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Tyler Technologies Reports Earnings for Fourth Quarter 2020

Subscription revenue growth remains strong at 17%

PLANO, Texas - Tyler Technologies, Inc. (NYSE: TYL) today announced financial results for the fourth quarter ended December 31, 2020.

Fourth Quarter 2020 Financial Highlights:

  • Total revenues were $283.3 million, down 1.9% from $288.8 million for the fourth quarter of 2019. On an organic basis, revenues declined 2.1%. Non-GAAP total revenues were $283.4 million, down 1.4% from $287.4 million for the fourth quarter of 2019. On an organic basis, non-GAAP revenues declined 1.5%.
  • Recurring revenues from maintenance and subscriptions were $212.4 million, up 9.5% from $194.0 million for the fourth quarter of 2019, and comprised 75.0% of fourth quarter 2020 revenues.
  • Operating income was $48.0 million, up 6.4% from $45.2 million for the fourth quarter of 2019. Non-GAAP operating income was $76.4 million, up 3.3% from $73.9 million for the fourth quarter of 2019.
  • Net income was $54.1 million, or $1.29 per diluted share, up 15.6% from $46.8 million, or $1.15 per diluted share, for the fourth quarter of 2019. Non-GAAP net income was $58.3 million, or $1.39 per diluted share, up 0.3% from $58.2 million, or $1.43 per diluted share, for the fourth quarter of 2019.
  • Cash flows from operations were $88.8 million, up 16.5% from $76.2 million for the fourth quarter of 2019. Free cash flow was $83.7 million, up 25.8% from $66.5 million in the fourth quarter of 2019. Cash and investments totaled $758.5 million at December 31, 2020.
  • Adjusted EBITDA was $83.2 million, up 1.3% from $82.2 million for the fourth quarter of 2019.
  • Software subscription arrangements comprised approximately 73% of total new software contract value in the fourth quarter, compared to approximately 54% in the fourth quarter of 2019.
  • Subscription bookings in the fourth quarter added $11.0 million in annual recurring revenue.
  • Annualized non-GAAP recurring revenues were $849.8 million, up 10.4% from $769.9 million for the fourth quarter of 2019.

Full Year 2020 Financial Highlights:

  • Total revenues were $1.117 billion, up 2.8% from $1.086 billion in 2019. On an organic basis, revenues grew 1.3%. Non-GAAP total revenues were $1.117 billion, up 2.4% from $1.091 billion in 2019. On an organic basis, non-GAAP revenues grew 0.9%.
  • Recurring revenues from maintenance and subscriptions were $818.2 million, up 12.6% from $726.7 million in 2019, and comprised 73.3% of 2020 revenues.
  • Operating income was $172.9 million, up 10.6% from $156.4 million in 2019. Non-GAAP operating income was $299.5 million, up 8.4% from $276.2 million in 2019.
  • Net income was $194.8 million, or $4.69 per diluted share, up 33.0% from $146.5 million, or $3.65 per diluted share in 2019. Non-GAAP net income was $229.3 million, or $5.52 per diluted share, up 7.8% from $212.6 million, or $5.30 per diluted share in 2019.
  • Cash flows from operations were $355.1 million, up 39.4% from $254.7 million in 2019. Free cash flow was $326.6 million, up 53.6% from $212.7 million in 2019.
  • Adjusted EBITDA was $326.0 million, up 7.5% from $303.4 million in 2019.
  • Software subscription arrangements comprised approximately 62% of total new software contract value in 2020, compared to approximately 63% in 2019.
  • Subscription bookings in 2020 added $42.8 million in annual recurring revenue.
  • Total backlog was a new high of $1.59 billion, up 9.4% from $1.46 billion at December 31, 2019. Software-related backlog (excluding appraisal services) was $1.55 billion, up 8.7% from $1.43 billion at December 31, 2019.
  • Effective January 1, 2020, Tyler adopted the requirements of ASU No. 2016-13, Financial Instruments-Credit Losses, with no material impact to our consolidated financial statements.

