0000860731false00008607312024-10-232024-10-23


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________
FORM 8-K
_____________________________________________

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

October 23, 2024 (October 23, 2024)
Date of Report (Date of earliest event reported)
_____________________________________________
TYLER TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
_____________________________________________
Delaware1-1048575-2303920
(State or other jurisdiction of incorporation organization)(Commission
File Number)		 (I.R.S. Employer Identification No.)
5101 TENNYSON PARKWAYPLANOTexas75024
 (Address of principal executive offices)(City)(State)(Zip code)

(972) 713-3700
(Registrant’s telephone number, including area code)

    Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)
Title of each classTrading symbol
Name of each exchange
on which registered
COMMON STOCK, $0.01 PAR VALUETYLNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

    

Item 2.02     Results of Operations and Financial Condition         
        
On October 23, 2024, Tyler Technologies, Inc. issued the earnings news release announcing results from operations and financial condition as of September 30, 2024, attached hereto as Exhibit 99.1, which news release is incorporated by reference herein.
Exhibit number
 Exhibit description
News Release issued by Tyler Technologies, Inc. dated October 23, 2024
104
Cover Page Interactive Data File (embedded in the Inline XBRL document)

    

    

SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


TYLER TECHNOLOGIES, INC.
/s/ Brian K. Miller 
October 23, 2024
By:Brian K. Miller
Executive Vice President and Chief Financial
Officer (principal financial officer)










    










    

finalpressreleaseimage1a05a.jpg

Tyler Technologies Reports Earnings for Third Quarter 2024
Strong results with 20% growth in SaaS revenues and 49% growth in cash flows
PLANO, Texas – October 23, 2024 – Tyler Technologies, Inc. (NYSE: TYL), a large-cap growth and value equity company, today announced financial results for the third quarter ended September 30, 2024.
Third Quarter 2024 Financial Highlights (all comparisons are to the third quarter of 2023):
Revenues
Total revenues were $543.3 million, up 9.8%. On an organic basis, revenues grew 9.4%.
Recurring Revenues
Recurring revenues from subscriptions and maintenance were $462.8 million, up 12.1%, and comprised 85.2% of total revenues, up from 83.4%. On an organic basis, recurring revenues grew 11.8%.
•Subscription revenues were $347.2 million, up 17.6%. On an organic basis, subscription revenues grew 17.3%. Within subscriptions:
◦SaaS revenues grew 20.3% to $166.6 million. On an organic basis, SaaS revenues grew 19.7%.
◦Transaction-based revenues grew 15.2% on an organic basis to $180.6 million.
◦SaaS arrangements comprised approximately 97% of the total new software contract value, up from approximately 80%.
•Annualized recurring revenue (ARR) was $1.85 billion, up 12.1%.
Earnings/EBITDA
•GAAP operating income was $82.8 million, up 29.5%. Non-GAAP operating income was $137.8 million, up 12.4%.
•GAAP net income was $75.9 million, or $1.74 per diluted share, up 61.4%. Non-GAAP net income was $110.0 million, or $2.52 per diluted share, up 20.0%.
•Adjusted EBITDA was $152.4 million, up 15.0%.
Cash Flow
•Cash flow from operations was $263.7 million, up 48.6%.
•Free cash flow was $252.9 million, up 55.5%.
•During the third quarter, cash tax payments included approximately $6 million related to IRC Section 174 capitalization rules.


