Paylocity Holding (PCTY) 10-Q 9 Feb 24 2024 Q2 Quarterly report Financial data

Cover Page

Cover Page - shares	6 Months Ended
	Dec. 31, 2023	Feb. 02, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2023
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		56,331,387
Entity Central Index Key	0001591698
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Amendment Flag	false

Unaudited Consolidated Balance

Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023
Current assets:
Cash and cash equivalents	$ 366,904	$ 288,767
Accounts receivable, net	32,476	25,085
Deferred contract costs	87,065	78,109
Prepaid expenses and other	48,517	35,061
Total current assets before funds held for clients	534,962	427,022
Funds held for clients	3,271,736	2,621,415
Total current assets	3,806,698	3,048,437
Capitalized internal-use software, net	103,281	86,127
Property and equipment, net	63,150	64,069
Operating lease right-of-use assets	37,441	44,067
Intangible assets, net	32,466	34,527
Goodwill	109,558	102,054
Long-term deferred contract costs	317,915	294,222
Long‑term prepaid expenses and other	5,567	6,331
Deferred income tax assets	16,644	15,846
Total assets	4,492,720	3,695,680
Current liabilities:
Accounts payable	7,973	6,153
Accrued expenses	147,121	143,287
Total current liabilities before client fund obligations	155,094	149,440
Client fund obligations	3,267,771	2,625,355
Total current liabilities	3,422,865	2,774,795
Long-term operating lease liabilities	50,963	62,471
Other long-term liabilities	4,177	3,731
Deferred income tax liabilities	27,942	11,820
Total liabilities	3,505,947	2,852,817
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000 authorized, no shares issued and outstanding at June 30, 2023 and December 31, 2023	0	0
Common stock, $0.001 par value, 155,000 shares authorized at June 30, 2023 and December 31, 2023; 55,912 shares issued and outstanding at June 30, 2023 and 56,313 shares issued and outstanding at December 31, 2023	56	56
Additional paid-in capital	446,860	380,632
Retained earnings	539,323	466,690
Accumulated other comprehensive income (loss)	534	(4,515)
Total stockholders' equity	986,773	842,863
Total liabilities and stockholders’ equity	$ 4,492,720	$ 3,695,680

Unaudited Consolidated Balanc_2

Unaudited Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Dec. 31, 2023	Jun. 30, 2023
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)	56,313	55,912
Common stock, shares outstanding (in shares)	56,313	55,912

Unaudited Consolidated Statemen

Unaudited Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Revenues:
Recurring and other revenue	$ 298,416	$ 256,434	$ 590,101	$ 501,840
Interest income on funds held for clients	27,945	16,574	53,846	24,448
Total revenues	326,361	273,008	643,947	526,288
Cost of revenues	107,399	90,076	208,866	174,619
Gross profit	218,962	182,932	435,081	351,669
Operating expenses:
Sales and marketing	79,777	75,694	160,180	146,757
Research and development	46,139	41,029	90,744	81,122
General and administrative	43,340	48,001	93,262	98,493
Total operating expenses	169,256	164,724	344,186	326,372
Operating income	49,706	18,208	90,895	25,297
Other income (expense)	3,800	(5)	7,025	(168)
Income before income taxes	53,506	18,203	97,920	25,129
Income tax expense (benefit)	15,390	2,603	25,287	(20,823)
Net income	38,116	15,600	72,633	45,952
Other comprehensive income (loss), net of tax	4,929	516	5,049	(1,856)
Comprehensive income	$ 43,045	$ 16,116	$ 77,682	$ 44,096
Net income per share:
Basic (in dollars per share)	$ 0.68	$ 0.28	$ 1.29	$ 0.83
Diluted (in dollars per share)	$ 0.67	$ 0.28	$ 1.28	$ 0.81
Weighted-average shares used in computing net income per share:
Basic (in shares)	56,244	55,721	56,140	55,587
Diluted (in shares)	56,855	56,474	56,906	56,559

Unaudited Consolidated Statem_2

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 Loss
Beginning balance (in shares) at Jun. 30, 2022		55,190
Beginning balance at Jun. 30, 2022	$ 613,463	$ 55	$ 289,843	$ 325,868	$ (2,303)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation	91,124		91,124
Stock options exercised (in shares)		242
Stock options exercised	2,941		2,941
Issuance of common stock upon vesting of equity awards (in shares)		609
Issuance of common stock upon vesting of equity awards	0	$ 1	(1)
Issuance of common stock under employee stock purchase plan (in shares)		61
Issuance of common stock under employee stock purchase plan	8,450		8,450
Net settlement for taxes and/or exercise price related to equity awards (in shares)		(334)
Net settlement for taxes and/or exercise price related to equity awards	(82,307)		(82,307)
Unrealized gains (losses) on securities, net of tax	(1,856)				(1,856)
Net income	45,952			45,952
Ending balance (in shares) at Dec. 31, 2022		55,768
Ending balance at Dec. 31, 2022	677,767	$ 56	310,050	371,820	(4,159)
Beginning balance (in shares) at Sep. 30, 2022		55,664
Beginning balance at Sep. 30, 2022	610,846	$ 56	259,245	356,220	(4,675)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation	47,653		47,653
Stock options exercised (in shares)		7
Stock options exercised	109		109
Issuance of common stock upon vesting of equity awards (in shares)		60
Issuance of common stock upon vesting of equity awards	0	$ 0	0
Issuance of common stock under employee stock purchase plan (in shares)		61
Issuance of common stock under employee stock purchase plan	8,450		8,450
Net settlement for taxes and/or exercise price related to equity awards (in shares)		(24)
Net settlement for taxes and/or exercise price related to equity awards	(5,407)		(5,407)
Unrealized gains (losses) on securities, net of tax	516				516
Net income	15,600			15,600
Ending balance (in shares) at Dec. 31, 2022		55,768
Ending balance at Dec. 31, 2022	$ 677,767	$ 56	310,050	371,820	(4,159)
Beginning balance (in shares) at Jun. 30, 2023	55,912	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	92,084		92,084
Stock options exercised (in shares)		28
Stock options exercised	484		484
Issuance of common stock upon vesting of equity awards (in shares)		489
Issuance of common stock upon vesting of equity awards	0	$ 0	0
Issuance of common stock under employee stock purchase plan (in shares)		73
Issuance of common stock under employee stock purchase plan	9,534		9,534
Net settlement for taxes and/or exercise price related to equity awards (in shares)		(189)
Net settlement for taxes and/or exercise price related to equity awards	(35,874)		(35,874)
Unrealized gains (losses) on securities, net of tax	5,049				5,049
Net income	$ 72,633			72,633
Ending balance (in shares) at Dec. 31, 2023	56,313	56,313
Ending balance at Dec. 31, 2023	$ 986,773	$ 56	446,860	539,323	534
Beginning balance (in shares) at Sep. 30, 2023		56,167
Beginning balance at Sep. 30, 2023	892,639	$ 56	395,771	501,207	(4,395)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation	48,120		48,120
Stock options exercised (in shares)		14
Stock options exercised	261		261
Issuance of common stock upon vesting of equity awards (in shares)		102
Issuance of common stock upon vesting of equity awards	0	$ 0	0
Issuance of common stock under employee stock purchase plan (in shares)		73
Issuance of common stock under employee stock purchase plan	9,534		9,534
Net settlement for taxes and/or exercise price related to equity awards (in shares)		(43)
Net settlement for taxes and/or exercise price related to equity awards	(6,826)		(6,826)
Unrealized gains (losses) on securities, net of tax	4,929				4,929
Net income	$ 38,116			38,116
Ending balance (in shares) at Dec. 31, 2023	56,313	56,313
Ending balance at Dec. 31, 2023	$ 986,773	$ 56	$ 446,860	$ 539,323	$ 534

