Total fourth quarter revenue of $16.6 million,
up 27% year-over-year
Annual recurring revenue of $51.0 million, up
23% 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 fourth quarter and full year
ended December 31, 2021.
“GTY’s fourth-quarter performance was a solid finish to what was
a strong year for the company, highlighted by accelerating revenue
growth of 27%. While the pandemic isn’t quite over, our team has
been executing very well in this environment. The Public Sector
market is improving driven by accelerating digital transformation,
improved budgets, and stimulus money all resulting in increases to
our pipelines. In addition, organizations that have adopted best of
breed cloud technologies like ours are successfully managing
through the transition to hybrid work environments,” said TJ
Parass, CEO of GTY.
“We enter 2022 with significant momentum across our business
units. The digital transformation of the public sector is still in
its early stages, and we believe GTY is in an excellent position to
benefit from the continued shift to the cloud. Our focus this year
will be to continue expanding our sales force, enhance our
go-to-market strategy and convert our substantial pipeline. I want
to thank our team, which remains focused on executing on our
mission and delivering best-in-class service to our public sector
customers.”
Fourth Quarter 2021 Financial Highlights
- Revenue: Total GAAP revenue for the fourth quarter of
2021 was $16.6 million, up 27% compared to $13.1 million in the
fourth quarter of 2020. Total non-GAAP revenue for the fourth
quarter of 2021 was $16.7 million, up 26% compared to $13.2 million
in the fourth quarter of 2020.
- Gross Profit: Gross profit for the fourth quarter of
2021 was $10.1 million, compared to $8.2 million for the fourth
quarter of 2021. Gross margin for the fourth quarter of 2021 was
61%, compared to 62% for the fourth quarter of 2020. Non-GAAP gross
profit for the fourth quarter of 2021 was $10.6 million, compared
to $8.5 million for the fourth quarter of 2021. Non-GAAP gross
margin was 63% for the fourth quarter of 2021, compared to 65% for
the fourth quarter of 2020.
- Operating (Loss): Operating loss for the fourth quarter
of 2021 was $(21.0) million, compared to an operating loss of
$(11.1) million in the fourth quarter of 2020. Our operating loss
for the quarter includes a goodwill impairment charge of $15.8
million. Non-GAAP operating loss for the fourth quarter of 2021 was
$(1.4) million, compared to an operating loss of $(1.1) million in
the fourth quarter of 2020.
- Net (Loss): Net loss for the fourth quarter of 2021 was
$(20.8) million, or $(0.36) per share, based on 57.6 million
weighted average shares outstanding. During the fourth quarter of
2020, net loss was $(13.4) million, or $(0.25) per share, based on
53.9 million weighted average shares outstanding.
Full Year 2021 Financial Highlights
- Revenue: Total GAAP revenue for the full year of 2021
was $60.5 million, up 26% compared to $48.1 million in 2020. Total
non-GAAP revenue for the full year of 2021 was $60.9 million, up
25% compared to $48.8 million in 2020.
- Gross Profit: Gross profit for the full year of 2021 was
$38.1 million, compared to $29.7 million in 2020. Gross margin for
the full year of 2021 was 63%, compared to 62% in 2020. Non-GAAP
gross profit for the full year of 2021 was $40.0 million, compared
to $31.2 million in 2020. Non- GAAP gross margin for the full year
of 2021 was 66%, compared to 64% in 2020.
- Operating (Loss): Operating loss for the full year of
2021 was $(45.5) million, compared to an operating loss of $(42.7)
million in the full year of 2020. Non-GAAP operating loss for the
full year of 2021 was $(4.1) million, compared to an operating loss
of $(11.1) million in the full year of 2020.
- Net (Loss): Net loss for the full year of 2021 was
$(53.8) million, or $(0.94) per share, based on 57.1 million
weighted average shares outstanding, compared to a net loss of
$(41.9) million, or $(0.78) per share based on 53.5 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 over year unless otherwise
provided.
Fourth Quarter 2021 Highlights and Key Metrics
- Average annual recurring revenue, or ARR, per customer
increased 15% to $26,900 compared to December 31, 2020.
- The number of customers was 1,894 as of December 31, 2021, an
increase of 7% from 1,768 as of December 31, 2020.
Additional information regarding our new customers, total
customers and Annual Recurring Revenue and how each is calculated
is included below.
