Tyler Technologies (NYSE: TYL), which sells software to local, state and federal government agencies, trimmed its 2026 revenue forecast on October 28 as third-quarter SaaS revenue rose 21.2% to $242.2 million. Total revenue grew 8.7% to $647.6 million in the quarter ended September 30, according to its results release.
The cut is small: Tyler lowered the top of its full-year revenue range by $10 million, to $2.565 billion, which it said moves the midpoint by 0.2%. The cloud figures under the headline were softer. Contract value from flips, as Tyler calls on-premises clients moving to its SaaS versions, rose 2% from a year earlier. Acquisitions supplied $9.8 million of the $42.4 million rise in SaaS revenue. And the top of the 2026 SaaS growth range came down to 22.5% from 23.5%.
Tyler's shares fell 5.8% in after-hours trading, Investing.com reported at 5:43 p.m. ET. Revenue missed the $651.46 million consensus estimate it cited, while non-GAAP EPS of $3.52 beat its $3.48 estimate. Lynn Moore, Tyler's executive chair, president and chief executive officer, said in the release that strong SaaS bookings "reinforce healthy public sector demand."
The quarter against a year earlier
Recurring revenue, 87.8% of the total, rose 11.0%. Transaction revenue grew 9.5%, or 14.2% excluding a Texas payments contract that ended in the fourth quarter of 2025. Maintenance revenue, paid by on-premises clients, fell 4.6% as clients moved to SaaS.
Measure | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
Revenue | $647.6M | $595.9M | 8.7% |
SaaS revenue | $242.2M | $199.8M | 21.2% |
Transactions | $220.4M | $201.3M | 9.5% |
Maintenance | $106.2M | $111.3M | -4.6% |
ARR | $2.28B | $2.05B | 11.0% |
GAAP operating margin | 18.1% | 16.4% | 1.7 pts |
Non-GAAP operating margin | 28.1% | 26.6% | 1.5 pts |
GAAP diluted EPS | $2.33 | $1.93 | 20.7% |
Non-GAAP diluted EPS | $3.52 | $2.97 | 18.5% |
Free cash flow | $277.0M | $247.6M | 11.9% |
Bookings | $646M | $602M | 7.3% |
Source: Tyler's results release and supplemental schedule; changes recalculated by SaasBuzz. ARR is the quarter's subscription and maintenance revenue, annualized; bookings are contracts signed, extended or renewed.
Where the SaaS growth came from
Tyler's quarterly report attributes the growth to sales to new clients, expansions with existing ones, conversions of on-premises clients and annual price increases. SaaS revenue from recent acquisitions added $9.8 million of the $42.4 million increase. Without it, SaaS revenue grew about 16.3%, by SaasBuzz's calculation, down from about 17.4% in the second quarter, when acquisitions added $8.1 million.
Tyler bought For The Record, which makes courtroom recording software, in April and CODY Systems, a public safety software company, in July. On reported figures, SaaS growth has held between 19.9% and 23.5% for eight quarters.
Quarter | SaaS revenue | Growth |
|---|---|---|
Q4 2024 | $173.4M | 23.0% |
Q1 2025 | $180.1M | 21.0% |
Q2 2025 | $189.6M | 21.5% |
Q3 2025 | $199.8M | 19.9% |
Q4 2025 | $208.3M | 20.2% |
Q1 2026 | $222.4M | 23.5% |
Q2 2026 | $230.6M | 21.7% |
Q3 2026 | $242.2M | 21.2% |
Source: Tyler's supplemental schedules. Growth from a year earlier, calculated by SaasBuzz, matches the rates Tyler reported.
Growth in cloud conversions slowed
Flips signed in the quarter carried $18.6 million in annual contract value, up from $18.2 million a year earlier, when flip value had jumped 64%, according to Tyler's supplemental schedule. Its results presentation put the growth at 2%. In the second quarter, flip contract value had risen 18.4%. New SaaS deals made up the difference: their contract value rose 75% to $22.0 million, taking the total from new deals and flips up 32.1% to $40.6 million.
Total SaaS bookings, which also count expansions and renewals, rose 14.0% to about $262 million.
Moore said in prepared remarks that Tyler contacted its on-premises Enterprise clients in July about moving to the cloud and that "a meaningful cohort of large clients" is advancing transition plans. Wasco County, Oregon, became the first client live on Tyler's multi-tenant SaaS model, due for wider rollout in 2027.
We are well positioned to drive an accelerating pace of migrations beginning in 2027.Lynn Moore, executive chair, president and CEO of Tyler Technologies, in prepared remarks, October 28
In July, Tyler said it was on a path to move 85% of its maintenance revenue to the cloud by the end of the decade.
Margins and cash
In the same remarks, Brian Miller, Tyler's executive vice president and chief financial officer, attributed the 1.5-point rise in non-GAAP operating margin, to 28.1%, to a revenue mix shifting toward SaaS and transaction revenue and to operating expense efficiencies. Free cash flow rose 11.9% to $277.0 million, a quarterly record.
Earnings per share grew faster than profit because Tyler is buying back stock: about 1.1 million shares for about $379 million in the quarter, and about 8.5% of its outstanding shares this year. With 7.1% fewer diluted shares than a year earlier, GAAP net income rose 12.7% and GAAP diluted EPS 20.7%.
What the new forecast implies
Tyler now expects 2026 revenue of $2.535 billion to $2.565 billion, against $2.535 billion to $2.575 billion in July, and SaaS growth of 21.5% to 22.5%, against 21.5% to 23.5%. Its ranges for non-GAAP EPS, $12.95 to $13.20, and free cash flow margin, 26% to 28%, did not change. Miller said the revenue forecast was adjusted "to reflect shifts in the timing of new sales during the year."
By SaasBuzz's calculation, the new range implies fourth-quarter revenue of $628.8 million to $658.8 million. The $643.8 million midpoint would be 11.9% above the fourth quarter of 2025, a low base: revenue fell to $575.2 million that quarter, with negative $2.9 million in software license and royalty revenue.
For SaaS, the new 22% midpoint implies fourth-quarter revenue of about $253.7 million, up 21.8%, close to the third quarter's pace. Keeping July's 22.5% midpoint would have required about 23.6% growth in the fourth quarter, faster than in any of the past eight quarters, and the old 23.5% top about 27.4%.
Flips are the figure to watch next. In the fourth quarter of 2025, the number and value of flips signed both set quarterly highs and flip contract value rose 64.5%, Moore said in February.
