pycr-20220331
0001839439FALSE6/30Q32022http://fasb.org/us-gaap/2021-01-31#ServiceMemberhttp://fasb.org/us-gaap/2021-01-31#ServiceMemberhttp://fasb.org/us-gaap/2021-01-31#ServiceMemberhttp://fasb.org/us-gaap/2021-01-31#ServiceMemberhttp://fasb.org/us-gaap/2021-01-31#ServiceMemberhttp://fasb.org/us-gaap/2021-01-31#ServiceMemberhttp://fasb.org/us-gaap/2021-01-31#ServiceMemberhttp://fasb.org/us-gaap/2021-01-31#ServiceMemberP3MP1YP1Y00018394392021-07-012022-03-3100018394392022-04-30xbrli:shares00018394392022-03-31iso4217:USD00018394392021-06-30iso4217:USDxbrli:shares0001839439us-gaap:PreferredStockMember2022-03-310001839439us-gaap:PreferredStockMember2021-06-300001839439us-gaap:SeriesAPreferredStockMember2021-06-300001839439us-gaap:SeriesAPreferredStockMember2022-03-3100018394392020-07-012021-03-3100018394392021-01-012021-03-3100018394392022-01-012022-03-310001839439us-gaap:PreferredStockMemberus-gaap:SeriesAPreferredStockMember2020-12-310001839439us-gaap:CommonStockMember2020-12-310001839439us-gaap:TreasuryStockMember2020-12-310001839439us-gaap:AdditionalPaidInCapitalMember2020-12-310001839439us-gaap:RetainedEarningsMember2020-12-310001839439us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-3100018394392020-12-310001839439us-gaap:RetainedEarningsMember2021-01-012021-03-310001839439us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001839439us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001839439us-gaap:PreferredStockMemberus-gaap:SeriesAPreferredStockMember2021-01-012021-03-310001839439us-gaap:PreferredStockMemberus-gaap:SeriesAPreferredStockMember2021-03-310001839439us-gaap:CommonStockMember2021-03-310001839439us-gaap:TreasuryStockMember2021-03-310001839439us-gaap:AdditionalPaidInCapitalMember2021-03-310001839439us-gaap:RetainedEarningsMember2021-03-310001839439us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100018394392021-03-310001839439us-gaap:PreferredStockMemberus-gaap:SeriesAPreferredStockMember2021-12-310001839439us-gaap:CommonStockMember2021-12-310001839439us-gaap:TreasuryStockMember2021-12-310001839439us-gaap:AdditionalPaidInCapitalMember2021-12-310001839439us-gaap:RetainedEarningsMember2021-12-310001839439us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-3100018394392021-12-310001839439us-gaap:RetainedEarningsMember2022-01-012022-03-310001839439us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001839439us-gaap:CommonStockMember2022-01-012022-03-310001839439us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001839439us-gaap:PreferredStockMemberus-gaap:SeriesAPreferredStockMember2022-03-310001839439us-gaap:CommonStockMember2022-03-310001839439us-gaap:TreasuryStockMember2022-03-310001839439us-gaap:AdditionalPaidInCapitalMember2022-03-310001839439us-gaap:RetainedEarningsMember2022-03-310001839439us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001839439us-gaap:PreferredStockMemberus-gaap:SeriesAPreferredStockMember2020-06-300001839439us-gaap:CommonStockMember2020-06-300001839439us-gaap:TreasuryStockMember2020-06-300001839439us-gaap:AdditionalPaidInCapitalMember2020-06-300001839439us-gaap:RetainedEarningsMember2020-06-300001839439us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-3000018394392020-06-300001839439us-gaap:RetainedEarningsMember2020-07-012021-03-310001839439us-gaap:AdditionalPaidInCapitalMember2020-07-012021-03-310001839439us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012021-03-310001839439us-gaap:PreferredStockMemberus-gaap:SeriesAPreferredStockMember2020-07-012021-03-310001839439us-gaap:CommonStockMember2020-07-012021-03-310001839439us-gaap:TreasuryStockMember2020-07-012021-03-310001839439us-gaap:PreferredStockMemberus-gaap:SeriesAPreferredStockMember2021-06-300001839439us-gaap:CommonStockMember2021-06-300001839439us-gaap:TreasuryStockMember2021-06-300001839439us-gaap:AdditionalPaidInCapitalMember2021-06-300001839439us-gaap:RetainedEarningsMember2021-06-300001839439us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001839439us-gaap:RetainedEarningsMember2021-07-012022-03-310001839439us-gaap:AdditionalPaidInCapitalMember2021-07-012022-03-310001839439us-gaap:CommonStockMember2021-07-012022-03-310001839439us-gaap:PreferredStockMemberus-gaap:SeriesAPreferredStockMember2021-07-012022-03-310001839439us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012022-03-310001839439us-gaap:IPOMember2021-07-232021-07-230001839439us-gaap:IPOMember2021-07-200001839439us-gaap:OverAllotmentOptionMember2021-07-232021-07-2300018394392021-07-232021-07-2300018394392021-07-230001839439us-gaap:IPOMember2021-07-230001839439us-gaap:RedeemablePreferredStockMemberpycr:November22020ToNovember12021Memberpycr:ApaxAcquisitionMember2021-07-232021-07-23xbrli:pure0001839439us-gaap:RedeemablePreferredStockMemberpycr:ApaxAcquisitionMember2021-07-230001839439us-gaap:RestrictedStockUnitsRSUMemberus-gaap:IPOMember2021-07-232021-07-230001839439us-gaap:RestrictedStockUnitsRSUMember2021-07-232021-07-230001839439us-gaap:StockCompensationPlanMember2021-07-232021-07-230001839439us-gaap:StockCompensationPlanMemberus-gaap:IPOMember2021-07-232021-07-2300018394392021-07-012021-07-310001839439pycr:RecurringFeesMember2022