized	(4,370)	(3,894)
Balance at end of the period	$ 8,717	$ 7,670
Maximum
Revenue
Amortization period of nonrefundable upfront implementation fees	24 months
Implementation services and other
Changes in deferred revenue related to nonrefundable upfront fees
Deferred revenue from nonrefundable upfront fees expected to be recognized in fiscal 2022	$ 6,231
Deferred revenue from nonrefundable upfront fees expected to be recognized in fiscal 2023	2,351
Deferred revenue from nonrefundable upfront fees expected to be recognized in fiscal 2024 and thereafter	$ 135

Revenue - Deferred contract costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Deferred contract costs
Amortization period of capitalized contract costs	7 years
Beginning Balance	$ 214,893	$ 158,043
Capitalized Costs	22,677	19,002
Amortization	(11,563)	(8,593)
Ending Balance	226,007	168,452
Costs to obtain a new contract
Deferred contract costs
Beginning Balance	145,718	113,575
Capitalized Costs	11,737	11,641
Amortization	(8,233)	(6,572)
Ending Balance	149,222	118,644
Costs to fulfill a contract
Deferred contract costs
Beginning Balance	69,175	44,468
Capitalized Costs	10,940	7,361
Amortization	(3,330)	(2,021)
Ending Balance	$ 76,785	$ 49,808

Revenue - Performance Obligations (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Remaining Performance Obligations
Minimum value of unsatisfied performance obligations on term-based contracts	$ 45,484
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01
Remaining Performance Obligations
Remaining performance obligation period	24 months

Business Combinations (Details) - USD ($) $ in Thousands	Aug. 31, 2021	Sep. 30, 2021	Jun. 30, 2021
Business Combinations
Goodwill		$ 68,022	$ 33,650
Blue Marble
Business Combinations
Cash consideration	$ 60,309
Goodwill	34,372
Other assets acquired	2,602
Liabilities assumed	(2,165)
Total purchase price	60,309
Blue Marble \| Proprietary technology
Business Combinations
Intangible assets	21,200
Blue Marble \| Client relationships
Business Combinations
Intangible assets	3,100
Blue Marble \| Trade names
Business Combinations
Intangible assets	$ 1,200

Balance Sheet Information - Allowance for Credit Losses for Accounts Receivable, Capitalized Internal-Use Software and Property, Plant and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021
Activity in the allowance for credit losses
Balance at the beginning of the period	$ 800
Charged to expense	38	$ 56
Write-offs	(44)
Balance at the end of the period	794
Capitalized internal-use software and accumulated amortization
Capitalized internal-use software	160,751		$ 150,922
Accumulated amortization	(112,032)		(105,904)
Capitalized internal-use software, net	48,719		45,018
Property and equipment, net
Property and equipment, gross	128,783		122,589
Accumulated depreciation	(66,518)		(62,754)
Property and equipment, net	62,265		59,835
Depreciation expense	3,842	4,005
Changes in goodwill
Balance at the beginning of period	33,650
Additions attributable to acquisition	34,372
Balance at end of period	68,022
Cost of revenues
Capitalized internal-use software and accumulated amortization
Amortization of capitalized internal-use software	6,128	$ 5,386
Office equipment
Property and equipment, net
Property and equipment, gross	5,327		5,211
Computer equipment
Property and equipment, net
Property and equipment, gross	50,055		45,420
Furniture and fixtures
Property and equipment, net
Property and equipment, gross	13,350		13,104
Software
Property and equipment, net
Property and equipment, gross	7,091		6,641
Leasehold improvements
Property and equipment, net
Property and equipment, gross	47,191		46,814
Time clocks rented by clients
Property and equipment, net
Property and equipment, gross	$ 5,769		$ 5,399

Balance Sheet Information - Intangible Assets And Accrued Expenses (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021
Amortizable intangible assets
Intangible assets, gross	$ 52,869		$ 27,369
Accumulated amortization	(15,694)		(14,342)
Intangible assets, net	37,175		13,027
Amortization expense for acquired intangible assets	1,352	$ 844
Future amortization expense for acquired intangible assets
Remainder of fiscal 2022	5,981
Fiscal 2023	7,808
Fiscal 2024	6,803
Fiscal 2025	5,748
Fiscal 2026	4,129
Thereafter	6,706
Intangible assets, net	37,175		13,027
Components of accrued expenses
Accrued payroll and personnel costs	46,220		73,969
Operating lease liabilities	7,729		7,549
Deferred revenue	10,167		9,442
Other	16,901		12,149
Total accrued expenses	81,017		103,109
Proprietary technology
Amortizable intangible assets
Intangible assets, gross	$ 27,329		6,129
Weighted average useful life (years)	6 years 7 months 6 days
Client relationships
Amortizable intangible assets
Intangible assets, gross	$ 22,300		19,200
Weighted average useful life (years)	7 years 9 months 18 days
Non-solicitation agreements
Amortizable intangible assets
Intangible assets, gross	$ 1,600		1,600
Weighted average useful life (years)	3 years 1 month 6 days
Trade names
Amortizable intangible assets
Intangible assets, gross	$ 1,640		$ 440
Weighted average useful life (years)	5 years

