TYL

A month has gone by since the last earnings report for Tyler Technologies (TYL). Shares have added about 14.4% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Tyler Technologies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers. Tyler Technologies reported second-quarter 2026 non-GAAP earnings of $3.08 per share, which increased 0.9% year over year and surpassed the Zacks Consensus Estimate of $3.06. Quarterly revenues increased 8.2% year over year to $645.1 million, missing the consensus estimate by 0.29%. The quarter was highlighted by accelerating SaaS adoption, record bookings, robust recurring revenue growth and record second-quarter free cash flow. Annualized recurring revenue (ARR) reached $2.24 billion, up 8.2% year over year. Recurring revenues increased 8.2% year over year to $559.5 million, representing 86.7% of total revenues. Subscription revenues grew 12% to $453.7 million, reflecting continued customer migration toward Tyler Technologies' cloud-based offerings. Management noted that recurring revenue growth continues to benefit from strong public-sector demand, healthy cloud migrations and increasing adoption of mission-critical software solutions. The company also raised its long-term recurring revenues, operating margin and free cash flow targets during its June Investor Day, underscoring confidence in its Tyler 2030 strategy. SaaS revenues grew 21.7% year over year to $230.6 million, marking 22 consecutive quarters of at least 20% SaaS revenue growth. Transaction revenues increased 3.5% to $223.1 million. Management highlighted record SaaS bookings and total bookings during the quarter, driven by healthy public-sector demand and continued cloud modernization initiatives. Governments remain focused on cybersecurity, digital transformation, operational efficiency and AI adoption, supporting a strong sales pipeline. During the quarter, Tyler Technologies secured several notable wins, including another statewide Electronic Vehicle Registration, Title and Lien implementation expected to generate more than $10 million annually when fully adopted. The company also expanded AI deployments through agreements with customers such as Washtenaw County, the City of Doral and the State of Indiana. GAAP operating income was $95.1 million, while non-GAAP operating income increased 4.8% year over year to $165.7 million. Adjusted EBITDA increased 4.3% to $176.4 million. Management attributed the profitability improvement to disciplined execution, an increasingly recurring revenue mix and continued operational efficiencies while maintaining investments in long-term growth initiatives. Cash flow from operations increased 26.5% year over year to $124.4 million, while free cash flow jumped 34.7% to a record second-quarter level of $118.5 million. The company also strengthened its financial position during the quarter by completing the $212.7 million acquisition of For The Record, issuing $1.4 billion of convertible senior notes and repurchasing 1.62 million shares for approximately $505 million. Tyler ended the quarter with more than $1 billion in cash and investments and announced a new $1.5 billion share repurchase authorization. For full-year 2026, Tyler Technologies expects total revenues between $2.535 billion and $2.575 billion, non-GAAP earnings per share between $12.95 and $13.20, free cash flow margin of 26-28%, R&D expense of $245-$250 million and Capital expenditures of $18-$20 million. It turns out, estimates review have trended upward during the past month. At this time, Tyler Technologies has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for value investors. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Tyler Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Tyler Technologies is part of the Zacks Internet - Software and Services industry. Over the past month, VeriSign (VRSN), a stock from the same industry, has gained 2.8%. The company reported its results for the quarter ended June 2026 more than a month ago. VeriSign reported revenues of $434.6 million in the last reported quarter, representing a year-over-year change of +6%. EPS of $2.38 for the same period compares with $2.21 a year ago. VeriSign is expected to post earnings of $2.41 per share for the current quarter, representing a year-over-year change of +6.2%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for VeriSign. Also, the stock has a VGM Score of D. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tyler Technologies, Inc. (TYL) : Free Stock Analysis Report VeriSign, Inc. (VRSN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Axon surged 6% after Q2 revenue of $904M beat estimates, with AI Era Plan revenue up nearly 700% and contracted bookings rising 41% to $15B. Motorola beat estimates and acquired counter-drone firm D-Fend for $1.5B, while Tyler Technologies has cratered 30% YTD despite 22 straight quarters of strong SaaS growth. It sounds nuts, but SoFi1 is giving new Active Invest users up to $3,000 in stock for a limited time, and all it takes is a $50 deposit to get started.2 See for yourself (Sponsor) Shares of Axon Enterprise (NASDAQ:AXON) are up 6% in midday trading Tuesday, trading near $634 after opening the session at $596. The move extends a post-earnings rebound and pushes the stock into positive territory for the year, up 5% YTD. The catalyst traces back to last week's August 5 Q2 report, which is still being digested by the sell side. Axon delivered revenue of $904.39 million, up 35.3% year over year and beating the $876.46 million consensus, while adjusted EPS of $1.88 topped the $1.84 estimate. Management raised the full-year 2026 revenue growth outlook to 32% to 34% from the prior 30% to 32%, per the company's 8-K filing. The subscription engine did the heavy lifting. Platform Solutions revenue jumped 123% to $149.84 million, AI Era Plan revenue grew nearly 700%, and Dedrone counter-drone revenue crossed $100 million for the first time. Future contracted bookings sit at $15.10 billion, up 41%. Analyst repositioning followed, with Northcoast Research lifting its price target to $680 from $650 and the Street's average target now sitting at $691.83 against 18 buy ratings. The initial gross-margin scare tied to climbing memory prices and Dedrone hardware scaling has been reframed as the price of growth, with margins expected to rebuild in Q4. SoFi Active Invest is offering a limited-time promotion. Open an account, fund it with $50 or more, and you could receive up to $3,000 in complimentary stock for Active Invest accounts. See for yourself by clicking here now. (Sponsor) The peer set tells a divided story. Motorola Solutions (NYSE:MSI) reported the same day and also raised guidance, posting Q2 revenue of $3.13 billion (up 13%) and non-GAAP EPS of $4.41 versus a $3.85 estimate. CEO Greg Brown called it "exceptional across the board." Motorola also announced a $1.5 billion acquisition of counter-drone specialist D-Fend Solutions, echoing the same counter-UAS tailwind driving Axon's Dedrone momentum. MSI shares are up 1% today to $465 and are up 21% YTD. Tyler Technologies (NYSE:TYL) sits at the opposite end. The govtech vendor reported July 29, missing revenue estimates by 0.50% at $645.10 million despite SaaS revenue climbing 21.7% for a 22nd consecutive quarter above 20%. CEO Lynn Moore pointed to "record SaaS and total bookings", but the tape has been unforgiving: TYL is down 30% YTD and 46% over the past year, even after today's 1% bounce. Axon carries the premium valuation of the group at roughly $51.5 billion in market cap, versus Motorola's $76.9 billion and Tyler's $13.2 billion. Note that even after today's move, Axon shares remain down 29% from a year ago. Axon opened the day down, and saw most of its gains between 9:35 and 10 a.m. ET. There's no clear news to correspond with this move, and volume today is close to the average traded for the stock. Instead, price action around the company appears to be tied to its recent earnings. Wall Street has kept relatively stable EPS estimates for the company in 2027. 90 days ago the Street modeled $10.57. Today that number is $10.56. It will be interesting if the company's subscription success and growing backlog in excess of earnings will lead to some near-term earnings revisions. If that happens, it could form the next catalyst for Axon. Looking to grow your money but unsure where to begin? SoFi Active Invest is offering a limited-time promotion—open a new Active Invest account, fund it with $50 or more, and you could receive up to $3,000 in complimentary stock. From $0 commission trading3 to fractional shares4 and automated investing, this app is designed to simplify investing for everyone, whether you’re just starting or already experienced. Its easy to sign up and secure your bonus.(Sponsor) Contact [email protected] for any questions or corrections.

Image source: The Motley Fool. Thursday, July 30, 2026 at 7:00 a.m. ET Executive Chair, President and Chief Executive Officer - Lynn Moore Chief Financial Officer - Brian Miller Senior Director of Investor Relations - Hala Elsherbini Need a quote from a Motley Fool analyst? Email [email protected] Operator: Hello, and welcome to today's Tyler Technologies Second Quarter 2026 Conference Call. Your host for today's call is Lynn Moore, Executive Chair, President and CEO of Tyler Technologies. . Later, we will conduct a question-and-answer session injections will follow at that time. In order to address everyone's questions and stay within the allotted time, lined-up. And as a reminder, this conference is being recorded today, July 30, 2026. I would like to turn the call over to Hala Elsherbini, Tyler's Senior Director of Investor Relations. Please go ahead. Hala Elsherbini: Thank you, and welcome to our call. With me today is Lynn Moore, Executive Chair, President and CEO; and Brian Miller, our Chief Financial Officer. In an effort to streamline our early communications and provide timely context around our quarterly earnings release, we published our prepared remarks yesterday, shortly after our full quarterly results release to the news section of our Investor Relations website. We've also posted on the Investor Relations section of our website under the Financials tab a schedule with supplemental information. Lastly, on the Events & Presentations tab, we posted an earnings summary slide deck to supplement our prepared remarks. After I give the safe harbor statement, Lynn will have some opening remarks and will directly go to Q&A. During this conference call, management may make statements