SPECIAL CHARGES (RECOVERIES)

6 Months Ended

Dec. 31, 2024

Restructuring, Settlement and Impairment Provisions [Abstract]

Special charges (recoveries) include costs and recoveries that relate to certain restructuring initiatives that we have undertaken from time to time under our various restructuring plans, as well as acquisition and divestiture-related costs and other similar charges.


	Three Months Ended December 31,				Six Months Ended December 31,
	2024		2023		2024		2023
Business Optimization Plan	$	12,347	$	—	$	54,850	$	—
Micro Focus Acquisition Restructuring Plan	611		44,760		(1,016)		51,624
Other historical restructuring plans	(540)		(266)		(833)		(383)
Divestiture-related costs	49		5,385		4,209		6,982
Acquisition-related costs	(44)		50		692		1,120
Other charges	2,815		4,237		4,472		8,617
Total	$	15,238	$	54,166	$	62,374	$	67,960

Business Optimization Plan

During the first quarter of Fiscal 2025, we made a strategic decision to align the Company’s workforce to support its growth and innovation plans (Business Optimization Plan). The Business Optimization Plan charges relate to workforce reductions. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate.

As of December 31, 2024, we expect total costs to be incurred in connection with the Business Optimization Plan to be approximately $60.0 million, of which $54.9 million has been recorded within Special charges (recoveries) within the Condensed Consolidated Statements of Income to date.

A reconciliation of the beginning and ending restructuring liability for the Business Optimization Plan, which is included within Accounts payable and accrued liabilities in our Condensed Consolidated Balance Sheets, for the six months ended December 31, 2024 is shown below.


Business Optimization Plan	Workforce reduction		Facility charges		Total
Balance payable as of June 30, 2024	$	—	$	—	$	—
Accruals and adjustments	52,621		844		53,465
Cash payments	(35,368)		(1)		(35,369)
Foreign exchange and other non-cash adjustments	(444)		(379)		(823)
Balance payable as of December 31, 2024	$	16,809	$	464	$	17,273

Micro Focus Acquisition Restructuring Plan

During the third quarter of Fiscal 2023, as part of the Micro Focus Acquisition, we made a strategic decision to implement restructuring activities to reduce our overall workforce and further reduce our real estate footprint around the world (Micro Focus Acquisition Restructuring Plan). The Micro Focus Acquisition Restructuring Plan charges relate to facility costs and workforce reductions. Facility costs include the accelerated amortization associated with the abandonment of right of use assets, the write-off of property and equipment and other related variable lease and exit costs. These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate.

Since the inception of the Micro Focus Acquisition Restructuring Plan, $145.5 million has been recorded within Special charges (recoveries) within the Condensed Consolidated Statements of Income to date. We do not expect to incur any further significant charges relating to the Micro Focus Acquisition Restructuring Plan.

A reconciliation of the beginning and ending restructuring liability for the Micro Focus Acquisition Restructuring Plan, which is included within Accounts payable and accrued liabilities in our Condensed Consolidated Balance Sheets, for the six months ended December 31, 2024 is shown below.


Micro Focus Acquisition Restructuring Plan	Workforce reduction		Facility charges		Total
Balance payable as of June 30, 2024	$	11,765	$	16,326	$	28,091
Accruals and adjustments	(1,047)		1,400		353
Cash payments	(7,137)		(2,832)		(9,969)
Foreign exchange and other non-cash adjustments	(54)		(774)		(828)
Balance payable as of December 31, 2024	$	3,527	$	14,120	$	17,647

Divestiture-related costs

Divestiture-related costs, recorded within Special charges (recoveries), include the direct costs related to the AMC Divestiture.

Acquisition-related costs

Acquisition-related costs, recorded within Special charges (recoveries), include direct costs of potential and completed acquisitions.

Other charges

For the three and six months ended December 31, 2024, Other charges include $2.8 million and $4.4 million, respectively, of other miscellaneous charges primarily associated with the Micro Focus Acquisition.

For the three and six months ended December 31, 2023, Other charges include $2.5 million and $5.4 million, respectively, of compensation related charges, and $1.3 million and $2.4 million, respectively, of other miscellaneous charges, both associated with the Micro Focus Acquisition, and $0.5 million and $0.9 million, respectively, related to pre-acquisition equity incentives of Zix Corporation, which upon acquisition were replaced by equivalent value cash settlements.