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 December 31, 2018

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 Portsmouth, New Hampshire	03801-6808
(Address of principal executive offices)	(Zip Code)

(603) 436-0700

(Registrant’s telephone number, including area code)

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 January 31, 2019 was 43,193,919.

BOTTOMLINE TECHNOLOGIES (de), INC.

FORM 10-Q

FOR THE FISCAL QUARTER ENDED DECEMBER 31, 2018

TABLE OF CONTENTS

		Page
Item 1.	Unaudited Condensed Consolidated Financial Statements		3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		26
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		37
Item 4.	Controls and Procedures		38
PART II
Item 1.	Legal Proceedings		39
Item 1A.	Risk Factors		39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		39
Item 6.	Exhibits		40
	SIGNATURE		41

2

PART I.    FINANCIAL INFORMATION

Item 1. Financial Statements

Bottomline Technologies (de), Inc.

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

	December 31,			June 30,
	2018			2018
ASSETS
Current assets:
Cash and cash equivalents	$	87,639		$	121,860
Cash held for customers		5,382			2,753
Marketable securities		8,477			10,012
Accounts receivable net of allowances for doubtful accounts of $1,011 at December 31, 2018 and $996 at June 30, 2018		62,902			74,305
Prepaid expenses and other current assets		30,205			19,781
Total current assets		194,605			228,711
Property and equipment, net		28,876			28,895
Goodwill		200,786			200,024
Intangible assets, net		160,136			161,785
Other assets		33,301			16,553
Total assets	$	617,704		$	635,968
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	10,166		$	10,251
Accrued expenses and other current liabilities		29,038			34,994
Customer account liabilities		5,382			2,753
Deferred revenue		58,496			75,356
Total current liabilities		103,082			123,354
Borrowings under credit facility		110,000			150,000
Deferred revenue, non-current		16,693			23,371
Deferred income taxes		7,457			8,367
Other liabilities		19,627			19,944
Total liabilities		256,859			325,036
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-46,468 at December 31, 2018 and 44,834 at June 30, 2018; outstanding shares-40,738 at December 31, 2018 and 39,028 at June 30, 2018		46			45
Additional paid-in-capital		700,520			678,549
Accumulated other comprehensive loss		(35,704	)		(30,633	)
Treasury stock: 5,730 shares at December 31, 2018 and 5,806 shares at June 30, 2018, at cost		(128,216	)		(129,914	)
Accumulated deficit		(175,801	)		(207,115	)
Total stockholders’ equity		360,845			310,932
Total liabilities and stockholders’ equity	$	617,704		$	635,968

See accompanying notes.

3

Bottomline Technologies (de), Inc.

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands, except per share amounts)

	Three Months Ended December 31,						Six Months Ended December 31,
	2018			2017			2018			2017
Revenues:
Subscriptions and transactions	$	71,288		$	63,187		$	141,056		$	123,901
Software licenses		5,665			2,620			10,177			4,985
Service and maintenance		26,786			28,433			54,191			55,775
Other		1,107			955			1,859			1,830
Total revenues		104,846			95,195			207,283			186,491
Cost of revenues:
Subscriptions and transactions		31,352			27,211			63,021			54,633
Software licenses		210			229			441			399
Service and maintenance		12,528			13,034			25,234			25,334
Other		891			701			1,415			1,368
Total cost of revenues		44,981			41,175			90,111			81,734
Gross profit		59,865			54,020			117,172			104,757
Operating expenses:
Sales and marketing		22,585			21,441			45,607			40,790
Product development and engineering		16,815			13,938			33,380			27,802
General and administrative		11,904			10,989			25,769			22,826
Amortization of acquisition-related intangible assets		5,253			5,702			10,579			10,890
Total operating expenses		56,557			52,070			115,335			102,308
Income from operations		3,308			1,950			1,837			2,449
Other expense, net		(858	)		(3,357	)		(1,639	)		(7,640	)
Income (loss) before income taxes		2,450			(1,407	)		198			(5,191	)
Benefit from income taxes		3,519			4,495			4,853			4,038
Net income (loss)	$	5,969		$	3,088		$	5,051		$	(1,153	)
Net income (loss) per share:
Basic	$	0.15		$	0.08		$	0.13		$	(0.03	)
Diluted	$	0.14		$	0.08		$	0.12		$	(0.03	)
Shares used in computing net income (loss) per share:
Basic		40,635			38,087			40,162			37,908
Diluted		41,739			39,344			41,662			37,908
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available for sale securities		8			(3	)		6			(3	)
Unrealized gain (loss) on interest rate hedging transactions		(1,438	)		604			(1,111	)		369
Minimum pension liability adjustments		(10	)		38			(56	)		142
Foreign currency translation adjustments		(2,543	)		773			(3,910	)		2,146
Other comprehensive income (loss), net of tax:		(3,983	)		1,412			(5,071	)		2,654
Comprehensive income (loss)	$	1,986		$	4,500		$	(20	)	$	1,501

See accompanying notes.

4

Bottomline Technologies (de), Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

	Six Months Ended December 31,
	2018			2017
Operating activities:
Net income (loss)	$	5,051		$	(1,153	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of acquisition-related intangible assets		10,579			10,890
Stock-based compensation plan expense		21,891			16,540
Depreciation and other amortization		11,191			9,543
Gain on sale of cost-method investment		(237	)		—
Deferred income tax benefit		(6,177	)		(4,745	)
Provision for allowances on accounts receivable		159			75
Amortization of debt issuance costs		208			711
Amortization of debt discount		—			5,574
Amortization of discount on investments		(75	)		(5	)
Loss (gain) on disposal of equipment		594			(10	)
Loss (gain) on foreign exchange		326			(26	)
Changes in operating assets and liabilities:
Accounts receivable		8,827			(12,326	)
Prepaid expenses and other current assets		(1,982	)		(1,089	)
Other assets		(1,643	)		926
Accounts payable		403			(145	)
Accrued expenses		(4,858	)		(1,932	)
Customer account liabilities		2,761			(4,588	)
Deferred revenue		(13,491	)		(12,443	)
Other liabilities		(278	)		(697	)
Net cash provided by operating activities		33,249			5,100
Investing activities:
Acquisition of businesses and assets, net of cash and restricted cash acquired		(8,895	)		(5,741	)
Proceeds from sale of cost-method investment		237			—
Purchases of available-for-sale securities		(7,588	)		(9,935	)
Proceeds from sales of available-for-sale securities		9,200			1,903
Capital expenditures, including capitalization of software costs		(17,028	)		(9,137	)
Proceeds from disposal of property and equipment		—			10
Insurance proceeds received for damage to equipment		200			—
Net cash used in investing activities		(23,874	)		(22,900	)
Financing activities:
Repayment of amounts borrowed under revolving credit facility		(40,000	)		(189,750	)
Amounts borrowed under revolving credit facility		—			150,000
Repayment of notes payable		(183	)		(2,204	)
Settlement of warrants		(4	)		—
Debt issuance costs related to credit facility		(597	)		—
Proceeds from exercise of stock options and employee stock purchase plan		1,740			1,705
Net cash used in financing activities		(39,044	)		(40,249	)
Effect of exchange rate changes on cash		(1,923	)		1,012
Decrease in cash, cash equivalents and restricted cash		(31,592	)		(57,037	)
Cash, cash equivalents and restricted cash at beginning of period		124,613			124,569
Cash, cash equivalents and restricted cash at end of period	$	93,021		$	67,532
Cash and cash equivalents at end of period	$	87,639		$	64,051
Cash held for customers at end of period		5,382			3,481
Cash, cash equivalents and restricted cash at end of period	$	93,021		$	67,532
Supplemental disclosures of non-cash financing activities:
Issuance of common stock upon settlement of the warrants	$	58,451		$	—
Issuance of note payable to seller in connection with acquisition	$	—		$	1,836
Issuance of common stock upon conversion of convertible senior notes	$	—		$	19,736
Receipt of common stock upon settlement of Note Hedges	$	—		$	19,964

See accompanying notes.

5

Bottomline Technologies (de), Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

December 31, 2018

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 six months ended December 31, 2018 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending June 30, 2019. 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, 2018.

Note 2—Recent Accounting Pronouncements

Recently Adopted Pronouncements

Revenue Recognition: In May 2014, the Financial Accounting Standard Board (FASB) issued an accounting standard update for new revenue recognition guidance, superseding nearly all prior revenue recognition guidance. The new revenue standard outlines a single comprehensive model for accounting for revenue from contracts with customers and requires more detailed revenue disclosures. The core principle of the new standard is that revenue is to be recognized in a manner that depicts the transfer of promised goods or services to customers at amounts that reflect the consideration which the entity expects to be entitled under the arrangement.

We adopted the new revenue standard on July 1, 2018 using the modified retrospective method of adoption applied to open contracts at that date and upon adoption recorded a $26.3 million decrease to our accumulated deficit balance. The adjustments we recorded at transition were composed of:

	(in thousands)
Decrease to accounts receivable	$	(1,914	)
Increase to contract assets		5,118
Decrease to deferred revenue		9,839
Increase to capitalized fulfillment costs		11,648
Increase to capitalized sales commissions		4,952
Tax effects		(3,380	)
Total decrease to accumulated deficit	$	26,263

The adjustment to accounts receivable relates primarily to unbilled receivables reclassified as contract assets. The increase to contract assets relates to revenue recognized in excess of the amount billed to the customer and the right to payment contingent on conditions other than simply the passage of time, such as the completion of a related performance obligation. Adjustments to deferred revenue relate primarily to the acceleration of revenue under the new standard as compared to the previous revenue recognition standard. This largely relates to transactions where, under legacy GAAP, revenue was deferred due to a lack of vendor specific objective evidence of fair value, transactions accounted for under a combined services arrangement which resulted in revenue recognition over time, transactions that had contractually stipulated price increases that were accounted for as the increases occurred and certain contingent revenue arrangements. Adjustments to capitalized fulfillment costs and capitalized sales commissions reflect the requirement to capitalize these costs under the new standard; prior to adoption, we expensed these costs as incurred. Capitalized costs are recorded as components of our prepaid expenses and other current assets and other assets in our consolidated balance sheet.

Please refer to Note 3 Revenue Recognition for discussion of the adoption of this new standard.

Financial Instruments - Classification and Measurement: In January 2016, the FASB issued an accounting standard update which requires that entities measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value, with changes in fair value recognized in earnings. Entities will no longer be able to recognize unrealized holding gains and losses on equity securities classified as available for sale as a component of other comprehensive income (OCI). Subject to certain exceptions, entities will be able to elect to record equity investments without readily determinable fair values at cost, less impairment, plus or minus adjustments for observable price changes, with all such changes recognized in earnings. This standard does not change the guidance for classifying and measuring investments in debt securities and loans. We adopted this standard effective July 1, 2018 and it did not have an impact on our financial statements, but could impact our financial statements in the future if observable price changes occur for investments we hold that do not have readily determinable fair values.

6

Statement of Cash Flows: In August and November of 2016, the FASB issued updated accounting standards which address the classification and presentation of certain cash receipts, cash payments and restricted cash in the statement of cash flows. We adopted these standards retrospectively on July 1, 2018. Our consolidated balance sheets include cash held for customers and a liability for the same amount. Cash held for customers and the related customer account liabilities arise from certain payment transactions we process on behalf of customers where we collect and hold customer funds for a short transient period before disbursing the cash and settling the liability. Cash we hold on behalf of customers is segregated from our other corporate cash accounts, is not available for use by us and is considered restricted cash. Prior to the adoption of this standard the change in cash held for customers and the corresponding liability were presented on a net basis in our consolidated statement of cash flows. As a result of adoption, the operating section of our consolidated statement of cash flows now reflects the impact on our total cash position, including the impact of changes in customer account liabilities.

During the six months ended December 31, 2017, the retrospective adoption of this standard resulted in an increase in operating cash flows of approximately $4.6 million.

Defined Benefit Plan Expenses: In March 2017, the FASB issued an accounting standard update that changes the income statement presentation of defined benefit plan expense by requiring separation between operating expense (the service cost component) and non-operating expense (all other components of net periodic defined benefit cost). Under the revised standard, the service cost component is classified consistently with other compensation costs, while all other components are reported in other expense, net. We adopted this standard retrospectively on July 1, 2018 and reclassified approximately $0.2 million and $0.4 million from income from operations to other expense, net for the three and six months ended December 31, 2017, respectively, in our consolidated statement of comprehensive loss.

Accounting Pronouncements to be Adopted

Leases: In February 2016, the FASB issued an accounting standard update which requires balance sheet recognition of a lease liability and a corresponding right-of-use asset for all leases with terms longer than twelve months. The pattern of recognition of lease related revenue and expenses will be dependent on its classification. The updated standard requires additional financial statement disclosures. We will adopt this standard on July 1, 2019 and anticipate that the standard will have a material impact to our consolidated balance sheet due to the recognition of right of use assets and lease liabilities and additional disclosures. We expect to adopt the standard using a modified retrospective method as of the date of adoption (July 1, 2019).

Financial Instruments - Credit Losses: In June 2016, the FASB issued an accounting standard update that introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments including trade receivables. 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. This standard is effective for us on July 1, 2020, with early application permitted. We are currently evaluating the anticipated impact of this standard on our financial statements as well as timing of adoption.

Goodwill Impairment: In January 2017, the FASB issued an accounting standard update to simplify the test for goodwill impairment which removes step 2 from the goodwill impairment test. 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. The standard is effective for us on July 1, 2020 on a prospective basis, with early adoption permitted. We do not currently expect the adoption of this standard to have a material impact on our financial statements.

Derivatives and Hedging: In August 2017, the FASB issued an accounting standard update that more closely aligns the results of cash flow and fair value hedge accounting with risk management activities through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. The guidance expands hedge accounting for both nonfinancial and financial risk components and refines the measurement of hedge results to better reflect an entity’s hedging strategies. In October 2018, the FASB issued an accounting standard update to expand the list of United States benchmark interest rates permitted in the application of hedge accounting. The revised standard allows the use of the Overnight Index Swap rate based on the Secured Overnight Financing Rate as a U.S. benchmark interest rate for hedge accounting purposes. These standard updates are required to be adopted concurrently and are effective for us on July 1, 2019. We are currently evaluating the anticipated impact of these standards on our financial statements.

Share-Based Compensation - Nonemployee Share-Based Payment Accounting: In June 2018, the FASB issued an accounting standard update to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees. Under the revised standard, measurement of nonemployee awards will be fixed at the grant date by estimating the fair value of the equity instruments to be issued. Additionally, during the vesting period, nonemployee awards that contain a performance condition that affects the quantity or other terms of the award will be measured based on the probable outcome. Upon adoption, entities must recognize a cumulative-effect adjustment to retained earnings as of the beginning of the annual period of adoption for equity-classified nonemployee awards for which a measurement date has not been established and liability-classified nonemployee awards that have not been settled. This standard is effective for us on July 1, 2019. We do not currently expect the adoption of this standard to have a material impact on our financial statements.

7

Note 3—Revenue Recognition

Significant Accounting Policy

Effective July 1, 2018, we adopted a new accounting standard related to revenue recognition on a modified retrospective basis to all open contracts. Other than changes in our accounting policies for revenue recognition and deferred contract costs due to the adoption of this standard, there have been no significant changes to our accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018.

Revenue Recognition

We generate revenue from the sale of SaaS or cloud-based services inclusive of both fixed and usage-based fees, perpetual and term software licenses, professional services such as consulting and implementation services, software support and maintenance and, to a lesser extent, through the sale of hardware and supplies. We recognize revenue as we transfer goods and services to customers, at amounts we expect to receive as consideration under enforceable contractual arrangements. Revenue is recognized as we satisfy contractual performance obligations, which can occur either at a point in time or over time. For perpetual and term software licenses that do not involve significant customization and for equipment and supplies sales, we normally record revenue at a point in time. For professional services, support and maintenance, stand-ready performance obligations with respect to our hosted or SaaS solutions and for software licenses that are dependent on significant customization by us we normally record revenue over time.

We recognize revenue according to a five step model that involves:

• Identifying the contract (or contracts) with a customer;

• Identifying the performance obligations in the contract(s);

• Determining the transaction price;

• Allocating the transaction price to the contractual performance obligations, and

• Recognizing revenue as we satisfy the performance obligations.

We consider a contract to exist when we have legally enforceable rights and obligations with a customer. Our contracts can take a variety of forms but are normally in writing and include all major commercial terms such as the goods or services we will be obligated to transfer under the arrangement, the amount the customer is obligated to pay us upon fulfillment of our obligations and the payment terms.

Performance obligations in a contract are accounted for separately if they are determined to be distinct. We consider a performance obligation to be distinct if that good or service is separately identified from other items in the contract and if the customer can benefit from that performance obligation on its own or together with resources that are readily available to the customer. In assessing whether a customer can benefit from a performance obligation on its own, we consider factors such as the interdependency or interrelationship of the item with other goods or services in the contract, the complexity of any required integration or customization and the ability of the customer’s personnel or other third party providers to fulfill like goods or services. If a particular good or service is not considered to be distinct, it is combined with other performance obligations in the arrangement and revenue is recognized as the combined performance obligation is transferred to the customer.

The transaction price is the amount of consideration we expect to be entitled to under a contract upon fulfillment of the performance obligations. The starting point for estimating the transaction price is the selling price stipulated in the contract, however we include in the determination of the overall transaction price an estimate of variable consideration to the extent it is probable that inclusion will not result in a significant future reversal of revenue. Variable consideration can arise in our arrangements as a result of usage-based fees. For contracts with a long period over which usage-based fees can arise, or in contracts with customers with whom we do not have a reasonable operating history, we often constrain the amount of variable consideration included in the transaction price. We update our estimate of variable consideration at the end of each financial reporting period. We exclude from the determination of the transaction price sales and other taxes we bill to and collect from customers and remit to government authorities. Shipping and handling activities performed after the customer has obtained control of the good or service is accounted for as a fulfillment activity.

The transaction price is allocated to contractual performance obligations on a relative standalone selling price basis. We normally estimate standalone selling price using the adjusted market approach, maximizing the use of observable inputs and other factors that can include: the price we charge when we sell an item separately, our internal price lists and internal pricing guidelines, cost of delivering the item and overall gross margin expectations and information about the customer or class of customer. Revenue is recorded, either at a point in time or over time, as we satisfy the performance obligations in a contract.

8

Nature of Goods and Services

Subscriptions and Transactions: We generate subscriptions and transactions revenue through the provision of hosted and SaaS based solutions which can include contractually fixed revenue amounts as well as usage based fees. Our SaaS arrangements consist of an obligation for us to provide continuous access to a technology solution that we host, which we account for as a stand-ready performance obligation. These contracts may also be subject to variable pricing or overage fees based on customer processing, usage or volume. We recognize revenue for fixed subscription fees ratably over the non-cancelable term of the contract, commencing on the date the customer has access to the solution. In circumstances where we meet certain requirements to allocate variable consideration to a distinct service within a series of related services, we allocate variable consideration to each distinct period of service within the series. If we do not meet those requirements, we include an estimate of variable consideration in the transaction price and recognize it ratably over the non-cancelable term of the contract.

For certain of our hosted or SaaS solutions, customers are charged a fee for implementation services. In determining whether the implementation services are distinct from the hosting services we consider various factors including the level of customization, complexity of the integration, the interdependency and interrelationship between the implementation services and the hosting services and the ability (or inability) of the customer’s personnel or other service providers to perform the services. We have concluded that the implementation services in our hosting arrangements with multiple performance obligations are not distinct and therefore we recognize fees for implementation services ratably over the non-cancelable term of the hosting contract.

We license certain software on a subscription basis under contractual arrangements where customers pay a specified fee, inclusive of support and maintenance, for a time-based license right to use our software. These fees recur periodically, unless the customer opts to cancel their subscription arrangement with us. These contracts typically contain two distinct performance obligations: the software license and support and maintenance. The portion of the transaction price allocated to the license right is recognized at the point in time in which we have provided the customer access to the intellectual property and the license term has commenced. The portion of the transaction price allocated to support and maintenance is recognized ratably over the non-cancelable contract term.

Software Licenses: Software licenses revenue reflects fees we charge to license software on a perpetual basis. For software licenses that do not include significant customization we recognize revenue at the point in time where the customer has obtained access to the intellectual property and the license period has commenced.

Certain of our software arrangements require significant customization and modification and involve extended implementation periods. In these arrangements the professional services and software license are highly interdependent and we treat the software license and professional services as a combined performance obligation. We recognize revenue for the combined performance obligation over time and measure progress to completion based on labor hours incurred as a percentage of total expected labor hours. We believe the use of labor hours as an input measure provides a faithful depiction of the transfer of goods and services under these contracts.

Support and Maintenance: Our software licenses are generally sold with post-contract support which is comprised of technical support and unspecified software upgrades. Unspecified upgrades refer to software upgrades which we make available at our discretion and from time-to-time, on a “when and as available” basis. We account for post-contract support as a stand-ready performance obligation and recognize revenue ratably over the non-cancelable contract term which is typically one year.

Professional Services: Our professional services revenue is normally comprised of implementation, consulting and training services. Except for professional service performance obligations that form part of an overall, highly customized arrangement, our professional services typically represent distinct performance obligations and revenue is recognized as the services are performed.

Other: Other revenue is derived from the sale of equipment and supplies and is recognized at the point in time control transfers to the customer.

9

Disaggregation of Revenue

The tables below present our revenue disaggregated by major product category and the related financial statement classification of revenue for the three and six months ended December 31, 2018.

	Three Months Ended December 31, 2018
	Settlement Network Solutions		Legal Spend Management Solutions		Banking Solutions		Payments and Transactional Documents		Healthcare		Other		Total
	(in thousands)
Financial statement classification:
Subscriptions and transactions	$	24,881	$	19,149	$	15,925	$	11,045	$	231	$	57	$	71,288
Software licenses		235		—		2,100		1,499		464		1,367		5,665
Service and maintenance		6,063		—		5,103		12,601		872		2,147		26,786
Other		—		—		—		798		—		309		1,107
Total revenues	$	31,179	$	19,149	$	23,128	$	25,943	$	1,567	$	3,880	$	104,846

	Six Months Ended December 31, 2018
	Settlement Network Solutions		Legal Spend Management Solutions		Banking Solutions		Payments and Transactional Documents		Healthcare		Other		Total
	(in thousands)
Financial statement classification:
Subscriptions and transactions	$	49,163	$	37,545	$	31,591	$	21,614	$	1,057	$	86	$	141,056
Software licenses		807		—		3,426		3,653		883		1,408		10,177
Service and maintenance		12,388		—		10,363		25,360		1,770		4,310		54,191
Other		—		—		—		1,550		—		309		1,859
Total revenues	$	62,358	$	37,545	$	45,380	$	52,177	$	3,710	$	6,113	$	207,283

Remaining Performance Obligations

The transaction price allocated to remaining performance obligations that are unsatisfied, or partially unsatisfied, as of December 31, 2018 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. The amount of revenue recognized during the three and six months ended December 31, 2018 from performance obligations satisfied in prior periods was not significant.

Revenue allocated to remaining performance obligations was $367.0 million as of December 31, 2018 of which we expect to recognize approximately $160.0 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 July 1, 2018 and December 31, 2018.

	July 1,		December 31,
	2018		2018		$ Change
	(in thousands)
Accounts receivable	$	72,391	$	62,902	$	(9,489	)
Contract assets		5,118		6,894		1,776
Deferred revenue		88,888		75,189		(13,699	)

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

For the three and six months ended December 31, 2018, we recognized $24.7 million and $51.8 million, respectively, in revenue from amounts that were included in deferred revenue as of July 1, 2018.

Contract Costs

We capitalize incremental costs incurred in connection with obtaining a contract if they have a period of benefit that is greater than one year and we expect to recover the costs through future contract revenues. Incremental costs incurred to obtain a contract relate to sales commissions. We also capitalize costs incurred in fulfilling a contract when the costs relate directly to a specifically identifiable customer contract, when the costs generate or enhance resources that we will use to satisfy performance obligations in the future and when the costs are expected to be recovered through future contract revenues. Capitalized costs to obtain a contract and capitalized fulfillment costs totaled $5.2 million and $16.3 million, respectively, at December 31, 2018.

Capitalized costs are amortized on a basis consistent with the transfer of the goods or services to which the asset relates. This results in capitalized costs being recognized on a ratable basis over the estimated period of future benefit, which is generally five years. We estimate the future period of benefit considering the current contract term, the impact of estimated customer renewal terms and the estimated life of the technology solution underlying the contracts. Amortization expense associated with costs of obtaining and costs of fulfilling a contract, respectively, for the three months ended December 31, 2018 was $0.5 million and $0.9 million and were recorded as components of sales and marketing expense and cost of revenues, respectively, in our consolidated statement of comprehensive income (loss). Amortization expense associated with costs of obtaining and costs of fulfilling a contract were $0.8 million and $1.4 million, respectively, for the six months ended December 31, 2018, and were recorded as components of sales and marketing expense and cost of revenues, respectively, in our consolidated statement of comprehensive income (loss).

