Revenue, Performance Obligations, Deferred Revenue and Deferred Costs

9 Months Ended

Mar. 31, 2021

Revenue From Contract With Customer [Abstract]

Revenue, Performance Obligations, Deferred Revenue and Deferred Costs

NOTE 2 – Revenue, Performance Obligations, Deferred Revenue and Deferred Costs

The Company generates revenue from two primary sources: (1) subscription and transaction fees and (2) interest on funds held for customers. The Company’s customers include small and midsize businesses (SMBs), accounting firms, and financial institutions. The Company’s subscription and transaction fees are disaggregated by customer category and consisted of the following for the periods presented (in thousands):

	Three months ended March 31,				Nine months ended March 31,
	2021		2020		2021		2020
Small-to-midsize business and accounting firm    customers	$	54,710	$	33,356	$	144,609	$	89,789
Financial institution customers		3,912		2,736		10,134		7,815
Total subscription and transaction fees	$	58,622	$	36,092	$	154,743	$	97,604

Remaining performance obligations with financial Institutions

As of March 31, 2021, the aggregate amount of transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) was $147.5 million. Of this amount, the Company expects to recognize approximately $26.2 million, or 18%, within one year. The timing of revenue recognition within the next year is largely dependent upon the go-live dates of the Company’s contracts with its financial institution customers, which are inherently uncertain. Once the services for the Company’s significant contracts have launched, the Company expects the amount of revenue to be recognized for the remaining transaction price will be materially consistent over the next two to five years.

Deferred revenue

Subscription and transaction fees from customers with which the Company has annual or multi-year contracts are generally billed in advance. These fees are initially recorded as deferred revenue and subsequently recognized as revenue as the performance obligation is satisfied. Deferred revenue is shown as current or non-current in the condensed consolidated balance sheets. During the three and nine months ended March 31, 2021, the Company recognized $0.5 million and $2.6 million of revenue, respectively, that was included in the deferred revenue balance as of June 30, 2020. During the three and nine months ended March 31, 2020, the Company recognized $1.7 million and $4.4 million of revenue, respectively, that was included in the deferred revenue balance as of June 30, 2019.

Deferred costs

Deferred costs consist of (i) deferred sales commissions that are incremental costs of obtaining customer contracts and (ii) deferred service costs, which include direct payroll costs and fees paid to customers in connection with the implementation of the product prior to its launching for general availability (go-live) to customers. Sales commissions paid on renewals are not material and not commensurate with sales commissions paid on the initial contract. Deferred sales commissions are amortized ratably over four to ten years, taking into consideration the initial contract term and expected renewal periods. Deferred service costs are amortized ratably over the estimated benefit period of the capitalized costs starting on the go-live date of the service. Deferred costs consisted of the following as of the dates presented (in thousands):

	March 31,		June 30,
	2021		2020
Deferred sales commissions:
Current	$	3,855	$	2,829
Non-current		6,288		5,613
Total deferred sales commissions	$	10,143	$	8,442
Deferred service costs:
Current	$	1,494	$	618
Non-current		14,798		4,474
Total deferred service costs	$	16,292	$	5,092

The current portion of deferred costs is included in prepaid expenses and other current assets and the non-current portion is included in other assets in the accompanying condensed consolidated balance sheets.