QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification no.) |
(Address of principal executive offices) | (City) | (State) | (Zip code) |
Title of each class | Trading symbol | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Subscriptions | $ | $ | $ | $ | ||||||||||||||||||||||
Maintenance | ||||||||||||||||||||||||||
Professional services | ||||||||||||||||||||||||||
Software licenses and royalties | ||||||||||||||||||||||||||
Hardware and other | ||||||||||||||||||||||||||
Total revenues | ||||||||||||||||||||||||||
Cost of revenues: | ||||||||||||||||||||||||||
Subscriptions, maintenance, and professional services | ||||||||||||||||||||||||||
Software licenses and royalties | ||||||||||||||||||||||||||
Amortization of software development | ||||||||||||||||||||||||||
Amortization of acquired software | ||||||||||||||||||||||||||
Hardware and other | ||||||||||||||||||||||||||
Total cost of revenues | ||||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||
Sales and marketing expense | ||||||||||||||||||||||||||
General and administrative expense | ||||||||||||||||||||||||||
Research and development expense | ||||||||||||||||||||||||||
Amortization of other intangibles | ||||||||||||||||||||||||||
Operating income | ||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
Other income, net | ||||||||||||||||||||||||||
Income before income taxes | ||||||||||||||||||||||||||
Income tax provision | ||||||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Earnings per common share: | ||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||
Securities available-for-sale and transferred securities: | ||||||||||||||||||||||||||
Change in net unrealized holding (loss) gain on available for sale securities during the period | ( | ( | ( | |||||||||||||||||||||||
Reclassification adjustment of unrealized losses on securities transferred from held-to-maturity | ( | |||||||||||||||||||||||||
Reclassification adjustment for net loss on sale of available for sale securities, included in net income | ||||||||||||||||||||||||||
Other comprehensive (loss) income, net of tax | ( | ( | ( | |||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
June 30, 2023 (unaudited) | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable (less allowance for losses and sales adjustments of $ | |||||||||||
Short-term investments | |||||||||||
Prepaid expenses | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Accounts receivable, long-term | |||||||||||
Operating lease right-of-use assets | |||||||||||
Property and equipment, net | |||||||||||
Other assets: | |||||||||||
Software development costs, net | |||||||||||
Goodwill | |||||||||||
Other intangibles, net | |||||||||||
Non-current investments | |||||||||||
Other non-current assets | |||||||||||
$ | $ | ||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Current income tax payable | |||||||||||
Deferred revenue | |||||||||||
Current portion of term loans | |||||||||||
Total current liabilities | |||||||||||
Term loans, net | |||||||||||
Convertible senior notes due 2026, net | |||||||||||
Deferred revenue, long-term | |||||||||||
Deferred income taxes | |||||||||||
Operating lease liabilities, long-term | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Shareholders' equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive loss, net of tax | ( | ( | |||||||||
Retained earnings | |||||||||||
Treasury stock, at cost; | ( | ( | |||||||||
Total shareholders' equity | |||||||||||
$ | $ |
Six Months Ended June 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Losses (gains) from sale of investments | ( | |||||||||||||
Share-based compensation expense | ||||||||||||||
Amortization of operating lease right-of-use assets | ||||||||||||||
Deferred income tax benefit | ( | ( | ||||||||||||
Other | ||||||||||||||
Changes in operating assets and liabilities, exclusive of effects of acquired companies: | ||||||||||||||
Accounts receivable | ( | ( | ||||||||||||
Income tax payable | ( | |||||||||||||
Prepaid expenses and other current assets | ( | ( | ||||||||||||
Accounts payable | ||||||||||||||
Operating lease liabilities | ( | ( | ||||||||||||
Accrued liabilities | ( | ( | ||||||||||||
Deferred revenue | ( | |||||||||||||
Other long-term liabilities | ||||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows from investing activities: | ||||||||||||||
Additions to property and equipment | ( | ( | ||||||||||||
Purchase of marketable security investments | ( | ( | ||||||||||||
Proceeds and maturities from marketable security investments | ||||||||||||||
Investment in software development | ( | ( | ||||||||||||
Cost of acquisitions, net of cash acquired | ( | ( | ||||||||||||
Other | ||||||||||||||
Net cash used by investing activities | ( | ( | ||||||||||||
Cash flows from financing activities: | ||||||||||||||
Payment on term loans | ( | ( | ||||||||||||
Proceeds from exercise of stock options, net of withheld shares for taxes upon equity award settlement | ( | |||||||||||||
Contributions from employee stock purchase plan | ||||||||||||||
Net cash used by financing activities | ( | ( | ||||||||||||
Net decrease in cash and cash equivalents | ( | ( | ||||||||||||
Cash and cash equivalents at beginning of period | ||||||||||||||
Cash and cash equivalents at end of period | $ | $ |
Six Months Ended June 30, | |||||||||||
2023 | 2022 | ||||||||||
Supplemental cash flow information: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for income taxes, net | |||||||||||
Non-cash investing and financing activities: | |||||||||||
Non-cash additions to property and equipment | $ | $ | |||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Exercise of stock options and vesting of restricted stock units | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Employee taxes paid for withheld shares upon equity award settlement | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
Stock compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of shares pursuant to employee stock purchase plan | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | $ |
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Exercise of stock options and vesting of restricted stock units | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||
Employee taxes paid for withheld shares upon equity award settlement | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
Stock compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of shares pursuant to employee stock purchase plan | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | $ |
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive gain, net of tax | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Exercise of stock options and vesting of restricted stock units | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Employee taxes paid for withheld shares for taxes upon equity award settlement | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
Stock compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of shares pursuant to employee stock purchase plan | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | $ |
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Exercise of stock options and vesting of restricted stock units | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||
Employee taxes paid for withheld shares for taxes upon equity award settlement | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
Stock compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of shares pursuant to employee stock purchase plan | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | $ |
For the three months ended June 30, 2023 | Enterprise Software | Platform Technologies | Corporate | Totals | ||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Subscriptions: | ||||||||||||||||||||||||||
SaaS | $ | $ | $ | $ | ||||||||||||||||||||||
Transaction-based fees | ||||||||||||||||||||||||||
Maintenance | ||||||||||||||||||||||||||
Professional services | ||||||||||||||||||||||||||
Software licenses and royalties | ||||||||||||||||||||||||||
Hardware and other | ||||||||||||||||||||||||||
Intercompany | ( | — | ||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Segment operating income (loss) | $ | $ | $ | ( | $ |
For the three months ended June 30, 2022 | Enterprise Software | Platform Technologies | Corporate | Totals | ||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Subscriptions: | ||||||||||||||||||||||||||
SaaS | $ | $ | $ | $ | ||||||||||||||||||||||
Transaction-based fees | ||||||||||||||||||||||||||
Maintenance | ||||||||||||||||||||||||||
Professional services | ||||||||||||||||||||||||||
Software licenses and royalties | ||||||||||||||||||||||||||
Hardware and other | ||||||||||||||||||||||||||
Intercompany | ( | — | ||||||||||||||||||||||||
Total revenues | $ | $ | $ | ( | $ | |||||||||||||||||||||
Segment operating income (loss) | $ | $ | $ | ( | $ |
For the six months ended June 30, 2023 | Enterprise Software | Platform Technologies | Corporate | Totals | ||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Subscriptions: | ||||||||||||||||||||||||||
SaaS | $ | $ | $ | $ | ||||||||||||||||||||||
Transaction-based fees | ||||||||||||||||||||||||||
Maintenance | ||||||||||||||||||||||||||
Professional services | ||||||||||||||||||||||||||
Software licenses and royalties | ||||||||||||||||||||||||||
Hardware and other | ||||||||||||||||||||||||||
Intercompany | ( | — | ||||||||||||||||||||||||
Total revenues | $ | $ | $ | ( | $ | |||||||||||||||||||||
Segment operating income (loss) | $ | $ | $ | ( | $ |
For the six months ended June 30, 2022 | Enterprise Software | Platform Technologies | Corporate | Totals | ||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Subscriptions: | ||||||||||||||||||||||||||
SaaS | $ | $ | $ | $ | ||||||||||||||||||||||
Transaction-based fees | ||||||||||||||||||||||||||
Maintenance | ||||||||||||||||||||||||||
Professional services | ||||||||||||||||||||||||||
Software licenses and royalties | ||||||||||||||||||||||||||
Hardware and other | ||||||||||||||||||||||||||
Intercompany | ( | — | ||||||||||||||||||||||||
Total revenues | $ | $ | $ | ( | $ | |||||||||||||||||||||
Segment operating income (loss) | $ | $ | $ | ( | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Reconciliation of reportable segment operating income to the Company's consolidated totals: | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Total segment operating income | $ | $ | $ | $ | ||||||||||||||||||||||
Amortization of acquired software | ( | ( | ( | ( | ||||||||||||||||||||||
Amortization of other intangibles | ( | ( | ( | ( | ||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
Other income, net | ||||||||||||||||||||||||||
Income before income taxes | $ | $ | $ | $ |
For the three months ended June 30, 2023 | Products and services transferred at a point in time | Products and services transferred over time | Total | |||||||||||||||||
Revenues | ||||||||||||||||||||
Subscriptions: | ||||||||||||||||||||
SaaS | $ | $ | $ | |||||||||||||||||
Transaction-based fees | ||||||||||||||||||||
Maintenance | ||||||||||||||||||||
Professional services | ||||||||||||||||||||
Software licenses and royalties | ||||||||||||||||||||
Hardware and other | ||||||||||||||||||||
Total | $ | $ | $ |
For the three months ended June 30, 2022 | Products and services transferred at a point in time | Products and services transferred over time | Total | |||||||||||||||||
Revenues | ||||||||||||||||||||
Subscriptions: | ||||||||||||||||||||
SaaS | $ | $ | $ | |||||||||||||||||
Transaction-based fees | ||||||||||||||||||||
Maintenance | ||||||||||||||||||||
Professional services | ||||||||||||||||||||
Software licenses and royalties | ||||||||||||||||||||
Hardware and other | ||||||||||||||||||||
Total | $ | $ | $ |