-01-012022-03-310001839439pycr:RecurringFeesMember2021-01-012021-03-310001839439pycr:RecurringFeesMember2021-07-012022-03-310001839439pycr:RecurringFeesMember2020-07-012021-03-310001839439us-gaap:ServiceOtherMember2022-01-012022-03-310001839439us-gaap:ServiceOtherMember2021-01-012021-03-310001839439us-gaap:ServiceOtherMember2021-07-012022-03-310001839439us-gaap:ServiceOtherMember2020-07-012021-03-3100018394392022-04-012022-03-3100018394392022-07-012022-03-3100018394392023-07-012022-03-3100018394392024-07-012022-03-310001839439pycr:CostToObtainNewContractMember2021-12-310001839439pycr:CostToObtainNewContractMember2022-01-012022-03-310001839439pycr:CostToObtainNewContractMember2022-03-310001839439pycr:CostToFulfillContractMember2021-12-310001839439pycr:CostToFulfillContractMember2022-01-012022-03-310001839439pycr:CostToFulfillContractMember2022-03-310001839439pycr:CostToObtainNewContractMember2020-12-310001839439pycr:CostToObtainNewContractMember2021-01-012021-03-310001839439pycr:CostToObtainNewContractMember2021-03-310001839439pycr:CostToFulfillContractMember2020-12-310001839439pycr:CostToFulfillContractMember2021-01-012021-03-310001839439pycr:CostToFulfillContractMember2021-03-310001839439pycr:CostToObtainNewContractMember2021-06-300001839439pycr:CostToObtainNewContractMember2021-07-012022-03-310001839439pycr:CostToFulfillContractMember2021-06-300001839439pycr:CostToFulfillContractMember2021-07-012022-03-310001839439pycr:CostToObtainNewContractMember2020-06-300001839439pycr:CostToObtainNewContractMember2020-07-012021-03-310001839439pycr:CostToFulfillContractMember2020-06-300001839439pycr:CostToFulfillContractMember2020-07-012021-03-310001839439pycr:A7GeeseMember2020-09-240001839439pycr:A7GeeseMember2020-09-242020-09-240001839439pycr:A7GeeseMember2021-03-012021-03-310001839439pycr:A7GeeseMember2021-05-012021-05-310001839439pycr:A7GeeseMember2021-03-310001839439pycr:HCMAssetsAcquisitionMember2021-02-042021-02-040001839439pycr:HCMAssetsAcquisitionMember2022-01-012022-03-310001839439pycr:HCMAssetsAcquisitionMember2021-07-012022-03-310001839439us-gaap:DemandDepositsMember2022-03-310001839439us-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-03-310001839439us-gaap:CorporateDebtSecuritiesMember2022-03-310001839439us-gaap:CommercialPaperMember2022-03-310001839439us-gaap:OtherAggregatedInvestmentsMember2022-03-310001839439us-gaap:DemandDepositsMember2021-06-300001839439us-gaap:USGovernmentAgenciesDebtSecuritiesMember2021-06-300001839439us-gaap:CorporateDebtSecuritiesMember2021-06-300001839439us-gaap:CommercialPaperMember2021-06-300001839439us-gaap:OtherAggregatedInvestmentsMember2021-06-300001839439us-gaap:LandMember2022-03-310001839439us-gaap:LandMember2021-06-300001839439us-gaap:LandImprovementsMember2022-03-310001839439us-gaap:LandImprovementsMember2021-06-300001839439us-gaap:BuildingAndBuildingImprovementsMember2022-03-310001839439us-gaap:BuildingAndBuildingImprovementsMember2021-06-300001839439us-gaap:ComputerEquipmentMember2022-03-310001839439us-gaap:ComputerEquipmentMember2021-06-300001839439us-gaap:FurnitureAndFixturesMember2022-03-310001839439us-gaap:FurnitureAndFixturesMember2021-06-300001839439us-gaap:OfficeEquipmentMember2022-03-310001839439us-gaap:OfficeEquipmentMember2021-06-300001839439us-gaap:LeaseholdImprovementsMember2022-03-310001839439us-gaap:LeaseholdImprovementsMember2021-06-300001839439us-gaap:ComputerSoftwareIntangibleAssetMember2022-03-310001839439us-gaap:TechnologyBasedIntangibleAssetsMember2022-03-310001839439us-gaap:TechnologyBasedIntangibleAssetsMember2021-06-300001839439us-gaap:CustomerRelationshipsMember2022-03-310001839439us-gaap:CustomerRelationshipsMember2021-06-300001839439us-gaap:TradeNamesMember2022-03-310001839439us-gaap:TradeNamesMember2021-06-300001839439us-gaap:LineOfCreditMember2022-03-310001839439us-gaap:LineOfCreditMember2021-06-300001839439us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2021-06-110001839439us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2021-09-030001839439us-gaap:FederalFundsEffectiveSwapRateMemberus-gaap:LineOfCreditMemberpycr:ABRBorrowingsMemberus-gaap:RevolvingCreditFacilityMember2021-07-012022-03-310001839439us-gaap:LineOfCreditMemberpycr:ABRBorrowingsMemberus-gaap:RevolvingCreditFacilityMemberpycr:AdjustedLIBORMember2021-07-012022-03-310001839439pycr:ABRBorrowingsPriorToIPOMemberus-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2021-07-012022-03-310001839439pycr:LIBORBorrowingsPriorToIPOMemberus-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2021-07-012022-03-310001839439pycr:ABRBorrowingsAfterIPOMemberus-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2021-07-012022-03-310001839439pycr:LIBORBorrowingsAfterIPOMemberus-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2021-07-012022-03-310001839439us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2021-07-012021-07-220001839439srt:MinimumMemberus-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2021-07-232021-12-310001839439us-gaap:LineOfCreditMembersrt:MaximumMemberus-gaap:RevolvingCreditFacilityMember2021-07-232021-12-310001839439us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2021-06-112