Tyler Technologies takes its name from the unlikeliest of places. It was 1968 and company founder Joseph McKinney acquired an iron pipe manufacturer called Tyler Pipe to augment his government business holdings that was operated under the name Saturn Industries. As the plumbing provider was the profitable venture at the time, McKinney took the name and made it his own.
Over the years, the company has demonstrated an impressive ability to stay agile in response to market demands. From an iron works company, they evolved into an information technology firm before launching themselves as a major public sector software company in 1998. Now, Tyler Tech offers software products and services that span eight solution areas: appraisal & tax, courts & justice, data & insights, ERP financial, civic services, public safety, records & documents, and schools.
Tyler Technologies recently announced their best-ever quarter for new bookings – pointing to two outsized SaaS deals the company signed for a combined $105 million in business as the reason for their success. The financial future looks bright as they continue their seven year stretch of double-digit revenue growth with a 16.5 percent surge in sales to $275 million this last quarter.
Perhaps being a step or two behind King Midas himself, everything the company touches appears to turn to gold. Even with the stars-aligned as they are, Tyler CEO Lynn Moore is questioning his stance on keeping the company cloud-agnostic. It’s an unusual move in today’s cloud-crazed world but the chief executive officer has wanted to let their state and local government clients take the lead on choosing their solution.
But change may soon be coming, Moore told investors in an earnings call. “We are recognizing the shift. We see it,” Moore said. “Historically, we’ve, I think you’ve heard us say, we’ve had mostly a cloud-agnostic approach, and I think that’s something we are taking a looking at going forward.”
With earnings from subscription services rising by 38.6 percent this quarter and total recurring revenues derived from those same sources coming in at 20.8 percent, the income from the company’s cloud-based business made up 65 percent of their total revenue. The leadership team is finding those numbers hard to ignore and is working on plans for how best to optimize their cloud offerings.
“We are taking a hard look at that internally,” Moore said. “One of our strategic initiatives for this year has really been looking at this and really focusing on a company-wide cloud strategy.”
On the cybersecurity front, Tyler’s savvy acquisition of Sage Data Systems has put them in a unique position to provide much-needed threat detection/prevention software to their state and municipal government clients. With the widely publicized ransomware attacks on cities like Baltimore, it has made security a priority for many of their public sector clients.
“We like where we sit with that. It’s an unfortunate reality of the business that’s out there” he added. “So, certainly, it’s a higher awareness factor. We see that as an opportunity again. And I think we are positioned with Sage to capitalize on that.”