For the six months ended June 30, 2023 | Products and services transferred at a point in time | Products and services transferred over time | Total | |||||||||||||||||
Revenues | ||||||||||||||||||||
Subscriptions: | ||||||||||||||||||||
SaaS | $ | $ | $ | |||||||||||||||||
Transaction-based fees | ||||||||||||||||||||
Maintenance | ||||||||||||||||||||
Professional services | ||||||||||||||||||||
Software licenses and royalties | ||||||||||||||||||||
Hardware and other | ||||||||||||||||||||
Total | $ | $ | $ |
For the six months ended June 30, 2022 | Products and services transferred at a point in time | Products and services transferred over time | Total | |||||||||||||||||
Revenues | ||||||||||||||||||||
Subscriptions: | ||||||||||||||||||||
SaaS | $ | $ | $ | |||||||||||||||||
Transaction-based fees | ||||||||||||||||||||
Maintenance | ||||||||||||||||||||
Professional services | ||||||||||||||||||||
Software licenses and royalties | ||||||||||||||||||||
Hardware and other | ||||||||||||||||||||
Total | $ | $ | $ |
For the three months ended June 30, 2023 | Enterprise Software | Platform Technologies | Corporate | Totals | ||||||||||||||||||||||
Recurring revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Non-recurring revenues | ||||||||||||||||||||||||||
Intercompany | ( | — | ||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ |
For the three months ended June 30, 2022 | Enterprise Software | Platform Technologies | Corporate | Totals | ||||||||||||||||||||||
Recurring revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Non-recurring revenues | ||||||||||||||||||||||||||
Intercompany | ( | — | ||||||||||||||||||||||||
Total revenues | $ | $ | $ | ( | $ |
For the six months ended June 30, 2023 | Enterprise Software | Platform Technologies | Corporate | Totals | ||||||||||||||||||||||
Recurring revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Non-recurring revenues | ||||||||||||||||||||||||||
Intercompany | ( | — | ||||||||||||||||||||||||
Total revenues | $ | $ | $ | ( | $ |
For the six months ended June 30, 2022 | Enterprise Software | Platform Technologies | Corporate | Totals | ||||||||||||||||||||||
Recurring revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Non-recurring revenues | ||||||||||||||||||||||||||
Intercompany | ( | — | ||||||||||||||||||||||||
Total revenues | $ | $ | $ | ( | $ |
June 30, 2023 | December 31, 2022 | |||||||||||||
Enterprise Software | $ | $ | ||||||||||||
Platform Technologies | ||||||||||||||
Corporate | ||||||||||||||
Totals | $ | $ |
Six months ended June 30, 2023 | ||||||||
Balance as of December 31, 2022 | $ | |||||||
Deferral of revenue | ||||||||
Recognition of deferred revenue | ( | |||||||
Balance as of June 30, 2023 | $ |
Rate | Maturity Date | June 30, 2023 | December 31, 2022 | ||||||||||||||||||||
2021 Credit Agreement | |||||||||||||||||||||||
Revolving credit facility | S + | April 2026 | $ | $ | |||||||||||||||||||
Term Loan A-1 | S + | April 2026 | |||||||||||||||||||||
Term Loan A-2 | S + | April 2024 | |||||||||||||||||||||
Convertible Senior Notes due 2026 | March 2026 | ||||||||||||||||||||||
Total borrowings | |||||||||||||||||||||||
Less: unamortized debt discount and debt issuance costs | ( | ( | |||||||||||||||||||||
Total borrowings, net | |||||||||||||||||||||||
Less: current portion of debt | ( | ( | |||||||||||||||||||||
Carrying value | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Contractual interest expense - Revolving Credit Facility | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Contractual interest expense - Term Loans | ( | ( | ( | ( | |||||||||||||||||||
Contractual interest expense - Convertible Senior Notes | ( | ( | ( | ( | |||||||||||||||||||
Amortization of debt discount and debt issuance costs | ( | ( | ( | ( | |||||||||||||||||||
Total | $ | ( | $ | ( | $ | ( | $ | ( |
June 30, 2023 | December 31, 2022 | |||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Available-for-sale investments | ||||||||||||||
Equity investments | ||||||||||||||
Total | $ | $ |
June 30, 2023 | December 31, 2022 | ||||||||||
Amortized cost | $ | $ | |||||||||
Unrealized gains | |||||||||||
Unrealized losses | ( | ( | |||||||||
Estimated fair value | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Proceeds from sales and maturities | $ | $ | $ | $ | |||||||||||||||||||
Realized losses on sales, net of tax | ( | ( | ( | ( |
Unrealized Loss On Available-for-Sale Securities | Other | Accumulated Other Comprehensive Loss | |||||||||||||||
Balance as of March 31, 2023 | $ | ( | $ | $ | ( | ||||||||||||
Other comprehensive loss before reclassifications | ( | ( | |||||||||||||||
Reclassification adjustment of unrealized gains (losses) on securities transferred from held-to-maturity | |||||||||||||||||
Reclassification adjustment for net loss on sale of available-for-sale securities, included in net income | |||||||||||||||||
Other comprehensive loss | ( | ( | |||||||||||||||
Balance as of June 30, 2023 | $ | ( | $ | $ | ( |
Unrealized Loss On Available-for-Sale Securities | Other | Accumulated Other Comprehensive Loss | |||||||||||||||
Balance as of March 31, 2022 | $ | ( | $ | $ | ( | ||||||||||||
Other comprehensive loss before reclassifications | ( | ( | |||||||||||||||
Reclassification adjustment of unrealized gains (losses) on securities transferred from held-to-maturity | |||||||||||||||||
Reclassification adjustment for net loss on sale of available-for-sale securities, included in net income | |||||||||||||||||
Other comprehensive loss | ( | ( | |||||||||||||||
Balance as of June 30, 2022 | $ | ( | $ | $ | ( |
Unrealized Loss On Available-for-Sale Securities | Other | Accumulated Other Comprehensive Loss | |||||||||||||||
Balance as of December 31, 2022 | $ | ( | $ | $ | ( | ||||||||||||
Other comprehensive income before reclassifications | |||||||||||||||||
Reclassification adjustment of unrealized gains (losses) on securities transferred from held-to-maturity | |||||||||||||||||
Reclassification adjustment for net loss on sale of available-for-sale securities, included in net income | |||||||||||||||||
Other comprehensive income | |||||||||||||||||
Balance as of June 30, 2023 | $ | ( | $ | $ | ( |
Unrealized Loss On Available-for-Sale Securities | Other | Accumulated Other Comprehensive Loss | |||||||||||||||
Balance as of December 31, 2021 | $ | ( | $ | $ | ( | ||||||||||||
Other comprehensive loss before reclassifications | ( | ( | |||||||||||||||
Reclassification adjustment of unrealized losses on securities transferred from held-to-maturity | ( | ( | |||||||||||||||
Reclassification adjustment for net loss on sale of available-for-sale securities, included in net income | |||||||||||||||||
Other comprehensive loss | ( | ( | |||||||||||||||
Balance as of June 30, 2022 | $ | ( | $ | $ | ( |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Available-for-sale investments | $ | $ | $ | $ | |||||||||||||||||||
Equity investments | |||||||||||||||||||||||
2021 Credit Agreement | |||||||||||||||||||||||
Revolving Credit Facility | |||||||||||||||||||||||
Term Loan A-1 | |||||||||||||||||||||||
Term Loan A-2 | |||||||||||||||||||||||
Convertible Senior Notes due 2026 |
Fair Value at | Carrying Value at | ||||||||||||||||||||||
June 30, 2023 | December 31, 2022 | June 30, 2023 | December 31, 2022 | ||||||||||||||||||||
2021 Credit Agreement | |||||||||||||||||||||||
Revolving Credit Facility | $ | $ | $ | $ | |||||||||||||||||||
Term Loan A-1 | |||||||||||||||||||||||
Term Loan A-2 | |||||||||||||||||||||||
Convertible Senior Notes due 2026 | |||||||||||||||||||||||
$ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Subscriptions, maintenance, and professional services | $ | $ | $ | $ | ||||||||||||||||||||||
Sales and marketing expense | ||||||||||||||||||||||||||
General and administrative expense | ||||||||||||||||||||||||||
Total share-based compensation expense | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Numerator for basic and diluted earnings per share: | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted-average basic common shares outstanding | |||||||||||||||||||||||
Assumed conversion of dilutive securities: | |||||||||||||||||||||||
Stock awards | |||||||||||||||||||||||
Convertible Senior Notes | |||||||||||||||||||||||
Denominator for diluted earnings per share - Adjusted weighted-average shares | |||||||||||||||||||||||
Earnings per common share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ |
Lease Costs | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Operating lease cost | $ | $ | $ | $ | ||||||||||||||||||||||
Short-term lease cost | ||||||||||||||||||||||||||
Variable lease cost | ||||||||||||||||||||||||||
Net lease cost | $ | $ | $ | $ |
Other Information | Six Months Ended June 30, | |||||||||||||
2023 | 2022 | |||||||||||||
Cash flows: | ||||||||||||||
Cash paid amounts included in the measurement of lease liabilities: | ||||||||||||||
Operating cash outflows from operating leases | $ | $ | ||||||||||||
Right-of-use assets obtained in exchange for lease obligations (non-cash): | ||||||||||||||
Operating leases | $ | $ | ||||||||||||
Lease term and discount rate: | ||||||||||||||
Weighted average remaining lease term (years) | ||||||||||||||
Weighted average discount rate | % | % |
Year ending December 31, | Amount | |||||||
2023 (Remaining) | $ | |||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
Thereafter | ||||||||
Total | $ |
Percent of Total Revenues | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Subscriptions | 59.1 | % | 54.6 | % | 59.2 | % | 54.2 | % | |||||||||||||||
Maintenance | 23.1 | 24.9 | 23.7 | 25.3 | |||||||||||||||||||
Professional services | 13.2 | 15.4 | 13.0 | 15.3 | |||||||||||||||||||
Software licenses and royalties | 1.9 | 3.2 | 2.0 | 3.4 | |||||||||||||||||||
Hardware and other | 2.7 | 1.9 | 2.1 | 1.8 | |||||||||||||||||||
Total revenues | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||||||
Cost of revenues: | |||||||||||||||||||||||
Subscriptions, maintenance, and professional services | 50.7 | 53.4 | 52.1 | 53.3 | |||||||||||||||||||
Software licenses, royalties, and amortization of acquired software | 2.3 | 3.3 | 2.3 | 3.2 | |||||||||||||||||||
Amortization of software development | 0.6 | 0.3 | 0.6 | 0.3 | |||||||||||||||||||
Hardware and other | 2.2 | 1.7 | 1.7 | 1.4 | |||||||||||||||||||
Sales and marketing expense | 7.4 | 6.8 | 7.6 | 7.3 | |||||||||||||||||||
General and administrative expense | 15.4 | 14.5 | 15.4 | 14.1 | |||||||||||||||||||
Research and development expense | 5.6 | 5.0 | 5.6 | 5.1 | |||||||||||||||||||
Amortization of customer and trade name intangibles | 3.6 | 2.9 | 3.8 | 3.1 | |||||||||||||||||||
Operating income | 12.2 | 12.1 | 10.9 | 12.2 | |||||||||||||||||||
Interest expense | (1.3) | (1.3) | (1.4) | (1.2) | |||||||||||||||||||
Other income, net | 0.1 | — | 0.2 | 0.1 | |||||||||||||||||||
Income before income taxes | 11.0 | 10.8 | 9.7 | 11.1 | |||||||||||||||||||
Income tax (benefit) provision | 1.4 | 2.3 | 1.5 | 2.4 | |||||||||||||||||||
Net income | 9.6 | % | 8.5 | % | 8.2 | % | 8.7 | % |
Three Months Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
ES | $ | 154,554 | $ | 128,694 | $ | 25,860 | 20 | % | $ | 302,968 | $ | 249,010 | $ | 53,958 | 22 | % | ||||||||||||||||||||||||||||||||||
PT | 143,235 | 127,122 | 16,113 | 13 | 275,286 | 252,249 | 23,037 | 9 | ||||||||||||||||||||||||||||||||||||||||||
Total subscriptions revenue | $ | 297,789 | $ | 255,816 | $ | 41,973 | 16 | % | $ | 578,254 | $ | 501,259 | $ | 76,995 | 15 | % | ||||||||||||||||||||||||||||||||||
Less: Revenue from recent acquisitions1 | (4,607) | — | (4,607) | (10,857) | — | (10,857) | ||||||||||||||||||||||||||||||||||||||||||||
Total subscriptions revenue excluding acquisitions | $ | 293,182 | $ | 255,816 | $ | 37,366 | 15 | % | $ | 567,397 | $ | 501,259 | $ | 66,138 | 13 | % |
