Item 16. FORM 10-K SUMMARY

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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 18, 2026	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 18, 2026.

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 18, 2026	By:	/s/ John S. Marr, Jr.
		John S. Marr, Jr.
		Executive Chairman of the Board
		Director

Date: February 18, 2026	By:	/s/ H. Lynn Moore, Jr.
		H. Lynn Moore, Jr.
		President and Chief Executive Officer
		(principal executive officer)

Date: February 18, 2026	By:	/s/ Brian K. Miller
		Brian K. Miller
		Executive Vice President and Chief Financial Officer
		(principal financial officer)

Date: February 18, 2026	By:	/s/ Jason P. Durham
		Jason P. Durham
		Chief Accounting Officer
		(principal accounting officer)

Date: February 18, 2026	By:	/s/ Glenn A. Carter
		Glenn A. Carter
		Director

Date: February 18, 2026	By:	/s/ Margot L. Carter
		Margot L. Carter
		Director

Date: February 18, 2026	By:	/s/ Brenda A. Cline
		Brenda A. Cline
		Director

Date: February 18, 2026	By:	/s/ Ronnie D. Hawkins, Jr.
		Ronnie D. Hawkins, Jr.
		Director

Date: February 18, 2026	By:	/s/ Andrew D. Teed
		Andrew D. Teed
		Director

Date: February 18, 2026	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, 2025 and 2024, 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, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, 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, 2025, 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 18, 2026 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 18, 2026

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, 2025, 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, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, 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, 2025, and the related notes and our report dated February 18, 2026 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 the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the 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 18, 2026

F-2

Tyler Technologies, Inc.

Consolidated Statements of Income

For the years ended December 31,

(In thousands, except per share amounts)


	2025		2024		2023
Revenues:
Subscriptions	$	1,586,203	$	1,342,931	$	1,159,512
Maintenance	445,614		463,132		466,661
Professional services	242,700		263,991		249,976
Software licenses and royalties	12,816		26,357		38,096
Hardware and other	45,007		41,392		37,506
Total revenues	2,332,340		2,137,803		1,951,751

Cost of revenues:
Subscriptions, maintenance and professional services	1,148,889		1,112,778		1,001,221

Software licenses and royalties	8,006		6,277		10,821
Amortization of software development	22,663		18,806		12,625
Amortization of acquired software	37,435		36,964		36,062
Hardware and other	31,647		27,217		29,923
Total cost of revenues	1,248,640		1,202,042		1,090,652

Gross profit	1,083,700		935,761		861,099

Sales and marketing expense	148,570		157,731		149,770
General and administrative expense	316,447		300,938		308,575
Research and development expense	204,588		117,939		109,585
Amortization of other intangibles	56,419		59,627		74,632

Operating income	357,676		299,526		218,537

Interest expense	(4,995)		(5,931)		(23,629)
Other income, net	37,637		14,572		3,328
Income before income taxes	390,318		308,167		198,236
Income tax provision	74,715		45,141		32,317
Net income	$	315,603	$	263,026	$	165,919

Earnings per common share:
Basic	$	7.32	$	6.17	$	3.95
Diluted	$	7.20	$	6.05	$	3.88

See accompanying notes.

F-3

Tyler Technologies, Inc.

Consolidated Statements of Comprehensive Income

For the years ended December 31,

(In thousands)


	2025		2024		2023
Net income	$	315,603	$	263,026	$	165,919
Other comprehensive income, net of tax:
Securities available-for-sale and transferred securities:
Change in net unrealized holding gains on available-for-sale securities during the period	152		151		518

Reclassification adjustment for net income (loss) on sale of available-for-sale securities, included in net income	(6)		18		—
Other comprehensive income, net of tax	146		169		518
Comprehensive income	$	315,749	$	263,195	$	166,437

See accompanying notes.

F-4

Tyler Technologies, Inc.

Consolidated Balance Sheets

(In thousands, except par value and share amounts)


	December 31, 2025		December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	1,015,400	$	744,721
Accounts receivable (less allowance for losses and sales adjustments of $31,972 in 2025 and $17,325 in 2024)	638,798		587,634
Short-term investments	81,800		23,257
Prepaid expenses	74,734		65,135
Income tax receivable	23,748		11,975
Other current assets	9,408		8,057
Total current assets	1,843,888		1,440,779
Accounts receivable, long-term	5,968		7,153
Operating lease right-of-use assets	35,602		31,433
Property and equipment, net	160,355		163,775
Other assets:
Software development costs, net	68,371		76,117
Goodwill	2,590,013		2,531,653
Other intangibles, net	780,414		831,966
Non-current investments	60,698		10,758
Other non-current assets	93,599		86,381
	$	5,638,908	$	5,180,015
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	174,653	$	156,817
Accrued liabilities	190,693		197,709
Operating lease liabilities	9,598		9,643

Deferred revenue	780,838		701,438
Current portion of convertible senior notes due 2026, net	599,663		—
Total current liabilities	1,755,445		1,065,607


Convertible senior notes due 2026, net	—		597,934
Deferred revenue, long-term	20,988		22,376
Deferred income taxes	95,063		47,503
Operating lease liabilities, long-term	33,347		30,791
Other long-term liabilities	31,276		27,382
Total liabilities	1,936,119		1,791,593
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 2025 and 2024	481		481
Additional paid-in capital	1,616,119		1,539,301
Accumulated other comprehensive loss, net of tax	(11)		(157)
Retained earnings	2,182,402		1,866,799
Treasury stock, at cost; 5,027,037 and 5,184,092 shares in 2025 and 2024, respectively	(96,202)		(18,002)
Total shareholders' equity	3,702,789		3,388,422
	$	5,638,908	$	5,180,015

See accompanying notes.

