pycr-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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Form 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


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 class	Trading 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)

————————

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 and 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 filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

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 Exchange Act). Yes o No x

As of October 31, 2024, the number of shares of the registrant’s common stock outstanding was 179,658,817.

Table of Contents


Part I - FINANCIAL INFORMATION
Item 1. Financial Statements			5
Unaudited Condensed Consolidated Balance Sheets as of Septemb er 3 0 , 2024 and June 30, 202 4			5
Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended September 30 , 2024 and 2023			6
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended September , 2024 and 2023			7
Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended September 3 0 , 2024 and 2023			8
Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30 , 2024 and 2023			9
Notes to the Unaudited Condensed Consolidated Statements			10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			19
Item 3. Quantitative and Qualitative Disclosures About Market Risk			33
Item 4. Controls and Procedures			35
Part II - OTHER INFORMATION
Item 1. Legal Proceedings			36
Item 1A. Risk Factors			36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			36
Item 3. Defaults Upon Senior Securities			36
Item 4. Mine Safety Disclosures			36
Item 5. Other Information			36
Item 6. Exhibits			37
Signatures			38

Table of Contents

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors,” contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, our objectives for future operations, and any statements of a general economic or industry specific nature, are forward-looking statements. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely,” “outlook,” “potential,” “targets,” “contemplates,” or the negative or plural of these words and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe, based on information currently available to our management, may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, related to our operations, financial results, financial condition, business, prospects, growth strategy, and liquidity. Accordingly, there are, or will be, important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to:

•Our ability to manage our growth effectively.

•The resulting effects of unauthorized access to our customers’ or their employees’ personal data as a result of a breach of our or our vendors’ securities measures, including by way of computer viruses, worms, phishing and ransomware attacks, malicious software programs, and other data security threats.

•Our dependency on third-party security measures.

•The expansion and retention of our direct sales force with qualified and productive persons and the related effects on the growth of our business.

•The impact on customer expansion and retention if implementation, user experience, customer service, or performance relating to our solutions is not satisfactory.

•The timing of payments made to employees and taxing authorities relative to the timing of when a customer’s electronic funds transfers are settled to our account.

•Future acquisitions of other companies’ businesses, technologies, or customer portfolios.

•The continued service of our key executives.

•Our ability to innovate and deliver high-quality, technologically advanced products and services.

•Risks specifically associated with our development and use of artificial intelligence in our solutions.

•Our ability to attract and retain qualified personnel, including software developers and skilled IT, sales, marketing, and operation personnel.

•The proper operation of our software.

•Our relationships with third parties that provide financial and other functionality and other functionality integrated into our human capital management platform.

•Damage, failure, or disruption of our Software-as-a-Service delivery model, data centers, or our third-party providers’ services.

•Our ability to protect our intellectual and proprietary rights.

•The use of open source software in our applications.

•The growth of the market for cloud-based human capital management and payroll software among mid-market businesses.

•The competitiveness of our market generally.

•The extent to which negative macroeconomic conditions persist or worsen in the markets in which we or our customers operate.

•The impact of an economic downturn or recession in the United States or global economy.

Table of Contents

•Our customers’ dependence on our solutions to comply with applicable laws.

•Our ability to comply with anti-corruption, anti-bribery and similar laws.

•Changes in laws, regulations, or requirements applicable to our software and services.

•The impact of privacy, data protection, tax and other laws and regulations.

•Our ability to maintain effective internal controls over financial reporting.

•The other risk factors set forth under Item 1A of Part I of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on August 22, 2024.

Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations and assumptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We undertake no obligation to publicly update any forward-looking statement after the date of this report, whether as a result of new information, future developments or otherwise, or to conform these statements to actual results or revised expectations, except as may be required by law.

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)


	September 30, 2024		June 30, 2024
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	97,618	$	117,958
Accounts receivable, net allowance for credit losses	47,957		48,164
Deferred contract costs	73,128		70,377
Prepaid expenses	14,693		12,749
Other current assets	8,673		3,458
Current assets before funds held for clients	242,069		252,706
Funds held for clients	967,189		1,109,136
Total current assets	1,209,258		1,361,842
Property and equipment, net	34,871		35,220
Operating lease right-of-use assets	14,021		14,417
Goodwill	766,832		766,653
Intangible assets, net	147,925		171,493
Capitalized software, net	70,173		67,376
Long-term deferred contract costs	194,941		189,826
Other long-term assets	2,853		2,566
Total assets	$	2,440,874	$	2,609,393
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	20,419	$	27,309
Accrued expenses and other current liabilities	29,535		26,450
Accrued payroll and payroll related expenses	22,006		44,923
Deferred revenue	13,124		13,600
Current liabilities before client fund obligations	85,084		112,282
Client fund obligations	963,998		1,111,373
Total current liabilities	1,049,082		1,223,655
Deferred income taxes	11,197		16,019
Long-term operating leases	12,653		13,447
Other long-term liabilities	68,309		69,346

Total liabilities	1,141,241		1,322,467
Commitments and contingencies (Note 12)

