Tyler Technologies Reports Earnings for Fourth Quarter 2021|||

Total revenues grew 53%; organic revenue increased 9.2%

PLANO, Texas–(BUSINESS WIRE)–$TYL #TYL—Tyler Technologies, Inc. (NYSE: TYL) today announced financial results for the fourth quarter ended December 31, 2021.

Quaternary Quarter 2021 Financial Highlights:

• Total revenues were $433.v million, up 53.0% from $283.iii million for the fourth quarter of 2020. On an organic basis, revenues grew 9.2%. Not-GAAP total revenues were $434.two million, upward 53.2% from $283.4 million for the 4th quarter of 2020. On an organic footing, non-GAAP revenues grew 9.2%.
• Recurring revenues from maintenance and subscriptions were $347.2 million, up 63.4% from $212.4 meg for the fourth quarter of 2020, and comprised 80.ane% of fourth quarter 2021 revenues, up from 75.0% for the fourth quarter of 2020. On an organic footing, recurring revenues were $233.0 meg, upwards ix.vii%.
• Subscription revenue and software services revenues included a total of $16.six 1000000 from NIC’s TourHealth and COVID-related initiatives, the majority of which are expected to wind down in the first half of 2022.
• Operating income was $48.1 million compared to $48.0 one thousand thousand for the 4th quarter of 2020. Non-GAAP operating income was $102.v million, up 34.2% from $76.4 million for the fourth quarter of 2020.
• Net income was $54.8 1000000, or $1.29 per diluted share, upwardly 1.3% from $54.1 million, or $1.29 per diluted share, for the fourth quarter of 2020. Non-GAAP net income was $74.3 one thousand thousand, or $1.75 per diluted share, up 27.iv% from $58.3 meg, or $1.39 per diluted share, for the fourth quarter of 2020.
• Cash flows from operations were $115.0 million, up 29.vi% from $88.viii one thousand thousand for the 4th quarter of 2020. Free cash catamenia was $95.1 million, up 13.vii% from $83.7 million for the fourth quarter of 2020.
• Adjusted EBITDA was $110.3 one thousand thousand, upward 32.half-dozen% from $83.two million for the fourth quarter of 2020.
• Software subscription arrangements comprised approximately 77% of full new software contract value for the fourth quarter, compared to approximately 73% for the fourth quarter of 2020.
• Subscription bookings for the fourth quarter added $fourteen.eight 1000000 in annual recurring revenue.
• Annualized non-GAAP recurring revenues were $1.39 billion, up 63.vii% from $849.eight million for the 4th quarter of 2020.

Full Year 2021 Financial Highlights:

• Total revenues were $1.592 billion, upwards 42.half-dozen% from $1.117 billion in 2020. On an organic basis, revenues grew 8.9%. Non-GAAP full revenues were $one.595 billion, up 42.vii% from $one.117 billion in 2020. On an organic basis, non-GAAP revenues grew 8.eight%.
• Recurring revenues from maintenance and subscriptions were $i.259 billion, up 53.8% from $818.2 million in 2020, and comprised 79.1% of 2021 revenues, up from 73.iii% in 2020. On an organic footing, recurring revenues were $906.2 million, up ten.viii%.
• Subscription revenue and software services revenues included a total of $75.0 one thousand thousand from NIC’s TourHealth and other COVID-related initiatives, the majority of which are expected to wind downwardly in the first half of 2022.
• Operating income was $180.7 million, up 4.5% from $172.9 meg in 2020. Non-GAAP operating income was $405.5 million, upwards 35.4% from $299.5 million in 2020.
• Net income was $161.5 million, or $three.82 per diluted share, downward 17.one% from $194.8 one thousand thousand, or $four.69 per diluted share in 2020. Not-GAAP net income was $296.5 one thousand thousand, or $seven.02 per diluted share, up 29.3% from $229.3 million, or $five.52 per diluted share in 2020.
• Cash flows from operations were $371.8 million, upwards 4.vii% from $355.1 million in 2020. Free greenbacks flow was $316.1 million, down 3.2% from $326.6 million in 2020.
• Adjusted EBITDA was $435.seven million, up 33.half dozen% from $326.0 million in 2020.
• Software subscription arrangements comprised approximately 71% of full new software contract value in 2021, compared to approximately 62% in 2020.
• Subscription bookings in 2021 added $59.0 million in annual recurring revenue.
• Total backlog was a new high of $ane.796 billion, upward 12.six% from $one.595 billion at December 31, 2020.

