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Tyler Technologies Reports Earnings for Second Quarter 2021

Total revenues grew 49% with the addition of NIC; organic revenues grew 12%

PLANO, Texas - Tyler Technologies, Inc. (NYSE: TYL) today announced financial results for the second quarter ended June 30, 2021.

Second Quarter 2021 Financial Highlights:

  • On April 21, 2021, Tyler completed the acquisition of NIC Inc. for approximately $2.3 billion in cash. NIC is a leading provider of digital government solutions and payments processing that serves more than 7,100 federal, state, and local government agencies across the nation. In connection with the acquisition, in March, Tyler completed a $600 million offering of 0.25% convertible senior notes due 2026, and in April, entered into a new $1.4 billion senior unsecured credit facility that includes $900 million of three and five-year term loans, and a new $500 million five-year revolving credit agreement.
  • Total revenues were $404.1 million, up 49.1% from $271.1 million for the second quarter of 2020. On an organic basis, total revenues grew 12.4%. Non-GAAP total revenues were $405.4 million, up 49.4% from $271.3 million for the second quarter of 2020. On an organic basis, non-GAAP total revenues grew 12.3%.
  • Recurring revenues from maintenance and subscriptions were $319.2 million, up 57.7% from $202.4 million for the second quarter of 2020, and comprised 79.0% of second quarter 2021 revenue, up from 74.7% for the second quarter of 2020.
  • Subscriptions revenue and software services revenues included a total of $15.3 million from NIC's TourHealth and COVID-related initiatives that are expected to wind down in the second half of the year.
  • Operating income was $38.3 million, down 7.4% from $41.3 million for the second quarter of 2020. Non-GAAP operating income was $107.4 million, up 43.9% from $74.6 million for the second quarter of 2020.
  • Net income was $25.5 million, or $0.61 per diluted share, down 52.6% compared to $53.9 million, or $1.30 per diluted share, for the second quarter of 2020. Non-GAAP net income was $77.2 million, or $1.83 per diluted share, up 35.3% compared to $57.1 million, or $1.38 per diluted share, for the second quarter of 2020.
  • Cash flows from operations were negative $20.3 million compared to $39.8 million for the second quarter of 2020. Free cash flow was negative $33.5 million compared to $31.5 million for the second quarter of 2020.
  • Adjusted EBITDA was $114.7 million, up 42.1% compared to $80.7 million for the second quarter of 2020.
  • Software subscription arrangements comprised approximately 65% of the total new software contract value in the second quarter, compared to approximately 43% in the second quarter of 2020.
  • Subscription bookings in the second quarter added $15.0 million in annual recurring revenue.
  • Annualized non-GAAP recurring revenues were $1.282 billion, up 58.2% from $810.2 million for the second quarter of 2020.
  • Total backlog was $1.63 billion, up 5.6% from $1.54 billion at June 30, 2020.
  • Tyler repurchased 32,600 shares of its common stock during the second quarter at an average price of $398.02.

"We delivered very strong second quarter results, exceeding expectations for both core Tyler and NIC operations," said Lynn Moore, Tyler's president and chief executive officer. "With the inclusion of NIC, total revenues grew 49.1%, led by subscriptions revenue growth of 133.0%. On an organic basis, revenue growth accelerated to 12.4%, and NIC's full-quarter core revenues, excluding TourHealth and COVID-related initiatives, grew 23.5%.

"As expected, our non-GAAP operating margin declined 100 basis points to 26.5%, as some costs and lower-margin revenues that declined in 2020 due to the COVID pandemic began to return, along with the impact of the continuation of NIC's lower-margin COVID-related revenues. Cash flows from operations and free cash flow were impacted this quarter by acquisition-related costs and the timing of cash collections by NIC on behalf of government agencies prior to the close of the acquisition and remittances to agencies post acquisition.

"We are very encouraged by the bookings performance for the quarter, as market activity continues to rebound, with proposals and sales activities trending back to pre-COVID levels. Bookings in the second quarter were approximately $464 million, up 50.1% over the second quarter of 2020, including NIC's post-acquisition activity. Excluding NIC, bookings rose 17.5%.

