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Tyler Technologies Reports Earnings for Third Quarter 2020

Operating income grew double-digits; cash from operations reached record quarterly high

PLANO, Texas–(BUSINESS WIRE)–$TYL #BrianMillerTyler Technologies, Inc. (NYSE: TYL) today announced financial results for the third quarter ended September 30, 2020.

Third Quarter 2020 Financial Highlights:

  • Total revenues were $285.7 million, up 3.8% from $275.4 million for the third quarter of 2019. Organic revenue growth was 3.3%. Non-GAAP total revenues were $285.9 million, up 3.2% from $277.2 million for the third quarter of 2019. Non-GAAP organic revenue growth was 2.7%.
  • Recurring revenues from maintenance and subscriptions were $207.3 million, up 12.0% from $185.1 million for the third quarter of 2019, and comprised 72.5% of third quarter 2020 revenue.
  • Operating income was $49.7 million, up 24.0% from $40.1 million for the third quarter of 2019. Non-GAAP operating income was $81.8 million, up 15.2% from $71.0 million for the third quarter of 2019.
  • Net income was $39.3 million, or $0.94 per diluted share, down 2.7% compared to $40.4 million, or $1.00 per diluted share, for the third quarter of 2019. Non-GAAP net income was $62.4 million, or $1.50 per diluted share, up 14.8% compared to $54.3 million, or $1.35 per diluted share, for the third quarter of 2019.
  • Cash flows from operations were $169.8 million, up 30.5% compared to $130.1 million for the third quarter of 2019.
  • Adjusted EBITDA was $88.9 million, up 15.4% compared to $77.1 million for the third quarter of 2019.
  • Software subscription arrangements comprised approximately 47% of the total new software contract value in the third quarter, compared to approximately 51% in the third quarter of 2019.
  • Total bookings were $292 million, up 12.9% compared to the third quarter of 2019. Subscription bookings in the third quarter added $9.9 million in annual recurring revenue.
  • Total backlog was $1.55 billion, up 9.2% from $1.41 billion at September 30, 2019. Software-related backlog (excluding appraisal services) was $1.51 billion, up 9.5% from $1.38 billion at September 30, 2019.

“We are pleased with our third quarter results, particularly in light of the continuing impact of the COVID-19 pandemic, as we achieved double-digit growth in operating income and record highs for free cash flow and adjusted EBITDA,” said Lynn Moore, Tyler’s president and chief executive officer. “Revenues continued to be impacted by the COVID-19 pandemic. We returned to positive revenue growth in the third quarter, driven by strong recurring revenues with subscription revenues up 18.6%. Software license, professional services, and appraisal services revenues declined due to longer sales cycles, delays in projects, and the near elimination of billable travel revenue. We experienced an IT security incident in late September which also reduced services revenues in the quarter by an estimated $1.5 million.

“We continued to experience significant savings in operating expenses in the third quarter, in part driven by the successful deployment of more efficient service delivery and operating models. As a result, our operating margins expanded significantly, with our non-GAAP operating margin up 300 basis points to 28.6%, and our adjusted EBITDA rose to a new quarterly high. Cash flows from operations and free cash flow also reached record levels, growing 30.5% and 34.8%, respectively. Our balance sheet is stronger than ever, and we ended the quarter with $650 million in cash and investments and no outstanding debt.

“Bookings in the third quarter grew 12.9% and were particularly strong for our justice and public safety solutions. We signed significant contracts for our Odyssey® court case management solution with the Washington State Administrative Office of the Courts and Dallas County, Texas, that culminated extended sales processes, and public safety bookings more than doubled last year’s third quarter. We finished the quarter with a new record high backlog of $1.55 billion,” added Moore.

“As we continue to work through the challenges brought about by the COVID-19 pandemic and obtain a clearer understanding of the near-term impacts on our results, we have revised our guidance for the full year of 2020 to reflect higher earnings expectations. I’m extremely proud of how the entire Tyler team has risen to face the challenges of this year head-on, supporting our clients as well as each other. We remain confident in the fundamental strengths of the public sector market and in our ability to grow and invest in strategic initiatives in a difficult environment,” said Moore.