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The following tables summarize the impact of adopting the new revenue standard on our consolidated financial statements as of and for the three and six months ended December 31, 2018:

Unaudited Condensed Consolidated Balance Sheet

	At December 31, 2018
(in thousands, unaudited)	As Reported			Adjustments			Balances without adoption of new revenue standard
ASSETS
Current assets:
Cash and cash equivalents	$	87,639		$	—		$	87,639
Cash held for customers		5,382			—			5,382
Marketable securities		8,477			—			8,477
Accounts receivable, net		62,902			1,576			64,478
Prepaid expenses and other current assets		30,205			(11,162	)		19,043
Total current assets		194,605			(9,586	)		185,019
Property and equipment, net		28,876			—			28,876
Goodwill		200,786			—			200,786
Intangible assets, net		160,136			—			160,136
Other assets		33,301			(14,931	)		18,370
Total assets	$	617,704		$	(24,517	)	$	593,187
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	10,166		$	—		$	10,166
Accrued expenses and other current liabilities		29,038			—			29,038
Customer account liabilities		5,382			—			5,382
Deferred revenue		58,496			2,071			60,567
Total current liabilities		103,082			2,071			105,153
Borrowings under credit facility		110,000			—			110,000
Deferred revenue, non-current		16,693			6,542			23,235
Deferred income taxes		7,457			1,619			9,076
Other liabilities		19,627			—			19,627
Total liabilities		256,859			10,232			267,091
Stockholders’ equity
Preferred Stock, $.001 par value		—			—			—
Common Stock, $.001 par value		46			—			46
Additional paid-in-capital		700,520			—			700,520
Accumulated other comprehensive loss		(35,704	)		185			(35,519	)
Treasury stock, at cost		(128,216	)		—			(128,216	)
Accumulated deficit		(175,801	)		(34,934	)		(210,735	)
Total stockholders’ equity		360,845			(34,749	)		326,096
Total liabilities and stockholders’ equity	$	617,704		$	(24,517	)	$	593,187

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Unaudited Condensed Consolidated Statement of Comprehensive Income (Loss)

	Three Months Ended December 31, 2018									Six Months Ended December 31, 2018
(in thousands, unaudited)	As Reported			Adjustments			Balances without adoption of new revenue standard			As Reported			Adjustments			Balances without adoption of new revenue standard
Revenues:
Subscriptions and transactions	$	71,288		$	390		$	71,678		$	141,056		$	1,226		$	142,282
Software licenses		5,665			(1,742	)		3,923			10,177			(3,382	)		6,795
Service and maintenance		26,786			514			27,300			54,191			1,227			55,418
Other		1,107			(37	)		1,070			1,859			(37	)		1,822
Total revenues		104,846			(875	)		103,971			207,283			(966	)		206,317
Cost of revenues:
Subscriptions and transactions		31,352			263			31,615			63,021			649			63,670
Software licenses		210			2			212			441			2			443
Service and maintenance		12,528			408			12,936			25,234			801			26,035
Other		891			(30	)		861			1,415			(28	)		1,387
Total cost of revenues		44,981			643			45,624			90,111			1,424			91,535
Gross profit		59,865			(1,518	)		58,347			117,172			(2,390	)		114,782
Operating expenses:
Sales and marketing		22,585			175			22,760			45,607			365			45,972
Product development and engineering		16,815			146			16,961			33,380			178			33,558
General and administrative		11,904			—			11,904			25,769			—			25,769
Amortization of acquisition-related intangible assets		5,253			—			5,253			10,579			—			10,579
Total operating expenses		56,557			321			56,878			115,335			543			115,878
Income from operations		3,308			(1,839	)		1,469			1,837			(2,933	)		(1,096	)
Other expense, net		(858	)		—			(858	)		(1,639	)		—			(1,639	)
Income (loss) before income taxes		2,450			(1,839	)		611			198			(2,933	)		(2,735	)
Benefit (expense) from income taxes		3,519			4,797			(1,278	)		4,853			5,738			(885	)
Net income (loss)	$	5,969		$	(6,636	)	$	(667	)	$	5,051		$	(8,671	)	$	(3,620	)
Net income (loss) per share:
Basic	$	0.15		$	(0.17	)	$	(0.02	)	$	0.13		$	(0.22	)	$	(0.09	)
Diluted	$	0.14		$	(0.16	)	$	(0.02	)	$	0.12		$	(0.21	)	$	(0.09	)
Shares used in computing net income (loss) per share:
Basic		40,635			—			40,635			40,162			—			40,162
Diluted		41,739			(1,104	)		40,635			41,662			(1,500	)		40,162
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available for sale securities		8			—			8			6			—			6
Unrealized gain (loss) on interest rate hedging transactions		(1,438	)		—			(1,438	)		(1,111	)		—			(1,111	)
Minimum pension liability adjustments		(10	)		—			(10	)		(56	)		—			(56	)
Foreign currency translation adjustments		(2,543	)		125			(2,418	)		(3,910	)		185			(3,725	)
Other comprehensive loss, net of tax:		(3,983	)		125			(3,858	)		(5,071	)		185			(4,886	)
Comprehensive income (loss)	$	1,986		$	(6,511	)	$	(4,525	)	$	(20	)	$	(8,486	)	$	(8,506	)

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Unaudited Condensed Consolidated Statement of Cash Flows

	Six Months Ended December 31, 2018
(in thousands, unaudited)	As Reported			Adjustments			Balances without adoption of new revenue standard
Operating activities:
Net income (loss)	$	5,051		$	(8,671	)	$	(3,620	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of acquisition-related intangible assets		10,579			—			10,579
Stock-based compensation plan expense		21,891			15			21,906
Depreciation and other amortization		11,191			—			11,191
Gain on sale of cost-method investment		(237	)		—			(237	)
Deferred income tax benefit		(6,177	)		5,738			(439	)
Provision for allowances on accounts receivable		159			—			159
Amortization of debt issuance costs		208			—			208
Amortization of discount on investments		(75	)		—			(75	)
Loss (gain) on disposal of equipment		594			—			594
Loss (gain) on foreign exchange		326			(5	)		321
Changes in operating assets and liabilities:
Accounts receivable		8,827			328			9,155
Prepaid expenses and other current assets		(1,982	)		2,754			772
Other assets		(1,643	)		1,004			(639	)
Accounts payable		403			—			403
Accrued expenses		(4,858	)		—			(4,858	)
Customer account liabilities		2,761			—			2,761
Deferred revenue		(13,491	)		(1,163	)		(14,654	)
Other liabilities		(278	)		—			(278	)
Net cash provided by operating activities	$	33,249		$	—		$	33,249

The following summarizes the significant adjustments resulting from our adoption of the new revenue recognition standard compared to what would have been recorded in our financial statements had we continued to apply the provisions of legacy GAAP:

Consolidated Balance Sheet

Adjustments to prepaid expenses and other current assets and other assets relate to costs to fulfill and costs to obtain a customer contract which are capitalized under the new standard and expensed as incurred under legacy GAAP. Adjustments to deferred revenue reflect the acceleration of revenue recognition for certain transactions that required longer term revenue deferral under legacy GAAP.

Consolidated Statement of Comprehensive Income (Loss)

Adjustments to software license revenues reflect the requirement under legacy GAAP to defer recognition of revenue when vendor specific evidence of fair value could not be established. The new revenue standard does not have a similar requirement and instead results in the recognition of software license revenue when that performance obligation has been transferred to the customer. In addition, the new revenue standard changed the methodology for allocating the transaction price between performance obligations, which had the impact of increasing software revenue. The decrease in our deferred tax benefit under legacy GAAP is driven by the overall decrease in net income and the inability to recognize certain interim tax benefits.

Statement of Cash Flows

The adoption of the new revenue standard had no impact on our total cash flows or the net cash provided by operating activities. The adjustments reflect offsetting shifts in the components of operating cash flow driven by changes to individual balance sheet accounts and the change in our net income (loss).

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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 December 31, 2018 and June 30, 2018, our assets and liabilities measured at fair value on a recurring basis were as follows:

	December 31, 2018								June 30, 2018
	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)	$	1,756	$	—	$	—	$	1,756	$	154	$	—	$	—	$	154
Available for sale securities - Debt
U.S. Corporate	$	—	$	991	$	—	$	991	$	—	$	3,467	$	—	$	3,467
Government - U.S.		—		7,424		—		7,424		—		6,480		—		6,480
Total available for sale securities	$	—	$	8,415	$	—	$	8,415	$	—	$	9,947	$	—	$	9,947
Short-term derivative interest rate swap	$	—	$	562	$	—	$	562	$	—	$	407	$	—	$	407
Long-term derivative interest rate swap	$	—	$	917	$	—	$	917	$	—	$	2,183	$	—	$	2,183

Fair Value of Financial Instruments

We have certain financial instruments which consist of cash and cash equivalents, cash held for customers, marketable securities, accounts receivable, accounts payable, customer account liabilities, a derivative interest rate swap and debt drawn on our Credit Facility (as defined in Note 11). Fair value information for each of these instruments is as follows:

• Cash and cash equivalents, cash 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 December 31, 2018 and June 30, 2018, 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 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 swap is based on the present value of projected cash flows that will occur over the life of the instrument, after considering certain contractual terms of the arrangement 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 $1.3 million and $1.4 million at December 31, 2018 and June 30, 2018, respectively, which approximated fair value.

• We have certain other investments for which there is no readily determinable fair value. The carrying value of these investments was $4.4 million at both December 31, 2018 and June 30, 2018, 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 $110 million against our Credit Facility. The fair value of these borrowings, which are classified as Level 2, approximates their carrying value at December 31, 2018, 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 December 31, 2018 and June 30, 2018.

	December 31, 2018						June 30, 2018
	Held to Maturity		Available for Sale		Total		Held to Maturity		Available for Sale		Total
	(in thousands)
Marketable securities:
Corporate and other debt securities	$	62	$	8,415	$	8,477	$	65	$	9,947	$	10,012
Total marketable securities	$	62	$	8,415	$	8,477	$	65	$	9,947	$	10,012

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:

	December 31, 2018
	(in thousands)
Due within 1 year	$	8,415
Due in 1 year through 5 years		—
Total	$	8,415

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 December 31, 2018 and June 30, 2018, respectively, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:

	At December 31, 2018					At June 30, 2018
	Less than 12 Months
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
Government—U.S.	$	3,476	$	(3	)	$	6,480	$	(6	)
Total	$	3,476	$	(3	)	$	6,480	$	(6	)

Note 5—Acquisitions

Fiscal Year 2019 Acquisition

Microgen Banking Systems Limited

On July 2, 2018, we acquired Microgen Banking Systems Limited (Microgen), a UK-based BACS payment company, for 6.9 million British Pound Sterling (approximately $9.1 million based on the exchange rate in effect at the acquisition date). Microgen provides BACS payment products and supporting services to a wide range of UK-based customers and is expected to expand our customer base.

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In the preliminary allocation of the purchase price, we recorded $2.7 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 $8.4 million, consisting primarily of customer related assets, are being amortized over a weighted average estimated useful life of thirteen years. Microgen’s operating results are included in the Payments and Transactional Documents segment from the date of the acquisition forward and did not have a material impact on our revenue or net income (loss).

Acquisition expenses of approximately $0.2 million were expensed during the six months ended December 31, 2018 related to the Microgen acquisition, principally as a component of general and administrative expense.

Fiscal Year 2018 Acquisitions

During the fiscal year ended June 30, 2018, we completed two business acquisitions for an aggregate purchase consideration of $18.5 million.

First Capital Cashflow Ltd.

On October 4, 2017, we acquired First Capital Cashflow Ltd. (FCC) for 10.5 million British Pound Sterling (approximately $13.9 million based on the exchange rate in effect at the acquisition date) in cash and 42,080 shares of our common stock. The shares, which were issued to the selling stockholders of FCC who became employees of Bottomline, have vesting conditions tied to continued employment; as such the shares are compensatory and we will record share-based payment expense over the underlying stock vesting period of five years. FCC’s operating results are included in the Payments and Transactional Documents segment from the date of the acquisition forward and did not have a material impact on our revenue or net income (loss).

Decillion

On August 14, 2017, we acquired Singapore-based Decillion Group (Decillion) for total consideration of 6.2 million Singapore Dollars (approximately $4.6 million based on the exchange rate in effect at the acquisition date), consisting of $2.8 million in cash and a note payable of $1.8 million. The note is payable in equal installments over ten quarters starting during the three months ended September 30, 2017. Decillion’s operating results have been included in our Cloud Solutions segment from the date of the acquisition forward and did not have a material impact on our revenue or net income (loss).

Note 6—Net Income (Loss) Per Share

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

	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2017		2018		2017
	(in thousands, except per share amounts)
Numerator - basic and diluted:
Net income (loss)	$	5,969	$	3,088	$	5,051	$	(1,153	)
Denominator:
Shares used in computing basic net income (loss) per share attributable to common stockholders		40,635		38,087		40,162		37,908
Impact of dilutive securities		1,104		1,257		1,500		—
Shares used in computing diluted net income (loss) per share attributable to common stockholders		41,739		39,344		41,662		37,908
Basic net income (loss) per share attributable to common stockholders	$	0.15	$	0.08	$	0.13	$	(0.03	)
Diluted net income (loss) per share attributable to common stockholders	$	0.14	$	0.08	$	0.12	$	(0.03	)

For the six months ended December 31, 2017, approximately 2.8 million shares of unvested restricted stock and stock options and warrants for up to 6.3 million shares of our common stock 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 primarily with SaaS technology offerings that facilitate electronic payment, electronic invoicing, and spend management. Our legal spend management solutions, which enable customers to

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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 now sold predominantly on a hosted basis, with revenue recorded over time. This has the effect of contributing to recurring revenue and the revenue predictability of future periods, but results in revenue recognition over a longer period than a traditional on-premise software license transaction.

Payments and Transactional Documents. Our Payments and Transactional 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 operating segments. 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. 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. When licensed for on-premise deployment, software revenue for these operating segments is typically recorded upon delivery of the software and commencement of the license term. Professional services revenue is normally recorded as we perform the work and software support and maintenance revenue is recorded ratably over the support period.

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.

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Segment information for the three and six months ended December 31, 2018 and 2017 according to the segment descriptions above, is as follows:

	Three Months Ended December 31,						Six Months Ended December 31,
	2018			2017			2018			2017
	(in thousands)
Segment revenue:
Cloud Solutions	$	50,328		$	44,518		$	99,903		$	86,962
Banking Solutions		23,128			20,954			45,380			42,275
Payments and Transactional Documents		25,943			25,343			52,177			48,392
Other		5,447			4,380			9,823			8,862
Total segment revenue	$	104,846		$	95,195		$	207,283		$	186,491
Segment measure of profit (loss):
Cloud Solutions	$	10,742		$	9,650		$	21,034		$	19,034
Banking Solutions		1,953			1,148			4,015			3,309
Payments and Transactional Documents		7,785			7,734			15,866			14,094
Other		(461	)		(903	)		(1,474	)		(1,387	)
Total measure of segment profit	$	20,019		$	17,629		$	39,441		$	35,050

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

	Three Months Ended December 31,						Six Months Ended December 31,
	2018			2017			2018			2017
	(in thousands)
Total measure of segment profit	$	20,019		$	17,629		$	39,441		$	35,050
Less:
Amortization of acquisition-related intangible assets		(5,253	)		(5,702	)		(10,579	)		(10,890	)
Stock-based compensation plan expense		(9,549	)		(8,080	)		(21,891	)		(16,540	)
Acquisition and integration-related expenses		(710	)		(380	)		(1,593	)		(1,372	)
Restructuring benefit (expense)		(54	)		—			(631	)		9
Minimum pension liability adjustments		80			(3	)		155			(38	)
Global ERP system implementation and other costs		(972	)		(1,339	)		(2,553	)		(3,415	)
Other expense, net (1)		(1,111	)		(3,532	)		(2,151	)		(7,995	)
Income (loss) before income taxes	$	2,450		$	(1,407	)	$	198		$	(5,191	)

⁽¹⁾ On July 1, 2018, we adopted an accounting standard update that changes the classification of certain pension related items. For purposes of this reconciliation of segment profit, we have presented pension related adjustments discretely, not as a component of other expense, net.

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

	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2017		2018		2017
	(in thousands)
Depreciation and other amortization expense:
Cloud Solutions	$	2,880	$	2,535	$	5,809	$	4,978
Banking Solutions		1,859		1,537		3,715		3,029
Payments and Transactional Documents		725		705		1,483		1,344
Other		87		98		184		192
Total depreciation and other amortization expense	$	5,551	$	4,875	$	11,191	$	9,543

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; particularly in respect of financial institution customers located in Australia for which the point of sale was the United States.

	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2017		2018		2017
	(in thousands)
Revenues from unaffiliated customers:
United States	$	65,024	$	58,589	$	127,905	$	115,799
United Kingdom		24,004		22,468		48,371		42,539
Switzerland		9,614		9,148		19,607		18,533
Other		6,204		4,990		11,400		9,620
Total revenues from unaffiliated customers	$	104,846	$	95,195	$	207,283	$	186,491

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

	At December 31,		At June 30,
	2018		2018
	(in thousands)
Long-lived assets:
United States	$	46,505	$	36,374
United Kingdom		10,023		5,586
Other		4,867		3,488
Total long-lived assets	$	61,395	$	45,448

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

We recorded an income tax benefit of $3.5 million and $4.5 million for the three months ended December 31, 2018 and 2017, respectively. In the three months ended December 31, 2018, the income tax benefit we recorded was driven largely by discrete tax benefits of $3.3 million relating to stock-based compensation. The income tax benefit for the three months ended

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December 31, 2017 was principally due to a discrete tax benefit of $4.4 million relating to the consequences of the Tax Act (discussed below) and a tax benefit associated with our Swiss and Israeli operations, offset in part by tax expense associated with our U.S. and UK operations.

We recorded an income tax benefit of $4.9 million and $4.0 million for the six months ended December 31, 2018 and 2017, respectively. In the six months ended December 31, 2018 the income tax benefit we recorded was driven largely by discrete tax benefits of $4.0 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. The income tax benefit for the six months ended December 31, 2017 was principally due to a discrete tax benefit of $4.4 million relating to the consequences of the Tax Act (discussed below) and a tax benefit associated with our Swiss and Israeli operations, offset in part by tax expense associated with our U.S. and UK operations.

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 December 31, 2018, we had a total valuation allowance of $32.3 million against our deferred tax assets given the uncertainty of recoverability of these amounts. The change in our valuation allowance during the six months ended December 31, 2018 include the reduction in valuation allowance as a result of the adoption of the new accounting standard for revenue recognition.

U.S. Tax Cuts and Jobs Act

The U.S. Tax Cuts and Jobs Act (the Tax Act) was signed into U.S. law on December 22, 2017 and made broad and complex changes to the U.S. tax code. This legislation contained a variety of income tax changes, including a reduction to the federal corporate income tax rate from 35% to 21%, a repeal of the corporate alternative minimum tax, a one-time transition tax on accumulated foreign earnings, a move to a territorial tax system, a limitation on the tax deductibility of interest expense and an acceleration of tax deductions for qualifying capital expenditures.

The Tax Act resulted in four consequences to us in our prior fiscal year, as follows:

• Assessing whether we would incur any tax liability under the one-time transition tax. Under the Tax Act, un-repatriated foreign earnings post-1986 are subject to a one-time transition tax at rates that vary depending on the composition of foreign assets. We did not incur any transition tax liability due to our accumulated deficit position with respect to our foreign subsidiaries.

• Re-valuing our U.S. deferred tax balances to reflect lower income tax rates. Deferred tax assets and deferred tax liabilities are recorded based on the income tax rates expected to be in effect when book and tax basis differences reverse. We are in a net U.S. deferred tax liability position. During the fiscal year ended June 30, 2018 we reduced the carrying value of our net deferred tax liabilities to reflect the impact of lower future income tax rates and recognized a non-recurring income tax benefit of $3.7 million.

• Recognizing the ability to recover amounts paid for alternative minimum tax. The Tax Act eliminated the alternative minimum tax calculation and provided for the ability to recover certain amounts previously paid for such tax. We expect to receive a tax refund of $0.7 million and recognized a non-recurring income tax benefit in this amount in the fiscal year ended June 30, 2018.

• Reversal of indefinite-lived deferred tax liabilities as a source of future taxable income when assessing the realizability of indefinite-lived net operating loss carryforwards. Under the Tax Act, net operating loss carryforwards arising in tax years beginning after December 31, 2017 are limited to 80% of taxable income in any year, and net operating losses generated in tax years ending after December 31, 2017 can be carried forward indefinitely. Based on the projection of future reversals of our deferred tax differences as of June 30, 2018 we determined that a portion of our indefinite-lived deferred tax liabilities could be used as a source of taxable income when assessing the realizability of future indefinite-lived net operating loss carryforwards. Accordingly, we recognized an income tax benefit of $4.1 million through a reduction to our valuation allowance in the fiscal year ended June 30, 2018.

All of our accounting calculations and financial reporting positions for consequences arising from the Tax Act are final as of December 31, 2018.

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A provision of the Tax Act subjects a U.S. shareholder to current tax on “global intangible low-taxed income” (GILTI) of its controlled foreign corporations. We have elected to treat any tax related to GILTI as current tax expense in the period the tax is incurred.

The Tax Act also provides that the repatriation to the U.S. of foreign earnings can be done without federal tax consequence. During fiscal year 2018, as a result of the Tax Act provisions, we reassessed and changed our assertion that cumulative earnings by our UK and Switzerland subsidiaries were indefinitely reinvested. We continue to permanently reinvest the earnings, if any, of our international subsidiaries other than the UK and Switzerland and therefore we do not provide for U.S. income taxes or withholding taxes that could result from the distribution of those earnings to the U.S. parent. If any such earnings were ultimately distributed to the U.S. in the form of dividends or otherwise, or if the shares of our international subsidiaries were sold or transferred, we would likely be subject to additional U.S. state income taxes. It is not practicable to estimate the amount of unrecognized deferred U.S. taxes on these undistributed earnings.

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 December 31, 2018, the carrying value of goodwill for all of our reporting units was $200.8 million.

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

	As of December 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Weighted Average Remaining Life
	(in thousands)							(in years)
Amortized intangible assets:
Customer related	$	207,608	$	(138,800	)	$	68,808		8.4
Core technology		129,987		(86,373	)		43,614		7.8
Other intangible assets		21,954		(18,123	)		3,831		5.1
Capitalized software development costs		21,282		(7,946	)		13,336		3.5
Software (1)		68,153		(37,606	)		30,547		4.5
Total	$	448,984	$	(288,848	)	$	160,136
Unamortized intangible assets:
Goodwill							200,786
Total intangible assets						$	360,922

	As of June 30, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Weighted Average Remaining Life
	(in thousands)							(in years)
Amortized intangible assets:
Customer related	$	201,214	$	(134,133	)	$	67,081		8.4
Core technology		130,257		(82,815	)		47,442		8.1
Other intangible assets		21,983		(17,299	)		4,684		5.3
Capitalized software development costs		19,527		(6,265	)		13,262		4.0
Software (1)		62,711		(33,395	)		29,316		4.5
Total	$	435,692	$	(273,907	)	$	161,785
Unamortized intangible assets:
Goodwill							200,024
Total intangible assets						$	361,809

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

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Estimated amortization expense for the remainder of fiscal year 2019 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 December 31, 2018, is as follows:

	Acquired Intangible Assets		Capitalized Software Development Costs		Software
	(in thousands)
Remaining 2019	$	10,211	$	1,761	$	4,555
2020		18,428		3,521		7,944
2021		17,336		3,521		5,652
2022		15,222		3,521		4,061
2023		14,019		607		2,416
2024 and thereafter		41,037		77		2,686

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 Transactional Documents			Other		Total
	(in thousands)
Balance at June 30, 2018 (1)	$	90,270		$	35,880	$	65,680		$	8,194	$	200,024
Goodwill acquired during the period		—			—		2,651			—		2,651
Impact of foreign currency translation		(199	)		—		(1,690	)		—		(1,889	)
Balance at December 31, 2018 (1)	$	90,071		$	35,880	$	66,641		$	8,194	$	200,786

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

There can be no assurance that there will not be impairment charges in future periods as a result of future impairment reviews. To the extent that future impairment charges occur, it would likely have a material impact on our financial results.

Note 10—Commitments and Contingencies

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.

Restructuring

During the three and six months ended December 31, 2018 we recorded restructuring expenses associated with a facility exit of $0.1 million and $0.6 million, respectively, primarily within our general and administrative expense line.

Note 11—Indebtedness

Credit Agreement

We are party to a credit agreement (the Credit Agreement) that provides for a five-year revolving credit facility in the amount of up to $300 million (the Credit Facility), which was amended on July 16, 2018. We also have the right to request an increase of the aggregate commitments under the Credit Facility by up to $150 million, subject to specified conditions. The Credit Facility expires in July 2023. During the six months ended December 31, 2018, we used $40.0 million of cash on hand to pay down a portion of our borrowings due under the Credit Facility and at December 31, 2018 we owed $110 million.

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 December 31, 2018, we were in compliance with the covenants associated with the Credit Facility.

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Warrants

In December 2012, we received aggregate proceeds of $25.8 million, net of issue costs, from the sale of warrants for the purchase of up to 6.3 million shares of our common stock at a strike price of $40.04 per share. The warrants were exercisable in equal tranches over a period of 150 days beginning on March 1, 2018 and ending on October 2, 2018. Each warrant was exercisable into one share of our common stock. During the six months ended December 31, 2018, we issued approximately 932 thousand shares of common stock related to the warrants exercised by the holders and all warrant exercises were net settled. There were no warrants outstanding as of December 31, 2018.

Note Payable

We financed a portion of the purchase price for our acquisition of Decillion by entering into a note payable for 2.5 million Singapore Dollars (approximately $1.8 million based on the exchange rate in effect at the acquisition date). The note is payable in equal installments over ten quarters, with the final installment due in the quarter ended December 31, 2019.

Note 12—Derivative Instruments

Cash Flow Hedges

Interest Rate Swap

In July 2017, we entered into an interest rate swap to hedge our exposure to interest rate risk. The agreement has a notional value of $100.0 million, was effective as of December 1, 2017 and expires on December 1, 2021. The notional amount of the swap matches the corresponding principal amount of a portion of our borrowings under the Credit Facility. During the term of the agreement, we have a fixed interest rate of 1.9275 percent on the notional amount 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.

We designated the interest rate swap as a hedging instrument and it qualified for hedge accounting upon inception and at December 31, 2018. To continue to qualify for hedge accounting, the instrument 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 swap and their respective locations in our consolidated balance sheets at December 31, 2018 and June 30, 2018 were as follows:

Description	Balance Sheet Location	December 31, 2018		June 30, 2018
		(in thousands)
Derivative interest rate swap
Short-term derivative asset	Prepaid expenses and other current assets	$	562	$	407
Long-term derivative asset	Other assets	$	917	$	2,183

The following tables present the effect of our derivative interest rate swap and related tax effects in AOCI for the six months ended December 31, 2018 and 2017.

	June 30, 2018		Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)			Amount of Gain (Loss) Reclassified from AOCI into Net Income (Loss) (Effective Portion) (1)			Income Tax Benefit (Provision) in OCI on Derivative Instruments			December 31, 2018
	(in thousands)
Derivative interest rate swap	$	2,590	$	(974	)	$	137		$	—		$	1,479
	June 30, 2017		Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)			Amount of Gain (Loss) Reclassified from AOCI into Net Income (Loss) (Effective Portion) (1)			Income Tax Benefit (Provision) in OCI on Derivative Instruments			December 31, 2017
	(in thousands)
Derivative interest rate swap	$	—	$	569		$	(48	)	$	(248	)	$	369

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

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During the three and six months ended December 31, 2018, we concluded that no portion of the hedge was ineffective.

