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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
——————
FORM 10-Q
——————
(Mark One)
☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
☐    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: 0-25259
——————
Bottomline Technologies, Inc.

(Exact name of registrant as specified in its charter)
——————
Delaware 02-0433294
(State or other jurisdiction of
incorporation or organization) 		(I.R.S. Employer
Identification No.)
325 Corporate Drive 03801-6808
    Portsmouth, New Hampshire
(Address of principal executive offices) (Zip Code)
 
(603) 436-0700
(Registrant’s telephone number, including area code)

Bottomline Technologies (de), Inc.
(Former name, former address and former fiscal year, if changed since last report)
——————
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, $.001 par value per share EPAY The 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  ☒    No  ☐    
Indicate by check mark whether the registrant has submitted electronically 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  ☒    No  ☐
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 ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No   ☒  
The number of shares outstanding of the registrant’s common stock as of October 30, 2020 was 45,113,592.

Table of Contents
BOTTOMLINE TECHNOLOGIES, INC.
FORM 10-Q
FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 2020
TABLE OF CONTENTS
PART I
Page
Item 1.
3
Item 2.
23
Item 3.
32
Item 4.
32
PART II
Item 1.
33
Item 1A.
33
Item 2.
33
Item 5.
33
Item 6.
33
35

2
Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Bottomline Technologies, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
September 30, June 30,
2020 2020
ASSETS
Current assets:
Cash and cash equivalents $ 187,215  $ 194,832 
Cash held for customers 7,144  6,304 
Marketable securities 10,210  10,209 
Accounts receivable net of allowances for doubtful accounts of $1,363 at September 30, 2020 and $1,336 at June 30, 2020
69,056  69,970 
Prepaid expenses and other current assets 30,930  28,328 
Total current assets 304,555  309,643 
Property and equipment, net 67,953  67,155 
Operating lease right-of-use assets, net 25,197  24,712 
Goodwill 220,899  205,713 
Intangible assets, net 160,813  154,111 
Other assets 34,836  31,803 
Total assets $ 814,253  $ 793,137 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 11,947  $ 13,422 
Accrued expenses and other current liabilities 45,204  48,198 
Customer account liabilities 7,144  6,304 
Deferred revenue 69,781  82,074 
Total current liabilities 134,076  149,998 
Borrowings under credit facility 180,000  180,000 
Deferred revenue, non-current 15,479  13,959 
Operating lease liabilities, non-current 21,312  20,670 
Deferred income taxes 9,862  8,656 
Other liabilities 31,108  27,520 
Total liabilities 391,837  400,803 
Stockholders' equity
Preferred Stock, $.001 par value:
Authorized shares-4,000; issued and outstanding shares-none
—  — 
Common Stock, $.001 par value:
Authorized shares-100,000; issued shares- 48,560 at September 30, 2020 and 48,147 at June 30, 2020; outstanding shares- 42,660 at September 30, 2020 and 42,172 at June 30, 2020
49  48 
Additional paid-in-capital 783,457  764,906 
Accumulated other comprehensive loss (39,381) (48,675)
Treasury stock: 5,900 shares at September 30, 2020 and 5,975 shares at June 30, 2020, at cost
(141,544) (143,333)
Accumulated deficit (180,165) (180,612)
Total stockholders' equity 422,416  392,334 
Total liabilities and stockholders' equity $ 814,253  $ 793,137 
See accompanying notes.
3
Table of Contents
Bottomline Technologies, Inc.
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands, except per share amounts)
Three Months Ended September 30,
2020 2019
Revenues:
Subscriptions $ 90,384  $ 80,066 
Software licenses 977  2,576 
Service and maintenance 20,564  24,825 
Other 440  709 
Total revenues 112,365  108,176 
Cost of revenues:
Subscriptions 35,218  32,765 
Software licenses 90  161 
Service and maintenance 10,916  13,053 
Other 309  516 
Total cost of revenues 46,533  46,495 
Gross profit 65,832  61,681 
Operating expenses:
Sales and marketing 25,743  25,688 
Product development and engineering 18,499  18,349 
General and administrative 13,626  13,345 
Amortization of acquisition-related intangible assets 5,029  4,950 
Total operating expenses 62,897  62,332 
Income (loss) from operations 2,935  (651)
Other expense, net (780) (713)
Income (loss) before income taxes 2,155  (1,364)
Provision for income taxes (1,764) (3)
Net income (loss) $ 391  $ (1,367)
Basic and diluted net income (loss) per share $ 0.01  $ (0.03)
Shares used in computing net income (loss) per share:
Basic 42,457  41,487 
Diluted 42,771  41,487 
Other comprehensive income (loss), net of tax:
Unrealized loss on available for sale securities (25) (3)
Change in fair value on interest rate hedging instruments 446  (677)
Minimum pension liability adjustments (233) 180 
Foreign currency translation adjustments 9,106  (5,879)
Other comprehensive income (loss), net of tax: 9,294  (6,379)
Comprehensive income (loss) $ 9,685  $ (7,746)

See accompanying notes.
4
Table of Contents
Bottomline Technologies, Inc.
Unaudited Condensed Consolidated Statements of Stockholders' Equity
(in thousands)
Three Months Ended September 30, 2020
Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Treasury Stock Accumulated Deficit Total Stockholders' Equity
Shares Amount Shares Amount
Balance at June 30, 2020 48,147 $48 $764,906 $(48,675) 5,975 $(143,333) $(180,612) $392,334
Issuance of common stock for employee stock purchase plan and upon exercise of stock options — — 379 — (75) 1,789 — 2,168
Vesting of restricted stock awards 247 1 — — — — — 1
Issuance of common stock in connection with acquisition 166 — 8,183 — — — — 8,183
Stock compensation plan expense — — 9,989 — — — — 9,989
Minimum pension liability adjustments, net of tax — — — (233) — — — (233)
Net income — — — — — — 391 391
Cumulative effect of adoption of current expected credit loss accounting standard — — — — — — 56 56
Unrealized loss on available for sale securities, net of tax — — — (25) — — — (25)
Change in fair value on interest rate hedging instruments — — — 446 — — — 446
Foreign currency translation adjustment — — — 9,106 — — — 9,106
Balance at September 30, 2020 48,560 $49 $783,457 $(39,381) 5,900 $(141,544) $(180,165) $422,416


Three Months Ended September 30, 2019
Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Treasury Stock Accumulated Deficit Total Stockholders' Equity
Shares Amount Shares Amount
Balance at June 30, 2019 46,995 $47 $721,438 $(43,593) 5,680 $(127,095) $(171,420) $379,377
Issuance of common stock for employee stock purchase plan and upon exercise of stock options 13 — 775 — (60) 1,399 — 2,174
Vesting of restricted stock awards 377 — — — — — — —
Repurchase of common stock to be held in treasury — — — — 233 (10,005) — (10,005)
Stock compensation plan expense — — 11,099 — — — — 11,099
Minimum pension liability adjustments, net of tax — — — 180 — — — 180
Net loss — — — — — — (1,367) (1,367)
Cumulative effect of adoption of updated lease standard — — — — — — 37 37
Unrealized loss on available for sale securities, net of tax — — — (3) — — — (3)
Change in fair value on interest rate hedging instruments — — — (677) — — — (677)
Foreign currency translation adjustment — — — (5,879) — — — (5,879)
Balance at September 30, 2019 47,385 $47 $733,312 $(49,972) 5,853 $(135,701) $(172,750) $374,936


5
Table of Contents
Bottomline Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended September 30,
2020 2019
Operating activities:
Net income (loss) $ 391  $ (1,367)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of acquisition-related intangible assets 5,029  4,950 
Stock-based compensation plan expense 9,973  11,044 
Depreciation and other amortization 7,699  6,092 
Deferred income tax expense (benefit) 227  (368)
Provision for allowances on accounts receivable 89  67 
Amortization of debt issuance costs 103  103 
Amortization of premium (discount) on investments 5  (28)
(Gain) loss on other investments (48) — 
Loss on disposal of equipment 15  35 
(Gain) loss on foreign exchange (53) 259 
Changes in operating assets and liabilities:
Accounts receivable 2,349  11,025 
Prepaid expenses and other current assets (1,971) (3,268)
Operating lease right-of-use asset, net 303  975 
Other assets (1,164) (1,077)
Accounts payable (824) 1,214 
Accrued expenses (1,565) (571)
Operating lease liabilities 146  (823)
Customer account liabilities 563  1,609 
Deferred revenue (13,484) (11,969)
Other liabilities 127  210 
Net cash provided by operating activities 7,910  18,112 
Investing activities:
Acquisition of businesses and assets, net of cash acquired (9,892) — 
Purchases of other investments —  (87)
Issuance of note receivable (1,600) — 
Purchases of available-for-sale securities (2,929) (6,274)
Proceeds from sales of available-for-sale securities 2,900  3,700 
Capital expenditures, including capitalization of software costs (8,628) (11,449)
Net cash used in investing activities (20,149) (14,110)
Financing activities:
Repurchase of common stock —  (10,005)
Repayment of notes payable —  (182)
Proceeds from exercise of stock options and employee stock purchase plan 2,168  2,174 
Net cash provided by (used in) financing activities 2,168  (8,013)
Effect of exchange rate changes on cash 3,294  (1,970)
Decrease in cash, cash equivalents and restricted cash (6,777) (5,981)
Cash, cash equivalents and restricted cash at beginning of period 201,136  97,801 
Cash, cash equivalents and restricted cash at end of period $ 194,359  $ 91,820 
Cash and cash equivalents at end of period $ 187,215  $ 84,751 
Cash held for customers at end of period 7,144  7,069 
Cash, cash equivalents and restricted cash at end of period $ 194,359  $ 91,820 
Supplemental disclosures of non-cash investing activities:
Issuance of common stock in connection with acquisition $ 8,183  $ — 

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Table of Contents
See accompanying notes.
7
Table of Contents
Bottomline Technologies, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2020
Note 1—Basis of Presentation
    The accompanying unaudited condensed consolidated financial statements of Bottomline Technologies, Inc. (referred to below as we, us, our or Bottomline) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments) considered necessary for a fair presentation of the interim financial information have been included. Operating results for the three months ended September 30, 2020 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending June 30, 2021, particularly in light of the novel coronavirus (COVID-19) pandemic and the effect it is having on the domestic and global economies. For further information, refer to the consolidated financial statements and footnotes included in the Annual Report on Form 10-K as filed with the Securities and Exchange Commission on August 28, 2020.

Note 2—Recent Accounting Pronouncements
Recently Adopted Pronouncements
    Financial Instruments - Credit Losses: In June 2016, the FASB issued an accounting standard update that replaces the incurred loss impairment model with an expected loss model for financial assets held at amortized cost, eliminates the concept of other-than-temporary impairment and requires credit losses associated with available-for-sale debt securities to be recorded through an allowance rather than a reduction in the amortized cost basis of the security. The changes are expected to result in earlier recognition of credit losses associated with financial assets, including trade accounts receivable. We adopted this standard on July 1, 2020, on a modified retrospective basis, with the cumulative-effect accounting consequence recorded as an adjustment to the opening balance of accumulated deficit as of the effective date. The adoption of this standard did not have a material impact on our financial statements.
Goodwill Impairment: In January 2017, the FASB issued an accounting standard update to simplify the test for goodwill impairment which removes the requirement to compare the carrying value of goodwill against its implied fair value. Under the revised standard, an entity will perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss should not exceed the total amount of goodwill allocated to the reporting unit. We adopted this standard on July 1, 2020 and do not expect the adoption of this standard to have a material impact on our financial statements.
Income Taxes: In December 2019, the FASB issued an accounting standard update related to simplifying the accounting for income taxes by eliminating certain exceptions related to intraperiod tax allocations, basis differences for changes in ownership interest in equity method investments and the calculation of interim period income tax. The standard also simplifies other aspects of accounting for taxes. We adopted this standard on July 1, 2020 and the adoption did not have a material impact on our financial statements.

Note 3—Revenue Recognition
    Remaining Performance Obligations
    The transaction price we allocate to remaining performance obligations that are unsatisfied, or partially unsatisfied, as of September 30, 2020 represents contracted revenue that will be recognized in future periods. Our future performance obligations consist primarily of SaaS / stand-ready performance obligations relating to future periods, contracted but uncompleted professional services obligations and support and maintenance obligations. During the three months ended September 30, 2020 and 2019, the amount of revenue recognized from performance obligations satisfied in prior periods was not significant.
    Revenue allocated to remaining performance obligations was $416.4 million as of September 30, 2020 of which we expect to recognize approximately $147.6 million over the next twelve months and the remainder thereafter. We exclude from our measure of remaining performance obligations amounts related to future transactional or usage-based fees for which the value of services transferred to the customer will correspond to the amount we will invoice for those services.
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    Contract Assets and Liabilities
    The table below presents our accounts receivable, contract assets and deferred revenue balances as of September 30, 2020 and June 30, 2020.
September 30, June 30,
2020 2020 $ Change
(in thousands)
Contract assets 4,704  3,646  1,058 
Deferred revenue 85,260  96,033  (10,773)
    Contract assets arise when we recognize revenue in excess of amounts billed to the customer and the right to payment is contingent on conditions other than simply the passage of time, such as the future completion of a related performance obligation. Contract assets are classified in our consolidated balance sheets as other current assets for those contract assets with recognition periods of one year or less and other assets for contract assets with recognition periods greater than one year. We assess outstanding accounts receivable and contract assets for credit loss on an ongoing basis. In estimating credit loss, we pool accounts with similar risk characteristics. Accounts that do not share the same risk characteristics are assessed for credit loss on an individual basis. The allowance for credit loss is based on historical loss data, customer specific information, current market conditions and expected future economic conditions. Historically, our bad debt expense has not been significant but could be adversely affected in future periods due to the impact of the COVID-19 pandemic.
Deferred revenue consists of billings or customer payments in excess of amounts recognized as revenue.
The decrease in deferred revenue at September 30, 2020 as compared to June 30, 2020 reflects our recognition of revenue from maintenance contracts, a significant portion of which are billed on a calendar year basis, as well as the impact of foreign exchange changes.
    For the three months ended September 30, 2020 and 2019, we recognized $40.3 million and $34.0 million in revenue from amounts that were included in deferred revenue as of June 30, 2020 and 2019, respectively.
    
