A month has gone by since the last earnings report for Tyler Technologies (TYL). Shares have lost about 4.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Tyler Technologies due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Tyler Technologies Q2 Earnings and Revenues Beat Estimates
Tyler Technologies, Inc. reported better-than-expected second-quarter 2025 results. The company reported second-quarter non-GAAP earnings of $2.91 per share, which beat the Zacks Consensus Estimate by 4.7% and increased 21.3% year over year.
Tyler Technologies’ second-quarter revenues increased 10.2% year over year to $596.1 million. The top line topped the Zacks Consensus Estimate of $586.2 million by 1.7%.
Quarterly Details of Tyler Technologies
Tyler Technologies’ recurring revenues from maintenance and subscriptions increased 15.2% year over year to $517.2 million and accounted for 86.8% of the total quarterly revenues. The company reported annualized recurring revenues on a non-GAAP basis of $2.07 billion, up 15.2% year over year.
Segment-wise, Maintenance revenues (accounting for 18.8% of total revenues) were $112.1 million, down from $115.3 million reported in the year-ago quarter. Our model estimate for Maintenance revenues was pegged at $110 million.
Subscription revenues (68% of total revenues) grew 21.4% year over year to $405.1 million, while our model estimate for the same was pinned at $387.6 million.
Software licenses and royalties (0.6% of total revenues) of approximately $3.7 million fell year over year by 31.3%. Our model predicted that Software licenses and royalties’ sales would decrease 16.7% to $4.4 million.
Professional Services revenues (9.8% of total revenues) amounted to $58.6 million, down 18.5% from the year-ago quarter. Our model estimate for the same was pegged at $71 million.
Hardware and other revenues (2.8% of total revenues) were up 13% from the year-ago quarter to $16.6 million. Our model estimate for Hardware and other revenues was pegged at $12.5 million.
Tyler’s Operating Details
Tyler Technologies’ non-GAAP gross profit increased 14.4% year over year to $291.4 million. Moreover, the non-GAAP gross margin improved 180 basis points (bps) to 48.9%.
Adjusted EBITDA rose 18.3% year over year to $169.1 million.
Non-GAAP operating income for the quarter totaled $158.1 million and jumped 19.3% year over year. The non-GAAP operating margin expanded 200 bps to 26.5%.
Tyler’s Balance Sheet & Other Details
As of June 30, 2025, TYL’s cash and investments were $892.3 million compared with $807.4 million as of March 31, 2025.
The company generated an operating cash flow of $98.3 million and a free cash flow of $88 million in the second quarter of 2025. In the first half of 2025, it generated operating and free cash flows of $154.5 million and $136.3 million, respectively.
Tyler Revised FY25 Guidance
Tyler Technologies now projects full-year 2025 revenues between $2.33 billion and $2.36 billion, up from the earlier guidance range of $2.31-$2.35 billion.
The company now projects its adjusted earnings per share in the range of $11.20-$11.50, up from the previously provided guidance of $11.05-$11.35.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
VGM Scores
At this time, Tyler Technologies has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Tyler Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
