Hello, and welcome to today's Tyler Technologies second quarter 2026 conference call. Your host for today's call is Lynn Moore, Executive Chair, President, and CEO of Tyler Technologies. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. In order to address everyone's questions and stay within the allotted time, please limit your question to one question and one follow-up. As a reminder, this conference is being recorded today, July 30th, 2026. I would like to turn the call over to Hala Elsherbini, Tyler's Senior Director of Investor Relations. Please go ahead. Thank you, and welcome to our call. With me today is Lynn Moore, Executive Chair, President, and CEO, and Brian Miller, our Chief Financial Officer. In an effort to streamline our earnings communications and provide timely context around our quarterly earnings release, we published our prepared remarks yesterday shortly after posting our full quarterly results release to the news section of our investor relations website. We've also posted on the investor relations section of our website, under the Financials tab, a schedule with supplemental information. Lastly, on the Events and Presentations tab, we posted an earnings summary slide deck to supplement our prepared remarks. After I give the Safe Harbor statement, Lynn will have some opening remarks, and we'll directly go to Q&A. During this conference call, management may make statements that provide information other than historical information and may include projections concerning the company's future prospects, revenues, expenses, and profits. Such statements are considered forward-looking statements under the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties which could cause actual results to differ materially from these projections. We refer you to our Form 10-K and other SEC filings for more information on those risks. Lynn? Thanks, Hala. As you can see, it was a very busy and exceptionally productive quarter for Tyler. We have accomplished a great deal strategically, including our Investor Day, where we detailed new higher Tyler 2030 targets, our convertible debt offering, which enhanced our financial flexibility, significant share repurchases, reflecting confidence in our long-term growth, and the acquisition of For The Record, which strengthens our leadership position in the Courts & Justice market. All while continuing to deliver strong execution across the business. Operationally, we delivered another strong quarter, highlighted by 21.7% SaaS revenue growth, record SaaS bookings, record total bookings, and record second quarter free cash flow. Public sector demand remains healthy, supported by ongoing modernization priorities across government and continued investment in digital transformation, cybersecurity, operational efficiency, and constituent engagement. We also continue to see momentum in our transactions business, made meaningful progress with our cloud operations, and advanced our AI strategy with growing client engagement and early customer adoption across the portfolio. Overall, we're very pleased with our first half performance and remain well-positioned for the second half of 2026 and beyond. Simply put, we got a lot done this quarter, and the progress we made reinforces our confidence in the opportunities ahead. We'll now take your questions. We will now begin the question and answer session. To enter a question into the question queue, please press star one on your touch tone phone. If you are using a speakerphone, please pick up your handset and then press the star key and the number one. To withdraw your request, press the star key, then the number one. As a reminder, please limit your question to one question and one follow-up, so we may stay within the allotted time. We will pause momentarily to assemble our roster. Your first question comes from the line of Kirk Materne with Evercore ISI. Your line is open. Please go ahead. Yeah, thanks very much for taking the question. Lynn, I realize you guys ran through a lot of the AI strategy at your recent Analyst Day, but I was just kind of curious. We've heard from some companies that AI decisions are slowing down decisions in other parts of the business, and I was just curious what you're seeing in your area. Have the broader discussion of AI slowed any discussions on flips or on some of your products, or is it pretty much business as usual right now? Thanks. Yeah, thanks, Kirk. I'd say it's business as usual. As we talked about at Investor Day, our market's going to move a little bit slower. There is a lot of excitement and energy around the products that we're starting to bring to market around AI. We're not seeing any meaningful impact or any impact, really, on the remainder of our core business. If I can just ask a quick follow-up for Brian. Brian, just on the margin front, going in the back half of the year, anything we should be aware of in terms of hiring plans or any sort of shift in how you guys are thinking about spending? Thanks. No, there's no real change to our spending outlook. Margin expectation, obviously, is that margins will continue to expand through the year. I think the midpoint of our guidance has somewhere around 100 basis point margin expansion. There were a couple of one-time things in this quarter that pulled it down a bit. We still have about the same outlook on growth, and our hiring is right on plan and fairly limited in the second half of the year. Thank you all. Your next question comes from the line of Matt VanVliet with Cantor. Your line is open. Please go ahead. Hey, good morning. Thanks for taking the question. I guess, looking at the progress of For The Record, obviously it's only been a couple of months, but just curious on how the interest there gives you confidence in both future M&A strategy, but also just sort of your own AI roadmap as you were just talking about. Yeah, sure Matt. Yeah, we're still just as excited about For The Record as we were two months ago, and as we were when we made our initial investment 11 years