0000860731false00008607312024-07-242024-07-24


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

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

July 24, 2024 (July 24, 2024)
Date of Report (Date of earliest event reported)
_____________________________________________
TYLER TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
_____________________________________________
Delaware1-1048575-2303920
(State or other jurisdiction of incorporation organization)(Commission
File Number)		 (I.R.S. Employer Identification No.)
5101 TENNYSON PARKWAYPLANOTexas75024
 (Address of principal executive offices)(City)(State)(Zip code)

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

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

    

Item 2.02     Results of Operations and Financial Condition         
        
On July 24, 2024, Tyler Technologies, Inc. issued the earnings news release announcing results from operations and financial condition as of June 30, 2024, attached hereto as Exhibit 99.1, which news release is incorporated by reference herein.
Exhibit number
 Exhibit description
News Release issued by Tyler Technologies, Inc. dated July 24, 2024
104
Cover Page Interactive Data File (embedded in the Inline XBRL document)

    

    

SIGNATURES



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


TYLER TECHNOLOGIES, INC.
/s/ Brian K. Miller 
July 24, 2024By:Brian K. Miller
Executive Vice President and Chief Financial
Officer (principal financial officer)










    










    

finalpressreleaseimage1a05.jpg

Tyler Technologies Reports Earnings for Second Quarter 2024
Strong results fueled by 23% growth in SaaS revenues
PLANO, Texas – July 24, 2024 – Tyler Technologies, Inc. (NYSE: TYL), a large-cap growth technology company, today announced financial results for the second quarter ended June 30, 2024.
Second Quarter 2024 Financial Highlights (all comparisons are to the second quarter of 2023):
Revenues
Total revenues were $541.0 million, up 7.3%. On an organic basis, revenues grew 6.5%.
Recurring Revenues
Recurring revenues from maintenance and subscriptions were $449.0 million, up 8.4%, and comprised 83.0% of total revenues, up from 82.2%. On an organic basis, recurring revenues grew 7.8%.
•Subscription revenues were $333.7 million, up 12.1%. On an organic basis, subscription revenues grew 11.8%. Within subscriptions:
◦SaaS revenues grew 23.2% to $156.0 million. On an organic basis, SaaS revenues grew 22.5%.
◦Transaction-based revenues grew 3.8% on an organic basis to $177.7 million.
◦SaaS arrangements comprised approximately 97% of the total new software contract value, up from approximately 82%.
•Annualized recurring revenue (ARR) was $1.80 billion, up 8.4%.
Earnings/EBITDA
•GAAP operating income was $78.0 million, up 26.1%. Non-GAAP operating income was $132.6 million, up 14.4%.
•GAAP net income was $67.7 million, or $1.57 per diluted share, up 37.9%. Non-GAAP net income was $103.9 million, or $2.40 per diluted share, up 20.9%.
•Adjusted EBITDA was $144.0 million, up 14.7%.
Cash Flow
•Cash flow from operations was $64.3 million, compared to negative $19.2 million.
•Free cash flow was $48.6 million, compared to negative $33.2 million.
•During the second quarter, cash tax payments included approximately $29 million related to IRC Section 174 capitalization rules.


Tyler Technologies Reports Earnings
for Second Quarter 2024
July 24, 2024
Page 2
"We built on the momentum from our strong first quarter performance to again deliver exceptional results for the second quarter," said Lynn Moore, Tyler's president and chief executive officer. "SaaS revenues grew 23.2%, and SaaS arrangements comprised 97% of our new software contract value, as clients across all segments of the public sector increasingly embrace the cloud. Transaction revenues outperformed our plan, primarily due to higher transaction volumes, including e-filing and new payment services. In addition, operating margins exceeded our expectations and benefited from improved professional services margins, as well as continued progress around key initiatives associated with our cloud transition.
"Our new business pipeline remains at elevated levels, reflecting a robust market environment, growing cross-sell opportunities, and continued solid execution by our sales organization. We're pleased with our progress under each of the pillars supporting our near and long-term growth objectives. Our outlook for the remainder of 2024 is positive, and we have revised our full-year guidance accordingly," concluded Moore.
Guidance for 2024
As of July 24, 2024, Tyler Technologies is providing the following guidance for the full year 2024:
•Total revenues are expected to be in the range of $2.120 billion to $2.150 billion.
•GAAP diluted earnings per share are expected to be in the range of $5.76 to $5.96.
•Non-GAAP diluted earnings per share are expected to be in the range of $9.25 to $9.45.
•Free cash flow margin is expected to be in the range of 18% to 20%.
•Research and development expense is expected to be in the range of $122 million to $125 million.
•Capital expenditures are expected to be in the range of $50 million to $52 million, including approximately $33 million of capitalized software development costs.


