SaaS revenues grew 21.7% for the fourth
quarter
Tyler Technologies, Inc. (NYSE: TYL) today announced financial
results for the fourth quarter ended December 31, 2023.
Fourth Quarter 2023 Financial Highlights (all comparisons
are to the fourth quarter of 2022):
Revenues
Total revenues were $480.9 million, up 6.3%. On an organic
basis, revenues grew 6.1%.
Recurring Revenues
Recurring revenues were $403.6 million, up 7.9%, and comprised
83.9% of fourth quarter 2023 revenues, up from 82.7%. On an organic
basis, recurring revenues were $400.4 million, up 7.1%.
- Subscription revenues were $286.1 million, up 11.4%. On an
organic basis, subscription revenues grew 10.8%. Within
subscriptions:
- SaaS revenues grew 21.7% to $141.0 million. On an organic
basis, SaaS revenues grew 21.2%.
- Transaction-based revenues grew 3.0% to $145.1 million. On an
organic basis, transaction-based revenues grew 2.1%.
- SaaS arrangements comprised approximately 89% of the total new
software contract value, compared to approximately 86%.
- Annualized recurring revenue (ARR) was $1.61 billion, up
7.9%.
Earnings/EBITDA
- GAAP operating income was $47.7 million, up 17.3%. Non-GAAP
operating income was $107.4 million, up 9.7%.
- GAAP net income was $38.9 million, or $0.91 per diluted share,
up 25.2%. Non-GAAP net income was $81.4 million, or $1.89 per
diluted share, up 15.6%.
- Adjusted EBITDA was $117.9 million, up 7.4%.
Cash Flow
- Cash flows from operations were $147.4 million, up 21.0%.
- Free cash flow was $134.4 million, up 17.1%.
- During the fourth quarter, cash tax payments included
approximately $15 million related to IRC Section 174 capitalization
rules.
Acquisitions
During the fourth quarter, we completed the acquisitions of
ResourceX and ARInspect for a combined purchase price of
approximately $37 million in cash and stock.
Full Year 2023 Financial Highlights (all comparisons are
to the full year of 2022):
Revenues
Total revenues were $1.952 billion, up 5.5%. On an organic basis
(excluding COVID-related revenues in 2022), revenues grew 7.4%.
Recurring Revenues
Recurring revenues were $1.63 billion, up 9.8%, and comprised
83.3% of 2023 revenues, up from 80.0%. On an organic basis,
recurring revenues were $1.61 billion, up 9.5%.
- Subscription revenues were $1.16 billion, up 14.5%. On an
organic basis, subscription revenues grew 14.4%. Within
subscriptions:
- SaaS revenues grew 23.2% to $528.0 million. On an organic
basis, SaaS revenues grew 23.1%.
- Transaction-based revenues grew 8.2% to $631.5 million. On an
organic basis, transaction-based revenues grew 7.9%.
- SaaS arrangements comprised approximately 85% of the total new
software contract value, compared to approximately 83%.
Earnings/EBITDA
- GAAP operating income was $218.5 million, up 2.0%. Non-GAAP
operating income was $448.1 million, up 2.5%.
- GAAP net income was $165.9 million, or $3.88 per diluted share,
up 1.0%. Non-GAAP net income was $333.7 million, or $7.80 per
diluted share, up 4.9%.
- Adjusted EBITDA was $488.4 million, up 2.8%.
Cash Flow
- Cash flows from operations were $380.4 million, down 0.3%.
- Free cash flow was $327.4 million, down 1.2%.
- Cash tax payments in 2023 included approximately $127 million
related to IRC Section 174 capitalization rules.
“Our fourth quarter results reflected a strong finish to a
pivotal year in our cloud transition and a return to year-over-year
operating margin expansion,” said Lynn Moore, Tyler’s president and
chief executive officer. “We achieved our key objectives for the
year and both earnings and cash flow surpassed our expectations.
