Intapp, Inc. Fair Value Disclosure
Note 6. Fair Value Measurements
Financial Assets
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):
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|
June 30, 2025 |
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Level 1 |
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|
Level 2 |
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|
Level 3 |
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|
Total |
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Financial assets: |
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|
|
|
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|
||||
Cash equivalents: |
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|
|
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Money market funds |
|
$ |
243,232 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
243,232 |
|
Total financial assets |
|
$ |
243,232 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
243,232 |
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|
June 30, 2024 |
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|
Level 1 |
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|
Level 2 |
|
|
Level 3 |
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Total |
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Financial assets: |
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|
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Cash equivalents: |
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|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
78,677 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
78,677 |
|
Total financial assets |
|
$ |
78,677 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
78,677 |
|
Strategic Investments
As of June 30, 2025 and 2024, the total amount of strategic investments included in other assets on the Company’s consolidated balance sheets were $2.0 million and not material, respectively. The Company did not recognize any unrealized gain or loss on the strategic investments for the periods presented.
Financial Liabilities
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):
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|
June 30, 2025 |
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Level 1 |
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Level 2 |
|
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Level 3 |
|
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Total |
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Financial Liabilities: |
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|
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Liability for contingent consideration, noncurrent portion |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
86 |
|
|
$ |
86 |
|
Total financial liabilities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
86 |
|
|
$ |
86 |
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|
|
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|
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|
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June 30, 2024 |
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Level 1 |
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|
Level 2 |
|
|
Level 3 |
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Total |
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||||
Financial Liabilities: |
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|
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|
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Liability for contingent consideration, current portion |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,405 |
|
|
$ |
2,405 |
|
Liability for contingent consideration, noncurrent portion |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
153 |
|
|
$ |
153 |
|
Total financial liabilities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,558 |
|
|
$ |
2,558 |
|
In connection with the acquisition of TDI, the Company recorded a contingent consideration liability of $0.2 million on the acquisition date for the estimated fair value of the contingent consideration, which was measured based on the probability of achieving certain performance measures pursuant to the acquisition agreement. Accordingly, the contingent consideration liability was $0.1 million and $0.2 million as of June 30, 2025 and 2024, respectively, which were included in other liabilities on the consolidated balance sheets.
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 fair value of the contingent consideration was re-measured at $2.4 million as of June 30, 2024. During the fiscal year ended June 30, 2025, the Company made a fair value adjustment of $1.0 million based on the probability of achieving certain performance measures and paid $1.4 million related to the contingent consideration. Accordingly, the contingent consideration was nil as of June 30, 2025, as compared to the fair value of $2.4 million as of June 30, 2024, which was included in other current liabilities on the consolidated balance sheets.
In connection with the acquisition of Billstream, the Company recorded a contingent consideration liability of $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 re-measured at $2.4 million and was included in other current liabilities on the balance sheet as of June 30, 2023. During the fiscal year ended June 30, 2024, the Company paid $1.0 million in full consideration for the remaining contingent consideration.
The fair value of contingent consideration was initially estimated on the acquisition date primarily 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 results from management’s revision of key assumptions and estimates. Changes in fair value of contingent consideration liabilities are recorded in general and administrative expenses on the consolidated statements of operations. Gains and losses resulting from exchange rate fluctuation on contingent consideration liabilities denominated in currencies other than U.S. dollars are recognized in interest and other income, net on the consolidated statements of operations.
Changes in contingent consideration liabilities were as follows (in thousands):
|
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Year Ended June 30, |
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2025 |
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|
2024 |
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Balance, beginning of period |
|
$ |
2,558 |
|
|
$ |
6,681 |
|
Contingent consideration accrued at acquisition |
|
|
— |
|
|
|
152 |
|
Payment of contingent consideration |
|
|
(1,401 |
) |
|
|
(985 |
) |
Change of contingent consideration |
|
|
(1,027 |
) |
|
|
(3,290 |
) |
Effect of foreign currency exchange rate changes |
|
|
(44 |
) |
|
|
— |
|
Balance, end of period |
|
$ |
86 |
|
|
$ |
2,558 |
|
Other financial instruments consist of accounts receivable, accounts payable, accrued expenses, accrued liabilities and other current liabilities, which are stated at their carrying value as it approximates fair value due to the short time to expected receipt or payment.
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.