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2025 Second Quarter Earnings Review Tyler Technologies | July 31, 2025
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Statement Regarding Use of Non-GAAP Measures 2 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 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 while isolating the effects of some items that vary from period to period without correlation to core operating performance. 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. EBITDA is net income before interest expense, other income, income taxes, depreciation, and amortization. Non-GAAP and adjusted 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 revenue (ARR) is calculated by annualizing the current quarter's recurring revenues from subscriptions and maintenance. Tyler currently uses a non-GAAP tax rate of 22.5%. 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 in this presentation and our earnings press release.
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Forward-Looking Statements 3 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, including local, state and federal governments agencies, 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) 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 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, 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.
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The Leader in Software Solutions to the Public Sector TYLER AT A GLANCE 4 MARKET POSITION 1 RECURRING REVENUES 2024 85% FREE CASH FLOW MARGIN 2024 GROSS CLIENT RETENTION 98% ERP / FINANCIAL 32% OTHER 2% COURTS & JUSTICE 15% PUBLIC SAFETY 7% APPRAISAL & TAX 5% PLATFORM TECHNOLOGIES 29% CIVIC SERVICES 3% K-12 SCHOOLS 7% 2024 REVENUE BREAKDOWN 26.9%
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Tyler 2030 | Pillars of Growth Goals: Grow revenues, expand margins, and invest in our people & tools Leveraging Our Strong Client Base Expanding Into New Markets Completing Our Cloud Transition Growing Our Payments Business 5
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Q2 2025 Summary
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Second Quarter Results Non-GAAP Operating Margin1Revenues $2.91 EPS, up 21.3%Total Revenues $596.1M, up 10.2% SaaS Revenues $189.6M, up 21.5% ARR $2.07B, up 15.2% 26.5%, up 200 bps CONTINUED STRONG PERFORMANCE ACROSS KEY METRICS Non-GAAP Earnings1 ¹ See the reconciliation of GAAP to Non-GAAP measures included in this presentation and in our earnings release. 7
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Second Quarter Results KEY HIGHLIGHTS Healthy public sector demand Elevated sales activity indicators RFP pipeline and demo trends Stable public sector market with no fundamental shift in sales demand indicators of RFP and demo trends Transaction-based revenues surpassed $200 million for the first time; 113 new payments wins Strong margin expansion – positive revenue shift and cloud efficiency gains driving scalability across our platform Strong balance sheet with zero net leverage as cash exceeds outstanding debt; $600M convertible debt matures 2026 Healthy public sector budgets primarily funded by property taxes – a stable funding source underlying long-term demand; prioritizing tech investments to drive efficiencies 8 Accelerated SaaS adoption with total SaaS bookings, including expansions, renewals, and flips, up 47.7% sequentially from Q1,and up 8.2% YoY.
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Strong Recurring Revenue Growth 9 • Recurring revenues up 15.2% • Subscriptions rose 21.4% o SaaS revenues grew 21.5% marking the18th consecutive quarter of SaaS growth of 20%+ o Transaction revenues outperformed and increased 21.3%, driven by increased adoption and deployment of new transaction-based services o Maintenance revenues declined 2.8%, reflecting the ongoing shift from on-premises license to SaaS Total Revenues $596.1M % of Total Revenues 86.8% 13.2% $112.1M (2.8)% $215.5M +21.3% $189.6M +21.5% Recurring Non-recurring Maintenance Revenues Transaction Revenues SaaS Revenues Recurring Revenues $517.2M YoY Growth Q2 2025
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Q2 2025 Strong Performance Across Key Metrics ¹ See the reconciliation of GAAP to Non-GAAP measures included in this presentation and in our earnings release. 10 Total Revenues $596.1M +10.2% Adjusted EBITDA1 $169.1M +18.3% Cash from Operations* $98.3M +52.9% Gross Margin1 GAAP 45.8% +180 bps Non-GAAP 48.9% +180 bps Operating Margin1 GAAP 16.0% +160 bps Non-GAAP 26.5% +200 bps Free Cash Flow*1 $88.0M +80.9% FCF Margin 14.8% Recurring Revenues $517.2M +15.2% Diluted EPS1 GAAP $1.93 +22.9% Non-GAAP $2.91 +21.3%
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Q2 2025 New SaaS and Flip Bookings Highlights Up Sequentially from Q1 11 * Does not include renewals or add-on sales.