Three Months Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
ES | $ | 109,953 | $ | 110,760 | $ | (807) | (1) | % | $ | 220,035 | $ | 221,455 | $ | (1,420) | (1) | % | ||||||||||||||||||||||||||||||||||
PT | 6,586 | 6,055 | 531 | 9 | 11,635 | 12,389 | (754) | (6) | ||||||||||||||||||||||||||||||||||||||||||
Total maintenance revenue | $ | 116,539 | $ | 116,815 | $ | (276) | — | % | $ | 231,670 | $ | 233,844 | $ | (2,174) | (1) | % | ||||||||||||||||||||||||||||||||||
Less: Revenue from recent acquisitions 1 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Total maintenance revenue excluding acquisitions | $ | 116,539 | $ | 116,815 | $ | (276) | — | % | $ | 231,670 | $ | 233,844 | $ | (2,174) | (1) | % |
Three Months Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
ES | $ | 55,256 | $ | 50,653 | $ | 4,603 | 9 | % | $ | 106,755 | $ | 101,820 | $ | 4,935 | 5 | % | ||||||||||||||||||||||||||||||||||
PT | 11,164 | 21,284 | (10,120) | (48) | 20,594 | 40,132 | (19,538) | (49) | ||||||||||||||||||||||||||||||||||||||||||
Total professional services revenue | $ | 66,420 | $ | 71,937 | $ | (5,517) | (8) | % | $ | 127,349 | $ | 141,952 | $ | (14,603) | (10) | % | ||||||||||||||||||||||||||||||||||
Less: Revenue from recent acquisitions 1 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Total professional services revenue excluding acquisitions | $ | 66,420 | $ | 71,937 | $ | (5,517) | (8) | % | $ | 127,349 | $ | 141,952 | $ | (14,603) | (10) | % |
Three Months Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
ES | $ | 9,479 | $ | 14,623 | $ | (5,144) | (35) | % | $ | 17,547 | $ | 30,728 | $ | (13,181) | (43) | % | ||||||||||||||||||||||||||||||||||
PT | 300 | 386 | (86) | (22) | 2,362 | 787 | 1,575 | 200 | ||||||||||||||||||||||||||||||||||||||||||
Total software licenses and royalties revenue | $ | 9,779 | $ | 15,009 | $ | (5,230) | (35) | % | $ | 19,909 | $ | 31,515 | $ | (11,606) | (37) | % | ||||||||||||||||||||||||||||||||||
Less: Revenue from recent acquisitions 1 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Total software licenses and royalties revenue excluding acquisitions | $ | 9,779 | $ | 15,009 | $ | (5,230) | (35) | % | $ | 19,909 | $ | 31,515 | $ | (11,606) | (37) | % |
Three Months Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
Subscriptions, maintenance, and professional services | $ | 255,789 | $ | 250,168 | $ | 5,621 | 2 | % | $ | 508,204 | $ | 493,000 | $ | 15,204 | 3 | % | ||||||||||||||||||||||||||||||||||
Software licenses and royalties | 2,432 | 1,547 | 885 | 57 | 4,745 | 2,992 | 1,753 | 59 | ||||||||||||||||||||||||||||||||||||||||||
Amortization of software development | 2,896 | 1,322 | 1,574 | 119 | 5,485 | 2,486 | 2,999 | 121 | ||||||||||||||||||||||||||||||||||||||||||
Amortization of acquired software | 8,924 | 14,039 | (5,115) | (36) | 17,844 | 27,260 | (9,416) | (35) | ||||||||||||||||||||||||||||||||||||||||||
Hardware and other | 11,061 | 8,161 | 2,900 | 36 | 16,841 | 13,188 | 3,653 | 28 | ||||||||||||||||||||||||||||||||||||||||||
Total cost of revenues | $ | 281,102 | $ | 275,237 | $ | 5,865 | 2 | % | $ | 553,119 | $ | 538,926 | $ | 14,193 | 3 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||||||||
Overall gross margin | 44.3 | % | 41.3 | % | 3.0 | % | 43.3 | % | 41.7 | % | 1.6 | % |
Three Months Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
Sales and marketing expense | $ | 37,103 | $ | 31,881 | $ | 5,222 | 16 | % | $ | 74,206 | $ | 67,087 | $ | 7,119 | 11 | % |
Three Months Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
General and administrative expense | $ | 77,681 | $ | 67,820 | $ | 9,861 | 15 | % | $ | 150,041 | $ | 130,509 | $ | 19,532 | 15 | % |
Three Months Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
Research and development expense | $ | 28,153 | $ | 23,386 | $ | 4,767 | 20 | % | $ | 55,139 | $ | 47,327 | $ | 7,812 | 17 | % |
Three Months Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
Amortization of other intangibles | $ | 18,366 | $ | 13,604 | $ | 4,762 | 35 | % | $ | 36,774 | $ | 28,318 | $ | 8,456 | 30 | % |
Three Months Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
Interest expense | $ | (6,387) | $ | (6,214) | $ | (173) | 3 | % | $ | (14,071) | $ | (11,018) | $ | (3,053) | 28 | % |
Three Months Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
Other income, net | $ | 643 | $ | 216 | $ | 427 | 198 | % | $ | 1,889 | $ | 581 | $ | 1,308 | 225 | % |
Three Months Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
Income tax (benefit) provision | $ | 7,000 | $ | 10,813 | $ | (3,813) | (35) | % | $ | 14,667 | $ | 22,258 | $ | (7,591) | (34)% | |||||||||||||||||||||||||||||||||||
Effective income tax rate | 12.5 | % | 21.3 | % | 15.5 | % | 21.8 | % |
2023 | 2022 | |||||||||||||
Cash flows provided (used) by: | ||||||||||||||
Operating activities | $ | 55,525 | $ | 130,220 | ||||||||||
Investing activities | (492) | (110,378) | ||||||||||||
Financing activities | (110,126) | (75,951) | ||||||||||||
Net decrease in cash and cash equivalents | $ | (55,093) | $ | (56,109) |
Exhibit 101.INS | Inline XBRL Instance Document - the Instance Document does not appear in the interactive data file because its XBRL tags, including Cover Page XBRL tags, are embedded within the Inline XBRL Document. | ||||||||||
Exhibit 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | ||||||||||
Exhibit 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||||||||
Exhibit 101.LAB | Inline XBRL Extension Labels Linkbase Document. | ||||||||||
Exhibit 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||||||||
Exhibit 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||||||||
Exhibit 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
TYLER TECHNOLOGIES, INC. | |||||
By: | /s/ Brian K. Miller | ||||
Brian K. Miller | |||||
Executive Vice President and Chief Financial Officer | |||||
(principal financial officer and an authorized signatory) |
Date: July 26, 2023 | By: | /s/ H. Lynn Moore, Jr. | ||||||||||||
H. Lynn Moore, Jr. | ||||||||||||||
President and Chief Executive Officer |
Date: July 26, 2023 | By: | /s/ Brian K. Miller | ||||||||||||
Brian K. Miller | ||||||||||||||
Executive Vice President and Chief Financial Officer |
Date: July 26, 2023 | By: | /s/ H. Lynn Moore, Jr. | ||||||||||||
H. Lynn Moore, Jr. | ||||||||||||||
President and Chief Executive Officer | ||||||||||||||
Date: July 26, 2023 | By: | /s/ Brian K. Miller | ||||||||||||
Brian K. Miller | ||||||||||||||
Executive Vice President and Chief Financial Officer |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Revenues: | ||||
Total revenues | $ 504,279 | $ 468,685 | $ 976,133 | $ 924,792 |
Cost of revenues: | ||||
Total cost of revenues | 281,102 | 275,237 | 553,119 | 538,926 |
Gross profit | 223,177 | 193,448 | 423,014 | 385,866 |
Sales and marketing expense | 37,103 | 31,881 | 74,206 | 67,087 |
General and administrative expense | 77,681 | 67,820 | 150,041 | 130,509 |
Research and development expense | 28,153 | 23,386 | 55,139 | 47,327 |
Amortization of other intangibles | 18,366 | 13,604 | 36,774 | 28,318 |
Operating income | 61,874 | 56,757 | 106,854 | 112,625 |
Interest expense | (6,387) | (6,214) | (14,071) | (11,018) |
Other income, net | 643 | 216 | 1,889 | 581 |
Income before income taxes | 56,130 | 50,759 | 94,672 | 102,188 |
Income tax provision | 7,000 | 10,813 | 14,667 | 22,258 |
Net income | $ 49,130 | $ 39,946 | $ 80,005 | $ 79,930 |
Earnings per common share: | ||||
Basic (in usd per share) | $ 1.17 | $ 0.96 | $ 1.91 | $ 1.93 |
Diluted (in usd per share) | $ 1.15 | $ 0.94 | $ 1.87 | $ 1.88 |
Subscriptions | ||||
Revenues: | ||||
Total revenues | $ 297,789 | $ 255,816 | $ 578,254 | $ 501,259 |
Subscriptions, maintenance, and professional services | ||||
Cost of revenues: | ||||
Total cost of revenues | 255,789 | 250,168 | 508,204 | 493,000 |
Maintenance | ||||
Revenues: | ||||
Total revenues | 116,539 | 116,815 | 231,670 | 233,844 |
Professional services | ||||
Revenues: | ||||
Total revenues | 66,420 | 71,937 | 127,349 | 141,952 |
Software licenses and royalties | ||||
Revenues: | ||||
Total revenues | 9,779 | 15,009 | 19,909 | 31,515 |
Cost of revenues: | ||||
Total cost of revenues | 2,432 | 1,547 | 4,745 | 2,992 |
Hardware and other | ||||
Revenues: | ||||
Total revenues | 13,752 | 9,108 | 18,951 | 16,222 |
Cost of revenues: | ||||
Total cost of revenues | 11,061 | 8,161 | 16,841 | 13,188 |
Amortization of software development | ||||
Cost of revenues: | ||||
Total cost of revenues | 2,896 | 1,322 | 5,485 | 2,486 |
Amortization of acquired software | ||||
Cost of revenues: | ||||
Total cost of revenues | $ 8,924 | $ 14,039 | $ 17,844 | $ 27,260 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 49,130 | $ 39,946 | $ 80,005 | $ 79,930 |
Securities available-for-sale and transferred securities: | ||||
Change in net unrealized holding (loss) gain on available for sale securities during the period | (36) | (114) | 58 | (743) |
Reclassification adjustment of unrealized losses on securities transferred from held-to-maturity | 0 | 0 | 0 | (27) |
Reclassification adjustment for net loss on sale of available for sale securities, included in net income | 1 | 48 | 1 | 7 |
Other comprehensive (loss) income, net of tax | (35) | (66) | 59 | (763) |
Comprehensive income | $ 49,095 | $ 39,880 | $ 80,064 | $ 79,167 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 19,643 | $ 14,761 |
Preferred stock, par value (in usd per share) | $ 10.00 | $ 10.00 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 48,147,969 | 48,147,969 |
Common stock, shares outstanding (in shares) | 48,147,969 | 48,147,969 |
Treasury stock (in shares) | 6,081,263 | 6,364,991 |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation We prepared the accompanying condensed consolidated financial statements following the requirements of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States, or GAAP, for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted for interim periods. Balance sheet amounts are as of June 30, 2023, and December 31, 2022, and operating result amounts are for the three and six months ended June 30, 2023, and 2022, respectively, and include all normal and recurring adjustments that we considered necessary for the fair summarized presentation of our financial position and operating results. As these are condensed financial statements, one should also read the financial statements and notes included in our latest Form 10-K for the year ended December 31, 2022. Revenues, expenses, assets, and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be the same as those for the full year. Certain amounts for the previous year have been reclassified to conform to the current year presentation. As of January 1, 2023, we have elected to no longer report the appraisal services revenue and related costs as separate categories in the statement of income due to less significance on our overall operating results. Therefore, we have combined the appraisal services revenue category with the professional services revenue category; and the related cost of revenue category for appraisal services is now combined with the cost of revenue category related to subscriptions, maintenance and professional services on the condensed consolidated statements of income for all reporting periods presented. Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all components of net income (loss) and other comprehensive income (loss). During the three and six months ended June 30, 2023, we had approximately $35,000 of other comprehensive loss and $59,000 of other comprehensive income, net of taxes, from our available-for-sale investment holdings and $66,000 and $763,000 of other comprehensive loss during the three and six months ended June 30, 2022.
