Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 22, 2016 | Jun. 30, 2015 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | TYL | ||
Entity Registrant Name | TYLER TECHNOLOGIES INC | ||
Entity Central Index Key | 860,731 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 36,572,000 | ||
Entity Public Float | $ 4,228,484,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | |||
Software licenses and royalties | $ 59,008 | $ 49,065 | $ 40,841 |
Subscriptions | 111,933 | 87,848 | 61,864 |
Software services | 139,852 | 113,821 | 93,267 |
Maintenance | 245,537 | 212,696 | 191,720 |
Appraisal services | 25,065 | 21,802 | 20,825 |
Hardware and other | 9,627 | 7,869 | 8,126 |
Total revenues | 591,022 | 493,101 | 416,643 |
Cost of revenues: | |||
Software licenses and royalties | 1,632 | 1,900 | 2,377 |
Acquired software | 4,440 | 1,858 | 2,078 |
Software services, maintenance and subscriptions | 285,340 | 236,363 | 199,617 |
Appraisal services | 15,922 | 14,284 | 13,809 |
Hardware and other | 6,501 | 5,325 | 5,559 |
Total cost of revenues | 313,835 | 259,730 | 223,440 |
Gross profit | 277,187 | 233,371 | 193,203 |
Selling, general and administrative expenses | 133,317 | 108,260 | 98,289 |
Research and development expense | 29,922 | 25,743 | 23,269 |
Amortization of customer and trade name intangibles | 10,300 | 6,400 | 6,800 |
Operating income | 108,043 | 94,822 | 67,128 |
Other income (expense), net | 381 | (355) | (1,309) |
Income before income taxes | 108,424 | 94,467 | 65,819 |
Income tax provision | 43,555 | 35,527 | 26,718 |
Net income | $ 64,869 | $ 58,940 | $ 39,101 |
Earnings per common share: | |||
Basic | $ 1.90 | $ 1.79 | $ 1.23 |
Diluted | $ 1.77 | $ 1.66 | $ 1.13 |
Unrealized gains on investment securities available-for-sale | $ 341 | ||
Income tax benefit related to components of other comprehensive income | 119 | ||
Other comprehensive income, net of tax | 222 | ||
Comprehensive income | $ 64,869 | $ 58,940 | 39,323 |
Customer and trade name intangibles [Member] | |||
Cost of revenues: | |||
Amortization of customer and trade name intangibles | $ 5,905 | $ 4,546 | $ 4,517 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 33,087 | $ 206,167 |
Accounts receivable (less allowance for losses of $1,640 in 2015 and $1,725 in 2014) | 176,360 | 112,660 |
Short-term investments | 13,423 | |
Prepaid expenses | 22,334 | 17,851 |
Income tax receivable | 21,080 | 19 |
Other current assets | 1,931 | 339 |
Total current assets | 268,215 | 337,036 |
Accounts receivable, long-term | 2,777 | 1,761 |
Property and equipment, net | 101,112 | 65,910 |
Deferred income taxes | 5,504 | |
Other assets: | ||
Goodwill | 653,666 | 124,142 |
Other intangibles, net | 295,378 | 34,722 |
Cost method investment | 15,000 | |
Non-current investments and other assets | 20,422 | 737 |
Total assets | 1,356,570 | 569,812 |
Current liabilities: | ||
Accounts payable | 6,789 | 4,119 |
Accrued liabilities | 49,156 | 39,508 |
Deferred revenue | 281,627 | 189,212 |
Total current liabilities | 337,572 | $ 232,839 |
Revolving line of credit | 66,000 | |
Deferred revenue, long-term | 3,115 | |
Deferred income taxes | $ 91,026 | |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock, $10.00 par value; 1,000,000 shares authorized; none issued | ||
Common stock, $0.01 par value; 100,000,000 shares authorized; 48,147,969 shares issued in 2015 and 2014 | $ 481 | $ 481 |
Additional paid-in capital | 607,755 | 201,389 |
Accumulated other comprehensive loss, net of tax | (46) | (46) |
Retained earnings | 326,019 | 261,150 |
Treasury stock, at cost; 11,373,666 and 14,678,782 shares in 2015 and 2014, respectively | (75,352) | (126,001) |
Total shareholders' equity | 858,857 | 336,973 |
Liabilities and Shareholders' equity, Total | $ 1,356,570 | $ 569,812 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance for losses | $ 1,640 | $ 1,725 |
Preferred stock, par value | $ 10 | $ 10 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 48,147,969 | 48,147,969 |
Treasury stock, shares | 11,373,666 | 14,678,782 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] | Treasury Stock [Member] |
Balance at Dec. 31, 2012 | $ 145,299 | $ 481 | $ 154,018 | $ (268) | $ 163,109 | $ (172,041) |
Balance, shares at Dec. 31, 2012 | 48,148 | (16,817) | ||||
Net income | 39,101 | 39,101 | ||||
Unrealized gain on investment securities, net of tax | 222 | 222 | ||||
Issuance of shares pursuant to stock compensation plan | 18,289 | (13,742) | $ 32,031 | |||
Issuance of shares pursuant to stock compensation plan, shares | 1,443 | |||||
Stock compensation | 11,653 | 11,653 | ||||
Issuance of shares pursuant to employee stock purchase plan | $ 3,542 | 2,034 | $ 1,508 | |||
Issuance of shares pursuant to employee stock purchase plan, shares | 64 | 64 | ||||
Federal income tax benefit related to exercise of stock options | $ 28,213 | 28,213 | ||||
Balance at Dec. 31, 2013 | 246,319 | $ 481 | 182,176 | (46) | 202,210 | $ (138,502) |
Balance, shares at Dec. 31, 2013 | 48,148 | (15,310) | ||||
Net income | 58,940 | 58,940 | ||||
Issuance of shares pursuant to stock compensation plan | 14,680 | (17,449) | $ 32,129 | |||
Issuance of shares pursuant to stock compensation plan, shares | 855 | |||||
Stock compensation | 14,819 | 14,819 | ||||
Issuance of shares pursuant to employee stock purchase plan | $ 4,144 | 2,235 | $ 1,909 | |||
Issuance of shares pursuant to employee stock purchase plan, shares | 53 | 53 | ||||
Federal income tax benefit related to exercise of stock options | $ 19,415 | 19,415 | ||||
Balance at Dec. 31, 2014 | 336,973 | $ 481 | 201,389 | (46) | 261,150 | $ (126,001) |
Balance, shares at Dec. 31, 2014 | 48,148 | (14,679) | ||||
Treasury stock purchases | $ (22,817) | $ (22,817) | ||||
Treasury stock purchases, shares | (294) | (294) | ||||
Issuance of shares for acquisitions | $ 1,473 | 193 | $ 1,280 | |||
Issuance of shares for acquisitions, shares | 17 | 17 | ||||
Net income | $ 64,869 | 64,869 | ||||
Issuance of shares pursuant to stock compensation plan | 23,160 | 4,332 | $ 18,828 | |||
Issuance of shares pursuant to stock compensation plan, shares | 1,118 | |||||
Stock compensation | 20,182 | 20,182 | ||||
Issuance of shares pursuant to employee stock purchase plan | $ 4,671 | 3,879 | $ 792 | |||
Issuance of shares pursuant to employee stock purchase plan, shares | 43 | 43 | ||||
Federal income tax benefit related to exercise of stock options | $ 45,314 | 45,314 | ||||
Balance at Dec. 31, 2015 | 858,857 | $ 481 | 607,755 | $ (46) | $ 326,019 | $ (75,352) |
Balance, shares at Dec. 31, 2015 | 48,148 | (11,374) | ||||
Treasury stock purchases | $ (645) | $ (645) | ||||
Treasury stock purchases, shares | (5) | (5) | ||||
Issuance of shares for acquisitions | $ 364,333 | $ 332,659 | $ 31,674 | |||
Issuance of shares for acquisitions, shares | 2,149 | 2,149 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income | $ 64,869 | $ 58,940 | $ 39,101 |
Adjustments to reconcile net income to cash provided by operations: | |||
Depreciation and amortization | 19,574 | 14,605 | 13,786 |
Share-based compensation expense | 20,182 | 14,819 | 11,653 |
Provision for losses - accounts receivable | 1,756 | 1,897 | 729 |
Excess tax benefit from exercises of share-based arrangements | (45,314) | (19,402) | (28,207) |
Deferred income tax benefit | (7,956) | (3,804) | (1,497) |
Changes in operating assets and liabilities, exclusive of effects of acquired companies: | |||
Accounts receivable | (28,172) | (8,912) | (7,488) |
Income tax receivable | 24,255 | 29,117 | 18,898 |
Prepaid expenses and other current assets | (3,054) | (3,696) | (4,154) |
Accounts payable | 652 | 1,586 | (574) |
Accrued liabilities | 490 | 6,326 | 7,655 |
Deferred revenue | 41,731 | 31,961 | 16,188 |
Net cash provided by operating activities | 89,013 | 123,437 | 66,090 |
Cash flows from investing activities: | |||
Cost of acquisitions, net of cash acquired | (339,961) | (3,242) | (181) |
Purchase of cost method investment | (15,000) | ||
Purchase of marketable security investments | (31,907) | ||
Proceeds from marketable security investments | 900 | 808 | 1,090 |
Additions to property and equipment | (12,501) | (9,343) | (26,858) |
Decrease in other | 10 | 222 | 291 |
Net cash used by investing activities | (398,459) | (11,555) | (25,658) |
Cash flows from financing activities: | |||
Increase (decrease) in net borrowings on revolving line of credit | 66,000 | (18,000) | |
Purchase of treasury shares | (645) | (22,817) | |
Contributions from employee stock purchase plan | 4,671 | 4,144 | 3,542 |
Proceeds from exercise of stock options | 23,160 | 14,680 | 18,289 |
Debt issuance costs | (2,134) | ||
Excess tax benefit from exercises of share-based arrangements | 45,314 | 19,402 | 28,207 |
Net cash provided by financing activities | 136,366 | 15,409 | 32,038 |
Net (decrease) increase in cash and cash equivalents | (173,080) | 127,291 | 72,470 |
Cash and cash equivalents at beginning of period | 206,167 | 78,876 | 6,406 |
Cash and cash equivalents at end of period | $ 33,087 | $ 206,167 | $ 78,876 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF BUSINESS We provide integrated software systems and related services for the public sector, with a focus on local governments. We develop and market a broad line of software solutions and services to address the information technology (“IT”) needs of cities, counties, schools and other local government entities. In addition, we provide professional IT services, including software and hardware installation, data conversion, training, and for certain customers, product modifications, along with continuing maintenance and support for customers using our systems. We also provide subscription-based services such as software as a service (“SaaS”) arrangements, which utilize the Tyler private cloud, and electronic document filing solutions (“e-filing”). In addition, we provide property appraisal outsourcing services for taxing jurisdictions. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include our parent company and a subsidiary, which is wholly-owned. All significant intercompany balances and transactions have been eliminated in consolidation. CASH AND CASH EQUIVALENTS Cash in excess of that necessary for operating requirements is invested in short-term, highly liquid, income-producing investments. Investments with original maturities of three months or less are classified as cash and cash equivalents, which primarily consist of cash on deposit with several banks and money market funds. Cash and cash equivalents are stated at cost, which approximates market value. REVENUE RECOGNITION We earn revenue from software licenses, royalties, subscription-based services, software services, post-contract customer support (“PCS” or “maintenance”), hardware, and appraisal services. Software Arrangements: For the majority of our software arrangements, we provide services that range from installation, training, and basic consulting to software modification and customization to meet specific customer needs. If the arrangement does not require significant production, modification or customization or where the software services are not considered essential to the functionality of the software, revenue is recognized when all of the following conditions are met: i . persuasive evidence of an arrangement exists; ii. delivery has occurred; iii. our fee is fixed or determinable; and iv. collectability is probable. For multiple element arrangements, each element of the arrangement is analyzed and we allocate a portion of the total arrangement fee to the elements based on the relative fair value of the element using vendor-specific objective evidence of fair value (“VSOE”), regardless of any separate prices stated within the contract for each element. Fair value is considered the price a customer would be required to pay if the element was sold separately based on our historical experience of stand-alone sales of these elements to third-parties. For PCS, we use renewal rates for continued support arrangements to determine fair value. For software services, we use the fair value we charge our customers when those services are sold separately. We monitor our transactions to determine that we maintain and periodically revise VSOE to reflect fair value. In software arrangements in which we have the fair value of all undelivered elements but not of a delivered element, we apply the “residual method,” in compliance with Accounting Standards Codification (“ASC”) 985-605, Software Revenue Recognition. Under the residual method, if the fair value of all undelivered elements is determinable, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered element(s) and is recognized as revenue assuming the other revenue recognition criteria are met. In software arrangements in which we do not have VSOE for all undelivered elements, revenue is deferred until fair value is determined or all elements for which we do not have VSOE have been delivered. Alternatively, if sufficient VSOE does not exist and the only undelivered element is services that do not involve significant modification or customization of the software, the entire fee is recognized over the period during which the services are expected to be performed. Software Licenses and Royalties We recognize the revenue allocable to software licenses and specified upgrades upon delivery of the software product or upgrade to the customer, unless the fee is not fixed or determinable or collectability is not probable. If the fee is not fixed or determinable, software license revenue is generally recognized as payments become due from the customer. If collectability is not considered probable, revenue is recognized when the fee is collected. Arrangements that include software services, such as training or installation, are evaluated to determine whether those services are essential to the product’s functionality. A majority of our software arrangements involve “off-the-shelf” software. We consider software to be off-the-shelf software if it can be added to an arrangement with minor changes in the underlying code and it can be used by the customer for the customer’s purpose upon installation. For off-the-shelf software arrangements, we recognize the software license fee as revenue after delivery has occurred, customer acceptance is reasonably assured, that portion of the fee represents a non-refundable enforceable claim and is probable of collection, and the remaining services such as training are not considered essential to the product’s functionality. For arrangements that involve significant production, modification or customization of the software, or where software services are otherwise considered essential, we recognize revenue using contract accounting and apply the provisions of the Construction – Type and Production – Type Contracts as discussed in ASC 605-35, Multiple Elements Arrangements. We generally use the percentage-of-completion method to recognize revenue from these arrangements. We measure progress-to-completion primarily using labor hours incurred, or value added. The percentage-of-completion method generally results in the recognition of reasonably consistent profit margins over the life of a contract because we have the ability to produce 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 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. For arrangements that include new product releases for which it is difficult to estimate final profitability except to assume that no loss will ultimately be incurred, we recognize revenue under the completed contract method. Under the completed contract method, revenue is recognized only when a contract is completed or substantially complete. Historically these amounts have been immaterial. We recognize royalty revenue when earned under the terms of our third-party royalty arrangements, provided the fees are considered fixed or determinable and realization of payment is probable. Currently, our third-party royalties are variable in nature and such amounts are not considered fixed or determinable until we receive notice of amounts earned. Typically, we receive notice of royalty revenues earned on a quarterly basis in the quarter immediately following the royalty reporting period. Software Services Some of our software arrangements include services considered essential for the customer to use the software for the customer’s purposes. For these software arrangements, both the software license revenue and the services revenue are recognized as the services are performed using the percentage-of-completion contract accounting method. When software services are not considered essential, the fee allocable to the service element is recognized as revenue as we perform the services. Computer Hardware Equipment Revenue allocable to computer hardware equipment is recognized when we deliver the equipment and collection is probable. Post Contract Customer Support Our customers generally enter into PCS agreements when they purchase our software licenses. PCS includes telephone support, bug fixes, and rights to upgrades on a when-and-if available basis. Our PCS agreements are typically renewable annually. Revenue allocated to PCS is recognized on a straight-line basis over the period the PCS is provided. All significant costs and expenses associated with PCS are expensed as incurred. Subscription-Based Services: Subscription-based services consist of revenues derived from SaaS arrangements, which utilize the Tyler private cloud, and electronic filing transactions. For SaaS arrangements, we evaluate whether the customer has the contractual right to take possession of our software at any time during the hosting period without significant penalty and whether the customer