Tyler Technologies Reports Earnings for Fourth Quarter 2019

Organic revenue growth accelerates to 10.6%, as bookings grow 33.5%

PLANO, Texas–(BUSINESS WIRE)–$TYL #earningsTyler Technologies, Inc. (NYSE: TYL) today announced financial results for the fourth quarter ended December 31, 2019.

Fourth Quarter 2019 Financial Highlights:

  • Total revenues were $288.8 million, up 19.4% from $242.0 million for the fourth quarter of 2018. Organic revenue growth was 10.6%. Non-GAAP total revenues were $287.4 million, up 18.3% from $243.0 million for the fourth quarter of 2018. Non-GAAP organic revenue growth was 10.2%.
  • Recurring revenues from maintenance and subscriptions were $194.0 million, up 22.7% compared to the fourth quarter of 2018, and comprised 67.2% of fourth quarter 2019 revenues.
  • Operating income was $45.2 million, up 16.0% from $38.9 million for the fourth quarter of 2018. Non-GAAP operating income was $73.9 million, up 13.4% from $65.2 million for the fourth quarter of 2018.
  • Net income was $46.8 million, or $1.15 per diluted share, up 48.3% compared to $31.6 million, or $0.79 per diluted share, for the fourth quarter of 2018. Non-GAAP net income was $58.2 million, or $1.43 per diluted share, up 15.3% compared to $50.5 million, or $1.26 per diluted share, for the fourth quarter of 2018.
  • Cash flows from operations were $76.2 million, up 7.5% compared to $70.9 million for the fourth quarter of 2018.
  • Adjusted EBITDA was $82.2 million, up 14.0% compared to $72.1 million for the fourth quarter of 2018.
  • Software subscription arrangements comprised approximately 54% of total new software contract value in the fourth quarter, compared to approximately 40% in the fourth quarter of 2018.
  • Subscription bookings in the fourth quarter added $12.0 million in annual recurring revenue.
  • Annualized non-GAAP recurring revenues were $769.9 million, up 21.0% from $636.4 million for the fourth quarter of 2018.
  • On October 30, 2019, Tyler acquired Courthouse Technologies, Ltd., a leading provider of jury management systems.

Full Year 2019 Financial Highlights:

  • Total revenues were $1.086 billion, up 16.2% from $935.3 million in 2018. Organic revenue growth was 8.3%. Non-GAAP total revenues were $1.091 billion, up 16.1% from $939.7 million in 2018. Non-GAAP organic revenue growth was 7.9%.
  • Recurring revenues from maintenance and subscriptions were $726.7 million, up 20.1% compared to $605.1 million in 2018, and comprised 66.9% of 2019 revenues.
  • Operating income was $156.4 million, up 2.5% from $152.5 million in 2018. Non-GAAP operating income was $276.2 million, up 10.4% from $250.3 million in 2018.
  • Net income was $146.5 million, or $3.65 per diluted share, down 0.6% compared to $147.5 million, or $3.68 per diluted share in 2018. Non-GAAP net income was $212.6 million, or $5.30 per diluted share, up 10.3% compared to $192.8 million, or $4.80 per diluted share in 2018.
  • Cash flows from operations were $254.7 million, up 1.8% compared to $250.2 million in 2018.
  • Adjusted EBITDA was $303.4 million, up 10.5% compared to $274.6 million in 2018.
  • Software subscription arrangements comprised approximately 63% of total new software contract value in 2019, compared to approximately 41% in 2018.
  • Subscription bookings in 2019 added $52.6 million in annual recurring revenue.
  • Total backlog was $1.46 billion, up 16.9% from $1.25 billion at December 31, 2018. Software-related backlog (excluding appraisal services) was $1.43 billion, up 18.0% from $1.21 billion at December 31, 2018.
  • Effective January 1, 2019, Tyler adopted the requirements of ASU No. 2016-02, Leases (Topic 842), utilizing the modified retrospective method of transition.

“Tyler reached two significant milestones in the fourth quarter – surpassing $1 billion in annual revenues and $300 million in adjusted EBITDA,” said Lynn Moore, Tyler’s president and chief executive officer. “Non-GAAP revenues grew 18.3% and organic growth accelerated sequentially for the third consecutive quarter to reach double-digits, even as our mix of new business was more heavily weighted towards subscriptions. Subscriptions revenues continue to pace our growth, as they rose 34.3%.

