Item 16. FORM 10-K SUMMARY

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

						TYLER TECHNOLOGIES, INC.
Date: February 19, 2025						By:						/s/ H. Lynn Moore, Jr.
												H. Lynn Moore, Jr.
												President and Chief Executive Officer
												(principal executive officer)

POWER OF ATTORNEY

Know all persons by these presents, that each person whose signature appears below constitutes and appoints H. Lynn Moore, Jr. and Brian K. Miller, and each of them, as his attorney-in-fact, with the power of substitution, for him in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities indicated on February 19, 2025.

Pursuant to the requirements of the Securities Exchange Act of 1934, the following persons on behalf of the registrant and in the capacities and on the dates indicated have signed this report below.

Date: February 19, 2025						By:						/s/ John S. Marr, Jr.
												John S. Marr, Jr.
												Executive Chairman of the Board
												Director
Date: February 19, 2025						By:						/s/ H. Lynn Moore, Jr.
												H. Lynn Moore, Jr.
												President and Chief Executive Officer
												(principal executive officer)
Date: February 19, 2025						By:						/s/ Brian K. Miller
												Brian K. Miller
												Executive Vice President and Chief Financial Officer
												(principal financial officer)
Date: February 19, 2025						By:						/s/ Jason P. Durham
												Jason P. Durham
												Chief Accounting Officer
												(principal accounting officer)
Date: February 19, 2025						By:						/s/ Glenn A. Carter
												Glenn A. Carter
												Director
Date: February 19, 2025						By:						/s/ Margot L. Carter
												Margot L. Carter
												Director
Date: February 19, 2025						By:						/s/ Brenda A. Cline
												Brenda A. Cline
												Director
Date: February 19, 2025						By:						/s/ Ronnie D. Hawkins, Jr.
												Ronnie D. Hawkins, Jr.
												Director
Date: February 19, 2025						By:						/s/ Andrew D. Teed
												Andrew D. Teed
												Director
Date: February 19, 2025						By:						/s/ Daniel M. Pope
												Daniel M. Pope
												Director

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Tyler Technologies, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Tyler Technologies, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 19, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. We determined that there are no critical audit matters.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1966.

Dallas, Texas

February 19, 2025

F-1

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Tyler Technologies, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Tyler Technologies, Inc.’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Tyler Technologies, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

We also have audited, in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States) (the PCAOB) and in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 19, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the auditing standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Dallas, Texas

February 19, 2025

F-2

Tyler Technologies, Inc.

Consolidated Statements of Income

For the years ended December 31,

(In thousands, except per share amounts)

			2024						2023						2022
Revenues:
Subscriptions			$	1,342,931					$	1,159,512					$	1,012,304
Maintenance			463,132						466,661						468,455
Professional services			263,991						249,976						277,625
Software licenses and royalties			26,357						38,096						59,406
Hardware and other			41,392						37,506						32,414
Total revenues			2,137,803						1,951,751						1,850,204
Cost of revenues:
Subscriptions, maintenance and professional services			1,112,778						1,001,221						977,885
Software licenses and royalties			6,277						10,821						6,083
Amortization of software development			18,806						12,625						6,507
Amortization of acquired software			36,964						36,062						52,192
Hardware and other			27,217						29,923						23,674
Total cost of revenues			1,202,042						1,090,652						1,066,341
Gross profit			935,761						861,099						783,863
Sales and marketing expense			157,731						149,770						135,743
General and administrative expense			300,938						308,575						267,324
Research and development expense			117,939						109,585						105,184
Amortization of other intangibles			59,627						74,632						61,363
Operating income			299,526						218,537						214,249
Interest expense			(5,931)						(23,629)						(28,379)
Other income, net			14,572						3,328						1,723
Income before income taxes			308,167						198,236						187,593
Income tax provision			45,141						32,317						23,353
Net income			$	263,026					$	165,919					$	164,240
Earnings per common share:
Basic			$	6.17					$	3.95					$	3.95
Diluted			$	6.05					$	3.88					$	3.87

See accompanying notes.

F-3

Tyler Technologies, Inc.

Consolidated Statements of Comprehensive Income

For the years ended December 31,

(In thousands)

			2024						2023						2022
Net income			$	263,026					$	165,919					$	164,240
Other comprehensive income (loss), net of tax:
Securities available-for-sale and transferred securities:
Change in net unrealized holding gains (losses) on available-for-sale securities during the period			151						518						(850)
Reclassification adjustment of unrealized losses on securities transferred from held-to-maturity			—						—						(27)
Reclassification adjustment for net loss on sale of available-for-sale securities, included in net income			18						—						79
Other comprehensive income (loss), net of tax			169						518						(798)
Comprehensive income			$	263,195					$	166,437					$	163,442

See accompanying notes.

F-4

Tyler Technologies, Inc.

Consolidated Balance Sheets

(In thousands, except par value and share amounts)

			December 31, 2024						December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents			$	744,721					$	165,493
Accounts receivable (less allowance for losses and sales adjustments of $17,325 in 2024 and $22,829 in 2023)			587,634						619,704
Short-term investments			23,257						10,385
Prepaid expenses			65,135						54,700
Income tax receivable			11,975						—
Other current assets			8,057						10,303
Total current assets			1,440,779						860,585
Accounts receivable, long-term			7,153						8,988
Operating lease right-of-use assets			31,433						39,039
Property and equipment, net			163,775						169,720
Other assets:
Software development costs, net			76,117						67,124
Goodwill			2,531,653						2,532,109
Other intangibles, net			831,966						928,870
Non-current investments			10,758						7,046
Other non-current assets			86,381						63,182
			$	5,180,015					$	4,676,663
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable			$	156,817					$	146,339
Accrued liabilities			197,709						158,558
Operating lease liabilities			9,643						11,060
Current income tax payable			—						2,466
Deferred revenue			701,438						632,914
Current portion of term loans			—						49,801
Total current liabilities			1,065,607						1,001,138
Convertible senior notes due 2026, net			597,934						596,206
Deferred revenue, long-term			22,376						291
Deferred income taxes			47,503						78,590
Operating lease liabilities, long-term			30,791						39,822
Other long-term liabilities			27,382						22,621
Total liabilities			1,791,593						1,738,668
Commitments and contingencies			—						—
Shareholders' equity:
Preferred stock, $10.00 par value; 1,000,000 shares authorized; none issued			—						—
Common stock, $0.01 par value; 100,000,000 shares authorized; 48,147,969 shares issued in 2024 and 2023			481						481
Additional paid-in capital			1,539,301						1,354,787
Accumulated other comprehensive loss, net of tax			(157)						(326)
Retained earnings			1,866,799						1,603,773
Treasury stock, at cost; 5,184,092 and 5,858,476 shares in 2024 and 2023, respectively			(18,002)						(20,720)
Total shareholders' equity			3,388,422						2,937,995
			$	5,180,015					$	4,676,663

See accompanying notes.

F-5

Tyler Technologies, Inc.

Consolidated Statements of Cash Flows

For the years ended December 31

(In thousands)

			2024						2023						2022
Cash flows from operating activities:
Net income			$	263,026					$	165,919					$	164,240
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization			143,437						154,079						159,072
Losses from sale of investments			24						1						45
Share-based compensation expense			122,813						108,338						102,985
Provision (reductions in reserve) for losses and sales adjustments - accounts receivable			(5,504)						8,233						2,781
Amortization of operating lease right-of-use assets			8,932						16,688						12,969
Deferred income tax benefit			(30,663)						(73,704)						(87,192)
Other			207						475						—
Changes in operating assets and liabilities, exclusive of effects of acquired companies:
Accounts receivable			28,795						(39,878)						(51,410)
Income tax (payable) receivable			(14,441)						(41,201)						61,940
Prepaid expenses and other current assets			(29,775)						(19,668)						910
Accounts payable			10,509						41,485						(17,537)
Operating lease liabilities			(11,650)						(11,533)						(12,396)
Accrued liabilities			43,387						13,069						(24,344)
Deferred revenue			90,775						58,513						59,460
Other long-term liabilities			4,761						(376)						9,932
Net cash provided by operating activities			624,633						380,440						381,455
Cash flows from investing activities:
Additions to property and equipment			(20,535)						(20,519)						(22,529)
Purchase of marketable security investments			(32,448)						(10,617)						(29,935)
Proceeds and maturities from marketable security investments			15,994						49,412						71,034
Investment in software development			(29,401)						(32,490)						(27,622)
Cost of acquisitions, net of cash acquired			(1,395)						(62,759)						(163,921)
Other			173						13						443
Net cash used by investing activities			(67,612)						(76,960)						(172,530)
Cash flows from financing activities:
Payment on term loans			(50,000)						(345,000)						(360,000)
Payment of debt issuance costs			(2,637)						—						—
Proceeds from exercise of stock options, net of withheld shares for taxes upon equity award settlement			57,213						16,960						(890)
Contributions from employee stock purchase plan			17,631						16,196						16,651
Net cash provided (used) by financing activities			22,207						(311,844)						(344,239)
Net increase (decrease) in cash and cash equivalents			579,228						(8,364)						(135,314)
Cash and cash equivalents at beginning of period			165,493						173,857						309,171
Cash and cash equivalents at end of period			$	744,721					$	165,493					$	173,857

See accompanying notes.

F-6

			2024						2023						2022
Supplemental cash flow information:
Cash paid for interest			$	3,095					$	19,154					$	21,256
Cash paid for income taxes, net			84,204						142,820						38,490
Non-cash investing and financing activities:
Non-cash additions to property and equipment			$	254					$	3,123					$	169
Issuance of shares for acquisitions			—						5,675						18,169

F-7

Tyler Technologies, Inc.

