Hello and welcome to today’s Tyler Technologies Fourth Quarter 2021 Conference Call. Your host for today’s call is Lynn Moore, President and CEO of Tyler Technologies. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session, and instructions will follow at that time. And as a reminder, this conference is being recorded today, February 17, 2022. I'd now like to turn the call over to Mr. Moore. Please go ahead.

Thank you, Gary, and welcome to our call. With me today is Brian Miller, our Chief Financial Officer. First, I’d like for Brian to give the Safe Harbor statement. Next, I’ll have some comments on our quarter and then Brian will review the details of our results. I’ll end with some additional comments on 2021 and our longer term outlook and then 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. Please note that all growth comparisons we make on the call today will relate to the corresponding period of last year unless we specify otherwise. Also, we're officially launching next week our new brand architecture, a broad company initiative that better organizes the name Tyler' Products and Solutions to represent the verticals and markets we serve. The new brand architecture uses functional descriptive product names and has eliminated all individual product logos. Tyler Solutions have been organized under five solution portfolios, public administration, health and human services, courts and public safety, schools and transformative technology. Throughout the call today, we'll refer to product and solution names using the new architecture. Lynn?

Thanks Brian. Our fourth quarter results were in line with our expectations and continue to the positive momentum from the first three quarters to provide a strong finish to 2021. We're pleased that revenue growth continue to rebound, even as we experience revenue headwinds from the accelerating shift of new business to our SaaS model. Total revenues grew 53% with solid organic growth increasing to 9.2%. NIC continued its strong performance in the fourth quarter as well with core revenue growth of 7.5% excluding COVID related revenues. As expected, COVID related revenues declined sequentially from the third quarter of 2021 and were slightly above our plan at $16.6 million as the Omicron variant increased demand for testing in December and revenues from our new initiative supporting rent relief programs in Virginia came online. Recurring revenues comprised over 80% of our quarterly revenues for the second consecutive quarter and were led by 144% growth in subscription revenues. Excluding NIC revenues, subscription revenue growth was robust at 28.1% again, reflecting our accelerating shift to the cloud. We have now achieved greater than 20% subscription revenue growth in 56 of the last 64 quarters. We continue to experience pressure on margins in Q4, as we have throughout the year as a result of several factors. Some low margin revenues such as billable travel that declined substantially in 2020 due to the pandemic began to return in 2021. In addition, some expenses that also declined in 2020 have also started to return including business travel, trade shows and employee health costs. Margins have also been impacted by the inclusion of NIC including their lower margin gross payments contracts and COVID initiative revenues. As a result, our non-GAAP operating margin declined 330 basis points to 23.6%. And while our accelerating move to the cloud continues…

Thanks Lynn yesterday. Tyler Technologies reported its results for the fourth quarter ended December 31, 2021. In our earnings release, we have included non-GAAP measures that we've belief facilitate understanding of our results and comparisons with peers in the software industry. A reconciliation of GAAP to non-GAAP measures is provided in our earnings release. We've also posted on the Investor Relations section of our website under the financial reports GAAP, schedules with supplemental information provided on this call, including information about quarterly bookings, backlog and recurring revenues. GAAP revenues for the quarter were $433.5 million up 53% with the inclusion of NIC and our other acquisitions. Non-GAAP revenues were $434.2 million up 53.2%. On an organic basis GAAP and non-GAAP revenues both grew 9.2%. Software licenses and services grew 21.1% or 4.6% excluding NIC. Subscription revenues rose 144.1%. Excluding the contribution from NIC, subscription revenues were still very strong growing 28.1%. We added 135 new subscription-based arrangements and converted 71 existing on-premises clients representing approximately $74 million in total contract value. In Q4 of last year, we added 118 new subscription based arrangements and 50 on-premises conversions representing approximately $73 million in total contract value. Our software subscription bookings in the fourth quarter added $14.8 million in new annual recurring revenue. Subscription contract value comprised approximately 77% of the total new software contract value signed this quarter compared to 73% in Q4 of last year, reflecting in our ongoing shift to a cloud first approach to sales and increasing client preferences for cloud based solutions. The valuated average term of new SaaS contracts this quarter was 3.9 years compared to 3.5 last year. Transaction based revenues, which include NIC portal, payment processing and e-filing revenues and are included in subscriptions were $137.1 million up almost fivefold from last year. E-filing…

