Tyler Technologies (NYSE: TYL) adds $1.5B buyback on strong Q2 free cash flow
Rhea-AI Filing Summary
Tyler Technologies reported second quarter 2026 results showing continued growth in its public-sector software business. Total revenues were $645.1 million, up 8.2% year over year, with recurring revenues of $559.5 million (86.7% of total) and subscription revenues of $453.7 million, up 12.0%. SaaS revenues grew 21.7% to $230.6 million, marking 22 consecutive quarters of at least 20% SaaS growth. GAAP net income was $93.5 million, or $2.23 per diluted share, up 10.5%, while non-GAAP diluted EPS was $3.08. Free cash flow reached $118.5 million, up 34.7% and a record for a second quarter.
The company continued to deploy and raise capital. It acquired For The Record for approximately $212.7 million in cash, issued $1.4 billion of 0.50% convertible senior notes due 2031 with $1.2 billion in net proceeds, and put in place a new 5-year $1.0 billion revolving credit facility. Tyler repurchased 1,622,762 shares for about $505 million in the quarter and its board approved a new share repurchase plan authorizing up to $1.5 billion of Class A Common Stock, leaving approximately $1.745 billion of total repurchase capacity as of July 29, 2026. Full-year 2026 guidance calls for total revenues of $2.535–$2.575 billion, non-GAAP diluted EPS of $12.95–$13.20, and free cash flow margin of 26%–28%.
Positive
- Total revenues grew 8.2% year over year to $645.1 million, with subscription revenues up 12.0% and SaaS revenues up 21.7%, indicating sustained growth in high-value recurring business.
- Free cash flow increased 34.7% to $118.5 million, a record second quarter level, enhancing Tyler’s ability to fund growth initiatives and shareholder returns.
- Capital return was significant, with 1,622,762 shares repurchased for approximately $505 million and a new $1.5 billion authorization, leaving about $1.745 billion of remaining buyback capacity.
- Liquidity expanded through a $1.4 billion 0.50% convertible senior notes offering generating $1.2 billion in net proceeds and a new 5-year $1.0 billion unsecured revolving credit facility.
Negative
- None.
Filing Explained
Although Tyler describes the new authorization as reflecting long-term confidence, it is a maximum capacity rather than a commitment: effective immediately, it has no fixed expiration, requires no purchases, and may be modified, suspended, or terminated.
8-K Event Classification
2 items: 2.02, 8.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 8.01
Other Events
Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Key Figures
Total revenues Q2 2026: $645.1 million
SaaS revenues Q2 2026: $230.6 million
GAAP diluted EPS Q2 2026: $2.23
+5 more
8 metrics
Total revenues Q2 2026
$645.1 million
Up 8.2% versus second quarter 2025
SaaS revenues Q2 2026
$230.6 million
Grew 21.7% year over year; 22nd consecutive quarter of 20%+ SaaS growth
GAAP diluted EPS Q2 2026
$2.23
GAAP earnings per diluted share, up 10.5% vs Q2 2025
Non-GAAP diluted EPS Q2 2026
$3.08
Non-GAAP earnings per diluted share, up 0.9% vs Q2 2025
Free cash flow Q2 2026
$118.5 million
Free cash flow, up 34.7% and a record for a second quarter
New share repurchase authorization
$1.5 billion
Board-approved Repurchase Plan for Class A Common Stock on July 24, 2026
Shares repurchased in Q2 2026
1,622,762 shares
Repurchased for approximately $505 million under prior authorization
Convertible senior notes due 2031
$1.4 billion
0.50% convertible senior notes issued May 14, 2026; $1.2 billion net proceeds
Key Terms
Annualized recurring revenue (ARR), convertible senior notes, capped call transactions, free cash flow margin, +2 more
6 terms
Annualized recurring revenue (ARR) financial
"Annualized recurring revenue (ARR) was $2.24 billion, up 8.2%."
Annualized recurring revenue (ARR) is the predictable amount of income a business expects to earn from ongoing customer subscriptions or contracts over a year. It provides a clear picture of the company's steady revenue stream, much like estimating the annual salary based on consistent monthly pay. Investors use ARR to gauge the company's growth and stability over time.
convertible senior notes financial
"completed a $1.4 billion offering of 0.50% convertible senior notes due in 2031."
