A month has gone by since the last earnings report for Tyler Technologies (TYL). Shares have lost about 2.5% 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 latest earnings report in order to get a better handle on the recent catalysts for Tyler Technologies, Inc. before we dive into how investors and analysts have reacted as of late.
Tyler Technologies Surpasses Q3 Earnings and Revenue Estimates
Tyler Technologies, Inc 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.
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.
Quarterly Details of Tyler Technologies
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’s 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’s 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 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Tyler Technologies has a strong 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 was allocated a grade 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 C. 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 indicates a downward shift. Notably, 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 is part of the Zacks Internet - Software and Services industry. Over the past month, VeriSign (VRSN), a stock from the same industry, has gained 7.3%. The company reported its results for the quarter ended September 2025 more than a month ago.
VeriSign reported revenues of $419.1 million in the last reported quarter, representing a year-over-year change of +7.3%. EPS of $2.27 for the same period compares with $2.07 a year ago.
VeriSign is expected to post earnings of $2.32 per share for the current quarter, representing a year-over-year change of +16%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
VeriSign has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Tyler Technologies, Inc. (TYL): Free Stock Analysis Report VeriSign, Inc. (VRSN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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