Tyler Technologies, Inc. (NYSE:TYL) Q4 2022 Earnings Call Transcript

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Brian Miller: Yes, I think one of the bigger factors around backlog I think backlog is probably becomes maybe a little less meaningful or less of a full picture when you look at it is really around how the accounting drives what goes into backlog and what doesn’t. So transaction revenues don’t sit in the backlog. So as we add new payments or new portal revenues, those typically are under fixed arrangements so even though they may be highly predictable and recurring. So there typically wouldn’t be an addition to backlog for those. And then we’ve talked in the past as well about sometimes the terms of a contract agreement dictate how much goes into backlog. So for example, a termination for convenience provision can significantly limit that we saw that with a really large contract last quarter.

That was a 50 plus million dollar contract that only $8 million went into backlog because that’s a termination for convenience provision. So I think there’s a lot of factors that start to make the backlog number maybe less of an important metric to look at how we expect to perform going forward.

Operator: Your next question comes from the line of Peter Heckmann with D.A. Davidson. Your line is now open.

Peter Heckmann: Good morning. Thanks for taking the question. I have a few just clarifications there. And I may have missed some detail. So forgive me if I’m repeating myself. But when we look at bookings we typically see this quarter as a big public safety bookings quarter. Can you talk about how they are receiving the idea of converting to subscription? And then just clarifying, were there any deals with containers in bookings in the quarter that were greater than 5 million of TCB?

Lynn Moore: Yes. Sure Pete. On the public safety side, it is typically a little bit larger quarter. we don’t typically talk about deals that we’ve awarded, but not signed. I will say that we had a couple of deals that were of significance that that pushed for the quarter. We are continuing to see more and more acceptance on the public safety side to the SaaS model and to subscriptions. And I think we’re going to continue to see that going forward. It’s part of our actual in our budget process. If you look generally across Tyler, I think for next year on a sort of an overall weighted value average, we’re expecting north of 90%, 91% of deals next year to be in SaaS with a significant increase on the public safety side, still less than half on the public safety side. But it is something that we’re doing some modeling and some things that we’re trying to do to sort of push that model with our clients.

Brian Miller: Yes, and this quarter, we did not have any individual contracts that were more than $5 million in total contract values. We had a couple in the $4 million range on the software side. We did have a competitive rebid when, with our state enterprise agreement in Colorado, which is one of our bigger states. And certainly the total value of that contract over the five year term is well above $5 million. But on the software side, no individual deals more than 5 million. So it was more of a high volume sort of more mid range deals this quarter.

Peter Heckmann: Got it. And so to your point that bookings might be come up with slightly less useful metric given how you gross up the TCB related to variable revenue streams and contracts. I missed what you said on the 500 and some payments deals. What was the TCB related to that and then can you get given an approximation of how much that was included in for your bookings? Did it have just been your estimate of the first year?

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