TYL - Earnings call transcript Q1 2021 | Tyler Technologies, Inc.

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Operator

Hello and welcome to today's Tyler Technologies First Quarter 2021 Conference Call.

Your host for today's call is Lynn Moore, President and CEO of Tyler Technologies. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder, this conference call is being recorded today, April 29, 2021. turn over to to like would the now call Mr. I Moore. ahead. go Please

Lynn Moore

you, our our Brian to and Chief With Officer. Thank welcome is call. Keith, me today Financial Miller,

statement. Brian the like to I'd for safe First, harbor give

results, Next, I will additional will Brian some preliminary comments, I and review details. with take and questions. our the Brian? comments will end then on have quarter some then we'll

Brian Miller

Lynn. Thanks,

certain include statements projections course could considered Please During safe the differ projections. Such information to conference growth that make otherwise. provide of Private the which risks that uncertainties, year, this corresponding may historical SEC materially our profits. XX-K period information provision Litigation results unless of risks. actual harbor prospects, of refer the last comparisons and forward-looking We'd make will for the future Reform XXXX management specify and cause may those concerning company's note and the to these the revenues, Act filings on Form Lynn? call to than other are other to call, and of we Securities statements today expenses under are you on relate all statements we information from more and subject

Lynn Moore

Brian. Thanks,

led Our a to expectations, comprised strong, subscription first quarter XX% quarter which providing results growth exceeded start Recurring by XXXX. first revenues. were our revenues, revenues, an exceptional XX% our in of

Rescue to very Cash our XXX cash and with a the operations robust be effects non-GAAP grew strong mix flow services signs at public that efficiencies, continued Plan to subscription projects operating of cycles revenues on sector growth, million, with challenging stimulus under pressured to and activity XXXX. markets in A XX%. cost American were spending cash clients delays be quarter of pleased basis However, the federal XX.X% a Bookings impact continue have pandemic. down see solid favorable of grew as $XXX approximately ongoing point positive going were flow expect longer licenses very coupled and quarter with expansion almost by government but technology free in XX% a growing the forward. Act from We're software comparison and as will to the in our with of first deal XX.X%. revenue the margin sales first against drove

deal deals Georgia, million. approximately of was largest City at an a our and arrangement County, County, ERP valued Fresno, SaaS deal quarter in the Smith, with SaaS Other Hall for Arkansas. Courts Fort $XX Texas. Munis with solution Val California ERP included And significant Our contracts Verde the with Odyssey

EnerGov time an citations an Brazos Our on-premises and ExecuTime contracts York, Public Virgin and the contract Islands, New of Commonwealth contract Cicero, with contracts largest The Bahamas. Illinois, Safety with the U.S. include County, Montgomery and with

clients. of cash. solution far purchase majority national for the So software overlapping that serving delivers we with year, approximately with substitute United offers acquisitions, million comprehensive secure of on and district On Software-as-a-Service school state, to allows called a reporting helps XX States, teacher VetraSpec The individual claims. users. and market-leading districts VetraSpec, only $XX task busy system With the execute offices, versions and calendaring scheduling, allows up more the tuck-in is regions solutions, searching substitute and and districts in analyze this of Veterans county, to electronic management pressure with highly substitutes its the departments school in spots. addition the districts and state total labor-intensive of solution resources. and qualified capabilities, of M&A a districts, implementations. ReadySub payments. claims Federal reports individual state X,XXX price which management with absences a been and DataSpec's platform approximately Department automate state and submission across Tyler's DataSpec substitute absence X,XXX of XX, March a for making solutions pool the to staff completed veterans' entire ReadySub, filing the unplanned the needed COVID-XX easily Affairs we've for DataSpec on most to retain qualified planned and and DataSpec pandemic, both of teacher of front. substitute electronic due can and provider The shortages, the is of continuous with cloud-based filling demanding exacerbated X by web-based of

renewing Most more NIC, work than a payments across secure tasks. payments government, delivers cash citizens Additionally, submitting user-friendly importantly, ReadySub that and valuable government and leading a X,XXX NIC last duplicate government the it government for can eliminating completed processes, related businesses digital we interact company $X.X streamlining solutions with providing office. serves state and digital federal, services licenses, that nation. agencies and information districts' like to week, accessing without filings, efficient easier local payroll billion make the making of and applying for integrate insurance, payroll acquisition more business and visiting unemployment conveniences

which expertise government payments payments In processing addition, accelerate scale than NIC in has area, more the Tyler's payments in extensive governments strategic last and behalf experience and $XX citizens will and of initiative. year, on billion

NIC of will $XX.X sector platform net in income across base NIC XXXX. solutions and had innovative of NIC's company broad all will connect combined client the and complementary and Together, and and deliver tremendous levels million processes payment and well sales systems industry-leading for to of million the data government addition at and channels, the services state demand disparate and Tyler With the $XXX.X public products local address essential revenues federal, to multiple to services. be stakeholders. Tyler's highly digital equipped services

and to therefore, after quarter COVID TourHealth grew not the earnings results While second are more down reporting exceeded core had NIC that NIC's than quarter revenues, their strong that the SEC quarter, XX% very release, initiatives will a expected first first an cease year. to be over company, and they a last issue first plan. excluding also will quarter wind

more acquisition In again the than well XX%. initiatives excluding rose operating addition, NIC's and income, COVID TourHealth costs, as as

more than thrilled and to the DataSpec X,XXX our to and team the realizing and to benefits bring to are members ReadySub welcome Tyler We collective of family, these employees shareholders. to and NIC, tremendous transactions look talented forward clients the can Tyler

Now, I'd like more for on the for results detail the Brian to provide quarter.

