TYL
Tyler Technologies
Recurring SaaS
★ Quality 31/100Price today
$364.03
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See what it is worthcharlieapp.co
What this business is made of
The business
Tyler is the bureaucratic plumbing of the U.S. government: expensive to install, impossible to rip out.
Tyler Technologies sells mission-critical software to the public sector: courts, local governments, schools, and state agencies across the U.S. It charges recurring SaaS subscriptions plus implementation and payment services. FY2025 revenue of $2.3B with FCF of $0.6B.
Once a county runs its courts or payroll on Tyler, switching is a political and operational nightmare — contracts last decades. The government doesn't change vendors on a whim. Even so, the 46% gross margin gives away that this isn't a pure toll booth; there's a lot of low-margin service in the mix.
Revenue history
From $1.6B to $2.3B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $2.3B · FY2025
Of every $100 in sales, $86 goes to costs and operations; $14 is left as net profit (14% margin).
Catalysts and risks
Migration of on-premise clients to the cloud: each conversion lifts recurring revenue and incremental margin.
Growth of the payments business (citizen transactions), which scales without selling new licenses.
Federal and state funding for modernizing public software supports demand through 2026.
Slow sales cycles: governments take years to decide and depend on political budgets.
46% gross margin is low for a SaaS — the weight of services limits cash conversion.
At 16.96x with a 10% CAGR, the price already prices in flawless execution. Little room for error.
Charlie's note
“Paying nearly 17 times for a business growing at 10% with government clients who would take decades to leave isn't a steal, but it's no gift either — the 46% gross margin is a reminder that there's too much low-quality service in the mix to call it pure software. For a moat this sticky, you wait patiently and let the price do the work.”
Analysis · June 2026
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