Guidance for 2020

As of September 30, 2020, Tyler Technologies is providing the following guidance for the full year 2020:

  • GAAP total revenues are expected to be in the range of $1.117 billion to $1.129 billion. Non-GAAP total revenues are expected to be in the range of $1.118 billion to $1.130 billion.
  • GAAP diluted earnings per share are expected to be in the range of $4.53 to $4.63 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 $5.48 to $5.58.
  • Pre-tax non-cash, share-based compensation expense is expected to be approximately $77 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 41.5 million to 42.0 million shares.
  • GAAP earnings per share assumes an estimated annual effective tax rate of approximately negative 12% after discrete tax items and includes approximately $65 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 $30 million to $31 million, including approximately $10 million related to real estate and approximately $6 million of capitalized software development costs. Total depreciation and amortization expense is expected to be approximately $81 million, including approximately $54 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 and amortization of acquired leases of approximately $1 million. Non-GAAP diluted earnings per share excludes the full year impact of non-cash share-based compensation expense and employer portion of payroll tax related to employee stock transactions of approximately $77 million, and amortization of acquired software and intangible assets of approximately $54 million. Additionally, the non-GAAP tax rate of 24% is estimated periodically as described below under “Non-GAAP Financial Measures” and excludes approximately $65 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, November 5, at 10:00 a.m. Eastern Time 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/10147974/d912e3b1c6. 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 November 12, 2020. 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 10147974.

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 26,000 successful installations across more than 10,000 sites, with clients in all 50 states, Canada, the Caribbean, Australia, and other international locations. Tyler was named to Forbes’ “Best Midsize Employers” list in 2019 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, and adjusted EBITDA. 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 September 30,

 

Nine Months Ended September 30,

 

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

 

Software licenses and royalties

 

$

19,937

 

 

$

25,379

 

 

$

55,699

 

 

 

$

67,847

 

Subscriptions

 

89,290

 

 

75,272

 

 

256,651

 

 

 

216,022

 

Software services

 

47,946

 

 

54,997

 

 

143,733

 

 

 

160,841

 

Maintenance

 

117,979

 

 

109,833

 

 

349,104

 

 

 

316,674

 

Appraisal services

 

5,394

 

 

6,008

 

 

15,853

 

 

 

17,455

 

Hardware and other

 

5,200

 

 

3,911

 

 

12,338

 

 

 

18,751

 

Total revenues

 

285,746

 

 

275,400

 

 

833,378

 

 

 

797,590

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software licenses and royalties

 

1,177

 

 

971

 

 

3,047

 

 

 

2,680

 

Acquired software

 

7,965

 

 

7,975

 

 

23,998

 

 

 

22,645

 

Subscriptions, software services and maintenance

 

125,881

 

 

128,545

 

 

381,947

 

 

 

371,464

 

Appraisal services

 

3,434

 

 

4,096

 

 

11,795

 

 

 

11,306

 

Hardware and other

 

3,780

 

 

3,096

 

 

8,748

 

 

 

14,870

 

Total cost of revenues

 

142,237

 

 

144,683

 

 

429,535

 

 

 

422,965

 

 

 

 

 

 

 

 

 

 

Gross profit

 

143,509

 

 

130,717

 

 

403,843

 

 

 

374,625

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

66,819

 

 

63,888

 

 

196,825

 

 

 

187,481

 

Research and development expense

 

21,642

 

 

21,130

 

 

65,952

 

 

 

60,172

 

Amortization of customer and trade name intangibles

 

5,392

 

 

5,646

 

 

16,176

 

 

 

15,762

 

Operating income

 

49,656

 

 

40,053

 

 

124,890

 

 

 

111,210

 

Other income, net

 

280

 

 

499

 

 

1,740

 

 

 

838

 

Income before income taxes

 

49,936

 

 

40,552

 

 

