GTYH - Earnings call transcript Q1 2021 | GTY Technology Holdings Inc.

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Operator

Good day. Thank you for standing by, and welcome to the GTY Q1 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now turn the conference call to Mr. CFO. GTY Curran, John

John Curran

call good like I'm our to Conference on XXXX and GTY's CFO, First Curran, and Earnings today's me With I'd welcome Call. TJ afternoon, you, Parass, John CEO. everyone. GTY Quarter is Thank you to

be any that today's call our presenting that the is often available our those our anticipated. Please view we earnings true the you upon statements this and the at website GTY may however, may to of on projected we forward-looking on statements the or heading in or in statements. Any contains results. on about forward-looking as results found call from change, are information be release financial presentation make our slides cautionary earnings additional materially to believe website based www.gtytechnologies.com. will encourage to refer made release and We the Please information during Things release under and note today. also we actual that earnings differ

associated to also applicable subsequent our COVID-XX. most our Form recent a should filings, risk including our and You filings including factors GTY, of risk XX-K for to list factors SEC SEC with refer

the comments, today into is the As hear in future. an undetermined you will our impacting business for our pandemic and time

results investors our During if understand we to may we will business non-GAAP to investors refer are the better useful or we believe believe call, financial trends. measures they if help it or

deck. turn over the appendix financial You release in the in the of can TJ. to slide Exhibit earnings financial measures their nearest see reconciliation measure to With comparable the GAAP non-GAAP a of I'll our and call that, of X

TJ Parass

thank Good joining for John. afternoon you all you, Thank and us.

and help to their provides new manage they are government operations. citizens engage GTY, that GTY that transform the those way organizations platforms cloud-based For

pandemic, even the the native governments transformation. to based starting modernization While monolithic behind of stronger the year. perception in on-prem based last sector, cloud from away cloud And heavy, solutions Even for applications. and massive the to governments are accelerate SaaS and digital the SaaS gotten that wake platforms. opportunity on local GTY was government has modern were represents a that trend vision this before founder's private common formed likes moving governments State,

state Here's We're the in local good how we're going colors, five opportunity that our our in XXX call about and through offices it start government cover clients XXXX, some business of into XXXX, employees in to of just of of units, cloud numbers billion suites technologies governments. our state expected state growth. increasing the K-XX local care sectors leaning across target like To providing a best is that with the X,XXX add universities, water and X% school than weekly, and underlying growth and U.S. Today, public and it. have what as over back to healthy, we breed product both governments, primary $XXX health transit, agencies. start agencies, rate. spend colleges are municipalities XXXX we public and under I'd front Included utility our these size county, higher and federal and transportation districts, power,

transition their GTY is to to are the modernize infrastructure, customers that opportunity cloud starting well-positioned our capture As to the represents. the

Let a for me that unpack you. bit

have products it's for position suites themselves, the I describe important three us understand that broad product success. characteristics to Before that GTY

and This cloud flows. strong predictable revenue gross a SaaS. means are margins multi-year and streams low largely they First, with opted cash churn remarkably recurring contracts, highly

requirements. compliance older high This often players against meet competitors, rates horizontal created each respective win product suites as Second, our that of against government gov their for struggle unique areas. leads feature specific leaders requirements government's specifically and considered as in were with tech are to well functional or

points to our combined large customers us up million and of our all the from agencies. state higher suite governments access to XX,XXX small sizes our way federal price municipalities, subsectors of product across X allow target and full to and the to and segments spectrum eight Finally, from

units. the So, meet products let's and business

Bonfire, First sourcing procurement next-generation a is and platform.