that provide information other than historical information and may include projections concerning the company's future prospects, revenues, expenses and profits. Such statements are considered forward-looking statements under the safe harbor provision of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties, which could cause actual results to differ materially from these projections. We refer you to our Form 10-K and other SEC filings for more information on those risks. Lynn? H. Moore: Thanks, Hala. As you can see, it was a very busy and exceptionally productive quarter for Tyler. We accomplished a great deal strategically, including our Investor Day where we detailed new higher Tyler 2030 targets, our convertible debt offering, which enhanced our financial flexibility, significant share repurchases, reflecting confidence in our long-term growth and the acquisition of for the record, which strengthens our leadership position in the courts and justice market all while continuing to deliver strong execution across the business. Operationally, we delivered another strong quarter, highlighted by 21.7% SaaS revenue growth record SaaS bookings, record total bookings and record second quarter free cash flow. Public sector demand remains healthy, supported by ongoing modernization priorities across government and continued investment in digital transformation cyber security, operational efficiency and constituent engagement. We also continue to see momentum in our transactions business, made meaningful progress with our cloud operations and advance our AI strategy with growing client engagement and early customer adoption across the portfolio. Overall, we're very pleased with our first half performance and remain well positioned for the second half of 2026 and beyond. Simply put, we got a lot done this quarter and the progress we made reinforces our confidence in the opportunities ahead. We'll now take your questions. Operator: Your first question comes from the line of Kirk Materne with Evercore ISI. S. Kirk Materne: Lynn, I realize you guys ran through a lot of the AI strategy at your recent Analyst Day. But I was just kind of curious, we've heard from some companies that AI sort of decisions are slowing down decisions in other parts of the business. And I was just kind of curious what you're seeing in your area, have sort of the broader discussion of AI slowed. Any discussions on flips or on some of your products? Or is it pretty much business as usual, right? H. Moore: Yes. Thanks, Kirk. I'd say it's business as usual. As we talked about at Investor Day, our market is going to move a little bit slower, but there is a lot of excitement and energy around the products that we're starting to bring to market around AI. We're not seeing any meaningful impact or any impact really on the remainder of our core business. S. Kirk Materne: And if I can just ask a quick follow-up for Brian. Brian, just on the margin front going in the back half of the year, anything we should be sort of aware of in terms of hiring plans or any sort of shift in how you guys are thinking about sort of spending. Brian Miller: No, there's no real change to our spending outlook. Margin expectation obviously is that margins will continue to expand through the year. I think the midpoint of our guidance has somewhere around the 100 basis point margin expansion. There were a couple of onetime things in this quarter that pulled it down a bit, but we still have about the same outlook on growth and our hiring is right on plan and fairly limited in the second half of the year. Operator: Your next question comes from the line of Matthew VanVliet with Cantor. Matthew VanVliet: I guess looking at the progress for the record. Obviously, it's only been a couple of months, but just curious on how the interest there gives you confidence in both future M&A strategy but also just sort of your own AI road map as you were just talking about? H. Moore: Yes, sure, Matt. Yes, we're still just as excited about for the record as we were 2 months ago. And as we were, we made our initial investment 11 years ago. They won a really big opportunity in Australia this quarter about a $1.6 million annual ARR. They also want to hand -- I think, 7 or 8 other deals in the quarter. So really, out of the gate, it's about what we expected like a lot of our acquisitions, we expect that over time, it's -- we're going to help accelerate its growth. And that's the plan -- I'm sorry, I don't remember the second part of your question. Matthew VanVliet: Just how the [indiscernible] Incurred in the AI strategy. I'm sorry, we talked over each other. Yes. Just how it impacts your AI strategy for both M&A and organic? H. Moore: I think it just reinforces one, our overall M&A strategy. And obviously, with changes that are going on the market. That's one of the things we talk about is what is it that they can bring for AI. And on the flip side, we're probably scrutinizing acquisition candidates a little more closely in terms of whether or not AI is something that could displace those types of products versus others. But I would say it validates our approach. And again, we're as excited about FTR as we've really been for many years. Matthew VanVliet: And then, Brian, quickly following up. Could you just give us the organic revenue growth and bookings growth that you've historically even. Brian Miller: Yes. The organic revenue growth -- on a total revenue basis, is about 2 points lower than the overall growth. And I don't have the organic bookings growth. But there was a pretty minimal contribution on the -- from the acquisitions this quarter, but about 2 points on the organic revenue growth. Matthew VanVliet: About $11 million from acquisition. Brian Miller: So the contribution for bookings was about $11 million from the acquired revenues. Operator: Your next question comes from the line of Joshua Reilly with Needham. Joshua Reilly: If you look at some of the channel checks we did in the last quarter, some of the interesting feedback was customers on the ERP side seem more concerned about features and functionality. Vendor reliability and AI product road map relative to necessarily having the lowest contract price. Is that consistent with what you're seeing in deals? And then along with that, do you think customers are less price sensitive than historically because you can drive a higher ROI to offset these higher contract costs? H. Moore: Yes. Sure, Josh. I don't know that they're less price sensitive than they have been in the past. But I would agree with you about features and functionality and AI product road map. One of the things we've done on the ERP side is we've actually engaged our client base. We have an annual AI product focus group, not annual. They meet monthly And we're working with our clients to make sure we're delivering the right value of AI into their products. Features and functionality are always going to be king. That's one of the things that's always differentiated at Tyler, our 30-plus years of domain expertise, and that's going to continue to be the case in the future. Operator: Your next question comes from the line of Alexei Gogolev with JPMorgan. Alexei Gogolev: Thank you, and hello, everyone. Firstly, Brian, could I ask you about how you're thinking about gating specific capabilities, including AI to cloud-only over the next year? And what principles determine whether something stays available on-prem versus becoming on cloud exclusively? H. Moore: Yes, Alexei, it's Lynn. You're right. We've outlined a lot of what we call incentives for clients to flip to the cloud, and one of those will be AI functionality that will be solely available in our cloud release. We are -- we recently sent out messages to our client base around their need to get a path to the cloud and working with us and our salespeople to do it. There'll be a lot of incentives to do that. It's not just AI features, but cloud-only features, cloud living release model that we talked about at Investor Day, the faster time to value they can get starting to work with clients on transitional pricing. So you're going to see us continue to ramp up what we traditionally call carats, but I'd rather just call them incentives to moving to the cloud. Alexei Gogolev: And another question about transactions. So excluding the Texas contract, transactions seem to be quite strong. Can you unpack what's driving the improvement. Is it volumes, mix or new logos? And how you expect the mix shift towards software tied transactions streams to evolve through second half of the year? Brian Miller: Yes. It's really all 3. You're right. Excluding Texas, our transaction revenues have grown about 10%. And for the -- it's really from all 3 of those things. It's from higher volumes, and we are continuing to see that. We've talked about how we work with our clients to drive greater adoption it's from new names. And so sales continue to be very active in terms of bundling transaction services with both new sales and driving it back into our installed software base. And then the third part is, as you noted, providing software under a transaction-based arrangement. And those not as much impact on the second half of the year. We've seen impact or ongoing impact from the California deal we did some time back. I think it's interesting that both last quarter and this quarter, the biggest software deals of the quarter were transaction-based. And so they're not showing up in the SaaS bookings, but they will show up in transaction revenues. But the largest actual software deal in terms of full ARR at full adoption rate was a statewide deal again this quarter as it was last quarter for our digital motor vehicle titling and electronic liean solution. Operator: Your next question comes from the line of Terry Tillman with Truist Securities. Terrell Tillman: Kind of building on that last question on the transaction deal that's a $10 million ARR deal. I'm curious, was that early on in the opportunity looking like it could be a transaction funded deal or was it looking like a SaaS deal and kind of the follow-up to this first question is could you all maybe do sales enablement work where you actually lead faster with transaction-funded opportunities and maybe that moves the deals along faster? And maybe it's not that simple. And then I had a follow-up. H. Moore: Yes. I think that deal, as with the one last quarter in that digital motor vehicle titling deal, my understanding is that, that was expected to be a transaction-funded deal throughout the process. That