Tyler Technologies at Wells Fargo Summit: Strategic Growth and Cloud Transition

On Tuesday, 18 November 2025, Tyler Technologies (NYSE:TYL) presented its strategic vision at Wells Fargo’s 9th Annual TMT Summit. The company outlined its progress towards 2025 and 2030 targets, emphasizing cloud transition, transaction business growth, and margin expansion. While Tyler is on track with its strategic goals, it faces challenges from external factors affecting customer sentiment. Nevertheless, the company remains optimistic about leveraging AI and expanding its market presence through acquisitions.

Key Takeaways

• Tyler Technologies is on track or ahead of its 2030 targets, with significant progress in transaction business growth and cash flow margins.
• The company aims to achieve a 30%+ operating margin and $1 billion in free cash flow by 2030.
• Over 85% of revenues are recurring, primarily from SaaS, maintenance, or transactions.
• Cloud transition is a major focus, with 80% of on-prem customers expected to migrate by 2030.
• M&A activities are expected to increase, focusing on strategic and cultural fit.

Financial Results

• Tyler is on track to exceed its 2030 financial targets, particularly in transaction business growth.
• The company achieved higher cash flow margins than initially planned.
• Operating margin expansion is targeted from 23% in 2023 to over 30% by 2030.
• SaaS revenue is expected to grow by approximately 20% next year, with pricing and migration contributing significantly.

Operational Updates

• Cloud Transition: High 90s percentage of new sales are cloud-based, with 80% of on-prem customers expected to migrate by 2030.
• NIC Integration: Focus on cross-selling and integrating NIC’s payment engine, enhancing efficiencies.
• Customer Migration: Sunsetting older product versions to facilitate cloud migration, with new features available only in the cloud.

Future Outlook

• AI is expected to play a significant role in driving revenue and cost benefits.
• The company aims to become a $4 billion entity with $1 billion in free cash flow.
• Increased M&A activity is anticipated, focusing on strategic acquisitions that align with Tyler’s growth objectives.

Q&A Highlights

• Tyler is progressing well in its cloud migration journey, with significant predictability and margin benefits.
• The company is actively assessing M&A opportunities, with a keen interest in AI and other strategic areas.
• Key priorities for the coming year include investments in AI and enhancing product competitiveness.

For a detailed understanding, readers are invited to refer to the full transcript below.

Full transcript - Wells Fargo’s 9th Annual TMT Summit:

Unidentified speaker: Tyler Technologies with us. Brian, thanks for making time.

Brian, CFO, Tyler Technologies: Sure.

I’m sure you’re always busy, especially heading into the holidays this time of year. I don’t wanna belabor with the entire history of Tyler, which is, you know, long-standing at this point in time. But maybe if you could start off with just an overview of the past couple of years for Tyler. I know cloud has been top of mind. We’ll get into some of the 2030 targets, but just engaging progress and maybe where you expected Tyler to be in.

Yeah.

2025 a few years ago.

Yeah, sure. It’s probably a good time frame because we had a big investor day in 2023.

Yeah.

Post the acquisition of NIC, us getting into the state business, payments business, we were sort of at an inflection point in our cloud transition. We thought it was a good time to sort of reframe everything and make sure everyone was aligned with how, where we saw the company going over the next few years. We set some targets for 2025 and then for 2030, which was certainly much further out than we typically.

Yeah.

Talked about long-term targets. Now here we are, close to the end of 2025, and happy to say that we’re really on track or ahead of plan to achieve all of those 2030 targets. For 2025, we’ve really achieved higher growth around our transaction business than the targets we originally set out, so that is going well. We’ve also achieved significantly higher cash flow margins than we planned. Those are the two areas where we’ve really sort of, are really ahead of track. We’re right on track for the flips of our on-prem customers to the cloud. That’s not a linear process, but we’ve said we’re comfortable with the targets that we set for 2030 and the progress we’ve made towards those. Made a lot of progress towards margins, and that’s on track as well.

So really feel really good about where we are two years in. Plan to have another investor day next, mid-year next year.