As of December 31, 2018, there was $1.5 million of unrealized gain in accumulated other comprehensive loss. We expect to reclassify approximately $0.6 million of this unrealized gain from accumulated other comprehensive loss 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 December 31,						Six Months Ended December 31,
	2018			2017			2018			2017
	(in thousands)
Components of net periodic cost
Service cost	$	630		$	624		$	1,275		$	1,264
Interest cost		114			87			230			176
Prior service credit		(77	)		(22	)		(155	)		(45	)
Net actuarial loss		54			54			110			109
Expected return on plan assets		(345	)		(294	)		(698	)		(595	)
Net periodic cost	$	376		$	449		$	762		$	909

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

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Note 14—Subsequent Events

In January 2019, we purchased a building in Reading, UK for 16 million British Pound Sterling (approximately $20.7 million based on exchange rates in effect at the purchase date), funded with existing cash on hand. The building will replace our current Reading, UK building as our European headquarters.

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 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 Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018.

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 cloud-based settlement networks that facilitate electronic payments and transaction settlement between businesses, their vendors and banks. We offer cloud and on-premise 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. Our cloud-based 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. 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. Our healthcare customers use our solutions to streamline financial processes, particularly the patient enrollment process. 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 installation, training, consulting and product enhancement.

Financial Highlights

The discussion that follows compares our operating results for the three and six months ending December 31, 2018 to the three and six month ending December 31, 2017. We adopted a new revenue recognition standard on July 1, 2018 and, in accordance with the method of adoption, did not recast prior period information. The new revenue standard has generally resulted in a modest reduction of subscription and transaction and services and maintenance revenue, while increasing software license revenue, for the three and six month periods ending December 31, 2018 as compared to the respective prior periods. The new revenue standard requires the capitalization of certain costs incurred to fulfill or obtain contracts, which prior to adoption were expensed as incurred. Accordingly, this has resulted in a modest reduction to cost of revenues and operating expenses for the three and six month periods ending December 31, 2018 as compared to the respective prior periods. Please refer to Note 3 Revenue Recognition to our unaudited consolidated financial statements included in this Form 10-Q for a detailed reconciliation of the impact of the adoption of this standard on our operating results.

For the six months ended December 31, 2018, our revenue increased to $207.3 million from $186.5 million in the same period of the prior fiscal year. Our revenue for the six months ended December 31, 2018 was unfavorably impacted by $1.3 million due to the impact of foreign currency exchange rates primarily related to the Swiss Franc and British Pound Sterling, both of which depreciated against the U.S. Dollar as compared to the same period of the prior fiscal year. The revenue increase was attributable to revenue increases in our Cloud Solutions segment of $12.9 million, our Payments and Transactional Documents segment of $3.8

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million and our Banking Solutions segment of $3.1 million. Increased revenue from our legal spend management and our Paymode-X and financial messaging settlement network solutions accounted for the revenue increase in our Cloud Solutions segment. The revenue increase in our Payments and Transactional Documents segment was related to higher European subscriptions and transactions revenue in our payment products. The Banking Solutions segment’s revenue increase was primarily due to new customer engagements and platform go-lives, as customers continued to deploy our solutions.

Net income was $5.1 million in the six months ended December 31, 2018 compared to a net loss of $1.2 million in the same period of the prior fiscal year. Our net income for the six months ended December 31, 2018 was favorably impacted by gross profit expansion of $12.4 million, a reduction in other expense, net of $6.0 million, due to decreases in the amortization of debt discount costs and an increase in income tax benefit of $0.8 million. These improvements were partially offset by an increase in operating expenses of $13.0 million as we continued to grow our business. The increase in gross margins was driven by increases in revenue in our Cloud Solutions, Payments and Transactional Documents and Banking Solutions segments. The increase in operating expenses was primarily driven by increased product development and engineering costs of $5.6 million as we continued to invest in new product innovation, increased sales and marketing costs of $4.8 million and increased general and administrative costs of $2.9 million.

In the six months ended December 31, 2018, we derived approximately 38% of our revenue from customers located outside of North America, principally in the United Kingdom, continental Europe and the Asia-Pacific region.

We expect future revenue growth to be driven primarily by our banking and cloud solutions.

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.

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, 2018 related to revenue recognition, the valuation of goodwill and intangible assets, the valuation of acquired deferred revenue and income taxes. With the exception of revenue recognition, which is discussed further below, there have been no material changes to the critical accounting policies from those we disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018.

Effective July 1, 2018 we adopted a new accounting standard related to revenue recognition on a modified retrospective basis. The cumulative effect of initially applying the new revenue recognition standard was recorded as an adjustment to our accumulated deficit balance as of July 1, 2018. Our consolidated balance sheet, consolidated statement of comprehensive income (loss) and our consolidated statement of cash flows reflect the adoption of the new standard for all periods subsequent to the adoption date, however financial statements for periods prior to the adoption date have not been revised. The notes to our financial statements include a reconciliation of the adjustments recorded to our current period financial statements to comply with the new standard and the amounts that would have been reflected in our financial statements under the prior revenue recognition framework.

Revenue Recognition Framework

The new revenue standard applies to all customer contracts and requires that revenue be recognized upon the transfer of control of the product or service to the customer at an amount that reflects an appropriate allocation of the total transaction price. Broadly, revenues are recognized according to the following five step model:

• Identifying the contract (or contracts) with a customer;

• Identifying the performance obligations in the contract;

• Determining the transaction price;

• Allocating the transaction price to the contractual performance obligations; and

• Recognizing revenue as performance obligations are satisfied.

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Our customer contracts can take a variety of forms but normally are in writing and include all major commercial terms, promised goods and services and the selling price. Our contracts often include multiple promised goods or services that we evaluate to determine if they represent distinct performance obligations. Our performance obligations vary based on the nature of the promised goods or services but commonly consist of:

• Software licensed on either a perpetual or term-license basis;

• Professional services;

• Support and maintenance services; and

• “Stand-ready” obligations to perform in respect of technology solutions we provide under a hosted or SaaS contract.

The transaction price represents the amount of consideration that we expect to be entitled to receive under the contract. It includes the impact of variable consideration such as refunds, penalties, usage-based fees or similar items. We estimate and include variable consideration in the transaction price if we conclude that a significant future reversal of revenue under the contract will not occur. Estimating the amount of variable consideration to include in the transaction price involves significant estimation and is discussed further below.

The transaction price is allocated to the individual performance obligations in a contract. If a contract only has one performance obligation (for example, a professional services only engagement) the entire transaction price is allocated to that performance obligation. For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation based on the proportionate relationship of that performance obligation’s standalone selling price to the total transaction price. Determining standalone selling price involves significant judgment and estimation. In most cases we use an adjusted market assessment approach to estimate standalone selling price and consider the following:

• The price we charge when we sell that item separately;

• Internal price lists and internal pricing guidelines;

• Cost of delivering the item and overall gross margin expectations; and

• Information about the customer or class of customer.

Revenue is recognized for each performance obligation as we satisfy the obligation. Performance obligations are satisfied either over time or at a point in time. Our perpetual license and term license obligations that do not include significant customization are normally satisfied at a point in time. Our professional services, support and maintenance, stand-ready performance obligations with respect to our hosted or SaaS solutions and software licenses dependent on significant customization by us are normally satisfied over time.

Deferred Costs

Under the new revenue standard, certain costs that we historically expensed as incurred are now required to be capitalized. Costs capitalized can relate to either costs to fulfill a contract or costs to obtain a contract.

We capitalize costs incurred to fulfill a contract when the costs relate directly to a specifically identifiable customer contract, when the costs generate or enhance the resources that we will use to satisfy performance obligations in the future and when we estimate that we will recover the costs through future revenues under the contract.

Costs incurred to obtain a contract are those incremental costs that would not have been incurred if the contract had not been obtained, such as sales commissions. We capitalize sales commissions when we estimate that the capitalized amounts will be recovered through future revenues under the contract and the period of benefit is longer than twelve months.

Any costs that we capitalize are amortized to expense over the period during which we expect to transfer the specific goods or services to the customer, including the impact of any estimated renewal periods.

Significant Judgments

There are several aspects of the revenue recognition standard that require us to exercise significant judgment or estimation.

Standalone selling price. The determination of standalone selling price considers several factors. In establishing standalone selling price, we maximize the use of observable inputs such as the price actually charged when we sell the good or service separately, internal pricing policies or pricing goals, information specific to the customer or class of customer and overall market conditions. Maximizing the use of observable inputs helps ensure that our estimation process considers all relevant data points necessary to obtain a reasonable outcome.

Identifying performance obligations. Identifying the performance obligations in a contract may require significant judgment. An individual good or service is accounted for as a separate performance obligation if it is distinct. A performance obligation is considered to be distinct if it is separately identifiable from other items in the contract and a customer can benefit from the good or service on its own. In determining whether a customer can benefit from a good or service on its own, we consider the complexity of any required integration or customization, the interdependency and interrelationship of the particular good or service to other items in the contract and the ability (or inability) of the customer’s personnel or other third party providers to successfully fulfill like goods or services. If we are unable to conclude that a promised good or service meets the criteria for a separate performance obligation it is combined with other items in the contract and treated as a combined performance obligation. Revenue is then recognized in the amount of the transaction price allocated to the combined performance obligation as the combined performance obligation is transferred to the customer.

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Estimating variable consideration. As part of estimating the total transaction price, we estimate the total consideration we expect to be entitled to under the contract. In circumstances where the transaction price is confined to a fixed overall contract price, the estimate of the total transaction price is normally straightforward. However, we have contracts where the estimate of total contract price can vary, particularly due to the impact of variable consideration such as usage based fees. Unless we meet certain exceptions, we are required to estimate the amount of variable consideration we expect to receive under the contract. In formulating this estimate, we consider the specific customer’s operating history with us, current usage data and the length of time over which the variable fees are expected to be incurred. We include an estimate of variable consideration in the transaction price if we conclude that a significant future reversal of revenue under the contract will not occur.

Amortization of capitalized costs. Costs incurred to fulfill a contract and costs incurred to obtain a contract are capitalized according to the framework discussed above. These costs are amortized on a straight-line basis over the estimated future period during which we expect to derive benefit from the contract. Estimating the future period of benefit involves judgment. We estimate the future period of benefit after considering a number of factors including the current contract term, the impact of estimated customer renewal terms and the estimated life of the technology solution underlying the contract. We estimate our future period of benefits for capitalized costs to be approximately five years.

It is important that the discussion of our operating results that follows be read in conjunction with the critical accounting policies disclosed in our Annual Report on Form 10-K, as filed with the SEC on August 29, 2018, 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 Item 1 of this Quarterly Report on Form 10-Q.

Results of Operations

Three and Six Months Ended December 31, 2018 Compared to the Three and Six Months Ended December 31, 2017

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 Transactional Documents and Other.

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

	Three Months Ended December 31,						Increase (Decrease) Between Periods					Six Months Ended December 31,						Increase (Decrease) Between Periods
	2018			2017			$ Change Inc (Dec)		% Change Inc (Dec)			2018			2017			$ Change Inc (Dec)			% Change Inc (Dec)
	(Dollars in thousands)
Segment revenue:
Cloud Solutions	$	50,328		$	44,518		$	5,810		13.1	%	$	99,903		$	86,962		$	12,941			14.9	%
Banking Solutions		23,128			20,954			2,174		10.4	%		45,380			42,275			3,105			7.3	%
Payments and Transactional Documents		25,943			25,343			600		2.4	%		52,177			48,392			3,785			7.8	%
Other		5,447			4,380			1,067		24.4	%		9,823			8,862			961			10.8	%
Total segment revenue	$	104,846		$	95,195		$	9,651		10.1	%	$	207,283		$	186,491		$	20,792			11.1	%
Segment measure of profit (loss):
Cloud Solutions	$	10,742		$	9,650		$	1,092		11.3	%	$	21,034		$	19,034		$	2,000			10.5	%
Banking Solutions		1,953			1,148			805		70.1	%		4,015			3,309			706			21.3	%
Payments and Transactional Documents		7,785			7,734			51		0.7	%		15,866			14,094			1,772			12.6	%
Other		(461	)		(903	)		442		48.9	%		(1,474	)		(1,387	)		(87	)		(6.3	)%
Total measure of segment profit	$	20,019		$	17,629		$	2,390		13.6	%	$	39,441		$	35,050		$	4,391			12.5	%

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

	Three Months Ended December 31,						Six Months Ended December 31,
	2018			2017			2018			2017
	(in thousands)
Total measure of segment profit	$	20,019		$	17,629		$	39,441		$	35,050
Less:
Amortization of acquisition-related intangible assets		(5,253	)		(5,702	)		(10,579	)		(10,890	)
Stock-based compensation plan expense		(9,549	)		(8,080	)		(21,891	)		(16,540	)
Acquisition and integration-related expenses		(710	)		(380	)		(1,593	)		(1,372	)
Restructuring benefit (expense)		(54	)		—			(631	)		9
Minimum pension liability adjustments		80			(3	)		155			(38	)
Global ERP system implementation and other costs		(972	)		(1,339	)		(2,553	)		(3,415	)
Other expense, net		(1,111	)		(3,532	)		(2,151	)		(7,995	)
Income (loss) before income taxes	$	2,450		$	(1,407	)	$	198		$	(5,191	)

Cloud Solutions

Revenues from our Cloud Solutions segment increased $5.8 million for the three months ended December 31, 2018 as compared to the same period in the prior fiscal year, due to increased revenue of $2.7 million from our settlement network solutions and $3.1 million from our legal spend management solutions. Segment profit increased $1.1 million for the three months ended December 31, 2018 as compared to the same period in the prior fiscal year, due primarily to the revenue increase described above, partially offset by increased cost of revenues of $2.1 million and increased operating expenses of $2.6 million related to increased sales and marketing and product development and engineering costs.

Revenues from our Cloud Solutions segment increased $12.9 million for the six months ended December 31, 2018 as compared to the same period in the prior fiscal year, due to increased revenue of $6.9 million from our settlement network solutions and $6.0 million from our legal spend management solutions. Segment profit increased $2.0 million for the six months ended December 31, 2018 as compared to the same period in the prior fiscal year, due to the revenue increase described above, partially offset by increased cost of revenues of $5.2 million and increased operating expenses of $5.8 million primarily related to increased sales and marketing and product development and engineering costs. We expect revenue and profit for the Cloud Solutions segment to increase in fiscal year 2019 as compared to the prior fiscal year as a result of increased revenue from our legal spend management and our Paymode-X and financial messaging settlement network solutions.

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Banking Solutions

Revenues from our Banking Solutions segment increased $2.2 million for the three months ended December 31, 2018 as compared to the same period in the prior fiscal year, due to increased software license revenue of $2.0 million and subscriptions and transactions revenue of $1.0 million, partially offset by decreased service and maintenance revenue of $0.8 million. The increase in software license revenue was related, in part, to the impact of the new revenue standard we adopted on July 1, 2018. Segment profit increased $0.8 million for the three months ended December 31, 2018 as compared to the same period in the prior fiscal year, due to the revenue increase described above, partially offset by increased operating expenses and cost of revenues of $0.7 million and $0.6 million, respectively.

Revenues from our Banking Solutions segment increased $3.1 million for the six months ended December 31, 2018 as compared to the same period in the prior fiscal year, due to increased software license revenue of $3.4 million and subscriptions and transactions revenue of $0.9 million, partially offset by decreased service and maintenance revenue of $1.2 million. The increase in software license revenue was related, in part, to the impact of the new revenue standard we adopted on July 1, 2018. Segment profit increased $0.7 million for the six months ended December 31, 2018 as compared to the same period in the prior fiscal year, due primarily to the increased revenue described above, partially offset by increased product development and engineering costs. We expect revenue and profit for the Banking Solutions segment to continue to increase in fiscal year 2019 as compared to the prior fiscal year as new customers go live with our hosted platform.

Payments and Transactional Documents

Revenues from our Payments and Transactional Documents segment increased $0.6 million for the three months ended December 31, 2018 as compared to the same period in the prior fiscal year, due primarily to increased subscription and transactions revenue of $2.6 million from our European payments and transactional documents solutions, due in part to the impact of recent acquisitions, partially offset by decreased service and maintenance revenue of $1.2 million and decreased software license revenue of $0.6 million. Segment profit increased $0.1 million for the three months ended December 31, 2018, 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 $0.5 million, primarily related to product development and engineering costs.

Revenues from our Payments and Transactional Documents segment increased $3.8 million for the six months ended December 31, 2018 as compared to the same period in the prior fiscal year, due primarily to increased subscriptions and transactions revenue of $6.2 million from our European payments and transactional documents solutions, due in part to the impact of recent acquisitions, partially offset by decreased service and maintenance revenue of $2.0 million and decreased software license revenue of $0.1 million. Segment profit increased $1.8 million for the six months ended December 31, 2018 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 $1.8 million primarily related to increased product development and engineering costs. We expect revenue for the Payments and Transactional Documents segment to increase and profit to remain relatively consistent in fiscal year 2019 as compared to the prior fiscal year, as a result of increased sales of our payment and document automation solutions.

Other

Revenues from our Other segment increased $1.1 million and $1.0 million for the three and six months ended December 31, 2018, respectively, as compared to the same periods in the prior fiscal year, due primarily to increased software license revenue. Segment profit increased $0.4 million for the three months ended December 31, 2018 and remained relatively consistent for the six months ended December 31, 2018, as compared to the same periods in the prior fiscal year. We expect Other segment revenue and profit to increase slightly in fiscal year 2019 as compared to the prior fiscal year, principally as the result of increased sales of our cyber fraud and risk management products, offset in part by increased operating expenses.

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Revenues by category

	Three Months Ended December 31,						Increase (Decrease) Between Periods						Six Months Ended December 31,						Increase (Decrease) Between Periods
	2018			2017			$ Change Inc (Dec)			% Change Inc (Dec)			2018			2017			$ Change Inc (Dec)			% Change Inc (Dec)
	(Dollars in thousands)
Revenues:
Subscriptions and transactions	$	71,288		$	63,187		$	8,101			12.8	%	$	141,056		$	123,901		$	17,155			13.8	%
Software licenses		5,665			2,620			3,045			116.2	%		10,177			4,985			5,192			104.2	%
Service and maintenance		26,786			28,433			(1,647	)		(5.8	)%		54,191			55,775			(1,584	)		(2.8	)%
Other		1,107			955			152			15.9	%		1,859			1,830			29			1.6	%
Total revenues	$	104,846		$	95,195		$	9,651			10.1	%	$	207,283		$	186,491		$	20,792			11.1	%
As % of total revenues:
Subscriptions and transactions		68.0	%		66.4	%								68.1	%		66.4	%
Software licenses		5.4	%		2.8	%								4.9	%		2.7	%
Service and maintenance		25.5	%		29.9	%								26.1	%		29.9	%
Other		1.1	%		0.9	%								0.9	%		1.0	%
Total revenues		100.0	%		100.0	%								100.0	%		100.0	%

Subscriptions and Transactions

Revenues from subscriptions and transactions increased $8.1 million for the three months ended December 31, 2018 as compared to the same period in the prior fiscal year. The overall revenue increase was due principally to increases in revenue from our Cloud Solutions segment and Payments and Transactional Documents segment of $5.2 million and $2.6 million, respectively, due in part to the impact of recent acquisitions.

Revenues from subscriptions and transactions increased $17.2 million for the six months ended December 31, 2018 as compared to the same period in the prior fiscal year. The overall revenue increase was due principally to increases in revenue from our Cloud Solutions segment and Payments and Transactional Documents segment of $10.8 million and $6.2 million, respectively, due in part to the impact of recent acquisitions. We expect subscriptions and transactions revenues to continue to increase in fiscal year 2019 as compared to the prior fiscal year, primarily as a result of the revenue contribution from our legal spend management solutions, our Paymode-X and financial messaging settlement network solutions and continued revenue increases in our Banking Solutions segment.

Software Licenses

Revenues from software licenses increased $3.0 million for the three months ended December 31, 2018 as compared to the same period in the prior fiscal year, primarily as a result of increased revenue from our Banking Solutions segment and Other segment of $2.0 million and $1.4 million, respectively. The increase in revenue is due in part from our adoption of the new revenue standard on July 1, 2018 which results in revenue recognition sooner for certain arrangements for which revenue recognition was delayed under legacy GAAP, such as when vendor specific evidence of fair value could not be established. In addition, the change in methodology for allocation of the transaction price between performance obligations had the impact of increasing software revenue.

Revenues from software licenses increased $5.2 million for the six months ended December 31, 2018 as compared to the same period in the prior fiscal year, primarily as a result of increased revenue from our Banking Solutions segment and Other segment of $3.4 million and $1.1 million, respectively. We expect software license revenues to increase in fiscal year 2019 as compared to the prior fiscal year, primarily as a result of revenue contribution from our Banking Solutions segment and Payments and Transactional Documents segment. The increase in revenue is due in part from our adoption of the new revenue standard on July 1, 2018 which results in revenue recognition sooner for certain arrangements for which revenue recognition was delayed under legacy GAAP, such as when vendor specific evidence of fair value could not be established. In addition, the change in methodology for allocation of the transaction price between performance obligations had the impact of increasing software revenue.

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Service and Maintenance

Revenues from service and maintenance decreased $1.6 million for the three months ended December 31, 2018 as compared to the same period in the prior fiscal year. The overall revenue decrease was due principally to decreases in revenue from our Payments and Transactional Documents segment of $1.2 million and Banking Solutions segment of $0.8 million, partially offset by increased revenue from our Cloud Solutions segment of $0.4 million.

Revenues from service and maintenance decreased $1.6 million for the six months ended December 31, 2018 as compared to the same period in the prior fiscal year. The overall revenue decrease was due principally to decreases in revenue from our Payments and Transactional Documents segment of $2.0 million and Banking Solutions segment of $1.2 million, partially offset by increased revenue from our Cloud Solutions segment and Other segment of $1.3 million and $0.4 million, respectively. We expect service and maintenance revenues will decrease slightly in fiscal year 2019 as compared to the prior fiscal year, as a result of decreased services revenue from our Banking Solutions segment, primarily due to the continued impact of customers transitioning from on-premise to SaaS-based solutions.

Other

Our other revenues consist principally of equipment and supplies sales, which remained minor components of our overall revenue. We expect that other revenues will decrease in fiscal year 2019 as compared to the prior fiscal year, due to the absence of a one-time revenue transaction recorded in the fourth quarter of fiscal year 2018.

Cost of revenues by category

	Three Months Ended December 31,						Increase (Decrease) Between Periods						Six Months Ended December 31,						Increase (Decrease) Between Periods
	2018			2017			$ Change Inc (Dec)			% Change Inc (Dec)			2018			2017			$ Change Inc (Dec)			% Change Inc (Dec)
	(Dollars in thousands)
Cost of revenues:
Subscriptions and transactions	$	31,352		$	27,211		$	4,141			15.2	%	$	63,021		$	54,633		$	8,388			15.4	%
Software licenses		210			229			(19	)		(8.3	)%		441			399			42			10.5	%
Service and maintenance		12,528			13,034			(506	)		(3.9	)%		25,234			25,334			(100	)		(0.4	)%
Other		891			701			190			27.1	%		1,415			1,368			47			3.4	%
Total cost of revenues	$	44,981		$	41,175		$	3,806			9.2	%	$	90,111		$	81,734		$	8,377			10.2	%
Gross Profit ($)	$	59,865		$	54,020		$	5,845			10.8	%	$	117,172		$	104,757		$	12,415			11.9	%
Gross Profit (%)		57.1	%		56.7	%								56.5	%		56.2	%

Subscriptions and Transactions

Subscriptions and transactions 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 and transactions costs remained relatively consistent at 44% of subscriptions and transactions revenues in the three months ended December 31, 2018 as compared to 43% of subscriptions and transactions revenues in the three months ended December 31, 2017.

Subscriptions and transactions costs remained consistent at 45% of subscription and transactions revenues in each of the six months ended December 31, 2018 and 2017. We expect subscriptions and transactions costs as a percentage of subscriptions and transactions revenues will decrease slightly in fiscal year 2019 as a result of increased revenue contribution from our cloud-based banking and legal spend management.

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 decreased slightly to 4% of software license revenues in the three months ended December 31, 2018 as compared to 9% of software license revenues in the three months ended December 31, 2017. Costs decreased as a percentage of revenue due to increased software license sales which contained minimal third party costs.

Software license costs decreased slightly to 4% of software license revenues in the six months ended December 31, 2018 as compared to 8% of software license revenues in the six months ended December 31, 2017. Costs decreased as a percentage of revenue due to increased software license sales which contained minimal third party costs. We expect that software license costs as a percentage of software license revenues will decrease in fiscal year 2019 as compared to the prior fiscal year primarily due to increased revenue in our Banking Solutions segment.

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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 remained consistent at 47% of service and maintenance revenues in the three months ended December 31, 2018 as compared to 46% of service and maintenance revenues in the three months ended December 31, 2017.

Service and maintenance costs remained consistent at 47% of service and maintenance revenues in the six months ended December 31, 2018 as compared to 45% of service and maintenance revenues in the six months ended December 31, 2017. We expect that service and maintenance costs as a percentage of service and maintenance revenues will continue to increase slightly in fiscal year 2019 as compared to the prior fiscal year, as we continue the implementation phases of certain customers in our Banking Solutions segment.

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. We expect that other costs as a percentage of other revenues will increase in fiscal year 2019 as compared to the prior fiscal year, due to the absence of a one-time revenue transaction recorded in the fourth quarter of fiscal year 2018.

Operating Expenses

	Three Months Ended December 31,						Increase (Decrease) Between Periods						Six Months Ended December 31,						Increase (Decrease) Between Periods
	2018			2017			$ Change Inc (Dec)			% Change Inc (Dec)			2018			2017			$ Change Inc (Dec)			% Change Inc (Dec)
	(Dollars in thousands)
Operating expenses:
Sales and marketing	$	22,585		$	21,441		$	1,144			5.3	%	$	45,607		$	40,790		$	4,817			11.8	%
Product development and engineering		16,815			13,938			2,877			20.6	%		33,380			27,802			5,578			20.1	%
General and administrative		11,904			10,989			915			8.3	%		25,769			22,826			2,943			12.9	%
Amortization of acquisition-related intangible assets		5,253			5,702			(449	)		(7.9	)%		10,579			10,890			(311	)		(2.9	)%
Total operating expenses	$	56,557		$	52,070		$	4,487			8.6	%	$	115,335		$	102,308		$	13,027			12.7	%
As % of total revenues:
Sales and marketing		21.5	%		22.5	%								22.0	%		21.9	%
Product development and engineering		16.0	%		14.6	%								16.1	%		14.9	%
General and administrative		11.4	%		11.6	%								12.4	%		12.3	%
Amortization of acquisition-related intangible assets		5.0	%		6.0	%								5.1	%		5.8	%
Total operating expenses		53.9	%		54.7	%								55.6	%		54.9	%

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 December 31, 2018 as compared to the three months ended December 31, 2017 due primarily to an increase in employee related costs of $0.9 million, incurred to support our continued revenue growth.

