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, 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.

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 outstanding shares of the Registrant’s common stock as of ~~January 21,~~July 22, 2022 was ~~66,864,899~~68,018,785 shares.

	December 31, 2021			March 31, 2021			June 30, 2022			March 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	49,429		$	73,295		$	40,361		$	59,829
Restricted cash and cash equivalents		4,921			5,280			8,054			6,918
Accounts receivable, net		70,080			77,541			77,279			76,057
Contract assets		24,246			19,481			25,464			25,157
Income taxes receivable		6,966			765			7,367			6,507
Prepaid expenses and other current assets		30,098			31,282			34,011			37,102
Total current assets		185,740			207,644			192,536			211,570
Equipment and improvements, net		10,818			14,539			8,326			9,120
Capitalized software costs, net		41,719			41,474			47,602			43,958
Operating lease assets		13,047			18,446			9,707			11,316
Deferred income taxes, net		19,439			19,474			19,187			19,259
Contract assets, net of current		1,997			1,976			1,729			1,910
Intangibles, net		27,402			36,700			21,817			24,303
Goodwill		267,212			267,212			267,212			267,212
Other assets		37,960			37,021			39,879			39,026
Total assets	$	605,334		$	644,486		$	607,995		$	627,674
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	15,232		$	11,378		$	15,042		$	9,125
Contract liabilities		54,879			52,863			63,094			61,280
Accrued compensation and related benefits		42,019			50,374			25,967			48,736
Income taxes payable		405			584			363			99
Operating lease liabilities		8,437			12,735			7,946			8,089
Other current liabilities		49,436			52,699			45,187			53,533
Total current liabilities		170,408			180,633			157,599			180,862
Deferred compensation		7,671			6,620			7,181			7,230
Operating lease liabilities, net of current		12,781			18,453			9,794			11,934
Other noncurrent liabilities		3,331			7,136			4,562			4,570
Total liabilities		194,191			212,842			179,136			204,596
Commitments and contingencies (Note 15)
Shareholders' equity:
Common stock, $0.01 par value; authorized 100,000 shares; issued and outstanding 66,865 and 67,069 shares at December 31, 2021 and March 31, 2021, respectively		690			671
Treasury stock, at cost, 2,170 shares at December 31, 2021		(35,874	)		—
Common stock, $0.01 par value; authorized 100,000 shares; issued and outstanding 68,064 and 67,075 shares at June 30, 2022 and March 31, 2022, respectively								704			692
Treasury stock, at cost, 2,318 shares and 2,170 shares at June 30, 2022 and March 31, 2022, respectively								(38,379	)		(35,874	)
Additional paid-in capital		318,356			304,263			337,071			329,917
Accumulated other comprehensive loss		(1,933	)		(1,924	)		(1,937	)		(1,909	)
Retained earnings		129,904			128,634			131,400			130,252
Total shareholders' equity		411,143			431,644			428,859			423,078
Total liabilities and shareholders' equity	$	605,334		$	644,486		$	607,995		$	627,674

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Three Months Ended December 31,						Nine Months Ended December 31,						Three Months Ended June 30,
	2021			2020			2021			2020			2022			2021
Revenues:
Recurring	$	134,496		$	128,243		$	402,486		$	373,456		$	139,759		$	132,381
Software, hardware, and other non-recurring		15,225			13,509			42,605			39,177			13,543			13,703
Total revenues		149,721			141,752			445,091			412,633			153,302			146,084
Cost of revenue:
Recurring		58,033			54,204			172,312			157,539			62,244			57,160
Software, hardware, and other non-recurring		7,978			6,800			23,085			18,924			10,676			7,497
Amortization of capitalized software costs and acquired intangible assets		8,193			9,320			24,246			29,180			7,134			8,084
Total cost of revenue		74,204			70,324			219,643			205,643			80,054			72,741
Gross profit		75,517			71,428			225,448			206,990			73,248			73,343
Operating expenses:
Selling, general and administrative		47,238			48,972			159,615			131,659			49,034			48,486
Research and development costs, net		19,390			18,197			57,229			54,111			21,795			19,321
Amortization of acquired intangible assets		881			1,112			2,643			3,336			705			881
Impairment of assets		—			2,215			1,577			2,215			524			382
Restructuring costs		—			—			539			2,562			—			539
Total operating expenses		67,509			70,496			221,603			193,883			72,058			69,609
Income from operations		8,008			932			3,845			13,107			1,190			3,734
Interest income		50			9			79			27			46			12
Interest expense		(321	)		(631	)		(958	)		(2,873	)		(330	)		(317	)
Other expense, net		(9	)		(15	)		(43	)		(17	)		(5	)		(22	)
Income before provision for (benefit of) income taxes		7,728			295			2,923			10,244			901			3,407
Provision for (benefit of) income taxes		2,535			(169	)		1,653			149			(247	)		559
Net income	$	5,193		$	464		$	1,270		$	10,095		$	1,148		$	2,848
Other comprehensive income:
Foreign currency translation, net of tax		(21	)		171			(9	)		260			(28	)		(38	)
Comprehensive income	$	5,172		$	635		$	1,261		$	10,355		$	1,120		$	2,810
Net income per share:
Basic	$	0.08		$	0.01		$	0.02		$	0.15		$	0.02		$	0.04
Diluted	$	0.08		$	0.01		$	0.02		$	0.15		$	0.02		$	0.04
Weighted-average shares outstanding:
Basic		67,958			66,943			67,514			66,644			67,588			67,175
Diluted		68,167			67,140			67,851			66,649			68,283			67,799

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Nine Months Ended December 31, 2021																				Three Months Ended June 30, 2022
									Additional						Accumulated Other			Total											Additional					Accumulated Other			Total
	Common Stock					Treasury			Paid-in			Retained			Comprehensive			Shareholders'			Common Stock					Treasury			Paid-in			Retained		Comprehensive			Shareholders'
	Shares			Amount		Stock			Capital			Earnings			Loss			Equity			Shares			Amount		Stock			Capital			Earnings		Loss			Equity
Balance, March 31, 2021		67,069		$	671	$	-		$	304,263		$	128,634		$	(1,924	)	$	431,644
Balance, March 31, 2022																						67,075		$	692	$	(35,874	)	$	329,917		$	130,252	$	(1,909	)	$	423,078
Common stock issued under stock plans, net of shares withheld for taxes		293			3		—			(2,301	)		—			—			(2,298	)		1,137			12		—			(1,612	)		—		—			(1,600	)
Stock-based compensation		—			—		—			6,412			—			—			6,412			—			—		—			8,766			—		—			8,766
Repurchase of common stock⁽¹⁾																						(148	)		—		(2,505	)		—			—		—			(2,505	)
Components of other comprehensive income:
Translation adjustments		—			—		—			—			—			(38	)		(38	)		—			—		—			—			—		(28	)		(28	)
Net income		—			—		—			—			2,848			—			2,848			—			—		—			—			1,148		—			1,148
Balance, June 30, 2021		67,362			674		—			308,374			131,482			(1,962	)		438,568
Common stock issued under stock plans, net of shares withheld for taxes		1,032			10		—			(1,804	)		—			—			(1,794	)
Stock-based compensation		—			—		—			5,223			—			—			5,223
Components of other comprehensive income (loss):
Translation adjustments		—			—		—			—			—			50			50
Net income (loss)		—			—		—			—			(6,771	)		—			(6,771	)
Balance, September 30, 2021		68,394			684		—			311,793			124,711			(1,912	)		435,276
Common stock issued under stock plans, net of shares withheld for taxes		641			6					(487	)		—			—			(481	)
Stock-based compensation		—			—		—			7,050			—			—			7,050
Repurchase of common stock⁽¹⁾		(2,170	)		—		(35,874	)		—			—			—			(35,874	)
Components of other comprehensive income:
Translation adjustments		—			—		—			—			—			(21	)		(21	)
Net income		—			—		—			—			5,193			—			5,193
Balance, December 31, 2021		66,865		$	690	$	(35,874	)	$	318,356		$	129,904		$	(1,933	)	$	411,143
Balance, June 30, 2022																						68,064			704		(38,379	)		337,071			131,400		(1,937	)		428,859

⁽¹⁾~~Weighted-average repurchase price (dollars per share) for the three months ended December 31, 2021 was $16.53.~~

	Three Months Ended June 30, 2021
							Additional					Accumulated Other			Total
	Common Stock				Treasury		Paid-in			Retained		Comprehensive			Shareholders'
	Shares		Amount		Stock		Capital			Earnings		Loss			Equity
Balance, March 31, 2021		67,069	$	671	$	-	$	304,263		$	128,634	$	(1,924	)	$	431,644
Common stock issued under stock plans, net of shares withheld for taxes		293		3		—		(2,301	)		—		—			(2,298	)
Stock-based compensation		—		—		—		6,412			—		—			6,412
Components of other comprehensive income:
Translation adjustments		—		—		—		—			—		(38	)		(38	)
Net income		—		—		—		—			2,848		—			2,848
Balance, June 30, 2021		67,362		674		—		308,374			131,482		(1,962	)		438,568

Nine Months Ended December 31, 2020

Additional

Accumulated Other

Total

Common Stock

Paid-in

Retained

Comprehensive

Shareholders'

Shares

Amount

Capital

Earnings

Loss

Equity

Balance, March 31, 2020

66,134

$
661

$
282,857

$
119,119

$
(2,143
)

$
400,494

Common stock issued under stock plans, net of shares withheld for taxes

535

6

(1,414
)

—

—

(1,408
)
Stock-based compensation

—

—

5,393

—

—

5,393

Components of other comprehensive income (loss):

Translation adjustments

—

—

—

—

(13
)

(13
)
Net income (loss)

—

—

—

(824
)

—

(824
)
Balance, June 30, 2020

66,669

667

286,836

118,295

(2,156
)

403,642

Common stock issued under stock plans, net of shares withheld for taxes

65

—

(45
)

—

—

(45
)
Stock-based compensation

—

—

5,437

—

—

5,437

Components of other comprehensive income:

Translation adjustments

—

—

—

—

102

102

Net income

—

—

—

10,455

—

10,455

Balance, September 30, 2020

66,734

667

292,228

128,750

(2,054
)

419,591

Common stock issued under stock plans, net of shares withheld for taxes

268

3

(450
)

—

—

(447
)
Stock-based compensation

—

—

5,933

—

—

5,933

Components of other comprehensive income:

Translation adjustments

—

—

—

—

171

171

Net income

—

—

—

464

—

464

Balance, December 31, 2020

67,002

$
670

$
297,711

$
129,214

$
(1,883
)

$
425,712

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

	Nine Months Ended December 31,						Three Months Ended June 30,
	2021			2020			2022			2021
Cash flows from operating activities:
Net income	$	1,270		$	10,095		$	1,148		$	2,848
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of capitalized software costs		17,592			14,828			5,354			5,866
Amortization of debt issuance costs		381			532			127			127
Amortization of other intangibles		9,298			17,688			2,486			3,099
Change in fair value of contingent consideration		7			75
Deferred income taxes		35			(42	)		—			28
Depreciation		5,406			6,088			1,292			2,108
Excess tax deficiency from share-based compensation		834			870
Excess tax benefit from share-based compensation								(411	)		(176	)
Impairment of assets		1,577			2,215			524			382
Loss on disposal of equipment and improvements		77			27			41			38
Loss on foreign currency exchange rates								6			—
Non-cash operating lease costs		4,455			5,153			914			1,628
Provision for bad debts		1,142			2,044			241			639
Share-based compensation		18,685			16,763			8,766			6,412
Changes in assets and liabilities:
Accounts receivable		6,319			1,221			(1,464	)		3,407
Contract assets		(4,786	)		(4,058	)		(126	)		(919	)
Accounts payable		3,592			(2,795	)		5,829			(4,334	)
Contract liabilities		2,016			(8,131	)		1,814			(582	)
Accrued compensation and related benefits		(8,355	)		16,210			(22,668	)		(21,964	)
Income taxes		(7,214	)		(3,494	)		(191	)		464
Deferred compensation		1,051			1,324			(49	)		743
Operating lease liabilities		(10,062	)		(10,043	)		(2,085	)		(2,676	)
Other assets and liabilities		(6,684	)		9,408			(6,193	)		3,175
Net cash provided by operating activities		36,636			75,978
Net cash provided by (used in) operating activities								(4,645	)		313
Cash flows from investing activities:
Additions to capitalized software costs		(17,837	)		(18,914	)		(8,998	)		(5,538	)
Additions to equipment and improvements		(2,037	)		(1,546	)		(455	)		(1,002	)
Acquisition related working capital adjustment payments		—			(206	)
Net cash used in investing activities		(19,874	)		(20,666	)		(9,453	)		(6,540	)
Cash flows from financing activities:
Proceeds from line of credit		—			50,000
Repayments on line of credit		—			(150,000	)
Proceeds from issuance of shares under employee plans		877			1,997			2,068			671
Repurchase of common stock		(35,874	)		—			(2,505	)		—
Payment of contingent consideration related to acquisitions		(540	)		—
Payments for taxes related to net share settlement of equity awards		(5,450	)		(3,897	)		(3,668	)		(2,969	)
Net cash used in financing activities		(40,987	)		(101,900	)		(4,105	)		(2,298	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash								(129	)		—
Net decrease in cash, cash equivalents, and restricted cash		(24,225	)		(46,588	)		(18,332	)		(8,525	)
Cash, cash equivalents, and restricted cash at beginning of period		78,575			140,319			66,747			78,575
Cash, cash equivalents, and restricted cash at end of period	$	54,350		$	93,731		$	48,415		$	70,050

Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	8,182		$	2,896		$	360		$	294
Cash refunds from income taxes		119			129			9			19
Cash paid for interest		382			2,375			—			—
Cash paid for amounts included in the measurement of operating lease liabilities		10,861			11,561			2,308			2,964
Operating lease assets obtained in exchange for operating lease liabilities		197			3,107			—			—
Accrued purchases of equipment and improvements		262			91			96			169

The accompanying notes are an integral part of these condensed consolidated financial statements.

Principles of Consolidation. The condensed consolidated financial statements include the accounts of NextGen Healthcare, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). Each of the terms “we,” “us,” or “our” as used herein refers collectively to the Company, unless otherwise stated. All intercompany accounts and transactions have been eliminated.

Basis of Presentation. The accompanying unaudited condensed consolidated financial statements as of ~~December 31, 2021~~June 30, 2022 and for the three ~~and nine~~ months ended ~~December 31, 2021~~June 30, 2022 have been prepared in accordance with the requirements of Quarterly Report on Form 10-Q and Article 10 of the Securities and Exchange Commission Regulation S-X and therefore do not include all information and notes which would be presented were such condensed consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements presented in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2021.~~2022. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments which are necessary for a fair statement of the results of operations and cash flows for the periods presented. The results of operations for such interim periods are not necessarily indicative of results of operations to be expected for the full year.

Certain prior period amounts have been reclassified to conform to current period presentation. References to amounts in the condensed consolidated financial statement sections are in thousands, except shares and per share data, unless otherwise specified.

~~Recently Adopted Accounting Pronouncements.~~Use of Estimates. ~~Recently adopted accounting pronouncements~~We evaluate our estimates and assumptions on an ongoing basis. We base our estimates on historical experience and on various other assumptions that are ~~discussed below or in~~believed to be reasonable under the ~~notes, where applicable.~~

~~In December 2019,~~circumstances, the ~~Financial Accounting Standards Board ("FASB") issued ASU 2019-12,~~ ~~Income Taxes (Topic 740): Simplifying~~results of which form the ~~Accounting~~basis for ~~Income Taxes~~ ~~(“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to~~making judgments about the ~~general principles in Topic 740~~carrying values of assets and ~~also clarifies~~liabilities and ~~amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years,~~recording revenue and ~~interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim~~expenses during the period. ~~The adoption~~Our estimates and assumptions consider the potential economic implications of ~~ASU 2019-12 on April 1, 2021 did not have a material impact~~COVID-19 on our ~~condensed consolidated financial statements.~~critical and significant accounting estimates.

Recent Accounting Standards Not Yet Adopted. Recent accounting pronouncements requiring implementation in current or future periods are discussed below or in the notes, where applicable.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”), which clarifies the application of certain optional expedients and exceptions. Topic 848 may be applied prospectively through December 31, 2022. We are currently evaluating the effect that ASU 2020-04 may have on our contracts that reference LIBOR, such as our amended and restated revolving credit agreement (see Note 9). We have not elected to apply any of the provisions of Topic 848, and we are currently in the process of evaluating the potential impact of adoption of this updated authoritative guidance on our condensed consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers and other similar contracts that are accounted for in accordance with ASU 2016-10, Revenue from Contracts with Customers (Topic 606), at fair value on the acquisition date. ASU 2021-08 requires acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The amendments in ASU 2021-08 should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption is permitted, including adoption in an interim period. ASU 2021-08 is effective for us in the first quarter of fiscal 2024. We are currently in the process of evaluating the potential impact of adoption of this updated authoritative guidance on our condensed consolidated financial statements, which will also depend on the magnitude of any potential future business combinations.

We do not believe that any other recently issued, but not yet effective accounting standards, if adopted, would have a material impact on our condensed consolidated financial statements.

We generate revenue from sales of licensing rights and subscriptions to our software solutions, hardware and third-party software products, support and maintenance, managed services, ~~EDI~~transactional and data services, and other non-recurring services, including implementation, training, and consulting services. Our contracts with customers may include multiple performance obligations that consist of various combinations of our software solutions and related services, which are generally capable of being distinct and accounted for as separate performance obligations.

The total transaction price is allocated to each performance obligation within a contract based on estimated standalone selling prices. We generally determine standalone selling prices based on the prices charged to customers, except for certain software licenses that are based on the residual approach because their standalone selling prices are highly variable and certain maintenance customers that are based on substantive renewal rates. In instances where standalone selling price is not sufficiently observable, such as RCM services and software licenses included in our RCM arrangements, we estimate standalone selling price utilizing an expected cost plus a margin approach. When standalone selling prices are not observable, significant judgment is required in estimating the standalone selling price for each performance obligation.

Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration that we expect to be entitled to in exchange for those goods or services.

We exclude sales tax from the measurement of the transaction price and record revenue net of taxes collected from customers and subsequently remitted to governmental authorities.

The following table presents our revenues disaggregated by our major revenue categories and by occurrence:

	Three Months Ended December 31,				Nine Months Ended December 31,				Three Months Ended June 30,
	2021		2020		2021		2020		2022		2021
Recurring revenues:
Subscription services	$	41,158	$	37,958	$	120,581	$	110,185	$	42,759	$	38,284
Support and maintenance		38,246		37,914		115,736		114,537		39,138		38,486
Managed services		28,861		27,395		87,798		76,106		30,645		27,908
Electronic data interchange and data services		26,231		24,976		78,371		72,628
Transactional and data services										27,217		27,703
Total recurring revenues		134,496		128,243		402,486		373,456		139,759		132,381

Software, hardware, and other non-recurring revenues:
Software license and hardware		8,920		7,908		24,202		20,662		6,199		7,214
Other non-recurring services		6,305		5,601		18,403		18,515		7,344		6,489
Total software, hardware and other non-recurring revenues		15,225		13,509		42,605		39,177		13,543		13,703

Total revenues	$	149,721	$	141,752	$	445,091	$	412,633	$	153,302	$	146,084

Recurring revenues consists of subscription services, support and maintenance, managed services, and ~~EDI~~transactional and data services. Software, hardware, and other non-recurring revenues consists of revenue from sales of software license and hardware and certain non-recurring services, such as implementation, training, and consulting performed for clients who use our products.

We generally recognize revenue for our most significant performance obligations as follows:

Subscription services. Performance obligations involving subscription services, which include annual libraries, are satisfied over time as the customer simultaneously receives and consumes the benefits of the services throughout the contract period. Our subscription services primarily include our software-as-a-service (“SaaS”) based offerings, such as our electronic health records and practice management, mobile, patient portal, and population health management solutions. Our SaaS-based offerings may include multiple goods and services, such as providing access to our technology-based solutions together with our managed cloud hosting services. These offerings are concurrently delivered with the same pattern of transfer to our customers and are accounted for as a single performance obligation because the technology-based solutions and other goods and services included within our overall SaaS-based offerings are each individually not capable of being distinct as the customer receives benefits based on the combined offering. Our annual libraries primarily consist of providing stand-ready access to certain content, knowledgebase, databases, and SaaS-based educational tools, which are frequently updated to meet the most current standards and requirements, to be utilized in conjunction with our core solutions. We recognize revenue related to these subscription services, including annual libraries, ratably over the respective noncancelable contract term.

Support and maintenance. Performance obligations involving support and maintenance are satisfied over time as the customer simultaneously receives and consumes the benefits of the maintenance services provided. Our support and maintenance services may consist of separate performance obligations, such as unspecified upgrades or enhancements and technical support, which are

considered stand-ready in nature and can be offered at various points during the service period. Since the efforts associated with

the combined support and maintenance services are rendered concurrently and provided evenly throughout the service period, we consider the series of support and maintenance services to be a single performance obligation. Therefore, we recognize revenue related to these services ratably over the respective noncancelable contract term.

Managed services. Managed services consist primarily of RCM and related services, but also includes our hosting services, which we refer to as managed cloud services, transcription ~~services, patient pay~~ services, and certain other recurring services. Performance obligations associated with RCM services are satisfied over time as the customer simultaneously receives and consumes the benefits of the services executed throughout the contract period. The majority of service fees under our RCM arrangements are variable consideration contingent upon collections by our clients. We estimate the variable consideration which we expect to be entitled to over the noncancelable contract term associated with our RCM service arrangements. The estimate of variable consideration included in the transaction price typically involves estimating the amounts we will ultimately collect on behalf of our clients and the relative fee we charge that is generally calculated as a percentage of those collections. Inputs to these estimates include, but are not limited to, historical service fees and collections amounts, timing of historical collections relative to the timing of when claims are submitted by our clients to their respective payers, macroeconomic trends, and anticipated changes in the number of providers. Significant judgement is required when estimating the total transaction price based on the variable consideration. We may apply certain constraints when appropriate whereby we include in the transaction price estimated variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Such estimates are assessed at the contract level. RCM and related services may not be rendered evenly over the contract period as the timing of services are based on customer collections, which may vary throughout the service period. We recognize revenue for RCM based on the amount of collections received throughout the contract term as it most closely depicts our efforts to transfer our service obligations to the customer. Our managed cloud services represent a single performance obligation to provide cloud hosting services to our customers and related revenue is recognized ratably over the respective noncancelable contract term. Performance obligations related to the transcription services ~~patient pay services,~~ and other recurring services are satisfied as the corresponding services are provided and revenue is recognized as such services are rendered.

~~Electronic data interchange~~Transactional and data services. Performance obligations related to ~~EDI~~transactional and data services, including EDI, patient pay, and other transaction processing services are satisfied at the point in time the services are rendered or delivered. The transfer of control occurs when the ~~data services~~transactional and ~~transaction processing~~data services are delivered and the customer receives the benefits from the services provided. Revenue is recognized as such services are rendered.

Beginning in fiscal year 2023, to align the presentation of disaggregated revenue with the manner in which management reviews such information, the presentation of disaggregated revenues by major revenue categories was revised to reclassify revenues related to patient pay services and certain other services from the managed services category into the transactional and data services category, which replaced the prior EDI and data services category. The prior period presentation of revenues disaggregated by major revenue categories and by occurrence above has been reclassified to conform with current period presentation.

Software license and hardware. Software license and hardware are considered point-in-time performance obligations as control is transferred to customers upon the delivery of the software license and hardware. Our software licenses are considered functional licenses, and revenue recognition generally occurs on the date of contract execution as the customer is provided with immediate access to the license. We generally determine the amount of consideration allocated to the software license performance obligation using the residual approach, except for certain RCM arrangements where the amount allocated to the software license performance obligation is determined based on estimated relative standalone selling prices. For hardware, we recognize revenue upon transfer of such hardware or devices to the customer.

Other non-recurring services. Performance obligations related to other non-recurring services, including implementation, training, and consulting services, are generally satisfied as the corresponding services are provided. Once the services have been provided to the customer, the transfer of control has occurred. Therefore, we recognize revenue as such services are rendered.

As of ~~December 31,~~June 30, 2022, the aggregate amount of transaction price related to remaining unsatisfied or partially unsatisfied performance obligations over the respective noncancelable contract term was approximately $605,700, of which we expect to recognize approximately 8% as services are rendered or goods are delivered, 52% over the next 12 months, and the remainder thereafter.

As of June 30, 2021, the aggregate amount of transaction price related to remaining unsatisfied or partially unsatisfied performance obligations over the respective noncancelable contract term was approximately ~~$563,000,~~$551,200, of which we expect to recognize approximately 10% as services are rendered or goods are delivered,~~, 51% over the next 12 months, and the remainder thereafter.~~

As of December 31, 2020, the aggregate amount of transaction price related to remaining unsatisfied or partially unsatisfied performance obligations over the respective noncancelable contract term was approximately $518,000, of which we expect to recognize approximately 12% as services are rendered or goods are delivered, 51% 54% over the next 12 months, and the remainder thereafter.

Contract balances result from the timing differences between our revenue recognition, invoicing, and cash collections. Such contract balances include accounts receivables, contract assets and liabilities, and other customer deposits and liabilities balances. Accounts receivables include invoiced amounts where the right to receive payment is unconditional and only subject to the passage of time. Contract assets, consisting of unbilled receivables, include amounts where revenue recognized exceeds the amount

invoiced to the customer and the right to payment is not solely subject to the passage of time. Contract assets are generally associated with our sales of software licenses, but may also be associated with other performance obligations such as subscription services, support and maintenance, annual libraries, and professional services, where control has been transferred to our customers but the associated payments are based on future customer collections (in the case of our RCM service arrangements) or based on future milestone payment due dates. In such instances, the revenue recognized may exceed the amount invoiced to the

customer and such balances are included in contract assets since our right to receive payment is not unconditional, but rather is conditional upon customer collections or the continued functionality of the software and our ongoing support and maintenance obligations. Contract liabilities consist mainly of fees invoiced or paid by our clients for which the associated services have not been performed and revenues have not been recognized. Contract assets and contract liabilities are reported in a net position on an individual contract basis at the end of each reporting period. Contract assets are classified as current or long-term on our condensed consolidated balance sheets based on the timing of when we expect to complete the related performance obligations and invoice the customer. Contract liabilities are classified as current on our condensed consolidated balance sheets since the revenue recognition associated with the related customer payments and invoicing is expected to occur within the next twelve months.

During the three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020,~~ we recognized ~~$17,672~~$17,724 and $17,469, respectively, of revenues that were included in the contract liability balance or invoiced to customers since the beginning of the corresponding periods. During the nine months ended December 31, 2021 and 2020, we recognized $53,060 and $57,614,$17,781, respectively, of revenues that were included in the contract liability balance or invoiced to customers since the beginning of the corresponding periods.

We capitalize all incremental costs of obtaining a contract with a customer to the extent that such costs are directly related to a contract and expected to be recoverable. Our sales commissions and related sales incentives are considered incremental costs requiring capitalization. Capitalized contract costs are amortized to expense utilizing a method that is consistent with the transfer of the related goods or services to the customer. The amortization period ranges from less than one year up to five years, based on the period over which the related goods and services are transferred, including consideration of the expected customer renewals and the related useful lives of the products.

Capitalized commissions costs were ~~$30,746~~$33,885 as of ~~December 31, 2021,~~June 30, 2022, of which ~~$10,926~~$11,914 is classified as current and included as prepaid expenses and other current assets and ~~$19,820~~$21,971 is classified as long-term and included within other assets on our condensed consolidated balance sheets, based on the expected timing of expense recognition. During the three months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~, we recognized ~~$3,134~~$3,487 and ~~$3,069, respectively, of commissions expense. During the~~ ~~nine months ended December 31, 2021 and 2020, we recognized $8,694 and $7,946,~~$2,926, respectively, of commissions expense. Commissions expense primarily relates to the amortization of capitalized commissions costs, which is included as a selling, general and administrative expense in the condensed consolidated statements of net income and comprehensive income.

Accounts receivable includes invoiced amounts where the right to receive payment is unconditional and only subject to the passage of time. Allowance for ~~doubtful accounts~~credit losses are reported as a component of accounts receivable as summarized below:

	December 31, 2021			March 31, 2021			June 30, 2022			March 31, 2022
Accounts receivable, gross	$	74,084		$	81,746		$	81,216		$	79,945
Allowance for doubtful accounts		(4,004	)		(4,205	)
Allowance for credit losses								(3,937	)		(3,888	)
Accounts receivable, net	$	70,080		$	77,541		$	77,279		$	76,057

The following table represents the changes in the allowance for ~~doubtful accounts,~~credit losses, as of and for the three months ended ~~December 31, 2021:~~June 30, 2022:

~~The following table represents the~~ ~~changes in the allowance for doubtful accounts, as of and for the nine months ended December 31, 2021:~~

Balance as of March 31, 2021	$	(4,205	)
Balance as of March 31, 2022				$	(3,888	)
Additions charged to costs and expenses		(1,142	)		(241	)
Deductions		1,343			192
Balance as of December 31, 2021	$	(4,004	)
Balance as of June 30, 2022				$	(3,937	)

The following tables set forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis at ~~December 31, 2021~~June 30, 2022 and March 31, 2021:

	Balance At		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Unobservable Inputs		Balance At		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Unobservable Inputs
	December 31, 2021		(Level 1)		(Level 2)		(Level 3)		June 30, 2022		(Level 1)		(Level 2)		(Level 3)
ASSETS
Cash and cash equivalents ⁽¹⁾	$	49,429	$	49,429	$	0	$	0	$	40,361	$	40,361	$	0	$	0
Restricted cash and cash equivalents		4,921		4,921		0		0		8,054		8,054		0		0
	$	54,350	$	54,350	$	0	$	0	$	48,415	$	48,415	$	0	$	0
LIABILITIES
Contingent consideration related to acquisitions	$	0	$	0	$	0	$	0
	$	0	$	0	$	0	$	0

	Balance At		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Unobservable Inputs		Balance At			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Unobservable Inputs
	March 31, 2021		(Level 1)		(Level 2)		(Level 3)		March 31, 2022		��	(Level 1)		(Level 2)		(Level 3)
ASSETS
Cash and cash equivalents ⁽¹⁾	$	73,295	$	73,295	$	0	$	0	$	59,829		$	59,829	$	0	$	0
Restricted cash and cash equivalents		5,280		5,280		0		0		6,918			6,918		0		0
	$	78,575	$	78,575	$	0	$	0	$	66,747		$	66,747	$	0	$	0
LIABILITIES
Contingent consideration related to acquisitions	$	533	$	0	$	533	$	0
	$	533	$	0	$	533	$	0

There are 0 assets or liabilities accounted for utilizing unobservable inputs (Level 3)~~.The following table presents activity in our financial assets and liabilities~~ or measured at fair value using significant other observable inputs (Level 2), as of ~~December 31, 2021:~~

~~During the three months ended December 31, 2021, we recorded a fair value adjustment of $7 for the contingent consideration liabilityrelated to the acquisition of Topaz Information Systems, LLC based on actual earnout achievement. The contingent consideration liability of $540 was fully settled as of December 31, 2021.~~June 30, 2022.

We believe that the fair value of our other financial assets and liabilities, including accounts receivable, accounts payable, and line of credit, approximate their respective carrying values due to their nominal credit risk.

We have certain assets, including goodwill and other intangible assets, which are measured at fair value on a non-recurring basis and are adjusted to fair value only if an impairment charge is recognized. The categorization of the framework used to measure fair value of the assets is considered to be within the Level 3 valuation hierarchy due to the subjective nature of the unobservable inputs used.

Our leasing arrangements are reflected on the balance sheet as right-of-use assets and liabilities pertaining to the rights and obligations created by the leased assets.

Right-of-use lease assets and corresponding lease liabilities are recognized at commencement date based on the present value of lease payments over the expected lease term. Since the interest rate implicit in our lease arrangements is not readily determinable, we determine an incremental borrowing rate for each lease based on the approximate interest rate on a collateralized basis with similar remaining terms and payments as of the lease commencement date to determine the present value of future lease payments. Our lease terms may include options to extend or terminate the lease. Currently, it is not reasonably certain that we will exercise those options and therefore, we utilize the initial, noncancelable, lease term to calculate the lease assets and corresponding liabilities for all our leases. We have certain insignificant short-term leases with an initial term of twelve months or less that are not recorded in our condensed consolidated balance sheets. Operating right-of-use lease assets are classified as operating lease assets on our condensed consolidated balance sheets. We determine whether an arrangement is a lease at inception and classify it as finance or operating. All of our existing material leases are classified as operating leases. Our leases do not contain any residual value guarantees.

Our lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. We have applied the practical expedient to combine fixed payments for non-lease components with our lease payments for all of our leases and account for them together as a single lease component, which increases the amount of our lease assets and corresponding liabilities. Payments under our lease arrangements are primarily fixed, however, certain lease agreements contain variable payments, which are expensed as incurred and not included in the operating lease assets and liabilities.

Operating lease costs are recognized on a straight-line basis over the lease term and included as a selling, general and administrative expense in the condensed consolidated statements of net income and comprehensive income. Total operating lease costs were ~~$1,590~~$942 and ~~$2,568~~$1,864 for the three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020, respectively. Total operating lease costs were $5,139 and $7,103 for the nine months ended December 31, 2021 and 2020,~~ respectively.

	Three Months Ended December 31,						Nine Months Ended December 31,						Three Months Ended June 30,
	2021			2020			2021			2020			2022			2021
Operating lease costs	$	1,451		$	2,118		$	4,886		$	6,302		$	949		$	1,833
Short-term lease costs		—			6			8			19			—			6
Variable lease costs		243			568			604			1,154			173			157
Less: Sublease income		(104	)		(124	)		(359	)		(372	)		(180	)		(132	)
Total operating lease costs	$	1,590		$	2,568		$	5,139		$	7,103		$	942		$	1,864

Supplemental cash flow information related to operating leases is summarized as follows:

	Three Months Ended December 31,				Nine Months Ended December 31,				Three Months Ended June 30,
	2021		2020		2021		2020		2022		2021
Cash paid for amounts included in the measurement of operating lease liabilities	$	4,947	$	5,297	$	10,861	$	11,561	$	2,308	$	2,964
Operating lease assets obtained in exchange for operating lease liabilities		—		—		197		3,107		—		—

We have operating lease agreements for our offices in the United States and India with lease periods expiring between 2022 and 2026. As of ~~December 31, 2021,~~June 30, 2022, our operating leases had a weighted average remaining lease term of ~~2.8~~2.5 years and a weighted average discount rate of 3.7%. Future minimum aggregate lease payments under operating leases as of ~~December 31, 2021~~June 30, 2022 are summarized as follows:

For the year ended March 31,
2022 (remaining three months)	$	2,905
2023		8,283		$	6,507
2024		6,338			6,885
2025		3,824			4,387
2026		1,257			1,257
Total future lease payments		22,607			19,036
Less interest		(1,389	)		(1,296	)
Total lease liabilities	$	21,218		$	17,740

InDuring the ~~nine~~three months ended ~~December 31,~~June 30, 2022 we recorded impairments of $524 to the operating right-of-use asset and related fixed assets for our previously vacated portion of our St. Louis, MO office related to changes in projected sublease assumptions. During the three months ended June 30, 2021, we vacated ~~portions of certain leased locations~~our Fairport, NY office and recorded impairments of~~$1,577~~ $382 to our operating right-of-use assets and certain related fixed assets ~~associated with the vacated locations, or portions thereof, in Irvine, CA and Fairport, NY~~ based on projected sublease rental income and the estimated sublease commencement ~~dates. The~~date. These impairment

~~analysis was~~ analyses were performed at the asset group level and the impairment charge was estimated by comparing the fair value of each asset group based on the expected cash flows to its respective book value. We determined the discount rate for each asset group based on the approximate interest rate on a collateralized basis with similar remaining terms and payments as of the impairment date. Significant judgment was required to estimate the fair value of each asset group and actual results could vary from the estimates, resulting in potential future adjustments to amounts previously recorded.