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Note 4—Fair Value
Fair Values of Assets and Liabilities
    We measure fair value at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the assumptions that market participants would use in pricing an asset or liability (the inputs) are based on a tiered fair value hierarchy consisting of three levels, as follows:
Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets.
Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar instruments in active markets or for similar markets that are not active.
Level 3: Unobservable inputs for which there is little or no market data which require us to develop our own assumptions about how market participants would price the asset or liability.
    Valuation techniques for assets and liabilities include methodologies such as the market approach, the income approach or the cost approach, and may use unobservable inputs such as projections, estimates and management’s interpretation of current market data. These unobservable inputs are only utilized to the extent that observable inputs are not available or cost-effective to obtain.
    At September 30, 2020 and June 30, 2020, our assets and liabilities measured at fair value on a recurring basis were as follows:
September 30, 2020 June 30, 2020
Fair Value Measurements Using Input Types Fair Value Measurements Using Input Types
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(in thousands)
Assets
Money market funds (cash and cash equivalents) $ 342  $ —  $ —  $ 342  $ 354  $ —  $ —  $ 354 
Available for sale securities - Debt
U.S. Corporate $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Government - U.S. treasury securities —  10,147  —  10,147  —  10,148  —  10,148 
Total available for sale securities $ —  $ 10,147  $ —  $ 10,147  $ —  $ 10,148  $ —  $ 10,148 
Preferential conversion feature (long-term) $ —  $ —  $ 532  $ 532  $ —  $ —  $ —  $ — 
Other investments (long-term) —  —  550  550  —  —  514  514 
Total assets $ 342  $ 10,147  $ 1,082  $ 11,571  $ 354  $ 10,148  $ 514  $ 11,016 
Liabilities
Interest rate swap (short-term) $ —  $ 1,638  $ —  $ 1,638  $ —  $ 1,631  $ —  $ 1,631 
Interest rate swap (long-term) $ —  $ 2,995  $ —  $ 2,995  $ —  $ 3,448  $ —  $ 3,448 
Total liabilities $ —  $ 4,633  $ —  $ 4,633  $ —  $ 5,079  $ —  $ 5,079 
Fair Value of Financial Instruments
    We have certain financial instruments which consist of cash and cash equivalents, cash held for customers, marketable securities, accounts receivable, notes receivable, contract assets, accounts payable, customer account liabilities, certain derivative instruments, assets related to deposits made to fund future requirements associated with Israeli severance arrangements and debt drawn on our Credit Facility. Fair value information for each of these instruments is as follows:
•    Cash and cash equivalents, cash held for customers, accounts receivable, notes receivable, contract assets, accounts payable and customer account liabilities fair values approximate their carrying values, due to the expected duration of these instruments.
•    Marketable securities classified as held to maturity, all of which mature within one year, are recorded at amortized cost, which at September 30, 2020 and June 30, 2020, approximated fair value.
•    Marketable debt securities classified as available for sale are recorded at fair value. Unrealized gains and losses are included as a component of other accumulated comprehensive income (loss) in stockholders’ equity, net of tax. We use the specific identification method to determine any realized gains or losses from the sale of our marketable debt
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securities classified as available for sale. We assess securities with an amortized cost basis in excess of estimated fair value for credit loss. As of September 30, 2020 and June 30, 2020, the unrealized losses associated with available for sale securities was not material. No credit loss has been recorded as we do not intend to sell the investments prior to recovering their amortized costs basis.
•    We have certain derivative instruments accounted for at fair value. We hold a convertible note with a preferential conversion feature which qualifies as a derivative instrument. The fair value assumptions consider the nature of the conversion feature and the expected timeline to a qualifying conversion event. We are also a party to interest rate swap instruments. The fair value of our interest rate swaps are based on the present value of projected cash flows that will occur over the life of the instruments, after considering certain contractual terms and counterparty credit risk.
•     The carrying value of assets related to deposits we have made to fund future requirements associated with Israeli severance arrangements was $1.1 million and $1.0 million at September 30, 2020 and June 30, 2020, respectively, which approximated their fair value.
•     We hold certain other investments accounted for at fair value. The fair value of these investments was $0.6 million and $0.5 million at September 30, 2020 and June 30, 2020, respectively. We also have certain other investments for which there is no readily determinable fair value. The carrying value of these investments was $0.5 million at September 30, 2020 and June 30, 2020, respectively. Investments for which we cannot readily determine fair value are recorded at cost, less impairment (if any), plus or minus adjustments for observable price changes.
•     We have borrowings of $180 million against our Credit Facility. The fair value of these borrowings, which are classified as Level 2, approximates their carrying value at September 30, 2020, as the instrument carries a variable rate of interest which reflects current market rates.
Marketable Securities
    The table below presents information regarding our marketable securities by major security type as of September 30, 2020 and June 30, 2020.
September 30, 2020 June 30, 2020
Held to Maturity Available for Sale Total Held to Maturity Available for Sale Total
(in thousands)
Marketable securities:
Government and other debt securities $ 63  $ 10,147  $ 10,210  $ 61  $ 10,148  $ 10,209 
Total marketable securities $ 63  $ 10,147  $ 10,210  $ 61  $ 10,148  $ 10,209 
    The following table summarizes the estimated fair value of our investments in available for sale marketable securities classified by the contractual maturity date of the securities:
September 30, 2020
(in thousands)
Due within 1 year $ 10,147 
Due in 1 year through 5 years — 
Total $ 10,147 
    All of our available for sale marketable securities are classified as current assets.
    The following table presents the aggregate fair values and gross unrealized losses for those available for sale investments that were in an unrealized loss position as of September 30, 2020 and June 30, 2020, respectively, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:
At September 30, 2020 At June 30, 2020
Less than 12 Months
Fair Value Unrealized Loss Fair Value Unrealized Loss
(in thousands)
Government - U.S. treasury securities $ 1,917  $ (1) $ 2,012  $ (1)
Total $ 1,917  $ (1) $ 2,012  $ (1)
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Note 5—Business and Asset Acquisitions
AnaSys AG
In July 2020 we acquired Switzerland-based AnaSys AG (AnaSys) for a total purchase price of $13.9 million. The purchase price consisted of a cash payment of 5.2 million Swiss Francs (approximately $5.7 million based on the foreign exchange rate in effect at the acquisition date) and 166,393 shares of our common stock valued at $8.2 million on the closing date of the transaction. Additionally, we issued 28,000 shares of our common stock to certain selling stockholders of AnaSys with vesting conditions tied to continued employment with us. These shares are compensatory and we will record share-based payment expense over their vesting period of five years.
We are still obtaining fair value estimates for the intangible assets acquired. In the preliminary allocation of the purchase price at September 30, 2020, we recorded $10.6 million of goodwill. The goodwill is not deductible for income tax purposes and arose principally due to the anticipated future benefits arising from the acquisition. Identifiable intangible assets of $6.3 million, consisting of customer and technology related assets, are being amortized over a weighted average estimated useful life of 13 years.
Our acquisition of AnaSys, a provider of financial messaging solutions, will extend our geographic presence in Switzerland and Germany and expand our customer base. The operating results of AnaSys are a component of our Cloud Solutions segment from the date of the acquisition forward.
FMR Systems, Inc.
In July 2020, we acquired customer assets and intellectual property from FMR Systems, Inc (FMR), a small corporate and commercial onboarding software provider, for a cash payment of $2.0 million and contingent future cash payments of up to $0.3 million. We will leverage FMR's technology to build a next generation commercial onboarding product.
We are still obtaining fair value estimates for the intangible assets acquired. In the preliminary allocation of the purchase price at September 30, 2020, we recorded $0.4 million of goodwill. The goodwill is deductible for income tax purposes and arose principally due to the anticipated future benefits arising from the acquisition. Identifiable intangible assets of $2.3 million, consisting primarily of technology related assets, are being amortized over a weighted average estimated useful life of 5 years.
Note 6—Net Income (Loss) Per Share
    The following table sets forth the computation of basic and diluted net (loss) income per share:
Three Months Ended September 30,
2020 2019
(in thousands, except per share amounts)
Numerator - basic and diluted:
Net income (loss) $ 391  $ (1,367)
Denominator:
Shares used in computing basic net income (loss) per share attributable to common stockholders 42,457  41,487 
Impact of dilutive securities 314  — 
Shares used in computing diluted net income (loss) per share attributable to common stockholders 42,771  41,487 
Basic and diluted net income (loss) per share attributable to common stockholders $ 0.01  $ (0.03)
    For the three months ended September 30, 2019, approximately 2.3 million shares of unvested restricted stock and shares underlying stock options were excluded from the calculation of diluted earnings per share as their effect on the calculation would have been anti-dilutive.

Note 7—Operations by Segments and Geographic Areas
Segment Information
    Operating segments are the components of our business for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our chief executive officer. Our operating segments are generally organized by the type of product or service offered and by geography.
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    Similar operating segments have been aggregated into four reportable segments as follows:
    Cloud Solutions. Our Cloud Solutions segment provides customers with SaaS technology offerings that facilitate electronic payments, electronic invoicing, and spend management. Our payment platforms (Paymode-X, PTX and financial messaging) are included in this segment. These solutions are highly scalable, secure and cost effective and facilitate cash payment and transaction settlement between businesses, their vendors and banks. Our legal spend management solutions, which enable customers to create more efficient processes for managing invoices generated by outside law firms while offering insight into important legal spend factors such as expense monitoring and outside counsel performance, are also included within this segment. Revenue within this segment is generally recognized on a subscription or transaction basis.
Banking Solutions. Our Banking Solutions segment provides solutions that are specifically designed for banking and financial institution customers. Our Banking Solutions products are sold predominantly on a hosted basis, with revenue recognized on a subscription or transaction basis.
Payments and Documents. Our Payments and Documents segment supplies financial business process management software solutions, including making and collecting payments, sending and receiving invoices, and generating and storing business documents. This segment also provides a range of standard professional services and equipment and supplies that complement and enhance our core software products. When licensed for on-premise deployment, software license revenue is typically recorded upon delivery of the software and commencement of the license term. If the solution is hosted by us, we typically record revenue over time. Professional services revenue is normally recorded as we perform the work and software support and maintenance revenue is recorded ratably over the support period.
    Other. Our Other segment consists of our fraud solutions and our healthcare solutions. The Other segment loss reported below is attributable to the operating results of our fraud solutions, which reflects the revenue contribution from the legacy sales channel we acquired and the burden of certain other centralized costs; however our fraud solutions are sold as part of all of our operating segments. Our healthcare solutions focus on eliminating paper intensive processes and providing electronic signature and mobile document capabilities to allow healthcare organizations to improve efficiency and reduce costs. Software revenue for perpetual licenses of our fraud and healthcare products is typically recorded upon delivery of the software and commencement of the license term. Professional services revenue is recorded as we perform the work and software support and maintenance revenue is recorded ratably over the support period which is normally twelve months.
    Periodically a sales person in one operating segment will sell products and services that are typically sold within a different operating segment. In such cases, the transaction is generally recorded by the operating segment to which the sales person is assigned. Accordingly, segment results can include the results of transactions that have been allocated to a specific segment based on the contributing sales resources, rather than the nature of the product or service. Conversely, a transaction can be recorded by the operating segment primarily responsible for delivery to the customer, even if the sales person is assigned to a different operating segment.
    Our chief operating decision maker assesses segment performance based on a variety of factors that normally include segment revenue and a segment measure of profit or loss. Each segment’s measure of profit or loss is on a pre-tax basis and excludes certain items as presented in our reconciliation of the measure of total segment profit to GAAP income (loss) before income taxes that follows. There are no inter-segment sales; accordingly, the measure of segment revenue and profit or loss reflects only revenues from external customers. The costs of certain corporate level expenses, primarily general and administrative expenses, are allocated to our operating segments based on a percentage of the segment’s revenues.
    We do not track or assign our assets by operating segment.
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    Segment information for the three months ended September 30, 2020 and 2019 according to the segment descriptions above, is as follows:
Three Months Ended September 30,
2020 2019
(in thousands)
Segment revenue:
Cloud Solutions
$ 64,956  $ 61,022 
Banking Solutions 26,190  24,169 
Payments and Documents 17,396  18,578 
Other 3,823  4,407 
Total segment revenue $ 112,365  $ 108,176 
Segment measure of profit:
Cloud Solutions $ 14,597  $ 13,799 
Banking Solutions 2,956  535 
Payments and Documents 4,100  5,009 
Other (3,107) (1,866)
Total measure of segment profit $ 18,546  $ 17,477 
    A reconciliation of the total measure of segment profit to GAAP income (loss) before income taxes is as follows:
Three Months Ended September 30,
2020 2019
(in thousands)
Total measure of segment profit $ 18,546  $ 17,477 
Less:
Amortization of acquisition-related intangible assets (5,029) (4,950)
Stock-based compensation plan expense (9,973) (11,044)
Acquisition and integration-related expenses (245) (1,697)
Restructuring (expense) benefit (70) 25 
Other non-core (expense) benefit (48) 14 
Global ERP system implementation and other costs —  (224)
Other expense, net of pension adjustments (1,026) (965)
Income (loss) before income taxes $ 2,155  $ (1,364)
    The following depreciation and other amortization expense amounts are included in the measure of segment profit:
Three Months Ended September 30,
2020 2019
(in thousands)
Depreciation and other amortization expense:
Cloud Solutions $ 4,401  $ 3,594 
Banking Solutions 2,752  2,095 
Payments and Documents 270  220 
Other 276  183 
Total depreciation and other amortization expense $ 7,699  $ 6,092 
Disaggregation of Revenue
    The tables below present our subscriptions revenue and total revenue disaggregated by major product classification for the three months ended September 30, 2020 and 2019.
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(in thousands) Three Months Ended September 30,
2020 2019
Subscriptions Revenue Total Revenue Subscriptions Revenue Total Revenue
Payment Platforms (1)
$ 40,248  $ 44,406  $ 35,206  $ 40,448 
Banking Solutions 22,985  26,190  18,373  24,169 
Legal Spend Management (2)
20,550  20,550  20,574  20,574 
All other (3)
6,601  21,219  5,913  22,985 
Total revenues $ 90,384  $ 112,365  $ 80,066  $ 108,176 
    We derive the majority of our revenue from subscription arrangements. The substantial majority of our non-subscription revenue is derived from software support and maintenance fees and from professional services, with such revenue being recorded by all of our operating segments but with the largest concentration of this revenue being derived from our legacy business payments and documents products in our Payments and Documents segment.
    (1) Consists of our Paymode-X, PTX and financial messaging settlement network, all of which are components of our Cloud Solutions segment.
(2) Component of our Cloud Solutions segment.
    (3) Consists of our legacy business payments and documents products (which are components of our Payments and Documents segment) and revenue from our Other segment.
Geographic Information
    We have presented geographic information about our revenues below. This presentation allocates revenue based on the point of sale, not the location of the customer. Accordingly, we derive revenues from geographic locations based on the location of the customer that would vary from the geographic areas listed here.
Three Months Ended September 30,
2020 2019
(in thousands)
Revenues from unaffiliated customers:
United States $ 68,981  $ 69,020 
United Kingdom 27,694  24,967 
Switzerland 10,867  9,760 
Other 4,823  4,429 
Total revenues from unaffiliated customers $ 112,365  $ 108,176 
    Long-lived assets based on geographical location, excluding deferred tax assets and intangible assets, were as follows:
At September 30, At June 30,
2020 2020
(in thousands)
Long-lived assets:
United States $ 67,580  $ 64,858 
United Kingdom 42,663  41,835 
Other 17,738  16,977 
Total long-lived assets $ 127,981  $ 123,670 

