Tyler Technologies (TYL) The 44th Annual William Blair Growth Stock Conference summary

Company overview and strategy

• Focuses exclusively on the public sector with the broadest product suite and largest customer base in the market.

• Recurring revenues have grown over 20% in five years, with SaaS revenue near 30% growth.

• Operates in a fragmented market with under 10% share, offering significant growth runway.

• Transitioned from on-premise to cloud, emphasizing product integration and data sharing across jurisdictions.

• Maintains high client retention rates (98-99%) and strong free cash flow.

Cloud transition and financial targets

• 2023 marked an inflection point: cloud revenues surpassed on-premises, with margin compression trough reached.

• Targets for 2025: $2.3–$2.4B revenue, high 80s% recurring revenue mix; by 2030: ~$4B revenue, >90% recurring.

• Operating margin expected to rise from 23% (2023) to >30% by 2030, mainly from cloud transition and data center exit.

• Free cash flow margin projected to grow from high teens to high 20s% as tax impacts moderate.

• Recurring revenue CAGR of 10–12% expected organically through 2030.

Growth drivers and market expansion

• Growth pillars: upselling/cross-selling to installed base, expanding TAM (state/federal), cloud transition, and payments business.

• NIC acquisition in 2021 expanded state and payments presence; payments now a major focus.

• Payments business expected to generate >$400M free cash flow by 2030.

• Integration of payments platform with software automates reconciliation and provides differentiated value.

• Early stages of cross-selling payments to existing customers, with strong recent deal momentum.