Unaudited Consolidated Statem_3

Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities:
Net income	$ 72,633	$ 45,952
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense	82,213	83,364
Depreciation and amortization expense	35,501	29,094
Deferred income tax expense (benefit)	15,225	(20,856)
Provision for credit losses	463	602
Net accretion of discounts on available-for-sale securities	(2,683)	(2,039)
Other	(3,870)	1,410
Changes in operating assets and liabilities:
Accounts receivable	(7,052)	(9,377)
Deferred contract costs	(30,743)	(40,638)
Prepaid expenses and other	(11,328)	616
Accounts payable	1,131	(392)
Accrued expenses and other	(14,278)	(8,979)
Net cash provided by operating activities	137,212	78,757
Cash flows from investing activities:
Purchases of available-for-sale securities	(164,815)	(296,060)
Proceeds from sales and maturities of available-for-sale securities	150,851	190,253
Capitalized internal-use software costs	(29,483)	(19,740)
Purchases of property and equipment	(6,142)	(6,663)
Acquisitions of businesses, net of cash acquired	(12,015)	0
Other investing activities	(583)	29
Net cash used in investing activities	(62,187)	(132,181)
Cash flows from financing activities:
Net change in client fund obligations	642,416	(922,079)
Proceeds from employee stock purchase plan	9,534	8,450
Taxes paid related to net share settlement of equity awards	(35,390)	(79,369)
Other financing activities	13,356	(864)
Net cash provided by (used in) financing activities	629,916	(993,862)
Net change in cash, cash equivalents and funds held for clients' cash and cash equivalents	704,941	(1,047,286)
Cash, cash equivalents and funds held for clients' cash and cash equivalents—beginning of period	2,421,312	3,793,453
Cash, cash equivalents and funds held for clients' cash and cash equivalents—end of period	3,126,253	2,746,167
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Purchases of property and equipment, accrued but not paid	3,422	0
Liabilities assumed for acquisitions	382	117
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	247	157
Cash paid (refunds received) for income taxes	25,561	(158)
Reconciliation of cash, cash equivalents and funds held for clients' cash and cash equivalents to the Consolidated Balance Sheets
Cash and cash equivalents	366,904	120,053
Funds held for clients' cash and cash equivalents	2,759,349	2,626,114
Total cash, cash equivalents and funds held for clients' cash and cash equivalents	$ 3,126,253	$ 2,746,167

Organization and Description of

Organization and Description of Business	6 Months Ended
	Dec. 31, 2023
Organization and Description of Business [Abstract]
Organization and Description of Business	(1) Organization and Description of Business

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Dec. 31, 2023
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 and six months ended December 31, 2023 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, 2023 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 is currently assessing the impact of this ASU to its consolidated financial statements and related disclosures and is evaluating 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 is currently assessing the impact of this ASU to its consolidated financial statements and related disclosures and is evaluating the method and timing of adoption.

Revenue

Revenue	6 Months Ended
	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Revenue	(3) Revenue The Company derives its revenue from contracts predominantly 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 payroll, timekeeping, and HR-related cloud-based computing services. The majority of the Company’s recurring fees are satisfied over time as services are provided. The performance obligations related to payroll services are satisfied upon the processing of the client’s payroll with the fee charged and collected based on a per employee per payroll frequency fee. The performance obligations related to time and attendance services and HR related services are satisfied over time each month with the fee charged and collected based on a per employee per month fee. For subscription-based fees which can include payroll, time and attendance, and other HCM related services, the Company recognizes the applicable recurring fees over time each month with the fee charged and collected based on a per employee per month fee. 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 Six Months Ended 2022 2023 2022 2023 Recurring fees $ 247,522 $ 285,140 $ 484,341 $ 565,039 Implementation services and other 8,912 13,276 17,499 25,062 Total revenues from contracts $ 256,434 $ 298,416 $ 501,840 $ 590,101 Deferred revenue The timing of revenue recognition for recurring revenue is consistent with the timing of invoicing as they occur simultaneously based on the client payroll processing period or by month. As such, the Company does not 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 Six Months Ended 2022 2023 2022 2023 Balance at beginning of the period $ 14,195 $ 24,140 $ 12,233 $ 22,617 Deferral of revenue 12,002 11,588 20,234 22,232 Revenue recognized (6,460) (9,483) (12,730) (18,604) Balance at end of the period $ 19,737 $ 26,245 $ 19,737 $ 26,245 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 $17,203 in fiscal 2024, $7,841 in fiscal 2025 and $1,201 in fiscal 2026 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 December 31, 2022 Beginning Balance Capitalized Costs Amortization Ending Balance Costs to obtain a new contract $ 191,088 $ 20,310 $ (10,845) $ 200,553 Costs to fulfill a contract 117,524 18,803 (6,010) 130,317 Total $ 308,612 $ 39,113 $ (16,855) $ 330,870 Three Months Ended December 31, 2023 Beginning Balance Capitalized Costs Amortization Ending Balance Costs to obtain a new contract $ 224,409 $ 18,576 $ (12,928) $ 230,057 Costs to fulfill a contract 163,817 19,805 (8,699) 174,923 Total $ 388,226 $ 38,381 $ (21,627) $ 404,980 Six Months Ended December 31, 2022 Beginning Balance Capitalized Costs Amortization Ending Balance Costs to obtain a new contract $ 182,543 $ 39,222 $ (21,212) $ 200,553 Costs to fulfill a contract 106,025 35,665 (11,373) 130,317 Total $ 288,568 $ 74,887 $ (32,585) $ 330,870 Six Months Ended December 31, 2023 Beginning Balance Capitalized Costs Amortization Ending Balance Costs to obtain a new contract $ 218,965 $ 36,336 $ (25,244) $ 230,057 Costs to fulfill a contract 153,366 38,260 (16,703) 174,923 Total $ 372,331 $ 74,596 $ (41,947) $ 404,980 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 $70,999 as of December 31, 2023, 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.

Business Combination

Business Combination	6 Months Ended
	Dec. 31, 2023
Business Combination and Asset Acquisition [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 preliminary allocation of the purchase price for Trace was approximately $7,504 of goodwill, $3,000 of proprietary technology and other immaterial assets and liabilities. 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 fair values of all assets acquired and liabilities assumed are currently provisional and are subject to change over the measurement period as the Company continues to evaluate and analyze the estimates and assumptions used in the valuation. The measurement period will end no later than one year from the acquisition date. 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.

Balance Sheet Information

Balance Sheet Information	6 Months Ended
	Dec. 31, 2023
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, 2023 $ 1,620 Charged to expense 463 Write-offs (314) Balance at December 31, 2023 $ 1,769 Capitalized internal-use software and accumulated amortization were as follows: June 30, December 31, Capitalized internal-use software $ 248,738 $ 286,103 Accumulated amortization (162,611) (182,822) Capitalized internal-use software, net $ 86,127 $ 103,281 Amortization of capitalized internal-use software costs is primarily included in Cost of revenues and amounted to $7,478 and $10,676 for the three months ended December 31, 2022 and 2023, respectively, and $14,520 and $20,211 for the six months ended December 31, 2022 and 2023, respectively. The major classes of property and equipment, net were as follows: June 30, December 31, Office equipment $ 2,508 $ 2,792 Computer equipment 58,670 62,301 Furniture and fixtures 12,958 12,986 Software 11,127 11,944 Leasehold improvements 48,159 48,829 Time clocks rented by clients 8,533 9,258 Total 141,955 148,110 Accumulated depreciation (77,886) (84,960) Property and equipment, net $ 64,069 $ 63,150 Depreciation expense amounted to $4,579 and $5,179 for the three months ended December 31, 2022 and 2023, respectively, and $9,033 and $10,229 for the six months ended December 31, 2022 and 2023, respectively. The following table summarizes changes in goodwill during the six months ended December 31, 2023: December 31, Balance at June 30, 2023 $ 102,054 Addition attributable to acquisition 7,504 Balance at December 31, 2023 $ 109,558 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, December 31, Weighted average useful life (years) Proprietary technology $ 43,129 $ 46,129 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 68,569 71,569 Accumulated amortization (34,042) (39,103) Intangible assets, net $ 34,527 $ 32,466 Amortization expense for acquired intangible assets was $2,770 and $2,525 for the three months ended December 31, 2022 and 2023, respectively, and $5,541 and $5,061 for the six months ended December 31, 2022 and 2023, respectively, and is included in Cost of revenues and General and administrative. Future amortization expense for acquired intangible assets as of December 31, 2023 is as follows: Remainder of fiscal 2024 $ 5,182 Fiscal 2025 9,488 Fiscal 2026 7,869 Fiscal 2027 5,493 Fiscal 2028 3,629 Thereafter 805 Total $ 32,466 The components of accrued expenses were as follows: June 30, December 31, Accrued payroll and personnel costs $ 85,019 $ 66,520 Operating lease liabilities 7,800 8,197 Deferred revenue 24,539 30,306 Other 25,929 42,098 Total accrued expenses $ 143,287 $ 147,121

