UNITED STATES
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Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02. Results of Operations and Financial Condition.*
On May 13, 2021, GTY Technology Holdings Inc. issued a press release announcing financial results for the quarter ended March 31, 2021. A copy of the press release is attached hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits |
Exhibit No. |
| Description |
99.1* |
| |
104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded in the inline XBRL Document) |
* The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
GTY TECHNOLOGY HOLDINGS INC. | ||
By: | /s/ John Curran | |
Name: John Curran | ||
Title: Chief Financial Officer | ||
Dated: May 13, 2021 | ||
3
Exhibit 99.1
GTY Technology Holdings Announces First Quarter Financial Results
Annual recurring revenue of $44.1 million, up 27% year-over-year
Total first quarter revenue of $13.3 million, up 18% year-over-year
(Boston, MA, May 13, 2021) – GTY Technology Holdings Inc. (Nasdaq: GTYH) (“GTY”), a leading vertical SaaS/Cloud solution provider for the public sector, today announced financial results for the first quarter ended March 31, 2021.
“The first quarter was an outstanding start to 2021, primarily driven by robust activity across all of our business segments. We accelerated year-over-year ARR growth to 27% and achieved 18% revenue growth that exceeded guidance,” said TJ Parass, CEO of GTY. “We have great momentum across our business and see strong demand for our products as more and more public sector organizations are pushing to modernize and transform their operations. As we look forward, we believe GTY is well positioned to capitalize on the recovery trend and execute on our growth initiatives.”
First Quarter 2021 Financial Highlights
| ● | Revenue: Total GAAP revenue for the first quarter of 2021 was $13.3 million, up 18% compared to $11.3 million in the first quarter of 2020. Total non-GAAP revenue for the first quarter of 2021 was $13.4 million, up 15% compared to $11.6 million in the first quarter of 2020. |
| ● | Gross Profit: Gross profit for the first quarter of 2021 was $8.5 million, compared to $6.7 million for the first quarter of 2020. Gross margin for the first quarter of 2021 was 64%, compared to 60% for the first quarter of 2020. Non-GAAP gross profit for the first quarter of 2021 was $8.9 million, compared to $7.3 million for the first quarter of 2020. Non-GAAP gross margin was 67% for the first quarter of 2021, compared to 63% for the first quarter of 2020. |
| ● | Operating (Loss): Operating loss for the first quarter of 2021 was $(8.1) million, compared to an operating loss of $(16.5) million in the first quarter of 2020. Non-GAAP operating loss for the first quarter of 2021 was $(1.5) million, compared to an operating loss of $(5.7) million in the first quarter of 2020. |
| ● | Net (Loss): Net loss for the first quarter of 2021 was $(18.0) million, or $(0.32) per share, based on 55.8 million weighted average shares outstanding. During the first quarter of 2020, net loss was $(17.4) million, or $(0.33) per share, based on 52.6 million weighted average shares outstanding. |
On April 12, 2021, the SEC released guidance regarding the technical accounting for warrants issued by special purpose acquisition companies. GTY has assessed the impact of this recent guidance and determined it is not material to previously issued financial statements. Accordingly, GTY will revise, rather than restate, its previously issued 2020 quarterly and annual financial statements in GTY’s filings for 2021 on Forms 10-Q and 10-K. The guidance does not impact GTY’s non-GAAP operating metrics for 2019 or 2020, including non-GAAP revenues, non-GAAP gross profit, non-GAAP gross margin and non-GAAP loss from operations.
Definitions and reconciliations of all non-GAAP financial measures and additional information regarding operating measures are included below in the section titled “Use of Non-GAAP Financial Measures” and in the accompanying tables. All comparisons in this press release are year over year unless otherwise provided.
First Quarter 2020 Highlights and Key Metrics
| ● | Raised $6.8 million through equity sales |
| ● | Redeemed shares worth $8 million |
| ● | The number of customers was 1,793 as of March 31, 2021, an increase of 14% from 1,578 as of March 31, 2020. |
Additional information regarding our new customers, total customers and Annual Recurring Revenue and how each are calculated are included below.