Recurring revenue growth for the quarter was solid, highlighted by
SaaS revenue growth of 21.7%, marking our 12th consecutive quarter
of SaaS revenue growth of 20% or more. Free cash flow reached a new
high for a fourth quarter and our SaaS mix expanded to 89% of new
software contract value.
“We're pleased with the strength of new contract signings during
the fourth quarter, including a landmark win with the California
Department of Parks and Recreation for our integrated Outdoor
Recreation platform, including payments. This transaction-based,
self-funded eight-year contract is the largest transaction-based
arrangement in Tyler's history. We're also excited to have signed
our expanded strategic collaboration agreement with Amazon Web
Services to further enable the growing adoption of Tyler's
cloud-based mission-critical solutions and to support our public
sector clients' digital modernization needs.
“During 2023, we excelled on many fronts executing our
four-pronged growth strategy to drive predictable, higher recurring
revenues and long-term margin expansion. We leveraged our unmatched
installed base, broad suite of offerings, and strong relationships
across local, state, and federal agencies to expand our cross-sell
and upsell opportunities. We continued to take a balanced and
opportunistic approach with respect to capital allocation and
closed four strategic acquisitions, adding AI technology that can
be leveraged across Tyler's product portfolio. We further
strengthened our balance sheet and aggressively reduced our term
debt with fourth quarter repayments of $90 million. For the full
year, we reduced debt by $345 million, bringing our net leverage at
year-end to under one times proforma EBITDA.
“We enter 2024 with tremendous optimism and confidence in the
year ahead and beyond as we execute our strategy supporting our
Tyler 2030 vision. The public sector market remains very healthy,
as evidenced by our elevated levels of RFP and sales demonstration
activity. We are on track with key initiatives around our cloud
transition, including the migration of on-premises clients to the
cloud and the planned exit from our proprietary data centers, and
we expect to return to a trajectory of operating margin expansion
in 2024,” concluded Moore.
Annual Guidance for 2024
As of February 14, 2024, Tyler Technologies is providing the
following guidance for the full year 2024:
- Total revenues are expected to be in the range of $2.095
billion to $2.135 billion.
- GAAP diluted earnings per share are expected to be in the range
of $5.17 to $5.37.
- Non-GAAP diluted earnings per share are expected to be in the
range of $8.90 to $9.10.
- Free cash flow margin is expected to be in the range of 17% to
19%.
- Research and development expense is expected to be in the range
of $125 million to $130 million.
- Capital expenditures are expected to be in the range of $46
million to $48 million, including approximately $27 million of
software development costs.
GAAP to non-GAAP guidance
reconciliation
2024
GAAP diluted earnings per share (1)
$5.17 - $5.37
Plus:
Share-based compensation expense
2.92
Amortization of acquired software and
other intangibles
2.21
Less:
Income tax impact (1)
(1.40)
Non-GAAP diluted earnings per share
$8.90 - $9.10
Shares used in computing diluted earnings
per share (millions)
43.5
GAAP estimated annual effective tax rate
used in computing GAAP diluted earnings per share (1)
18%
Non-GAAP estimated annual effective tax
rate used in computing non-GAAP diluted earnings per share
22%
(1) GAAP diluted earnings per share may
fluctuate due to the impact on our annual effective tax rate of
discrete tax items, such as stock incentive awards, future
acquisitions, changes in tax legislation, and other
transactions.
Conference Call
Tyler Technologies will hold a conference call on Thursday,
February 15, 2024, at 10:00 a.m. ET to discuss the company’s
results. Participants can register in advance for the conference
through the following link:
https://conferencingportals.com/event/eqivMdEU. Registered
participants will receive an email with a calendar reminder,
dial-in number and conference ID that allows them immediate access
to the call.
The live audio webcast and archived replay can also be accessed
at
https://investors.tylertech.com/events-and-presentations/default.aspx.
About Tyler Technologies, Inc.
