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Tyler Technologies (TYL)
NYSE:TYL
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Tyler Technologies
(NYSE:TYL)
68Neutral
Positive Factors
Cloud Momentum
TYL's cloud momentum with government is running ahead of schedule, driving confidence in free cash flow margin build ahead of '25 targets.
Financial Performance
Tyler reported strong Q4 results with Subscription revenue $4mm above our estimates.
Negative Factors
Contract Impact
Management expects to realize about $29mm in revenue from a low margin payments contract for the state of Texas, which will be phased out in August.
Tyler Technologies (TYL) vs. S&P 500 (SPY)
Market Cap
$24.31B
Dividend YieldN/A
Average Volume (3M)283.30K
Price to Earnings (P/E)94.1
Beta (1Y)1.01
Revenue Growth9.53%
EPS Growth56.32%
CountryUS
Employees7,400
SectorTechnology
Sector Strength54
IndustrySoftware
Share Statistics
EPS (TTM)6.04
Shares Outstanding43,013,800
10 Day Avg. Volume332,522
30 Day Avg. Volume283,299
Financial Highlights & Ratios
PEG Ratio1.67
Price to Book (P/B)N/A
Price to Sales (P/S)11.44
Price to Cash Flow (P/CF)27.20
P/FCF Ratio27.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$698.09Price Target Upside26.14% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
Tyler Technologies Business Overview & Revenue Model
Company DescriptionTyler Technologies, Inc. is a leading provider of integrated software and technology services focused on local governments and other public sector entities. The company offers a comprehensive suite of solutions designed to enhance the efficiency and effectiveness of public administration across various sectors such as public safety, education, courts and justice, and financial management. Tyler Technologies' products help streamline processes, improve data management, and enable greater transparency and engagement between governments and their constituents.
How the Company Makes MoneyTyler Technologies generates revenue primarily through the sale of software solutions and services to local governments and public sector entities. Their revenue model includes licensing fees for the use of their software products, subscription fees for cloud-based services, and ongoing maintenance and support contracts. Additionally, Tyler Technologies offers professional services such as consulting, implementation, and training, which contribute to their earnings. The company also benefits from strategic partnerships and long-term contracts with governmental agencies, which provide a stable and recurring revenue stream. Tyler's focus on delivering tailored solutions that address the specific needs of public sector clients helps it maintain a strong market position and drive financial growth.
Tyler Technologies Financial Statement Overview
Summary
Tyler Technologies demonstrates strong financial health and operational efficiency, with notable revenue and profit growth, low leverage, and robust cash flow generation. The balance sheet reflects prudent financial management, while cash flows indicate effective profit conversion and liquidity. Continued focus on enhancing ROE could further bolster financial performance.Income Statement
Tyler Technologies has shown strong revenue growth with a 9.52% increase from the previous year to the TTM period. The Gross Profit Margin stands at 42.27%, indicating efficient cost management. Net Profit Margin improved to 12.30%, demonstrating enhanced profitability. The EBIT Margin is 14.01%, while the EBITDA Margin is 19.62%, reflecting robust operational performance.85
Very Positive
Balance Sheet
The company maintains a solid financial position with an Equity Ratio of 100%, indicating no leverage and strong equity support. The Debt-to-Equity Ratio is 0.12, showcasing low reliance on debt. Return on Equity (ROE) improved to 5.08%, though there is room for growth in maximizing shareholder returns.75
Positive
Cash Flow
Tyler Technologies exhibits strong cash flow generation with a Free Cash Flow to Net Income Ratio of 2.20, indicating effective conversion of profits into cash. The Operating Cash Flow to Net Income Ratio is 2.38, reflecting high cash generation relative to net income. The Free Cash Flow Growth Rate is 77.08%, signifying substantial cash flow improvement.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.14B | 1.95B | 1.85B | 1.59B | 1.12B | Gross Profit |
| 935.76M | 861.10M | 783.86M | 709.64M | 542.51M | EBIT |
| 299.53M | 218.54M | 214.25M | 180.74M | 172.93M | EBITDA |
| 299.53M | 392.63M | 388.01M | 328.12M | 254.58M | Net Income Common Stockholders |
| 263.03M | 165.92M | 164.24M | 161.46M | 194.82M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 767.98M | 175.88M | 210.89M | 361.47M | 709.15M | Total Assets |
| 5.18B | 4.68B | 4.69B | 4.73B | 2.61B | Total Debt |
| 638.37M | 696.89M | 1.05B | 1.39B | 22.18M | Net Debt |
| -106.35M | 531.40M | 872.32M | 1.08B | -581.44M | Total Liabilities |
| 1.79B | 1.74B | 2.06B | 2.41B | 621.16M | Stockholders Equity |
| 3.39B | 2.94B | 2.62B | 2.32B | 1.99B |
| Cash Flow | Free Cash Flow | |||
| 604.10M | 327.43M | 331.30M | 316.14M | 326.62M | Operating Cash Flow |
| 624.63M | 380.44M | 381.45M | 371.75M | 355.09M | Investing Cash Flow |
| -67.61M | -76.96M | -172.53M | -2.09B | -98.32M | Financing Cash Flow |
| 22.21M | -311.84M | -344.24M | 1.42B | 114.17M |
Tyler Technologies Technical Analysis
Negative
553.41
Price Trends
597.80
Negative
603.46
Negative
575.03
Negative
Market Momentum
-10.83
Positive
30.57
Neutral
4.83
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TYL, the sentiment is Negative. The current price of 553.41 is below the 20-day moving average (MA) of 609.02, below the 50-day MA of 597.80, and below the 200-day MA of 575.03, indicating a bearish trend. The MACD of -10.83 indicates Positive momentum. The RSI at 30.57 is Neutral, neither overbought nor oversold. The STOCH value of 4.83 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TYL.
