Cover
Cover - shares | 3 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-40640 | |
Entity Registrant Name | PAYCOR HCM, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-1813909 | |
Entity Address, Address Line One | 4811 Montgomery Road | |
Entity Address, City or Town | Cincinnati | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 45212 | |
City Area Code | 800 | |
Local Phone Number | 381-0053 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | PYCR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 175,855,994 | |
Entity Central Index Key | 0001839439 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 98,161 | $ 133,041 |
Accounts receivable, net | 23,359 | 21,511 |
Deferred contract costs | 41,398 | 37,769 |
Prepaid expenses | 10,954 | 9,421 |
Other current assets | 2,490 | 1,874 |
Current assets before funds held for clients | 176,362 | 203,616 |
Funds held for clients | 933,307 | 1,715,916 |
Total current assets | 1,109,669 | 1,919,532 |
Property and equipment, net | 30,789 | 31,675 |
Operating lease right-of-use assets | 22,732 | 0 |
Goodwill | 749,221 | 750,155 |
Intangible assets, net | 322,645 | 263,069 |
Capitalized software, net | 42,696 | 40,002 |
Long-term deferred contract costs | 133,818 | 125,705 |
Other long-term assets | 1,662 | 1,179 |
Total assets | 2,413,232 | 3,131,317 |
Current liabilities: | ||
Accounts payable | 15,512 | 13,945 |
Accrued expenses and other current liabilities | 18,837 | 13,907 |
Accrued payroll and payroll related expenses | 25,873 | 44,592 |
Deferred revenue | 11,333 | 11,742 |
Current liabilities before client fund obligations | 71,555 | 84,186 |
Client fund obligations | 938,836 | 1,719,047 |
Total current liabilities | 1,010,391 | 1,803,233 |
Deferred income taxes | 26,222 | 31,895 |
Long-term operating leases | 23,180 | 0 |
Other long-term liabilities | 79,580 | 11,458 |
Total liabilities | 1,139,373 | 1,846,586 |
Commitments and contingencies (Note 15) | ||
Stockholders' equity: | ||
Common stock $0.001 par value per share, 500,000,000 shares authorized, 175,643,109 shares outstanding at September 30, 2022 and 174,909,539 shares outstanding at June 30, 2022 | 176 | 175 |
Treasury stock, at cost, 10,620,260 shares at September 30, 2022 and June 30, 2022 | (245,074) | (245,074) |
Preferred stock, $0.001 par value, 50,000,000 shares authorized, — shares outstanding at September 30, 2022 and June 30, 2022 | 0 | 0 |
Additional paid-in capital | 1,947,102 | 1,926,800 |
Accumulated deficit | (424,441) | (395,389) |
Accumulated other comprehensive loss | (3,904) | (1,781) |
Total stockholders' equity | 1,273,859 | 1,284,731 |
Total liabilities and stockholders' equity | $ 2,413,232 | $ 3,131,317 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Jun. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares outstanding (in shares) | 175,643,109 | 174,909,539 |
Treasury stock (in shares) | 10,620,260 | 10,620,260 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||
Recurring and other revenue | $ 114,169 | $ 92,416 |
Interest income on funds held for clients | 4,134 | 316 |
Total revenues | 118,303 | 92,732 |
Cost of revenues | 43,185 | 45,611 |
Gross profit | 75,118 | 47,121 |
Operating expenses: | ||
Sales and marketing | 48,195 | 45,788 |
General and administrative | 47,911 | 43,411 |
Research and development | 12,402 | 10,191 |
Total operating expenses | 108,508 | 99,390 |
Loss from operations | (33,390) | (52,269) |
Other (expense) income: | ||
Interest expense | (1,087) | (235) |
Other | 445 | 1,224 |
Loss before benefit for income taxes | (34,032) | (51,280) |
Income tax benefit | (4,980) | (9,244) |
Net loss | (29,052) | (42,036) |
Less: Accretion of redeemable noncontrolling interests | 0 | 11,621 |
Net loss attributable to Paycor HCM, Inc. | $ (29,052) | $ (53,657) |
Basic net loss attributable to Paycor HCM, Inc. per share (in dollars per share) | $ (0.17) | $ (0.32) |
Diluted net loss attributable to Paycor HCM, Inc. per share (in dollars per share) | $ (0.17) | $ (0.32) |
Weighted average common shares outstanding: | ||
Basic (in shares) | 175,512,577 | 166,459,168 |
Diluted (in shares) | 175,512,577 | 166,459,168 |
Recurring and other revenue | Service [Member] | Service [Member] |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (29,052) | $ (42,036) |
Other comprehensive loss, net of tax: | ||
Unrealized loss on foreign currency translation | (423) | (153) |
Unrealized loss on available-for-sale securities, net of tax | (1,700) | (61) |
Other comprehensive loss, net of tax | (2,123) | (214) |
Comprehensive loss | (31,175) | (42,250) |
Less: Comprehensive income attributable to redeemable noncontrolling interests | 0 | 11,621 |
Comprehensive loss attributable to Paycor HCM, Inc. | $ (31,175) | $ (53,871) |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Stockholder's Equity - USD ($) $ in Thousands | Total | Preferred Stock Series A Preferred Stock | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Preferred stock, shares outstanding, beginning balance (in shares) at Jun. 30, 2021 | 7,715 | ||||||
Stockholders' equity, beginning balance at Jun. 30, 2021 | $ 878,639 | $ 262,772 | $ 141 | $ (245,074) | $ 1,133,399 | $ (275,751) | $ 3,152 |
Common stock, shares outstanding, beginning balance (in shares) at Jun. 30, 2021 | 141,097,740 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss attributable to Paycor HCM, Inc. | (53,657) | (53,657) | |||||
Stock-based compensation expense | 21,812 | 21,812 | |||||
Issuance of common stock sold in the initial public offering, net of offering costs and underwriting discount (in shares) | 21,275,000 | ||||||
Issuance of common stock sold in the initial public offering, net of offering costs and underwriting discount | 454,147 | $ 21 | 454,126 | ||||
Conversion of Series A Preferred Stock to common stock upon initial public offering (in shares) | 7,715 | 11,705,039 | |||||
Conversion of Series A Preferred Stock to common stock upon initial public offering | 0 | $ (262,772) | $ 12 | 262,760 | |||
Issuance of common stock upon vesting of restricted stock units at initial public offering (in shares) | 352,124 | ||||||
Other comprehensive (loss) income | (214) | (214) | |||||
Other | (10) | 1,943 | (1,953) | ||||
Preferred stock, shares outstanding, ending balance (in shares) at Sep. 30, 2021 | 0 | ||||||
Stockholders' equity, ending balance at Sep. 30, 2021 | $ 1,300,717 | $ 0 | $ 174 | (245,074) | 1,874,040 | (329,408) | 985 |
Common stock, shares outstanding, ending balance (in shares) at Sep. 30, 2021 | 174,429,903 | ||||||
Preferred stock, shares outstanding, beginning balance (in shares) at Jun. 30, 2022 | 0 | 0 | |||||
Stockholders' equity, beginning balance at Jun. 30, 2022 | $ 1,284,731 | $ 0 | $ 175 | (245,074) | 1,926,800 | (395,389) | (1,781) |
Common stock, shares outstanding, beginning balance (in shares) at Jun. 30, 2022 | 174,909,539 | 174,909,539 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss attributable to Paycor HCM, Inc. | $ (29,052) | (29,052) | |||||
Stock-based compensation expense | 16,951 | 16,951 | |||||
Net settlement for taxes | (1,293) | (1,293) | |||||
Issuance of common stock under employee stock plans (in shares) | 733,570 | ||||||
Issuance of common stock under employee stock plans | 4,645 | $ 1 | 4,644 | ||||
Other comprehensive (loss) income | $ (2,123) | (2,123) | |||||
Preferred stock, shares outstanding, ending balance (in shares) at Sep. 30, 2022 | 0 | 0 | |||||
Stockholders' equity, ending balance at Sep. 30, 2022 | $ 1,273,859 | $ 0 | $ 176 | $ (245,074) | $ 1,947,102 | $ (424,441) | $ (3,904) |
Common stock, shares outstanding, ending balance (in shares) at Sep. 30, 2022 | 175,643,109 | 175,643,109 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (29,052) | $ (42,036) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 1,200 | 1,718 |
Amortization of intangible assets and software | 29,676 | 36,870 |
Amortization of deferred contract costs | 10,028 | 6,634 |
Stock-based compensation expense | 16,951 | 21,812 |
Amortization of debt acquisition costs | 23 | 20 |
Deferred tax benefit | (5,000) | (9,253) |
Bad debt expense | 562 | 794 |
Loss (gain) on sale of investments | 47 | (6) |
Gain on installment sale | 0 | (1,359) |
Loss on foreign currency exchange | 424 | 222 |
Loss on lease exit | 509 | 0 |
Naming rights accretion expense | 893 | 0 |
Changes in assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | (2,450) | (316) |
Prepaid expenses and other assets | (1,841) | (4,338) |
Accounts payable | 1,358 | 801 |
Accrued liabilities and other | (25,220) | (9,285) |
Deferred revenue | (439) | (1,185) |
Deferred contract costs | (21,770) | (18,338) |
Net cash used in operating activities | (24,101) | (17,245) |
Cash flows from investing activities: | ||
Purchases of client funds available-for-sale securities | (247,927) | (39,708) |
Proceeds from sale and maturities of client funds available-for-sale securities | 143,107 | 39,932 |
Purchase of property and equipment | (331) | (803) |
Proceeds from note receivable on installment sale | 0 | 3,040 |
Acquisition of intangible assets | (4,713) | (195) |
Internally developed software costs | (9,096) | (7,524) |
Net cash used in investing activities | (118,960) | (5,258) |
Cash flows from financing activities: | ||
Net change in cash and cash equivalents held to satisfy client funds obligations | (775,923) | 906,626 |
Proceeds from line-of-credit | 0 | 3,500 |
Repayments of line-of-credit | 0 | (52,600) |
Repayments of debt and capital lease obligations | (70) | 0 |
Proceeds from the issuance of common stock sold in the IPO, net of offering costs and underwriting discount | 0 | 455,040 |
Redemption of Redeemable Series A Preferred Stock (acquisition of non-controlling interest) | 0 | (260,044) |
Withholding taxes paid related to net share settlements | (1,293) | 0 |
Proceeds from exercise of stock options | 345 | 0 |
Proceeds from employee stock purchase plan | 4,300 | 0 |
Other financing activities | 0 | (395) |
Net cash (used in) provided by financing activities | (772,641) | 1,052,127 |
Impact of foreign exchange on cash and cash equivalents | (14) | (3) |
Net change in cash, cash equivalents, restricted cash and short-term investments, and funds held for clients | (915,716) | 1,029,621 |
