Tyler (TYL) 8-K Tyler Technologies Reports Earnings For Fourth Quarter 2015

Exhibit 99.1

Tyler Technologies Reports Earnings For Fourth Quarter 2015

Quarterly adjusted EBITDA grew 31 percent

PLANO, Texas – Feb. 17, 2016 – Tyler Technologies, Inc. (NYSE: TYL) today announced financial results for the fourth quarter and year ended December 31, 2015.

Fourth Quarter 2015 Financial Highlights:

• Total revenue was $158.9 million, up 24.7 percent from $127.4 million for the fourth quarter of 2014. Organic growth was 15.3 percent.

• Recurring revenue from maintenance and subscriptions was $98.4 million, an increase of 23.7 percent compared to the fourth quarter of 2014, and comprised 61.9 percent of fourth quarter 2015 revenue.

• Operating income was $19.8 million, a decrease of 19.6 percent from $24.6 million for the fourth quarter of 2014. Results for the quarter were impacted by approximately $5.5 million of acquisition-related expenses.

• Net income was $8.6 million, or $0.23 per diluted share, down 43.7 percent compared to $15.3 million, or $0.43 per diluted share, for the fourth quarter of 2014. The effective tax rate was 55.9 percent compared to 38.1 percent for the fourth quarter of 2014.

• Cash flows from operations were $19.1 million, down 32.5 percent compared to $28.3 million for the fourth quarter of 2014.

• Non-GAAP total revenue was $162.1 million, up 27.2 percent from $127.4 million for the fourth quarter of 2014.

• Non-GAAP operating income was $40.7 million, up 33.5 percent from $30.5 million for the fourth quarter of 2014.

• Adjusted EBITDA was $42.3 million, up 30.5 percent compared to $32.4 million for the fourth quarter of 2014.

• Non-GAAP net income was $22.4 million, or $0.59 per diluted share, up 16.3 percent compared to $19.3 million, or $0.54 per diluted share, for the fourth quarter of 2014.

• Total backlog was $844.5 million, up 20.3 percent from $702.0 million at December 31, 2014. Software-related backlog (excluding appraisal services) was $797.0 million, an increase of 21.2 percent compared to $657.3 million at December 31, 2014.

• On November 16, 2015, Tyler acquired all of the common stock of privately held New World Systems Corporation (New World) for $360 million in cash and approximately 2.1 million shares of Tyler common stock. New World has more than 2,000 public sector customers and more than 470 employees. New World’s operating results are included in Tyler’s consolidated results from the date of acquisition.

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Tyler Technologies Reports Earnings

For Fourth Quarter and Fiscal 2015

Feb. 17, 2016

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Full Year 2015 Financial Highlights:

• Total revenue was $591.0 million, up 19.9 percent from $493.1 million in 2014. Organic growth was 16.7 percent.

• Recurring revenue from maintenance and subscriptions was $357.5 million, an increase of 18.9 percent compared to 2014, and comprised 60.5 percent of 2015 revenue.

• Royalty revenue from Microsoft Dynamics^® AX, which is included in software licenses and royalties, was $3.4 million, up 12.4 percent compared to $3.0 million in 2014.

• Operating income was $108.0 million, an increase of 13.9 percent from $94.8 million in 2014.

• Net income was $64.9 million, or $1.77 per diluted share, up 10.1 percent compared to $58.9 million, or $1.66 per diluted share, in 2014. The effective tax rate was 40.2 percent compared to 37.6 percent in 2014.

• Cash flows from operations were $89.0 million, down 27.9 percent compared to $123.4 million in 2014.

• Non-GAAP total revenue was $594.2 million, up 20.5 percent from $493.1 million in 2014.

• Non-GAAP operating income was $149.2 million, up 28.0 percent from $116.6 million in 2014.

• Adjusted EBITDA was $157.5 million, up 26.8 percent compared to $124.3 million in 2014.

• Non-GAAP net income was $92.7 million, or $2.54 per diluted share, up 25.2 percent compared to $74.0 million, or $2.09 per diluted share, in 2014.

