10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

——————

FORM 10-Q

——————

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number: 0-25259

——————

Bottomline Technologies (de), Inc.

(Exact name of registrant as specified in its charter)

——————

Delaware		02-0433294
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
325 Corporate Drive		03801-6808
Portsmouth,	New Hampshire
(Address of principal executive offices)		(Zip Code)

(603) 436-0700

(Registrant’s telephone number, including area code)

——————

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Trading Symbol(s):	Name of each exchange on which registered:
Common Stock, $.001 par value per share	EPAY	The Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐    

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No   ☒  

The number of shares outstanding of the registrant’s common stock as of April 30, 2020 was 43,924,419.

BOTTOMLINE TECHNOLOGIES (de), INC.
FORM 10-Q
FOR THE FISCAL QUARTER ENDED MARCH 31, 2020
TABLE OF CONTENTS
PART I		Page
Item 1.	Unaudited Condensed Consolidated Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33
Item 4.	Controls and Procedures	33
PART II
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 6.	Exhibits	35
	SIGNATURE	36

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Bottomline Technologies (de), Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
	March 31,			June 30,
	2020			2019
ASSETS
Current assets:
Cash and cash equivalents	$	173,063		$	92,164
Cash held for customers	6,590			5,637
Marketable securities	9,224			7,541
Accounts receivable net of allowances for doubtful accounts of $924 at March 31, 2020 and $824 at June 30, 2019	78,271			77,285
Prepaid expenses and other current assets	30,333			30,434
Total current assets	297,481			213,061
Property and equipment, net	69,832			54,541
Operating lease right-of-use assets, net	23,953			—
Goodwill	205,206			206,101
Intangible assets, net	155,331			168,349
Other assets	28,769			27,177
Total assets	$	780,572		$	669,229
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	12,830		$	10,947
Accrued expenses and other current liabilities	40,893			33,945
Customer account liabilities	6,590			5,637
Deferred revenue	86,236			75,097
Total current liabilities	146,549			125,626
Borrowings under credit facility	180,000			110,000
Deferred revenue, non-current	14,479			17,062
Operating lease liabilities, non-current	19,991			—
Deferred income taxes	9,251			10,345
Other liabilities	27,407			26,819
Total liabilities	397,677			289,852
Stockholders' equity
Preferred Stock, $.001 par value:
Authorized shares-4,000; issued and outstanding shares-none	—			—
Common Stock, $.001 par value:
Authorized shares-100,000; issued shares- 47,889 at March 31, 2020 and 46,995 at June 30, 2019; outstanding shares- 41,914 at March 31, 2020 and 41,315 at June 30, 2019	48			47
Additional paid-in-capital	754,140			721,438
Accumulated other comprehensive loss	(50,351		)	(43,593		)
Treasury stock: 5,975 shares at March 31, 2020 and 5,680 shares at June 30, 2019, at cost	(143,333		)	(127,095		)
Accumulated deficit	(177,609		)	(171,420		)
Total stockholders' equity	382,895			379,377
Total liabilities and stockholders' equity	$	780,572		$	669,229

3

See accompanying notes.

Bottomline Technologies (de), Inc.
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands, except per share amounts)
	Three Months Ended March 31,						Nine Months Ended March 31,
	2020			2019			2020			2019
Revenues:
Subscriptions	$	87,531		$	75,502		$	251,682		$	216,558
Software licenses	1,546			3,802			6,922			13,979
Service and maintenance	21,732			25,856			70,618			80,047
Other	906			1,278			2,360			3,137
Total revenues	111,715			106,438			331,582			313,721
Cost of revenues:
Subscriptions	34,670			31,623			100,884			94,644
Software licenses	82			226			400			667
Service and maintenance	12,534			12,818			38,516			38,052
Other	643			1,046			1,663			2,461
Total cost of revenues	47,929			45,713			141,463			135,824
Gross profit	63,786			60,725			190,119			177,897
Operating expenses:
Sales and marketing	27,370			25,165			80,046			70,772
Product development and engineering	18,000			16,887			54,628			50,267
General and administrative	13,734			13,175			41,840			38,944
Amortization of acquisition-related intangible assets	5,121			5,230			15,284			15,809
Total operating expenses	64,225			60,457			191,798			175,792
(Loss) income from operations	(439		)	268			(1,679		)	2,105
Other expense, net	(970		)	(695		)	(2,265		)	(2,334		)
Loss before income taxes	(1,409		)	(427		)	(3,944		)	(229		)
(Provision) benefit from income taxes	(6,059		)	1,251			(2,282		)	6,104
Net (loss) income	$	(7,468	)	$	824		$	(6,226	)	$	5,875
Net (loss) income per share:
Basic	$	(0.18	)	$	0.02		$	(0.15	)	$	0.15
Diluted	$	(0.18	)	$	0.02		$	(0.15	)	$	0.14
Shares used in computing net (loss) income per share:
Basic	41,823			40,911			41,668			40,412
Diluted	41,823			41,625			41,668			41,650
Other comprehensive (loss) income, net of tax:
Unrealized gain on available for sale securities	70			5			67			11
Change in fair value on interest rate hedging instruments	(3,482		)	(841		)	(3,590		)	(1,952		)
Minimum pension liability adjustments	5			18			13			(38		)
Foreign currency translation adjustments	(9,313		)	1,322			(3,248		)	(2,588		)
Other comprehensive (loss) income, net of tax:	(12,720		)	504			(6,758		)	(4,567		)
Comprehensive (loss) income	$	(20,188	)	$	1,328		$	(12,984	)	$	1,308

See accompanying notes.

5

Bottomline Technologies (de), Inc.
Unaudited Condensed Consolidated Statements of Stockholders' Equity
(in thousands)
Three Months Ended March 31, 2020
	Common Stock		Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Treasury Stock		Accumulated Deficit	Total Stockholders' Equity
	Shares	Amount			Shares	Amount
Balance at December 31, 2019	47,645	$48	$744,359	$(37,631)	5,948	$(140,701)	$(170,141)	$395,934
Issuance of common stock for employee stock purchase plan and upon exercise of stock options	—	—	450	—	(63)	1,508	—	1,958
Vesting of restricted stock awards	244	—	—	—	—	—	—	—
Repurchase of common stock to be held in treasury	—	—	—	—	90	(4,140)	—	(4,140)
Stock compensation plan expense	—	—	9,331	—	—	—	—	9,331
Minimum pension liability adjustments, net of tax	—	—	—	5	—	—	—	5
Net loss	—	—	—	—	—	—	(7,468)	(7,468)
Unrealized gain on available for sale securities, net of tax	—	—	—	70	—	—	—	70
Change in fair value on interest rate hedging instruments	—	—	—	(3,482)	—	—	—	(3,482)
Foreign currency translation adjustment	—	—	—	(9,313)	—	—	—	(9,313)
Balance at March 31, 2020	47,889	$48	$754,140	$(50,351)	5,975	$(143,333)	$(177,609)	$382,895

Three Months Ended March 31, 2019
	Common Stock		Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Treasury Stock		Accumulated Deficit	Total Stockholders' Equity
	Shares	Amount			Shares	Amount
Balance at December 31, 2018	46,468	$46	$700,520	$(35,704)	5,730	$(128,216)	$(175,801)	$360,845
Issuance of common stock for employee stock purchase plan and upon exercise of stock options	21	1	996		(50)	1,121		2,118
Vesting of restricted stock awards	237							—
Stock compensation plan expense			10,042					10,042
Minimum pension liability adjustments, net of tax				18				18
Net income							824	824
Unrealized gain on available for sale securities, net of tax				5				5
Change in fair value on interest rate hedging instruments				(841)				(841)
Foreign currency translation adjustment				1,322				1,322
Balance at March 31, 2019	$46,726	$47	$711,558	$(35,200)	5,680	$(127,095)	$(174,977)	$374,333

6

Nine Months Ended March 31, 2020
	Common Stock		Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Treasury Stock		Accumulated Deficit	Total Stockholders' Equity
	Shares	Amount			Shares	Amount
Balance at June 30, 2019	46,995	47	721,438	(43,593)	5,680	(127,095)	(171,420)	379,377
Issuance of common stock for employee stock purchase plan and upon exercise of stock options	13	—	1,226	—	(123)	2,907	—	4,133
Vesting of restricted stock awards	881	1	—	—	—	—	—	1
Repurchase of common stock to be held in treasury	—	—	—	—	418	(19,145)	—	(19,145)
Stock compensation plan expense	—	—	31,476	—	—	—	—	31,476
Minimum pension liability adjustments, net of tax	—	—	—	13	—	—	—	13
Net loss	—	—	—	—	—	—	(6,226)	(6,226)
Cumulative effect of adoption of updated lease standard	—	—	—	—	—	—	37	37
Unrealized gain on available for sale securities, net of tax	—	—	—	67	—	—	—	67
Change in fair value on interest rate hedging instruments	—	—	—	(3,590)	—	—	—	(3,590)
Foreign currency translation adjustment	—	—	—	(3,248)	—	—	—	(3,248)
Balance at March 31, 2020	47,889	$48	$754,140	$(50,351)	5,975	$(143,333)	$(177,609)	$382,895

Nine Months Ended March 31, 2019
	Common Stock		Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Treasury Stock		Accumulated Deficit	Total Stockholders' Equity
	Shares	Amount			Shares	Amount
Balance at June 30, 2018	44,834	45	678,549	(30,633)	5,806	(129,914)	(207,115)	310,932
Issuance of common stock for employee stock purchase plan and upon exercise of stock options	40	1	1,036	—	(126)	2,819	—	3,856
Vesting of restricted stock awards	920	—	—	—	—	—	—	—
Stock compensation plan expense	—	—	31,978	—	—	—	—	31,978
Warrant settlements	932	1	(5)	—	—	—	—	(4)
Minimum pension liability adjustments, net of tax	—	—	—	(38)	—	—	—	(38)
Net income	—	—	—	—	—	—	5,875	5,875
Cumulative effect of adoption of updated revenue recognition standard	—	—	—	—	—	—	26,263	26,263
Unrealized gain on available for sale securities, net of tax	—	—	—	11	—	—	—	11
Change in fair value on interest rate hedging instruments	—	—	—	(1,952)	—	—	—	(1,952)
Foreign currency translation adjustment	—	—	—	(2,588)	—	—	—	(2,588)
Balance at March 31, 2019	46,726	$47	$711,558	$(35,200)	5,680	$(127,095)	$(174,977)	$374,333

7

Bottomline Technologies (de), Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
	Nine Months Ended March 31,
	2020			2019
Operating activities:
Net (loss) income	$	(6,226	)	$	5,875
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Amortization of acquisition-related intangible assets	15,284			15,809
Stock-based compensation plan expense	31,298			31,906
Depreciation and other amortization	19,807			16,767
Gain on sale of cost-method investment	—			(237		)
Deferred income tax benefit	(271		)	(8,284		)
Provision for allowances on accounts receivable	204			167
Amortization of debt issuance costs	310			311
Amortization of discount on investments	(52		)	(108		)
Loss on disposal of equipment	104			596
Loss on foreign exchange	504			410
Changes in operating assets and liabilities:
Accounts receivable	(2,062		)	(3,520		)
Prepaid expenses and other current assets	(479		)	(3,913		)
Operating lease right-of-use asset, net	2,282			—
Other assets	(1,860		)	(1,483		)
Accounts payable	2,627			1,485
Accrued expenses	(461		)	(1,513		)
Operating lease liabilities	(2,125		)	—
Customer account liabilities	1,074			1,562
Deferred revenue	9,577			7,835
Other liabilities	594			(650		)
Net cash provided by operating activities	70,129			63,015
Investing activities:
Acquisition of businesses and assets, net of cash and restricted cash acquired	—			(21,449		)
Purchases of other investments	(144		)	—
Proceeds from sale of cost-method investment	—			237
Purchases of available-for-sale securities	(11,473		)	(7,588		)
Proceeds from sales of available-for-sale securities	9,900			9,200
Capital expenditures, including capitalization of software costs	(39,516		)	(45,725		)
Insurance proceeds received for damage to equipment	—			201
Net cash used in investing activities	(41,233		)	(65,124		)
Financing activities:
Repurchase of common stock	(19,145		)	—
Repayment of amounts borrowed under revolving credit facility	(10,000		)	(40,000		)
Amounts borrowed under revolving credit facility	80,000			—
Repayment of notes payable	(365		)	(552		)
Settlement of warrants	—			(4		)
Debt issuance costs related to credit facility	—			(597		)
Proceeds from exercise of stock options and employee stock purchase plan	4,133			3,856
Net cash provided by (used in) financing activities	54,623			(37,297		)
Effect of exchange rate changes on cash	(1,667		)	(1,427		)
Increase (decrease) in cash, cash equivalents and restricted cash	81,852			(40,833		)
Cash, cash equivalents and restricted cash at beginning of period	97,801			124,613
Cash, cash equivalents and restricted cash at end of period	$	179,653		$	83,780

8

Cash and cash equivalents at end of period	$	173,063	$	79,475
Cash held for customers at end of period	6,590		4,305
Cash, cash equivalents and restricted cash at end of period	$	179,653	$	83,780
Supplemental disclosures of non-cash financing activities:
Issuance of common stock upon settlement of the warrants	$	—	$	58,451

See accompanying notes.

9

Bottomline Technologies (de), Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2020

Note 1—Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Bottomline Technologies (de), Inc. (referred to below as we, us, our or Bottomline) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments) considered necessary for a fair presentation of the interim financial information have been included. Operating results for the three and nine months ended March 31, 2020 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending June 30, 2020, particularly in light of the novel coronavirus (COVID-19) pandemic and the effect it is having on the domestic and global economies. For further information, refer to the financial statements and footnotes included in the Annual Report on Form 10-K as filed with the Securities and Exchange Commission on August 29, 2019.

Note 2—Recent Accounting Pronouncements

Recently Adopted Pronouncements

Leases: In February 2016, the Financial Accounting Standards Board (FASB) issued an accounting standard update which requires balance sheet recognition of a lease liability and a corresponding right-of-use (ROU) asset for all leases unless, as a policy election, a lessee elects not to apply the standard to short-term leases. The pattern of recognition of lease related revenue and expenses are dependent on its classification. We adopted the standard on July 1, 2019 and elected the package of practical expedients which permitted us not to reassess prior conclusions regarding lease identification, lease classification and treatment of initial direct costs. For all asset classes, we adopted the lessee practical expedient to combine lease and non-lease components and made a policy election not to recognize a ROU asset or lease liability for leases with a term of less than twelve months. We also availed ourselves of the adoption expedient not to adjust our comparative period financial statements for the effects of the new standard or make additional disclosures for periods prior to the adoption date.

Upon adoption, we recognized operating ROU assets and operating lease liabilities of $26.7 million and $29.0 million, respectively, in our consolidated balance sheet. The difference between the ROU assets and lease liabilities is primarily related to the reclassification of deferred rent on our balance sheet at the date of adoption. The adoption of this standard did not have a material impact on our consolidated statements of comprehensive income (loss) or consolidated statements of cash flows.

Please refer to Note 10 Commitments and Contingencies for discussion of the adoption of this new standard.

Accounting Pronouncements to be Adopted

Financial Instruments - Credit Losses: In June 2016, the FASB issued an accounting standard update that replaces the incurred loss impairment model with an expected loss model for financial assets held at amortized cost, eliminates the concept of other-than-temporary impairment and requires credit losses associated with available-for-sale debt securities to be recorded through an allowance rather than a reduction in the amortized cost basis of the security. The changes are expected to result in earlier recognition of credit losses associated with financial assets. The estimate of expected credit losses will require entities to incorporate historical information, current information and reasonable and supportable forecasts. This standard also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. We will adopt this standard on July 1, 2020, on a modified retrospective basis, with the cumulative-effect recorded as an adjustment to the opening balance of accumulated deficit as of the effective date. We are currently evaluating the anticipated impact of this standard on our financial statements and do not currently expect the adoption of this standard to have a material impact on our financial statements.

Goodwill Impairment: In January 2017, the FASB issued an accounting standard update to simplify the test for goodwill impairment which removes the requirement to compare the carrying value of goodwill against its implied fair value. Under the revised standard, an entity will perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss should not exceed the total amount of goodwill allocated to the reporting unit. We will adopt this standard on July 1, 2020 on a prospective basis and do not currently expect the adoption of this standard to have a material impact on our financial statements.

Income Taxes: In December 2019, the FASB issued an accounting standard update related to simplifying the accounting for income taxes by eliminating certain exceptions related to intraperiod tax allocations, basis differences for changes in ownership interest in equity method investments, and the calculation of interim period income tax. The standard also simplifies other aspects of accounting for taxes. The standard is effective for us on July 1, 2021, with early adoption permitted. We are currently in the process of evaluating the effects of this update on our financial statements, including potential early adoption.

10

Note 3—Revenue Recognition

Remaining Performance Obligations

The transaction price we allocate to remaining performance obligations that are unsatisfied, or partially unsatisfied, as of March 31, 2020 represents contracted revenue that will be recognized in future periods. Our future performance obligations consist primarily of SaaS hosting/subscription obligations relating to future periods, contracted but uncompleted professional services obligations and support and maintenance obligations. During the three and nine months ended March 31, 2020 and 2019, the amount of revenue recognized from performance obligations satisfied in prior periods was not significant.

Revenue allocated to remaining performance obligations was $424.6 million as of March 31, 2020 of which we expect to recognize approximately $163.9 million over the next twelve months and the remainder thereafter. We exclude from our measure of remaining performance obligations amounts related to future transactional or usage-based fees for which the value of services transferred to the customer will correspond to the amount we will invoice for those services.

Contract Assets and Liabilities

The table below presents our accounts receivable, contract assets and deferred revenue balances as of March 31, 2020 and June 30, 2019.

	March 31,		June 30,
	2020		2019		$ Change
	(in thousands)
Accounts receivable	$	78,271	$	77,285	$	986
Contract assets	3,195		5,135		(1,940		)
Deferred revenue	100,715		92,159		8,556

Accounts receivable include amounts related to our contractual right to consideration for both completed and partially completed performance obligations, including amounts that may not have been invoiced, and is net of allowances for doubtful accounts. Contract assets arise when we recognize revenue in excess of amounts billed to the customer and the right to payment is contingent on conditions other than simply the passage of time, such as the future completion of a related performance obligation. Contract assets are classified in our consolidated balance sheets as other current assets for those contract assets with recognition periods of one year or less and other assets for contract assets with recognition periods greater than one year. Deferred revenue consists of billings or customer payments in excess of amounts recognized as revenue.

The increase in deferred revenue at March 31, 2020 as compared to June 30, 2019 reflects the impact on deferred revenue of our recognition of revenue from maintenance contracts, a significant portion of which are billed on a calendar year basis, as well as the impact of foreign exchange changes.

For the three and nine months ended March 31, 2020, we recognized $11.8 million and $74.1 million, respectively, in revenue from amounts that were included in deferred revenue as of June 30, 2019. For the three and nine months ended March 31, 2019, we recognized $14.6 million and $66.4 million, respectively, in revenue from amounts that were included in deferred revenue as of July 1, 2018.

11

Note 4—Fair Value

Fair Values of Assets and Liabilities

We measure fair value at 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. In determining fair value, the assumptions that market participants would use in pricing an asset or liability (the inputs) are based on a tiered fair value hierarchy consisting of three levels, as follows:

Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar instruments in active markets or for similar markets that are not active.

Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants would price the asset or liability.

Valuation techniques for assets and liabilities include methodologies such as the market approach, the income approach or the cost approach, and may use unobservable inputs such as projections, estimates and management’s interpretation of current market data. These unobservable inputs are only utilized to the extent that observable inputs are not available or cost-effective to obtain.

At March 31, 2020 and June 30, 2019, our assets and liabilities measured at fair value on a recurring basis were as follows:

	March 31, 2020								June 30, 2019
	Fair Value Measurements Using Input Types								Fair Value Measurements Using Input Types
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Money market funds (cash and cash equivalents)	$	1,319	$	—	$	—	$	1,319	$	2,807	$	—	$	—	$	2,807
Available for sale securities - Debt
Government - U.S. treasury securities	—		9,170		—		9,170		—		7,479		—		7,479
Total assets	$	1,319	$	9,170	$	—	$	10,489	$	2,807	$	7,479	$	—	$	10,286
Liabilities
Short-term derivative interest rate swap	$	—	$	1,404	$	—	$	1,404	$	—	$	37	$	—	$	37
Long-term derivative interest rate swap	$	—	$	3,471	$	—	$	3,471	$	—	$	1,248	$	—	$	1,248
Total liabilities	$	—	$	4,875	$	—	$	4,875	$	—	$	1,285	$	—	$	1,285

Fair Value of Financial Instruments

We have certain financial instruments which consist of cash and cash equivalents, cash and cash equivalents held for customers, marketable securities, accounts receivable, accounts payable, customer account liabilities, derivative interest rate swaps, assets related to deposits made to fund future requirements associated with Israeli severance arrangements and debt drawn on our Credit Facility (see Note 11 Indebtedness). Fair value information for each of these instruments is as follows:

• Cash and cash equivalents, cash and cash equivalents held for customers, accounts receivable, accounts payable and customer account liabilities fair values approximates their carrying values, due to the short-term nature of these instruments.

• Marketable securities classified as held to maturity, all of which mature within one year, are recorded at amortized cost, which at March 31, 2020 and June 30, 2019, approximated fair value.

• Marketable debt securities classified as available for sale are recorded at fair value. Unrealized gains and losses are included as a component of other accumulated comprehensive income (loss) in stockholders’ equity, net of tax. We use the specific identification method to determine any realized gains or losses from the sale of our marketable debt securities classified as available for sale.

• The fair value of our derivative interest rate swaps are based on the present value of projected cash flows that will occur over the life of the instruments, after considering certain contractual terms and counterparty credit risk.

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• The carrying value of assets related to deposits we have made to fund future requirements associated with Israeli severance arrangements was $1.0 million and $1.2 million at March 31, 2020 and June 30, 2019, respectively, which approximated their fair value.

• We have certain other investments for which there is no readily determinable fair value. The carrying value of these investments was $0.9 million and $0.7 million at March 31, 2020 and June 30, 2019, respectively, and they are reported as a component of our other assets. These investments are recorded at cost, less impairment (if any), plus or minus adjustments for observable price changes.

• We have borrowings of $180 million against our Credit Facility. The fair value of these borrowings, which are classified as Level 2, approximates their carrying value at March 31, 2020, as the instrument carries a variable rate of interest which reflects current market rates.

Marketable Securities

The table below presents information regarding our marketable securities by major security type as of March 31, 2020 and June 30, 2019.