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• Arizona Supreme Court, AZ • Enterprise Supervision • Expanded our relationship with the Arizona S upreme Court • $11M TCV • Enterprise Public Safety • Arkansas Game and Fish Commission, AR • Carson City, NV • Campbell County, KY • City of Auburn, AL • Franklin County, NC • Enterprise ERP • City of Hesperia, CA • Enterprise Permitting & Licensing • Administrative Office of the Illinois Courts, IL • Analytics • Johnson County, KS • Enterprise Records Management plus payments • Existing Appraisal & Tax Pro client Notable Q2 Wins ACCELERATING SAAS ADOPTION AND FLIPS • Superior Court of California, County o f Santa Clara • Enterprise Justice • Sixth most populous county in CA • First California court flip • $1.2M ARR • City of Brockton, MA • Enterprise ERP • $1.1M ARR • Albany County, NY • Enterprise ERP • $990K ARR • Licking County, OH • Enterprise Public Safety • $506K ARR • Ottawa County Central Dispatch, MI • Enterprise Public Safety • $511 ARR New SaaS deals • Resident Assistant • State of Alabama Department of R evenue • Builds on current deployments in four ot her states: • Hawaii • Indiana • Mississippi • South Carolina • Priority-Ba sed Budgeting • City of Dallas, TX, expansion • City of Eugene, OR Large SaaS flips 12 AI-Driven deals
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• West Suburban Consolidated Dispatch C enter, IL • Enterprise SaaS Public Safety • Multi-j urisdictional, multi -product competitive win • CAD, Records Management, E nforcement Mobile, Fire Prevention Mobile, Analytics • Anoka County, MN • Enterprise Public Safety • Fourth most populous county in MN • Competitive SaaS win • CAD, Records Management, Mobile, E nforcement Mobile, Civil Process Notable Q2 Wins • State of Oklahoma Department of Labor • State Regulatory and Augmented Field Ope rations • State of Oklahoma Service Oklahoma • Tyler Cashiering plus payments • First standalone cashiering win at state level • Texas Health & Human Services • Workforce Solutions • U.S. Department of Forest Service • Data & Insights Enhanced Analytics • USDA Health and Human Services • Application Platform – Enhanced Analytics • State enterprise renewal • Kentucky – 1- year extension State & Federal 13 Multi-product wins
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2025 Annual Guidance
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2025 Annual Guidance EXECUTING LONG - TERM GROWTH AND CLOUD - FIRST STRATEGY Most recent 2025 guidance provided on 7/30/25 15 Revenue Guidance midpoint implies growth of approx. 10.0% Revenue range percentage growth expectations: • Subscriptions growth of 17 - 19% • SaaS growth of 21 - 23% • Transaction growth of 14 - 16% • Merchant fees growth of 7– 9% • Maintenance down 4 - 6% • Professional services down 3 - 6% • Licenses and royalties down 16 - 18% • Hardware and other up 3 - 5% Net interest income in the range of $29 million to $31 million 2024 2025 Guidance Total Revenues $2.14B $2.33B - $2.36B
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2024 2025 Guidance 2024 2025 Guidance Free Cash Flow Margin 26.9% 2025 Annual Guidance 16 25% -27% Diluted EPS - Non-GAAP $11.20 - $11.50 $9.55 Diluted EPS - GAAP Most recent 2025 guidance provided on 7/30/25 2024 2025 Guidance $7.40 - $7.70 $6.05 2024 2025 Guidance $202M - $205M $117.9M R&D Expense
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Appendix
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Non-GAAP Measures THE TABLE RECONCILES THE NON- GAAP MEASURES USED IN THIS PRESENTATION GAAP 18
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Non-GAAP Measures THE TABLE RECONCILES THE NON- GAAP MEASURES USED IN THIS PRESENTATION GAAP 19
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