F-5

Tyler Technologies, Inc.

Consolidated Statements of Cash Flows

For the years ended December 31

(In thousands)


	2025		2024		2023
Cash flows from operating activities:
Net income	$	315,603	$	263,026	$	165,919
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	138,358		143,437		154,079
Gains (losses) from sale of investments	(8)		24		1
Share-based compensation expense	151,276		122,813		108,338
Provision (reductions in allowance) for losses and sales adjustments - accounts receivable	14,647		(5,504)		8,233
Amortization of operating lease right-of-use assets	9,506		8,932		16,688
Deferred income tax provision (benefit)	43,851		(30,663)		(73,704)
Other	80		207		475
Changes in operating assets and liabilities, exclusive of effects of acquired companies:
Accounts receivable	(61,688)		28,795		(39,878)
Income tax receivable	(12,001)		(14,441)		(41,201)
Prepaid expenses and other current assets	(18,884)		(29,775)		(19,668)
Accounts payable	17,836		10,509		41,485
Operating lease liabilities	(11,146)		(11,650)		(11,533)
Accrued liabilities	(3,336)		43,387		13,069
Deferred revenue	70,291		90,775		58,513
Other long-term liabilities	(842)		4,761		(376)
Net cash provided by operating activities	653,543		624,633		380,440

Cash flows from investing activities:
Additions to property and equipment	(16,015)		(20,535)		(20,519)
Purchase of marketable security investments	(228,465)		(32,448)		(10,617)
Proceeds and maturities from marketable security investments	121,890		15,994		49,412


Investment in software development	(16,778)		(29,401)		(32,490)
Cost of acquisitions, net of cash acquired	(83,652)		(1,395)		(62,759)
Other	526		173		13
Net cash used by investing activities	(222,494)		(67,612)		(76,960)

Cash flows from financing activities:

Payment on term loans	—		(50,000)		(345,000)


Payment of debt issuance costs	—		(2,637)		—
Purchase of treasury shares	(174,650)		—		—

Proceeds from exercise of stock options, net of withheld shares for taxes upon equity award settlement	3,144		57,213		16,960
Contributions from employee stock purchase plan	18,848		17,631		16,196
Other	(7,712)		—		—
Net cash (used) provided by financing activities	(160,370)		22,207		(311,844)

Net increase (decrease) in cash and cash equivalents	270,679		579,228		(8,364)
Cash and cash equivalents at beginning of period	744,721		165,493		173,857
Cash and cash equivalents at end of period	$	1,015,400	$	744,721	$	165,493

See accompanying notes.

F-6


	2025		2024		2023
Supplemental cash flow information:
Cash paid for interest	$	2,164	$	3,095	$	19,154
Cash paid for income taxes, net	40,761		84,204		142,820
Non-cash investing and financing activities:
Non-cash additions to property and equipment	$	312	$	254	$	3,123
Issuance of shares for acquisitions	—		—		5,675

F-7

Tyler Technologies, Inc.

Consolidated Statements of Shareholders’ Equity

For the years ended December 31, 2025, 2024, and 2023

(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, 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
Net income	—	—		—		—			315,603			—	—		315,603
Other comprehensive income, net of tax	—	—		—		146			—			—	—		146
Exercise of stock options and vesting of restricted stock units	—	—		(86,411)		—			—			505	135,784		49,373
Employee taxes paid for withheld shares upon equity award settlement	—	—		—		—			—			(84)	(46,229)		(46,229)
Stock compensation	—	—		151,276		—			—			—	—		151,276
Issuance of shares pursuant to employee stock purchase plan	—	—		11,953		—			—			39	6,895		18,848
Treasury stock purchases	—	—		—		—			—			(303)	(174,650)		(174,650)

Balance at December 31, 2025	48,148	$	481	$	1,616,119	$	(11)		$	2,182,402		(5,027)	$	(96,202)	$	3,702,789

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 includes software as a service (“SaaS”), transaction-based digital government services and online payment processing, and electronic document filing solutions. 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. We also provide property appraisal outsourcing services for taxing jurisdictions.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include our parent company and 66 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, 2025, 2024 and 2023, we had approximately $146,000, $169,000 and $518,000 of other comprehensive income, net of taxes, 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, valuation 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 Services

We account for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. 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

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. Our software arrangements with clients contain multiple performance obligations that range from software license deliveries, installation, training, consulting, software modification and customization to meet specific client needs; hosting; and PCS. For these contracts, 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.

Revenue is recognized net of allowances for 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 most arrangements are typically for periods of 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 where variable consideration exists, we include in our estimates of 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 costs associated with SaaS arrangements. Such direct and incremental costs are capitalized and amortized ratably over the period of benefit.

Maintenance (Post-Contract Client Support)

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. Contract fees are typically billed on a time and material or 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.

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. Changes in these judgments or estimates could cause an increase or decrease in the amount of revenue or deferred revenue that we report in a particular period.

F-10

Software Licenses and Royalties

Certain 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. 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 generally using labor hours.

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.