	March 31, 2020						June 30, 2019
	Held to Maturity		Available for Sale		Total		Held to Maturity		Available for Sale		Total
	(in thousands)
Marketable securities:
Government and other debt securities	$	54	$	9,170	$	9,224	$	62	$	7,479	$	7,541
Total marketable securities	$	54	$	9,170	$	9,224	$	62	$	7,479	$	7,541

The following table summarizes the estimated fair value of our investments in available for sale marketable securities classified by the contractual maturity date of the securities:

	March 31, 2020
	(in thousands)
Due within 1 year	$	9,170
Due in 1 year through 5 years	—
Total	$	9,170

All of our available for sale marketable securities are classified as current assets.

The following table presents the aggregate fair values and gross unrealized losses for those available for sale investments that were in an unrealized loss position as of March 31, 2020 and June 30, 2019, respectively, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:

	At March 31, 2020				At June 30, 2019
	Less than 12 Months
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(in thousands)
Government - U.S. treasury securities	$	—	$	—	$	800	$	(1	)
Total	$	—	$	—	$	800	$	(1	)

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Note 5—Business Acquisitions

BankSight Software Systems

In June 2019, we acquired the remaining capital stock of BankSight Software Systems, Inc. (BankSight) for $2.8 million in cash and the issuance of 40,000 shares of our common stock. The common stock had vesting conditions tied to the continued employment of a prior stockholder of BankSight and was therefore excluded from the purchase price allocation. Prior to the acquisition, we had a pre-existing relationship in the form of a minority investment in preferred stock of BankSight in the amount of $3.5 million. The carrying value of our prior investment approximated its fair value at the time of our acquisition and the total fair value we paid to acquire the outstanding capital stock of BankSight, $6.3 million, was allocated to assets acquired and liabilities assumed. BankSight’s operating results are included in our Banking Solutions segment from the date of the acquisition forward and did not have a material impact on our revenue or net income.

In the allocation of the purchase price we recorded $3.6 million of goodwill. The goodwill is not deductible for income tax purposes and arose principally due to the anticipated future benefits arising from the acquisition. Identifiable intangible assets of $3.1 million, consisting primarily of technology related assets, are being amortized over a weighted average estimated useful life of 11 years.

Experian Limited

In March 2019, we acquired certain technology assets and customer related assets from Experian Limited (Experian) for 9.5 million British Pound Sterling (approximately $12.6 million based on the exchange rate in effect at the acquisition date). In the final allocation of the purchase price, we recorded $1.7 million of goodwill, which is not deductible for income tax purposes, which arose principally due to the anticipated future benefits arising from the acquisition. Identifiable intangible assets of $12.8 million, consisting primarily of customer related assets, are being amortized over a weighted average estimated useful life of 11 years. Experian’s operating results are included in our Payments and Documents segment from the date of the acquisition forward and did not have a material impact on our revenue or net income.

In May 2019, we were notified by the United Kingdom's (UK) Competition and Markets Authority (CMA) that it was reviewing our acquisition of these assets from Experian to assess whether the acquisition could result in a substantial lessening of competition. In March 2020, the CMA review process was completed, with a finding that our acquisition of assets from Experian did not raise anti-competition concerns.

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Note 6—Net (Loss) Income Per Share

The following table sets forth the computation of basic and diluted net (loss) income per share:

	Three Months Ended March 31,					Nine Months Ended March 31,
	2020			2019		2020			2019
	(in thousands, except per share amounts)
Numerator - basic and diluted:
Net (loss) income	$	(7,468	)	$	824	$	(6,226	)	$	5,875
Denominator:
Shares used in computing basic net (loss) income per share attributable to common stockholders	41,823			40,911		41,668			40,412
Impact of dilutive securities	—			714		—			1,238
Shares used in computing diluted net (loss) income per share attributable to common stockholders	41,823			41,625		41,668			41,650
Basic net (loss) income per share attributable to common stockholders	$	(0.18	)	$	0.02	$	(0.15	)	$	0.15
Diluted net (loss) income per share attributable to common stockholders	$	(0.18	)	$	0.02	$	(0.15	)	$	0.14

For the three and nine months ended March 31, 2020, approximately 2.2 million and 2.3 million, respectively, of shares of unvested restricted stock and shares underlying stock options were excluded from the calculation of diluted earnings per share as their effect on the calculation would have been anti-dilutive.

Note 7—Operations by Segments and Geographic Areas

Segment Information

Operating segments are the components of our business for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our chief executive officer. Our operating segments are generally organized by the type of product or service offered and by geography.

Similar operating segments have been aggregated into four reportable segments as follows:

Cloud Solutions. Our Cloud Solutions segment provides customers with SaaS technology offerings that facilitate electronic payment, electronic invoicing, and spend management. Our legal spend management solutions, which enable customers to create more efficient processes for managing invoices generated by outside law firms while offering insight into important legal spend factors such as expense monitoring and outside counsel performance, are included within this segment. This segment also incorporates our settlement network solutions (financial messaging and Paymode-X). Our settlement network solutions are highly scalable, secure and cost effective and facilitate cash payment and transaction settlement between businesses, their vendors and banks. Revenue within this segment is generally recognized on a subscription or transaction basis or ratably over the contract term.

Banking Solutions. Our Banking Solutions segment provides solutions that are specifically designed for banking and financial institution customers. Our Banking Solutions products are sold predominantly on a hosted basis, with revenue recorded over time.

Payments and Documents. Our Payments and Documents segment supplies financial business process management software solutions, including making and collecting payments, sending and receiving invoices, and generating and storing business documents. This segment also provides a range of standard professional services and equipment and supplies that complement and enhance our core software products. When licensed for on-premise deployment, software license revenue is typically recorded upon delivery of the software and commencement of the license term. In hosted arrangements, we typically record revenue over time. Professional services revenue is normally recorded as we perform the work and software support and maintenance revenue is recorded ratably over the support period.

Other. Our Other segment consists of our healthcare and cyber fraud and risk management solutions. The cyber fraud and risk management results reported in this segment reflect the operations of the legacy sales and product development channel we acquired, however these solutions are sold as part of all of our operating segments. Our cyber fraud and risk management solutions non-invasively monitor, replay and analyze user behavior to flag and even stop suspicious activity in real time. Our healthcare solutions for patient registration, electronic signature, mobile document and payments allow healthcare organizations to improve business efficiencies, reduce costs and improve care quality. Software revenue for perpetual licenses of our cyber fraud and risk management and healthcare products is typically recorded upon delivery of the software and commencement of the license term. Professional

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services revenue is recorded as we perform the work and software support and maintenance revenue is recorded ratably over the support period which is normally twelve months.

Periodically a sales person in one operating segment will sell products and services that are typically sold within a different operating segment. In such cases, the transaction is generally recorded by the operating segment to which the sales person is assigned. Accordingly, segment results can include the results of transactions that have been allocated to a specific segment based on the contributing sales resources, rather than the nature of the product or service. Conversely, a transaction can be recorded by the operating segment primarily responsible for delivery to the customer, even if the sales person is assigned to a different operating segment.

Our chief operating decision maker assesses segment performance based on a variety of factors that normally include segment revenue and a segment measure of profit or loss. Each segment’s measure of profit or loss is on a pre-tax basis and excludes certain items as presented in our reconciliation of the measure of total segment profit to GAAP income (loss) before income taxes that follows. There are no inter-segment sales; accordingly, the measure of segment revenue and profit or loss reflects only revenues from external customers. The costs of certain corporate level expenses, primarily general and administrative expenses, are allocated to our operating segments based on a percentage of the segment’s revenues.

We do not track or assign our assets by operating segment.

Segment information for the three and nine months ended March 31, 2020 and 2019 according to the segment descriptions above, is as follows:

	Three Months Ended March 31,						Nine Months Ended March 31,
	2020			2019			2020			2019
	(in thousands)
Segment revenue:
Cloud Solutions	$	54,008		$	51,439		$	161,905		$	151,342
Banking Solutions	24,545			23,903			71,981			69,283
Payments and Documents	29,213			26,094			84,771			78,271
Other	3,949			5,002			12,925			14,825
Total segment revenue	$	111,715		$	106,438		$	331,582		$	313,721
Segment measure of profit:
Cloud Solutions	$	9,614		$	11,463		$	32,598		$	32,497
Banking Solutions	1,585			2,082			1,744			6,097
Payments and Documents	8,213			6,933			24,853			22,799
Other	(3,397		)	(1,545		)	(7,459		)	(3,019		)
Total measure of segment profit	$	16,015		$	18,933		$	51,736		$	58,374

A reconciliation of the measure of total segment profit to GAAP loss before income taxes is as follows:

	Three Months Ended March 31,						Nine Months Ended March 31,
	2020			2019			2020			2019
	(in thousands)
Total measure of segment profit	$	16,015		$	18,933		$	51,736		$	58,374
Less:
Amortization of acquisition-related intangible assets	(5,121		)	(5,230		)	(15,284		)	(15,809		)
Stock-based compensation plan expense	(9,289		)	(10,015		)	(31,298		)	(31,906		)
Acquisition and integration-related expenses	(986		)	(1,373		)	(4,640		)	(2,966		)
Restructuring expense	(730		)	(1,332		)	(939		)	(1,963		)
Other non-core benefit	—			—			10			—
Global ERP system implementation and other costs	(61		)	(557		)	(485		)	(3,110		)
Other expense, net of pension adjustments	(1,237		)	(853		)	(3,044		)	(2,849		)
Loss before income taxes	$	(1,409	)	$	(427	)	$	(3,944	)	$	(229	)

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The following depreciation and other amortization expense amounts are included in the measure of segment profit:

	Three Months Ended March 31,				Nine Months Ended March 31,
	2020		2019		2020		2019
	(in thousands)
Depreciation and other amortization expense:
Cloud Solutions	$	3,540	$	2,854	$	10,121	$	8,663
Banking Solutions	2,480		1,919		6,777		5,634
Payments and Documents	887		719		2,272		2,202
Other	248		84		637		268
Total depreciation and other amortization expense	$	7,155	$	5,576	$	19,807	$	16,767

Disaggregation of Revenue

The tables below present our subscriptions revenue and total revenue disaggregated by major product classification for the three and nine months ended March 31, 2020 and 2019.

(in thousands)	Three Months Ended March 31, 2020
	2020				2019
	Subscriptions Revenue		Total Revenue		Subscriptions Revenue		Total Revenue
Payment Settlement Solutions (1)	$	37,831	$	42,084	$	33,058	$	38,572
Banking Solutions	20,984		24,545		17,819		23,903
Legal Spend Management	21,521		21,521		18,916		18,916
All other (2)	7,195		23,565		5,709		25,047
Total revenues	$	87,531	$	111,715	$	75,502	$	106,438

(in thousands)	Nine Months Ended March 31,
	2020				2019
	Subscriptions Revenue		Total Revenue		Subscriptions Revenue		Total Revenue
Payment Settlement Solutions (1)	$	110,201	$	124,584	$	95,272	$	114,101
Banking Solutions	57,664		71,981		49,410		69,283
Legal Spend Management	63,508		63,508		56,461		56,461
All other (2)	20,309		71,509		15,415		73,876
Total revenues	$	251,682	$	331,582	$	216,558	$	313,721

We derive the majority of our revenue from subscription arrangements. The substantial majority of our non-subscription revenue is derived from software support and maintenance fees and from professional services, with such revenue being recorded by all of our operating segments, but with the largest concentration of this revenue being derived from our legacy business payments and documents products in our Payments and Documents segment.

⁽¹⁾ Consists of our cloud-based business payments settlement network Paymode-X, our financial messaging settlement network (each of which are components of our Cloud Solutions segment) and our PTX payment solution (which is a component of our Payments and Documents segment).

⁽²⁾ Consists of our legacy business payments and documents products (which are components of our Payments and Documents segment) and revenue from our Other segment.

Geographic Information

We have presented geographic information about our revenues below. This presentation allocates revenue based on the point of sale, not the location of the customer. Accordingly, we derive revenues from geographic locations based on the location of the customer that would vary from the geographic areas listed here.

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	Three Months Ended March 31,				Nine Months Ended March 31,
	2020		2019		2020		2019
	(in thousands)
Revenues from unaffiliated customers:
United States	$	69,164	$	66,227	$	207,566	$	194,132
United Kingdom	27,928		24,942		80,002		73,313
Switzerland	9,694		9,682		29,213		29,289
Other	4,929		5,587		14,801		16,987
Total revenues from unaffiliated customers	$	111,715	$	106,438	$	331,582	$	313,721

Long-lived assets based on geographical location, excluding deferred tax assets and intangible assets, were as follows:

	At March 31,		At June 30,
	2020		2019
	(in thousands)
Long-lived assets:
United States	$	62,823	$	44,357
United Kingdom	44,542		32,035
Other	15,189		5,326
Total long-lived assets	$	122,554	$	81,718

Note 8—Income Taxes

The income tax expense we record in any interim period is based on our estimated effective tax rate for the fiscal year for those tax jurisdictions in which we can reliably estimate that rate. The calculation of our estimated effective tax rate requires an estimate of pre-tax income by tax jurisdiction as well as total tax expense for the fiscal year. Accordingly, our annual estimated effective tax rate is subject to adjustment if there are changes to our initial estimates of total tax expense or pre-tax income, including the mix of income by jurisdiction. For those tax jurisdictions for which we are unable to reliably estimate an overall effective tax rate, we calculate income tax expense based upon the actual effective tax rate for the year-to-date period.

Provision for Income Taxes

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in the U.S. in response to the COVID-19 pandemic. The CARES Act, among other things, includes a technical amendment to provide for bonus depreciation on certain qualifying assets. The CARES Act also provides for the ability to accelerate the refund of remaining alternative minimum tax credits, which will allow us to immediately request an additional $0.3 million in refunds that otherwise would have been received over the course of the next three years.

We recorded income tax expense of $6.1 million and an income tax benefit of $1.3 million for the three months ended March 31, 2020 and 2019, respectively. In the three months ended March 31, 2020, income tax expense was attributable to our U.S., UK and Switzerland operations, offset in part by a tax benefit recorded against operating losses in Israel, discrete tax benefits of $0.5 million relating to stock-based compensation and a discrete tax benefit of $0.3 million in the U.S. as a result of the bonus depreciation under the CARES Act as discussed above. The income tax benefit for the three months ended March 31, 2019 was driven largely by discrete tax benefits of $0.8 million relating to stock-based compensation.

We recorded income tax expense of $2.3 million and an income tax benefit of $6.1 million for the nine months ended March 31, 2020 and 2019, respectively. In the nine months ended March 31, 2020, income tax expense was attributable to our UK and Switzerland operations, offset in part by a tax benefit recorded against operating losses in Israel, discrete tax benefits of $1.1 million relating to stock-based compensation, and a discrete tax benefit of $0.3 million in the U.S. as a result of the CARES Act discussed above. In the nine months ended March 31, 2019, the income tax benefit we recorded was driven largely by discrete tax benefits of $5.4 million relating to stock-based compensation and a discrete tax benefit of $0.5 million arising from a reduction to deferred tax liabilities related to state tax consequences of repatriated foreign earnings.

We currently anticipate that our unrecognized tax benefits will decrease within the next twelve months by approximately $0.4 million as a result of the expiration of certain statutes of limitations associated with intercompany transactions subject to tax in multiple jurisdictions.

We record a deferred tax asset if we believe that it is more likely than not that we will realize a future tax benefit. Ultimate realization of any deferred tax asset is dependent on our ability to generate sufficient future taxable income in the appropriate tax jurisdiction before the expiration of carryforward periods, if any. Our assessment of deferred tax asset recoverability considers

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many different factors including historical and projected operating results, the reversal of existing deferred tax liabilities that provide a source of future taxable income, the impact of current tax planning strategies and the availability of future tax planning strategies. We establish a valuation allowance against any deferred tax asset for which we are unable to conclude that recoverability is more likely than not.

At March 31, 2020, we had a total valuation allowance of $34.7 million against our deferred tax assets given the uncertainty of recoverability of these amounts.

Note 9—Goodwill and Other Intangible Assets

Goodwill and acquired intangible assets are initially recorded at fair value and tested periodically for impairment. We perform an impairment test of goodwill during the fourth quarter of each fiscal year or sooner, if indicators of potential impairment arise.

At March 31, 2020, the carrying value of goodwill for all of our reporting units was $205.2 million.

The following tables set forth the information for intangible assets subject to amortization and for intangible assets not subject to amortization.

	As of March 31, 2020
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Weighted Average Remaining Life
	(in thousands)							(in years)
Amortized intangible assets:
Customer related	$	218,650	$	(153,476	)	$	65,174	7.7
Core technology	133,038		(95,444		)	37,594		7.0
Other intangible assets	22,025		(19,656		)	2,369		4.6
Capitalized software development costs	25,410		(12,960		)	12,450		2.3
Software (1)	80,609		(42,865		)	37,744		3.8
Total	$	479,732	$	(324,401	)	$	155,331
Unamortized intangible assets:
Goodwill						205,206
Total intangible assets						$	360,537

	As of June 30, 2019
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Weighted Average Remaining Life
	(in thousands)							(in years)
Amortized intangible assets:
Customer related	$	219,893	$	(145,144	)	$	74,749	8.5
Core technology	130,226		(90,017		)	40,209		7.4
Other intangible assets	25,712		(19,030		)	6,682		5.0
Capitalized software development costs	23,213		(10,006		)	13,207		3.0
Software (1)	72,018		(38,516		)	33,502		4.2
Total	$	471,062	$	(302,713	)	$	168,349
Unamortized intangible assets:
Goodwill						206,101
Total intangible assets						$	374,450

——————

⁽¹⁾  Software includes purchased software and software developed for internal use.

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Estimated amortization expense for the remainder of fiscal year 2020 and subsequent fiscal years for acquired intangible assets, capitalized software development costs and software, in each case that have been placed in service as of March 31, 2020, is as follows:

	Acquired Intangible Assets		Capitalized Software Development Costs		Software
	(in thousands)
Remaining 2020	$	5,078	$	1,021	$	3,059
2021	18,937		4,083		9,312
2022	16,848		4,083		7,432
2023	15,473		1,239		5,533
2024	13,707		537		4,018
2025 and thereafter	35,094		50		2,291

Each period, for capitalized software development costs, we evaluate whether amortization expense using a ratio of revenue in the period to total expected revenue over the product’s expected useful life would result in greater amortization than as calculated under a straight-line methodology and, if that were to occur, amortization in that period would be accelerated accordingly.

The following table represents a rollforward of our goodwill balances, by reportable segment:

	Cloud Solutions		Banking Solutions		Payments and Documents			Other		Total
	(in thousands)
Balance at June 30, 2019 (1)	$	90,307	$	39,451	$	68,149		$	8,194	$	206,101
Measurement period adjustment (2)	—		65		—			—		65
Impact of foreign currency translation	296		—		(1,256		)	—		(960		)
Balance at March 31, 2020 (1)	$	90,603	$	39,516	$	66,893		$	8,194	$	205,206

——————

⁽¹⁾  Other goodwill balance is net of $7.5 million accumulated impairment losses, recorded previously.

⁽²⁾  The measurement period adjustment relates to our BankSight acquisition. See Note 5 Business and Asset Acquisitions.

There can be no assurance that there will not be impairment charges in future periods as a result of future impairment reviews. Given the particular challenge of COVID-19, we performed additional review procedures over our goodwill and intangible assets as of March 31, 2020 and concluded that there were not indicators that suggested that it was more likely than not that these assets were impaired as of that date. Any material adverse change to our business results would increase the risk of impairment to our goodwill and other intangible assets and any such impairment charge would likely be material.

Note 10—Commitments and Contingencies

Leases

On July 1, 2019, we adopted the new accounting standard related to leases. We determine if any arrangement is, or contains, a lease at its inception based on whether or not we have the right to control the asset during the contract period. We are a lessee in any lease contract when we obtain the right to control the asset.

We determine the lease term by assuming the exercise of options that are reasonably certain. Leases with a lease term of 12 months or less at inception are not reflected in our balance sheet and those lease costs are expensed on a straight-line basis over the respective term. Leases with a term greater than 12 months are reflected as non-current ROU assets and current and non-current lease liabilities in our consolidated balance sheets. Current lease liabilities are classified as a component of accrued expenses and other current liabilities.

As the implicit interest rate in our leases is generally not known, we use our incremental borrowing rate as the discount rate for purposes of determining the present value of our lease liabilities. Our determination of the incremental borrowing rate takes into consideration the expected term of the lease, the effect of the currency in which the lease is denominated and the rate of interest we would expect to incur on a collateralized debt instrument. At March 31, 2020, our weighted average discount rate utilized for our leases was 5.0%.

When our contracts contain lease and non-lease elements, we account for both as a single lease component.

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We lease office space in cities worldwide under facility leases that expire at various dates. We are typically required to pay certain incremental operating costs above the base rent for our facility leases. Our leases may include periodic payment adjustments based on changes in applicable price indexes. To the extent the adjustment is considered a fixed payment it is included in the measurement of the ROU asset and lease liability, otherwise it is recognized in the period incurred. We also have a variety of data center locations and, to a lesser extent, vehicle and equipment leases. Our facility leases represent the substantial majority of our operating leases and often include renewal options that we can exercise unilaterally. At March 31, 2020, renewal options ranged from 3 months to 10 years.

At March 31, 2020, our operating leases had a weighted average remaining lease term of 5.9 years and we had no material capital leases.

Additional information of our lease activity, as of and for the three and nine months ended March 31, 2020 is as follows:

Operating leases:	Three Months Ended March 31, 2020			Nine Months Ended March 31, 2020
	(in thousands)
Operating lease cost	$	1,913		$	5,711
Short-term lease cost	138			485
Variable lease cost	477			1,520
Sublease income	(17		)	(269		)
Total lease cost	$	2,511		$	7,447

	March 31, 2020
	(in thousands)
Right-of-use assets, net	$	23,953
Operating lease liabilities, current (1)	$	6,780
Operating lease liabilities, non-current	19,991
Total operating lease liabilities	$	26,771

——————

⁽¹⁾  Included as a component of accrued expenses and other current liabilities.

	Nine Months Ended March 31, 2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	5,685
Right-of-use assets obtained in exchange for lease obligations	$	2,332

Remaining maturities of lease liabilities at March 31, 2020 were as follows:

For the year ending June 30,	Operating Leases
	(in thousands)
2020	$	1,958
2021	7,774
2022	5,479
2023	3,711
2024	2,824
Thereafter	9,761
Total lease payments	31,507
Less imputed interest	(4,736		)
Total lease liabilities	$	26,771

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As of March 31, 2020, we have additional operating leases that have not yet commenced of $2.7 million. These operating leases will commence by fiscal year 2021 and have lease terms of 3 years to 12 years.

Legal Matters

We are, from time to time, a party to legal proceedings and claims that arise out of the ordinary course of our business. We are not currently a party to any material legal proceedings.

Note 11—Indebtedness

Credit Agreement

We are party to a credit agreement (the Credit Agreement) that provides for a revolving credit facility in the amount of up to $300 million (the Credit Facility) and that expires in July 2023. We have the right to request an increase of the aggregate commitments under the Credit Facility by up to an additional $150 million, subject to specified conditions. At March 31, 2020, we owed $180 million under the Credit Facility.