021-06-1100018394392021-07-152021-07-1500018394392021-08-092021-08-090001839439us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2022-03-310001839439us-gaap:FairValueInputsLevel1Memberus-gaap:DemandDepositsMemberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:FairValueInputsLevel2Memberus-gaap:DemandDepositsMemberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:FairValueInputsLevel3Memberus-gaap:DemandDepositsMemberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:DemandDepositsMemberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:FairValueInputsLevel3Memberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:FairValueInputsLevel3Memberus-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:OtherAggregatedInvestmentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:OtherAggregatedInvestmentsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:FairValueInputsLevel3Memberus-gaap:OtherAggregatedInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:OtherAggregatedInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:FairValueMeasurementsRecurringMember2022-03-310001839439us-gaap:FairValueInputsLevel1Memberus-gaap:DemandDepositsMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:FairValueInputsLevel2Memberus-gaap:DemandDepositsMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:FairValueInputsLevel3Memberus-gaap:DemandDepositsMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:DemandDepositsMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:FairValueInputsLevel3Memberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:FairValueInputsLevel3Memberus-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:OtherAggregatedInvestmentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:OtherAggregatedInvestmentsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:FairValueInputsLevel3Memberus-gaap:OtherAggregatedInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:OtherAggregatedInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:FairValueMeasurementsRecurringMember2021-06-300001839439us-gaap:RedeemablePreferredStockMemberpycr:ApaxAcquisitionMember2022-01-012022-03-310001839439us-gaap:RedeemablePreferredStockMemberpycr:ApaxAcquisitionMember2021-07-012022-03-310001839439us-gaap:RedeemablePreferredStockMemberpycr:ApaxAcquisitionMember2021-01-012021-03-310001839439us-gaap:RedeemablePreferredStockMemberpycr:ApaxAcquisitionMember2020-07-012021-03-3100018394392020-07-012020-09-300001839439us-gaap:IPOMember2021-10-192021-10-190001839439us-gaap:IPOMember2021-10-190001839439us-gaap:OverAllotmentOptionMember2021-10-192021-10-190001839439us-gaap:OverAllotmentOptionMember2021-10-262021-10-260001839439us-gaap:PreferredStockMember2020-12-292020-12-2900018394392020-12-292020-12-2900018394392020-12-290001839439us-gaap:PreferredStockMember2021-01-202021-01-2000018394392021-01-202021-01-200001839439us-gaap:PreferredStockMember2020-07-012021-03-310001839439us-gaap:RestrictedStockUnitsRSUMember2018-11-022018-11-020001839439us-gaap:RestrictedStockUnitsRSUMember2021-07-202021-07-200001839439us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:StockCompensationPlanMember2018-11-022018-11-0200018394392018-11-022018-11-02pycr:installment0001839439us-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:StockCompensationPlanMember2018-11-022018-11-020001839439us-gaap:StockCompensationPlanMember2021-06-300001839439pycr:ModifiedMEPUnitsMember2021-06-300001839439us-gaap:StockCompensationPlanMember2021-07-012022-03-310001839439pycr:ModifiedMEPUnitsMember2021-07-012022-03-310001839439us-gaap:StockCompensationPlanMember2022-03-310001839439pycr:ModifiedMEPUnitsMember2022-03-310001839439us-gaap:StockCompensationPlanMember2020-07-012021-03-310001839439pycr:ModifiedMEPUnitsMember2022-01-012022-03-310001839439pycr:ModifiedMEPUnitsMember2021-01-012021-03-310001839439pycr:A2021OmnibusIncentivePlanMemberus-gaap:EmployeeStockMember2021-07-200001839439srt:ExecutiveOfficerMemberpycr:A2021OmnibusIncentivePlanMemberus-gaap:EmployeeStockOptionMember2021-07-202021-07-200001839439us-gaap:EmployeeStockOptionMember2022-03-310001839439us-gaap:EmployeeStockOptionMember2021-07-012022-03-310001839439srt:MinimumMember2022-03-310001839439srt:MaximumMember2022-03-310001839439srt:MinimumMember2021-07-012022-03-310001839439srt:MaximumMember2021-07-012022-03-310001839439us-gaap:RestrictedStockUnitsRSUMember2021-07-012022-03-310001839439pycr:A2021OmnibusIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2021-07-012022-03-310001839439us-gaap:RestrictedStockUnitsRSUMember2021-06-300001839439us-gaap:RestrictedStockUnitsRSUMember2022-03-310001839439pycr:A2021EmployeeStockPurchasePlanMemberus-gaap:EmployeeStockMember2021-07-200001839439pycr:A2021EmployeeStockPurchasePlanMemberus-gaap:EmployeeStockMember2021-07-202021-07-200001839439srt:MinimumMemberpycr:A2021EmployeeStockPurchasePlanMemberus-gaap:EmployeeStockMember2021-07-200001839439pycr:A2021EmployeeStockPurchasePlanMembersrt:MaximumMemberus-gaap:EmployeeStockMember2021-07-20
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
————————
Form 10-Q
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______