|
Accounting Standards and Significant Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Accounting Standards and Significant Accounting Policies | Accounting Standards and Significant Accounting Policies SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES There have been no changes to our significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 22, 2023, that have had a material impact on our condensed consolidated financial statements and related notes. See Recently Adopted Accounting Pronouncements below. REVENUE RECOGNITION Nature of Products and Services The Company accounts for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. We earn the majority of our revenues from subscription-based services and post-contract customer support (“PCS” or “maintenance”). Other sources of revenue are professional services, software licenses and royalties, and hardware and other. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We determine revenue recognition through the following steps: •Identification of the contract, or contracts, with a customer •Identification of the performance obligations in the contract •Determination of the transaction price •Allocation of the transaction price to the performance obligations in the contract •Recognition of revenue when, or as, we satisfy a performance obligation Subscriptions revenue consists of revenue derived from our software as a service ("SaaS") arrangements and transaction-based fees primarily related to digital government services and payment processing. We also provide electronic document filing solutions (“e-filing”) that simplify the filing and management of court related documents for courts and law offices. E-filing revenue is derived from transaction fees and fixed fee arrangements. For transaction-based fees, we have the right to charge the customer an amount that directly corresponds with the value to the customer of our performance to date. Therefore, we recognize revenue for these services over time based on the amount billable to the customer in accordance with the 'as invoiced' practical expedient in ASC 606-10-55-18. In some cases, we are paid on a fixed fee basis and recognize the revenue ratably over the contractual period. Typically, the structure of our arrangements does not give rise to variable consideration. However, in those instances whereby variable consideration exists, we include in our estimates, additional revenue for variable consideration when we believe we have an enforceable right, the amount can be estimated reliably and its realization is probable. Other software arrangements with customers contain multiple performance obligations that range from software licenses, installation, training, and consulting to software modification and customization to meet specific customer needs (services), hosting, and PCS. For these contracts, we account for individual performance obligations separately when they are distinct. We evaluate whether separate performance obligations can be distinct or should be accounted for as one performance obligation. Arrangements that include professional services, such as training or installation, are evaluated to determine whether those services are highly interdependent or interrelated to the product’s functionality. The transaction price is allocated to the distinct performance obligations on a relative standalone selling price (“SSP”) basis. We determine the SSP based on our overall pricing objectives, taking into consideration market conditions and other factors, including the value of our contracts, the applications sold, customer demographics, and the number and types of users within our contracts. For arrangements that involve significant production, modification, or customization of the software, or where professional services otherwise cannot be considered distinct, we recognize revenue as control is transferred to the customer over time using progress-to-completion methods. Depending on the contract, we measure progress-to-completion primarily using labor hours incurred, or value added. Amounts recognized in revenue are calculated using the progress-to-completion measurement after giving effect to any changes in our cost estimates. Changes to total estimated contract costs, if any, are recorded in the period they are determined. Estimated losses on uncompleted contracts are recorded in the period in which we first determine that a loss is apparent. Revenue is recognized net of allowances for sales adjustments and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refer to Note 4, “Disaggregation of Revenue,” for further information, including the economic factors that affect the nature, amount, timing, and uncertainty of revenue and cash flows of our various revenue categories. Contract Balances: Accounts receivable and allowance for losses and sales adjustments Timing of revenue recognition may differ from the timing of invoicing to customers. We record an unbilled receivable when revenue is recognized prior to invoicing, or deferred revenue when invoicing occurs prior to revenue recognition. For multi-year agreements, we generally invoice customers annually at the beginning of each annual coverage period. We record an unbilled receivable related to revenue recognized for on-premises licenses as we have an unconditional right to invoice and receive payment in the future related to those licenses. At June 30, 2023, and December 31, 2022, total current and long-term accounts receivable, net of allowance for losses and sales adjustments, was $647.0 million and $585.5 million, respectively. We have recorded unbilled receivables of $127.1 million and $135.4 million at June 30, 2023 and December 31, 2022, respectively. Included in unbilled receivables are retention receivables of $9.2 million and $8.6 million at June 30, 2023 and December 31, 2022, respectively, which become payable upon the completion of the contract or completion of our fieldwork and formal hearings. Unbilled receivables expected to be collected within one year have been included with accounts receivable, current portion in the accompanying condensed consolidated balance sheets. Unbilled receivables and retention receivables expected to be collected past one year have been included with accounts receivable, long-term portion in the accompanying condensed consolidated balance sheets. We maintain allowances for losses and sales adjustments, which are recorded against revenue at the time the loss is incurred. Since most of our clients are domestic governmental entities, we rarely incur a credit loss resulting from the inability of a client to make required payments. Events or changes in circumstances that indicate the carrying amount for the allowances for losses and sales adjustments may require revision, include, but are not limited to, managing our client’s expectations regarding the scope of the services to be delivered and defects or errors in new versions or enhancements of our software products. Our allowance for losses and sales adjustments of $19.6 million and $14.8 million at June 30, 2023 and December 31, 2022, respectively, does not include provisions for credit losses. Because we rarely experience credit losses with our clients, we have not recorded a material reserve for credit losses. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTSThere were no new not yet adopted accounting pronouncements currently issued that would affect the Company or have a material impact on its consolidated financial position or results of operations in future periods.
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Segment and Related Information |
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Segment and Related Information | Segment and Related Information We provide integrated information management solutions and services for the public sector. We provide our software systems and related professional 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 software solutions; •courts and justice and public safety software solutions; •property and recording solutions; •platform solutions including case management and business process management; and •digital solutions including payments and government services. In accordance with ASC 280-10, Segment Reporting, we report our results in two reportable segments. The Enterprise Software ("ES") reportable 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; planning, regulatory and maintenance; courts and justice; public safety; and property and recording solutions. The Platform Technologies ("PT") reportable segment provides public sector entities with software solutions to perform transaction processing, streamline data processing, and improve operations and workflows such as platform solutions and digital solutions. 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 loss primarily consists of compensation costs for the executive management team, certain shared services staff, and share-based compensation expense for the entire company. Corporate segment operating loss also includes revenues and expenses related to a company-wide user conference.
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Disaggregation of Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Disaggregation of Revenue The tables below show disaggregation of revenue into categories that reflect how economic factors affect the nature, amount, timing, and uncertainty of revenues and cash flows. Timing of Revenue Recognition Timing of revenue recognition by revenue category during the period is as follows:
Recurring Revenues The majority of our revenue is comprised of revenues from subscriptions and maintenance, which we consider to be recurring revenues. Subscriptions revenue primarily consists of revenues derived from our SaaS arrangements and transaction-based fees, which relate to digital government services, e-filing transactions, and payment processing. The contract terms for subscription arrangements range from to 10 years but are typically contracted for initial periods of to five years. Virtually all of our on-premises software clients contract with us for maintenance and support, which provides us with a significant source of recurring revenues. That maintenance and support is generally provided under annual, or in some cases, multi-year contracts. We consider all other revenue categories to be non-recurring revenues. Recurring revenues and non-recurring revenues recognized during the period are as follows:
Total deferred revenue, including long-term, by segment is as follows:
Changes in total deferred revenue, including long-term, were as follows:
Transaction Price Allocated to the Remaining Performance Obligations The aggregate amount of transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized (“backlog”), which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Backlog as of June 30, 2023, was $1.90 billion, of which we expect to recognize approximately 46% as revenue over the next 12 months and the remainder thereafter. Deferred CommissionsSales commissions earned by our salesforce are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial contracts are deferred and then amortized commensurate with the recognition of associated revenue over a period of benefit that we have determined to be generally to seven years. Deferred commissions were $44.9 million and $43.8 million as of June 30, 2023, and December 31, 2022, respectively. Amortization expense was $4.3 million and $8.6 million for the three and six months ended June 30, 2023, respectively, and $3.7 million and $7.2 million for the three and six months ended 2022, respectively. There were no indicators of impairment in relation to the costs capitalized for the periods presented. Deferred commissions have been included with prepaid expenses for the current portion and non-current other assets for the long-term portion in the accompanying condensed consolidated balance sheets. Amortization expense related to deferred commissions is included in sales and marketing expense in the accompanying condensed consolidated statements of income.
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Deferred Revenue and Performance Obligations |
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Revenue and Performance Obligations | Disaggregation of Revenue The tables below show disaggregation of revenue into categories that reflect how economic factors affect the nature, amount, timing, and uncertainty of revenues and cash flows. Timing of Revenue Recognition Timing of revenue recognition by revenue category during the period is as follows:
Recurring Revenues The majority of our revenue is comprised of revenues from subscriptions and maintenance, which we consider to be recurring revenues. Subscriptions revenue primarily consists of revenues derived from our SaaS arrangements and transaction-based fees, which relate to digital government services, e-filing transactions, and payment processing. The contract terms for subscription arrangements range from to 10 years but are typically contracted for initial periods of to five years. Virtually all of our on-premises software clients contract with us for maintenance and support, which provides us with a significant source of recurring revenues. That maintenance and support is generally provided under annual, or in some cases, multi-year contracts. We consider all other revenue categories to be non-recurring revenues. Recurring revenues and non-recurring revenues recognized during the period are as follows:
Total deferred revenue, including long-term, by segment is as follows:
Changes in total deferred revenue, including long-term, were as follows:
Transaction Price Allocated to the Remaining Performance Obligations The aggregate amount of transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized (“backlog”), which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Backlog as of June 30, 2023, was $1.90 billion, of which we expect to recognize approximately 46% as revenue over the next 12 months and the remainder thereafter. Deferred CommissionsSales commissions earned by our salesforce are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial contracts are deferred and then amortized commensurate with the recognition of associated revenue over a period of benefit that we have determined to be generally to seven years. Deferred commissions were $44.9 million and $43.8 million as of June 30, 2023, and December 31, 2022, respectively. Amortization expense was $4.3 million and $8.6 million for the three and six months ended June 30, 2023, respectively, and $3.7 million and $7.2 million for the three and six months ended 2022, respectively. There were no indicators of impairment in relation to the costs capitalized for the periods presented. Deferred commissions have been included with prepaid expenses for the current portion and non-current other assets for the long-term portion in the accompanying condensed consolidated balance sheets. Amortization expense related to deferred commissions is included in sales and marketing expense in the accompanying condensed consolidated statements of income.