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, timing, 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,
	2025		2024
Accounts receivable - current	$	638,798	$	587,634
Accounts receivable - long term	5,968		7,153
Total accounts receivable	$	644,766	$	594,787

Total accounts receivable, including total current and long-term accounts receivable, net of allowance for losses and sales adjustments, was $644.8 million and $594.8 million, as of December 31, 2025, and December 31, 2024, respectively. We have recorded unbilled receivables of $98.4 million and $115.6 million as of December 31, 2025, and December 31, 2024, 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 the long-term portion of accounts receivable in the accompanying consolidated balance sheets. Unbilled receivables also include retention receivables of $12.3 million and $11.4 million as of December 31, 2025, and December 31, 2024, respectively, which become payable upon the completion of the contract or completion of our fieldwork and formal hearings.

F-11

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 were $32.0 million and $17.3 million as of December 31, 2025, and December 31, 2024, respectively.

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


	Years ended December 31,
	2025		2024
Balance at beginning of year	$	17,325	$	22,829
Provisions for losses (reductions in allowance) and sales adjustments - accounts receivable	14,647		(5,504)

Balance at end of year	$	31,972	$	17,325

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 five 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 other non-current 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.

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”.

F-12

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 15, “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.

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, 2025.

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.

There have been no impairments to goodwill in any of the periods presented. Adverse changes in the qualitative factors, including possible further declines in our market capitalization or higher discount rates implied by market conditions could require us to perform a quantitative impairment test and may result in the recognition of a goodwill impairment in future periods. See Note 8, “Goodwill and Other Intangible Assets,” for additional information.

F-13

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. 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, 2025, 2024, and 2023, respectively, we capitalized approximately $16.8 million, $29.4 million, and $32.5 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 $204.6 million in 2025, $117.9 million in 2024, and $109.6 million in 2023.

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 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. We perform periodic evaluations of the credit standing of these financial institutions. As of December 31, 2025, we had cash and cash equivalents of $1.0 billion.

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, 2025.

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 July 2025, the FASB issued ASU 2025-05 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This guidance provides a practical expedient available to all entities to simplify the estimation of the expected credit losses for current accounts receivables and current contract assets arising from revenue contracts under ASC 606. It is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods, with early adoption permitted. As of December 31, 2025, we adopted this standard. Due to most of our clients being domestic governmental entities, we rarely incur a credit loss resulting from the inability of a client to make required payment; as such, this standard did not 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. As of January 1, 2025, we early adopted this standard, which did not 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. As of December 31, 2025, we adopted this standard and it has been applied prospectively. This change did not have a significant impact on the Company’s financial statements and disclosures. The Company’s income tax disclosures have been updated to comply with the new requirements, including enhanced disaggregation in the rate reconciliation and additional information regarding income taxes paid by jurisdiction. See Note 13, “Income Tax,” for further discussion.

RECENTLY PRONOUNCED ACCOUNTING STANDARDS

In September 2025, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2025-06 - Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This update removes the prescriptive software development “project stages” and requires capitalization of software costs once (1) management authorizes and commits funding and (2) completion and use are probable. Entities must evaluate significant development uncertainty related to technological innovations or performance requirements. The amendments also require Subtopic 360-10 disclosures for all capitalized internal-use software costs and clarify that intangible asset disclosures under Subtopic 350-30 are not required. The standard is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the Company’s financial statements.

F-15

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.

(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 that the public sector client performs. Operating segments 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 CODM uses segment operating income or loss to assess performance and to allocate resources (including employees, property, and financial or capital resources) for each segment, predominantly in the annual budget and forecasting process. During the fiscal periods presented, we had no significant transactions between reportable segments. Corporate unallocated amounts are comprised of non-cash amortization of intangible assets associated with acquisitions, depreciation associated with unallocated property and equipment assets, compensation costs for the executive management team and certain shared services staff, and share-based compensation expense for the entire company. Corporate unallocated amounts also include incidental revenues and expenses related to a company-wide user conference and rental income. The accounting policies of the reportable segments are the same as those described in Note 1, “Summary of Significant Accounting Policies.


For the year ended December 31, 2025	Enterprise Software		Platform Technologies		Totals
Revenues
Subscriptions:
SaaS	$	691,288	$	86,481
Transaction-based fees	318,143		490,291
Maintenance	422,886		22,728
Professional services	213,749		28,951
Software licenses and royalties	13,049		(233)
Hardware and other	35,306		336
Total segment revenues	1,694,421		628,554		2,322,975
Less:
Cost of revenues	725,718		431,657
Sales and marketing expense	101,243		19,931
General and administrative expense	45,483		53,057
Research and development expense	161,346		17,845
Segment operating income	$	660,631	$	106,064	$	766,695

F-16


For the year ended December 31, 2024	Enterprise Software		Platform Technologies		Totals
Revenues
Subscriptions:
SaaS	$	559,842	$	84,937
Transaction-based fees	234,633		463,519
Maintenance	438,455		24,677
Professional services	219,933		44,058
Software licenses and royalties	25,292		1,065
Hardware and other	33,447		992
Total segment revenues	1,511,602		619,248		2,130,850
Less:
Cost of revenues	706,952		411,351
Sales and marketing expense	109,981		21,618
General and administrative expense	48,072		57,627
Research and development expense	100,182		12,126
Segment operating income	$	546,415	$	116,526	$	662,941


For the year ended December 31, 2023	Enterprise Software		Platform Technologies		Totals
Revenues
Subscriptions:
SaaS	$	459,544	$	68,433
Transaction-based fees	174,718		456,817
Maintenance	442,781		23,880
Professional services	209,727		40,249
Software licenses and royalties	32,709		5,387
Hardware and other	30,176		—
Total segment revenues	1,349,655		594,766		1,944,421
Less:
Cost of revenues	653,407		368,017
Sales and marketing expense	102,325		25,196
General and administrative expense	57,481		64,406
Research and development expense	92,686		12,701
Segment operating income	$	443,756	$	124,446	$	568,202