"The integration of NIC, as well as ReadySub and DataSpec, is well underway, and we are pleased with our momentum. Our teams are enthusiastic about the growth opportunities ahead for our combined organization, and we remain on track with our strategic initiatives, including our investments in cloud optimization. We look forward to reporting on our continued progress in the second half of the year," concluded Moore.

Tyler also announced that its Board of Directors has formally appointed Glenn A. Carter as Lead Independent Director, effective May 11, 2021. Mr. Carter succeeds Donald R. Brattain, who retired from the Tyler Board in May in that role. Mr. Carter, who joined the Board in 2014, will continue to serve as Chair of the Board's Nominating and Governance Committee and as a member of the Compensation Committee.

Guidance for 2021

As of July 28, 2021, Tyler Technologies is providing the following guidance for the full year 2021:

  • GAAP total revenues are expected to be in the range of $1.532 billion to $1.557 billion.
  • Non-GAAP total revenues are expected to be in the range of $1.535 billion to $1.560 billion.
  • Total revenues are expected to include approximately $32 million of COVID-related revenues from NIC's TourHealth and pandemic unemployment services that are not expected to recur in future years.
  • GAAP diluted earnings per share are expected to be in the range of $3.68 to $3.81 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 $6.70 to $6.80.
  • Interest expense is expected to be approximately $23 million, including approximately $11 million of amortization of debt discounts and issuance costs.
  • Pretax non-cash, share-based compensation expense is expected to be approximately $102 million.
  • Research and development expense is expected to be in the range of $94 million to $96 million.
  • Fully diluted shares for the year are expected to be in the range of 42.0 million to 42.5 million shares.
  • GAAP earnings per share assumes an estimated annual effective tax rate of approximately negative 2.0% after discrete tax items, including approximately $46 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 $48 million to $50 million, including approximately $10 million related to real estate and approximately $22 million of capitalized software development costs. Total depreciation and amortization expense is expected to be approximately $126 million, including approximately $89 million from amortization of acquisition intangibles.

GAAP to non-GAAP guidance reconciliation

Non-GAAP total revenues is derived from adding back the estimated full year impact of write-downs of acquisition-related deferred revenue of approximately $3 million. 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 $102 million, amortization of acquired software and intangible assets of approximately $89 million, and acquisition-related costs of approximately $25 million. Additionally, the non-GAAP tax rate of 24% is estimated periodically as described below under "Non-GAAP Financial Measures" and excludes approximately $46 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 Thursday, July 29, 2021, at 10:00 a.m. ET 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/10157774/e9dd5e4ab8. Registered participants will receive an email with a calendar reminder and a 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 August 5, 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 10157774.

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 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 June 30,

 

Six Months Ended June 30,

 

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

Software licenses and royalties

 

$

17,604

 

 

$

17,025

 

 

$

32,537

 

 

$

35,762

 

Subscriptions

 

199,558

 

 

85,638

 

 

302,037

 

 

167,361

 

Software services

 

53,337

 

 

43,654

 

 

100,977

 

 

95,787

 

Maintenance

 

119,621

 

 

116,760

 

 

238,733

 

 

231,125

 

Appraisal services

 

6,265

 

 

4,696

 

 

12,730

 

 

10,459

 

Hardware and other

 

7,690

 

 

3,318

 

 

11,863

 

 

7,138

 

Total revenues

 

404,075

 

 

271,091

 

 

698,877

 

 

547,632

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software licenses and royalties

 

1,368

 

 

1,130

 

 

2,604

 

 

1,870

 

Acquired software

 

11,823

 

 

8,006

 

 

19,787

 

 

16,033

 

Subscriptions, software services and maintenance

 

199,771

 

 

124,287

 

 

334,091

 

 

256,066

 

Appraisal services

 

4,429

 

 

3,976

 

 

9,046

 

 

8,361

 

Hardware and other

 

4,623

 

 

2,489

 

 

7,081

 

 

4,968

 

Total cost of revenues

 

222,014

 

 

139,888

 

 

372,609

 

 

287,298

 

 

 

 

 

 

 

 

 

 

Gross profit

 

182,061

 

 

131,203

 

 

326,268

 

 

260,334

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

108,922

 

 

62,521

 

 

187,696

 

 

130,006

 

Research and development expense

 

23,428

 

 

21,949

 

 

45,241

 

 

44,310

 

Amortization of customer and trade name intangibles

 

11,420

 

 

5,392

 