Corporate Investments and Funds

Corporate Investments and Funds Held for Clients	6 Months Ended
	Dec. 31, 2023
Corporate Investments and Funds Held for Clients [Abstract]
Corporate Investments and Funds Held for Clients	(6) Corporate Investments and Funds Held for Clients Corporate investments and funds held for clients consisted of the following: June 30, 2023 Type of Issue Amortized cost Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 288,767 $ — $ — $ 288,767 Funds held for clients' cash and cash equivalents 2,132,545 — — 2,132,545 Available-for-sale securities: Commercial paper 110,003 12 (138) 109,877 Corporate bonds 112,262 18 (1,867) 110,413 Asset-backed securities 30,061 10 (337) 29,734 Certificates of deposit 68,247 5 (93) 68,159 U.S. treasury securities 158,839 — (2,839) 156,000 U.S government agency securities 8,000 — (513) 7,487 Other 7,329 — (129) 7,200 Total available-for-sale securities 494,741 45 (5,916) 488,870 Total investments $ 2,916,053 $ 45 $ (5,916) $ 2,910,182 December 31, 2023 Type of Issue Amortized cost Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 366,904 $ — $ — $ 366,904 Funds held for clients' cash and cash equivalents 2,759,349 — — 2,759,349 Available-for-sale securities: Commercial paper 49,002 5 (19) 48,988 Corporate bonds 204,682 2,830 (751) 206,761 Asset-backed securities 40,140 336 (160) 40,316 Certificates of deposit 37,620 36 (6) 37,650 U.S. treasury securities 159,125 106 (1,168) 158,063 U.S government agency securities 8,000 — (323) 7,677 Other 12,819 163 (50) 12,932 Total available-for-sale securities 511,388 3,476 (2,477) 512,387 Total investments $ 3,637,641 $ 3,476 $ (2,477) $ 3,638,640 All available-for-sale securities were included in Funds held for clients at June 30, 2023 and December 31, 2023. Cash and cash equivalents and funds held for clients’ cash and cash equivalents included demand deposit accounts and money market funds at June 30, 2023 and December 31, 2023. Classification of investments on the Unaudited Consolidated Balance Sheets was as follows: June 30, December 31, 2023 Cash and cash equivalents $ 288,767 $ 366,904 Funds held for clients 2,621,415 3,271,736 Total investments $ 2,910,182 $ 3,638,640 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, 2023 and December 31, 2023 had fair market value as follows: June 30, 2023 Securities in an unrealized loss Securities in an unrealized loss Total Gross unrealized losses Fair value Gross unrealized losses Fair value Gross unrealized losses Fair value Commercial paper $ (138) $ 96,665 $ — $ — $ (138) $ 96,665 Corporate bonds (695) 71,089 (1,172) 32,807 (1,867) 103,896 Asset-backed securities (233) 23,313 (104) 2,038 (337) 25,351 Certificates of deposit (93) 52,254 — — (93) 52,254 U.S. treasury securities (1,075) 95,388 (1,764) 60,612 (2,839) 156,000 U.S. government agency securities — — (513) 7,487 (513) 7,487 Other (71) 5,326 (58) 1,874 (129) 7,200 Total available-for-sale securities $ (2,305) $ 344,035 $ (3,611) $ 104,818 $ (5,916) $ 448,853 December 31, 2023 Securities in an unrealized loss Securities in an unrealized loss Total Gross unrealized losses Fair value Gross unrealized losses Fair value Gross unrealized losses Fair value Commercial paper $ (19) $ 32,846 $ — $ — $ (19) $ 32,846 Corporate bonds (60) 24,428 (691) 31,909 (751) 56,337 Asset-backed securities (5) 6,171 (155) 9,906 (160) 16,077 Certificates of deposit (6) 21,394 — — (6) 21,394 U.S. treasury securities (178) 80,597 (990) 67,913 (1,168) 148,510 U.S. government agency securities — — (323) 7,677 (323) 7,677 Other — — (50) 3,596 (50) 3,596 Total available-for-sale securities $ (268) $ 165,436 $ (2,209) $ 121,001 $ (2,477) $ 286,437 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 or six months ended December 31, 2022 or 2023. All securities in the Company’s portfolio held an A-1 rating or better as of December 31, 2023. The Company did not make any material reclassification adjustments out of accumulated other comprehensive income for realized gains and losses on the sale of available-for-sale securities during the three or six months ended December 31, 2022 or 2023. There were no realized gains or losses on the sale of available-for-sale securities for the three or six months ended December 31, 2022 or 2023. Expected maturities of available-for-sale securities at December 31, 2023 were as follows: Amortized cost Fair value One year or less $ 214,684 $ 213,663 One year to two years 152,062 151,098 Two years to three years 85,613 86,714 Three years to five years 59,029 60,912 Total available-for-sale securities $ 511,388 $ 512,387

Fair Value Measurement

Fair Value Measurement	6 Months Ended
	Dec. 31, 2023
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 certain 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, 2023 and December 31, 2023 based upon the short-term nature of these assets and liabilities. Marketable securities, consisting of securities classified as available-for-sale as well as certain cash equivalents, are recorded at fair value on a recurring basis using Level 2 inputs obtained from an independent pricing service. Available-for-sale securities include commercial paper, corporate bonds, asset-backed securities, certificates of deposit, U.S. treasury securities, U.S. government agency 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, 2023 or December 31, 2023. The fair value level for the Company’s cash and cash equivalents and available-for-sale securities was as follows: June 30, 2023 Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 288,767 $ 288,767 $ — $ — Funds held for clients' cash and cash equivalents 2,132,545 2,132,545 — — Available-for-sale securities: Commercial paper 109,877 — 109,877 — Corporate bonds 110,413 — 110,413 — Asset-backed securities 29,734 — 29,734 — Certificates of deposit 68,159 — 68,159 — U.S. treasury securities 156,000 — 156,000 — U.S government agency securities 7,487 — 7,487 — Other 7,200 — 7,200 — Total available-for-sale securities 488,870 — 488,870 — Total investments $ 2,910,182 $ 2,421,312 $ 488,870 $ — December 31, 2023 Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 366,904 $ 366,904 $ — $ — Funds held for clients' cash and cash equivalents 2,759,349 2,759,349 — — Available-for-sale securities: Commercial paper 48,988 — 48,988 — Corporate bonds 206,761 — 206,761 — Asset-backed securities 40,316 — 40,316 — Certificates of deposit 37,650 — 37,650 — U.S. treasury securities 158,063 — 158,063 — U.S government agency securities 7,677 — 7,677 — Other 12,932 — 12,932 — Total available-for-sale securities 512,387 — 512,387 — Total investments $ 3,638,640 $ 3,126,253 $ 512,387 $ — Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis

Debt

Debt	6 Months Ended
	Dec. 31, 2023
Debt Disclosure [Abstract]
Debt	(8) Debt In July 2019, the Company entered into 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. In August 2022, the Company entered into a first amendment to the aforementioned credit agreement to increase the borrowing capacity of our revolving credit facility ("credit facility") 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 amended credit agreement extends the maturity date of the credit facility to August 2027 and replaces the interest rate based on London Interbank Offered Rate with an interest rate based on secured overnight financing rate ("SOFR"). The Company had no borrowings at June 30, 2023 or December 31, 2023. 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 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 December 31, 2023, the Company was in compliance with all of the aforementioned covenants.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation	(9) Stock-Based Compensation In November 2023, the Company’s stockholders approved the 2023 Equity Incentive Plan (the “2023 Plan”). The 2023 Plan serves as the successor to the 2014 Equity Incentive Plan (the “2014 Plan”) and permits the granting of restricted stock units ("RSUs"), market share units ("MSUs") and other equity incentives at the discretion of the compensation committee of the Company’s board of directors. No new awards have been or will be issued under the 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 December 31, 2023, the Company had 2,009 shares available for future grant, and 1,961 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 RSUs, MSUs and the Employee Stock Purchase Plan is included in the following line items in the accompanying unaudited consolidated statements of operations and comprehensive income: Three Months Ended December 31, Six Months Ended December 31, 2022 2023 2022 2023 Cost of revenues $ 5,232 $ 5,475 $ 9,273 $ 10,418 Sales and marketing 10,795 10,043 20,354 19,268 Research and development 11,292 11,313 20,094 21,071 General and administrative 16,232 16,377 33,643 31,456 Total stock-based compensation expense $ 43,551 $ 43,208 $ 83,364 $ 82,213 In addition, the Company capitalized $3,154 and $3,916 of stock-based compensation expense in its capitalized internal-use software costs in the three months ended December 31, 2022 and 2023, respectively, and $6,096 and $7,965 for the six months ended December 31, 2022 and 2023, respectively. There were no stock options granted during the six months ended December 31, 2023. The table below presents stock option activity during the six months ended December 31, 2023: Outstanding Options Number of shares Weighted average exercise price Weighted average remaining contractual term (years) Aggregate intrinsic value Option balance at July 1, 2023 288 $ 23.63 1.2 $ 46,129 Options exercised (28) $ 17.43 Option balance at December 31, 2023 260 $ 24.30 0.7 $ 36,392 Options vested and exercisable at December 31, 2023 260 $ 24.30 0.7 $ 36,392 The total intrinsic value of options exercised was $1,484 and $2,206 during the three months ended December 31, 2022 and 2023, respectively, and $49,627 and $4,700 for the six months ended December 31, 2022 and 2023, respectively. The Company grants RSUs under its equity incentive plan with te rm s determined at the discretion of the compensation committee of the Company’s board of directors. RSUs generally vest over four years following the grant date and have time-based vesting conditions. The following table represents restricted stock unit activity during the six months ended December 31, 2023: Units Weighted average grant date fair value RSU balance at July 1, 2023 1,242 $ 225.30 RSUs granted 753 $ 193.88 RSUs vested (429) $ 191.68 RSUs forfeited (62) $ 213.01 RSU balance at December 31, 2023 1,504 $ 219.66 The Company also grants MSUs under its equity incentive plan with terms determined at the discretion of the compensation committee of the Company's board of directors. The actual number of MSUs that will be eligible to vest is based on the achievement of a relative total shareholder return (“TSR”) target as compared to the TSR realized by each of the companies comprising the Russell 3000 Index over an approximately three-year period. The MSUs cliff-vest at the end of the TSR measurement period, and up to 200% of the target number of shares subject to each MSU are eligible to be earned. The following table represents market share unit activity during the six months ended December 31, 2023: Units Weighted average grant date fair value MSU balance at July 1, 2023 171 $ 320.38 MSUs granted 86 $ 256.66 MSUs vested (60) $ 178.04 MSU balance at December 31, 2023 197 $ 335.84 The Company estimated the grant date fair value of the MSUs using a Monte Carlo simulation model that included the following assumptions: Six Months Ended 2022 2023 Valuation assumptions: Expected dividend yield —% —% Expected volatility 51.0% - 52.7% 44.5% Expected term (years) 2.75 - 3.04 3.04 Risk‑free interest rate 3.11% - 4.01% 4.58% At December 31, 2023, there was $198,250 of total unrecognized compensation cost, net of estimated forfeitures, related to unvested RSUs and MSUs. That cost is expected to be recognized over a weighted average period of 1.9 years.

Litigation

Litigation	6 Months Ended
	Dec. 31, 2023
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 matters currently outstanding or threatened will not have a material adverse effect on the Company’s financial position, results of operations, or liquidity. However, these matters are subject to inherent uncertainties and could materially impact the Company’s financial position, results of operations, or liquidity based on the final disposition of these matters.

Income Taxes

Income Taxes	3 Months Ended
	Dec. 31, 2023
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 14.3% and 28.8% for the three months ended December 31, 2022 and 2023, respectively. The Company's effective tax rate for the three months ended December 31, 2022 was lower than the federal statutory rate of 21% primarily due to a decrease to the valuation allowance, partially offset by non-deductible stock-based compensation under Internal Revenue Code Section 162(m). The Company's effective tax rate for the three months ended December 31, 2023 was higher than the federal statutory rate of 21% primarily due to state and local income taxes. The Company's effective tax rate was (82.9)% and 25.8% for the six months ended December 31, 2022 and 2023, respectively. The Company's effective tax rate for the six months ended December 31, 2022 was lower than the federal statutory rate of 21% primarily due to excess tax benefits from employee stock-based compensation, state and local income taxes, and a decrease in the valuation allowance. The Company's effective tax rate for the six months ended December 31, 2023 was higher than the federal statutory rate of 21% primarily due to state and local income taxes.

Net Income Per Share

Net Income Per Share	6 Months Ended
	Dec. 31, 2023
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 Six Months Ended 2022 2023 2022 2023 Numerator: Net income $ 15,600 $ 38,116 $ 45,952 $ 72,633 Denominator: Weighted-average shares used in computing net income per share: Basic 55,721 56,244 55,587 56,140 Weighted-average effect of potentially dilutive shares: Employee stock options, restricted stock units and market share units 753 611 972 766 Diluted 56,474 56,855 56,559 56,906 Net income per share: Basic $ 0.28 $ 0.68 $ 0.83 $ 1.29 Diluted $ 0.28 $ 0.67 $ 0.81 $ 1.28 The following table summarizes the outstanding restricted stock units and market share units as of December 31, 2022 and 2023 that were excluded from the diluted per share calculation for the periods presented because to include them would have been antidilutive: Three Months Ended Six Months Ended 2022 2023 2022 2023 Market share units 57 17 60 17 Restricted stock units 616 22 601 15 Total 673 39 661 32

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Dec. 31, 2023
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
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 is currently assessing the impact of this ASU to its consolidated financial statements and related disclosures and is evaluating 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 is currently assessing the impact of this ASU to its consolidated financial statements and related disclosures and is evaluating the method and timing of adoption.

Revenue (Tables)

Revenue (Tables)	6 Months Ended
	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Schedule of 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 Six Months Ended 2022 2023 2022 2023 Recurring fees $ 247,522 $ 285,140 $ 484,341 $ 565,039 Implementation services and other 8,912 13,276 17,499 25,062 Total revenues from contracts $ 256,434 $ 298,416 $ 501,840 $ 590,101
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 Six Months Ended 2022 2023 2022 2023 Balance at beginning of the period $ 14,195 $ 24,140 $ 12,233 $ 22,617 Deferral of revenue 12,002 11,588 20,234 22,232 Revenue recognized (6,460) (9,483) (12,730) (18,604) Balance at end of the period $ 19,737 $ 26,245 $ 19,737 $ 26,245
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 December 31, 2022 Beginning Balance Capitalized Costs Amortization Ending Balance Costs to obtain a new contract $ 191,088 $ 20,310 $ (10,845) $ 200,553 Costs to fulfill a contract 117,524 18,803 (6,010) 130,317 Total $ 308,612 $ 39,113 $ (16,855) $ 330,870 Three Months Ended December 31, 2023 Beginning Balance Capitalized Costs Amortization Ending Balance Costs to obtain a new contract $ 224,409 $ 18,576 $ (12,928) $ 230,057 Costs to fulfill a contract 163,817 19,805 (8,699) 174,923 Total $ 388,226 $ 38,381 $ (21,627) $ 404,980 Six Months Ended December 31, 2022 Beginning Balance Capitalized Costs Amortization Ending Balance Costs to obtain a new contract $ 182,543 $ 39,222 $ (21,212) $ 200,553 Costs to fulfill a contract 106,025 35,665 (11,373) 130,317 Total $ 288,568 $ 74,887 $ (32,585) $ 330,870 Six Months Ended December 31, 2023 Beginning Balance Capitalized Costs Amortization Ending Balance Costs to obtain a new contract $ 218,965 $ 36,336 $ (25,244) $ 230,057 Costs to fulfill a contract 153,366 38,260 (16,703) 174,923 Total $ 372,331 $ 74,596 $ (41,947) $ 404,980

Balance Sheet Information (Tabl

Balance Sheet Information (Tables)	6 Months Ended
	Dec. 31, 2023
Balance Sheet Related Disclosures [Abstract]
Schedule of capitalized internal-use software and accumulated amortization	Capitalized internal-use software and accumulated amortization were as follows: June 30, December 31, Capitalized internal-use software $ 248,738 $ 286,103 Accumulated amortization (162,611) (182,822) Capitalized internal-use software, net $ 86,127 $ 103,281
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, 2023 $ 1,620 Charged to expense 463 Write-offs (314) Balance at December 31, 2023 $ 1,769
Schedule of property and equipment, net	The major classes of property and equipment, net were as follows: June 30, December 31, Office equipment $ 2,508 $ 2,792 Computer equipment 58,670 62,301 Furniture and fixtures 12,958 12,986 Software 11,127 11,944 Leasehold improvements 48,159 48,829 Time clocks rented by clients 8,533 9,258 Total 141,955 148,110 Accumulated depreciation (77,886) (84,960) Property and equipment, net $ 64,069 $ 63,150
Schedule of changes in goodwill	The following table summarizes changes in goodwill during the six months ended December 31, 2023: December 31, Balance at June 30, 2023 $ 102,054 Addition attributable to acquisition 7,504 Balance at December 31, 2023 $ 109,558
Schedule of amortizable intangible assets and estimated useful lives	The Company’s amortizable intangible assets and estimated useful lives are as follows: June 30, December 31, Weighted average useful life (years) Proprietary technology $ 43,129 $ 46,129 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 68,569 71,569 Accumulated amortization (34,042) (39,103) Intangible assets, net $ 34,527 $ 32,466
Schedule of future amortization expense for acquired intangible assets	Future amortization expense for acquired intangible assets as of December 31, 2023 is as follows: Remainder of fiscal 2024 $ 5,182 Fiscal 2025 9,488 Fiscal 2026 7,869 Fiscal 2027 5,493 Fiscal 2028 3,629 Thereafter 805 Total $ 32,466
Schedule of components of accrued expenses	The components of accrued expenses were as follows: June 30, December 31, Accrued payroll and personnel costs $ 85,019 $ 66,520 Operating lease liabilities 7,800 8,197 Deferred revenue 24,539 30,306 Other 25,929 42,098 Total accrued expenses $ 143,287 $ 147,121

