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NASDAQ: EGOV nicusa

NASDAQ: EGOV nicusa.com. Forward -looking statements. “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

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NASDAQ: EGOV nicusa

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  1. NASDAQ: EGOV nicusa.com

  2. Forward-looking statements “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995 Any statements contained in this release that do not relate to historical or current facts constitute forward-looking statements. These statements include NIC’s financial guidance for the current fiscal year, including statements regarding the potential for growth in revenues and income, and statements regarding continued implementation of NIC's business model and its development of new products and services. Forward-looking statements are subject to inherent risks and uncertainties and there can be no assurance that such statements will prove to be correct. There are a number of important factors that could cause actual results to differ materially from those suggested or indicated by such forward-looking statements. These include, among others, NIC’s ability to successfully integrate into its operations recently awarded eGovernment contracts; NIC's ability to successfully increase the adoption and use of eGovernment services; the success of the company in signing contracts with new states and government agencies, including continued favorable government legislation; NIC's ability to develop new services; existing states and agencies adopting those new services; acceptance of eGovernment services by businesses and citizens; competition; and general economic conditions (including the recent deterioration in general economic conditions) and the other important cautionary statements and risk factors described in NIC's 2008 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2009, and in NIC’s Quarterly Reports on Form 10-Q filed with the SEC in 2009. NIC does not intend to update these forward-looking statements and undertakes no duty to any person to provide any such update under any circumstances.

  3. Company Overview • NIC develops eGovernment services under contracts with 23 states & 2 federal agencies • Typical contract: • Long-term • Enterprise-wide • Self-funded: we collect fees from end-users for processing transactions instead of directly charging governments • 18 years of eGovernment leadership • NIC created outsourced eGovernment industry in 1992 • Headquartered in Kansas City area • 600 + employees in 26 local offices nationwide • Founders continue to run the company • Our growth comes from • Building new services and driving usage of existing services • Winning new portal contracts

  4. NIC delivers end-to-end eGovernment value * NIC’s rigorous security practices include PCI-DSS compliance, third-party audits and SAS 70 Type II certification for payment processing.

  5. Long term contacts = high visibility and barriers to exit: NIC has renewed every contract extension and competitive rebid NIC is the industry leader

  6. Buying audience: • Governors • Chiefs of Staff • CIOs• Budget Officers• Key Agency Heads Why governments hire NIC: high return on investment

  7. NIC leverages successful foundation to drive growth

  8. Self-funded: low-risk, high-reward model • Modest upfront investment: payback typically within 12 months • Transaction-based: >75% of revenues from business-to-government transactions • Highly predictable: >85% of portal revenues are recurring, secured by long-term contracts • Consistent growth: 10- 15% annual same-state revenue growth • Portal gross margin goal: mid 40%

  9. Balance sheet & capital structure December 31, 2009 Cash and investments $ 68.6 M Working capital $ 55.2 M Days sales outstanding (DSO) 9 Long-term/short-term debt none Stock price appreciation + $82M in special dividends = 110% total shareholder return from 2007 – 2009 • More than $100M in special dividends paid since 2007: • $47M ($0.75 /share) special dividend paid 02/2007 • $16M ($0.25/share) special dividend paid 02/2008 • $19M ($0.30/share) special dividend paid 02/2009 • $19M ($0.30/share) special dividend paid 02/2010 • ≈63M diluted shares outstanding • Insiders and management own more than 10% of TSO • 2 – 3 % total equity compensation stock overhang

  10. Organic growth + market opportunity = long-term earnings potential Recent business wins require investment in 2010

  11. Investment Highlights • NIC created and leads the outsourced eGovernment industry with unmatched expertise sought after by government • Proven self-funded business model • Steady, recurring revenues and organic growth secured by long-term, enterprise-wide contracts • Opportunity for new wins with state, local and federal governments • High return on invested capital and history of returning capital to shareholders

  12. Q & A + contacts Steve Kovzan Chief Financial Officer 913-754-7007 stevek@nicusa.com Nancy Beaton Director of Communications & Investor Relations 913-754-7054 nbeaton@nicusa.com NASDAQ: EGOV www.nicusa.com/investors

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