“We are pleased with Tyler’s fourth quarter results, as we again achieved organic growth greater than 15 percent,” said John S. Marr Jr., Tyler’s president and chief executive officer. “New World’s operations, which were included in our results for approximately seven weeks of the fourth quarter of 2015, contributed $13 million of non-GAAP revenue, and we expanded our non-GAAP operating margin by 120 basis points to 25.1 percent.

“Our effective tax rate was significantly higher than expected at 55.9 percent for the fourth quarter and 40.2 percent for the year, as a high level of excess tax benefits related to stock option exercises resulted in the limitation of certain tax deductions. Our effective tax rate was also impacted by certain non-deductible acquisition-related costs.

“The integration of New World is well underway. Our employees and clients are enthusiastic about the addition of New World to the Tyler family and the opportunities that the combination provides. We appreciate the extraordinary efforts of our team of professionals as they work to integrate our products and operations while continuing to provide our clients with exceptional service.

“Activity in the local government software market continues to be good, and with the inclusion of New World, our backlog at December 31 reached $845 million, a 20 percent increase from last year. With our strong financial position and cash flow, we plan to accelerate our investment in product development in 2016 with expected R&D expense of more than $47 million. We believe that increasing the investment in our products beyond our previously planned level will better position us to continue to expand our industry-leading position in the public sector software market over the long term.”

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Tyler Technologies Reports Earnings

For Fourth Quarter and Fiscal 2015

Feb. 17, 2016

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Guidance for 2016

As of February 17, 2016, Tyler Technologies is providing the following guidance for the full year 2016:

• GAAP total revenues are expected to be in the range of $750 million to $765 million, and non-GAAP total revenues are expected to be in range of $765 million to $780 million.

• GAAP diluted earnings per share are expected to be approximately $1.90 to $2.02.

• Non-GAAP diluted earnings per share are expected to be approximately $3.33 to $3.45.

• Pretax non-cash, share-based compensation expense is expected to be approximately $30 million to $31 million.

• Fully diluted shares for the year are expected to be between 38.5 million and 39.5 million shares.

• The effective tax rate is expected to be in the range of 38.0 percent to 39.5 percent.

• Capital expenditures are expected to be between $31 million and $33 million, including approximately $10 million related to real estate. Total depreciation and amortization expense is expected to be between $49 million and $50 million, including approximately $36 million of amortization of acquisition intangibles.

Conference Call

Tyler Technologies will hold a conference call on Thursday, February 18, at 10:00 a.m. EST to discuss the company’s results. The company is offering participants the opportunity to register in advance for the conference through the following link:http://dpregister.com/10078298. Registered participants will receive an email with a calendar reminder and a dial-in number and PIN that will allow them immediate access to the call on February 18, 2016.

Participants who do not wish to pre-register for the call may dial in using 844-861-5506 (U.S. callers) or 412-317-6587 (international callers), and ask for the “Tyler Technologies” call. A replay will be available two hours after completion of the call through February 24, 2016. To access the replay, please dial 877-344-7529 (U.S. callers), 412-317-0088 (international callers) and 855-669-9658 (Canada callers) and reference passcode 10078298.

The live webcast and archived replay can also be accessed atwww.tylertech.com/investors.

About Tyler Technologies, Inc.

Tyler Technologies (NYSE: TYL) is a leading provider of end-to-end information management solutions and services for local governments. Tyler partners with clients to empower the public sector — cities, counties, schools and other government entities — to become more efficient, more accessible and more responsive to the needs of citizens. Tyler���s client base includes more than 14,000 local government offices in all 50 states, Canada, the Caribbean, the United Kingdom and other international locations. Forbes has named Tyler one of “America’s Best Small Companies” eight times and the company has been included six times on the Barron’s 400 Index, a measure of the most promising companies in America. More information about Tyler Technologies, headquartered in Plano, Texas, can be found atwww.tylertech.com.