The Credit Agreement contains customary representations, warranties and covenants, including, but not limited to, material adverse events, specified restrictions on indebtedness, liens, investments, acquisitions, sales of assets, dividends and other restricted payments, and transactions with affiliates. We are required to comply with (a) a maximum consolidated net leverage ratio of 3.75 to 1.00, stepping down to 3.50 to 1.00 for the quarter ending June 30, 2020; and (b) a minimum consolidated interest coverage ratio of 3.00 to 1.00. The Credit Agreement also contains customary events of default and related cure provisions. As of March 31, 2020, we were in compliance with all covenants.

Note 12—Derivative Instruments

Cash Flow Hedges

Interest Rate Swap Agreements

We utilize interest rate swap agreements to hedge our exposure to interest rate risk. At March 31, 2020, we had two outstanding interest rate swap agreements with notional values of $100 million and $80 million.

The notional value of each interest rate swap agreement is expected to match the corresponding principal amount of a portion of our borrowings under the Credit Facility.

The $100 million notional value agreement is effective as of December 1, 2017 and expires on December 1, 2021. During this period, the notional amount will have a fixed interest rate of 1.9275% and Citizens Bank, National Association, as counterparty to the agreement, will pay us interest at a floating rate based on the 1 month USD-LIBOR-BBA swap rate on the notional amount. Interest payments are made quarterly on a net settlement basis.

The $80 million notional value agreement is effective as of December 1, 2021 and expires on July 16, 2023. During this period, the notional amount will have a fixed interest rate of 2.125% and Bank of America, N.A., as counterparty to the agreement, will pay us interest at a floating rate based on the 1 month USD-LIBOR-BBA swap rate on the notional amount. Interest payments will be made monthly on a net settlement basis.

We designated the interest rate swaps as hedging instruments and they qualified for hedge accounting upon inception and at March 31, 2020. To continue to qualify for hedge accounting, the instruments must retain a “highly effective” ability to hedge interest rate risk for borrowings under the Credit Facility. We are required to test hedge effectiveness at the end of each financial reporting period. If a derivative qualifies for hedge accounting, changes in fair value of the hedge instrument are recognized in accumulated other comprehensive income (loss) (AOCI) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The reclassification into earnings is recorded as a component of our interest expense within other expense, net. If the instrument were to lose some or all of its hedge effectiveness, changes in fair value for the “ineffective” portion of the instrument would be recorded immediately in earnings.

The fair values of the interest rate swaps and their respective locations in our consolidated balance sheets at March 31, 2020 and June 30, 2019 were as follows:

Description	Balance Sheet Location	March 31, 2020		June 30, 2019
Derivative interest rate swaps		(in thousands)
Short-term derivative liability	Accrued expenses and other current liabilities	$	1,404	$	37
Long-term derivative liability	Other liabilities	$	3,471	$	1,248

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The following table presents the effect of the derivative interest rate swaps in our consolidated statement of comprehensive loss for the nine months ended March 31, 2020 and 2019.

	Gain (Loss) in AOCI June 30, 2019			Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)			Amount of (Gain) Loss Reclassified from AOCI into Net Loss (Effective Portion) (1)			Gain (Loss) in AOCI March 31, 2020
	(in thousands)
Derivative interest rate swap	$	(1,285	)	$	(3,595	)	$	5		$	(4,875	)
	Gain (Loss) in AOCI June 30, 2018			Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)			Amount of (Gain) Loss Reclassified from AOCI into Net Loss (Effective Portion) (1)			Gain (Loss) in AOCI March 31, 2019
	(in thousands)
Derivative interest rate swap	$	2,590		$	(1,671	)	$	(281	)	$	638

——————

⁽¹⁾  Recorded as interest income (expense) within other expense, net in our unaudited consolidated statements of comprehensive income (loss).

During the three and nine months ended March 31, 2020, we concluded that no portion of the hedges was ineffective.

We expect to reclassify approximately $1.6 million of this unrealized loss from AOCI to earnings over the next twelve months.

Note 13—Postretirement and Other Employee Benefits

Defined Benefit Pension Plan

We sponsor a defined benefit pension plan for our Swiss-based employees (the Swiss pension plan) that is governed by local regulatory requirements. This plan includes certain minimum benefit guarantees that, under U.S. GAAP, require defined benefit plan accounting.

Net periodic pension costs for the Swiss pension plan included the following components:

	Three Months Ended March 31,						Nine Months Ended March 31,
	2020			2019			2020			2019
	(in thousands)
Components of net periodic cost
Service cost	$	749		$	625		$	2,202		$	1,900
Interest cost	57			113			169			343
Prior service credit	(79		)	(76		)	(233		)	(231		)
Net actuarial loss	122			54			359			164
Expected return on plan assets	(317		)	(342		)	(933		)	(1,040		)
Net periodic cost	$	532		$	374		$	1,564		$	1,136

The components of net periodic pension cost other than current service cost are presented within other expense, net in our unaudited consolidated statements of comprehensive income (loss).

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. The statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Without limiting the foregoing, the words may, will, should, could, expects, plans, intends, anticipates, believes, estimates, predicts, potential and similar expressions are intended to identify forward-looking statements. All forward-looking statements included in this Quarterly Report on Form 10-Q are based on information available to us up to and including the date of this report, and we assume no obligation to update any such forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth below under Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II. Item 1A. Risk Factors and elsewhere in this Quarterly Report on Form 10-Q. You should carefully review those factors and also carefully review the risks outlined in other documents that we file from time to time with the Securities and Exchange Commission (SEC), including Part II. Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019.

In the management discussion that follows, we have highlighted those changes and operating events that were the primary factors affecting period to period fluctuations. The remainder of the change in period to period fluctuations from that which is specifically discussed arises from various individually insignificant items.

Overview

We help make complex business payments simple, smart and secure. Corporations and banks rely on us for domestic and international payments, efficient cash management, automated workflows for payment processing and bill review, and fraud detection, behavioral analytics and regulatory compliance solutions.

We operate settlement networks that facilitate electronic payments and transaction settlement between businesses, their vendors and banks. We offer solutions that banks use to provide payment, cash management and treasury capabilities to their business customers, as well as solutions that financial institutions use to facilitate customer acquisition and to grow profitable customer relationships through intelligent engagement. Our legal spend management solutions help manage and determine the right amount to pay for legal services and claims vendor expenditures for insurance companies and other large consumers of outside legal services as well as related tools and analytics for the law firms themselves. Corporate customers rely on our solutions to automate payment and accounts payable processes and to streamline and manage the production and retention of electronic documents. We also offer cyber fraud and risk management solutions that are designed to non-invasively monitor and analyze user behavior and payment transactions to flag behavioral and data anomalies and other suspicious activity.

Our solutions are designed to complement, leverage and extend our customers’ existing information systems, accounting applications and banking relationships so that they can be deployed quickly and efficiently. To help our customers realize the maximum value from our products and meet their specific business requirements, we also provide professional services for training, consulting and product enhancement.

Financial Highlights

For the nine months ended March 31, 2020, our revenue increased to $331.6 million from $313.7 million in the same period of the prior fiscal year. Our revenue for the nine months ended March 31, 2020 was unfavorably impacted by $1.8 million due to the impact of foreign currency exchange rates primarily related to the British Pound Sterling, which depreciated against the U.S. Dollar as compared to the same period of the prior fiscal year. The overall revenue increase was attributable to revenue increases in our Cloud Solutions segment of $10.6 million, our Payments and Documents Solutions segment of $6.5 million and our Banking Solutions segment of $2.7 million. Increased revenue from our legal spend management and Paymode-X settlement network solutions accounted for the revenue increase in our Cloud Solutions segment. The Payments and Documents Solutions segment's revenue increase was primarily due to increased revenue from our European Payments and Documents solutions, and the Banking Solutions segment revenue increase was primarily due to increased subscriptions revenue from our hosted solutions.

Our net loss was $6.2 million in the nine months ended March 31, 2020 compared to net income of $5.9 million in the same period of the prior fiscal year. Our net loss for the nine months ended March 31, 2020 was impacted by increased operating expenses of $16.0 million as we continued to invest in initiatives designed to grow our business, partially offset by gross profit expansion of $12.2 million. The increase in gross margins was primarily driven by the revenue increases in our Cloud Solutions and Payments and Documents Solutions segments. The increase in operating expenses was primarily driven by increased sales and marketing costs of $9.3 million and increased product development and engineering costs of $4.4 million as we continued to invest in new sales opportunities, product promotion and product innovation. The nine months ended March 31, 2020 also included an income tax provision of $2.2 million as compared to an income tax benefit of $6.1 million, arising predominantly from discrete tax benefits during the nine months ended March 31, 2019.

In the nine months ended March 31, 2020, we derived approximately 37% of our revenue from customers located outside of North America, principally in the United Kingdom (UK), continental Europe and the Asia-Pacific region.

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Over the past several years we have made strategic investments in innovative new technology offerings that we believe will enhance our competitive position, help us win new business, drive subscription revenue growth and expand our operating margins. We expect to continue to make investments in our suite of products so that we can continue to offer innovative, feature-rich technology solutions to our customers.

COVID-19 Update

The United States and the global communities in which we operate are facing a severe challenge posed by the COVID-19 pandemic. In response to this challenge we, like many companies, have suspended travel for employees, temporarily closed our offices and, since mid-March 2020, have required our employees to work remotely. We have been operating effectively under our remote work model, which we anticipate continuing for some time to ensure the safety and well-being of our employees.

The full extent of the impact of the COVID-19 pandemic on our business and operating results is currently uncertain and will depend on many factors outside of our control, including the duration and severity of the pandemic and the resulting economic downturn. We anticipate that there will be near-term reductions in certain of our revenue streams and delays in customer payments. In some cases, scheduled implementations of our solutions will be delayed as our customers focus on the impact of COVID-19 on their businesses. We anticipate some near-term impact to our transaction based revenue streams such as Paymode-X, as business payments diminish in the immediate economic climate. We also anticipate an impact to new software license sales and professional services revenues since interacting directly with customers in either a sales setting or an on-site professional services setting is difficult in this environment. However, the majority of our revenues are recurring which we believe offers significant protection from the pandemic’s economic disruptions in the short term. Accordingly, we believe that our existing financial position will allow us to manage the impact of COVID-19 for the foreseeable future.

Looking forward to the quarter ending June 30, 2020, we anticipate that our normal subscription revenue growth expectations may be fully offset by the impact of reduced transactional volumes and delays in customer go-live dates, in which case subscription revenues will approximate the results recorded for the quarter ended March 31, 2020. We anticipate that total revenues could decrease from March 2020 quarterly levels due to the near term impact of decreases in software, professional services and certain transactional revenue streams and that any such reductions will negatively impact our net profit (loss) results for the quarter ending June 30, 2020. However, we anticipate that cost savings due to the suspension of all employee travel, hiring deferrals and salary freezes will partially offset the impact of these revenue decreases.

Longer term, we believe that one impact of this crisis will be the acceleration of the digital transformation, particularly for the mission critical applications we provide. We are at the center of that transformation with our product set and overall market position and we plan to extend our competitive advantage through this challenge and emerge stronger than before.

Critical Accounting Policies and Significant Judgments and Estimates

We believe that several accounting policies are important to understanding our historical and future performance. We refer to these policies as critical because they involve areas of financial reporting that require us to make judgments and estimates about matters that are uncertain at the time we make the estimate and different estimates - which also would have been reasonable - could have been used.

The critical accounting policies and estimates we identified in our most recent Annual Report on Form 10-K for the fiscal year ended June 30, 2019 related to revenue recognition, the valuation of goodwill and intangible assets, the valuation of acquired deferred revenue, capitalized software costs and income taxes. There have been no changes to the critical accounting policies from those we disclosed in Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019.

It is important that the discussion of our operating results that follows be read in conjunction with the critical accounting policies disclosed in Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019, as filed with the SEC on August 29, 2019, as updated above.

Recent Accounting Pronouncements

For information with respect to recent accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, please refer to Note 2 Recent Accounting Pronouncements to our unaudited consolidated financial statements included in Part I. Item 1 of this Quarterly Report on Form 10-Q.

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Results of Operations

Three and Nine Months Ended March 31, 2020 Compared to the Three and Nine Months Ended March 31, 2019

Segment Information

Operating segments are components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our chief executive officer.

Our operating segments are organized principally by the type of product or service offered and by geography. Similar operating segments have been aggregated into four reportable segments: Cloud Solutions, Banking Solutions, Payments and Documents and Other.

The following tables represent our segment revenues and our segment measure of profit (loss):

	Three Months Ended March 31,						Increase (Decrease) Between Periods					Nine Months Ended March 31,						Increase (Decrease) Between Periods
	2020			2019			$ Change Inc (Dec)			% Change Inc (Dec)		2020			2019			$ Change Inc (Dec)			% Change Inc (Dec)
	(Dollars in thousands)
Segment revenue:
Cloud Solutions	$	54,008		$	51,439		$	2,569		5.0	%	$	161,905		$	151,342		$	10,563		7.0	%
Banking Solutions	24,545			23,903			642			2.7	%	71,981			69,283			2,698			3.9	%
Payments and Documents	29,213			26,094			3,119			12.0	%	84,771			78,271			6,500			8.3	%
Other	3,949			5,002			(1,053		)	(21.1	)%	12,925			14,825			(1,900		)	(12.8	)%
Total segment revenue	$	111,715		$	106,438		$	5,277		5.0	%	$	331,582		$	313,721		$	17,861		5.7	%
Segment measure of profit (loss):
Cloud Solutions	$	9,614		$	11,463		$	(1,849	)	(16.1	)%	$	32,598		$	32,497		$	101		0.3	%
Banking Solutions	1,585			2,082			(497		)	(23.9	)%	1,744			6,097			(4,353		)	(71.4	)%
Payments and Documents	8,213			6,933			1,280			18.5	%	24,853			22,799			2,054			9.0	%
Other	(3,397		)	(1,545		)	(1,852		)	(119.9	)%	(7,459		)	(3,019		)	(4,440		)	(147.1	)%
Total measure of segment profit	$	16,015		$	18,933		$	(2,918	)	(15.4	)%	$	51,736		$	58,374		$	(6,638	)	(11.4	)%

A reconciliation of the measure of total segment profit to GAAP loss before income taxes is as follows:

	Three Months Ended March 31,						Nine Months Ended March 31,
	2020			2019			2020			2019
	(in thousands)
Total measure of segment profit	$	16,015		$	18,933		$	51,736		$	58,374
Less:
Amortization of acquisition-related intangible assets	(5,121		)	(5,230		)	(15,284		)	(15,809		)
Stock-based compensation plan expense	(9,289		)	(10,015		)	(31,298		)	(31,906		)
Acquisition and integration-related expenses	(986		)	(1,373		)	(4,640		)	(2,966		)
Restructuring expense	(730		)	(1,332		)	(939		)	(1,963		)
Other non-core benefit	—			—			10			—
Global ERP system implementation and other costs	(61		)	(557		)	(485		)	(3,110		)
Other expense, net of pension adjustments	(1,237		)	(853		)	(3,044		)	(2,849		)
Loss before income taxes	$	(1,409	)	$	(427	)	$	(3,944	)	$	(229	)

Cloud Solutions

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Revenues from our Cloud Solutions segment increased $2.6 million for the three months ended March 31, 2020 as compared to the same period in the prior fiscal year, due to increased revenue of $2.6 million from our legal spend management solutions. Segment profit decreased $1.8 million for the three months ended March 31, 2020 as compared to the same period in the prior fiscal year as the revenue increases described above were offset by increased operating expenses of $2.7 million related primarily to increased sales and marketing expenses and increased cost of revenues of $1.7 million.

Revenues from our Cloud Solutions segment increased $10.6 million for the nine months ended March 31, 2020 as compared to the same period in the prior fiscal year, due to increased revenue of $7.0 million from our legal spend management solutions and $3.5 million from our settlement network solutions. Segment profit increased $0.1 million for the nine months ended March 31, 2020 as compared to the same period in the prior fiscal year, due primarily to the revenue increase described above, partially offset by increased operating expenses of $6.8 million related primarily to increased sales and marketing costs and increased cost of revenues of $3.7 million.

Banking Solutions

Revenues from our Banking Solutions segment increased $0.6 million for the three months ended March 31, 2020 as compared to the same period in the prior fiscal year, due to increased subscriptions revenue of $3.2 million, partially offset by decreased service and maintenance revenue of $2.0 million and decreased software license revenue of $0.5 million. The decrease in software license revenue was by design and driven by the evolution of our business strategy, which is focused on a subscription revenue model rather than one-time license events. The increase in subscriptions revenue was primarily related to customers going live on our hosted solutions. Segment profit decreased $0.5 million for the three months ended March 31, 2020 as compared to the same period in the prior fiscal year, primarily due to increased cost of revenue and increased operating expenses associated with product development and general and administrative expenses of $0.5 million and $0.3 million, respectively, partially offset the revenue increases described above.

Revenues from our Banking Solutions segment increased $2.7 million for the nine months ended March 31, 2020 as compared to the same period in the prior fiscal year, due to increased subscriptions revenue of $8.3 million, partially offset by decreased software license revenue of $3.4 million and decreased service and maintenance revenue of $2.0 million as we continued to emphasize sales of our hosted solutions. The increase in subscriptions revenue was primarily related to customers going live on our hosted solutions. Segment profit decreased $4.4 million for the nine months ended March 31, 2020 as compared to the same period in the prior fiscal year, due to increased operating expenses and cost of revenues of $5.8 million and $1.3 million, respectively, partially offset by the revenue increases described above. The operating expense increases were primarily associated with increased sales and marketing and product development costs of $3.0 million and $2.2 million, respectively.

Payments and Documents

Revenues from our Payments and Documents segment increased $3.1 million for the three months ended March 31, 2020 as compared to the same period in the prior fiscal year, due primarily to increased subscriptions revenue of $4.2 million from our payments and documents solutions, partially offset by decreased service and maintenance revenue of $0.7 million. The decrease in service and maintenance revenue was driven by the continued focus of converting our customers to our hosted and subscription based solutions rather than deployed, perpetual license solutions. Segment profit increased $1.3 million for the three months ended March 31, 2020 as compared to the same period in the prior fiscal year, due to the revenue increase described above, partially offset by increased operating expenses of $1.4 million primarily related to increased sales and marketing costs.

Revenues from our Payments and Documents segment increased $6.5 million for the nine months ended March 31, 2020 as compared to the same period in the prior fiscal year, due primarily to increased subscriptions revenue of $10.2 million from our payments and documents solutions, partially offset by decreased software license revenue of $1.9 million and decreased service and maintenance revenue of $1.6 million. The decrease in service and maintenance revenue was driven by the continued focus of converting our customers to our hosted and subscription based solutions rather than deployed, perpetual license solutions. Segment profit increased $2.1 million for the nine months ended March 31, 2020 as compared to the same period in the prior fiscal year, due primarily to the revenue increase described above, partially offset by increased costs of revenue of $1.4 million and increased operating expenses of $3.0 million primarily related to increased sales and marketing costs.

Other

Revenues from our Other segment decreased for the three and nine months ended March 31, 2020 as compared to the same periods in the prior fiscal year. Segment profit decreased $1.9 million and $4.4 million for the three and nine months ended March 31, 2020, respectively, as compared to the same periods in the prior fiscal year primarily due to decreased software license and service and maintenance revenue, increased service and maintenance cost of revenue and increased product development employee related costs.

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Revenues by category

	Three Months Ended March 31,						Increase (Decrease) Between Periods					Nine Months Ended March 31,						Increase (Decrease) Between Periods
	2020			2019			$ Change Inc (Dec)			% Change Inc (Dec)		2020			2019			$ Change Inc (Dec)			% Change Inc (Dec)
	(Dollars in thousands)
Revenues:
Subscriptions	$	87,531		$	75,502		$	12,029		15.9	%	$	251,682		$	216,558		$	35,124		16.2	%
Software licenses	1,546			3,802			(2,256		)	(59.3	)%	6,922			13,979			(7,057		)	(50.5	)%
Service and maintenance	21,732			25,856			(4,124		)	(15.9	)%	70,618			80,047			(9,429		)	(11.8	)%
Other	906			1,278			(372		)	(29.1	)%	2,360			3,137			(777		)	(24.8	)%
Total revenues	$	111,715		$	106,438		$	5,277		5.0	%	$	331,582		$	313,721		$	17,861		5.7	%
As % of total revenues:
Subscriptions	78.4		%	70.9		%						75.9		%	69.0		%
Software licenses	1.4		%	3.6		%						2.1		%	4.5		%
Service and maintenance	19.5		%	24.3		%						21.3		%	25.5		%
Other	0.7		%	1.2		%						0.7		%	1.0		%
Total revenues	100.0		%	100.0		%						100.0		%	100.0		%

Subscriptions

Revenues from subscriptions increased $12.0 million for the three months ended March 31, 2020 as compared to the same period in the prior fiscal year. The overall revenue increase was driven by increases in subscriptions revenue from our Cloud Solutions, Payments and Documents and Banking Solutions segments of $4.6 million, $4.2 million and $3.2 million, respectively, due to the impact of customers going live on our hosted solutions and the continued impact of customers converting to subscription based solutions.

Revenues from subscriptions increased $35.1 million for the nine months ended March 31, 2020 as compared to the same period in the prior fiscal year. The overall revenue increase was driven by increases in subscriptions revenue from our Cloud Solutions, Payments and Documents and Banking Solutions segments of $15.9 million, $10.2 million and $8.3 million, respectively, due to the impact of customers going live on our hosted platforms and the impact of customers converting to subscription based solutions.

Software Licenses

Revenues from software licenses decreased $2.3 million for the three months ended March 31, 2020 as compared to the same period in the prior fiscal year. The overall revenue decrease was due principally to decreases in software revenue from our Payments and Documents segment of $1.1 million, Banking Solutions segment of $0.5 million and Other segment of $0.4 million. The decrease in software license revenue was predominantly by design and driven by the evolution of our business strategy, which is focused on a subscription revenue model rather than one-time license events.

Revenues from software licenses decreased $7.1 million for the nine months ended March 31, 2020 as compared to the same period in the prior fiscal year. The overall revenue decrease was due to decreases in revenue from our Banking Solutions segment of $3.4 million, Payments and Documents segment of $1.9 million, Other segment of $1.1 million and Cloud Solutions segment of $0.7 million. The decrease in software license revenue was predominantly by design and driven by the evolution of our business strategy, which is focused on a subscription revenue model rather than one-time license events.

Service and Maintenance

Revenues from service and maintenance decreased $4.1 million for the three months ended March 31, 2020 as compared to the same period in the prior fiscal year. The overall revenue decrease was due principally to decreases in revenue from our Banking Solutions segment of $2.0 million and Cloud Solutions segment of $1.8 million, in each case reflecting our continued emphasis on hosted and subscription based solutions rather than deployed, perpetual-license solutions.