Financial Outlook
As of May 13, 2021, GTY is providing guidance for its second quarter and full year 2021 as follows:
| ● | Second Quarter 2021 Guidance: Total Non-GAAP revenue is expected to be in the range of $13.5 million to $14.0 million or approximately 22% year-over-year growth. |
| ● | Full Year 2021 Guidance: Total Non-GAAP revenue is expected to be in the range of $57.0 million to $60.0 million or approximately 20% year- over-year growth. |
Conference Call and Webcast
GTY will hold its quarterly earnings call on May 13, 2021 at 4:30 p.m. ET. Conference call details for participation on the call are listed below. A transcript will also be posted to the Investor Relations section of our website at www.gtytechnology.com.
Investors and participants can register for the call in advance by registering here using conference ID 7597626. After registering, instructions will be shared on how to join the call. The call will also be available via live webcast here. The archived webcast will be available shortly after the call on the company website, www.gtytechnology.com.
About GTY Technology Holdings Inc.
GTY Technology Holdings Inc. (NASDAQ: GTYH) (“GTY”) brings leading public sector technology companies together to achieve a new standard in stakeholder engagement and resource management. Through its six business units, GTY offers an intuitive cloud-based suite of solutions for state and local governments, education institutions, and healthcare organizations spanning functions in procurement, payments, grant management, budgeting, and permitting: Bonfire provides strategic sourcing and procurement software to enable confident and compliant spending decisions; CityBase provides government payment solutions to connect constituents with utilities and government agencies; eCivis offers a grant management system to maximize grant revenues and track performance; Open Counter provides user-friendly software to guide applicants through complex permitting and licensing procedures; Questica offers budget preparation and management software to deliver on financial and non-financial strategic objectives; Sherpa provides public-sector budgeting software and consulting services.
Forward-Looking Statements
This release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The company’s actual results may differ from its expectations, estimates and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the company’s expectations with respect to future performance. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside of the company’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) the impact of the COVID-19 pandemic, or other public health crises, on our operations, our customers and the economy; (2) the risk that the ongoing integration of the businesses acquired in our business combination disrupts
current plans and operations; (3) the ability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably and retain its key employees; (4) our failure to generate sufficient cash flow from our business to make payments on our debt; (5) changes in applicable laws or regulations; (6) the possibility that the company may be adversely affected by other economic, business or competitive factors; and (7) other risks and uncertainties included in our Annual Report on Form 10-K for the year ended December 31, 2020 and our subsequent filings with the Securities and Exchange Commission. We caution you that the foregoing list of factors is not exclusive, and readers should not place undue reliance upon any forward-looking statements, which speak only as of the date made. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based.
Use of Non-GAAP Financial Measures
To supplement its condensed consolidated financial statements, which are prepared in accordance with U.S. generally accepted accounting principles, or GAAP, GTY has provided in this release certain financial measures that have not been prepared in accordance with GAAP defined as “non-GAAP financial measures,” which include (i) non-GAAP revenues, (ii) non-GAAP gross profit and non-GAAP gross margin, (iii) and non-GAAP loss from operations.
GTY’s management uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to the corresponding GAAP measures, in evaluating GTY’s ongoing operational performance and trends. However, it is important to note that particular items GTY excludes from, or includes in, its non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measures to such GAAP financial measures has been provided in the tables included as part of this press release.
Non-GAAP Revenues. Non-GAAP revenues are defined as GAAP revenues adjusted for the impact of purchase accounting resulting from its business combination which reduced its acquired contract liabilities to fair value. The company believes that presenting non-GAAP revenues is useful to investors as it eliminates the impact of the purchase accounting adjustments to revenues to allow for a direct comparison between periods.
Non-GAAP Gross Profit and Non-GAAP Gross Margin. Non-GAAP gross profit is defined as GAAP gross profit adjusted for the impact of purchase accounting resulting its business combination and share-based compensation. Non-GAAP gross margin is defined as non-GAAP gross profit divided by non-GAAP revenues. The company believes that presenting non-GAAP gross profit and margin is useful to investors as it eliminates the impact of the purchase accounting adjustments to allow for a direct comparison between periods.