Reconciliation of reportable segment operating income to the Company's consolidated totals:	Years Ended December 31,
	2025		2024		2023
Total segment operating income	$	766,695	$	662,941	$	568,202
Corporate unallocated:
Total revenues	9,365		6,953		7,330
Cost of revenues	(91,265)		(83,739)		(69,228)
Sales and marketing expense	(27,396)		(26,132)		(22,249)
General and administrative expense	(217,907)		(195,239)		(186,688)
Research and development expense	(25,397)		(5,631)		(4,198)
Amortization of other intangibles	(56,419)		(59,627)		(74,632)
Interest expense	(4,995)		(5,931)		(23,629)
Other income, net	37,637		14,572		3,328
Income before income taxes	$	390,318	$	308,167	$	198,236

F-17

The following table presents reconciliations of segment revenues from external customers and other segment information to the Company’s consolidated totals:


	Years Ended December 31,
	2025		2024		2023
Revenues:
ES	$	1,694,421	$	1,511,602	$	1,349,655
PT	628,554		619,248		594,766
Corporate unallocated	9,365		6,953		7,330
Total consolidated	$	2,332,340	$	2,137,803	$	1,951,751

Depreciation and amortization expense:
ES	$	29,372	$	37,179	$	25,445
PT	89,476		89,372		110,354
Corporate unallocated	19,510		16,886		18,280
Total consolidated	$	138,358	$	143,437	$	154,079

Software development expenditures:
ES	$	2,387	$	7,612	$	6,619
PT	14,160		15,558		15,840
Corporate	231		6,231		10,031
Total consolidated	$	16,778	$	29,401	$	32,490

Capital expenditures:
ES	$	4,980	$	15,283	$	16,788
PT	5,739		4,168		2,380
Corporate	5,296		1,084		1,351
Total consolidated	$	16,015	$	20,535	$	20,519


	Years ended December 31,
	2025		2024
Segment assets
ES	$	534,864	$	572,224
PT	416,998		416,635
Corporate	4,687,046		4,191,156
Total consolidated	$	5,638,908	$	5,180,015

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

F-18

(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. Subscription 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, 2025	Enterprise Software		Platform Technologies		Corporate Unallocated		Totals
Revenue:
Subscriptions:
SaaS	$	691,288	$	86,481	$	—	$	777,769
Transaction-based fees	318,143		490,291		—		808,434
Maintenance	422,886		22,728		—		445,614
Total recurring revenues	1,432,317		599,500		—		2,031,817

Professional services	213,749		28,951		—		242,700
Software licenses and royalties	13,049		(233)		—		12,816
Hardware and other	35,306		336		9,365		45,007
Total non-recurring revenues	262,104		29,054		9,365		300,523


Total revenues	$	1,694,421	$	628,554	$	9,365	$	2,332,340


For the year ended December 31, 2024	Enterprise Software		Platform Technologies		Corporate Unallocated		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-19


For the year ended December 31, 2023	Enterprise Software		Platform Technologies		Corporate Unallocated		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

(4)DEFERRED REVENUE AND PERFORMANCE OBLIGATIONS

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


	December 31, 2025		December 31, 2024
Enterprise Software	$	755,894	$	683,909
Platform Technologies	39,443		36,117
Corporate	6,489		3,788
Totals	$	801,826	$	723,814

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


	2025
Balance at beginning of year	$	723,814
Deferral of revenue	1,549,541
Recognition of deferred revenue	(1,471,529)
Balance at end of year	$	801,826

Remaining Performance Obligations

We expect to recognize as revenue approximately 97% of our deferred revenue balance as of December 31, 2025, 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, 2025		December 31, 2024
Prepaid commissions	$	24,006	$	18,037
Long-term deferred commissions	54,561		38,762
Total deferred commissions	$	78,567	$	56,799

F-20

Amortization expense related to deferred commissions is as follows:


	Years Ended December 31,
	2025		2024		2023
Amortization expense	$	21,881	$	19,916	$	18,589

Deferred commissions have been included with prepaid expenses for the current portion and other non-current assets for the long-term portion in the accompanying condensed consolidated balance sheets. Amortization expense related to deferred commissions is included in sales and marketing expense in the accompanying condensed consolidated statements of income.

(6)ACQUISITIONS

2025

Edulink

On December 2, 2025, we acquired Edu.Link, Inc. (“Edulink”). Edulink is a SaaS company focused on educator evaluation, performance management, professional development, and compliance tracking geared specifically to the unique needs of K-12 schools. The total cash purchase price, net of cash acquired of $716,000, was approximately $37.3 million, subject to certain post-closing adjustments, including holdbacks of $2.5 million.

We have performed a preliminary valuation analysis of the fair market value of Edulink’s assets and liabilities. In connection with this transaction, we acquired total tangible assets of $2.5 million and assumed liabilities of approximately $6.6 million. We recorded goodwill of approximately $24.7 million, which is deductible for tax purposes, and other identifiable intangible assets of approximately $17.4 million.

CloudGavel

On November 19, 2025, we acquired CloudGavel, LLC (“CG”). CG is a SaaS company specializing in cloud electronic warrant solutions that allows for real time interaction for judges and law enforcement personnel. The total cash purchase price, net of cash acquired of $147,000, was approximately $16.6 million, subject to certain post-closing adjustments, including holdbacks of $2.9 million.