Revenues from service and maintenance decreased $9.4 million for the nine months ended March 31, 2020 as compared to the same period in the prior fiscal year. The overall revenue decrease was due to decreases in revenue from our Cloud Solutions segment of $4.7 million, Banking Solutions segment of $2.1 million, Payments and Documents segment of $1.6 million and Other segment of $1.0 million, in each case reflecting the continued conversion of customers to our hosted and subscription based solutions rather than deployed, perpetual-license solutions.

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Other

Our other revenues consist principally of equipment and supplies sales, which remained minor components of our overall revenue.

Cost of revenues by category

	Three Months Ended March 31,						Increase (Decrease) Between Periods					Nine Months Ended March 31,						Increase (Decrease) Between Periods
	2020			2019			$ Change Inc (Dec)			% Change Inc (Dec)		2020			2019			$ Change Inc (Dec)			% Change Inc (Dec)
	(Dollars in thousands)
Cost of revenues:
Subscriptions	$	34,670		$	31,623		$	3,047		9.6	%	$	100,884		$	94,644		$	6,240		6.6	%
Software licenses	82			226			(144		)	(63.7	)%	400			667			(267		)	(40.0	)%
Service and maintenance	12,534			12,818			(284		)	(2.2	)%	38,516			38,052			464			1.2	%
Other	643			1,046			(403		)	(38.5	)%	1,663			2,461			(798		)	(32.4	)%
Total cost of revenues	$	47,929		$	45,713		$	2,216		4.8	%	$	141,463		$	135,824		$	5,639		4.2	%
Gross Profit ($)	$	63,786		$	60,725		$	3,061		5.0	%	$	190,119		$	177,897		$	12,222		6.9	%
Gross Profit (%)	57.1		%	57.1		%						57.3		%	56.7		%

Subscriptions

Subscriptions costs include salaries and other related costs for our professional services teams as well as costs related to our hosting infrastructure such as depreciation and facilities related expenses. Subscriptions costs decreased to 40% of subscriptions revenues in the three months ended March 31, 2020 as compared to 42% of subscriptions revenues in the three months ended March 31, 2019 due to the continued revenue expansion from our hosted solutions.

Subscriptions costs decreased to 40% of subscriptions revenues in the nine months ended March 31, 2020 as compared to 44% of subscriptions revenues in the nine months ended March 31, 2019 due to the continued revenue expansion from our hosted solutions.

Software Licenses

Software license costs consist of expenses incurred by us to distribute our software products and related documentation and costs of licensing third party software that is incorporated into or sold with certain of our products. Software license costs as a percentage of software license revenues remained relatively consistent in the three and nine months ended March 31, 2020 as compared to the three and nine months ended March 31, 2019.

Service and Maintenance

Service and maintenance costs include salaries and other related costs for our customer service, maintenance and help desk support staffs, as well as third party contractor expenses used to complement our professional services team. Service and maintenance costs increased to 58% of service and maintenance revenues in the three months ended March 31, 2020 as compared to 50% of service and maintenance revenues in the three months ended March 31, 2019 due primarily to the overall revenue decreases discussed above, offset by a slight decrease in cost of revenue.

Service and maintenance costs increased to 55% of service and maintenance revenues in the nine months ended March 31, 2020 as compared to 48% of service and maintenance revenues in the nine months ended March 31, 2019 due primarily to the overall revenue decreases discussed above and a slight increase in cost of revenue.

Other

Other costs include the costs associated with equipment and supplies that we resell, as well as freight, shipping and postage costs associated with the delivery of our products. These remain minor components of our business.

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Operating Expenses

	Three Months Ended March 31,						Increase (Decrease) Between Periods					Nine Months Ended March 31,						Increase (Decrease) Between Periods
	2020			2019			$ Change Inc (Dec)			% Change Inc (Dec)		2020			2019			$ Change Inc (Dec)			% Change Inc (Dec)
	(Dollars in thousands)
Operating expenses:
Sales and marketing	$	27,370		$	25,165		$	2,205		8.8	%	$	80,046		$	70,772		$	9,274		13.1	%
Product development and engineering	18,000			16,887			1,113			6.6	%	54,628			50,267			4,361			8.7	%
General and administrative	13,734			13,175			559			4.2	%	41,840			38,944			2,896			7.4	%
Amortization of acquisition-related intangible assets	5,121			5,230			(109		)	(2.1	)%	15,284			15,809			(525		)	(3.3	)%
Total operating expenses	$	64,225		$	60,457		$	3,768		6.2	%	$	191,798		$	175,792		$	16,006		9.1	%
As % of total revenues:
Sales and marketing	24.5		%	23.6		%						24.1		%	22.6		%
Product development and engineering	16.1		%	15.9		%						16.5		%	16.0		%
General and administrative	12.3		%	12.4		%						12.6		%	12.4		%
Amortization of acquisition-related intangible assets	4.6		%	4.9		%						4.6		%	5.0		%
Total operating expenses	57.5		%	56.8		%						57.8		%	56.0		%

Sales and Marketing

Sales and marketing expenses consist primarily of salaries and other related costs for sales and marketing personnel, sales commissions, travel, public relations and marketing materials and trade show participation. Sales and marketing expenses increased in the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 due to an increase in employee related costs of $1.6 million, increased marketing related costs of $0.3 million and increased professional services costs of $0.1 million.

Sales and marketing expenses increased in the nine months ended March 31, 2020 as compared to the nine months ended March 31, 2019 due to an increase in employee related costs of $6.1 million. increased marketing related costs of $1.4 million, increased acquisition related costs of $0.2 million and increased professional services costs of $0.2 million.

Product Development and Engineering

Product development and engineering expenses consist primarily of personnel costs to support product development, which consists of enhancements and revisions to our products as well as initiatives related to new product development. Product development and engineering expenses increased in the three and nine months ended March 31, 2020 as compared to the three and nine months ended March 31, 2019 due to an increase in headcount related costs of $0.9 million and $3.6 million in the three and nine months ended March 31, 2020, respectively, as we continued to invest in the development of innovative, feature-rich products.

General and Administrative

General and administrative expenses consist primarily of salaries and other related costs for operations and finance employees and legal and accounting services. General and administrative expenses increased in the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 due primarily to an increase in employee related costs of $1.1 million, partially offset by a decrease in acquisition and integration related expenses of $0.4 million.

General and administrative expenses increased in the nine months ended March 31, 2020 as compared to the nine months ended March 31, 2019 due primarily to an increase in headcount related costs of $3.1 million and an increase in acquisition and integration related expenses of $2.4 million, partially offset by a decrease in global ERP implementation and other costs of $2.6 million.

30

Amortization of Acquisition-related Intangible Assets

We amortize our acquired intangible assets in proportion to the estimated rate at which the asset provides economic benefit to us. Accordingly, amortization expense rates are often higher in the earlier periods of an asset’s estimated life. The decrease in amortization expense in the three and nine months ended March 31, 2020 as compared to the three and nine months ended March 31, 2019 occurred as a result of the impact of amortization rates decreasing over the underlying asset lives. We expect that total amortization expense for acquired intangible assets for the remainder of fiscal year 2020 will be approximately $5.1 million.

 Other Expense, Net

	Three Months Ended March 31,						Increase (Decrease) Between Periods					Nine Months Ended March 31,						Increase (Decrease) Between Periods
	2020			2019			$ Change Inc (Dec)			% Change Inc (Dec)		2020			2019			$ Change Inc (Dec)			% Change Inc (Dec)
	(Dollars in thousands)
Interest income	$	142		$	174		$	(32	)	(18.4	)%	$	533		$	452		$	81		17.9	%
Interest expense	(833		)	(903		)	70			7.8	%	(2,310		)	(2,958		)	648			21.9	%
Other (expense) income, net	(279		)	34			(313		)	(920.6	)%	(488		)	172			(660		)	(383.7	)%
Other expense, net	$	(970	)	$	(695	)	$	(275	)	(39.6	)%	$	(2,265	)	$	(2,334	)	$	69		3.0	%

The components of other expense, net are as depicted above and remain minimal overall components of our operations.

Provision for Income Taxes

We recorded income tax expense of $6.1 million and an income tax benefit of $1.3 million for the three months ended March 31, 2020 and 2019, respectively. We recorded income tax expense of $2.3 million and an income tax benefit of $6.1 million for the nine months ended March 31, 2020 and 2019, respectively. Please refer to Note 8 Income Taxes to our unaudited consolidated financial statements included in Part I. Item 1 of this Quarterly Report on Form 10-Q for further discussion.

Liquidity and Capital Resources

We are party to a credit agreement with Bank of America, N.A. and certain other lenders that provides for a credit facility in the amount of up to $300 million (the Credit Facility). We have the right to request an increase to the aggregate commitments to the Credit Facility of up to an additional $150 million, subject to specified conditions. The Credit Facility expires in July 2023. At March 31, 2020, borrowings were $180 million and we were in compliance with all covenants.

We have financed our operations primarily from cash provided by operating activities, the sale of our common stock and debt proceeds. We have historically generated positive operating cash flows. We believe that the cash generated from our operations and the cash and cash equivalents we have on hand will be sufficient to meet our operating requirements for the foreseeable future. If our existing cash resources along with cash generated from operations is insufficient to satisfy our operating requirements, we may need to sell additional equity or debt securities or seek other financing arrangements.

One of our financial goals is to maintain and improve our capital structure. The key metrics we focus on in assessing the strength of our liquidity and a summary of our cash activity for the nine months ended March 31, 2020 and 2019 are summarized in the tables below:

	March 31,		June 30,
	2020		2019
	(in thousands)
Cash and cash equivalents	$	173,063	$	92,164
Marketable securities	9,224		7,541
Borrowings under credit facility	180,000		110,000

31

	Nine Months Ended March 31,
	2020			2019
	(in thousands)
Cash provided by operating activities	$	70,129		$	63,015
Cash used in investing activities	(41,233		)	(65,124		)
Cash provided by (used in) financing activities	54,623			(37,297		)
Effect of exchange rates on cash	(1,667		)	(1,427		)

 Cash, cash equivalents and marketable securities. At March 31, 2020, our cash and cash equivalents of $173.1 million consisted primarily of cash deposits held at major banks and money market funds. The $80.9 million increase in cash and cash equivalents at March 31, 2020 from June 30, 2019 was primarily due to cash generated from operations of $70.1 million, net borrowings from our revolving credit facility of $70.0 million, and proceeds from sales of available for sale securities of $9.9 million. These cash inflows were partially offset by cash used to repurchase shares of our common stock of $19.1 million, cash used to fund capital expenditures, including capitalization of software costs of $39.5 million and purchases of available for sale securities of $11.5 million. We borrowed $80 million under our credit facility in March 2020 as a purely proactive and protective measure given the overall macroeconomic challenges of COVID-19.

Cash, cash equivalents and marketable securities included approximately $64.1 million held by our foreign subsidiaries as of March 31, 2020. We continue to permanently reinvest the earnings, if any, of our international subsidiaries other than the UK, Switzerland and India and therefore we do not provide for U.S. income taxes that could result from the distribution of foreign earnings from our international subsidiaries other than the UK, Switzerland and India. If our reinvestment plans change based on future events and we decide to repatriate amounts from other international subsidiaries to fund our domestic operations, those amounts would generally become subject to state tax in the U.S. to the extent there were cumulative profits in the foreign subsidiary from which the distribution to the U.S. was made.

Cash and cash equivalents held by our foreign subsidiaries are denominated in currencies other than U.S. Dollars. Decreases primarily in the foreign currency exchange rate of the British Pound Sterling to the U.S. Dollar decreased our overall cash balances by approximately $1.7 million for the nine months ended March 31, 2020. Further changes in the foreign currency exchange rates of the British Pound Sterling and other currencies could have a significant effect on our overall cash balances, however, we continue to believe that our existing cash balances, even in light of the foreign currency volatility we frequently experience, are adequate to meet our operating requirements for the foreseeable future.

Operating Activities. Operating cash flow is derived by adjusting our net income or loss for non-cash operating items, such as depreciation and amortization, stock-based compensation plan expense, deferred income tax benefits or expenses and changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in our results of operations. Cash generated from operations increased by $7.1 million in the nine months ended March 31, 2020 as compared to the same period in the prior fiscal year. The increase was primarily related to an increase in cash flows from prepaid expenses and other current assets of $3.4 million, deferred revenue and accounts receivable of $1.7 million and $1.5 million, respectively.

At March 31, 2020, a substantial portion of our deferred tax assets have been reserved since, given the available evidence, it was deemed more likely than not that these deferred tax assets would not be realized.

Investing Activities. Investing cash flows consist primarily of capital expenditures, inclusive of capitalized software costs, investment purchases and sales and cash used for the acquisition of businesses and assets. The $23.9 million decrease in net cash used in investing activities for the nine months ended March 31, 2020 as compared to the same period in the prior fiscal year was primarily due to the absence of cash used to fund business acquisitions, net of cash acquired, of $21.4 million and a decrease in capital expenditures of $6.2 million, partially offset by an increase in the purchase of available for sale securities of $3.9 million.

Financing Activities. Financing cash flows consist primarily of cash inflows as a result of borrowings under our revolving credit facility and proceeds from the sale of shares of common stock through employee equity incentive plans, offset by repurchases of our common stock.

Contractual Obligations

For the three and nine months ended March 31, 2020, there have been no material changes to the contractual obligations disclosed in Item 7 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2019.

Our estimate of unrecognized tax benefits for which cash settlement may be required is $2.1 million. As of March 31, 2020, we are unable to estimate the timing of future cash outflows, if any, associated with these liabilities as we do not currently anticipate settling any of these tax positions with cash payment in the foreseeable future.

32

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements during the three months ended March 31, 2020.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to a variety of risks, including interest rate changes, foreign currency exchange rate fluctuations, and derivative instruments classification. We have not entered into any foreign currency hedging transactions or other instruments to minimize our exposure to foreign currency exchange rate fluctuations nor do we presently plan to in the future.

We are a party to interest rate swap agreements which we designated as hedge instruments to minimize our exposure to interest rate fluctuations under our Credit Facility.

There has been no material change to our exposure to market risk from that which was disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019 as filed with the SEC on August 29, 2019, which is incorporated herein by reference.

Item 4. Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2020. The term disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on the evaluation of our disclosure controls and procedures as of March 31, 2020, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

No changes in our internal control over financial reporting occurred during the fiscal quarter ended March 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

33

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are, from time to time, a party to legal proceedings and claims that arise in the ordinary course of our business. We do not believe that there are claims or proceedings pending against us for which the ultimate resolution would have a material effect on, or require further disclosure in, our financial statements.

Item 1A. Risk Factors

Investing in our common stock involves a high degree of risk. You should carefully consider the risk factors identified in Part I. Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019 before making an investment decision involving our common stock. These risk factors could materially affect our business, financial condition or results of operations and could cause our actual business and financial results to differ materially from those contained in forward-looking statements made in this Quarterly Report on Form 10-Q or elsewhere by management from time to time. The COVID-19 pandemic has created additional risks to those we normally face in operating our business, including those discussed in our 2019 Form 10-K, and the risk factor disclosure in our 2019 Form 10-K is qualified by the information relating to COVID-19 that is described in this Quarterly Report on Form 10-Q, including in the additional risk factor below. These risks and uncertainties are not the only ones facing us. Additional risks and uncertainties may also impact our business operations. Except for the following additional risk factors, there have been no material changes to the risk factors disclosed in Part I. Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019.

Our business, results of operations and financial condition may be materially adversely impacted by the outbreak of COVID-19

In March 2020, the World Health Organization declared the COVID-19 outbreak a global pandemic. The ultimate impact of the COVID-19 pandemic on market and economic conditions is highly uncertain and may adversely impact our business, consolidated results of operations, cash flows and our financial condition. We are unable to predict the full impact that COVID-19 will ultimately have on our business due to numerous uncertainties, including the severity of the disease itself, the duration of the outbreak and any future recurrence of outbreak, actions that may be taken by governmental authorities, the impact to the businesses of our customers, the demand for our products and our ability to sell and provide new goods and services, including as a result of travel restrictions, employees working from home and other factors. Our customers may also slow-down decision making in respect of new purchases, delay work that had previously been scheduled or seek price concessions or modified payment terms in responses to strains on their own businesses.

COVID-19 may prevent us from conducting business activities at full capacity for an indefinite period of time, either due to the spread of the disease or due to shutdowns that are requested or mandated by governmental authorities. For example, we have taken proactive measures intended to help minimize the risk of the virus to our employees including suspending travel worldwide for our employees, temporarily closing our offices and requiring all employees to work remotely. An extended period of remote work could strain our business and adversely impact our operating results.

Deteriorating economic conditions such as increased unemployment, a decline in business and consumer confidence and spending or a recession could adversely impact the demand for our products and cause a decline in our revenues. Any material adverse change to our business results would increase the risk of impairment to our goodwill and other intangible assets and any such impairment charge would likely be material.

Even after the immediate COVID-19 pandemic has subsided, we may continue to be exposed to materially adverse risks to our business as a result of the breadth of its economic impact, including how quickly and to what extent normal economic and operating conditions resume.

The withdrawal of the United Kingdom (UK) from the European Union (EU) (referred to as Brexit), could create disruption and uncertainty to our business, including our relationships with our existing and future customers, suppliers and employees, which could have an adverse effect on our business, financial results and operations

In January 2020, the UK and EU entered into a withdrawal agreement pursuant to which the UK formally withdrew from the EU on January 31, 2020. Following such withdrawal, the UK entered into a transition period scheduled to end on December 31, 2020. During the transition period, the UK will remain subject to EU law and maintain access to the EU single market and to the global trade deals negotiated by the EU on behalf of its members. There remains substantial uncertainty surrounding the ultimate impact of Brexit and any associated transition period.

The ultimate effects of Brexit will depend on any agreements the UK makes to retain access to EU markets, either during any transition period or more permanently. These outcomes could disrupt the markets we serve and the tax jurisdictions in which we operate and create uncertainty and challenges (particularly in the near term) with respect to trading relationships between our UK subsidiary and other EU nations. Remaining EU member countries may also seek to make it more difficult for us to trade effectively or competitively in those regions. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and

34

regulations, including with respect to employment law or data privacy, as the UK determines which EU laws to replace or replicate, which could create additional uncertainty and challenges for us.  

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about purchases by us of our common stock during the quarter ended March 31, 2020:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
January 1, 2020 - January 31, 2020	—	$	—	—	$	35,000,000
February 1, 2020 - February 29, 2020	73,128	47.86		73,128	31,500,000
March 1, 2020 - March 31, 2020	16,600	38.55		16,600	30,860,000
Total	89,728	$	46.14	89,728

——————

⁽¹⁾  On August 5, 2019, we announced that our board of directors authorized a repurchase program of our common stock for an aggregate repurchase price not to exceed $50 million. This program expires on August 5, 2021.

Item 6. Exhibits

		Incorporated by Reference
Exhibit Number	Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
31.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer					X
31.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer					X
32.1	Section 1350 Certification of Principal Executive Officer					X
32.2	Section 1350 Certification of Principal Financial Officer					X
101.INS	Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH**	Inline XBRL Taxonomy Extension Schema Document					X
101.CAL**	Inline XBRL Taxonomy Calculation Linkbase Document					X
101.DEF**	Inline XBRL Taxonomy Definition Linkbase Document					X
101.LAB**	Inline XBRL Taxonomy Label Linkbase Document					X
101.PRE**	Inline XBRL Taxonomy Presentation Linkbase Document					X
104	Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

** submitted electronically herewith

Attached as Exhibit 101 to this report are the following formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Unaudited Condensed Consolidated Balance Sheets as of March 31, 2020 and June 30, 2019, (ii) Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended March 31, 2020 and 2019, (iii) Unaudited Consolidated Statements of Stockholders' Equity for the three and nine months ended March 31, 2020 and 2019, (iv) Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2020 and 2019 and (v) Notes to Unaudited Condensed Consolidated Financial Statements.

35

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Bottomline Technologies (de), Inc.                     

