0001591698-24-000277 | 10-Q | XBRL Viewer

Stock-Based Compensation

3 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

(9) Stock-Based Compensation

The Company maintained a 2014 Equity Incentive Plan (the “2014 Plan”) and continues to maintain a 2023 Equity Incentive Plan (the “2023 Plan”). The 2023 Plan serves as the successor to the 2014 Plan and permits the granting of market share units ("MSUs"), performance stock units ("PSUs"), restricted stock units ("RSUs") and other equity incentives at the discretion of the compensation committee of the Company’s board of directors ("Committee"). No new awards have been or will be issued under the 2014 Plan since the effective date of the 2023 Plan. Outstanding awards under the 2014 Plan continue to be subject to the terms and conditions of the 2014 Plan.

As of September 30, 2024, the Company had 1,432 shares available for future grant under the 2023 Plan, and 2,138 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 granted awards that are forfeited or net settled at exercise or release may be reissued under the 2023 Plan to satisfy future issuances.

Stock-based compensation expense related to MSUs, PSUs, RSUs 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,
	2023		2024
Cost of revenues	$	4,943	$	4,496
Sales and marketing	9,225		9,341
Research and development	9,758		9,493
General and administrative	15,079		10,210
Total stock-based compensation expense	$	39,005	$	33,540

In addition, the Company capitalized $4,049 and $3,831 of stock-based compensation expense in its capitalized internal-use software costs in the three months ended September 30, 2023 and 2024, respectively.

There were no stock options granted during the three months ended September 30, 2024. The table below presents stock option activity during the three months ended September 30, 2024:


	Outstanding Options
	Number of shares	Weighted average exercise price		Weighted average remaining contractual term (years)	Aggregate intrinsic value
Option balance at July 1, 2024	167	$	28.13	0.5	$	17,301
Options exercised	(114)	$	24.80
Option balance at September 30, 2024	53	$	35.28	0.9	$	6,874
Options vested and exercisable at September 30, 2024	53	$	35.28	0.9	$	6,874

The total intrinsic value of options exercised was $2,494 and $13,497 during the three months ended September 30, 2023 and 2024, respectively.

The Company grants RSUs under its equity incentive plan with terms determined at the discretion of the Committee. RSUs are time-based awards that generally vest over four years following the grant date.

The following table represents restricted stock unit activity during the three months ended September 30, 2024:


	Units	Weighted average grant date fair value
RSU balance at July 1, 2024	1,290	$	214.98
RSUs granted	867	$	155.64
RSUs vested	(258)	$	206.40
RSUs forfeited	(48)	$	199.60
RSU balance at September 30, 2024	1,851	$	190.48

The Company also grants PSUs under its equity incentive plan with terms determined at the discretion of the Committee. During the three months ended September 30, 2024, the Company granted approximately 55 PSUs with a grant date fair value of $155.95 per share, all which remained outstanding at September 30, 2024. The actual number of PSUs that will be eligible to vest is based on the achievement of Recurring and other revenue targets over a one-year period with vesting taking place annually over three years. Up to 200% of the target number of shares subject to each PSU are eligible to be earned.

The Company also grants MSUs under its equity incentive 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 approximately three years. The MSUs vest at the end of each 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, 2024:


	Units	Weighted average grant date fair value
MSU balance at July 1, 2024	197	$	335.79
MSUs granted	28	$	211.45
MSUs vested	(15)	$	355.60
MSUs forfeited	(31)	$	345.51
MSU balance at September 30, 2024	179	$	312.96

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,
	2023	2024
Valuation assumptions:
Expected dividend yield	—%	—%
Expected volatility	44.5%	44.4	%
Expected term (years)	3.04	3.04
Risk‑free interest rate	4.58%	3.86	%

At September 30, 2024, there was $214,976 of total unrecognized compensation cost, net of estimated forfeitures, related to unvested MSUs, PSUs and RSUs. That cost is expected to be recognized over a weighted average period of 1.8 years.

Balance Sheet Information (Tables)

3 Months Ended

Sep. 30, 2024

Balance Sheet Related Disclosures [Abstract]

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

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


Balance at June 30, 2024	$	2,375
Charged to expense	221
Write-offs	(297)
Balance at September 30, 2024	$	2,299

Schedule of capitalized internal-use software and accumulated amortization

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


	June 30, 2024		September 30, 2024
Capitalized internal-use software	$	324,269	$	343,566
Accumulated amortization	(207,857)		(221,634)
Capitalized internal-use software, net	$	116,412	$	121,932

Schedule of property and equipment, net

The major classes of property and equipment, net were as follows:


	June 30, 2024		September 30, 2024
Office equipment	$	2,771	$	2,774
Computer equipment	63,138		63,284
Furniture and fixtures	13,081		13,088
Software	13,102		12,972
Leasehold improvements	49,392		49,408
Time clocks rented by clients	9,738		10,029
Total	151,222		151,555
Accumulated depreciation	(90,582)		(93,610)
Property and equipment, net	$	60,640	$	57,945

Schedule of changes in goodwill

The following table summarizes changes in goodwill during the three months ended September 30, 2024:


Balance at June 30, 2024	$	108,937
Measurement period adjustments	(74)
Balance at September 30, 2024	$	108,863

Schedule of amortizable intangible assets and estimated useful lives

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


	June 30, 2024		September 30, 2024		Weighted average useful life (years)
Proprietary technology	$	47,329	$	47,329	5.9
Client relationships	22,200		22,200		7.8
Non-solicitation agreements	1,600		1,600		3.1
Trade names	1,640		1,640		5.0
Total	72,769		72,769
Accumulated amortization	(44,478)		(47,025)
Intangible assets, net	$	28,291	$	25,744

Schedule of future amortization expense for acquired intangible assets

Future amortization expense for acquired intangible assets as of September 30, 2024 is as follows:


Remainder of fiscal 2025	$	7,181
Fiscal 2026	8,109
Fiscal 2027	5,733
Fiscal 2028	3,869
Fiscal 2029	852

Total	$	25,744

Schedule of components of accrued expenses

The components of accrued expenses were as follows:


	June 30, 2024		September 30, 2024
Accrued payroll and personnel costs	$	93,248	$	76,368
Operating lease liabilities	7,634		7,669
Deferred revenue	25,949		27,422
Other	31,481		44,542
Total accrued expenses	$	158,311	$	156,001

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

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+ Details

Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash flows from operating activities:
Net income	$ 49,573	$ 34,517
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense	33,540	39,005
Depreciation and amortization expense	21,552	17,121
Deferred income tax expense (benefit)	(2,556)	5,391
Provision for credit losses	221	181
Net accretion of discounts on available-for-sale securities	(662)	(1,392)
Other	304	189
Changes in operating assets and liabilities:
Accounts receivable	(903)	(4,801)
Deferred contract costs	(13,081)	(14,985)
Prepaid expenses and other	(773)	(1,669)
Accounts payable	7,885	1,569
Accrued expenses and other	(3,645)	(12,984)
Net cash provided by operating activities	91,455	62,142
Cash flows from investing activities:
Purchases of available-for-sale securities	(20,174)	(92,567)
Proceeds from sales and maturities of available-for-sale securities	25,022	101,216
Capitalized internal-use software costs	(15,210)	(14,193)
Purchases of property and equipment	(2,328)	(3,454)
Other investing activities	(638)	(406)
Net cash used in investing activities	(13,328)	(9,404)
Cash flows from financing activities:
Net change in client fund obligations	(621,746)	(93,566)
Borrowings under credit facility	325,000	0
Taxes paid related to net share settlement of equity awards	(21,536)	(28,825)
Other financing activities	(11)	(11)
Net cash used in financing activities	(318,293)	(122,402)
Net change in cash, cash equivalents and funds held for clients' cash and cash equivalents	(240,166)	(69,664)
Cash, cash equivalents and funds held for clients' cash and cash equivalents—beginning of period	2,845,669	2,421,312
Cash, cash equivalents and funds held for clients' cash and cash equivalents—end of period	2,605,503	2,351,648
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Purchases of property and equipment and capitalized internal-use software, accrued but not paid	960	1,803
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	123	124
Cash paid for income taxes	6,194	6,207
Reconciliation of cash, cash equivalents and funds held for clients' cash and cash equivalents to the Consolidated Balance Sheets
Cash and cash equivalents	778,549	305,031
Funds held for clients' cash and cash equivalents	1,826,954	2,046,617
Total cash, cash equivalents and funds held for clients' cash and cash equivalents	$ 2,605,503	$ 2,351,648

Insider Trading Arrangements

3 Months Ended

Sep. 30, 2024

Trading Arrangements, by Individual

Material Terms of Trading Arrangement

During the three months ended September 30, 2024, the following officer adopted a “Rule 10b5-1 trading arrangement,” as defined in Item 408(a) of Regulation S-K intending to satisfy the affirmative defense of Rule 10b5-1(c):

Name and Title

Total Shares of Common Stock to be Sold (1) (2)

Duration (3)

Adoption Date

Expiration Date

Andrew Cappotelli

Senior Vice President
Operations

Up to 1,972

December 17, 2024 - June 20, 2025

September 17, 2024

June 20, 2025

(1) The number of shares to be sold is determined, in part, based on pricing triggers outlined in the adopting person's trading arrangement.

