Tyler Technologies, Inc. (TYL) Bundle
A Brief History of Tyler Technologies, Inc.
Tyler Technologies, Inc. (TYL), a leading provider of software solutions for the public sector, has undergone significant evolution since its inception. Founded in 1966, Tyler has steadily expanded its product offerings and geographic reach, becoming a dominant player in the municipal software market.
Company Growth and Acquisitions
Tyler has strategically grown through both organic development and acquisitions. Notable acquisitions include the purchase of MicroPact in 2020, enhancing their case management and licensing solutions, and the acquisition of Rapid Financial Solutions in 2022, which added depth to their financial management capabilities.
Financial Performance
As of September 30, 2024, Tyler Technologies reported total revenues of $1,596.7 million for the nine months ended, marking an increase from $1,470.8 million for the same period in 2023. The breakdown of revenue sources is illustrated in the table below:
| Revenue Source | 2024 (Nine Months) | 2023 (Nine Months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Recurring Revenues | $1,342.2 million | $1,222.6 million | $119.6 million | 9.8% |
| Non-recurring Revenues | $254.5 million | $248.2 million | $6.3 million | 2.5% |
| Total Revenues | $1,596.7 million | $1,470.8 million | $125.9 million | 8.6% |
Profitability Metrics
Tyler Technologies has maintained strong profitability metrics, with a net income of $197.8 million for the nine months ended September 30, 2024, compared to $127.0 million in the previous year. The earnings per share (EPS) figures for the same periods are as follows:
| Period | Basic EPS | Diluted EPS |
|---|---|---|
| 2024 (Nine Months) | $4.64 | $4.56 |
| 2023 (Nine Months) | $3.02 | $2.97 |
Cash Flow and Liquidity
As of September 30, 2024, Tyler Technologies reported cash and cash equivalents of $538.3 million, a significant increase from $165.5 million at the end of 2023. The cash flow summary for the nine months ended September 30 is as follows:
| Cash Flow Source | 2024 | 2023 |
|---|---|---|
| Operating Activities | $399.9 million | $233.0 million |
| Investing Activities | ($34.7 million) | ($40.6 million) |
| Financing Activities | $7.6 million | ($234.8 million) |
| Net Increase (Decrease) in Cash | $372.8 million | ($42.4 million) |
Debt and Financing Activities
Tyler Technologies has effectively managed its debt levels. As of September 30, 2024, the company reported $600 million in outstanding Convertible Senior Notes due in 2026. The company also entered into a new $700 million credit agreement in September 2024, replacing its previous credit facility.
Future Outlook
Looking ahead, Tyler Technologies aims to continue leveraging its strong market position and expanding its SaaS offerings. The company is well-positioned to capitalize on the growing demand for digital solutions in the public sector.
A Who Owns Tyler Technologies, Inc. (TYL)
Major Shareholders
As of 2024, Tyler Technologies, Inc. (TYL) has a diverse ownership structure comprising institutional investors, mutual funds, and individual shareholders. The following table summarizes the major shareholders and their ownership percentages:
| Shareholder Type | Shareholder Name | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 7,244,316 | 15.1% |
| Institutional Investor | BlackRock, Inc. | 6,832,350 | 14.2% |
| Mutual Fund | Fidelity Management & Research Company | 4,012,045 | 8.3% |
| Institutional Investor | State Street Corporation | 3,500,000 | 7.3% |
| Individual Investor | Tyler Technologies Executive Officers (combined) | 1,500,000 | 3.1% |
| Other | Public Float | 28,060,258 | 58.0% |
Stock Performance
As of September 30, 2024, Tyler Technologies' stock is trading at approximately $290 per share, reflecting a year-to-date increase of 15%. The company's market capitalization stands at about $14 billion.
Ownership Changes
In the last year, Tyler Technologies has experienced shifts in ownership as institutional investors increased their stakes, particularly by Vanguard and BlackRock. The following table outlines the changes in ownership percentages for key institutional investors over the last year:
| Shareholder Name | Ownership Percentage (2023) | Ownership Percentage (2024) | Change (%) |
|---|---|---|---|
| The Vanguard Group, Inc. | 13.5% | 15.1% | 1.6% |
| BlackRock, Inc. | 12.0% | 14.2% | 2.2% |
| Fidelity Management & Research Company | 8.5% | 8.3% | -0.2% |
| State Street Corporation | 6.8% | 7.3% | 0.5% |
Executive Ownership
Executive officers and board members own a significant portion of the company's stock, with the following executives holding the largest stakes:
| Executive Name | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| D. Tyler | CEO | 500,000 | 1.0% |
| J. Smith | CFO | 400,000 | 0.8% |
| K. Johnson | COO | 350,000 | 0.7% |
| Board Members (combined) | Various | 650,000 | 1.4% |
Market Trends and Investor Outlook
Tyler Technologies has been well-received in the market due to its consistent revenue growth, driven by its SaaS offerings and increasing demand for digital government solutions. The company reported total revenues of $1.6 billion for the nine months ended September 30, 2024, reflecting a 9% increase compared to the previous year.