Convertible senior notes are a type of loan that a company issues to investors, which can be turned into company shares later on. They are called "senior" because they are paid back before other debts if the company runs into trouble. This allows investors to earn interest like a loan but also have the chance to own part of the company if its value rises.
capped call transactions financial
"entered into capped call transactions, which increased the initial effective conversion price"
Capped call transactions are agreements where investors buy options that give them the chance to benefit if a stock's price goes up, but with a limit on how much they can gain. This helps protect them from paying too much if the stock's price rises a lot, similar to having a maximum limit on a reward. They matter because they help investors manage risk while still allowing some upside potential.
free cash flow margin financial
"Free cash flow margin | 26% to 28%"
Free cash flow margin is a measure of how much cash a company generates relative to its sales, showing the percentage of revenue that remains after covering operating expenses and investments in growth. It indicates how efficiently a company turns its sales into available cash that can be used for things like paying dividends, reducing debt, or expanding the business. A higher margin suggests better financial health and more flexibility to invest or return value to shareholders.
Rule 10b5-1 plans regulatory
"may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases"
A Rule 10b5-1 plan is a prearranged schedule that lets company insiders buy or sell stock at set times or prices, set up when they do not possess confidential information. It acts like an automatic thermostat for trades, reducing the risk that otherwise-timed transactions could be accused of insider trading. Investors care because such plans increase transparency about insider activity and signal when insider trades are routine rather than reactive to private news.
non-GAAP financial measures financial
"financial measures that have not been prepared in accordance with GAAP and are therefore considered non-GAAP financial measures."
Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.
Earnings Snapshot
Total revenues: $645.1 million · Guidance included
second quarter 2026
Total revenues
$645.1 million
up 8.2% vs Q2 2025
GAAP diluted EPS
$2.23
up 10.5% vs Q2 2025
Non-GAAP diluted EPS
$3.08
up 0.9% vs Q2 2025
Free cash flow
$118.5 million
up 34.7% vs Q2 2025
Annualized recurring revenue (ARR)
$2.24 billion
up 8.2% vs Q2 2025
Guidance
For full year 2026, the company guides to total revenues of $2.535 billion to $2.575 billion, non-GAAP diluted EPS of $12.95 to $13.20, free cash flow margin of 26% to 28%, research and development expense of $245 million to $250 million, capital expenditures of $18 million to $20 million including $6 million of capitalized software development costs, and net interest income of $19 million to $21 million.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What were Tyler Technologies (TYL) Q2 2026 revenues and growth?
Tyler Technologies reported Q2 2026 revenue of $645.1 million, up 8.2% from Q2 2025. Recurring revenues reached $559.5 million, also up 8.2%, and comprised 86.7% of total revenue, while subscription revenues were $453.7 million, up 12.0% year over year.
How profitable was Tyler Technologies (TYL) in Q2 2026?
In Q2 2026, Tyler generated GAAP net income of $93.5 million, or $2.23 per diluted share, up 10.5%. Non-GAAP net income was $129.0 million, with non-GAAP diluted earnings per share of $3.08, up 0.9% compared with the prior-year quarter.
What is Tyler Technologies’ (TYL) financial guidance for full year 2026?
For 2026, Tyler guides to total revenues of $2.535–$2.575 billion and non-GAAP diluted EPS of $12.95–$13.20. The company also targets free cash flow margin of 26%–28%, R&D expense of $245–$250 million, and capital expenditures of $18–$20 million.
How fast are Tyler Technologies’ (TYL) SaaS and recurring revenues growing?
In Q2 2026, Tyler’s SaaS revenues grew 21.7% to $230.6 million, marking 22 consecutive quarters of 20%+ SaaS growth. Recurring revenues were $559.5 million, up 8.2%, and annualized recurring revenue (ARR) reached $2.24 billion, also up 8.2% year over year.
What recent financing and acquisition moves did Tyler Technologies (TYL) make?
Tyler completed a $1.4 billion offering of 0.50% convertible senior notes due 2031, generating $1.2 billion in net proceeds, and secured a new 5-year $1.0 billion revolving credit facility. It also acquired For The Record for approximately $212.7 million in cash.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________
FORM 8-K
_____________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
_____________________________________________
(Exact name of registrant as specified in its charter)
_____________________________________________
| (State or other jurisdiction of incorporation organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
| (Address of principal executive offices) | (City) | (State) | (Zip code) | ||||||||
(972 ) 713-3700
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Title of each class | Trading symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On July 29, 2026, Tyler Technologies, Inc. issued the earnings news release announcing results from operations and financial condition as of June 30, 2026, attached hereto as Exhibit 99.1, which news release is incorporated by reference herein.
Item 8.01 Other Events
On July 29, 2026, Tyler Technologies, Inc. (“Tyler” or “the Company”) announced that on July 24, 2026, its board of directors approved a share repurchase plan with authorization to purchase up to $1.5 billion of its Class A Common Stock, effective immediately (the “Repurchase Plan”). The Repurchase Plan replaces and supersedes any previous authorizations, except that, for the avoidance of doubt, the Company’s Chief Executive Officer and Chief Financial Officer (the “Authorized Officers”) may continue to cause the Company to repurchase any amounts not yet repurchased under previous authorizations.