Corporate Investments and Fun_2

Corporate Investments and Funds Held For Clients (Tables)	6 Months Ended
	Dec. 31, 2023
Corporate Investments and Funds Held for Clients [Abstract]
Schedule of corporate investments and funds held for clients	Corporate investments and funds held for clients consisted of the following: June 30, 2023 Type of Issue Amortized cost Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 288,767 $ — $ — $ 288,767 Funds held for clients' cash and cash equivalents 2,132,545 — — 2,132,545 Available-for-sale securities: Commercial paper 110,003 12 (138) 109,877 Corporate bonds 112,262 18 (1,867) 110,413 Asset-backed securities 30,061 10 (337) 29,734 Certificates of deposit 68,247 5 (93) 68,159 U.S. treasury securities 158,839 — (2,839) 156,000 U.S government agency securities 8,000 — (513) 7,487 Other 7,329 — (129) 7,200 Total available-for-sale securities 494,741 45 (5,916) 488,870 Total investments $ 2,916,053 $ 45 $ (5,916) $ 2,910,182 December 31, 2023 Type of Issue Amortized cost Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 366,904 $ — $ — $ 366,904 Funds held for clients' cash and cash equivalents 2,759,349 — — 2,759,349 Available-for-sale securities: Commercial paper 49,002 5 (19) 48,988 Corporate bonds 204,682 2,830 (751) 206,761 Asset-backed securities 40,140 336 (160) 40,316 Certificates of deposit 37,620 36 (6) 37,650 U.S. treasury securities 159,125 106 (1,168) 158,063 U.S government agency securities 8,000 — (323) 7,677 Other 12,819 163 (50) 12,932 Total available-for-sale securities 511,388 3,476 (2,477) 512,387 Total investments $ 3,637,641 $ 3,476 $ (2,477) $ 3,638,640
Schedule of the classification of investments	Classification of investments on the Unaudited Consolidated Balance Sheets was as follows: June 30, December 31, 2023 Cash and cash equivalents $ 288,767 $ 366,904 Funds held for clients 2,621,415 3,271,736 Total investments $ 2,910,182 $ 3,638,640
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, 2023 and December 31, 2023 had fair market value as follows: June 30, 2023 Securities in an unrealized loss Securities in an unrealized loss Total Gross unrealized losses Fair value Gross unrealized losses Fair value Gross unrealized losses Fair value Commercial paper $ (138) $ 96,665 $ — $ — $ (138) $ 96,665 Corporate bonds (695) 71,089 (1,172) 32,807 (1,867) 103,896 Asset-backed securities (233) 23,313 (104) 2,038 (337) 25,351 Certificates of deposit (93) 52,254 — — (93) 52,254 U.S. treasury securities (1,075) 95,388 (1,764) 60,612 (2,839) 156,000 U.S. government agency securities — — (513) 7,487 (513) 7,487 Other (71) 5,326 (58) 1,874 (129) 7,200 Total available-for-sale securities $ (2,305) $ 344,035 $ (3,611) $ 104,818 $ (5,916) $ 448,853 December 31, 2023 Securities in an unrealized loss Securities in an unrealized loss Total Gross unrealized losses Fair value Gross unrealized losses Fair value Gross unrealized losses Fair value Commercial paper $ (19) $ 32,846 $ — $ — $ (19) $ 32,846 Corporate bonds (60) 24,428 (691) 31,909 (751) 56,337 Asset-backed securities (5) 6,171 (155) 9,906 (160) 16,077 Certificates of deposit (6) 21,394 — — (6) 21,394 U.S. treasury securities (178) 80,597 (990) 67,913 (1,168) 148,510 U.S. government agency securities — — (323) 7,677 (323) 7,677 Other — — (50) 3,596 (50) 3,596 Total available-for-sale securities $ (268) $ 165,436 $ (2,209) $ 121,001 $ (2,477) $ 286,437
Schedule of expected maturities of available-for-sale securities	Expected maturities of available-for-sale securities at December 31, 2023 were as follows: Amortized cost Fair value One year or less $ 214,684 $ 213,663 One year to two years 152,062 151,098 Two years to three years 85,613 86,714 Three years to five years 59,029 60,912 Total available-for-sale securities $ 511,388 $ 512,387

Fair Value Measurement (Tables)

Fair Value Measurement (Tables)	6 Months Ended
	Dec. 31, 2023
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, 2023 Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 288,767 $ 288,767 $ — $ — Funds held for clients' cash and cash equivalents 2,132,545 2,132,545 — — Available-for-sale securities: Commercial paper 109,877 — 109,877 — Corporate bonds 110,413 — 110,413 — Asset-backed securities 29,734 — 29,734 — Certificates of deposit 68,159 — 68,159 — U.S. treasury securities 156,000 — 156,000 — U.S government agency securities 7,487 — 7,487 — Other 7,200 — 7,200 — Total available-for-sale securities 488,870 — 488,870 — Total investments $ 2,910,182 $ 2,421,312 $ 488,870 $ — December 31, 2023 Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 366,904 $ 366,904 $ — $ — Funds held for clients' cash and cash equivalents 2,759,349 2,759,349 — — Available-for-sale securities: Commercial paper 48,988 — 48,988 — Corporate bonds 206,761 — 206,761 — Asset-backed securities 40,316 — 40,316 — Certificates of deposit 37,650 — 37,650 — U.S. treasury securities 158,063 — 158,063 — U.S government agency securities 7,677 — 7,677 — Other 12,932 — 12,932 — Total available-for-sale securities 512,387 — 512,387 — Total investments $ 3,638,640 $ 3,126,253 $ 512,387 $ —

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]
Schedule of stock-based compensation expense related to restricted stock units, market share units and the Employee Stock Purchase Plan	Stock-based compensation expense related to RSUs, MSUs and the Employee Stock Purchase Plan is included in the following line items in the accompanying unaudited consolidated statements of operations and comprehensive income: Three Months Ended December 31, Six Months Ended December 31, 2022 2023 2022 2023 Cost of revenues $ 5,232 $ 5,475 $ 9,273 $ 10,418 Sales and marketing 10,795 10,043 20,354 19,268 Research and development 11,292 11,313 20,094 21,071 General and administrative 16,232 16,377 33,643 31,456 Total stock-based compensation expense $ 43,551 $ 43,208 $ 83,364 $ 82,213
Schedule of stock option activity	The table below presents stock option activity during the six months ended December 31, 2023: Outstanding Options Number of shares Weighted average exercise price Weighted average remaining contractual term (years) Aggregate intrinsic value Option balance at July 1, 2023 288 $ 23.63 1.2 $ 46,129 Options exercised (28) $ 17.43 Option balance at December 31, 2023 260 $ 24.30 0.7 $ 36,392 Options vested and exercisable at December 31, 2023 260 $ 24.30 0.7 $ 36,392
Schedule of restricted stock unit activity	The following table represents restricted stock unit activity during the six months ended December 31, 2023: Units Weighted average grant date fair value RSU balance at July 1, 2023 1,242 $ 225.30 RSUs granted 753 $ 193.88 RSUs vested (429) $ 191.68 RSUs forfeited (62) $ 213.01 RSU balance at December 31, 2023 1,504 $ 219.66
Schedule of market share unit activity	The following table represents market share unit activity during the six months ended December 31, 2023: Units Weighted average grant date fair value MSU balance at July 1, 2023 171 $ 320.38 MSUs granted 86 $ 256.66 MSUs vested (60) $ 178.04 MSU balance at December 31, 2023 197 $ 335.84
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: Six Months Ended 2022 2023 Valuation assumptions: Expected dividend yield —% —% Expected volatility 51.0% - 52.7% 44.5% Expected term (years) 2.75 - 3.04 3.04 Risk‑free interest rate 3.11% - 4.01% 4.58%