ago. They won a really big opportunity in Australia this quarter, about a $1.6 million annual ARR. They also won, I think it's seven or eight other deals in the quarter. Really out of the gate, it's about what we expected. Like a lot of our acquisitions, we expect that over time, we're going to help accelerate its growth. That's the plan. I'm sorry, I don't remember the second part of your question. Just how the success so far. Generally about M&A. encouraging the AI strategy. I'm sorry, we talked over each other. Yeah, just how it impacts your AI strategy for both M&A and organic? Oh, I think it just reinforces, one, our overall M&A strategy, and obviously, with changes that are going in the market, that's one of the things we talk about is, what is it that they can bring for AI? On the flip side, we're probably scrutinizing acquisition candidates a little more closely in terms of whether or not AI is something that could displace those types of products versus others. I would say it validates our approach and, again, we're as excited about FTR as we've really been for many years. Brian, quickly following up, could you just give us the organic revenue growth and bookings growth that you've historically given? Hang on just a second. The organic revenue growth on a total revenue basis is about two points lower than the overall growth. I don't have the organic bookings growth. There was a pretty minimal contribution from the acquisitions this quarter, but about two points on the organic revenue growth. About $11 million in bookings from acquisitions. The contribution for bookings was about $11 million from the acquired revenues. Your next question comes from the line of Joshua Reilly with Needham & Company. Your line is open. Please go ahead. Great, thanks for taking my question. If you look at some of the channel checks we did in the last quarter, some of the interesting feedback was customers on the ERP side seem more concerned about features and functionality, vendor reliability, and AI product roadmap relative to necessarily having the lowest contract price. Is that consistent with what you're seeing in deals? Then along with that, do you think customers are less price sensitive than historically because you can drive a higher ROI to offset these higher contract costs? Thank you. Yeah, sure Josh. I don't know that they're less price sensitive than they have been in the past. I would agree with you about features and functionality and AI product roadmap. One of the things we've done on the ERP side is we've actually engaged our client base. We have an annual AI product focus group. Not annual, they meet monthly. We're working with our clients to make sure we're delivering the right value of AI into their products. Features and functionality are always going to be king. That's one of the things that's always differentiated Tyler Technologies is our 30+ years of domain expertise. That's going to continue to be the case in the future. Your next question comes from the line of Alexei Gogolev with JP Morgan. Your line is open. Please go ahead. Thank you, and hello, everyone. Firstly, Brian, could I ask you about how you're thinking about gating specific capabilities, including AI to cloud only over the next year? What principles determine whether something stays available on-prem versus becoming on cloud exclusively? Oh, okay, go ahead. Yeah, Alexei, it's Lynn. You're right. We've outlined a lot of what we call incentives for clients to flip to the cloud, and one of those will be AI functionality that will be solely available in our cloud release. We recently sent out messages to our client base around their need to get a path to the cloud and working with us and our salespeople to do it. There'll be a lot of incentives to do that. Not just AI features, but cloud-only features. Cloud Living Release Model that we talked about at Investor Day. The faster time to value they can get. Starting to work with clients on transitional pricing. You're going to see us continue to ramp up what we traditionally called carrots, but I'd rather just call them incentives to moving to the cloud. Thank you, Lynn. Another question about transactions. Excluding the Texas contract, transactions seem to be quite strong. Can you unpack what's driving the improvement? Is it volumes, mix, or new logos, and how you expect the mix shift towards software-tied transaction streams to evolve through the second half of the year? Yeah, it's really all three. You're right. Excluding Texas, our transaction revenues have grown about 10%. It's really from all three of those things. It's from higher volumes, and we are continuing to see that. We've talked about how we work with our clients to drive greater adoption. It's from new names, and so sales continue to be very active in terms of bundling transaction services with both new sales and driving it back into our installed software base. The third part is, as you noted, providing software under a transaction-based arrangement. Those, not as much impact on the second half of the year. We've seen ongoing impact from the California deal we did some time back. I think it's interesting that both last quarter and this quarter, the biggest software deals of the quarter were transaction based, so they're not showing up in the SaaS bookings, but they will show up in transaction revenues. The largest actual software deal in terms of full ARR at full adoption rate, was a statewide deal again this quarter, as it was last quarter for our digital motor vehicle titling and electronic lien solution. Thank you, Brian. Your next question comes from the line of Terry Tillman with Truist Securities. Your line is open. Please go ahead. Yeah, Lynn, Brian, and Hala, can you hear me okay? Yes. Yes. Wonderful. Building on that last question on the transaction deal that is a $10 million ARR deal. I am curious, was that early on in the opportunity looking like it would be a transaction-funded deal, or was it looking like a SaaS deal? The follow-up to this first question is, could