Okay.

Expect that we’ll be updating.

Providing some more updates.

Providing some more updates. One of the interesting things was in 2023, AI was not really in our vocabulary. Amazingly, there really was not any, either from a revenue perspective or from a cost efficiency perspective.

Yeah.

that wasn’t a part of those targets. We’ll be, probably looking to frame those a little bit more as, as, we have a number of activities both on the internal use side and, and in our products going on around AI. Yeah, we, we talked about, long-term margin expansion of going from a 23% operating margin in 2023 to a 30% plus margin in 2030.

Yep.

and achieving a target of $1 billion in free cash flow by that point.

Can you just speak a little bit to the visibility you have as CFO into kind of framing those targets? I know Tyler has a broad customer base, but there’s been a predictability to the business. Maybe you can just provide a little bit of what you see from the CFO perspective there.

Yeah. It’s a good place to be. We operate in a market that’s not the most exciting market in the world. There’s never explosive growth. It’s not, you know, a super high growth market, but it’s also one that provides really steady, reliable kinds of growth, serving—we serve exclusively the public sector. We’re very broad in terms of the size of governments we serve, the breadth of governments we serve, and the levels of government from state and local or local to state to a very small presence in the federal government. The government market is slow-moving, long sales cycles. Typically we have, although the timing you’re never sure of, we have pretty good long-term visibility.

A lot of our sales, the ultimate driver of governments acquiring software is that their old system is at end of life and they’ve used it as long as they possibly can. It’s about to die and they have to replace it. That may mean they bought that 20 or 30 or sometimes 40 years ago.

Amazing.

A lot of homegrown systems that are no longer supportable, and these things all automate mission-critical functions of government: public safety, 911, courts, property taxes, licensing and permitting, utility bills. These are all very, sort of essential functions of government. With that as the broad backdrop for our business, it gives us good long-term predictability. We have more than 85% recurring revenues today, either from SaaS, maintenance from on-prem customers, or transactions. You know, a big recurring revenue base and a lot of growth opportunities within that base and with new logos as well.

Yeah. So this year, and maybe it’s less of a conversation point directly for Tyler, but overall it was a bit of a different year in terms of public sector because of DOGE and some of the federal impacts. I know you’ve been clear on some of the more recent earnings calls and the difference between what state and local sees and what federal government sees. Was there any difference at all in the metrics that you track this year? Was there any hesitation just in terms of uncertainty that rippled into some of your customers at all? How would you characterize this year?

Yeah.

relative to prior?

Definitely with some noise, especially in the beginning of the year, that led to some uncertainty in our customers, but ultimately not really an impact on our customers. There really was not any fundamental change in demand, either short-term or long-term. All the noise and especially at the beginning of the year, DOGE and everything that went with that, tariffs, just the new administration, all of that created a lot of noise. Now our business, as I said, is mostly local, 70-75% with local government, cities, counties, school districts, roughly 20-25% state. Our state business is almost all under a self-funded model, so transaction-based model. It is all, or almost all, funded by convenience fees and user fees that citizens or businesses pay to interact with government. It is not appropriated funds. It is not driven by budgets.

That model is fairly insulated. Only about 4% with the federal government. It was really more of a, in terms of sales processes, a lot of local governments at all levels sort of took a pause and said, "I need to figure out if all this stuff really impacts me or if something’s going to change." Ultimately, pretty much came to the conclusion that, "No, this doesn’t really affect us." There was a little bit of a slowdown in bookings in the first quarter that I think we’ve largely sort of proven up that was a very short-term phenomenon and that it really hasn’t been any fundamental change. In the longer term, we really look at, not necessarily just DOGE itself, but the whole increased focus on government efficiency as definitely a tailwind.

Yeah.

because the way governments get more efficient is through the use of technology. Often, they are inefficient in part because their processes are inefficient because they are governed by old technology. So they can’t do things online or they can’t provide citizen self-service.

