Tyler Technologies (TYL) investor relations material

Market positioning and core competencies

• Focuses on long-term relationships with state and local governments, prioritizing customer value over short-term gains.

• Willing to incur initial losses on implementations to secure multi-decade partnerships.

• Conservative, risk-averse market requires incremental improvements and proven ROI for technology adoption.

• Private sector innovation is closely monitored and adapted for public sector use.

• Low churn rate and large install base create significant barriers to entry for competitors.

Technology modernization and AI adoption

• Labor shortages in government are driving demand for automation and AI to replace manual processes.

• AI is deployed in areas like document processing, freeing staff for higher-value tasks.

• Customers are repurposed rather than laid off, addressing workforce gaps.

• Incremental, ROI-driven AI adoption is favored over speculative technology investments.

• Security concerns, especially cyber threats, are the primary driver for cloud migration.

Cloud transition and customer experience

• Cloud migration strategies vary by customer size and sophistication, with timelines ranging from 18 months to five years.

• Early cloud adoption in public safety has reached 100% of new sales in two years.

• Transition incentives include exclusive features, pricing, and additional services; disincentives like higher maintenance fees and reduced support will phase in by 2027–2030.

• Version consolidation is underway, with future control over updates shifting to the provider to improve consistency and margins.

• AWS is highlighted as a key partner, providing technical and business support for cloud scalability.