you all maybe do sales enablement work where you actually lead faster with transaction-funded opportunities, and that moves the deals along faster? Maybe it is not that simple, I had a follow-up. I think that deal, as with the one last quarter in that digital motor vehicle titling deal, my understanding is that that was expected to be a transaction-funded deal throughout the process. That is one of those areas we have now, with our partner Champ Titles, have done those types of DMV deals in several states now. That lends itself well to the transaction-funded model because it has a revenue stream or a charge to the citizen that accompanies that transaction. Those things, outdoor recreation is another one of those areas. It does not lend itself to every type of software deal. There certainly are those where it does, and we do use that to our advantage, being able to provide those transaction services, the payment capabilities, and fund it with that transaction model that takes away the pressure of budgets because it does not have to have appropriated funds to pay for it. We use that to our advantage when it fits the transaction type or fits. I think if there are deals where the citizens are involved interacting with the government or businesses, like digital titling, outdoors, that lends it. Our traditional business, probably not so much. Okay. Got it. Thanks for that. It's always good to see the AI-driven deal commentary in the slides. I'm curious, as it stands right now, looking out over the next couple of quarters, what seems more impactful, Document Automation, Priority Based Budgeting, or the Resident AI Assist? Thanks. Gosh, Terry, I'm not sure I would prioritize. I think the interest across all three are pretty high. We're continuing to release new AI into the market as well. You're going to see an increase of that really starting next year, and revenues probably start picking up the latter part of next year. The excitement around all three is high, but for different reasons. We're getting a lot of traction right now out of Document Automation. We're getting a lot of traction out of the Resident AI. Priority Based Budgeting, we've had in the bag for a couple of years now, and it's out there and it's proven in the market. I think as our other solutions continue to be proven in the market, again, as we talked about at Investor Day, trust and provability is really important in this segment. You're going to continue to see more traction and excitement. All right. Thanks a lot. Your next question comes from the line of Parker Lane with Stifel. Your line is open. Please go ahead. Hi, good morning. Thanks for taking the questions. Lynn, in the prepared remarks, you called out some investments in AI-enabled sales tools to improve the go-to-market function here. I was wondering if you can go a layer deeper and help us understand exactly what you're bringing in here and how that's changing the way that you all approach this end market today. Yeah. I don't want to go too deep for competitive reasons. We've been utilizing AI in sales for some period of time. Obviously, everything we do is out in the public domain. Everything is out there, being able to use AI to understand client demand, to understand what's going on at city council meetings, to understand their specific needs to the extent that we don't have that already through our relationships, to understand what competitive processes are out there, what competitors are doing. There's just a lot that we're doing, and the results have been encouraging to see. One of those things is the AI enablement in our CRM system, taking advantage of that there's a wide variety of tools there. Got it. Brian, a follow-up for you. Record second quarter free cash flow here. Anything one time to call out about that performance that you saw here? There's not anything necessarily one time, I think probably the biggest impact on the increase over last year was cash taxes. There was about $30 million less cash taxes this quarter than there was in the second quarter of last year, and that's primarily related to some of the impacts of the One Big Beautiful Bill. Understood. Thank you. Your next question comes from the line of Tamjid Chowdhury with Guggenheim. Your line is open. Please go ahead. Hi. Thanks for taking my question. I guess first one for Lynn. In the prepared remarks, you talk about Resident AI Assistant now being adopted by eight states. What brings customers to come to the table and say, "Hey, Tyler, we want to talk to you about a solution like that?" What is the typical ARR uplift for a solution like that once it's fully deployed in a state? I think it's a couple things on what garners the interest. I think when you talk about AI solutions, this is one of those that's really an outcome-based solution, and you're really trying to ease the burden, the day-to-day routine that, in this instance, state agencies, but with all our jurisdictions, the burden that they have in serving their citizens. What they see is, like I mentioned earlier on the response to the other question, everything we do is out in the public. Our client base tends to be a little conservative, and they tend to watch what happens in other states. When things start working for other jurisdictions, I shouldn't say states, but when things start working and they see that measurable ROI outcome, then it drives that demand. That's what we've seen with our Resident AI Assistant. The ARR varies from state to state, but I would say typically it's in the multiple millions of dollars. Okay, great. For Brian, a quick one for you. As you approach the second half of the year, ACV from conversions from on-prem will see some tough comps. Can you give us more color on the visibility that you have into the second half when it comes to conversions? Yeah. We've gotten away from commenting on that quarter- to- quarter. We have said that we expect the activity to continue to grow in general over the next three to four years, and that we're certainly on track to achieve that 