Tyler Technologies, Inc. · NYSE:TYL
Tyler Technologies — Investor Presentation (August 2022)
39 slides from Tyler Technologies's investor presentation, August 2022
Slide 1: Investor Presentation
Investor Presentation August 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements Tyler has included in this presentation “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,
Slide 3: Tyler: A Winning Long-Term Growth Story
Tyler: A Winning Long-Term Growth Story Consistent Long-term Faster EPS Growth Massive Opportunity Revenue Growth – Market Leader With Just 16% 21% ~6% CAGR CAGR share since 2010 since 2010 of fragmented $30B market 3 |
Slide 4: Tyler: A Winning Long-Term Growth Story
AGENDA Tyler: A Winning Long-Term Growth Story 1 2 3 4 5 Impressive Clear leader Powerful and Shift to cloud Delivering track record in attractive predictable cash accelerating long-term sustainable markets generation engine growth growth 4 |
Slide 5: The Leader in Providing Software Solutions to the Public Sector
AT A G L A N C E The Leader in Providing Software Solutions to the Public Sector Number 1 79% Market Recurring position revenues 2021 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 Safety Technologies Tax Services Schools 2% 34% 14% 7% 3
Slide 6: Tyler is Entering a New Growth Era
Tyler is Entering a New Growth Era 1998 - 2014 2015 - 2021 2022+ Built Leadership Accelerating Transition to Next Generation SaaS Position Subscription Business • Built a broad portfolio of • Shift to cloud-first, • Realizing Connected software solutions 19 acquisitions Communities vision for exclus
Slide 7: Tyler Transformation is Well Underway – With Higher Growth, Higher Long-Term Margin Profile
Tyler Transformation is Well Underway – With Higher Growth, Higher Long-Term Margin Profile 2021 Non-Recurring Revenues 21% 22% CAGR in Recurring Revenue 2010 $1.6B $1.2B – Last 5 years Non-Recurring Revenues 79% 45% $289M 55% Recurring Revenues Recurring Revenues 18.2% 25.4% Non-GAAP Operating Marg
Slide 8: Tyler: A Winning Long-Term Growth Story
AGENDA Tyler: A Winning Long-Term Growth Story 1 2 3 4 5 Impressive Clear leader Powerful and Shift to cloud Delivering track record in attractive predictable cash accelerating long-term sustainable markets generation engine growth growth 8 |
Slide 9: Strong Tailwinds Driving Market Growth
Strong Tailwinds Driving Market Growth Strong Secular Driving Large To Grow Steadily at Tailwinds… Market… Mid-High Single Digits Many antiquated Total¹ 7-9% government systems no Market annual market growth longer supported $30B Governments shifting systems to cloud Addressable Market Today² $1
Slide 10: Targeting a Large, Fragmented Market with Antiquated Systems
Targeting a Large, Fragmented Market with Antiquated Systems >88,000 Local Governments >450,000 Potential Systems 1/3 2/3 Competitive Antiquated Deployments Deployments • 20+ years old systems • Programmed in COBOL • Homegrown / custom systems 10 |
Slide 11: Tyler Delivers the Broadest, Most Integrated Solutions for Local Government
Tyler Delivers the Broadest, Most Integrated Solutions for Local Government Public Administration Courts & Public Safety Platform Technologies O U R C O M P E T I T I O N • Accela • Infor • Axon Enterprise • Motorola Solutions • Accenture • Paymentus • BS&A Software • Kronos • CentralSquare • Pionee
Slide 12: Local Government has the Most Stable Sources of Funding
Local Government has the Most Stable Sources of Funding Local State Federal Charges and Misc. Property 18.8% Payroll Taxes Taxes Charges Individual and Misc. 35% 47% 22.7% Sales Taxes 23.1% Income Taxes Individual Income 50% Taxes Sales 17.8% Taxes 7.3% Other Individual Corporate 8% Income Other Inc
Slide 13: Clear Market Leader with Deep Competitive Moat
Clear Market Leader with Deep Competitive Moat Local / Niche Larger Multi-Focus Differentiator Players National Players Singular focus on public sector Broad public sector solutions Families of connected suites Large R&D spend on public sector solutions Large installed base to leverage Robust SaaS s