Repurchases under the Repurchase Plan may be made in the open market or otherwise in such quantities, at such prices, in such manner and on such terms and conditions as the Company’s Authorized Officers determine are in the best interests of the Company. Tyler may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization.
The Repurchase Plan does not have a fixed expiration date, does not obligate Tyler to acquire any particular amount of Class A Common Stock, and may be modified, suspended, or terminated at any time. The Repurchase Plan shall be made in accordance with all applicable laws and regulations in effect from time to time.
A copy of the press release announcing the Repurchase Plan is attached hereto as Exhibit 99.1, which news release is incorporated by reference herein.
| Exhibit number | Exhibit description | |||||||
99.1 | News Release issued by Tyler Technologies, Inc. dated July 29, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded in the Inline XBRL document) | |||||||
| SIGNATURES | |||||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TYLER TECHNOLOGIES, INC. | |||||||||||
| /s/ Brian K. Miller | |||||||||||
July 29, 2026 | By: | Brian K. Miller Executive Vice President and Chief Financial Officer (principal financial officer) | |||||||||
Tyler Technologies Reports Earnings for Second Quarter 2026 and Announces New $1.5 Billion Share Repurchase Program
•SaaS revenues grew 21.7% and SaaS bookings reached a new quarterly high
•Expanded repurchase authorization reflects long-term confidence
PLANO, Texas – July 29, 2026 – Tyler Technologies, Inc. (NYSE: TYL), a large-cap growth and value S&P 500 company, today announced financial results for the second quarter ended June 30, 2026.
"Our second quarter results reflect strong execution and performance across our key financial and operational measures, highlighted by solid recurring revenue growth and a record second quarter for free cash flow," said Lynn Moore, Tyler's executive chair, president and chief executive officer. "SaaS revenues accelerated 21.7%, marking 22 consecutive quarters of 20% or greater SaaS growth. Public sector demand remains healthy, reflecting sustained modernization priorities for the public sector that translated into record SaaS and total bookings. Our raised 2030 financial targets, announced at our June Investor Day, reflect our continued strong execution and confidence in achieving our long-term vision. Our share repurchase program highlights that confidence, as we have repurchased 5.6% of our outstanding shares year-to-date and recently expanded our share repurchase authorization by an additional $1.5 billion," concluded Moore.
Second Quarter 2026 Financial Highlights (all comparisons are to the second quarter of 2025):
Revenues
•Total revenues were $645.1 million, up 8.2%.
•Recurring revenues were $559.5 million, up 8.2%, and comprised 86.7% of total revenues.
•Subscription revenues were $453.7 million, up 12.0%.
◦SaaS revenues grew 21.7% to $230.6 million.
◦Transaction revenues grew 3.5% to $223.1 million.
•Annualized recurring revenue (ARR) was $2.24 billion, up 8.2%.
Earnings/EBITDA
•GAAP operating income was $95.1 million. Non-GAAP operating income was $165.7 million, up 4.8%.
•GAAP net income was $93.5 million, or $2.23 per diluted share, up 10.5%. Non-GAAP net income was $129.0 million, or $3.08 per diluted share, up 0.9%.
•Adjusted EBITDA was $176.4 million, up 4.3%.
Cash Flow
•Cash flows from operations were $124.4 million, up 26.5%.
•Free cash flow was $118.5 million, up 34.7%.
Tyler Technologies Reports Earnings
for Second Quarter 2026
July 29, 2026
Page 2
"We delivered strong top and bottom-line results for the second quarter highlighted by solid recurring revenue growth and free cash flow of $118.5 million, up nearly 35%, and a record for a second quarter," said Brian Miller, Tyler's executive vice president and chief financial officer. "During the quarter, we strategically deployed significant capital through the acquisition of For the Record for $213 million in cash and the use of $505 million for share repurchases. We strengthened our balance sheet through our highly successful $1.4 billion convertible debt offering in May and ended the quarter with more than $1 billion in cash and investments, providing substantial financial flexibility to support our growth initiatives while continuing to return value to shareholders," concluded Miller.
Additionally, on July 24, 2026, Tyler’s Board of Directors approved a share repurchase plan with authorization to purchase up to $1.5 billion of our Class A Common Stock, effective immediately (the “Repurchase Plan”). The Repurchase Plan underscores our ongoing confidence in Tyler’s business, strategic objectives, and long-term opportunities. It also reflects the view that Tyler’s shares continue to be undervalued. Our consistently durable free cash flow generation has allowed us to opportunistically return capital to shareholders, especially in periods of undervaluation, while also investing for sustained growth.
The Repurchase Plan replaces and supersedes any previous authorizations, except that, for the avoidance of doubt, we may continue to repurchase any amounts not yet repurchased under previous authorizations. Repurchases may be made in the open market or otherwise in such quantities, at such prices, in such manner and on such terms and conditions as management determines are in the best interests of the company. We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization.