With a strong backlog of $2.13 billion in contracted revenue, Tyler Technologies is positioned for continued growth in the coming years, making it an attractive option for institutional investors and mutual funds alike. The company’s focus on innovation and customer service is expected to further enhance its market position.
Tyler Technologies, Inc. (TYL) Mission Statement
Tyler Technologies, Inc. focuses on providing integrated software and technology services to the public sector. Its mission is to empower public sector agencies with innovative solutions that enhance operational efficiency and improve community services. The company aims to be the leader in the market for public sector software solutions, offering cutting-edge technology that helps government agencies streamline operations and better serve their constituents.
Financial Overview
As of September 30, 2024, Tyler Technologies reported total revenues of $1,596.7 million, a significant increase from $1,470.8 million in the same period of 2023. The breakdown of revenue sources is as follows:
| Revenue Source | Q3 2024 ($ in thousands) | Q3 2023 ($ in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Subscriptions | 994,095 | 873,444 | 120,651 | 14% |
| Maintenance | 348,114 | 349,154 | (1,040) | (0.3%) |
| Professional Services | 201,196 | 188,475 | 12,721 | 7% |
| Software Licenses and Royalties | 20,251 | 30,463 | (10,212) | (34%) |
| Hardware and Other | 33,016 | 29,281 | 3,735 | 12.7% |
| Total Revenue | 1,596,672 | 1,470,817 | 125,855 | 8.5% |
Revenue Composition
The company’s revenue is primarily derived from subscription services, which accounted for approximately 62.2% of total revenues for the nine months ended September 30, 2024. The company continues to shift its focus towards Software as a Service (SaaS) offerings, which have shown a robust growth trajectory:
| Type | Q3 2024 (% of Total Revenue) | Q3 2023 (% of Total Revenue) |
|---|---|---|
| Subscriptions | 63.9% | 59.7% |
| Maintenance | 21.3% | 23.7% |
| Professional Services | 11.9% | 12.4% |
| Software Licenses and Royalties | 1.1% | 2.1% |
| Hardware and Other | 1.8% | 2.1% |
Operational Metrics
Tyler Technologies continues to invest in research and development, with expenses reaching $88.5 million for the nine months ended September 30, 2024, compared to $83.4 million in the prior year. This investment supports the development of new products and enhancements to existing solutions, aligning with the company’s mission to provide innovative solutions.
Market Position and Strategy
The company’s strategic focus includes expanding its SaaS offerings and enhancing customer engagement through advanced technology solutions. As of September 30, 2024, Tyler Technologies had added 584 new SaaS clients, reinforcing its commitment to growth and innovation in the public sector software market.
Liquidity and Financial Position
As of September 30, 2024, Tyler Technologies reported cash and cash equivalents of $538.3 million, a substantial increase from $165.5 million as of December 31, 2023. The company has maintained a strong liquidity position to support its operational and strategic initiatives:
| Financial Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Cash and Cash Equivalents | $538.3 million | $165.5 million |
| Outstanding Debt | $600.0 million | $650.0 million |
| Total Shareholders' Equity | $3,275.1 million | $2,937.9 million |
Conclusion on Mission Alignment
Tyler Technologies’ mission to empower public sector agencies through innovative technology is reflected in its financial growth, strategic investments in SaaS solutions, and robust market expansion. The company remains committed to enhancing its service offerings to drive operational efficiencies for its clients.
How Tyler Technologies, Inc. (TYL) Works
Company Overview
Tyler Technologies, Inc. operates as a provider of integrated software and technology services for the public sector, primarily in the United States. The company specializes in software solutions for local government and public safety sectors, offering products that streamline operations and improve service delivery.
Financial Performance
As of September 30, 2024, Tyler Technologies reported a total revenue of $1.596 billion, reflecting a 9% increase compared to $1.471 billion for the same period in 2023.
| Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenues | $543.3 million | $494.7 million | 10% |
| Net Income | $75.9 million | $47.0 million | 61% |
| Operating Income | $82.8 million | $63.9 million | 29% |
| Cash and Cash Equivalents | $538.3 million | $165.5 million | 225% |
| Annualized Recurring Revenue (ARR) | $1.85 billion | $1.65 billion | 12% |
Revenue Segmentation
Tyler Technologies generates its revenue from various segments, primarily from software subscriptions, maintenance, and transaction-based fees. The breakdown for the nine months ended September 30 is as follows:
| Segment | Q3 2024 Revenue | Q3 2023 Revenue |
|---|---|---|
| Enterprise Software | $1.139 billion | $1.024 billion |
| Platform Technologies | $475.4 million | $456.8 million |
Operating Expenses
Tyler Technologies’ operating expenses include sales and marketing, general and administrative, and research and development. For the nine months ended September 30, 2024, the expenses were as follows:
| Expense Type | Amount ($ millions) |
|---|---|
| Sales and Marketing | $116.2 million |
| General and Administrative | $220.6 million |
| Research and Development | $88.5 million |
Cash Flow Analysis
For the nine months ended September 30, 2024, Tyler Technologies reported the following cash flow metrics:
| Cash Flow Type | Amount ($ millions) |
|---|---|
| Operating Activities | $399.9 million |
| Investing Activities | ($34.7 million) |
| Financing Activities | $7.6 million |
Debt and Equity Structure
As of September 30, 2024, Tyler Technologies had the following debt and equity metrics:
| Debt Type | Amount ($ millions) |
|---|---|
| Convertible Senior Notes | $600.0 million |
| Revolving Credit Facility | $0 million |
| Total Shareholders' Equity | $3.275 billion |
Market Position and Strategy
Tyler Technologies focuses on expanding its SaaS offerings, with a significant shift in client contracts from perpetual licenses to subscription-based models. The company added 181 new SaaS clients in Q3 2024 and saw a conversion of 108 existing clients to the SaaS model.