Cash, cash equivalents, restricted cash and short-term investments, and funds held for clients, beginning of period | 1,682,923 | 560,000 |
Cash, cash equivalents, restricted cash and short-term investments, and funds held for clients, end of period | 767,207 | 1,589,621 |
Supplemental disclosure of non-cash investing, financing and other cash flow information: | ||
Capital expenditures in accounts payable | 9 | 48 |
Cash paid during the year for interest | 0 | 150 |
Reconciliation of cash, cash equivalents, restricted cash and short-term investments, and funds held for clients to the Consolidated Balance Sheets | ||
Cash and cash equivalents | 98,161 | 125,787 |
Funds held for clients | 669,046 | 1,463,834 |
Total cash, cash equivalents, restricted cash and short-term investments, and funds held for clients | $ 767,207 | $ 1,589,621 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 3 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | ORGANIZATION AND DESCRIPTION OF BUSINESS: Paycor HCM, Inc. (“Paycor HCM” or “the Company”) is a leading provider of human capital management (“HCM”) software located primarily in the United States (“U.S.”). Paycor’s solutions target small and medium-sized businesses with 10-1,000 employees. Solutions provided include payroll, human resources (“HR”) services, talent management, workforce management, benefits administration, reporting and analytics, and other payroll-related services. Services are generally provided in a Software-as-a-Service (“SaaS”) delivery model utilizing a cloud-based platform. Paycor HCM is a holding company with no material operating assets or operations that was formed on August 24, 2018 to effect the acquisition of Paycor, Inc. and its subsidiaries (“Paycor”) by certain funds advised by Apax Partners LLP, a leading global private equity advisory firm (“Apax Partners”). On September 7, 2018, Paycor HCM, through its subsidiary companies, entered into the Agreement and Plan of Merger to acquire Paycor (the “Apax Acquisition”). The Apax Acquisition closed on November 2, 2018. As a result of the Apax Acquisition, Paycor is an indirect controlled subsidiary of Paycor HCM. Initial Public Offering On July 23, 2021, the Company completed an initial public offering (“IPO”) of 21,275,000 shares of its common stock, $0.001 par value per share, at an offering price of $23.00 per share (the “IPO Price”). In aggregate, proceeds from the IPO were approximately $454,147, which is net of approximately $30,583 in underwriters’ discount and $4,595 of offering costs. During the three months ended September 30, 2021, $3,702 of offering costs were paid. Additionally, upon the closing of the IPO: • all of the Company’s outstanding shares of Series A Preferred Stock were automatically converted into 11,705,039 shares of the Company’s common stock; • the Company used a portion of the proceeds to effect the redemption of all of the outstanding shares of the Series A Redeemable Preferred Stock (acquisition of non-controlling interest) (“Series A Redeemable Preferred Stock” or “Redeemable Noncontrolling Interest”) at a redemption price of 101% of the liquidation preference, plus the amount of all accrued dividends for the then current and all prior dividend payment periods, for a total of $260,044; • the outstanding Long Term Incentive Plan Units (“LTIP Units”) converted to 1,761,578 restricted stock units (“RSUs”) and the Company began recognizing compensation expense equal to the aggregate dollar value over the requisite two-year service period; and • the performance-based incentive units granted under the Pride Aggregator, L.P. Management Equity Plan (“MEP”) converted to time-based incentive units, with 25% vesting upon successive 6-month anniversary dates for the 24 months beginning on the date of the Company’s IPO. In connection with the Company’s IPO, the Company executed a 1,517.18 for 1 share stock split (“IPO Stock Split”) relating to its common stock. All share and per share amounts have been retroactively adjusted to reflect the IPO Stock Split for all periods presented within the unaudited condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of presentation and consolidation The accompanying interim unaudited condensed consolidated financial statements of the Company were prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and include all of the information and disclosures required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim reporting. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended June 30, 2022 in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on August 24, 2022. The unaudited condensed consolidated financial statements for interim periods do not include all disclosures required by U.S. GAAP for annual financial statements and are not necessarily indicative of results for the future interim periods and the full fiscal year ending June 30, 2023. Adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of the unaudited condensed consolidated financial position, results of operations and cash flows at the dates and for the periods presented have been included. All intercompany transactions and balances have been eliminated in consolidation. Use of estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the recognition of revenue, evaluation of potential impairment of goodwill and intangible assets, and the valuation of stock-based compensation. The Company’s results of operations and financial condition can also be affected by economic, political, legislative, regulatory and legal actions, including but not limited to health epidemics and pandemics and their resulting economic impact. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies can have a significant effect on the Company’s results of operations and financial condition. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings. Accounts receivable, net Accounts receivable balances are shown on the condensed consolidated balance sheets net of the allowance for doubtful accounts of $3,810 and $3,268 as of September 30, 2022 and June 30, 2022, respectively. The allowance for doubtful accounts considers factors such as historical experience, credit quality, age of the accounts receivable balance and current and forecasted economic conditions that may affect a client’s ability to pay. The Company performs ongoing credit evaluations and generally requires no collateral from clients. Management reviews individual accounts as they become past due to determine collectability. The allowance for doubtful accounts is adjusted periodically based on management’s consideration of past due accounts. Individual accounts are charged against the allowance when all reasonable collection efforts have been exhausted. Sales and marketing Sales and marketing expenses consist of costs associated with the Company’s direct sales and marketing staff, including employee-related costs, marketing, advertising and promotion expenses, and other related costs. Advertising and promotion costs are expensed as incurred. Advertising and promotion expense totaled approximately $5,918 and $4,986 for the three months ended September 30, 2022 and 2021, respectively. Stock-based compensation The Company recognizes all employee and director stock-based compensation as a cost in the unaudited condensed consolidated financial statements. Equity-classified awards are measured at the grant date fair value of the award and expense is recognized, net of actual forfeitures, on a straight-line basis over the requisite service period for the award. The Company establishes grant date fair value of RSUs based on the fair value of the Company's underlying common stock. The Company estimates the grant date fair value of stock options, including common stock purchased as a part of the Company's Employee Stock Purchase Plan ("ESPP"), using the Black-Scholes option pricing model, which requires management to make assumptions with respect to the fair value of the Company's award on the grant date, including the expected term of the award, the expected volatility of the Company's stock calculated based on a period of time generally commensurate with the expected term of the award, the expected risk-free rate of return, and expected dividend yields of the Company's stock. The Company recognized stock-based compensation cost for the three months ended September 30, 2022 and 2021 of $16,951 and $21,812, respectively. Leases The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (“ASC 842”), as subsequently amended, on July 1, 2022, through the modified retrospective method applied to those contracts that were not completed as of that date. ASC 842 requires entities to recognize lease assets and lease liabilities and disclose key information about leasing arrangements for certain leases. Results for reporting periods beginning after July 1, 2022 are presented under ASC 842, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company’s historical accounting treatment. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. Adoption of the new standard resulted in recording additional lease assets and liabilities of $16,818 and $23,987, respectively, as of July 1, 2022. Pending accounting pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses” (Topic 326). This update establishes a new approach to estimate credit losses on certain types of financial instruments. The update requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The amended standard will also update the impairment model for available-for-sale debt securities, requiring entities to determine whether all or a portion of the unrealized loss on any such securities is a credit loss. The Company is currently evaluating this standard and the potential effects of these changes to its unaudited condensed consolidated financial statements and expects to adopt this new standard in the fiscal year beginning July 1, 2023. |
REVENUE
