stockrowWhat it does
Tyler Technologies sells software and technology services primarily to government agencies. Its products help agencies run internal operations and provide services to the public. Founded in 1966 and headquartered in Plano, the company is led by President and Chief Executive Officer H. Lynn Moore, Jr.
Its software supports functions such as budgeting, tax collection, courts, public safety, permitting, schools and social services. For example, a local government can use Tyler software to manage finances and payroll, while a court can use it to manage cases and share information with prosecutors and defenders. School districts use its systems for business administration and student transportation.
Tyler also offers technology that connects agencies and residents. Its payments platform handles tasks from billing and payment collection through reconciliation and disbursement. Other products help agencies publish and analyze data, build applications with limited coding, and give residents access to information and online transactions.
Customers can use many of Tyler’s products as cloud-based software subscriptions rather than operating the systems themselves. Tyler also installs software, converts customer data, trains users and provides ongoing support. Its business is organized into Enterprise Software, which focuses on agency back-office systems, and Platform Technologies, which includes digital services, payments and data processing.
How it makes money
Tyler’s revenue comes mainly from subscriptions, maintenance and support, and professional services. It also sells software licenses and hardware. Total revenue increased 9.1% in 2025; in the third quarter of 2026, recurring revenue grew 11% and software-as-a-service revenue grew 21.2%.
Subscription revenue includes both cloud software fees and transaction-based fees. Cloud customers generally contract for one to three years, although terms can range from one to 10 years. Their subscription fees typically include maintenance and support. Transaction fees arise from services such as online government payments, digital government applications and electronic court filing.
Some software arrangements are funded by fees associated with transactions rather than by subscription fees paid from a government budget. These arrangements are recorded in transaction revenue and do not appear in SaaS revenue growth or SaaS bookings. Transaction volumes can vary with the season and outside factors: revenue has historically been highest in the second quarter and lowest in the fourth.
Customers using software on their own premises generally pay separately for maintenance and support, typically under annual contracts based on a percentage of the software license fee. Most maintenance contracts renew automatically unless either party gives notice. Tyler also charges separately for implementation work such as planning, data conversion, installation and training, using fixed fees or hourly and daily rates.
In 2025, subscriptions generated $1.6 billion, or 68.0% of revenue. Subscriptions and maintenance together accounted for 87% of revenue. Enterprise Software generated $1.7 billion, while Platform Technologies generated $628.6 million.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Subscriptions | $1.6 billion | 68.0% | 18.1% |
| Maintenance | $445.6 million | 19.1% | −3.78% |
| Professional services | $242.7 million | 10.4% | −8.07% |
| Hardware and other | $45.0 million | 1.93% | 8.73% |
| Software licenses and royalties | $12.8 million | 0.55% | −51.4% |
Customers and how it sells
Tyler’s customers are primarily federal, state, county and municipal agencies, school districts and other local government offices. County users include tax officials, court personnel, sheriffs and appraisers. Municipal users include finance, utilities, public works, permitting and police departments. At the state and federal levels, customers include agency heads and chief information officers.
The company has customers in all 50 states, as well as Canada, the Caribbean, the United Kingdom, Australia and other international locations. It maintains dedicated state-level offices in the 30 states where it has enterprise contracts. Its traditional focus has been small and midsized governments, and it also seeks business from larger jurisdictions. Federal customers accounted for less than 5% of total revenue, as discussed in the third quarter of 2026.
Tyler sells mainly through its own sales and marketing staff across the United States. It also uses a partner network for certain products, particularly in state and federal markets. New-system sales can come from referrals by other government departments or jurisdictions, relationships with officials, trade shows and direct inquiries. Separate staff focus on selling additional products, services and support to existing customers.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Enterprise Software | $1.7 billion | 72.9% | 12.1% |
| Platform Technologies | $628.6 million | 27.1% | 1.50% |
Suppliers and costs
Tyler’s main costs of providing its services are cloud hosting, merchant fees and personnel involved in implementation, subscriptions, maintenance and support. Sales expenses include staff pay, commissions, travel and marketing. Administrative expenses include corporate staff, professional fees, insurance, facilities and technology support.
The company is moving clients from its own data centers to Amazon Web Services for cloud hosting and has a collaboration agreement with AWS covering development, training and cloud services. It also uses third-party vendors to assist with some online payment services.
Computers, peripherals, operating-system software and other equipment needed to implement and provide Tyler’s systems are available from several third-party sources. Hardware is purchased from manufacturers or distributors, and Tyler has not experienced significant supply problems. No sole-source equipment supplier is identified in the company’s supplier discussion.
Tyler employed approximately 7,800 people at December 31, 2025. As clients move to cloud products and Tyler consolidates versions of on-premises software, the company expects it could reduce support costs and redeploy resources toward development.