Tyler Technologies (NYSE: TYL) provides integrated software and
technology services to the public sector. Tyler’s end-to-end
solutions empower local, state, and federal government entities to
operate more efficiently and transparently with residents and each
other. By connecting data and processes across disparate systems,
Tyler’s solutions transform how clients turn actionable insights
into opportunities and solutions for their communities. Tyler has
more than 40,000 successful installations across nearly 13,000
locations, with clients in all 50 states, Canada, the Caribbean,
Australia, and other international locations. Tyler has been
recognized numerous times for growth and innovation, including
Government Technology’s GovTech 100 list. More information about
Tyler Technologies, an S&P 500 company headquartered in Plano,
Texas, can be found at tylertech.com.
Non-GAAP Financial Measures
Tyler Technologies has provided in this press release financial
measures that have not been prepared in accordance with generally
accepted accounting principles (GAAP) and are therefore considered
non-GAAP financial measures. This information includes non-GAAP
gross profit, non-GAAP gross margin, non-GAAP operating income,
non-GAAP operating margin, non-GAAP net income, non-GAAP earnings
per diluted share, EBITDA, adjusted EBITDA, free cash flow, and
free cash flow margin. We use these non-GAAP financial measures
internally in analyzing our financial results and believe they are
useful to investors, as a supplement to GAAP measures, in
evaluating Tyler’s ongoing operational performance because they
provide additional insight in comparing results from period to
period. Tyler believes the use of these non-GAAP financial measures
provides an additional tool for investors to use in evaluating
ongoing operating results and trends and in comparing our financial
results with other companies in our industry, many of which present
similar non-GAAP financial measures. Non-GAAP financial measures
discussed above exclude share-based compensation expense, employer
portion of payroll taxes on employee stock transactions, expenses
associated with amortization of intangibles arising from business
combinations, acquisition-related expenses, and lease restructuring
costs and other. Annualized recurring revenue (ARR) is calculated
by annualizing the current quarter's recurring revenues from
subscriptions and maintenance.
Tyler currently uses a non-GAAP tax rate of 22.0%. This rate is
based on Tyler's estimated annual GAAP income tax rate forecast,
adjusted to account for items excluded from GAAP income in
calculating Tyler's non-GAAP income, as well as significant
non-recurring tax adjustments. The non-GAAP tax rate used in future
periods will be reviewed periodically to determine whether it
remains appropriate in consideration of factors including Tyler's
periodic annual effective tax rate calculated in accordance with
GAAP, changes resulting from tax legislation, changes in the
geographic mix of revenues and expenses, and other factors deemed
significant. Due to differences in tax treatment of items excluded
from non-GAAP earnings, as well as the methodology applied to
Tyler's estimated annual tax rate as described above, the estimated
tax rate on non-GAAP income may differ from the GAAP tax rate and
from Tyler's actual tax liabilities.
Non-GAAP financial measures should be considered in addition to,
and not as a substitute for, or superior to, financial information
prepared in accordance with GAAP. The non-GAAP measures used by
Tyler Technologies may be different from non-GAAP measures used by
other companies. Investors are encouraged to review the
reconciliation of these non-GAAP measures to their most directly
comparable GAAP financial measures, which has been provided in the
financial statement tables included below in this press
release.