Tyler Technologies Reports Earnings
for Second Quarter 2024
July 24, 2024
Page 3
GAAP to non-GAAP guidance reconciliation
2024
GAAP diluted earnings per share (1)
$5.76 - $5.96
Plus:
Share-based compensation expense2.85
Amortization of acquired software and other intangibles2.23
Acquisition-related costs—
Lease restructuring costs and other—
Less:
Income tax impact (1)
(1.59)
Non-GAAP diluted earnings per share$9.25 - $9.45
Shares used in computing diluted earnings per share (millions)43.5
GAAP estimated annual effective tax rate used in computing GAAP diluted earnings per share (1)15.5%
Non-GAAP estimated annual effective tax rate used in computing Non-GAAP diluted earnings per share22%
(1) GAAP diluted earnings per share may fluctuate due to the impact on our annual effective tax rate of discrete tax items, such as stock incentive awards, future acquisitions, changes in tax legislation, and other transactions.
Conference Call
Tyler Technologies will hold a conference call on Thursday, July 25, 2024, at 10:00 a.m. ET to discuss its second quarter 2024 results. Participants can pre-register for the teleconference here. Alternatively, participants can also join the teleconference by dialing 833-470-1428 and entering access code 328788 to join the live call.
The live audio webcast and archived replay can also be accessed at the Events & Presentations section of Tyler's investor relations website.
About Tyler Technologies, Inc.
Tyler Technologies (NYSE: TYL) is a leading provider of integrated software and technology services for the public sector. Tyler's end-to-end solutions empower local, state, and federal government entities to operate efficiently and transparently with residents and each other. By connecting data and processes across disparate systems, Tyler's solutions transform how clients turn actionable insights into opportunities and solutions for their communities. Tyler has more than 44,000 successful installations across 13,000 locations, with clients in all 50 states, Canada, the Caribbean, Australia, and other international locations. Tyler has been recognized numerous times for growth and innovation, including Government Technology's GovTech 100 list. More information about Tyler Technologies, an S&P 500 company headquartered in Plano, Texas, can be found at tylertech.com.
Non-GAAP Financial Measures
Tyler Technologies has provided in this press release financial measures that have not been prepared in accordance with generally accepted accounting principles (GAAP) and are therefore considered non-GAAP


