Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 27, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-10485 | |
Entity Registrant Name | TYLER TECHNOLOGIES, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-2303920 | |
Entity Address, Address Line One | 5101 TENNYSON PARKWAY | |
Entity Address, City or Town | PLANO | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75024 | |
City Area Code | 972 | |
Local Phone Number | 713-3700 | |
Title of 12(b) Security | COMMON STOCK, $0.01 PAR VALUE | |
Trading Symbol | TYL | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 39,761,629 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000860731 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Total revenues | $ 276,541 | $ 247,066 |
Cost of revenues: | ||
Total cost of revenues | 147,410 | 131,018 |
Gross profit | 129,131 | 116,048 |
Selling, general and administrative expenses | 67,485 | 57,766 |
Research and development expense | 22,361 | 18,941 |
Amortization of other intangibles | 5,392 | 4,850 |
Operating income | 33,893 | 34,491 |
Other income, net | 990 | 586 |
Income before income taxes | 34,883 | 35,077 |
Income tax (benefit) provision | (12,667) | 7,729 |
Net income | $ 47,550 | $ 27,348 |
Earnings per common share: | ||
Basic (usd per share) | $ 1.20 | $ 0.71 |
Diluted (usd per share) | $ 1.16 | $ 0.69 |
Software licenses and royalties | ||
Revenues: | ||
Total revenues | $ 18,737 | $ 21,793 |
Cost of revenues: | ||
Total cost of revenues | 740 | 818 |
Subscriptions | ||
Revenues: | ||
Total revenues | 81,723 | 67,275 |
Acquired software | ||
Cost of revenues: | ||
Total cost of revenues | 8,027 | 6,682 |
Software services | ||
Revenues: | ||
Total revenues | 52,133 | 48,443 |
Software services, maintenance and subscriptions | ||
Cost of revenues: | ||
Total cost of revenues | 131,779 | 117,160 |
Maintenance | ||
Revenues: | ||
Total revenues | 114,365 | 100,152 |
Appraisal services | ||
Revenues: | ||
Total revenues | 5,763 | 5,214 |
Cost of revenues: | ||
Total cost of revenues | 4,385 | 3,452 |
Hardware and other | ||
Revenues: | ||
Total revenues | 3,820 | 4,189 |
Cost of revenues: | ||
Total cost of revenues | $ 2,479 | $ 2,906 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 301,985 | $ 232,682 |
Accounts receivable (less allowance for losses and sales adjustments of $6,470 in 2020 and $5,738 in 2019) | 318,144 | 374,089 |
Short-term investments | 38,250 | 39,399 |
Prepaid expenses | 33,964 | 24,717 |
Income tax receivable | 16,657 | 6,482 |
Other current assets | 3,220 | 2,328 |
Total current assets | 712,220 | 679,697 |
Accounts receivable, long-term | 21,394 | 22,432 |
Operating lease right-of-use assets | 17,992 | 18,992 |
Property and equipment, net | 175,460 | 171,861 |
Other assets: | ||
Goodwill | 840,028 | 840,117 |
Other intangibles, net | 366,506 | 378,914 |
Non-current investments and other assets | 85,776 | 79,601 |
Total assets | 2,219,376 | 2,191,614 |
Current liabilities: | ||
Accounts payable | 12,958 | 14,977 |
Accrued liabilities | 59,765 | 75,234 |
Operating lease liabilities | 6,373 | 6,387 |
Current income tax payable | 0 | 0 |
Deferred revenue | 365,959 | 412,495 |
Total current liabilities | 445,055 | 509,093 |
Revolving line of credit | 0 | 0 |
Deferred revenue, long-term | 167 | 199 |
Deferred income taxes | 45,774 | 48,442 |
Operating lease liabilities, long-term | 15,548 | 16,822 |
Commitments and contingencies | 0 | 0 |
Shareholders' equity: | ||
Preferred stock, $10.00 par value; 1,000,000 shares authorized; none issued | 0 | 0 |
Common stock, $0.01 par value; 100,000,000 shares authorized; 48,147,969 shares issued and outstanding as of March 31, 2020 and December 31, 2019 | 481 | 481 |
Additional paid-in capital | 798,089 | 739,478 |
Accumulated other comprehensive loss, net of tax | (46) | (46) |
Retained earnings | 964,886 | 917,336 |
Treasury stock, at cost; 8,397,086 and 8,839,352 shares in 2020 and 2019, respectively | (50,578) | (40,191) |
Total shareholders' equity | 1,712,832 | 1,617,058 |
Total liabilities and shareholders' equity | $ 2,219,376 | $ 2,191,614 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 6,470 | $ 5,738 |
Preferred stock, par value (usd per share) | $ 10 | $ 10 |
Preferred stock, shares authorized (shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (shares) | 48,147,969 | 48,147,969 |
Common stock, shares outstanding (shares) | 48,147,969 | 48,147,969 |
Treasury stock (shares) | 8,397,086 | 8,839,352 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 47,550 | $ 27,348 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 19,985 | 17,308 |
Share-based compensation expense | 17,302 | 14,416 |
Operating lease right-of-use assets expense | 1,457 | 1,165 |
Deferred income tax benefit | (2,668) | (4,785) |
Changes in operating assets and liabilities, exclusive of effects of acquired companies: | ||
Accounts receivable | 56,982 | 9,622 |
Income tax receivable | (10,175) | 12,425 |
Prepaid expenses and other current assets | (11,186) | (3,862) |
Accounts payable | (2,020) | (1,501) |
Operating lease liabilities | (1,743) | (1,272) |
Accrued liabilities | (12,210) | (3,760) |
Deferred revenue | (46,568) | (43,147) |
Net cash provided by operating activities | 56,706 | 23,957 |
Cash flows from investing activities: | ||
Additions to property and equipment | (9,349) | (12,320) |
Purchase of marketable security investments | (27,271) | (3,590) |
Proceeds from marketable security investments | 18,237 | 20,276 |
Purchase of investment in common shares | (10,000) | 0 |
Proceeds from the sale of investment in preferred shares | 15,000 | 0 |
Investment in software | (1,315) | (690) |
Cost of acquisitions, net of cash acquired | (261) | (199,130) |
(Increase) decrease in other | (48) | 564 |
Net cash used by investing activities | (15,007) | (194,890) |
Cash flows from financing activities: | ||
Increase in net borrowings on revolving line of credit | 0 | 85,000 |
Purchase of treasury shares | (15,482) | (17,786) |
Payment of contingent consideration | (5,619) | 0 |
Proceeds from exercise of stock options | 46,236 | 6,528 |
Contributions from employee stock purchase plan | 2,469 | 2,349 |
Net cash provided by financing activities | 27,604 | 76,091 |
Net increase (decrease) in cash and cash equivalents | 69,303 | (94,842) |
Cash and cash equivalents at beginning of period | 232,682 | 134,279 |
Cash and cash equivalents at end of period | $ 301,985 | $ 39,437 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Treasury Stock |
Balance at Dec. 31, 2018 | $ 1,324,846 | $ (1,116) | $ 481 | $ 731,435 | $ (46) | $ 771,925 | $ (1,116) | $ (178,949) |
Beginning balance (in shares) at Dec. 31, 2018 | 48,148 | (9,872) | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 27,348 | 27,348 | ||||||
Exercise of stock options and vesting of restricted stock units | $ 6,528 | (14,405) | $ 20,933 | |||||
Exercise of stock options and vesting of restricted stock units (in shares) | 94 | 111 | ||||||
Employee taxes paid for withheld shares upon equity award settlement | $ (1,337) | $ (1,337) | ||||||
Employee taxes paid for withheld shares upon equity award settlement (in shares) | (7) | |||||||
Stock compensation | 14,416 | 14,416 | ||||||
Issuance of shares pursuant to employee stock purchase plan | $ 2,349 | (373) | $ 2,722 | |||||
Issuance of shares pursuant to employee stock purchase plan (in shares) | 15 | 15 | ||||||
Treasury stock purchases | $ (14,289) | $ (14,289) | ||||||
Treasury stock purchases (in shares) | (72) | (72) | ||||||
Balance at Mar. 31, 2019 | $ 1,358,745 | $ 481 | 731,073 | (46) | 798,157 | $ (170,920) | ||
Ending balance (in shares) at Mar. 31, 2019 | 48,148 | (9,825) | ||||||
Balance at Dec. 31, 2019 | 1,617,058 | $ 481 | 739,478 | (46) | 917,336 | $ (40,191) | ||
Beginning balance (in shares) at Dec. 31, 2019 | 48,148 | (8,839) | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 47,550 | |||||||
Exercise of stock options and vesting of restricted stock units | $ 46,236 | 38,942 | $ 7,294 | |||||
Exercise of stock options and vesting of restricted stock units (in shares) | 481 | 498 | ||||||
Employee taxes paid for withheld shares upon equity award settlement | $ (2,301) | $ (2,301) | ||||||
Employee taxes paid for withheld shares upon equity award settlement (in shares) | (7) | |||||||
Stock compensation | 17,302 | 17,302 | ||||||
Issuance of shares pursuant to employee stock purchase plan | $ 2,469 | 2,367 | $ 102 | |||||
Issuance of shares pursuant to employee stock purchase plan (in shares) | 10 | 10 | ||||||
Treasury stock purchases | $ (15,482) | $ (15,482) | ||||||
Treasury stock purchases (in shares) | (59) | (59) | ||||||
Balance at Mar. 31, 2020 | $ 1,712,832 | $ 481 | $ 798,089 | $ (46) | $ 964,886 | $ (50,578) | ||
Ending balance (in shares) at Mar. 31, 2020 | 48,148 | (8,397) |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation We prepared the accompanying condensed consolidated financial statements following the requirements of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States, or GAAP, for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted for interim periods. Balance sheet amounts are as of March 31, 2020, and December 31, 2019, and operating result amounts are for the three months ended March 31, 2020, and 2019, respectively, and include all normal and recurring adjustments that we considered necessary for the fair summarized presentation of our financial position and operating results. As these are condensed financial statements, one should also read the financial statements and notes included in our latest Form 10-K for the year ended December 31, 2019. Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be the same as those for the full year. Certain amounts for the previous year have been reclassified to conform to the current year presentation. Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions, and other events and circumstances from non-owner sources and includes all components of net income (loss) and other comprehensive income (loss). We had no items of other comprehensive income (loss) for the three months ended March 31, 2020, and 2019. |
Accounting Standards and Signif