We test goodwill for impairment annually during our first fiscal quarter, referred to as the annual test date. We will also test for impairment between annual test dates if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is performed at a reporting-unit level, which is defined as an operating segment or one level below an operating segment (referred to as a component). We operate as 1 segment and have a single reporting unit. The measures evaluated by our chief operating decision maker ("CODM"), consisting of the Chief Executive Officer, to assess company performance and make decisions about the allocation of resources include consolidated revenue and consolidated operating results.

As part of our annual goodwill impairment test, we may elect to first assess qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying amount. We ~~have not identified any~~assess events or changes in circumstances asin totality, including macroeconomic and industry conditions, market and competitive environment, changes in customers or customer mix, cost factors, loss of ~~December 31, 2021~~key personnel, significant changes in legislative environment or other legal factors, changes in the use of our acquired assets, changes in our strategic direction, significant changes in projected future results of operations, changes in the composition or carrying amount of our net assets, and changes in our stock price. Based on our assessment, if we conclude that ~~would require~~it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then additional impairment testing is not required. Otherwise, if we determine that a quantitative impairment test should be performed, we then evaluate goodwill for impairment by comparing the estimated fair value of the reporting unit with its book value, including goodwill. If the estimated fair value exceeds book value, goodwill is considered not to be impaired and no additional steps are necessary. If, however, the fair value of the reporting unit is less than book value, then an ~~interim~~impairment charge is recorded for the difference between the reporting unit’s fair value and carrying amount, not to exceed the carrying amount of the goodwill.

During the quarter ended June 30, 2022, we performed a qualitative assessment, which indicated that it was more likely than not that the fair value of goodwill exceeded its net carrying value and, therefore, additional impairment ~~test.~~

testing was not deemed necessary. We do not amortize goodwill as it has been determined to have an indefinite useful life. The carrying amount of goodwill as of ~~December 31, 2021~~June 30, 2022 and March 31, 2021 was ~~$267,212.~~$267,212.

Our definite-lived intangible assets, other than capitalized software development costs, are summarized as follows:

	December 31, 2021												June 30, 2022
	Customer Relationships			Trade Names			Software Technology			Total			Customer Relationships			Trade Names			Software Technology			Total
Gross carrying amount	$	39,200		$	250		$	49,000		$	88,450		$	39,200		$	250		$	49,000		$	88,450
Accumulated amortization		(28,955	)		(104	)		(31,989	)		(61,048	)		(30,516	)		(129	)		(35,988	)		(66,633	)
Net intangible assets	$	10,245		$	146		$	17,011		$	27,402		$	8,684		$	121		$	13,012		$	21,817

	March 31, 2021												March 31, 2022
	Customer Relationships			Trade Names			Software Technology			Total			Customer Relationships			Trade Names			Software Technology			Total
Gross carrying amount	$	39,200		$	250		$	91,500		$	130,950		$	39,200		$	250		$	49,000		$	88,450
Accumulated amortization		(26,349	)		(67	)		(67,834	)		(94,250	)		(29,824	)		(116	)		(34,207	)		(64,147	)
Net intangible assets	$	12,851		$	183		$	23,666		$	36,700		$	9,376		$	134		$	14,793		$	24,303

Amortization expense related to customer relationships and trade names recorded as operating expenses in the condensed consolidated statements of net income and comprehensive income was ~~$881~~$705 and ~~$1,112~~$881 for the three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020,~~ respectively. Amortization expense related to software technology recorded as cost of revenue was ~~$2,218~~$1,781 and ~~$4,344~~$2,218 for the three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020, respectively.~~

Amortization expense related to customer relationships and trade names recorded as operating expenses in the condensed consolidated statements of net income and comprehensive income was $2,643 and $3,336 for the nine months ended December 31, 2021 and 2020, respectively. Amortization expense related to software technology recorded as cost of revenue was $6,654 and $14,352 for the nine months ended December 31, 2021 and 2020, respectively.

The following table summarizes the remaining estimated amortization of definite-lived intangible assets as of ~~December 31, 2021:~~June 30, 2022:

	Estimated Remaining Amortization Expense						Estimated Remaining Amortization Expense
	Operating Expense		Cost of Revenue		Total		Operating Expense		Cost of Revenue		Total
For the year ended March 31,
2022 (remaining three months)	$	881	$	2,218	$	3,099
2023		2,820		5,154		7,974	$	2,115	$	3,373	$	5,488
2024		2,279		3,573		5,852		2,279		3,573		5,852
2025		1,846		3,573		5,419		1,846		3,573		5,419
2026		1,377		2,251		3,628		1,377		2,251		3,628
2027 and beyond		1,188		242		1,430
2027								631		242		873
2028 and beyond								557		-		557
Total	$	10,391	$	17,011	$	27,402	$	8,805	$	13,012	$	21,817

	December 31, 2021			March 31, 2021			June 30, 2022			March 31, 2022
Gross carrying amount	$	103,411		$	96,908		$	118,759		$	110,155
Accumulated amortization		(61,692	)		(55,434	)		(71,157	)		(66,197	)
Net capitalized software costs	$	41,719		$	41,474		$	47,602		$	43,958

Amortization expense related to capitalized software costs was ~~$5,975~~$5,354 and ~~$4,975~~$5,866 for the three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020,~~ respectively, and is recorded as cost of revenue in the condensed consolidated statements of net income and comprehensive income.

~~Amortization expense related to~~During the three months ended, we retired $393 of fully amortized capitalized software costs ~~was $17,592 and $14,828 for the nine months ended December 31, 2021 and 2020, respectively.~~that are no longer being utilized by our client base.

The following table presents the remaining estimated amortization of capitalized software costs as of ~~December 31, 2021.~~June 30, 2022. The estimated amortization is comprised of (i) amortization of released products and (ii) the expected amortization for products that are not yet available for sale based on their estimated economic lives and projected general release dates.

For the year ended March 31,
2022 (remaining three months)	$	7,400
2023		20,700	$	20,300
2024		9,600		15,900
2025		3,500		8,000
2026		519		3,402
Total	$	41,719	$	47,602

On March 12, 2021, we entered into a $300,000 second amended and restated revolving credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”), U.S. Bank National Association and Bank of the West, as co-syndication agents, and certain other agents and lenders. The Credit Agreement replaces our prior $300,000 amended and restated revolving credit agreement, originally entered into on January 4, 2016 and amended on March 29, ~~2018 (“Original Credit Agreement”).~~2018. The Credit Agreement provides a subfacility of up to $10,000 for letters of credit and a subfacility of up to $10,000 for swing-line loans. The Credit Agreement also provides us with the ability to obtain up to $150,000 in the aggregate of additional revolving credit commitments and/or term loans thereunder (i.e., in excess of $300,000) upon satisfaction of certain conditions, including receipt of commitments from new or existing lenders to provide such additional revolving credit commitments and/or term loans.

On May 17, 2022, we entered into that certain Amendment No. 1 to Credit Agreement (the “First Amendment”) with the Administrative Agent and the lenders party thereto to amend the existing Credit Agreement.The First Amendment modifies the Credit Agreement to increase our net leverage ratio maintenance covenant from 3.75x to 4.00x and increase the related adjusted covenant period option (available upon the consummation of certain acquisitions) from 4.25x to 4.75x, in each case, commencing with the reporting period ending June 30, 2022. The First Amendment also makes certain updates to the conditions restricting the making of certain dividends, distributions, and other restricted payments by the Company so that such conditions are based on the our net leverage ratio (as set forth in the Credit Agreement) rather than our total leverage ratio, to increase the dollar cap for such restricted payments that can be made without satisfying leverage conditions from $11,500 to $25,000, and to increase flexibility in cash netting calculations in connection with the making of restricted payments.

The Credit Agreement matures on March 12, 2026 and the full balance of the revolving loans and all other obligations under the Credit Agreement must be paid at that time. In addition, we are required to prepay the revolving loan balance if at any time the aggregate principal amount outstanding under the Credit Agreement exceeds the aggregate commitments thereunder. The Credit Agreement is secured by substantially all of our existing and future property and our material domestic subsidiaries. The revolving loans under the Credit Agreement will be available for letters of credit, permitted acquisitions, working capital and general corporate purposes. We were in compliance with all financial and non-financial covenants under the Credit Agreement as of ~~December 31, 2021.~~June 30, 2022.

As of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, we had 0 outstanding loans and $300,000 of unused credit under the Credit Agreement.

Interest expense related to the Credit Agreement was ~~$194~~$203 and ~~$452~~$190 for the three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020,~~ respectively. Amortization of deferred debt issuance costs was $127 and ~~$177~~$127 for the three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020, respectively.~~

Interest expense related to the Credit Agreement was $577 and $2,308 for the nine months ended December 31, 2021 and 2020, respectively. Amortization of deferred debt issuance costs was $381 and $532 for the nine months ended December 31, 2021 and 2020, respectively.

	December 31, 2021		March 31, 2021		June 30, 2022		March 31, 2022
Cash and cash equivalents	$	49,429	$	73,295	$	40,361	$	59,829
Restricted cash and cash equivalents		4,921		5,280		8,054		6,918
Cash, cash equivalents, and restricted cash	$	54,350	$	78,575	$	48,415	$	66,747

	December 31, 2021		March 31, 2021		June 30, 2022		March 31, 2022
Prepaid expenses	$	18,482	$	20,679	$	21,145	$	24,229
Capitalized commissions costs		10,926		9,399		11,914		11,698
Other current assets		690		1,204		952		1,175
Prepaid expenses and other current assets	$	30,098	$	31,282	$	34,011	$	37,102

	December 31, 2021			March 31, 2021			June 30, 2022			March 31, 2022
Computer equipment	$	36,335		$	35,244		$	36,544		$	36,293
Internal-use software		18,836			18,174			19,265			19,001
Leasehold improvements								12,692			13,227
Furniture and fixtures		10,714			11,555			8,315			9,579
Leasehold improvements		14,433			14,418
Equipment and improvements, gross		80,318			79,391			76,816			78,100
Accumulated depreciation and amortization		(69,500	)		(64,852	)		(68,490	)		(68,980	)
Equipment and improvements, net	$	10,818		$	14,539		$	8,326		$	9,120

	December 31, 2021		March 31, 2021		June 30, 2022		March 31, 2022
Capitalized commission costs	$	19,820	$	19,104	$	21,971	$	21,654
Deposits		5,936		5,505		7,049		5,793
Debt issuance costs		2,133		2,521		2,179		2,006
Other noncurrent assets		10,071		9,891		8,680		9,573
Other assets	$	37,960	$	37,021	$	39,879	$	39,026

	December 31, 2021		March 31, 2021		June 30, 2022		March 31, 2022
Care services liabilities					$	8,054	$	6,918
Accrued hosting costs	$	9,161	$	6,158		6,084		12,510
Accrued employee benefits and withholdings		8,897		4,649
Sales returns reserves and other customer liabilities		6,083		9,449		5,956		5,725
Care services liabilities		4,921		5,280
Customer credit balances and deposits		4,257		4,638		5,665		4,622
Accrued consulting and outside services		3,541		3,002		3,756		4,799
Accrued employee benefits and withholdings						3,463		3,535
Accrued self insurance expense		2,222		1,737		2,485		2,208
Accrued outsourcing costs		2,155		2,266		2,391		2,264
Accrued EDI expense		1,969		2,020		1,976		2,168
Accrued legal expense		1,902		6,302		1,453		1,439
Accrued royalties		722		3,125		717		3,557
Accrued taxes payable		550		586		478		540
Contingent consideration related to acquisitions		—		533
Other accrued expenses		3,056		2,954		2,709		3,248
Other current liabilities	$	49,436	$	52,699	$	45,187	$	53,533

Deferred payroll taxes		—		3,817
Uncertain tax positions		3,175		3,175	$	4,189	$	4,196
Other liabilities		156		144		373		374
Other noncurrent liabilities	$	3,331	$	7,136	$	4,562	$	4,570

The benefit of income taxes was $247 in the three months ended June 30, 2022, reflecting an effective tax rate benefit of 27.4%. The provision for income taxes was ~~$2,535~~$559 in the three months ended ~~December 31,~~June 30, 2021, reflecting an effective tax rate of ~~32.8%~~16.4%.

The ~~benefit of income taxes was $169~~decrease in the effective tax rate for the three months ended ~~December 31, 2020, reflecting an effective tax rate benefit of 57.3%.~~

~~The provision for income taxes in the nine months ended December 31, 2021 and 2020 was $1,653 and $149, respectively, reflecting an effective tax rate of 56.6% and 1.5%, respectively.~~

~~The increases in the effective tax rates for the three and nine months ended December 31, 2021~~June 30, 2022 compared to the prior period was primarily due to the impact of reduced pre-tax book income impact on rate reconciling items and the increased net benefit of discrete items in the current period compared to the prior year, offset by a net decrease of the research and development credit, foreign rate differential benefit, and higher nondeductible officer compensation.

The deferred tax assets and liabilities are presented net in the accompanying condensed consolidated balance sheets as noncurrent. We expect to receive the full benefit of the deferred tax assets recorded, with the exception of certain state credits and state net operating loss carryforwards, for which we have recorded a valuation allowance.

We had unrecognized tax benefits of ~~$4,644~~$6,097 and ~~$4,426~~$6,112 related to various federal, state, and local income tax matters as of ~~December 31, 2021~~June 30, 2022 and March 31, 2021, respectively. The unrecognized benefits consisted of liabilities of $3,320 and $3,175 as of December 31, 2021 and March 31, 2021, respectively, and reserves against deferred tax assets of $1,325 and $1,251 as of December 31, 2021 and March 31, 2021,2022, respectively. If recognized, this amount would reduce our effective tax rate.

We are subject to taxation in federal, various state, Indian, and United Kingdom jurisdictions. We are no longer subject to United States federal income tax examinations for tax years before fiscal year ended ~~2017.~~2018. With a few exceptions, we are no longer subject to state or local income tax examinations for tax years before fiscal year ended ~~2016.~~2017. We do not anticipate the total unrecognized tax benefits to significantly change due to the settlement of audits or the expiration of statute of limitations within the next twelve months.

The presentation of “basic” and “diluted” earnings per share is provided below. Share amounts below are in thousands.

	Three Months Ended December 31,				Nine Months Ended December 31,				Three Months Ended June 30,
	2021		2020		2021		2020		2022		2021
Earnings per share — Basic:
Net income	$	5,193	$	464	$	1,270	$	10,095	$	1,148	$	2,848
Weighted-average shares outstanding — Basic		67,958		66,943		67,514		66,644		67,588		67,175
Net income per common share — Basic	$	0.08	$	0.01	$	0.02	$	0.15	$	0.02	$	0.04

Earnings per share — Diluted:
Net income	$	5,193	$	464	$	1,270	$	10,095	$	1,148	$	2,848
Weighted-average shares outstanding		67,958		66,943		67,514		66,644		67,588		67,175
Effect of potentially dilutive securities		209		197		337		5		695		624
Weighted-average shares outstanding — Diluted		68,167		67,140		67,851		66,649		68,283		67,799
Net income per common share — Diluted	$	0.08	$	0.01	$	0.02	$	0.15	$	0.02	$	0.04

The computation of diluted net income per share does not include ~~410~~26 and ~~806~~238 options to acquire shares of common stock for the three months ended ~~December 31,~~June 30, 2022 and June 30, 2021, ~~and December 31, 2020, respectively, because their inclusion would have an anti-dilutive effect on net income per share.~~

~~The computation of diluted net income per share does not include 428 and 2,585 options to acquire shares of common stock for the nine months ended December 31, 2021 and December 31, 2020,~~ respectively, because their inclusion would have an anti-dilutive effect on net income per share.

In October 2005, our shareholders approved a stock option and incentive plan (the “2005 Plan”) under which 4,800,000 shares of common stock were reserved for the issuance of awards, including incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, performance shares, performance units (including performance options) and other share-based awards. The 2005 Plan provides that our employees and directors may, at the discretion of the Board of Directors ("Board") or a duly designated compensation committee, be granted certain share-based awards. In the case of option awards granted under the 2005 Plan, the exercise price of each option is determined based on the date of grant and expire no later than 10 years from the date of grant. Awards granted pursuant to the 2005 Plan are subject to the vesting schedule or performance metrics set forth in the agreements pursuant to which they are granted. Upon a change of control of our Company, as such term is defined in the 2005 Plan, awards under the 2005 Plan will fully vest under certain circumstances. The 2005 Plan expired on May 25, 2015. As of ~~December 31, 2021,~~June 30, 2022, there were ~~80,300~~34,100 outstanding options under the 2005 Plan.

In August 2015, our shareholders approved a stock option and incentive plan (the “2015 Plan”) under which 11,500,000 shares of common stock were reserved for the issuance of awards, including incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock awards and restricted stock unit awards, performance stock awards and other share-based awards. In August 2017, our shareholders approved an amendment to the 2015 Plan, to, among other items, increase the number of shares of common stock reserved for issuance thereunder by 6,000,000 shares, which was further amended in August 2019 as approved by our shareholders, to, among other items, increase the number of shares of common stock reserved for issuance thereunder by an additional 3,575,000 shares. In October 2021, our shareholders approved an amendment and restatement of the Company’s 2015 Equity Incentive Plan (the “Amended 2015 Plan”), to, among other items, increase the number of common stock reserved for issuance thereunder by an additional 1,850,000 shares. The Amended 2015 Plan provides that our employees and directors may, at the discretion of the Board or a duly designated compensation committee, be granted certain share-based awards. In the case of option awards granted under the Amended 2015 Plan, the exercise price of each option is determined based on the date of grant and expire no later than 10 years from the date of grant. Awards granted pursuant to the Amended 2015 Plan are subject to the vesting schedule or performance metrics set forth in the agreements pursuant to which they are granted. Upon a change of control of our Company, as such term is defined in the Amended 2015 Plan, awards under the Amended 2015 Plan will fully vest under certain circumstances. As of ~~December 31, 2021,~~June 30, 2022, there were ~~1,611,364~~1,332,613 outstanding options, ~~2,306,714~~2,794,093 outstanding shares of restricted stock awards, certain outstanding performance stock unit awards as described further below, and ~~2,779,862~~1,259,395 shares available for future grant under the Amended 2015 Plan.

