Tyler Technologies at Oppenheimer Conference: Strategic Growth Insights

On Wednesday, 13 August 2025, Tyler Technologies (NYSE:TYL) participated in the Oppenheimer 28th Annual Technology, Internet & Communications Conference. Brian Miller, EVP and CFO, provided a strategic overview of the company’s performance and future plans. While Tyler Technologies faces challenges from macroeconomic uncertainties, it remains confident in its long-term growth prospects, driven by government efficiency initiatives and a robust cloud migration strategy.

Key Takeaways

• Tyler Technologies anticipates sequential improvements in bookings, with a focus on cloud migration.
• The company aims for around 20% SaaS growth through 2025, with high-teen growth through 2030.
• Payments transactions grew by over 21% last quarter, surpassing expectations.
• Operating margin targets exceed 30% by 2030, with a focus on M&A and share buybacks.
• Peak migration from on-prem to cloud is expected in 2027-2028.

Financial Results

• Q1 2024: Experienced deal closure delays due to macroeconomic uncertainty.
• Q2 2024: Rebounded with sequential growth in bookings.
• SaaS Growth Target: Aims for 20% growth through 2025 and high-teen growth through 2030.
• Payments Growth: Achieved 21% growth in transactions last quarter.
• Cloud Migration: Expects 80-85% of on-prem customers to migrate to the cloud by 2029-2030.
• Revenue Uplift: On-prem to cloud migration results in a 1.7x to 1.8x revenue increase.
• Operating Margin Target: Targeting over 30% operating margin by 2030.

Operational Updates

• Government Efficiency: Increased focus on efficiency is seen as a positive driver for technology adoption.
• Staffing Shortages: Local government staffing shortages drive the need for automation solutions.
• Version Consolidation: Progress in moving customers to current software versions to facilitate cloud migration.
• Cross-sell and Upsell: Emphasis on expanding product usage among existing customers.
• Integration Success: Successful integration of payment platforms with software solutions boosts growth.
• New Business: Majority of new business is cloud-based SaaS.

Future Outlook

• Peak Cloud Migration: Anticipated in 2027-2028, led by larger clients.
• New SaaS Features: Exclusively available on the cloud version, incentivizing migration.
• M&A Strategy: Focus on tuck-in acquisitions and expanding into new sub-verticals.
• Capital Allocation: Prioritizes M&A and share buybacks, with debt repayment nearly complete.
• Investor Day Plans: Considering a new Investor Day next year to update growth targets.

Q&A Highlights

• Macroeconomic Impact: Initial concerns were temporary, with improvements in Q2.
• Bookings Analysis: Bookings are complex and should be viewed over a longer term.
• Greenfield SaaS Opportunity: Significant potential in replacing legacy systems and expanding through upselling.
• Payments Business: Growth driven by increased transactions and integration with software solutions.
• Subscription as a Transaction: Innovative revenue model impacting both bookings and revenue growth.
• Operating Leverage: Ahead of schedule on long-term margin targets, with improvements expected annually.
• Capital Allocation Priorities: Focus on M&A and share buybacks, with debt largely repaid.

For a complete understanding of Tyler Technologies’ strategic direction and financial performance, readers are encouraged to refer to the full transcript below.

Full transcript - Oppenheimer 28th Annual Technology, Internet & Communications Conference:

Ken Wong, Software Analyst, Oppenheimer: Good afternoon, everyone. Welcome to the tail end of day three at the Oppenheimer Virtual Tech Conference. I’m Ken Wong, Software Analyst here at Oppenheimer. Extremely happy to have with us Brian Miller, EVP and Chief Financial Officer at Tyler. Brian, welcome.

Brian Miller, EVP and Chief Financial Officer, Tyler Technologies: Thank you. Thanks for having me.

Ken Wong, Software Analyst, Oppenheimer: So, I think just about everyone in the audience knows Tyler at this stage. So I won’t kind of dive into kind of who you guys are. But maybe one thing we did want to jump into is just since this is topical, everyone has been asking, just kind of macro doge, you guys were seeing as potentially being impacted there. We’d love to get your most current takes, most current views on kind of what we’ve seen and maybe how things are shaping up as we approach the back half of the year?