Tyler Technologies Reports Earnings
for Third Quarter 2024
October 23, 2024
Page 2
"We carried our momentum from the first half of the year into the third quarter and delivered remarkable results," said Lynn Moore, Tyler's president and chief executive officer. "SaaS and transaction revenues fueled our growth, as both exceeded our expectations. Even as SaaS adoption accelerated to 97% of our new software contract value, our non-GAAP operating margin expanded to 25.4%, benefiting from our cloud efficiency initiatives and improved professional services margins. Free cash flow reached a new quarterly high, up 55.5%.
"Activity in the public sector market remains robust and our elevated contract volume in the third quarter reflects solid execution under our go-to-market strategy, including growing cross-sell wins. Annual recurring revenue added from new SaaS contracts in the third quarter increased 55% over last year. We're also pleased that the total contract value signed this quarter for on-premises client flips to the cloud was more than triple that of last year's third quarter. While our progress toward our 2025 and 2030 targets will not be linear, our confidence in achieving those targets continues to grow with our success in executing against each of the pillars supporting those objectives. We have revised our full-year 2024 guidance to reflect our year-to-date results and our positive outlook for the fourth quarter," concluded Moore.
Guidance for 2024
As of October 23, 2024, Tyler Technologies is providing the following guidance for the full year 2024:
•Total revenues are expected to be in the range of $2.125 billion to $2.145 billion.
•GAAP diluted earnings per share are expected to be in the range of $6.13 to $6.28.
•Non-GAAP diluted earnings per share are expected to be in the range of $9.47 to $9.62.
•Free cash flow margin is expected to be in the range of 21% to 23%.
•Research and development expense is expected to be in the range of $119 million to $122 million.
•Capital expenditures are expected to be in the range of $47 million to $49 million, including approximately $31 million of capitalized software development costs.


Tyler Technologies Reports Earnings
for Third Quarter 2024
October 23, 2024
Page 3
GAAP to non-GAAP guidance reconciliation
2024
GAAP diluted earnings per share (1)
$6.13 - $6.28
Plus:
Share-based compensation expense2.85
Amortization of acquired software and other intangibles2.23
Acquisition-related costs—
Lease restructuring costs and other—
Less:
Income tax impact (1)
(1.74)
Non-GAAP diluted earnings per share$9.47 - $9.62
Shares used in computing diluted earnings per share (millions)43.5
GAAP estimated annual effective tax rate used in computing GAAP diluted earnings per share (1)13.5%
Non-GAAP estimated annual effective tax rate used in computing non-GAAP diluted earnings per share22%
(1) GAAP diluted earnings per share may fluctuate due to the impact on our annual effective tax rate of discrete tax items, such as stock incentive awards, future acquisitions, changes in tax legislation, and other transactions.
Conference Call
Tyler Technologies will hold a conference call on Thursday, October 24, 2024, at 10:00 a.m. ET to discuss its third quarter 2024 results. Participants can pre-register for the teleconference here. Alternatively, participants can also join the teleconference by dialing 646-307-1963 and providing the operator with the conference name or entering access code 89698 to join the live call.
The live audio webcast and archived replay can also be accessed at the Events & Presentations section of Tyler's investor relations website.
About Tyler Technologies, Inc.
Tyler Technologies (NYSE: TYL) is a leading provider of integrated software and technology services for the public sector. Tyler's end-to-end solutions empower local, state, and federal government entities to operate efficiently and transparently with residents and each other. By connecting data and processes across disparate systems, Tyler's solutions transform how clients turn actionable insights into opportunities and solutions for their communities. Tyler has more than 44,000 successful installations across 13,000 locations, with clients in all 50 states, Canada, the Caribbean, Australia, and other international locations. Tyler has been recognized numerous times for growth and innovation, including Government Technology's GovTech 100 list. More information about Tyler Technologies, an S&P 500 company headquartered in Plano, Texas, can be found at tylertech.com.
Non-GAAP Financial Measures
Tyler Technologies has provided in this press release financial measures that have not been prepared in accordance with generally accepted accounting principles (GAAP) and are therefore considered non-GAAP