Net Income Per Share (Tables)

Net Income Per Share (Tables)	6 Months Ended
	Dec. 31, 2023
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 Six Months Ended 2022 2023 2022 2023 Numerator: Net income $ 15,600 $ 38,116 $ 45,952 $ 72,633 Denominator: Weighted-average shares used in computing net income per share: Basic 55,721 56,244 55,587 56,140 Weighted-average effect of potentially dilutive shares: Employee stock options, restricted stock units and market share units 753 611 972 766 Diluted 56,474 56,855 56,559 56,906 Net income per share: Basic $ 0.28 $ 0.68 $ 0.83 $ 1.29 Diluted $ 0.28 $ 0.67 $ 0.81 $ 1.28
Summary of anti-dilutive securities	The following table summarizes the outstanding restricted stock units and market share units as of December 31, 2022 and 2023 that were excluded from the diluted per share calculation for the periods presented because to include them would have been antidilutive: Three Months Ended Six Months Ended 2022 2023 2022 2023 Market share units 57 17 60 17 Restricted stock units 616 22 601 15 Total 673 39 661 32

Revenue - Disaggregation (Detai

Revenue - Disaggregation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Revenue
Period of term arrangements not cancellable by client			2 years
Disaggregation of revenue
Total revenues from contracts	$ 298,416	$ 256,434	$ 590,101	$ 501,840
Maximum
Revenue
Period of notice to cancel by client			60 days
Recurring fees
Disaggregation of revenue
Total revenues from contracts	285,140	247,522	$ 565,039	484,341
Implementation services and other
Disaggregation of revenue
Total revenues from contracts	$ 13,276	$ 8,912	$ 25,062	$ 17,499

Revenue - Deferred Revenue (Det

Revenue - Deferred Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Changes in deferred revenue related to nonrefundable upfront fees
Beginning balance	$ 24,140	$ 14,195	$ 22,617	$ 12,233
Deferral of revenue	11,588	12,002	22,232	20,234
Revenue recognized	(9,483)	(6,460)	(18,604)	(12,730)
Ending balance	26,245	$ 19,737	26,245	$ 19,737
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 2024	17,203		17,203
Deferred revenue from nonrefundable upfront fees expected to be recognized in fiscal 2025	7,841		7,841
Deferred revenue from nonrefundable upfront fees expected to be recognized in fiscal 2026 and thereafter	$ 1,201		$ 1,201
Maximum
Revenue
Amortization period of nonrefundable upfront implementation fees			24 months

Revenue - Deferred Contract Cos

Revenue - Deferred Contract Costs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Deferred contract costs
Amortization period of capitalized contract costs	7 years		7 years
Beginning Balance	$ 388,226	$ 308,612	$ 372,331	$ 288,568
Capitalized Costs	38,381	39,113	74,596	74,887
Amortization	(21,627)	(16,855)	(41,947)	(32,585)
Ending Balance	404,980	330,870	404,980	330,870
Costs to obtain a new contract
Deferred contract costs
Beginning Balance	224,409	191,088	218,965	182,543
Capitalized Costs	18,576	20,310	36,336	39,222
Amortization	(12,928)	(10,845)	(25,244)	(21,212)
Ending Balance	230,057	200,553	230,057	200,553
Costs to fulfill a contract
Deferred contract costs
Beginning Balance	163,817	117,524	153,366	106,025
Capitalized Costs	19,805	18,803	38,260	35,665
Amortization	(8,699)	(6,010)	(16,703)	(11,373)
Ending Balance	$ 174,923	$ 130,317	$ 174,923	$ 130,317

Revenue - Remaining Performance

Revenue - Remaining Performance Obligations (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Remaining Performance Obligations
Minimum value of unsatisfied performance obligations on term-based contracts	$ 70,999
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Remaining Performance Obligations
Remaining performance obligation period	24 months

Business Combination (Details)

Business Combination (Details) - USD ($) $ in Thousands	Nov. 30, 2023	Dec. 31, 2023	Jun. 30, 2023
Business Combinations
Goodwill		$ 109,558	$ 102,054
TraceHQ.com, Inc
Business Combinations
Goodwill	$ 7,504
Business Combination, Consideration Transferred	12,086
TraceHQ.com, Inc | Proprietary technology
Business Combinations
Proprietary technology	$ 3,000

Balance Sheet Information - All

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		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022	Jun. 30, 2023
Activity in the allowance for credit losses
Beginning balance			$ 1,620
Charged to expense			463	$ 602
Write-offs			(314)
Ending balance	$ 1,769		1,769
Capitalized internal-use software and accumulated amortization
Capitalized internal-use software	286,103		286,103		$ 248,738
Accumulated amortization	(182,822)		(182,822)		(162,611)
Capitalized internal-use software, net	103,281		103,281		86,127
Property and equipment, net
Property and equipment, gross	148,110		148,110		141,955
Accumulated depreciation	(84,960)		(84,960)		(77,886)
Property and equipment, net	63,150		63,150		64,069
Depreciation expense	5,179	$ 4,579	10,229	9,033
Cost of revenues
Capitalized internal-use software and accumulated amortization
Amortization of capitalized internal-use software	10,676	$ 7,478	20,211	$ 14,520
Office equipment
Property and equipment, net
Property and equipment, gross	2,792		2,792		2,508
Computer equipment
Property and equipment, net
Property and equipment, gross	62,301		62,301		58,670
Furniture and fixtures
Property and equipment, net
Property and equipment, gross	12,986		12,986		12,958
Software
Property and equipment, net
Property and equipment, gross	11,944		11,944		11,127
Leasehold improvements
Property and equipment, net
Property and equipment, gross	48,829		48,829		48,159
Time clocks rented by clients
Property and equipment, net
Property and equipment, gross	$ 9,258		$ 9,258		$ 8,533

Balance Sheet Information - Goo

Balance Sheet Information - Goodwill, Intangible Assets and Accrued Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022	Jun. 30, 2023
Changes in Goodwill
Beginning balance			$ 102,054
Addition attributable to acquisition			7,504
Ending balance	$ 109,558		109,558
Amortizable intangible assets
Amortizable intangible assets, gross	71,569		71,569		$ 68,569
Accumulated amortization	(39,103)		(39,103)		(34,042)
Intangible assets, net	32,466		32,466		34,527
Amortization expense for acquired intangible assets	2,525	$ 2,770	5,061	$ 5,541
Future amortization expense for acquired intangible assets
Remainder of fiscal 2024	5,182		5,182
Fiscal 2025	9,488		9,488
Fiscal 2026	7,869		7,869
Fiscal 2027	5,493		5,493
Fiscal 2028	3,629		3,629
Thereafter	805		805
Intangible assets, net	32,466		32,466		34,527
Components of accrued expenses
Accrued payroll and personnel costs	66,520		66,520		85,019
Operating lease liabilities	8,197		8,197		7,800
Deferred revenue	30,306		30,306		24,539
Other	42,098		42,098		25,929
Total accrued expenses	147,121		147,121		143,287
Proprietary technology
Amortizable intangible assets
Amortizable intangible assets, gross	46,129		$ 46,129		43,129
Weighted average useful life (years)			5 years 10 months 24 days
Client relationships
Amortizable intangible assets
Amortizable intangible assets, gross	22,200		$ 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		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		$ 1,640
Weighted average useful life (years)			5 years

