Hello, 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. 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 Bret Dixon, President of our Justice Group, and Bruce Graham, Senior Strategy Advisor. Bret is the Tyler executive leading the transition and integration of NIC as a part of Tyler, and Bruce is working closely with Bret and the NIC leadership team on strategic planning. First, I'd like for Brian to give the Safe Harbor Statement and update our annual guidance. 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.com/investor-relations 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 Securities 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 21st, 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-$315 million, which includes approximately $21 million of COVID-related revenues from TourHealth 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-$480 million, which includes approximately $57 million of revenues from COVID-related initiatives. We expect the 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. 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. Thanks, Brian. As we discussed on our first quarter earnings call, both Tyler and NIC had first quarter results that exceeded our plans. Market activity, while not back to pre-pandemic levels, continues to improve from the levels we saw in the second half of 2020. We're very pleased with our competitive position and win rates, which continue to benefit from the elevated investments in product development and acquisitions in recent years. The midpoint of our guidance implies total non-GAAP revenue growth of 36.5%, with implied organic revenue growth of approximately 8.5%. In addition to NIC and the two smaller acquisitions we completed in March, we announced last week that we have agreed to acquire VendEngine, a privately held cloud-based software provider focused on financial technology for the corrections market, for $84 million in cash. VendEngine provides essential tools and services for incarcerated individuals and their families, such as trust accounting and digital messaging and video visitation services. Their modular-based comprehensive suite of application plugs into most facility management systems. The transaction provides significant opportunities for continued innovation and expansion of offerings in Tyler's correction suite. VendEngine has about $20 million of ARR and is growing approximately 30%. We expect the acquisition to close in the third quarter, subject to satisfaction of certain closing conditions. We'd like to take a deeper dive into the NIC acquisition. Since closing the acquisition on April 21st, leadership teams from Tyler and NIC have been working together closely on integration matters, as well as identifying and prioritizing a myriad of strategic opportunities. NIC already had an impressive team focused on strategic initiatives, and that team is working with counterparts at Tyler on joint growth and strategic initiatives. Our areas of focus include product alignment, sales channel activation, white space analysis, and vision and brand. I can wholeheartedly say that we continue to be more and more impressed with the strength and depth of NIC's leadership and staff, now led by Elizabeth Proudfit, a 21-year veteran of NIC who was appointed president of our NIC division last month. As we learn more about each business's products, services, and clients, we become even more enthusiastic about the opportunities ahead for the combined organization. One of our challenges is prioritizing which opportunities to focus on first. We've already identified a number of cross-sell opportunities that are actively being pursued. Bruce Graham, our senior strategy advisor, is working closely with Bret Dixon as the Tyler executive is leading the NIC strategy, transition, and integration efforts. Bruce and Bret played similar roles in leading the very successful transition and integration of New World Systems into Tyler Technologies as our public safety division, and their experience with that effort is serving us well in the NIC Inc. acquisition. I've asked Bruce to review with you our vision for realizing the value of the combination of NIC Inc. and Tyler Technologies, and how NIC Inc. further positions Tyler Technologies to deliver on our vision. We'll refer to the deck posted on our investor relations website under presentations for this part of the call. Bruce? Okay. Thank you, Lynn. Hopefully, you've got the deck in front of you. I'm going to be referring to it as we go throughout this presentation. As Lynn said, we are truly excited about the combination of the two companies. I want to set it in context there on slide 2, though this acquisition is really a part of a series of moves we've made over the last several years. You all know that we've been building the leader in off-the-shelf local government systems for 20 years. We launched our Connected Communities vision with you in 2017 at the 2017 investor conference. From that time, we had an opportunity to move into data and analytics, which we believed was key. We did that acquisition with Socrata in 2018. The next slide then is with MicroPact, brought a presence with state and federal markets and a low-code platform that we'll speak about here in a moment. Then we feel like NIC is truly a key component of making this entire vision of Connected Communities a reality. They are a proven partner with state agencies, a leader in public sector payments, and then have a unique contract structure with state agencies that we think is going to serve this entire approach very well. That's what we're going to focus on throughout our discussion today. The slide number 4 speaks to our first priorities that were given to us by Lynn and the leadership team. The first thing was, don't screw it up. This is not a broken business. There are very clear marching orders here that this is not something that we needed to come in and change the way that NIC does their business. Very successful team. As Lynn said, a proven management team that we've really enjoyed working with. We want them to make the plan that they had committed to when we made the acquisition, and I can say that they're doing that, in fact, exceeding the numbers that we'd originally expected. Finally, just very practically, getting