Summary of Tyler Technologies (TYL) FY Conference Call - June 10, 2025 Company Overview - Tyler Technologies specializes in providing automation software primarily to the public sector, focusing on municipalities, with approximately 75% of its business derived from local government entities [3][4][10]. Market Segmentation - **Local Government**: Comprises about 70-75% of Tyler's business, including cities, counties, and school districts [3][4]. - **State Government**: Grown through the acquisition of NIC in 2021, currently operates under a transaction or self-funded model, primarily providing state portals funded through convenience fees [4][6]. - **Federal Government**: Accounts for less than 5% of revenues, primarily through a low-code application platform acquired from MicroPact [4][5]. Market Opportunity - The U.S. has approximately 88,000 local government entities, with Tyler holding about 10% market share in installed solutions [10][12]. - A significant portion of the market is fragmented, with many legacy systems still in use, creating opportunities for Tyler as these systems reach end-of-life [14][16]. - The company has a high win rate of over 50% for new business, indicating strong competitive positioning [12][16]. Digital Modernization and Funding - There is a growing trend towards digital modernization in government, driven by the need for better technology and efficiency [20][21]. - The ARPA funds provided approximately $350 billion to state and local governments, which has positively impacted Tyler's market activity, although the direct sales impact is hard to quantify [22][23]. Cross-Selling and Product Integration - Tyler aims to leverage its broad product offerings to cross-sell to existing customers, as the average customer currently uses only 2-3 of Tyler's products, while they could potentially use 8-10 [28][30]. - The integration of payment solutions from the NIC acquisition has become a significant growth driver, with 1,500 payment deals generating about $50 million in annual recurring revenue (ARR) [38]. Cloud Transition and Financial Targets - Tyler is transitioning from an on-premise software model to a cloud-based model, with a target of having 85% of customers migrated to the cloud by 2030 [48][49]. - The company has set ambitious financial targets, including a free cash flow target of $1 billion by 2030 and a recurring revenue growth rate of 10-12% [46][47]. Acquisition Strategy - Tyler has a strong balance sheet with zero net leverage and plans to continue making acquisitions, primarily in the tuck-in category, to enhance its product offerings [52][53]. - The focus remains on acquiring businesses that fill gaps in the product portfolio or enhance existing capabilities, particularly in state-level applications [57]. Customer Base and Market Position - Tyler serves approximately 14,000 customers, with a low customer concentration risk; the largest customer generates less than $10 million in annual recurring revenue [62][63]. - The company has a strong presence in the court case management systems market, holding about 55% market share [64]. Conclusion - Tyler Technologies is well-positioned for growth in the public sector software market, with a focus on digital modernization, cross-selling opportunities, and a strategic approach to acquisitions. The ongoing transition to cloud services and the strong demand for modernized government systems provide a long runway for future growth.

Core Insights - The partnership between Tyler Technologies and TrueRoll has significantly improved the efficiency and accuracy of homestead exemption management for county assessor offices [3][6][9] Group 1: Industry Context - Property taxes are a crucial source of government funding, and local county assessor offices are tasked with ensuring fair and accurate taxation for homeowners [2] - The increasing complexity of property tax records, coupled with limited staff and outdated tools, has made it challenging for assessor offices to maintain current records [2] - Misapplication or oversight of homestead exemption tax breaks can adversely affect entire school districts and public services, highlighting the urgency for accurate tax management [2] Group 2: Company Collaboration - Tyler Technologies, a leader in property tax software, partnered with TrueRoll to create an automated homestead exemption management system, enhancing operational efficiency for county assessors [3][6] - The integration of Tyler's Computer-Assisted Mass Appraisal (CAMA) system with TrueRoll's eligibility tools allows for seamless management of exemptions [3][6] Group 3: Operational Improvements - TrueRoll automates the processing of new exemption applications, significantly reducing processing time and errors, allowing staff to focus on resident services [4][8] - Continuous monitoring of property and residency data by TrueRoll helps identify changes in eligibility, preventing revenue loss and ensuring fair taxation [5][8] - The partnership has led to a 50% reduction in exemption application processing time and improved accuracy without increasing staff [8] Group 4: Future Focus - As the partnership progresses, both companies aim to further modernize operations and support fair taxation practices for assessor offices [9]