Forward-looking Statements
This document contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934 that are not historical
in nature and typically address future or anticipated events,
trends, expectations or beliefs with respect to our financial
condition, results of operations or business. Forward-looking
statements often contain words such as “believes,” “expects,”
“anticipates,” “foresees,” “forecasts,” “estimates,” “plans,”
“intends,” “continues,” “may,” “will,” “should,” “projects,”
“might,” “could” or other similar words or phrases. Similarly,
statements that describe our business strategy, outlook,
objectives, plans, intentions or goals also are forward-looking
statements. We believe there is a reasonable basis for our
forward-looking statements, but they are inherently subject to
risks and uncertainties and actual results could differ materially
from the expectations and beliefs reflected in the forward-looking
statements. We presently consider the following to be among the
important factors that could cause actual results to differ
materially from our expectations and beliefs: (1) changes in the
budgets or regulatory environments of our clients, primarily local
and state governments, that could negatively impact information
technology spending; (2) disruption to our business and harm to our
competitive position resulting from cyber-attacks and security
vulnerabilities; (3) our ability to protect client information from
security breaches and provide uninterrupted operations of data
centers; (4) our ability to achieve growth or operational synergies
through the integration of acquired businesses, while avoiding
unanticipated costs and disruptions to existing operations; (5)
material portions of our business require the Internet
infrastructure to be adequately maintained; (6) our ability to
achieve our financial forecasts due to various factors, including
project delays by our clients, reductions in transaction size,
fewer transactions, delays in delivery of new products or releases
or a decline in our renewal rates for service agreements; (7)
general economic, political and market conditions, including
continued inflation and rising interest rates; (8) technological
and market risks associated with the development of new products or
services or of new versions of existing or acquired products or
services; (9) competition in the industry in which we conduct
business and the impact of competition on pricing, client retention
and pressure for new products or services; (10) the ability to
attract and retain qualified personnel and dealing with the loss or
retirement of key members of management or other key personnel; and
(11) costs of compliance and any failure to comply with government
and stock exchange regulations. These factors and other risks that
affect our business are described in our filings with the
Securities and Exchange Commission, including the detailed “Risk
Factors” contained in our most recent annual report on Form 10-K
and quarterly report on Form 10-Q. We expressly disclaim any
obligation to publicly update or revise our forward-looking
statements.
(Comparative results follow)
#TYL_Financial
TYLER TECHNOLOGIES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(Amounts in thousands, except
per share data)
(Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Revenues:
Subscriptions
$
286,068
$
256,699
$
1,159,512
$
1,012,304
Maintenance
117,508
117,273
466,661
468,455
Professional services
61,501
63,855
249,976
277,625
Software licenses and royalties
7,633
7,622
38,096
59,406
Hardware and other
8,225
6,771
37,506
32,414
Total revenues
480,935
452,220
1,951,751
1,850,204
Cost of revenues:
Subscriptions, maintenance and
professional services
245,236
239,173
1,001,221
977,885
Software licenses and royalties
2,956
1,436
10,821
6,083
Amortization of software development
4,058
2,514
12,625
6,507
Amortization of acquired software
9,183
11,310
36,062
52,192
Hardware and other
6,577
4,453
29,923
23,674
Total cost of revenues
268,010
258,886
1,090,652
1,066,341
Gross profit
212,925
193,334
861,099
783,863
Sales and marketing expense
39,666
34,969
149,770
135,743