Sales and marketing expenses increased in the six months ended December 31, 2018 as compared to the six months ended December 31, 2017 due primarily to an increase in employee related costs of $4.3 million, incurred to support our continued revenue growth. We expect sales and marketing expenses as a percentage of total revenue will remain relatively consistent in fiscal year 2019 as compared to the prior fiscal year.

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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 based on customer feedback and general marketplace demands. Product development and engineering expenses in the three and six months ended December 31, 2018 as compared to the three and six months ended December 31, 2017 increased principally as a result of an increase in headcount related costs as we continued to invest in the deployment of innovative, feature-rich products. We expect product development and engineering expenses as a percentage of total revenues will increase slightly in fiscal year 2019 as compared to the prior fiscal year.

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 December 31, 2018 as compared to the three months ended December 31, 2017 due primarily to increased employee related costs of $0.9 million.

General and administrative expenses increased in the six months ended December 31, 2018 as compared to the six months ended December 31, 2017 due primarily to increased employee related costs of $3.3 million and restructuring costs related to a facility exit of $0.6 million, partially offset by decreased global enterprise resource planning (ERP) implementation and other costs of $0.9 million. We expect general and administrative expenses as a percentage of total revenues will remain relatively consistent in fiscal year 2019 as compared to the prior fiscal year.

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 six months ended December 31, 2018 as compared to the three and six months ended December 31, 2017 occurred as a result of the impact of amortization of intangible assets from our business acquisitions during fiscal year 2018 and the three and six months ended December 31, 2018. We expect that total amortization expense for acquired intangible assets for the remainder of fiscal year 2019 will be approximately $10.2 million.

Other Expense, Net

	Three Months Ended December 31,						Increase (Decrease) Between Periods						Six Months Ended December 31,						Increase (Decrease) Between Periods
	2018			2017			$ Change Inc (Dec)			% Change Inc (Dec)			2018			2017			$ Change Inc (Dec)			% Change Inc (Dec)
	(Dollars in thousands)
Interest income	$	144		$	63		$	81			128.6	%	$	278		$	117		$	161			137.6	%
Interest expense		(934	)		(3,668	)		2,734			74.5	%		(2,055	)		(8,257	)		6,202			75.1	%
Other (expense) income, net		(68	)		248			(316	)		(127.4	)%		138			500			(362	)		(72.4	)%
Other expense, net	$	(858	)	$	(3,357	)	$	2,499			74.4	%	$	(1,639	)	$	(7,640	)	$	6,001			78.5	%

Other expense, net decreased $2.5 million for the three months ended December 31, 2018 and $6.0 million for the six months ended December 31, 2018 as compared to the same periods in the prior fiscal year, respectively, primarily due to decreases in the amortization of debt discount costs upon the maturity of our convertible senior notes in December 2017.

Provision for Income Taxes

We recorded an income tax benefit of $3.5 million and $4.5 million for the three months ended December 31, 2018 and 2017, respectively. We recorded an income tax benefit of $4.9 million and $4.0 million for the six months ended December 31, 2018 and 2017, respectively. Please refer to Note 8 Income Taxes to our unaudited consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for further discussion.

Liquidity and Capital Resources

We are party to a credit agreement which provides for a five-year revolving credit facility in the amount of up to $300 million (the Credit Facility). We also have the right to request an increase to the aggregate commitments to the Credit Facility of up to $190 million, subject to specified conditions. The Credit Facility expires in July, 2023. During the six months ended December 31, 2018, we used $40.0 million of cash on hand to pay down a portion of the borrowings under our Credit Facility. At December 31, 2018, borrowings were $110 million and we were in compliance with all covenants associated with the Credit Facility.

35

During the six months ended December 31, 2018, warrant holders exercised warrants for approximately 932 thousand shares of our common stock and we issued shares of common stock in the same amount. All of the warrant exercises were net settled and there were no warrants outstanding as of December 31, 2018.

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. Accordingly, 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 six months ended December 31, 2018 and 2017 are summarized in the tables below:

	December 31,		June 30,
	2018		2018
	(in thousands)
Cash and cash equivalents	$	87,639	$	121,860
Marketable securities		8,477		10,012
Borrowings under credit facility		110,000		150,000

	Six Months Ended December 31,
	2018			2017
	(in thousands)
Cash provided by operating activities	$	33,249		$	5,100
Cash used in investing activities		(23,874	)		(22,900	)
Cash used in financing activities		(39,044	)		(40,249	)
Effect of exchange rates on cash		(1,923	)		1,012

Cash, cash equivalents and marketable securities. At December 31, 2018, our cash and cash equivalents of $87.6 million consisted primarily of cash deposits held at major banks and money market funds. The $34.2 million decrease in cash and cash equivalents at December 31, 2018 from June 30, 2018 was primarily due to cash used for the repayment of amounts borrowed under the Credit Facility of $40.0 million, cash used to fund business acquisitions, net of cash acquired, of $8.9 million and capital expenditures, including capitalization of software costs of $17.0 million, partially offset by cash generated from operations of $33.2 million.

Cash, cash equivalents and marketable securities included approximately $58.3 million held by our foreign subsidiaries as of December 31, 2018. During the three months ended September 30, 2018, we repatriated $20.8 million from our UK subsidiary. We continue to permanently reinvest the earnings, if any, of our international subsidiaries other than the UK and Switzerland 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 and Switzerland. If our reinvestment plans changed based on future events and we decided to repatriate amounts from our international subsidiaries other than the UK and Switzerland 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 $1.9 million for the six months ended December 31, 2018. 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 impairment charges 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 $28.1 million in the six months ended December 31, 2018 versus the same period in the prior fiscal year. The increase was primarily related to an increase in cash flows from accounts receivables of $21.2 million and an increase in cash generated from our net income of $6.2 million, partially offset by a decrease in cash flows from other assets of $2.6 million.

36

At December 31, 2018, 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 $1.0 million increase in net cash used in investing activities for the six months ended December 31, 2018 versus the same period in the prior fiscal year was primarily due to an increase in cash used to fund business acquisitions, net of cash acquired, of $3.2 million and an increase in capital expenditures of $7.9 million, partially offset by a decrease in the purchase of available for sale securities of $2.3 million and an increase in proceeds from sales of available for sale securities of $7.3 million.

Financing Activities. Financing cash flows consist primarily of repurchases of common stock, issuance and repayment of debt, and proceeds from the sale of shares of common stock through employee equity incentive plans.

Contractual Obligations

Following is a summary of future payments that we are required to make under existing contractual obligations as of December 31, 2018:

	Payment Due by Fiscal Year
	2019		2020-2021		2022-2023		Thereafter		Total
	(in thousands)
Credit Facility
Principal payment	$	—	$	—	$	—	$	110,000	$	110,000
Interest payments (1)		1,721		6,883		7,549		150		16,303
Commitment fee (2)		166		665		665		13		1,509
Note payable		550		367		—		—		917
Operating leases		2,736		9,233		5,450		5,987		23,406
Purchase commitments		4,059		5,233		142		2		9,436
Total contractual obligations	$	9,232	$	22,381	$	13,806	$	116,152	$	161,571

⁽¹⁾ The Credit Facility carries a variable rate of interest. Interest payments were estimated using the applicable interest rate as of December 31, 2018 net of the impact of the interest rate swap we entered into on July 10, 2017.

⁽²⁾ The Credit Facility agreement includes a commitment fee, which we have included in the table above, based on the applicable interest rate as of December 31, 2018 and our current unborrowed capacity of $190 million.

Purchase orders are not included in the table above. Our purchase orders represent authorizations to purchase rather than binding agreements. The contractual obligation amounts in the table above are associated with agreements that are enforceable and legally binding and that specify all significant terms, including: fixed or minimum services to be used; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Obligations under contract that we can cancel without a significant penalty are not included in the table above.

Our estimate of unrecognized tax benefits for which cash settlement may be required, in the amount of $1.4 million, has been excluded from the table above. These amounts have been excluded because, as of December 31, 2018, 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.

The contractual obligations table above also excludes our estimate of the contributions we will make to our Swiss defined benefit pension plan in fiscal year 2019, which is $1.7 million based on foreign exchange rates in effect on December 31, 2018. We have not disclosed contributions for periods after fiscal year 2019, as those amounts are subject to future changes.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements during the three months ended December 31, 2018.

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.

37

We are a party to an interest rate swap which we designated as a hedge instrument 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, 2018 as filed with the SEC on August 29, 2018, 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 December 31, 2018. 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 December 31, 2018, 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 change in our internal control over financial reporting occurred during the fiscal quarter ended December 31, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

38

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, 2018 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. 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, 2018.

The formal notification by the UK of its intention to withdraw 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 connection with Brexit, the British government is negotiating the future terms of the UK’s relationship with the EU, including the terms of trade between the UK and the EU. The ultimate effects of Brexit will depend on any agreements the UK makes to retain access to EU markets, either during a transitional period or more permanently, and could potentially disrupt the markets we serve and the tax jurisdictions in which we operate. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the UK determines which EU laws to replace or replicate. Remaining EU member countries may also seek to make it more difficult for us to trade effectively or competitively in those regions.

On January 15, 2019, the UK parliament rejected the draft Withdrawal Agreement negotiated between the UK and the EU that set forth the terms governing the UK’s departure and there does not currently appear to be a clear understanding of what protective or other terms might exist, if any, at the time of the UK’s ultimate exit from the EU. The lack of a formalized and orderly process for the UK’s exit from the EU, to the extent occurring, could create uncertainty and challenges (particularly in the near term) with respect to trading relationships between our UK subsidiary and other EU nations. Further, there could be divergent or unreconciled positions in respect of other regulatory areas such as employment law or data privacy, which could create additional uncertainty and challenges for us.

Risks Related to our Indebtedness

Changes to and replacement of the LIBOR benchmark interest rate could adversely affect our business, financial results and operation

In July 2017, the Financial Conduct Authority (the regulatory authority over LIBOR) stated they will plan for a phase out of regulatory oversight of LIBOR interest rate indices after 2021 to allow for an orderly transition to an alternate reference rate. The Alternative Reference Rates Committee (ARRC) has proposed that the Secured Overnight Financing Rate (SOFR) is the rate that represents the best alternative to LIBOR for derivatives and other financial contracts that are currently indexed to LIBOR. The ARRC has proposed a market transition plan to SOFR from LIBOR. We are evaluating the potential impact of the eventual replacement of the LIBOR benchmark interest rate, including the possibility of SOFR as the dominant replacement. The market transition away from LIBOR towards SOFR is expected to be complicated. There can be no guarantee that SOFR will become a widely accepted benchmark in place of LIBOR. Borrowings under our Credit Facility, as hedged by our interest swap, are indexed to LIBOR. It is uncertain at this time, what the impact of a possible transition to SOFR may be on our business, financial results and operations.

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

A previously authorized repurchase program for our common stock expired on July 8, 2018. There were no share repurchases during the six months ended December 31, 2018.

Recent Sales of Unregistered Securities

During the three months ended December 31, 2018, we issued approximately 37 thousand shares of our common stock upon the cashless exercise of warrants that we sold in December 2012. These warrants had an exercise price of $40.04 per share. The shares of our common stock were issued in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

39

Item 6.    Exhibits

		Incorporated by Reference
Exhibit Number	Description	Form		File No.		Exhibit		Filing Date		Filed Herewith
10.1	2009 Stock Incentive Plan, as amended		8-K		000-25259		99.2		11/19/18
10.2	2018 Israeli Special Purpose Stock Incentive Plan		8-K		000-25259		99.4		11/19/18
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**	XBRL Instance Document										X
101.SCH**	XBRL Taxonomy Extension Schema Document										X
101.CAL**	XBRL Taxonomy Calculation Linkbase Document										X
101.DEF**	XBRL Taxonomy Definition Linkbase Document										X
101.LAB**	XBRL Taxonomy Label Linkbase Document										X
101.PRE**	XBRL Taxonomy Presentation Linkbase Document										X

** submitted electronically herewith

Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Unaudited Condensed Consolidated Balance Sheets as of December 31, 2018 and June 30, 2018, (ii) Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended December 31, 2018 and 2017, (iii) Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2018 and 2017 and (iv) Notes to Unaudited Condensed Consolidated Financial Statements.

40

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: February 8, 2019		By:	/s/ RICHARD D. BOOTH
			Richard D. Booth
			Chief Financial Officer and Treasurer
			(Principal Financial and Accounting Officer)

41

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: February 8, 2019	By:	/s/ ROBERT A. EBERLE
		Robert A. Eberle
		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: February 8, 2019	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 December 31, 2018 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: February 8, 2019	By:	/s/ ROBERT A. EBERLE
		Robert A. Eberle
		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 December 31, 2018 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: February 8, 2019	By:	/s/ RICHARD D. BOOTH
		Richard D. Booth
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2018	Jan. 31, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Trading Symbol	EPAY
Entity Registrant Name	BOTTOMLINE TECHNOLOGIES INC /DE/
Entity Central Index Key	0001073349
Current Fiscal Year End Date	--06-30
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		43,193,919

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 87,639	$ 121,860	$ 64,051
Cash held for customers	5,382	2,753	$ 3,481
Marketable securities	8,477	10,012
Accounts receivable net of allowances for doubtful accounts of $1,011 at December 31, 2018 and $996 at June 30, 2018	62,902	74,305
Prepaid expenses and other current assets	30,205	19,781
Total current assets	194,605	228,711
Property and equipment, net	28,876	28,895
Goodwill	200,786	200,024
Intangible assets, net	160,136	161,785
Other assets	33,301	16,553
Total assets	617,704	635,968
Current liabilities:
Accounts payable	10,166	10,251
Accrued expenses and other current liabilities	29,038	34,994
Customer account liabilities	5,382	2,753
Deferred revenue	58,496	75,356
Total current liabilities	103,082	123,354
Borrowings under credit facility	110,000	150,000
Deferred revenue, non-current	16,693	23,371
Deferred income taxes	7,457	8,367
Other liabilities	19,627	19,944
Total liabilities	256,859	325,036
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-46,468 at December 31, 2018 and 44,834 at June 30, 2018; outstanding shares-40,738 at December 31, 2018 and 39,028 at June 30, 2018	46	45
Additional paid-in-capital	700,520	678,549
Accumulated other comprehensive loss	(35,704)	(30,633)
Treasury stock: 5,730 shares at December 31, 2018 and 5,806 shares at June 30, 2018, at cost	(128,216)	(129,914)
Accumulated deficit	(175,801)	(207,115)
Total stockholders' equity	360,845	310,932
Total liabilities and stockholders' equity	$ 617,704	$ 635,968

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Statement of Financial Position [Abstract]
Accounts receivable, net of allowances for doubtful accounts and returns	$ 1,011	$ 996
Preferred Stock, $.001 par value	$ 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	$ 0.001	$ 0.001
Common Stock, Authorized shares	100,000,000	100,000,000
Common Stock, Issued shares	46,468,000	44,834,000
Common Stock, Outstanding shares	40,738,000	39,028,000
Treasury stock, shares	5,730,000	5,806,000

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Revenues:
Revenue	$ 104,846	$ 95,195	$ 207,283	$ 186,491
Cost of revenues:
Total cost of revenues	44,981	41,175	90,111	81,734
Gross profit	59,865	54,020	117,172	104,757
Operating expenses:
Sales and marketing	22,585	21,441	45,607	40,790
Product development and engineering	16,815	13,938	33,380	27,802
General and administrative	11,904	10,989	25,769	22,826
Amortization of acquisition-related intangible assets	5,253	5,702	10,579	10,890
Total operating expenses	56,557	52,070	115,335	102,308
Income from operations	3,308	1,950	1,837	2,449
Other expense, net	(858)	(3,357)	(1,639)	(7,640)
Income (loss) before income taxes	2,450	(1,407)	198	(5,191)
Benefit from income taxes	3,519	4,495	4,853	4,038	$ 4,100
Net income (loss)	$ 5,969	$ 3,088	$ 5,051	$ (1,153)
Net income (loss) per share:
Basic	$ 0.15	$ 0.08	$ 0.13	$ (0.03)
Diluted	$ 0.14	$ 0.08	$ 0.12	$ (0.03)
Shares used in computing net income (loss) per share:
Basic	40,635	38,087	40,162	37,908
Diluted	41,739	39,344	41,662	37,908
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available for sale securities	$ 8	$ (3)	$ 6	$ (3)
Unrealized gain (loss) on interest rate hedging transactions	(1,438)	604	(1,111)	369
Minimum pension liability adjustments	(10)	38	(56)	142
Foreign currency translation adjustments	(2,543)	773	(3,910)	2,146
Other comprehensive income (loss), net of tax:	(3,983)	1,412	(5,071)	2,654
Comprehensive income (loss)	1,986	4,500	(20)	1,501
Subscriptions and Transactions [Member]
Revenues:
Revenue	71,288	63,187	141,056	123,901
Cost of revenues:
Cost of revenue	31,352	27,211	63,021	54,633
Software Licenses [Member]
Revenues:
Revenue	5,665	2,620	10,177	4,985
Cost of revenues:
Cost of revenue	210	229	441	399
Service and Maintenance [Member]
Revenues:
Revenue	26,786	28,433	54,191	55,775
Cost of revenues:
Cost of revenue	12,528	13,034	25,234	25,334
Product and Service, Other [Member]
Revenues:
Revenue	1,107	955	1,859	1,830
Cost of revenues:
Cost of revenue	$ 891	$ 701	$ 1,415	$ 1,368

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Operating activities:
Net income (loss)	$ 5,051	$ (1,153)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of acquisition-related intangible assets	10,579	10,890
Stock-based compensation plan expense	21,891	16,540
Depreciation and other amortization	11,191	9,543
Gain on sale of cost-method investment	(237)
Deferred income tax benefit	(6,177)	(4,745)
Provision for allowances on accounts receivable	159	75
Amortization of debt issuance costs	208	711
Amortization of debt discount		5,574
Amortization of discount on investments	(75)	(5)
Loss (gain) on disposal of equipment	594	(10)
Loss (gain) on foreign exchange	326	(26)
Changes in operating assets and liabilities:
Accounts receivable	8,827	(12,326)
Prepaid expenses and other current assets	(1,982)	(1,089)
Other assets	(1,643)	926
Accounts payable	403	(145)
Accrued expenses	(4,858)	(1,932)
Customer account liabilities	2,761	(4,588)
Deferred revenue	(13,491)	(12,443)
Other liabilities	(278)	(697)
Net cash provided by operating activities	33,249	5,100
Investing activities:
Acquisition of businesses and assets, net of cash and restricted cash acquired	(8,895)	(5,741)
Proceeds from sale of cost-method investment	237
Purchases of available-for-salesecurities	(7,588)	(9,935)
Proceeds from sales of available-for-sale securities	9,200	1,903
Capital expenditures, including capitalization of software costs	(17,028)	(9,137)
Proceeds from disposal of property and equipment		10
Insurance proceeds received for damage to equipment	200
Net cash used in investing activities	(23,874)	(22,900)
Financing activities:
Repayment of amounts borrowed under revolving credit facility	(40,000)	(189,750)
Amounts borrowed under revolving credit facility		150,000
Repayment of notes payable	(183)	(2,204)
Settlement of warrants	(4)
Debt issuance costs related to credit facility	(597)
Proceeds from exercise of stock options and employee stock purchase plan	1,740	1,705
Net cash used in financing activities	(39,044)	(40,249)
Effect of exchange rate changes on cash	(1,923)	1,012
Decrease in cash, cash equivalents and restricted cash	(31,592)	(57,037)
Cash, cash equivalents and restricted cash at beginning of period	124,613	124,569
Cash, cash equivalents and restricted cash at end of period	93,021	67,532
Cash, cash equivalents and restricted cash at end of period	87,639	64,051
Cash held for customers at end of period	5,382	3,481
Cash, cash equivalents and restricted cash at end of period	93,021	67,532
Supplemental disclosures of non-cash financing activities:
Issuance of common stock upon settlement of the warrants	$ 58,451
Issuance of note payable to seller in connection with acquisition		1,836
Issuance of common stock upon conversion of convertible senior notes		19,736
Receipt of common stock upon settlement of Note Hedges		$ 19,964

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Basis of Presentation

6 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation

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 six months ended December 31, 2018 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending June 30, 2019. 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, 2018.

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Recent Accounting Pronouncements

6 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Recent Accounting Pronouncements

Note 2—Recent Accounting Pronouncements

Recently Adopted Pronouncements

Revenue Recognition: In May 2014, the Financial Accounting Standard Board (FASB) issued an accounting standard update for new revenue recognition guidance, superseding nearly all prior revenue recognition guidance. The new revenue standard outlines a single comprehensive model for accounting for revenue from contracts with customers and requires more detailed revenue disclosures. The core principle of the new standard is that revenue is to be recognized in a manner that depicts the transfer of promised goods or services to customers at amounts that reflect the consideration which the entity expects to be entitled under the arrangement.

We adopted the new revenue standard on July 1, 2018 using the modified retrospective method of adoption applied to open contracts at that date and upon adoption recorded a $26.3 million decrease to our accumulated deficit balance. The adjustments we recorded at transition were composed of:

	(in thousands)
Decrease to accounts receivable	$	(1,914	)
Increase to contract assets		5,118
Decrease to deferred revenue		9,839
Increase to capitalized fulfillment costs		11,648
Increase to capitalized sales commissions		4,952
Tax effects		(3,380	)
Total decrease to accumulated deficit	$	26,263

The adjustment to accounts receivable relates primarily to unbilled receivables reclassified as contract assets. The increase to contract assets relates to revenue recognized in excess of the amount billed to the customer and the right to payment contingent on conditions other than simply the passage of time, such as the completion of a related performance obligation. Adjustments to deferred revenue relate primarily to the acceleration of revenue under the new standard as compared to the previous revenue recognition standard. This largely relates to transactions where, under legacy GAAP, revenue was deferred due to a lack of vendor specific objective evidence of fair value, transactions accounted for under a combined services arrangement which resulted in revenue recognition over time, transactions that had contractually stipulated price increases that were accounted for as the increases occurred and certain contingent revenue arrangements. Adjustments to capitalized fulfillment costs and capitalized sales commissions reflect the requirement to capitalize these costs under the new standard; prior to adoption, we expensed these costs as incurred. Capitalized costs are recorded as components of our prepaid expenses and other current assets and other assets in our consolidated balance sheet.

Please refer to Note 3 Revenue Recognition for discussion of the adoption of this new standard.

Financial Instruments - Classification and Measurement: In January 2016, the FASB issued an accounting standard update which requires that entities measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value, with changes in fair value recognized in earnings. Entities will no longer be able to recognize unrealized holding gains and losses on equity securities classified as available for sale as a component of other comprehensive income (OCI). Subject to certain exceptions, entities will be able to elect to record equity investments without readily determinable fair values at cost, less impairment, plus or minus adjustments for observable price changes, with all such changes recognized in earnings. This standard does not change the guidance for classifying and measuring investments in debt securities and loans. We adopted this standard effective July 1, 2018 and it did not have an impact on our financial statements, but could impact our financial statements in the future if observable price changes occur for investments we hold that do not have readily determinable fair values.

Statement of Cash Flows: In August and November of 2016, the FASB issued updated accounting standards which address the classification and presentation of certain cash receipts, cash payments and restricted cash in the statement of cash flows. We adopted these standards retrospectively on July 1, 2018. Our consolidated balance sheets include cash held for customers and a liability for the same amount. Cash held for customers and the related customer account liabilities arise from certain payment transactions we process on behalf of customers where we collect and hold customer funds for a short transient period before disbursing the cash and settling the liability. Cash we hold on behalf of customers is segregated from our other corporate cash accounts, is not available for use by us and is considered restricted cash. Prior to the adoption of this standard the change in cash held for customers and the corresponding liability were presented on a net basis in our consolidated statement of cash flows. As a result of adoption, the operating section of our consolidated statement of cash flows now reflects the impact on our total cash position, including the impact of changes in customer account liabilities.

During the six months ended December 31, 2017, the retrospective adoption of this standard resulted in an increase in operating cash flows of approximately $4.6 million.

Defined Benefit Plan Expenses: In March 2017, the FASB issued an accounting standard update that changes the income statement presentation of defined benefit plan expense by requiring separation between operating expense (the service cost component) and non-operating expense (all other components of net periodic defined benefit cost). Under the revised standard, the service cost component is classified consistently with other compensation costs, while all other components are reported in other expense, net. We adopted this standard retrospectively on July 1, 2018 and reclassified approximately $0.2 million and $0.4 million from income from operations to other expense, net for the three and six months ended December 31, 2017, respectively, in our consolidated statement of comprehensive loss.

Accounting Pronouncements to be Adopted

Leases: In February 2016, the FASB issued an accounting standard update which requires balance sheet recognition of a lease liability and a corresponding right-of-use asset for all leases with terms longer than twelve months. The pattern of recognition of lease related revenue and expenses will be dependent on its classification. The updated standard requires additional financial statement disclosures. We will adopt this standard on July 1, 2019 and anticipate that the standard will have a material impact to our consolidated balance sheet due to the recognition of right of use assets and lease liabilities and additional disclosures. We expect to adopt the standard using a modified retrospective method as of the date of adoption (July 1, 2019).

Financial Instruments - Credit Losses: In June 2016, the FASB issued an accounting standard update that introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments including trade receivables. 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. This standard is effective for us on July 1, 2020, with early application permitted. We are currently evaluating the anticipated impact of this standard on our financial statements as well as timing of adoption.

Goodwill Impairment: In January 2017, the FASB issued an accounting standard update to simplify the test for goodwill impairment which removes step 2 from the goodwill impairment test. 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. The standard is effective for us on July 1, 2020 on a prospective basis, with early adoption permitted. We do not currently expect the adoption of this standard to have a material impact on our financial statements.