Non-GAAP Loss From Operations. Non-GAAP loss from operations is defined as GAAP loss from operations adjusted for the impact of purchase accounting to revenues resulting from its business combination, the amortization of acquired intangible assets, share-based compensation, acquisition related costs, goodwill impairment expense, restructuring expenses and the change in fair value of contingent consideration. The company believes that presenting non-GAAP loss from operations is useful to investors as it eliminates the impact of certain non-cash and acquisition related expenses to allow a direct comparison of loss from operations between periods.
Operating Metrics
We define the number of customers as the number of accounts with a unique account identifier for which we have an active contract in the period indicated. New customers have signed a new contract with a GTY entity in the period.
We define ARR as the annualized revenue run-rate of subscription, maintenance or transaction-based agreements from all customers at a point in time. For transaction based CityBase contracts we use the following calculation: For large projects (>$10K per month) with 12 months or more of history we use the trailing 12 months of history. For large projects with less than 12 months, we calculate an annualized value based on history available. For small projects (<$10K per month) we annualize the most recent month’s activity.
Exhibit 1
GTY Technology Holdings Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
| | | | | | ||
| Three Months Ended |
| Three Months Ended |
| |||
| March 31, 2021 | | March 31, 2020 | | |||
Revenues | | $ | 13,259 | | $ | 11,276 | |
Cost of revenues | | | 4,742 | | | 4,527 | |
Gross Profit | | | 8,517 | | | 6,749 | |
| | | | | | ||
Operating expenses | | | | | | | |
Sales and marketing (1) | | | 3,762 | | | 4,854 | |
General and administrative (1) | | | 5,193 | | | 7,449 | |
Research and development (1) | | | 2,985 | | | 3,798 | |
Amortization of intangible assets | | | 3,599 | | | 3,673 | |
Restructuring charges | | | — | | | 3,466 | |
Change in fair value of contingent consideration | | | 1,114 | | | 29 | |
Total operating expenses | | | 16,653 | | | 23,269 | |
Loss from operations | | | (8,136) | | | (16,520) | |
| | | | | | ||
Other income (expense) | | | | | | | |
Interest income (expense), net | | | (859) | | | (236) | |
Loss from repurchase/issuance of shares | | | (5,333) | | | (2,056) | |
Change in fair value of warrant liability | | | (4,038) | | | (1,563) | |
Other income (loss), net | | | 168 | | | 499 | |
Total other income (expense), net | | | (10,062) | | | (3,356) | |
| | | | | | ||
Loss before income taxes | | | (18,198) | | | (19,876) | |
Benefit from income taxes | | | 170 | | | 2,521 | |
Net loss | | $ | (18,028) | | $ | (17,355) | |
| | | | | | ||
Net loss per share, basic and diluted | | $ | (0.32) | | $ | (0.33) | |
Weighted average common shares outstanding, basic and diluted | | | 55,828 | | | 52,575 | |
| | | | | | ||
Net loss | | $ | (18,028) | | $ | (17,355) | |
Other comprehensive loss: | | | | | | | |
Foreign currency translation gain (loss) | | | 255 | | | 2,049 | |
Total other comprehensive income (loss) | | | 255 | | | 2,049 | |
Comprehensive loss | | $ | (17,773) | | $ | (15,306) | |
| | | | | | ||
(1) Amounts include share-based compensation expense as follows: | | | | | | | |
Cost of revenues | | $ | 292 | | $ | 218 | |
Sales and Marketing | | | 359 | | | 771 | |
General and administrative | | | 946 | | | 2,051 | |
Research and development | | | 226 | | | 255 | |