Accounting Standards and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Accounting Standards and Significant Accounting Policies | Accounting Standards and Significant Accounting Policies SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Except for the accounting policies for ASU 2016-13, Financial Instruments - Credit Losses, (“ASU 2016-13” ) , there have been no changes to our significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 19, 2020, that have had a material impact on our condensed consolidated financial statements and related notes. Impact of the COVID-19 Pandemic In March 2020, the World Health Organization declared the outbreak of COVID -19 a pandemic, which continues to spread throughout the U.S. and the world and has resulted in authorities implementing numerous measures to contain the virus, including travel bans and restrictions, quarantines, shelter-in-place orders, and business limitations and shutdowns. While we are unable to accurately predict the full impact that COVID-19 will have on our results from operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the duration and severity of the pandemic and containment measures and associated compliance, we do expect the current environment will negatively impact our revenues and other financial results for fiscal 2020. However, for the first quarter of 2020, we did not experience a material negative impact on our financial results associated with the pandemic. Because an increasing portion of our revenues are recurring, the effect of COVID-19 on our results of operations may also not be fully reflected for some time. We expect to see some impact on our business in the near term, with possible delays in government procurement processes and delays in implementations caused by travel restrictions, closed offices, or clients shifting focus to more pressing issues. We are working to address those challenges through adapting the way we do business – encouraging web and video conferencing, conducting sales demonstrations and delivering professional services remotely. Our priorities during this crisis are protecting the health and safety of our employees and our clients. Our IT systems and applications support a remote workforce. Prior to the pandemic, many of our employees worked remotely. In response to the pandemic, we encouraged all employees who are able to do so to work from home, equipping them with resources necessary to continue uninterrupted. We were able to transition the vast majority of our employees to this work-from-home posture. This reduces the number of team members in our offices to those uniquely needed for essential on-site services, such as network operations support staff, and allows for “social distancing” as directed by the Centers for Disease Control ("CDC"). The pandemic has delayed some government procurement processes and is expected to impact our ability to complete certain implementations, negatively impacting our revenue. It could also negatively impact the timing of client payments to us. We continue to monitor these trends in order to respond to the ever-changing impact of COVID-19 on our clients and Tyler’s operations. Recurring revenues, from subscriptions and maintenance revenues, for the three months ended March 31, 2020, comprise 71% of our total consolidated revenue, and include newer transaction-based revenue streams such as e-filing and online payments. As of March 31, 2020, we had $392.6 million in cash and investments and no outstanding borrowings under our credit facility. We also have substantial additional liquidity available through our undrawn $400.0 million credit facility, which can be expanded through an accordion feature. For the first quarter of 2020, the negative impact of the COVID-19 pandemic was not material to our operating results. No asset impairments were recorded as of the balance sheet date as no triggering events or changes in circumstances occurred as of period-end to require such an impairment; however, due to significant uncertainty surrounding the pandemic, management’s judgment regarding this could change in the future. USE OF ESTIMATES The preparation of our financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include revenue recognition, determining the nature and timing of satisfaction of performance obligations, determining the standalone selling price ("SSP") of performance obligations, variable consideration, and other obligations such as returns and refunds; loss contingencies; the estimated useful life of deferred commissions; the carrying amount and estimated useful lives of intangible assets; the carrying amount of operating lease right-of-use assets and operating lease liabilities; determining share-based compensation expense; the valuation allowance for receivables; and determining the potential outcome of future tax consequences of events that have been recognized on our consolidated financial statements or tax returns. Actual results could differ from estimates. REVENUE RECOGNITION Nature of Products and Services: We earn revenue from software licenses, royalties, subscription-based services, software services, post-contract customer support (“PCS” or “maintenance”), hardware, and appraisal services. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We determine revenue recognition through the following steps: • Identification of the contract, or contracts with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, we satisfy a performance obligation Most of our software arrangements with customers contain multiple performance obligations that range from software licenses, installation, training, and consulting to software modification and customization to meet specific customer needs (services), hosting, and PCS. For these contracts, we account for individual performance obligations separately when they are distinct. We evaluate whether separate performance obligations can be distinct or should be accounted for as one performance obligation. Arrangements that include software services, such as training or installation, are evaluated to determine whether the customer can benefit from the services either on their own or together with other resources readily available to the customer and whether the services are separately identifiable from other promises in the contract. The transaction price is allocated to the distinct performance obligations on a relative SSP basis. We determine the SSP based on our overall pricing objectives, taking into consideration market conditions and other factors, including the value of our contracts, the applications sold, customer demographics, and the number and types of users within our contracts. Revenue is recognized net of allowances for sales adjustments and any taxes collected from customers, which are subsequently remitted to governmental authorities. Significant Judgments: Our contracts with customers often include multiple performance obligations to a customer. When a software arrangement (license or subscription) includes both software licenses and software services, judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the software services and recognized over time. The transaction price is allocated to the separate performance obligations on a relative SSP basis. We determine the SSP based on our overall pricing objectives, taking into consideration market conditions and other factors, including the value of our contracts, the applications sold, customer demographics, and the number and types of users within our contracts. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we determine SSP using the expected cost-plus margin approach. For arrangements that involve significant production, modification or customization of the software, or where software services otherwise cannot be considered distinct, we recognize revenue as control is transferred to the customer over time using progress-to-completion methods. Depending on the contract, we measure progress-to-completion primarily using labor hours incurred, or value added. The progress-to-completion method generally results in the recognition of reasonably consistent profit margins over the life of a contract because we can provide reasonably dependable estimates of contract billings and contract costs. We use the level of profit margin that is most likely to occur on a contract. If the most likely profit margin cannot be precisely determined, the lowest probable level of profit margin in the range of estimates is used until the results can be estimated more precisely. These arrangements are often implemented over an extended time period and occasionally require us to revise total cost estimates. Amounts recognized in revenue are calculated using the progress-to-completion measurement after giving effect to any changes in our cost estimates. Changes to total estimated contract costs, if any, are recorded in the period they are determined. Estimated losses on uncompleted contracts are recorded in the period in which we first determine that a loss is apparent. Typically, the structure of our arrangements does not give rise to variable consideration. However, in those instances whereby variable consideration exists, we include in our estimates additional revenue for variable consideration when we believe we have an enforceable right, the amount can be estimated reliably and its realization is probable. Refer to Note 13 - "Disaggregation of Revenue" for further information, including the economic factors that affect the nature, amount, timing, and uncertainty of revenue and cash flows of our various revenue categories. Contract Balances: Accounts receivable and allowance for losses and sales adjustments Timing of revenue recognition may differ from the timing of invoicing to customers. We record an unbilled receivable when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. For multi-year agreements, we generally invoice customers annually at the beginning of each annual coverage period. We record an unbilled receivable related to revenue recognized for on-premises licenses as we have an unconditional right to invoice and receive payment in the future related to those licenses. At March 31, 2020, and December 31, 2019, total current and long-term accounts receivable, net of allowance for losses and sales adjustments, was $339.5 million and $396.5 million, respectively. We have recorded unbilled receivables of $134.5 million and $134.0 million at March 31, 2020, and December 31, 2019, respectively. Included in unbilled receivables are retention receivables of $12.5 million and $13.1 million at March 31, 2020, and December 31, 2019, respectively, which become payable upon the completion of the contract or completion of our fieldwork and formal hearings. Unbilled receivables expected to be collected within one year have been included with accounts receivable, current portion in the accompanying condensed consolidated balance sheets. Unbilled receivables and retention receivables expected to be collected past one year have been included with accounts receivable, long-term portion in the accompanying condensed consolidated balance sheets. We maintain allowances for losses and sales adjustments, which losses are recorded against revenue at the time of the loss is incurred. Since most of our clients are domestic governmental entities, we rarely incur a loss resulting from the inability of a client to make required payments. Events or changes in circumstances that indicate the carrying amount for the allowances for losses and sales adjustments may require revision, include, but are not limited to, managing our client’s expectations regarding the scope of the services to be delivered and defects or errors in new versions or enhancements of our software products. Our allowance for losses and sales adjustments of $6.5 million at March 31, 2020, does not include provisions for credit losses. As of January 1, 2020, we adopted ASU 2016-13 Financial Instruments - Credit Losses and primarily evaluated our historical experience with credit losses related to trade and other receivables. Because we have not experienced any historical credit losses with the majority of our clients, we have no basis to record a reserve for credit losses as defined by the standard. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, available for-sale debt securities, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of an allowance for losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for a fiscal year beginning after December 15, 2018, including interim periods within that fiscal year. Entities apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. As of January 1, 2020, we adopted the new standard with no material impact of credit losses to our trade and other receivables, held-to-maturity debt securities and retained earnings included in our condensed consolidated financial statements. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes , ("ASU 2019-12") which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | AcquisitionsOn February 28, 2019, we acquired all of the capital stock of MP Holdings Parent, Inc. dba MicroPact ("MicroPact"), a leading provider of commercial off-the-shelf solutions, including entellitrak®, a low-code application development platform for case management and business process management used extensively in the public sector. In the three months ended March 31, 2020, we paid $5.6 million in contingent consideration. As of March 31, 2020, we have no contingent consideration accrued as it relates to acquisitions completed in prior periods. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity The following table details activity in our common stock: Three Months Ended March 31, 2020 2019 Shares Amount Shares Amount Purchases of treasury shares (59) $ (15,482) (72) $ (14,289) Stock option exercises 481 46,236 94 6,564 Employee stock plan purchases 10 2,469 15 2,349 Restricted stock units vested, net of withheld shares upon award settlement 10 $ (2,301) 10 $ (1,373) As of March 31, 2020, we have authorization from our board of directors to repurchase up to 2.6 million additional shares of our common stock. |