(2) Includes shares subject to certain outstanding equity awards with time-based vesting conditions. The actual number of shares that may be sold will be net of the number of shares withheld by the Company to satisfy tax withholding obligations arising from the vesting of such awards, which is not determinable at this time.

(3) The trading arrangement permits transactions through and including the earlier to occur of (a) the completion of all sales or (b) the expiration date listed in the table.

No directors or officers terminated a Rule 10b5-1 trading arrangement or entered into or terminated a “non-Rule 10b5-1 trading arrangement” as defined in Item 408(a) of Regulation S-K during the three months ended September 30, 2024.

Non-Rule 10b5-1 Arrangement Adopted

false

Rule 10b5-1 Arrangement Terminated

false

Non-Rule 10b5-1 Arrangement Terminated

false

Andrew Cappotelli [Member]

Trading Arrangements, by Individual

Name

Andrew Cappotelli

Title

Senior Vice President Operations

Rule 10b5-1 Arrangement Adopted

true

September 17, 2024

June 20, 2025

186 days

1,972

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, 2024	Sep. 30, 2023	Jun. 30, 2024
Activity in the allowance for credit losses
Beginning balance	$ 2,375
Charged to expense	221	$ 181
Write-offs	(297)
Ending balance	2,299
Capitalized internal-use software and accumulated amortization
Capitalized internal-use software	343,566		$ 324,269
Accumulated amortization	(221,634)		(207,857)
Capitalized internal-use software, net	121,932		116,412
Property and equipment, net
Property and equipment, gross	151,555		151,222
Accumulated depreciation	(93,610)		(90,582)
Property and equipment, net	57,945		60,640
Depreciation expense	5,228	5,050
Cost of revenues
Capitalized internal-use software and accumulated amortization
Amortization of capitalized internal-use software	13,777	$ 9,535
Office equipment
Property and equipment, net
Property and equipment, gross	2,774		2,771
Computer equipment
Property and equipment, net
Property and equipment, gross	63,284		63,138
Furniture and fixtures
Property and equipment, net
Property and equipment, gross	13,088		13,081
Software
Property and equipment, net
Property and equipment, gross	12,972		13,102
Leasehold improvements
Property and equipment, net
Property and equipment, gross	49,408		49,392
Time clocks rented by clients
Property and equipment, net
Property and equipment, gross	$ 10,029		$ 9,738

Net Income Per Share

3 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

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 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,
	2023		2024
Numerator:
Net income	$	34,517	$	49,573

Denominator:
Weighted-average shares used in computing net income per share:
Basic	56,037		55,640
Weighted-average effect of potentially dilutive shares:
Employee stock options, restricted stock units, performance stock units and market share units	844		626
Diluted	56,881		56,266

Net income per share:
Basic	$	0.62	$	0.89
Diluted	$	0.61	$	0.88

The following table summarizes the outstanding market share units, performance stock units and restricted stock units as of September 30, 2023 and 2024 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,
	2023	2024
Restricted stock units	72	13
Performance stock units	—	14
Market share units	10	23
Total	82	50

Stock-Based Compensation - General Information (Details) - Equity Incentive Plans shares in Thousands	Sep. 30, 2024 shares
Equity Incentive Plans
Number of shares of common stock reserved for future issuance (in shares)	1,432
Number of shares allocated but not yet issued that are subject to outstanding options or awards (in shares)	2,138

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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-Subparagraph (e)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(ii)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(iii)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(iv)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(v)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

+ Details

Debt	3 Months Ended
Debt	Sep. 30, 2024
Debt Disclosure [Abstract]
Debt	(8) Debt The Company maintains a 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 credit agreement provides for a senior secured revolving credit facility ("credit facility") with borrowing capacity up to $550,000, which may be increased up to $825,000, subject to obtaining additional lender commitments and certain approvals and satisfying other requirements. The credit facility is scheduled to expire in August 2027, and any borrowings outstanding will mature and be payable upon expiration. The Company had no outstanding borrowings under the credit facility at June 30, 2024. During the three months ended September 30, 2024, the Company borrowed $325,000 to fund the acquisition of Airbase Inc. in October 2024, which remained outstanding at September 30, 2024. Refer to Note 13 for further details on the Company's acquisition of Airbase Inc. 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. 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 Term Secured Overnight Financing Rate ("SOFR") rate plus the SOFR Adjustment or an adjusted base rate, in each case plus an applicable margin ranging from 0.875% to 1.500% and 0.0% to 0.500%, respectively, based on the then-applicable net total 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. 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, (with a step up to 4.50 to 1.00 for the 4 consecutive fiscal quarters following a fiscal quarter in which certain permitted acquisitions are consummated), and a minimum interest coverage ratio of not less than 2.00 to 1.00. As of September 30, 2024, 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://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/470/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482925/835-30-45-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1E

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

+ Details

Revenue - Deferred Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Changes in deferred revenue related to nonrefundable upfront fees
Beginning balance	$ 24,883	$ 22,617
Deferral of revenue	11,274	10,644
Revenue recognized	(10,760)	(9,121)
Ending balance	25,397	$ 24,140
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 2025	19,200
Deferred revenue from nonrefundable upfront fees expected to be recognized in fiscal 2026	5,697
Deferred revenue from nonrefundable upfront fees expected to be recognized in fiscal 2027 and thereafter	$ 500
Maximum
Revenue
Amortization period of nonrefundable upfront implementation fees	24 months

Stock-Based Compensation (Tables)

3 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

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


	Three Months Ended September 30,
	2023		2024
Cost of revenues	$	4,943	$	4,496
Sales and marketing	9,225		9,341
Research and development	9,758		9,493
General and administrative	15,079		10,210
Total stock-based compensation expense	$	39,005	$	33,540

Schedule of stock option activity

The table below presents stock option activity during the three months ended September 30, 2024:


	Outstanding Options
	Number of shares	Weighted average exercise price		Weighted average remaining contractual term (years)	Aggregate intrinsic value
Option balance at July 1, 2024	167	$	28.13	0.5	$	17,301
Options exercised	(114)	$	24.80
Option balance at September 30, 2024	53	$	35.28	0.9	$	6,874
Options vested and exercisable at September 30, 2024	53	$	35.28	0.9	$	6,874

Schedule of restricted stock unit activity

The following table represents restricted stock unit activity during the three months ended September 30, 2024:


	Units	Weighted average grant date fair value
RSU balance at July 1, 2024	1,290	$	214.98
RSUs granted	867	$	155.64
RSUs vested	(258)	$	206.40
RSUs forfeited	(48)	$	199.60
RSU balance at September 30, 2024	1,851	$	190.48

Schedule of market share unit activity

The following table represents market share unit activity during the three months ended September 30, 2024:


	Units	Weighted average grant date fair value
MSU balance at July 1, 2024	197	$	335.79
MSUs granted	28	$	211.45
MSUs vested	(15)	$	355.60
MSUs forfeited	(31)	$	345.51
MSU balance at September 30, 2024	179	$	312.96

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

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,
	2023	2024
Valuation assumptions:
Expected dividend yield	—%	—%
Expected volatility	44.5%	44.4	%
Expected term (years)	3.04	3.04
Risk‑free interest rate	4.58%	3.86	%

Revenue

3 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue

(3) Revenue

The Company derives substantially all of its revenue from contracts from 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 cloud-based payroll and HCM software solutions which includes payroll processing and related services such as payroll reporting and tax filing services, time and labor services, time clock rentals, and HR-related software solutions, including employee management and benefits enrollment and administration, substantially all of which are delivered on a monthly basis. Substantially all of the Company’s recurring fees are satisfied over time as services are provided. The performance obligations related to recurring services are generally satisfied monthly as services are provided, with fees charged and collected based on a per-employee-per-month fee. The Company has certain optional performance obligations that are satisfied at a point in time including the sales of time clocks and W-2 services. Implementation services and other 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 total revenues from contracts 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,
	2023		2024
Recurring fees	$	279,899	$	319,314
Implementation services and other	11,786		13,791
Total revenues from contracts	$	291,685	$	333,105

Deferred revenue

The timing of revenue recognition for recurring revenue is consistent with the timing of invoicing as they occur monthly as services are provided based on a per-employee-per-month fee. As such, the Company does not generally recognize contract assets or liabilities related to recurring revenue.