“Bookings in the fourth quarter were robust across our product suites, growing 33.5% to approximately $331 million. For the full year, bookings rose 32.3%. The number of new contracts signed in the fourth quarter reached a new high and increased 69% from last year’s fourth quarter. Bookings were particularly strong for our public safety solutions, where the total value of contracts signed during the fourth quarter more than doubled last year’s fourth quarter. We exited the year with backlog at a new high of $1.46 billion.

“As we turn to 2020, we are excited about the opportunities in front of us. Our elevated investments in product development and acquisitions over recent years have broadened our addressable market and strengthened our competitive position, and we continue to focus intensely on competitiveness, revenue growth, and long-term margin expansion. We expect to continue to show progress toward those objectives in 2020, as we continue our move to the cloud in partnership with Amazon Web Services,” added Moore.

Guidance for 2020

As of February 12, 2020, Tyler Technologies is providing the following guidance for the full year 2020:

  • GAAP total revenues are expected to be in the range of $1.204 billion to $1.224 billion. Non-GAAP total revenues are expected to be in the range of $1.205 billion to $1.225 billion.
  • GAAP diluted earnings per share are expected to be in the range of $3.81 to $3.93 and may vary significantly due to the impact of stock incentive awards on the GAAP effective tax rate, as well as final valuation of acquired intangibles.
  • Non-GAAP diluted earnings per share are expected to be in the range of $5.60 to $5.72, of which approximately 55% to 60% is expected to be generated in the second half of the year.
  • Pretax non-cash, share-based compensation expense is expected to be approximately $77 million.
  • Research and development expense is expected to be in the range of $92 million to $94 million.
  • Fully diluted shares for the year are expected to be in the range of 41.5 million to 42.0 million shares.
  • GAAP earnings per share assumes an estimated annual effective tax rate of approximately 10% after discrete tax items including approximately $31 million of discrete tax benefits related to share-based compensation.
  • The non-GAAP annual effective tax rate is expected to be 24%.
  • Capital expenditures are expected to be in the range of $36 million to $38 million, including approximately $9 million related to real estate and approximately $7 million of capitalized software development costs. Total depreciation and amortization expense is expected to be approximately $80 million, including approximately $54 million from amortization of acquisition intangibles.

GAAP to non-GAAP guidance reconciliation

Non-GAAP total revenues is derived from adding back the estimated full year impact of write-downs of acquisition-related deferred revenue and amortization of rental income associated with acquired subleases of approximately $1 million. Non-GAAP diluted earnings per share excludes the estimated full year impact of non-cash share-based compensation expense and employer portion of payroll tax related to employee stock transactions of approximately $77 million, and amortization of acquired software and intangible assets of approximately $54 million. Additionally, the non-GAAP tax rate of 24% is estimated periodically as described below under “Non-GAAP Financial Measures” and excludes approximately $31 million of estimated discrete tax benefits that are included in the GAAP estimated annual effective tax rate.

Conference Call

Tyler Technologies will hold a conference call on Thursday, February 13, 2020 at 10:00 a.m. EST to discuss the company’s results. The company is offering participants the opportunity to register in advance for the conference through the following link: http://dpregister.com/10134985. Registered participants will receive an email with a calendar reminder and a dial-in number and PIN that will allow them to listen to the call live.

Participants who do not wish to pre-register for the call may dial in using 844-861-5506 (U.S. callers) or 412-317-6587 (international callers) or 866-450-4696 (Canada callers) and ask for the “Tyler Technologies” call. A replay will be available two hours after completion of the call through February 20, 2020. To access the replay, please dial 877-344-7529 (U.S. callers), 412-317-0088 (international callers) and 855-669-9658 (Canada callers) and reference passcode 10134985.

The live webcast and archived replay can also be accessed at https://tylertech.irpass.com/Presentations.

About Tyler Technologies, Inc.