Financial Outlook
As of February 17, 2022, GTY is providing guidance for its first
quarter and full year 2022 as follows:
- First Quarter 2022 Guidance: Total Non-GAAP revenue is
expected to be in the range of $15.0 million to $15.5 million or
approximately 14% year-over-year growth. Non-GAAP loss from
operations is expected to be in the range of $(3.0) to $(3.5)
million.
- Full Year 2022 Guidance: Total Non-GAAP revenue is
expected to be in the range of $71.0 million to $74.0 million or
approximately 19% year-over-year growth. Non-GAAP loss from
operations is expected to be in the range of $(12.0) to $(15.0)
million. Total ARR is expected to be in the range of $63.0 million
to $66.0 million or approximately 26% year- over-year growth.
- Operating Cash Flow Guidance: Operating cash flows for
Q122 are expected to be negative, similar to Q121. For the full
year 2022 we also expect cash flows from operations to be negative
as a result of continued investments to support growth. For the
full year, we expect cash outflows from operations will be similar
in total to 2021.
“We see a number of tailwinds in our market which are driving
improvements in our sales pipelines. As a result, we will continue
to invest in go-to-market and product development in 2022.”, said
John Curran, CFO of GTY, “The sales investments will require time
to ramp to full productivity and we expect further improvement in
productivity in the second half of the year. Our anticipated
acceleration in ARR growth will be the leading indicator of the
success of these initiatives.”
Conference Call and Webcast
GTY will hold its quarterly earnings call on February 17, 2022
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;
OpenCounter 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 public health crises, epidemics and
pandemics such as the COVID-19 pandemic on our operations, our
customers and the economy, including the duration, spread and
severity of such crises, and variants, vaccinations, treatments,
testing, and recurrences; (2) the costs of acquisitions and the
risk that the ongoing integration of the businesses acquired in our
business combination and any subsequent acquisitions disrupts
current plans and operations; (3) the ability to fully recognize
the anticipated benefits of the business combination and any
subsequent acquisitions, which may be affected by, among other
things, competition, the ability of the combined company to grow
and manage growth profitably; (4) the ability to attract, retain,
and motivate its key employees and, if they depart, to recruit,
hire, and motivate replacements with comparable or better
knowledge, skills and abilities; (5) our failure to generate
sufficient cash flow from our business to make payments on our
debt; (6) our ability to raise or borrow additional funds on
acceptable terms; (7) changes in applicable laws or regulations and
the adoption of new accounting standards, statements, and
interpretations; (8) legal proceedings and investigations that
could harm our business, including those relating to former special
purpose acquisition companies; (9) the possibility that the company
may be adversely affected by other economic, business or
competitive factors, including inflation; and (10) 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 applicable securities laws.
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.
Non-GAAP Net Loss. Non-GAAP net loss is defined as GAAP net loss
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,
the change in fair value of contingent consideration and the change
in fair value of warrant liability. 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 are those that 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
(greater than $10 thousand 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 of history, we calculate an
annualized value based on the history available. For small projects
(less than $10 thousand per month) we annualize the most recent
month’s activity.
Average ARR per customer is calculated by dividing total ARR at
the end of the period by the number of customers at the end of the
period.