Brian Miller

provided backlog on measures results on reconciliation industry. earnings on of understanding website supplemental Thanks, recurring Yesterday, with its believe our Technologies comparison Lynn. of we tab GAAP GAAP basis included We've reported XXXX. X.X% facilitate the this relations information our our of is our a that to investor about the release. earnings non-GAAP revenues Tyler financial posted In results section ended March information on non-GAAP also we and quarter reports A for Both the up the quarterly XX, for and non-GAAP software quarter GAAP release, basis. have bookings, in in provided under peers including revenues. in first X.X% were a the million, schedules and call, non-GAAP $XXX.X with measures

affect the As recall, XXXX you COVID-XX may the very X to to in began a March. before pandemic we strong business in our significantly first were of months off start

comparison. generally we're against pleased our that with So quarter this growth

of XX% XX.X%, declined mix reflecting subscription revenues new at sales software high deals of and license both cycles a value. Software contract extended

a revenue of delivery remote impact our in in and of the shift of COVID-XX services to services pandemic, Software billable X.X% declined continued resulted travel as most a decline the result revenue.

value. year, online last to new and QX Subscription weighted value year. side, added this last this positive total compared new new we arrangements In of subscriptions, XX The had XX% converted to included e-filing were was years of rose on-premises compared XX.X%. $XX.X XXX of $XX subscription-based of on-premises value. up QX $XX.X X.X approximately e-payments value up XX in quarter, total XX% Revenues in contract revenue quarter million, XX.X%. subscription e-filing $XX amount approximately XX.X%. from term comprised approximately revenue conversions, of million, subscription-based X.X%, software total X.X average SaaS year. million, We That value in includes payments, new contracts the last in arrangements representing years $XX.X are contract clients, contract and XX and up million signed revenues of On contract which and added representing existing million

quarter, our million, XX.X%. Non-GAAP was approximately ARR for for approximately was $XXX ARR SaaS QX million, up maintenance XX.X%. and arrangements up ARR, revenue, $XXX or million, total was first XX.X%, approximately approximately up non-GAAP the For $XXX non-GAAP recurring Transaction-based was $XXX annualized million, up ARR X.X%.

backlog was the of the X%. billion, Our up end quarter $X.XX at

were at our solid the million. $XXX As Lynn quarter bookings noted, in

million. significant with Last contract down XX.X% compared bookings last of including difficult this included combined contracts, large with year. the year's follow-on first approximately was North to QX value of SaaS $XX deals a comparison courts, to several However, quarter X Carolina a

QX $XX were e-filing not fully bookings billion, the North in bookings combined The also growth prior value bookings with X also new bookings by subscription trailing they XXXX, e-filing include our extension million included XX-month QX provisions contract Texas certain was significant term only would affected XX-month included, that contract. million. of with was trailing of courts, majority the deals for For $X.X $XXX of shorter signed If XX-month Texas have although down because The Carolina trailing been X.X%. of XX.X%, renewal of SaaS the rate the down the a a average in in do approximately approximately termination contract contracts.

April a of replaces both closing credit a prior with prepaid $XXX with credit revolver. of March a be X facility acquisition, The X.XX% and Cash $XXX.XX, XX% a note penalty. million unsecured can We a convertible added deal cash quarter flow in notes a debt increased free rates and new once structure. are bookings financed to very gives XX.X% flow. The again the million in mixture premium term XX, a over subscription first includes that which at banks. million million The very revolver the new facility of into flexibility. with common which new $XX.X recurring billion of $XXX $X.X in a into On Tyler our notes XXXX we million $XXX stock all-time March, software $XXX due of an notes the representing a includes us first XXXX. debt, capital $XX.X senior XX.X% $XXX convertible completed the was term cash In $XX.X a flow price offering X-year high we Our attractive NIC revolving represents at facility agreement due great provide senior conversion that in and of price grew term quarter cash NIC quarter to closing concurrent on annual in XXXX, a revenue. million, due for group with first strong our X. also million acquisition combination of from operations as note without flexible convertible the the million us of The entered free

sheet rate balance times. end annual with revenue net its was net strong forma Our expect remain leverage under the on to the year outstanding billion Tyler, at have acquisition. today $X.XX X.X trailing X.X for and remains the The in adjusted EPS EBITDA. the we of leverage debt closing And NIC XX-month NIC approximately we pro to on communicated very and interest achieve impact times February blended is current we track X.X%. that excluding exceed of We or the guidance the

results As plans. mentioned, very a had also strong that Lynn exceeded quarter first their NIC

acquisition we in as approach recurring conservative and per closing to transaction for integration of our restrictions, to and expect EBITDA prior be mix took strategic non-GAAP We our as accretive week. well NIC flow XXXX. the last antitrust to revenue and share the Because planning earnings cash NIC a free our to will

We impact to businesses strategic of working advantage and X take that combined currently evaluate growth the leadership on NIC's are the closely strengths our plan. with XXXX of determine the opportunities

the second expect the plans company joint issue XXXX the quarter. combined operating guidance year fine-tuning to of We for the complete of financial and our the remainder and for during

Now, I'd to call Lynn. the turn back to like

Lynn Moore

Thanks, Brian.

