Leases

12 Months Ended

Jun. 30, 2023

Note 8. Leases

The Company leases the majority of its office space in the U.S., U.K., Singapore and Ukraine under non-cancelable operating lease agreements, which have various expiration dates through June 2030, some of which include options to extend the leases for up to 5 years.

As part of the Company’s continuing assessment of its facilities requirements, during the fiscal year ended June 30, 2023, the Company exited a portion of the leased office space in its headquarters in Palo Alto, California and amended the underlying lease agreement to relieve the Company of certain lease payments. As a result, the Company assessed the ROU asset associated with the leased office space and deemed it to be impaired. The Company also assessed the lease liability in view of the amended lease agreement. The Company recorded a net charge of $1.6 million in connection with the impairment of the related operating lease ROU asset and the reassessment of the lease liability, which was included in its consolidated statements of operations for the fiscal year ended June 30, 2023.

In June 2023, the Company amended the lease in Palo Alto to extend the existing leased office space for an additional 12 months through August 2024. The Company accounted for the lease extension as a lease modification and recorded an adjustment of $2.5 million to the ROU asset and lease liability on the consolidated balance sheet as of June 30, 2023.

The components of lease costs were as follows (in thousands):


Operating Leases:	Year Ended June 30, 2023
Operating lease cost (1)	$	6,113
Short-term lease cost		843

(1) Amount excluded a net charge of $1.6 million related to lease modification and impairment for the fiscal year ended June 30, 2023 as described above.

Rent expense for operating leases recognized prior to the adoption of ASC 842 for the fiscal years ended June 30, 2022 and 2021 was $9.0 million and $8.4 million, respectively.

The weighted-average remaining lease term of the Company’s operating leases and the weighted-average discount rate used to measure the present value of the operating lease liabilities are as follows:


Lease Term and Discount Rate:	June 30, 2023
Weighted-average remaining lease term (in years)		6.0
Weighted-average discount rate		7.1	%

The following table presents supplemental cash flow information related to the Company’s operating leases (in thousands):


	Year Ended June 30, 2023
Cash payments included in the measurement of operating lease liabilities	$	7,582
ROU assets obtained in exchange for new operating lease liabilities		3,253

Current operating lease liabilities of $4.7 million were included in other current liabilities on the Company’s consolidated balance sheet as of June 30, 2023.

As of June 30, 2023, remaining maturities of operating lease liabilities are as follows (in thousands):


Fiscal Year Ending June 30,	Amount
2024	$	5,998
2025		3,813
2026		3,420
2027		2,866
2028		3,158
2029 and thereafter		6,466
Total lease payments		25,721
Less: imputed interest		(4,830	)
Present value of operating lease liabilities	$	20,891

Future minimum lease payments under non-cancelable operating leases as of June 30, 2022 under ASC 840 were as follows (in thousands):


Fiscal Year Ending June 30,	Amount
2023	$	7,882
2024		3,625
2025		3,311
2026		3,359
2027		2,721
2028 and thereafter		9,379
Total future minimum lease payments	$	30,277