We have performed a preliminary valuation analysis of the fair market value of CG’s assets and liabilities. In connection with this transaction, we acquired total tangible assets of $0.9 million and assumed liabilities of approximately $0.9 million. We recorded goodwill of approximately $10.6 million, which is not deductible for tax purposes, and other identifiable intangible assets of approximately $7.6 million. We recorded net deferred tax liabilities of $1.6 million related to the tax effect of our estimated fair value allocations.

Emergency Networking

On July 28, 2025, we acquired Emergency Networking, Inc. (“EN”). EN is a SaaS company specializing in cloud-native software for fire departments and emergency medical services agencies. The total cash purchase price, net of cash acquired of $497,000, was approximately $19.4 million, subject to certain post-closing adjustments, including holdbacks of $2.5 million.

We have performed a preliminary valuation analysis of the fair market value of EN’s assets and liabilities. In connection with this transaction, we acquired total tangible assets of $1.6 million and assumed liabilities of approximately $1.3 million. We recorded goodwill of approximately $12.6 million, which is not deductible for tax purposes, and other identifiable intangible assets of approximately $9.1 million. We recorded net deferred tax liabilities of $2.1 million related to the tax effect of our estimated fair value allocations.

MyGov

On January 31, 2025, we acquired MyGov, LLC (“MyGov”), a provider of SaaS platform solutions for community development. The total cash purchase price, net of cash acquired of $215,000, was approximately $18.2 million.

We have performed a preliminary valuation analysis of the fair market value of MyGov’s assets and liabilities. In connection with this transaction, we acquired total tangible assets of $0.7 million and assumed liabilities of approximately $1.1 million. We recorded goodwill of approximately $10.4 million, which is expected to be deductible for tax purposes, and other identifiable intangible assets of approximately $8.5 million.

F-21

As of December 31, 2025, the purchase price allocations for Edulink, CG, MyGov and EN are not final; therefore, certain preliminary valuation estimates of fair value assumed at the acquisition date for intangible assets and receivables are subject to change as valuations are finalized. Our balance sheet as of December 31, 2025, reflects the allocation of the purchase price to the net assets acquired based on their estimated fair value at the date of the acquisition. The fair value of the assets and liabilities acquired are based on valuations using Level 3 unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The actual operating results of Edulink,CG, EN, and MyGov, from their respective dates of acquisition, are included in the operating results of the ES segment. Also, the impact of these acquisitions on our operating results, assets, and liabilities is not material, individually or in the aggregate.

During the twelve months ended December 31, 2025, we paid $7.7 million in cash for long-term indemnity holdbacks related to prior acquisitions.

In the twelve months ended December 31, 2025, we incurred fees of approximately $714,000 for financial advisory, legal, accounting, due diligence, valuation, and other various services necessary to complete acquisitions. These costs were expensed in 2025 and are included in general and administrative expense in the accompanying consolidated statements of income.

2024

We did not complete any 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.

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

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


	Useful Lives (years)	2025		2024
Land	—	$	23,181	$	23,163
Building and leasehold improvements	5-39	178,585		181,066
Computer equipment and purchased software	3-5	93,400		99,156
Furniture and fixtures	5	35,483		34,495
Transportation equipment	5	251		222
		330,900		338,102
Accumulated depreciation and amortization		(170,545)		(174,327)
Property and equipment, net		$	160,355	$	163,775

Depreciation expense was $18.9 million in 2025, $23.3 million in 2024, and $25.0 million in 2023.

There were no expenditures for real estate and the expansion of existing facilities in 2025 and $7.5 million in 2024.

F-22

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


	Useful Lives (years)	2025		2024
Software development costs	3-7	$	136,565	$	118,698
Accumulated amortization		(68,194)		(42,581)
Software development costs, net		$	68,371	$	76,117

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


	2025		2024		2023
Amortization expense for software development costs recorded to cost of revenues	$	22,663	$	18,806	$	12,625
Amortization expense for software development costs recorded to general and administrative expense	1,862		1,601		930
Total	$	24,525	$	20,407	$	13,555

Estimated annual amortization expense related to software development costs:


2026	$	24,005
2027	17,811
2028	13,097
2029	9,485
2030	3,973

	$	68,371

(8)GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the two years ended December 31, 2025 are as follows:


	Enterprise Software		Platform Technologies		Total
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
Goodwill acquired related to the purchase of MyGov	10,368		—		10,368
Goodwill acquired related to the purchase of EN	12,611		—		12,611
Goodwill acquired related to the purchase of CG	10,639		—		10,639
Goodwill acquired related to the purchase of Edulink	24,742		—		24,742

Balance as of 12/31/2025	$	895,127	$	1,694,886	$	2,590,013

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


	2025		2024
Gross carrying amount of other intangibles:
Client related intangibles	$	987,423	$	958,924
Acquired software	296,710		284,900
Trade names	3,520		5,320
Leases acquired	2,394		4,585
	1,290,047		1,253,729
Accumulated amortization	(509,633)		(421,763)
Total other intangibles, net	$	780,414	$	831,966

F-23

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 $94.2 million in 2025, $96.9 million in 2024, and $111.0 million in 2023.

