Tyler Technologies Inc at Wells Fargo TMT Summit Summary

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

Question: Michael Turrin - Wells Fargo Securities LLC - Analyst : <_ALACRA_META_ABSTRACT>I don't want to belabor with the entire history of Tyler, which is long standing at this point in time. But maybe if you could start off with just an overview of the past couple of years for Tyler. I know cloud has been top of mind. We'll get into some of the 2030 targets, but just engaging progress and maybe where you expected Tyler to be in 2025, a few years ago? Brian Miller - Tyler Technologies Inc - Chief Financial Officer, Executive Vice President, Treasurer Yeah, sure. It's probably a good time frame because we had a big Investor Day in 2023 and post the acquisition of NIC is getting into the state business, payments business, we were an inflection point in our cloud transition. So we thought it was a good time to reframe everything and make sure everyone was aligned with how -- where we saw the company going over the next few years. And so we set some targets for 2025 and then 2030, which was certainly much further out than we typically talked about long-term targets. But -- so now here we are closing the end of '25 and happy to say that we're really on track or ahead of plan to achieve all of those 2030 targets. For 2025, we've really achieved higher growth around our transaction business than the targets we originally set out. So that is going well. We've also achieved significantly higher cash flow margins than we planned. So those are the two areas where we've really -- are really ahead of track. We're right on track for the flips of our on-prem customers to the cloud. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 18, 2025 / 9:30PM, TYL.N - Tyler Technologies Inc at Wells Fargo TMT Summit That's not a linear process, but we're -- we've said were comfortable with the targets that we set for 2030 and the progress we've made towards those. Made a lot of progress towards margin and that's on track as well. So really feel really good about where we are two years in. We plan to have another Investor Day next -- midyear next year and expect we'll be updating, providing those things. One of the interesting things was in 2023 AI was not really in our vocabulary amazingly. So there really wasn't any, either from a revenue perspective or from a cost efficiency perspective, that wasn't a part of those targets. So we'll be probably looking to frame those a little bit more as we have a number of activities, both on the internal and use side and in our products going on around AI. So yeah, we talked about long-term margin expansion of going from a 23% operating margin in 2023 to a 30%-plus margin in 2030 and achieving a target of $1 billion in free cash flow by that point.

Question: Michael Turrin - Wells Fargo Securities LLC - Analyst : Yeah. So this year, and maybe it's less of a conversation point directly for Tyler, but overall, it was a bit of a different year in terms of public sector because of DOGE and some of the federal impacts. And I know you've been clear on some of the more recent earnings calls and the difference between what state and local fees and what federal government fees. But was there any difference at all in the metrics that you track this year? Was there any hesitation just in terms of uncertainty that rippled into some of your customers at all? Or how would you characterize this year relative to prior? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 18, 2025 / 9:30PM, TYL.N - Tyler Technologies Inc at Wells Fargo TMT Summit

Question: Michael Turrin - Wells Fargo Securities LLC - Analyst : Yeah. This is what I was going to follow up on, and you beat me to the punch a little bit. But just have you found a way to shift your go-to-market message or sales strategy to now respond to some of the questions that are out there around efficiencies or reasons to use technology? And if we look at some of the major subsegments that you serve, are there specific subverticals, ERP, or some other area where you think those are maybe more direct potential just soft tailwinds for your business?

Question: Michael Turrin - Wells Fargo Securities LLC - Analyst : Yeah. That's what I said, modest tailwind. No, that's very helpful. You reported 3Q results recently and it seemed to be a bit of a stabilizing for us given you mentioned some of the questions around first quarter and bookings. And I think the commentary was fairly consistent in terms of RFP volume and deal activity in some of the indicators that you look at. But maybe just frame for those who weren't necessarily fully paying attention to 3Q, what the highlights, key takeaways of your perspective, should have been for Tyler?

Question: Michael Turrin - Wells Fargo Securities LLC - Analyst : Yeah, that makes sense. I was going to ask why. And so just the visibility that you have into next year at this point for 20%, your confidence level in putting that baseline out initially. And then if bookings are lumpy, which I think we can appreciate they would be in your business, is it better to look at trailing 12, 24 months? What would you encourage investors to spend time focusing on?

Question: Michael Turrin - Wells Fargo Securities LLC - Analyst : Where would you say Tyler is? And I appreciate you're built towards this with some of the commentary around the cadence of when flips and we've seen -- you give more metrics than most companies around some of the moving factors in the model. If I asked you to set the stage of what inning Tyler is in its cloud migration journey or where you're at from a repeatability standpoint, meaning now you have confidence you've seen enough time so you can go faster, where would you say you are in terms of the cloud journey today and what are you embedding towards those 2030 targets alongside that?

Question: Michael Turrin - Wells Fargo Securities LLC - Analyst : Can you touch on -- I mean there are several things in that response that seem like they would be margin enhancing over time. You mentioned moving away from some of the data center footprint that you're managing, single versions of cloud, just all of the consolidation that goes into that. So just what that gives you from a predictability margin standpoint and maybe embed that with the 2030 targets?

Question: Michael Turrin - Wells Fargo Securities LLC - Analyst : Yeah. You're right on script. I feel you can read my not my eligible handwriting in some way, shape, or form because I want to touch on NIC and the payments opportunity. Now you and I spent a lot of time talking about this after last earnings sprint. Transaction revenue has been a source of strength. You're marching well in stride with the target levels. I think we've been watching, engaging progress in NIC to understand the cross-sell opportunity. And so I'm wondering, from your perspective, what's driving the the durable transaction revenue growth and how you would characterize your progress with cross-sell between NIC and the core Tyler offerings?

Question: Michael Turrin - Wells Fargo Securities LLC - Analyst : Sounds like a win-win and I assure you, California residents aren't balking at the biggest fee relative to -- yeah, exactly. I want to just try to touch on a couple more with the time left. M&A has always been a part of the capital allocation strategy. I think again I see a bit bigger than typical, but what do you see in the private market currently from a deal perspective? How would you assess the landscape? And are there certain areas, whether it's AI or something else where you'd maybe have a bit more interest in time?

Question: Michael Turrin - Wells Fargo Securities LLC - Analyst : Last one for you, Brian, and then you're off the stage. Just things that are top of mind for you and planning for next year. And then if we're here in three years, what do you think will be talking about with Tyler?

Question: Michael Turrin - Wells Fargo Securities LLC - Analyst : That's great. Thanks very much, Brian. I appreciate you joining.