 

16,832

 

 

10,784

 

Operating income

 

38,291

 

 

41,341

 

 

76,499

 

 

75,234

 

Other (expense) income, net

 

(12,199)

 

 

470

 

 

(12,111)

 

 

1,460

 

Income before income taxes

 

26,092

 

 

41,811

 

 

64,388

 

 

76,694

 

Income tax provision (benefit)

 

562

 

 

(12,081)

 

 

1,882

 

 

(24,748)

 

Net income

 

$

25,530

 

 

$

53,892

 

 

$

62,506

 

 

$

101,442

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

Basic

 

$

0.63

 

 

$

1.35

 

 

$

1.53

 

 

$

2.54

 

Diluted

 

$

0.61

 

 

$

1.30

 

 

$

1.48

 

 

$

2.44

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

40,765

 

 

39,963

 

 

40,761

 

 

39,984

 

Diluted

 

42,094

 

 

41,416

 

 

42,148

 

 

41,532

 

TYLER TECHNOLOGIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2021

 

2020

 

2021

 

2020

Reconciliation of non-GAAP total revenues

 

 

 

 

 

 

 

 

GAAP total revenues

 

$

404,075

 

$

271,091

 

$

698,877

 

$

547,632

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add: Write-downs of acquisition-related deferred revenue

 

1,288

 

160

 

1,288

 

320

Add: Amortization of acquired leases

 

-

 

78

 

-

 

157

Non-GAAP total revenues

 

$

405,363

 

$

271,329

 

$

700,165

 

$

548,109

 

 

 

 

 

 

 

 

 

Reconciliation of non-GAAP gross profit and margin

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

182,061

 

$

131,203

 

$

326,268

 

$

260,334

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add: Write-downs of acquisition-related deferred revenue

 

1,288

 

160

 

1,288

 

320

Add: Amortization of acquired leases

 

-

 

78

 

-

 

157

Add: Share-based compensation expense included in cost of revenues

5,909

 

4,369

 

10,909

 

8,621

Add: Amortization of acquired software

 

11,823

 

8,006

 

19,787

 

16,033

Non-GAAP gross profit

 

$

201,081

 

$

143,816

 

$

358,252

 

$

285,465

GAAP gross margin

 

45.1

%

 

48.4

%

 

46.7

%

 

47.5

%

Non-GAAP gross margin

 

49.6

%

 

53.0

%

 

51.2

%

 

52.1

%

 

 

 

 

 

 

 

 

 

Reconciliation of non-GAAP operating income and margin

 

 

 

 

 

 

 

 

GAAP operating income

 

$

38,291

 

$

41,341

 

$

76,499

 

$

75,234

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add: Write-downs of acquisition-related deferred revenue

 

1,288

 

160

 

1,288

 

320

Add: Amortization of acquired leases

 

-

 

78

 

-

 

157

Add: Share-based compensation expense

 

25,175

 

18,386

 

50,899

 

35,688

Add: Employer portion of payroll tax related to employee stock transactions

393

 

1,259

 

1,160

 

2,457

Add: Acquisition related costs

 

19,017

 

-

 

19,830

 

-

Add: COVID-19 incremental costs

 

-

 

-

 

-

 

727

Add: Amortization of acquired software

 

11,823

 

8,006

 

19,787

 

16,033

Add: Amortization of customer and trade name intangibles

 

11,420

 

5,392

 

16,832

 

10,784

Non-GAAP adjustments subtotal

 

69,116

 

33,281

 

109,796

 

66,166

Non-GAAP operating income

 

$

107,407

 

$

74,622

 

$

186,295

 

$

141,400

GAAP operating margin

 

9.5

%

 

15.2

%

 

10.9

%

 

13.7

%

Non-GAAP operating margin

 

26.5

%

 

27.5

%

 

26.6

%

 

25.8

%

 

 

 

 

 

 

 

 

 

TYLER TECHNOLOGIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2021

 

2020

 

2021

 

2020

Reconciliation of non-GAAP net income and earnings per share

 

 

 

 

 

 

 

 

GAAP net income

 

$

25,530

 

$

53,892

 

$

62,506

 

$

101,442

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add: Total non-GAAP adjustments to operating income

 

69,116

 

33,281

 

109,796

 