General and administrative expense
80,015
66,883
308,575
267,324
Research and development expense
26,163
32,667
109,585
105,184
Amortization of other intangibles
19,333
18,104
74,632
61,363
Operating income
47,748
40,711
218,537
214,249
Interest expense
(3,750
)
(8,103
)
(23,629
)
(28,379
)
Other income, net
652
1,012
3,328
1,723
Income before income taxes
44,650
33,620
198,236
187,593
Income tax provision
5,747
2,543
32,317
23,353
Net income
$
38,903
$
31,077
$
165,919
$
164,240
Earnings per common share:
Basic
$
0.92
$
0.75
$
3.95
$
3.95
Diluted
$
0.91
$
0.73
$
3.88
$
3.87
Weighted average common shares
outstanding:
Basic
42,191
41,707
42,024
41,544
Diluted
42,972
42,419
42,769
42,399
TYLER TECHNOLOGIES,
INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(Amounts in thousands, except
per share data)
(Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
Reconciliation of non-GAAP gross profit
and margin
2023
2022
2023
2022
GAAP gross profit
$
212,925
$
193,334
$
861,099
$
783,863
Non-GAAP adjustments:
Add: Share-based compensation expense
included in cost of revenues
6,981
6,667
26,607
27,486
Add: Amortization of acquired software
9,183
11,310
36,062
52,192
Non-GAAP gross profit
$
229,089
$
211,311
$
923,768
$
863,541
GAAP gross margin
44.3
%
42.8
%
44.1
%
42.4
%
Non-GAAP gross margin
47.6
%
46.7
%
47.3
%
46.7
%
Three Months Ended December
31,
Twelve Months Ended December
31,
Reconciliation of non-GAAP operating
income and margin
2023
2022
2023
2022
GAAP operating income
$
47,748
$
40,711
$
218,537
$
214,249
Non-GAAP adjustments:
Add: Share-based compensation expense
27,433
24,994
108,338
102,985
Add: Employer portion of payroll tax
related to employee stock transactions
682
378
1,873
1,571
Add: Acquisition-related costs
154
757
409
1,971
Add: Lease restructuring costs and
other
2,863
1,623
8,220
2,782
Add: Amortization of acquired software
9,183
11,310
36,062
52,192
Add: Amortization of other intangibles
19,333
18,104
74,632
61,363
Non-GAAP adjustments subtotal
$
59,648
$
57,166
$
229,534
$
222,864
Non-GAAP operating income
$
107,396
$
97,877
$
448,071
$
437,113
GAAP operating margin
9.9
%
9.0
%
11.2
%
11.6
%
Non-GAAP operating margin
22.3
%
21.6
%
23.0
%
23.6
%
Three Months Ended December
31,
Twelve Months Ended December
31,
Reconciliation of non-GAAP net income and
earnings per share
2023
2022
2023
2022
GAAP net income
$
38,903
$
31,077
$
165,919
$
164,240
Non-GAAP adjustments:
Add: Total non-GAAP adjustments to
operating income
59,648
57,166
229,534
222,864
Less: Income tax impact
(17,198
)
(17,884
)
(61,792
)
(68,999
)
Non-GAAP net income
$
81,353
$
70,359
$
333,661
$
318,105
GAAP earnings per diluted share
$
0.91
$
0.73
$
3.88
$
3.87
Non-GAAP earnings per diluted share
$
1.89
$
1.66
$
7.80
$
7.50
TYLER TECHNOLOGIES,
INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(Amounts in thousands, except
per share data)
(Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
Detail of share-based compensation
expense
2023
2022
2023
2022
Subscriptions, maintenance and
professional services
$
6,981
$
6,667
$
26,607
$
27,486
Sales and marketing expense
2,730
2,229
10,118
8,800
General and administrative expense
17,722
16,098
71,613
66,699
Total share-based compensation expense
$
27,433
$
24,994
$
108,338
$
102,985
Three Months Ended December
31,
Twelve Months Ended December
31,
Reconciliation of EBITDA and adjusted
EBITDA
2023
2022
2023
2022
GAAP net income
$
38,903
$
31,077
$
165,919
$
164,240
Amortization of other intangibles
19,333
18,104
74,632
61,363
Depreciation and amortization included in
cost of revenues, sales and marketing expense, general and
administrative expense, and research and development expense
19,755
22,627
74,954
89,890
Interest expense
3,750
8,103
23,629
28,379
Income tax provision
5,747
2,543
32,317
23,353
EBITDA
$
87,488
$
82,454
$
371,451
$
367,225
Share-based compensation expense
27,433
24,994
108,338
102,985
Acquisition-related costs
154
757
409
1,971
Lease restructuring costs and other
2,863
1,623
8,220
2,782
Adjusted EBITDA
$
117,938
$
109,828
$
488,418
$
474,963
Three Months Ended December
31,
Twelve Months Ended December
31,
