Open the filing on EDGARTyler Technologies Reports Earnings for Third Quarter 2025
Subscription revenues grew 15.5%
PLANO, Texas - October 29, 2025 - Tyler Technologies, Inc. (NYSE: TYL), a large-cap growth and value equity technology company, today announced financial results for the third quarter ended September 30, 2025.
Third Quarter 2025 Financial Highlights (all comparisons are to the third quarter of 2024):
Revenues
Total revenues were $595.9 million, up 9.7%.
Recurring Revenues
Recurring revenues were $512.4 million, up 10.7%, and comprised 86.0% of total revenues, up from 85.2%.
- Subscription revenues were $401.1 million, up 15.5%.
- Within subscriptions:
- SaaS revenues grew 19.9% to $199.8 million.
- Transaction-based revenues grew 11.5% to $201.3 million.
- Annualized recurring revenue (ARR) was $2.05 billion, up 10.7%.
Earnings/EBITDA
- GAAP operating income was $97.9 million, up 18.2%. Non-GAAP operating income was $158.6 million, up 15.1%.
- GAAP net income was $84.4 million, or $1.93 per diluted share, up 11.2%. Non-GAAP net income was $130.4 million, or $2.97 per diluted share, up 18.5%.
- Adjusted EBITDA was $169.9 million, up 14.4%.
Cash Flow
- Cash flows from operations were $255.2 million, down 3.2%.
- Free cash flow was $247.6 million, down 2.1%.
- We repurchased approximately 300,000 shares of our common stock during the quarter at an average price of $576.82.
Acquisitions
During the third quarter, we completed the acquisition of Emergency Networking for approximately $19.4 million in cash.
"Third quarter results once again exceeded expectations across our key revenue and profitability measures, continuing the momentum we saw in the first half of the year," said Lynn Moore, Tyler's president and chief executive officer. "SaaS revenues grew 20%, and new transaction-based services and higher volumes drove transaction revenue growth of 11.5%. Strong gross and operating margin expansion reflected a favorable revenue mix, operating discipline, and cloud efficiency gains.
"As anticipated, we achieved solid third quarter bookings growth, with total SaaS bookings up 5% sequentially and 5.8% year-over-year to reach a new all-time high. Leading sales indicators remain steady, reflecting a healthy new business pipeline supported by a resilient budget environment and sustained demand for digital modernization. Leveraging decades of domain expertise and deep functionality, we are uniquely positioned to lead the public sector into the next era of innovation through our purpose-built Agentic AI solutions. Additionally, we repurchased approximately 300,000 shares of our common stock during the quarter for approximately $173 million, underscoring confidence in our long-term growth outlook and offsetting potential dilution from our outstanding convertible debt that matures next March," concluded Moore.
Guidance for 2025
As of October 29, 2025, Tyler Technologies is providing the following guidance for the full year 2025:
- Total revenues are expected to be in the range of $2.335 billion to $2.360 billion.
- GAAP diluted earnings per share are expected to be in the range of $7.28 to $7.48.
- Non-GAAP diluted earnings per share are expected to be in the range of $11.30 to $11.50.
- Free cash flow margin is expected to be in the range of 25% to 27%.
- Research and development expense is expected to be in the range of $202 million to $205 million.
- Capital expenditures are expected to be in the range of $31 million to $33 million, including approximately $18 million of capitalized software development costs.
- Net interest income is expected to be in the range of $29 million to $31 million.
| GAAP to non-GAAP guidance reconciliation | 2025 |
| GAAP diluted earnings per share | $7.28 - $7.48 |
| Plus: | |
| Share-based compensation expense | 3.49 |
| Amortization of acquired software and other intangibles | 2.12 |
| Less: | |
| Income tax impact | (1.59) |
| Non-GAAP diluted earnings per share | $11.30 - $11.50 |
| Shares used in computing diluted earnings per share (millions) | 43.9 |
| GAAP estimated annual effective tax rate used in computing GAAP diluted earnings per share | 19.0% |
| Non-GAAP estimated annual effective tax rate used in computing non-GAAP diluted earnings per share | 22.5% |
| 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. | |
| The non-GAAP estimated annual effective tax rate is expected to be 22.5%, up from 22.0% in 2024. | |
Conference Call
Tyler Technologies will hold a conference call and webcast on Thursday, October 30, 2025, at 10:00 a.m. ET to discuss the company’s results. Participants can pre-register for the teleconference here. Alternatively, participants can also join the teleconference by dialing 646-307-1951 and providing the operator with the conference name before admittance to the 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 45,000 successful installations across 15,000 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 on 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 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 while isolating the effects of some items that vary from period to period without correlation to core operating performance. 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. EBITDA is net income before interest expense, other income, income taxes, depreciation, and amortization. Non-GAAP and adjusted 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 revenue (ARR) is calculated by annualizing the current quarter's recurring revenues from subscriptions and maintenance.