85% of our 2023 maintenance converted to the cloud by 2030. It can be lumpy from quarter to quarter, especially based on the larger customers. There's probably a little less, I wouldn't say visibility, but a little less certainty around some of those. The timing tends to move around a bit around those larger flip opportunities. I'd say we're on track to certainly achieve the long-term objectives, and we're continuing to see those pick up. Lynn talked about some of the things we're doing with particularly around incentives now that we expect will help solidify that activity over the next couple of years. That's helpful. Thank you. Your next question comes from the line of Rob Oliver with Baird. Your line is open. Please go ahead. Great. Thank you. Good morning. Two for me. Lynn, just first for you on really strong performance on trailing 12-month ACV from conversions for you guys. I know you talked a little bit about, in the prepared remarks around AI and some of the data preparedness that customers need to think about if they're going to have an AI future. Is that pulling you guys into the equation today? In other words, are you seeing today that AI is serving to show up in the rationale around those flips and potentially start to help accelerate those flips? I don't know that sitting here today, Rob, it's been a meaningful contributor. I do expect it to become more meaningful and more significant over the next, I'd say, probably 12- 18 months as we continue to put more AI agentic cases in our flagship products as we intend to do more commercialization of the AI. I think you're going to see that ramp up. As I mentioned on the other question, we've got a whole program in place to try to start incentivizing the move a little faster, particularly now as our products and as we move towards Cloud Living that we talked about at Investor Day. As we become better prepared, our clients become better prepared. I think you're going to see that continue to increase consistent with what we outlined at Investor Day. Great. Thank you. Brian, for you, just on the third-party payment processing headwind that you guys called out, how structural is that? Does it recur in 2027? How should we think about the kind of normalized incremental margin on SaaS once that noise clears? Thanks. No, that third-party payment headwind was really pretty much isolated to last year, where we saw sort of outsized increases from some of our third-party payment processing partners. That seems to be played out after the first part of last year. That headwind really isn't a big factor going forward. Last year in Q2 was sort of the peak of that. Your next question comes from the line of Alex Zukin with Wolfe Research. Your line is open. Please go ahead. Hey, guys. Thanks for taking my question. I guess, Brian, maybe the first one for you. Can you help investors understand a little bit of the SaaS revenue in the quarter? Were there some timing impacts that led to there being a bit less recognized in the quarter? Is there confidence given it looks like first half SaaS bookings is a meaningful acceleration, obviously, versus last year, but when does that start to show up? Is that the confidence behind the reiterated SaaS revenue guidance? Yeah, I think as we've talked about for a long time, there is a lag from the time we sign something to the time those SaaS revenues start to show up in the income statement, and that's true both with respect to new deals, which is probably a little longer, often one or two quarters, but could be longer. Flips, there's also a lag there as well. I think the accelerated bookings in both of the last two quarters don't have as much of an impact, certainly on the current quarter, but even on the next quarter or two as they do beyond that. That lag, I think, is something you have to keep in mind. I don't think there's anything particular around timing. We always have deals that move around. We typically aren't calling out deal slippage as a major factor because it's there all the time. There's nothing unusual about this quarter. I'd just say that our outlook for the full year hasn't changed. We don't give quarterly guidance, but I'd say there's not any meaningful change to our outlook for the year. Got it. Maybe on the AI ACV contribution as a percentage of your new SaaS ACV this quarter. I think you called out new SaaS ACV growing about 22%. You talked about Document Automation attach continuing to be really healthy. Any sense for what that attach rate looks like on the install base? How much could we think about that potentially being a tailwind to new SaaS ACV over the course of maybe beyond this year? I'd say, as Lynn mentioned, it's beyond this year where we expect it to be meaningful. The direct sort of AI stuff that we've talked about is still a real small percentage of the total ACV. As we've said in the past, we expect that revenue contribution really is probably 12-18 months down the road when it starts to become more meaningful. It's certainly growing, it's still a very small percentage of the new ACV. Got it. Your next question comes from the line of Trevor Walsh with Citizens. Your line is open. Please go ahead. Great. Thanks for taking my questions. Brian, maybe I'll just start with you, a real quick one. You made some comments around that $10 million transaction business or that deal for motor vehicle. Do you have a sense of the ramp on that $10 million annually number? If so, how does that compare maybe to other similarly situated or sized deals? I think the biggest difference from state to state is whether adoption is mandated initially or whether it starts out as optional or voluntary. In the case of the states that we signed this quarter, it is not yet mandated. We expect it'll start out at somewhere around a $2 million ARR run rate, that probably starts at some point in early 2027, then would ramp up to $10 million plus as it becomes mandated. In the case of the state we signed last quarter, it has been mandated, we expect that ramp up. I believe that