Consolidated Statements of Shareholders’ Equity

For the years ended December 31, 2024, 2023, and 2022

(In thousands)

			Common Stock												Additional Paid-in Capital						Accumulated Other Comprehensive Income (Loss)						Retained Earnings						Treasury Stock												Total Shareholders' Equity
			Shares						Amount															Shares						Amount
Balance at December 31, 2021			48,148						$	481					$	1,075,650					$	(46)					$	1,273,614					(6,833)						$	(25,667)					$	2,324,032
Net income			—						—						—						—						164,240						—						—						164,240
Other comprehensive loss, net of tax			—						—						—						(798)						—						—						—						(798)
Exercise of stock options and vesting of restricted stock units			—						—						(3,218)						—						—						433						29,547						26,329
Employee taxes paid for withheld shares upon equity award settlement			—						—						—						—						—						(70)						(27,219)						(27,219)
Stock compensation			—						—						102,985						—						—						—						—						102,985
Issuance of shares pursuant to employee stock purchase plan			—						—						16,365						—						—						49						286						16,651
Issuance of shares for acquisitions			—						—						17,943						—						—						56						226						18,169
Balance at December 31, 2022			48,148						481						1,209,725						(844)						1,437,854						(6,365)						(22,827)						2,624,389
Net income			—						—						—						—						165,919						—						—						165,919
Other comprehensive income, net of tax			—						—						—						518						—						—						—						518
Exercise of stock options and vesting of restricted stock units			—						—						15,122						—						—						514						29,575						44,697
Employee taxes paid for withheld shares upon equity award settlement			—						—						—						—						—						(74)						(27,737)						(27,737)
Stock compensation			—						—						108,338						—						—						—						—						108,338
Issuance of shares pursuant to employee stock purchase plan			—						—						15,988						—						—						52						208						16,196
Issuance of shares for acquisitions			—						—						5,614						—						—						15						61						5,675
Balance at December 31, 2023			48,148						481						1,354,787						(326)						1,603,773						(5,858)						(20,720)						2,937,995
Net income			—						—						—						—						263,026						—						—						263,026
Other comprehensive income, net of tax			—						—						—						169						—						—						—						169
Exercise of stock options and vesting of restricted stock units			—						—						41,926						—						—						739						55,548						97,474
Employee taxes paid for withheld shares upon equity award settlement			—						—						—						—						—						(78)						(40,261)						(40,261)
Stock compensation			—						—						122,813						—						—						—						—						122,813
Issuance of shares pursuant to employee stock purchase plan			—						—						17,456						—						—						43						175						17,631
Reimbursement of shares from escrow			—						—						2,319						—						—						(30)						(12,744)						(10,425)
Balance at December 31, 2024			48,148						$	481					$	1,539,301					$	(157)					$	1,866,799					(5,184)						$	(18,002)					$	3,388,422

See accompanying notes.

F-8

Tyler Technologies, Inc.

Notes to Consolidated Financial Statements

(Tables in thousands, except per share data)

(1)SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

We provide integrated software systems and related services for the public sector. We develop and market a broad line of software solutions and services to address the information technology (“IT”) needs primarily of cities, counties, states, schools, federal agencies, and other government entities. We provide subscription-based services such as software as a service (“SaaS”), transaction-based fees primarily related to digital government services and online payment processing, and electronic document filing solutions (“e-filing”), which simplify the filing and management of court related documents. In addition, we provide professional IT services, including software and hardware installation, data conversion, training, and for certain clients, product modifications, along with continuing maintenance and support for clients using our solutions. Additionally, we provide property appraisal outsourcing services for taxing jurisdictions.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include our parent company and 62 subsidiaries, which are wholly-owned. All significant intercompany balances and transactions have been eliminated in consolidation. Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all components of net income (loss) and other comprehensive income (loss). During the twelve months ended December 31, 2024, 2023 and 2022, we had approximately $169,000 and $518,000 other comprehensive income, net of taxes, and $798,000 of other comprehensive loss, net of tax, from our available-for-sale investment holdings, respectively.

USE OF ESTIMATES

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include revenue recognition, determining the nature and timing of satisfaction of performance obligations and loss contingencies; the recoverability of goodwill and other intangible assets and estimated useful lives of intangible assets; and determining the potential outcome of future tax consequences of events that have been recognized on our consolidated financial statements or tax returns. Actual results could differ from estimates.

CASH AND CASH EQUIVALENTS

Cash in excess of that necessary for operating requirements is invested in short-term, highly liquid, income-producing investments. Investments with original maturities of three months or less are classified as cash and cash equivalents, which primarily consist of cash on deposit with several banks and money market funds. Cash and cash equivalents are stated at cost, which approximates market value.

REVENUE RECOGNITION

Nature of Products and Service

We account for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. We earn the majority of our revenues from subscription-based services and post-contract client support (“PCS” or “maintenance”). Other sources of revenue are professional services, software licenses and royalties, and hardware and other. Revenue is recognized upon transfer of control of promised products or services to clients in an amount that reflects the consideration we expect to receive in exchange for those products or services. We determine revenue recognition through the following steps:

• Identification of the contract, or contracts, with a client

• Identification of the performance obligations in the contract

• Determination of the transaction price

• Allocation of the transaction price to the performance obligations in the contract

• Recognition of revenue when, or as, we satisfy a performance obligation

F-9

Our software arrangements with clients contain multiple performance obligations that range from software licenses, installation, training, consulting, software modification and customization to meet specific client needs; hosting; and PCS. For these contracts, we account for individual performance obligations separately when they are distinct. We evaluate whether separate performance obligations can be distinct or should be accounted for as one performance obligation. Arrangements that include professional services, such as training or installation, are evaluated to determine whether those services are highly interdependent or interrelated to the product’s functionality. The transaction price is allocated to the distinct performance obligations on a relative standalone selling price (“SSP”) basis. We determine the SSP based on our overall pricing objectives, taking into consideration market conditions and other factors, including the value of our contracts, the applications sold, client demographics, and the number and types of users within our contracts.

For arrangements that involve significant production, modification, or customization of the software, or where professional services otherwise cannot be considered distinct, we recognize revenue as control is transferred to the client over time using progress-to-completion methods. Depending on the contract, we measure progress-to-completion primarily using labor hours incurred. Amounts recognized in revenue are calculated using the progress-to-completion measurement after giving effect to any changes in our cost estimates. Changes to total estimated contract costs, if any, are recorded in the period they are determined. Estimated losses on uncompleted contracts are recorded in the period in which we first determine that a loss is apparent.

Revenue is recognized net of allowances for losses and sales adjustments and any taxes collected from clients, which are subsequently remitted to governmental authorities.

Subscription-Based Services

Subscription-based services consist primarily of revenues derived from SaaS arrangements and transaction-based fees. For SaaS arrangements, we evaluate whether the client has the contractual right to take possession of our software at any time during the hosting period without significant penalty and whether the client can feasibly maintain the software on the client’s hardware or enter into another arrangement with a third party to host the software. We recognize SaaS services ratably over the term of the arrangement, which range from one to 10 years, but are typically for periods of generally one to three years. For professional services associated with certain SaaS arrangements, we have concluded that the services are not distinct, and we recognize the revenue ratably over the remaining contractual period once we have provided the client access to the software.

Transaction-based fees primarily relate to digital government services and online payment services, which are sometimes offered with the assistance of third-party vendors. When we are the principal in a transaction, we record the revenue and related costs on a gross basis. Otherwise, we net the cost of revenue associated with the service against the gross revenue (amount billed to the client) and record the net amount as revenue.

For transaction-based revenues from digital government services and online payments, we have the right to charge the client an amount that directly corresponds with the value to the client of our performance to date. Therefore, we recognize revenues for these services over time based on the amount billable to the client. In some cases, we are paid on a fixed fee basis and recognize the revenue ratably over the contractual period. Typically, the structure of our arrangements does not give rise to variable consideration. However, in those instances whereby variable consideration exists, we include in our estimates, additional revenues for variable consideration when we believe we have an enforceable right, the amount can be estimated reliably and its realization is probable.

Costs of performing services under subscription-based arrangements are expensed as incurred, except for certain direct and incremental contract origination associated with SaaS arrangements. Such direct and incremental costs are capitalized and amortized ratably over the period of benefit.

Post-Contract Client Support (Maintenance)

Our clients generally enter into PCS agreements when they purchase our software licenses. PCS includes telephone support, bug fixes, and rights to upgrades on a when-and-if available basis. PCS is considered distinct when purchased with our software licenses. Our PCS agreements are typically renewable annually. PCS is recognized over time on a straight-line basis over the period the PCS is provided. All significant costs and expenses associated with PCS are expensed as incurred.

Professional Services

When professional services are distinct, the fee allocable to the service element is recognized over the time we perform the services and is billed on a time and material or milestone basis. Contract fees are typically billed on a milestone basis as defined within contract terms. We record amounts that have been invoiced in accounts receivable and in deferred revenue or revenues, depending on whether the revenue recognition criteria have been met.

F-10

Software Licenses and Royalties

Many of our software arrangements involve “off-the-shelf” software. We recognize the revenue allocable to “off-the-shelf” software licenses and specified upgrades at a point in time when control of the software license transfers to the client, unless the software is not considered distinct. We consider “off-the-shelf” software to be distinct when it can be added to an arrangement with minor changes in the underlying code, it can be used by the client for the client’s purpose upon installation, and remaining services such as training are not considered highly interdependent or interrelated to the product's functionality. For arrangements that involve significant production, modification or customization of the software, or where professional services are otherwise not considered distinct, we recognize revenue over time by measuring progress-to-completion.

Software license fees are billed in accordance with the contract terms. Typically, a majority of the fee is due when access to the software license is made available to the client and the remainder of the fee is due over a passage of time stipulated by the contract.

We recognize royalty revenue when the sale occurs under the terms of our third-party royalty arrangements. Currently, our third-party royalties are recognized on an estimated basis and adjusted if needed, when we receive notice of amounts we are entitled to receive. We typically receive notice of royalty revenue we are entitled to and amounts are billed on a quarterly basis in the quarter immediately following the royalty reporting period, and adjustments have not been significant.

Computer Hardware Equipment

Revenue allocable to computer hardware equipment is recognized at a point in time when control of the equipment is transferred to the client.

Refer to Note 3 - “Disaggregation of Revenue” for further information, including the economic factors that affect the nature, amount, and uncertainty of revenues and cash flows of our various revenue categories.

Contract Balances

Accounts receivable and allowance for losses and sales adjustments

Timing of revenue recognition may differ from the timing of invoicing to clients. We record an unbilled receivable when revenue is recognized prior to invoicing, or deferred revenue when invoicing occurs prior to revenue recognition. For multi-year agreements, we generally invoice clients annually at the beginning of each annual coverage period.

In connection with certain professional services contracts, we may perform work prior to when the software and services are billable and/or payable pursuant to the contract. Unbilled revenue is not billable at the balance sheet date but is recoverable over the remaining life of the contract through billings made in accordance with contractual agreements. The termination clauses in most of our contracts provide for the payment for the value of products delivered or services performed in the event of early termination. We have historically recorded such unbilled receivables (costs and estimated profit in excess of billings) in connection with (1) professional services contracts accounted for using progress-to-completion method of revenue recognition using labor hours as a measure of progress towards completion in which the services are performed in one accounting period but the billing for the software element of the arrangement may be based upon the specific phase of the implementation; (2) software revenue for which we have recognized revenue at the point in time when the software is made available to the client but the billing has not yet been submitted to the client; (3) some of our contracts which provide for an amount to be withheld from a progress billing (generally between 5% and 15% retention) until final and satisfactory project completion is achieved; and (4) in a limited number of cases, extended payment terms, which may be granted to clients with whom we generally have a long-term relationship and favorable collection history.