In September 2021, the Board adopted the 2021 Employment Inducement Equity Incentive Plan (the “Inducement Plan”) and initially reserved 1,500,000 shares of common stock for issuance under the Inducement Plan. The Inducement Plan was adopted by the Board without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. In accordance with Rule

5635(c)(4) of the Nasdaq Listing Rules, awards under the Inducement Plan may only be made to an employee who has not previously been an employee or member of the Board or the Board of Directors or any parent or subsidiary, or following a bona fide period of non-employment by the Company or a parent or subsidiary, if he or she is granted such award in connection with his or her commencement of employment with the Company or a subsidiary and such grant is an inducement material to his or her

entering into employment with the Company or such subsidiary. The terms of the Inducement Plan are substantially similar to the terms of our Amended 2015 Plan, with the exception that incentive stock options may not be granted under the Inducement Plan. As of ~~December 31, 2021,~~June 30, 2022, there were 1,037,614 outstanding shares of restricted stock awards, 450,000 outstanding performance stock unit awards, and 12,386 shares available for future grant under the Inducement Plan.

The following table summarizes total share-based compensation expense included in the condensed consolidated statements of net income and comprehensive income for the three ~~and nine~~ months ended ~~December 31, 2021~~June 30, 2022 and ~~2020:~~2021:

	Three Months Ended December 31,						Nine Months Ended December 31,						Three Months Ended June 30,
	2021			2020			2021			2020			2022			2021
Costs and expenses:
Cost of revenue	$	561		$	506		$	1,619		$	1,519		$	563		$	504
Research and development costs		1,229			1,081			3,382			3,024			1,583			1,043
Selling, general and administrative		5,260			4,346			13,684			12,220			6,620			4,865
Total share-based compensation		7,050			5,933			18,685			16,763			8,766			6,412
Income tax benefit		(1,704	)		(1,433	)		(4,437	)		(4,002	)		(2,045	)		(1,582	)
Decrease in net income	$	5,346		$	4,500		$	14,248		$	12,761		$	6,721		$	4,830

Share-based compensation expense under our equity incentive plans is based on the number awards that ultimately vest and forfeitures are accounted for as they occur.

The following table summarizes the stock option transactions during the ~~nine~~three months ended ~~December 31, 2021:~~June 30, 2022:

Weighted-

Weighted-

Average

Average

Aggregate

Exercise

Remaining

Intrinsic

Number of

Price

Contractual

Value

Shares

per Share

Life (years)

(in thousands)

Outstanding, March 31, 2021

2,791,084

$
14.47

3.7

$
10,303

Exercised

(1,011,100
)

13.41

2.9

1,619

Forfeited/Canceled

(31,820
)

19.56

3.2

Expired

(56,500
)

18.85

Outstanding, December 31, 2021

1,691,664

$
14.86

3.1

$
5,020

Vested and expected to vest, December 31, 2021

1,683,689

$
14.85

3.1

$
5,012

Exercisable, December 31, 2021

1,641,282

$
14.80

3.0

$
4,966

				Weighted-		Weighted-
				Average		Average		Aggregate
				Exercise		Remaining		Intrinsic
	Number of			Price		Contractual		Value
	Shares			per Share		Life (years)		(in thousands)
Outstanding, March 31, 2022		1,453,739		$	14.80		2.9	$	8,886
Exercised		(85,026	)		14.64		2.1		440
Expired		(2,000	)		15.99
Outstanding, June 30, 2022		1,366,713		$	14.81		2.7	$	3,670
Vested and expected to vest, June 30, 2022		1,364,971		$	14.81		2.7	$	3,667
Exercisable, June 30, 2022		1,355,463		$	14.79		2.7	$	3,655

Share-based compensation expense related to stock options was ~~$165~~$66 and ~~$603~~$709 for the three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020, respectively. Share-based compensation expense related to stock options was $1,164 and $1,962 for the nine months ended December 31, 2021 and 2020,~~ respectively.

Non-vested stock option award activity during the ~~nine~~three months ended ~~December 31, 2021~~June 30, 2022 is summarized as follows:

As of ~~December 31, 2021, $169~~June 30, 2022, $17 of total unrecognized compensation costs related to stock options is expected to be recognized over a weighted-average period of ~~0.5~~0.2 years. This amount does not include the cost of new options that may be granted in future periods or any changes in our forfeiture percentage. The total fair value of options vested during the ~~nine~~three months ended ~~December 31,~~June 30, 2022 and 2021 was $271 and ~~2020 was $2,248 and $3,175,~~$800, respectively.

Restricted stock awards activity during the ~~nine~~three months ended ~~December 31, 2021~~June 30, 2022 is summarized as follows:

				Weighted-					Weighted-
				Average					Average
				Grant-Date					Grant-Date
	Number of			Fair Value		Number of			Fair Value
	Shares			per Share		Shares			per Share
Outstanding, March 31, 2021		2,263,569		$	14.58
Outstanding, March 31, 2022							3,242,763		$	15.30
Granted		2,342,578			15.80		1,252,308			17.83
Vested		(1,046,769	)		15.11		(612,365	)		15.14
Canceled		(215,050	)		14.91		(50,999	)		16.51
Outstanding, December 31, 2021		3,344,328		$	15.24
Outstanding, June 30, 2022							3,831,707		$	16.13

Share-based compensation expense related to restricted stock awards was ~~$5,070~~$6,279 and ~~$4,203~~$6,458 for the three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020, respectively. Share-based compensation expense related to restricted stock awards was $15,417 and $12,392 for the nine months ended December 31, 2021 and 2020,~~ respectively.

The weighted-average grant date fair value for the restricted stock awards was estimated using the market price of the common stock on the date of grant. The fair value of the restricted stock awards is amortized on a straight-line basis over the vesting period, which is generally between one to three years.

As of ~~December 31, 2021, $41,658~~June 30, 2022, $51,094 of total unrecognized compensation costs related to restricted stock awards is expected to be recognized over a weighted-average period of 2.2 years. This amount does not include the cost of new restricted stock awards that may be granted in future periods.

The total fair value of restricted stock awards vested as of the vesting dates were $11,091 and $8,670 for the three months ended June 30, 2022 and 2021.

Restricted stock awards are generally net share-settled upon vesting to cover the required withholding taxes, and the remaining share amount is transferred to the employee. The majority of restricted stock awards that vested during the three months ended June 30, 2022 and 2021 were net-share settled such that we withheld shares with value equivalent to the employees’ applicable income tax obligations for the applicable income and other employment taxes and remitted the equivalent amount of cash to the appropriate taxing authorities. Total payments for the employees’ applicable income tax obligations are reflected as a financing activity within the accompanying consolidated statements of cash flows. The total shares withheld during the three months ended June 30, 2022 and 2021 were 202,512 and 177,318, respectively, and were based on the value of the restricted stock awards on their vesting date as determined by our closing stock price. These net-share settlements had the effect of share repurchases by us as they reduced the number of shares that would have otherwise been issued at the vesting date.

On October 23, 2018, the Compensation Committee of the Board approved 248,140 performance stock unit awards to be granted to certain executives and non-executive members of the executive leadership team, of which ~~vest only in~~no shares are currently outstanding and no shares were ultimately earned or issued during the ~~event certain~~ performance ~~goals are achieved and with continuous service through the date the goals are certified.~~period. Approximately 34% of the performance stock units ~~are~~were tied to our cumulative 3-year total shareholder return, 33% ~~are~~were tied to our fiscal year 2021 revenue, and 33% ~~are~~were tied to our fiscal year 2021 adjusted earnings per share goals, each as specifically defined in the equity award agreements. The number of shares to be issued ~~may~~was to vary between 50% and 200% of the number of performance stock units depending on performance, and no such shares ~~will~~were to be issued if threshold performance iswas not achieved. The weighted-average grant date fair value of the awards was $17.84 per share, which was estimated using a Monte Carlo-based valuation model for the awards based on total shareholder return and using a probability-adjusted achievement rate combined with the market price of the common stock on the date of grant for the awards based on revenue and earnings per share targets.Share-based compensation expense related to the performance stock unit awards tied to the revenue and adjusted earnings per share goals was not significant. Share-based compensation expense related to the performance stock unit awards tied to total shareholder return was $16 and $114 for the three months ended December 31, 2021 and 2020, respectively. Share-based compensation expense related to the performance stock unit awards was a benefit of $359 for the nine months ended December 31, 2021 primarily due to cancellation of awards associated with the departure of our former Chief Executive Officer. Share-based compensation expense related to the performance stock unit awards tied to total shareholder return was $343 for the nine months ended December 31, 2020.

On December 26, 2019 and January 27, 2020, the Compensation Committee of the Board approved a total of 279,587 performance stock unit awards to be granted to certain executives and non-executive members of the executive leadership team, which vest only in the event certain performance goals are achieved and with continuous service through the date the goals are certified. Approximately 80% of the performance stock units are tied to the Company’s fiscal year 2021 revenue goal and 20% are tied to the Company’s fiscal year 2022 revenue goal. Performance stock unit awards funded for fiscal year 2021 and fiscal year 2022 revenue performance will be modified for cumulative 3-year total shareholder return (“TSR”) on the three-year grant anniversary, which is also the cliff vest date. The number of shares to be issued may vary between 42.5% and 172.5% of the number of performance stock units depending on performance, and no such shares will be issued if threshold performance is not achieved. The weighted-average grant date fair value of the awards was $16.02 per share, which was estimated using a Monte Carlo-based valuation model

for the awards based on total shareholder return and using a probability adjusted achievement rate combined with the market price of the common stock on the date of grant for the awards based on revenue targets. Share-based compensation expense related to the performance stock unit awards was $90 for the three months ended December 31, 2021 and includes the impact of cancellation of awards associated with the retirement of one our executives. Share-based compensation expense related to the performance

~~stock unit awards was $417 for the three months ended December 31, 2020.~~Share-based compensation expense related to the performance stock unit awards was a benefit of $141 for the nine months ended December 31, 2021 primarily due to cancellation of awards associated with the resignation of our ~~former~~ ~~Chief Executive Officer and the retirement of one our executives. Share-based compensation expense related to the performance stock unit awards was $1,042 for the nine months ended December 31, 2020.~~

On October 26, 2020, the Compensation Committee of the Board approved 408,861 performance stock unit awards to be granted to certain executives and non-executive members of the executive leadership team, which vest only in the event certain performance goals are achieved and with continuous service through the date the goals are certified. Approximately 80% of the performance stock units are tied to the Company’s fiscal year 2022 revenue goal and 20% are tied to the Company’s fiscal year 2023 revenue goal. Performance stock unit awards funded for fiscal year 2022 and fiscal year 2023 revenue performance will be modified for cumulative 3-year TSR on the three-year grant date anniversary, which is also the cliff vest date. The number of shares to be issued may vary between 8.5% and 199.5% of the number of target performance stock units depending on performance, and no such shares will be issued if threshold performance is not achieved. The weighted-average grant date fair value of the awards was $16.25 per share, which was estimated using a Monte Carlo-based valuation model for the awards based on total shareholder return and using a probability adjusted achievement rate combined with the market price of the common stock on the date of grant for the awards based on revenue ~~targets. Share-based compensation expense related to the perform~~targets~~ance stock unit awards was $405 and $919 for the three and nine months ended December 31, 2021, respectively.~~ ~~Share-based compensation expense related to the performance stock unit awards was $429 for the three and nine months ended December 31, 2020.~~.

On September 20, 2021, the Compensation Committee of the Board approved an award of 450,000 performance stock units to be granted to our Chief Executive ~~Officer.~~Officer under the Inducement Plan. The award has a grant date of September 22, 2021 and portions of the award vest upon both the attainment of five separate pre-determined stock price milestones during a five-year performance period and continued service over a period of three years following the grant date. The fair value and derived service period for each share-price milestone tranche was estimated separately using a Monte-Carlo based valuation model. The expense for each share-price milestone tranche is amortized over the longer of the derived service period or the explicit service period. The weighted-average grant date fair value of the award was $10.52 per share. ~~Share-based compensation expense related to the performance stock unit award was $580 and $630 for the three and nine months ended December 31, 2021, respectively.~~

On October 26, 2021, the Compensation Committee of the Board approved 476,713 performance stock units to be granted to certain ~~executives and non-executive~~ members of the executive leadership team. The awards have a grant date of November 2, 2021 and portions of the award vest upon both the attainment of four separate pre-determined stock price milestones through September 22, 2026 and continued service over a period of three years following the grant date. The fair value and derived service period for each share-price milestone tranche was estimated separately using a Monte-Carlo based valuation model. The expense for each share-price milestone tranche is amortized over the longer of the derived service period or the explicit service period. The weighted-average grant date fair value of the award was $13.02 per share.

Share-based compensation expense related to the performance stock ~~unit award~~units and awards was ~~$590~~$2,202 for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and a benefit of $957 for three months ended June 30, 2021. The benefit recognized in the prior year period was primarily due to the cancellation of awards associated with the resignation of our former Chief Executive Officer.

As of ~~December 31, 2021, $14,192~~June 30, 2022, $9,876 of total estimated unrecognized compensation costs related to performance stock units and awards is expected to be recognized over a weighted-average period of ~~2.4~~1.9 years. This amount does not include the cost of new performance stock units and awards that may be granted in future periods.

On August 11, 2014, our shareholders approved an Employee Share Purchase Plan (the “Purchase Plan”) under which 4,000,000 shares of common stock were reserved for future grant. The Purchase Plan allows eligible employees to purchase shares through payroll deductions of up to 15% of total base salary at a price equal to 90% of the lower of the fair market values of the shares as of the beginning or the end of the corresponding offering period. Any shares purchased under the Purchase Plan are subject to a six-month holding period. Employees are limited to purchasing no more than 1,500 shares on any single purchase date and no more than $25 in total fair market value of shares during any one calendar year. As of ~~December 31, 2021,~~June 30, 2022, we have issued ~~854,507~~942,271 shares under the Purchase Plan and ~~3,145,493~~3,057,729 shares are available for future issuance.

Share-based compensation expense recorded for the employee share purchase plan was ~~$95~~$219 and ~~$105~~$201 for the three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020, respectively. Share-based compensation expense recorded for the employee share purchase plan was $425 and $409 for the nine months ended December 31, 2021 and 2020,~~ respectively.

In October 2021, the Board authorized a share repurchase program under which we may repurchase up to $60,000 of our outstanding shares of common stock through March 2023. The timing and amount of any share repurchases under the share repurchase program will be determined by our management at its discretion based on ongoing assessments of the capital needs of the business, the market price of our common stock and general market conditions. Share repurchases under the program may be made through a variety of methods, which may include open market purchases, in block trades, accelerated share repurchase transactions, exchange transactions, or any combination of such methods. Repurchases may also be made under Rule 10b5-1 plans, which permit shares of common stock to be repurchased through pre-determined criteria. The program does not obligate the

Company to acquire any particular amount of our common stock, and the share repurchase program may be suspended or discontinued at any time at our discretion.

During the three months ended ~~December 31, 2021,~~June 30, 2022, we repurchased ~~2,169,896~~147,990 shares of common stock for a total of ~~$35,874~~$2,505 at a weighted-average share repurchase price of approximately ~~$16.53.~~$16.93. As of ~~December 31, 2021, $24,126~~June 30, 2022, $21,621 remained available for share repurchases pursuant to the Company’s share repurchase program.

Of the shares repurchased, 2,000,000 shares were purchased from a shareholder who previously owned 7.4% of our total shares of common stock for an aggregate purchase price of approximately $33,100. The shares repurchased represented approximately 3.0% of our total shares of common stock outstanding at December 31, 2021.

We had cash deposits at United States banks and financial institutions which exceeded federally insured limits at ~~December 31, 2021.~~June 30, 2022. We are exposed to credit loss for amounts in excess of insured limits in the event of non-performance by the institutions; however, we do not anticipate non-performance by these institutions.

Our software license agreements include a performance guarantee that our software products will substantially operate as described in the applicable program documentation for a period of 365 days after delivery. To date, we have not incurred any significant costs associated with our performance guarantee or other related warranties and do not expect to incur significant warranty costs in the future. Therefore, no accrual has been made for potential costs associated with these warranties. Certain arrangements also include performance guarantees related to response time, availability for operational use, and other performance-related guarantees. Certain arrangements also include penalties in the form of maintenance credits should the performance of the software fail to meet the performance guarantees. To date, we have not incurred any significant costs associated with these warranties and do not expect to incur significant warranty costs in the future. Therefore, no accrual has been made for potential costs associated with these warranties.

We historically have accepted sales returns under limited circumstances. We estimate expected sales returns and other forms of variable consideration considering our customary business practice and contract-specific facts and circumstances, and we consider such estimated potential returns as variable consideration when allocating the transaction price to the extent it is probable that there will not be a significant reversal of cumulative revenue recognized.

Our standard sales agreements contain an indemnification provision pursuant to which we shall indemnify, hold harmless, and reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with any United States patent, any copyright or other intellectual property infringement claim by any third-party with respect to our software. As we have not incurred any significant costs to defend lawsuits or settle claims related to these indemnification agreements, we believe that our estimated exposure on these agreements is currently minimal. Accordingly, we have no liabilities recorded for these indemnification obligations.

We have experienced legal claims by clients regarding product and contract disputes, by other third parties asserting that we have infringed their intellectual property rights, by current and former employees regarding certain employment matters and by certain shareholders. We believe that these claims are without merit and intend to defend against them vigorously; however, we could incur substantial costs and diversion of management resources defending any such claim, even if we are ultimately successful in the defense of such matter. Litigation is inherently uncertain and always difficult to predict.

