tyl-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission File Number 1-10485

TYLER TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)


Delaware						75-2303920
(State or other jurisdiction of incorporation or organization)						(I.R.S. employer identification no.)


5101 TENNYSON PARKWAY	PLANO	Texas	75024
(Address of principal executive offices)	(City)	(State)	(Zip code)

(972) 713-3700

(Registrant’s telephone number, including area code)


Title of each class	Trading symbol	Name of each exchange on which registered
COMMON STOCK, $0.01 PAR VALUE	TYL	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data file required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer," "accelerated filer,” "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The number of shares of common stock of registrant outstanding on April 22, 2024 was 42,455,267.

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended March 31,
	2024		2023
Revenues:
Subscriptions	$	313,243	$	280,465
Maintenance	117,218		115,130
Professional services	64,806		60,929
Software licenses and royalties	8,734		10,130
Hardware and other	8,358		5,199
Total revenues	512,359		471,853

Cost of revenues:
Subscriptions, maintenance, and professional services	268,870		252,415
Software licenses and royalties	1,565		2,313
Amortization of software development	4,363		2,588
Amortization of acquired software	9,239		8,920
Hardware and other	4,656		5,780
Total cost of revenues	288,693		272,016

Gross profit	223,666		199,837

Sales and marketing expense	36,427		37,103
General and administrative expense	72,710		72,360
Research and development expense	29,433		26,987
Amortization of other intangibles	18,118		18,407

Operating income	66,978		44,980

Interest expense	(2,184)		(7,684)
Other income, net	1,845		1,246
Income before income taxes	66,639		38,542
Income tax provision	12,469		7,667
Net income	$	54,170	$	30,875

Earnings per common share:
Basic	$	1.28	$	0.74
Diluted	$	1.26	$	0.73

See accompanying notes.

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2024		2023
Net income	$	54,170	$	30,875
Other comprehensive income, net of tax:
Securities available-for-sale and transferred securities:
Change in net unrealized holding gain (loss) on available for sale securities during the period	53		94


Other comprehensive income, net of tax	53		94
Comprehensive income	$	54,223	$	30,969

See accompanying notes.

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value and share amounts)


	March 31, 2024 (unaudited)		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	188,237	$	165,493
Accounts receivable (less allowance for losses and sales adjustments of $20,198 in 2024 and $22,829 in 2023)	542,441		619,704
Short-term investments	8,707		10,385
Prepaid expenses	76,486		54,700

Other current assets	8,550		10,303
Total current assets	824,421		860,585
Accounts receivable, long-term	7,340		8,988
Operating lease right-of-use assets	37,874		39,039
Property and equipment, net	167,121		169,720
Other assets:
Software development costs, net	69,795		67,124
Goodwill	2,532,125		2,532,109
Other intangibles, net	901,434		928,870
Non-current investments	5,492		7,046
Other non-current assets	63,153		63,182
	$	4,608,755	$	4,676,663
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	145,168	$	146,339
Accrued liabilities	106,446		158,558
Operating lease liabilities	11,147		11,060
Current income tax payable	38,293		2,466
Deferred revenue	571,871		632,914
Current portion of term loans	—		49,801
Total current liabilities	872,925		1,001,138


Convertible senior notes due 2026, net	596,638		596,206
Deferred revenue, long-term	—		291
Deferred income taxes	54,274		78,590
Operating lease liabilities, long-term	37,631		39,822
Other long-term liabilities	24,152		22,621
Total liabilities	1,585,620		1,738,668
Commitments and contingencies	—		—
Shareholders' equity:
Preferred stock, $10.00 par value; 1,000,000 shares authorized; none issued	—		—
Common stock, $0.01 par value; 100,000,000 shares authorized; 48,147,969 shares issued and outstanding as of March 31, 2024 and December 31, 2023	481		481
Additional paid-in capital	1,385,095		1,354,787
Accumulated other comprehensive loss, net of tax	(273)		(326)
Retained earnings	1,657,943		1,603,773
Treasury stock, at cost; 5,707,093 and 5,858,476 shares in 2024 and 2023, respectively	(20,111)		(20,720)
Total shareholders' equity	3,023,135		2,937,995
	$	4,608,755	$	4,676,663

See accompanying notes.

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2024		2023
Cash flows from operating activities:
Net income	$	54,170	$	30,875
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	40,097		38,112

Share-based compensation expense	26,866		27,896

Amortization of operating lease right-of-use assets	2,522		3,804
Deferred income tax benefit	(24,334)		(18,556)
Other	(35)		499
Changes in operating assets and liabilities, exclusive of effects of acquired companies:
Accounts receivable	69,376		77,563
Income tax payable	35,827		25,670
Prepaid expenses and other current assets	(20,240)		(18,381)
Accounts payable	(1,140)		17,547
Operating lease liabilities	(3,461)		(2,246)
Accrued liabilities	(48,006)		(36,951)
Deferred revenue	(61,334)		(71,579)
Other long-term liabilities	1,531		456
Net cash provided by operating activities	71,839		74,709

Cash flows from investing activities:
Additions to property and equipment	(7,282)		(2,020)
Purchase of marketable security investments	—		(10,617)
Proceeds and maturities from marketable security investments	3,271		22,975


Investment in software development	(7,386)		(9,079)
Cost of acquisitions, net of cash acquired	(1,302)		(1,875)
Other	18		16
Net cash used by investing activities	(12,681)		(600)

Cash flows from financing activities:

Payment on term loans	(50,000)		(120,000)





Proceeds from exercise of stock options, net of withheld shares for taxes upon equity award settlement	10,033		(158)
Contributions from employee stock purchase plan	3,553		3,037
Net cash used by financing activities	(36,414)		(117,121)

Net increase (decrease) in cash and cash equivalents	22,744		(43,012)
Cash and cash equivalents at beginning of period	165,493		173,857
Cash and cash equivalents at end of period	$	188,237	$	130,845

See accompanying notes.


	Three Months Ended March 31,
	2024		2023
Supplemental cash flow information:
Cash paid for interest	$	1,741	$	6,784
Cash received for income taxes, net	(680)		(548)
Non-cash investing and financing activities:
Non-cash additions to property and equipment	$	277

SEC Form 10-Q filed by Tyler Technologies Inc.