Accounts receivable is as follows:

			Years ended December 31,
			2024						2023
Accounts receivable - current			$	587,634					$	619,704
Accounts receivable - long term			7,153						8,988
Total accounts receivable			$	594,787					$	628,692

F-11

Total accounts receivable, including total current and long-term accounts receivable, net of allowance for losses and sales adjustments, was $594.8 million and $628.7 million, at December 31, 2024, and December 31, 2023, respectively. We have recorded unbilled receivables of $115.6 million and $119.2 million at December 31, 2024, and December 31, 2023, respectively. Unbilled receivables expected to be collected within one year have been included with the current portion of accounts receivable in the accompanying consolidated balance sheets. Unbilled receivables and retention receivables expected to be collected past one year have been included with long-term portion of accounts receivable in the accompanying consolidated balance sheets. Included in unbilled receivables are retention receivables of $11.4 million and $9.8 million at December 31, 2024, and December 31, 2023, respectively, which become payable upon the completion of the contract or completion of our fieldwork and formal hearings.

Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 90 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide clients with simplified and predictable ways of purchasing our products and services, not to receive financing from our clients or to provide clients with financing. Examples include invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period, and multi-year on-premises term licenses that are invoiced annually with revenue recognized upfront.

We maintain allowances for losses and sales adjustments, which losses are recorded against revenue at the time the loss is incurred. Because most of our clients are domestic governmental entities, we rarely incur a credit loss resulting from the inability of a client to make required payments. Consequently, we have not recorded a reserve for credit losses. Events or changes in circumstances that indicate the carrying amount for the allowances for losses and sales adjustments may require revision, include, but are not limited to, managing our client’s expectations regarding the scope of the services to be delivered and defects or errors in new versions or enhancements of our software products. Our allowances for losses and sales adjustments are $17.3 million and $22.8 million at December 31, 2024, and December 31, 2023, respectively.

The following table summarizes the changes in the allowance for losses and sales adjustments:

			Years ended December 31,
			2024						2023
Balance at beginning of year			$	22,829					$	14,761
Provisions (reductions in reserve) for losses and sales adjustments - accounts receivable			(5,504)						8,233
Collections of accounts previously written off			—						(165)
Balance at end of year			$	17,325					$	22,829

Deferred Revenue

The majority of deferred revenue consists of deferred subscription-based services revenue that has been billed based on contractual terms in the underlying arrangement, with the remaining balance consisting of payments received in advance of revenue being earned under maintenance, software licensing, professional services, and hardware installation. Refer to Note 4 - “Deferred Revenue and Performance Obligations” for further information, including deferred revenue by segment and changes in deferred revenue during the period.

Deferred Commissions

Sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a client. Sales commissions for initial contracts are deferred and then amortized commensurate with the recognition of associated revenue over a period of benefit that we have determined to be generally three to seven years. We utilize the “portfolio approach” practical expedient, which allows entities to apply the guidance to a portfolio of contracts with similar characteristics because the effects on the financial statements of this approach would not differ materially from applying the guidance to individual contracts. Using the “portfolio approach”, we determine the period of benefit by taking into consideration our client contracts, our technology life-cycle and other factors. Sales commissions for renewal contracts are generally not paid in connection with the renewal of a contract. In the small number of instances where a commission is paid on a renewal, it is not commensurate with the commission paid on the initial sale and is recognized over the term of renewal, which is generally one year.

Deferred commissions have been included with prepaid expenses for the current portion and non-current other assets for the long-term portion in the accompanying consolidated balance sheets. Amortization expense related to deferred commissions is included in sales and marketing expense in the accompanying consolidated statements of income. There were no indicators of impairment in relation to the costs capitalized for the periods presented. Refer to Note 5 - “Deferred Commissions” for further information.

F-12

INCOME TAXES

Income taxes are accounted for under the asset and liability method. Deferred taxes arise because of different treatment between financial statement accounting and tax accounting, known as “temporary differences”. We record the tax effect of these temporary differences as “deferred tax assets” (generally items that can be used as a tax deduction or credit in the future periods) and “deferred tax liabilities” (generally items that we received a tax deduction for, which have not yet been recorded in the income statement). The deferred tax assets and liabilities are measured using enacted tax rules and laws that are expected to be in effect when the temporary differences are expected to be recovered or settled. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that a deferred tax asset will not be “realized”.

We do not recognize a tax benefit for uncertain tax positions unless management’s assessment concludes that it is “more likely than not” that the position is sustainable based on its technical merits. If the recognition threshold is met, we recognize a tax benefit based upon the largest amount of the tax benefit that is more likely than not probable, determined by cumulative probability of being realized upon settlement with the taxing authority. We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense in the consolidated statements of income.

SHARE-BASED COMPENSATION

We have a share-based award plan that provides for the grant of stock options, restricted stock units, and performance share units to key employees, directors and non-employee consultants. Stock options generally vest after three to five years of continuous service from the date of grant and have a contractual term of 10 years. Restricted stock unit grants generally vest ratably over three to five years of continuous service from the date of grant. Each performance share unit represents the right to receive one share of our common stock based on our achievement of certain financial performance targets during applicable performance periods, which generally cliff vest in one or three years. We account for share-based compensation utilizing the fair value recognition pursuant to ASC 718, Stock Compensation. See Note 14, “Share-Based Compensation,” for further information.

BUSINESS COMBINATIONS

Accounting for the acquisition of a business requires the allocation of the purchase price to the various assets acquired and liabilities assumed at their respective fair values. The determination of fair value requires the use of significant estimates and assumptions, and in making these determinations, management uses all available information.

For tangible and identifiable intangible assets acquired in a business combination, management estimates the fair value of assets acquired and liabilities assumed based on quoted market prices, the carrying value of the acquired assets and widely accepted valuation techniques, including discounted cash flows and market multiple analyses. The assumptions made in performing these valuations include, but are not limited to, discount rates, future revenues and operating costs, projections of capital costs, and other assumptions believed to be consistent with those used by principal market participants.

Due to the specialized nature of these calculations, we engage third-party specialists to assist management in evaluating our assumptions as well as appropriately measuring the fair value of assets acquired and liabilities assumed. We adjust the preliminary purchase price allocation, as necessary, up to one year after the acquisition closing date as we obtain new information about facts and circumstances that existed as of the closing date. If actual results are materially different than the assumptions we used to determine fair value of the assets acquired and liabilities assumed as well as the estimated useful lives of the intangible assets acquired through a business combination, it is possible that adjustments to the carrying values of such assets and liabilities will have a material impact on our financial position and results of operations. See Note 6 , “Acquisitions,” for further information.

Contingent future cash payments related to acquisitions are recognized at fair value as of the acquisition date and included in the determination of the acquisition date purchase price. Subsequent changes in the fair value of the contingent future cash payments are recognized in earnings in the period that the change occurs. We have no contingent consideration outstanding as of December 31, 2024.

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

We perform an impairment assessment annually on October 1, or more frequently if indicators of potential impairment exist, which includes evaluating qualitative and quantitative factors to assess the likelihood of an impairment of each reporting unit’s goodwill. If the conclusion of an impairment assessment is that it is more likely than not that the fair value of the reporting unit is more than its carrying value, goodwill is not considered impaired, and we are not required to perform the quantitative goodwill impairment test. If the conclusion of an impairment assessment is that it is more likely than not that the fair value is less than its carrying value, we perform the quantitative goodwill impairment test, which compares the fair value of the reporting unit to its carrying value. Impairments, if any, are based on the excess of the carrying amount over the fair value.

F-13

There have been no impairments to goodwill in any of the periods presented. See Note 8, “Goodwill and Other Intangible Assets,” for additional information.

Other Intangible Assets

We make judgments about the recoverability of purchased intangible assets other than goodwill whenever events or changes in circumstances indicate that an impairment may exist. Client base and acquired software each comprise approximately half of our purchased intangible assets other than goodwill. We review our client turnover each year for indications of impairment. Our client turnover has historically been very low. If indications of impairment are determined to exist, we measure the recoverability of assets by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the assets exceeds their estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the assets exceeds the fair value of the assets. There have been no impairments of intangible assets in any of the periods presented.

PROPERTY AND EQUIPMENT, NET

Property, equipment and purchased software are recorded at original cost and increased by the cost of any significant improvements after purchase. We expense maintenance and repairs when incurred. Depreciation and amortization is calculated using the straight-line method over the shorter of the asset’s estimated useful life or the term of the lease in the case of leasehold improvements.

To assess potential impairment, we periodically evaluate whether current facts or circumstances indicate that the carrying value of our property and equipment or other long-lived assets to be held and used may not be recoverable. If such circumstances are determined to exist, we measure the recoverability of assets to be held and used by a comparison of the carrying amount of the asset or appropriate grouping of assets and the estimated undiscounted future cash flows expected to be generated by the assets. If the carrying amount of the assets exceeds their estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the assets exceeds the fair value of the assets. There was no impairment of long-lived assets in any of the periods presented.

SOFTWARE DEVELOPMENT COSTS

Software development costs primarily consist of personnel costs. We capitalize software development costs upon the establishment of technological feasibility and prior to the availability of the product for general release to clients for software sold to third parties and capitalize application development stage costs of software developed for internal use. During the twelve months period ended December 31, 2024, 2023, and 2022, respectively, we capitalized approximately $29.4 million, $32.5 million, and $27.6 million of software development costs. We begin to amortize capitalized costs when a product is available for general release to clients or when internal use software is ready for its intended use. Amortization expense is determined on a product-by-product basis at a rate not less than straight-line basis over the software’s remaining estimated economic life of, generally, three to seven years.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs are expensed as incurred and include compensation costs for engineering and product management personnel, third-party contractor expenses, software development tools and other expenses related to researching and developing new solutions or upgrading and enhancing existing solutions that do not qualify for capitalization, and allocated depreciation, facilities and IT support costs. We expensed research and development costs of $117.9 million in 2024, $109.6 million in 2023, and $105.2 million in 2022.

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, accounts receivable from trade clients, and investments in marketable securities. Our cash and cash equivalents primarily consist of operating account balances and money market funds, which are maintained at several major domestic financial institutions and the balances often exceed insured amounts. As of December 31, 2024, we had cash and cash equivalents of $744.7 million. We perform periodic evaluations of the credit standing of these financial institutions.

Concentrations of credit risk with respect to receivables are limited due to the size and geographical diversity of our client base. As a result, we do not believe we have any significant concentrations of credit risk as of December 31, 2024.

LEASES

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities, current and long-term, on our consolidated balance sheets. We currently do not have any finance lease arrangements.

F-14

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date of the lease in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and initial direct costs incurred less lease incentives received. Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for as a single lease component.

INDEMNIFICATION

Most of our software license agreements indemnify our clients in the event that the software sold infringes upon the intellectual property rights of a third party. These agreements typically provide that in such event we will either modify or replace the software so that it becomes non-infringing or procure for the client the right to use the software. We have not recorded a liability associated with these indemnifications, as we are not aware of any pending or threatened infringement actions that are possible losses. We believe the estimated fair value of these intellectual property indemnification clauses is minimal.