REVENUE | 3 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE: The following table disaggregates revenue from contracts by recurring fees and implementation services and other, which the Company believes depicts the nature, amount and timing of its revenue: Three Months Ended September 30, 2022 2021 Recurring fees $ 111,062 $ 89,209 Implementation services and other 3,107 3,207 Recurring and other revenue $ 114,169 $ 92,416 Deferred revenue The Company recognizes deferred revenue for nonrefundable upfront fees as well as for subscription services related to certain ancillary products invoiced prior to the satisfaction of the performance obligation. The nonrefundable upfront fees related to implementation services are typically included on the client’s first invoice. Implementation fees are deferred and recognized as revenue over an estimated 24-month period to which the material right exists, which is the period the client is expected to benefit from not having to pay an additional nonrefundable implementation fee upon renewal of the service. The following table summarizes the changes in deferred revenue related to the nonrefundable upfront fees and recurring subscription services: Three Months Ended September 30, 2022 2021 Balance, beginning of period $ 17,046 $ 16,047 Deferral of revenue 4,270 3,612 Revenue recognized (4,709) (4,799) Impact of foreign exchange (117) (49) Balance, end of period $ 16,490 $ 14,811 Deferred revenue is recorded within deferred revenue and other long-term liabilities on the condensed consolidated balance sheets. The Company will recognize deferred revenue of $9,409 in fiscal year 2023, $5,246 in fiscal year 2024, $1,215 in fiscal year 2025 and $620 thereafter. Deferred contract costs As of and for the Three Months Ended September 30, 2022 Beginning Balance Capitalization of Costs Amortization Ending Balance Costs to obtain a contract $ 72,342 $ 8,993 $ (4,441) $ 76,894 Costs to fulfill a contract 91,132 12,777 (5,587) 98,322 Total $ 163,474 $ 21,770 $ (10,028) $ 175,216 As of and for the Three Months Ended September 30, 2021 Beginning Balance Capitalization of Costs Amortization Ending Balance Costs to obtain a contract $ 52,926 $ 8,074 $ (3,023) $ 57,977 Costs to fulfill a contract 62,457 10,264 (3,611) 69,110 Total $ 115,383 $ 18,338 $ (6,634) $ 127,087 |
BUSINESS COMBINATION AND ASSET
BUSINESS COMBINATION AND ASSET ACQUISITION | 3 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATION AND ASSET ACQUISITION | BUSINESS COMBINATION AND ASSET ACQUISITION: Asset Acquisition On February 4, 2021, the Company acquired payroll, timekeeping and HCM service customer relationships from another large provider of HCM services for an initial purchase price of approximately $9,300, which included approximately $50 of transaction costs. As part of this asset purchase, the Company was required to make quarterly contingent payments and a final payment to the seller based on the revenue generated by the acquired clients over a 12-month period. Contingent payments made for the three months ended September 30, 2022 and 2021 were $4,259 and $195, respectively. As of September 30, 2022, all contingent payments have been made. |
BUSINESS COMBINATION AND ASSET ACQUISITION | BUSINESS COMBINATION AND ASSET ACQUISITION: Asset Acquisition On February 4, 2021, the Company acquired payroll, timekeeping and HCM service customer relationships from another large provider of HCM services for an initial purchase price of approximately $9,300, which included approximately $50 of transaction costs. As part of this asset purchase, the Company was required to make quarterly contingent payments and a final payment to the seller based on the revenue generated by the acquired clients over a 12-month period. Contingent payments made for the three months ended September 30, 2022 and 2021 were $4,259 and $195, respectively. As of September 30, 2022, all contingent payments have been made. |
FUNDS HELD FOR CLIENTS
FUNDS HELD FOR CLIENTS | 3 Months Ended |
Sep. 30, 2022 | |
Funds Held For Clients [Abstract] | |
FUNDS HELD FOR CLIENTS | FUNDS HELD FOR CLIENTS: Funds held for clients are as follows: September 30, 2022 Amortized Gross Gross Fair Demand deposit accounts and other cash equivalents $ 669,046 $ — $ — $ 669,046 U.S. Treasury and direct obligations of U.S. government agencies 61,330 — (670) 60,660 Corporate bonds 175,159 12 (3,684) 171,487 Commercial paper 16,296 1 (3) 16,294 Other securities 16,278 — (458) 15,820 $ 938,109 $ 13 $ (4,815) $ 933,307 June 30, 2022 Amortized Gross Gross Fair Demand deposit accounts and other cash equivalents $ 1,549,882 $ — $ — $ 1,549,882 U.S. Treasury and direct obligations of U.S. government agencies 29,367 — (290) 29,077 Corporate bonds 112,753 4 (1,894) 110,863 Commercial paper 6,642 2 (3) 6,641 Other securities 19,817 2 (366) 19,453 $ 1,718,461 $ 8 $ (2,553) $ 1,715,916 Other securities are primarily comprised of collateralized and other mortgage obligations, municipal obligations, and certificates of deposit. The Company is exposed to interest rate risk as rate volatility will cause fluctuations in the earnings potential of future investments. The Company does not utilize derivative financial instruments to manage interest rate risk. The Company reviews its investments on an ongoing basis to determine if any are other-than-temporarily impaired due to changes in credit risk or other potential valuation concerns. The Company has no material individual securities that have been in a continuous unrealized loss position greater than twelve months. The Company believes these unrealized losses result from changes in interest rates rather than credit risk, and therefore does not believe the related investments are other-than-temporarily impaired. Additionally, the Company believes it will recover its cost basis in the securities with unrealized losses and has the ability to hold the securities until they recover in value and had no intent to sell them at September 30, 2022. Expected maturities as of September 30, 2022 for client fund assets are as follows: Due within fiscal year 2023 $ 775,270 Due within fiscal year 2024 93,419 Due within fiscal year 2025 36,490 Due within fiscal year 2026 27,185 Due within fiscal year 2027 943 Total $ 933,307 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 3 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET: A summary of the Company’s property and equipment, net is as follows: September 30, June 30, Land $ 3,680 $ 3,680 Land improvements 910 910 Building and improvements 22,845 22,845 Computer, equipment and software 15,242 14,951 Furniture and fixtures 2,242 2,246 Office equipment 2,534 2,538 Leasehold improvements 1,413 1,430 Construction in progress 36 — 48,902 48,600 Accumulated depreciation and amortization (18,113) (16,925) Property and equipment, net $ 30,789 $ 31,675 |
CAPITALIZED SOFTWARE, NET
CAPITALIZED SOFTWARE, NET | 3 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
CAPITALIZED SOFTWARE, NET | CAPITALIZED SOFTWARE, NET: A summary of the Company’s capitalized software, net is as follows: September 30, June 30, Capitalized software $ 92,782 $ 83,682 Accumulated amortization (50,086) (43,680) Capitalized software, net $ 42,696 $ 40,002 The following is a schedule of future amortization expense as of September 30, 2022: 2023 (remaining nine months) $ 17,369 2024 17,168 2025 7,894 2026 265 $ 42,696 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS: Changes in the carrying amount of goodwill are presented below: Balance at June 30, 2022 $ 750,155 Foreign currency translation (934) Balance at September 30, 2022 $ 749,221 On August 7, 2022, the Company entered into a 16-year partnership with the Cincinnati Bengals of the National Football League that grants the Company the exclusive naming rights to Paycor Stadium, home to the Cincinnati Bengals since 2000. Contractual payments began in the period ended September 30, 2022 and end in 2038. The naming rights have been recorded as an intangible asset equal to the present value of the future contractual cash flows with an offsetting liability for payments to be made in the future. The intangible asset reflects the naming rights to the Bengals stadium including co-branding and shared promotion, along with the right for the Company to place its logo on and around the stadium. The discount between the offsetting liability and overall payment obligation is amortized to interest expense over the term of the agreement using the effective interest method. The intangible asset is being amortized over the life of the agreement on a straight-line basis through sales and marketing expense. The liability is included in accrued expenses and other current liabilities and other long-term liabilities within the unaudited condensed consolidated balance sheets. Components of intangible assets were as follows: September 30, June 30, Cost: Technology $ 142,165 $ 142,165 Customer relationships 447,896 443,187 Trade name 105,670 105,672 Naming rights 78,135 — Total cost $ 773,866 $ 691,024 Accumulated amortization: Technology $ (137,110) $ (135,982) Customer relationships (285,678) (266,129) Trade name (27,606) (25,844) Naming rights (827) — Total accumulated amortization $ (451,221) $ (427,955) Intangible assets, net $ 322,645 $ 263,069 The following is a schedule of future amortization expense as of September 30, 2022: 2023 (remaining nine months) $ 73,323 2024 90,356 2025 36,590 2026 12,021 2027 12,004 Thereafter 98,351 $ 322,645 |
DEBT AGREEMENTS AND LETTERS OF
DEBT AGREEMENTS AND LETTERS OF CREDIT | 3 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT AGREEMENTS AND LETTERS OF CREDIT | DEBT AGREEMENTS AND LETTERS OF CREDIT: Credit Agreement Paycor, Inc. is party to a credit agreement (as amended, the “Credit Agreement”) with PNC Bank, National Association (“PNC”), Fifth Third, National Association, and other lenders, providing a $200,000 senior secured revolving credit facility (the “Revolving Credit Facility”). The Revolving Credit Facility includes an “accordion feature” that allows the Company, under certain circumstances, to increase the size of the Revolving Credit Facility by an additional principal amount of up to $200,000, with a resulting maximum principal amount of $400,000, subject to the participating lenders electing to increase their commitments or new lenders being added to the Credit Agreement. The Revolving Credit Facility will mature on June 11, 2026. The Company had no outstanding borrowings under the Revolving Credit Facility as of September 30, 2022 or June 30, 2022. Additionally, the Company had no outstanding letters of credit as of September 30, 2022 or June 30, 2022. |