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


	December 31, 2025					December 31, 2024
	Gross Carrying Amount		Weighted Average Amortization Period	Accumulated Amortization		Gross Carrying Amount		Weighted Average Amortization Period	Accumulated Amortization
Non-amortizable intangibles:
Goodwill	$	2,590,013	—	$	—	$	2,531,653	—	$	—
Amortizable intangibles:
Client related intangibles	$	987,423	18 years	$	316,347	$	958,924	18 years	$	261,407
Acquired software	296,710		8 years	188,862		284,900		8 years	152,317
Trade names	3,520		11 years	2,143		5,320		12 years	3,902
Leases acquired	2,394		11 years	2,281		4,585		7 years	4,137

Estimated annual amortization expense related to other intangible assets:


2026	$	88,870
2027	86,225
2028	83,433
2029	65,659
2030	56,977
Thereafter	399,250
	$	780,414

(9)ACCRUED LIABILITIES

Accrued liabilities consist of the following at December 31:


	2025		2024
Accrued wages, bonuses and commissions	$	97,139	$	109,207
Other accrued liabilities	93,554		88,502
	$	190,693	$	197,709

(10)DEBT

The following table summarizes our total outstanding borrowings:


	Rate	Maturity Date	December 31, 2025		December 31, 2024
2024 Credit Agreement - Revolving credit facility	S + 1.125%	September 2029	$	—	$	—
Convertible Senior Notes due 2026	0.25%	March 2026	600,000		600,000
Total borrowings			600,000		600,000
Less: unamortized debt discount and debt issuance costs			(337)		(2,066)
Total borrowings, net			599,663		597,934

Current portion of convertible senior notes due 2026, net			599,663		—
Long Term - convertible senior notes due 2026, net			—		597,934
Total Debt			$	599,663	$	597,934

F-24

2024 Credit Agreement

On September 25, 2024, the Company entered into a $700.0 million credit agreement with the various lender parties 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 sub-facilities 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 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 defined 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. As of December 31, 2025, we had no outstanding borrowings, and we were in compliance with all covenants.

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 $600.0 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.

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, dated as of March 9, 2021, with U.S. Bank National Association as trustee (the “Indenture”). 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.

F-25

Before September 15, 2025, holders of the Convertible Senior Notes had 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 herein as “our common stock”) 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.

On September 15, 2025, we entered the Free Convertibility Period (as defined in the Indenture), during which the 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 in a combination of cash and shares of our common stock at maturity. 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 the principal amount of the Notes being converted. As of December 31, 2025, no conversions have occurred.

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.

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. Subject to certain exceptions, if 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. 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.

F-26

Effective Interest Rate

The weighted average interest rate for the borrowings under the Convertible Senior Notes was 0.25% as of December 31, 2025. For the twelve months ended December 31, 2025, the effective interest rate was 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,
	2025		2024		2023
Contractual interest expense - Revolving Credit Facility	$	(968)	$	(924)	$	(1,539)
Contractual interest expense - Term Loans	—		(761)		(16,016)
Contractual interest expense - Convertible Senior Notes	(1,500)		(1,500)		(1,500)
Amortization of debt discount and debt issuance costs	(2,527)		(2,746)		(4,574)
Total	$	(4,995)	$	(5,931)	$	(23,629)

As of December 31, 2025, we had one outstanding 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 2026.

(11) FINANCIAL INSTRUMENTS

The following table presents our financial instruments:


	December 31, 2025		December 31, 2024
Cash and cash equivalents	$	1,015,400	$	744,721
Available-for-sale investments	142,498		34,015
Equity investment	10,000		10,000
Total	$	1,167,898	$	788,736

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, 2025 and 2024, we have an accrued interest receivable balance of approximately $1.3 million and $227,000, 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, 2025, 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-27

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


	December 31, 2025		December 31, 2024
Amortized cost	$	142,515	$	34,225
Unrealized gains	127		3
Unrealized losses	(144)		(213)
Estimated fair value	$	142,498	$	34,015

As of December 31, 2025, we have $81.8 million of available-for-sale debt securities with contractual maturities of one year or less and $60.7 million with contractual maturities greater than one year. As of December 31, 2025, 11 available-for-sale securities with a fair value of $8.9 million have been in a loss position for one year or less and four securities with a fair value of $6.1 million have been in a loss position for greater than one year.

The following table presents the activity on our available-for-sale investments:


	Years Ended December 31,
	2025		2024		2023
Proceeds from sales and maturities	$	121,890	$	15,994	$	49,412
Realized gains (losses) on sales, net of tax	6		(18)		—

Our equity investment consists of a minority interest in the common stock of a privately held company that 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. On February 2, 2026, we signed a definitive agreement to acquire the remaining equity interest of this investment. See Note 20 “Subsequent Events” for more information.

(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, 2025:


	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	1,015,400	$	—	$	—	$	1,015,400
Available-for-sale investments	—		142,498		—		142,498
Equity investment	—		—		10,000		10,000
Convertible Senior Notes due 2026	—		607,500		—		607,500

F-28

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 investment	—		—		10,000		10,000
Convertible Senior Notes due 2026	—		731,310		—		731,310

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, 2025, we have $142.5 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, 2025, our equity investment consists of a minority interest in common stock of a privately held company. 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. On February 2, 2026, we signed a definitive agreement to acquire the remaining equity interest of this investment. See Note 20 “Subsequent Events” for more information.

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 2025, we completed our annual assessment of goodwill which did not result in an impairment charge. Further, for the year ended December 31, 2025,we identified no indicators of impairment to goodwill, property and equipment, and other intangibles; therefore, no impairment was recorded.

Financial instruments measured at fair value only for disclosure purposes

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 our Convertible Senior Notes:


	Fair Value at December 31,				Carrying Value at December 31,
	2025		2024		2025		2024
Convertible Senior Notes due 2026	$	607,500	$	731,310	$	599,663	$	597,934

F-29

(13)INCOME TAX

We adopted ASU 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" on a prospective basis beginning with the year ended December 31, 2025.

