U.S. markets open in 3 hours 18 minutes
  • S&P Futures

    4,079.50
    +74.75 (+1.87%)
     
  • Dow Futures

    32,636.00
    +477.00 (+1.48%)
     
  • Nasdaq Futures

    12,541.50
    +296.75 (+2.42%)
     
  • Russell 2000 Futures

    1,818.30
    +35.90 (+2.01%)
     
  • Crude Oil

    114.85
    +0.65 (+0.57%)
     
  • Gold

    1,827.30
    +13.30 (+0.73%)
     
  • Silver

    21.80
    +0.25 (+1.16%)
     
  • EUR/USD

    1.0484
    +0.0046 (+0.44%)
     
  • 10-Yr Bond

    2.8770
    0.0000 (0.00%)
     
  • Vix

    26.59
    -2.28 (-7.90%)
     
  • GBP/USD

    1.2464
    +0.0141 (+1.14%)
     
  • USD/JPY

    129.2490
    +0.1960 (+0.15%)
     
  • BTC-USD

    30,588.14
    +1,061.08 (+3.59%)
     
  • CMC Crypto 200

    686.66
    +443.98 (+182.95%)
     
  • FTSE 100

    7,532.39
    +67.59 (+0.91%)
     
  • Nikkei 225

    26,659.75
    +112.70 (+0.42%)
     

GTY Technology Holdings Announces Solid Third Quarter Financial Results

  • Oops!
    Something went wrong.
    Please try again later.
·16 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Annual recurring revenue of $48.5 million, up 25% year-over-year

Total third quarter revenue of $16.3 million, up 29% year-over-year

BOSTON, November 04, 2021--(BUSINESS WIRE)--GTY Technology Holdings Inc. (Nasdaq: GTYH) ("GTY"), a leading vertical SaaS/Cloud solution provider for the public sector, today announced financial results for the third quarter ended September 30, 2021.

"GTY reported another great quarter, highlighted by the large CityBase kiosk install with DTE Energy, a midwestern electric utility which drove our strong performance this quarter with one-time revenue associated with kiosks and will generate significant recurring revenue going forward. We again exceeded expectations across all key operating metrics with continued strength in ARR at 25% growth year-over-year," said TJ Parass, CEO of GTY. "As we look ahead, we are very encouraged by the strength of our portfolio and the tailwinds supporting the need for public sector organizations to modernize and transform their operations. We believe these strengths as well as our continued investments in sales and marketing position us to maintain our momentum for the balance of fiscal 2021 and beyond."

Third Quarter 2021 Financial Highlights

  • Revenue: Total GAAP revenue for the third quarter of 2021 was $16.3 million, up 29% compared to $12.6 million in the third quarter of 2020. Total non-GAAP revenue for the third quarter of 2021 was $16.4 million, up 29% compared to $12.7 million in the third quarter of 2020.

  • Gross Profit: Gross profit for the third quarter of 2021 was $10.3 million, compared to $8.0 million for the third quarter of 2020. Gross margin for the third quarter of 2021 was 64%, compared to 63% for the third quarter of 2020. Non-GAAP gross profit for the third quarter of 2021 was $10.9 million, compared to $8.3 million for the third quarter of 2020. Non-GAAP gross margin was 67% for the third quarter of 2021, compared to 65% for the third quarter of 2020.

  • Operating (Loss): Operating loss for the third quarter of 2021 was $(8.5) million, compared to an operating loss of $(7.3) million in the third quarter of 2020. Non-GAAP operating loss for the third quarter of 2021 was $(0.1) million, compared to an operating loss of $(1.4) million in the third quarter of 2020.

  • Net (Loss): Net loss for the third quarter of 2021 was $(9.5) million, or $(0.17) per share, based on 57.5 million weighted average shares outstanding. During the third quarter of 2020, net loss was $(7.2) million, or $(0.13) per share, based on 53.8 million weighted average shares outstanding.

Definitions and reconciliations of all non-GAAP financial measures and additional information regarding operating measures are included below in the section titled "Use of Non-GAAP Financial Measures" and in the accompanying tables. All comparisons in this press release are year over year unless otherwise provided.

Third Quarter 2021 Highlights and Key Metrics

  • CityBase, GTY’s payment solutions subsidiary, deployed a large kiosk solution with DTE Energy well ahead of schedule.

  • Bonfire, GTY’s eProcurement subsidiary, launched Bonfire Open Access Community Projects. This freely accessible tool will provide public procurement teams with access to an extensive database of public projects from across North America to streamline the RFx creation process.

  • Added 74 new customers in the quarter ended September 30, 2021.