Total share-based compensation expense | | $ | 1,823 | | $ | 3,295 | |
Exhibit 2
Reconciliations of non-GAAP Financial Measures
(in thousands)
(unaudited)
Non-GAAP Reconciliation | | Three Months Ended | | |||||||
| | March 31, 2021 | | December 31, 2020 | | March 31, 2020 | | |||
Revenues |
| $ | 13,259 |
| $ | 13,101 |
| $ | 11,276 |
|
Purchase accounting adjustment to revenue | | | 122 | | | 126 | | | 315 | |
Non-GAAP Revenues | | $ | 13,381 | | $ | 13,227 | | $ | 11,591 | |
| | | | | | | ||||
| | | | | | | ||||
Gross Profit | | $ | 8,517 | | $ | 8,174 | | $ | 6,749 | |
Purchase accounting adjustment to revenue | | | 122 | | | 126 | | | 315 | |
Share-based compensation | | $ | 292 | | $ | 236 | | | 218 | |
Non-GAAP Gross Profit | | $ | 8,931 | | $ | 8,536 | | $ | 7,282 | |
| | | | | | | ||||
Gross Margin | | | 64 | % | | 62 | % | | 60 | % |
Non-GAAP Gross Margin | | | 67 | % | | 65 | % | | 63 | % |
| | | | | | | ||||
Loss from operations | | $ | (8,136) | | $ | (11,125) | | $ | (16,520) | |
Purchase accounting adjustment to revenue | | | 122 | | | 126 | | | 315 | |
Amortization of intangibles | | | 3,599 | | | 3,683 | | | 3,673 | |
Share-based compensation | | | 1,823 | | | 2,283 | | | 3,295 | |
Goodwill impairment expense | | | — | | | 2,000 | | | — | |
Restructuring charges | | | — | | | — | | | 3,466 | |
Change in fair value of contingent consideration | | | 1,114 | | | 1,951 | | | 29 | |
Non-GAAP Loss from operations | | $ | (1,478) | | $ | (1,082) | | $ | (5,742) | |
Exhibit 3
GTY Technology Holdings Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
| | | | | |||
| March 31, |
| December 31, | | |||
| | 2021 | | 2020 | | ||
Assets | | | | | | ||
Current assets: | | | | | | ||
Cash and cash equivalents | | $ | 17,936 | | $ | 22,800 | |
Accounts receivable, net | | | 10,752 | | | 9,994 | |
Prepaid expenses and other current assets | | | 3,855 | | | 2,583 | |
Total current assets | | | 32,543 | | | 35,377 | |
| | | | | | ||
Property and equipment, net | | | 3,651 | | | 3,891 | |
Intangible assets, net | | | 97,508 | | | 101,107 | |
Goodwill | | | 284,635 | | | 284,635 | |
Other assets | | | 7,605 | | | 7,437 | |
Total assets | | $ | 425,942 | | $ | 432,447 | |
| | | | | | ||
Liabilities and Shareholders’ Equity | | | | | | ||
Current liabilities: | | | | | | ||
Accounts payable and accrued expenses | | $ | 5,556 | | $ | 6,366 | |
Deferred revenue - current portion | | | 23,345 | | | 22,304 | |
Contingent consideration - current portion | | | 729 | | | 743 | |
Other current liabilities | | | 1,713 | | | 1,897 | |
Total current liabilities | | | 31,343 | | | 31,310 | |
| | | | | | ||
Deferred revenue - less current portion | | | 2,236 | | | 1,602 | |
Warrant liability | | | 7,078 | | | 3,040 | |
Deferred tax liability | | | 17,144 | | | 17,494 | |
Contingent consideration - less current portion | | | 43,630 | | | 42,530 | |
Term loan, net | | | 26,694 | | | 26,632 | |
Other long-term liabilities | | | 2,921 | | | 3,074 | |
Total liabilities | | | 131,046 | | | 125,682 | |
| | | | | | ||
Commitments and contingencies | | | | | | ||
| | | | | | ||
Shareholders’ equity: | | | | | | ||
Common stock | | | 6 | | | 6 | |
Exchangeable shares | | | 50,637 | | | 54,224 | |
Additional paid in capital | | | 393,082 | | | 380,881 | |
Accumulated other comprehensive income | | | 261 | | | 6 | |
Treasury stock | | | (8,343) | | | (5,633) | |
Accumulated deficit | | | (140,747) | | | (122,719) | |
Total shareholders' equity | | | 294,896 | | | 306,765 | |
Total liabilities and shareholders’ equity | | $ | 425,942 | | $ | 432,447 | |
Exhibit 4
GTY Technology Holdings Inc.