one was closer to $20 million ARR. That ramp up will start faster, it just depends on state policies from state to state, how they decide to govern that. It's not too dissimilar from our courts and e-filing business. You remember 10, 15, 10 years ago, 12 years ago, as we were rolling out e-filing, a lot of counties were sort of voluntary, then as jurisdictions went mandatory, which will happen over time as they foresee the value of the solution, you'll start to see those revenues pick up. Got it. Thanks, both. Super helpful color. Maybe just one quick follow-up, maybe Lynn for you, Brian feel free to weigh in as well. I know at the Investor Day, you guys talked a little about more disincentives or negative types of consequences, i.e. sticks, which you didn't like to use that term, which I get, as far as flipping to the cloud. I think you had mentioned either in your prepared remarks or in some of your comments earlier, Lynn, that you've rolled out email or comms basically to customers saying, kind of what to expect going forward. Any just initial feedback from customers around maybe some of the more negative aspects or the sticks pieces of that? Just trying to get a sense of how you think the new order, if you will, of getting people to move faster is being received by the customer base. Sure, Trevor. I'd say right now, yes, communication's gone out since Investor Day to our clients, and it's really about, look, we want to be there and hold your hand and work with you on the plan that's going to get you to the cloud. We'd like for you to have a plan in place within a certain time period. We're still focusing mostly on the incentives. We're not necessarily communicating right now what those disincentives will be. I'll tell you, the feedback we've got from a lot of clients as well, both at Connect that we had this past quarter, our client advisory board, our focus groups, and just our general day-to-day working relations with our clients is some of them also need our help in sort of selling the move to the cloud internally. We're working with them on the talking points that they need to go internally to sell those. The disincentives, I think you'll start to see come out more over the next 12- 24 months, as opposed to something that we're really focusing on right now today. Your next question comes from the line of Allan Verkhovski with BTIG. Your line is open. Please go ahead. Hi, everyone. Thanks for taking the questions here. You mentioned in the prepared remarks how you're testing pricing models in the market with respect to monetizing AI, and you went through different methods of monetization at the recent Investor Day, but can you just share what your latest learnings are coming out of this quarter on that front? Yeah, sure, Allan. Right now the proof points are, it is validating. When I think about how we price AI, and I think we covered this at Investor Day, there is really sort of three different models that we are talking about. The first is really what I call essentials or table stakes. This is stuff that is going to be in our product, it is going to improve our competitive position, it is going to improve our win rates, it is going to improve client sat. I also think it is stuff that as we continue to bake stuff in the product, that may also allow us to increase annual rates. The second is obviously the subscriptions uplift, where we are bundling AI capabilities, and then outcome-based type of pricing. On the subscription uplift, yeah, we are seeing that in the market right now. That is being well received. We are still testing and talking with our clients about the amount that we can charge for that and the viability of those going forward. Similar with outcome based. It is still early. It is being validated in the market, and again, you are going to start seeing more meaningful revenues coming from AI, really probably the second half of 2027. It will ramp up between now, second half of 2027 into going into 2028, I think you will start seeing more meaningful revenue. Perfect. Then maybe internally, just regarding that early internal productivity benefits you are seeing across development, implementation, and service delivery, can you just expand on what you are seeing there and how we should think about those benefits alongside your unchanged R&D guidance? Thanks, guys. Yeah, I think right now, some of it is still anecdotal. We are really trying to tease everything out and make sure there is clear ROI before we go invest too much internally on the developer side. We are seeing as much as anecdotally 30% increase in productivity. I do not know that that translates into anything other than our developers are going to be 30% more productive. The way I view productivity is we want more productivity, not less. In the areas of support and implementation, we have some guidelines that we are shooting towards. I am not ready to publish those. We are looking at different ways to both shorten implementations, which shortens time to value, which increases client sat, which helps us with cross-sells and up-sells. Same thing on the support side. How can our clients get their answers faster? We have got a lot of things in motion there. Again, it's still a little too early to say, "Hey, this is going to mean X return or Y return." All I can say is we're extremely diligent to make sure that whatever investments we're making into AI are going to have a meaningful ROI attached with them. Your next question comes from the line of Gabriela Borges with Goldman Sachs. Your line is open. Please go ahead. Hi, everyone. This is Grayson on for Gabriela. Thank you for taking the questions. I wanted to start with a little bit of the labor augmentation thesis that you discussed at your Investor Day. Sort of you outlined this vision where AI can expand your TAM beyond targeting traditional software budgets into more of the labor-related spending. I know it's early, but I wanted to ask, what evidence have you seen so far that customers are evaluating solutions through an ROI lens