Tyler Technologies Reports Earnings
for Third Quarter 2024
October 23, 2024
Page 4
financial measures. This information includes non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP earnings per diluted share, EBITDA, adjusted EBITDA, free cash flow, and free cash flow margin. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating Tyler’s ongoing operational performance because they provide additional insight in comparing results from period to period. Tyler believes the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures. Non-GAAP financial measures discussed above exclude share-based compensation expense, employer portion of payroll taxes on employee stock transactions, expenses associated with amortization of intangibles arising from business combinations, acquisition-related expenses, and lease restructuring costs and other. Annualized recurring revenues (ARR) is calculated by annualizing the current quarter's recurring revenues from subscriptions and maintenance.
Tyler currently uses a non-GAAP tax rate of 22.0%. This rate is based on Tyler's estimated annual GAAP income tax rate forecast, adjusted to account for items excluded from GAAP income in calculating Tyler's non-GAAP income, as well as significant non-recurring tax adjustments. The non-GAAP tax rate used in future periods will be reviewed periodically to determine whether it remains appropriate in consideration of factors including Tyler's periodic annual effective tax rate calculated in accordance with GAAP, changes resulting from tax legislation, changes in the geographic mix of revenues and expenses, and other factors deemed significant. Due to differences in tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to Tyler's estimated annual tax rate as described above, the estimated tax rate on non-GAAP income may differ from the GAAP tax rate and from Tyler's actual tax liabilities.
Non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial information prepared in accordance with GAAP. The non-GAAP measures used by Tyler Technologies may be different from non-GAAP measures used by other companies. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, which has been provided in the financial statement tables included below in this press release.
Forward-looking Statements
This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical in nature and typically address future or anticipated events, trends, expectations or beliefs with respect to our financial condition, results of operations or business. Forward-looking statements often contain words such as “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates,” “plans,” “intends,” “continues,” “may,” “will,” “should,” “projects,” “might,” “could” or other similar words or phrases. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. We believe there is a reasonable basis for our forward-looking statements, but they are inherently subject to risks and uncertainties and actual results could differ materially from the expectations and beliefs reflected in the forward-looking statements. We presently consider the following to be among the important factors that could cause actual results to differ materially from our expectations and beliefs: (1) changes in the budgets or regulatory environments of our clients, primarily local and state governments, that could negatively impact information technology spending; (2) disruption to our business and harm to our competitive position resulting from cyber-attacks, security vulnerabilities and software updates; (3) our ability to protect client information from security breaches and provide uninterrupted operations of data centers; (4)


Tyler Technologies Reports Earnings
for Third Quarter 2024
October 23, 2024
Page 5
our ability to achieve growth or operational synergies through the integration of acquired businesses, while avoiding unanticipated costs and disruptions to existing operations; (5) material portions of our business require the Internet infrastructure to be adequately maintained; (6) our ability to achieve our financial forecasts due to various factors, including project delays by our clients, reductions in transaction size, fewer transactions, delays in delivery of new products or releases or a decline in our renewal rates for service agreements; (7) general economic, political and market conditions, including continued inflation and rising interest rates; (8) technological and market risks associated with the development of new products or services or of new versions of existing or acquired products or services; (9) competition in the industry in which we conduct business and the impact of competition on pricing, client retention and pressure for new products or services; (10) the ability to attract and retain qualified personnel and dealing with rising labor costs, and the loss or retirement of key members of management or other key personnel; and (11) costs of compliance and any failure to comply with government and stock exchange regulations. These factors and other risks that affect our business are described in our filings with the Securities and Exchange Commission, including the detailed “Risk Factors” contained in our most recent annual report on Form 10-K and quarterly report on Form 10-Q. We expressly disclaim any obligation to publicly update or revise our forward-looking statements.
(Comparative results follow)
Contact: Hala Elsherbini
Senior Director, Investor Relations
Tyler Technologies, Inc.
972-713-3770
hala.elsherbini@tylertech.com

Source: Tyler Technologies
#TYL_Financial
24-48


TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(Unaudited)


Three months ended September 30,Nine months ended September 30,
2024202320242023
Revenues:
Subscriptions$347,170 $295,190 $994,095 $873,444 
Maintenance115,587 117,484 348,114 349,154 
Professional services64,462 61,126 201,196 188,475 
Software licenses and royalties6,188 10,554 20,251 30,463 
Hardware and other9,930 10,330 33,016 29,281 
Total revenues543,337 494,684 1,596,672 1,470,817 
Cost of revenues:
Subscriptions, maintenance, and professional services283,750 247,781 829,765 755,985 
Software licenses and royalties1,870 3,120 4,995 7,865 
Amortization of software development4,961 3,083 13,808 8,568 
Amortization of acquired software9,244 9,035 27,723 26,879 
Hardware and other6,052 6,505 21,439 23,346 
Total cost of revenues305,877 269,524 897,730 822,643 
  Gross profit237,460 225,160 698,942 648,174 
Sales and marketing expense38,203 35,898 116,195 110,104 
General and administrative expense72,460 78,519 220,590 228,560 
Research and development expense30,120 28,282 88,504 83,421 
Amortization of other intangibles13,850 18,526 45,813 55,300 
  Operating income82,827 63,935 227,840 170,789 
Interest expense(1,235)(5,808)(4,672)(19,879)
Other income, net4,504 787 8,232 2,676 
Income before income taxes86,096 58,914 231,400 153,586 
Income tax provision10,199 11,903 33,595 26,570 
Net income$75,897 $47,011 $197,805 $127,016 
Earnings per common share:
   Basic$1.78 $1.12 $4.64 $3.02 
   Diluted$1.74 $1.10 $4.56 $2.97 
Weighted average common shares outstanding:
   Basic42,714 42,087 42,592 42,002 
   Diluted43,694 42,841 43,424 42,736 