Thanks, Brian. I'm very pleased with our fourth quarter results, especially with regard to our sales and revenue performance. Activity in the public sector market continues to trend positively with indicators such as RFP and demo activity generally at or above pre-COVID levels. It's also gratifying that our NIC operations are executing at a high level, and that we're seeing early successes in achieving the go to market objectives we envisioned around the acquisition. For example, NIC was recently awarded an early three year extension to its Texas Payments contract at existing rates. Similar to the South Carolina rebid, the inclusion of Tyler's enterprise data platform and in particular payment insights with fraud detection and prevention proved to be a major factor in obtaining this early extension. We're very excited to expand NIC's portfolio of software solutions with the acquisition of USC Direct, which we completed last week. USC Direct has a market leading AWS cloud hosted outdoor reservation platform for the fast growing campground and outdoor recreation management market, which complements our existing strength in the hunting and fishing license market. This combination will allow us to create a very competitive all in one outdoor solution, addressing an estimated $2 million market while also expanding our payments opportunity. USC Direct is now a part of our NIC division, and we welcome their 60 team members to Tyler. Now I'd like to take a few minutes to discuss our accelerator move to the cloud, including the expected impact on our results in both the near term and the long term. As most of you know, we have operated in a hybrid model for many years, offering our core products in either an on-premises model with an upfront license and annual maintenance or a SaaS model with a software generally hosted…

[Operator instructions] Our first question comes from Matt VanVliet with BTIG. Please go ahead.

Yeah, thanks for taking the question guys. Appreciate it. I guess, as you look at the commentary around the additional sales activity in RFPs, do you have a sense for how much the average budget is growing for the next 12 months or kind of on a go forward basis and how much of that can you attribute to the federal stimulus money finally sort of making its way into these budgets and people ready to allocate and spend those dollars?

Yeah, I don't have the percentage growth in government budgets at my fingertips, but the backdrop is strong. I would say that one of the -- obviously in public, in the local government, one of the biggest revenue streams is property taxes. Often that accounts for more than half of their budget and generally property values remain strong, real estate markets are strong, so there's not a lot of pressure there. So the overall environmental environment backdrop is strong and I would say that doesn't really include a lot of uplift from federal stimulus yet. We've seen, handful of deals this last quarter that were specifically identified as coming from or being funded with stimulus money. There's certainly some indirect funding that may not be used directly for a Tyler purchase that relieves pressures elsewhere in the budget and frees up funds for money they'd like to spend with Tyler. But in our view, the vast majority of the stimulus money has not yet been spent or even committed yet. With the Cares Act money they have until or the American Rescue plan money they've got until the end of 2024 to spend it and I think many governments are still in the very early stages of figuring out where they're going to spend that.

All right. And then Brian, when we look at the, the guidance, I guess how much impact to the top line are you seeing in terms of headwinds from just the elevated SaaS mix coming through? So if we were to assume sort of the same level of mix from '21 into '22, how much of a lift would we see on that revenue number and then kind of secondarily to that, on the margin side, what is the underlying assumption for the core Tyler legacy business in terms of margin expansion, excluding some of these transition costs?

Yeah. The combination of the bubble costs, which are the incremental SaaS costs and the shift in the new mix is a combination of about $28 million to $30 million of impact on the op line on the revenue line and op related to the mix shift it's probably in the low teens, $12 million to $15 million of revenue impact from the increasing shift towards more SaaS.

Yeah. I'd say it's and that's a combination of two numbers because you've got the -- when you're just talking about new business activity, it's, more in the $17 million to $18 million hit on the short term. At the same time, we are doing flips which gets some immediate impact offsetting some maintenance loss. But if you're talking about just the new business revenue growth, it's more in the $17 million, $18 million. When you offset flips, it comes down a little bit lower but there's also a cost that's associated with flips. Typically when we do a flip, we provide some services that we don't bill and that also creates some short term pressure on the margins that will not be there in the future.

So it's that impact of the mix shift is probably about a half point of margin for the year.

The next question is from Peter Heckmann with D.A. Davidson. Please go ahead.

Hey, good morning. Thanks for taking my question. Just a couple things, in the quarter were there any didn't sound like it, but were there any deals above $5 million in total contract value? And then in terms of, it's really encouraging to hear the cross sales so far, especially into the EGov base. I think you had done a little bit of qualification nine deals in the quarter, but is there any way to think about, quantifying the total value of bookings that Tyler may have added since the close of the EnerGov selling into current EnerGov customers?

