Funds Held for Customers

6 Months Ended

Dec. 31, 2021

Investments, Debt and Equity Securities [Abstract]

Funds Held for Customers

NOTE 6 – FUNDS HELD FOR CUSTOMERS

Funds held for customers consisted of the following as of the dates presented (in thousands):

	December 31,			June 30,
	2021			2021
Restricted cash and other receivables	$	2,130,395		$	1,208,598
Restricted cash equivalents		64,814			86,322
Corporate bonds		746,654			516,350
Certificates of deposit		372,340			326,927
Municipal bonds		16,925			42,957
Asset backed securities		43,645			25,085
U.S. treasury securities		6,104			3,009
Total funds held for customers		3,380,877			2,209,248
Less - income earned by the Company    included in other current assets		(482	)		(650	)
Total funds held for customers, net    of income earned by the Company	$	3,380,395		$	2,208,598

Income earned by the Company that is included in other current assets represents interest income, accretion of discount (offset by amortization of premium), and net unrealized gains on customer funds that were invested in money market funds and short-term marketable debt securities. Earnings from these investments are contractually earned by the Company and are expected to be transferred into the Company’s corporate deposit account upon sale or settlement of the associated investment.

Below is a summary of the fair value of funds held for customers that were invested in short-term marketable debt securities as of the dates presented (in thousands):

	December 31, 2021
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
Corporate bonds	$	746,800	$	10	$	(156	)	$	746,654
Certificates of deposit		372,340		—		—			372,340
Municipal bonds		16,929		6		(10	)		16,925
Asset backed securities		43,695		—		(50	)		43,645
U.S. treasury securities		6,109		—		(5	)		6,104
Total	$	1,185,873	$	16	$	(221	)	$	1,185,668

	June 30, 2021
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
Corporate bonds	$	516,364	$	24	$	(38	)	$	516,350
Certificates of deposit		326,927		—		—			326,927
Municipal bonds		42,952		5		—			42,957
Asset backed securities		25,081		4		—			25,085
U.S. treasury securities		3,010		—		(1	)		3,009
Total	$	914,334	$	33	$	(39	)	$	914,328

The amortized cost and fair value amounts include accrued interest receivable of $2.5 million and $1.9 million and as of December 31, 2021 and June 30, 2021, respectively.

As of December 31, 2021, approximately 96%, or $1.1 billion, of the total funds held for customers invested in marketable debt securities mature within one year and approximately 4% or $51.3 million mature thereafter. As of June 30, 2021, approximately 97%, or $882.4 million, of the total funds held for customers invested in marketable debt securities mature within one year and approximately 3% or $31.9 million mature thereafter.

As of December 31, 2021, approximately 170 out of approximately 400 investment positions were in an unrealized loss position. The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of the dates presented (in thousands):

	December 31, 2021
	Fair value		Unrealized losses
Corporate bonds	$	258,007	$	(156	)
Municipal bonds		8,895		(10	)
Asset backed securities		43,645		(50	)
U.S. treasury securities		6,104		(5	)
Total	$	316,651	$	(221	)

	June 30, 2021
	Fair value		Unrealized losses
Corporate bonds	$	79,359	$	(38	)
U.S. treasury securities		2,501		(1	)
Total	$	81,860	$	(39	)

Investments with unrealized losses have been in a continuous unrealized loss position for less than 12 months. The Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity. Therefore, the Company does not consider those unrealized investment losses as other-than-temporary impairment of the investments. There have been no significant realized gains or losses on funds held for customers that were invested in short-term marketable debt securities during the three and six months ended December 31, 2021 and 2020.