Tyler Technologies ((TYL)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Tyler Technologies’ recent earnings call painted a picture of strong performance, marked by impressive revenue and SaaS growth, alongside successful acquisitions. The company expressed a positive outlook for 2026, despite facing challenges such as a decline in new SaaS ARR, the impact of the Texas payments contract wind down, and a slight drop in cash flow.
Strong Revenue Growth
Tyler Technologies reported a robust increase in total revenues for the quarter, reaching $595.9 million, which represents a 9.7% growth. SaaS revenues saw a significant rise of 20%, amounting to $199.8 million, while transaction revenues climbed 11.5% to $201.3 million. This growth underscores the company’s strong market position and successful execution of its business strategies.
Record SaaS Bookings
The company achieved record SaaS bookings, which grew 5% sequentially and 5.8% year-over-year, setting a new all-time high. This achievement highlights Tyler Technologies’ continued success in expanding its SaaS offerings and capturing market demand.
Public Safety Market Success
Tyler Technologies made significant strides in the public safety market, securing key contracts with Coweta County, Georgia, and the City of Columbia, Missouri. These wins demonstrate the company’s ability to deliver valuable solutions to public sector clients.
Successful Acquisitions
The company’s acquisitions, including Emergency Networking and MyGov, have been instrumental in driving growth. Notably, Emergency Networking secured a statewide win in Pennsylvania, showcasing the strategic value of these acquisitions.
Positive Outlook for 2026
Looking ahead to 2026, Tyler Technologies expects SaaS revenues to grow by approximately 20%, with total recurring revenue growth projected to be within the long-term target range of 10% to 12%. This optimistic outlook reflects the company’s confidence in its growth strategies and market opportunities.
Challenges: Decline in New SaaS ARR and Texas Payments Contract Wind Down
Despite the positive performance, the company faced challenges, including a 39% decline in new SaaS ARR due to tough comparisons with last year’s large deals. Additionally, the Texas payments contract wind down is expected to significantly reduce revenues from $39-$40 million this year to $4-$5 million next year.
Cash Flow Decline
Cash flows from operations and free cash flow were solid at $255.2 million and $247.6 million, respectively, but experienced a slight year-over-year decline due to the timing of working capital changes.
Forward-Looking Guidance
During the earnings call, Tyler Technologies provided updated guidance for the remainder of 2025 and beyond. The company projects total revenues between $2.335 billion and $2.360 billion, with a midpoint growth of around 10%. Non-GAAP diluted EPS is expected to range from $11.30 to $11.50, with a non-GAAP tax rate of 22.5%. Looking into 2026, Tyler anticipates SaaS revenue growth of approximately 20% and total recurring revenue growth within a long-term target range of 10% to 12%, excluding the Texas payments contract wind-down impact.
In summary, Tyler Technologies’ earnings call highlighted a strong financial performance with significant revenue and SaaS growth, successful acquisitions, and a positive outlook for 2026. Despite facing challenges such as a decline in new SaaS ARR and the Texas payments contract wind down, the company remains optimistic about its future prospects, driven by strategic initiatives and market expansion.