our sales teams to work together. We believe we have the best sales team in local government by far in the industry, and working with the state general managers of NIC was job one. You'll see the fruit of that as we talk through the discussion today. On slide 5, though, when we put it together and think about the combination of the two companies, and as Lynn said, the strategic moves that this allows us to make and also begins to enable for our clients, we group them in these five areas. We will say with confidence that this creates the industry leader for public sector payment, and I'll show you why here in a moment. It allows us to begin to deliver Tyler solutions through the NIC contracts. It combines the strengths of both MicroPact and the acquisition that we made there with NIC in a very unique way that we believe solves some of the challenges NIC has and gives them some of the opportunities in the future. It extends what we wanted to do with Socrata and how we now have an end-to-end statewide enterprise and data and analytics platform. Then finally, what you'll see is it's going to give us an opportunity to work across all levels of government and let citizens have a single point of contact that can be resolved through our systems there. Starting with the first one on number 6, talking through the industry leader for public sector payments. Some of you have asked us on 7. They said, "What is it exactly that they bring here? You all were already doing payments." We don't really understand the difference here. This can be a pretty complicated market to understand, and so we wanted to simplify this in a way that would be easy for everybody to get what we believe the strengths of the two companies were. Tyler's strength has historically been the payment portals, and that's because these are the systems that tie directly to the transaction systems of state or local government. Your utility billing system or a court payment that you have, that allows us to have deep integration into those systems and do things like account management. You can turn on and off your services. You can do all those kinds of things at the payment portal level, and that's been very much what our strength is in this market. Both NIC and Tyler were strong in payment capture, and that's simply the part of the transaction where you're entering in your credit card and those kinds of things. What NIC had that we didn't have were things like Apple Pay and Google Pay, and they've already built that out. The real power, though, of NIC here is the backend processing, so the payment platform and the disbursements side of the business. This allows Tyler now to eliminate the need for Chase, for Elavon, for OpenEdge, for a whole series of third-party providers on the backend, those that would set up merchant accounts and the disbursement providers. This allows us then to retain more of the transaction fees that are being charged here or the credit card fees. This particular combination, our very unique presence at payment portals, given the number of installations we have countrywide, with the strength and the robustness of NIC did over $20 billion in payments last year across their platform. It works at state levels at the very large enterprise. We think we can say with confidence now, this creates the market leader for public sector payments. Just to give you a sense on 8, how this actually begins to play out in what our projections will be. What you see there on the far left was what we expect to do this year with Tyler's payment revenue. This is pre-acquisition. This is what we expected to do. In 2025, we had made internal forecasts that we thought that business would grow well to $68 million pre-acquisition. Because of the combination of us with NIC, we actually believe that business will be $116 million. This is just Tyler's revenue, not including NIC's revenue. We're trying to give you a sense of what it has been in the past. That comes through a combination of, one, we're able to accelerate the revenue. We're able to do more portal revenue sooner. We're able to get more of non-Tyler transactions. That's what we're calling enterprise in this case. As it says there, the rev share with NIC, this is our ability to maintain and capture more of that revenue that we don't have to share now with some of the third-party providers. That's just the Tyler side. When looking at that, if you go to slide 9, we wanted to take that down just to one real opportunity. Many of you know NIC was awarded the State of Florida contract in late 2020. This is their ability to be the enterprise payment contract provider for the entire state. Part of that agreement had 94 localities and agencies that were already using the credit card processing of the incumbent. NIC had the right then to be able to go in and one by one, move those over to their new backend payment platform. What you see in the upside beyond that here is we went and did a poll of our implementations in the state, which is an additional 400 agencies and jurisdictions across the state. There was only a 5% overlap between the 94 that were on the contract and the 400 that now make up the rest of Tyler's opportunity there. What we'll do is our strength is working with our local governments to begin to move them to this payment platform. Now they'll be getting the benefits of everything that we showed earlier, and that'll be something that gives us the additional upside here in the state of Florida. This pattern should continue. This is exactly why we were so excited, and we've tried to give you a sense of why we think this is a unique platform and a unique opportunity, but this is a pretty good snapshot, I think. Slide 10. The next area that is also particularly compelling is around moving Tyler solutions through the NIC contracts. On slide 11, many of you are familiar with the NIC approach to state enterprise master contracts. This is a very unique approach in state government. Really, I would say this is the crown jewel of NIC, this ability to have an enterprise master contract that allows, in each one of these states, they have a general manager, they have a development team, they have a support organization that's there, that's meeting the needs of the state agencies located there. There's a broad ability to move