"Tyler's team executed well in a challenging environment during the fourth quarter, concluding 2020 with strong earnings and record cash flows," said Lynn Moore, Tyler's president and chief executive officer. "Software license and service revenues continued to be pressured by longer sales cycles, delays in projects, and the near elimination of billable travel as a result of the COVID-19 pandemic. However, recurring revenues were strong, and subscriptions revenues grew 17%, marking our 60th consecutive quarter of double-digit subscription revenue growth. Our revenue mix and cost efficiencies contributed to a 120 basis point improvement in the non-GAAP operating margin to 26.9%.

"Bookings in the fourth quarter of approximately $333 million were relatively flat with last year, as the pandemic impacted the timing of some client decisions and pushed some deals out of the quarter. Our new business pipeline remains stable, but in some cases the timing of new contract executions is less predictable. Our largest contract signed in the fourth quarter, and the largest contract in our history, was an agreement with the Texas Office of Court Administration to extend our existing statewide electronic filing arrangement through at least 2027. Although the total value of the contract is approximately $98 million, very little of the value is included in backlog and bookings because of certain contract provisions. If the entire amount of the contract had been included, bookings growth for the quarter would have been approximately 28%.

"We are excited about our opportunities to accelerate revenue growth and achieve our margin objectives in 2021, as our elevated investments in product development and acquisitions in recent years have broadened our addressable market and strengthened our competitive position. We've learned a lot from the challenges of 2020. While 2021 will also be an unusual year, we are confident in our ability to continue to execute on our long-term initiatives in a manner that provides value for our shareholders, clients, and employees. Our plans for 2021 include increasing our investments to accelerate our move to the cloud, including significant additional development resources dedicated to optimizing our products for the cloud," added Moore.

Guidance for 2021

As of February 10, 2021, Tyler Technologies is providing the following guidance for the full year 2021, which excludes the impact of any acquisitions which may be completed during the year:

  • GAAP and non-GAAP total revenues are both expected to be in the range of $1.190 billion to $1.220 billion.
  • GAAP diluted earnings per share are expected to be in the range of $4.03 to $4.21 and may vary significantly due to the impact of stock incentive awards on the GAAP effective tax rate.
  • Non-GAAP diluted earnings per share are expected to be in the range of $5.65 to $5.77.
  • Pretax non-cash, share-based compensation expense is expected to be approximately $116 million.
  • Research and development expense is expected to be in the range of $88 million to $90 million.
  • Fully diluted shares for the year are expected to be in the range of 42.5 million to 43.0 million shares.
  • GAAP earnings per share assumes an estimated annual effective tax rate of approximately negative 16% after discrete tax items including approximately $67 million of discrete tax benefits related to share-based compensation.
  • The non-GAAP annual effective tax rate is expected to be 24%.
  • Capital expenditures are expected to be in the range of $39 million to $40 million, including approximately $3 million related to real estate and approximately $17 million of capitalized software development costs. Total depreciation and amortization expense is expected to be approximately $81 million, including approximately $53 million from amortization of acquisition intangibles.

GAAP to non-GAAP guidance reconciliation

Non-GAAP diluted earnings per share excludes the estimated full year impact of non-cash share-based compensation expense and employer portion of payroll tax related to employee stock transactions of approximately $116 million, and amortization of acquired software and intangible assets of approximately $53 million. Additionally, the non-GAAP tax rate of 24% is estimated periodically as described below under "Non-GAAP Financial Measures" and excludes approximately $67 million of estimated discrete tax benefits that are included in the GAAP estimated annual effective tax rate.

Conference Call

Tyler Technologies will hold a conference call on Wednesday, February 10, 2021 at 9:00 a.m. EST to discuss the company's results. The company is offering participants the opportunity to register in advance for the conference through the following link: http://dpregister.com/sreg/10151750/e15a0630ce. Registered participants will receive an email with a calendar reminder and dial-in number and PIN that will allow them to listen to the call live.

