Key financial results
- Revenue: Tyler delivered recurring revenue growth of 11%, including SaaS revenue growth of 21.2%.
We delivered 11% recurring revenue growth, including SaaS revenue growth of 21.2%
- Margins: Operating margins expanded by 150 basis points.
expanded operating margins by 150 basis points
- Cash flow: The company generated record quarterly free cash flow of $277 million.
generated record quarterly free cash flow of $277 million.
Business segment results
- SaaS bookings: Total SaaS bookings increased 14%, driven by cloud adoption and digital transformation efforts.
Total SaaS bookings increased 14% reflecting continued momentum in cloud adoption and digital transformation efforts across government.
- ERP: ERP is having a strong year with improved win rates and higher activity at the upper end of the market.
ERP is having a strong year. We're seeing a nice improvement in win rates and more activity, especially at the upper end of the market.
- Courts and Justice: Courts and Justice remains a strong performer with many flip opportunities and expanding solutions around the installed base.
Courts & Justice continues to be a strong performer for us. We've got a lot of flip opportunities there.
- Public safety: Public safety growth opportunities are expanding, aided by recent wins at the higher end of the market and the CODY Systems acquisition.
Public safety also is an area that we are very optimistic about the growth opportunities there
- Transaction revenue: Transaction revenue growth exceeded expectations at 14% excluding Texas contract churn, supported by embedded payments and transaction-funded deals.
Transaction growth has been strong. It's exceeded our expectations a little bit this year.
- Federal: Federal business was strong in the third quarter, benefiting from the federal budget cycle and application platform demand.
The federal market actually was pretty strong this quarter.
Capital allocation
- Share repurchases: Year-to-date, Tyler repurchased approximately 8.5% of its shares outstanding.
- Authorization: Almost $1.4 billion remains authorized under the share repurchase program.
with almost $1.4 billion remaining in our authorization.
- M&A: Management executed the disciplined capital allocation strategy through the acquisition of CODY Systems and share buybacks.
We also continue to execute our disciplined capital allocation strategy through the acquisition of CODY Systems and significant share repurchases.
Industry trends and dynamics
- Demand: Public sector demand remains healthy, supported by modernization priorities, strong client engagement, and active pipelines.
Public sector demand remains healthy, supported by ongoing modernization priorities, strong client engagement and an active pipeline.
- Cybersecurity: Cybersecurity environments and concerns continue to drive momentum toward cloud migration.
Cybersecurity continues to drive momentum to the Cloud, and we'll continue to drive all of our modernization
Competitive landscape
- AI preference: Clients prefer embedded AI solutions rather than external bolt-ons, valuing Tyler for its data and trust.
What we're seeing in the market and what we're seeing from our clients is they want these embedded solutions. They are not looking for bolt-ons from outside sources.
- Positioning: Tyler competes favorably in public safety and federal application platforms against other platform providers.
Our competitiveness and our products is still really strong in the market.
Macroeconomic environment
- Budgets: Budgets remain supportive of continued investment in mission-critical technology.
Budgets remain supportive of continued investment in mission-critical technology
- Transaction funding: Transaction-funded deals insulate state and local governments from budget pressures because they use user fees instead of appropriated funds.
it takes it out of the budget pressure world. They're not subject to appropriated funds.
Growth opportunities and strategies
- Cloud migration: Cloud migration momentum is building following direct outreach and disincentives for on-premises enterprise clients.
- Multi-tenant ERP: The company reached a key milestone with its first implementation of a multi-tenant solution for an enterprise ERP client.
We also reached a key milestone with our first implementation of our multi-tenant solution for an existing enterprise ERP client
- AI adoption: AI adoption continues to grow with approximately 300 deals containing AI across the portfolio.
Client adoption continues to grow with approximately 300 deals containing AI across the portfolio.
Financial guidance and outlook
- EPS guidance: Management left the full-year EPS guidance range unchanged.
we've left the range the same. We haven't narrowed the range, and we still expect to be within that range.
- SaaS guidance: SaaS revenue growth guidance has minor timing adjustments as large deals become back-end loaded.
the timing has moved a little bit. And so we've seen some deals, especially some larger deals that have signed either later in the quarter or later in the year.
Q3 FY2026 results
| Metric | Result | Change |
|---|---|---|
| Recurring revenue growth | 11% | Not stated |
| SaaS revenue growth | 21.2% | Not stated |
| Operating margin expansion | 150 basis points | Not stated |
| Free cash flow | $277 million | record quarterly |
| Total SaaS bookings growth | 14% | Not stated |
| Share repurchases year-to-date | 8.5% | Not stated |
How management sounded
Balanced (+35 on our -100 to +100 scale). Management expressed strong confidence in their long-term 2030 objectives, robust cloud migration momentum, and solid execution across strategic initiatives. Management sounded more upbeat than on 20% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Read the analyst Q&A summary and guidance and outlook for this call.
What to watch before the next call
- The broader rollout of Cloud Living features in early 2027 and its impact on the acceleration of client migrations.
- Execution on sales and marketing investments planned for 2027 to expand sales coverage.
- Adoption trends and pricing predictability for newly launched Agentic AI solutions.
Earlier calls
- Q2 2026 (Jul 30, 2026), tone Balanced: Tyler Technologies reported a strong second quarter with record SaaS bookings and SaaS revenue growth of 21.7%. Management highlighted healthy public sector demand and ongoing modernization priorities.
