Tyler Technologies (TYL) Citizens JMP Technology Conference 2026 summary

Margin expansion and cloud transition

• Targeting 30%+ non-GAAP operating margins by 2030, with progress ahead of schedule and cloud transition as a key driver.

• Migration from on-premises to AWS public cloud is nearly complete, with ongoing version consolidation and sunsetting of older software versions.

• Cloud-optimized products and scale-driven AWS pricing are expected to further improve margins.

• Transaction business margins are rising as focus shifts from commodity payment processing to embedded payments within software products.

• Professional services growth is being limited, and AI is being used to reduce implementation effort, positively impacting margins.

Transaction business growth and revenue mix

• Transaction business, excluding Texas, is growing at a 10%-12% rate, in line with long-term targets.

• Growth is supported by successful payment integrations with local government software and some pricing increases from partners.

• New business models include transaction-fee-based SaaS, such as with California State Parks, providing stable and recurring revenue.

• Transaction growth benefits from software deals structured around transaction fees rather than traditional SaaS fees.

Customer migration and competitive dynamics

• Customer migration to the cloud rarely leads to competitive displacement; most use the transition to expand their relationship.

• Upsell opportunities arise as customers consolidate ancillary systems with the same provider during cloud migration.

• Example: Los Angeles County's migration resulted in significant SaaS and ARR uplift, plus new product adoption.

• AI is not yet a major factor in sales or migration decisions; public sector clients are cautious and value proven solutions.