Deferred Commissions
Deferred Commissions | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Commissions | Deferred CommissionsSales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial contracts are deferred and then amortized commensurate with the recognition of associated revenue over a period of benefit that we have determined to be three The tables below show disaggregation of revenue into categories that reflect how economic factors affect the nature, amount, timing, and uncertainty of revenue and cash flows. Timing of Revenue Recognition Timing of revenue recognition by revenue category during the period is as follows: For the three months ended March 31, 2020 Products and services transferred at a point in time Products and services transferred over time Total Revenues Software licenses and royalties $ 16,066 $ 2,671 $ 18,737 Subscriptions — 81,723 81,723 Software services — 52,133 52,133 Maintenance — 114,365 114,365 Appraisal services — 5,763 5,763 Hardware and other 3,820 — 3,820 Total $ 19,886 $ 256,655 $ 276,541 For the three months ended March 31, 2019 Products and services transferred at a point in time Products and services transferred over time Total Revenues Software licenses and royalties $ 16,910 $ 4,883 $ 21,793 Subscriptions — 67,275 67,275 Software services — 48,443 48,443 Maintenance — 100,152 100,152 Appraisal services — 5,214 5,214 Hardware and other 4,189 — 4,189 Total $ 21,099 $ 225,967 $ 247,066 Recurring Revenue The majority of our revenue is comprised of recurring revenues from maintenance and subscriptions. Virtually all of our on-premises software clients contract with us for maintenance and support, which provides us with a significant source of recurring revenue. We generally provide maintenance and support for our on-premises clients under annual, or in some cases, multi-year contracts. The contract terms for subscription arrangements range from one three Recurring revenues and non-recurring revenues recognized during the period are as follows: For the three months ended March 31, 2020 Enterprise Appraisal and Tax Corporate Totals Recurring revenues $ 181,485 $ 14,603 $ — $ 196,088 Non-recurring revenues 64,691 15,760 2 80,453 Intercompany 4,001 18 (4,019) — Total revenues $ 250,177 $ 30,381 $ (4,017) $ 276,541 For the three months ended March 31, 2019 Enterprise Appraisal and Tax Corporate Totals Recurring revenues $ 154,443 $ 12,984 $ — $ 167,427 Non-recurring revenues 63,108 16,534 (3) 79,639 Intercompany 3,484 69 (3,553) — Total revenues $ 221,035 $ 29,587 $ (3,556) $ 247,066 Total deferred revenue, including long-term, by segment is as follows: March 31, 2020 December 31, 2019 Enterprise Software $ 333,314 $ 375,838 Appraisal and Tax 31,205 35,487 Corporate 1,607 1,369 Totals $ 366,126 $ 412,694 Changes in total deferred revenue, including long-term, were as follows: Three months ended March 31, 2020 Balance as of December 31, 2019 $ 412,694 Deferral of revenue 198,324 Recognition of deferred revenue (244,892) Balance as of March 31, 2020 $ 366,126 Transaction Price Allocated to the Remaining Performance Obligations The aggregate amount of transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized ("backlog"), which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Backlog as of March 31, 2020, was $1.50 billion, of which we expect to recognize approximately 48% as revenue over the next 12 months and the remainder thereafter. |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets As of March 31, 2020, we have $90.6 million in investment grade corporate and municipal bonds with maturity dates ranging ranging through 2023. We intend to hold these bonds to maturity and have classified them as such. We believe cost approximates fair value because of the relatively short duration of these investments. The fair values of these securities are considered Level II as they are based on inputs from quoted prices in markets that are not active or other observable market data. These investments are presented at amortized cost are included in Short-term investments and Non-current investments and other assets in the accompanying condensed consolidated balance sheets. As of March 31, 2020, we have an accrued interest receivable balance of $493,000 and is included in Account receivables, net. We do not measure an allowance for credit losses for accrued interest receivables. We record any losses within the maturity period of the investment and any write-offs to accrued interest receivables are recorded as a reduction to interest income in the period of the loss. During the three months ended March 31, 2020, we have recorded no credit losses. Interest income and amortization of discounts and premiums are included in Other income (expense), net in the accompanying condensed consolidated statements of income. During the three months ended March 31, 2020, we sold our $15 million investment in convertible preferred stock representing a 20% interest in Record Holdings Pty Limited ("Record Holdings"), a privately held Australian company specializing in digitizing the spoken word in court and legal proceedings, to BFTR, LLC, a wholly owned subsidiary of Bison Capital Partners V L.P. During the same period, we purchased $10 million in common stock representing a 18% interest in BFTR, LLC. The investment in common stock is accounted under the cost method because we do not have the ability to exercise significant influence over the investee and the securities do not have readily determinable fair values. Our investment is carried at cost less any impairment write-downs. Annually, our cost method investments are assessed for impairment. We do not reassess the fair value of cost method investments if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investments. This investment is included in Non-current investments and other assets in the accompanying condensed consolidated balance sheets. |
Revolving Line of Credit
Revolving Line of Credit | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Revolving Line of Credit | Revolving Line of Credit On September 30, 2019, we entered into a $400 million credit agreement with various lender parties and Wells Fargo Bank, National Association, as Administrative Agent (the “Credit Facility”). The Credit Facility provides for a revolving credit line up to $400 million, including a $25 million sublimit for letters of credit. The Credit Facility matures on September 30, 2024. Borrowings under the Credit Facility bear interest at a rate of either (1) Wells Fargo Bank’s prime rate (subject to certain higher rate determinations) plus a margin of 0.125% to 0.75% or (2) the one-, two-, three-, or six-month LIBOR rate plus a margin of 1.125% to 1.75%. As of March 31, 2020, the interest rates were 3.38% under the Wells Fargo Bank's prime rate and approximately 2.12% under the 30-day LIBOR option. The Credit Facility requires us to maintain certain financial ratios and other financial conditions and prohibits us from making certain investments, advances, cash dividends or loans, and limits incurrence of additional indebtedness and liens. As of March 31, 2020, we were in compliance with those covenants. As of March 31, 2020, we had no outstanding borrowings under the Credit Facility, and available borrowing capacity was $400.0 million. |
Income Tax Provision
Income Tax Provision | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax Provision | Income Tax Provision We had an effective income tax rate of negative 36.3% for the three months ended March 31, 2020, compared to 22.0% for the three months ended March 31, 2019. The change in the effective tax rate for the three months ended March 31, 2020, as compared to the same period in 2019, was principally driven by an increase in the excess tax benefits related to stock incentive awards. The effective income tax rates for the periods presented were different from the statutory United States federal income tax rate of 21% due to excess tax benefits related to stock incentive awards, state income taxes, non-deductible business expenses, and the tax benefit of research tax credits. The excess tax benefits related to stock incentive awards realized was $22.1 million for the three months ended March 31, 2020, compared to $1.7 million for the three months ended March 31, 2019. Excluding the excess tax benefits, the effective rate was 27.0% for the three months ended March 31, 2020, compared to 26.8% for the three months ended March 31, 2019. We made tax payments of $176,000 and $88,000 in the three months ended March 31, 2020, and 2019, respectively. The Coronavirus Aid, Relief and Economic Security ("CARES") Act, which was signed into law on March 27, 2020, provides an estimated $2.2 trillion to fight the COVID-19 pandemic and stimulate the U.S. economy. The assistance includes tax relief and government loans, and investments and grants for entities in affected industries (e.g., health care, airlines). The business tax provisions of the CARES Act include temporary changes to income and non-income based tax laws, including the ability to utilize net operating losses, interest expense deductions, alternative minimum tax credit refunds, charitable contributions, and depreciation of qualified improvement property. Measures not related to income-based taxes include (1) allowing an employer to pay its share of Social Security payroll taxes that would otherwise be due from the date of enactment through December 31, 2020, over the following two years and (2) allowing eligible employers subject to closure due to the COVID-19 pandemic to receive a 50% credit on qualified wages against their employment taxes each quarter, with any excess credits eligible for refunds. We evaluated the CARES Act provisions and the enactment resulted in no income tax adjustments. We do not believe that the income tax implications will be significant to our overall income tax liability. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table details the reconciliation of basic earnings per share to diluted earnings per share: Three Months Ended March 31, 2020 2019 Numerator for basic and diluted earnings per share: Net income $ 47,550 $ 27,348 Denominator: Weighted-average basic common shares outstanding 39,500 38,308 Assumed conversion of dilutive securities: Stock awards 1,644 1,277 Denominator for diluted earnings per share - Adjusted weighted-average shares 41,144 39,585 Earnings per common share: Basic $ 1.20 $ 0.71 Diluted $ 1.16 $ 0.69 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases We lease office facilities for use in our operations, as well as transportation and other equipment. Most of our leases are non-cancelable operating lease agreements and they expire from one year to eight years. Some of these leases include options to extend for up to 10 years. We had no finance leases and no related party lease agreements as of March 31, 2020. Operating lease costs were approximately $2.6 million for the three months ended March 31, 2020, and $2.1 million for the three months ended March 31, 2019. The components of operating lease expense were as follows: Lease Costs Financial Statement Classification Three Months Ended March 31, 2020 2019 Operating lease cost Selling, general and administrative expenses $ 1,666 $ 1,370 Short-term lease cost Selling, general and administrative expenses 574 570 Variable lease cost Selling, general and administrative expenses 394 163 Net lease cost $ 2,634 $ 2,103 As of March 31, 2020, Right-of-use ("ROU") lease assets and lease liabilities for our operating leases were recorded in the condensed consolidated balance sheet as follows: March 31, 2020 December 31, 2019 Assets: Operating lease right-of-use assets $ 17,992 $ 18,992 Liabilities: Operating leases, short-term 6,373 6,387 Operating leases, long-term 15,548 16,822 Total lease liabilities $ 21,921 $ 23,209 Supplemental information related to leases was as follows: Other Information Three Months Ended March 31, 2020 2019 Cash flows : Cash paid amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 1,873 $ 1,530 Right-of-use assets obtained in exchange for lease obligations (non-cash): Operating leases $ 457 $ 431 Lease term and discount rate: Weighted average remaining lease term (years) 4 5 Weighted average discount rate 4.00 % 4.00 % As of March 31, 2020, maturities of lease liabilities were as follows: Year ending December 31, Amount 2020 (Remaining 2020) $ 5,845 2021 6,340 2022 4,021 2023 2,989 2024 2,545 Thereafter 2,133 Total lease payments 23,873 Less: Interest (1,952) Present value of operating lease liabilities $ 21,921 Rental Income from third parties We own office buildings in Bangor, Falmouth and Yarmouth, Maine; Lubbock and Plano, Texas; Troy, Michigan; Latham, New York; and Moraine, Ohio. We lease space in some of these buildings to third-party tenants. The property we lease to others under operating leases consists primarily of specific facilities where one tenant obtains substantially all of the economic benefit from the asset and has the right to direct the use of the asset. These non-cancelable leases expire between 2020 and 2025, and some have options to extend the lease for up to five years. We determine if an arrangement is a lease at inception. None of our leases allow the lessee to purchase the leased asset. Rental income from third-party tenants for the three months ended March 31, 2020, totaled $274,000 and for the three months ended March 31, 2019, totaled $284,000. Rental income is included in Hardware and other revenue on the condensed consolidated statements of income. Future minimum operating rental income based on contractual agreements is as follows: Year ending December 31, Amount 2020 (Remaining 2020) $ 1,009 2021 1,372 2022 1,402 2023 1,432 2024 1,462 Thereafter 857 Total $ 7,534 As of March 31, 2020, we had no additional significant operating or finance leases that had not yet commenced. |
Leases | Leases We lease office facilities for use in our operations, as well as transportation and other equipment. Most of our leases are non-cancelable operating lease agreements and they expire from one year to eight years. Some of these leases include options to extend for up to 10 years. We had no finance leases and no related party lease agreements as of March 31, 2020. Operating lease costs were approximately $2.6 million for the three months ended March 31, 2020, and $2.1 million for the three months ended March 31, 2019. The components of operating lease expense were as follows: Lease Costs Financial Statement Classification Three Months Ended March 31, 2020 2019 Operating lease cost Selling, general and administrative expenses $ 1,666 $ 1,370 Short-term lease cost Selling, general and administrative expenses 574 570 Variable lease cost Selling, general and administrative expenses 394 163 Net lease cost $ 2,634 $ 2,103 As of March 31, 2020, Right-of-use ("ROU") lease assets and lease liabilities for our operating leases were recorded in the condensed consolidated balance sheet as follows: March 31, 2020 December 31, 2019 Assets: Operating lease right-of-use assets $ 17,992 $ 18,992 Liabilities: Operating leases, short-term 6,373 6,387 Operating leases, long-term 15,548 16,822 Total lease liabilities $ 21,921 $ 23,209 Supplemental information related to leases was as follows: Other Information Three Months Ended March 31, 2020 2019 Cash flows : Cash paid amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 1,873 $ 1,530 Right-of-use assets obtained in exchange for lease obligations (non-cash): Operating leases $ 457 $ 431 Lease term and discount rate: Weighted average remaining lease term (years) 4 5 Weighted average discount rate 4.00 % 4.00 % As of March 31, 2020, maturities of lease liabilities were as follows: Year ending December 31, Amount 2020 (Remaining 2020) $ 5,845 2021 6,340 2022 4,021 2023 2,989 2024 2,545 Thereafter 2,133 Total lease payments 23,873 Less: Interest (1,952) Present value of operating lease liabilities $ 21,921 Rental Income from third parties We own office buildings in Bangor, Falmouth and Yarmouth, Maine; Lubbock and Plano, Texas; Troy, Michigan; Latham, New York; and Moraine, Ohio. We lease space in some of these buildings to third-party tenants. The property we lease to others under operating leases consists primarily of specific facilities where one tenant obtains substantially all of the economic benefit from the asset and has the right to direct the use of the asset. These non-cancelable leases expire between 2020 and 2025, and some have options to extend the lease for up to five years. We determine if an arrangement is a lease at inception. None of our leases allow the lessee to purchase the leased asset. Rental income from third-party tenants for the three months ended March 31, 2020, totaled $274,000 and for the three months ended March 31, 2019, totaled $284,000. Rental income is included in Hardware and other revenue on the condensed consolidated statements of income. Future minimum operating rental income based on contractual agreements is as follows: Year ending December 31, Amount 2020 (Remaining 2020) $ 1,009 2021 1,372 2022 1,402 2023 1,432 2024 1,462 Thereafter 857 Total $ 7,534 As of March 31, 2020, we had no additional significant operating or finance leases that had not yet commenced. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation The following table summarizes share-based compensation expense related to share-based awards recorded in the condensed consolidated statements of income, pursuant to ASC 718, Stock Compensation : Three Months Ended March 31, 2020 2019 Cost of software services, maintenance and subscriptions $ 4,252 $ 3,798 Selling, general and administrative expenses 13,050 10,618 Total share-based compensation expense $ 17,302 $ 14,416 |
Segment and Related Information
Segment and Related Information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment and Related Information | Segment and Related Information We provide integrated information management solutions and services for the public sector, with a focus on local governments. We provide our software systems and services and appraisal services through seven business units, which focus on the following products: • financial management, education and planning, regulatory and maintenance software solutions; • financial management, municipal courts, planning, regulatory and maintenance management software solutions; • courts and justice and public safety software solutions; • data and insights solutions; • case management and business management solutions; and • appraisal and tax software solutions, property appraisal services and land and vital records management software solutions. In accordance with ASC 280-10, Segment Reporting , the financial management, education and planning, regulatory and maintenance software solutions unit; financial management, municipal courts, planning, regulatory and maintenance, and land and vital records management software solutions unit; courts and justice and public safety software solutions unit; the data and insights solutions unit; and case management and business management solutions units meet the criteria for aggregation and are presented in one reportable segment, the Enterprise Software (“ES”) segment. The ES segment provides public sector entities with software systems and services to meet their information technology and automation needs for mission-critical “back-office” functions such as: financial management and education, courts and justice, public safety, planning, regulatory and maintenance, and data and insights. The Appraisal and Tax (“A&T”) segment provides systems and software that automate the appraisal and assessment of real and personal property, land and vital records management as well as property appraisal outsourcing services for local governments and taxing authorities. Property appraisal outsourcing services include: the physical inspection of commercial and residential properties; data collection and processing; computer analysis for property valuation; preparation of tax rolls; community education; and arbitration between taxpayers and the assessing jurisdiction. We evaluate performance based on several factors, of which the primary financial measure is business segment operating income. We define segment operating income for our business units as income before non-cash amortization of intangible assets associated with their acquisitions, interest expense and income taxes. Segment operating income includes intercompany transactions. The majority of intercompany transactions relate to contracts involving more than one unit and are valued based on the contractual arrangement. Segment operating income for Corporate primarily consists of compensation costs for the executive management team and certain accounting and administrative staff and share-based compensation expense for the entire company. Corporate segment operating income also includes revenues and expenses related to a company-wide user conference. Due to the shelter-in-place orders caused by the COVID pandemic, we cancelled our company-wide user