Tyler Technologies Reports Earnings for Third Quarter 2026
TYLER TECHNOLOGIES INC (TYL) filed an SEC Form 8-K — Results of Operations and Financial Condition. Tyler Technologies Reports Earnings for Third Quarter 2026 SaaS revenues grew 21.2% and free cash flow reached a new quarterly high PLANO, Texas – October 28, 2026 – Tyler Technologies, Inc. (NYSE: TYL), a large-cap growth and value S&P 500 company, today announced financial resu
How this was made
The 30-second read
Why it matters
The earnings beat and issued guidance are likely to attract buying, especially given the record free cash flow and strong SaaS growth. The acquisition of CODY Systems and ongoing share repurchases further support a positive outlook.
Market read
The release provides fresh, material data for a large‑cap S&P 500 component, likely influencing both the stock and related SaaS peers.
What to watch
Potential headwinds from the Texas payments contract wind‑down could temper growth.
Tyler Technologies Reports Earnings for Third Quarter 2026 SaaS revenues grew 21.2% and free cash flow reached a new quarterly high
Third-quarter total revenue grew 8.7%, recurring revenue grew 11.0%, SaaS revenue grew 21.2%, and both GAAP and non-GAAP operating margins expanded. Free cash flow reached $277.0 million, while the company repurchased approximately $379 million of stock and maintained full-year guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenues, three months ended September 30, 2026GAAP | $647.6M | – | up 8.7% |
| Total revenues, nine months ended September 30, 2026GAAP | $1.91B | – | – |
| Recurring revenues, three months ended September 30, 2026other | $568.8M | – | up 11.0% |
| Annualized recurring revenue (ARR), third quarter 2026non-GAAP | $2.28B | – | up 11.0% |
| Gross profit, three months ended September 30, 2026GAAP | $318.2M | – | – |
| GAAP gross margin, three months ended September 30, 2026GAAP | 49.1 % | – | – |
| Non-GAAP gross profit, three months ended September 30, 2026non-GAAP | $336.2M | – | – |
| Non-GAAP gross margin, three months ended September 30, 2026non-GAAP | 51.9 % | – | – |
| Operating income, three months ended September 30, 2026GAAP | $117M | – | up 19.5% |
| GAAP operating margin, three months ended September 30, 2026GAAP | 18.1 % | – | – |
| Non-GAAP operating income, three months ended September 30, 2026non-GAAP | $182.1M | – | up 14.8% |
| Non-GAAP operating margin, three months ended September 30, 2026non-GAAP | 28.1 % | – | – |
| Operating income, nine months ended September 30, 2026GAAP | $311.9M | – | – |
| Non-GAAP operating income, nine months ended September 30, 2026non-GAAP | $514.3M | – | – |
| Net income, three months ended September 30, 2026GAAP | $95.1M | – | up 12.7% |
| GAAP diluted earnings per share, three months ended September 30, 2026GAAP | $2.33 per diluted share | – | – |
| Non-GAAP net income, three months ended September 30, 2026non-GAAP | $143.4M | – | up 10.0% |
| Non-GAAP diluted earnings per share, three months ended September 30, 2026non-GAAP | $3.52 per diluted share | – | – |
| Net income, nine months ended September 30, 2026GAAP | $269.8M | – | – |
| GAAP diluted earnings per share, nine months ended September 30, 2026GAAP | $ 6.51 | – | – |
| Non-GAAP net income, nine months ended September 30, 2026non-GAAP | $405.8M | – | – |
| Non-GAAP diluted earnings per share, nine months ended September 30, 2026non-GAAP | $ 9.79 | – | – |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $192.7M | – | up 13.4% |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $546.4M | – | – |
| Cash flows from operations, three months ended September 30, 2026GAAP | $282.5M | – | up 10.7% |
| Free cash flow, three months ended September 30, 2026non-GAAP | $277M | – | up 11.9% |
| Free cash flow margin, three months ended September 30, 2026non-GAAP | 42.8 % | – | – |
| Cash flows from operations, nine months ended September 30, 2026GAAP | $514.1M | – | – |
| Free cash flow, nine months ended September 30, 2026non-GAAP | $498.3M | – | – |
| Free cash flow margin, nine months ended September 30, 2026non-GAAP | 26.1 % | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| SubscriptionsSaaS revenues grew 21.2% to $242.2 million and transaction revenues grew 9.5% to $220.4 million. | $462.6M | – | up 15.3% |
| MaintenanceNo driver was provided for this revenue category. | $106.2M | – | – |
| Professional servicesNo driver was provided for this revenue category. | $62.97M | – | – |
| OtherNo driver was provided for this revenue category. | $15.76M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
full year 2026 outlook
- Revenue$2.535 billion to $2.565 billion
- NoteNon-GAAP diluted earnings per share: $12.95 to $13.20
- NoteFree cash flow margin: 26% to 28%
- NoteResearch and development expense: $245 million to $250 million
- NoteCapital expenditures: $20 million to $22 million
- NoteCapitalized software development costs included in capex: $5 million
- NoteNet interest income: $15 million to $17 million
Capital returns
- Repurchased 1,148,389 shares of common stock during the quarter for approximately $379 million.