The Repurchase Plan does not have a fixed expiration date, does not obligate us to acquire any particular amount of Class A Common Stock, and may be modified, suspended, or terminated at any time. The Repurchase Plan shall be made in accordance with all applicable laws and regulations in effect from time to time. As of July 29, 2026, we have remaining authorization from our Board of Directors to repurchase up to approximately $1.745 billion of our common stock.
Recent Business Highlights
•On April 14, we completed the acquisition of For The Record for approximately $212.7 million in cash. For The Record represents our third largest acquisition to date and enhances our justice portfolio by bringing advanced legal-grade speech-to-text and real-time, multilingual transcription technology powered by AI.
•On May 14, we completed a $1.4 billion offering of 0.50% convertible senior notes due in 2031. In connection with the offering, we entered into capped call transactions, which increased the initial effective conversion price to $655.77. Net proceeds from the offering, after capped call and other transaction fees were $1.2 billion.
•On May 28, we entered into a new 5-year $1.0 billion unsecured revolving credit facility, replacing our previous $700 million facility.
•We repurchased 1,622,762 shares of our common stock during the quarter for approximately $505 million under our previously announced repurchase authorization.
Tyler Technologies Reports Earnings
for Second Quarter 2026
July 29, 2026
Page 3
Financial Outlook for 2026
As of July 29, 2026, Tyler Technologies is providing the following guidance for the full year 2026:
Guidance for 2026 | Range | ||||
Total revenues | $2.535 billion to $2.575 billion | ||||
Non-GAAP diluted earnings per share | $12.95 to $13.20 | ||||
Free cash flow margin | 26% to 28% | ||||
Research and development expense | $245 million to $250 million | ||||
Capital expenditures | $18 million to $20 million | ||||
| Capitalized software development costs included in capex | $6 million | ||||
Net interest income | $19 million to $21 million | ||||
Tyler Technologies has not reconciled forward-looking full-year non-GAAP financial measures to their most directly comparable GAAP measures, as permitted by item 10(e)(1)(i)(B) of Regulation S-K. Such reconciliations would require unreasonable efforts at this time to estimate and quantify with a reasonable degree of certainty various necessary GAAP components, including for example those related to stock-based compensation, acquisition transactions, tax items or others that may arise during the year. These components and other factors could materially impact the amount of the future directly comparable GAAP measures, which may differ significantly from their non-GAAP counterparts.
Conference Call
Prepared remarks, the quarterly earnings presentation providing additional information and analysis, and supplemental materials can be found at the Financials section of Tyler's investor relations website. Tyler Technologies will hold a Q&A conference call on Thursday, July 30, 2026, at 8:30 a.m. ET. Participants can pre-register for the teleconference here. Alternatively, participants can join the teleconference by dialing 833-461-5787 with the meeting ID 411 755 212.
The live audio webcast and archived replay can also be accessed at the Events & Presentations section of Tyler's investor relations website.
About Tyler Technologies, Inc.
Tyler Technologies (NYSE: TYL) is a leading provider of technology solutions purpose-built exclusively for the public sector. Tyler’s end-to-end solutions empower local, state, and federal government entities to operate efficiently and transparently with residents and each other. By connecting data and processes across disparate systems, Tyler’s solutions strengthen the core operations of government and help agencies turn insight into action for their communities. With more than 50,000 installations across 16,000 client locations, Tyler serves clients in all 50 states, Canada, the Caribbean, Australia, and other international locations. Tyler has been recognized numerous times for growth and innovation, including on Government Technology’s GovTech 100 list. More information about Tyler Technologies, an S&P 500 company headquartered in Plano, Texas, can be found at tylertech.com.
Tyler Technologies Reports Earnings
for Second Quarter 2026
July 29, 2026
Page 4
Non-GAAP Financial Measures
Tyler Technologies has provided in this press release financial measures that have not been prepared in accordance with generally accepted accounting principles (GAAP) and are therefore considered non-GAAP financial measures. This information includes non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP earnings per diluted share, EBITDA, adjusted EBITDA, free cash flow, and free cash flow margin. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating Tyler’s ongoing operational performance because they provide additional insight in comparing results from period to period while isolating the effects of some items that vary from period to period without correlation to core operating performance. Tyler believes the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures. EBITDA is net income before interest expense, other income, income taxes, depreciation, and amortization. Non-GAAP and adjusted financial measures discussed above exclude share-based compensation expense, employer portion of payroll taxes on employee stock transactions, expenses associated with amortization of intangibles arising from business combinations, acquisition-related expenses, restructuring costs and other, gain on remeasurement of equity investment, and non-recurring items in other income, net. Annualized recurring revenue (ARR) is calculated by annualizing the current quarter's recurring revenues from subscriptions and maintenance.
