Investor Presentation
May 2020
1
Tyler has included in this presentation “forward-looking statements” within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical in nature and typically address future or
anticipated events, trends, expectations or beliefs with respect to our financial condition, results of operations or business.
Forward-looking statements often contain words such as “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates,”
“plans,” “intends,” “continues,” “may,” “will,” “should,” “projects,” “might,” “could” or other similar words or phrases. Similarly,
statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking
statements. We believe there is a reasonable basis for our forward-looking statements, but they are inherently subject to risks
and uncertainties and actual results could differ materially from the expectations and beliefs reflected in the forward-looking
statements. We presently consider the following to be among the important factors that could cause actual results to differ
materially from our expectations and beliefs: (1) the effects of the COVID-19 pandemic, including its potential effects on the
economic environment, our customers and our operations, as wells as any changes to federal, state or local government laws,
regulations, or orders in connection with the pandemic; (2) changes in the budgets or regulatory environments of our customers,
primarily local and state governments, that could negatively impact information technology spending; (3) our ability to protect
client information from security breaches and provide uninterrupted operations of data centers; (4) our ability to achieve growth
or operational synergies through the integration of acquired businesses, while avoiding unanticipated costs and disruptions to
existing operations; (5) material portions of our business require the Internet infrastructure to be adequately maintained; (6) our
ability to achieve our financial forecasts due to various factors, including project delays by our customers, reductions in
transaction size, fewer transactions, delays in delivery of new products or releases or a decline in our renewal rates for service
agreements; (7) general economic, political and market conditions; (8) technological and market risks associated with the
development of new products or services or of new versions of existing or acquired products or services; (9) competition in the
industry in which we conduct business and the impact of competition on pricing, customer retention and pressure for new
products or services; (10) the ability to attract and retain qualified personnel and dealing with the loss or retirement of key
members of management or other key personnel; and (11) costs of compliance and any failure to comply with government and
stock exchange regulations. These factors and other risks that affect our business are described in our filings with the Securities
and Exchange Commission, including the detailed “Risk Factors” contained in our most recent annual report on Form 10-K. We
expressly disclaim any obligation to publicly update or revise our forward-looking statements.
Forward-Looking Statements
2
One of a Kind Company. Outgrowing a Growth Market.
Providerof software solutions to local / state governments
EPS growth
since 2002
Annualgrowthin $21Bmarket
Tyler annual revenue
growth since 2002
3
#1 20%
CAGR7-8% 13%
CAGR
T H E T Y L E R S T O R Y
One of a Kind Company. Outgrowing a Growth Market.
Powerful business model
One of a kind company
Large untapped market
Multiple growth and profit drivers
1
2
3
4
Long-termSustained Growth
• EPS growth
averaging
~20% annually
4
A T A G L A N C E
Leading Provider of Software Solutions to the Public Sector
Key Product Suites(approx. % of revenues)
Powerful Model
ERP/Financial, 44%
Courts & Justice, 17%
Public Safety, 11%
Appraisal & Tax, 9%
Platform Technologies,
8%
Civic Services, 4%
K-12 Schools, 4%
Land & Vital Records, 3%
26,000installations
$1.09B
~70%
67 bpsannually
1.2x
2019 Non-GAAP revenues
Recurring revenues
Non-GAAP operating margin expansion – avg. last 10 yrs.
Cash flow from ops to Non-GAAP net income– avg. last 5 yrs.
5
$134
$1,091
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
13%CAGR
Consistent Long-term Revenue Growth
Total Non-GAAP Revenues (a)
($M)
67%Recurring• Maintenance
• SaaS/Subscriptions
6
11% organic, 2% acquisitions
(a) 2002 through 2015 are reported under ASC 605. 2016 forward are reported under ASC 606.