is one of those areas we've now with our partner, Champ, have done those types of DMV deals in several states now. And that lends itself well to the transaction-funded model because it has a revenue stream or a charge to the citizen that accompanies that transaction. So those things, outdoor recreation is another one of those areas. There -- it doesn't lend itself to every type of software deal but there certainly are those where it does, and we do use that to our advantage, being able to provide those transaction services, the payment capabilities and fund it with that transaction model that takes away the pressure of budgets because it doesn't have to have appropriated funds to pay for it. And so we use that to our advantage when it fits the transaction type perfect. Brian Miller: Yes. I think if there are deals where the citizens are involved in interacting with the government or businesses like digital titling, outdoors that Lynn said, but our traditional business, probably not so much. Terrell Tillman: Okay. Got it. And then it's always good to see the AI-driven deal kind of commentary in the slides. I'm curious, as it stands right now looking out over the next couple of quarters, what seems more impactful, document automation, priority-based budgeting or the resident AI assist. H. Moore: Terry, I'm not sure I would prioritize. I think the interest across all 3 are pretty high, and we're continuing to release new AI into the market as well. You're going to see an increase of that really starting next year and revenues probably start picking up in the latter part of next year. The excitement around all 3 is high, but for different reasons. And we're getting a lot of traction right now out of document automation. We're getting a lot of traction on the resi AI. And prior to base budgeting, we've had in the bag for a couple of years now, and it's out there and it's proven in the market. And I think as the other -- our other solutions continue to be proven in the market. Again, as we talked about at Investor Day, trust and provability is really important in this segment. You're going to continue to see more traction and excitement. Operator: Your next question comes from the line of Parker Lane with Stifel. J. Lane: Lynn, in the prepared remarks, you called out some investments in AI-enabled sales tools to improve the go-to-market function here. I was wondering if you can go a layer deeper and help us understand exactly what you're bringing in here and how that's changing the way that you all approach this end market today. H. Moore: Yes. I don't want to go too deep for competitive reasons, but we've been utilizing AI in sales for some period of time. There's obviously -- everything we do is in the public domain. Everything is out there. And so being able to use AI to understand client demand, understand what's going on at city council meetings, to understand their specific needs to the extent that we don't have that already through our relationships, to understand what competitive processes are out there, what competitors are doing. There's just a lot that we're doing, and it's the results have been encouraging to see. Brian Miller: One of the things is the AI enablement and our CRM system, and taking advantage of that, that there's a wide variety of tools there. J. Lane: Got it. Brian, a follow-up for you. Record second quarter free cash flow here. Anything onetime to call out about that performance that you saw here? Brian Miller: There's not anything necessarily onetime, but I think probably the biggest impact on the increase over last year was cash taxes. So there was about a $30 million less cash taxes this quarter than there was in the second quarter of last year, and that's primarily related to some of the impacts of the one big beautiful bill. Operator: Your next question comes from the line of Tamjid Chowdhury with Guggenheim. Tamjid Md Moinuddin Chowdhury: I guess first one for Lynn. In the prepared remarks, you talked about resident AI assistant now being adopted by 8 states. What brings customers to table to come to table and say I want to you about a solution like that? And then what is the typical ARR uplift for a solution like that once it's fully deployed in the stage? H. Moore: Yes, I think it's a couple of things on what garners the interest. I think when you talk about AI solutions, we're talking about, this is one of those that's really an outcome-based solution and you're really trying to ease the burden, the sort of the day-to-day routine that in this instance, state agencies. But with all our jurisdictions, the burden that they have in serving their citizens. And what they see is, like I mentioned earlier, on the response to the other question, everything we do is out in the public, and our client base tends to be a little conservative, and they tend to watch what happens in other states and when things start working for other jurisdictions to say states. But when things start working, and they see that measurable ROI outcome than it drives that demand. And that's what we've seen with our resident AI assistant. Brian Miller: The ARR varies from state to state, but I would say, typically, it's in the multiple millions of dollars. . Tamjid Md Moinuddin Chowdhury: Okay. Great. And then for Brian, a quick one for you. As you approach the second half of the year, from conversions from on-prem will see some tough comps. Can you give us more color on the visibility that you have into the second half when it comes to conversions? Brian Miller: Yes. And we've gotten away from commenting on that quarter-to-quarter. We have said that we expect the activity to continue to grow in general over the next 3 to 4 years and that we're certainly on track to achieve that 85% of our 2023 maintenance converted to the cloud by 2030. So and it can be lumpy from quarter-to-quarter, especially based on the larger customers, and there's probably a little less, I wouldn't say visibility, but a little less certainty around some of those, the timing tends to move around a bit around those larger opportunities. So I'd say we're on track to certainly achieve the long-term objectives, and we're continuing to see those pick up. And Lynn talked about some of the things we're doing with -- particularly around incentives now that we expect will help solidify that activity over the next couple of years. Operator: Your next question comes from the line of Rob Oliver with Baird. Please go ahead. Robert Oliver: Two for me. Lynn, just first for you, on really strong performance on trailing 12-month ACV from conversions for you guys. And I know you've talked a little bit about in the prepared remarks around AI and some of the data preparedness that customers need to think about if they're going to have an AI future? And is that pulling you guys into the equation today? In other words, are you seeing today that AI is serving to show up in the rationale around those flips and potentially start to help accelerate those slips. H. Moore: I don't know that sitting here today, Rob, it's been a meaningful contributor. I do expect it to become more meaningful and more significant over the next, I'd say, probably 12 to 18 months as we continue to put more AI agentic cases in our flagship products as we tend to do more commercialization of the AI. I think you're going to see that ramp up. As I mentioned on the other question, we've got a whole program in place to try to start incentivizing the move a little faster particularly now as our products and our -- as we move towards cloud living that we talked about at Investor Day. And as we become better prepared, our clients become better prepared I think you're going to see that continue to increase, consistent with what we outlined at Investor Day. Robert Oliver: Great. And then Brian, for you, just on the third-party payment processing headwind that you guys called out, how structural is that? Does it recur in '27? And then how should we think about the kind of normalized incremental margin on SaaS once that noise clears? Brian Miller: No, that third-party payment headwind was really pretty much isolated to last year where we saw sort of outsized increases from some of our third-party payment processing partners. That seems to be played out after the first part of last year. So that headwind really isn't the big factor going forward. But last year in Q2 was sort of the peak of that. . Operator: Your next question comes from the line of Alex Zukin with Wolfe Research. . Aleksandr Zukin: I guess, Brian, maybe the first one for you. Can you help us understand investor understand a little bit of the SaaS revenue in the quarter? Were there some timing impacts that led to them being a bit less recognized in the quarter. And then is there confidence given it looks like first half SaaS bookings is a meaningful acceleration obviously versus last year. But kind of when does that start to show up? Is that the confidence behind the reiterated sales revenue guidance? Brian Miller: Yes. I think you -- as we've talked about for a long time, there is a lag from the time we signed something to the time those SaaS revenues start to show up in the income statement, and that's true both with respect to new deals, which is probably a little longer of in 1 or 2 quarters, but could be longer. And flip. There's also a lag there as well. So I think the accelerated bookings in both of the last 2 quarters don't have as much of an impact, certainly on the current quarter, but even in the next quarter or 2 as they do beyond that. And that lag, I think, is something you have to keep in mind. I don't think there's anything particular around timing. We always have deals that move around some that -- so we typically aren't calling out deal slippage as a major factor because it's -- they're all the time. There's nothing unusual about this quarter. And I'd just say that our outlook for the full year hasn't changed, and we don't give quarterly guidance. And -- but I'd say there's not any meaningful change to our outlook for the year. Aleksandr Zukin: Got it. And then maybe on the AI ACV contribution as a percentage of your new SaaS ACV this quarter I think you called out New SaaS ACV growing about 22%. You talked about document automation attach continuing to be really healthy. Any sense for what that attach rate looks like on the installed base and like how much should we think about that potentially being a tailwind to new SaaS ACV over the course of maybe beyond this year? Brian Miller: Yes, I'd say, as Lynn mentioned, it's