Tyler currently uses a non-GAAP tax rate of 23.0%. This rate is based on Tyler's estimated annual GAAP income tax rate forecast, adjusted to account for items excluded from GAAP income in calculating Tyler's non-GAAP income, as well as significant non-recurring tax adjustments. The non-GAAP tax rate used in future periods will be reviewed periodically to determine whether it remains appropriate in consideration of factors including Tyler's periodic annual effective tax rate calculated in accordance with GAAP, changes resulting from tax legislation, changes in the geographic mix of revenues and expenses, and other factors deemed significant. Due to differences in tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to Tyler's estimated annual tax rate as described above, the estimated tax rate on non-GAAP income may differ from the GAAP tax rate and from Tyler's actual tax liabilities.
Non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial information prepared in accordance with GAAP. The non-GAAP measures used by Tyler Technologies may be different from non-GAAP measures used by other companies. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, which has been provided in the financial statement tables included below in this press release.
Forward-looking Statements
This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical in nature and typically address future or anticipated events, trends, expectations or beliefs with respect to our financial condition, results of operations or business. Forward-looking statements often contain words such as “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates,” “plans,” “intends,” “continues,” “may,” “will,” “should,” “projects,” “might,” “could” or other similar words or phrases. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. We believe there is a reasonable basis for our forward-looking statements, but they are inherently subject to risks and uncertainties and actual results could differ materially from the expectations and beliefs reflected in the forward-looking statements. We presently consider the following to be among the important
Tyler Technologies Reports Earnings
for Second Quarter 2026
July 29, 2026
Page 5
factors that could cause actual results to differ materially from our expectations and beliefs: (1) changes in the budgets or regulatory environments of our clients, including local, state and federal government agencies, that could negatively impact information technology spending; (2) disruption to our business and harm to our competitive position resulting from cyber-attacks, evolving use of artificial intelligence (“AI”), security vulnerabilities and software updates, or changes in our ability to access third-party software and services; (3) our ability to protect client information from security breaches or misuse through AI and to provide uninterrupted operations of data centers; (4) our ability to achieve growth or operational synergies through the integration of acquired businesses, while avoiding unanticipated costs and disruptions to existing operations; (5) material portions of our business require the Internet infrastructure to be adequately maintained; (6) our ability to actively monitor developments in AI regulation and ethical standards as we expect that future changes in the regulatory landscape may affect our product development timelines, compliance costs, and market opportunities related to AI; (7) our ability to achieve our financial forecasts due to various factors, including project delays by our clients, reductions in transaction size, fewer transactions, delays in delivery of new products or releases or a decline in our renewal rates for service agreements; (8) general economic, political and market conditions, including inflation and changes in interest rates; (9) technological and market risks associated with the development of new technologies, products or services or of new versions of existing or acquired products or services; (10) competition in the industry in which we conduct business and the impact of competition on pricing, client retention and pressure for new products or services; (11) the ability to attract and retain qualified personnel and dealing with rising labor costs, the loss or retirement of key members of management or other key personnel; and (12) costs of compliance and any failure to comply with government and stock exchange regulations. These factors and other risks that affect our business are described in our filings with the Securities and Exchange Commission, including the detailed “Risk Factors” contained in our most recent annual report on Form 10-K and quarterly report on Form 10-Q. We expressly disclaim any obligation to publicly update or revise our forward-looking statements.
(Comparative results follow)
Contact: Hala Elsherbini
Senior Director, Investor Relations
Tyler Technologies, Inc.