LEASES
LEASES | 3 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
LEASES | LEASES: The Company determines if an arrangement contains a lease at inception. The Company recognizes right-of-use (“ROU”) assets and liabilities associated with leases based on the present value of the future minimum lease payments over the lease term at the later of the commencement date of the lease or July 1, 2022. The Company uses its incremental borrowing rate at the recognition date in determining the present value of future payments for leases that do not have a readily determinable implicit rate. Lease terms reflect options to extend or terminate the lease when it is reasonably certain that the option will be exercised. ROU assets and obligations for short-term leases (leases with an initial term of 12 months or less) are not recognized in the consolidated balance sheet. The Company has agreements that contain lease and non-lease components. Generally, the Company accounts for the lease and non-lease components in the contract as a single lease component. The Company has various lease agreements for office space and other leases which are classified as operating leases and for equipment which is classified as finance leases. Lease terms may include options to extend or terminate the lease, which are factored into the recognition of ROU assets and lease liabilities when it is reasonably certain that the Company will exercise that option. Lease costs for operating leases, including short-term leases, are recognized over the lease term on a straight-line basis. The table below presents the Company’s leased assets and related lease liabilities: Leases Classification September 30, Assets Operating leases Operating lease right-of-use assets $ 22,732 Finance lease assets Property and equipment, net 725 Liabilities Current: Operating Accrued expenses and other current liabilities $ 5,737 Finance Accrued expenses and other current liabilities 287 Non-current: Operating Long-term operating leases 23,180 Finance Other long-term liabilities 556 The table below presents the costs associated with the leased assets: Leases Classification Three Months Ended September 30, 2022 Operating lease cost: Short-term General and administrative $ 9 Long-term Cost of revenues, Sales and marketing and General and administrative 1,385 Finance lease cost: Amortization of leased assets Cost of revenues, Sales and marketing, General and administrative and Research and development 65 Interest on lease liabilities Interest expense 11 Total lease cost $ 1,470 Sublease income General and administrative $ 232 The future minimum lease payments required under all leases and the present value of net minimum lease payments as of September 30, 2022 are as follows: Maturity of Lease Liabilities Operating Finance 2023 (remaining nine months) $ 5,115 $ 242 2024 5,746 323 2025 4,826 296 2026 4,620 45 2027 4,333 — Thereafter 9,435 — Total minimum lease payments 34,075 906 Less: Amount representing interest (5,158) (63) Present value of minimum lease payments $ 28,917 $ 843 The table below summarizes the weighted average remaining lease term and weighted average discount rate used by lease type: Lease Term and Discount Rate September 30, Weighted average remaining lease term: Operating leases 7.2 years Finance leases 2.8 years Weighted average discount rate: Operating leases 3.6 % Finance leases 5.0 % The table below summarizes the impact to cash flows related to leases: Three Months Ended September 30, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 2,322 Operating cash flows used for finance leases 11 Financing cash flows used for finance leases 70 Leased assets obtained in exchange for new finance lease liabilities — Leased assets obtained in exchange for new operating lease liabilities 6,612 |
LEASES | LEASES: The Company determines if an arrangement contains a lease at inception. The Company recognizes right-of-use (“ROU”) assets and liabilities associated with leases based on the present value of the future minimum lease payments over the lease term at the later of the commencement date of the lease or July 1, 2022. The Company uses its incremental borrowing rate at the recognition date in determining the present value of future payments for leases that do not have a readily determinable implicit rate. Lease terms reflect options to extend or terminate the lease when it is reasonably certain that the option will be exercised. ROU assets and obligations for short-term leases (leases with an initial term of 12 months or less) are not recognized in the consolidated balance sheet. The Company has agreements that contain lease and non-lease components. Generally, the Company accounts for the lease and non-lease components in the contract as a single lease component. The Company has various lease agreements for office space and other leases which are classified as operating leases and for equipment which is classified as finance leases. Lease terms may include options to extend or terminate the lease, which are factored into the recognition of ROU assets and lease liabilities when it is reasonably certain that the Company will exercise that option. Lease costs for operating leases, including short-term leases, are recognized over the lease term on a straight-line basis. The table below presents the Company’s leased assets and related lease liabilities: Leases Classification September 30, Assets Operating leases Operating lease right-of-use assets $ 22,732 Finance lease assets Property and equipment, net 725 Liabilities Current: Operating Accrued expenses and other current liabilities $ 5,737 Finance Accrued expenses and other current liabilities 287 Non-current: Operating Long-term operating leases 23,180 Finance Other long-term liabilities 556 The table below presents the costs associated with the leased assets: Leases Classification Three Months Ended September 30, 2022 Operating lease cost: Short-term General and administrative $ 9 Long-term Cost of revenues, Sales and marketing and General and administrative 1,385 Finance lease cost: Amortization of leased assets Cost of revenues, Sales and marketing, General and administrative and Research and development 65 Interest on lease liabilities Interest expense 11 Total lease cost $ 1,470 Sublease income General and administrative $ 232 The future minimum lease payments required under all leases and the present value of net minimum lease payments as of September 30, 2022 are as follows: Maturity of Lease Liabilities Operating Finance 2023 (remaining nine months) $ 5,115 $ 242 2024 5,746 323 2025 4,826 296 2026 4,620 45 2027 4,333 — Thereafter 9,435 — Total minimum lease payments 34,075 906 Less: Amount representing interest (5,158) (63) Present value of minimum lease payments $ 28,917 $ 843 The table below summarizes the weighted average remaining lease term and weighted average discount rate used by lease type: Lease Term and Discount Rate September 30, Weighted average remaining lease term: Operating leases 7.2 years Finance leases 2.8 years Weighted average discount rate: Operating leases 3.6 % Finance leases 5.0 % The table below summarizes the impact to cash flows related to leases: Three Months Ended September 30, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 2,322 Operating cash flows used for finance leases 11 Financing cash flows used for finance leases 70 Leased assets obtained in exchange for new finance lease liabilities — Leased assets obtained in exchange for new operating lease liabilities 6,612 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS: U.S. GAAP defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques. Fair value is 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 fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities the Company can access. Level 2 inputs are inputs (other than quoted prices included within Level 1) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability and rely on management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. The fair value of certain assets, such as nonfinancial assets, primarily long-lived assets, goodwill, intangible assets and certain other assets, are recognized or disclosed in connection with impairment evaluations. All non-recurring valuations use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy. The carrying amounts of financial instruments including cash and cash equivalents, accounts receivable, and accounts payable approximated fair value as of September 30, 2022 and June 30, 2022, because of the relatively short maturity of these instruments. The following table presents information on the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 and June 30, 2022: September 30, 2022 Level 1 Level 2 Level 3 Total Funds held for clients—cash and cash equivalents: Demand deposit accounts and other cash equivalents $ 669,046 $ — $ — $ 669,046 Funds held for clients—available-for-sale: U.S. Treasury and direct obligations of U.S. government agencies — 60,660 — 60,660 Corporate bonds — 171,487 — 171,487 Commercial paper — 16,294 — 16,294 Other securities — 15,820 — 15,820 $ 669,046 $ 264,261 $ — $ 933,307 June 30, 2022 Level 1 Level 2 Level 3 Total Funds held for clients—cash and cash equivalents: Demand deposit accounts and other cash equivalents $ 1,549,882 $ — $ — $ 1,549,882 Funds held for clients—available-for-sale: U.S. Treasury and direct obligations of U.S. government agencies — 29,077 — 29,077 Corporate bonds — 110,863 — 110,863 Commercial paper — 6,641 — 6,641 Other securities — 19,453 — 19,453 $ 1,549,882 $ 166,034 $ — $ 1,715,916 Available-for-sale securities included in Level 1 are valued using closing prices for identical instruments that are traded on active exchanges. Available-for-sale securities included in Level 2 are valued by reference to quoted prices of similar assets or liabilities in active markets, adjusted for any terms specific to that asset or liability. |
REDEEMABLE NONCONTROLLING INTER
REDEEMABLE NONCONTROLLING INTERESTS | 3 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