can feasibly maintain the software on the customer’s hardware or enter into another arrangement with a third-party to host the software. In cases where the customer has the contractual right to take possession of our software at any time during the hosting period without significant penalty and the customer can feasibly maintain the software on the customer’s hardware or enter into another arrangement with a third-party to host the software, we recognize the license, professional services and hosting services revenues pursuant to ASC 985-605, Software Revenue Recognition. For SaaS arrangements that do not meet the criteria for recognition under ASC 985-605, we account for the elements under ASC 605-25, Multiple Element Arrangements, using all applicable facts and circumstances, including whether (i) the element has stand-alone value, (ii) there is a general right of return and (iii) the revenue is contingent on delivery of other elements. We allocate contract value to each element of the arrangement that qualifies for treatment as a separate element based on VSOE, and if VSOE is not available, third-party evidence, and if third-party evidence is unavailable, estimated selling price. We recognize hosting services ratably over the term of the arrangement, which range from one to 10 years but are typically for a period of three to seven years. For professional services associated with SaaS arrangements that we determine do not have stand-alone value to the customer or are contingent on delivery of other elements, we recognize the services revenue ratably over the remaining contractual period once we have provided the customer access to the software and we may begin billing for hosting services. We record amounts that have been invoiced in accounts receivable and in deferred revenue or revenues, depending on whether the revenue recognition criteria have been met. Electronic filing transaction fees primarily pertain to documents filed with the courts by attorneys and other third-parties via our e-filing services and retrieval of filed documents via our access services. The elements for these arrangements are accounted for under ASC 605-25. For each document filed with a court, the filer generally pays a transaction fee and a court filing fee to us and we remit a portion of the transaction fee and the filing fee to the court. We record as revenue the transaction fee, while the portion of the transaction fee remitted to the courts is recorded as cost of sales as we are acting as a principal in the arrangement. Court filing fees collected on behalf of the courts and remitted to the courts are recorded on a net basis and thus do not affect the statement of comprehensive income. In some cases, we are paid on a fixed fee basis and recognize the revenue ratably over the contractual period. Costs of performing services under subscription-based arrangements are expensed as incurred, except for certain direct and incremental contract origination and set-up costs associated with SaaS arrangements. Such direct and incremental costs are capitalized and amortized ratably over the related SaaS hosting term. Appraisal Services: For our property appraisal projects, we recognize revenue using the proportional performance method of revenue recognition since many of these projects are implemented over one to three year periods and consist of various unique activities. Under this method of revenue recognition, we identify each activity for the appraisal project, with a typical project generally calling for bonding, office set up, training, routing of map information, data entry, data collection, data verification, informal hearings, appeals and project management. Each activity or act is specifically identified and assigned an estimated cost. Costs which are considered to be associated with indirect activities, such as bonding costs and office set up, are expensed as incurred. These costs are typically billed as incurred and are recognized as revenue equal to cost. Direct contract fulfillment activities and related supervisory costs such as data collection, data entry and verification are expensed as incurred. The direct costs for these activities are determined and the total contract value is then allocated to each activity based on a consistent profit margin. Each activity is assigned a consistent unit of measure to determine progress towards completion and revenue is recognized for each activity based upon the percentage complete as applied to the estimated revenue for that activity. Progress for the fulfillment activities is typically based on labor hours or an output measure such as the number of parcel counts completed for that activity. Estimated losses on uncompleted contracts are recorded in the period in which we first determine that a loss is apparent. Allocation of Revenue in Statements of Comprehensive Income In our statements of comprehensive income, we allocate revenue to software licenses, software services, maintenance and hardware and other based on the VSOE of fair value for elements in each revenue arrangement and the application of the residual method for arrangements in which we have established VSOE of fair value for all undelivered elements. In arrangements where we are not able to establish VSOE of fair value for all undelivered elements, revenue is first allocated to any undelivered elements for which VSOE of fair value has been established. We then allocate revenue to any undelivered elements for which VSOE of fair value has not been established based upon management’s best estimate of fair value of those undelivered elements and apply a residual method to determine the license fee. Management’s best estimate of fair value of undelivered elements for which VSOE of fair value has not been established is based upon the VSOE of similar offerings and other objective criteria. Other The majority of deferred revenue consists of unearned support and maintenance revenue that has been billed based on contractual terms in the underlying arrangement with the remaining balance consisting of payments received in advance of revenue being earned under software licensing, subscription-based services, software and appraisal services and hardware installation. Unbilled revenue is not billable at the balance sheet date but is recoverable over the remaining life of the contract through billings made in accordance with contractual agreements. The termination clauses in our contracts generally provide for the payment for the value of products delivered and services performed in the event of an early termination. Prepaid expenses and other current assets include direct and incremental costs such as commissions associated with arrangements for which revenue recognition has been deferred. Such costs are expensed at the time the related revenue is recognized. 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 the application of the percentage-of-completion and proportional performance methods of revenue recognition, the carrying amount and estimated useful lives of intangible assets, determination of share-based compensation expense and valuation allowance for receivables. Actual results could differ from estimates. PROPERTY AND EQUIPMENT, NET Property, equipment and purchased software are recorded at original cost and increased by the cost of any significant improvements after purchase. We expense maintenance and repairs when incurred. Depreciation and amortization is calculated using the straight-line method over the shorter of the asset’s estimated useful life or the term of the lease in the case of leasehold improvements. For income tax purposes, we use accelerated depreciation methods as allowed by tax laws. RESEARCH AND DEVELOPMENT COSTS We expensed research and development costs of $29.9 million during 2015, $25.7 million during 2014, and $23.3 million during 2013. INCOME TAXES Income taxes are accounted for under the asset and liability method. Deferred taxes arise because of different treatment between financial statement accounting and tax accounting, known as “temporary differences.” We record the tax effect of these temporary differences as “deferred tax assets” (generally items that can be used as a tax deduction or credit in the future periods) and “deferred tax liabilities” (generally items that we received a tax deduction for, which have not yet been recorded in the income statement). The deferred tax assets and liabilities are measured using enacted tax rules and laws that are expected to be in effect when the temporary differences are expected to be recovered or settled. A valuation allowance would be established to reduce deferred tax assets if it is more likely than not that a deferred tax asset will not be realized. On November 20, 2015, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The standard amends the current requirement for entities to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, entities will now be required to classify all deferred tax assets and liabilities as noncurrent. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, with early adoption permitted. We early adopted this standard during fourth quarter 2015, utilizing the retrospective application as permitted. As such, certain prior period amounts have been reclassified to conform to the current presentation. SHARE-BASED COMPENSATION We have a stock option plan that provides for the grant of stock options to key employees, directors and non-employee consultants. Stock options generally vest after three to six years of continuous service from the date of grant and have a contractual term of 10 years. We account for share-based compensation utilizing the fair value recognition pursuant to ASC 718, Stock Compensation. See Note 9 – “Share-Based Compensation” for further information. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets acquired, including identifiable intangible assets, in connection with our business combinations. Upon acquisition, goodwill is assigned to the reporting unit that is expected to benefit from the synergies of the business combination, which is the reporting unit to which the related acquired technology is assigned. A reporting unit is the operating segment, or a business unit one level below that operating segment, for which discrete financial information is prepared and regularly reviewed by executive management. We assess goodwill for impairment annually as of April, or more frequently whenever events or changes in circumstances indicate its carrying value may not be recoverable. When testing goodwill for impairment quantitatively, we first compare the fair value of each reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, a second step is performed to measure the amount of potential impairment. In the second step, we compare the implied fair value of reporting unit goodwill with the carrying amount of the reporting unit’s goodwill. If the carrying amount of reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized. The fair values calculated in our impairment tests are determined using discounted cash flow models involving several assumptions. The assumptions that are used are based upon what we believe a hypothetical marketplace participant would use in estimating fair value. We evaluate the reasonableness of the fair value calculations of our reporting units by comparing the total of the fair value of all of our reporting units to our total market capitalization. Our annual goodwill impairment analysis, which we performed quantitatively during the second quarter of 2015, did not result in an impairment charge. Other Intangible Assets We make judgments about the recoverability of purchased intangible assets other than goodwill whenever events or changes in circumstances indicate that an impairment may exist. Customer base and acquired software each comprise approximately half of our purchased intangible assets other than goodwill. We review our customer turnover each year for indications of impairment. Our customer turnover has historically been very low. There have been no significant impairments of intangible assets in any of the periods presented. If indications of impairment are determined to exist, we measure the recoverability of assets by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the assets exceeds their estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the assets exceeds the fair value of the assets. IMPAIRMENT OF LONG-LIVED ASSETS We periodically evaluate whether current facts or circumstances indicate that the carrying value of our property and equipment or other long-lived assets to be held and used may not be recoverable. If such circumstances are determined to exist, we measure the recoverability of assets to be held and used by a comparison of the carrying amount of the asset or appropriate grouping of assets and the estimated undiscounted future cash flows expected to be generated by the assets. If the carrying amount of the assets exceeds their estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. There have been no significant impairments of long-lived assets in any of the periods presented. COSTS OF COMPUTER SOFTWARE We capitalize software development costs upon the establishment of technological feasibility and prior to the availability of the product for general release to customers. Software development costs primarily consist of personnel costs and rent for related office space. We begin to amortize capitalized costs when a product is available for general release to customers. Amortization expense is determined on a product-by-product basis at a rate not less than straight-line basis over the product’s remaining estimated economic life. We have not capitalized any internal software development costs in any of the periods presented. FAIR VALUE OF FINANCIAL INSTRUMENTS Cash and cash equivalents, accounts receivables, accounts payables, short-term obligations and certain other assets at cost approximate fair value because of the short maturity of these instruments. The fair value of our revolving line of credit approximates book value as of December 31, 2015, because our interest rates reset approximately every 30 days or less. See Note 6 – “Revolving Line of Credit” for further discussion. As of December 2015, we have $30.9 million in investment grade corporate and municipal bonds with maturity dates ranging from 2016 through mid-2017. 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 from other observable market data. These investments are included in short-term investments and non-current investments and other assets. On January 30, 2015, we made a $15.0 million investment in convertible preferred stock representing a 20% interest in Record Holdings Pty Limited, a privately held Australian company specializing in digitizing the spoken word in court and legal proceedings. The fair value of this investment is based on valuations using Level III, unobservable inputs that are supported by little or no market value activity and that are significant to the fair value of the investment. CONCENTRATIONS OF CREDIT RISK AND UNBILLED RECEIVABLES Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, accounts receivable from trade customers, and investments in marketable securities. Our cash and cash equivalents primarily consists of operating account balances and money market funds, which are maintained at several major domestic financial institutions and the balances often exceed insured amounts. As of December 31, 2015 we had cash and cash equivalents of $33.1 million. We perform periodic evaluations of the credit standing of these financial institutions. Concentrations of credit risk with respect to receivables are limited due to the size and geographical diversity of our customer base. Historically, our credit losses have not been significant. As a result, we do not believe we have any significant concentrations of credit risk as of December 31, 2015. We maintain allowances for doubtful accounts and sales adjustments, which are provided at the time the revenue is recognized. Since most of our customers are domestic governmental entities, we rarely incur a loss resulting from the inability of a customer to make required payments. Events or changes in circumstances that indicate that the carrying amount for the allowances for doubtful accounts and sales adjustments may require revision, include, but are not limited to, deterioration of a customer’s financial condition, failure to manage our customer’s expectations regarding the scope of the services to be delivered, and defects or errors in new versions or enhancements of our software products. The following table summarizes the changes in the allowances for doubtful accounts and sales adjustments: Years ended December 31, 2015 2014 2013 Balance at beginning of year $ 1,725 $ 1,113 $ 1,621 Provisions for losses - accounts receivable 1,756 1,897 729 Collection of accounts previously written off 153 — — Deductions for accounts charged off or credits issued (1,994 ) (1,285 ) (1,237 ) Balance at end of year $ 1,640 $ 1,725 $ 1,113 The termination clauses in most of our contracts provide for the payment for the value of products delivered or services performed in the event of early termination. Our property appraisal outsourcing service contracts can range up to three years and, in a few cases, as long as five years, in duration. In connection with these contracts, as well as certain software service contracts, we may perform work prior to when the software and services are billable and/or payable pursuant to the contract. We have historically recorded such unbilled receivables (costs and estimated profit in excess of billings) in connection with (1) property appraisal services contracts