Q4 2024 Tyler Technologies Inc Earnings Call Transcript
Key Points
- Tyler Technologies Inc (TYL) reported a strong fourth quarter with recurring revenue growth of nearly 15%, driven by SaaS revenue growth of 23%.
- The company achieved its 16th consecutive quarter of SaaS revenue growth of 20% or more, with 97% of new software contract value in the cloud.
- Transaction revenue set a new quarterly high, growing nearly 21%, and the non-GAAP operating margin expanded to 24.4%.
- Free cash flow significantly exceeded expectations, reaching $216 million, marking a new high for a fourth quarter.
- The company continues to lead in cloud adoption, with notable multi-product SaaS contracts and increased momentum in public safety solutions.
- The wind down of the Texas payments processing contract, which expires in August 2025, is expected to impact transaction revenue growth.
- Maintenance revenue is expected to decline by 4% to 6% due to the ongoing shift to SaaS and acceleration of client flips.
- Professional services revenue is projected to be flat or down by 3%, reflecting efficiencies in cloud transition implementations.
- License revenues are expected to decline by 18% to 20%, with very few new license sales anticipated.
- Research and development expenses are expected to grow significantly, driven by redeployment of resources and incremental funding of AI initiatives.
Hello, and welcome to today's Tyler Technologies' fourth-quarter 2024 conference call. Your host for today's call is Lynn Moore, President and CEO of Tyler Technologies. (Operator Instructions).
And as a reminder, this conference is being recorded today, February 13, 2025. I would now like to turn the call over to Hala Elsherbini, Tyler's Senior Director of Investor Relations. Please go ahead.
Thank you, Kevin, and welcome to our call. With me today is Lynn Moore, our President and Chief Executive Officer; and Brian Miller, our Chief Financial Officer. After I give the Safe Harbor statement, Lynn will have some initial comments on our quarter, and then Brian will review the details of our results and provide our annual guidance for 2025. Lynn will end with some additional comments, and then we'll take your questions.
During this call, management may make statements that provide information other than historical information and may include projections concerning the
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