Commission file number 001-40640
PAYCOR HCM, INC.
(Exact name of registrant as specified in its charter)
Delaware
83-1813909
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
4811 Montgomery Road
Cincinnati, OH
45212
(Address of Principal Executive Offices)(Zip Code)
(800) 381-0053
Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per share
PYCR
The NASDAQ Stock Market LLC
(Nasdaq Global Select Market)
Securities registered pursuant to section 12(g) of the Act: None
————————
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filero
Non-accelerated filerxSmaller reporting companyo
Emerging growth companyx
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
As of April 30, 2022, the number of shares of the Registrant’s Common Stock outstanding was 174,909,539 shares.



Table of Contents
Table of Contents
Part I - FINANCIAL INFORMATION
Part II - OTHER INFORMATION
         Signatures
2

Table of Contents
Part I - FINANCIAL INFORMATION



Item 1. Financial Statements
Paycor HCM, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share amounts)
 March 31,
2022
June 30,
2021
(Unaudited)
Assets
Current assets:
Cash and cash equivalents$134,004 $2,634 
Accounts receivable, net20,194 16,472 
Deferred contract costs34,247 24,503 
Prepaid expenses12,417 6,586 
Other current assets1,214 1,516 
Current assets before funds held for clients202,076 51,711 
Funds held for clients1,880,485 670,315 
Total current assets2,082,561 722,026 
Property and equipment, net32,751 41,080 
Goodwill750,655 750,802 
Intangible assets, net280,414 355,323 
Capitalized software, net37,921 31,310 
Long-term deferred contract costs117,256 90,880 
Other long-term assets25,080 19,532 
Total assets$3,326,638 $2,010,953 
Liabilities, Redeemable Noncontrolling Interest and Stockholders' Equity
Current liabilities:
Accounts payable$11,741 $11,978 
Accrued expenses and other current liabilities14,317 15,782 
Accrued payroll and payroll related expenses38,144 32,305 
Deferred revenue11,764 11,948 
Current liabilities before client fund obligations75,966 72,013 
Client fund obligations1,882,450 669,960 
Total current liabilities1,958,416 741,973 
Deferred income taxes62,671 76,138 
Other long-term liabilities11,886 16,680 
Long-term debt, net 49,100 
Total liabilities2,032,973 883,891 
Commitments and contingencies (Note 15)
Redeemable noncontrolling interest 248,423 
Stockholders' equity:
 Common stock $0.001 par value per share, 500,000,000 shares authorized, 174,903,005 shares outstanding at March 31, 2022 and 141,097,740 outstanding at June 30, 2021, respectively
175 141 
Treasury stock, at cost, 10,620,260 shares at March 31, 2022 and June 30, 2021
(245,074)(245,074)
 Preferred stock, $0.001 par value, 50,000,000 shares authorized, shares outstanding at March 31, 2022 and June 30, 2021, respectively
  
 Series A preferred stock, $0.001 par value, 10,000 shares authorized, and 7,715 shares outstanding at March 31, 2022 and June 30, 2021, respectively
 262,772 
Additional paid-in capital1,910,745 1,133,399 
Accumulated deficit(371,570)(275,751)
Accumulated other comprehensive (loss) income(611)3,152 
Total stockholders' equity1,293,665 878,639 
Total liabilities, redeemable noncontrolling interest and stockholders' equity$3,326,638 $2,010,953 
The accompanying Notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
3


Paycor HCM, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except share amounts)
Three Months Ended Nine Months Ended
 March 31,March 31,
 2022202120222021
Revenues:
Recurring and other revenue$122,189 $99,405 $317,334 $263,372 
Interest income on funds held for clients408 434 1,062 1,392 
Total revenues122,597 99,839 318,396 264,764 
Cost of revenues41,157 41,189 127,850 112,506 
Gross profit81,440 58,650 190,546 152,258 
Operating expenses:
Sales and marketing41,487 26,044 127,957 75,864 
General and administrative54,090 38,441 141,963 106,914 
Research and development9,324 8,833 30,120 26,507 
Total operating expenses104,901 73,318 300,040 209,285 
Loss from operations(23,461)(14,668)(109,494)(57,027)
Other (expense) income:
Interest expense(101)(688)(448)(1,847)
Other(12)80 1,540 320 
Loss before benefit for income taxes(23,574)(15,276)(108,402)(58,554)
Income tax benefit(6,876)(3,215)(24,204)(12,344)
Net loss(16,698)(12,061)(84,198)(46,210)
Less: Accretion of redeemable noncontrolling interests 6,379 11,621 17,900 
Net loss attributable to Paycor HCM, Inc.$(16,698)$(18,440)$(95,819)$(64,110)
Basic and diluted net loss attributable to Paycor HCM, Inc. per share$(0.10)$(0.13)$(0.56)$(0.43)
Weighted average common shares outstanding:
Basic and diluted174,819,649 141,097,740171,881,617 148,113,313 
The accompanying Notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
 