accounted for using proportional performance accounting in which the revenue is earned based upon activities performed in one accounting period but the billing normally occurs subsequently and may span another accounting period; (2) software services contracts accounted for using the percentage-of-completion method of revenue recognition using labor hours as a measure of progress towards completion in which the services are performed in one accounting period but the billing for the software element of the arrangement may be based upon the specific phase of the implementation; (3) software revenue for which we have objective evidence that the customer-specified objective criteria has been met but the billing has not yet been submitted to the customer; (4) some of our contracts provide for an amount to be withheld from a progress billing (generally between 5% and 20% retention) until final and satisfactory project completion is achieved; and (5) in a limited number of cases, we may grant extended payment terms, generally to existing customers with whom we have a long-term relationship and favorable collection history. We have recorded unbilled receivables of $29.7 million and $14.8 million at December 31, 2015 and 2014, respectively. We also have recorded retention receivables of $4.7 million at December 31, 2015 and 2014, respectively, and these retentions become payable upon the completion of the contract or completion of our fieldwork and formal hearings. Unbilled receivables and retention receivables expected to be collected in excess of one year have been included with accounts receivable, long-term portion in the accompanying consolidated balance sheets. INDEMNIFICATION Most of our software license agreements indemnify our customers in the event that the software sold infringes upon the intellectual property rights of a third-party. These agreements typically provide that in such event we will either modify or replace the software so that it becomes non-infringing or procure for the customer the right to use the software. We have recorded no liability associated with these indemnifications, as we are not aware of any pending or threatened infringement actions that are possible losses. We believe the estimated fair value of these intellectual property indemnification clauses is minimal. We have also agreed to indemnify our officers and board members if they are named or threatened to be named as a party to any proceeding by reason of the fact that they acted in such capacity. We maintain directors’ and officers’ liability insurance coverage to protect against any such losses. We have recorded no liability associated with these indemnifications. Because of our insurance coverage, we believe the estimated fair value of these indemnification agreements is minimal. RECLASSIFICATIONS Certain amounts for previous years have been reclassified to conform to the current year presentation. NEW ACCOUNTING PRONOUNCEMENTS On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers.” This ASU is the result of a convergence project between the FASB and the International Accounting Standards Board. The core principle behind ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for delivering those goods and services. This model involves a fiv |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | (2) ACQUISITIONS 2015 On November 16, 2015, we acquired all of the capital stock of New World Systems Corporation (“NWS”), which provides public safety and financial solutions for local governments. The purchase price, net of cash acquired of $22.5 million, was $337.5 million in cash, of which $4.0 million was accrued at December 31, 2015, and 2.1 million shares of Tyler common stock valued at $362.8 million, which was based on the closing price on November 16, 2015. We also incurred fees of approximately $5.9 million for financial advisory, legal, accounting, due diligence, valuation and other various services necessary to complete the acquisition. These fees were expensed in 2015 and are included in selling, general and administrative expenses. Tyler has performed a preliminary valuation analysis of the fair market value of NWS’ assets and liabilities. The following table summarizes the allocation of the preliminary purchase price as of the acquisition date. Cash $ 22,486 Accounts receivable 37,098 Other current assets 2,371 Property and equipment 30,672 Identifiable intangible assets 264,814 Goodwill 527,618 Accounts payable (1,382 ) Accrued expenses (7,282 ) Deferred revenue (53,098 ) Deferred tax liabilities, net (104,484 ) Total consideration $ 718,813 In connection with this transaction we acquired total tangible assets of $70.1 million and assumed liabilities of approximately $61.8 million. We recorded goodwill of $527.6 million, none of which is expected to be deductible for tax purposes, and other intangible assets of approximately $264.8 million. Approximately $261.1 million of intangible assets is attributable to customer relationships, acquired software and trade name and will be amortized over a weighted average period of approximately 11 years. Also included in other intangibles is an asset for approximately $3.7 million to reflect the fair value of existing lease agreements, and this intangible will be amortized over the weighted average life of these lease agreements of approximately 9 years and reduces other income. In addition, we recorded deferred tax liabilities of $104.5 million related to estimated fair value allocations. We believe this transaction will broaden our courts and justice software solutions and will create a unique end-to-end enterprise criminal justice solution. We believe that likely market participants for this transaction would be entities with a presence in the judicial and public safety markets. Therefore, the goodwill of $527.6 million arising from this acquisition is primarily attributed to our ability to integrate NWS solutions with our existing portfolio and generate increased revenues, earnings and cash flow. As of December 31, 2015, the purchase price allocation for NWS is not yet complete. The preliminary estimates of fair value assumed at the acquisition date for intangible assets, receivables and deferred revenue and related deferred taxes are subject to change as valuations are finalized. The following unaudited pro forma information of the consolidated results of operations have been prepared as if the NWS acquisition had occurred at January 1, 2014, after giving effect to certain adjustments, including amortization of intangibles, interest, transaction costs and tax effects. The pro forma results of operations include compensation costs of $16.2 million and $16.0 million in 2015 and 2014, respectively, for certain NWS executives whose employment terminated at the date of acquisition. Pro forma information does not include acquisitions that are not considered material to our results of operations. The pro forma information does not purport to represent what our results of operations actually would have been had such transaction or event occurred on the dates specified, or to project our results of operations for any future period. 2015 2014 Revenues $ 691,711 $ 590,071 Net income 55,164 44,436 Basic earnings per common share 1.62 1.26 Diluted earnings per common share 1.51 1.18 On May 29, 2015, we acquired all of the capital stock of Brazos Technology Corporation (“Brazos”), which provides mobile hand held solutions primarily to law enforcement agencies for field accident reporting and electronically issuing citations. The purchase price, net of cash acquired of $312,000 and including debt assumed of $733,000, was $6.1 million in cash and 12,500 shares of Tyler common stock valued at $1.5 million. As a result, we acquired total tangible assets of approximately $2.1 million and assumed liabilities of approximately $2.6 million. We have recorded total goodwill of approximately $1.9 million, all of which is expected to be deductible for tax purposes, and other intangible assets of approximately $6.2 million. The $6.2 million of intangible assets is attributable to customer relationships, acquired software and trade name and will be amortized over a weighted average period of approximately ten years. The operating results of NWS and Brazos are included with the operating results of the Enterprise Software Solutions segment since their dates of acquisition. Revenues from NWS included in 2015 results of operations totaled approximately $10.0 million and net income was not significant. Our balance sheet as of December 31, 2015, reflects the allocation of the purchase price to the assets acquired based on their fair value at the date of acquisition. The fair value of the assets and liabilities acquired are based on valuations using Level III, unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. 2014 On August 29, 2014, we acquired all of the capital stock of SoftCode, Inc. (“SoftCode”), which develops and sells civil process management software, typically to county sheriff departments. The purchase price, net of cash acquired of $71,000, was $3.5 million in cash, of which $325,000 was accrued at December 31, 2014, and 16,540 shares of Tyler common stock valued at $1.5 million, based on the stock price on the acquisition date. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2015 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | (3) PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following at December 31: Useful Lives (years) 2015 2014 Land — $ 8,146 $ 7,736 Building and leasehold improvements 5-39 77,020 51,309 Computer equipment and purchased software 3-5 42,245 34,058 Furniture and fixtures 5 16,661 11,812 Transportation equipment 5 252 238 144,324 105,153 Accumulated depreciation and amortization (43,212 ) (39,243 ) Property and equipment, net $ 101,112 $ 65,910 Depreciation expense was $9.1 million during 2015, $7.9 million during 2014, and $6.4 million during 2013. We own office buildings in Bangor and Yarmouth, Maine; Lubbock and Plano, Texas; Troy, Michigan; and Moraine, Ohio. We lease some space in these buildings to third-party tenants. These leases expire between 2016 and 2025 and are expected to provide rental income of approximately $1.7 million during 2016, $1.6 million during 2017, $1.6 million during 2018, $1.5 million during 2019, $1.3 million during 2020, and $6.6 million thereafter. Rental income from third-party tenants was $913,000 in 2015, $945,000 in 2014, and $704,000 in 2013. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | (4) GOODWILL AND OTHER INTANGIBLE ASSETS Other intangible assets and related accumulated amortization consists of the following at December 31: 2015 2014 Gross carrying amount of acquisition intangibles: Customer related intangibles $ 181,671 $ 61,325 Acquired software 172,666 33,103 Trade name 10,765 3,331 Leases acquired 3,694 — 368,796 97,759 Accumulated amortization (73,418 ) (63,037 ) Total intangibles, net $ 295,378 $ 34,722 Total amortization expense for intangibles was $10.3 million in 2015, $6.4 million in 2014, and $6.8 million during 2013. The allocation of acquisition intangible assets is summarized in the following table: December 31, 2015 December 31, 2014 Gross Carrying Amount Weighted Average Amortization Period Accumulated Amortization Gross Carrying Amount Weighted Average Amortization Period Accumulated Amortization Non-amortizable intangibles: Goodwill $ 653,666 — $ — $ 124,142 — $ — Amortizable intangibles: Customer related intangibles 181,671 15 years 38,754 61,325 15 years 33,194 Acquired software 172,666 7 years 32,880 33,103 5 years 28,441 Trade name 10,765 12 years 1,747 3,331 15 years 1,402 Leases acquired 3,694 9 years 37 — — — The changes in the carrying amount of goodwill for the two years ended December 31, 2015 are as follows: Enterprise Software Solutions Appraisal and Tax Software Solutions and Services Total Balance as of December 31, 2013 $ 114,454 $ 6,557 $ 121,011 Goodwill acquired during 2014 related to the purchase of SoftCode 3,131 — 3,131 Balance as of December 31, 2014 117,585 6,557 124,142 Goodwill acquired during 2015 related to the purchase of NWS 527,618 — 527,618 Goodwill acquired during 2015 related to the purchase of Brazos 1,906 — 1,906 Balance as of December 31, 2015 $ 647,109 $ 6,557 $ 653,666 Estimated annual amortization expense relating to acquired leases will be recorded as a reduction to other income and is expected to be $444,000 in 2016, $444,000 in 2017, $426,000 in 2018, $372,000 in 2019, $313,000 in 2020 and $1.7 million thereafter . 2016 $ 35,182 2017 34,204 2018 33,528 2019 32,100 2020 30,804 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Liabilities Current [Abstract] | |
Accrued Liabilities | (5) ACCRUED LIABILITIES Accrued liabilities consist of the following at December 31: 2015 2014 Accrued wages, bonuses and commissions $ 32,006 $ 30,977 Other accrued liabilities 17,150 8,531 $ 49,156 $ 39,508 |
Revolving Line of Credit
Revolving Line of Credit | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Revolving Line of Credit | (6) REVOLVING LINE OF CREDIT On November 16, 2015, we entered into a $300.0 million Credit Agreement (the “Credit Facility”) with the various lenders party thereto and Wells Fargo Bank, National Association, as Administrative Agent. The Credit Facility provides for a revolving credit line up to $300.0 million, including a $10.0 million sublimit for letters of credit. The Credit Facility matures on November 16, 2020. Borrowings under the Credit Facility may be used for general corporate purposes, including working capital requirements, acquisitions and share repurchases. 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 0.25% to 1.00% or (2) the 30, 60, 90 or 180 day LIBOR rate plus a margin of 1.25% to 2.00%. As of December 31, 2015, our interest rate was 1.6%. The Credit Facility is secured by substantially all of our assets. 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 December 31, 2015, we were in compliance with those covenants . As of December 31, 2015, we had $66.0 million in outstanding borrowings and unused borrowing capacity of $234.0 million under the Credit Facility . We paid interest of $223,000 in 2015 . |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax | (7) INCOME TAX The income tax provision (benefit) on income from operations consists of the following: Years ended December 31, 2015 2014 2013 Current: Federal $ 44,841 $ 34,504 $ 25,625 State 6,670 4,827 2,590 51,511 39,331 28,215 Deferred (7,956 ) (3,804 ) (1,497 ) $ 43,555 $ 35,527 $ 26,718 Reconciliation of the U.S. statutory income tax rate to our effective income tax expense rate for operations follows: Years ended December 31, 2015 2014 2013 Federal income tax expense at statutory rate $ 37,949 $ 33,064 $ 23,037 State income tax, net of federal income tax benefit 3,715 2,867 2,371 Non-deductible business expenses 2,414 1,485 1,110 Qualified manufacturing activities (466 ) (1,720 ) — Other, net (57 ) (169 ) 200 $ 43,555 $ 35,527 $ 26,718 The tax effects of the major items recorded as deferred tax assets and liabilities as of December 31 are: 2015 2014 Deferred income tax assets: Operating expenses not currently deductible $ 9,953 $ 9,093 Stock option and other employee benefit plans 13,504 9,815 Capital loss and credit carryforward 179 177 Property and equipment — 46 Total deferred income tax assets 23,636 19,131 Deferred income tax liabilities: Intangible assets (111,653 ) (13,424 ) Property and equipment (2,781 ) — Other (228 ) (203 ) Total deferred income tax liabilities (114,662 ) (13,627 ) Net deferred income tax (liability) asset $ (91,026 ) $ 5,504 In 2014, we utilized approximately $650,000 of net operating loss carryforwards for federal income tax reporting purposes. The full amount of the net operating loss utilized was attributable to excess tax benefits related to share-based arrangements for which authoritative guidance prohibited the recognition of a deferred tax asset in 2013. In 2014, this tax benefit was accounted for as an increase to shareholders’ equity and a reduction in income tax payable. In total, we recognized approximately $45.3 million and $19.4 million of excess tax benefits related to share-based arrangements in 2015 and 2014, respectively, as a credit to shareholders’ equity and a reduction in income taxes payable. Although realization is not assured, we believe it is more likely than not that all the deferred tax assets at December 31, 2015 and 2014 will be realized. Accordingly, we believe no valuation allowance is required for the deferred tax assets. However, the amount of the deferred tax asset considered realizable could be adjusted in the future if estimates of reversing taxable temporary differences are revised. The Internal Revenue Service (“IRS”) is examining our U.S. income tax return for the year 2012. In addition, there is one open state audit for the year 2011. As of February 22, 2016, no significant adjustments have been proposed by the IRS. We are unable to make a reasonable estimate as to when cash settlements, if any, will occur. We are subject to U.S. federal tax as well as income tax of multiple state and local jurisdictions. We are no longer subject to United States federal income tax examinations for years before 2012. We are no longer subject to state and local income tax examinations by tax authorities for the years before 2011. We paid income taxes, net of refunds received, of $27.3 million in 2015, $10.2 million in 2014, and $9.3 million in 2013. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Shareholders' Equity | (8) SHAREHOLDERS’ EQUITY The following table details activity in our common stock: Years ended December 31, 2015 2014 2013 Shares Amount Shares Amount Shares Amount Stock option exercises 1,118 $ 23,160 855 $ 14,680 1,443 $ 18,289 Purchases of common stock (5 ) (645 ) (294 ) (22,817 ) — — Employee stock plan purchases 43 4,671 53 4,144 64 3,542 Shares issued for acquisitions 2,149 364,333 17 1,473 — — Subsequent to December 31, 2015 and through February 22, 2016, we repurchased 241,000 shares for an aggregate purchase price of $31.3 million. As of February 22, 2016, we had authorization from our board of directors to repurchase up to 1.2 million additional shares of our common stock. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | (9) SHARE-BASED COMPENSATION Share-Based Compensation Plan We have a stock option plan that provides for the grant of stock options to key employees, directors and non-employee consultants. Stock options generally vest after three to six years of continuous service from the date of grant and have a contractual term of 10 years. Once options become exercisable, the employee can purchase shares of our common stock at the market price on the date we granted the option. We account for share-based compensation utilizing the fair value recognition pursuant to ASC 718, Stock Compensation. As of December 31, 2015, there were 3.7 million shares available for future grants under the plan from the 20.0 million shares previously approved by the stockholders. Determining Fair Value of Stock Compensation Valuation and Amortization Method. We estimate the fair value of share-based awards granted using the Black-Scholes option valuation model. We amortize the fair value of all awards on a straight-line basis over the requisite service periods, which are generally the vesting periods. Expected Life. The expected life of awards granted represents the period of time that they are expected to be outstanding. The expected life represents the weighted-average period the stock options are expected to be outstanding based primarily on the options’ vesting terms, remaining contractual life and the employees’ expected exercise based on historical patterns. Expected Volatility. Using the Black-Scholes option valuation model, we estimate the volatility of our common stock at the date of grant based on the historical volatility of our common stock. Risk-Free Interest Rate. We base the risk-free interest rate used in the Black-Scholes option valuation model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award. Expected Dividend Yield. We have not paid any cash dividends on our common stock in more than ten years and we do not anticipate paying any cash dividends in the foreseeable future. Consequently, we use an expected dividend yield of zero in the Black-Scholes option valuation model. Expected Forfeitures. We use historical data to estimate pre-vesting option forfeitures. We record share-based compensation only for those awards that are expected to vest. The following weighted average assumptions were used for options granted: Years ended December 31, 2015 2014 2013 Expected life (in years) 6.0 6.0 6.4 Expected volatility 28.3 % 30.9 % 32.4 % Risk-free interest rate 1.7 % 1.8 % 1.4 % Expected forfeiture rate 1.7 % 3.0 % 3.0 % The following table summarizes share-based compensation expense related to share-based awards which is recorded in the statements of comprehensive income: Years ended December 31, 2015 2014 2013 Cost of software services, maintenance and subscriptions $ 3,380 $ 2,177 $ 1,509 Selling, general and administrative expenses 16,802 12,642 10,144 Total share-based compensation expenses 20,182 14,819 11,653 Tax benefit (5,986 ) (4,237 ) (3,363 ) Net decrease in net income $ 14,196 $ 10,582 $ 8,290 Stock Option Activity Options granted, exercised, forfeited and expired are summarized as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2012 5,711 $ 20.86 Granted 1,453 67.08 Exercised (1,443 ) 12.68 Forfeited (1 ) 68.17 Outstanding at December 31, 2013 5,720 34.66 Granted 675 94.15 Exercised (855 ) 17.17 Forfeited (3 ) 37.44 Outstanding at December 31, 2014 5,537 44.61 Granted 747 145.71 Exercised (1,118 ) 20.71 Forfeited (2 ) 19.61 Outstanding at December 31, 2015 5,164 64.43 7 $ 568,239 Exercisable at December 31, 2015 1,940 40.69 6 $ 259,257 We had unvested options to purchase 3.1 million shares with a weighted average grant date exercise price of $78.86 as of December 31, 2015 and unvested options to purchase 3.3 million shares with a weighted average grant date exercise price of $55.61 as of December 31, 2014. As of December 31, 2015, we had $69.8 million of total unrecognized compensation cost related to unvested options, net of expected forfeitures, which is expected to be amortized over a weighted average amortization period of 3.4 years. Other information pertaining to option activity was as follows during the twelve months ended December 31: 2015 2014 2013 Weighted average grant-date fair value of stock options granted $ 45.17 $ 31.32 $ 23.27 Total intrinsic value of stock options exercised 149,542 69,768 99,393 Employee Stock Purchase Plan Under our Employee Stock Purchase Plan (“ESPP”) participants may contribute up to 15% of their annual compensation to purchase common shares of Tyler. The purchase price of the shares is equal to 85% of the closing price of Tyler shares on the last day of each quarterly offering period. As of December 31, 2015, there were 899,000 shares available for future grants under the ESPP from the 2.0 million shares previously approved by the stockholders. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | (10) EARNINGS PER SHARE Basic earnings and diluted earnings per share data were computed as follows: Years Ended December 31, 2015 2014 2013 Numerator for basic and diluted earnings per share: Net income $ 64,869 $ 58,940 $ 39,101 Denominator: Weighted-average basic common shares outstanding 34,137 33,011 31,891 Assumed conversion of dilutive securities: Stock options 2,415 2,390 2,699 Denominator for diluted earnings per share - Adjusted weighted-average shares 36,552 35,401 34,590 Earnings per common share: Basic $ 1.90 $ 1.79 $ 1.23 Diluted $ 1.77 $ 1.66 $ 1.13 Stock options representing the right to purchase common stock of 417,000 shares in 2015, 481,000 shares in 2014, and 62,000 shares in 2013 were not included in the computation of diluted earnings per share because their inclusion would have had an anti-dilutive effect. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Leases | (11) LEASES We lease office facilities for use in our operations, as well as transportation, computer and other equipment. We also have an office facility lease agreement with an entity owned by an executive’s father and brother. The executive does not have an interest in the entity that leases the property to us and the lease arrangement existed at the time we acquired the business unit that occupies this property. Most of our leases are non-cancelable operating lease agreements and they expire at various dates through 2022. In addition to rent, the leases generally require us to pay taxes, maintenance, insurance and certain other operating expenses. Rent expense was approximately $7.2 million in 2015, $6.7 million in 2014, and $7.5 million in 2013, which included rent expense associated with related party lease agreements of $1.8 million in 2015, $1.7 million in 2014, and $1.7 million in 2013. Future minimum lease payments under all non-cancelable leases at December 31, 2015 are as follows: Years ending December 31, 2016 $ 5,912 2017 6,250 2018 3,845 2019 3,204 2020 3,050 Thereafter 2,223 $ 24,484 Included in future minimum lease payments are non-cancelable payments due to related parties of $1.9 million in 2016, $1.9 million in 2017 and $14,000 in 2018. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plans | (12) EMPLOYEE BENEFIT PLANS We provide a defined contribution plan for the majority of our employees meeting minimum service requirements. The employees can contribute up to 30% of their current compensation to the plan subject to certain statutory limitations. We contribute up to a maximum of 3% of an employee’s compensation to the plan. We made contributions to the plan and charged operating results $5.3 million during 2015, $4.3 million during 2014, and $3.8 million during 2013. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (13) COMMITMENTS AND CONTINGENCIES Other 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. |
Segment and Related Information
Segment and Related Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment and Related Information | (14) SEGMENT AND RELATED INFORMATION We are a major provider of integrated information management solutions and services for the public sector, with a focus on local and state governments. We provide our software systems and services and appraisal services through four business units, which focus on the following products: · financial management, education and planning, regulatory and maintenance software solutions; · financial management, municipal courts, and land and vital records management software solutions; · courts and justice and public safety software solutions; and · appraisal and tax software solutions and property appraisal services. In accordance with ASC 280-10, Segment Reporting, the financial management, education and planning, regulatory and maintenance software solutions unit; financial management, municipal courts and land and vital records management software solutions unit; and the courts and justice and public safety software solutions unit meet the criteria for aggregation and are presented in one reportable segment, Enterprise Software Solutions (“ESS”). The ESS segment provides municipal and county governments and schools with software systems and services to meet their information technology and automation needs for mission-critical “back-office” functions such as financial management and courts and justice and public safety processes. The Appraisal and Tax Software Solutions and Services (“ATSS”) segment provides systems and software that automate the appraisal and assessment of real and personal property 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 noncash amortization of intangible assets associated with their acquisition, 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. The accounting policies of the reportable segments are the same as those described in Note 1, “Summary of Significant Accounting Policies.” Segment assets include net accounts receivable, prepaid expenses and other current assets and net property and equipment. Corporate assets consist of cash and investments, prepaid insurance, intangibles associated with acquisitions, deferred income taxes and net property and equipment mainly related to unallocated information and technology assets. ESS segment capital expenditures 2013 included $19.6 million for the construction of a new building and purchase of an existing building and land. As of the year ended December 31, 2015 Enterprise Software Solutions Appraisal and Tax Software Solutions and Services Corporate Totals Revenues Software licenses and royalties $ 54,376 $ 4,632 $ — $ 59,008 Subscriptions 107,090 4,843 — 111,933 Software services 129,068 10,784 — 139,852 Maintenance 227,586 17,951 — 245,537 Appraisal services — 25,065 — 25,065 Hardware and other 6,935 12 2,680 9,627 Intercompany 4,025 — (4,025 ) — Total revenues $ 529,080 $ 63,287 $ (1,345 ) $ 591,022 Depreciation and amortization expense 15,413 867 3,294 19,574 Segment operating income 141,401 15,477 (38,490 ) 118,388 Capital expenditures 6,112 646 6,746 13,504 Segment assets $ 265,877 $ 22,283 $ 1,068,410 $ 1,356,570 As of the year ended December 31, 2014 Enterprise Software Solutions Appraisal and Tax Software Solutions and Services Corporate Totals Revenues Software licenses and royalties $ 46,047 $ 3,018 $ — $ 49,065 Subscriptions 84,322 3,526 — 87,848 Software services 104,146 9,675 — 113,821 Maintenance 195,881 16,815 — 212,696 Appraisal services — 21,802 — 21,802 Hardware and other 5,398 11 2,460 7,869 Intercompany 2,812 — (2,812 ) — Total revenues $ 438,606 $ 54,847 $ (352 ) $ 493,101 Depreciation and amortization expense 11,140 866 2,599 14,605 Segment operating income 114,993 11,603 (25,370 ) 101,226 Capital expenditures 3,644 359 5,446 9,449 Segment assets $ 170,369 $ 16,463 $ 382,980 $ 569,812 As of the year ended December 31, 2013 Enterprise Software Solutions Appraisal and Tax Software Solutions and Services Corporate Totals Revenues Software licenses and royalties $ 38,774 $ 2,067 $ — $ 40,841 Subscriptions 59,070 2,794 — 61,864 Software services 85,459 7,808 — 93,267 Maintenance 175,180 16,540 — 191,720 Appraisal services — 20,825 — 20,825 Hardware and other 6,342 — 1,784 8,126 Intercompany 2,899 — (2,899 ) — Total revenues $ 367,724 $ 50,034 $ (1,115 ) $ 416,643 Depreciation and amortization expense 10,569 1,028 2,189 13,786 Segment operating income 85,045 9,428 (20,750 ) 73,723 Capital expenditures 22,457 250 3,438 26,145 Segment assets $ 161,923 $ 16,244 $ 266,321 $ 444,488 Reconciliation of reportable segment operating Years Ended December 31, income to the Company's consolidated totals: 2015 2014 2013 Total segment operating income $ 118,388 $ 101,226 $ 73,723 Amortization of acquired software (4,440 ) (1,858 ) (2,078 ) Amortization of customer and trade name intangibles (5,905 ) (4,546 ) (4,517 ) Other income (expense), net 381 (355 ) (1,309 ) Income before income taxes $ 108,424 $ 94,467 $ 65,819 |
Quarterly Financial Information
Quarterly Financial Information (unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (unaudited) | (15) QUARTERLY FINANCIAL INFORMATION (unaudited) The following table contains selected financial information from unaudited statements of income for each quarter of 2015 and 2014. Quarters Ended 2015 2014 Dec. 31 (a) Sept. 30 June 30 Mar. 31 Dec. 31 Sept. 30 June 30 Mar. 31 Revenues $ 158,916 $ 150,845 $ 146,295 $ 134,966 $ 127,440 $ 128,664 $ 124,371 $ 112,626 Gross profit 73,222 71,833 68,253 63,879 60,491 61,792 58,558 52,530 Income before income taxes 19,540 31,744 29,781 27,359 24,760 26,698 23,406 19,603 Net income 8,618 20,142 18,836 17,273 15,317 17,000 14,740 11,883 Earnings per diluted share 0.23 0.55 0.52 0.48 0.43 0.48 0.42 0.33 Shares used in computing diluted earnings per share 37,864 36,349 36,097 35,895 35,661 35,284 35,161 35,500 (a) Operating results for the three months ended December 31, 2015, include $5.5 million for financial advisory, legal, accounting, due diligence, valuation and other services necessary to complete the NWS acquisition as well as $3.5 million amortization expense related to NWS acquisition intangibles. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | PRINCIPLES OF CONSOLIDATION The consolidated financial statements include our parent company and a subsidiary, which is wholly-owned. All significant intercompany balances and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents | CASH AND CASH EQUIVALENTS Cash in excess of that necessary for operating requirements is invested in short-term, highly liquid, income-producing investments. Investments with original maturities of three months or less are classified as cash and cash equivalents, which primarily consist of cash on deposit with several banks and money market funds. Cash and cash equivalents are stated at cost, which approximates market value. |