REDEEMABLE NONCONTROLLING INTERESTS | REDEEMABLE NONCONTROLLING INTERESTS: In July 2021, the Company fully redeemed its outstanding Series A Redeemable Preferred Stock using a portion of the IPO proceeds. The redemption price per share was equal to 101% of the liquidation preference, plus the amount of all accrued dividends for the then current and all prior dividend payment periods, or $ 260,044. As of September 30, 2022 , there are no holders of the Company’s Series A Redeemable Preferred Stock and all of the Company’s subsidiaries are wholly-owned . |
CAPITAL STOCK
CAPITAL STOCK | 3 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
CAPITAL STOCK | CAPITAL STOCK: The Company’s Second Amended and Restated Certificate of Incorporation authorized the issuance of up to 500,000,000 shares of common stock with a par value of $0.001 per share and 50,000,000 shares of preferred stock with a par value of $0.001 per share. As of September 30, 2022 and June 30, 2022, there were 175,643,109 and 174,909,539 shares of common stock outstanding, respectively, and no preferred stock outstanding. On September 9, 2022, an underwritten public offering took place in which Apax or its affiliates sold 5,000,000 shares of the Company’s common stock at a public offering price of $27.35 per share. The Company did not receive any proceeds from this sale. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 3 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET LOSS PER SHARE: Basic net loss per share is calculated by dividing net loss attributable to Paycor HCM , Inc. by the weighted average shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss attributable to Paycor HCM , Inc., adjusted as necessary for the impact of potentially dilutive securities, by the weighted average shares outstanding during the period and the impact of securities that would have a dilutive effect. Potentially dilutive securities during the three months ended September 30, 2022 and 2021 included RSUs, stock options, Series A Preferred Stock and ESPP purchase rights. Due to the net loss for the three months ended September 30, 2022 and 2021, any potentially dilutive securities were excluded from the denominator in calculating diluted net loss per share because including them would have had an anti-dilutive effect. Additionally, the Company also excluded stock-based compensation awards representing membership interest units in Pride Aggregator, L.P. for the three months ended September 30, 2022 and 2021, respectively. Basic and diluted net loss per share was the same for each period presented, as the inclusion of all potential common shares outstanding would have been anti-dilutive. The following table sets forth the computation of basic and diluted net loss per share: Three Months Ended September 30, (in thousands, except per share data) 2022 2021 Net loss attributable to Paycor HCM , Inc. $ (29,052) $ (53,657) Weighted average outstanding shares: Basic and diluted 175,512,577 166,459,168 Basic and diluted net loss per share $ (0.17) $ (0.32) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES:The Company is subject to various claims, litigation, and regulatory compliance matters in the normal course of business. When a loss is considered probable and reasonably estimable, the Company records a liability in the amount of its best estimate for the ultimate loss. The resolution of these claims, litigation and regulatory compliance matters, individually or in the aggregate, is not expected to have a material adverse impact on the Company’s unaudited condensed consolidated statements of operations, balance sheets or statements of cash flows. These matters are subject to inherent uncertainties and management’s view of these matters may change in the future. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 3 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT:On October 27, 2022 the Company entered into a securities purchase agreement with Talenya Ltd., an artificial intelligence-driven solution for talent sourcing and recruiting employees. The Company acquired 100% of the equity interests for an initial purchase price of $20,000, which can increase up to $30,000 based on the achievement of established earnouts. The acquisition was funded with cash on hand. This acquisition enhances the Company’s product offerings and can be immediately incorporated into the Company’s service offerings. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation and consolidation | Basis of presentation and consolidation The accompanying interim unaudited condensed consolidated financial statements of the Company were prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and include all of the information and disclosures required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim reporting. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended June 30, 2022 in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on August 24, 2022. The unaudited condensed consolidated financial statements for interim periods do not include all disclosures required by U.S. GAAP for annual financial statements and are not necessarily indicative of results for the future interim periods and the full fiscal year ending June 30, 2023. Adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of the unaudited condensed consolidated financial position, results of operations and cash flows at the dates and for the periods presented have been included. All intercompany transactions and balances have been eliminated in consolidation. |
Use of estimates | Use of estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the recognition of revenue, evaluation of potential impairment of goodwill and intangible assets, and the valuation of stock-based compensation.The Company’s results of operations and financial condition can also be affected by economic, political, legislative, regulatory and legal actions, including but not limited to health epidemics and pandemics and their resulting economic impact. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies can have a significant effect on the Company’s results of operations and financial condition. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings. |
Accounts receivable, net | Accounts receivable, net Accounts receivable balances are shown on the condensed consolidated balance sheets net of the allowance for doubtful accounts of $3,810 and $3,268 as of September 30, 2022 and June 30, 2022, respectively. The allowance for doubtful accounts considers factors such as historical experience, credit quality, age of the accounts receivable balance and current and forecasted economic conditions that may affect a client’s ability to pay. The Company performs ongoing credit evaluations and generally requires no collateral from clients. Management reviews individual accounts as they become past due to determine collectability. The allowance for doubtful accounts is adjusted periodically based on management’s consideration of past due accounts. Individual accounts are charged against the allowance when all reasonable collection efforts have been exhausted. |
Sales and marketing | Sales and marketing Sales and marketing expenses consist of costs associated with the Company’s direct sales and marketing staff, including employee-related costs, marketing, advertising and promotion expenses, and other related costs. Advertising and promotion costs are expensed as incurred. Advertising and promotion expense totaled approximately $5,918 and $4,986 for the three months ended September 30, 2022 and 2021, respectively. |
Stock-based compensation | Stock-based compensation The Company recognizes all employee and director stock-based compensation as a cost in the unaudited condensed consolidated financial statements. Equity-classified awards are measured at the grant date fair value of the award and expense is recognized, net of actual forfeitures, on a straight-line basis over the requisite service period for the award. |
Leases | Leases The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (“ASC 842”), as subsequently amended, on July 1, 2022, through the modified retrospective method applied to those contracts that were not completed as of that date. ASC 842 requires entities to recognize lease assets and lease liabilities and disclose key information about leasing arrangements for certain leases. Results for reporting periods beginning after July 1, 2022 are presented under ASC 842, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company’s historical accounting treatment. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. Adoption of the new standard resulted in recording additional lease assets and liabilities of $16,818 and $23,987, respectively, as of July 1, 2022. |
Pending accounting pronouncements | Pending accounting pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses” (Topic 326). This update establishes a new approach to estimate credit losses on certain types of financial instruments. The update requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The amended standard will also update the impairment model for available-for-sale debt securities, requiring entities to determine whether all or a portion of the unrealized loss on any such securities is a credit loss. The Company is currently evaluating this standard and the potential effects of these changes to its unaudited condensed consolidated financial statements and expects to adopt this new standard in the fiscal year beginning July 1, 2023. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of Revenue | The following table disaggregates revenue from contracts by recurring fees and implementation services and other, which the Company believes depicts the nature, amount and timing of its revenue: Three Months Ended September 30, 2022 2021 Recurring fees $ 111,062 $ 89,209 Implementation services and other 3,107 3,207 Recurring and other revenue $ 114,169 $ 92,416 The following table summarizes the changes in deferred revenue related to the nonrefundable upfront fees and recurring subscription services: Three Months Ended September 30, 2022 2021 Balance, beginning of period $ 17,046 $ 16,047 Deferral of revenue 4,270 3,612 Revenue recognized (4,709) (4,799) Impact of foreign exchange (117) (49) Balance, end of period $ 16,490 $ 14,811 |