Tyler Technologies Reports Earnings
for Second Quarter 2024
July 24, 2024
Page 4
financial measures. This information includes non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP earnings per diluted share, EBITDA, adjusted EBITDA, free cash flow, and free cash flow margin. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating Tyler’s ongoing operational performance because they provide additional insight in comparing results from period to period. Tyler believes the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures. Non-GAAP financial measures discussed above exclude share-based compensation expense, employer portion of payroll taxes on employee stock transactions, expenses associated with amortization of intangibles arising from business combinations, acquisition-related expenses, and lease restructuring costs and other. Annualized recurring revenues (ARR) is calculated by annualizing the current quarter's recurring revenues from maintenance and subscriptions.
Tyler currently uses a non-GAAP tax rate of 22.0%. This rate is based on Tyler's estimated annual GAAP income tax rate forecast, adjusted to account for items excluded from GAAP income in calculating Tyler's non-GAAP income, as well as significant non-recurring tax adjustments. The non-GAAP tax rate used in future periods will be reviewed periodically to determine whether it remains appropriate in consideration of factors including Tyler's periodic annual effective tax rate calculated in accordance with GAAP, changes resulting from tax legislation, changes in the geographic mix of revenues and expenses, and other factors deemed significant. Due to differences in tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to Tyler's estimated annual tax rate as described above, the estimated tax rate on non-GAAP income may differ from the GAAP tax rate and from Tyler's actual tax liabilities.
Non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial information prepared in accordance with GAAP. The non-GAAP measures used by Tyler Technologies may be different from non-GAAP measures used by other companies. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, which has been provided in the financial statement tables included below in this press release.
Forward-looking Statements
This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical in nature and typically address future or anticipated events, trends, expectations or beliefs with respect to our financial condition, results of operations or business. Forward-looking statements often contain words such as “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates,” “plans,” “intends,” “continues,” “may,” “will,” “should,” “projects,” “might,” “could” or other similar words or phrases. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. We believe there is a reasonable basis for our forward-looking statements, but they are inherently subject to risks and uncertainties and actual results could differ materially from the expectations and beliefs reflected in the forward-looking statements. We presently consider the following to be among the important factors that could cause actual results to differ materially from our expectations and beliefs: (1) changes in the budgets or regulatory environments of our clients, primarily local and state governments, that could negatively impact information technology spending; (2) disruption to our business and harm to our competitive position resulting from cyber-attacks, security vulnerabilities and software updates; (3) our ability to protect client information from security breaches and provide uninterrupted operations of data centers; (4)


Tyler Technologies Reports Earnings
for Second Quarter 2024
July 24, 2024
Page 5
our ability to achieve growth or operational synergies through the integration of acquired businesses, while avoiding unanticipated costs and disruptions to existing operations; (5) material portions of our business require the Internet infrastructure to be adequately maintained; (6) our ability to achieve our financial forecasts due to various factors, including project delays by our clients, reductions in transaction size, fewer transactions, delays in delivery of new products or releases or a decline in our renewal rates for service agreements; (7) general economic, political and market conditions, including continued inflation and rising interest rates; (8) technological and market risks associated with the development of new products or services or of new versions of existing or acquired products or services; (9) competition in the industry in which we conduct business and the impact of competition on pricing, client retention and pressure for new products or services; (10) the ability to attract and retain qualified personnel and dealing with rising labor costs, and the loss or retirement of key members of management or other key personnel; and (11) costs of compliance and any failure to comply with government and stock exchange regulations. These factors and other risks that affect our business are described in our filings with the Securities and Exchange Commission, including the detailed “Risk Factors” contained in our most recent annual report on Form 10-K and quarterly report on Form 10-Q. We expressly disclaim any obligation to publicly update or revise our forward-looking statements.
(Comparative results follow)
Contact: Hala Elsherbini
Senior Director, Investor Relations
Tyler Technologies, Inc.
972-713-3770
hala.elsherbini@tylertech.com

Source: Tyler Technologies
#TYL_Financial
24-35


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


Three months ended June 30,Six months ended June 30,
2024202320242023
Revenues:
Subscriptions$333,682 $297,789 $646,925 $578,254 
Maintenance115,309 116,539 232,527 231,670 
Professional services71,928 66,420 136,734 127,349 
Software licenses and royalties5,329 9,779 14,063 19,909 
Hardware and other14,728 13,752 23,086 18,951 
Total revenues540,976 504,279 1,053,335 976,133 
Cost of revenues:
Subscriptions, maintenance, and professional services277,145 255,789 546,015 508,204 
Software licenses and royalties1,560 2,432 3,125 4,745 
Amortization of software development4,484 2,896 8,847 5,485 
Amortization of acquired software9,240 8,924 18,479 17,844 
Hardware and other10,731 11,061 15,387 16,841 
Total cost of revenues303,160 281,102 591,853 553,119 
  Gross profit237,816 223,177 461,482 423,014 
Sales and marketing expense41,565 37,103 77,992 74,206 
General and administrative expense75,420 77,681 148,130 150,041 
Research and development expense28,951 28,153 58,384 55,139 
Amortization of other intangibles13,845 18,366 31,963 36,774 
  Operating income78,035 61,874 145,013 106,854 
Interest expense(1,253)(6,387)(3,437)(14,071)
Other income, net1,883 643 3,728 1,889 
Income before income taxes78,665 56,130 145,304 94,672 
Income tax provision10,927 7,000 23,396 14,667 
Net income$67,738 $49,130 $121,908 $80,005 
Earnings per common share:
   Basic$1.59 $1.17 $2.87 $1.91 
   Diluted$1.57 $1.15 $2.82 $1.87 
Weighted average common shares outstanding:
   Basic42,527 41,980 42,528 41,987 
   Diluted43,275 42,751 43,286 42,710 