Participants who do not wish to pre-register for the call may dial in using 844-861-5506 (U.S. callers) or 412-317-6587 (international callers) or 866-450-4696 (Canada callers) and ask for the "Tyler Technologies" call. A replay will be available two hours after completion of the call through February 17, 2021. To access the replay, please dial 877-344-7529 (U.S. callers), 412-317-0088 (international callers) and 855-669-9658 (Canada callers) and reference passcode 10151750.

The live webcast and archived replay can also be accessed at https://tylertech.irpass.com/Presentations.

About Tyler Technologies, Inc.

Tyler Technologies (NYSE: TYL) provides integrated software and technology services to the public sector. Tyler's end-to-end solutions empower local, state, and federal government entities to operate more efficiently and connect more transparently with their constituents and with each other. By connecting data and processes across disparate systems, Tyler's solutions are transforming how clients gain actionable insights that solve problems in their communities. Tyler has more than 27,000 successful installations across more than 11,000 sites, with clients in all 50 states, Canada, the Caribbean, Australia, and other international locations. Tyler has been named to Government Technology's GovTech 100 list five times and has been recognized three times on Forbes' "Most Innovative Growth Companies" list. More information about Tyler Technologies, an S&P 500 company headquartered in Plano, Texas, can be found at tylertech.com.

Non-GAAP Financial Measures

Tyler Technologies has provided in this press release financial measures that have not been prepared in accordance with generally accepted accounting principles (GAAP) and are therefore considered non-GAAP financial measures. This information includes non-GAAP revenues, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP earnings per diluted share, EBITDA, adjusted EBITDA, and free cash flow. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating Tyler's ongoing operational performance because they provide additional insight in comparing results from period to period. Tyler believes the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures. Non-GAAP financial measures discussed above exclude write-downs of acquisition-related deferred revenue and acquired subleases, share-based compensation expense, employer portion of payroll taxes on employee stock transactions, expenses associated with amortization of intangibles arising from business combinations, acquisition-related expenses, and incremental costs associated with COVID-19.

Tyler currently uses a non-GAAP tax rate of 24%. This rate is based on Tyler's estimated annual GAAP income tax rate forecast, adjusted to account for items excluded from GAAP income in calculating Tyler's non-GAAP income, as well as significant non-recurring tax adjustments. The non-GAAP tax rate used in future periods will be reviewed periodically to determine whether it remains appropriate in consideration of factors including Tyler's periodic annual effective tax rate calculated in accordance with GAAP, changes resulting from tax legislation, changes in the geographic mix of revenues and expenses, and other factors deemed significant. Due to differences in tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to Tyler's estimated annual tax rate as described above, the estimated tax rate on non-GAAP income may differ from the GAAP tax rate and from Tyler's actual tax liabilities.

Non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial information prepared in accordance with GAAP. The non-GAAP measures used by Tyler Technologies may be different from non-GAAP measures used by other companies. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, which has been provided in the financial statement tables included below in this press release.

