Segment and Related Information

6 Months Ended

Jun. 30, 2019

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 public sector entities 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 June 30, 2019
	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	17,983	$	2,692	$	—		$	20,675
Subscriptions	70,867		2,608		—			73,475
Software services	50,141		7,260		—			57,401
Maintenance	100,483		6,206		—			106,689
Appraisal services	—		6,233		—			6,233
Hardware and other	4,498		—		6,153			10,651
Intercompany	3,660		—		(3,660		)	—
Total revenues	$	247,632	$	24,999	$	2,493		$	275,124
Segment operating income	$	61,391	$	6,200	$	(17,671	)	$	49,920



For the three months ended June 30, 2018
	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	19,991	$	2,409	$	—		$	22,400
Subscriptions	50,637		2,372		—			53,009
Software services	45,002		5,672		—			50,674
Maintenance	89,795		6,281		—			96,076
Appraisal services	—		5,532		—			5,532
Hardware and other	3,724		33		4,612			8,369
Intercompany	3,086		—		(3,086		)	—
Total revenues	$	212,235	$	22,299	$	1,526		$	236,060
Segment operating income	$	58,417	$	5,502	$	(17,012	)	$	46,907



For the six months ended June 30, 2019
	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	36,994	$	5,474	$	—		$	42,468
Subscriptions	135,509		5,241		—			140,750
Software services	92,108		13,736		—			105,844
Maintenance	194,495		12,346		—			206,841
Appraisal services	—		11,447		—			11,447
Hardware and other	8,688		2		6,150			14,840
Intercompany	7,213		—		(7,213		)	—
Total revenues	$	475,007	$	48,246	$	(1,063	)	$	522,190
Segment operating income	$	118,425	$	11,735	$	(34,217	)	$	95,943



For the six months ended June 30, 2018
	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	40,680	$	4,496	$	—		$	45,176
Subscriptions	97,321		4,716		—			102,037
Software services	85,289		11,324		—			96,613
Maintenance	177,609		12,364		—			189,973
Appraisal services	—		10,926		—			10,926
Hardware and other	7,526		33		4,950			12,509
Intercompany	6,322		—		(6,322		)	—
Total revenues	$	414,747	$	43,859	$	(1,372	)	$	457,234
Segment operating income	$	115,032	$	10,149	$	(30,739	)	$	94,442



	Three Months Ended June 30,						Six Months Ended June 30,
Reconciliation of reportable segment operating income to the Company's consolidated totals:	2019			2018			2019			2018
Total segment operating income	$	49,920		$	46,907		$	95,943		$	94,442
Amortization of acquired software	(7,988		)	(5,724		)	(14,670		)	(11,106		)
Amortization of customer and trade name intangibles	(5,266		)	(4,041		)	(10,116		)	(7,356		)
Other (expense) income, net	(247		)	558			339			1,157
Income before income taxes	$	36,419		$	37,700		$	71,496		$	77,137