972-713-3770
hala.elsherbini@tylertech.com
Source: Tyler Technologies
#TYL_Financial
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TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(Unaudited)
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Subscriptions | $ | 453,724 | $ | 405,075 | $ | 883,469 | $ | 780,064 | |||||||||||||||
| Maintenance | 105,810 | 112,123 | 214,684 | 224,924 | |||||||||||||||||||
| Professional services | 63,166 | 58,612 | 123,973 | 122,662 | |||||||||||||||||||
| Other | 22,396 | 20,307 | 36,473 | 33,632 | |||||||||||||||||||
| Total revenues | 645,096 | 596,117 | 1,258,599 | 1,161,282 | |||||||||||||||||||
| Cost of revenues: | |||||||||||||||||||||||
| Subscriptions, maintenance, and professional services | 306,783 | 292,595 | 600,330 | 570,648 | |||||||||||||||||||
| Amortization of software development | 5,579 | 5,505 | 11,203 | 10,884 | |||||||||||||||||||
| Amortization of acquired software | 8,532 | 9,319 | 17,516 | 18,613 | |||||||||||||||||||
| Other | 17,145 | 15,514 | 26,059 | 20,872 | |||||||||||||||||||
| Total cost of revenues | 338,039 | 322,933 | 655,108 | 621,017 | |||||||||||||||||||
| Gross profit | 307,057 | 273,184 | 603,491 | 540,265 | |||||||||||||||||||
| Sales and marketing expense | 39,851 | 36,312 | 78,648 | 72,785 | |||||||||||||||||||
| General and administrative expense | 93,733 | 76,601 | 177,698 | 156,053 | |||||||||||||||||||
| Research and development expense | 62,832 | 50,842 | 122,559 | 98,686 | |||||||||||||||||||
| Amortization of other intangibles | 15,546 | 13,833 | 29,679 | 27,972 | |||||||||||||||||||
| Operating income | 95,095 | 95,596 | 194,907 | 184,769 | |||||||||||||||||||
| Interest expense | (2,974) | (1,262) | (4,040) | (2,508) | |||||||||||||||||||
| Gain on remeasurement of equity investment | 25,048 | — | 25,048 | — | |||||||||||||||||||
| Other income, net | 3,462 | 8,179 | 11,138 | 15,542 | |||||||||||||||||||
| Income before income taxes | 120,631 | 102,513 | 227,053 | 197,803 | |||||||||||||||||||
| Income tax provision | 27,119 | 17,886 | 52,361 | 32,124 | |||||||||||||||||||
| Net income | $ | 93,512 | $ | 84,627 | $ | 174,692 | $ | 165,679 | |||||||||||||||
| Earnings per common share: | |||||||||||||||||||||||
| Basic | $ | 2.25 | $ | 1.96 | $ | 4.20 | $ | 3.84 | |||||||||||||||
| Diluted | $ | 2.23 | $ | 1.93 | $ | 4.17 | $ | 3.76 | |||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||
| Basic | 41,619 | 43,163 | 41,564 | 43,174 | |||||||||||||||||||
| Diluted | 41,854 | 43,929 | 41,853 | 44,016 | |||||||||||||||||||
TYLER TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Amounts in thousands, except per share data)
(Unaudited)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| Reconciliation of non-GAAP gross profit and margin | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| GAAP gross profit | $ | 307,057 | $ | 273,184 | $ | 603,491 | $ | 540,265 | ||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||
| Add: Share-based compensation expense included in cost of revenues | 9,504 | 8,891 | 18,978 | 17,605 | ||||||||||||||||||||||
| Add: Amortization of acquired software | 8,532 | 9,319 | 17,516 | 18,613 | ||||||||||||||||||||||
| Non-GAAP gross profit | $ | 325,093 | $ | 291,394 | $ | 639,985 | $ | 576,483 | ||||||||||||||||||
| GAAP gross margin | 47.6 | % | 45.8 | % | 47.9 | % | 46.5 | % | ||||||||||||||||||
| Non-GAAP gross margin | 50.4 | % | 48.9 | % | 50.8 | % | 49.6 | % | ||||||||||||||||||
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| Reconciliation of non-GAAP operating income and margin | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| GAAP operating income | $ | 95,095 | $ | 95,596 | $ | 194,907 | $ | 184,769 | ||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||
| Add: Share-based compensation expense | 43,662 | 38,302 | 80,821 | 75,962 | ||||||||||||||||||||||
| Add: Employer portion of payroll tax related to employee stock transactions | 437 | 1,055 | 1,229 | 2,119 | ||||||||||||||||||||||
| Add: Acquisition-related costs | 2,087 | — | 2,311 | 33 | ||||||||||||||||||||||
| Add: Restructuring costs and other | 326 | 24 | 5,815 | 48 | ||||||||||||||||||||||
| Add: Amortization of acquired software | 8,532 | 9,319 | 17,516 | 18,613 | ||||||||||||||||||||||
Add: Amortization of other intangibles | 15,546 | 13,833 | 29,679 | 27,972 | ||||||||||||||||||||||
| Non-GAAP adjustments subtotal | 70,590 | 62,533 | 137,371 | 124,747 | ||||||||||||||||||||||
| Non-GAAP operating income | $ | 165,685 | $ | 158,129 | $ | 332,278 | $ | 309,516 | ||||||||||||||||||