4


Paycor HCM, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
Three Months Ended Nine Months Ended
 March 31,March 31,
 2022202120222021
Net loss$(16,698)$(12,061)$(84,198)$(46,210)
Other comprehensive loss, net of tax:
Unrealized gain (loss) on foreign currency translation97 71 (74)335 
Unrealized loss on available-for-sale securities, net of tax(1,291)(285)(1,736)(347)
Other comprehensive loss, net of tax(1,194)(214)(1,810)(12)
Comprehensive loss(17,892)(12,275)(86,008)(46,222)
Less: Comprehensive income attributable to redeemable noncontrolling interests 6,379 11,621 17,900 
Comprehensive loss attributable to Paycor HCM, Inc.$(17,892)$(18,654)$(97,629)$(64,122)
The accompanying Notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
5


Paycor HCM, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share amounts)
Three Months Ended March 31, 2021
 Series A Preferred StockCommon StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
 Income
Total
Stockholders'
Equity
 SharesAmountSharesAmountTreasury
Stock
Balance, December 31, 20205,143 $175,146 141,097,740 $141 $(245,074)$1,132,660 $(224,483)$2,972 $841,362 
Net loss attributable to Paycor HCM, Inc.— — — — — — (18,440)— (18,440)
Stock-based compensation expense— — — — — 1,875 — — 1,875 
Other comprehensive loss— — — — — — — (214)(214)
Issuance of preferred stock, net2,572 87,626 — — — — — 87,626 
Balance, March 31, 20217,715 $262,772 141,097,740 $141 $(245,074)$1,134,535 $(242,923)$2,758 $912,209 
Three Months Ended March 31, 2022
 Preferred StockSeries A Preferred StockCommon StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Loss
Total
Stockholders'
Equity
 SharesAmountSharesAmountSharesAmountTreasury
Stock
Balance, December 31, 2021— $—  $ 174,429,903 $174 $(245,074)$1,891,259 $(354,872)$583 $1,292,070 
Net loss attributable to Paycor HCM, Inc.— — — — — — — — (16,698)— (16,698)
Stock-based compensation expense— — — — — — — 16,294 — — 16,294 
Issuance of common stock under employee stock plans— — — — 473,102 1 — 3,186 — — 3,187 
Other comprehensive loss— — — — — — — — — (1,194)(1,194)
Other— — — — — — — 6 — — 6 
Balance, March 31, 2022— $—  $ 174,903,005 $175 $(245,074)$1,910,745 $(371,570)$(611)$1,293,665 
The accompanying Notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
 
6


Paycor HCM, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share amounts)
Nine Months Ended March 31, 2021
 Series A Preferred StockCommon StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
 Income
Total
Stockholders'
Equity
 SharesAmountSharesAmountTreasury
Stock
Balance, June 30, 2020 $ 151,718,000 $152 $ $1,129,216 $(178,813)$2,770 $953,325 
Net loss attributable to Paycor HCM, Inc.— — — — — — (64,110)— (64,110)
Stock-based compensation expense— — — — — 5,308 — — 5,308 
Other comprehensive loss— — — — — — — (12)(12)
Issuance of preferred stock, net7,715 262,772 — — — — — — 262,772 
Repurchase of common stock, at cost— — (10,620,260)(11)(245,074)11 — — (245,074)
Balance, March 31, 20217,715 $262,772 141,097,740 $141 $(245,074)$1,134,535 $(242,923)$2,758 $912,209 
Nine Months Ended March 31, 2022
 Preferred StockSeries A Preferred StockCommon StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Loss
Total
Stockholders'
Equity
 SharesAmountSharesAmountSharesAmountTreasury
Stock
Balance, June 30, 2021— $— 7,715 $262,772 141,097,740 $141 $(245,074)$1,133,399 $(275,751)$3,152 $878,639 
Net loss attributable to Paycor HCM, Inc.— — — — — — — — (95,819)— (95,819)
Stock-based compensation expense— — — — — — — 55,321 — — 55,321 
Issuance of common stock sold in the initial public offering, net of offering costs and underwriting discount— — — — 21,275,000 21 — 454,126 — — 454,147 
Conversion of Series A Preferred Stock to common stock upon initial public offering— — (7,715)(262,772)11,705,039 12 — 262,760 — — — 
Issuance of common stock upon vesting of restricted stock units at initial public offering— — — — 352,124 — — — — — — 
Issuance of common stock under employee stock plans— — — — 473,102 1 — 3,186 — — 3,187 
Other comprehensive loss— — — — — — — — — (1,810)(1,810)
Other— — — — — — — 1,953 — (1,953) 
Balance, March 31, 2022— $—  $ 174,903,005 $175 $(245,074)$1,910,745 $(371,570)$(611)$1,293,665 
The accompanying Notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
 