to including was strategic in in acquisition and, provided of the with both level our continue at largest accelerate NIC, of We've XXXX. $X.X new strategic approach. team including the start allowing in surpassed than cloud-first high our price for Our stronger purchase team our to cases, Tyler professionals, and great Exiting also a particular, XXXX, to invest shift cash. NIC, history all acquisitions, to long-term continue first position that a members, some financial us a ever, a been and of expectations executed billion initiatives, to our quarter, in NIC results in pursue in to our able driving

happy we position cloud, our result, great and believe I'm cloud a on investments for strategic public the competitive we track our also to are call. to acceleration that move. continue fourth our to say position optimizing we the the to continued has support of an strengthen. to that quarter discussed with sector's we move As a that are We products in will on the in see

recover saw that we activity of delayed early second the are is our is market quarter, levels XXXX. indicators as forward processes This and half growing from moving beginning some procurement RFP to the of

the provide anniversary relief recovery pressures our serve a expect American that not XXth dollars This of of to a causes pertains social partner topic to of its creation governments of initiatives. have One and efforts live, and that impact discussed prospects, the positive I've will under also calls our in $XXX and We environmental many local regarding Foundation, budget impact responsible these aid has the clients Act marks to since our Rescue culture markets. faced to and provided before to charities Plan measure year on our state communities commitment by positively significant and on billion of where of our the we which and Tyler's being work communities. Tyler the clients. our millions a guides

Our the of in and importance belief the foundation diverse for inclusive our an workplace. culture is also providing

More the in pause to We our to major practices last impact. sustainability our an included travel effective. responding Tyler's milestone Diversity The office year, opportunity office a to force an efforts locations office for across to task more Forbes environmental and to first for Best years. impact achieved our us and and Employers due proud significant been business provided for the normal identify we X by make and occupancy America's across We formed communities environmental have strengthen opportunities we consecutive locations list our pandemic the invitation consistent our in the We our are evaluate our data the global Last to year past we world's Jones to Tyler the And published significant our report look detailed sustainability publicly-listed than our annual efforts. to companies our our and body. Completing for strategy. in is This and the opportunities largest independent to an expansion on area. this ranking corporate was sharing Index our for background available survey. represents opportunity important Sustainability evaluation its of X,XXX reporting core recently continuing provide this survey forward Dow report, progress on a second responsibility ESG which by journey uncover responsibility website. of to survey strengthen to

members we week, called XXX nearly at platform. clients event virtually advanced clients providing XXXX, across conference hosting our Connect are virtual annual Tyler our X,XXX this valuable user more a than hours our Finally, with content theme from Virtually for Possible. of are using Team

event, With Q&A. excited with our up are able at to be and at forward connecting to to we with like many we'd connect in XXXX. them Connect so We to virtual that, clients for line person look the open

Operator

Yes, thank you.

first We And will the [Operator Matt BTIG. question from VanVliet question-and-answer comes now begin Instructions] the session. from

Matt VanVliet

guess as pick but appreciate bill taking commentary talked about, morning, aid starting it. about curious at cycles, of up I you quarter, everyone. end you slower the Really the really some of the the the of for kind sales the you what points areas to federal look think good with bill Just question. Thanks maybe will to. Hey, any spending? seen help there that that you upside business kind out Are in across your particular you've where earmarks in portfolio. far? the be us Are have any biggest think of there will specific so limitations of the at

Lynn Moore

question. That's Thanks, Yeah. Matt. a good

our is money efforts. been little there. think still to uncertainty There is about how earmarked generally I There still it. money a there's now bit know IT the for that's clients modernization right certainly - access of is

is done that, don't more our I so, I think know bit would one given it's little confidence. a clients necessarily it's benefits it other. I say more And the what than

around state Although little of a one business noticing there. uncertainty last - were year that was that was we our bit off and last our quite a state thing in business and year, bit was there

As they impacted ago. as a of budgets as a the it first lot year thought turns not state were out,

some American that reason that And of boost say, we and Rescue so, product But see area. intended come things that. that we're to is in our American along the Plan to with and think for what's is I'd combination lines, starting I I'd part of cautious out entire delayed on that got a that the see there in that is optimism were We're to and markets, across I the a in the think funding knew call of of RFPs Rescue Plan. state big providing some this that going with starting

Brian Miller

states first the just states cities used across This would $XXX very And by can passed. for that, I and revenue. CARES now be is billion available Plan XX replace days available becoming it $XXX that billion half couldn't was just the $XXX XX The from counties. on lost it to the what available now. of Act, the much of roughly and roughly add to goes and Rescue now just stimulus, And local few be deeper within when billion governments. largest other are it governments was governments. used And there Half And to months funding for is the for. restrictions on then it

So move purchasing activities yet. see it buying decisions certainly through on an points as have to to relief. the impact we much to wouldn't we and year But provide customers' expected opportunity significant

Matt VanVliet

to ability into from governments, And that of of your up in about and integrated? you're we then of platform just technical sort there fully product their be standpoint Is payments should sort how thinking standpoint push helpful. your the terms expect done any to NIC, to across products Is cross-sell kind integration a a local I product up-sell, base maybe the customer of then, get and process that sort the what very of to there following from needs guess a more technical to into timing? standpoint? theirs, of stages lifting from just on It's and heavy be real for both anything

Lynn Moore

Yeah, sure, Matt. say of I'd a things. couple

we of in face-to-face beginning efforts our integration really had was first both week, and at we want good the companies of the we some And that thing careful of And already that fruit of impact. meeting is of to And we a and the the sort look initiatives senior we take and some are and at executives this be level, As fact, of exciting, will to look brainstorming. comments, time, about initiatives. into now one lot that And we have is which prioritize major just mentioned there strategic at sort to news we're the deep that dig start on. make things need the them, high our some know initiatives. really our the low-hanging for a of in sure most do

things. revenues, plant they classify they build they talked seed as largest our of enterprise other You revenues they're That From boost in before unquestioned is bit they is able of mentioned the in there. sort there technical talked certainly our of to about it's work payments a level, technical leverage and where is payments. from thing a payments. licenses. hunting to fact, initiatives. the still in the their to it's - those then in see public which one client And sort do little and a to experience our us. about state the NIC standpoint, state local sort leader ability sector enterprise there which go is provide help of contracts, level get growing We leverage integrations go their at and we for contracts, state additional and at payments more of What there. a We base and the state then But and

that's integration there's lot going at Tyler up But to another first their looking really that's On that those can right XX%, I of pretty push start which of do there were then, this have go one of technical a think major that need be is And now. just there. is exciting. in at own, and what what products initiatives our to about And done. we're we don't kind we revenues quarter, talking we

Matt VanVliet

Thank Great. you.

