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Tyler's (TYL) Q2 Earnings and Revenues Beat Expectations
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Tyler Technologies (TYL - Free Report) reported second-quarter 2023 non-GAAP earnings of $2.01 per share, which beat the Zacks Consensus Estimate of $1.86 and increased 6.9% from the year-ago quarter’s $1.88 per share.
Non-GAAP revenues increased 7.6% year over year to $504.3 million. The top line surpassed the Zacks Consensus Estimate of $490.7 million.
The robust year-over-year top-line growth was primarily driven by rise in subscription revenues. During the second quarter, software subscription arrangements comprised approximately 82% of the total new software contract value as the company continued to transform into a software-as-a-service model from its on-premise license-based model. On an organic basis, non-GAAP revenues increased 10.4%.
Tyler Technologies, Inc. Price, Consensus and EPS Surprise
Tyler’s recurring revenues from maintenance and subscriptions increased 11.2% year over year to $414.3 million and accounted for 82.2% of the total quarterly revenues.
TYL reported annualized recurring revenues on a non-GAAP basis of $1.66 billion, up 11.2% year over year.
Segment-wise, Maintenance revenues (accounting for 23.1% of total revenues) were $116.5 million, slightly down from $116.8 million in the year-ago quarter. Our model estimates for Maintenance revenues were pegged at $113.7 million.
Subscription revenues (59.1% of total revenues) grew 16.4% year over year to $297.8 million while our model estimate for the same was $289.6 million.
Software licenses and royalties (1.9% of total revenues) of $9.8 million decreased 34.7% on a year-over-year basis. Our model predicted Software licenses and royalties sales to decline 37.1% to $9.4 million.
Professional Services revenues (13.2% of total revenues) amounted to $66.4 million, down 7.6% from the year-ago quarter. Our model estimate for the same was pegged at $66.1 million.
Hardware and other revenues (2.7% of total revenues) climbed 51.6% from the year-ago quarter to $13.8 million. Our model estimate for Hardware and other revenues was pegged at $10.9 million.
The backlog at the quarter-end was $1.90 billion, up 2.8% year over year.
Bookings decreased 0.5% year over year at $559 million. Moreover, in the trailing 12 months, bookings fell 4.5% year over year to $1.95 billion.
Operating Details
Tyler’s non-GAAP gross profit increased 11.2% year over year to $238.5 million. Non-GAAP gross margin expanded 160 basis points (bps) to 47.3%.
Adjusted EBITDA increased 5.4% year over year to $125.5 million.
Non-GAAP operating income for the quarter totaled $115.9 million and went up 4.8% year over year. However, the non-GAAP operating margin contracted 60 bps to 23%.
Balance Sheet & Other Details
As of Jun 30, 2023, Tyler’s cash and cash equivalents were $118.8 million compared with $130.8 million as of Mar 31, 2023.
The company used $19.2 million in cash from operational activities. Free cash flow was negative $33.2 million. With the rising interest rates, Tyler is focusing on utilizing its excess cash for debt reduction.
Guidance
For 2023, Tyler expects GAAP and non-GAAP revenues in the range of $1.940-$1.965 billion.
TYL estimates adjusted earnings guidance in the $7.60-$7.75 per share range. The company anticipates interest rate hikes, accelerated non-cash amortization of debt discounts and issuance costs associated with debt repayments.
Zacks Rank & Other Stocks to Consider
Currently, Tyler carries a Zacks Rank #1 (Strong Buy). Shares of TYL have gained 9.1% over the past year.
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Tyler's (TYL) Q2 Earnings and Revenues Beat Expectations
Tyler Technologies (TYL - Free Report) reported second-quarter 2023 non-GAAP earnings of $2.01 per share, which beat the Zacks Consensus Estimate of $1.86 and increased 6.9% from the year-ago quarter’s $1.88 per share.
Non-GAAP revenues increased 7.6% year over year to $504.3 million. The top line surpassed the Zacks Consensus Estimate of $490.7 million.
The robust year-over-year top-line growth was primarily driven by rise in subscription revenues. During the second quarter, software subscription arrangements comprised approximately 82% of the total new software contract value as the company continued to transform into a software-as-a-service model from its on-premise license-based model. On an organic basis, non-GAAP revenues increased 10.4%.