“Our fourth quarter results were in line with our expectations and continued the positive momentum from the showtime three quarters to provide a potent end to 2021,” said Lynn Moore, Tyler’due south president and chief executive officer. “We’re pleased that acquirement growth connected to rebound, even every bit we experience revenue headwinds from the ongoing shift of new concern to our SaaS model. Total revenues grew 53% with the inclusion of NIC and other acquisitions and organic revenue growth was a solid 9.2%. Recurring revenues continue to be very potent and represented just over 80% of full revenues, as subscriptions revenues grew 144% in total and just under 23% organically. This marked our 64th consecutive quarter of double-digit subscription revenue growth.

“NIC connected to perform well in the fourth quarter. As expected, COVID-related revenues of $16.6 million in the fourth quarter declined sequentially from approximately $43 meg in the third quarter of 2021. These were slightly to a higher place our expectations every bit revenues from a new initiative supporting hire relief programs in Virginia came online. Excluding COVID-related revenues, NIC’s core revenues grew vii.5% over last twelvemonth.

“Greenbacks flows from operations and gratis cash catamenia both had strong double-digit growth. During the fourth quarter, we repaid $87.5 million of our term debt, bringing our total repayment of debt incurred with the NIC acquisition to $395 million.

“The positive trends in public sector market activity experienced in recent quarters continued in the fourth quarter, as proposal and other sales activities are generally at or above pre-COVID levels. Bookings in the fourth quarter totaled approximately $464 million, upwardly 39.3% over the 4th quarter of 2020; excluding NIC, bookings grew 4.2%. For the full year, bookings were approximately $1.8 billion, upwardly 41.6%, and, excluding NIC, were approximately $ane.4 billion, growing eleven.seven%.

“Our enthusiasm effectually NIC and the other acquisitions we completed in 2021 remains very high. NIC’southward fiscal performance exceeded our expectations throughout the year, and their team continues to execute at a very loftier level. We’ve already seen several examples of our ability to leverage each business’s customer base of operations to bulldoze incremental joint sales, and the pipeline of those opportunities continues to grow. We’re too pleased to aggrandize NIC’s portfolio of software solutions through the acquisition of United states eDirect on February viii, 2022. US eDirect’southward marketplace-leading SaaS solutions for the fast-growing campground and outdoor recreation management market complement our existing strength in the hunting and fishing license market and volition allow u.s. to create an “all-in-one” outdoor solution. This will address an estimated $two billion market place while expanding our payments opportunity.

“As we turn to 2022, we are excited about the opportunities alee of united states, and particularly about our accelerated move to the cloud. Our focus continues to be on strategic activities around our cloud transition on several fronts. Those activities include taking a clear deject-start approach to new sales, with a growing number of our products now offered only in the cloud. Even with an expected increment in the SaaS mix of new business, our 2022 revenue growth outlook is quite strong.

“We’re besides on track with our development projects to optimize our products for more than efficient deployment in the cloud, as we drift from our proprietary data centers to AWS. Despite creating brusk-term force per unit area on acquirement growth and margins as we replace one-time license revenue with more valuable long-term recurring SaaS acquirement, and absorb “bubble costs” associated with the cloud transition and the migration from our internal information centers to AWS, we believe the acceleration of this strategy is creating significant long-term value for shareholders and clients,” added Moore.

