Balance Sheet Components

9 Months Ended

Mar. 31, 2023

Balance Sheet Related Disclosures [Abstract]

Accounts Receivable, net

Our accounts receivable consist primarily of amounts due from payment processors, merchant partners, affiliate network partners and servicing fees due from third-party loan owners. We evaluate accounts receivable to determine management’s current estimate of expected credit losses based on historical experience and future expectations and record an allowance for credit losses, as applicable. Our allowance for credit losses with respect to accounts receivable was $12.3 million and $13.9 million as of March 31, 2023 and June 30, 2022, respectively.

Property, Equipment and Software, net

Property, equipment and software, net consisted of the following (in thousands):


	March 31, 2023		June 30, 2022
Internally developed software	$	344,497	$	200,621
Leasehold improvements	20,128		16,169
Computer equipment	10,797		10,751
Furniture and equipment	6,435		4,279
Total Property, equipment and software, at cost	$	381,857	$	231,820
Less: Accumulated depreciation and amortization	(104,701)		(60,338)
Total Property, equipment and software, net	$	277,156	$	171,482

Depreciation and amortization expense on property, equipment and software was $23.9 million and $53.0 million for the three and nine months ended March 31, 2023, respectively, and $7.6 million and $19.2 million for the three and nine months ended March 31, 2022, respectively.

No impairment losses related to property, equipment and software were recorded during the three and nine months ended March 31, 2023 and 2022.

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill during the nine months ended March 31, 2023 were as follows (in thousands):


Balance as of June 30, 2022	$	539,534
Additions (1)	9,443
Effect of foreign currency translation	(11,851)
Balance as of March 31, 2023	$	537,126

(1)Refer to Note 5. Acquisitions for a description of additions to goodwill during the nine months ended March 31, 2023.

No impairment losses related to goodwill were recorded during the three and nine months ended March 31, 2023 and 2022.

Intangible assets consisted of the following (in thousands):


	March 31, 2023
	Gross		Accumulated Amortization		Net		Weighted Average Remaining Useful Life (in years)
Merchant relationships	$	37,933	$	(19,887)	$	18,046	2.9
Developed technology	39,500		(26,159)		13,340		1.2
Assembled workforce	12,490		(7,909)		4,581		0.6
Trademarks and domains, definite	1,460		(932)		528		1.9
Trademarks, licenses and domains, indefinite	11,422		—		11,422		Indefinite
Other intangibles	350		—		350		Indefinite
Total intangible assets	$	103,155	$	(54,887)	$	48,267


	June 30, 2022
	Gross		Accumulated Amortization		Net		Weighted Average Remaining Useful Life (in years)
Merchant relationships	$	38,371	$	(10,281)	$	28,090	3.6
Developed technology	39,782		(15,882)		23,900		1.9
Assembled workforce	12,490		(1,664)		10,826		1.3
Trademarks and domains, definite	1,507		(802)		705		2.4
Trademarks and domains, indefinite	2,146		—		2,146		Indefinite
Other intangibles	350		—		350		Indefinite
Total intangible assets	$	94,646	$	(28,629)	$	66,017

Amortization expense for intangible assets was $23.6 million and $38.4 million for the three and nine months ended March 31, 2023, respectively, and $5.5 million and $16.4 million for the three and nine months ended March 31, 2022, respectively. No impairment losses related to intangible assets were recorded during the three and nine months ended March 31, 2023 and 2022.

The expected future amortization expense of these intangible assets as of March 31, 2023 is as follows (in thousands):


2023 (remaining three months)	$	25,910
2024	10,260
2025	251
2026	59
2027 and thereafter	15
Total amortization expense	$	36,495

Commercial Agreement Assets

During the year ended June 30, 2022, we granted warrants in connection with our commercial agreements with certain subsidiaries of Amazon.com, Inc. (“Amazon”). The warrants were granted in exchange for certain performance provisions and the benefit of acquiring new users. We recognized an asset of $133.5 million associated with the portion of the warrants that were fully vested upon grant. The asset was valued based on the fair value of the warrants and represents the probable future economic benefit to be realized over the approximate 3.2 year term of the commercial agreement at the grant date. For the three and nine months ended March 31, 2023, we recognized amortization expense of $10.2 million and $31.1 million, respectively, and $10.2 million and $16.0 million for the three and nine months ended March 31, 2022 in our interim condensed consolidated statements of operations and comprehensive loss as a component of sales and marketing expense. Refer to Note 15. Stockholders’ Equity for further discussion of the warrants.

During the year ended June 30, 2021, we recognized an asset in connection with a commercial agreement with Shopify Inc. (“Shopify”), in which we granted warrants in exchange for the opportunity to acquire new merchant partners. This asset represents the probable future economic benefit to be realized over the expected benefit period and is valued based on the fair value of the warrants on the grant date. We recognized an asset of $270.6 million associated with the fair value of the warrants, which were fully vested as of March 31, 2023. The expected benefit period of the asset was initially estimated to be four years, and the remaining useful life of the asset is reevaluated each reporting period. During fiscal year 2022, the remaining expected benefit period was extended by two years upon the execution of an amendment to the commercial agreement with Shopify which extended the term of the agreement. During the three and nine months ended March 31, 2023, we recorded amortization expense related to the commercial agreement asset of $8.8 million and $26.9 million, respectively, and $16.7 million and $50.7 million for the three and nine months ended March 31, 2022, respectively, in our interim condensed consolidated statements of operations and comprehensive loss as a component of sales and marketing expense.

During the year ended June 30, 2021, we recognized an asset in connection with a commercial agreement with an enterprise partner, in which we granted stock appreciation rights in exchange for the benefit of acquiring access to the partner's consumers. This asset represents the probable future economic benefit to be realized over the three-year expected benefit period and is valued based on the fair value of the stock appreciation rights on the grant date. We initially recognized an asset of $25.9 million associated with the fair value of the stock appreciation rights. During the three and nine months ended March 31, 2023, we recorded amortization expense related to the asset of $2.0 million and $6.2 million, respectively, and $2.0 million and $6.0 million for the three and nine months ended March 31, 2022, respectively, in our interim condensed consolidated statements of operations and comprehensive loss as a component of sales and marketing expense.

Other Assets

Other assets consisted of the following (in thousands):


	March 31, 2023		June 30, 2022
Processing reserves	$	53,728	$	26,483
Derivative instruments	49,459		49,983
Equity securities, at cost	43,172		43,172
Operating lease right-of-use assets	34,054		50,671
Prepaid expenses	29,878		37,497


Other assets	60,348		73,761
Total other assets	$	270,639	$	281,567

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands)


	March 31, 2023		June 30, 2022
Operating lease liability	$	55,977	$	65,713
Collateral held for derivative instruments	52,219		55,779
Accrued expenses	39,967		67,343

Other liabilities	44,197		48,763
Total accrued expenses and other liabilities	$	192,360	$	237,598