H. Lynn Moore
CEO, President & Director at Tyler Technologies
Thanks, Brian. First, I want to provide you with an update on the NIC acquisition and our progress in the first three months post closing, and then we'll move on to a review of the quarter's results. As you know, we completed the acquisition of NIC during the second quarter on April 21. With a purchase price of approximately $2.3 billion, this was by far our largest acquisition to date and our first acquisition of a public company. NIC is a leading provider of digital government solutions and payment processing that serves more than 7,100 federal, state and local government agencies across the nation. We believe that the combination of NIC and Tyler provides tremendous opportunities for incremental growth in both businesses. The combined company is the public sector market leader for payment solutions and we plan to use NIC's robust payment platform to expand our local government payments business. We also have an opportunity to leverage NIC's strong relationships and state enterprise contracts to deliver Tyler solutions at the state level, including our MicroPact entellitrak platform. We discussed our vision for those opportunities on our investor call in early June. I'm extremely pleased with the progress we've made toward these objectives in the three months that NIC has been a part of Tyler. Our teams have prioritized our opportunities and are very engaged, working well together in a regular cadence. Our pre-acquisition impressions regarding the high degree of compatibility between the cultures of the two organizations have thus far proven to be accurate and leaders in both organizations have commented on how natural the combination feels.
Our payments teams are working together and have been very encouraged as we learn more about each company's strengths and how complementary they are. As we noted on our June call, the state of Florida is a great example of the kind of opportunities we're pursuing. NIC is in the process of implementing a statewide payment processing solution for the state government in Florida. And the contract allows for local governments in the state, more than 400 of which are Tyler clients, to piggyback on that contract and we are actively pursuing those opportunities. For the last two months, we've also been conducting weekly showcases to familiarize NIC state enterprise managers with Tyler's broad portfolio of solutions and to surface opportunities in their states. We have already developed a growing joint pipeline that is generating active engagements with prospects in NIC states. And finally, our teams are actively working together to jointly establish the data and analytics platform for Connected Communities, leveraging our respective strengths, including our Socrata Data & Insights platform and NIC's Gov2Go citizen portal. Together, NIC and Tyler can now provide the most expansive set of capabilities for citizens to interact with government at all levels. Turning to the quarter. NIC, like Tyler, had a very strong second quarter as they continue to benefit from the recovery from the pandemic with a growing demand for citizens and businesses to interact digitally with government. NIC also recorded higher than expected revenues from its TourHealth and pandemic unemployment initiatives, although those lower-margin revenues are currently expected to taper off in the second half of the year. Although NIC's results are only included in Tyler's consolidated financials from the date of the acquisition on April 21, for the full quarter, NIC's core revenues, excluding revenues from TourHealth and pandemic unemployment initiatives, grew 23.5%.
We're also very pleased to report that in late June, NIC was selected as one of two vendors to provide the Internal Revenue Service with a digital payment processing solution, which will allow individual and business taxpayers to securely pay their federal taxes. The contract has an initial 6-month term with four 1-year renewal options and revenue under the contract is expected to begin in January of 2022. The actual revenue will be driven by the number of taxpayers who choose to pay online and who choose to use the NIC platform, and we expect to aggressively market our solution. We currently estimate annual gross revenue under the contract to be between $40 million and $60 million with annual net revenue of $5 million to $7 million after interchange and merchant fees. This contract significantly expands NIC's payment processing at the federal level and underscores the strength of NIC's platform and leadership in public sector payments. Moving on to our consolidated results. Our second quarter was very strong, reflecting the inclusion of the results of NIC from April 21 with both core Tyler and NIC operations exceeding expectations. Total revenues grew 49.1% driven by the inclusion of NIC, as well as the acceleration of Tyler's organic growth to 12.4%. Recurring revenues comprised 79% of our second quarter revenues and were led by 133% growth in subscription revenues with the inclusion of NIC. Excluding NIC revenues, subscription revenue growth was robust at 24%. Software licenses and services revenues also rebounded from the low point in last year's second quarter, growing 17% or 7.6% excluding NIC. As expected, our margins were down compared to second quarter last year as some costs and lower margin revenues, like billable travel, that declined in 2020 due to COVID pandemic began to return. Margins were also impacted by the inclusion of NIC and particularly by the continuation of their lower-margin COVID-related revenues.
As a result, our non-GAAP operating margin declined 100 basis points to 26.5%. Bookings in the second quarter grew 50% to approximately $464 million with the inclusion of NIC. Excluding NIC, bookings rose 17.5%. Our largest deal in the quarter was a combination license and SaaS arrangement with the Colorado Department of Regulatory Agencies valued at approximately $9.3 million for our entellitrak Regulatory, Socrata Data & Insights, and SceneDoc mobile field inspection solutions as well as NIC's electronic payment solution. And all those solutions will be hosted in AWS. This deal is a great example of our ability to add value by offering multiple Tyler products, many of which came from recent acquisitions, into a single deal, enhancing the competitiveness of solutions like entellitrak. We also signed a large public safety license contract with the Lake County Sheriff's Office in Illinois for our CAD, RMS, mobile, field reporting, Brazos eCitation, SoftCode process service and Socrata Data & Insight solutions valued at approximately $4.1 million. In addition, we signed four other license deals across multiple product suites, each with contract values greater than $1 million. SaaS contracts represented 65% of our new contract software value in the second quarter. Our largest SaaS contract was a 5-year deal with Dubuque, Iowa, for our Munis ERP and EnerGov civic services solutions valued at approximately $4.6 million. We also signed SaaS contracts for our Munis ERP solution with Charles County, Maryland, valued at approximately $4 million and DeSoto, Texas, valued at approximately $3.5 million. We also signed a SaaS deal for our Tyler Supervision solution with Riverside County, California, valued at approximately $3.3 million. This is the largest deal to date for our Supervision product, which came to Tyler through the acquisition of CaseloadPRO a little less than three years ago. And in fact, the value of the single contract is greater than the total annual revenues of that business when we acquired it. In addition, we signed nine other SaaS arrangements during the quarter, each with a total contract value of greater than $1 million. In addition to the IRS payment processing contract, during the second quarter, NIC signed extensions of its state enterprise contracts for digital government and payment processing services with the states of Oregon and Idaho. NIC also signed a 5-year SaaS agreement for its RxGov prescription drug monitoring program solution with the province of New Brunswick, Canada, marking the first international deployment for that solution.
We're pleased to see the increased market activity and trends that reflect our markets are rebounding back toward pre-COVID levels. Now I'd like for Brian to provide more detail on the results for the quarter.