Date:	May 11, 2020	By:	/s/ RICHARD D. BOOTH
			Richard D. Booth
			Chief Financial Officer and Treasurer
			(Principal Financial and Accounting Officer)

36

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Robert A. Eberle, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Bottomline Technologies (de), Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 11, 2020	By:	/s/ ROBERT A. EBERLE
			Robert A. Eberle
			President and Chief Executive Officer
			(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Richard D. Booth, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Bottomline Technologies (de), Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 11, 2020	By:	/s/ RICHARD D. BOOTH
			Richard D. Booth
			Chief Financial Officer and Treasurer
			(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Bottomline Technologies (de), Inc. (the “Company”) for the period ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Robert A. Eberle, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 11, 2020	By:	/s/ ROBERT A. EBERLE
			Robert A. Eberle
			President and Chief Executive Officer
			(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Bottomline Technologies (de), Inc. (the “Company”) for the period ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Richard D. Booth, Chief Financial Officer and Treasurer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 11, 2020	By:	/s/ RICHARD D. BOOTH
			Richard D. Booth
			Chief Financial Officer and Treasurer
			(Principal Financial and Accounting Officer)

XML

Label	Element	Value
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 37,000
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	26,263,000
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	26,263,000
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 37,000

XML

Commitments and Contingencies - Supplemental Cash Flows (Details) $ in Thousands	9 Months Ended
	Mar. 31, 2020 USD ($)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$ 5,685
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$ 2,332

XML

Goodwill and Other Intangible Assets - Schedule of Rollforward of Goodwill Balances, by Reportable Segment (Detail) $ in Thousands	9 Months Ended
	Mar. 31, 2020 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 206,101
Measurement period adjustment (2)	65
Impact of foreign currency translation	(960)
Ending balance	205,206
Goodwill accumulated impairment loss	7,500
Cloud Solutions
Goodwill [Roll Forward]
Beginning balance	90,307
Measurement period adjustment (2)	0
Impact of foreign currency translation	296
Ending balance	90,603
Banking Solutions
Goodwill [Roll Forward]
Beginning balance	39,451
Measurement period adjustment (2)	65
Impact of foreign currency translation	0
Ending balance	39,516
Payments and Documents
Goodwill [Roll Forward]
Beginning balance	68,149
Measurement period adjustment (2)	0
Impact of foreign currency translation	(1,256)
Ending balance	66,893
Other
Goodwill [Roll Forward]
Beginning balance	8,194
Measurement period adjustment (2)	0
Impact of foreign currency translation	0
Ending balance	$ 8,194

XML

Derivative Instruments - Summary of Fair Values of the Interest Rate Swap (Detail) - Interest Rate Swap - USD ($) $ in Thousands	Mar. 31, 2020	Jun. 30, 2019
Prepaid expenses and other current assets
Derivatives, Fair Value [Line Items]
Short-term derivative liability	$ 1,404	$ 37
Other liabilities
Derivatives, Fair Value [Line Items]
Long-term derivative liability	$ 3,471	$ 1,248

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Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Accumulated Deficit
Beginning balance (in shares) at Jun. 30, 2018		44,834			5,806
Beginning balance at Jun. 30, 2018	$ 310,932	$ 45	$ 678,549	$ (30,633)	$ (129,914)	$ (207,115)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for employee stock purchase plan and upon exercise of stock options (in shares)		40			(126)
Issuance of common stock for employee stock purchase plan and upon exercise of stock options	3,856	$ 1	1,036		$ 2,819
Vesting of restricted stock awards (in shares)		920
Vesting of restricted stock awards	0
Stock compensation plan expense	31,978		31,978
Warrant settlements (in shares)		932
Warrant settlements	(4)	$ 1	(5)
Minimum pension liability adjustments, net of tax	(38)			(38)
Net income	5,875					5,875
Unrealized gain on available for sale securities	11			11
Change in fair value on interest rate hedging instruments	(1,952)			(1,952)
Foreign currency translation adjustments	(2,588)			(2,588)
Ending balance (in shares) at Mar. 31, 2019		46,726			5,680
Ending balance at Mar. 31, 2019	374,333	$ 47	711,558	(35,200)	$ (127,095)	(174,977)
Beginning balance (in shares) at Dec. 31, 2018		46,468			5,730
Beginning balance at Dec. 31, 2018	360,845	$ 46	700,520	(35,704)	$ (128,216)	(175,801)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for employee stock purchase plan and upon exercise of stock options (in shares)		21			(50)
Issuance of common stock for employee stock purchase plan and upon exercise of stock options	2,118	$ 1	996		$ 1,121
Vesting of restricted stock awards (in shares)		237
Vesting of restricted stock awards	0
Stock compensation plan expense	10,042		10,042
Minimum pension liability adjustments, net of tax	18			18
Net income	824					824
Unrealized gain on available for sale securities	5			5
Change in fair value on interest rate hedging instruments	(841)			(841)
Foreign currency translation adjustments	1,322			1,322
Ending balance (in shares) at Mar. 31, 2019		46,726			5,680
Ending balance at Mar. 31, 2019	374,333	$ 47	711,558	(35,200)	$ (127,095)	(174,977)
Beginning balance (in shares) at Jun. 30, 2019		46,995			5,680
Beginning balance at Jun. 30, 2019	379,377	$ 47	721,438	(43,593)	$ (127,095)	(171,420)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for employee stock purchase plan and upon exercise of stock options (in shares)		13			(123)
Issuance of common stock for employee stock purchase plan and upon exercise of stock options	4,133		1,226		$ 2,907
Vesting of restricted stock awards (in shares)		881
Vesting of restricted stock awards	1	$ 1
Repurchase of common stock to be held in treasury (in shares)					418
Repurchase of common stock to be held in treasury	(19,145)				$ (19,145)
Stock compensation plan expense	31,476		31,476
Minimum pension liability adjustments, net of tax	13			13
Net income	(6,226)					(6,226)
Unrealized gain on available for sale securities	67			67
Change in fair value on interest rate hedging instruments	(3,590)			(3,590)
Foreign currency translation adjustments	(3,248)			(3,248)
Ending balance (in shares) at Mar. 31, 2020		47,889			5,975
Ending balance at Mar. 31, 2020	382,895	$ 48	754,140	(50,351)	$ (143,333)	(177,609)
Beginning balance (in shares) at Dec. 31, 2019		47,645			5,948
Beginning balance at Dec. 31, 2019	395,934	$ 48	744,359	(37,631)	$ (140,701)	(170,141)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for employee stock purchase plan and upon exercise of stock options (in shares)					(63)
Issuance of common stock for employee stock purchase plan and upon exercise of stock options	1,958		450		$ 1,508
Vesting of restricted stock awards (in shares)		244
Vesting of restricted stock awards	0	$ 0
Repurchase of common stock to be held in treasury (in shares)					90
Repurchase of common stock to be held in treasury	(4,140)				$ (4,140)
Stock compensation plan expense	9,331		9,331
Minimum pension liability adjustments, net of tax	5			5
Net income	(7,468)					(7,468)
Unrealized gain on available for sale securities	70			70
Change in fair value on interest rate hedging instruments	(3,482)			(3,482)
Foreign currency translation adjustments	(9,313)			(9,313)
Ending balance (in shares) at Mar. 31, 2020		47,889			5,975
Ending balance at Mar. 31, 2020	$ 382,895	$ 48	$ 754,140	$ (50,351)	$ (143,333)	$ (177,609)

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Cover Page - shares	9 Months Ended
	Mar. 31, 2020	Apr. 30, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	0-25259
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Entity Registrant Name	BOTTOMLINE TECHNOLOGIES INC /DE/
Entity Central Index Key	0001073349
Current Fiscal Year End Date	--06-30
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	02-0433294
Entity Address, Address Line One	325 Corporate Drive
Entity Address, City or Town	Portsmouth,
Entity Address, State or Province	NH
Entity Address, Postal Zip Code	03801-6808
City Area Code	603
Local Phone Number	436-0700
Title of 12(b) Security	Common Stock, $.001 par value per share
Trading Symbol	EPAY
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		43,924,419

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Revenue Recognition

9 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Remaining Performance Obligations

The transaction price we allocate to remaining performance obligations that are unsatisfied, or partially unsatisfied, as of March 31, 2020 represents contracted revenue that will be recognized in future periods. Our future performance obligations consist primarily of SaaS hosting/subscription obligations relating to future periods, contracted but uncompleted professional services obligations and support and maintenance obligations. During the three and nine months ended March 31, 2020 and 2019, the amount of revenue recognized from performance obligations satisfied in prior periods was not significant.

Revenue allocated to remaining performance obligations was $424.6 million as of March 31, 2020 of which we expect to recognize approximately $163.9 million over the next twelve months and the remainder thereafter. We exclude from our measure of remaining performance obligations amounts related to future transactional or usage-based fees for which the value of services transferred to the customer will correspond to the amount we will invoice for those services.

Contract Assets and Liabilities

The table below presents our accounts receivable, contract assets and deferred revenue balances as of March 31, 2020 and June 30, 2019.

	March 31,		June 30,
	2020		2019		$ Change
	(in thousands)
Accounts receivable	$	78,271	$	77,285	$	986
Contract assets	3,195		5,135		(1,940		)
Deferred revenue	100,715		92,159		8,556

Accounts receivable include amounts related to our contractual right to consideration for both completed and partially completed performance obligations, including amounts that may not have been invoiced, and is net of allowances for doubtful accounts. Contract assets arise when we recognize revenue in excess of amounts billed to the customer and the right to payment is contingent on conditions other than simply the passage of time, such as the future completion of a related performance obligation. Contract assets are classified in our consolidated balance sheets as other current assets for those contract assets with recognition periods of one year or less and other assets for contract assets with recognition periods greater than one year. Deferred revenue consists of billings or customer payments in excess of amounts recognized as revenue.

The increase in deferred revenue at March 31, 2020 as compared to June 30, 2019 reflects the impact on deferred revenue of our recognition of revenue from maintenance contracts, a significant portion of which are billed on a calendar year basis, as well as the impact of foreign exchange changes.

For the three and nine months ended March 31, 2020, we recognized $11.8 million and $74.1 million, respectively, in revenue from amounts that were included in deferred revenue as of June 30, 2019. For the three and nine months ended March 31, 2019, we recognized $14.6 million and $66.4 million, respectively, in revenue from amounts that were included in deferred revenue as of July 1, 2018.

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Indebtedness

9 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Indebtedness

Indebtedness

Credit Agreement

We are party to a credit agreement (the Credit Agreement) that provides for a revolving credit facility in the amount of up to $300 million (the Credit Facility) and that expires in July 2023. We have the right to request an increase of the aggregate commitments under the Credit Facility by up to an additional $150 million, subject to specified conditions. At March 31, 2020, we owed $180 million under the Credit Facility.

The Credit Agreement contains customary representations, warranties and covenants, including, but not limited to, material adverse events, specified restrictions on indebtedness, liens, investments, acquisitions, sales of assets, dividends and other restricted payments, and transactions with affiliates. We are required to comply with (a) a maximum consolidated net leverage ratio of 3.75 to 1.00, stepping down to 3.50 to 1.00 for the quarter ending June 30, 2020; and (b) a minimum consolidated interest coverage ratio of 3.00 to 1.00. The Credit Agreement also contains customary events of default and related cure provisions. As of March 31, 2020, we were in compliance with all covenants.

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Operations by Segments and Geographic Areas

9 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Operations by Segments and Geographic Areas

Operations by Segments and Geographic Areas

Segment Information

Operating segments are the components of our business for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our chief executive officer. Our operating segments are generally organized by the type of product or service offered and by geography.

Similar operating segments have been aggregated into four reportable segments as follows:

Cloud Solutions. Our Cloud Solutions segment provides customers with SaaS technology offerings that facilitate electronic payment, electronic invoicing, and spend management. Our legal spend management solutions, which enable customers to create more efficient processes for managing invoices generated by outside law firms while offering insight into important legal spend factors such as expense monitoring and outside counsel performance, are included within this segment. This segment also incorporates our settlement network solutions (financial messaging and Paymode-X). Our settlement network solutions are highly scalable, secure and cost effective and facilitate cash payment and transaction settlement between businesses, their vendors and banks. Revenue within this segment is generally recognized on a subscription or transaction basis or ratably over the contract term.

Banking Solutions. Our Banking Solutions segment provides solutions that are specifically designed for banking and financial institution customers. Our Banking Solutions products are sold predominantly on a hosted basis, with revenue recorded over time.

Payments and Documents. Our Payments and Documents segment supplies financial business process management software solutions, including making and collecting payments, sending and receiving invoices, and generating and storing business documents. This segment also provides a range of standard professional services and equipment and supplies that complement and enhance our core software products. When licensed for on-premise deployment, software license revenue is typically recorded upon delivery of the software and commencement of the license term. In hosted arrangements, we typically record revenue over time. Professional services revenue is normally recorded as we perform the work and software support and maintenance revenue is recorded ratably over the support period.

Other. Our Other segment consists of our healthcare and cyber fraud and risk management solutions. The cyber fraud and risk management results reported in this segment reflect the operations of the legacy sales and product development channel we acquired, however these solutions are sold as part of all of our operating segments. Our cyber fraud and risk management solutions non-invasively monitor, replay and analyze user behavior to flag and even stop suspicious activity in real time. Our healthcare solutions for patient registration, electronic signature, mobile document and payments allow healthcare organizations to improve business efficiencies, reduce costs and improve care quality. Software revenue for perpetual licenses of our cyber fraud and risk management and healthcare products is typically recorded upon delivery of the software and commencement of the license term. Professional

services revenue is recorded as we perform the work and software support and maintenance revenue is recorded ratably over the support period which is normally twelve months.

Periodically a sales person in one operating segment will sell products and services that are typically sold within a different operating segment. In such cases, the transaction is generally recorded by the operating segment to which the sales person is assigned. Accordingly, segment results can include the results of transactions that have been allocated to a specific segment based on the contributing sales resources, rather than the nature of the product or service. Conversely, a transaction can be recorded by the operating segment primarily responsible for delivery to the customer, even if the sales person is assigned to a different operating segment.

Our chief operating decision maker assesses segment performance based on a variety of factors that normally include segment revenue and a segment measure of profit or loss. Each segment’s measure of profit or loss is on a pre-tax basis and excludes certain items as presented in our reconciliation of the measure of total segment profit to GAAP income (loss) before income taxes that follows. There are no inter-segment sales; accordingly, the measure of segment revenue and profit or loss reflects only revenues from external customers. The costs of certain corporate level expenses, primarily general and administrative expenses, are allocated to our operating segments based on a percentage of the segment’s revenues.

We do not track or assign our assets by operating segment.

Segment information for the three and nine months ended March 31, 2020 and 2019 according to the segment descriptions above, is as follows:

	Three Months Ended March 31,						Nine Months Ended March 31,
	2020			2019			2020			2019
	(in thousands)
Segment revenue:
Cloud Solutions	$	54,008		$	51,439		$	161,905		$	151,342
Banking Solutions	24,545			23,903			71,981			69,283
Payments and Documents	29,213			26,094			84,771			78,271
Other	3,949			5,002			12,925			14,825
Total segment revenue	$	111,715		$	106,438		$	331,582		$	313,721
Segment measure of profit:
Cloud Solutions	$	9,614		$	11,463		$	32,598		$	32,497
Banking Solutions	1,585			2,082			1,744			6,097
Payments and Documents	8,213			6,933			24,853			22,799
Other	(3,397		)	(1,545		)	(7,459		)	(3,019		)
Total measure of segment profit	$	16,015		$	18,933		$	51,736		$	58,374

A reconciliation of the measure of total segment profit to GAAP loss before income taxes is as follows:

	Three Months Ended March 31,						Nine Months Ended March 31,
	2020			2019			2020			2019
	(in thousands)
Total measure of segment profit	$	16,015		$	18,933		$	51,736		$	58,374
Less:
Amortization of acquisition-related intangible assets	(5,121		)	(5,230		)	(15,284		)	(15,809		)
Stock-based compensation plan expense	(9,289		)	(10,015		)	(31,298		)	(31,906		)
Acquisition and integration-related expenses	(986		)	(1,373		)	(4,640		)	(2,966		)
Restructuring expense	(730		)	(1,332		)	(939		)	(1,963		)
Other non-core benefit	—			—			10			—
Global ERP system implementation and other costs	(61		)	(557		)	(485		)	(3,110		)
Other expense, net of pension adjustments	(1,237		)	(853		)	(3,044		)	(2,849		)
Loss before income taxes	$	(1,409	)	$	(427	)	$	(3,944	)	$	(229	)

The following depreciation and other amortization expense amounts are included in the measure of segment profit:

	Three Months Ended March 31,				Nine Months Ended March 31,
	2020		2019		2020		2019
	(in thousands)
Depreciation and other amortization expense:
Cloud Solutions	$	3,540	$	2,854	$	10,121	$	8,663
Banking Solutions	2,480		1,919		6,777		5,634
Payments and Documents	887		719		2,272		2,202
Other	248		84		637		268
Total depreciation and other amortization expense	$	7,155	$	5,576	$	19,807	$	16,767

Disaggregation of Revenue

The tables below present our subscriptions revenue and total revenue disaggregated by major product classification for the three and nine months ended March 31, 2020 and 2019.

(in thousands)	Three Months Ended March 31, 2020
	2020				2019
	Subscriptions Revenue		Total Revenue		Subscriptions Revenue		Total Revenue
Payment Settlement Solutions (1)	$	37,831	$	42,084	$	33,058	$	38,572
Banking Solutions	20,984		24,545		17,819		23,903
Legal Spend Management	21,521		21,521		18,916		18,916
All other (2)	7,195		23,565		5,709		25,047
Total revenues	$	87,531	$	111,715	$	75,502	$	106,438

(in thousands)	Nine Months Ended March 31,
	2020				2019
	Subscriptions Revenue		Total Revenue		Subscriptions Revenue		Total Revenue
Payment Settlement Solutions (1)	$	110,201	$	124,584	$	95,272	$	114,101
Banking Solutions	57,664		71,981		49,410		69,283
Legal Spend Management	63,508		63,508		56,461		56,461
All other (2)	20,309		71,509		15,415		73,876
Total revenues	$	251,682	$	331,582	$	216,558	$	313,721

We derive the majority of our revenue from subscription arrangements. The substantial majority of our non-subscription revenue is derived from software support and maintenance fees and from professional services, with such revenue being recorded by all of our operating segments, but with the largest concentration of this revenue being derived from our legacy business payments and documents products in our Payments and Documents segment.

⁽¹⁾ Consists of our cloud-based business payments settlement network Paymode-X, our financial messaging settlement network (each of which are components of our Cloud Solutions segment) and our PTX payment solution (which is a component of our Payments and Documents segment).

⁽²⁾ Consists of our legacy business payments and documents products (which are components of our Payments and Documents segment) and revenue from our Other segment.

Geographic Information

We have presented geographic information about our revenues below. This presentation allocates revenue based on the point of sale, not the location of the customer. Accordingly, we derive revenues from geographic locations based on the location of the customer that would vary from the geographic areas listed here.

	Three Months Ended March 31,				Nine Months Ended March 31,
	2020		2019		2020		2019
	(in thousands)
Revenues from unaffiliated customers:
United States	$	69,164	$	66,227	$	207,566	$	194,132
United Kingdom	27,928		24,942		80,002		73,313
Switzerland	9,694		9,682		29,213		29,289
Other	4,929		5,587		14,801		16,987
Total revenues from unaffiliated customers	$	111,715	$	106,438	$	331,582	$	313,721

Long-lived assets based on geographical location, excluding deferred tax assets and intangible assets, were as follows:

	At March 31,		At June 30,
	2020		2019
	(in thousands)
Long-lived assets:
United States	$	62,823	$	44,357
United Kingdom	44,542		32,035
Other	15,189		5,326
Total long-lived assets	$	122,554	$	81,718

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Business and Asset Acquisitions - Fiscal Year 2019 Acquisition - Additional Information (Detail) $ in Thousands, £ in Millions	1 Months Ended			9 Months Ended
	Jun. 30, 2019 USD ($) shares	Mar. 31, 2019 USD ($)	Mar. 31, 2019 GBP (£)	Mar. 31, 2020 USD ($)	Mar. 31, 2019 USD ($)
Business Acquisition [Line Items]
Cash paid for acquisition				$ 39,516	$ 45,725
Goodwill	$ 206,101			205,206
BankSight Software Systems, Inc.
Business Acquisition [Line Items]
Cash paid for acquisition	$ 2,800
Number of shares issued | shares	40,000
Noncontrolling interest, amount represented by preferred stock	$ 3,500
Payments to acquire business	$ 6,300
Goodwill				3,600
Intangible assets acquired, other than goodwill				$ 3,100
Property, plant and equipment, useful life				11 years
Experian Ltd
Business Acquisition [Line Items]
Cash paid for acquisition		$ 12,600	£ 9.5
Goodwill		1,700			1,700
Intangible assets acquired, other than goodwill		$ 12,800			$ 12,800
Property, plant and equipment, useful life		11 years	11 years

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Revenue Recognition - Remaining Performance Obligation (Details) $ in Millions	Mar. 31, 2020 USD ($)
Revenue from Contract with Customer [Abstract]
Remaining performance obligation, amount	$ 424.6
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01
Revenue from Contract with Customer [Abstract]
Remaining performance obligation, amount	$ 163.9
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligation period of satisfaction	1 year

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Fair Value - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 31, 2020	Jun. 30, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Certain other investments accounted for at cost	$ 900	$ 700
Borrowings under credit facility	180,000	110,000
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Borrowings under credit facility	180,000
Israeli Severance Arrangements
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value of assets related to deposits	$ 1,000	$ 1,200

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets Subject to Amortization and for Intangible Assets Not Subject to Amortization

The following tables set forth the information for intangible assets subject to amortization and for intangible assets not subject to amortization.

	As of March 31, 2020
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Weighted Average Remaining Life
	(in thousands)							(in years)
Amortized intangible assets:
Customer related	$	218,650	$	(153,476	)	$	65,174	7.7
Core technology	133,038		(95,444		)	37,594		7.0
Other intangible assets	22,025		(19,656		)	2,369		4.6
Capitalized software development costs	25,410		(12,960		)	12,450		2.3
Software (1)	80,609		(42,865		)	37,744		3.8
Total	$	479,732	$	(324,401	)	$	155,331
Unamortized intangible assets:
Goodwill						205,206
Total intangible assets						$	360,537

	As of June 30, 2019
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Weighted Average Remaining Life
	(in thousands)							(in years)
Amortized intangible assets:
Customer related	$	219,893	$	(145,144	)	$	74,749	8.5
Core technology	130,226		(90,017		)	40,209		7.4
Other intangible assets	25,712		(19,030		)	6,682		5.0
Capitalized software development costs	23,213		(10,006		)	13,207		3.0
Software (1)	72,018		(38,516		)	33,502		4.2
Total	$	471,062	$	(302,713	)	$	168,349
Unamortized intangible assets:
Goodwill						206,101
Total intangible assets						$	374,450

——————

⁽¹⁾ 

Software includes purchased software and software developed for internal use.

Schedule of Estimated Amortization Expense

Estimated amortization expense for the remainder of fiscal year 2020 and subsequent fiscal years for acquired intangible assets, capitalized software development costs and software, in each case that have been placed in service as of March 31, 2020, is as follows:

	Acquired Intangible Assets		Capitalized Software Development Costs		Software
	(in thousands)
Remaining 2020	$	5,078	$	1,021	$	3,059
2021	18,937		4,083		9,312
2022	16,848		4,083		7,432
2023	15,473		1,239		5,533
2024	13,707		537		4,018
2025 and thereafter	35,094		50		2,291

Schedule of Rollforward of Goodwill Balances, by Reportable Segment

The following table represents a rollforward of our goodwill balances, by reportable segment:

	Cloud Solutions		Banking Solutions		Payments and Documents			Other		Total
	(in thousands)
Balance at June 30, 2019 (1)	$	90,307	$	39,451	$	68,149		$	8,194	$	206,101
Measurement period adjustment (2)	—		65		—			—		65
Impact of foreign currency translation	296		—		(1,256		)	—		(960		)
Balance at March 31, 2020 (1)	$	90,603	$	39,516	$	66,893		$	8,194	$	205,206

——————

⁽¹⁾  Other goodwill balance is net of $7.5 million accumulated impairment losses, recorded previously.

⁽²⁾ 

The measurement period adjustment relates to our BankSight acquisition. See Note 5 Business and Asset Acquisitions.

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Revenue Recognition (Tables)

9 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Summary of Contract Assets and Liabilities

The table below presents our accounts receivable, contract assets and deferred revenue balances as of March 31, 2020 and June 30, 2019.