66,166

Add: Acquired related cost in other income (expense), net

 

6,407

 

-

 

6,407

 

-

Less: Tax impact related to non-GAAP adjustments

 

(23,826)

 

(30,103)

 

(41,460)

 

(59,034)

Non-GAAP net income

 

$

77,227

 

$

57,070

 

$

137,249

 

$

108,574

GAAP earnings per diluted share

 

$

0.61

 

$

1.30

 

$

1.48

 

$

2.44

Non-GAAP earnings per diluted share

 

$

1.83

 

$

1.38

 

$

3.26

 

$

2.61

 

 

 

 

 

 

 

 

 

Detail of share-based compensation expense

 

 

 

 

 

 

 

 

Cost of subscriptions, software services and maintenance

 

$

5,909

 

$

4,369

 

$

10,909

 

$

8,621

Selling, general and administrative expenses

 

19,266

 

14,017

 

39,990

 

27,067

Total share-based compensation expense

 

$

25,175

 

$

18,386

 

$

50,899

 

$

35,688

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of EBITDA and adjusted EBITDA

 

 

 

 

 

 

 

 

GAAP net income

 

$

25,530

 

$

53,892

 

$

62,506

 

$

101,442

Amortization of customer and trade name intangibles

 

11,420

 

5,392

 

16,832

 

10,784

Depreciation and amortization included in

 

 

 

 

 

 

 

 

cost of revenues, SG&A and other expenses

 

19,248

 

14,800

 

34,178

 

29,349

Amortization of debt discounts and issuance costs included in other (expense) income, net

 

8,706

 

-

 

8,950

 

-

Interest expense included in other (expense) income, net

 

3,732

 

151

 

3,966

 

303

Income tax provision (benefit)

 

562

 

(12,081)

 

1,882

 

(24,748)

EBITDA

 

$

69,198

 

$

62,154

 

$

128,314

 

$

117,130

Write-downs of acquisition-related deferred revenue

 

1,288

 

160

 

1,288

 

320

Share-based compensation expense

 

25,175

 

18,386

 

50,899

 

35,688

Acquisition related costs

 

19,017

 

-

 

19,830

 

-

COVID-19 incremental costs

 

-

 

-

 

-

 

727

Adjusted EBITDA

 

$

114,678

 

$

80,700

 

$

200,331

 

$

153,865

 

 

 

 

 

 

 

 

 

TYLER TECHNOLOGIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2021

 

2020

 

2021

 

2020

Reconciliation of free cash flow

 

 

 

 

 

 

 

 

Net cash (used) provided by operating activities

 

$

(20,347)

 

 

$

39,814

 

 

$

51,356

 

 

$

96,520

 

Less: additions to property and equipment

 

(7,659)

 

 

(6,919)

 

 

(14,223)

 

 

(16,268)

 

Less: capitalized software development costs

 

(5,471)

 

 

(1,380)

 

 

(8,947)

 

 

(2,695)

 

Free cash flow

 

$

(33,477)

 

 

$

31,515

 

 

$

28,186

 

 

$

77,557

 

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

 

 

 

June 30, 2021

 

December 31, 2020

ASSETS

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

216,773

 

 

$

603,623

 

Accounts receivable, net

 

584,156

 

 

382,319

 

Current investments and other assets

 

107,595

 

 

105,530

 

Income tax receivable

 

20,404

 

 

21,598

 

Total current assets

 

928,928

 

 

1,113,070

 

 

 

 

 

 

Accounts receivable, long-term portion

 

15,744

 

 

21,417

 

Operating lease right-of-use assets

 

28,230

 

 

18,734

 

Property and equipment, net

 

177,712

 

 

168,004

 

 

 

 

 

 

Other assets:

 

 

 

 

Software development costs, net

 

17,179

 

 

9,121

 

Goodwill

 

2,309,434

 

 

838,428

 

Other intangibles, net

 

1,045,580

 

 

322,068

 

Non-current investments

 

79,057

 

 

82,640

 

Other non-current assets

 

39,139

 

 

33,792

 

 

 

 

 

 

Total assets

 

$

4,641,003

 

 

$

2,607,274

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued liabilities

 

$

241,631

 

 

$

97,095

 

Operating lease liabilities

 

9,666

 

 

5,904

 

Deferred revenue

 

484,482

 