Corporate Investments and Fun_3

Corporate Investments and Funds Held For Clients - Reconciliation (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023	Dec. 31, 2022
Corporate Investments and Funds Held for Clients
Amortized cost of cash and cash equivalents	$ 366,904	$ 288,767
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	366,904	288,767	$ 120,053
Amortized cost of funds held for clients' cash and cash equivalents	2,759,349	2,132,545
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	2,759,349	2,132,545	$ 2,626,114
Available-for-sale securities:
Amortized cost	511,388	494,741
Gross unrealized gains	3,476	45
Gross unrealized losses	(2,477)	(5,916)
Fair value	512,387	488,870
Total investments at amortized cost	3,637,641	2,916,053
Total investments gross unrealized gains	3,476	45
Total investments gross unrealized losses	(2,477)	(5,916)
Total investments	3,638,640	2,910,182
Commercial paper
Available-for-sale securities:
Amortized cost	49,002	110,003
Gross unrealized gains	5	12
Gross unrealized losses	(19)	(138)
Fair value	48,988	109,877
Corporate bonds
Available-for-sale securities:
Amortized cost	204,682	112,262
Gross unrealized gains	2,830	18
Gross unrealized losses	(751)	(1,867)
Fair value	206,761	110,413
Asset-backed securities
Available-for-sale securities:
Amortized cost	40,140	30,061
Gross unrealized gains	336	10
Gross unrealized losses	(160)	(337)
Fair value	40,316	29,734
Certificates of deposit
Available-for-sale securities:
Amortized cost	37,620	68,247
Gross unrealized gains	36	5
Gross unrealized losses	(6)	(93)
Fair value	37,650	68,159
U.S. treasury securities
Available-for-sale securities:
Amortized cost	159,125	158,839
Gross unrealized gains	106	0
Gross unrealized losses	(1,168)	(2,839)
Fair value	158,063	156,000
U.S government agency securities
Available-for-sale securities:
Amortized cost	8,000	8,000
Gross unrealized gains	0	0
Gross unrealized losses	(323)	(513)
Fair value	7,677	7,487
Other
Available-for-sale securities:
Amortized cost	12,819	7,329
Gross unrealized gains	163	0
Gross unrealized losses	(50)	(129)
Fair value	$ 12,932	$ 7,200

Corporate Investments and Fun_4

Corporate Investments and Funds Held For Clients - Classification (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022	Jun. 30, 2023
Corporate Investments and Funds Held for Clients
Cash and cash equivalents	$ 366,904	$ 120,053	$ 366,904	$ 120,053	$ 288,767
Funds held for clients	3,271,736		3,271,736		2,621,415
Total investments	3,638,640		3,638,640		2,910,182
Gross unrealized losses on available-for-sale securities in unrealized loss positions for less than 12 months	(268)		(268)		(2,305)
Fair value of available-for-sale securities in unrealized loss positions for less than 12 months	165,436		165,436		344,035
Gross unrealized losses on available-for-sale securities in unrealized loss positions for greater than 12 months	(2,209)		(2,209)		(3,611)
Fair value of available-for-sale securities in unrealized loss positions for greater than 12 months	121,001		121,001		104,818
Gross unrealized losses on available-for-sale securities in unrealized loss positions	(2,477)		(2,477)		(5,916)
Fair value of available-for-sale securities in unrealized loss positions	286,437		286,437		448,853
Credit impairment losses	0	0	0	0
Realized gains or losses	0	$ 0	0	$ 0
Commercial paper
Corporate Investments and Funds Held for Clients
Gross unrealized losses on available-for-sale securities in unrealized loss positions for less than 12 months	(19)		(19)		(138)
Fair value of available-for-sale securities in unrealized loss positions for less than 12 months	32,846		32,846		96,665
Gross unrealized losses on available-for-sale securities in unrealized loss positions for greater than 12 months	0		0		0
Fair value of available-for-sale securities in unrealized loss positions for greater than 12 months	0		0		0
Gross unrealized losses on available-for-sale securities in unrealized loss positions	(19)		(19)		(138)
Fair value of available-for-sale securities in unrealized loss positions	32,846		32,846		96,665
Corporate bonds
Corporate Investments and Funds Held for Clients
Gross unrealized losses on available-for-sale securities in unrealized loss positions for less than 12 months	(60)		(60)		(695)
Fair value of available-for-sale securities in unrealized loss positions for less than 12 months	24,428		24,428		71,089
Gross unrealized losses on available-for-sale securities in unrealized loss positions for greater than 12 months	(691)		(691)		(1,172)
Fair value of available-for-sale securities in unrealized loss positions for greater than 12 months	31,909		31,909		32,807
Gross unrealized losses on available-for-sale securities in unrealized loss positions	(751)		(751)		(1,867)
Fair value of available-for-sale securities in unrealized loss positions	56,337		56,337		103,896
Asset-backed securities
Corporate Investments and Funds Held for Clients
Gross unrealized losses on available-for-sale securities in unrealized loss positions for less than 12 months	(5)		(5)		(233)
Fair value of available-for-sale securities in unrealized loss positions for less than 12 months	6,171		6,171		23,313
Gross unrealized losses on available-for-sale securities in unrealized loss positions for greater than 12 months	(155)		(155)		(104)
Fair value of available-for-sale securities in unrealized loss positions for greater than 12 months	9,906		9,906		2,038
Gross unrealized losses on available-for-sale securities in unrealized loss positions	(160)		(160)		(337)
Fair value of available-for-sale securities in unrealized loss positions	16,077		16,077		25,351
Certificates of deposit
Corporate Investments and Funds Held for Clients
Gross unrealized losses on available-for-sale securities in unrealized loss positions for less than 12 months	(6)		(6)		(93)
Fair value of available-for-sale securities in unrealized loss positions for less than 12 months	21,394		21,394		52,254
Gross unrealized losses on available-for-sale securities in unrealized loss positions for greater than 12 months	0		0		0
Fair value of available-for-sale securities in unrealized loss positions for greater than 12 months	0		0		0
Gross unrealized losses on available-for-sale securities in unrealized loss positions	(6)		(6)		(93)
Fair value of available-for-sale securities in unrealized loss positions	21,394		21,394		52,254
U.S. treasury securities
Corporate Investments and Funds Held for Clients
Gross unrealized losses on available-for-sale securities in unrealized loss positions for less than 12 months	(178)		(178)		(1,075)
Fair value of available-for-sale securities in unrealized loss positions for less than 12 months	80,597		80,597		95,388
Gross unrealized losses on available-for-sale securities in unrealized loss positions for greater than 12 months	(990)		(990)		(1,764)
Fair value of available-for-sale securities in unrealized loss positions for greater than 12 months	67,913		67,913		60,612
Gross unrealized losses on available-for-sale securities in unrealized loss positions	(1,168)		(1,168)		(2,839)
Fair value of available-for-sale securities in unrealized loss positions	148,510		148,510		156,000
U.S government agency securities
Corporate Investments and Funds Held for Clients
Gross unrealized losses on available-for-sale securities in unrealized loss positions for less than 12 months	0		0		0
Fair value of available-for-sale securities in unrealized loss positions for less than 12 months	0		0		0
Gross unrealized losses on available-for-sale securities in unrealized loss positions for greater than 12 months	(323)		(323)		(513)
Fair value of available-for-sale securities in unrealized loss positions for greater than 12 months	7,677		7,677		7,487
Gross unrealized losses on available-for-sale securities in unrealized loss positions	(323)		(323)		(513)
Fair value of available-for-sale securities in unrealized loss positions	7,677		7,677		7,487
Other
Corporate Investments and Funds Held for Clients
Gross unrealized losses on available-for-sale securities in unrealized loss positions for less than 12 months	0		0		(71)
Fair value of available-for-sale securities in unrealized loss positions for less than 12 months	0		0		5,326
Gross unrealized losses on available-for-sale securities in unrealized loss positions for greater than 12 months	(50)		(50)		(58)
Fair value of available-for-sale securities in unrealized loss positions for greater than 12 months	3,596		3,596		1,874
Gross unrealized losses on available-for-sale securities in unrealized loss positions	(50)		(50)		(129)
Fair value of available-for-sale securities in unrealized loss positions	$ 3,596		$ 3,596		$ 7,200

Corporate Investments and Fun_5

Corporate Investments and Funds Held For Clients - Maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023
Expected maturities of available-for-sale securities, amortized cost
One year or less	$ 214,684
One year to two years	152,062
Two years to three years	85,613
Three years to five years	59,029
Total available-for-sale securities	511,388	$ 494,741
Expected maturities of available-for-sale securities, fair value
One year or less	213,663
One year to two years	151,098
Two years to three years	86,714
Three years to five years	60,912
Total available-for-sale securities	$ 512,387	$ 488,870

