Slides
Page 1
2025 Fourth Quarter Earnings Review 2026 Annual Guidance February 12, 2026
Page 2
Statement Regarding Use of Non-GAAP Measures Tyler Technologies has provided in this press release financial measures that have not been prepared in accordance with general ly 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 operat ing 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 n on-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 co mparing 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 expens e, 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 used a non-GAAP tax rate of 22.5% for the year ended December 31, 2025, and expects to use a non-GAAP tax rate of 23.0% in 2026. 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 we ll 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 facto rs 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 abo ve, 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 informa tion 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. 2
Page 3
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 toour 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 government 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 actively monitor developments in artificial intelligence ("AI") regulation and ethical standards as we expect that future changes in the regulatory landscape may affect our product development timelines, compliance costs, and market opportunities related to AI; (7) 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; (8) general economic, political and market conditions, including inflation and changes in interest rates; (9) technological and market risks associated with the development of new products or services or of new versions of existing or acquired products or services; (10) 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; (11) 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 (12) 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. 3
Page 4
The Leader in Software Solutions to the Public Sector TYLER AT A GLANCE 4 MARKET POSITION 1 RECURRING REVENUES 2025 87% FREE CASH FLOW MARGIN 2025 GROSS CLIENT RETENTION 98% ERP / FINANCIAL 33% OTHER 2% COURTS & JUSTICE 15% PUBLIC SAFETY 7% APPRAISAL & TAX 4% PLATFORM TECHNOLOGIES 27% CIVIC SERVICES 5% K-12 SCHOOLS 7% 2025 REVENUE BREAKDOWN 26.6%
Page 5
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
Page 6
Q4 2025 Summary
Page 7
Fourth Quarter Results Revenues Free Cash Flow1 Non-GAAP Operating Margin1 Total Revenues $575.2M, up 6.3% Excluding non-cash loss reserve, total revenue up 8% SaaS Revenues $208.3M, up 20.2% Transactions Revenues $196.7M, up 12.1% AARRR $2.1B,, up10.9% $236.9M, up 9.7% FCF margin expanded to 41.2% 24.1%, down 30 bps Impact of non-cash loss reserve is 120 bps ARR & FREE CASH FLOW EXCEED EXPECTATIONS 1 See the reconciliation of GAAP to Non-GAAP measures included in this presentation and in our earnings release. 7
Page 8
Fourth Quarter Results KEY HIGHLIGHTS Healthy public sector demand Elevated sales activity indicators RFP pipeline and demo trends Stable public sector market reflected in strong leading demand indicators of RFP and demo trends Executing our unified payments strategy with payments operations consolidated across company and value-added transactions services deeply embedded in our software solutions 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 Saas revenue growth up 20.2% and total SaaS bookings up 9.6% Flips ARR increased 64.5% YoY andd 54.8%% sequentially.. Both the number and value of on-premises flips to the cloud represented new quarterly highs Increased adoption of AI-enabled solutions while advancing agentic AI from concept to disciplined deployment in Q1 2026, providing early access to embedded agentic capabilities for select clients in select solutions
Page 9
Strong Recurring Revenue Growth 9 • Recurring revenues uupp 10.9% • Subscriptions rrosee 16.1% o SaaS revenues ggrew 20.2% o Transaction revenues iincreasedd 12.1%,, driven by higher transaction volumes and continued expansion of our payments client base o Maintenance revenues ddeclinedd 4.9%,, reflectingg thee ongoingg migrationn on-premisess clientss too SaaS Total Revenues $575.2M % of Total Revenues 89.4% 10.6% $109.4M (4.9)% $196.7M +12.1% $208.3M +20.2% Recurring Non-recurring Maintenance Revenues Transaction Revenues SaaS Revenues Recurring Revenues $514.4M YoY Growth Q44 2025
Page 10
