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Tyler Technologies (TYL) Q4 Earnings Beat, Revenues Miss
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Tyler Technologies, Inc. (TYL - Free Report) reported fourth-quarter 2023 non-GAAP earnings of $1.89 per share, which beat the Zacks Consensus Estimate of $1.86. The bottom line was higher than the year-ago quarter’s earnings of $1.66 per share.
Non-GAAP revenues increased 6.3% year over year to $480.9 million. However, the top line missed the Zacks Consensus Estimate of $483.3 million.
The year-over-year top-line growth was primarily driven by a rise in subscription revenues. During the fourth quarter, software subscription arrangements comprised approximately 89% 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.
Tyler Technologies, Inc. Price, Consensus and EPS Surprise
Tyler’s recurring revenues from maintenance and subscriptions increased 7.9% year over year to $403.6 million and accounted for 83.9% of the total quarterly revenues.
TYL reported annualized recurring revenues on a non-GAAP basis of $1.61 billion, up 7.9% year over year.
Segment-wise, Maintenance revenues (accounting for 24.4% of total revenues) were $117.5 million, slightly up from $117.3 million in the year-ago quarter. Our model estimates for Maintenance revenues were pegged at $114.8 million.
Subscription revenues (59.5% of total revenues) grew 11.4% year over year to $286.1 million, while our model estimates for the same were pegged at $281.9 million. On an organic basis, Subscription revenues soared 10.8% year over year.
Software licenses and royalties (1.6% of total revenues) of $7.6 million were flat on a year-over-year basis. Our model predicted Software licenses and royalties’ sales to increase 34.6% to $10.3 million.
Professional Services revenues (12.8% of total revenues) amounted to $61.5 million, down 3.7% from the year-ago quarter. Our model estimates for the same were pegged at $68.3 million.
Hardware and other revenues (1.7% of total revenues) climbed 21.5% from the year-ago quarter to $8.2 million. Our model estimates for Hardware and other revenues were pegged at $7.1 million.
The backlog at the quarter-end was $2.03 billion, up 7.6% year over year. Bookings increased 21.3% year over year at $563 million.
Operating Details
Tyler’s non-GAAP gross profit increased 8.4% year over year to $229.1 million. The non-GAAP gross margin expanded 90 basis points (bps) to 47.6%.
Adjusted EBITDA increased 7.4% year over year to $117.9 million.
Non-GAAP operating income for the quarter totaled $107.4 million and went up 9.7% year over year. However, the non-GAAP operating margin expanded 70 bps to 22.3%.
Balance Sheet & Other Details
As of Dec 31, 2023, Tyler’s cash and cash equivalents were $165.5 million compared with $131.4 million as of Sep 30, 2023.
The company generated operating cash flow of $147.4 million in the fourth quarter and $380.4 million in in the full year 2023. It generated free cash flow of $134.4 million in the fourth quarter and $327.4 million in the full year. With its robust free cash flow, TYL is focusing on reducing debt. In the fourth quarter of 2023, Tyler reduced its term debt by $90 million.
FY24 Guidance
Tyler initiated annual guidance for 2024. The company expects revenues in the range of $2.095-$2.135 billion. TYL forecasts adjusted earnings guidance in the range of $8.90-$9.10 per share.
Zacks Rank & Stocks to Consider
Currently, Tyler carries a Zacks Rank #3 (Hold). Shares of TYL have soared 34.8% over the past year.
The Zacks Consensus Estimate for CrowdStrike’s fiscal 2024 earnings has remained unchanged at $2.94 per share in the past 60 days, suggesting year-over-year growth of 90.9%. The long-term estimated earnings growth rate for the stock stands at 36.1%. Shares of CRWD have jumped 186.9% over the past year.
The Zacks Consensus Estimate for Amazon’s 2024 earnings has been revised upward by 39 cents to $4.03 per share in the past 30 days, which calls for an increase of 39% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 28.1%. AMZN stock has returned 71.6% over the past year.
The consensus mark for NVIDIA’s fiscal 2024 earnings has been revised upward by a penny to $12.32 per share over the past 30 days, indicating a whopping 268.9% increase from fiscal 2023. It has a long-term earnings growth expectation of 13.5%. In the trailing 12 months, NVDA stock has surged 220.9%.