  • The number of customers was 1,868 as of September 30, 2021, an increase of 11% from 1,685 as of September 30, 2020.

Additional information regarding our new customers, total customers and Annual Recurring Revenue and how each are calculated are included below.

Financial Outlook

As of November 4, 2021, GTY is providing guidance for its fourth quarter and full year 2021 as follows:

  • Fourth Quarter 2021 Guidance: Total Non-GAAP revenue is expected to be in the range of $16.3 million to $16.8 million or approximately 25% year-over-year growth. Non-GAAP loss from operations is expected to be in the range of $(2.0) to $(2.5) million.

  • Full Year 2021 Guidance: Total Non-GAAP revenue is expected to be in the range of $60.5 million to $61.0 million or approximately 24% year- over-year growth. Non-GAAP loss from operations is expected to be in the range of $(4.7) to $(5.2) million.

Conference Call and Webcast
GTY will hold its quarterly earnings call on November 4, 2021 at 4:30 p.m. ET. Conference call details for participation on the call are listed below. A transcript will also be posted to the Investor Relations section of our website at www.gtytechnology.com.

Investors and participants can register for the call in advance by registering here. After registering, instructions will be shared on how to join the call. The call will also be available via live webcast here. The archived webcast will be available shortly after the call on the company website, www.gtytechnology.com.

About GTY Technology Holdings Inc.
GTY Technology Holdings Inc. (NASDAQ: GTYH) ("GTY") brings leading public sector technology companies together to achieve a new standard in stakeholder engagement and resource management. Through its six business units, GTY offers an intuitive cloud-based suite of solutions for state and local governments, education institutions, and healthcare organizations spanning functions in procurement, payments, grant management, budgeting, and permitting: Bonfire provides strategic sourcing and procurement software to enable confident and compliant spending decisions; CityBase provides government payment solutions to connect constituents with utilities and government agencies; eCivis offers a grant management system to maximize grant revenues and track performance; Open Counter provides user-friendly software to guide applicants through complex permitting and licensing procedures; Questica offers budget preparation and management software to deliver on financial and non-financial strategic objectives; Sherpa provides public-sector budgeting software and consulting services.

Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The company’s actual results may differ from its expectations, estimates and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue" and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the company’s expectations with respect to future performance. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside of the company’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) the impact of the COVID-19 pandemic, or other public health crises, on our operations, our customers and the economy; (2) the risk that the ongoing integration of the businesses acquired in our business combination disrupts current plans and operations; (3) the ability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably and retain its key employees; (4) our failure to generate sufficient cash flow from our business to make payments on our debt; (5) changes in applicable laws or regulations; (6) the possibility that the company may be adversely affected by other economic, business or competitive factors; and (7) other risks and uncertainties included in our Annual Report on Form 10-K for the year ended December 31, 2020 and our subsequent filings with the Securities and Exchange Commission. We caution you that the foregoing list of factors is not exclusive, and readers should not place undue reliance upon any forward-looking statements, which speak only as of the date made. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by securities law.

Use of Non-GAAP Financial Measures
To supplement its condensed consolidated financial statements, which are prepared in accordance with U.S. generally accepted accounting principles, or GAAP, GTY has provided in this release certain financial measures that have not been prepared in accordance with GAAP defined as "non-GAAP financial measures," which include (i) non-GAAP revenues, (ii) non-GAAP gross profit and non-GAAP gross margin, (iii) and non-GAAP loss from operations.

GTY’s management uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to the corresponding GAAP measures, in evaluating GTY’s ongoing operational performance and trends. However, it is important to note that particular items GTY excludes from, or includes in, its non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measures to such GAAP financial measures has been provided in the tables included as part of this press release.

Non-GAAP Revenues. Non-GAAP revenues are defined as GAAP revenues adjusted for the impact of purchase accounting resulting from GTY’s business combination which reduced its acquired contract liabilities to fair value. The company believes that presenting non-GAAP revenues is useful to investors as it eliminates the impact of the purchase accounting adjustments to revenues to allow for a direct comparison between periods.

Non-GAAP Gross Profit and Non-GAAP Gross Margin. Non-GAAP gross profit is defined as GAAP gross profit adjusted for the impact of purchase accounting resulting GTY’s business combination and share-based compensation. Non-GAAP gross margin is defined as non-GAAP gross profit divided by non-GAAP revenues. The company believes that presenting non-GAAP gross profit and margin is useful to investors as it eliminates the impact of the purchase accounting adjustments to allow for a direct comparison between periods.

