Tyler Technologies — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues reached $647.6 million, an 8.7% increase year-over-year compared to Q3 2025.
• Recurring revenues were $568.8 million, up 11.0% year-over-year, representing 87.8% of total revenues.
• Subscription revenues grew 15.3% to $462.6 million; SaaS revenues specifically increased 21.2% to $242.2 million, while transaction revenues rose 9.5% to $220.4 million.
• Annualized recurring revenue (ARR) was $2.28 billion, up 11.0% year-over-year.
• GAAP operating income was $117.0 million, up 19.5% year-over-year; Non-GAAP operating income was $182.1 million, up 14.8%.
• GAAP net income was $95.1 million ($2.33 per diluted share), up 12.7% year-over-year; Non-GAAP net income was $143.4 million ($3.52 per diluted share), up 10.0%.
• Adjusted EBITDA was $192.7 million, up 13.4% year-over-year.
• Cash flows from operations were $282.5 million, up 10.7% year-over-year.
• Free cash flow reached a record $277.0 million, up 11.9% year-over-year.

Guidance and Future Outlook:

• Full-year 2026 total revenue guidance is set between $2.535 billion and $2.565 billion.
• Full-year 2026 Non-GAAP diluted earnings per share guidance is $12.95 to $13.20.
• Full-year 2026 free cash flow margin guidance is 26% to 28%.
• Full-year 2026 research and development expense guidance is $245 million to $250 million.
• Full-year 2026 capital expenditures guidance is $20 million to $22 million, including $5 million in capitalized software development costs.
• Full-year 2026 net interest income guidance is $15 million to $17 million.
• Management expressed confidence in a strong finish to 2026 and long-term growth initiatives underpinning "Tyler 2030" objectives.

Business Segments and Product Lines:

• The company reported approximately 300 deals containing AI sold across its client base, driven by its government-grade AI strategy.
• On July 30, 2026, the company completed the acquisition of CODY Systems, a public safety SaaS and data management provider, for approximately $27.7 million in cash.
• Transaction-based revenue growth accelerated to 9.5%, excluding the impact of the Texas payments contract wind-down, which would have been 14.2%.

Market and Competitive Landscape:

• Strong SaaS bookings reflect healthy public sector demand driven by continued government investment in digital modernization.
• Tyler Technologies serves over 50,000 installations across 16,000 client locations in all 50 U.S. states, Canada, the Caribbean, Australia, and other international locations.
• The company is an S&P 500 large-cap growth and value company.

Risks and Challenges:

• Risks include potential negative impacts from changes in client budgets or regulatory environments affecting IT spending.
• Cyber-attacks, security vulnerabilities, and evolving AI usage pose risks to business and competitive position.
• Integration of acquired businesses carries risks of unanticipated costs and operational disruptions.
• AI commercialization faces risks regarding client adoption, monetization, and regulatory changes.
• General economic, political, and market conditions, including inflation and interest rate changes, may affect financial forecasts.

Management Commentary and Tone:

• Executive Chair and CEO Lynn Moore described results as "solid," citing double-digit recurring revenue growth, robust margin expansion, strong bookings, and record quarterly free cash flow.
• CFO Brian Miller highlighted the strength and resilience of the recurring revenue model and the company's financial flexibility to invest in growth and pursue acquisitions.
• Management emphasized disciplined capital allocation and confidence in long-term growth initiatives.

Other Key Points:

• The company repurchased 1,148,389 shares of common stock during the quarter for approximately $379 million.
• Year-to-date share repurchases totaled approximately 8.5% of outstanding shares.
• Approximately $1.37 billion remains under previously announced share repurchase authorizations.
• The company repaid $600 million in convertible senior notes due 2026 during the nine months ended September 30, 2026.
• The company issued $1.4375 billion in convertible senior notes due 2031 during the nine months ended September 30, 2026.
• Deferred revenue increased to $846.3 million at September 30, 2026, from $780.8 million at December 31, 2025.
• Goodwill increased to $2.77 billion at September 30, 2026, from $2.59 billion at December 31, 2025.