conference for the current year. As of January 1, 2020, the land and vital records management business unit, which was previously reported in the ES segment, was moved to the A&T segment. These changes were made to reflect changes in the way in which management makes operating decisions, allocates resources, and manages the growth and profitability of the Company. Prior year amounts for the ES and A&T segments have been adjusted to reflect the segment change. For the three months ended March 31, 2020 Enterprise Appraisal and Tax Corporate Totals Revenues Software licenses and royalties $ 15,951 $ 2,786 $ — $ 18,737 Subscriptions 76,644 5,079 — 81,723 Software services 44,949 7,184 — 52,133 Maintenance 104,841 9,524 — 114,365 Appraisal services — 5,763 — 5,763 Hardware and other 3,791 27 2 3,820 Intercompany 4,001 18 (4,019) — Total revenues $ 250,177 $ 30,381 $ (4,017) $ 276,541 Segment operating income $ 60,472 $ 6,908 $ (20,068) $ 47,312 For the three months ended March 31, 2019 Enterprise Appraisal and Tax Corporate Totals Revenues Software licenses and royalties $ 18,522 $ 3,271 $ — $ 21,793 Subscriptions 63,255 4,020 — 67,275 Software services 40,456 7,987 — 48,443 Maintenance 91,188 8,964 — 100,152 Appraisal services — 5,214 — 5,214 Hardware and other 4,130 62 (3) 4,189 Intercompany 3,484 69 (3,553) — Total revenues $ 221,035 $ 29,587 $ (3,556) $ 247,066 Segment operating income $ 55,474 $ 7,095 $ (16,546) $ 46,023 Three Months Ended March 31, Reconciliation of reportable segment operating income to the Company's consolidated totals: 2020 2019 Total segment operating income $ 47,312 $ 46,023 Amortization of acquired software (8,027) (6,682) Amortization of customer and trade name intangibles (5,392) (4,850) Other income, net 990 586 Income before income taxes $ 34,883 $ 35,077 |
Disaggregation of Revenue
Disaggregation of Revenue | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Deferred CommissionsSales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial contracts are deferred and then amortized commensurate with the recognition of associated revenue over a period of benefit that we have determined to be three The tables below show disaggregation of revenue into categories that reflect how economic factors affect the nature, amount, timing, and uncertainty of revenue and cash flows. Timing of Revenue Recognition Timing of revenue recognition by revenue category during the period is as follows: For the three months ended March 31, 2020 Products and services transferred at a point in time Products and services transferred over time Total Revenues Software licenses and royalties $ 16,066 $ 2,671 $ 18,737 Subscriptions — 81,723 81,723 Software services — 52,133 52,133 Maintenance — 114,365 114,365 Appraisal services — 5,763 5,763 Hardware and other 3,820 — 3,820 Total $ 19,886 $ 256,655 $ 276,541 For the three months ended March 31, 2019 Products and services transferred at a point in time Products and services transferred over time Total Revenues Software licenses and royalties $ 16,910 $ 4,883 $ 21,793 Subscriptions — 67,275 67,275 Software services — 48,443 48,443 Maintenance — 100,152 100,152 Appraisal services — 5,214 5,214 Hardware and other 4,189 — 4,189 Total $ 21,099 $ 225,967 $ 247,066 Recurring Revenue The majority of our revenue is comprised of recurring revenues from maintenance and subscriptions. Virtually all of our on-premises software clients contract with us for maintenance and support, which provides us with a significant source of recurring revenue. We generally provide maintenance and support for our on-premises clients under annual, or in some cases, multi-year contracts. The contract terms for subscription arrangements range from one three Recurring revenues and non-recurring revenues recognized during the period are as follows: For the three months ended March 31, 2020 Enterprise Appraisal and Tax Corporate Totals Recurring revenues $ 181,485 $ 14,603 $ — $ 196,088 Non-recurring revenues 64,691 15,760 2 80,453 Intercompany 4,001 18 (4,019) — Total revenues $ 250,177 $ 30,381 $ (4,017) $ 276,541 For the three months ended March 31, 2019 Enterprise Appraisal and Tax Corporate Totals Recurring revenues $ 154,443 $ 12,984 $ — $ 167,427 Non-recurring revenues 63,108 16,534 (3) 79,639 Intercompany 3,484 69 (3,553) — Total revenues $ 221,035 $ 29,587 $ (3,556) $ 247,066 Total deferred revenue, including long-term, by segment is as follows: March 31, 2020 December 31, 2019 Enterprise Software $ 333,314 $ 375,838 Appraisal and Tax 31,205 35,487 Corporate 1,607 1,369 Totals $ 366,126 $ 412,694 Changes in total deferred revenue, including long-term, were as follows: Three months ended March 31, 2020 Balance as of December 31, 2019 $ 412,694 Deferral of revenue 198,324 Recognition of deferred revenue (244,892) Balance as of March 31, 2020 $ 366,126 Transaction Price Allocated to the Remaining Performance Obligations The aggregate amount of transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized ("backlog"), which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Backlog as of March 31, 2020, was $1.50 billion, of which we expect to recognize approximately 48% as revenue over the next 12 months and the remainder thereafter. |
Deferred Revenue and Performanc
Deferred Revenue and Performance Obligations | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue and Performance Obligations | Deferred CommissionsSales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial contracts are deferred and then amortized commensurate with the recognition of associated revenue over a period of benefit that we have determined to be three The tables below show disaggregation of revenue into categories that reflect how economic factors affect the nature, amount, timing, and uncertainty of revenue and cash flows. Timing of Revenue Recognition Timing of revenue recognition by revenue category during the period is as follows: For the three months ended March 31, 2020 Products and services transferred at a point in time Products and services transferred over time Total Revenues Software licenses and royalties $ 16,066 $ 2,671 $ 18,737 Subscriptions — 81,723 81,723 Software services — 52,133 52,133 Maintenance — 114,365 114,365 Appraisal services — 5,763 5,763 Hardware and other 3,820 — 3,820 Total $ 19,886 $ 256,655 $ 276,541 For the three months ended March 31, 2019 Products and services transferred at a point in time Products and services transferred over time Total Revenues Software licenses and royalties $ 16,910 $ 4,883 $ 21,793 Subscriptions — 67,275 67,275 Software services — 48,443 48,443 Maintenance — 100,152 100,152 Appraisal services — 5,214 5,214 Hardware and other 4,189 — 4,189 Total $ 21,099 $ 225,967 $ 247,066 Recurring Revenue The majority of our revenue is comprised of recurring revenues from maintenance and subscriptions. Virtually all of our on-premises software clients contract with us for maintenance and support, which provides us with a significant source of recurring revenue. We generally provide maintenance and support for our on-premises clients under annual, or in some cases, multi-year contracts. The contract terms for subscription arrangements range from one three Recurring revenues and non-recurring revenues recognized during the period are as follows: For the three months ended March 31, 2020 Enterprise Appraisal and Tax Corporate Totals Recurring revenues $ 181,485 $ 14,603 $ — $ 196,088 Non-recurring revenues 64,691 15,760 2 80,453 Intercompany 4,001 18 (4,019) — Total revenues $ 250,177 $ 30,381 $ (4,017) $ 276,541 For the three months ended March 31, 2019 Enterprise Appraisal and Tax Corporate Totals Recurring revenues $ 154,443 $ 12,984 $ — $ 167,427 Non-recurring revenues 63,108 16,534 (3) 79,639 Intercompany 3,484 69 (3,553) — Total revenues $ 221,035 $ 29,587 $ (3,556) $ 247,066 Total deferred revenue, including long-term, by segment is as follows: March 31, 2020 December 31, 2019 Enterprise Software $ 333,314 $ 375,838 Appraisal and Tax 31,205 35,487 Corporate 1,607 1,369 Totals $ 366,126 $ 412,694 Changes in total deferred revenue, including long-term, were as follows: Three months ended March 31, 2020 Balance as of December 31, 2019 $ 412,694 Deferral of revenue 198,324 Recognition of deferred revenue (244,892) Balance as of March 31, 2020 $ 366,126 Transaction Price Allocated to the Remaining Performance Obligations The aggregate amount of transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized ("backlog"), which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Backlog as of March 31, 2020, was $1.50 billion, of which we expect to recognize approximately 48% as revenue over the next 12 months and the remainder thereafter. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesOther than routine litigation incidental to our business, there are no material legal proceedings pending to which we are party or to which any of our properties are subject. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events There have been no material events and transactions that occurred subsequent to March 31, 2020. |
Accounting Standards and Sign_2
Accounting Standards and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Use of estimates | USE OF ESTIMATES The preparation of our financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include revenue recognition, determining the nature and timing of satisfaction of performance obligations, determining the standalone selling price ("SSP") of performance obligations, variable consideration, and other obligations such as returns and refunds; loss contingencies; the estimated useful life of deferred commissions; the carrying amount and estimated useful lives of intangible assets; the carrying amount of operating lease right-of-use assets and operating lease liabilities; determining share-based compensation expense; the valuation allowance for receivables; and determining the potential outcome of future tax consequences of events that have been recognized on our consolidated financial statements or tax returns. Actual results could differ from estimates. |