The Company defers and amortizes nonrefundable upfront fees related to implementation services 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,
	2023		2024
Balance at beginning of the period	$	22,617	$	24,883
Deferral of revenue	10,644		11,274
Revenue recognized	(9,121)		(10,760)
Balance at end of the period	$	24,140	$	25,397

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 $19,200 in fiscal 2025, $5,697 in fiscal 2026 and $500 in fiscal 2027 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, 2023
	Beginning Balance		Capitalized Costs		Amortization		Ending Balance
Costs to obtain a new contract	$	218,965	$	17,760	$	(12,316)	$	224,409
Costs to fulfill a contract	153,366		18,455		(8,004)		163,817
Total	$	372,331	$	36,215	$	(20,320)	$	388,226


	Three Months Ended September 30, 2024
	Beginning Balance		Capitalized Costs		Amortization		Ending Balance
Costs to obtain a new contract	$	250,136	$	19,412	$	(14,525)	$	255,023
Costs to fulfill a contract	195,726		19,667		(10,844)		204,549
Total	$	445,862	$	39,079	$	(25,369)	$	459,572

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 primarily recorded in Cost of revenues and Sales and marketing 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 $84,706 as of September 30, 2024, 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
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org/606/tableOfContent

+ Details

Stock-Based Compensation - RSU Activity (Details) - Restricted stock units shares in Thousands	3 Months Ended
	Sep. 30, 2024 $ / shares shares
Equity Incentive Plans
Vesting period	4 years
RSUs Outstanding, Units
Beginning balance (in shares) \| shares	1,290
RSUs granted (in shares) \| shares	867
RSUs vested (in shares) \| shares	258
RSUs forfeited (in shares) \| shares	(48)
Ending balance (in shares) \| shares	1,851
RSUs Outstanding, Weighted average grant date fair value
Beginning balance (in dollars per share) \| $ / shares	$ 214.98
RSUs granted (in dollars per share) \| $ / shares	155.64
RSUs vested (in dollars per share) \| $ / shares	206.40
RSUs forfeited (in dollars per share) \| $ / shares	199.60
Ending balance (in dollars per share) \| $ / shares	$ 190.48

Balance Sheet Information - Goodwill, Intangible Assets and Accrued Expenses (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Jun. 30, 2024
Changes in Goodwill
Beginning balance	$ 108,937
Measurement period adjustments	(74)
Ending balance	108,863
Amortizable intangible assets
Amortizable intangible assets, gross	72,769		$ 72,769
Accumulated amortization	(47,025)		(44,478)
Intangible assets, net	25,744		28,291
Amortization expense for acquired intangible assets	2,547	$ 2,536
Future amortization expense for acquired intangible assets
Remainder of fiscal 2025	7,181
Fiscal 2026	8,109
Fiscal 2027	5,733
Fiscal 2028	3,869
Fiscal 2029	852
Intangible assets, net	25,744		28,291
Components of accrued expenses
Accrued payroll and personnel costs	76,368		93,248
Operating lease liabilities	7,669		7,634
Deferred revenue	27,422		25,949
Other	44,542		31,481
Total accrued expenses	156,001		158,311
Proprietary technology
Amortizable intangible assets
Amortizable intangible assets, gross	$ 47,329		47,329
Weighted average useful life (years)	5 years 10 months 24 days
Client relationships
Amortizable intangible assets
Amortizable intangible assets, gross	$ 22,200		22,200
Weighted average useful life (years)	7 years 9 months 18 days
Non-solicitation agreements
Amortizable intangible assets
Amortizable intangible assets, gross	$ 1,600		1,600
Weighted average useful life (years)	3 years 1 month 6 days
Trade names
Amortizable intangible assets
Amortizable intangible assets, gross	$ 1,640		$ 1,640
Weighted average useful life (years)	5 years

Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Stock-Based Compensation
Stock-based compensation expense	$ 33,540	$ 39,005
Stock-based compensation expense capitalized in internal-use software costs	3,831	4,049
Unrecognized Stock-Based Compensation Costs Not Yet Recognized, Net of Estimated Forfeitures Related to Unvested RSUs, PSUs and MSUs
Total unrecognized compensation cost, net of estimated forfeitures	$ 214,976
Weighted average period to recognize unrecognized compensation cost (in years)	1 year 9 months 18 days
Cost of revenues
Stock-Based Compensation
Stock-based compensation expense	$ 4,496	4,943
Sales and marketing
Stock-Based Compensation
Stock-based compensation expense	9,341	9,225
Research and development
Stock-Based Compensation
Stock-based compensation expense	9,493	9,758
General and administrative
Stock-Based Compensation
Stock-based compensation expense	$ 10,210	$ 15,079

Net Income Per Share (Tables)

3 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Schedule of calculation of basic and diluted net income per share

The following table presents the calculation of basic and diluted net income per share:


	Three Months Ended September 30,
	2023		2024
Numerator:
Net income	$	34,517	$	49,573

Denominator:
Weighted-average shares used in computing net income per share:
Basic	56,037		55,640
Weighted-average effect of potentially dilutive shares:
Employee stock options, restricted stock units, performance stock units and market share units	844		626
Diluted	56,881		56,266

Net income per share:
Basic	$	0.62	$	0.89
Diluted	$	0.61	$	0.88

Summary of anti-dilutive securities


	Three Months Ended September 30,
	2023	2024
Restricted stock units	72	13
Performance stock units	—	14
Market share units	10	23
Total	82	50

Cash and Cash Equivalents and Funds Held for Clients

3 Months Ended

Sep. 30, 2024

Cash and Cash Equivalents and Funds Held for Clients [Abstract]

Cash and Cash Equivalents and Funds Held for Clients

(6) Cash and Cash Equivalents and Funds Held for Clients

Cash and cash equivalents and Funds held for clients consisted of the following:


	June 30, 2024
Type of Issue	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Cash and cash equivalents	$	401,811	$	—	$	—	$	401,811
Funds held for clients' cash and cash equivalents	2,443,858		—		—		2,443,858
Available-for-sale securities:

Corporate bonds	314,728		1,094		(1,002)		314,820
Asset-backed securities	40,653		147		(118)		40,682

U.S. treasury securities	124,889		36		(973)		123,952

Other	28,875		84		(211)		28,748
Total available-for-sale securities	509,145		1,361		(2,304)		508,202
Total investments	$	3,354,814	$	1,361	$	(2,304)	$	3,353,871


	September 30, 2024
Type of Issue	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Cash and cash equivalents	$	778,549	$	—	$	—	$	778,549
Funds held for clients' cash and cash equivalents	1,826,954		—		—		1,826,954
Available-for-sale securities:

Corporate bonds	327,555		7,817		(198)		335,174
Asset-backed securities	39,513		639		(35)		40,117
U.S. treasury securities	120,302		345		(198)		120,449
Other	17,589		214		(86)		17,717
Total available-for-sale securities	504,959		9,015		(517)		513,457
Total investments	$	3,110,462	$	9,015	$	(517)	$	3,118,960

All available-for-sale securities were included in Funds held for clients at June 30, 2024 and September 30, 2024.