| GAAP operating margin | 14.7 | % | 16.0 | % | 15.5 | % | 15.9 | % | ||||||||||||||||||
| Non-GAAP operating margin | 25.7 | % | 26.5 | % | 26.4 | % | 26.7 | % | ||||||||||||||||||
TYLER TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Amounts in thousands, except per share data)
(Unaudited)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| Reconciliation of non-GAAP net income and earnings per share | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| GAAP net income | $ | 93,512 | $ | 84,627 | $ | 174,692 | $ | 165,679 | ||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||
| Add: Total non-GAAP adjustments to operating income | 70,590 | 62,533 | 137,371 | 124,747 | ||||||||||||||||||||||
| Less: Gain on remeasurement of equity investment | (25,048) | — | (25,048) | — | ||||||||||||||||||||||
| Add: Non-recurring items in other income, net | 1,406 | — | 1,406 | — | ||||||||||||||||||||||
| Less: Income tax impact | (11,424) | (19,249) | (26,019) | (40,450) | ||||||||||||||||||||||
| Non-GAAP net income | $ | 129,036 | $ | 127,911 | $ | 262,402 | $ | 249,976 | ||||||||||||||||||
| GAAP earnings per diluted share | $ | 2.23 | $ | 1.93 | $ | 4.17 | $ | 3.76 | ||||||||||||||||||
| Non-GAAP earnings per diluted share | $ | 3.08 | $ | 2.91 | $ | 6.27 | $ | 5.68 | ||||||||||||||||||
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| Detail of share-based compensation expense | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Cost of revenues | $ | 9,504 | $ | 8,891 | $ | 18,978 | $ | 17,605 | ||||||||||||||||||
| Operating expenses | 34,158 | 29,411 | 61,843 | 58,357 | ||||||||||||||||||||||
| Total share-based compensation expense | $ | 43,662 | $ | 38,302 | $ | 80,821 | $ | 75,962 | ||||||||||||||||||
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| Reconciliation of EBITDA and adjusted EBITDA | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| GAAP net income | $ | 93,512 | $ | 84,627 | $ | 174,692 | $ | 165,679 | ||||||||||||||||||
| Amortization of other intangibles | 15,546 | 13,833 | 29,679 | 27,972 | ||||||||||||||||||||||
| Depreciation and amortization included in cost of revenues, sales and marketing expense, general and administrative expense, and research and development expense | 19,295 | 20,322 | 39,018 | 40,531 | ||||||||||||||||||||||
| Interest expense | 2,974 | 1,262 | 4,040 | 2,508 | ||||||||||||||||||||||
| Gain on remeasurement of equity investment | (25,048) | — | (25,048) | — | ||||||||||||||||||||||
| Other income, net | (3,462) | (8,179) | (11,138) | (15,542) | ||||||||||||||||||||||
| Income tax provision | 27,119 | 17,886 | 52,361 | 32,124 | ||||||||||||||||||||||
| EBITDA | $ | 129,936 | $ | 129,751 | $ | 263,604 | $ | 253,272 | ||||||||||||||||||
| Share-based compensation expense | 43,662 | 38,302 | 80,821 | 75,962 | ||||||||||||||||||||||
| Acquisition-related costs | 2,087 | — | 2,311 | 33 | ||||||||||||||||||||||
| Employer portion of payroll tax related to employee stock transactions | 437 | 1,055 | 1,229 | 2,119 | ||||||||||||||||||||||
| Lease restructuring costs and other | 326 | 24 | 5,815 | 48 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 176,448 | $ | 169,132 | $ | 353,780 | $ | 331,434 | ||||||||||||||||||
TYLER TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Amounts in thousands, except per share data)
(Unaudited)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| Reconciliation of free cash flow | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Net cash provided by operating activities | $ | 124,411 | $ | 98,311 | $ | 231,673 | $ | 154,469 | ||||||||||||||||||
| Less: additions to property and equipment | (5,051) | (5,487) | (8,288) | (7,822) | ||||||||||||||||||||||
| Less: investment in software development | (845) | (4,850) | (2,105) | (10,400) | ||||||||||||||||||||||
| Free cash flow | $ | 118,515 | $ | 87,974 | $ | 221,280 | $ | 136,247 | ||||||||||||||||||
| Free cash flow margin | 18.4 | % | 14.8 | % | 17.6 | % | 11.7 | % | ||||||||||||||||||
TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
| June 30, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 895,353 | $ | 1,015,400 | |||||||
| Accounts receivable, net | 724,866 | 638,798 | |||||||||
| Short-term investments | 74,682 | 81,800 | |||||||||
| Prepaid expenses and other current assets | 98,416 | 84,142 | |||||||||
| Income tax receivable | 23,805 | 23,748 | |||||||||
| Total current assets | 1,817,122 | 1,843,888 | |||||||||
| Accounts receivable, long-term portion | 10,420 | 5,968 | |||||||||
| Operating lease right-of-use assets | 38,374 | 35,602 | |||||||||