Forward-looking Statements

This document contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical in nature and typically address future or anticipated events, trends, expectations or beliefs with respect to our financial condition, results of operations or business. Forward-looking statements often contain words such as "believes," "expects," "anticipates," "foresees," "forecasts," "estimates," "plans," "intends," "continues," "may," "will," "should," "projects," "might," "could" or other similar words or phrases. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. We believe there is a reasonable basis for our forward-looking statements, but they are inherently subject to risks and uncertainties and actual results could differ materially from the expectations and beliefs reflected in the forward-looking statements. We presently consider the following to be among the important factors that could cause actual results to differ materially from our expectations and beliefs: (1) the effects of the COVID-19 pandemic, including its potential effects on the economic environment, our customers and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic; (2) changes in the budgets or regulatory environments of our clients, primarily local and state governments, that could negatively impact information technology spending; (3) disruption to our business and harm to our competitive position resulting from cyber-attacks and security vulnerabilities; (4) our ability to protect client information from security breaches and provide uninterrupted operations of data centers; (5) our ability to achieve growth or operational synergies through the integration of acquired businesses, while avoiding unanticipated costs and disruptions to existing operations; (6) material portions of our business require the Internet infrastructure to be adequately maintained; (7) our ability to achieve our financial forecasts due to various factors, including project delays by our clients, reductions in transaction size, fewer transactions, delays in delivery of new products or releases or a decline in our renewal rates for service agreements; (8) general economic, political and market conditions; (9) technological and market risks associated with the development of new products or services or of new versions of existing or acquired products or services; (10) competition in the industry in which we conduct business and the impact of competition on pricing, client retention and pressure for new products or services; (11) the ability to attract and retain qualified personnel and dealing with the loss or retirement of key members of management or other key personnel; and (12) costs of compliance and any failure to comply with government and stock exchange regulations. These factors and other risks that affect our business are described in our filings with the Securities and Exchange Commission, including the detailed "Risk Factors" contained in our most recent annual report on Form 10-K and quarterly report on Form 10-Q. We expressly disclaim any obligation to publicly update or revise our forward-looking statements.

(Comparative results follow)

 

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended
December 31,

 

Twelve Months Ended
December 31,

 

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

 

Software licenses and royalties

 

$

17,465

 

 

$

32,358

 

 

$

73,164

 

 

$

100,205

 

Subscriptions

 

93,997

 

 

80,330

 

 

350,648

 

 

296,352

 

Software services

 

42,676

 

 

52,220

 

 

186,409

 

 

213,061

 

Maintenance

 

118,409

 

 

113,644

 

 

467,513

 

 

430,318

 

Appraisal services

 

5,274

 

 

6,024

 

 

21,127

 

 

23,479

 

Hardware and other

 

5,464

 

 

4,261

 

 

17,802

 

 

23,012

 

Total revenues

 

283,285

 

 

288,837

 

 

1,116,663

 

 

1,086,427

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software licenses and royalties

 

292

 

 

1,258

 

 

3,339

 

 

3,938

 

Acquired software

 

7,964

 

 

7,997

 

 

31,962

 

 

30,642

 

Software services, maintenance and subscriptions

 

128,557

 

 

130,674

 

 

510,504

 

 

502,138

 

Appraisal services

 

4,150

 

 

4,031

 

 

15,945

 

 

15,337

 

Hardware and other

 

3,653

 

 

2,602

 

 

12,401

 

 

17,472

 

Total cost of revenues

 

144,616

 

 

146,562

 

 

574,151

 

 

569,527

 

 

 

 

 

 

 

 

 

 

Gross profit

 

138,669

 

 

142,275

 

 

542,512

 

 

516,900

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

62,736

 

 

70,265

 

 

259,561

 

 

257,746

 

Research and development expense

 

22,411

 

 

21,170

 

 

88,363

 

 

81,342

 

Amortization of customer and trade name intangibles

 

5,486

 

 

5,683

 

 

21,662

 

 

21,445

 

Operating income

 

48,036

 

 

45,157

 

 

172,926

 

 

156,367

 

Other income, net

 

376

 

 

2,633

 

 

2,116

 

 

3,471

 

Income before income taxes

 

48,412

 

 

47,790

 

 

175,042

 

 

159,838

 

Income tax provision

 

(5,682)

 

 

1,000

 

 

(19,778)

 

 

13,311

 

Net income

 

$

54,094

 

 

$

46,790

 

 

$

194,820

 

 

$

146,527

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

Basic

 

$

1.34

 

 

$

1.20

 

 

$

4.87

 

 

$

3.79

 

Diluted

 

$

1.29

 

 

$

1.15

 

 

$

4.69

 

 

$

3.65

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

40,404

 

 

39,076

 

 

40,035

 

 

38,640

 

Diluted

 

41,925

 

 

40,736

 

 

41,526

 

 

40,105

 

 

TYLER TECHNOLOGIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended December
31,

 