Cash and cash equivalents and funds held for clients’ cash and cash equivalents included demand deposit accounts and money market funds at June 30, 2024 and September 30, 2024.

Classification of investments on the Unaudited Consolidated Balance Sheets was as follows:


	June 30, 2024		September 30, 2024
Cash and cash equivalents	$	401,811	$	778,549

Funds held for clients	2,952,060		2,340,411

Total investments	$	3,353,871	$	3,118,960

Available-for-sale securities that had been in an unrealized loss position for a period of less and greater than 12 months as of June 30, 2024 and September 30, 2024 had fair market value as follows:


	June 30, 2024
	Securities in an unrealized loss position for less than 12 months				Securities in an unrealized loss position for greater than 12 months				Total
	Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value

Corporate bonds	(488)		105,957		(514)		30,057		(1,002)		136,014
Asset-backed securities	(1)		1,069		(117)		8,335		(118)		9,404

U.S. treasury securities	(157)		44,712		(816)		72,224		(973)		116,936

Other	(12)		3,497		(199)		10,525		(211)		14,022
Total available-for-sale securities	$	(658)	$	155,235	$	(1,646)	$	121,141	$	(2,304)	$	276,376


	September 30, 2024
	Securities in an unrealized loss position for less than 12 months				Securities in an unrealized loss position for greater than 12 months				Total
	Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value

Corporate bonds	(3)		12,690		(195)		23,784		(198)		36,474
Asset-backed securities	—		—		(35)		6,732		(35)		6,732

U.S. treasury securities	(3)		4,563		(195)		48,322		(198)		52,885
Other	—		—		(86)		5,913		(86)		5,913
Total available-for-sale securities	$	(6)	$	17,253	$	(511)	$	84,751	$	(517)	$	102,004

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, 2023 or 2024. All securities in the Company’s portfolio held an A-1 rating or better as of September 30, 2024.

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, 2023 or 2024. There were no realized gains or losses on the sale of available-for-sale securities for the three months ended September 30, 2023 or 2024.

Expected maturities of available-for-sale securities at September 30, 2024 were as follows:


	Amortized cost		Fair value
One year or less	$	168,598	$	168,376
One year to two years	100,068		101,286
Two years to three years	51,108		52,492
Three years to five years	185,185		191,303
Total available-for-sale securities	$	504,959	$	513,457

Revenue - Deferred Contract Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Deferred contract costs
Amortization period of capitalized contract costs	7 years
Beginning Balance	$ 445,862	$ 372,331
Capitalized Costs	39,079	36,215
Amortization	(25,369)	(20,320)
Ending Balance	459,572	388,226
Costs to obtain a new contract
Deferred contract costs
Beginning Balance	250,136	218,965
Capitalized Costs	19,412	17,760
Amortization	(14,525)	(12,316)
Ending Balance	255,023	224,409
Costs to fulfill a contract
Deferred contract costs
Beginning Balance	195,726	153,366
Capitalized Costs	19,667	18,455
Amortization	(10,844)	(8,004)
Ending Balance	$ 204,549	$ 163,817

Income Taxes (Details)	3 Months Ended
Income Taxes (Details)	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Effective tax rate for the period (as a percent)	28.00%	22.30%
U.S. federal income tax rate (as a percent)	21.00%	21.00%

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2024
Accounting Policies [Abstract]
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 the three months ended September 30, 2024 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, 2024 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 In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). ASU 2023-07 primarily requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker along with other incremental segment information. The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements. The Company continues to evaluate the impact of this ASU on its consolidated financial statement disclosures including the timing of adoption. In December 2023, the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosure ("ASU 2023-09"). ASU 2023-09 mostly requires, on an annual basis, disclosure of specific categories in an entity's effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. The incremental disclosures may be presented on a prospective or retrospective basis. The ASU is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The Company continues to evaluate the impact of this ASU on its consolidated financial statement disclosures including the method and timing of adoption. From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of other recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption.

- Definition

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

+ References + Details

Unaudited Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2024	Jun. 30, 2024
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000	5,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	155,000	155,000
Common stock, shares issued (in shares)	55,738	55,514
Common stock, shares outstanding (in shares)	55,738	55,514

Unaudited Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Revenues:
Recurring and other revenue	$ 333,105	$ 291,685
Interest income on funds held for clients	29,851	25,901
Total revenues	362,956	317,586
Cost of revenues	114,960	101,467
Gross profit	247,996	216,119
Operating expenses:
Sales and marketing	88,431	80,403
Research and development	47,260	44,605
General and administrative	48,161	49,922
Total operating expenses	183,852	174,930
Operating income	64,144	41,189
Other income	4,742	3,225
Income before income taxes	68,886	44,414
Income tax expense	19,313	9,897
Net income	49,573	34,517
Other comprehensive income, net of tax	6,811	120
Comprehensive income	$ 56,384	$ 34,637
Net income per share:
Basic (in dollars per share)	$ 0.89	$ 0.62
Diluted (in dollars per share)	$ 0.88	$ 0.61
Weighted-average shares used in computing net income per share:
Basic (in shares)	55,640	56,037
Diluted (in shares)	56,266	56,881

Stock-Based Compensation - MSU Information (Details) - Market share units	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Valuation assumptions:
Expected dividend yield	0.00%	0.00%
Expected volatility	44.40%	44.50%
Expected term (years)	3 years 14 days	3 years 14 days
Risk‑free interest rate	3.86%	4.58%

Revenue - Remaining Performance Obligations (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Remaining Performance Obligations
Minimum value of unsatisfied performance obligations on term-based contracts	$ 84,706
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01
Remaining Performance Obligations
Remaining performance obligation period	24 months

Cash and Cash Equivalents and Funds Held For Clients - Classification (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Jun. 30, 2024
Cash and Cash Equivalents and Funds Held for Clients
Cash and cash equivalents	$ 778,549	$ 305,031	$ 401,811
Funds held for clients	2,340,411		2,952,060
Total investments	3,118,960		3,353,871
Gross unrealized losses on available-for-sale securities in unrealized loss positions for less than 12 months	(6)		(658)
Fair value of available-for-sale securities in unrealized loss positions for less than 12 months	17,253		155,235
Gross unrealized losses on available-for-sale securities in unrealized loss positions for greater than 12 months	(511)		(1,646)
Fair value of available-for-sale securities in unrealized loss positions for greater than 12 months	84,751		121,141
Gross unrealized losses on available-for-sale securities in unrealized loss positions	(517)		(2,304)
Fair value of available-for-sale securities in unrealized loss positions	102,004		276,376
Credit impairment losses	0	0
Realized gains or losses	0	$ 0
Corporate bonds
Cash and Cash Equivalents and Funds Held for Clients
Gross unrealized losses on available-for-sale securities in unrealized loss positions for less than 12 months	(3)		(488)
Fair value of available-for-sale securities in unrealized loss positions for less than 12 months	12,690		105,957
Gross unrealized losses on available-for-sale securities in unrealized loss positions for greater than 12 months	(195)		(514)
Fair value of available-for-sale securities in unrealized loss positions for greater than 12 months	23,784		30,057
Gross unrealized losses on available-for-sale securities in unrealized loss positions	(198)		(1,002)
Fair value of available-for-sale securities in unrealized loss positions	36,474		136,014
Asset-backed securities
Cash and Cash Equivalents and Funds Held for Clients
Gross unrealized losses on available-for-sale securities in unrealized loss positions for less than 12 months	0		(1)
Fair value of available-for-sale securities in unrealized loss positions for less than 12 months	0		1,069
Gross unrealized losses on available-for-sale securities in unrealized loss positions for greater than 12 months	(35)		(117)
Fair value of available-for-sale securities in unrealized loss positions for greater than 12 months	6,732		8,335
Gross unrealized losses on available-for-sale securities in unrealized loss positions	(35)		(118)
Fair value of available-for-sale securities in unrealized loss positions	6,732		9,404
U.S. treasury securities
Cash and Cash Equivalents and Funds Held for Clients
Gross unrealized losses on available-for-sale securities in unrealized loss positions for less than 12 months	(3)		(157)
Fair value of available-for-sale securities in unrealized loss positions for less than 12 months	4,563		44,712
Gross unrealized losses on available-for-sale securities in unrealized loss positions for greater than 12 months	(195)		(816)
Fair value of available-for-sale securities in unrealized loss positions for greater than 12 months	48,322		72,224
Gross unrealized losses on available-for-sale securities in unrealized loss positions	(198)		(973)
Fair value of available-for-sale securities in unrealized loss positions	52,885		116,936
Other
Cash and Cash Equivalents and Funds Held for Clients
Gross unrealized losses on available-for-sale securities in unrealized loss positions for less than 12 months	0		(12)
Fair value of available-for-sale securities in unrealized loss positions for less than 12 months	0		3,497
Gross unrealized losses on available-for-sale securities in unrealized loss positions for greater than 12 months	(86)		(199)
Fair value of available-for-sale securities in unrealized loss positions for greater than 12 months	5,913		10,525
Gross unrealized losses on available-for-sale securities in unrealized loss positions	(86)		(211)
Fair value of available-for-sale securities in unrealized loss positions	$ 5,913		$ 14,022