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Tyler Technologies Reports Earnings

For Fourth Quarter and Fiscal 2015

Feb. 17, 2016

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Non-GAAP Financial Measures

Tyler Technologies has provided in this press release financial measures that have not been prepared in accordance with generally accepted accounting principles (GAAP) and are therefore considered non-GAAP financial measures. This information includes non-GAAP revenues, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP earnings per diluted share, EBITDA, adjusted EBITDA and non-GAAP cash from operations. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating Tyler’s ongoing operational performance. Tyler believes the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures. Non-GAAP financial measures discussed above exclude write-downs of acquisition-related deferred revenue and acquired leases, share-based compensation expense, employer portion of payroll taxes on employee stock transactions, acquisition-related costs, and expenses associated with amortization of intangibles arising from business combinations. We use these measures and believe they are useful to investors because they provide additional insight in comparing results from period to period.

Non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial information prepared in accordance with GAAP. The non-GAAP measures used by Tyler Technologies may be different from non-GAAP measures used by other companies. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, which has been provided in the financial statement tables included below in this press release.

Forward-looking Statements

This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical in nature and typically address future or anticipated 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-looking statements. We believe there is a reasonable basis for our forward-looking statements, but they are inherently subject to risks and uncertainties and actual results could differ materially from the expectations and beliefs reflected in the forward-looking statements. We presently consider the following to be among the important factors that could cause actual results to differ materially from our expectations and beliefs: (1) changes in the budgets or regulatory environments of our clients, primarily local and state governments, that could negatively impact information technology spending; (2) our ability to protect client information from security breaches and provide uninterrupted operations of data centers; (3) our ability to achieve growth or operational synergies through the integration of acquired businesses, while avoiding unanticipated costs and disruptions to existing operations; (4) material portions of our business require the Internet infrastructure to be adequately maintained; (5) our ability to achieve our financial forecasts due to various factors, including project delays by our clients, reductions in transaction size, fewer transactions, delays in delivery of new products or releases or a decline in our renewal rates for service agreements; (6) general economic, political and market conditions; (7) technological and market risks associated with the development of new products or

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Tyler Technologies Reports Earnings

For Fourth Quarter and Fiscal 2015

Feb. 17, 2016

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services or of new versions of existing or acquired products or services; (8) competition in the industry in which we conduct business and the impact of competition on pricing, client retention and pressure for new products or services; (9) the ability to attract and retain qualified personnel and dealing with the loss or retirement of key members of management or other key personnel; and (10) costs of compliance and any failure to comply with government and stock exchange regulations. A detailed discussion of these factors and other risks that affect our business are described in our filings with the Securities and Exchange Commission, including the detailed “Risk Factors” contained in our most recent annual report on Form 10-K. We expressly disclaim any obligation to publicly update or revise our forward-looking statements.

###

(Comparative results follow)

Contact:  Brian K. Miller

Executive Vice President - CFO

Tyler Technologies, Inc.

972-713-3720

brian.miller@tylertech.com

16-10

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended December 31,					Twelve Months Ended December 31,
	2015			2014		2015		2014
Revenues:
Software licenses and royalties	$	14,432		$	12,524	$	59,008	$	49,065
Subscriptions		30,660			23,713		111,933		87,848
Software services		38,087			28,227		139,852		113,821
Maintenance		67,708			55,792		245,537		212,696
Appraisal services		5,728			5,705		25,065		21,802
Hardware and other		2,301			1,479		9,627		7,869
Total revenues		158,916			127,440		591,022		493,101
Cost of revenues:
Software licenses and royalties		449			461		1,632		1,900
Acquired software		2,976			485		4,440		1,858
Software services, maintenance and subscriptions		77,521			61,662		285,340		236,363
Appraisal services		3,525			3,544		15,922		14,284
Hardware and other		1,223			797		6,501		5,325
Total cost of revenues		85,694			66,949		313,835		259,730
Gross profit		73,222			60,491		277,187		233,371
Selling, general and administrative expenses		42,507			28,130		133,317		108,260
Research and development expense		8,615			6,615		29,922		25,743
Amortization of customer and trade name intangibles		2,320			1,153		5,905		4,546
Operating income		19,780			24,593		108,043		94,822
Other (expense) income, net		(240	)		167		381		(355	)
Income before income taxes		19,540			24,760		108,424		94,467
Income tax provision		10,922			9,443		43,555		35,527
Net income	$	8,618		$	15,317	$	64,869	$	58,940
Earnings per common share:
Basic	$	0.24		$	0.46	$	1.90	$	1.79
Diluted	$	0.23		$	0.43	$	1.77	$	1.66
Weighted average common shares outstanding:
Basic		35,334			33,275		34,137		33,011
Diluted		37,864			35,661		36,552		35,401