Stockholders' equity:
Common stock $0.001 par value per share, 500,000,000 shares authorized, 178,821,615 shares outstanding at September 30, 2024 and 178,210,263 shares outstanding at June 30, 2024	179		178
Treasury stock, at cost, 10,620,260 shares at September 30, 2024 and June 30, 2024	(245,074)		(245,074)
Preferred stock, $0.001 par value, 50,000,000 shares authorized, — shares outstanding at September 30, 2024 and June 30, 2024	—		—

Additional paid-in capital	2,097,454		2,081,668
Accumulated deficit	(555,721)		(548,437)
Accumulated other comprehensive income (loss)	2,795		(1,409)
Total stockholders' equity	1,299,633		1,286,926
Total liabilities and stockholders' equity	$	2,440,874	$	2,609,393

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

Paycor HCM, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except share amounts)



	Three Months Ended September 30,
		2024		2023
Revenues:
Recurring and other revenue		$	153,999	$	132,708
Interest income on funds held for clients		13,477		10,880
Total revenues		167,476		143,588
Cost of revenues		59,217		51,378
Gross profit		108,259		92,210
Operating expenses:
Sales and marketing		56,789		52,778
General and administrative		48,296		48,749
Research and development		17,428		14,055
Total operating expenses		122,513		115,582
Loss from operations		(14,254)		(23,372)
Other (expense) income:
Interest expense		(1,138)		(1,244)
Other		1,670		931
Loss before benefit for income taxes		(13,722)		(23,685)
Income tax benefit		(6,438)		(3,089)
Net loss		$	(7,284)	$	(20,596)


Basic and diluted net loss per share		$	(0.04)	$	(0.12)
Weighted average common shares outstanding:
Basic and diluted		178,729,710		176,953,395

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

Paycor HCM, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Comprehensive Loss

(in thousands)


	Three Months Ended
	September 30,
		2024		2023
Net loss		$	(7,284)	$	(20,596)
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on foreign currency translation		110		(168)
Unrealized gain (loss) on available-for-sale securities, net of tax		4,094		(174)
Other comprehensive income (loss), net of tax		4,204		(342)
Comprehensive loss		$	(3,080)	$	(20,938)

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

Paycor HCM, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share amounts)


	Three Months Ended September 30, 2023
	Preferred Stock			Common Stock					Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
	Shares	Amount		Shares	Amount		Treasury Stock

Balance, June 30, 2023	—	$	—	176,535,236	$	177	$	(245,074)	$	2,011,194	$	(489,495)	$	(3,118)	$	1,273,684
Net loss	—	—		—	—		—		—		(20,596)		—		(20,596)
Stock-based compensation expense	—	—		—	—		—		12,915		—		—		12,915

Net settlement for taxes	—	—		—	—		—		(418)		—		—		(418)
Issuance of common stock under employee stock plans	—	—		568,781	—		—		4,172		—		—		4,172
Other comprehensive loss	—	—		—	—		—		—		—		(342)		(342)

Balance, September 30, 2023	—	$	—	177,104,017	$	177	$	(245,074)	$	2,027,863	$	(510,091)	$	(3,460)	$	1,269,415


	Three Months Ended September 30, 2024
	Preferred Stock			Common Stock					Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive (Loss) Income		Total Stockholders' Equity
	Shares	Amount		Shares	Amount		Treasury Stock

Balance, June 30, 2024	—	$	—	178,210,263	$	178	$	(245,074)	$	2,081,668	$	(548,437)	$	(1,409)	$	1,286,926
Net loss	—	—		—	—		—		—		(7,284)		—		(7,284)
Stock-based compensation expense	—	—		—	—		—		12,665		—		—		12,665

Net settlement for taxes	—	—		—	—		—		(323)		—		—		(323)
Issuance of common stock under employee stock plans	—	—		611,352	1		—		3,444		—		—		3,445
Other comprehensive income	—	—		—	—		—		—		—		4,204		4,204

Balance, September 30, 2024	—	$	—	178,821,615	$	179	$	(245,074)	$	2,097,454	$	(555,721)	$	2,795	$	1,299,633

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

Paycor HCM, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)


	Three Months Ended
	September 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(7,284)	$	(20,596)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1,451		1,511
Amortization of intangible assets and software	34,341		34,183
Amortization of deferred contract costs	18,834		14,366
Stock-based compensation expense	12,665		12,915

Deferred tax benefit	(6,795)		(3,098)
Bad debt expense	730		1,291
Loss on sale of investments	83		61

(Gain) loss on foreign currency exchange	(52)		184
Loss (gain) on lease exit	6		(144)
Naming rights accretion expense	1,006		1,030
Change in fair value of deferred consideration	(112)		—


Other	23		23
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable	(478)		(5,228)
Prepaid expenses and other assets	(6,641)		(6,393)

Accounts payable	(6,848)		(7,877)
Accrued liabilities and other	(21,914)		(21,314)
Deferred revenue	(626)		43

Deferred contract costs	(26,700)		(27,086)
Net cash used in operating activities	(8,311)		(26,129)
Cash flows from investing activities:
Purchases of client funds available-for-sale securities	(83,244)		(22,542)
Proceeds from sale and maturities of client funds available-for-sale securities	78,135		23,652
Purchase of property and equipment	(1,169)		(1,435)

