GTY Technology Holdings Announces Q1 2019 Results

GTY
Technology Holdings Inc. (Nasdaq:GTYH) (“GTY”), a leading vertical
SaaS/Cloud solution for the public sector, announced before market today
its Q1 2019 results. This is the first quarter of significant operations
for the company with GTY closing its previously announced business
combination and acquisition of 6 best-in-class software solutions to
serve the highly fragmented and underpenetrated state & local government
market. The business combination was consummated on February 19, 2019.

After the closing of the business combination, Stephen Rohleder, a GTY
Director and the former Accenture COO and Group CEO for Health and
Public Service Operating Group, became Chairman and CEO of the new
entity. “I am exceptionally honored to be leading GTY and am excited
about the growth prospect of our Business Units,” said Rohleder. “We
have been focusing on rounding out our leadership team and assembling
the key foundational framework for our world-class platform. I would
like to thank our Business Units CEOs and Business partners for all
their hard work to close these transactions. We have spent a significant
amount of time with our CEOs to help facilitate the deal, shifting the
timing of our plan out several months. We are now well-positioned to
deliver on our growth trajectory.”

Revenue growth was 17% over the prior year period on a GAAP basis.
Non-GAAP pro forma as adjusted revenue growth, which assumes the
business combination and other related transactions had taken place on
January 1, 2018 and excludes the impact of purchase accounting, was 30%
over the prior year period. “We continue to see the exceptionally strong
expansion of the Public Sector SaaS market,” said Rohleder. “As an
example, 76% of Public Sector CIOs favor movement to a SaaS model to
modernize their legacy systems. With strong organic revenue growth, we
expect our growth rates, in both Revenue and ARR, to accelerate
significantly across our Business Units, especially in the 2^nd
half of the year.”

GTY was formed in November 2016 as a Special Purpose Acquisition Company
by William D. Green, Joseph M. Tucci and Harry L. You with the mandate
to seek out the most compelling technology solutions in a hyper-growth
market. “We are especially grateful to our shareholders whose
participation and underlying belief in the company will allow us to
execute our thesis of scaling a vertical-SaaS solution for the North
American state & local government market,” said the Sponsors. “Having
hired a talented team to affect our vision, we wanted to highlight that
compensation plans are aligned with shareholders’ interests and driven
by management’s ability to execute on our plan provided in our proxy
statement. With Joe serving as Lead Director, Bill as a Director, and
Harry maintaining his role as President and CFO, as well as a Director,
we will all continue to be active in GTY’s operations and offer our full
support to the Business Units.”

“We are also pleased to announce that John Albanese and Alpa Fedor will
be joining us as EVP of Sales and General Counsel, respectively,” said
Rohleder. “John will work with me to grow our sales organization across
all platforms, implement the cross-selling initiative, and drive new
channel relationships and key alliances. From his time at EMC, he has a
history of leading and building a well-trained salesforce and will no
doubt be a significant contributor to both short and long-term revenue
milestones.”

The company will plan to have an Analyst call after Q2 Earnings which
will serve as the first full quarter of GTY operating the Business
Units. The company intends to file a registration statement on Form S-1
to register the resale of shares purchased in the previously announced
PIPE transaction that occurred in connection with the business
combination. In addition, the company intends to file a registration
statement on Form S-8 registering restricted stock units issuable to
employees under its equity incentive plan.

This press release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of our
securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or
jurisdiction.

About GTY Technology Holdings Inc. (f/k/a GTY Govtech, Inc.)

GTY Technology Holdings Inc. is a leading public sector SaaS company
which offers a cloud-based suite of solutions for North American state
and local governments. For more information, please visit www.gtytechnology.com.
The following is a brief description of each of GTY’s Business Units.

About Bonfire

Bonfire,
a leader in strategic sourcing and procurement software, empowers
organizations to make the right purchasing decisions with ease. With
tools to support the entire vendor lifecycle (sourcing, contract
management, and vendor performance), Bonfire goes beyond traditional
mechanics to make complex decision making easy. Bonfire works the way
you do on a single cloud platform designed to unite stakeholders, absorb
compliance requirements, and facilitate advanced evaluation techniques.
The combination of flexible technology with world-class customer service
makes Bonfire the solution of choice for both public and private sector
organizations of all sizes around the globe. Bonfire was named as a 2018
Gartner Cool Vendor and proudly reports a client retention rate greater
than 96 percent.