solutions through these agreements. This is not only custom solutions, but it can be off-the-shelf solutions. It's almost anything associated with digital government is allowed to be procured through these kinds of arrangements. What you see on 12 is actually from the investor deck of NIC pre-acquisition. This was the approach that they had. They said, "Look, we're going to continue to grow same state existing contracts. We're going to begin, though, to do development from our existing contracts." Then we're also going to do acquisitions. Things like RxGov and Recreation.gov were solutions that they had procured or developed and began to move through their state contracts. This is what it was pre-acquisition. They really didn't have a lot that were off-the-shelf kinds of solutions that were configurable. On 13 is what you see post-acquisition. This is a very simplified version of what's actually available. Now Tyler Solutions, proven off the shelf, our products that we've been building and developing for 20+ years are able to be sold through this agreement to the CIOs and the agencies that make up the state. As we looked at this, I couldn't make the chart big enough. We've got over 50 products that we believe now will be available to the state agencies. Many of those products are suites of products. It's actually quite a bit more than that. That's things from things like courts or e-citations to tax and appraisal systems or permitting and licensing, kind of a broad spectrum of solutions that we've built over the years that now we'll be able to move through these agreements. A big part of what we've been doing recently is beginning to connect up the state general managers who have these very long-standing relationships with the state agencies and our product teams. Just recently, we had our first showcase. This is turning into a weekly event now. The showcase where what we'll do is each week we showcase three of our solutions. In that, we give a simple description of why do people buy it, what is the opportunity, typically deal sizes, who are our competitors, and then a demonstration and open that up for the general managers. All we're trying to do here is shortcut the time. That, for example, this week we showed Tyler Supervision and the state general managers, lots of states are focused on bail bond reform or pretrial release. They're doing that at a statewide level. Well, Tyler Supervision is already installed in two states, doing exactly that. Now we're able to shorten the time, begin to build those connections, and begin to develop opportunities together. That's what you see on 14 is these are just three snapshots, and we've got over 20 of these that are currently being developed between our sales teams and the state general managers. The one at the top, the Western region state, was an area where we had already been calling on the U.S. Department of Education in this state. NIC had already provided services to that same U.S. Department of Education. Now what we're able to do is potentially shorten the entire time here, buy through the state contract and begin to provide Traversa, which is our student transportation solution. In the second example, EnerGov is on the path to a sole source, but what we're combining there is NIC's payment. We can streamline that entire solution and make it run on NIC's payment. The third is actually a state where Odyssey is installed. It's the court case management system. The state has recently, the CIO came to us and said, "We'd like to move to a prosecutor system from Tyler and also then an RMS system from New World Public Safety," Tyler's public safety division. All of that purchased through NIC and through the state general managers. We could go on and on here. We just wanted to give you a snapshot. These are deals in flight, so your mileage may vary, but we expect that these will be opportunities that we will begin to close. None of this, by the way, is in the projections that we shared with you so far. These are all upside to that. Lynn will tell you later, don't believe everything you hear, but I can tell you these are things that we are building pipeline for the future. If not this year that they'll close, they're certainly beginning to build pipe as we look out into the future. The third area on slide 15 is around MicroPact and NIC. This may have not been evident to you, but we were very excited about this combination and was one of the key reasons that we made the acquisition of NIC. That's because on slide 16, what MicroPact has is a very unique part of that acquisition for us was a product they have called entellitrak, which is a leading low-code, no-code kind of environment that is used by what you see some of the leading systems integrators on the right. MicroPact's path to market in state and federal is primarily through partners here. What they've done is really all of these are providing solutions, many of them similar to what NIC's teams have built, but they do it on top of a low-code platform. That allows them to have reuse, that allows them to begin to build solutions that are repeatable and configurable. For us, that made a ton of sense as we thought about the state general managers and the nature of the kinds of development that was being done by NIC with these state master contracts. That's what you see on 17. NIC has built over 19,000, they call them services, but they're basically applications that are meeting the needs of state agencies across the 28 states. These have been built off different platforms, maybe custom. What you'll see us doing now is moving the NIC state GMs and that staff to entellitrak through the partner alliance program that exists today. This is something MicroPact already has in place, and they're very good at educating and moving teams and training them and having them begin to use it. What we'll do, NIC has a low-code environment called App Engine that's really more like form development. We think that combined with entellitrak provides a super environment for this kind of development. The other neat benefit here is over the last, since the acquisition of MicroPact, entellitrak has been built, and some of you may have heard of this in the past with us, it's called Tyler Forge. What it is, part of our Connected Communities vision was that