126,630

 

 

 

112,048

 

Income tax provision (benefit)

 

10,652

 

 

162

 

 

(14,096

)

 

 

12,311

 

Net income

 

$

39,284

 

 

$

40,390

 

 

$

140,726

 

 

 

$

99,737

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

Basic

 

$

0.98

 

 

$

1.04

 

 

$

3.52

 

 

 

$

2.58

 

Diluted

 

$

0.94

 

 

$

1.00

 

 

$

3.39

 

 

 

$

2.49

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

40,261

 

 

38,765

 

 

40,013

 

 

 

38,614

 

Diluted

 

41,606

 

 

40,280

 

 

41,493

 

 

 

40,015

 

 
 

TYLER TECHNOLOGIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2020

 

2019

 

2020

 

2019

Reconciliation of non-GAAP total revenues

 

 

 

 

 

 

 

 

GAAP total revenues

 

$

285,746

 

 

$

275,400

 

 

$

833,378

 

 

$

797,590

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add: Write-downs of acquisition-related deferred revenue

 

113

 

 

1,698

 

 

433

 

 

6,052

 

Add: Amortization of acquired leases

 

78

 

 

89

 

 

235

 

 

289

 

Non-GAAP total revenues

 

$

285,937

 

 

$

277,187

 

 

$

834,046

 

 

$

803,931

 

 

 

 

 

 

 

 

 

 

Reconciliation of non-GAAP gross profit and margin

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

143,509

 

 

$

130,717

 

 

$

403,843

 

 

$

374,625

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add: Write-downs of acquisition-related deferred revenue

 

113

 

 

1,698

 

 

433

 

 

6,052

 

Add: Amortization of acquired leases

 

78

 

 

89

 

 

235

 

 

289

 

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

4,555

 

 

3,612

 

 

13,176

 

 

11,166

 

Add: Amortization of acquired software

 

7,965

 

 

7,975

 

 

23,998

 

 

22,645

 

Non-GAAP gross profit

 

$

156,220

 

 

$

144,091

 

 

$

441,685

 

 

$

414,777

 

GAAP gross margin

 

50.2

%

 

 

47.5

%

 

 

48.5

%

 

 

47.0

%

Non-GAAP gross margin

 

 

54.6

%

 

 

52.0

%

 

 

53.0

%

 

 

51.6

%

 

 

 

 

 

 

 

 

 

Reconciliation of non-GAAP operating income and margin

 

 

 

 

 

 

 

 

GAAP operating income

 

$

49,656

 

 

$

40,053

 

 

$

124,890

 

 

$

111,210

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add: Write-downs of acquisition-related deferred revenue

 

113

 

 

1,698

 

 

433

 

 

6,052

 

Add: Amortization of acquired leases

 

78

 

 

89

 

 

235

 

 

289

 

Add: Share-based compensation expense

 

18,424

 

 

14,887

 

 

54,112

 

 

44,369

 

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

134

 

 

621

 

 

2,591

 

 

1,052

 

Add: Acquisition related costs

 

 

 

5

 

 

 

 

945

 

Add: COVID-19 incremental costs

 

 

 

 

 

727

 

 

 

Add: Amortization of acquired software

 

7,965

 

 

7,975

 

 

23,998

 

 

22,645

 

Add: Amortization of customer and trade name intangibles

 

5,392

 

 

5,646

 

 

16,176

 

 

15,762

 

Non-GAAP adjustments subtotal

 

32,106

 

 

30,921

 

 

98,272

 

 

91,114

 

Non-GAAP operating income

 

$

81,762

 

 

$

70,974

 

 

$

223,162

 

 

$

202,324

 

GAAP operating margin

 

 

17.4

%

 

 

14.5

%

 

 

15.0

%

 

 

13.9

%

Non-GAAP operating margin

 

 

28.6

%

 

 

25.6

%

 

 

26.8

%

 

 

25.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TYLER TECHNOLOGIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2020

 

2019

 

2020

 