	March 31,		June 30,
	2020		2019		$ Change
	(in thousands)
Accounts receivable	$	78,271	$	77,285	$	986
Contract assets	3,195		5,135		(1,940		)
Deferred revenue	100,715		92,159		8,556

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Recent Accounting Pronouncements Additional Information (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Jul. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating right-of-use assets	$ 23,953
Operating lease liabilities	$ 26,771
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating right-of-use assets		$ 26,700
Operating lease liabilities		$ 29,000

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Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 31, 2020	Jun. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 205,206	$ 206,101

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Operations by Segments and Geographic Areas - Additional Information (Detail)	9 Months Ended
	Mar. 31, 2020 Segment
Segment Reporting [Abstract]
Number of reportable segments	4

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Operations by Segments and Geographic Areas - Schedule of Disaggregated Revenue by Major Prodct Classification (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue [Line Items]
Total revenues	$ 111,715	$ 106,438	$ 331,582	$ 313,721
Operating Segments
Disaggregation of Revenue [Line Items]
Total revenues	111,715	106,438	331,582	313,721
Subscriptions
Disaggregation of Revenue [Line Items]
Total revenues	87,531	75,502	251,682	216,558
Payment Settlement Solutions | Operating Segments
Disaggregation of Revenue [Line Items]
Total revenues	42,084	38,572	124,584	114,101
Payment Settlement Solutions | Subscriptions | Operating Segments
Disaggregation of Revenue [Line Items]
Total revenues	37,831	33,058	110,201	95,272
Banking Solutions | Operating Segments
Disaggregation of Revenue [Line Items]
Total revenues	24,545	23,903	71,981	69,283
Banking Solutions | Subscriptions | Operating Segments
Disaggregation of Revenue [Line Items]
Total revenues	20,984	17,819	57,664	49,410
Legal Spend Management | Operating Segments
Disaggregation of Revenue [Line Items]
Total revenues	21,521	18,916	63,508	56,461
Legal Spend Management | Subscriptions | Operating Segments
Disaggregation of Revenue [Line Items]
Total revenues	21,521	18,916	63,508	56,461
Other
Disaggregation of Revenue [Line Items]
Total revenues	23,565	25,047	71,509	73,876
Other | Subscriptions
Disaggregation of Revenue [Line Items]
Total revenues	$ 7,195	$ 5,709	$ 20,309	$ 15,415

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Postretirement and Other Employee Benefits (Tables)

9 Months Ended

Mar. 31, 2020

Retirement Benefits [Abstract]

Components of Net Periodic Pension Costs for the Swiss Pension Plan

Net periodic pension costs for the Swiss pension plan included the following components:

	Three Months Ended March 31,						Nine Months Ended March 31,
	2020			2019			2020			2019
	(in thousands)
Components of net periodic cost
Service cost	$	749		$	625		$	2,202		$	1,900
Interest cost	57			113			169			343
Prior service credit	(79		)	(76		)	(233		)	(231		)
Net actuarial loss	122			54			359			164
Expected return on plan assets	(317		)	(342		)	(933		)	(1,040		)
Net periodic cost	$	532		$	374		$	1,564		$	1,136

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Operations by Segments and Geographic Areas (Tables)

9 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

Segment information for the three and nine months ended March 31, 2020 and 2019 according to the segment descriptions above, is as follows:

	Three Months Ended March 31,						Nine Months Ended March 31,
	2020			2019			2020			2019
	(in thousands)
Segment revenue:
Cloud Solutions	$	54,008		$	51,439		$	161,905		$	151,342
Banking Solutions	24,545			23,903			71,981			69,283
Payments and Documents	29,213			26,094			84,771			78,271
Other	3,949			5,002			12,925			14,825
Total segment revenue	$	111,715		$	106,438		$	331,582		$	313,721
Segment measure of profit:
Cloud Solutions	$	9,614		$	11,463		$	32,598		$	32,497
Banking Solutions	1,585			2,082			1,744			6,097
Payments and Documents	8,213			6,933			24,853			22,799
Other	(3,397		)	(1,545		)	(7,459		)	(3,019		)
Total measure of segment profit	$	16,015		$	18,933		$	51,736		$	58,374

Reconciliation of Measure of Total Segment Profit to GAAP Income (Loss) Before Income Taxes

A reconciliation of the measure of total segment profit to GAAP loss before income taxes is as follows:

	Three Months Ended March 31,						Nine Months Ended March 31,
	2020			2019			2020			2019
	(in thousands)
Total measure of segment profit	$	16,015		$	18,933		$	51,736		$	58,374
Less:
Amortization of acquisition-related intangible assets	(5,121		)	(5,230		)	(15,284		)	(15,809		)
Stock-based compensation plan expense	(9,289		)	(10,015		)	(31,298		)	(31,906		)
Acquisition and integration-related expenses	(986		)	(1,373		)	(4,640		)	(2,966		)
Restructuring expense	(730		)	(1,332		)	(939		)	(1,963		)
Other non-core benefit	—			—			10			—
Global ERP system implementation and other costs	(61		)	(557		)	(485		)	(3,110		)
Other expense, net of pension adjustments	(1,237		)	(853		)	(3,044		)	(2,849		)
Loss before income taxes	$	(1,409	)	$	(427	)	$	(3,944	)	$	(229	)

Schedule of Segment Depreciation and Amortization Expense Included in Measure of Segment Profit

The following depreciation and other amortization expense amounts are included in the measure of segment profit:

	Three Months Ended March 31,				Nine Months Ended March 31,
	2020		2019		2020		2019
	(in thousands)
Depreciation and other amortization expense:
Cloud Solutions	$	3,540	$	2,854	$	10,121	$	8,663
Banking Solutions	2,480		1,919		6,777		5,634
Payments and Documents	887		719		2,272		2,202
Other	248		84		637		268
Total depreciation and other amortization expense	$	7,155	$	5,576	$	19,807	$	16,767

Summary of Revenue Disaggregated by Major Product Category and the Related Financial Statement Classification of Revenue

The tables below present our subscriptions revenue and total revenue disaggregated by major product classification for the three and nine months ended March 31, 2020 and 2019.

(in thousands)	Three Months Ended March 31, 2020
	2020				2019
	Subscriptions Revenue		Total Revenue		Subscriptions Revenue		Total Revenue
Payment Settlement Solutions (1)	$	37,831	$	42,084	$	33,058	$	38,572
Banking Solutions	20,984		24,545		17,819		23,903
Legal Spend Management	21,521		21,521		18,916		18,916
All other (2)	7,195		23,565		5,709		25,047
Total revenues	$	87,531	$	111,715	$	75,502	$	106,438

(in thousands)	Nine Months Ended March 31,
	2020				2019
	Subscriptions Revenue		Total Revenue		Subscriptions Revenue		Total Revenue
Payment Settlement Solutions (1)	$	110,201	$	124,584	$	95,272	$	114,101
Banking Solutions	57,664		71,981		49,410		69,283
Legal Spend Management	63,508		63,508		56,461		56,461
All other (2)	20,309		71,509		15,415		73,876
Total revenues	$	251,682	$	331,582	$	216,558	$	313,721

We derive the majority of our revenue from subscription arrangements. The substantial majority of our non-subscription revenue is derived from software support and maintenance fees and from professional services, with such revenue being recorded by all of our operating segments, but with the largest concentration of this revenue being derived from our legacy business payments and documents products in our Payments and Documents segment.

⁽¹⁾ Consists of our cloud-based business payments settlement network Paymode-X, our financial messaging settlement network (each of which are components of our Cloud Solutions segment) and our PTX payment solution (which is a component of our Payments and Documents segment).

⁽²⁾ Consists of our legacy business payments and documents products (which are components of our Payments and Documents segment) and revenue from our Other segment.

Schedule of Revenue Based on Point of Sale

We have presented geographic information about our revenues below. This presentation allocates revenue based on the point of sale, not the location of the customer. Accordingly, we derive revenues from geographic locations based on the location of the customer that would vary from the geographic areas listed here.

	Three Months Ended March 31,				Nine Months Ended March 31,
	2020		2019		2020		2019
	(in thousands)
Revenues from unaffiliated customers:
United States	$	69,164	$	66,227	$	207,566	$	194,132
United Kingdom	27,928		24,942		80,002		73,313
Switzerland	9,694		9,682		29,213		29,289
Other	4,929		5,587		14,801		16,987
Total revenues from unaffiliated customers	$	111,715	$	106,438	$	331,582	$	313,721

Schedule of Long-Lived Assets, Based on Geographical Location, Excluding Deferred Tax Assets and Intangible Assets

Long-lived assets based on geographical location, excluding deferred tax assets and intangible assets, were as follows:

	At March 31,		At June 30,
	2020		2019
	(in thousands)
Long-lived assets:
United States	$	62,823	$	44,357
United Kingdom	44,542		32,035
Other	15,189		5,326
Total long-lived assets	$	122,554	$	81,718

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Recent Accounting Pronouncements (Policies)

9 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Recently Adopted Pronouncements and Accounting Pronouncements to be Adopted

Recently Adopted Pronouncements

Leases: In February 2016, the Financial Accounting Standards Board (FASB) issued an accounting standard update which requires balance sheet recognition of a lease liability and a corresponding right-of-use (ROU) asset for all leases unless, as a policy election, a lessee elects not to apply the standard to short-term leases. The pattern of recognition of lease related revenue and expenses are dependent on its classification. We adopted the standard on July 1, 2019 and elected the package of practical expedients which permitted us not to reassess prior conclusions regarding lease identification, lease classification and treatment of initial direct costs. For all asset classes, we adopted the lessee practical expedient to combine lease and non-lease components and made a policy election not to recognize a ROU asset or lease liability for leases with a term of less than twelve months. We also availed ourselves of the adoption expedient not to adjust our comparative period financial statements for the effects of the new standard or make additional disclosures for periods prior to the adoption date.

Upon adoption, we recognized operating ROU assets and operating lease liabilities of $26.7 million and $29.0 million, respectively, in our consolidated balance sheet. The difference between the ROU assets and lease liabilities is primarily related to the reclassification of deferred rent on our balance sheet at the date of adoption. The adoption of this standard did not have a material impact on our consolidated statements of comprehensive income (loss) or consolidated statements of cash flows.

Please refer to Note 10 Commitments and Contingencies for discussion of the adoption of this new standard.

Accounting Pronouncements to be Adopted

Financial Instruments - Credit Losses: In June 2016, the FASB issued an accounting standard update that replaces the incurred loss impairment model with an expected loss model for financial assets held at amortized cost, eliminates the concept of other-than-temporary impairment and requires credit losses associated with available-for-sale debt securities to be recorded through an allowance rather than a reduction in the amortized cost basis of the security. The changes are expected to result in earlier recognition of credit losses associated with financial assets. The estimate of expected credit losses will require entities to incorporate historical information, current information and reasonable and supportable forecasts. This standard also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. We will adopt this standard on July 1, 2020, on a modified retrospective basis, with the cumulative-effect recorded as an adjustment to the opening balance of accumulated deficit as of the effective date. We are currently evaluating the anticipated impact of this standard on our financial statements and do not currently expect the adoption of this standard to have a material impact on our financial statements.

Goodwill Impairment: In January 2017, the FASB issued an accounting standard update to simplify the test for goodwill impairment which removes the requirement to compare the carrying value of goodwill against its implied fair value. Under the revised standard, an entity will perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss should not exceed the total amount of goodwill allocated to the reporting unit. We will adopt this standard on July 1, 2020 on a prospective basis and do not currently expect the adoption of this standard to have a material impact on our financial statements.

Income Taxes: In December 2019, the FASB issued an accounting standard update related to simplifying the accounting for income taxes by eliminating certain exceptions related to intraperiod tax allocations, basis differences for changes in ownership interest in equity method investments, and the calculation of interim period income tax. The standard also simplifies other aspects of accounting for taxes. The standard is effective for us on July 1, 2021, with early adoption permitted. We are currently in the process of evaluating the effects of this update on our financial statements, including potential early adoption.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

We have certain financial instruments which consist of cash and cash equivalents, cash and cash equivalents held for customers, marketable securities, accounts receivable, accounts payable, customer account liabilities, derivative interest rate swaps, assets related to deposits made to fund future requirements associated with Israeli severance arrangements and debt drawn on our Credit Facility (see Note 11 Indebtedness). Fair value information for each of these instruments is as follows:

• Cash and cash equivalents, cash and cash equivalents held for customers, accounts receivable, accounts payable and customer account liabilities fair values approximates their carrying values, due to the short-term nature of these instruments.

• Marketable securities classified as held to maturity, all of which mature within one year, are recorded at amortized cost, which at March 31, 2020 and June 30, 2019, approximated fair value.

• Marketable debt securities classified as available for sale are recorded at fair value. Unrealized gains and losses are included as a component of other accumulated comprehensive income (loss) in stockholders’ equity, net of tax. We use the specific identification method to determine any realized gains or losses from the sale of our marketable debt securities classified as available for sale.

• The fair value of our derivative interest rate swaps are based on the present value of projected cash flows that will occur over the life of the instruments, after considering certain contractual terms and counterparty credit risk.

• The carrying value of assets related to deposits we have made to fund future requirements associated with Israeli severance arrangements was $1.0 million and $1.2 million at March 31, 2020 and June 30, 2019, respectively, which approximated their fair value.

• We have certain other investments for which there is no readily determinable fair value. The carrying value of these investments was $0.9 million and $0.7 million at March 31, 2020 and June 30, 2019, respectively, and they are reported as a component of our other assets. These investments are recorded at cost, less impairment (if any), plus or minus adjustments for observable price changes.

•

We have borrowings of $180 million against our Credit Facility. The fair value of these borrowings, which are classified as Level 2, approximates their carrying value at March 31, 2020, as the instrument carries a variable rate of interest which reflects current market rates.

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Operations by Segments and Geographic Areas - Schedule of Segment Reporting Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Segment revenue:
Total segment revenue	$ 111,715	$ 106,438	$ 331,582	$ 313,721
Segment measure of profit:
Total measure of segment profit	(439)	268	(1,679)	2,105
Operating Segments
Segment revenue:
Total segment revenue	111,715	106,438	331,582	313,721
Segment measure of profit:
Total measure of segment profit	16,015	18,933	51,736	58,374
Cloud Solutions | Operating Segments
Segment revenue:
Total segment revenue	54,008	51,439	161,905	151,342
Segment measure of profit:
Total measure of segment profit	9,614	11,463	32,598	32,497
Banking Solutions | Operating Segments
Segment revenue:
Total segment revenue	24,545	23,903	71,981	69,283
Segment measure of profit:
Total measure of segment profit	1,585	2,082	1,744	6,097
Payments and Documents | Operating Segments
Segment revenue:
Total segment revenue	29,213	26,094	84,771	78,271
Segment measure of profit:
Total measure of segment profit	8,213	6,933	24,853	22,799
Other | Operating Segments
Segment revenue:
Total segment revenue	3,949	5,002	12,925	14,825
Segment measure of profit:
Total measure of segment profit	$ (3,397)	$ (1,545)	$ (7,459)	$ (3,019)

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Operations by Segments and Geographic Areas - Schedule of Revenue Based on Point of Sale (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues from unaffiliated customers	$ 111,715	$ 106,438	$ 331,582	$ 313,721
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues from unaffiliated customers	69,164	66,227	207,566	194,132
United Kingdom
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues from unaffiliated customers	27,928	24,942	80,002	73,313
Switzerland
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues from unaffiliated customers	9,694	9,682	29,213	29,289
Other
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues from unaffiliated customers	$ 4,929	$ 5,587	$ 14,801	$ 16,987

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Goodwill and Other Intangible Assets - Schedule of Intangible Assets Subject to Amortization and for Intangible Assets Not Subject to Amortization (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Mar. 31, 2020	Jun. 30, 2019
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 479,732	$ 471,062
Accumulated Amortization	(324,401)	(302,713)
Net Carrying Value	155,331	168,349
Goodwill	205,206	206,101
Total intangible assets	360,537	374,450
Customer related
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	218,650	219,893
Accumulated Amortization	(153,476)	(145,144)
Net Carrying Value	$ 65,174	$ 74,749
Weighted Average Remaining Life	7 years 8 months 12 days	8 years 6 months
Core technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 133,038	$ 130,226
Accumulated Amortization	(95,444)	(90,017)
Net Carrying Value	$ 37,594	$ 40,209
Weighted Average Remaining Life	7 years	7 years 4 months 24 days
Other intangible assets
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 22,025	$ 25,712
Accumulated Amortization	(19,656)	(19,030)
Net Carrying Value	$ 2,369	$ 6,682
Weighted Average Remaining Life	4 years 7 months 6 days	5 years
Capitalized Software Development Costs
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 25,410	$ 23,213
Accumulated Amortization	(12,960)	(10,006)
Net Carrying Value	$ 12,450	$ 13,207
Weighted Average Remaining Life	2 years 3 months 18 days	3 years
Software
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 80,609	$ 72,018
Accumulated Amortization	(42,865)	(38,516)
Net Carrying Value	$ 37,744	$ 33,502
Weighted Average Remaining Life	3 years 9 months 18 days	4 years 2 months 12 days

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Derivative Instruments - Additional Information (Detail)			3 Months Ended
	Dec. 01, 2021 USD ($)	Dec. 01, 2017 USD ($)	Mar. 31, 2020 USD ($) agreement
Derivatives, Fair Value [Line Items]
Number of interest rate swap agreements | agreement			2
Amounts excluded from assessment of hedge effectiveness			$ 0
Reclassification of unrealized loss from accumulated other comprehensive income to earnings			$ 1,600,000
Interest Rate Swap
Derivatives, Fair Value [Line Items]
Notional debt value		$ 100,000,000
Agreement effective date		Dec. 01, 2017
Agreement maturity date		Dec. 01, 2021
Fixed interest rate		1.9275%
Interest Rate Swap | Forecast
Derivatives, Fair Value [Line Items]
Notional debt value	$ 80,000,000
Agreement effective date	Dec. 01, 2021
Agreement maturity date	Jul. 16, 2023
Fixed interest rate	2.125%

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Commitments and Contingencies - Supplemental Balance Sheet (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Operating leases:
Right-of-use assets, net	$ 23,953
Operating lease liabilities, net	6,780
Operating lease liabilities, non-current	19,991
Total operating lease liabilities	$ 26,771

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Goodwill and Other Intangible Assets - Schedule of Estimated Amortization Expense (Detail) $ in Thousands	Mar. 31, 2020 USD ($)
Finite-Lived Intangible Assets [Line Items]
Remaining 2020	$ 5,078
2021	18,937
2022	16,848
2023	15,473
2024	13,707
2025 and thereafter	35,094
Capitalized Software Development Costs
Finite-Lived Intangible Assets [Line Items]
Remaining 2020	1,021
2021	4,083
2022	4,083
2023	1,239
2024	537
2025 and thereafter	50
Software
Finite-Lived Intangible Assets [Line Items]
Remaining 2020	3,059
2021	9,312
2022	7,432
2023	5,533
2024	4,018
2025 and thereafter	$ 2,291

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Recent Accounting Pronouncements

9 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Recently Adopted Pronouncements

Leases: In February 2016, the Financial Accounting Standards Board (FASB) issued an accounting standard update which requires balance sheet recognition of a lease liability and a corresponding right-of-use (ROU) asset for all leases unless, as a policy election, a lessee elects not to apply the standard to short-term leases. The pattern of recognition of lease related revenue and expenses are dependent on its classification. We adopted the standard on July 1, 2019 and elected the package of practical expedients which permitted us not to reassess prior conclusions regarding lease identification, lease classification and treatment of initial direct costs. For all asset classes, we adopted the lessee practical expedient to combine lease and non-lease components and made a policy election not to recognize a ROU asset or lease liability for leases with a term of less than twelve months. We also availed ourselves of the adoption expedient not to adjust our comparative period financial statements for the effects of the new standard or make additional disclosures for periods prior to the adoption date.

Upon adoption, we recognized operating ROU assets and operating lease liabilities of $26.7 million and $29.0 million, respectively, in our consolidated balance sheet. The difference between the ROU assets and lease liabilities is primarily related to the reclassification of deferred rent on our balance sheet at the date of adoption. The adoption of this standard did not have a material impact on our consolidated statements of comprehensive income (loss) or consolidated statements of cash flows.

Please refer to Note 10 Commitments and Contingencies for discussion of the adoption of this new standard.

Accounting Pronouncements to be Adopted

Financial Instruments - Credit Losses: In June 2016, the FASB issued an accounting standard update that replaces the incurred loss impairment model with an expected loss model for financial assets held at amortized cost, eliminates the concept of other-than-temporary impairment and requires credit losses associated with available-for-sale debt securities to be recorded through an allowance rather than a reduction in the amortized cost basis of the security. The changes are expected to result in earlier recognition of credit losses associated with financial assets. The estimate of expected credit losses will require entities to incorporate historical information, current information and reasonable and supportable forecasts. This standard also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. We will adopt this standard on July 1, 2020, on a modified retrospective basis, with the cumulative-effect recorded as an adjustment to the opening balance of accumulated deficit as of the effective date. We are currently evaluating the anticipated impact of this standard on our financial statements and do not currently expect the adoption of this standard to have a material impact on our financial statements.

Goodwill Impairment: In January 2017, the FASB issued an accounting standard update to simplify the test for goodwill impairment which removes the requirement to compare the carrying value of goodwill against its implied fair value. Under the revised standard, an entity will perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss should not exceed the total amount of goodwill allocated to the reporting unit. We will adopt this standard on July 1, 2020 on a prospective basis and do not currently expect the adoption of this standard to have a material impact on our financial statements.

Income Taxes: In December 2019, the FASB issued an accounting standard update related to simplifying the accounting for income taxes by eliminating certain exceptions related to intraperiod tax allocations, basis differences for changes in ownership interest in equity method investments, and the calculation of interim period income tax. The standard also simplifies other aspects of accounting for taxes. The standard is effective for us on July 1, 2021, with early adoption permitted. We are currently in the process of evaluating the effects of this update on our financial statements, including potential early adoption.

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Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Revenues:
Total revenues	$ 111,715	$ 106,438	$ 331,582	$ 313,721
Cost of revenues:
Total cost of revenues	47,929	45,713	141,463	135,824
Gross profit	63,786	60,725	190,119	177,897
Operating expenses:
Sales and marketing	27,370	25,165	80,046	70,772
Product development and engineering	18,000	16,887	54,628	50,267
General and administrative	13,734	13,175	41,840	38,944
Amortization of acquisition-related intangible assets	5,121	5,230	15,284	15,809
Total operating expenses	64,225	60,457	191,798	175,792
(Loss) income from operations	(439)	268	(1,679)	2,105
Other expense, net	(970)	(695)	(2,265)	(2,334)
Loss before income taxes	(1,409)	(427)	(3,944)	(229)
(Provision) benefit from income taxes	(6,059)	1,251	(2,282)	6,104
Net (loss) income	$ (7,468)	$ 824	$ (6,226)	$ 5,875
Net (loss) income per share:
Basic (in dollars per share)	$ (0.18)	$ 0.02	$ (0.15)	$ 0.15
Diluted (in dollars per share)	$ (0.18)	$ 0.02	$ (0.15)	$ 0.14
Shares used in computing net (loss) income per share:
Basic (in shares)	41,823	40,911	41,668	40,412
Diluted (in shares)	41,823	41,625	41,668	41,650
Other comprehensive (loss) income, net of tax:
Unrealized gain on available for sale securities	$ 70	$ 5	$ 67	$ 11
Change in fair value on interest rate hedging instruments	(3,482)	(841)	(3,590)	(1,952)
Minimum pension liability adjustments	5	18	13	(38)
Foreign currency translation adjustments	(9,313)	1,322	(3,248)	(2,588)
Other comprehensive (loss) income, net of tax:	(12,720)	504	(6,758)	(4,567)
Comprehensive (loss) income	(20,188)	1,328	(12,984)	1,308
Subscriptions
Revenues:
Total revenues	87,531	75,502	251,682	216,558
Cost of revenues:
Total cost of revenues	34,670	31,623	100,884	94,644
Software licenses
Revenues:
Total revenues	1,546	3,802	6,922	13,979
Cost of revenues:
Total cost of revenues	82	226	400	667
Service and maintenance
Revenues:
Total revenues	21,732	25,856	70,618	80,047
Cost of revenues:
Total cost of revenues	12,534	12,818	38,516	38,052
Other
Revenues:
Total revenues	906	1,278	2,360	3,137
Cost of revenues:
Total cost of revenues	$ 643	$ 1,046	$ 1,663	$ 2,461

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Commitments and Contingencies

9 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Leases

On July 1, 2019, we adopted the new accounting standard related to leases. We determine if any arrangement is, or contains, a lease at its inception based on whether or not we have the right to control the asset during the contract period. We are a lessee in any lease contract when we obtain the right to control the asset.

