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Fair Value Measurements | 3 Months Ended
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Sep. 30, 2023
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Note 6. Fair Value Measurements The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1—Inputs are unadjusted, quoted prices in active markets for identical, assets or liabilities at the measurement date; Level 2—Inputs are quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; Level 3—Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Money market funds are classified as Level 1 as the assets are valued using quoted prices in active markets. Liabilities for contingent consideration related to business combinations are classified as Level 3 liabilities as the Company uses unobservable inputs in the valuation, specifically related to the projected total contract value generated by the acquired businesses for a distinct period of time. The following table sets forth the Company’s financial assets that were measured at fair value on a recurring basis as of the date indicated by level within the fair value hierarchy (in thousands):
|  | September 30, 2023 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 75,639 |  |  | $ | — |  |  | $ | — |  |  | $ | 75,639 |
Total |  | $ | 75,639 |  |  | $ | — |  |  | $ | — |  |  | $ | 75,639 |
The following tables set forth the Company’s financial liabilities that were measured at fair value on a recurring basis as of the dates indicated by level within the fair value hierarchy (in thousands):
|  | September 30, 2023 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Liability for contingent consideration, current portion |  | $ | — |  |  | $ | — |  |  | $ | 933 |  |  | $ | 933 |
Liability for contingent consideration, non-current portion |  |  | — |  |  |  | — |  |  |  | 4,317 |  |  |  | 4,317 |
Total |  | $ | — |  |  | $ | — |  |  | $ | 5,250 |  |  | $ | 5,250 |
|  | June 30, 2023 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Liability for contingent consideration, current portion |  | $ | — |  |  | $ | — |  |  | $ | 2,364 |  |  | $ | 2,364 |
Liability for contingent consideration, non-current portion |  | — |  |  |  | — |  |  |  | 4,317 |  |  |  | 4,317 |
Total |  | $ | — |  |  | $ | — |  |  | $ | 6,681 |  |  | $ | 6,681 |
In connection with the acquisition of Paragon Data Labs, Inc. in May 2023, the Company recorded a contingent consideration liability of $4.3 million on the acquisition date for the estimated fair value of the contingent consideration. The fair value was measured based on the probability of achieving certain performance measures pursuant to the acquisition agreement. The liability was included in other liabilities on the audited consolidated balance sheet as of June 30, 2023 with no changes in fair value during the three months ended September 30, 2023. In connection with the acquisition of Billstream in June 2022, the Company recorded $4.1 million on the acquisition date for the estimated fair value of the contingent consideration. The fair value was measured based on the probability of achieving certain performance measures pursuant to the acquisition agreement. The fair value of the contingent consideration was remeasured at $2.4 million and was included in other current liabilities on the audited consolidated balance sheet as of June 30, 2023. As of September 30, 2023, the fair value of the contingent consideration was remeasured at $0.9 million. The fair value of the contingent consideration was initially estimated on the acquisition date using the Monte Carlo simulation and included key assumptions used by management related to the estimated probability of occurrence and discount rates. Subsequent changes in the fair value of the contingent consideration liabilities, resulting from management’s revision of key assumptions and estimates, have been recorded in general and administrative expense in the unaudited condensed consolidated statements of operations. Gains and losses arising from exchange rate fluctuation on these liabilities not denominated in U.S. Dollars have been included in interest and other income (expense), net on the unaudited condensed consolidated statements of operations. Changes in the fair value of contingent consideration liabilities during the three months ended September 30, 2023 and 2022 were as follows (in thousands):
|  | Three Months Ended September 30, |
|  | 2023 |  |  | 2022 |
Balance, beginning of period |  | $ | 6,681 |  |  | $ | 13,835 |
Payment of contingent consideration |  |  | — |  |  |  | (9,299 | )
Change in fair value of contingent consideration |  |  | (1,431 | ) |  |  | — |
Effect of foreign currency exchange rate changes |  |  | — |  |  |  | (410 | )
Balance, end of period |  | $ | 5,250 |  |  | $ | 4,126 |
Other financial instruments consist of accounts receivable, accounts payable and accrued expenses and other current liabilities. Accounts receivable, accounts payable and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to expected receipt or payment.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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