Subsequent Events (Details) $ in Thousands	Oct. 01, 2024 USD ($)
Subsequent Event \| Airbase Inc.
Subsequent Event [Line Items]
Cash consideration transferred in business combination, net of cash acquired and preliminary purchase price adjustments	$ 321,889

Cover Page - shares	3 Months Ended
Cover Page - shares	Sep. 30, 2024	Oct. 24, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
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		55,746,768
Entity Central Index Key	0001591698
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2025
Document Fiscal Period Focus	Q1
Amendment Flag	false

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net income	$ 49,573	$ 34,517

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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Reference 26: http://www.xbrl.org/2003/role/disclosureRef
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Reference 27: http://www.xbrl.org/2003/role/disclosureRef
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Reference 28: http://www.xbrl.org/2003/role/disclosureRef
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Reference 29: http://www.xbrl.org/2003/role/disclosureRef
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Reference 30: http://www.xbrl.org/2003/role/disclosureRef
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Reference 31: http://www.xbrl.org/2003/role/disclosureRef
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Reference 32: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Litigation	3 Months Ended
Litigation	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
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. On September 11, 2023, a second potential class action complaint was filed against the Company with the Circuit Court of Cook County that alleges violations of the Illinois Biometric Information Privacy Act that overlap with claims in the first action. The Company is unable to estimate any reasonably possible loss, or range of loss, with respect to these matters at this time. The Company intends to vigorously defend against these lawsuits. 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 of these matters that are 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.

Revenue (Tables)

3 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of disaggregation of revenue


	Three Months Ended September 30,
	2023		2024
Recurring fees	$	279,899	$	319,314
Implementation services and other	11,786		13,791
Total revenues from contracts	$	291,685	$	333,105

Schedule of changes in deferred revenue related to nonrefundable upfront fees

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,
	2023		2024
Balance at beginning of the period	$	22,617	$	24,883
Deferral of revenue	10,644		11,274
Revenue recognized	(9,121)		(10,760)
Balance at end of the period	$	24,140	$	25,397

Schedule of deferred contract costs and the related amortization expense

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


	Three Months Ended September 30, 2023
	Beginning Balance		Capitalized Costs		Amortization		Ending Balance
Costs to obtain a new contract	$	218,965	$	17,760	$	(12,316)	$	224,409
Costs to fulfill a contract	153,366		18,455		(8,004)		163,817
Total	$	372,331	$	36,215	$	(20,320)	$	388,226


	Three Months Ended September 30, 2024
	Beginning Balance		Capitalized Costs		Amortization		Ending Balance
Costs to obtain a new contract	$	250,136	$	19,412	$	(14,525)	$	255,023
Costs to fulfill a contract	195,726		19,667		(10,844)		204,549
Total	$	445,862	$	39,079	$	(25,369)	$	459,572

Organization and Description of Business	3 Months Ended
Organization and Description of Business	Sep. 30, 2024
Organization and Description of Business [Abstract]
Organization and Description of Business	(1) Organization and Description of Business Paylocity Holding Corporation (the “Company”) is a cloud-based provider of human capital management and payroll software solutions that deliver a comprehensive platform for the modern workforce. Services are provided in a Software-as-a-Service (“SaaS”) delivery model. The Company’s comprehensive product suite delivers a unified platform that helps businesses attract and retain talent, build culture and connection with their employees, and streamline and automate HR and payroll processes.

Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Numerator:
Net income	$ 49,573	$ 34,517
Weighted-average shares used in computing net income per share:
Basic (in shares)	55,640	56,037
Weighted-average effect of potentially dilutive shares:
Employee stock options, restricted stock units, performance stock units and market share units (in shares)	626	844
Diluted (in shares)	56,266	56,881
Net income per share:
Basic (in dollars per share)	$ 0.89	$ 0.62
Diluted (in dollars per share)	$ 0.88	$ 0.61
Anti-dilutive securities excluded (in shares)	50	82
Restricted stock units
Net income per share:
Anti-dilutive securities excluded (in shares)	13	72
Performance stock units
Net income per share:
Anti-dilutive securities excluded (in shares)	14	0
Market share units
Net income per share:
Anti-dilutive securities excluded (in shares)	23	10

Stock-Based Compensation - PSU Activity (Details) - Performance stock units shares in Thousands	3 Months Ended
	Sep. 30, 2024 $ / shares shares
Equity Incentive Plans
PSU performance measurement period	1 year
Vesting period	3 years
Maximum percentage of target number of shares subject to each PSU	200.00%
Awards Outstanding, Units
Awards granted (in shares) \| shares	55
Ending balance (in shares) \| shares	55
Awards Outstanding, Weighted average grant date fair value
Awards granted (in dollars per share) \| $ / shares	$ 155.95
Ending balance (in dollars per share) \| $ / shares	$ 155.95

Cash and Cash Equivalents and Funds Held For Clients - Reconciliation (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024	Sep. 30, 2023
Cash and Cash Equivalents and Funds Held for Clients
Amortized cost of cash and cash equivalents	$ 778,549	$ 401,811
Gross unrealized gains on cash and cash equivalents	0	0
Gross unrealized losses on cash and cash equivalents	0	0
Fair value of cash and cash equivalents	778,549	401,811	$ 305,031
Amortized cost of funds held for clients' cash and cash equivalents	1,826,954	2,443,858
Gross unrealized gains on funds held for clients' cash and cash equivalents	0	0
Gross unrealized losses on funds held for clients' cash and cash equivalents	0	0
Fair value of funds held for clients' cash and cash equivalents	1,826,954	2,443,858	$ 2,046,617
Available-for-sale securities:
Amortized cost	504,959	509,145
Gross unrealized gains	9,015	1,361
Gross unrealized losses	(517)	(2,304)
Fair value	513,457	508,202
Total investments at amortized cost	3,110,462	3,354,814
Total investments gross unrealized gains	9,015	1,361
Total investments gross unrealized losses	(517)	(2,304)
Total investments	3,118,960	3,353,871
Corporate bonds
Available-for-sale securities:
Amortized cost	327,555	314,728
Gross unrealized gains	7,817	1,094
Gross unrealized losses	(198)	(1,002)
Fair value	335,174	314,820
Asset-backed securities
Available-for-sale securities:
Amortized cost	39,513	40,653
Gross unrealized gains	639	147
Gross unrealized losses	(35)	(118)
Fair value	40,117	40,682
U.S. treasury securities
Available-for-sale securities:
Amortized cost	120,302	124,889
Gross unrealized gains	345	36
Gross unrealized losses	(198)	(973)
Fair value	120,449	123,952
Other
Available-for-sale securities:
Amortized cost	17,589	28,875
Gross unrealized gains	214	84
Gross unrealized losses	(86)	(211)
Fair value	$ 17,717	$ 28,748

Business Combination (Details) - USD ($) $ in Thousands	Nov. 30, 2023	Sep. 30, 2024	Jun. 30, 2024
Business Combination
Goodwill		$ 108,863	$ 108,937
TraceHQ.com, Inc.
Business Combination
Consideration transferred	$ 12,086
Goodwill	6,809
TraceHQ.com, Inc. \| Proprietary technology
Business Combination
Proprietary technology	$ 4,200