• Thurston County, WA • Enterprise Assessment • Riverside County, CA • Public Safety Enterprise Corrections • Existing courts software client • Placer County, CA • Enterprise Supervision • Enterprise ERP • Jefferson County School District, AL • Huntsville City Schools, AL • Two of the state’s largest school districts • Boone County, KY • Enterprise Public Safety • Fairfax County Public Schools, VA • Student Transportation Notable Q4 Wins ACCELERATING SAAS MOMENTUM New Software deals • Resident Engagement • State of Wisconsin • Fairfax County, VA • Priority-Based Budgeting • Alabama Department of Corrections • City of Plano, TX • Document Automation • American Arbitration Association, NY • Nebraska Department of Motor Vehicles, NE SaaS flips • Los Angeles County, CA • Enterprise Permitting & Licensing • Added Fire Prevention Mobile – largest FPM deal to date, plus Tyler payments • City of Beverly Hills, CA • Enterprise Public Safety • First public safety flip in CA • Madison, WI • Enterprise ERP • City of White Plains, NY • Enterprise Public Safety plus Fire/EMS Analytics • Linn Benton Lincoln Education Services District, OR • School ERP Pro • Largest Tyler Drive & Tyler GPS add-on • Enterprise Justice • Contra Costa County, CA • Two of the six largest counties in Texas – Travis and Collin Counties • City of Dallas, TX • Municipal Justice10 AI-Driven deals
Page 11
• Major State Enterprise Client • Digital Motor Vehicle Titling, Transaction funded • Tyler Cashiering, SaaS contract • City of Moore, OK • Enterprise Public Safety full suite • Existing Public Safety Pro client • Total Tyler city with Enterprise ERP & Municipal Justice • Midwest City, OK • Enterprise Public Safety & Enforcement Mobile • Total Tyler city with Enterprise ERP & Municipal Justice • City of Dallas, TX - Code Enforcement • Enforcement Mobile • Leveraged existing Municipal Justice client • Guadalupe County, TX • Civil Process Mobile Enterprise Solution • Existing Enterprise Justice client Notable Q4 Wins • Maryland Administrative Office of the Courts • Payments & Disbursements • Existing Enterprise Justice client • Strong collaboration between State & Federal and Justice divisions • Multnomah County, OR • Largest payments deal to date for Appraisal & Tax • Existing Appraisal & Tax software client • New Mexico Department of Corrections • Inmate Services Financial suite • Warehouse Management Administration suite • Leverage State sales team • Application Platform • Wisconsin Department of Transportation • Virginia - Indigent Defense Commission State / Federal / Transactions 11 Multi-Product / Cross-Sell wins
Page 12
2025 Annual Summary
Page 13
Strong Annual Recurring Revenue Growth 13 • TTotall revenuess upp 9.1% • Excluding non-cash loss reserve, up 9.6% • Recurring revenues uupp 12.5% • Subscriptions rrosee 18.1% o SaaS revenues ggrew 20.6% o Transaction revenues iincreasedd 15.8%,, driven by increased adoption and deployment of transaction- based services o Maintenance revenues ddeclinedd 3.8%,, reflectingg thee ongoingg migrationn off on-premisess clientss too SaaS Total Revenues $2.33B % of Total Revenues 87.1% 12.9% $445.6M (3.8)% $808.4M +15.8% $777.8M +20.6% Recurring Non-recurring Maintenance Revenues Transaction Revenues SaaS Revenues Recurring Revenues $2.03B YoY Growth 2025
Page 14
Exceptional Trend of Cash Flow Generation $255M $355M $372M $381M $380M $625M $654M $213M $327M $316M $331M $327M $575M $621M $0M $100M $200M $300M $400M $500M $600M $700M 2019 2020 2021 2022 2023 2024 2025 Cash From Operations Free Cash Flow 14
Page 15
2026 Annual Guidance
Page 16
2026 Annual Guidance EXECUTING LONG-TERM GROWTH AND CLOUD-FIRST STRATEGY Most recent 2026 guidance provided on 2/11/26 16 2025 2026 Guidance Totall Revenues $2.332B $2.50B - $2.55B Guidance midpoint implies growth of approx. 8.3% • Excluding impact of Texas payments contract termination, midpoint implies 10.0% Revenue range percentage growth expectations: • Subscriptions growth of 12 - 15% • SaaS growth of 20.5 – 22.5% • Transaction growth of 5 - 7% • Excluding impact of Texas payments contract termination, growth between 10 – 12% • Maintenance down 5 - 7% • Professional services growth of 3 - 5% • Software Licenses and royalties growth of 15 - 17% • Excluding impact of non-cash loss reserve of $9.7M in Q425, declines 30 - 32% • Hardware and other down 17 - 19% REVENUE DRIVERS
Page 17
2025 2026 Guidance2025 2026 Guidance 2025 2026 Guidance Free Cash Flow Margin 26.6% 2026 Annual Guidance 17 26% -28% Diluted EPS - Non-GAAP $12.40 - $12.65$11.31 Diluted EPS - GAAP Most recent 2025 guidance provided on 2/11/26 $8.36 - $8.61$7.20 2025 2026 Guidance $242M - $247M $204.6M R&D Expense - GAAP
Page 18
Tyler’s AI Commitment
Page 19
Tyler’s AI Commitment Built on foundational principles Governed with strong oversight Strengthened with deep partnerships Secure & private Auditable & transparent Practical Human centered AI governance committee GenAI-specific guardrails and protections Adversarial testing & strict evaluations AWS + Anthropic Azure + Open AI BUILT ON FOUNDATIONAL PRINCIPLES
Page 20
Tyler has the foundational elements to succeed WHY WE WIN + + Data Produced daily by over 15,000 clients Expertise From decades of public sector experience managing complex workflows Tyler AI Internal & partnerships with Microsoft + OpenAI + AWS + Anthropic Trust Clients trust us to lead +
Page 21
Appendix
Page 22
Non-GAAP Measures THE TABLE RECONCILES THE NON-GAAP MEASURES USED IN THIS PRESENTATION GAAP 22
Page 23
GAAP 23 Non-GAAP Measures THE TABLE RECONCILES THE NON-GAAP MEASURES USED IN THIS PRESENTATION
Page 24
tylertech.com