| Property and equipment, net | 159,462 | 160,355 | |||||||||
| Other assets: | |||||||||||
| Software development costs, net | 53,642 | 68,371 | |||||||||
| Goodwill | 2,754,742 | 2,590,013 | |||||||||
| Other intangibles, net | 846,206 | 780,414 | |||||||||
| Non-current investments | 45,232 | 60,698 | |||||||||
| Other non-current assets | 88,376 | 93,599 | |||||||||
| Total assets | $ | 5,813,576 | $ | 5,638,908 | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued liabilities | $ | 360,920 | $ | 365,346 | |||||||
| Operating lease liabilities | 11,221 | 9,598 | |||||||||
| Deferred revenue | 797,435 | 780,838 | |||||||||
| Current portion of convertible senior notes due 2026, net | — | 599,663 | |||||||||
| Total current liabilities | 1,169,576 | 1,755,445 | |||||||||
| Convertible senior notes due 2031, net | 1,408,691 | — | |||||||||
| Deferred revenue, long-term | 19,486 | 20,988 | |||||||||
| Deferred income taxes | 108,624 | 95,063 | |||||||||
| Operating lease liabilities, long-term | 35,118 | 33,347 | |||||||||
| Other long-term liabilities | 34,850 | 31,276 | |||||||||
| Total liabilities | 2,776,345 | 1,936,119 | |||||||||
| Shareholders' equity | $ | 3,037,231 | $ | 3,702,789 | |||||||
| Total liabilities and shareholders' equity | $ | 5,813,576 | $ | 5,638,908 | |||||||
TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||||||||
| Net income | $ | 93,512 | $ | 84,627 | $ | 174,692 | $ | 165,679 | ||||||||||||||||||
| Adjustments to reconcile net income to cash provided by operations: | ||||||||||||||||||||||||||
| Depreciation and amortization | 35,812 | 34,322 | 74,761 | 68,943 | ||||||||||||||||||||||
| Gains from sale of investments | (1) | (1) | (4) | — | ||||||||||||||||||||||
| Share-based compensation expense | 43,662 | 38,302 | 80,821 | 75,962 | ||||||||||||||||||||||
| Operating lease right-of-use assets expense | 3,569 | 2,572 | 5,892 | 4,860 | ||||||||||||||||||||||
| Deferred income tax benefit | 17,653 | — | 31,866 | (11,080) | ||||||||||||||||||||||
| Gain on remeasurement of equity investment | (25,048) | — | (25,048) | — | ||||||||||||||||||||||
| Other | 33 | 39 | 33 | 39 | ||||||||||||||||||||||
| Changes in operating assets and liabilities, exclusive of effects of acquired companies | (44,781) | (61,550) | (111,340) | (149,934) | ||||||||||||||||||||||
| Net cash provided by operating activities | 124,411 | 98,311 | 231,673 | 154,469 | ||||||||||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||||||||
| Additions to property and equipment | (5,051) | (5,487) | (8,288) | (7,822) | ||||||||||||||||||||||
| Purchase of marketable security investments | (50,123) | (35,293) | (51,481) | (107,286) | ||||||||||||||||||||||
| Proceeds and maturities from marketable security investments | 11,902 | 32,528 | 73,760 | 34,284 | ||||||||||||||||||||||
| Investment in software development | (845) | (4,850) | (2,105) | (10,400) | ||||||||||||||||||||||
| Cost of acquisitions, net of cash acquired | (214,271) | (206) | (214,291) | (18,230) | ||||||||||||||||||||||
| Other | 21 | 549 | 13 | 526 | ||||||||||||||||||||||
| Net cash used by investing activities | (258,367) | (12,759) | (202,392) | (108,928) | ||||||||||||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||||||||
| Repayment of convertible senior notes due 2026 | — | — | (600,000) | — | ||||||||||||||||||||||
| Proceeds from issuance of convertible senior notes due 2031 | 1,437,500 | — | 1,437,500 | — | ||||||||||||||||||||||
| Purchase of capped call transactions | (187,163) | — | (187,163) | — | ||||||||||||||||||||||
| Payment of debt issuance costs | (31,704) | — | (31,704) | — | ||||||||||||||||||||||
| Purchase of treasury shares | (504,942) | (1,605) | (755,005) | (1,605) | ||||||||||||||||||||||
| Payment of employee taxes paid for withheld shares upon equity award settlement, net of proceeds from exercise of stock options | (5,769) | (4,681) | (22,134) | (3,155) | ||||||||||||||||||||||
| Contributions from employee stock purchase plan | 5,377 | 5,352 | 9,178 | 9,322 | ||||||||||||||||||||||
| Other | — | (2,900) | — | (7,377) | ||||||||||||||||||||||
| Net cash provided (used) by financing activities | 713,299 | (3,834) | (149,328) | (2,815) | ||||||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | 579,343 | 81,718 | (120,047) | 42,726 | ||||||||||||||||||||||
| Cash and cash equivalents at beginning of period | 316,010 | 705,729 | 1,015,400 | 744,721 | ||||||||||||||||||||||
| Cash and cash equivalents at end of period | $ | 895,353 | $ | 787,447 | $ | 895,353 | $ | 787,447 | ||||||||||||||||||