Reconciliation of free cash flow
2023
2022
2023
2022
Net cash provided by operating
activities
$
147,419
$
121,857
$
380,440
$
381,455
Less: additions to property and
equipment
(8,013
)
(5,088
)
(20,519
)
(22,529
)
Less: investments in software
development
(5,043
)
(2,065
)
(32,490
)
(27,622
)
Free cash flow
$
134,363
$
114,704
$
327,431
$
331,304
Free cash flow margin
27.9
%
25.4
%
16.8
%
17.9
%
TYLER TECHNOLOGIES,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Amounts in thousands)
(Unaudited)
December 31, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
165,493
$
173,857
Accounts receivable, net
619,704
577,257
Short-term investments
10,385
37,030
Prepaid expenses and other current
assets
65,003
59,098
Total current assets
860,585
847,242
Accounts receivable, long-term portion
8,988
8,271
Operating lease right-of-use assets
39,039
50,989
Property and equipment, net
169,720
172,786
Other assets:
Software development costs, net
67,124
48,189
Goodwill
2,532,109
2,489,308
Other intangibles, net
928,870
1,002,164
Non-current investments
7,046
18,508
Other non-current assets
63,182
49,960
Total assets
$
4,676,663
$
4,687,417
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
304,897
$
236,754
Operating lease liabilities
11,060
10,736
Current income tax payable
2,466
43,667
Deferred revenue
632,914
568,538
Current portion of term loans
49,801
30,000
Total current liabilities
1,001,138
889,695
Term loans
—
362,905
Convertible senior notes due 2026, net
596,206
594,484
Deferred revenue, long-term
291
2,037
Deferred income taxes
78,590
148,891
Operating lease liabilities, long-term
39,822
48,049
Other long-term liabilities
22,621
16,967
Total liabilities
1,738,668
2,063,028
Shareholders' equity
2,937,995
2,624,389
Total liabilities and shareholders'
equity
$
4,676,663
$
4,687,417
TYLER TECHNOLOGIES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Cash flows from operating activities:
Net income
$
38,903
$
31,077
$
165,919
$
164,240
Adjustments to reconcile net income to
cash
provided by operations:
Depreciation and amortization
39,881
42,122
154,079
159,072
Losses from sale of investments
—
1
1
45
Share-based compensation expense
27,433
24,994
108,338
102,985
Provision for losses and sales adjustments
- accounts receivable
8,233
2,781
8,233
2,781
Operating lease right-of-use assets
expense
4,430
3,729
16,688
12,969
Deferred income tax benefit
(29,704
)
(54,347
)
(73,704
)
(87,192
)
Other
77
—
475
—
Changes in operating assets and
liabilities,
exclusive of effects of acquired
companies
58,166
71,500
411
26,555
Net cash provided by operating
activities
147,419
121,857
380,440
381,455
Cash flows from investing activities:
Additions to property and equipment
(8,013
)
(5,088
)
(20,519
)
(22,529
)
Purchase of marketable security
investments
—
(9,507
)
(10,617
)
(29,935
)
Proceeds and maturities from marketable
security investments
3,960
15,982
49,412
71,034
Investment in software development
(5,043
)
(2,065
)
(32,490
)
(27,622
)
Cost of acquisitions, net of cash
acquired
(27,219
)
(46,215
)
(62,759
)
(163,921
)
Other
(35
)
117
13
443
Net cash used by investing activities
(36,350
)
(46,776
)
(76,960
)
(172,530
)
Cash flows from financing activities:
Payment on term loans
(90,000
)
(90,000
)
(345,000
)
(360,000
)
Proceeds from exercise of stock options,
net of withheld shares for taxes upon equity award
8,522
(1,188
)
16,960
(890
)
Contributions from employee stock purchase
plan
4,416
4,037
16,196
16,651
Net cash used by financing activities
(77,062
)
(87,151
)
(311,844
)
(344,239
)
Net increase (decrease)in cash and cash
equivalents
34,007
(12,070
)
(8,364
)
(135,314
)
Cash and cash equivalents at beginning of
period
131,486
185,927
173,857
309,171
Cash and cash equivalents at end of
period
$
165,493
$
173,857
$
165,493
$
173,857
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240214453647/en/
Hala Elsherbini Senior Director, Investor Relations Tyler
Technologies, Inc. 972-713-3770 ext. 1143
hala.elsherbini@tylertech.com
Tyler Technologies (NYSE:TYL)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Tyler Technologies (NYSE:TYL)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024