INCOME TAXES

12 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES:

The Company’s benefit for income tax includes U.S. federal, state, and foreign income taxes. The domestic and foreign components of our loss before income taxes is as follows:

	Fiscal Year Ended June 30,
	2022		2021		2020
U.S.	$	(140,021)	$	(94,223)	$	(87,485)
Foreign	1,430		929		—
Loss before income taxes	$	(138,591)	$	(93,294)	$	(87,485)

The components of the Company’s income tax benefit for the following periods are as follows:

	Fiscal Year Ended June 30,
	2022		2021		2020
Federal:
Current provision	$	1	$	9	$	—
Deferred benefit	(29,547)		(18,570)		(16,950)
Federal tax benefit	(29,546)		(18,561)		(16,950)
State:
Current provision (benefit)	51		140		(1)
Deferred benefit	(1,344)		(2,655)		(3,231)
State tax benefit	(1,293)		(2,515)		(3,232)
Foreign:
Current provision	314		61		—
Deferred (benefit) provision	(49)		203		—
Foreign tax provision	265		264		—
Total tax benefit	$	(30,574)	$	(20,812)	$	(20,182)

The tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets and deferred tax liabilities are as follows:

	June 30, 2022		June 30, 2021
Deferred tax assets:
Stock-based compensation	$	4,497	$	—
Accrued expenses	2,360		1,849
Net operating loss carryforwards	56,089		43,009
Deferred rent	1,093		1,277
Deferred revenue	4,023		4,204
Unrealized gain (loss)	618		(245)
Tax credits	8,457		3,724
Other items	1,279		1,177
Total deferred tax assets	78,416		54,995
Valuation allowance	(744)		(117)
Net deferred tax assets	77,672		54,878
Deferred tax liabilities:
Software development costs	(9,718)		(7,514)
Deferred contract costs	(39,786)		(27,694)
Property and equipment	(3,432)		(4,883)
Other intangibles	(56,530)		(78,171)
Other	(101)		(302)
Total deferred liabilities	(109,567)		(118,564)
Net deferred tax liabilities	$	(31,895)	$	(63,686)

The Company is in a cumulative three-year loss position. The realization of deferred tax assets is dependent upon the generation of future taxable income. After giving appropriate consideration to the sources of taxable income through the scheduled reversal of deferred tax liabilities, the Company concluded that valuation allowances were only required on a portion of its state and local net operating losses. There is a valuation allowance on state net operating losses (“NOL”) of $744.

The Company has federal NOL carryforwards as of June 30, 2022 and 2021 of approximately $234,806 and $181,686 respectively. The Company has state NOL carryforwards as of June 30, 2022 and 2021 of approximately $211,795 and $156,603, respectively. The federal NOLs not subject to expiration total $181,033 as of June 30, 2022 with the remainder of $53,773 beginning to expire in 2034. The state NOL carryforwards generally expire from 2022 to 2040, except for some states for which NOLs do not expire. The Company also has gross federal research and development tax credit carryforwards as of June 30, 2022 and 2021 of approximately $7,982 and $3,724, respectively, which begin expiring in 2033. The Company has gross state research and development tax credit carryforwards as of June 30, 2022 and 2021 of approximately $982 and $261, respectively, which begin expiring in 2033.

On June 30, 2022, the Company’s liabilities for unrecognized tax benefits, which would impact the Company’s effective tax rate if recognized, are presented below. The Company will include applicable penalties and interest when the benefit is recognized. On June 30, 2022, the unrecognized tax benefits related to uncertain tax positions for state research and development tax credits. The Company does not expect material adjustments to the total amount of uncertain tax positions within the next 12 months, but the outcome of tax matters is uncertain and unforeseen results can occur.

The Company continues to follow its policy of recognizing interest and penalties accrued on tax positions as a component of income tax benefit on the consolidated statements of operations and comprehensive loss. The amount of accrued interest and penalties associated with the Company’s tax positions is immaterial to the consolidated balance sheets. The amount of interest and penalties recognized for the year ended June 30, 2022 was immaterial to the Company’s consolidated statements of operations and comprehensive loss.

	June 30, 2022
Unrecognized tax benefits at the beginning of the year	$	—
Additions for tax positions	97
Additions for tax positions of prior periods	284
Unrecognized tax benefits at the end of the year	$	381

The Company files income tax returns with the United States federal government and various state jurisdictions. Certain tax years remain open for federal and state tax reporting jurisdictions in which the Company does business due to NOL carryforwards and tax credits utilized from such years or utilized in a period remaining open for audits under normal statute of limitations relating to income tax liabilities. The Company, including its domestic subsidiaries, files a consolidated federal income tax return. For years before fiscal year ended June 30, 2018, the Company is no longer subject to U.S. federal examination. The Internal Revenue Service (“IRS”) has the ability to review years prior to fiscal year 2018 to the extent the Company utilized tax attributes carried forward from those prior years. The statute of limitations on state filings is generally three to four years.

A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate for the following periods is presented below:

	Fiscal Year Ended June 30,
	2022		2021		2020
Federal statutory rate	21.0	%	21.0	%	21.0	%
Research tax credits	3.6	%	—	%	—	%
State income taxes, net of federal tax benefit	1.7	%	2.7	%	2.9	%
Stock-based compensation	(4.6	%)	(0.9	%)	(1.3	%)
Transaction costs	2.2	%	—	%	—	%
Other permanent differences	(1.4	%)	(0.5	%)	(0.2	%)
Valuation allowance	(0.4	%)	—	%	0.7	%
Effective income tax rate	22.1	%	22.3	%	23.1	%