 

461,278

 

Current portion of term loans

 

30,000

 

 

-

 

Total current liabilities

 

765,779

 

 

564,277

 

 

 

 

 

 

Revolving line of credit

 

65,000

 

 

-

 

Term loans

 

862,559

 

 

-

 

Convertible senior notes due 2026, net

 

591,906

 

 

-

 

Deferred revenue, long-term

 

68

 

 

100

 

Deferred income taxes

 

220,680

 

 

40,507

 

Operating lease liabilities, long-term

 

22,118

 

 

16,279

 

Other long-term liabilities

 

4,902

 

 

-

 

Shareholders' equity

 

2,107,991

 

 

1,986,111

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

4,641,003

 

 

$

2,607,274

 

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2021

 

2020

 

2021

 

2020

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

25,530

 

 

$

53,892

 

 

$

62,506

 

 

$

101,442

 

Adjustments to reconcile net income to cash (used)

 

 

 

 

 

 

 

 

provided by operations:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

39,876

 

 

20,285

 

 

60,976

 

 

40,270

 

Share-based compensation expense

 

25,175

 

 

18,386

 

 

50,899

 

 

35,688

 

Operating lease right-of-use assets expense

 

2,488

 

 

1,386

 

 

4,034

 

 

2,843

 

Deferred income tax benefit

 

(3,163)

 

 

(1,061)

 

 

(6,430)

 

 

(3,729)

 

Changes in operating assets and liabilities,

 

 

 

 

 

 

 

 

exclusive of effects of acquired companies

 

(110,253)

 

 

(53,074)

 

 

(120,629)

 

 

(79,994)

 

Net cash (used) provided by operating activities

 

(20,347)

 

 

39,814

 

 

51,356

 

 

96,520

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Additions to property and equipment

 

(7,659)

 

 

(6,919)

 

 

(14,223)

 

 

(16,268)

 

Purchase of marketable security investments

 

(15,299)

 

 

(52,476)

 

 

(68,054)

 

 

(79,747)

 

Proceeds from marketable security investments

 

56,364

 

 

21,783

 

 

91,395

 

 

40,020

 

Proceeds from the sale of investment of preferred shares

 

-

 

 

-

 

 

-

 

 

15,000

 

Purchase of investment of common shares

 

-

 

 

-

 

 

-

 

 

(10,000)

 

Investment in software

 

(5,471)

 

 

(1,380)

 

 

(8,947)

 

 

(2,695)

 

Cost of acquisitions, net of cash acquired

 

(1,986,853)

 

 

-

 

 

(1,998,902)

 

 

(261)

 

(Increase) decrease in other

 

(80)

 

 

(280)

 

 

39

 

 

(328)

 

Net cash used by investing activities

 

(1,958,998)

 

 

(39,272)

 

 

(1,998,692)

 

 

(54,279)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Increase in net borrowings on revolving line of credit

 

65,000

 

 

-

 

 

65,000

 

 

-

 

Proceeds from term loans

 

900,000

 

 

-

 

 

900,000

 

 

-

 

Proceeds from issuance of convertible senior notes

 

-

 

 

-

 

 

600,000

 

 

-

 

Payment of debt issuance costs

 

(21,107)

 

 

-

 

 

(27,127)

 

 

-

 

Purchase of treasury shares

 

(12,975)

 

 

-

 

 

(12,975)

 

 

(15,482)

 

Proceeds from exercise of stock options

 

11,286

 

 

46,101

 

 

29,388

 

 

92,337

 

Payment of contingent consideration

 

-

 

 

-

 

 

-

 

 

(5,619)

 

Contributions from employee stock purchase plan

 

3,162

 

 

2,708

 

 

6,200

 

 

5,177

 

Net cash provided by financing activities

 

945,366

 

 

48,809

 

 

1,560,486

 

 

76,413

 

 

 

 

 

 

 

 

 

 

Net (decrease) increase in cash and cash equivalents

 

(1,033,979)

 

 

49,351

 

 

(386,850)

 

 

118,654

 

Cash and cash equivalents at beginning of period

 

1,250,752

 

 

301,985

 

 

603,623

 

 

232,682

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

$

216,773

 

 

$

351,336

 

 

$

216,773

 

 

$

351,336

 

 

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

Jul 28, 2021

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