Revenue Recognition | REVENUE RECOGNITION We earn revenue from software licenses, royalties, subscription-based services, software services, post-contract customer support (“PCS” or “maintenance”), hardware, and appraisal services. Software Arrangements: For the majority of our software arrangements, we provide services that range from installation, training, and basic consulting to software modification and customization to meet specific customer needs. If the arrangement does not require significant production, modification or customization or where the software services are not considered essential to the functionality of the software, revenue is recognized when all of the following conditions are met: i . persuasive evidence of an arrangement exists; ii. delivery has occurred; iii. our fee is fixed or determinable; and iv. collectability is probable. For multiple element arrangements, each element of the arrangement is analyzed and we allocate a portion of the total arrangement fee to the elements based on the relative fair value of the element using vendor-specific objective evidence of fair value (“VSOE”), regardless of any separate prices stated within the contract for each element. Fair value is considered the price a customer would be required to pay if the element was sold separately based on our historical experience of stand-alone sales of these elements to third-parties. For PCS, we use renewal rates for continued support arrangements to determine fair value. For software services, we use the fair value we charge our customers when those services are sold separately. We monitor our transactions to determine that we maintain and periodically revise VSOE to reflect fair value. In software arrangements in which we have the fair value of all undelivered elements but not of a delivered element, we apply the “residual method,” in compliance with Accounting Standards Codification (“ASC”) 985-605, Software Revenue Recognition. Under the residual method, if the fair value of all undelivered elements is determinable, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered element(s) and is recognized as revenue assuming the other revenue recognition criteria are met. In software arrangements in which we do not have VSOE for all undelivered elements, revenue is deferred until fair value is determined or all elements for which we do not have VSOE have been delivered. Alternatively, if sufficient VSOE does not exist and the only undelivered element is services that do not involve significant modification or customization of the software, the entire fee is recognized over the period during which the services are expected to be performed. Software Licenses and Royalties We recognize the revenue allocable to software licenses and specified upgrades upon delivery of the software product or upgrade to the customer, unless the fee is not fixed or determinable or collectability is not probable. If the fee is not fixed or determinable, software license revenue is generally recognized as payments become due from the customer. If collectability is not considered probable, revenue is recognized when the fee is collected. Arrangements that include software services, such as training or installation, are evaluated to determine whether those services are essential to the product’s functionality. A majority of our software arrangements involve “off-the-shelf” software. We consider software to be off-the-shelf software if it can be added to an arrangement with minor changes in the underlying code and it can be used by the customer for the customer’s purpose upon installation. For off-the-shelf software arrangements, we recognize the software license fee as revenue after delivery has occurred, customer acceptance is reasonably assured, that portion of the fee represents a non-refundable enforceable claim and is probable of collection, and the remaining services such as training are not considered essential to the product’s functionality. For arrangements that involve significant production, modification or customization of the software, or where software services are otherwise considered essential, we recognize revenue using contract accounting and apply the provisions of the Construction – Type and Production – Type Contracts as discussed in ASC 605-35, Multiple Elements Arrangements. We generally use the percentage-of-completion method to recognize revenue from these arrangements. We measure progress-to-completion primarily using labor hours incurred, or value added. The percentage-of-completion method generally results in the recognition of reasonably consistent profit margins over the life of a contract because we have the ability to produce 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 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. For arrangements that include new product releases for which it is difficult to estimate final profitability except to assume that no loss will ultimately be incurred, we recognize revenue under the completed contract method. Under the completed contract method, revenue is recognized only when a contract is completed or substantially complete. Historically these amounts have been immaterial. We recognize royalty revenue when earned under the terms of our third-party royalty arrangements, provided the fees are considered fixed or determinable and realization of payment is probable. Currently, our third-party royalties are variable in nature and such amounts are not considered fixed or determinable until we receive notice of amounts earned. Typically, we receive notice of royalty revenues earned on a quarterly basis in the quarter immediately following the royalty reporting period. Software Services Some of our software arrangements include services considered essential for the customer to use the software for the customer’s purposes. For these software arrangements, both the software license revenue and the services revenue are recognized as the services are performed using the percentage-of-completion contract accounting method. When software services are not considered essential, the fee allocable to the service element is recognized as revenue as we perform the services. Computer Hardware Equipment Revenue allocable to computer hardware equipment is recognized when we deliver the equipment and collection is probable. Post Contract Customer Support Our customers generally enter into PCS agreements when they purchase our software licenses. PCS includes telephone support, bug fixes, and rights to upgrades on a when-and-if available basis. Our PCS agreements are typically renewable annually. Revenue allocated to PCS is recognized on a straight-line basis over the period the PCS is provided. All significant costs and expenses associated with PCS are expensed as incurred. Subscription-Based Services: Subscription-based services consist of revenues derived from SaaS arrangements, which utilize the Tyler private cloud, and electronic filing transactions. For SaaS arrangements, we evaluate whether the customer has the contractual right to take possession of our software at any time during the hosting period without significant penalty and whether the customer can feasibly maintain the software on the customer’s hardware or enter into another arrangement with a third-party to host the software. In cases where the customer has the contractual right to take possession of our software at any time during the hosting period without significant penalty and the customer can feasibly maintain the software on the customer’s hardware or enter into another arrangement with a third-party to host the software, we recognize the license, professional services and hosting services revenues pursuant to ASC 985-605, Software Revenue Recognition. For SaaS arrangements that do not meet the criteria for recognition under ASC 985-605, we account for the elements under ASC 605-25, Multiple Element Arrangements, using all applicable facts and circumstances, including whether (i) the element has stand-alone value, (ii) there is a general right of return and (iii) the revenue is contingent on delivery of other elements. We allocate contract value to each element of the arrangement that qualifies for treatment as a separate element based on VSOE, and if VSOE is not available, third-party evidence, and if third-party evidence is unavailable, estimated selling price. We recognize hosting services ratably over the term of the arrangement, which range from one to 10 years but are typically for a period of three to seven years. For professional services associated with SaaS arrangements that we determine do not have stand-alone value to the customer or are contingent on delivery of other elements, we recognize the services revenue ratably over the remaining contractual period once we have provided the customer access to the software and we may begin billing for hosting services. We record amounts that have been invoiced in accounts receivable and in deferred revenue or revenues, depending on whether the revenue recognition criteria have been met. Electronic filing transaction fees primarily pertain to documents filed with the courts by attorneys and other third-parties via our e-filing services and retrieval of filed documents via our access services. The elements for these arrangements are accounted for under ASC 605-25. For each document filed with a court, the filer generally pays a transaction fee and a court filing fee to us and we remit a portion of the transaction fee and the filing fee to the court. We record as revenue the transaction fee, while the portion of the transaction fee remitted to the courts is recorded as cost of sales as we are acting as a principal in the arrangement. Court filing fees collected on behalf of the courts and remitted to the courts are recorded on a net basis and thus do not affect the statement of comprehensive income. In some cases, we are paid on a fixed fee basis and recognize the revenue ratably over the contractual period. Costs of performing services under subscription-based arrangements are expensed as incurred, except for certain direct and incremental contract origination and set-up costs associated with SaaS arrangements. Such direct and incremental costs are capitalized and amortized ratably over the related SaaS hosting term. Appraisal Services: For our property appraisal projects, we recognize revenue using the proportional performance method of revenue recognition since many of these projects are implemented over one to three year periods and consist of various unique activities. Under this method of revenue recognition, we identify each activity for the appraisal project, with a typical project generally calling for bonding, office set up, training, routing of map information, data entry, data collection, data verification, informal hearings, appeals and project management. Each activity or act is specifically identified and assigned an estimated cost. Costs which are considered to be associated with indirect activities, such as bonding costs and office set up, are expensed as incurred. These costs are typically billed as incurred and are recognized as revenue equal to cost. Direct contract fulfillment activities and related supervisory costs such as data collection, data entry and verification are expensed as incurred. The direct costs for these activities are determined and the total contract value is then allocated to each activity based on a consistent profit margin. Each activity is assigned a consistent unit of measure to determine progress towards completion and revenue is recognized for each activity based upon the percentage complete as applied to the estimated revenue for that activity. Progress for the fulfillment activities is typically based on labor hours or an output measure such as the number of parcel counts completed for that activity. Estimated losses on uncompleted contracts are recorded in the period in which we first determine that a loss is apparent. Allocation of Revenue in Statements of Comprehensive Income In our statements of comprehensive income, we allocate revenue to software licenses, software services, maintenance and hardware and other based on the VSOE of fair value for elements in each revenue arrangement and the application of the residual method for arrangements in which we have established VSOE of fair value for all undelivered elements. In arrangements where we are not able to establish VSOE of fair value for all undelivered elements, revenue is first allocated to any undelivered elements for which VSOE of fair value has been established. We then allocate revenue to any undelivered elements for which VSOE of fair value has not been established based upon management’s best estimate of fair value of those undelivered elements and apply a residual method to determine the license fee. Management’s best estimate of fair value of undelivered elements for which VSOE of fair value has not been established is based upon the VSOE of similar offerings and other objective criteria. Other The majority of deferred revenue consists of unearned support and maintenance revenue that has been billed based on contractual terms in the underlying arrangement with the remaining balance consisting of payments received in advance of revenue being earned under software licensing, subscription-based services, software and appraisal services and hardware installation. Unbilled revenue is not billable at the balance sheet date but is recoverable over the remaining life of the contract through billings made in accordance with contractual agreements. The termination clauses in our contracts generally provide for the payment for the value of products delivered and services performed in the event of an early termination. Prepaid expenses and other current assets include direct and incremental costs such as commissions associated with arrangements for which revenue recognition has been deferred. Such costs are expensed at the time the related revenue is recognized. |
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 the application of the percentage-of-completion and proportional performance methods of revenue recognition, the carrying amount and estimated useful lives of intangible assets, determination of share-based compensation expense and valuation allowance for receivables. Actual results could differ from estimates. |
Property and Equipment, Net | PROPERTY AND EQUIPMENT, NET Property, equipment and purchased software are recorded at original cost and increased by the cost of any significant improvements after purchase. We expense maintenance and repairs when incurred. Depreciation and amortization is calculated using the straight-line method over the shorter of the asset’s estimated useful life or the term of the lease in the case of leasehold improvements. For income tax purposes, we use accelerated depreciation methods as allowed by tax laws. |
Research and Development Costs | RESEARCH AND DEVELOPMENT COSTS We expensed research and development costs of $29.9 million during 2015, $25.7 million during 2014, and $23.3 million during 2013. |
Income Taxes | INCOME TAXES Income taxes are accounted for under the asset and liability method. Deferred taxes arise because of different treatment between financial statement accounting and tax accounting, known as “temporary differences.” We record the tax effect of these temporary differences as “deferred tax assets” (generally items that can be used as a tax deduction or credit in the future periods) and “deferred tax liabilities” (generally items that we received a tax deduction for, which have not yet been recorded in the income statement). The deferred tax assets and liabilities are measured using enacted tax rules and laws that are expected to be in effect when the temporary differences are expected to be recovered or settled. A valuation allowance would be established to reduce deferred tax assets if it is more likely than not that a deferred tax asset will not be realized. On November 20, 2015, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The standard amends the current requirement for entities to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, entities will now be required to classify all deferred tax assets and liabilities as noncurrent. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, with early adoption permitted. We early adopted this standard during fourth quarter 2015, utilizing the retrospective application as permitted. As such, certain prior period amounts have been reclassified to conform to the current presentation. |
Share-Based Compensation | SHARE-BASED COMPENSATION We have a stock option plan that provides for the grant of stock options to key employees, directors and non-employee consultants. Stock options generally vest after three to six years of continuous service from the date of grant and have a contractual term of 10 years. We account for share-based compensation utilizing the fair value recognition pursuant to ASC 718, Stock Compensation. See Note 9 – “Share-Based Compensation” for further information. |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets acquired, including identifiable intangible assets, in connection with our business combinations. Upon acquisition, goodwill is assigned to the reporting unit that is expected to benefit from the synergies of the business combination, which is the reporting unit to which the related acquired technology is assigned. A reporting unit is the operating segment, or a business unit one level below that operating segment, for which discrete financial information is prepared and regularly reviewed by executive management. We assess goodwill for impairment annually as of April, or more frequently whenever events or changes in circumstances indicate its carrying value may not be recoverable. When testing goodwill for impairment quantitatively, we first compare the fair value of each reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, a second step is performed to measure the amount of potential impairment. In the second step, we compare the implied fair value of reporting unit goodwill with the carrying amount of the reporting unit’s goodwill. If the carrying amount of reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized. The fair values calculated in our impairment tests are determined using discounted cash flow models involving several assumptions. The assumptions that are used are based upon what we believe a hypothetical marketplace participant would use in estimating fair value. We evaluate the reasonableness of the fair value calculations of our reporting units by comparing the total of the fair value of all of our reporting units to our total market capitalization. Our annual goodwill impairment analysis, which we performed quantitatively during the second quarter of 2015, did not result in an impairment charge. Other Intangible Assets We make judgments about the recoverability of purchased intangible assets other than goodwill whenever events or changes in circumstances indicate that an impairment may exist. Customer base and acquired software each comprise approximately half of our purchased intangible assets other than goodwill. We review our customer turnover each year for indications of impairment. Our customer turnover has historically been very low. There have been no significant impairments of intangible assets in any of the periods presented. If indications of impairment are determined to exist, we measure the recoverability of assets by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the assets exceeds their estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the assets exceeds the fair value of the assets. |
Impairment of Long-Lived Assets | IMPAIRMENT OF LONG-LIVED ASSETS We periodically evaluate whether current facts or circumstances indicate that the carrying value of our property and equipment or other long-lived assets to be held and used may not be recoverable. If such circumstances are determined to exist, we measure the recoverability of assets to be held and used by a comparison of the carrying amount of the asset or appropriate grouping of assets and the estimated undiscounted future cash flows expected to be generated by the assets. If the carrying amount of the assets exceeds their estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. There have been no significant impairments of long-lived assets in any of the periods presented. |