Revenue recognition | REVENUE RECOGNITION Nature of Products and Services: We earn revenue from software licenses, royalties, subscription-based services, software services, post-contract customer support (“PCS” or “maintenance”), hardware, and appraisal services. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We determine revenue recognition through the following steps: • Identification of the contract, or contracts with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, we satisfy a performance obligation Most of our software arrangements with customers contain multiple performance obligations that range from software licenses, installation, training, and consulting to software modification and customization to meet specific customer needs (services), hosting, and PCS. For these contracts, we account for individual performance obligations separately when they are distinct. We evaluate whether separate performance obligations can be distinct or should be accounted for as one performance obligation. Arrangements that include software services, such as training or installation, are evaluated to determine whether the customer can benefit from the services either on their own or together with other resources readily available to the customer and whether the services are separately identifiable from other promises in the contract. The transaction price is allocated to the distinct performance obligations on a relative SSP basis. We determine the SSP based on our overall pricing objectives, taking into consideration market conditions and other factors, including the value of our contracts, the applications sold, customer demographics, and the number and types of users within our contracts. Revenue is recognized net of allowances for sales adjustments and any taxes collected from customers, which are subsequently remitted to governmental authorities. Significant Judgments: Our contracts with customers often include multiple performance obligations to a customer. When a software arrangement (license or subscription) includes both software licenses and software services, judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the software services and recognized over time. The transaction price is allocated to the separate performance obligations on a relative SSP basis. We determine the SSP based on our overall pricing objectives, taking into consideration market conditions and other factors, including the value of our contracts, the applications sold, customer demographics, and the number and types of users within our contracts. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we determine SSP using the expected cost-plus margin approach. For arrangements that involve significant production, modification or customization of the software, or where software services otherwise cannot be considered distinct, we recognize revenue as control is transferred to the customer over time using progress-to-completion methods. Depending on the contract, we measure progress-to-completion primarily using labor hours incurred, or value added. The progress-to-completion method generally results in the recognition of reasonably consistent profit margins over the life of a contract because we can provide reasonably dependable estimates of contract billings and contract costs. We use the level of profit margin that is most likely to occur on a contract. If the most likely profit margin cannot be precisely determined, the lowest probable level of profit margin in the range of estimates is used until the results can be estimated more precisely. These arrangements are often implemented over an extended time period and occasionally require us to revise total cost estimates. Amounts recognized in revenue are calculated using the progress-to-completion measurement after giving effect to any changes in our cost estimates. Changes to total estimated contract costs, if any, are recorded in the period they are determined. Estimated losses on uncompleted contracts are recorded in the period in which we first determine that a loss is apparent. Typically, the structure of our arrangements does not give rise to variable consideration. However, in those instances whereby variable consideration exists, we include in our estimates additional revenue for variable consideration when we believe we have an enforceable right, the amount can be estimated reliably and its realization is probable. |
Contract balances | Contract Balances: Accounts receivable and allowance for losses and sales adjustments Timing of revenue recognition may differ from the timing of invoicing to customers. We record an unbilled receivable when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. For multi-year agreements, we generally invoice customers annually at the beginning of each annual coverage period. We record an unbilled receivable related to revenue recognized for on-premises licenses as we have an unconditional right to invoice and receive payment in the future related to those licenses. At March 31, 2020, and December 31, 2019, total current and long-term accounts receivable, net of allowance for losses and sales adjustments, was $339.5 million and $396.5 million, respectively. We have recorded unbilled receivables of $134.5 million and $134.0 million at March 31, 2020, and December 31, 2019, respectively. Included in unbilled receivables are retention receivables of $12.5 million and $13.1 million at March 31, 2020, and December 31, 2019, respectively, which become payable upon the completion of the contract or completion of our fieldwork and formal hearings. Unbilled receivables expected to be collected within one year have been included with accounts receivable, current portion in the accompanying condensed consolidated balance sheets. Unbilled receivables and retention receivables expected to be collected past one year have been included with accounts receivable, long-term portion in the accompanying condensed consolidated balance sheets. |
Recently adopted pronouncements | RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, available for-sale debt securities, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of an allowance for losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for a fiscal year beginning after December 15, 2018, including interim periods within that fiscal year. Entities apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. As of January 1, 2020, we adopted the new standard with no material impact of credit losses to our trade and other receivables, held-to-maturity debt securities and retained earnings included in our condensed consolidated financial statements. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes , ("ASU 2019-12") which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Summary of details activity in our common stock | The following table details activity in our common stock: Three Months Ended March 31, 2020 2019 Shares Amount Shares Amount Purchases of treasury shares (59) $ (15,482) (72) $ (14,289) Stock option exercises 481 46,236 94 6,564 Employee stock plan purchases 10 2,469 15 2,349 Restricted stock units vested, net of withheld shares upon award settlement 10 $ (2,301) 10 $ (1,373) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Computation of reconciliation of basic earnings per share to diluted earnings per share | The following table details the reconciliation of basic earnings per share to diluted earnings per share: Three Months Ended March 31, 2020 2019 Numerator for basic and diluted earnings per share: Net income $ 47,550 $ 27,348 Denominator: Weighted-average basic common shares outstanding 39,500 38,308 Assumed conversion of dilutive securities: Stock awards 1,644 1,277 Denominator for diluted earnings per share - Adjusted weighted-average shares 41,144 39,585 Earnings per common share: Basic $ 1.20 $ 0.71 Diluted $ 1.16 $ 0.69 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of lease cost | The components of operating lease expense were as follows: Lease Costs Financial Statement Classification Three Months Ended March 31, 2020 2019 Operating lease cost Selling, general and administrative expenses $ 1,666 $ 1,370 Short-term lease cost Selling, general and administrative expenses 574 570 Variable lease cost Selling, general and administrative expenses 394 163 Net lease cost $ 2,634 $ 2,103 Supplemental information related to leases was as follows: Other Information Three Months Ended March 31, 2020 2019 Cash flows : Cash paid amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 1,873 $ 1,530 Right-of-use assets obtained in exchange for lease obligations (non-cash): Operating leases $ 457 $ 431 Lease term and discount rate: Weighted average remaining lease term (years) 4 5 Weighted average discount rate 4.00 % 4.00 % |
Schedule of leases assets and liabilities | As of March 31, 2020, Right-of-use ("ROU") lease assets and lease liabilities for our operating leases were recorded in the condensed consolidated balance sheet as follows: March 31, 2020 December 31, 2019 Assets: Operating lease right-of-use assets $ 17,992 $ 18,992 Liabilities: Operating leases, short-term 6,373 6,387 Operating leases, long-term 15,548 16,822 Total lease liabilities $ 21,921 $ 23,209 |
Schedule of supplemental information related to leases | Supplemental information related to leases was as follows: Other Information Three Months Ended March 31, 2020 2019 Cash flows : Cash paid amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 1,873 $ 1,530 Right-of-use assets obtained in exchange for lease obligations (non-cash): Operating leases $ 457 $ 431 Lease term and discount rate: Weighted average remaining lease term (years) 4 5 Weighted average discount rate 4.00 % 4.00 % |
Schedule of operating lease maturity | As of March 31, 2020, maturities of lease liabilities were as follows: Year ending December 31, Amount 2020 (Remaining 2020) $ 5,845 2021 6,340 2022 4,021 2023 2,989 2024 2,545 Thereafter 2,133 Total lease payments 23,873 Less: Interest (1,952) Present value of operating lease liabilities $ 21,921 |
Schedule of future minimum operating rental income | Future minimum operating rental income based on contractual agreements is as follows: Year ending December 31, Amount 2020 (Remaining 2020) $ 1,009 2021 1,372 2022 1,402 2023 1,432 2024 1,462 Thereafter 857 Total $ 7,534 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of share-based compensation expense related to share-based awards recorded in the statements of income | The following table summarizes share-based compensation expense related to share-based awards recorded in the condensed consolidated statements of income, pursuant to ASC 718, Stock Compensation : Three Months Ended March 31, 2020 2019 Cost of software services, maintenance and subscriptions $ 4,252 $ 3,798 Selling, general and administrative expenses 13,050 10,618 Total share-based compensation expense $ 17,302 $ 14,416 |
Segment and Related Informati_2
Segment and Related Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment revenues and operations | For the three months ended March 31, 2020 Enterprise Appraisal and Tax Corporate Totals Revenues Software licenses and royalties $ 15,951 $ 2,786 $ — $ 18,737 Subscriptions 76,644 5,079 — 81,723 Software services 44,949 7,184 — 52,133 Maintenance 104,841 9,524 — 114,365 Appraisal services — 5,763 — 5,763 Hardware and other 3,791 27 2 3,820 Intercompany 4,001 18 (4,019) — Total revenues $ 250,177 $ 30,381 $ (4,017) $ 276,541 Segment operating income $ 60,472 $ 6,908 $ (20,068) $ 47,312 For the three months ended March 31, 2019 Enterprise Appraisal and Tax Corporate Totals Revenues Software licenses and royalties $ 18,522 $ 3,271 $ — $ 21,793 Subscriptions 63,255 4,020 — 67,275 Software services 40,456 7,987 — 48,443 Maintenance 91,188 8,964 — 100,152 Appraisal services — 5,214 — 5,214 Hardware and other 4,130 62 (3) 4,189 Intercompany 3,484 69 (3,553) — Total revenues $ 221,035 $ 29,587 $ (3,556) $ 247,066 Segment operating income $ 55,474 $ 7,095 $ (16,546) $ 46,023 |
Reconciliation of operating income from segments to consolidated | Three Months Ended March 31, Reconciliation of reportable segment operating income to the Company's consolidated totals: 2020 2019 Total segment operating income $ 47,312 $ 46,023 Amortization of acquired software (8,027) (6,682) Amortization of customer and trade name intangibles (5,392) (4,850) Other income, net 990 586 Income before income taxes $ 34,883 $ 35,077 |
Disaggregation of Revenue (Tabl
