Tyler Technologies, Inc. Citi’s 2026 Global TMT Conference

Apologies, we might be 30 seconds late. We got lost running up and down the stairwell, but I am sure we can all relate. My name is Steven Anderson, Managing Director on Citi's Software Investment Banking Team. Pleased to be here today with Brian Miller, CFO of Tyler Technologies. We are going to have a couple of questions here, fireside chat. If there is time at the end, happy to open up to Q&A from the audience as well. Brian, as we think about Tyler Technologies, we know you as a major player in the GovTech ecosystem. You have been a leader for decades in the space, and you have been helping governments modernize their business through technology. For folks who are not as familiar with Tyler Technologies, could you just maybe spend a quick intro on who you are, what you do, and the business strengths?

Yeah. So, sure, as you said, we are the leading provider of software solutions, mission critical software solutions for the public sector. Primarily focused, historically, on the local government markets, so cities, county, school districts. They make up 70%-75% of our business. Have gotten a bigger position with state governments, mostly through the acquisition of NIC five years ago, and that makes up about 20%-25% of our business. Pretty limited exposure to the federal government, less than 5%. We have the broadest product portfolio of anyone serving public sector software, and we have by far the largest customer base of anyone serving the market. Having said that, it is still a very fragmented market, and we still have an awful lot of runway domestically as well as internationally.

In addition to the software solutions we provide, we have a pretty significant transactions business, makes up about a third of our revenues. So providing payment processing as well as software that is provided under transaction-funded arrangements.

Very good. Thank you for that. One thing I would love to drill into, a lot of the companies who are here at this conference today serve into the enterprise horizontal markets. Those can be very different than focusing explicitly on government customers. What is unique about your end market? What is differentiated about serving your customers?

Yeah. The public sector, there's a lot of things that are very different about it than the private sector. At the core, one of the big things is our customers don't compete with each other. They talk to each other a lot. They take a lot of comfort in solutions that work at other places like them. References and reputation are a really big thing, and that's something that Tyler has an incredible amount of strength at. Not surprisingly, governments move slowly, so we have long sales cycles, long replacement cycles. Very often they keep systems until they die. Historically, it's changing a little bit, but historically, they don't really think about software from an ROI perspective. Again, they don't compete with each other. They're not profit motivated, and they don't like change, so they tend to use systems as long as they can.

Historically, it's been hard to create demand. But that replacement creates a very steady non-discretionary demand because when one of these systems does get to end of life, they're all mission critical applications, public safety, courts, property taxes, utility bills, those kinds of things. Not replacing it is not an option. So, it creates an opportunity for very steady compounding growth as Tyler's demonstrated over a very long time. I think it becomes if you're not in this market, there are a lot of those characteristics you might view as negative. If you're in the market, there's a lot of those things that are really positive. But at the end, Tyler's strength is really our deep domain expertise, the breadth of our products, and our very long history of focusing just on government.

I want to drill in just a little bit on one of the comments you made about they might use assets until end of life. They might sweat them all the way through. Maybe correctly or incorrectly, probably a lot of people have a view that public sector may not necessarily always be at the forefront of technology innovation. But what have you seen, obviously, the cloud transition is something we'll talk about a little bit more now with AI. Are governments becoming more front-footed? Are they becoming more technology-oriented? How have these cycles evolved as you've seen them play?

Yeah, they really are, and I think some of it is really related to an increased focus on government efficiency. DOGE was obviously a big topic a year and a half ago and in the news every day. But even before DOGE, there was starting to be more of a focus on government efficiency. A lot of state governments, even local governments, had efficiency initiatives. Governments, they never have enough resources, enough budget. They always have budget pressures. They always are trying to do more with less. But really the way governments get more efficient is a more effective use of technology. Not only with an old mainframe-based system is it just old technology that's hard to run, but it doesn't have citizen self-service or online access, and it's not a good platform to build AI on top of. Paper-based in a lot of cases and not digital.

Replacing those systems does have a really strong ROI. Governments are, I think as they look at how they become more efficient, at least at the state and local level, it is not that they can fire thousands of people, it is that they do not have enough people to get the basic work done to start with. Technology is the way they are going to address that. We are starting to see more customers looking at ROI cases, seeing that around AI applications, and talk about replacing systems that are not necessarily at end of life, that they could get another 5 or 10 years out of, but that they are starting to understand that there are real benefits from making that effort and investment.

Thank you. You mentioned DOGE. Lots of headline around DOGE, certainly more at the federal level. I know you are more state and local, but can you talk about any spillover impact? Did you notice it more than headline, or was it a real thing in your customer base?

Well, it did not really have much of an impact, but there was an impact on sales cycles in the first part of 2025.

Because there was a lot of conversation, a lot of noise, and again, we do not have much federal exposure, but at the local level, whether it was DOGE, tariffs, just a lot of noise around the new administration, it was enough that local governments and state governments had to sort of step back and say, "Hey, is this going to affect me? Am I going to lose revenues? Am I going to have a bunch of work that I did not used to do that I am going to have to do?" There was a slowdown in sales cycles in the first part of last year that impacted our bookings. It ultimately did not impact demand.

Ultimately, state and local government said, "No, this doesn't really change anything." There was a bit of a pause or a slowdown, and by the end of the year, it was pretty much back to normal. We've talked about, in recent quarters, a very active market, really strong RFP activity, sales demo activity. So really no ultimate impact other than what I talked about earlier in terms of a positive focus on efficiency that'll drive more technology purchase.

Perfect. Then you talked a little bit about your market continuing to be, despite your leadership position being very fragmented. Maybe can we just spend a minute on really just how has the competitive landscape evolved? Who do you see in RFP? Is there a new wave of more, call it AI native folks, showing up on your radar as well? What does that look like?