- Definition

Amount, after accumulated impairment loss, of asset representing future economic benefit arising from other asset acquired in business combination or from joint venture formation or both, that is not individually identified and separately recognized.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 49
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482785/280-10-55-49

Reference 2: http://www.xbrl.org/2003/role/exampleRef
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org/1943274/2147482548/350-20-55-24

Reference 3: http://www.xbrl.org/2003/role/exampleRef
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Reference 4: http://www.xbrl.org/2003/role/exampleRef
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-URI https://asc.fasb.org/1943274/2147481372/852-10-55-10

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
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-Name Accounting Standards Codification
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-Subparagraph (SX 210.9-03(10)(1))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478546/942-210-S99-1

+ Details

Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024
Current assets:
Cash and cash equivalents	$ 778,549	$ 401,811
Accounts receivable, net	34,317	32,997
Deferred contract costs	102,413	97,859
Prepaid expenses and other	40,583	39,765
Total current assets before funds held for clients	955,862	572,432
Funds held for clients	2,340,411	2,952,060
Total current assets	3,296,273	3,524,492
Capitalized internal-use software, net	121,932	116,412
Property and equipment, net	57,945	60,640
Operating lease right-of-use assets	33,190	33,792
Intangible assets, net	25,744	28,291
Goodwill	108,863	108,937
Long-term deferred contract costs	357,159	348,003
Long‑term prepaid expenses and other	6,508	7,077
Deferred income tax assets	17,167	17,816
Total assets	4,024,781	4,245,460
Current liabilities:
Accounts payable	16,039	8,638
Accrued expenses	156,001	158,311
Total current liabilities before client fund obligations	172,040	166,949
Client fund obligations	2,328,665	2,950,411
Total current liabilities	2,500,705	3,117,360
Long-term debt	325,000	0
Long-term operating lease liabilities	45,661	46,814
Other long-term liabilities	6,493	6,398
Deferred income tax liabilities	41,010	41,824
Total liabilities	2,918,869	3,212,396
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000 authorized, no shares issued and outstanding at June 30, 2024 and September 30, 2024	0	0
Common stock, $0.001 par value, 155,000 shares authorized at June 30, 2024 and September 30, 2024; 55,514 shares issued and outstanding at June 30, 2024 and 55,738 shares issued and outstanding at September 30, 2024	56	56
Additional paid-in capital	376,952	360,488
Retained earnings	723,029	673,456
Accumulated other comprehensive income (loss)	5,875	(936)
Total stockholders' equity	1,105,912	1,033,064
Total liabilities and stockholders’ equity	$ 4,024,781	$ 4,245,460

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, 2024	Sep. 30, 2023	Jun. 30, 2024
Options Outstanding, Number of Shares
Beginning balance (in shares)	167
Options granted (in shares)	0
Options exercised (in shares)	(114)
Ending balance (in shares)	53		167
Options Outstanding, Weighted average exercise price
Beginning balance (in dollars per share)	$ 28.13
Options exercised (in dollars per share)	24.80
Ending balance (in dollars per share)	$ 35.28		$ 28.13
Options Additional Disclosures
Weighted average remaining contractual term (years)	10 months 24 days		6 months
Weighted average remaining contractual term of options vested and exercisable at the end of the period (years)	10 months 24 days
Aggregate intrinsic value at the beginning of the period	$ 17,301
Aggregate intrinsic value at the end of the period	$ 6,874		$ 17,301
Options vested and exercisable at the end of the period (in shares)	53
Options vested and exercisable at the end of the period, weighted average exercise price (in dollars per share)	$ 35.28
Options vested and exercisable, aggregate intrinsic value	$ 6,874
Total intrinsic value of options exercised	$ 13,497	$ 2,494

Cash and Cash Equivalents and Funds Held For Clients - Maturities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024
Expected maturities of available-for-sale securities, amortized cost
One year or less	$ 168,598
One year to two years	100,068
Two years to three years	51,108
Three years to five years	185,185
Total available-for-sale securities	504,959	$ 509,145
Expected maturities of available-for-sale securities, fair value
One year or less	168,376
One year to two years	101,286
Two years to three years	52,492
Three years to five years	191,303
Total available-for-sale securities	$ 513,457	$ 508,202

Stock-Based Compensation - MSU Activity (Details) - Market share units shares in Thousands	3 Months Ended
	Sep. 30, 2024 $ / shares shares
Equity Incentive Plans
Vesting period	3 years
Maximum percentage of target number of shares subject to each MSU	200.00%
Awards Outstanding, Units
Beginning balance (in shares) \| shares	197
Awards granted (in shares) \| shares	28
Awards vested (in shares) \| shares	(15)
Awards forfeited (in shares) \| shares	(31)
Ending balance (in shares) \| shares	179
Awards Outstanding, Weighted average grant date fair value
Beginning balance (in dollars per share) \| $ / shares	$ 335.79
Awards granted (in dollars per share) \| $ / shares	211.45
Awards vested (in dollars per share) \| $ / shares	355.60
Awards forfeited (in dollars per share) \| $ / shares	345.51
Ending balance (in dollars per share) \| $ / shares	$ 312.96

Fair Value Measurement

3 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

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 cash and cash equivalents, funds held for clients' 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, 2024 and September 30, 2024 based upon the short-term nature of these assets and liabilities.

Marketable securities classified as available-for-sale are recorded at fair value on a recurring basis using Level 2 inputs obtained from an independent pricing service. Available-for-sale securities may include commercial paper, corporate bonds, asset-backed securities, certificates of deposit, U.S. treasury securities, and other 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, 2024 or September 30, 2024.

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


	June 30, 2024
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	401,811	$	401,811	$	—	$	—
Funds held for clients' cash and cash equivalents	2,443,858		2,443,858		—		—
Available-for-sale securities:

Corporate bonds	314,820		—		314,820		—
Asset-backed securities	40,682		—		40,682		—

U.S. treasury securities	123,952		—		123,952		—

Other	28,748		—		28,748		—
Total available-for-sale securities	508,202		—		508,202		—
Total investments	$	3,353,871	$	2,845,669	$	508,202	$	—


	September 30, 2024
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	778,549	$	778,549	$	—	$	—
Funds held for clients' cash and cash equivalents	1,826,954		1,826,954		—		—
Available-for-sale securities:

Corporate bonds	335,174		—		335,174		—
Asset-backed securities	40,117		—		40,117		—
U.S. treasury securities	120,449		—		120,449		—
Other	17,717		—		17,717		—
Total available-for-sale securities	513,457		—		513,457		—
Total investments	$	3,118,960	$	2,605,503	$	513,457	$	—

Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis

The Company records assets acquired and liabilities assumed in business combinations at fair value. Refer to Note 4 for further details on the fair value measurements of certain assets and liabilities recorded at fair value on a non-recurring basis.

- 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

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 107
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-107

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org/1943274/2147482078/820-10-55-100

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 940
-SubTopic 820
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

Fair Value Measurement (Tables)

3 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

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

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


	June 30, 2024
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	401,811	$	401,811	$	—	$	—
Funds held for clients' cash and cash equivalents	2,443,858		2,443,858		—		—
Available-for-sale securities:

Corporate bonds	314,820		—		314,820		—
Asset-backed securities	40,682		—		40,682		—

U.S. treasury securities	123,952		—		123,952		—

Other	28,748		—		28,748		—
Total available-for-sale securities	508,202		—		508,202		—
Total investments	$	3,353,871	$	2,845,669	$	508,202	$	—


	September 30, 2024
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	778,549	$	778,549	$	—	$	—
Funds held for clients' cash and cash equivalents	1,826,954		1,826,954		—		—
Available-for-sale securities:

Corporate bonds	335,174		—		335,174		—
Asset-backed securities	40,117		—		40,117		—
U.S. treasury securities	120,449		—		120,449		—
Other	17,717		—		17,717		—
Total available-for-sale securities	513,457		—		513,457		—
Total investments	$	3,118,960	$	2,605,503	$	513,457	$	—