We determine the lease term by assuming the exercise of options that are reasonably certain. Leases with a lease term of 12 months or less at inception are not reflected in our balance sheet and those lease costs are expensed on a straight-line basis over the respective term. Leases with a term greater than 12 months are reflected as non-current ROU assets and current and non-current lease liabilities in our consolidated balance sheets. Current lease liabilities are classified as a component of accrued expenses and other current liabilities.

As the implicit interest rate in our leases is generally not known, we use our incremental borrowing rate as the discount rate for purposes of determining the present value of our lease liabilities. Our determination of the incremental borrowing rate takes into consideration the expected term of the lease, the effect of the currency in which the lease is denominated and the rate of interest we would expect to incur on a collateralized debt instrument. At March 31, 2020, our weighted average discount rate utilized for our leases was 5.0%.

When our contracts contain lease and non-lease elements, we account for both as a single lease component.

We lease office space in cities worldwide under facility leases that expire at various dates. We are typically required to pay certain incremental operating costs above the base rent for our facility leases. Our leases may include periodic payment adjustments based on changes in applicable price indexes. To the extent the adjustment is considered a fixed payment it is included in the measurement of the ROU asset and lease liability, otherwise it is recognized in the period incurred. We also have a variety of data center locations and, to a lesser extent, vehicle and equipment leases. Our facility leases represent the substantial majority of our operating leases and often include renewal options that we can exercise unilaterally. At March 31, 2020, renewal options ranged from 3 months to 10 years.

At March 31, 2020, our operating leases had a weighted average remaining lease term of 5.9 years and we had no material capital leases.

Additional information of our lease activity, as of and for the three and nine months ended March 31, 2020 is as follows:

Operating leases:	Three Months Ended March 31, 2020			Nine Months Ended March 31, 2020
	(in thousands)
Operating lease cost	$	1,913		$	5,711
Short-term lease cost	138			485
Variable lease cost	477			1,520
Sublease income	(17		)	(269		)
Total lease cost	$	2,511		$	7,447

	March 31, 2020
	(in thousands)
Right-of-use assets, net	$	23,953
Operating lease liabilities, current (1)	$	6,780
Operating lease liabilities, non-current	19,991
Total operating lease liabilities	$	26,771

——————

⁽¹⁾  Included as a component of accrued expenses and other current liabilities.

	Nine Months Ended March 31, 2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	5,685
Right-of-use assets obtained in exchange for lease obligations	$	2,332

Remaining maturities of lease liabilities at March 31, 2020 were as follows:

For the year ending June 30,	Operating Leases
	(in thousands)
2020	$	1,958
2021	7,774
2022	5,479
2023	3,711
2024	2,824
Thereafter	9,761
Total lease payments	31,507
Less imputed interest	(4,736		)
Total lease liabilities	$	26,771

As of March 31, 2020, we have additional operating leases that have not yet commenced of $2.7 million. These operating leases will commence by fiscal year 2021 and have lease terms of 3 years to 12 years.

Legal Matters

We are, from time to time, a party to legal proceedings and claims that arise out of the ordinary course of our business. We are not currently a party to any material legal proceedings.

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Net (Loss) Income Per Share

9 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Net (Loss) Income Per Share

Net (Loss) Income Per Share

The following table sets forth the computation of basic and diluted net (loss) income per share:

	Three Months Ended March 31,					Nine Months Ended March 31,
	2020			2019		2020			2019
	(in thousands, except per share amounts)
Numerator - basic and diluted:
Net (loss) income	$	(7,468	)	$	824	$	(6,226	)	$	5,875
Denominator:
Shares used in computing basic net (loss) income per share attributable to common stockholders	41,823			40,911		41,668			40,412
Impact of dilutive securities	—			714		—			1,238
Shares used in computing diluted net (loss) income per share attributable to common stockholders	41,823			41,625		41,668			41,650
Basic net (loss) income per share attributable to common stockholders	$	(0.18	)	$	0.02	$	(0.15	)	$	0.15
Diluted net (loss) income per share attributable to common stockholders	$	(0.18	)	$	0.02	$	(0.15	)	$	0.14

For the three and nine months ended March 31, 2020, approximately 2.2 million and 2.3 million, respectively, of shares of unvested restricted stock and shares underlying stock options were excluded from the calculation of diluted earnings per share as their effect on the calculation would have been anti-dilutive.

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Revenue Recognition - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Revenue from Contract with Customer [Abstract]
Deferred revenue	$ 11.8	$ 14.6	$ 74.1	$ 66.4

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Fair Value - Marketable Securities by Major Security Type (Detail) - USD ($) $ in Thousands	Mar. 31, 2020	Jun. 30, 2019
Marketable Securities [Line Items]
Held to Maturity	$ 54	$ 62
Available for Sale	9,170	7,479
Total	9,224	7,541
Government and other debt securities
Marketable Securities [Line Items]
Held to Maturity	54	62
Available for Sale	9,170	7,479
Total	$ 9,224	$ 7,541

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Net (Loss) Income Per Share - Schedule of Computation of Basic and Diluted Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Numerator - basic and diluted:
Net (loss) income	$ (7,468)	$ 824	$ (6,226)	$ 5,875
Denominator:
Shares used in computing basic net income per share attributable to common stockholders (in shares)	41,823	40,911	41,668	40,412
Impact of dilutive securities (in shares)	0	714	0	1,238
Shares used in computing diluted net income per share attributable to common stockholders (in shares)	41,823	41,625	41,668	41,650
Basic net income (loss) per share attributable to common stockholders (in dollars per share)	$ (0.18)	$ 0.02	$ (0.15)	$ 0.15
Diluted net income (loss) per share attributable to common stockholders (in dollars per share)	$ (0.18)	$ 0.02	$ (0.15)	$ 0.14
Antidilutive securities excluded from calculation of diluted earnings per share	2,200		2,300

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Commitments and Contingencies (Tables)

9 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Lease Expenses and Supplemental Cash Flow Information

Additional information of our lease activity, as of and for the three and nine months ended March 31, 2020 is as follows:

Operating leases:	Three Months Ended March 31, 2020			Nine Months Ended March 31, 2020
	(in thousands)
Operating lease cost	$	1,913		$	5,711
Short-term lease cost	138			485
Variable lease cost	477			1,520
Sublease income	(17		)	(269		)
Total lease cost	$	2,511		$	7,447

	March 31, 2020
	(in thousands)
Right-of-use assets, net	$	23,953
Operating lease liabilities, current (1)	$	6,780
Operating lease liabilities, non-current	19,991
Total operating lease liabilities	$	26,771

——————

⁽¹⁾  Included as a component of accrued expenses and other current liabilities.

	Nine Months Ended March 31, 2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	5,685
Right-of-use assets obtained in exchange for lease obligations	$	2,332

Schedule of Operating Lease Maturities

aturities of lease liabilities at March 31, 2020 were as follows:

For the year ending June 30,	Operating Leases
	(in thousands)
2020	$	1,958
2021	7,774
2022	5,479
2023	3,711
2024	2,824
Thereafter	9,761
Total lease payments	31,507
Less imputed interest	(4,736		)
Total lease liabilities	$	26,771

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Fair Value (Tables)

9 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

At March 31, 2020 and June 30, 2019, our assets and liabilities measured at fair value on a recurring basis were as follows:

	March 31, 2020								June 30, 2019
	Fair Value Measurements Using Input Types								Fair Value Measurements Using Input Types
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Money market funds (cash and cash equivalents)	$	1,319	$	—	$	—	$	1,319	$	2,807	$	—	$	—	$	2,807
Available for sale securities - Debt
Government - U.S. treasury securities	—		9,170		—		9,170		—		7,479		—		7,479
Total assets	$	1,319	$	9,170	$	—	$	10,489	$	2,807	$	7,479	$	—	$	10,286
Liabilities
Short-term derivative interest rate swap	$	—	$	1,404	$	—	$	1,404	$	—	$	37	$	—	$	37
Long-term derivative interest rate swap	$	—	$	3,471	$	—	$	3,471	$	—	$	1,248	$	—	$	1,248
Total liabilities	$	—	$	4,875	$	—	$	4,875	$	—	$	1,285	$	—	$	1,285

Schedule of Marketable Securities by Major Security Type

The table below presents information regarding our marketable securities by major security type as of March 31, 2020 and June 30, 2019.

	March 31, 2020						June 30, 2019
	Held to Maturity		Available for Sale		Total		Held to Maturity		Available for Sale		Total
	(in thousands)
Marketable securities:
Government and other debt securities	$	54	$	9,170	$	9,224	$	62	$	7,479	$	7,541
Total marketable securities	$	54	$	9,170	$	9,224	$	62	$	7,479	$	7,541

Summary of Estimated Fair Value of Our Investments in Available for Sale Marketable Securities Classified

The following table summarizes the estimated fair value of our investments in available for sale marketable securities classified by the contractual maturity date of the securities:

	March 31, 2020
	(in thousands)
Due within 1 year	$	9,170
Due in 1 year through 5 years	—
Total	$	9,170

Summary of Gross Unrealized Losses and Fair Values of Available for Sale Investments

The following table presents the aggregate fair values and gross unrealized losses for those available for sale investments that were in an unrealized loss position as of March 31, 2020 and June 30, 2019, respectively, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:

	At March 31, 2020				At June 30, 2019
	Less than 12 Months
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(in thousands)
Government - U.S. treasury securities	$	—	$	—	$	800	$	(1	)
Total	$	—	$	—	$	800	$	(1	)

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Derivative Instruments - Summary of Effect of Derivative Interest Rate Swap and Related Tax Effects in AOCI (Detail) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)	$ (3,595)	$ (1,671)
Amount of (Gain) Loss Reclassified from AOCI into Net Loss (Effective Portion) (1)	5	(281)
Interest Rate Swap
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instrument, beginning balance	(1,285)	2,590
Derivative instrument, ending balance	$ (4,875)	$ 638

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Operations by Segments and Geographic Areas - Schedule of Segment Depreciation and Amortization Expense Included in Measure of Segment Profit (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Depreciation and other amortization expense:
Depreciation and other amortization expense	$ 7,155	$ 5,576	$ 19,807	$ 16,767
Cloud Solutions
Depreciation and other amortization expense:
Depreciation and other amortization expense	3,540	2,854	10,121	8,663
Banking Solutions
Depreciation and other amortization expense:
Depreciation and other amortization expense	2,480	1,919	6,777	5,634
Payments and Documents
Depreciation and other amortization expense:
Depreciation and other amortization expense	887	719	2,272	2,202
Other
Depreciation and other amortization expense:
Depreciation and other amortization expense	$ 248	$ 84	$ 637	$ 268

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Operating Loss Carryforwards [Line Items]
Provision for (benefit from) CARES Act	$ (300)		$ (300)
Provision for (benefit from) income taxes	6,059	$ (1,251)	2,282	$ (6,104)
Discrete tax benefit relating to stock-based compensation		$ 800		5,400
Discrete tax benefit relating to the repatriation of foreign earnings				$ 500
Unrecognized tax benefits decrease as a result of the expiration of certain statutes	400
Valuation allowance against certain deferred tax assets	34,700		34,700
Israel Tax Authority
Operating Loss Carryforwards [Line Items]
Discrete tax benefit relating to stock-based compensation	$ 500		$ 1,100

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Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Operating activities:
Net (loss) income	$ (6,226)	$ 5,875
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Amortization of acquisition-related intangible assets	15,284	15,809
Stock-based compensation plan expense	31,298	31,906
Depreciation and other amortization	19,807	16,767
Gain on sale of cost-method investment	0	(237)
Deferred income tax benefit	(271)	(8,284)
Provision for allowances on accounts receivable	204	167
Amortization of debt issuance costs	310	311
Amortization of discount on investments	(52)	(108)
Loss on disposal of equipment	104	596
Loss on foreign exchange	504	410
Changes in operating assets and liabilities:
Accounts receivable	(2,062)	(3,520)
Prepaid expenses and other current assets	(479)	(3,913)
Operating lease right-of-use asset, net	2,282
Other assets	(1,860)	(1,483)
Accounts payable	2,627	1,485
Accrued expenses	(461)	(1,513)
Operating lease liabilities	(2,125)
Customer account liabilities	1,074	1,562
Deferred revenue	9,577	7,835
Other liabilities	594	(650)
Net cash provided by operating activities	70,129	63,015
Investing activities:
Acquisition of businesses and assets, net of cash and restricted cash acquired	0	(21,449)
Purchases of other investments	(144)	0
Proceeds from sale of cost-method investment	0	237
Purchases of available-for-sale securities	(11,473)	(7,588)
Proceeds from sales of available-for-sale securities	9,900	9,200
Capital expenditures, including capitalization of software costs	(39,516)	(45,725)
Insurance proceeds received for damage to equipment	0	201
Net cash used in investing activities	(41,233)	(65,124)
Financing activities:
Repurchase of common stock	(19,145)	0
Repayment of amounts borrowed under revolving credit facility	(10,000)	(40,000)
Amounts borrowed under revolving credit facility	80,000	0
Repayment of notes payable	(365)	(552)
Settlement of warrants	0	(4)
Debt issuance costs related to credit facility	0	(597)
Proceeds from exercise of stock options and employee stock purchase plan	4,133	3,856
Net cash provided by (used in) financing activities	54,623	(37,297)
Effect of exchange rate changes on cash	(1,667)	(1,427)
Increase (decrease) in cash, cash equivalents and restricted cash	81,852	(40,833)
Cash, cash equivalents and restricted cash at beginning of period	97,801	124,613
Cash, cash equivalents and restricted cash at end of period	179,653	83,780
Cash, cash equivalents and restricted cash at end of period	179,653	83,780
Supplemental disclosures of non-cash financing activities:
Issuance of common stock upon settlement of the warrants	$ 0	$ 58,451

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Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Jun. 30, 2019
Current assets:
Cash and cash equivalents	$ 173,063	$ 92,164
Cash held for customers	6,590	5,637
Marketable securities	9,224	7,541
Accounts receivable net of allowances for doubtful accounts of $924 at March 31, 2020 and $824 at June 30, 2019	78,271	77,285
Prepaid expenses and other current assets	30,333	30,434
Total current assets	297,481	213,061
Property and equipment, net	69,832	54,541
Operating lease right-of-use assets, net	23,953
Goodwill	205,206	206,101
Intangible assets, net	155,331	168,349
Other assets	28,769	27,177
Total assets	780,572	669,229
Current liabilities:
Accounts payable	12,830	10,947
Accrued expenses and other current liabilities	40,893	33,945
Customer account liabilities	6,590	5,637
Deferred revenue	86,236	75,097
Total current liabilities	146,549	125,626
Borrowings under credit facility	180,000	110,000
Deferred revenue, non-current	14,479	17,062
Operating lease liabilities, non-current	19,991
Deferred income taxes	9,251	10,345
Other liabilities	27,407	26,819
Total liabilities	397,677	289,852
Stockholders' equity
Preferred Stock, $.001 par value: Authorized shares—4,000; issued and outstanding shares-none	0	0
Common Stock, $.001 par value: Authorized shares—100,000; issued shares—XX,XXX at March 31, 2020 and 46,995 at June 30, 2019; outstanding shares—XX,XXX at March 31, 2020 and 41,315 at June 30, 2019	48	47
Additional paid-in-capital	754,140	721,438
Accumulated other comprehensive loss	(50,351)	(43,593)
Treasury stock: 5,975 shares at March 31, 2020 and 5,680 shares at June 30, 2019, at cost	(143,333)	(127,095)
Accumulated deficit	(177,609)	(171,420)
Total stockholders' equity	382,895	379,377
Total liabilities and stockholders' equity	$ 780,572	$ 669,229

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Commitments and Contingencies - Maturity Schedule (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Operating Leases
2020	$ 1,958
2021	7,774
2022	5,479
2023	3,711
2024	2,824
Thereafter	9,761
Total lease payments	31,507
Less imputed interest	(4,736)
Total operating lease liabilities	$ 26,771

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Commitments and Contingencies - Additional Information (Detail) $ in Millions	Mar. 31, 2020 USD ($)
Lessee, Lease, Description [Line Items]
Weighted average discount rate	5.00%
Weighted average remaining lease term	5 years 10 months 24 days
Operating leases not yet commenced	$ 2.7
Minimum
Lessee, Lease, Description [Line Items]
Operating lease renewal term	3 months
Operating Lease not yet commenced, term of contract	3 years
Maximum
Lessee, Lease, Description [Line Items]
Operating lease renewal term	10 years
Operating Lease not yet commenced, term of contract	12 years

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Fair Value - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Mar. 31, 2020	Jun. 30, 2019
Assets
Total available for sale securities	$ 9,170	$ 7,479
Fair Value, Recurring
Assets
Money market funds (cash and cash equivalents)	1,319	2,807
Total assets	10,489	10,286
Liabilities
Total liabilities	4,875	1,285
Fair Value, Recurring | Interest Rate Swap
Liabilities
Short-term derivative interest rate swap	1,404	37
Long-term derivative interest rate swap	3,471	1,248
Fair Value, Recurring | Government - U.S. treasury securities
Assets
Total available for sale securities	9,170	7,479
Fair Value, Recurring | Level 1
Assets
Money market funds (cash and cash equivalents)	1,319	2,807
Total assets	1,319	2,807
Liabilities
Total liabilities	0	0
Fair Value, Recurring | Level 1 | Interest Rate Swap
Liabilities
Short-term derivative interest rate swap	0	0
Long-term derivative interest rate swap	0	0
Fair Value, Recurring | Level 1 | Government - U.S. treasury securities
Assets
Total available for sale securities	0	0
Fair Value, Recurring | Level 2
Assets
Money market funds (cash and cash equivalents)	0	0
Total assets	9,170	7,479
Liabilities
Total liabilities	4,875	1,285
Fair Value, Recurring | Level 2 | Interest Rate Swap
Liabilities
Short-term derivative interest rate swap	1,404	37
Long-term derivative interest rate swap	3,471	1,248
Fair Value, Recurring | Level 2 | Government - U.S. treasury securities
Assets
Total available for sale securities	9,170	7,479
Fair Value, Recurring | Level 3
Assets
Money market funds (cash and cash equivalents)	0	0
Total assets	0	0
Liabilities
Total liabilities	0	0
Fair Value, Recurring | Level 3 | Interest Rate Swap
Liabilities
Short-term derivative interest rate swap	0	0
Long-term derivative interest rate swap	0	0
Fair Value, Recurring | Level 3 | Government - U.S. treasury securities
Assets
Total available for sale securities	$ 0	$ 0

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Fair Value - Summary of Gross Unrealized Losses and Fair Values of Available for Sale Investments (Detail) - USD ($) $ in Thousands	Mar. 31, 2020	Jun. 30, 2019
Schedule Of Available For Sale Securities Debt Maturities [Line Items]
Less than 12 months, fair value	$ 0	$ 800
Less than 12 months, unrealized loss	0	(1)
Government - U.S. treasury securities
Schedule Of Available For Sale Securities Debt Maturities [Line Items]
Less than 12 months, fair value	0	800
Less than 12 months, unrealized loss	$ 0	$ (1)

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Income Taxes

9 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The income tax expense we record in any interim period is based on our estimated effective tax rate for the fiscal year for those tax jurisdictions in which we can reliably estimate that rate. The calculation of our estimated effective tax rate requires an estimate of pre-tax income by tax jurisdiction as well as total tax expense for the fiscal year. Accordingly, our annual estimated effective tax rate is subject to adjustment if there are changes to our initial estimates of total tax expense or pre-tax income, including the mix of income by jurisdiction. For those tax jurisdictions for which we are unable to reliably estimate an overall effective tax rate, we calculate income tax expense based upon the actual effective tax rate for the year-to-date period.

Provision for Income Taxes

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in the U.S. in response to the COVID-19 pandemic. The CARES Act, among other things, includes a technical amendment to provide for bonus depreciation on certain qualifying assets. The CARES Act also provides for the ability to accelerate the refund of remaining alternative minimum tax credits, which will allow us to immediately request an additional $0.3 million in refunds that otherwise would have been received over the course of the next three years.

We recorded income tax expense of $6.1 million and an income tax benefit of $1.3 million for the three months ended March 31, 2020 and 2019, respectively. In the three months ended March 31, 2020, income tax expense was attributable to our U.S., UK and Switzerland operations, offset in part by a tax benefit recorded against operating losses in Israel, discrete tax benefits of $0.5 million relating to stock-based compensation and a discrete tax benefit of $0.3 million in the U.S. as a result of the bonus depreciation under the CARES Act as discussed above. The income tax benefit for the three months ended March 31, 2019 was driven largely by discrete tax benefits of $0.8 million relating to stock-based compensation.

We recorded income tax expense of $2.3 million and an income tax benefit of $6.1 million for the nine months ended March 31, 2020 and 2019, respectively. In the nine months ended March 31, 2020, income tax expense was attributable to our UK and Switzerland operations, offset in part by a tax benefit recorded against operating losses in Israel, discrete tax benefits of $1.1 million relating to stock-based compensation, and a discrete tax benefit of $0.3 million in the U.S. as a result of the CARES Act discussed above. In the nine months ended March 31, 2019, the income tax benefit we recorded was driven largely by discrete tax benefits of $5.4 million relating to stock-based compensation and a discrete tax benefit of $0.5 million arising from a reduction to deferred tax liabilities related to state tax consequences of repatriated foreign earnings.

We currently anticipate that our unrecognized tax benefits will decrease within the next twelve months by approximately $0.4 million as a result of the expiration of certain statutes of limitations associated with intercompany transactions subject to tax in multiple jurisdictions.