CityBase, our of Second payment that helps is citizen platform agency. the centralize government a interface

and Third, core budgeting out suites, Fourth, mission-critical that GTY guidance, Combined, position GTY, to even ahead. touch suites financial at and which for Sherpa, we challenging provides a solid of that budgeting With newcomers let's a the eCivis the off turn of capture as opportunity the which economic quarter starting through XXXX the the results platform government. environment. of our major one QX. finally, strong all Budget, companies GTY as government context levels activity platform these collectively sources governance get grant products stay permitting, is points top citizens. exceeded to important a management And on of is start, our to delivered first helps streamline of products of we most rounding of funding. Questica a we strong called one navigated that with OpenCounter

strong bookings sectors. respect QX in added and customers we our XX clients, which uncertainty new ARR pre-stimulus which transformation. of growth shows includes large government First of was date, all, rates, state budgets. Dakota highest and with a like North the We all saw a recurring this most XXXX of customers At across and target importantly, their wins to eight our the continued despite to facing our one momentum

outlook, are on to tailwinds touch already I'll we I when evidence and long-term get this market short there QX. that starting my and of saw several As in

arguably for and SaaS bellwethers happiness rates important company. churn a First, are our customer base high, which low QX most the remained

faster QX, clients client projected which our our will expansion than anticipated, confidence our us for share John and in new X,XXX gives pipeline our shortly. to across as are performance guidance pipeline Second, growing and

light payment the at our seeing our revenue of additional recurring the started clients have constituents seeing end may signs tunnel. volumes are positive very grow improve, and we recently their to the Finally, well transaction be that and

actions our our and financial strengthen in to Turning to cash and to provides in was base R&D expected, as that balance our provide XXXX improvements base negative we to which continue strong saw strong we believe In financial QX, operating say while and position. I'm lift. should investments. gross flow our proud marketing, and year-over-year is loss. QX sales profit a good sheet our increase And

to our Turning outlook.

As effect long-term I full mentioned earlier, provide we there believe XXXX. both factors the for will starting coming XXXX short that and half are growth of and into tailwinds in second

hybrid much a scaling into platforms work to us In on to will americans as some for provide that more our the Specifically, arise municipalities vaccinated remote momentum form CIO which as and a in funds fashion Plan help technologies demand. up. investments to as longer as the opens to of response or close constant permanent that in are more cloud go-to-market and trends, and On their seeing state basis, transition and less will additional provide targeted long-term American well government efficiencies. to applications Act we're of as continue build Furthermore, local expecting provisions of provide urgency gaps, economy the anticipated help teams budget includes timeframe, XXXX sense in these a a cash Rescue possible. begin are intend we staff with

growth transformation. Additionally, to our next we to marketplace in new this you Thank John. we conclusion, mode bring existing product transformative over to the as spend few and bolster In back rapid suite innovations we during momentum. to time intend quarters to intend to continue increase digital the bear our R&D of you, build

John Curran

Thank you, TJ.

guidance the As are to we TJ for have highlighted our exceeded strong excited earlier, quarter. the start revenue was to a QX year, and

For a QX, between our GAAP of A release QX $XX.X million two revenue results $XX.X XXXX. in and of compared million basis, On non-GAAP our of the of slide in and revenue non-GAAP was $XX.X deck. increased included million million exhibit of for GAAP compared is $XX.X QX XXXX, increase in appendix reconciliation with of XX%, XX%. XXXX the our QX in with press

a will provide explanation of more the slide. We a change revenue in on subsequent detailed

XX% XXXX first QX $X.X or gross or $X.X in was margin. compared million Our with XXXX of GAAP XX% margin quarter million profit

or compared with margin XXXX. QX $X.X increased million or Our quarter to million $X.X non-GAAP gross in XX% first profit XX% margin of

our Continued is driving margins. growth in gross the revenue our improvements in recurring

vest tax RSU vesting, increase from saw year. about to QX related impact of The QX or $XXX,XXX equity in operating our $XXX,XXX expenses. expenses X% operating QX is our to of increase XXXX of XXXX. of saw corporate increase each and remainder to as impact Turning the and our We We in is an compared currency in of the majority costs. headcount an of $XXX,XXX when additional

