Tyler Technologies (TYL) Piper Sandler's Growth Frontiers Conference summary

Market overview and growth drivers

• Focuses exclusively on public sector software, serving local, state, and federal governments with mission-critical applications like property tax, public safety, and ERP.

• Market growth is stable, with mid-single digit rates (5%-7%), driven mainly by replacement of aging systems and increasing digital modernization needs.

• Demand is accelerating for digital services, remote work capabilities, citizen self-service, and better data analytics.

• Governments are increasingly seeking cloud-based solutions for improved security, efficiency, and to address IT workforce shortages.

SaaS transition progress and strategy

• Transitioned from on-premise to cloud-first strategy in 2019, partnering with AWS and prioritizing SaaS sales.

• 90% of new business now comes from cloud offerings, with only a few products still available as licenses.

• By 2030, expects 85% of on-prem customers to migrate to the cloud; 2023 marked the crossover where SaaS revenue surpassed license and maintenance revenue.

• Public safety and federal/state agencies, previously slow to adopt cloud, are now rapidly shifting due to improved experiences and cybersecurity concerns.

Version consolidation and migration incentives

• Historically supported multiple product versions, increasing support and development costs; cloud aims for single-version deployment.

• Major products like Enterprise ERP and Courts & Justice will have 95% of customers on current or near-current versions by year-end.

• SaaS migrations typically yield 1.7–2x revenue uplift compared to maintenance; SaaS growth has exceeded 20% for 14 straight quarters.

• Incentives for migration have focused on education and feature availability, with future plans to use pricing and support limitations to encourage remaining holdouts.