Guidance for 2022

As of Feb sixteen, 2022, Tyler Technologies is providing the following guidance for the full yr 2022:

• GAAP and not-GAAP total revenues are both expected to be in the range of $1.830 billion to $1.870 billion.
• Total revenues are expected to include approximately $36 million of COVID-related revenues from NIC’s TourHealth and rent relief services. Revenues from TourHealth are expected to continue through the showtime half of 2022, while revenues from the rent relief plan are expected to continue throughout the year.
• GAAP diluted earnings per share are expected to be in the range of $4.09 to $iv.26 and may vary significantly due to the bear on of stock incentive awards on the GAAP constructive revenue enhancement rate.
• Non-GAAP diluted earnings per share are expected to be in the range of $7.41 to $7.58.
• Interest expense is expected to be approximately $20 one thousand thousand, including approximately $v million of amortization of debt discounts and issuance costs.
• Pretax non-cash, share-based compensation expense is expected to be approximately $105 1000000.
• Enquiry and evolution expense is expected to be in the range of $97 million to $100 one thousand thousand.
• Fully diluted shares for the year are expected to exist in the range of 42.5 million to 43.0 million shares.
• GAAP earnings per share assumes an estimated almanac effective taxation rate of approximately 16% afterward discrete tax items including approximately $24 one thousand thousand of detached tax benefits related to share-based compensation.
• The non-GAAP annual effective taxation rate is expected to be 24%.
• Capital expenditures are expected to be in the range of $65 million to $lxx million, including approximately $7 meg related to real estate and approximately $36 1000000 of capitalized software development costs. Full depreciation and amortization expense is expected to be approximately $155 1000000, including approximately $108 one thousand thousand from acquittal of acquisition intangibles.

GAAP to non-GAAP guidance reconciliation

Non-GAAP diluted earnings per share excludes the estimated full yr touch on of non-greenbacks share-based compensation expense and employer portion of payroll revenue enhancement related to employee stock transactions of approximately $105 one thousand thousand, and amortization of caused software and intangible assets of approximately $108 million. Additionally, the non-GAAP tax rate of 24% is estimated periodically as described below under “Not-GAAP Financial Measures” and excludes approximately $24 million of estimated discrete taxation benefits that are included in the GAAP estimated annual effective tax rate.

Conference Call

Tyler Technologies will concord a briefing phone call on Thursday, February 17, 2022 at 10:00 a.1000. ET to talk over the company’s results. The company is offering participants the opportunity to annals in advance for the conference through the following link: http://dpregister.com/sreg/10162869/f08f6507a0. Registered participants will receive an email with a calendar reminder and dial-in number and PIN that will permit them to listen to the phone call live.

Participants who do not wish to pre-annals for the telephone 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 24, 2022. To admission the replay, delight dial 877-344-7529 (U.Due south. callers), 412-317-0088 (international callers) and 855-669-9658 (Canada callers) and reference passcode 3638654.

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 than 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 37,000 successful installations beyond more than 12,000 locations, with clients in all 50 states, Canada, the Caribbean area, Australia, and other international locations. Tyler has been recognized numerous times for growth and innovation, including Authorities Technology’s GovTech 100 list and Forbes’ “Almost Innovative Growth Companies” list. More information well-nigh Tyler Technologies, an S&P 500 company headquartered in Plano, Texas, can be plant at tylertech.com.

Non-GAAP Financial Measures

Tyler Technologies has provided in this printing release financial measures that take not been prepared in accordance with mostly accepted accounting principles (GAAP) and are therefore considered non-GAAP financial measures. This information includes not-GAAP revenues, non-GAAP gross turn a profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP earnings per diluted share, EBITDA, adapted EBITDA, and free cash catamenia. Nosotros utilise 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’south ongoing operational performance because they provide boosted insight in comparison results from period to period. Tyler believes the use of these non-GAAP financial measures provides an additional tool for investors to employ in evaluating ongoing operating results and trends and in comparison our fiscal results with other companies in our industry, many of which present like non-GAAP fiscal 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 acquittal of intangibles arising from business combinations, acquisition-related expenses, and incremental costs associated with COVID-19.