Our Business Model is Proven and Scalable…
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
+571%
100
Index2010=100
Free Cash Flow
7
Free cash flow growing faster than earnings
+360%
+278%
Recurring Revenues
Total Revenues
+421% Operating Profit
Delivering a Consistent Record of Strong Performance
TotalRevenues
(Non-GAAP)
RecurringRevenues
EPS(Non-GAAP)
FreeCash Flow
$289M
$1,091M
2010 2019
$159M
$731M
2010 2019
$0.92
$5.30
2010 2019
$34M
$213M
2010 2019
16%
CAGR
18%
CAGR21%
CAGR
23%
CAGR
8
Using Strong Cash Flow to Build Shareholder Value
Invest in the Business
• Industry leading product development
• Capex of $36M - $38M in 2020
Cash FlowCumulative cash flow from operations 2015-2019
= $982M,
1.2X non-GAAP net income
$300M+ of cash and investments and no debt
9
Strategic Acquisitions
Share Repurchases• 27.9M shares repurchased
since 2002
• 39.8M shares outstanding at 4/30/20
• 31 acquisitions since 2006
• Add new products and technologies or expand client base
• Acquired Socrata, Inc. for $150M in cash on 4/30/18
• Acquired MicroPact, Inc. for $197M in cash on 2/28/19
Expand for new opportunities in federal, state and local space
Add key competencies with MicroPact’s successful utilization of partner network
Leverage strategic off-shore operations in Philippines
Bring on solid management team with similar culture and philosophy
MicroPact Acquisition Expands our TAM, Including Entry into the Federal Space
10
+
Market leader in open data and data driven analytics for the public sector
Data-as-a-Service platform that sits above existing “data silos” within public sector agencies
Strengthens all major Tyler solutions and furthers our Connected Communities initiative
Clients include 21 federal agencies, 29 States, 350+ cities & counties, with a focus on the “Government 500”
Socrata Acquisition Positions us as the Leader in Public Sector Data
11
+
T H E T Y L E R S T O R Y
One of a Kind Company. Outgrowing a Growth Market.
Powerful business model
One of a kind company
Large untapped market
Multiple growth and profit drivers
1
2
3
4
Long-termSustained Growth
• EPS growth
averaging
~20% annually
12
Unmatched Capabilities Provide Strong Competitive Advantage
Robust SaaS public sector solutions
National presence
Scalable solutions
“Evergreen” model for upgrades
Industry leader
– high barriers to entry
5
4
3
2
Singular focus on public sector 1
13
Strong Competitive Advantages – Tilt the Landscape in Tyler’s Favor
Geographicscope
National
Local /Regional
Multi-focus
Single-focus
Focus on local government
Oracle
ThomsonReuters
SAP
Infor
Single- focus, national player
14
CentralSquare
Solutionsuniquely designed for the
public sector
Our Winning Client Proposition
Leader in R&Dand innovation
Strong Financial Resources
The Tyler Advantage
15
“Evergreen” model for upgrades
Our Innovation Engine – Core to Our Success
Industry leading product development
– ~15% of revenues, ~ 1,500 software developers
Enhancements
– new features and technologies delivered through “evergreen” upgrades
Continuous improvement of client
experience
− High client retention
− Increased recurring revenues
Drives competitive strength
1
16
23
Single Focus Drives High Retention
Depth of Relationship
Sti
ck
ine
ss
Newclients
Service
Satisfaction
Follow-on solutions& cross-sell
Loyalty
Reference
~98%
Retention
17
Exclusive Focus High Retention ~ 98%
T H E T Y L E R S T O R Y
One of a Kind Company. Outgrowing a Growth Market.
Powerful business model
One of a kind company
Large untapped market
Multiple growth and profit drivers
1
2
3
4
Long-termSustained Growth
• EPS growth
averaging
~20% annually
18
Large Opportunity to Upgrade Government Software
>88,000
>450,000
1/3 provided by
competitive vendors
2/3 provided by
non-competitive vendors
– systems 20+ years old – “green screens”; COBOL
– unsupported systems
– home grown systems
O P P O R T U N I T Y
LocalGovernments
Total Potential Systems
19
CountiesSchool districts
Local agencies
Cities & towns
3,00013,600
35,000
36,000
Municipal Computer Systems Make Headlines: Long Growth Runway
20
ILLUSTRATION: TOMI UM FOR BLOOMBERG BUSINESSWEEK
March 4, 2019 Issue
Chicken Wire and Duct Tape
Municipal offices across the country are
struggling to do their jobs with obsolete gear
that can often be expensive and time-
consuming to replace
Baltimore
Police departmentIssue: The system for storing and tracking
crime reports is more than 20 years old, doesn’t
comply with the national incident reporting
system, and can’t link to other databases.
Upgrade cost: $4 million
BOTTOM LINE - Behind San Francisco’s
gleaming office towers packed with tech
workers, city assessors are struggling to
manage with software that predates
“WarGames” and “Tron.”