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Deferred Commissions |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Commissions | Disaggregation of Revenue The tables below show disaggregation of revenue into categories that reflect how economic factors affect the nature, amount, timing, and uncertainty of revenues and cash flows. Timing of Revenue Recognition Timing of revenue recognition by revenue category during the period is as follows:
Recurring Revenues The majority of our revenue is comprised of revenues from subscriptions and maintenance, which we consider to be recurring revenues. Subscriptions revenue primarily consists of revenues derived from our SaaS arrangements and transaction-based fees, which relate to digital government services, e-filing transactions, and payment processing. The contract terms for subscription arrangements range from to 10 years but are typically contracted for initial periods of to five years. Virtually all of our on-premises software clients contract with us for maintenance and support, which provides us with a significant source of recurring revenues. That maintenance and support is generally provided under annual, or in some cases, multi-year contracts. We consider all other revenue categories to be non-recurring revenues. Recurring revenues and non-recurring revenues recognized during the period are as follows:
Total deferred revenue, including long-term, by segment is as follows:
Changes in total deferred revenue, including long-term, were as follows:
Transaction Price Allocated to the Remaining Performance Obligations The aggregate amount of transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized (“backlog”), which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Backlog as of June 30, 2023, was $1.90 billion, of which we expect to recognize approximately 46% as revenue over the next 12 months and the remainder thereafter. Deferred CommissionsSales commissions earned by our salesforce are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial contracts are deferred and then amortized commensurate with the recognition of associated revenue over a period of benefit that we have determined to be generally to seven years. Deferred commissions were $44.9 million and $43.8 million as of June 30, 2023, and December 31, 2022, respectively. Amortization expense was $4.3 million and $8.6 million for the three and six months ended June 30, 2023, respectively, and $3.7 million and $7.2 million for the three and six months ended 2022, respectively. There were no indicators of impairment in relation to the costs capitalized for the periods presented. Deferred commissions have been included with prepaid expenses for the current portion and non-current other assets for the long-term portion in the accompanying condensed consolidated balance sheets. Amortization expense related to deferred commissions is included in sales and marketing expense in the accompanying condensed consolidated statements of income.
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Acquisitions |
6 Months Ended |
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Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions On October 31, 2022, we acquired Rapid Financial Solutions, LLC (Rapid), a provider of reliable, scalable, and secure payments with best-in-class card issuance and digital disbursement capabilities. The total purchase price, net of cash acquired of $2.2 million, was approximately $67.4 million, consisting of $51.5 million paid in cash and $18.2 million of common stock. We have performed a preliminary valuation analysis of the fair market value of Rapid’s assets and liabilities. In connection with this transaction, we acquired total tangible assets of $12.9 million and assumed liabilities of approximately $10.6 million. In the first quarter of 2023, we recorded $10.0 million for assumed liabilities related to litigation outstanding at the time of acquisition as the amount became probable and estimable and a related $10.0 million indemnification receivable from escrowed amounts established at acquisition. We recorded goodwill of approximately $40.0 million, all of which is expected to be deductible for tax purposes, and other identifiable intangible assets of approximately $27.6 million. The goodwill arising from this acquisition is primarily attributed to our ability to generate increased revenues, earnings and cash flow by expanding our addressable market and client base. The $27.6 million of intangible assets are attributable to customer relationships, acquired software, and trade name and will be amortized over a weighted average period of approximately 10 years. The operating results of Rapid are included with the operating results of the Platform Technologies segment since its date of acquisition and the impact of this acquisition on our operating results, assets, and liabilities is not material. As of June 30, 2023, the purchase price allocation for Rapid is not final; therefore, certain preliminary valuation estimates of fair value assumed at the acquisition date for intangible assets, receivables, and related deferred taxes are subject to change as valuations are finalized. Our balance sheet as of June 30, 2023, reflects the allocation of the purchase price to the net assets acquired based on their estimated fair value at the date of the acquisition. The fair value of the assets and liabilities acquired are based on valuations using Level 3 unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. For the six months ended June 30, 2023, we incurred fees of approximately $72,000 for financial advisory, legal, accounting, due diligence, valuation, and other various services necessary to complete acquisitions.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The following table summarizes our total outstanding borrowings related to the 2021 Credit Agreement and Convertible Senior Notes:
2021 Credit Agreement In connection with the completion of the acquisition of NIC, Inc. on April 21, 2021, we, as borrower, entered into a new $1.4 billion Credit Agreement (the “2021 Credit Agreement”) with the various lenders party thereto and Wells Fargo Bank, National Association, as Administrative Agent, Swingline Lender, and Issuing Lender. The 2021 Credit Agreement provides for (1) a senior unsecured revolving credit facility in an aggregate principal amount of up to $500 million, including sub-facilities for standby letters of credit and swingline loans (the “Revolving Credit Facility”), (2) an amortizing five-year term loan in the aggregate amount of $600 million (the “Term Loan A-1”), and (3) a non-amortizing three-year term loan in the aggregate amount of $300 million (the “Term Loan A-2”) and, together (the “Term Loans”). The 2021 Credit Agreement matures on April 20, 2026, and the loans may be prepaid at any time, without premium or penalty, subject to certain minimum amounts and payment of any breakage costs. In addition to the required amortization payments on the Term Loan A-1 of 5% annually, certain mandatory quarterly prepayments of the Term Loans and the Revolving Credit Facility will be required (i) upon the issuance or incurrence of additional debt not otherwise permitted under the 2021 Credit Agreement and (ii) upon the occurrence of certain asset sales and insurance and condemnation recoveries, subject to certain thresholds, baskets, and reinvestment provisions as provided in the 2021 Credit Agreement. On January 28, 2023, we amended our 2021 Credit Agreement to replace the LIBOR reference rate with the Secured Overnight Financing Rate (“SOFR”) reference rate. In accordance with our amended 2021 Credit Agreement, the borrowings under the Revolving Credit Facility and the Term Loan A-1 bear interest, at the Company’s option, at a per annum rate of either (1) the Administrative Agent’s prime commercial lending rate (subject to certain higher rate determinations) (the “Base Rate”) plus a margin of 0.125% to 0.75% or (2) the one-, three-, six-, or, subject to approval by all lenders, twelve-month SOFR rate plus a margin of 1.125% to 1.75%. The Term Loan A-2 bears interest, at the Company’s option, at a per annum rate of either (1) the Base Rate plus a margin of 0% to 0.5% or (2) the one-, three-, six-, or, subject to approval by all lenders, twelve-month SOFR rate plus a margin of 0.875% to 1.5%. The margin in each case is based upon the Company’s total net leverage ratio, as determined pursuant to the 2021 Credit Agreement. In addition to paying interest on the outstanding principal of loans under the Revolving Credit Facility, the Company is required to pay a commitment fee on the average daily unused portion of the Revolving Credit Facility, currently 0.25% per annum, ranging from 0.15% to 0.3% based upon the Company’s total net leverage ratio. The amended 2021 Credit Agreement requires us to maintain certain financial ratios and other financial conditions and prohibits us from making certain investments, advances, cash dividends or loans, and limits incurrence of additional indebtedness and liens. As of June 30, 2023, we were in compliance with those covenants. The carrying amount is the par value of the Revolving Credit Facility and Term Loans less the debt discount and debt issuance costs that are amortized to interest expense using the effective interest method over the terms of the Term Loans. Interest expense is included in the accompanying condensed consolidated statements of income. Convertible Senior Notes due 2026 On March 9, 2021, we issued 0.25% Convertible Senior Notes due 2026 in the aggregate principal amount of $600.0 million (“the Convertible Senior Notes” or “the Notes”). The Convertible Senior Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of March 9, 2021, with U.S. Bank National Association, as trustee. The net proceeds from the issuance of the Convertible Senior Notes were $591.4 million, net of initial purchasers’ discounts of $6.0 million and debt issuance costs of $2.6 million. The Convertible Senior Notes are senior, unsecured obligations and are (i) equal in right of payment with our future senior, unsecured indebtedness; (ii) senior in right of payment to our future indebtedness that is expressly subordinated to the Notes; (iii) effectively subordinated to our future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all future indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of our subsidiaries. The Convertible Senior Notes accrue interest at a rate of 0.25% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2021. The Convertible Senior Notes mature on March 15, 2026, unless earlier repurchased, redeemed, or converted. Before September 15, 2025, holders of the Convertible Senior Notes have the right to convert their Convertible Senior Notes only upon the occurrence of certain events. Under the terms of the Indenture, the Convertible Senior Notes are convertible into common stock of Tyler Technologies, Inc. (referred to as “our common stock” herein) at the following times or circumstances: •during any calendar quarter commencing after the calendar quarter ended June 30, 2021, if the last reported sale price per share of our common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; •during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “Measurement Period”) if the trading price per $1,000 principal amount of Convertible Senior Notes, as determined following a request by their holder in accordance with the procedures in the Indenture, for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day; •upon the occurrence of certain corporate events or distributions on our common stock, including but not limited to a “Fundamental Change” (as defined in the Indenture); •upon the occurrence of specified corporate events; or •on or after September 15, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date, March 15, 2026. With certain exceptions, upon a change of control or other fundamental change (both as defined in the Indenture governing the Convertible Senior Notes), the holders of the Convertible Senior Notes may require us to repurchase all or part of the principal amount of the Convertible Senior Notes at a repurchase price equal to 100% of the principal amount of the Convertible Senior Notes, plus any accrued and unpaid interest to, but excluding, the redemption date. As of June 30, 2023, none of the conditions allowing holders of the Convertible Senior Notes to convert have been met. From and including September 15, 2025, holders of the Convertible Senior Notes may convert their Convertible Senior Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. We will settle any conversions of the Convertible Senior Notes either entirely in cash or in a combination of cash and shares of our common stock, at our election. However, upon conversion of any Convertible Senior Notes, the conversion value, which will be determined over an “Observation Period” (as defined in the Indenture) consisting of 30 trading days, will be paid in cash up to at least the principal amount of the Notes being converted. The initial conversion rate is 2.0266 shares of common stock per $1,000 principal amount of Convertible Senior Notes, which represents an initial conversion price of approximately $493.44 per share of common stock. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. The Convertible Senior Notes are redeemable, in whole or in part, at our option at any time, and from time to time, on or after March 15, 2024 and on or before the 30th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, up to, but excluding, the redemption date, but only if the last reported sale price per share of our common stock exceeds 130% of the conversion price of the Notes on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (ii) the trading day immediately before the date we send such notice. In addition, calling any Note for redemption constitutes a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption. Effective Interest The weighted average interest rates for the borrowings under the 2021 Credit Agreement and Convertible Senior Notes due 2026 were 6.68% and 0.25%, as of June 30, 2023, respectively. During the six months ended June 30, 2023, the effective interest rates for our borrowings were 7.04% and 0.54% for the 2021 Credit Agreement and the Convertible Senior Notes, respectively. The following sets forth the interest expense recognized related to the borrowings under the 2021 Credit Agreement and Convertible Senior Notes and is included in interest expense in the accompanying condensed consolidated statements of income:
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Financial Instruments |
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Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | Financial Instruments The following table presents our financial instruments:
Cash and cash equivalents consist primarily of money market funds with original maturity dates of three months or less, for which we determine fair value through quoted market prices. Our available-for-sale investments primarily consist of investment grade corporate bonds, municipal bonds, and asset-backed securities with maturity dates through 2027. These investments are presented at fair value and are included in short-term investments and non-current investments in the accompanying condensed consolidated balance sheets. Unrealized gains or losses associated with the investments are included in accumulated other comprehensive loss, net of tax in the accompanying condensed consolidated balance sheets and statements of comprehensive income. For our available-for-sale investments, we do not have the intent to sell, nor is it more likely than not that we would be required to sell before recovery of their cost basis. As of June 30, 2023, we have an accrued interest receivable balance of approximately $102,000 which is included in accounts receivable, net. We do not measure an allowance for credit losses for accrued interest receivables. We record any losses within the maturity period or at the time of sale of the investment and any write-offs to accrued interest receivables are recorded as a reduction to interest income in the period of the loss. During the three and six months ended June 30, 2023, we have recorded no credit losses for accrued interest receivables. Interest income and amortization of discounts and premiums are included in other income, net in the accompanying condensed consolidated statements of income. The following table presents the components of our available-for-sale investments:
As of June 30, 2023, we have $19.1 million of available-for-sale debt securities with contractual maturities of one year or less and $10.1 million with contractual maturities great than one year. As of June 30, 2023, six available-for-sale debt securities with a fair value of $6.1 million have been in a loss position for one year or less and 27 securities with a fair value of $20.9 million have been in a loss position for greater than one year. The following table presents the activity on our available-for-sale investments:
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Other Comprehensive Income (Loss) |
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Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) The following table presents the changes in the balances of accumulated other comprehensive loss, net of tax by component:
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Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for that asset or liability. Guidance on fair value measurements and disclosures establishes a valuation hierarchy for disclosure of inputs used in measuring fair value defined as follows: •Level 1—Inputs are unadjusted quoted prices that are available in active markets for identical assets or liabilities. •Level 2—Inputs include quoted prices for similar assets and liabilities in active markets and quoted prices in non-active markets, inputs other than quoted prices that are observable, and inputs that are not directly observable, but are corroborated by observable market data. •Level 3—Inputs that are unobservable and are supported by little or no market activity and reflect the use of significant management judgment. The classification of a financial asset or liability within the hierarchy is determined based on the least reliable level of input that is significant to the fair value measurement. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. We also consider the counterparty and our own non-performance risk in our assessment of fair value. The following table presents fair values of our financial and debt instruments categorized by their fair value hierarchy as of June 30, 2023:
Assets that are Measured at Fair Value on a Recurring Basis Cash and cash equivalents, accounts receivable, accounts payable, short-term obligations and certain other assets at cost approximate fair value because of the short maturity of these instruments. As of June 30, 2023, we have $29.2 million in investment grade corporate bonds, municipal bonds and asset-backed securities with maturity dates through 2027. The fair values of these securities are considered Level 1 as they are based on inputs from unadjusted quoted prices that are available in active markets for identical assets or liabilities. Assets that are Measured at Fair Value on a Nonrecurring Basis As of June 30, 2023, we have an 18% interest in BFTR, LLC. As we do not have the ability to exercise significant influence over the investee and the securities do not have readily determinable fair values, our investment is carried at cost less any impairment write-downs. Periodically, our investment is assessed for impairment. We do not reassess the fair value of the investments if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investments. No events or changes in circumstances have occurred during the period that require reassessment. There has been no impairment of this investment for the periods presented. This investment is included in other non-current assets in the accompanying condensed consolidated balance sheets. We assess goodwill for impairment annually on October 1. In addition, we review goodwill, property and equipment, and other intangibles for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. During the fourth quarter of 2022, we completed our annual assessment of goodwill which did not result in an impairment charge. Further, we identified no indicators of impairment to long-lived and other assets and therefore, no impairment was recorded as of and for the period ended June 30, 2023. Financial instruments measured at fair value only for disclosure purposes The fair value of our borrowing under our amended 2021 Credit Agreement would approximate book value as of June 30, 2023, because our interest rates reset approximately every 30 days or less. The carrying amount of the Revolving Credit Facility and Term Loans is the par value less the debt discount and debt issuance costs that are amortized to interest expense using the effective interest method over the terms of the Term Loans. Interest expense is included in the accompanying condensed consolidated statements of income. The fair value of our Convertible Senior Notes due 2026 is determined based on quoted market prices for a similar liability when traded as an asset in an active market, a Level 2 input. See Note 8, “Debt,” for further discussion. The carrying amount of the Convertible Senior Notes due 2026 is the par value less the debt discount and debt issuance costs that are amortized to interest expense using the effective interest method over the term of the Convertible Senior Notes. Interest expense is included in the accompanying condensed consolidated statements of income. The following table presents the fair value and carrying value, net, of the 2021 Credit Agreement and our Convertible Notes due 2026):
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Income Tax Provision |
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Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Tax Provision | Income Tax Provision We had an effective income tax rate of 12.5% and 15.5% for the three and six months ended June 30, 2023, respectively, compared to 21.3% and 21.8% for the three and six months ended June 30, 2022, respectively. The decrease in the effective tax rate for the three and six months ended June 30, 2023, as compared to the prior periods, was principally driven by an increase in research tax credit benefits and excess tax benefits related to stock incentive awards, partially offset by an increase in liabilities for uncertain tax positions. The effective income tax rates for the periods presented were different from the statutory United States federal income tax rate of 21% primarily due to research tax credits and excess tax benefits related to stock incentive awards, offset by state income taxes, liabilities for uncertain tax positions, and non-deductible business expenses. For tax years beginning on or after January 1, 2022, the Tax Cuts and Jobs Act of 2017 (“TCJA”) eliminates the option to currently deduct research and development expenses and requires taxpayers to capitalize and amortize them over five years for research activities performed in the United States and 15 years for research activities performed outside the United States pursuant to IRC Section 174. The requirement temporarily increases our U.S. federal and state cash tax payments and reduces cash flows in fiscal year 2023 and future years until the amortization deduction normalizes. We made income tax payments of $92.9 million and $24.3 million in the six months ended June 30, 2023, and 2022, respectively.
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Share-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation The following table summarizes share-based compensation expense related to share-based awards recorded in the condensed consolidated statements of income, pursuant to ASC 718, Stock Compensation:
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The following table details the reconciliation of basic earnings per share to diluted earnings per share:
For the three and six months ended June 30, 2023, and 2022, stock awards, representing the right to purchase common stock of approximately 344,000 and 423,000 shares and 486,000 and 350,000 shares, respectively, were not included in the computation of diluted earnings per share because their inclusion would have had an antidilutive effect. We have used the if-converted method for calculating any potential dilutive effect of the Convertible Senior Notes due 2026 on our diluted net income per share. Under the if-converted method, the Notes are assumed to be converted at the beginning of the period and the resulting common shares are included in the denominator of the diluted earnings per share calculation for the entire period being presented and interest expense, net of tax, recorded in connection with the Convertible Senior Notes is not added back to the numerator, only in the periods in which such effect is dilutive. The approximately 1.2 million remaining resulting common shares related to the Notes are not included in the dilutive weighted-average common shares outstanding calculation for the three and six months ended June 30, 2023, and 2022, as their effect would be antidilutive given none of the conversion features have been triggered. See Note 8, “Debt,” for discussion on the conversion features related to the Convertible Senior Notes.
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases We lease office facilities for use in our operations, as well as transportation and other equipment. Most of our leases are non-cancelable operating lease agreements with maturities between to 11 years. Some of these leases include options to extend for up to six years. We have no finance leases and one related party lessor agreement (see Note 16, "Related party transactions") as of June 30, 2023. Right-of-use lease assets and lease liabilities for our operating leases are recorded in the condensed consolidated balance sheets. During the three and six months ended June 30, 2023, we incurred lease restructuring costs, resulting in zero and $1.4 million of operating lease costs. During the three and six months ended June 30, 2022, we incurred lease restructuring costs of zero and $1.0 million of operating lease costs. The components of operating lease expense were as follows:
Supplemental information related to leases is as follows:
Rental Income from third parties We own office buildings in Bangor, Falmouth, and Yarmouth, Maine; Lubbock and Plano, Texas; Troy, Michigan; Latham, New York; and Moraine, Ohio. We lease space in some of these buildings to third-party tenants. The property we lease to others under operating leases consists primarily of specific facilities where one tenant obtains substantially all of the economic benefit from the asset and has the right to direct the use of the asset. These non-cancelable leases expire between 2023 and 2028, and some have options to extend the lease for up to 10 years. We determine if an arrangement is a lease at inception. None of our leases allow the lessee to purchase the leased asset. Rental income from third-party tenants for the three and six months ended June 30, 2023 totaled $545,000 and $1.0 million, respectively, and for the three and six months ended June 30, 2022 totaled $493,000 and $798,000, respectively. As of June 30, 2023, future minimum operating rental income based on contractual agreements is as follows:
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Leases | Leases We lease office facilities for use in our operations, as well as transportation and other equipment. Most of our leases are non-cancelable operating lease agreements with maturities between to 11 years. Some of these leases include options to extend for up to six years. We have no finance leases and one related party lessor agreement (see Note 16, "Related party transactions") as of June 30, 2023. Right-of-use lease assets and lease liabilities for our operating leases are recorded in the condensed consolidated balance sheets. During the three and six months ended June 30, 2023, we incurred lease restructuring costs, resulting in zero and $1.4 million of operating lease costs. During the three and six months ended June 30, 2022, we incurred lease restructuring costs of zero and $1.0 million of operating lease costs. The components of operating lease expense were as follows:
Supplemental information related to leases is as follows:
Rental Income from third parties We own office buildings in Bangor, Falmouth, and Yarmouth, Maine; Lubbock and Plano, Texas; Troy, Michigan; Latham, New York; and Moraine, Ohio. We lease space in some of these buildings to third-party tenants. The property we lease to others under operating leases consists primarily of specific facilities where one tenant obtains substantially all of the economic benefit from the asset and has the right to direct the use of the asset. These non-cancelable leases expire between 2023 and 2028, and some have options to extend the lease for up to 10 years. We determine if an arrangement is a lease at inception. None of our leases allow the lessee to purchase the leased asset. Rental income from third-party tenants for the three and six months ended June 30, 2023 totaled $545,000 and $1.0 million, respectively, and for the three and six months ended June 30, 2022 totaled $493,000 and $798,000, respectively. As of June 30, 2023, future minimum operating rental income based on contractual agreements is as follows:
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Related Party Transactions |
6 Months Ended |
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Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsIn April 2023, we entered into an arm's length lessor agreement with a company co-owned by a member of the Company’s board of directors for 25,000 square feet of office space in our Lubbock, Texas, facility. The lease agreement, which commenced on April 1, 2023, has an initial term of five years with a pro-rata base rent of $25,000 per month until December 1, 2023, and a base rent of $60,000 per month thereafter. We recognized rental income of $75,000 under this lease for the six months ended June 30, 2023. |
Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation During the first quarter of 2022, we received a notice of termination for convenience under a contractual arrangement with a state government client. Upon receipt of the termination notice, we ceased performing services under the contractual arrangement and sought payment of contractually owed fees of approximately $15 million in connection with the termination for convenience. The client was unresponsive to our outreach for several months. On August 23, 2022, we filed a lawsuit to enforce our rights and remedies under the applicable contractual arrangement, and since then have been engaged directly with the client on payment resolution. Although we believe our products and services were delivered in accordance with the terms of our contract and that we are entitled to payment in connection with the termination for convenience, at this time the matter remains unresolved. We can provide no assurances that we will not incur additional costs as we pursue our rights and remedies under the contract. Purchase Commitments We have contractual obligations for third-party technology used in our solutions and for other services we purchase as part of our normal operations. In certain cases, these arrangements require a minimum annual purchase commitment by us. As of June 30, 2023, the remaining aggregate minimum purchase commitment under these arrangements was approximately $244 million through 2031.