applications from Tyler would look like they were part of a family. They would use common foundational components. They got a common look and feel. All of that is out of the box now with entellitrak. As NIC are building applications, those will adhere to Tyler development standards. They'll take advantage of this foundation, and that'll make them use it and work very interoperably with the other solutions that are coming from Tyler through the Tyler solutions that I mentioned earlier. We're excited about that in its own right, and one of the key things that excites us about MicroPact with NIC. The other thing on 18 is MicroPact had been building and selling solutions to states, and built these. These are five key solutions that were proven in the market. There's some overlap. Cannabis regulation and licensing are also solutions that NIC had. We're working through whether we'll go to one platform or one solution there or leave it at multiple like we do in some other markets. At this point, these are all proven solutions that are already being sold now through the state general managers. That's what you see on 19, is the set of opportunities that are beginning to be moved through those. These are opportunities where the MicroPact team is working with the NIC state GMs, just as we described earlier, and beginning to jointly develop these opportunities. The western state there is one that most recently the two teams got together, they were both competing in that, and they went to one solution, where it's actually in this case being built on top of MicroPact's cannabis solution, but it'll depend on which market they go for. You'll see this continue forward and we're excited about what that builds for us. The fourth area is around establishing the data and analytics platform for Connected Communities. I wanted to take a second here and just do a briefing, a little bit of what we've done with Socrata since the acquisition in 2018. The initial work that we had done, Socrata was the leading and really the pioneer in open government and the idea of transparent government. What we wanted to do though, we thought we have these systems of record that are rich with data, and we saw a market opportunity to note both with the data and with the insights that came from that data. What we've been focused on the last three years is building turnkey, vertical specific, what we call insight solutions in things like tax and appraisal, in courts, in public safety, key areas that tend to be areas we have deep domain expertise that our clients wanted off-the-shelf dashboards and a platform that would be there. What we see now is with NIC is the ability to extend that idea all the way to the state and begin to do that across all the major agencies that make up a governor's cabinet, make up the state agencies that are being served today. I know this is a big idea, but I want to show you how real it is and even the opportunities we're beginning to realize today. If you go to 22, just to give you a snapshot of how this works. This is working in a justice example. Every state that we sell to is a combination of district and county and appellate courts and sheriff's offices and city police, you name it. There's all kinds of data that is basically in a series of silos. Millions of cases go through these systems every year. They flow through them, and they're disjointed. There's no standard norm for data. Consequently, making any kinds of decisions here can be very difficult. What Socrata does first on 23 is actually begin to automate the pull from those systems of record. Most of the reporting that's done today in most states is done through manual reporting still, where they report up even the most basic kinds of data. Well, now what you do is we actually pull that data automatically because we own the back-end transaction data in so many of the cases. Socrata, because it is an open platform, can tie into other systems of record that are non-Tyler. We pull that together, it aggregates the data, it begins to move it towards some kind of a uniform data standard so that the client begins to have one source of truth that everybody can rely on, both at the local level and at the state level. They call this liquid data within Socrata. If you go to 24, what we're able to do then, because we have so much domain expertise in each one of these areas, is we build turnkey solutions, turnkey dashboards. The clients don't have to figure this all out. We're able to do it because we've, like in the courts example, we have over 30 years of experience with courts. They get the standard reporting that has traditionally been a part of any of these kinds of agencies that, you name it, in anything that we serve, there's some state agency that's demanding localities to pull up reports, and what we give is these dashboards and insights. This saves literally tens of thousands of hours of manual reporting that's done by local jurisdictions. Our clients, I mean, the local clients are the most excited about this. The state agencies are excited because now instead of working off stale data that's very difficult for them to correlate, they can begin to do it in near real time. Just to show you how this actually plays out then, in a recent opportunity and one that's now being worked. This is a Midwestern state. This does exactly what I just described to you, where it pulls from the local jurisdictions. It's pulling from 100 different circuit courts, 63 probation offices and sheriff's offices. It's an insight solutions for courts. There's been so much focus across the country on things like criminal justice reform. This tool begins to make The people that need to make decisions, they're able to do that using real data and actually having it be something that can give them real insight. Then finally, what you see at the bottom line is we can begin to deliver these kinds of contracts or these kinds of solutions through the NIC contracts and the state GMs. This is a first of what you'll see. We have built these insights. We're extending them now to the state agencies. This is one of the areas the state general managers of NIC are the most excited about because this is truly value add at every level across the state. The last area that we wanted to talk about is engaging citizens across all