Tyler Technologies (NYSE: TYL) provides integrated software and technology services to the public sector. Tyler’s end-to-end solutions empower local, state, and federal government entities to operate more efficiently and connect more transparently with their constituents and with each other. By connecting data and processes across disparate systems, Tyler’s solutions are transforming how clients gain actionable insights that solve problems in their communities. Tyler has more than 26,000 successful installations across more than 10,000 sites, with clients in all 50 states, Canada, the Caribbean, Australia, and other international locations. A financially strong company, Tyler has achieved double-digit revenue growth every quarter since 2012. It was also named to Forbes’ “Best Midsize Employers” list in 2019 and recognized twice on its “Most Innovative Growth Companies” list. More information about Tyler Technologies, headquartered in Plano, Texas, can be found at tylertech.com.

Non-GAAP Financial Measures

Tyler Technologies has provided in this press release financial measures that have not been prepared in accordance with generally accepted accounting principles (GAAP) and are therefore considered non-GAAP financial measures. This information includes non-GAAP revenues, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP earnings per diluted share, EBITDA, and adjusted EBITDA. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating Tyler’s ongoing operational performance because they provide additional insight in comparing results from period to period. Tyler believes the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures. Non-GAAP financial measures discussed above exclude write-downs of acquisition-related deferred revenue and acquired subleases, share-based compensation expense, employer portion of payroll taxes on employee stock transactions, expenses associated with amortization of intangibles arising from business combinations, and acquisition-related expenses.

Tyler currently uses a non-GAAP tax rate of 24%. This rate is based on Tyler’s estimated annual GAAP income tax rate forecast, adjusted to account for items excluded from GAAP income in calculating Tyler’s non-GAAP income, as well as significant non-recurring tax adjustments. The non-GAAP tax rate used in future periods will be reviewed periodically to determine whether it remains appropriate in consideration of factors including Tyler’s periodic effective tax rate calculated in accordance with GAAP, changes resulting from tax legislation, changes in the geographic mix of revenues and expenses, and other factors deemed significant. Due to differences in tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to Tyler’s estimated annual tax rate as described above, the estimated tax rate on non-GAAP income may differ from the GAAP tax rate and from Tyler’s actual tax liabilities.

Non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial information prepared in accordance with GAAP. The non-GAAP measures used by Tyler Technologies may be different from non-GAAP measures used by other companies. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, which has been provided in the financial statement tables included below in this press release.

Forward-looking Statements

This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical in nature and typically address future or anticipated events, trends, expectations or beliefs with respect to our financial condition, results of operations or business. Forward-looking statements often contain words such as “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates,” “plans,” “intends,” “continues,” “may,” “will,” “should,” “projects,” “might,” “could” or other similar words or phrases. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. We believe there is a reasonable basis for our forward-looking statements, but they are inherently subject to risks and uncertainties and actual results could differ materially from the expectations and beliefs reflected in the forward-looking statements. We presently consider the following to be among the important factors that could cause actual results to differ materially from our expectations and beliefs: (1) changes in the budgets or regulatory environments of our clients, primarily local and state governments, that could negatively impact information technology spending; (2) our ability to protect client information from security breaches and provide uninterrupted operations of data centers; (3) our ability to achieve growth or operational synergies through the integration of acquired businesses, while avoiding unanticipated costs and disruptions to existing operations; (4) material portions of our business require the Internet infrastructure to be adequately maintained; (5) our ability to achieve our financial forecasts due to various factors, including project delays by our clients, reductions in transaction size, fewer transactions, delays in delivery of new products or releases or a decline in our renewal rates for service agreements; (6) general economic, political and market conditions; (7) technological and market risks associated with the development of new products or services or of new versions of existing or acquired products or services; (8) competition in the industry in which we conduct business and the impact of competition on pricing, client retention and pressure for new products or services; (9) the ability to attract and retain qualified personnel and dealing with the loss or retirement of key members of management or other key personnel; and (10) costs of compliance and any failure to comply with government and stock exchange regulations. These factors and other risks that affect our business are described in our filings with the Securities and Exchange Commission, including the detailed “Risk Factors” contained in our most recent annual report on Form 10-K. We expressly disclaim any obligation to publicly update or revise our forward-looking statements.