Costs of Computer Software | COSTS OF COMPUTER SOFTWARE We capitalize software development costs upon the establishment of technological feasibility and prior to the availability of the product for general release to customers. Software development costs primarily consist of personnel costs and rent for related office space. We begin to amortize capitalized costs when a product is available for general release to customers. Amortization expense is determined on a product-by-product basis at a rate not less than straight-line basis over the product’s remaining estimated economic life. We have not capitalized any internal software development costs in any of the periods presented. |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS Cash and cash equivalents, accounts receivables, accounts payables, short-term obligations and certain other assets at cost approximate fair value because of the short maturity of these instruments. The fair value of our revolving line of credit approximates book value as of December 31, 2015, because our interest rates reset approximately every 30 days or less. See Note 6 – “Revolving Line of Credit” for further discussion. As of December 2015, we have $30.9 million in investment grade corporate and municipal bonds with maturity dates ranging from 2016 through mid-2017. 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 from other observable market data. These investments are included in short-term investments and non-current investments and other assets. On January 30, 2015, we made a $15.0 million investment in convertible preferred stock representing a 20% interest in Record Holdings Pty Limited, a privately held Australian company specializing in digitizing the spoken word in court and legal proceedings. The fair value of this investment is based on valuations using Level III, unobservable inputs that are supported by little or no market value activity and that are significant to the fair value of the investment. |
Concentrations of Credit Risk and Unbilled Receivables | CONCENTRATIONS OF CREDIT RISK AND UNBILLED RECEIVABLES Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, accounts receivable from trade customers, and investments in marketable securities. Our cash and cash equivalents primarily consists of operating account balances and money market funds, which are maintained at several major domestic financial institutions and the balances often exceed insured amounts. As of December 31, 2015 we had cash and cash equivalents of $33.1 million. We perform periodic evaluations of the credit standing of these financial institutions. Concentrations of credit risk with respect to receivables are limited due to the size and geographical diversity of our customer base. Historically, our credit losses have not been significant. As a result, we do not believe we have any significant concentrations of credit risk as of December 31, 2015. We maintain allowances for doubtful accounts and sales adjustments, which are provided at the time the revenue is recognized. Since most of our customers are domestic governmental entities, we rarely incur a loss resulting from the inability of a customer to make required payments. Events or changes in circumstances that indicate that the carrying amount for the allowances for doubtful accounts and sales adjustments may require revision, include, but are not limited to, deterioration of a customer’s financial condition, failure to manage our customer’s expectations regarding the scope of the services to be delivered, and defects or errors in new versions or enhancements of our software products. The following table summarizes the changes in the allowances for doubtful accounts and sales adjustments: Years ended December 31, 2015 2014 2013 Balance at beginning of year $ 1,725 $ 1,113 $ 1,621 Provisions for losses - accounts receivable 1,756 1,897 729 Collection of accounts previously written off 153 — — Deductions for accounts charged off or credits issued (1,994 ) (1,285 ) (1,237 ) Balance at end of year $ 1,640 $ 1,725 $ 1,113 The termination clauses in most of our contracts provide for the payment for the value of products delivered or services performed in the event of early termination. Our property appraisal outsourcing service contracts can range up to three years and, in a few cases, as long as five years, in duration. In connection with these contracts, as well as certain software service contracts, we may perform work prior to when the software and services are billable and/or payable pursuant to the contract. We have historically recorded such unbilled receivables (costs and estimated profit in excess of billings) in connection with (1) property appraisal services contracts accounted for using proportional performance accounting in which the revenue is earned based upon activities performed in one accounting period but the billing normally occurs subsequently and may span another accounting period; (2) software services contracts accounted for using the percentage-of-completion method of revenue recognition using labor hours as a measure of progress towards completion in which the services are performed in one accounting period but the billing for the software element of the arrangement may be based upon the specific phase of the implementation; (3) software revenue for which we have objective evidence that the customer-specified objective criteria has been met but the billing has not yet been submitted to the customer; (4) some of our contracts provide for an amount to be withheld from a progress billing (generally between 5% and 20% retention) until final and satisfactory project completion is achieved; and (5) in a limited number of cases, we may grant extended payment terms, generally to existing customers with whom we have a long-term relationship and favorable collection history. We have recorded unbilled receivables of $29.7 million and $14.8 million at December 31, 2015 and 2014, respectively. We also have recorded retention receivables of $4.7 million at December 31, 2015 and 2014, respectively, and these retentions become payable upon the completion of the contract or completion of our fieldwork and formal hearings. Unbilled receivables and retention receivables expected to be collected in excess of one year have been included with accounts receivable, long-term portion in the accompanying consolidated balance sheets. |
Indemnification | INDEMNIFICATION Most of our software license agreements indemnify our customers in the event that the software sold infringes upon the intellectual property rights of a third-party. These agreements typically provide that in such event we will either modify or replace the software so that it becomes non-infringing or procure for the customer the right to use the software. We have recorded no liability associated with these indemnifications, as we are not aware of any pending or threatened infringement actions that are possible losses. We believe the estimated fair value of these intellectual property indemnification clauses is minimal. We have also agreed to indemnify our officers and board members if they are named or threatened to be named as a party to any proceeding by reason of the fact that they acted in such capacity. We maintain directors’ and officers’ liability insurance coverage to protect against any such losses. We have recorded no liability associated with these indemnifications. Because of our insurance coverage, we believe the estimated fair value of these indemnification agreements is minimal. |
Reclassifications | RECLASSIFICATIONS Certain amounts for previous years have been reclassified to conform to the current year presentation. |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTS On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers.” This ASU is the result of a convergence project between the FASB and the International Accounting Standards Board. The core principle behind ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for delivering those goods and services. This model involves a five-step process that includes identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction prices to the performance obligations in the contract and recognizing revenue when (or as) the entity satisfies the performance obligations. The guidance in the ASU supersedes existing revenue recognition guidance and is effective for annual reporting periods beginning after December 15, 2016 with early application not permitted. The ASU allows two methods of adoption; a full retrospective approach where three years of financial information are presented in accordance with the new standard, and a modified retrospective approach where the ASU is applied to the most current period presented in the financial statements. On August 12, 2015, the FASB voted for a one-year deferral of the effective date of the new standard and now requires application of the new standard no later than annual reporting periods beginning after December 15, 2017, including interim reporting periods therein. However, under the proposal, public entities would be permitted to elect to early adopt the new standard as of the original effective date. We currently expect to adopt the new standard in fiscal year 2018 in accordance with the revised effective date. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Adjustments in Allowances for Doubtful Accounts and Sales Adjustments | The following table summarizes the changes in the allowances for doubtful accounts and sales adjustments: Years ended December 31, 2015 2014 2013 Balance at beginning of year $ 1,725 $ 1,113 $ 1,621 Provisions for losses - accounts receivable 1,756 1,897 729 Collection of accounts previously written off 153 — — Deductions for accounts charged off or credits issued (1,994 ) (1,285 ) (1,237 ) Balance at end of year $ 1,640 $ 1,725 $ 1,113 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Summary of Allocation of Preliminary Purchase Price | The following table summarizes the allocation of the preliminary purchase price as of the acquisition date. Cash $ 22,486 Accounts receivable 37,098 Other current assets 2,371 Property and equipment 30,672 Identifiable intangible assets 264,814 Goodwill 527,618 Accounts payable (1,382 ) Accrued expenses (7,282 ) Deferred revenue (53,098 ) Deferred tax liabilities, net (104,484 ) Total consideration $ 718,813 |
Unaudited Pro forma Information of Consolidated Results of Operations | Pro forma information does not include acquisitions that are not considered material to our results of operations. The pro forma information does not purport to represent what our results of operations actually would have been had such transaction or event occurred on the dates specified, or to project our results of operations for any future period. 2015 2014 Revenues $ 691,711 $ 590,071 Net income 55,164 44,436 Basic earnings per common share 1.62 1.26 Diluted earnings per common share 1.51 1.18 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment, net consists of the following at December 31: Useful Lives (years) 2015 2014 Land — $ 8,146 $ 7,736 Building and leasehold improvements 5-39 77,020 51,309 Computer equipment and purchased software 3-5 42,245 34,058 Furniture and fixtures 5 16,661 11,812 Transportation equipment 5 252 238 144,324 105,153 Accumulated depreciation and amortization (43,212 ) (39,243 ) Property and equipment, net $ 101,112 $ 65,910 |
Goodwill and Other Intangible26
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Other Intangible Assets and Related Accumulated Amortization | Other intangible assets and related accumulated amortization consists of the following at December 31: 2015 2014 Gross carrying amount of acquisition intangibles: Customer related intangibles $ 181,671 $ 61,325 Acquired software 172,666 33,103 Trade name 10,765 3,331 Leases acquired 3,694 — 368,796 97,759 Accumulated amortization (73,418 ) (63,037 ) Total intangibles, net $ 295,378 $ 34,722 |
Summary of Allocation of Acquisition Intangible Assets | The allocation of acquisition intangible assets is summarized in the following table: December 31, 2015 December 31, 2014 Gross Carrying Amount Weighted Average Amortization Period Accumulated Amortization Gross Carrying Amount Weighted Average Amortization Period Accumulated Amortization Non-amortizable intangibles: Goodwill $ 653,666 — $ — $ 124,142 — $ — Amortizable intangibles: Customer related intangibles 181,671 15 years 38,754 61,325 15 years 33,194 Acquired software 172,666 7 years 32,880 33,103 5 years 28,441 Trade name 10,765 12 years 1,747 3,331 15 years 1,402 Leases acquired 3,694 9 years 37 — — — |
Summary of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the two years ended December 31, 2015 are as follows: Enterprise Software Solutions Appraisal and Tax Software Solutions and Services Total Balance as of December 31, 2013 $ 114,454 $ 6,557 $ 121,011 Goodwill acquired during 2014 related to the purchase of SoftCode 3,131 — 3,131 Balance as of December 31, 2014 117,585 6,557 124,142 Goodwill acquired during 2015 related to the purchase of NWS 527,618 — 527,618 Goodwill acquired during 2015 related to the purchase of Brazos 1,906 — 1,906 Balance as of December 31, 2015 $ 647,109 $ 6,557 $ 653,666 |
Summary of Estimated Annual Amortization Expense | Estimated annual amortization expense relating to acquisition intangibles, including acquired software, for which the amortization expense is recorded as cost of revenues, for the next five years is as follows: 2016 $ 35,182 2017 34,204 2018 33,528 2019 32,100 2020 30,804 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Liabilities Current [Abstract] | |
Summary of Accrued Liabilities | Accrued liabilities consist of the following at December 31: 2015 2014 Accrued wages, bonuses and commissions $ 32,006 $ 30,977 Other accrued liabilities 17,150 8,531 $ 49,156 $ 39,508 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax Provision (Benefit) on Income from Operations | The income tax provision (benefit) on income from operations consists of the following: Years ended December 31, 2015 2014 2013 Current: Federal $ 44,841 $ 34,504 $ 25,625 State 6,670 4,827 2,590 51,511 39,331 28,215 Deferred (7,956 ) (3,804 ) (1,497 ) $ 43,555 $ 35,527 $ 26,718 |
Reconciliation of U.S. Statutory Income Tax Rate to Effective Income Tax Expense Rate | Reconciliation of the U.S. statutory income tax rate to our effective income tax expense rate for operations follows: Years ended December 31, 2015 2014 2013 Federal income tax expense at statutory rate $ 37,949 $ 33,064 $ 23,037 State income tax, net of federal income tax benefit 3,715 2,867 2,371 Non-deductible business expenses 2,414 1,485 1,110 Qualified manufacturing activities (466 ) (1,720 ) — Other, net (57 ) (169 ) 200 $ 43,555 $ 35,527 $ 26,718 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of the major items recorded as deferred tax assets and liabilities as of December 31 are: 2015 2014 Deferred income tax assets: Operating expenses not currently deductible $ 9,953 $ 9,093 Stock option and other employee benefit plans 13,504 9,815 Capital loss and credit carryforward 179 177 Property and equipment — 46 Total deferred income tax assets 23,636 19,131 Deferred income tax liabilities: Intangible assets (111,653 ) (13,424 ) Property and equipment (2,781 ) — Other (228 ) (203 ) Total deferred income tax liabilities (114,662 ) (13,627 ) Net deferred income tax (liability) asset $ (91,026 ) $ 5,504 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Summary of Activities in Common Stock | The following table details activity in our common stock: Years ended December 31, 2015 2014 2013 Shares Amount Shares Amount Shares Amount Stock option exercises 1,118 $ 23,160 855 $ 14,680 1,443 $ 18,289 Purchases of common stock (5 ) (645 ) (294 ) (22,817 ) — — Employee stock plan purchases 43 4,671 53 4,144 64 3,542 Shares issued for acquisitions 2,149 364,333 17 1,473 — — |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Weighted Average Assumptions Used for Options Granted | The following weighted average assumptions were used for options granted: Years ended December 31, 2015 2014 2013 Expected life (in years) 6.0 6.0 6.4 Expected volatility 28.3 % 30.9 % 32.4 % Risk-free interest rate 1.7 % 1.8 % 1.4 % Expected forfeiture rate 1.7 % 3.0 % 3.0 % |
Summary of Share-Based Compensation Expense Related to Share-Based Awards | The following table summarizes share-based compensation expense related to share-based awards which is recorded in the statements of comprehensive income: Years ended December 31, 2015 2014 2013 Cost of software services, maintenance and subscriptions $ 3,380 $ 2,177 $ 1,509 Selling, general and administrative expenses 16,802 12,642 10,144 Total share-based compensation expenses 20,182 14,819 11,653 Tax benefit (5,986 ) (4,237 ) (3,363 ) Net decrease in net income $ 14,196 $ 10,582 $ 8,290 |
