Tyler Technologies (TYL) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues rose 7.3% year-over-year to $541 million, with organic growth at 6.5%.

• SaaS revenues surged 23.2%, marking 14 consecutive quarters of 20%+ growth and now 97% of new software contract value.

• Recurring revenues comprised 83% of total, with ARR reaching $1.80 billion, up 8.4% year-over-year.

• GAAP net income increased 37.9% to $67.7 million; non-GAAP net income up 20.9% to $103.9 million.

• Free cash flow improved to $48.6 million, reversing a prior-year outflow.

Financial highlights

• Subscription revenues grew 12.1% (organic 11.8%) to $333.7 million; transaction revenues up 3.8% to $177.7 million.

• Adjusted EBITDA rose 14.7% to $144 million; GAAP operating margin 14.4%, non-GAAP 24.5%.

• GAAP EPS was $1.57; non-GAAP EPS $2.40, up 19.4% year-over-year.

• Cash flow from operations was $64.3 million; cash and equivalents at $250.7 million.

• Backlog as of June 30, 2024, was $2.09 billion, up 10% year-over-year.

Outlook and guidance

• 2024 revenue guidance: $2.12–$2.15 billion, implying ~9% organic growth.

• GAAP diluted EPS expected at $5.76–$5.96; non-GAAP diluted EPS at $9.25–$9.45.

• Free cash flow margin projected at 18–20%; capital expenditures expected at $50–$52 million.

• SaaS revenue expected to grow in the low twenties percent; transactions in low double digits.

• Cash on hand, operating cash flow, and credit are sufficient for at least the next twelve months.