Yeah.

or they don’t have AI capabilities. So really, increasingly, governments are starting to kind of change from that idea that, "I’m just gonna use it until it dies and then I’ll replace it," to, "Yeah, there is an ROI, and if I, if I replace this, I can get these efficiencies." Big issues with staffing shortages.

Yeah.

Governments typically don’t have enough people to do the essential things they need to do, and they have a shrinking workforce, whether it’s from retirements or just people shifting into the private sector. That’s a big challenge for them. All those things are, our technology is the solution to it.

Yeah. This is what I was gonna follow up on, and you kind of beat me to the punch a little bit, but just have you found a way to kind of shift your go-to-market message or sales strategy to now respond to some of the questions that are out there around efficiencies or reasons to use technology? If we look at some of the major sub-segments that you serve, are there specific, like, sub-verticals, ERP, or some other area where you think those are maybe more direct potential, just soft tailwinds for your business?

Yeah. I don’t know that any of the verticals or sub-verticals are particularly different. There’s opportunities across really all of them. Yeah, it’s always been a little bit of a point of frustration for us that it’s hard to accelerate demand. Even though there is this good ROI story, and there always was, it’s not just new, that you replace a paper-based system with, you know, a totally digital system, and there’s cost savings there, that have a very fast return. One of our courts customers, a top five county in the country, had a staff of 10 people whose only job was to push shopping carts of court files to the courtrooms every day, stack them on the judge’s benches, and take them back at the end of the day. Our system is entirely digital when they replaced it.

They have those people, I don’t know what those people do now, but they don’t do what they did. The doc, there are no paper documents in the courts anymore. The judge has an electronic bench. The massive amounts of storage space that they used to keep all this paper in is gone, and there’s an environmental impact as well.

Yeah.

There was a really clear ROI, but they still did not do it because of that. They did it because the old system was 40 years old and there were not any more COBOL programmers. It has always been a little frustrating. Now that there is maybe a little bit more change, a little bit more openness, a different way of looking at things, that excites us that there is an opportunity, that that story resonates with customers a little bit more now because they are hearing about it and they are feeling the pressure.

Yeah.

It does away with a little bit of the inertia. It’s not like a, a total shift.

Sure.

We haven’t seen, you know, thousands of RFPs come flooding in to replace old systems, but it, it’s.

Yeah.

Sort of gradual and it feels different.

Yeah. That’s why I said modest tailwind.

Yeah.

I know that’s very helpful. You reported three key results recently, and it seemed to be a bit of a stabilizing force given you mentioned some of the questions around first quarter and bookings. I think the commentary was fairly consistent in terms of RFP volume and deal activity and some of the indicators that you look at. Maybe just frame for those who weren’t necessarily fully paying attention to 3Q, what the highlights, key takeaways from your perspective should have been for Tyler.

Yeah. As we talked about, after Q2, largely the uncertainties around the first quarter were behind us. We said in Q2 we saw bookings grow sequentially from Q1, and we said you should expect that in Q3 again, and that happened. In addition to that, there are a couple of things that kind of are around bookings noise in general. We had what I just talked about in terms of some of the slowdowns, the very short-term slowdowns from DOGE noise. We also had some bookings that were pulled into last year that would have naturally occurred this year because of the deadline for ARPA for the stimulus funds at the end of last year. Then we had a really extraordinarily strong second half of last year with new logo sales, especially around large deals.

That is really just reflective of inherent lumpiness in the business. There were just a number of large deals that happened to close in the second half of last year. That has created a tough comp for this year. Against that backdrop, we really kind of achieved what we expected. We said that as we look at completing the year, our sales for the year are pretty much right where we thought they would be at the beginning of the year. Hopefully, we have put a lot of that noise to bed. We have also talked about at least a preliminary look at next year’s SaaS revenue growth because we heard concerns that bookings in, especially in the first part of this year, what impact that would have on next year’s SaaS growth.

We talked about an expectation that we’ll still have around 20% SaaS growth next year, and to try to get better.

