Investor Presentation · Data-as-a-Service platform . that sits above existing “data silos” within public sector agencies. Strengthens all major Tyler solutions . and furthers

Investor PresentationFebruary 2020

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Tyler has included in this presentation “forward-looking statements” within the meaning of Section 27A of the Securities Act of1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical in nature and typically address future oranticipated events, trends, expectations or beliefs with respect to our financial condition, results of operations or business.Forward-looking statements often contain words such as “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates,”“plans,” “intends,” “continues,” “may,” “will,” “should,” “projects,” “might,” “could” or other similar words or phrases. Similarly,statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-lookingstatements. We believe there is a reasonable basis for our forward-looking statements, but they are inherently subject to risksand uncertainties and actual results could differ materially from the expectations and beliefs reflected in the forward-lookingstatements. We presently consider the following to be among the important factors that could cause actual results to differmaterially from our expectations and beliefs: (1) changes in the budgets or regulatory environments of our customers, primarilylocal and state governments, that could negatively impact information technology spending; (2) our ability to protect clientinformation from security breaches and provide uninterrupted operations of data centers; (3) our ability to achieve growth oroperational synergies through the integration of acquired businesses, while avoiding unanticipated costs and disruptions toexisting operations; (4) material portions of our business require the Internet infrastructure to be adequately maintained; (5) ourability to achieve our financial forecasts due to various factors, including project delays by our customers, reductions intransaction size, fewer transactions, delays in delivery of new products or releases or a decline in our renewal rates for serviceagreements; (6) general economic, political and market conditions; (7) technological and market risks associated with thedevelopment of new products or services or of new versions of existing or acquired products or services; (8) competition in theindustry in which we conduct business and the impact of competition on pricing, customer retention and pressure for newproducts or services; (9) the ability to attract and retain qualified personnel and dealing with the loss or retirement of keymembers of management or other key personnel; and (10) costs of compliance and any failure to comply with government andstock exchange regulations. These factors and other risks that affect our business are described in our filings with the Securitiesand Exchange Commission, including the detailed “Risk Factors” contained in our most recent annual report on Form 10-K. Weexpressly disclaim any obligation to publicly update or revise our forward-looking statements.

Forward-Looking Statements

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One of a Kind Company. Outgrowing a Growth Market.

Providerof software solutions to local / state governments

EPS growth

since 2002

Annualgrowthin $18Bmarket

Tyler annual revenue

growth since 2002

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#1 20%CAGR

7-8% 13%CAGR

T H E T Y L E R S T O R Y


Powerful business model

One of a kind company

Large untapped market

Multiple growth and profit drivers

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Long-termSustained Growth

• EPS growth averaging ~20% annually

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A T A G L A N C E

Leading Provider of Software Solutions to the Public Sector

Key Product Suites(approx. % of revenues)

Powerful Model

ERP/Financial, 44%

Courts & Justice, 17%

Public Safety, 11%

Appraisal & Tax, 9%

Business Process Mgmt,

6%

Civic Services, 4%

K-12 Schools, 4%

Land & Vital Records, 3%

Data & Insights, 2%

26,000installations

$1.09B

67%

67 bpsannually

1.2x

2019 Non-GAAP revenues

Recurring revenues

Non-GAAP operating margin expansion – avg. last 10 yrs.Cash flow from ops to Non-GAAP net income– avg. last 5 yrs.

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$134

$1,091

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E

13%CAGR

Consistent Long-term Revenue Growth

Total Non-GAAP Revenues (a)

($M)

67%Recurring• Maintenance• SaaS/Subscriptions

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11% organic, 2% acquisitions(a) 2002 through 2015 are reported under ASC 605. 2016 forward are reported under ASC 606.

