Stockholders' Equity

9 Months Ended

Mar. 31, 2022

Equity [Abstract]

Stockholders' Equity

NOTE 10 – STOCKHOLDERS’ EQUITY

Equity Incentive Plans

On November 26, 2019, the Company’s board of directors approved the 2019 Equity Incentive Plan (2019 EIP), which became effective on December 10, 2019. The 2019 Plan authorizes the award of stock options, restricted stock units (RSUs), restricted stock awards, stock appreciation rights, performance awards, cash awards, and stock bonus awards, as determined by the Company’s board of directors.

Equity Awards Assumed in Acquisition

In connection with the acquisition of Invoice2go, the Company assumed and replaced the outstanding stock options on the acquisition date of Invoice2go under the Invoice2go 2014 Plan. The assumed equity awards will be settled in shares of the Company’s common stock and will retain the terms and conditions under which they were originally granted.

No additional equity awards will be granted under the Invoice2go 2014 Plan and the forfeited awards will not be returned to the Invoice2go 2014 Plan.

Stock Options

The stock option awards granted during the nine months ended March 31, 2022 and 2021 were not material. As of March 31, 2022, the total unamortized stock-based compensation expense related to the unvested stock options was $83.9 million, which the Company expects to recognize over a weighted-average period of 2.1 years.

Restricted Stock Units (RSUs)

During the nine months ended March 31, 2022, the Company granted an aggregate of approximately 2.5 million RSUs with a weighted grant-date fair value of $212.33 per unit. The fair value of the RSUs was estimated based upon the market closing price of the Company’s common stock on the date of grant. The RSUs vest over the requisite service period, which generally range between 1 year and 4 years from the date of grant, subject to the continued employment of the employees and services of the nonemployee board members.

As of March 31, 2022, the total unamortized stock-based compensation expense related to the unvested RSUs options was $435.8 million, which the Company expects to amortize over a weighted-average period of 3.0 years.

Market-based RSUs

In December 2021, the Company granted a total of 50,000 market-based RSUs to one executive employee that vest based on appreciation of the price of the Company’s common stock over a multi-year period and upon continued service. The Company estimated the fair value of the market-based RSUs award on the grant date using the Monte Carlo simulation model with the following assumptions: (i) expected volatility of 60%, (ii) risk-free interest rate of 1.08% to 1.21%, and (iii) total performance period of three to five years. The weighted-average grant date fair value of the market-based RSUs award was $182.15 per share. The Company recognizes expense for market-based RSUs over the requisite service period of 1 to 3 years. Provided that the requisite service is rendered, the total fair value of the market-based RSUs at the date of grant is recognized as compensation expense even if the market condition is not achieved. However, the number of shares that ultimately vest can vary significantly with the achievement of the specified market criteria.

As of March 31, 2022, the total unrecognized compensation expense related to the market-based RSUs was $7.7 million, which is expected to be amortized over a weighted-average period of 1.8 years.

2019 Employee Stock Purchase Plan (ESPP)

The fair value of the ESPP offering during the nine months ended March 31, 2022 was estimated at the date of the offering using the Black-Scholes option-pricing model with the following assumptions: (i) expected term range of 0.6 to 1.0 years, (ii) expected volatility of 77.2%, (iii) risk-free interest rate range of 0.63% to 0.88% and (iv) expected dividend yield of 0%.

As of March 31, 2022, the total unrecognized compensation expense related to the ESPP was $6.6 million, which is expected to be amortized over the next 12 months.

Warrants

The Company has an agreement with a customer to issue warrants for up to 5.6 million shares of the Company’s common stock at an exercise price of $4.50 per share over a period of five years, ending in September 2023. Issuance of the warrants is contingent upon certain performance conditions and subject to certain limits. As of March 31, 2022, there were no warrants issued or issuable under this agreement. The Company has concluded that the performance conditions for the issuance of this warrant are not probable of being met.

Stock Based Compensation Cost

Stock-based compensation cost from stock options, RSUs, and ESPP was included in the following line items in the accompanying condensed consolidated statements of operations and condensed consolidated balance sheets (in thousands):

	Three months ended March 31,				Nine months ended March 31,
	2022		2021		2022		2021
Cost of revenue	$	1,262	$	728	$	3,674	$	1,971
Research and development		13,912		3,638		38,752		9,953
Sales and marketing		17,758		1,711		36,911		5,086
General and administrative		19,878		4,603		61,044		14,253
Total amount charged to expense		52,810		10,680		140,381		31,263
Property and equipment (capitalized internal-use software)		1,093		—		3,050		—
Total stock-based compensation cost	$	53,903	$	10,680	$	143,431	$	31,263