Tyler Technologies, Inc. (TYL) Earnings

Tyler Technologies, Inc.

TYL · NYSE

Symbol: TYL
Type: Stock
Sector: Technology
Industry: Computer Software: Prepackaged Software
Country: North America
Exchange: NYSE

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.

Key Issues

Bullish view

Recurring revenue grew 11% year over year to $568.8 million, and cloud migration remains a stated growth driver. Large deals closing later than planned could represent timing delays rather than weaker underlying demand.

Bearish view

Management trimmed the high end of its SaaS outlook after several large deals closed later than planned. Revenue also missed estimates, leaving uncertainty over how quickly delayed deals convert into growth.

Analyst Consensus

See all

Buy

17 analysts

$394

Current

—

Low

$430

Average

—

High

Average target implies +9.05% versus the current price.

Earnings History

BeatMissNo estimate

Dec 2026upcoming

Next quarter

Consensus is $2.65 EPS for Dec 2026 across 7 estimates, ranging $2.50 to $2.82.

TYL Sep 2026

Reported Oct 28, 2026

: 3.70%
: +3.61%

: $2.70
: $2.80
: —
: $647.57M

Reported results

: $647.57M; from $595.88M
: 49.14%; from 47.23%
: $117.04M; from $97.93M
: 18.07%; from 16.43%
: $95.07M; from $84.39M
: $2.33; from $1.93

Highlights

Recurring revenue grew 11.0% year over year to $568.8 million, or 87.8% of total revenue; SaaS revenue increased 21.2% to $242.2 million.
Quarterly results were revenue of $647.6 million, up 8.7% year over year and 0.4% from Q2; GAAP operating income rose 19.5% year over year to $117.0 million.
EPS context: the supplied consensus comparison lists $2.80 versus $2.70, a 3.7% beat, but does not specify the measure. Tyler reported GAAP diluted EPS of $2.33 and non-GAAP diluted EPS of $3.52.
Margins expanded: GAAP operating margin was 18.1%, up 1.7 percentage points year over year; non-GAAP operating margin reached 28.1%, up 1.5 points.
Free cash flow set a quarterly record at $277.0 million, up 11.9% year over year; operating cash flow was $282.5 million, up 10.7%.
Transaction revenue increased 9.5% to $220.4 million, or 14.2% excluding the Texas payments contract wind-down; ARR rose 11.0% to $2.28 billion.
Capital returns and acquisitions included repurchases of 1.15 million shares for about $379 million and the $27.7 million cash acquisition of CODY Systems; the April FTR acquisition cost $211.2 million net of cash acquired.
2026 outlook remains revenue of $2.535 billion to $2.565 billion, non-GAAP diluted EPS of $12.95 to $13.20, and free cash flow margin of 26% to 28%.

Analysis

Tyler delivered steady top-line growth with stronger profitability and cash generation in Q3 FY2026. Revenue of $647.6 million increased 8.7% from a year ago and 0.4% from Q2; GAAP operating income rose 19.5% year over year to $117.0 million, while net income increased 12.7% to $95.1 million. The supplied consensus line reports EPS of $2.80 versus $2.70, a 3.7% beat, but does not identify the EPS basis. The release and filing separately report GAAP diluted EPS of $2.33 and non-GAAP diluted EPS of $3.52, so those figures should not be treated as directly comparable to that consensus figure.

The print was defined by the continuing shift toward subscriptions, operating leverage, and record free cash flow. Subscription revenue grew 15.3%, led by SaaS growth of 21.2%; recurring revenue reached 87.8% of sales. The richer SaaS mix helped lift GAAP operating margin to 18.1% from 16.4% a year ago. Free cash flow rose 11.9% to $277.0 million, with management citing earnings growth and improved working capital. Transaction revenue growth accelerated to 9.5%, though the Texas payments contract wind-down remains a drag. Tyler highlighted strong SaaS bookings and roughly 300 AI-containing deals sold to date, while maintaining its full-year 2026 guidance.

Subscription mix and demand

SaaS expansion drove the quarter’s recurring growth: SaaS revenue rose 21.2% to $242.2 million, while total subscription revenue increased 15.3% to $462.6 million. Management attributed SaaS growth to new clients, expansions, on-premises conversions, and annual price increases.
Recurring base reached $568.8 million, up 11.0% year over year and representing 87.8% of revenue. ARR was $2.28 billion, also up 11.0%.
Transaction activity grew 9.5% to $220.4 million, accelerating from the prior quarter; growth was 14.2% excluding the $8.3 million impact of the Texas payments contract wind-down. New transaction clients and higher online payment and e-filing volumes contributed.
Demand signals included management’s report of strong SaaS bookings and a growing sales pipeline. Tyler said approximately 300 deals containing AI had been sold across its client base to date.

Operating leverage

GAAP profitability improved faster than revenue: operating income increased 19.5% to $117.0 million, lifting operating margin to 18.1% from 16.4% a year earlier. Gross margin rose to 49.1% from 47.2%, primarily on the mix shift toward higher-margin SaaS.
Adjusted measures showed the same direction: non-GAAP operating income grew 14.8% to $182.1 million and non-GAAP operating margin increased to 28.1% from 26.6%. Adjusted EBITDA rose 13.4% to $192.7 million.
Investment and cost pressure continued alongside margin gains. Research and development expense increased 22% to $63.3 million, reflecting product investment and resources redeployed from service delivery; higher merchant fees and hosting costs partly offset the benefit of SaaS mix.
Per-share results require care in comparison: GAAP net income was $95.1 million and GAAP diluted EPS was $2.33, versus $84.4 million and $1.93 a year ago. Non-GAAP net income was $143.4 million and non-GAAP diluted EPS was $3.52, versus $130.4 million and $2.97.

Cash flow and conversion

Record free cash flow was $277.0 million, up 11.9% year over year, with a 42.8% margin versus 41.5%. Operating cash flow was $282.5 million, up 10.7%.
Working capital helped the quarter: management cited improved working capital performance alongside earnings growth. Cash flow from operating asset and liability changes was $99.4 million, compared with $59.3 million a year ago.
Liquidity and investment stood at $788.2 million in cash and cash equivalents plus $116.5 million in available-for-sale investments at September 30. Tyler also had no revolver borrowings and $1.0 billion of available capacity.

Segment performance

Enterprise Software revenue increased 11.8% to $491.5 million, with segment operating income up 9.7% to $191.2 million. Subscription growth, particularly SaaS, was partly offset by higher merchant fees, personnel and hosting costs, and lower maintenance and professional services revenue.
Platform Technologies revenue was essentially flat at $155.7 million. Segment operating income rose 20.0% to $32.2 million, helped by lower G&A and development costs; transaction revenue remains affected by the Texas contract wind-down.

Capital allocation and outlook

Share repurchases totaled 1.15 million shares for approximately $379 million during the quarter. The company said it had repurchased about 8.5% of outstanding shares year to date; the filing reported approximately $1.33 billion of remaining authorization as of October 28.
Acquisitions added to the public-sector portfolio: Tyler acquired CODY Systems on July 30 for approximately $27.7 million in cash. The April acquisition of the remaining interest in For the Record cost $211.2 million net of cash acquired; recent acquisitions contributed $13.9 million to the year-over-year quarterly revenue increase.
Full-year 2026 guidance was maintained at revenue of $2.535 billion to $2.565 billion, non-GAAP diluted EPS of $12.95 to $13.20, and free cash flow margin of 26% to 28%. The company also expects R&D expense of $245 million to $250 million and capital expenditures of $20 million to $22 million.