2019

Reconciliation of non-GAAP net income and earnings per share

 

 

 

 

 

 

 

 

GAAP net income

 

$

39,284

 

 

$

40,390

 

 

$

140,726

 

 

$

99,737

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Add: Total non-GAAP adjustments to operating income

 

32,106

 

 

30,921

 

 

98,272

 

 

91,114

 

Less: Tax impact related to non-GAAP adjustments

 

(9,038

)

 

(16,992

)

 

(68,073

)

 

(36,448

)

Non-GAAP net income

 

$

62,352

 

 

$

54,319

 

 

$

170,925

 

 

$

154,403

 

GAAP earnings per diluted share

 

$

0.94

 

 

$

1.00

 

 

$

3.39

 

 

$

2.49

 

Non-GAAP earnings per diluted share

 

$

1.50

 

 

$

1.35

 

 

$

4.12

 

 

$

3.86

 

 

 

 

 

 

 

 

 

 

Detail of share-based compensation expense

 

 

 

 

 

 

 

 

Cost of subscriptions, software services and maintenance

 

$

4,555

 

 

$

3,612

 

 

$

13,176

 

 

$

11,166

 

Selling, general and administrative expenses

 

13,869

 

 

11,275

 

 

40,936

 

 

33,203

 

Total share-based compensation expense

 

$

18,424

 

 

$

14,887

 

 

$

54,112

 

 

$

44,369

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of EBITDA and adjusted EBITDA

 

 

 

 

 

 

 

 

GAAP net income

 

$

39,284

 

 

$

40,390

 

 

$

140,726

 

 

$

99,737

 

Amortization of customer and trade name intangibles

 

5,392

 

 

5,646

 

 

16,176

 

 

15,762

 

Depreciation and amortization included in

 

 

 

 

 

 

 

 

cost of revenues, SG&A and other expenses

 

14,921

 

 

14,076

 

 

44,271

 

 

40,639

 

Interest expense included in other income, net

 

153

 

 

236

 

 

456

 

 

1,409

 

Income tax provision (benefit)

 

10,652

 

 

162

 

 

(14,096

)

 

12,311

 

EBITDA

 

$

70,402

 

 

$

60,510

 

 

$

187,533

 

 

$

169,858

 

Write-downs of acquisition-related deferred revenue

 

113

 

 

1,698

 

 

433

 

 

6,052

 

Share-based compensation expense

 

18,424

 

 

14,887

 

 

54,112

 

 

44,369

 

Acquisition related costs

 

 

 

5

 

 

 

 

945

 

COVID-19 incremental costs

 

 

 

 

 

727

 

 

 

Adjusted EBITDA

 

$

88,939

 

 

$

77,100

 

 

$

242,805

 

 

$

221,224

 

 

 

 

 

 

 

 

 

 

 

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

 

 

 

 

 

 

 

September 30, 2020

 

December 31, 2019

ASSETS

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

518,685

 

 

$

232,682

 

Accounts receivable, net

 

362,667

 

 

374,089

 

Current investments and other assets

 

88,495

 

 

66,444

 

Income tax receivable

 

20,752

 

 

6,482

 

Total current assets

 

990,599

 

 

679,697

 

 

 

 

 

 

Accounts receivable, long-term portion

 

24,459

 

 

22,432

 

Operating lease right-of-use assets

 

15,321

 

 

18,992

 

Property and equipment, net

 

170,833

 

 

171,861

 

 

 

 

 

 

Other assets:

 

 

 

 

Goodwill

 

840,028

 

 

840,117

 

Other intangibles, net

 

341,999

 

 

378,914

 

Non-current investments

 

75,278

 

 

42,235

 

Other non-current assets

 

33,646

 

 

37,366

 

 

 

 

 

 

Total assets

 

$

2,492,163

 

 

$

2,191,614

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued liabilities

 

$

92,761

 

 

$

90,211

 

Operating lease liabilities

 

5,780

 

 

6,387

 

Deferred revenue

 

436,504

 

 

412,495

 