Fair Value Measurement (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024	Sep. 30, 2023
Fair value measurement
Cash and cash equivalents	$ 778,549	$ 401,811	$ 305,031
Funds held for clients' cash and cash equivalents	1,826,954	2,443,858	$ 2,046,617
Available-for-sale securities:
Total available-for-sale securities	513,457	508,202
Total investments	3,118,960	3,353,871
Level 1
Fair value measurement
Cash and cash equivalents	778,549	401,811
Funds held for clients' cash and cash equivalents	1,826,954	2,443,858
Available-for-sale securities:
Total available-for-sale securities	0	0
Total investments	2,605,503	2,845,669
Level 2
Fair value measurement
Cash and cash equivalents	0	0
Funds held for clients' cash and cash equivalents	0	0
Available-for-sale securities:
Total available-for-sale securities	513,457	508,202
Total investments	513,457	508,202
Level 3
Fair value measurement
Cash and cash equivalents	0	0
Funds held for clients' cash and cash equivalents	0	0
Available-for-sale securities:
Total available-for-sale securities	0	0
Total investments	0	0
Corporate bonds
Available-for-sale securities:
Total available-for-sale securities	335,174	314,820
Corporate bonds \| Level 1
Available-for-sale securities:
Total available-for-sale securities	0	0
Corporate bonds \| Level 2
Available-for-sale securities:
Total available-for-sale securities	335,174	314,820
Corporate bonds \| Level 3
Available-for-sale securities:
Total available-for-sale securities	0	0
Asset-backed securities
Available-for-sale securities:
Total available-for-sale securities	40,117	40,682
Asset-backed securities \| Level 1
Available-for-sale securities:
Total available-for-sale securities	0	0
Asset-backed securities \| Level 2
Available-for-sale securities:
Total available-for-sale securities	40,117	40,682
Asset-backed securities \| Level 3
Available-for-sale securities:
Total available-for-sale securities	0	0
U.S. treasury securities
Available-for-sale securities:
Total available-for-sale securities	120,449	123,952
U.S. treasury securities \| Level 1
Available-for-sale securities:
Total available-for-sale securities	0	0
U.S. treasury securities \| Level 2
Available-for-sale securities:
Total available-for-sale securities	120,449	123,952
U.S. treasury securities \| Level 3
Available-for-sale securities:
Total available-for-sale securities	0	0
Other
Available-for-sale securities:
Total available-for-sale securities	17,717	28,748
Other \| Level 1
Available-for-sale securities:
Total available-for-sale securities	0	0
Other \| Level 2
Available-for-sale securities:
Total available-for-sale securities	17,717	28,748
Other \| Level 3
Available-for-sale securities:
Total available-for-sale securities	$ 0	$ 0

Debt (Details) - USD ($) $ in Thousands		3 Months Ended
Debt (Details) - USD ($) $ in Thousands	Aug. 31, 2022	Sep. 30, 2024	Sep. 30, 2023	Jun. 30, 2024
Debt
Outstanding borrowings under credit facility		$ 325,000		$ 0
Borrowings under credit facility		325,000	$ 0
Five-year revolving credit agreement \| Senior secured debt
Debt
Maximum borrowing capacity	$ 550,000
Maximum borrowing capacity, subject to additional lender commitments and satisfaction of other requirements	$ 825,000
Outstanding borrowings under credit facility				$ 0
Borrowings under credit facility		$ 325,000
Five-year revolving credit agreement \| Senior secured debt \| Minimum
Debt
Interest coverage ratio	2.00
Five-year revolving credit agreement \| Senior secured debt \| Maximum
Debt
Net total leverage ratio	4.00
Net total leverage ratio with step-up	4.50
Five-year revolving credit agreement \| Senior secured debt \| SOFR \| Minimum
Debt
Margin on base rate	0.875%
Five-year revolving credit agreement \| Senior secured debt \| SOFR \| Maximum
Debt
Margin on base rate	1.50%
Five-year revolving credit agreement \| Senior secured debt \| Adjusted base rate \| Minimum
Debt
Margin on base rate	0.00%
Five-year revolving credit agreement \| Senior secured debt \| Adjusted base rate \| Maximum
Debt
Margin on base rate	0.50%

Summary of Significant Accounting Policies	3 Months Ended
Summary of Significant Accounting Policies	Sep. 30, 2024
Accounting Policies [Abstract]
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 the three months ended September 30, 2024 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, 2024 included in the Company’s Annual Report on Form 10-K. (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. (d) Recently Issued Accounting Standards In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). ASU 2023-07 primarily requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker along with other incremental segment information. The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements. The Company continues to evaluate the impact of this ASU on its consolidated financial statement disclosures including the timing of adoption. In December 2023, the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosure ("ASU 2023-09"). ASU 2023-09 mostly requires, on an annual basis, disclosure of specific categories in an entity's effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. The incremental disclosures may be presented on a prospective or retrospective basis. The ASU is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The Company continues to evaluate the impact of this ASU on its consolidated financial statement disclosures including the method and timing of adoption. From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of other recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption.

Cash and Cash Equivalents and Funds Held For Clients (Tables)

3 Months Ended

Sep. 30, 2024

Cash and Cash Equivalents and Funds Held for Clients [Abstract]

Schedule of cash and cash equivalents and funds held for clients

Cash and cash equivalents and Funds held for clients consisted of the following:


	June 30, 2024
Type of Issue	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Cash and cash equivalents	$	401,811	$	—	$	—	$	401,811
Funds held for clients' cash and cash equivalents	2,443,858		—		—		2,443,858
Available-for-sale securities:

Corporate bonds	314,728		1,094		(1,002)		314,820
Asset-backed securities	40,653		147		(118)		40,682

U.S. treasury securities	124,889		36		(973)		123,952

Other	28,875		84		(211)		28,748
Total available-for-sale securities	509,145		1,361		(2,304)		508,202
Total investments	$	3,354,814	$	1,361	$	(2,304)	$	3,353,871


	September 30, 2024
Type of Issue	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Cash and cash equivalents	$	778,549	$	—	$	—	$	778,549
Funds held for clients' cash and cash equivalents	1,826,954		—		—		1,826,954
Available-for-sale securities:

Corporate bonds	327,555		7,817		(198)		335,174
Asset-backed securities	39,513		639		(35)		40,117
U.S. treasury securities	120,302		345		(198)		120,449
Other	17,589		214		(86)		17,717
Total available-for-sale securities	504,959		9,015		(517)		513,457
Total investments	$	3,110,462	$	9,015	$	(517)	$	3,118,960

Schedule of the classification of investments

Classification of investments on the Unaudited Consolidated Balance Sheets was as follows:


	June 30, 2024		September 30, 2024
Cash and cash equivalents	$	401,811	$	778,549

Funds held for clients	2,952,060		2,340,411

Total investments	$	3,353,871	$	3,118,960

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

Available-for-sale securities that had been in an unrealized loss position for a period of less and greater than 12 months as of June 30, 2024 and September 30, 2024 had fair market value as follows:


	June 30, 2024
	Securities in an unrealized loss position for less than 12 months				Securities in an unrealized loss position for greater than 12 months				Total
	Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value

Corporate bonds	(488)		105,957		(514)		30,057		(1,002)		136,014
Asset-backed securities	(1)		1,069		(117)		8,335		(118)		9,404

U.S. treasury securities	(157)		44,712		(816)		72,224		(973)		116,936

Other	(12)		3,497		(199)		10,525		(211)		14,022
Total available-for-sale securities	$	(658)	$	155,235	$	(1,646)	$	121,141	$	(2,304)	$	276,376


	September 30, 2024
	Securities in an unrealized loss position for less than 12 months				Securities in an unrealized loss position for greater than 12 months				Total
	Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value

Corporate bonds	(3)		12,690		(195)		23,784		(198)		36,474
Asset-backed securities	—		—		(35)		6,732		(35)		6,732

U.S. treasury securities	(3)		4,563		(195)		48,322		(198)		52,885
Other	—		—		(86)		5,913		(86)		5,913
Total available-for-sale securities	$	(6)	$	17,253	$	(511)	$	84,751	$	(517)	$	102,004

Schedule of expected maturities of available-for-sale securities

Expected maturities of available-for-sale securities at September 30, 2024 were as follows:


	Amortized cost		Fair value
One year or less	$	168,598	$	168,376
One year to two years	100,068		101,286
Two years to three years	51,108		52,492
Three years to five years	185,185		191,303
Total available-for-sale securities	$	504,959	$	513,457

Subsequent Events	3 Months Ended
Subsequent Events	Sep. 30, 2024
Subsequent Events [Abstract]
Subsequent Events	(13) Subsequent Events On October 1, 2024, the Company acquired all of the outstanding shares of Airbase Inc. ("Airbase") for cash consideration of $321,889, net of cash acquired and other preliminary purchase price adjustments, which was funded by borrowings under its credit facility. Refer to Note 8 for more information on the credit facility. Airbase is a modern finance and spend management software solution that combines bill pay/accounts payable automation, expense management, corporate cards and procurement capabilities. This acquisition will enable the Company to provide a comprehensive solution and modern client experience for managing payroll and non-payroll spend on a single integrated platform. Due to the timing of this acquisition, the Company is in the process of evaluating its impact on the consolidated financial statements. This acquisition will be accounted for as a business combination in accordance with ASC 805: Business Combinations using the acquisition method of accounting, and the Company will recognize assets and liabilities at fair value as of the date of acquisition.