beyond this year where we expect it to be meaningful. The direct sort of AI stuff that we've talked about is still a real small percentage of the total ACV. As we've said in the past, we expect that revenue contribution really is probably 12 to 18 months down the road when it starts to become more meaningful it's certainly growing, but it's still a very small percentage of the new ACV. Operator: Your next question comes from the line of Trevor Walsh with Citizens. . Trevor Walsh: Brian, maybe to start with you, a real quick one. You made some comments around that $10 million transaction business or that deal with -- for motor vehicle. Do you have a sense of the ramp on that $10 million annually number? And if so, kind of how does that compare maybe to other similarly situated size deals? Brian Miller: Yes. I think the biggest difference between -- from state to state is whether adoption is mandated initially or whether it starts out as optional or voluntary. In the case of the state that we signed this quarter, it is not yet mandated. So we expect it will start out at somewhere around a $2 million ARR run rate and that probably starts at some point in early 2027, and then would ramp up to $10 million plus as it becomes mandated. In the case of the state we signed last quarter, it has been mandated. So we expect that ramp up. But I believe that one was closer to $20 million. They are that, that ramp-up will start faster. And it just depends on state policies from state to state how they decide to govern that. H. Moore: Yes. It's not too dissimilar from our and e-filing business that we -- as you remember, 10, 15, 10 years ago, 12 years ago, as we were rolling out e-filing lot of counties were sort of voluntary and then as jurisdictions went mandatory, which will happen over time as they see the value of the solution that then you'll start to see those revenues pick up. Trevor Walsh: Got it. Super helpful color. And maybe just one quick follow-up. Maybe, Lynn, for you, but Brian, feel free to weigh in as well. I know at the Investor Day, you guys talked a little bit about more disincentives or negative types of consequences, i.e., sticks, which you didn't like to use that term, which I get as far as flipping to the cloud. And then I think you had mentioned either in your prepared remarks or some of your comments earlier Lynn that you've rolled out e-mail or comps basically the customers saying kind of what to expect going forward. Any just initial feedback from customers around maybe some of the more negative aspects or the stick pieces of that? Just trying to get a sense of kind of how you think your -- the new order, if you will, of getting people to kind of move faster is kind of being received by the customer base. H. Moore: Yes. Sure, Trevor. I'd say right now, yes, communication has gone out since Investor Day to our clients. And it's really about -- look, we want to be there and hold your hand and work with you on the plan that's going to get you to the cloud. We'd like for you to have a plan in place by -- within a certain time period. We're still focusing mostly on the incentives. We're not necessarily communicating right now what those disincentives will be. But -- and I'll tell you, the feedback we've got from a lot of clients as well, both at Connect that we had this past quarter, our client advisory board, our focus groups and just generally, our general day-to-day working relations with our clients is -- some of them also need our help in sort of selling the move to the cloud internally. And so we're working with them on the talking points that they need to go internally to sell those. The disincentives, I think you'll start to see come out more over the next 12 to 24 months as opposed to something that we're really focusing on right now today. Operator: Your next question comes from the line of Allan Verkhovski with BTIG. Allan M. Verkhovski: You mentioned in the prepared remarks how you are testing pricing models in the market with respect to monetizing AI? And you went through different methods of monetization at the recent Investor Day. But can you just share what your latest learnings are coming out of the support on that front? H. Moore: Yes, sure. I mean right now, the proof points are, it's validating. When I think about how we price AI, and I think we covered this at Investor Day, there's really sort of 3 different models that we're talking about. The first is really what I call start essentials or table stakes. This is stuff that's going to be in our product. It's going to improve our competitive position, it's going to improve our win rates, it's going to improve client set. But I also think it's stuff that as we continue to bake stuff in the product, that may also allow us to increase annual rates. . The second is obviously the subscriptions uplift, where we're bundling the AI capabilities and then outcome-based type of pricing. On the subscription uplift, yes, we're seeing that in the market right now that's being well received. We're still testing and talking with our clients about the amount that we can charge for that and the viability of those going forward, similar with outcome-based, it's still early but it is being validated in the market. And again, you're going to start seeing more meaningful revenues coming from AI, really probably the second half of '27. We'll ramp up between now -- but second half of '27 going into '28, I think you'll start seeing more meaningful revenue. Allan M. Verkhovski: Perfect. And then maybe internally just regarding that early internal productivity benefits you're seeing across development, implementation and service delivery can you just expand on what you're seeing there and how we should think about those benefits alongside your unchanged R&D guidance? H. Moore: Yes. I think right now, some of it's still anecdotal. We're really trying to tease everything out and make sure there's clear ROI before we go invest too much internally on the developer side, we're seeing as much as anecdotally, 30% increase in productivity. I don't know that, that translates into anything other than our developers are going to be 30% more productive. And the way I view productivity is we want more productivity, not less. In the areas of support and implementation, we have some -- we have some guidelines that we're shooting towards. I'm not ready to publish those. But we are looking at different ways to both shorten implementations, which shortens time to value, which increases client sat, which helps us with cross-sells and upsells and same thing on the support side, how can our clients get their answers faster and we've got a lot of things in motion there. But again, it's still a little too early to say hey, this is going to mean x return or y return. All I can say is we're extremely diligent to make sure that whatever investments we're making in AI are going to have a meaningful ROI attached with them. Operator: Your next question comes from the line of Gabriela Borges with Goldman Sachs. Unknown Analyst: This is Grayson on for Gabriela. I wanted to start with a little bit of the labor augmentation thesis that you discussed at your Investor Day and sort of you outlined this vision where AI can expand your TAM beyond targeting traditional software budgets into more of the labor-related spending I know it's early, but I wanted to ask, what evidence have you seen so far that customers are evaluating solutions through an ROI lens tied to labor rather than traditional software procurement? And are there any specific workflows where you're starting to see that shift materialize? . H. Moore: Yes, that's a good question. And I'd say a couple of the products that we talked about earlier on the call, document automation, resident assistant. Those are being viewed specifically through the lens of the labor budget. In fact, one of our clients made the comment as we were going through the sales process that they were going to be able to tap the labor budget to go ahead and procure this product. I think we outlined at Investor Day Tarrant County, which is a document automation, product. And we went from, I think, a $900,000 SaaS arrangement to about a $1.3 million total ARR. So pretty significant increase. We've seen it with resident assistant being able to document fewer amount of calls and Q&A that jurisdictions employees had to take because we all know, and we've talked about it for years, is that one of the things the public sector workforce is facing over the coming years is a shrinking labor force, both through retirements and also a lack of hiring and technology. So tapping that labor budget is becoming more meaningful. It's part of our playbook and discussion. We're still in the early innings, like we talked about everything else, but it is getting traction in the market. Unknown Analyst: Great. And then just one quick follow-up. In your prepared remarks, you highlighted the 40-plus AP automation wins in the quarter as customers sort of adopt these workflows, how should investors think about the economic implications for Tyler. Like do you see a bigger opportunity here for incremental software ARR, higher payments penetration or sort of a combination of both? H. Moore: Yes. Brian Miller: It's a combination of both for sure. AP automation is when we called out. on an individual basis as we add that to our ERP clients. It's a relatively small uplift in the SaaS fees, but it is a SaaS fee uplift, but it does open up additional opportunities to leverage payments in association with that automation of invoice processing. So it creates a new conversation and a new opportunity to bring in more transaction-based revenues tied to that automation. Operator: Your next question comes from the line of Andrew Sherman with TD Cowen. Andrew Sherman: Great. And I like the new format on the call, so kudos on that. Lynn, on the -- how would you rank order the product strength across the different portfolio of products across ERP, public safety, financials and Courts & Justice, how would you rank order those? And how is the pipeline building across those? And how would you drive cross-sell up across -- there are some big cities and counties that might not have all of those core products, what are you working on to drive cross-sell there? H. Moore: Well, I'd say this, when we talk about sort of our Cornerstone products, our view is that we want to be #1 in the market with each of those cornerstones. I wouldn't rank one over the other. You can look at it in terms of -- I wouldn't rank one over the