7


Paycor HCM, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended
 March 31,
 20222021
Cash flows from operating activities:  
Net loss$(84,198)$(46,210)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation5,113 5,073 
Amortization of intangible assets and software95,556 103,091 
Amortization of deferred contract costs22,330 13,641 
Stock-based compensation expense55,321 5,308 
Amortization of debt acquisition costs66 511 
Deferred tax benefit(24,227)(12,344)
Bad debt expense1,655 1,005 
Gain on sale of investments(9)(70)
Gain on installment sale(1,359) 
Loss (gain) on foreign currency exchange101 (571)
Loss on lease exit9,055  
Change in fair value of deferred consideration(138) 
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable(5,391)(5,144)
Prepaid expenses and other current assets(5,529)(526)
Other long-term assets334 868 
Accounts payable(160)(2,159)
Accrued liabilities6,151 9,453 
Deferred revenue943 (826)
Other long-term liabilities(5,533)243 
Deferred contract costs(58,450)(45,158)
Net cash provided by operating activities11,631 26,185 
Cash flows from investing activities:
Purchases of client funds available-for-sale securities(178,362)(174,962)
Proceeds from sale and maturities of client funds available-for-sale securities127,603 174,561 
Purchase of property and equipment(1,861)(2,141)
Proceeds from note receivable on installment sale3,040  
Acquisition of intangible assets(4,640)(9,252)
Acquisition of Paltech Solutions, Inc., net of cash acquired (16,592)
Internally developed software costs(22,667)(15,424)
Net cash used in investing activities(76,887)(43,810)
Cash flows from financing activities:
Net change in cash and cash equivalents held to satisfy client funds obligations1,204,091 172,311 
Payment of contingent consideration (1,000)
Payment of deferred consideration(2,752) 
Proceeds from promissory note with related party 64,989 
Repayment of promissory note with related party (64,989)
Proceeds from line-of-credit3,500 56,217 
Repayments of line-of-credit(52,600)(60,828)
Proceeds from debt 25,000 
Repayments of debt (758)
Proceeds from issuance of preferred stock, net of offering costs 262,772 
Purchase of treasury stock at cost (245,074)
Proceeds from the issuance of common stock sold in the IPO, net of offering costs and underwriting discount454,915  
Redemption of Redeemable Series A Preferred Stock (acquisition of non-controlling interest)(260,044)— 
Proceeds from employee stock purchase plan3,186  
Dividends paid to noncontrolling interests— (6,194)
Other financing activities(395)(397)
Net cash provided by financing activities1,349,901 202,049 
Impact of foreign exchange on cash and cash equivalents18 (35)
Net change in cash, cash equivalents, restricted cash and short-term investments, and funds held for clients1,284,663 184,389 
Cash, cash equivalents, restricted cash and short-term investments, and funds held for clients, beginning of period560,000 546,448 
Cash, cash equivalents, restricted cash and short-term investments, and funds held for clients, end of period$1,844,663 $730,837 
Supplemental disclosure of non-cash investing, financing and other cash flow information:
Capital expenditures in accounts payable$25 $28 
Cash paid during the year for interest$154 $510 
Reconciliation of cash, cash equivalents, restricted cash and short-term investments, and funds held for clients to the Condensed Consolidated Balance Sheets
Cash and cash equivalents$134,004 $19,364 
Restricted cash and short-term investments 6,076 
Funds held for clients1,710,659 705,397 
Total cash, cash equivalents, restricted cash and short-term investments, and funds held for clients$1,844,663 $730,837 

The accompanying Notes to the Condensed Consolidated Financial Statements are an integral part of these statements.
8


Paycor HCM, Inc. and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
(all amounts in thousands, except share and per share data)

1. ORGANIZATION AND DESCRIPTION OF BUSINESS:
Paycor HCM, Inc. (“Paycor HCM” or “the Company”) and its subsidiaries is a cloud-based provider of human capital management (“HCM”) software solutions for small and medium-sized employers located primarily in the United States (“U.S.”). Solutions provided include payroll, workforce management and human resources (“HR”) related services such as talent management, reporting and analytics and other payroll-related services. Services are generally provided in a Software-as-a-Service (“SaaS”) delivery model utilizing a cloud-based platform.
Paycor HCM is a holding company with no material operating assets or operations that was formed on August 24, 2018 to effect the acquisition of Paycor, Inc. and its subsidiaries (“Paycor”). On September 7, 2018, Paycor HCM, through its subsidiary companies, entered into the Agreement and Plan of Merger to acquire Paycor (the “Apax Acquisition”). The Apax Acquisition closed on November 2, 2018. Paycor HCM is controlled by Pride Aggregator, L.P. which is controlled by a syndication led by Apax Partners L.P. (“Apax”), a private equity firm. As a result of the Apax Acquisition, Paycor is an indirect controlled subsidiary of Paycor HCM.

Initial Public Offering

On July 20, 2021, the Company priced the initial public offering (“IPO”) of 18,500,000 shares of its common stock (the “Firm Shares”), $0.001 par value per share, at an offering price of $23.00 per share (the “IPO Price”). The underwriters were granted a 30-day option to purchase up to an additional 2,775,000 shares of common stock from the Company (the “Option Shares”), which was exercised by the underwriters in whole. The IPO closed and both the Firm Shares and the Option Shares were delivered on July 23, 2021. In aggregate, the IPO shares issued generated approximately $454,915, which is net of approximately $30,583 in underwriters’ discount and $3,827 of offering costs paid during the nine months ended March 31, 2022. Upon completion of the IPO, $4,595 of offering costs, $3,827 of which were paid during the nine months ended March 31, 2022, were recorded to additional paid-in capital and accounted for as a reduction of the IPO proceeds in the condensed consolidated balance sheets. Additionally, upon the closing of the IPO:

all of the Company’s outstanding shares of Series A Preferred Stock were automatically converted into 11,705,039 shares of the Company’s common stock;
the Company used a portion of the proceeds to effect the redemption of all of the outstanding shares of the Series A Redeemable Preferred Stock (acquisition of non-controlling interest) (“Series A Redeemable Preferred Stock” or “Redeemable Noncontrolling Interest”) at a redemption price of 101% of the liquidation preference, plus the amount of all accrued dividends for the then current and all prior dividend payment periods, for a total of $260,044;
the outstanding Long Term Incentive Plan Units (“LTIP Units”) converted to 1,761,578 restricted stock units (“RSUs”) and the Company began recognizing compensation expense equal to the aggregate dollar value over the requisite two-year service period; and
the performance-based incentive units granted under the Pride Aggregator, L.P. Management Equity Plan (“MEP”) converted to time-based incentive units, with 25% vesting upon successive 6-month anniversary dates for the 24 months beginning on the date of the Company’s IPO.