Capitalized Contract Cost | As of and for the Three Months Ended September 30, 2022 Beginning Balance Capitalization of Costs Amortization Ending Balance Costs to obtain a contract $ 72,342 $ 8,993 $ (4,441) $ 76,894 Costs to fulfill a contract 91,132 12,777 (5,587) 98,322 Total $ 163,474 $ 21,770 $ (10,028) $ 175,216 As of and for the Three Months Ended September 30, 2021 Beginning Balance Capitalization of Costs Amortization Ending Balance Costs to obtain a contract $ 52,926 $ 8,074 $ (3,023) $ 57,977 Costs to fulfill a contract 62,457 10,264 (3,611) 69,110 Total $ 115,383 $ 18,338 $ (6,634) $ 127,087 |
FUNDS HELD FOR CLIENTS (Tables)
FUNDS HELD FOR CLIENTS (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Funds Held For Clients [Abstract] | |
Investment | Funds held for clients are as follows: September 30, 2022 Amortized Gross Gross Fair Demand deposit accounts and other cash equivalents $ 669,046 $ — $ — $ 669,046 U.S. Treasury and direct obligations of U.S. government agencies 61,330 — (670) 60,660 Corporate bonds 175,159 12 (3,684) 171,487 Commercial paper 16,296 1 (3) 16,294 Other securities 16,278 — (458) 15,820 $ 938,109 $ 13 $ (4,815) $ 933,307 June 30, 2022 Amortized Gross Gross Fair Demand deposit accounts and other cash equivalents $ 1,549,882 $ — $ — $ 1,549,882 U.S. Treasury and direct obligations of U.S. government agencies 29,367 — (290) 29,077 Corporate bonds 112,753 4 (1,894) 110,863 Commercial paper 6,642 2 (3) 6,641 Other securities 19,817 2 (366) 19,453 $ 1,718,461 $ 8 $ (2,553) $ 1,715,916 |
Investments Classified by Contractual Maturity Date | Expected maturities as of September 30, 2022 for client fund assets are as follows: Due within fiscal year 2023 $ 775,270 Due within fiscal year 2024 93,419 Due within fiscal year 2025 36,490 Due within fiscal year 2026 27,185 Due within fiscal year 2027 943 Total $ 933,307 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment at cost and accumulated depreciation | A summary of the Company’s property and equipment, net is as follows: September 30, June 30, Land $ 3,680 $ 3,680 Land improvements 910 910 Building and improvements 22,845 22,845 Computer, equipment and software 15,242 14,951 Furniture and fixtures 2,242 2,246 Office equipment 2,534 2,538 Leasehold improvements 1,413 1,430 Construction in progress 36 — 48,902 48,600 Accumulated depreciation and amortization (18,113) (16,925) Property and equipment, net $ 30,789 $ 31,675 |
CAPITALIZED SOFTWARE, NET (Tabl
CAPITALIZED SOFTWARE, NET (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of components of capitalized software | A summary of the Company’s capitalized software, net is as follows: September 30, June 30, Capitalized software $ 92,782 $ 83,682 Accumulated amortization (50,086) (43,680) Capitalized software, net $ 42,696 $ 40,002 Components of intangible assets were as follows: September 30, June 30, Cost: Technology $ 142,165 $ 142,165 Customer relationships 447,896 443,187 Trade name 105,670 105,672 Naming rights 78,135 — Total cost $ 773,866 $ 691,024 Accumulated amortization: Technology $ (137,110) $ (135,982) Customer relationships (285,678) (266,129) Trade name (27,606) (25,844) Naming rights (827) — Total accumulated amortization $ (451,221) $ (427,955) Intangible assets, net $ 322,645 $ 263,069 |
Schedule of future amortization expense | The following is a schedule of future amortization expense as of September 30, 2022: 2023 (remaining nine months) $ 17,369 2024 17,168 2025 7,894 2026 265 $ 42,696 The following is a schedule of future amortization expense as of September 30, 2022: 2023 (remaining nine months) $ 73,323 2024 90,356 2025 36,590 2026 12,021 2027 12,004 Thereafter 98,351 $ 322,645 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in goodwill | Changes in the carrying amount of goodwill are presented below: Balance at June 30, 2022 $ 750,155 Foreign currency translation (934) Balance at September 30, 2022 $ 749,221 |
Schedule of components of intangible assets | A summary of the Company’s capitalized software, net is as follows: September 30, June 30, Capitalized software $ 92,782 $ 83,682 Accumulated amortization (50,086) (43,680) Capitalized software, net $ 42,696 $ 40,002 Components of intangible assets were as follows: September 30, June 30, Cost: Technology $ 142,165 $ 142,165 Customer relationships 447,896 443,187 Trade name 105,670 105,672 Naming rights 78,135 — Total cost $ 773,866 $ 691,024 Accumulated amortization: Technology $ (137,110) $ (135,982) Customer relationships (285,678) (266,129) Trade name (27,606) (25,844) Naming rights (827) — Total accumulated amortization $ (451,221) $ (427,955) Intangible assets, net $ 322,645 $ 263,069 |
Schedule of future amortization expense | The following is a schedule of future amortization expense as of September 30, 2022: 2023 (remaining nine months) $ 17,369 2024 17,168 2025 7,894 2026 265 $ 42,696 The following is a schedule of future amortization expense as of September 30, 2022: 2023 (remaining nine months) $ 73,323 2024 90,356 2025 36,590 2026 12,021 2027 12,004 Thereafter 98,351 $ 322,645 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of leased assets and liabilities | The table below presents the Company’s leased assets and related lease liabilities: Leases Classification September 30, Assets Operating leases Operating lease right-of-use assets $ 22,732 Finance lease assets Property and equipment, net 725 Liabilities Current: Operating Accrued expenses and other current liabilities $ 5,737 Finance Accrued expenses and other current liabilities 287 Non-current: Operating Long-term operating leases 23,180 Finance Other long-term liabilities 556 The table below summarizes the weighted average remaining lease term and weighted average discount rate used by lease type: Lease Term and Discount Rate September 30, Weighted average remaining lease term: Operating leases 7.2 years Finance leases 2.8 years Weighted average discount rate: Operating leases 3.6 % Finance leases 5.0 % |
Lease Costs and Cash Flows Impact | The table below presents the costs associated with the leased assets: Leases Classification Three Months Ended September 30, 2022 Operating lease cost: Short-term General and administrative $ 9 Long-term Cost of revenues, Sales and marketing and General and administrative 1,385 Finance lease cost: Amortization of leased assets Cost of revenues, Sales and marketing, General and administrative and Research and development 65 Interest on lease liabilities Interest expense 11 Total lease cost $ 1,470 Sublease income General and administrative $ 232 The table below summarizes the impact to cash flows related to leases: Three Months Ended September 30, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 2,322 Operating cash flows used for finance leases 11 Financing cash flows used for finance leases 70 Leased assets obtained in exchange for new finance lease liabilities — Leased assets obtained in exchange for new operating lease liabilities 6,612 |
Schedule of maturity of operating leases | The future minimum lease payments required under all leases and the present value of net minimum lease payments as of September 30, 2022 are as follows: Maturity of Lease Liabilities Operating Finance 2023 (remaining nine months) $ 5,115 $ 242 2024 5,746 323 2025 4,826 296 2026 4,620 45 2027 4,333 — Thereafter 9,435 — Total minimum lease payments 34,075 906 Less: Amount representing interest (5,158) (63) Present value of minimum lease payments $ 28,917 $ 843 |
Schedule of maturity of finance leases | The future minimum lease payments required under all leases and the present value of net minimum lease payments as of September 30, 2022 are as follows: Maturity of Lease Liabilities Operating Finance 2023 (remaining nine months) $ 5,115 $ 242 2024 5,746 323 2025 4,826 296 2026 4,620 45 2027 4,333 — Thereafter 9,435 — Total minimum lease payments 34,075 906 Less: Amount representing interest (5,158) (63) Present value of minimum lease payments $ 28,917 $ 843 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and financial liabilities measured at fair value on a recurring basis | The following table presents information on the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 and June 30, 2022: September 30, 2022 Level 1 Level 2 Level 3 Total Funds held for clients—cash and cash equivalents: Demand deposit accounts and other cash equivalents $ 669,046 $ — $ — $ 669,046 Funds held for clients—available-for-sale: U.S. Treasury and direct obligations of U.S. government agencies — 60,660 — 60,660 Corporate bonds — 171,487 — 171,487 Commercial paper — 16,294 — 16,294 Other securities — 15,820 — 15,820 $ 669,046 $ 264,261 $ — $ 933,307 June 30, 2022 Level 1 Level 2 Level 3 Total Funds held for clients—cash and cash equivalents: Demand deposit accounts and other cash equivalents $ 1,549,882 $ — $ — $ 1,549,882 Funds held for clients—available-for-sale: U.S. Treasury and direct obligations of U.S. government agencies — 29,077 — 29,077 Corporate bonds — 110,863 — 110,863 Commercial paper — 6,641 — 6,641 Other securities — 19,453 — 19,453 $ 1,549,882 $ 166,034 $ — $ 1,715,916 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net loss per share: Three Months Ended September 30, (in thousands, except per share data) 2022 2021 Net loss attributable to Paycor HCM , Inc. $ (29,052) $ (53,657) Weighted average outstanding shares: Basic and diluted 175,512,577 166,459,168 Basic and diluted net loss per share $ (0.17) $ (0.32) |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | |||||
Sep. 09, 2022 $ / shares shares | Jul. 23, 2021 USD ($) $ / shares shares | Jul. 31, 2021 | Sep. 30, 2022 employee $ / shares | Jun. 30, 2022 $ / shares | Sep. 30, 2021 USD ($) | |
Subsequent Event [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||
Payments of stock issuance costs | $ 30,583 | |||||
Offering costs | $ 3,702 | |||||
Stock split conversion ratio | 1,517.18 | |||||
Minimum | ||||||
Subsequent Event [Line Items] | ||||||
Number of employees | employee | 10 | |||||
Maximum | ||||||
Subsequent Event [Line Items] | ||||||