Additionally, we are subject to the regulation and oversight of various federal and state governmental agencies that enforce fraud and abuse programs related to the submission of fraudulent claims for reimbursement from governmental payers. We have received, and from time to time may receive, inquiries or subpoenas from federal and state agencies. Under the False Claims Act (“FCA”), private parties have the right to bring qui tam, or “whistleblower,” suits against entities that submit, or cause to be submitted, fraudulent claims for reimbursement. Qui tam or whistleblower actions initiated under the FCA may be pending but placed under seal by the court to comply with the FCA’s requirements for filing such suits. As a result, they could lead to proceedings without our knowledge. We refer you to the discussion of regulatory and litigation risks within “Item 1A. Risk Factors” appearing in our most recent Annual Report on Form 10-K for the fiscal year ended March 31, 2022 (“Annual Report”).

On October 7, 2013, a complaint was filed against our Company and certain of our officers and directors in the Superior Court of the State of California for the County of Orange, captioned Ahmed D. Hussein v. Sheldon Razin, Steven Plochocki, Quality Systems, Inc. and Does 1-10, inclusive, No. 30-2013-00679600-CU-NP-CJC, by Ahmed Hussein, a former director and significant shareholder of our Company. After the court sustained our demurrer to the initial complaint, Hussein filed an amended complaint on April 25, 2014. The amended complaint generally alleges fraud and deceit, constructive fraud, negligent misrepresentation and breach of fiduciary duty in connection with statements made to our shareholders regarding our financial condition and projected future performance. The amended complaint seeks actual damages, exemplary and punitive damages and costs. Hussein’s breach of fiduciary duty claims were dismissed on demurrer, and we filed an answer and cross-complaint against Hussein, alleging that he breached fiduciary duties owed to the Company. On September 16, 2015, the Court granted summary judgment with respect to Hussein’s remaining claims, dismissing all claims against us. The cross-complaint against Hussein went to trial, but the Court granted judgment in favor of Hussein on our cross-complaint. Final judgment over Hussein’s claims and our cross-claims was entered on January 9, 2018. Hussein appealed the order granting summary judgment over his claims, and we appealed the court’s decision granting Hussein’s motion for judgment on our cross-complaint. On October 8, 2019, the California State Court of Appeal for the Fourth Appellate District, Division Three, reversed the Superior Court’s grant of summary judgment on Hussein’s affirmative claims and affirmed the trial court’s judgement on the Company’s breach of fiduciary duty claims against Hussein. As a result, the case has returned to the trial court for resolution of Hussein’s claims against us. Trial commenced on July 6, 2021. On July 29, 2021, the jury rendered a verdict in favor of the Company and the individual defendants on all counts. Hussein filed a Motion for New Trial, which the Court denied.

Separately, Hussein has issued an arbitration demand seeking indemnification for the fees he incurred defending against our cross-complaint. Following briefing and a hearing at the liability phase of the arbitration, the arbitrator held that Hussein is entitled to indemnification for “expenses” (as that term is defined in Hussein’s indemnification agreement with NextGen) incurred in defense of NextGen’s cross-complaint against him. The arbitrator reserved all other claims related to costs and damages for a second phase of the arbitration. On June 10, 2021, the arbitrator heard arguments on the quantum of indemnifiable expenses. On September 2, 2021, the arbitrator awarded Hussein indemnification for fees and costs incurred defending the cross-complaint. After trebling the fees incurred pursuant to Hussein’s supplemental agreement with his attorneys, and adding in interest and costs, the arbitrator calculated that the Company owes Mr. Hussein $11,370 in indemnification, which we subsequently paid on September 30, 2021.

Commencing in April 2017, we have received requests for documents and information from the United States Attorney's Office for the District of Vermont and other government agencies in connection with an investigation concerning the certification we obtained for our software under the United States Department of Health and Human Services' Electronic Health Record (EHR) Incentive Program. The requests for information relate to, among other things: (a) data used to determine objectives and measures under the Meaningful Use (MU) and the Physician Quality Reporting System (PQRS) programs, (b) our EHR product and its performance, including defects that relate to patient safety or meaningful use certifications, (c) the software code used in certifying our EHR software and information, and (d) marketing programs and payments provided for the referral of EHR business. We continue to ~~cooperate in this investigation by responding~~respond to the government’s ~~requests.~~request and are engaged in discussions on the status of their investigation, which is still ongoing. Requests and investigations of this nature may lead to future requests for information and ultimately the assertion of claims or the commencement of legal proceedings against us, ~~as well as~~which themselves may lead to material fines, penalties or other ~~material~~ liabilities. In addition, our responses to these and any future requests require time and effort, which can result in additional cost to us. At this time, we are unable to estimate the probability of the outcome of this matter or the ~~amount~~range of ~~liability,~~reasonably possible loss, if ~~any, related to~~any. However, the unfavorable resolution of this ~~matter.~~ matter could have a material adverse effect on our business, results of operations, financial condition or cash flows.

Given the highly-regulated nature of our industry, we may, from time to time, be subject to subpoenas, requests for information, or investigations from various government agencies. It is our practice to respond to such matters in a cooperative, thorough and timely manner.

On July 26, 2022, we ~~recorded restructuring costs of $539 and $2,562, respectively, consisting of payroll-related costs, such as severance, outplacement costs, and continuing healthcare coverage, associated~~sold certain, non-strategic, dental-related assets in accordance with the ~~involuntary separation~~terms of ~~employees pursuant~~the Asset Purchase Agreement, subject to ~~a one-time benefit arrangement, within operating expenses~~customary close procedures and certain adjustments to the closing cash consideration, which we are in ~~our condensed consolidated statements~~the process of ~~net income and comprehensive income. The payroll-related costs for the three months ended December 31, 2021 have been substantially paid.~~determining.

Item 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This Quarterly Report on Form 10-Q ("Report") and certain information incorporated herein by reference contain forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements included or incorporated by reference in this Report, other than statements that are purely historical, are forward-looking statements. Words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek,” “estimate,” “will,” “should,” “would,” “could,” “may,” and similar expressions also identify forward-looking statements. These forward-looking statements include, without limitation, discussions of the impact of the COVID-19 pandemic and measures taken in response thereto, as well as our product development plans, business strategies, future operations, financial condition and prospects, share repurchases, developments in and the impacts of government regulation and legislation and market factors influencing our results. Our expectations, beliefs, objectives, intentions and strategies regarding our future results are not guarantees of future performance and are subject to risks and uncertainties, both foreseen and unforeseen, that could cause actual results to differ materially from results contemplated in our forward-looking statements. These risks and uncertainties include, but are not limited to, our ability to continue to develop new products and increase systems sales in markets characterized by rapid technological evolution, consolidation, and competition from larger, better-capitalized competitors. Many other economic, competitive, governmental and technological factors could affect our ability to achieve our goals, and interested persons are urged to review any risks that may be described in “Item 1A. Risk Factors” as set forth herein and other risk factors appearing in our most recent Annual Report on Form 10-K for the fiscal year ended March 31, ~~2021~~2022 (“Annual Report”), as supplemented by additional risk factors, if any, in our interim filings on our Quarterly Reports on Form 10-Q, as well as in our other public disclosures and filings with the Securities and Exchange Commission ("SEC"). Because of these risk factors, as well as other variables affecting our financial condition and results of operations, past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods. We assume no obligation to update any forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of the filing of this Report. Each of the terms “NextGen Healthcare,” “NextGen,” “we,” “us,” “our,” or the “Company” as used throughout this Report refers collectively to NextGen Healthcare, Inc. and its wholly-owned subsidiaries, unless otherwise indicated.

This management's discussion and analysis of financial condition and results of operations ("MD&A") is provided as a supplement to the condensed consolidated financial statements and notes thereto included elsewhere in this Report in order to enhance your understanding of our results of operations and financial condition and should be read in conjunction with, and is qualified in its entirety by, the condensed consolidated financial statements and related notes thereto included elsewhere in this Report. Historical results of operations, percentage margin fluctuations and any trends that may be inferred from the discussion below are not necessarily indicative of the operating results for any future period.

NextGen Healthcare is a leading provider of ~~software and services~~innovative, cloud-based, healthcare technology solutions that empower ~~ambulatory~~ healthcare practices to manage the risk and complexity of delivering care in the ~~rapidly evolving U.S.~~United States healthcare system. Our combination of technological breadth, depth, and domain expertise makes us a preferred solution provider and trusted advisor for our clients. In addition to highly configurable core clinical and financial capabilities, our portfolio includes tightly integrated solutions that deliver on ambulatory healthcare imperatives, ~~including: population~~including consumerism, digitization, risk allocation, regulatory influence, and integrated care and health ~~care management, patient outreach, telemedicine and nationwide clinical information exchange.~~equity.

We serve clients across all 50 states. Over 100,000 providers use NextGen Healthcare solutions to deliver care in nearly every medical specialty in a wide variety of practice models including accountable care organizations (“ACOs”), independent physician associations (“IPAs”), managed service organizations (“MSOs”), Veterans ~~Service Organizations~~service organizations (“VSOs”), and ~~Dental Service Organizations~~dental service organizations (“DSOs”). Our clients ~~include~~range from some of the largest and most progressive multi-specialty groups in the ~~country.~~country to sole practitioners with a wide variety of business models. With the addition of behavioral health to our medical and oral health capabilities, we continue to extend our share not only in ~~Federally Qualified Health Centers~~federally qualified health centers (“FQHCs”), but also in the growing integrated care ~~market.~~

NextGen Healthcare has historically enhanced our offering through both organic and inorganic activities. In October 2015, we divested our former Hospital Solutions division to focus exclusively on the ambulatory marketplace. In January 2016, we acquired HealthFusion Holdings, Inc. and its cloud-based electronic health record and practice management solution. In April 2017, we acquired Entrada, Inc. and its cloud-based, mobile platform for clinical documentation and collaboration. In August 2017, we acquired EagleDream Health, Inc. and its cloud-based population health analytics solution. In January 2018, we acquired Inforth Technologies for its specialty-focused clinical content. In October 2019, we acquired Topaz Information Systems, LLC (“Topaz”) for its behavioral health solutions. In December 2019, we acquired Medfusion, Inc. (“Medfusion”) for its Patient Experience Platform (i.e., patient portal, self-scheduling, and patient pay) capabilities and OTTO Health, LLC (“OTTO”) for its integrated virtual care solutions, notably telemedicine. The integration of these acquired technologies has made NextGen Healthcare’s solutions among the most comprehensive in the market.

Our company was incorporated in California in 1974. Previously named Quality Systems, Inc., we changed our corporate name to NextGen Healthcare, Inc. in September ~~2018.~~2018, and in 2021, we changed our state of incorporation to Delaware. Our principal executive offices are located at 3525 Piedmont Rd., NE, Building 6, Suite 700, Atlanta, ~~Georgia, and our~~Georgia. Our principal website is www.nextgen.com. We operate on a fiscal year ending on March 31.

~~Industry~~Our Vision, Mission and ~~Regulatory Background, Market Opportunity,~~Strategy

NextGen Healthcare’s vision is better healthcare outcomes for all. We strive to achieve this vision by delivering innovative solutions and ~~Trends~~

insights aimed at creating healthier communities. We ~~believe~~focus on improving care delivered in ambulatory settings but do so recognizing that the ~~trends~~entire healthcare ecosystem needs to work in concert to achieve the quadruple aim… “to improved patient experience, improved provider experience, improve the health of a population, and ~~events described below have contributed~~reduce per capita health care costs.”

Our long-term strategy is to ~~our consolidated results of operations~~position NextGen Healthcare as both the essential, integrated, delivery platform and ~~may continue to impact our future results.~~

~~Over~~ the ~~last decade,~~most trusted advisor for the ambulatory healthcare market has experienced significant regulatory change, which has driven the need for improved technology to enable practice transformation. Recognizing it was imperative to digitize the U.S. health system to stem the escalating cost of healthcare and improve the quality of care being delivered, Congress enacted the Health Information Technology for Economic and Clinical Health Act in 2009 (“HITECH Act”). The legislation stimulated healthcare organizations to not only adopt electronic health records, but to use them to collect discrete data that could be used to drive quality care. This standardization supported early pay-for-reporting and pay-for-performance programs.

In 2010, the Affordable Care Act (“ACA”) established the roadmap for shifting American healthcare from volume (fee-for-service) to a value-based care (“VBC”) system that rewards improved outcomes at lower costs (fee-for-value). This was followed by the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”), bipartisan legislation that further changed the way Medicare rewards clinicians for value vs. volume. Initially focused on government-funded care, the domainpractices of the ~~Centers for Medicare & Medicaid Services (“CMS”), these programs are now firmly established on the commercial insurance side of the industry as well.~~

Importantly, the introduction of VBC programs was only an element of the broader approach to reducing healthcare expenditure. The drive to reduce costs initially led to consolidation in the healthcare systemfuture. To that was followed by a significant shift of care from the inpatient to lower cost outpatient setting. Among other factors, consumerism is set to play a major role in driving volume increases outside of the hospital. In addition, providers continue to seek new tools and means to connect with patients in new ways. Patients are expecting care to be personalized and tailored to their preferences and are seeking much greater transparency about the costs for visits, medications, and procedures as well as improved convenience and access to care. Along with the continued expansion of telehealth, there will be growth in technologies which facilitate the digital connection between patient and provider. The need to sustain revenue has made it extremely important for practices to secure their patient market share, elevating patient loyalty to a significant determinant of provider success. In addition to being loyal, groups participating in value-based contracts realized that patients also needed to be engaged in their care and interested in improving their own health. The need to attract, retain and engage patients has made patient experience one of the most important aspects of evolving care delivery in the United States. Capturing patient market share and thriving in a market driven by VBC requires both an integrated platform and a full view of the patient population’s clinical and cost data, neither of which could be accomplished without new technologies to collect and analyze multi-sourced patient data. Effectively implemented, these new technologies allow organizations to enhance financial viability while exercising the freedom to join, affiliate, integrate or interoperate in ways that maximize strategic control.

Although the HITECH Act led to the meaningful adoption of electronic health records, many in the healthcare industry were dissatisfied with the level of exchange of health information between different providers and across different software platforms. With the passing of the MACRA law in 2015, the U.S. Congress declared it a national objective to achieve widespread exchange of health information through interoperable certified electronic health records (“EHR”) technology. Then, in December 2016, the 21st Century Cures Act (“Cures Act”) was passed and signed into law. Among many other policies, the law includes numerous provisions intended to encourage nationwide interoperability.

In January 2020, the U.S. Department of Health and Human Services (“HHS”) officially declared that a public health emergency (“PHE”) existed as a result of the COVID-19 pandemic. Then, in March and April 2020, HHS issued a series of rules and orders to offer healthcare providers flexibility or waivers from certain regulatory requirements during the PHE.

Among other changes, HHS and the Centers for Medicare and Medicaid Services (“CMS”) eliminated the patient geographic and originating site restrictions for Medicare telehealth services that outside of the PHE restrict the services to patients in rural geographic areas who are physically present at a healthcare facility at the time of service. Other flexibilities authorized CMS to reimburse telehealth visits at the same payment rates as in-person office visits during the PHE. State Medicaid programs and commercial insurers instituted similar policies to promote virtual visits as an alternative to in-person care during the pandemic.

~~Now, looking beyond the eventual~~ end, of the PHE, Congress is considering legislation that would make some of these temporary telehealth policies permanent. In April 2021, bipartisan legislation was introduced in both the U.S. House of Representatives and the U.S. Senate that would permanently expand Medicare’s telehealth services program to all geographies and allow patients to receive services from their homes.

In March 2020, the HHS Office of the National Coordinator for Health Information Technology (“ONC”) released a final regulation which implements the key interoperability provisions included in the Cures Act. The rule calls on developers of certified EHRs to adopt standardized application programming interfaces (“APIs”) and to meet a list of other new certification and maintenance of certification requirements in order to retain approved federal government certification status.

The ONC rule also implements the information blocking provisions of the Cures Act, including identifying reasonable and necessary activities that do not constitute information blocking. Under the Cures Act, HHS has the regulatory authority to investigate and assess civil monetary penalties of up to $1,000,000 against certified health IT developers found to be in violation of “information blocking.”

The $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act ("CARES Act”) was signed into law in late March 2020. While this law created the “Paycheck Protection Program” for small businesses, which would include many physician groups, the CARES

Act also increased funding for the Public Health and Social Services Emergency Fund by $127 billion, with $100 billion of that earmarked to reimburse eligible hospitals and healthcare providers for healthcare-related expenses or lost revenues not otherwise reimbursed that are directly attributable to COVID-19. The law also provided $1.32 billion in supplemental funding to community health centers.

The Consolidated Appropriations Act, 2021 was passed by Congress and signed into law in December 2020. This $2.3 trillion legislative package combines the $1.4 trillion fiscal year 2021 appropriations bills with a $900 billion coronavirus aid package. The law adds $3 billion in additional funding for HHS’s Provider Relief Fund, which was established by the CARES Act (March 2020) and previously funded with $175 billion to reimburse providers for healthcare related expenses and lost revenue attributable to the pandemic. The law also provides a three-year extension (federal fiscal years 2021, 2022, 2023) of federal grant funding for community health centers and provides $4.25 billion in supplemental grant funding for substance abuse disorder, mental health, and behavioral health programs run by HHS’s Substance Abuse and Mental Health Services Administration (“SAMHSA”). Support for telehealth services was included through provisions that permanently remove Medicare’s patient geographic and site limitations and an appropriation of $250 million for the Federal Communications Commission’s (“FCC’s”) COVID-19 Telehealth Program, which grants non-profit healthcare providers financial support to implement telehealth solutions.

In March 2021, the $1.9 trillion American Rescue Plan Act was signed into law. This legislation includes additional coronavirus-related relief measures and is the latest in a series of pandemic-related aid legislation enacted since March 2020. Among other provisions, this law provides $7.6 billion in supplemental federal grant funding for FQHCs. As a comparison, the CARES Act provided $1.3 billion in supplemental federal grant funding for FQHCs. In addition, this law provides $3.5 billion in funding for block grant programs that address mental health and substance use disorders and are administered by HHS’s SAMHSA.