Income before provision for income taxes was as follows:


	Years Ended December 31,
	2025		2024		2023

United States	$	387,841	$	306,402	$	196,538
Foreign	2,477		1,765		1,698
Income before income taxes	$	390,318	$	308,167	$	198,236

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


	Years Ended December 31,
	2025		2024		2023
Current:
Federal	$	10,053	$	60,612	$	85,715
State	20,004		14,807		19,803
Foreign	807		385		503
Total current provision for taxes	30,864		75,804		106,021

Deferred
Federal	41,996		(27,089)		(63,649)
State	1,855		(3,574)		(10,055)

Total deferred provision for (benefit from) taxes	43,851		(30,663)		(73,704)
Income tax provision	$	74,715	$	45,141	$	32,317

A reconciliation of the provision for income taxes to the amount computed by applying the 21% U.S. statutory income tax rate to our effective income tax expense rate for operations after the adoption of ASU 2023-09 is as follows:


	Years Ended December 31,
	2025		%
U.S. federal statutory tax rate	$	81,967	21.0	%
State and local income taxes. net of federal income tax effect1	17,658		4.5
Foreign tax effects	287		0.1

Effect of cross-border tax laws	(121)		—
Tax credits	(18,398)		(4.7)

Nontaxable or nondeductible items
Excess tax benefits of share-based compensation	(15,047)		(3.9)
Executive compensation	4,009		1.0
Other	2,222		0.6
Changes in uncertain tax positions	2,138		0.5

Effective tax rate	$	74,715	19.1	%

1 State taxes in California, Illinois, Massachusetts, New Jersey, Virginia, Kansas, Texas, Pennsylvania made up the majority (greater than 50 percent) of the tax effect in this category.

F-30


	Years Ended December 31,
	2024		2023
Federal income tax expense at statutory rate	$	64,715	$	41,630
State income tax, net of federal income tax benefit	8,917		6,881

Excess tax benefits of share-based compensation	(21,143)		(9,325)
Tax credits	(22,095)		(20,494)
Non-deductible business expenses	4,786		5,191
Uncertain tax positions	10,109		7,647
Other, net	(148)		787
	$	45,141	$	32,317

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


	2025		2024
Deferred income tax assets:
Capitalized research and experimental expenditures	$	96,038	$	157,812
Operating expenses not currently deductible	11,961		8,593
Share-based compensation and other employee benefit plans	24,842		22,095
Loss and credit carryforwards	5,349		5,836
Deferred revenue	7,516		1,670
Other	9		55
Total deferred income tax assets	145,715		196,061
Valuation allowance	(1,133)		(794)
Total deferred income tax assets, net of valuation allowance	144,582		195,267

Deferred income tax liabilities:
Intangible assets	(211,411)		(223,459)
Property and equipment	(8,794)		(5,624)
Prepaid expenses	(19,440)		(13,687)
Total deferred income tax liabilities	(239,645)		(242,770)
Net deferred income tax liabilities	$	(95,063)	$	(47,503)

On July 4, 2025, the reconciliation bill, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA includes a broad range of tax reform provisions that may affect our Company. The OBBBA allows an elective deduction for domestic Research and Development (“R&D”), a reinstatement of elective 100% first-year bonus depreciation, and a more favorable tax rate on Foreign-Derived Deduction Eligible Income and income from non-U.S. subsidiaries (“Net CFC Tested Income”), among other provisions. In 2025, we recognized the effects of the OBBBA, which resulted in a $72.9 million decrease in our deferred tax asset associated with capitalized research and experimental expenditures and a corresponding reduction in current income tax liabilities. The legislation did not have a material impact on our income tax expense for 2025.

As of December 31, 2025, we had after-tax federal and state net operating loss and net tax credit carryforwards of $5.3 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 2025 for $1.1 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.

F-31

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


	2025		2024
Balance at beginning of period	$	29,755	$	20,869
Additions for tax positions of prior period	2,095		4,970
Reductions for tax positions of prior period	(103)		—
Additions for tax positions of current period	5,078		4,346
Settlements	(496)		—
Expiration of statutes of limitations	(4,190)		(430)
Balance at end of period	$	32,139	$	29,755

As of December 31, 2025 and December 31, 2024, we had uncertain tax positions of $34.3 million and $32.2 million, including interest and penalties of $2.2 million and $2.4 million, 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 $31.0 million, $28.6 million and $20.1 million as of December 31, 2025, 2024, and 2023, respectively.

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 2021. As of February 18, 2026, no significant adjustments have been proposed by any taxing jurisdiction.

The Company paid income taxes in the following jurisdictions as of December 31:



	2025
U.S federal taxes	$	26,007
State and local taxes
California	2,289
Other	11,825
Foreign taxes	640
Total income taxes paid	$	40,761

The amount of cash income taxes we paid during the years ended December 31, 2024 and 2023 was $84.2 million and $142.8 million, respectively.

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(14) SHAREHOLDERS’ EQUITY

The following table details activity in our common stock:


	Years Ended December 31,
	2025			2024			2023
	Shares	Amount		Shares	Amount		Shares	Amount
Treasury stock purchases	(303)	$	(174,650)	—	$	—	—	$	—
Exercise of stock options and vesting of restricted stock units	505	49,373		739	97,474		514	44,697
Issuance of shares pursuant to employee stock purchase plan	39	18,848		43	17,631		52	16,196
Employee taxes paid for withheld shares upon equity award settlement	(84)	(46,229)		(78)	(40,261)		(74)	(27,737)
Issuance of shares for acquisitions	—	—		—	—		15	5,675
Reimbursement of shares from escrow	—	—		(30)	(10,425)		—	—

During 2025, we repurchased approximately 303,067 shares of our common stock for an aggregate purchase price of $174.7 million.

