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Why Is Tyler Technologies (TYL) Up 1.5% Since Last Earnings Report?
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It has been about a month since the last earnings report for Tyler Technologies (TYL - Free Report) . Shares have added about 1.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Tyler Technologies due for a pullback? 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 reported second-quarter 2024 non-GAAP earnings of $2.40 per share, which beat the Zacks Consensus Estimate of $2.34. The bottom line was higher than the year-ago quarter’s earnings of $2.01.
Non-GAAP revenues increased 7.3% year over year to $541 million. Moreover, the top line beat the Zacks Consensus Estimate of $537.3 million.
The year-over-year improvement in the top line was primarily driven by a rise in subscription revenues. During the second quarter, software subscription arrangements comprised approximately 97% 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.
Quarterly Details
Tyler Technologies’ recurring revenues from maintenance and subscriptions increased 8.4% year over year to $449 million and accounted for 83% of the total quarterly revenues.
TYL reported annualized recurring revenues on a non-GAAP basis of $1.80 billion, up 8.4% year over year.
Segment-wise, Maintenance revenues (accounting for 21.3% of total revenues) were $115.3 million, down from $116.54 million reported in the year-ago quarter. Our model estimate for Maintenance revenues was pegged at $115.3 million.
Subscription revenues (61.7% of total revenues) grew 12.1% year over year to $333.7 million, while our model estimate for the same was pinned at $331.5 million. On an organic basis, Subscription revenues soared 11.8% year over year.
Software licenses and royalties (1% of total revenues) of $5.3 million fell year over year by 45.5%. Our model predicted Software licenses and royalties’ sales to decrease 4.1% to $9.4 million.
Professional Services revenues (13.3% of total revenues) amounted to $72 million, up 8.3% from the year-ago quarter. Our model estimate for the same was pegged at $67.8 million.
Hardware and other revenues (2.7% of total revenues) climbed 6.6% from the year-ago quarter to $14.7 million. Our model estimate for Hardware and other revenues was pegged at $13.6 million.
Operating Details
Tyler Technologies’ non-GAAP gross profit increased 6.8% year over year to $254.7 million. The non-GAAP gross margin declined 20 basis points (bps) to 47.1%.
Adjusted EBITDA increased 14.7% year over year to $144 million.
Non-GAAP operating income for the quarter totaled $132.6 million and jumped 14.4% year over year. However, the non-GAAP operating margin expanded 150 bps to 24.5%.
Balance Sheet & Other Details
As of Jun 30, 2024, TYL’s cash and cash equivalents were $250.7 million compared with $188.2 million as of Mar 31, 2024.
The company generated an operating cash flow of $64.3 million and free cash flow of $48.6 million in the second quarter of fiscal 2024.
Revised FY24 Guidance
Tyler Technologies revised its guidance for 2024. The company now expects revenues in the range of $2.12-$2.15 billion compared with the previous guidance of $2.11-$2.14 billion. TYL projects its adjusted earnings per share in the range of $9.25-$9.45 compared with the previous guidance of $9.10-$9.30.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
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 fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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.
Performance of an Industry Player
Tyler Technologies is part of the Zacks Business - Software Services industry. Over the past month, MSCI (MSCI - Free Report) , a stock from the same industry, has gained 4.9%. The company reported its results for the quarter ended June 2024 more than a month ago.
MSCI reported revenues of $707.95 million in the last reported quarter, representing a year-over-year change of +14%. EPS of $3.64 for the same period compares with $3.26 a year ago.
MSCI is expected to post earnings of $3.75 per share for the current quarter, representing a year-over-year change of +8.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.
MSCI has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Why Is Tyler Technologies (TYL) Up 1.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Tyler Technologies (TYL - Free Report) . Shares have added about 1.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Tyler Technologies due for a pullback? 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 & Revenues Beat Estimates
Tyler Technologies reported second-quarter 2024 non-GAAP earnings of $2.40 per share, which beat the Zacks Consensus Estimate of $2.34. The bottom line was higher than the year-ago quarter’s earnings of $2.01.
Non-GAAP revenues increased 7.3% year over year to $541 million. Moreover, the top line beat the Zacks Consensus Estimate of $537.3 million.
The year-over-year improvement in the top line was primarily driven by a rise in subscription revenues. During the second quarter, software subscription arrangements comprised approximately 97% 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.
Quarterly Details
Tyler Technologies’ recurring revenues from maintenance and subscriptions increased 8.4% year over year to $449 million and accounted for 83% of the total quarterly revenues.
TYL reported annualized recurring revenues on a non-GAAP basis of $1.80 billion, up 8.4% year over year.
Segment-wise, Maintenance revenues (accounting for 21.3% of total revenues) were $115.3 million, down from $116.54 million reported in the year-ago quarter. Our model estimate for Maintenance revenues was pegged at $115.3 million.
Subscription revenues (61.7% of total revenues) grew 12.1% year over year to $333.7 million, while our model estimate for the same was pinned at $331.5 million. On an organic basis, Subscription revenues soared 11.8% year over year.
Software licenses and royalties (1% of total revenues) of $5.3 million fell year over year by 45.5%. Our model predicted Software licenses and royalties’ sales to decrease 4.1% to $9.4 million.
Professional Services revenues (13.3% of total revenues) amounted to $72 million, up 8.3% from the year-ago quarter. Our model estimate for the same was pegged at $67.8 million.
Hardware and other revenues (2.7% of total revenues) climbed 6.6% from the year-ago quarter to $14.7 million. Our model estimate for Hardware and other revenues was pegged at $13.6 million.
Operating Details
Tyler Technologies’ non-GAAP gross profit increased 6.8% year over year to $254.7 million. The non-GAAP gross margin declined 20 basis points (bps) to 47.1%.
Adjusted EBITDA increased 14.7% year over year to $144 million.
Non-GAAP operating income for the quarter totaled $132.6 million and jumped 14.4% year over year. However, the non-GAAP operating margin expanded 150 bps to 24.5%.
Balance Sheet & Other Details
As of Jun 30, 2024, TYL’s cash and cash equivalents were $250.7 million compared with $188.2 million as of Mar 31, 2024.
The company generated an operating cash flow of $64.3 million and free cash flow of $48.6 million in the second quarter of fiscal 2024.
Revised FY24 Guidance
Tyler Technologies revised its guidance for 2024. The company now expects revenues in the range of $2.12-$2.15 billion compared with the previous guidance of $2.11-$2.14 billion. TYL projects its adjusted earnings per share in the range of $9.25-$9.45 compared with the previous guidance of $9.10-$9.30.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
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 fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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.
Performance of an Industry Player
Tyler Technologies is part of the Zacks Business - Software Services industry. Over the past month, MSCI (MSCI - Free Report) , a stock from the same industry, has gained 4.9%. The company reported its results for the quarter ended June 2024 more than a month ago.
MSCI reported revenues of $707.95 million in the last reported quarter, representing a year-over-year change of +14%. EPS of $3.64 for the same period compares with $3.26 a year ago.
MSCI is expected to post earnings of $3.75 per share for the current quarter, representing a year-over-year change of +8.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.
MSCI has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.