The new regulations will require significant compliance efforts for not only healthcare information technology (“HIT”) companies, networks, and exchanges, but also for healthcare providers. However, the Cures Act also creates opportunities for improving care delivery and outcomes through increased data exchange between providers, and easier patient access to their own health information. Key to unlocking these benefits is the introduction of new Fast Healthcare Interoperability Resources (“FHIR”) standards, which ONC requires certified HIT companies to adopt through APIs. Meanwhile, CMS is requiring hospitals to provide electronic admission, discharge and transfer notification to other healthcare facilities, providers and designated care team members.All healthcare providers are required to comply with the information blocking rules as of the initial April 5, 2021 compliance date. As of December 31, 2022, providers participating in federal programs that require the use of certified HIT will need to use the new “2015 EditionCures Update” certified version of EHR software to comply with the Cures Act certification requirements. Through enhanced interoperability functionality and standardized APIs, the Spring ‘21 release of NextGen® Enterprise will help healthcare providers meet these dual mandates included in the Cures Act.

~~Through the expansion of our NextGen® Share interoperability services platform and API partner marketplace,~~ we will address the increased demand for moving and sharing patient data from the EHR easily, quickly and securely. Interoperability improves patient experience and care coordination, enhances patient safety, and reduces costs. We are also expanding resources such as educational webinars, blogs and videos on interoperability to help educate and support healthcare providers.

In recent years, there has been incremental investment to improve the delivery of behavioral healthcare. One of the central drivers of this investment has been the opioid epidemic which claims more than 80,000 lives a year in the United States. The integrated care model prevalent in FQHCs, a model which calls for integration of behavioral health and primary care in single care settings, has also gained momentum. Both behavioral health and the integrated care workflows require broad, purpose built, tailored HIT capabilities, many of which are supported by the NextGen Healthcare platform. As a result of the COVID-19 pandemic, ambulatory practices have come to appreciate the importance of business continuity, particularly in administrative business functions which are non-core to medical care and may turn to NextGen Healthcare more often for managed services.

In late 2019, the emergence of a novel coronavirus, or COVID-19, was reported and in January 2020, the World Health Organization (“WHO”), declared it a Public Health Emergency of International Concern. In March 2020, the WHO escalated COVID-19 as a pandemic. We proactively responded to the pandemic by creating an executive task force to monitor the COVID-19 situation daily and immediately restricted non-essential travel and migrated to a fully remote workforce while maintaining complete operational effectiveness.

The need to access care while still social distancing was addressed early on with the limited use of telemedicine (also known as virtual visits) and was energized when the federal government reduced regulatory barriers and addressed payment parity between virtual and in-person visits. With these tailwinds, telemedicine quickly became regarded as a safer way for patients and providers to engage each other while also relieving economic pressure on the medical practice. We believe that the uptake of telemedicine will transcend COVID-19 and that virtual visits will become a permanent and important change in the way care is delivered. Keeping patients out of the transit system, out of the waiting room and away from other sick patients is simply good medicine.

At present, we are conducting business as usual with certain modifications to employee travel, employee work locations, and marketing events, among other modifications. We continue to monitor the broader implications of the global COVID-19 pandemic and may take further actions that we determine are in the best interests of our employees, customers, partners, suppliers, and shareholders.

We empower the transformation of ambulatory care by delivering solutions that enable groups to be successful under all models of care, including emerging value-based care models that include down-side risk. We primarily serve organizations that provide or orchestrate care in an

ambulatory ~~setting~~settings and do so across diverse practice sizes, specialties, care modalities, and business models. ~~Furthermore,~~These customers include conventional practices as well as new market entrants.

We plan to continue investing in our current capabilities as well as building and/or acquiring new capabilities. In October 2019, we acquired Topaz Information Systems, LLC for its behavioral health solutions. In December 2019, we acquired Medfusion, Inc. for its Patient Experience Platform capabilities (i.e., patient portal, self-scheduling, and patient pay) and OTTO Health, LLC for its virtual care solutions, notably telemedicine. The integration of these acquired technologies has made NextGen Healthcare’s solutions among the most comprehensive in the market. Further, we are also actively innovating our business models and exploring new high-growth market domains as we extend our position as the essential, integrated, delivery platform and trusted impact partner for the ambulatory practices of the future.

The scale and scope of the healthcare industry continues to expand. Annual United States healthcare spend today represents nearly $4.1 trillion and ~20% of GDP. A significant portion of this spend is directed towards the treatment of chronic conditions and administering an increasingly complex system with diverse stakeholders. While there are several convergent market forces reshaping the healthcare industry landscape, we are focused on six trends we believe will materially impact the markets we participate in and our customer value proposition:

NextGen Healthcare is well positioned to play a key role in guiding our clients through short-term and long-term changes that impact healthcare in the United States and is committed to helping them deliver better outcomes.

NextGen Healthcare’s value proposition to our clients can be summarized by the four “I’s” as follows:

NextGen Healthcare delivers value to our clients in several ways. Our solutions enable our clients to address current needs while preparing for the needs of the future including expanding access to health services, enhancing the coordination and management of care, and optimizing patient outcomes while also ensuring the sustainability of their practices. Specifically, we offer a range of solutions to allow clinicians to practice anywhere and in new and innovative collaboration models.

NextGen Healthcare provides integrated cloud-based solutions and services that align with our client’s strategic imperatives. Ultimately, this value is reflected in the overall insights and impact delivered to the client. The foundation for our integrated ambulatory care platform is a core of our industry-leading EHR and practice management (“PM”) systems that support clinical, financial and patient engagement activities.

We optimize the core with an automation and workflow layer that gives our clients control over how platform capabilities are implemented to drive their desired outcomes. The workflow layer includes mobile and voice-enabled capabilities proven to reduce physician burden. Recognizing that engaged patients are key to positive outcomes, our patient experience platform enables our clients to create personalized care experiences that enhance trust and drive patient loyalty. Further, we support the advances in integrated care that focuses on the whole ~~person.~~person with solutions supporting behavioral and oral health. Our ~~platform is uniquely positioned to successfully enable~~cloud-based population health and analytics engine allows our clients to ~~expand access~~improve results in both fee-for-service and fee-for-value environments.

In support of extensibility, we surround the core with open, web-based application programming interfaces (“APIs”) to ~~care, enhance~~drive the ~~coordination~~secure exchange of health and ~~management of~~patient data with connected health solutions. Our commitment to interoperability, defragmenting care and ~~optimize patient outcomes through an integrated medical record that extends across their medical, mental, and oral health and care needs.~~

~~Effective and frictionless interoperability is essential to all models of care. Our~~our experience powering many of the nation’s ~~Health Information Exchanges (“HIE’s”)~~HIE’s places us in a unique position to enable our clients to leverage this technology to lower the cost of care and improve the patient and provider experience by providing an integrated community patient record.

~~Patient experience is directly correlated~~Finally, to ~~patient engagement and an engaged patient is a key to positive outcomes. Today’s patient is also an active consumer of their healthcare, each searching for the best experience. Our platform enables~~ensure our clients get maximum value from our solutions, we have augmented our technology with key services aligned with their needs, helping to ~~create a personalized care experience that enhances trust and drives patient loyalty.~~

~~Our longstanding success in the ambulatory market has enabled us to build significant expertise across many relevant disciplines that our clients actively request.~~ensure they reach their organizational goals. We partner with our clients to ~~operate and~~ optimize their ~~IT systems and~~information technology (“IT”) operations, enhance revenue cycle processes across fee-for-service and fee-for-value models, service line expansion and operations, as well as advise on long-term strategy.

Positioning NextGen Healthcare for Growth. As ~~one of~~NextGen Healthcare applies this value proposition framework across the ~~leading healthcare information technology players in the U.S.~~ ambulatory ~~marketplace,~~care market, we ~~plan to continue investing in~~incorporate some or all our current capabilities as well as building and/or acquiring new capabilities as we guide our clients through the market’s transformation. We expect to continue to empower the transformation of care through the following strategic priorities:solution offerings within three broad domains illustrated in Figure 1 below:

The following table sets forth the percentage of revenue represented by each item in our condensed consolidated statements of net income for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ (certain percentages below may not sum due to rounding):

	Three Months Ended December 31,						Nine Months Ended December 31,						Three Months Ended June 30,
	2021			2020			2021			2020			2022			2021
Revenues:
Recurring		89.8	%		90.5	%		90.4	%		90.5	%		91.2	%		90.6	%
Software, hardware, and other non-recurring		10.2			9.5			9.6			9.5			8.8			9.4
Total revenues		100.0			100.0			100.0			100.0			100.0			100.0
Cost of revenue:
Recurring		38.8			38.2			38.7			38.2			40.6			39.1
Software, hardware, and other non-recurring		5.3			4.8			5.2			4.6			7.0			5.1
Amortization of capitalized software costs and acquired intangible assets		5.5			6.6			5.4			7.1			4.7			5.5
Total cost of revenue		49.6			49.6			49.3			49.8			52.2			49.8
Gross profit		50.4			50.4			50.7			50.2			47.8			50.2
Operating expenses:
Selling, general and administrative		31.6			34.5			35.9			31.9			32.0			33.2
Research and development costs, net		13.0			12.8			12.9			13.1			14.2			13.2
Amortization of acquired intangible assets		0.6			0.8			0.6			0.8			0.5			0.6
Impairment of assets		0.0			1.6			0.4			0.5			0.3			0.3
Restructuring costs		0.0			0.0			0.1			0.6			0.0			0.4
Total operating expenses		45.1			49.7			49.8			47.0			47.0			47.6
Income from operations		5.3			0.7			0.9			3.2			0.8			2.6
Interest income		0.0			0.0			0.0			0.0			0.0			0.0
Interest expense		(0.2	)		(0.4	)		(0.2	)		(0.7	)		(0.2	)		(0.2	)
Other expense, net		0.0			0.0			0.0			0.0			0.0			0.0
Income before provision for (benefit of) income taxes		5.2			0.2			0.7			2.5			0.6			2.3
Provision for (benefit of) income taxes		1.7			(0.1	)		0.4			0.0			(0.2	)		0.4
Net income		3.5	%		0.3	%		0.3	%		2.4	%		0.7	%		1.9	%

The following table presents our disaggregated revenues for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ (in thousands):

Three Months Ended December 31,

Nine Months Ended December 31,

2021

2020

2021

2020

Recurring revenues:

Subscription services

$
41,158

$
37,958

$
120,581

$
110,185

Support and maintenance

38,246

37,914

115,736

114,537

Managed services

28,861

27,395

87,798

76,106

Electronic data interchange and data services

26,231

24,976

78,371

72,628

Total recurring revenues

134,496

128,243

402,486

373,456

Software, hardware, and other non-recurring revenues:

Software license and hardware

8,920

7,908

24,202

20,662

Other non-recurring services

6,305

5,601

18,403

18,515

Total software, hardware and other non-recurring revenues

15,225

13,509

42,605

39,177

Total revenues

$
149,721

$
141,752

$
445,091

$
412,633

Recurring revenues as a percentage of total revenues

89.8
%

90.5
%

90.4
%

90.5
%

Beginning in fiscal year 2023, in order to align the presentation of disaggregated revenue with the manner in which management reviews such information, we revised our presentation of disaggregated revenues by major revenue categories to reclassify revenues related to patient pay services and certain other services from the managed services category into the transactional and data services category, which replaced the prior EDI and data services category. The prior period presentation of revenues disaggregated by our major revenue categories and by occurrence above have been reclassified to conform to current year presentation.

Consolidated revenue for the three months ended ~~December 31, 2021~~June 30, 2022 increased ~~$8.0~~$7.2 million compared to the prior year period due to a ~~$6.3~~$7.4 million increase in recurring revenues, ~~and~~partially offset by a ~~$1.7~~$0.2 million ~~increase~~decrease in software, hardware and other non-recurring revenues. The increase in recurring revenues was driven by a ~~$3.2~~$4.5 million increase in subscription services, ~~$1.5~~$2.7 million increase in managed services, ~~$1.3 million increase in EDI and data services,~~ and a ~~$0.3~~$0.7 million increase in support and ~~maintenance.~~maintenance, offset by $0.5 million decrease in transactional and data services. The increase in subscription services was primarily due to higher subscriptions of our mobile platform associated with higher recent bookings, growth in subscriptions of our telehealth solutions, which benefited from higher demand driven by the COVID-19 pandemic, plus increases in revenue across ourNextGen Office and insights solutions, including ~~our core NextGen Enterprise,~~interoperability, population health, virtual visits, mobile, and financial analytics, ~~NextGen Office, connected health and interoperability, and population health,~~ due to higher recent bookings. The increase in managed services revenue was primarily due to an increase in revenue cycle management (“RCM”) ~~revenues from higher patient volumes~~ and ~~billings compared to the prior year, which was negatively impacted by the COVID-19 pandemic, as well as an increase in~~ hosting services revenues associated with higher recent bookings. ~~EDI~~Support and maintenance increased $0.7 million primarily due to our annual Consumer Price Index (“CPI”) fee increases, partially offset by client attrition. Transactional and data services ~~increased~~revenue decreased due to lower volume of data services, partially offset by higher ~~patient and~~EDI transaction volumes compared to the prior year, which was also negatively impacted by the COVID-19 pandemic. Support and maintenance increased primarily due to annual CPI increases, partially offset by client attrition. The increase in software,year. Software, hardware, and other non-recurring revenues ~~was~~decreased $0.2 million due to ~~higher~~lower software bookings, ~~and~~partially offset by higher professional services revenue from more hours incurred in the current ~~year, as well as the completion of fixed fee projects.~~year.

Consolidated revenue for the nine months ended December 31, 2021 increased $32.5 million compared to the prior year period due to a $29.0 million increase in recurring revenues, and a $3.5 million increase in software, hardware and other non-recurring revenues. The increase in recurring revenues was driven by a $11.7 million increase in managed services, $10.4 million increase in subscription services, $5.7 million in EDI and data services, and a $1.2 million increase in support and maintenance. The increase in managed services revenue was primarily due to an increase in RCM revenues from higher patient volumes and billings compared to the prior year, which was negatively impacted by the COVID-19 pandemic, and higher hosting services revenue due to higher recent bookings. The increase in subscription services was primarily due to increases in subscriptions of our mobile platform, growth in subscriptions associated with our telehealth platforms driven by the COVID-19 pandemic, as well as higher revenues from our NextGen Office, financial analytics, and connected health and interoperability solutions. EDI and data services increased due to higher patient and transaction volumes compared to the prior year, which was negatively impacted by the COVID-19 pandemic. The increase in software, hardware, and other non-recurring services revenues was due to an increase of $3.5 million in software license and hardware revenue resulting from higher bookings and sales volume.

Bookings reflect the estimated annual value of our executed contracts, adjusted to include the effect of pre-acquisition bookings if applicable, and are believed to provide a broad indicator of the general direction and progress of the business. Total bookings were ~~$37.7~~$39.2 million and ~~$37.5~~$34.3 million for the three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020,~~ respectively. The increase is due to higher bookings ~~of software, maintenance,~~RCM and ~~managed cloud~~transactional and data services, including patient pay services, partially offset by lower bookings in subscriptions of ~~virtual visits solutions, RCM,~~mobile, population health, and ~~EDI and data services.~~

~~Total bookings were $111.2 million and $94.3 million for the nine months ended December 31, 2021 and 2020, respectively. The increase is due to~~ ~~higher bookings of software, maintenance, and managed cloud services. These increases were partially offset by lower bookings associated with our~~ virtual visits solutions.

We continue to see overall practice volumes at healthy, pre-pandemic levels. This reflects in our volume- and transaction-based solutions, as noted above, and reflects an ongoing industry trend of procedure volumes migrating out of higher cost settings, like hospitals, favoring lower cost care settings and independent healthcare providers. We also continue to see healthy activity levels in our current pipeline. Sales development activities, such as lead generation and demos, indicate a positive demand environment. We have not been significantly impacted by the current economic concerns and general market conditions, and we continue to constructively engage prospects and our clients to find ways to achieve better outcomes for all.

The following table presents our consolidated cost of revenue and gross profit for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ (in thousands):

	Three Months Ended December 31,						Nine Months Ended December 31,						Three Months Ended June 30,
	2021			2020			2021			2020			2022			2021
Cost of revenue:
Recurring	$	58,033		$	54,204		$	172,312		$	157,539		$	62,244		$	57,160
Software, hardware, and other non-recurring		7,978			6,800			23,085			18,924			10,676			7,497
Amortization of capitalized software costs and acquired intangible assets		8,193			9,320			24,246			29,180			7,134			8,084
Total cost of revenue	$	74,204		$	70,324		$	219,643		$	205,643		$	80,054		$	72,741

Gross profit	$	75,517		$	71,428		$	225,448		$	206,990		$	73,248		$	73,343
Gross margin %		50.4	%		50.4	%		50.7	%		50.2	%		47.8	%		50.2	%

Cost of revenue consists primarily of compensation expense, including share-based compensation, for personnel that deliver our products and services. Cost of revenue also includes amortization of capitalized software costs and acquired technology, third party

consultant and outsourcing costs, costs associated with our EDI business partners and clearinghouses, hosting service costs, third party software costs and royalties, and other costs directly associated with delivering our products and services. Refer to Note 7, "Intangible Assets" and Note 8, "Capitalized Software Costs" of our notes to condensed consolidated financial statements included elsewhere in this Report for additional information on current period amortization of capitalized software costs and acquired technology and an estimate of future expected amortization.

Share-based compensation expense included in cost of revenue was $0.6 million and $0.5 million for the three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020, respectively. Share-based compensation expense included in cost of revenue was $1.6 million and $1.5 million for the nine months ended December 31, 2021 and 2020,~~ respectively.

Gross profit for the three months ended ~~December 31, 2021 increased $4.1~~June 30, 2022 was relatively flat at $73.2 million compared to the prior year due to an ~~$8.0~~$7.2 million increase in revenues as discussed above, offset by a ~~$3.9~~$7.3 million increase in cost of revenue associated with the higher revenues. Our gross margin ~~was unchanged at 50.4%~~decreased to 47.8% for the three months ended ~~December 31, 2021~~June 30, 2022 compared to the prior year period.