government agencies. I would say this is one that I'm going to keep it pretty light here, but you're going to see more to come in the coming years. If you go to 27, all of you on the call have this experience. If you're interacting with government, which I'm sure you don't look forward to, you've got to do that across multiple locations. You've got a portal or a handheld for your local government, maybe something like that for state and federal. That's pretty frustrating because you don't know where to go. You don't know how to make it all work or how to work through all that. What you see on 28 is we've got a platform called Gov2Go now as part of NIC that is very powerful at the state level. We purchased MyCivic a couple of years ago within Tyler. It's a very strong, sexy application for localities. We're going to move this to one platform, and with that, we'll be able to cross across all three of those lines, the local jurisdiction, the state, and the federal. What you see on 29 are some of the features that will be available through this single platform. We had over three pages of this. This is a short version there. The product team wanted to give us more, the slide got overwhelming. What you can see, we can do stuff as simple as local information, or if you're a citizen, you want to report incidents or repairs that need to be made. It can be public safety. As you go into the state level, now we'll be able to do things like driver's license renewals and property tax. Even at the federal level, outdoor recreation, you name it, through that solution. The last piece of this that we're excited about is our ability to resolve those transactions, both Tyler and non-Tyler transactions, through a single payment platform. This will be the first time that really all of that can begin to be monetized in a way that up to this point has not existed. When you look at the presence that both Gov2Go and MyCivic has, we try to be exact on this, but I think you can be safe saying it's 100% of the U.S. population is touched by one of our systems, connects into one of our systems, has a reason to use our application here in the handheld. You'll see us roll this out and begin to roll out this common payment platform and service platform in the coming years. On 31, just to wrap it up, we believe this creates the leading payment provider in the public sector. We now have a unique opportunity to provide our solutions through these state contracts. The NIC taking advantage of the entellitrak platform begins to help them improve their margins and begin to help speed their solutions that they serve their state agencies with. The extension of Connected Communities now beginning to go all the way to the state to connect the entire community in each one of these areas. Finally providing citizens a one-stop shop to be able to have all their relationships managed through a common payment platform. That's why we're so excited about it. There'll be a lot more to come in the coming months and years. We're building out each one of these lanes. As Lynn said, there's more that we could share, but we were limited on time. With that, I'll turn it back over to Mr. Moore. Thanks, Bruce. Clearly, we're excited to have given you guys a deeper look into our vision for this combination. I think as Bruce mentioned earlier, part of my job is there's a lot of excitement across the teams. You saw from some of the slides we already have some really client interest. From the deck, we believe this transaction is going to create a lot of opportunities and really opportunities that we think are really unique to Tyler. As Bruce mentioned, we've already hit the ground running. We're doing things like showcasing our products. As exciting as all this is, I do want to remind everybody that this stuff takes time. It's not going to happen overnight. Realizing the full benefits of this acquisition is going to be a function of some near term, but it's going to be years. Part of that's a function of our market, but part of it's a function of our experience with this stuff. I think what makes me really excited about this combination and gives me the confidence to share with you this vision today is that at Tyler, we've got a pretty good track record. We've got a pretty good track record of executing on these types of strategic acquisitions and initiatives, even as we know they take time. With that, I'm going to go back to the first two of our priorities, which was, one, we're not going to mess up the business, and two, we need to make the 2021 plan. Even as we've got all these other things going on in the background, we're going to continue to stay disciplined and focus and just start to execute on these strategic initiatives. We certainly look forward to reporting our progress and successes on those in the coming quarters. With that, I'd like to open up the line for Q&A. We will now begin the question and answer session. To enter a question into the question queue, please press star one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your request, press the star key, then the number two. Please limit yourself to one question and one follow-up, then place yourself back into the queue for additional questions. We will pause momentarily to assemble our roster. The first question comes from Peter Heckmann with D.A. Davidson. Please go ahead. Hey, good morning. Thanks for taking my questions. Just curious, in terms of how we think about this 2021 guidance, what level of corporate overhead removal and cost synergies are included? The combined company R&D came in a little bit lower than expected. How would we size that? Is that maybe $15 million, $20 million here in the first three quarters? No, Peter, actually the costs that we've eliminated were mostly just duplicate direct public company costs, and it's on the order of $3 million-$4 million. We believe there are additional opportunities for margin expansion and a cost elimination standpoint that we've been, I believe, very conservative in terms of what's in this first-year number. Okay. That's great. Just thinking about some of the examples that Bruce Graham had given, things that we hadn't really contemplated in that much detail just yet, and probably more cross-selling opportunities than we had originally thought. I know you're not giving