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2015			2014			2015			2014
Reconciliation of non-GAAP total revenues
GAAP total revenues	$	158,916		$	127,440		$	591,022		$	493,101
Non-GAAP adjustments:
Add: Write-downs of acquisition-related deferred revenue		3,186			—			3,186			—
Add: Amortization of acquired leases		37			—			37			—
Non-GAAP total revenues	$	162,139		$	127,440		$	594,245		$	493,101
Reconciliation of non-GAAP gross profit and margin
GAAP gross profit	$	73,222		$	60,491		$	277,187		$	233,371
Non-GAAP adjustments:
Add: Write-downs of acquisition-related deferred revenue		3,186			—			3,186			—
Add: Amortization of acquired leases		37			—			37			—
Add: Share-based compensation expense included in cost of revenues		1,031			582			3,380			2,177
Add: Amortization of acquired software		2,976			485			4,440			1,858
Non-GAAP gross profit	$	80,452		$	61,558		$	288,230		$	237,406
Non-GAAP gross margin		49.6	%		48.3	%		48.5	%		48.1	%
Reconciliation of non-GAAP operating income and margin
GAAP operating income	$	19,780		$	24,593		$	108,043		$	94,822
Non-GAAP adjustments:
Add: Write-downs of acquisition-related deferred revenue		3,186			—			3,186			—
Add: Amortization of acquired leases		37			—			37			—
Add: Share-based compensation expense		5,723			3,932			20,182			14,819
Add: Employer portion of payroll tax related to employee stock transactions		1,173			346			1,506			514
Add: Acquisition-related costs		5,533			—			5,875			—
Add: Amortization of acquired software		2,976			485			4,440			1,858
Add: Amortization of customer and trade name intangibles		2,320			1,153			5,905			4,546
Non-GAAP adjustments subtotal	$	20,948		$	5,916		$	41,131		$	21,737
Non-GAAP operating income	$	40,728		$	30,509		$	149,174		$	116,559
Non-GAAP operating margin		25.1	%		23.9	%		25.1	%		23.6	%
Reconciliation of non-GAAP net income and earnings per share
GAAP net income	$	8,618		$	15,317		$	64,869		$	58,940
Non-GAAP adjustments:
Add: Total non-GAAP adjustments to operating income		20,948			5,916			41,131			21,737
Less: Tax impact related to non-GAAP adjustments		(7,171	)		(1,972	)		(13,318	)		(6,658	)
Non-GAAP net income	$	22,395		$	19,261		$	92,682		$	74,019
Non-GAAP earnings per diluted share	$	0.59		$	0.54		$	2.54		$	2.09
Detail of share-based compensation expense
Cost of software services, maintenance and subscriptions	$	1,031		$	582		$	3,380		$	2,177
Selling, general and administrative expenses		4,692			3,350			16,802			12,642
Total share-based compensation expense	$	5,723		$	3,932		$	20,182		$	14,819

