Tyler Technologies (TYL) Down 10.3% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Tyler Technologies (TYL). Shares have lost about 10.3% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Tyler Technologies due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Tyler Technologies, Inc. before we dive into how investors and analysts have reacted as of late.

Tyler Technologies Q1 Earnings Beat Estimates, Revenues Rise Y/Y

Tyler Technologies 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.

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.

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.

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.

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.

TYL’s non-GAAP earnings per share are projected to be between $12.50 and $12.75.

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.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

Currently, Tyler Technologies has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Interestingly, Tyler Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Tyler Technologies belongs to the Zacks Internet - Software and Services industry. Another stock from the same industry, VeriSign (VRSN), has gained 10.2% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.

VeriSign reported revenues of $428.9 million in the last reported quarter, representing a year-over-year change of +6.6%. EPS of $2.34 for the same period compares with $2.10 a year ago.

VeriSign is expected to post earnings of $2.37 per share for the current quarter, representing a year-over-year change of +7.2%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for VeriSign. Also, the stock has a VGM Score of B.

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This article originally published on Zacks Investment Research (zacks.com).

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