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Stockholders' Equity
 12 Months Ended
Jun. 30, 2023
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, RSUs, restricted stock awards, stock appreciation rights, performance-based awards, market-based 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 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 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 2016 Plan and 2006 Plan that are forfeited or repurchased after the effective date of the 2019 Plan.
The total number of shares of common stock available for future grants under the Equity Incentive Plans was 15,087,695 shares as of June 30, 2023.
Equity Awards Assumed in Acquisitions
The Company assumed and replaced the outstanding stock options of Invoice2go and Divvy upon their acquisitions. 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, non-employee 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 exercise price of stock options granted is generally the market closing price of the Company’s common stock at the date of grant.
A summary of stock option activity as of June 30, 2023, and changes during the year ended June 30, 2023, 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, 2022
3,858 $18.28 6.97$361,053 
Exercised(1,063)$13.06 
Forfeited(207)$29.06 
Outstanding at June 30, 2023
2,588 $19.56 5.90$258,093 
Vested and expected to vest at June 30, 2023 (1)
2,560 $19.32 5.89$255,787 
Vested and exercisable at June 30, 2023
2,367 $15.62 5.79$242,525 
(1) The expected to vest options are the result of applying the pre-vesting forfeiture rate assumptions to total outstanding options.
No options were granted during the year ended June 30, 2023.The fair value of options granted during the years ended June 30, 2022, and 2021 was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:
Year ended
June 30,
20222021
Expected term (in years)
2.00 to 7.05
6.25
Expected volatility
30.0% to 81.2%
35.0% to 85.1%
Risk-free interest rate
0.20% to 2.88%
0.38% to 1.03%
Expected dividend yield0 %0 %
The weighted-average grant date fair value of options granted during the years ended June 30, 2022, and 2021 was $207.07 and $132.04 per share, respectively. The total intrinsic value of options exercised during the years ended June 30, 2023, 2022, and 2021 was $114.1 million, $640.0 million, and $387.1 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 stock options vested during the years ended June 30, 2023, 2022, and 2021 was $163.8 million, $555.8 million, and $485.7 million, respectively.
As of June 30, 2023, the total unamortized stock-based compensation cost related to the unvested stock options was approximately $14.0 million, which the Company expects to amortize over a weighted-average period of 1.5 years.
Restricted Stock Units
A summary of RSU activity as of June 30, 2023, and changes during the year ended June 30, 2023, is presented below.
Number of
shares (1)
(in thousands)
Weighted
average
grant date
fair value
Nonvested at June 30, 2022
3,279 $178.85 
Granted3,322 $120.25 
Vested(1,640)$164.38 
Forfeited(777)$165.37 
Nonvested at June 30, 2023
4,184 $140.50 
(1) Includes RSU, market-based RSUs and performance-based RSUs.
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 weighted-average grant date fair value of RSU granted during the years ended June 30, 2023, 2022, and 2021 was $120.25, $202.79, and $134.29 per share, respectively. 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 non-employee directors. The total fair value of RSUs that vested during the years ended June 30, 2023, 2022, and 2021 was approximately $197.3 million, $118.9 million, and $40.0 million, respectively.
As of June 30, 2023, the total unamortized stock-based compensation expense related to the unvested RSUs was approximately $412.1 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, subject to such executive’s continued service to the Company. The Company estimated the fair value of the market-based RSU 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 RSU 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, 2023, the total unrecognized compensation expense related to the market-based RSUs was approximately $2.2 million, which is expected to be amortized over a weighted-average period of 1.1 years.
Performance-based RSUs
During the year ended June 30, 2023, the Company granted approximately 150,000 RSUs to certain executive employees that vest based upon the achievement of designated financial and continued employment with the Company over period of three years. The fair value of the performance-based RSU grant is determined based upon the market closing price of the Company’s common stock on the date of grant. The weighted-average grant date fair value of these performance-based RSUs was $133.48 per unit. The Company recognizes expense for performance-based RSUs over the requisite service period based on management's estimate of the number of performance-based RSUs expected to vest. For any change in the estimate of the number of performance-based RSUs that are probable of vesting, the Company will cumulatively adjust compensation expense in the period that the change in estimate is made. The number of shares that ultimately vest vary with the achievement of the specified performance criteria.
As of June 30, 2023, the total unrecognized compensation expense related to the performance-based RSUs was $5.9 million, which is expected to be recognized over a weighted-average period of 1.3 years.
Employee Stock Purchase Plan
On November 26, 2019, the Company’s board of directors approved the ESPP, which became effective on December 11, 2019. The ESPP is intended to qualify under Section 423 of the U.S. Internal Revenue Code of 1986, as amended (the Code), 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 30, 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 of 12-months during which eligible employees can participate in the ESPP and be granted the right to purchase shares semiannually.
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, 2023, 2022, and 2021 was estimated at the date of the offering using the Black-Scholes option-pricing model with the following assumptions:
Year ended
June 30,
202320222021
Expected term (in years)
0.4 to 1.0
0.4 to 1.0
0.5 to 1.00
Expected volatility
81.8% to 82.5%
76.0% to 77.3%
81.0% to 88.4%
Risk-free interest rate
3.39% to 4.89%
0.06% to 0.88%
0.05% to 0.13%
Expected dividend yield0 %0 %0 %
As of June 30, 2023, the total unrecognized compensation expense related to the ESPP was $4.5 million, which is expected to be amortized over a weighted-average period of 0.5 years.
Stock Based Compensation Cost
Stock-based compensation cost by award type (in thousands):
Year ended
June 30,
202320222021
Stock options$37,882 $55,667 $45,035 
RSUs(1)
251,456 134,222 23,225 
Performance-based awards17,914 — — 
Market-based RSUs4,308 2,755 — 
Employee stock purchase plan11,280 8,918 4,191 
Total stock-based compensation cost
$322,840 $201,562 $72,451 
Stock-based compensation cost from stock options, RSUs and purchase rights issued under the 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,
202320222021
Revenue - subscription and transaction fees$188 $— $— 
Cost of revenue - service costs9,111 5,144 2,938 
Research and development93,364 54,907 16,091 
Sales and marketing(1)
130,421 60,237 8,547 
General and administrative80,619 76,869 44,411 
Total amount charged to loss from operations313,703 197,157 71,987 
Property and equipment (capitalized internal-use software)9,137 4,405 464 
Total stock-based compensation cost$322,840 $201,562 $72,451 
(1) In October 2022, the Company entered into separation and advisory agreements with its former Chief Revenue Officer (the CRO, and such agreements, the CRO Agreements). Pursuant to the CRO Agreements, the former CRO will serve the Company
as an advisor through September 2024. Upon execution of the CRO Agreements, the Company recognized $52.2 million of stock-based compensation expense related to the former CRO's outstanding RSU awards.
Share Repurchase Program
In January 2023, the Company's board of directors authorized the repurchase of up to $300 million of the Company's outstanding shares of common stock (the Share Repurchase Program). The Company may repurchase shares of common stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans, intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The timing and total amount of share repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. The Share Repurchase Program has a term of 12 months, may be suspended or discontinued at any time, and does not obligate the Company to acquire any amount of common stock.
During the year ended June 30, 2023, the Company repurchased and subsequently retired 1,077,445 shares for $87.6 million under the Share Repurchase Program. The total price of the shares repurchased and related transaction costs are reflected as a reduction of common stock and accumulated deficit on the accompanying consolidated balance sheets. As of June 30, 2023, $212.4 million remained available for future share repurchases under the Share Repurchase Program.