Condensed Statement of Cash Flows
(in thousands)
(unaudited)
| | | | | |||
| Three Months Ended |
| Three Months Ended |
| |||
| March 31, 2021 | | March 31, 2020 | | |||
Cash flows from operating activities: | | | | | | ||
Net loss | | $ | (18,028) | | $ | (17,355) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | | | | | | ||
Depreciation of property and equipment | | | 253 | | | 54 | |
Amortization of intangible assets | | | 3,599 | | | 3,673 | |
Amortization of right of use assets | | | 279 | | | 431 | |
Share-based compensation | | | 1,823 | | | 3,295 | |
Deferred income tax benefit | | | (170) | | | (2,521) | |
Loss on issuance/repuchase of shares | | | 5,333 | | | 2,056 | |
Change in fair value of warrant liability | | | 4,038 | | | 1,563 | |
Change in fair value of contingent consideration | | | 1,114 | | | 29 | |
Amortization of deferred debt issuance costs | | | 172 | | | 66 | |
Other | | | (80) | | | 69 | |
Changes in operating assets and liabilities: | | | | | | ||
Accounts receivable | | | (789) | | | 522 | |
Prepaid expenses and other assets | | | (1,536) | | | (1,122) | |
Accounts payable and accrued liabilities | | | (813) | | | (546) | |
Deferred revenue and other liabilities | | | 1,747 | | | (42) | |
Operating lease liabilities | | | (348) | | | (441) | |
Net cash (used in) provided by operating activities | | | (3,406) | | | (10,269) | |
| | | | | |||
Cash flows from investing activities: | | | | | | ||
Capital expenditures | | | (31) | | | (1,111) | |
Net cash (used in) provided by operating activities | | | (31) | | | (1,111) | |
| | | | | |||
Cash flows from financing activities: | | | | | | ||
Proceeds from borrowings, net of issuance costs | | | — | | | 11,476 | |
Contingent consideration payments | | | (28) | | | (27) | |
Common stock repurchases | | | (8,043) | | | — | |
Proceeds from issuance of common stock, net of costs | | | 6,790 | | | — | |
Other | | | (137) | | | (132) | |
Net cash provided by (used in) financing activities | | | (1,418) | | | 11,317 | |
| | | | | |||
Effect of foreign currency on cash | | | (9) | | | (195) | |
| | | | | |||
Net change in cash and cash equivalents | | | (4,864) | | | (258) | |
Cash and cash equivalents, beginning of period | | | 22,800 | | | 8,374 | |
Cash and cash equivalents, end of period | | | 17,936 | | | 8,116 | |
Company Contacts:
Investor Relations
ir@gtytechnology.com
(702) 945-2898
Document and Entity Information |
May 13, 2021 |
|---|---|
| Document and Entity Information [Abstract] | |
| Document Type | 8-K |
| Document Period End Date | May 13, 2021 |
| Entity File Number | 001-37931 |
| Entity Registrant Name | GTY TECHNOLOGY HOLDINGS INC. |
| Entity Incorporation, State or Country Code | MA |
| Entity Tax Identification Number | 83-2860149 |
| Entity Address, Address Line One | 1180 North Town Center Drive |
| Entity Address, Adress Line Two | Suite 100 |
| Entity Address, State or Province | NV |
| Entity Address, City or Town | Las Vegas |
| Entity Address, Postal Zip Code | 89144 |
| City Area Code | 702 |
| Local Phone Number | 945-2898 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Stock, par value $0.0001 per share |
| Trading Symbol | GTYH |
| Security Exchange Name | NASDAQ |
| Entity Emerging Growth Company | true |
| Entity Ex Transition Period | false |
| Entity Central Index Key | 0001682325 |
| Amendment Flag | false |