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Tyler Technologies, Inc. TYL started 2025 on a strong note with reporting better-than-expected first-quarter results. The company reported first-quarter non-GAAP earnings of $2.78 per share, which beat the Zacks Consensus Estimate by 8.6% and increased 28.9% year over year.
Tyler Technologies surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 3.8%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Tyler Technologies’ first quarter revenues increased 10.3% year over year to $565.2 million. The top line beat the Zacks Consensus Estimate of $556 million by 1.7%.
The year-over-year improvement in the top line was primarily driven by a rise in subscription revenues. During the first quarter, software subscription arrangements comprised approximately 96% 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.
Tyler Technologies, Inc. Price, Consensus and EPS Surprise
Tyler Technologies, Inc. price-consensus-eps-surprise-chart | Tyler Technologies, Inc. Quote
Quarterly Details of Tyler Technologies
Tyler Technologies’ recurring revenues from maintenance and subscriptions increased 13.3% year over year to $487.8 million and accounted for 86.3% of the total quarterly revenues. The company reported annualized recurring revenues on a non-GAAP basis of $1.95 billion, up 13.3% year over year.
Segment-wise, Maintenance revenues (accounting for 20% of total revenues) were $112.8 million, down from $117.2 million reported in the year-ago quarter. Our model estimate for Maintenance revenues was pegged at $114 million.
Subscription revenues (66.4% of total revenues) grew 19.7% year over year to $375 million, while our model estimate for the same was pinned at $361.7 million.
Software licenses and royalties (1.2% of total revenues) of approximately $7 million fell year over year by 19.9%. Our model predicted Software licenses and royalties’ sales to decrease 18.7% to $7.1 million.
Professional Services revenues (11.3% of total revenues) amounted to $64.1 million, down 2.1% from the year-ago quarter. Our model estimate for the same was pegged at $64.5 million.
Hardware and other revenues (1.1% of total revenues) were down 24.3% from the year-ago quarter to $6.3 million. Our model estimate for Hardware and other revenues was pegged at $7.7 million.
Tyler’s Operating Details
Tyler Technologies’ non-GAAP gross profit increased 18.6% year over year to $285.1 million. Moreover, the non-GAAP gross margin improved 650 basis points (bps) to 50.4%.