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


Three months ended June 30,Six months ended June 30,
Reconciliation of non-GAAP gross profit and margin2024202320242023
GAAP gross profit$237,816$223,177$461,482$423,014
Non-GAAP adjustments:
  Add: Share-based compensation expense included in cost of
           revenues		7,6206,43715,01012,779
  Add: Amortization of acquired software9,2408,92418,47917,844
Non-GAAP gross profit$254,676$238,538$494,971$453,637
GAAP gross margin44.0 %44.3 %43.8 %43.3 %
Non-GAAP gross margin47.1 %47.3 %47.0 %46.5 %

Three months ended June 30,Six months ended June 30,
Reconciliation of non-GAAP operating income and margin2024202320242023
GAAP operating income$78,035$61,874$145,013$106,854
Non-GAAP adjustments:
  Add: Share-based compensation expense30,40726,02857,27353,924
  Add: Employer portion of payroll tax related to employee stock
           transactions		8736691,6781,148
  Add: Acquisition-related costs2502972
  Add: Lease restructuring costs and other
167—(159)1,545
  Add: Amortization of acquired software9,2408,92418,47917,844
  Add: Amortization of other intangibles
13,84518,36631,96336,774
Non-GAAP adjustments subtotal54,53454,037109,263111,307
Non-GAAP operating income$132,569$115,911$254,276$218,161
GAAP operating margin14.4 %12.3 %13.8 %10.9 %
Non-GAAP operating margin24.5 %23.0 %24.1 %22.3 %

Three months ended June 30,Six months ended June 30,
Reconciliation of non-GAAP net income and earnings per share2024202320242023
GAAP net income$67,738$49,130$121,908$80,005
Non-GAAP adjustments:
  Add: Total non-GAAP adjustments to operating income54,53454,037109,263111,307
  Less: Income tax impact(18,377)(17,237)(32,609)(30,648)
Non-GAAP net income$103,895$85,930$198,562$160,664
GAAP earnings per diluted share$1.57$1.15$2.82$1.87
Non-GAAP earnings per diluted share$2.40$2.01$4.59$3.76



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

Three months ended June 30,Six months ended June 30,
Detail of share-based compensation expense2024202320242023
Subscriptions, maintenance, and professional services$7,620$6,437$15,010$12,779
Sales and marketing expense3,1412,3676,1244,760
General and administrative expense19,64617,22436,13936,385
Total share-based compensation expense$30,407$26,028$57,273$53,924

Three months ended June 30,Six months ended June 30,
Reconciliation of EBITDA and adjusted EBITDA2024202320242023
GAAP net income$67,738$49,130$121,908$80,005
Amortization of other intangibles13,84518,36631,96336,774
Depreciation and amortization included in cost of revenues, sales and marketing expense, general and administrative expense, and research and development expense19,62019,35940,72139,124
Interest expense1,2535,5663,43711,894
Income tax provision10,9277,00023,39614,667
EBITDA$113,383$99,421$221,425$182,464
Share-based compensation expense30,40726,02857,27353,924
Acquisition-related costs2502972
Lease restructuring costs and other asset write-offs167—(159)1,545
Adjusted EBITDA$143,959$125,499$278,568$238,005

Three months ended June 30,Six months ended June 30,
Reconciliation of free cash flow2024202320242023
Net cash provided by operating activities$64,304 $(19,184)$136,143 $55,525 
Less: additions to property and equipment(6,568)(4,350)(13,850)(6,370)
Less: investment in software development(9,107)(9,674)(16,493)(18,753)
Free cash flow$48,629 $(33,208)$105,800 $30,402 
Free cash flow margin9.0 %(6.6)%10.0 %3.1 %


