Leases

9 Months Ended

Jan. 31, 2023

The Company’s lease portfolio is comprised of operating leases for office space and equipment and finance leases for equipment. Equipment leases are comprised of vehicles and office equipment. The majority of the Company’s leases include both lease and non-lease components. Non-lease components primarily include maintenance, insurance, taxes and other utilities. The Company combines fixed payments for non-lease components with its lease payments and accounts for them as a single lease component, which increases its ROU assets and lease liabilities. Some of the leases include one or more options to renew or terminate the lease at the Company’s discretion. Generally, the renewal and termination options are not included in the ROU assets and lease liabilities as they are not reasonably certain of exercise. The Company has elected not to recognize a ROU asset or lease liability for leases with an initial term of 12 months or less.

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of the future minimum lease payments. The Company applies the portfolio approach when determining the incremental borrowing rate since it has a centrally managed treasury function. The Company’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments in a similar economic environment.

Operating leases contain both office and equipment leases and have remaining terms that range from less than one year to 9 years, some of which also include options to extend or terminate the lease. Finance leases are comprised of equipment leases and have remaining terms that range from less than one year to six years. Finance lease assets are included in property and equipment, net while finance lease liabilities are included in other accrued liabilities and other liabilities.

During both the three and nine months ended January 31, 2023, the Company reduced its real estate footprint and as a result recorded an impairment charge of the ROU assets of $5.5 million recorded in the consolidated statements of income. During nine months ended January 31, 2022, the Company reduced its real estate footprint and as a result recorded an impairment charge of the ROU assets of $7.4 million recorded in the consolidated statements of income.

The components of lease expense were as follows:


	Three Months Ended January 31,				Nine Months Ended January 31,
	2023		2022		2023		2022

	(in thousands)
Finance lease cost
Amortization of ROU assets	$	366	$	248	$	1,104	$	785
Interest on lease liabilities	47		19		141		64
	413		267		1,245		849
Operating lease cost	12,339		13,013		36,957		40,288
Short-term lease cost	183		279		616		761
Variable lease cost	3,300		2,820		7,538		7,919
Lease impairment cost	5,471		—		5,471		7,392
Sublease income	(1,019)		(283)		(2,264)		(742)
Total lease cost	$	20,687	$	16,096	$	49,563	$	56,467

Supplemental cash flow information related to leases was as follows:


	Nine Months Ended January 31,
	2023		2022

	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	49,870	$	48,246
Financing cash flows from finance leases	$	1,228	$	860

ROU assets obtained in exchange for lease obligations:
Operating leases	$	8,967	$	22,662
Finance leases	$	2,673	$	916

Supplemental balance sheet information related to leases was as follows:


	January 31, 2023			April 30, 2022

	(in thousands)
Finance Leases:

Property and equipment, at cost	$	7,105		$	5,770
Accumulated depreciation	(2,896)			(3,085)
Property and equipment, net	$	4,209		$	2,685

Other accrued liabilities	$	1,302		$	1,049
Other liabilities	2,958			1,657
Total finance lease liabilities	$	4,260		$	2,706

Weighted average remaining lease terms:
Operating leases	4.5 years			5.1 years
Finance leases	3.9 years			3.3 years

Weighted average discount rate:
Operating leases	4.5		%	4.3		%
Finance leases	4.5		%	3.2		%

Maturities of lease liabilities were as follows:


Year Ending April 30,	Operating		Financing

	(in thousands)
2023 (excluding the nine months ended January 31, 2023)	$	12,944	$	390
2024	49,150		1,385
2025	40,665		1,144
2026	36,751		796
2027	18,780		538
Thereafter	22,323		396
Total lease payments	180,613		4,649
Less: imputed interest	16,941		389
Total	$	163,672	$	4,260