Yahoo Finance Tyler's (TYL) Q1 Earnings Beat, Revenues Miss Estimates
Tyler Technologies TYL reported first-quarter 2023 non-GAAP earnings of $1.76 per share, which beat the Zacks Consensus Estimate of $1.71 per share but declined 7.6% from the year-ago quarter’s $1.90 per share.
Non-GAAP revenues increased 3.5% year over year to $471.9 million. The top line missed the Zacks Consensus Estimate of $473.7 million.
The robust year-over-year top-line growth was primarily driven by rise in subscription revenues. During the first quarter, software subscription arrangements comprised approximately 87% of the total new software contract value as the company continued to transform into a software-as-a-service model from its on-premise license-based model. On an organic basis, non-GAAP revenues increased 7.2%.
Tyler Technologies, Inc. Price, Consensus and EPS Surprise
Tyler Technologies, Inc. price-consensus-eps-surprise-chart | Tyler Technologies, Inc. Quote
Quarterly Details
Tyler’s recurring revenues from maintenance and subscriptions increased 9.1% year over year to $395.6 million and accounted for 83.8% of the total quarterly revenues.
TYL reported annualized recurring revenues on a non-GAAP basis of $1.58 billion, up 9.1% year over year. Subscription bookings in the first quarter added $17.1 million to annual recurring revenues.
Segment-wise, Maintenance revenues (accounting for 24.4% of total revenues) were $115.1 million, down from $117 million in the year-ago quarter.
Subscription revenues (59.4% of total revenues) grew 14.3% year over year to $280.5 million.
Software licenses and royalties (2.1% of total revenues) of $10.1 million decreased 38.8% on a year-over-year basis.
Professional Services revenues (12.9% of total revenues) amounted to $60.9 million, down 13% from the year-ago quarter.
Hardware and other revenues (1.1% of total revenues) slumped 26.8% from the year-ago quarter to $5.2 million.
The backlog at the quarter-end was $1.85 billion, up 5.1% year over year.
Bookings increased 2.9% year over year at $431 million. Moreover, in the trailing 12 months, bookings increased 0.4% year over year to $1.96 billion.
Operating Details
Tyler’s non-GAAP gross profit increased 1.3% year over year to $215.1 million. Non-GAAP gross margin contracted 100 basis points (bps) to 45.6%.
Adjusted EBITDA decreased 5.6% year over year to $112.5 million.
Non-GAAP operating income for the quarter totaled $102.2 million, down 7.7% year over year. However, the non-GAAP operating margin contracted 260 bps to 21.7%.
Balance Sheet & Other Details
As of Mar 31, 2023, Tyler’s cash and cash equivalents were $130.8 million compared with $173.9 million as of Dec 31, 2022.
The company generated $74.7 million in cash from operational activities and $63.6 million of free cash flow. With the rising interest rates, Tyler is focusing on utilizing its excess cash for debt reduction.
Guidance
For 2023, Tyler expects GAAP and non-GAAP revenues in the range of $1.935-$1.970 billion.
TYL estimates adjusted earnings guidance to be in the $7.50-$7.65 per share range. The company anticipates interest rate hikes, accelerated non-cash amortization of debt discounts and issuance costs associated with debt repayments.
Zacks Rank & Key Picks
Currently, Tyler carries a Zacks Rank #3 (Hold). Shares of TYL have declined 0.9% over the past year.
Some better-ranked stocks from the broader Computer and Technology sector are Meta Platforms META, Salesforce CRM and ServiceNow NOW. While Meta Platforms and Salesforce are flaunting a Zacks Rank #1 (Strong Buy), ServiceNow carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Meta Platforms' first-quarter 2023 earnings has been revised a penny upward to $1.97 per share over the past seven days. For fiscal 2023, earnings estimates have moved north by a penny to $10.23 in the past seven days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 8.6%. Shares of the company have gained 33.5% in the past year.
The Zacks Consensus Estimate for Salesforce’s first-quarter fiscal 2024 earnings has been revised northward from $1.30 to $1.61 per share over the past 60 days. For fiscal 2024, earnings estimates have moved up by 21.3% to $7.11 in the past 60 days.
CRM's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.6%. Shares of the company have gained 9.6% in the past year.
The Zacks Consensus Estimate for ServiceNow’s first-quarter 2023 earnings has been revised southward from $2.04 to $2.02 per share over the past 90 days. For 2023, earnings estimates have moved up by a penny to $9.16 in the past seven days.
NOW's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 6.9%. Shares of the company have inched down 2.6% in the past year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Salesforce Inc. (CRM) : Free Stock Analysis Report
ServiceNow, Inc. (NOW) : Free Stock Analysis Report
Tyler Technologies, Inc. (TYL) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