Twelve Months Ended December
31,

 

 

2020

 

2019

 

2020

 

2019

Reconciliation of non-GAAP total revenues

 

 

 

 

 

 

 

 

GAAP total revenues

 

$

283,285

 

 

$

288,837

 

 

$

1,116,663

 

 

$

1,086,427

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Write-downs and adjustments to acquisition-related deferred revenue

 

45

 

 

(1,495)

 

 

478

 

 

4,557

 

Amortization of acquired subleases

 

78

 

 

83

 

 

313

 

 

372

 

Non-GAAP total revenues

 

$

283,408

 

 

$

287,425

 

 

$

1,117,454

 

 

$

1,091,356

 

 

 

 

 

 

 

 

 

 

Reconciliation of non-GAAP gross profit and margin

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

138,669

 

 

$

142,275

 

 

$

542,512

 

 

$

516,900

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Write-downs and adjustments to acquisition-related deferred revenue

 

45

 

 

(1,495)

 

 

478

 

 

4,557

 

Amortization of acquired leases

 

78

 

 

83

 

 

313

 

 

372

 

Share-based compensation expense included in cost of revenues

4,949

 

 

3,836

 

 

18,125

 

 

15,002

 

Amortization of acquired software

 

7,964

 

 

7,997

 

 

31,962

 

 

30,642

 

Non-GAAP gross profit

 

$

151,705

 

 

$

152,696

 

 

$

593,390

 

 

$

567,473

 

GAAP gross margin

 

49.0

%

 

49.3

%

 

48.6

%

 

47.6

%

Non-GAAP gross margin

 

53.5

%

 

53.1

%

 

53.1

%

 

52.0

%

 

 

 

 

 

 

 

 

 

Reconciliation of non-GAAP operating income and margin

 

 

 

 

 

 

 

 

GAAP operating income

 

$

48,036

 

 

$

45,157

 

 

$

172,926

 

 

$

156,367

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Write-downs of acquisition-related deferred revenue

 

45

 

 

(1,495)

 

 

478

 

 

4,557

 

Amortization of acquired leases

 

78

 

 

83

 

 

313

 

 

372

 

Share-based compensation expense

 

13,253

 

 

15,598

 

 

67,365

 

 

59,967

 

Employer portion of payroll tax related to employee stock transactions

703

 

 

693

 

 

3,294

 

 

1,745

 

Acquisition related costs

 

-

 

 

197

 

 

-

 

 

1,142

 

COVID-19 incremental costs

 

810

 

 

-

 

 

1,537

 

 

-

 

Amortization of acquired software

 

7,964

 

 

7,997

 

 

31,962

 

 

30,642

 

Amortization of customer and trade name intangibles

 

5,486

 

 

5,683

 

 

21,662

 

 

21,445

 

Non-GAAP adjustments subtotal

 

28,339

 

 

28,756

 

 

$

126,611

 

 

$

119,870

 

Non-GAAP operating income

 

$

76,375

 

 

$

73,913

 

 

$

299,537

 

 

$

276,237

 

GAAP operating margin

 

17.0

%

 

15.6

%

 

15.5

%

 

14.4

%

Non-GAAP operating margin

 

26.9

%

 

25.7

%

 

26.8

%

 

25.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TYLER TECHNOLOGIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December
31,

 

Twelve Months Ended December
31,

 

 

2020

 

2019

 

2020

 

2019

Reconciliation of non-GAAP net income and earnings per share

 

 

 

 

 

 

 

 

GAAP net income

 

$

54,094

 

 

$

46,790

 

 

$

194,820

 

 

$

146,527

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Total non-GAAP adjustments to operating income

 

28,339

 

 

28,756

 

 

126,611

 

 

119,870

 

Tax impact related to non-GAAP adjustments

 

(24,102)

 

 

(17,371)

 

 

(92,175)

 

 

(53,819)

 

Non-GAAP net income

 

$

58,331

 

 

$

58,175

 

 

$

229,256

 

 

