Tyler Technologies, Inc.

Hello, and welcome to today's Tyler Technologies 2021 Financial Guidance Conference call. Your host for the call this day is Lynn Moore, President and CEO of Tyler Technologies. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. And as a reminder, this conference is being recorded today, June 7, 2021. I would now like to turn the call over to Mr. Moore. Please go ahead.

Thank you, Tom, and welcome to our 2021 Guidance Update Call. Joining me today is Brian Miller, our Chief Financial Officer. Also with us are Brett Dixon, President of our Justice Group, and Bruce Graham, Senior Strategy Advisor. Brett is the Tyler Executive leading the transition and integration of NIC as a part of Tyler. And Bruce is working closely with Brett and the NIC leadership team on strategic planning. First, I'd like for Brian to give a safe harbor statement and update our annual guidance. Then, we'll provide an update on the NIC acquisition and discuss some of the strategic opportunities around the combination. Note that we have posted a presentation on our website at tylertech.irpass.com backslash presentations that we will refer to in our discussion. After that, we'll take questions. Brian.

Thanks, Lynn. During the course of this conference call, management may make statements that provide information other than historical information and may include projections concerning the company's future prospects, revenues, expenses, and profits. Such statements are considered forward-looking statements under the safe harbor provision of the Private Security Litigation Reform Act of 1995 and are subject to certain risks and uncertainties which could cause actual results to differ materially from these projections. We would refer you to our Form 10-K and other SEC filings for more information on those risks. Lynn? I'm going to now move into the guidance section of the call. This morning, Tyler Technologies updated its guidance for the full year of 2021. This guidance includes the results of NIC from the date of its acquisition, April 21, 2021. We expect 2021 GAAP total revenues will be between $1.507 billion and $1.537 billion, and non-GAAP total revenues will be between $1.510 billion and $1.54 billion. NIC is expected to contribute non-GAAP revenues from the date of acquisition of $310 million to $315 million, which includes approximately $21 million of COVID-related revenues from Tour Health and pandemic unemployment services that are not expected to recur in future years. NIC's full-year pro forma non-GAAP revenues are expected to be approximately $475 million to $480 million, which includes approximately $57 million of revenues from COVID-related initiatives. We expect that 2021 GAAP diluted EPS will be between $3.58 and $3.74, and may vary significantly due to the impact of stock incentive awards on the GAAP effective tax rate. We expect 2021 non-GAAP diluted EPS will be between $6.65 and $6.77. Interest expense for the year is expected to be approximately $24 million, And for the year pre-tax, non-cash share-based compensation expense is expected to be approximately $100 million. We expect R&D expense for the year will be between $98 million and $100 million. Fully diluted shares for the year are expected to be between $42.5 million and $43 million shares. GAAP earnings per share assumes an estimated annual effective tax rate of 3.5% after discrete tax items. includes approximately $39 million of estimated discrete tax benefits related to share-based compensation, which may vary significantly based on the timing and volume of stock option exercises. Our estimated non-GAAP annual effective tax rate for 2021 is 24%. We expect our total capital expenditures will be between $40 million and $42 million for the year, including approximately $6 million related to real estate and approximately $15 million of capitalized software development costs. Total depreciation and amortization is expected to be approximately $126 million, including approximately $88 million of amortization of acquired intangibles. Now I'd like to turn the call back over to Lynn.