Tyler currently uses a non-GAAP tax rate of 22.5%. 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
Forward-looking statements notice
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, including local, state and federal government agencies, 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) 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 actively monitor developments in artificial intelligence ("AI") regulation and ethical standards as we expect that future changes in the regulatory landscape may affect our product development timelines, compliance costs, and market opportunities related to AI; (7) 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; (8) general economic, political and market conditions, including inflation and changes in interest rates; (9) technological and market risks associated with the development of new products or services or of new versions of existing or acquired products or services; (10) 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; (11) the ability to attract and retain qualified personnel and dealing with rising labor costs, the loss or retirement of key members of management or other key personnel; and (12) 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
25-39
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(Unaudited)
| Three months ended September 30, | Nine months ended September 30, |
|---|
| 2025 | 2024 | 2025 | 2024 |
|---|
| Revenues: | | | | |
| Subscriptions | $401,094 | | $347,170 | | $1,181,158 | | $994,095 | |
| Maintenance | 111,312 | | 115,587 | | 336,236 | | 348,114 | |
| Professional services | 64,728 | | 64,462 | | 187,390 | | 201,196 | |
| Software licenses and royalties | 5,100 | | 6,188 | | 15,757 | | 20,251 | |
| Hardware and other | 13,645 | | 9,930 | | 36,620 | | 33,016 | |
| Total revenues | 595,879 | | 543,337 | | 1,757,161 | | 1,596,672 | |
| Cost of revenues: | | | | |
| Subscriptions, maintenance, and professional services | 289,070 | | 283,750 | | 859,718 | | 829,765 | |
| Software licenses and royalties | 1,669 | | 1,870 | | 5,418 | | 4,995 | |
| Amortization of software development | 6,195 | | 4,961 | | 17,079 | | 13,808 | |
| Amortization of acquired software | 9,376 | | 9,244 | | 27,989 | | 27,723 | |
| Hardware and other | 8,117 | | 6,052 | | 25,240 | | 21,439 | |
| Total cost of revenues | 314,427 | | 305,877 | | 935,444 | | 897,730 | |
| Gross profit | 281,452 | | 237,460 | | 821,717 | | 698,942 | |
| Sales and marketing expense | 37,560 | | 38,203 | | 110,345 | | 116,195 | |
| General and administrative expense | 79,971 | | 72,460 | | 236,024 | | 220,590 | |
| Research and development expense | 51,788 | | 30,120 | | 150,474 | | 88,504 | |
| Amortization of other intangibles | 14,201 | | 13,850 | | 42,173 | | 45,813 | |
| Operating income | 97,932 | | 82,827 | | 282,701 | | 227,840 | |
| Interest expense | (1,235) | | (1,235) | | (3,743) | | (4,672) | |
| Other income, net | 10,855 | | 4,504 | | 26,397 | | 8,232 | |
| Income before income taxes | 107,552 | | 86,096 | | 305,355 | | 231,400 | |
| Income tax provision | 23,159 | | 10,199 | | 55,283 | | 33,595 | |
| Net income | $84,393 | | $75,897 | | $250,072 | | $197,805 | |
| Earnings per common share: | | | | |
| Basic | $1.96 | | $1.78 | | $5.80 | | $4.64 | |
| Diluted | $1.93 | | $1.74 | | $5.70 | | $4.56 | |
| Weighted average common shares outstanding: | | | | |
| Basic | 43,135 | | 42,714 | | 43,085 | | 42,592 | |
| Diluted | 43,834 | | 43,694 | | 43,879 | | 43,424 | |
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 margin | | 2025 | | 2024 | | 2025 | | 2024 |
| GAAP gross profit | | $281,452 | | $237,460 | | $821,717 | | $698,942 |
| Non-GAAP adjustments: | | | | |
| Add: Share-based compensation expense included in cost of revenues | | 9,307 | | 7,972 | | 26,912 | | 22,982 |
| Add: Amortization of acquired software | | 9,376 | | 9,244 | | 27,989 | | 27,723 |
| Non-GAAP gross profit | | $300,135 | | $254,676 | | $876,618 | | $749,647 |
| GAAP gross margin | 47.2% | | 43.7% | | 46.8% | | 43.8% | |