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Note 8—Income Taxes
    The income tax expense we record in any interim period is based on our estimated effective tax rate for the fiscal year for those tax jurisdictions in which we can reliably estimate that rate. The calculation of our estimated effective tax rate requires an estimate of pre-tax income by tax jurisdiction as well as total tax expense for the fiscal year. Accordingly, our annual estimated effective tax rate is subject to adjustment if there are changes to our initial estimates of total tax expense or pre-tax income, including the mix of income by jurisdiction. For those tax jurisdictions for which we are unable to reliably estimate an overall effective tax rate, we calculate income tax expense based upon the actual effective tax rate for the year-to-date period.
Provision for Income Taxes
    We recorded income tax expense of $1.8 million and $3,000 for the three months ended September 30, 2020 and 2019, respectively. In the three months ended September 30, 2020, income tax expense was primarily attributable to our U.S., UK and Switzerland operations. In addition, we recorded discrete tax expense of $0.7 million as a result of tax legislation enacted in the UK that increased the statutory UK tax rate from 17 percent to 19 percent which required us to re-value our net UK deferred tax liability balance to reflect this higher rate. In the three months ended September 30, 2019, the income tax expense recorded was principally associated with the U.S. deferred tax consequences arising from our acquisition of BankSight Software Systems, Inc., offset by an income tax benefit attributable to our loss before income tax for the three months ended September 30, 2019.
    We currently anticipate that our unrecognized tax benefits will decrease within the next twelve months by approximately $0.3 million as a result of the expiration of certain statutes of limitations associated with intercompany transactions subject to tax in multiple jurisdictions.
    We record a deferred tax asset if we believe that it is more likely than not that we will realize a future tax benefit. Ultimate realization of any deferred tax asset is dependent on our ability to generate sufficient future taxable income in the appropriate tax jurisdiction before the expiration of carryforward periods, if any. Our assessment of deferred tax asset recoverability considers many different factors including historical and projected operating results, the reversal of existing deferred tax liabilities that provide a source of future taxable income, the impact of current tax planning strategies and the availability of future tax planning strategies. We establish a valuation allowance against any deferred tax asset for which we are unable to conclude that recoverability is more likely than not.
    At September 30, 2020, we had a total valuation allowance of $36.2 million against our deferred tax assets given the uncertainty of recoverability of these amounts.
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Note 9—Goodwill and Other Intangible Assets
    Acquired intangible assets are initially recorded at fair value and tested periodically for impairment. Goodwill represents the excess of the purchase price over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed in a business combination and is tested at least annually for impairment. We perform an impairment test of goodwill during the fourth quarter of each fiscal year or sooner, if indicators of potential impairment arise.
    At September 30, 2020, the carrying value of goodwill for all of our reporting units was $220.9 million.
    The following tables set forth the information for intangible assets subject to amortization and for intangible assets not subject to amortization.
As of September 30, 2020
Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted Average Remaining Life
(in thousands) (in years)
Amortized intangible assets:
Customer related $ 229,526  $ (163,029) $ 66,497  7.7
Core technology 139,809  (100,178) 39,631  6.9
Other intangible assets 22,363  (20,296) 2,067  4.6
Capitalized software development costs 27,041  (15,181) 11,860  1.8
Software (1)
88,912  (48,154) 40,758  3.4
Total $ 507,651  $ (346,838) $ 160,813 
Unamortized intangible assets:
Goodwill 220,899 
Total intangible assets $ 381,712 
As of June 30, 2020
Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted Average Remaining Life
(in thousands) (in years)
Amortized intangible assets:
Customer related $ 219,305  $ (157,008) $ 62,297  7.5
Core technology 135,720  (97,431) 38,289  7.2
Other intangible assets 22,099  (19,927) 2,172  4.8
Capitalized software development costs 26,222  (14,047) 12,175  2.9
Software (1)
84,493  (45,315) 39,178  3.8
Total $ 487,839  $ (333,728) $ 154,111 
Unamortized intangible assets:
Goodwill 205,713 
Total intangible assets $ 359,824 
——————
(1)Software includes purchased software and software developed for internal use.
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    Estimated amortization expense for the remainder of fiscal year 2021 and subsequent fiscal years for acquired intangible assets, capitalized software development costs and software, in each case that have been placed in service as of September 30, 2020, is as follows:
Acquired Intangible Assets Capitalized Software Development Costs Software
(in thousands)
Remaining 2021 $ 15,216  $ 3,431  $ 9,237 
2022 18,718  4,575  9,388 
2023 17,314  1,731  7,370 
2024 15,511  1,001  5,733 
2025 13,072  420  2,863 
2026 and thereafter 28,364  7  1,330 
    Each period, for capitalized software development costs, we evaluate whether amortization expense using a ratio of revenue in the period to total expected revenue over the product’s expected useful life would result in greater amortization than as calculated under a straight-line methodology and, if that were to occur, amortization in that period would be accelerated accordingly.
    The following table represents a rollforward of our goodwill balances, by reportable segment:
Cloud Solutions Banking Solutions Payments and Documents Other Total
(in thousands)
Balance at June 30, 2020 (1)
$ 117,493  $ 39,516  $ 40,510  $ 8,194  $ 205,713 
Goodwill acquired during the period 10,636  398  —  —  11,034 
Impact of foreign currency translation 2,040  —  2,112  —  4,152 
Balance at September 30, 2020 (1)
$ 130,169  $ 39,914  $ 42,622  $ 8,194  $ 220,899 
——————
(1)Other goodwill balance is net of $7.5 million accumulated impairment losses, previously recorded.

Note 10—Commitments and Contingencies
Leases
    We determine if any arrangement is, or contains, a lease at its inception based on whether or not we have the right to control the asset during the contract period. We are a lessee in any lease contract when we obtain the right to control the asset.
    We determine the lease term by assuming the exercise of options that are reasonably certain. Leases with a lease term of 12 months or less at inception are not reflected in our balance sheet and those lease costs are expensed on a straight-line basis over the respective term. Leases with a term greater than 12 months are reflected as non-current right-of-use (ROU) assets and current and non-current lease liabilities in our consolidated balance sheets. Current lease liabilities are classified as a component of accrued expenses and other current liabilities.
    As the implicit interest rate in our leases is generally not known, we use our incremental borrowing rate as the discount rate for purposes of determining the present value of our lease liabilities. Our determination of the incremental borrowing rate takes into consideration the expected term of the lease, the effect of the currency in which the lease is denominated and the rate of interest we would expect to incur on a collateralized debt instrument. At September 30, 2020, our weighted average discount rate utilized for our leases was 5.3%.
    When our contracts contain lease and non-lease elements, we account for both as a single lease component.
    We lease office space in cities worldwide under facility leases that expire at various dates. We are typically required to pay certain incremental operating costs above the base rent for our facility leases. Our leases may include periodic payment adjustments based on changes in applicable price indexes. To the extent the adjustment is considered a fixed payment it is included in the measurement of the ROU asset and lease liability, otherwise it is recognized in the period incurred. We also have a variety of data center locations and, to a lesser extent, vehicle and equipment leases. Our facility leases represent the substantial majority of our operating leases and often include renewal options that we can exercise unilaterally. At September 30, 2020, renewal options ranged from 3 months to 10 years.
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    At September 30, 2020, our operating leases had a weighted average remaining lease term of 6.0 years and we had no material capital leases.
    Additional information of our lease activity, as of and for the three months ended September 30, 2020 is as follows:
Operating leases: Three Months Ended September 30, 2020
(in thousands)
Operating lease cost $ 1,939 
Short-term lease cost 88 
Variable lease cost 539 
Sublease income (89)
Total lease cost $ 2,477 
September 30, 2020
(in thousands)
Right-of-use assets, net $ 25,197 
Operating lease liabilities, current (1)
$ 7,060 
Operating lease liabilities, non-current 21,312 
Total operating lease liabilities $ 28,372 
——————
(1)    Included as a component of accrued expenses and other current liabilities.
Three Months Ended September 30, 2020
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities $ 1,921 
Right-of-use assets obtained in exchange for lease obligations $ 1,906 
Remaining maturities of lease liabilities at September 30, 2020 were as follows:
For the year ending June 30, Operating Leases
(in thousands)
2021 $ 6,383 
2022 7,105 
2023 5,163 
2024 3,283 
2025 2,903 
Thereafter 8,845 
Total lease payments 33,682 
Less imputed interest (5,310)
Total lease liabilities $ 28,372 

    
Legal Matters
    We are, from time to time, a party to legal proceedings and claims that arise out of the ordinary course of our business. We are not currently a party to any material legal proceedings.
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Note 11—Indebtedness
Credit Agreement
    We are party to a credit agreement with Bank of America, N.A. and certain other lenders (the Credit Agreement) that provides for a revolving credit facility in the amount of up to $300 million (the Credit Facility) and that expires in July 2023. We have the right to request an increase of the aggregate commitments under the Credit Facility by up to an additional $150 million, subject to specified conditions. At September 30, 2020, we owed $180 million under the Credit Facility.
Borrowings under the Credit Facility may be used for lawful corporate purposes of Bottomline and its subsidiaries, including acquisitions, share repurchases, capital expenditures, the repayment or refinancing of indebtedness and general corporate purposes. The Credit Facility is available for the issuance of up to $20 million of letters of credit and up to $20 million of swing line loans.
    The Credit Agreement contains customary representations, warranties and covenants, including, but not limited to, material adverse events, specified restrictions on indebtedness, liens, investments, acquisitions, sales of assets, dividends and other restricted payments, and transactions with affiliates. We are required to comply with (a) a maximum consolidated net leverage ratio of 3.50 to 1.00; and (b) a minimum consolidated interest coverage ratio of 3.00 to 1.00. The Credit Agreement also contains customary events of default and related cure provisions. As of September 30, 2020, we were in compliance with all covenants.
The Credit Agreement is guaranteed by us (as borrower) and certain of our existing and future domestic material restricted subsidiaries (the Guarantors) and is secured by substantially all of our domestic assets and those of the Guarantors, including a pledge of all the shares of capital stock of the Guarantors and 65% of the shares of the capital stock of our first-tier foreign subsidiaries or those of any Guarantor, in each case subject to certain exceptions as set forth in the Credit Agreement. The collateral does not include, among other things, any real property or the capital stock or any assets of any unrestricted subsidiary.
Note 12—Derivative Instruments
Cash Flow Hedges
Interest Rate Swap Agreements
We utilize interest rate swap agreements to hedge our exposure to interest rate risk. At September 30, 2020, we had two outstanding interest rate swap agreements with notional values of $100 million and $80 million.
The notional value of each interest rate swap agreement is expected to match the corresponding principal amount of a portion of our borrowings under the Credit Facility.
The $100 million notional value agreement is effective as of December 1, 2017 and expires on December 1, 2021. During this period, the notional amount will have a fixed interest rate of 1.9275% and Citizens Bank, National Association, as counterparty to the agreement, will pay us interest at a floating rate based on the 1 month USD-LIBOR-BBA swap rate on the notional amount. Interest payments are made quarterly on a net settlement basis.
The $80 million notional value agreement is effective as of December 1, 2021 and expires on July 16, 2023. During this period, the notional amount will have a fixed interest rate of 2.125% and Bank of America, N.A., as counterparty to the agreement, will pay us interest at a floating rate based on the 1 month USD-LIBOR-BBA swap rate on the notional amount. Interest payments will be made monthly on a net settlement basis.
We designated the interest rate swaps as hedging instruments and they qualified for hedge accounting upon inception and at September 30, 2020. To continue to qualify for hedge accounting, the instruments must retain a “highly effective” ability to hedge interest rate risk for borrowings under the Credit Facility. We are required to test hedge effectiveness at the end of each financial reporting period. If a derivative qualifies for hedge accounting, changes in fair value of the hedge instrument are recognized in accumulated other comprehensive income (loss) (AOCI) and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The reclassification into earnings is recorded as a component of our interest expense within other expense, net. If the instrument were to lose some or all of its hedge effectiveness, changes in fair value for the “ineffective” portion of the instrument would be recorded immediately in earnings.
The fair values of the interest rate swaps and their respective locations in our consolidated balance sheets at September 30, 2020 and June 30, 2020 were as follows:
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Description Balance Sheet Location September 30, 2020 June 30, 2020
Derivative interest rate swaps (in thousands)
Short-term derivative liability Accrued expenses and other current liabilities $ 1,638  $ 1,631 
Long-term derivative liability Other liabilities $ 2,995  $ 3,448 
The following table presents the effect of the derivative interest rate swaps in our consolidated statement of comprehensive loss for the three months ended September 30, 2020 and 2019.
Gain (Loss) in AOCI June 30, 2020 Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)
Amount of (Gain) Loss Reclassified from AOCI into Net Loss (Effective Portion) (1)
Gain (Loss) in AOCI September 30, 2020
(in thousands)
Derivative interest rate swap $ (5,079) $ (6) $ 452  $ (4,633)
Gain (Loss) in AOCI June 30, 2019 Amount of Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion)
Amount of (Gain) Loss Reclassified from AOCI into Net Loss (Effective Portion) (1)
Gain (Loss) in AOCI September 30, 2019
(in thousands)
Derivative interest rate swap $ (1,285) $ (595) $ (82) $ (1,962)
——————
(1)    Recorded as interest income (expense) within other expense, net in our unaudited consolidated statements of comprehensive income (loss).
During the three months ended September 30, 2020, we concluded that no portion of the hedges was ineffective.
We expect to reclassify approximately $1.8 million of this unrealized loss from AOCI to earnings over the next twelve months.