In connection with the Company’s IPO, the Company executed a 1,517.18 for 1 share stock split (“IPO Stock Split”) relating to its common stock. All share and per share amounts have been retroactively adjusted to reflect the IPO Stock Split for all periods presented within the unaudited condensed consolidated financial statements.
9


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of presentation and consolidation
The accompanying interim unaudited condensed consolidated financial statements of the Company were prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and include all of the information and disclosures required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim reporting. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended June 30, 2021 in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 2, 2021. The unaudited condensed consolidated financial statements for interim periods do not include all disclosures required by U.S. GAAP for annual financial statements and are not necessarily indicative of results for the future interim periods and the full fiscal year. Adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of the unaudited condensed consolidated financial position, results of operations and cash flows at the dates and for the periods presented have been included. All intercompany transactions and balances have been eliminated in consolidation.
 Use of estimates
The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the recognition of revenue, evaluation of potential impairment of goodwill and intangible assets, and the valuation of stock-based compensation.
The Company’s results of operations and financial condition can also be affected by economic, political, legislative, regulatory and legal actions, including but not limited to health epidemics and pandemics and their resulting economic impact, including the impact from the COVID-19 pandemic. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies can have a significant effect on the Company’s results of operations and financial condition. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings.
Stock-based compensation
The Company recognizes all employee and director stock-based compensation as a cost in the unaudited condensed consolidated financial statements. Equity-classified awards are measured at the grant date fair value of the award and expense is recognized, net of actual forfeitures, on a straight-line basis over the requisite service period for the award.

For periods prior to the IPO, the Company estimated grant date fair value using a Monte Carlo simulation model. As the Company's equity was not publicly traded, there was no history of market prices for the Company's equity. Thus, estimating grant date fair value required the Company to make assumptions, including the value of the Company's equity, expected volatility, expected term and the expected risk-free rate of return.

For periods subsequent to the IPO, the Company establishes grant date fair value of RSUs based on the fair value of the Company's underlying common stock. The Company estimates the grant date fair value of stock options, including common stock purchased as a part of the Company's Employee Stock Purchase Plan ("ESPP"), using the Black-Scholes option pricing model, which requires management to make assumptions with respect to the fair value of the Company's award on the grant date, including the expected term of the award, the expected volatility of the Company's stock calculated based on a period of time generally commensurate with the expected term of the award, the expected risk-free rate of return, and expected dividend yields of the Company's stock. See Note 13 - “Equity Compensation Plans” for additional information on the Company’s stock-based compensation plans.
10


Accounts receivable, net
Accounts receivable balances are shown on the condensed consolidated balance sheets net of the allowance for doubtful accounts of $3,683 and $2,402 as of March 31, 2022 and June 30, 2021, respectively. The allowance for doubtful accounts considers factors such as historical experience, credit quality, age of the accounts receivable balance and current and forecasted economic conditions that may affect a customer’s ability to pay. The Company performs ongoing credit evaluations and generally requires no collateral from clients. Management reviews individual accounts as they become past due to determine collectability. The allowance for doubtful accounts is adjusted periodically based on management’s consideration of past due accounts. Individual accounts are charged against the allowance when all reasonable collection efforts have been exhausted.
Sales and marketing
Sales and marketing expenses consist of costs associated with the Company’s direct sales and marketing staff, including employee-related costs, marketing, advertising and promotion expenses, and other related costs. Advertising and promotion costs are expensed as incurred. Advertising and promotion expense totaled approximately $5,354 and $4,223 for the three months ended March 31, 2022 and 2021, respectively. Advertising and promotion expense totaled approximately $15,229 and $11,520 for the nine months ended March 31, 2022 and 2021, respectively.
Income taxes
Income tax benefit for the three months ended March 31, 2022 and 2021 was $6,876 and $3,215, respectively, reflecting an effective tax rate of 29.2% and 21.0% for the three month periods ended March 31, 2022 and 2021, respectively. Income tax benefit for the nine months ended March 31, 2022 and 2021 was $24,204 and $12,344, respectively, reflecting an effective tax rate of 22.3% and 21.1% for the nine month periods ended March 31, 2022 and 2021, respectively.
Pending accounting pronouncements
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases” (Topic 842). This update amends existing accounting standards for lease accounting and requires lessees to recognize virtually all their leases on the balance sheet by recording a right-of-use asset and a lease liability (for other than short-term leases). The Company has formed a project team to review contracts to determine which qualify as a lease and then evaluate the impact of the adoption of this principle on the Company’s consolidated financial statements. The Company is evaluating, designing, and implementing new processes and internal controls to meet the requirements to report and disclose financial information relating to the Company’s leases. In addition, the Company is designing a process to perform the necessary calculations to derive the right-of-use assets and liabilities associated with each lease to support the requirements of the new standard.

