Tyler Technologies Surpasses Q3 Earnings and Revenue Estimates

Tyler Technologies, Inc. TYL reported better-than-expected third-quarter 2025 results. It came out with quarterly earnings of $2.97 per share, beating the Zacks Consensus Estimate of $2.88 per share by 3.12%. This compares with earnings of $2.52 per share a year ago.

Tyler Technologies surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 4.4%.

The company posted revenues of $595.9 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.19%. This compares with year-ago revenues of $543.34 million.

The year-over-year improvement in the top line was primarily driven by a rise in subscription revenues.

Tyler Technologies’ Q3 Revenue Details

Tyler Technologies’ recurring revenues from maintenance and subscriptions increased 10.7% year over year to $512.4 million, accounting for 86.0% of total quarterly revenues of $595.9 million.

The company reported annualized recurring revenues (ARR) on a non-GAAP basis of $2.05 billion, up 10.7% year over year.

Segment-wise, maintenance revenues (18.7% of total revenues) were $111.3 million, down from $115.6 million in the year-ago quarter.

Subscription revenues (67.3% of total revenues) grew 15.5% year over year to $401.1 million, driven by 19.9% growth in SaaS revenues to $199.8 million and 11.5% growth in transaction-based revenues to $201.3 million.

Software licenses and royalties (0.9% of total revenues) declined 17.6% year over year to $5.1 million.

Professional services revenues (10.9% of total revenues) were $64.7 million, nearly flat from $64.5 million in the prior-year quarter.

Hardware and other revenues (2.3% of total revenues) rose 37.4% year over year to $13.6 million.

Tyler Technologies’ Operating Details

Tyler Technologies’ non-GAAP gross profit increased 18.5% year over year to $281.5 million. Moreover, the non-GAAP gross margin improved 350 basis points (bps) to 47.2%.

Adjusted EBITDA rose 14.4% year over year to $169.9 million.

Non-GAAP operating income for the quarter totaled $158.6 million and jumped 15.1% year over year. The non-GAAP operating margin expanded 120 bps to 26.6%.

Tyler Technologies’ Balance Sheet & Other Details

As of Sept. 30, 2025, TYL’s cash and investments were $834.1 million compared with $892.3 million as of June 30, 2025.

The company generated an operating cash flow of $255.2 million and a free cash flow of $247.6 million in the third quarter of 2025. In the first nine months of 2025, it generated operating and free cash flows of $409.7 million and $383.8 million, respectively.

Tyler Revised FY25 Guidance

Tyler Technologies now projects full-year 2025 revenues between $2.335 billion and $2.36 billion, revised from the earlier guidance range of $2.33-$2.36 billion. The Zacks Consensus Estimate for 2025 revenues is pegged at $2.34 billion, indicating year-over-year growth of 9.5%.

The company now projects its adjusted earnings per share in the range of $11.30-$11.50, revised from the previously provided guidance of $11.20-$11.50. The consensus mark for 2025 earnings is pegged at $11.36 per share.

TYL's Zacks Rank and Stocks to Consider

Currently, TYL carries a Zacks Rank #3 (Hold).

Impinj PI, Credo Technology Group CRDO and Amphenol APH are some better-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Impinj, Credo Technology Group and Amphenol sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Impinj’s full-year 2025 earnings is pegged at $1.98 per share, revised upward by four cents over the past 30 days and suggests a year-over-year decline of 6.2%. Impinj shares have soared 63.7% year to date.

The consensus estimate for Credo Technology Group’s fiscal 2026 earnings has been revised upward by a cent over the past 30 days to $2.04 per share, suggesting an increase of 191.4% year over year. Credo Technology Group shares have rallied 133.9% year to date.

The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings has been revised upward to $3.22 per share from $3.03 per share over the past seven days, reflecting 70.4% year-over-year growth. Amphenol shares have risen 95.7% year to date.

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

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