Total current liabilities

 

535,045

 

 

509,093

 

 

 

 

 

 

Revolving line of credit

 

 

 

 

Deferred revenue, long-term

 

118

 

 

199

 

Deferred income taxes

 

45,985

 

 

48,442

 

Operating lease liabilities, long-term

 

12,870

 

 

16,822

 

Shareholders’ equity

 

1,898,145

 

 

1,617,058

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,492,163

 

 

$

2,191,614

 

 

 

 

 

 

 

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2020

 

2019

 

2020

 

2019

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

39,284

 

 

 

$

40,390

 

 

 

$

140,726

 

 

 

$

99,737

 

 

Adjustments to reconcile net income to cash

 

 

 

 

 

 

 

 

provided by operations:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

20,476

 

 

 

19,803

 

 

 

60,746

 

 

 

56,547

 

 

Share-based compensation expense

 

18,424

 

 

 

14,887

 

 

 

54,112

 

 

 

44,369

 

 

Operating lease right-of-use assets expense

 

1,390

 

 

 

1,428

 

 

 

4,233

 

 

 

3,979

 

 

Deferred income tax expense (benefit)

 

1,271

 

 

 

(2,889

)

 

 

(2,458

)

 

 

(10,329

)

 

Changes in operating assets and liabilities,

 

 

 

 

 

 

 

 

exclusive of effects of acquired companies

 

88,963

 

 

 

56,454

 

 

 

8,969

 

 

 

(15,776

)

 

Net cash provided by operating activities

 

169,808

 

 

 

130,073

 

 

 

266,328

 

 

 

178,527

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Additions to property and equipment

 

(2,796

)

 

 

(4,781

)

 

 

(19,064

)

 

 

(28,833

)

 

Purchase of marketable security investments

 

(31,582

)

 

 

(17,205

)

 

 

(111,329

)

 

 

(27,322

)

 

Proceeds from marketable security investments

 

21,774

 

 

 

17,166

 

 

 

61,794

 

 

 

56,854

 

 

Proceeds from the sale of investment of preferred shares

 

 

 

 

 

 

 

15,000

 

 

 

 

 

Purchase of investment of common shares

 

 

 

 

 

 

 

(10,000

)

 

 

 

 

Investment in software

 

(1,621

)

 

 

(1,308

)

 

 

(4,316

)

 

 

(3,540

)

 

Cost of acquisitions, net of cash acquired

 

 

 

 

(650

)

 

 

(261

)

 

 

(199,870

)

 

Decrease (increase) in other

 

341

 

 

 

(925

)

 

 

13

 

 

 

(493

)

 

Net cash used by investing activities

 

(13,884

)

 

 

(7,703

)

 

 

(68,163

)

 

 

(203,204

)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Decrease in net borrowings on revolving line of credit

 

 

 

 

(15,000

)

 

 

 

 

 

 

 

Purchase of treasury shares

 

(2

)

 

 

 

 

 

(15,484

)

 

 

(17,786

)

 

Proceeds from exercise of stock options

 

8,395

 

 

 

40,163

 

 

 

100,732

 

 

 

62,295

 

 

Payment of contingent consideration

 

 

 

 

 

 

 

(5,619

)

 

 

 

 

Contributions from employee stock purchase plan

 

3,032

 

 

 

2,718

 

 

 

8,209

 

 

 

7,327

 

 

Net cash provided by financing activities

 

11,425

 

 

 

27,881

 

 

 

87,838

 

 

 

51,836

 

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

167,349

 

 

 

150,251

 

 

 

286,003

 

 

 

27,159

 

 

Cash and cash equivalents at beginning of period

 

351,336

 

 

 

11,187

 

 

 

232,682

 

 

 

134,279

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

$

518,685

 

 

 

$

161,438

 

 

 

$

518,685

 

 

 

$

161,438

 

 

Contacts

Brian K. Miller

Executive Vice President & CFO

Tyler Technologies, Inc.

972-713-3720

brian.miller@tylertech.com

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