Gross profit for the nine months ended December 31, 2021 increased $18.5 million compared to the prior year period due to a $32.5 million increase in revenues as discussed above, offset by a $14.0 million increase in cost of revenue associated with the higher revenues. Our gross margin increased to 50.7% for the nine months ended December 31, 2021 compared to 50.2% in the prior year driven largely by ~~lower amortization of capitalized software costs and acquired intangible assets~~.

The increase in cost of revenue for the three ~~and nine~~ months ended ~~December 31, 2021~~June 30, 2022 compared to the prior year period was due to higher costs of subscription services and managed services, including higher ~~salaries and benefits from increased employee headcount and higher~~ hosting costs associated with delivering our software ~~solutions. EDI~~solutions and higher salaries and benefits from increased employee headcount. Transactional and data services costs also increased due to ~~processing~~ higher ~~transaction volumes.~~third party costs, partially offset by a decrease in salaries and benefits. Software, hardware, and other non-recurring services revenue costs increased compared to the prior periods primarily due to higher salaries and benefits from increased employee headcount and an increase in consulting costs associated towith the delivery of our professional ~~services.~~services as we accelerate Spring’21 migration. These increases in cost of revenue were partially offset by lower amortization of capitalized software costs and acquired intangible assets, as noted above.

The following table presents our selling, general and administrative expense for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ (in thousands):

	Three Months Ended December 31,						Nine Months Ended December 31,						Three Months Ended June 30,
	2021			2020			2021			2020			2022			2021
Selling, general and administrative	$	47,238		$	48,972		$	159,615		$	131,659		$	49,034		$	48,486
Selling, general and administrative, as a percentage of revenue		31.6	%		34.5	%		35.9	%		31.9	%		32.0	%		33.2	%

Selling, general and administrative expense consists of compensation expense, including share-based compensation, for management and administrative personnel, selling and marketing expense, facilities costs, depreciation, professional service fees, including legal and accounting services, legal settlements, acquisition and transaction-related costs, and other general corporate and administrative expenses.

Share-based compensation expense included in selling, general and administrative expenses was ~~$5.3~~$6.6 million and ~~$4.3~~$4.9 million for the three months ended ~~December 31,~~June 30, 2022 and 2021, and 2020, respectively. Share-based compensation expense included in selling, general and administrative expenses was $13.7 million and $12.2 million for the nine months ended December 31, 2021 and 2020, respectively. Refer to Note 13, "Stockholders’ Equity" of our notes to condensed consolidated financial statements included elsewhere in this Report for additional information of our share-based awards and related incentive plans.

Selling, general and administrative expenses ~~decreased $1.7~~increased $0.5 million in the three months ended ~~December 31, 2021~~June 30, 2022 compared to the prior year. The ~~decrease~~increase was primarily due to ~~lower facilities~~increases in travel, conferences, and conventions costs as these activities begin to resume, higher personnel costs from our annual merit increases, higher commissions, and increased employee insurance costs, and

increases in consulting and marketing costs. These increases were partially offset by lower legal and related costs associated with the Hussein Litigation matter that concluded in July 2021, as discussed further in Note 15, “Commitments, Guarantees and Contingencies.” These decreases were partially offset by increases in salaries and benefits, share-based compensation, annual bonus expense, and incremental proxy contest expenses associated with our annual shareholders’ meeting.

Selling, general and administrative expenses increased $28.0 million in the current period primarily due to increased legal fees associated with our shareholder disputes and related matters, including a $11.4 million payment related to the indemnification of certain expenses related to the Hussein Litigation matter, approximately $9.3 million of incremental proxy contest expenses associated with our annual shareholders’ meeting, and increase in salaries and benefits, annual bonus expense, commissions, and other personnel costs, including costs of our 401(k) employer match that was temporarily suspended in the prior year as a cost-savings measure after the onset of the COVID-19 pandemic. These increases were partially offset by decreases in facilities and depreciation costs.

The following table presents our consolidated net research and development costs, capitalized software costs, and gross expenditures prior to capitalization, for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ (in thousands):

	Three Months Ended December 31,						Nine Months Ended December 31,						Three Months Ended June 30,
	2021			2020			2021			2020			2022			2021
Gross expenditures	$	25,514		$	25,028		$	75,066		$	73,025		$	30,793		$	24,859
Capitalized software costs		(6,124	)		(6,831	)		(17,837	)		(18,914	)		(8,998	)		(5,538	)
Research and development costs, net	$	19,390		$	18,197		$	57,229		$	54,111		$	21,795		$	19,321

Research and development costs, as a percentage of revenue		13.0	%		12.8	%		12.9	%		13.1	%		14.2	%		13.2	%
Capitalized software costs as a percentage of gross expenditures		24.0	%		27.3	%		23.8	%		25.9	%		29.2	%		22.3	%

Gross research and development expenditures, including costs expensed and costs capitalized, consist of compensation expense, including share-based compensation for research and development personnel, certain third-party consultant fees, software maintenance costs, and other costs related to new product development and enhancement to our existing products.

The healthcare information systems and services industry is characterized by rapid technological change, requiring us to engage in continuing investments in our research and development to update, enhance and improve our systems. This includes expansion of our software and service offerings that support pay-for-performance initiatives around accountable care organizations, bringing greater ease of use and intuitiveness to our software products, enhancing our managed cloud and hosting services to lower our clients' total cost of ownership, expanding our interoperability and enterprise analytics capabilities, and furthering development and enhancements of our portfolio of specialty-focused templates within our electronic health records software.

The capitalization of software development costs results in a reduction to our reported net research and development costs. Our software capitalization rate, or capitalized software costs as a percentage of gross expenditures, has varied historically and may continue to vary based on the nature and status of specific projects and initiatives in progress. Although changes in software capitalization rates have no impact on our overall cash flows, it results in fluctuations in the amount of software development costs that may be capitalized or expensed up front and the amount of net research and development costs reported in our condensed consolidated statements of net income and comprehensive income, and ultimately also affects the future amortization of our previously capitalized software development costs. Refer to Note 8, "Capitalized Software Costs" of our notes to condensed consolidated financial statements included elsewhere in this Report for additional information on current period amortization of capitalized software costs and an estimate of future expected amortization.

Share-based compensation expense included in research and development costs was ~~$1.2~~$1.6 million and ~~$1.1~~$1.0 million for the three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020, respectively. Share-based compensation expense included in research and development costs was $3.4 million and $3.0 million for the nine months ended December 31, 2021 and 2020,~~ respectively.

Net research and development costs for the three months ended ~~December 31, 2021~~June 30, 2022 increased ~~$1.2~~$2.5 million compared to the prior year period due to ~~$0.5~~$5.9 million higher gross expenditures, ~~and $0.7~~offset by $3.5 million ~~lower capitalization of software costs.~~

~~Net research and development costs for the nine months ended December 31, 2021 increased $3.1 million compared to the prior year period due to $2.0 million~~ higher ~~gross expenditures and $1.1 million lower~~ capitalization of software costs.

The increase in gross expenditures in the three ~~and nine~~ months ended ~~December 31, 2021~~June 30, 2022 compared to the prior year was primarily driven by higher ~~consulting~~personnel costs due to our annual merit increases and increased headcount as well as an increase in ~~annual bonus expense, and higher internal hosting~~consulting costs. The increase in the nine-month period included costs of reimplementing our 401(k) employer match that was temporarily suspended in the prior year as a cost-savings measure after the onset of the COVID-19 pandemic. These increases were partially offset by lower salaries and wages due to lower employee headcount. Capitalization of software costs decreased in the three and nine months ended December 31, 2021 compared to the prior year periods due to several projects going live in the current period. Our software capitalization rate fluctuates due to differences in the nature and status of our projects and initiatives during a given year, which affects the amount of development costs that may be capitalized.

The following table presents our amortization of acquired intangible assets for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ (in thousands):

Amortization of acquired intangible assets included in operating expense consists of the amortization related to our customer relationships and trade names intangible assets acquired as part of our business combinations. Refer to Note 7, "Intangible Assets" of our notes to condensed consolidated financial statements included elsewhere in this Report for an estimate of future expected amortization.

Amortization of acquired intangible assets for the three ~~and nine~~ months ended ~~December 31, 2021~~June 30, 2022 decreased $0.2 million ~~and $0.7 million, respectively~~ compared to the prior year ~~periods~~period due to lower amortization of the customer relationships intangible assets associated with Medfusion and HealthFusion as these assets are amortized under the accelerated method of amortization.

In the nine months ended December 31, 2021 and 2020, we recorded restructuring costs of $0.5 million and $2.6 million, respectively, consisting of payroll-related costs, such as severance, outplacement costs, and continuing healthcare coverage, associated with the involuntary separation of employees pursuant to a one-time benefit arrangement, within operating expenses in our condensed consolidated statements of net income and comprehensive income.

In the nine months ended December 31, 2021, we vacated portions of certain leased locations and recorded impairments of $1.6 million, to our right-of-use assets and certain related fixed assets associated with the vacated locations, or portions thereof, in Irvine, CA and Fairport, NY based on projected sublease rental income and estimated sublease commencement dates. In the three and nine months ended December 31, 2020, as part of our response to the COVID-19 pandemic and ongoing cost reduction efforts, we vacated a portion of our Irvine office and the remainder of our San Diego office, and recorded impairments of $2.2 million to our operating right-of-use assets and certain related fixed assets associated with the vacated locations based on projected sublease rental income and estimated sublease commencement dates.

The following table presents our interest expense for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ (in thousands):

	Three Months Ended December 31,						Nine Months Ended December 31,						Three Months Ended June 30,
	2021			2020			2021			2020			2022			2021
Interest income	$	50		$	9		$	79		$	27		$	46		$	12
Interest expense		(321	)		(631	)		(958	)		(2,873	)		(330	)		(317	)
Other expense, net		(9	)		(15	)		(43	)		(17	)		(5	)		(22	)

Interest expense relates to our revolving credit agreement and the related amortization of deferred debt issuance costs. Refer to Note 9, “Line of Credit” of our notes to condensed consolidated financial statements included elsewhere in this Report for additional information.

The changes in interest expense are primarily caused by fluctuations in outstanding balances under our revolving credit agreement and the related amortization of debt issuance costs. As of ~~December 31,~~June 30, 2022 and June 30, 2021, we had no outstanding balances under the revolving credit ~~agreement, compared to $29.0 million outstanding as of December 31, 2020.~~agreement. Interest income is earned from funds in our money market accounts. The ~~fluctuations~~fluctuation of other income and expense compared to the prior year ~~periods~~period are primarily due to changes to the India foreign exchange rates.

The following table presents our provision for (benefit of) income taxes for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ (in thousands):

	Three Months Ended December 31,						Nine Months Ended December 31,						Three Months Ended June 30,
	2021			2020			2021			2020			2022			2021
Provision for (benefit of) income taxes	$	2,535		$	(169	)	$	1,653		$	149			(247	)	$	559
Effective tax rate		32.8	%		(57.3	)%		56.6	%		1.5	%
Effective tax (benefit) rate														(27.4	)%		16.4	%

The ~~increases~~decrease in the effective tax ~~rates~~rate for the three ~~and nine~~ months ended ~~December 31, 2021~~June 30, 2022 compared to the prior period was primarily due to the impact of reduced pre-tax book income on rate reconciling items andthe increased net benefit of discrete items in the current period compared to prior year, offset by a net decrease of the research and development credit, foreign rate differential benefit, and higher nondeductible officer compensation.

The following table presents selected financial statistics and information for the ~~nine~~three months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ (in thousands):

	Nine Months Ended December 31,				Three Months Ended June 30,
	2021		2020		2022			2021
Cash and cash equivalents	$	49,429	$	89,523	$	40,361		$	63,002
Unused portion of revolving credit agreement ⁽¹⁾		300,000		271,000		300,000			300,000
Total liquidity	$	349,429	$	360,523	$	340,361		$	363,002

Net income	$	1,270	$	10,095	$	1,148		$	2,848
Net cash provided by operating activities	$	36,636	$	75,978	$	(4,645	)	$	313

We had no outstanding borrowings under our revolving credit agreement as of ~~December 31, 2021 and~~June 30, 2022, March 31, ~~2021 compared to $29.0 million as of December 31, 2020.~~2022, and June 30, 2021. Our principal sources of liquidity are our cash generated from operations, driven mostly by our net income and working capital management, our cash and cash equivalents, and our revolving credit agreement.

We believe that our cash and cash equivalents balance as of ~~December 31, 2021,~~June 30, 2022, together with our cash flows from operating activities and liquidity provided by our revolving credit agreement, will be sufficient to meet our working capital and capital expenditure requirements for the next twelve months.

During the challenging and uncertain period brought on by the initial phases of the COVID-19 pandemic in the prior year, we had proactively strengthened our cash position by increasing the outstanding borrowings under our revolving credit agreement as of ~~December 31, 2020~~, which was subsequently repaid based on the reassessment of our short-term cash flow and working capital requirements. We have no outstanding borrowings under our revolving credit agreement as of December 31, 2021.

At present, we are conducting business as usual with certain modifications to employee travel, employee work locations, and marketing events, among other modifications. However, the extent to which COVID-19 may continue to impact our business, financial results, cash flows, and liquidity requirements depends on numerous evolving factors including, but not limited to, the magnitude and duration of COVID-19; the impact on our employees; the extent to which it impacts worldwide macroeconomic conditions, including interest rates, employment rates, and health insurance coverage; the speed of the recovery; and governmental and business reactions to the pandemic. We continue to monitor the broader implications of the global COVID-19 pandemic and may take further actions that we determine are in the best interests of our employees, customers, partners, suppliers, and shareholders.

As of ~~December 31, 2021,~~June 30, 2022, our cash and cash equivalents balance of ~~$49.4~~$40.4 million compares to ~~$73.3~~$59.8 million as of March 31, ~~2021~~2022 and ~~$89.5~~$63.0 million as of ~~December 31, 2020.~~June 30, 2021.

We may continue to use a portion of our funds as well as available financing from our revolving credit agreement, to the extent permissible, for share repurchases, future acquisitions, or other similar business activities, although the specific timing and amount of funds to be used is not currently determinable. We intend to expend some of our available funds for the development of products complementary to our existing product line as well as new versions of certain of our products. These developments are intended to take advantage of more powerful technologies and to increase the integration of our products.

Our investment policy is determined by our Board of Directors. Excess cash, if any, may be invested in very liquid short term assets including tax exempt and taxable money market funds, certificates of deposit and short term municipal bonds with average maturities of 365 days or less at the time of purchase. Our Board of Directors continues to review alternate uses for our cash including an expansion of our investment policy and other items. Any or all of these programs could significantly impact our investment income in future periods.

The following table summarizes our condensed consolidated statements of cash flows for the ~~nine~~three months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ (in thousands):

	Nine Months Ended December 31,						Three Months Ended June 30,
	2021			2020			2022			2021
Net income	$	1,270		$	10,095		$	1,148		$	2,848
Non-cash expenses		59,489			66,241			19,340			20,151
Cash from net income, as adjusted	$	60,759		$	76,336		$	20,488		$	22,999
Change in contract assets and liabilities, net		(2,770	)		(12,189	)		1,688			(1,501	)
Change in accounts receivable		6,319			1,221			(1,464	)		3,407
Change in all other assets and liabilities		(27,672	)		10,610			(25,357	)		(24,592	)
Net cash provided by operating activities	$	36,636		$	75,978		$	(4,645	)	$	313

For the ~~nine~~three months ended ~~December 31, 2021,~~June 30, 2022, cash ~~provided~~used by operating activities ~~decreased $39.3~~increased $5.0 million compared to the prior year period, primarily due to ~~decreases of $38.2~~a $4.9 million decrease in cash from changes in ~~other assets and liabilities and $15.6~~accounts receivable, $2.5 million lower cash from net income, as adjusted for non-cash expenses, ~~including the $11.4~~and $0.8 million of ~~incremental costs related to the indemnification of certain expenses related to the Hussein Litigation matter that was paid~~decreases in cash from changes in other assets and ~~impacted net income in the nine months ended December 31, 2021 and $9.3 million of incremental proxy contest expenses associated with our annual shareholders’ meeting,~~liabilities, partially offset by ~~increases~~an increase in cash of ~~$9.4~~$3.2 million from net changes in contract assets and ~~liabilities and $5.1 million increases from changes in accounts receivable.~~

liabilities. The decrease in cash from ~~net~~changes in accounts receivable is primarily due to higher accounts receivable from our annual CPI fee increases and increases in invoicing from higher recent bookings, partially offset by continued efforts to resolve aged balances and improve collections. Net income for the three months decreased $1.7 million compared to the prior year period, as described in the sections above. Non-cash expenses decreased primarily due to lower depreciation, lower amortization of our operating right of use assets, lower amortization of our purchased intangibles, and lower amortization of capitalized software costs, partially offset by higher share-based compensation expense. The decrease in cash from changes in other assets and liabilities ~~was~~is primarily due to ~~higher payments of cash incentive bonuses compared to the prior year due to a higher rate of bonus achievement, payments~~lower accruals of legal ~~fees associated with our shareholder litigation matter, payments of our~~expenses and deferred payroll taxes, ~~associated with the CARES Act, payment of the 401(k) employer match that was temporarily suspended in the prior year,~~as well as higher prepaid commissions, prepaid insurance, and ~~an increase in income tax receivable.~~other general prepaid expenses. These decreases were partially offset by an increase in cash from changes in accounts payable due to timing of invoice

payments. Net income for the nine months decreased $8.8 million compared to the prior year period, as described in the “Net Income” section above. Non-cash expenses decreased primarily due to lower amortization of intangible assets, partially offset by higher amortization of capitalized software costs and higher share-based compensation expenses. The increase in cash from changes in net contract assets and liabilities was primarily due to higher ~~subscriptions~~ invoicing associated with higher bookings and sales ~~volume. Accounts receivable balances continue to decrease from~~volume and our efforts to collect and resolve aged balances, resulting in a corresponding increase in cash provided by operating activities of $6.3 million and $1.2 million in the nine months ended December 31, 2021 and 2020, respectively.annual CPI fee increases.