Summary of Tyler Technologies (TYL) Conference Call Company Overview - Tyler Technologies is a vertical software company focused exclusively on the public sector, serving various levels of government with a broad range of products [3][5] - The company has achieved a 20% compound annual growth rate (CAGR) in recurring revenue since 2019, with SaaS revenue growth at 25% [4] Financial Performance - Approximately 85% of Tyler's revenue is recurring, with a free cash flow margin of nearly 27% [5] - Customer retention rate exceeds 98%, indicating strong customer loyalty [5] Product Segmentation - Major product areas include: - ERP and public administration (approximately 33% of business) - Platform technologies (close to 30%) - Courts and justice (15%) - Public safety (9%) - K-12 schools and civic services [5][6] Cloud Transition Strategy - Tyler is transitioning to a cloud-first approach, with a goal of migrating 85% of on-premise customers to the cloud by 2030 [17][26] - The company has exited its first proprietary data center and is on track to exit the second by the end of the year [17] - New customers are primarily onboarded in the cloud, with significant revenue uplift observed from migrating on-premise customers [24][25] Revenue Growth Projections - Tyler aims for a CAGR of 10% to 12% in recurring revenue, targeting $3.6 billion to $3.8 billion in revenue by 2030 [10] - Operating margin is expected to expand from 23% in 2023 to over 30% by 2030, with a free cash flow target of $1 billion [11] Market Dynamics - The public sector software market remains fragmented, with Tyler holding less than 10% market share but achieving higher win rates [4] - The company faces competition from various players in different product areas, including Oracle, SAP, and Motorola [35][36] Government Spending Environment - Tyler's exposure to federal spending is minimal, with less than 5% of revenue derived from federal contracts [41] - The company has observed a stable budget backdrop for local governments, primarily funded through property taxes and essential transactions [44][45] - Demand for Tyler's services is driven by the need to replace outdated legacy systems, which are often non-discretionary decisions [46] AI Integration - Tyler is investing in AI across its product offerings, focusing on service delivery, decision-making, and process automation [55][58] - Recent projects include an AI resident engagement portal for the state of Indiana and a priority-based budgeting solution for large governments [56][58] Conclusion - Tyler Technologies is well-positioned for growth through its cloud transition, strong customer retention, and focus on essential government services, despite a fragmented competitive landscape and minimal exposure to federal funding. The company's strategic investments in AI and ongoing product integration are expected to enhance its service delivery and operational efficiency.

Tyler Technologies (TYL) FY Conference Summary Company Overview - Tyler Technologies is an enterprise software company focused exclusively on the public sector vertical market, serving almost all domestic governments in the U.S. with a primary focus on local government [3][4] - The company has a broad portfolio of products and the largest customer base in the public sector software market [5][6] Financial Performance - Tyler has achieved a 20% compound annual growth rate (CAGR) in recurring revenues over the last five years, with 85% of revenues now being recurring [6][8] - SaaS revenue has grown at a 25% CAGR since 2019, marking the seventeenth consecutive quarter of over 20% SaaS growth [7][8] - The company reported a free cash flow margin of just shy of 27% last year, with gross retention rates averaging between 98-99% [8][9] Market Position and Growth Opportunities - The total addressable market (TAM) for public sector software is approximately $32 billion, with Tyler holding about 6% market share, indicating significant growth potential [8][16] - The public sector software market is fragmented, with 88,000 local government entities using hundreds of thousands of systems, many of which are legacy systems that need replacement [21][17] - The shift towards cloud adoption and digital modernization in government operations is expected to drive steady demand for Tyler's solutions [19][20] Product Offerings - Tyler's product categories include ERP and financial systems, courts and justice systems, public safety solutions, K-12 education systems, and civic services [10][12] - The company has a strong focus on mission-critical applications that support government operations, with a significant portion of its employee base having prior public sector experience [22][43] Strategic Initiatives - Tyler is in a new growth era, focusing on cloud transition, expanding its state and federal market presence, and enhancing client experience [14][29] - The company has a history of acquisitions, having completed about 60 since its inception, which has helped expand its product offerings and market reach [23][25] - Key growth pillars include leveraging the existing customer base for cross-selling, expanding into state and federal markets, and growing its transaction-based business following the acquisition of NIC [26][34] Future Outlook - Tyler aims to achieve over 90% recurring revenues by 2030, with a target of $2 billion in total revenues by that year [32][38] - The company anticipates gross margin expansion of 400 to 500 basis points through cloud optimization and product version consolidation [39] - Current guidance for free cash flow margin is set at 24% to 26%, exceeding the initial target of 17% to 19% [40] Unique Selling Proposition - Tyler's unique position in the market stems from its deep vertical focus on public sector needs, extensive product offerings tailored for government, and a workforce with significant public sector experience [42][44]

Core Viewpoint - Tyler Technologies has seen a 7% increase in share price over the past month, outperforming the S&P 500, raising questions about the sustainability of this trend leading up to the next earnings release [1] Estimates Movement - Estimates for Tyler Technologies have trended upward over the past month [2] VGM Scores - The company has a Growth Score of B but a low Momentum Score of F, and a Value Score of F, placing it in the bottom 20% for value investment strategy, resulting in an aggregate VGM Score of D [3] Outlook - The upward trend in estimates has been noted, with the magnitude of revisions being net zero, and Tyler Technologies holds a Zacks Rank of 3 (Hold), indicating an expectation of in-line returns in the coming months [4]