We have also agreed to indemnify certain officers and our Board members if they are named or threatened to be named as a party to any proceeding by reason of the fact that they acted in such capacity. We maintain directors’ and officers’ liability insurance coverage to protect against any such losses. We have not recorded a liability associated with these indemnifications. Because of our insurance coverage, we believe the estimated fair value of these indemnification agreements is minimal.

RECENT ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS

In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07 - Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. ASU 2023-07 enhances the disclosures required for reportable segments in annual and interim consolidated financial statements. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption is permitted. As of December 31, 2024, we adopted the new standard which has been applied retrospectively by the Company. This change did not have a significant impact on the Company’s financial statements and disclosures. See Note 2, “Segment and Related Information,” for further discussion.

NEW ACCOUNTING PRONOUNCEMENTS

In January 2025, the FASB issued ASU 2025-01 - Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. This update clarifies that all public business entities must adopt the guidance in ASU 2024-03 for annual reporting periods beginning after December 15, 2026, and for interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. This guidance is not expected to have a material impact on the Company’s financial statements.

In November 2024, the FASB issued ASU 2024-04 - Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. This guidance clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. It is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods, with early adoption permitted. This guidance is not expected to have a material impact on the Company’s financial statements.

In November 2024, the FASB issued ASU 2024-03 - Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This guidance requires public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. It is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. This guidance is not expected to have a material impact on the Company’s financial statements.

In December 2023, the FASB issued ASU 2023-09 - Income Taxes (Topic ASC 740) Income Taxes. The ASU improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 with early adoption permitted. This guidance is not expected to have a material impact on the Company’s financial statements.

F-15

(2)SEGMENT AND RELATED INFORMATION

Reportable operating segments are determined based on the Company’s management approach. The management approach, as defined by FASB ASC 280 “Segment Reporting” is based on the way that the Chief Operating Decision Maker (“CODM”) organizes the segments within an enterprise for making decisions about resources to be allocated and assessing their performance. Our CODM, for purposes of FASB ASC 280, is our Chief Executive Officer.

We report our results in two reportable segments. Our reportable segments are organized on the basis of a combination of the products and services they deliver to clients and the function the public sector client performs. Business units that have met the aggregation criteria have been combined into our two reportable segments. The Enterprise Software (“ES”) reportable segment provides public sector entities with software systems and services to meet their information technology and automation needs for mission-critical “back-office” functions such as: public administration solutions, courts and public safety solutions, education solutions, and property and recording solutions. The Platform Technologies (“PT”) reportable segment provides public sector entities with platform and transformative solutions including digital solutions, payment processing, streamlined data processing, and improved operations and workflows.

The primary financial measures used by the CODM for assessing performance and allocating resources are segment income or loss from operations. The CODM uses segment income or loss from operations before income taxes, not including gains and losses on investments, to allocate resources (including employees, property, and financial or capital resources) for each segment predominantly in the annual budget and forecasting process. Segment gross profit for our operating segments units is defined as gross profit before non-cash amortization of acquired software associated with acquisitions. Segment operating income for our reportable segments is defined as income before non-cash amortization of intangible assets associated with their acquisitions, interest expense, and income taxes. During the fiscal periods presented, we had no significant transaction between reportable segments. Corporate segment operating loss primarily consists of compensation costs for the executive management team, certain shared services staff, and share-based compensation expense for the entire company. Corporate segment operating loss also includes revenues and expenses related to a company-wide user conference. The accounting policies of the reportable segments are the same as those described in Note 1, “Summary of Significant Accounting Policies”.

Segment assets primarily consist of net accounts receivable, prepaid expenses and other current assets, and net property and equipment and software development costs. Corporate assets primarily consist of cash and investments, prepaid insurance, intangibles associated with acquisitions, deferred income taxes, and net property and equipment mainly related to unallocated information and technology assets. Certain presentation items from previous years have been adjusted to conform with current year presentation.

For the year ended December 31, 2024			Enterprise Software						Platform Technologies						Corporate												Totals
Revenues
Subscriptions:
SaaS			$	559,842					$	84,937					$	—											$	644,779
Transaction-based fees			234,633						463,519						—												698,152
Maintenance			438,455						24,677						—												463,132
Professional services			219,933						44,058						—												263,991
Software licenses and royalties			25,292						1,065						—												26,357
Hardware and other			33,447						992						6,953												41,392
Total revenues			1,511,602						619,248						6,953												2,137,803
Cost of revenues excluding amortization of acquired software			706,952						411,351						46,775												1,165,078
Segment gross profit			804,650						207,897						(39,822)												972,725
Sales and marketing expense			109,981						21,618						26,132												157,731
General and administrative expense			48,072						57,627						195,239												300,938
Research and development expense			100,182						12,126						5,631												117,939
Segment operating income			546,415						116,526						(266,824)												396,117
Depreciation and amortization expense			37,179						89,372						16,886												143,437
Software development expenditures			7,612						15,558						6,231												29,401
Capital expenditures			15,283						4,168						1,084												20,535
Segment assets			$	572,224					$	416,635					$	4,191,156											$	5,180,015

F-16

For the year ended December 31, 2023			Enterprise Software						Platform Technologies						Corporate												Totals
Revenues
Subscriptions:
SaaS			$	459,544					$	68,433					$	—											$	527,977
Transaction-based fees			174,718						456,817						—												631,535
Maintenance			442,781						23,880						—												466,661
Professional services			209,727						40,249						—												249,976
Software licenses and royalties			32,709						5,387						—												38,096
Hardware and other			30,176						—						7,330												37,506
Total revenues			1,349,655						594,766						7,330												1,951,751
Cost of revenues excluding amortization of acquired software			653,407						368,017						33,166												1,054,590
Segment gross profit			696,248						226,749						(25,836)												897,161
Sales and marketing expense			102,325						25,196						22,249												149,770
General and administrative expense			57,481						64,406						186,688												308,575
Research and development expense			92,686						12,701						4,198												109,585
Segment operating income			443,756						124,446						(238,971)												329,231
Depreciation and amortization expense			25,445						110,354						18,280												154,079
Software development expenditures			6,619						15,840						10,031												32,490
Capital expenditures			16,788						2,380						1,351												20,519
Segment assets			$	631,117					$	426,064					$	3,619,482											$	4,676,663

For the year ended December 31, 2022			Enterprise Software						Platform Technologies						Corporate												Totals
Revenues
Subscriptions:
SaaS			$	378,953					$	49,573					$	—											$	428,526
Transaction-based fees			147,370						436,408																		583,778
Maintenance			444,143						24,312						—												468,455
Professional services			204,970						72,655						—												277,625
Software licenses and royalties			55,158						4,248						—												59,406
Hardware and other			26,592						—						5,822												32,414
Total revenues			1,257,186						587,196						5,822												1,850,204
Cost of revenues excluding amortization of acquired software			606,379						370,571						37,199												1,014,149
Segment gross profit			650,807						216,625						(31,377)												836,055
Sales and marketing expense			100,786						23,224						11,733												135,743
General and administrative expense			39,083						61,191						167,050												267,324
Research and development expense			92,162						8,919						4,103												105,184
Segment operating income			418,776						123,291						(214,263)												327,804
Depreciation and amortization expense			55,389						84,609						19,074												159,072
Software development expenditures			3,790						14,581						9,251												27,622
Capital expenditures			8,972						6,845						6,712												22,529
Segment assets			$	636,377					$	362,610					$	3,688,430											$	4,687,417

F-17

Reconciliation of reportable segment gross profit to the Company's consolidated totals:			Years Ended December 31,
			2024						2023						2022
Segment gross profit			$	972,725					$	897,161					$	836,055
Amortization of acquired software			(36,964)						(36,062)						(52,192)
Gross profit			$	935,761					$	861,099					$	783,863

Reconciliation of reportable segment operating income to the Company's consolidated totals:			Years Ended December 31,
			2024						2023						2022
Total segment operating income			$	396,117					$	329,231					$	327,804
Amortization of acquired software			(36,964)						(36,062)						(52,192)
Amortization of other intangibles			(59,627)						(74,632)						(61,363)
Interest expense			(5,931)						(23,629)						(28,379)
Other income, net			14,572						3,328						1,723
Income before income taxes			$	308,167					$	198,236					$	187,593

(3)DISAGGREGATION OF REVENUE

The tables below show disaggregation of revenue into categories that reflect how economic factors affect the nature, amount, timing, and uncertainty of revenues and cash flows.

Recurring Revenues

The majority of our revenues are comprised of revenues from subscriptions and maintenance, which we consider to be recurring revenues. Subscriptions revenues primarily consist of revenues derived from our SaaS arrangements and transaction-based fees. These revenues are considered recurring because revenues from these sources are expected to re-occur in similar annual amounts for the term of our relationship with the client. Transaction-based fees are generally the result of multi-year contracts with our clients that result in fees generated by payment transactions and digital government services and are collected on a recurring basis during the contract term. The contract terms for subscription arrangements range from one to 10 years but are typically contracted for initial periods of one to three years. Nearly all of our on-premises software clients contract with us for maintenance and support. Maintenance and support are generally provided under auto-renewing annual contracts or multi-year contracts. We consider all other revenue categories to be non-recurring revenues.

