Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $595.9 million, representing a growth of 9.7% year-over-year [11] - Subscriptions revenue increased by 15.5%, with SaaS revenues growing 20% to $199.8 million [11] - Transaction revenues grew 11.5% to $201.3 million, driven by higher transaction volumes and increased adoption of new services [11] - Non-GAAP operating margin expanded to 26.6%, up 120 basis points from the previous year [14] - Total annualized recurring revenue was approximately $2 billion, up 10.7% [13] Business Line Data and Key Metrics Changes - SaaS bookings reached a new quarterly high, up 5% sequentially and 5.8% year-over-year [12] - Annualized recurring revenue from new SaaS deals and flips signed this quarter was approximately $30.8 million, up 8.5% sequentially [13] - The company continues to see strong performance in public safety, with significant contracts signed during the quarter [9][17] Market Data and Key Metrics Changes - The public sector demand remains stable, with no significant impact from recent government initiatives or shutdowns [6] - The company is experiencing a resilient budget environment, with increased allocations towards technology investments [7] Company Strategy and Development Direction - The company is focused on completing its cloud transition, leveraging its large client base, growing its payments business, and expanding into new markets [7] - AI innovation is a key part of the strategy, enhancing client experiences and creating upsell opportunities [8] - The company aims to lead the public sector's digital transformation through enhanced cloud capabilities and AI modernization [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sustained growth through competitive strengths and strategic initiatives [17] - The company anticipates SaaS revenue growth of approximately 20% for 2026, supported by a robust pipeline and ongoing client demand [15][29] - Management noted that the historical capital allocation priorities remain unchanged, focusing on internal investments, M&A, and share repurchases [18] Other Important Information - The company has closed two acquisitions in 2025 and has an active M&A pipeline [18] - The balance sheet remains healthy, with over $1 billion in cash and short-term investments [17] Q&A Session Summary Question: Can you help us bridge the decline in net new annual SaaS bookings? - Management explained that the decline is due to tough comparisons from the previous year and emphasized confidence in achieving 20% SaaS revenue growth for next year based on various factors including new bookings and renewals [26][29] Question: How will the Texas payments contract wind-down impact transaction revenue? - Management indicated that revenues from Texas are expected to be in the $39 to $40 million range for the year, with some carryover into next year, while the California parks deal is ramping up [41][42] Question: What is the growth opportunity for newer products like emergency response? - Management highlighted significant growth potential in the corrections and public safety sectors, leveraging existing relationships and cross-sell opportunities [75][76] Question: How is the company addressing AI functionality pricing? - Management discussed the importance of demonstrating ROI to clients and indicated that pricing strategies may evolve as AI features are integrated into existing products [53][56] Question: What is the outlook for flips and the SaaS install base? - Management noted that the trajectory for flips is expected to continue upward, with a focus on increasing the average size of flips and enhancing cross-sell opportunities [91][92]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $595.9 million, representing a growth of 9.7% year-over-year [10] - Subscriptions revenue increased by 15.5%, with SaaS revenues growing 20% to $199.8 million [10] - Transaction revenues grew 11.5% to $201.3 million, driven by higher transaction volumes and increased adoption of new services [10] - Non-GAAP operating margin expanded to 26.6%, up 120 basis points from the previous year [13] - Total annualized recurring revenue was approximately $2 billion, up 10.7% [12] Business Line Data and Key Metrics Changes - SaaS bookings reached a new quarterly high, up 5% sequentially and 5.8% year-over-year [11] - Total annualized recurring revenue from new SaaS deals and flips signed in Q3 was approximately $30.8 million, up 8.5% sequentially [11] - ARR from flips rose 64%, while new SaaS ARR increased by 39% [11] Market Data and Key Metrics Changes - The company continues to operate in a resilient budget environment, with allocations increasingly directed towards technology investments [7] - Significant contracts were signed in the public safety market, including a statewide contract with the Colorado Department of Corrections expected to generate approximately $2 million in transaction-based ARR [9] Company Strategy and Development Direction - The company is focused on completing its cloud transition, leveraging its large client base, growing its payments business, and expanding into new markets [7] - AI innovation is being emphasized to enhance cloud capabilities and improve client experiences [8] - The company is actively pursuing M&A opportunities to complement its existing core business [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sustained growth through competitive strengths and strategic initiatives [16] - The company expects SaaS revenues to grow approximately 20% in 2026, supported by a robust pipeline of business [14][66] - Management noted that the public sector demand remains strong, with no significant impact from recent government initiatives [6] Other Important Information - The company has a healthy balance sheet with over $1 billion in cash and short-term investments [16] - The company repurchased approximately 300,000 shares in Q3 to offset potential dilution from convertible debt [17] Q&A Session Summary Question: Can you help us bridge the decline in net new annual SaaS bookings? - Management indicated that SaaS revenue growth is built on new bookings, renewals, and price increases, with good visibility into these factors [26][28] Question: What should we anticipate from organic top-line contributions for fiscal 2026? - Management expects a modest contribution from M&A, with a focus on strengthening the balance sheet and being proactive in future deals [32] Question: How is the Texas payments contract wind-down impacting transaction revenue? - The Texas contract is expected to generate $39 million-$40 million this year, with some revenue carrying over into next year [41] Question: What is the growth opportunity for newer products like emergency response? - Management highlighted significant growth potential in corrections and emergency response services, leveraging existing client relationships [71] Question: How is the company envisioning pricing for AI functionality? - Management indicated that pricing for AI will be tied to proven ROI, with a focus on enhancing competitiveness and bundling products [51][52]