Tyler Technologies (TYL) Q1 2026 earnings summary

Executive summary

• Total revenues for Q1 2026 reached $613.5 million, up 8.6–9% year-over-year, with SaaS revenues up 23–23.5% and recurring revenues up 10.4%.

• Free cash flow more than doubled year-over-year to $102.8 million, with margin expanding to 16.8%.

• Annualized recurring revenue (ARR) grew 10–10.4% to $2.15 billion.

• Major acquisition of For The Record completed for $223 million, enhancing AI-driven offerings; $600 million convertible debt repaid at maturity.

• Significant share repurchases executed, totaling 2.5% of shares outstanding YTD, with $250 million in Q1 and $100 million in April.

Financial highlights

• Recurring revenues accounted for 87.8% of total Q1 revenues, with subscription revenues up 14.6% and transaction revenues up 6.4%.

• Non-GAAP operating margin improved to 27.2%, and gross margin rose to 51.3% non-GAAP and 48.3% GAAP.

• Adjusted EBITDA for Q1 2026 was $177.3 million, up from $162.3 million in Q1 2025.

• Maintenance revenues declined 3–3.5% due to SaaS migration.

• Cash flow from operations was $107.3 million, up from $56.2 million in the prior year.

Outlook and guidance

• 2026 revenue guidance: $2.535–$2.575 billion, implying 9.5% growth; SaaS revenue expected to grow 21.5–23.5%.

• Non-GAAP diluted EPS guidance: $12.50–$12.75.

• Free cash flow margin expected between 26–28%.

• R&D expense projected at $245–$250 million; capital expenditures at $18–$20 million.

• Confidence in achieving 2030 targets, including 80%+ cloud migration and $1B+ free cash flow.