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Subsequent Events |
6 Months Ended |
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Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsThere have been no material events or transactions that occurred subsequent to June 30, 2023. |
Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
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Pay vs Performance Disclosure | ||||
Net income | $ 49,130 | $ 39,946 | $ 80,005 | $ 79,930 |
Insider Trading Arrangements |
3 Months Ended |
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Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Accounting Standards and Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Nature of Products and Services The Company accounts for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. We earn the majority of our revenues from subscription-based services and post-contract customer support (“PCS” or “maintenance”). Other sources of revenue are professional services, software licenses and royalties, and hardware and other. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We determine revenue recognition through the following steps: •Identification of the contract, or contracts, with a customer •Identification of the performance obligations in the contract •Determination of the transaction price •Allocation of the transaction price to the performance obligations in the contract •Recognition of revenue when, or as, we satisfy a performance obligation Subscriptions revenue consists of revenue derived from our software as a service ("SaaS") arrangements and transaction-based fees primarily related to digital government services and payment processing. We also provide electronic document filing solutions (“e-filing”) that simplify the filing and management of court related documents for courts and law offices. E-filing revenue is derived from transaction fees and fixed fee arrangements. For transaction-based fees, we have the right to charge the customer an amount that directly corresponds with the value to the customer of our performance to date. Therefore, we recognize revenue for these services over time based on the amount billable to the customer in accordance with the 'as invoiced' practical expedient in ASC 606-10-55-18. In some cases, we are paid on a fixed fee basis and recognize the revenue ratably over the contractual period. Typically, the structure of our arrangements does not give rise to variable consideration. However, in those instances whereby variable consideration exists, we include in our estimates, additional revenue for variable consideration when we believe we have an enforceable right, the amount can be estimated reliably and its realization is probable. Other software arrangements with customers contain multiple performance obligations that range from software licenses, installation, training, and consulting to software modification and customization to meet specific customer needs (services), hosting, and PCS. For these contracts, we account for individual performance obligations separately when they are distinct. We evaluate whether separate performance obligations can be distinct or should be accounted for as one performance obligation. Arrangements that include professional services, such as training or installation, are evaluated to determine whether those services are highly interdependent or interrelated to the product’s functionality. The transaction price is allocated to the distinct performance obligations on a relative standalone selling price (“SSP”) basis. We determine the SSP based on our overall pricing objectives, taking into consideration market conditions and other factors, including the value of our contracts, the applications sold, customer demographics, and the number and types of users within our contracts. For arrangements that involve significant production, modification, or customization of the software, or where professional services otherwise cannot be considered distinct, we recognize revenue as control is transferred to the customer over time using progress-to-completion methods. Depending on the contract, we measure progress-to-completion primarily using labor hours incurred, or value added. Amounts recognized in revenue are calculated using the progress-to-completion measurement after giving effect to any changes in our cost estimates. Changes to total estimated contract costs, if any, are recorded in the period they are determined. Estimated losses on uncompleted contracts are recorded in the period in which we first determine that a loss is apparent. Revenue is recognized net of allowances for sales adjustments and any taxes collected from customers, which are subsequently remitted to governmental authorities. Contract Balances: Accounts receivable and allowance for losses and sales adjustments Timing of revenue recognition may differ from the timing of invoicing to customers. We record an unbilled receivable when revenue is recognized prior to invoicing, or deferred revenue when invoicing occurs prior to revenue recognition. For multi-year agreements, we generally invoice customers annually at the beginning of each annual coverage period. We record an unbilled receivable related to revenue recognized for on-premises licenses as we have an unconditional right to invoice and receive payment in the future related to those licenses. At June 30, 2023, and December 31, 2022, total current and long-term accounts receivable, net of allowance for losses and sales adjustments, was $647.0 million and $585.5 million, respectively. We have recorded unbilled receivables of $127.1 million and $135.4 million at June 30, 2023 and December 31, 2022, respectively. Included in unbilled receivables are retention receivables of $9.2 million and $8.6 million at June 30, 2023 and December 31, 2022, respectively, which become payable upon the completion of the contract or completion of our fieldwork and formal hearings. Unbilled receivables expected to be collected within one year have been included with accounts receivable, current portion in the accompanying condensed consolidated balance sheets. Unbilled receivables and retention receivables expected to be collected past one year have been included with accounts receivable, long-term portion in the accompanying condensed consolidated balance sheets. We maintain allowances for losses and sales adjustments, which are recorded against revenue at the time the loss is incurred. Since most of our clients are domestic governmental entities, we rarely incur a credit loss resulting from the inability of a client to make required payments. Events or changes in circumstances that indicate the carrying amount for the allowances for losses and sales adjustments may require revision, include, but are not limited to, managing our client’s expectations regarding the scope of the services to be delivered and defects or errors in new versions or enhancements of our software products. Our allowance for losses and sales adjustments of $19.6 million and $14.8 million at June 30, 2023 and December 31, 2022, respectively, does not include provisions for credit losses.
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RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS | RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTSThere were no new not yet adopted accounting pronouncements currently issued that would affect the Company or have a material impact on its consolidated financial position or results of operations in future periods. |
Segment and Related Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment revenues and operations |
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Schedule of Reconciliation of operating income from segments to consolidated |
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Disaggregation of Revenue (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of disaggregation of revenue | Timing of revenue recognition by revenue category during the period is as follows:
Recurring revenues and non-recurring revenues recognized during the period are as follows:
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Deferred Revenue and Performance Obligations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in deferred revenue | Total deferred revenue, including long-term, by segment is as follows:
Changes in total deferred revenue, including long-term, were as follows:
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Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt and related interest | The following table summarizes our total outstanding borrowings related to the 2021 Credit Agreement and Convertible Senior Notes:
The weighted average interest rates for the borrowings under the 2021 Credit Agreement and Convertible Senior Notes due 2026 were 6.68% and 0.25%, as of June 30, 2023, respectively. During the six months ended June 30, 2023, the effective interest rates for our borrowings were 7.04% and 0.54% for the 2021 Credit Agreement and the Convertible Senior Notes, respectively. The following sets forth the interest expense recognized related to the borrowings under the 2021 Credit Agreement and Convertible Senior Notes and is included in interest expense in the accompanying condensed consolidated statements of income:
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Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investments | The following table presents our financial instruments:
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Schedule of Available-for-sale Activity | The following table presents the components of our available-for-sale investments:
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Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accumulated other comprehensive loss | The following table presents the changes in the balances of accumulated other comprehensive loss, net of tax by component:
|
Fair Value (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value, assets and liabilities measured on recurring basis | The following table presents fair values of our financial and debt instruments categorized by their fair value hierarchy as of June 30, 2023:
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value, by balance sheet grouping | The following table presents the fair value and carrying value, net, of the 2021 Credit Agreement and our Convertible Notes due 2026):
|
Share-Based Compensation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share-based compensation expense related to share-based awards | The following table summarizes share-based compensation expense related to share-based awards recorded in the condensed consolidated statements of income, pursuant to ASC 718, Stock Compensation:
|
Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of reconciliation of basic earnings per share to diluted earnings per share | The following table details the reconciliation of basic earnings per share to diluted earnings per share:
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of lease cost | The components of operating lease expense were as follows:
Supplemental information related to leases is as follows:
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Schedule of supplemental information related to leases | Supplemental information related to leases is as follows:
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Schedule of future minimum operating rental income | As of June 30, 2023, future minimum operating rental income based on contractual agreements is as follows:
|
Basis of Presentation (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Other comprehensive income (loss), net of tax | $ (35) | $ (66) | $ 59 | $ (763) |
Accounting Standards and Significant Accounting Policies (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
New Accounting Pronouncements or Change in Accounting Principle | ||
Accounts receivable, net | $ 647,000 | $ 585,500 |
Accounts receivable, allowance for doubtful accounts | 19,643 | 14,761 |
Unbilled Revenues | ||
New Accounting Pronouncements or Change in Accounting Principle | ||