Yeah. That makes sense. I was gonna ask why. And so just the visibility that you have into next year at this point for 20%, your confidence level in, in putting that baseline out initially. And then if bookings are lumpy, which I, I think we can appreciate they would be in your business, is it better to look at trailing 12, 24 months?

Yeah.

What would you encourage investors to spend more time focusing on?

Yeah. I mean, you really have to do it. I mean, if we think of the last two years taken as a whole, pretty good.

Yeah.

Combined, the, so yeah, trailing 12 or 24 months really does create, does kind of wipe out some of that lumpiness, and give probably a more accurate picture. There’s also a lag from the time bookings are signed, a deal is signed, whether it’s a new, new SaaS deal or a flip of an on-prem customer, to when those revenues actually hit. It could be a quarter, a couple of quarters. When we kind of deconstructed that 20% growth for next year, we get about 12% growth from things that are already bookings that have already happened going into 2026. Those could be even deals we signed in 2024 that we only had a partial year of revenues this year. Next year we’ll have a full year. All the deals we sign in 2025, generally we have a partial year of revenue.

We’ll have a full year. If they’re signed in the fourth quarter, we may have no revenue this year from those. And then pricing increases across our customer base, which typically, you know, kind of in the 4-5% range. That accounts for 12% growth. About 3% comes from flips. So the on-prem customers moving to the cloud, we typically get a 1.7 times uplift on from maintenance revenue to SaaS. We’ve said that we’ve got sort of this bell-shaped curve over the next few years as we move towards getting, say, 85% of our customers migrated to the cloud by 2030. The peak is still a couple of years out, but we have decent visibility over that. The timing always can be kind of a little bit uncertain, but feel pretty good about the number, that percentage.

About 5% of next year’s SaaS growth will come from bookings next year.

Okay.

New logo sales, add-on sales to existing customers, which really are the majority of those bookings. That is that last 5%. Pretty good visibility over all of them. There is always timing around all of those things that can vary a little bit, but we wanted to kind of give that expectation that we are still in that ballpark.

Where would you say Tyler is? I appreciate your, you’re kind of building towards this with some of the commentary around the cadence of when, you know, flips. We’ve seen you give more metrics than most companies around some of the moving factors in the model. If I asked you sort of to set the stage of what inning Tyler is in its cloud migration journey or where you’re at from a repeatability standpoint, meaning now you have confidence, you’ve seen it enough times so you can go faster.

Yeah.

Where would you say you are in terms of the cloud journey today? You know, what are you embedding towards those 2030 targets alongside that?

Yeah. There’s kind of two parts to that. There’s the new business, and that really is almost entirely in the cloud now. Go back to 2019, we were about half and half. Half our new sales were on-prem, half were cloud. We were cloud agnostic. We did not really try to push people one way or another. We let the market decide. In 2019, we kind of changed that and said we are cloud first. We really only want to sell software in the cloud. Today, high 90s % of our new sales are cloud. We sell a little bit of licenses back to current on-prem customers and a little bit in public safety, but almost all there in terms of new business. We have decades of on-prem customers, and many of them are still on-prem.

We’ve been migrating customers for a long time already, but again, accelerated that in 2019 when we partnered with AWS and made a decision to exit proprietary data centers and put customers in AWS. That created an opportunity or the ability for us to accelerate that, rather than us trying to scale data centers, which did not make sense. As we talked about in 2023, if you look at the customer base that was still on-prem at that point, we said we expected 80% or more of that customer base to move to the cloud by 2030.

Mm-hmm.

that it would, continue to kind of accelerate over the next several years and with a peak in the probably 2027, 2028, maybe 2028, 2029 timeframe, somewhere in there. we, had a number of gating items around that. One is that we supported, have historically supported a lot of versions of a lot of software products, which is expensive. a lot of development resources, a lot of support resources, spent on that. obviously the goal in the cloud is one version of every product that everyone’s on, that everyone upgrades at the same time in little bite-sized bits. better client experience, but much better for us. we have been sunsetting older versions of products, consolidating versions, so reducing that version sprawl and getting down to now where most, the major products were down to a couple of versions.