Brian Miller, EVP and Chief Financial Officer, Tyler Technologies: Yeah, I think obviously in Q1, there was a lot of noise, not just around Tyler, but in general in the market around, Doge, federal spending, and potential trickle down of federal spending impacts on at other levels of government, tariffs, you know, all the things that were causing a lot of commotion in the first quarter. Certainly, we saw some impact of that in the quarter, not so much from in terms of a real impact on demand or even a real impact on our clients, but, we did see it manifested in some delays, slowing of processes, pauses as our customers and prospects tried to figure out if, you know, if there was an impact on them, if there was something they needed to be worried about. And and so we saw some processes slowed down and delayed, and some of that reflected in in some slowness in bookings in q one. We said at the time it it it on our q one call that we believed it was mostly just timing and temporary and our view and that what we heard from discussions with clients was that, in fact, most of this really had very little impact on our customers.

Only as a reminder, only about 5%, less than 5% of our business is directly with the federal government. But state and local governments were were still analyzing, you know, what that meant to them. I think as we moved into q two, it became pretty clear that it was a temporary sort of, for the most part, a temporary impact. I think discussions we’ve had with clients, a lot of discussions we had at our user conference in May. And in fact, the analysts and investors who were there at our user conference had the same kind of feedback that pretty unanimously, in the conversations with our clients, our clients said none of this really affects them, doesn’t affect their spending with Tyler, what they might spend in the future with Tyler, their overall IT spending.

What we do think is that this sort of out sort of a a reflection of Doge, I guess, whether it’s at the federal or state or local level, and increased focus on government efficiency is in the long run a very good thing for us because ultimately technology is the way that governments become more efficient in replacing aging systems and inefficient processes that are that are driven or governed by inefficient or that are governed by inefficient older software, that that becomes a higher and higher priority and that over the long run, these systems will get replaced sooner than they otherwise would as governments think more and more about replacing systems from an efficiency or a cost benefit standpoint rather than just waiting until old systems die. So we saw really good sequential growth in bookings in Q2. I think a lot of the deals that we saw that were paused in Q1 move forward and signed in Q2. We have talked a lot about that 2024 was an exceptional booking year, especially with a lot of large contracts that that just are inherently lumpy. So we faced throughout this year really tough bookings comp on the new sort of the new logo SaaS sales, but do expect to see sequential improvement as we move through the year just as we did in Q2.

Ken Wong, Software Analyst, Oppenheimer: Got it. And I was planning on saving some of the audience follow-up for later, but do have one that somewhat ties to this and you answered most of it. But on the efficiency side, any benefit from government downsizing headcount that potentially benefits you? Or should we view that as a net negative as maybe a lot of, again, not necessarily you guys, but a lot of software vendors or maybe some more seat base? Is that a headwind?

How are you guys thinking about it? How should we think about that?

Brian Miller, EVP and Chief Financial Officer, Tyler Technologies: Yeah. For starters, we don’t really do much very, very little seat based licensing. Almost all of our licenses reflect some measure of the size of the application that we serve. So if it’s a you know, tax system, it’s the number of parcels of property. If it’s a public safety system, it’s the number of calls for service that they handle, court systems, the number of cases that they typically handle.

So for the most part, it doesn’t directly affect our pricing or our ongoing revenues from existing customers or future customers. And in most cases, especially at the local level, which is 75% or more of our business, that it’s not so much that they really expect to downsize the number of employees they have. It’s really that they don’t have enough employees already. Local governments governments at all levels, but local governments particularly have lost a lot of employees during COVID when people either left the workforce or or went to work in the private sector. They have not, for the most part, fully rebuilt those workforces.

They’ve always been short staffed, so there’s always a difficulty, just maintaining the staffing, whether it’s because of budgets or just because of difficulty attracting employees. And and, there’s sort of this this concept of this silver tsunami that is hitting government as aging workforces retire. And they have a lot of trouble, especially in technical roles like IT, attracting, retaining, paying market market rates for competing with the private sector for for employees. So, it’s not so much that they’re gonna get rid of a lot of people. It’s that they don’t have enough people to do the essential tasks that they need to do.

