Segment and Related Information

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Segment and Related Information

Segment and Related Information

We provide integrated information management solutions and services for the public sector, with a focus on local governments.

We provide our software systems and services and appraisal services through four business units, which focus on the following products:

• financial management, education and planning, regulatory and maintenance software solutions;

• financial management, municipal courts, planning, regulatory and maintenance, and land and vital records management software solutions;

• courts and justice and public safety software solutions; and

• appraisal and tax software solutions and property appraisal services.

In accordance with ASC 280-10, Segment Reporting, the financial management, education and planning, regulatory and maintenance software solutions unit; financial management, municipal courts, planning, regulatory and maintenance, and land and vital records management software solutions unit; and the courts and justice and public safety software solutions unit meet the criteria for aggregation and are presented in one reportable segment, the Enterprise Software (“ES”) segment. The ES segment provides municipal and county governments and schools with software systems and services to meet their information technology and automation needs for mission-critical “back-office” functions. The Appraisal and Tax (“A&T”) segment provides systems and software that automate the appraisal and assessment of real and personal property as well as property appraisal outsourcing services for local governments and taxing authorities. Property appraisal outsourcing services include: the physical inspection of commercial and residential properties; data collection and processing; computer analysis for property valuation; preparation of tax rolls; community education; and arbitration between taxpayers and the assessing jurisdiction.

We evaluate performance based on several factors, of which the primary financial measure is business segment operating income. We define segment operating income for our business units as income before non-cash amortization of intangible assets associated with their acquisitions, interest expense and income taxes. Segment operating income includes intercompany transactions. The majority of intercompany transactions relate to contracts involving more than one unit and are valued based on the contractual arrangement. Segment operating income for corporate primarily consists of compensation costs for the executive management team and certain accounting and administrative staff and share-based compensation expense for the entire company. Corporate segment operating income also includes revenues and expenses related to a company-wide user conference.

For the three months ended September 30, 2017
	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	18,223	$	1,619	$	—		$	19,842
Subscriptions	42,826		2,014		—			44,840
Software services	42,295		5,184		—			47,479
Maintenance	86,576		5,709		—			92,285
Appraisal services	—		6,290		—			6,290
Hardware and other	3,412		—		(2		)	3,410
Intercompany	2,660		—		(2,660		)	—
Total revenues	$	195,992	$	20,816	$	(2,662	)	$	214,146
Segment operating income	$	60,511	$	5,479	$	(13,578	)	$	52,412

For the nine months ended September 30, 2017
	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	50,151	$	5,021	$	—		$	55,172
Subscriptions	120,191		5,698		—			125,889
Software services	125,658		14,211		—			139,869
Maintenance	253,048		15,508		—			268,556
Appraisal services	—		19,268		—			19,268
Hardware and other	9,435		—		4,622			14,057
Intercompany	7,309		—		(7,309		)	—
Total revenues	$	565,792	$	59,706	$	(2,687	)	$	622,811
Segment operating income	$	166,692	$	14,103	$	(37,468	)	$	143,327

For the three months ended September 30, 2016
	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	18,492	$	1,438	$	—		$	19,930
Subscriptions	35,169		1,700		—			36,869
Software services	40,608		4,130		—			44,738
Maintenance	78,292		4,708		—			83,000
Appraisal services	—		6,541		—			6,541
Hardware and other	3,428		—		(9		)	3,419
Intercompany	1,971		—		(1,971		)	—
Total revenues	$	177,960	$	18,517	$	(1,980	)	$	194,497
Segment operating income	$	52,372	$	4,713	$	(11,084	)	$	46,001

For the nine months ended September 30, 2016
	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	50,585	$	3,746	$	—		$	54,331
Subscriptions	99,470		5,456		—			104,926
Software services	121,372		11,836		—			133,208
Maintenance	223,802		13,973		—			237,775
Appraisal services	—		20,083		—			20,083
Hardware and other	9,406		16		3,017			12,439
Intercompany	4,743		—		(4,743		)	—
Total revenues	$	509,378	$	55,110	$	(1,726	)	$	562,762
Segment operating income	$	139,151	$	13,534	$	(29,774	)	$	122,911

	Three months ended September 30,						Nine months ended September 30,
Reconciliation of reportable segment operating income to the Company's consolidated totals:	2017			2016			2017			2016
Total segment operating income	$	52,412		$	46,001		$	143,327		$	122,911
Amortization of acquired software	(5,473		)	(5,598		)	(16,243		)	(16,737		)
Amortization of customer and trade name intangibles	(3,492		)	(3,458		)	(10,413		)	(10,273		)
Other expense, net	75			(526		)	(216		)	(1,713		)
Income before income taxes	$	43,522		$	36,419		$	116,455		$	94,188