Derivatives and Hedging: In August 2017, the FASB issued an accounting standard update that more closely aligns the results of cash flow and fair value hedge accounting with risk management activities through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. The guidance expands hedge accounting for both nonfinancial and financial risk components and refines the measurement of hedge results to better reflect an entity’s hedging strategies. In October 2018, the FASB issued an accounting standard update to expand the list of United States benchmark interest rates permitted in the application of hedge accounting. The revised standard allows the use of the Overnight Index Swap rate based on the Secured Overnight Financing Rate as a U.S. benchmark interest rate for hedge accounting purposes. These standard updates are required to be adopted concurrently and are effective for us on July 1, 2019. We are currently evaluating the anticipated impact of these standards on our financial statements.

Share-Based Compensation - Nonemployee Share-Based Payment Accounting: In June 2018, the FASB issued an accounting standard update to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees. Under the revised standard, measurement of nonemployee awards will be fixed at the grant date by estimating the fair value of the equity instruments to be issued. Additionally, during the vesting period, nonemployee awards that contain a performance condition that affects the quantity or other terms of the award will be measured based on the probable outcome. Upon adoption, entities must recognize a cumulative-effect adjustment to retained earnings as of the beginning of the annual period of adoption for equity-classified nonemployee awards for which a measurement date has not been established and liability-classified nonemployee awards that have not been settled. This standard is effective for us on July 1, 2019. We do not currently expect the adoption of this standard to have a material impact on our financial statements.

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Revenue Recognition

6 Months Ended

Dec. 31, 2018

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Note 3—Revenue Recognition

Significant Accounting Policy

Effective July 1, 2018, we adopted a new accounting standard related to revenue recognition on a modified retrospective basis to all open contracts. Other than changes in our accounting policies for revenue recognition and deferred contract costs due to the adoption of this standard, there have been no significant changes to our accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018.

Revenue Recognition

We generate revenue from the sale of SaaS or cloud-based services inclusive of both fixed and usage-based fees, perpetual and term software licenses, professional services such as consulting and implementation services, software support and maintenance and, to a lesser extent, through the sale of hardware and supplies. We recognize revenue as we transfer goods and services to customers, at amounts we expect to receive as consideration under enforceable contractual arrangements. Revenue is recognized as we satisfy contractual performance obligations, which can occur either at a point in time or over time. For perpetual and term software licenses that do not involve significant customization and for equipment and supplies sales, we normally record revenue at a point in time. For professional services, support and maintenance, stand-ready performance obligations with respect to our hosted or SaaS solutions and for software licenses that are dependent on significant customization by us we normally record revenue over time.

We recognize revenue according to a five step model that involves:

• Identifying the contract (or contracts) with a customer;

• Identifying the performance obligations in the contract(s);

• Determining the transaction price;

• Allocating the transaction price to the contractual performance obligations, and

• Recognizing revenue as we satisfy the performance obligations.

We consider a contract to exist when we have legally enforceable rights and obligations with a customer. Our contracts can take a variety of forms but are normally in writing and include all major commercial terms such as the goods or services we will be obligated to transfer under the arrangement, the amount the customer is obligated to pay us upon fulfillment of our obligations and the payment terms.

Performance obligations in a contract are accounted for separately if they are determined to be distinct. We consider a performance obligation to be distinct if that good or service is separately identified from other items in the contract and if the customer can benefit from that performance obligation on its own or together with resources that are readily available to the customer. In assessing whether a customer can benefit from a performance obligation on its own, we consider factors such as the interdependency or interrelationship of the item with other goods or services in the contract, the complexity of any required integration or customization and the ability of the customer’s personnel or other third party providers to fulfill like goods or services. If a particular good or service is not considered to be distinct, it is combined with other performance obligations in the arrangement and revenue is recognized as the combined performance obligation is transferred to the customer.

The transaction price is the amount of consideration we expect to be entitled to under a contract upon fulfillment of the performance obligations. The starting point for estimating the transaction price is the selling price stipulated in the contract, however we include in the determination of the overall transaction price an estimate of variable consideration to the extent it is probable that inclusion will not result in a significant future reversal of revenue. Variable consideration can arise in our arrangements as a result of usage-based fees. For contracts with a long period over which usage-based fees can arise, or in contracts with customers with whom we do not have a reasonable operating history, we often constrain the amount of variable consideration included in the transaction price. We update our estimate of variable consideration at the end of each financial reporting period. We exclude from the determination of the transaction price sales and other taxes we bill to and collect from customers and remit to government authorities. Shipping and handling activities performed after the customer has obtained control of the good or service is accounted for as a fulfillment activity.

The transaction price is allocated to contractual performance obligations on a relative standalone selling price basis. We normally estimate standalone selling price using the adjusted market approach, maximizing the use of observable inputs and other factors that can include: the price we charge when we sell an item separately, our internal price lists and internal pricing guidelines, cost of delivering the item and overall gross margin expectations and information about the customer or class of customer. Revenue is recorded, either at a point in time or over time, as we satisfy the performance obligations in a contract.

Nature of Goods and Services

Subscriptions and Transactions: We generate subscriptions and transactions revenue through the provision of hosted and SaaS based solutions which can include contractually fixed revenue amounts as well as usage based fees. Our SaaS arrangements consist of an obligation for us to provide continuous access to a technology solution that we host, which we account for as a stand-ready performance obligation. These contracts may also be subject to variable pricing or overage fees based on customer processing, usage or volume. We recognize revenue for fixed subscription fees ratably over the non-cancelable term of the contract, commencing on the date the customer has access to the solution. In circumstances where we meet certain requirements to allocate variable consideration to a distinct service within a series of related services, we allocate variable consideration to each distinct period of service within the series. If we do not meet those requirements, we include an estimate of variable consideration in the transaction price and recognize it ratably over the non-cancelable term of the contract.

For certain of our hosted or SaaS solutions, customers are charged a fee for implementation services. In determining whether the implementation services are distinct from the hosting services we consider various factors including the level of customization, complexity of the integration, the interdependency and interrelationship between the implementation services and the hosting services and the ability (or inability) of the customer’s personnel or other service providers to perform the services. We have concluded that the implementation services in our hosting arrangements with multiple performance obligations are not distinct and therefore we recognize fees for implementation services ratably over the non-cancelable term of the hosting contract.

We license certain software on a subscription basis under contractual arrangements where customers pay a specified fee, inclusive of support and maintenance, for a time-based license right to use our software. These fees recur periodically, unless the customer opts to cancel their subscription arrangement with us. These contracts typically contain two distinct performance obligations: the software license and support and maintenance. The portion of the transaction price allocated to the license right is recognized at the point in time in which we have provided the customer access to the intellectual property and the license term has commenced. The portion of the transaction price allocated to support and maintenance is recognized ratably over the non-cancelable contract term.

Software Licenses: Software licenses revenue reflects fees we charge to license software on a perpetual basis. For software licenses that do not include significant customization we recognize revenue at the point in time where the customer has obtained access to the intellectual property and the license period has commenced.

Certain of our software arrangements require significant customization and modification and involve extended implementation periods. In these arrangements the professional services and software license are highly interdependent and we treat the software license and professional services as a combined performance obligation. We recognize revenue for the combined performance obligation over time and measure progress to completion based on labor hours incurred as a percentage of total expected labor hours. We believe the use of labor hours as an input measure provides a faithful depiction of the transfer of goods and services under these contracts.

Support and Maintenance: Our software licenses are generally sold with post-contract support which is comprised of technical support and unspecified software upgrades. Unspecified upgrades refer to software upgrades which we make available at our discretion and from time-to-time, on a “when and as available” basis. We account for post-contract support as a stand-ready performance obligation and recognize revenue ratably over the non-cancelable contract term which is typically one year.

Professional Services: Our professional services revenue is normally comprised of implementation, consulting and training services. Except for professional service performance obligations that form part of an overall, highly customized arrangement, our professional services typically represent distinct performance obligations and revenue is recognized as the services are performed.

Other: Other revenue is derived from the sale of equipment and supplies and is recognized at the point in time control transfers to the customer.

Disaggregation of Revenue

The tables below present our revenue disaggregated by major product category and the related financial statement classification of revenue for the three and six months ended December 31, 2018.

	Three Months Ended December 31, 2018
	Settlement Network Solutions		Legal Spend Management Solutions		Banking Solutions		Payments and Transactional Documents		Healthcare		Other		Total
	(in thousands)
Financial statement classification:
Subscriptions and transactions	$	24,881	$	19,149	$	15,925	$	11,045	$	231	$	57	$	71,288
Software licenses		235		—		2,100		1,499		464		1,367		5,665
Service and maintenance		6,063		—		5,103		12,601		872		2,147		26,786
Other		—		—		—		798		—		309		1,107
Total revenues	$	31,179	$	19,149	$	23,128	$	25,943	$	1,567	$	3,880	$	104,846

	Six Months Ended December 31, 2018
	Settlement Network Solutions		Legal Spend Management Solutions		Banking Solutions		Payments and Transactional Documents		Healthcare		Other		Total
	(in thousands)
Financial statement classification:
Subscriptions and transactions	$	49,163	$	37,545	$	31,591	$	21,614	$	1,057	$	86	$	141,056
Software licenses		807		—		3,426		3,653		883		1,408		10,177
Service and maintenance		12,388		—		10,363		25,360		1,770		4,310		54,191
Other		—		—		—		1,550		—		309		1,859
Total revenues	$	62,358	$	37,545	$	45,380	$	52,177	$	3,710	$	6,113	$	207,283

Remaining Performance Obligations

The transaction price allocated to remaining performance obligations that are unsatisfied, or partially unsatisfied, as of December 31, 2018 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. The amount of revenue recognized during the three and six months ended December 31, 2018 from performance obligations satisfied in prior periods was not significant.

Revenue allocated to remaining performance obligations was $367.0 million as of December 31, 2018 of which we expect to recognize approximately $160.0 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 July 1, 2018 and December 31, 2018.

	July 1,		December 31,
	2018		2018		$ Change
	(in thousands)
Accounts receivable	$	72,391	$	62,902	$	(9,489	)
Contract assets		5,118		6,894		1,776
Deferred revenue		88,888		75,189		(13,699	)

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

For the three and six months ended December 31, 2018, we recognized $24.7 million and $51.8 million, respectively, in revenue from amounts that were included in deferred revenue as of July 1, 2018.

Contract Costs

We capitalize incremental costs incurred in connection with obtaining a contract if they have a period of benefit that is greater than one year and we expect to recover the costs through future contract revenues. Incremental costs incurred to obtain a contract relate to sales commissions. We also capitalize costs incurred in fulfilling a contract when the costs relate directly to a specifically identifiable customer contract, when the costs generate or enhance resources that we will use to satisfy performance obligations in the future and when the costs are expected to be recovered through future contract revenues. Capitalized costs to obtain a contract and capitalized fulfillment costs totaled $5.2 million and $16.3 million, respectively, at December 31, 2018.

Capitalized costs are amortized on a basis consistent with the transfer of the goods or services to which the asset relates. This results in capitalized costs being recognized on a ratable basis over the estimated period of future benefit, which is generally five years. We estimate the future period of benefit considering the current contract term, the impact of estimated customer renewal terms and the estimated life of the technology solution underlying the contracts. Amortization expense associated with costs of obtaining and costs of fulfilling a contract, respectively, for the three months ended December 31, 2018 was $0.5 million and $0.9 million and were recorded as components of sales and marketing expense and cost of revenues, respectively, in our consolidated statement of comprehensive income (loss). Amortization expense associated with costs of obtaining and costs of fulfilling a contract were $0.8 million and $1.4 million, respectively, for the six months ended December 31, 2018, and were recorded as components of sales and marketing expense and cost of revenues, respectively, in our consolidated statement of comprehensive income (loss).

The following tables summarize the impact of adopting the new revenue standard on our consolidated financial statements as of and for the three and six months ended December 31, 2018:

Unaudited Condensed Consolidated Balance Sheet

	At December 31, 2018
(in thousands, unaudited)	As Reported			Adjustments			Balances without adoption of new revenue standard
ASSETS
Current assets:
Cash and cash equivalents	$	87,639		$	—		$	87,639
Cash held for customers		5,382			—			5,382
Marketable securities		8,477			—			8,477
Accounts receivable, net		62,902			1,576			64,478
Prepaid expenses and other current assets		30,205			(11,162	)		19,043
Total current assets		194,605			(9,586	)		185,019
Property and equipment, net		28,876			—			28,876
Goodwill		200,786			—			200,786
Intangible assets, net		160,136			—			160,136
Other assets		33,301			(14,931	)		18,370
Total assets	$	617,704		$	(24,517	)	$	593,187
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	10,166		$	—		$	10,166
Accrued expenses and other current liabilities		29,038			—			29,038
Customer account liabilities		5,382			—			5,382
Deferred revenue		58,496			2,071			60,567
Total current liabilities		103,082			2,071			105,153
Borrowings under credit facility		110,000			—			110,000
Deferred revenue, non-current		16,693			6,542			23,235
Deferred income taxes		7,457			1,619			9,076
Other liabilities		19,627			—			19,627
Total liabilities		256,859			10,232			267,091
Stockholders’ equity
Preferred Stock, $.001 par value		—			—			—
Common Stock, $.001 par value		46			—			46
Additional paid-in-capital		700,520			—			700,520
Accumulated other comprehensive loss		(35,704	)		185			(35,519	)
Treasury stock, at cost		(128,216	)		—			(128,216	)
Accumulated deficit		(175,801	)		(34,934	)		(210,735	)
Total stockholders’ equity		360,845			(34,749	)		326,096
Total liabilities and stockholders’ equity	$	617,704		$	(24,517	)	$	593,187

Unaudited Condensed Consolidated Statement of Comprehensive Income (Loss)

	Three Months Ended December 31, 2018									Six Months Ended December 31, 2018
(in thousands, unaudited)	As Reported			Adjustments			Balances without adoption of new revenue standard			As Reported			Adjustments			Balances without adoption of new revenue standard
Revenues:
Subscriptions and transactions	$	71,288		$	390		$	71,678		$	141,056		$	1,226		$	142,282
Software licenses		5,665			(1,742	)		3,923			10,177			(3,382	)		6,795
Service and maintenance		26,786			514			27,300			54,191			1,227			55,418
Other		1,107			(37	)		1,070			1,859			(37	)		1,822
Total revenues		104,846			(875	)		103,971			207,283			(966	)		206,317
Cost of revenues:
Subscriptions and transactions		31,352			263			31,615			63,021			649			63,670
Software licenses		210			2			212			441			2			443
Service and maintenance		12,528			408			12,936			25,234			801			26,035
Other		891			(30	)		861			1,415			(28	)		1,387
Total cost of revenues		44,981			643			45,624			90,111			1,424			91,535
Gross profit		59,865			(1,518	)		58,347			117,172			(2,390	)		114,782
Operating expenses:
Sales and marketing		22,585			175			22,760			45,607			365			45,972
Product development and engineering		16,815			146			16,961			33,380			178			33,558
General and administrative		11,904			—			11,904			25,769			—			25,769
Amortization of acquisition-related intangible assets		5,253			—			5,253			10,579			—			10,579
Total operating expenses		56,557			321			56,878			115,335			543			115,878
Income from operations		3,308			(1,839	)		1,469			1,837			(2,933	)		(1,096	)
Other expense, net		(858	)		—			(858	)		(1,639	)		—			(1,639	)
Income (loss) before income taxes		2,450			(1,839	)		611			198			(2,933	)		(2,735	)
Benefit (expense) from income taxes		3,519			4,797			(1,278	)		4,853			5,738			(885	)
Net income (loss)	$	5,969		$	(6,636	)	$	(667	)	$	5,051		$	(8,671	)	$	(3,620	)
Net income (loss) per share:
Basic	$	0.15		$	(0.17	)	$	(0.02	)	$	0.13		$	(0.22	)	$	(0.09	)
Diluted	$	0.14		$	(0.16	)	$	(0.02	)	$	0.12		$	(0.21	)	$	(0.09	)
Shares used in computing net income (loss) per share:
Basic		40,635			—			40,635			40,162			—			40,162
Diluted		41,739			(1,104	)		40,635			41,662			(1,500	)		40,162
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available for sale securities		8			—			8			6			—			6
Unrealized gain (loss) on interest rate hedging transactions		(1,438	)		—			(1,438	)		(1,111	)		—			(1,111	)
Minimum pension liability adjustments		(10	)		—			(10	)		(56	)		—			(56	)
Foreign currency translation adjustments		(2,543	)		125			(2,418	)		(3,910	)		185			(3,725	)
Other comprehensive loss, net of tax:		(3,983	)		125			(3,858	)		(5,071	)		185			(4,886	)
Comprehensive income (loss)	$	1,986		$	(6,511	)	$	(4,525	)	$	(20	)	$	(8,486	)	$	(8,506	)

Unaudited Condensed Consolidated Statement of Cash Flows

	Six Months Ended December 31, 2018
(in thousands, unaudited)	As Reported			Adjustments			Balances without adoption of new revenue standard
Operating activities:
Net income (loss)	$	5,051		$	(8,671	)	$	(3,620	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of acquisition-related intangible assets		10,579			—			10,579
Stock-based compensation plan expense		21,891			15			21,906
Depreciation and other amortization		11,191			—			11,191
Gain on sale of cost-method investment		(237	)		—			(237	)
Deferred income tax benefit		(6,177	)		5,738			(439	)
Provision for allowances on accounts receivable		159			—			159
Amortization of debt issuance costs		208			—			208
Amortization of discount on investments		(75	)		—			(75	)
Loss (gain) on disposal of equipment		594			—			594
Loss (gain) on foreign exchange		326			(5	)		321
Changes in operating assets and liabilities:
Accounts receivable		8,827			328			9,155
Prepaid expenses and other current assets		(1,982	)		2,754			772
Other assets		(1,643	)		1,004			(639	)
Accounts payable		403			—			403
Accrued expenses		(4,858	)		—			(4,858	)
Customer account liabilities		2,761			—			2,761
Deferred revenue		(13,491	)		(1,163	)		(14,654	)
Other liabilities		(278	)		—			(278	)
Net cash provided by operating activities	$	33,249		$	—		$	33,249

The following summarizes the significant adjustments resulting from our adoption of the new revenue recognition standard compared to what would have been recorded in our financial statements had we continued to apply the provisions of legacy GAAP:

Consolidated Balance Sheet

Adjustments to prepaid expenses and other current assets and other assets relate to costs to fulfill and costs to obtain a customer contract which are capitalized under the new standard and expensed as incurred under legacy GAAP. Adjustments to deferred revenue reflect the acceleration of revenue recognition for certain transactions that required longer term revenue deferral under legacy GAAP.

Consolidated Statement of Comprehensive Income (Loss)

Adjustments to software license revenues reflect the requirement under legacy GAAP to defer recognition of revenue when vendor specific evidence of fair value could not be established. The new revenue standard does not have a similar requirement and instead results in the recognition of software license revenue when that performance obligation has been transferred to the customer. In addition, the new revenue standard changed the methodology for allocating the transaction price between performance obligations, which had the impact of increasing software revenue. The decrease in our deferred tax benefit under legacy GAAP is driven by the overall decrease in net income and the inability to recognize certain interim tax benefits.

Statement of Cash Flows

The adoption of the new revenue standard had no impact on our total cash flows or the net cash provided by operating activities. The adjustments reflect offsetting shifts in the components of operating cash flow driven by changes to individual balance sheet accounts and the change in our net income (loss).

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Fair Value

6 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value

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 December 31, 2018 and June 30, 2018, our assets and liabilities measured at fair value on a recurring basis were as follows:

	December 31, 2018								June 30, 2018
	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)	$	1,756	$	—	$	—	$	1,756	$	154	$	—	$	—	$	154
Available for sale securities - Debt
U.S. Corporate	$	—	$	991	$	—	$	991	$	—	$	3,467	$	—	$	3,467
Government - U.S.		—		7,424		—		7,424		—		6,480		—		6,480
Total available for sale securities	$	—	$	8,415	$	—	$	8,415	$	—	$	9,947	$	—	$	9,947
Short-term derivative interest rate swap	$	—	$	562	$	—	$	562	$	—	$	407	$	—	$	407
Long-term derivative interest rate swap	$	—	$	917	$	—	$	917	$	—	$	2,183	$	—	$	2,183

Fair Value of Financial Instruments

We have certain financial instruments which consist of cash and cash equivalents, cash held for customers, marketable securities, accounts receivable, accounts payable, customer account liabilities, a derivative interest rate swap and debt drawn on our Credit Facility (as defined in Note 11). Fair value information for each of these instruments is as follows:

• Cash and cash equivalents, cash 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 December 31, 2018 and June 30, 2018, 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 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 swap is based on the present value of projected cash flows that will occur over the life of the instrument, after considering certain contractual terms of the arrangement 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 $1.3 million and $1.4 million at December 31, 2018 and June 30, 2018, respectively, which approximated fair value.

• We have certain other investments for which there is no readily determinable fair value. The carrying value of these investments was $4.4 million at both December 31, 2018 and June 30, 2018, 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 $110 million against our Credit Facility. The fair value of these borrowings, which are classified as Level 2, approximates their carrying value at December 31, 2018, 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 December 31, 2018 and June 30, 2018.

	December 31, 2018						June 30, 2018
	Held to Maturity		Available for Sale		Total		Held to Maturity		Available for Sale		Total
	(in thousands)
Marketable securities:
Corporate and other debt securities	$	62	$	8,415	$	8,477	$	65	$	9,947	$	10,012
Total marketable securities	$	62	$	8,415	$	8,477	$	65	$	9,947	$	10,012

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:

	December 31, 2018
	(in thousands)
Due within 1 year	$	8,415
Due in 1 year through 5 years		—
Total	$	8,415

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 December 31, 2018 and June 30, 2018, respectively, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:

	At December 31, 2018					At June 30, 2018
	Less than 12 Months
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
Government—U.S.	$	3,476	$	(3	)	$	6,480	$	(6	)
Total	$	3,476	$	(3	)	$	6,480	$	(6	)

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Acquisitions

6 Months Ended

Dec. 31, 2018

Business Combinations [Abstract]

Acquisitions

Note 5—Acquisitions

Fiscal Year 2019 Acquisition

Microgen Banking Systems Limited

On July 2, 2018, we acquired Microgen Banking Systems Limited (Microgen), a UK-based BACS payment company, for 6.9 million British Pound Sterling (approximately $9.1 million based on the exchange rate in effect at the acquisition date). Microgen provides BACS payment products and supporting services to a wide range of UK-based customers and is expected to expand our customer base.

In the preliminary allocation of the purchase price, we recorded $2.7 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 $8.4 million, consisting primarily of customer related assets, are being amortized over a weighted average estimated useful life of thirteen years. Microgen’s operating results are included in the Payments and Transactional Documents segment from the date of the acquisition forward and did not have a material impact on our revenue or net income (loss).

Acquisition expenses of approximately $0.2 million were expensed during the six months ended December 31, 2018 related to the Microgen acquisition, principally as a component of general and administrative expense.

Fiscal Year 2018 Acquisitions

During the fiscal year ended June 30, 2018, we completed two business acquisitions for an aggregate purchase consideration of $18.5 million.

First Capital Cashflow Ltd.

On October 4, 2017, we acquired First Capital Cashflow Ltd. (FCC) for 10.5 million British Pound Sterling (approximately $13.9 million based on the exchange rate in effect at the acquisition date) in cash and 42,080 shares of our common stock. The shares, which were issued to the selling stockholders of FCC who became employees of Bottomline, have vesting conditions tied to continued employment; as such the shares are compensatory and we will record share-based payment expense over the underlying stock vesting period of five years. FCC’s operating results are included in the Payments and Transactional Documents segment from the date of the acquisition forward and did not have a material impact on our revenue or net income (loss).

Decillion

On August 14, 2017, we acquired Singapore-based Decillion Group (Decillion) for total consideration of 6.2 million Singapore Dollars (approximately $4.6 million based on the exchange rate in effect at the acquisition date), consisting of $2.8 million in cash and a note payable of $1.8 million. The note is payable in equal installments over ten quarters starting during the three months ended September 30, 2017. Decillion’s operating results have been included in our Cloud Solutions segment from the date of the acquisition forward and did not have a material impact on our revenue or net income (loss).

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Net Income (Loss) Per Share

6 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

Note 6—Net Income (Loss) Per Share

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

	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2017		2018		2017
	(in thousands, except per share amounts)
Numerator - basic and diluted:
Net income (loss)	$	5,969	$	3,088	$	5,051	$	(1,153	)
Denominator:
Shares used in computing basic net income (loss) per share attributable to common stockholders		40,635		38,087		40,162		37,908
Impact of dilutive securities		1,104		1,257		1,500		—
Shares used in computing diluted net income (loss) per share attributable to common stockholders		41,739		39,344		41,662		37,908
Basic net income (loss) per share attributable to common stockholders	$	0.15	$	0.08	$	0.13	$	(0.03	)
Diluted net income (loss) per share attributable to common stockholders	$	0.14	$	0.08	$	0.12	$	(0.03	)

For the six months ended December 31, 2017, approximately 2.8 million shares of unvested restricted stock and stock options and warrants for up to 6.3 million shares of our common stock 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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Operations by Segments and Geographic Areas

6 Months Ended

Dec. 31, 2018

Segment Reporting [Abstract]

Operations by Segments and Geographic Areas

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 primarily 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 now sold predominantly on a hosted basis, with revenue recorded over time. This has the effect of contributing to recurring revenue and the revenue predictability of future periods, but results in revenue recognition over a longer period than a traditional on-premise software license transaction.

Payments and Transactional Documents. Our Payments and Transactional 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 operating segments. 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. 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. When licensed for on-premise deployment, software revenue for these operating segments is typically recorded upon delivery of the software and commencement of the license term. Professional services revenue is normally recorded as we perform the work and software support and maintenance revenue is recorded ratably over the support period.

