Segment and Related Information

9 Months Ended

Sep. 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 process 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, courts and justice and public safety software solutions unit; the data and insights solutions unit; and case management and business process management 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, data and insights, case management and business process management. 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. Corporate segment operating income 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 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 September 30, 2020
	Enterprise Software		Appraisal and Tax		Corporate		Totals
Revenues
Software licenses and royalties	$	17,798	$	2,139	$	—	$	19,937
Subscriptions	82,972		6,318		—		89,290
Software services	42,640		5,306		—		47,946
Maintenance	108,270		9,709		—		117,979
Appraisal services	—		5,394		—		5,394
Hardware and other	5,131		69		—		5,200
Intercompany	5,128		38		(5,166)		—
Total revenues	$	261,939	$	28,973	$	(5,166)	$	285,746
Segment operating income	$	79,911	$	8,318	$	(25,216)	$	63,013

For the three months ended September 30, 2019
	Enterprise Software		Appraisal and Tax		Corporate		Totals
Revenues
Software licenses and royalties	$	22,954	$	2,425	$	—	$	25,379
Subscriptions	70,833		4,439		—		75,272
Software services	44,752		10,245		—		54,997
Maintenance	100,519		9,314		—		109,833
Appraisal services	—		6,008		—		6,008
Hardware and other	3,887		38		(14)		3,911
Intercompany	3,995		34		(4,029)		—
Total revenues	$	246,940	$	32,503	$	(4,043)	$	275,400
Segment operating income	$	62,539	$	9,178	$	(18,043)	$	53,674

For the nine months ended September 30, 2020
	Enterprise Software		Appraisal and Tax		Corporate		Totals
Revenues
Software licenses and royalties	$	48,432	$	7,267	$	—	$	55,699
Subscriptions	$	238,744	$	17,907	—		$	256,651
Software services	$	126,488	$	17,245	—		$	143,733
Maintenance	$	320,447	$	28,657	—		$	349,104
Appraisal services	—		$	15,853	—		$	15,853
Hardware and other	$	12,222	$	114	$	2	$	12,338
Intercompany	13,662		58		(13,720)		—
Total revenues	$	759,995	$	87,101	$	(13,718)	$	833,378
Segment operating income	$	209,408	$	21,374	$	(65,718)	$	165,064

For the nine months ended September 30, 2019
	Enterprise Software		Appraisal and Tax		Corporate		Totals
Revenues
Software licenses and royalties	$	59,031	$	8,816	$	—	$	67,847
Subscriptions	203,474		12,548		—		216,022
Software services	133,612		27,229		—		160,841
Maintenance	289,348		27,326		—		316,674
Appraisal services	—		17,455		—		17,455
Hardware and other	12,510		105		6,136		18,751
Intercompany	11,055		187		(11,242)		—
Total revenues	$	709,030	$	93,666	$	(5,106)	$	797,590
Segment operating income	$	177,681	$	24,196	$	(52,260)	$	149,617

	Three Months Ended September 30,				Nine Months Ended September 30,
Reconciliation of reportable segment operating income to the Company's consolidated totals:	2020		2019		2020		2019
Total segment operating income	$	63,013	$	53,674	$	165,064	$	149,617
Amortization of acquired software	(7,965)		(7,975)		(23,998)		(22,645)
Amortization of customer and trade name intangibles	(5,392)		(5,646)		(16,176)		(15,762)
Other income, net	280		499		1,740		838
Income before income taxes	$	49,936	$	40,552	$	126,630	$	112,048