in XXXX GAAP million in QX operating a $XX.X million XXXX First of loss loss $X.X QX quarter a compared loss of XXXX. with of $XX.X and of million was

provide increase an with compared QX previous on loss Consistent wanted primarily quarters, revenue. to in little first non-GAAP Our in color expenses. by driven million non-GAAP operating of more a increased our we quarter in to $X.X with XXXX, million operating the change $X.X

repeat on we On from shows XX% did Sherpa Additionally, And revenue revenue in impacted chart of the XXXX. as some that of on detail growth the Professional a by this total are the stream. year-on-year by recurring large seasonal we not our XXXX QX payments basis, left-hand the decreased QX side grew type. business, revenue providing by had projects services XX%. in that concluded the revenue non-GAAP highlights

payments solid pre-pandemic by to growth quarter. revenue is recurring grew we're comparing which considering XX%, Our a

XX%, the by grew environment. given payments excluding revenue, recurring Our excellent performance difficult

as on services our the The professional normalized side, slide quarter-over-quarter the remained XX% delivery into after a right-hand backlog December. by services strong. increased slow Turning

visibility We of have quarters. the couple excellent over next

stronger by from payments. the timing by estate tax QX, seasonally are grew tax revenue to bounce estate X%. and than seasonal driven payments, this excluding real revenue, payments back XX%, declined see Recurring by which QX. Expect recurring real by business Our tax payments of driven

slightly Our QX loaded, quarter. resulted recurring a new which earned in bit back-end the bookings in were revenue subscription in lower

revenue projects. as to of percentage expect of decline of sales kiosks timing to base revenue vary percentage due recurring continues and quarter-to-quarter that as revenue also to a of as Other can revenue service of sales from professional includes large decline to And over license we our grow. the services a revenue expect software Our time. we

XX% expect high by compared in expect We XXXX. to revenue recurring year services our grow mid high other will continue the to roughly and grow with for and to digits range revenue the single

business. growth be revenue balance higher, Taking at like subscription both terms Our continue and service we to sheet, our revenue I'd and base a as our should growth three that other to there forecast look discuss. dollar areas percentage and of continue to in are recurring

receivable, bookings. in The strong first is which the this quarter, driven $XXX,XXX increased our by by change

The severance second accruals due accounts primarily area payments. in to a quarter, of is in $XXX,XXX the decrease payable and

operating is we From quarter. the excess a This increased amount amount area third deferred revenue our burn have the this perspective, we started roughly the million earned $XX.X $X.X in ended cash represents quarter $XXX,XXX the of invoiced $X.X with in $XX.X we cash. in million was of from and perspective, increase QX. with an The increased million. million and From in revenue quarter, outflow

out interest $XXX,XXX working in million an in in and We outflow. quarter change also the in the additional $XXX,XXX paid capital $X severance, with

to sales products, implement cost perspective, our new rates ability equity low sufficient we our Finally, includes Based financing of date current and from $X.X million. efforts sale we our our beyond. redeem XXXX million and management to activities, and a carry raising from us a on to net shares. experienced That we million have cash view $X generated to into turn we $X.X of believe outflow paying have

our to quarter second full and year XXXX. the outlook for Turning

approximately million quarter expect to of XXXX, $XX.X year-over-year of second growth. XX% in total the or we the For $XX million revenue range

we we For build is to overall faster revenue. approximately our to of $XX revenue than of full recurring our the revenue million XXXX, base year-over-year million total to XX% range continue $XX of or ARR in expected be as grow growth. the to growth, year expect

seeing a TJ increasing As in the our support we're coming we of mentioned, and some quarters market increased outlook, modest level in to improvements investment anticipate demand.

time for line to any we our benefits expect to don't ramp resources, XXXX. material the in top our new given However, see

to operating Given XXXX will of year expect original that, Obviously, With growth like timing. expenses move million our our now million the be to on negative forecast this increasing second the these initiatives. cash investments, investment will fund to into affect the for $X range, TJ. depending XXXX, half turn things we in to be which our as $X back to we I'd

