Annual recurring revenue of $44.1 million, up
27% year-over-year
Total first quarter revenue of $13.3 million,
up 18% year-over-year
GTY Technology Holdings Inc. (Nasdaq: GTYH) (“GTY”), a leading
vertical SaaS/Cloud solution provider for the public sector, today
announced financial results for the first quarter ended March 31,
2021.
“The first quarter was an outstanding start to 2021, primarily
driven by robust activity across all of our business segments. We
accelerated year-over-year ARR growth to 27% and achieved 18%
revenue growth that exceeded guidance,” said TJ Parass, CEO of GTY.
“We have great momentum across our business and see strong demand
for our products as more and more public sector organizations are
pushing to modernize and transform their operations. As we look
forward, we believe GTY is well positioned to capitalize on the
recovery trend and execute on our growth initiatives.”
First Quarter 2021 Financial Highlights
- Revenue: Total GAAP revenue for the first quarter of
2021 was $13.3 million, up 18% compared to $11.3 million in the
first quarter of 2020. Total non-GAAP revenue for the first quarter
of 2021 was $13.4 million, up 15% compared to $11.6 million in the
first quarter of 2020.
- Gross Profit: Gross profit for the first quarter of 2021
was $8.5 million, compared to $6.7 million for the first quarter of
2020. Gross margin for the first quarter of 2021 was 64%, compared
to 60% for the first quarter of 2020. Non-GAAP gross profit for the
first quarter of 2021 was $8.9 million, compared to $7.3 million
for the first quarter of 2020. Non-GAAP gross margin was 67% for
the first quarter of 2021, compared to 63% for the first quarter of
2020.
- Operating (Loss): Operating loss for the first quarter
of 2021 was $(8.1) million, compared to an operating loss of
$(16.5) million in the first quarter of 2020. Non-GAAP operating
loss for the first quarter of 2021 was $(1.5) million, compared to
an operating loss of $(5.7) million in the first quarter of
2020.
- Net (Loss): Net loss for the first quarter of 2021 was
$(18.0) million, or $(0.32) per share, based on 55.8 million
weighted average shares outstanding. During the first quarter of
2020, net loss was $(17.4) million, or $(0.33) per share, based on
52.6 million weighted average shares outstanding.
On April 12, 2021, the SEC released guidance regarding the
technical accounting for warrants issued by special purpose
acquisition companies. GTY has assessed the impact of this recent
guidance and determined it is not material to previously issued
financial statements. Accordingly, GTY will revise, rather than
restate, its previously issued 2020 quarterly and annual financial
statements in GTY’s filings for 2021 on Forms 10-Q and 10-K. The
guidance does not impact GTY’s non-GAAP operating metrics for 2019
or 2020, including non-GAAP revenues, non-GAAP gross profit,
non-GAAP gross margin and non-GAAP loss from operations.
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.
First Quarter 2020 Highlights and Key Metrics
- Raised $6.8 million through equity sales
- Redeemed shares worth $8 million
- The number of customers was 1,793 as of March 31, 2021, an
increase of 14% from 1,578 as of March 31, 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 May 13, 2021, GTY is providing guidance for its second
quarter and full year 2021 as follows:
- Second Quarter 2021 Guidance: Total Non-GAAP revenue is
expected to be in the range of $13.5 million to $14.0 million or
approximately 22% year-over-year growth.
- Full Year 2021 Guidance: Total Non-GAAP revenue is
expected to be in the range of $57.0 million to $60.0 million or
approximately 20% year- over-year growth.
Conference Call and Webcast
GTY will hold its quarterly earnings call on May 13, 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 using conference ID 7597626. 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.