Note 13—Postretirement and Other Employee Benefits
Defined Benefit Pension Plan
    We sponsor defined benefit pension plans for our Swiss-based employees (the Swiss pension plans) that are governed by local regulatory requirements. The Swiss pension plans include certain minimum benefit guarantees that, under U.S. GAAP, require defined benefit plan accounting.
    Net periodic pension costs for the Swiss pension plans included the following components:
Three Months Ended September 30,
2020 2019
(in thousands)
Components of net periodic cost
Service cost $ 765  $ 724 
Interest cost 37  56 
Prior service credit (83) (77)
Net actuarial loss 61  118 
Expected return on plan assets (285) (307)
Net periodic cost $ 495  $ 514 
    The components of net periodic pension cost other than current service cost are presented within other expense, net in our unaudited consolidated statements of comprehensive income (loss).
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
    This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. The statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Without limiting the foregoing, the words may, will, should, could, expects, plans, intends, anticipates, believes, estimates, predicts, potential and similar expressions are intended to identify forward-looking statements. All forward-looking statements included in this Quarterly Report on Form 10-Q are based on information available to us up to and including the date of this report, and we assume no obligation to update any such forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth below under Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II. Item 1A. Risk Factors and elsewhere in this Quarterly Report on Form 10-Q. You should carefully review those factors and also carefully review the risks outlined in other documents that we file from time to time with the Securities and Exchange Commission (SEC), including Part II. Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.
    In the management discussion that follows, we have highlighted those changes and operating events that were the primary factors affecting period to period fluctuations. The remainder of the change in period to period fluctuations from that which is specifically discussed arises from various individually insignificant items.
Overview
    We help make complex business payments simple, smart and secure. We provide solutions that are helping to accelerate the digital transformation of business payments. Corporations and banks rely on us for domestic and international payments, efficient cash management, automated workflows for payment processing and bill review, and fraud detection, behavioral analytics and regulatory compliance solutions.
    We operate payment platforms that facilitate electronic payment and transaction settlement between businesses, their vendors and banks. We offer solutions that banks use to provide payment, cash management and treasury capabilities to their business customers, as well as solutions that financial institutions use to engage intelligently with customers and acquire, deepen and grow profitable relationships. Our legal spend management solutions help manage and determine the right amount to pay for legal services and claims, vendor expenditures for insurance companies and other large consumers of outside legal services as well as related tools and analytics for law firms themselves. Corporate customers rely on our solutions to automate payment and accounts payable processes and to streamline and manage the production and retention of electronic documents. Our fraud and risk management solutions are designed to non-invasively monitor and analyze user behavior and payment transactions to flag behavioral and data anomalies and other suspicious activity to gain protection from internal fraud and external financial crime.
    Our solutions are designed to complement, leverage and extend our customers’ existing information systems, accounting applications and banking relationships so that they can be deployed quickly and efficiently. To help our customers realize the maximum value from our products and meet their specific business requirements, we also provide professional services for training, consulting and product enhancement.
Financial Highlights
    For the three months ended September 30, 2020, our revenue increased to $112.4 million from $108.2 million in the same period of the prior fiscal year. Our revenue for the three months ended September 30, 2020 was favorably impacted by $2.0 million due to the impact of foreign currency exchange rates primarily related to the British Pound Sterling, which appreciated against the U.S. Dollar as compared to the same period of the prior fiscal year. The overall revenue increase was attributable to revenue increases in our Cloud Solutions segment of $3.9 million and our Banking Solutions segment of $2.0 million, partially offset by revenue decreases in our Payments and Documents and Other segments of $1.2 million and $0.6 million, respectively. The Banking Solutions segment's revenue increase was primarily due to new customer engagements and platform go-lives, as customers continued to deploy our hosted solutions. The increased revenue from our Cloud Solutions segment was primarily due to increased subscriptions revenue from our financial messaging and PTX payment platforms.
    Our net income was $0.4 million in the three months ended September 30, 2020 compared to net loss of $1.4 million in the same period of the prior fiscal year. Our net income for the three months ended September 30, 2020 was favorably impacted by gross profit expansion of $4.2 million, modestly offset by increased operating expenses of $0.6 million and an increase in provision for income taxes of $1.8 million. The increase in gross margins was primarily driven by the revenue increases in our Cloud Solutions and Banking Solutions segments. The increase in operating expenses was primarily driven by increased general and administrative expenses of $0.3 million, product development and engineering costs of $0.2 million and sales and marketing costs of $0.1 million.
    In the three months ended September 30, 2020, we derived approximately 39% of our revenue from customers located outside of North America, principally in the United Kingdom (UK), continental Europe and the Asia-Pacific region.
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        Over the past several years we have made strategic investments in innovative new technology offerings that we believe will enhance our competitive position, help us win new business, drive subscription revenue growth and expand our operating margins. We expect to continue to make investments in our suite of products so that we can continue to offer innovative, feature-rich technology solutions to our customers.
COVID-19
The United States and the global communities in which we operate continue to face challenges posed by the COVID-19 pandemic. We, like virtually all companies, have suspended travel for employees, temporarily closed our offices and, since mid-March 2020, have requested that our employees work remotely. We have been operating effectively under our remote work model, which we anticipate continuing for the foreseeable future to ensure the safety and well-being of our employees.
While we are operating effectively through this challenge, the full impact of COVID-19 on our business and operating results remains uncertain. There is no recent, comparable event that provides instruction to the myriad of impacts that COVID-19 may ultimately have. The consequences will depend on many factors outside of our control, including the duration and severity of the pandemic and the economic downturn that it has created.
Beginning in March 2020 we started to observe a reduction in certain of our transactional based revenue streams, principally in our Paymode-X and Legal Spend Management solutions. Since March 2020, we have observed a modest negative impact to new software license sales and professional services revenues since interacting directly with customers in either a sales setting or an on-site professional services setting is difficult in this environment. Discretionary software purchases are also being delayed or deferred in many cases. However, the majority of our revenues are recurring which we believe continues to offer significant protection from the pandemic’s economic disruptions in the short term. We continue to believe that our existing financial position will allow us to manage the impact of COVID-19 for the foreseeable future.
We remain very optimistic for the longer term. We have observed that one consequence of this crisis has been an increase in the demand for digital transformation, particularly for the mission critical applications we provide. We are at the center of that transformation with our product set and overall market position and we plan to extend our competitive advantage through this challenge and emerge stronger than before.
Critical Accounting Policies and Significant Judgments and Estimates
    We believe that several accounting policies are important to understanding our historical and future performance. We refer to these policies as critical because they involve areas of financial reporting that require us to make judgments and estimates about matters that are uncertain at the time we make the estimate and different estimates - which also would have been reasonable - could have been used.
    The critical accounting policies and estimates we identified in our most recent Annual Report on Form 10-K for the fiscal year ended June 30, 2020 related to revenue recognition, the valuation of goodwill and intangible assets, the valuation of acquired deferred revenue, capitalized software costs and income taxes. There have been no changes to the critical accounting policies from those we disclosed in Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.
    It is important that the discussion of our operating results that follows be read in conjunction with the critical accounting policies disclosed in Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020, as filed with the SEC on August 28, 2020.
Recent Accounting Pronouncements
    For information with respect to recent accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, please refer to Note 2 Recent Accounting Pronouncements to our unaudited consolidated financial statements included in Part I. Item 1 of this Quarterly Report on Form 10-Q.
Results of Operations
Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019
Segment Information
    Operating segments are components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our chief executive officer.
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    Our operating segments are organized principally by the type of product or service offered and by geography. Similar operating segments have been aggregated into four reportable segments: Cloud Solutions, Banking Solutions, Payments and Documents and Other.
    The following tables represent our segment revenues and our measure of segment profit (loss):
Three Months Ended September 30, Increase (Decrease)
Between Periods
2020 2019 $ Change Inc (Dec) % Change Inc (Dec)
(Dollars in thousands)
Segment revenue:
Cloud Solutions $ 64,956  $ 61,022  $ 3,934  6.4  %
Banking Solutions 26,190  24,169  2,021  8.4  %
Payments and Documents 17,396  18,578  (1,182) (6.4) %
Other 3,823  4,407  (584) (13.3) %
Total segment revenue $ 112,365  $ 108,176  $ 4,189  3.9  %
Segment measure of profit (loss):
Cloud Solutions $ 14,597  $ 13,799  $ 798  5.8  %
Banking Solutions 2,956  535  2,421  452.5  %
Payments and Documents 4,100  5,009  (909) (18.1) %
Other (3,107) (1,866) (1,241) (66.5) %
Total measure of segment profit $ 18,546  $ 17,477  $ 1,069  6.1  %
    A reconciliation of the total measure of segment profit to GAAP income (loss) before income taxes is as follows:
Three Months Ended September 30,
2020 2019
(in thousands)
Total measure of segment profit $ 18,546  $ 17,477 
Less:
Amortization of acquisition-related intangible assets (5,029) (4,950)
Stock-based compensation plan expense (9,973) (11,044)
Acquisition and integration-related expenses (245) (1,697)
Restructuring expense (70) 25 
Other non-core (expense) benefit (48) 14 
Global ERP system implementation and other costs —  (224)
Other expense, net of pension adjustments (1,026) (965)
Income (loss) before income taxes $ 2,155  $ (1,364)