About CityBase

CityBase
gives people and businesses an intuitive way to interact with utilities
and government agencies. CityBase’s technology dramatically improves
constituent services through payment solutions, digital services and API
development for cities, states and utilities.

About eCivis

Since 2000, eCivis
has been the most trusted and widely used SaaS grant management system
by state, local and tribal governments. eCivis helps thousands of
government agencies maximize their grant revenues, track their financial
and program performance, prepare cost allocation plans and budgets, and
access free open data tools to make sense of Federal data.

About Open Counter

Open
Counter builds user-friendly software to guide applicants through
complex permitting and licensing procedures, guiding applicants through
the process by estimating the total fees and requirements for the
project, and allowing applicants to apply and pay for permits online.

About Questica

Questica’s
budget preparation and management software suite – Questica Budget –
Integrates with more than 25 financial systems and other systems. This
ensures organizations can access all the information they need to
develop, track, monitor and adjust their budgets, plus report out to
stakeholders when and to who they need to. Questica Budget Suite’s
Operating, Salary, Capital and Performance modules ensure public sector
organizations have a clear view into their budgets, forecasts and
expenditures, thus enabling those organizations to deliver on their
financial and non-financial strategic objectives. Additionally,
Questica’s easy-to-use OpenBook transparency and data visualization
software can be used to share an organization’s financial and
non-financial information with both its internal and external
stakeholders.

About Sherpa

Sherpa
is a provider of public sector budgeting software and consulting
services. Sherpa’s highly-configurable software enables rapid and
collaborative implementations. Clients have benefitted from a unique
deployment model, staffing projects with consultants averaging 20 years
of experience and having one project team from sales through
implementation to post-implementation support.

Forward-Looking Statements

This press 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 and
anticipated impacts of the business combination. 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 risk that the business combination disrupts current
plans and operations; (2) the ability to recognize the anticipated
benefits of the business combination, which may be affected by, among
other things, competition, the ability of the company to grow and manage
growth profitably and retain its key employees; (3) costs related to the
business combination; (4) the outcome of the New York and California
lawsuits among the company, OpenGov, Inc. and the other parties thereto,
as well as any other legal proceedings that may be instituted against
the company in connection with the business combination; (5) the
inability to maintain the listing of the company’s common stock on The
Nasdaq Stock Market; (6) changes in applicable laws or regulations; (7)
the possibility that the company may be adversely affected by other
economic, business, and/or competitive factors; (8) any government
shutdown which impacts the ability of the company’s customers to
purchase its products and services; and (9) other risks and
uncertainties included in the company’s Annual Report on Form 10-K for
the year ended December 31, 2018, including those under “Risk Factors”
therein, and in the company’s other filings with the SEC. 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.

Presentation of Predecessor and Successor Financial Results

As a result of the business combination, GTY is the acquirer for
accounting purposes and Bonfire, CityBase, eCivis, Open Counter,
Questica, and Sherpa are the acquirees and accounting predecessor. The
Company’s financial statement presentation distinguishes the Company’s
presentations into two distinct periods, the period up to the closing
date (labeled “Predecessor”) and the period including and after that
date (labeled “Successor”). The merger was accounted for as a business
combination using the acquisition method of accounting, and the
Successor financial statements reflect a new basis of accounting that is
based on the fair value of the net assets acquired.

Use of Non-GAAP Revenues

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 a financial
measure that has not been prepared in accordance with GAAP: non-GAAP
revenues.

GTY’s managements uses non-GAAP revenues internally in analyzing its
financial results and believes this metric is useful to investors, as a
supplement to the corresponding GAAP measure, 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 revenue may differ from the items excluded from, or included
in, similar non-GAAP revenue used by other companies in the same
industry. Non-GAAP revenue 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
non-GAAP revenue to revenue. A reconciliation of non-GAAP revenue has
been provided.

Non-GAAP revenues are defined as GAAP revenues adjusted for the impact
of purchase accounting resulting from its business combination. As the
business combination occurred on February 19, 2019, GTY believes
reviewing the operating results for the three months ended March 31,
2019 by combining the revenue of the Predecessor period from January 01,
2019 – February 18, 2019 and the Successor period from February 19, 2019
– March 31, 2019 (“S/P Combined 2019”) is more useful in discussing the
overall operating performance when compared to the same period in the
prior year.

Below is a reconciliation of non-GAAP pro forma as adjusted revenues to
pro forma revenues.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190513005243/en/