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 its 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 its 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 its 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
Three Months
Ended
Ended
March 31, 2021
March 31, 2020
Revenues
$
13,259
$
11,276
Cost of revenues
4,742
4,527
Gross Profit
8,517
6,749
Operating expenses Sales and marketing (1)
3,762
4,854
General and administrative (1)
5,193
7,449
Research and development (1)
2,985
3,798
Amortization of intangible assets
3,599
3,673
Restructuring charges
-
3,466
Change in fair value of contingent consideration
1,114
29
Total operating expenses
16,653
23,269
Loss from operations
(8,136
)
(16,520
)
Other income (expense) Interest income (expense), net
(859
)
(236
)
Loss from repurchase/issuance of shares
(5,333
)
(2,056
)
Change in fair value of warrant liability
(4,038
)
(1,563
)
Other income (loss), net
168
499
Total other income (expense), net
(10,062
)
(3,356
)
Loss before income taxes
(18,198
)
(19,876
)
Benefit from income taxes
170
2,521
Net loss
$
(18,028
)
$
(17,355
)
Net loss per share, basic and diluted
$
(0.32
)
$
(0.33
)
Weighted average common shares outstanding, basic and diluted
55,828
52,575
Net loss
$
(18,028
)
$
(17,355
)
Other comprehensive loss: Foreign currency translation gain (loss)
255
2,049
Total other comprehensive income (loss)
255
2,049
Comprehensive loss
$
(17,773
)
$
(15,306
)
(1) Amounts include share-based compensation expense as
follows: Cost of revenues
$
292
$
218
Sales and Marketing
359
771
General and administrative
946
2,051
Research and development
226
255
Total share-based compensation expense
$
1,823
$
3,295
Exhibit 2 Reconciliations of non-GAAP Financial
Measures (in thousands) (unaudited)
Non-GAAP Reconciliation Three Months Ended March
31, 2021 December 31, 2020 March 31, 2020
Revenues
$
13,259
$
13,101
$
11,276
Purchase accounting adjustment to revenue
122
126
315
Non-GAAP Revenues
$
13,381
$
13,227
$
11,591
Gross Profit
$
8,517
$
8,174
$
6,749
Purchase accounting adjustment to revenue
122
126
315
Share-based compensation
$
292
$
236
218
Non-GAAP Gross Profit
$
8,931
$
8,536
$
7,282
Gross Margin
64
%
62
%
60
%
Non-GAAP Gross Margin
67
%
65
%
63
%
Loss from operations
$
(8,136
)
$
(11,125
)
$
(16,520
)
Purchase accounting adjustment to revenue
122
126
315
Amortization of intangibles
3,599
3,683
3,673
Share-based compensation
1,823
2,283
3,295
Goodwill impairment expense
-
2,000
-
Restructuring charges
-
-
3,466
Change in fair value of contingent consideration
1,114
1,951
29
Non-GAAP Loss from operations
$
(1,478
)
$
(1,082
)
$
(5,742
)
Exhibit 3 GTY Technology Holdings Inc.
Condensed Consolidated Balance Sheets (in thousands)
(unaudited)
March 31,
December 31,
2021
2020
Assets Current assets:
Cash and cash equivalents
$
17,936
$
22,800
Accounts receivable, net
10,752
9,994
Prepaid expenses and other current assets
3,855
2,583
Total current assets
32,543
35,377
Property and equipment, net
3,651
3,891
Intangible assets, net
97,508
101,107
Goodwill
284,635
284,635
Other assets
7,605
7,437
Total assets
$
425,942
$
432,447
Liabilities and Shareholders’
Equity Current liabilities: Accounts payable and
accrued expenses
$
5,556
$
6,366
Deferred revenue - current portion
23,345
22,304
Contingent consideration - current portion
729
743
Other current liabilities
1,713
1,897
Total current liabilities
31,343
31,310
Deferred revenue - less current portion
2,236
1,602
Warrant liability
7,078
3,040
Deferred tax liability
17,144
17,494
Contingent consideration - less current portion
43,630
42,530
Term loan, net
26,694
26,632
Other long-term liabilities
2,921
3,074
Total liabilities
131,046
125,682
Commitments and contingencies Shareholders’
equity: Common stock
6
6
Exchangeable shares
50,637
54,224
Additional paid in capital
393,082
380,881
Accumulated other comprehensive income
261
6
Treasury stock
(8,343
)
(5,633
)
Accumulated deficit
(140,747
)
(122,719
)
Total shareholders' equity
294,896
306,765
Total liabilities and shareholders’ equity
$
425,942
$
432,447
Exhibit 4 GTY Technology Holdings Inc.
Condensed Statement of Cash Flows (in thousands)
(unaudited)
Three Months Ended
Three Months Ended
March 31, 2021
March 31, 2020
Cash flows from operating activities: Net loss
$
(18,028
)
$
(17,355
)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: Depreciation of property and equipment
253
54
Amortization of intangible assets
3,599
3,673
Amortization of right of use assets
279
431
Share-based compensation
1,823
3,295
Deferred income tax benefit
(170
)
(2,521
)
Loss on issuance/repuchase of shares
5,333
2,056
Change in fair value of warrant liability
4,038
1,563
Change in fair value of contingent consideration
1,114
29
Amortization of deferred debt issuance costs
172
66
Other
(80
)
69
Changes in operating assets and liabilities: Accounts receivable
(789
)
522
Prepaid expenses and other assets
(1,536
)
(1,122
)
Accounts payable and accrued liabilities
(813
)
(546
)
Deferred revenue and other liabilities
1,747
(42
)
Operating lease liabilities
(348
)
(441
)
Net cash (used in) provided by operating activities
(3,406
)
(10,269
)
Cash flows from investing activities: Capital
expenditures
(31
)
(1,111
)
Net cash (used in) provided by operating activities
(31
)
(1,111
)
Cash flows from financing activities: Proceeds from
borrowings, net of issuance costs
-
11,476
Contingent consideration payments
(28
)
(27
)
Common stock repurchases
(8,043
)
-
Proceeds from issuance of common stock, net of costs
6,790
-
Other
(137
)
(132
)
Net cash provided by (used in) financing activities
(1,418
)
11,317
Effect of foreign currency on cash
(9
)
(195
)
Net change in cash and cash equivalents
(4,864
)
(258
)
Cash and cash equivalents, beginning of period
22,800
8,374
Cash and cash equivalents, end of period
17,936
8,116
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210513005947/en/
Company: Investor Relations Marc Griffin
ir@gtytechnology.com (702) 945-2898
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