Non-GAAP Loss From Operations. Non-GAAP loss from operations is defined as GAAP loss from operations adjusted for the impact of purchase accounting to revenues resulting from GTY’s business combination, the amortization of acquired intangible assets, share-based compensation, acquisition related costs, goodwill impairment expense, restructuring expenses and the change in fair value of contingent consideration. The company believes that presenting non-GAAP loss from operations is useful to investors as it eliminates the impact of certain non-cash and acquisition related expenses to allow a direct comparison of loss from operations between periods.

Operating Metrics

We define the number of customers as the number of accounts with a unique account identifier for which we have an active contract in the period indicated. New customers have signed a new contract with a GTY entity in the period.

We define ARR as the annualized revenue run-rate of subscription, maintenance or transaction-based agreements from all customers at a point in time. For transaction based CityBase contracts we use the following calculation: For large projects (>$10K per month) with 12 months or more of history we use the trailing 12 months of history. For large projects with less than 12 months, we calculate an annualized value based on history available. For small projects (<$10K per month) we annualize the most recent month’s activity.

Exhibit 1

GTY Technology Holdings Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

Three Months Ended

Three Months Ended

Nine Months Ended

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Revenues

$

16,257

$

12,587

$

43,833

$

35,027

Cost of revenues

5,914

4,620

15,872

13,541

Gross Profit

10,343

7,967

27,961

21,486

Operating expenses

Sales and marketing (1)

4,351

3,875

11,620

12,396

General and administrative (1)

6,281

4,667

17,062

16,607

Research and development (1)

3,277

3,012

9,295

9,383

Amortization of intangible assets

3,668

3,683

10,911

10,998

Restructuring charges

-

2

-

3,666

Change in fair value of contingent consideration

1,235

-

3,599

29

Total operating expenses

18,812

15,239

52,487

53,079

Loss from operations

(8,469

)

(7,272

)

(24,526

)

(31,593

)

Other income (expense)

Interest income (expense), net

(789

)

(441

)

(2,501

)

(1,113

)

Loss from repurchase/issuance of shares

-

-

(5,333

)

(1,390

)

Change in fair value of warrant liability

(456

)

807

(4,023

)

3,104

Gain on extinguishment of debt

-

-

3,210

-

Other income (loss), net

90

(696

)

(9

)

437

Total other income (expense), net

(1,155

)

(330

)

(8,656

)

1,038

Loss before income taxes

(9,624

)

(7,602

)

(33,182

)

(30,555

)

Benefit from income taxes

93

384

154

2,068

Net loss

$

(9,531

)

$

(7,218

)

$

(33,028

)

$

(28,487

)

Net loss per share, basic and diluted

$

(0.17

)

$

(0.13

)

$

(0.58

)

$

(0.53

)

Weighted average common shares outstanding, basic and diluted

57,536

53,842

56,960

53,301

Net loss

$

(9,531

)

$

(7,218

)

$

(33,028

)

$

(28,487

)

Other comprehensive loss:

Foreign currency translation gain (loss)

608

(783

)

(61

)

313

Total other comprehensive income (loss)

608

(783

)

(61

)

313

Comprehensive loss

$

(8,923

)

$

(8,001

)

$

(33,089

)

$

(28,174

)

(1) Amounts include share-based compensation expense as follows:

Cost of revenues

$

447

$

225

$

1,102

$

575

Sales and Marketing

420

435

861

1,568

General and administrative

2,096

1,025

4,190

3,471

Research and development

373

339

874

724

Total share-based compensation expense

$

3,336

$

2,024

$

7,027

$

6,338

Exhibit 2

Reconciliations of non-GAAP Financial Measures

(in thousands)

(unaudited)

Non-GAAP Reconciliation

Three Months Ended

September 30, 2021

June 30, 2021

September 30, 2020

Revenues

$

16,257

$

14,317

$

12,587

Purchase accounting adjustment to revenue

105

104

128

Non-GAAP Revenues

$

16,362

$

14,421

$

12,715

Gross Profit

$

10,343

$

9,101

$

7,967

Purchase accounting adjustment to revenue

105

104

128

Share-based compensation

$

447

$

363

225

Non-GAAP Gross Profit

$

10,895

$

9,568

$

8,320

Gross Margin

64

%

64

%

63

%

Non-GAAP Gross Margin

67

%

66

%

65

%

Loss from operations

$

(8,469

)

$

(7,921

)

$

(7,272

)

Purchase accounting adjustment to revenue

105

104

128

Amortization of intangibles

3,668

3,644

3,683

Share-based compensation

3,336

1,868

2,024

Restructuring charges

-

-

2

Change in fair value of contingent consideration

1,235

1,250

-

Non-GAAP Loss from operations

$

(125

)

$

(1,055

)

