AGB 2020.7 - Tyler Technologies (TYL)

Verticalized Software but with Underlying Market Growth

The Update to this initial write-up was posted on April 2025. The financial model can be found near the end of the update post.

Tyler Technologies

Tyler Technologies is the leading software vendor that focuses solely on the public sector in the U.S. At first glance, the growth and/or margin profile of the company may not seem as exciting as other high growth enterprise SaaS companies. But to fully appreciate the unique opportunity at Tyler, one must first understand the nuances of the public sector.

There are three main distinctions when selling to a public sector software customer:

(1) Most deals are a “rip and replace” of systems that are over 30 years old. The Bloomberg article, “America’s Cities Are Running on Software From the ’80s” published in February 2019 said it best.

“The only place in San Francisco still pricing real estate like it’s the 1980s is the city assessor’s office. Its property tax system dates back to the dawn of the floppy disk.”

(2) Public sector customers are not …