$1,205 -$1,225

Our Business Model is Proven and Scalable…

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

+571%

100

Index2010=100

Free Cash Flow

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Free cash flow growing faster than earnings

+360%

+278%

Recurring Revenues

Total Revenues

+421% Operating Profit

Delivering a Consistent Record of Strong Performance

TotalRevenues

(Non-GAAP)RecurringRevenues

EPS(Non-GAAP)

FreeCash Flow

$289M

$1,091M

2010 2019

$159M

$731M

2010 2019

$0.92

$5.30

2010 2019

$34M

$213M

2010 2019

16%CAGR

18%CAGR

21%CAGR

23%CAGR

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Using Strong Cash Flow to Build Shareholder Value

Invest in the Business• Industry leading product development• Capex of $36M - $38M in 2020

Cash FlowCumulative cash flow from operations 2015-2019 = $982M, 1.2X non-GAAP net income

$300M+ of cash and investments and no debt

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Strategic Acquisitions

Share Repurchases• 27.9M shares repurchased

since 2002• 39M shares outstanding at

12/31/19

• 31 acquisitions since 2006• Add new products and technologies

or expand client base• Acquired Socrata, Inc. for $150M in

cash on 4/30/18• Acquired MicroPact, Inc. for $197M in

cash on 2/28/19

Expand for new opportunities in federal, state and local spaceAdd key competencies with MicroPact’s successful utilization of partner networkLeverage strategic off-shore operations in PhilippinesBring on solid management team with similar culture and philosophy

MicroPact Acquisition Expands our TAM, Including Entry into the Federal Space

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Market leader in open data and data driven analytics for the public sector

Data-as-a-Service platform that sits above existing “data silos” within public sector agencies

Strengthens all major Tyler solutions and furthers our Connected Communities initiative

Clients include 21 federal agencies, 29 States, 350+ cities & counties, with a focus on the “Government 500”

Socrata Acquisition Positions us as the Leader in Public Sector Data

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Unmatched Capabilities Provide Strong Competitive Advantage

Robust SaaS public sector solutions

National presence

Scalable solutions

“Evergreen” model for upgrades

Industry leader– high barriers to entry

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Singular focus on public sector 1

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Strong Competitive Advantages – Tilt the Landscape in Tyler’s Favor

Geographicscope

National

Local /Regional

Multi-focus

Single-focus

Focus on local government

OracleThomsonReuters

SAP

Infor

Single- focus, national player

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CentralSquare

Solutionsuniquely designed for the

public sector

Our Winning Client Proposition

Leader in R&Dand innovation

Strong Financial Resources

The Tyler Advantage

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“Evergreen” model for upgrades

Our Innovation Engine – Core to Our Success

Industry leading product development– ~15% of revenues, ~ 1,500 software developers

Enhancements– new features and

technologies delivered through “evergreen” upgrades

Continuous improvement of client

experience− High client retention− Increased recurring

revenues

Drives competitive strength

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Single Focus Drives High Retention

Depth of Relationship

Stic

kine

ss

Newclients

ServiceSatisfaction

Follow-on solutions& cross-sell

Loyalty

Reference

~98%Retention

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Exclusive Focus High Retention ~ 98%







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Large Opportunity to Upgrade Government Software

>88,000

>450,000

1/3 provided by competitive vendors

2/3 provided by non-competitive vendors– systems 20+ years old

– “green screens”; COBOL– unsupported systems– home grown systems

O P P O R T U N I T Y

LocalGovernments

Total Potential Systems

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CountiesSchool districts

Local agencies

Cities & towns

3,00013,600

35,000

36,000

Municipal Computer Systems Make Headlines: Long Growth Runway

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ILLUSTRATION: TOMI UM FOR BLOOMBERG BUSINESSWEEK

March 4, 2019 Issue

BOTTOM LINE - Behind San Francisco’s gleaming office towers packed with tech workers, city assessors are struggling to manage with software that predates “WarGames” and “Tron.”

Massive Growth Potential for Tyler – Just Scratched the Surface

Large Market Opportunity Market Growing Steadily

7-8%annually

Total Market (1)

$21B

AddressableMarket Today (2)

$9B

Tyler$1.2B

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(1) Source – Gartner - Local & Regional Government and Primary & Secondary Education spending on applications and vertical specific software and company estimates

(2) Source – Company estimate







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• Cash flow and EPS growing faster than revenues

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Our Business Model Will Continue to Deliver Strong, Sustainable Long-Term Growth

7-8%

>15% annually

MarketGrowth

Long-termEPS Growth

• Multiple top linegrowth drivers

• Leverage scale

1. Gain marketshare

2. Marginexpansion

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Key Growth and Profit Drivers Going Forward

• Maintain high win rates– e.g. Courts >85%

• Expand relationships with existing clients• Expand margins• Expand e-filing and payments business