Accounts receivable, net | 127,100 | 135,400 |
Unbilled Revenues | Retention Receivable | ||
New Accounting Pronouncements or Change in Accounting Principle | ||
Accounts receivable, net | $ 9,200 | $ 8,600 |
Segment and Related Information - Additional Information (Details) |
6 Months Ended |
---|---|
Jun. 30, 2023
segment
business
| |
Segment Reporting [Abstract] | |
Number of business units | business | 6 |
Number of reportable segment | segment | 2 |
Segment and Related Information - Schedule of Reconciliation of Operating Income from Segments to Consolidated (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Segment Reporting Information | ||||
Total segment operating income | $ 61,874 | $ 56,757 | $ 106,854 | $ 112,625 |
Amortization of acquired software | (281,102) | (275,237) | (553,119) | (538,926) |
Amortization of other intangibles | (18,366) | (13,604) | (36,774) | (28,318) |
Interest expense | (6,387) | (6,214) | (14,071) | (11,018) |
Other income, net | 643 | 216 | 1,889 | 581 |
Income before income taxes | 56,130 | 50,759 | 94,672 | 102,188 |
Amortization of acquired software | ||||
Segment Reporting Information | ||||
Amortization of acquired software | (8,924) | (14,039) | (17,844) | (27,260) |
Operating segment and corporate non-segment | ||||
Segment Reporting Information | ||||
Total segment operating income | $ 89,164 | $ 84,400 | $ 161,472 | $ 168,203 |
Disaggregation of Revenue - Additional Information (Details) |
6 Months Ended |
---|---|
Jun. 30, 2023 | |
Minimum | |
Disaggregation of Revenue | |
Contract term (in years) | 1 year |
Typical contract term (in years) | 3 years |
Maximum | |
Disaggregation of Revenue | |
Contract term (in years) | 10 years |
Typical contract term (in years) | 5 years |
Deferred Revenue and Performance Obligations - Deferred Revenue (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2023
USD ($)
| |
Disaggregation of Revenue | |
Deferred revenue | $ 567,004 |
Contract With Customer Liability | |
Beginning balance | 570,575 |
Deferral of revenue | 662,311 |
Recognition of deferred revenue | (665,882) |
Ending balance | 567,004 |
Corporate | |
Disaggregation of Revenue | |
Deferred revenue | 1,750 |
Contract With Customer Liability | |
Beginning balance | 2,982 |
Ending balance | 1,750 |
Enterprise Software | Operating segments | |
Disaggregation of Revenue | |
Deferred revenue | 536,663 |
Contract With Customer Liability | |
Beginning balance | 533,902 |
Ending balance | 536,663 |
Platform Technologies | Operating segments | |
Disaggregation of Revenue | |
Deferred revenue | 28,591 |
Contract With Customer Liability | |
Beginning balance | 33,691 |
Ending balance | $ 28,591 |
Deferred Revenue and Performance Obligations - Additional Information (Details) $ in Millions |
Jun. 30, 2023
USD ($)
|
---|---|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligations | $ 1,900 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Revenue, remaining performance obligation (as a percent) | 46.00% |
Expected timing of satisfaction period (in years) | 12 months |
Deferred Commissions (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
Dec. 31, 2022 |
|
Capitalized Contract Cost | |||||
Deferred commissions | $ 44,900,000 | $ 44,900,000 | $ 43,800,000 | ||
Deferred commissions amortization | $ 4,300,000 | $ 3,700,000 | 8,600,000 | $ 7,200,000 | |
Deferred commissions impairment | $ 0 | $ 0 | |||
Minimum | |||||
Capitalized Contract Cost | |||||
Sales commissions amortization period (in years) | 3 years | ||||
Maximum | |||||
Capitalized Contract Cost | |||||
Sales commissions amortization period (in years) | 7 years |
Acquisitions - Additional Information (Details) - USD ($) $ in Thousands |
6 Months Ended | ||||
---|---|---|---|---|---|
Oct. 31, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
Mar. 31, 2023 |
Dec. 31, 2022 |
|
Business Acquisition | |||||
Payments to acquire businesses, net of cash | $ 1,875 | $ 117,313 | |||
Goodwill | 2,489,084 | $ 2,489,308 | |||
Rapid Financial Solutions, LLC | |||||
Business Acquisition | |||||
Cash acquired from acquisition | $ 2,200 | ||||
Business acquisition consideration | 67,400 | ||||
Payments to acquire businesses, net of cash | 51,500 | ||||
Payment to acquire business, common stock | 18,200 | ||||
Total tangible assets | 12,900 | ||||
Liabilities assumed | (10,600) | ||||
Litigation outstanding | $ 10,000 | ||||
Indemnification receivable | $ 10,000 | ||||
Goodwill | 40,000 | ||||
Identifiable intangible assets acquired | $ 27,600 | ||||
Finite-lived intangible asset, useful life (in years) | 10 years | ||||
Financial advisory and legal fees | $ 72 |
Debt - Interest expense recognized (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Debt Instrument | ||||
Amortization of debt discount and debt issuance costs | $ (822) | $ (1,149) | $ (2,178) | $ (2,271) |
Total | (6,387) | (6,214) | (14,071) | (11,018) |
Revolving credit facility | Revolving Credit Facility | ||||
Debt Instrument | ||||
Contractual interest expense | (625) | (315) | (937) | (628) |
Contractual interest expense - Term Loans | ||||
Debt Instrument | ||||
Contractual interest expense | (4,565) | (4,375) | (10,206) | (7,369) |
Convertible Senior Notes due 2026 | Senior Notes | ||||
Debt Instrument | ||||
Contractual interest expense | $ (375) | $ (375) | $ (750) | $ (750) |
Financial Instruments - Financial Instruments (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Investments, All Other Investments [Abstract] | ||
Cash and cash equivalents | $ 118,764 | $ 173,857 |
Available-for-sale investments | 29,216 | 55,538 |
Equity investments | 10,000 | 10,000 |
Total | $ 157,980 | $ 239,395 |
Financial Instruments - Additional Information (Details) |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2023
USD ($)
security
|
Jun. 30, 2023
USD ($)
security
|
|
Financial Instruments | ||
Interest receivable | $ 102,000 | $ 102,000 |
Allowance for credit loss | 0 | 0 |
Available for sales debt securities, current | 19,100,000 | 19,100,000 |
Available for sales debt securities, non-current | $ 10,100,000 | $ 10,100,000 |
Available-for-sale debt securities, loss position, current, number of positions | security | 6 | 6 |
Available-for-sale debt securities, loss position, current | $ 6,100,000 | $ 6,100,000 |
Available-for-sale debt securities, loss position, non-current, number of positions | security | 27 | 27 |
Available-for-sale debt securities, loss position, non-current | $ 20,900,000 | $ 20,900,000 |
BFTR, LLC | ||
Financial Instruments | ||
Investment percentage (as a percent) | 18.00% | 18.00% |
Financial Instruments - Available-for-sale Investments (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Investments, All Other Investments [Abstract] | ||
Amortized cost | $ 30,269 | $ 56,670 |
Unrealized gains | 0 | 16 |
Unrealized losses | (1,053) | (1,148) |
Estimated fair value | $ 29,216 | $ 55,538 |
Financial Instruments - Net Realized Gains (Losses) on Sales of Our Financial Instruments (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Investments, All Other Investments [Abstract] | ||||
Proceeds from sales and maturities | $ 14,132 | $ 17,923 | $ 37,107 | $ 40,595 |
Realized losses on sales, net of tax | $ (1) | $ (48) | $ (1) | $ (7) |
Fair Value - Additional Information (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Fair Value Measurement Inputs and Valuation Techniques | ||
Available-for-sale investments | $ 29,216 | $ 55,538 |
BFTR, LLC | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Investment percentage (as a percent) | 18.00% |
Income Tax Provision (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rates (as a percent) | 12.50% | 21.30% | 15.50% | 21.80% |
Income tax payments | $ 92.9 | $ 24.3 |
Share-Based Compensation (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Share-based compensation expense | $ 26,028 | $ 25,800 | $ 53,924 | $ 51,079 |
Subscriptions, maintenance, and professional services | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Share-based compensation expense | 6,437 | 6,867 | 12,779 | 13,639 |
Sales and marketing expense | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Share-based compensation expense | 2,367 | 2,224 | 4,760 | 4,364 |
General and administrative expense | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Share-based compensation expense | $ 17,224 | $ 16,709 | $ 36,385 | $ 33,076 |
Earnings Per Share - Schedule of Computation of Basic Earnings and Diluted Earnings Per Share Data (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Numerator for basic and diluted earnings per share: | ||||
Net income, basic | $ 49,130 | $ 39,946 | $ 80,005 | $ 79,930 |
Net income, diluted | $ 49,130 | $ 39,946 | $ 80,005 | $ 79,930 |
Denominator: | ||||
Weighted-average basic common shares outstanding (in shares) | 41,980 | 41,500 | 41,987 | 41,499 |
Assumed conversion of dilutive securities: | ||||
Stock awards (in shares) | 771 | 821 | 723 | 950 |
Convertible Senior Notes (in shares) | 0 | 0 | 0 | 0 |
Denominator for diluted earnings per share- Adjusted weighted-average shares (in shares) | 42,751 | 42,321 | 42,710 | 42,449 |
Earnings per common share: | ||||
Basic (in usd per share) | $ 1.17 | $ 0.96 | $ 1.91 | $ 1.93 |
Diluted (in usd per share) | $ 1.15 | $ 0.94 | $ 1.87 | $ 1.88 |
Earnings Per Share - Additional Information (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Stock awards | ||||
Earnings Per Share | ||||
Antidilutive securities excluded from computation of earnings per shares (in shares) | 344 | 486 | 423 | 350 |
Convertible debt securities | ||||
Earnings Per Share | ||||
Antidilutive securities excluded from computation of earnings per shares (in shares) | 1,200 | 1,200 | 1,200 | 1,200 |
Leases - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Lessee, Lease, Description | ||||
Additional operating lease cost | $ 0 | $ 0 | $ 1,400 | $ 1,000 |
Lessor, operating lease renewal term (in years) | 10 years | 10 years | ||
Rental income | $ 545 | $ 493 | $ 1,000 | $ 798 |
Minimum | ||||
Lessee, Lease, Description | ||||
Operating lease term (in years) | 1 year | 1 year | ||
Maximum | ||||
Lessee, Lease, Description | ||||
Operating lease term (in years) | 11 years | 11 years | ||
Operating lease renewal term (up to) | 6 years | 6 years |
Leases - Schedule of lease cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 3,119 | $ 2,586 | $ 7,510 | $ 6,008 |
Short-term lease cost | 513 | 488 | 1,036 | 994 |
Variable lease cost | 216 | 204 | 536 | 574 |
Net lease cost | $ 3,848 | $ 3,278 | $ 9,082 | $ 7,576 |
Leases - Schedule of other information related to leases (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Cash paid amounts included in the measurement of lease liabilities: | ||
Operating cash outflows from operating leases | $ 5,873 | $ 7,238 |
Right-of-use assets obtained in exchange for lease obligations (non-cash): | ||
Operating leases | $ 2,391 | $ 6,606 |
Lease term and discount rate: | ||
Weighted average remaining lease term (years) | 6 years 10 months 24 days | 5 years 9 months 18 days |
Weighted average discount rate | 1.60% | 1.64% |
Leases - Schedule of future minimum operating rental income (Details) $ in Thousands |
Jun. 30, 2023
USD ($)
|
---|---|
Future Operating Rental Income | |
2023 | $ 1,133 |
2024 | 3,049 |
2025 | 2,317 |
2026 | 1,171 |
2027 | 913 |
Thereafter | 733 |
Total | $ 9,316 |
Related Party Transactions (Details) ft² in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023
USD ($)
|
Apr. 30, 2023
ft²
|
|
Related Party Transaction | ||
Lessor, operating lease renewal term (in years) | 10 years | |
Board Member | Office facility Lubbock Texas | Management | ||
Related Party Transaction | ||
Area of real estate property | ft² | 25 | |
Lessor, operating lease renewal term (in years) | 5 years | |
Pro-rated monthly rent | $ 25,000 | |
Monthly base rent | 60,000 | |
Operating lease, lease income | $ 75,000 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Jun. 30, 2023 |
|
Contingencies | ||
Remaining aggregate minimum purchase commitment | $ 244 | |
Contract Termination | ||
Contingencies | ||
Damages sought | $ 15 |
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