Net cash used in investing activities for the ~~nine~~three months ended ~~December 31, 2021~~June 30, 2022 was ~~$19.9~~$9.5 million compared with ~~$20.7~~$6.5 million in the prior year period. The ~~decrease~~increase in net cash used in investing activities is primarily due to ~~lower~~higher additions to capitalized software, ~~and payments of acquisition related working capital adjustments in the prior period,~~ partially offset by ~~higher~~lower additions in equipment and improvements in the current period.

Net cash used in financing activities for the ~~nine~~three months ended ~~December 31, 2021~~June 30, 2022 was ~~$41.0~~$4.1 million compared with ~~$101.9~~$2.3 million cash used in financing activities in the prior year period. The decrease in cash used in financing activities is primarily due to ~~net principal repayments of $100.0 million on our revolving credit agreement in nine months ended December 31, 2020, partially offset by $35.9~~$2.5 million in share repurchases in the current period, higher payments for taxes related to net share settlement of equity awards, ~~and lower~~partially offset by higher proceeds from the issuance of shares under our employee equity plans in the ~~nine~~three months ended ~~December 31, 2021.~~June 30, 2022.

On March 12, 2021, we entered into a $300 million ~~related to payments due under certain non-cancelable agreements to purchase goods~~second amended and ~~services.~~

restated revolving credit agreement (the “Credit Agreement”). The ~~following table summarizes our significant contractual obligations at December 31, 2021~~Credit Agreement matures on March 12, 2026 and the ~~effect~~full balance of the revolving loans and all other obligations under the Credit Agreement must be paid at that ~~such obligations~~time. In addition, we are ~~expected~~required to ~~have on~~prepay the revolving loan balance if at any time the aggregate principal amount outstanding under the Credit Agreement exceeds the aggregate commitments thereunder. On May 17, 2022, we entered into an amendment to the Credit Agreement, which, among other changes, provides more favorable terms and flexibility with regards to our ~~liquidity~~ability to obtain additional revolving credit commitments and/or term loans thereunder, including amendments to the net leverage ratio and ~~cash in future periods (in thousands):~~definition of restricted payments.

~~The deferred compensation liability as~~As of ~~December 31, 2021 was $7.7 million, which is not included in~~June 30, 2022, we had no outstanding borrowings under the ~~table above as the timing of future benefit payments to employees is not determinable.~~

~~The impact of our uncertain tax positions is not included in the table above as the timing of expected payments is not determinable.~~Credit Agreement. Refer to Note ~~11, “Income Taxes”~~9, “Line of Credit” of our notes to condensed consolidated financial statements included elsewhere in this Report for additional information.

As of June 30, 2022, the total amount of future lease payments under operating leases was $19.0 million, of which $8.7 million is short-term. Our operating leases have a weighted average remaining lease term of 2.5 years. Included in our total future lease payments are $10.2 million of remaining lease obligations for vacated properties, of which $5.4 million is short-term. Remaining lease obligations for vacated properties relates to certain locations, including Cary, Brentwood, North Canton, Fairport and portions of Atlanta, Horsham, St. Louis, Hunt Valley, and Bangalore that we have vacated as part of our reorganization efforts and are actively marketing for sublease. Refer to Note 5, “Leases” of our notes to consolidated financial statements included elsewhere in this Report for additional information. The remaining obligations have not been reduced by projected sublease rentals or by minimum sublease rentals of $2.2 milliondue in future periods under non-cancelable subleases.

As of June 30, 2022, we had minimum purchase commitments of $186.0 million related to payments due under certain non-cancelable agreements to purchase goods and services, of which $30.3 million is due within the next 12 months.

In October 2021, the Board authorized a share repurchase program under which we may repurchase up to $60.0 million of our outstanding shares of common stock through March 2023. The timing and amount of any share repurchases under the share repurchase program will be determined by our management at its discretion based on ongoing assessments of the capital needs of the business, the market price of our common stock and general market conditions. The program does not obligate the Company to acquire any particular amount of our common stock, and the share repurchase program may be suspended or discontinued at any time at our discretion.

During the three months ended June 30, 2022, we repurchased 0.1 million shares of common stock for a total of $2.5 million at a weighted-average share repurchase price of approximately $16.93. As of June 30, 2022, $21.6 million remained available for share repurchases pursuant to the Company’s share repurchase program.

Deferred compensation liability was $7.2 million, for which timing of future benefit payments to employees is not determinable. To offset this liability, we have purchased life insurance policies on some of the participants. The Company is the owner and beneficiary of the policies and the cash values are intended to produce cash needed to help make the benefit payments to employees when they retire or otherwise leave the Company. The cash surrender value of the life insurance policies for deferred compensation was $7.3 million.

We have an uncertain tax position liability of $4.2 million as of June 30, 2022, for which timing of expected payments is not determinable.

During the three months ended, we did not have any relationships with unconsolidated organizations, financial partnerships, or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other limited purposes.

Refer to Note 1, “Summary of Significant Accounting Policies” of our notes to condensed consolidated financial statements included elsewhere in this Report for a discussion of new accounting standards.

The discussion and analysis of our condensed consolidated financial statements and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenue and expenses, and related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends, and other factors we believe to be reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. On a regular basis, we review the accounting policies and update our assumptions, estimates, and judgments, as needed, to ensure that our condensed consolidated financial statements are presented fairly and in accordance with GAAP. Actual results could differ materially from our estimates under different assumptions or conditions. To the extent that there are material differences between our estimates and actual results, our financial condition or results of operations will be affected.

We describe our significant accounting policies in Note 1, “Summary of Significant Accounting Policies,” of our notes to consolidated financial statements included in our Annual Report. We discuss our critical accounting policies and estimates in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report.

There have been no other material changes in our significant accounting policies or critical accounting policies and estimates since the fiscal year ended March 31, ~~2021.~~2022.

As of ~~December 31, 2021,~~June 30, 2022, we were subject to minimal market risk on our cash and cash equivalents as we maintained our balances in very liquid funds with maturities of 90 days or less at the time of purchase.

As of ~~December 31, 2021,~~June 30, 2022, we had no outstanding loans under our revolving credit agreement. The revolving loans under the Credit Agreement bear interest at either, at our option of either, (a) for base rate loans, a base rate based on the highest of (i) 1%, (ii) the “prime rate” quoted in the Wall Street Journal for the United States of America, (iii) the overnight bank funding rate (not to be less than zero) as determined by the Federal Reserve Bank of New York plus 0.50% or (iv) the LIBOR-based rate for one month Eurodollar deposits plus 1%, and (b) for Eurodollar loans, the LIBOR-based rate for one, two, three or six months (as selected by the Company) Eurodollar deposits plus, in each case, an applicable margin based on our net leverage ratio from time to time, ranging from 0.50% to 1.75% for base rate loans, and from 1.50% to 2.75% for Eurodollar loans. Accordingly, we are exposed to interest rate risk, primarily changes in LIBOR (including the transition away from LIBOR), due to our loans under the revolving credit agreement. Refer to Note 9, “Line of Credit” of our notes to condensed consolidated financial statements included elsewhere in this Report for additional information.

As of ~~December 31, 2021,~~June 30, 2022, we had international operations that exposed us to the risk of fluctuations in foreign currency exchange rates against the United States dollar. However, the impact of foreign currency fluctuations has not been material to our financial position or operating results.

Our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively) have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Security Exchange Act of 1934, as amended, the "Exchange Act") as ~~December 31, 2021,~~June 30, 2022, the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”). They have concluded that, as of the Evaluation Date, these disclosure controls and procedures were effective to ensure that material information relating to the Company and its consolidated subsidiaries would be made known to them by others within those entities and would be disclosed on a timely basis. The Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are designed, and are effective, to give reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time period specified in the rules and forms of the Securities and Exchange Commission. They have also concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that are filed or submitted under the Exchange Act are accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

During the quarter ended ~~December 31, 2021,~~June 30, 2022, there were no changes in our “internal control over financial reporting” (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~On October 7, 2013, a complaint was filed against our Company~~The information required by Item 1 is incorporated herein by reference from Note 15, “Commitments, Guarantees and ~~certain~~Contingencies” of our officers and directors in the Superior Court of the State of California for the County of Orange, captioned Ahmed D. Hussein v. Sheldon Razin, Steven Plochocki, Quality Systems, Inc. and Does 1-10, inclusive, No. 30-2013-00679600-CU-NP-CJC, by Ahmed Hussein, a former director and significant shareholder of our Company. After the court sustained our demurrernotes to the initial complaint, Hussein filed an amended complaint on April 25, 2014. The amended complaint generally alleges fraud and deceit, constructive fraud, negligent misrepresentation and breach of fiduciary duty in connection withcondensed consolidated financial statements made to our shareholders regarding our financial condition and projected future performance. The amended complaint seeks actual damages, exemplary and punitive damages and costs. Hussein’s breach of fiduciary duty claims were dismissed on demurrer, and we filed an answer and cross-complaint against Hussein, alleging that he breached fiduciary duties owed to the Company. On September 16, 2015, the Court granted summary judgment with respect to Hussein’s remaining claims, dismissing all claims against us. The cross-complaint against Hussein went to trial, but the Court granted judgment in favor of Hussein on our cross-complaint. Final judgment over Hussein’s claims and our cross-claims was entered on January 9, 2018. Hussein appealed the order granting summary judgment over his claims, and we appealed the court’s decision granting Hussein’s motion for judgment on our cross-complaint. On October 8, 2019, the California State Court of Appeal for the Fourth Appellate District, Division Three, reversed the Superior Court’s grant of summary judgment on Hussein’s affirmative claims and affirmed the trial court’s judgement on the Company’s breach of fiduciary duty claims against Hussein. As a result, the case has returned to the trial court for resolution of Hussein’s claims against us. Trial commenced on July 6, 2021. On July 29, 2021, a jury rendered a verdict in favor of the Company and the individual defendants on all counts. ~~Hussein filed a Motion for New Trial, which the Court denied.~~

Separately, Hussein has issued an arbitration demand seeking indemnification for the fees he incurred defending against our cross-complaint. Following briefing and a hearing at the liability phase of the arbitration, the arbitrator held that Hussein is entitled to indemnification for “expenses” (as that term is defined in Hussein’s indemnification agreement with NextGen) incurred in defense of NextGen’s cross-complaint against him. The arbitrator reserved all other claims related to costs and damages for a second phase of the arbitration. On June 10, 2021, the arbitrator heard arguments on the quantum of indemnifiable expenses. On September 2, 2021, the arbitrator awarded Hussein indemnification for fees and costs incurred defending the cross-complaint. After trebling the fees incurred pursuant to Hussein’s supplemental agreement with his attorneys, and adding in interest and costs, the arbitrator calculated that the Company owes Mr. Hussein $11.4 million in indemnification, which we subsequently paid on September 30, 2021.

Commencing in April 2017, we have received requests for documents and information from the United States Attorney's Office for the District of Vermont and other government agencies in connection with an investigation concerning the certification we obtained for our software under the United States Department of Health and Human Services' Electronic Health Record (EHR) Incentive Program. The requests for information relate to, among other things: (a) data used to determine objectives and measures under the Meaningful Use (MU) and the Physician Quality Reporting System (PQRS) programs, (b) our EHR product and its performance, including defects that relate to patient safety or meaningful use certifications, (c) the software code used in certifying our EHR software and information, and (d) marketing programs and payments provided for the referral of EHR business. We continue to cooperate in this investigation by responding to the government’s requests. Requests and investigations of this nature may lead to future requests for information and ultimately the assertion of claims or the commencement of legal proceedings against us, as well as other material liabilities. In addition, our responses to these and any future requests require time and effort, which can result in additional cost to us. At this time, we are unable to estimate the probability or the amount of liability, if any, related to this matter. Given the highly-regulated nature of our industry, we may, from time to time, be subject to subpoenas, requests for information, or investigations from various government agencies. It is our practice to respond to such matters in a cooperative, thorough and timely manner.Report.

Our business is subject to many risks and uncertainties, which may materially and adversely affect our future business, prospects, financial condition, and results of operations. These risk factors are disclosed in “Item 1A. Risk Factors” in our Annual Report.

Month	Total Number of Shares Purchased ⁽¹⁾		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs⁽¹⁾		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program		Total Number of Shares Purchased ⁽¹⁾		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs⁽¹⁾		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
November 1 - 30		2,009,623	$	16.55		2,009,623	$	26,749,634
December 1 - 31		160,273	$	16.37		160,273	$	24,125,801
April 1 - 30										—	$	-		—	$	24,126
May 1 - 31										—	$	-		—	$	24,126
June 1 - 30										147,990	$	16.93		147,990	$	21,621
Total		2,169,896	$	16.53		2,169,896				147,990				147,990

			Incorporated by Reference
Exhibit Number	Exhibit Description	Filed Herewith	Form	Exhibit	Filing Date
10.1	Amendment No. 1 to Credit Agreement, dated as of May 17, 2022, by and among NextGen Healthcare, Inc., JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto.	X

31.1	Certification of Principal Executive Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	X

31.2	Certification of Principal Financial Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	X

32.1	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	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

101.CAL**	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB**	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE**	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~December 31, 2021,~~June 30, 2022, has been formatted in Inline XBRL.

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.

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 Par Value	NXGN	NASDAQ Global Select Market

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Small reporting company ☐
	Emerging growth company ☐

	Item	Page
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements.	3
	Unaudited Condensed Consolidated Balance Sheets as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021~~2022	3
	Unaudited Condensed Consolidated Statements of Net Income and Comprehensive Income for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~	4
	Unaudited Statements of Condensed Consolidated Stockholders’ Equity for the ~~nine~~three months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~	5
	Unaudited Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~	76
	Notes to Unaudited Condensed Consolidated Financial Statements	87
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	2524
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	3735
Item 4.	Controls and Procedures.	3735
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings.	3836
Item 1A.	Risk Factors.	3836
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	3936
Item 3.	Defaults Upon Senior Securities.	3936
Item 4.	Mine Safety Disclosure.	3936
Item 5.	Other Information.	3936
Item 6.	Exhibits.	4037
	Signatures	4138

Note		Page

Note 1	Summary of Significant Accounting Policies	98
Note 2	Revenue from Contracts with Customers	109
Note 3	Accounts Receivable	1211
Note 4	Fair Value Measurements	1312
Note 5	Leases	1312
Note 6	Goodwill	1514
Note 7	Intangible Assets	1514
Note 8	Capitalized Software Costs	1615
Note 9	Line of Credit	1615
Note 10	Composition of Certain Financial Statement Captions	1716
Note 11	Income Taxes	1817
Note 12	Earnings Per Share	1918
Note 13	Stockholders' Equity	1918
Note 14	Concentration of Credit Risk	2322
Note 15	Commitments, Guarantees and Contingencies	2322
Note 16	~~Restructuring Plan~~Subsequent Event	2423

Balance at March 31, 2021	$	533
Fair value adjustments		7
Payment of Topaz contingent consideration		(540	)
Balance at December 31, 2021	$	0

	Nine Months Ended December 31, 2020
					Additional						Accumulated Other			Total
	Common Stock				Paid-in			Retained			Comprehensive			Shareholders'
	Shares		Amount		Capital			Earnings			Loss			Equity
Balance, March 31, 2020		66,134	$	661	$	282,857		$	119,119		$	(2,143	)	$	400,494
Common stock issued under stock plans, net of shares withheld for taxes		535		6		(1,414	)		—			—			(1,408	)
Stock-based compensation		—		—		5,393			—			—			5,393
Components of other comprehensive income (loss):
Translation adjustments		—		—		—			—			(13	)		(13	)
Net income (loss)		—		—		—			(824	)		—			(824	)
Balance, June 30, 2020		66,669		667		286,836			118,295			(2,156	)		403,642
Common stock issued under stock plans, net of shares withheld for taxes		65		—		(45	)		—			—			(45	)
Stock-based compensation		—		—		5,437			—			—			5,437
Components of other comprehensive income:
Translation adjustments		—		—		—			—			102			102
Net income		—		—		—			10,455			—			10,455
Balance, September 30, 2020		66,734		667		292,228			128,750			(2,054	)		419,591
Common stock issued under stock plans, net of shares withheld for taxes		268		3		(450	)		—			—			(447	)
Stock-based compensation		—		—		5,933			—			—			5,933
Components of other comprehensive income:
Translation adjustments		—		—		—			—			171			171
Net income		—		—		—			464			—			464
Balance, December 31, 2020		67,002	$	670	$	297,711		$	129,214		$	(1,883	)	$	425,712

Balance as of September 30, 2021	$	(3,653	)
Additions charged to costs and expenses		(463	)
Deductions		112
Balance as of December 31, 2021	$	(4,004	)

	December 31, 2021		March 31, 2021
Accrued bonus	$	20,891	$	29,382
Accrued vacation		11,023		12,038
Deferred payroll taxes		6,088		3,817
Accrued commissions		3,473		4,628
Accrued payroll and other		544		509
Accrued compensation and related benefits	$	42,019	$	50,374

			For the year ended March 31,
Contractual Obligations	Total		2022 (remaining three months)		2023		2024		2025		2026		2027 and beyond
Operating lease obligations	$	14,160	$	1,486	$	5,017	$	4,137	$	2,486	$	1,034	$	—
Remaining lease obligations for vacated properties⁽¹⁾		8,447		1,419		3,266		2,201		1,338		223		—
Total	$	22,607	$	2,905	$	8,283	$	6,338	$	3,824	$	1,257	$	—

		NEXTGEN HEALTHCARE, INC.

Date: ~~January 25~~July 26, 2022	By:	/s/ David Sides
		David Sides
		Chief Executive Officer (Principal Executive Officer)
Date: ~~January 25~~July 26, 2022	By:	/s/ James R. Arnold, Jr.
		James R. Arnold, Jr.
		Chief Financial Officer (Principal Financial Officer)
Date: ~~January 25~~July 26, 2022	By:	/s/ David Ahmadzai
		David Ahmadzai
		Chief Accounting Officer (Principal Accounting Officer)