Cloud Solutions
Revenues from our Cloud Solutions segment increased $3.9 million for the three months ended September 30, 2020 as compared to the same period in the prior fiscal year, due to increased revenue of $4.7 million from our financial messaging and PTX payment platforms, partially offset by decreased revenue from our Paymode-X payment platform of $0.8 million. Segment profit increased $0.8 million for the three months ended September 30, 2020 as compared to the same period in the prior fiscal year as the revenue increases described above were offset in part by increased operating expenses of $2.4 million related primarily to increased sales and marketing expenses and general and administrative expenses. We expect revenue and profit for the Cloud Solutions segment to increase in fiscal year 2021 as compared to fiscal year 2020 as a result of increased revenue from our payment platforms and our legal spend management solutions.
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Banking Solutions
    Revenues from our Banking Solutions segment increased $2.0 million for the three months ended September 30, 2020 as compared to the same period in the prior fiscal year, due to increased subscriptions revenue of $4.6 million, partially offset by decreased service and maintenance revenue of $2.1 million and decreased software license revenue of $0.5 million. The increase in subscriptions revenue was primarily related to our customer base expanding on our SaaS platforms and as a result of our continued deployment of our newer banking solutions. The decrease in software license revenue was primarily driven by the evolution of our business strategy, which is focused on a subscription revenue model rather than one-time license events. Segment profit increased $2.4 million for the three months ended September 30, 2020 as compared to the same period in the prior fiscal year, primarily due to the revenue increases described and decreased operating expenses associated with sales and marketing and product development costs of $0.8 million and $0.1 million, respectively, partially offset by increased general and administrative expenses of $0.3 million. We expect revenue to continue to increase and profit to remain relatively consistent for the Banking Solutions segment in fiscal year 2021 as compared to fiscal year 2020.
Payments and Documents
Revenues from our Payments and Documents segment decreased $1.2 million for the three months ended September 30, 2020 as compared to the same period in the prior fiscal year, due primarily to decreased service and maintenance revenue of $1.1 million and decreased software licenses revenue of $0.6 million, partially offset by increased subscriptions revenue of $0.8 million. The decrease in service and maintenance revenue was driven by the continued conversion of our customers to our hosted and subscription based solutions rather than deployed, perpetual license solutions. Segment profit decreased $0.9 million for the three months ended September 30, 2020 as compared to the same period in the prior fiscal year, due to the revenue decrease described above and increased operating expenses of $0.5 million primarily related to increased sales and marketing and product development and engineering costs, partially offset by decreased cost of revenue of $0.8 million. We expect revenue to increase and profit to remain consistent for the Payments and Documents segment in fiscal year 2021.
Other
Revenues from our Other segment decreased for the three months ended September 30, 2020 as compared to the same periods in the prior fiscal year. Segment profit decreased $1.2 million for the three months ended September 30, 2020, as compared to the same period in the prior fiscal year primarily due to decreased software license revenue, increased cost of revenue and increased sales and marketing, product development and engineering and general and administrative costs. We expect Other segment revenue to remain consistent and profit to decrease slightly in fiscal year 2021 as compared to fiscal year 2020.
Revenues by category
Three Months Ended September 30, Increase (Decrease)
Between Periods
2020 2019 $ Change Inc (Dec) % Change Inc (Dec)
(Dollars in thousands)
Revenues:
Subscriptions $ 90,384  $ 80,066  $ 10,318  12.9  %
Software licenses 977  2,576  (1,599) (62.1) %
Service and maintenance 20,564  24,825  (4,261) (17.2) %
Other 440  709  (269) (37.9) %
Total revenues $ 112,365  $ 108,176  $ 4,189  3.9  %
As % of total revenues:
Subscriptions 80.4  % 74.0  %
Software licenses 0.9  % 2.4  %
Service and maintenance 18.3  % 22.9  %
Other 0.4  % 0.7  %
Total revenues 100.0  % 100.0  %
Subscriptions
    Revenues from subscriptions increased $10.3 million for the three months ended September 30, 2020 as compared to the same period in the prior fiscal year. The overall revenue increase was driven by increases in subscriptions revenue from our Cloud Solutions, Banking Solutions and Payments and Documents of $5.0 million, $4.6 million and $0.8 million, respectively, due to the
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impact of customers going live on our hosted solutions and the continued impact of customers converting to subscription based solutions. We expect subscriptions revenues to increase in fiscal year 2021 due to revenue increases in our Banking Solutions segment and our financial messaging and PTX payment platforms.
Software Licenses
    Revenues from software licenses decreased $1.6 million for the three months ended September 30, 2020 as compared to the same period in the prior fiscal year. The overall revenue decrease was due principally to decreases in software revenue from our Payments and Documents segment of $0.6 million, Banking Solutions segment of $0.5 million and Other segment of $0.4 million. The decrease in software license revenue was predominantly driven by the continued conversion of our customers to our hosted and subscription based solutions rather than deployed, perpetual license solutions. We expect software license revenues to decrease in fiscal year 2021, as we continue to emphasize our subscription based solutions rather than on-premise software deployments.
Service and Maintenance
    Revenues from service and maintenance decreased $4.3 million for the three months ended September 30, 2020 as compared to the same period in the prior fiscal year. The overall revenue decrease was due principally to decreases in revenue from our Banking Solutions segment of $2.1 million, Payments and Documents Solutions segment of $1.1 million and Cloud Solutions segment of $1.0 million, driven by the continued conversion of our customers to our hosted and subscription based solutions rather than deployed, perpetual license solutions. We expect service and maintenance revenues will decrease in fiscal year 2021 as a result of decreased services revenue from our Payments and Documents and Banking Solutions segments and financial messaging solutions, primarily due to our continued emphasis on hosted solutions.
Other
    Our other revenues consist principally of equipment and supplies sales, which remained minor components of our overall revenue. We expect that other revenues will remain minor components of our overall revenue during fiscal year 2021.
Cost of revenues by category
Three Months Ended September 30, Increase (Decrease)
Between Periods
2020 2019 $ Change Inc (Dec) % Change Inc (Dec)
(Dollars in thousands)
Cost of revenues:
Subscriptions $ 35,218 $ 32,765 $ 2,453  7.5  %
Software licenses 90 161 (71) (44.1) %
Service and maintenance 10,916 13,053 (2,137) (16.4) %
Other 309 516 (207) (40.1) %
Total cost of revenues $ 46,533 $ 46,495 $ 38  0.1  %
Gross Profit ($) $ 65,832 $ 61,681 $ 4,151  6.7  %
Gross Profit (%) 58.6  % 57.0  %
Subscriptions
    Subscriptions costs include salaries and other related costs for our professional services teams as well as costs related to our hosting infrastructure such as depreciation and facilities related expenses. Subscriptions costs decreased to 39% of subscriptions revenues in the three months ended September 30, 2020 as compared to 41% of subscriptions revenues in the three months ended September 30, 2019 due to the continued revenue expansion from our hosted solutions. We expect subscriptions costs as a percentage of subscriptions revenues will continue to decrease in fiscal year 2021 as a result of increased revenue contribution from our cloud-based banking, legal spend management and Paymode-X solutions.
Software Licenses
    Software license costs consist of expenses incurred by us to distribute our software products and related documentation and costs of licensing third party software that is incorporated into or sold with certain of our products. Software license costs as a percentage of software license revenues were 9% in the three months ended September 30, 2020 as compared to 6% of software license revenue in the three months ended September 30, 2019 due to the decrease in software license revenue discussed above. Overall, software license costs remain inconsequential and we expect software license costs as a percentage of software license revenues will remain relatively consistent in fiscal year 2021.
Service and Maintenance
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    Service and maintenance costs include salaries and other related costs for our customer service, maintenance and help desk support staffs, as well as third party contractor expenses used to complement our professional services team. Service and maintenance costs as a percentage of service and maintenance revenues remained consistent in the three months ended September 30, 2020 as compared to the three months ended September 30, 2019 due primarily to the overall revenue decreases discussed above, offset by a decrease in cost of revenue. We expect that service and maintenance costs will remain relatively consistent in fiscal year 2021.
Other
    Other costs include the costs associated with equipment and supplies that we resell, as well as freight, shipping and postage costs associated with the delivery of our products. These remain minor components of our business. We expect other costs as a percentage of other revenues will decrease slightly in fiscal year 2021.
Operating Expenses
Three Months Ended September 30, Increase (Decrease)
Between Periods
2020 2019 $ Change Inc (Dec) % Change Inc (Dec)
(Dollars in thousands)
Operating expenses:
Sales and marketing $ 25,743 $ 25,688 $ 55  0.2  %
Product development and engineering 18,499 18,349 150  0.8  %
General and administrative 13,626 13,345 281  2.1  %
Amortization of acquisition-related intangible assets 5,029 4,950 79  1.6  %
Total operating expenses $ 62,897 $ 62,332 $ 565  0.9  %
As % of total revenues:
Sales and marketing 22.9  % 23.7  %
Product development and engineering 16.5  % 17.0  %
General and administrative 12.1  % 12.3  %
Amortization of acquisition-related intangible assets 4.5  % 4.6  %
Total operating expenses 56.0  % 57.6  %
Sales and Marketing
    Sales and marketing expenses consist primarily of salaries and other related costs for sales and marketing personnel, sales commissions, travel, public relations and marketing materials and trade show participation. Sales and marketing expenses increased slightly in the three months ended September 30, 2020 as compared to the three months ended September 30, 2019 due to an increase in employee related costs of $1.6 million, offset by decreased travel related costs of $0.9 million and decreased marketing related costs of $0.6 million. We expect sales and marketing expenses as a percentage of total revenues will increase in fiscal year 2021.
Product Development and Engineering
    Product development and engineering expenses consist primarily of personnel costs to support product development, which consists of enhancements and revisions to our products as well as initiatives related to new product development. Product development and engineering expenses increased in the three months ended September 30, 2020 as compared to the three months ended September 30, 2019 due to an increase in headcount related costs of $0.4 million as we continued to invest in the development of innovative, feature-rich products, partially offset by decreased travel related costs of $0.2 million. We expect product development and engineering expenses as a percentage of total revenues will increase in fiscal year 2021.
General and Administrative
    General and administrative expenses consist primarily of salaries and other related costs for operations and finance employees and legal and accounting services. General and administrative expenses increased slightly in the three months ended September 30, 2020 as compared to the three months ended September 30, 2019 due primarily to an increase in employee related costs of $1.5 million offset by decreased acquisition and integration related expenses of $1.4 million. We expect general and administrative expenses as a percentage of total revenues will remain consistent in fiscal year 2021.
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Amortization of Acquisition-related Intangible Assets
    We amortize our acquired intangible assets in proportion to the estimated rate at which the asset provides economic benefit to us. Accordingly, amortization expense rates are often higher in the earlier periods of an asset’s estimated life. The increase in amortization expense in the three months ended September 30, 2020 as compared to the three months ended September 30, 2019 occurred as a result of increased expense from intangible assets associated with our recent acquisitions. We expect that total amortization expense for acquired intangible assets for the remainder of fiscal year 2021 will be approximately $15.2 million.
 Other Expense, Net
Three Months Ended September 30, Increase (Decrease)
Between Periods
2020 2019 $ Change Inc (Dec) % Change Inc (Dec)
(Dollars in thousands)
Interest income $ 100  $ 223  $ (123) (55.2) %
Interest expense (1,258) (750) (508) (67.7) %
Other income (expense), net 378  (186) 564  303.2  %
Other expense, net $ (780) $ (713) $ (67) (9.4) %
    The components of other expense, net are as depicted above and remain minimal overall components of our operations. The increase in interest expense in the three months ended September 30, 2020 as compared to September 30, 2019 is a result of an increase in borrowings under our line of credit arrangement commencing in March, 2020.
Provision for Income Taxes
    We recorded income tax expense of $1.8 million and $3,000 for the three months ended September 30, 2020 and 2019, respectively. Please refer to Note 8 Income Taxes to our unaudited consolidated financial statements included in Part I. Item 1 of this Quarterly Report on Form 10-Q for further discussion.
Liquidity and Capital Resources
    We are party to a credit agreement with Bank of America, N.A. and certain other lenders that provides for a credit facility in the amount of up to $300 million (the Credit Facility). We have the right to request an increase to the aggregate commitments to the Credit Facility of up to an additional $150 million, subject to specified conditions. The Credit Facility expires in July 2023. At September 30, 2020, borrowings were $180 million and we were in compliance with all covenants.
    We have financed our operations primarily from cash provided by operating activities, the sale of our common stock and debt proceeds. We have historically generated positive operating cash flows. We believe that the cash generated from our operations and the cash and cash equivalents we have on hand will be sufficient to meet our operating requirements for the foreseeable future. If our existing cash resources along with cash generated from operations is insufficient to satisfy our operating requirements, we may need to sell additional equity or debt securities or seek other financing arrangements.
    One of our financial goals is to maintain and improve our capital structure. The key metrics we focus on in assessing the strength of our liquidity for the periods ending September 30, 2020 and June 30, 2020 and a summary of our cash activity for the three months ended September 30, 2020 and 2019 are summarized in the tables below:
September 30, June 30,
2020 2020
(in thousands)
Cash and cash equivalents $ 187,215  $ 194,832 
Marketable securities 10,210  10,209 
Borrowings under credit facility 180,000  180,000 
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Three Months Ended September 30,
2020 2019
(in thousands)
Cash provided by operating activities $ 7,910  $ 18,112 
Cash used in investing activities (20,149) (14,110)
Cash provided by (used in) financing activities 2,168  (8,013)
Effect of exchange rates on cash 3,294  (1,970)
     Cash, cash equivalents and marketable securities. At September 30, 2020, our cash and cash equivalents of $187.2 million consisted primarily of cash deposits held at major banks and money market funds. The $7.6 million decrease in cash and cash equivalents at September 30, 2020 from June 30, 2020 was primarily due to cash used to fund capital expenditures, including capitalization of software costs of $8.6 million, and cash used to fund business and asset acquisitions, net of cash acquired of $9.9 million, partially offset by cash generated from operations of $7.9 million and the effect of foreign exchange rates on cash of $3.3 million.
    Cash, cash equivalents and marketable securities included approximately $72.3 million held by our foreign subsidiaries as of September 30, 2020. We continue to permanently reinvest the earnings, if any, of our international subsidiaries other than the UK, Switzerland and India and therefore we do not provide for U.S. income taxes that could result from the distribution of foreign earnings from our international subsidiaries other than the UK, Switzerland and India. If our reinvestment plans change based on future events and we decide to repatriate amounts from other international subsidiaries to fund our domestic operations, those amounts would generally become subject to state tax in the U.S. to the extent there were cumulative profits in the foreign subsidiary from which the distribution to the U.S. was made.
    Cash and cash equivalents held by our foreign subsidiaries are denominated in currencies other than U.S. Dollars. Increases primarily in the foreign currency exchange rate of the British Pound Sterling to the U.S. Dollar increased our overall cash balances by approximately $3.3 million for the three months ended September 30, 2020. Further changes in the foreign currency exchange rates of the British Pound Sterling and other currencies could have a significant effect on our overall cash balances, however, we continue to believe that our existing cash balances, even in light of the foreign currency volatility we frequently experience, are adequate to meet our operating requirements for the foreseeable future.
    Operating Activities. Operating cash flow is derived by adjusting our net income or loss for non-cash operating items, such as depreciation and amortization, stock-based compensation plan expense, deferred income tax benefits or expenses and changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in our results of operations. Cash generated from operations decreased by $10.2 million in the three months ended September 30, 2020 as compared to the same period in the prior fiscal year. The decrease was primarily related to a decrease in cash flows generated from the change in accounts receivable of $8.7 million and a decrease in the cash flows from the change in accounts payable of $2.0 million.
        At September 30, 2020, a substantial portion of our deferred tax assets have been reserved since, given the available evidence, it was deemed more likely than not that these deferred tax assets would not be realized.
    Investing Activities. Investing cash flows consist primarily of capital expenditures, inclusive of capitalized software costs, investment purchases and sales and cash used for the acquisition of businesses and assets. The $6.0 million increase in net cash used in investing activities for the three months ended September 30, 2020 as compared to the same period in the prior fiscal year was primarily due to cash used to fund business and asset acquisitions, net of cash acquired, of $9.9 million and the issuance of a note receivable of $1.6 million, partially offset by a decrease in cash used for capital expenditures of $2.8 million and a decrease in cash used for the purchase of available for sale securities of $3.3 million.
    Financing Activities. Financing cash flows consist primarily of cash inflows as a result of borrowings under our revolving credit facility and proceeds from the sale of shares of common stock through employee equity incentive plans, offset by repurchases of our common stock.
Contractual Obligations
    For the three months ended September 30, 2020, there have been no material changes to the contractual obligations disclosed in Item 7 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.
    Our estimate of unrecognized tax benefits for which cash settlement may be required is $2.2 million. As of September 30, 2020, we are unable to estimate the timing of future cash outflows, if any, associated with these liabilities as we do not currently anticipate settling any of these tax positions with cash payment in the foreseeable future.
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Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements during the three months ended September 30, 2020.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
    We are exposed to a variety of risks, including interest rate changes, foreign currency exchange rate fluctuations, and derivative instruments classification and fair value changes. We have not entered into any foreign currency hedging transactions or other instruments to minimize our exposure to foreign currency exchange rate fluctuations nor do we presently plan to in the future.
    We are a party to interest rate swap agreements which we designated as hedge instruments to minimize our exposure to interest rate fluctuations under our Credit Facility.
    There has been no material change to our exposure to market risk from that which was disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020 as filed with the SEC on August 28, 2020, which is incorporated herein by reference.

Item 4. Controls and Procedures
    Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2020. The term disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
    Based on the evaluation of our disclosure controls and procedures as of September 30, 2020, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
    No changes in our internal control over financial reporting occurred during the fiscal quarter ended September 30, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION

Item 1. Legal Proceedings
    We are, from time to time, a party to legal proceedings and claims that arise in the ordinary course of our business. We do not believe that there are claims or proceedings pending against us for which the ultimate resolution would have a material effect on, or require further disclosure in, our financial statements.

Item 1A. Risk Factors
Investing in our common stock involves a high degree of risk. You should carefully consider the risk factors identified in Part I. Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020 before making an investment decision involving our common stock. These risk factors could materially affect our business, financial condition or results of operations and could cause our actual business and financial results to differ materially from those contained in forward-looking statements made in this Quarterly Report on Form 10-Q or elsewhere by management from time to time. The COVID-19 pandemic has created additional risks to those we normally face in operating our business, including those discussed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020. These risks and uncertainties are not the only ones facing us. Additional risks and uncertainties may also impact our business operations. There have been no material changes to the risk factors disclosed in Part I. Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
On August 5, 2019, we announced that our board of directors authorized a repurchase program of our common stock for an aggregate repurchase price not to exceed $50 million. This program expires on August 5, 2021.
    On July 29, 2020, we issued 166,393 shares of our common stock as purchase consideration in connection with our acquisition of AnaSys AG (Anasys). We also issued 28,000 shares of our common stock to certain selling stockholders of AnaSys with vesting conditions tied to continued employment with us. These shares were issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (Securities Act) provided by Section 4(a)(2) of the Securities Act. No underwriters were involved in any such issuances.

Item 5. Other Information
On November 4, 2020, we filed a Certificate of Amendment to our Amended and Restated Certificate of Incorporation, as amended (the “Amended and Restated Certificate of Incorporation”), with the Secretary of State of the State of Delaware changing the name of our company from “Bottomline Technologies (de), Inc.” to “Bottomline Technologies, Inc.” effective at 4:00 p.m. Eastern Time on November 4, 2020. Under Section 242 of the Delaware General Corporation Law, the name change does not require stockholder approval. The name change does not affect the rights of our stockholders and there were no changes to the Amended and Restated Certificate of Incorporation other than to reflect the name change. Our common stock will continue to trade on The Nasdaq Global Select Market under the symbol “EPAY,” and its CUSIP number will not change.
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Item 6. Exhibits
Incorporated by Reference
Exhibit Number Description Form File No. Exhibit Filing Date Filed Herewith
3.1 X
3.2 X
  31.1 X
  31.2 X
  32.1 X
  32.2 X
101.INS
Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH**
Inline XBRL Taxonomy Extension Schema Document
X
101.CAL**
Inline XBRL Taxonomy Calculation Linkbase Document
X
101.DEF**
Inline XBRL Taxonomy Definition Linkbase Document
X
101.LAB**
Inline XBRL Taxonomy Label Linkbase Document
X
101.PRE**
Inline XBRL Taxonomy Presentation Linkbase Document
X
104
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)
**    submitted electronically herewith
Attached as Exhibit 101 to this report are the following formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Unaudited Condensed Consolidated Balance Sheets as of September 30, 2020 and June 30, 2020, (ii) Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended September 30, 2020 and 2019, (iii) Unaudited Consolidated Statements of Stockholders' Equity for the three months ended September 30, 2020 and 2019, (iv) Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2020 and 2019 and (v) Notes to Unaudited Condensed Consolidated Financial Statements.