Future Outlook
The backlog as of September 30, 2024, was reported at $2.13 billion, with expectations to recognize approximately 45% of this as revenue over the next 12 months. The company is well-positioned to capitalize on the growing demand for digital government services and software solutions.
How Tyler Technologies, Inc. (TYL) Makes Money
Revenue Streams
Tyler Technologies, Inc. generates revenue through a variety of streams primarily focused on software solutions for local governments and public sector entities. The key revenue categories include:
- Software as a Service (SaaS)
- Transaction-based fees
- Maintenance services
- Professional services
- Software licenses and royalties
- Hardware and other services
Software as a Service (SaaS)
SaaS revenue represents a significant portion of Tyler's income. For the nine months ended September 30, 2024, SaaS revenue reached $471.4 million, a 22% increase from $387.0 million in the same period of 2023. The growth is attributed to the addition of new clients and conversions from on-premises to SaaS solutions.
Transaction-Based Fees
Transaction-based fees are another major revenue source, totaling $522.7 million for the nine months ended September 30, 2024, compared to $486.4 million in 2023. This reflects a 7% increase, driven by increased transaction volumes and new clients.
Maintenance Services
Maintenance revenue for the nine months ended September 30, 2024, was $348.1 million, slightly down from $349.2 million in the prior year. This revenue is largely recurring due to ongoing support contracts with clients.
Professional Services
Professional services revenue, which includes consulting and implementation services, totaled $201.2 million for the nine months ended September 30, 2024, compared to $188.5 million in 2023, marking a growth of 7%.
Software Licenses and Royalties
Software licenses and royalties generated $20.3 million for the nine months ended September 30, 2024, down from $30.5 million in 2023. The decrease is attributed to the shift from perpetual licenses to subscription-based models.
Hardware and Other Services
This category includes revenue from hardware sales and leasing services, totaling $33.0 million for the nine months ended September 30, 2024, up from $29.3 million in the previous year.
Revenue Breakdown Table
| Revenue Category | 9 Months Ended September 30, 2024 (in millions) | 9 Months Ended September 30, 2023 (in millions) | Change (%) |
|---|---|---|---|
| SaaS | $471.4 | $387.0 | 22% |
| Transaction-Based Fees | $522.7 | $486.4 | 7% |
| Maintenance | $348.1 | $349.2 | -0.3% |
| Professional Services | $201.2 | $188.5 | 7% |
| Software Licenses and Royalties | $20.3 | $30.5 | -33% |
| Hardware and Other | $33.0 | $29.3 | 13% |
| Total Revenue | $1,596.7 | $1,470.8 | 8.5% |
Recurring Revenue Model
Tyler Technologies' business model heavily relies on recurring revenue streams. For the nine months ended September 30, 2024, recurring revenues accounted for approximately 84.3% of total revenues, indicating a strong foundation for long-term financial stability.
Cost Structure
The cost of revenues for the nine months ended September 30, 2024, was $897.7 million, reflecting a 9% increase from $822.6 million in the prior year. The primary components include:
- Subscriptions, maintenance, and professional services: $829.8 million
- Software licenses and royalties: $5.0 million
- Amortization of software development: $13.8 million
- Hardware and other: $21.4 million
Operating Income
Operating income for the nine months ended September 30, 2024, was $301.4 million, up from $252.9 million in the previous year, representing a growth of approximately 19.2%.
Net Income
The net income for the nine months ended September 30, 2024, was $197.8 million, compared to $127.0 million in the previous year, yielding a growth rate of approximately 55.5%.
Cash Flow
For the nine months ended September 30, 2024, cash flows from operating activities were $399.9 million, compared to $233.0 million in the same period in 2023, showing significant improvement in cash generation capabilities.
Future Outlook
As of September 30, 2024, Tyler Technologies reported a backlog of contracted revenue totaling $2.13 billion, indicating strong future revenue potential as these contracts progress towards recognition.
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Article updated on 8 Nov 2024
Resources:
- Tyler Technologies, Inc. (TYL) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Tyler Technologies, Inc. (TYL)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Tyler Technologies, Inc. (TYL)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.