guidance further out, but kind of aspirationally, do you think that the combined Tyler Technologies, once NIC Inc. falls into the organic calculation, can grow low teens organically? Well, Peter, obviously that's a good question. We think the opportunities are significant. At the same time, we still have a fairly large, significant part of our business that's recurring, that's only growing at certain rates. When you look at the new business opportunities, and we're also still dealing with a little bit slower market right now. We mentioned earlier in our remarks that I don't think we're back to pre-pandemic levels. The excitement's there, the demos are there, the RFPs are coming back. I don't know that I would necessarily expect mid-teens growth for an organization the size of $1.6 billion. But the opportunities are there, and as I mentioned earlier, those opportunities are unique to Tyler from what we've done the last 20 years and all the various acquisitions. A lot of excitement there. All right. That's great. I'll get back in the queue. The next question comes from Matt VanVliet with BTIG. Please go ahead. Yeah, thanks, guys. Very helpful and appreciate all the information this morning. I guess looking at it from the sales opportunity perspective, and getting the teams aligned. I guess over the next couple of months versus maybe the last couple of months of the year, how much of the activity that you're having is sort of building on what was already in the pipeline for each organization and just kind of bringing in the cross-sell opportunities versus really highlighting and pushing forward on those joint sales efforts near term, and using those as sort of top priority? Just curious more broadly, how much you're pushing those joint sales immediately versus that being a longer-term trend? Well, I think it's a little bit of both, Matt. We're currently identifying these joint opportunities. Some of the opportunities that Bruce mentioned were things that we would have liked to have pursued, but not having a relationship at the higher level with the state agency, and being able to leverage those. We talked after the Q1 call about how we've taken a fairly conservative approach since we announced the acquisition in February through closing, and we weren't really able to do some of the stuff that we've been doing the last six weeks. As I said, we've hit the ground running. The sales teams are meeting. We're showcasing. One of the priorities is identifying these joint opportunities, just like we're identifying white space opportunities. A lot of that's going on, but I'd say it's a mix of both. Then sort of touched on the previous question about synergies. Have you been able to sort of eliminate or reduce the number of potential hires that you maybe had in the plan for both sides of the organization by combining the teams here? Is that an area that is sort of an implied synergy, even if it's not removing the cost today, it's just eliminating the need to add that cost over the course of the year? I don't know that we've necessarily done any of that just yet. We each have our plans. We're still in the early strategic formulation. Part of our goal really is just, as we talk about prioritizing these initiatives, looking at what we're going to do in sales, is we're trying to get ourselves set up for as we get into the fall budget cycle so that we're really able to then think about how we're going to fund those initiatives, including new hires. I think right now, as it relates to each company or one company now, their pre-acquisition plans and ours, I don't think those have really changed at this point. All right, great. Thank you. The next question comes from Joshua Reilly with Needham. Please go ahead. Hey, guys. Thanks for taking my questions today. The assumptions for NIC in 2021, excluding the pandemic-related revenues, imply 11% growth. Is that primarily from transaction growth returning to the model or large new deals like the Florida deal coming online later in the year? I think you're correct that 11% is the implied core growth excluding the COVID initiatives, and it is a combination of primarily increased volumes and adoption. As you can imagine, as we've gone through the pandemic, more citizens are interacting digitally with governments, and their traditional expansion of applications within their existing state contracts. In terms of new large contracts, there's not really much in there. The Florida payments business is expected to start to ramp up really late in the year, towards the fourth quarter. There's some contribution there, but most of that is around the existing business growth in volumes and activity. Okay, great. Then how should we think about the breakdown of the $310 million-$315 million in FY 2021 GAAP revenues for NIC between license maintenance, subscription, and professional services? Don't have that breakdown to provide at this time, but it would be similar to their historic breakdowns. Most of it is in the recurring revenue side. It'll fall on our subscription line. Their revenues are about 90%-95% or 98% subscription or recurring. Licenses and services make up a much smaller piece of their business. Don't have that complete breakdown at this point, but it would be similar to their past historical numbers. Okay, great, guys. Thank you. The next question comes from Jonathan Ho with William Blair & Company. Please go ahead. Hi, good morning. Thank you for the additional color. Just maybe looking at the NIC blanket purchase contracts, are you able to bypass the traditional RFP processes for all of your Tyler products using the BPAs? Maybe secondly, with a broader product portfolio, do you also have the opportunity to expand the size of those contracts over time as well? The answer on the first one is it kind of depends. Most of the time they can work. This is Bruce, by the way. They can sell those solutions through those existing contracts. In some cases, though, they'll directly take it outside of that. The value, honestly, is as much from the partnerships that they've had over time with these state agencies that we simply just didn't have in those markets. They do have the ability to expand those contracts over time, very much like what you see with the Florida agreement. That's very common. They'll have a