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SIGNATURE
    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

                Bottomline Technologies, Inc.                     
    
Date: November 9, 2020 By:           /s/ RICHARD D. BOOTH
                    Richard D. Booth
            Chief Financial Officer and Treasurer
       (Principal Financial and Accounting Officer)

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Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BOTTOMLINE TECHNOLOGIES (de), INC.
Bottomline Technologies (de), Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, does hereby certify as follows:
1. The Corporation filed its original Certificate of Incorporation with the Secretary of the State of Delaware on August 12, 1997.
2. At a duly called meeting of the Board of Directors of the Corporation at which a quorum was present at all times, a resolution was duly adopted, pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware, setting forth an Amended and Restated Certificate of Incorporation of the Corporation and declaring said Amended and Restated Certificate of Incorporation advisable. The stockholders of the Corporation duly approved said proposed Amended and Restated Certificate of Incorporation by written consent in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware. The resolution setting forth the Amended and Restated Certificate of Incorporation is as follows:

RESOLVED: That the Certificate of Incorporation of the Corporation, be and hereby is amended and restated in its
entirety so that the same shall read as follows:
FIRST. The name of the Corporation is:
Bottomline Technologies (de), Inc.
SECOND. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.
THIRD. The nature of the business or purposes to be conducted or promoted by the Corporation is as follows:
To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.
FOURTH. The total number of shares of all classes of stock which the Corporation shall have authority to issue is 54,000,000 shares, consisting of (i) 50,000,000 shares of Common Stock, $.001 par value per share (“Common Stock”), and (ii) 4,000,000 shares of Preferred Stock, $.001 par value per share (“Preferred Stock”).
The following is a statement of the designations and the powers, preferences and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation.















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A. COMMON STOCK
1. General. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights of the holders of the Preferred Stock of any series as may be designated by the Board of Directors upon any issuance of the Preferred Stock of any series.
2. Voting. The holders of the Common Stock are entitled to one vote for each share held at all meetings of stockholders. There shall be no cumulative voting.
The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law of Delaware.
3. Dividends. Dividends may be declared and paid on the Common Stock from funds lawfully available therefor as and when determined by the Board of Directors and subject to any preferential dividend rights of any then outstanding Preferred Stock.
4. Liquidation. Upon the dissolution or liquidation of the Corporation, whether voluntary or involuntary, holders of Common Stock will be entitled to receive all assets of the Corporation available for distribution to its stockholders, subject to any preferential rights of any then outstanding Preferred Stock.

B. PREFERRED STOCK
Preferred Stock may be issued from time to time in one or more series, each of such series to have such terms as stated or expressed herein and in the resolution or resolutions providing for the issue of such series adopted by the Board of Directors of the Corporation as hereinafter provided. Any shares of Preferred Stock which may be redeemed, purchased or acquired by the Corporation may be reissued except as otherwise provided by law. Different series of Preferred Stock shall not be construed to constitute different classes of shares for the purposes of voting by classes unless expressly provided.
Authority is hereby expressly granted to the Board of Directors from time to time to issue the Preferred Stock in one or more series, and in connection with the creation of any such series, by resolution or resolutions providing for the issue of the shares thereof, to determine and fix such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including without limitation thereof, dividend rights, conversion rights, redemption privileges and liquidation preferences, as shall be stated and expressed in such resolutions, all to the full extent now or hereafter permitted by the General Corporation Law of Delaware. Without limiting the generality of the foregoing, the resolutions providing for issuance of any series of Preferred Stock may provide that such series shall be superior or rank equally or be junior to the Preferred Stock of any other series to the extent permitted by law. Except as otherwise provided in this Certificate of Incorporation, no vote of the holders of the Preferred Stock or Common Stock shall be a prerequisite to the designation or issuance of any shares of any series of the Preferred Stock authorized by and complying with the conditions of this Certificate of Incorporation, the right to have such vote being expressly waived by all present and future holders of the capital stock of the Corporation.







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FIFTH. The Corporation shall have a perpetual existence.
SIXTH. In furtherance of and not in limitation of powers conferred by statute, it is further provided:
1. Election of directors need not be by written ballot, except as and to the extent provided in the By-Laws of the Corporation.
2. The Board of Directors is expressly authorized to adopt, amend or repeal the By-Laws of the Corporation, except as and to the extent provided in the By-Laws of the Corporation.
SEVENTH. Whenever a compromise or arrangement is proposed between this corporation and its creditors or any class of them and/or between this corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for this corporation under the provisions of section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this corporation under the provisions of section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this corporation, as the case may be, and also on this corporation.
EIGHTH. Except to the extent that the General Corporation Law of Delaware prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability. No amendment to or repeal of this provision shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment.
NINTH. 1. Actions, Suits and Proceedings Other than by or in the Right of the Corporation. The Corporation shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he is or was, or has agreed to become, a director or officer of the Corporation, or is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer or trustee of, or in a similar capacity with, another corporation,










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partnership, joint venture, trust or other enterprise (including any employee benefit plan) (all such persons being referred to hereafter as an “Indemnitee”), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with such action, suit or proceeding and any appeal therefrom, if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Notwithstanding anything to the contrary in this Article, except as set forth in Section 7 below, the Corporation shall not indemnify an Indemnitee seeking indemnification in connection with a proceeding (or part thereof) initiated by the Indemnitee unless the initiation thereof was approved by the Board of Directors of the Corporation. Notwithstanding anything to the contrary in this Article, the Corporation shall not indemnify an Indemnitee to the extent such Indemnitee is reimbursed from the proceeds of insurance, and in the event the Corporation makes any indemnification payments to an Indemnitee and such Indemnitee is subsequently reimbursed from the proceeds of insurance, such Indemnitee shall promptly refund such indemnification payments to the Corporation to the extent of such insurance reimbursement.
2. Actions or Suits by or in the Right of the Corporation. The Corporation shall indemnify any Indemnitee who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was, or has agreed to become, a director or officer of the Corporation, or is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees) and, to the extent permitted by law, amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with such action, suit or proceeding and any appeal therefrom, if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses (including attorneys’ fees) which the Court of Chancery of Delaware shall deem proper.
3. Indemnification for Expenses of Successful Party. Notwithstanding the other provisions of this Article, to the extent that an Indemnitee has been successful, on the merits or otherwise, in defense of any action, suit or proceeding referred to in Sections 1 and 2 of this Article, or in defense of any claim, issue or matter therein, or on appeal from any such action, suit or proceeding, he shall be indemnified against all expenses (including attorneys’ fees)








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actually and reasonably incurred by him or on his behalf in connection therewith. Without limiting the foregoing, if any action, suit or proceeding is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to the Indemnitee, (ii) an adjudication that the Indemnitee was liable to the Corporation, (iii) a plea of guilty or nolo contendere by the Indemnitee, (iv) an adjudication that the Indemnitee did not act in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and (v) with respect to any criminal proceeding, an adjudication that the Indemnitee had reasonable cause to believe his conduct was unlawful, the Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect thereto.
4. Notification and Defense of Claim. As a condition precedent to his right to be indemnified, the Indemnitee must notify the Corporation in writing as soon as practicable of any action, suit, proceeding or investigation involving him for which indemnity will or could be sought. With respect to any action, suit, proceeding or investigation of which the Corporation is so notified, the Corporation will be entitled to participate therein at its own expense and/or to assume the defense thereof at its own expense, with legal counsel reasonably acceptable to the Indemnitee. After notice from the Corporation to the Indemnitee of its election so to assume such defense, the Corporation shall not be liable to the Indemnitee for any legal or other expenses subsequently incurred by the Indemnitee in connection with such claim, other than as provided below in this Section 4. The Indemnitee shall have the right to employ his own counsel in connection with such claim, but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of the Indemnitee unless (i) the employment of counsel by the Indemnitee has been authorized by the Corporation, (ii) counsel to the Indemnitee shall have reasonably concluded that there may be a conflict of interest or position on any significant issue between the Corporation and the Indemnitee in the conduct of the defense of such action or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of counsel for the Indemnitee shall be at the expense of the Corporation, except as otherwise expressly provided by this Article. The Corporation shall not be entitled, without the consent of the Indemnitee, to assume the defense of any claim brought by or in the right of the Corporation or as to which counsel for the Indemnitee shall have reasonably made the conclusion provided for in clause (ii) above.
5. Advance of Expenses. Subject to the provisions of Section 6 below, in the event that the Corporation does not assume the defense pursuant to Section 4 of this Article of any action, suit, proceeding or investigation of which the Corporation receives notice under this Article, any expenses (including attorneys’ fees) incurred by an Indemnitee in defending a civil or criminal action, suit, proceeding or investigation or any appeal therefrom shall be paid by the Corporation in advance of the final disposition of such matter; provided, however, that the payment of such expenses incurred by an Indemnitee in advance of the final disposition of such matter shall be made only upon receipt of an undertaking by or on behalf of the Indemnitee to repay all amounts so advanced in the event that it shall ultimately be determined that the Indemnitee is not entitled to be indemnified by the Corporation as authorized in this Article. Such undertaking shall be accepted without reference to the financial ability of the Indemnitee to make such repayment.










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6. Procedure for Indemnification. In order to obtain indemnification or advancement of expenses pursuant to Section 1, 2, 3 or 5 of this Article, the Indemnitee shall submit to the Corporation a written request, including in such request such documentation and information as is reasonably available to the Indemnitee and is reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification or advancement of expenses. Any such indemnification or advancement of expenses shall be made promptly, and in any event within 60 days after receipt by the Corporation of the written request of the Indemnitee, unless with respect to requests under Section 1, 2 or 5 the Corporation determines within such 60-day period that the Indemnitee did not meet the applicable standard of conduct set forth in Section 1 or 2, as the case may be. Such determination shall be made in each instance by (a) a majority vote of the directors of the Corporation consisting of persons who are not at that time parties to the action, suit or proceeding in question (“disinterested directors”), whether or not a quorum, (b) a majority vote of a committee of disinterested directors designated by majority vote of disinterested directors, whether or not a quorum, (c) a majority vote of a quorum of the outstanding shares of stock of all classes entitled to vote for directors, voting as a single class, which quorum shall consist of stockholders who are not at that time parties to the action, suit or proceeding in question, (d) independent legal counsel (who may, to the extent permitted by law, be regular legal counsel to the Corporation), or (e) a court of competent jurisdiction.
7. Remedies. The right to indemnification or advances as granted by this Article shall be enforceable by the Indemnitee in any court of competent jurisdiction if the Corporation denies such request, in whole or in part, or if no disposition thereof is made within the 60-day period referred to above in Section 6. Unless otherwise required by law, the burden of proving that the Indemnitee is not entitled to indemnification or advancement of expenses under this Article shall be on the Corporation. Neither the failure of the Corporation to have made a determination prior to the commencement of such action that indemnification is proper in the circumstances because the Indemnitee has met the applicable standard of conduct, nor an actual determination by the Corporation pursuant to Section 6 that the Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct. The Indemnitee’s expenses (including attorneys’ fees) incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such proceeding shall also be indemnified by the Corporation.
8. Subsequent Amendment. No amendment, termination or repeal of this Article or of the relevant provisions of the General Corporation Law of Delaware or any other applicable laws shall affect or diminish in any way the rights of any Indemnitee to indemnification under the provisions hereof with respect to any action, suit, proceeding or investigation arising out of or relating to any actions, transactions or facts occurring prior to the final adoption of such amendment, termination or repeal.
9. Other Rights. The indemnification and advancement of expenses provided by this Article shall not be deemed exclusive of any other rights to which an Indemnitee seeking indemnification or advancement of expenses may be entitled under any law (common or statutory), agreement or vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in any other capacity while holding office for the










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Corporation, and shall continue as to an Indemnitee who has ceased to be a director or officer, and shall inure to the benefit of the estate, heirs, executors and administrators of the Indemnitee. Nothing contained in this Article shall be deemed to prohibit, and the Corporation is specifically authorized to enter into, agreements with officers and directors providing indemnification rights and procedures different from those set forth in this Article. In addition, the Corporation may, to the extent authorized from time to time by its Board of Directors, grant indemnification rights to other employees or agents of the Corporation or other persons serving the Corporation and such rights may be equivalent to, or greater or less than, those set forth in this Article.
10. Partial Indemnification. If an Indemnitee is entitled under any provision of this Article to indemnification by the Corporation for some or a portion of the expenses (including attorneys’ fees), judgments, fines or amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any action, suit, proceeding or investigation and any appeal therefrom but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify the Indemnitee for the portion of such expenses (including attorneys’ fees), judgments, fines or amounts paid in settlement to which the Indemnitee is entitled.
11. Insurance. The Corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan) against any expense, liability or loss incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of Delaware.
12. Merger or Consolidation. If the Corporation is merged into or consolidated with another corporation and the Corporation is not the surviving corporation, the surviving corporation shall assume the obligations of the Corporation under this Article with respect to any action, suit, proceeding or investigation arising out of or relating to any actions, transactions or facts occurring prior to the date of such merger or consolidation.
13. Savings Clause. If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each Indemnitee as to any expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement in connection with any action, suit, proceeding or investigation, whether civil, criminal or administrative, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Article that shall not have been invalidated and to the fullest extent permitted by applicable law.
14. Definitions. Terms used herein and defined in Section 145(h) and Section 145(i) of the General Corporation Law of Delaware shall have the respective meanings assigned to such terms in such Section 145(h) and Section 145(i).
15. Subsequent Legislation. If the General Corporation Law of Delaware is amended after adoption of this Article to expand further the indemnification permitted to Indemnitees, then the Corporation shall indemnify such persons to the fullest extent permitted by the General Corporation Law of Delaware, as so amended.