Number of employees | employee | 1,000 | |||||
Restricted Stock Units (RSUs) | ||||||
Subsequent Event [Line Items] | ||||||
Unrecognized compensation expense, weighted average period | 2 years | |||||
Time-Based Incentive Units | ||||||
Subsequent Event [Line Items] | ||||||
Award vesting rights, percentage | 25% | |||||
Award vesting period | 6 months | |||||
Apax Acquisition | Redeemable Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Preferred stock, redemption price (in percentage) | 1.01% | |||||
IPO | ||||||
Subsequent Event [Line Items] | ||||||
Number of shares issued in transaction (in shares) | shares | 5,000,000 | 21,275,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||
Offering price per share (in dollars per share) | $ / shares | $ 27.35 | $ 23 | ||||
Aggregate net proceeds from stock offering | $ 454,147 | |||||
Offering costs | $ 4,595 | |||||
Issuance of preferred stock, net (in shares) | shares | 11,705,039 | |||||
IPO | Restricted Stock Units (RSUs) | ||||||
Subsequent Event [Line Items] | ||||||
Issuance of preferred stock, net (in shares) | shares | 1,761,578 | |||||
IPO | Time-Based Incentive Units | ||||||
Subsequent Event [Line Items] | ||||||
Award vesting period | 24 months |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Jul. 01, 2022 | Jun. 30, 2022 | |
Accounting Policies [Abstract] | ||||
Accounts receivable, allowance for credit loss | $ 3,810 | $ 3,268 | ||
Advertising and promotion expense | 5,918 | $ 4,986 | ||
Stock-based compensation cost | 16,951 | $ 21,812 | ||
Operating lease right-of-use assets | 22,732 | $ 16,818 | $ 0 | |
Operating lease liability | $ 28,917 | $ 23,987 |
REVENUE - Contract with Custome
REVENUE - Contract with Customer (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Recurring and other revenue | Service [Member] | Service [Member] |
Recurring and other revenue | $ 114,169 | $ 92,416 |
Recurring fees | ||
Disaggregation of Revenue [Line Items] | ||
Recurring and other revenue | 111,062 | 89,209 |
Implementation services and other | ||
Disaggregation of Revenue [Line Items] | ||
Recurring and other revenue | $ 3,107 | $ 3,207 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Implementation fee recognition period | 24 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Implementation services, remaining performance obligation, period | 9 months |
Revenue, remaining performance obligation, amount | $ 9,409 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Implementation services, remaining performance obligation, period | 1 year |
Revenue, remaining performance obligation, amount | $ 5,246 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Implementation services, remaining performance obligation, period | 1 year |
Revenue, remaining performance obligation, amount | $ 1,215 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Implementation services, remaining performance obligation, period | |
Revenue, remaining performance obligation, amount | $ 620 |
REVENUE - Deferred Revenue (Det
REVENUE - Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Contract with Customer, Liability Activity [Roll Forward] | ||
Balance, beginning of period | $ 17,046 | $ 16,047 |
Deferral of revenue | 4,270 | 3,612 |
Revenue recognized | (4,709) | (4,799) |
Impact of foreign exchange | (117) | (49) |
Balance, end of period | $ 16,490 | $ 14,811 |
REVENUE - Deferred Contract Cos
REVENUE - Deferred Contract Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Capitalized Contract Cost, Activity [Roll Forward] | ||
Beginning Balance | $ 163,474 | $ 115,383 |
Capitalization of Costs | 21,770 | 18,338 |
Amortization | (10,028) | (6,634) |
Ending Balance | 175,216 | 127,087 |
Costs to obtain a contract | ||
Capitalized Contract Cost, Activity [Roll Forward] | ||
Beginning Balance | 72,342 | 52,926 |
Capitalization of Costs | 8,993 | 8,074 |
Amortization | (4,441) | (3,023) |
Ending Balance | 76,894 | 57,977 |
Costs to fulfill a contract | ||
Capitalized Contract Cost, Activity [Roll Forward] | ||
Beginning Balance | 91,132 | 62,457 |
Capitalization of Costs | 12,777 | 10,264 |
Amortization | (5,587) | (3,611) |
Ending Balance | $ 98,322 | $ 69,110 |
BUSINESS COMBINATION AND ASSE_2
BUSINESS COMBINATION AND ASSET ACQUISITION - Narrative (Details) - HCM Assets Acquisition - USD ($) $ in Thousands | 3 Months Ended | ||
Feb. 04, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | |||
Asset acquisition, consideration transferred | $ 9,300 | ||
Asset acquisition, transaction cost | $ 50 | ||
Revenue period for contingent payment | 12 months | ||
Asset acquisition, contingent consideration | $ 4,259 | $ 195 | |
Acquired finite-lived intangible assets, weighted average useful life | 3 years | ||
Finite-lived intangible assets, remaining amortization period | 1 year 3 months 18 days |
FUNDS HELD FOR CLIENTS - Schedu
FUNDS HELD FOR CLIENTS - Schedule of Funds Held for Clients (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 |
Schedule of Investments [Line Items] | |||
Demand deposit accounts and other cash equivalents, Amortized Cost | $ 98,161 | $ 133,041 | $ 125,787 |
Funds held for clients, Amortized Cost | 938,109 | 1,718,461 | |
Funds held for clients, Gross Unrealized Gains | 13 | 8 | |
Funds held for clients, Gross Unrealized Losses | (4,815) | (2,553) | |
Funds held for clients | 933,307 | 1,715,916 | |
U.S. Treasury and direct obligations of U.S. government agencies | |||
Schedule of Investments [Line Items] | |||
Debt securities, available-for-sale, Amortized Cost | 61,330 | 29,367 | |
Debt securities, available-for-sale, Gross Unrealized Gains | 0 | 0 | |
Debt securities, available-for-sale, Gross Unrealized Losses | (670) | (290) | |
Debt securities, available-for-sale, Fair Value | 60,660 | 29,077 | |
Corporate bonds | |||
Schedule of Investments [Line Items] | |||
Debt securities, available-for-sale, Amortized Cost | 175,159 | 112,753 | |
Debt securities, available-for-sale, Gross Unrealized Gains | 12 | 4 | |
Debt securities, available-for-sale, Gross Unrealized Losses | (3,684) | (1,894) | |
Debt securities, available-for-sale, Fair Value | 171,487 | 110,863 | |
Commercial paper | |||
Schedule of Investments [Line Items] | |||
Debt securities, available-for-sale, Amortized Cost | 16,296 | 6,642 | |
Debt securities, available-for-sale, Gross Unrealized Gains | 1 | 2 | |
Debt securities, available-for-sale, Gross Unrealized Losses | (3) | (3) | |
Debt securities, available-for-sale, Fair Value | 16,294 | 6,641 | |
Other securities | |||
Schedule of Investments [Line Items] | |||
Debt securities, available-for-sale, Amortized Cost | 16,278 | 19,817 | |
Debt securities, available-for-sale, Gross Unrealized Gains | 0 | 2 | |
Debt securities, available-for-sale, Gross Unrealized Losses | (458) | (366) | |
Debt securities, available-for-sale, Fair Value | 15,820 | 19,453 | |
Demand deposit accounts and other cash equivalents | |||
Schedule of Investments [Line Items] | |||
Demand deposit accounts and other cash equivalents, Amortized Cost | 669,046 | 1,549,882 | |
Demand deposit accounts and other cash equivalents, Gross Unrealized Gains | 0 | 0 | |
Demand deposit accounts and other cash equivalents, Gross Unrealized Losses | 0 | 0 | |
Demand deposit accounts and other cash equivalents, Fair Value | $ 669,046 | $ 1,549,882 |
FUNDS HELD FOR CLIENTS - Narrat
FUNDS HELD FOR CLIENTS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Funds Held For Clients [Abstract] | ||
Proceeds from sales and maturities of investment securities | $ 143,107 | $ 39,932 |
FUNDS HELD FOR CLIENTS - Sche_2
FUNDS HELD FOR CLIENTS - Schedule of Expected Maturities (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Funds Held For Clients [Abstract] | |
Due within fiscal year 2023 | $ 775,270 |
Due within fiscal year 2024 | 93,419 |
Due within fiscal year 2025 | 36,490 |
Due within fiscal year 2026 | 27,185 |
Due within fiscal year 2027 | 943 |
Total | $ 933,307 |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of property and equipment at cost and accumulated depreciation (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 48,902 | $ 48,600 |
Accumulated depreciation and amortization | (18,113) | (16,925) |
Property and equipment, net | 30,789 | 31,675 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,680 | 3,680 |
Land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 910 | 910 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 22,845 | 22,845 |
Computer, equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15,242 | 14,951 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,242 | 2,246 |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,534 | 2,538 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,413 | 1,430 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 36 | $ 0 |
PROPERTY AND EQUIPMENT, NET - N
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 1,200 | $ 1,718 |
CAPITALIZED SOFTWARE, NET - Sch
CAPITALIZED SOFTWARE, NET - Schedule of components of capitalized software (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Capitalized software | $ 92,782 | $ 83,682 |
Accumulated amortization | (50,086) | (43,680) |
Capitalized software, net | $ 42,696 | $ 40,002 |
CAPITALIZED SOFTWARE, NET - Nar
CAPITALIZED SOFTWARE, NET - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Capitalized computer software, amortization | $ 6,406 | $ 4,820 |
CAPITALIZED SOFTWARE, NET - S_2
CAPITALIZED SOFTWARE, NET - Schedule of future amortization expense (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
2023 (remaining nine months) | $ 73,323 | |
2024 | 90,356 | |
2025 | 36,590 | |
2026 | 12,021 | |
Intangible assets, net | 322,645 | $ 263,069 |
Computer Software, Intangible Asset | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
2023 (remaining nine months) | 17,369 | |
2024 | 17,168 | |
2025 | 7,894 | |
2026 | 265 | |
Intangible assets, net | $ 42,696 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Schedule of changes in goodwill (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 750,155 |
Foreign currency translation | (934) |
Goodwill, ending balance | $ 749,221 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Aug. 07, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Partnership agreement | 16 years | ||