| Non-GAAP gross margin | 50.4% | | 46.9% | | 49.9% | | 47.0% | |
| Three months ended September 30, | Nine months ended September 30, |
|---|
| Reconciliation of non-GAAP operating income and margin | | 2025 | | 2024 | | 2025 | | 2024 |
| GAAP operating income | | $97,932 | | $82,827 | | $282,701 | | $227,840 |
| Non-GAAP adjustments: | | | | |
| Add: Share-based compensation expense | | 36,669 | | 31,187 | | 112,631 | | 88,460 |
| Add: Employer portion of payroll tax related to employee stock transactions | | 159 | | 625 | | 2,278 | | 2,303 |
| Add: Acquisition-related costs | | 214 | | - | | 247 | | 29 |
| Add: Lease restructuring costs and other | | 57 | | 35 | | 105 | | (124) |
| Add: Amortization of acquired software | | 9,376 | | 9,244 | | 27,989 | | 27,723 |
| Add: Amortization of other intangibles | | 14,201 | | 13,850 | | 42,173 | | 45,813 |
| Non-GAAP adjustments subtotal | | 60,676 | | 54,941 | | 185,423 | | 164,204 |
| Non-GAAP operating income | | $158,608 | | $137,768 | | $468,124 | | $392,044 |
| GAAP operating margin | 16.4% | | 15.2% | | 16.1% | | 14.3% | |
| Non-GAAP operating margin | 26.6% | | 25.4% | | 26.6% | | 24.6% | |
| Three months ended September 30, | Nine months ended September 30, |
|---|
| Reconciliation of non-GAAP net income and earnings per share | 2025 | 2024 | 2025 | 2024 |
| GAAP net income | $84,393 | $75,897 | $250,072 | $197,805 |
| Non-GAAP adjustments: | | | | |
| Add: Total non-GAAP adjustments to operating income | 60,676 | 54,941 | 185,423 | 164,204 |
| Less: Income tax impact | (14,692) | (20,829) | (55,142) | (53,438) |
| Non-GAAP net income | $130,377 | $110,009 | $380,353 | $308,571 |
| GAAP earnings per diluted share | $1.93 | $1.74 | $5.70 | $4.56 |
| Non-GAAP earnings per diluted share | $2.97 | $2.52 | $8.67 | $7.11 |
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 expense | 2025 | 2024 | 2025 | 2024 |
| Cost of revenues | $9,307 | $7,972 | $26,912 | $22,982 |
| Operating expenses | 27,362 | 23,215 | 85,719 | 65,478 |
| Total share-based compensation expense | $36,669 | $31,187 | $112,631 | $88,460 |
| Three months ended September 30, | Nine months ended September 30, |
|---|
| Reconciliation of EBITDA and adjusted EBITDA | 2025 | 2024 | 2025 | 2024 |
| GAAP net income | $84,393 | $75,897 | $250,072 | $197,805 |
| Amortization of other intangibles | 14,201 | 13,850 | 42,173 | 45,813 |
| Depreciation and amortization included in cost of revenues, sales and marketing expense, general and administrative expense, and research and development expense | 20,683 | 20,007 | 61,214 | 60,728 |
| Interest expense | 1,235 | 1,235 | 3,743 | 4,672 |
| Other income, net | (10,855) | (4,504) | (26,397) | (8,232) |
| Income tax provision | 23,159 | 10,199 | 55,283 | 33,595 |
| EBITDA | $132,816 | $116,684 | $386,088 | $334,381 |
| Share-based compensation expense | 36,669 | 31,187 | 112,631 | 88,460 |
| Acquisition-related costs | 214 | - | 247 | 29 |
| Employer portion of payroll tax related to employee stock transactions | 159 | 625 | 2,278 | 2,303 |
| Lease restructuring costs and other | 57 | 35 | 105 | (124) |
| Adjusted EBITDA | $169,915 | $148,531 | $501,349 | $425,049 |
| Three months ended September 30, | Nine months ended September 30, |
|---|
| Reconciliation of free cash flow | | 2025 | | 2024 | | 2025 | | 2024 |
| Net cash provided by operating activities | $255,191 | | $263,716 | | $409,660 | | $399,859 | |
| Less: additions to property and equipment | (3,876) | | (2,884) | | (11,698) | | (16,734) | |
| Less: investment in software development | (3,738) | | (7,919) | | (14,138) | | (24,412) | |
| Free cash flow | $247,577 | | $252,913 | | $383,824 | | $358,713 | |
| Free cash flow margin | 41.5% | | 46.5% | | 21.8% | | 22.5% | |
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
| September 30, 2025 | December 31, 2024 |
|---|
| ASSETS | | |
| Current assets: | | |
| Cash and cash equivalents | $834,101 | $744,721 |
| Accounts receivable, net | 661,986 | 587,634 |
| Short-term investments | 116,720 | 23,257 |