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

 

Software licenses and royalties

 

$

32,358

 

 

$

25,821

 

 

$

100,205

 

 

$

93,441

 

Subscriptions

 

80,330

 

 

59,811

 

 

296,352

 

 

220,547

 

Software services

 

52,220

 

 

46,457

 

 

213,061

 

 

191,269

 

Maintenance

 

113,644

 

 

98,333

 

 

430,318

 

 

384,521

 

Appraisal services

 

6,024

 

 

5,376

 

 

23,479

 

 

21,846

 

Hardware and other

 

4,261

 

 

6,183

 

 

23,012

 

 

23,658

 

Total revenues

 

288,837

 

 

241,981

 

 

1,086,427

 

 

935,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software licenses and royalties

 

1,258

 

 

863

 

 

3,938

 

 

3,802

 

Acquired software

 

7,997

 

 

5,969

 

 

30,642

 

 

22,972

 

Software services, maintenance and subscriptions

 

130,674

 

 

111,843

 

 

502,138

 

 

438,923

 

Appraisal services

 

4,031

 

 

3,445

 

 

15,337

 

 

14,299

 

Hardware and other

 

2,602

 

 

3,990

 

 

17,472

 

 

15,708

 

Total cost of revenues

 

146,562

 

 

126,110

 

 

569,527

 

 

495,704

 

 

 

 

 

 

 

 

 

 

Gross profit

 

142,275

 

 

115,871

 

 

516,900

 

 

439,578

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

70,265

 

 

55,134

 

 

257,746

 

 

207,605

 

Research and development expense

 

21,170

 

 

17,335

 

 

81,342

 

 

63,264

 

Amortization of customer and trade name intangibles

 

5,683

 

 

4,475

 

 

21,445

 

 

16,217

 

Operating income

 

45,157

 

 

38,927

 

 

156,367

 

 

152,492

 

Other income, net

 

2,633

 

 

1,180

 

 

3,471

 

 

3,378

 

Income before income taxes

 

47,790

 

 

40,107

 

 

159,838

 

 

155,870

 

Income tax provision

 

1,000

 

 

8,555

 

 

13,311

 

 

8,408

 

Net income

 

$

46,790

 

 

$

31,552

 

 

$

146,527

 

 

$

147,462

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

Basic

 

$

1.20

 

 

$

0.82

 

 

$

3.79

 

 

$

3.84

 

Diluted

 

$

1.15

 

 

$

0.79

 

 

$

3.65

 

 

$

3.68

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

39,076

 

 

38,614

 

 

38,640

 

 

38,445

 

Diluted

 

40,736

 

 

39,891

 

 

40,105

 

 

40,123

 

TYLER TECHNOLOGIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2019

 

2018

 

2019

 

2018

Reconciliation of non-GAAP total revenues

 

 

 

 

 

 

 

 

GAAP total revenues

 

$

288,837

 

 

$

241,981

 

 

$

1,086,427

 

 

$

935,282

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Write-downs of acquisition-related deferred revenue

 

(1,495

)

 

952

 

 

4,557

 

 

4,000

 

Amortization of acquired subleases

 

83

 

 

100

 

 

372

 

 

426

 

Non-GAAP total revenues

 

$

287,425

 

 

$

243,033

 

 

$

1,091,356

 

 

$

939,708

 

 

 

 

 

 

 

 

 

 

Reconciliation of non-GAAP gross profit and margin

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

142,275

 

 

$

115,871

 

 

$

516,900

 

 

$

439,578

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Write-downs of acquisition-related deferred revenue

 

(1,495

)

 

952

 

 

4,557

 

 

4,000

 

Amortization of acquired leases

 

83

 

 

100

 

 

372

 

 

426

 

Share-based compensation expense included in cost of revenues

3,836

 

 

3,948

 

 

15,002

 

 

13,588

 

Amortization of acquired software

 

7,997

 

 

5,969

 

 

30,642

 

 

22,972

 

Non-GAAP gross profit

 

$

152,696

 

 

$

126,840

 

 

$

567,473

 

 

$

480,564

 

GAAP gross margin

 

49.3

%

 

47.9

%

 

47.6

%

 

47.0

%

Non-GAAP gross margin

 

53.1

%

 

52.2

%

 

52.0

%

 

51.1

%

 

 

 

 

 

 

 

 

 

Reconciliation of non-GAAP operating income and margin

 

 

 

 

 

 

 

 

GAAP operating income

 

$

45,157

 