Disaggregation of Revenue (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | Timing of revenue recognition by revenue category during the period is as follows: For the three months ended March 31, 2020 Products and services transferred at a point in time Products and services transferred over time Total Revenues Software licenses and royalties $ 16,066 $ 2,671 $ 18,737 Subscriptions — 81,723 81,723 Software services — 52,133 52,133 Maintenance — 114,365 114,365 Appraisal services — 5,763 5,763 Hardware and other 3,820 — 3,820 Total $ 19,886 $ 256,655 $ 276,541 For the three months ended March 31, 2019 Products and services transferred at a point in time Products and services transferred over time Total Revenues Software licenses and royalties $ 16,910 $ 4,883 $ 21,793 Subscriptions — 67,275 67,275 Software services — 48,443 48,443 Maintenance — 100,152 100,152 Appraisal services — 5,214 5,214 Hardware and other 4,189 — 4,189 Total $ 21,099 $ 225,967 $ 247,066 Recurring revenues and non-recurring revenues recognized during the period are as follows: For the three months ended March 31, 2020 Enterprise Appraisal and Tax Corporate Totals Recurring revenues $ 181,485 $ 14,603 $ — $ 196,088 Non-recurring revenues 64,691 15,760 2 80,453 Intercompany 4,001 18 (4,019) — Total revenues $ 250,177 $ 30,381 $ (4,017) $ 276,541 For the three months ended March 31, 2019 Enterprise Appraisal and Tax Corporate Totals Recurring revenues $ 154,443 $ 12,984 $ — $ 167,427 Non-recurring revenues 63,108 16,534 (3) 79,639 Intercompany 3,484 69 (3,553) — Total revenues $ 221,035 $ 29,587 $ (3,556) $ 247,066 |
Deferred Revenue and Performa_2
Deferred Revenue and Performance Obligations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Changes in deferred revenue | Total deferred revenue, including long-term, by segment is as follows: March 31, 2020 December 31, 2019 Enterprise Software $ 333,314 $ 375,838 Appraisal and Tax 31,205 35,487 Corporate 1,607 1,369 Totals $ 366,126 $ 412,694 Changes in total deferred revenue, including long-term, were as follows: Three months ended March 31, 2020 Balance as of December 31, 2019 $ 412,694 Deferral of revenue 198,324 Recognition of deferred revenue (244,892) Balance as of March 31, 2020 $ 366,126 |
Accounting Standards and Sign_3
Accounting Standards and Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle | ||
Recurring revenue percentage of total revenue (percent) | 71.00% | |
Cash and investments | $ 392,600 | |
Accounts receivable, net | 339,500 | $ 396,500 |
Allowance for losses | 6,500 | |
Unbilled Revenues | ||
New Accounting Pronouncements or Change in Accounting Principle | ||
Accounts receivable, net | 134,500 | 134,000 |
Retention Receivable | Unbilled Revenues | ||
New Accounting Pronouncements or Change in Accounting Principle | ||
Accounts receivable, net | 12,500 | $ 13,100 |
Revolving Credit Facility | Credit Agreement | ||
New Accounting Pronouncements or Change in Accounting Principle | ||
Line of credit facility, unused borrowing capacity | $ 400,000 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | Feb. 28, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Business Acquisition | |||
Payment of contingent consideration | $ 5,619 | $ 0 | |
MicroPact | |||
Business Acquisition | |||
Payment of contingent consideration | $ 5,600 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Activities in Common Stock (Detail) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity [Abstract] | ||
Purchases of treasury shares | $ (15,482) | $ (14,289) |
Purchases of treasury (in shares) | (59) | (72) |
Stock option exercises | $ 46,236 | $ 6,564 |
Stock option exercises (in shares) | 481 | 94 |
Employee stock plan purchases | $ 2,469 | $ 2,349 |
Employee stock plan purchases (in shares) | 10 | 15 |
Restricted stock units vested, net of withheld shares upon award settlement | $ (2,301) | $ (1,373) |
Restricted stock units vested, net of withheld shares upon award settlement (in shares) | 10 | 10 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) shares in Millions | Mar. 31, 2020shares |
Equity [Abstract] | |
Number of shares authorized to be repurchased (in shares) | 2.6 |
Deferred Commissions (Details)
Deferred Commissions (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Capitalized Contract Cost | |||
Deferred commissions | $ 30,900,000 | $ 29,800,000 | |
Deferred commissions amortization | 3,900,000 | $ 3,800,000 | |
Deferred commissions impairment | $ 0 | $ 0 | |
Minimum | |||
Capitalized Contract Cost | |||
Sales commissions amortization period | 3 years | ||
Maximum | |||
Capitalized Contract Cost | |||
Sales commissions amortization period | 7 years |
Other Assets (Detail)
Other Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Schedule of Equity Method Investments | |||
Purchase of held to maturity securities | $ 90,600 | ||
Interest receivable | 493 | ||
Proceeds from the sale of investment in preferred shares | 15,000 | $ 0 | |
Purchase of equity investment common shares | 10,000 | $ 0 | |
Record Holdings | |||
Schedule of Equity Method Investments | |||
Proceeds from the sale of investment in preferred shares | $ 15,000 | ||
Ownership percentage (percent) | 18.00% | 20.00% | |
Purchase of equity investment common shares | $ 10,000 |
Revolving Line of Credit (Detai
Revolving Line of Credit (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | |
Line Of Credit Facility | |||
Outstanding borrowings | $ 0 | $ 0 | |
Revolving Credit Facility | Credit Agreement | |||
Line Of Credit Facility | |||
Revolving credit facility, maximum borrowing capacity | $ 400,000,000 | ||
Outstanding borrowings | 0 | ||
Line of credit facility, unused borrowing capacity | $ 400,000,000 | ||
Revolving Credit Facility | Credit Agreement | Prime Commercial Lending Rate | |||
Line Of Credit Facility | |||
Effective percentage interest rate | 3.38% | ||
Revolving Credit Facility | Credit Agreement | Libor Rate | |||
Line Of Credit Facility | |||
Effective percentage interest rate | 2.12% | ||
Revolving Credit Facility | Credit Agreement | Minimum | Prime Commercial Lending Rate | |||
Line Of Credit Facility | |||
Line of credit facility interest rate | 0.125% | ||
Revolving Credit Facility | Credit Agreement | Minimum | Libor Rate | |||
Line Of Credit Facility | |||
Line of credit facility interest rate | 1.125% | ||
Revolving Credit Facility | Credit Agreement | Maximum | Prime Commercial Lending Rate | |||
Line Of Credit Facility | |||
Line of credit facility interest rate | 0.75% | ||
Revolving Credit Facility | Credit Agreement | Maximum | Libor Rate | |||
Line Of Credit Facility | |||
Line of credit facility interest rate | 1.75% | ||
Revolving Credit Facility | Credit Agreement | Letter of Credit | |||
Line Of Credit Facility | |||
Revolving credit facility, maximum borrowing capacity | $ 25,000,000 |
Income Tax Provision (Detail)
Income Tax Provision (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rates (percent) | (36.30%) | 22.00% |
Excess tax benefit | $ 22,100 | $ 1,700 |
Effective income tax rate excluding excess tax benefit (percent) | 27.00% | 26.80% |
Income tax payments | $ 176 | $ 88 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic Earnings and Diluted Earnings Per Share Data (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator for basic and diluted earnings per share: | ||
Net income | $ 47,550 | $ 27,348 |
Denominator: | ||
Weighted-average basic common shares outstanding (in shares) | 39,500 | 38,308 |
Assumed conversion of dilutive securities: | ||
Stock awards (in shares) | 1,644 | 1,277 |
Denominator for diluted earnings per share - Adjusted weighted-average shares (in shares) | 41,144 | 39,585 |
Earnings per common share: | ||
Basic (usd per share) | $ 1.20 | $ 0.71 |
Diluted (usd per share) | $ 1.16 | $ 0.69 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of earnings per shares (in shares) | 79 | 1,253 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lessee, Lease, Description | ||
Operating lease renewal term (up to) | 10 years | |
Operating lease, cost | $ 2,634 | $ 2,103 |
Lessor, operating lease renewal term | 5 years | |
Rental income | $ 274 | $ 284 |
Minimum | ||
Lessee, Lease, Description | ||
Operating lease term | 1 year | |
Maximum | ||
Lessee, Lease, Description | ||
Operating lease term | 8 years |
Leases - Schedule of lease cost
Leases - Schedule of lease cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 1,666 | $ 1,370 |
Short-term lease cost | 574 | 570 |
Variable lease cost | 394 | 163 |
Net lease cost | $ 2,634 | $ 2,103 |
Leases - Schedule of leases ass
Leases - Schedule of leases assets and liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets: | ||
Operating lease right-of-use assets | $ 17,992 | $ 18,992 |
Liabilities: | ||
Operating leases, short-term | 6,373 | 6,387 |
Operating leases, long-term | 15,548 | 16,822 |
Total lease liabilities | $ 21,921 | $ 23,209 |
Leases - Schedule of other info
Leases - Schedule of other information related to leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Operating cash outflows from operating leases | $ 1,873 | $ 1,530 |
Operating leases | $ 457 | $ 431 |
Weighted average remaining lease term (years) | 4 years | 5 years |
Weighted average discount rate | 4.00% | 4.00% |
Leases - Maturity of lease liab
Leases - Maturity of lease liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Operating Leases | ||
2020 (Remaining 2020) | $ 5,845 | |
2021 | 6,340 | |
2022 | 4,021 | |
2023 | 2,989 | |
2024 | 2,545 | |
Thereafter | 2,133 | |
Total lease payments | 23,873 | |
Less: Interest | (1,952) | |
Present value of operating lease liabilities | $ 21,921 | $ 23,209 |
Leases - Schedule of future min
Leases - Schedule of future minimum operating rental income (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 (Remaining 2020) | $ 1,009 |
2021 | 1,372 |
2022 | 1,402 |
2023 | 1,432 |
2024 | 1,462 |
Thereafter | 857 |
Total | $ 7,534 |
Share-Based Compensation (Detai
Share-Based Compensation (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||
Share-based compensation expense | $ 17,302 | $ 14,416 |
Cost of software services, maintenance and subscriptions | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||
Share-based compensation expense | 4,252 | 3,798 |
Selling, general and administrative expenses | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||
Share-based compensation expense | $ 13,050 | $ 10,618 |
Segment and Related Informati_3
Segment and Related Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2020Business_UnitSegment | |
Segment Reporting Information | |
Number of business units | Business_Unit | 7 |
Enterprise Software | |
Segment Reporting Information | |
Number of reportable segment | Segment | 1 |
Segment and Related Informati_4
Segment and Related Information - Schedule of Segment Revenues and Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information | ||
Total Revenue | $ 276,541 | $ 247,066 |
Operating income | 33,893 | 34,491 |
Operating segments | Enterprise Software | ||
Segment Reporting Information | ||
Total Revenue | 250,177 | 221,035 |
Operating income | 60,472 | 55,474 |
Operating segments | Appraisal and Tax | ||
Segment Reporting Information | ||
Total Revenue | 30,381 | 29,587 |
Operating income | 6,908 | 7,095 |
Intercompany | ||
Segment Reporting Information | ||
Total Revenue | (4,019) | (3,553) |
Intercompany | Enterprise Software | ||
Segment Reporting Information | ||
Total Revenue | 4,001 | 3,484 |
Intercompany | Appraisal and Tax | ||
