Tyler Technologies ( TYL Quick Quote TYL - Free Report) reported third-quarter 2020 non-GAAP earnings of $1.50 per share, which surpassed the Zacks Consensus Estimate of $1.34. Moreover, the bottom line increased 11.1% from the year-ago quarter’s reported tally.
Revenues on a non-GAAP basis increased 3.2% year on year to $285.9 million, beating the consensus mark of $284.9 million. Tyler recorded 3.3% year-over-year growth in organic revenues.
Recurring revenues increased 12% year over year to $207.3 million and accounted for 72.5% of total revenues.
Q3 Results in Detail
Segment wise, Maintenance revenues (41.3% of total revenues) came in at $118 million, up 7.4% year over year.
Subscription revenues (31.2% of total revenues) climbed 18.6% year over year to $89.3 million.
Software licenses and royalties (7% of total revenues) of $19.9 million slid 21.4% on a year-over-year basis.
Software Services revenues (16.8% of total revenues) of $43.7 million dropped 12.8% from the year-ago quarter.
Appraisal services revenues (1.9% of total revenues) slipped 10.2% to $5.4 million.
Hardware and other revenues (1.8% of total revenues) jumped 33% to $5.2 million.
Backlog at the end of the quarter was $1.55 billion, up 9.2% year over year. Of this, software-related backlog (excluding appraisal services) increased 9.5% to $1.38 billion.
Bookings grew 12.9% year on year to $292 million. Subscription bookings added $9.9 million in annual recurring revenues.
Tyler’s non-GAAP gross profit increased to $156.2 million from the year-earlier quarter’s $144.1 million. Non-GAAP gross margin also expanded 260 basis points (bps) to 54.6%.
Adjusted EBITDA was $88.9 million, up 15.4% year over year.
Selling, general and administrative (SG&A) expenses, as percentage of revenues, expanded 20 bps year over year to 23.4%. However, research and development (R&D) expenses, as percentage of revenues, contracted 10 bps to 7.6%.
The company’s non-GAAP operating income increased 15.2% year over year to $81.8 million. Its operating margin advanced 300 bps to 28.6%.
Balance Sheet and Cash Flow
As of Sep 30, 2020, cash and cash equivalents were $518.7 million compared with $351.3 million as of Jun 30, 2020.
The company generated an operating cash flow of $169.8 million during the third quarter and $266.3 million in the first nine months of 2020.
Updated Full-Year Outlook
Tyler lowered its full-year revenue guidance to $1.118-$1.130 billion from the $1.125-$1.145 billion projected earlier. However, it raised the non-GAAP earnings outlook to $5.48-$5.58 per share from the $5.30-$5.50 per share estimated previously.
Zacks Rank & Stocks to Consider
Tyler currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include NVIDIA Corporation (
NVDA Quick Quote NVDA - Free Report) , Paylocity Holding Corporation ( PCTY Quick Quote PCTY - Free Report) and Covetrus, Inc. ( CVET Quick Quote CVET - Free Report) , all carrying a Zacks Rank #2 (Buy) at present. You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
The long-term earnings growth rate for NVIDIA, Paylocity and Covetrus is currently pegged at 20.1%, 20%, and 31.6%, respectively.
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