The Company anticipates that the adoption of this standard will materially affect its condensed consolidated balance sheets. The Company will adopt this ASU on July 1, 2022 using the modified retrospective approach. The Company plans to apply the package of practical expedients in the guidance which, among other things, includes carrying forward the historical lease classification. The Company plans to make accounting policy elections not to apply the new guidance to leases with a term of less than 12 months, as well as to derive the incremental borrowing rate at the July 1, 2022 adoption date based on the remaining lease term as of the adoption date.
In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses” (Topic 326). This update establishes a new approach to estimate credit losses on certain types of financial instruments. The update requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The amended standard will also update the impairment model for available-for-sale debt securities, requiring entities to determine whether all or a portion of the unrealized loss on any such securities is a credit loss. The Company is currently evaluating this standard and the potential effects of these changes to its condensed consolidated financial statements and expects to adopt this new standard in the fiscal year beginning July 1, 2023 if the Company continues to qualify as an emerging growth company.
11


3. REVENUE:
The following table disaggregates revenue from contracts by recurring fees and implementation services and other, which the Company believes depicts the nature, amount and timing of its revenue:
 Three Months Ended March 31,Nine Months Ended March 31,
 2022202120222021
Recurring fees$119,108 $95,767 $307,873 $252,743 
Implementation services and other3,081 3,638 9,461 10,629 
Recurring and other revenue$122,189 $99,405 $317,334 $263,372 
Deferred revenue
The Company recognizes deferred revenue for nonrefundable upfront fees as well as for subscription services related to certain ancillary products invoiced prior to the satisfaction of the performance obligation.
The nonrefundable upfront fees related to implementation services are typically included on the client’s first invoice. Implementation fees are deferred and recognized as revenue over an estimated 24-month period to which the material right exists, which is the period the client is expected to benefit from not having to pay an additional nonrefundable implementation fee upon renewal of the service.
The following table summarizes the changes in deferred revenue related to the nonrefundable upfront fees and recurring subscription services:
 Three Months Ended March 31,Nine Months Ended March 31,
2022202120222021
Balance, beginning of period$15,289 $16,746 $16,047 $15,916 
Deferred revenue acquired   1,374 
Deferral of revenue6,467 3,792 15,868 9,767 
Revenue recognized(4,816)(3,979)(14,926)(10,582)
Impact of foreign exchange32 (10)(17)74 
Balance, end of period$16,972 $16,549 $16,972 $16,549 
Deferred revenue is recorded within deferred revenue and other long-term liabilities on the condensed consolidated balance sheets. The Company will recognize deferred revenue of $4,359 in fiscal year 2022, $8,835 in fiscal year 2023, $2,912 in fiscal year 2024, and $866 thereafter.
 Deferred contract costs
The following table presents the deferred contract costs balance and related amortization expense for these deferred contract costs.
 As of and for the Three Months Ended March 31, 2022
 Beginning Balance
Capitalization of Costs
Amortization
Ending Balance
Costs to obtain a contract$62,471 $9,076 $(3,713)$67,834 
Costs to fulfill a contract76,543 11,681 (4,555)83,669 
Total$139,014 $20,757 $(8,268)$151,503 
12


 As of and for the Three Months Ended March 31, 2021
 Beginning Balance
Capitalization of Costs
Amortization
Ending Balance
Costs to obtain a contract$42,010 $7,433 $(2,351)$47,092 
Costs to fulfill a contract50,620 8,535 (2,808)56,347 
Total$92,630 $15,968 $(5,159)$103,439 
 As of and for the Nine Months Ended March 31, 2022
 Beginning Balance
Capitalization of Costs
Amortization
Ending Balance
Costs to obtain a contract$52,926 $25,006 $(10,098)$67,834 
Costs to fulfill a contract62,457 33,444 (12,232)83,669 
Total$115,383 $58,450 $(22,330)$151,503 
 As of and for the Nine Months Ended March 31, 2021
 Beginning Balance
Capitalization of Costs
Amortization
Ending Balance
Costs to obtain a contract$32,233 $21,069 $(6,210)$47,092 
Costs to fulfill a contract39,689 24,089 (7,431)56,347 
Total$71,922 $45,158 $(13,641)$103,439 
Deferred contract costs are recorded within deferred contract costs and long-term deferred contract costs on the condensed consolidated balance sheets. Amortization of costs to fulfill a contract and costs to obtain a contract are recorded in cost of revenues and sales and marketing expense in the unaudited condensed consolidated statements of operations, respectively. The Company regularly reviews its deferred costs for impairment and did not recognize an impairment loss during any period presented in this report.
4. BUSINESS COMBINATION AND ASSET ACQUISITION:
Acquisition of Paltech Solutions, Inc.
On September 24, 2020, the Company entered into a share purchase agreement with Paltech Solutions, Inc. (doing business as “7Geese”), a performance management SaaS application, to acquire 100% of the equity interests (the “7Geese Acquisition”). The acquisition enabled the Company to expand its current service offerings. The cash consideration was funded using proceeds from the issuance of a term loan.
13


The acquisition was accounted for as a business combination. The purchase price was allocated to the assets acquired and liabilities assumed based on the estimated fair value at the date of acquisition. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, $1,661 of which is deductible for tax purposes. Goodwill consists primarily of the acquired workforce, synergistic benefits, and growth opportunities. The factors contributing to the recognition of goodwill were based on strategic benefits that are expected to be realized from the 7Geese Acquisition. The benefits include acquiring a software technology tailored to small and medium-sized businesses that can be integrated into the current suite of Company products. The final purchase price allocation is as follows:
 7Geese Acquisition
Cash consideration$16,847 
Contingent consideration3,000 
Deferred consideration2,900 
Fair value of total consideration22,747