Tyler Technologies (TYL) Q4 2025 earnings summary

Executive summary

• Q4 2025 revenues reached $575.2 million, up 6.3% year-over-year, with recurring revenue and free cash flow surpassing expectations.

• SaaS revenues grew 20.2% in Q4, with annual SaaS revenues up 20.6% and annualized recurring revenue reaching $2.1 billion, up 10.9%.

• Free cash flow for Q4 was $236.9 million, up 9.7%, with a margin of 41.2%; full-year free cash flow reached $620.8 million, margin 26.6%.

• Public sector demand remains robust, with healthy budgets, active pipelines, and increased adoption of AI-enabled solutions.

• Strategic focus on cloud transition, leveraging client base, transaction business growth, and new markets.

Financial highlights

• Q4 non-GAAP operating margin was 24.1%; full-year margin was 26%, up 150 bps.

• Q4 non-GAAP net income was $115.1 million ($2.64 per share), up 7.8% year-over-year.

• Full-year 2025 total revenues were $2.33 billion, up 9.1% year-over-year; recurring revenues accounted for 87–89.4% of total.

• Adjusted EBITDA for 2025 was $650.4 million, up from $567.8 million in 2024.

• Maintenance revenues declined 4.9% in Q4 and 3.8% for the year, reflecting migration to SaaS.

Outlook and guidance

• 2026 revenue guidance: $2.5–$2.55 billion, implying ~8.3% growth at midpoint; excluding Texas contract impact, growth is 10%.

• GAAP diluted EPS expected between $8.36–$8.61; non-GAAP EPS between $12.40–$12.65.

• Free cash flow margin expected between 26%–28%; R&D expense guided at $242–$247 million.

• Subscription revenue to grow 12%–15%; SaaS revenue 20.5%–22.5%; transaction revenue 5%–7% (10%–12% excluding Texas contract impact).

• Maintenance revenue to decline 5%–7%; professional services to grow 3%–5%; license revenue to grow 15%–17%.