We record a deferred tax asset if we believe that it is more likely than not that we will realize a future tax benefit. Ultimate realization of any deferred tax asset is dependent on our ability to generate sufficient future taxable income in the appropriate tax jurisdiction before the expiration of carryforward periods, if any. Our assessment of deferred tax asset recoverability considers

many different factors including historical and projected operating results, the reversal of existing deferred tax liabilities that provide a source of future taxable income, the impact of current tax planning strategies and the availability of future tax planning strategies. We establish a valuation allowance against any deferred tax asset for which we are unable to conclude that recoverability is more likely than not.

At March 31, 2020, we had a total valuation allowance of $34.7 million against our deferred tax assets given the uncertainty of recoverability of these amounts.

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Fair Value

9 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

Fair Values of Assets and Liabilities

We measure fair value at 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. In determining fair value, the assumptions that market participants would use in pricing an asset or liability (the inputs) are based on a tiered fair value hierarchy consisting of three levels, as follows:

Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar instruments in active markets or for similar markets that are not active.

Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants would price the asset or liability.

Valuation techniques for assets and liabilities include methodologies such as the market approach, the income approach or the cost approach, and may use unobservable inputs such as projections, estimates and management’s interpretation of current market data. These unobservable inputs are only utilized to the extent that observable inputs are not available or cost-effective to obtain.

At March 31, 2020 and June 30, 2019, our assets and liabilities measured at fair value on a recurring basis were as follows:

	March 31, 2020								June 30, 2019
	Fair Value Measurements Using Input Types								Fair Value Measurements Using Input Types
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Money market funds (cash and cash equivalents)	$	1,319	$	—	$	—	$	1,319	$	2,807	$	—	$	—	$	2,807
Available for sale securities - Debt
Government - U.S. treasury securities	—		9,170		—		9,170		—		7,479		—		7,479
Total assets	$	1,319	$	9,170	$	—	$	10,489	$	2,807	$	7,479	$	—	$	10,286
Liabilities
Short-term derivative interest rate swap	$	—	$	1,404	$	—	$	1,404	$	—	$	37	$	—	$	37
Long-term derivative interest rate swap	$	—	$	3,471	$	—	$	3,471	$	—	$	1,248	$	—	$	1,248
Total liabilities	$	—	$	4,875	$	—	$	4,875	$	—	$	1,285	$	—	$	1,285

Fair Value of Financial Instruments

We have certain financial instruments which consist of cash and cash equivalents, cash and cash equivalents held for customers, marketable securities, accounts receivable, accounts payable, customer account liabilities, derivative interest rate swaps, assets related to deposits made to fund future requirements associated with Israeli severance arrangements and debt drawn on our Credit Facility (see Note 11 Indebtedness). Fair value information for each of these instruments is as follows:

• Cash and cash equivalents, cash and cash equivalents held for customers, accounts receivable, accounts payable and customer account liabilities fair values approximates their carrying values, due to the short-term nature of these instruments.

• Marketable securities classified as held to maturity, all of which mature within one year, are recorded at amortized cost, which at March 31, 2020 and June 30, 2019, approximated fair value.

• Marketable debt securities classified as available for sale are recorded at fair value. Unrealized gains and losses are included as a component of other accumulated comprehensive income (loss) in stockholders’ equity, net of tax. We use the specific identification method to determine any realized gains or losses from the sale of our marketable debt securities classified as available for sale.

• The fair value of our derivative interest rate swaps are based on the present value of projected cash flows that will occur over the life of the instruments, after considering certain contractual terms and counterparty credit risk.

• The carrying value of assets related to deposits we have made to fund future requirements associated with Israeli severance arrangements was $1.0 million and $1.2 million at March 31, 2020 and June 30, 2019, respectively, which approximated their fair value.

• We have certain other investments for which there is no readily determinable fair value. The carrying value of these investments was $0.9 million and $0.7 million at March 31, 2020 and June 30, 2019, respectively, and they are reported as a component of our other assets. These investments are recorded at cost, less impairment (if any), plus or minus adjustments for observable price changes.

• We have borrowings of $180 million against our Credit Facility. The fair value of these borrowings, which are classified as Level 2, approximates their carrying value at March 31, 2020, as the instrument carries a variable rate of interest which reflects current market rates.

Marketable Securities

The table below presents information regarding our marketable securities by major security type as of March 31, 2020 and June 30, 2019.

	March 31, 2020						June 30, 2019
	Held to Maturity		Available for Sale		Total		Held to Maturity		Available for Sale		Total
	(in thousands)
Marketable securities:
Government and other debt securities	$	54	$	9,170	$	9,224	$	62	$	7,479	$	7,541
Total marketable securities	$	54	$	9,170	$	9,224	$	62	$	7,479	$	7,541

The following table summarizes the estimated fair value of our investments in available for sale marketable securities classified by the contractual maturity date of the securities:

	March 31, 2020
	(in thousands)
Due within 1 year	$	9,170
Due in 1 year through 5 years	—
Total	$	9,170

All of our available for sale marketable securities are classified as current assets.

The following table presents the aggregate fair values and gross unrealized losses for those available for sale investments that were in an unrealized loss position as of March 31, 2020 and June 30, 2019, respectively, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:

	At March 31, 2020				At June 30, 2019
	Less than 12 Months
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(in thousands)
Government - U.S. treasury securities	$	—	$	—	$	800	$	(1	)
Total	$	—	$	—	$	800	$	(1	)

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Derivative Instruments

9 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

Cash Flow Hedges

Interest Rate Swap Agreements

We utilize interest rate swap agreements to hedge our exposure to interest rate risk. At March 31, 2020, we had two outstanding interest rate swap agreements with notional values of $100 million and $80 million.

The notional value of each interest rate swap agreement is expected to match the corresponding principal amount of a portion of our borrowings under the Credit Facility.

The $100 million notional value agreement is effective as of December 1, 2017 and expires on December 1, 2021. During this period, the notional amount will have a fixed interest rate of 1.9275% and Citizens Bank, National Association, as counterparty to the agreement, will pay us interest at a floating rate based on the 1 month USD-LIBOR-BBA swap rate on the notional amount. Interest payments are made quarterly on a net settlement basis.

The $80 million notional value agreement is effective as of December 1, 2021 and expires on July 16, 2023. During this period, the notional amount will have a fixed interest rate of 2.125% and Bank of America, N.A., as counterparty to the agreement, will pay us interest at a floating rate based on the 1 month USD-LIBOR-BBA swap rate on the notional amount. Interest payments will be made monthly on a net settlement basis.

We designated the interest rate swaps as hedging instruments and they qualified for hedge accounting upon inception and at March 31, 2020. To continue to qualify for hedge accounting, the instruments must retain a “highly effective” ability to hedge interest rate risk for borrowings under the Credit Facility. We are required to test hedge effectiveness at the end of each financial reporting period. If a derivative qualifies for hedge accounting, changes in fair value of the hedge instrument are recognized in accumulated other comprehensive income (loss) (AOCI) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The reclassification into earnings is recorded as a component of our interest expense within other expense, net. If the instrument were to lose some or all of its hedge effectiveness, changes in fair value for the “ineffective” portion of the instrument would be recorded immediately in earnings.

The fair values of the interest rate swaps and their respective locations in our consolidated balance sheets at March 31, 2020 and June 30, 2019 were as follows:

Description	Balance Sheet Location	March 31, 2020		June 30, 2019
Derivative interest rate swaps		(in thousands)
Short-term derivative liability	Accrued expenses and other current liabilities	$	1,404	$	37
Long-term derivative liability	Other liabilities	$	3,471	$	1,248

The following table presents the effect of the derivative interest rate swaps in our consolidated statement of comprehensive loss for the nine months ended March 31, 2020 and 2019.

	Gain (Loss) in AOCI June 30, 2019			Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)			Amount of (Gain) Loss Reclassified from AOCI into Net Loss (Effective Portion) (1)			Gain (Loss) in AOCI March 31, 2020
	(in thousands)
Derivative interest rate swap	$	(1,285	)	$	(3,595	)	$	5		$	(4,875	)
	Gain (Loss) in AOCI June 30, 2018			Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)			Amount of (Gain) Loss Reclassified from AOCI into Net Loss (Effective Portion) (1)			Gain (Loss) in AOCI March 31, 2019
	(in thousands)
Derivative interest rate swap	$	2,590		$	(1,671	)	$	(281	)	$	638

——————

⁽¹⁾  Recorded as interest income (expense) within other expense, net in our unaudited consolidated statements of comprehensive income (loss).

During the three and nine months ended March 31, 2020, we concluded that no portion of the hedges was ineffective.

We expect to reclassify approximately $1.6 million of this unrealized loss from AOCI to earnings over the next twelve months.

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Basis of Presentation

9 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Bottomline Technologies (de), Inc. (referred to below as we, us, our or Bottomline) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments) considered necessary for a fair presentation of the interim financial information have been included. Operating results for the three and nine months ended March 31, 2020 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending June 30, 2020, particularly in light of the novel coronavirus (COVID-19) pandemic and the effect it is having on the domestic and global economies. For further information, refer to the financial statements and footnotes included in the Annual Report on Form 10-K as filed with the Securities and Exchange Commission on August 29, 2019.

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Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Jun. 30, 2019
Statement of Financial Position [Abstract]
Accounts receivable, net of allowances for doubtful accounts and returns	$ 924	$ 824
Preferred Stock, $.001 par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized shares	4,000,000	4,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common Stock, $.001 par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized shares	100,000,000	100,000,000
Common stock, issued shares	47,889,000	46,995,000
Common stock, outstanding shares	41,914,000	41,315,000
Treasury stock (in shares)	5,975,000	5,680,000

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Indebtedness - Additional Information (Detail)	Jun. 30, 2020	Mar. 31, 2020 USD ($)	Jun. 30, 2019 USD ($)
Debt Instrument [Line Items]
Borrowings under credit facility		$ 180,000,000	$ 110,000,000
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum capacity borrowing amount under credit facility		300,000,000
Borrowings under credit facility		180,000,000
Maximum | Revolving Credit Facility
Debt Instrument [Line Items]
Additional borrowing capacity		$ 150,000,000
Consolidated net leverage ratio		3.75
Maximum | Step Down | Forecast | Revolving Credit Facility
Debt Instrument [Line Items]
Consolidated net leverage ratio	3.50
Minimum | Revolving Credit Facility
Debt Instrument [Line Items]
Consolidated interest coverage ratio		3.00

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Commitments and Contingencies - Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 31, 2020	Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Operating lease cost	$ 1,913	$ 5,711
Short-term lease cost	138	485
Variable lease cost	477	1,520
Sublease income	(17)	(269)
Total lease cost	$ 2,511	$ 7,447

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Revenue Recognition - Summary of Contract Assets and Liabilities (Detail) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2020	Jun. 30, 2019
Revenue from Contract with Customer [Abstract]
Accounts receivable	$ 78,271	$ 77,285
Contract assets	3,195	5,135
Deferred revenue	100,715	$ 92,159
Change in accounts receivable	986
Change in contract assets	(1,940)
Change in deferred revenue	$ 8,556

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Fair Value - Estimated Fair Value of Our Investments in Available for Sale Marketable Securities Classified (Detail) - USD ($) $ in Thousands	Mar. 31, 2020	Jun. 30, 2019
Fair Value Disclosures [Abstract]
Due within 1 year	$ 9,170
Due in 1 year through 5 years	0
Total	$ 9,170	$ 7,479

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Postretirement and Other Employee Benefits

9 Months Ended

Mar. 31, 2020

Retirement Benefits [Abstract]

Postretirement and Other Employee Benefits

Postretirement and Other Employee Benefits

Defined Benefit Pension Plan

We sponsor a defined benefit pension plan for our Swiss-based employees (the Swiss pension plan) that is governed by local regulatory requirements. This plan includes certain minimum benefit guarantees that, under U.S. GAAP, require defined benefit plan accounting.

Net periodic pension costs for the Swiss pension plan included the following components:

	Three Months Ended March 31,						Nine Months Ended March 31,
	2020			2019			2020			2019
	(in thousands)
Components of net periodic cost
Service cost	$	749		$	625		$	2,202		$	1,900
Interest cost	57			113			169			343
Prior service credit	(79		)	(76		)	(233		)	(231		)
Net actuarial loss	122			54			359			164
Expected return on plan assets	(317		)	(342		)	(933		)	(1,040		)
Net periodic cost	$	532		$	374		$	1,564		$	1,136

The components of net periodic pension cost other than current service cost are presented within other expense, net in our unaudited consolidated statements of comprehensive income (loss).

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Goodwill and Other Intangible Assets

9 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill and acquired intangible assets are initially recorded at fair value and tested periodically for impairment. We perform an impairment test of goodwill during the fourth quarter of each fiscal year or sooner, if indicators of potential impairment arise.

At March 31, 2020, the carrying value of goodwill for all of our reporting units was $205.2 million.

The following tables set forth the information for intangible assets subject to amortization and for intangible assets not subject to amortization.

	As of March 31, 2020
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Weighted Average Remaining Life
	(in thousands)							(in years)
Amortized intangible assets:
Customer related	$	218,650	$	(153,476	)	$	65,174	7.7
Core technology	133,038		(95,444		)	37,594		7.0
Other intangible assets	22,025		(19,656		)	2,369		4.6
Capitalized software development costs	25,410		(12,960		)	12,450		2.3
Software (1)	80,609		(42,865		)	37,744		3.8
Total	$	479,732	$	(324,401	)	$	155,331
Unamortized intangible assets:
Goodwill						205,206
Total intangible assets						$	360,537

	As of June 30, 2019
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Weighted Average Remaining Life
	(in thousands)							(in years)
Amortized intangible assets:
Customer related	$	219,893	$	(145,144	)	$	74,749	8.5
Core technology	130,226		(90,017		)	40,209		7.4
Other intangible assets	25,712		(19,030		)	6,682		5.0
Capitalized software development costs	23,213		(10,006		)	13,207		3.0
Software (1)	72,018		(38,516		)	33,502		4.2
Total	$	471,062	$	(302,713	)	$	168,349
Unamortized intangible assets:
Goodwill						206,101
Total intangible assets						$	374,450

——————

⁽¹⁾  Software includes purchased software and software developed for internal use.

Estimated amortization expense for the remainder of fiscal year 2020 and subsequent fiscal years for acquired intangible assets, capitalized software development costs and software, in each case that have been placed in service as of March 31, 2020, is as follows:

	Acquired Intangible Assets		Capitalized Software Development Costs		Software
	(in thousands)
Remaining 2020	$	5,078	$	1,021	$	3,059
2021	18,937		4,083		9,312
2022	16,848		4,083		7,432
2023	15,473		1,239		5,533
2024	13,707		537		4,018
2025 and thereafter	35,094		50		2,291

Each period, for capitalized software development costs, we evaluate whether amortization expense using a ratio of revenue in the period to total expected revenue over the product’s expected useful life would result in greater amortization than as calculated under a straight-line methodology and, if that were to occur, amortization in that period would be accelerated accordingly.

The following table represents a rollforward of our goodwill balances, by reportable segment:

	Cloud Solutions		Banking Solutions		Payments and Documents			Other		Total
	(in thousands)
Balance at June 30, 2019 (1)	$	90,307	$	39,451	$	68,149		$	8,194	$	206,101
Measurement period adjustment (2)	—		65		—			—		65
Impact of foreign currency translation	296		—		(1,256		)	—		(960		)
Balance at March 31, 2020 (1)	$	90,603	$	39,516	$	66,893		$	8,194	$	205,206

——————

⁽¹⁾  Other goodwill balance is net of $7.5 million accumulated impairment losses, recorded previously.

⁽²⁾  The measurement period adjustment relates to our BankSight acquisition. See Note 5 Business and Asset Acquisitions.

There can be no assurance that there will not be impairment charges in future periods as a result of future impairment reviews. Given the particular challenge of COVID-19, we performed additional review procedures over our goodwill and intangible assets as of March 31, 2020 and concluded that there were not indicators that suggested that it was more likely than not that these assets were impaired as of that date. Any material adverse change to our business results would increase the risk of impairment to our goodwill and other intangible assets and any such impairment charge would likely be material.

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Business and Asset Acquisitions

9 Months Ended

Mar. 31, 2020

Business Combinations [Abstract]

Business Acquisitions

Business Acquisitions

BankSight Software Systems

In June 2019, we acquired the remaining capital stock of BankSight Software Systems, Inc. (BankSight) for $2.8 million in cash and the issuance of 40,000 shares of our common stock. The common stock had vesting conditions tied to the continued employment of a prior stockholder of BankSight and was therefore excluded from the purchase price allocation. Prior to the acquisition, we had a pre-existing relationship in the form of a minority investment in preferred stock of BankSight in the amount of $3.5 million. The carrying value of our prior investment approximated its fair value at the time of our acquisition and the total fair value we paid to acquire the outstanding capital stock of BankSight, $6.3 million, was allocated to assets acquired and liabilities assumed. BankSight’s operating results are included in our Banking Solutions segment from the date of the acquisition forward and did not have a material impact on our revenue or net income.

In the allocation of the purchase price we recorded $3.6 million of goodwill. The goodwill is not deductible for income tax purposes and arose principally due to the anticipated future benefits arising from the acquisition. Identifiable intangible assets of $3.1 million, consisting primarily of technology related assets, are being amortized over a weighted average estimated useful life of 11 years.

Experian Limited

In March 2019, we acquired certain technology assets and customer related assets from Experian Limited (Experian) for 9.5 million British Pound Sterling (approximately $12.6 million based on the exchange rate in effect at the acquisition date). In the final allocation of the purchase price, we recorded $1.7 million of goodwill, which is not deductible for income tax purposes, which arose principally due to the anticipated future benefits arising from the acquisition. Identifiable intangible assets of $12.8 million, consisting primarily of customer related assets, are being amortized over a weighted average estimated useful life of 11 years. Experian’s operating results are included in our Payments and Documents segment from the date of the acquisition forward and did not have a material impact on our revenue or net income.

In May 2019, we were notified by the United Kingdom's (UK) Competition and Markets Authority (CMA) that it was reviewing our acquisition of these assets from Experian to assess whether the acquisition could result in a substantial lessening of competition. In March 2020, the CMA review process was completed, with a finding that our acquisition of assets from Experian did not raise anti-competition concerns.

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Derivative Instruments (Tables)

9 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Fair Values of the Interest Rate Swap

The fair values of the interest rate swaps and their respective locations in our consolidated balance sheets at March 31, 2020 and June 30, 2019 were as follows:

Description	Balance Sheet Location	March 31, 2020		June 30, 2019
Derivative interest rate swaps		(in thousands)
Short-term derivative liability	Accrued expenses and other current liabilities	$	1,404	$	37
Long-term derivative liability	Other liabilities	$	3,471	$	1,248

Summary of Effect of Derivative Interest Rate Swap and Related Tax Effects in AOCI

The following table presents the effect of the derivative interest rate swaps in our consolidated statement of comprehensive loss for the nine months ended March 31, 2020 and 2019.

	Gain (Loss) in AOCI June 30, 2019			Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)			Amount of (Gain) Loss Reclassified from AOCI into Net Loss (Effective Portion) (1)			Gain (Loss) in AOCI March 31, 2020
	(in thousands)
Derivative interest rate swap	$	(1,285	)	$	(3,595	)	$	5		$	(4,875	)
	Gain (Loss) in AOCI June 30, 2018			Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)			Amount of (Gain) Loss Reclassified from AOCI into Net Loss (Effective Portion) (1)			Gain (Loss) in AOCI March 31, 2019
	(in thousands)
Derivative interest rate swap	$	2,590		$	(1,671	)	$	(281	)	$	638

——————

⁽¹⁾ 

Recorded as interest income (expense) within other expense, net in our unaudited consolidated statements of comprehensive income (loss).

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Net (Loss) Income Per Share (Tables)

9 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Income Per Share

The following table sets forth the computation of basic and diluted net (loss) income per share:

	Three Months Ended March 31,					Nine Months Ended March 31,
	2020			2019		2020			2019
	(in thousands, except per share amounts)
Numerator - basic and diluted:
Net (loss) income	$	(7,468	)	$	824	$	(6,226	)	$	5,875
Denominator:
Shares used in computing basic net (loss) income per share attributable to common stockholders	41,823			40,911		41,668			40,412
Impact of dilutive securities	—			714		—			1,238
Shares used in computing diluted net (loss) income per share attributable to common stockholders	41,823			41,625		41,668			41,650
Basic net (loss) income per share attributable to common stockholders	$	(0.18	)	$	0.02	$	(0.15	)	$	0.15
Diluted net (loss) income per share attributable to common stockholders	$	(0.18	)	$	0.02	$	(0.15	)	$	0.14

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Postretirement and Other Employee Benefits - Components of Net Periodic Pension Costs for the Swiss Pension Plan (Detail) - Switzerland - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Components of net periodic cost
Service cost	$ 749	$ 625	$ 2,202	$ 1,900
Interest cost	57	113	169	343
Prior service credit	(79)	(76)	(233)	(231)
Net actuarial loss	122	54	359	164
Expected return on plan assets	(317)	(342)	(933)	(1,040)
Net periodic cost	$ 532	$ 374	$ 1,564	$ 1,136

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Operations by Segments and Geographic Areas - Reconciliation of Measure of Total Segment Profit to GAAP Income (Loss) Before Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total measure of segment profit	$ (439)	$ 268	$ (1,679)	$ 2,105
Less:
Amortization of acquisition-related intangible assets	(5,121)	(5,230)	(15,284)	(15,809)
Stock-based compensation plan expense			(31,298)	(31,906)
Other expense, net of pension adjustments	(970)	(695)	(2,265)	(2,334)
Loss before income taxes	(1,409)	(427)	(3,944)	(229)
Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total measure of segment profit	16,015	18,933	51,736	58,374
Segment Reconciling Items
Less:
Amortization of acquisition-related intangible assets	(5,121)	(5,230)	(15,284)	(15,809)
Stock-based compensation plan expense	(9,289)	(10,015)	(31,298)	(31,906)
Acquisition and integration-related expenses	(986)	(1,373)	(4,640)	(2,966)
Restructuring expense	(730)	(1,332)	(939)	(1,963)
Other non-core benefit	0	0	10	0
Global ERP system implementation and other costs	(61)	(557)	(485)	(3,110)
Other expense, net of pension adjustments	(1,237)	(853)	(3,044)	(2,849)
Loss before income taxes	$ (1,409)	$ (427)	$ (3,944)	$ (229)

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Operations by Segments and Geographic Areas - Schedule of Long-Lived Assets, Based on Geographical Location, Excluding Deferred Tax Assets and Intangible Assets (Detail) - USD ($) $ in Thousands	Mar. 31, 2020	Jun. 30, 2019
Long-lived assets
Long-lived assets	$ 122,554	$ 81,718
United States
Long-lived assets
Long-lived assets	62,823	44,357
United Kingdom
Long-lived assets
Long-lived assets	44,542	32,035
Other
Long-lived assets
Long-lived assets	$ 15,189	$ 5,326