Amortization of intangible assets, excluding software | $ 23,270 | $ 32,050 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Schedule of components of intangible assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 773,866 | $ 691,024 |
Accumulated amortization: | (451,221) | (427,955) |
Intangible assets, net | 322,645 | 263,069 |
Technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 142,165 | 142,165 |
Accumulated amortization: | (137,110) | (135,982) |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 447,896 | 443,187 |
Accumulated amortization: | (285,678) | (266,129) |
Trade name | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 105,670 | 105,672 |
Accumulated amortization: | (27,606) | (25,844) |
Naming rights | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 78,135 | 0 |
Accumulated amortization: | $ (827) | $ 0 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Schedule of future amortization expense (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 (remaining nine months) | $ 73,323 | |
2024 | 90,356 | |
2025 | 36,590 | |
2026 | 12,021 | |
2027 | 12,004 | |
Thereafter | 98,351 | |
Intangible assets, net | $ 322,645 | $ 263,069 |
DEBT AGREEMENTS AND LETTERS O_2
DEBT AGREEMENTS AND LETTERS OF CREDIT - Narrative (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Debt Instrument [Line Items] | ||
Long-term debt, net | $ 0 | $ 0 |
Letters of credit outstanding, amount | 0 | $ 0 |
Revolving Credit Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Line of credit facility, current borrowing capacity | 200,000,000 | |
Line of credit, maximum increase | 200,000,000 | |
Line of credit, maximum borrowing capacity | $ 400,000,000 |
LEASES - Schedule of leased ass
LEASES - Schedule of leased assets and liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jul. 01, 2022 | Jun. 30, 2022 |
Assets | |||
Operating lease right-of-use assets | $ 22,732 | $ 16,818 | $ 0 |
Finance lease assets | 725 | ||
Current: | |||
Current operating lease liability | 5,737 | ||
Current finance lease liability | 287 | ||
Non-current: | |||
Long-term operating leases | 23,180 | $ 0 | |
Noncurrent finance lease liability | $ 556 | ||
Property and equipment, net | Property and equipment, net | ||
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities | ||
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities | ||
Other long-term liabilities | Other long-term liabilities |
LEASES - Schedule of lease cost
LEASES - Schedule of lease costs (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2022 USD ($) | |
Operating lease cost: | |
Short-term | $ 9 |
Long-term | 1,385 |
Finance lease cost: | |
Amortization of leased assets | 65 |
Interest on lease liabilities | 11 |
Total lease cost | 1,470 |
Sublease income | $ 232 |
LEASES - Schedule of maturity o
LEASES - Schedule of maturity of lease liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jul. 01, 2022 |
Operating | ||
2023 (remaining nine months) | $ 5,115 | |
2024 | 5,746 | |
2025 | 4,826 | |
2026 | 4,620 | |
2027 | 4,333 | |
Thereafter | 9,435 | |
Total minimum lease payments | 34,075 | |
Less: Amount representing interest | (5,158) | |
Present value of minimum lease payments | 28,917 | $ 23,987 |
Finance | ||
2023 (remaining nine months) | 242 | |
2024 | 323 | |
2025 | 296 | |
2026 | 45 | |
2027 | 0 | |
Thereafter | 0 | |
Total minimum lease payments | 906 | |
Less: Amount representing interest | (63) | |
Present value of minimum lease payments | $ 843 |
LEASES - Lease information (Det
LEASES - Lease information (Details) | Sep. 30, 2022 |
Weighted average remaining lease term: | |
Operating leases | 7 years 2 months 12 days |
Finance leases | 2 years 9 months 18 days |
Weighted average discount rate: | |
Operating leases | 3.60% |
Finance leases | 5% |
LEASES - Schedule of impact to
LEASES - Schedule of impact to cash flows (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2022 USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows used for operating leases | $ 2,322 |
Operating cash flows used for finance leases | 11 |
Financing cash flows used for finance leases | 70 |
Leased assets obtained in exchange for new finance lease liabilities | 0 |
Leased assets obtained in exchange for new operating lease liabilities | $ 6,612 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of financial assets and financial liabilities measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
U.S. Treasury and direct obligations of U.S. government agencies | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | $ 60,660 | $ 29,077 |
Corporate bonds | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 171,487 | 110,863 |
Commercial paper | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 16,294 | 6,641 |
Other securities | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 15,820 | 19,453 |
Fair Value, Recurring | ||
Funds held for clients—available-for-sale: | ||
Assets, fair value disclosure | 933,307 | 1,715,916 |
Fair Value, Recurring | U.S. Treasury and direct obligations of U.S. government agencies | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 60,660 | 29,077 |
Fair Value, Recurring | Corporate bonds | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 171,487 | 110,863 |
Fair Value, Recurring | Commercial paper | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 16,294 | 6,641 |
Fair Value, Recurring | Other securities | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 15,820 | 19,453 |
Fair Value, Recurring | Level 1 | ||
Funds held for clients—available-for-sale: | ||
Assets, fair value disclosure | 669,046 | 1,549,882 |
Fair Value, Recurring | Level 1 | U.S. Treasury and direct obligations of U.S. government agencies | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 0 | 0 |
Fair Value, Recurring | Level 1 | Corporate bonds | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 0 | 0 |
Fair Value, Recurring | Level 1 | Commercial paper | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 0 | 0 |
Fair Value, Recurring | Level 1 | Other securities | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
Funds held for clients—available-for-sale: | ||
Assets, fair value disclosure | 264,261 | 166,034 |
Fair Value, Recurring | Level 2 | U.S. Treasury and direct obligations of U.S. government agencies | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 60,660 | 29,077 |
Fair Value, Recurring | Level 2 | Corporate bonds | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 171,487 | 110,863 |
Fair Value, Recurring | Level 2 | Commercial paper | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 16,294 | 6,641 |
Fair Value, Recurring | Level 2 | Other securities | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 15,820 | 19,453 |
Fair Value, Recurring | Level 3 | ||
Funds held for clients—available-for-sale: | ||
Assets, fair value disclosure | 0 | 0 |
Fair Value, Recurring | Level 3 | U.S. Treasury and direct obligations of U.S. government agencies | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 0 | 0 |
Fair Value, Recurring | Level 3 | Corporate bonds | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 0 | 0 |
Fair Value, Recurring | Level 3 | Commercial paper | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 0 | 0 |
Fair Value, Recurring | Level 3 | Other securities | ||
Funds held for clients—available-for-sale: | ||
Debt securities, available-for-sale | 0 | 0 |
Demand deposit accounts and other cash equivalents | ||
Funds held for clients—cash and cash equivalents: | ||
Demand deposit accounts and other cash equivalents | 669,046 | 1,549,882 |
Demand deposit accounts and other cash equivalents | Fair Value, Recurring | ||
Funds held for clients—cash and cash equivalents: | ||
Demand deposit accounts and other cash equivalents | 669,046 | 1,549,882 |
Demand deposit accounts and other cash equivalents | Fair Value, Recurring | Level 1 | ||
Funds held for clients—cash and cash equivalents: | ||
Demand deposit accounts and other cash equivalents | 669,046 | 1,549,882 |
Demand deposit accounts and other cash equivalents | Fair Value, Recurring | Level 2 | ||
Funds held for clients—cash and cash equivalents: | ||
Demand deposit accounts and other cash equivalents | 0 | 0 |
Demand deposit accounts and other cash equivalents | Fair Value, Recurring | Level 3 | ||
Funds held for clients—cash and cash equivalents: | ||
Demand deposit accounts and other cash equivalents | $ 0 | $ 0 |
REDEEMABLE NONCONTROLLING INT_2
REDEEMABLE NONCONTROLLING INTERESTS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jul. 23, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Class of Stock [Line Items] | |||
Redemption of outstanding shares | $ (260,044) | ||
Apax Acquisition | Redeemable Preferred Stock | |||
Class of Stock [Line Items] | |||
Preferred stock, redemption price (in percentage) | 1.01% | ||
Accretion of redeemable noncontrolling interests | $ 0 | $ 11,621 |
CAPITAL STOCK - Narrative (Deta
CAPITAL STOCK - Narrative (Details) - $ / shares | Sep. 09, 2022 | Jul. 23, 2021 | Sep. 30, 2022 | Jun. 30, 2022 |
Class of Stock [Line Items] | ||||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Common stock, shares outstanding (in shares) | 175,643,109 | 174,909,539 | ||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||
IPO | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | |||
Number of shares issued in transaction (in shares) | 5,000,000 | 21,275,000 | ||
Offering price per share (in dollars per share) | $ 27.35 | $ 23 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||
Net loss attributable to Paycor HCM, Inc. | $ (29,052) | $ (53,657) |
Weighted average outstanding shares: | ||
Basic (in shares) | 175,512,577 | 166,459,168 |
Diluted (in shares) | 175,512,577 | 166,459,168 |
Basic net loss per share (in dollars per share) | $ (0.17) | $ (0.32) |
Diluted net loss per share (in dollars per share) | $ (0.17) | $ (0.32) |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - Subsequent Event - Taleyna Ltd. $ in Thousands | Oct. 27, 2022 USD ($) |
Subsequent Event [Line Items] | |
Percentage of business acquired | 100% |
Purchase price | $ 20,000 |
Scenario, Plan | |
Subsequent Event [Line Items] | |
Purchase price | $ 30,000 |