Segment and Related Information

9 Months Ended

Sep. 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 education, courts and justice, public safety, planning, regulatory and maintenance, land and vital records management and data and insights. 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, 2019
	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	23,449	$	1,930	$	—		$	25,379
Subscriptions	72,398		2,874		—			75,272
Software services	46,296		8,701		—			54,997
Maintenance	103,438		6,395		—			109,833
Appraisal services	—		6,008		—			6,008
Hardware and other	3,925		—		(14		)	3,911
Intercompany	4,029		—		(4,029		)	—
Total revenues	$	253,535	$	25,908	$	(4,043	)	$	275,400
Segment operating income	$	64,140	$	7,577	$	(18,043	)	$	53,674



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, 2019
	Enterprise Software		Appraisal and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	60,443	$	7,404	$	—		$	67,847
Subscriptions	207,907		8,115		—			216,022
Software services	138,404		22,437		—			160,841
Maintenance	297,933		18,741		—			316,674
Appraisal services	—		17,455		—			17,455
Hardware and other	12,613		2		6,136			18,751
Intercompany	11,242		—		(11,242		)	—
Total revenues	$	728,542	$	74,154	$	(5,106	)	$	797,590
Segment operating income	$	182,565	$	19,312	$	(52,260	)	$	149,617



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



	Three Months Ended September 30,						Nine Months Ended September 30,
Reconciliation of reportable segment operating income to the Company's consolidated totals:	2019			2018			2019			2018
Total segment operating income	$	53,674		$	47,868		$	149,617		$	142,310
Amortization of acquired software	(7,975		)	(5,897		)	(22,645		)	(17,003		)
Amortization of customer and trade name intangibles	(5,646		)	(4,386		)	(15,762		)	(11,742		)
Other income, net	499			1,041			838			2,198
Income before income taxes	$	40,552		$	38,626		$	112,048		$	115,763