H. Lynn Moore
President and Chief Executive Officer at Tyler Technologies
Thanks, Brian. Our third quarter results were exceptionally strong, building on the momentum we established in the first half of the year. This was our first full quarter including NIC's results, and it was our best quarter ever by most financial measures. We achieved new quarterly highs in revenues, non-GAAP EPS, free cash flow, adjusted EBITDA, bookings and backlog. Total revenues grew 60.9% with organic growth of 7.6%. As a result of the surge in the Delta variant, NIC's COVID-19-related revenues from TourHealth and pandemic unemployment initiatives were significantly above plan at $43.3 million.
We had expected those revenues, which have relatively low margins to wind down in the second half of the year, but we now expect they will continue into the first half of 2022. NIC's core revenues grew 5% in the quarter. Recurring revenues comprised over 80% of our quarterly revenues for the first time and were led by 183% growth in subscription revenues. Excluding NIC revenues, subscription revenue growth was robust at 23.9%, reflecting our accelerating shift to the cloud. We have now achieved greater than 20% subscription revenue growth in 55 of the last 63 quarters. Software licenses and services revenues grew 13.9% or 2% excluding NIC.
As expected, our margins compressed compared to last year's third quarter. Some expenses like trade shows and employee health claims as well as lower margin revenues like billable travel that declined in 2020 due to COVID pandemic have begun to return this year. Margins were also impacted by the inclusion of NIC and particularly, by the continuation of their lower-margin COVID initiative revenue. As a result, our non-GAAP operating margin declined 330 basis points to 25.3%. Excluding NIC's COVID initiative revenues and related costs, our non-GAAP operating margin was 26.8%. Bookings reached a record high in the third quarter at approximately $601 million, more than double last year's third quarter. Excluding NIC, bookings grew 51.9%, with the biggest contributor being the $63 million renewal of our fixed fee e-filing arrangement with the state of Illinois.
We're very pleased to report early success this quarter with joint sales efforts between NIC and Tyler Solutions teams. We signed agreements with the Virginia Department of Housing and Community Development valued at approximately $24 million to provide a digital and call center solution for tenant, landlord and third-party filing of rent relief program claims. We'll also provide administrative dashboards from our Socrata Data & Insight solutions as well as payment processing capabilities. Our largest software deal in the quarter also came from NIC with $6.1 million SaaS contract with the West Virginia Division of Motor Vehicles for digital titling.
This new digital vehicle titling and registration management system will go beyond modernization and revolutionize how the DMV manages vehicles and interacts with businesses and citizens. In addition to the streamlining of nearly every vehicle-related process in place today, many legacy paper processes will be fully replaced with secure digital solutions. The solution utilizes technology to govern and secure the vehicle ownership process, adding security, reducing fraud and providing the flexibility that other state DMV's operations are lacking.
The arrangement, which leverages our state master agreement has an initial term of five years. In addition to the SaaS fees, the agreement will generate estimated transaction revenue of more than $3 million per year. I'd like to also highlight a few more significant deals signed this quarter. We signed appraisal services contracts with the Delaware Counties in New Castle and Kent. In addition, New Castle County selected our iasWorld appraisal solution under a SaaS arrangement. The deals have a combined value of approximately $19 million. Coupled with the appraisal services contract signed last quarter was Sussex County, Tyler will now be performing a property reassessment for the entire state.
Also for our iasWorld Property Tax and Appraisal solution, we signed SaaS arrangements with the regional municipality of Wood Buffalo in Alberta, Canada, valued at approximately $3.1 million. Franklin County, Ohio, valued at approximately $3.5 million and Summit County, Ohio, which also includes our Data & Insights Solutions, valued at approximately $2.9 million. Other major SaaS deals included a $4.5 million contract with Arlington Heights, Illinois for our ERP civic services and payment solutions and a $3.4 million contract with Bayer County, Texas for our Odyssey, SoftCode and Supervision Justice solutions. Our largest perpetual license contract for the quarter was a $5.4 million contract to provide our MicroPact and entellitrak solution to manage COVID vaccination at stations for the U.S. Department of Justice.
We also signed a $2.5 million on-premises license contract with the Commonwealth of the Northern Mariana islands for our Munis ERP and Enterprise Asset Management, ExecuTime and Socrata solutions. We also signed several significant contract renewals with existing clients, including extensions of NIC's state enterprise agreements with the states of Utah and Oklahoma, and a five year renewal of our e-filing arrangement with the state of Illinois, which was expanded to include applications from our Socrata Data and Insights platform. On last quarter's call, we reported that NIC had been selected as one of two vendors to provide the Internal Revenue Service with a digital payment processing solution that would allow taxpayers to securely pay their federal taxes, and that revenue under that contract was expected to begin in January of 2022.
Following the award, three entities filed protest with the GAO. Prior to any ruling on the protest by the GAO, the IRS notified the GAO that it was canceling the two awards, including the award to NIC. While the IRS has not formally terminated NIC's contract, it has issued a stop work order under the contract. The IRS indicated that it will either amend the current solicitation, allowing all bidders to modify their previous submissions and then reevaluate the proposals or terminate the existing solicitation and start the process over with a new procurement in the coming months. The IRS has not yet stated which of these options it will select and we have no information regarding the potential timing of either option. Given these recent developments, we do not expect to recognize any revenue under the IRS award in 2022.
While the specific concerns raised in the protests have not been made public and are not known by Tyler, the decision to cancel the award to NIC was not related to NIC's performance under the contract, its ability to successfully perform under the contract or any allegations of misconduct or improper behavior by NIC. On the M&A front, we completed the acquisitions of VendEngine and Arx during the third quarter. VendEngine is one of the fastest-growing technology companies in North America, operating in more than 230 counties and 32 states. Its leading cloud-based platform provides a comprehensive suite of applications focused on the corrections market, including deposit technologies for commissary, ordering and warehouse management and various informational electronic communications, security, accounting and financial trust management components.
Arx is a cloud-based software platform, which creates accessible technology to enable a modern day police force that is fully transparent, accountable and a trusted resource to the community it serves. The acquisition of Arx allows Tyler to offer a full suite of public safety solutions, including Arx Alert and Arx Community, designed to maximize efficiency and safety for law enforcement officers while increasing transparency and trust building with communities. VendEngine and Arx have combined ARR of approximately $17.5 million and their additions further strengthen Tyler's Justice and Public Safety suites.
Now I'd like for Brian to provide more details on the results of the quarter.