- Approximately $1.37 billion remained under previously announced repurchase authorizations.
- Purchase of treasury shares was $ 1,124,102 for the nine months ended September 30, 2026.
- Repurchased approximately 8.5% of outstanding shares year-to-date.
What drove it
- Recurring revenues grew 11.0%, driven by SaaS revenue growth of 21.2%.
- Transaction-based revenues growth accelerated to 9.5%, or 14.2% excluding the impact of the Texas payments contract wind-down.
- Free cash flow was supported by earnings growth and improved working capital performance.
- The company completed the acquisition of CODY Systems on July 30 for approximately $27.7 million in cash.
- Approximately 300 deals containing AI had been sold across the client base to date.
Concerns
- Maintenance revenue was $ 106,239 for the three months ended September 30, 2026, compared with $ 111,312 for the comparable 2025 period.
- Professional services revenue was $ 62,968 for the three months ended September 30, 2026, compared with $ 64,728 for the comparable 2025 period.
- Other revenue was $ 15,757 for the three months ended September 30, 2026, compared with $ 18,745 for the comparable 2025 period.
- Transaction-based revenue growth was affected by the Texas payments contract wind-down.
- The company cited risks related to public-sector budgets, cybersecurity, AI regulation and adoption, integration of acquired businesses, project delays, transaction sizes, delivery timing, renewal rates, competition, and labor costs.
What to watch
- Progress toward full-year total revenue guidance of $2.535 billion to $2.565 billion.
- Whether SaaS growth and transaction-based revenue growth continue to support recurring revenue growth.
- Full-year free cash flow margin relative to guidance of 26% to 28%.
- Integration of CODY Systems and the execution of further disciplined acquisition opportunities.
- Further use of the approximately $1.37 billion remaining under share repurchase authorizations.
Balance sheet and cash flow
- Cash and cash equivalents were $ 788,222 as of September 30, 2026, compared with $ 1,015,400 as of December 31, 2025.
- Short-term investments were $ 91,172 as of September 30, 2026, compared with $ 81,800 as of December 31, 2025.
- Convertible senior notes due 2031, net were $ 1,410,110 as of September 30, 2026.
- Deferred revenue was $ 846,284 current and $ 17,971 long-term as of September 30, 2026.
- Net cash provided by operating activities was $ 282,473 for the three months ended September 30, 2026, and $ 514,146 for the nine months ended September 30, 2026.
- Cost of acquisitions, net of cash acquired was $ 24,739 for the three months ended September 30, 2026, and $ 239,030 for the nine months ended September 30, 2026.
Analysis
Tyler reported third-quarter total revenue of $647.6 million, up 8.7%, with recurring revenue of $568.8 million, up 11.0%, representing 87.8% of total revenue. Subscription revenue was $462.6 million, up 15.3%, led by SaaS revenue growth of 21.2% to $242.2 million. Transaction revenue grew 9.5% to $220.4 million, while the company stated that growth was 14.2% excluding the impact of the Texas payments contract wind-down. ARR was $2.28 billion, up 11.0%.
