Q4 2025 Tyler Technologies Inc Earnings Call Transcript
Key Points
- Tyler Technologies Inc (TYL) reported strong recurring revenue growth of 11% in Q4 2025, driven by SaaS revenue growth of over 20% and transaction-based revenue growth of 12%.
- Free cash flow reached a record high for the fourth quarter, increasing nearly 10%, with a free cash flow margin expanding to 41%.
- The company achieved significant success in transitioning on-premises clients to the cloud, with annual contract value from these 'flips' rising 64.5% year-over-year.
- Tyler Technologies Inc (TYL) has a robust pipeline and strong demand environment, supported by generally healthy public sector budgets.
- The company is well-positioned to capitalize on future opportunities with a proven business model and clear competitive advantages, focusing on cloud transition, leveraging its large client base, and expanding into new markets.
- Tyler Technologies Inc (TYL) recorded a one-time non-cash loss reserve related to a contract dispute, resulting in the reversal of approximately $8.8 million of license revenues and $900,000 of professional services revenues.
- Total bookings in Q4 were flat compared to the previous year, impacted by a difficult comparison due to an unusually high number of large deals in the prior year.
- The company's non-GAAP operating margin decreased by 30 basis points year-over-year to 24.1% in Q4.
- Transaction revenues from the Texas payments contract ended in Q4, resulting in a $4 million shortfall compared to expectations.
- Maintenance revenues are expected to decline by 5% to 7% in 2026, and hardware and other revenues are projected to decline by 17% to 19%.
Ladies and gentlemen, hello, and welcome to today's Tyler Technologies fourth-quarter 2025 conference call. Your host for today's call is Lynn Moore, President and CEO of Tyler Technologies. (Operator Instructions). As a reminder, this conference is being recorded today, February 12, 2026.
I would like to turn the call over to Hala Elsherbini, Tyler's Senior Director of Investor Relations. Please go ahead.
Thank you, Abbie. And welcome to our call. With me today is Lynn Moore, our President and Chief Executive Officer; and Brian Miller, our Chief Financial Officer. After I gave the Safe Harbor statement, Lynn will have some initial comments on our quarter and then Brian will review the details of our results and our annual guidance for 2026. Lynn will end with some additional comments, and then we'll take your questions.
During this call, management may make statements that provide information other than historical information and may include projections concerning
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