Tyler Technologies (TYL) investor relations material

Executive summary

• Q3 revenue was $647.6M, up 8.7% YoY, or 10.2% excluding the Texas payments contract; ARR reached $2.28B, up 11%.

• SaaS adoption and bookings, a growing pipeline, and approximately 300 AI-containing deals supported long-term growth initiatives; quarterly free cash flow was a record $277.0M.

Financial highlights

• Recurring revenue was $568.8M, up 11.0% YoY, or 12.8% excluding Texas; it represented 87.8% of revenue.

• GAAP operating income rose 19.5% to $117.0M; GAAP net income was $95.1M and diluted EPS was $2.33. Non-GAAP net income was $143.4M and diluted EPS was $3.52.

• Non-GAAP operating margin was 28.1%, up 150 bps; non-GAAP gross margin was 51.9%.

• Free cash flow was $277.0M, up 11.9%, with a 42.8% margin; operating cash flow was $282.5M.

• Nine-month revenue was $1.906B, up 8.5%; nine-month operating cash flow was $514.1M.

Outlook and guidance

• FY 2026 revenue guidance is $2.535B-$2.565B; non-GAAP diluted EPS guidance is $12.95-$13.20, and free cash flow margin guidance is 26%-28%.

• FY 2026 growth expectations: subscriptions 13%-16%, SaaS 21.5%-22.5%, transaction 6%-8% (11%-13% excluding Texas), maintenance down 3%-5%, professional services 0%-2%, and other revenue 15%-17%.

• The long-term SaaS growth target remains 20% through 2030; management expects flips to contribute increasingly, with more flip signings anticipated in 2027.

• Broad Cloud Living rollouts are on track for early 2027; agentic AI revenue contribution is expected no earlier than H2 2027, and no 2027 revenue-growth guidance was issued.

• FY 2026 capital spending guidance is $20M-$22M, including $5M of capitalized software development; R&D expense guidance is $245M-$250M.