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TENTH. Except as otherwise provided herein, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute and this Certificate of Incorporation, and all rights conferred upon stockholders herein are granted subject to this reservation.
ELEVENTH. Stockholders of the Corporation may not take any action by written consent in lieu of a meeting. Notwithstanding any other provisions of law, the Certificate of Incorporation or the By-Laws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least seventy-five percent (75%) of the votes which all the stockholders would be entitled to cast in any annual election of directors or class of directors shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article ELEVENTH.
TWELFTH. Special meetings of stockholders may be called at any time by only the Chairman of the Board of Directors, the Chief Executive Officer, President or the Board of Directors. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting. Notwithstanding any other provision of law, this Certificate of Incorporation or the By-Laws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least seventy-five percent (75%) of the votes which all the stockholders would be entitled to cast in any annual election of directors or class of directors shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article TWELFTH.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be affixed hereto and this Amended and Restated Certificate of Incorporation to be signed by its Chairman of the Board, President and Chief Executive Officer this 17th day of February, 1999.

BOTTOMLINE TECHNOLOGIES (de), INC.
By:
/s/ Daniel M. McGurl
Daniel M. McGurl
Chairman of the Board, President and
Chief Executive Officer



















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CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
BOTTOMLINE TECHNOLOGIES (de), INC.
Pursuant to Section 242 of the
General Corporation Law of the State of Delaware
Bottomline Technologies (de), Inc. (hereinafter called the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify as follows:
At a meeting of the Board of Directors of the Corporation, a resolution was duly adopted pursuant to Section 242 of the General Corporation Law of the State of Delaware setting forth an amendment to the Amended and Restated Certificate of Incorporation of the Corporation and declaring said amendment to be advisable. The stockholders of the Corporation duly approved said amendment in accordance with Section 242 of the General Corporation Law of the State of Delaware. The resolution setting forth the amendment is as follows:
RESOLVED:
That the first paragraph of Article FOURTH of the Amended and Restated Certificate of Incorporation of the Corporation be and hereby is deleted in its entirety and the following first paragraph of Article FOURTH is inserted in lieu thereof:
“FOURTH: The total number of shares of all classes of stock which the Corporation shall have authority to issue is 104,000,000 shares, consisting of (i) 100,000,000 shares of Common Stock, $.001 par value per share (“Common Stock”), and (ii) 4,000,000 shares of Preferred Stock, $.001 par value per share (“Preferred Stock”).”

IN WITNESS WHEREOF, this Certificate of Amendment of Amended and Restated Certificate of Incorporation has been executed by a duly authorized officer of the Corporation this 17th day of January, 2013.


BOTTOMLINE TECHNOLOGIES (de), INC.
By:
/s/ Kevin M. Donovan
Kevin M. Donovan
Chief Financial Officer














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CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
BOTTOMLINE TECHNOLOGIES (de), INC.
Pursuant to Section 242 of the
General Corporation Law of the State of Delaware
Bottomline Technologies (de), Inc. (hereinafter called the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify as follows:
1. The Board of Directors of the Corporation duly adopted a resolution, pursuant to Section 242 of the General Corporation Law of the State of Delaware, setting forth an amendment to the Amended and Restated Certificate of Incorporation, as amended, of the Corporation (the “Amended and Restated Certificate of Incorporation”) and declaring said amendment to be advisable. The resolution setting forth the amendment is as follows:
RESOLVED: That Article FIRST of the Amended and Restated Certificate of Incorporation of the Corporation be and hereby is deleted in its entirety and the following is inserted in lieu thereof:
“FIRST. The name of the Corporation is:

Bottomline Technologies, Inc.”
2. This Certificate of Amendment shall be effective at 4:00 p.m., Eastern Time, on November 4, 2020.
IN WITNESS WHEREOF, this Certificate of Amendment has been executed by a duly authorized officer of the Corporation this 4th day of November, 2020.



BOTTOMLINE TECHNOLOGIES (de), INC.
By:
/s/ Richard D. Booth
Richard D. Booth
Chief Financial Officer and Treasurer
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Exhibit 3.2
AMENDED AND RESTATED BY-LAWS
OF
BOTTOMLINE TECHNOLOGIES, INC.
ARTICLE I.—Stockholders
1. Place of Meetings. All meetings of stockholders shall be held at such place within or without the State of Delaware as may be designated from time to time by the Board of Directors, the Chairman of the Board or the President or, if not so designated, at the registered office of the corporation.
2. Annual Meeting. The annual meeting of stockholders for the election of directors and for the transaction of such other business as may properly be brought before the meeting shall be held on a date to be fixed by the Board of Directors, the Chairman of the Board or the President (which date shall not be a legal holiday in the place where the meeting is to be held) at the time and place to be fixed by the Board of Directors, the Chairman of the Board or the President and stated in the notice of the meeting. If no annual meeting is held in accordance with the foregoing provisions, the Board of Directors shall cause the meeting to be held as soon thereafter as is convenient. If no annual meeting is held in accordance with the foregoing provisions, a special meeting may be held in lieu of the annual meeting, and any action taken at that special meeting shall have the same effect as if it had been taken at the annual meeting, and in such case all references in these By-Laws to the annual meeting of the stockholders shall be deemed to refer to such special meeting.
3. Special Meetings. Special meetings of stockholders may be called at any time only by the Chairman of the Board, the Chief Executive Officer and President or the Board of Directors. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.
4. Notice of Meetings. Except as otherwise provided by law, written notice of each meeting of stockholders, whether annual or special, shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. The notices of all meetings shall state the place, date and hour of the meeting. The notice of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the corporation.
5. Voting List. The officer who has charge of the stock ledger of the corporation shall prepare, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, at a place within the city where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time of the meeting, and may be inspected by any stockholder who is present.
6. Quorum. Except as otherwise provided by law, the Certificate of Incorporation or these By-Laws, the holders of a majority of the shares of the capital stock of the corporation issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business.
7. Adjournments. Any meeting of stockholders may be adjourned to any other time and to any other place at which a meeting of stockholders may be held under these By-Laws by the stockholders present or represented at




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the meeting and entitled to vote, although less than a quorum, or, if no stockholder is present, by any officer entitled to preside at or to act as Secretary of such meeting. It shall not be necessary to notify any stockholder of any adjournment of less than 30 days if the time and place of the adjourned meeting are announced at the meeting at which adjournment is taken, unless after the adjournment a new record date is fixed for the adjourned meeting. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting.
8. Voting and Proxies. Each stockholder shall have one vote for each share of stock entitled to vote held of record by such stockholder and a proportionate vote for each fractional share so held, unless otherwise provided by law, the Certificate of Incorporation or these By-Laws. Each stockholder of record entitled to vote at a meeting of stockholders may vote in person or may authorize another person or persons to vote or act for him by written proxy executed by the stockholder or his authorized agent and delivered to the Secretary of the corporation. No such proxy shall be voted or acted upon after three years from the date of its execution, unless the proxy expressly provides for a longer period.
9. Action at Meeting. When a quorum is present at any meeting, the holders of a majority of the stock present or represented and voting on a matter (or if there are two or more classes of stock entitled to vote as separate classes, then in the case of each such class, the holders of a majority of the stock of that class present or represented and voting on a matter) shall decide any matter to be voted upon by the stockholders at such meeting, except when a different vote is required by express provision of law, the Certificate of Incorporation or these By-Laws. Any election by stockholders shall be determined by a plurality of the votes cast by the stockholders entitled to vote at the election.
10. Nomination of Directors. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors. Nomination for election to the Board of Directors of the corporation at a meeting of stockholders may be made by the Board of Directors or by any stockholder of the corporation entitled to vote for the election of directors at such meeting who complies with the notice procedures set forth in this Section 10. Such nominations, other than those made by or on behalf of the Board of Directors, shall be made by notice in writing delivered or mailed by first class United States mail, postage prepaid, to the Secretary, and received not less than 60 days nor more than 90 days prior to such meeting; provided, however, that if less than 70 days’ notice or prior public disclosure of the date of the meeting is given to stockholders, such nomination shall have been mailed or delivered to the Secretary not later than the close of business on the 10th day following the date on which the notice of the meeting was mailed or such public disclosure was made, whichever occurs first. Such notice shall set forth (a) as to each proposed nominee (i) the name, age, business address and, if known, residence address of each such nominee, (ii) the principal occupation or employment of each such nominee, (iii) the number of shares of stock of the corporation which are beneficially owned by each such nominee, and (iv) any other information concerning the nominee that must be disclosed as to nominees in proxy solicitations pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person’s written consent to be named as a nominee and to serve as a director if elected); and (b) as to the stockholder giving the notice (i) the name and address, as they appear on the corporation’s books, of such stockholder and (ii) the class and number of shares of the corporation which are beneficially owned by such stockholder. The corporation may require any proposed nominee to furnish such other information as may reasonably be required by the corporation to determine the eligibility of such proposed nominee to serve as a director of the corporation.
The chairman of the meeting may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded.
11. Notice of Business at Annual Meetings. At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at

the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before an annual meeting by a stockholder. For business to
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be properly brought before an annual meeting by a stockholder, if such business relates to the election of directors of the corporation, the procedures in Section 10 of Article I must be complied with. If such business relates to any other matter, the stockholder must have given timely notice thereof in writing to the Secretary. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the corporation not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 70 days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the date on which such notice of the date of the meeting was mailed or such public disclosure was made, whichever occurs first. A stockholder’s notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the corporation’s books, of the stockholder proposing such business, (c) the class and number of shares of the corporation which are beneficially owned by the stockholder, and (d) any material interest of the stockholder in such business. Notwithstanding anything in these By-Laws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 11 and except that any stockholder proposal which complies with Rule 14a-8 of the proxy rules (or any successor provision) promulgated under the Securities Exchange Act of 1934, as amended, and is to be included in the corporation’s proxy statement for an annual meeting of stockholders shall be deemed to comply with the requirements of this Section 11.
The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 11, and if he should so determine, the chairman shall so declare to the meeting that any such business not properly brought before the meeting shall not be transacted.
12. Action without Meeting. Stockholders may not take any action by written consent in lieu of a meeting.
13. Organization. The Chairman of the Board, or in his absence the Vice Chairman of the Board, or the President, in the order named, shall call meetings of the stockholders to order, and shall act as chairman of such meeting, provided, however, that the Board of Directors may appoint any stockholder to act as chairman of any meeting in the absence of the Chairman of the Board. The Secretary of the corporation shall act as secretary at all meetings of the stockholders; but in the absence of the Secretary at any meeting of the stockholders, the presiding officer may appoint any person to act as secretary of the meeting.
ARTICLE II.—Directors
1. General Powers. The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors, who may exercise all of the powers of the corporation except as otherwise provided by law, the Certificate of Incorporation or these By-Laws. In the event of a vacancy in the Board of Directors, the remaining directors, except as otherwise provided by law, may exercise the powers of the full Board until the vacancy is filled.
2. Number; Election and Qualification. The number of directors which shall constitute the whole Board of Directors shall be determined by resolution of the Board of Directors, but in no event shall be less than three. The number of directors may be decreased at any time and from time to time by a majority of the directors then in office, but only to eliminate vacancies existing by reason of the death, resignation, removal or expiration of the term of one or more directors. The directors shall be elected at the annual meeting of stockholders by such stockholders as have the right to vote on such election. Directors need not be stockholders of the corporation.





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3. Classes of Directors. The Board of Directors shall be and is divided into three classes: Class I, Class II and Class III. No one class shall have more than one director more than any other class. If a fraction is contained in the quotient arrived at by dividing the designated number of directors by three, then, if such fraction is one-third, the extra director shall be a member of Class I, and if such fraction is two-thirds, one of the extra directors shall be a member of Class I and one of the extra directors shall be a member of Class II, unless otherwise provided from time to time by resolution adopted by the Board of Directors.
4. Terms of Office. Each director shall serve for a term ending on the date of the third annual meeting following the annual meeting at which such director was elected; provided, that each initial director in Class I shall serve for a term ending on the date of the annual meeting of stockholders in 1999; each initial director in Class II shall serve for a term ending on the date of the annual meeting of stockholders in 2000, and each initial director in Class III shall serve for a term ending on the date of the annual meeting of stockholders in 2001; and provided further, that the term of each director shall be subject to the election and qualification of his successor and to his earlier death, resignation or removal.
5. Allocation of Directors Among Classes in the Event of Increases or Decreases in the Number of Directors. In the event of any increase or decrease in the authorized number of directors, (i) each director then serving as such shall nevertheless continue as a director of the class of which he or she is a member and (ii) the newly created or eliminated directorships resulting from such increase or decrease shall be apportioned by the Board of Directors among the three classes of directors so as to ensure that no one class has more than one director more than any other class. To the extent possible, consistent with the foregoing rule, any newly created directorships shall be added to those classes whose terms of office are to expire at the latest dates following such allocation, and any newly eliminated directorships shall be subtracted from those classes whose terms of offices are to expire at the earliest dates following such allocation, unless otherwise provided from time to time by resolution adopted by the Board of Directors.
6. Quorum; Action at Meeting. A majority of the directors at any time in office shall constitute a quorum for the transaction of business. In the event one or more of the directors shall be disqualified to vote at any meeting, then the required quorum shall be reduced by one for each director so disqualified, provided that in no case shall less than one-third (1/3) of the number of directors fixed pursuant to Section 2 above constitute a quorum. If at any meeting of the Board of Directors there shall be less than such a quorum, a majority of those present may adjourn the meeting from time to time. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number is required by law, by the Certificate of Incorporation or these By-Laws.
7. Vacancies. Any vacancy in the Board of Directors, however occurring, including a vacancy resulting from an enlargement of the Board, shall be filled only by vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director. A director elected to fill a vacancy shall be elected to hold office until the next election of the class for which such director shall have been chosen, subject to the election and qualification of his successor and to his earlier death, resignation or removal.
8. Resignation. Any director may resign by delivering his written resignation to the corporation at its principal office or to the Chairman of the Board or Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.
9. Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place, either within or without the State of Delaware, as shall be determined from time to time by the Board of Directors; provided that any director who is absent when such a determination is made shall be given notice of the determination. A regular meeting of the Board of Directors may be held without notice immediately after and at the same place as the annual meeting of stockholders.