I'll take the first part of that? No, there were not any deals this quarter that had a total contract value of more than $5 million. Our largest one was a little under $4.5 million. We had a lot of deals in the, the $1 million to $3 million range, but no, none of those mega deals this quarter and we did in the fourth quarter of last year as we pointed out.

Yeah. I think I'd add, you talking about the cross selling, that's one of our largest opportunities in our core applications and every time we do acquisitions, it's real exciting to see the things that are going on within IC right now in our other divisions. One of the things that we didn't point out in our prepared comments was a very specific deal of the nine that we talked about. And this was a deal that NIC helped using their state enterprise contracts, state contacts with the State of Arkansas where we got a vend engine deal where vend engine is going to be handling all the online and phone bank deposits in the state-wide corrections contract. That's about $800,000 in ARR and what's I think what's particularly exciting for me is NIC is a company that we acquired in April and VendEngine is a company that we acquired in September and in the first quarter those two teams got together as part, we've talked in the past about some of the efforts we were doing around sales and education, and we're able to already get a deal of this size. I think it's an example of the tip iceberg of where we can go. Not only with NIC, but all the other acquisitions that we do for strategic purposes and again, it's pretty exciting.

Yeah. That's incredible and it sounds as if the more near term opportunity is selling Tyler Solutions into EGov base and that might be a little easier just based upon how their portal contracts are kind of like hunting licenses but, longer term, do you see some cross sells the other way, either payments or certain applications that that NIC has developed that you might be able to sell in municipalities?

Yeah, I think, that's fair. I also, going back to the NIC strategy, I remember a year and a half ago when I was talking with the business leaders about this deal, I said, show me why this deal is good for Tyler, but also show me why Tyler's good for NIC, and I just gave the example of the vintage in Arkansas deal, but I also gave examples in my prepared remarks about how D&I really was a significant contributor in getting South Carolina in a very competitive rebid against Deloitte and also an early extension of this Texas payments contracts. So that's an example where we provided value to NIC really out of the gate. I do think as we continue, you talk about payments yes, like you look at the State of Florida, we're going to help expand that payments revenue by having that hunting license and going through our local contact. We put our payments teams together and today I generally just consider it Tyler, it's one payments organization. I don't really distinguish between NIC and Tyler anymore, but certainly they were much more mature. They were the payments leader and, and I think we're helping there as well.

And of the nine combined sell through deals this quarter, one of them was a payments deal with NIC payments with a Tyler local government client in Louisiana.

Okay, great. I appreciate it.

The next question is from Terry Tillman with Truist. Please go ahead, Terry. Your line is open on our end. Is it possibly muted on yours?

Thank you very much. This is Joe [ph] on for Terry. Thanks for taking the question. Just acknowledging that bookings can be lumpy and trillion 12 month view helps smooth things out, but I'm just curious about the bookings in 4Q, how that played out versus your expectations?

I'd say generally pretty much in line with our X expectations. One of the things, we've talked about the recovery in the market that over the last year, we've consistently talked about activity, sort of leading indicators of activity in the market. The number of RFPs we're seeing, the number of sales demos we're doing, those things continuing to rebound and trend back towards and in many cases above pre COVID levels. But you have to keep in mind that our sales cycles are long and it's not uncommon that a deal from the time that process really gets started to the time we sign a contract can be a year, year and a half. So there's a lag between a lot of the time that activity starts to, to ramp up and the time it shows up in booking. So generally we're pretty pleased. There's always some deals that fly out of the quarter, but nothing really terribly unusual this quarter. And the progress in the booking is I think in line with our expectations given that activity we've seen over the last few quarters.

Great. Thanks. And then if you could just comment on ERP demand through 2022 and how that looks going into '23. Thanks so much.

Yeah, I think the ERP demand is like everything else and across the company. I talked earlier about, demos are, are at all time, high, RFPs are up. The number of deals that we're signing particularly at our enterprise platform is approaching really pre-pandemic levels. At the lower end at our, at our ERP pro, our win rates are at all-time highs. The growth is really is really good. It has been really for, it's been good for the last several quarters and really the last year and a half or two years. So I think the demand is still pretty robust out there.

The next question is from Charlie Strauzer with CJS Securities. Please go ahead.

Hi. Good morning. Just two quick questions real quick on the AWS progress. Are you currently are you -- when you sign up a new SaaS customer, are you currently putting them on AWS? Are you still putting them on legacy systems and then migrating them over?

