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Stockholders' Equity
 12 Months Ended
Jun. 30, 2022
Equity [Abstract]  
Stockholders' Equity STOCKHOLDERS’ EQUITY
Equity Incentive Plans
On November 26, 2019, the Company’s board of directors approved the 2019 Equity Incentive Plan (2019 Plan), 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.
The Company’s 2016 Equity Incentive Plan (2016 Plan), which was adopted in February 2016, was terminated concurrent to the effective date of the 2019 Plan. The Company’s 2006 Equity Incentive Plan (2006
Plan), which was adopted in April 2006, was terminated upon the adoption of the 2016 Plan. There were no equity-based awards granted under the 2016 Plan and the 2006 Plan after their termination; however, all outstanding awards under the 2016 Plan and the 2006 Plan continue to remain subject to the terms of the respective Equity Incentive Plan until such awards are exercised or until they terminate or expire by their terms. The 2019 Plan, 2016 Plan and 2006 Plan are collectively referred to as the “Equity Incentive Plans.”
The 2019 Plan authorizes the award of stock options, restricted stock units (RSUs), restricted stock awards, stock appreciation rights, performance-based awards, cash awards, and stock bonus awards. The Company initially reserved 7,100,000 shares of its common stock, plus any reserved shares not issued or subject to outstanding grants under the 2016 Plan, for issuance pursuant to awards granted under the Company’s 2019 Plan. The number of shares reserved for issuance under the 2019 Plan increases automatically on July 1 of each of 2020 through 2029 by the number of shares equal to the lesser of 5% of the total number of outstanding shares of the Company’s common stock as of the immediately preceding June 30, or a number as may be determined by the Company’s board of directors. In addition, the following shares of common stock from the 2016 Plan and the 2006 Plan will be available for grant and issuance under the 2019 Plan:
•shares issuable upon the exercise of options or subject to other awards under the 2016 Plan or 2006 Plan that cease to be subject to such options or other awards by forfeiture or after the effective date of the 2019 Plan; and
•shares issued pursuant to outstanding awards under the Company’s 2016 Plan and 2006 Plan that are forfeited or repurchased after the effective date of the 2019 Plan.
The total number of common shares available for issuance under the Equity Incentive Plans was 12,332,663 shares as of June 30, 2022.
Equity Awards Assumed in Acquisitions
The Company assumed and replaced the outstanding stock options of Invoice2go and Divvy upon their acquisition. 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 equity incentive plans of the acquired companies.
Stock Options
The Company may grant incentive and non-statutory stock options to employees, nonemployee directors, and consultants of the Company under the Equity Incentive Plans. Stock options granted generally vest and become exercisable ratably over a requisite service period of four years following the date of the grant and expire ten years from the date of the grant. The Company may grant stock options with early exercise provisions, but subject to repurchase conditions. There were no outstanding unvested stock options that had been early exercised as of June 30, 2022.
The Company may also grant stock options with double-trigger vesting conditions. The unvested shares of options granted with double trigger vesting conditions will vest 50% in the event of a sale of the Company and the termination of the holder of the stock options.
The exercise price of incentive stock options granted must be at least equal to 100% of the fair value of the Company’s common stock at the date of grant. The exercise price of non-statutory options granted must be at least equal to 85% of the fair value of the Company’s common stock at the date of grant.
A summary of stock option activity as of June 30, 2022, and changes during the year ended June 30, 2022, is presented below:
Number of
shares
(in thousands) 		Weighted
average
exercise
price
per share		Weighted
average
remaining
contractual
term
(in years)		Aggregate
intrinsic
value
(in thousands)
Outstanding at June 30, 2021
6,552 $13.31 7.87$1,113,025 
Granted (1)
280 $83.40 
Exercised(2,747)$12.39 
Forfeited(227)$26.66 
Outstanding at June 30, 2022
3,858 $18.28 6.97$361,053 
Vested and expected to vest at June 30, 2022 (2)
3,624 $18.22 6.94$339,548 
Vested and exercisable at June 30, 2022
2,189 $12.59 6.63$213,987 
(1)
Includes approximately 184,000 shares of outstanding stock options that were assumed upon the acquisition of Invoice2go. The weighted average exercise price of options assumed was $25.60 per share and the weighted average grant date fair value on the date of assumption was approximately $248.43 per share.
(2)
The expected to vest options are the result of applying the pre-vesting forfeiture rate assumptions to total outstanding options.
The weighted-average grant date fair value of options granted during the years ended June 30, 2022, 2021 and 2020 was $207.07, $132.04 and $11.04 per share, respectively. The total intrinsic value of options exercised during the years ended June 30, 2022, 2021 and 2020 was $640.0 million, $387.1 million and $191.3 million, respectively. The intrinsic value was calculated as the difference between the estimated fair value of the Company’s common stock at exercise and the exercise price of the in-the-money options.