Tyler Technologies, Inc. Price, Consensus and EPS Surprise
Tyler Technologies, Inc. price-consensus-eps-surprise-chart | Tyler Technologies, Inc. Quote
Quarterly Details
Tyler’s recurring revenues from maintenance and subscriptions increased 11.2% year over year to $414.3 million and accounted for 82.2% of the total quarterly revenues.
TYL reported annualized recurring revenues on a non-GAAP basis of $1.66 billion, up 11.2% year over year.
Segment-wise, Maintenance revenues (accounting for 23.1% of total revenues) were $116.5 million, slightly down from $116.8 million in the year-ago quarter. Our model estimates for Maintenance revenues were pegged at $113.7 million.
Subscription revenues (59.1% of total revenues) grew 16.4% year over year to $297.8 million while our model estimate for the same was $289.6 million.
Software licenses and royalties (1.9% of total revenues) of $9.8 million decreased 34.7% on a year-over-year basis. Our model predicted Software licenses and royalties sales to decline 37.1% to $9.4 million.
Professional Services revenues (13.2% of total revenues) amounted to $66.4 million, down 7.6% from the year-ago quarter. Our model estimate for the same was pegged at $66.1 million.
Hardware and other revenues (2.7% of total revenues) climbed 51.6% from the year-ago quarter to $13.8 million. Our model estimate for Hardware and other revenues was pegged at $10.9 million.
The backlog at the quarter-end was $1.90 billion, up 2.8% year over year.
Bookings decreased 0.5% year over year at $559 million. Moreover, in the trailing 12 months, bookings fell 4.5% year over year to $1.95 billion.
Operating Details
Tyler’s non-GAAP gross profit increased 11.2% year over year to $238.5 million. Non-GAAP gross margin expanded 160 basis points (bps) to 47.3%.
Adjusted EBITDA increased 5.4% year over year to $125.5 million.
Non-GAAP operating income for the quarter totaled $115.9 million and went up 4.8% year over year. However, the non-GAAP operating margin contracted 60 bps to 23%.
Balance Sheet & Other Details
As of Jun 30, 2023, Tyler’s cash and cash equivalents were $118.8 million compared with $130.8 million as of Mar 31, 2023.
The company used $19.2 million in cash from operational activities. Free cash flow was negative $33.2 million. With the rising interest rates, Tyler is focusing on utilizing its excess cash for debt reduction.
Guidance
For 2023, Tyler expects GAAP and non-GAAP revenues in the range of $1.940-$1.965 billion.
TYL estimates adjusted earnings guidance in the $7.60-$7.75 per share range. The company anticipates interest rate hikes, accelerated non-cash amortization of debt discounts and issuance costs associated with debt repayments.
Zacks Rank & Other Stocks to Consider
Currently, Tyler carries a Zacks Rank #1 (Strong Buy). Shares of TYL have gained 9.1% over the past year.
Some other top-ranked stocks from the broader Computer and Technology sector are Salesforce (CRM - Free Report) , NVIDIA Corporation (NVDA - Free Report) and Meta Platforms (META - Free Report) . While Salesforce and NVIDIA sport a Zacks Rank #1, Meta carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Salesforce’s second-quarter fiscal 2024 earnings has been revised northward by a penny to $1.90 per share over the past 30 days. For fiscal 2024, earnings estimates have moved up by 2 cents to $7.44 in the past 30 days.
CRM's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.5%. Shares of the company have gained 25.1% in the past year.
The Zacks Consensus Estimate for NVIDIA’s second-quarter fiscal 2024 earnings has been revised northward from $1.04 to $2.04 per share over the past 60 days. For fiscal 2024, earnings estimates have moved up by 2 cents to $7.66 in the past 30 days.
NVDA's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 0.26%. Shares of the company have soared 155.5% in the past year.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised upward by a penny to $2.83 per share over the past seven days. For 2023, earnings estimates have moved north by 3 cents to $11.97 in the past seven days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 15.5%. Shares of the company have surged 76% in the past year.