Sales of Receivables

3 Months Ended

Sep. 30, 2023

Transfers and Servicing of Financial Assets [Abstract]

Sales of Receivables

Sales of Receivables

On December 22, 2022, the Company amended its Master Accounts Receivable Purchase Agreement (MARPA) with MUFG Bank, Ltd. (Purchaser), for the sale of certain designated eligible U.S. government receivables. The amendment extended the term of the MARPA to December 21, 2023. Under the MARPA, the Company can sell eligible receivables, including certain billed and unbilled receivables up to a maximum amount of $200.0 million. The Company’s receivables are sold under the MARPA without recourse for any U.S. government credit risk.

The Company accounts for receivable transfers under the MARPA as sales under ASC 860, Transfers and Servicing, and derecognizes the sold receivables from its balance sheets. The fair value of the sold receivables approximated their book value due to their short-term nature.

The Company does not retain an ongoing financial interest in the transferred receivables other than cash collection and administrative services. The Company estimated that its servicing fee was at fair value and therefore no servicing asset or liability related to these receivables was recognized as of September 30, 2023. Proceeds from the sold receivables are reflected in operating cash flows on the statement of cash flows.

MARPA activity consisted of the following (in thousands):

	As of and for the Three Months Ended September 30,
	2023		2022
Beginning balance:	$	200,000	$	157,785
Sales of receivables	695,260		737,873
Cash collections	(718,427)		(735,969)
Outstanding balance sold to Purchaser: (1)	176,833		159,689
Cash collected, not remitted to Purchaser (2)	(80,542)		(24,550)
Remaining sold receivables	$	96,291	$	135,139

__________________________________________________

(1)For the three months ended September 30, 2023 and 2022, the Company recorded a net cash outflow of $23.2 million and a net cash inflow of $1.9 million in its cash flows from operating activities, respectively, from sold receivables. MARPA cash flows are calculated as the change in the outstanding balance during the fiscal year.

(2)Includes the cash collected on behalf of but not yet remitted to Purchaser as of September 30, 2023 and 2022. This balance is included in other accrued expenses and current liabilities as of the balance sheet date.