We’re not quite all the way there, but we’ve made a lot of progress, which then puts more customers in a position to move to the cloud. We’ve also, we’ve talked a lot about carrots and sticks. Increasingly, we have, I was told that our accounting department was gonna dress up as carrots and sticks for Halloween. I’m not sure, I was out of town that day. We have talked about, initially, we’re increasingly telling customers that while we’ll support on-prem products for a fairly extended period of time, new features will only be available in the cloud.

Yeah.

You’ll get bug fixes and legislative changes, but new features you’ll only get if you move to the cloud. Then longer term, we have the ability to look at higher maintenance increases to help drive people. Ultimately, we have the ability to discontinue support for on-prem server products, but I think that’s probably still a ways off. If you look at our whole customer base today, and if you take all the on-prem maintenance customers and convert that to SaaS equivalent revenues, we’re kind of about half and half.

Okay.

Still about half our customer base in terms of revenue, left to move. We still have about $450 million of maintenance that will turn into 1.7 times that in, in SaaS, and so that will create a, you know, a fairly steady incremental revenue growth over these next several years. Then it’ll peak and then it’ll start to, to tail off as we get on the downhill side. It’s kind of a good balance. We’ve, we’ve again, we’re doing the things we need to do to get people in line, but excited about getting everyone to the cloud.

I think the key thing really is over the last couple of years, our customers, it’s changed from kind of convincing them why they should be in the cloud and why it’s good for them, why it’s a better experience, to really, I think pretty much everybody knows they’re gonna be in the cloud and they know why.

Yep.

They agree with that. It’s just a matter of when and what’s their process to get there.

Yep.

Our on-prem base still is more heavily weighted towards large customers. There can be some lumpiness around those flips as we go forward, but there’s still a lot of impact left from bigger customers moving.

Can you touch on, I mean, there were several things in that response that seemed like they would be margin enhancing over time. You mentioned kind of moving away from some of the data center footprint that you were managing, the single versions of cloud, just all of the consolidation that goes into that. So just what that gives you from a predictability and margin standpoint and, you know, maybe embed that with the 2030 targets and.

Yeah. Yeah. In terms of the margin expansion we expect to get through 2030 and beyond, it doesn’t end in 2030, but we talked about those interim targets. Those weren’t ceilings, but.

Right.

Targets. A lot of that comes from the cloud transition and those things we just talked about. The version consolidation is a really big part of it in terms of the impact on both dev costs and support costs. The scale we get as we continue to scale in AWS and the lower unit costs we get from buying more and more capacity from them. The release of cloud optimized versions of our products that are more efficient to run in the cloud, those are all things that we are well down the path with. And then just the ability to deploy software more easily, to cross-sell more easily when the customer’s already in the cloud, to layer on things like AI capabilities.

Yeah.

That, so a lot of our margin expansion from 2023 to today has come at the OPEX line.

Yep.

Or lines. More of what’s, some has come from the gross margin line. More of what’s left to come is coming from, will come from the gross margin line. There’s some invest at the data centers as well. Eliminating those costs and, especially, we’ve had duplicate costs because we’ve been putting customers in AWS, but still have a lot of fixed costs around our data centers. As we exit that last data center this year, over the next year or so, those costs will bleed off, and we’ll see some enhancement there. A bunch of factors there that all kind of play together. We see a really good path towards margins that start to look a lot more like a more mature SaaS company.

Yep.

Would be expected to look like.

Perfect.

Now we do have a big payments business layered in our business as well.

Oh, that’s good.

That doesn’t have the same margins, but generates a lot of cash, so.

Yep. You’re right on script. I feel like you can read my, not my illegible handwriting, in some way, shape, or form because I want to touch on NIC and the payments opportunity. I know you and I spent a lot of time talking about this after last earnings print. Transaction revenue has been a source of strength.

Mm-hmm.

You’re marching well in stride with the target levels. I think we’ve been kind of watching, engaging progress in NIC to understand the cross-sell opportunity. I’m wondering from your perspective, what’s driving the sort of the durable transaction revenue growth and how you would characterize your progress with cross-sell.

