Why Is Tyler Technologies (TYL) Up 20.4% Since Last Earnings Report?

It has been about a month since the last earnings report for Tyler Technologies (TYL). Shares have added about 20.4% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Tyler Technologies due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Tyler Technologies, Inc. before we dive into how investors and analysts have reacted as of late.

Tyler Technologies Q4 Earnings Miss Estimates, Revenues Rise Y/Y

Tyler Technologies reported fourth-quarter 2025 earnings of $2.64 per share, missing the Zacks Consensus Estimate of $2.71. The company had reported earnings of $2.43 per share a year ago.

The company posted revenues of $575.2 million for the quarter ended December 2025, missing the Zacks Consensus Estimate by 2.45%. This compares with year-ago revenues of $541.13 million.

Tyler Technologies’ Q4 Revenue Details

Tyler Technologies’ recurring revenues from maintenance and subscriptions increased 10.9% year over year to $514.4 million, accounting for 89.4% of total quarterly revenues of $575.2 million.

The company reported annualized recurring revenues (ARR) of $2.1 billion, up 10.9% year over year.

Segment-wise, maintenance revenues (19.0% of total revenues) were $109.4 million, down 4.9% year over year

Subscription revenues (70.4% of total revenues) grew 16.1% year over year to $405.0 million, driven by 20.2% growth in SaaS revenues to $208.3 million and 12.1% growth in transaction-based revenues to $196.7 million.

Software licenses and royalties were ($2.9) million against $6.1 million reported in the year-ago quarter.

Professional services revenues (9.6% of total revenues) were $55.3 million, down from $62.8 million in the prior-year quarter.

Hardware and other revenues (1.5% of total revenues) were $8.4 million, which remained flat year over year.

Tyler Technologies’ Operating Details

Tyler Technologies’ non-GAAP gross profit increased to $280.6 million, while the non-GAAP gross margin improved to 48.8%, rising 180 basis points.

Adjusted EBITDA rose to $149 million, up from $142.8 million in the year-ago quarter.

Non-GAAP operating income totaled $138.5 million and increased 5.1% year over year. The non-GAAP operating margin was 24.1%, down 30 basis points.

Tyler Technologies’ Balance Sheet & Other Details

As of Dec. 31, 2025, TYL’s cash and cash equivalents were $1.015 billion compared with $834.1 million in the previous quarter.

The company generated operating cash flow of $243.9 million and free cash flow of $236.9 million in the fourth quarter of 2025.

For 2025, Tyler generated operating and free cash flows of $653.5 million and $620.8 million, respectively.

Tyler’s 2026 Guidance

Tyler Technologies projects 2026 revenues between $2.50 billion and $2.55 billion.

The company expects GAAP diluted EPS in the range of $8.36-$8.61 and non-GAAP diluted EPS in the range of $12.40-$12.65.

Free cash flow margin is expected to be in the range of 26% to 28%

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a flat trend in estimates revision.

VGM Scores

Currently, Tyler Technologies has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

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 belongs to the Zacks Internet - Software and Services industry. Another stock from the same industry, VeriSign (VRSN), has gained 7.8% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

VeriSign reported revenues of $425.3 million in the last reported quarter, representing a year-over-year change of +7.6%. EPS of $2.23 for the same period compares with $2.00 a year ago.

For the current quarter, VeriSign is expected to post earnings of $2.38 per share, indicating a change of +13.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +8.7% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for VeriSign. Also, the stock has a VGM Score of C.

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Tyler Technologies, Inc. (TYL): Free Stock Analysis Report

VeriSign, Inc. (VRSN): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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