Corporate Investments and Funds Held For Clients - Reconciliation (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021	Sep. 30, 2020
Corporate Investments and Funds Held for Clients
Amortized cost of cash and cash equivalents	$ 66,431	$ 202,287
Fair value of cash and cash equivalents	66,431	202,287	$ 221,514
Amortized cost of funds held for clients' cash and cash equivalents	3,042,121	1,743,594
Fair value of funds held for clients' cash and cash equivalents	3,042,121	1,743,594	$ 1,314,876
Available-for-sale securities
Amortized cost	146,563	20,452
Gross unrealized gains	36	87
Gross unrealized losses	(49)
Fair value	146,550	20,539
Total investments at amortized cost	3,255,115	1,966,333
Total investments gross unrealized gains	36	87
Total investments gross unrealized losses	(49)
Total investments at fair value	3,255,102	1,966,420
Commercial paper
Available-for-sale securities
Amortized cost	70,166
Gross unrealized gains	5
Gross unrealized losses	(1)
Fair value	70,170
Corporate bonds
Available-for-sale securities
Amortized cost	44,305	13,390
Gross unrealized gains	24	70
Gross unrealized losses	(26)
Fair value	44,303	13,460
Asset-backed securities
Available-for-sale securities
Amortized cost	7,836	7,062
Gross unrealized gains	5	17
Gross unrealized losses	(1)
Fair value	7,840	7,079
Certificates of deposit
Available-for-sale securities
Amortized cost	15,376
Gross unrealized gains	2
Fair value	15,378
U.S government agency securities
Available-for-sale securities
Amortized cost	7,000
Gross unrealized losses	(18)
Fair value	6,982
Other
Available-for-sale securities
Amortized cost	1,880
Gross unrealized losses	(3)
Fair value	1,877
Corporate investments
Available-for-sale securities
Fair value	3,151	4,456
Funds held for clients
Available-for-sale securities
Fair value	$ 143,399	$ 16,083

Corporate Investments and Funds Held For Clients - Classification (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021
Corporate Investments and Funds Held for Clients
Cash and cash equivalents	$ 66,431	$ 221,514	$ 202,287
Corporate investments	3,151		4,456
Funds held for clients	3,185,520		1,759,677
Total investments at fair value	3,255,102		1,966,420
Available-for-sale securities
Gross unrealized loss on available-for-sale securities in a loss position for less than 12 months	(49)
Fair value of available-for-sale securities in an unrealized loss position less than 12 months	59,850
Available-for-sale securities in an unrealized loss position			$ 0
Unrealized loss on available-for-sale securities in a loss position for greater than 12 months	0
Credit impairment losses	0	0
Realized gains or losses	0	$ 0
Commercial paper
Available-for-sale securities
Gross unrealized loss on available-for-sale securities in a loss position for less than 12 months	(1)
Fair value of available-for-sale securities in an unrealized loss position less than 12 months	20,239
Corporate bonds
Available-for-sale securities
Gross unrealized loss on available-for-sale securities in a loss position for less than 12 months	(26)
Fair value of available-for-sale securities in an unrealized loss position less than 12 months	27,743
Asset-backed securities
Available-for-sale securities
Gross unrealized loss on available-for-sale securities in a loss position for less than 12 months	(1)
Fair value of available-for-sale securities in an unrealized loss position less than 12 months	3,009
U.S government agency securities
Available-for-sale securities
Gross unrealized loss on available-for-sale securities in a loss position for less than 12 months	(18)
Fair value of available-for-sale securities in an unrealized loss position less than 12 months	6,982
Other
Available-for-sale securities
Gross unrealized loss on available-for-sale securities in a loss position for less than 12 months	(3)
Fair value of available-for-sale securities in an unrealized loss position less than 12 months	$ 1,877