Yeah.

Between NIC and the core Tyler offerings.

Yeah. So when we acquired NIC in 2021, kind of two big cross-sell opportunities. They brought us a big presence in the state government market with these very deep enterprise relationships that we thought we could sell Tyler software products into, into state governments. It was not historically a significant market for us, but also taking the NIC payments engine that is processing tens of billions of dollars of payments for state governments primarily.

Yeah.

Leveraging that into our customer base to integrate it tightly with Tyler software products and create an integrated payment solution with the system of record. We have a lot of products that produce bills, have payments that are associated with them, utility billing, municipal courts, traffic tickets and fines, licensing and permitting, property taxes, parks and recreation, all kinds of systems that have payments flying around them. We did not typically process those payments. We had some third-party relationships where we basically were a reseller and we get a revenue share. We still have some of those in place, although we do not sell new ones.

We have, since the acquisition, done those integrations that now have a sort of, it goes beyond a commoditized payment system, but because of the integration with the system of record, it provides efficiencies around automating reconciliations, providing better reporting. It is a better solution for the client. They are willing to pay more for that. It has higher margins than a commoditized payment system. We have had early success in selling that into our existing software customers. Still have a lot of room to go there. We are still in the fairly early days of that. In bundling it with new software sales, we sell a new utility billing system, we give them a payments proposal as well and having success with that, and over time replacing other payment providers with those customers.

Disbursements, so the outbound side of payments is also an area we’re focusing on, because we have a big presence with ERP systems and payables, and we have court systems that facilitate jury payment, jury duty payments. We have correction systems that manage funds for inmates that have payments associated with that. A lot of opportunities there that we are in the very, very early stages of. As we’ve talked about this sort of CAGR of 10-13% for our transaction revenues through 2030, we’re running ahead of that. Some of that is some of the kind of early low-hanging fruits, but we do believe there’s a long runway of durable growth there. We’ve seen some outsized growth from some of our third-party payment partners running rate changes through, that’s provided higher revenues to us. I think that’s largely run its course.

But we’ve also seen a lot of volume, higher than expected volumes. We work with our customers. Our customers try to drive more transactions online and they’re having success with that. I guess the last thing around transaction growth has been sort of a hybrid model where we have, in a number of instances, sold software to a customer, but it’s being paid for through transaction fees.

Okay.

Here in California, actually the largest contract Tyler’s ever signed in its history, of estimated total value of about $200 million over eight years, we provide our outdoor recreation systems at the California State Parks. Managing all the aspects of running the state parks. We, but rather than the state having to appropriate budget and find money to pay a SaaS fee, they’re paying for that through adding convenience fees to charges that they charge users.

Mm-hmm.

You reserve a campground, you pay $15, you might be a $3 charge to Tyler. Tour the Hearst Castle, pay a $20 ticket, $3 charge to Tyler. Rent a kayak, all that kind of stuff. The state does not have to budget money. We get paid through transaction fees, that are fairly predictable.

Mm-hmm.

Book of transactions. It’s not straight line, so it can be seasonal. But it’s a little bit not as visible because it shows up in transaction revenues, not in software revenues.

Okay.

Our SaaS growth actually would be better and our SaaS bookings would be better if those were pure SaaS.

Yep.

We also process all those transactions as well. We are the payment processor. We have got a little bit of a hybrid model in there that we are sort of in a unique position to be able to offer that because of our payment capabilities.

Mm-hmm.

And our software solutions. We’ve seen that in some outdoor recreation and some motor vehicle registration systems as well.

Mm-hmm.

It kind of shows the flexibility that we have, but has also driven a little bit higher than planned transaction growth.

Sounds like a win-win. I assure you California residents aren’t balking at the, the biggest fee relative to parks.

Yeah.

Yeah, exactly.

Yeah.

I wanted to just try to touch on a couple more with the time left. M&A has always been a part of the capital allocation strategy. I think NIC to a bit bigger than typical, but what do you see in the private markets currently from a deal perspective? How would you assess the landscape and are there certain areas, whether it’s AI or something else where you’d maybe have a bit more interest or intent?