Exhibit 1 GTY Technology Holdings Inc. Condensed
Consolidated Statements of Operations (in thousands, except
per share amounts) (unaudited) Three
Months Ended Three Months Ended Year Ended
Year Ended December 31, 2021 December 31, 2020
December 31, 2021 December 31, 2020 Revenues
$
16,620
$
13,101
$
60,453
$
48,128
Cost of revenues
6,500
4,927
22,372
18,468
Gross Profit
10,120
8,174
38,081
29,660
Operating expenses Sales and marketing (1)
4,644
3,754
16,264
16,150
General and administrative (1)
6,182
5,136
23,244
21,743
Research and development (1)
3,777
2,775
13,072
12,158
Amortization of intangible assets
3,668
3,683
14,579
14,681
Goodwill impairment
15,827
2,000
15,827
2,000
Restructuring charges
-
-
-
3,666
Change in fair value of contingent consideration
(3,002
)
1,951
597
1,980
Total operating expenses
31,096
19,299
83,583
72,378
Loss from operations
(20,976
)
(11,125
)
(45,502
)
(42,718
)
Other income (expense) Interest income (expense), net
(863
)
(645
)
(3,364
)
(1,758
)
Loss from repurchase/issuance of shares
-
(666
)
(5,333
)
(2,056
)
Change in fair value of warrant liability
2,195
(973
)
(1,828
)
2,131
Gain on extinguishment of debt
-
-
3,210
-
Other income (loss), net
(153
)
(359
)
(162
)
78
Total other income (expense), net
1,179
(2,643
)
(7,477
)
(1,605
)
Loss before income taxes
(19,797
)
(13,768
)
(52,979
)
(44,323
)
Benefit from (provision for) income taxes
(1,003
)
371
(849
)
2,439
Net loss
$
(20,800
)
$
(13,397
)
$
(53,828
)
$
(41,884
)
Net loss per share, basic and diluted
$
(0.36
)
$
(0.25
)
$
(0.94
)
$
(0.78
)
Weighted average common shares outstanding, basic and diluted
57,574
53,893
57,115
53,450
Net loss
$
(20,800
)
$
(13,397
)
$
(53,828
)
$
(41,884
)
Other comprehensive loss: Foreign currency translation gain (loss)
11
(677
)
(50
)
(364
)
Total other comprehensive income (loss)
11
(677
)
(50
)
(364
)
Comprehensive loss
$
(20,789
)
$
(14,074
)
$
(53,878
)
$
(42,248
)
(1) Amounts include share-based compensation expense as
follows: Cost of revenues
$
357
$
236
$
1,459
$
811
Sales and Marketing
368
466
1,229
2,034
General and administrative
1,891
1,367
6,081
4,838
Research and development
326
214
1,200
938
Total share-based compensation expense
$
2,942
$
2,283
$
9,969
$
8,621
Exhibit 2 Reconciliations of non-GAAP Financial
Measures (in thousands) (unaudited)
Non-GAAP Reconciliation Three Months Ended
December 31, 2021 September 30, 2021 December 30,
2020 Revenues
$
16,620
$
16,257
$
13,101
Purchase accounting adjustment to revenue
104
105
126
Non-GAAP Revenues
$
16,724
$
16,362
$
13,227
Gross Profit
$
10,120
$
10,343
$
8,174
Purchase accounting adjustment to revenue
104
105
126
Share-based compensation
$
357
$
447
236
Non-GAAP Gross Profit
$
10,581
$
10,895
$
8,536
Gross Margin
61
%
64
%
62
%
Non-GAAP Gross Margin
63
%
67
%
65
%
Loss from operations
$
(20,976
)
$
(8,469
)
$
(11,125
)
Purchase accounting adjustment to revenue
104
105
126
Amortization of intangibles
3,668
3,668
3,683
Share-based compensation
2,942
3,336
2,283
Goodwill impairment expense
15,827
-
2,000
Change in fair value of contingent consideration
(3,002
)
1,235
1,951
Non-GAAP Loss from operations
$
(1,437
)
$
(125
)
$
(1,082
)
Net Loss
$
(20,800
)
$
(9,531
)
$
(13,397
)
Purchase accounting adjustment to revenue
104
105
126
Amortization of intangibles
3,668
3,668
3,683
Share-based compensation
2,942
3,336
2,283
Goodwill impairment expense
15,827
-
2,000
Change in fair value of contingent consideration
(3,002
)
1,235
1,951
Change in fair value of warrant liability
(2,195
)
456
973
Non-GAAP Net Loss
$
(3,456
)
$
(731
)
$
(2,381
)
Year Ended December 31, 2021
December 31, 2020 Revenues
$
60,453
$
48,128
Purchase accounting adjustment to revenue
435
715
Non-GAAP Revenues
$
60,888
$
48,843
Gross Profit
$
38,081
$
29,660
Purchase accounting adjustment to revenue
435
715
Share-based compensation
1,459
811
Non-GAAP Gross Profit
$
39,975
$
31,186
Gross Margin
63
%
62
%
Non-GAAP Gross Margin
66
%
64
%
Loss from operations
(45,502
)
(42,718
)
Purchase accounting adjustment to revenue
435
715
Amortization of intangibles
14,579
14,681
Share-based compensation
9,969
8,621
Goodwill impairment expense
15,827
2,000
Restructuring charges
-
3,666
Change in fair value of contingent consideration
597
1,980
Non-GAAP Loss from operations
$
(4,095
)
$
(11,055
)
Net Loss
$
(53,828
)
$
(41,884
)
Purchase accounting adjustment to revenue
435
715
Amortization of intangibles
14,579
14,681
Share-based compensation
9,969
8,621
Goodwill impairment expense
15,827
2,000
Restructuring charges
-
3,666
Change in fair value of contingent consideration
597
1,980
Change in fair value of warrant liability
1,828
(2,131
)
Non-GAAP Net Loss
$
(10,593
)
$
(12,352
)
Exhibit 3 GTY Technology Holdings Inc.