Stock Option Activity | Options granted, exercised, forfeited and expired are summarized as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2012 5,711 $ 20.86 Granted 1,453 67.08 Exercised (1,443 ) 12.68 Forfeited (1 ) 68.17 Outstanding at December 31, 2013 5,720 34.66 Granted 675 94.15 Exercised (855 ) 17.17 Forfeited (3 ) 37.44 Outstanding at December 31, 2014 5,537 44.61 Granted 747 145.71 Exercised (1,118 ) 20.71 Forfeited (2 ) 19.61 Outstanding at December 31, 2015 5,164 64.43 7 $ 568,239 Exercisable at December 31, 2015 1,940 40.69 6 $ 259,257 Other information pertaining to option activity was as follows during the twelve months ended December 31: 2015 2014 2013 Weighted average grant-date fair value of stock options granted $ 45.17 $ 31.32 $ 23.27 Total intrinsic value of stock options exercised 149,542 69,768 99,393 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Computation of Basic Earnings and Diluted Earnings Per Share Data | Basic earnings and diluted earnings per share data were computed as follows: Years Ended December 31, 2015 2014 2013 Numerator for basic and diluted earnings per share: Net income $ 64,869 $ 58,940 $ 39,101 Denominator: Weighted-average basic common shares outstanding 34,137 33,011 31,891 Assumed conversion of dilutive securities: Stock options 2,415 2,390 2,699 Denominator for diluted earnings per share - Adjusted weighted-average shares 36,552 35,401 34,590 Earnings per common share: Basic $ 1.90 $ 1.79 $ 1.23 Diluted $ 1.77 $ 1.66 $ 1.13 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Summary of Future Minimum Lease Payments | Future minimum lease payments under all non-cancelable leases at December 31, 2015 are as follows: Years ending December 31, 2016 $ 5,912 2017 6,250 2018 3,845 2019 3,204 2020 3,050 Thereafter 2,223 $ 24,484 |
Segment and Related Informati33
Segment and Related Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Revenues and Operations | As of the year ended December 31, 2015 Enterprise Software Solutions Appraisal and Tax Software Solutions and Services Corporate Totals Revenues Software licenses and royalties $ 54,376 $ 4,632 $ — $ 59,008 Subscriptions 107,090 4,843 — 111,933 Software services 129,068 10,784 — 139,852 Maintenance 227,586 17,951 — 245,537 Appraisal services — 25,065 — 25,065 Hardware and other 6,935 12 2,680 9,627 Intercompany 4,025 — (4,025 ) — Total revenues $ 529,080 $ 63,287 $ (1,345 ) $ 591,022 Depreciation and amortization expense 15,413 867 3,294 19,574 Segment operating income 141,401 15,477 (38,490 ) 118,388 Capital expenditures 6,112 646 6,746 13,504 Segment assets $ 265,877 $ 22,283 $ 1,068,410 $ 1,356,570 As of the year ended December 31, 2014 Enterprise Software Solutions Appraisal and Tax Software Solutions and Services Corporate Totals Revenues Software licenses and royalties $ 46,047 $ 3,018 $ — $ 49,065 Subscriptions 84,322 3,526 — 87,848 Software services 104,146 9,675 — 113,821 Maintenance 195,881 16,815 — 212,696 Appraisal services — 21,802 — 21,802 Hardware and other 5,398 11 2,460 7,869 Intercompany 2,812 — (2,812 ) — Total revenues $ 438,606 $ 54,847 $ (352 ) $ 493,101 Depreciation and amortization expense 11,140 866 2,599 14,605 Segment operating income 114,993 11,603 (25,370 ) 101,226 Capital expenditures 3,644 359 5,446 9,449 Segment assets $ 170,369 $ 16,463 $ 382,980 $ 569,812 As of the year ended December 31, 2013 Enterprise Software Solutions Appraisal and Tax Software Solutions and Services Corporate Totals Revenues Software licenses and royalties $ 38,774 $ 2,067 $ — $ 40,841 Subscriptions 59,070 2,794 — 61,864 Software services 85,459 7,808 — 93,267 Maintenance 175,180 16,540 — 191,720 Appraisal services — 20,825 — 20,825 Hardware and other 6,342 — 1,784 8,126 Intercompany 2,899 — (2,899 ) — Total revenues $ 367,724 $ 50,034 $ (1,115 ) $ 416,643 Depreciation and amortization expense 10,569 1,028 2,189 13,786 Segment operating income 85,045 9,428 (20,750 ) 73,723 Capital expenditures 22,457 250 3,438 26,145 Segment assets $ 161,923 $ 16,244 $ 266,321 $ 444,488 |
Reconciliation of Operating Income from Segments to Consolidated | Reconciliation of reportable segment operating Years Ended December 31, income to the Company's consolidated totals: 2015 2014 2013 Total segment operating income $ 118,388 $ 101,226 $ 73,723 Amortization of acquired software (4,440 ) (1,858 ) (2,078 ) Amortization of customer and trade name intangibles (5,905 ) (4,546 ) (4,517 ) Other income (expense), net 381 (355 ) (1,309 ) Income before income taxes $ 108,424 $ 94,467 $ 65,819 |
Quarterly Financial Informati34
Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Selected Financial Information | The following table contains selected financial information from unaudited statements of income for each quarter of 2015 and 2014. Quarters Ended 2015 2014 Dec. 31 (a) Sept. 30 June 30 Mar. 31 Dec. 31 Sept. 30 June 30 Mar. 31 Revenues $ 158,916 $ 150,845 $ 146,295 $ 134,966 $ 127,440 $ 128,664 $ 124,371 $ 112,626 Gross profit 73,222 71,833 68,253 63,879 60,491 61,792 58,558 52,530 Income before income taxes 19,540 31,744 29,781 27,359 24,760 26,698 23,406 19,603 Net income 8,618 20,142 18,836 17,273 15,317 17,000 14,740 11,883 Earnings per diluted share 0.23 0.55 0.52 0.48 0.43 0.48 0.42 0.33 Shares used in computing diluted earnings per share 37,864 36,349 36,097 35,895 35,661 35,284 35,161 35,500 (a) Operating results for the three months ended December 31, 2015, include $5.5 million for financial advisory, legal, accounting, due diligence, valuation and other services necessary to complete the NWS acquisition as well as $3.5 million amortization expense related to NWS acquisition intangibles. |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 30, 2015 | Dec. 31, 2012 | |
Accounting Policies [Line Items] | |||||
Description of royalty revenue | We recognize royalty revenue when earned under the terms of our third party royalty arrangements, provided the fees are considered fixed or determinable and realization of payment is probable. Currently, our third party royalties are variable in nature and such amounts are not considered fixed or determinable until we receive notice of amounts earned. Typically, we receive notice of royalty revenues earned on a quarterly basis in the immediate quarter following the royalty reporting period. | ||||
Hosting services minimum range | 1 year | ||||
Hosting services maximum range | 10 years | ||||
Hosting services minimum period | 3 years | ||||
Hosting services maximum period | 6 years | ||||
Research and development expense | $ 29,922,000 | $ 25,743,000 | $ 23,269,000 | ||
Impairments of intangible assets | 0 | 0 | 0 | ||
Impairments of long-lived assets | 0 | 0 | 0 | ||
Purchase of held to maturity securities | $ 30,900,000 | ||||
Grade corporate and municipal bonds, maturity date | 2016 through mid-2017 | ||||
Cost method investment | $ 15,000,000 | ||||
Cash and cash equivalents | 33,087,000 | 206,167,000 | $ 78,876,000 | $ 6,406,000 | |
Unbilled receivables | 29,700,000 | 14,800,000 | |||
Retention payable after completion of the contract | $ 4,700,000 | $ 4,700,000 | |||
Convertible Preferred Stock [Member] | Record Holdings Pty Limited [Member] | |||||
Accounting Policies [Line Items] | |||||
Cost method investment | $ 15,000,000 | ||||
Investment percentage | 20.00% | ||||
Minimum [Member] | |||||
Accounting Policies [Line Items] | |||||
Vesting period (in years) | 3 years | ||||
Percentage of retention of billing | 5.00% | ||||
Maximum [Member] | |||||
Accounting Policies [Line Items] | |||||
Vesting period (in years) | 6 years | ||||
Percentage of retention of billing | 20.00% | ||||
Stock Option Plan [Member] | |||||
Accounting Policies [Line Items] | |||||
Contractual term (in years) | 10 years |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Summary of Adjustments in Allowances for Doubtful Accounts and Sales Adjustments (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Balance at beginning of year | $ 1,725 | $ 1,113 | $ 1,621 |
Provisions for losses - accounts receivable | 1,756 | 1,897 | 729 |
Collection of accounts previously written off | 153 | ||
Deductions for accounts charged off or credits issued | (1,994) | (1,285) | (1,237) |
Balance at end of year | $ 1,640 | $ 1,725 | $ 1,113 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) | Nov. 16, 2015 | May. 29, 2015 | Aug. 29, 2014 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | |||||||
Purchase price in cash | $ 339,961,000 | $ 3,242,000 | $ 181,000 | ||||
Goodwill | $ 653,666,000 | 653,666,000 | 124,142,000 | 121,011,000 | |||
Business acquisitions compensation costs | 133,317,000 | 108,260,000 | $ 98,289,000 | ||||
New World Systems Corporation [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash acquired from acquisition | $ 22,500,000 | ||||||
Purchase price in cash | $ 337,500,000 | ||||||
Accrued purchase price | 4,000,000 | 4,000,000 | |||||
Number of common stock shares valued at acquisition | 2,100,000 | ||||||
Common stock value at acquisition date | $ 362,800,000 | ||||||
Fees incurred in acquisition | 5,900,000 | $ 5,500,000 | |||||
Tangible assets acquired | 70,100,000 | ||||||
Liabilities assumed in acquisition | 61,800,000 | ||||||
Goodwill | 527,618,000 | ||||||
Goodwill, which is expected to be deductible for tax purposes | 0 | ||||||
Intangible assets acquired | 264,814,000 | ||||||
Finite lived Intangible assets acquired | $ 261,100,000 | ||||||
Weighted average amortization period | 11 years | ||||||
Deferred tax liabilities, net | $ 104,484,000 | ||||||
Revenues | 10,000,000 | ||||||
New World Systems Corporation [Member] | Certain Executives [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business acquisitions compensation costs | $ 16,200,000 | 16,000,000 | |||||
New World Systems Corporation [Member] | Lease Agreement [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Finite lived Intangible assets acquired | $ 3,700,000 | ||||||
Weighted average amortization period | 9 years | ||||||
Brazos Technology Corporation [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash acquired from acquisition | $ 312,000 | ||||||
Purchase price in cash | $ 6,100,000 | ||||||
Number of common stock shares valued at acquisition | 12,500 | ||||||
Common stock value at acquisition date | $ 1,500,000 | ||||||
Tangible assets acquired | 2,100,000 | ||||||
Liabilities assumed in acquisition | 2,600,000 | ||||||
Goodwill, which is expected to be deductible for tax purposes | 1,900,000 | ||||||
Intangible assets acquired | 6,200,000 | ||||||
Finite lived Intangible assets acquired | $ 6,200,000 | ||||||
Weighted average amortization period | 10 years | ||||||
Debt assumed from business acquisition | $ 733,000 | ||||||
SoftCode, Inc. [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash acquired from acquisition | $ 71,000 | ||||||
Purchase price in cash | $ 3,500,000 | ||||||
Accrued purchase price | $ 325,000 | ||||||
Number of common stock shares valued at acquisition | 16,540 | ||||||
Common stock value at acquisition date | $ 1,500,000 |
Acquisitions - Summary of Alloc
Acquisitions - Summary of Allocation of Preliminary Purchase Price (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Nov. 16, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 653,666 | $ 124,142 | $ 121,011 | |
New World Systems Corporation [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 22,486 | |||
Accounts receivable | 37,098 | |||
Other current assets | 2,371 | |||
Property and equipment | 30,672 | |||
Identifiable intangible assets | 264,814 | |||
Goodwill | 527,618 | |||
Accounts payable | (1,382) | |||
Accrued expenses | (7,282) | |||
Deferred revenue | (53,098) | |||
Deferred tax liabilities, net | (104,484) | |||
Total consideration | $ 718,813 |
Acquisitions - Unaudited Pro fo
Acquisitions - Unaudited Pro forma Information of Consolidated Results of Operations (Detail) - New World Systems Corporation [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | ||
Revenues | $ 691,711 | $ 590,071 |
Net income | $ 55,164 | $ 44,436 |
Basic earnings per common share | $ 1.62 | $ 1.26 |
Diluted earnings per common share | $ 1.51 | $ 1.18 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Gross | $ 144,324 | $ 105,153 |
Accumulated depreciation and amortization | (43,212) | (39,243) |
Property and equipment, net | 101,112 | 65,910 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Gross | 8,146 | 7,736 |
Building and leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Gross | $ 77,020 | 51,309 |
Building and leasehold improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Useful lives | 5 years | |
Building and leasehold improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Useful lives | 39 years | |
Computer equipment and purchased software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Gross | $ 42,245 | 34,058 |
Computer equipment and purchased software [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Useful lives | 3 years | |
Computer equipment and purchased software [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Useful lives | 5 years | |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Gross | $ 16,661 | 11,812 |
Furniture and fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Useful lives | 5 years | |
Transportation equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Gross | $ 252 | $ 238 |
Transportation equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Useful lives | 5 years |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property Plant And Equipment [Abstract] | |||
Depreciation expense | $ 9,100 | $ 7,900 | $ 6,400 |
Expected rental income, during 2016 | 1,700 | ||
Expected rental income, during 2017 | 1,600 | ||
Expected rental income, during 2018 | 1,600 | ||
Expected rental income, during 2019 | 1,500 | ||
Expected rental income, during 2020 | 1,300 | ||
Expected rental income, thereafter | 6,600 | ||
Rental income from third party tenants | $ 913 | $ 945 | $ 704 |
Lease expiration year, earliest | 2,016 | ||
Lease expiration year, latest | 2,025 |
Goodwill and Other Intangible42
Goodwill and Other Intangible Assets - Summary of Other Intangible Assets and Related Accumulated Amortization (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Acquisition intangibles, gross | $ 368,796 | $ 97,759 |
Accumulated amortization | (73,418) | (63,037) |
Total intangibles, net | 295,378 | 34,722 |
Customer related intangibles [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquisition intangibles, gross | 181,671 | 61,325 |
Accumulated amortization | (38,754) | (33,194) |
Acquired software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquisition intangibles, gross | 172,666 | 33,103 |
Accumulated amortization | (32,880) | (28,441) |
Trade name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquisition intangibles, gross | 10,765 | 3,331 |
Accumulated amortization | (1,747) | $ (1,402) |
Leases acquired [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquisition intangibles, gross | 3,694 | |
Accumulated amortization | $ (37) |
Goodwill and Other Intangible43
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization expense | $ 10,300,000 | $ 6,400,000 | $ 6,800,000 |
Amortization expense, 2016 | 35,182,000 | ||
Amortization expense, 2017 | 34,204,000 | ||
Amortization expense, 2018 | 33,528,000 | ||
Amortization expense, 2019 | 32,100,000 | ||
Amortization expense, 2020 | 30,804,000 | ||
Leases acquired [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense, 2016 | 444,000 | ||
Amortization expense, 2017 | 444,000 | ||
Amortization expense, 2018 | 426,000 | ||
Amortization expense, 2019 | 372,000 | ||
Amortization expense, 2020 | 313,000 | ||
Amortization expense, thereafter | $ 1,700,000 |
Goodwill and Other Intangible44
Goodwill and Other Intangible Assets - Summary of Allocation of Acquisition Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Acquired Finite Lived Intangible Assets [Line Items] | |||
Amortizable intangibles, Gross carrying amount | $ 368,796 | $ 97,759 | |
Amortizable intangibles, Accumulated Amortization | 73,418 | 63,037 | |
Goodwill | 653,666 | 124,142 | $ 121,011 |
Customer related intangibles [Member] | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Amortizable intangibles, Gross carrying amount | $ 181,671 | $ 61,325 | |
Amortizable intangibles, Weighted Average Amortization Period | 15 years | 15 years | |
Amortizable intangibles, Accumulated Amortization | $ 38,754 | $ 33,194 | |
Acquired software [Member] | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Amortizable intangibles, Gross carrying amount | $ 172,666 | $ 33,103 | |
Amortizable intangibles, Weighted Average Amortization Period | 7 years | 5 years | |
Amortizable intangibles, Accumulated Amortization | $ 32,880 | $ 28,441 | |
Trade name [Member] | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Amortizable intangibles, Gross carrying amount | $ 10,765 | $ 3,331 | |
Amortizable intangibles, Weighted Average Amortization Period | 12 years | 15 years | |
Amortizable intangibles, Accumulated Amortization | $ 1,747 | $ 1,402 | |
Leases acquired [Member] | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Amortizable intangibles, Gross carrying amount | $ 3,694 | ||
Amortizable intangibles, Weighted Average Amortization Period | 9 years | ||
Amortizable intangibles, Accumulated Amortization | $ 37 |
Goodwill and Other Intangible45
Goodwill and Other Intangible Assets - Summary of Changes in Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Line Items] | ||
Goodwill Beginning Balance | $ 124,142 | $ 121,011 |
Goodwill Ending Balance | 653,666 | 124,142 |
SoftCode, Inc. [Member] | ||
Goodwill [Line Items] | ||
Goodwill acquired | 3,131 | |
New World Systems Corporation [Member] | ||
Goodwill [Line Items] | ||
Goodwill acquired | 527,618 | |
Brazos Technology Corporation [Member] | ||
Goodwill [Line Items] | ||
Goodwill acquired | 1,906 | |
Enterprise Software Solutions [Member] | ||
Goodwill [Line Items] | ||
Goodwill Beginning Balance | 117,585 | 114,454 |
Goodwill Ending Balance | 647,109 | 117,585 |
Enterprise Software Solutions [Member] | SoftCode, Inc. [Member] | ||
Goodwill [Line Items] | ||
Goodwill acquired | 3,131 | |
Enterprise Software Solutions [Member] | New World Systems Corporation [Member] | ||
Goodwill [Line Items] | ||