 

$

38,927

 

 

$

156,367

 

 

$

152,492

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Write-downs of acquisition-related deferred revenue

 

(1,495

)

 

952

 

 

4,557

 

 

4,000

 

Amortization of acquired leases

 

83

 

 

100

 

 

372

 

 

426

 

Share-based compensation expense

 

15,598

 

 

14,774

 

 

59,967

 

 

52,740

 

Employer portion of payroll tax related to employee stock transactions

693

 

 

4

 

 

1,745

 

 

1,412

 

Acquisition related costs

 

197

 

 

 

 

1,142

 

 

 

Amortization of acquired software

 

7,997

 

 

5,969

 

 

30,642

 

 

22,972

 

Amortization of customer and trade name intangibles

 

5,683

 

 

4,475

 

 

21,445

 

 

16,217

 

Non-GAAP adjustments subtotal

 

28,756

 

 

26,274

 

 

$

119,870

 

 

$

97,767

 

Non-GAAP operating income

 

$

73,913

 

 

$

65,201

 

 

$

276,237

 

 

$

250,259

 

GAAP operating margin

 

15.6

%

 

16.1

%

 

14.4

%

 

16.3

%

Non-GAAP operating margin

 

25.7

%

 

26.8

%

 

25.3

%

 

26.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2019

 

2018

 

2019

 

2018

Reconciliation of non-GAAP net income and earnings per share

 

 

 

 

 

 

 

 

GAAP net income

 

$

46,790

 

 

$

31,552

 

 

$

146,527

 

 

$

147,462

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Total non-GAAP adjustments to operating income

 

28,756

 

 

26,274

 

 

119,870

 

 

97,767

 

Tax impact related to non-GAAP adjustments

 

(17,371

)

 

(7,376

)

 

(53,819

)

 

(52,464

)

Non-GAAP net income

 

$

58,175

 

 

$

50,450

 

 

$

212,578

 

 

$

192,765

 

GAAP earnings per diluted share

 

$

1.15

 

 

$

0.79

 

 

$

3.65

 

 

$

3.68

 

Non-GAAP earnings per diluted share

 

$

1.43

 

 

$

1.26

 

 

$

5.30

 

 

$

4.80

 

 

 

 

 

 

 

 

 

 

Detail of share-based compensation expense

 

 

 

 

 

 

 

 

Cost of software services, maintenance and subscriptions

 

$

3,836

 

 

$

3,948

 

 

$

15,002

 

 

$

13,588

 

Selling, general and administrative expenses

 

11,762

 

 

10,826

 

 

44,965

 

 

39,152

 

Total share-based compensation expense

 

$

15,598

 

 

$

14,774

 

 

$

59,967

 

 

$

52,740

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of EBITDA and adjusted EBITDA

 

 

 

 

 

 

 

 

GAAP net income

 

$

46,790

 

 

$

31,552

 

 

$

146,527

 

 

$

147,462

 

Amortization of customer and trade name intangibles

 

5,683

 

 

4,475

 

 

21,445

 

 

16,217

 

Depreciation and amortization included in

 

 

 

 

 

 

 

 

cost of revenues, SG&A and other expenses

 

14,260

 

 

11,580

 

 

54,899

 

 

45,052

 

Interest expense included in other income, net

 

155

 

 

193

 

 

1,564

 

 

763

 

Income tax provision

 

1,000

 

 

8,555

 

 

13,311

 

 

8,408

 

EBITDA

 

$

67,888

 

 

$

56,355

 

 

$

237,746

 

 

$

217,902

 

Write-downs of acquisition-related deferred revenue

 

(1,495

)

 

952

 

 

4,557

 

 

4,000

 

Share-based compensation expense

 

15,598

 

 

14,774

 

 

59,967

 

 

52,740

 

Acquisition related costs

 

197

 

 

 

 

$

1,142

 

 

$

 

Adjusted EBITDA

 

$

82,188

 

 

$

72,081

 

 

$

303,412

 

 

$

274,642

 

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

 
 

 

December 31, 2019

 

December 31, 2018

ASSETS

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

232,682

 

 

$

134,279

 

Accounts receivable, net

 

374,089

 

 

298,912

 

Current investments and other assets

 

66,444

 

 