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

Non-GAAP financial measures should be considered in improver to, and not every bit a substitute for, or superior to, financial data prepared in accord with GAAP. The non-GAAP measures used by Tyler Technologies may be different from not-GAAP measures used by other companies. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most direct 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 significant of Section 27A of the Securities Human activity of 1933 and Section 21E of the Securities Commutation 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 status, results of operations or concern. 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 organisation strategy, outlook, objectives, plans, intentions or goals besides are forward-looking statements. Nosotros believe there is a reasonable ground for our forward-looking statements, but they are inherently subject to risks and uncertainties and bodily results could differ materially from the expectations and beliefs reflected in the forward-looking statements. We soon consider the following to be amongst the important factors that could crusade actual results to differ materially from our expectations and beliefs: (1) the furnishings of the COVID-nineteen pandemic, including its potential effects on the economic environment, our customers and our operations, as well as whatsoever changes to federal, state or local government laws, regulations or orders in connection with the pandemic; (two) changes in the budgets or regulatory environments of our clients, primarily local and land governments, that could negatively impact information applied science spending; (iii) disruption to our business organisation and impairment to our competitive position resulting from cyber-attacks and security vulnerabilities; (four) our ability to protect client data from security breaches and provide uninterrupted operations of data centers; (five) our power to achieve growth or operational synergies through the integration of caused businesses, while avoiding unanticipated costs and disruptions to existing operations; (6) material portions of our business require the Internet infrastructure to be adequately maintained; (vii) our ability to reach our financial forecasts due to various factors, including projection 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) full general economic, political and market place conditions; (9) technological and market place 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 manufacture in which nosotros behave business and the touch of competition on pricing, client retention and pressure for new products or services; (11) the ability to concenter and retain qualified personnel and dealing with the loss or retirement of fundamental members of management or other cardinal personnel; and (12) costs of compliance and whatsoever failure to comply with regime and stock commutation regulations. These factors and other risks that impact our business are described in our filings with the Securities and Substitution Commission, including the detailed “Adventure Factors” contained in our most recent annual written report on Class 10-K and quarterly report on Class 10-Q. Nosotros expressly disclaim any obligation to publicly update or revise our forrad-looking statements.

(Comparative results follow)

TYLER TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share information) (Unaudited)
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2021				2020				2021				2020
Software licenses and royalties		$	xix,242			$	17,465			$	74,452			$	73,164
Subscriptions			229,456				93,997				784,435				350,648
Software services			53,790				42,676				209,391				186,409
Maintenance			117,721				118,409				474,287				467,513
Appraisal services			seven,912				v,274				27,788				21,127
Hardware and other			five,416				five,464				21,934				17,802
Full revenues			433,537				283,285				1,592,287				1,116,663
Software licenses and royalties			1,726				292				five,877				iii,339
Acquired software			12,918				7,964				45,601				31,962
Software services, maintenance and subscriptions			223,123				128,557				799,158				510,504
Appraisal services			5,509				4,150				19,061				xv,945
Hardware and other			3,101				iii,653				12,946				12,401
Full cost of revenues			246,377				144,616				882,643				574,151
Gross profit			187,160				138,669				709,644				542,512
Selling, general and authoritative expenses			101,036				62,736				390,579				259,561
Research and evolution expense			24,238				22,411				93,481				88,363
Amortization of customer and merchandise name intangibles			xiii,834				five,486				44,849				21,662
Operating income			48,052				48,036				180,735				172,926
Involvement expense			(4,987	)			(257	)			(23,298	)			(i,013	)
Other income, net			295				633				1,544				iii,129
Income earlier income taxes			43,360				48,412				158,981				175,042
Income tax provision			(11,422	)			(5,682	)			(2,477	)			(19,778	)
Net income		$	54,782			$	54,094			$	161,458			$	194,820
Earnings per common share:
Basic		$	1.33			$	1.34			$	3.95			$	4.87
Diluted		$	1.29			$	i.29			$	3.82			$	four.69
Weighted average mutual shares outstanding:
Basic			41,126				twoscore,404				40,848				40,035
Diluted			42,536				41,925				42,244				41,526