tied to labor rather than traditional software procurement? Are there any specific workflows where you're starting to see that shift materialize? Yeah, Grayson, that's a good question. I'd say a couple of the products that we talked about earlier on the call, Document Automation, Resident Assistant, those are being viewed specifically through the lens of the labor budget. In fact, one of our clients made the comment as we were going through the sales process, that they were going to be able to tap the labor budget to go ahead and procure this product. I think we outlined at Investor Day, Tarrant County, which is a Document Automation product, and we went from, I think, a $900,000 SaaS arrangement to about a $1.3 million total ARR. Pretty significant increase. We've seen it with Resident Assistant, being able to document the fewer amount of calls and Q&A that jurisdictions employees had to take. We all know, and we've talked about it for years, is that one of the things the public sector workforce is facing over the coming years is a shrinking labor force, both through retirements and also a lack of hiring and technology. Tapping that labor budget is becoming more meaningful. It's part of our playbook and discussion. We're still in the early innings, like we talk about everything else, but it is getting traction in the market. Great. Just one quick follow-up. In your prepared rema rks, you highlighted the 40+ AP Automation wins in the quarter. As customers adopt these workflows, how should investors think about the economic implications for Tyler? Do you see a bigger opportunity here for incremental software ARR, higher payments penetration, or a combination of both? Yes. It's a combination of both, for sure. AP Automation is one we called out. On an individual basis, as we add that to our ERP clients, it's a relatively small uplift in the SaaS fees, but it is a SaaS fee uplift. It does open up additional opportunities to leverage payments in association with that automation of invoice processing. It creates a new conversation and a new opportunity to bring in more transaction-based revenues tied to that automation. Your next question comes from the line of Andrew Sherman with TD Cowen. Your line is open. Please go ahead. Great. Thanks. I like the new format of the call, so kudos on that. Lynn, how would you rank order the product strength across the different portfolio products across ERP, Public Safety, financials, and Courts & Justice? How would you rank order those, and how is the pipeline building across those? How would you drive cross-sell up? There are some big cities and counties that might not have all of those core products. What are you working on to drive up cross-sell there? Thanks. Well, I would say this. When we talk about our cornerstone products, our view is that we want to be number one in the market with each of those cornerstones. I wouldn't rank one over the other. You can look at it in terms of our competitiveness or our functionality, but you can look at some things where we sit in the market and our market share. Clearly, a place like courts, we have a lot higher market share. There are fewer competitors, and we really dominate that market. ERP and Public Safety, more competitive markets, but our competitive position is really strong and continues to get stronger. We have made significant investments, for example, in our ERP products over the last 12 months. We are always doing that. Public Safety, some really nice wins this quarter against some really key competitors, which I always like to see. I would say generally, when I look at our portfolio, again, our flagship products, we want them to be number one, and I believe they are very competitive in each of the markets they serve. On the cross-sell, we have talked about cross-sell as being one of the key pillars of our growth. You are correct that especially in larger customers, very few have all of our flagship products. There are a lot of underpinnings that we are doing to create those opportunities to make a more compelling story for why that next product and the next product, when it comes time to replace those, should come from Tyler. We have talked a lot about going from that two or three products a customer to eight to 10 products a customer, and all of the things that we are doing to encourage that. That customer base that we have that does not have all those flagship products is a huge opportunity for us. Yeah, I think one of our biggest cross-sells of the quarter was out of our ERP division. We sold to the Mississippi State Department of Health, our Enterprise Permitting & Licensing, Enterprise Environmental Health. It was a $700,000 ARR deal. That was leveraged by our DSD or former NIC relationships. We've made great inroads with the state of Mississippi, and we're looking to turn that into what we call a, quote, "total Tyler state." That doesn't happen without those relationships across our different divisions. That's great. One more follow-up, Lynn. The Riverside deal in Public Safety seemed like a big one. Any way to ballpark size that and just the state of the Public Safety market and budgets, would love to hear any color on that. Thanks. Yeah, I think the Public Safety market is pretty healthy, and budgets seem to be stable as generally across all of our business lines. Our competitiveness is really strong. I'm happy with where we are in Public Safety. As you pointed out, we won some nice deals. As I mentioned, I don't like to call out competitors, but we had some really nice competitive wins against some very competitive companies in Q2. The momentum and engagement and my general excitement about what we're doing at Public Safety remains high. I don't have the Riverside deal off at the tip of my tongue. I'm not sure. We won a nice deal in Santa Cruz, California. I don't have Riverside. That was about a $660,000 ARR deal for our RMS and Enforcement Mobile Solutions. Great. Thanks, guys. Your next question comes from the line of Michael Turrin with Wells Fargo