Segment and Related Information

6 Months Ended

Jun. 30, 2020

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 six 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 management software solutions;

•courts and justice and public safety software solutions;

•data and insights solutions;

•case management and business management solutions; and

•appraisal and tax software solutions, property appraisal services and land and vital records management software solutions.

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; the data and insights solutions unit; and case management and business management solutions units 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, 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, land and vital records management 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. Due to the shelter-in-place orders caused by the COVID-19 pandemic, we cancelled our company-wide user conference for the current year.

As of January 1, 2020, the land and vital records management business unit, which was previously reported in the ES segment, was moved to the A&T segment. These changes were made to reflect changes in the way in which management makes operating decisions, allocates resources, and manages the growth and profitability of the Company. Prior year amounts for the ES and A&T segments have been adjusted to reflect the segment change.

For the three months ended June 30, 2020
	Enterprise Software		Appraisal and Tax		Corporate		Totals
Revenues
Software licenses and royalties	$	14,683	$	2,342	$	—	$	17,025
Subscriptions	79,128		6,510		—		85,638
Software services	38,899		4,755		—		43,654
Maintenance	107,336		9,424		—		116,760
Appraisal services	—		4,696		—		4,696
Hardware and other	3,300		18		—		3,318
Intercompany	4,533		2		(4,535)		—
Total revenues	$	247,879	$	27,747	$	(4,535)	$	271,091
Segment operating income	$	69,025	$	6,148	$	(20,434)	$	54,739

For the three months ended June 30, 2019
	Enterprise Software		Appraisal and Tax		Corporate		Totals
Revenues
Software licenses and royalties	$	17,555	$	3,120	$	—	$	20,675
Subscriptions	69,386		4,089		—		73,475
Software services	48,404		8,997		—		57,401
Maintenance	97,641		9,048		—		106,689
Appraisal services	—		6,233		—		6,233
Hardware and other	4,493		5		6,153		10,651
Intercompany	3,576		84		(3,660)		—
Total revenues	$	241,055	$	31,576	$	2,493	$	275,124
Segment operating income	$	59,668	$	7,923	$	(17,671)	$	49,920

For the six months ended June 30, 2020
	Enterprise Software		Appraisal and Tax		Corporate		Totals
Revenues
Software licenses and royalties	$	30,634	$	5,128	$	—	$	35,762
Subscriptions	$	155,772	$	11,589	—		$	167,361
Software services	$	83,848	$	11,939	—		$	95,787
Maintenance	$	212,177	$	18,948	—		$	231,125
Appraisal services	$	0	$	10,459	—		$	10,459
Hardware and other	$	7,091	$	45	$	2	$	7,138
Intercompany	8,534		20		(8,554)		—
Total revenues	$	498,056	$	58,128	$	(8,552)	$	547,632
Segment operating income	$	129,497	$	13,056	$	(40,502)	$	102,051

For the six months ended June 30, 2019
	Enterprise Software		Appraisal and Tax		Corporate		Totals
Revenues
Software licenses and royalties	$	36,077	$	6,391	$	—	$	42,468
Subscriptions	132,641		8,109		—		140,750
Software services	88,860		16,984		—		105,844
Maintenance	188,829		18,012		—		206,841
Appraisal services	0		11,447		—		11,447
Hardware and other	8,623		67		6,150		14,840
Intercompany	7,060		153		(7,213)		—
Total revenues	$	462,090	$	61,163	$	(1,063)	$	522,190
Segment operating income	$	115,142	$	15,018	$	(34,217)	$	95,943

	Three Months Ended June 30,				Six Months Ended June 30,
Reconciliation of reportable segment operating income to the Company's consolidated totals:	2020		2019		2020		2019
Total segment operating income	$	54,739	$	49,920	$	102,051	$	95,943
Amortization of acquired software	(8,006)		(7,988)		(16,033)		(14,670)
Amortization of customer and trade name intangibles	(5,392)		(5,266)		(10,784)		(10,116)
Other income (expense), net	470		(247)		1,460		339
Income before income taxes	$	41,811	$	36,419	$	76,694	$	71,496