Leases

6 Months Ended

Oct. 31, 2021

13. Leases

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 11 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 five 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 the second quarter of fiscal 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 operations.

The components of lease expense were as follows:

	Three Months Ended October 31,						Six Months Ended October 31,
	2021			2020			2021			2020
	(in thousands)
Finance lease cost
Amortization of ROU assets	$	257		$	317		$	537		$	655
Interest on lease liabilities		21			30			45			61
		278			347			582			716
Operating lease cost		13,457			14,027			27,275			28,010
Short-term lease cost		213			104			482			212
Variable lease cost		3,431			2,785			5,099			5,192
Lease impairment cost		7,392			—			7,392			—
Sublease income		(228	)		(195	)		(459	)		(275	)
Total lease cost	$	24,543		$	17,068		$	40,371		$	33,855

Supplemental cash flow information related to leases was as follows:

	Six Months Ended October 31,
	2021		2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	30,133	$	32,321
Financing cash flows from finance leases	$	592	$	664

ROU assets obtained in exchange for lease obligations:
Operating leases	$	7,208	$	6,000
Finance leases	$	317	$	509

Supplemental balance sheet information related to leases was as follows:

	October 31, 2021			April 30, 2021
	(in thousands)
Finance Leases:

Property and equipment, at cost	$	4,675		$	4,801
Accumulated depreciation		(2,765	)		(2,590	)
Property and equipment, net	$	1,910		$	2,211

Other accrued liabilities	$	895		$	1,010
Other liabilities		1,094			1,301
Total finance lease liabilities	$	1,989		$	2,311

Weighted average remaining lease terms:
Operating leases	4.7 years			5.0 years
Finance leases	2.6 years			2.7 years

Weighted average discount rate:
Operating leases		4.7	%		4.8	%
Finance leases		3.9	%		4.2	%

Maturities of lease liabilities were as follows:

Year Ending April 30,	Operating		Financing
	(in thousands)
2022 (excluding the six months ended October 31, 2021)	$	30,635	$	499
2023		47,762		816
2024		40,837		528
2025		34,105		219
2026		29,435		21
Thereafter		21,229		—
Total lease payments		204,003		2,083
Less: imputed interest		21,522		94
Total	$	182,481	$	1,989