Yeah. We talked, on our third quarter call some about, maybe a little more, proactive and intentional approach to, to, M&A going forward. After the NIC acquisition, which was a $2.3 billion acquisition that included a debt component, we, we had debt. And typically we have not had debt or much debt. It still was not a lot of debt. We were leveraged at the peak, a little over three times, but paid that down very rapidly, deleveraged, and paid off the last of the term debt, well ahead of schedule. With that behind us, we have a convert, that is $600 million that matures next spring. We have well over $1 billion in cash on the balance sheet today. We will be debt-free fairly soon. We have got plenty of capital capacity.

We’ve also been, I guess, a little bit more constrained, or we said the bar has been high on acquisitions because of management bandwidth, because of all the things I talked about around the SaaS transition and the payments.

Exactly.

A lot of big initiatives that have consumed a lot of management time. And we said, you know, let’s not throw a bunch more acquisitions on top of the people that are running these business units.

Sure.

Doing all that. A lot of that is behind us now. We’ve said that M&A is, we’re, we’re a little bit more open today, not changing our criteria around a strong strategic fit, a good cultural fit, and a reasonable valuation. Generally looking for acquisitions that could be small tuck-ins or even bigger adjacencies that fill in gaps in our portfolio, that fill in an adjacent market, things that we can leverage our sales force, put more products in the same sales reps’ bags that we can sell to our existing customer base to drive more cross-sell. Ideally, if there’s a payments opportunity on top of it, that’s good. If there’s an AI opportunity on top of that, that’s good.

I think from when we talk about a more intentional approach, it’s really not just looking at things that are for sale because we do get shown about anything in the GovTech space, but also, you know, identifying and prioritizing those needs and then going out and approaching companies that fit those needs, and seeing if we can make deals. We think there’s a big, big universe of those kinds of companies and we’re prioritizing that, but I’d expect us to be more active over the next couple of years. Also, you know, it could, you know, talking about whether we’d rather do a handful of mid-sized acquisitions or one or two big acquisitions and the pluses and minuses of each of those.

In the private market, there are a lot of PE-owned GovTech businesses now.

Sure.

Some of which have pretty good scale, none close to Tyler size, but decent-sized businesses. And, and based on, you know, where they are in the PE life cycle, they’ll likely be in the market over the next couple of years.

Sure.

valuations, it’s still kind of a little early. See, obviously public markets have reset a lot of software companies’ valuations.

Yeah.

It’s still maybe a little too early to see if private sellers have adjusted their expectations or if.

Yeah.

If they’re still kind of think have something in mind that’s more like, looking backwards a little bit.

2022.

In terms of valuation, we feel good about our ability. I’ve been at the company for 28 years and we’ve done more than 60 acquisitions during that timeframe, and we feel like that’s a core competency of the company that we’re good at. That’ll continue to be a part of our growth going forward.

Last one for you, Brian, and then you’re off the stage. Just things that are top of mind for you in planning for next year. And then if we’re here in three years, what do you think we’ll be talking about with Tyler?

Yeah. I think right now we, you know, we gave some indication, some of our revenue, not all of our revenue guidance, but some of it. We have, but really what’s in the thick of right now is figuring out exactly what our investments will be. We’ve got some elevated investments in the second half of the year that’ll carry into next year around some AI projects, some product competitiveness initiatives to kind of stay ahead. And, still determining exactly what that level of investment will be, at least in the next year or so. All of that is still in the framework of those long-term margin objectives. But that’s kind of top of mind right now, what we do with that, on the investment side. I think three years from now, I think we’ll be well along on the cloud transition.

AI, I think we’ll have a lot more clarity about how that’s driving revenues and giving us cost benefits. And, I think we’ll be well on track to be kind of approaching that $4 billion company with a billion dollars of free cash flow.

Great. Thanks very much, Brian. Appreciate you joining.

Yeah, you bet. Thank you.

Good, thanks.

Thanks.

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