As of February 18, 2026, we have remaining authorization from our Board of Directors to repurchase up to $885.0 million of our common stock under the new repurchase plan.

(15) 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, 2025, there were 3.9 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.

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.

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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 2025, 2024 and 2023, no stock option awards were issued; therefore no Black-Scholes model assumptions are reportable.

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, 2024	739	$	248.52
Granted	—	—
Exercised	(239)	206.54
Forfeited	—	—
Outstanding at December 31, 2025	500	$	268.58	3	$	94,332
Exercisable at December 31, 2025	493	$	266.69	3	$	93,798

We had unvested options to purchase approximately 7,500 shares with a weighted average grant date exercise price of $392.95 as of December 31, 2025, and unvested options to purchase approximately 40,000 shares with a weighted average grant date exercise price of $371.20 as of December 31, 2024.

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


	2025		2024		2023
Weighted average grant-date fair value of stock options granted	$	—	$	—	$	—
Total intrinsic value of stock options exercised	$	89,332	$	159,022	$	58,261

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, 2024	661	$	435.18
Granted	231	545.22
Vested	(266)	435.99
Forfeited	(18)	493.99
Unvested at December 31, 2025	608	$	474.97

F-34

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,
	2025		2024		2023
Cost of revenues	$	36,129	$	31,322	$	26,607
Operating expenses	115,147		91,491		81,731
Total share-based compensation expense	151,276		122,813		108,338
Total tax benefit	(52,264)		(62,593)		(32,997)
Net decrease in net income	$	99,012	$	60,220	$	75,341

As of December 31, 2025, we had $191.7 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 2.0 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, 2025, there were 443,000 shares available for future issuances under the ESPP from the 2.0 million shares previously approved by the stockholders.

(16) EARNINGS PER SHARE

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


	Years Ended December 31,
	2025		2024		2023
Numerator for basic and diluted earnings per share:
Net income	$	315,603	$	263,026	$	165,919
Denominator:
Weighted-average basic common shares outstanding	43,095		42,611		42,024
Assumed conversion of dilutive securities:
Stock awards	590		793		745
Convertible Senior Notes	127		93		—
Denominator for diluted earnings per share - Adjusted weighted-average shares	43,812		43,497		42,769
Earnings per common share:
Basic	$	7.32	$	6.17	$	3.95
Diluted	$	7.20	$	6.05	$	3.88

Stock awards representing the right to purchase common stock of approximately 66,000 shares in 2025, 67,000 shares in 2024, and 343,000 shares in 2023, 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, 2025 and 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, 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.

F-35

(17) 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, 2025. 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 2025 and 2024, and $6.4 million in 2023, respectively.

The components of operating lease expense were as follows:


Lease Costs	Years ended December 31,
	2025		2024		2023
Operating lease cost	$	10,958	$	9,166	$	19,468
Short-term lease cost	2,046		2,124		2,121
Variable lease cost	952		768		1,009
Net lease cost	$	13,956	$	12,058	$	22,598

Supplemental information related to leases is as follows:


Other Information	Years ended December 31,
	2025			2024			2023
Cash flows:
Cash paid amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	12,368		$	12,578		$	12,555

Right-of-use assets obtained in exchange for lease obligations (non-cash):
Operating leases	$	13,318		$	4,404		$	3,383

Lease term and discount rate:
Weighted average remaining lease term (years)	6			6			7
Weighted average discount rate	3.60		%	3.22		%	1.59		%

As of December 31, 2025, maturities of lease liabilities were as follows:


Year ending December 31,	Amount
2026	$	10,602
2027	10,278
2028	6,719
2029	5,602
2030	5,132
Thereafter	9,526
Total lease payments	47,859
Less: Interest	(4,914)
Present value of operating lease liabilities	$	42,945

Rental income from third parties

We own office buildings in 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. 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 2026 and 2035, 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.

F-36

Rental income from third-party tenants was $2.7 million in 2025, $3.2 million in 2024, and $2.1 million in 2023. Rental income is included in hardware and other revenue on the consolidated statements of income. As of December 31, 2025, future minimum operating rental income based on contractual agreements is as follows:


Year ending December 31,	Amount
2026	$	2,538
2027	2,276
2028	2,029
2029	1,355
2030	1,385
Thereafter	4,196
Total	$	13,779

As of December 31, 2025, we had no additional significant operating or finance leases that had not yet commenced.

(18) 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 $20.7 million in 2025, $19.1 million in 2024, and $18.6 million in 2023.

(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 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. A December 2025 mediation did not result in a resolution of the dispute. 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. Amounts reserved related to this matter are included in our allowance for losses and sales adjustments as of December 31, 2025. 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, 2025, the remaining aggregate minimum purchase commitment under these arrangements was approximately $569 million through 2031. Future minimum payments related to purchase commitments based on contractual agreements are as follows:


Year ending December 31,	Amount
2026	$	87,356
2027	83,537
2028	90,631
2029	93,436
2030	103,436
Thereafter	110,936
Total	$	569,332

F-37

(20) SUBSEQUENT EVENTS

On February 2, 2026, we signed a definitive agreement to acquire the remaining equity interest of privately held company in which we currently hold a minority interest. The transaction, which has a cash purchase price of approximately $212.5 million, is expected to close in the first quarter of 2026, subject to the satisfaction of customary closing conditions and regulatory approvals.

F-38

Previous: Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.