TJ Parass

the XX% a with ARR XX% and summary, it in In up GAAP was great growing quarter year-over-year. revenues quarter

the the forward, on look GTY execute you. well-positioned questions. recovery our we Thank we open As and on initiatives. please capitalize trend believe growth to for is Operator, line

Operator

from Reilly our Instructions] [Operator Needham. with And first question Joshua comes

Joshua Reilly

off on I to guys. Hey, Congrats productivity. strong the Salesforce quarter. wanted asking start about

do in exit in trend a did So, in-person versus terms versus model COVID? secondly, about are you versus look we And how as like what thinking then things you expect kind to pre-COVID of the so an today? hybrid of it quarter? How go-to-market,

TJ Parass

for the TJ Josh. here. Hi, Thanks question.

staff -- reduced closer, expanding spend, and the overall same So, inclusive of marketing are are and at year quotas on their teams we're increasing an a ago, we've and is -- sales pipelines as we when now looking our we staff, at keeping generally kept sales starting our our starting increase quarter's we eye size, earnings teams. our get to our which

that So, we're working the year. the on anticipation we're the now feel in well-positioned closely. -- of we're execute We team six road to have watching Anything we XX months in is to working from now. down

Josh, -- I of the terms the part of question, sorry sorry. -- In -- missed second

Joshua Reilly

entering we're in-person going of et of lots how obviously if part now, about cetera. or What at now like is, virtual look look to or you bigger you shows, mix think trade post-COVID pre-COVID, the heavy were model do terms like second are kind that? The of of is in that sale, thinking the you sales guys hybrid world you

TJ Parass

Yeah.

to think, like XXXX XXXX. is be I lot a going

We back conferences the coming traveling. little believes a side will continue. virtual are a one to bit will lot But selling. No our virtual continue of back,

but has the Our and RFP sometimes are what we One back pretty be the really enterprise still business half below again, values, that as deals, road soon tend to comes get we'll for that as has remote. on sell generally those effective we being two the deals travel was And as term halves. been more always virtual. we back, speaking,

Joshua Reilly

Got it.

the the priorities? are What visibility of those spending that terms Act? have then And you customers you from Okay. given kind CARES for that priorities with funds segments better seeing they they're going of benefit the in be expect your to now what business into maybe to of do most getting

TJ Parass

I Josh, Well, are there's a that factors there, think number of important.

now them is One cyber is the news in security. of -- the a quite bit

cloud spending a time around think Where is that. towards to customers I that secure, comes that are than technologies when run premise. GTY are our off, peels lot better they movement of it and on the

their means won't fully tailwind that workforce continued is that hybrid be aids it prevalent technology, the band to a us they're year and put cloud on second a government desktops, that virtual to their to in now that, return legacy technologies, operations pretty term last belief through now applications will officers environment. some start of there to and need the to going virtual the to government that becoming the longer continue right is in be back running The the making forced commitments This remote based.

money of Budgeting modernizing because it's a this too. procurement flowing. that year of citizen are products, and big big strong. that's steady in the the are question grant going be grant those money see then two no grants, to And to factors things. me. year remain that pushing the permitting lot with on focused Payments, is grants So, terms And of our front and we a end. big And on are there's all

Joshua Reilly

Okay. Got more maybe one for And Perfect. just it. me. then

here look in it's kind kind the prior estimate. If of point, our your and what Is your seeing of macro of guidance this in the takes line in at with customers to the updated updated indicative kind are you around what willing of guidance, spend at quarter? or puts this you're with

John Curran

So, Josh. here. I'll that It's take John

are seeing of kind So, we do we -- stages. early the

do through XXXX. guidance that's going not this we to If green have a anticipating to certainly not mentioned, we our year. the to It's we're TJ tremendous resources be year if anticipating XXXX. As in as will. impact But shoots, we'll to at drive place of on tailwinds first things number point, year. current really we're and a benefit seeing it's accelerate, much you update starting going that But go a the benefit putting see in this this we're in see

Joshua Reilly

right. Thanks All guys. Congrats. Great.