Recurring revenues and non-recurring revenues recognized during the period are as follows:

For the year ended December 31, 2024			Enterprise Software						Platform Technologies						Corporate						Totals
Revenue:
Subscriptions:
SaaS			$	559,842					$	84,937					$	—					$	644,779
Transaction-based fees			234,633						463,519						—						698,152
Maintenance			438,455						24,677						—						463,132
Total recurring revenues			1,232,930						573,133						—						1,806,063
Professional services			219,933						44,058						—						263,991
Software licenses and royalties			25,292						1,065						—						26,357
Hardware and other			33,447						992						6,953						41,392
Total non-recurring revenues			278,672						46,115						6,953						331,740
Total revenues			$	1,511,602					$	619,248					$	6,953					$	2,137,803

F-18

For the year ended December 31, 2023			Enterprise Software						Platform Technologies						Corporate						Totals
Revenue:
Subscriptions:
SaaS			$	459,544					$	68,433					$	—					$	527,977
Transaction-based fees			174,718						456,817						—						631,535
Maintenance			442,781						23,880						—						466,661
Total recurring revenues			1,077,043						549,130						—						1,626,173
Professional services			209,727						40,249						—						249,976
Software licenses and royalties			32,709						5,387						—						38,096
Hardware and other			30,176						—						7,330						37,506
Total non-recurring revenues			272,612						45,636						7,330						325,578
Total revenues			$	1,349,655					$	594,766					$	7,330					$	1,951,751

For the year ended December 31, 2022			Enterprise Software						Platform Technologies						Corporate						Totals
Revenue:
Subscriptions:
SaaS			$	378,953					$	49,573					$	—					$	428,526
Transaction-based fees			147,370						436,408						—						583,778
Maintenance			444,143						24,312						—						468,455
Total recurring revenues			970,466						510,293						—						1,480,759
Professional services			204,970						72,655						—						277,625
Software licenses and royalties			55,158						4,248						—						59,406
Hardware and other			26,592						—						5,822						32,414
Total non-recurring revenues			286,720						76,903						5,822						369,445
Total revenues			$	1,257,186					$	587,196					$	5,822					$	1,850,204

(4)DEFERRED REVENUE AND PERFORMANCE OBLIGATIONS

Total deferred revenue, including long-term, by segment is as follows:

			December 31, 2024						December 31, 2023
Enterprise Software			$	683,909					$	589,295
Platform Technologies			36,117						39,597
Corporate			3,788						4,313
Totals			$	723,814					$	633,205

Changes in total deferred revenue, including long-term, were as follows:

			2024
Balance at beginning of year			$	633,205
Deferral of revenue			1,514,168
Recognition of deferred revenue			(1,423,559)
Balance at end of year			$	723,814

F-19

Remaining Performance Obligations

We expect to recognize as revenue approximately 97% of our deferred revenue balance as of December 31, 2024, in the next 12 months, and the remainder thereafter. We believe the portion of transaction price allocated to the remaining performance obligations which is not included in our deferred revenue balance is not a meaningful indicator of future revenue due to contracts with transaction-based fees that vary with transaction activity, the variability in subscription term lengths, and termination provisions included in some contracts that limit inclusion and cause variability from period to period.

(5)DEFERRED COMMISSIONS

Deferred commissions are as follows:

						December 31, 2024						December 31, 2023
Prepaid commissions						$	18,037					$	18,262
Long-term deferred commissions						38,762						30,924
Total deferred commissions						$	56,799					$	49,186

Amortization expense related to deferred commissions is as follows:

			Years Ended December 31,
			2024						2023						2022
Amortization expense			$	19,916					$	18,589					$	15,448

(6)ACQUISITIONS

2024

We did not complete any new acquisitions during twelve months ended December 31, 2024.

In 2024, the Company settled certain fully indemnified matters related to two acquisitions completed in prior years resulting in the reimbursement of shares of our common stock from escrow for $10.4 million.

In 2024, we also paid $1.4 million in cash for holdbacks related to other acquisitions completed in 2023.

2023

On October 31, 2023, we acquired Resource Exploration, Inc. (“ResourceX”), a leading provider of budgeting software to the public sector. The total purchase price, net of cash acquired of $48,000, was approximately $16.3 million, consisting of $9.1 million paid in cash, $5.7 million of common stock and $1.5 million related to working capital and indemnity holdbacks, subject to certain post-closing adjustments.

We performed a valuation analysis of the fair market value of ResourceX’s assets and liabilities. In connection with this transaction, we acquired total tangible assets of $388,000 and assumed liabilities of approximately $901,000. We recorded goodwill of approximately $10.0 million, none of which is expected to be deductible for tax purposes, and other identifiable intangible assets of approximately $7.6 million. The goodwill arising from this acquisition is primarily attributed to our ability to generate increased revenues, earnings and cash flow by expanding our addressable market and client base. The intangible assets of $7.6 million are primarily attributable to client relationships and acquired software and will be amortized over a weighted average period of approximately nine years. We recorded net deferred tax liabilities of $748,000 related to the tax effect of our estimated fair value allocations.

On October 31, 2023, we acquired ARInspect, Inc. (“ARInspect”), a leading provider of AI powered machine learning solutions for public sector field operations. The total purchase price, net of cash acquired of $1.0 million, was approximately $20.5 million, consisting of $19.1 million paid in cash and $2.4 million related to working capital and indemnity holdbacks, subject to certain post-closing adjustments.

F-20

We performed a valuation analysis of the fair market value of ARInspect’s assets and liabilities. In connection with this transaction, we acquired total tangible assets of $1.8 million and assumed liabilities of approximately $1.5 million. We recorded goodwill of approximately $13.6 million, none of which is expected to be deductible for tax purposes, and other identifiable intangible assets of approximately $10.0 million. The goodwill arising from this acquisition is primarily attributed to our ability to generate increased revenues, earnings and cash flow by expanding our addressable market and client base. The intangible assets of $10.0 million are primarily attributable to client relationships and acquired software and will be amortized over a weighted average period of approximately 12 years. We recorded net deferred tax liabilities of $2.5 million related to the tax effect of our estimated fair value allocations.

On August 8, 2023, we acquired Computing System Innovations, LLC (“CSI”), a leading provider of artificial intelligence automation, redaction, and indexing solution for courts, recorders, attorneys, and others. The total purchase price, net of cash acquired of $415,000, was approximately $36.2 million, consisting of $33.4 million paid in cash and $3.3 million related to working capital and indemnity holdbacks, subject to certain post-closing adjustments.

We performed a valuation analysis of the fair market value of CSI’s assets and liabilities. In connection with this transaction, we acquired total tangible assets of $1.2 million and assumed liabilities of approximately $2.4 million. We recorded goodwill of approximately $19.4 million, all of which is expected to be deductible for tax purposes, and other identifiable intangible assets of approximately $18.5 million. The goodwill arising from this acquisition is primarily attributed to our ability to generate increased revenues, earnings and cash flow by expanding our addressable market and client base. The intangible assets of $18.5 million are primarily attributable to client relationships and acquired software and will be amortized over a weighted average period of approximately 13 years.

The actual operating results of CSI and ResourceX, from their respective dates of acquisition, are included with the operating results of the ES segment. The operating results of ARInspect are included in the operating results of the PT segment since the date of acquisition. Also, the impact of these acquisitions on our operating results, assets, and liabilities is not material, individually or in the aggregate. As of December 31, 2024, the purchase price allocations for CSI, ARInspect, and ResourceX are final.

In the twelve months ended December 31, 2024, we incurred fees of approximately $29,000 for financial advisory, legal, accounting, due diligence, valuation, and other various services necessary to complete acquisitions. These costs were expensed in 2024 and are included in general and administrative expense in the accompanying consolidated statements of income.

(7)PROPERTY AND EQUIPMENT, NET AND SOFTWARE DEVELOPMENT COSTS, NET

Property and equipment, net consists of the following at December 31:

			Useful Lives (years)						2024						2023
Land			—						$	23,163					$	22,908
Building and leasehold improvements			5-39						181,066						172,094
Computer equipment and purchased software			3-5						99,156						118,178
Furniture and fixtures			5						34,495						34,881
Transportation equipment			5						222						222
									338,102						348,283
Accumulated depreciation and amortization									(174,327)						(178,563)
Property and equipment, net									$	163,775					$	169,720

Depreciation expense was $23.3 million in 2024, $25.0 million in 2023, and $29.5 million in 2022.

We paid $7.5 million and $16.0 million for real estate and the expansion of existing facilities in 2024 and 2023, respectively.

F-21

Software development costs, net consists of the following at December 31:

			Useful Lives (years)						2024						2023
Software development costs			3-7						$	118,698					$	92,395
Accumulated amortization									(42,581)						(25,271)
Software development costs, net									$	76,117					$	67,124

Amortization expense for software development costs is recorded to cost of revenues and general and administrative expense:

			2024						2023						2022
Amortization expense for software development costs recorded to cost of revenues			$	18,806					$	12,625					$	6,507
Amortization expense for software development costs recorded to general and administrative expense			1,601						930						1,424
Total			$	20,407					$	13,555					$	7,931

Estimated annual amortization expense related to software development costs:

2025			$	23,050
2026			20,082
2027			15,162
2028			11,168
2029			5,348
Thereafter			1,307
			$	76,117

(8)GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the two years ended December 31, 2024 are as follows:

			Enterprise Software						Platform Technologies						Total
Balance as of 12/31/2022			$	834,693					$	1,654,615					$	2,489,308
Goodwill acquired related to the purchase of CSI			19,421						—						19,421
Goodwill acquired related to the purchase of ARInspect			—						13,627						13,627
Goodwill acquired related to the purchase of ResourceX			9,978						—						9,978
Goodwill acquired related to the purchase of other acquisitions			—						(225)						(225)
Transfer from ES to PT			(27,090)						27,090						—
Balance as of 12/31/2023			837,002						1,695,107						2,532,109
Purchase price adjustments related to the purchase of prior year acquisitions			(235)						(221)						(456)
Balance as of 12/31/2024			$	836,767					$	1,694,886					$	2,531,653

Other intangible assets and related accumulated amortization consists of the following at December 31:

			2024						2023
Gross carrying amount of other intangibles:
Client related intangibles			$	958,924					$	1,015,919
Acquired software			284,900						466,253
Trade names			5,320						45,002
Leases acquired			4,585						5,037
			1,253,729						1,532,211
Accumulated amortization			(421,763)						(603,341)
Total other intangibles, net			$	831,966					$	928,870

F-22

Amortization expense for acquired software is recorded to cost of revenues. Amortization expense for client related intangibles, trade names and leases acquired is recorded to amortization of other intangibles. Total amortization expense for other intangible assets was $96.9 million in 2024, $111.0 million in 2023, and $113.9 million in 2022.

The amortization periods of other intangible assets is summarized in the following table:

			December 31, 2024																		December 31, 2023
			Gross Carrying Amount						Weighted Average Amortization Period						Accumulated Amortization						Gross Carrying Amount						Weighted Average Amortization Period						Accumulated Amortization
Non-amortizable intangibles:
Goodwill			$	2,531,653					—						$	—					$	2,532,109					—						$	—
Amortizable intangibles:
Client related intangibles			$	958,924					18 years						$	261,407					$	1,015,919					18 years						$	263,672
Acquired software			284,900						8 years						152,317						466,253						7 years						296,704
Trade names			5,320						12 years						3,902						45,002						7 years						38,838
Leases acquired			4,585						7 years						4,137						5,037						9 years						4,127

Estimated annual amortization expense related to other intangible assets:

2025			$	92,208
2026			84,871
2027			82,777
2028			79,983
2029			62,143
Thereafter			429,984
			$	831,966

(9)ACCRUED LIABILITIES

Accrued liabilities consist of the following at December 31:

			2024						2023
Accrued wages, bonuses and commissions			$	109,207					$	81,679
Other accrued liabilities			88,502						76,879
			$	197,709					$	158,558

F-23

(10)DEBT

The following table summarizes our total outstanding borrowings:

			Rate						Maturity Date						December 31, 2024						December 31, 2023
2024 Credit Agreement
Revolving credit facility			S + 1.125%						September 2029						$	—					$	—
2021 Credit Agreement
Revolving credit facility			S + 1.125%						April 2026						—						—
Term Loan A-1			S + 1.125%						April 2026						—						50,000
Convertible Senior Notes due 2026			0.25%						March 2026						600,000						600,000
Total borrowings															600,000						650,000
Less: unamortized debt discount and debt issuance costs															(2,066)						(3,993)
Total borrowings, net															597,934						646,007
Less: current portion of debt															—						(49,801)
Carrying value															$	597,934					$	596,206

2024 Credit Agreement

On September 25, 2024, the Company entered into a $700.0 million credit agreement with the various lenders party thereto and Wells Fargo Bank, National Association, as Administrative Agent, Swingline Lender, and Issuing Lender (the “2024 Credit Agreement”). The 2024 Credit Agreement provides for an unsecured revolving credit facility in an aggregate principal amount of up to $700.0 million, including subfacilities for standby letters of credit and swingline loans. The 2024 Credit Agreement matures on September 25, 2029, and loans may be prepaid at any time, without premium or penalty, subject to certain minimum amounts and payment of any SOFR breakage costs. The Company incurred issuance fees of $2.6 million in connection with the 2024 Credit Agreement. The 2024 Credit Agreement replaced Tyler’s previous $500.0 million unsecured credit facility under the credit agreement dated April 21, 2021, among the Company and various lenders party thereto (the “2021 Credit Agreement”), which was scheduled to mature in April 2026.