Tyler Technologies Risk Analysis
Tyler Technologies disclosed 35 risk factors in its most recent earnings report. Tyler Technologies reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Tyler Technologies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $2.83T | 30.64 | 34.29% | 0.83% | 15.04% | 12.38% | |
79 Outperform | $164.02B | 54.18 | 17.43% | 0.66% | 13.73% | 9.93% | |
77 Outperform | $303.77B | 90.17 | 7.12% | 0.66% | 9.55% | -2.28% | |
75 Outperform | $188.60B | 35.35 | 47.28% | ― | 10.65% | 44.84% | |
68 Neutral | $24.31B | 94.09 | 8.32% | ― | 9.53% | 56.32% | |
67 Neutral | $403.27B | 33.88 | 108.79% | 1.11% | 6.23% | 12.37% | |
58 Neutral | $21.67B | 10.03 | -18.61% | 2.39% | 5.01% | -23.17% |
* Technology Sector Average
Performance Comparison
TYL
Tyler Technologies
553.41
135.13
32.31%
ADBE
Adobe
377.84
-192.61
-33.76%
INTU
Intuit
581.32
-64.76
-10.02%
MSFT
Microsoft
378.77
-43.23
-10.24%
ORCL
Oracle
147.66
23.47
18.90%
SAP
SAP AG
255.19
66.45
35.21%
Tyler Technologies Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -9.32% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call presents a positive outlook for Tyler Technologies, with strong growth in SaaS and transaction revenues, significant operating margin expansion, and record free cash flow. Despite some challenges such as the wind-down of the Texas payments contract and expected declines in maintenance and professional services revenue, the overall sentiment is positive, reflecting confidence in continued growth and margin improvement.Highlights
Strong SaaS Revenue Growth
SaaS revenue grew 23% in Q4, marking the sixteenth consecutive quarter of 20% or more growth. The company also reported SaaS adoption with 97% of new software contract value in the cloud.
Record Transaction Revenues
Transaction revenues reached a new quarterly high, growing nearly 21% driven by new transaction services and higher transaction volumes.
Significant Operating Margin Expansion
Non-GAAP operating margin expanded to 24.4%, benefiting from the shift to higher SaaS revenues.
Strong Bookings and New Contracts
New software bookings in Q4 included $141 million in new SaaS contract value, up 37% from last year.
Free Cash Flow Achievements
Free cash flow of $216 million significantly exceeded expectations, reaching a new high for a fourth quarter.
Expansion in Public Safety Solutions
The company signed notable SaaS contracts in public safety, including deals with the Iowa Department of Public Safety and Michigan State Police.
Lowlights
Texas Payments Contract Wind-Down
The payments processing contract with the state of Texas is set to expire in August 2025, with expected revenues of $29 million at a low gross margin.
Decline in Maintenance and Professional Services Revenue
Maintenance revenue is expected to decline by 4% to 6%, and professional services revenue is expected to be flat to down 3% as the company moves towards more efficient cloud-based solutions.
Company Guidance
In the fourth quarter of fiscal year 2024, Tyler Technologies reported strong financial performance and provided guidance for 2025, highlighting key metrics and strategic initiatives. The company achieved a nearly 15% growth in recurring revenue, driven by a 23% increase in SaaS revenue, marking the sixteenth consecutive quarter of over 20% SaaS revenue growth. Non-GAAP operating margins expanded to 24.4%, supported by a shift towards higher SaaS revenues, while free cash flow reached a record $216 million. For 2025, Tyler Technologies anticipates total revenues between $2.30 billion and $2.34 billion, with SaaS revenue expected to grow between 21% and 24% and transaction revenues by 10% to 12%. The company aims to achieve non-GAAP diluted EPS between $10.90 and $11.15 and free cash flow margins of 24% to 26%. Tyler Technologies continues to focus on its cloud-first strategy, with a significant portion of new software contracts being cloud-based, and is optimistic about reaching its long-term targets, including a recurring revenue CAGR of 10% to 12% and $1 billion in free cash flow by 2030.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.