Tyler Technologies Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Terry Tillman - Truist Securities. - Analyst : Yeah, thanks. Good morning. First, I guess, I want to say congrats to John and all the best going forward. My one question -- I'm going to focus on bookings, the SaaS bookings. I think there was some commentary in the prepared remarks about maybe some benefit from stuff from 1Q to 2Q actually materializing. But if I just look at the SaaS bookings, the $1.48 to $2.18, that is a substantial uplift sequentially and is higher than any bookings last year, including some quarters where there were some big deals. So just anything you can share more on that bookings because no part of the definition of the SaaS bookings is not just new deals, but also extensions and renewals. So maybe talk a little bit more around that SaaS bookings. Thank you.

Question: Terry Tillman - Truist Securities. - Analyst : Thank you.

Question: Alexei Gogolev - JPMorgan Chase & Co - Analyst : Hello everyone. Lynn, yesterday, we've heard Tenable call out improving federal spending environment. How have Tyler's sales cycle evolved since Q1? And what specific improvements are you observing in the pipeline as macro begins to improve?

Question: Alexei Gogolev - JPMorgan Chase & Co - Analyst : Thank you, Lynn.

Question: Hoi-Fung Wong - Oppenheimer & Co. Inc - Analyst : Great, thank you for taking my question. I realize that everyone's still digesting all the potential OBVA impacts, any thoughts on as more responsibility is pushed down the state, specifically around things like Medicaid, they're already stretched in. Any concerns this could potentially influence buying behavior in the near term?

Question: Hoi-Fung Wong - Oppenheimer & Co. Inc - Analyst : Fantastic. Thanks for the color.

Question: Michael Turrin - Wells Fargo Securities LLC - Analyst : Hey, great, thanks. Good morning. I appreciate you taking the question. Brian, I was hoping we could just go back to some of the free cash flow commentary and unpack it a bit more. I guess with Q2 specifically, I'm wondering if anything, in terms of transaction outperformance, it all impacts seasonality of free cash flow or anything we should be mindful of? And then the commentary on the bill impacts. Was that 200 basis points for the full year, just given the change in the second half assumptions, anything additionally you can add just there and in terms of seasonality as we're updating our forecast and just trying to get a bit more calibration around some of the changes there is helpful.

Question: Michael Turrin - Wells Fargo Securities LLC - Analyst : Thanks very much.

Question: Matthew Vanvliet - Cantor Fitzgerald LP - Analyst : Yes, good morning. Thanks for taking the question. I guess when you look at the pipeline for cloud flips, curious on how that was trending into your Connect user conference, how the conference helps support that. And then as you look towards the back half of the year, how should we think about the progress of cloud flips and the magnitude of the ARR flipped over.

Question: Matthew Vanvliet - Cantor Fitzgerald LP - Analyst : Great, thank you.

Question: Saket Kalia - Barclays Services Corp - Analyst : Hey, great. Hey guys, thanks for taking my question here. Great to see some of the stabilization. Brian, maybe for you. Again, it was really good to see the SaaS bookings this quarter and that sequential growth. I noticed that you narrowed the SaaS revenue growth for the year, just a little bit. It's really not that material, but I was just wondering if you could just talk us through what were some of the puts and takes that you considered when doing that. And then just broader, remind us what you said about the long-term model here with SaaS growth at Analyst Day, if I remember correctly, it was kind of a 2-stage sort of model. I wanted to see if you had -- if you could just remind us about what that 2 stages sort of said about SaaS growth. Thanks.

Question: Saket Kalia - Barclays Services Corp - Analyst : Makes a ton of sense. Thank you.

Question: Joshua Reilly - Needham & Company LLC - Analyst : Yeah, thanks for taking my question. As we enter the second half of the year here, how should we think about the pipeline for big deals. I know specifically, there's two states with RFPs for statewide court management contracts. Any update on how these are progressing and just the overall pipeline for big deals. Thank you.

Question: Joshua Reilly - Needham & Company LLC - Analyst : Thank you.

Question: Jonathan Ho - William Blair & Company L.L.C. - Analyst : Hi, good morning. Let me echo my congratulations as well. In terms of the transaction-based revenue, what maybe drove the strong performance this quarter. Can you just unpack that for us a little bit more? And what maybe causes us to drop back down to more normalized levels over the balance of the year? Thank you.

Question: Jonathan Ho - William Blair & Company L.L.C. - Analyst : Thank you.

Question: Aleksandr Zukin - Wolfe Research - Analyst : Hey guys, thanks for taking the question, echo the congrats. I guess maybe just 2 quick ones for me. First, around the kind of macro timing impacts, is there kind of maybe gauge the level of conservatism still embedded in the outlook for those events just given the kind of maybe lower macro impacts that we've seen thus far. That's just the first one. And then I have a quick follow-up.

Question: Aleksandr Zukin - Wolfe Research - Analyst : Got i. Thank you guys.

Question: Charles Strauzer - CJS Securities, Inc - Analyst : Hi, good morning. Just a personal thanks to John for the 23-plus years we've known each other and you, Brian, especially introducing us to the Tyler story at the very early days. And really, that's what I had for you guys. Thank you. Appreciate that.

Question: Gabriela Borges - Goldman Sachs Group Inc - Analyst : Hi, good morning. Thank you. I wanted to follow up on the prior commentary on the potential for flip to grow around 25% year-over-year. Give us a little bit of a sense of how that's progressing from here. I think in the past, you've talked about peak flips being in 2027, 2028. So do you think that 25% can accelerate or are we talking number of clips to finish go -- maybe just a little color on where we go from here on the flip.

Question: Gabriela Borges - Goldman Sachs Group Inc - Analyst : I got you. And so even if the number of percentage growth is steady to improving, the dollar value associated with that split will be going up.

Question: Gabriela Borges - Goldman Sachs Group Inc - Analyst : Very helpful. Thank you.

Question: Mark Schappel - Loop Capital Markets LLC - Analyst : Thank you for taking my question. Nice job on the quarter. Lynn, I was wondering if you could just provide some additional details around emergency networking. The acquisition just announced -- it looks like a nice little pickup, but maybe just some additional information such as maybe number of employees or customers, were they a regional player and where they profitable?

Question: Mark Schappel - Loop Capital Markets LLC - Analyst : Thank you. Sounds like a nice pickup.

Question: Trevor J. Walsh - Citizens JMP - Analyst : Great. Thanks for taking the question up Lynn. Appreciate all the color around kind of dose, maybe taking a bit of a back seat or at least the noise around that diminishing and that kind of being a good, I guess, confirmation of stronger budgets at the state level. But have you seen anything, I guess, within the confines of your federal business. I know it's small, but just has that pressure release there. Maybe just get in that broader question, just give us an update on kind of where the opportunities might lie as you go more towards that part of the customer base. Thanks.

Question: Terry Tillman - Truist Securities. - Analyst : Great. Thanks for taking my question.

Question: Keith Housum - Northcoast Research Partners - Analyst : Good morning guys. Question for you on bookings. As I look at the bookings here, obviously, it's not quite what you guys are growing in terms of revenue. But in terms of your revenue, what do you guys recognize as perhaps not recording your bookings? Is there a gap there in terms of payments or whatever not you see in revenue but not in bookings?