payments processing solution and then the ability to go after localities. What they haven't had is the strength that we have. Their ability to go after the local market and sign up jurisdictions and agencies on a statewide agreement is very difficult. For us, that's the market that we've been serving for all these years. Does that answer your question? It does. Maybe as a follow-up, I know this is a little bit more of a high-level view, but if you were able to cross-sell your entire portfolio into NIC and vice versa, is there a way to maybe size how large that opportunity could be, just recognizing that it would take time to reach that goal? Thank you. There's certainly not a way to do that right now. Over time, we'll be able to build up the TAM in a more detailed manner. As you said, that would be over a very long period of time. We certainly believe the opportunities are significant in the near term, but as far as aggregating everyone, we'll save that for a little bit later date. Thank you. The next question comes from Keith Housum with Northcoast Research. Please go ahead. Good morning, guys. I appreciate you guys putting this together. I think it provides a lot of clarity to a lot of us. In terms of the five different areas that, Bruce, that you highlighted in terms of your slide deck and the opportunities, I guess is there one or two that you think will be easier and quicker for Tyler to recognize versus the others? Yeah, I would say the payments team is off and running, that's actually the solutions are relatively easy to integrate. They're very complementary, as I tried to show in the slides there. That team is off and running, I think that's fair, Bret. I think the second would be what we mentioned with the delivering of the solutions, of Tyler solutions. It's been a combination of state CIOs, state agency heads, the actual clients of NIC contacting them and saying, "I've been on Tyler's website. They have a solution that does the following that we need. Hey, we'd like to look at XYZ." I think you'll see that pace pick up quite a bit more quickly as well. The first one is without question the payments. That's the area that's going to be the fastest. Okay. And then if I just think about, I guess the question Peter asked earlier, and I'm going to try to pin you down to an exact percentage point of organic growth, but is there a feeling within Tyler that the acquisition of NIC can add one, two, 3% of organic growth to Tyler's original organic growth for the next several years? Is that a good context or a good scope to be looking at, or is it less or more of that? No, I think that's fair generally. As we look through this slide we just talked about, all these are all incremental opportunities. I think that's fair to think of it that way. We certainly haven't sat down and mapped out multi-year plans for the two companies. We're still getting our arms around each other and getting to know each other, and trying to just, as I said earlier, get off the ground running. I think you'll see over time, and probably as we go into next year's budget season, next year's guidance, you'll start to see some of that, and we'll have a little bit more better sense for multi-year growth between the two companies. All right. Thanks, guys. Appreciate it. The next question comes from Brent Bracelin with Piper Sandler. Please go ahead. Thank you. Two questions for me if I could. One on the Tyler payment side, certainly clear the opportunity looking out to 2025 to expand that meaningfully to north of $110 million. My question for you is really as you migrate off your current payment processing partners, what's the impact to gross margin? Is there also a material lift to gross margins as well on the Tyler payment side? One quick follow-up on the NIC MicroPact opportunity. As Bruce said, moving to the NIC platform, we do expect to have a positive impact on our payments margins, because we'll be able to keep more of the revenues. There's a difference sometimes in how those contracts are structured, where we fall in the payment chain, whether we report net revenues, which is typically what Tyler does, which is we just report recorded revenues, the part we keep, which is almost all margin. Many of the NIC contracts, because of where they sit in as the payment processor are gross. The margin is lower, but the actual amount that we keep is higher. It should have a positive impact. We don't really have the ability to quantify that right now, but over time, we do expect it'll drive the Tyler payment margin higher. I think the follow-up to that too, Brian, is the fact that getting the experience and the rich and the robust platform that NIC has, that's an area that Tyler, had we not done the NIC acquisition, would've had to be doing some investment in over the next couple of years to realize the full potential in payments. The R&D savings going forward is actually significant and allows us to focus more on shorter-term, near-term growth strategies that drive revenues as opposed to simply doing a lot of R&D building out the back end payment part. Great. I'm just less familiar on the MicroPact low-code app services opportunity. Could you remind us what was MicroPact's state exposure? As you think about the 19,000 low-code app services they've created so far, what's the opportunity? Are we talking 100,000 app services opportunity to go after? Is it a million app services opportunity that on a combined basis you go after? Any color there on what was the MicroPact state exposure before, and then I'll just frame the opportunity there would be helpful. Thanks. I want to be careful with this because I think maybe the slide was confusing to you. The 19,000 services or applications that are built was done by NIC pre-acq. That's over the last 20 years they've been building these, and many of those are transaction-based. Some of those are done for free because it's part of their master agreements that they have. MicroPact has been working with those systems integrators that are on that one slide, and they build and deliver solutions separate and apart from that. What we're saying is we expect some of those existing NIC, some of the 19,000 will start to move over to entellitrak. Others will be just the net new applications that they build. They'll be doing that. NIC's