Acquisition of intangible assets	(127)		(12)



Internally developed software costs	(13,441)		(13,254)
Net cash used in investing activities	(19,846)		(13,591)
Cash flows from financing activities:
Net change in cash and cash equivalents held to satisfy client funds obligations	(145,984)		(16,270)



Payment of capital expenditure financing	—		(3,689)





Repayments of debt and finance lease obligations	(297)		(266)




Withholding taxes paid related to net share settlements	(323)		(418)

Proceeds from employee stock purchase plan	3,444		4,172


Net cash used in financing activities	(143,160)		(16,471)
Impact of foreign exchange on cash and cash equivalents	(2)		1
Net change in cash, cash equivalents, restricted cash and short-term investments, and funds held for clients	(171,319)		(56,190)
Cash, cash equivalents, restricted cash and short-term investments, and funds held for clients, beginning of period	910,580		879,046
Cash, cash equivalents, restricted cash and short-term investments, and funds held for clients, end of period	$	739,261	$	822,856
Supplemental disclosure of non-cash investing, financing and other cash flow information:
Capital expenditures in accounts payable	$	12	$	11

Cash paid for interest	$	—	$	145

Capital lease asset obtained in exchange for capital lease liabilities	$	—	$	3,393
Reconciliation of cash, cash equivalents, restricted cash and short-term investments, and funds held for clients to the Consolidated Balance Sheets
Cash and cash equivalents	$	97,618	$	54,277

Funds held for clients	641,643		768,579
Total cash, cash equivalents, restricted cash and short-term investments, and funds held for clients	$	739,261	$	822,856

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

Paycor HCM, Inc. and Subsidiaries

Notes to the Unaudited 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”) is a leading provider of human capital management (“HCM”) software located primarily in the United States (“U.S.”). Paycor’s solutions target mid-market businesses with tens to thousands of employees. Solutions provided include payroll, human resources (“HR”) services, talent acquisition, talent management, workforce management, benefits administration, 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”) by certain investment funds advised by Apax Partners LLP, a leading global private equity advisory firm.

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, 2024 in the Company’s Annual Report on Form 10-K filed with the SEC on August 22, 2024. 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 any future interim periods and the full fiscal year ending June 30, 2025. 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.

Recently issued accounting standards

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU 2023-09 requires entities to further enhance their income tax disclosures, primarily through the standardization and disaggregation of information within an entity’s effective tax rate reconciliation categories and income taxes paid by jurisdiction. The guidance will be effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The guidance is required to be applied on a prospective basis with the option to apply the guidance retrospectively. The Company is currently evaluating whether it will adopt the guidance prospectively or retroactively and the impact the guidance will have on its financial statement disclosures.

Use of estimates

The preparation of the 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 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. 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.

Accounts receivable, net of allowance for credit losses

Accounts receivable balances are shown on the unaudited condensed consolidated balance sheets net of the allowance for credit losses of $6,797 and $6,358 as of September 30, 2024 and June 30, 2024, respectively. The allowance for credit losses considers factors such as historical experience, credit quality, age of the accounts receivable balance and current and forecasted economic conditions that may affect a client’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 credit losses is adjusted periodically based on management’s consideration of past due accounts as well as current and forecasted economic conditions. 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 $8,480 and $7,831 for the three months ended September 30, 2024 and 2023, respectively.

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.

The Company establishes the grant date fair value of restricted stock units (“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. The Company recognized stock-based compensation expense for the three months ended September 30, 2024 and 2023 of $12,665 and $12,915, respectively.

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 September 30,
		2024		2023
Recurring fees		$	149,555	$	129,181
Implementation services and other		4,444		3,527
Recurring and other revenue		$	153,999	$	132,708

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 September 30,
		2024		2023
Balance, beginning of period		$	19,318	$	18,697

Deferral of revenue		4,164		4,888
Revenue recognized		(4,789)		(4,844)
Impact of foreign exchange		8		(29)
Balance, end of period		$	18,701	$	18,712

Deferred revenue is recorded within deferred revenue and other long-term liabilities on the unaudited condensed consolidated balance sheets. The Company will recognize deferred revenue of $10,684 in fiscal year 2025, $7,102 in fiscal year 2026, and $915 in fiscal year 2027.

Deferred contract costs


	As of and for the Three Months Ended September 30, 2024
	Beginning Balance		Capitalization of Costs		Amortization		Ending Balance
Costs to obtain a contract	$	108,583	$	11,052	$	(8,019)	$	111,616
Costs to fulfill a contract	151,620		15,648		(10,815)		156,453
Total	$	260,203	$	26,700	$	(18,834)	$	268,069


	As of and for the Three Months Ended September 30, 2023
	Beginning Balance		Capitalization of Costs		Amortization		Ending Balance
Costs to obtain a contract	$	93,317	$	10,653	$	(6,221)	$	97,749
Costs to fulfill a contract	123,788		16,433		(8,145)		132,076
Total	$	217,105	$	27,086	$	(14,366)	$	229,825