Tyler Technologies Spent $1.124 Billion On Buybacks In Nine Months, Much Of It Borrowed
Third-quarter earnings per share beat net income growth because the share count shrank, and a $1.44 billion convertible bond helped fund it.
Tyler Technologies, which makes software for governments, repurchased about $1.124 billion of its stock in the first nine months of 2026, a program funded in part by a new $1.44 billion convertible bond. The shrinking share count is a big reason third-quarter diluted earnings per share reached $2.33, up from $1.93, while net income rose from $84.4 million to $95.1 million.
Fewer shares, faster per-share growth
The 10-Q, filed Wednesday, says the nine-month repurchase figure excludes $19.9 million in accrued excise taxes and accrued repurchases. At the end of June, the prior quarterly report put repurchases at about $755.0 million for six months.
Weighted diluted shares fell to 40,731 thousand in the third quarter from 43,834 thousand a year earlier. Net income rose by roughly 13%, but per-share earnings rose faster because that denominator shrank.
The company's earnings release said revenue was $647.6 million, up 8.7%, with SaaS revenue up 21.2% and free cash flow at a quarterly record of $277.0 million. Chief Executive Lynn Moore pointed to the repurchase of about 8.5% of outstanding shares year to date.
Turning over the balance sheet
Tyler repaid a $600.0 million convertible note in cash at maturity on March 15. On May 14 it issued 0.50% convertible notes due 2031, with net proceeds of $1.41 billion, and used about $320.7 million that day to buy back 1,026,900 shares.
Shareholders' equity fell to $2.79 billion at September 30 from $3.70 billion at December 31. Cash dropped to $788.2 million from $1.02 billion, and the 2031 notes carried a net $1.41 billion on the balance sheet.
The notes convert at about $405.94 a share. The company says its average stock price stayed below that level, so they add no dilution to diluted earnings per share yet. Tyler also paid about $187.2 million for capped call contracts covering roughly 3.5 million shares, with a cap price of $655.77.
A government software business
Tyler sells software and services to federal, state and local agencies, earning money from subscriptions, maintenance and professional services. Subscriptions and maintenance made up 87% of its 2025 revenue, according to its annual report.
Subscription revenue rose 15.3% in the quarter, while maintenance fell 5% as clients moved from on-premises licences to cloud. It bought CODY Systems, a public safety software company, on July 30 for about $27.7 million in cash.
Buyback room left
The board added a $1.5 billion repurchase plan on July 24. About $1.334 billion of authorization remained as of Wednesday, per the 10-Q.
Tyler gave 2026 guidance of $2.535 billion to $2.565 billion in revenue and adjusted earnings of $12.95 to $13.20 per share.
Tyler holds its earnings call Thursday at 8:30 a.m. ET.
Sources
- 10-Q Filing — Tyler Technologies (TYL) — SEC EDGAR
- 10-Q Filing — Tyler Technologies (TYL), Q2 FY2026 filed 2026-07-29 (comparison basis) — SEC EDGAR
- Earnings release (8-K Item 2.02, a991earningsrelease-9302026.htm) — Tyler Technologies, filed 2026-10-28 — SEC EDGAR
- Tyler Technologies Non-GAAP EPS of $3.52 beats by $0.03, revenue of $647.6M misses by $4.38M (TYL:NYSE) | Seeking Alpha — seekingalpha.com
- Tyler Technologies (TYL) Positioned for Continued Value Creation — Yahoo Finance
- Tyler Technologies: Q3 Earnings Snapshot — Associated Press
- Tyler Tech. To Pay $1.5M To Settle NC ECourts Class Action - Law360 — law360.com
- TYL to Report Q3 Earnings: What's in the Cards for the Stock? — Yahoo Finance