The 2024 Credit Agreement contains certain customary representations and warranties, affirmative and negative covenants, and events of defaults. The 2024 Credit Agreement requires us to maintain certain financial ratios and other financial conditions and limits us from making certain investments, advances, cash dividends or loans, and limits incurrence of additional indebtedness and liens.

Loans under the revolving credit facility will bear interest, at the Company’s option, at a per annum rate of either (1) the Administrative Agent’s prime commercial lending rate (subject to certain higher rate determinations) plus a margin of 0.125% to 0.75% or (2) the one-, three-, or six-month SOFR rate plus a margin of 1.125% to 1.75%. The margin in each case is based upon Tyler’s total net leverage ratio, as determined pursuant to the 2024 Credit Agreement. In addition to paying interest on the outstanding principal of loans under the revolving credit facility, the Company is required to pay a commitment fee initially in the amount of 0.125% per annum, which will subsequently range from 0.125% to 0.25% based upon the Company’s total net leverage ratio. Borrowings under the 2024 Credit Agreement may be used for general corporate purposes, including working capital requirements, acquisitions and capital expenditures.

2021 Credit Agreement

In connection with the completion of a prior acquisition the Company entered into a $1.4 billion Credit Agreement (the “2021 Credit Agreement”) with the various lenders party thereto and Wells Fargo Bank, National Association, as Administrative Agent, Swingline Lender, and Issuing Lender. The 2021 Credit agreement included a senior unsecured revolving credit facility (which has been replaced by the 2024 credit agreement discussed above) and an amortizing five-year term loan in the aggregate amount of $600 million (the “Term Loan A-1”).

The Term Loan A-1 bore interest, at the Company’s option, at a per annum rate of either (1) the Administrative Agent’s prime commercial lending rate (subject to certain higher rate determinations) (the “Base Rate”) plus a margin of 0.125% to 0.75% or (2) the one-, three-, six-, or, subject to approval by all lenders, twelve-month SOFR rate plus a margin of 1.125% to 1.75%.

During the twelve months ended December 31, 2024, we repaid $50.0 million of the Term Loans and had no borrowings outstanding under the 2021 Credit Agreement prior to its termination on September 25, 2024.

F-24

As of December 31, 2024, we had no borrowings outstanding and were in compliance with our covenants under the 2024 Credit Agreement.

Convertible Senior Notes due 2026

On March 9, 2021, we issued 0.25% Convertible Senior Notes due in 2026 in the aggregate principal amount of $600.0 million (“the Convertible Senior Notes” or “the Notes”). The Convertible Senior Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of March 9, 2021, with U.S. Bank National Association as trustee. The net proceeds from the issuance of the Convertible Senior Notes were $591.4 million, net of initial purchasers’ discounts of $6.0 million and debt issuance costs of $2.6 million.

The Convertible Senior Notes are senior, unsecured obligations and are (i) equal in right of payment to our future senior, unsecured indebtedness; (ii) senior in right of payment to our future indebtedness that is expressly subordinated to the Notes; (iii) effectively subordinated to our future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all future indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of our subsidiaries.

The Convertible Senior Notes accrue interest at a rate of 0.25% per annum, payable semi-annually in arrears on March 15 and September 15 of each year. The Convertible Senior Notes mature on March 15, 2026, unless earlier repurchased, redeemed, or converted.

Before September 15, 2025, holders of the Convertible Senior Notes have the right to convert their Convertible Senior Notes only upon the occurrence of certain events. Under the terms of the Indenture, the Convertible Senior Notes are convertible into common stock of Tyler Technologies, Inc. (referred to as “our common stock” herein) at the following times or circumstances:

• during any calendar quarter commencing after the calendar quarter ended June 30, 2021, if the last reported sale price per share of our common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

• during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “Measurement Period”) if the trading price per $1,000 principal amount of Convertible Senior Notes, as determined following a request by their holder in accordance with the procedures in the Indenture, for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day;

• upon the occurrence of certain corporate events or distributions on our common stock, including but not limited to a “Fundamental Change” (as defined in the Indenture);

• upon the occurrence of specified corporate events; or

• on or after September 15, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date, March 15, 2026.

With certain exceptions, upon a change of control or other fundamental change (both as defined in the Indenture governing the Convertible Senior Notes), the holders of the Convertible Senior Notes may require us to repurchase all or part of the principal amount of the Convertible Senior Notes at a repurchase price equal to 100% of the principal amount of the Convertible Senior Notes, plus any accrued and unpaid interest up to, but excluding, the redemption date.

As of December 31, 2024, none of the conditions allowing holders of the Convertible Senior Notes to convert have been met.

From and including September 15, 2025, holders of the Convertible Senior Notes may convert their Convertible Senior Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. We will settle any conversions of the Convertible Senior Notes either entirely in cash or in a combination of cash and shares of our common stock, at our election. However, upon conversion of any Convertible Senior Notes, the conversion value, which will be determined over an “Observation Period” (as defined in the Indenture) consisting of 30 trading days, will be paid in cash up to at least the principal amount of the Notes being converted.

The initial conversion rate is 2.0266 shares of common stock per $1,000 principal amount of Convertible Senior Notes, which represents an initial conversion price of approximately $493.44 per share of common stock. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

F-25

The Convertible Senior Notes are redeemable, in whole or in part, at our option at any time, and from time to time, on or after March 15, 2024, and on or before the 30th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, up to, but excluding, the redemption date, but only if the last reported sale price per share of our common stock exceeds 130% of the conversion price of the Notes on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (ii) the trading day immediately before the date we send such notice. In addition, calling any Note for redemption constitutes a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption.

Effective Interest Rate

The weighted average interest rate for the borrowings under the Convertible Senior Notes was 0.25% as of December 31, 2024. For the twelve months ended December 31, 2024, the effective interest rate was 8.66% for the Term Loans under the 2021 Credit Agreement and 0.54% for the Convertible Senior Notes. The following sets forth the interest expense recognized related to the borrowings and commitment fees for unused portions under the 2024 Credit Agreement, the 2021 Credit Agreement and Convertible Senior Notes and is included in interest expense in the accompanying consolidated statements of income:

			Years Ended December 31,
			2024						2023						2022
Contractual interest expense - 2024 Revolving Credit Facility			$	(253)					$	—					$	—
Contractual interest expense - 2021 Revolving Credit Facility			(671)						(1,539)						(1,267)
Contractual interest expense - Term Loans			(761)						(16,016)						(18,583)
Contractual interest expense - Convertible Senior Notes			(1,500)						(1,500)						(1,500)
Amortization of debt discount and debt issuance costs			(2,746)						(4,574)						(7,029)
Total			$	(5,931)					$	(23,629)					$	(28,379)

As of December 31, 2024, we had one outstanding standalone letter of credit totaling $500,000. The letter of credit, which guarantees our performance under a client contract, automatically renews annually unless canceled in writing, and expires in the third quarter of 2025.

(11) FINANCIAL INSTRUMENTS

The following table presents our financial instruments:

			December 31, 2024						December 31, 2023
Cash and cash equivalents			$	744,721					$	165,493
Available-for-sale investments			34,015						17,431
Equity investments			10,000						10,000
Total			$	788,736					$	192,924

Cash and cash equivalents consist primarily of money market funds with original maturity dates of three months or less, for which we determine fair value through quoted market prices.

Our investment portfolio is classified as available-for-sale in order to have the flexibility to buy and sell investments and maximize cash liquidity. Our available-for-sale investments primarily consist of investment grade corporate bonds, U.S. Treasuries, and asset-backed securities with maturity dates through 2027. These investments are presented at fair value and are included in short-term investments and non-current investments in the accompanying consolidated balance sheets. Unrealized gains or losses associated with the investments are included in accumulated other comprehensive income (loss), net of tax in the accompanying consolidated balance sheets and other comprehensive income (loss), net of tax in the statements of comprehensive income. For our available-for-sale investments, we do not have the intent to sell, nor is it more likely than not that we would be required to sell before recovery of their cost basis.

As of December 31, 2024 and 2023, we have an accrued interest receivable balance of approximately $227,000 and $65,000, respectively, which is included in accounts receivable, net. We do not measure an allowance for credit losses for accrued interest receivables. We record any losses within the maturity period or at the time of sale of the investment and any write-offs to accrued interest receivables are recorded as reductions to interest income in the period of the loss. During the twelve months ended December 31, 2024, we have recorded no losses for accrued interest receivables. Interest income and amortization of discounts and premiums are included in other income, net in the accompanying consolidated statements of income.

F-26

The following table presents the components of our available-for-sale investments:

			December 31, 2024						December 31, 2023
Amortized cost			$	34,225					$	17,866
Unrealized gains			3						—
Unrealized losses			(213)						(435)
Estimated fair value			$	34,015					$	17,431

As of December 31, 2024, we have $23.3 million of available-for-sale debt securities with contractual maturities of one year or less and $10.8 million with contractual maturities greater than one year. As of December 31, 2024, 22 available-for-sale securities with a fair value of $13.5 million have been in a loss position for one year or less and seven securities with a fair value of $7.7 million have been in a loss position for greater than one year.

The following table presents the activity on our available-for-sale or held-to-maturity investments:

			Years Ended December 31,
			2024						2023						2022
Proceeds from sales and maturities			$	15,994					$	49,412					$	71,034
Realized losses on sales, net of tax			(18)						—						(79)

Our equity investments consist of an 18% interest in BFTR, LLC, a wholly owned subsidiary of Bison Capital Partners V L.P. BFTR, LLC is a privately held Australian company specializing in digitizing the spoken word in court and legal proceedings. The investment in common stock is carried at cost less any impairment write-downs because we do not have the ability to exercise significant influence over the investee and the securities do not have readily determinable fair values.