Yeah, that's sort of still depends a little bit by product. So new customers in our ERP side particularly in our civic and our powered by Munis, those new customers are going to be going in AWS, but you have to remember, we're still in the process of getting all of our core applications into a cloud efficient state. So, even the new customers that we sign that going to AWS, we're not going to be experiencing the higher margin that we will be, as soon as we get these products more efficient in the cloud.

That makes sense and obviously we talked about some of the expenses and migration lasting it into next year. Do you think that's kind of first half of next year, full year, how should we think about the progression of that that decline of away from the,

Oh, I'd say that it's pretty consistent throughout the year. We'd expect that impact to continue on through the year.

Got it. And then just lastly, Brian, I apologize if you gave us that earlier, but in the guidance any guidance for cash flow?

We do not guide the cash flow. We give a lot of in the press release. There's a lot of information around depreciation, amortization capitalization that can help you get to that number, but we don't specifically guide to cash flow.

The next question, if from Scott Berg with Needham & Company. Please go ahead.

Hi, everyone. Congrats on the good quarter and thanks for too my question. Lynn just to start off with a statement, you sound like you could be a CFO in your next life nice job with all those numbers there. Yeah, I guess I wanted to…

I'm known for my own spread sheets, Alex.

It's also impressive because I think your background as an attorney, if I remember correctly too, so double whammy there. That's fantastic. I guess wanted to start by tackling fiscal '22 margins from a slightly different angle. As we think about the fall off in NIC revenues this year, kind of the two part question, there is one, how much are NIC revenues pressuring margins this year versus the core kind of organic Tyler business, because you didn't lay that out in the slide necessarily on the website. And then secondly, as some of those COVID revenues fall off in the first half, given what those margins look like, should we get maybe a little bit of upward opportunity and margins, with a fall off of those revenues?

Yeah I'll start Scott. I think you'll see throughout the year our margin will increase some throughout the year and as we are losing some of those COVID revenues in some of the areas, I believe it's in South Carolina and Nevada our role in those COVID revenues has changed from a prime to a sub. So while those revenues drop off the margins actually get a little bit better. And so I think really at a high level NIC's contribution is somewhat consistent with Tyler's overall margin for next year.

Got it helpful. And then from a sorry, go ahead Brian.

I was just going to say, yeah, the second half margins do step up from the first half as the NIC COVID revenues decline, but in general NIC's revenues or margins in 2022 are fairly close to in line with Tyler's.

Got it helpful. And then from a follow up question around the SaaS transition, you all seem significantly more confident in your ability to sell that obviously today, given what your recent successes are, but Brian, I remember talking historically over the last couple years is your largest of customers still had some hesitancy to adopt a subscription model for a variety of different reasons. I think in Lynn's remarks, your expectations around Munis virtually all of those deals to go subscription this year and of course Munis is one of those products you've also had an opportunity or growing opportunity at market. Should we see those large Munis deals also go subscription this year? Or is that something that might push into, maybe '23 or '24? A – Brian Miller: I think we're seeing it across all tiers of the market. And that includes in the ERP space. I think last quarter 90% of Munis' deals were SaaS deals. So the upper end of the market is I think just as willing to go SaaS as the lower end and maybe in some cases more so, and we certainly had success across other products. For example, North Carolina a couple years ago in the odysey side on the courts was our biggest SaaS contract to date. And we've seen some large customers on the appraisal and tax side selecting SaaS. So I think it's across all tiers of the market.

Yeah, I think Scott, I'd add that, we've communicated to the Munis client base the direction and you're going to see more around this in, I think it's April when we have our Tyler user conference connect, you're going to see a significant, more focus on our shift to the cloud and the expectation really and the messaging is really, is that pretty much almost all new business up to that end will be going into the cloud. And as Brian mentioned, it was already over 90% in Q4 last year, which, if you go back three years ago, it had just gotten to 50-50. So it's been moving in that direction for some time.

The next question is from Alex Zukin with Wolfe Research. Please go ahead.

Hey guys. So just a couple for me, I guess, help us understand, because it does feel like again, you're at a high level, you're guiding to organic revenue growth acceleration next year, and you grew organic bookings 11.5% this year outside of the headwinds, obviously from the cloud transition stuff. Put that into context and just drive home maybe if you will, A, when was the last time you guided to accelerating growth and what are some of the sustainable, trends that you're seeing in the business that give you that confidence?