other in terms of our competitiveness, our functionality but you can look at some things where we sit in the market and our market share, clearly, a place like court, we have a lot higher market share. There's fewer competitors and we really dominate that market. ERP and public safety, more competitive markets, but our competitive position is really strong and continues to get stronger. We've made significant investments, for example, in our ERP product over the last 12 months. And we're always doing that. Public safety, some really nice wins this quarter against some really key competitors which I always like to see. So I would say, generally, when I look at our portfolio, again, our flagship products, we want them to be #1, and I believe they're very competitive in each of the markets they serve. Brian Miller: We've talked about cross-sell as being one of the key pillars of our growth. You're correct that especially in larger customers, very few have all of our flagship products. And there are a lot of underpinnings that we're doing to create those opportunities to make a more compelling story for why that next product and the next product when it comes time to replace those should come from Tyler. So we've talked a lot about going from that 2 or 3 products a customer to 8 to 10 products to customer and all of the things that we're doing to encourage that, that customer base that we have that doesn't have all those flagship products is a huge opportunity for us. H. Moore: Yes. I think one of our biggest cross-sells of the quarter was out of our ERP division. We sold to the Mississippi Department of Health, our Enterprise permit and licensing enterprise health. It was a $700,000 ARR deal, and that came -- that was leveraged by our DSD or former NIC relationships. We've made great inroads with the State of Mississippi, and we're looking to turn that into what we call Total Tyler state. But that doesn't happen without those relationships across our different divisions. Andrew Sherman: That's great. One more follow-up, Lynn. The Riverside deal in public safety was -- seemed like a big one any way to ballpark size that and just the state of the public safety market and budgets, I would love to hear any color on that. H. Moore: Yes. I think the public safety market is pretty healthy and budgets seem to be stable as generally across all of our business lines. Our competitiveness is really strong. I'm happy with where we are in public safety. As you pointed out, we won some nice deals. As I mentioned, I don't like to call out competitors, but we had some really nice competitive wins against some very competitive companies in Q2 and the momentum and engagement and my general excitement about what we're doing at Public Safety remains high. I don't have the Riverside deal off the top of my -- at the tip of my tongue. I'm not sure we won a nice deal in Santa Cruz, California. Maybe that was -- I don't have Riverside, that was about a $660,000 ARR deal for our RMS and enforcement mobile solutions. Operator: Your next question comes from the line of Michael Turrin with Wells Fargo Securities. Michael Turrin: Appreciate you taking the questions. I guess just first on the Q2 metrics, I think what stands out is the new SaaS ACV and flip ACV growth. So I'm just curious, Brian, how durable is that from your perspective at this point? Is there anything we should be just mindful of in terms of comparison seasonality there or just the right way to think about those metrics going forward? Brian Miller: Yes. I -- obviously, those are really good growth numbers. And regardless of what the comp was, those were our SaaS bookings and our total bookings were all-time quarterly records. So it was the highest quarter ever for those bookings, again, regardless of the comp from last year. Clearly, as we talked about a lot last year, the first 2 quarters of last year, were weaker booking quarters. So those are against somewhat easier comps, although the second quarter improved sequentially from the first and then the second half of last year was stronger. . I think one thing to point out is that both last quarter and this quarter, the good bookings number weren't really on the back of mega contracts are really big deals. The biggest deals were transaction-based and they're not showing up in those SaaS numbers. So it was just a lot of volume of good sort of traditional mid-sized deals and a handful of a little bit larger deals, but no mega deals. Those things are still in the pipeline. It's hard to tell what quarter those could fall in. So the comps are a little harder in the second half. But as we said, the underlying factors of the strength that we're seeing in RFPs, the strength in the activity in sales demos, all those point to continued good bookings throughout the rest of the year. Michael Turrin: That's great. Just as the follow-up, Brian, you've now bought back more than 5.5% of shares outstanding year-to-date. Just maybe speak to how you're approaching the buyback from here as part of your overall capital allocation framework, what would lead you to hold that cadence going forward throughout the rest of the year versus moderate? Or what could we see going forward? Brian Miller: Yes, Michael. Over the years, I'd say our priorities have sort of evolved based on what's going on in the market, what's going on in the business at a particular time. If you go back 10 years ago, our priority focus was internal investment in 2017, 2018. Coming out of NIC, our priorities were debt repayment. I'd see right now that share repurchases are taking a higher priority for me. And that's based on the confidence I have in our 2030 outlook and what I see the valuation in the stock market, I think it's a great time to buy right now. There have been 3x in Tyler's history, where we've really sort of gone hard at it, I'd say, in the early 2000s post-recession, 2010, 2012. And now we've sprinkled buybacks in between those times. But I just think where things sit today and the valuation that Tyler has in the market, our free cash flow, our outlook, the confidence in our future it's a compelling value. And I think you'll see us continue to execute on that as we try to continue to reduce our share count and then really maintain that reduced count going forward. Operator: Your next question comes from the line of Jonathan Ho with William Blair. Please go ahead. . Jonathan Ho: I wanted to just better understand. I think you said in the prepared remarks that you're embedding AI into your workflows. Can you provide a little bit more color on what customers are looking for in terms of embedding and what the opportunity is to more broadly build sort of that AI functionality across your entire portfolio? . H. Moore: Yes. I think at a high level, Jonathan, we're talking about automating just more routine work, reducing those manual responses helping our clients be able to make better decisions through data assistance and generative AI predictive and analysis, basically just generally bring our clients up to do other things. again, we talked earlier about labor savings. It's not just -- it's making their day-to-day work go faster and making them more efficient in addition to being able to compensate for lost labor actually in the market. And you see that stuff with things like we talk about our document automation, our party-based budgeting, AP automation, report writing assistance. Georeconciliations, policy assistance, permanent review assistance, just things like that, are getting inside of our products inside of our workflows and making them our clients be more efficient with their daily tasks. Brian Miller: And in terms of that being embedded in the workflows as opposed to bolted on, that's really key to our clients. We're hearing from them that's what they're looking for. They want those -- from Tyler, they want them integrated and embedded in the system of record that's doing the work, and it's really a matter of trust and their comfort with how that data is being handled, how those models are working, and they want that from the same provider as the system. Jonathan Ho: That makes a ton of sense. And it seems like it would sort of have you bring AI to the customers as opposed to large language model provider. Can you talk a little bit about maybe the spending environment, particularly as new state and local budgets start to unlock. I know you've said that the pipeline looks pretty good here, but I just want to get a sense for -- on a forward-looking basis, whether there's any concerns out there over the macroeconomic or anything that you're seeing on either the compliance driver side or grant driver side as well? H. Moore: Yes, Jon, we're not seeing any real change. I would say the market dynamic budgets are generally healthy and stable. It's been pretty consistent now for the last, I don't know, several quarters, maybe 1.5 years, 2 years. So I think that's pretty stable. A year ago, for example, we were talking about some decisions taking a little bit longer. The market didn't go away, but some decisions. We're actually starting to see it's still anecdotal, particularly like in our ERP area that an uptick in the decisions actually being made. But generally speaking, the overall demand environment, the overall health is pretty consistent with where it's been. Brian Miller: And I think we're -- customers, and it certainly varies from place to place, but where customers are seeing pressure. That's where the ROI analysis comes in and becomes more important as they work -- drive towards more efficiencies and doing more with less, the understanding of how technology can make that happen. So looking at that ROI and that's also, as we talked about earlier, where the -- in certain instances where the transaction-funded model is attractive. So the systems that we've talked about states acquiring under that model. They don't have to appropriate budget funds for that. It operates sort of outside of the budget through self-funded revenues and the budget pressure does not enter into the equation. Operator: Your next question comes from the line of Mark Schappel with Loop Capital. . Mark Schappel: Lynn, in the past, you've discussed the goal of getting every client onto a single code stream for each of your products. I was wondering if you could just provide some additional details on how far along you are in that journey and maybe which businesses such as [indiscernible] or maybe the furthest along. H. Moore: Yes. There's a lot to unpack there. So -- at Investor Day, we talked about