Tyler Technologies(US:TYL)2021-10-28 20:36Financial Data and Key Metrics Changes - Total revenues grew 60.9% year-over-year, with organic growth of 7.6% [6][28] - Non-GAAP revenues increased by 61.1% [28] - Non-GAAP operating margin declined by 330 basis points to 25.3% [10] - Free cash flow reached a record high of $192.8 million [36] - Annualized non-GAAP total recurring revenue (ARR) was approximately $1.5 billion, up 79.2% [33] Business Line Data and Key Metrics Changes - Subscription revenues surged by 183.3%, with a robust growth of 23.9% excluding NIC revenues [9][29] - Software license revenues rose by 13.7% [28] - Bookings reached a record high of approximately $601 million, more than double the previous year [11][35] - NIC's core revenues grew by 5% in the quarter [8][63] Market Data and Key Metrics Changes - Backlog at the end of the quarter was $1.77 billion, up 14.3% [34] - Transaction-based revenues, including NIC portal and payment processing, increased more than six-fold from last year [32] - E-filing revenues reached a new high of $17.4 million, up 15% [32] Company Strategy and Development Direction - The company is focused on integrating NIC and achieving strategic initiatives, with joint sales efforts showing early success [41][46] - The acquisition of VendEngine and Arx enhances the company's offerings in the corrections and public safety markets [24][25] - The company is well-positioned to leverage federal stimulus funding to address budget pressures faced by clients [49][112] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the public sector market activity, with proposals and sales demonstrations significantly up from 2020 [47] - The company expects to see continued growth in subscription revenues, with a shift towards a cloud-first approach [73][79] - Management anticipates that COVID-related revenues will wind down in the first half of 2022, but the core business remains strong [39][63] Other Important Information - The company completed acquisitions of VendEngine and Arx, which are expected to strengthen its justice and public safety solutions [24][25] - The IRS contract for digital payment processing was canceled, with no expected revenue in 2022 [21][89] Q&A Session Summary Question: Insights on stimulus funding and new sales activities - Management noted that several deals are being spurred by federal stimulus spending, particularly in the enterprise sector [56][60] Question: Contribution of NIC business to guidance - The guidance reflects a midpoint of around $1.224 billion in revenues, with NIC's COVID-related revenues expected to be about $72 million for the year [61][63] Question: Bookings trends and deal cadence - Management indicated that bookings included both pent-up demand and a return to normalized deal cadence, with significant large deals contributing [67][70] Question: Maintenance revenue trends - Maintenance revenue was down slightly, but conversions to SaaS are increasing, which is expected to drive future growth [76][79] Question: Outlook for 2022 and focus areas - Management is focused on harmonizing technology and optimizing products post-acquisition, with no immediate plans for large new acquisitions [120]