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 five 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;


•	data and insights 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; courts and justice and public safety software solutions unit; and the data and insights 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; land and vital records management, and data analytics. 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, 2018
	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	19,544	$	2,900	$	—		$	22,444
Subscriptions	56,220		2,479		—			58,699
Software services	41,640		6,559		—			48,199
Maintenance	90,072		6,143		—			96,215
Appraisal services	—		5,544		—			5,544
Hardware and other	4,999		—		(33		)	4,966
Intercompany	3,373		—		(3,373		)	—
Total revenues	$	215,848	$	23,625	$	(3,406	)	$	236,067
Segment operating income	$	59,334	$	6,695	$	(18,161	)	$	47,868



For the nine months ended September 30, 2018
	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	60,224	$	7,396	$	—		$	67,620
Subscriptions	153,541		7,195		—			160,736
Software services	126,928		17,884		—			144,812
Maintenance	267,681		18,507		—			286,188
Appraisal services	—		16,470		—			16,470
Hardware and other	12,525		33		4,917			17,475
Intercompany	9,696		—		(9,696		)	—
Total revenues	$	630,595	$	67,485	$	(4,779	)	$	693,301
Segment operating income	$	174,365	$	16,845	$	(48,900	)	$	142,310



For the three months ended September 30, 2017
As Adjusted	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	21,143	$	1,619	$	—		$	22,762
Subscriptions	42,338		2,014		—			44,352
Software services	40,861		5,184		—			46,045
Maintenance	86,138		5,709		—			91,847
Appraisal services	—		6,290		—			6,290
Hardware and other	3,412		—		(2		)	3,410
Intercompany	2,660		—		(2,660		)	—
Total revenues	$	196,552	$	20,816	$	(2,662	)	$	214,706
Segment operating income	$	61,243	$	5,450	$	(13,578	)	$	53,115



For the nine months ended September 30, 2017
As Adjusted	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	58,805	$	5,021	$	—		$	63,826
Subscriptions	119,033		5,698		—			124,731
Software services	120,190		14,211		—			134,401
Maintenance	251,457		15,508		—			266,965
Appraisal services	—		19,268		—			19,268
Hardware and other	9,385		—		4,622			14,007
Intercompany	7,309		—		(7,309		)	—
Total revenues	$	566,179	$	59,706	$	(2,687	)	$	623,198
Segment operating income	$	167,767	$	14,371	$	(37,468	)	$	144,670



	Three Months Ended September 30,						Nine Months Ended September 30,
Reconciliation of reportable segment operating income to the Company's consolidated totals:	2018			2017			2018			2017
				As Adjusted						As Adjusted
Total segment operating income	$	47,868		$	53,115		$	142,310		$	144,670
Amortization of acquired software	(5,897		)	(5,473		)	(17,003		)	(16,243		)
Amortization of customer and trade name intangibles	(4,386		)	(3,360		)	(11,742		)	(10,016		)
Other income (expense), net	1,041			75			2,198			(216		)
Income before income taxes	$	38,626		$	44,357		$	115,763		$	118,195