Core Insights - Tyler Technologies' stock experienced a slight gain of 0.1% due to its recognition in the Gartner Magic Quadrant for Cloud-Based ERP for U.S. Local Government [1][2] - The S&P 500 index closed marginally lower on the same day, highlighting the relative performance of Tyler Technologies [1] Company Recognition - Tyler Technologies was designated as a "leader" and "visionary" in the Gartner Magic Quadrant, which evaluates the quality of companies in the tech industry [2][4] - Gartner's Magic Quadrant categorizes companies into four groups: leaders, visionaries, challengers, and niche players, with the first two categories being prestigious [4] Product Value Proposition - The company attributes its favorable placement in the Magic Quadrant to the significant added value of its offerings, which extend beyond traditional ERP solutions [5] - Dane Womble, president of Tyler's public administration group, emphasized that their products provide innovative solutions for local governments [5] Market Reaction - Despite the positive news from Gartner, the stock's movement was modest, indicating that while reputation is important, it may not drastically affect stock performance in the short term [5]

Core Insights - Duck Creek Technologies has appointed Tyler Jones as Chief Marketing Officer to enhance its strategic marketing and branding efforts, aiming for global expansion in the property and casualty (P&C) insurance software and services sector [1][2]. Company Overview - Duck Creek Technologies is recognized as a global intelligent solutions provider, focusing on the future of the P&C and general insurance industry, leveraging cloud technology for agile and intelligent operations [5]. Leadership Background - Tyler Jones brings over two decades of experience in technology, insurance, and customer experience, previously leading growth initiatives at CLARA Analytics and holding significant roles at Kaiser Permanente and AIG [2][3][4]. - At Kaiser Permanente, he managed a $250 million overhaul of revenue cycle and consumer medical billing systems, while at AIG, he focused on data strategy to enhance customer experiences [3][4]. Strategic Vision - Tyler Jones expressed enthusiasm about joining Duck Creek, highlighting the company's transformative approach in the insurance industry and its commitment to customer-centric strategies [3][4].

Financial Performance & Growth - Tyler Technologies' recurring revenue has grown at a compound annual growth rate (CAGR) of approximately 11%, increasing from $1556 million in Q2 2023 to $1863 million in Q1 2025 [39] - Free cash flow has nearly doubled from $261 million in Q2 2023 to $566 million in Q1 2025 [39] - Non-GAAP operating margin increased by 245 basis points from 22.8% at the June 2023 Investor Day to 25.3% in Q1 2025 [39, 47] - The company has flipped 692 on-premise customers to the cloud, generating $82 million in SaaS annual recurring revenue (ARR) [41] - Transaction revenues have grown at a 10% CAGR from $615 million to $729 million between Q2 2023 and Q1 2025 [44] Strategic Direction & Cloud Transition - SaaS deals now represent 96% of new software total contract value, compared to 82% in Q2 2023 [41] - Tyler is targeting total revenues of $2.31-2.35 billion, an operating margin of 26-27%, and a free cash flow margin of 24-26% for CY25E [58] - The company aims to achieve approximately 90% recurring revenue, an operating margin of over 30%, and a high 20s free cash flow margin by 2030 [58] Capital Allocation & Future Outlook - Tyler has a cumulative free cash flow of approximately $900 million since the June 2023 Investor Day [50] - Capital expenditures are approximately 2% of the last twelve months (LTM) revenue [54] - The company is focused on debt repayment, organic growth, strategic mergers and acquisitions (M&A), and stock buybacks for capital allocation [57]

Tyler Technologies (TYL) FY Conference May 15, 2025 08:00 AM ET Speaker0 Good morning, everyone. My name is Alexey Gogilev. And today, I'm delighted to welcome at our Boston TMC event, Tyler, CFO, Brian Miller. Thank you for being with us today. Brian, great to see you, especially considering that we just met at this wonderful event at San Antonio, your customer conference. It's been a busy week. It has been a great week. Maybe we could start with some feedback from the conference. Can you share with us wha ...

Core Insights - VuSpex has been selected as the virtual inspection solution for Tyler Technologies' Enterprise Permitting & Licensing product, enhancing inspection processes and reducing backlog [1][4][6] - The integration allows inspectors to conduct virtual inspections seamlessly and attach high-quality artifacts in real-time, even under low bandwidth conditions [2][4] - VuSpex has established itself as a leader in integrated virtual inspection software with over 11 successful integrations with leading Permitting and Land Management Systems [3][8] Company Overview - VuSpex focuses on innovation and user-centric design, empowering clients to modernize inspection processes and improve communication [7] - The company holds two patents in virtual inspection technology, with four more pending, ensuring reliable remote inspection capabilities [8] - VuSpex's technology includes features like automated language translation and offline capabilities for contractors, enhancing efficiency in various network conditions [5][8] Tyler Technologies Overview - Tyler Technologies is a leading provider of integrated software and technology services for the public sector, with over 45,000 successful installations across 13,000 locations [9] - The partnership with VuSpex allows Tyler to offer a best-in-class virtual inspection solution that complements its robust permitting and licensing platform [6][9] - Tyler Technologies has been recognized for growth and innovation, including being listed on Government Technology's GovTech 100 list [9]