Goodwill acquired | 527,618 | |
Enterprise Software Solutions [Member] | Brazos Technology Corporation [Member] | ||
Goodwill [Line Items] | ||
Goodwill acquired | 1,906 | |
Appraisal and Tax Software Solutions and Services [Member] | ||
Goodwill [Line Items] | ||
Goodwill Beginning Balance | 6,557 | 6,557 |
Goodwill Ending Balance | $ 6,557 | $ 6,557 |
Goodwill and Other Intangible46
Goodwill and Other Intangible Assets - Summary of Estimated Annual Amortization Expense (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2,016 | $ 35,182 |
2,017 | 34,204 |
2,018 | 33,528 |
2,019 | 32,100 |
2,020 | $ 30,804 |
Accrued Liabilities - Summary o
Accrued Liabilities - Summary of Accrued Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accrued Liabilities Current [Abstract] | ||
Accrued wages, bonuses and commissions | $ 32,006 | $ 30,977 |
Other accrued liabilities | 17,150 | 8,531 |
Accrued liabilities | $ 49,156 | $ 39,508 |
Revolving Line of Credit - Addi
Revolving Line of Credit - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Nov. 16, 2015 | |
Line Of Credit Facility [Line Items] | ||
Outstanding borrowings | $ 66,000,000 | |
Credit Agreement [Member] | ||
Line Of Credit Facility [Line Items] | ||
Interest paid | $ 223,000 | |
Revolving Credit Facility [Member] | Credit Agreement [Member] | ||
Line Of Credit Facility [Line Items] | ||
Revolving credit facility, maximum borrowing capacity | $ 300,000,000 | |
Revolving line of credit maturity date | Nov. 16, 2020 | |
Debt instrument, interest rate | 1.60% | |
Debt instrument, description of variable rate basis | 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 0.25% to 1.00% or (2) the 30, 60, 90 or 180 day LIBOR rate plus a margin of 1.25% to 2.00%. | |
Outstanding borrowings | $ 66,000,000 | |
Line of credit facility, unused borrowing capacity | $ 234,000,000 | |
Revolving Credit Facility [Member] | Credit Agreement [Member] | Minimum [Member] | Prime Commercial Lending Rate [Member] | ||
Line Of Credit Facility [Line Items] | ||
Line of credit facility interest rate | 0.25% | |
Revolving Credit Facility [Member] | Credit Agreement [Member] | Minimum [Member] | Libor Rate [Member] | ||
Line Of Credit Facility [Line Items] | ||
Line of credit facility interest rate | 1.25% | |
Revolving Credit Facility [Member] | Credit Agreement [Member] | Maximum [Member] | Prime Commercial Lending Rate [Member] | ||
Line Of Credit Facility [Line Items] | ||
Line of credit facility interest rate | 1.00% | |
Revolving Credit Facility [Member] | Credit Agreement [Member] | Maximum [Member] | Libor Rate [Member] | ||
Line Of Credit Facility [Line Items] | ||
Line of credit facility interest rate | 2.00% | |
Letter of Credit [Member] | Credit Agreement [Member] | ||
Line Of Credit Facility [Line Items] | ||
Letters of credit, outstanding | $ 1,500,000 | |
Line of credit maturity period | 2,016 | |
Letter of Credit [Member] | Revolving Credit Facility [Member] | Credit Agreement [Member] | ||
Line Of Credit Facility [Line Items] | ||
Revolving credit facility, maximum borrowing capacity | $ 10,000,000 |
Income Tax - Income Tax Provisi
Income Tax - Income Tax Provision (Benefit) on Income From Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Federal | $ 44,841 | $ 34,504 | $ 25,625 |
State | 6,670 | 4,827 | 2,590 |
Current income tax expense benefit | 51,511 | 39,331 | 28,215 |
Deferred | (7,956) | (3,804) | (1,497) |
Income tax expense benefit | $ 43,555 | $ 35,527 | $ 26,718 |
Income Tax - Reconciliation of
Income Tax - Reconciliation of U.S. Statutory Income Tax Rate to Effective Income Tax Rate (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Federal income tax expense at statutory rate | $ 37,949 | $ 33,064 | $ 23,037 |
State income tax, net of federal income tax benefit | 3,715 | 2,867 | 2,371 |
Non-deductible business expenses | 2,414 | 1,485 | 1,110 |
Qualified manufacturing activities | (466) | (1,720) | |
Other, net | (57) | (169) | 200 |
Income tax expense benefit | $ 43,555 | $ 35,527 | $ 26,718 |
Income Tax - Schedule of Deferr
Income Tax - Schedule of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Operating expenses not currently deductible | $ 9,953 | $ 9,093 |
Stock option and other employee benefit plans | 13,504 | 9,815 |
Capital loss and credit carryforward | 179 | 177 |
Property and equipment | 46 | |
Total deferred income tax assets | 23,636 | 19,131 |
Intangible assets | (111,653) | (13,424) |
Property and equipment | (2,781) | |
Other | (228) | (203) |
Total deferred income tax liabilities | (114,662) | (13,627) |
Net deferred income tax (liability) | $ (91,026) | |
Net deferred income tax asset | $ 5,504 |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Contingency [Line Items] | |||
Excess tax benefit from exercises of share-based arrangements | $ 45,314,000 | $ 19,402,000 | $ 28,207,000 |
Deferred tax assets, valuation allowance | $ 0 | ||
Income tax examination, year under examination | 2,012 | ||
Income taxes, net of refunds | $ 27,300,000 | 10,200,000 | $ 9,300,000 |
State [Member] | |||
Income Tax Contingency [Line Items] | |||
Income tax examination, year under examination | 2,011 | ||
Stock Option Plan [Member] | |||
Income Tax Contingency [Line Items] | |||
Excess tax benefit from exercises of share-based arrangements | $ 45,300,000 | 19,400,000 | |
Federal Income Tax [Member] | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards for federal income tax | $ (650,000) |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Activities in Common Stock (Detail) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Equity [Abstract] | |||
Stock option exercises, Shares | 1,118 | 855 | 1,443 |
Purchases of common stock, Shares | (5) | (294) | |
Employee stock plan purchases, Shares | 43 | 53 | 64 |
Shares issued for acquisitions, Shares | 2,149 | 17 | |
Stock option exercises, Amount | $ 23,160 | $ 14,680 | $ 18,289 |
Purchases of common stock | (645) | (22,817) | |
Employee stock plan purchases, Amount | 4,671 | 4,144 | $ 3,542 |
Shares issued for acquisitions, Amount | $ 364,333 | $ 1,473 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Feb. 22, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Class Of Stock [Line Items] | |||
Number of shares repurchased | 5,000 | 294,000 | |
Shares repurchased aggregate purchase price | $ 645 | $ 22,817 | |
Subsequent Event [Member] | |||
Class Of Stock [Line Items] | |||
Number of shares repurchased | 241,000 | ||
Shares repurchased aggregate purchase price | $ 31,300 | ||
Number of shares authorized to be repurchased | 1,200,000 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant | 3,700,000 | |
Shares reserved for future issuance | 20,000,000 | |
Weighted average grant date value | $ 78.86 | $ 55.61 |
Employee Stock Purchase Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant | 899,000 | |
Shares reserved for future issuance | 2,000,000 | |
Percentage of annual compensation participants may contribute | 15.00% | |
Purchase price as a percentage of closing price on the last day of the quarter for ESPP transactions | 85.00% | |
Stock Option Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Contractual term (in years) | 10 years | |
Unvested options to purchase | 3,100,000 | 3,300,000 |
Total unrecognized compensation cost | $ 69.8 | |
Weighted average amortization period (in years) | 3 years 4 months 24 days | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period (in years) | 3 years | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period (in years) | 6 years |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Weighted Average Assumptions Used for Options Granted (Detail) - Stock Option Plan [Member] | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life (in years) | 6 years | 6 years | 6 years 4 months 24 days |
Expected volatility | 28.30% | 30.90% | 32.40% |
Risk-free interest rate | 1.70% | 1.80% | 1.40% |
Expected forfeiture rate | 1.70% | 3.00% | 3.00% |
Share-Based Compensation - Su57
Share-Based Compensation - Summary of Share-Based Compensation Expense Related to Share-Based Awards (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 20,182 | $ 14,819 | $ 11,653 |
Tax benefit | (5,986) | (4,237) | (3,363) |
Net decrease in net income | 14,196 | 10,582 | 8,290 |
Cost of software services, maintenance and subscriptions [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 3,380 | 2,177 | 1,509 |
Selling, general and administrative expenses [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 16,802 | $ 12,642 | $ 10,144 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Number of Shares, Outstanding Beginning Balance | 5,537 | 5,720 | 5,711 |
Number of Shares, Granted | 747 | 675 | 1,453 |
Number of Shares, Exercised | (1,118) | (855) | (1,443) |
Number of Shares, Forfeited | (2) | (3) | (1) |
Number of Shares, Outstanding Ending Balance | 5,164 | 5,537 | 5,720 |
Number of Shares, Exercisable at December 31, 2015 | 1,940 | ||
Weighted Average Exercise Price, Outstanding | $ 44.61 | $ 34.66 | $ 20.86 |
Weighted Average Exercise Price, Granted | 145.71 | 94.15 | 67.08 |
Weighted Average Exercise Price, Exercised | 20.71 | 17.17 | 12.68 |
Weighted Average Exercise Price, Forfeited | 19.61 | 37.44 | 68.17 |
Weighted Average Exercise Price, Outstanding | 64.43 | $ 44.61 | $ 34.66 |
Weighted Average Exercise Price, Exercisable at December 31, 2015 | $ 40.69 | ||
Weighted Average Remaining Contractual Life (Years), Outstanding at December 31, 2015 | 7 years | ||
Weighted Average Remaining Contractual Life (Years), Exercisable at December 31, 2015 | 6 years | ||
Aggregate Intrinsic Value, Outstanding at December 31, 2015 | $ 568,239 | ||
Aggregate Intrinsic Value, Exercisable at December 31, 2015 | $ 259,257 |
Share-Based Compensation - Othe
Share-Based Compensation - Other Information Pertaining to Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Weighted average grant-date fair value of stock options granted | $ 45.17 | $ 31.32 | $ 23.27 |
Total intrinsic value of stock options exercised | $ 149,542 | $ 69,768 | $ 99,393 |
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 | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 8,618 | $ 20,142 | $ 18,836 | $ 17,273 | $ 15,317 | $ 17,000 | $ 14,740 | $ 11,883 | $ 64,869 | $ 58,940 | $ 39,101 |
Weighted-average basic common shares outstanding | 34,137 | 33,011 | 31,891 | ||||||||
Stock options | 2,415 | 2,390 | 2,699 | ||||||||
Denominator for diluted earnings per share - Adjusted weighted-average shares | 37,864 | 36,349 | 36,097 | 35,895 | 35,661 | 35,284 | 35,161 | 35,500 | 36,552 | 35,401 | 34,590 |
Basic | $ 1.90 | $ 1.79 | $ 1.23 | ||||||||
Diluted | $ 0.23 | $ 0.55 | $ 0.52 | $ 0.48 | $ 0.43 | $ 0.48 | $ 0.42 | $ 0.33 | $ 1.77 | $ 1.66 | $ 1.13 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share [Abstract] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 417 | 481 | 62 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Leased Assets [Line Items] | |||
Operating lease expiration year | 2,022 | ||
Rent expense | $ 7,200,000 | $ 6,700,000 | $ 7,500,000 |
2,016 | 5,912,000 | ||
2,017 | 6,250,000 | ||
2,018 | 3,845,000 | ||
Related Party Transaction | |||
Operating Leased Assets [Line Items] | |||
Rent expense | 1,800,000 | $ 1,700,000 | $ 1,700,000 |
2,016 | 1,900,000 | ||
2,017 | 1,900,000 | ||
2,018 | $ 14,000 |
Leases - Summary of Future Mini
Leases - Summary of Future Minimum Lease Payments (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Leases [Abstract] | |
2,016 | $ 5,912 |
2,017 | 6,250 |
2,018 | 3,845 |
2,019 | 3,204 |
2,020 | 3,050 |
Thereafter | 2,223 |
Total | $ 24,484 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of employee contribution | 30.00% | ||
Defined contribution plan, cost recognized | $ 5.3 | $ 4.3 | $ 3.8 |
Maximum [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of employer contribution | 3.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Dec. 31, 2015LegalMatter |
Commitments And Contingencies Disclosure [Abstract] | |
Number of material legal proceedings pending | 0 |
Segment and Related Informati66
Segment and Related Information - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)Business_UnitSegment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of business units | Business_Unit | 4 | ||
Capital expenditure for purchase of buildings and land | $ 12,501 | $ 9,343 | $ 26,858 |
Enterprise Software Solutions [Member] | |||
Segment Reporting Information [Line Items] | |||
Number of reportable segment | Segment | 1 | ||
Capital expenditure for purchase of buildings and land | $ 19,600 |
Segment and Related Informati67
Segment and Related Information - Schedule of Segment Revenues and Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||||||||||
Software licenses and royalties | $ 59,008 | $ 49,065 | $ 40,841 | ||||||||
Subscriptions | 111,933 | 87,848 | 61,864 | ||||||||
Software services | 139,852 | 113,821 | 93,267 | ||||||||
Maintenance | 245,537 | 212,696 | 191,720 | ||||||||
Appraisal services | 25,065 | 21,802 | 20,825 | ||||||||
Hardware and other | 9,627 | 7,869 | 8,126 | ||||||||
Total revenues | $ 158,916 | $ 150,845 | $ 146,295 | $ 134,966 | $ 127,440 | $ 128,664 | $ 124,371 | $ 112,626 | 591,022 | 493,101 | 416,643 |
Depreciation and amortization expense | 19,574 | 14,605 | 13,786 | ||||||||
Segment operating income | 118,388 | 101,226 | 73,723 | ||||||||
Capital expenditures | 13,504 | 9,449 | 26,145 | ||||||||
Segment assets | 1,356,570 | 569,812 | 1,356,570 | 569,812 | 444,488 | ||||||
Operating segments [Member] | Enterprise Software Solutions [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Software licenses and royalties | 54,376 | 46,047 | 38,774 | ||||||||
Subscriptions | 107,090 | 84,322 | 59,070 | ||||||||
Software services | 129,068 | 104,146 | 85,459 | ||||||||
Maintenance | 227,586 | 195,881 | 175,180 | ||||||||
Hardware and other | 6,935 | 5,398 | 6,342 | ||||||||
Intercompany | 4,025 | 2,812 | 2,899 | ||||||||
Total revenues | 529,080 | 438,606 | 367,724 | ||||||||
Depreciation and amortization expense | 15,413 | 11,140 | 10,569 | ||||||||
Segment operating income | 141,401 | 114,993 | 85,045 | ||||||||
Capital expenditures | 6,112 | 3,644 | 22,457 | ||||||||
Segment assets | 265,877 | 170,369 | 265,877 | 170,369 | 161,923 | ||||||
Operating segments [Member] | Appraisal and Tax Software Solutions and Services [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Software licenses and royalties | 4,632 | 3,018 | 2,067 | ||||||||
Subscriptions | 4,843 | 3,526 | 2,794 | ||||||||
Software services | 10,784 | 9,675 | 7,808 | ||||||||
Maintenance | 17,951 | 16,815 | 16,540 | ||||||||
Appraisal services | 25,065 | 21,802 | 20,825 | ||||||||
Hardware and other | 12 | 11 | |||||||||
Total revenues | 63,287 | 54,847 | 50,034 | ||||||||
Depreciation and amortization expense | 867 | 866 | 1,028 | ||||||||
Segment operating income | 15,477 | 11,603 | 9,428 | ||||||||
Capital expenditures | 646 | 359 | 250 | ||||||||
Segment assets | 22,283 | 16,463 | 22,283 | 16,463 | 16,244 | ||||||
Corporate [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Hardware and other | 2,680 | 2,460 | 1,784 | ||||||||
Intercompany | (4,025) | (2,812) | (2,899) | ||||||||
Total revenues | (1,345) | (352) | (1,115) | ||||||||
Depreciation and amortization expense | 3,294 | 2,599 | 2,189 | ||||||||
Segment operating income | (38,490) | (25,370) | (20,750) | ||||||||
Capital expenditures | 6,746 | 5,446 | 3,438 | ||||||||
Segment assets | $ 1,068,410 | $ 382,980 | $ 1,068,410 | $ 382,980 | $ 266,321 |
Segment and Related Informati68
Segment and Related Information - Reconciliation of Operating Income from Segments to Consolidated (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Total segment operating income | $ 118,388 | $ 101,226 | $ 73,723 |
Amortization of acquired software | (4,440) | (1,858) | (2,078) |
Amortization of customer and trade name intangibles | (10,300) | (6,400) | (6,800) |
Other income (expense), net | 381 | (355) | (1,309) |
Income before income taxes | 108,424 | 94,467 | 65,819 |
Segment Reconciling Items [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Amortization of acquired software | (4,440) | (1,858) | (2,078) |
Amortization of customer and trade name intangibles | (5,905) | (4,546) | (4,517) |
Other income (expense), net | $ 381 | $ (355) | $ (1,309) |
Quarterly Financial Informati69
Quarterly Financial Information - Summary of Selected Financial Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 158,916 | $ 150,845 | $ 146,295 | $ 134,966 | $ 127,440 | $ 128,664 | $ 124,371 | $ 112,626 | $ 591,022 | $ 493,101 | $ 416,643 |
Gross profit | 73,222 | 71,833 | 68,253 | 63,879 | 60,491 | 61,792 | 58,558 | 52,530 | 277,187 | 233,371 | 193,203 |
Income before income taxes | 19,540 | 31,744 | 29,781 | 27,359 | 24,760 | 26,698 | 23,406 | 19,603 | |||
Net income | $ 8,618 | $ 20,142 | $ 18,836 | $ 17,273 | $ 15,317 | $ 17,000 | $ 14,740 | $ 11,883 | $ 64,869 | $ 58,940 | $ 39,101 |
Earnings per diluted share | $ 0.23 | $ 0.55 | $ 0.52 | $ 0.48 | $ 0.43 | $ 0.48 | $ 0.42 | $ 0.33 | $ 1.77 | $ 1.66 | $ 1.13 |
Shares used in computing diluted earnings per share | 37,864 | 36,349 | 36,097 | 35,895 | 35,661 | 35,284 | 35,161 | 35,500 | 36,552 | 35,401 | 34,590 |
Quarterly Financial Informati70
Quarterly Financial Information - Summary of Selected Financial Information (Detail) (Parenthetical) - USD ($) $ in Millions | Nov. 16, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Quarterly Financial Information [Line Items] | |||||
Total amortization expense | $ 10.3 | $ 6.4 | $ 6.8 | ||
New World Systems Corporation [Member] | |||||
Quarterly Financial Information [Line Items] | |||||
Expenses incurred in acquisition | $ 5.9 | $ 5.5 | |||
Total amortization expense | $ 3.5 |