| Prepaid expenses and other current assets | 88,277 | 73,192 |
| Income tax receivable | 36,761 | 11,975 |
| Total current assets | 1,737,845 | 1,440,779 |
| Accounts receivable, long-term portion | 6,855 | 7,153 |
| Operating lease right-of-use assets | 36,564 | 31,433 |
| Property and equipment, net | 160,626 | 163,775 |
| Other assets: | | |
| Software development costs, net | 71,777 | 76,117 |
| Goodwill | 2,554,457 | 2,531,653 |
| Other intangibles, net | 779,170 | 831,966 |
| Non-current investments | 22,439 | 10,758 |
| Other non-current assets | 87,636 | 86,381 |
| Total assets | $5,457,369 | $5,180,015 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | |
| Current liabilities: | | |
| Accounts payable and accrued liabilities | $320,953 | $354,526 |
| Operating lease liabilities | 9,661 | 9,643 |
| Deferred revenue | 761,050 | 701,438 |
| Current portion of convertible senior notes due 2026, net | 599,231 | - |
| Total current liabilities | 1,690,895 | 1,065,607 |
| Convertible senior notes due 2026, net | - | 597,934 |
| Deferred revenue, long-term | 22,217 | 22,376 |
| Deferred income taxes | 75,829 | 47,503 |
| Operating lease liabilities, long-term | 34,556 | 30,791 |
| Other long-term liabilities | 31,105 | 27,382 |
| Total liabilities | 1,854,602 | 1,791,593 |
| Shareholders' equity | $3,602,767 | $3,388,422 |
| Total liabilities and shareholders' equity | $5,457,369 | $5,180,015 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
| Three months ended September 30, | Nine months ended September 30, |
|---|
| 2025 | 2024 | 2025 | 2024 |
|---|
| Cash flows from operating activities: | | | | |
| Net income | $84,393 | | $75,897 | | $250,072 | | $197,805 | |
| Adjustments to reconcile net income to cash provided by operations: | | | | |
| Depreciation and amortization | 34,988 | | 34,530 | | 103,931 | | 108,766 | |
| Gains from sale of investments | - | | (1) | | - | | (2) | |
| Share-based compensation expense | 36,669 | | 31,187 | | 112,631 | | 88,460 | |
| Operating lease right-of-use assets expense | 2,300 | | 2,397 | | 7,160 | | 7,262 | |
| Deferred income tax benefit | 37,462 | | (4,697) | | 26,382 | | (41,504) | |
| Other | 43 | | 38 | | 82 | | 228 | |
| Changes in operating assets and liabilities, exclusive of effects of acquired companies | 59,336 | | 124,365 | | (90,598) | | 38,844 | |
| Net cash provided by operating activities | 255,191 | | 263,716 | | 409,660 | | 399,859 | |
| Cash flows from investing activities: | | | | |
| Additions to property and equipment | (3,876) | | (2,884) | | (11,698) | | (16,734) | |
| Purchase of marketable security investments | (72,680) | | - | | (179,966) | | - | |
| Proceeds and maturities from marketable security investments | 42,023 | | 1,349 | | 76,307 | | 7,700 | |
| Investment in software development | (3,738) | | (7,919) | | (14,138) | | (24,412) | |
| Cost of acquisitions, net of cash acquired | (16,907) | | (93) | | (35,137) | | (1,395) | |
| Other | (1) | | 147 | | 525 | | 168 | |
| Net cash used by investing activities | (55,179) | | (9,400) | | (164,107) | | (34,673) | |
| Cash flows from financing activities: | | | | |
| Payment on term loans | - | | - | | - | | (50,000) | |
| Payment of debt issuance costs | - | | (2,637) | | - | | (2,637) | |
| Purchase of treasury shares | (173,045) | | - | | (174,650) | | - | |
| Proceeds from exercise of stock options, net of withheld shares for taxes upon equity award settlement | 15,461 | | 31,548 | | 12,306 | | 47,433 | |
| Contributions from employee stock purchase plan | 4,561 | | 4,347 | | 13,883 | | 12,821 | |
| Other | (335) | | - | | (7,712) | | - | |
| Net cash (used) provided by financing activities | (153,358) | | 33,258 | | (156,173) | | 7,617 | |
| Net increase in cash and cash equivalents | 46,654 | | 287,574 | | 89,380 | | 372,803 | |
| Cash and cash equivalents at beginning of period | 787,447 | | 250,722 | | 744,721 | | 165,493 | |
| Cash and cash equivalents at end of period | $834,101 | | $538,296 | | $834,101 | | $538,296 | |