our whole cloud Living initiative, which is to get everybody on that single stream that's got continuous improvement, continuous delivery. Before we can even achieve that, we've got to get people down to a single version when we're going to get them in the cloud. You will see us start to enroll cloud living. We're launching pilots throughout 2027, and we're going to start to have clients referenceable on '28. When you look generally at version control, what we've done, for example, you mentioned in courts over the last 3 years, we've gone from 89% of our clients being on a legacy system to only 7% today. And look at our enterprise ERP, we've got about 85%, 90% are on the current version. That's not necessarily our cloud living version, but getting them current, then moving the cloud and getting them into our cloud living road map is a goal that's going to drive higher clients, higher retention, increased upsell and cross-sell opportunities. It's pretty exciting. It's a pretty bold vision. We've been working on it for many years, but you're going to continue to see gains year-over-year over the next -- over the coming years. Operator: Your next question comes from the line of Clarke Jeffries with Piper Sandler. Please go ahead. . Clarke Jeffries: I noticed had another sizable city of Orlando public safety slip. And you made the comment at the Analyst Day that, that segment has really had to change a part when it comes to SaaS, nearly 100% going to cloud. Just wondering if we could get a state of affairs across products, really what segment remains the biggest set of holdouts. Is that the state court and just tactically, is the state team going to be taking over tackling those slips on the largest core clients at the state level? Will they be working jointly with Courts & Justice team? And then one follow-up. H. Moore: Yes. I think the answer to the second question is I don't envision that. Those are -- it's a smaller client base. Our relationships are strong and deep within our Courts & Justice division. So they'll they'll continue to work those. And there, just like other places, we talk about how the clients -- they like to watch what their neighbors do and they like to see it successful we did that Idaho state flip a few years ago. That was the first one. Everybody watched it, and that spurred more interest. . Generally speaking, yes, Orlando was a really nice SaaS flip for our Public Safety division. It involved I think our CAD product, our RMS and our newer product, emergency networking that came through acquisition last year. I don't think there's really a segment of the market that has sort of the reluctance that we used to talk about a few years ago with public safety. Public safety is moving all -- is moving to SaaS. That's all we're selling. We're actually one of the a pure SaaS provider. Many of our competitors are still more in the lift and shift mode. But I think just generally, across the board, I don't think there's any sort of structural or individual vertical market resistance. It's just the same factors that we've been talking about for the last couple of years. And as more clients go, as more see the value as we continue to roll out incentives and eventually disincentives we'll reach our goals that we outlined in Investor Day. Clarke Jeffries: Perfect. And then I did see federal courts of Australia for the record getting that transaction. Just wondering if there's any appetite to follow with other products in the portfolio for the international opportunity, anything that would make sense based of for the record, having that presence -- and then remind us if it's an inside or a field sales motion for some less international markets? H. Moore: So FTR is based in Australia. So not surprising, they had a presence. They used to own a manual transcription business there. was actually sold off when we owned a piece of FTR several years ago. I don't know that FTR -- they'll continue to do things in Australia, and they'll continue to have sales international. They had a couple of international sales, small deals this past quarter. I don't think it changes our overall strategy, which is -- we still got a lot of runway ahead in front of us. We've got a lot of strategic initiatives. We're rolling out -- moving our U.S. clients in the cloud. We're rolling out AI here. So I think it would be a bit of a distraction to think that we're going to start taking other products more international when we've got still such great runway in front of us here. Operator: There are no further questions at this time. I will now turn the call back to Lynn Moore for closing remarks. H. Moore: Thanks, Maria, and thanks, everybody, for joining our call today. If you have any further questions, please feel free to contact Brian Miller or myself. Thanks again, and have a great day. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Tyler Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tyler Technologies wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Tyler Technologies. The Motley Fool has a disclosure policy. Tyler Technologies (TYL) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Tyler Technologies, Inc.? Here are five stocks we like better. Strong second-quarter performance: Tyler Technologies reported 21.7% SaaS revenue growth, record SaaS and total bookings, and record quarterly free cash flow, supported by healthy public-sector demand. AI and cloud adoption are progressing: AI offerings remain a small near-term revenue contributor, but management expects a more meaningful impact in 2027–2028. Tyler is using AI features, cloud-only functionality and pricing incentives to accelerate customer migrations to the cloud. Capital allocation and growth initiatives advanced: Tyler expanded its Courts & Justice position through the For The Record acquisition, expects about 100 basis points of margin expansion, and repurchased more than 5.5% of shares outstanding year-to-date. Time to Buy These Up-and-Coming Software Firms? Tyler Technologies (NYSE:TYL) said its second-quarter performance was marked by 21.7% growth in SaaS revenue, record SaaS bookings, record total bookings and record second-quarter free cash flow, as public-sector demand remained supported by government modernization and digital-transformation priorities. Executive Chair, President and CEO Lynn Moore said the company also completed several strategic initiatives during the quarter, including an Investor Day outlining higher Tyler 2030 targets, a convertible debt offering, share repurchases and the acquisition of For The Record. Moore said the acquisition strengthens Tyler’s position in the Courts & Justice market. → Microsoft Just Flipped the AI Spending Narrative Overnight Motorola Approaches Buy Point As Analysts Boost Price Targets “Public sector demand remains healthy,” Moore said, citing government investment in cybersecurity, operational efficiency and constituent engagement. He added that Tyler is seeing continued momentum in transaction-based revenue, progress in cloud operations and early customer adoption of artificial intelligence offerings. Moore said AI has not disrupted or delayed decisions involving the company’s broader product portfolio or cloud conversions. While there is “a lot of excitement and energy” around Tyler’s AI products, he characterized the company’s core business environment as “business as usual.” → 2 Unique Space ETFs That Could Upend the Industry 2 Must-Have Specialized ETFs for the Long-Term Investor Tyler is positioning AI capabilities as one of several incentives for customers to move from on-premises deployments to the cloud. Moore said certain AI features, cloud-only functions and the company’s planned Cloud Living Release Model will be available through cloud releases. The company is also working with customers on transitional pricing and plans to continue expanding incentives for cloud adoption. The company expects AI to become a more meaningful contributor to revenue in the future rather than immediately. Chief Financial Officer Brian Miller said direct AI offerings remain a small share of new annual contract value, with more meaningful revenue contribution expected in roughly 12 to 18 months. Moore said AI-related revenue could become more material in the second half of 2027 and build further into 2028. → MarketBeat Week in Review – 07/27- 07/31 Moore said Tyler is testing three broad AI monetization approaches: embedding essential capabilities into products, subscription-based uplifts for AI functionality and outcome-based pricing. He said subscription uplift pricing is being received well, while the company continues to test pricing levels and outcome-based arrangements. Among products gaining traction, Moore cited Document Automation, Resident AI Assistant and Priority Based Budgeting. He said Resident AI Assistant has been adopted by eight states, while Miller said annual recurring revenue for such deployments typically reaches multiple millions of dollars, though results vary by state. Excluding a Texas contract, Tyler’s transaction revenue grew about 10%, according to Miller. He attributed the growth to higher transaction volumes, new customers and software arrangements funded through transaction-based revenue models. Tyler’s largest software deals in both the first and second quarters were transaction-based rather than SaaS bookings, Miller said. One statewide contract for the company’s digital motor-vehicle titling and electronic-lien solution is expected to begin at about a $2 million annual recurring revenue run rate in early 2027 and could rise to more than $10 million as adoption becomes mandatory. Miller said transaction-funded models can be particularly attractive for products involving citizen or business interactions with government, including digital titling and outdoor recreation services. Such arrangements can avoid the need for customers to use appropriated budget funds. On the For The Record acquisition, Moore said Tyler remains as enthusiastic about the business as it was when it initially invested in the company 11 years ago. For The Record won an Australian opportunity valued at approximately $1.6 million in annual recurring revenue during the quarter, along with seven or eight additional deals, he said. Moore said AI is also becoming a factor in Tyler’s acquisition analysis. The company is evaluating whether prospective acquisition targets can add AI capabilities and is scrutinizing products that could face displacement risks from AI. Miller said Tyler’s spending outlook and hiring plans