Brian Miller: Yes. The ARPA funds generally have to be committed by the end of 2024 and spent by the end of 2026. And so the commitments – I mean, largely, I think, at this point across the universe of our customers and prospects, I think the majority of those have been committed probably a strong majority, I think, 80%, 85%, maybe more than that. But committed and an internal commitment and doesn’t necessarily mean that they’ve even started a buying process. So they may have committed funds for a new ERP system, but they haven’t even issued the RFP yet. We’ve said that we believe it is a factor in the strong market conditions we’ve talked about, but not the biggest factor. And so we expect it to continue to be a tailwind of some sort, really through 2026 as those commitments turn into to purchases and then turn into deliveries and revenue recognition for us.
But we don’t expect a big drop-off after that. Most – we think some of the funds used for things like hardware purchases around our school transportation solution that are sort of onetime purchases. But generally, when they’re buying something from us, it creates a recurring revenue stream that they may fund the first two or three years out of ARPA funds, and then they have an ongoing expense with us for a subscription. So, I think it’s a tailwind, not the biggest factor in the market, we’re seeing the one that will continue for a while.
Mark Schappel: Thank you.
Operator: Your next question comes from the line of Terry Tillman from Truist Securities. Please go ahead.
Terry Tillman: Good morning Lynn, Brian, and Hala. Most of my questions have been answered. But one question I still had was, maybe we could talk about traction with AI-powered acquisitions. I think it was called out and it’s on your slide deck. Just kind of curious, I know these were probably small acquisitions, but I’m curious about the revenue size of these products? And maybe kind of stack rank in terms of – in your possession and with your size and scale and go-to-market, how would these opportunities stack up versus maybe what you did in the parks and recreation area or the vend engine and stuff in jails in the recent past? Just trying to better understand how meaningful these could be? Thank you.
Lynn Moore: Yes. Thanks Terry. So, I guess, first of all, like I said, we’re early with these acquisitions. These acquisitions really fit the mold of acquisitions that we’ve done that have been very successful, which is a product differentiator that we can take into our installed base where we’ve got a really commanding position to leverage. I think each one of these three are – have different growth trajectories, which is another one of our criteria is can this grow at a rate faster than Tyler’s overall rate. And I think all three of these clearly ticked that box. I think the acquisition of CSI probably has a little bit bigger near-term market opportunity. The Resource X will drive sufficient – a lot of revenue in its own right, but it’s also going to drive higher win rates for our ERP solutions, which is not necessarily as measurable.
AR Inspect our field operations, new product. Again, we talked about there’s a lot of interest there, a lot of excitement. And I’d expect that to really sort of all of them to outperform our expectations coming in. But based on those the criteria that I sort of originally outlined. So, we’re excited about all three of these. We’re generally excited about every acquisition we do. But we – these are off and running and off to a good start, and we’re already seeing movements in the market based on these three acquisitions, and that’s what’s really appealing to me.
Brian Miller: And collectively, those three are around $4 million of revenues for the quarter. So yes, small compared to Tyler’s total. But interestingly, a couple of those deals we called out were significantly sized deals with large customers. So, the Dallas County CSI, almost $1 million of ARR from the CSI product. So, you see how that – relative to a business group that are collectively doing around $4 million a quarter in revenues, adding single contracts that add $1 million of ARR is off to a nice start.
Terry Tillman: Definitely. Thank you.
Operator: Your next question comes from the line of Alex Zukin from Wolfe Research. Please go ahead.
Alex Zukin: Yes, hi guys. Thanks for taking the question. So, correct me if I’m wrong, but this is, I think, the first time since almost like 2014 that you’ve actually raised the top line guide for the full year after Q1. So, maybe Lynn, just talk about and walk through what’s giving you that confidence to do that? You guys don’t usually do that. Is it improving demand from new arrangements as it flips? Is it transaction revenue expectations? It might be all of the above. It might be the M&A. But like what is driving that incremental confidence and conviction to kind of do something you don’t usually do?
Lynn Moore: Yes, it’s a good point, Alex. And I was actually thinking to myself, when was the last time we’d ever done it, because I couldn’t recall and you did my homework and told me it was 10 years ago. We just come off our management quarterly meetings. We’ve got really good visibility on what we see out there. And I would say it’s improved. I talked earlier about not just the demand in the market, but what we’re seeing for our sales outlook. We’re just seeing a lot of things lining up in a way that gives us that confidence to do it, as you point out, I mean, it’s not something we typically do. We were – I wouldn’t say we were conservative, but we like to not get ahead of our skis. And we’d like to tell you what we’re going to do then we’re going to go do it.
And it’s just – it’s a combination of a lot of factors. I can tell you that for the last couple of years, one of the mantras I’ve been saying within Tyler to not just the management team, but to all the employees, whether it’s in a town hall or what is, I would say, the last couple of years, I have never been more excited about Tyler’s future then I am today. And coming into this year and really the last couple of months, I’ve switched that a little bit. So, I’ve never been more confident in Tyler’s future then I am today. And again, it’s just a lot of things going right. We’re clicking on all cylinders right now, and we’ve got an aligned management team with a singular vision, singular focus. There’s a lot of initiatives going on at Tyler.
I mean we’re not just sitting back. There’s a lot of things going on, but I just like where we sit right now.