Operator

the comes And you. Thank Berg Needham Scott from next Company. question with &

Scott Berg

Brian, for got guess, Hey, here. thanks X Lynn and my I taking questions, I

business, your obviously, we've XX as at pretty subscription weaker the as look Lynn, least last was or much several of particular, impacting it quarter, is First over any the that sales, in you coverage than it seen still maybe versus my couple were X of some businesses, driving at the But the with X at quarters. in in area, new substantially your all, - in I license I line in softness last deal quarter looks universe. contracts what of COVID was as which kind flow guess, look product of quarters? is like at

Lynn Moore

year. awards that more to now. actually sales was we've skew saw a more impacting COVID far signed really the SaaS coming deals gotten And say, year on The of good lot bit where different and is our deals But XX-plus that Yeah, are skewing awards heavily are the these has expectation at business getting for Scott. to same fact QX, of it question. financials, high-end to that the it's We of about more RFPs, even talked of about a signed. differently. that are. more starting this see are we're sort cycles awards. And would are what We and the that I'd talk And see we're - demos, Munis impact, it don't we're QX is, and starting seen is, starting example, some that license clients' we're unsigned talked QX last greater are that, we've was not call budget about bleed COVID lot in we've hangover, of the it to we I starting we're actually to in And SaaS. a what normally time, actually to July that see at last year, the in how the our in guess into parts right our toward with X, June the XX. so where are percent a do little We

think I we've little There's that just overall a hangover of talked about and a going trend So of COVID. on. still bit little lumpiness bit that from is still

Scott Berg

Got it.

Brian, last years. actually X a some question X unsigned second is quarter-to-quarter. You was bit. obviously we those about My There or talked targeted on that variance certainly the little over awards. from

As was of you of awards, in those I look than couple you've at higher it unsigned seen Or number, coming guess, the was similar QX, kind materially of amount? out that quarters? in what last line with that

Brian Miller

little say it's I'd a bit higher.

As third Lynn year, second year, of year, in said, fourth in pauses procurement these we of were processes RFP volumes quarter even saw down. last last the quarter quarter last where to of

Our to lot a weren't adapting remote to and clients wanted longer to demos of those things clients little We took work. remotely. to adapt while were - some in-person it a to doing do able

were quarter, that of expect X sales last we now sales normal there processes year these show delays. year. So pauses would a move deals, cycles to given in and processes, first are fourth And up we into as quarter delays that year, the months early-stage in the this bookings our sales those typical in particularly

our RFP is activity still picking And is The robust. so, very really pipeline up.

it's along, timing. all said really we've a as of matter So

the up. We subscription lower deals in that pushed not just seen it's license skewing away. evident are the in that deals. out, showing the seen more it's bookings of haven't We've toward go the subscription, it's than given surprising deals and more And timing

Scott Berg

I for all my questions. That's have. taking Thanks it. Got

Operator

from Rob with next Baird. Oliver comes the And question you. Thank

Robert Oliver

you one there weren't Great. municipal, of that Thank just Matt's for sizable Obviously, question into the go amounts many you, my money. flowing on the, Brian, back the to Rescue Lynn, I guys, want for Plan. you. initial as to think, taking money mentioned on I restrictions local I question. think, had American

just past. green-lighted conversations be guess, opportunity as I nightmare you as it's maybe you tuck-ins, funds our are schools' in to of mentioned is activity” uncertainty "growing Some moving X,XXX the can just seems people a know about guys starting you're where a or are the you perfectly there customers that just exactly like One spent. to I really But in guys projects. schools, indications in it's COVID. been still, of timed this seeing, through particular, are than manage think of going ReadySub frame that's we're market it's area, some early curious, and noisier how ARP are to that if I have But those other any there, was still and hearing do hitting kind

Lynn Moore

Yeah, Rob, and We a it our about that's how, parts differently. business good you're of make year, point different last impact you impact the talked did again, COVID of right.

business. record mentioned time, our areas off last had business that of our certain ERP, year. our same business, a sales And an a higher-end we was While just At in impacted in was the I the lot. I definitely also year schools last courts area that was was schools mentioned quarter last year

across little a different - of bit it's business. a our just it's So

Plan, some - You're expect right, specifically through XX Rescue targeted money and do are the American education. higher that's K there for I

there in what say was out, muted million little about in I the it was, it we're and a of our talking back. million, terms that's targeted that. generally, year of area $XXX think was certainly terms - to area coming think was the receptiveness clients an say deals. where I'd I see, certainly in RFPs getting a silenced, is There just bit, for last wouldn't about $XXX is there And but from I schools more starting