There aren’t enough clerks to enter data in the court system, or there aren’t enough clerks at the county clerk’s office to answer citizen calls when they call in with a question about how to get a business license. So using new technology more efficiently, things like automating data entry through the use of AI, which is a feature that we have in our court system or using agents to answer citizen questions, which is something that we’ve deployed now in three or four states with our resident assistant AI application. But that enables them to continue to do the essential things they need to do, but address the staffing shortages that they already have.

Ken Wong, Software Analyst, Oppenheimer: Understood. And so maybe circling back to the booking side of things since that seems to be where we probably encounter the most, kind of investor debate questions at the moment. So you touched on the tough comp dynamic. One other concern we hear is, look, as software investors were so used to bookings, leads billings, leads revenue, should we see potential risk to kind of forward revenue growth on the SaaS subscription side, like with the weaker bookings this year, how would you kind of best walk us through kind of what the potential impact could be downstream?

Brian Miller, EVP and Chief Financial Officer, Tyler Technologies: Yeah. Our bookings, you know, bookings is sort of a mixed value in terms of analyzing our business going forward. And when you look at the SaaS side of the bookings, we give a few different metrics there. We get bookings from new SaaS customers, kind of new logos for application, but also driving SaaS bookings are the flips that we also give the breakdown of that. So our customers are migrating from on prem to the cloud and that uplift is 1.7 or 1.8 X in revenue that we get.

We have bookings from renewals. So multi year contracts that we’ve signed in prior years that reached the end of their term and then renew for a new term. Those can be kind of staggered and lumpy. They’re not consistent from quarter to quarter. And then we have expansion.

So add on sales to existing customers, new modules, new applications, and pricing. So all those things combine to get to drive our revenue growth. And a lot of those can be very lumpy in terms of how the bookings hit. So you really kind of need to look at these things not over a quarter or two, but kind of over a year or two. And there’s also timing impact so that we sign a contract this quarter.

We might not start recognizing revenues for a quarter or two quarters or three quarters, or they may be phased in revenues. So, they don’t, you know, follow sequentially as neatly as you might like for modeling purposes. So broadly, I’d say, we think the last year was an exceptional year for bookings, especially new SaaS deals, large deals, some of which are still working their way into revenue. This year is shaping up to be a really good year. It’s just not not as good as last year in terms of the new deals.

Now last quarter, we did have bookings over total SaaS bookings growth because we had really strong expansion sales and really strong renewals. So I guess the the the top line is that we believe that the level of new business that we’re signing this year, whether it’s new names, flips, expansion, is right in line with the level that we need to support that the the growth targets that we talked about at Investor Day a couple years ago, which were kind of 20 around 20% SaaS growth through 2025 and kind of high teen SaaS growth through ’20 through the period through 2030. We’ve been running a little bit ahead of that, kind of in the low twenties. It it may accelerate as flips accelerate, and then it’ll decelerate as we kind of get on the downs downhill side of the flip trajectory. But we’re really comfortable with the bookings that we have right now and the level of sales support those growth targets that we’ve been talking about for a couple of years.

Ken Wong, Software Analyst, Oppenheimer: Understood. And as touch on accelerate as the flips accelerate, I think the public commentary has been that we should see flips kind of approach of peak in ’27, ’28 suggesting an acceleration. I guess what gives you confidence in that trajectory? How much of this is just based on what you see in the installed base, renewal timing, customer commentary? We’d love some feedback to understand the visibility that you guys have on that in that flips trajectory.

Brian Miller, EVP and Chief Financial Officer, Tyler Technologies: Yes. I mean, we still have a significant portion of our customer base that is on prem, and that cohort of customers is more heavily weighted towards large customers. So we’ve been having customers flip for now, I guess about twenty years, but really accelerating in the last four or five years. But the larger customers are slower to move, more complex roadmaps, how they fit that into their long range plans around their data centers and other priorities they have. I’d say in general, with our large customers, but really all of our customers, it’s not a matter of whether they’ll flip to the cloud, but a matter of when.

