Fair Value Measurements

9 Months Ended

Apr. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 8—Fair Value Measurements

The following table presents the balance of assets and liabilities measured at fair value on a recurring basis:

	Level 1 (1)		Level 2 (2)		Level 3 (3)			Total
	(in thousands)
April 30, 2024
Debt securities	$	23,579	$	5,805	$	—		$	29,384
Equity investments included in current assets		4,844		—		—			4,844
Equity investments included in noncurrent assets		—		500		1,425			1,925
Total	$	28,423	$	6,305	$	1,425		$	36,153
Acquisition consideration included in:
Other current liabilities	$	—	$	—	$	(190	)	$	(190	)
Other noncurrent liabilities		—		—		(2,722	)		(2,722	)
Total	$	—	$	—	$	(2,912	)	$	(2,912	)
July 31, 2023
Debt securities	$	31,038	$	11,376	$	—		$	42,414
Equity investments included in current assets		6,198		—		—			6,198
Equity investments included in noncurrent assets		—		2,500		1,263			3,763
Total	$	37,236	$	13,876	$	1,263		$	52,375
Acquisition consideration included in:
Other current liabilities	$	—	$	—	$	(2,032	)	$	(2,032	)
Other noncurrent liabilities		—		—		(2,773	)		(2,773	)
Total	$	—	$	—	$	(4,805	)	$	(4,805	)

(1)	– quoted prices in active markets for identical assets or liabilities
(2)	– observable inputs other than quoted prices in active markets for identical assets and liabilities
(3)	– no observable pricing inputs in the market

At April 30, 2024 and July 31, 2023, the Company had $2.9 million and $3.0 million, respectively, in investments in hedge funds, which were included in noncurrent “Equity investments” in the accompanying consolidated balance sheets. The Company’s investments in hedge funds were accounted for using the equity method, therefore they were not measured at fair value.

The following table summarizes the change in the balance of the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Three Months Ended April 30,					Nine Months Ended April 30,
	2024			2023		2024		2023
	(in thousands)
Balance, beginning of period	$	1,450		$	1,225	$	1,263	$	1,132
Total (losses) gains included in “Other expense, net”		(25	)		13		162		106
Balance, end of period	$	1,425		$	1,238	$	1,425	$	1,238
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the period	$	—		$	—	$	—	$	—

The following table summarizes the change in the balance of the Company’s liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Three Months Ended April 30,						Nine Months Ended April 30,
	2024			2023			2024			2023
	(in thousands)
Balance, beginning of period	$	4,517		$	6,609		$	4,805		$	8,546
Payments		(1,650	)		(1,800	)		(1,864	)		(2,175	)
Total losses (gains) included in:
“Other operating expense, net”		—			216			(73	)		(1,349	)
Interest expense included in “Interest income, net”		45			97			45			97
“Foreign currency translation adjustment”		—			2			(1	)		5
Balance, end of period	$	2,912		$	5,124		$	2,912		$	5,124
Change in unrealized gains or losses for the period included in earnings for liabilities held at the end of the period	$	—		$	—		$	—		$	—

In the nine months ended April 30, 2024 and 2023, the Company paid an aggregate of $1.9 million and $2.2 million, respectively, for contingent consideration related to prior acquisitions, which, in the nine months ended April 30, 2024, included 2,679 shares of the Company’s Class B common stock with an issue date value of $0.1 million. In addition, in January 2024, the Company determined that the requirement for a contingent consideration payment related to an acquisition in a prior period would not be met, and, in September 2022, the Company determined that the requirements for a portion of the contingent consideration payments related to the Leaf acquisition would not be met. The Company recognized gains of $0.1 million and $1.6 million in the nine months ended April 30, 2024 and 2023, respectively, on the write-off of these contingent consideration payment obligations. Also, in the three and nine months ended April 30, 2023, the Company increased the estimated fair value of acquisition-related contingent consideration by $0.2 million. These write-offs of contingent consideration net of the increase in the contingent consideration were included in “Other operating expense, net” in the accompanying consolidated statements of income.

Fair Value of Other Financial Instruments

The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

Cash and cash equivalents, restricted cash and cash equivalents, settlement assets, other current assets, customer deposits, settlement liabilities, and other current liabilities. At April 30, 2024 and July 31, 2023, the carrying amount of these assets and liabilities approximated fair value because of the short period of time to maturity. The fair value estimates for cash, cash equivalents, and restricted cash and cash equivalents were classified as Level 1 and settlement assets, other current assets, customer deposits, settlement liabilities, and other current liabilities were classified as Level 2 of the fair value hierarchy.

Other assets and other liabilities. At April 30, 2024 and July 31, 2023, the carrying amount of these assets and liabilities approximated fair value. The fair values were estimated based on the Company’s assumptions, which were classified as Level 3 of the fair value hierarchy.