Corporate Investments and Funds Held For Clients - Maturities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021
Expected maturities of available-for-sale securities, amortized cost
One year or less	$ 102,679
One year to two years	25,865
Two years to three years	9,958
Three years to five years	8,061
Total available-for-sale securities	146,563	$ 20,452
Expected maturities of available-for-sale securities, fair value
One year or less	102,708
One year to two years	25,855
Two years to three years	9,941
Three years to five years	8,046
Total available-for-sale securities	$ 146,550	$ 20,539

Fair Value Measurement (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021	Sep. 30, 2020
Fair value measurement
Cash and cash equivalents	$ 66,431	$ 202,287	$ 221,514
Funds held for clients' cash and cash equivalents	3,042,121	1,743,594	$ 1,314,876
Available-for-sale securities:
Total available-for-sale securities	146,550	20,539
Total investments at fair value	3,255,102	1,966,420
Level 1
Fair value measurement
Cash and cash equivalents	66,431	202,287
Funds held for clients' cash and cash equivalents	3,030,371	1,743,594
Available-for-sale securities:
Total investments at fair value	3,096,802	1,945,881
Level 2
Fair value measurement
Funds held for clients' cash and cash equivalents	11,750
Available-for-sale securities:
Total available-for-sale securities	146,550	20,539
Total investments at fair value	158,300	20,539
Level 3
Available-for-sale securities:
Total available-for-sale securities	0	0
Commercial paper
Available-for-sale securities:
Total available-for-sale securities	70,170
Commercial paper \| Level 2
Available-for-sale securities:
Total available-for-sale securities	70,170
Corporate bonds
Available-for-sale securities:
Total available-for-sale securities	44,303	13,460
Corporate bonds \| Level 2
Available-for-sale securities:
Total available-for-sale securities	44,303	13,460
Asset-backed securities
Available-for-sale securities:
Total available-for-sale securities	7,840	7,079
Asset-backed securities \| Level 2
Available-for-sale securities:
Total available-for-sale securities	7,840	$ 7,079
Certificates of deposit
Available-for-sale securities:
Total available-for-sale securities	15,378
Certificates of deposit \| Level 2
Available-for-sale securities:
Total available-for-sale securities	15,378
U.S government agency securities
Available-for-sale securities:
Total available-for-sale securities	6,982
U.S government agency securities \| Level 2
Available-for-sale securities:
Total available-for-sale securities	6,982
Other
Available-for-sale securities:
Total available-for-sale securities	1,877
Other \| Level 2
Available-for-sale securities:
Total available-for-sale securities	$ 1,877

Debt (Details) - Five-year revolving credit agreement - Senior secured debt - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Jul. 31, 2019	Sep. 30, 2021	Jun. 30, 2021
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
Outstanding borrowings		$ 0	$ 0
Minimum
Debt
Interest coverage ratio	3.00
Maximum
Debt
Net total leverage ratio	4.00
Net senior secured leverage ratio	3.50
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%

Stock-Based Compensation - General Information (Details) shares in Thousands	3 Months Ended
	Sep. 30, 2021 shares
Equity Incentive Plans
Equity Incentive Plans
Number of shares of common stock reserved for issuance	12,053
Number of shares allocated but not yet issued that are subject to outstanding options or awards	2,052
2008 Plan
Equity Incentive Plans
Awards issued (in shares)	0
Awards issuable (in shares)	0
2014 incentive Plan
Equity Incentive Plans
Potential number of additional shares available for grant each year (as a percent)	4.50%

Stock-Based Compensation - Incentive Plans Activity (Details) - Equity Incentive Plans shares in Thousands	3 Months Ended
	Sep. 30, 2021 shares
Shares Available for Grant
Balance at the beginning of the period	10,312
RSUs granted	(523)
MSUs granted	(44)
Shares withheld in settlement of taxes and/or exercise price	250
Forfeitures	51
Shares removed	(45)
Balance at the end of the period	10,001

Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Benefit Plans
Total stock-based compensation expense	$ 19,559	$ 14,277
Stock-based compensation expense capitalized in internal-use software costs	1,547	769
Cost of revenues
Benefit Plans
Total stock-based compensation expense	2,607	1,832
Sales and marketing
Benefit Plans
Total stock-based compensation expense	5,159	3,880
Research and development
Benefit Plans
Total stock-based compensation expense	3,702	2,230
General and administrative
Benefit Plans
Total stock-based compensation expense	8,091	6,335
Modified performance-based restricted stock unit awards
Benefit Plans
Total stock-based compensation expense	$ 1,243	$ 860