The fair value of options granted during the years ended June 30, 2022, 2021 and 2020 was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:
Year ended
June 30,
202220212020
Expected term (in years)
2.00 to 7.05
4.00 to 6.25
6.25
Expected volatility
30.0% to 81.2%
35.0% to 85.1%
50.0% to 100.6%
Risk-free interest rate
0.20% to 2.88%
0.38% to 1.03%
0.35% to 1.88%
Expected dividend yield0 %0 %0 %
Prior to the IPO, the fair value of the shares of common stock underlying stock options had historically been determined by the Company’s Board of Directors. Because there had been no public market for the Company’s common stock, the Board of Directors determined fair value of the common stock at the time of grant of the option by considering a number of objective and subjective factors including important developments in the Company’s operations, valuations performed by an independent third party, sales of preferred stock, actual operating results and financial performance, the conditions in the industry and the economy in general, the stock price performance and volatility of comparable public companies, and the lack of liquidity of the Company’s common stock, among other factors.
As of June 30, 2022, the total unamortized stock-based compensation cost related to the unvested stock options was approximately $61 million, which the Company expects to amortize over a weighted-average period of 1.89 years. The Company received approximately $34.0 million, $28.2 million and $12.2 million from options exercised during the years ended June 30, 2022, 2021 and 2020, respectively.
Restricted Stock Units
A summary of RSU activity as of June 30, 2022, and changes during the year ended June 30, 2022, is presented below.
Number of
shares
(in thousands) 		Weighted
average
grant date
fair value
Nonvested at June 30, 2021
1,176 $90.20 
Granted2,929 $202.79 
Vested(535)$122.82 
Forfeited(291)$164.74 
Nonvested at June 30, 2022
3,279 $178.85 
The fair value of the RSU grant is determined 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 ranges 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. The total fair value of RSUs that vested during the years ended June 30, 2022, 2021 and 2020 was approximately $118.9 million, $40.0 million and $0.2 million, respectively.
As of June 30, 2022, the total unamortized stock-based compensation expense related to the unvested RSUs was approximately $413.8 million, which the Company expects to amortize over a weighted-average period of 2.9 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 June 30, 2022, the total unrecognized compensation expense related to the market-based RSUs was approximately $5.9 million, which is expected to be amortized over a weighted-average period of 1.6 years.
Employee Stock Purchase Plan
On November 26, 2019, the Company’s board of directors approved the 2019 Employee Stock Purchase Plan (ESPP), which became effective on December 11, 2019. The ESPP is intended to qualify under Section 423 of the Internal Revenue Code of 1986 (as amended) and will provide eligible employees a means to acquire shares of common stock through payroll deductions. Under the ESPP, the Company initially reserved for issuance 1,400,000 shares of common stock, which will increase automatically on July 1 of each fiscal year during the term of the ESPP by the number of shares equal to 1% of the total number of shares of common stock and preferred stock (on as-converted basis) outstanding as of the immediately preceding June 30th, unless the board of directors elects to authorize a lesser number of shares; provided, that, the total number of shares issued under the ESPP may not exceed 14,000,000 shares of common stock.
The ESPP provides for consecutive offering periods during which eligible employees can participate in the ESPP and be granted the right to purchase shares.
The offering periods shall be for a 12-month period commencing on February 7th and September 7th, with each such offering period consisting of two separate purchase periods ending on September 6th and February 6th, and February 6th and September 6th, respectively.
Eligible employees can contribute up to 15% of their eligible compensation, subject to limitation as provided for in the ESPP, and purchase the common stock at a purchase price per share equal to 85% of the lesser of the fair market value of the common stock on (i) the offering date or (ii) the purchase date.
The fair value of ESPP offerings during the years ended June 30, 2022, 2021 and 2020 was estimated at the date of the offering using the Black-Scholes option-pricing model with the following assumptions:
Year ended
June 30,
202220212020
Expected term (in years)
0.4 to 1.0
0.5 to 1.0
0.5 to 1.17
Expected volatility
76.0% to 77.3%
81.0% to 88.4%
50.0%
Risk-free interest rate
0.06% to 0.88%
0.05% to 0.13%
1.47% to 1.56%
Expected dividend yield0 %0 %0 %
As of June 30, 2022, the total unrecognized compensation expense related to the ESPP was $3.9 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 June 30, 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 consolidated statements of operations and consolidated balance sheets (in thousands):
Year ended
June 30,
202220212020
Cost of revenue - service costs$5,144 $2,938 $1,257 
Research and development54,907 16,091 5,495 
Sales and marketing60,237 8,547 2,777 
General and administrative76,869 44,411 8,535 
Total amount charged to expense197,157 71,987 18,064 
Property and equipment (capitalized internal-use software)4,405 464 — 
Total stock-based compensation cost$201,562 $72,451 $18,064