– recurring, high margins

• Continue to penetrate larger governments

• Continue to expand market share and margins• Broaden product line through acquisitions and

internal builds• Continue gradual transition toward more SaaS mix• Expand transaction-based revenues

– E-filing, on-line dispute resolution– Payments

• Strategic acquisitions, $15-$50M in revenues• International opportunities

Near-Term: 1-3 Years

Longer-Term:

4-6 Years

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A C L O S E R L O O K

Accelerating Our Move to the Cloud

Long-term Transition to Subscription • Fastest growing revenue stream,

+34% in 2019• More than 50% of new software bookings

are SaaS, trending upward• Entered into strategic collaboration

agreement with Amazon Web Servicesin Q4 2019• Driving innovation to optimize

products for the cloud• Leveraging AWS to grow our cloud

capabilities• Expanding long-term subscription margins

$0M

$50M

$100M

$150M

$200M

$250M

$300M

20052019

Subscription

Licenses

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Revenues

Maintenance Maintenance MaintenanceMaintenance

TransactionsTransactions Transactions

TransactionsSaaS

SaaSSaaS

SaaS

Q4 2016 Q4 2017 Q4 2018 Q4 2019

Annual Recurring Revenues Continue to Surge

+36%$560M+14%

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$493M +22%

$636M+14%

$770M+21%

+39%+24%

+29%

Note: Annual recurring revenues are calculated as non-GAAP revenues for the quarter multiplied by 4.

A C L O S E R L O O K

Leverage Scale, Expand Margins

Factors Driving Long-Term Margin Growth

• Changing revenue mix –more recurring revenues

• Highly leverageable model– high margins for incremental

license, subscription & maintenance revenues

– G&A expenses grow slower than revenues

– Significant increase in product investments, including acquisitions over the last 2 years

28.2%26.6%

25.3%

35%+

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Goal

Tyler Blended OperatingMargin

(Non-GAAP (a))

A highly leverageable business

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(a) 2007 through 2015 are reported under ASC 605. 2016 forward are under ASC 606.

Backlog Remains Strong High Revenue Visibility

$281M$340M $381M

$552M

$702M

$845M

$1,049M

$1,226M $1,247M

$1,458M

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Backlog of Signed Contracts (a)

Adding 20 new clients every week

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+17%YOY

+2%YOY

(a) 2009 through 2015 are reported under ASC 605. 2016 forward are under ASC 606.

+17%YOY

$935M

$1,086M

2018 2019

2019 Results

Diluted EPS (2)

($)Revenues (1)

($M)

$3.68$3.65

2018 2019

$4.80

(1) Non-GAAP Revenues exclude write-downs of acquisition-related deferred revenue and subleases.(2) Non-GAAP EPS excludes write-downs of acquisition-related deferred revenue and subleases, stock compensation expense, acquisition-

related costs, and amortization of acquisition intangibles.Please see reconciliation of non-GAAP measures to GAAP included in our press release filed with the SEC.

$5.30

+16.1% +10.4%

$1,091M Non-GAAP

GAAP GAAP

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GAAP

GAAP

$940MNon-GAAP

Non-GAAP Non-GAAP

(4)

$1.086B

2019 2020 Guidance

2020 Outlook (1)

Diluted EPS (3)

($)Revenues (2)

($M)

$3.65

2019 2020 Guidance

(1) Most recent 2020 guidance provided on 2/12/20.(2) Non-GAAP Revenues exclude write-downs of acquisition-related deferred revenue and subleases.(3) Non-GAAP EPS excludes write-downs of acquisition-related deferred revenue and subleases, stock compensation expense, acquisition-

related costs, and amortization of acquisition intangibles.Please see reconciliation of non-GAAP measures to GAAP included in our press release filed with the SEC.

$5.30

+5.7%-7.9%

$1.205B-$1.225B

Non-GAAP

GAAP

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GAAP

$1.091BNon-GAAP

Non-GAAP

GAAP

GAAP$3.81 -$3.93

Non-GAAP$5.60-$5.72

$1.204B -$1.224B

+10.4%-12.2%

I N S U M M A R Y






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www.tylertech.com

Brian Miller – Executive VP & CFO

[email protected]

972-713-3720

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Documents

Investor Presentation · Data-as-a-Service platform . that sits above existing “data silos” within public sector agencies. Strengthens all major Tyler solutions . and furthers