- Revenue$2.3B
- Cost of revenue−$1.2B
- Research and development−$204.6M
- Selling, general and administrative−$465.0M
- Other operating costs−$56.4M
- Operating income$357.7M
Competitive position
Tyler competes with local, regional and national companies that offer some of the same public-sector software and services. It names Oracle, Infor, SAP, Workday, CentralSquare Technologies, Thomson Reuters, Motorola Solutions, Axon Enterprise and Constellation Software among its national competitors. Some competitors have greater financial and technical resources, while many smaller firms focus on a geographic area or product niche and may charge less.
Tyler also competes with consulting and systems-integration firms that build custom systems, principally for larger governments, and sometimes with governments’ own internal IT departments. Buyers often use a competitive request-for-proposal process and may hire consultants to help select vendors. Price, service, reputation, technology and the ability to configure products for each client are among the factors in competition.
Tyler offers integrated applications across multiple departments and has long-term customer relationships. It reported approximately 2% client attrition in 2025. Nearly all of its on-premises customers buy maintenance and support, and implementations can involve data conversion, setup, testing and training.
Our reading: Customer retention and implementation work provide a meaningful relationship-based advantage, although they do not prevent agencies from seeking competitive proposals. Our reading: The breadth and integration of Tyler’s products can support sales across departments, but competition from larger, well-resourced firms and lower-priced specialists limits that advantage.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Oracle Corporation | Public-sector software and services | Medium |
| Infor | Public-sector software and services | Medium |
| SAP AG | Public-sector software and services | Medium |
| Workday, Inc. | Public-sector software and services | Medium |
| CentralSquare Technologies | Public-sector software and services | Medium |
| Thomson Reuters Corporation | Public-sector software and services | Medium |
| Motorola Solutions, Inc. | Public-sector software and services | Medium |
| Axon Enterprise, Inc. | Public-sector software and services | Medium |
Growth opportunities
Tyler’s growth strategy combines new customer wins, additional sales to existing customers, cloud migration, product development and acquisitions. The company seeks to expand into larger jurisdictions and geographic markets where some products are not yet widely used. It also sells payment services into its software customer base and software products to customers of its digital government business.
The move from on-premises software to cloud subscriptions is a central part of the strategy. In the third quarter of 2026, Tyler completed its first multi-tenant implementation for an existing enterprise resource planning customer. The company expects broader rollouts of that approach in early 2027 and an accelerating pace of migrations beginning in 2027. It has also begun announcing the end of support and new on-premises upgrades for a flagship product to encourage migration.
Tyler is developing AI features across its portfolio and reported approximately 300 deals containing AI in the third quarter of 2026. It plans to make AI features available in cloud releases rather than on-premises releases. The company also expects opportunities to sell new court solutions to its existing customers following the acquisition of For the Record.
In October 2026, Tyler signed a large enterprise resource planning deal and converted a statewide court system to the cloud. It said that later signing of some larger deals reduced the revenue it could recognize from new deals and conversions during the year.
- $1.6BFY2021
- $1.9BFY2022
- $2.0BFY2023
- $2.1BFY2024
- $2.3BFY2025
- $2.5BFY2026 guidance
Structural risks
- Public-sector purchasing: Government budgets can limit resources or cause contracts to be terminated for lack of future funding. Sales cycles can be long and complex, and changes in administrations, personnel or budget priorities can delay or disrupt procurement.
- Cybersecurity and technology: Cyberattacks, security vulnerabilities and the evolving use of AI can disrupt Tyler’s business and harm its competitive position. Protecting client information and maintaining uninterrupted data-center operations are also risks.
- Project execution: Fixed-price contracts expose Tyler to cost overruns and penalties if it misjudges the time or resources needed, fails to manage customer expectations, or does not complete an engagement within budget.
- Revenue timing and volume: Customers can postpone purchases or take longer than expected to approve and sign contracts. Transaction-funded revenue can vary with seasonal volumes and external factors, while many operating and staffing costs are relatively fixed in the short term.
- Cloud and acquisition execution: Some public-sector customers may resist cloud adoption. Tyler also faces the risk that acquired businesses do not deliver expected growth or operating benefits, or that integration creates unexpected costs and disruption.
Bottom line
Our reading
Our reading: Tyler is a government-software business built around recurring subscriptions, transaction fees and support, with established customer relationships and products spanning multiple agency functions. Its growth depends in part on moving existing customers to the cloud and selling them additional services. (item1; item7)
Our reading: That model also leaves Tyler exposed to government procurement delays, project execution and changes in transaction volumes, even as its customer relationships help sustain recurring revenue. (item1a; call_qa)