Commitments and Contingencies

9 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

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

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⁽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.