$

212,578

 

GAAP earnings per diluted share

 

$

1.29

 

 

$

1.15

 

 

$

4.69

 

 

$

3.65

 

Non-GAAP earnings per diluted share

 

$

1.39

 

 

$

1.43

 

 

$

5.52

 

 

$

5.30

 

 

 

 

 

 

 

 

 

 

Detail of share-based compensation expense

 

 

 

 

 

 

 

 

Cost of software services, maintenance and subscriptions

 

$

4,949

 

 

$

3,836

 

 

$

18,125

 

 

$

15,002

 

Selling, general and administrative expenses

 

8,304

 

 

11,762

 

 

49,240

 

 

44,965

 

Total share-based compensation expense

 

$

13,253

 

 

$

15,598

 

 

$

67,365

 

 

$

59,967

 

Reconciliation of EBITDA and adjusted EBITDA

 

 

 

 

 

 

 

 

GAAP net income

 

$

54,094

 

 

$

46,790

 

 

$

194,820

 

 

$

146,527

 

Amortization of customer and trade name intangibles

 

5,486

 

 

5,683

 

 

21,662

 

 

21,445

 

Depreciation and amortization included in cost of revenues, SG&A and other expenses

 

15,068

 

 

14,260

 

 

59,339

 

 

54,899

 

Interest expense included in other income, net

 

154

 

 

155

 

 

610

 

 

1,564

 

Income tax (benefit) provision

 

(5,682)

 

 

1,000

 

 

(19,778)

 

 

13,311

 

EBITDA

 

$

69,120

 

 

$

67,888

 

 

$

256,653

 

 

$

237,746

 

Write-downs and adjustments to acquisition-related deferred revenue

 

45

 

 

(1,495)

 

 

478

 

 

4,557

 

Share-based compensation expense

 

13,253

 

 

15,598

 

 

67,365

 

 

59,967

 

Acquisition related costs

 

-

 

 

197

 

 

-

 

 

1,142

 

COVID-19 incremental costs

 

810

 

 

-

 

 

1,537

 

 

-

 

Adjusted EBITDA

 

$

83,228

 

 

$

82,188

 

 

$

326,033

 

 

$

303,412

 

TYLER TECHNOLOGIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share data)

(Unaudited)

 

 

Three Months Ended December
31,

 

Twelve Months Ended December
31,

 

 

2020

 

2019

 

2020

 

2019

Reconciliation of free cash flow

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

88,761

 

 

$

76,193

 

 

$

355,089

 

 

$

254,720

 

Less: additions to property and equipment

 

(3,626)

 

 

(8,403)

 

 

(22,690)

 

 

(37,236)

 

Less: capitalized software development costs

 

(1,460)

 

 

(1,264)

 

 

(5,776)

 

 

(4,804)

 

Free cash flow

 

$

83,675

 

 

$

66,526

 

 

$

326,623

 

 

$

212,680

 

 

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

 

 

 

December 31, 2020

 

December 31, 2019

ASSETS

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

603,623

 

 

$

232,682

 

Accounts receivable, net

 

382,319

 

 

374,089

 

Current investments and other assets

 

105,530

 

 

66,444

 

Income tax receivable

 

21,598

 

 

6,482

 

Total current assets

 

1,113,070

 

 

679,697

 

 

 

 

 

 

Accounts receivable, long-term portion

 

21,417

 

 

22,432

 

Operating lease right-of-use assets

 

18,734

 

 

18,992

 

Property and equipment, net

 

168,004

 

 

171,861

 

 

 

 

 

 

Other assets:

 

 

 

 

Goodwill

 

838,428

 

 

840,117

 

Other intangibles, net

 

331,189

 

 

378,914

 

Non-current investments

 

82,640

 

 

42,235

 

Other non-current assets

 

33,792

 

 

37,366

 

 

 

 

 

 

Total assets

 

$

2,607,274

 

 

$

2,191,614

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued liabilities

 

$

97,095

 

 

$

90,211

 