Condensed Consolidated Balance Sheets (in thousands)
(unaudited) December 31, December 31,
2021
2020
Assets Current assets:
Cash and cash equivalents
$
13,329
$
22,800
Accounts receivable, net
12,604
9,994
Prepaid expenses and other current assets
4,191
2,583
Total current assets
30,124
35,377
Property and equipment, net
3,208
3,891
Intangible assets, net
86,528
101,107
Goodwill
268,808
284,635
Other assets
6,276
7,437
Total assets
$
394,944
$
432,447
Liabilities and Shareholders’
Equity Current liabilities: Accounts payable and
accrued expenses
$
5,483
$
6,366
Deferred revenue - current portion
26,816
22,304
Contingent consideration - current portion
13
743
Other current liabilities
721
1,897
Total current liabilities
33,033
31,310
Deferred revenue - less current portion
1,979
1,602
Warrant liability
4,868
3,040
Deferred tax liability
17,738
17,494
Contingent consideration - less current portion
43,032
42,530
Term loan, net
24,641
26,632
Other long-term liabilities
2,716
3,074
Total liabilities
128,007
125,682
Commitments and contingencies Shareholders’
equity: Common stock
6
6
Exchangeable shares
50,358
54,224
Additional paid in capital
401,507
380,881
Accumulated other comprehensive income (loss)
(44
)
6
Treasury stock
(8,343
)
(5,633
)
Accumulated deficit
(176,547
)
(122,719
)
Total shareholders' equity
266,937
306,765
Total liabilities and shareholders’ equity
$
394,944
$
432,447
Exhibit 4 GTY Technology Holdings Inc.
Condensed Statement of Cash Flows (in thousands)
(unaudited) Year Ended Year
Ended December 31, 2021 December 31, 2020 Cash
flows from operating activities: Net loss
$
(53,828
)
$
(41,884
)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: Depreciation of property and equipment
1,020
863
Amortization of intangible assets
14,579
14,681
Amortization of right of use assets
1,600
2,034
Share-based compensation
9,969
8,621
Deferred income tax benefit
244
(2,781
)
Loss on issuance/repuchase of shares
5,333
2,056
Change in fair value of warrant liability
1,828
(2,131
)
Change in fair value of contingent consideration
597
1,980
Goodwill impairment
15,827
2,000
Gain on extinguishment of debt
(3,210
)
-
Amortization of deferred debt issuance costs
958
759
Other
341
165
Changes in operating assets and liabilities: Accounts receivable
(2,685
)
(818
)
Prepaid expenses and other assets
(1,816
)
(725
)
Accounts payable and accrued liabilities
(897
)
(2,030
)
Deferred revenue and other liabilities
4,887
6,335
Operating lease liabilities
(1,129
)
(2,099
)
Net cash (used in) provided by operating activities
(6,382
)
(12,974
)
Cash flows from investing activities: Capital
expenditures
(352
)
(3,023
)
Proceeds from disposal of fixed assets
6
30
Net cash (used in) provided by investing activities
(346
)
(2,993
)
Cash flows from financing activities: Proceeds from
borrowings, net of issuance costs
-
37,803
Repayments of borrowings
-
(12,000
)
Contingent consideration payments
(825
)
(1,286
)
Common stock repurchases
(8,043
)
(459
)
Proceeds received from private placement of common stock, net of
costs
-
7,000
Proceeds from issuance of common stock, net of costs
6,790
-
Other
(637
)
(578
)
Net cash provided by (used in) financing activities
(2,715
)
30,480
Effect of foreign currency on cash
(28
)
(87
)
Net change in cash and cash equivalents
(9,471
)
14,426
Cash and cash equivalents, beginning of period
22,800
8,374
Cash and cash equivalents, end of period
13,329
22,800
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220217005729/en/
Marc Griffin Investor Relations ir@gtytechnology.com
1-877-465-3200
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