I’d say almost all of them, and again, this board now through conversations Connect, all of them understand that they’re going to move to the cloud, expect they’re going to move to the cloud, understand why and why that’s a good thing for them. So it’s more around when. And so as we have conversations with all of our customers, particularly our large customers, and we start to have a clearer, clearer idea of how it fits with their longer range IT plans, We’ve sort of slotted people in, not precisely, but into, to broader time frames. And so we really see, over the next two or three years, both the number of flips, but more particularly the average size of flips trending upward. And we really believe the peak, which will be driven by the larger customers in terms of both number of customers and dollar value of customers flipping as in the 2728 timeframe as we start to see, especially some of our larger ports customers expected to move in those time frames.

And then there’ll be a kind of a downhill side to the bell curve, and we still expect that that kind of 80 to 85% of the customer base of the on prem base will have migrated to the cloud by 02/1930. We’ve talked about some of the gating items around that. The biggest one being, the need to upgrade to the current version of the software before you move to the cloud version or when you move to the cloud. And we’ve made a lot of progress around that version consolidation, sunsetting older older versions of the product, and moving customers to that current version, which then gets them in a position to be able to move to the cloud. Courts where we have a lot of our large customers is one of those areas where we’ve particularly made a lot of progress.

So, I I think very close to a 100% of our customer base there is on either the current version or one version back, which has been a significant lift over the last few years. So that gives us more confidence around the ability of those customers to move. For example, this this year, we also told our court’s customers that this year’s release was the last time we’ll have a full release with new features that goes to on prem customers. We’ll continue to support them on prem, but going forward, new features will only be available in the cloud version. So whether you consider that a stick or a carrot, that’s something we’re clearly implementing as in more and more products as customers, you know, we’ll still get legislative changes, bug fixes, those kinds of things they need to keep running in the on prem.

But new features, a lot of AI kinds of features will only be available in the cloud version. So we think that incentive continues to make it more attractive for customers to move. Another factor that continues to be a meaningful factor around the migrations to the cloud is, the increasing incidents of ransomware and cybersecurity attacks, and the additional, security that they get when they’re in the cloud. And that continues to be a motivator for customers to move and and especially customers who do suffer an attack, often that significantly accelerates their timeline for moving to the cloud.

Ken Wong, Software Analyst, Oppenheimer: Understood. Yeah. Definitely sounds like a like maybe a worth a carrot shaped stick. So a little bit of both there. A follow-up on the cloud opportunity, someone asking in the audience, how much of this SaaS opportunity is left beyond the migration, which apparently that obviously makes sense.

You have very, very resilient customers. Is there on the new side, is there a lot left to try to capture?

Brian Miller, EVP and Chief Financial Officer, Tyler Technologies: You mean just in new business in general around moving the mix shift from the cloud or from on prem to the cloud?

Ken Wong, Software Analyst, Oppenheimer: Yeah, I guess the question just specifically greenfield SaaS opportunity. I’m assuming that greenfield opportunity probably looks very much like whatever you thought the original kind of adoption curve for governments to Tyler looks like. But, yeah, I guess to the extent you have any nuance to that question that’d be great.

Brian Miller, EVP and Chief Financial Officer, Tyler Technologies: Yeah. I mean, today high nineties percent of our new business is cloud. So that, you know, the SaaS opportunity is the new business opportunity. Virtually, there’s very, very little new licenses we’re selling back even even products like public safety, which was a little bit slower than move to the cloud now is very close to a 100% SaaS in the new business market. So, that opportunity is is kind of our overall opportunity, which continues to be a lot of replacements.

So we still think that well over half, you know, probably north of 60% of the systems that, governments use today are legacy systems. So systems either homegrown systems or systems from a vendor who is no longer competitive. Someone that had an on prem system that they sold fifteen, twenty years ago may still be supporting that system, but doesn’t have a a current technology product that anyone would buy today. So as those products reach their end of life, it’s not a replacement for replacement cycle or upgrade for the existing vendor, but it creates an opportunity for someone like Tyler to replace that system. And those continue to produce a really steady kind of a replacement market.