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 six months ended December 31, 2018 and 2017 according to the segment descriptions above, is as follows:

	Three Months Ended December 31,						Six Months Ended December 31,
	2018			2017			2018			2017
	(in thousands)
Segment revenue:
Cloud Solutions	$	50,328		$	44,518		$	99,903		$	86,962
Banking Solutions		23,128			20,954			45,380			42,275
Payments and Transactional Documents		25,943			25,343			52,177			48,392
Other		5,447			4,380			9,823			8,862
Total segment revenue	$	104,846		$	95,195		$	207,283		$	186,491
Segment measure of profit (loss):
Cloud Solutions	$	10,742		$	9,650		$	21,034		$	19,034
Banking Solutions		1,953			1,148			4,015			3,309
Payments and Transactional Documents		7,785			7,734			15,866			14,094
Other		(461	)		(903	)		(1,474	)		(1,387	)
Total measure of segment profit	$	20,019		$	17,629		$	39,441		$	35,050

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

	Three Months Ended December 31,						Six Months Ended December 31,
	2018			2017			2018			2017
	(in thousands)
Total measure of segment profit	$	20,019		$	17,629		$	39,441		$	35,050
Less:
Amortization of acquisition-related intangible assets		(5,253	)		(5,702	)		(10,579	)		(10,890	)
Stock-based compensation plan expense		(9,549	)		(8,080	)		(21,891	)		(16,540	)
Acquisition and integration-related expenses		(710	)		(380	)		(1,593	)		(1,372	)
Restructuring benefit (expense)		(54	)		—			(631	)		9
Minimum pension liability adjustments		80			(3	)		155			(38	)
Global ERP system implementation and other costs		(972	)		(1,339	)		(2,553	)		(3,415	)
Other expense, net (1)		(1,111	)		(3,532	)		(2,151	)		(7,995	)
Income (loss) before income taxes	$	2,450		$	(1,407	)	$	198		$	(5,191	)

⁽¹⁾ On July 1, 2018, we adopted an accounting standard update that changes the classification of certain pension related items. For purposes of this reconciliation of segment profit, we have presented pension related adjustments discretely, not as a component of other expense, net.

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

	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2017		2018		2017
	(in thousands)
Depreciation and other amortization expense:
Cloud Solutions	$	2,880	$	2,535	$	5,809	$	4,978
Banking Solutions		1,859		1,537		3,715		3,029
Payments and Transactional Documents		725		705		1,483		1,344
Other		87		98		184		192
Total depreciation and other amortization expense	$	5,551	$	4,875	$	11,191	$	9,543

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; particularly in respect of financial institution customers located in Australia for which the point of sale was the United States.

	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2017		2018		2017
	(in thousands)
Revenues from unaffiliated customers:
United States	$	65,024	$	58,589	$	127,905	$	115,799
United Kingdom		24,004		22,468		48,371		42,539
Switzerland		9,614		9,148		19,607		18,533
Other		6,204		4,990		11,400		9,620
Total revenues from unaffiliated customers	$	104,846	$	95,195	$	207,283	$	186,491

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

	At December 31,		At June 30,
	2018		2018
	(in thousands)
Long-lived assets:
United States	$	46,505	$	36,374
United Kingdom		10,023		5,586
Other		4,867		3,488
Total long-lived assets	$	61,395	$	45,448

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Income Taxes

6 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

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

We recorded an income tax benefit of $3.5 million and $4.5 million for the three months ended December 31, 2018 and 2017, respectively. In the three months ended December 31, 2018, the income tax benefit we recorded was driven largely by discrete tax benefits of $3.3 million relating to stock-based compensation. The income tax benefit for the three months ended December 31, 2017 was principally due to a discrete tax benefit of $4.4 million relating to the consequences of the Tax Act (discussed below) and a tax benefit associated with our Swiss and Israeli operations, offset in part by tax expense associated with our U.S. and UK operations.

We recorded an income tax benefit of $4.9 million and $4.0 million for the six months ended December 31, 2018 and 2017, respectively. In the six months ended December 31, 2018 the income tax benefit we recorded was driven largely by discrete tax benefits of $4.0 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. The income tax benefit for the six months ended December 31, 2017 was principally due to a discrete tax benefit of $4.4 million relating to the consequences of the Tax Act (discussed below) and a tax benefit associated with our Swiss and Israeli operations, offset in part by tax expense associated with our U.S. and UK operations.

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 December 31, 2018, we had a total valuation allowance of $32.3 million against our deferred tax assets given the uncertainty of recoverability of these amounts. The change in our valuation allowance during the six months ended December 31, 2018 include the reduction in valuation allowance as a result of the adoption of the new accounting standard for revenue recognition.

U.S. Tax Cuts and Jobs Act

The U.S. Tax Cuts and Jobs Act (the Tax Act) was signed into U.S. law on December 22, 2017 and made broad and complex changes to the U.S. tax code. This legislation contained a variety of income tax changes, including a reduction to the federal corporate income tax rate from 35% to 21%, a repeal of the corporate alternative minimum tax, a one-time transition tax on accumulated foreign earnings, a move to a territorial tax system, a limitation on the tax deductibility of interest expense and an acceleration of tax deductions for qualifying capital expenditures.

The Tax Act resulted in four consequences to us in our prior fiscal year, as follows:

• Assessing whether we would incur any tax liability under the one-time transition tax. Under the Tax Act, un-repatriated foreign earnings post-1986 are subject to a one-time transition tax at rates that vary depending on the composition of foreign assets. We did not incur any transition tax liability due to our accumulated deficit position with respect to our foreign subsidiaries.

• Re-valuing our U.S. deferred tax balances to reflect lower income tax rates. Deferred tax assets and deferred tax liabilities are recorded based on the income tax rates expected to be in effect when book and tax basis differences reverse. We are in a net U.S. deferred tax liability position. During the fiscal year ended June 30, 2018 we reduced the carrying value of our net deferred tax liabilities to reflect the impact of lower future income tax rates and recognized a non-recurring income tax benefit of $3.7 million.

• Recognizing the ability to recover amounts paid for alternative minimum tax. The Tax Act eliminated the alternative minimum tax calculation and provided for the ability to recover certain amounts previously paid for such tax. We expect to receive a tax refund of $0.7 million and recognized a non-recurring income tax benefit in this amount in the fiscal year ended June 30, 2018.

• Reversal of indefinite-lived deferred tax liabilities as a source of future taxable income when assessing the realizability of indefinite-lived net operating loss carryforwards. Under the Tax Act, net operating loss carryforwards arising in tax years beginning after December 31, 2017 are limited to 80% of taxable income in any year, and net operating losses generated in tax years ending after December 31, 2017 can be carried forward indefinitely. Based on the projection of future reversals of our deferred tax differences as of June 30, 2018 we determined that a portion of our indefinite-lived deferred tax liabilities could be used as a source of taxable income when assessing the realizability of future indefinite-lived net operating loss carryforwards. Accordingly, we recognized an income tax benefit of $4.1 million through a reduction to our valuation allowance in the fiscal year ended June 30, 2018.

All of our accounting calculations and financial reporting positions for consequences arising from the Tax Act are final as of December 31, 2018.

A provision of the Tax Act subjects a U.S. shareholder to current tax on “global intangible low-taxed income” (GILTI) of its controlled foreign corporations. We have elected to treat any tax related to GILTI as current tax expense in the period the tax is incurred.

The Tax Act also provides that the repatriation to the U.S. of foreign earnings can be done without federal tax consequence. During fiscal year 2018, as a result of the Tax Act provisions, we reassessed and changed our assertion that cumulative earnings by our UK and Switzerland subsidiaries were indefinitely reinvested. We continue to permanently reinvest the earnings, if any, of our international subsidiaries other than the UK and Switzerland and therefore we do not provide for U.S. income taxes or withholding taxes that could result from the distribution of those earnings to the U.S. parent. If any such earnings were ultimately distributed to the U.S. in the form of dividends or otherwise, or if the shares of our international subsidiaries were sold or transferred, we would likely be subject to additional U.S. state income taxes. It is not practicable to estimate the amount of unrecognized deferred U.S. taxes on these undistributed earnings.

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Goodwill and Other Intangible Assets

6 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

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 December 31, 2018, the carrying value of goodwill for all of our reporting units was $200.8 million.

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

	As of December 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Weighted Average Remaining Life
	(in thousands)							(in years)
Amortized intangible assets:
Customer related	$	207,608	$	(138,800	)	$	68,808		8.4
Core technology		129,987		(86,373	)		43,614		7.8
Other intangible assets		21,954		(18,123	)		3,831		5.1
Capitalized software development costs		21,282		(7,946	)		13,336		3.5
Software (1)		68,153		(37,606	)		30,547		4.5
Total	$	448,984	$	(288,848	)	$	160,136
Unamortized intangible assets:
Goodwill							200,786
Total intangible assets						$	360,922

	As of June 30, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Weighted Average Remaining Life
	(in thousands)							(in years)
Amortized intangible assets:
Customer related	$	201,214	$	(134,133	)	$	67,081		8.4
Core technology		130,257		(82,815	)		47,442		8.1
Other intangible assets		21,983		(17,299	)		4,684		5.3
Capitalized software development costs		19,527		(6,265	)		13,262		4.0
Software (1)		62,711		(33,395	)		29,316		4.5
Total	$	435,692	$	(273,907	)	$	161,785
Unamortized intangible assets:
Goodwill							200,024
Total intangible assets						$	361,809

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

Estimated amortization expense for the remainder of fiscal year 2019 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 December 31, 2018, is as follows:

	Acquired Intangible Assets		Capitalized Software Development Costs		Software
	(in thousands)
Remaining 2019	$	10,211	$	1,761	$	4,555
2020		18,428		3,521		7,944
2021		17,336		3,521		5,652
2022		15,222		3,521		4,061
2023		14,019		607		2,416
2024 and thereafter		41,037		77		2,686

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 Transactional Documents			Other		Total
	(in thousands)
Balance at June 30, 2018 (1)	$	90,270		$	35,880	$	65,680		$	8,194	$	200,024
Goodwill acquired during the period		—			—		2,651			—		2,651
Impact of foreign currency translation		(199	)		—		(1,690	)		—		(1,889	)
Balance at December 31, 2018 (1)	$	90,071		$	35,880	$	66,641		$	8,194	$	200,786

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

There can be no assurance that there will not be impairment charges in future periods as a result of future impairment reviews. To the extent that future impairment charges occur, it would likely have a material impact on our financial results.

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Commitments and Contingencies

6 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 10—Commitments and Contingencies

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.

Restructuring

During the three and six months ended December 31, 2018 we recorded restructuring expenses associated with a facility exit of $0.1 million and $0.6 million, respectively, primarily within our general and administrative expense line.

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Indebtedness

6 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Indebtedness

Note 11—Indebtedness

Credit Agreement

We are party to a credit agreement (the Credit Agreement) that provides for a five-year revolving credit facility in the amount of up to $300 million (the Credit Facility), which was amended on July 16, 2018. We also have the right to request an increase of the aggregate commitments under the Credit Facility by up to $150 million, subject to specified conditions. The Credit Facility expires in July 2023. During the six months ended December 31, 2018, we used $40.0 million of cash on hand to pay down a portion of our borrowings due under the Credit Facility and at December 31, 2018 we owed $110 million.

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 December 31, 2018, we were in compliance with the covenants associated with the Credit Facility.

Warrants

In December 2012, we received aggregate proceeds of $25.8 million, net of issue costs, from the sale of warrants for the purchase of up to 6.3 million shares of our common stock at a strike price of $40.04 per share. The warrants were exercisable in equal tranches over a period of 150 days beginning on March 1, 2018 and ending on October 2, 2018. Each warrant was exercisable into one share of our common stock. During the six months ended December 31, 2018, we issued approximately 932 thousand shares of common stock related to the warrants exercised by the holders and all warrant exercises were net settled. There were no warrants outstanding as of December 31, 2018.

Note Payable

We financed a portion of the purchase price for our acquisition of Decillion by entering into a note payable for 2.5 million Singapore Dollars (approximately $1.8 million based on the exchange rate in effect at the acquisition date). The note is payable in equal installments over ten quarters, with the final installment due in the quarter ended December 31, 2019.

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Derivative Instruments

6 Months Ended

Dec. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Note 12—Derivative Instruments

Cash Flow Hedges

Interest Rate Swap

In July 2017, we entered into an interest rate swap to hedge our exposure to interest rate risk. The agreement has a notional value of $100.0 million, was effective as of December 1, 2017 and expires on December 1, 2021. The notional amount of the swap matches the corresponding principal amount of a portion of our borrowings under the Credit Facility. During the term of the agreement, we have a fixed interest rate of 1.9275 percent on the notional amount 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.

We designated the interest rate swap as a hedging instrument and it qualified for hedge accounting upon inception and at December 31, 2018. To continue to qualify for hedge accounting, the instrument 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 swap and their respective locations in our consolidated balance sheets at December 31, 2018 and June 30, 2018 were as follows:

Description	Balance Sheet Location	December 31, 2018		June 30, 2018
		(in thousands)
Derivative interest rate swap
Short-term derivative asset	Prepaid expenses and other current assets	$	562	$	407
Long-term derivative asset	Other assets	$	917	$	2,183

The following tables present the effect of our derivative interest rate swap and related tax effects in AOCI for the six months ended December 31, 2018 and 2017.

	June 30, 2018		Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)			Amount of Gain (Loss) Reclassified from AOCI into Net Income (Loss) (Effective Portion) (1)			Income Tax Benefit (Provision) in OCI on Derivative Instruments			December 31, 2018
	(in thousands)
Derivative interest rate swap	$	2,590	$	(974	)	$	137		$	—		$	1,479
	June 30, 2017		Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)			Amount of Gain (Loss) Reclassified from AOCI into Net Income (Loss) (Effective Portion) (1)			Income Tax Benefit (Provision) in OCI on Derivative Instruments			December 31, 2017
	(in thousands)
Derivative interest rate swap	$	—	$	569		$	(48	)	$	(248	)	$	369

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

During the three and six months ended December 31, 2018, we concluded that no portion of the hedge was ineffective.

As of December 31, 2018, there was $1.5 million of unrealized gain in accumulated other comprehensive loss. We expect to reclassify approximately $0.6 million of this unrealized gain from accumulated other comprehensive loss to earnings over the next twelve months.

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Postretirement and Other Employee Benefits

6 Months Ended

Dec. 31, 2018

Retirement Benefits [Abstract]

Postretirement and Other Employee Benefits

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 December 31,						Six Months Ended December 31,
	2018			2017			2018			2017
	(in thousands)
Components of net periodic cost
Service cost	$	630		$	624		$	1,275		$	1,264
Interest cost		114			87			230			176
Prior service credit		(77	)		(22	)		(155	)		(45	)
Net actuarial loss		54			54			110			109
Expected return on plan assets		(345	)		(294	)		(698	)		(595	)
Net periodic cost	$	376		$	449		$	762		$	909

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

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Subsequent Events

6 Months Ended

Dec. 31, 2018

Subsequent Events [Abstract]

Subsequent Events

Note 14—Subsequent Events

In January 2019, we purchased a building in Reading, UK for 16 million British Pound Sterling (approximately $20.7 million based on exchange rates in effect at the purchase date), funded with existing cash on hand. The building will replace our current Reading, UK building as our European headquarters.

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Recent Accounting Pronouncements (Policies)

6 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Recently Adopted Pronouncements and Accounting Pronouncements to be Adopted

Recently Adopted Pronouncements

Revenue Recognition: In May 2014, the Financial Accounting Standard Board (FASB) issued an accounting standard update for new revenue recognition guidance, superseding nearly all prior revenue recognition guidance. The new revenue standard outlines a single comprehensive model for accounting for revenue from contracts with customers and requires more detailed revenue disclosures. The core principle of the new standard is that revenue is to be recognized in a manner that depicts the transfer of promised goods or services to customers at amounts that reflect the consideration which the entity expects to be entitled under the arrangement.

We adopted the new revenue standard on July 1, 2018 using the modified retrospective method of adoption applied to open contracts at that date and upon adoption recorded a $26.3 million decrease to our accumulated deficit balance. The adjustments we recorded at transition were composed of:

	(in thousands)
Decrease to accounts receivable	$	(1,914	)
Increase to contract assets		5,118
Decrease to deferred revenue		9,839
Increase to capitalized fulfillment costs		11,648
Increase to capitalized sales commissions		4,952
Tax effects		(3,380	)
Total decrease to accumulated deficit	$	26,263

The adjustment to accounts receivable relates primarily to unbilled receivables reclassified as contract assets. The increase to contract assets relates to revenue recognized in excess of the amount billed to the customer and the right to payment contingent on conditions other than simply the passage of time, such as the completion of a related performance obligation. Adjustments to deferred revenue relate primarily to the acceleration of revenue under the new standard as compared to the previous revenue recognition standard. This largely relates to transactions where, under legacy GAAP, revenue was deferred due to a lack of vendor specific objective evidence of fair value, transactions accounted for under a combined services arrangement which resulted in revenue recognition over time, transactions that had contractually stipulated price increases that were accounted for as the increases occurred and certain contingent revenue arrangements. Adjustments to capitalized fulfillment costs and capitalized sales commissions reflect the requirement to capitalize these costs under the new standard; prior to adoption, we expensed these costs as incurred. Capitalized costs are recorded as components of our prepaid expenses and other current assets and other assets in our consolidated balance sheet.

Please refer to Note 3 Revenue Recognition for discussion of the adoption of this new standard.

Financial Instruments - Classification and Measurement: In January 2016, the FASB issued an accounting standard update which requires that entities measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value, with changes in fair value recognized in earnings. Entities will no longer be able to recognize unrealized holding gains and losses on equity securities classified as available for sale as a component of other comprehensive income (OCI). Subject to certain exceptions, entities will be able to elect to record equity investments without readily determinable fair values at cost, less impairment, plus or minus adjustments for observable price changes, with all such changes recognized in earnings. This standard does not change the guidance for classifying and measuring investments in debt securities and loans. We adopted this standard effective July 1, 2018 and it did not have an impact on our financial statements, but could impact our financial statements in the future if observable price changes occur for investments we hold that do not have readily determinable fair values.

Statement of Cash Flows: In August and November of 2016, the FASB issued updated accounting standards which address the classification and presentation of certain cash receipts, cash payments and restricted cash in the statement of cash flows. We adopted these standards retrospectively on July 1, 2018. Our consolidated balance sheets include cash held for customers and a liability for the same amount. Cash held for customers and the related customer account liabilities arise from certain payment transactions we process on behalf of customers where we collect and hold customer funds for a short transient period before disbursing the cash and settling the liability. Cash we hold on behalf of customers is segregated from our other corporate cash accounts, is not available for use by us and is considered restricted cash. Prior to the adoption of this standard the change in cash held for customers and the corresponding liability were presented on a net basis in our consolidated statement of cash flows. As a result of adoption, the operating section of our consolidated statement of cash flows now reflects the impact on our total cash position, including the impact of changes in customer account liabilities.

During the six months ended December 31, 2017, the retrospective adoption of this standard resulted in an increase in operating cash flows of approximately $4.6 million.

Defined Benefit Plan Expenses: In March 2017, the FASB issued an accounting standard update that changes the income statement presentation of defined benefit plan expense by requiring separation between operating expense (the service cost component) and non-operating expense (all other components of net periodic defined benefit cost). Under the revised standard, the service cost component is classified consistently with other compensation costs, while all other components are reported in other expense, net. We adopted this standard retrospectively on July 1, 2018 and reclassified approximately $0.2 million and $0.4 million from income from operations to other expense, net for the three and six months ended December 31, 2017, respectively, in our consolidated statement of comprehensive loss.

Accounting Pronouncements to be Adopted

Leases: In February 2016, the FASB issued an accounting standard update which requires balance sheet recognition of a lease liability and a corresponding right-of-use asset for all leases with terms longer than twelve months. The pattern of recognition of lease related revenue and expenses will be dependent on its classification. The updated standard requires additional financial statement disclosures. We will adopt this standard on July 1, 2019 and anticipate that the standard will have a material impact to our consolidated balance sheet due to the recognition of right of use assets and lease liabilities and additional disclosures. We expect to adopt the standard using a modified retrospective method as of the date of adoption (July 1, 2019).

Financial Instruments - Credit Losses: In June 2016, the FASB issued an accounting standard update that introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments including trade receivables. 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. This standard is effective for us on July 1, 2020, with early application permitted. We are currently evaluating the anticipated impact of this standard on our financial statements as well as timing of adoption.

Goodwill Impairment: In January 2017, the FASB issued an accounting standard update to simplify the test for goodwill impairment which removes step 2 from the goodwill impairment test. 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. The standard is effective for us on July 1, 2020 on a prospective basis, with early adoption permitted. We do not currently expect the adoption of this standard to have a material impact on our financial statements.

Derivatives and Hedging: In August 2017, the FASB issued an accounting standard update that more closely aligns the results of cash flow and fair value hedge accounting with risk management activities through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. The guidance expands hedge accounting for both nonfinancial and financial risk components and refines the measurement of hedge results to better reflect an entity’s hedging strategies. In October 2018, the FASB issued an accounting standard update to expand the list of United States benchmark interest rates permitted in the application of hedge accounting. The revised standard allows the use of the Overnight Index Swap rate based on the Secured Overnight Financing Rate as a U.S. benchmark interest rate for hedge accounting purposes. These standard updates are required to be adopted concurrently and are effective for us on July 1, 2019. We are currently evaluating the anticipated impact of these standards on our financial statements.

Share-Based Compensation - Nonemployee Share-Based Payment Accounting: In June 2018, the FASB issued an accounting standard update to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees. Under the revised standard, measurement of nonemployee awards will be fixed at the grant date by estimating the fair value of the equity instruments to be issued. Additionally, during the vesting period, nonemployee awards that contain a performance condition that affects the quantity or other terms of the award will be measured based on the probable outcome. Upon adoption, entities must recognize a cumulative-effect adjustment to retained earnings as of the beginning of the annual period of adoption for equity-classified nonemployee awards for which a measurement date has not been established and liability-classified nonemployee awards that have not been settled. This standard is effective for us on July 1, 2019. We do not currently expect the adoption of this standard to have a material impact on our financial statements.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

We have certain financial instruments which consist of cash and cash equivalents, cash held for customers, marketable securities, accounts receivable, accounts payable, customer account liabilities, a derivative interest rate swap and debt drawn on our Credit Facility (as defined in Note 11). Fair value information for each of these instruments is as follows:

• Cash and cash equivalents, cash 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 December 31, 2018 and June 30, 2018, 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 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 swap is based on the present value of projected cash flows that will occur over the life of the instrument, after considering certain contractual terms of the arrangement 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 $1.3 million and $1.4 million at December 31, 2018 and June 30, 2018, respectively, which approximated fair value.

• We have certain other investments for which there is no readily determinable fair value. The carrying value of these investments was $4.4 million at both December 31, 2018 and June 30, 2018, 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 $110 million against our Credit Facility. The fair value of these borrowings, which are classified as Level 2, approximates their carrying value at December 31, 2018, as the instrument carries a variable rate of interest which reflects current market rates.

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Recent Accounting Pronouncements (Tables)

6 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Schedule of Retained Earnings Adjustments

The adjustments we recorded at transition were composed of:

	(in thousands)
Decrease to accounts receivable	$	(1,914	)
Increase to contract assets		5,118
Decrease to deferred revenue		9,839
Increase to capitalized fulfillment costs		11,648
Increase to capitalized sales commissions		4,952
Tax effects		(3,380	)
Total decrease to accumulated deficit	$	26,263

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Revenue Recognition (Tables)

6 Months Ended

Dec. 31, 2018

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

The tables below present our revenue disaggregated by major product category and the related financial statement classification of revenue for the three and six months ended December 31, 2018.

	Three Months Ended December 31, 2018
	Settlement Network Solutions		Legal Spend Management Solutions		Banking Solutions		Payments and Transactional Documents		Healthcare		Other		Total
	(in thousands)
Financial statement classification:
Subscriptions and transactions	$	24,881	$	19,149	$	15,925	$	11,045	$	231	$	57	$	71,288
Software licenses		235		—		2,100		1,499		464		1,367		5,665
Service and maintenance		6,063		—		5,103		12,601		872		2,147		26,786
Other		—		—		—		798		—		309		1,107
Total revenues	$	31,179	$	19,149	$	23,128	$	25,943	$	1,567	$	3,880	$	104,846

	Six Months Ended December 31, 2018
	Settlement Network Solutions		Legal Spend Management Solutions		Banking Solutions		Payments and Transactional Documents		Healthcare		Other		Total
	(in thousands)
Financial statement classification:
Subscriptions and transactions	$	49,163	$	37,545	$	31,591	$	21,614	$	1,057	$	86	$	141,056
Software licenses		807		—		3,426		3,653		883		1,408		10,177
Service and maintenance		12,388		—		10,363		25,360		1,770		4,310		54,191
Other		—		—		—		1,550		—		309		1,859
Total revenues	$	62,358	$	37,545	$	45,380	$	52,177	$	3,710	$	6,113	$	207,283

Summary of Contract Assets and Liabilities

The table below presents our accounts receivable, contract assets and deferred revenue balances as of July 1, 2018 and December 31, 2018.