have not materially changed. The company expects margins to expand through the year, with the midpoint of its guidance implying roughly 100 basis points of margin expansion. Hiring is expected to remain relatively limited in the second half. Record second-quarter free cash flow was aided by approximately $30 million less in cash taxes than in the comparable quarter a year earlier, primarily related to impacts from the One Big Beautiful Bill, Miller said. Moore said share repurchases have become a higher capital-allocation priority due to management’s confidence in Tyler’s 2030 outlook, free-cash-flow profile and valuation. He said the company had repurchased more than 5.5% of shares outstanding year-to-date and expects to continue efforts to reduce its share count. Management said booking strength during the first half was driven by a broad volume of mid-sized and somewhat larger traditional deals rather than mega contracts. Miller said the company continues to see strength in requests for proposals and sales demonstrations, supporting expectations for continued bookings activity through the remainder of the year. Moore said public-safety budgets appear stable and the company recorded competitive wins in the segment. He also pointed to cross-selling opportunities among larger customers that do not yet use all of Tyler’s core products. In one example, Tyler sold Enterprise Permitting & Licensing and Enterprise Environmental Health products to the Mississippi State Department of Health in a deal valued at about $700,000 in annual recurring revenue. Tyler is also advancing its Cloud Living initiative, which aims to move customers to current product versions, cloud deployments and eventually a continuous-delivery model. Moore said the company plans to launch pilots during 2027 and expects to have referenceable customers in 2028. In Courts, Tyler has reduced the share of clients on legacy systems to 7% from 89% three years ago, he said. Tyler Technologies, Inc is a provider of software and technology services for the public sector, delivering integrated systems that help government and public agencies manage operations, finances and citizen services. Headquartered in Plano, Texas, the company focuses on developing and implementing solutions for local and state governments, school districts, courts and public safety organizations. Its offerings are aimed at modernizing administrative workflows, improving transparency and enabling digital interactions between governments and the communities they serve. Tyler's product portfolio spans enterprise resource planning and financial management, tax and billing systems, court case and records management, public safety solutions (including computer-aided dispatch and records management), land and property management, permitting and licensing, and enterprise asset management. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Tyler Technologies Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Tyler Technologies (TYL) reported $645.1 million in revenue for the quarter ended June 2026, representing a year-over-year increase of 8.2%. EPS of $3.08 for the same period compares to $2.91 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $646.95 million, representing a surprise of -0.29%. The company delivered an EPS surprise of +0.65%, with the consensus EPS estimate being $3.06. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Tyler Technologies performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Annualized Recurring Revenues (ARR): $2.24 million versus $2.27 million estimated by five analysts on average. Revenue- Subscriptions: $453.72 million versus the six-analyst average estimate of $460.62 million. The reported number represents a year-over-year change of +12%. Revenue- Professional services: $63.17 million compared to the $60.1 million average estimate based on six analysts. The reported number represents a change of +7.8% year over year. Revenue- Maintenance: $105.81 million compared to the $107.85 million average estimate based on six analysts. The reported number represents a change of -5.6% year over year. Revenue- Non-Recurring: $85.56 million compared to the $79.99 million average estimate based on six analysts. The reported number represents a change of +8.4% year over year. Revenue- Recurring: $559.53 million compared to the $568.46 million average estimate based on six analysts. The reported number represents a change of +8.2% year over year. View all Key Company Metrics for Tyler Technologies here>>> Shares of Tyler Technologies have returned +10.6% over the past month versus the Zacks S&P 500 composite's -1.5% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tyler Technologies, Inc. (TYL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. SaaS Revenue Growth: 21.7% growth in SaaS revenue. SaaS Bookings: Record SaaS bookings for the quarter. Total Bookings: Record total bookings for the quarter. Free Cash Flow: Record second quarter free cash flow. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record SaaS bookings, total bookings, and second-quarter free cash flow highlight strong operational execution. SaaS revenue grew 21.7%, driven by healthy public sector demand for digital transformation and modernization. The acquisition of For the Record is performing well, with a major win in Australia and a strong pipeline. AI strategy is gaining traction with early customer adoption, including a resident AI assistant now used by eight states. Aggressive share repurchases (over 5.5% of shares outstanding year-to-date) reflect strong confidence in long-term growth and value. Organic revenue growth was about two points lower than total growth, indicating some reliance on acquisitions. Third-party payment processing headwinds impacted margins in the prior year, though they are now subsiding. AI revenue contribution remains very small and is not expected to be meaningful until the second half of 2027. The timing of large cloud conversion deals can be lumpy and uncertain, especially for larger customers. The company faces tougher comparisons in the second half of the year for SaaS bookings, though the pipeline remains strong. Warning! GuruFocus has detected 8 Warning Signs with TNET. Is TYL fairly valued? Test your thesis with our free DCF calculator. Q: Can you unpack what's driving the improvement in transaction revenues (excluding the Texas contract)? Is it volumes, mix, or new logos, and how do you expect the mix shift towards software-tied transaction streams to evolve through the second half of the year?A: Brian Miller, CFO: It's really all three. We are seeing higher volumes, new names from bundling transaction services with new sales and driving it back into our installed base, and providing software under a transaction-based arrangement. The largest software deals of the quarter were transaction-based, including a statewide deal for our digital motor vehicle titling and electronic lien solution. Q: How are you thinking about gating specific capabilities, including AI, to cloud only over the next year, and what principles determine whether something stays available on-prem versus becoming cloud exclusive?A: H. Lynn Moore, President & CEO: We've outlined incentives for clients to flip to the cloud, and one of those will be AI functionality that will be solely available in our cloud release. We recently sent messages to our client base about their need to get a path to the cloud. There will be many incentives, including cloud-only features, a faster time to value, and transitional pricing. Q: What brings customers to the table for the resident AI assistant, and what is the typical ARR uplift for a solution like that once fully deployed in a state?A: H. Lynn Moore, President & CEO: Interest is driven by the desire to ease the burden on state agencies in serving their citizens. Clients watch what happens in other states, and when they see measurable ROI, it drives demand. Brian Miller, CFO: The ARR varies from state to state, but typically it's in the multiple millions of dollars. Q: What are your latest learnings from testing pricing models for monetizing AI in the market?A: H. Lynn Moore, President & CEO: The proof points are validating our approach. We have three models: essentials baked into products, subscription uplifts which are being well-received, and outcome-based pricing which is still early. You will start seeing more meaningful revenues from AI in the second half of 2027 and into 2028. Q: What evidence have you seen so far that customers are evaluating AI solutions through an ROI lens tied to labor rather than traditional software procurement?A: H. Lynn Moore, President & CEO: Products like document automation and resident assistant are being viewed through the lens of the labor budget. One client mentioned they could tap the labor budget to procure the product. We've seen significant ARR increases from these solutions as they help jurisdictions compensate for a shrinking labor force. Q: How durable is the strong new SaaS ACV and Flip's ACV growth from Q2? Is there anything to be mindful of in terms of comparison seasonality?A: Brian Miller, CFO: These were all-time quarterly records for SaaS and total bookings. While the comps from last year were easier, the good bookings were not on the back of mega deals but a volume of good mid-sized deals. The comps are a little harder in the second half, but the underlying factors of strength in RFPs and sales demos point to continued good bookings. Q: How are you approaching the buyback from here as part of your overall capital allocation framework?A: H. Lynn Moore, President & CEO: Share repurchases are taking a higher priority based on my confidence in our 2030 outlook and the current stock market valuation. I think it's a great time to buy. You will see us continue to execute on this to reduce our share count and maintain that reduced count going forward. Q: What are you seeing in the public safety market and budgets? Can you provide any color on the Riverside deal?A: H. Lynn Moore, President & CEO: The public safety market is pretty healthy, and budgets seem stable. Our competitiveness is strong, and we had some nice competitive wins in Q2. The Santa Cruz, California deal was about a $660,000 ARR deal for our RMS and Enforcement Mobile Solutions. Q: How far along are you in the journey of getting every client onto a single code stream for each product, and which businesses are furthest along?A: H. Lynn Moore, President & CEO: We are launching pilots for our "cloud living" initiative throughout 2027. In terms of version control, in our courts business, we've gone from 89% of clients on a legacy system to only 7% today. For enterprise ERP, about 80-90% are on the current version. Getting them current and then moving them to the cloud is a goal that will drive higher client satisfaction and retention. Q: What segment remains the biggest set of holdouts for moving to the cloud? Will the state team be taking over to tackle flips on the largest court clients?A: H. Lynn Moore, President & CEO: I don't think there is any structural or individual vertical market resistance. Public safety is moving to SaaS, and that's all we're selling. Our relationships are strong within our courts and justice division, so they will continue to work those flips. As more clients see the value and we roll out incentives, we will reach our goals. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Tyler Technologies TYL reported second-quarter 2026 non-GAAP earnings of $3.08 per share, which increased 0.9% year over year and surpassed the Zacks Consensus Estimate of $3.06. Quarterly revenues increased 8.2% year over year to $645.1 million, missing the consensus estimate by 0.29%. The quarter was highlighted by accelerating SaaS adoption, record bookings, robust recurring revenue growth and record second-quarter free cash flow. Annualized recurring revenue (ARR) reached $2.24 billion, up 8.2% year over year. Recurring revenues increased 8.2% year over year to $559.5 million, representing 86.7% of total revenues. Subscription revenues grew 12% to $453.7 million, reflecting continued customer migration toward Tyler Technologies' cloud-based offerings. Management noted that recurring revenue growth continues to benefit from strong public-sector demand, healthy cloud migrations and increasing adoption of mission-critical software solutions. The company also raised its long-term recurring revenues, operating margin and free cash flow targets during its June Investor Day, underscoring confidence in its Tyler 2030 strategy. Tyler Technologies, Inc. price-consensus-eps-surprise-chart | Tyler Technologies, Inc. Quote SaaS revenues grew 21.7% year over year to $230.6 million, marking 22 consecutive quarters of at least 20% SaaS revenue growth. Transaction revenues increased 3.5% to $223.1 million. Management highlighted record SaaS bookings and total bookings during the quarter, driven by healthy public-sector demand and continued cloud modernization initiatives. Governments remain focused on cybersecurity, digital transformation, operational efficiency and AI adoption, supporting a strong sales pipeline. During the quarter, Tyler Technologies secured several notable wins, including another statewide Electronic Vehicle Registration, Title and Lien implementation expected to generate more than $10 million annually when fully adopted. The company also expanded AI deployments through agreements with customers such as Washtenaw County, the City of Doral and the State of Indiana. GAAP operating income was $95.1 million, while non-GAAP operating income increased 4.8% year over year to $165.7 million. GAAP earnings were $2.23 per share, while non-GAAP earnings came in at $3.08 per share. Adjusted EBITDA increased 4.3% to $176.4 million. Management attributed the profitability improvement to disciplined execution, an increasingly recurring revenue mix and continued operational efficiencies while maintaining investments in long-term growth initiatives. Cash flow from operations increased 26.5% year over year to $124.4 million, while free cash flow jumped 34.7% to a record second-quarter level of $118.5 million. The company also strengthened its financial position during the quarter by completing the $212.7 million acquisition of For The Record, issuing $1.4 billion of convertible senior notes and repurchasing 1.62 million shares for approximately $505 million. Tyler ended the quarter with more than $1 billion in cash and investments and announced a new $1.5 billion share repurchase authorization. For full-year 2026, Tyler Technologies expects total revenues between $2.535 billion and $2.575 billion, non-GAAP earnings per share between $12.95 and $13.20, free cash flow margin of 26-28%, R&D expense of $245-$250 million and Capital expenditures of $18-$20 million. Tyler Technologies currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the broader Zacks Computer and Technology sector are Analog Devices ADI, Applied Materials AMAT and Cisco Systems CSCO, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Shares of Analog Devices have rallied 37.1% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating an increase of 59.4% year over year. Shares of Applied Materials have skyrocketed 101.1% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 4 cents over the past 30 days, indicating a rise of 28.9% year over year. Cisco Systems shares have surged 48.7% year to date. The Zacks Consensus Estimate for CSCO’s fiscal 2026 earnings is pegged at $4.28 per share, unchanged over the past 30 days, indicating an increase of 12.3% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tyler Technologies, Inc. (TYL) : Free Stock Analysis Report Analog Devices, Inc. (ADI) : Free Stock Analysis Report Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report Applied Materials, Inc. (AMAT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by record SaaS and total bookings, reflecting healthy public sector demand for digital transformation and cybersecurity modernization. The acquisition of For The Record (FTR) strengthens the company's leadership in the courts and justice market, validating an M&A strategy focused on AI-defensible products. Management attributes strong transaction revenue growth to higher volumes, new logo acquisitions, and a strategic shift toward bundling transaction services with software. Operational efficiency is being prioritized through 'Cloud Living' initiatives, aiming to move clients to a single code stream for continuous delivery and higher retention. Public sector demand remains stable despite macro concerns, as clients increasingly view technology through an ROI lens to offset shrinking labor forces. The company is leveraging its domain expertise to embed AI directly into core workflows, prioritizing trust and data security over generic third-party AI solutions. Management expects meaningful AI-driven revenue to begin materializing in the second half of 2027 as commercialization and agentic use cases ramp up. The company is transitioning from offering 'carrots' (incentives) to 'sticks' (disincentives) over the next 12 to 24 months to accelerate on-premise to cloud migrations. Guidance assumes continued margin expansion of approximately 100 basis points for the full year, supported by limited hiring in the second half of 2026. Strategic focus is shifting toward 'Total Tyler' states, leveraging existing relationships to cross-sell the full portfolio of ERP, public safety, and justice solutions. Future capital allocation will prioritize share repurchases, reflecting management's confidence in the Tyler 2030 targets and current market valuation. A $30 million reduction in cash taxes compared to the prior year significantly boosted second-quarter free cash flow. Third-party payment processing headwinds that impacted 2025 have largely stabilized and are not expected to be a major factor in 2027. The $10 million ARR DMV deal in the quarter is subject to a ramp-up period, starting at approximately $2 million in 2027 until state mandates drive full adoption. Management noted that while AI productivity gains for developers are as high as 30%, these are currently viewed as internal efficiency gains rather than direct cost reductions. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management stated it is 'business as usual' and they have not seen AI discussions slow down core software procurement cycles. The public sector market moves slower, but there is high energy around early AI product releases. Tyler is testing three models: 'table stakes' features to drive retention, subscription uplifts for bundled AI, and outcome-based pricing. Early market feedback on subscription uplifts has been positive, though meaningful revenue is still 12-18 months away. New AI functionality and the 'Cloud Living' release model will be exclusive to cloud deployments to incentivize migrations. Management is working with clients to provide the internal talking points needed to sell the cloud transition to conservative government stakeholders. Share repurchases have taken a higher priority due to confidence in 2030 targets and perceived stock undervaluation. The company intends to maintain a reduced share count going forward using strong free cash flow.

Tyler Technologies (TYL) came out with quarterly earnings of $3.08 per share, beating the Zacks Consensus Estimate of $3.06 per share. This compares to earnings of $2.91 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +0.65%. A quarter ago, it was expected that this information management software provider would post earnings of $3.01 per share when it actually produced earnings of $3.09, delivering a surprise of +2.66%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Tyler Technologies, which belongs to the Zacks Internet - Software and Services industry, posted revenues of $645.1 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.29%. This compares to year-ago revenues of $596.12 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Tyler Technologies shares have lost about 26.6% since the beginning of the year versus the S&P 500's gain of 8.5%. While Tyler Technologies has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Tyler Technologies was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.37 on $652.97 million in revenues for the coming quarter and $12.82 on $2.56 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software and Services is currently in the top 22% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Nebius Group (NBIS), another stock in the same industry, has yet to report results for the quarter ended June 2026. This an AI-centric cloud platform is expected to post quarterly loss of $0.67 per share in its upcoming report, which represents a year-over-year change of -76.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Nebius Group's revenues are expected to be $535.03 million, up 409.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tyler Technologies, Inc. (TYL) : Free Stock Analysis Report Nebius Group N.V. (NBIS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research