Robert Oliver

- ahead. Yeah, Great. go sorry

Lynn Moore

becoming in in in. only remarks, really And And opportunity mentioned of can of I we more sort as you we is my XX same that's ExecuTime did requirement small And more schools. acquisition. is of right not that It's deal. becoming X,XXX for And it's our several - That's now, application point for application have a right. go playbook want And also application it's It's over about to ERP that kind them. school clients. we the of in space opening the ago, had us. years a just you're that of about a your deal ReadySub, a type and exciting more substitute teacher

well as sales We we're able grow inside great well it that will that pretty business. to for expect to our be going as new channels product be and

Robert Oliver

That's to of there. on you and year-over-year. are helpful. that or just for better really Thanks, and Lynn. being customers willing a maybe March Brian, on get to nicely up subscription Is mixture leaning first, guys Thank you. both? I Conversions or of a quick dynamic know wanted kind comp were obviously I you. handle a subscription appreciate more it. in convert a then, of And easier the but just more the things in follow-up having to subscription frozen function

Brian Miller

it's more terms COVID to is X the customer to with picking And our and some push through our that these remotely strong to to base. back And new have AWS conversions move more with trying capacity move us more the giving customers' of have increased what the access of really available relationship Yes, our as systems consistent we've been certainly And model. has really of see with aggressively cloud. the complications into that's up AWS, SaaS systems last during the subscription and additional risen we and of to the The latter. said, quarters - think forefront we into more to customers desires market business wanting I again. conversions the in in on-premises ability

Robert Oliver

Great. Thanks again, guys.

Operator

comes Research. Thank you. from Northcoast Housum with question the next And Keith

Keith Housum

bit the in bookings for just bookings If services cancellation a I'm guys. like the about looks unpack more. or the sorry, the a went - by little services it could number, in the morning, like actually, actually there looks down quarter. Was the backlog Good million It quarter? I $XX number

Brian Miller

compared about talking year? to you're but cancellations, No last

Keith Housum

service software the the million. quarter, actually like bookings bookings you by think were looks $XXX Yeah, million down it have in new $XX and I for

Brian Miller

the therefore that that I'd in Yeah, year, a I to bit of the move think billable about part were that. services through cloud so you that, bookings. travel most to the and new through in is revenue you're it. contracts. Last little just runs still most business, probably traveling lower But of of with say through $X delays - with a we general, see we goes part the along as I'd more cloud see That's of of of that million bookings. say of quarter, some level going typically

- no, meaningful year. not We've seen both - contracts but been whole throughout seen and in any of have in progress cancellations, So pipeline, There or side, license that's the are either cancellations. not that just held the have along projects really subscription any with delays. on last we really true of the

Keith Housum

the and XX%. more was And unpack XX%. Virginia you better up, right If it think revenue could than I you for was the just said it the if program was TourHealth what Okay, last a transaction I little assistance quarter? one-offs the NIC expected. sounds last yet, up than was year I say more, you. pandemic - NIC But excluding numbers of revenue like enterprise heard bit revenue got the How

Lynn Moore

which Yeah, is, Keith, they're interactive governance up is services, transaction-based, was as know, XX% that you year-over-year.

strategic areas growing, So had good first really really quarter. they in where a they're the and really solid

Keith Housum

as numbers DHR happen don't that. see have Lynn, the to to Glad Hey, you? well, do Great. you

Lynn Moore

DHR was actually...

Keith Housum

records? history Driver

Lynn Moore

DHR, know that revenue I to think [same look which know, were X give in here. [ph] Yeah. off believe again, the about or was was But, you is and those take, their was see, in at as they've you I'm I first probably QX. revenues, nice the really given interactive quarter up it the that's stable. that up DHR quarter, X% No, And time memory government services, when in increased nicely growth drivers. quarters. And store] more I maybe they're actually going enterprise

Keith Housum

appreciate great. the color, it. absolutely for Thanks Yeah, luck. I Good guys.

Operator

And you. question the from comes with next Evercore. Levine Thank Peter

Peter Levine

my taking Great. for Thanks questions.

with of cloud seeing on permanently could you're public just or catalyst remote. could this hybrid. employees towards curious acceleration But given the side, the some side the helps there's adoption? of work-from-home, in to based of that. that Curious, the idea will flexibility employees obviously accelerate corporate hearing segment the be similar on trends I'm be certain cloud, enable a be public cloud Obviously, we've sector So if cloud seen to move a now, sure that

Brian Miller

Sorry.

through repeat weren't question? You last Could coming part you of very the clearly. the

Peter Levine

Yeah.

know, some just where on does the on to to a idea the - this public be that Sorry Yeah, employees, on catalyst cloud conversations, So But the We've What your the seeing that. be trends flexibility, obviously, the that. employees given helps right? right? based the acceleration sector to curious you similar hearing about seen accelerate will cloud are or corporate cloud? curious that public know, potentially is could trends with side? idea side

Brian Miller

Yeah, I think, that's public the sector than change definitely the true. private Typically, you more will see and evolve sector. slowly

accelerating. a in sector, sector just physically public an systems significant factor their to many a remain ongoing had I where those remotely, a to in and in closed clients conversions customers that courthouses take those So preference move think, new were things But of sector. take start trends hold doing but closed, from essential often bit on-premise like cloud our great and still have longer little are the - is, the the them is the Courts private the and that in in to that private example things courts function. for

example, ability were didn't that to that we courts have have we market products, to shut many that bringing continue our public courts don't old operate to legacy have down. early for not accelerated product the to just legacy so courts - functions systems remote remotely, And enabled our their and remote operate last that virtual And systems sector have clients access. where allow agencies but licensing old year for clients, permitting

people things and don't slowing in you down of processing those are So building activity. sorts have the permits that office

there's access, remote for certainly provide interest systems in and those. that accelerated an Our

make work private increase a with remotely, yeah, And So that we've government also to quarter rather volumes in I and a governments office. and that the look coming online more certainly like as government trend. we're or think, their talked that's payments time factor interact NIC, ability sector a the to as over will, with than of result results, first seeing remotely about to

