Tyler Technologies, Inc. · NYSE:TYL
Tyler Technologies — Q4 2023 Earnings Presentation
24 slides from Tyler Technologies's earnings presentation, Feb 15, 2024
Slide 1: 2023 Fourth Quarter and Annual Earnings Review
2023 Fourth Quarter and Annual Earnings Review 2024 Annual Guidance Tyler Technologies | February 15, 2024
Slide 2: Statement Regarding Use of Non-GAAP Measures
Statement Regarding Use of Non-GAAP Measures Tyler Technologies has provided in this presentation 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-
Slide 3: Forward-Looking Statements
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, expectat
Slide 4: The Leader in Software Solutions to the Public Sector
A T A G L A N C E The Leader in Software Solutions to the Public Sector 1 MARKET 83% RECURRING 16.8% FREE CASH FLO W 98% G RO SS CLIENT PO SIT IO N REVENUES 2023 MARG IN RET ENT IO N R E V E N U E B R E A K D O W N * ERP / COURTS & PUBLIC PLATFORM APPRAISAL & CIVIC K-12 OTHER FINANCIAL JUSTICE SAFET
Slide 5: Q4 2023 Summary
Q4 2023 Summary © Tyler Technologies 2024
Slide 6: Strong Finish to a Pivotal Year in Our Cloud Transition
Strong Finish to a Pivotal Year in Our Cloud Transition Q4 2023 Highlights Earnings and cash flow surpass expectations with ARR growth of 7.9% Total revenues of $480.9 million, up 6.3%, with organic growth of 6.1% SaaS revenue growth of 21.7%, representing 12th consecutive quarter of SaaS revenue
Slide 7: Strong Recurring Revenue Growth
Strong Recurring Revenue Growth Total Revenues Recurring Revenues $480.9M $403.6M % of Total Revenues YoY Growth Recurring revenues up 7.9% with organic growth of 7.1% $141.0M Subscriptions rose 11.4% with organic growth of 10.8% +21.7% SaaS Revenues • SaaS revenues grew 21.7% (21.2% organic), Recur
Slide 8: Q4 2023 Strong Performance Across Key Metrics
Q4 2023 Strong Performance Across Key Metrics Total Revenues Recurring Revenues Diluted EPS1 Adjusted EBITDA $480.9M $403.6M GAAP $0.91 $117.9M +6.3% +7.9% +24.7% +7.4% +6.1% organic +7.1% organic Non-GAAP $1.89 +13.9% Cash from Operations* Free Cash Flow* Gross Margin1 Operating Margin1 $147.4M $13
Slide 9: Q4 2023 New Software Business Mix
Q4 2023 New Software Business Mix # of New Software Deals New Software Contract Value $130 $116.2M 200 187 179 $104 $91.3M 150 $78 89% 140 87% $103.0M 156 86% 100 75% $52 $78.2M 50 $26 47 25% 23 13% $13.1M 14% $13.2M 11% 0 $- 4Q22 4Q23 4Q22 4Q23 License Subscription License Subscription 9
Slide 10: Q4 2023 Contract Highlights
NOTAB LE W I NS • Landmark win with the California Department of Parks and Recreation for our integrated Outdoor Recreation platform - self-funded transaction-based contract including payments • Includes two 1-year renewal options • Largest transaction-based arrangement in Tyler’s history – estimate
Slide 11: 2023 Annual Summary
2023 Annual Summary © Tyler Technologies 2024
Slide 12: Strong Recurring Revenue Growth
Strong Recurring Revenue Growth Total Revenues Recurring Revenues $1.952B $1.626B % of Total Revenue YoY Growth Recurring revenues up 9.8% with organic growth of 9.5% $528.0M SaaS Revenues +23.2% Subscriptions rose 14.5% with organic growth of 14.4% • SaaS revenues grew 23.1% on an organic basis, Re
Slide 13: 2023 Strong Performance Across Key Metrics
2023 Strong Performance Across Key Metrics Total Revenues Recurring Revenues Diluted EPS1 Adjusted EBITDA $1.952M $1.626M GAAP $3.88 $488.4M +0.26% +5.5% +9.8% +2.8% +7.4% organic +9.5% organic Non-GAAP $7.80 +4.0% Cash from Operations* Free Cash Flow* Gross Margin1 Operating Margin1 $380.4M $327.4M
Slide 14: 2023 New Software Business Mix
2023 New Software Business Mix # of New Software Deals New Software Contract Value 2022 SaaS comp included $450 $436.0M • $54M Dept. of State • $20M NJ Titling 900 $400 789 $345.3M 800 765 $350 700 $300 600 $362.4M 85% 83% $250 609 500 632 $200 83% $293.7M 400 77% $150 300 $100 200 $50 100 180 23% 1
Slide 15: Executed Key Initiatives in Our Cloud Transition
Executed Key Initiatives in Our Cloud Transition Nearing completion of development efforts to optimize products for efficient cloud deployment 83% 85% On track for planned exit of proprietary data centers in 71% 2024 and 2025 63% 62% Executed expanded eight-year strategic collaboration agreeme
Slide 16: Strong Cash Flow Generation
Strong Cash Flow Generation Cash From Operations Free Cash Flow $400M $372M $381M $380M $355M $350M $300M $331M $327M $255M $327M $250M $316M $200M $213M $150M $100M $50M $0M 2019 2020 2021 2022 2023 Note: 2023 cash flow impacted by incremental cash taxes of approx. $127 million related to IRC Secti
Slide 17: Strengthened Balance Sheet through Aggressive Deleverage
Strengthened Balance Sheet through Aggressive Deleverage Under One Times Proforma EBTIDA at 12/31/23 Repaid $1.1B of term debt since NIC $1,600M $1.335B acquisition in April 2021 Net Leverage $1.275B $1,400M 2.19x Net Leverage 2.07x $1.085B Net Leverage $995M $1,200M 1.79x Net Leverage $875M $875M $
Slide 18: 2024 Annual Guidance
2024 Annual Guidance © Tyler Technologies 2024
Slide 19: 2024 Annual Guidance
2024 Annual Guidance ACCELERATING SAAS SHIFT AND CLOUD TRANSITION PROGRESS R E V E N U E D R I V E R S Total Revenues Guidance midpoint implies organic growth of approx. 8% Revenue range percentage growth expectations: $2.095 - $2.135B • Subscriptions growth in the mid-teens $1.952B • SaaS growth in
Slide 20: 2024 Annual Guidance
2024 Annual Guidance Diluted EPS - GAAP1 Diluted EPS - Non-GAAP1 $3.88 $5.17 - $5.37 $8.90 - $9.10 $7.80 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
Slide 21: Appendix
Appendix
Slide 22: Non-GAAP Measures
Non-GAAP Measures THE TABLE RECONCILES THE NON-GAAP MEASURES USED IN THIS PRESENTATION GAAP 22
Slide 23: Non-GAAP Measures
Non-GAAP Measures THE TABLE RECONCILES THE NON-GAAP MEASURES USED IN THIS PRESENTATION GAAP 23
Slide 24: tylertech.com
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