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10. Special Meetings. Special meetings of the Board of Directors may be held at any time and place, within or without the State of Delaware, designated in a call by the Chairman of the Board, President, two or more directors, or by one director in the event that there is only a single director in office.
11. Notice of Special Meetings. Notice of any special meeting of directors shall be given to each director by the Secretary or by the officer or one of the directors calling the meeting. Notice shall be duly given to each director (i) by giving notice to such director in person or by telephone at least 24 hours in advance of the meeting, (ii) by sending a telegram, telecopy or telex, electronic mail or delivering written notice by hand, to his last known business or home address at least 24 hours in advance of the meeting, or (iii) by mailing written notice to his last known business or home address at least 72 hours in advance of the meeting. A notice or waiver of notice of a meeting of the Board of Directors need not specify the purposes of the meeting.
12. Meetings by Telephone Conference Calls. Directors or any members of any committee designated by the directors may participate in a meeting of the Board of Directors or such committee by means of conference telephone, video conference or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting.
13. Action by Consent. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee of the Board of Directors may be taken without a meeting, if all members of the Board or committee, as the case may be, consent to the action in writing, and the written consents are filed with the minutes of proceedings of the Board or committee.
14. Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members of the committee present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors and subject to the provisions of the General Corporation Law of the State of Delaware, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation and may authorize the seal of the corporation to be affixed to all papers which may require it. Each such committee shall keep minutes and make such reports as the Board of Directors may from time to time request. Except as the Board of Directors may otherwise determine, any committee may make rules for the conduct of its business, but unless otherwise provided by the directors or in such rules, its business shall be conducted as nearly as possible in the same manner as is provided in these By-Laws for the Board of Directors.
15. Compensation of Directors. Directors may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings as the Board of Directors may from time to time determine. No such payment shall preclude any director from serving the corporation or any of its parent or subsidiary corporations in any other capacity and receiving compensation for such service.
ARTICLE III—Officers
1. Enumeration. The officers of the corporation shall consist of a President, a Secretary, a Treasurer and such other officers with such other titles as the Board of Directors shall determine, including a Chairman of the Board, a Vice Chairman of the Board, and one or more Vice Presidents, Assistant Treasurers, and Assistant Secretaries. The Board of Directors may appoint such other officers as it may deem appropriate.




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2. Election. The President, Treasurer and Secretary shall be elected annually by the Board of Directors at its first meeting following the annual meeting of stockholders. Other officers may be appointed by the Board of Directors at such meeting or at any other meeting.
3. Qualification. No officer need be a stockholder. Any two or more offices may be held by the same person.
4. Tenure. Except as otherwise provided by law, by the Certificate of Incorporation or by these By-Laws, each officer shall hold office until his successor is elected and qualified, unless a different term is specified in the vote choosing or appointing him, or until his earlier death, resignation or removal.
5. Resignation and Removal. Any officer may resign by delivering his or her written resignation to the corporation at its principal office or to the Chairman of the Board, President or Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.
Any officer may be removed at any time, with or without cause, by vote of a majority of the entire number of directors then in office.
Except as the Board of Directors may otherwise determine, no officer who resigns or is removed shall have any right to any compensation as an officer for any period following his resignation or removal, or any right to damages on account of such removal, whether his compensation be by the month or by the year or otherwise, unless such compensation is expressly provided in a duly authorized written agreement with the corporation.
6. Vacancies. The Board of Directors may fill any vacancy occurring in any office for any reason and may, in its discretion, leave unfilled for such period as it may determine any offices other than those of President, Treasurer and Secretary. Each such successor shall hold office for the unexpired term of his predecessor and until his successor is elected and qualified, or until his earlier death, resignation or removal.
7. Chairman of the Board and Vice Chairman of the Board. The Board of Directors may appoint a Chairman of the Board and may designate the Chairman of the Board as Chief Executive Officer. If the Board of Directors appoints a Chairman of the Board, he shall perform such duties and possess such powers as are assigned to him by the Board of Directors. Unless otherwise provided by the Board of Directors, he shall preside at all meetings of the stockholders, and if he is a director, at all meetings of the Board of Directors. If the Board of Directors appoints a Vice Chairman of the Board, he shall, in the absence or disability of the Chairman of the Board, perform the duties and exercise the powers of the Chairman of the Board and shall perform such other duties and possess such other powers as may from time to time be vested in him or her by the Board of Directors. The person designated as the Chief Executive Officer of the Company shall, subject to the direction of the Board of Directors, have general charge and supervision of the business of the corporation.
8. President. Unless the Board of Directors has designated the Chairman of the Board or another officer as Chief Executive Officer, the President shall be the Chief Executive Officer of the corporation. The President shall perform such other duties and shall have such other powers as the Chief Executive Officer or the Board of Directors may from time to time prescribe.
9. Vice Presidents. Any Vice President shall perform such duties and possess such powers as the Board of Directors or the Chief Executive Officer may from time to time prescribe. In the event of the absence, inability or refusal to act of the Chief Executive Officer, then, in the order determined by the Board of Directors, the President (if he is not the Chief Executive Officer) and the Vice President (or if there shall be more than one, the Vice Presidents) shall perform the duties of the Chief Executive Officer and when so performing shall have all the powers of and be subject to all the restrictions upon the Chief Executive Officer. The Board of Directors may assign to any Vice President the title of Executive Vice President, Senior Vice President or any other title selected by the Board of Directors.


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10. Secretary and Assistant Secretaries. The Secretary shall perform such duties and shall have such powers as the Board of Directors or the Chief Executive Officer may from time to time prescribe. In addition, the Secretary shall perform such duties and have such powers as are incident to the office of the secretary, including without limitation the duty and power to give notices of all meetings of stockholders and special meetings of the Board of Directors, to attend all meetings of stockholders and the Board of Directors and keep a record of the proceedings, to maintain a stock ledger and prepare lists of stockholders and their addresses as required, to be custodian of corporate records and the corporate seal and to affix and attest to the same on documents.
Any Assistant Secretary shall perform such duties and possess such powers as the Board of Directors, the Chief Executive Officer or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal to act of the Secretary, the Assistant Secretary (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Secretary. In the absence of the Secretary or any Assistant Secretary at any meeting of stockholders or directors, the person presiding at the meeting shall designate a temporary secretary to keep a record of the meeting.
11. Treasurer and Assistant Treasurers. The Treasurer shall perform such duties and shall have such powers as may from time to time be assigned to him or her by the Board of Directors or the Chief Executive Officer. In addition, the Treasurer shall perform such duties and have such powers as are incident to the office of treasurer, including without limitation the duty and power to keep and be responsible for all funds and securities of the corporation, to deposit funds of the corporation in depositories selected in accordance with these By-Laws, to disburse such funds as ordered by the Board of Directors, to make proper accounts of such funds, and to render as required by the Board of Directors statements of all such transactions and of the financial condition of the corporation.
The Assistant Treasurers shall perform such duties and possess such powers as the Board of Directors, the Chief Executive Officer or the Treasurer may from time to time prescribe. In the event of the absence, inability or refusal to act of the Treasurer, the Assistant Treasurer (or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Treasurer.
12. Salaries. Officers of the corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed or allowed from time to time by the Board of Directors.
ARTICLE IV.—Capital Stock
1. Issuance of Stock. Unless otherwise voted by the stockholders and subject to the provisions of the Certificate of Incorporation, the whole or any part of any unissued balance of the authorized capital stock of the corporation or the whole or any part of any unissued balance of the authorized capital stock of the corporation held in its treasury may be issued, sold, transferred or otherwise disposed of by vote of the Board of Directors in such manner, for such consideration and on such terms as the Board of Directors may determine.
2. Certificates of Stock. Every holder of stock of the corporation shall be entitled to have a certificate, in such form as may be prescribed by law and by the Board of Directors, certifying the number and class of shares owned by him or her in the corporation. Each such certificate shall be signed by, or in the name of the corporation by, the Chairman or Vice Chairman, if any, of the Board of Directors, or the President or a Vice President, and the Treasurer or any Assistant Treasurer, or the Secretary or an Assistant Secretary of the corporation. Any or all of the signatures on the certificate may be a facsimile.
Each certificate for shares of stock which are subject to any restriction on transfer pursuant to the Certificate of Incorporation, the By-Laws, applicable securities laws or any agreement among any number of stockholders or




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among such holders and the corporation shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restriction.
3. Transfers. Except as otherwise established by rules and regulations adopted by the Board of Directors, and subject to applicable law, shares of stock may be transferred on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or the authenticity of signature as the corporation or its transfer agent may reasonably require. Except as may be otherwise required by law, by the Certificate of Incorporation or by these By-Laws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect to such stock, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the corporation in accordance with the requirements of these By-Laws.
4. Lost, Stolen or Destroyed Certificates. The corporation may issue a new certificate of stock in place of any previously issued certificate alleged to have been lost, stolen, or destroyed, upon such terms and conditions as the Board of Directors may prescribe, including the presentation of reasonable evidence of such loss, theft or destruction and the giving of such indemnity as the Board of Directors may require for the protection of the corporation or any transfer agent or registrar.
5. Record Date. The Board of Directors may fix in advance a date as a record date for the determination of the stockholders entitled to notice of or to vote at any meeting of stockholders, or entitled to receive payment of any dividend or other distribution or allotment of any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action. Such record date shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action to which such record date relates.
If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day before the day on which notice is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is held. The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to such purpose.
A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
ARTICLE V.—General Provisions
1. Fiscal Year. Except as from time to time otherwise designated by the Board of Directors, the fiscal year of the corporation shall begin on the first day of July of each year and end on the last day of June of each year.
2. Corporate Seal. The corporate seal shall be in such form as shall be approved by the Board of Directors.
3. Waiver of Notice. Whenever any notice whatsoever is required to be given by law, by the Certificate of Incorporation or by these By-Laws, a waiver of such notice either in writing signed by the person entitled to such notice or such person’s duly authorized attorney, or by telecopy or any other available method, whether before, at or after the time stated in such waiver, or the appearance of such person or persons at such meeting in person or by proxy, shall be deemed equivalent to such notice.
4. Voting of Securities. Except as the directors may otherwise designate, the Chairman of the Board or Treasurer may waive notice of, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact for this corporation (with or without power of substitution) at any meeting of stockholders or shareholders of any other corporation or organization, the securities of which may be held by this corporation.

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5. Evidence of Authority. A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by the stockholders, directors, a committee or any officer or representative of the corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action.
6. Certificate of Incorporation. All references in these By-Laws to the Certificate of Incorporation shall be deemed to refer to the Amended and Restated Certificate of Incorporation of the corporation, as amended and in effect from time to time.
7. Transactions with Interested Parties. No contract or transaction between the corporation and one or more of the directors or officers, or between the corporation and any other corporation, partnership, association, or other organization in which one or more of the directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or a committee of the Board of Directors which authorizes the contract or transaction or solely because his or their votes are counted for such purpose, if:
a. The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum;
b. The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or
c. The contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee of the Board of Directors, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
8. Severability. Any determination that any provision of these By-Laws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these By-Laws.
9. Pronouns. All pronouns used in these By-Laws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.
ARTICLE VI.—Amendments
1. By the Board of Directors. These By-Laws may be altered, amended or repealed or new by-laws may be adopted by the affirmative vote of a majority of the directors present at any regular or special meeting of the Board of Directors at which a quorum is present.
2. By the Stockholders. Subject to the following paragraph, these By-Laws may be altered, amended or repealed or new by-laws may be adopted by the affirmative vote of the holders of a majority of the shares of the capital stock of the corporation issued and outstanding and entitled to vote at any regular or special meeting of stockholders, provided notice of such alteration, amendment, repeal or adoption of new by-laws shall have been stated in the notice of such regular or special meeting.
3. Certain Provisions. Notwithstanding any other provision of law, the Certificate of Incorporation or these By-Laws (including the preceding paragraph), and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least seventy-five percent (75%) of the votes which all the stockholders would be entitled to cast in any annual election of directors or class of directors shall be required to amend or repeal, or to adopt any provisions inconsistent with, Sections 2, 3, 10, 11, 12 or 13 of Article I, Article II or Article VI of these By-Laws.

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AMENDMENT NO. 1
TO
AMENDED AND RESTATED BY-LAWS
OF
BOTTOMLINE TECHNOLOGIES (DE), INC.
Article IV, Section 2 of the Amended and Restated By-Laws of Bottomline Technologies (de), Inc. (the “By-Laws”) be and hereby is deleted in its entirety and replaced with the following:
“2. Stock Certificates; Uncertificated Shares. The shares of the corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Every holder of stock of the corporation represented by certificates shall be entitled to have a certificate, in such form as may be prescribed by law and by the Board of Directors, representing the number of shares held by such holder registered in certificate form. Each such certificate shall be signed in a manner that complies with Section 158 of the General Corporation Law of the State of Delaware.
Each certificate for shares of stock which are subject to any restriction on transfer pursuant to the Certificate of Incorporation, these By-Laws, applicable securities laws or any agreement among any number of stockholders or among such holders and the corporation shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restriction.
If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of each certificate representing shares of such class or series of stock, provided that in lieu of the foregoing requirements there may be set forth on the face or back of each certificate representing shares of such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests a copy of the full text of the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.
Within a reasonable time after the issuance or transfer of uncertificated stock, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Sections 151, 202(a) or 218(a) of the General Corporation Law of the State of Delaware or, with respect to Section 151 of General Corporation Law of the State of Delaware, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.”
Article IV, Section 3 of the By-Laws be and hereby is deleted in its entirety and replaced with the following:
“3. Transfers. Shares of stock of the corporation shall be transferable in the manner prescribed by law and in these By-Laws. Transfers of shares of stock of the corporation shall be made only on the books of the corporation or by transfer agents designated to transfer shares of stock of the corporation. Subject to applicable law, shares of stock represented by certificates shall be transferred only on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or the authenticity of signature as the corporation or its transfer agent may reasonably require. Except as may be otherwise required by law, by the Certificate of Incorporation or by these By-Laws, the corporation shall be entitled to treat the record


10




holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect to such stock, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the corporation in accordance with the requirements of these By-Laws.”
Except as aforesaid, the By-Laws shall remain in full force and effect.
Adopted by the Board of Directors on August 23, 2007
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Exhibit 31.1
CERTIFICATIONS
I, Robert A. Eberle, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Bottomline Technologies, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2020 By: /s/ ROBERT A. EBERLE
Robert A. Eberle
President and Chief Executive Officer
(Principal Executive Officer)



Exhibit 31.2
CERTIFICATIONS
I, Richard D. Booth, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Bottomline Technologies, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2020 By:           /s/ RICHARD D. BOOTH
                    Richard D. Booth
            Chief Financial Officer and Treasurer
       (Principal Financial and Accounting Officer)



Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report on Form 10-Q of Bottomline Technologies, Inc. (the “Company”) for the period ended September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Robert A. Eberle, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 9, 2020 By:
/s/ ROBERT A. EBERLE
Robert A. Eberle
President and Chief Executive Officer
(Principal Executive Officer)



Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report on Form 10-Q of Bottomline Technologies, Inc. (the “Company”) for the period ended September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Richard D. Booth, Chief Financial Officer and Treasurer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 9, 2020 By:           /s/ RICHARD D. BOOTH
                    Richard D. Booth
            Chief Financial Officer and Treasurer
       (Principal Financial and Accounting Officer)