Tyler Technologies (NYSE:TYL) TYL reported third-quarter 2021 non-GAAP earnings of $2.01 per share, topping the Zacks Consensus Estimate of $1.74 per share. The bottom line also improved 34% from the year-ago quarter’s $1.50 per share.
The non-GAAP revenues of the software and technology services provider surged 61.1%, year over year, to $460.6 million from the prior year’s $285.9 million. The top line surpassed Zacks Consensus Estimate of $419.2 million.
This robust year-over-year growth in the top line was primarily driven by the post-acquisition contributions of NIC (NASDAQ:EGOV), and the constant rebound of the market and sales activities to the pre-COVID levels. On an organic basis, the non-GAAP revenues increased 7.5%.
Recurring revenues from maintenance and subscriptions surged 78.9%, year over year, to $370.8 million and accounted for 80.6% of the total quarterly revenues.
The annual recurring revenues, on a non-GAAP basis, came in at $1.49 billion, up 79.2% year over year. Subscription bookings during the third quarter added $19 million to the annual recurring revenues.
Tyler Technologies, Inc. Price, Consensus and EPS Surprise 
Tyler Technologies, Inc. price-consensus-eps-surprise-chart | Tyler Technologies, Inc. Quote
Quarterly Details
Segment wise, maintenance revenues (accounting for 25.6% of total revenues) were $117.8 million, down 0.1% year over year.
Subscription revenues (55% of total revenues) skyrocketed 183% year over year to $252.9 million.
Software licenses and royalties (4.9% of total revenues) of $22.7 million increased 13.7% on a year-over-year basis.
Software Services revenues (11.9% of total revenues) amounted to $54.6 million, up 13.9% from the year-ago quarter.
Appraisal services revenues (1.6% of total revenues) jumped 32.5% from the prior-year quarter to $7.1 million.
Hardware and other revenues (1% of total revenues) slid 10.5% from the year-ago quarter to $4.7 million.
Backlog at quarter-end was $1.77 billion, up 14.3% year over year.
Bookings surged more than two-fold, year on year, to $601 million, courtesy of the post-acquisition activities of NIC, along with the continued rebound of market trends to the pre-pandemic levels. Excluding NIC’s contribution, bookings increased 52% year over year.
Operating Details
Tyler Technologies’ non-GAAP gross profit increased 38.4% year over year to $216.2 million. However, the non-GAAP gross margin contracted 770 basis points to 46.9%.
The adjusted EBITDA increased 40.6%, year over year, to $125 million.
The non-GAAP operating income for the quarter totaled $116.8 million, up 42.8% year over year. However, non-GAAP operating margin contracted 330 basis points to 25.3%.
Balance Sheet & Other Financial Details
As of Jun 30, 2021, Tyler Technologies’ cash and cash equivalents were $216.8 million compared with $216.8 million on Jun 30, 2021.
The company generated $205.4 million of cash from operational activities and $192.8 million of free cash flow.
Guidance
Buoyed by the better-than-anticipated third-quarter performance, Tyler Technologies raised the revenue and earnings outlook for the full fiscal year. The company now projects revenues between $1.577 billion and $1.597 billion for fiscal 2021, up from the earlier guided range of $1.532-$1.557 billion.
It also raised the non-GAAP earnings guided range to $6.94-$7.02 per share from the $6.70-$6.80 projected earlier.
Zacks Rank and Stocks to Consider
Tyler currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include Applied Materials (NASDAQ:AMAT) AMAT, Advanced Micro Devices (NASDAQ:AMD) AMD and CACI International CACI, 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 Applied Materials, Advanced Micro Devices and CACI is currently pegged at 19.4%, 44.6% and 5.5%, respectively.
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