Profitability improved on both reported bases. GAAP gross margin was 49.1% versus 47.2%, and non-GAAP gross margin was 51.9% versus 50.4%. GAAP operating income rose 19.5% to $117.0 million and non-GAAP operating income rose 14.8% to $182.1 million. GAAP operating margin increased to 18.1% from 16.4%, while non-GAAP operating margin increased to 28.1% from 26.6%. GAAP net income was $95.1 million, or $2.33 per diluted share, and non-GAAP net income was $143.4 million, or $3.52 per diluted share.
Cash generation was a major feature of the quarter. Cash flows from operations were $282.5 million, up 10.7%, and free cash flow reached $277.0 million, up 11.9%, with free cash flow margin of 42.8% compared with 41.5%. Management attributed the free-cash-flow result to earnings growth and improved working capital performance. For the nine months ended September 30, 2026, free cash flow was $498,258 and free cash flow margin was 26.1%.
Capital deployment included the July 30 acquisition of CODY Systems for approximately $27.7 million in cash and third-quarter share repurchases of 1,148,389 shares for approximately $379 million. The company reported approximately $1.37 billion remaining under repurchase authorizations. Cash and cash equivalents were $788,222 at September 30, 2026, while convertible senior notes due 2031, net were $1,410,110.
The company maintained full-year 2026 guidance for total revenues of $2.535 billion to $2.565 billion, non-GAAP diluted earnings per share of $12.95 to $13.20, and free cash flow margin of 26% to 28%. The release did not provide prior outlook figures, so the filing does not permit a comparison of current results or the current outlook against previous company guidance.
Management, verbatim
We achieved solid third quarter results, with double-digit recurring revenue growth, robust margin expansion, strong bookings, and record quarterly free cash flow.
Lynn Moore, executive chair, president and chief executive officer
Strong SaaS bookings reinforce healthy public sector demand, reflected in a growing sales pipeline and driven by continued public sector investment in digital modernization.
Lynn Moore, executive chair, president and chief executive officer
Third quarter results reflect the strength and resilience of Tyler's recurring revenue model. Recurring revenues grew 11.0%, driven by SaaS revenue growth of 21.2%. Transaction-based revenues growth accelerated to 9.5% (14.2% excluding the impact of the Texas payments contract wind-down). Free cash flow reached a quarterly record of $277 million, up 11.9%, supported by earnings growth and improved working capital performance.
Brian Miller, executive vice president and chief financial officer
Not in the filing
stated, not guessed- Previous-release outlook or prior guidance figures were not provided, so comparisons with prior guidance are unavailable.
- Quarterly revenue by operating segment was not reported.
- GAAP reconciliation for forward-looking non-GAAP diluted earnings per share and free cash flow margin was not provided because the company stated that such reconciliations would require unreasonable efforts.
- A GAAP tax rate for the third quarter and full-year 2026 GAAP tax-rate guidance were not provided.
- Dividend information was not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Tyler Technologies (NYSE: TYL) is a S&P 500 provider of public‑sector software solutions. The filing is an SEC Form 8‑K reporting its Q3 2026 results and FY guidance.
Ticker impact
Tyler Technologies issued Q3 2026 earnings and full-year 2026 guidance, reporting 21.2% SaaS revenue growth and record free cash flow.
likely upward pressure as investors price in higher revenue growth and cash generation.
The company posted double‑digit revenue growth, record free cash flow, and issued its full‑year outlook, which typically drives buying interest.
Market effects
Positive results may lift other public‑sector software providers and SaaS peers.
Boosts sentiment for US large‑cap growth stocks in the S&P 500.
Limited to US equity markets; no direct global macro effect.
Counterpoint
If the market has already priced in the guidance, the stock could face short‑term profit‑taking.
Key entities
- companyTyler Technologies
Provider of public‑sector technology solutions, ticker TYL.
- companyCODY Systems
Acquired public‑safety SaaS firm.