	July 1,		December 31,
	2018		2018		$ Change
	(in thousands)
Accounts receivable	$	72,391	$	62,902	$	(9,489	)
Contract assets		5,118		6,894		1,776
Deferred revenue		88,888		75,189		(13,699	)

Accounting Standards Update 2014-09 [Member]

Summary of Impact of Adopting the New Revenue Standard on Condensed Consolidated Balance Sheet, Condensed Consolidated Statement of Comprehensive Loss and Condensed Consolidated Statement of Cash Flows

The following tables summarize the impact of adopting the new revenue standard on our consolidated financial statements as of and for the three and six months ended December 31, 2018:

Unaudited Condensed Consolidated Balance Sheet

	At December 31, 2018
(in thousands, unaudited)	As Reported			Adjustments			Balances without adoption of new revenue standard
ASSETS
Current assets:
Cash and cash equivalents	$	87,639		$	—		$	87,639
Cash held for customers		5,382			—			5,382
Marketable securities		8,477			—			8,477
Accounts receivable, net		62,902			1,576			64,478
Prepaid expenses and other current assets		30,205			(11,162	)		19,043
Total current assets		194,605			(9,586	)		185,019
Property and equipment, net		28,876			—			28,876
Goodwill		200,786			—			200,786
Intangible assets, net		160,136			—			160,136
Other assets		33,301			(14,931	)		18,370
Total assets	$	617,704		$	(24,517	)	$	593,187
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	10,166		$	—		$	10,166
Accrued expenses and other current liabilities		29,038			—			29,038
Customer account liabilities		5,382			—			5,382
Deferred revenue		58,496			2,071			60,567
Total current liabilities		103,082			2,071			105,153
Borrowings under credit facility		110,000			—			110,000
Deferred revenue, non-current		16,693			6,542			23,235
Deferred income taxes		7,457			1,619			9,076
Other liabilities		19,627			—			19,627
Total liabilities		256,859			10,232			267,091
Stockholders’ equity
Preferred Stock, $.001 par value		—			—			—
Common Stock, $.001 par value		46			—			46
Additional paid-in-capital		700,520			—			700,520
Accumulated other comprehensive loss		(35,704	)		185			(35,519	)
Treasury stock, at cost		(128,216	)		—			(128,216	)
Accumulated deficit		(175,801	)		(34,934	)		(210,735	)
Total stockholders’ equity		360,845			(34,749	)		326,096
Total liabilities and stockholders’ equity	$	617,704		$	(24,517	)	$	593,187

Unaudited Condensed Consolidated Statement of Comprehensive Income (Loss)

	Three Months Ended December 31, 2018									Six Months Ended December 31, 2018
(in thousands, unaudited)	As Reported			Adjustments			Balances without adoption of new revenue standard			As Reported			Adjustments			Balances without adoption of new revenue standard
Revenues:
Subscriptions and transactions	$	71,288		$	390		$	71,678		$	141,056		$	1,226		$	142,282
Software licenses		5,665			(1,742	)		3,923			10,177			(3,382	)		6,795
Service and maintenance		26,786			514			27,300			54,191			1,227			55,418
Other		1,107			(37	)		1,070			1,859			(37	)		1,822
Total revenues		104,846			(875	)		103,971			207,283			(966	)		206,317
Cost of revenues:
Subscriptions and transactions		31,352			263			31,615			63,021			649			63,670
Software licenses		210			2			212			441			2			443
Service and maintenance		12,528			408			12,936			25,234			801			26,035
Other		891			(30	)		861			1,415			(28	)		1,387
Total cost of revenues		44,981			643			45,624			90,111			1,424			91,535
Gross profit		59,865			(1,518	)		58,347			117,172			(2,390	)		114,782
Operating expenses:
Sales and marketing		22,585			175			22,760			45,607			365			45,972
Product development and engineering		16,815			146			16,961			33,380			178			33,558
General and administrative		11,904			—			11,904			25,769			—			25,769
Amortization of acquisition-related intangible assets		5,253			—			5,253			10,579			—			10,579
Total operating expenses		56,557			321			56,878			115,335			543			115,878
Income from operations		3,308			(1,839	)		1,469			1,837			(2,933	)		(1,096	)
Other expense, net		(858	)		—			(858	)		(1,639	)		—			(1,639	)
Income (loss) before income taxes		2,450			(1,839	)		611			198			(2,933	)		(2,735	)
Benefit (expense) from income taxes		3,519			4,797			(1,278	)		4,853			5,738			(885	)
Net income (loss)	$	5,969		$	(6,636	)	$	(667	)	$	5,051		$	(8,671	)	$	(3,620	)
Net income (loss) per share:
Basic	$	0.15		$	(0.17	)	$	(0.02	)	$	0.13		$	(0.22	)	$	(0.09	)
Diluted	$	0.14		$	(0.16	)	$	(0.02	)	$	0.12		$	(0.21	)	$	(0.09	)
Shares used in computing net income (loss) per share:
Basic		40,635			—			40,635			40,162			—			40,162
Diluted		41,739			(1,104	)		40,635			41,662			(1,500	)		40,162
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available for sale securities		8			—			8			6			—			6
Unrealized gain (loss) on interest rate hedging transactions		(1,438	)		—			(1,438	)		(1,111	)		—			(1,111	)
Minimum pension liability adjustments		(10	)		—			(10	)		(56	)		—			(56	)
Foreign currency translation adjustments		(2,543	)		125			(2,418	)		(3,910	)		185			(3,725	)
Other comprehensive loss, net of tax:		(3,983	)		125			(3,858	)		(5,071	)		185			(4,886	)
Comprehensive income (loss)	$	1,986		$	(6,511	)	$	(4,525	)	$	(20	)	$	(8,486	)	$	(8,506	)

Unaudited Condensed Consolidated Statement of Cash Flows

	Six Months Ended December 31, 2018
(in thousands, unaudited)	As Reported			Adjustments			Balances without adoption of new revenue standard
Operating activities:
Net income (loss)	$	5,051		$	(8,671	)	$	(3,620	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of acquisition-related intangible assets		10,579			—			10,579
Stock-based compensation plan expense		21,891			15			21,906
Depreciation and other amortization		11,191			—			11,191
Gain on sale of cost-method investment		(237	)		—			(237	)
Deferred income tax benefit		(6,177	)		5,738			(439	)
Provision for allowances on accounts receivable		159			—			159
Amortization of debt issuance costs		208			—			208
Amortization of discount on investments		(75	)		—			(75	)
Loss (gain) on disposal of equipment		594			—			594
Loss (gain) on foreign exchange		326			(5	)		321
Changes in operating assets and liabilities:
Accounts receivable		8,827			328			9,155
Prepaid expenses and other current assets		(1,982	)		2,754			772
Other assets		(1,643	)		1,004			(639	)
Accounts payable		403			—			403
Accrued expenses		(4,858	)		—			(4,858	)
Customer account liabilities		2,761			—			2,761
Deferred revenue		(13,491	)		(1,163	)		(14,654	)
Other liabilities		(278	)		—			(278	)
Net cash provided by operating activities	$	33,249		$	—		$	33,249

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Fair Value (Tables)

6 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

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

At December 31, 2018 and June 30, 2018, our assets and liabilities measured at fair value on a recurring basis were as follows:

	December 31, 2018								June 30, 2018
	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)	$	1,756	$	—	$	—	$	1,756	$	154	$	—	$	—	$	154
Available for sale securities - Debt
U.S. Corporate	$	—	$	991	$	—	$	991	$	—	$	3,467	$	—	$	3,467
Government - U.S.		—		7,424		—		7,424		—		6,480		—		6,480
Total available for sale securities	$	—	$	8,415	$	—	$	8,415	$	—	$	9,947	$	—	$	9,947
Short-term derivative interest rate swap	$	—	$	562	$	—	$	562	$	—	$	407	$	—	$	407
Long-term derivative interest rate swap	$	—	$	917	$	—	$	917	$	—	$	2,183	$	—	$	2,183

Marketable Securities by Major Security Type

The table below presents information regarding our marketable securities by major security type as of December 31, 2018 and June 30, 2018.

	December 31, 2018						June 30, 2018
	Held to Maturity		Available for Sale		Total		Held to Maturity		Available for Sale		Total
	(in thousands)
Marketable securities:
Corporate and other debt securities	$	62	$	8,415	$	8,477	$	65	$	9,947	$	10,012
Total marketable securities	$	62	$	8,415	$	8,477	$	65	$	9,947	$	10,012

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:

	December 31, 2018
	(in thousands)
Due within 1 year	$	8,415
Due in 1 year through 5 years		—
Total	$	8,415

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 December 31, 2018 and June 30, 2018, respectively, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:

	At December 31, 2018					At June 30, 2018
	Less than 12 Months
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
Government—U.S.	$	3,476	$	(3	)	$	6,480	$	(6	)
Total	$	3,476	$	(3	)	$	6,480	$	(6	)

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Net Income (Loss) Per Share (Tables)

6 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share

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

	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2017		2018		2017
	(in thousands, except per share amounts)
Numerator - basic and diluted:
Net income (loss)	$	5,969	$	3,088	$	5,051	$	(1,153	)
Denominator:
Shares used in computing basic net income (loss) per share attributable to common stockholders		40,635		38,087		40,162		37,908
Impact of dilutive securities		1,104		1,257		1,500		—
Shares used in computing diluted net income (loss) per share attributable to common stockholders		41,739		39,344		41,662		37,908
Basic net income (loss) per share attributable to common stockholders	$	0.15	$	0.08	$	0.13	$	(0.03	)
Diluted net income (loss) per share attributable to common stockholders	$	0.14	$	0.08	$	0.12	$	(0.03	)

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Operations by Segments and Geographic Areas (Tables)

6 Months Ended

Dec. 31, 2018

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

Segment information for the three and six months ended December 31, 2018 and 2017 according to the segment descriptions above, is as follows:

	Three Months Ended December 31,						Six Months Ended December 31,
	2018			2017			2018			2017
	(in thousands)
Segment revenue:
Cloud Solutions	$	50,328		$	44,518		$	99,903		$	86,962
Banking Solutions		23,128			20,954			45,380			42,275
Payments and Transactional Documents		25,943			25,343			52,177			48,392
Other		5,447			4,380			9,823			8,862
Total segment revenue	$	104,846		$	95,195		$	207,283		$	186,491
Segment measure of profit (loss):
Cloud Solutions	$	10,742		$	9,650		$	21,034		$	19,034
Banking Solutions		1,953			1,148			4,015			3,309
Payments and Transactional Documents		7,785			7,734			15,866			14,094
Other		(461	)		(903	)		(1,474	)		(1,387	)
Total measure of segment profit	$	20,019		$	17,629		$	39,441		$	35,050

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 income (loss) before income taxes is as follows:

	Three Months Ended December 31,						Six Months Ended December 31,
	2018			2017			2018			2017
	(in thousands)
Total measure of segment profit	$	20,019		$	17,629		$	39,441		$	35,050
Less:
Amortization of acquisition-related intangible assets		(5,253	)		(5,702	)		(10,579	)		(10,890	)
Stock-based compensation plan expense		(9,549	)		(8,080	)		(21,891	)		(16,540	)
Acquisition and integration-related expenses		(710	)		(380	)		(1,593	)		(1,372	)
Restructuring benefit (expense)		(54	)		—			(631	)		9
Minimum pension liability adjustments		80			(3	)		155			(38	)
Global ERP system implementation and other costs		(972	)		(1,339	)		(2,553	)		(3,415	)
Other expense, net (1)		(1,111	)		(3,532	)		(2,151	)		(7,995	)
Income (loss) before income taxes	$	2,450		$	(1,407	)	$	198		$	(5,191	)

⁽¹⁾ On July 1, 2018, we adopted an accounting standard update that changes the classification of certain pension related items. For purposes of this reconciliation of segment profit, we have presented pension related adjustments discretely, not as a component of other expense, net.

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 December 31,				Six Months Ended December 31,
	2018		2017		2018		2017
	(in thousands)
Depreciation and other amortization expense:
Cloud Solutions	$	2,880	$	2,535	$	5,809	$	4,978
Banking Solutions		1,859		1,537		3,715		3,029
Payments and Transactional Documents		725		705		1,483		1,344
Other		87		98		184		192
Total depreciation and other amortization expense	$	5,551	$	4,875	$	11,191	$	9,543

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; particularly in respect of financial institution customers located in Australia for which the point of sale was the United States.

	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2017		2018		2017
	(in thousands)
Revenues from unaffiliated customers:
United States	$	65,024	$	58,589	$	127,905	$	115,799
United Kingdom		24,004		22,468		48,371		42,539
Switzerland		9,614		9,148		19,607		18,533
Other		6,204		4,990		11,400		9,620
Total revenues from unaffiliated customers	$	104,846	$	95,195	$	207,283	$	186,491

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 December 31,		At June 30,
	2018		2018
	(in thousands)
Long-lived assets:
United States	$	46,505	$	36,374
United Kingdom		10,023		5,586
Other		4,867		3,488
Total long-lived assets	$	61,395	$	45,448

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Dec. 31, 2018

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 December 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Weighted Average Remaining Life
	(in thousands)							(in years)
Amortized intangible assets:
Customer related	$	207,608	$	(138,800	)	$	68,808		8.4
Core technology		129,987		(86,373	)		43,614		7.8
Other intangible assets		21,954		(18,123	)		3,831		5.1
Capitalized software development costs		21,282		(7,946	)		13,336		3.5
Software (1)		68,153		(37,606	)		30,547		4.5
Total	$	448,984	$	(288,848	)	$	160,136
Unamortized intangible assets:
Goodwill							200,786
Total intangible assets						$	360,922

	As of June 30, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Weighted Average Remaining Life
	(in thousands)							(in years)
Amortized intangible assets:
Customer related	$	201,214	$	(134,133	)	$	67,081		8.4
Core technology		130,257		(82,815	)		47,442		8.1
Other intangible assets		21,983		(17,299	)		4,684		5.3
Capitalized software development costs		19,527		(6,265	)		13,262		4.0
Software (1)		62,711		(33,395	)		29,316		4.5
Total	$	435,692	$	(273,907	)	$	161,785
Unamortized intangible assets:
Goodwill							200,024
Total intangible assets						$	361,809

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

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 Transactional Documents			Other		Total
	(in thousands)
Balance at June 30, 2018 (1)	$	90,270		$	35,880	$	65,680		$	8,194	$	200,024
Goodwill acquired during the period		—			—		2,651			—		2,651
Impact of foreign currency translation		(199	)		—		(1,690	)		—		(1,889	)
Balance at December 31, 2018 (1)	$	90,071		$	35,880	$	66,641		$	8,194	$	200,786

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

Acquired Intangible Assets, Capitalized Software Development Costs and Software [Member]

Schedule of Estimated Amortization Expense

Estimated amortization expense for the remainder of fiscal year 2019 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 December 31, 2018, is as follows:

	Acquired Intangible Assets		Capitalized Software Development Costs		Software
	(in thousands)
Remaining 2019	$	10,211	$	1,761	$	4,555
2020		18,428		3,521		7,944
2021		17,336		3,521		5,652
2022		15,222		3,521		4,061
2023		14,019		607		2,416
2024 and thereafter		41,037		77		2,686

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Derivative Instruments (Tables)

6 Months Ended

Dec. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Fair Values of the Interest Rate Swap

The fair values of the interest rate swap and their respective locations in our consolidated balance sheets at December 31, 2018 and June 30, 2018 were as follows:

Description	Balance Sheet Location	December 31, 2018		June 30, 2018
		(in thousands)
Derivative interest rate swap
Short-term derivative asset	Prepaid expenses and other current assets	$	562	$	407
Long-term derivative asset	Other assets	$	917	$	2,183

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

The following tables present the effect of our derivative interest rate swap and related tax effects in AOCI for the six months ended December 31, 2018 and 2017.

	June 30, 2018		Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)			Amount of Gain (Loss) Reclassified from AOCI into Net Income (Loss) (Effective Portion) (1)			Income Tax Benefit (Provision) in OCI on Derivative Instruments			December 31, 2018
	(in thousands)
Derivative interest rate swap	$	2,590	$	(974	)	$	137		$	—		$	1,479
	June 30, 2017		Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)			Amount of Gain (Loss) Reclassified from AOCI into Net Income (Loss) (Effective Portion) (1)			Income Tax Benefit (Provision) in OCI on Derivative Instruments			December 31, 2017
	(in thousands)
Derivative interest rate swap	$	—	$	569		$	(48	)	$	(248	)	$	369

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

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Postretirement and Other Employee Benefits (Tables)

6 Months Ended

Dec. 31, 2018

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 December 31,						Six Months Ended December 31,
	2018			2017			2018			2017
	(in thousands)
Components of net periodic cost
Service cost	$	630		$	624		$	1,275		$	1,264
Interest cost		114			87			230			176
Prior service credit		(77	)		(22	)		(155	)		(45	)
Net actuarial loss		54			54			110			109
Expected return on plan assets		(345	)		(294	)		(698	)		(595	)
Net periodic cost	$	376		$	449		$	762		$	909

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Recent Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2018	Jul. 01, 2018	Jun. 30, 2018
Item Effected [Line Items]
Decrease to accumulated deficit			$ (175,801)		$ (207,115)
Increase in operating cash flow		$ 4,600
Adjustments for New Accounting Pronouncement [Member] | Other Expense [Member]
Item Effected [Line Items]
Reclassification of income from income (loss) from operations to other expense, net	$ 200	$ 400
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Item Effected [Line Items]
Decrease to accumulated deficit			$ (34,934)	$ 26,263

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Recent Accounting Pronouncements - Schedule of Retained Earnings Adjustments (Detail) - USD ($) $ in Thousands	Jul. 01, 2018	Dec. 31, 2018	Jun. 30, 2018
Retained Earnings Adjustments [Line Items]
Decrease to accounts receivable	$ (72,391)	$ (62,902)
Increase to contract assets	(5,118)	(6,894)
Decrease to deferred revenue		58,496	$ 75,356
Total decrease to accumulated deficit		(175,801)	$ (207,115)
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]
Retained Earnings Adjustments [Line Items]
Decrease to accounts receivable	(1,914)
Increase to contract assets	5,118
Decrease to deferred revenue	9,839	2,071
Increase to capitalized fulfillment costs	11,648
Increase to capitalized sales commissions	4,952
Tax effects	(3,380)
Total decrease to accumulated deficit	$ 26,263	$ (34,934)

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Revenue Recognition - Summary of Revenue Disaggregated by Major Product Category and the Related Financial Statement Classification of Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Disaggregation of Revenue [Line Items]
Total revenues	$ 104,846	$ 95,195	$ 207,283	$ 186,491
Subscriptions and Transactions [Member]
Disaggregation of Revenue [Line Items]
Total revenues	71,288	63,187	141,056	123,901
Software Licenses [Member]
Disaggregation of Revenue [Line Items]
Total revenues	5,665	2,620	10,177	4,985
Service and Maintenance [Member]
Disaggregation of Revenue [Line Items]
Total revenues	26,786	28,433	54,191	55,775
Product and Service, Other [Member]
Disaggregation of Revenue [Line Items]
Total revenues	1,107	955	1,859	1,830
Operating Segments [Member]
Disaggregation of Revenue [Line Items]
Total revenues	104,846	95,195	207,283	186,491
Operating Segments [Member] | Subscriptions and Transactions [Member]
Disaggregation of Revenue [Line Items]
Total revenues	71,288		141,056
Operating Segments [Member] | Software Licenses [Member]
Disaggregation of Revenue [Line Items]
Total revenues	5,665		10,177
Operating Segments [Member] | Service and Maintenance [Member]
Disaggregation of Revenue [Line Items]
Total revenues	26,786		54,191
Operating Segments [Member] | Product and Service, Other [Member]
Disaggregation of Revenue [Line Items]
Total revenues	1,107		1,859
Operating Segments [Member] | Settlement Network Solutions [Member]
Disaggregation of Revenue [Line Items]
Total revenues	31,179		62,358
Operating Segments [Member] | Settlement Network Solutions [Member] | Subscriptions and Transactions [Member]
Disaggregation of Revenue [Line Items]
Total revenues	24,881		49,163
Operating Segments [Member] | Settlement Network Solutions [Member] | Software Licenses [Member]
Disaggregation of Revenue [Line Items]
Total revenues	235		807
Operating Segments [Member] | Settlement Network Solutions [Member] | Service and Maintenance [Member]
Disaggregation of Revenue [Line Items]
Total revenues	6,063		12,388
Operating Segments [Member] | Legal Spend Management Solutions [Member]
Disaggregation of Revenue [Line Items]
Total revenues	19,149		37,545
Operating Segments [Member] | Legal Spend Management Solutions [Member] | Subscriptions and Transactions [Member]
Disaggregation of Revenue [Line Items]
Total revenues	19,149		37,545
Operating Segments [Member] | Banking Solutions [Member]
Disaggregation of Revenue [Line Items]
Total revenues	23,128	20,954	45,380	42,275
Operating Segments [Member] | Banking Solutions [Member] | Subscriptions and Transactions [Member]
Disaggregation of Revenue [Line Items]
Total revenues	15,925		31,591
Operating Segments [Member] | Banking Solutions [Member] | Software Licenses [Member]
Disaggregation of Revenue [Line Items]
Total revenues	2,100		3,426
Operating Segments [Member] | Banking Solutions [Member] | Service and Maintenance [Member]
Disaggregation of Revenue [Line Items]
Total revenues	5,103		10,363
Operating Segments [Member] | Payments and Transactional Documents [Member]
Disaggregation of Revenue [Line Items]
Total revenues	25,943	$ 25,343	52,177	$ 48,392
Operating Segments [Member] | Payments and Transactional Documents [Member] | Subscriptions and Transactions [Member]
Disaggregation of Revenue [Line Items]
Total revenues	11,045		21,614
Operating Segments [Member] | Payments and Transactional Documents [Member] | Software Licenses [Member]
Disaggregation of Revenue [Line Items]
Total revenues	1,499		3,653
Operating Segments [Member] | Payments and Transactional Documents [Member] | Service and Maintenance [Member]
Disaggregation of Revenue [Line Items]
Total revenues	12,601		25,360
Operating Segments [Member] | Payments and Transactional Documents [Member] | Product and Service, Other [Member]
Disaggregation of Revenue [Line Items]
Total revenues	798		1,550
Operating Segments [Member] | Health Care [Member]
Disaggregation of Revenue [Line Items]
Total revenues	1,567		3,710
Operating Segments [Member] | Health Care [Member] | Subscriptions and Transactions [Member]
Disaggregation of Revenue [Line Items]
Total revenues	231		1,057
Operating Segments [Member] | Health Care [Member] | Software Licenses [Member]
Disaggregation of Revenue [Line Items]
Total revenues	464		883
Operating Segments [Member] | Health Care [Member] | Service and Maintenance [Member]
Disaggregation of Revenue [Line Items]
Total revenues	872		1,770
Operating Segments [Member] | Other [Member]
Disaggregation of Revenue [Line Items]
Total revenues	3,880		6,113
Operating Segments [Member] | Other [Member] | Subscriptions and Transactions [Member]
Disaggregation of Revenue [Line Items]
Total revenues	57		86
Operating Segments [Member] | Other [Member] | Software Licenses [Member]
Disaggregation of Revenue [Line Items]
Total revenues	1,367		1,408
Operating Segments [Member] | Other [Member] | Service and Maintenance [Member]
Disaggregation of Revenue [Line Items]
Total revenues	2,147		4,310
Operating Segments [Member] | Other [Member] | Product and Service, Other [Member]
Disaggregation of Revenue [Line Items]
Total revenues	$ 309		$ 309

XML

Revenue Recognition - Additional Information (Detail) - USD ($) $ in Thousands			3 Months Ended	6 Months Ended
	Dec. 31, 2018	Jul. 01, 2018	Dec. 31, 2018	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Performance obligations	$ 367,000		$ 367,000	$ 367,000
Deferred revenue	75,189	$ 88,888	$ 24,700	$ 51,800
Capitalized costs are amortized on a ratable basis over the estimated period			5 years	5 years
Remainder of 2018 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Performance obligations	160,000		$ 160,000	$ 160,000
Capitalized Obtaining Costs [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Capitalized contract costs and capitalized fulfillment costs	5,200		5,200	5,200
Amortization expense			500	800
Capitalized Fulfillment Costs [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Capitalized contract costs and capitalized fulfillment costs	$ 16,300		16,300	16,300
Amortization expense			$ 900	$ 1,400

XML

Revenue Recognition - Summary of Contract Assets and Liabilities (Detail) - USD ($) $ in Thousands			3 Months Ended	6 Months Ended
	Dec. 31, 2018	Jul. 01, 2018	Dec. 31, 2018	Dec. 31, 2018
Contract with Customer, Asset and Liability [Abstract]
Accounts receivable	$ 62,902	$ 72,391	$ 62,902	$ 62,902
Contract assets	6,894	5,118	6,894	6,894
Deferred revenue	75,189	$ 88,888	$ 24,700	$ 51,800
Accounts receivable	(9,489)
Contract assets	1,776
Deferred revenue	$ (13,699)

XML

Revenue Recognition - Summary of Impact of Adopting the New Revenue Standard on Condensed Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Jul. 01, 2018	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 87,639		$ 121,860	$ 64,051
Cash held for customers	5,382		2,753	$ 3,481
Marketable securities	8,477		10,012
Accounts receivable, net	62,902		74,305
Prepaid expenses and other current assets	30,205		19,781
Total current assets	194,605		228,711
Property and equipment, net	28,876		28,895
Goodwill	200,786		200,024
Intangible assets, net	160,136		161,785
Other assets	33,301		16,553
Total assets	617,704		635,968
Current liabilities:
Accounts payable	10,166		10,251
Accrued expenses and other current liabilities	29,038		34,994
Customer account liabilities	5,382		2,753
Deferred revenue	58,496		75,356
Total current liabilities	103,082		123,354
Borrowings under credit facility	110,000		150,000
Deferred revenue, non-current	16,693		23,371
Deferred income taxes	7,457		8,367
Other liabilities	19,627		19,944
Total liabilities	256,859		325,036
Stockholders' equity
Preferred Stock, $.001 par value
Common Stock, $.001 par value	46		45
Additional paid-in-capital	700,520		678,549
Accumulated other comprehensive loss	(35,704)		(30,633)
Treasury stock, at cost	(128,216)		(129,914)
Accumulated deficit	(175,801)		(207,115)
Total stockholders' equity	360,845		310,932
Total liabilities and stockholders' equity	617,704		$ 635,968
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Current assets:
Accounts receivable, net	1,576
Prepaid expenses and other current assets	(11,162)
Total current assets	(9,586)
Other assets	(14,931)
Total assets	(24,517)
Current liabilities:
Deferred revenue	2,071	$ 9,839
Total current liabilities	2,071
Deferred revenue, non-current	6,542
Deferred income taxes	1,619
Total liabilities	10,232
Stockholders' equity
Preferred Stock, $.001 par value
Accumulated other comprehensive loss	185
Accumulated deficit	(34,934)	$ 26,263
Total stockholders' equity	(34,749)
Total liabilities and stockholders' equity	(24,517)
Accounting Standards Update 2014-09 [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Current assets:
Cash and cash equivalents	87,639
Cash held for customers	5,382
Marketable securities	8,477
Accounts receivable, net	64,478
Prepaid expenses and other current assets	19,043
Total current assets	185,019
Property and equipment, net	28,876
Goodwill	200,786
Intangible assets, net	160,136
Other assets	18,370
Total assets	593,187
Current liabilities:
Accounts payable	10,166
Accrued expenses and other current liabilities	29,038
Customer account liabilities	5,382
Deferred revenue	60,567
Total current liabilities	105,153
Borrowings under credit facility	110,000
Deferred revenue, non-current	23,235
Deferred income taxes	9,076
Other liabilities	19,627
Total liabilities	267,091
Stockholders' equity
Preferred Stock, $.001 par value
Common Stock, $.001 par value	46
Additional paid-in-capital	700,520
Accumulated other comprehensive loss	(35,519)
Treasury stock, at cost	(128,216)
Accumulated deficit	(210,735)
Total stockholders' equity	326,096
Total liabilities and stockholders' equity	$ 593,187

XML

Revenue Recognition - Summary of Impact of Adopting the New Revenue Standard on Condensed Consolidated Balance Sheet (Parenthetical) (Detail) - $ / shares	Dec. 31, 2018	Jun. 30, 2018
Revenue from Contract with Customers [Line Items]
Preferred Stock, $.001 par value	$ 0.001	$ 0.001
Common Stock, $.001 par value	0.001	$ 0.001
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Revenue from Contract with Customers [Line Items]
Preferred Stock, $.001 par value	0.001
Common Stock, $.001 par value	0.001
Accounting Standards Update 2014-09 [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Revenue from Contract with Customers [Line Items]
Preferred Stock, $.001 par value	0.001
Common Stock, $.001 par value	$ 0.001