(12)FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for that asset or liability. Guidance on fair value measurements and disclosures establishes a valuation hierarchy for disclosure of inputs used in measuring fair value defined as follows:

• Level 1—Inputs are unadjusted quoted prices that are available in active markets for identical assets or liabilities.

• Level 2—Inputs include quoted prices for similar assets and liabilities in active markets and quoted prices in non-active markets, inputs other than quoted prices that are observable, and inputs that are not directly observable, but are corroborated by observable market data.

• Level 3—Inputs that are unobservable and are supported by little or no market activity and reflect the use of significant management judgment.

The classification of a financial asset or liability within the hierarchy is determined based on the least reliable level of input that is significant to the fair value measurement. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. We also consider the counterparty and our own non-performance risk in our assessment of fair value.

The following table presents fair values of our financial and debt instruments categorized by their fair value hierarchy as of December 31, 2024:

			Level 1						Level 2						Level 3						Total
Cash and cash equivalents			$	744,721					$	—					$	—					$	744,721
Available-for-sale investments			—						34,015						—						34,015
Equity investments			—						—						10,000						10,000
Convertible Senior Notes due 2026			—						731,310						—						731,310

F-27

The following table presents fair values of our financial and debt instruments categorized by their fair value hierarchy as of December 31, 2023:

			Level 1						Level 2						Level 3						Total
Cash and cash equivalents			$	165,493					$	—					$	—					$	165,493
Available-for-sale investments			—						17,431						—						17,431
Equity investments			—						—						10,000						10,000
2021 Credit Agreement
Term Loan A-1			—						49,801						—						49,801
Convertible Senior Notes due 2026			—						609,168						—						609,168

Assets that are measured at fair value on a recurring basis

Accounts receivables, accounts payables, short-term obligations and certain other assets carrying value approximate fair value because of the short maturity of these instruments.

As of December 31, 2024, we have $34.0 million in investment grade corporate bonds, U.S. Treasuries and asset-backed securities with maturity dates through 2027. The fair values of these securities are considered Level 2 as they are based on inputs from quoted prices in markets that are not active or other observable market data.

Assets that are measured at fair value on a nonrecurring basis

As of December 31, 2024, we have an 18% interest in BFTR, LLC. As we do not have the ability to exercise significant influence over the investee and the securities do not have readily determinable fair values, our investment is carried at cost less any impairment write-downs. Periodically, our investment is assessed for impairment. We do not reassess the fair value of the investments if there are no identified events or changes in circumstances that indicate fair value of the investment or indicate impairment. No events or changes in circumstances have occurred during the period that require reassessment. There has been no impairment of this investment for the periods presented. This investment is included in other non-current assets in the accompanying consolidated balance sheets.

As described in Note 1, “Summary of Significant Accounting Policies”, we assess goodwill for impairment annually on October 1. In addition, we review goodwill, property and equipment, and other intangibles for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. During the fourth quarter of 2024, we completed our annual assessment of goodwill which did not result in an impairment charge. Further, we identified no indicators of impairment to goodwill, property and equipment, and other intangibles. Therefore, no impairment was recorded as of or for the year ended December 31, 2024.

Financial instruments measured at fair value only for disclosure purposes

For the twelve months ended December 31, 2024, we repaid the remainder of the Term Loans and had no borrowings outstanding under the 2021 Credit Agreement prior to its termination on September 25, 2024. The carrying amount of the Term Loan under the 2021 Credit Agreement was the par value less the debt discount and debt issuance costs that are amortized to interest expense using the effective interest method over the term of the Term Loan. Interest expense is included in the accompanying consolidated statements of income.

The fair value of our Convertible Senior Notes is determined based on quoted market prices for a similar liability when traded as an asset in an active market, a Level 2 input. See Note 10, “Debt,” for further discussion.

The carrying amount of the Convertible Senior Notes is the par value less the debt discount and debt issuance costs that are amortized to interest expense using the effective interest method over the term of the Convertible Senior Notes. Interest expense is included in the accompanying consolidated statements of income.

The following table presents the fair value and carrying value, net, of the Term Loan under the 2021 Credit Agreement and our Convertible Senior Notes:

			Fair Value at December 31,												Carrying Value at December 31,
			2024						2023						2024						2023
2021 Credit Agreement
Term Loan A-1			$	—					$	49,801					$	—					$	49,801
Convertible Notes due 2026			731,310						609,168						597,934						596,206
			$	731,310					$	658,969					$	597,934					$	646,007

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(13)INCOME TAX

Income tax provision on income from operations consists of the following:

			Years Ended December 31,
			2024						2023						2022
Current:
Federal			$	60,997					$	86,218					$	84,570
State			14,807						19,803						25,975
			75,804						106,021						110,545
Deferred			(30,663)						(73,704)						(87,192)
			$	45,141					$	32,317					$	23,353

Reconciliation of the U.S. statutory income tax rate to our effective income tax expense rate for operations follows:

			Years Ended December 31,
			2024						2023						2022
Federal income tax expense at statutory rate			$	64,715					$	41,630					$	39,395
State income tax, net of federal income tax benefit			8,917						6,881						9,197
Net operating loss carryback			—						—						(261)
Excess tax benefits of share-based compensation			(21,143)						(9,325)						(7,752)
Tax credits			(22,095)						(20,494)						(31,334)
Non-deductible business expenses			4,786						5,191						5,425
Uncertain tax positions			10,109						7,647						8,338
Other, net			(148)						787						345
			$	45,141					$	32,317					$	23,353

The tax effects of the major items recorded as deferred tax assets and liabilities as of December 31 are:

			2024						2023
Deferred income tax assets:
Capitalized research and experimental expenditures			$	157,812					$	130,972
Operating expenses not currently deductible			8,593						22,180
Stock option and other employee benefit plans			22,095						21,864
Loss and credit carryforwards			5,836						7,430
Deferred revenue			1,670						1,923
Other			55						111
Total deferred income tax assets			196,061						184,480
Valuation allowance			(794)						—
Total deferred income tax assets, net of valuation allowance			195,267						184,480
Deferred income tax liabilities:
Intangible assets			(223,459)						(242,522)
Property and equipment			(5,624)						(8,659)
Prepaid expenses			(13,687)						(11,889)
Total deferred income tax liabilities			(242,770)						(263,070)
Net deferred income tax liabilities			$	(47,503)					$	(78,590)

As of December 31, 2024, the capitalization and amortization requirements of research and experimental expenditures pursuant to the Tax Cuts and Jobs Act of 2017 (“TCJA”) changes to Internal Revenue Code Section 174 resulted in a deferred tax asset of $157.8 million.

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As of December 31, 2024, we had after-tax federal and state net operating loss and net tax credit carryforwards of $5.8 million, that will begin expiring in 2033, if not utilized. The acquired carryforwards are subject to an annual limitation but are expected to be realized. A valuation allowance was recorded against a state research and development credit carryforward in 2024 for $0.8 million due to state taxable income limitations on credit utilization. We believe it is more likely than not that all other deferred tax assets will be realized. However, the amount of the deferred tax asset considered realizable could be adjusted in the future if estimates of taxable income or reversing taxable temporary differences are revised.

The following table provides a reconciliation of the gross unrecognized tax benefits from uncertain tax positions for the years ended December 31:

			2024						2023
Balance at beginning of period			$	20,869					$	14,044
Additions for tax positions of prior period			4,970						3,087
Reductions for tax positions of prior period			—						(338)
Additions for tax positions of current period			4,346						4,838
Expiration of statutes of limitations			(430)						(762)
Balance at end of period			$	29,755					$	20,869

As of December 31, 2024 and December 31, 2023, we had uncertain tax positions of $32.2 million and $22.1 million, including interest and penalties, respectively, recorded within deferred tax liabilities, other long-term assets, and other long-term liabilities in our consolidated balance sheets. The total amount of unrecognized tax benefits, net of the federal income tax benefit of state taxes, if recognized, that would affect the effective tax rate is $28.6 million, $20.1 million and $13.3 million as of December 31, 2024, 2023, and 2022, respectively. It is reasonably possible that events will occur during the next 12 months that would cause the total amount of unrecognized tax benefits to increase or decrease. However, we do not expect such increases or decreases to be material to the Company’s financial condition or results of operations.

We are subject to U.S. federal income tax, as well as income tax of multiple state, local and foreign jurisdictions. We are routinely subject to income tax examinations by these taxing jurisdictions, but we do not have a history of, nor do we expect any material adjustments as a result of these examinations. With few exceptions, major U.S. federal, state, local and foreign jurisdictions are no longer subject to examination for years before 2020. As of February 19, 2025, no significant adjustments have been proposed by any taxing jurisdiction.

(14) SHARE-BASED COMPENSATION

Share-Based Compensation Plan

In May 2024, stockholders approved the Tyler Technologies, Inc. amended and restated 2018 Stock Incentive Plan (“the Amended and Restated 2018 Plan”) which amended and restated the existing Tyler Technologies, Inc. 2018 Stock Option Plan (“the 2018 Plan”). Upon stockholder approval of the Amended and Restated 2018 Stock Incentive Plan, the remaining shares available for grant under the 2018 Plan were added to the shares authorized for grant under the Amended and Restated 2018 Stock Incentive Plan. Additionally, any awards previously granted under the 2018 Plan that expire unexercised or are forfeited are added to the shares authorized for grant under the Amended and Restated 2018 Stock Incentive Plan.

We grant stock awards under the Amended and Restated 2018 Stock Incentive Plan in the form of stock options, restricted stock units and performance share units. Stock options generally vest after three to five years of continuous service from the date of grant and have a contractual term of 10 years. Once options become exercisable, the employee can purchase shares of our common stock at the market price on the date we granted the option. Restricted stock unit grants generally vest ratably over three to five years of continuous service from the date of grant. Each performance share unit represents the right to receive one share of our common stock based on our achievement of certain financial performance targets during applicable performance periods. We account for share-based compensation utilizing the fair value recognition pursuant to ASC 718, Stock Compensation.

As of December 31, 2024, there were 4.4 million shares available for future grants under the Amended and Restated 2018 Stock Incentive Plan from the 27.5 million shares previously approved by the shareholders.

Determining Fair Value of Stock Compensation

Valuation and Amortization Method. We estimate the fair value of stock option awards granted using the Black-Scholes option valuation model. For restricted stock unit and performance stock unit awards, we estimate fair value as market value on the date of grant. We amortize the fair value of all awards on a straight-line basis over the requisite service periods, which are generally the vesting periods.