Peter Levine

Yeah, whether of then up, government bill, a uniformly? local the more share great would situation? detailed can Lynn, budgets any your you Or government to comments say, budgets I prior opening and color. more and state on And on spending are state-by-state more commentary off piggyback is it

Lynn Moore

on-site from generally, I deals of areas a are deals, RFPs, of plan about where we they And in business. and Take, necessarily geographic. getting would signs. could XXXX. higher-end our have out been lot awards. certain a attribute to QX on We we our There pre-pandemic, knew as see QX, that still down example, seeing our while space I and state know saw they're lot down, we're we these that about so talked actually just deals over we're sign. in in of in big maybe coming anything those the I in for don't shut significantly that's these fees an particularly and those talked a would even up maybe whole, We space financials, positive that our appraisal were encouraging got say, starting released.

just there's people money open as going what's continues mirrors say continue over a to the There think businesses for another generally lot activity, of optimism. - as speaking, it's general I there's on reason So Again, to flowing, a continue we're it as let's And country. start wouldn't quite people encouragement. seeing start hump but yet, vaccinated, think up, of be this quarter get I but I in optimism the get to interacting. should

our see You're that as well. business going through flow to

Peter Levine

X I more if could And Great. in. squeeze

how XXXX? of thinking And impact, missed Sorry, specifically could what deferred But it, I on - you hopped the have guess, late. revenue I here the if Brian, financials? NIC's are if any in I guess, combined I about write-down

Brian Miller

working factors would the have we I the software-based. revenue deferred we than, NIC But X still is have at software a guidance. large certainly say, that they looking in doesn't this more We're aren't X combined That's transaction-based through reasons that Their But to say, of balance revenue guidance time. of combined sheet. at less we're deferred closely balance than pure providing that's a company. on general, the rather their the as develop business all do tend process.

Peter Levine

Okay. for questions. taking Thanks my

Operator

Thank William Jonathan you. Blair & question And comes Company. next from the Ho with

Jonathan Ho

morning. good Hi,

Just wanted make to - sure I fully understand this. I guess, I'll

expect terms normalize anticipate do of maybe once potentially even the is low you to starts bookings there'll year-over-year this it growth? period you today. more the would that potentially pipeline And than so catch-up be be So quarter a to in watermark

Brian Miller

we in QX. it's if a tell to exactly see to hard low but did watermark, it's bookings start last Well, year declining

I comparisons our against pandemic-affected a So quarters. be think now start against to will - compare

think quarter a are catch-up, quarter would they a but So just It's there really, and unaffected sort what sort essential - not very or of kind pipeline, be comparing the what pipeline strong was was not in likely to quarter, in remain dramatic now, it. combination right also against last pushed deals some only large catch-up. do that pre-affected has been pre-pandemic quarter, with of but be the the of, fact a we're just out. timing X the these X, systems that a of the the We

starting So, those to that deals RFPs increase starting we're see some pick-up in again, and of activity, again those forward. to moving

believe timing. we a just of there's It do So matter a catch-up. is

been before, legacy go the further that an might pipeline a in would will current the acceleration be with And will what cause consistent that of out. buying replacement the systems acceleration, we - that will to some They'll factors systems. of that for the rethink access, recession that demand we security those still thought them They'll down - be need budget the road, the but processes. accelerate longer-term its had be legacy those be remote that that and existing in to way around example, there'll in will need ago. there those, for concerns the systems As left of believe years and a as be but accelerated that some also saw be that we need we've they that have said there will works procurements that pent-up decade still clients believe might through to have do in, sort

Lynn Moore

while in win but competitiveness X, market. Recession, last little have a And the been that bit, off have like our the also in the disposition markets X And reason to Great - markets. at the to believe I is what's just again, and the to back. Jonathan, We been come our add the months rates look there's about actually that like climbing. there, at talked starting actual too, I'd look trends that even market

have And always business various pretty about some we of bookings, quarters, do little I a get concerned year, can have QX we Tyler's year, of QX in competitive stream, the a be years, parts we've And largest continues because of lot because about so over skews it's XXXX, had, at that grow. history. we but look our position our of - as our last in deals. this large to a we deals really X were some Last we large always talked steady there think,

of that we're the deals back like number. rates, will at competitive large position, off large when kind competing doing, what's of direction our little win the But so those And I that's throw look we'd market the of sort thing, underlying lumpy all bookings what those always what's sort our a against. that's trending to in And - what's see.

Jonathan Ho

helpful. That's

these acquisitions do Just on be? them how you of DataSpec and products big about your opportunity across those question Thank maybe ReadySub. How leveraging and And think cross-selling existing could X an clients? you.