Slide 14: Industry-Leading R&D Investment Further Widens the Moat
A CLOSER LOOK Industry-Leading R&D Investment Further Widens the Moat Leading Revenues R&D Accelerating (2021) $1.6B ~2X $93M $88M $81M $63M $47M ~$400M Tyler Next Largest 2017 2018 2019 2020 2021 Competitor 14 |
Slide 15: Massive Opportunity to Grow for Many Years Ahead
B E YO N D O U R C U R R E N T TA M : Massive Opportunity to Grow for Many Years Ahead NEW MARKETS End User Expansion International Federal Core Market ~$30B Local Government and K-12 State TAM ~$15B Tyler Product Expansion 15 |
Slide 16: Tyler: A Winning Long-Term Growth Story
AGENDA Tyler: A Winning Long-Term Growth Story 1 2 3 4 5 Impressive Clear leader Powerful and Shift to cloud Delivering track record in attractive predictable cash accelerating long-term sustainable markets generation engine growth growth 16 |
Slide 17: A Powerful Cash Generation Engine
A Powerful Cash Generation Engine Free Cash Flow1 $M $400 $350 $300 $250 Cumulative $200 free cash flow $150 2017-2021 $100 $1.2B $50 $0 2017 2018 2019 2020 2021 FCF Margin Average Last 5 Years = 22% 17 | ¹ See reconciliation of GAAP to Non-GAAP measures included in this presentation and in our earn
Slide 18: Disciplined and Strategic Capital Allocation
Disciplined and Strategic Capital Allocation Organic Growth Acquisitions Stock Repurchases $293M $1.3B $200M 16% 72% 12% • Industry leading product development • 16 acquisitions last 5 years; 2 to date in 2022 • 1.8M shares repurchased last 5 years • R&D of $98M-$101M in 2022 • NIC acquisition of $2
Slide 19: Acquisitions are a Core Competency
A C L O S E R L O O K AT A C Q U I S I T I O N S Acquisitions are a Core Competency They Add to Our Capabilities and Accelerate Growth Date Acquisition 2022 US eDirect 2022 Quatred 2021 Arx • Expands TAM 2021 VendEngine 2021 NIC Key 2021 ReadySub 2021 DataSpec • Adds technology 2019 Courthouse Tec
Slide 20: Tyler: A Winning Long-Term Growth Story
AGENDA Tyler: A Winning Long-Term Growth Story 1 2 3 4 5 Impressive Clear leader Powerful and Shift to cloud Delivering track record in attractive predictable cash accelerating long-term sustainable markets generation engine growth growth 20 |
Slide 21: Recent Initiatives Accelerate Shift to the Cloud
Recent Initiatives Accelerate Shift to the Cloud Strategic agreement with Amazon Web Services ‒ highlights shift to cloud-first Civic Data & ‒ delivers scale and security from using world’s largest public cloud Engagement Insights Drive to connecting business functions of local government with t
Slide 22: Shift to Cloud-First Driving Rapid Growth in Subscription Revenues
Shift to Cloud-First Driving Rapid Growth in Subscription Revenues New Bookings Shifting to SaaS Driving Rapid Growth Subscription Revenues Fastest (% of new TCV booking that in Subscription Revenues Growing Segment are subscriptions) (% of total revenues) 71% 41% 63% 49% 62% 41% 31% CAGR 37% 24% 27
Slide 23: Tyler is Increasingly a High ARR Business
Tyler is Increasingly a High ARR Business Total 2021 Revenues $1.6B $369M 27% ARR SaaS Software $1.5B Recurring 73% ARR $548M ARR Transactions/ with 39% Payments 16% $471M Growth ARR Maintenance Q2 2022 Non-recurring 27% 34% 23 |
Slide 24: Tyler Annual Revenues Double when Existing Perpetual License Customers Move to Cloud
Tyler Annual Revenues Double when Existing Perpetual License Customers Move to Cloud – Illustrative Example On-premises Perpetual License Revenue Growth Cloud Model Model Potential $1M Cloud lifetime revenue is ~ 2X greater 22,000 than on-premises. Software License / Maintenance of 27,000 2X $400k L
Slide 25: Tyler: A Winning Long-Term Growth Story
AGENDA Tyler: A Winning Long-Term Growth Story 1 2 3 4 5 Impressive Clear leader Powerful and Shift to cloud Delivering track record in attractive predictable cash accelerating long-term sustainable markets generation engine growth growth 25 |
Slide 26: Transforming Local Government From Today’s World of Siloed Back Office Systems