TYLER TECHNOLOGIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended December 31,				Twelve Months Ended December 31,
	2015		2014		2015		2014
Reconciliation of adjusted EBITDA
GAAP net income	$	8,618	$	15,317	$	64,869	$	58,940
Amortization of customer and trade name intangibles		2,320		1,153		5,905		4,546
Depreciation and other amortization included in cost of revenues, SG&A and other expenses		5,668		2,518		13,669		10,061
Interest expense included in other expense, net		292		12		292		374
Income tax provision		10,922		9,443		43,555		35,527
EBITDA	$	27,820	$	28,443	$	128,290	$	109,448
Write-downs of acquisition-related deferred revenue		3,186		—		3,186		—
Share-based compensation expense		5,723		3,932		20,182		14,819
Acquisition-related costs		5,533		—		5,875		—
Adjusted EBITDA	$	42,262	$	32,375	$	157,533	$	124,267
Reconciliation of non-GAAP net cash provided by operating activities
GAAP net cash provided by operating activities	$	19,100	$	28,306	$	89,013	$	123,437
Non-GAAP adjustments:
Add: Acquisition-related costs		5,533		—		5,875		—
Non-GAAP net cash provided by operating activities	$	24,633	$	28,306	$	94,888	$	123,437

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

	December 31,		December 31,
	2015		2014
ASSETS
Current assets:
Cash and cash equivalents	$	33,087	$	206,167
Accounts receivable, net		176,360		112,660
Income tax receivable		21,080		19
Current investments and other current assets		37,688		18,190
Total current assets		268,215		337,036
Accounts receivable, long-term		2,777		1,761
Property and equipment, net		101,112		65,910
Deferred income taxes		—		5,504
Other assets:
Goodwill		653,666		124,142
Other intangibles, net		295,378		34,722
Cost method investment		15,000		—
Non-current investments and other assets		20,422		737
Total assets	$	1,356,570	$	569,812
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	55,945	$	43,627
Deferred revenue		281,627		189,212
Total current liabilities		337,572		232,839
Long-term debt		66,000		—
Deferred revenue, long term		3,115		—
Deferred income taxes		91,026		—
Shareholders’ equity		858,857		336,973
Total liabilities and shareholders’ equity	$	1,356,570	$	569,812

TYLER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2015			2014			2015			2014
Cash flows from operating activities:
Net income	$	8,618		$	15,317		$	64,869		$	58,940
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization		7,988			3,669			19,574			14,605
Share-based compensation expense		5,723			3,932			20,182			14,819
Provision for losses-accounts receivable		1,756			1,897			1,756			1,897
Excess tax benefit from exercise of share-based arrangements		(34,513	)		(12,685	)		(45,314	)		(19,402	)
Deferred income tax benefit		(8,599	)		(3,804	)		(7,956	)		(3,804	)
Changes in operating assets and liabilities, exclusive of effects of acquired companies		38,127			19,980			35,902			56,382
Net cash provided by operating activities		19,100			28,306			89,013			123,437
Cash flows from investing activities:
Cost of acquisitions, net of cash acquired		(333,514	)		—			(339,961	)		(3,242	)
Purchase of cost method investment		—			—			(15,000	)		—
Purchase of market security investments		(2,516	)		—			(31,907	)		—
Proceeds from market security investments		900			—			900			808
Additions to property and equipment		(3,976	)		(1,306	)		(12,501	)		(9,343	)
Decrease in other		5			3			10			222
Net cash used by investing activities		(339,101	)		(1,303	)		(398,459	)		(11,555	)
Cash flows from financing activities:
Increase in net borrowings on revolving line of credit		66,000			—			66,000			—
Purchase of treasury shares		—			—			(645	)		(22,817	)
Contributions from employee stock purchase plan		1,304			1,107			4,671			4,144
Proceeds from exercise of stock options		14,791			7,941			23,160			14,680
Debt issuance costs		(2,134	)		—			(2,134	)		—
Excess tax benefit from exercise of share-based arrangements		34,513			12,685			45,314			19,402
Net cash provided by financing activities		114,474			21,733			136,366			15,409
Net (decrease) increase in cash and cash equivalents		(205,527	)		48,736			(173,080	)		127,291
Cash and cash equivalents at beginning of period		238,614			157,431			206,167			78,876
Cash and cash equivalents at end of period	$	33,087		$	206,167		$	33,087		$	206,167