$

(1,435

)

Nine Months Ended

September 30, 2021

September 30, 2020

Revenues

$

43,833

$

35,027

Purchase accounting adjustment to revenue

331

589

Non-GAAP Revenues

$

44,164

$

35,616

Gross Profit

$

27,961

$

21,486

Purchase accounting adjustment to revenue

331

589

Share-based compensation

1,102

575

Non-GAAP Gross Profit

$

29,394

$

22,650

Gross Margin

64

%

61

%

Non-GAAP Gross Margin

67

%

64

%

Loss from operations

(24,526

)

(31,593

)

Purchase accounting adjustment to revenue

331

589

Amortization of intangibles

10,911

10,998

Share-based compensation

7,027

6,338

Restructuring charges

-

3,666

Change in fair value of contingent consideration

3,599

29

Non-GAAP Loss from operations

$

(2,658

)

$

(9,973

)

Exhibit 3

GTY Technology Holdings Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

September 30,

December 31,

2021

2020

Assets

Current assets:

Cash and cash equivalents

$

15,327

$

22,800

Accounts receivable, net

11,068

9,994

Prepaid expenses and other current assets

4,029

2,583

Total current assets

30,424

35,377

Property and equipment, net

3,312

3,891

Intangible assets, net

90,196

101,107

Goodwill

284,635

284,635

Other assets

6,466

7,437

Total assets

$

415,033

$

432,447

Liabilities and Shareholders’ Equity

Current liabilities:

Accounts payable and accrued expenses

$

4,939

$

6,366

Deferred revenue - current portion

24,994

22,304

Contingent consideration - current portion

317

743

Other current liabilities

1,045

1,897

Total current liabilities

31,295

31,310

Deferred revenue - less current portion

1,785

1,602

Warrant liability

7,063

3,040

Deferred tax liability

17,307

17,494

Contingent consideration - less current portion

45,730

42,530

Term loan, net

24,331

26,632

Other long-term liabilities

2,738

3,074

Total liabilities

130,249

125,682

Commitments and contingencies

Shareholders’ equity:

Common stock

6

6

Exchangeable shares

50,637

54,224

Additional paid in capital

398,286

380,881

Accumulated other comprehensive income (loss)

(55

)

6

Treasury stock

(8,343

)

(5,633

)

Accumulated deficit

(155,747

)

(122,719

)

Total shareholders' equity

284,784

306,765

Total liabilities and shareholders’ equity

$

415,033

$

432,447

Exhibit 4

GTY Technology Holdings Inc.

Condensed Statement of Cash Flows

(in thousands)

(unaudited)

Nine Months Ended

Nine Months Ended

September 30, 2021

September 30, 2020

Cash flows from operating activities:

Net loss

$

(33,028

)

$

(28,487

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation of property and equipment

764

439

Amortization of intangible assets

10,911

10,998

Amortization of right of use assets

1,354

1,107

Share-based compensation

7,027

6,338

Deferred income tax benefit

(154

)

(2,068

)

Loss on issuance/repurchase of shares

5,333

1,390

Change in fair value of warrant liability

4,023

(3,104

)

Change in fair value of contingent consideration

3,599

29

Gain on extinguishment of debt

(3,210

)

-

Amortization of deferred debt issuance costs

648

395

Other

305

90

Changes in operating assets and liabilities:

Accounts receivable

(1,118

)

(1,387

)

Prepaid expenses and other assets

(1,600

)

(1,564

)

Accounts payable and accrued liabilities

(1,454

)

(1,212

)

Deferred revenue and other liabilities

2,868

4,708

Operating lease liabilities

(891

)

(1,202

)

Net cash (used in) provided by operating activities

(4,623

)

(13,530

)

Cash flows from investing activities:

Capital expenditures

(203

)

(2,850

)

Net cash (used in) provided by investing activities

(203

)

(2,850

)

Cash flows from financing activities:

Proceeds from borrowings, net of issuance costs

-

14,543

Contingent consideration payments

(825

)

(27

)

Common stock repurchases

(8,043

)

-

Proceeds from issuance of common stock, net of costs

6,790

-

Other

(523

)

(380

)

Net cash provided by (used in) financing activities

(2,601

)

14,136

Effect of foreign currency on cash

(46

)

88

Net change in cash and cash equivalents

(7,473

)

(2,156

)

Cash and cash equivalents, beginning of period

22,800

8,374

Cash and cash equivalents, end of period

15,327

6,218

View source version on businesswire.com: https://www.businesswire.com/news/home/20211104006201/en/

Contacts

Company Contacts:
Investor Relations
ir@gtytechnology.com
1-877-465-3200