Revenue - Disaggregation (Details) - USD ($) $ in Thousands	3 Months Ended
Revenue - Disaggregation (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Revenue
Period of term arrangements not cancellable by client	2 years
Disaggregation of revenue
Total revenues from contracts	$ 333,105	$ 291,685
Maximum
Revenue
Period of notice to cancel by client	60 days
Recurring fees
Disaggregation of revenue
Total revenues from contracts	$ 319,314	279,899
Implementation services and other
Disaggregation of revenue
Total revenues from contracts	$ 13,791	$ 11,786

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- 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
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-41

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 270
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482964/270-10-50-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (ee)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-32

Reference 4: http://fasb.org/us-gaap/role/ref/otherTransitionRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-32

Reference 5: http://fasb.org/us-gaap/role/ref/otherTransitionRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-32

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479941/924-10-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-5

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-30

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-42

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-22

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-40

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-22

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-4

+ Details

Unaudited Consolidated Statement of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at Jun. 30, 2023		55,912
Beginning balance at Jun. 30, 2023	$ 842,863	$ 56	$ 380,632	$ 466,690	$ (4,515)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation	43,964		43,964
Stock options exercised (in shares)		14
Stock options exercised	223		223
Issuance of common stock upon vesting of equity awards (in shares)		387
Net settlement for taxes and/or exercise price related to equity awards (in shares)		(146)
Net settlement for taxes and/or exercise price related to equity awards	(29,048)		(29,048)
Unrealized gains on securities, net of tax	120				120
Net income	34,517			34,517
Ending balance (in shares) at Sep. 30, 2023		56,167
Ending balance at Sep. 30, 2023	$ 892,639	$ 56	395,771	501,207	(4,395)
Beginning balance (in shares) at Jun. 30, 2024	55,514	55,514
Beginning balance at Jun. 30, 2024	$ 1,033,064	$ 56	360,488	673,456	(936)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation	38,000		38,000
Stock options exercised (in shares)		114
Stock options exercised	2,822		2,822
Issuance of common stock upon vesting of equity awards (in shares)		273
Net settlement for taxes and/or exercise price related to equity awards (in shares)		(163)
Net settlement for taxes and/or exercise price related to equity awards	(24,358)		(24,358)
Unrealized gains on securities, net of tax	6,811				6,811
Net income	$ 49,573			49,573
Ending balance (in shares) at Sep. 30, 2024	55,738	55,738
Ending balance at Sep. 30, 2024	$ 1,105,912	$ 56	$ 376,952	$ 723,029	$ 5,875

Business Combination	3 Months Ended
Business Combination	Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]
Business Combination	(4) Business Combination On November 30, 2023, the Company acquired all of the outstanding shares of TraceHQ.com, Inc. ("Trace") through a merger of Trace with a subsidiary of the Company for cash consideration of $12,086, subject to working capital and other customary purchase price adjustments. Trace offers a headcount planning solution that expands the Company's product functionality in this area. The allocation of the purchase price for Trace was approximately $6,809 of goodwill, $4,200 of proprietary technology and other immaterial assets and liabilities which reflects certain immaterial measurement period adjustments recorded during the three months ended September 30, 2024. The Company accounted for this transaction as a business combination and recorded the assets acquired and liabilities assumed at their respective estimated fair values as of the date of the acquisition with the excess consideration paid recorded as goodwill. The results from this acquisition have been included in the Company’s consolidated financial statements since the closing of the transaction and are not material to the Company. Pro forma information is not presented because the effects of the acquisition are not material to the Company’s consolidated financial statements. The goodwill related to this transaction is primarily attributable to the assembled workforce and growth opportunities from the expansion and enhancement of the Company’s product offerings. The goodwill associated with the Trace acquisition is not deductible for income tax purposes. Direct costs related to the acquisition were immaterial and were expensed as incurred as General and administrative expense in the Unaudited Consolidated Statements of Operations and Comprehensive Income.

Income Taxes	3 Months Ended
Income Taxes	Sep. 30, 2024
Income Tax Disclosure [Abstract]
Income Taxes	(11) 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 22.3% and 28.0% for the three months ended September 30, 2023 and 2024, respectively. The Company's effective tax rate for the three months ended September 30, 2023 was higher than the federal statutory rate of 21% primarily due to state and local income taxes, partially offset by federal research and development tax credits. The Company's effective tax rate for the three months ended September 30, 2024 was higher than the federal statutory rate of 21% primarily due to state and local income taxes.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 231
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482663/740-10-55-231

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12C
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+ Details

Balance Sheet Information

3 Months Ended

Sep. 30, 2024

Balance Sheet Related Disclosures [Abstract]

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, 2024	$	2,375
Charged to expense	221
Write-offs	(297)
Balance at September 30, 2024	$	2,299

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


	June 30, 2024		September 30, 2024
Capitalized internal-use software	$	324,269	$	343,566
Accumulated amortization	(207,857)		(221,634)
Capitalized internal-use software, net	$	116,412	$	121,932

Amortization of capitalized internal-use software costs is primarily included in Cost of revenues and amounted to $9,535 and $13,777 for the three months ended September 30, 2023 and 2024, respectively.

The major classes of property and equipment, net were as follows:


	June 30, 2024		September 30, 2024
Office equipment	$	2,771	$	2,774
Computer equipment	63,138		63,284
Furniture and fixtures	13,081		13,088
Software	13,102		12,972
Leasehold improvements	49,392		49,408
Time clocks rented by clients	9,738		10,029
Total	151,222		151,555
Accumulated depreciation	(90,582)		(93,610)
Property and equipment, net	$	60,640	$	57,945

Depreciation expense amounted to $5,050 and $5,228 for the three months ended September 30, 2023 and 2024, respectively.

The following table summarizes changes in goodwill during the three months ended September 30, 2024:


Balance at June 30, 2024	$	108,937
Measurement period adjustments	(74)
Balance at September 30, 2024	$	108,863

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

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


	June 30, 2024		September 30, 2024		Weighted average useful life (years)
Proprietary technology	$	47,329	$	47,329	5.9
Client relationships	22,200		22,200		7.8
Non-solicitation agreements	1,600		1,600		3.1
Trade names	1,640		1,640		5.0
Total	72,769		72,769
Accumulated amortization	(44,478)		(47,025)
Intangible assets, net	$	28,291	$	25,744

Amortization expense for acquired intangible assets was $2,536 and $2,547 for the three months ended September 30, 2023 and 2024, respectively, and is included in Cost of revenues and General and administrative.

Future amortization expense for acquired intangible assets as of September 30, 2024 is as follows:


Remainder of fiscal 2025	$	7,181
Fiscal 2026	8,109
Fiscal 2027	5,733
Fiscal 2028	3,869
Fiscal 2029	852

Total	$	25,744

The components of accrued expenses were as follows:


	June 30, 2024		September 30, 2024
Accrued payroll and personnel costs	$	93,248	$	76,368
Operating lease liabilities	7,634		7,669
Deferred revenue	25,949		27,422
Other	31,481		44,542
Total accrued expenses	$	158,311	$	156,001