Fair Value Measurement (Details

Fair Value Measurement (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023	Dec. 31, 2022
Fair value measurement
Cash and cash equivalents	$ 366,904	$ 288,767	$ 120,053
Funds held for clients' cash and cash equivalents	2,759,349	2,132,545	$ 2,626,114
Available-for-sale securities:
Total available-for-sale securities	512,387	488,870
Total investments	3,638,640	2,910,182
Level 1
Fair value measurement
Cash and cash equivalents	366,904	288,767
Funds held for clients' cash and cash equivalents	2,759,349	2,132,545
Available-for-sale securities:
Total available-for-sale securities	0	0
Total investments	3,126,253	2,421,312
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	512,387	488,870
Total investments	512,387	488,870
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
Commercial paper
Available-for-sale securities:
Total available-for-sale securities	48,988	109,877
Commercial paper | Level 1
Available-for-sale securities:
Total available-for-sale securities	0	0
Commercial paper | Level 2
Available-for-sale securities:
Total available-for-sale securities	48,988	109,877
Commercial paper | Level 3
Available-for-sale securities:
Total available-for-sale securities	0	0
Corporate bonds
Available-for-sale securities:
Total available-for-sale securities	206,761	110,413
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	206,761	110,413
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	40,316	29,734
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	40,316	29,734
Asset-backed securities | Level 3
Available-for-sale securities:
Total available-for-sale securities	0	0
Certificates of deposit
Available-for-sale securities:
Total available-for-sale securities	37,650	68,159
Certificates of deposit | Level 1
Available-for-sale securities:
Total available-for-sale securities	0	0
Certificates of deposit | Level 2
Available-for-sale securities:
Total available-for-sale securities	37,650	68,159
Certificates of deposit | 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	158,063	156,000
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	158,063	156,000
U.S. treasury securities | Level 3
Available-for-sale securities:
Total available-for-sale securities	0	0
U.S government agency securities
Available-for-sale securities:
Total available-for-sale securities	7,677	7,487
U.S government agency securities | Level 1
Available-for-sale securities:
Total available-for-sale securities	0	0
U.S government agency securities | Level 2
Available-for-sale securities:
Total available-for-sale securities	7,677	7,487
U.S government agency securities | Level 3
Available-for-sale securities:
Total available-for-sale securities	0	0
Other
Available-for-sale securities:
Total available-for-sale securities	12,932	7,200
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	12,932	7,200
Other | Level 3
Available-for-sale securities:
Total available-for-sale securities	$ 0	$ 0

Debt (Details)

Debt (Details) - Five-year revolving credit agreement - Senior secured debt - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023	Aug. 31, 2022
Debt
Maximum borrowing capacity			$ 550,000
Maximum borrowing capacity, subject to additional lender commitments and satisfaction of other requirements			$ 825,000
Borrowings under credit facility	$ 0	$ 0
Minimum
Debt
Interest coverage ratio			2
Maximum
Debt
Net total leverage ratio			4
Net total leverage ratio with step-up			4.50
SOFR | Minimum
Debt
Margin on base rate			0.875%
SOFR | Maximum
Debt
Margin on base rate			1.50%
Adjusted base rate | Minimum
Debt
Margin on base rate			0%
Adjusted base rate | Maximum
Debt
Margin on base rate			0.50%

Stock-Based Compensation - Gene

Stock-Based Compensation - General Information (Details) - Equity Incentive Plans shares in Thousands	Dec. 31, 2023 shares
Equity Incentive Plans
Number of shares allocated but not yet issued that are subject to outstanding options or awards (in shares)	1,961
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	2,009

Stock-Based Compensation - Comp

Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Stock-Based Compensation
Total stock-based compensation expense	$ 43,208	$ 43,551	$ 82,213	$ 83,364
Stock-based compensation expense capitalized in internal-use software costs	3,916	3,154	7,965	6,096
Cost of revenues
Stock-Based Compensation
Total stock-based compensation expense	5,475	5,232	10,418	9,273
Sales and marketing
Stock-Based Compensation
Total stock-based compensation expense	10,043	10,795	19,268	20,354
Research and development
Stock-Based Compensation
Total stock-based compensation expense	11,313	11,292	21,071	20,094
General and administrative
Stock-Based Compensation
Total stock-based compensation expense	$ 16,377	$ 16,232	$ 31,456	$ 33,643

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
	Jun. 30, 2023	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Options Outstanding, Number of Shares
Beginning balance (in shares)				288
Options granted (in shares)				0
Options exercised (in shares)				(28)
Ending balance (in shares)	288	260		260
Options Outstanding, Weighted average exercise price
Beginning balance (in dollars per share)				$ 23.63
Options exercised (in dollars per share)				17.43
Ending balance (in dollars per share)	$ 23.63	$ 24.30		$ 24.30
Options Additional Disclosures
Weighted average remaining contractual term (years)	1 year 2 months 12 days			8 months 12 days
Weighted average remaining contractual term of options vested and exercisable at the end of the period (years)				8 months 12 days
Aggregate intrinsic value at the beginning of the period				$ 46,129
Aggregate intrinsic value at the end of the period	$ 46,129	$ 36,392		$ 36,392
Options vested and exercisable at the end of the period (in shares)		260		260
Options vested and exercisable at the end of the period, weighted average exercise price (in dollars per share)		$ 24.30		$ 24.30
Options vested and exercisable, aggregate intrinsic value		$ 36,392		$ 36,392
Total intrinsic value of options exercised		$ 2,206	$ 1,484	$ 4,700	$ 49,627

Stock-Based Compensation - RSU

Stock-Based Compensation - RSU activity (Details) - Restricted stock units shares in Thousands	6 Months Ended
	Dec. 31, 2023 $ / shares shares
RSUs Outstanding, Units
Beginning balance (in shares) | shares	1,242
RSUs granted (in shares) | shares	753
RSUs vested (in shares) | shares	429
RSUs forfeited (in shares) | shares	(62)
Ending balance (in shares) | shares	1,504
RSUs Outstanding, Weighted average grant date fair value
Beginning balance (in dollars per share) | $ / shares	$ 225.30
RSUs granted (in dollars per share) | $ / shares	193.88
RSUs vested (in dollars per share) | $ / shares	191.68
RSUs forfeited (in dollars per share) | $ / shares	213.01
Ending balance (in dollars per share) | $ / shares	$ 219.66
Maximum
Equity Incentive Plans
Vesting period	4 years

Stock-Based Compensation - MSU

Stock-Based Compensation - MSU activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Dec. 31, 2023 USD ($) $ / shares shares
Unrecognized Compensation Costs Not Yet Recognized, Net of Estimated Forfeitures Related to Unvested RSUs and MSUs
Total unrecognized compensation cost, net of estimated forfeitures | $	$ 198,250
Weighted average period to recognize unrecognized compensation cost (in years)	1 year 10 months 24 days
Market share units
Equity Incentive Plans
Vesting period	3 years
Maximum percentage of target number of shares subject to each MSU	200%
MSUs Outstanding, Units
Beginning balance (in shares) | shares	171
MSUs granted (in shares) | shares	86
MSUs vested (in shares) | shares	(60)
Ending balance (in shares) | shares	197
MSUs Outstanding, Weighted average grant date fair value
Beginning balance (in dollars per share) | $ / shares	$ 320.38
MSUs granted (in dollars per share) | $ / shares	256.66
MSUs vested (in dollars per share) | $ / shares	178.04
Ending balance (in dollars per share) | $ / shares	$ 335.84

Stock-Based Compensation - MS_2

Stock-Based Compensation - MSU Information (Details) - Market share units	6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Valuation assumptions:
Expected dividend yield	0%	0%
Expected volatility	44.50%
Expected term (years)	3 years 14 days
Risk‑free interest rate	4.58%
Minimum
Valuation assumptions:
Expected volatility		51%
Expected term (years)		2 years 9 months
Risk‑free interest rate		3.11%
Maximum
Valuation assumptions:
Expected volatility		52.70%
Expected term (years)		3 years 14 days
Risk‑free interest rate		4.01%

Income Taxes (Details)

Income Taxes (Details)	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Effective tax rate for the period (as a percent)	28.80%	14.30%	25.80%	(82.90%)
U.S. federal income tax rate (as a percent)	21%	21%	21%	21%

Net Income Per Share (Details)

Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Numerator:
Net income	$ 38,116	$ 15,600	$ 72,633	$ 45,952
Weighted-average shares used in computing net income per share:
Basic (in shares)	56,244	55,721	56,140	55,587
Weighted-average effect of potentially dilutive shares:
Employee stock options, restricted stock units and market share units (in shares)	611	753	766	972
Diluted (in shares)	56,855	56,474	56,906	56,559
Net income per share:
Basic (in dollars per share)	$ 0.68	$ 0.28	$ 1.29	$ 0.83
Diluted (in dollars per share)	$ 0.67	$ 0.28	$ 1.28	$ 0.81
Anti-dilutive securities excluded (in shares)	39	673	32	661
Market share units
Net income per share:
Anti-dilutive securities excluded (in shares)	17	57	17	60
Restricted stock units
Net income per share:
Anti-dilutive securities excluded (in shares)	22	616	15	601