Historically, it’s been kind of hard for us to accelerate that pace of those changes. Today, even today, I think the average system we replace is probably more than twenty years old. And in some cases, as old as as forty or forty five years in some of the homegrown systems. So we do think that kind of tying back to that the the doge and the government efficiency push that as customers or prospects increasingly look at the opportunity to gain efficiencies by replacing these systems, they will see some acceleration or pull forward in the replacement systems that might have otherwise lasted another decade, another fifteen years until they actually died. But the people are saying, okay.

If I look if I actually make that investment, go to the effort today, there’s a real ROI to that. There’s real efficiency gains that I can get. And so maybe I won’t wait another ten years. Maybe I’ll do it now or two years from now or three years from now. So we do feel like there’s a somewhat of a pull forward.

There’s quite sort of a change in the way they look at acquiring new systems and there will be some pull forward. So a lot of opportunity there in terms of new business. And we’ve talked a lot about the importance of cross sell and upsell. So our average customer has two or three products from Tyler. They could, in most cases, eight or 10.

And so really, that’s what gives us a competitive edge as these systems turn over that buying that next system from Tyler and the next one from Tyler provides them with more value because of common technology elements, because of of the common reporting dashboards, and the way the systems interface with each other that provides an advantage from Tyler that they can’t get from another vendor. And so that huge customer base of installed systems that we have today creates that foundation to sell more and more products. And then as we add more products through either M and A or through internal R and D, that gives us more and more cross sell opportunities.

Ken Wong, Software Analyst, Oppenheimer: Makes a lot of sense. And then on the cross sell payments has been kind of a nice source of incremental growth the last five years and especially the last couple of years. Maybe help us understand what’s been kind of the core driving force there? Is this outsized growth in transactions? Is this something that’s sustainable?

How should we think about what kind of that overall payments piece of the business?

Brian Miller, EVP and Chief Financial Officer, Tyler Technologies: Yeah, transactions is really growing kind of above what their targets that we set. Again, going back to 2023, we talked about kind of a low double digits, low teens growth expectation. And last quarter we grew, I think, north of 21% in transactions. There’s a couple of things there, some of which are are more short term and some of which do support maybe longer term growth that might be above those targets that we that we previously talked about. More recently, we have seen a lot of growth that really reflects higher volumes from both new and existing customers.

So it’s people doing more things online, which is something that we expect will continue. And that’s always been sort of built into our growth assumptions that we’ve continued to work with our clients who want to drive more transactions online, and and we’re having success there. So we’re seeing higher volumes. We’re also seeing the growth from new transaction or payments customers that we’ve added. We’ve talked about in the last few quarters as we’ve really gone to market with this integrated payments offering, typing, integrating our payments platform with software solutions that present bills, facilitate payments, things like utility billing systems, traffic court systems, licensing and permitting systems, property tax systems.

So as we’ve integrated our payments platforms with those, we’ve been able to sell payments both with new software deals bundled with that and going back to our installed base of customers who use those utility systems or port systems and adding payments to those. So each of the last few quarters, we’ve talked about adding 100, 200, 300 customers, adding anywhere from three, three point five million to eight or 9,000,000 of new ARR each quarter. And there’s a lag of a quarter or two typically from when we sign those deals to when we start to see the payments revenues. And so we’re we’re starting to see the impact of of that that new business hit on the revenue line. And and there’s still a lot of runway ahead in terms of both the the installed base and and new deals.

We also have seen some some of that elevated growth coming from revenue sharing arrangements we have with third party payment processors, which is kind of the old Tyler payments before the NIC acquisition, where we really were kind of a reseller of third party payment processing, and we get a revenue share. Some of those partners have had pricing increases in the last year that have that has flowed through to our rev share. I think we’re probably about capped out on those. So I wouldn’t expect that to to be a big factor going forward. And then I guess the last thing really is around, what I’ve sort of referred to as SaaS as a transaction type revenues.

