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 such as financial management and courts and justice processes; public safety; planning, regulatory and maintenance; and land and vital records management. 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 March 31, 2018
	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	20,689	$	2,087	$	—		$	22,776
Subscriptions	46,683		2,345		—			49,028
Software services	40,286		5,653		—			45,939
Maintenance	87,813		6,084		—			93,897
Appraisal services	—		5,394		—			5,394
Hardware and other	3,800		—		340			4,140
Intercompany	3,237		—		(3,237		)	—
Total revenues	$	202,508	$	21,563	$	(2,897	)	$	221,174
Segment operating income	$	56,615	$	4,647	$	(13,727	)	$	47,535



For the three months ended March 31, 2017
As Adjusted	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	20,109	$	1,649	$	—		$	21,758
Subscriptions	38,073		1,789		—			39,862
Software services	38,146		4,350		—			42,496
Maintenance	81,614		4,693		—			86,307
Appraisal services	—		6,612		—			6,612
Hardware and other	2,694		—		—			2,694
Intercompany	2,163		—		(2,163		)	—
Total revenues	$	182,799	$	19,093	$	(2,163	)	$	199,729
Segment operating income	$	52,488	$	4,326	$	(11,248	)	$	45,566



	Three months ended March 31,
Reconciliation of reportable segment operating income to the Company's consolidated totals:	2018			2017
				As Adjusted
Total segment operating income	$	47,535		$	45,566
Amortization of acquired software	(5,382		)	(5,410		)
Amortization of customer and trade name intangibles	(3,315		)	(3,325		)
Other income (expense), net	599			(190		)
Income before income taxes	$	39,437		$	36,641