Lynn Moore

Yeah.

cloud-native look different, AWS. a There's It's actually and got in ReadySub of some sell space. founders clear pretty that, that's rolling makes expand a and can veterans' an It's our DataSpec, that little space They XX as that but both leverage it consolidation platform. market bit our I migrate not as entellitrak former out engineers. a more as small. it's as through will it's across little again, opportunity in markets over ExecuTime. as sales, earlier, benefits say, had probably can This I'd on opportunity. we know I in platform, gives space. to lot schools for probably to us of a it's us I also so that inside those application state like So becoming acquisitions. a of the - we of this as were more AWS they're well need in built That more that requirement. a customers would in that, state federal is play. new that a just and of out like bit the it go but They're your out and can And leader playbook I've customers. the fairly something the X the well. more the our our don't the out good sort more that's to go the eventually the help we probably point, markets us deals we And in of classify mentioned and gives competitiveness just credibility credibility markets. will leader base we of the is They

Jonathan Ho

you. Thank

Operator

Thank CJS from Securities. with Strauzer question Charlie you. next And the comes

Charles Strauzer

Hi, good morning.

know should I Just a you to hoping at guidance more be think for also you're color quarter, you releasing you. there, bit and little still maybe timing quick question through this a updated working on but as guidance get NIC, when all. Thanks. the to

Brian Miller

to expect end we'd it said June. May, beginning quarter. to we've the Well, release the of of be during would I roughly expect that

this we're expect in the again, that. and year, how plans really working not the NIC, next Tyler, But of the into with to for do their but some position and start. how year. only off timing our current are So that the would a opportunities, of a strategic will cross-selling through understanding think we integration ability to sometime of much to and initiatives we and start month what be to those size they're strong go so, the what or is in to address

expect significantly the on a their in do but to not we overall, be exceeded of actually second much really and XX% As we revenues, those, a core the down said, - quarter. little XX% those plan on their wind factor they after above growth revenues, COVID-related

bit from ahead about desire strengths increased talked of than in is we with governments of digitally to rather business their the rate some of interact the businesses in-person. of advantage growth and ours. taking And a their So individuals

the have generally, we weeks, about that they through to for within next out on the And year. plans talk a able this So few outlook and together be the have to working positive year. guidance expect combined more

Lynn Moore

Tyler those Brian can well. in mean, it's I it there, we not largest period period. just little I all regulatory approaches you and acquisition to yeah, talked we think before, priority, to tended mentioned approach. today. And time. approval is close conservative view all it's love because signing there about - yet. I Yeah, with share I our if bit I remarks, we from of I this numbers a of very be take sorts could a - a top approach, I'd add But mean, and you obviously there, this his it And were take of that And, right? way the Charlie, was too, just is we and more quite conservative this think in able to we're And -

the head didn't deal the even worth a You We're a always on it priority. the few thought seem us start top But getting is long-term. that time. just or of long a And weeks in potentially follow by interested it. stuff, it jeopardizing of some delaying

do I about to think said, there. as around EBITDA there's and be to going ready mentioned a we month. even a bit in the things the before that those it's in we'll all to and get now. little But earnings if Brian we earnings. to numbers it's that our been we part month probably closed to accretive this. frustration, If excitements a releases out, of appreciate timing I before know earnings And and We release, know just going we've we it's the closed just of accretive

Charles Strauzer

you that. understand. Thank for Totally

Operator

A. comes with from Davidson. you. next Heckmann question Thank D. And the Peter

Peter Heckmann

until virtually here be would the free I interim? generates I or understand, a Tyler guidance I you would direct my balance buyback looking cash weeks, expect sheet, debt But I'll - combined questions the in just forward on get mean, of few curious But then. morning. to and the all reduction until the you limit from cash good to hold so Hey, flow. really to that strong flow threshold some on in to refrain

Lynn Moore

a towards that. I there's don't necessarily predisposition think

and suggesting always probably acquisitions a at need Acquisitions we've in we're we DataSpec the in for be and talked we year, ReadySub. little X. I that on process. not be said I I already more think, did And not about I'm time, lot will Those mentioned the that NIC, think, a deals were we're acquisitions, I for to that QX. think and opportunistic. done done this done point compelling. were We year, may with I

term that. more again, very And relates comfortable a so short leverage may now. be debt bit I to our as going right we're little the forward, we'll we - have little would expect And it bar, on share opportunistic. repurchases, higher in We're a that with

be last things the to make about And call we our we've at dedicate short at sure retain flexibility I debt, make was the last of want One do make would do flexibility. - quarter it we in it in I the we did want combined maintain sense order. to repurchase solely they I off got when invest to to flexibility. to when if makes the have business acquisitions we talked think And sense And always cash to share it But the flow, fairly paid they when sense. that. that and

to manner, we're but going aggressive a and you'll flexibility, always that open, so have fairly down And us see debt pay have in that we'll we'll flexibility. that

Peter Heckmann

be any some there's see it the then, bookings? to in a deal quantify it through of to Or Okay. the That's terms? when would or harder renews it's you expect the large NIC bit fair. them you flow jumping where question. contract like e-filing to Brian, Texas with little - given But a be may of this And gun portal the would contract, state terms

Brian Miller

like into fixed statement, just those. those Yeah, per other of than we've flow comment had It's terms that not are go the fee as on dig that. the Texas it's are the solely little go basis, probably filing Typically, that e-filing don't case there's through of because they into contracts to bookings a We need booking, inception. at our fixed to really just our a a e-filing income when our in that early They in revenues into the transaction-based really on amount. goes renewal.

So report. line we'll with they of and look we closely the see to at those up contracts terms how how just have

detailed integration we the that's first through on part - we'll basis what quarter. as time be over the a prepare the combined for of we this report to as move doing So

Peter Heckmann

Thanks. problem. No Okay.