TYLER VISION:HELPING TO BUILD CONNECTED CITIES Transforming Local Government From Today’s World of Siloed Back Office Systems Schools Community Services Emergency Services Corrections County Administration Local Dispatch Neighborhoods & Business Public Works Law Court House Enforcement City Hall 26
Slide 27: Leading the Way To: Tomorrow’s World of Connected Communities
TYLER VISION:HELPING TO BUILD CONNECTED CITIES Leading the Way To: Tomorrow’s World of Connected Communities. Analysis Engagement Layer Portals Dashboards Digital Infrastructure Layer Wearable Devices Sensors Smart Data Collection Layer Smart Mobile Apps Drones Meters Back-End Operational Systems La
Slide 28: Multiple Long-Term Growth Drivers
Multiple Long-Term Growth Drivers 5 Wise capital allocation ‒ M&A, internal investments in R&D and share repurchases 4 Expanding in adjacent markets ‒ larger jurisdictions, State, Federal, International 3 Capturing greater share with existing clients ‒ broadening portfolio, integrating analytics, cr
Slide 29: Impact of the Acquisition for Tyler and Our Clients
+ I M P A C T O F T H E A C Q U I S I T I O N F O R T Y L E R A N D O U R C L I E N T S Leading the Delivering Combining Connecting Engaging Citizens Industry Solutions Strengths Communities Citizens can access Combining the NIC’s clients gain NIC’s development NIC’s clients can connect federal, sta
Slide 30: Example of New Growth Opportunity – Electronic Payments
A CLOSER LOOK Example of New Growth Opportunity that Leverages Our Capabilities / Relationships – Electronic Payments Revenue Potential eFiling of electronic court documents ~$455M Added ~$100M NIC 2020 2021 3-5 Years Out Electronic payment for multiple services: tickets, taxes, utilities, state age
Slide 31: Mid-Term Financial Targets
GOING FORWARD Mid-Term Financial Targets Revenue Margin Free Cash EPS Growth Expansion Flow Margin Growth ~10% 30%+ ~25-30% ~15% Non-GAAP Operating 5-year CAGR margin 31 |
Slide 32: Growing Backlog – High Revenue Visibility
Growing Backlog High Revenue Visibility Backlog of Signed Contracts¹ $1,852M $1,796M $1,626M +14% $1,594M YOY $1,458M $1,226M $1,247M $1,049M $845M $702M $552M 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q2 2021 Q2 2022 Adding 15-20 new clients every week 32 | ¹ 2012 through 2015 are reported und
Slide 33: 2021 Results
2021 Results Revenues - Non-GAAP1 Diluted EPS - Non-GAAP1 ($B) ($) $1.595B $7.02 +42.7% +27.2% $5.52 $1.117B 2020 2021 2020 2021 ¹ See reconciliation of GAAP to Non-GAAP measures included in this presentation and in our earnings release. 33 |
Slide 34: YTD 2022 Results
YTD 2022 Results (as of 6/30/22) Revenues - Non-GAAP1 Diluted EPS - Non-GAAP1 $3.78 $925M $3.26 +16%2 +32.1%2 $700M YTD 2021 YTD 2022 YTD 2021 YTD 2022 1 See reconciliation of GAAP to Non-GAAP measures included in this presentation and in our earnings release. 2 NIC acquired April 21, 2021. YTD 2021
Slide 35: 2022 Outlook – Accelerating Growth Driven by Market Recovery and NIC Acquisition
2022 Outlook¹ – Accelerating Growth Driven by Market Recovery and NIC Acquisition Revenues - Non-GAAP² Diluted EPS - Non-GAAP2 ($B) ($) $1.835B - $1.870B $7.36 - $7.523 $7.02 $1.595B +4.8%- +15.2%- 7.1% 17.4% 2021 2022 Guidance 2021 2022 Guidance 1 Most recent 2022 guidance provided on 7/27/22. 2 Se
Slide 36: Non-GAAP Measures
Non-GAAP Measures The following table reconciles the Non-GAAP measures used in this presentation GAAP 36 |
Slide 37: Non-GAAP Measures
Non-GAAP Measures The following table reconciles the Non-GAAP measures used in this presentation GAAP 37 |
Slide 38: Tyler: A Winning Long-Term Growth Story
IN SUMMARY Tyler: A Winning Long-Term Growth Story 1 2 3 4 5 Impressive Clear leader Powerful and Shift to cloud Delivering track record in attractive predictable cash accelerating long-term sustainable markets generation engine growth growth 38 |
Slide 39: Investor Presentation
Investor Presentation www.tylertech.com
Tyler Technologies — Investor Presentation (August 2022) on 6ix