Tyler Technologies (TYL) Q4 2025 earnings summary

Executive summary

• Q4 2025 delivered strong results with total revenues of $575.2 million, up 6.3% year-over-year; recurring revenue and free cash flow exceeded expectations, and SaaS revenue grew 20.2%.

• Annualized recurring revenue reached approximately $2.06 billion, up 10.9%, with recurring revenues comprising up to 89.4% of total revenues.

• Major wins included SaaS contracts with state agencies, large counties, and increased adoption of AI-enabled solutions.

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

• Four strategic acquisitions completed in 2025, including CloudGavel and Edulink; record levels of on-premises to cloud flips.

Financial highlights

• Q4 SaaS revenues grew 20.2% to over $200 million; transaction revenues rose 12.1% to $196.7 million.

• Free cash flow for Q4 reached $236.9 million, with a margin of 41.2%; annual free cash flow was $620.8 million, margin 26.6%.

• Non-GAAP operating margin for Q4 was 24.1%; full-year margin was 26%.

• 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.

Outlook and guidance

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

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

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

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

• Maintenance revenue expected to decline 5–7% in 2026.