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Expected Life. The expected life of awards granted represents the period of time that they are expected to be outstanding. The expected life represents the weighted-average period the stock options are expected to be outstanding based primarily on the options’ vesting terms, remaining contractual life and the employees’ expected exercise based on historical patterns.

Expected Volatility. Using the Black-Scholes option valuation model, we estimate the volatility of our common stock at the date of grant based on the historical volatility of our common stock.

Risk-Free Interest Rate. We base the risk-free interest rate used in the Black-Scholes option valuation model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award.

Expected Dividend Yield. We have not paid any cash dividends on our common stock in more than ten years and we do not anticipate paying any cash dividends in the foreseeable future. Consequently, we use an expected dividend yield of zero in the Black-Scholes option valuation model.

Forfeitures. We recognize the effect of awards for which the requisite service period is not rendered when the award is forfeited (that is, we recognize the effect of forfeitures in compensation cost when they occur). Previously recognized compensation cost for an award is reversed in the period that the award is forfeited.

During fiscal years 2024 and 2023, no stock option awards were issued; therefore no Black-Scholes model assumptions are reportable. The following weighted average assumptions were used for options granted in 2022:

			Years Ended December 31,
			2024						2023						2022
Expected life (in years)			—						—						5.0
Expected volatility			—						—						28.3		%
Risk-free interest rate			—						—						3.3		%

Share-Based Award Activity

Stock Options

Options granted, exercised, forfeited and expired are summarized as follows:

			Number of Shares						Weighted Average Exercise Price						Weighted Average Remaining Contractual Life (Years)						Aggregate Intrinsic Value
Outstanding at December 31, 2023			1,225						$	229.63
Granted			—						—
Exercised			(486)						200.84
Forfeited			—						—
Outstanding at December 31, 2024			739						$	248.53					4						$	242,627
Exercisable at December 31, 2024			699						$	241.48					4						$	234,381

We had unvested options to purchase approximately 40,000 shares with a weighted average grant date exercise price of $371.20 as of December 31, 2024, and unvested options to purchase approximately 98,000 shares with a weighted average grant date exercise price of $380.83 as of December 31, 2023.

Other information pertaining to option activity was as follows during the twelve months ended December 31:

			2024						2023						2022
Weighted average grant-date fair value of stock options granted			$	—					$	—					$	108.99
Total intrinsic value of stock options exercised			$	159,022					$	58,261					$	43,160

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Restricted Stock Units and Performance Stock Units

The following table summarizes restricted stock unit and performance stock unit activity during the periods presented (shares in thousands):

			Number of Shares						Weighted Average Grant Date Fair Value per Share
Unvested at December 31, 2023			646						$	384.43
Granted			290						512.31
Vested			(254)						395.87
Forfeited			(21)						408.12
Unvested at December 31, 2024			661						$	435.18

Share-Based Compensation Expense

The following table summarizes share-based compensation expense related to share-based awards which is recorded in the consolidated statements of income:

			Years Ended December 31,
			2024						2023						2022
Subscriptions, maintenance and professional services			$	31,322					$	26,607					$	27,486
Sales and marketing expense			12,840						10,118						8,800
General and administrative expense			78,651						71,613						66,699
Total share-based compensation expense			122,813						108,338						102,985
Total tax benefit			(62,593)						(32,997)						(27,599)
Net decrease in net income			$	60,220					$	75,341					$	75,386

As of December 31, 2024, we had $208.7 million of total unrecognized compensation cost related to unvested options and restricted stock units which is expected to be amortized over a weighted average amortization period of 2.2 years.

Employee Stock Purchase Plan

Under our Employee Stock Purchase Plan (“ESPP”) participants may contribute up to 15% of their annual compensation to purchase common shares of Tyler. The purchase price of the shares is equal to 85% of the closing price of Tyler shares on the last day of each quarterly offering period. As of December 31, 2024, there were 484,000 shares available for future issuances under the ESPP from the 2.0 million shares previously approved by the stockholders.

(15) EARNINGS PER SHARE

The following table details the reconciliation of basic earnings per share to diluted earnings per share:

			Years Ended December 31,
			2024						2023						2022
Numerator for basic and diluted earnings per share:
Net income			$	263,026					$	165,919					$	164,240
Denominator:
Weighted-average basic common shares outstanding			42,611						42,024						41,544
Assumed conversion of dilutive securities:
Stock awards			793						745						855
Convertible Senior Notes			93						—						—
Denominator for diluted earnings per share - Adjusted weighted-average shares			43,497						42,769						42,399
Earnings per common share:
Basic			$	6.17					$	3.95					$	3.95
Diluted			$	6.05					$	3.88					$	3.87

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Stock awards representing the right to purchase common stock of approximately 67,000 shares in 2024, 343,000 shares in 2023, and 372,000 shares in 2022, were not included in the computation of diluted earnings per share because their inclusion would have had an antidilutive effect.

We have used the if-converted method for calculating any potential dilutive effect of the Convertible Senior Notes on our diluted net income per share if our average stock price for the period exceeded the conversion price of $493.44 per share of common stock. Under the if-converted method, the Notes are assumed to be converted at the beginning of the period and the resulting common shares, if dilutive, are included in the denominator of the diluted earnings per share calculation for the entire period being presented. For the twelve months ended December 31, 2024, our average stock price for the period exceeded the conversion price resulting in a dilutive impact of the if-converted method as reflected in the table above. For the twelve months ended December 31, 2023 and 2022, our average stock price for the period did not exceed the conversion price, therefore there was no dilutive impact as reflected in the table above.

(16) LEASES

We lease office facilities, transportation and other equipment for use in our operations. Most of our leases are non-cancelable operating lease agreements with remaining terms of one to 10 years. Some of these leases include options to extend for up to six years. We have no finance leases as of December 31, 2024. Right-of-use lease assets and lease liabilities for our operating leases are recorded in the consolidated balance sheets. We incurred no lease restructuring costs during 2024, $6.4 million in 2023 and $1.7 million in 2022, respectively.

The components of operating lease expense were as follows:

Lease Costs									Years ended December 31,
									2024						2023						2022
Operating lease cost									$	9,166					$	19,468					$	14,743
Short-term lease cost									2,124						2,121						2,166
Variable lease cost									768						1,009						1,047
Net lease cost									$	12,058					$	22,598					$	17,956

Supplemental information related to leases is as follows:

Other Information			Years ended December 31,
			2024						2023						2022
Cash flows:
Cash paid amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases			$	12,578					$	12,555					$	13,562
Right-of-use assets obtained in exchange for lease obligations (non-cash):
Operating leases			$	4,404					$	3,383					$	25,171
Lease term and discount rate:
Weighted average remaining lease term (years)			6						7						7
Weighted average discount rate			3.22		%				1.59		%				1.57		%

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As of December 31, 2024, maturities of lease liabilities were as follows:

Year ending December 31,			Amount
2025			$	10,675
2026			8,387
2027			7,458
2028			4,624
2029			3,698
Thereafter			10,742
Total lease payments			45,584
Less: Interest			(5,150)
Present value of operating lease liabilities			$	40,434

Rental income from third parties

We own office buildings in Bangor, Falmouth, Yarmouth and Orono, Maine; Lubbock and Plano, Texas; Troy, Michigan; Latham, New York; Moraine, Ohio; and Kingston Springs, Tennessee. We lease space in some of these buildings to third-party tenants, one of which was formerly a related party (see Note 18, “Related Party Transactions”). The property we lease to others under operating leases consists primarily of specific facilities where one tenant obtains substantially all of the economic benefit from the asset and has the right to direct the use of the asset. These non-cancelable leases expire between 2025 and 2028, and some have options to extend the lease for up to 10 years. We determine if an arrangement is a lease at inception. None of our leases allow the lessee to purchase the leased asset.

Rental income from third-party tenants was $3.2 million in 2024, $2.1 million in 2023, and $1.7 million in 2022. Rental income is included in hardware and other revenue on the consolidated statements of income. Future minimum operating rental income based on contractual agreements is as follows:

Year ending December 31,			Amount
2025			$	2,270
2026			1,274
2027			982
2028			704
2029			—
Total			$	5,230

As of December 31, 2024, we had no additional significant operating or finance leases that had not yet commenced.

(17) EMPLOYEE BENEFIT PLANS

We provide a defined contribution plan for the majority of our employees meeting minimum service requirements. Eligible employees can contribute up to 30% of their current compensation to the plan subject to certain statutory limitations. We contribute up to a maximum of 3% of an employee’s compensation to the plan. We made contributions to the plan and charged operating results $19.1 million in 2024, $18.6 million in 2023, and $17.5 million in 2022.

(18) RELATED PARTY TRANSACTIONS

In April 2023, we entered into an arm’s length lease agreement under which we lease 25,000 square feet of office space in our Lubbock, Texas, office facility to a company co-owned by a former member of our Board of Directors. The lease agreement, which commenced on April 1, 2023, and was amended on April 8, 2024, has an initial term of five years with a pro-rata base rent of $25,000 per month until December 1, 2023, followed by a base rent of $58,000 for the next year and a 2.5% annual increase thereafter. We recognized rental income of $697,000 and $150,000 under this lease for the years ended December 31, 2024 and 2023, respectively.

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(19) COMMITMENTS AND CONTINGENCIES

Litigation

During the first quarter of 2022, we received a notice of termination for convenience under a contractual arrangement with a state government client. Upon receipt of the termination notice, we ceased performing services under the contractual arrangement and sought payment of contractually owed fees of approximately $15 million in connection with the termination for convenience.

The client was unresponsive to our outreach for several months, and on August 23, 2022, we filed a lawsuit to enforce our rights and remedies under the applicable contractual arrangement. The client subsequently asked us to negotiate directly with the client to attempt to resolve the dispute. The negotiations were not successful, and on March 20, 2024, we reinitiated our lawsuit. Although we believe our products and services were delivered in accordance with the terms of our contract and that we are entitled to payment in connection with the termination for convenience, at this time the matter remains unresolved. We can provide no assurances that we will not incur additional costs as we pursue our rights and remedies under the contract.

Purchase Commitments

We have contractual obligations for third-party technology used in our solutions and for other services that we purchase as part of our normal operations. In certain cases, these arrangements require a minimum annual purchase commitment by us. As of December 31, 2024, the remaining aggregate minimum purchase commitment under these arrangements was approximately $646 million through 2031. Future minimum payments related to purchase commitments based on contractual agreements are as follows:

Year ending December 31,			Amount
2025			$	79,154
2026			86,202
2027			82,282
2028			90,213
2029			93,436
Thereafter			214,373
Total			$	645,660

(20) SUBSEQUENT EVENTS

On January 31, 2025, we completed an acquisition for the total consideration of approximately $18.5 million, paid in all cash, subject to certain post-closing adjustments including working capital holdbacks.

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