Operator

from Thank you. Bracelin And the next comes with Piper Sandler. Brent question

Clarke Jeffries

on Thanks taking this for Hi, question. Clarke Brent. Jeffries the for is

some from Wondering, house. there steadily Firstly, reacceleration I comp strongest the in the like payments year. of side update payment were noticed get trends of off XX% the an if we on last could e-filing that But the business, know, revenue, in trends improving the the here? of impacts up looking are I it's

Brian Miller

some in They it's are. rebound not There's e-filing, dramatic. although,

payments to as our - transaction-based see last about courts volumes I refined up think sort we back component. That to there we've business. revenues that starting expect a payment the of of a were does mid-single-digits. how pick But up, with But open are e-filing typically would in up our go-to-market over talked have a own few and we strategy. initiatives quarters newly sort back

And adding types our so with do to our platform increased that platform. seeing increase bringing online. payments trying payments in have customers, making into and we're adoption customers, customers our among payment more certainly are We're citizens more in new payments adoption. push their We of those the we're

we business business much NIC we our well growth accelerate and to how expertise performing help doing stages early of of of the base the business. the still the really platform had and NIC seeing increasing strategic Tyler within in again, is still But payments payments smaller the last couple years. Tyler, can But look on strong that. objective a than And really forward use own off against has. over its we're So within significantly to that their it's

Lynn Moore

Brian. right, that's Yeah,

we're tend revenue we probably X QX we at payments. plan, last the payments, while We it's And see our our were run mentioned, a rollout that fast. years were as payments. more and really, still started and the grow the as been that at online QX we small our And year-over-year X We've Brian of in year you - you're As businesses up work. solutions the And times in in get X-year out-beat to more of actually rest year. going throughout ago. if as we rate, to look it's doing

to as of And see. now pre-pandemic to closer pre-pandemic. XX% encouraging getting mentioned, our levels closer that's actually Brian They're are to the XX%, back So levels. XX%, e-filing revenues getting

encouraging. So that's very all

Clarke Jeffries

have and this Great. that averaged headwinds you for I I would building the states is think, opportunities we say the And around XX% of out that state-level part mentioned the thing you new just briefly then, same-state just as stood the is, then revenue X last NIC I'm XX% off some on growth potentially IGS - that revenue asset business, that states. growth on DHR of years? break post-pandemic if as Lynn, expansion contracts, wondering could accelerate with is abate, this new with an that existing one

Lynn Moore

areas around But them a question. XXXX. growth. their I arms for getting growth early me IGS their areas and plans Well, services, can comment help them don't enterprise their I and same-state little we're we that and certainly, our growing on - think, those even we complement those revenues, our are think further help bring again, a integration still that's it's there it's doing good multiyear know as probably for to

guidance specific I don't in have would So my terms be around certainly of right anything now. long-term more expectation. that that

Clarke Jeffries

congratulations great, and on right, All the quarter.

Lynn Moore

Thanks.

Operator

from the JMP. And you. with Joe comes Thank Goodwin next question

Joe Goodwin

guys you competitive to changes any comment also, to Great. maybe taking other from morning. And performed? horizontal environment Socrata good Can how question with for there then Thanks the on vendors has and more respect been some Socrata?

Lynn Moore

no, Yeah, well. Socrata very performing is

things bookings, pushing but really more, Socrata traditional put call on the opposed a traditional sales is we've Socrata's XX really that of we're channels sales Tyler's to or we months as cross-divisional One focus really through so last channels.

Socrata. exciting NIC well think, the opportunity most for opportunities, the with of One as I is

And level. management And the NIC. our week. I at and own that lot And local was with Tyler. around all driving we've the focusing they push the big a Socrata came more Socrata various been a what before levels. earlier at one to of customers can meeting the of insights Tyler, of of mentioned at data had on about and and this on topics earlier agency interest conversation team's excitement lot do their they state there's state federal

seen outlook a new And know don't there competitor so, good. I that's I different. anything the about pretty or is think specific I've anything that

which a we been things pandemic, delays. also the done also times helpful, been of talk has has in been number Socrata issues. It's but there's about some

may our as and lot again, do, trying anticipated. has Tyler future it. piece and of and company the the our Socrata provides felt to that excitement thing that, other I not of visions a Communities clients grown But our ability as has, within both something Socrata's, it's the in which, business fast as of rest I quite same don't It's know an any do as within and has well we important that years within Tyler. to of the the Connected last we're have what

So doing it's, well. yeah, it's

Brian Miller

that that capabilities really horizontal core such public core gives Yeah, and and our use strictly existing the an analytics advanced over don't ability us platform solutions competitors have that sector-focused products. our to with data the within to Tyler aren't deep advantage integration provide

really tax, started by the with Analytics adding our us we Assessment appraisal it and Socrata out to And the we're tax. the World a with safety. that's So rolling competitive with with value layers. the and with the and ERP and analytics Safety products Connect Data New adding product now, great created our We've for finance. Public success had advantage public It's for

So and through component inside sales new in to both sales. software driving Socrata it as said, sales market, focusing really a Lynn new our by into on adding

Joe Goodwin

Great. Thank you.

Operator

questions, return comments. Moore to Mr. reached have closing we to allotted the for floor time I as would our And you. Thank any for like

Brian Miller

lower I'd million Before QX That's we of QX in services, question. add of we an on And a is question $XX not bookings like to some last a in We the that QX. There saw compared QX licenses. services licenses in of number one in of last combination to just clarification decline license related of services. Again, year. deals most licenses earlier close, that's QX large and year. software was a had and booked year to about this

million So about in and it the billable and decline is the travel major services. part mostly side in probably of million that related million $XX about $X of license $XX to services,

Lynn Moore

joining free us that healthy. you Great. everybody. please safe Brian contact for Miller Thanks, everybody, any to further if have Thanks, clarification. questions, you thanks, today. And and stay Brian, and feel We myself. hope for And

Operator

now The attending Thank for today's you. Thank conference you has concluded. presentation.

You lines. may now disconnect your

Tyler (TYL) 30 Apr 212021 Q1 Earnings call transcript