Yeah, well, I think you're right. It's funny. I was, I talk sometimes in my personal life about the last couple years in COVID and sometimes I sort of call them as quote, the lost years and I try to -- I was trying to remember how things happened and I almost put everything in reference to, well, it was pre COVID or post COVID. But what I was thinking about this the other day, but at Tyler, these haven't been lost years. We've been working hard and we've been investing and we knew that this market was going to be rebounding. And we talked about it as COVID started about, we went back to the great recession and we had that great big boost out of coming outta the great recession. And we were anticipating this and we planned for it, we invested in it and at the same time made our investments into the cloud, and I think seeing the market return, yes, the stimulus money's out there. I think the local state and local government budgets are very robust. I think we're in our competitive position across all our products is an all-time high. We are at the point now where I'm starting to see the coming out of the other side of the SaaS transition. It's not happening tomorrow. It's not happening in the next couple of quarters, but my reference to what's going on at for example, up at Munis and we see the uplift that's coming from that. And so that's the stuff that gives me confidence. The acquisitions that we're doing, the cross selling that's going on, the interactions that's going on with our teams, one thing we've been focused on really a lot in the last few years is an idea that…

That's super helpful. I guess let's talk about my next question's about those ripples. And I apologize, it'll be a little bit of a multi-part question, but I want, when you talked about subscription revenues, ex, the COVID points being over 30%, I want to ask, if we think about this SaaS transition, what's the durability of that 30% plus subscription revenue growth? And then on the margin side, I think you guys did a wonderful job laying out the costs -- the cost hit that you're taking this year and bridging the margins on a like for like basis without it. Is this the year that margins trough in the business and then next as you absorb those bubble costs, as you absorb the comeback COVID costs, and then in '23, you start to come, go back to seeing margin leverage, or is this transition going to, kind of peg margins at this level for a few years?

I'll start, I'll let Brian jump in. I think, margins will trough may be the right word or sort of balance out at this level through 2023. And I think you'll start to see the uplift coming out of there. On your question around subscriptions and the uplift of course, embedded in our subscription line is also transaction based revenues. Those, will grow not at the same rate as some of our subscriptions, which is just coming in with our SaaS contracts. We talked about on the call, we've grown in double digits 56 quarters out of 64 quarters. We've been consistently at 20% plus. And I think as we make the transition and start coming out on the other side, I think you'll start seeing that. We talked about a few milestones in my prepared comments. One of the things that's also exciting me when I look at our mix of recurring revenue versus where it was five years ago, and you talk about our growth, it took us from 1998 to 2019 to get to a billion dollars in total revenues. And in 2022, I think we're going to do right at about a billion dollars in subscriptions alone. That's part of the excitement that I see and I see that continuing to grow at a pretty healthy clip in the near future. A – Brian Miller: And I would just point out that, that mid to high 30 subscription growth, it excludes the COVID related revenues, but it is not an organic number. So it also includes a full year of NIC. On organic basis, it would be more around the mid 20%, so 24%, 25% which is more consistent with I think what's sort of a sustainable in the near to midterm kind of growth in subscriptions.

Got it. That's super helpful. Thank you guys and congrats.

The next question is from Brent Bracelin with Piper Sandler. Please go ahead.

Good morning and thank you for taking the question here. Obviously super encouraging to see government appetite to embrace cloud. I think the impact did you accelerate those transitions are very clear and well known and well understood. I wanted to double click into the cross opportunity around payments specifically around going into the existing installed base of Tyler software customers that potentially are using a different payment source and really convincing that base of customer to add on payments. Is the assertion point primarily upon a renewal. Is there a shorter sales cycle potentially to add on payments or and do you have a dedicated team now that is going in and trying to cross sell upsell existing Tyler software payments, little more color just around that opportunity. It seems like it's a very big opportunity encouraged by the nine deals. You talked about bundling those sound more like new deals. Love to get some color around being, trying to your success upselling the install base. Thanks.

No, that's a good question, Brent. I think, you actually, you asked a number of questions in there. I'll try to get to the ones I recall, if I'd missed one, just come back to at me. The sales side will vary a little bit with payments and some of that will be dependent upon the customer and payments, there's a number of things that can impact that the current providers that our clients might be using is one. But you're right. It is one of our larger opportunities and payments while we've got some great new ground with NIC and for example, the Florida contract and going locally, it's one of the focuses and emphasis, for example, we talked, there's been a lot of questions about what's going on with Munis on this call. It's considered to be one of their primary key growth drivers in the next few years is payments. And there's a significant amount of dedicated resources that are focused on that. And going back into that installed channel. So you're exactly right there. What we bring with NIC in terms of payments and our now more complete solution I think is something that's pretty important. One thing that we had really built out was electronic bill presentment and payment, and that's a very, very big differentiator in the market. And it's something that NIC was not as strong at and obviously they were very strong with their payment engine and gateway stuff, things that we needed to build. I think we've talked before where we both brought strengths here. We've got the ability through our connections with our proprietary products, either you be in tax collections, and we've got those relationships and we can start going to drive those sales. And so, you're right. It's one of our larger strategic initiatives. It's getting a lot of attention and focus. I mentioned how we just recently reorganized the internally the payments organization bringing, 45 payment org resources within Tyler and getting them aligned with the NIC resources working on go to market strategies looking at the size of the market, and so it's something that we are, I can assure you we're actively pursuing.

