TYLMEDIUM SIGNALOPPORTUNITY10-K

Tyler Technologies meaningfully expanded its recurring revenue base to 87% of total revenues in 2025, while delivering solid growth across revenue, operating income, and net income.

The shift from 84% to 87% recurring revenue mix, alongside subscription-based revenues growing from $1.3 billion in 2024 to $1.6 billion in 2025, signals a continued and deliberate transition toward higher-quality, more predictable revenue streams. The updated payments platform language — now explicitly described as an "integrated" platform covering the "entire payments lifecycle" — suggests Tyler is deepening its product positioning and competitive differentiation in public sector payments. Investors should note the substantial rise in current liabilities (+64.7%), which warrants monitoring for any shifts in deferred revenue composition or near-term obligations.

Comparing 2026-02-18 vs 2025-02-19View on EDGAR →
FINANCIAL ANALYSIS

Revenue grew approximately 18% year-over-year, with gross profit expanding roughly 16% to $1.1 billion, and both operating income and net income posting mid-to-high teens percentage gains — a consistent and healthy growth profile for an established government software platform. SG&A expense rose approximately 50%, growing notably faster than revenue, which investors should watch as a potential margin headwind if the trend continues. On the balance sheet, cash grew 36% to $1.0 billion while current liabilities rose sharply to $1.8 billion, likely reflecting deferred revenue build from subscription growth; capital expenditures declined modestly to $16.0 million, suggesting a capital-light posture consistent with a maturing SaaS transition.

FINANCIAL STATEMENT CHANGES
Current Liabilities
Balance Sheet
+64.7%
$1.1B→$1.8B

Current liabilities surged 64.7% — significant near-term obligations; verify ability to meet short-term debt.

SG&A Expense
P&L
+50.5%
$259.6M→$390.6M

SG&A up 50.5% — significant increase in sales or administrative costs, monitor impact on operating leverage.

Cash & Equivalents
Balance Sheet
+36.3%
$744.7M→$1.0B

Cash position surged 36.3% — strong cash generation or capital raise providing significant financial cushion.

Current Assets
Balance Sheet
+28%
$1.4B→$1.8B

Current assets grew 28% — improving short-term liquidity or inventory/receivables build.

Capital Expenditure
Cash Flow
-22%
$20.5M→$16.0M

Capex reduced 22% — investment cycle winding down or capital discipline; may improve near-term free cash flow.

Net Income
P&L
+20%
$263.0M→$315.6M

Net income grew 20% — bottom-line growth signals improving overall business health.

Operating Income
P&L
+19.4%
$299.5M→$357.7M

Operating income improving — cost discipline or growing revenue base absorbing fixed costs.

Revenue
P&L
+18.4%
$416.6M→$493.1M

Revenue growing 18.4% — solid top-line momentum, watch margins for quality of growth.

Gross Profit
P&L
+15.8%
$935.8M→$1.1B

Gross profit expanding — improving pricing power or product mix shift toward higher-margin offerings.

LANGUAGE CHANGES
NEW — 2026-02-18
PRIOR — 2025-02-19
ADDED
Payments: The leading integrated payments platform for Tyler s public sector clients, processing nearly half a billion transactions annually and covers the entire payments lifecycle, including integrated credit, debit and ACH processing, billing, invoice presentment, merchant onboarding, support, collections, reconciliation, and disbursements.
Revenues We derive our revenues from three primary sources: Subscription-based services Maintenance and support Professional services Subscription-Based Services Subscriptions revenue consists of revenues derived from our Software as a Service ( SaaS ) arrangements and transaction-based fees.
5 Maintenance and Support Support is provided through an omni-channel approach including phone, knowledge base and client support portal experiences.
Our other sources of revenue include software licenses and royalties and hardware equipment, which represented 2.5% and 3.2% of total revenues for the twelve months ended December 31, 2025 and 2024, respectively.
We have a large recurring revenue base from subscription-based services and maintenance and support, which generated revenues of $2.0 billion, or 87% of total revenues, in 2025.
Subscription-based revenues have been our fastest growing revenue category over the past five years, increasing from $784.4 million in 2021 to $1.6 billion in 2025.
ARR was $2.06 billion and $1.86 billion as of December 31, 2025, and 2024, respectively.
ARR increased approximately 11% compared to the prior period primarily due to an increase in subscriptions revenue resulting from an ongoing shift toward SaaS arrangements and expansion with existing clients.
SEASONALITY Transaction-based fees are generally derived from multi-year contracts with our clients that generate fees from payment transactions and digital government services and are collected on a recurring basis during the contract term.
As of December 31, 2025, we had approximately 7,800 team members.
REMOVED
Payments: The leading platform for public sector payments that processes nearly half a billion transactions annually and covers the entire payments life cycle, including billing, presentment, merchant onboarding, collections, reconciliation, and disbursements.
Revenues We derive our revenues from three primary sources: Subscription-based services Maintenance and support Professional services Subscription-Based Services Subscriptions revenue consists of revenues derived from our SaaS arrangements and transaction-based fees.
5 Maintenance and Support Support is provided to clients over the phone or via the Internet through help desks staffed by our client support representatives.
Our other sources of revenue include software licenses and royalties and computer hardware equipment, which represent 3% and 4% of total revenues for the twelve months ended December 31, 2024 and 2023, respectively.
We have a large recurring revenue base from subscription-based services and maintenance and support, which generated revenues of $1.8 billion, or 84% of total revenues, in 2024.
Subscription-based revenues have been our fastest growing revenue category over the past five years, increasing from $350.6 million in 2020 to $1.3 billion in 2024.
ARR was $1.86 billion and $1.61 billion as of December 31, 2024, and 2023, respectively.
ARR increased approximately 15% compared to the prior period primarily due to an increase in subscriptions revenue resulting from an ongoing shift toward SaaS arrangements.
SEASONALITY Transaction-based fees are generally the result of multi-year contracts with our clients that result in fees generated by payment transactions and digital government services and are collected on a recurring basis during the contract term.
As of December 31, 2024, we had approximately 7,400 team members.
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