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

June 30, 2024December 31, 2023
ASSETS
Current assets:
     Cash and cash equivalents$250,722 $165,493 
     Accounts receivable, net700,825 619,704 
Short-term investments 7,288 10,385 
Prepaid expenses and other current assets83,497 65,003 
           Total current assets1,042,332 860,585 
Accounts receivable, long-term portion7,928 8,988 
Operating lease right-of-use assets36,647 39,039 
Property and equipment, net167,635 169,720 
Other assets:
     Software development costs, net74,069 67,124 
     Goodwill2,531,899 2,532,109 
     Other intangibles, net878,272 928,870 
     Non-current investments3,879 7,046 
     Other non-current assets76,818 63,182 
Total assets$4,819,479 $4,676,663 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Accounts payable and accrued liabilities$303,476 $304,897 
Operating lease liabilities11,179 11,060 
     Current income tax payable20,375 2,466 
     Deferred revenue652,302 632,914 
     Current portion of term loans— 49,801 
           Total current liabilities987,332 1,001,138 
Convertible senior notes due 2026, net597,069 596,206 
Deferred revenue, long-term— 291 
Deferred income taxes41,584 78,590 
Operating lease liabilities, long-term35,624 39,822 
Other long-term liabilities25,762 22,621 
Total liabilities1,687,371 1,738,668 
Shareholders' equity$3,132,108 $2,937,995 
Total liabilities and shareholders' equity$4,819,479 $4,676,663 

TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Three months ended June 30,Six months ended June 30,
2024202320242023
Cash flows from operating activities:
    Net income$67,738 $49,130 $121,908 $80,005 
    Adjustments to reconcile net income to cash
    provided by operations:
      Depreciation and amortization34,139 37,636 74,236 75,748 
     (Gains) losses from sale of investments
(1)2 (1)2 
      Share-based compensation expense30,407 26,028 57,273 53,924 
      Operating lease right-of-use assets expense2,343 2,765 4,865 6,569 
      Deferred income tax benefit(12,473)(21,109)(36,807)(39,665)
      Other225 (54)190 445 
      Changes in operating assets and liabilities,
      exclusive of effects of acquired companies		(58,074)(113,582)(85,521)(121,503)
Net cash provided (used) by operating activities64,304 (19,184)136,143 55,525 
Cash flows from investing activities:
Additions to property and equipment(6,568)(4,350)(13,850)(6,370)
Purchase of marketable security investments— — — (10,617)
Proceeds and maturities from marketable security investments3,080 14,132 6,351 37,107 
Investment in software development(9,107)(9,674)(16,493)(18,753)
Cost of acquisitions, net of cash acquired— — (1,302)(1,875)
Other3 — 21 16 
Net cash (used) provided by investing activities(12,592)108 (25,273)(492)
Cash flows from financing activities:
Payment on term loans— — (50,000)(120,000)
Proceeds from exercise of stock options, net of withheld shares for taxes upon equity award settlement5,852 2,281 15,885 2,123 
Contributions from employee stock purchase plan4,921 4,714 8,474 7,751 
Net cash provided (used) by financing activities10,773 6,995 (25,641)(110,126)
Net increase (decrease) in cash and cash equivalents
62,485 (12,081)85,229 (55,093)
Cash and cash equivalents at beginning of period188,237 130,845 165,493 173,857 
Cash and cash equivalents at end of period$250,722 $118,764 $250,722 $118,764 


v3.24.2
Cover
Jul. 24, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 24, 2024
Entity Registrant Name TYLER TECHNOLOGIES, INC
Entity Incorporation, State or Country Code DE
Entity File Number 1-10485
Entity Tax Identification Number 75-2303920
Entity Address, Address Line One 5101 TENNYSON PARKWAY
Entity Address, City or Town PLANO
Entity Address, State or Province TX
Entity Address, Postal Zip Code 75024
City Area Code 972
Local Phone Number 713-3700
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security COMMON STOCK, $0.01 PAR VALUE
Trading Symbol TYL
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0000860731
Amendment Flag false
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