TYLER TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Amounts in thousands, except per share data)
(Unaudited)
 


Three months ended September 30,Nine months ended September 30,
Reconciliation of non-GAAP gross profit and margin2024202320242023
GAAP gross profit$237,460$225,160$698,942$648,174
Non-GAAP adjustments:
  Add: Share-based compensation expense included in cost of
           revenues		7,9726,84722,98219,626
  Add: Amortization of acquired software9,2449,03527,72326,879
Non-GAAP gross profit$254,676$241,042$749,647$694,679
GAAP gross margin43.7 %45.5 %43.8 %44.1 %
Non-GAAP gross margin46.9 %48.7 %47.0 %47.2 %

Three months ended September 30,Nine months ended September 30,
Reconciliation of non-GAAP operating income and margin2024202320242023
GAAP operating income$82,827$63,935$227,840$170,789
Non-GAAP adjustments:
  Add: Share-based compensation expense31,18726,98188,46080,905
  Add: Employer portion of payroll tax related to employee stock
           transactions		625432,3031,191
  Add: Acquisition-related costs—18329255
  Add: Lease restructuring costs and other
353,812(124)5,357
  Add: Amortization of acquired software9,2449,03527,72326,879
  Add: Amortization of other intangibles
13,85018,52645,81355,300
Non-GAAP adjustments subtotal54,94158,580164,204169,887
Non-GAAP operating income$137,768$122,515$392,044$340,676
GAAP operating margin15.2 %12.9 %14.3 %11.6 %
Non-GAAP operating margin25.4 %24.8 %24.6 %23.2 %

Three months ended September 30,Nine months ended September 30,
Reconciliation of non-GAAP net income and earnings per share2024202320242023
GAAP net income$75,897$47,011$197,805$127,016
Non-GAAP adjustments:
  Add: Total non-GAAP adjustments to operating income54,94158,580164,204169,887
  Less: Income tax impact(20,829)(13,946)(53,438)(44,594)
Non-GAAP net income$110,009$91,645$308,571$252,309
GAAP earnings per diluted share$1.74$1.10$4.56$2.97
Non-GAAP earnings per diluted share$2.52$2.14$7.11$5.90



TYLER TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Amounts in thousands, except per share data)
(Unaudited)
 

Three months ended September 30,Nine months ended September 30,
Detail of share-based compensation expense2024202320242023
Subscriptions, maintenance, and professional services$7,972$6,847$22,982$19,626
Sales and marketing expense3,2592,6289,3837,388
General and administrative expense19,95617,50656,09553,891
Total share-based compensation expense$31,187$26,981$88,460$80,905

Three months ended September 30,Nine months ended September 30,
Reconciliation of EBITDA and adjusted EBITDA2024202320242023
GAAP net income$75,897$47,011$197,805$127,016
Amortization of other intangibles13,85018,52645,81355,300
Depreciation and amortization included in cost of revenues, sales and marketing expense, general and administrative expense, and research and development expense20,00717,42060,72855,199
Interest expense1,2356,6404,67219,879
Income tax provision10,19911,90333,59526,570
EBITDA$121,188$101,500$342,613$283,964
Share-based compensation expense31,18726,98188,46080,905
Acquisition-related costs—18329255
Lease restructuring costs and other asset write-offs353,812(124)5,357
Adjusted EBITDA$152,410$132,476$430,978$370,481

Three months ended September 30,Nine months ended September 30,
Reconciliation of free cash flow2024202320242023
Net cash provided by operating activities$263,716 $177,496 $399,859 $233,021 
Less: additions to property and equipment(2,884)(6,136)(16,734)(12,506)
Less: investment in software development(7,919)(8,694)(24,412)(27,447)
Free cash flow$252,913 $162,666 $358,713 $193,068 
Free cash flow margin46.5 %32.9 %22.5 %13.1 %


TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
 (Unaudited)

September 30, 2024December 31, 2023
ASSETS
Current assets:
     Cash and cash equivalents$538,296 $165,493 
     Accounts receivable, net619,508 619,704 
Short-term investments 5,985 10,385 
Prepaid expenses and other current assets74,775 65,003 
           Total current assets1,238,564 860,585 
Accounts receivable, long-term portion7,331 8,988 
Operating lease right-of-use assets34,741 39,039 
Property and equipment, net165,272 169,720 
Other assets:
     Software development costs, net76,580 67,124 
     Goodwill2,531,653 2,532,109 
     Other intangibles, net855,099 928,870 
     Non-current investments3,884 7,046 
     Other non-current assets83,384 63,182 
Total assets$4,996,508 $4,676,663 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Accounts payable and accrued liabilities$306,075 $304,897 
Operating lease liabilities10,653 11,060 
     Current income tax payable22,485 2,466 
     Deferred revenue682,422 632,914 
     Current portion of term loans— 49,801 
           Total current liabilities1,021,635 1,001,138 
Convertible senior notes due 2026, net597,502 596,206 
Deferred revenue, long-term— 291 
Deferred income taxes36,660 78,590 
Operating lease liabilities, long-term33,674 39,822 
Other long-term liabilities31,925 22,621 
Total liabilities1,721,396 1,738,668 
Shareholders' equity$3,275,112 $2,937,995 
Total liabilities and shareholders' equity$4,996,508 $4,676,663 

TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Three months ended September 30,Nine months ended September 30,
2024202320242023
Cash flows from operating activities:
    Net income$75,897 $47,011 $197,805 $127,016 
    Adjustments to reconcile net income to cash
    provided by operations:
      Depreciation and amortization34,530 38,450 108,766 114,198 
     (Gains) losses from sale of investments
(1)(1)(2)1 
      Share-based compensation expense31,187 26,981 88,460 80,905 
      Operating lease right-of-use assets expense2,397 5,689 7,262 12,258 
      Deferred income tax benefit(4,697)(4,335)(41,504)(44,000)
      Other38 (47)228 398 
      Changes in operating assets and liabilities,
      exclusive of effects of acquired companies		124,365 63,748 38,844 (57,755)
Net cash provided by operating activities263,716 177,496 399,859 233,021 
Cash flows from investing activities:
Additions to property and equipment(2,884)(6,136)(16,734)(12,506)
Purchase of marketable security investments— — — (10,617)
Proceeds and maturities from marketable security investments1,349 8,345 7,700 45,452 
Investment in software development(7,919)(8,694)(24,412)(27,447)
Cost of acquisitions, net of cash acquired(93)(33,665)(1,395)(35,540)
Other147 32 168 48 
Net cash used by investing activities(9,400)(40,118)(34,673)(40,610)
Cash flows from financing activities:
Payment on term loans— (135,000)(50,000)(255,000)
Payment of debt issuance costs(2,637)— (2,637)— 
Proceeds from exercise of stock options, net of withheld shares for taxes upon equity award settlement31,548 6,315 47,433 8,438 
Contributions from employee stock purchase plan4,347 4,029 12,821 11,780 
Net cash provided (used) by financing activities33,258 (124,656)7,617 (234,782)
Net increase (decrease) in cash and cash equivalents
287,574 12,722 372,803 (42,371)
Cash and cash equivalents at beginning of period250,722 118,764 165,493 173,857 
Cash and cash equivalents at end of period$538,296 $131,486 $538,296 $131,486 


v3.24.3
Cover
Oct. 23, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 23, 2024
Entity Registrant Name TYLER TECHNOLOGIES, INC
Entity Incorporation, State or Country Code DE
Entity File Number 1-10485
Entity Tax Identification Number 75-2303920
Entity Address, Address Line One 5101 TENNYSON PARKWAY
Entity Address, City or Town PLANO
Entity Address, State or Province TX
Entity Address, Postal Zip Code 75024
City Area Code 972
Local Phone Number 713-3700
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security COMMON STOCK, $0.01 PAR VALUE
Trading Symbol TYL
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0000860731
Amendment Flag false
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