TYLER TECHNOLOGIES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Amounts in thousands, except per share information) (Unaudited)
		Three Months Ended December 31,								Twelve Months Ended Dec 31,
		2021				2020				2021				2020
Reconciliation of non-GAAP total revenues
GAAP total revenues		$	433,537			$	283,285			$	1,592,287			$	1,116,663
Not-GAAP adjustments:
Add: Write-downs and adjustments to acquisition-related deferred revenue			639				45				ii,678				478
Add: Amortization of acquired subleases			—				78				—				313
Not-GAAP total revenues		$	434,176			$	283,408			$	1,594,965			$	one,117,454
Reconciliation of not-GAAP gross profit and margin
GAAP gross turn a profit		$	187,160			$	138,669			$	709,644			$	542,512
Non-GAAP adjustments:
Add: Write-downs and adjustments to acquisition-related deferred revenue			639				45				two,678				478
Add: Amortization of acquired leases			—				78				—				313
Add: Share-based compensation expense included in cost of revenues			6,493				4,949				23,705				18,125
Add together: Amortization of acquired software			12,918				7,964				45,601				31,962
Non-GAAP gross profit		$	207,210			$	151,705			$	781,628			$	593,390
GAAP gross margin			43.2	%			49.0	%			44.six	%			48.half dozen	%
Not-GAAP gross margin			47.7	%			53.five	%			49.0	%			53.1	%
Reconciliation of non-GAAP operating income and margin
GAAP operating income		$	48,052			$	48,036			$	180,735			$	172,926
Non-GAAP adjustments:
Add together: Write-downs of acquisition-related deferred revenue			639				45				two,678				478
Add: Amortization of caused leases			—				78				—				313
Add: Share-based compensation expense			24,366				xiii,253				104,726				67,365
Add together: Employer portion of payroll taxation related to employee stock transactions			one,876				703				3,437				3,294
Add: Acquisition related costs			777				—				23,495				—
Add together: COVID-19 incremental costs			—				810				—				ane,537
Add: Acquittal of acquired software			12,918				7,964				45,601				31,962
Add: Acquittal of customer and trade name intangibles			xiii,834				five,486				44,849				21,662
Non-GAAP adjustments subtotal			54,410				28,339			$	224,786			$	126,611
Non-GAAP operating income		$	102,462			$	76,375			$	405,521			$	299,537
GAAP operating margin			eleven.ane	%			17.0	%			11.4	%			15.5	%
Non-GAAP operating margin			23.6	%			26.9	%			25.four	%			26.8	%
TYLER TECHNOLOGIES, INC. RECONCILIATION OF GAAP TO Not-GAAP FINANCIAL MEASURES (Amounts in thousands, except per share data) (Unaudited)
		Iii Months Ended December 31,								Twelve Months Ended December 31,
		2021				2020				2021				2020
Reconciliation of non-GAAP net income and earnings per share
GAAP net income		$	54,782			$	54,094			$	161,458			$	194,820
Non-GAAP adjustments:
Add: Total non-GAAP adjustments to operating income			54,410				28,339				224,786				126,611
Add together: Acquisition related costs in interest expense			—				—				vi,407				—
Less: Tax bear upon related to not-GAAP adjustments			(34,887	)			(24,102	)			(96,119	)			(92,175	)
Non-GAAP net income		$	74,305			$	58,331			$	296,532			$	229,256
GAAP earnings per diluted share		$	1.29			$	1.29			$	3.82			$	4.69
Non-GAAP earnings per diluted share		$	i.75			$	1.39			$	7.02			$	5.52
Detail of share-based compensation expense
Toll of software services, maintenance and subscriptions		$	6,493			$	iv,949			$	23,705			$	18,125
Selling, full general and authoritative expenses			17,873				8,304				81,021				49,240
Total share-based bounty expense		$	24,366			$	thirteen,253			$	104,726			$	67,365

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