XML

Revenue Recognition - Summary of Impact of Adopting the New Revenue Standard on Condensed Consolidated Statement of Comprehensive Income (Loss) (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Revenues:
Revenues	$ 104,846	$ 95,195	$ 207,283	$ 186,491
Cost of revenues:
Total cost of revenues	44,981	41,175	90,111	81,734
Gross profit	59,865	54,020	117,172	104,757
Operating expenses:
Sales and marketing	22,585	21,441	45,607	40,790
Product development and engineering	16,815	13,938	33,380	27,802
General and administrative	11,904	10,989	25,769	22,826
Amortization of acquisition-related intangible assets	5,253	5,702	10,579	10,890
Total operating expenses	56,557	52,070	115,335	102,308
Income from operations	3,308	1,950	1,837	2,449
Other expense, net	(858)		(1,639)
Income (loss) before income taxes	2,450	(1,407)	198	(5,191)
Benefit (expense) from income taxes	3,519	4,495	4,853	4,038	$ 4,100
Net income (loss)	$ 5,969	$ 3,088	$ 5,051	$ (1,153)
Net income (loss) per share:
Basic	$ 0.15	$ 0.08	$ 0.13	$ (0.03)
Diluted	$ 0.14	$ 0.08	$ 0.12	$ (0.03)
Shares used in computing net income (loss) per share:
Basic	40,635	38,087	40,162	37,908
Diluted	41,739	39,344	41,662	37,908
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available for sale securities	$ 8	$ (3)	$ 6	$ (3)
Unrealized gain (loss) on interest rate hedging transactions	(1,438)	604	(1,111)	369
Minimum pension liability adjustments	(10)	38	(56)	142
Foreign currency translation adjustments	(2,543)	773	(3,910)	2,146
Other comprehensive loss, net of tax:	(3,983)	1,412	(5,071)	2,654
Comprehensive income (loss)	1,986	4,500	(20)	1,501
Subscriptions and Transactions [Member]
Revenues:
Revenues	71,288	63,187	141,056	123,901
Cost of revenues:
Cost of revenue	31,352	27,211	63,021	54,633
Software Licenses [Member]
Revenues:
Revenues	5,665	2,620	10,177	4,985
Cost of revenues:
Cost of revenue	210	229	441	399
Service and Maintenance [Member]
Revenues:
Revenues	26,786	28,433	54,191	55,775
Cost of revenues:
Cost of revenue	12,528	13,034	25,234	25,334
Product and Service, Other [Member]
Revenues:
Revenues	1,107	955	1,859	1,830
Cost of revenues:
Cost of revenue	891	$ 701	1,415	$ 1,368
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Revenues:
Revenues	(875)		(966)
Cost of revenues:
Total cost of revenues	643		1,424
Gross profit	(1,518)		(2,390)
Operating expenses:
Sales and marketing	175		365
Product development and engineering	146		178
Total operating expenses	321		543
Income from operations	(1,839)		(2,933)
Income (loss) before income taxes	(1,839)		(2,933)
Benefit (expense) from income taxes	4,797		5,738
Net income (loss)	$ (6,636)		$ (8,671)
Net income (loss) per share:
Basic	$ (0.17)		$ (0.22)
Diluted	$ (0.16)		$ (0.21)
Shares used in computing net income (loss) per share:
Diluted	(1,104)		(1,500)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	$ 125		$ 185
Other comprehensive loss, net of tax:	125		185
Comprehensive income (loss)	(6,511)		(8,486)
Accounting Standards Update 2014-09 [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Revenues:
Revenues	103,971		206,317
Cost of revenues:
Total cost of revenues	45,624		91,535
Gross profit	58,347		114,782
Operating expenses:
Sales and marketing	22,760		45,972
Product development and engineering	16,961		33,558
General and administrative	11,904		25,769
Amortization of acquisition-related intangible assets	5,253		10,579
Total operating expenses	56,878		115,878
Income from operations	1,469		(1,096)
Other expense, net	(858)		(1,639)
Income (loss) before income taxes	611		(2,735)
Benefit (expense) from income taxes	(1,278)		(885)
Net income (loss)	$ (667)		$ (3,620)
Net income (loss) per share:
Basic	$ (0.02)		$ (0.09)
Diluted	$ (0.02)		$ (0.09)
Shares used in computing net income (loss) per share:
Basic	40,635		40,162
Diluted	40,635		40,162
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available for sale securities	$ 8		$ 6
Unrealized gain (loss) on interest rate hedging transactions	(1,438)		(1,111)
Minimum pension liability adjustments	(10)		(56)
Foreign currency translation adjustments	(2,418)		(3,725)
Other comprehensive loss, net of tax:	(3,858)		(4,886)
Comprehensive income (loss)	(4,525)		(8,506)
Accounting Standards Update 2014-09 [Member] | Subscriptions and Transactions [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Revenues:
Revenues	390		1,226
Cost of revenues:
Cost of revenue	263		649
Accounting Standards Update 2014-09 [Member] | Subscriptions and Transactions [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Revenues:
Revenues	71,678		142,282
Cost of revenues:
Cost of revenue	31,615		63,670
Accounting Standards Update 2014-09 [Member] | Software Licenses [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Revenues:
Revenues	(1,742)		(3,382)
Cost of revenues:
Cost of revenue	2		2
Accounting Standards Update 2014-09 [Member] | Software Licenses [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Revenues:
Revenues	3,923		6,795
Cost of revenues:
Cost of revenue	212		443
Accounting Standards Update 2014-09 [Member] | Service and Maintenance [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Revenues:
Revenues	514		1,227
Cost of revenues:
Cost of revenue	408		801
Accounting Standards Update 2014-09 [Member] | Service and Maintenance [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Revenues:
Revenues	27,300		55,418
Cost of revenues:
Cost of revenue	12,936		26,035
Accounting Standards Update 2014-09 [Member] | Product and Service, Other [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Revenues:
Revenues	(37)		(37)
Cost of revenues:
Cost of revenue	(30)		(28)
Accounting Standards Update 2014-09 [Member] | Product and Service, Other [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Revenues:
Revenues	1,070		1,822
Cost of revenues:
Cost of revenue	$ 861		$ 1,387

XML

Revenue Recognition - Summary of Impact of Adopting the New Revenue Standard on Condensed Consolidated Statement of Cash Flows (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Operating activities:
Net income (loss)	$ 5,969	$ 3,088	$ 5,051	$ (1,153)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of acquisition-related intangible assets	5,253	5,702	10,579	10,890
Stock-based compensation plan expense			21,891	16,540
Depreciation and other amortization	5,551	$ 4,875	11,191	9,543
Gain on sale of cost-method investment			(237)
Deferred income tax benefit			(6,177)	(4,745)
Provision for allowances on accounts receivable			159	75
Amortization of debt issuance costs			208	711
Amortization of discount on investments			(75)	(5)
Loss (gain) on disposal of equipment			594	(10)
Loss (gain) on foreign exchange			326	(26)
Changes in operating assets and liabilities:
Accounts receivable			8,827	(12,326)
Prepaid expenses and other current assets			(1,982)	(1,089)
Other assets			(1,643)	926
Accounts payable			403	(145)
Accrued expenses			(4,858)	(1,932)
Customer account liabilities			2,761	(4,588)
Deferred revenue			(13,491)	(12,443)
Other liabilities			(278)	(697)
Net cash provided by operating activities			33,249	$ 5,100
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Operating activities:
Net income (loss)	(6,636)		(8,671)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation plan expense			15
Deferred income tax benefit			5,738
Loss (gain) on foreign exchange			(5)
Changes in operating assets and liabilities:
Accounts receivable			328
Prepaid expenses and other current assets			2,754
Other assets			1,004
Deferred revenue			(1,163)
Accounting Standards Update 2014-09 [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Operating activities:
Net income (loss)	(667)		(3,620)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of acquisition-related intangible assets	$ 5,253		10,579
Stock-based compensation plan expense			21,906
Depreciation and other amortization			11,191
Gain on sale of cost-method investment			(237)
Deferred income tax benefit			(439)
Provision for allowances on accounts receivable			159
Amortization of debt issuance costs			208
Amortization of discount on investments			(75)
Loss (gain) on disposal of equipment			594
Loss (gain) on foreign exchange			321
Changes in operating assets and liabilities:
Accounts receivable			9,155
Prepaid expenses and other current assets			772
Other assets			(639)
Accounts payable			403
Accrued expenses			(4,858)
Customer account liabilities			2,761
Deferred revenue			(14,654)
Other liabilities			(278)
Net cash provided by operating activities			$ 33,249

XML

Fair Value - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Assets
Total available for sale debt securities	$ 8,415	$ 9,947
Fair Value, Measurements, Recurring [Member]
Assets
Money market funds (cash and cash equivalents)	1,756	154
Total available for sale debt securities	8,415	9,947
Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member]
Assets
Short-term derivative interest rate swap	562	407
Long-term derivative interest rate swap	917	2,183
Fair Value, Measurements, Recurring [Member] | U.S. Corporate [Member]
Assets
Total available for sale debt securities	991	3,467
Fair Value, Measurements, Recurring [Member] | Government - U.S. [Member]
Assets
Total available for sale debt securities	7,424	6,480
Fair Value, Measurements, Recurring [Member] | Level 1 [Member]
Assets
Money market funds (cash and cash equivalents)	1,756	154
Fair Value, Measurements, Recurring [Member] | Level 2 [Member]
Assets
Total available for sale debt securities	8,415	9,947
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Interest Rate Swap [Member]
Assets
Short-term derivative interest rate swap	562	407
Long-term derivative interest rate swap	917	2,183
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | U.S. Corporate [Member]
Assets
Total available for sale debt securities	991	3,467
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Government - U.S. [Member]
Assets
Total available for sale debt securities	$ 7,424	$ 6,480

XML

Fair Value - Additional Information (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Certain other investments accounted for at cost	$ 4,400	$ 4,400
Borrowings under credit facility	110,000	150,000
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Borrowings under credit facility	110,000
Israeli Severance Arrangements [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value of assets related to deposits	$ 1,300	$ 1,400

XML

Fair Value - Marketable Securities by Major Security Type (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Marketable Securities [Line Items]
Held to Maturity	$ 62	$ 65
Available for Sale	8,415	9,947
Total	8,477	10,012
Corporate and Other Debt Securities [Member]
Marketable Securities [Line Items]
Held to Maturity	62	65
Available for Sale	8,415	9,947
Total	$ 8,477	$ 10,012

XML

Fair Value - Estimated Fair Value of Our Investments in Available for Sale Marketable Securities Classified (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Fair Value Disclosures [Abstract]
Due within 1 year	$ 8,415
Due in 1 year through 5 years	0
Total	$ 8,415	$ 9,947

XML

Fair Value - Summary of Gross Unrealized Losses and Fair Values of Available for Sale Investments (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Schedule Of Available For Sale Securities Debt Maturities [Line Items]
Less than 12 Months, Fair Value	$ 3,476	$ 6,480
Less than 12 Months, Unrealized Loss	(3)	(6)
Government - U.S. [Member]
Schedule Of Available For Sale Securities Debt Maturities [Line Items]
Less than 12 Months, Fair Value	3,476	6,480
Less than 12 Months, Unrealized Loss	$ (3)	$ (6)

XML

Acquisitions - Fiscal Year 2019 Acquisition - Additional Information (Detail) $ in Thousands, £ in Millions			6 Months Ended
	Jul. 02, 2018 USD ($)	Jul. 02, 2018 GBP (£)	Dec. 31, 2018 USD ($)	Jun. 30, 2018 USD ($)
Business Acquisition [Line Items]
Goodwill			$ 200,786	$ 200,024
Microgen Banking Systems Limited [Member]
Business Acquisition [Line Items]
Payments to acquire business	$ 9,100	£ 6.9
Goodwill			2,700
Identifiable intangible assets			$ 8,400
Estimated useful life of intangible assets acquired			13 years
Acquisition expenses			$ 200

XML

Acquisitions - Fiscal Year 2018 Acquisitions - Additional Information (Detail) £ in Millions, $ in Millions, $ in Millions					12 Months Ended
	Oct. 04, 2017 USD ($) shares	Oct. 04, 2017 GBP (£) shares	Aug. 14, 2017 USD ($) Installment	Aug. 14, 2017 SGD ($) Installment	Jun. 30, 2018 USD ($) Business	Aug. 14, 2017 SGD ($)
Business Acquisition [Line Items]
Number of business acquired | Business					2
Payments to acquire business					$ 18.5
First Capital Cashflow Ltd. [Member]
Business Acquisition [Line Items]
Cash paid for acquisition	$ 13.9	£ 10.5
Shares issued | shares	42,080	42,080
Stock vesting period	5 years	5 years
Decillion Solutions Pte Ltd [Member]
Business Acquisition [Line Items]
Payments to acquire business			$ 4.6	$ 6.2
Cash paid for acquisition			2.8
Note payable			$ 1.8			$ 2.5
Note payable, number of installments | Installment			10	10

XML

Net Income (Loss) Per Share - Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Numerator - basic and diluted:
Net income (loss)	$ 5,969	$ 3,088	$ 5,051	$ (1,153)
Denominator:
Shares used in computing basic net income (loss) per share attributable to common stockholders	40,635	38,087	40,162	37,908
Impact of dilutive securities	$ 1,104	$ 1,257	$ 1,500
Shares used in computing diluted net income (loss) per share attributable to common stockholders	41,739	39,344	41,662	37,908
Basic	$ 0.15	$ 0.08	$ 0.13	$ (0.03)
Diluted	$ 0.14	$ 0.08	$ 0.12	$ (0.03)

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Net Income (Loss) Per Share - Additional Information (Detail) shares in Millions	6 Months Ended
	Dec. 31, 2017 shares
Earnings Per Share [Abstract]
Anti-dilutive securities excluded from calculation of diluted earnings per share	2.8
Number of shares purchased through issue of warrants	6.3

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Operations by Segments and Geographic Areas - Additional Information (Detail)	6 Months Ended
	Dec. 31, 2018 Segment
Segment Reporting [Abstract]
Number of reportable segments	4

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Operations by Segments and Geographic Areas - Schedule of Segment Reporting Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Segment revenue:
Total segment revenue	$ 104,846	$ 95,195	$ 207,283	$ 186,491
Segment measure of profit (loss):
Total measure of segment profit	3,308	1,950	1,837	2,449
Operating Segments [Member]
Segment revenue:
Total segment revenue	104,846	95,195	207,283	186,491
Segment measure of profit (loss):
Total measure of segment profit	20,019	17,629	39,441	35,050
Cloud Solutions [Member] | Operating Segments [Member]
Segment revenue:
Total segment revenue	50,328	44,518	99,903	86,962
Segment measure of profit (loss):
Total measure of segment profit	10,742	9,650	21,034	19,034
Banking Solutions [Member] | Operating Segments [Member]
Segment revenue:
Total segment revenue	23,128	20,954	45,380	42,275
Segment measure of profit (loss):
Total measure of segment profit	1,953	1,148	4,015	3,309
Payments and Transactional Documents [Member] | Operating Segments [Member]
Segment revenue:
Total segment revenue	25,943	25,343	52,177	48,392
Segment measure of profit (loss):
Total measure of segment profit	7,785	7,734	15,866	14,094
Other [Member] | Operating Segments [Member]
Segment revenue:
Total segment revenue	5,447	4,380	9,823	8,862
Segment measure of profit (loss):
Total measure of segment profit	$ (461)	$ (903)	$ (1,474)	$ (1,387)

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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		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total measure of segment profit	$ 3,308	$ 1,950	$ 1,837	$ 2,449
Less:
Amortization of acquisition-related intangible assets	(5,253)	(5,702)	(10,579)	(10,890)
Stock-based compensation plan expense			(21,891)	(16,540)
Other expense, net	(858)	(3,357)	(1,639)	(7,640)
Income (loss) before income taxes	2,450	(1,407)	198	(5,191)
Operating Segments [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total measure of segment profit	20,019	17,629	39,441	35,050
Segment Reconciling Items [Member]
Less:
Amortization of acquisition-related intangible assets	(5,253)	(5,702)	(10,579)	(10,890)
Stock-based compensation plan expense	(9,549)	(8,080)	(21,891)	(16,540)
Acquisition and integration-related expenses	(710)	(380)	(1,593)	(1,372)
Restructuring benefit (expense)	(54)		(631)	9
Minimum pension liability adjustments	80	(3)	155	(38)
Global ERP system implementation and other costs	(972)	(1,339)	(2,553)	(3,415)
Other expense, net	$ (1,111)	$ (3,532)	$ (2,151)	$ (7,995)

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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		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Depreciation and other amortization expense:
Depreciation and other amortization expense	$ 5,551	$ 4,875	$ 11,191	$ 9,543
Cloud Solutions [Member]
Depreciation and other amortization expense:
Depreciation and other amortization expense	2,880	2,535	5,809	4,978
Banking Solutions [Member]
Depreciation and other amortization expense:
Depreciation and other amortization expense	1,859	1,537	3,715	3,029
Payments and Transactional Documents [Member]
Depreciation and other amortization expense:
Depreciation and other amortization expense	725	705	1,483	1,344
Other [Member]
Depreciation and other amortization expense:
Depreciation and other amortization expense	$ 87	$ 98	$ 184	$ 192

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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		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues from unaffiliated customers	$ 104,846	$ 95,195	$ 207,283	$ 186,491
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues from unaffiliated customers	65,024	58,589	127,905	115,799
United Kingdom [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues from unaffiliated customers	24,004	22,468	48,371	42,539
Switzerland [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues from unaffiliated customers	9,614	9,148	19,607	18,533
Other [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues from unaffiliated customers	$ 6,204	$ 4,990	$ 11,400	$ 9,620

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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	Dec. 31, 2018	Jun. 30, 2018
Long-lived assets
Long-lived assets	$ 61,395	$ 45,448
United States [Member]
Long-lived assets
Long-lived assets	46,505	36,374
United Kingdom [Member]
Long-lived assets
Long-lived assets	10,023	5,586
Other [Member]
Long-lived assets
Long-lived assets	$ 4,867	$ 3,488

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Excess tax expense (benefits)	$ (3,519)	$ (4,495)	$ (4,853)	$ (4,038)	$ (4,100)
Discrete tax benefit relating to stock-based compensation	3,300		4,000
Discrete tax benefit relating to the Tax Act		$ 4,400		$ 4,400
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	$ 32,300		$ 32,300
Federal corporate income tax rate			21.00%	35.00%
Non-Recurring income tax benefit					3,700
Expected tax refund					$ 700
Percentage of net operating losses can be carried forward indefinitely	80.00%		80.00%

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Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 200,786	$ 200,024

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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	6 Months Ended	12 Months Ended
	Dec. 31, 2018	Jun. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 448,984	$ 435,692
Accumulated Amortization	(288,848)	(273,907)
Net Carrying Value	160,136	161,785
Goodwill	200,786	200,024
Total intangible assets	360,922	361,809
Customer Related [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	207,608	201,214
Accumulated Amortization	(138,800)	(134,133)
Net Carrying Value	$ 68,808	$ 67,081
Weighted Average Remaining Life	8 years 4 months 24 days	8 years 4 months 24 days
Core Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 129,987	$ 130,257
Accumulated Amortization	(86,373)	(82,815)
Net Carrying Value	$ 43,614	$ 47,442
Weighted Average Remaining Life	7 years 9 months 18 days	8 years 1 month 6 days
Other Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 21,954	$ 21,983
Accumulated Amortization	(18,123)	(17,299)
Net Carrying Value	$ 3,831	$ 4,684
Weighted Average Remaining Life	5 years 1 month 6 days	5 years 3 months 18 days
Software Developed Other Than For Internal Use [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 21,282	$ 19,527
Accumulated Amortization	(7,946)	(6,265)
Net Carrying Value	$ 13,336	$ 13,262
Weighted Average Remaining Life	3 years 6 months	4 years
Software [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 68,153	$ 62,711
Accumulated Amortization	(37,606)	(33,395)
Net Carrying Value	$ 30,547	$ 29,316
Weighted Average Remaining Life	4 years 6 months	4 years 6 months

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Goodwill and Other Intangible Assets - Schedule of Estimated Amortization Expense (Detail) $ in Thousands	Dec. 31, 2018 USD ($)
Finite-Lived Intangible Assets [Line Items]
Remaining 2019	$ 10,211
2020	18,428
2021	17,336
2022	15,222
2023	14,019
2024 and thereafter	41,037
Software Developed Other Than For Internal Use [Member]
Finite-Lived Intangible Assets [Line Items]
Remaining 2019	1,761
2020	3,521
2021	3,521
2022	3,521
2023	607
2024 and thereafter	77
Software [Member]
Finite-Lived Intangible Assets [Line Items]
Remaining 2019	4,555
2020	7,944
2021	5,652
2022	4,061
2023	2,416
2024 and thereafter	$ 2,686

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Goodwill and Other Intangible Assets - Schedule of Rollforward of Goodwill Balances, by Reportable Segment (Detail) $ in Thousands	6 Months Ended
	Dec. 31, 2018 USD ($)
Goodwill [Line Items]
Beginning Balance	$ 200,024
Goodwill acquired during the period	2,651
Impact of foreign currency translation	(1,889)
Ending Balance	200,786
Cloud Solutions [Member]
Goodwill [Line Items]
Beginning Balance	90,270
Impact of foreign currency translation	(199)
Ending Balance	90,071
Banking Solutions [Member]
Goodwill [Line Items]
Beginning Balance	35,880
Ending Balance	35,880
Payments and Transactional Documents [Member]
Goodwill [Line Items]
Beginning Balance	65,680
Goodwill acquired during the period	2,651
Impact of foreign currency translation	(1,690)
Ending Balance	66,641
Other [Member]
Goodwill [Line Items]
Beginning Balance	8,194
Ending Balance	$ 8,194

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Goodwill and Other Intangible Assets - Schedule of Rollforward of Goodwill Balances, by Reportable Segment (Parenthetical) (Detail) - USD ($) $ in Millions	Dec. 31, 2018	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill accumulated impairment loss	$ 7.5	$ 7.5

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Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2018
General and Administrative Expenses [Member]
Contingencies And Commitments [Line Items]
Restructuring expenses	$ 0.1	$ 0.6

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Indebtedness - Additional Information (Detail) $ / shares in Units, $ in Millions		1 Months Ended	6 Months Ended
	Aug. 14, 2017 USD ($) Installment	Dec. 31, 2012 USD ($) $ / shares shares	Dec. 31, 2018 USD ($) shares	Jun. 30, 2020	Aug. 14, 2017 SGD ($)
Debt Instrument [Line Items]
Warrant expiration period		150 days
Exercise of warrants | shares			932,000
Warrants outstanding | shares			0
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Credit agreement date			Dec. 09, 2016
Debt instrument term (years)			5 years
Maximum capacity borrowing amount under credit facility			$ 300,000,000
Borrowings under credit facility			110,000,000
1.50% Convertible Senior Notes Maturing on December 1, 2017 [Member] | Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Proceeds from issuance of warrants, net of issue costs		$ 25,800,000
Purchase of common stock | shares		6,300,000
Common stock, strike price per share | $ / shares		$ 40.04
Warrants [Member]
Debt Instrument [Line Items]
Warrants exercisable beginning		Mar. 01, 2018
Warrants exercisable ending		Oct. 02, 2018
Cash [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Repayment of borrowings			40,000,000
Maximum [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Additional borrowing capacity			$ 150,000,000
Consolidated Net Leverage Ratio			3.75
Maximum [Member] | Step Down [Member] | Scenario, Forecast [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Consolidated Net Leverage Ratio				3.50
Minimum [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Consolidated Interest Coverage Ratio			3.00
Decillion Solutions Pte Ltd [Member]
Debt Instrument [Line Items]
Note payable	$ 1,800,000				$ 2.5
Note payable, number of installments | Installment	10

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Derivative Instruments - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended	6 Months Ended
	Jul. 31, 2017	Dec. 31, 2018	Dec. 31, 2018
Derivatives, Fair Value [Line Items]
Ineffective portion of hedge		$ 0	$ 0
Amounts excluded from assessment of hedge effectiveness		0	0
Unrealized gain in accumulated other comprehensive loss			1,500,000
Reclassification of unrealized gain from accumulated other comprehensive loss to earnings		$ 600,000	$ 600,000
Interest Rate Swap [Member]
Derivatives, Fair Value [Line Items]
Notional debt value	$ 100,000,000
Agreement date	Jul. 31, 2017
Agreement effective date	Dec. 01, 2017
Agreement maturity date	Dec. 01, 2021
Fixed interest rate	1.9275%

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Derivative Instruments - Summary of Fair Values of the Interest Rate Swap (Detail) - Interest Rate Swap [Member] - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Prepaid Expenses and Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Short-term derivative asset	$ 562	$ 407
Other Assets [Member]
Derivatives, Fair Value [Line Items]
Long-term derivative asset	$ 917	$ 2,183

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Derivative Instruments - Summary of Effect of Derivative Interest Rate Swap and Related Tax Effects in AOCI (Detail) - Interest Rate Swap [Member] - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instrument, beginning balance	$ 2,590
Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)	(974)	$ 569
Amount of Gain (Loss) Reclassified from AOCI into Net Income (Loss) (Effective Portion)	137	(48)
Income Tax Benefit (Provision) in OCI on Derivative Instruments		(248)
Derivative instrument, ending balance	$ 1,479	$ 369

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Postretirement and Other Employee Benefits - Components of Net Periodic Pension Costs for the Swiss Pension Plan (Detail) - Foreign Plan [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Components of net periodic cost
Service cost	$ 630	$ 624	$ 1,275	$ 1,264
Interest cost	114	87	230	176
Prior service credit	(77)	(22)	(155)	(45)
Net actuarial loss	54	54	110	109
Expected return on plan assets	(345)	(294)	(698)	(595)
Net periodic cost	$ 376	$ 449	$ 762	$ 909

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Subsequent Events - Additional Information (Detail) - 1 months ended Jan. 31, 2019 £ in Millions, $ in Millions	USD ($)	GBP (£)
Subsequent Event [Member]
Subsequent Event [Line Items]
Payment to acquire building	$ 20.7	£ 16.0