Segment Reporting Information | ||
Total Revenue | 18 | 69 |
Corporate | ||
Segment Reporting Information | ||
Total Revenue | (4,017) | (3,556) |
Operating income | (20,068) | (16,546) |
Operating segment and corporate non-segment | ||
Segment Reporting Information | ||
Operating income | 47,312 | 46,023 |
Software licenses and royalties | ||
Segment Reporting Information | ||
Total Revenue | 18,737 | 21,793 |
Software licenses and royalties | Enterprise Software | ||
Segment Reporting Information | ||
Total Revenue | 15,951 | 18,522 |
Software licenses and royalties | Appraisal and Tax | ||
Segment Reporting Information | ||
Total Revenue | 2,786 | 3,271 |
Software licenses and royalties | Corporate | ||
Segment Reporting Information | ||
Total Revenue | 0 | 0 |
Subscriptions | ||
Segment Reporting Information | ||
Total Revenue | 81,723 | 67,275 |
Subscriptions | Enterprise Software | ||
Segment Reporting Information | ||
Total Revenue | 76,644 | 63,255 |
Subscriptions | Appraisal and Tax | ||
Segment Reporting Information | ||
Total Revenue | 5,079 | 4,020 |
Subscriptions | Corporate | ||
Segment Reporting Information | ||
Total Revenue | 0 | 0 |
Software services | ||
Segment Reporting Information | ||
Total Revenue | 52,133 | 48,443 |
Software services | Enterprise Software | ||
Segment Reporting Information | ||
Total Revenue | 44,949 | 40,456 |
Software services | Appraisal and Tax | ||
Segment Reporting Information | ||
Total Revenue | 7,184 | 7,987 |
Software services | Corporate | ||
Segment Reporting Information | ||
Total Revenue | 0 | 0 |
Maintenance | ||
Segment Reporting Information | ||
Total Revenue | 114,365 | 100,152 |
Maintenance | Enterprise Software | ||
Segment Reporting Information | ||
Total Revenue | 104,841 | 91,188 |
Maintenance | Appraisal and Tax | ||
Segment Reporting Information | ||
Total Revenue | 9,524 | 8,964 |
Maintenance | Corporate | ||
Segment Reporting Information | ||
Total Revenue | 0 | 0 |
Appraisal services | ||
Segment Reporting Information | ||
Total Revenue | 5,763 | 5,214 |
Appraisal services | Enterprise Software | ||
Segment Reporting Information | ||
Total Revenue | 0 | 0 |
Appraisal services | Appraisal and Tax | ||
Segment Reporting Information | ||
Total Revenue | 5,763 | 5,214 |
Appraisal services | Corporate | ||
Segment Reporting Information | ||
Total Revenue | 0 | 0 |
Hardware and other | ||
Segment Reporting Information | ||
Total Revenue | 3,820 | 4,189 |
Hardware and other | Enterprise Software | ||
Segment Reporting Information | ||
Total Revenue | 3,791 | 4,130 |
Hardware and other | Appraisal and Tax | ||
Segment Reporting Information | ||
Total Revenue | 27 | 62 |
Hardware and other | Corporate | ||
Segment Reporting Information | ||
Total Revenue | $ 2 | $ (3) |
Segment and Related Informati_5
Segment and Related Information - Reconciliation of Operating Income from Segments to Consolidated (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information | ||
Total segment operating income | $ 33,893 | $ 34,491 |
Other income, net | 990 | 586 |
Income before income taxes | 34,883 | 35,077 |
Operating segment and corporate non-segment | ||
Segment Reporting Information | ||
Total segment operating income | 47,312 | 46,023 |
Segment reconciling items | ||
Segment Reporting Information | ||
Other income, net | 990 | 586 |
Segment reconciling items | Acquired software | ||
Segment Reporting Information | ||
Amortization of intangibles assets | (8,027) | (6,682) |
Segment reconciling items | Customer and trade name | ||
Segment Reporting Information | ||
Amortization of intangibles assets | $ (5,392) | $ (4,850) |
Disaggregation of Revenue (Deta
Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue | ||
Total Revenue | $ 276,541 | $ 247,066 |
Operating segments | Enterprise Software | ||
Disaggregation of Revenue | ||
Total Revenue | 250,177 | 221,035 |
Operating segments | Appraisal and Tax | ||
Disaggregation of Revenue | ||
Total Revenue | 30,381 | 29,587 |
Intercompany | ||
Disaggregation of Revenue | ||
Total Revenue | (4,019) | (3,553) |
Intercompany | Enterprise Software | ||
Disaggregation of Revenue | ||
Total Revenue | 4,001 | 3,484 |
Intercompany | Appraisal and Tax | ||
Disaggregation of Revenue | ||
Total Revenue | 18 | 69 |
Corporate | ||
Disaggregation of Revenue | ||
Total Revenue | (4,017) | (3,556) |
Corporate and Elimination | ||
Disaggregation of Revenue | ||
Total Revenue | (4,017) | (3,556) |
Recurring revenues | ||
Disaggregation of Revenue | ||
Total Revenue | 196,088 | 167,427 |
Recurring revenues | Enterprise Software | ||
Disaggregation of Revenue | ||
Total Revenue | 181,485 | 154,443 |
Recurring revenues | Appraisal and Tax | ||
Disaggregation of Revenue | ||
Total Revenue | 14,603 | 12,984 |
Recurring revenues | Corporate | ||
Disaggregation of Revenue | ||
Total Revenue | 0 | 0 |
Non-recurring revenues | ||
Disaggregation of Revenue | ||
Total Revenue | 80,453 | 79,639 |
Non-recurring revenues | Enterprise Software | ||
Disaggregation of Revenue | ||
Total Revenue | 64,691 | 63,108 |
Non-recurring revenues | Appraisal and Tax | ||
Disaggregation of Revenue | ||
Total Revenue | 15,760 | 16,534 |
Non-recurring revenues | Corporate | ||
Disaggregation of Revenue | ||
Total Revenue | 2 | (3) |
Software licenses and royalties | ||
Disaggregation of Revenue | ||
Total Revenue | 18,737 | 21,793 |
Software licenses and royalties | Enterprise Software | ||
Disaggregation of Revenue | ||
Total Revenue | 15,951 | 18,522 |
Software licenses and royalties | Appraisal and Tax | ||
Disaggregation of Revenue | ||
Total Revenue | 2,786 | 3,271 |
Software licenses and royalties | Corporate | ||
Disaggregation of Revenue | ||
Total Revenue | 0 | 0 |
Subscriptions | ||
Disaggregation of Revenue | ||
Total Revenue | 81,723 | 67,275 |
Subscriptions | Enterprise Software | ||
Disaggregation of Revenue | ||
Total Revenue | 76,644 | 63,255 |
Subscriptions | Appraisal and Tax | ||
Disaggregation of Revenue | ||
Total Revenue | 5,079 | 4,020 |
Subscriptions | Corporate | ||
Disaggregation of Revenue | ||
Total Revenue | 0 | 0 |
Software services | ||
Disaggregation of Revenue | ||
Total Revenue | 52,133 | 48,443 |
Software services | Enterprise Software | ||
Disaggregation of Revenue | ||
Total Revenue | 44,949 | 40,456 |
Software services | Appraisal and Tax | ||
Disaggregation of Revenue | ||
Total Revenue | 7,184 | 7,987 |
Software services | Corporate | ||
Disaggregation of Revenue | ||
Total Revenue | 0 | 0 |
Maintenance | ||
Disaggregation of Revenue | ||
Total Revenue | 114,365 | 100,152 |
Maintenance | Enterprise Software | ||
Disaggregation of Revenue | ||
Total Revenue | 104,841 | 91,188 |
Maintenance | Appraisal and Tax | ||
Disaggregation of Revenue | ||
Total Revenue | 9,524 | 8,964 |
Maintenance | Corporate | ||
Disaggregation of Revenue | ||
Total Revenue | 0 | 0 |
Appraisal services | ||
Disaggregation of Revenue | ||
Total Revenue | 5,763 | 5,214 |
Appraisal services | Enterprise Software | ||
Disaggregation of Revenue | ||
Total Revenue | 0 | 0 |
Appraisal services | Appraisal and Tax | ||
Disaggregation of Revenue | ||
Total Revenue | 5,763 | 5,214 |
Appraisal services | Corporate | ||
Disaggregation of Revenue | ||
Total Revenue | 0 | 0 |
Hardware and other | ||
Disaggregation of Revenue | ||
Total Revenue | 3,820 | 4,189 |
Hardware and other | Enterprise Software | ||
Disaggregation of Revenue | ||
Total Revenue | 3,791 | 4,130 |
Hardware and other | Appraisal and Tax | ||
Disaggregation of Revenue | ||
Total Revenue | 27 | 62 |
Hardware and other | Corporate | ||
Disaggregation of Revenue | ||
Total Revenue | 2 | (3) |
Products and services transferred at a point in time | ||
Disaggregation of Revenue | ||
Total Revenue | 19,886 | 21,099 |
Products and services transferred at a point in time | Software licenses and royalties | ||
Disaggregation of Revenue | ||
Total Revenue | 16,066 | 16,910 |
Products and services transferred at a point in time | Subscriptions | ||
Disaggregation of Revenue | ||
Total Revenue | 0 | 0 |
Products and services transferred at a point in time | Software services | ||
Disaggregation of Revenue | ||
Total Revenue | 0 | 0 |
Products and services transferred at a point in time | Maintenance | ||
Disaggregation of Revenue | ||
Total Revenue | 0 | 0 |
Products and services transferred at a point in time | Appraisal services | ||
Disaggregation of Revenue | ||
Total Revenue | 0 | 0 |
Products and services transferred at a point in time | Hardware and other | ||
Disaggregation of Revenue | ||
Total Revenue | 3,820 | 4,189 |
Products and services transferred over time | ||
Disaggregation of Revenue | ||
Total Revenue | 256,655 | 225,967 |
Products and services transferred over time | Software licenses and royalties | ||
Disaggregation of Revenue | ||
Total Revenue | 2,671 | 4,883 |
Products and services transferred over time | Subscriptions | ||
Disaggregation of Revenue | ||
Total Revenue | 81,723 | 67,275 |
Products and services transferred over time | Software services | ||
Disaggregation of Revenue | ||
Total Revenue | 52,133 | 48,443 |
Products and services transferred over time | Maintenance | ||
Disaggregation of Revenue | ||
Total Revenue | 114,365 | 100,152 |
Products and services transferred over time | Appraisal services | ||
Disaggregation of Revenue | ||
Total Revenue | 5,763 | 5,214 |
Products and services transferred over time | Hardware and other | ||
Disaggregation of Revenue | ||
Total Revenue | $ 0 | $ 0 |
Disaggregation of Revenue - Add
Disaggregation of Revenue - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Minimum | |
Disaggregation of Revenue | |
Contract term | 1 year |
Typical contract term | 3 years |
Maximum | |
Disaggregation of Revenue | |
Contract term | 10 years |
Typical contract term | 5 years |
Deferred Revenue and Performa_3
Deferred Revenue and Performance Obligations - Deferred Revenue (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Disaggregation of Revenue | |
Deferred revenue | $ 366,126 |
Contract With Customer Liability | |
Balance as of December 31, 2019 | 412,694 |
Deferral of revenue | 198,324 |
Recognition of deferred revenue | (244,892) |
Balance as of March 31, 2020 | 366,126 |
Operating segments | Enterprise Software | |
Disaggregation of Revenue | |
Deferred revenue | 375,838 |
Contract With Customer Liability | |
Balance as of December 31, 2019 | 375,838 |
Balance as of March 31, 2020 | 333,314 |
Operating segments | Appraisal and Tax | |
Disaggregation of Revenue | |
Deferred revenue | 35,487 |
Contract With Customer Liability | |
Balance as of December 31, 2019 | 35,487 |
Balance as of March 31, 2020 | 31,205 |
Corporate | |
Disaggregation of Revenue | |
Deferred revenue | 1,369 |
Contract With Customer Liability | |
Balance as of December 31, 2019 | 1,369 |
Balance as of March 31, 2020 | $ 1,607 |
Deferred Revenue and Performa_4
Deferred Revenue and Performance Obligations - Additional Information (Details) $ in Billions | Mar. 31, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 1.5 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 48.00% |
Expected timing of satisfaction period | 12 months |
Commitments and Contingencies (
Commitments and Contingencies (Detail) | Mar. 31, 2020LegalMatter |
Commitments and Contingencies Disclosure [Abstract] | |
Number of material legal proceedings pending | 0 |