Tyler Technologies Q4 Earnings Miss Estimates, Revenues Rise Y/Y

Core Insights - Tyler Technologies (TYL) reported Q4 2025 earnings of $2.64 per share, missing the Zacks Consensus Estimate of $2.71, but showing an increase from $2.43 per share a year ago [1] - The company generated revenues of $575.2 million for the quarter, which was 2.45% below the Zacks Consensus Estimate, compared to $541.13 million in the same quarter last year [2] Revenue Performance - Recurring revenues from maintenance and subscriptions rose by 10.9% year over year to $514.4 million, making up 89.4% of total revenues [3] - Annualized recurring revenues (ARR) reached $2.1 billion, also reflecting a 10.9% year-over-year increase [3] - Maintenance revenues accounted for 19.0% of total revenues at $109.4 million, down 4.9% year over year, while subscription revenues grew by 16.1% to $405.0 million, driven by a 20.2% increase in SaaS revenues and a 12.1% increase in transaction-based revenues [3] Operating Performance - Non-GAAP gross profit increased to $280.6 million, with a non-GAAP gross margin of 48.8%, up 180 basis points [5] - Adjusted EBITDA rose to $149 million from $142.8 million in the previous year [5] - Non-GAAP operating income was $138.5 million, a 5.1% increase year over year, with a non-GAAP operating margin of 24.1%, down 30 basis points [5] Balance Sheet and Cash Flow - As of December 31, 2025, cash and cash equivalents were $1.015 billion, up from $834.1 million in the previous quarter [6] - The company generated operating cash flow of $243.9 million and free cash flow of $236.9 million in Q4 2025 [6] - For the full year 2025, operating and free cash flows were $653.5 million and $620.8 million, respectively [6] 2026 Guidance - Tyler Technologies projects 2026 revenues between $2.50 billion and $2.55 billion, with the Zacks Consensus Estimate at $2.35 billion, indicating a 9.8% year-over-year increase [9] - Expected GAAP diluted EPS is in the range of $8.36-$8.61, while non-GAAP diluted EPS is projected between $12.40-$12.65 [9] - The free cash flow margin is anticipated to be between 26% and 28% [9]