Securities. Your line is open. Please go ahead. Thanks very much. Appreciate you taking the questions. I guess just first on the Q2 metrics, I think what stands out is the new SaaS ACV and Flips ACV growth. I'm just curious, Brian, how durable is that from your perspective at this point? Is there anything we should be just mindful of in terms of comparison seasonality there, or just the right way to think about those metrics going forward? Yeah. Obviously, those are really good growth numbers, regardless of what the comp was, those were our SaaS bookings, and our total bookings were all-time quarterly records. It was the highest quarter ever for those bookings, again, regardless of the comp from last year. Clearly, as we talked about a lot last year, the first two quarters of last year were weaker booking quarters. Those are against somewhat easier comps, although the second quarter improved sequentially from the first, the second half of last year was stronger. I think one thing to point out is that both last quarter and this quarter, the good bookings numbers weren't really on the back of mega contracts or really big deals. The biggest deals were transaction-based, so they're not showing up in those SaaS numbers. It was just a lot of volume of good sort of traditional mid-size deals, and a handful of a little bit larger deals, no mega deals. Those things are still in the pipeline. It's hard to tell what quarter those could fall in. The comps are a little harder in the second half, as we said, the underlying factors of the strength that we're seeing in RFPs, the strength in the activity in sales demos, all those point to continued good bookings throughout the rest of the year. That's great. Just as the follow-up, Brian, you've now bought back more than 5.5% of shares outstanding year-to-date. Just maybe speak to how you're approaching the buyback from here as part of your overall capital allocation framework. What would lead you to hold that cadence going forward throughout the rest of the year versus moderate, or what could we see going forward? Yeah, Michael. Over the years, I'd say our priorities have sort of evolved based on what's going on in the market, what's going on in the business at a particular time. If you go back 10 years ago, our priority focus was internal investment, 2017, 2018. Coming out of NIC, our priorities were debt repayment. I'd say right now that share repurchases are taking a higher priority for me, and that's based on the confidence I have in our 2030 outlook and what I see the valuation in the stock market. I think it's a great time to buy right now. There have been three times in Tyler's history where we've really sort of gone hard at it. I'd say in the early 2000s, post-recession, 2010, 2012, and now. We've sprinkled buybacks in between those times. I just think where things sit today and the valuation that Tyler has in the market, our free cash flow, our outlook, the confidence in our future, it's a compelling value, and I think you'll see us continue to execute on that as we try to continue to reduce our share count and then really maintain that reduced count going forward. Your next question comes from the line of Jonathan Ho with William Blair. Your line is open. Please go ahead. Good morning. I wanted to just better understand. I think you said in the prepared remarks that you're embedding AI into your workflows. Can you provide a little bit more color on what customers are looking for in terms of embedding and what the opportunity is to more broadly build sort of that AI functionality across your entire portfolio? Yeah, I think at a high level, Jonathan, we're talking about automating just some more routine work, reducing those manual responses, helping our clients be able to make better decisions through data assistance and generative AI predictive and analysis. Basically just generally freeing our clients up to do other things. Again, we talked earlier about labor savings. It's making their day-to-day work go faster, and making them more efficient, in addition to being able to compensate for lost labor actually in the market. You see that stuff with things like, we talk about our Document Automation, our Priority Based Budgeting, AP Automation, report writing assistance, GL reconciliations, policy assistance, permit review assistance. Just things like that are getting inside of our products, inside of our workflows, and making our clients be more efficient with their daily tasks. In terms of that being embedded in the workflows as opposed to bolted on, that's really key to our clients. We're hearing from them that that's what they're looking for. From Tyler, they want them integrated and embedded in the system of record that's doing the work, and it's really a matter of trust and their comfort with how that data is being handled, how those models are working, and they want that from the same provider as the system. That makes a ton of sense and seems like it would have you bring AI to the customers as opposed to a large language model provider. Can you talk a little bit about maybe the spending environment, particularly as new state and local budgets start to unlock? I know you've said that the pipeline looks pretty good here, but just want to get a sense for, on a forward-looking basis, whether there's any concerns out there over the macroeconomic or anything that you're seeing on either the compliance driver side or grant driver side as well. Thank you. Yeah, Jonathan. We're not seeing any real change. I would say the market dynamic budgets are generally healthy and stable. It's been pretty consistent now for the last, I don't know, several quarters, maybe a year and a half, two years. I think that's pretty stable. A year ago, for example, we were talking about some decisions taking a little bit longer. The market didn't go away, but some decisions we're actually starting to see. It's still anecdotal, particularly in our ERP area, an uptick in the decisions actually being made. Generally speaking, the overall demand