Massive Growth Potential for Tyler – Just Scratched the Surface
Large Market Opportunity Market Growing Steadily
7-8%annually
Total Market (1)
$21B
AddressableMarket Today (2)
$9B
Tyler$1.2B
21
(1) Source – Gartner - Local & Regional Government and Primary & Secondary Education spending on applications and vertical specific software and company estimates
(2) Source – Company estimate
T H E T Y L E R S T O R Y
One of a Kind Company. Outgrowing a Growth Market.
Powerful business model
One of a kind company
Large untapped market
Multiple growth and profit drivers
1
2
3
4
Long-termSustained Growth
• Cash flow and
EPS growing faster
than revenues
22
Our Business Model Will Continue to Deliver Strong, Sustainable Long-Term Growth
7-8%
>15% annually
MarketGrowth
Long-termEPS Growth
• Multiple top linegrowth drivers
• Leverage scale
1. Gain marketshare
2. Marginexpansion
23
Key Growth and Profit Drivers Going Forward
• Maintain high win rates– e.g. Courts >85%
• Expand relationships with existing clients
• Accelerate move to the cloud
• Expand e-filing and payments business
– recurring, high margins
• Continue to penetrate larger governments
• Continue to expand market share and margins
• Broaden product line through acquisitions and internal builds
• Expand transaction-based revenues– E-filing, on-line dispute resolution– Payments
• Strategic acquisitions, $15-$50M in revenues
• International opportunities
Near-Term: 1-3 Years
Longer-Term:
4-6 Years
24
A C L O S E R L O O K
Accelerating Our Move to the Cloud
Long-term Transition to Subscription
• Fastest growing revenue stream,+34% in 2019
• More than 50% of new software bookings
are SaaS, trending upward
• Entered into strategic collaboration
agreement with Amazon Web Services
in Q4 2019
• Driving innovation to optimize
products for the cloud
• Leveraging AWS to grow our cloud
capabilities
• Expanding long-term subscription margins
$0M
$50M
$100M
$150M
$200M
$250M
$300M
20052019
Subscription
Licenses
25
Revenues
Maintenance MaintenanceMaintenance
Maintenance
TransactionsTransactions
Transactions
TransactionsSaaS
SaaS
SaaS
SaaS
Q4 2016 Q4 2017 Q4 2018 Q4 2019
Annual Recurring Revenues Continue to Surge
+36%$560M+14%
26
$493M +22%
$636M+14%
$770M+21%
+39%
+24%
+29%
Note: Annual recurring revenues are calculated as non-GAAP revenues for the quarter multiplied by 4.
A C L O S E R L O O K
Leverage Scale, Expand Margins
Factors Driving Long-Term Margin Growth
• Changing revenue mix –more recurring revenues
• Highly leverageable model
– high margins for incremental license, subscription & maintenance revenues
– G&A expenses grow slower than revenues
– Significant increase in product investments, including acquisitions since 2017
28.2%26.6%
25.3%
35%+
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Goal
Tyler Blended OperatingMargin
(Non-GAAP (a))
A highly leverageable business
27
(a) 2007 through 2015 are reported under ASC 605. 2016 forward are under ASC 606.
Backlog Remains Strong → High Revenue Visibility
$340M$381M
$552M
$702M
$845M
$1,049M
$1,226M $1,247M
$1,458M$1,501M
2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q2020
Backlog of Signed Contracts (a)
Adding 20 new clients every week
28
+17%YOY
+17%YOY
(a) 2009 through 2015 are reported under ASC 605. 2016 forward are under ASC 606.
+19%YOY
$935M
$1,086M
2018 2019
2019 Results
Diluted EPS (2)
($)
Revenues (1)
($M)
$3.68$3.65
2018 2019
$4.80
(1) Non-GAAP Revenues exclude write-downs of acquisition-related deferred revenue and subleases.(2) Non-GAAP EPS excludes write-downs of acquisition-related deferred revenue and subleases, stock compensation expense, acquisition-
related costs, and amortization of acquisition intangibles.Please see reconciliation of non-GAAP measures to GAAP included in our press release filed with the SEC.
$5.30
+16.1% +10.4%
$1,091MNon-GAAP
GAAP GAAP
29
GAAP
GAAP
$940M
Non-GAAP
Non-GAAP Non-GAAP
(4)
I N S U M M A R Y
One of a Kind Company. Outgrowing a Growth Market.
Powerful business model
One of a kind company
Large untapped market
Multiple growth and profit drivers
1
2
3
4
Long-termSustained Growth
• EPS growth
averaging
~20% annually
30