So we’ve seen a number of instances, where we’ve sold software solutions and are getting paid for those through transaction revenues. Probably the biggest example is the California State Parks deal, which is the largest contract Tyler’s ever signed, to provide a complete outdoor recreation solution for the California state parks. We’re also processing all of the payments associated with all of the revenues that collect through the state parks and doing some other services there. But we’re not getting a SaaS fee for that. We’re getting paid by, getting convenience fees, that are are added on to charges that users pay when they make a campground reservation or, with a kayak, any of the revenue streams that go through the state parks.

So we might get a $2 convenience fee on Long Road Campground reservation. So the state gets the benefit of the new software, but they don’t have to appropriate a line item in their budget to pay for it. It gets paid for by these user fees. So it shows up in transaction revenues. So effect, it impacts SaaS bookings and SaaS revenue growth, I guess in a negative way because it’s showing up in transactions.

We still get the same revenues or or, you know, potentially better revenues, but it shows up on a different revenue line. So that’s part of the reason for the higher growth above our targets on the transaction side. And SaaS revenue growth actually would even be a little bit higher if they were in the traditional model. So we’ve done that in a number of outdoor recreation type situations. We’re doing some digital motor vehicle titling solutions for at the state level that also were paid for with transaction fees.

So there I wouldn’t certainly wouldn’t say it’s the primary way we’re we’re, selling software these days. But there are instances where it makes sense that provides a solution that’s attractive to the customer. We’re comfortable with that kind of revenue stream, even though it sort of falls in a hybrid of SaaS and transactions. And I expect that’ll continue to be, a factor going forward. So as we, you know, look at potentially another Investor Day early next year that to the extent we reset some of those targets, we’ll take into account that that’s really something that wasn’t contemplated when we kind of laid out this model a couple of years ago.

Ken Wong, Software Analyst, Oppenheimer: Got it. So super interesting dynamic there. How much of that shift to subscription as a transaction is facilitated by Tyler versus maybe at the request of a customer? And then maybe secondarily, I don’t know if it’s a there’s a way for you to size or quantify, but do you find that this maybe elevates the size of a transaction or gives customers more theoretical budget to work with or is it still roughly net neutral in terms of what the contract would have looked like?

Brian Miller, EVP and Chief Financial Officer, Tyler Technologies: Yeah. It’s kind of hard to put them side by side. But, generally, because we are taking a little bit more risk, generally, these like like, the California parks arrangement, for example, we replaced they had previously several vendors. They had a payments provider. They had multiple software providers, someone managing call centers.

So they had multiple providers. So we were able to provide all of those services under a transaction based arrangement because we do have the payment processing capabilities. We’re comfortable. We have the software, you know, industry leading outdoor recreation software, and we were comfortable with all of that being paid for through transaction fees. The transactions are generally pretty predictable or reliable.

I mean, there’s generally a lot of history about how many people visit the California State Parks and how many people tour the Hearst Castle and, you know, all these different revenue types. But there is some risk because those transactions have to take place and the volumes can fluctuate. So we, expect to get sort of compensated by a little bit higher level of revenues than if it were a straight fixed fee SaaS transaction, business. I I think it it’s it only really applies to some applications. There’s gotta be an underlying transaction associated with it.

So really couldn’t sell a payroll system that way. You know, there’s nobody to tack a fee onto, or an accounts payable system. But, in something like outdoor recreation or motor vehicle registrations where there’s already a transaction and there’s a fee going to the government, it’s it’s easy to put a convenience fee on top of that. So in the in the case of California where they do have pretty significant budget pressures, this was a great solution that we could provide that full full package of solutions under a model that wouldn’t require them to to appropriate funds out of the state budget. We we do simpler systems other places where they do pay a SaaS fee.

So it depends on the philosophy in different states or or different jurisdictions, but we think it gives us a competitive advantage because, not every vendor, every software vendor has that kind of a model.

Ken Wong, Software Analyst, Oppenheimer: Got it. Okay. Maybe shifting gears away from some of the top line dynamics, how should we think about the operating leverage in the business? We’ve had you guys have given a fair amount of margins over the last few years, but we’re also in a bit of an investment cycle. We’re waiting on some flips.