environment, the overall health is pretty consistent with where it's been. I think where customers, and it certainly varies from place to place, but where customers are seeing pressure, that's where the ROI analysis comes in and becomes more important. As they drive towards more efficiencies and doing more with less, the understanding of how technology can make that happen. Looking at that ROI, and that's also, as we talked about earlier, in certain instances, where the transaction-funded model is attractive. The systems that we've talked about states acquiring under that model, they don't have to appropriate budget funds for that. It operates outside of the budget through self-funded revenues, and the budget pressure does not enter into the equation. Your next question comes from the line of Mark Schappel with Loop Capital Markets. Your line is open. Please go ahead. Hi, thank you for taking my question. Lynn, in the past, you've discussed the goal of getting every client onto a single code stream for each of your products. I was wondering if you could just provide some additional details on how far along you are in that journey and maybe which businesses, such as Courts or ERP, are maybe the furthest along. Yeah, there's a lot to unpack there. At Investor Day, we talked about our whole Cloud Living initiative, which is to get everybody on that single stream that's got continuous improvement, continuous delivery. Before we can even achieve that, we've got to get people down to a single version, and we've got to get them in the cloud. You will see us start to unroll Cloud Living. We're launching pilots throughout 2027, and we're going to start to have clients referenceable on 2028. When you look generally at version control, what we've done, for example, you mentioned in Courts, over the last three years, we've gone from 89% of our clients being on a legacy system to only 7% today. Look at our Enterprise ERP, we've got about 80%, 85%, 90% are on the current version. Now, that's not necessarily our Cloud Living version. Getting them current, then moving them cloud, and getting them into our Cloud Living roadmap is a goal that's going to drive higher client sat, higher retention, increase upsell, and cross-sell opportunities. It's pretty exciting. It's a pretty bold vision. We've been working on it for many years. You're going to continue to see gains year-over-year over the coming years. Great. Thank you. Your next question comes from the line of Clarke Jeffries with Piper Sandler. Your line is open. Please go ahead. Hello. Thank you for taking the question. I noticed, had another sizable City of Orlando Public Safety flip. You made the comment at the Analyst Day that that segment has really had a change of heart when it comes to SaaS, nearly 100% going to cloud. Just wondering if we could get a state of affairs across the products. What segment remains the biggest set of holdouts? Is that the state courts? Just tactically, is the state team going to be taking over tackling those flips on the largest Court clients at the state level? Will they be working jointly with Courts & Justice team? Then one follow-up. I think the answer to the second question is I don't envision that. It's a smaller client base. Our relationships are strong and deep within our Courts & Justice Division, they'll continue to work those. There, just like other places, we talk about how the clients, they like to watch what their neighbors do, and they like to see it successful. We did that Idaho State flip a few years ago. That was the first one. Everybody watched it, that spurred more interest. Generally speaking, yes, Orlando was a really nice SaaS flip for our Public Safety Division. It involved our CAD product, our RMS, and our newer product, Emergency Networking, that came through acquisition last year. I don't think there's really a segment of the market that has the reluctance that we used to talk about a few years ago with Public Safety. Public Safety is moving to SaaS. That's all we're selling. We're actually a pure SaaS provider. Many of our competitors are still more in the lift and shift mode. I think just generally, across the board, I don't think there's any sort of structural or individual vertical market resistance. It's just the same factors that we've been talking about for the last couple of years. As more clients go, as more see the value, as we continue to roll out incentives and eventually disincentives, we'll reach our goals that we outlined in Investor Day. Perfect. I did see Federal Courts of Australia, For The Record, getting that transaction. Just wondering if there's any appetite to follow with other products in the portfolio for the international opportunity, anything that would make sense based off of For The Record having that presence. Remind us if it's an inside or a field sales motion for some of those international markets. Thank you. FTR is based in Australia, so not surprising they had a presence. They used to own a manual transcription business there, which was actually sold off while we owned a piece of FTR, so several years ago. They'll continue to do things in Australia. They'll continue to have sales international. They had a couple international sales, small deals, this past quarter. I don't think it changes our overall strategy, which is we've still got a lot of runway ahead in front of us. We've got a lot of strategic initiatives. We're rolling out, moving our U.S. clients to the cloud. We're rolling out AI here. I think it would be a bit of a distraction to think that we're going to start taking other products more international when we've got still such great runway in front of us here. There are no further questions at this time. I will now turn the call back to Lynn Moore for closing remarks. Thanks, Maria. Thanks everybody for joining our call today. If you have any further questions, please feel free to contact Brian Miller or myself. Thanks again and have a great day. This concludes today's call. Thank you for attending. You may now disconnect.