Tyler Earnings: SaaS Conversions Begin in State-Wide Court Deals and Public Safety Contracts

We are raising our fair value estimate to $485 per share from $475 for wide-moat Tyler after the company reported solid fourth-quarter results, and we adjusted our model for the time value of money. We still believe shares are attractive. Compared with our expectations, both revenue and non-GAAP operating profit were slightly light, while new 2024 guidance was in line on both the top and bottom lines. Management continues to guide to 20% compounded growth for SaaS through 2025. We continue to see federal stimulus funds as supporting the healthy environment and see consistent growth and margin expansion over time driven by the maturation of the cloud transition. We believe Tyler is the clear leader for municipal software needs and continue to view shares as attractive.