Stock-Based Compensation - Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021
Options Outstanding, Number of Shares
Balance at the beginning of the period	765
Options granted	0	0
Options exercised	(151)
Balance at the end of the period	614		765
Options Outstanding, Weighted average exercise price
Balance at the beginning of the period (in dollars per share)	$ 16.06
Options exercised (in dollars per share)	9.46
Balance at the end of the period (in dollars per share)	$ 17.69		$ 16.06
Options Additional Disclosures
Weighted average remaining contractual term	2 years 3 months 18 days		2 years 4 months 24 days
Weighted average remaining contractual term of options vested and exercisable at the end of the year (years)	2 years 3 months 18 days
Aggregate intrinsic value at the beginning of the period	$ 133,550
Aggregate intrinsic value at the end of the period	$ 161,112		$ 133,550
Options vested and exercisable at the end of the period (in shares)	614
Options vested and exercisable at the end of the period, weighted average exercise price (in dollars per share)	$ 17.69
Options vested and exercisable intrinsic value	$ 161,112
Total intrinsic value of options exercised	$ 35,868	$ 11,408

Stock-Based Compensation - RSU activity (Details) - RSUs $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2021 USD ($) $ / shares shares
RSUs Outstanding, Units
Balance at the beginning of the period \| shares	1,388
RSUs granted \| shares	523
RSUs vested \| shares	(524)
RSUs forfeited \| shares	(46)
Balance at the end of the period \| shares	1,341
RSUs expected to vest at the end of the period \| shares	1,226
RSUs Outstanding, Weighted average grant date fair value
Balance at the beginning of the period \| $ / shares	$ 100.33
RSUs granted \| $ / shares	250.22
RSUs vested \| $ / shares	83.27
RSUs forfeited \| $ / shares	135.51
Balance at the end of the period \| $ / shares	164.71
RSUs expected to vest at the end of the period \| $ / shares	$ 162.92
Unrecognized Compensation Costs Not yet Recognized, Net of Estimated Forfeitures
Total unrecognized compensation cost, net of estimated forfeitures related to unvested RSUs \| $	$ 148,712
Weighted average period to recognize unrecognized compensation cost	2 years 2 months 12 days
Minimum
Equity Incentive Plans
Vesting period	3 years
Maximum
Equity Incentive Plans
Vesting period	4 years

Stock-Based Compensation - MSU activity (Details) - Market share units shares in Thousands	3 Months Ended
	Sep. 30, 2021 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Percentage of target number of shares subject to each MSU	200.00%
MSUs Outstanding, Units
Balance at the beginning of the period \| shares	58
MSUs granted \| shares	44
MSUs forfeited \| shares	(5)
Balance at the end of the period \| shares	97
MSUs Outstanding, Weighted average grant date fair value
Balance at the beginning of the period \| $ / shares	$ 178.04
MSUs granted \| $ / shares	355.60
MSUs forfeited \| $ / shares	178.04
Balance at the end of the period \| $ / shares	$ 257.87

Stock-Based Compensation - MSU Information (Details) - Market share units - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Valuation assumptions:
Expected dividend yield	0.00%	0.00%
Expected volatility	47.50%	52.00%
Expected term (years)	3 years 14 days	3 years 14 days
Risk-free interest rate	0.43%	0.18%
Unrecognized Compensation Costs Not yet Recognized, Net of Estimated Forfeitures
Total unrecognized compensation cost, net of estimated forfeitures related to unvested MSUs	$ 18,240
Weighted average period to recognize unrecognized compensation cost	2 years 7 months 6 days

Income Taxes (Details)	3 Months Ended
Income Taxes (Details)	Sep. 30, 2021	Sep. 30, 2020
Income Taxes
Effective tax rate for the period (as a percent)	(205.20%)	(290.30%)
U.S. federal income tax rate (as a percent)	21.00%	21.00%

Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Numerator:
Net income	$ 30,932	$ 12,460
Weighted-average shares used in computing net income per share:
Basic (in shares)	54,810	54,015
Weighted-average effect of potentially dilutive shares:
Employee stock options, restricted stock units, market share units and employee stock purchase plan shares	1,696	2,035
Diluted (in shares)	56,506	56,050
Net income per share:
Basic (in dollars per share)	$ 0.56	$ 0.23
Diluted (in dollars per share)	$ 0.55	$ 0.22
Anti-dilutive securities excluded	507	520
Market share units
Net income per share:
Anti-dilutive securities excluded		58
RSUs
Net income per share:
Anti-dilutive securities excluded	507	462