Tyler Technologies (TYL) Q1 2026 earnings summary

Executive summary

• Total revenues for Q1 2026 reached $613.5 million, up 8.6%–9% year-over-year, with SaaS revenues up 23.5% and recurring revenues up 10.4%.

• Free cash flow more than doubled year-over-year to $102.8 million, with margin expanding to 16.8%.

• Annualized recurring revenue (ARR) grew to $2.15 billion, reflecting strong SaaS and transaction-based momentum.

• Completed the $223 million acquisition of For The Record (FTR), the third-largest in company history, enhancing the justice portfolio with AI-powered transcription technology.

• Significant share repurchases executed, totaling 2.5% of shares outstanding, with $650 million remaining under authorization.

Financial highlights

• Recurring revenues accounted for 87.8% of total Q1 revenues, with subscription revenues up 14.6% and transaction revenues up 6.4%.

• Adjusted EBITDA for Q1 2026 was $177.3 million, up from $162.3 million in Q1 2025.

• Non-GAAP operating margin improved to 27.2%, and gross margin rose to 51.3% non-GAAP.

• Free cash flow margin for the quarter was 16.8%, up from 8.5% a year ago.

• Transaction-based business volumes exceeded expectations, contributing to the revenue guide raise.

Outlook and guidance

• 2026 revenue guidance midpoint implies 9.5% growth, with SaaS revenue expected to grow 21.5–23.5%.

• Non-GAAP diluted EPS guidance for 2026 is $12.50–$12.75.

• Free cash flow margin expected between 26% and 28%.

• R&D expense projected at $245 million to $250 million; capital expenditures at $18 million to $20 million.

• Confident in achieving 2030 targets, including over $1 billion in free cash flow and recurring revenue exceeding 90%.