CallStreet GTY User Manual

Corrected Transcript

1-877-FACTSET www.callstreet.com

Total Pages: 11

16-Feb-2021

GTY Technology Holdings, Inc.

(GTYH)

Q4 2020 Earnings Call

GTY Technology Holdings, Inc. (GTYH)

Q4 2020 Earnings Call

Corrected Transcript

16-Feb-2021

1-877-FACTSET www.callstreet.com

CORPORATE PARTICIPANTS

John J. Curran

Chief Financial Officer, GTY Technology Holdings, Inc.

TJ Parass

President & Chief Executive Officer, GTY Technology Holdings, Inc.

......................................................................................................................................................................................................................................................

OTHER PARTICIPANTS

Scott Berg

Analyst, Needham & Co. LLC

Jeff Van Rhee

Analyst, Craig-Hallum Capital Group LLC

MANAGEMENT DISCUSSION SECTION

Operator: Ladies and gentlemen, thanks for standing by, and welcome to the GTY Technology Q4 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. [Operator Instructions]

I would now like to hand the conference over to your speaker today, John Curran, CFO. Thank you. Please go ahead.

John J. Curran

Chief Financial Officer, GTY Technology Holdings, Inc.

Thank you and good afternoon, everyone. I'm John Curran, GTY's CFO, and I'd like to welcome you to our fourth quarter and full-year 2020 earnings conference call. With me on today's call is TJ Parass, GTY's CEO. We will be presenting slides on today's call and encourage you to view the presentation found on our website at www.gtytechnology.com. Please note that our earnings release is also available on the GTY website. The release contains additional information about our financial results.

Any forward-looking statements we made in the earnings release or any that we may make during this call are based upon information that we believe to be true as of today. Things often change, however, and actual results may differ materially from those projected or anticipated. Please refer to our cautionary statements in the earnings release under the heading, forward-looking statements.

You should also refer to our SEC filings, including our most recent Form 10-K and our subsequent SEC filings for a list of risk factors applicable to GTY, including risk factors associated with COVID-19. As you will hear in our comments, the pandemic is impacting our business today and for an undetermined time into the future.

GTY Technology Holdings, Inc. (GTYH)

Q4 2020 Earnings Call

Corrected Transcript

16-Feb-2021

1-877-FACTSET www.callstreet.com

During the call, we may refer to non-GAAP financial measures if we believe they are useful to investors or if we believe it will help investors better understand our results or business trends. You can see a reconciliation of our non-GAAP financial measures to their nearest comparable GAAP financial measure in Exhibit 2 of the earnings release.

With that, I'll turn the call over to TJ.

TJ Parass

President & Chief Executive Officer, GTY Technology Holdings, Inc.

Thank you, John. Good afternoon and thank you all for joining us. We are pleased with our execution throughout the year and we ended 2020 on a high note with a solid quarter. Before we dig into this quarter's results, I want to take a moment to remind everyone, GTY's mission is to modernize governments and make them more efficient to best of breed cloud technologies.

The pandemic has highlighted the needs for government to move on to more modern solutions. Our focus is twofold; to improve and modernize the citizen's experience with government front offices of every level, and to bring modern solutions to government employees so they are able to achieve optimal efficiency.

As John will discuss later in this call, our fourth quarter GAAP revenue grew 14% year-over-year to $13.1 million and grew 32% to $48.1 million for the full year. From a non-GAAP perspective, revenue increased 10% to $13.2 million compared to Q4 2019 and grew 20% to $48.8 million for the full year. Most importantly, annual recurring revenue or ARR grew 25% year-over-year to $41.4 million. Finally, we had a very strong year in new customer additions, adding more than 100 new customers in the fourth quarter and over 350 new customers for the year.

GTY provides our industry-leading cloud technologies through six brands that covers the front and back offices of state and local government organizations. Let's start with our two front office solutions, CityBase and OpenCounter. OpenCounter enables any ordinary citizen to decipher the daunting maze of permits needed for projects or improvements and then process those permits online. These permits can be as simple as a tree removal permit, to as complex as helping someone start a new business by walking them through the many permits that will be required.