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Tyler Technologies (TYL) Q4 Earnings Beat, Revenues Miss
Tyler Technologies, Inc. (TYL - Free Report) reported fourth-quarter 2023 non-GAAP earnings of $1.89 per share, which beat the Zacks Consensus Estimate of $1.86. The bottom line was higher than the year-ago quarter’s earnings of $1.66 per share.
Non-GAAP revenues increased 6.3% year over year to $480.9 million. However, the top line missed the Zacks Consensus Estimate of $483.3 million.
The year-over-year top-line growth was primarily driven by a rise in subscription revenues. During the fourth quarter, software subscription arrangements comprised approximately 89% 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.
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 7.9% year over year to $403.6 million and accounted for 83.9% of the total quarterly revenues.
TYL reported annualized recurring revenues on a non-GAAP basis of $1.61 billion, up 7.9% year over year.
Segment-wise, Maintenance revenues (accounting for 24.4% of total revenues) were $117.5 million, slightly up from $117.3 million in the year-ago quarter. Our model estimates for Maintenance revenues were pegged at $114.8 million.
Subscription revenues (59.5% of total revenues) grew 11.4% year over year to $286.1 million, while our model estimates for the same were pegged at $281.9 million. On an organic basis, Subscription revenues soared 10.8% year over year.
Software licenses and royalties (1.6% of total revenues) of $7.6 million were flat on a year-over-year basis. Our model predicted Software licenses and royalties’ sales to increase 34.6% to $10.3 million.
Professional Services revenues (12.8% of total revenues) amounted to $61.5 million, down 3.7% from the year-ago quarter. Our model estimates for the same were pegged at $68.3 million.
Hardware and other revenues (1.7% of total revenues) climbed 21.5% from the year-ago quarter to $8.2 million. Our model estimates for Hardware and other revenues were pegged at $7.1 million.
The backlog at the quarter-end was $2.03 billion, up 7.6% year over year. Bookings increased 21.3% year over year at $563 million.
Operating Details
Tyler’s non-GAAP gross profit increased 8.4% year over year to $229.1 million. The non-GAAP gross margin expanded 90 basis points (bps) to 47.6%.
Adjusted EBITDA increased 7.4% year over year to $117.9 million.
Non-GAAP operating income for the quarter totaled $107.4 million and went up 9.7% year over year. However, the non-GAAP operating margin expanded 70 bps to 22.3%.
Balance Sheet & Other Details
As of Dec 31, 2023, Tyler’s cash and cash equivalents were $165.5 million compared with $131.4 million as of Sep 30, 2023.
The company generated operating cash flow of $147.4 million in the fourth quarter and $380.4 million in in the full year 2023. It generated free cash flow of $134.4 million in the fourth quarter and $327.4 million in the full year. With its robust free cash flow, TYL is focusing on reducing debt. In the fourth quarter of 2023, Tyler reduced its term debt by $90 million.
FY24 Guidance
Tyler initiated annual guidance for 2024. The company expects revenues in the range of $2.095-$2.135 billion. TYL forecasts adjusted earnings guidance in the range of $8.90-$9.10 per share.
Zacks Rank & Stocks to Consider
Currently, Tyler carries a Zacks Rank #3 (Hold). Shares of TYL have soared 34.8% over the past year.
Some better-ranked stocks from the broader technology sector are CrowdStrike Holdings (CRWD - Free Report) , Amazon.com (AMZN - Free Report) and NVIDIA Corporation (NVDA - Free Report) . CrowdStrike and Amazon each sport a Zacks Rank #1 (Strong Buy) at present, while NVIDIA carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CrowdStrike’s fiscal 2024 earnings has remained unchanged at $2.94 per share in the past 60 days, suggesting year-over-year growth of 90.9%. The long-term estimated earnings growth rate for the stock stands at 36.1%. Shares of CRWD have jumped 186.9% over the past year.
The Zacks Consensus Estimate for Amazon’s 2024 earnings has been revised upward by 39 cents to $4.03 per share in the past 30 days, which calls for an increase of 39% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 28.1%. AMZN stock has returned 71.6% over the past year.
The consensus mark for NVIDIA’s fiscal 2024 earnings has been revised upward by a penny to $12.32 per share over the past 30 days, indicating a whopping 268.9% increase from fiscal 2023. It has a long-term earnings growth expectation of 13.5%. In the trailing 12 months, NVDA stock has surged 220.9%.