Tyler Technologies, Inc. TYL delivered a solid first quarter of 2026, with non-GAAP earnings of $3.09 per share, which rose 11.2% year over year and beat the Zacks Consensus Estimate by 2.7%.
Tyler Technologies’ revenues increased 8.6% year over year to $613.5 million, topping the consensus mark by 0.64%.
The quarter’s performance was supported by accelerating bookings and continued momentum in cloud and AI-enabled offerings. Annualized recurring revenue (ARR) was $2.15 billion, up 10.4%, underscoring the durability of Tyler Technologies’ subscription-led model.
TYL’s Recurring Base Deepens in Q1
Recurring revenues increased 10.4% year over year to $538.6 million and represented 87.8% of total revenues, up from 86.3% in the year-ago quarter. Subscription revenues rose 14.6% to $429.8 million, keeping the revenue base tilted toward more predictable streams.
Tyler Technologies, Inc. Price, Consensus and EPS Surprise
Tyler Technologies, Inc. price-consensus-eps-surprise-chart | Tyler Technologies, Inc. Quote
Management said quarterly recurring and total revenues reached new record highs, reflecting strong execution across strategic priorities and improving operating leverage from a cloud-optimized platform.
Tyler Technologies' SaaS Engine Stays Hot as Deals Expand
SaaS revenues grew 23.5% year over year to $222.4 million, extending the company’s streak of 20% or greater SaaS growth to 21 consecutive quarters. Transaction revenues increased 6.4% to $207.4 million, with Tyler Technologies noting that revenues under the Texas payments contract ended in the fourth quarter of 2025.
Excluding the impact of the Texas payments contract, transaction revenues grew 13.8%, subscription revenues rose 18.6% and total revenues increased 11.0%, pointing to healthier underlying demand and volume trends in the transactions portfolio.
TYL’s Bookings Acceleration Signals Demand Resilience
Total bookings rose 10.1% year over year to $543 million, a record for first-quarter bookings. Total SaaS bookings jumped 40.4% to approximately $207 million in total contract value, reflecting strength across new deals, expansions, renewals and on-premises flips.
Sales execution was supported by sustained public sector demand indicators, including strong RFP and demo activity and a healthy pipeline across solutions, as highlighted in the company’s investor materials.
TYL Lifts Profitability on Mix and Cloud Efficiency
Non-GAAP operating income increased 10% year over year to $166.6 million, while non-GAAP operating margin expanded 40 basis points to 27.2%. Tyler Technologies attributed the margin improvement to a shift toward higher-margin SaaS and transaction revenues, alongside efficiency gains across cloud operations and disciplined expense management.
Adjusted EBITDA rose 9.3% to $177.3 million, reflecting the same mix and efficiency tailwinds that management emphasized in prepared remarks.
TYL Converts Growth to Cash at a Faster Clip
Cash flows from operations climbed 91% year over year to $107.3 million. Free cash flow more than doubled to $102.8 million, up 112.9%, and free cash flow margin expanded to 16.8% from 8.5% in the year-ago quarter.
Management framed the cash performance as a key proof point of operating leverage, particularly as cloud efficiencies improve and the business mix continues to move toward recurring revenues.
TYL Highlights Capital Returns and a Clean Balance Sheet
Tyler Technologies repaid $600 million of convertible debt at maturity in March and ended the quarter with cash and investments of approximately $398 million and no debt on the balance sheet.
The company repurchased 799,856 shares for about $250 million during the quarter and bought an additional 298,144 shares for roughly $97 million from the end of the first quarter through April 29. Year to date, TYL said that it has repurchased about 2.5% of shares outstanding, with roughly $653 million remaining under its current authorization.
TYL Updates 2026 Outlook After For The Record Deal
For full-year 2026, Tyler Technologies guided total revenues to be between $2.535 billion and $2.575 billion. The Zacks Consensus Estimate for TYL’s fiscal 2026 revenues is pegged at $2.53 billion, indicating year-over-year growth of 8.42%.
TYL’s non-GAAP earnings per share are projected to be between $12.50 and $12.75. The Zacks Consensus Estimate for Tyler Technologies’ fiscal 2026 earnings is pegged at $12.52, indicating year-over-year growth of 10.7%.
The company also projected a free cash flow margin of 26-28%, with R&D expense of $245-$250 million and capital expenditures of $18-$20 million.
The updated outlook includes the acquisition of For The Record, which closed on April 14 for approximately $223 million in cash. Management said the deal adds legal-grade speech-to-text and real-time, multilingual transcription capabilities to Tyler Technologies’ Courts & Justice portfolio and is expected to shift toward more recurring revenues as its SaaS transition progresses.
TYL Zacks Rank & Stocks to Consider
TYL currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector include Analog Devices ADI, Advanced Energy AEIS and Arista Networks ANET, each carrying a Zacks Rank 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Analog Devices have gained 41.3% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results in May. 20.
Shares of Advanced Energy have rallied 76.3% in the year-to-date period. Advanced Energy is slated to report first-quarter 2026 results in May. 4.
Arista Networks shares have surged 26.1% in the year-to-date period. Arista Networks is set to report first-quarter 2026 results on May 5.
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