OpenCounter's momentum demonstrated considerable strength all year and accelerated in Q4 with 5 new customer wins and 11 for all of 2020, a 30% gain in new customers year-over-year. Non-GAAP revenue grew for the year by 23% in a difficult environment. OpenCounter gained a lot of traction with new customers like the city of Omaha, and most recently Miami, Florida.

We're excited to have announced that the city of Miami will be incorporating OpenCounter [ph] to its (00:05:26) eStart initiative. eStart empowers ordinary citizens and entrepreneurs alike to begin the process of opening their own business in the city directly from their mobile device 365 days a year, 24 hours a day. As part of this one-stop solution, eStart allows applicants to check their zoning online and creates transparency around costs by offering accurate, real-time visibility into fee estimates.

OpenCounter's new special event portal continued to gain traction with existing customers, and we are very pleased that Orlando, Cincinnati, and Salt Lake City expanded their engagements to include our special events portal. Even though COVID-19 has impacted all aspects of city operations, forward-looking communities are planning for a return to in-person events and the need to manage these gatherings more efficiently.

GTY Technology Holdings, Inc. (GTYH)

Q4 2020 Earnings Call

Corrected Transcript

16-Feb-2021

1-877-FACTSET www.callstreet.com

Moving on to CityBase, our government and utility payments platform, CityBase solves the often complex process of how you make payments to your local government by harmonizing and automating all segments of the full payment cycle. By replacing static, sprawling websites with a dynamic platform, CityBase makes cities and counties more efficient by increasing on-time revenue collection and speeding up the times of settlement while improving the overall citizen experience.

CityBase reported tremendous fourth quarter and full year, with our sales team signing up more than 23 new state and local governments, including 12 in the fourth quarter alone. One of these new customers was the City of Austin who selected CityBase payment platform to enable residents and visitors the ability to pay bills and municipal fees online and via mobile devices.

Another win was the expansion with the current Questica customer, the City and County of Denver. This customer selected CityBase as its payment partner to modernize and unify points of sale cashiering and online payments for its more than 716,000 residents.

Moving on to eCivis, our grants management solution, eCivis is used to help governments manage and distribute grant funding and help organizations and government entities stay compliant with their use of funds. With the global pandemic, local governments are using eCivis' products to help manage and distribute critical federal finance assistance and COVID funding.

eCivis finished the year with a solid momentum adding 22 new customers in the fourth quarter, bringing the total for the year to 61 new customers, approximately 100% increase over 2019. eCivis showed solid growth in the state government market with the addition of the California Department of Forestry and Fire Protection, Georgia Department of Community Affairs, and expanded service within California Department of Housing and Community Development. These agencies have all teamed with eCivis to run key community and economic development programs and manage the disaster recovery grants.

Moving on to Bonfire, our sourcing platform, Bonfire helps governments overcome the challenges of dealing with and selecting multiple vendors, complex RFP processes, and ensuring compliance. Bonfire had a terrific year, adding 35 new customers in the fourth quarter to bring the annual total to 137 for 2020, an increase of 40%. To name some of these new customers, we signed on Harris County, Barnstable County, and the Toronto Waterfront Revitalization Corporation. Furthermore, Bonfire's premium vendoring offering that was released in 2019 experienced significant growth in 2020, signaling that Bonfire continues to be the – one of the fastest growing platforms for both public procurement [ph] teams (00:09:21) as well as vendors seeking public sector bidding opportunities.

And finally, our budgeting units Questica and Sherpa, who are leading providers of cloud-based budget, performance and transparency solutions for the public sector. Combined, our budgeting units added 41 new customers in the fourth quarter, driving a year-end total of 123 new customers in 2020. [ph] So the (00:09:44) value our budgeting solutions provide, coupled with exceptional customer service resulted in a customer retention rate of over 98%.

The notable customer wins this year highlight the scope for our budgeting solutions which range from the middle market with budgets ranging from $10 million to $250 million, to the enterprise market ranging from budgets of $250 million to [ph] $115 billion (00:10:07), customers like Fort Worth Housing Authority in the City of Abilene, Texas in the middle market and the State of New Mexico in the – The City and County of San Francisco in the enterprise market to name just a few. In addition to the specific wins I mentioned, our mid-market team showed impressive growth this year.

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