80,970

 

Income tax receivable

 

6,482

 

 

4,697

 

Total current assets

 

679,697

 

 

518,858

 

 

 

 

 

 

Accounts receivable, long-term portion

 

22,432

 

 

16,020

 

Operating lease right-of-use assets

 

18,992

 

 

 

Property and equipment, net

 

171,861

 

 

155,177

 

 

 

 

 

 

Other assets:

 

 

 

 

Goodwill

 

840,117

 

 

753,718

 

Other intangibles, net

 

378,914

 

 

276,852

 

Non-current investments and other assets

 

79,601

 

 

70,338

 

 

 

 

 

 

Total assets

 

$

2,191,614

 

 

$

1,790,963

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued liabilities

 

$

90,211

 

 

$

73,390

 

Operating lease liabilities

 

6,387

 

 

 

Deferred revenue

 

412,495

 

 

350,512

 

Total current liabilities

 

509,093

 

 

423,902

 

 

 

 

 

 

Revolving line of credit

 

 

 

 

Deferred revenue, long-term

 

199

 

 

424

 

Deferred income taxes

 

48,442

 

 

41,791

 

Operating lease liabilities, long-term

 

16,822

 

 

 

Shareholders’ equity

 

1,617,058

 

 

1,324,846

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,191,614

 

 

$

1,790,963

 

 

 

 

 

 

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

 
 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2019

 

2018

 

2019

 

2018

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

46,790

 

 

$

31,552

 

 

$

146,527

 

 

$

147,462

 

Adjustments to reconcile net income to cash

 

 

 

 

 

 

 

 

provided by operations:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

20,125

 

 

16,132

 

 

76,672

 

 

61,759

 

Share-based compensation expense

 

15,598

 

 

14,774

 

 

59,967

 

 

52,740

 

Provision for losses – accounts receivable

 

5,514

 

 

2,286

 

 

5,514

 

 

2,286

 

Operating lease right-of-use assets – non cash

 

1,418

 

 

 

 

5,397

 

 

 

Deferred income tax expense (benefit)

 

4,241

 

 

(35

)

 

(6,088

)

 

(5,069

)

Changes in operating assets and liabilities,

 

 

 

 

 

 

 

 

exclusive of effects of acquired companies

 

(17,493

)

 

6,141

 

 

(33,269

)

 

(8,975

)

Net cash provided by operating activities

 

76,193

 

 

70,850

 

 

254,720

 

 

250,203

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Additions to property and equipment

 

(8,403

)

 

(3,964

)

 

(37,236

)

 

(27,424

)

Purchase of marketable security investments

 

(27,420

)

 

(22,987

)

 

(54,742

)

 

(115,625

)

Proceeds from marketable security investments

 

13,942

 

 

20,997

 

 

70,796

 

 

81,205

 

Capitalized software development costs

 

(1,264

)

 

 

 

(4,804

)

 

 

Cost of acquisitions, net of cash acquired

 

(18,864

)

 

(10,785

)

 

(218,734

)

 

(178,093

)

Decrease (increase) in other

 

198

 

 

825

 

 

(295

)

 

1,682

 

Net cash used by investing activities

 

(41,811

)

 

(15,914

)

 

(245,015

)

 

(238,255

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Decrease in net borrowings on revolving line of credit

 

 

 

 

 

 

 

 

Purchase of treasury shares

 

 

 

(146,553

)

 

(17,786

)

 

(146,553

)

Proceeds from exercise of stock options

 

34,613

 

 

2,073

 

 

96,908

 

 

74,907

 

Contributions from employee stock purchase plan

 

2,249

 

 

4,371

 

 

9,576

 

 

8,051

 

Net cash provided (used) by financing activities

 

36,862

 

 

(140,109

)

 

88,698

 

 

(63,595

)

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

71,244

 

 

(85,173

)

 

98,403

 

 

(51,647

)

Cash and cash equivalents at beginning of period

 

161,438

 

 

219,452

 

 

134,279

 

 

185,926

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

$

232,682

 

 

$

134,279

 

 

$

232,682

 

 

$

134,279

 

Contacts

Brian K. Miller

Executive Vice President & CFO

Tyler Technologies, Inc.

972-713-3720

brian.miller@tylertech.com

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