Great, super helpful color there. And just one follow up on, on the go to market for payments, is the intent that each major, it sounds like these now five solution categories would have their own dedicated payments team, or do you actually have an overlay payments sales team to go in and try to upsell cross sell?

Yeah, I think it's the latter right now. And there are certain parts of our business where payments will be a bigger focus. It obviously trickles through a lot of our different core applications. We'll be focusing on certain ones more out of the gate and as we continue to capitalize on that opportunity, we'll continue to expand.

Got it. Very clear. Thank you.

The next question is from [indiscernible] with Evercore. Please go ahead.

Hey this is Aduvaid [ph] here asking a question on behalf of Kirk. Just two questions. First I know he's been a really big year from an R&A perspective but how are you thinking about the pace of M&A going forward, and then I know you talked a little bit about the transition to AWS, but could you touch a little bit about on the just the incremental costs associated with the transition?

Sure. I'll, start, M&A is part of our history. It's something we've done since 1998. I think we've done 50 acquisitions over the 23 plus years I've been here and it's something that we continually look at. We have done a, a fair number. We did five last year. We just closed another one. Excuse me, those take significant amount of internal resources. But I think as we look forward we're going to continue to look at opportunities and when we find something compelling and that's strategic, we're going to execute on it. I mentioned last year, obviously the NIC deal and I've made my comments where there were some other deals in the pipeline. USC directs a good example. This was something that was not in the pipeline last year. We talked about a little at higher bar. I think we probably had a little bit higher bar right now. But I'm also comfortable with where we sit with our balance sheet in our debt. We paid down $395 million last year. Our net leverage is right around two give or take a little bit. So in my view, we're in a position to execute on any strategic initiative and if it's a compelling M&A opportunity we're going to do it.

And your question about the AWS transition costs, I guess what we refer to as the bubble costs or those incremental SaaS transition costs in 2022 will be in the $16 million to $18 million range. So, somewhere around 90 basis points of operating margin impact.

The next question is from Keith Housum with Northcoast Research. Please go ahead.

Hi, this is Trevor [ph] filling in for Keith. I had a quick question about NIC. So the core revenue growth for the quarter was a little bit less than we expected. Is driver history records being impacted the slowdown in new car sales?

Yes, they are. That is the one of the bigger drivers of those revenue streams, which are a significant part of NIC's transaction revenues in many states. And one of the drivers of that is new car sales which trigger a insurance event. And so those have been affected in recent quarters by the slowness in new car sales as a result of supply chain issues.

Okay. And then a quick follow up sticking with NIC you kind of touched on this a little bit earlier, but could you share the biggest success story so far and the acquisition and maybe any revenue synergies that you've achieved?

Well, I think the biggest success story, well, I could probably talk for another hour. I think the biggest success story has been bringing in their team and seeing how their team aligns with our team and seeing our teams work together, executing on our out of the gate strategy in 2021, them continuing to deliver on their business while we also sat and outlined a number of strategic initiatives which are pretty wide and diverse across Tyler. We talked about it on this call, a couple of deals that were really joint deals that we're -- that may not have happened. Or certainly the timing of it may not have happened had we not been together the vend engine deal, great example the extension of Tyler -- of Texas payments by three years because of D&I, huge success story beating in a very, very competitive rebid in South Carolina, which is a $10 million ARR client and beating out them and using Tyler and the story of Tyler and D&I involved in that. Those are all success stories, and I almost get to the point it's you're almost asking me who's my favorite kid. There's a lot of them out there.

Okay, great. Thanks a lot. And congrats on the quarter.

At this time, there appear to be no more questions. Mr. Moore, I'll turn the call back over to you for closing remarks.

Thanks, Gary. And thanks everybody for joining us today. We hope you stay safe and healthy, and if you have any further questions, please feel free to contact Brian Miller or myself. Thanks everybody.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.