Highlights

  • Third-quarter 2026 Revenue rose 8.7% to US$647.6 million, with Recurring Revenue making up 87.8% of the total.
  • SaaS revenues increased 21.2% to US$242.2 million, while annualized recurring revenue reached US$2.28 billion.
  • Free Cash Flow hit a quarterly record of US$277.0 million, up 11.9% year on year.
  • Tyler repurchased about US$379 million of stock in the quarter and has bought back roughly 8.5% of its shares this year.

Cloud subscriptions remained the engine of growth for Tyler Technologies, Inc. (NYSE:TYL) in the third quarter of 2026. The public sector software provider reported on 28 October 2026 that SaaS revenues climbed 21.2% from a year earlier, helping lift total revenue to US$647.6 million and producing record quarterly free cash flow.

The company also kept up an aggressive pace of share repurchases and updated its full-year guidance.

Subscriptions Drive Recurring Revenue Higher

Total revenues for the quarter ended 30 September 2026 increased 8.7%. Recurring revenues grew 11.0% to US$568.8 million, accounting for 87.8% of the total. Subscription revenues rose 15.3% to US$462.6 million, including US$242.2 million of SaaS revenues.

Transaction revenues increased 9.5% to US$220.4 million, or 14.2% when the wind-down of a Texas payments contract is excluded. Annualized recurring revenue stood at US$2.28 billion, up 11.0%.

Executive Chair, President and Chief Executive Lynn Moore said strong SaaS bookings reinforce healthy public sector Demand and described the company's AI strategy as delivering tangible progress. Tyler has sold about 300 deals that include AI capabilities to date, although no dollar value for bookings was disclosed.

Earnings and Cash Generation Expand

GAAP Operating Income rose 19.5% to US$117.0 million, an 18.1% margin, while non-GAAP operating income increased 14.8% to US$182.1 million, a 28.1% margin. GAAP Net Income grew 12.7% to US$95.1 million, or US$2.33 per diluted share, up from US$1.93. Non-GAAP diluted EPS was US$3.52, compared with US$2.97, and adjusted EBITDA increased 13.4% to US$192.7 million.

Operating cash flow rose 10.7% to US$282.5 million, and free cash flow of US$277.0 million represented a 42.8% margin. Tyler ended the quarter with US$788.2 million in cash and cash equivalents plus US$116.5 million in short-term and non-current investments. In May 2026, Tyler closed an upsized offering of US$1.4375 billion of 0.50% convertible senior notes due 2031, which carried a net balance of US$1.41 billion at quarter end, and the US$600 million of notes due in 2026 were repaid during the year.

Buybacks, Acquisition and Full-Year Guidance

During the quarter, Tyler repurchased 1,148,389 shares for about US$379 million, taking year-to-date repurchases to roughly 8.5% of outstanding shares. About US$1.37 billion remained under its repurchase authorizations. On 30 July 2026, the company closed the acquisition of CODY Systems, a public safety SaaS and data company, for about US$27.7 million in cash.

For full-year 2026, Tyler now expects total revenues of US$2.535 billion to US$2.565 billion, non-GAAP diluted EPS of US$12.95 to US$13.20 and a free cash flow Margin of 26% to 28%. Management pointed to strong bookings and a growing sales pipeline heading into the final quarter of the year.