Operating lease liabilities

 

5,904

 

 

6,387

 

Deferred revenue

 

461,278

 

 

412,495

 

Total current liabilities

 

564,277

 

 

509,093

 

 

 

 

 

 

Revolving line of credit

 

-

 

 

-

 

Deferred revenue, long-term

 

100

 

 

199

 

Deferred income taxes

 

40,507

 

 

48,442

 

Operating lease liabilities, long-term

 

16,279

 

 

16,822

 

Shareholders' equity

 

1,986,111

 

 

1,617,058

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

2,607,274

 

 

$

2,191,614

 

 

 

 

 

 

 

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

 

 

 

Three Months Ended
December 31,

 

Twelve Months Ended
December 31,

 

 

2020

 

2019

 

2020

 

2019

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

54,094

 

 

$

46,790

 

 

$

194,820

 

 

$

146,527

 

Adjustments to reconcile net income to cash provided by operations:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

20,911

 

 

20,125

 

 

81,657

 

 

76,672

 

Share-based compensation expense

 

13,253

 

 

15,598

 

 

67,365

 

 

59,967

 

Provision for losses - accounts receivable

 

3,517

 

 

1,636

 

 

3,517

 

 

1,636

 

Operating lease right-of-use assets - non cash

 

1,549

 

 

1,418

 

 

5,782

 

 

5,397

 

Deferred income tax (benefit) expense

 

(5,478)

 

 

4,241

 

 

(7,936)

 

 

(6,088)

 

Changes in operating assets and liabilities, exclusive of effects of acquired companies

 

915

 

 

(13,615)

 

 

9,884

 

 

(29,391)

 

Net cash provided by operating activities

 

88,761

 

 

76,193

 

 

355,089

 

 

254,720

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Additions to property and equipment

 

(3,626)

 

 

(8,403)

 

 

(22,690)

 

 

(37,236)

 

Purchase of marketable security investments

 

(45,289)

 

 

(27,420)

 

 

(156,618)

 

 

(54,742)

 

Proceeds from marketable security investments

 

20,948

 

 

13,942

 

 

82,742

 

 

70,796

 

Purchase of equity investment of common shares

 

-

 

 

-

 

 

(10,000)

 

 

-

 

Proceeds from the sale of equity investment of preferred shares

 

-

 

 

-

 

 

15,000

 

 

-

 

Capitalized software development costs

 

(1,460)

 

 

(1,264)

 

 

(5,776)

 

 

(4,804)

 

Cost of acquisitions, net of cash acquired

 

(1,031)

 

 

(18,864)

 

 

(1,292)

 

 

(218,734)

 

Decrease (increase) in other

 

301

 

 

198

 

 

314

 

 

(295)

 

Net cash used by investing activities

 

(30,157)

 

 

(41,811)

 

 

(98,320)

 

 

(245,015)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Decrease in net borrowings on revolving line of credit

 

-

 

 

-

 

 

-

 

 

-

 

Purchase of treasury shares

 

-

 

 

-

 

 

(15,484)

 

 

(17,786)

 

Payment of contingent consideration

 

-

 

 

-

 

 

(5,619)

 

 

-

 

Proceeds from exercise of stock options

 

23,631

 

 

34,613

 

 

124,363

 

 

96,908

 

Contributions from employee stock purchase plan

 

2,703

 

 

2,249

 

 

10,912

 

 

9,576

 

Net cash provided by financing activities

 

26,334

 

 

36,862

 

 

114,172

 

 

88,698

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

84,938

 

 

71,244

 

 

370,941

 

 

98,403

 

Cash and cash equivalents at beginning of period

 

518,685

 

 

161,438

 

 

232,682

 

 

134,279

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

$

603,623

 

 

$

232,682

 

 

$

603,623

 

 

$

232,682

 

 

Brian K. Miller
Executive Vice President & CFO
Tyler Technologies, Inc.
972-713-3720
brian.miller@tylertech.com

Feb 10, 2021

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