Tyler Technologies: Impressive 2030 Vision for 10% Top-Line Growth and Substantial Margin Expansion

On June 15, Tyler Technologies hosted its first analyst day in more than four years, where it emphasized its long-standing and deep relationships with government, its path to being cloud-first, and payments as a growth driver. Importantly, management provided both midterm and long-term financial targets in its Vision 2030 strategy that are slightly better than our estimates and include revenue growing 10% to 12% annually through 2030 along with $1 billion in free cash flow. We see the investor day as reinforcing our thesis that Tyler maintains the largest portfolio of government-related software solutions, is a clear leader in the space, and offers investors a long-term opportunity for steady revenue growth coupled with substantial expansion in free cash flow margins. Our fair value estimate of $475 per share is unchanged, and we continue to view shares of wide-moat Tyler as attractive.