BOSTON--(BUSINESS WIRE)--GTY Technology Holdings Inc. (Nasdaq: GTYH), a leading vertical SaaS/Cloud solution provider for the public sector, today announced financial results for the third quarter and nine months ended September 30, 2020.
Third Quarter Highlights
Topline growth, cost management, customer satisfaction and continued strength of government digital transformation:
- Cash flow positive for the quarter; total cash increased by $0.2 million
- Conclusion of review of strategic alternatives
- High demand for GTY Budgeting, Procurement and Grants Management Solutions
- Nine months to date GAAP revenues up 40% year-over-year to $35.0 million; third quarter GAAP revenues up 44% to $12.6 million
- Nine months to date non-GAAP revenues up 25% year-over-year to $35.6 million; third quarter non-GAAP revenues up 30% to $12.7 million
“This was a great quarter for GTY. We achieved 44% topline growth, a cash flow positive milestone and added 77 new customers,” said TJ Parass, CEO of GTY. “Our team is doing an exceptional job managing the uncertainties of the COVID-19 pandemic and serving our customers well in the digital transformation of state and local government. “The best companies are made in tough times,” Parass continued. “Our performance this year demonstrates our model is working and our business is solid. Further, we have great people and products in place to chart continued growth for GTY.
“In the mid-market in particular, government offices continue to favor GTY solutions for their speed of deployment and relevance. Our customers can quickly apply for grants, manage and track grant deployments, conduct budget iterations, procure goods and services and deploy touch-less cash payments. All while being remote. Governments using our technology are serving citizens and themselves better and faster than they could with the alternatives of off-line systems or expensive and time-consuming ERP implementations.
The Company also announced that it has concluded its review of potential strategic alternatives that it announced at the beginning of this year. The Company's Board of Directors determined that in light of the continuing uncertainties arising from the global Covid-19 pandemic and the positive developments in the Company's financial performance over the past two quarters, it is in the best interests of GTY stockholders to conclude the review and focus on executing the Company's standalone business plan. Although the process has concluded, the Company will continue to evaluate all opportunities to drive growth and enhance shareholder value.
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.
Financial Discussion and Outlook
According to John Curran, CFO of GTY, “Strong revenue growth and continued cost management enabled GTY to reach cash flow positive in this seasonally strong third quarter. Our focus on efficiency, including cost management and consolidation in the back-office functions, kept operating expenses flat. On the revenue side, recurring revenues were up 6% compared with Q2 2020 and up 32% compared with Q3 2019. We are on track with our revenue growth expectation communicated in Q1 2020 of more than 20% for the full year 2020.”
Third quarter 2020 operating loss narrowed to $7.3 million compared with $7.8 million in Q2 2020. Third quarter non-GAAP operating loss narrowed to $1.4 million compared with $2.8 million in Q2 2020.
About GTY Technology Holdings Inc.
GTY Technology Holdings Inc. (NASDAQ: GTYH) (“GTY”) brings leading public sector technology companies together to achieve a new standard in stakeholder engagement and resource management. Through its six business units, GTY offers an intuitive cloud-based suite of solutions for state and local governments, education institutions, and healthcare organizations spanning functions in procurement, payments, grant management, budgeting, and permitting: Bonfire provides strategic sourcing and procurement software to enable confident and compliant spending decisions; CityBase provides government payment solutions to connect constituents with utilities and government agencies; eCivis offers a grant management system to maximize grant revenues and track performance; Open Counter provides user-friendly software to guide applicants through complex permitting and licensing procedures; Questica offers budget preparation and management software to deliver on financial and non-financial strategic objectives; Sherpa provides public-sector budgeting software and consulting services.