John Curran

Josh. Thanks

TJ Parass

Josh. Thanks

Operator

with Rhee Jeff comes from question our next Capital. And Van Craig-Hallum

Jeffrey Van Rhee

taking me. A Great. Thanks Thanks for my guys. for couple questions.

rescue billion mean, for $X.XX out serious I the bail guess some the coming. I local or [ph] the plan, bill $XXX money On state trillion

finer on before of point understanding in put little of the you hands gets how on procurement when then cycles can that up shows the act, the buyers that take a bookings. in based and Just long your

TJ Parass

Yeah.

to the as that as that we with will as looking month, their our funds be and -- flow and that. to of the as will was happening be bulk modernize we'll we with start it expect in half this we with the We and expect best technology Act, June early And the them as can we second CARES customers working onwards. of

Jeffrey Van Rhee

Act about different spend more and the flexibility the more at anything spend aimed to there of solutions? CARES this or being terms focus or your their kind than less on of in the flexibility Is your of solutions

TJ Parass

answer have specific over for Jeff, we better time, you that better that. to the better with tell what a with I we understand and our I don't will and was Act it CARES got understood, customers. it got found

to XXX% going it work able we're It's now, I opinion, our same like is suited with to Act CARES evolution our although the the in through out. even think with better came toward money and modernization right go not it's when to it the here. was, CARES customers us clear

Jeffrey Van Rhee

Okay.

the -- to spending sales the good around conviction front, side. to more the hear money putting obviously work On some on

going is of the maybe more marketing, a extra a insight the into is gen talk this around Just to maturation some on sales on? org, give sales -- cash the is from lead more little reps and about the going, the of bit this be evolution, what spent of context evolution many sort specific where but how this focused just numbers

John Curran

… question The

TJ Parass

Yeah, go John. ahead,

Sorry.

John Curran

Yeah.

marketing. kind it'll of -- across So the sales and be Jeff,

marketing business and through motion, on described have of more than sales our in go-to-market our XXXX. a sales XX, adding more point decent investment then in the focused this at heads bulk our and a in in and enterprise money the XX, for marketing, mix like probably motion. of We would to year our then BDRs do transaction-based sales. where The we've we'd bit investment sales marketing really spending we As be anticipate and

Jeffrey Van Rhee

one around up Can bouncing numbers it a Okay. quarters, it that. the mentioned to bookings, just get we're about to how push year-over-year? here? of you Was sequentially? helpful. or specific it, as I'll stronger bit coming then, sense you we more a was how the again And a little little out maybe That's Was put any off kind up can get up of aggressively of it it you just bottom, so we're relates

John Curran

Yeah.

So, -- significant usually one up QX,. but definitely and a QX a with quarters, decent it -- year-on-year four would year-on-year, growth growth. quarter-on-quarter be higher three probably than decent growth top historically QX, or versus bit

Jeffrey Van Rhee

it. Got

Nice leave Thanks. I'll there. quarter, Okay. it guys.

John Curran

Thanks, Jeff.

TJ Parass

you, Thank Jeff.

Operator

Instructions] further you final any [Operator questions There are this Did remarks? at time. no have

TJ Parass

for look everyone you and quarter. thank say forward next today, us to joining talking you want just to I we'll

Operator

conference Thank for today's participation. concludes call. This your you

You may now disconnect.

John Curran	Chief Financial Officer
TJ Parass	Chief Executive Officer & President
Joshua Reilly	Needham
Jeffrey Van Rhee	Craig-Hallum Capital

GTY Technology (GTYH) 14 May 212021 Q1 Earnings call transcript