What’s the right way to think about the pacing of profitability?

Brian Miller, EVP and Chief Financial Officer, Tyler Technologies: Yeah. As we talked about those margin targets of 30% plus operating margin by 02/1930, which implied about a 100 basis points a year of operating margin improvement, starting in 2323, with most of that coming at the gross margin line. I think here as we sit halfway through 2025, we’re sort of maybe a bit ahead of pace in terms of achieving those targets. I’d say more of that has come at the OpEx line than the gross margin line. So most of what’s left to come is on the gross margin line.

A lot of that coming from cloud operations, version consolidation from scale with AWS as we continue to grow our our hosting operation there from ultimately getting customers on one version of every product. You know, all those things contribute have made some contribution to date, but most of that yet to come. I’d say, when we look at the impact of AI both on potential revenue growth, but also on internal efficiencies around things like professional services and implementation efficiencies around our support organization efficiencies, and our development operations. We’re seeing some impact today, but most of that is yet to come. And and actually most of that wasn’t contemplated, back in the targets we set in 2023.

AI wasn’t wasn’t really being discussed much then. I would say that we so I’d say our our gross margin objectives, still a lot of that ahead of us, but but certainly well on target for those. On the OpEx side, I think we’ve we’ve achieved a lot there already, but still expect that as we move forward, we’ll continue to see some pretty good leverage, especially around both sales and marketing and around G and A. We’ve been able to hold headcount in both of those areas, certainly the growth level that’s well below our overall revenue growth level, and we expect that to continue to be the case going forward. AI is a factor there, but a lot of areas of focus around standardizing platforms, whether it’s back end systems, processes that may have been different across different areas of Tyler as we start to make progress on standardizing those.

Those are giving us additional efficiencies around the OpEx line. So I think that as we move forward, we’ll continue to see leverage around those areas as well. So feel really good about where we are at this point towards those longer term targets and believe there’s upside from those that will continue to unfold.

Ken Wong, Software Analyst, Oppenheimer: Understood. And with all this talk about incremental leverage, better profitability, you’re going to free up some cash as you close-up these data centers, you’ll probably get a little more cash back with all the tax dynamics with the OBBB. How should we think about prioritizing where you guys are going to funnel that cash? What’s the capital allocation priorities? Like do they maybe shift now that you have a little more capacity to work with from a cash flow perspective?

Brian Miller, EVP and Chief Financial Officer, Tyler Technologies: Yeah, don’t know that there’s a big shift. I mean, for the last couple of years paying down our term debts from the NIC acquisition is a big focus and that’s behind us. We have enough cash, way more than enough cash to pay the convert off next spring when that matures, if that’s the best move for us. So with the cash flow, got a lot of capital dry powder. I think m and a still is the biggest potential use of our cash.

We’ve said this for the last couple of years, the bar has been really high, especially as we’ve not only just focused on paying down debt, but also been focused on a lot of really important initiatives in the company around the cloud transition, payments growth, integrating NIC that have that we’ve wanted to focus on rather than putting a lot of m and a on top of the the the management management’s plates. They might see you at management really mean the people that are running our business units and running those businesses day to day. I think we’ve made a lot of progress there, and so we’re we’re kind of more open to m and a right now. So I would expect that you’ll start to see us, potentially become more active over the next couple of years. We think there are a lot of opportunities for both tuck in acquisitions around existing products, or technologies that as well as potential acquisitions that expand into sub verticals where we really don’t have a big presence today.

So I think a greater focus on M and A. And I’ve also, expect that, opportunistic buybacks probably rise in priority now, now that the debt term debt’s been paid off. So I think that’s probably would be a bigger factor going forward as well.

Ken Wong, Software Analyst, Oppenheimer: Got it. I think with that, we are right up on time, just just as I planned. So, Brian, thank you for taking time out of your day to interact with us and investors and to the audience. Thank you guys for participating. I really appreciate everyone for being involved in the Virtual Tech Conference.

Brian Miller, EVP and Chief Financial Officer, Tyler Technologies: Thanks again for hosting and thanks everyone for participating.

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