teams will be doing that on top of the entellitrak platform. Does that clarify it? MicroPact's business today is about half federal and about half state, something less than $100 million in revenues. As you think about the benefit of migrating off of some of those 19,000 NIC app services to MicroPact, is there like a cost benefit? Is there a margin opportunity? Is it a revenue opportunity? What are you really highlighting there? Is it additional revenue opportunities or really some cost-saving opportunities that you plan to extract out of that relationship? It's on that one slide. It's on 17. It's down there at the bottom. We really do think it's a margin opportunity for the NIC teams because as part of their agreements, they have to provide these applications for all agencies that are there. The second, though, is their ability to get reuse on that. Across the 28 teams, if they built an application, this is what they did with licensing Where they built an application for licensing, and then now they cross-sell it to other states. We expect the same thing to happen here. There'll be niche solutions they build for the agencies, but now it'll be something that all of them are using, a library of components across these 28 different master contracts. Ultimately, that'll let them go faster on the time to market. It's a major shift in a positive way, solves a big problem or a big challenge that NIC had, and this was something that they are particularly excited about. Makes sense. Thank you so much. As a reminder, if you have a question, press star then one to be joined into the queue. The next question comes from Rob Oliver with Baird. Please go ahead. Great. Thanks for taking my question, you guys. There's been a lot of good questions already, Bruce, one for you, and then I had another just quick follow-up high-level question for Lynn. Bruce, appreciate all the detail. When you look at the MicroPact-NIC partnership opportunity, obviously a lot of opportunity to get pilot products up to the state level. Verticals are a key part of MicroPact, and vertical markets in general are pretty hot right now. I'm just wondering about MicroPact's architecture. You guys have really good presence in veterans and some of the things you laid out in the slide deck. Are you able to be nimble there, or do you have to acquire to get into other verticals that might pop up? For example, five years ago, cannabis wouldn't have been on there. How do you think about that? Obviously there may be a payments opportunity that would come with that. Just how is the architecture and how nimble can you be, or will you need to acquire? I think one of the things we are doing, while we've got, as I said, over 50 solutions that are able to be sold through those contracts, there's still white space that we would expect. There'll be agencies that we don't serve. One of the things, as you all know, we're pretty good at acquiring, and we're able to do that. What we wanted to do was actually begin to do that same kind of a method that we've applied to our markets and do that now at the state market. NIC, working with the same teams that built that method for us, are underway with doing that. I think we'll either build in the way that we just described through harvesting a particular state, and the team that built that will either develop that fully, or I think you'll see us be active as it makes sense and we find the right kind of partners to acquire in that space. Does that answer your question? It does, yep. Thanks, Bruce. I appreciate that. Lynn, just one for you, a bit higher level. Obviously, NIC has some revenue that's rolling off from the impact of COVID, but I'm less interested in that and more interested in this acquisition comes at a really interesting time for budgets for state and local. Just stepping back, when you look at, I think there's been steady improvement here, but did you guys just avail yourself of a much wider swath of, let's say, American Rescue Plan dollars or stimulus and recovery dollars in aggregate as we look at how those dollars I think they need to be spent over the next four or five years? Did you guys just get yourself exposed to just bigger chunk of change there? Thanks. Yeah, I think that's a fair comment. We've had a lot of questions around the stimulus money. You're right. There's been a lot that's been earmarked. The latest one, there's $350 billion that's direct for state and local, I think almost $200 billion for states. I think that's there. There's been some specific things around K-12. You're right. State and local governments are on the timeline to spend some of that stuff. I think what's important too about the stimulus funding is it's really providing our clients a lot of confidence. Last year when the pandemic hit, you got to think about the timing as well. A year ago, nobody knew what was coming on. Everybody was going into their budget, their fiscal seasons. As it turns out, the state budgets were not hit as hard as everybody expected, and same thing locally. I think state budgets in all were only off about 2%. Now you're going into a new budget season. We're starting to see the confidence of, one, the impact of the pandemic was not as bad on budgets, and then two, the feds coming in and providing all this money. Yeah, the money's there. We know where it's earmarked, and now it's a question of agencies and figuring out how to use it and how to fight for it against other agencies. Yeah, it should open up more funding generally for our services. Great. Thanks again, guys, for all the detail. Appreciate it. At this time, there appear to be no more questions. Lynn Moore, I'll turn the call back over to you for any closing remarks. Great. Thanks, Tom, and thanks everybody for joining us today. Also want to really appreciate Bruce and Bret and the teams going through the presentation and all the work that's gone into that. Clearly, we're excited about this opportunity. Again, there'll be more to come. I'm sure there'll be plenty of discussions over the next several quarters and years to come. Again, appreciate everybody's time, and hopefully everybody stays safe and healthy. If you have any further questions, please feel free to contact Brian Miller or myself. Thanks, everyone. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.